/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/121009.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, October 9, 2012, Vol. 16, No. 281 Headlines 10 MAPLE: Bank Won't Be Sanctioned for Holding on to Funds 1039012 ONTARIO: Seeks Recognition of BIA Proceedings in Ontario 1039012 ONTARIO: Chapter 15 Case Summary 1555 WABASH: Proofs of Claim Due October 30 1617 WESTCLIFF: Amends List of 20 Largest Unsecured Creditors 1946 PROPERTY: Hiring Coffin & Driver as Bankruptcy Counsel 1946 PROPERTY: U.S. Trustee Unable to Form Committee 1946 PROPERTY: Files Schedules of Assets and Liabilities 360 GLOBAL: Files Form 10-K for Year 2007 4100 WEST GRAND: $1.6MM Transfer to TY Grand Not Fraudulent A&S GROUP: Can Hire A. Keith Logue as Bankruptcy Counsel A&S GROUP: Court Approves GGG Inc. as Financial Consultant AKAL IX: Voluntary Chapter 11 Case Summary ALLIED IRISH: Meets 9% Core Tier 1 Ratio EBA Recommendation AMERICAN AIRLINES: Loses Bid to Stop Union Election AMERICAN AIRLINES: Pilots Seek Stay of CBA Rejection Ruling AMERICAN AIRLINES: Says Seat Problem Found After Grounding Planes AMERICAN APPAREL: Had $51.1 Million Total Net Sales in September AMERICAN ARCHITECTURAL: Proofs of Claim Due Nov. 11 AMG CAPITAL II: Fitch Rates Trust Preferred Securities 'BB-' ANTS SOFTWARE: Rik Sanchez Appointed SVP - Worldwide Sales ARCAPITA BANK: Unsecureds Balk at Terms of SP Financing ARCAPITA BANK: Standard Chartered Opposes Silver Point Financing ARCAPITA BANK: Mediation on Tide's Lift Stay Motion on Oct. 30 ASPEN GROUP: Has 5.6MM Shares Available for Issuance Under Plan ATWATER PUBLIC: S&P Cuts SPUR on Wastewater Revenue Bonds to 'BB+' AWAS AVIATION: S&P Puts 'BB' Corp. Credit Rating on Watch Positive AXION INTERNATIONAL: Allen Kronstadt Discloses 30.5% Equity Stake AXION INTERNATIONAL: Samuel Rose Discloses 36.1% Equity Stake AXION INTERNATIONAL: MLTM Lending Discloses 28.6% Equity Stake BALLARD POWER: Gets NASDAQ Non-Compliance Notice BANKATLANTIC BANCORP: Inks 3-Year Servicing Pact with Bayview BEAR ISLAND: Plan Confirmation Hearing Continued Until Oct. 17 BLUE COAT: S&P Gives 'BB-' Rating on $525-Mil. Credit Facilities BUFFALO GULF: Moody's Affirms 'Ba1' Rating on $275MM Term Loan BWAY HOLDING: S&P Puts 'B' CCR on Watch over Acquisition Agreement CALPINE CORP: Fitch Rates $845-Mil. First Lien Notes 'BB/RR1' CANNERY CASINO: Moody's Hikes Corp. Family Rating to 'B3' CANTOR FITZGERALD: Moody's Lowers Senior Debt Ratings to 'Ba1' CANYONS AT DEBEQUE: U.S. Trustee Unable to Form Creditors Panel CARPENTER CONTRACTORS: Amends Credit Agreement for Exit Financing CENTRAL EUROPEAN: Reports $1.3 Billion Restated Net Loss in 2011 CENTRAL EUROPEAN: Had $33.5-Mil. Net Loss in First Half of 2012 CENTRAL PLAINS: S&P Affirms 'B' Rating on 2 Revenue Bond Issues CHINA GINSENG: Had $2.9-Mil. Net Loss in Fiscal 2012 CIRCLE ENTERTAINMENT: Borrows $285,000 from Directors, Officers COMMUNICATIONS CORP: Moody's Affirms B3 CFR/PDR, Outlook Stable CONTEC HOLDINGS: Court Confirms Plan of Reorganization CORD BLOOD: Sells Stake in stellacure GmbH to Medivision CORNER INVESTMENT: S&P Gives 'B-' Corp. Credit Rating; Outlook Neg CUNNINGHAM LINDSEY: S&P Assigns 'B' Counterparty Credit Rating CYCLONE POWER: Has $2.5-Mil. Stock Purchase Pact with GEM Global DEWEY & LEBOEUF: Prosecutors Look Into Disclosures to Lenders DEWEY & LEBOEUF: Jones Day May Seek Final Allowance of LAD Fees DEWEY & LEBOEUF: Hiring Wescher as Auctioneer to Sell Artwork DIALOGIC INC: Regains Compliance with NASDAQ's $1 Bid Price Rule DIANA LYNN CARTEE: Case Summary & 4 Unsecured Creditors DIGITAL DOMAIN: Rosen Law Firm Alerts Investors for Class Action ELEPHANT TALK: Mobile and Security Revenue Up Roughly 106% Y/Y EMMIS COMMUNICATIONS: Sells Emmis Interactive to Marketron ENTERTAINMENT PROPERTIES: Fitch Rates $125 Million Notes 'BB' EVANS OIL: Soneet Kapila Appointed as CRO and Interim Manager EVANS OIL: SS&G Parkland OK'd to Provide Restructuring Services EVANS OIL: Approved to Sell Assets Pursuant to Amended APA FIRST UNION BAPTIST: Bronx Church Files Ch. 11 to Stop Foreclosure FLETCHER INT'L: Files Schedules of Assets and Liabilities FLETCHER INT'L: Richard J. Davis Appointed as Chapter 11 Trustee FLETCHER INT'L: Meeting of Creditors Continued Until Oct. 12 FRIENDSHIP DAIRIES: Files List of 20 Largest Unsecured Creditors FTMI REAL ESTATE: Fla. Assisted-Living Home Sold for $17-Mil. GEOKINETICS INC: Holders Approve Director Exculpation Provision GLOBAL AVIATION: Wins OK to Amend CBA With Pilots GLOBAL AVIATION: Has Until Dec. 31 to Propose Chapter 11 Case GLOBAL BANK: S&P Retains 'BB+/B' Foreign Currency Ratings GRAYMARK HEALTHCARE: Amends Membership Purchase Pact with FHA HILEX POLY: Moody's Affirms 'B3' Corp. Family Rating HOMELAND SECURITY: Trevor Stoffer Named to Board of Directors HBB REAL ESTATE: Voluntary Chapter 11 Case Summary HRK HOLDINGS: Has Until Nov. 1 to Propose Chapter 11 Plan IRVINE SENSORS: Extends Forbearance with PFG Until Oct. 31 ISTAR FINANCIAL: Moody's Assigns 'B1' Senior Secured Debt Rating JOHN STANTON: Chapter 7 Trustee Seeks to Recover Rounder Stock KEOWEE FALLS: Approved to Sell Substantially All Assets for $17MM LAKELAND DEVELOPMENT: Governmental Proofs of Claim Due Oct. 31 LAKELAND DEVELOPMENT: Exclusivity Periods Extended Thru January LAKELAND DEVELOPMENT: Has Authority to Use Cash Thru January LAND O'LAKES: Moody's Assigns 'Ba1' CFR/PDR; Outlook Stable LDK SOLAR: LDK New Energy Has Forbearance with Lenders for 1 Year LEHMAN BROTHERS: Has Deal With European Unit for $38-Bil. Claims LIN TELEVISION: Moody's Affirms 'B2' CFR; Rates Sr. Notes 'B3' LOUISIANA RIVERBOAT: Files List of 20 Largest Unsecured Creditors MACCO PROPERTIES: Plan Outline Hearing Set for Nov. 14 MANITOWOC CO: Moody's Affirms 'B2' CFR; Rates Senior Notes 'B3' MANITOWOC CO: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable MBI ENERGY: S&P Withdraws 'B' CCR on Lack of Sufficient Info MCJUNKIN RED: Moody's Raises Corp. Family Rating to 'B1' MCJUNKIN RED: S&P Affirms 'B+' Corp. Credit Rating; Outlook Pos MEDICAL ALARM: Sees Robust Sales from Promotional Activities MF GLOBAL: $205MM Dispute With Conoco Goes to District Court MICHAELS STORES: Moody's Upgrades Rating on $800MM Notes to 'B3' MORGANS HOTEL: Amends Stockholder Rights Pact with Computershare MULTISPECIALTY DEVELOPMENT: Case Summary & Unsecured Creditor MUNDY RANCH: Judge David Thuma Won't Handle Chapter 11 Case NESBITT PORTLAND: Can Use Lender's Cash Collateral Through Nov. 14 NESBITT PORTLAND: Taps Susi, Griffith as Bankruptcy Lawyers NESBITT PORTLAND: Hiring Alvarez & Marsal as Financial Advisors NESBITT PORTLAND: Files Amended List of Top 20 Unsecured Creditors NET ELEMENT: Closes Merger with Cazador, Now Trades Under "NETE" NEWPAGE CORP: Files Amended Joint Plan & Disclosure Statement NEWPAGE CORP: Moody's Rates $500MM Sr. Secured Term Loan '(P)B1' NEXEO SOLUTIONS: S&P Keeps 'B' Rating on $525MM Term Loan Facility NEXSTAR BROADCASTING: S&P Puts 'B' CCR on Watch on Purchase Plans NORTEL NETWORKS: Powers of CCAA Monitor Expanded NRG INC: Moody's Affirms 'Ba3' CFR/PDR, Outlook Remains Negative OAKLAND POLICE DEPARTMENT: Plaintiffs Seek Receivership PATRIOT COAL: Sierra Opposing Extension of Deadline PATRIOT COAL: Faruqi & Faruqi Probes Potential Securities Fraud PATRIOT COAL: Time to Remove Pending Civil Actions Extended PENNFIELD CORPORATION: Files for Ch. 11 With Offer From Carlisle PENNFIELD CORP: Meeting to Form Creditors' Panel Set for Oct. 12 PETCO ANIMAL: Moody's Affirms 'B2' Corp. Family Rating PLAZA NORTH: Case Summary & 20 Largest Unsecured Creditors PRO MACH: Moody's Affirms 'B2' CFR/PDR; Outlook Stable PW COMMERCIAL: Liable to Claims Against Pinewave Affiliate RAHA LAKES: Real Estate Company Files Chapter 11 in Los Angeles REALOGY INC: Moody's Lifts CFR to Caa1; Under Review for Upgrade RIVER CANYON: Hires Seter Vander Wall as Counsel on UWSD Claim ROOFING ATLANTA: Case Summary & 20 Largest Unsecured Creditors ROOFING SUPPLY: Sr. Sec. Term Loan No Impact on Moody's 'B2' CFR RYAN INTERNATIONAL: Must File Plan and Disclosures by Nov. 16 RYAN INTERNATIONAL: Financing Period Extended Until Nov. 16 RYAN INTERNATIONAL: Can Employ Plante & Moran as Tax Consultants RYDER MEMORIAL: S&P Cuts Rating on $10MM Series 1996 Bonds to BB- SANGUI BIOTECH: Accumulated Losses Cue Going Concern Doubt SEARLE BLATT: Inventory, Trade Names to Be Sold for $200,000 SMART ONLINE: Sells Add'l $350,000 Convertible Subordinated Note SPIRIT REALTY: S&P Raises Corporate Credit Rating to 'B' on IPO SPRINT NEXTEL: Keith Cowan Staying with Company Until Jan. 2 STILLWATER ASSET: Involuntary Chapter 11 Case Summary SUNOCO INC: Acquisition Cues Fitch to Lift Sr. Unsec. Note Rating SUSAN M HUTSON: Updated Case Summary & Creditors' Lists T3 MOTION: Due Date of Perry Trebatch Note Extended to Oct. 16 THETA CORP: Moody's Downgrades Counterparty Rating to 'Ba1' THOMPSON CREEK: To Save $100MM Plus from New Mine Plan, Job Cuts TOWNSHIP OF IRVINGTON: Moody's Affirms 'Ba1' Rating on G.O. Debt TRANSTAR HOLDING: Term Loan Changes No Impact on Moody's Ratings TWG CAPITAL: Court Clears to Auction Assets Next Month UNIGENE LABORATORIES: Approves 2012 Employee Incentive Program UPPER CRUST: Case Summary & 20 Largest Unsecured Creditors VILLAGE OF RIVERDALE: Moody's Lowers GOULT Debt Rating to 'B2' VISANT HOLDING: S&P Affirms 'B+' Corp. Credit Rating; Outlook Neg W.R. GRACE: Targets 4th Qtr 2013 Emergence From Chapter 11 W.R. GRACE: CIM Urban Wants Claim Transfer Affirmed W.R. GRACE: Asbestos PD & PI Liability Remains at $1.7 Billion W.R. GRACE: EPA Proposes High Standards for Asbestos Clean-Up WILSONART LLC: Moody's Assigns 'B2' CFR/PDR; Outlook Stable WILSONART LLC: S&P Assigns Preliminary 'B+' Corp. Credit Rating WPCS INTERNATIONAL: Multiband Does Not Own Common Shares * Moody's Says Private Student Loan Default Rate Remains High * Moody's Says US Covenant Quality Hits Record Low in September * Moody's Says US Local Government Sector Remains Negative * Epiq Says Chapter 11 Bankruptcy Filings Reaching 4-Year Low * McDonald Hopkins Elects Five New Members * Large Companies With Insolvent Balance Sheets ********* 10 MAPLE: Bank Won't Be Sanctioned for Holding on to Funds ---------------------------------------------------------- Bankruptcy Judge Alan Jaroslovsky declined to impose sanctions on Westamerica Bank for failing to turn over funds to the estate of 10 Maple Associates LLC immediately upon the Debtor's bankruptcy filing. According to the Judge, the time Westamerica held on to the funds was only a few weeks, during which time 10 Maple suffered no real harm, and the funds were eventually turned over voluntarily. Prior to the petition date, 10 Maple initiated an out-of-court work-out with Westamerica. The parties signed a series of standstill agreements, pursuant to which all tenants of 10 Maple's property were instructed to remit their rent to a blocked account maintained by Westamerica and Westamerica was given a security interest in these funds. Negotiations broke down, the standstill agreements expired, and on Sept. 30, 2011, 10 Maple filed its Chapter 11 petition. 10 Maple then requested turnover of the funds in the blocked account, which continued to receive and retain post-petition rents. Westamerica held onto the funds until Nov. 8, 2011, then turned them over. Neither party disputes that the funds in the blocked account were cash collateral of Westamerica. "The court does not feel that, under the circumstances of this case, monetary sanctions are warranted," Judge Jaroslovsky said. Judge Jaroslovsky, however, said Westamerica cannot charge 10 Maple, directly or indirectly, whether by affirmative claim or setoff, for any attorneys' fees or other costs associated with its retention of the blocked account. A copy of the Court's Oct. 3, 2012 Memorandum on Motion for Contempt is available at http://is.gd/eiQST1from Leagle.com. About 10 Maple Associates Based in Sonoma, California, 10 Maple Associates, LLC, was formed as a tenancy in common for tax reasons in 2006 and remained as such until late 2009, when it became a limited liability company. There were 15 investors in the project, taking title as tenants in common. 10 Maple filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 11-13639) on Sept. 30, 2011. Judge Alan Jaroslovsky oversees the case. Michael St. James, Esq., at St. James Law P.C., serves as the Debtor's counsel. In its petition, 10 Maple estimated assets and debts of $1 million to $10 million. The petition was signed by Leslie B. Seely, III, co-managing member. 1039012 ONTARIO: Seeks Recognition of BIA Proceedings in Ontario ---------------------------------------------------------------- The trustee of 1039012 Ontario Inc., doing business as Hummer Transportation, an Ontario-based operator of intestate motor carrier business, to stay any proceedings in the U.S., while it undergoes a restructuring under the Bankruptcy and Insolvency Act in Ontario, Canada. The trustee filed a Chapter 15 petition (Bankr. S.D. Ind. Case No. 12-11797) in Indianapolis on Oct. 3 In October 2006, Kimberly Spoa-Harty and Jesse Harty commenced a lawsuit against the Debtor and Hummer Transportation Inc. in Valparaiso, Indiana. In December 2010, the Indiana Court of Appeals affirmed a judgment of $5.22 million against the Debtor and Hummer. In June 2011, insurer National Continental Insurance Company paid the sum of $842,000 in partial satisfaction of the judgment. The Hartys also filed an involuntary Chapter 7 case against Hummer (Bankr. E.D. Calif. Case No. 11-60663) on Sept. 26, 2011. On Sept. 23, 2011, the Hartys filed an application pursuant to the BIA in the Ontario Superior Court of Justice in Bankruptcy and Insolvency. In October 2011, the Ontario Court entered a bankruptcy order, adjudging the Debtor a bankrupt and appointing Pollard & associates Inc. as trustee. 1039012 ONTARIO: Chapter 15 Case Summary ---------------------------------------- Chapter 15 Debtor: 1039012 Ontario Inc. dba Hummer Transportation Pollard & Associates Inc., Trustee 31 Wright Street Richmond Hill ON L4C4A2 Chapter 15 Case No.: 12-11797 Chapter 15 Petition Date: October 3, 2012 Court: Southern District of Indiana (Indianapolis) Judge: James K. Coachys Chapter 15 Debtor's Counsel: Edward R Cardoza, Esq. Elliott D. Levin, Esq. RUBIN & LEVIN, P.C. 342 Massachusetts Ave Ste 500 Indianapolis, IN 46204 Tel: (317) 860-2931 Fax: (317) 453-8617 E-mail: ecardoza@rubin-levin.net edl@rubin-levin.net Estimated Assets: $500,000 to $1,000,000 Estimated Debts: $1,000,000 to $10,000,000 The petition was signed by Angela K. Pollard, president of Pollard & Associates Inc. 1555 WABASH: Proofs of Claim Due October 30 ------------------------------------------- The U.S. Bankruptcy Court set Oct. 30, 2012, as the deadline for creditors to file proofs of claim in the Chapter 11 case of 1555 Wabash LLC. Governmental entities are required to send their proofs of claim by Nov. 11, 2012. 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. 1617 WESTCLIFF: Amends List of 20 Largest Unsecured Creditors ------------------------------------------------------------- 1617 Westcliff, LLC, filed with the U.S. Bankruptcy Court for the Central District of California amended list of its 20 largest unsecured creditors disclosing: Name of Creditor Nature of Claim Amount ---------------- --------------- ------ Access Exterminator Service, Inc. Pest Control-Vendor $60 AT&T Utilities $31 Barry's Industrial Services Building Maintenance - Vendor $1,755 Bemus Landscape Landscape Services - Vendor $1,070 California Coast Plumbers, Inc. Vendor $1,096 Cosco Fire Protection Notice Purposes - Vendor Unknown Federal Express Vendor $18 Gary & Shawn Rettig Capital Account Contribution $336,000 2651 Waverly Drive Newport Beach, CA 92663 Healthy Buildings International Inc. Vendor $1,300 High Rise Glass & Door Vendor $440 Horizon Lighting Vendor $574 James White CPA Billing Services - Vendor $1,600 Keith S. Holland Elevator Service - Vendor Unknown Keller, Weber & Debrott Attorneys Fess $160,000 Orange County Pest Control Utilities $90 Sign Specialists Corp. Vendor $41 Southern California Edison Utilities $12,000 The Gas Company Utilities $200 Universal Building Maintenance Janitorial Services $7,635 Waste Management Utilities $605 The original list of top unsecured creditors was reported in the Aug. 8, 2012 edition of the TCR. About 1617 Westcliff 1617 Westcliff, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-19326) on Aug. 2, 2012 in Santa Ana. The Debtor estimated assets of $10 million to $50 million and liabilities of $1 million to $10 million. Gary Rettig, president of Rettig Portfolio, Inc., signed the Chapter 11 petition. Bankruptcy Judge Mark S. Wallace oversees the case. D. Edward Hays, Esq., at Marshack Hays LLP, serves as the Debtor's counsel. 1946 PROPERTY: Hiring Coffin & Driver as Bankruptcy Counsel ----------------------------------------------------------- 1946 Property, LLC, has filed an amended application seeking approval to employ Coffin & Driver, PLLC, as counsel. Coffin & Driver will advise and represent the Debtor with respect to all reorganization, litigation and general corporate law matters, as well as any other matters that may arise in the context of the Chapter 11 case. Coffin & Driver will charge its normal billing rates for attorneys and legal assistants. Vickie L. Driver and Patrick J. Coffin will charge their normal hourly rate of $345 for services rendered in the case. Coffin & Driver will provide associate attorney assistance to the Debtor for hourly rates ranging from $150 to $295 per hour, and legal assistant or law clerk services, when appropriate, for hourly rates ranging from $50 to $115 per hour. The firm will request reimbursement of out-of-pocket expenses. As of Petition Date, the firm received a total of $5,000 in cash retainer from non-debtor funds. Additionally, since the Petition Date, the firm has received a $20,000 in non-debtor funds. The firm attests it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About 1946 Property 1946 Property, LLC, is a Texas liability company. The Debtor's sole manager is Edward Reiss. The Debtor owns a 252-unit condominium community located at 1946 Northeast Loop 410, in San Antonio, Texas. The Company filed a bare-bones Chapter 11 petition (Bankr. W.D. Tex. Case No. 12-52489) in San Antonio on Aug. 7, 2012. Bankruptcy Judge Leif M. Clark presides over the case. Vickie L. Driver, Esq., at Coffin & Driver, PLLC, represents the Debtor. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. 1946 PROPERTY: U.S. Trustee Unable to Form Committee ---------------------------------------------------- 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 1946 Property, LLC. The United States Trustee has attempted to solicit creditors interested in serving on the Unsecured Creditors' Committee from the 20 largest unsecured creditors. After excluding governmental units, secured creditors and insiders, the U.S. Trustee has been unable to solicit sufficient interest in serving on the Committee, in order to appoint a proper Committee. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. About 1946 Property 1946 Property, LLC, is a Texas liability company. The Debtor's sole manager is Edward Reiss. The Debtor owns a 252-unit condominium community located at 1946 Northeast Loop 410, in San Antonio, Texas. The Company filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 12-52489) in San Antonio on Aug. 7, 2012. Bankruptcy Judge Leif M. Clark presides over the case. Vickie L. Driver, Esq., at Coffin & Driver, PLLC, represents the Debtor. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. 1946 PROPERTY: Files Schedules of Assets and Liabilities -------------------------------------------------------- 1946 Property LLC filed with the Bankruptcy Court its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $10,292,760 B. Personal Property $54,097 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $10,853,459 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $1,537,977 ----------- ----------- TOTAL $10,346,858 $12,391,437 About 1946 Property 1946 Property, LLC, is a Texas liability company. The Debtor's sole manager is Edward Reiss. The Debtor owns a 252-unit condominium community located at 1946 Northeast Loop 410, in San Antonio, Texas. The Company filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 12-52489) in San Antonio on Aug. 7, 2012. Bankruptcy Judge Leif M. Clark presides over the case. Vickie L. Driver, Esq., at Coffin & Driver, PLLC, represents the Debtor. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. 360 GLOBAL: Files Form 10-K for Year 2007 ----------------------------------------- 360 Global Investments filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing net income of $36.30 million on $0 of revenue for the year ended Dec. 31, 2007, compared with a net loss of $89.12 million on $17.26 million of revenue for the year ended Dec. 31, 2006. The Company's balance sheet at Dec. 31, 2007, showed $250,000 in total assets, $250,000 in total liabilities and $0 in total stockholders' equity. The Hall Group, CPAs, in Dallas, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2007. The independent auditors noted that the Company has suffered significant losses and will require additional capital to develop its business until the Company either (1) achieves a level of revenues adequate to generate sufficient cash flows from operations; or (2) obtains additional financing necessary to support its working capital requirements. In addition, the Company has filed for Chapter 11 bankruptcy protection in order to reorganize and work out its debt arrangements. These conditions raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-K is available for free at: http://is.gd/8QSQal On Dec. 12, 2008, 360 Global's Disclosure Statement and Plan of Reorganization was confirmed by United States Bankruptcy Court for the District of Nevada. As described in the Global Plan, the Company's business plan is made up of two activities. First, undertaking the administrative, accounting, SEC related, and all other work necessary to prepare and file updated financial statements and annual and quarterly reports with the SEC and any other governmental organizations, in order to re-establish Reorganized Global as a fully reporting public company and re-list its common stock on a nationally recognized stock exchange or market quotation system. To accomplish this goal, Reorganized Global's plan is to complete the following SEC filings, which Reorganized Global will complete as soon as practical taking into account the general economic climate: * 10Q for the 3rd quarter of 2007 - already filed * 10K annual report and audit for the year ended Dec. 31, 2007 * 10Q for the 1st quarter of 2008 * 10Q for the 2nd quarter of 2008 * 10Q for the 3rd quarter of 2008 * 10K annual report and audit for the year ended Dec. 31, 2008 * 10Q for the 1st quarter of 2009 * 10Q for the 2nd quarter of 2009 * 10Q for the 3rd quarter of 2009 * 10K annual report and audit for the year ended Dec. 31, 2009 * 10Q for the 1st quarter of 2010 * 10Q for the 2nd quarter of 2010 * 10Q for the 3rd quarter of 2010 * 10K annual report and audit for the year ended Dec. 31, 2010 * 10Q for the 1st quarter of 2010 * 10Q for the 2nd quarter of 2010 * 10Q for the 3rd quarter of 2010 * 10K annual report and audit for the year ended Dec. 31, 2010 * 10Q for the 1st quarter of 2011 * 10Q for the 2nd quarter of 2011 * 10Q for the 3rd quarter of 2011 * 10K annual report and audit for the year ended Dec. 31, 2011 * 10Q for the 1st quarter of 2012 About 360 Global 360 Global Investments, formerly 360 Global Wine Company, is a publicly traded investment holding company that has invested in a number of diverse business activities and that has targeted a number of industries for future investment. 360 Global is domiciled in the state of Nevada and its corporate headquarters are located in Los Angeles, Calif. 360 Global Wine Company, Inc., filed for Chapter 11 protection (Bankr. D. Nev. Case No. 07-50205) on March 7, 2007. 4100 WEST GRAND: $1.6MM Transfer to TY Grand Not Fraudulent ----------------------------------------------------------- 4100 West Grand, LLC, failed to advance on its lawsuit against TY Grand LLC to avoid and recover transfers alleged to be fraudulent pursuant to 11 U.S.C. Sections 544, 548 and 740 ILL. COMP. STAT. Sections 160/5 and 160/6. Bankruptcy Judge Jacqueline P. Cox in Chicago entered judgment for TY Grand, holding that the Debtor received more than what was transferred to the Defendant. Chicago-based TY Grand is engaged in the business of making loans on real estate. TY Grand acquired interest in a 2007 loan extended by Charter One Bank to the Debtor. The $2.1 million loan was secured by commercial real estate located at 4100 West Grand Avenue, Chicago, Illinois. On Dec. 31, 2010, the Debtor defaulted on the Loan. Royal Bank of Scotland, successor in interest to Charter One Bank, assigned the Loan Documents to TY Grand on March 29, 2011. The Loan Documents were purchased by TY Grand for $515,000. The Debtor contributed $110,000 of the sale price. The remaining $405,000 was paid by TY Grand. Pursuant to the transactions, the Debtor was then liable on the $2.5 million debt to TY Grand. Eventually, TY Grand received $485,000 from the Debtor's estate before Sept. 29, 2011, and property worth $1,115,000 on Sept. 30, 2011. According to Judge Cox, TY Grand received $1,600,000 whereas the Debtor received a release of a $2.5 million debt. Fraudulent transfer liability is triggered when a plaintiff receives less than what was transferred, the judge pointed out. The lawsuit is, 4100 WEST GRAND LLC, Plaintiff, v. TY GRAND LLC, Defendant, Adv. Proc. No. 11-02278 (Bankr. N.D. Ill.). A copy of the Court's Oct. 4, 2012 Memorandum Opinion is available at http://is.gd/JF6dJUfrom Leagle.com. 4100 West Grand LLC, owner of a commercial real estate located at 4100 West Grand Avenue, Chicago, Illinois, filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-42873) on Oct. 22, 2011. Richard L. Hirsh & Associates PC serves as the Debtor's counsel. In its petition, the Debtor scheduled assets of $1,049,689 and debts of $1,067,749. A list of the Company's 18 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ilnb11-42873.pdf The petition was signed by Ljubomir Sopcic, managing member. A&S GROUP: Can Hire A. Keith Logue as Bankruptcy Counsel -------------------------------------------------------- A&S Group, Inc., sought and obtained permission from the U.S. Bankruptcy Court to employ A. Keith Logue as attorney. The firm attests it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Logue will undertake this representation at his standard hourly rate of $350. Mr. Logue received a retainer of $10,000. About A&S Group Tucker, Georgia-based A&S Group, Inc., aka A&S Marbel and Granite Imports, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-72662) in Atlanta, on Sept. 9, 2012. The Debtor is an importer and distributor of decorative ceramic tile and mosaics, and natural stone products, most of which are used for wall and floor applications and counter and table tops in residential and commercial properties. The Debtor's customer base includes local, regional and national retailers, home centers, developers and retailers. Judge Wendy L. Hagenau oversees the case. The Law Office of A. Keith Logue, Esq., serves as the Debtor's counsel. The Debtor estimated assets and debts of $10 million to $50 million. The petition was signed by Sami Durukan, president. A&S GROUP: Court Approves GGG Inc. as Financial Consultant ---------------------------------------------------------- A&S Group, Inc. sought and obtained permission from the U.S. Bankruptcy Court to employ GGG, Inc., as financial and restructuring consultant. The firm will, among other things, provide these services: a. analysis of the Debtor's financial condition and cash needs; b. analysis of the Debtor's restructuring options; and c. location of and obtaining of cash to fund a restructuring (if necessary). Katie S. Goodman, the managing partner for GGG, is expected to be the primary person working on the case. She is billed at the rate of $350. Should other partners work on the case they will bill at the rate of $300 per hour. GGG and Ms. Goodman attest that they are "disinterested persons" as the term is defined in Section 101(14) of the Bankruptcy Code. About A&S Group Tucker, Georgia-based A&S Group, Inc., aka A&S Marbel and Granite Imports, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-72662) in Atlanta, on Sept. 9, 2012. The Debtor is an importer and distributor of decorative ceramic tile and mosaics, and natural stone products, most of which are used for wall and floor applications and counter and table tops in residential and commercial properties. The Debtor's customer base includes local, regional and national retailers, home centers, developers and retailers. Judge Wendy L. Hagenau oversees the case. The Law Office of A. Keith Logue, Esq., serves as the Debtor's counsel. The Debtor estimated assets and debts of $10 million to $50 million. The petition was signed by Sami Durukan, president. AKAL IX: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: AKAL IX Management LLC aka LaQuinta Inn & Suites 6501 Henneman Way McKinney, TX 75070 Bankruptcy Case No.: 12-42734 Chapter 11 Petition Date: October 4, 2012 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: John J. Gitlin, Esq. LAW OFFICES OF JOHN GITLIN 5339 Spring Valley Rd. Dallas, TX 75254 Tel: (972) 385-8450 E-mail: johngitlin@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Parminder Singh, manager. ALLIED IRISH: Meets 9% Core Tier 1 Ratio EBA Recommendation ----------------------------------------------------------- Allied Irish Banks, p.l.c., notes the announcements made by the European Banking Authority and the Central Bank of Ireland regarding the final assessment of the capital exercise and fulfilment of the EBA December 2011 Recommendation, which shows the following result for Allied Irish Banks, p.l.c. Allied Irish meets the 9% Core Tier 1 ratio including the sovereign buffer as stated in the EBA December 2011 recommendation. The EBA Recommendation on the creation of temporary capital buffers to restore market confidence was adopted by the Board of Supervisors on Dec. 8, 2011, to address the difficult situation in the EU banking system, especially with regard to the sovereign exposures, by restoring stability and confidence in the markets. The Recommendation was part of a suite of measures agreed at EU level. The Recommendation called on National Authorities to require banks included in the sample to strengthen their capital positions by building up an exceptional and temporary buffer such that their Core Tier 1 capital ratio reaches a level of 9% by the end of June 2012. In addition, banks were required to an exceptional and temporary capital buffer against sovereign debt exposures to reflect market prices as at the end of September 2011. The amount of the sovereign capital buffer has not been revised. The initial sample of the Capital Exercise included 71 banks. However, the 6 Greek banks were treated separately as the country is currently under an EU/IMF assistance programme. Moreover, four banks (oesterreichische Volksbank AG, Dexia, WestLB AG and Bankia) from the original sample have been identified as undergoing a significant restructuring process, and are being monitored separately. Therefore, the final assessment published today refers to 61 banks. About Allied Irish Banks Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a major commercial bank based in Ireland. It has an extensive branch network across the country, a head office in Dublin and a capital markets operation based in the International Financial Services Centre in Dublin. AIB also has retail and corporate businesses in the UK, offices in Europe and a subsidiary company in the Isle of Man and Jersey (Channel Islands). Since the onset of the global and Irish financial crisis, AIB's relationship with the Irish Government has changed significantly. As at Dec. 31, 2010, the Government, through the National Pension Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary shares of the Company (the share of the voting rights at shareholders' general meetings), 10,489,899,564 convertible non- voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On April 8, 2011, the NPRFC converted the total outstanding amount of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby increasing its holding to 92.8% of the ordinary share capital. In addition to its shareholders' interests, the Government's relationship with AIB is reflected through formal and informal oversight by the Minister and the Department of Finance and the Central Bank of Ireland, representation on the Board of Directors (three non-executive directors are Government nominees), participation in NAMA, and otherwise. The Company reported a loss of EUR2.29 billion in 2011, a loss of EUR10.16 billion in 2010, and a loss of EUR2.33 billion in 2009. Allied Irish's consolidated statement of financial position for the year ended Dec. 31, 2011, showed EUR136.65 billion in total assets, EUR122.18 billion in total liabilities and EUR14.46 billion in shareholders' equity. Allied Irish's balance sheet at June 30, 2012, showed EUR129.85 billion in total assets, EUR116.59 billion in total liabilities and EUR13.26 billion in total shareholders' equity. AMERICAN AIRLINES: Loses Bid to Stop Union Election --------------------------------------------------- American Airlines Inc. lost a court fight in its effort to block a vote by passenger service agents on whether to unionize, according to an October 3 report by Reuters. The decision handed down by the U.S. Court of Appeals for the Fifth Circuit in New Orleans reverses an earlier ruling by U.S. District Judge Terry Means in Fort Worth, Texas, that blocked the agents' union election from going forward. In a two-page order, the appeals court said the trial court "erred in exercising its jurisdiction." It said review of National Mediation Board decisions was only warranted when the board has committed "egregious error," Reuters reported. American Airlines sued the National Mediation Board in May to stop the union election by nearly 10,000 passenger service agents. Judge Means blocked the vote, saying the board exceeded its authority when it authorized an election, according to an October 3 report by Bloomberg News. The Communications Workers of America, which is seeking to represent the agents, welcomed the decision. "For passenger service agents at American Airlines who have been fighting for a union voice for 15 years, this is extremely good news," CWA said in a statement. Chuck Porcari, a CWA spokesman, said the National Mediation Board will now need to schedule a new vote. He said the vote had initially been scheduled for between June and August 2012. The appeals court's ruling is a setback for American Airlines, which is seeking to cut labor costs. The airline has negotiated cost-cutting deals with flight attendants, mechanics and other workers, and has won court approval to cancel its labor agreement with pilots. The case is American Airlines Inc. v. National Mediation Board, 12-10680, U.S. Court of Appeals for the Fifth Circuit (New Orleans). About AMR Corp. AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Pilots Seek Stay of CBA Rejection Ruling ----------------------------------------------------------- AMR Corp. is blocking efforts by American Airlines pilots to put on hold temporarily a bankruptcy court's ruling until a higher court hears their appeal to review the decision. The decision issued by the U.S. Bankruptcy Court for the Southern District of New York on September 5 authorized American Airlines Inc., an AMR subsidiary, to throw out its labor contract with the pilots. The cancellation of the contract prompted the Allied Pilots Association, a union representing American Airlines' pilots, and two other groups to file appeals to review the decision. The two groups are represented by New York-based Seham, Seham, Meltz & Petersen LLP, and Virginia-based Highsaw Mahoney & Clarke PC. They want the higher court to determine whether the bankruptcy court correctly concluded that AMR met the requirements for the cancellation of the labor contract, among other issues. AMR lawyer, Todd Duffield, Esq., at Weil Gotshal & Manges LLP, in New York, said there is no "legal or factual basis" for temporary suspension of the September 5 ruling and to delay what is considered a "crucial piece" of American Airlines' restructuring. The committee representing AMR's unsecured creditors also opposes the temporary suspension of the September 5 ruling, saying the pilots "failed to sustain the heavy burden" necessary to obtain a stay pending appeal pursuant to U.S. bankruptcy law. Meanwhile, APA expressed fear the changes AMR made in the labor contract could cause "irreparable injury" to the pilots. The changes include the elimination of medical services plan coverage for pilots who retire after the changes come into effect. About AMR Corp. AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Says Seat Problem Found After Grounding Planes ----------------------------------------------------------------- An internal investigation has revealed improperly installed clamps caused some seats to loosen in six of American Airlines Inc.'s aircraft, according to an October 3 report by Reuters. The company said it had temporarily grounded eight aircraft after some seats came loose on two flights. "Our maintenance and engineering teams have discovered that the root cause is a saddle clamp improperly installed on the foot of the row leg," American Airlines said in a statement. The company said the Federal Aviation Administration is aware of the internal review and its findings, Reuters reported. About AMR Corp. 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 APPAREL: Had $51.1 Million Total Net Sales in September ---------------------------------------------------------------- American Apparel, Inc., announced preliminary sales for the month ended Sept. 30, 2012, and reported that total net sales on a preliminary basis increased 10% to $51.1 million when compared to the month ended Sept. 30, 2011. Between the same periods, comparable retail and online sales on a preliminary basis increased an estimated 15% and wholesale net sales increased an estimated 1%. For the quarter ended Sept. 30, 2012, total net sales increased an estimated 15% to $162.6 million, comparable retail and online sales increased an estimated 21% and wholesale net sales increased an estimated 6%. The following delineates the components of the increases for each of the months and the quarterly period ended Sept. 30, 2012, when compared to the corresponding months and quarter of the prior year: July Aug. Sept. 2012 Q3 ---- ----- ----- ------- Comparable Store Sales 20% 27% 14% 21% Comparable Online Sales 26% 20% 19% 21% Comparable Retail & Online 21% 26% 15% 21% Wholesale Net Sales 6% 12% 1% 6% "We are again pleased with our retail store, direct to consumer and wholesale sales," said Dov Charney, Chief Executive Officer and Chairman of the Board. "I'm particularly encouraged by the strength of our full price business and overall unit sales, and excited that our retail segment growth compares against positive results from the prior year. This past month aligned with our internal expectations, and we anticipate that both our retail and wholesale segments will experience continued sales momentum heading into October and the Holiday selling season. Assuming our sales and EBITDA growth hold through the 4th quarter, we believe that we will be in a position to refinance our existing high cost debt and reduce our cost of capital." About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. The Company reported a net loss of $39.31 million in 2011 and a net loss of $86.31 million in 2010. The Company's balance sheet at June 30, 2012, showed $326.72 million in total assets, $297.80 million in total liabilities, and $28.91 million in total stockholders' equity. AMERICAN ARCHITECTURAL: Proofs of Claim Due Nov. 11 --------------------------------------------------- The U.S. Bankruptcy Court has set on Nov. 11, 2012, as the last day for creditors to file proofs of claim against American Architectural, Inc. Deadline for governmental entities to file proofs of claim is Dec. 12, 2012. Bensalem, Pennsylvania-based American Architectural, Inc., and Advanced Acquisitions, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 12-15818 and 12-15819) on June 15, 2012. Judge Magdeline D. Coleman oversees the case. Maschmeyer Karalis P.C. serves as the Debtors' general bankruptcy counsel. Douglas Ziegler LLC serves as accountants. American Architectural provides quality building enclosures. Advanced Acquisitions is the beneficial owner of a 98,000 square feet facility in Bensalem, which houses AAI's offices and manufacturing plant. AAI has 49 employees. AAI completed work on many high profile projects in New York including, the AOL/Time Warner facility at Columbus Circle, the Lincoln Center, the Museum of Arts and Design, the New York Historical Society, and the JetBlue Terminal 5 at JFK International Airport, to name just a few of noteworthy projects. Recently, AAI completed the east coast's largest canopy for Goldman Sachs and has recently closed its fourth major World Trade Center rebuild project. The petitions were signed by John Melching, president and CEO. The Debtors listed assets of $3,874,952 and liabilities of $2,912,684. AMG CAPITAL II: Fitch Rates Trust Preferred Securities 'BB-' ------------------------------------------------------------ Fitch Ratings has assigned a 'BBB-' rating to Affiliated Managers Group Inc.'s (AMG) $125 million senior unsecured retail notes. The notes have a coupon of 5.25% and will mature on Oct. 15, 2022. The notes will be callable, in whole or part, at any time on or after Oct. 15, 2015 at the issuer's option. The notes will rank equally with AMG's other unsecured debt outstanding. Proceeds from the issuance will be used to repay borrowings under AMG's unsecured revolving credit facility. As of Sept. 28, 2012, AMG had $195 million outstanding under its revolving credit facility. Given that the proceeds from the new issuance will be used to repay outstanding borrowings under the revolving credit facility, Fitch does not envision there being a material impact on the company's leverage levels as a result of the issuance. Leverage, measured as gross debt to trailing 12 months adjusted EBITDA, was 2.35x at the second quarter of 2012. Rating Drivers and Sensitivities AMG's ratings reflects its growing scale in the asset management space, solid investment performance by its affiliates, strong cash flow generation, and adequate leverage and interest coverage ratios. Ratings also factor in the company's inherent exposure to volatility in broader financial markets. Improvement in current leverage and interest coverage metrics and consistent operating and investment performance could lead to positive rating action. Conversely, aggressive acquisitions funded by increased debt levels, material deterioration in leverage or interest coverage ratios, sustained investment underperformance at major affiliates, significant increase in equity puts by affiliates leading to liquidity issues, and/or unexpected operational losses or significant net outflows, could lead to negative rating action. Fitch currently rates AMG as follows: Affiliated Managers Group Inc. -- Long-term Issuer Default Rating (IDR) 'BBB-'; -- Senior bank credit facility 'BBB-'; -- Senior convertible notes 'BBB-'; -- Senior unsecured retail notes 'BBB-'. AMG Capital Trust I AMG Capital Trust II -- Trust preferred securities 'BB-'. The Rating Outlook is Stable. ANTS SOFTWARE: Rik Sanchez Appointed SVP - Worldwide Sales ---------------------------------------------------------- The ANTs software, Inc. Board of Directors, appointed Rik Sanchez as Senior Vice President of Worldwide Sales and an officer of the company, effective Oct. 1, 2012. About Ants Software ANTs Software inc (OTC BB: ANTS) -- http://www.ants.com/-- has developed a software solution, ACS, to help customers reduce IT costs by consolidating hardware and software infrastructure and eliminating cost inefficiencies. ACS is an innovative middleware solution that accelerates database consolidation between database vendors, enabling application portability. ANTs has not filed financial statements with the Securities and Exchange Commission since May 2011, when it disclosed that it had a net loss of $27.01 million in three months ended March 31, 2011, compared with a net loss of $20.7 million in the same period in 2010. The Company's balance sheet at March 31, 2011, showed $27.2 million in total assets, $52.3 million in total liabilities, and a stockholders' deficit of $25.1 million. As reported in the TCR on April 8, 2011, WeiserMazars LLP, in New York, expressed substantial doubt about ANTs software's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has incurred significant recurring operating losses, decreasing liquidity, and negative cash flows from operations. The Company reported a net loss of $42.4 million for 2010, following a net loss of $23.3 million in 2009. ARCAPITA BANK: Unsecureds Balk at Terms of SP Financing ------------------------------------------------------- The Official Committee of Unsecured Creditors of Arcapita Bank B.S.C.(c), et al., has filed a limited objection to the Debtors' motion to authorization to enter into a financing commitment letter with Silver Point Finance, LLC, for a US$150 million Shari'ah compliant DIP financing facility and to incur related fees, expenses and indemnities. The Committee argued: 1. The Commitment Papers unfairly impose significant obligations on the Debtors while Silver Point remains uncommitted to providing financing. 2. As currently drafted, the material adverse effect clause is unreasonably broad and creates an unjustifiable risk that Silver Point can abandon its lending commitment without any penalty. "Notably, the Debtors remain obligated to pay Silver Point the Commitment Fee and reimburse it for the expenses incurred even if Silver Point fails to fund the facility as a result of invoking the material adverse effect clause. Thus, even after the satisfaction of the Commitment Conditions, Silver Point continues to enjoy a free option to walk away from its commitment." 3. The Term Sheet also provides that, while the DIP Collateral does not include actions for preferences, fraudulent conveyances, and other avoidance power claims under Chapter 5 of the Bankruptcy Code, the proceeds of any such actions will be available to pay administrative claims of Silver Point or other participants in the financing. "It is inappropriate for the Debtors to earmark such proceeds for a secured lender and allow Silver Point to receive a priority interest in the funds that should be preserved for the general unsecured creditors. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., later filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group has roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. ARCAPITA BANK: Standard Chartered Opposes Silver Point Financing ---------------------------------------------------------------- Standard Chartered Bank, which asserts a security interest over the shares of Arcapita LT Holdings Limited, AEID II Holdings Limited, WindTurbine Holdings Limited, and RailInvest Holdings Limited, has filed a limited objection to Arcapita Bank B.S.C.(c), et al.'s motion for authorization to enter into a financing commitment letter with Silver Point Finance, LLC, for a US$150 million Shari'ah compliant DIP financing facility and to incur related fees, expenses and indemnities. Debtors' sole secured creditor and the sole creditor of the SCB Subsidiaries under two US$50,000,000 secured Shari'ah compliant murabaha facilities. The obligations under the SCB Secured Facilities are secured by eight equitable mortgages over the shares of each of the SCB Subsidiaries. As reported in the TCR on Sept 28, 2012, the commitment is subject to (a) satisfactory completion of Silver Point's due diligence and (b) receipt of final Silver Point credit committee approval. Once the Debtors receive notice that the subject conditions precedent are satisfied, Silver Point will be entitled to a 1.50% Commitment Fee. In the event that the Commitment Letter is terminated as a result of the Debtors' negotiation or execution of any alternative financing proposal, Silver Point will be entitled to a fee equal to 0.75% of the amount of the facility. Silver Point will be entitled to reimbursement up to $900,000 for all reasonable and documented fees and expenses. Standard Chartered says the Silver Point DIP Facility cannot be approved by the Court as currently proposed. "The Silver Point DIP Facility, while technically taking a junior lien on the shares of the SCB Subsidiaries, would receive guaranty claims and administrative claims against each of the SCB Subsidiaries and Silver Point appears to have the right to receive security over all material non-Debtor assets of the Arcapita group, including the assets of each of the SCB Subsidiaries." "Despite the Debtors' statements to the Court that the proposed Silver Point DIP Facility would not prime Standard Chartered's positions, that is exactly what the Senior Claims and the Senior Security do," the Bank said. In addition, the Bank says the Silver Point DIP Facility proposes to be a single draw facility notwithstanding the fact that the Debtors do not have an immediate need for the full facility. "This is a blatant attempt to extract as much financial gain as possible at the expense of the Debtors' estates and to accelerate the approval of the full Silver Point DIP Facility so that parties in interest, including Standard Chartered, will have as little time as possible for appropriate document and deposition discovery and preparation for the valuation trial that will be required if the Debtors insist on moving forward with a defective financing proposal." Standard Chartered also objects to the motion to the extent that the approval of the Commitment Letter would by extension approve or be considered to approve the payment of up to 100% of Silver Point's expenses and the payment of the Commitment Fee. Standard Chartered is represented by: Michael J. Sage Brian E. Greer Nicole B. Herther-Spiro DECHERT LLP 1095 Avenue of the Americas New York, NY 10036-6797 Tel: (212) 698-3500 Fax: (212) 698-3599 E-mail: michael.sage@dechert.com brian.greer@dechert.com nicole.herther-spiro@dechert.com About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., later filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group has roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. ARCAPITA BANK: Mediation on Tide's Lift Stay Motion on Oct. 30 -------------------------------------------------------------- A status report/status update regarding the Falcon Gas Storage Company, Inc. litigation was filed by Arcapita Bank B.S.C.(c), et al. on Oct. 4, 2012, with the Bankruptcy Court. Prior to the petition date in the Debtors' Chapter 11 cases, Tide Natural Gas Storage I, LP, and Tide Natural Gas Storage II, LP, filed an action in the U.S. District Court for the Southern District of New York against Falcon Gas Storage Company, Inc., Arcapita Bank B.S.C.(c), and Arcapita Inc., alleging breach of contract and "fraud in the inducement," among other things in relation to the 2010 sale of a natural gas storage business. Tide Natural Gas Storage I, L.P. v. Falcon Gas Storage Co., Inc., Case No. 10-cv-05821-KMW (S.D.N.Y.) (before Judge Kimba Wood). At issue in the District Court Action is the ownership of all of the escrow funds placed in escrow with HSBC Bank USA, N.A., in connection with Tide's purchase of all of Falcon's interest in NorTex Gas Storage Company, LLC. In March 2012, Arcapita Bank and five of its subsidiaries filed voluntary petitions under Chapter 11 of the Bankruptcy Code. On April 12, 2012, John M. Hopper, et al. filed a Motion to Intervene in the District Court Action. On April 30, 2012, Falcon Gas Storage Company, Inc., filed a voluntary petition under Chapter 11 of the Bankruptcy Code. On May 16, 2012, the District Court entered a stipulation and order, which recognized that the District Court Action had been stayed pursuant to 11 U.S.C. Section 362(a). On May 21, 2012, the Hopper Parties filed an adversary proceeding against Falcon in the Bankruptcy Court seeking the immediate payment of the $8.25 million of funds held in escrow in connection with the sale of the natural gas storage business. The Hopper Adversary has been assigned Case No. 12-01662 (SHL). The Hopper Parties claim that right, title and interest in $8.25 million of the Escrow Funds has vested in Falcon and has been assigned to the Hopper Parties. On June 25, 2012, Tide filed a motion for an order lifting the automatic stay pursuant to 11 U.S.C. Section 362(d) so that it may liquidate its claims against Falcon Gas and Arcapita Bank in the District Court Action. On June 27, 2012, the Hopper Parties filed their opposition to Tide's Lift Stay Motion. On June 29, 2012, the Debtors filed its objection to Tide's Lift Stay Motion and the Official Committee of Unsecured Creditors filed a Joinder to the Debtors' objection to Tide's Lift Stay Motion. On July 31, 2012, Tide filed its reply to the objections of the Debtors, the Hopper Claimants and the Committee to Tide's Lift Stay Motion. On Aug. 1, 2012, the Bankruptcy Court held a hearing to consider the Lift Stay Motion and the various objections and replies to the Lift Stay Motion. At the hearing, the parties discussed mediating the dispute and Court adjourned the hearing on the Lift Stay Motion so that the parties could pursue mediation. A mediation is currently scheduled for Oct. 30, 2012, before the Honorable John S. Martin (Ret). The parties will file mediation briefs with the mediator prior to the mediation. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., later filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group has roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. ASPEN GROUP: Has 5.6MM Shares Available for Issuance Under Plan --------------------------------------------------------------- Effective Sept. 28, 2012, Aspen Group, Inc., increased the authorized shares available under its 2012 Equity Incentive Plan to 5,600,000 shares. The Company granted 100,000 five-year stock options to John Scheibelhoffer, Michael D'Anton, Paul Schneier, C. James Jensen and David Pasi, directors of the Company, replacing the stock options granted to these directors by Aspen University, Inc., the Company's wholly-owned subsidiary, in May 2011. One-third of the options are fully vested and the remaining will vest in two equal annual increments with the first vesting date being May 20, 2013, subject to continued service as of each applicable vesting date. The options are exercisable at $0.35 per share. Sanford Rich, a director, was granted 100,000 five-year stock options exercisable at $0.35 per share. The options will vest in equal annual increments over a three year period with the first vesting date being March 15, 2013, subject to continued service as of each applicable vesting date. Effective Sept. 28, 2012, the Company granted Michael Mathews, the Company's Chief Executive Officer and Chairman of the Board, 2,900,000 five-year options exercisable at $0.35 per share, assuming the Company raises $3,500,000 in an offering of the Company's securities. If less than $3,500,000 is raised in the Private Placement, the number of options will be reduced pro-rata based on the actual amount of money raised in the Private Placement so that Mr. Mathews owns approximately 10% of the Company. As previously reported, the Company has raised $2,757,000 in the Private Placement. The options will vest in equal annual increments over four years, with the first vesting date being Sept. 28, 2013, subject to continued employment as of each applicable vesting date. About Aspen Group Denver, Colo.-based Aspen Group, Inc., was founded in Colorado in 1987 as the International School of Information Management. On Sept. 30, 2004, it was acquired by Higher Education Management Group, Inc., and changed its name to Aspen University Inc. On May 13, 2011, the Company formed in Colorado a subsidiary, Aspen University Marketing, LLC, which is currently inactive. On March 13, 2012, the Company was recapitalized in a reverse merger. Aspen's mission is to become an institution of choice for adult learners by offering cost-effective, comprehensive, and relevant online education. Approximately 88% of the Company's degree- seeking students (as of June 30, 2012) were enrolled in graduate degree programs (Master or Doctorate degree program). Since 1993, the Company has been nationally accredited by the Distance Education and Training Council, a national accrediting agency recognized by the U.S. Department of Education. The Company's balance sheet at June 30, 2012, showed $3.7 million in total assets, $5.6 million in total liabilities, and a stockholders' deficit of $1.9 million. The Company had a net loss allocable to common stockholders of $3.5 million and negative cash flows from operations of $2.0 million for the six months ended June 30, 2012. "The Company's ability to continue as a going concern is contingent on securing additional debt or equity financing from outside investors. These matters raise substantial doubt about the Company's ability to continue as a going concern." ATWATER PUBLIC: S&P Cuts SPUR on Wastewater Revenue Bonds to 'BB+' ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its underlying rating (SPUR) on Atwater Public Financing Authority, Calif.'s wastewater revenue bonds, issued for Atwater, one notch to 'BB+' from 'BBB-'. The rating remains on CreditWatch with negative implications where the rating service placed it on Sept. 21, 2012. "The downgrade reflects Standard & Poor's opinion that reversing the city's financial condition will be difficult, evidenced by Atwater's Oct. 3, 2012, declaration of a state of fiscal emergency under case law. The emergency declaration reflects the structural deficits in nearly every major operating fund of the city and the wastewater system's reliance on those funds for working capital," S&P said. "While Atwater can now act more unilaterally to reduce certain operating expenses, such as payroll, we expect large rate increases for water and sanitation funds and the deferral of capital improvements to reverse enterprises that, combined, are losing $110,000 monthly," said Standard & Poor's credit analyst Scott Sagen. "Furthermore, the general, water, and sanitation funds have the ability to further weaken the wastewater fund through the further drawdown of pooled cash reserves at a time when the wastewater system's debt service coverage was already decreasing to 1.19x as calculated by Standard & Poor's in fiscal 2011 and when the city had already used $5 million in cash as of fiscal 2012 as planned to complete a major treatment plant project." "The CreditWatch with negative implications status continues to reflect Standard & Poor's view of the city's consideration of declaring a fiscal emergency under California Assembly Bill 506, which allows for a Chapter 9 bankruptcy filing under the U.S. Bankruptcy Code without a neutral evaluation process," S&P said. "On Oct. 3, the city council voted to declare, under case law, a state of emergency based on fiscal circumstances and authorized the interim city manager to take all appropriate measures, including the broad authority to impair labor contracts to achieve a balanced budget by fiscal 2013. Standard & Poor's understands the council will continue public hearings related to the city's consideration of declaring a fiscal emergency, under Assembly Bill 506, at a meeting on Oct. 22, 2012," S&P said. "We expect to resolve the CreditWatch listing on Atwater's wastewater system revenue bonds upon further developments pertaining to the city's possible Assembly Bill 506 determination, as well as management's ability and willingness to increase general fund revenue; implement significant water and sanitation rate increases; and make expenditure cuts to structurally balance the general, water, and sanitation funds to help alleviate the general fund's significant reliance on surplus wastewater revenue," S&P said. The rating also reflects Standard & Poor's opinion of the city's: Council's historical unwillingness to implement recommended rate adjustments, as necessary, to generate structurally balanced financial operations in all funds; Proposed significant water and sanitation rate increases, which, if successful, will initially improve cash flow but will also limit the system's ongoing revenue-raising flexibility; Limited local economy with weak income and historically high unemployment; and Highly leveraged wastewater system and slow debt amortization. AWAS AVIATION: S&P Puts 'BB' Corp. Credit Rating on Watch Positive ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings, including the 'BB' corporate credit rating, on AWAS Aviation Capital Ltd. on CreditWatch with positive implications. "The CreditWatch listing follows AWAS' Oct. 5 announcement that its board of directors had approved the conversion of $800 million of shareholder loans into equity. The conversion of shareholder loans would reduce AWAS' debt to capital by about 8% to the high- 70% area from the mid-80% area. However, because the company will still carry a heavy debt burden, which we expect to increase as it uses debt to fund new aircraft deliveries, we expect funds from operations to debt to remain at about 9%," S&P said. "The ratings on AWAS reflect its position as a large provider of aircraft operating leases and its diversified fleet and airline customer base," said Standard & Poor's credit analyst Betsy Snyder. "Limiting credit considerations include exposure to cyclical demand and lease rates for aircraft, a weaker financial profile than some of its competitors, and a substantial percentage of encumbered assets, constraining options for raising capital. The ratings incorporate our expectations that these trends will continue over the next several quarters. Standard & Poor's characterizes AWAS' business risk profile as 'satisfactory,' its financial risk profile as 'significant,' and its liquidity as "adequate" under our criteria." "We expect to raise the ratings on AWAS, including the corporate credit rating to 'BB+' from 'BB', when the conversion of shareholder loans into equity is completed," S&P said. AXION INTERNATIONAL: Allen Kronstadt Discloses 30.5% Equity Stake ----------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Allen Kronstadt disclosed that, as of Sept. 28, 2012, he beneficially owns 11,109,283 shares of common stock of Axion International Holdings, Inc., representing 30.5% of the shares outstanding. Mr. Kronstadt previously reported beneficial ownership of 9,444,283 common shares or a 27.2% equity stake as of Aug. 24, 2012. On Sept. 28, 2012, Mr. Kronstadt purchased a note in the original principal amount of $333,000 which is initially convertible into 832,500 shares of Common Stock, and an associated warrant to purchase 832,500 shares of Common Stock, in each case subject to adjustment as provided on the terms of that Note and associated warrant. The total amount of funds used by Axion to purchase that Note and associated warrant was $333,000 in cash, and those funds were provided by the personal funds of Axion. A copy of the amended filing is available for free at: http://is.gd/Bw6prd About Axion International New Providence, N.J.-based Axion International Holdings, Inc. (OTC BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee of patented and patent-pending technologies developed for the production of structural plastic products such as railroad crossties, pilings, I-beams, T-Beams, and various size boards including a tongue and groove design that are utilized in multiple engineered design solutions such as rail track, rail and tank bridges (heavy load), pedestrian/park and recreation bridges, marinas, boardwalks and bulk heading to name a few. RBSM LLP, in New York, the auditor, issued a going concern qualification each in the Company's financial statements for the years ended Dec. 31, 2010, and 2011. RBSM LLP noted that the Company has incurred significant operating losses in current year and also in the past. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern, it said. Axion International reported a net loss of $9.93 for the 12 months ended Dec. 31, 2011, compared with a net loss of $7.10 million for the 12 months ended Sept. 30, 2010. The Company's balance sheet at June 30, 2012, showed $7.68 million in total assets, $7.80 million in total liabilities, $5.80 million in 10% convertible preferred stock, and a $5.91 million total stockholders' deficit. AXION INTERNATIONAL: Samuel Rose Discloses 36.1% Equity Stake ------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Samuel G. Rose disclosed that, as of Sept. 28, 2012, he beneficially owns 13,992,755 shares of common stock of Axion International Holdings, Inc., representing 36.1% of the shares outstanding. Julie Walters beneficially owns 2,519,469 common shares as of September 28. Mr. Rose previously reported beneficial ownership of 11,492,755 common shares or a 31.7% equity stake as of Aug. 24, 2012. On Sept. 28, 2012, Mr. Rose purchased one of the Notes in the original principal amount of $500,000 which is initially convertible into 1,250,000 shares of Common Stock, and an associated warrant to purchase 1,250,000 shares of Common Stock, in each case subject to adjustment as provided on the terms of such Note and associated warrant. The total amount of funds used by Rose to purchase that Note and associated warrant was $500,000 in cash, and those funds were provided by the personal funds of Rose. A copy of the amended filing is available for free at: http://is.gd/NMhQBX About Axion International New Providence, N.J.-based Axion International Holdings, Inc. (OTC BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee of patented and patent-pending technologies developed for the production of structural plastic products such as railroad crossties, pilings, I-beams, T-Beams, and various size boards including a tongue and groove design that are utilized in multiple engineered design solutions such as rail track, rail and tank bridges (heavy load), pedestrian/park and recreation bridges, marinas, boardwalks and bulk heading to name a few. RBSM LLP, in New York, the auditor, issued a going concern qualification each in the Company's financial statements for the years ended Dec. 31, 2010, and 2011. RBSM LLP noted that the Company has incurred significant operating losses in current year and also in the past. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern, it said. Axion International reported a net loss of $9.93 for the 12 months ended Dec. 31, 2011, compared with a net loss of $7.10 million for the 12 months ended Sept. 30, 2010. The Company's balance sheet at June 30, 2012, showed $7.68 million in total assets, $7.80 million in total liabilities, $5.80 million in 10% convertible preferred stock, and a $5.91 million total stockholders' deficit. AXION INTERNATIONAL: MLTM Lending Discloses 28.6% Equity Stake -------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, MLTM Lending, LLC, disclosed that, as of Sept. 28, 2012, it beneficially owns 10,502,218 shares of common stock of Axion International Holdings, Inc., representing 28.6% of the shares outstanding. ML Dynasty Trust beneficially owns 9,451,996 common shares as of September 28. MLTM Lending previously reported beneficial ownership of 7,317,218 common shares or a 21.8% equity stake as of Sept. 11, 2012. On Sept. 28, 2012, MLTM purchased one of the Notes in the original principal amount of $637,000 which is initially convertible into 1,592,500 shares of Common Stock, and an associated warrant to purchase 1,592,500 shares of Common Stock, in each case subject to adjustment as provided on the terms of such Note and associated warrant. The total amount of funds used by MLTM to purchase that Note and associated warrant was $637,000 in cash, and those funds were provided by the personal funds of MLTM. A copy of the amended filing is available for free at: http://is.gd/zazRpH About Axion International New Providence, N.J.-based Axion International Holdings, Inc. (OTC BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee of patented and patent-pending technologies developed for the production of structural plastic products such as railroad crossties, pilings, I-beams, T-Beams, and various size boards including a tongue and groove design that are utilized in multiple engineered design solutions such as rail track, rail and tank bridges (heavy load), pedestrian/park and recreation bridges, marinas, boardwalks and bulk heading to name a few. RBSM LLP, in New York, the auditor, issued a going concern qualification each in the Company's financial statements for the years ended Dec. 31, 2010, and 2011. RBSM LLP noted that the Company has incurred significant operating losses in current year and also in the past. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern, it said. Axion International reported a net loss of $9.93 for the 12 months ended Dec. 31, 2011, compared with a net loss of $7.10 million for the 12 months ended Sept. 30, 2010. The Company's balance sheet at June 30, 2012, showed $7.68 million in total assets, $7.80 million in total liabilities, $5.80 million in 10% convertible preferred stock, and a $5.91 million total stockholders' deficit. BALLARD POWER: Gets NASDAQ Non-Compliance Notice ------------------------------------------------ Ballard Power Systems disclosed that it received a notice on Oct. 5, 2012 from the NASDAQ Stock Market LLC. The notice stated that the Company was not in compliance with NASDAQ Marketplace Rule 5450(a) (1) because the bid price of the Company's common stock closed below the required minimum $1.00 per share for the previous 30 consecutive business days. The NASDAQ notice has no immediate effect on the listing of the Company's common stock. In accordance with NASDAQ rules, Ballard has a period of 180 calendar days, until April 3, 2013, to regain compliance with the minimum bid price rule. If at any time before April 3, 2013, the bid price of the Company's common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, NASDAQ will notify the Company that it has regained compliance with the minimum bid price rule. The Company is currently reviewing options with respect to regaining such compliance. If Ballard cannot demonstrate compliance with Rule 5450(a)(1) by April 3, 2013, NASDAQ will provide notice to Ballard that its securities may be delisted. At that time, Ballard may appeal NASDAQ's decision to a Listing Qualifications Panel. Alternatively, Ballard may submit an application to transfer its securities to The NASDAQ Capital Market. Following submission of the application, Ballard may be eligible for an additional 180-day period to regain compliance with the minimum bid price requirement if it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards, with the exception of the bid price requirement, for The NASDAQ Capital Market. About Ballard Power Systems Ballard Power Systems CA -- http://www.ballard.com/-- provides clean energy fuel cell products enabling optimized power systems for a range of applications. Products deliver incomparable performance, durability and versatility. BANKATLANTIC BANCORP: Inks 3-Year Servicing Pact with Bayview ------------------------------------------------------------- Florida Asset Resolution Group, LLC, a subsidiary of BBX Capital Corporation (formerly known as BankAtlantic Bancorp Inc.), entered into an Omnibus Asset Servicing Agreement with Bayview Loan Servicing, LLC. Under the terms of the Servicing Agreement, Bayview will provide customary mortgage loan servicing services to FAR with respect to certain commercial, residential and consumer loans and related REO owned by FAR which had an aggregate net book value of approximately $256 million at Sept. 28, 2012. Bayview will be entitled to monthly base servicing fees and other fees based on the amount of proceeds realized upon resolution of the assets. The Servicing Agreement has a term of three years and either party may terminate the Agreement as a result of an uncured material breach or without cause upon 120 days' prior written notice, provided that if the Agreement is terminated prior to the first anniversary of the date upon which Bayview initially assumes its servicing responsibilities under the Servicing Agreement, either by the Servicer as a result of an uncured material breach by FAR or by FAR without cause, then Bayview will be entitled to receive a termination fee. About BankAtlantic Bancorp BankAtlantic Bancorp (NYSE: BBX) -- http://www.BankAtlanticBancorp.com/-- is a bank holding company and the parent company of BankAtlantic. BankAtlantic -- "Florida's Most Convenient Bank" with a Web presence at http://www.BankAtlantic.com/-- has nearly $6.0 billion in assets and more than 100 stores, and is one of the largest financial institutions headquartered junior in Florida. BankAtlantic has been serving communities throughout Florida since 1952 and currently operates more than 250 conveniently located ATMs. BankAtlantic reported a net loss of $28.74 million in 2011, a net loss of $143.25 million in 2010, and a net loss of $185.82 million in 2009. The Company's balance sheet at June 30, 2012, showed $3.83 billion in total assets, $3.87 billion in total liabilities, and a $43.75 million total deficit. * * * As reported by the TCR on March 1, 2011, Fitch has affirmed its current Issuer Default Ratings for BankAtlantic Bancorp and its main subsidiary, BankAtlantic FSB at 'CC'/'C' following the announcement regarding the regulatory order with the Office of Thrift Supervision. BankAtlantic has announced that it has entered into a Cease and Desist Order with the OTS at both the bank and holding company level. The regulatory order includes increased regulatory capital requirements, limits to the size of the balance sheet, no new commercial real estate lending and improvements to its credit risk and administration areas. Further, the holding company must also submit a capital plan to maintain and enhance its capital position. BEAR ISLAND: Plan Confirmation Hearing Continued Until Oct. 17 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia continued until Oct. 17, 2012, at 1 p.m., the hearing to consider the confirmation of Bear Island Paper Company, L.L.C.'s Chapter 11 Plan. As reported in the TCR on Oct. 10, 2011, Bear Island Paper Co. won bankruptcy court approval to seek votes on its amended liquidation plan. The Plan provides for the termination of the Debtor's business operations and the liquidation of its assets. Subject to the rights of certain parties in interest to object to the allowance and priority of claims, the Plan provides for the payment in full to holders of allowed administrative claims and allowed priority claims. The Plan further provides for a recovery to holders of allowed general unsecured claims. A copy of the Plan and Disclosure Statement are available for free at http://bankrupt.com/misc/bearisland.doc958.pdf About Bear Island Canada-based White Birch Paper Company is the second largest newsprint producer in North America. As of Dec. 31, 2009, the White Birch Group held a 12% share of the North American newsprint market and employed roughly 1,300 individuals (the majority of which reside in Canada). Bear Island Paper Company, L.L.C., is a U.S.-based unit of White Birch. Bear Island filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 10-31202) on Feb. 24, 2010. At June 30, 2011, the Company had $141.9 million in total assets, $153.2 million in total liabilities, and a stockholders' deficit of $11.3 million. White Birch filed for bankruptcy protection under Canada's Companies' Creditors Arrangement Act, before the Superior Court for the Province of Quebec, Commercial Division, Judicial District of Montreal, Canada. White Birch and five other affiliates -- F.F. Soucy Limited Partnership; F.F. Soucy, Inc. & Partners, Limited Partnership; Papier Masson Ltee; Stadacona Limited Partnership; and Stadacona General Partner, Inc. -- also sought bankruptcy protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 10-31234). Jonathan L. Hauser, Esq., at Troutman Sanders LLP, in Virginia Beach, Virginia Beach, serves as counsel to White Birch in the Chapter 11 case. Richard M. Cieri, Esq., Christopher J. Marcus, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to Bear Island. Jonathan L. Hauser, Esq., at Troutman Sanders LLP, in Virginia Beach, Virginia, serve as co-counsel to Bear Island. AlixPartners LLP serves as financial and restructuring advisors to Bear Island, and Lazard Freres & Co., serves as investment banker. Garden City Group is the claims and notice agent. Jason William Harbour, Esq., at Hunton & Williams LLP, in Richmond, Virginia, represents the Official Committee of Unsecured Creditors. Chief Judge Douglas O. Tice, Jr., handles the Chapter 11 and Chapter 15 cases. Bear Island was authorized by the bankruptcy judge in November 2010 to sell the business to a group consisting of Black Diamond Capital Management LLC, Credit Suisse Group AG and Caspian Capital Advisors LLC. Bear Island's Chapter 11 plan is currently scheduled for approval at a Feb. 14, 2012 confirmation hearing. Under the plan proposed by the subsidiary of Canada's White Birch Paper Co., first- and second-lien creditors with $424.9 million and $105.1 million in claims, respectively, are expected to recover between 0.5 percent and 4 percent. Unsecured creditors with $1.4 million in claims are to receive the same dividend. BLUE COAT: S&P Gives 'BB-' Rating on $525-Mil. Credit Facilities ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating to Sunnyvale, Calif.-based Blue Coat Systems Inc.'s $25 million revolving credit facility (undrawn at closing) and $500 million first-lien term loan. Blue Coat intends to use the proceeds to redeem $487.8 million of its existing first- and second-lien term loans. "However, the additional amount of first- lien debt in the new capital structure brings our estimated first- lien recovery to the low end of our '2' (70%-90%) recovery rating boundary, and we would likely lower the first-lien debt rating if the company incurred any further material amounts of first-lien debt. Blue Coat is refinancing its second-lien credit facilities as part of this transaction," S&P said. The corporate credit rating and outlook are unaffected by the change of capital structure, as there is a very small amount of incremental debt. "Pro forma for the transaction, the company's operating lease- adjusted debt to adjusted EBITDA is in the mid-4x area as of the latest 12 months ended July 31, 2012. Our adjusted EBITDA adds back the deferred revenue fair value adjustment of $45.3 million, resulting from purchase accounting for the Thoma Bravo acquisition on Feb. 15, 2012, restructuring expenses, acquisition transaction fees, and stock-based compensation expenses. We expect modest reduction in leverage in the near-to-intermediate term as the company benefits from the latest restructuring efforts and the recent increase in security and WAN optimization product bookings," S&P said. The rating on Blue Coat reflects the company's "weak" business risk profile, characterized by its narrow product focus and significant competition from larger players, and its "aggressive" financial risk profile. The company's diversified customer base, significant level of recurring revenue, and moderate free cash flow generation partially offset these factors. RATINGS LIST Blue Coat Systems Inc. Corporate Credit Rating B+/Stable/-- New Ratings Blue Coat Systems Inc. $25 mil. revolving credit facility BB- Recovery Rating 2 $500 mil. first-lien term loan BB- Recovery Rating 2 BUFFALO GULF: Moody's Affirms 'Ba1' Rating on $275MM Term Loan -------------------------------------------------------------- Moody's Investors Service has affirmed the Ba1 rating on the Buffalo Gulf Coast Terminals LLC ("BGCT", "HoldCo" or "Borrower") $275 million senior secured term loan facility due 2017. The rating outlook is stable. BGCT is a holding company set up by affiliates of Alinda Capital Partners LLC ("Alinda" or "Sponsor") to hold its 100% ownership interest in Houston Fuel Oil Terminal Company ("HFOTCO" or "OpCo"), which it acquired in October 2011 from ArcLight Capital Partners, LLC. This ratings affirmation and maintenance of a stable outlook is being made in connection with the issuance of $100 million in 'Hurricane Ike' bonds at HFOTCO. A rating affirmation is a requirement under the HoldCo credit agreement to permit the issuance of these bonds at the operating company level. Ratings Rationale HFOTCO plans to issue an additional $100 million in 'Hurricane Ike' recovery development bonds issued through the Harris County Industrial Development Corporation. The bonds will be issued in the tax-exempt market and will initially bear interest in weekly- rate mode with a stated maturity date in 2050 (similar to previous HFOTCO debt issuance under the 'Hurricane Ike' recovery development bond program). The bonds are additionally supported by a direct-pay letter of credit from Bank of America (A3 issuer rating, stable outlook). The letter of credit is drawn against capacity on HFOTCO's $255 million revolving credit facility. After the upcoming bond issuance, HFOTCO will have $225 million of revolver capacity supporting the 'Hurricane Ike' recovery development bonds, leaving $30 million available for the company's general corporate purposes. With the additional bonds and upsized revolver, the company has limited capacity to incur additional indebtedness based upon the terms of the BGCT credit agreement. The bond proceeds will be used to pay for growth capital expenditures at HFOTCO that were previously budgeted and anticipated to be funded via revolver draws. Moody's had incorporated those revolver draws and included the amounts as part of total consolidated debt in the analysis done at financial close in September 2011. Management anticipates utilizing approximately $78 million in bond proceeds to complete the Area 19 and 20 expansions at the North Terminal through 2013. The remaining $22 million will remain in restricted cash that HFOTCO can utilize for additional growth capital expenditures as necessary. The Ba1 rating reflects the highly contracted nature of the cash flows, the low operating risks associated with this storage asset, the credit quality of the contract counterparties and the contract diversification. The rating also reflects the substantial equity commitment that Alinda has made in BGCT. However, the rating also reflects the high consolidated leverage on the combined enterprise and the structural subordination of the HoldCo term loan facility to the debt at the OpCo level. The additional debt at the operating company from this issuance marginally weakens the consolidated enterprise's cash flow to debt metrics, though overall interest expense will be slightly lower due to the interest rate differential between the 'Hurricane Ike' recovery development bonds and the revolving credit facility, which would have been the principal financing source for these capital expenditures. Overall, Moody's calculated debt balance is about $20 million higher at the end of 2012 after this debt issuance compared with the forecast at transaction close. Repayment of the HoldCo loan is dependent upon refinancing at maturity since there is only 1% scheduled amortization each year without an excess cash flow sweep. The leverage covenant acts as an effective cash flow sweep to ensure appropriate deleveraging by requiring a mandatory principal payment to bring BGCT back into compliance with the leverage covenant in a situation where it does not meet the test. The stable outlook reflects the expectation that the diversified portfolio of contracts with predominantly investment grade counterparties will generate relatively stable and predictable cash flows. There are limited prospects for positive rating action given the currently high level of consolidated leverage. Positive trends that could eventually lead Moody's to consider an upgrade would include more rapid pay-down of debt than currently projected and better than projected base case financial performance. Negative trends that could lead Moody's to consider a downgrade would include credit deterioration by key contractual off-takers, substantial operating performance difficulties that result in a meaningful loss of cash flow available for debt service, or weaker than expected credit metrics. The methodology used in this rating was the Generic Project Finance Methodology published in December 2010. Buffalo Gulf Coast Terminals LLC is a special-purpose holding company set up by Alinda Capital Partners LLC to hold its 100% ownership interest in Houston Fuel Oil Terminal Company ("HFOTCO"). HFOTCO is the largest provider of residual fuel and crude oil storage in the Gulf Coast with approximately 14.8 million barrels of tank storage capacity, which will increase to about 16.1 million by December 2013. HFOTCO's scale also enables the company to provide additional ancillary services and support to its customers, including product heating, blending and transportation services for regional refiners, major integrated oil companies and trading operations. The facility's existing infrastructure also offers customers multiple inbound/outbound logistical options including deepwater ship, ocean barge, inland barge, truck, rail and pipeline access. BWAY HOLDING: S&P Puts 'B' CCR on Watch over Acquisition Agreement ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings, including its 'B' corporate credit rating, on BWAY Parent Co. Inc., BWAY Holding Co., and all rated subsidiaries (BWAY) on CreditWatch with developing implications. "The CreditWatch placement follows BWAY's acquisition announcement. An affiliate of Platinum Equity will acquire the company in a transaction valued at approximately $1.24 billion," said credit analyst Seamus Ryan. "The company expects the transaction, which is subject to customary closing conditions, to close in the fourth quarter of 2012." "We will monitor developments associated with the pending transaction and plan to resolve the CreditWatch listing upon review of the company's financing plans and expected financial profile following the transaction. The CreditWatch placement indicates that we could raise, lower, or affirm the ratings depending on our review of the transaction and implications for credit quality," S&P said. CALPINE CORP: Fitch Rates $845-Mil. First Lien Notes 'BB/RR1' ------------------------------------------------------------- Fitch Ratings has assigned its 'BB/RR1' rating to Calpine Corp's (Calpine) $835 million senior secured term loan due 2019. The 'RR1' rating reflects a three-notch positive differential from the 'B' IDR and indicates that Fitch estimates outstanding recovery of 91-100%. The Rating Outlook is Positive. The new senior secured term loan ranks equally and ratably with Calpine's existing senior secured term loans, revolving credit facility and first lien notes and is subordinated to all existing and future liabilities of Calpine's subsidiaries that do not guarantee Calpine's revolving facility. The new term loan is secured by a first priority lien on substantially all of Calpine's and certain of its guarantor's existing and future assets, together which comprises 725 MW of geothermal assets and approximately 19,000 MW of natural gas-fired generation capacity. The same collateral secures the revolver, existing term loans and the first lien notes. The net proceeds from this offering, along with cash on hand, will be used by Calpine to redeem 10% of the original aggregate principal amount of each of the series of its existing first lien notes and pay down existing project level debt for Broad River and South Point. While incurring a call premium of approximately $17 million in addition to other transaction costs, the refinancing will lower the run rate of interest expenses and further simplify the capital structure. After this transaction, Calpine has only $120 million left of its $2 billion accordion feature under its first-lien senior secured debt, which allows the company to refinance portions of project debt at the parent level. Calpine's ratings reflect its high consolidated gross leverage, relatively stable EBITDA (due to lower sensitivity to changes in natural gas prices as compared to other coal/ nuclear competitive power generators), strong liquidity position including a growing free cash flow profile, manageable debt maturities, and consistently demonstrated capital market access. Some of the key trends in the U.S. power generation sector, namely tightening environmental regulations, looming generation scarcity in certain markets such as in the Electricity Reliability Council of Texas (ERCOT), and a sharp fall in natural gas prices in the recent months that has reversed coal-to-gas spreads, are all favorable for Calpine. These trends are reflected in Fitch's upwardly revised EBITDA and cash flow estimates for 2012 as Calpine has benefited from a run up in market heat rates in ERCOT and significant coal-to-gas switching in various power regions it operates in. A prolonged low natural gas price environment and consequently depressed economics are likely to further accelerate the pace of retirements at several coal-fired power plants. Fitch expects this trend to further bolster Calpine's competitive position and support improved credit metrics in 2013 and beyond. Longer-term, Calpine remains positively leveraged to a recovery in natural gas prices with its highly efficient fleet and natural gas being on the margin for power prices in most of the markets Calpine operates in. Fitch estimates Calpine's consolidated gross leverage to be approximately 5.9x and funds flow from operations (FFO) to total debt to reach 10% in 2013, which is in line with Fitch's guideline ratios for a high risk 'B' rated issuer. Fitch expects Calpine's gross leverage to approach a range of 4.5 - 5.0x and FFO to total debt to be in the 12-14% range by 2015. Given the company's strong excess cash position, the net leverage metrics are much stronger. Management has a stated net leverage target of 4.5x, which Fitch expects to be reached by 2014. Calpine's liquidity position is strong with approximately $762 million of cash and cash equivalents and $659 million of availability under the corporate revolver, as of June 30, 2012. Fitch expects Calpine to generate upwards of $600 million in free cash flow in 2014 and beyond. These free cash flow estimates incorporate both maintenance and growth capex based on announced new projects. Fitch does not expect management to proactively reduce debt from the current levels aside from the scheduled debt maturities/ amortizations. Over the last 12 months, management has announced $600 million in share repurchases, which has been above Fitch's expectations. The level of free cash flow generation is strong enough to accommodate modest level of share repurchases, which is incorporated in Fitch's forecasts. However, it is Fitch's expectation that management prudently invests excess cash flow proceeds in growth oriented projects and continues to manage its balance sheet in a conservative manner. Fitch expects to resolve its Positive Outlook for Calpine over the next 12-24 months after gaining further evidence of how Calpine's fleet fares in the current commodity environment. Any material change in the company's capital allocation decisions will also play a part in the future rating decisions by Fitch, most notably the pace of share repurchases. A significant proportion of growth capex diverted towards merchant assets could be a cause for concern. CANNERY CASINO: Moody's Hikes Corp. Family Rating to 'B3' --------------------------------------------------------- Moody's Investors Service upgraded Cannery Casino Resorts, LLC's Corporate Family and Probability of Default ratings to B3 and affirmed the B2 rating on the company's $40 million senior secured first lien revolver expiring in 2017 and $385 million senior secured first lien term loan due 2018, and a Caa2 on the company's $165 million senior secured second lien term loan due 2019. The rating outlook is stable. This concludes the rating for review which was initiated on September 12, 2012. Proceeds from the facilities were used to refinance Cannery's prior credit facilities along with its payment-in-kind preferred equity. Ratings Rationale The upgrade of Cannery's Corporate Family Rating to B3 reflects the completed refinancing which provides improved flexibility, as the company's earliest maturity is extended to 2017 from 2013. The B3 rating also reflects the company's free cash flow profile -- Moody's estimates between $15 - $20 million of free cash flow annually -- and the contribution from the company's Pennsylvania property which has seen improved EBITDA for the last twelve month period ended June 30, 2012 compared to the prior year. Moody's expects that the company will apply a substantial portion of its free cash flow towards further debt reduction, as its credit agreement contains a 50% excess cash flow sweep. The B3 Corporate Family Rating also reflects its high leverage, pro forma debt/EBITDA is expected to be about 6.9 times, and the company's exposure to the Las Vegas Locals market. Cannery is still reliant on this market for 30% of its EBITDA and Moody's does not expect that the market will improve materially in the near-term. The B2 rating assigned to Cannery's first lien debt reflects the support provided by the $165 million second lien debt while the Caa2 rating on the second lien debt considers the significant amount of debt ahead of it in the pro forma capital structure. The stable rating outlook reflects Moody's view that revenue and earnings will grow modestly and the company will continue to use a substantial portion of its excess free cash flow to permanently reduce debt. Cannery's ratings could be upgraded if the company reduces debt/EBITDA to below 6 times while maintaining its very good liquidity. Ratings could be lowered if monthly gaming revenues in Las Vegas and/or Pennsylvania begin to trend down, if local economic conditions show signs of renewed stress, if debt/EBITDA increases to 8 times or if the company's liquidity deteriorates. Ratings upgraded: Corporate Family Rating to B3 from Caa1 Probability of Default Rating to B3 from Caa1 Ratings affirmed: $40 million senior secured first lien revolver expiring in 2017 at B2 (LGD 3, 33%) $385 million senior secured first lien term loan due 2018 at B2 (LGD 3, 33%) $165 million senior secured second lien term loan due 2019 at Caa2 (LGD 5, 85%) Ratings withdrawn: $285 million senior secured first lien term loans due May 2013 at B3 (LGD 3, 37%) $70 million senior secured first lien revolver maturing in February 2013 at B3 (LGD 3, 37%) $115 million senior secured second lien term loan due May 2014 at Caa3 (LGD 5, 87%) The principal methodology used in rating Cannery Casino Resorts, LLC was the Global Gaming 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. Cannery Casino Resorts, LLC is a privately held gaming company that owns and operates one casino in Pennsylvania and two casinos in Las Vegas, NV. Cannery is owned by Millennium Gaming, Inc., Oaktree and Crown. The company generates about $510 million of annual net revenue. CANTOR FITZGERALD: Moody's Lowers Senior Debt Ratings to 'Ba1' -------------------------------------------------------------- Moody's Investors Service downgraded the senior debt ratings of Cantor Fitzgerald, L.P. to Ba1 from Baa3, and its closely- integrated affiliate, BGC Partners Inc. to Ba2 from Ba1. The outlook on the ratings is stable. Ratings Rationale The downgrade to Cantor Fitzgerald's ratings reflects weakened profitability that Moody's expects will persist. Over the past several years, Cantor Fitzgerald has added sales, trading and banking capabilities in an effort to supplement its traditional inter-dealer brokerage franchise (conducted through its BGC Partners affiliate) which has faced margin pressure. In response, management has added and diversified revenues but has also modestly increased the capital intensity of its business mix as its market-making activities have grown. Compensation expenses reported under GAAP have also remained stubbornly high resulting in only modest profitability. Furthermore, Moody's expects the capital markets operating environment to be challenging for all participants for the medium term. Moody's profitability concerns are tempered by Cantor Fitzgerald's disciplined approach to managing market and credit risk. When making markets, the firm emphasizes distribution, avoids concentrated positions and riskier products, while sharply limiting accumulation of aged inventory. In conducting its matched book activity, Cantor typically accepts only the most liquid collateral and assigns conservative haircuts to these positions. The firm also maintains a substantial pool of liquid assets sufficient to cover increased collateral requirements from counterparties and clearing houses in event of stress. All of these disciplines are reinforced by the firm's partnership structure, therefore Moody's expects this conservative approach to continue and this view supports the stable outlook on the ratings. The downgrade to Ba2 from Ba1 on BGC Partners reflects its modest profitability and less diversified business mix compared to Cantor Fitzgerald - but also incorporates the less balance-sheet intensive nature of the entity's commission-driven inter-dealer brokerage business. The two firms are closely integrated. Cantor has provided financing to BGC Partners in the past and the two firms also have reciprocal service agreements whereby each firm provides administrative services to each other. Accordingly, Moody's anticipates that the ratings will likely move together in the future. Cantor Fitzgerald L.P. is a private limited partnership and does not make its financial results public. Its publically traded affiliate BGC Partners Inc reported GAAP net income of $2 million ($0.01 per share) for the quarter ended June 30, 2012. The principal methodology used in this rating was Global Securities Industry Methodology published in December 2006. CANYONS AT DEBEQUE: U.S. Trustee Unable to Form Creditors Panel --------------------------------------------------------------- Richard A. Wieland, U.S. Trustee for Region 19, notified the Bankruptcy Court for the District of Colorado that he was unable to form an official committee of unsecured creditors in the Chapter 11 cases of Canyons at DeBeque Ranch, LLC, and Bluestone Ridge Ranch East, LLC. According to the U.S. Trustee, there were too few unsecured creditors who are willing to serve on creditors' committee About Canyons @ DeBeque Ranch Canyons @ DeBeque Ranch, LLC, filed a Chapter 11 petition (Bankr. D. Colo. Case No. 12-24993) in Denver on July 18, 2012. Affiliate Bluestone Ridge Ranch East, LLC, aka Bluestone Ridge Ranch PUD, based in Butte, Montana, filed a separate Chapter 11 petition (Bankr. D. Colo. Case No. 12-24994) on the same day. Judge Elizabeth E. Brown oversees the case. The Debtor is represented by Jeffrey S. Brinen, Esq., at Kutner Miller Brinen, P.C., serves as counsel to the Debtor. Canyons @ DeBuque disclosed $12,115,374 in assets and $7,182,814 in liabilities as of the Chapter 11 filing. CARPENTER CONTRACTORS: Amends Credit Agreement for Exit Financing ----------------------------------------------------------------- Carpenter Contractors of America, Inc., doing business as R & D Thiel, et al., and CCA Midwest, Inc., filed with the U.S. Bankruptcy Court for the Southern District of California documents in connection with their Second Amended Plan of Reorganization: -- Amended and Restated Senior Secured Credit Agreement; -- Subordination and Restricted Payments Agreement. The Debtor relates that on Sept. 18, 2012, the Court entered an order (i) confirming the Debtors' Plan; and (ii) providing for CCA and Midwest to jointly be liable for and to enter into agreements with lender to provide for the exit financing. The Amended Credit Agreement provides that, among other things: 1. the lender is providing an exit financing in the form of (a) one-year $7,500,000 monitored asset based line of credit; (b) a term loan in the principal amount of $1,666,666 repayable in 24 monthly installments; and 2. the lender is willing to continue provide credit support for the Debtor to the issuer of the two bond letters of credit, in return for the Debtor's and Midwest's commitment to reimburse the lender for the costs and liabilities incurred. In a separate filing, the Subordination and Restricted Payments Agreement, entered among Donald L. Thiel and Judith M. Thiel, subordinated lender; and secured lender First American Bank, provides that, among other things: (i) the subordinated lender will be in possession of any assets or properties of the borrower, (ii) then the subordinated lender will hold the assets or properties in trust for the senior lender so long as any senior debt remains outstanding and until all obligations of the senior lender to make loans and other financial accommodations to the borrower pursuant to the senior loan agreement are terminated. Copies of the exhibits are: http://bankrupt.com/misc/CARPENTERCONTRACTORS_planexhibit_b.pdf http://bankrupt.com/misc/CARPENTERCONTRACTORS_planexhibit_c.pdf The Plan As reported in the Troubled Company Reporter on July 20, 2012, according to the Second Amended Disclosure Statement, payments and distributions under the Plan will be funded by the Debtors' current and ongoing business operations. In addition, First American Bank has agreed to provide the Debtors with the exit facility in the form of a one-year $5,120,000 monitored asset based line of credit renewable annually for three years, and a $2,500,000 term note, repayable in 36 monthly installments. First American will retain its liens on the collateral to secure its allowed secured claims and will receive payments to satisfy all obligations under the bond letters of credit and related agreements. Fifth Third Bank will be paid its secured claim of $35,000 in full in 24 equal monthly installments, amortized at 8% interest. Other secured creditors are unimpaired under the Plan. General unsecured creditors of Carpenter Contractors will participate pro rata in the distribution of quarterly payments in the amount of $50,000 for year 1 of the Plan, Plan, quarterly payments in the amount of $50,000 for year 2 of the Plan, quarterly payments in the amount of $75,000 for year 3 of the Plan, and quarterly payments in the amount $125,000 for each of years 4, 5 and 6 of the Plan. General Unsecured Creditors of CCA Midwest will also receive installment payments. The holders of unsecured claims against Carpenter and CCA are impaired. Holders of equity interests are unimpaired and will retain their ownership interests in the Debtors. A copy of the Second Amended Disclosure Statement is available at: http://bankrupt.com/misc/Carpenter_Contractors_2nd_Amended_DS.pdf About Carpenter Contractors Pompano Beach, Florida-based Carpenter Contractors of America, Inc., dba R&D Thiel, provides carpentry services to builders of new homes primarily in Illinois and Florida. It also manufactures building components and distributes construction materials in Illinois, Florida, and North Carolina. CCA Midwest Inc. provides carpentry services to builders of new homes in Illinois. It is a wholly-owned subsidiary of Carpenter Contractors. Carpenter Contractors and CCA Midwest filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Lead Case No. 10-42604) on Oct. 25, 2010. Chad P. Pugatch, Esq., and Christian Savio, Esq., at Rice Pugatch Robinson & Schiller, P.A., in Ft. Lauderdale, Fl., serve as the Debtors' bankruptcy counsel. Attorneys at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC, serve as special counsel. GlassRatner Advisory & Capital Group, LLC, led by Thomas Santoro, is the Debtors' financial advisor, and Scott L. Spencer, CPA and Crowe Horwath, LLP. is the Debtors' accountant for audit work. In its amended schedules, carpenter Contractors disclosed $42,900,574 in assets and $26,013,480 in liabilities as of the Chapter 11 filing. The U.S. Trustee for Region 21 notified the Court that until further notice, he will not appoint a committee of creditors. According to the Second Amended Disclosure Statement, payments and distributions under the Plan will be funded by the Debtors' current and ongoing business operations. In addition, First American Bank has agreed to provide the Debtors with the exit facility in the form of a one-year $5,120,000 monitored asset based line of credit renewable annually for three years, and a $2,500,000 term note, repayable in 36 monthly installments. CENTRAL EUROPEAN: Reports $1.3 Billion Restated Net Loss in 2011 ---------------------------------------------------------------- Central European Distribution Corp. filed on Oct. 5, 2012, Amendment No. 2 to its annual report on Form 10-K for the year ended Dec. 31, 2011, to correct certain accounting errors for retroactive rebates provided to customers during 2011 and 2010, accounting for revenue transactions, assets write offs, cut off errors and income taxes. The Restatement also includes reclassifications of accounts payable for periods prior to 2011 to conform to the current presentation. The Company reported a net loss of $1.323 billion on $829.6 million of net sales in 2011, compared with a net loss of $138.1 million on $702.1 million of net sales in 2010. Total operating expenses increased by $944.8 million, from $367.3 million for the year ended Dec. 31, 2010, to $1.312 billion for the year ended Dec. 31, 2011. This change is primarily driven by a non-cash impairment charge for Poland and Russia recorded as of Dec. 31, 2011, of $1.058 million, and one-time gain recognized in the year ended Dec. 31, 2011, amounting to $7.9 million based on the re-measurement of previously held equity interests in Whitehall to fair value. At Dec. 31, 2011, the Company's balance sheet showed $2.017 billion in total assets, $1.809 billion in total liabilities, and stockholders' equity of $207.3 million. A copy of the Form 10-K/A is available at http://is.gd/ndjBu7 First Quarter Results The Company also restated its quarterly report on Form 10-Q for the three months ended March 31, 2012, and 2011. The Company reported net income of $60.2 million on $146.0 million of net sales for the three months ended March 31, 2012, compared with a net loss of $2.0 million on $138.4 million of net sales for the same period last year. Total operating income decreased by $9.0 million, from $5.2 million income for the three months ended March 31, 2011, to $3.8 million loss for the three months ended March 31, 2012, primarily driven by lower domestic sales and higher spirit costs in the Russian market. The Company recognized $97.6 million of non-cash unrealized foreign exchange rate income in the three months ended March 31, 2012, primarily related to the impact of movements in exchange rates on the Company's U.S. dollar and euro denominated liabilities, as compared to $30.5 million of gain in the three months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $1.971 billion in total assets, $1.680 billion in total liabilities, and stockholders' equity of $290.9 million. A copy of the Form 10-Q/A is available at http://is.gd/7TKxKa About Central European Distribution Mt. Laurel, N.J.-based Central European Distribution Corporation, a Delaware corporation incorporated on Sept. 4, 1997, and its subsidiaries operate primarily in the alcohol beverage industry. The Company is one of the largest producers of vodka in the world and is Central and Eastern Europe's largest integrated spirit beverages business, measured by total volume, with approximately 33.2 million nine-liter cases produced and distributed in 2011. The Company's primary operations are conducted in Poland and Russia and it also has operations in Hungary and Ukraine. * * * Ernst & Young Audit sp. z o.o., in Warsaw, Poland, expressed substantial doubt about Central European Distribution's ability to continue as a going concern, following the Company's audit of the Company's financial position and results of operations for the fiscal year ended Dec. 31, 2011. The independent auditors noted that certain of the Company's credit and factoring facilities are coming due in 2012 and will need to be renewed to manage its working capital needs. "Furthermore, the Company's current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to repay the Convertible Senior Notes when they become due on March 15, 2013. Moreover, the Company has incurred a net loss and significant impairment charges in 2011. CENTRAL EUROPEAN: Had $33.5-Mil. Net Loss in First Half of 2012 --------------------------------------------------------------- Central European Distribution Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $93.6 million on $187.2 million of net sales for the three months ended June 30, 2012, compared with a net loss of $3.3 million on $198.4 million of net sales for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $33.5 million on $333.2 million of net sales, compared with a net loss of $5.4 million on $336.7 million of net sales for the corresponding period of 2011. Total operating income decreased by approximately 78.9%, or $12.7 million, from $16.1 million for the six months ended June 30, 2011, to $3.4 million for the six months ended June 30, 2012, primarily driven by lower domestic sales and higher spirit costs in the Russian market. The Company recognized $22.2 million of unrealized foreign exchange rate gains in the six months ended June 30, 2012, primarily related to the impact of movements in exchange rates on the Company's U.S. dollar and euro denominated liabilities, as compared to $49.5 million of income in the six months ended June 30, 2011. These gains resulted mainly from the appreciation of the Polish zloty and Russian ruble against the U.S. dollar and euro. The Company's balance sheet at June 30, 2012, showed $1.869 billion in total assets, $1.681 billion in total liabilities, $29.6 million of temporary equity, and stockholders' equity of $158.1 million. A copy of the Form 10-Q is available at http://is.gd/WxHSku About Central European Distribution Mt. Laurel, N.J.-based Central European Distribution Corporation, a Delaware corporation incorporated on Sept. 4, 1997, and its subsidiaries operate primarily in the alcohol beverage industry. The Company is one of the largest producers of vodka in the world and is Central and Eastern Europe's largest integrated spirit beverages business, measured by total volume, with approximately 33.2 million nine-liter cases produced and distributed in 2011. The Company's primary operations are conducted in Poland and Russia and it also has operations in Hungary and Ukraine. * * * Ernst & Young Audit sp. z o.o., in Warsaw, Poland, expressed substantial doubt about Central European Distribution's ability to continue as a going concern, following the Company's audit of the Company's financial position and results of operations for the fiscal year ended Dec. 31, 2011. The independent auditors noted that certain of the Company's credit and factoring facilities are coming due in 2012 and will need to be renewed to manage its working capital needs. "Furthermore, the Company's current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to repay the Convertible Senior Notes when they become due on March 15, 2013. Moreover, the Company has incurred a net loss and significant impairment charges in 2011. CENTRAL PLAINS: S&P Affirms 'B' Rating on 2 Revenue Bond Issues --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' senior secured debt rating on Central Plains Energy Project's (CPEP) series 2007A fixed-rate gas project revenue bonds and series 2007B index-rate gas project revenue bonds. The outlook is negative. "The affirmation follows our review of the restructuring of the CPEP transaction. The restructuring will reduce the amount of series 2007A bonds outstanding by $47.575 million and the amount of series 2007B bonds outstanding by $42.590 million. In conjunction with the termination of these bonds, the project will amend the indenture, gas supply and sales agreements, interest rate swap, commodity swap, and other transaction documents to reflect changes to the sinking fund schedule, gas volumes, and debt outstanding," S&P said. The rating reflects S&P's view of these strengths: The obligations of J. Aron as gas supplier, receivables purchaser, and interest rate swap provider are guaranteed by its highly rated parent. Bondholders are not exposed to operating risk related to gas deliveries because if J. Aron fails to deliver gas for any reason, including force majeure, J. Aron must obtain alternative supplies or reimburse CPEP for the cost of replacement gas. If a project participant defaults, provisions under the transaction require CPEP or J. Aron to remarket gas volumes to other qualified municipalities. This mitigates the credit risk of CPEP's municipal participants and the potential harm of a participant bankruptcy to CPEP's ability to make the required payments for debt service and the commodity swap. A receivables purchase agreement with J. Aron stipulates that, upon termination or maturity, the gas supplier will purchase any delinquent municipal participant receivable from CPEP at face value to ensure that payment shortfalls are avoided. This should mitigate municipal participant payment risk. Under the terms of the various agreements, J. Aron will make an early termination payment that allows the trustee to redeem bonds at par value plus any accrued interest as a result of J. Aron's failure to perform on a payment default. The documents also require J. Aron to make an early termination payment if the commodity or interest rate swaps terminate for any reason (other than a CPEP default) without replacement in 45 days. The documents provide that the trustee may replace any swap counterparty that is not rated at least 'A' so as to insulate bondholders somewhat from any significant credit deterioration of the swap counterparty. "The negative outlook on CPEP's bonds reflects the outlook on MBIA Insurance Corp. as the guarantor to the guaranteed investment contract agreement supporting the debt service and working capital reserves," said Standard & Poor's credit analyst Ben Macdonald. "The negative outlook on MBIA reflects our view that adverse loss developments on the structured finance book could continue, diminishing liquidity and weakening capital," Mr. Macdonald added. CHINA GINSENG: Had $2.9-Mil. Net Loss in Fiscal 2012 ---------------------------------------------------- China Ginseng Holdings, Inc., filed on Oct. 4, 2012, its annual report on Form 10-K for the fiscal year ended June 30, 2012. Meyler & Company, LLC, in Middletown, N.J., expressed substantial doubt about China Ginseng's ability to continue as a going concern. The independent auditors noted that the Company has incurred an accumulated deficit of $5.8 million since inception, has a negative working capital of $547,480, and there are existing uncertain conditions the Company faces relative to its ability to obtain working capital and operate successfully. The Company reported a net loss of $2.9 million on $4.3 million of revenue in fiscal 2012, compared with a net loss of $1.1 million on $4.2 million of revenue in fiscal 2011. The Company's balance sheet at June 30, 2012, showed $8.1 million in total assets, $5.6 million in total liabilities, and stockholders' equity of $2.5 million. A copy of the Form 10-K is available at http://is.gd/9gYaEV China Ginseng Holdings, Inc., headquartered in Changchun City, China, was incorporated on June 24, 2004 in the State of Nevada. Since its inception in 2004, the Company has been engaged in the business of farming, processing, distribution and marketing of fresh ginseng. Starting August 2010, it has gradually shifted our business focus from farming and selling ginseng to producing and selling ginseng juice and wine, although it still maintains its farming and selling ginseng business. CIRCLE ENTERTAINMENT: Borrows $285,000 from Directors, Officers --------------------------------------------------------------- Certain of the directors, executive officers and greater than 10% stockholders of Circle Entertainment Inc. made unsecured demand loans to the Company totaling $285,000, bearing interest at the rate of 6% per annum. The Company intends to use the proceeds from the Loans to fund working capital requirements and for general corporate purposes. Because certain of the directors, executive officers and greater than 10% stockholders of the Company made the Loans, a majority of the Company's independent directors approved the transaction. About Circle Entertainment New York City-based Circle Entertainment Inc. has been pursuing the development and commercialization of its new location-based entertainment line of business since Sept. 10, 2010, which has and will continue to require significant capital and financing. The Company does not currently generate any revenues from this new line of business. The Company has no long-term financing in place or commitments for such financing to develop and commercialize its new location-based entertainment line of business. As reported in the TCR on March 30, 2012, L.L. Bradford & Company, LLC, in Las Vegas, Nevada, expressed substantial doubt about Circle Entertainment'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 limited available cash, has a working capital deficiency and will need to secure new financing or additional capital in order to pay its obligations. The Company's balance sheet at June 30, 2012, showed $7 million in total assets, $16.50 million in total liabilities, and a $9.50 million total stockholders' deficit. COMMUNICATIONS CORP: Moody's Affirms B3 CFR/PDR, Outlook Stable --------------------------------------------------------------- Moody's Investors Service affirmed the B2, LGD3 -- 38% rating on Communications Corporation of America's ("CCA") proposed $157.5 million 1st lien senior secured term loan. Proceeds from the new term loan along with the downsized $32.5 million 2nd lien term loan (unrated) and cash on the balance sheet will be used to refinance $186 million of existing unrated debt. Moody's also affirmed the B3 Corporate Family Rating (CFR) and Probability of Default Rating (PDR). The rating outlook remains stable. Affirmed: Issuer: Communications Corporation of America Corporate Family Rating: Affirmed B3 Probability of Default Rating: Affirmed B3 $157.5 million 1st lien sr secured term loan (matures in 5.5 years): Affirmed B2, LGD3 -- 38% Outlook Actions: Issuer: Communications Corporation of America Outlook is Stable To be withdrawn: Issuer: Communications Corporation of America $5 million 1st lien sr secured revolver: B2, LGD3 -- 38% Ratings Rationale The B3 corporate family rating reflects CCA's very high estimated pro forma, 2-year average debt-to-EBITDA leverage of approximately 6.6x for FYE2012 (including Moody's standard adjustments, or 6.5x net of cash), increasing fragmentation of media outlets, the cyclical and mature nature of television advertising demand, concentration of network affiliations with Fox, as well as the company's lack of national scale and revenue concentration in Louisiana and Texas (more than 90% of revenues). Since emerging from bankruptcy, new management established centralized program distribution and rationalized operating costs to bring EBITDA margins above 37% in 2010 and 2011 compared to EBITDA margins of less than 30% in prior years. The B3 rating reflects Moody's expectation for free cash flow-to-total debt of 4% to 5% incorporating the accrual of PIK interest (LIBOR + 15%) on $32.5 million of unrated 2nd lien debt. Absent the ability to PIK interest payments, free cash flow-to-total debt would be reduced to roughly 2%. The average $7 million of accrued PIK interest in each of the first two years almost offsets expected term loan repayments resulting in no meaningful reduction in debt balances. The company is weakly positioned in the B3 rating category as the absence of #1 or #2 revenue rankings for the stations (nine of ten stations are ranked #3 or below) puts downward pressure on ratings. Ratings are supported by good EBITDA margins, a moderate increase in non-cyclical cash flow benefits in the near term from retransmission agreements (net of reverse compensation payments), and, to a lesser extent, incremental political revenues during even years. Core revenues and EBITDA are expected to grow in the low single digit range over the rating horizon. Beyond the rating horizon, Moody's believes CCA will be pressured to grow ad revenues or negotiate higher retransmission fees to offset expected increases in reverse compensation payments. Accordingly, Moody's believes it is important that free cash flow be used to reduce debt balances to maintain debt ratings and improve credit metrics. Liquidity is expected to be adequate. This revised proposal has no revolver facility and the 2nd lien term loan is reduced to $32.5 million from $35 million. The tenor on the proposed 1st lien term loan is shortened to 5.5 years from 7 years and the excess cash flow sweep has been increased to 75% from 50% with step downs depending on leverage (as defined). The stable outlook assumes successful refinancing of current credit facilities and reflects Moody's view that revenue and EBITDA from Louisiana and Texas will remain in line with expectations. The outlook also incorporates Moody's expectation that free cash flow-to-debt ratios will remain at 4% to 5% or more and that 2-year average debt-to-EBITDA ratios will improve from current levels with increasing retransmission revenues offsetting expected increases in reverse compensation payments over the next 12-18 months. Ratings could be downgraded if 2-year average debt-to-EBITDA ratios are sustained above 7.0x due to performance deterioration in one of CCA's key markets or due to PIK accretion on the 2nd lien notes, debt financed acquisitions, or shareholder distributions. Deterioration in liquidity could also result in a downgrade. Ratings could be upgraded if 2-year average debt-to- EBITDA ratios are sustained below 5.75x and Moody's expects that leverage will continue to decline, despite the potential for accruing interest expense. Free cash flow-to-debt ratios are expected to be above 7%. Liquidity would also need to remain adequate. The principal methodology used in rating Communications Corporation of America 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. Communications Corporation of America is a television broadcaster owning or operating television stations (owns 10 primary signals and operates another 6 primary stations under SSA arrangements), in small and medium-sized markets ranked #83 to #179 largely clustered in Louisiana and Texas, plus one station in Indiana. Approximately 45% of revenues are generated by Fox affiliated stations and 39% by NBC affiliates with the remainder from CBS and non-Big Four networks. CCA filed chapter 11 in June 2006 and emerged in October 2007 resulting in the restructuring of roughly $425 million of debt. Former debt holders became shareholders including Silver Point Capital which owns 76% of outstanding shares and with various funds of Pyxis Capital (fka Highland Funds) holding 23% of shares. Headquartered in Lafayette, Louisiana, CCA reported net revenues of approximately $82 million for the 12 months ended June 2012. CONTEC HOLDINGS: Court Confirms Plan of Reorganization ------------------------------------------------------ Contec Holdings, LTD, the market leader in repair and refurbishment of customer premise equipment for the cable industry, disclosed that the U.S. Bankruptcy Court for the District of Delaware confirmed the Company's Plan of Reorganization. "This was the critical milestone in our reorganization process," commented Lawrence Young, Interim Chief Executive Officer of Contec. "With the support of our lenders, we were able to reduce our debt by over $250 million and obtain an incremental $25 million in financing, to aggressively pursue growth opportunities." "Day-to-day operations have not been impacted by this process, and our customers, employees and suppliers have been extremely supportive of us during this period," said Wes Hoffman, Chief Operating Officer of Contec. "We stake our reputation every day on being the industry leader in providing repair and logistics solutions for our customers while saving time, improving quality and reducing cost." Hoffman continued, "We look forward to aggressively pursuing our growth plans and strategic partnerships to expand into a more diverse menu of service offerings." About Contec Holdings Headquartered in Schenectady, New York, Contec Holdings Ltd. -- http://www.gocontec.com/-- is the market leader in the repair and refurbishment of customer premise equipment for the cable industry. The Company repairs more than 2 million cable set top boxes annually, while also providing logistical support services for over 12 million units of cable equipment annually. With substantial operations in the United States and Mexico, the Debtors earned revenues of approximately $153.6 million in 2011, and as of July 28, 2012, the Debtors directly employed over 2,300 people in North America, 72% of which are unionized. Contec Holdings, Ltd., and its affiliates on Aug. 29, 2012 sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12437) with a plan of reorganization that has the support of senior lenders and noteholders. Ropes & Gray LLP, serves as bankruptcy counsel to the Debtors; Pepper Hamilton LLP is the local counsel; AP Services LLC, is the restructuring advisor; Moelis & Company is the investment banker; and Garden City Group is the claims agent. CORD BLOOD: Sells Stake in stellacure GmbH to Medivision -------------------------------------------------------- Cord Blood America, Inc., has sold its 51% stake in its German subsidiary, stellacure GmbH, to Medivision mbH, headquartered in Hamburg, Germany, for approximately EUR33,649 or $43,420. A principal of Medivision was also a minority shareholder in stellacure prior to closure of this deal. Other minority shareholders, with the exception of the German Red Cross, agreed to sell their positions in stellacure to Medivision pro rata to the terms of CBAI. "There were primarily three options facing us as we evaluated stellacure; we could continue to invest, we could sell our stake at a highly discounted position, or allow for a bankruptcy filing. Regarding further investment, we concluded several months ago that we were not going to provide any additional funding to stellacure, and in fact, have not provided any working capital under the terms of the loan agreement since September of 2011," commented Joseph Vicente, President of Cord Blood America. "There was no clear path regarding the additional time or incremental capital stellacure would require to achieve profitability. In our most recent 2012 second quarter filing, stellacure experienced a 28.3% decline in revenues compared to same period in 2011. Those revenues accounted for only 6.3% of the total consolidated revenues for the Company, and stellacure was the only operating unit to post an operating loss which totaled over $100,000. The capital needed to sustain the ongoing operating losses is much better served in our current debt restructuring initiatives which we first announced in early July and continue to focus on as we improve the capital structure of the Company. In addition to the elimination of the consolidated operating loses, we expect save approximately $40,000 in annual professional service fees." Mr. Vicente concluded, "With the decision made not to provide additional funding, we were faced with the imminent filing of bankruptcy if the business was not sold. With an interested party coming forward to acquire stellacure, we concluded that our ability to secure a waiver against all past and future claims, along with a nominal amount of cash, as the key factors resulting in our decision to sell our stake in stellacure. The protracted uncertainty surrounding a bankruptcy is something we wanted to avoid as we position CBAI for the future. Regarding the Company's financial statements, we are going to take a one time charge in our third quarter, 2012, as we write off a significant portion of the loan to stellacure. Going forward, we are confident we are a stronger company financially as we eliminate a subsidiary that we believe was not able to produce growth and/or profitability for the foreseeable future." A copy of the Agreement is available for free at: http://is.gd/hiV9LX About Cord Blood America Based in Las Vegas, Nevada, Cord Blood America, Inc., is primarily a holding company whose subsidiaries include Cord Partners, Inc., CorCell Co. Inc., CorCell Ltd.; CBA Professional Services, Inc. D/B/A BodyCells, Inc.; CBA Properties, Inc.; and Career Channel Inc, D/B/A Rainmakers International. Cord specializes in providing private cord blood stem cell preservation services to families. BodyCells is a developmental stage company and intends to be in the business of collecting, processing and preserving peripheral blood and adipose tissue stem cells allowing individuals to privately preserve their stem cells for potential future use in stem cell therapy. Properties was formed to hold the corporate trademarks and other intellectual property of CBAI. Rain specializes in creating direct response television and radio advertising campaigns, including media placement and commercial production. After auditing the 2011 results, Rose, Snyder & Jacobs, LLP, in Encino, California, expressed substantial doubt substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has sustained recurring operating losses, continues to consume cash in operating activities, and has insufficient working capital and an accumulated deficit at Dec. 31, 2011. Cord Blood reported a net loss attributable to the Company of $5.97 million in 2011, compared with a net loss attributable to the Company of $8.09 million in 2010. The Company's balance sheet at June 30, 2012, showed $7.44 million in total assets, $6.76 million in total liabilities and $682,107 in total stockholders' equity. CORNER INVESTMENT: S&P Gives 'B-' Corp. Credit Rating; Outlook Neg ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned Corner Investment Propco LLC (hereafter referred to as Caesars Drai's) its 'B-' corporate credit rating. The company is an indirect wholly owned subsidiary of Las Vegas-based Caesars Entertainment Corp. The rating outlook is negative. "At the same time, we assigned Caesars Drai's proposed $180 million senior secured term loan due 2019 our 'B' issue-level rating (one notch higher than the 'B-' corporate credit rating), with a recovery rating of '2', indicating our expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. The proposed term loan will not be guaranteed by direct parent Caesars Entertainment Operating Co. Inc. or the ultimate parent, Caesars Entertainment Corp.," S&P said. "The company will use proceeds from the term loan to fund construction costs associated with the redevelopment of Bill's, fund an interest reserve and working capital, and pay fees and expenses," S&P said. "Our corporate credit rating on Caesars Drai's reflects our assessment of the company's financial risk profile as 'highly leveraged' and our assessment of the company's business risk profile as 'vulnerable,' according to our rating criteria," said Standard & Poor's credit analyst Melissa Long. "Our assessment of Caesars Drai's financial risk profile as highly leveraged reflects the aggressive financial policy and weak credit profile of the ultimate parent, Caesars Entertainment Corp. (CEC). Although the borrower is structured as an unrestricted subsidiary of CEC, we believe its credit quality is linked to that of CEC. We believe that a bankruptcy at CEC could cause a bankruptcy at Caesars Drai's, if management decides it is in its best interest to include it in a broader bankruptcy proceeding," S&P said. "Beyond the structural linkage related to CEC's controlling position, Caesars Drai's will also rely on approximately $23.5 million of fixed lease payments from the direct parent Caesars Entertainment Operating Co. Inc. (CEOC). These lease payments comprise the majority of the cash flows available to service debt each year under our performance expectations, although the payments can step down based on leverage at Caesars Drai's. While these lease payments offer steady cash flow streams sufficient to meet debt service needs, given CEC's weak credit profile (including operating lease-adjusted debt to EBITDA of about 12x and EBITDA coverage of interest of just 0.9x as of June 30, 2012), we believe this level of fixed-lease payment could challenge CEOC's ability to meet its own debt obligations in the event performance trends across the Las Vegas Strip deteriorate or cash flows from this project fail to reach at least that level," S&P said. "Our assessment of Caesars Drai's business risk profile as vulnerable reflects the entity's reliance on a single property for cash flow, its position in a highly competitive market with many casino and nightclub operators, and risks associated with redeveloping and turning around an underperforming property, including attracting a new customer demographic. The project is a redevelopment of Bill's Gamblin' Hall & Saloon, which will add a Drai's designed and managed nightclub and dayclub, upgrade the casino, and remodel and convert the hotel into a boutique hotel. While the renovation project faces construction and execution risks, these risks are lower than those of a new build, in our view. Our business risk assessment also takes into account the property's favorable location on the Las Vegas Strip, which lends itself to significant foot traffic, management's significant experience in operating casinos and nightclubs, and the inclusion of the property in Caesars' Total Rewards network," S&P said. CUNNINGHAM LINDSEY: S&P Assigns 'B' Counterparty Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' long-term counterparty credit rating to Cunningham Lindsey Group Ltd. (CLGL) following the announcement of private-equity sponsor CVC Capital Partners' (CVC) acquisition of a majority ownership interest in the company. "At the same time, we are assigning our 'B' issue- level rating with '3' recovery rating to the company's proposed first-lien facilities consisting of a $395 million term loan and a $140 million revolver. The '3' recovery rating indicates our expectation for a meaningful (50%-70%) recovery for lenders in the event of a payment default. We also assigned our 'B-' debt rating with a '5' recovery rating to the company's proposed $125 million second-lien term loan. The '5' recovery rating indicates our expectation of modest (10%-30%) recovery of principal in the event of a default. The outlook is stable," S&P said. "Our counterparty credit rating on CLGL, which owns various subsidiaries across broad regions, reflects the company's marginal liquidity and limited financial flexibility resulting from its highly leveraged capital structure with a high amount of intangible assets," said Standard & Poor's credit analyst Polina Chernyak. "Furthermore, in our view the company faces integration and execution risks in its growth-by-acquisition strategy, though we believe this will be generally manageable based on its track record. Offsetting these negative factors is the company's good competitive position as one of the largest global loss-adjusting and claims-management services providers. In addition, the company differentiates itself from peers through its increasingly diverse revenue streams across a broad geographic platform and service provisions, and improving operating performance." "The $934 million (net of cash) acquisition of majority ownership interest in CLGL by CVC includes a sizable $349 million equity component (about 40% of the considered purchase price); however, a $585 million debt-funding component (the other 60%) somewhat worsens the company's credit fundamentals. Specifically, our adjusted pro-forma total debt-to-adjusted EBITDA ratio deteriorates to 5.8x from about 2.6x for full-year 2011 before the transaction. We believe that, although the proposed recapitalization under CVC would result in somewhat weaker credit- protection measures, the company's business and financial profile will enable it to deleverage gradually," S&P said. "CLGL is issuing a seven-year first-lien term loan B of $395 million, a $140 million five-year revolving facility ($65 million will be drawn at closing), and a 7.5-year second-lien term loan of $125 million to finance its recapitalization in conjunction with the CVC acquisition. We expect the transaction to close in November 2012," S&P said. "The outlook is stable. We expect the company to enhance its market position through a series of acquisitions targeting regional small companies that generate EBITDA margins in a range of 11%-14%, and to maintain its trajectory of favorable performance, with overall organic growth in the positive low- to mid-single digits on continued market share gains. Due diligence is the key to managing acquisition risks. We expect CLGL to maintain a marginal financial profile and generate an adjusted margin of 11%-14%, with a debt-to-last-12-months adjusted EBITDA ratio of less than 6x and EBITDA fixed-charge coverage of 2x or more. Overall, we expect CLGL to maintain its earnings and stay compliant with its financial covenants under the new credit facilities. If CLGL is unable to meet these expectations, we could lower the rating one notch. A positive rating action is possible if the company demonstrates a sustainable track record of improved earnings and leverage metrics," S&P said. CYCLONE POWER: Has $2.5-Mil. Stock Purchase Pact with GEM Global ---------------------------------------------------------------- Cyclone Power Technologies, Inc., signed a Common Stock Purchase Agreement with GEM Global Yield Fund Limited whereby GEM has agreed to purchase up to $2.5 million of the Company's common stock over the following 24-month period. Under a Registration Rights Agreement concurrently signed with GGYF, the Company agreed to file an S-1 Registration Statement with the Securities and Exchange Commission covering the shares that may be issued to GGYF under the Purchase Agreement. The purchase price of the shares related to the future funding will be based on a 10% discount to the prevailing market prices of the Company's shares at the time of sales. The Company will control the timing and amount of any sales of shares to GGYF by issuing to GGYF a draw down notice. The amount of shares that the Company may require GGYF to purchase at one time is limited to 400% of the average daily trading volume for the 10 trading days prior to the notice. GGYF will not be obligated to purchase more than 50% of any amount in a draw down notice and will have the option to subscribe for up to 200% of any draw down notice. In consideration for entering into the $2.5 million Purchase Agreement, GGYF will receive a structuring fee from the Company of $37,500, payable from not more than 25% of any gross proceeds from any draw down and not later than 12 months from the date on of the Purchase Agreement. GGYF has also received common stock purchase warrants to purchase for a period of five years up to 5,000,000 shares of Common Stock at an exercise price per share equal to $.27 per share, representing approximately a 125% premium over the current market price of the Company's common stock. The shares underlying the Warrants are being registered in the current S-1. The Purchase Agreement may be terminated at any time by written mutual consent. The proceeds received by the Company under the common stock purchase agreement will be used for general working capital purposes. About Cyclone Power Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink Sheets: CYPW) is a clean-tech engineering company, whose business is to develop, commercialize and license its patented Rankine cycle engine technology for applications ranging from renewable power generation to transportation. The Company is the successor entity to the business of Cyclone Technologies LLLP, a limited liability limited partnership formed in Florida in June 2004. Cyclone Technologies LLLP was the original developer and intellectual property holder of the Cyclone engine technology. The Company reported a net loss of $23.70 million in 2011, compared with a net loss of $2.02 million in 2010. The Company's balance sheet at June 30, 2012, showed $1.68 million in total assets, $3.79 million in total liabilities and a $2.11 million total stockholders' deficit. In its audit report for the year ended Dec. 31, 2011, results, Mallah Furman, in Fort Lauderdale, FL, noted that the Company's dependence on outside financing, lack of sufficient working capital, and recurring losses raises substantial doubt about its ability to continue as a going concern. DEWEY & LEBOEUF: Prosecutors Look Into Disclosures to Lenders ------------------------------------------------------------- The Wall Street Journal's Jennifer Smith and Reed Albergotti report that prosecutors in Manhattan are investigating whether top managers at Dewey & LeBoeuf LLP purposely misled lenders about the law firm's financial health, according to people with knowledge of the investigation. WSJ relates that, according to a person briefed on the probe, investigators also are looking into whether the law firm's leaders made false statements to former partners about Dewey's progress repaying loans on their behalf. The report says the probe began about five months ago on the eve of the firm's collapse and is still in its early stages and may not result in the filing of any criminal charges. One source told WSJ the Manhattan district attorney has sent subpoenas in recent months to Dewey and at least one of its lenders seeking information relating to communications Dewey's leaders had with banks and former partners. Prosecutors have also met with Dewey's bank lenders, according to one of these people. WSJ says Barry Bohrer, a lawyer for former Dewey chairman Steven Davis, didn't respond to a request for comment, but Mr. Bohrer previously has said that, "Every action of Mr. Davis as chair of the firm was taken in good faith and in the best interests of the firm." WSJ relates that, according to the person briefed on the probe, a major focus in the continuing probe is on statements made by Dewey's leaders to a bank syndicate led by J.P. Morgan Chase with which the firm had a $100 million revolving line of credit. The agreement expired earlier this year, and the firm's managers were trying to extend it in the months leading up to Dewey's demise. WSJ notes it isn't clear what time period prosecutors are examining. According to the report, two people familiar with Dewey's finances in recent years said they doubted that managers had engaged in criminal behavior, and said that lenders had always been given the firm's audited financial statements. Sources also told WSJ that investigators are looking into the bank loans that some former Dewey partners took out from Barclays PLC's corporate-banking division to buy equity in the firm, a common practice at large law firms. When those partners left, Dewey was supposed to return their capital by paying down the balance of the loan, which, as previously reported by The Wall Street Journal, the firm had struggled to do. According to the report, last year Dewey told some former partners that the firm was making payments on the principal of the loans. But in some cases the firm had only paid down the interest, according to ex-partners and a person with knowledge of the repayment schedule, WSJ relates. According to WSJ, Ned Bassen, Esq., at Hughes Hubbard & Reed LLP, who is representing Messrs. Davis, former executive director Stephen DiCarmine and former chief financial officer Joel Sanders in the firm's bankruptcy proceedings, said his clients weren't responsible for the firm's collapse, and that no evidence proving their culpability had yet been presented. 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: Jones Day May Seek Final Allowance of LAD Fees --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has granted Dewey & LeBoeuf LLP authorization to employ Jones Day as special counsel to the Debtor, nunc pro tunc to Sept. 19, 2012, solely for the limited purpose of preparing, filing and prosecuting a final fee application on behalf of DL in connection with the bankruptcy of Los Angeles Dodgers and its affiliates. As reported in the TCR on Sept. 27, 2012, other than with respect to the services to be provided by Jones Day under the comprehensive settlement agreement and stipulation including agreement relating to the Jones Day final fee application, Jones Day will not be precluded from representing or holding any interest adverse to DL in the DL Bankruptcy Case or otherwise by reason of the LAD Stipulation or the performance of services pursuant to the LAD Stipulation. DL consents to and waives any objection it may have to (a) any representation by Jones Day of any adversary of DL or any person holding an interest adverse to DL in the DL Bankruptcy Case or otherwise, and (b) any adverse interest held by Jones Day or any partners, members of counsel, or associates of Jones Day in the DL Bankruptcy Case or otherwise. Based on the facts set forth in the declaration of Sidney P. Levinson, formerly an attorney at DL and now a partner of Jones Day, the Debtor's estate may assert certain claims or causes of action against Jones Day and former DL partners on matters unrelated to LAD Settlement. Jones Day will apply to the LAD Bankruptcy Court for professional compensation at its prevailing hourly rates and for reimbursement for expenses reasonably incurred in connection with the preparation and prosecution of the Final Fee Application and LAD or the LAD Disbursing Agent will directly pay Jones Day all amounts awarded by the LAD Bankruptcy Court on account of such services. The estate of DL will not be responsible for payment of the fees or expenses incurred by Jones Day in connection with the preparation and prosecution of the Final Fee Application. A copy of the LAD Stipulation is available at: http://bankrupt.com/misc/dewey.doc526.pdf 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: Hiring Wescher as Auctioneer to Sell Artwork ------------------------------------------------------------- Dewey & LeBoeuf LLP asks the U.S. Bankruptcy Court for the Southern District of New York for authority to (A) employ Adam A. Wescher & Son, Inc., as auctioneer, and (B) to sell the Debtor's collection of artwork pursuant to private auctions. The Debtor listed the artwork as having a book value of $2.3 million in its schedules of assets and liabilities. The Debtor, however, believes this book value does not accurately represent the current value of the artwork. To the best of the Debtor's knowledge, Weschler and its employees are "disinterested persons," as that term is defined in Section 101(14) of the Bankruptcy Code. Pursuant to the terms of the Weschler Agreements, Weschler will be be entitled to these commissions from the successful sale of the artwork for capital collection and single owner auctions: Aggregate Sale Price Commission Rate -------------------- --------------- Up to $99,999 10% Commission $100,000 - $299,999 8% Commission $300,000 - $499,999 6% Commission Over $500,000 4% Commission For metro auctions, Weschler will be entitled to a flat 15% commission from the sale of the artwork based on the final bid price. Weschler will also be to charge purchasers of the artwork a fee as follows: (i) for capital collection and single-owner auctions an amount equal to 18% if paid by cash and 20% if paid by credit card; (ii) for metro auctions an amount equal to 15% if paid by cash and 18% if paid by credit card; and (iii) any other reasonable fees charged to the purchaser, such as shipping and handling costs. Weschler's collection of the buyer's premiums will not be considered proceeds for the purpose of calculating the commission. 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. DIALOGIC INC: Regains Compliance with NASDAQ's $1 Bid Price Rule ---------------------------------------------------------------- Dialogic Inc. received a deficiency letter from the Listing Qualifications Department of The NASDAQ Stock Market, notifying it that, for the prior 30 consecutive business days, the bid price for the Company's common stock had closed below the minimum $1.00 per share requirement for continued listing on The NASDAQ Global Market pursuant to NASDAQ Listing Rule 5450(a)(1). On Oct. 2, 2012, the Staff notified the Company that it has determined that for the last 10 consecutive business days, from Sept. 17, 2012, to Sept. 28, 2012, the closing bid of the Company's common stock has been above the minimum $1.00 per share price. Accordingly, the Company has regained compliance with the Bid Price Rule and this matter is now closed. About Dialogic Milpitas, Calif.-based Dialogic Inc. provides communications platforms and technology that enable developers and service providers to build and deploy innovative applications without concern for the complexities of the communication medium or network. The Company reported a net loss of $54.81 million in 2011, following a net loss of $46.71 million in 2010. The Company's balance sheet at June 30, 2012, showed $140.76 million in total assets, $188 million in total liabilities, and a $47.23 million total stockholders' deficit. Bankruptcy Warning The Company said in its 2011 annual report that in the event of an acceleration of the Company's obligations under the Term Loan Agreement or Revolving Credit Agreement and its failure to pay the amounts that would then become due, the Revolving Credit Lender or Term Lenders could seek to foreclose on the Company's assets. As a result of this, or if the Company's stockholders do not approve the Private Placement and the Notes become due and payable, the Company would likely need to seek protection under the provisions of the U.S. Bankruptcy Code or the Company's affiliates might be required to seek protection under the provisions of applicable bankruptcy codes. In that event, the Company could seek to reorganize its business, or the Company or a trustee appointed by the court could be required to liquidate the Company's assets. DIANA LYNN CARTEE: Case Summary & 4 Unsecured Creditors ------------------------------------------------------- Debtor: Diana Lynn Cartee aka Diana Lynn Day-Cartee 514 Park Center Drive Nashville, TN 37205 Bankruptcy Case No.: 12-09099 Chapter 11 Petition Date: October 4, 2012 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Judge: Marian F. Harrison Debtor's Counsel: Thomas Larry Edmondson, Sr., Esq. T. LARRY EDMONDSON ATTORNEY AT LAW 800 Broadway 3D Fl Nashville, TN 37203 Tel: (615) 254-3765 Fax: (615) 254-2072 E-mail: larryedmondson@live.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its four unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/tnmb12-09099.pdf The petition was signed by Diana Lynn Cartee. DIGITAL DOMAIN: Rosen Law Firm Alerts Investors for Class Action ---------------------------------------------------------------- The Rosen Law Firm reminds investors of the Nov. 19, 2012 lead plaintiff deadline in the class action lawsuit filed by the firm on behalf of investors who purchased the common stock Digital Domain Media Group, Inc. in its Company's initial public offering on Nov. 18, 2011, and also including those investors who bought DDMG stock between Nov. 18, 2011 and Sept. 6, 2012. If you purchased DDMG stock between Nov. 18, 2011 through and including Sept. 6, 2012, you may join the DDMG class action by visiting the firm's website at http://rosenlegal.com/; you may call Phillip Kim, Esq., toll-free, at 866-767-3653 or e-mail pkim@rosenlegal.com for information on the class action. The Complaint alleges that in violation of the federal securities laws defendants made material misstatement of facts about the Company's true financial condition in the IPO documents. Namely, Defendants (a) did not accurately describe the Company's "burn rate" of cash the Company's ability to continue as a going concern; (b) failed to disclose that at the time of the IPO DDMG CEO Textor had entered into an undisclosed loan agreement for $10 million which was secured by DDMG shares; and (c) failed to disclose that certain members of DDMG's senior management had previously served as senior management of another company that went bankrupt in 2008. The Complaint alleges that these undisclosed facts materialized in the form of DDMG's bankruptcy filing on Sept. 11, 2012, damaging investors. If you wish to serve as lead plaintiff, you must move the Court no later than Nov. 19, 2012. A lead plaintiff is a representative party acting on behalf of other absent class members in directing the litigation. If you wish to join the litigation, or to discuss your rights or interests regarding this class action, please contact Jonathan Horne, Esq. or Phillip Kim, Esq. of The Rosen Law Firm, toll-free, at 866-767-3653, or via e-mail at jhorne@rosenlegal.com or pkim@rosenlegal.com. You may also visit the firm's website at http://www.rosenlegal.com. The Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. 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. An official committee of unsecured creditors appointed in the case is represented by lawyers at Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP. The company listed assets of $205 million and liabilities totaling $214 million. Debt includes $40 million on senior secured convertible notes plus $24.7 million in interest. There is another issue of $8 million in subordinated secured convertible notes. ELEPHANT TALK: Mobile and Security Revenue Up Roughly 106% Y/Y -------------------------------------------------------------- Elephant Talk Communications, Corp., announced preliminary third quarter results for 2012. Preliminary 3Q12 results: * Mobile and Security revenue was approximately $2.9 million, a year-over-year increase of about 106%, up from $1.4 million in 3Q11 * Mobile and Security revenue accounted for an estimated 44% of total third quarter revenue, up from 18% in the same year ago period * Gross Margin (revenue minus cost of services), a non-GAAP measure, increased approximately 160% to about $2.1 million representing about 31% of total revenue. Gross Margin for the third quarter of 2011 was $0.8 million and accounted for 10% of revenue * Adjusted EBITDA, a non-GAAP measure, improved sequentially to a loss of approximately $2.3 million from a loss of $2.7 million in the second quarter of 2012 * The Company ended the quarter with an unrestricted cash balance of approximately $4.3 million, up slightly from the $4.1 million reported at the end of the second quarter of 2012 "We are pleased with our preliminary third quarter results," stated Steven van der Velden, CEO of Elephant Talk Communications. "Due to strong growth of the higher margin Mobile and Security revenues and tight controls on cash in the third quarter, the Company remains on track to achieve its first month of positive operational cash flow by early 2013, excluding non-cash expenses and capital expenditures." The Company plans to report actual third quarter 2012 results in early November. About Elephant Talk Lutz, Fla.-based Elephant Talk Communications, Inc. (OTC BB: ETAK) -- http://www.elephanttalk.com/-- is an international provider of business software and services to the telecommunications and financial services industry. The Company's balance sheet at June 30, 2012, showed $44.63 million in total assets, $17.30 million in total liabilities, and $27.32 million in total stockholders' equity. Elephant Talk reported a net loss of $25.31 million in 2011, a net loss of $92.48 million in 2010, and a net loss of $17.29 million in 2009. The Company reported a net loss of $10.99 million for the six months ended June 30, 2012. EMMIS COMMUNICATIONS: Sells Emmis Interactive to Marketron ---------------------------------------------------------- Emmis Communications Corporation has announced the sale of its Emmis Interactive business unit to Marketron. The sale will allow Emmis to focus on the full commercialization of its FM Analog/HD Radio Smartphone application and Tagstation, the cloud-based engine that supplies data for the smartphone application and digital dashboards. Emmis will work with Marketron Interactive on their continued development and broadened distribution of the award-winning Digital Suite of software and services, including the BaseStation, GeoStation and Guidable brands. Emmis will continue as a core Marketron customer and retain an economic interest in Marketron's success in expanding the products and services purchased. Terms of the sale were not disclosed. The FM Analog/HD Radio Smartphone application debuted successfully at the National Association of Broadcaster (NAB) convention in April. Emmis is working closely with radio broadcasters, the National Association of Broadcasters, iBiquity Digital, wireless carriers, and wireless OEMs on the commercial launch. "We developed some great products at Emmis Interactive and we are very excited for Marketron and our team moving over to Marketron to take the platform to the next level," said Jeff Smulyan, President and CEO of Emmis Communications. "At Emmis, we will focus our remaining development efforts on Tagstation, enabling a next generation radio experience for smartphone users with enabled FM chips." Emmis SVP and Chief Technology Officer Paul Brenner is leading the Tagstation design and software development. In addition to the acquired technology, Emmis Interactive's Chicago-based executive team has been retained by Marketron. Deborah Esayian and Rey Mena will oversee the integration of Emmis Interactive's assets and operations. About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. The Company's balance sheet at May 31, 2012, showed $350.94 million in total assets, $360.51 million in total liabilities, $46.88 million in series A cumulative convertible preferred stock, and a $56.45 million total deficit. * * * Emmis carries Caa2 corporate family rating and a Caa3 probability of default rating from Moody's. In July 2011, Moody's Investors Service placed the ratings of Emmis on review for possible upgrade following the company's earnings release for 1Q12 (ended May 31, 2011) including additional disclosure related to the pending sale of controlling interests in three radio stations. The sale of the majority ownership to GCTR will generate estimated net proceeds of approximately $100 million to $120 million, after taxes, fees and related expenses. Emmis will retain a minority equity interest in the operations of the three stations and Moody's expects senior secured debt to be reduced resulting in improved credit metrics. ENTERTAINMENT PROPERTIES: Fitch Rates $125 Million Notes 'BB' ------------------------------------------------------------- Fitch Ratings assigns a 'BB' credit rating to the $125 million 6.625% series F preferred stock issued by Entertainment Properties Trust (NYSE: EPR). Net proceeds from the offering of approximately $121 million are expected to be used to redeem all of EPR's 7.38% series D preferred shares at an aggregate redemption price of approximately $115.8 million, which includes approximately $800,000 of accrued and unpaid distributions at the anticipated redemption date, and for general corporate purposes. The company's ratings are driven by the consistent cash flows generated by the company's triple-net leased megaplex movie theatres and charter schools, together with the cash flows from the company's other recreational and entertainment-based investments, which are solidly in excess of the company's fixed charges. The ratings also take into account credit concerns including idiosyncratic risks involved with charter school investments and the company's investment in asset classes that are likely less liquid and financeable during periods of financial stress. For the 12 months ended June 30, 2012, EPR's fixed-charge coverage ratio pro forma for the preferred stock offering was 2.6x compared with 2.5x and 2.3x for the years ended Dec. 31, 2011 and 2010, respectively. This coverage is solid for a 'BBB-' IDR. Fitch projects that EPR's fixed-charge coverage ratio will improve slightly over the next 12 to 24 months due primarily to the spread on new acquisitions over the cost of financing, and assuming future acquisitions are executed on a leverage-neutral basis. Fitch defines fixed-charge coverage as recurring operating EBITDA less recurring capital expenditures, non-cash interest income and straight-line rent adjustments, divided by interest incurred and preferred stock dividends. EPR has a manageable lease expiration profile. Of the company's megaplex theatre revenue, which represents 62% of total revenue, the majority of leases expire beyond 2018. Of the company's charter school leases, which represent 11% of total revenue, all leases expire after 2030. Historically, many tenants have chosen to exercise their renewal options, which has mitigated re-leasing risk and provided predictability to portfolio-level cash flows. That said, there is a risk that expiring leases might not be renewed or be renewed on less favorable terms to EPR given that a theatre's performance may have weakened during the term of the long-term lease. The company's leverage, measured as net debt-to-trailing 12 months recurring operating EBITDA was 4.8x as of June 30, 2012, up from 4.4x and 4.6x as of Dec. 31, 2011 and 2010, respectively. The small uptick is a result of EPR funding acquisitions primarily with debt over the last year. Fitch projects that EPR's leverage will be in the mid- to high-4.0x range over the next 12 to 24 months, which would remain appropriate for the 'BBB-' IDR. EPR has solid contingent liquidity from its unencumbered property pool. As of March 31, 2012, unencumbered asset coverage of net unsecured debt was 2.1x utilizing a stressed 12% capitalization rate on unencumbered net operating income (NOI) from the owned property portfolio, a ratio that is strong for a 'BBB-' IDR. The company also has over $350 million book value of unencumbered mortgage notes receivable that are currently performing. Including 75% of these unencumbered assets to reflect the cash- flowing nature of these investments would improve unencumbered asset coverage to approximately 2.6x, which would also be strong for a 'BBB-' IDR. The company has a well-laddered debt maturity profile. Aside from maturities in 2017 ($240 million unsecured term loan), 2020 ($250 million unsecured senior notes) and 2022 ($350 million unsecured senior notes), annual debt maturities do not account for more than 12% of total debt in any given year, alleviating refinance risk. Over the next five years 29% of total debt will mature, the majority of which is made up of mortgages. EPR intends to further migrate toward an unsecured funding model, and will likely use unsecured debt to repay these mortgages, broadening the unencumbered asset pool, which Fitch views as a credit positive. EPR's sources of liquidity (unrestricted cash, availability under its unsecured revolving credit facility, expected retained cash flows from operating activities after dividend payments) cover uses of liquidity (pro rata debt maturities and expected capital expenditures) by 2.9x for the period from July 1, 2012 to Dec. 31, 2014. This strong liquidity surplus is driven in large part by no debt maturities until 2014 and further reflects the relatively low capital-intensive nature of EPR's business. In addition, the covenants under EPR's credit agreements do not limit financial flexibility. As of June 30, 2012, the company was well within its covenants for the revolving credit facility, term loan and senior unsecured notes. EPR currently faces increased risk from its largest charter school tenant. Imagine Schools, Inc. Imagine is the lessee of 69% of EPR's charter schools as of June 30, 2012, and recently closed or is in the process of closing several schools because of poor academic performance. With EPR's approval, Imagine can sell, sub- lease or substitute non-performing schools with performing schools on the nine assets. Although EPR is relatively well protected by a master lease structure, currently good cash flow coverage, and a letter of credit, these closings are indicative of the idiosyncratic risks of charter school investments. The ratings also take into consideration a degree of tenant concentration. The company's two largest theatre operators collectively accounted for 43% of total revenues in the second quarter of 2012 (2Q'12), although the company has been steadily reducing its exposure to its largest tenants. Rental revenues from American Multi-Cinema, Inc. (AMC; Fitch IDR of 'B' with a Negative Outlook) accounted for 33% of total revenue and Rave Cinemas for 10% of total revenues. Imagine, EPR's largest public charter school operator, accounted for 9% of total revenue in 2Q'12. Given that most of EPR's top tenants are either unrated or have below investment-grade ratings, the potential for corporate default, bankruptcy and lease rejection could reduce EPR's rental revenues. One mitigant to this risk is that on a portfolio basis, property- level EBITDAR covers rent payments by a healthy margin for nearly all of EPR's theatre and charter school assets, indicative of solid four-wall profitability. Box office revenues have been relatively resilient over the last decade, as total box office revenues have risen or stayed flat in eight of the last 10 years, indicative of stability in operator top-line cash flows. In addition, no theatre tenant has ever missed a lease payment since EPR's formation in 1997, and no tenants on a portfolio-wide basis have EBITDAR coverage of rent below 1.0x. Further, the company has increased the diversification of its tenant base over the last several years, which Fitch views positively. The company's real estate investments are in or backed by mostly non-core property types (e.g. megaplex movie theatres, charter schools, wineries, ski areas and waterparks) and thus may be less liquid or financeable in periods of company or market stress. The demonstrated alternative use of certain of the company's assets may be limited, absent the company incurring costs to attract new non-theatre tenants, despite EPR's theatre properties typically being well-located and having high-quality amenities. The Stable Outlook reflects Fitch's expectation that leverage will stay relatively unchanged and coverage will remain above 2.5x, over the next 12 to 24 months, metrics that are appropriate for a 'BBB-' IDR. The company's unencumbered asset coverage of unsecured debt will likely decline slightly as it repays mortgages with unsecured debt but will remain appropriate for the 'BBB-' IDR. In addition, EPR has strong liquidity and good demonstrated access to capital, mitigating potential refinance risk. The two-notch differential between EPR's IDR and its preferred stock rating is consistent with Fitch's 'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis' Criteria Report dated Dec. 15, 2011, as EPR's preferred securities have cumulative coupon deferral options exercisable by EPR and thus have readily triggered loss absorption provisions in a going concern. The following factors may have a positive impact on the ratings or Outlook: -- Fitch's expectation of leverage sustaining below 4.0x (leverage was 4.8x as of June 30, 2012); -- Fitch's expectation of fixed-charge coverage sustaining above 3.0x (pro forma coverage was 2.6x for the 12 months ended June 30, 2012); -- Growth in the unencumbered portfolio, particularly in the megaplex movie theatre portfolio. The following factors may have a negative impact on the ratings or Outlook: -- Fitch's expectation of leverage sustaining above 5.5x; -- Fitch's expectation of fixed-charge coverage sustaining below 2.2x; -- A sustained liquidity coverage ratio of below 1.0x; -- A weakening in the credit quality of EPR's tenants; -- The company deviating materially from its core strategy of acquiring theatres, charter schools and other entertainment- based assets. Fitch currently rates EPR as follows: -- Issuer Default Rating (IDR) 'BBB-'; -- Unsecured revolving line of credit 'BBB-'; -- Senior unsecured term loan 'BBB-'; -- Senior unsecured notes 'BBB-'; -- Preferred stock 'BB'. The Rating Outlook is Stable. EVANS OIL: Soneet Kapila Appointed as CRO and Interim Manager ------------------------------------------------------------- The Hon. Barry S. Schermer of the U.S. Bankruptcy Court for the Middle District of Florida approved the appointment of Soneet Kapila as chief restructuring officer and interim manager for Evans Oil Company LLC. As reported in the Troubled Company Reporter on Sept. 5, 2012, the Debtor previously obtained approval to hire Mr. Kapila as facilitator, indexer of equipment and auctioneer for the Debtors. Mr. Kapila is serving as facilitator pursuant to a May 21 order entered by the bankruptcy court. The ore tenus motion to expand the duties of Soneet Kapila, made by Fifth Third Bank, will be effective as of Aug. 9, 2012; The duties of Mr. Kapila will be expanded. The Court has allowed him, to among other things: a. maintain a presence at Evans Oil Company during its regular business hours for the purpose of facilitating due diligence requested by any bidder and the sale transaction, including without limitation, Florida Petroleum Company LLC; and b. at the request of Florida Petroleum Company LLC, Mr. Kapila, and his staff, will review, prepare a detailed index of, and to the extent Mr. Kapila deems the premises of Evans Oil Company LLC and related Debtors. Representatives of Debtors and of Florida Petroleum Company LLC may observe such review. As reported in the Troubled Company Reporter on June 14, 2012, Judge Barry S. Schermer appointed Mr. Kapila as facilitator effective on May 10, 2012, for the Debtor's case. As facilitator, Mr. Kapila will freely expedite any requests for data, records, documents, information, and interviews to prospective buyers of the business of the Debtor entities consistent with the protocols. All due diligence regarding any plan of reorganization or any sale of the Debtors' assets will be facilitated by Mr. Kapila until the earlier of (1) consummation of a sale of all or substantially all of the assets, or (2) confirmation of a plan of reorganization, or (3) further order of the Court. In the event that he experiences any difficulty with the exchange of information, he will immediately contact the Court, which will issue any additional orders, as may be necessary. About Evans Oil Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC, distributes bulk oil, gas, diesel and lubricant products. Evans Oil, together with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30, 2011. Attorneys at Hahn Loeser & Parks LLP serve as bankruptcy counsel to the Debtors. Garden City Group Inc. is the claims and notice agent. The Parkland Group Inc. is the restructuring advisor. Evans Oil estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. Fifth Third Bank failed in its bid for appointment of a Chapter 11 trustee to replace management. Soneet Kapila was appointed by the bankruptcy judge as facilitator effective on May 10, 2012 for Evans Oil. All due diligence regarding any plan of reorganization or any sale of the Debtors' assets will be facilitated by Mr. Kapila until the earlier of consummation of a sale of all or substantially all of the assets, or (2) confirmation of a plan of reorganization. EVANS OIL: SS&G Parkland OK'd to Provide Restructuring Services --------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida approved Evans Oil Company LLC's amended motion to employ SS&G Parkland Consulting, LLC as successor to The Parkland Group, Inc. to provide restructuring services. As reported in the Troubled Company Reporter on Sept. 5, 2012, the Debtors also asked that the Court: i) amend the employment and retention of The Parkland Group to provide restructuring services to the Debtors, to acknowledge the continued employment and retention of the professionals by Parkland's successor, SS&G Parkland Consulting, LLC; and ii) confirm that effective July 1, 2012, all restructuring work performed for the Debtors was performed by SSGPC and not Parkland. According to the Debtors, the professionals from SSGPC will be providing exactly the same services authorized pursuant to the original application and the original retention order. SSGPC will charge the exact same rates for the professionals from SSGPC to the estate as they charged when the professionals were employed by Parkland. The only change occurring is the entity providing the services to the Debtors. More specifically, as with Parkland, SSGPC will provide these restructuring services to Debtors: a) manage, in consultation with the board the restructuring efforts of Debtors; b) assist management of cash and accounts payable; c) assist the Debtors with the collection of accounts receivable; and d) assist the Debtors in managing its assets, including both personal property and real property assets. The hourly rates of SSGPC's personnel are: Principals $325 - $395 Directors $275 - $325 Consultants $250 - $275 In connection with the prepetition retention by Debtors, Parkland received a $25,000 security retainer on Jan. 24, 2011. On Jan. 27, 2011, Parkland received a $75,000 further retainer. To the best of the Debtors' knowledge, SSGPC does not hold or represent any interest adverse to Debtors and their estates in the matters upon which it is engaged. About Evans Oil Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC, distributes bulk oil, gas, diesel and lubricant products. Evans Oil, together with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30, 2011. Attorneys at Hahn Loeser & Parks LLP serve as bankruptcy counsel to the Debtors. Garden City Group Inc. is the claims and notice agent. The Parkland Group Inc. is the restructuring advisor. Evans Oil estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. Fifth Third Bank failed in its bid for appointment of a Chapter 11 trustee to replace management. Soneet Kapila was appointed by the bankruptcy judge as facilitator effective on May 10, 2012 for Evans Oil. All due diligence regarding any plan of reorganization or any sale of the Debtors' assets will be facilitated by Mr. Kapila until the earlier of consummation of a sale of all or substantially all of the assets, or (2) confirmation of a plan of reorganization. EVANS OIL: Approved to Sell Assets Pursuant to Amended APA ---------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida granted the motion: i) vacating the Court's order dated Sept. 26, 2012; and ii) approving Amendment No. 1 to asset purchase agreement dated as of Aug. 10, 2012. Evans Oil Company LLC, et al., Florida Petroleum Company LLC, and Fifth Third Bank, in their motion, stated that on Aug. 27, the Court authorized, on a final basis, the sale of assets to FPC, the highest and best bidder. On Sept. 27, Soneet Kapila, the Court- appointed chief restructuring officer and interim manager of the Debtors, informed the bidders that no bids meeting the undisclosed reserve amount were received. Also, the parties requested to amend the APA between the Debtors and FPC to reflect the order approving the appointment of Mr. Kapila as chief restructuring officer and interim manager. The CRO order provides that the CRO will have full and final authority regarding all business and financial matters of the Debtors. The parties stated that vacating the sealed bid order will allow the sale of the selling Debtors' assets to FPC or its assignees to occur pursuant to the terms of the amended FPC purchase agreement and the sale order. The sale is expected to close, under the amended FPC APA on Oct. 1, 2012. Fifth Third had consented to the APA amendment. A copy of the order is available for free at http://bankrupt.com/misc/EVANSOIL_vacatingcourtorder_order.pdf About Evans Oil Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC, distributes bulk oil, gas, diesel and lubricant products. Evans Oil, together with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30, 2011. Attorneys at Hahn Loeser & Parks LLP serve as bankruptcy counsel to the Debtors. Garden City Group Inc. is the claims and notice agent. The Parkland Group Inc. is the restructuring advisor. Evans Oil estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. Fifth Third Bank failed in its bid for appointment of a Chapter 11 trustee to replace management. Soneet Kapila was appointed by the bankruptcy judge as facilitator effective on May 10, 2012 for Evans Oil. All due diligence regarding any plan of reorganization or any sale of the Debtors' assets will be facilitated by Mr. Kapila until the earlier of consummation of a sale of all or substantially all of the assets, or (2) confirmation of a plan of reorganization. FIRST UNION BAPTIST: Bronx Church Files Ch. 11 to Stop Foreclosure ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that First Union Baptist Church, situated on the Grand Concourse in the Tremont section of the Bronx, New York, sought bankruptcy protection to halt foreclosure set on the same day. According to the report, the lender Carver Federal Savings Bank is owed about $1.1 million, according to court papers. Carver is the largest black operated bank in the U.S., according to the bank's website. The Bloomberg report discloses that the building is worth more than $1.3 million, the church says. The not-for-profit church took on mortgage debt to repair the structure. First Union filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-14099) on Oct. 1, 2012. Vincent Cuocci, Esq., at Law Office of Vincent Cuocci, P.C., in Sayville, New York. The Debtor disclosed $1,379,600 in assets and $1,245,920 in liabilities. FLETCHER INT'L: Files Schedules of Assets and Liabilities --------------------------------------------------------- Fletcher International, Ltd., filed with the U.S. Bankruptcy Court for the Southern District of New York its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property N/A B. Personal Property $52,163,709 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $195,673 E. Creditors Holding Unsecured Priority Claims $30,256 F. Creditors Holding Unsecured Non-priority Claims $22,771,919 ----------- ----------- TOTAL $52,163,709 $22,997,818* * corrected -- $22,997,848 A copy of the schedules is available for free at http://bankrupt.com/misc/FLETCHER_INTERNATIONAL_sal.pdf About Fletcher International Fletcher International, Ltd., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-12796) on June 29, 2012, in Manhattan. The Bermuda exempted company estimated assets and debts of $10 million to $50 million. The bankruptcy documents were signed by its president and director, Floyd Saunders. David R. Hurst, Esq., at Young Conaway Stargatt & Taylor, LLP, in New York, serves as counsel. Fletcher International is managed by the investment firm of Alphonse "Buddy" Fletcher Jr. Fletcher Asset Management was founded in 1991. During its initial four years, FAM operated as a broker dealer trading various debt and equity securities and making long-term equity investments. Then, in 1995, FAM began creating and managing a family of private investment funds. The Debtor is a master fund in the Fletcher Fund structure. As a master fund, it engages in proprietary trading of various financial instruments, including complex, long-term, illiquid investments. The Debtor is directly owned by Fletcher Income Arbitrage Fund and Fletcher International Inc., which own roughly 83% and 17% of the Debtor's common shares, respectively. Arbitrage's direct parent entities are Fletcher Fixed Income Alpha Fund and FIA Leveraged Fund, both of which are incorporated in the Cayman Islands and are subject to liquidation proceedings in that jurisdiction, and which own roughly 76% and 22% of Arbitrage's common stock, respectively. The Debtor currently has a single subsidiary, The Aesop Fund Ltd. FLETCHER INT'L: Richard J. Davis Appointed as Chapter 11 Trustee ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the appointment of Richard J. Davis, Esq., as Chapter 11 trustee in the bankruptcy case of Fletcher International, Ltd. Tracy Hope Davis, U.S. Trustee for Region 2, appointed Mr. Davis as the Chapter 11 trustee of the Debtor's estate, in response to the order dated Sept. 7, directing the appointment of a trustee. To the best of the U.S. Trustee's knowledge, the Chapter 11 trustee has no connections with the Debtors, their creditors, any other parties-in-interest, their respective attorneys, the U.S. Trustee, and persons employed in the Office of the U.S. Trustee, other than those connections set forth on the declaration of disinterestedness by Mr. Davis. About Fletcher International Fletcher International, Ltd., filed a bare-bones Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-12796) on June 29, 2012, in Manhattan. The Bermuda exempted company estimated assets and debts of $10 million to $50 million. The bankruptcy documents were signed by its president and director, Floyd Saunders. David R. Hurst, Esq., at Young Conaway Stargatt & Taylor, LLP, in New York, serves as counsel. The Debtor disclosed $52,163,709 in assets and $22,997,848 in liabilities as of the Chapter 11 filing. Fletcher International Ltd. is managed by the investment firm of Alphonse "Buddy" Fletcher Jr. Fletcher Asset Management was founded in 1991. During its initial four years, FAM operated as a broker dealer trading various debt and equity securities and making long-term equity investments. Then, in 1995, FAM began creating and managing a family of private investment funds. The Debtor is a master fund in the Fletcher Fund structure. As a master fund, it engages in proprietary trading of various financial instruments, including complex, long-term, illiquid investments. The Debtor is directly owned by Fletcher Income Arbitrage Fund and Fletcher International Inc., which own roughly 83% and 17% of the Debtor's common shares, respectively. Arbitrage's direct parent entities are Fletcher Fixed Income Alpha Fund and FIA Leveraged Fund, both of which are incorporated in the Cayman Islands and are subject to liquidation proceedings in that jurisdiction, and which own roughly 76% and 22% of Arbitrage's common stock, respectively. The Debtor currently has a single subsidiary, The Aesop Fund Ltd. FLETCHER INT'L: Meeting of Creditors Continued Until Oct. 12 ------------------------------------------------------------ Tracy Hope Davis, U.S. Trustee for Region 2, continued until Oct. 12, 2012, at 2:30 p.m., the meeting of creditors in the Chapter 11 case of Fletcher International, Ltd. About Fletcher International Fletcher International, Ltd., filed a bare-bones Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-12796) on June 29, 2012, in Manhattan. The Bermuda exempted company estimated assets and debts of $10 million to $50 million. The bankruptcy documents were signed by its president and director, Floyd Saunders. David R. Hurst, Esq., at Young Conaway Stargatt & Taylor, LLP, in New York, serves as counsel. The Debtor disclosed $52,163,709 in assets and $22,997,848 in liabilities as of the Chapter 11 filing. Fletcher International Ltd. is managed by the investment firm of Alphonse "Buddy" Fletcher Jr. Fletcher Asset Management was founded in 1991. During its initial four years, FAM operated as a broker dealer trading various debt and equity securities and making long-term equity investments. Then, in 1995, FAM began creating and managing a family of private investment funds. The Debtor is a master fund in the Fletcher Fund structure. As a master fund, it engages in proprietary trading of various financial instruments, including complex, long-term, illiquid investments. The Debtor is directly owned by Fletcher Income Arbitrage Fund and Fletcher International Inc., which own roughly 83% and 17% of the Debtor's common shares, respectively. Arbitrage's direct parent entities are Fletcher Fixed Income Alpha Fund and FIA Leveraged Fund, both of which are incorporated in the Cayman Islands and are subject to liquidation proceedings in that jurisdiction, and which own roughly 76% and 22% of Arbitrage's common stock, respectively. The Debtor currently has a single subsidiary, The Aesop Fund Ltd. FRIENDSHIP DAIRIES: Files List of 20 Largest Unsecured Creditors ---------------------------------------------------------------- Friendship Dairies filed with the U.S. Bankruptcy Court for the Northern District of Texas a List of Creditors Holding 20 Largest Unsecured Claims, disclosing: Name of Creditor Amount ---------------- ------ Lone Star Milk Producers $400,000 217 Baird Lane Windthorst, TX 76389 Commodity $356,845 Specialists Company P.O. Box 802233 Kansas City, MO Tel: 64180-2233 Kent Raim $286,217 17249 Ward Cr RD Cedaredge, CO 81413 Alta Genetics $245,497 CHS $169,856 HF&C Feeds $134,826 DBS Commodities $112,954 Inveso, LLC $101,695 Link Feed Ingredients $92,795 Southland Dairy Equipment $87,221 LT Drilling Company $79,474 GEA Westfalia Surge West $75,693 Deaf Smith Electric $71,660 Johnson, Miller & Co. $64,361 Renaissance Nutrition $60,823 Kendrick oil $56,803 Lone star $54,421 ADM $49,850 Southwest Ag $43,234 Albert $35,732 About Friendship Diaries Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The Debtor estimated assets and debts of $10 million to $50 million. The Debtor operates a dairy near Hereford, Deaf Smith County, Texas. The dairy consists of 11,000 head of cattle, fixtures and equipment. The Debtor also farms 5,000 acres of land for production of various crops used in feeding for the cattle. The Debtor owes McFinney Agri-Finance, LLC, $16 million secured by the Debtor's property, which is appraised at more than $24 million. Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett White, P.C. serves as the Debtor's counsel. The petition was signed by Patrick Van Adrichem, partner. FTMI REAL ESTATE: Fla. Assisted-Living Home Sold for $17-Mil. ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Lenox on the Lake assisted living facility in Lauderhill, Florida, will be sold for $17.15 million to GCK Holdings LLC. According to the report, the owner and operator of the facility filed before the Chapter 11 filing signed a contract to sell the facility to another purchaser for $13 million. There were four bidders at the auction this month, where the price rose 32%. The bankruptcy judge formally approved the sale to GCK on Oct. 4. The facility owner is represented in the case by Thomas L. Abrams, Esq., at Gamberg & Abrams, in Ft. Lauderdale, Fla., as bankruptcy counsel. Gamberg was engaged by the Debtors in January 2012 and in connection therewith received payment of $28,000, which has been utilized to compensate the firm for prepetition services relating to the asset purchase agreement with the stalking horse bidder and legal representation leading up to the bankruptcy case. When the bankruptcy petitions were filed, there was an outstanding balance of roughly $5,000, which was waived by Gamberg. The hourly rates for the attorneys at Gamberg range from $350 to $450 per hour. The hourly rate of Thomas L. Abrams, Esq., and Jay Gamberg, Esq., the attorneys who will be principally working on the cases, are $450, but are reduced to $400 in the case. About FTMI Real Estate FTMI Real Estate LLC and FTMI Operator LLC sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 12-29214) in Fort Lauderdale on Aug. 10, 2012. FTMI Operator, which operates a health care business The Lenox on The Lake, disclosed just $112,000 in assets and $31.98 million in liabilities. The LENOX -- http://www.thelenox.com-- is South Florida's, newest state-of-the-art Assisted Living and Memory Care community, which has a serene lakeside setting and wonderful waterfront vistas. FTMI Real Estate, a single asset real estate under 11 U.S.C. Sec. 101(51B), scheduled $19.64 million in assets and $28.93 million in liabilities. The Debtor owns The Lenox on The Lake facilities at 6700 Commercial Boulevard, in Lauderhill, Florida valued at $13 million. The Secretary of Housing Urban Development has a $25.87 million claim secured by the property. GEOKINETICS INC: Holders Approve Director Exculpation Provision --------------------------------------------------------------- The requisite holders of each of the Series C-1 Senior Preferred Stock and Series D Junior Preferred Stock of Geokinetics, Inc., consented to the adoption of an amendment to the Company's Certificate of Incorporation to add a director exculpation provision by written consent in accordance with Section 228 of the General Corporation Law of the State of Delaware. The Amendment was previously approved by the holders of each of the Common Stock and the Series B-1 Senior Convertible Preferred Stock of the Company at the 2012 Annual Meeting of Stockholders. A copy of the Certificate of Amendment is available at http://is.gd/nuIpAP About Geokinetics Headquartered in Houston, Texas, Geokinetics Inc., a Delaware corporation founded in 1980, is provides seismic data acquisition, processing and integrated reservoir geosciences services, and land, transition zone and shallow water OBC environment geophysical services. These geophysical services include acquisition of 2D, 3D, time-lapse 4D and multi-component seismic data surveys, data processing and integrated reservoir geosciences services for customers in the oil and natural gas industry, which include national oil companies, major international oil companies and independent oil and gas exploration and production companies worldwide. The Company's balance sheet at June 30, 2012, showed $410.85 million in total assets, $580.10 million in total liabilities, $88.19 million of Series B-1 Senior Convertible Preferred Stock, and a stockholders' deficit of $257.44 million. * * * In the Oct. 5, 2011, edition of the TCR, Moody's Investors Service downgraded Geokinetics Holdings, Inc.'s (Geokinetics) Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Caa2 from B3. "The downgrade to Caa2 is driven by Geokinetics' lower than expected margins in its international markets, constrained liquidity and weak leverage metrics," commented Andrew Brooks, Moody's Vice-President. "The negative outlook highlights the company's continuing tight liquidity and weak financial metrics even in an improved oil and gas operating environment." As reported by the TCR on Oct. 3, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured ratings on Geokinetics Holdings Inc. (Geokinetics) to 'CCC+' from 'B-'. The rating action reflects uncertainty surrounding the costs, damage to reputation, and effect on operations following a liftboat accident in the Southern Gulf of Mexico that led to four fatalities, including two Geokinetics employees and two subcontractors. GLOBAL AVIATION: Wins OK to Amend CBA With Pilots ------------------------------------------------- The Hon. Carla E. Craig of the U.S. Bankruptcy Court for the Eastern District of New York authorized North American Airlines, Inc., et al., to enter into and make certain amendments to its collective bargaining agreement with the Air Line Pilots Association. GSO Capital reserves all rights with respect to any attempt by the Debtors to assume any agreement, including the CBA. The Court also ordered that, among other things, if the Debtors fail to confirm a plan of reorganization, the modifications to the CBA that are approved in the order will be null and void, the applicable CBA "snaps back" to the terms and conditions that preceded entry of the order, and the respective unions will be entitled to an administrative claim for the savings provided to the Debtors in the interim. As reported in the Troubled Company Reporter on Sept. 28, 2012, BankruptcyData.com reported that North American Airlines filed with the Court a motion for authority to enter into amendments to its collective bargaining agreement with the Air Line Pilots Association. The Debtors asserted, "The Agreement is the final piece in the Debtors' labor puzzle. It provides savings consistent with the Debtors' business plan and the Debtors' obligations to the other union groups who agreed to concessions, and extends the CBA, as modified, for five years, which will provide North American with substantial stability as a reorganized entity. The Agreement is a fair and appropriate resolution of what would otherwise be hotly contested proceedings under section 1113 of the Bankruptcy Code, and is well within North American's business judgment." 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. GLOBAL AVIATION: Has Until Dec. 31 to Propose Chapter 11 Case ------------------------------------------------------------- The Hon. Carla E. Craig of the U.S. Bankruptcy Court for the Eastern District of New York extended Global Aviation Holdings Inc., et al.'s exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Dec. 31, 2012, and March 1, 2013, respectively. 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. GLOBAL BANK: S&P Retains 'BB+/B' Foreign Currency Ratings --------------------------------------------------------- Standard & Poor's Ratings Services has assigned its 'BBB-' rating to Global Bank Corp.'s $200 million structured covered bonds series 2012-1 under its new $500 million covered bond program. The outlook is stable. This is the first issuance from this program, which will be Global Bank Corp. y Subsidiarias' (Global Bank's) primary mortgage covered bond issuance platform. Further issuances could be made under this program. "The covered bonds issued under the new program represent the issuer's direct unconditional and unsubordinated obligations and rank pari passu among themselves. The covered bonds are backed by a cover pool of residential mortgages denominated in U.S. dollars and located in Panama; the covered bondholders have a priority claim on these assets. The program will have a separate cover pool that will be transferred to a guaranty trust in HSBC Investment Corp., a subsidiary of HSBC Bank (Panama) S.A. (BBB/Stable/A-2)," S&P said. The rating reflects S&P's view of: The first recourse to Global Bank (BB+/Stable/B foreign currency rating). The second recourse to a portfolio of mortgages transferred to a guarantee trust, and the credit quality of the portfolio, which can withstand stressed credit risk during a pass-through scenario (i.e., without considering the covered bonds' maturity date). The initial overcollateralization of 17.4% (one minus the amount of the liabilities divided by the amount of the assets). The two-month reserve account to cover any potential interest shortfalls. The fact that 46% of the portfolio benefits from an interest rate subsidy from the government Panama (BBB/Stable/A-2) during the first 15 years after the loan's origination. The transaction's legal structure, which contemplates a true sale of the mortgage loans from Global Bank to the guarantee trust, effectively isolating the mortgage portfolio from the issuer's assets in case of default. "Our BBB/Stable/A-2 rating on HSBC Bank (Panama) S.A., the account bank," S&P said. "In our stress scenario, we assume that Global Bank becomes insolvent and the covered bond transaction has to instead rely on the cover pool assets for repayment, including the possible sale of the portfolio of mortgages to meet scheduled debt service. At the assigned rating, we expect that the credit support will be sufficient to withstand losses of approximately 14.8% (assuming a foreclosure frequency of 28% and loss severity of 53%). In this case, the securities may default if the sale of the collateral is insufficient to pay the securities on time. However, the assigned rating is one notch higher than the issuer credit rating on Global Bank, which reflects our view that credit support should be sufficient to cover credit losses under a stress scenario consistent with the assigned rating. This approach is consistent with the corporate recovery criteria, which indicate that a one- notch uplift above the issuer credit rating would apply when recovery prospects are more than 70%. Our stable outlook on the covered bonds transaction reflects our stable outlook on Global Bank," S&P said. STANDARD & POOR'S 17G-7 DISCLOSURE REPORT SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security as defined in the Rule, to include a description of the representations, warranties and enforcement mechanisms available to investors and a description of how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. The Standard & Poor's 17g-7 Disclosure Report included in this credit rating report is available at: http://standardandpoorsdisclosure-17g7.com/1111569.pdf GRAYMARK HEALTHCARE: Amends Membership Purchase Pact with FHA ------------------------------------------------------------- Graymark Healthcare, Inc., and its wholly-owned subsidiary, TSH Acquisition, LLC, entered into an amendment to the Membership Interest Purchase Agreement, dated as of Aug. 13, 2012, with Foundation Healthcare Affiliates, LLC. Pursuant to the Amendment, a party may terminate the agreement if the closing of the acquisition does not occur on or before Oct. 31, 2012, and an additional closing condition was added requiring FHA to obtain the consent of the holder of preferred interests in certain subsidiaries of FHA prior to the closing of the acquisition. A copy of the Amendment is available at http://is.gd/qNrLD3 About Graymark Healthcare Graymark Healthcre, Inc., headquartered in Oklahoma City, Okla., provides care management solutions to the sleep disorder market. As of June 30, 2012, the Company operated 107 sleep diagnostic and therapy centers in 10 states. The Company's balance sheet at June 30, 2012, showed $20.8 million in total assets, $23.2 million in total liabilities, and a stockholders' deficit of $2.4 million. Going Concern Doubt As of June 30, 2012, the Company had an accumulated deficit of approximately $42.3 million and reported a net loss of approximately $7.2 million for the six months then ending. In addition, the Company used approximately $2.4 million in cash from operating activities from continuing operations during the six months ending June 30, 2012. Historically, management has been able to raise the capital necessary to fund the operation and growth of the Company, but the Company can give no assurance that it will be successful in raising the necessary capital to fund the Company's operations. During the three months ended June 30, 2012, the Company did not maintain the minimum cash balance required under the Company's loan agreement with Arvest Bank. In addition, the Company did not make the required principal and interest prepayment due to Arvest Bank on June 30, 2012. Furthermore, the Company is not currently in compliance with the minimum bid price requirement for continued listing on The NASDAQ Capital Market. Under a notice received from NASDAQ, the Company had until June 18, 2012, to regain compliance. The Company received a notice of delisting on June 19, 2012. The Company filed an appeal and went before a hearing with NASDAQ on July 26, 2012. If the Company is delisted from NASDAQ, that will be an event of default under the Company's loan agreement with Arvest Bank. Historically, the Company has been successful in obtaining default waivers from Arvest Bank, but there is no assurance that Arvest Bank will waive any future defaults. Given that the Company is not in compliance with certain covenants under the loan agreement with Arvest Bank, the associated debt has been classified as current on the accompanying consolidated condensed balance sheets. "These uncertainties raise substantial doubt regarding the Company's ability to continue as a going concern," the Company said in its quarterly report for the period ended June 30, 2012. "The consolidated condensed financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern." HILEX POLY: Moody's Affirms 'B3' Corp. Family Rating ---------------------------------------------------- Moody's Investors Service revised the ratings outlook of Hilex Poly Co LLC to stable from negative and affirmed the B3 Corporate Family and Probability of Default Ratings. Moody's also affirmed the B3 rating on the senior secured term loan. Moody's took the following actions: - Revised ratings outlook to stable from negative - Affirmed B3 Corporate Family Rating - Affirmed B3 Probability of Default Rating - Affirmed B3 (LGD 4-58%) on $135 million Senior Secured Term Loan Due 2015 (approximately $107 million outstanding) The revision of the ratings outlook to stable from negative reflects improved operating performance and liquidity including more headroom under financial covenants. The stable ratings outlook reflects expectations of limited operating margin improvement amid the still challenging economic environment and adequate liquidity. Rating Rationale The B3 Corporate Family Rating reflects the narrow operating margins for the rating category, largely commoditized product line, fragmented industry, and high customer concentration. Approximately 94% of the company's sales are plastic t-shirt bags. The top 10 customers generate approximately 60% of revenue and Wal-Mart is the largest customer. The rating is also constrained by the company's small size, lack of pricing power and short history of operating improvements. Strengths in the company's profile include low leverage, leading position in the industry and long-standing customer relationships with well-established companies. Between 70%-75% of Hilex's sales stem from food and drug retailers. The company also benefits from completed restructuring and cost-cutting initiatives, contract structures with raw material cost pass-through provisions, and anti-dumping tariffs on Asian imports. Approximately 85% of the company's volume has monthly pass-throughs for resin, while the rest has quarterly pass-throughs. Hilex also owns a recycling plant which helps source recycled material and reduces the cost of that material to the company. The ratings could be downgraded if there is a deterioration in the operating and competitive environment such that FCF to Debt falls below 3%, the EBIT margin fails to improve above 3.5%, EBIT/Interest fails to improve above 1 time, and/or Debt to EBITDA increases above 6.5 times. Ratings could also be downgraded if there is a deterioration in the liqudity profile including the cushion under financial covenants. A significant debt financed acquisition or another dividend recapitalization could also result in a downgrade. The ratings could be upgraded if the EBIT margin increases to the high single digits, EBIT to Gross Interest Expense increases above 1.3 times and Debt to EBITDA remains below 5.7 times. An upgrade would also be contingent upon the maintenance of adequate liquidity and stability in the operating and competitive environment. The principal methodology used in rating Hilex was the Global Packaging Manufacturers: Metal, Glass, and Plastic Containers Industry Methodology published in June 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. HOMELAND SECURITY: Trevor Stoffer Named to Board of Directors ------------------------------------------------------------- The board of directors of Timios National Corporation, formerly known as Homeland Security Capital Corporation, appointed Trevor Stoffer to serve as a director of the Company. Mr. Stoffer is currently the President and Chief Executive Officer of Timios, Inc., a wholly-owned, indirect subsidiary of the Company. There are no arrangements or understandings between Mr. Stoffer and any other person pursuant to which Mr. Stoffer was appointed as a director, other than a Voting Agreement, dated Aug. 28, 2012, pursuant to which Thomas McMillen, the President, Chief Executive Officer and a director of the Company, and Mr. Stoffer agree to vote all of their securities in favor of electing themselves as members of the Company's Board in accordance with the terms thereof. Mr. Stoffer has not previously held any positions with the Company and has no family relations with any directors or executive officers of the Company. Mr. Stoffer will be reimbursed for reasonable expenses incurred in connection with his service on the Board. About Homeland Security Homeland Security Capital Corporation is an international provider of specialized technology-based radiological, nuclear, environmental disaster relief and electronic security solutions to government and commercial customers. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Coulter & Justus, P.C., in Knoxville, Tennessee, noted that Related Party Senior Notes Payable totalling $5.55 million are due and payable. As of Dec. 31, 2011, the Company has a net capital deficiency in addition to a working capital deficiency, which raises substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $3.98 million on $0 of net revenue for the year ended June 30, 2011. The Company's balance sheet at June 30, 2012, showed $9.03 million in total assets, $11.82 million in total liabilities, $169,768 in warrants payable, and a $2.96 million total stockholders' deficit. HBB REAL ESTATE: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: HBB Real Estate Holdings, LLC 1498 NW 54 St. Miami, FL 33130 Bankruptcy Case No.: 12-33879 Chapter 11 Petition Date: October 4, 2012 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Kishasha B. Sharp, Esq. K.B. SHARP PA 20801 Biscayne Blvd # 403 Aventura, FL 33180 Tel: (786) 923-5992 E-mail: kbsharppa@gmail.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Harry Norton, managing member. HRK HOLDINGS: Has Until Nov. 1 to Propose Chapter 11 Plan --------------------------------------------------------- The Hon. K. Rodney May of the U.S. Bankruptcy Court for the Middle District of Florida extended HRK Holdings, LLC, and HRK Industries, LLC's exclusive periods to propose a chapter 11 plan until Nov. 1, 2012. The Debtors said in Court papers, that they have several projects that require immediate attention, including but not limited to: (a) completing due diligence items in order to close on a sale of 32 acres of property to Air Products by Oct. 31, 2012; (b) working with newly engaged investment brokers to market additional property for sale; (c) working with Regions Bank to obtain approval of the DIP financing; (d) working with the Florida Department of Environmental Regulation to ensure the environmental integrity of the site and to determine the appropriate use of DIP financing for required environmental site work; and (e) working with newly engaged trial counsel related to Litigation styled and numbered HRK Holdings, LLC v. Ardaman & Associates, Inc., et al., Case No. 2012-CA-3631 pending in the Circuit Court for Manatee County, Florida. The Debtors requested an extension to allow them the time necessary to focus on the Projects. The Debtors said their attention to the Projects at this stage in the cases is beneficial to the estates by increasing income and stability the Debtors' operations. About HRK Holdings Based in Palmetto, Florida, HRK Holdings LLC owns roughly 675 contiguous acres of real property in Manatee County, Florida. Roughly 350 acres of the property accommodates a phosphogypsum stack system, called Gypstaks, a portion of which was used as an alternate disposal area for the management of dredge materials pursuant to a contract with Port Manatee and as authorized under an administrative agreement with the Florida Department of Environmental Protection. The remaining acres of usable land are either leased to various tenants or available for sale. HRK Industries holds various contracts and leases associated with the Debtors' property. HRK Holdings and HRK Industries LLC filed for Chapter 11 protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on June 27, 2012. Judge K. Rodney May oversees the case. Barbara A. Hart, Esq., at Stichter, Riedel, Blain & Prosser, P.A., represents the Debtors. HRK Holdings disclosed $33,366,529 in assets and $26,092,559 in liabilities in its revised schedules. According to the Debtors, the bankruptcy filing was necessitated by the immediate need to sell a portion of the remaining property to create liquidity for (a) funding the urgent management of the site-related environmental concerns; the benefit of creditors; funding a litigation filed by the Debtors; and funding of expenses related to additional sales of the remaining property. IRVINE SENSORS: Extends Forbearance with PFG Until Oct. 31 ---------------------------------------------------------- ISC8 Inc., formerly known as Irvine Sensors Corporation, and Partners for Growth III, L.P., have extended their forbearance agreement until Oct. 31, 2012. In December 2011, ISC8 entered into a Loan and Security Agreement with PFG pursuant to which the Company obtained a two-year, $5,000,000 revolving credit facility from PFG. As of July 31, 2012, the Company was not in compliance with the financial covenants in the Loan Agreement. On Aug. 21, 2012, the Company and PFG entered into a Forbearance, Limited Waiver and Consent under Loan and Security Agreement by which, subject to certain terms and conditions, PFG waived that default and consented to other actions taken or to be taken by the Company, including the Transaction, and the Company agreed to pay to PFG a $30,000 fee and issue to PFG the Future Warrant. The Waiver, by its terms, expired on Sept. 30, 2012. As of Sept. 28, 2012, in light of the Company's continuing non- compliance with the financial covenants in the Loan Agreement and the pending closing of the proposed Transaction, the Company and PFG entered into an Extension of Forbearance Under Loan and Security Agreement. Securities Issuances ISC8 Inc. has issued and may in the future issue up to $11,020,800 in aggregate principal amount of 12% Subordinated Secured Convertible Notes due 2015, pursuant to that certain Securities Purchase Agreement, dated as of Dec. 23, 2010, among the Company and the initial holders of those notes. The Company has issued $4,000,000 in aggregate principal amount of 12% Senior Subordinated Promissory Notes due 2013. The Company's obligations under the Promissory Notes are secured by liens on substantially all of its assets pursuant to that certain Security Agreement, dated as of Dec. 23, 2010, between the Company and the Holder Representative. Effective as of Sept. 28, 2012, and Oct. 3, 2012, respectively, the Company issued and sold to The Griffin Fund LP, a major stockholder and debt holder of the Company, Senior Subordinated Secured Convertible Promissory Notes due Nov. 30, 2012, in the aggregate principal amount of $1,200,000 and $300,000, respectively. The Notes are each of an issue of Senior Subordinated Secured Convertible Promissory Notes, in an aggregate principal amount of up to $10,000,000, that the Company may issue to The Griffin Fund LP or its affiliates and certain other investors. On July 13, 2012, the Company issued an aggregate of 4,458,000 shares of Common Stock to 26 accredited investors pursuant to the Company's election, according to the terms and conditions of those certain 12% Subordinated Secured Convertible Notes issued by the Company to those investors on various dates between Dec. 23, 2010, and July 19, 2011. These shares were issued in lieu of cash in order to pay the interest accrued on the 12% Notes for the fiscal quarter ended July 1, 2012. A detailed copy of the Form 8-K is available for free at: http://is.gd/j4UP7f About Irvine Sensors Headquartered in Costa Mesa, Calif., Irvine Sensors Corporation (OTC BB: IRSN) -- http://www.irvine-sensors.com/-- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating said products. Irvine Sensors also conducts research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. The Company reported a net loss of $15.76 million on $14.09 million of total revenues for the fiscal year ended Oct. 2, 2011, compared with a net loss of $11.15 million on $11.71 million of total revenues for the fiscal year ended Oct. 3, 2010. The Company's balance sheet at July 1, 2012, showed $8.87 million in total assets, $36.99 million in total liabilities, and a $28.12 million total stockholders' deficit. ISTAR FINANCIAL: Moody's Assigns 'B1' Senior Secured Debt Rating ---------------------------------------------------------------- Moody's Investors Service assigned a B1 senior secured rating to iStar's October 2012 senior secured facility. Moody's simultaneously upgraded iStar's March 2012 senior secured facility Tranche A-1 rating to Ba3 from B1, the March 2012 Tranche A-2 rating to B1 from B2, the corporate family rating to B2 from B3, and senior unsecured debt to B3 from Caa1. These rating actions follow the announcement that iStar plans to raise $1.8 billion in a new senior secured credit facility which will refinance the 2011 senior secured credit facility. As a result, the 2011 senior secured credit facility ratings were withdrawn. The rating outlook is stable. Rating Rationale On September 28, 2012, iStar announced that it launched a new $1.8 billion senior secured credit agreement The proceeds from new facility will refinance the 2011 senior secured credit facility Tranche A-1 and Tranche A-2 which are scheduled to mature in 2013 and 2014, respectively. The new facility is expected to have a five year term and be collateralized 1.25X by substantially the same collateral pool as in the 2011 facility. The current ratings reflect the REIT's success in extending near term debt maturities and improving fundamentals in commercial real estate. The ratings on the October 2012 senior secured credit facility takes into account the asset coverage, the size and quality of the collateral pool, and the term of facility. The stable rating outlook reflects the gradual stabilization of iStar's portfolio, SFI's strengthening liquidity, and management's demonstrated ability to manage its liquidity. Positive rating momentum would depend on fixed charge coverage of over 1.1X (on a sustained basis) resulting from earnings growth, stronger near-term (2 years) liquidity coverage, continued resolutions of its non-performing assets, and the re-establishment of its lending platform. In addition, Moody's would expect leverage levels to be commensurate with iStar's asset profile and quality. Negative rating pressure could result should the REIT fail to achieve resolutions of its non-performing assets at or above the current carrying value and fixed charge coverage remaining below 1.0X. Any liquidity challenges or covenant breaches could lead to a downgrade. The following ratings were assigned with a stable outlook: iStar Financial Inc. -- October 2012 senior secured credit facility at B1 The following ratings were upgraded with a stable outlook: iStar Financial, Inc. -- March 2012 senior secured credit facility Tranche A-1 to Ba3 from B1 and Tranche A-2 to B1 from B2; corporate family rating to B2 from B3; senior unsecured debt to B3 from Caa1; senior debt shelf to (P) B3 from (P)Caa1; subordinated debt shelf to (P) Caa2 from (P)Caa3; preferred stock to Caa2 from Caa3; and preferred stock shelf to (P) Caa2 from (P)Caa3. The following ratings were withdrawn: iStar Financial Inc -- 2011 senior secured credit facility Tranche A-1 at B1 and Tranche A-2 at B2. Moody's last rating action with respect to iStar Financial Inc. was on March 9, 2012 when Moody's assigned B1 to its March 2012 senior secured credit facility Tranche A-1 and B2 to Tranche A-2, and affirmed SFI's 2011 senior secured Tranche A-1 at B1 and Tranche A-2 at B2, SFI's corporate family rating at B3, and SFI's senior unsecured ratings at Caa1 and preferred ratings at Caa3. iStar Financial's ratings were assigned by evaluating factors Moody's believes are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of iStar's core industry and the company's ratings are believed to be comparable to those of other issuers of similar credit risk. iStar Financial Inc. is a property finance company that elects REIT status. iStar provides custom-tailored investment capital to high-end private and corporate owners of real estate and invests directly across a range of real estate sectors. iStar Financial is headquartered in New York City, and had assets of $7.2 billion and common shareholders' equity of $1.5 billion as of June 30, 2012. JOHN STANTON: Chapter 7 Trustee Seeks to Recover Rounder Stock -------------------------------------------------------------- Rounder, Inc disclosed its plans to increase the number of members on its Board of Directors and to hire a new corporate President, along with other corporate management. The Company has been actively searching for parties to fill available positions since Sept. 16, 2012. An updated business plan will be prepared and once completed it will be made available for public viewing. The Company's goal is to remove all vestiges of the John Stanton era along with any affiliates and or past associates. Rounder Inc. looks forward to a new era of profit and growth. Former President and Chairman of the Board of Directors John Stanton filed a bankruptcy petition on Dec. 13, 2011 in Tampa Florida. The case was converted to a Chapter 7 liquidation on Feb. 22, 2012. The court appointed Larry Hyman as the Chapter 7 Trustee. By operation of bankruptcy law, the Chapter 7 Trustee is vested in ownership of all nonexempt property owned by John Stanton as of the bankruptcy filing date. The Trustee has taken steps to recover stock owned by John Stanton for the benefit of the bankruptcy estate and is also pursuing action to recover shares that may have been transferred to affiliates. On Oct. 3, 2012, the Bankruptcy Court held a hearing in which it granted the Trustees motion for a preliminary injunction. The injunction will enjoin the transfer of stock owned by John Stanton. United States Bankruptcy Court, Middle District of Florida, Tampa Division - Case No. 8:11-bk-22675-MGW Chapter 7. Furthermore Rounder Inc. intends to take legal action to disclaim the debt purportedly owned by Mr. Stanton's affiliated company and or companies. Action has been taken via a demand letter for the return of the shares or the money received and the value of the services given by any affiliated company or companies. KEOWEE FALLS: Approved to Sell Substantially All Assets for $17MM ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Carolina authorized Keowee Falls Investment Group, LLC to (i) sell substantially all of the assets; and (ii) assume and assign certain designated unexpired leases and executory contracts to Worthington Hyde Partners-II, L.P., pursuant to an asset purchase agreement. The Court was advised that there were no timely submitted competing bids at the Aug. 27, 2012, auction. The APA dated July 17, 2012, provides that WH will purchase the assets for a total consideration of $17,125,000, payable in $17,000,000 credit bid and $125,000 cash payment. The Debtor has entered into a stipulation resolving objections of Oconee County Tax Collector and Silver Sun Partners, LLC. About Keowee Falls Investment Group Travelers Rest, South Carolina-based Keowee Falls Investment Group, LLC, filed a Chapter 11 petition (Bankr. D. S.C. Case No. 12-01399) in Spartanburg, South Carolina, on March 2, 2012. Bankruptcy Judge John E. Waites presides over the case. R. Geoffrey Levy, Esq., at Levy Law Firm, LLC assists the Debtor in its restructuring effort. Keowee Falls estimated assets at $100 million to $500 million and debts at $10 million to $50 million. The Cliffs Communities, Inc., owns 100% of the shares. Units of The Cliffs Communities, led by The Cliffs Club & Hospitality Group, Inc., doing business as The Cliffs Golf & Country Club, along with 10 affiliates, sought Chapter 11 protection (Bankr. D. S.C. Lead Case No. 12-01220) on Feb. 28, 2012. The Cliffs has eight premier, private master-planned residential communities, each to have its own world-class golf course. Approximately 3,734 lots have been sold. There are currently 1,385 finished homes, with 63 under construction. The properties for sale are owned by non-debtor DevCo entities. The Feb. 28 Debtors operate the exclusive membership clubs for golf, tennis, wellness and social activities at The Cliffs' communities in North and South Carolina. The clubs have 2,280 members, and there are 766 resigned members with refundable deposits totaling $37 million. The Debtors do not own the golf courses -- they only own or lease all the "core amenities" for the operation of the golf courses. The Debtors disclosed, in an amended schedules, $32,671,753 in assets and $19,913,844 in liabilities as of the Chapter 11 filing. No committee of unsecured creditors has been appointed. LAKELAND DEVELOPMENT: Governmental Proofs of Claim Due Oct. 31 -------------------------------------------------------------- The judge in the bankruptcy case of Lakeland Development Company set Oct. 31, 2012, as the deadline for governmental entities to file proofs of claim against the Debtor. Santa Fe Springs, California-based Lakeland Development Company is a privately held subsidiary in a family of companies headed by Energy Merchant Corp. Lakeland owns the real property located at 12345 Lakeland Road, Santa Fe Springs, California. The real property is composed of 10 parcels totaling roughly 55 acres. Lakeland filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-25842) in Los Angeles on May 4, 2012. Judge Richard M. Neiter presides over the case. Lawrence M. Jacobson, Esq., at Glickfeld, Fields & Jacobson LLP, and The Law Offices of Richard T. Baum, Esq., serve as the Debtor's counsel. The petition was signed by Michael Egner, chief financial officer. LAKELAND DEVELOPMENT: Exclusivity Periods Extended Thru January --------------------------------------------------------------- The U.S. Bankruptcy Court extended Lakeland Development Company's exclusive period to propose a Chapter 11 plan to Jan. 8, 2013, and the period to secure acceptances of a plan to Jan. 24, 2013. A hearing will be held on Jan. 24, 2013, at 2:00 p.m., to determine whether the exclusivity period will continue until the Debtor has obtained acceptances of a Plan of Reorganization. The order pointed out that the Court received information regarding the current state of the Chapter 11 case, and evidence that the Debtor is making progress in its efforts to reorganize its affairs by obtaining approval of the assumption of its executory contracts with Ridgeline Energy Services, Inc., and its progress in resolving disputes with REP, Paladin Group and the Environmental Protection Agency of the United States of America. About Lakeland Development Santa Fe Springs, California-based Lakeland Development Company is a privately held subsidiary in a family of companies headed by Energy Merchant Corp. Lakeland owns the real property located at 12345 Lakeland Road, Santa Fe Springs, California. The real property is composed of 10 parcels totaling roughly 55 acres. Lakeland filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-25842) in Los Angeles on May 4, 2012. Judge Richard M. Neiter presides over the case. Lawrence M. Jacobson, Esq., at Glickfeld, Fields & Jacobson LLP, and The Law Offices of Richard T. Baum, Esq., serve as the Debtor's counsel. The petition was signed by Michael Egner, chief financial officer. LAKELAND DEVELOPMENT: Has Authority to Use Cash Thru January ------------------------------------------------------------ The U.S. Bankruptcy Court authorized Lakeland Development Company to use cash collateral through Jan. 24, 2013, to pay expenses during the chapter 11 proceedings. To continue to provide assurance that the cash collateral is adequately protected, the Debtor will provide 12345 Lakeland LLC: a. with verbal or telephonic status updates not less frequently than once every two weeks as requested by 12345 Lakeland; b. with a written accounting of all expenses and receipts for the immediately previous two weeks. Such reports will be due by 12:00 noon at least two days before any scheduled telephonic status updates; c. with all reports and information specified in the prepetition agreements between the Debtor and 12345 Lakeland's predecessor-in-interest which are required to be provided; d. with reasonable access to its books, records, and management personnel upon reasonable request during normal business hours; e. with copies of the Debtor's monthly bank statements within three business days after receipt by the Debtor; f. with copies of all public information related to the operations of the property, purchasers or lenders in connection with the 38 acre parcels of the Debtor's real property, and to Ridgeline; g. with copies of all documents submitted to the United States Trustee; and h. with reasonable access to such other information and documents as 12345 Lakeland may reasonably request relating to the Debtor's assets, liabilities, and operations prepetition or postpetition. A further hearing on the cash collateral motion will be continued to Jan. 24, 2013 at 2:00 p.m. in Courtroom 1645 of the case. About Lakeland Development Santa Fe Springs, California-based Lakeland Development Company is a privately held subsidiary in a family of companies headed by Energy Merchant Corp. Lakeland owns the real property located at 12345 Lakeland Road, Santa Fe Springs, California. The real property is composed of 10 parcels totaling roughly 55 acres. Lakeland filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-25842) in Los Angeles on May 4, 2012. Judge Richard M. Neiter presides over the case. Lawrence M. Jacobson, Esq., at Glickfeld, Fields & Jacobson LLP, and The Law Offices of Richard T. Baum, Esq., serve as the Debtor's counsel. The petition was signed by Michael Egner, chief financial officer. LAND O'LAKES: Moody's Assigns 'Ba1' CFR/PDR; Outlook Stable ----------------------------------------------------------- Moody's Investors Service downgraded Land O'Lakes' senior secured rating to Ba1 and assigned Corporate Family ("CFR") and Probability of Default Ratings of Ba1. The downgrade reflects, in part, Land O'Lakes' weakened credit metrics as a result of a series of debt-funded acquisitions over the last year. Accordingly, leverage has grown to approximately 4.3 times (incorporating Moody's adjustments). The downgrade also incorporates Moody's view that the cooperative's rapid series of acquisitions and increased leverage implies more aggressive financial policies on the part of management. Moody's also assigned a Speculative Grade Liquidity Rating of SGL-3 noting the expectation of adequate liquidity over the next 12 -- 18 months. RATINGS ASSIGNED: Land O'Lakes, Inc. Corporate Family Rating at Ba1 Probability of Default Rating at Ba1 Speculative Grade Liquidity Rating at SGL-3 RATINGS DOWNGRADED: Land O'Lakes, Inc. $475 million senior secured revolving credit facility expiring April 2016 to Ba1 (LGD 3, 49%) from Baa2; $150 million senior secured term loan due 2021 to Ba1 (LGD 3, 49%) from Baa2; $155 million of 6.24% senior secured notes due December 2016 to Ba1 (LGD 3, 49%) from Baa2; $85 million of 6.67% senior secured notes due December 2019 to Ba1 (LGD 3, 49%) from Baa2; $85 million of 6.77% senior secured notes due 2021 to Ba1 (LGD 3, 49%) from Baa2. Land O'Lakes Capital Trust I $191 million of 7.45% subordinated capital securities to Ba3 (LGD 6, 98%) from Ba1. Outlook revised to stable. RATINGS RATIONALE The Ba1 Corporate Family Rating reflects Land O'Lakes' relatively high leverage of 4.3 times and weak credit metrics, along with increased integration risk associated with its recent spate of acquisitions. The rating also reflects Moody's view that these actions imply that financial policies have become more aggressive over the last year. These considerations are counterbalanced by Land O'Lakes' strong brands that hold leading market positions in their respective categories, and the cooperative's high market shares in crop inputs, shell and specialty eggs, and animal feed. The ratings are constrained by the exposure to agricultural and commodity markets that result in periods of high sales and cash flow volatility, as well as the risk of increased earnings correlation among related operating segments. The stable outlook reflects Moody's expectation that, though leverage will remain elevated in the near to intermediate term, modest incremental EBITDA from recent acquisitions will provide adequate cash flow to support operations and debt service. The stable outlook also reflects that a challenging commodity pricing environment may be buffered somewhat by its feed and crop services businesses which may be slightly more insulated from commodity prices. Given Moody's expectation for modest earnings growth and minimal near term delevering, an upgrade in the near to intermediate term is unlikely. However, if Land O'Lakes is able to materially reduce financial leverage, improve the diversity and stability of its product portfolio, successfully integrate its new acquisitions, and adopt a more conservative financial posture, an upgrade could occur. Land O'Lakes' leverage has increased meaningfully over the last twelve months in an effort to fund its growth efforts. Additional debt financed acquisitions, a deterioration in operating performance, or a weakening of liquidity could contribute to a downgrade. Specifically, should Land O'Lakes be unable to reduce leverage to levels more appropriate to the Ba1 rating, including debt/EBITDA (incorporating Moody's adjustments) to below 3.5 times over the next year, ratings could be downgraded. The principal methodology used in rating Land O'Lakes was the Global Agricultural Cooperatives Industry Methodology published in August 2010. Land O'Lakes, Inc., based in Arden Hills, Minnesota, is an agricultural cooperative focusing on dairy food, animal feed, and agricultural crop inputs. Moody's-adjusted revenues, EBITDA and Debt-to-EBITDA for the twelve months ending June 30, 2012 were approximately $13.4 billion, $518 million, and 4.3 times, respectively. LDK SOLAR: LDK New Energy Has Forbearance with Lenders for 1 Year ----------------------------------------------------------------- LDK Solar Co., Ltd., said that LDK New Energy Holding Limited, its controlling shareholder, has been negotiating with its lenders with respect to the loan outstanding under a credit agreement, dated as of Sept. 26, 2011, as amended. Pursuant to the Credit Agreement LDK New Energy has pledged collateral, including ordinary shares and ADSs of LDK Solar representing approximately an aggregate of 52.9% of LDK Solar's total outstanding share capital. LDK Solar said the lenders have agreed to forbear from exercising their power of sale with regard to certain of the pledged collateral arising as a result of various prior defaults under the Credit Facility by LDK New Energy for a period of 12 months toward the end of September 2013, subject to terms and conditions in the forbearance arrangement and negotiation and finalization of the definitive documentation, including an amended and restated Credit Facility. 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 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. LEHMAN BROTHERS: Has Deal With European Unit for $38-Bil. Claims ---------------------------------------------------------------- James W. Giddens, Trustee for the liquidation of Lehman Brothers Inc. under the Securities Investor Protection Act (SIPA), and Tony Lomas, the Joint Administrator of Lehman Brothers International (Europe), disclosed that an agreement in principle has been reached to resolve all claims among their respective entities totaling $38 billion. The agreement is subject to documentation, approval by the U.S. Bankruptcy Judge, the Honorable James M. Peck, and an order of the English High Court. If approved, the agreement will allow the Trustee and the Joint Administrators to proceed with plans to allocate and distribute assets to customers and creditors. "This is a critical milestone for customers because, if approved by the Court, the agreement sets the stage for distributions that will provide for 100 percent recovery of customer property," said Trustee Giddens. "The agreement resolves tens of billions in claims from LBI's largest single customer claimant and will allow for customer and creditor distributions much sooner than if LBIE's claims involving hundreds of thousands of transactions were litigated. We will now work toward the Court approvals necessary for distributions on top of the more than $90 billion already made to customers." "The resolution of LBIE's claims relating to LBI will allow us to move the case forward materially, enabling us to focus on the client side allocation of over $7 billion of client assets," said Joint Administrator Lomas. "Our immediate priority is to finalise the methodology for distribution of our Omnibus claim recoveries to clients." "Achieving a final resolution with LBI will be the most significant step in LBIE's administration to date, and having this coincide with our first interim distribution will enable us to plan a much earlier second distribution than would otherwise be the case," added Lomas. Terms of Agreement in Principle LBIE's Omnibus customer claim against LBI of $15.1 billion will be allowed in an amount of approximately $7.5 billion (valued as of 19 September 2008) in securities and cash. This claim will be augmented by post-filing income estimated to be approximately $600 million. LBIE's House customer claim against LBI of $8.9 billion will be replaced by an allowed cash net equity customer claim of $500 million. LBI will stipulate to an LBIE general property claim in the amount of $4.0 billion, and LBI's unsecured claim against LBIE of $13.8 billion will be eliminated. LBI's Client Money claim against LBIE will be assigned to LBIE's nominee. The parties have agreed to suspend scheduled litigation activity until mid-December 2012 to allow work to proceed in finalizing of this agreement. The agreement limits the amount of the maximum recoveries that each would make into the other's estate from the claims asserted so that planning for distributions in their respective estates can continue. If a final agreement between the parties can be reached before Dec. 15, 2012, a U.S. Bankruptcy Court hearing seeking approval of the agreement can be anticipated in the first quarter of 2013. Third and Major Last Claim Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for Lehman Brother Inc., the brokerage subsidiary of Lehman Brothers Holdings Inc., reached an agreement in principle to settle the $38 billion in claims lodged by the U.K. liquidators for Lehman Brother International (Europe). The LBIE claim was the largest filed in the Lehman brokerage liquidation conducted under the Securities Investor Protection Act. According to the report, Lehman brokerage trustee James Giddens said in a statement that the settlement will enable a "100% recovery of customer property." The three largest claims against the Lehman broker now have all been settled. Last week Mr. Giddens reached settlement of the $6 billion in claims by liquidators for the Swiss affiliate. Previously, Mr. Giddens said that the claim by the reorganized parent Lehman Brothers Holdings Inc. was settled in principle. LBIE's "omnibus customer claim" of $15.1 billion will be permitted for $7.5 billion, plus $600 million in post-bankruptcy income. LBIE's $8.9 billion "house customer claim" is being replaced by a $500 million valid cash net equity customer claim. The report relates that the Lehman broker will have a $4 billion "general property claim" against LBIE, and the $13.8 billion unsecured claim will be eliminated. Assuming final documentation of the settlement is completed by December; Mr. Giddens expects the bankruptcy court in New York will consider approving the agreement during the first quarter of 2013. The settlement also must be approved by the English High Court. The three recently settled large claims were precluding Mr. Giddens from making distributions to customers beyond the more than $90 billion turned over shortly after bankruptcy in September 2008. 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 made its first payment of $22.5 billion to creditors in April and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30. LIN TELEVISION: Moody's Affirms 'B2' CFR; Rates Sr. Notes 'B3' -------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to LIN Television Corporation's proposed $290 million of Senior Notes. Proceeds from the new notes, along with $24.4 million of balance sheet cash and revolver advances will be used to fund most of the remaining $335 million due related to the purchase of New Vision Television's assets. In addition, Moody's upgraded the existing 1st lien senior secured credit facilities (includes the revolver, term loan A, and term loan B) each to Ba2 from Ba3 and the 8.375% senior notes due 2018 to B3 from Caa1. The upgrades reflect the revised mix of debt capital pro forma for the issuance of new senior notes including greater debt cushion beneath the senior secured credit facility. Moody's affirmed LIN's B2 Corporate Family Rating (CFR) and Probability of Default Rating (PDR), as well as the SGL-2 Speculative Grade Liquidity (SGL) Rating. The rating outlook remains stable. Assigned: Issuer: LIN Television Corporation New $290 million Senior Notes (mature in 8 years): Assigned B3, LGD5 -- 74% Upgraded: Issuer: LIN Television Corporation $75 million 1st lien sr secured revolver due 2016 ($34.6 million outstanding post acquisition): Upgraded to Ba2, LGD 2 -- 18% from Ba3, LGD3 -- 31% $125 million 1st lien sr secured term loan A due 2017 ($124.4 million outstanding): Upgraded to Ba2, LGD 2 -- 18% from Ba3, LGD3 -- 31% $260 million 1st lien sr secured term loan B due 2018( $256.3 million outstanding): Upgraded to Ba2, LGD 2 -- 18% from Ba3, LGD3 -- 31% $200 million of 8.375% sr notes due 2018: Upgraded to B3, LGD 5 -- 74% from Caa1, LGD5 -- 85% Affirmed: Issuer: LIN Television Corporation Corporate Family Rating: Affirmed B2 Probability of Default Rating: Affirmed B2 Speculative Grade Liquidity Rating: Affirmed SGL -- 2 Outlook Actions: Issuer: LIN Television Corporation Outlook is Stable Summary Rating Rationale LIN's B2 Corporate Family Rating (CFR) reflects high leverage with a 2-year average debt-to-EBITDA ratio of 5.5x as of June 30, 2012 pro forma for the acquisition (including Moody's standard adjustments), compared to 5.1x pre-acquisition of New Vision stations. Moody's expects LIN will utilize the majority of its free cash flow to reduce debt balances, leading to improved capacity to fund an acquisition or dissolution of the NBC JV within leverage parameters consistent with its B2 CFR. Ratings incorporate strong demand for political advertising through the first week of November expected to result in an EBITDA boost for the second half of 2012. Moody's expects 2-year average leverage ratios to fall below 5.0x by the end of 2013, absent additional acquisitions. EBITDA should decline in the mid single-digit percentage range in 2013 driven by lower total revenues, on a same store basis, due to the absence of significant political ad spending, partially offset by low single-digit growth in core ad revenues and expected increases in retransmission fees. "The company's leading market positions and good free cash flow generated by its geographically diverse portfolio of middle market broadcast television stations partially offset the negative credit impact of increased leverage to finance the New Vision acquisition, potential delays in achieving the portion of planned revenue synergies related to time sales and new media, as well as the overhang from LIN TV Corp.'s guarantee of the NBC JV debt. The company has multiple network affiliates in 18 of its expanded 23 markets leading to high revenue share and good margins," stated Carl Salas, Moody's Vice President and Senior Analyst. Ratings incorporate expectations that LIN will achieve the majority of its planned $25 million of revenue and expense synergies by the end of 2014 and that retransmission revenues through the end of 2013 will increase for existing and newly acquired stations accompanied by higher expenses related to retransmission sharing fees (or reverse compensation) paid to the networks. Exposure to cyclical advertising revenue and the ongoing risk of audience diffusion resulting from media fragmentation weigh on debt ratings. Liquidity is good with minimum 2-year average free cash flow-to- debt ratios of 5% over the rating horizon and the absence of near term maturities. The NBC JV is a significant overhang that poses elevated risk to LIN's credit profile given the expected shortfall in meeting interest payments on its $815.5 million loan from General Electric Capital Corporation ("GECC") through the first half of 2013 and given the decline in its asset value since the JV was formed in 1998. As of December 2011, the NBC JV was valued at $118 million less than amount due under the note; although significant, this value gap reflects consistent improvement compared to the estimated $254 million gap between asset value and the note amount at FYE2010 and $366 million at FYE2009. In January 2011, Comcast acquired 51% of NBCUniversal, Inc. with GE owning the remaining 49%. Additionally, LIN TV Corp. and GE agreed to fund interest coverage shortfalls with loans based on LIN's ownership interests (LIN 20% / GE 80%). Ratings hinge on Moody's expectation that LIN will utilize free cash flow to reduce debt and leverage to increase its capacity to finance an acquisition or other dissolution of the NBC JV, particularly if it occurs prior to the 2023 GECC loan maturity. Under most scenarios, an acquisition or dissolution of the NBC JV would be leveraging to LIN. The company's capacity to fund a transaction without exceeding leverage metrics expected in the B2 CFR (as would be the case if a transaction occurred in the near term) increases the longer it can forestall such an event, and could be reached by 2014 or 2015 assuming free cash flow continues to be applied to reduce debt balances. The stable rating outlook reflects Moody's expectation that LIN will track Moody's base case forecast with core revenues growing in the low single digit percentage range resulting in 2-year average debt-to-EBITDA ratios (includes political and non- political years) remaining below 5.75x over the rating horizon and good liquidity including continued capacity to fund unexpected debt service shortfalls of the NBC JV. The outlook does not include significant increases in debt balances to fund additional acquisitions resulting in elevated debt-to-EBITDA ratios. Ratings could be downgraded if an advertising downturn, cash distributions to shareholders, additional debt financed acquisitions, or the dissolution of the NBC JV results in 2-year average debt-to-EBITDA ratios being sustained above 6.0x (including Moody's standard adjustments) over the next 12 to 18 months. Beyond 12 to 18 months, debt-to-EBITDA ratios would need to be reduced sufficiently below FYE2012 levels to maintain a B2 CFR and to position the company for a refinancing of near term maturities while providing financial flexibility to resolve NBC JV obligations. Deterioration in liquidity including diminished capacity to cover debt service shortfalls at the NBC JV (that increases near term risk of dissolution of the JV) or other cash requirements could also result in a downgrade. An upgrade is not likely until there is a clear path to resolution of the overhang related to the NBC JV. LIN Television Corporation is headquartered in Providence, RI, and upon closing of the acquisition of the assets of New Vision Television ("New Vision"), LIN will own or operate 50 television stations in 23 mid-sized U.S. markets ranked #22 to #188 reaching 10.6% of U.S. television households. In addition, LIN TV Corp., the company's parent, owns 20% of KXAS-TV in Dallas, TX and KNSD- TV in San Diego, CA, through a joint venture with NBCUniversal Media, LLC ("NBC JV"). HM Capital Partners LLC ("HMC") holds an approximate 42% economic interest in LIN and approximately 70% of voting control is held by HMC and Mr. Royal Carson III, a LIN director and advisor for HMC. Pro forma for the pending acquisition of New Vision and excluding NBC JV revenue, which is accounted for under the equity method, the company generated approximately $558 million of net revenues through LTM June 30, 2012. The principal methodology used in rating LIN Television Corporation was the Global Broadcast and Advertising Related Industries 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. LOUISIANA RIVERBOAT: Files List of 20 Largest Unsecured Creditors ----------------------------------------------------------------- Louisiana Riverboat Gaming Partnership filed with the U.S. Bankruptcy Court for the Western District of Louisiana a consolidated list of creditors holding 20 largest unsecured claims, disclosing: Name of Creditor Nature of Claim Amount --------------- --------------- ------ Aristocrat Technologies, Inc. Slot Machines $111,825 AT&T $22,753 Bally Gaming Inc. $90,583 Bally Technologies Slot Machines $241,913 Bossier City-Parish Sales & Unsecured Priority Use Tax Division Payment $103,922 Bossier Education Excellence Fund Gaming Taxes $34,270 Bossier Parish Policy Jury Gaming Taxes $38,554 Entergy $52,613 Franklin Press $25,003 FSS-The Service Companies $81,291 Global Payments $27,993 IGT $55,150 International Gaming Technology Slot Machines $444,817 9295 Prototype Drive Reno, NV 89521 Reinhart Food Service $59,425 Southeast Cleaning $83,927 Swepco/American Electric Power $140,064 Sysco $29,953 The Lamar Corporation $21,565 Warren County Tax Assessor Property Taxes $562,709 1009 Cherry St. Vicksburg, MS 39180 WMS Gaming $23,591 About Legends Gaming Legends Gaming LLC, owns gaming facilities located in Bossier City, Louisiana, and Vicksburg, Mississippi, operating under the DiamondJack's trade name. Legends Gaming LLC, and five related entities, including Louisiana Riverboat Gaming Partnership, filed Chapter 11 petitions (Bankr. W.D. La. Case No. 12-12013) in Shreveport, Indiana, on July 31, 2012, to sell the business for $125 million to Global Gaming Solutions LLC, absent higher and better offers. Legends Gaming acquired the business from Isle of Capri Casinos Inc., in 2006 for $240 million. After breaching covenant with lenders, the Debtors in March 2008 sought Chapter 11 protection, jointly administered under Louisiana Gaming Partnership (Case No. 08-10824). The Debtors emerged from bankruptcy in September 2009 and retained ownership and operation of two "DiamondJacks" hotels and casinos in Bossier City and Vicksburg. The Plan restructured $162.1 million owed to the first lien lenders and $75 million owed to secured lien lenders, which would be paid in full, with interest, over time. The Debtors' properties comprise 60,000 square feet of gaming space with 1,913 slot machines, 48 table games and 693 hotel rooms. Revenues in fiscal 2011 were $99.8 million in Louisiana and $39.7 million in Mississippi. As of July 31, 2012, first lien lenders are owed $181.2 million and second lien lenders are owed $114.7 million. Louisiana Riverboat Gaming Partnership disclosed $104,846,159 in assets and $298,298,911 in liabilities as of the Chapter 11 filing. Attorneys at Heller, Draper, Hayden Patrick & Horn serve as counsel to the Debtors. Sea Port Group Securities, LLC is the financial advisor. Kurtzman Carson Consultants LLC as is the claims and notice agent. The Debtors have tapped Jenner & Block LLP as special counsel. The Court authorized the Debtors to sell their assets at an Oct. 15, auction. MACCO PROPERTIES: Plan Outline Hearing Set for Nov. 14 ------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Oklahoma will convene a hearing on Nov. 14, 2012, at 10 a.m., to consider adequacy of the Fourth Disclosure Statement explaining the proposed Fourth Amended Plan of Reorganization for Macco Properties, Inc., et al. Objections, if any, are due Oct. 19, at 5 p.m. According to the Disclosure Statement proposed by sole shareholder Jennifer Price on Sept. 21, 2012, the Plan provides for (i) payment in full, with the applicable interest, of all administrative expense claims and tax claims; (ii) payment in full, with interest, of all non-guaranty or indemnification claims against the Debtor; (iii) payment in full, implementation of agreed treatment, or waiver of discharge with respect to guaranty and indemnification claims; and (iv) retention of equity interest by the holder thereof. The Plan further provides that the property of the Debtor's estate will re-vest in the Reorganized Debtor. The re-vested property, plus draws, as necessary, under committed lines/letters of credit providing supplemental liquidity of $9.25 million, will be used to satisfy all claims entitled to present payment under the Plan and any ongoing obligations of the Reorganized Debtor. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/MACCO_PROPERTIES_ds_4amended.pdf About Macco Properties Oklahoma City, Oklahoma-based Macco Properties, Inc., is a property management company that is the sole or controlling member and/or manager of numerous multi-family residential rental units in Oklahoma City, Oklahoma, Wichita, Kansas, and Dallas, Texas, and several and commercial business properties in Oklahoma City, Oklahoma, and Holbrook, Arizona. The Company filed for Chapter 11 bankruptcy protection (Bankr. W.D. Okla. Case No. 10-16682) on Nov. 2, 2010. The Debtor disclosed $50,823,581 in total assets, and $4,323,034 in total liabilities. Receivership Services Corp., a division of the Martens Cos., serves as property manager for the six Wichita apartment complexes caught up in the bankruptcy of Macco Properties of Oklahoma City. Michael E. Deeba, the Chapter 11 trustee, is represented by Christopher T. Stein, of counsel to the firm of Bellingham & Loyd, P.C. Grubb & Ellis/Martens Commercial Group LLC, to act as the Chapter 11 Trustee's exclusive listing broker/realtor for properties. The trustee wants to real estate holdings wants to sell some of the property off, including a luxury high-rise condominium in Dallas valued at more than $2.5 million and several run-down apartment complexes in the metro area. The Official Unsecured Creditors' Committee is represented by Ruston C. Welch, at Welch Law Firm, P.C., in Oklahoma City, Oklahoma. MANITOWOC CO: Moody's Affirms 'B2' CFR; Rates Senior Notes 'B3' --------------------------------------------------------------- Moody's Investors Service affirmed Manitowoc's B2 Corporate Family Rating and assigned a B3, LGD4-69% to the company's new $300 million senior unsecured notes. The company's SGL-3 speculative grade liquidity rating was also affirmed. The rating outlook remained positive. Proceeds from the new notes will be used to redeem the company's 7.13% senior notes due 2013 and paydown its revolver. The transaction is leverage neutral. Rating action: $300 million new senior unsecured notes rated B3, LGD4-69% Affirmed: Issuer: Manitowoc Company, Inc. (The) Corporate Family Rating (CFR) B2 Probability of Default (PDR) B2 SGL-3 Changes: Issuer: Manitowoc Company, Inc. (The) Senior Secured Revolver to Ba2 LGD2, 14% from Ba2 LGD2, 11% Senior Secured Term Loan A to Ba2 LGD2, 14% from Ba2 LGD2, 11% Senior Secured Term Loan B to Ba2 LGD2, 14% from Ba2 LGD2, 11% $150M Senior Notes at 7.125% to B3 LGD4, 69% from B3 LGD4, 67% to be withdrawn at close $400M Senior Notes at 9.5% to B3 LGD4, 69% from B3 LGD4, 67% $600M Senior Notes at 8.5% to B3 LGD4, 69% from B3 LGD4, 67% Ratings Rationale The B3 rating on the company's new $300 million senior unsecured notes reflects their pari passu nature with the company's current 9.5% senior notes due 2018 and the 8.5% notes due 2020 as well as their priority of claim within the overall capital structure based on their unsecured nature. The rating on the notes also reflects that there is $900 million of first lien secured debt that has a senior priority to the $1.3 billion in total unsecured notes. The positive outlook reflects Moody's anticipation of steady growth in demand for both of the company's cranes and foods segment which will lead to improved profitability and cash flow. The company's food service operations is currently anticipated to grow more slowly than the company's crane operations but Moody's believes that the food business adds stability to the company's overall credit quality and better positions the company to manage through downturns. The affirmation of the B2 CFR and PDR considers the company's still relatively high leverage and low interest coverage. For the LTM period ended June 30, 2012, the company had Debt to EBITDA of 5.9x compared with 6.0 times at the end of 2011 while EBITA to interest improved to 1.9x for the LTM period ended June 30, 2012 when compared with the 1.6x for 2011, both on a Moody's adjusted basis. A ratings upgrade would be considered if leverage is expected to improve to under 4.5 times in on a sustainable basis. EBITA coverage of interest of over 2 times that was deemed to be improving would also support positive ratings traction. A meaningful and sustained improvement in crane sales along with strong working capital management would also be supportive of positive ratings action. The ratings and/or outlook could be downgraded if EBITA/interest or Debt to EBITDA materially weakened from current levels over the next few quarters or if Debt to EBITDA was expected to weaken consistently. Were the company to perform below expectations and experience meaningful tightness under its covenants, the rating and/or outlook could be adversely affected. The principal methodology used in rating Manitowoc Company Inc. was the Global Manufacturing Industry Methodology, published December 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. The Manitowoc Company, Inc., headquartered in Manitowoc, WI, is a diversified global manufacturer supporting the construction and foodservice end markets. Revenues for the LTM period ended June 30, 2012 were over $3.8 billion. MANITOWOC CO: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Manitowoc Co. Inc. The outlook is stable. "At the same time, we assigned a 'B+' issue-level rating and a '4' recovery rating to the company's proposed $300 million senior unsecured notes due 2022. The '4' recovery rating indicates expectations for an average (30% to 50%) recovery in the event of default," S&P said. "We are also affirming our 'BB' issue-level rating and '1' recovery rating on the company's credit facilities and our 'B+' issue-level rating and '4' recovery rating on the company's other senior unsecured notes due 2018 and 2020. A '1' recovery rating indicates our expectation of very high (90%-100%) recovery," S&P said. Manitowoc plans to use the proceeds from the notes issuance to redeem its $150 million senior notes due 2013 and to repay a portion of its outstanding borrowings under its revolving credit facility. The ratings on Manitowoc reflect the company's "aggressive" financial risk profile, characterized by high debt and aggressive financial policies, which more than offsets its "fair" business risk profile. "We expect the company's revenues to increase as the crane segment continues its recovery alongside a modest improvement in the food service segment," S&P said. The company's credit measures have modestly improved with the gradual recovery in the crane end markets. "We believe they will improve further but will likely still remain weak for the rating over the next few quarters," said Standard & Poor's credit analyst Carol Hom. "We believe that the company will pay down debt with the free cash flow it generates. Manitowoc's cash balance and ample availability on its revolver, plus our expectation of positive free cash flow generation for the year, should continue to support its adequate liquidity." "The company is one of the top two crane manufacturers serving the cyclical construction markets and is one of the top two manufacturers by market share of major products in the more-stable food service markets. We believe the company should continue to maintain good customer, product, and geographic diversity, with about half of its revenues coming from outside the U.S. It also maintains low-cost and efficient global manufacturing operations. We estimate sales in the crane business will account for about 60% of total revenues and sales in the food service segment for about 40%. In our opinion, the operating environment has stabilized some but likely will remain challenging in the near term, especially for the crane business. We expect further stabilization and the gradual recovery to continue through year-end and into 2013. The crane segment's backlog was about $944 million as of June 30, 2012--a significant increase from year-end 2011 levels," S&P said. "We estimate revenues will rise about 7% for 2012. We expect revenue growth in the crane segment of 8%-9%, similar to our economists' current forecast for residential and nonresidential construction and equipment spending. We believe increasing global demand will contribute to longer-term prospects. We believe the food service segment will improve modestly, with revenues increasing roughly 2%, in line with the economy. This growth projection is similar to our economists' current view on U.S. GDP growth for consumer spending. We estimate the EBITDA margin will remain somewhat steady at about 10%-11%, reflecting the expected recovery in the crane end markets and modest improvement in its food service segment," S&P said. "For the quarter ended June 30, Manitowoc's sales increased by roughly 6% year over year because of better sales volumes in both the crane and food service segments. We believe higher volumes, continued growth in domestic end markets, the rise in demand in emerging markets, and overall cost control measures should improve profitability modestly over time. The company's EBITDA margin was about 12%--stable compared with the same period in 2011," S&P said. "We view Manitowoc's financial profile as aggressive. Total debt to EBITDA (adjusted to include operating leases and postretirement benefit obligations) as of June 30, 2012, was about 5.5x and funds from operations (FFO) to total debt was about 11%. We believe credit metrics will improve further but will remain somewhat below our expectations over the next few quarters. The company likely will use its free cash flow, which we estimate to be more than $100 million, for debt reduction, strengthening credit measures. For the current rating, we expect total debt to EBITDA of about 4x-5x and FFO to total debt of 10%-15%," S&P said. "The outlook is stable. Although credit measures remain weaker than our expectations for the rating, we believe they will improve and approach levels more in line for the rating as a result of a modest recovery in crane end markets and stable performance in its food service business," S&P said. "We could lower the ratings if the recovery of the crane end markets falters and causes deterioration of credit measures or hurts liquidity--for example, if FFO to total debt appears likely to be less than about 10% in the near term. We could raise the ratings if operating prospects improve meaningfully and the company's liquidity and credit measures support this trend. However, we consider an upgrade in the near term unlikely because we regard the company's current credit protection measures as weak for the rating and we don't think they are likely to improve sufficiently to support a higher rating," S&P said. MBI ENERGY: S&P Withdraws 'B' CCR on Lack of Sufficient Info ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its 'B' corporate credit rating on U.S. oilfield services company MBI Energy Services Inc. "We also withdrew our ratings on the company's debt," S&P said. "The ratings withdrawal reflects the lack of sufficient and timely information necessary for us to maintain surveillance on the ratings on MBI," S&P said. MCJUNKIN RED: Moody's Raises Corp. Family Rating to 'B1' -------------------------------------------------------- Moody's Investors Service upgraded McJunkin Red Man's (MRC) corporate family and probability of default rating to B1 from B2 and assigned a speculative grade liquidity rating of SGL-2. Moody's also assigned a B2 rating to the company's proposed $750 million term loan B. The rating outlook is stable. The proceeds from the proposed term loan along with additional borrowings on the company's existing asset-based revolving credit facility are expected to be used to retire the remaining $861 million of existing 9.5% senior secured notes (B3) along with tender premiums and associated fees and expenses. The rating on the 9.5% senior secured notes will be withdrawn when the notes are redeemed. The following actions were taken: Proposed $750 million term loan B, assigned B2 (LGD5, 75%); Corporate family rating - to B1 from B2; Probability of default rating -- to B1 from B2; Speculative grade liquidity rating, assigned SGL-2 Ratings Rationale The upgrade of MRC is based on Moody's expectation that the company's credit metrics are likely to continue to improve in the near term. This will be supported by significantly reduced interest expense related to the company's refinancing initiatives and stable or improved operating results driven by strong oil industry fundamentals and the energy industry infrastructure build out to support the gathering, storage and distribution of oil, and to a lesser extent natural gas. Moody's expects the company's leverage ratio to decline to approximately 3.0x over the next 12 months versus 5.8x in 2011 and for the interest coverage ratio, as measured by (EBITDA-CapEx)/Interest, to increase to approximately 4.5x versus 1.7x in 2011 assuming modest growth in operating results. MRC's B1 corporate family rating reflects its relatively high leverage, acquisitive history, exposure to highly competitive and cyclical end markets, and modest operating margins typical of the industrial distribution industry. The rating is supported by the company's recently improved operating results and credit metrics, solid scale and global position in certain sectors of the energy industry, modest capital spending requirements and the countercyclical nature of its working capital investment, which results in free cash flow when demand falls. Moody's assigned a B2 rating to the proposed term loan, which is one notch below the B1 corporate family rating because the term loan lenders have a second lien on the working capital assets collateralizing the company's sizeable asset-based revolving credit facility. The $1.25 billion ABL has a first lien on receivables and inventory while the term loan has a first lien on property, plant and equipment, which is modest versus the size of the $750 million term loan. MRC's speculative grade liquidity rating of SGL-2 reflects the company's good liquidity and Moody's expectation that they will begin to generate positive free cash flow in the second half of this year. The company has generated negative free cash flow over the past 18 months as it invested in working capital to meet strong end market demand. However, Moody's expects the company to begin to generate modest free cash flow over the next 12-18 months as growth slows and they reduce working capital investments. This should add to the company's liquidity position. Moody's is projecting pro forma liquidity of approximately $500 including $50 million of cash and ABL availability of $450 million. The stable outlook reflects Moody's expectation that the company's operating results will gradually improve over the next 12 to 18 months. It also considers the resilience of the distribution business model, which in a downturn should benefit from cash generated through reduced working capital. An upgrade of MRC is not likely in the near term due to the underlying volatility of the company's business model and end markets. However, an upgrade is possible if operating results improve leading to consistently positive free cash flow and enhanced credit metrics. This would include the company's debt-to- EBITDA ratio declining below 3.0x and free cash flow generation rising above $100 million on a sustainable basis. A downgrade could be triggered if operating results deteriorate and (EBITDA-CapEx)/interest remains below 2.5x or debt-to-EBITDA is sustained above 3.5x. The principal methodology used in rating McJunkin Red Man Corporation was the Global Distribution & Supply Chain Services Industry Methodology published in November 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. McJunkin Red Man Corporation (MRC) is a global distributor of pipes, valves, and fittings (PVF) and related products and services to the energy industry across each of the upstream (exploration, production and extraction of underground oil and gas), midstream (gathering and transmission of oil and gas, gas utilities, and the storage and distribution of oil and gas) and downstream (crude oil refining, petrochemical processing and general industrial) sectors. The company operates out of approximately 220 branch locations, 150 third party pipe yards, 26 valve automation service centers and 10 distribution centers located in the principal industrial, hydrocarbon producing and refining areas of the United States, Canada, Europe, Asia and Australia. The company is headquartered in Houston, Texas and generated revenues of approximately $5.5B for the 12 month period ending June 30, 2012. MCJUNKIN RED: S&P Affirms 'B+' Corp. Credit Rating; Outlook Pos --------------------------------------------------------------- Standard & Poor's Rating Services revised its rating outlook on McJunkin Red Man Corp. to positive from stable and affirmed the 'B+' corporate credit rating on the company. "We also assigned our 'B' issue level rating (one notch lower than the corporate credit rating) to the company's proposed $750 million term loan due 2019. The recovery rating on the term loan is '5', indicating our expectation of modest (10% to 30%) recovery under our default scenario," S&P said. "The outlook revision follows our assessment that McJunkin's margin expansion and lower debt levels will likely result in stronger credit metrics that are more in line with a higher rating, given our view that energy sector demand for the company's pipes, valves, and fittings should remain relatively stable over the coming year," said credit analyst Gayle Bowerman. "The company has improved its credit profile considerably this year by significantly reducing debt and improving operating leverage. The positive outlook also underscores our view that McJunkin will be able to sustain margins at current levels due to its realigned product mix and attentive inventory management." "We would lower the rating if McJunkin's leverage deteriorated and remained above 5x for a sustained period. This could occur if debt increased to pay shareholder rewards or finance an acquisition, if the company's margins contracted because of greater-than-expected steel price instability, or if decline in the company's end markets triggered a major slowdown in demand," S&P said. "We could revise the outlook back to stable if McJunkin were unable to maintain expected margin levels or if it increased debt such that we expected leverage to be maintained between 4x and 5x," S&P said. MEDICAL ALARM: Sees Robust Sales from Promotional Activities ------------------------------------------------------------ Medical Alarm Concepts Holding, Inc., on Oct. 1, 2012, received notification from a major retail partner concerning planned promotional activities. The Company was notified that this retailer was in process of mailing and otherwise distributing coupon and other promotional materials relating to the Company's MediPendant product. This promotion is expected to run from mid- October through mid-November. The Company is expecting robust sales as a result of this promotion, and other promotional activities, which are currently underway and being organized, and has brought in additional staff resources as a result to manage this expected increased demand. On Sept. 27, 2012, the Company discussed with various investors the current revenue growth and MRR (Monthly Recurring Revenue) trajectory. Management reiterated the Company's rapid movement toward profitability as the MRR continues to grow at a rapid pace. The Company reiterated that profitability is expected over the coming months due to this accelerated MRR growth, in addition to increased name recognition for the Company's MediPendant product and increased sales to both domestic and international distributors. The Company also received notification from a strategic marketing partner in Dublin, Ireland, of its intention to begin marketing and offering the Company's MediPendant product and monitoring services throughout Ireland. The Company has signed an additional Fall advertising promotion for the MediPendant. Albertson's Stores will be utilizing pharmacy merchandise bags printed with the MediPendant name, logo, website address and toll-free number in approximately 200 stores. This promotion, which is expected to kick off November 1st, is expected to increase awareness of the product and to generate direct sales. Since this announcement, the Company has received confirmation, and issued approval, of the promotional materials to be used for this marketing campaign. About Medical Alarm Plymouth Meeting, Pa.-based Medical Alarm Concepts Holding, Inc., utilizes new technology in the medical alarm industry to provide 24-hour personal response monitoring services and related products to subscribers with medical or age-related conditions. The Company's balance sheet at March 31, 2011, showed $1.40 million in total assets, $3.41 million in total liabilities, and a $2 million total stockholders' deficit. As of March 31, 2011, the Company had $0 in cash. The Company said in its quarterly report for the period ended March 31, 2012, that "We believe we cannot satisfy our cash requirements for the next twelve months with our current cash and, unless we receive additional financing, we may be unable to proceed with our plan of operations. We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of our employees. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. Additional funds are required, and unless we receive proceeds from financing, we may not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we will suspend or cease operations." "We anticipate incurring operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern." MF GLOBAL: $205MM Dispute With Conoco Goes to District Court ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that ConocoPhillips Co. may learn from a U.S. district court judge in December whether it will escape the liquidation of commodity broker MF Global Inc. without losses suffered by other customers. According to the report, U.S. District Judge Katherine B. Forrest in Manhattan agreed with ConocoPhillips on Oct. 4 that a dispute over $205 million in letters of credit posted by the oil producer must be decided in her court, not by a bankruptcy judge. She told both sides to submit all briefs by Dec. 3 so she can hear oral arguments on Dec. 19. When the MF Global liquidation began, there was a shortfall of about $1.6 billion in supposedly segregated customer property. Houston-based Conoco was one of nine customers allowed to post letters of credit rather that cash to supply margin for trading accounts. Had Conoco posted cash as margin, it would only be receiving pro rata distributions like other customers. Since none of Conoco's letters of credit had been drawn when MF Global entered bankruptcy, the largest U.S. independent oil and natural-gas producer by market value stands to escape the loss on margin deposits suffered by other customers. The report relates that all of Conoco's letters of credit expired after bankruptcy without being drawn. Mr. James Giddens, the MF Global brokerage trustee, objected to Conoco's claims, pointing to a regulation issued by the U.S. Commodity Futures Trading Commission. The regulation says that "proceeds" of letters of credit must be treated the same as other forms of customer collateral such as cash. Mr. Giddens takes the position that the letters of credit should be a deduction from distributions Conoco receives in the MF Global liquidation. U.S. District Judge Katherine B. Forrest said in her Oct. 4 opinion that a win by Mr. Giddens might eventually require Conoco to write the trustee a check in the future. The report notes that Conoco filed papers contending that the dispute over the letters of credit must be decided in district court, not by a bankruptcy judge. Judge Forrest agreed in her 19- page opinion on Oct. 4. Judge Forrest didn't say how she might rule on the ultimate question of whether letters of credit are treated the same as cash margin. Judge Forrest told both sides to submit all their briefs by Dec. 3 so she can hear oral argument on Dec. 19. According to Bloomberg, Judge Forrest said the issues must be resolved in district court because they involve substantial consideration of non-bankruptcy law, more particularly the Commodity Exchange Act. She also said the case deals with a non- bankruptcy question of whether the CFTC exceeded its rule-making authority in regulating bank letters of credit. Conoco's motion to remove the claim dispute to district court is In re MF Global Inc., 12-cv-06014, U.S. District Court, Southern District of New York (Manhattan). 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. MICHAELS STORES: Moody's Upgrades Rating on $800MM Notes to 'B3' ---------------------------------------------------------------- Moody's Investors Service upgraded Michaels Stores, Inc.'s $800 million senior unsecured notes to B3 from Caa1. All other ratings, including the B2 Corporate Family Rating, were affirmed. The rating outlook remains positive. The upgrade of the company's $800 million senior unsecured notes due 2018 reflects the closing of the company's $200 million 'add on' note offering and that proceeds were used to prepay $200 million of the company's senior secured term loan. The upgrade also takes into consideration that Michaels has issued a redemption notice for all of the company's outstanding subordinated discount notes due 2016. The following ratings were affirmed and LGD assessments amended: Corporate Family Rating at B2 Probability of Default Rating at B2 $1,796 million senior secured term loan due 2013/2016 at B1 (LGD 3, 34% from LGD 3, 32%) $200 million additional senior unsecured notes due 2018 at B3 (LGD 5, 76% from LGD 5, 73%) $393 million senior subordinated notes due 2016 at Caa1 (LGD 6, 94% from LGD 6, 91%) $180 million subordinated discount notes due 2016 at Caa1 (LGD 6, 97% from LGD 6, 95%) The following rating was upgraded : $800 million senior unsecured notes due 2018 to B3 (LGD 5,76%) from Caa1 (LGD 5, 77%) Ratings Rationale Michaels' B2 Corporate Family Rating reflects the company's improving but very sizeable debt burden, with debt/EBITDA of 6.0 times as of July, 2012. It also recognizes Michaels' leadership position in the highly fragmented arts and crafts segment, its high operating margins and its good liquidity profile. The rating considers that Moody's believes operational initiatives, such as its direct sourcing initiatives and increasing private label brand penetration, will enable the company to sustain consistently high operating margins. The rating also takes into consideration the company's participation in some segments that have greater sensitivity to economic conditions, such as its custom framing business. The positive rating outlook reflects expectations that the ratings could be upgraded if the company is able to sustain positive trends in sales and maintain its high operating margins while utilizing cash flow to repay debt. Quantitatively, ratings could be upgraded if debt/EBITDA reached 5.25 times and EBITA/interest expense was sustained above 2.0 times. In view of the positive rating outlook, ratings are unlikely to be downgraded in the near term. If the company was unable to make further progress toward deleveraging over the next 12 to 18 months, or its financial policies became more aggressive (utilizing its cash balance to fund a distribution to shareholders, for example), the rating outlook could be revised to stable. Ratings could be lowered if the company were to see reversal of recent positive trends in sales. Quantiatively, ratings could be lowered if debt/EBITDA were to approach 6.5 times. The principal methodology used in rating Michaels Stores, Inc was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Irving, TX, Michaels Stores, Inc., operated 1074 Michaels retail stores in 49 states and in Canada, as well as 128 Aaron Brothers stores as of July 2012. The company primarily sells general and children's crafts, home d�cor and seasonal items, framing and scrapbooking products. Total sales are in excess of $4 billion. MORGANS HOTEL: Amends Stockholder Rights Pact with Computershare ---------------------------------------------------------------- The Board of Directors of Morgans Hotel Group Co. resolved to amend the Amended and Restated Stockholder Protection Rights Agreement between the Company and Computershare Shareowner Services LLC, as Rights Agent, dated as of Oct. 1, 2009, as amended. The Company and Computershare entered into Amendment No. 3 to the Rights Agreement, dated as of Oct. 3, 2012, to amend the definition of "Expiration Time" to the earliest of: (i) the Exchange Time; (ii) the Redemption Time; (iii) the Close of Business on Oct. 9, 2015, unless, for purposes of this clause (iii), extended by action of the Board of Directors (in which case the applicable time will be the time at which it has been so extended); and (iv) immediately prior to the effective time of a consolidation, merger or statutory share exchange that does not constitute a Flip-over Transaction or Event. A copy of the Amendment is available for free at: http://is.gd/Z3feGc About Morgans Hotel Group Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) -- http://www.morganshotelgroup.com/-- is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. The Company reported a net loss of $87.95 million in 2011, a net loss of $83.64 million in 2010, and a net loss of $101.60 million in 2009. The Company's balance sheet at June 30, 2012, showed $545.86 million in total assets, $655.93 million in total liabilities, $6.12 million in redeemable noncontrolling interest, and a $116.19 million total deficit. MULTISPECIALTY DEVELOPMENT: Case Summary & Unsecured Creditor ------------------------------------------------------------- Debtor: Multispecialty Development Corp P.O. Box 749 Ponce, PR 00715 Bankruptcy Case No.: 12-07918 Chapter 11 Petition Date: October 4, 2012 Court: United States Bankruptcy Court District of Puerto Rico (Ponce) Debtor's Counsel: Charles Alfred Cuprill, Esq. CHARLES A CURPILL, PSC LAW OFFICE 356 Calle Fortaleza Second Floor San Juan, PR 00901 Tel: (787) 977-0515 E-mail: cacuprill@cuprill.com Scheduled Assets: $941,458 Scheduled Liabilities: $1,455,000 In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Urban Venture Group,PSC Architectural $95,250 100 Carr. 165, Ste 704 Services Guaynabo, PR 00965 The petition was signed by Alvaro Reymunde, MD, president. MUNDY RANCH: Judge David Thuma Won't Handle Chapter 11 Case ----------------------------------------------------------- U.S. Judge David T. Thuma has recused himself from any further proceedings in the bankruptcy case of New Mexico's Mundy Ranch. The order was entered Sept. 20, 2012. New Mexico's Mundy Ranch -- http://www.mundyranch.com/-- offers a "fine edge on ranch living with style." The Mundy family-owned Mundy Ranch spans granite slopes and fertile bottom lands of the Chama River Valley, has 25 alpine lakes with trophy trout, and a mile of freestone river lined with towering Pines. Mundy Ranch is offering for sale 42-140 acre ranch parcels, with parcel pricing starting at $1 million to $3 million depending on location. It is also offering 20 lifetime recreational memberships at a price of $500,000 each. Mundy Ranch, Inc., filed a Chapter 11 petition (Bankr. D. N.M. Case No. 12-13015) in Albuquerque, New Mexico. The Law Office of George Dave Giddens, PC, in Albuquerque, serves as counsel. The Debtor estimated assets of $10 million to $50 million and debts of up to $10 million. NESBITT PORTLAND: Can Use Lender's Cash Collateral Through Nov. 14 ------------------------------------------------------------------ Bankruptcy Judge Robin Riblet has continued the hearing on the request of Nesbitt Portland Property LLC and its debtor-affiliates for interim and final orders authorizing them to use the cash collateral of U.S. Bank National Association, as Trustee and Successor in Interest to Bank of America, N.A., as Trustee for Registered Holders of GS Mortgage Securities Corporation II, Commercial Mortgage Passthrough Certificates, Series 2006-GG6, acting by and through Torchlight Loan Services, LLC, as special servicer. On Sept. 12, the Court issued an interim order permitting the Debtors to use the cash collateral through the hearing set for Sept. 24. Judge Riblet continued that hearing to Nov. 14, at 2:00 p.m. Pursuant to the September order, the Debtors are authorized to use the cash collateral in which the Lender claims a pre-petition security interest to pay ongoing expenses incurred by the Debtors, and if necessary, security deposits to utility providers pursuant. The Lender will have a replacement lien to the extent the Lender's cash collateral is used by the Debtors and to the extent of any diminution in the value of the collateral, with the same priority in the post-petition collateral, and proceeds thereof, that the Lender held in the prepetition collateral. The Debtors' owner, Patrick Nesbitt, owns 17 Embassy Suites hotels through his subsidiary companies. Mr. Nesbitt also owns a management company, Windsor Capital Group Inc., that manages the hotels and serves as third party management company for unrelated owners. In 2006, Mr. Nesbitt refinanced eight of the Embassy Suites with a $187.5 million loan from Greenwich Capital Financial Products, Inc., the pre-decessor in interest to U.S. Bank. The Debtors own the hotels, which serve as collateral for the loan. The loan matured Feb. 6, 2011. The Debtors defaulted on the loan after negotiations with Torchlight fell through. Torchlight sued the Debtors in January 2012, and convinced a New York federal district court to appoint in June a receiver for the eight hotels. Torchlight also has intended to remove Windsor as the management company for the hotels and appoint Crescent Hotels and Resorts LLC, a Windsor competitor, to take over management of the hotels. The Debtors has taken an appeal from the receivership order to the Second Circuit Court of Appeals, which appeal remains pending as of the bankruptcy filing. On Sept. 5, 2012, the Debtors filed with the Court their schedules of assets and liabilities. Nesbitt Portland scheduled $29.4 million in assets and $192.3 million in liabilities. Nesbitt Portland's hotel property is valued at $27.19 million, and secures a $191.9 million debt to U.S. Bank. The U.S. Trustee held a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) in the case on Sept. 6. About Nesbitt Portland Property et al. Windsor Capital Group Inc. CEO Patrick M. Nesbitt sent hotel- companies to Chapter 11 bankruptcy to stop a receiver named by U.S. Bank National Association from taking over eight Embassy Suites hotels. The eight hotels were pledged by the Debtors as collateral for the loans with U.S. Bank. According to http://www.wcghotels.com/Santa Monica-based Windsor owns and/or operates 23 branded hotels in 11 states across the U.S. Windsor Capital is the largest private owner and operator of Embassy Suites hotels. In the case U.S. Bank vs. Nesbitt Bellevue Property LLC, et al. (S.D.N.Y. 12 Civ. 423), U.S. Bank obtained approval from the district judge in June to name Alan Tantleff of FTI Consulting, Inc., as receiver for: * Embassy Suites Colorado Springs in Colorado; * Embassy Suites Denver Southeast in Colorado; * Embassy Suites Cincinnati - Northeast in Blue Ash, Ohio; * Embassy Suites Portland - Washington Square in Tigard, Oregon; * Embassy Suites Detroit - Livornia/Novi in Michigan; * Embassy Suites El Paso in Texas; * Embassy Suites Seattle - North/Lynwood in Washington; and * Embassy Suites Seattle - Bellevue in Washington The receiver obtained district court permission to engage Crescent Hotels and Resorts LLC to manage the eight hotels. But before Mr. Adam could take physical possession of the properties and take control of the Hotels, the eight borrowers filed Chapter 11 petitions (Bankr. C.D. Calif. Lead Case No. 12-12883) on July 31, 2012, in Santa Barbara, California. The debtor-entities are Nesbitt Portland Property LLC; Nesbitt Bellevue Property LLC; Nesbitt El Paso Property, L.P.; Nesbitt Denver Property LLC; Nesbitt Lynnwood Property LLC; Nesbitt Colorado Springs Property LLC; Nesbitt Livonia Property LLC; and Nesbitt Blue Ash Property LLC. Bankruptcy Judge Robin Riblet presides over the cases. The Debtors are represented in the Chapter 11 case by attorneys at Susi & Gura, PC, and Griffith & Thornburgh LLP. Alvarez & Marsal North American, LLC, serves as financial advisors. Attorneys at Kilpatrick Townsend & Stockton LLP represented the Debtors in the receivership case. U.S. Bank National Association, as Trustee and Successor in Interest to Bank of America, N.A., as Trustee for Registered Holders of GS Mortgage Securities Corporation II, Commercial Mortgage Passthrough Certificates, Series 2006-GG6, acting by and through Torchlight Loan Services, LLC, as special servicer, are represented in the case by: David Weinstein, Esq. Lawrence P. Gottesman, Esq. BRYAN CAVE LLP 1290 Avenue of the Americas New York, NY 10104-3300 E-mail: david.weinstein@bryancave.com raul.morales@bryancave.com trish.penn@bryancave.com NESBITT PORTLAND: Taps Susi, Griffith as Bankruptcy Lawyers ----------------------------------------------------------- Nesbitt Portland Property LLC and its debtor-affiliates are seeking to employ the law firms Susi & Gura PC as general counsel, and and Griffith & Thornburgh LLP as co-counsel. Both firms attests they are "disinterested" as the term is defined in 11 U.S.C. Sec. 101(14), and do not have any interest adverse to the Debtors or the bankruptcy estates. Both firms will be paid on an hourly basis. Susi & Gura's hourly rates are: Peter Susi, member $475 per hour Jonathan G. Gura $375 per hour Legal assistants $95 per hour Griffith's hourly rates are: Joseph M. Sholder, partner $400 per hour Jill M. Himlan $275 per hour Paralegals $125 per hour Susi & Gura received a $22,500 prepetition retainer, plus the Chapter 11 filing fee in each of the Debtors' cases. Griffith received $7,500 from each of the Debtors. The source of the retainers paid to the firms were loans to the Debtors by Patrick Nesbitt. Mr. Nesbitt, in turn, derived the funds from a distribution to him by Windsor Capital Group. U.S. Bank National Association -- the Trustee and Successor in Interest to Bank of America, N.A., as Trustee for Registered Holders of GS Mortgage Securities Corporation II, Commercial Mortgage Passthrough Certificates, Series 2006-GG6, acting by and through Torchlight Loan Services, LLC, as special servicer -- has objected to the request. Susi & Gura may be reached at: Jonathan Gura, Esq. Peter Susi, Esq. SUSI & GURA, A PROFESSIONAL CORP 7 W Figueroa St, 2nd Flr Santa Barbara, CA 93101 Tel: 805-965-1011 Fax: 805-965-7351 E-mail: jon@susigura.com Griffith & Thornburgh LLP may be reached at: Joseph M. Sholder, Esq. GRIFFITH & THORNBURGH LLP 8 E Figuerora St Ste 300 Santa Barbara, CA 93101 Tel: 805-965-5131 Fax: 805-965-6751 E-mail: sholder@g-tlaw.com About Nesbitt Portland Property et al. Windsor Capital Group Inc. CEO Patrick M. Nesbitt sent hotel- companies to Chapter 11 bankruptcy to stop a receiver named by U.S. Bank National Association from taking over eight Embassy Suites hotels. The eight hotels were pledged by the Debtors as collateral for the loans with U.S. Bank. According to http://www.wcghotels.com/Santa Monica-based Windsor owns and/or operates 23 branded hotels in 11 states across the U.S. Windsor Capital is the largest private owner and operator of Embassy Suites hotels. In the case U.S. Bank vs. Nesbitt Bellevue Property LLC, et al. (S.D.N.Y. 12 Civ. 423), U.S. Bank obtained approval from the district judge in June to name Alan Tantleff of FTI Consulting, Inc., as receiver for: * Embassy Suites Colorado Springs in Colorado; * Embassy Suites Denver Southeast in Colorado; * Embassy Suites Cincinnati - Northeast in Blue Ash, Ohio; * Embassy Suites Portland - Washington Square in Tigard, Oregon; * Embassy Suites Detroit - Livornia/Novi in Michigan; * Embassy Suites El Paso in Texas; * Embassy Suites Seattle - North/Lynwood in Washington; and * Embassy Suites Seattle - Bellevue in Washington The receiver obtained district court permission to engage Crescent Hotels and Resorts LLC to manage the eight hotels. But before Mr. Adam could take physical possession of the properties and take control of the Hotels, the eight borrowers filed Chapter 11 petitions (Bankr. C.D. Calif. Lead Case No. 12-12883) on July 31, 2012, in Santa Barbara, California. The debtor-entities are Nesbitt Portland Property LLC; Nesbitt Bellevue Property LLC; Nesbitt El Paso Property, L.P.; Nesbitt Denver Property LLC; Nesbitt Lynnwood Property LLC; Nesbitt Colorado Springs Property LLC; Nesbitt Livonia Property LLC; and Nesbitt Blue Ash Property LLC. Bankruptcy Judge Robin Riblet presides over the cases. The Debtors are represented in the Chapter 11 case by attorneys at Susi & Gura, PC, and Griffith & Thornburgh LLP. Alvarez & Marsal North American, LLC, serves as financial advisors. Attorneys at Kilpatrick Townsend & Stockton LLP represented the Debtors in the receivership case. U.S. Bank National Association, as Trustee and Successor in Interest to Bank of America, N.A., as Trustee for Registered Holders of GS Mortgage Securities Corporation II, Commercial Mortgage Passthrough Certificates, Series 2006-GG6, acting by and through Torchlight Loan Services, LLC, as special servicer, are represented in the case by David Weinstein, Esq., and Lawrence P. Gottesman, Esq., at Bryan Cave LLP. On Sept. 5, 2012, the Debtors filed with the Court their schedules of assets and liabilities. Nesbitt Portland scheduled $29.4 million in assets and $192.3 million in liabilities. Nesbitt Portland's hotel property is valued at $27.19 million, and secures a $191.9 million debt to U.S. Bank. NESBITT PORTLAND: Hiring Alvarez & Marsal as Financial Advisors --------------------------------------------------------------- Nesbitt Portland Property LLC and its debtor-affiliates await approval of their request to employ Alvarez & Marsal North American, LLC, as their financial advisors. U.S. Bank National Association -- the Trustee and Successor in Interest to Bank of America, N.A., as Trustee for Registered Holders of GS Mortgage Securities Corporation II, Commercial Mortgage Passthrough Certificates, Series 2006-GG6, acting by and through Torchlight Loan Services, LLC, as special servicer -- has objected to the request. According to papers filed by the Debtors in Court on Aug. 30, Alvarez & Marsal will provide both restructuring advisory and valuation assistance to the Debtors, necessary in the preparation of a formal plan of reorganization. The Debtors propose to pay Alvarez & Marsal on an hourly basis at these rates: Managing director $625 - $850 per hour Director $450 - $625 per hour Associate $300 - $450 per hour Analyst $225 - $300 per hour The Debtors will also reimburse the firm's out-of-pocket expenses, and provide indemnification to the firm's professionals. Alvarez & Marsal managing director Steven Varner attests that the firm does not hold any interest adverse to the Debtors' estates and is a "disinterested person" as defined in 11 U.S.C. Sec. 101(14). About Nesbitt Portland Property et al. Windsor Capital Group Inc. CEO Patrick M. Nesbitt sent hotel- companies to Chapter 11 bankruptcy to stop a receiver named by U.S. Bank National Association from taking over eight Embassy Suites hotels. The eight hotels were pledged by the Debtors as collateral for the loans with U.S. Bank. According to http://www.wcghotels.com/Santa Monica-based Windsor owns and/or operates 23 branded hotels in 11 states across the U.S. Windsor Capital is the largest private owner and operator of Embassy Suites hotels. In the case U.S. Bank vs. Nesbitt Bellevue Property LLC, et al. (S.D.N.Y. 12 Civ. 423), U.S. Bank obtained approval from the district judge in June to name Alan Tantleff of FTI Consulting, Inc., as receiver for: * Embassy Suites Colorado Springs in Colorado; * Embassy Suites Denver Southeast in Colorado; * Embassy Suites Cincinnati - Northeast in Blue Ash, Ohio; * Embassy Suites Portland - Washington Square in Tigard, Oregon; * Embassy Suites Detroit - Livornia/Novi in Michigan; * Embassy Suites El Paso in Texas; * Embassy Suites Seattle - North/Lynwood in Washington; and * Embassy Suites Seattle - Bellevue in Washington The receiver obtained district court permission to engage Crescent Hotels and Resorts LLC to manage the eight hotels. But before Mr. Adam could take physical possession of the properties and take control of the Hotels, the eight borrowers filed Chapter 11 petitions (Bankr. C.D. Calif. Lead Case No. 12-12883) on July 31, 2012, in Santa Barbara, California. The debtor-entities are Nesbitt Portland Property LLC; Nesbitt Bellevue Property LLC; Nesbitt El Paso Property, L.P.; Nesbitt Denver Property LLC; Nesbitt Lynnwood Property LLC; Nesbitt Colorado Springs Property LLC; Nesbitt Livonia Property LLC; and Nesbitt Blue Ash Property LLC. Bankruptcy Judge Robin Riblet presides over the cases. The Debtors are represented in the Chapter 11 case by attorneys at Susi & Gura, PC, and Griffith & Thornburgh LLP. Alvarez & Marsal North American, LLC, serves as financial advisors. Attorneys at Kilpatrick Townsend & Stockton LLP represented the Debtors in the receivership case. U.S. Bank National Association, as Trustee and Successor in Interest to Bank of America, N.A., as Trustee for Registered Holders of GS Mortgage Securities Corporation II, Commercial Mortgage Passthrough Certificates, Series 2006-GG6, acting by and through Torchlight Loan Services, LLC, as special servicer, are represented in the case by David Weinstein, Esq., and Lawrence P. Gottesman, Esq., at Bryan Cave LLP. On Sept. 5, 2012, the Debtors filed with the Court their schedules of assets and liabilities. Nesbitt Portland scheduled $29.4 million in assets and $192.3 million in liabilities. Nesbitt Portland's hotel property is valued at $27.19 million, and secures a $191.9 million debt to U.S. Bank. NESBITT PORTLAND: Files Amended List of Top 20 Unsecured Creditors ------------------------------------------------------------------ Nesbitt Portland Property LLC on Sept. 20 filed an amended list of creditors holding the 20 largest unsecured claims, disclosing: Name of Creditor Nature of Claim Amount of Claim ---------------- --------------- --------------- Hilton Hotels Corporation Trade payable $105,961 4649 Paysphere Circle Chicago, IL 60674 Tel: 901-374-5420 Portland General Electric Trade payable $31,861 PO Box 4438 Portland, OR 97254 Food Service of America Trade payable $30,068 PO Box 3929 Portland, OR 97208 Tel: 503-980-2500 Guest Supply Trade payable $28,452 Trane Oregon Trade payable $25,782 DThree Productions Trade payable $13,512 Madison Furniture Trade payable $10,986 City of Tigard, Ore. Trade payable $8,646 Northwest Natural Trade payable $8,154 New System Laundry Trade payable $6,796 Tualatin Valley Trade payable $6,174 Water District Newmarket International Trade payable $6,048 World Travel Inc. Trade payable $5,486 Duck Delivery Produce Inc. Trade payable $5,398 Trane Oregon Service Trade payable $4,762 Otis Elevator Company Trade payable $4,191 Royal Cup Inc. Trade payable $3,745 Micros Systems Inc. Trade payable $3,740 Lodgenet Interactive Corp Trade payable $3,618 Comcast Trade payable $3,262 NET ELEMENT: Closes Merger with Cazador, Now Trades Under "NETE" ---------------------------------------------------------------- Net Element and Cazador Acquisition Corporation's respective shareholders have approved their merger agreement and their previously announced business combination has been completed. The combined entity, named "Net Element International Inc.," will be listed on the NASDAQ Capital Market beginning Wednesday, October 3, under the ticker symbol "NETE." "As a result of this merger, Net Element International is well- positioned to become a leading mobile-based commerce and payment processing platform and continue implementing our growth strategy for our content and technology properties in the U.S. as well as Russia and other emerging markets," said Francesco Piovanetti, Net Element International's new Chief Executive Officer, who previously served as Cazador's Chairman and Chief Executive Officer. In celebration of its NASDAQ listing, Net Element International will rang the NASDAQ opening bell at 9:30 a.m. Thursday, October 4, at the NASDAQ MarketSite in New York City. Said Rakishev: "Net Element International, with its extensive global network and high-level business dealings with Russia, Kazakhstan and other CIS countries, is ideally positioned to capitalize on the region's booming technology marketplace and bring value to our shareholders." Aegis Capital Corp. acted as financial adviser to Cazador, and Reed Smith LLP acted as legal advisor to Cazador. Bilzin Sumberg Baena Price & Axelrod LLP provided legal counsel and Primary Capital, LLC, acted as an adviser to Net Element. Net Element filed a Form 15 with the U.S. Securities and Exchange Commission notifying of its suspension of its duty under Section 15(d) to file reports required by Section 13(a) of the Securities Exchange Act of 1934 with respect to its common stock. As of Oct. 3, 2012, there are no holders of record of common stock of the Company. As a result of the Merger, the Company terminated all offerings of its securities pursuant to existing registration statements. A copy of the Form 8-K is available for free at: http://is.gd/5pYjMF About Net Element Miami, Fla.-based Net Element, Inc. (formerly TOT Energy, Inc.) currently operates several online media Web sites in the film, auto racing and emerging music talent markets. Following the 2011 results, Daszkal Bolton LLP, in Fort Lauderdale, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring losses and has an accumulated deficit and stockholders' deficiency at Dec. 31, 2011. The Company reported a net loss of $24.85 million in 2011, compared with a net loss of $3.10 million in 2010. The Company's balance sheet at June 30, 2012, showed $3.22 million in total assets, $7.69 million in total liabilities, and a $4.46 million total stockholders' deficit. NEWPAGE CORP: Files Amended Joint Plan & Disclosure Statement ------------------------------------------------------------- NewPage Corporation disclosed that it has filed an amended Joint Chapter 11 Plan and Disclosure Statement with the U.S. Bankruptcy Court for the District of Delaware. "The filing of our amended Plan of Reorganization and Disclosure Statement is an important step toward exiting bankruptcy this year with a strong balance sheet," said Jay Epstein, senior vice president and chief financial officer of NewPage. About NewPage Corp Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage Group, NewPage Holding, NewPage, and certain of their U.S. subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del. Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its subsidiary, Consolidated Water Power Company, is not a part of the Chapter 11 proceedings. Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage Port Hawkesbury Corp., brought a motion before the Supreme Court of Nova Scotia to commence proceedings to seek creditor protection under the Companies' Creditors Arrangement Act of Canada. NPPH is under the jurisdiction of the Canadian court and the court- appointed Monitor, Ernst & Young in the CCAA Proceedings. Initial orders were issued by the Supreme Court of Nova Scotia on Sept. 9, 2011 commencing the CCAA Proceedings and approving a settlement and transition agreement transferring certain current assets to NewPage against a settlement payment of $25 million and in exchange for being relieved of all liability associated with NPPH. On Sept. 16, 2011, production ceased at NPPH. NewPage originally engaged Dewey & LeBoeuf LLP as general bankruptcy counsel. In May 2012, Dewey dissolved and commenced its own Chapter 11 case. Dewey's restructuring group led by Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., moved to Proskauer Rose LLP. In June, NewPage sought to hire Proskauer as replacement counsel. NewPage is also represented by Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, NewPage disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. The Official Committee of Unsecured Creditors selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. NEWPAGE CORP: Moody's Rates $500MM Sr. Secured Term Loan '(P)B1' ---------------------------------------------------------------- Moody's Investors Service assigned a provisional (P)B1 rating to NewPage Corporation's proposed $500 million seven year senior secured term loan. Moody's also assigned NewPage provisional (P)B1 corporate family (CFR) and probability of default (PDR) ratings, as well as a speculative grade liquidity rating of SGL-1. The outlook for the long-term ratings is stable. Assignments: Issuer: NewPage Corporation Corporate Family Rating: Assigned (P)B1 Probability of Default Rating: Assigned (P)B1 Senior Secured Term Loan: Assigned (P)B1, LGD4 55% Speculative Grade Liquidity Rating: Assigned SGL-1 Outlook: Stable Moody's understands that the proposed debt offering will be used to exit bankruptcy with the proceeds used to repay NewPage's existing debtor-in-possession financing, provide cash consideration to its pre petition creditors and pay related fees and expenses. The provisional ratings are assigned pending the emergence from bankruptcy and the closing of the proposed exit financing. The ratings are subject to Moody's review of final documentation. The company is expected to emerge from bankruptcy before the end of 2012. Ratings Rationale NewPage's (P)B1 CFR reflects the company's significant position as the largest coated paper producer in North America, its favorable cost position within the industry and Moody's expectation of sound credit protection measures and strong liquidity position. The rating also takes in to account the restructuring efforts during bankruptcy including debt reduction and cost structure improvements. NewPage's CFR rating is constrained by the secular decline in demand for most of the paper grades that the company produces, as more than 80% of NewPage's revenues face some degree of secular headwinds (paper used for commercial printing, magazines, catalogs, books, coupons and commercial inserts). Volatile input costs, execution risks on cost reduction and potential transformation to other grades are also considered. NewPage's SGL-1 rating reflects the company's strong liquidity position. After exiting bankruptcy, NewPage will have a proposed $400 million asset based revolving credit facility that will be committed until 2017. Upon emergence from bankruptcy, the proposed revolver will not be drawn and combined with the company's cash position, the company anticipates having in excess of $400 million in liquidity. Moody's estimates NewPage will generate modest positive free cash flow in the 12 months following emergence from bankruptcy, and will have minimal debt maturities. Covenant issues are not expected over the near term. The stable outlook considers NewPage's strong liquidity position and expectations that the coated paper sector will continue to reduce its supply base to offset declining demand, allowing the company to maintain strong credit protection measures. A rating upgrade would depend on a sustained improvement in the company's financial performance. Quantitatively, this could result if normalized (RCF-Capex)/TD exceeds 9% on a sustainable basis through the business cycle, while maintaining good liquidity. NewPage's ratings could face downward ratings pressure if an acceleration in secular paper decline impairs the company's liquidity position or if normalized (RCF-Capex)/TD measures drop below 3%. The principal methodology used in rating NewPage was Global Paper and Forest Products Industry rating methodology published in September 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 Miamisburg, Ohio, NewPage, a private company, is the largest coated paper producer in North America (with an approximate 35% market share based on production capacity) with 16 paper machines at 8 paper manufacturing mills. The company has annual capacity of approximately 2.8 million tons of coated paper, 300,000 tons of uncoated paper, 250,000 tons of supercalendered paper and approximately 180,000 tons of specialty paper. For the last-twelve months ending August 2012, the company generated revenues of approximately $3.1 billion. Upon emergence from Chapter 11, the pre-petition first lien creditors are expected to own a majority of the equity of the company. NEXEO SOLUTIONS: S&P Keeps 'B' Rating on $525MM Term Loan Facility ------------------------------------------------------------------ Standard & Poor's Ratings Services said its 'B' issue-level and '5' recovery rating on The Woodlands, Texas-based chemicals and plastics distributor Nexeo Solutions LLC's term loan remains unchanged following the company's proposal to increase the term loan to $525 million from $325 million. "All of our other ratings on Nexeo, including the 'B+' corporate credit rating, also remain unchanged. The outlook is stable," S&P said. Nexeo will use the proceeds to repay outstanding borrowings under its asset-based revolving (ABL) credit facility and for general corporate purposes. "The '5' recovery rating on Nexeo's term loan indicates our expectation of a modest (10% to 30%) recovery in the event of a payment default," S&P said. Ratings List Ratings Unchanged Nexeo Solutions LLC Corporate credit rating B+/Stable/-- $525mil. Sr Secd term loan B due 2018 B Recovery rating 5 Subordinated B- Recovery rating 6 NEXSTAR BROADCASTING: S&P Puts 'B' CCR on Watch on Purchase Plans ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' rating on Texas- based TV broadcaster Nexstar Broadcasting Group Inc. on CreditWatch with positive implications. "We also placed all issue- level ratings on CreditWatch with positive implications," S&P said. "We expect to withdraw the issue-level ratings on the existing senior secured credit facility and the senior subordinated notes when they are ultimately repaid through a refinancing," S&P said. "The CreditWatch placement is based on our view that the stations to be acquired from Newport Television will improve Nexstar's station portfolio," said Standard & Poor's credit analyst Daniel Haines. "The Newport stations include two top 50 markets and will increase network and geographic diversification. We expect that the company will also be able to generate cost synergies as some of the acquired stations are in the same market or state as current Nexstar stations. The transaction is expected to close later this year or early next year," S&P said. "Our rating on Nexstar reflects the company's position as a midsize TV broadcaster focused on smaller markets (which generate smaller pools of ad spending), the structural issues that local TV broadcasting faces as a mature business, and the vulnerability of Nexstar's ad revenue stream to economic downturns and the election cycle," S&P said. "Nexstar's second-quarter 2012 results were in line with our expectations. Revenue and EBITDA grew by 18% and 35%, year over year, driven largely by strong growth in political ad revenue and retransmission fees. Core ad revenue grew by 6.7%, 2.2% on an unaffected same-station basis (excluding stations that changed their affiliation), as the largest category--auto advertising-- rose 16%. The EBITDA margin for the quarter improved to 39% from 34% as a result of higher retransmission fee revenue. We expect full-year 2012 revenue and EBITDA growth of around 20% and 40%, respectively, not including the results of the Newport stations to be acquired. Lease-adjusted leverage was 5.6x as of June 30, 2012. Pro forma for the station acquisition, leverage was over 6x. Management has stated that the stations are being acquired for an average 2011/2012 broadcast cash flow multiple of approximately 8.3x, excluding synergies," S&P said. "We expect to resolve the CreditWatch listing once we have completed our discussion and analysis of the expanded station group, and have assessed the new capital structure, covenant terms, and maturity profile. Our preliminarily assumption is minimal incremental leverage through the upcoming refinancing. We will also review management's financial policy regarding leverage and shareholder returns, following its 2011-2012 exploration of strategic alternatives," S&P said. NORTEL NETWORKS: Powers of CCAA Monitor Expanded ------------------------------------------------ Nortel Networks Corporation disclosed that Ernst & Young Inc., the court-appointed monitor in Nortel's creditor protection proceedings under the Companies' Creditors Arrangement Act, obtained an order from the Ontario Superior Court of Justice further extending the Monitor's powers by authorizing and empowering (but not obligating) the Monitor to exercise any powers which may be properly exercised by a board of directors of NNC, its principal operating subsidiary Nortel Networks Limited and its other Canadian subsidiaries that filed for creditor protection under the CCAA. This follows Nortel's announcement on Aug. 9, 2012 that the Monitor, after taking into account several factors arising from the advanced stage of the CCAA proceedings, had determined the expense and resources required to comply with NNC and NNL's quarterly and annual public reporting requirements could no longer be justified from the standpoint of the best interest of their creditors. Consequently, NNC and NNL will discontinue preparing and filing quarterly and annual financial statements and all other periodic disclosure documents under applicable Canadian and U.S. securities laws effective as of the filing deadlines for their third quarter reporting obligations, being Nov. 14, 2012 in the United States and Nov. 29, 2012 in Canada. As indicated in the Aug. 9, 2012 announcement, the Boards of Directors and executive officers including the Chief Financial Officer of NNC, NNL and the other Applicants have resigned effective today, upon the issuance of the Order. Two of these former executive officers will continue as employees of NNL and pursuant to the Order are designated authorized representatives of each of the Applicants to act on behalf of the Applicants for the continued day-to-day operation of the Applicants, solely as the Monitor may direct. The principal remaining activities include completion of the creditor claims processes, resolution of the sale proceeds allocation dispute and approval and implementation of a plan of arrangement. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc. and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. NRG INC: Moody's Affirms 'Ba3' CFR/PDR, Outlook Remains Negative ---------------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to $54,000,000 Fort Bend County Industrial Development Corporation Industrial Revenue Bonds (NRG Energy, Inc. Project) Series 2012 and a Baa3 rating to $73,100,000 Fort Bend County Industrial Development Corporation Industrial Revenue Bonds (NRG Energy, Inc. Project) Series 2012B, (collectively, the New IRBs). Concurrent with the rating assignment, Moody's has affirmed NRG Energy, Inc.'s (NRG) Corporate Family Rating and Probability of Default Rating at Ba3; its senior secured rating at Baa3; and its senior unsecured rating at B1. The rating outlook for NRG continues to be negative. Ratings Rationale The Baa3 rating of the new IRBs is based upon the secured guaranty provided by NRG Energy, Inc. (NRG: Ba3 Corporate Family Rating; negative outlook) and certain of its subsidiary guarantors (NRG Grantors), which will be on parity with NRG's other senior secured debt rated Baa3. Proceeds from the bond offerings will be loaned to NRG to finance and/or reimburse the company for the construction and improvement costs at the W.A. Parish Electric Generating Station, a 2,490 megawatt (MW) coal-fired generating plant in Texas. The bonds will be guaranteed by NRG, and by upstream guarantees provided by the NRG Grantors, operating subsidiaries of NRG. The secured guarantee will rank on parity with NRG's other senior secured debt, including its senior secured revolver and term loan and other senior secured bonds. To perfect this security interest, Moody's understands that the trustee for the bonds will be joined as a secured party under the NRG Collateral Trust Agreement. In light of the negative outlook at NRG, investors in NRG's senior secured securities, including the new IRBs, should understand that, if NRG's Corporate Family Rating (CFR) and Probability of Default Rating (PDR) were to change to B1 from the current Ba3, the ratings on the senior secured obligations, including the new IRBs, would in all likelihood be downgraded below investment grade, most likely to Ba1 from the current Baa3. Conversely, should NRG's CFR and PDR remain at Ba3, the ratings on the company's senior secured obligations, including the new IRBs would in all likelihood remain at Baa3. Moody's intends to reassess the CFR, PDR and outlook for NRG at or near the time of the shareholder vote for the proposed merger with GenOn Energy, Inc (GEN: B2 Corporate Family Rating; positive outlook), when Moody's would expect to have more definitive information about the post- merger financial strategy. The rating affirmation primarily reflects NRG's diversified fleet of wholesale power generation assets and the relatively strong historical credit metrics based upon margins underpinned by hedges, contracts, and sales from its retail business. These positive factors are balanced against recent operating results, which have been negatively impacted by weak power prices, reduced volumes and the continued decline in the price of natural gas. For example, Moody's calculates that cash flow (CFO pre-WC) to debt declined to 10.4% for the twelve months ending 06/30/2012 as compared to the 2009-2011 three year average of 16.4%. Cash flow coverage of interest was 2.5x for LTM 06/30/2012, substantially lower than the three year average of 3.3x. Moody's recognizes that some of the deterioration in financial performance can be attributed to the incurrence of approximately $2.7 billion of project level debt to finance the construction of solar generation plants and a natural gas fired plant being built in the Western US, the majority of which will be completed in the 2013-2014 timeframe. Moody's consolidates all debt obligations when calculating NRG's credit metrics. Moody's acknowledges that all of these projects have long-term power purchase agreements in place with investment grade counterparties. Moody's views these contracts favorably from a credit perspective since they will provide a high degree of cash flow certainty over the next several years. Even if one excludes the $2.7 billion of project level debt, Moody's calculates that key credit metrics show deterioration to levels consistent with a weak "Ba" unregulated power company as cash flow to debt approximates 13% for both 2011 and the 12 months ending 06/30/2012. The rating affirmation further considers the company's proposed stock-for-stock merger with GEN, a financially weaker company that has historically generated most of its cash flow from coal fired plants that are challenged by coal-to-gas switching and increasing environmental mandates. The rating affirmation acknowledges that the merger plan includes at least $1 billion of debt reduction from the combined balance sheet efficiencies and approximately $300 million per annum in expected cost savings, including $100 million reduction in interest cost, $175 million in corporate expense savings and $25 million in operational synergies. If accomplished, these savings will improve consolidated earnings and cash flow. The rating affirmation also considers the benefits of increased size and diversification, along with the company's ability to lower the risk of growing its retail business by acquiring generating assets in key target markets, including the mid-Atlantic region. NRG's negative rating outlook reflects the margin erosion that is occurring in both NRG's wholesale and retail operations, which is contributing to financial performance more in line with a strong "B" rated unregulated power issuer when considering all recourse and non-recourse debt. The negative rating outlook further considers the company's very large capital spending program anticipated over the next few years, particularly when compared to NRG's market capitalization. While the GEN merger enables NRG to acquire substantial generating capacity in an important platform in PJM at an attractive price, the negative outlook recognizes the weaker condition of its merger partner that includes the addition of $5 billion of incremental debt (assuming that $1 billion of debt is prepaid). In addition, the negative near-to-mid-term fundamentals in the unregulated power sector are more pronounced in GEN's markets than in NRG's core Texas market. In light of NRG's negative rating outlook, the substantial capital investment program, the continued weak market for unregulated power in most regions, and a pending merger with financially weaker GEN, limited prospects exist for NRG's ratings to be upgraded in the near-term. However, to the extent that management is able to complete the construction of its numerous projects on a timely basis, to demonstrate the ability to integrate GEN while achieving the projected cost savings, to stabilize or modestly improve unregulated power margins, to reduce future capital spending to a more manageable level, and to incrementally retire debt, the rating outlook could stabilize. NRG's ratings could be downgraded if material problems surface with the company's growth strategies, if weaker than expected market conditions persist across NRG's generation fleet, if the cost savings and synergies of the proposed merger and margin enhancement are not expected to be realized or are expected fall short of credit metrics consistent with a low "Ba" CFR or if the company materially alters its capital allocation program in a way detrimental to creditors. Issuer: NRG Energy, Inc Ratings Assigned: $54,000,000 Fort Bend County Industrial Development Corporation Industrial Revenue Bonds Series 2012: Baa3, LGD2 - 15% $73,100,000 Fort Bend County Industrial Development Corporation Industrial Revenue Bonds Series 2012B: Baa3, LGD2 - 15% Ratings Affirmed Corporate Family Rating & Probability of Default Rating: Ba3 Outlook: Negative Ratings Affirmed, LGD Estimates Revised: Senior Unsecured to B1, LGD4 -- 66% from B1, LGD4 - 67% Senior Secured RC and TL to Baa3, LGD2 - 15% from Baa3, LGD2 ? 16% Sussex County, Delaware Recovery Zone Facility Bonds Sr Secured Bonds to Baa3, LGD2 - 15% from Baa3, LGD2 - 16% Chautauqua (Cnty of) NY, Ind. Dev. Agency; Sr Sec Revenue Bonds due 2042 to Baa3, LGD2 - 15% from Baa3, LGD2 - 16% The Delaware Economic Dev. Auth: Sr Sec Revenue Bonds due 2045 to Baa3,LGD2 - 15% from Baa3, LGD2-16% Headquartered in Princeton, New Jersey, NRG Energy, Inc. (NRG) owns and operates a portfolio of power-generating facilities, primarily in Texas and the Northeast, South Central and Western regions of the US. NRG also has ownership interests in generating facilities in Australia. In total, as of December 31, 2011, NRG owns approximately 25,135 megawatts (MW) of electric generation, and has 1,410 MW under construction. NRG's retail businesses, Reliant Energy, Green Mountain Energy, and Energy Plus Holdings combined serve more than 2 million residential, business, commercial and industrial customers in Texas and, increasingly in select markets in the northeast US. The principal methodology used in this rating was Unregulated Utilities and Power Companies published in August 2009. OAKLAND POLICE DEPARTMENT: Plaintiffs Seek Receivership ------------------------------------------------------- Erin Geiger Smith at Reuters repots that a group of plaintiffs in a long-running civil rights complaint involving allegations of police brutality asked a federal court to put the Oakland Police Department into receivership. The plaintiffs, who are parties to a consent decree to resolve the allegations, asked U.S. District Judge Thelton Henderson of Oakland to take action "because less drastic means have failed to bring the city into compliance with reforms mandated," a court filing said, according to Reuters. The report relates that the request came as part of litigation first filed in 2000 by a group consisting largely of African- American plaintiffs that complained about a pattern of civil rights abuses by members of the police department, including false arrests and excessive use of force. Under a 2003 settlement agreement, the Northern California city of about 400,000 people agreed to dozens of police reforms intended to improve supervision, training and accountability within the department, the report notes. Reuters says that the court filing said Oakland and its police department had since "chronically failed to come into compliance with critical tasks mandated" by the 2003 settlement and subsequent amended agreements. Henderson, a veteran judge, has been struggling for nearly 10 years to implement police reforms in Oakland, the report notes. The report discloses that John Burris, an attorney for the plaintiffs, said plaintiffs were "fed up with a lack of progress" and that "if an outside person comes in, we can bring about real change sooner rather than later." PATRIOT COAL: Sierra Opposing Extension of Deadline --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Sierra Club will appear in bankruptcy court on Oct. 11 opposing efforts by coal producer Patriot Coal Corp. to extend deadlines for installing equipment to remove selenium contamination from water discharges at some of its mines. According to the report, as the result of a lawsuit brought in 2006 by private environmental groups, a federal district court in West Virginia eventually approved a consent decree in which Patriot agreed to a May 2013 deadline for installing equipment costing about $29 million. Last month Patriot filed papers asking the bankruptcy court to modify the so-called automatic stay so it could petition the West Virginia court for an extension of the deadline. Three environmental groups, including the Sierra Club, filed opposition papers in bankruptcy court last week. The environmentalists want the bankruptcy court to allow all aspects of the West Virginia suit to proceed, not simply the request by Patriot for more time to complete the cleanup. The report relates the groups said in their bankruptcy court filing that Patriot "has not treated a single drop of water to remove selenium" at a mine involved in the lawsuit. The environmentalists argue that the obligation to clean up selenium won't be wiped out by bankruptcy because violation of environmental law continues. The Oct. 11 hearing may not be held in New York for reasons having nothing to do with selenium. The Manhattan judge is considering how to rule on a request by the U.S. Trustee and a union to move the bankruptcy to West Virginia, where most of the mines are located, or to St. Louis, the head office. The judge didn't say how or when she will rule. The report notes that Patriot's $200 million in 3.25% senior convertible notes due 2013 last traded on Oct. 1 for 14 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The Bloomberg report discloses that the $250 million in 8.25% senior unsecured notes due 2018 traded at 1:22 p.m. on Oct. 5 for 49.5 cents on the dollar, Trace reported. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The case has been assigned to Judge Shelley C. Chapman. The U.S. Trustee appointed a seven-member creditors committee. PATRIOT COAL: Faruqi & Faruqi Probes Potential Securities Fraud --------------------------------------------------------------- Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential securities fraud at Patriot Coal Corporation. The investigation focuses on whether the Company and its executives violated federal securities laws by failing to disclose that: (1) certain Patriot Coal officers had disclosed misguiding statements regarding the Company's business prospects; (2) as such, the Company had violated Generally Accepted Accounting Principles and U.S. Securities and Exchange Commission ("SEC") rules by failing to correctly account for costs associated with Court-ordered remediation obligations related to the Company's selenium water treatment requirements; (3) Patriot Coal officers had improperly capitalized these costs instead of recording them as expenses, thereby overstating the Company's financial results. In response to comments received from the SEC regarding the Company's accounting for the Court-ordered remediation costs, defendants were forced to reveal that the Company's previously issued consolidated financial statements for the years ended Dec. 31, 2011 and Dec. 31, 2010 could no longer be depended upon. Moreover, Patriot Coal officers admitted that it was necessary to restate the Company's previously issued consolidated financial statements to accrue a liability and recognize a loss for the estimated costs of installing the Court-ordered water treatment facilities. On July 9, 2012, Patriot Coal shocked the market when it announced that it and substantially all of its wholly owned subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code. When the true state of the Company's business health became public, Patriot Coal's shares dropped 72%, from a closing pricing of $2.19 on July 6, 2012, to a closing price of $0.61 at the end of the day on July 9, 2012. Request more information now by clicking here: www.faruqilaw.com/PCXCQ The firm says, "Take Action If you purchased Patriot Coal Corporation stock or options between Oct. 21, 2010 and July 6, 2012 and would like to discuss your legal rights, visit www.faruqilaw.com/PCXCQ You can also contact us by calling Richard Gonnello or Francis McConville toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to rgonnello@faruqilaw.com or fmcconville@faruqilaw.com Faruqi & Faruqi, LLP also encourages anyone with information regarding Patriot Coal Corporation's conduct to contact the firm, including whistleblowers, former employees, shareholders and others." About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The case has been assigned to Judge Shelley C. Chapman. The U.S. Trustee appointed a seven-member creditors committee. PATRIOT COAL: Time to Remove Pending Civil Actions Extended ----------------------------------------------------------- On Oct. 5, 2012, the Bankruptcy Court extended the time during which Patriot Coal Corporation, et al., may file notices of removal with respect to any civil action pending as of the Petition Date and covered by 28 U.S.C. Section 1452 is extended through and including the effective date of any plan of reorganization in the Debtors' Chapter 11 cases. As reported in the TCR on Oct. 2, 2012, the Debtor told the Court that given the number of judicial and administrative proceedings covered by 28 U.S.C. Section 1452 and the variety of claims, as well as the enormous amount of time and effort the Debtors have had to devote since the Petition Date to resolving other significant aspects of the Chapter 11 cases, thy have not been able to analyze and make a determination regarding the removal of each of the pre-petition actions. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The case has been assigned to Judge Shelley C. Chapman. The U.S. Trustee appointed a seven-member creditors committee. PENNFIELD CORPORATION: Files for Ch. 11 With Offer From Carlisle ---------------------------------------------------------------- Pennfield Corporation and Pennfield Transport Company filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 12-19430 and 12-19431) on Oct. 3, 2012, in Philadelphia. Founded in 1919, Pennfield is a Lancaster, Pennsylvania-based manufacturer of bulf and bagged feeds for dairy, equine and other commercial and backyard livestock. The company owns and operates three production mills located in Mount Joy, Martinsburg, and South Montrose, in Pennsylvania. The company has 112 employees. The company recorded a net loss of $3.37 million on net sales of $210.8 million in 2011, compared with a net loss of $3.33 million on $150.4 million of net sales in 2010. As of Sept. 8, 2012, the Debtor's assets consisted of net cash of $125,000, accounts receivable of $4.94 million, total inventories of $3.15 million, prepaid expenses of $537,000, property, plant and equipment of $7.02 million, and other assets of $861,000. As of the Petition Date, Pennfield's total consolidated funded senior debt obligations were $9.99 million. Fulton Bank N.A. is owed $5.95 million under a revolving credit facility. Fulton is also owed $774,000 under a term loan, $1.545 million under demand revenue bonds, and $950,000 under a new line of credit. Unsecured debt includes $500,000 owed to Risser Grain, and the pension plan is underfunded by $7.70 million. There are also $8.60 million of unsecured trade payables. Pennfield said its current situation is due to a combination of long-term industry trends, short-term commodity volatility, and substantial outstanding liabilities. The dairy industry in Pennsylvania has been slowly contracting as consumption declines and herd productivity increases. In June 2012, the Debtors began a strategic review of their operations and considered a variety of strategic options to maximize value through strategic business initiatives, capital restructurings and/or asset dispositions involving all or part of the feed business. Following several weeks of continuing diligence and marketing efforts, the Debtors instructed prospective bidders to submit their final proposals no later than Sept. 20, 2012, which proposals were to include a mark-up of a form purchase agreement prepared by the Debtors. The Debtors, in conjunction with Lakeshore Food Advisors, LLC, evaluated the terms and benefits of each proposal, as well as the benefits of other alternatives. At this early stage of the sales process, the Debtors, in their business judgment, concluded that the asset purchase agreement submitted by Carlisle Advisors, LLC, offered advantageous terms and significant economic benefit to the Debtors with respect to the sale of the Debtors' assets. Additionally, multiple parties have made bids for the Debtors' assets, setting the stage for competitive bidding and increased value for the Debtors' estates. The Debtors will be filing a motion seeking initially, the entry of an order approving bidding procedures, the form of agreement, a termination payment for Carlisle (in the event that a higher and better bid is presented and accepted), and notice procedures for the scheduling of an auction and a hearing to approve the sale of the Debtors' assets, and the assumption and assignment of certain executory contracts and unexpired leases and the assumption of certain liabilities by the Carlisle or, if applicable, to the bidder that submits a higher or otherwise better bid. The only assets of Pennfield not being marketed for sale by LFA are the 165 acre farm in York County and the 3.1 acres of land and buildings located on Rohrestown Road, Lancaster that was the former Corporate Offices of Pennfield. Pennfield intends to sell both the York Farm and the Lancaster Office Building and utilize the proceeds to fund its chapter 11 plan. Carlisle has also agreed to provide a $2.0 million DIP Loan. Attorneys at Maschmeyer Karalis P.C., in Philadelphia, serve as bankruptcy counsel. Skadden, Arps, Slate, Meagher & Flom LLP is the special counsel. Groom Law Group, Chartered, is the employee benefits counsel. AEG Partners LLC is the financial advisor. Lakeshore Food Advisors, LLC, is the investment banker. PENNFIELD CORP: Meeting to Form Creditors' Panel Set for Oct. 12 ---------------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, will hold an organizational meeting on Oct. 12, 2012, at 10:30 am in the bankruptcy case of Pennfield Corporation. The meeting will be held at: Office of the United States Trustee 833 Chestnut Street, Suite 501 Philadelphia, PA 19107 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. PETCO ANIMAL: Moody's Affirms 'B2' Corp. Family Rating ------------------------------------------------------ Moody's Investors Service affirmed Petco Animal Supplies, Inc.'s ("Petco") B2 Corporate Family Rating and assigned a Caa1 rating to the proposed $550 million Senior PIK Toggle Notes due 2017 ("Proposed Notes") to be issued by Petco's parent company, Petco Holdings, Inc. (Petco Holdings). Moody's also upgraded Petco's existing debt. The rating outlook is stable. Proceeds from the Proposed Notes along with balance sheet cash will be used to fund a $603 million distribution to shareholders. The Proposed Notes will be senior, unsecured obligations of Petco Holdings, and will not be guaranteed by any entity in the corporate group. Petco Holdings is required to pay interest entirely in cash so long as there is restricted payment capacity for upstream dividends at the Petco level under the agreements governing Petco's existing senior secured credit facilities and existing senior unsecured notes. The rating is subject to review of final documentation. Upon completion of the transaction, Petco's Corporate Family and Probability of Default ratings will be moved to Petco Holdings. Moody's took the following rating actions for Petco Holdings, Inc.: -- Senior unsecured PIK Toggle Notes due 2017 assigned Caa1 (LGD 6, 91%) Moody's took the following rating actions for Petco Animal Supplies, Inc.: -- Corporate Family Rating affirmed at B2; -- Probability of Default Rating affirmed at B2; -- Senior secured term loan due 2017 upgraded to Ba3 (LGD2, 29%) from B1 (LGD3, 38%); -- Senior unsecured notes due 2018 upgraded to B3 (LGD5, 71%) from Caa1 (LGD 5, 85%) Ratings Rationale Petco's B2 Corporate Family Rating reflects its high financial leverage and aggressive financial policies that stem from the 2006 acquisition of the company and sizeable dividend payments to its owners, TPG Capital ("TPG"), Leonard Green & Partners, L.P. ("LGP") and Freeman Spogli & Co. ("FS & Co."). The current proposed dividend of $603 million will reduce the company's financial flexibility, and comes on the heels of the $700 million dividend paid in December 2010. The 2010 dividend alone returned over 90% of the equity invested in the company at the time of the buyout. Pro forma for the proposed transaction, Petco's lease- adjusted debt/EBITDA will increase to over 6.75 times for the latest twelve months ended July 28, 2012, up from 6.2 times. As a result, there is very limited cushion in the rating for incremental term debt increases or adverse operating performance at this time. Petco's ratings are supported by its demonstrated ability to sustainably grow revenue, expand profitability, and generate positive free cash flow over the past several years, despite weak economic conditions. The pet products industry in general remains relatively recession-resilient, driven by factors such as the replenishment nature of consumables and services and increased pet ownership. The company's substantial market presence, well known brand, and broad national footprint also provide ratings support. Petco's liquidity is expected to remain good, as internally generated cash is expected to be sufficient to cover cash flow needs over the next twelve months, including capital spending for growth and ongoing efficiency initiatives. Consistent with Moody's Loss Given Default Methodology, the upgrades of Petco's senior secured term loan and senior unsecured notes reflect the increase in debt cushion in the capital structure as a result of the proposed issuance of structurally subordinated Petco Holdings debt. Although unlikely in the near term, Petco's ratings could be upgraded if the company continues to grow sales and profitability while demonstrating the ability and willingness to maintain more conservative financial policies, particularly through material debt reduction. Specific metrics include achieving and maintaining debt/EBITDA below 5.25 times and EBITA/interest expense above 1.75 times. Petco's ratings could be downgraded if the company fails to reduce leverage as expected, either due to a deterioration in operating performance or higher debt, particularly if debt were to increase through any additional near-term shareholder-friendly activities. A deterioration of Petco's good liquidity could also lead to a ratings downgrade. Quantitatively, a downgrade could occur if debt/EBITDA exceeded 6.5 times over a prolonged period or if EBITA/interest expense is not sustained above 1.25 times. The principal methodology used in rating Petco was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Petco Animal Supplies, headquartered in San Diego, California and San Antonio, Texas, is a specialty retailer of premium supplies, food, and services for household pets. The company currently operates 1,183 stores in 50 states. Revenues are approximately $3.3 billion. PLAZA NORTH: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: The Plaza North Tower Commercial Condominium Association, Inc. 1021 Oak Street Jacksonville, FL 32204 Bankruptcy Case No.: 12-13628 Chapter 11 Petition Date: October 4, 2012 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: Roman V. Hammes, Esq. WOLFF HILL MCFARLIN & HERRON PA 1851 West Colonial Drive Orlando, FL 32804 Tel: (407) 648-0058 Fax: (407) 648-0681 E-mail: rhammes@whmh.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb12-13628.pdf The petition was signed by Amir Ladan, president. PRO MACH: Moody's Affirms 'B2' CFR/PDR; Outlook Stable ------------------------------------------------------ Moody's Investors Service affirmed Pro Mach, Inc's. B2 Corporate Family and Probability of Default Ratings ("CFR" and "PDR" respectively). At the same time the rating agency affirmed B2 ratings of the company's amended and upsized first lien bank credit facilities consisting of a $240 million term loan (increased from $215 million ) and a $50 million revolving credit facility (increased from $35 million). The ratings outlook remains stable. The additional borrowings under the term loan will be used to fund several pending add on acquisitions. The larger revolving credit facility loan, which remains undrawn, will increase available liquidity. Ratings affirmed: Corporate Family Rating, B2 Probability of Default Rating, B2 $50 million first lien revolving credit facility, B2, (LGD-3 49%) $240 million first lien term loan, B2, (LGD-3 49%) The ratings outlook stable. Ratings Rationale Pro Mach's B2 CFR and PDR considers the company's modest revenue scale in a fragmented industry, leveraged capital structure, competitive offering across a range of equipment, and significant level of profitability earned in aftermarket products and services. Although demand for new equipment tends to be cyclical, the company's installed base of equipment facilitates material cash flows from the less volatile and higher margin aftermarket segment. Similarly, while the company's business base is principally within North America, its primary end-markets in the food, beverage, consumer products and pharmaceuticals industries and diverse customer base provide some stability to ongoing demand. The engineered nature of equipment and services combined with the company's established field presence and successful equipment operating record have led to strong customer relationships and constrained offshore competition. The rating benefits from the company's track record of sustained profitability through the downturn and solid margins. Moreover, prospects for continued free cash flow generation are supported by limited working capital requirements and minimal capital expenditures requirements. Pro Mach has been assembled through a series of transactions and is expected to continue to grow through acquisitions. Proceeds from the upsizing of its credit facilities and in particular the expansion of its Term Loan B by $25 million are to fund several small acquisitions. The increase in the company's revolver to $50 million from $35 million gives the company more room to finance future acquisitions. The revolver is expected to be unused at close. The terms and conditions of its credit facilities are being amended in a way that should be more accommodative with the company's acquisition based growth strategy. Acquired operations have allowed the company to provide integrated solutions to its customers as well as the opportunity to rationalize administrative and corporate costs. Strategically, Moody's would expect the company to consider further transactions which may affect the pace of future debt reduction. The stable outlook reflects the company's good interest coverage but typical for the rating category on a run-rate basis and the expectation that the company's leverage metrics will improve further as its historical acquisitions and base business continue to perform well. The outlook is further supported by good liquidity. The ratings and outlook could encounter downward pressure should prospects for the company's revenues and margins appreciably soften and result in higher leverage and weaker coverage metrics. Quantitatively, this could be evidenced through: EBITA margins of under 10%, EBITA/interest below 1.5 times, debt/EBITDA above 6 times, and free cash flow to debt under 5%. Conversely, attaining greater scale in its operations and geographic diversification as well as accelerated debt reduction achieved through free cash flow generation and improving profitability would be viewed positively. Debt/EBITDA significantly below 3.5 times, EBITDA/interest greater than 4.5 times and FCF/debt consistently above 10% could lead to higher ratings. The B2 (LGD-3, 49%) ratings assigned to the bank obligations reflect their expected loss from the application of a PDR of B2 and expected recovery given their senior secured status. Although the bank debt will have seniority over unsecured claims as first lien secured creditors, it will constitute over 90% of claims in the liability waterfall, contributing to their instrument ratings matching that of the overall corporate family rating. The principal methodology used in rating Pro Mach was the Global Heavy Manufacturing Industry Methodology published in November 2009. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Pro Mach, Inc, headquartered in Loveland, OH, manufacturers a range of packaging equipment and provides related aftermarket parts, services and consumables used across the food, beverage, household goods and pharmaceutical industries. Annual revenues are expected to exceed $360 million. Pro Mach is owned by an affiliate of The Jordan Company and certain members of Pro Mach's management team. PW COMMERCIAL: Liable to Claims Against Pinewave Affiliate ---------------------------------------------------------- Bankruptcy Judge William J. Lafferty, III, overruled objections filed by Eric Au and Edwin Law, former shareholders in PW Commercial Construction Company Inc., to the Proof of Claim filed by Chateau de Louis LLC, No. Nine, LLC, and Real Enterprises, LLC. The Claimants hold a $1.8 million state court judgment against Pinewave Construction, Inc., following an arbitration of disputes concerning the construction of a condominium and commercial real estate project in San Francisco. They timely filed a proof to claim against PWCCI, asserting that PWCCI is also liable on the debt based on successor liability and alter ego theories. The Objectors succeeded to the rights of the Trustee in PWCCI to object to the Claim by the terms of a Settlement Agreement approved by the Bankruptcy Court on June 2, 2010. The Objectors dispute that PWCCI is either the successor to PWC, or is an alter ego of PWC, and thus liable for PWC's debts. Judge Lafferty, however, held that PWCCI is the successor to PWC for the purpose of imposing liability against PWCCI on account of debts owing by PWC, because (a) PWCCI is a "mere continuation" of PWC, and (b) the transfer of assets from PWC to PWCCI constituted a fraud on creditors of PWC, including the Claimants. A copy of the Court's Oct. 4, 2012 Memorandum Decision is available at http://is.gd/VKPhZAfrom Leagle.com. PW Commercial Construction, Inc., was part of a family of related companies that performed tasks related to the construction business during the period 2004 through 2007. PWCCI's financial condition deteriorated during the latter part of 2006, and the company filed a voluntary Chapter 11 petition (Bankr. N.D. Calif. Case No. 07-40608) on Feb. 28, 2007, listing under $1 million in both assets and debts. A copy of the petition is available at http://bankrupt.com/misc/canb07-40608.pdf The case was converted to one under chapter 7 by Order entered Dec. 5, 2007. John Kendall was appointed trustee, and continues to serve in that role. RAHA LAKES: Real Estate Company Files Chapter 11 in Los Angeles --------------------------------------------------------------- Raha Lakes Enterprises, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-43422) on Oct. 3 in Los Angeles. The Debtor, a single-asset real estate company, estimated assets of at least $10 million and debt of at least $1 million. The company's principal asset is at 900 South San Pedro Street in Los Angeles. The largest unsecured claims listed in the filing are a debt of $250,000 owed to Kamran Shakib and $98,271 owed to the Los Angeles County Tax Collector. The company also listed unsecured trade debt. Kayhan Shakib and Roshanak Rahnama are equity holders of the Debtor, according to court records. According to the case docket, the Debtor is required to submit its schedules of assets and liabilities, and statement of financial affairs by Oct. 17. The Debtor is represented by: Michael S Kogan, Esq. KOGAN LAW FIRM APC 1901 Avenue of the Stars Ste 1050 Los Angeles, CA 90067 Tel: 310-432-2310 E-mail: mkogan@koganlawfirm.com REALOGY INC: Moody's Lifts CFR to Caa1; Under Review for Upgrade ---------------------------------------------------------------- Moody's Investors Service upgraded certain debt ratings of Realogy, Inc., including the Corporate Family to Caa1, Probability of Default and senior unsecured to Caa2 and senior subordinated to Caa3. In a related action, Moody's placed the corporate family, probability of default and senior secured ratings under review for upgrade. Rating Rationale The rating upgrades incorporate Moody's view that Realogy is positioned to benefit as the number of residential home sales and the average price of each transaction in the U.S. are expected to continue to grow modestly through 2013. Following several years of focus on cost management, and five years since its revenue peak, Moody's expects Realogy will experience improvement in financial results as existing home sale volumes and prices improve. This is because Realogy has about a 25% share of the residential brokerage market as well as the inherent operating leverage in its business model. Based on forecasts published by the National Association of Realtors (NAR) and Fannie Mae, Moody's anticipates increasing sales and EBITDA for Realogy in 2012 (Moody's adjusted) to about $4.4 billion and $740 million to $750 million, respectively, and for 2013 sales growing by about 4% to 5% (to $4.6 billion) and with some margin expansion with EBITDA of at least $800 million. "The improved operating results from better market conditions do not alleviate the need for capital structure changes at Realogy", noted Edmond DeForest, Moody's Senior Analyst. Specifically, annual interest expense of almost $700 million per year cannot be met from existing sources of liquidity, including internally generated cash flow, cash and existing bank credit lines. Consequently, the default risk remains elevated absent a significant reduction of debt in the capital structure, and is the reason the corporate family rating remains at Caa1. The ratings review is driven by Realogy's proposed primary equity offering and the related conversion of subordinated debt at par which, if completed as contemplated by the company, should result in an improved capital structure. The proposed $1 billion of new equity through an Initial Public Offering (IPO)and $2 billion subordinated debt conversion would improve leverage and liquidity. Debt (Moody's adjusted) would drop by over $3 billion (to about $5.84 billion) and annual interest expense should decline by over half. The lower interest burden combined with the anticipated improvements in existing home sale market conditions should result in Realogy generating some modest free cash flow. During the review, Moody's will assess the impact of the changes in Realogy's capital structure following the planned IPO of equity and the debt conversion, and the potential for debt reduction and cash flow increases with improving conditions in the residential real estate market. Following completion of the IPO and the subordinated debt conversion and, depending on the allocation of equity proceeds to debt reduction and the timing thereof, the corporate family, probability of default and certain senior secured ratings could be raised by one notch. The improved liquidity as the company could return to generating free cash flow, and with the pressure of near term debt maturities abated, could also result in an improved speculative grade liquidity rating. Ratings on the senior unsecured debt would not likely change, given the probable allocation to debt reduction. The following ratings were upgraded and put under review for possible upgrade: Corporate family Rating, to Caa1 from Caa2 Probability of Default Rating, to Caa2 from Caa3 The following ratings (LGD assessments) were upgraded: 11.5% senior unsecured notes due 2017, to Caa2 (LGD 3, 44%) from Caa3 (LGD 3, 44%) 12% senior unsecured notes due 2017, to Caa2 (LGD 3, 44%) from Caa3 (LGD 3, 44%) 10.5% senior unsecured cash pay notes due 2014, to Caa2 (LGD 3, 44%) from Caa3 (LGD 3, 44%) 11.00%/11.75% senior unsecured toggle notes due 2014, to Caa2 (LGD 3, 44%) from Caa3 (LGD 3, 44%) 11% senior subordinated convertible notes due 2018, to Caa3 ( LGD 5, 70%) from Ca (LGD 5, 70%) 12.375% senior subordinated notes due 2015, to Caa3 ( LGD 5, 70%) from Ca (LGD 5, 70%) The following ratings (LGD assessments) were put under review for possible upgrade: Senior secured revolving credit facility due 2016, B1 (LGD 1, 6%) Senior secured term loan due 2016, B1 (LGD 1, 6%) Senior secured synthetic letter of credit facility due 2013/2016, B1 (LGD 1, 6%) Senior secured first lien notes due 2020, B1 (LGD 1, 6%) Senior secured notes (one and half lien) due 2020, Caa1 (LGD 2, 22%) Senior secured (one and half lien) notes due 2019, Caa1 (LGD 2, 22% from 24%) Second lien term loan due 2017, Caa2 (LGD 3, 33%) The following rating was affirmed: Speculative grade liquidity, SGL-4 The principal methodology used in rating Realogy Corp 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. Realogy is a provider of real estate and relocation services. The company operates in four segments: real estate franchise services, company owned real estate brokerage services, relocation services and title and settlement services. The franchise brand portfolio includes Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA, Sotheby's International Realty and Better Homes and Gardens Real Estate. Realogy is substantially owned and controlled by an affiliate of Apollo Management, L.P. RIVER CANYON: Hires Seter Vander Wall as Counsel on UWSD Claim -------------------------------------------------------------- River Canyon Real Estate Investments, LLC, asks the Bankruptcy Court to employ Seter Vander Wall, P.C., as special counsel. On Aug. 15, 2012, the United Water & Sanitation District filed Proof of Claim No. 30 in the bankruptcy case. UWSD asserts a fully secured claim in the amount of $9,756,355. UWSD asserts the basis for the Claim is Colo.Rev.Stat. Sec. 32-1-1001(1)(j)(I). The Debtor disputes the validity, priority and extent of the UWSD Claim. Title 32, Article 1 of the Colorado Revised Statutes is the "Special District Act". The Act provides the statutory framework for special districts in Colorado. UWSD is a special district created under the Act. The Debtor asserts and believes the employment of special counsel to assist lead counsel Sender & Wasserman, P.C., in the prosecution of the objection to USWD's claim and any and all other matters arising in the case relating to the Act and its interplay with the bankruptcy case is reasonable and appropriate. Kim Seter, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. SVW anticipates that Kim Seter will provide the bulk of the legal services rendered by the firm. Mr. Seter charges $295 per hour. Other SVW attorneys who may provide services bill at rates between $200 and $235 per hour. SVW bills its paralegals at the rate of $130 per hour. The Debtor has not provided a postpetition retainer to SVW. About River Canyon River Canyon Real Estate Investments, LLC, is the developer of the Ravenna residential real estate project in Douglas County, Colorado and the owner of The Golf Club at Ravenna, among other assets. River Canyon filed a Chapter 11 petition (Bankr. D. Colo. Case No. 12-20763) on May 23, 2012, in Denver as part of its settlement negotiations with lender Beal Bank Nevada, and to preserve the value of its assets. At Beal Bank's behest, Cordes & Company was named, effective Oct. 15, 2010, as receiver for the 643-acre real estate development with golf course in Douglas County, Colorado. The Debtor disclosed assets of $19.7 million and liabilities of $45.3 million in its schedules. The property and golf course are estimated to be worth $11 million, and secures a $45 million debt. Judge Elizabeth E. Brown presides over the case. The Debtor is represented by Sender & Wasserman, P.C., as its Chapter 11 counsel. Alan Klein, Glenn Jacks, Dan Hudick, and Bill Hudick own most of the Debtor. Mr. Jacks, which has a 12.8% membership interest, signed the Chapter 11 petition. ROOFING ATLANTA: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Roofing Atlanta, Inc. 1707 Enterprise Drive Suite D Buford, GA 30518 Bankruptcy Case No.: 12-75163 Chapter 11 Petition Date: October 4, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Cameron M. McCord, Esq. JONES & WALDEN, LLC 21 Eighth Street, NE Atlanta, GA 30309 Tel: (404) 564-9300 Fax: (404) 564-9301 E-mail: cmccord@joneswalden.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb12-75163.pdf The petition was signed by Wesley B. Davenport. ROOFING SUPPLY: Sr. Sec. Term Loan No Impact on Moody's 'B2' CFR ---------------------------------------------------------------- Roofing Supply Group, LLC's ("RSG") new $315 million Senior Secured Term Loan B will have no material impact on the company's B2 Corporate Family Rating. In addition, the B2 rating assigned to RSG's term loan, as well as the B3 rating on its Senior Unsecured Notes due 2020 will also be unaffected by this transaction. Moody's views the new term loan as essentially a $25 million increase to RSG's existing $290 million Senior Secured Term Loan B since the maturity date is not changing and remains May 31, 2019. Proceeds from this add-on will be used to repay most of the borrowings under RSG's asset-based revolving credit facility and to pay related fees and expenses. Terms and conditions for the $315 million Senior Secured Term Loan B will be similar to the existing term loan, but with lower pricing. Ratings Rationale RSG's B2 Corporate Family Rating reflects its leveraged capital structure. Following the proposed transaction, which Moody's views as relatively leverage neutral, pro forma debt-to-EBITDA for the 12 months ended June 30, 2012 will remain around 6.0 times. Interest coverage defined as (EBITDA-CAPEX)-to-interest expense will improve to 3.8 times from 3.1 times for the same period (all ratios incorporate Moody's standard adjustments). Although balance sheet debt is increasing modestly, cash interest payments will decrease by about $5.5 million due to the anticipated lower interest rate for the new Term Loan B relative to RSG's existing term loan. Moody's notes that interest coverage ratios will decline over the coming months, since RSG's more leveraged capital structure with higher amounts of debt and associated interest costs has been in place since May 31, when Clayton, Dubilier & Rice, LLC ("CD&R") completed its buyout of RSG. The rating, however, is supported by RSG's healthy operating margin. We also believe RSG faces no substantial threat of significant deterioration in operating performance as we view roofing as one of the few pockets of strength within the building products sector. Finally, the company's good liquidity profile provides some offset to RSG's highly levered capital structure. The principal methodology used in rating RSG was the Global Distribution and Supply Chain Services Industry Methodology published in November 2011. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA published in June 2009. Roofing Supply Group, LLC, headquartered in Dallas, TX, is one of the largest wholesale distributors by revenues of roofing supplies and related building materials in the United States. RSG provides products directly from the manufacturer to roofing contractors, home builders, retailers and other end users. Clayton, Dubilier & Rice, LLC through its respective affiliates is the primary owner of RSG. Revenues for the twelve months through June 30, 2012 totaled about $0.9 billion. RYAN INTERNATIONAL: Must File Plan and Disclosures by Nov. 16 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois extended Ryan International Airlines, Inc., et al.'s authority to use cash collateral through Nov. 16, 2012, 11:50 p.m., unless extended with the written consent of INTRUST Bank, pursuant to the budget for the period Sept. 28, 2012, through Nov. 16, 2012. This is the Court's Second Cash Collateral Extension Order. The First Cash Collateral Extension Order, entered July 11, 2012, extended the Debtors' authorization to use cash collateral through Sept. 30, 2012. The Court ordered the Debtor to file its Disclosure Statement and Plan of Reorganization no later than Nov. 16, 2012. All other terms of the Final Cash Collateral Order entered April 6, 2012, will remain in full force and effect. The Bankruptcy Court entered a separate order extending the Debtors' exclusive periods to file a plan of reorganization and to solicit acceptances of the Plan until Nov. 16, 2012, and Jan. 16, 2013, respectively. This is the second extension of the Debtors' exclusivity periods. About Ryan International Ryan International Airlines, Inc., filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 12-80802) in its hometown in Rockford, Illinois, on March 6, 2012. Ryan International, which filed for bankruptcy along with 10 affiliates, estimated assets and debts of up to $100 million. Ryan and its affiliates -- http://www.flyryan.com/-- provide commercial air charter services, to a diverse mix of customers including U.S., Canadian and British military entities, the Department of Homeland Security, the U.S. Marwill Service, leisure travelers, professional and college sports teams and an ad hoc charter services. Ryan has 460 employees, with the cockpit crew, flight attendants and dispatchers are represented by labor unions. Judge Manuel Barbosa presides over the case. Matthew M. Hevrin, Esq., and Thomas J. Lester, Esq., at Hinshaw & Culbertson LLP, serve as the Debtors' counsel. Silverman Consulting serves as financial advisor. The petition was signed by Mark A. Robertson, executive vice president. On March 19, 2012, the U.S. Trustee for Region 11 appointed the official committee of unsecured creditors of the Debtors. Brian J Lohan, Esq., Lydia R. H. Slaby, Esq., Matthew A. Clemente, Esq., Matthew G. Martinez, Esq., at Sidney Austin LLP, in Chicago; and Michael G. Burke, Esq., at Sidney Austin LLP, in New York City, represent the Creditors' Committee as counsel. INTRUST Bank, the prepetition lender owed $53.2 million, is represented by Thomas P. Sandquist, Esq., of WilliamsMcCarthy LLP; and Edward J. Nazar, Esq., at Redmond & Nazar LLP. The Bankruptcy Court later dismissed the Chapter 11 proceeding of Ryan 763K, a debtor-affiliate of Ryan International. RYAN INTERNATIONAL: Financing Period Extended Until Nov. 16 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois extended Ryan International Airlines, Inc., et al.'s authorization to continue their secured post petition financing until Nov. 16, 2012, 1:59 p.m., pursuant to a budget. The terms of the Final DIP Financing Order will remain in full force and effect. This is the second extension order of the Debtors' financing period. The first order entered July 11, 2012, extended the Debtors' financing period until Sept. 30, 2012. As reported in the TCR on March 30, 2012, the Debtors obtained final authority to up to $4.5 million under a revolving advance note from INTRUST Bank N.A., the Debtor's prepetition lender. The DIP Facility was set to mature no later than July 9, 2012. The DIP loan bears interest at 7% per annum. A loan origination fee of 0.005% of the principal amount of DIP Facility will also be charged. The DIP Lender will also be entitled to reimbursement of attorney's fees of not more than $50,000. About Ryan International Ryan International Airlines, Inc., filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 12-80802) in its hometown in Rockford, Illinois, on March 6, 2012. Ryan International, which filed for bankruptcy along with 10 affiliates, estimated assets and debts of up to $100 million. Ryan and its affiliates -- http://www.flyryan.com/-- provide commercial air charter services, to a diverse mix of customers including U.S., Canadian and British military entities, the Department of Homeland Security, the U.S. Marwill Service, leisure travelers, professional and college sports teams and an ad hoc charter services. Ryan has 460 employees, with the cockpit crew, flight attendants and dispatchers are represented by labor unions. Judge Manuel Barbosa presides over the case. Matthew M. Hevrin, Esq., and Thomas J. Lester, Esq., at Hinshaw & Culbertson LLP, serve as the Debtors' counsel. Silverman Consulting serves as financial advisor. The petition was signed by Mark A. Robertson, executive vice president. On March 19, 2012, the U.S. Trustee for Region 11 appointed the official committee of unsecured creditors of the Debtors. Brian J Lohan, Esq., Lydia R. H. Slaby, Esq., Matthew A. Clemente, Esq., Matthew G. Martinez, Esq., at Sidney Austin LLP, in Chicago; and Michael G. Burke, Esq., at Sidney Austin LLP, in New York City, represent the Creditors' Committee as counsel. INTRUST Bank, the prepetition lender owed $53.2 million, is represented by Thomas P. Sandquist, Esq., of WilliamsMcCarthy LLP; and Edward J. Nazar, Esq., at Redmond & Nazar LLP. The Bankruptcy Court later dismissed the Chapter 11 proceeding of Ryan 763K, a debtor-affiliate of Ryan International. RYAN INTERNATIONAL: Can Employ Plante & Moran as Tax Consultants ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois authorized Ryan International Airlines, Inc., et al., Plante & Moran PLLC to provide tax consulting services, nunc pro tunc to March 6, 2012. P&M will conduct an analysis of the sate composite income tax ramifications to Rubloff Ryan, LLC (the Assignment 1 Services"), and will prepare tax returns for the year ended Dec. 31, 2011, for Rubloff Ryan, LLC, and other related Debtor entities (the "Assignment 2 Services"). The Debtor believes that P&M is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code. P&M's estimate of its fee for the Assignment 1 Services is $85,000, while its estimate of its fee for the Assignment 2 Services is $125,000, plus all reasonable and necessary travel and out-of-pocket costs incurred. Both of these estimates exclude the addditional time required for employment and fee applications. P&M's customary hourly rates are: Partner $300-$450 Manager $200-$300 In-charge $150-$200 Staff $100-$150 About Ryan International Ryan International Airlines, Inc., filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 12-80802) in its hometown in Rockford, Illinois, on March 6, 2012. Ryan International, which filed for bankruptcy along with 10 affiliates, estimated assets and debts of up to $100 million. Ryan and its affiliates -- http://www.flyryan.com/-- provide commercial air charter services, to a diverse mix of customers including U.S., Canadian and British military entities, the Department of Homeland Security, the U.S. Marwill Service, leisure travelers, professional and college sports teams and an ad hoc charter services. Ryan has 460 employees, with the cockpit crew, flight attendants and dispatchers are represented by labor unions. Judge Manuel Barbosa presides over the case. Matthew M. Hevrin, Esq., and Thomas J. Lester, Esq., at Hinshaw & Culbertson LLP, serve as the Debtors' counsel. Silverman Consulting serves as financial advisor. The petition was signed by Mark A. Robertson, executive vice president. On March 19, 2012, the U.S. Trustee for Region 11 appointed the official committee of unsecured creditors of the Debtors. Brian J Lohan, Esq., Lydia R. H. Slaby, Esq., Matthew A. Clemente, Esq., Matthew G. Martinez, Esq., at Sidney Austin LLP, in Chicago; and Michael G. Burke, Esq., at Sidney Austin LLP, in New York City, represent the Creditors' Committee as counsel. INTRUST Bank, the prepetition lender owed $53.2 million, is represented by Thomas P. Sandquist, Esq., of WilliamsMcCarthy LLP; and Edward J. Nazar, Esq., at Redmond & Nazar LLP. The Bankruptcy Court later dismissed the Chapter 11 proceeding of Ryan 763K, a debtor-affiliate of Ryan International. RYDER MEMORIAL: S&P Cuts Rating on $10MM Series 1996 Bonds to BB- ----------------------------------------------------------------- Standard & Poor's Ratings Services has lowered its long-term rating to 'BB-' from 'BB' on Puerto Rico Industrial, Medical and Higher Education, and Environmental Pollution Control Facilities Financing Authority's $10 million series 1996 bonds, issued for Ryder Memorial Hospital. The outlook remains negative at the lower rating. "The downgrade reflects our view of Ryder's weak balance sheet, which has been diminished by a $2.4 million malpractice claim, as well as negative operating results in fiscal 2011 and through July 2012. In fiscals 2010 and 2011, Ryder used its limited cash position to fund the malpractice reserve, weakening the balance sheet to levels commensurate with the lower 'BB-' rating. Ryder will pay the $2.4 million claim in annual installments over three years beginning in 2011 and has drawn $1.2 million on a line of credit through the first seven months of fiscal 2012 in order to cover the 2012 payment and other operating expenses. Although operating losses have lessened in fiscal 2011 and through July 2012, negative performance and weak debt service coverage continued, further supporting the lower rating when combined with the considerably weaker balance sheet," S&P said. "We expect that Ryder's balance sheet and coverage metrics will continue to be weak and that the operating losses will continue through 2012. Although there has been some improvement from May 2012 through July 2012, operations continue to be weak, and any further decline could result in a further downgrade to the 'B' category," said Standard & Poor's credit analyst Charlene Butterfield. "During the next one to two years, we could consider a lower rating if balance sheet metrics decline from current levels or if operating losses increase such that coverage decreases below 1x. A positive outlook during the next one to two years is unlikely given Ryder's weak balance sheet and operating performance, but we could consider an outlook change if days' cash is sustained above 60 days, and if Ryder achieves positive operations during the next one to two years," she noted. SANGUI BIOTECH: Accumulated Losses Cue Going Concern Doubt ---------------------------------------------------------- Sangui BioTech International, Inc., filed on Oct. 5, 2012, its annual report on Form 10-K for the fiscal year ended June 30, 2012. Sadler, Gibb & Associates, LLC, in Farmington, Utah, expressed substantial doubt about Sangui's ability to continue as a going concern. The independent auditors noted that the Company had accumulated losses of $31.9 million for the period from inception through June 30, 2012. The Company reported a net loss of $3.5 million on $14,949 of revenues in fiscal 2012, compared with a net loss of $1.6 million on $5,563 of revenues in fiscal 2011. Research and development expenses decreased by 67% to $104,413 during the year ended June 30, 2012, from $313,671 during the 2011 fiscal year. General and administrative expenses (including depreciation, amortization and professional fees) increased 153% to $3.6 million in 2012 from $1.4 in 2011. Included in Professional fees (2012 - $3.2 million; 2011 - $935,912) is the value of shares issued to consultants, employees and business partners of the Company under the Long Term Incentive Plan. The Company's balance sheet at June 30, 2012, showed $1.1 million in total assets, $168,351 in total current liabilities, and stockholders' equity of $959,374. A copy of the Form 10-K is available at http://is.gd/7Sm1ch Witten, Germany-based Sangui BioTech Internationl, Inc., formerly Sangui BioTech, Inc., was incorporated in Delaware on Aug. 2, 1996, and began operations in October 1996. Sangui GmbH, the only remaining subsidiary of SGBI, develops hemoglobi--based artificial oxygen carriers for use as blood additives, blood volume substitutes and variant products thereof. Sangui GmbH has also developed an anti-aging cosmetic and a number of related products aimed at improving oxygen supply to the skin. Enhanced oxygen supply is the key to improved wound healing; therefore the Company has extended its product portfolio to contain wound pads and other wound management products. The facilities of Sangui GmbH are located on the premises of the Forschungs- und Entwicklungszentrum of the University of Witten/Herdecke, Witten, Germany. SEARLE BLATT: Inventory, Trade Names to Be Sold for $200,000 ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that women's wear retailer Searle has given up on reorganizing. In Chapter 11 since January 2009, Searle admitted in a court filing that it's "impossible to continue to operate the business on a profitable basis." The company filed papers last week for authority to sell finished-goods inventory and intellectual property for $200,000 to an affiliate, Searle Brand Holdings LLC. According to the report, the price includes $175,000 for the inventory. There will be a hearing on Oct. 18 in U.S. Bankruptcy Court in Manhattan to secure approval of the sale. The order signed by the bankruptcy judge says higher and better offers will be accepted. Court papers say there is "no interest" for other assets such as leases, furniture and equipment. When the company filed for bankruptcy reorganization in January 2008, there were seven high-end women's apparel and accessory stores in Manhattan. The report relates that on Oct. 8, there are three on the east side of Manhattan, according to 321 Capital Partners LLC, which was hired to market the business. From inception of the Chapter 11 case through July, the accumulated net loss was $4.9 million on net sales of $55.5 million. About Tom Jones Searle Blatt & Co. and Tom Jones Inc., operate seven high-end women's apparel and accessory stores in Manhattan. The company also manufactures women's wear sold at upscale retailers. Tom Jones Inc. and Searle Blatt sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-10106 and 09-10107) on Jan. 7, 2009 in Manhattan. The Debtors are represented by Harold S. Berzow, Esq., at Ruskin Moscou Faltischek, P. C., in Uniondale, New York. Tom Jones disclosed assets and debt both less than $10 million. Claims originally included $1.2 million owed to two secured creditors. SMART ONLINE: Sells Add'l $350,000 Convertible Subordinated Note ---------------------------------------------------------------- Smart Online, Inc., sold an additional convertible secured subordinated note due Nov. 14, 2016, in the principal amount of $350,000 to a current noteholder upon substantially the same terms and conditions as the previously issued notes. The Company is obligated to pay interest on the New Note at an annualized rate of 8% payable in quarterly installments commencing Jan. 1, 2013. The Company is not permitted to prepay the New Note without approval of the holders of at least a majority of the aggregate principal amount of the Notes then outstanding. The Company plans to use the proceeds to meet ongoing working capital and capital spending requirements. The sale of the New Note was made pursuant to an exemption from registration in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended. About Smart Online Durham, North Carolina-based Smart Online, Inc., develops and markets a full range of mobile application software products and services that are delivered via a SaaS model. The Company also provides Web site and mobile consulting services to not-for-profit organizations and businesses. Cherry, Bekaert & Holland, L.L.P., in Raleigh, North Carolina, expressed substantial doubt about Smart Online'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 has a working capital deficiency as of Dec. 31, 2011. The Company's balance sheet at June 30, 2012, showed $1.49 million in total assets, $26.38 million in total liabilities, and a $24.88 million total stockholders' deficit. SPIRIT REALTY: S&P Raises Corporate Credit Rating to 'B' on IPO --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Spirit Realty Capital Inc. (Spirit) to 'B' from 'CCC+' and revised our outlook on the company to stable from developing. "We also withdrew our rating on the company's senior secured term loan after the company repaid and extinguished it," S&P said. "The upgrade reflects Spirit Realty Capital Inc.'s successful completion of an IPO of its common stock, which raised $465 million of net proceeds," said credit analyst Elizabeth Campbell. "The company also completed related contingent deleveraging transactions, as it detailed in S-11 filings. Specifically, Spirit retired a $729 million term loan outstanding that was due to mature in August 2013. The IPO reduced leverage; however, low debt coverage metrics contribute to our view of the company's financial risk profile as 'aggressive'." "The company materially reduced balance-sheet leverage through a recent IPO and related term loan repayment/conversion transaction. Despite our expectation for stability in portfolio occupancy, rents, and cash flows over the next 12 months, the timeframe of our outlook, we would likely lower the rating if the company's liquidity becomes constrained or debt coverage measures deteriorate, perhaps due to tenant challenges. The high dividend payout ratio and highly concentrated tenant base contribute to our view that an additional upgrade is unlikely in the next year," S&P said. SPRINT NEXTEL: Keith Cowan Staying with Company Until Jan. 2 ------------------------------------------------------------ Sprint Nextel Corporation's Chief Executive Officer has decided that Keith O. Cowan, President, Strategic Planning and Corporate Initiatives, should remain with the Company until Jan. 2, 2013. The Company previously said that Mr. Cowan would be leaving the Company effective Sept. 30, 2012. The Company decided to extend Mr. Cowan's for a few months given that Mr. Cowan's successor, Michael Schwartz, who is currently employed at Telesat Canada, cannot join the Company until Jan. 2, 2013. Mr. Schwartz's title will be Senior Vice President, Corporate and Business Development. About Sprint Nextel Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S) -- http://www.sprint.com/-- is a communications company offering a comprehensive range of wireless and wireline communications products and services that are designed to meet the needs of individual consumers, businesses, government subscribers and resellers. The Company's balance sheet at June 30, 2012, showed $49.02 billion in total assets, $39.79 billion in total liabilities and $9.22 billion in total shareholders' equity. * * * In February 2012, Moody's Investors Service assigned a B3 rating to Sprint Nextel's proposed offering of Senior Unsecured Notes and a Ba3 rating to Sprint's proposed offering of Junior Guaranteed Unsecured Notes. The proceeds will be used for general corporate purposes, the repayment of existing debt, network expansion and modernization, and the potential funding of Clearwire. All of Sprint's ratings remain on review for possible downgrade, including those assigned and the company's B1 corporate family rating and B1 probability of default rating. Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '2' recovery rating to Sprint's proposed $1 billion of senior guaranteed notes due 2020. These notes have subordinated guarantees from all the subsidiaries that guarantee the existing $2.25 billion revolving credit facility. The '2' recovery rating indicates expectations for substantial (70% to 90%) recovery in the event of payment default. As reported by the TCR on Aug. 8, 2012, Fitch Ratings affirms, among other things, the Issuer default rating (IDR) of Sprint Nextel and its subsidiaries at 'B+'. The ratings for Sprint reflect the ongoing execution risk both operationally and financially regarding several key initiatives that the company expects will improve cash generation, network performance and longer-term profitability. STILLWATER ASSET: Involuntary Chapter 11 Case Summary ----------------------------------------------------- Alleged Debtor: Stillwater Asset Backed Offshore Fund Ltd. 165 Remsen Street, 2nd Floor Brooklyn, NY 11201 Case Number: 12-14140 Involuntary Chapter 11 Petition Date: October 3, 2012 Court: Southern District of New York (Manhattan) Petitioner's Counsel: Douglas E. Spelfogel, Esq. FOLEY & LARDNER LLP 90 Park Avenue New York, NY 10016 Tel: (212) 682-7474 Fax: (212) 687-2329 E-mail: dspelfogel@foley.com Stillwater Asset's petitioners: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Eden Rock Finance Money Owed $23,009,320 Master Limited fka Fortis Prime Fund Solutions Custodial Services (Ire) Ltd re KBC ac G1 (ERFF) by Eden Rock Capital Management LLP 50 Curzon Street, 5th Floor London W1J 7UW, United Kingdom Eden Rock Unleveraged Money Owed $3,603,080 Finance Master Limited fka Fortis (Isle of Man) Nominees Limited (re ERUFML) by Eden Rock Capital Management LLP, 50 Curzon Street, 5th Floor London W1J 7UW, United Kingdom ARP Structural Alpha Fund Money Owed $5,433,318 fka Fortis (Isle of Man) Nominees Limited a/c 80 000 323 by Absolute Return Partners LLP 16 Water Lane Richmond TW9 1TJ, United Kingdom ARP Private Finance Fund Money Owed $3,889,093 fka Fortis (Isle of Man) Nominees Limited a/c 80 000 357 by Absolute Return Partners, LLP, Manager 16 Water Lane Richmond TW9 1TJ, United Kingdom Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Gerova Financial Group, Ltd. 12-13641 08/24/12 SUNOCO INC: Acquisition Cues Fitch to Lift Sr. Unsec. Note Rating ----------------------------------------------------------------- Fitch Ratings has upgraded the senior unsecured ratings of Sunoco, Inc. to 'BBB-' from 'BB+' following the close of the acquisition of Sunoco, Inc. (SUN) by Energy Transfer Partners, L.P.(ETP; 'BBB- ', Negative Outlook), as well as ETP's announcement that it would become a co-obligor on Sunoco, Inc.'s existing senior unsecured notes in order to satisfy the consolidation, merger and sale covenant associated with the notes' indenture. Fitch has also upgraded to 'BBB-' from 'BB+' and withdrawn ratings on Sunoco's long-term Issuer Default Rating (IDR) and upgraded to 'BBB' from 'BBB-' and withdrawn the secured rating on Sunoco's 364-day credit facility. No rating actions were taken on Sunoco Logistics (SXL; 'BBB', Stable Outlook). Approximately $965 million of outstanding Sunoco, Inc. unsecured debt is affected by action. Sunoco's standalone performance prior to the merger was strong. For the latest 12 months (LTM) period ending June 30, 2012, the company generated EBITDA of $1.56 billion, up sharply from the $724 million seen at year-end (YE) 2011. Key drivers for improved performance included improved performance in refining and one-time LIFO inventory gains, strong contributions from logistics, and reduced corporate expenses. Given Sunoco's debt balances of $2.55 billion, SUN's LTM debt/EBITDA at June 30, 2012 was just 1.64x; however, this figure includes consolidated debt from Sunoco Logistics (SXL). Excluding these sources of debt, and netting out EBITDA contributions from SXL, SUN's adjusted debt/EBITDA as calculated by Fitch was just 0.7x. Sunoco's liquidity prior to the merger at June 30, 2012 was robust and included $655 million in availability on its existing 364 day secured revolver, $165 million of availability on its accounts receivable securitization facility as well as cash of $1.88 billion, resulting in total liquidity of $2.7 billion. That facility was terminated at the close of the ETP-SUN transaction, and immediately following the deal, any liquidity needs that arise at the Sunoco level are expected to be met by liquidity from parent ETP. At the closing of the merger, Sunoco contributed to ETP $2 billion in cash and the equity interests of Sunoco Partners LLC (which currently holds the 2% general partner interest, incentive distribution rights, and a 32.4% limited partner interest in Sunoco Logistics Partners, L.P. (SXL), in exchange for 90,706,000 newly issued Class F units of ETP. Additionally, immediately following the closing of the merger, Energy Transfer Equity, L.P. (ETE) contributed its interest in Southern Union Company (Southern Union) to ETP Holdco Corporation (ETP Holdco), in exchange for a 60% equity interest in ETP Holdco. In conjunction with ETE's contribution, ETP contributed its interest in Sunoco (exclusive of its interest in SXL) to ETP Holdco and retained a 40% equity interest in ETP Holdco. As a result of the merger and the above transactions, ETP and ETE own an indirect 40% and 60% equity interest, respectively, in both Sunoco and Southern Union, while ETP owns the general partner interests, incentive distribution rights and a 32.4% limited partner interest in SXL. The new structure simplifies ETP's organizational structure and diversifies and increases the scale of its operations. Fitch believes it will provide an efficient way to drop down assets to ETP, resolving uncertainties about future dropdowns and eliminating transactional and capital market risks. In addition to any operational benefits, it is Fitch's expectation that ETP HoldCo will generate tax benefits and contribute to improving leverage metrics at ETP. Given the limited amount of ETP debt needed to complete the SUN merger and the expected cash flows to be generated by SXL and ETP HoldCo, ETP's consolidated company and stand-alone debt to EBITDA should approach 4.0 times (x) in 2013, down from approximately 4.8x at June 30, 2012. Rating Rationale For ETP: ETP's ratings and outlook consider the benefits of scale and diversity provided by the SUN acquisition. It also recognizes the limited amount of new debt required to complete the transaction and modestly favorable impact on its leverage metrics. The SUN acquisition will change ETP's future cash flow mix by adding crude oil, refined products and retail operations. It will expand and enhance the services it can provide to customers. Approximately 29% of estimated 2012 pro forma consolidated cash flow will now come from NGLs, crude oil, and refined products. An additional 10% will come from retail marketing. ETP's Outlook remains Negative, which reflects its aggressive acquisition and organic growth activities, the associated transactional risk, and the impact these activities have on credit metrics. ETP will continue to have significant future financing obligations beyond the SUN purchase including capital contributions to joint ventures. As a result Fitch expects that ETP's debt to EBITDA to remain over 4.0x through 2013. What Could Trigger A Rating Action Following the transaction, catalysts for future rating actions for Sunoco's unsecured debt center on changes in credit quality at parent ETP. Possible catalysts for negative rating actions include higher than anticipated leverage or weakened liquidity at the parent. Possible catalysts for a positive rating action include a long-term improvement in debt to EBITDA leverage to approximately 4.0x on a sustained basis or further lessening of business risk at the parent. Sunoco's ratings following the rating action are as follows: Sunoco, Inc. -- Long-term IDR to 'BBB-' from 'BB+' and withdrawn; -- Senior secured revolver to 'BBB' from 'BBB-' and withdrawn; -- Senior unsecured notes to 'BBB-' from 'BB+'. SUSAN M HUTSON: Updated Case Summary & Creditors' Lists ------------------------------------------------------- Lead Debtor: Susan M Hutson 1890 Cherry Lane Haw River, NC 27258 Bankruptcy Case No.: 12-07111 Chapter 11 Petition Date: October 4, 2012 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: Randy D. Doub Debtors' Counsel: William P Janvier, Esq. JANVIER LAW FIRM, PLLC 1101 Haynes Street, Suite 102 Raleigh, NC 27604 Tel: (919) 582-2323 Fax: (866) 809-2379 E-mail: bill@janvierlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliate that simultaneously filed separate Chapter 11 petition: Debtor Case No. ------ -------- YNOT LLC 12-07112 fdba YNOT Enterprises Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by Susan M. Hutson, member/manager. A. A copy of Susan M Hutson's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb12-07111.pdf B. A copy of YNOT LLC's list of its 18 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb12-07112.pdf T3 MOTION: Due Date of Perry Trebatch Note Extended to Oct. 16 -------------------------------------------------------------- T3 Motion, Inc., and Perry Trebatch, an accredited investor, have agreed to extend the due date of the $250,000 senior secured bridge loan until Oct. 16, 2012. On Sept. 14, 2012, the Company entered into a Security Purchase Agreement with Perry Trebatch. In connection with the Agreement, the Company and the Investor also entered into a Secured Promissory Note Agreement and a Security Agreement. Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the Investor provided a senior secured bridge loan to the Company in the aggregate principal amount of $250,000. The Note was originally due 7 days following receipt of the net proceeds, or Sept. 21, 2012, but the parties amended the due date of the Note to Sept. 28, 2012, and further amended the due date to Oct. 16, 2012. About T3 Motion Costa Mesa, Calif.-based T3 Motion, Inc., develops and manufactures T3 Series vehicles, which are electric three-wheel stand-up vehicles that are directly targeted to the public safety and private security markets. After auditing the 2011 results, KMJ Corbin & Company LLP, in Costa Mesa, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant operating losses and has had negative cash flows from operations since inception, and at Dec. 31, 2011, has an accumulated deficit of $54.9 million. The Company reported a net loss of $5.50 million in 2011, compared with a net loss of $8.32 million in 2010. The Company's balance sheet at June 30, 2012, showed $2.85 million in total assets, $3.31 million in total liabilities and a $451,781 total stockholders' deficit. THETA CORP: Moody's Downgrades Counterparty Rating to 'Ba1' ----------------------------------------------------------- Moody's Investors Service has downgraded the counterparty rating of Theta Corporation: Counterparty Rating, Downgraded to Ba1 (sf); previously on Feb 23, 2012 Baa2 (sf) Placed Under Review for Possible Downgrade Theta is a limited purpose financial operating company that invests in a diversified portfolio of eligible investment-grade assets through cash bonds and the credit default swap ("CDS") market. Theta's current major business consists of selling credit protection on corporate entities through CDS. Theta is capitalized through the issuance of capital notes; and the company generates its income by earning premia on CDS and capturing the spread between the yield on its bond portfolio and the cost of funding. Moody's notes that there are currently no debt securities outstanding under the Medium Term Note (MTN) and Commercial Paper (CP) programmes (together "Senior note programmes") and expects the Senior note programmes to be terminated soon. Moody's will withdraw the rating of the Senior note programmes after it is terminated. Ratings Rationale Moody's explained that the counterparty rating downgrade action is primarily a result of portfolio credit deterioration, following the conclusion of Moody's global banking sector rating review this year. According to the latest investor report dated September 28, 2012, Theta's current CDS portfolio totals US$4.07 billion. Approximately US$1.79 billion (or 44.0%) are exposed to Banking sector, with US$1.65 billion (or 40.6%) exposed to Bank Subordinated debt. Since the last rating action in February 2012, approximately US$1.48 billion (or 36%) portfolio reference entities experienced rating downgrade by two notches on the average. Moody's has observed positive developments such as amortisation of CDS portfolio, weighted average life reduction and increase in cash holding; however, the negative impact of portfolio credit deterioration outweighed the positive factors. Moody's rating action on Oct. 5 also takes into account the price volatility of Theta's underlying cash bond portfolio. Theta may need to liquidate portions of its cash bond portfolio to meet CDS credit event payments as they arise. Any unprecedented illiquidity in the market for these assets may affect Theta's ability to liquidate assets without crystallizing additional losses to its capital. Theta's bond portfolio totals US$342.7 million, including US$197.9 million cash. Non cash portfolio assets are mainly exposed to ABS credit cards 42% and RMBS 36%. Moody's considered a wide range of scenarios under which the price of cash bond portfolio could vary, and primarily incorporated in its analysis the haircut levels of between 0% to 30% to the current mark-to- market estimates. Those scenarios were considered to account for potential differences between current mark-to-market estimates and future realized sales. Moody's analysis also took into account CDS premiums that Theta would receive on its CDS portfolio as well as potential reductions in such premiums due to termination of the CDS as a result of credit events. In the process of determining the final rating, Moody's took into account the results of a number of sensitivity analyses, including: (1) A model run with a forward looking portfolio one year from Oct. 5, taking into account the amortisation profile in the next 12 months horizon. The model output was slightly below the rating level. (2) A model run with a forward looking portfolio one year from Oct. 5 with reduced subordination, assuming partial redemption of capital notes up to the amount of cash holding at the time. The model output was materially below the rating level. Notwithstanding this was a part of Moody's analysis, Moody's examined this merely as a possibility and has not assigned a definitive likelihood of such event occurring. Moody's notes that Theta is subject to a high level of macroeconomic uncertainty, which could negatively impact the ratings, as evidenced by 1) uncertainties of credit conditions in the general economy and 2) the acute sovereign and banking crisis in the euro area, which is weakening the credit profiles of banks exposed to the currency union. This crisis accentuates challenges facing banks globally that have accelerated since second-half 2011. For more information please refer to two interrelated Special Reports published on 19 January 2012: "Euro Area Debt Crisis Weakens Bank Credit Profiles" and "European Banks: How Moody?s Analytic Approach Reflects Evolving Challenges". On 21 August 2012, Moody's released a Request for Comment seeking market feedback on proposed adjustments to its modelling assumptions. These adjustments are designed to account for the impact of rapid and significant country credit deterioration on structured finance transactions. If the adjusted approach is implemented as proposed, the rating of Theta may be negatively affected. See "Approach to Assessing the Impact of a Rapid Country Credit Deterioration on Structured Finance Transactions", (http://www.moodys.com/research/Approach-to-Assessing-the-Impact- of-a-Rapid-Country-Credit--PBS_SF294880) for further details regarding the implications of the proposed methodology changes on Moody's ratings. The methodologies used in this rating were "Moody's Approach to Rating Credit Derivative Product Companies" published in March 2006, and "Moody's Approach to Rating Corporate Collateralized Synthetic Obligations" published in September 2009. Moody's applied the Monte Carlo simulation framework within CDOROMv2.8 to model the loss distribution of the reference pool. Within this framework, defaults are generated so that they occur with the frequency indicated by the adjusted default probability pool for each credit in the reference. Specifically, correlated defaults are simulated using a normal (or "Gaussian") copula model that applies the asset correlation framework. Recovery rates for defaulted credits are generated by applying within the simulation the distributional assumptions, including correlation between recovery values. Together, the simulated defaults and recoveries across each of the Monte Carlo scenarios define the loss distribution for the reference pool. Once the loss distribution has been calculated, each collateral loss scenario derived through the CDOROM loss distribution is associated with loss given claim analysis, where loss is only incurred if amount of claim due to credit event is bigger than available cash, via bond portfolio liquidation or usage of cash already existing in the deal. In addition to the quantitative factors that are explicitly modelled, qualitative factors are part of the rating committee considerations. These qualitative factors include the structural protections in each transaction, the recent deal performance in the current market environment, the legal environment, specific documentation features, the collateral manager's track record, and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, may influence the final rating decision. THOMPSON CREEK: To Save $100MM Plus from New Mine Plan, Job Cuts ---------------------------------------------------------------- Thompson Creek Metals Company Inc. has decided to implement cost saving measures as a result of the uncertainty in the world economy. The Company has suspended stripping activity associated with the next phase of production at the Thompson Creek Mine, referred to as Phase 8. Mining operations will continue as planned through 2014 in the current phase of production at the Mine, referred to as Phase 7. As a result of this change, between now and 2014, the Company expects to save approximately $100 million in operating costs and $8 - $9 million in capital expenditures, as well as reduce the Mine workforce by approximately 100 workers. Kevin Loughrey, Chairman and Chief Executive Officer of Thompson Creek, said, "As a result of continuing weakness and uncertainty in the world economy, we have decided to reduce our costs, strengthen our balance sheet, and conserve cash. This will allow for greater certainty in accessing our existing financings in order to complete the development of Mt. Milligan, while we preserve the assets at Thompson Creek until market conditions strengthen." The Company expects to restart stripping of Phase 8 of the mine plan when market conditions warrant. The Thompson Creek Mine is expected to produce 20 - 22 million pounds of molybdenum in 2013 and 17 - 19 million pounds in 2014. Assuming stripping is not restarted prior to 2015, cash costs are expected to be approximately $4.75 - $5.75 per pound in 2013 and $5.00 - $6.00 per pound in 2014. If stripping has not recommenced by 2015, the Company expects that the mine would be placed on care and maintenance at that time. If the decision to recommence stripping is made prior to 2015, guidance with respect to costs will be revised accordingly, but we expect that molybdenum production guidance should not be affected. The Company's Langeloth roasting facility in Pennsylvania will continue to treat material from the Thompson Creek Mine, third party purchased concentrates and tolled molybdenum concentrates. Severance Plan Termination Thompson Creek terminated a severance plan under which certain of its employees were participants. In connection with termination of the plan, the Company has agreed to pay the participants the amounts that had accrued to those individuals as of Sept. 30, 2012, on the earlier of Oct. 15, 2013, and the applicable participant's separation of service with the Company. The severance plan was put into place in 2004. Under the terms of the plan, the participants accrued benefits based on years of service with the Company which were to be paid upon termination by the Company without cause and certain other circumstances. The Company expects to pay approximately $14 million in cash in connection with termination of this plan, approximately $9 million of which the Company had set aside for purposes of paying obligations under the plan. In connection with the termination of the plan, the Company expects to incur a charge of approximately $2 million in the third quarter of 2012. About Thompson Creek Metals Thompson Creek Metals Company Inc. is a growing, diversified North American mining company. The Company produces molybdenum at its 100%-owned Thompson Creek Mine in Idaho and Langeloth Metallurgical Facility in Pennsylvania and its 75%-owned Endako Mine in northern British Columbia. The Company is also in the process of constructing the Mt. Milligan copper-gold mine in central British Columbia, which is expected to commence production in 2013. The Company's development projects include the Berg copper-molybdenum-silver property and the Davidson molybdenum property, both located in central British Columbia. Its principal executive office is in Denver, Colorado and its Canadian administrative office is in Vancouver, British Columbia. More information is available at http://www.thompsoncreekmetals.com The Company's balance sheet at June 30, 2012, showed $3.45 billion in total assets, $1.56 billion in total liabilities and $1.88 billion in shareholders' equity. * * * As reported by the TCR on Aug. 14, 2012, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Denver- based molybdenum miner Thompson Creek Metals Co. to 'CCC+' from 'B-'. "These rating actions follow Thompson Creek's announcement of weaker production and higher cost expectations through next year," said Standard & Poor's credit analyst Donald Marleau. In the May 9, 2012, edition of the TCR, Moody's Investors Service downgraded Thompson Creek Metals Company Inc.'s Corporate Family Rating (CFR) and probability of default rating to Caa1 from B3. Thompson Creek's Caa1 CFR reflects its concentration in molybdenum, relatively small size, heavy reliance currently on two mines, and the need for favorable volume and price trends in order to meet its increasingly aggressive capital expenditure requirements over the next several years. TOWNSHIP OF IRVINGTON: Moody's Affirms 'Ba1' Rating on G.O. Debt ---------------------------------------------------------------- Moody's Investors Service has affirmed the Ba1 underlying rating with negative outlook on the Township of Irvington's $116 million of outstanding General Obligation debt outstanding. The outstanding debt constitutes a general obligation of the township as the full faith and credit and unlimited taxing power of the township are pledged to the payment of principal. Summary Rating Rationale The Ba1 underlying rating reflects the township's narrowed financial position as reflected in reserves which are improving but still negative net of deferred charges, resulting from years of structurally imbalanced operations. The rating also encompasses the moderately-sized tax base near New York City (G.O. rated Aa2/stable outlook) with low socioeconomic wealth levels and an elevated debt burden. The negative outlook reflects uncertainty surrounding the township's ability to achieve an adequate financial position. Future rating reviews will consider Irvington's success in adopting timely budgets, reducing deferred charges, building Current Fund reserves and reducing dependence on cash flow borrowing. Furthermore, future rating reviews will monitor any further deterioration of the township's balance sheet due to taxable value reductions, increased tax appeals and/or increases in foreclosures. STRENGTHS OF LONG-TERM UNDERLYING CREDIT - Moderately sized tax base with proximity to Newark (G.O. rated A3/negative outlook) and New York City (G.O. rated Aa2/stable outlook) - Supervision from the state Division of Local Government Services - Enhancement of portions of long-term debt provided by the New Jersey Municipal Qualified Bond Act (MQBA) CHALLENGES OF LONG-TERM UNDERLYING CREDIT - Weak financial position with negative reserves net of deferred charges - Wealth indicators below state and national averages - Tax base and population declines due to increased tax appeals and foreclosures Outlook The negative outlook reflects uncertainty surrounding the township's ability to achieve an adequate financial position. Future rating reviews will consider Irvington's success in adopting timely budgets, reducing deferred charges, building Current Fund reserves and reducing dependence on cash flow borrowing. Furthermore, future rating reviews will monitor any further deterioration of the township's balance sheet due to taxable value reductions, increased tax appeals and/or increases in foreclosures. WHAT COULD MOVE THE LONG-TERM RATING UP (REMOVE NEGATIVE OUTLOOK): * Restoration of structurally balanced operations * Improved Current Fund balance position (including net of deferred charges) * Elimination of future cash flow borrowing WHAT COULD MOVE THE LONG-TERM RATING DOWN: * Inability to regain structurally balanced operations (including deferred charges) * Increased reliance on cash flow borrowing or inability to access the capital markets * Continued tax base and population declines resulting in increased tax appeals, foreclosures * Bargaining contracts that further weaken the city's ability to obtain structural balance Principal Methodology The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. TRANSTAR HOLDING: Term Loan Changes No Impact on Moody's Ratings ---------------------------------------------------------------- Moody's Investors Service stated that Transtar Holding Company's ratings are unaffected by the proposed first lien term loan increase to $320 million from $295 million and concurrent second lien term loan decrease to $140 million from $165 million. Pricing on the first lien term loan has also been modestly reduced. The transaction is leverage neutral and will reduce gross interest expense, providing a slight boost to cash flow. 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. As reported by the Troubled Company Reporter-Europe on Sept. 20, 2012, Moody's Investors Service downgraded Transtar'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. 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. TWG CAPITAL: Court Clears to Auction Assets Next Month ------------------------------------------------------ Katy Stech at Dow Jones' DBR Small Cap reports that executives at Indianapolis finance firm TWG Capital Inc. will offer the company to the highest bidder at a Nov. 7 bankruptcy auction -- an event that has already caught the attention of a Chicago private-equity firm that put forth a $200,000 bid. TWG Capital filed a Chapter 11 petition (Bankr. S.D. Ind. Case No. 12-11019) on Sept. 14, 2012. Attorneys at Faegre Baker Daniels LLP, in Indianapolis, serve as counsel to the Debtor. The Debtor estimated less than $1 million in assets and at least $1 million in liabilities. UNIGENE LABORATORIES: Approves 2012 Employee Incentive Program -------------------------------------------------------------- Unigene Laboratories, Inc., reviewed the recommendations of the Board's Compensation Committee and approved and authorized the Company to enter into 2012 Key Employee Performance and Incentive Plan Agreements with certain of the Company's essential employees subject to the approval and closing of the Forbearance Agreement and First Amendment to Amended and Restated Financing Agreement, by and amongst the Company and Victory Park Management LLC, to promote the retention of the Key Employees and to motivate the Key Employees and align their interests with the interests of the Company's stockholders by, among other things, granting certain incentive bonuses and stock options outside of the Company's existing equity compensation plan to the Key Employees. The 2012 Restructuring was completed on Sept. 26, 2012. As a result, on Sept. 27, 2012, the Company subsequently entered into Incentive Bonus Agreements with certain employees of the Company, including the executive officers. On Sept. 27, 2012, the Company entered into an employment agreement with Brian Zietsman, chief financial officer. The Zietsman Employment Agreement provides that Mr. Zietsman will receive an annual salary of $250,000, provided that for the first 12 months following the Effective Date, $25,000 of Mr. Zietsman's annual salary will be paid in the form of stock options. Thereafter, the salary may be reviewed and adjusted by the Company as it will determine is appropriate. He will also participate in the Company's regular bonus program, be eligible to receive an annual bonus based on the achievement of Company-wide and individual objectives, and will be permitted to participate in such employee benefit plans as are made available by the Company to its employees generally. The Company also entered into an employment agreement with Nozer Mehta, Chief Scientific Officer. The Mehta Employment Agreement provides that Dr. Mehta will receive an annual salary of $252,350. On Sept. 20, 2012, the Board reviewed the recommendations of the Compensation Committee and approved and authorized the Company to grant certain retention stock option grants outside of the Company's existing equity compensation plan to all of the Company's existing employees and directors, subject to the approval and closing of the 2012 Restructuring, to promote the retention of those employees and directors and to motivate such employees and directors and align their interests with the interests of the Company's stockholders. A detailed copy of the Form 8-K is available for free at: http://is.gd/nfeO8Q About Unigene Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/ -- is a biopharmaceutical company focusing on the oral and nasal delivery of large-market peptide drugs. Unigene reported a net loss of $17.92 million in 2011, a net loss of $27.86 million in 2010, and a net loss of $13.38 million in 2009. The Company's balance sheet at June 30, 2012, showed $11.69 million in total assets, $77.56 million in total liabilities and a $65.87 million total stockholders' deficit. Grant Thornton LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 financial results. The independent auditors noted that the Company has incurred a net loss of $17,900,000 during the year ended Dec. 31, 2011, and, as of that date, has an accumulated deficit of approximately $189,000,000 and the Company's total liabilities exceeded total assets by $55,138,000. Bankruptcy Warning Under the Company's amended and restated March 2010 financing agreement with Victory Park Management, LLC, so long as the Company's outstanding note balance is at least $5,000,000, the Company must maintain a minimum cash balance equal to at least $2,500,000 and its cash flow must be at least $2,000,000 in any fiscal quarter or $7,000,000 in any three consecutive quarters. "Without additional financing, we will not be able to maintain a minimum cash balance of $2,500,000, or maintain an adequate cash flow, in order to avoid default in periods subsequent to September 30, 2012," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, we will be in default under the financing agreement, which would result in the full amount of our debt owed to Victory Park becoming immediately due and payable. Even if we are able to raise cash and maintain a minimum cash balance of at least $2,500,000 through the March 2013 maturity date, there is no assurance that the notes will be converted into common stock, in which case, we may not have sufficient cash from operations or from new financings to repay the Victory Park debt when it comes due. There can be no assurance that new financings will be available on acceptable terms, if at all. In the event that we default, Victory Park could retain control of the Company and will have the ability to force us into involuntary bankruptcy and liquidate our assets." UPPER CRUST: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: The Upper Crust, LLC 55 Foodmart Road Boston, MA 02118 Bankruptcy Case No.: 12-18134 Chapter 11 Petition Date: October 4, 2012 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Henry J. Boroff Debtor's Counsel: John C. Elstad, Esq. MURPHY & KING, P.C. One Beacon Street Boston, MA 02108 Tel: (617) 423-0400 Fax: (617) 423-0498 E-mail: jce@murphyking.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mab12-18134.pdf The petition was signed by Joshua Huggard, manager. Affiliates that simultaneously sought Chapter 11 protection: Debtor Case No. ------ -------- The Upper Crust, LLC 12-18134 The Upper Crust - Back Bay, LLC 12-18135 The Upper Crust - Fenway, LLC 12-18136 The Upper Crust - Harvard Square, LLC 12-18137 The Upper Crust - Hingham, LLC 12-18138 The Upper Crust - Lexington, LLC 12-18139 The Upper Crust - State Street, LLC 12-18140 The Upper Crust - South End, LLC 12-18142 The Upper Crust - Pennsylvania Avenue, LLC 12-18143 The Upper Crust - Waltham, LLC 12-18144 The Upper Crust - Watertown, LLC 12-18145 The Upper Crust - Wellesley, LLC 12-18146 JJB Hanson Management, Inc. 12-18147 The Upper Crust - DC, LLC 12-18148 VILLAGE OF RIVERDALE: Moody's Lowers GOULT Debt Rating to 'B2' -------------------------------------------------------------- Moody's Investors Service has downgraded to B2 from B1 the ratings on the Village of Riverdale's (IL) general obligation unlimited tax rating. Concurrently, the outlook has been revised to negative. The rating action affects $1.6 million of outstanding Moody's-rated debt. Summary Rating Rationale The downgrade reflects the village's deteriorating financial position as reported for fiscal 2012, resulting in an increased deficit position for the General Fund than what was previously projected. Additionally, the B2 rating reflects ongoing operating deficits in the General Fund stemming from a history of poor budgetary oversight and reliance on transfers from the village's enterprise funds poorly funded pension liabilities, and a challenged local economy. The downgrade also reflects the lack of specific parameters and a concrete timeframe with regard to the village's deficit elimination plan. The assignment of the negative outlook reflects the belief that significant challenges stand in the way of the village reestablishing structurally balanced financial operations, including elimination of the growing General Fund deficit balance. The village's narrow cash position also increases the risks that the village will continue to make payments to employees, vendors and creditors on time and in full. Strengths - Status as a Home-Rule unit of government which affords management broad legal authority for revenue enhancements - The recent implementation of General Fund revenue enhancements and expenditure reductions Challenges - Structurally imbalanced resulting from negative variances across General Fund revenues and expenditures - Reliance on one-time revenue proceeds and internal advances from other funds - Significant underfunding of pension plans - Economically challenged tax base marked by declining full valuation, taxpayer concentration, elevated unemployment, and net population loss - Elevated debt profile Outlook The assignment of the negative outlook reflects the belief that significant challenges stand in the way of the village reestablishing structurally balanced financial operations, including elimination of the growing General Fund deficit balance. The village's narrow cash position also increases the risks that the village will continue to make payments to employees, vendors and creditors on time and in full. What Could Make The Rating Go - UP - Structurally balanced financial operations achieved through sustainable financial solutions - Material operating surpluses leading to the elimination the deficit General Fund balance and eventual development of a positive General Fund balance and operating liquidity - Demonstrated commitment to make mid-year budget adjustments as necessary to achieve structurally balance operations What Could Make The Rating Go - DOWN - Continued structural imbalance resulting from negative budget variances yielding larger deficits in the General Fund - Inability or unwillingness to implement future revenue enhancements or expenditure reductions aimed at eliminating the deficit General Fund balance Rating Methodology The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. VISANT HOLDING: S&P Affirms 'B+' Corp. Credit Rating; Outlook Neg ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Armonk, N.Y.-based Visant Holding Corp. to negative from stable. "At the same time, we affirmed our 'B+' corporate credit rating on the company, along with all related issue-level ratings on the company's debt," S&P said. "The outlook revision to negative reflects our expectation that Visant's ongoing unfavorable revenue trends will continue to pressure EBITDA and discretionary cash flow, drive leverage higher, and could weaken its interest coverage," said Standard & Poor's credit analyst Chris Valentine. "We continue to assess Visant's business risk profile as 'fair,' based on our criteria, given the good market position and solid operating EBITDA margin compared with its principal competitor. We view its financial risk profile as 'highly leveraged' because of its high debt level and an aggressive financial policy, demonstrated by a large, special dividend in 2010," S&P said. "Visant publishes school yearbooks and manufactures and sells school class rings, together known as 'school affinity products.' The school affinity product market is a mature business with relatively high barriers to entry. Visant has a strong competitive position in this niche business because of its existing relationships with customers and strong product offerings. These strengths, along with effective cost management, result in Visant having an EBITDA margin higher than its key competitor. Offsetting these strengths is the fact that a major portion of Visant's revenues and EBITDA are seasonal and highly dependent on the North American academic cycle. Because of the discretionary nature of purchases, Visant's operations are vulnerable to weakness in the economy and gold price spikes, which together have caused consumers to shift to lower-priced metals for jewelry and affinity products and have pressured revenues of late," S&P said. W.R. GRACE: Targets 4th Qtr 2013 Emergence From Chapter 11 ---------------------------------------------------------- W.R. Grace & Co. said it targets its emergence from Chapter 11 bankruptcy on the fourth quarter of 2013 despite previously saying it would emerge from bankruptcy within this year after receiving confirmation of its plan of reorganization. Grace's target emergence from bankruptcy has been moved several times. Grace has been in Chapter 11 protection for more than 11 years since it delivered its petition to the U.S. Bankruptcy Court for the District of Delaware on April 2, 2001. In January 2011, Bankruptcy Judge Judith Fitzgerald confirmed Grace's Chapter 11 plan. It took almost a year and several motions for reconsideration and hearings on the plan for Judge Buckwalter of the U.S. District Court for the District of Delaware to affirm Judge Fitzgerald's plan confirmation order on January 2012. In June 2012, Judge Buckwalter overruled objections to its January 2012 affirmation order. Eight parties-in-interest have filed separate appeals to the U.S. Court of Appeals for the Third Circuit from June 11 Memorandum. The Appellants are (1) a group of lenders under the Debtors' prepetition bank credit facilities ("Bank Lenders"); (2) claimants injured by exposure to asbestos from the Debtors' operations in Lincoln County, Montana ("Libby Claimants"); (3) Garlock Sealing Technologies, LLC; (4) the state of Montana; (5) Maryland Casualty Company; (6) Her Majesty the Queen in Right of Canada; (7) BNSF Railway Company; and (8) Anderson Memorial Hospital. Briefs on the appeals will be filed in the last quarter of this year and oral arguments will be heard before the Third Circuit on the first quarter of 2013. Grace said in a regulatory filing with the U.S. Securities and Exchange Commission that it previously stated that it would seek to have the Chapter 11 Plan, which is co-proposed by the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative, become effective and emerge from Chapter 11 protection prior to the final resolution of the appeals but provided no assurance that the other parties-in-interest would provide the necessary waivers to the conditions precedent. Although Grace continues to believe that the legal and economic benefits for the Company of emerging with the appeals outstanding are greater than the benefits of remaining under Chapter 11 protection, after discussions with Sealed Air Corporation and Fresenius Medical Care Holdings, Inc., Grace has been unable to obtain the necessary waivers, according to the regulatory filing. Grace said it will continue to seek the favorable disposition of the appeals to the confirmation of the Joint Plan, but this may require the completion of the appellate process. In its Investor Highlights presentation dated Sept. 10, 2012, Grace noted that the company continues to grow despite its stay in bankruptcy. Grace said it will continue to focus on its core competencies, which include materials science expertise, customer focus, and innovation, and projects $4.0 billion in sales by 2014, and $850 million in adjusted EBITDA in the same year. A full-text copy of the Investment Highlights presentation is available for free at http://is.gd/VO1XBj Terms Under the Plan The Plan, which was filed with the Bankruptcy Court in September 2008, establishes two asbestos trusts to compensate personal injury claimants and property owners. Funds for the trusts will come from a variety of sources including cash, warrants to purchase Grace common stock, deferred payment obligations, insurance proceeds, and payments from certain third parties. The trusts' assets and operations are designed to cover all current and future asbestos claims. An estimation proceeding on the Debtors' asbestos liabilities was held in 2008 but was concluded after the Debtors reached an agreement settling all of their present and future asbestos- related PI claims for $1.8 billion. Prior to that agreement, the Debtors were involved in a series of trials to estimate their asbestos personal injury claims. Grace's experts estimated that the company's asbestos personal injury liabilities are between $385 million and $1.314 billion. The PI Committee, representing more than 100,000 asbestos claimants, said Grace's liabilities range from $4.7 billion to $6.2 billion. Pursuant to the April 2008 settlement, the asbestos trusts will be funded by: -- Cash in the amount of $250,000,000; -- Warrants to acquire 10,000,000 shares of Grace common stock at an exercise price of $17.00 per share, expiring one year from the effective date of a plan of reorganization; -- Rights to proceeds under Grace's asbestos-related insurance coverage; -- The value of cash and stock under the litigation settlement agreements with Sealed Air Corporation and Fresenius Medical Care Holdings, Inc.; and -- Deferred payments at $110,000,000 per year for five years beginning in 2019, and $100,000,000 per year for 10 years beginning in 2024; the deferred payments would be obligations of Grace backed by 50.1% of Grace's common stock to meet the requirements of Section 524(g). The effectiveness of the Joint Plan is subject to the satisfaction or waiver of a number of conditions precedent, including the condition that the order confirming the Joint Plan become final and non-appealable. Settlement with Sealed Air & Fresenius The Sealed Air settlement payment consists of (i) $512,500,000 in cash, plus interest accrued from December 21, 2005 until the Plan's effective date, at a rate of 5.5% per annum compounded annually; and (ii) 18,000,000 shares of Sealed Air common stock. Sealed Air and the committee appointed to represent asbestos claimants in Grace's bankruptcy cases entered into a settlement agreement in November 2002 to resolve all current and future asbestos-related claims made against the Company and its affiliates in connection with the Cryovac transaction. The Settlement agreement will resolve the fraudulent transfer claims and successor liability claims, as well as indemnification claims by Fresenius Medical Care Holdings, Inc. and affiliated companies, in connection with the Cryovac transaction. Sealed Air clarified during its Sept. 5, 2012, investor presentation that it is prepared to make its settlement payment to Grace once all funding conditions are met but has not waived any condition, including that Grace's plan not be subject to appeal. Delay Disappoints Shareholders, Creditors Peg Brickley at Dow Jones' Daily Bankruptcy Review reported that Grace's stock took a brief tumble on word that the specialty- chemical company could be forced to sit in bankruptcy for more months, perhaps years, waiting out the final legal actions in a decade-plus Chapter 11 proceeding. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: CIM Urban Wants Claim Transfer Affirmed --------------------------------------------------- W.R. Grace & Co. and its debtor affiliates submitted a limited joinder to Main Plaza LLC's objection to the notice of transfer of claim filed by CIM Urban REIT 211 Main St. (SF), LP. The Debtors tell Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware that neither Main Plaza nor CIM Acquisition ever sought their prior written consent, as required by their settlement agreement, to transfer the Main Plaza claim to CIM Acquisition. Accordingly, the Debtors ask the Court to enforce the settlement agreement and find that Main Plaza's claim has not been transferred by CIM Acquisition. Main Plaza LLC said in a court document that prior to the Petition Date, Main Plaza, owned real property, including a building located at 211 Main Street, in San Francisco, California. Upon discovering asbestos-related damage to the building, which was attributable to the Debtors' manufacture, use, or sale of asbestos-containing products, Main Plaza conducted remediation of the building, incurring substantial costs. As a result of the remediation costs incurred, Main Plaza filed Claim No. 11009 asserting that the Debtors were liable for certain property damage alleged to be caused by their manufacture, use, or sale of asbestos-containing products. To settle and resolve the Claim, the Debtors and Main Plaza entered into a settlement agreement under which the Claim was liquidated in an amount equal to $6,137,362. Subsequent to the entry of the settlement agreement, in December 2009, Main Plaza closed on a sale and transfer of the building and land to CIM. In June 2012, CIM filed a transfer of claim attempting to tranfer the Claim to one of its affiliates, CIM Urban REIT 211 Main St. (SF), LP, and to have payments made on account of the Claim to CIM SF instead of Main Plaza. Main Plaza objects to the transfer of claim filed by CIM SF because it did not transfer its bankruptcy claim and CIM has failed to offer any evidence to establish that the claim was transferred. According to Christopher Booth, a managing member of Main Plaza, Main Plaza never considered the notion that the Claim was transferred to CIM as part of the sale of the building. Main Plaza, he said, never intended for the Claim to be transferred to CIM. CIM Responds CIM asks the Court to overrule Main Plaza's objection to the notice of claim transfer. CIM relates that it purchased a building located at 211 Main Street, in San Francisco, together with related tangible and intangible personal property interests from Main Plaza in 2009. As part of the purchase, CIM purchased all claims that relate to the ownership, use and operation of the land, the improvements, and personal property, including the claim Main Plaza has against W.R. Grace & Co. CIM says it filed the notice of transfer supported by a copy of the purchase agreement. CIM's objection is supported by a declaration by its vice president, John Bruno, who states that during the negotiations for the purchase of the property, CIM negotiated for the assignment from Main Plaza to CIM of claims and warranty claims that Main Plaza may have against suppliers, materialmen, and consultants retained by Main Plaza in connection with the design, construction, grading and installation of improvements on the property. Prior to filing the objection, CIM sought and obtained leave from the Court to file its reply to Main Plaza's objection. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Asbestos PD & PI Liability Remains at $1.7 Billion -------------------------------------------------------------- W.R. Grace & Co. disclosed in its Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarterly period ended June 30, 2012, that its total recorded asbestos-related liability as of June 30, 2012, and December 31, 2011, was $1,700.0 million and is included in "liabilities subject to compromise" in the accompanying Consolidated Balance Sheets. Grace remains a defendant in property damage and personal injury lawsuits relating to previously sold asbestos-containing products. As of April 2, 2001, Grace was a defendant in 65,656 asbestos- related lawsuits, 17 involving claims for property damage (one of which has since been dismissed), and the remainder involving 129,191 claims for personal injury. Due to the Company's bankruptcy filing, holders of asbestos-related claims are stayed from continuing to prosecute pending litigation and from commencing new lawsuits against the Debtors. Grace's obligations with respect to present and future asbestos claims will be determined through the Chapter 11 process. As of June 30, 2012, approximately 430 PD Claims subject to the March 31, 2003 claims bar date remain outstanding. The Bankruptcy Court has approved settlement agreements covering approximately 410 of such claims for an aggregate allowed amount of $151.6 million. At the Debtors' request, in July 2008, the Bankruptcy Court established a claims bar date for U.S. ZAI PD Claims and approved a related notice program that required any person with a U.S. ZAI PD Claim to submit an individual proof of claim no later than October 31, 2008. Approximately 17,960 U.S. ZAI PD Claims were filed prior to the October 31, 2008 claims bar date, and as of June 30, 2012 an additional 1,310 U.S. ZAI PD Claims were filed. Under the Canadian ZAI Settlement, all Canadian ZAI PD Claims filed before December 31, 2009 would be eligible to seek compensation from the Canadian ZAI property damage claims fund. Approximately 13,100 Canadian ZAI PD Claims were filed by December 31, 2009. As of the Filing Date, 129,191 PI Claims were pending against Grace. Grace believes that a substantial number of additional PI Claims would have been received between the Filing Date and June 30, 2012 had such PI Claims not been stayed by the Bankruptcy Court. The Bankruptcy Court entered a case management order for estimating liability for pending and future PI Claims. A trial for estimating liability for PI Claims began in January 2008 but was suspended in April 2008 as a result of the PI Settlement. The total recorded asbestos-related liability as of June 30, 2012 and December 31, 2011, including pre-Filing Date and post-Filing Date settlements, was $1,700.0 million and is included in "liabilities subject to compromise" in the accompanying Consolidated Balance Sheets. Grace's asbestos-related liability will finally be determined on the effective date of the Joint Plan and adjustments to the currently recorded amount will result primarily from the valuations of the warrant and the deferred payment obligations. Grace holds insurance policies that provide coverage for 1962 to 1985 with respect to asbestos-related lawsuits and claims. For the most part, coverage for years 1962 through 1972 has been exhausted, leaving coverage for years 1973 through 1985 available for pending and future asbestos claims. Since 1985, insurance coverage for asbestos-related liabilities has not been commercially available to Grace. As of June 30, 2012, excluding the effect of settlements that are dependent upon the effectiveness of the Joint Plan and after subtracting previous reimbursements by insurers and allowing for discounts pursuant to certain settlement agreements that are not dependent upon the effectiveness of the Joint Plan, there remains approximately $970.0 million of excess coverage from 54 presently solvent insurers. Grace estimates that eligible claims would have to exceed $4.0 billion to access total coverage. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: EPA Proposes High Standards for Asbestos Clean-Up ------------------------------------------------------------- The U.S. Environmental Protection Agency is demanding a more rigorous clean-up of asbestos-contaminated Libby, Montana, and other similar places. This recent demand is welcomed by environmental advocates but frowned upon by companies like W.R. Grace & Co., who caused most of the contamination in Libby, as stricter clean-up standards could mean more expense for the company, Pat Guth of Mesothelioma.com reported. Ms. Guth, citing a report from the Associated Press, said that the new-EPA proposed rules for clean-up of sites like Libby would be "5,000 times tougher than the standard used in past cleanups addressing airborne asbestos." Under the new plan, airborne asbestos concentrations exceeding two-100,000ths of a fiber per cubic centimeter would be considered a health risk, Ms. Guth related. The Government Accountability Office says the new rules would impact the clean-up of more than 200 sites in 40 states that are also contaminated due to Libby-produced asbestos-contaminated vermiculite, Ms. Guth noted. Ms. Guth said Grace, which operated a vermiculite mine in the area between 1963 and 1990, opposed the proposed rules and has already met with EPA officials to raise its objections. Ms. Guth added that even the White House Office of Management and Budget has questioned the EPA proposal. "That broad application will, in turn, result in enormous, unexpected and unnecessary costs to building owners, farmers and other property holders, including the federal government," said Karen Ethier, W. R. Grace Vice President, Ms. Guth cited. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WILSONART LLC: Moody's Assigns 'B2' CFR/PDR; Outlook Stable ----------------------------------------------------------- Moody's Investors Service assigned first-time corporate family and probability of default ratings of B2 to Wilsonart LLC. Clayton, Dubilier & Rice ("CD&R) is purchasing a majority interest in Wilsonart, formerly the Decorative Services Group of Illinois Tool Works, Inc. ("ITW"), for approximately $1.1 billion and ITW is contributing $380 million in rollover equity. Moody's assigned a Ba3 rating to the company's proposed senior secured bank credit facility, which will consist of a $175 million revolving credit facility and a $425 million term loan B. Moody's also assigned a Caa1 rating to the proposed $300 million senior unsecured notes. CD&R will use proceeds from the proposed transaction and the issuance of new preferred equity to finance the purchase of a 51% stake in Wilsonart. ITW will retain a 49% equity investment in the company. The rating outlook is stable. The following ratings will be affected by this action: Corporate Family Rating assigned B2; Probability of Default Rating assigned B2; Senior Secured Revolving Credit Facility due 2017 assigned Ba3 (LGD3, 30%); Senior Secured Term Loan B due 2019 assigned Ba3 (LGD3, 30%); and, Senior Unsecured Notes due 2020 assigned Caa1 (LGD5, 84%) Rating Rationale Wilsonart's B2 Corporate Family Rating reflects the company's high debt leverage, with pro forma adjusted debt-to-EBITDA of about 5.7 times following the proposed transaction. According to Moody's projections, debt leverage could fall to approximately 5.5 times by the end of 2013 as a result of improved profitability, and potentially some debt reduction from free cash flow over that period (all ratios incorporate Moody's standard accounting adjustments). As part of the proposed transaction, CD&R will make a $395 million investment in new preferred shares. These shares will be both perpetual and non-callable, which Moody's deems to be strong equity-like features. However, since they will pay a mandatory 10% annual dividend, Moody's also views them as debt- like instruments. Therefore, Moody's attributes 50%, or $198 million, of the preferred shares to equity and the remaining half to debt. To account for Wilsonart's operating lease commitments and pension obligations, Moody's also adds an additional $68 million of balance sheet debt. Altogether, these adjustments increase the company's total pro forma adjusted balance sheet debt by $265 million to $990 million. As a result of the leveraged buyout, Wilsonart will have significant negative tangible net worth. The rating also takes into consideration the company's substantial exposure to European markets and Moody's concerns over deteriorating economic conditions in that region. Although Moody's expects consolidated revenues to climb gradually on a year-over- year basis, the company may experience a contraction in European sales over the near-term, limiting upside potential. However, Moody's recognizes Wilsonart's business profile as a significant credit strength. Wilsonart's size, scale and strong distribution network increase barriers to entry and provide support to the rating. In addition, the company has a global footprint and a very diverse customer base, with no customer accounting for more than 5% of total sales. Though Moody's notes concerns about Wilsonart's European exposure, its global presence can help offset softness in certain markets. Furthermore, the company has historically generated strong operating margins. Close to 70% of the company's 2011 operating profit was generated within North America, where construction and repair and remodeling activity -- significant drivers of Wilsonart's revenues -- are beginning to show signs of a potential recovery. Finally, the company will have a good liquidity profile as a result of the proposed transaction, as it will have access to a sizeable, largely undrawn five-year revolving credit facility. The stable rating outlook reflects Moody's view that Wilsonart's credit metrics will slowly improve as North American construction and repair and remodeling markets continue to strengthen, providing some offset to Europe's current economic woes and slowing growth in Asia. The company's liquidity and lack of near- term debt maturities will also provide financial flexibility until a sustainable recovery in its end markets takes hold. The Ba3 rating assigned to the proposed senior secured bank credit facility, two notches above the corporate family rating, reflects its position as the senior-most debt in the capital structure. The facility will consist of a $175 million Senior Secured Revolver expiring in 2017 and a $425 million Senior Secured Term Loan B due 2019. Both facilities will benefit from a first-priority interest in substantially all of Wilsonart's domestic tangible and intangible assets and will be guaranteed by the company's future and existing domestic subsidiaries. The revolver and term loan will rank pari passu with each other in a recovery scenario, and benefit from support provided more junior debt in the capital structure. The Caa1 rating assigned to the proposed $300 million Senior Unsecured Notes due 2020, two notches below the corporate family rating, reflects its structural subordination relative to almost $600 million of senior secured facilities. The Notes will be guaranteed by Wilsonart's existing and future domestic subsidiaries. The ratings may improve if Wilsonart is able to reduce leverage to achieve adjusted debt-to-EBITDA below 5.0 times and improve operating profitability such that adjusted EBITA-to-interest expense approaches 3.0 times. Positive rating actions may also be taken if the company's European exposure declines, or if the euro zone economy begins to experience a recovery. The ratings may be downgraded if the company fails to meet Moody's expectations for improvement in debt leverage, with adjusted debt- to-EBITDA remaining close to or above 6.0 times. Adjusted EBITA- to-interest expense approaching 1.5 times could also pressure the ratings. In addition, a significant deterioration in European end markets or an increase in exposure to that region could result in negative rating actions. The principal methodology used in rating Wilsonart LLC was the Global Manufacturing Industry Methodology published in December 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. Wilsonart LLC, headquartered in Temple, TX, is a leading global manufacturer and distributor of high pressure laminates and other decorative surfacing products. The company's product offering includes laminates, solid surfaces, adhesives, and worktops designed for residential and non-residential new construction and repair & remodeling. Clayton, Dubilier & Rice, through its respective affiliates, will own about 51% of Wilsonart, with Illinois Tool Works, Inc. remaining the minority equity owner with a 49% interest. Revenues for the 12 months ended June 30, 2012 totaled about $1.1 billion. WILSONART LLC: S&P Assigns Preliminary 'B+' Corp. Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B+' corporate credit rating to Temple, Texas-based Wilsonart LLC. The rating outlook is stable. "At the same time, we assigned our preliminary 'BB-' issue-level rating (one notch above the corporate credit rating) to the company's proposed $175 million revolving credit facility due 2017 and its proposed $425 million term loan due 2019. The preliminary recovery rating is '2', indicating our expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default," S&P said. "In addition, we assigned our preliminary 'B' issue-level rating (one notch below the corporate credit rating) to the company's proposed $300 million senior notes due 2020. These notes are co- issued by Wilsonart Finance Ltd. The preliminary recovery rating is '5', indicating our expectation of modest (10% to 30%) recovery for noteholders in the event of a payment default," S&P said. "Proceeds from these offerings will be used to fund Clayton, Dubilier & Rice's and Illinois Tool Works' (ITW) acquisition of Wilsonart. Total consideration for the acquisition is $1.5 billion, including $395 million for CD&R's 51% preferred equity interest; the proposed $175 million revolving credit facility, which we expect to be unfunded at closing; the proposed $425 million term loan; the proposed $300 million senior notes; and $380 million implied value for ITW's 49% retained common equity interest," S&P said. "The preliminary corporate credit rating on Wilsonart LLC reflects what we consider to be the combination of Wilsonart's 'fair' business risk profile and 'aggressive' financial risk profile. Our view of the company's 'fair' business risk profile is due to the company's exposure to highly cyclical commercial and residential construction and remodeling markets, volatile raw material costs, and a highly competitive operating environment. These factors are somewhat offset by its leading market position in the high pressure laminate (HPL) business, significant geographic and customer diversification, and relatively attractive EBITDA margins. Standard & Poor's views Wilsonart's financial risk profile as aggressive given debt to EBITDA (including adjustments for preferred convertible equity, which we consider akin to debt; postretirement benefit obligations; and operating leases) of about 5.5x pro forma for the refinancing. We view this credit metric to be commensurate for the 'B+' rating and aggressive financial risk profile, supported by an 'adequate' liquidity position. Wilsonart benefits from a highly diversified mix of customers, end markets and geographies, providing natural hedges against negative trends in any given account, end market segment or region. The company maintains long-standing relationships with a highly fragmented base of over 11,000 customers with end markets consisting of 74% commercial construction and 26% residential construction. Its geographic diversity is highlighted by products sold in approximately 56 countries worldwide, with 55% of net sales in North America, 37% in Europe, and 8% in Asia. This significant business diversification--by customer, end market, and geography-- generally provides greater overall revenue stability and makes the company less susceptible to a dramatic decline related to a single customer, market segment, or region, and is consistent with our assessment of the company's fair business risk profile," S&P said. "As a global manufacturer and distributor of HPL, Wilsonart LLC also manufactures and distributes a range of associated decorative surfacing products including self-manufactured adhesives and third-party manufactured solid surface and engineered stone products. The company believes it is the largest HPL manufacturer in North America and has leading market positions in several European markets, including Germany, France, and the U.K. It also has very strong strategic positions in the high-end of the decorative laminate markets in China and Thailand," S&P said. "The stable rating outlook reflects our expectation credit measures will remain consistent with its aggressive financial risk profile with 2013 debt to EBITDA and FFO to debt of about 5x and 10x, based on our assumptions of higher volumes sold due to an improvement in end market demand. We expect Wilsonart will maintain adequate liquidity and cushion of at least 50% under its revolver covenants," S&P said. "We could lower the rating if Wilsonart experiences weaker than expected end market demand resulting in a decline in volumes such that total leverage remains above 6x on a sustained basis. This could occur if 2013 sales growth is negative in conjunction with a 200 basis point decline in gross margins," S&P said. "At this time, an upgrade seems less likely given Wilsonart's aggressive financial risk profile and projected leverage levels of about 5x debt/EBITDA. Also, we view the current rating on Wilsonart as constrained at the present level due to the company's private equity ownership," S&P said. WPCS INTERNATIONAL: Multiband Does Not Own Common Shares -------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Multiband Corporation disclosed that, as of Sept. 28, 2012, it does not beneficially own any shares of common stock of WPCS International Incorporated. Multiband previously reported beneficial ownership of 694,271 common shares or a 9.98% equity stake as of April 19, 2012. A copy of the filing is available for free at http://is.gd/j1MAHB About WPCS International Exton, Pennsylvania-based WPCS International Incorporated provides design-build engineering services that focus on the implementation requirements of communications infrastructure. The Company provides its engineering capabilities including wireless communication, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. As reported by the TCR on Dec. 8, 2011, WPCS International and its United Stated based subsidiaries, previously entered into a loan agreement, dated April 10, 2007, as extended, modified and amended several times, with Bank of America, N.A. The Company is seeking alternative debt financing and has conducted discussions with other senior lenders to replace the Loan Agreement. The Company may not be successful in obtaining alternative debt financing or additional financing sources may not be available on acceptable terms. If the Company is required to repay the Loan Agreement, the Company has sufficient working capital to repay the outstanding borrowings. J.H. COHN LLP, in Eatontown, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended April 30, 2012. The independent auditors noted that the Company is in default of certain covenants of its credit agreement and has incurred operating losses, negative cash flows from operating activities and has a working capital deficiency as of April 30, 2012. These matters raise substantial doubt about the Company's ability to continue as a going concern. WPCS reported a net loss attributable to the Company of $20.54 million for the year ended April 30, 2012, compared to a net loss attributable to the Company of $36.83 million during the prior fiscal year. The Company's balance sheet at July 31, 2012, showed $25.95 million in total assets, $18.78 million in total liabilities and $7.16 million in total equity. Going Concern On Jan. 27, 2012, WPCS and its United States-based subsidiaries Suisun City Operations, Seattle Operations, Portland Operations, Hartford Operations, Lakewood Operations, and Trenton Operations, entered into a loan and security agreement with Sovereign Bank, N.A. on July 12, 2012, the Company executed the Surety Financing and Confession of Judgment Agreement with Zurich American Insurance Company. The Company is not in compliance with the terms of the Zurich Agreement. As a result of the Company's noncompliance, the Company instructed the owner of this project to make at all current and future payments directly to Zurich. The Company's failure to comply with the terms of the Credit Agreement and the Zurich Agreement, as well as the Company's losses from operations for the three months ended July 31, 2012, raise substantial doubt about the Company's ability to continue as a going concern. At July 31, 2012, the Company had cash and cash equivalents of $1,257,920 and working capital of $1,412,252, which consisted of current assets of $20,145,533 and current liabilities of $18,733,281. As of Sept. 12, 2012, the Company had remaining availability under the Credit Agreement of $1,554,500. Andrew Hidalgo, CEO of WPCS, commented, "I am pleased to report a substantial improvement in financial performance quarter over quarter. For the first quarter, our operation centers generated $695,000 in EBITDA on revenue of $13.4 million. Even our Trenton Operations, which is coming off a difficult year of losses, generated positive EBITDA of $208,000 in the first quarter. The projects that generated the losses are behind us. We have strengthened the balance sheet and income statement. Our challenge continues to be cash flow. The current debt facility of $2 million with Sovereign Bank is not sufficient to meet our future operating requirements. We need to replace this debt facility as a priority. If we are able to obtain an adequate debt facility, we believe we will be in a better position for growth and increased shareholder value." * Moody's Says Private Student Loan Default Rate Remains High ------------------------------------------------------------- The default rate of securitized private (non-guaranteed) student loans will remain high for the remainder of 2012, but will continue to improve slowly on a year-to-year basis, says Moody's Investors Service in a new report, "Private (Non-Guaranteed) Student Loans Defaults Improve But Will Remain High through 2012." According to Moody's Private Student Loan Indices, the default rate index ended the second quarter of 2012 at 4.2%, down from 4.8% in first-quarter 2012 and 4.9%, a year ago. It was the first sizable year-to-year improvement in the index since early 2011. However, the default rate remains nearly twice as high as it was before the recession, says Moody's. "Defaults of private student loans, which the US government doesn't guarantee, are going to remain high because the unemployment rate, the key credit driver of student loan defaults, will be remaining in the 8.0%-8.5% range for the rest of 2012," says Stephanie Fustar , a Moody's Assistant Vice President and Analyst. The default rate for 2006 through 2010 securitizations will remain worse than that for older securitizations, says Moody's, because they contain large concentrations of loans to students graduating into the weak job market. As for loan delinquencies, the 90-plus delinquency rate dropped to 2.4% in second-quarter 2012 from 2.6% in the same period last year. Ninety-plus delinquencies will continue to steadily decline as they have since their peak in mid-2009, says Moody's. * Moody's Says US Covenant Quality Hits Record Low in September --------------------------------------------------------------- US high-yield bond issuance reached a record high in September as covenant quality declined toward historical lows, says Moody's Investors Service in a new report, "Covenant Quality Near Record Low as US Bond Issuance Booms in September." "The boom in issuance was accompanied by one of the lowest levels in covenant quality for any month in 2011 and 2012," says Vice President -- Head of Covenant Research, Alexander Dill. The average covenant quality (CQ) score of 3.88 for September this year is the fourth worst for US high-yields since January 2011, when Moody's began gathering this data, Dill says. The covenant quality of financial sponsors' bonds was also worse in September. Additionally, secured bonds, a further indicator of covenant quality, accounted for just 11.8% of total issuance in September, which is well below the historical average of 21.6%. Nevertheless, as a group these bonds evidenced higher protection than the historical norm. "Bonds rated single-B, which rank the 'weakest' in covenant quality, comprised almost three times the historical percentage last month," Mr. Dill says. In the "sweet spot," or single-B portion of the high-yield market, he adds, bonds in Moody's bottom category for covenant quality comprised 28.6% in September compared with an historical average of 9.4%, excluding high-yield lite bonds. In terms of individual companies with B rated bonds in the weakest covenant quality bucket, Tesoro Logistics, L.P.'s, Cablevision Systems Corporation's and Nielsen Finance LLC's bonds were rated B1, B1 and B2, respectively. Nevertheless, for issuance as a whole in September, the historical correlation between protective structures and low speculative-grade ratings holds, as investors expect weaker credits to offer better protection. But in each of the Ba, B and Caa/Ca rating categories, September's average CQ score is worse than the historical average. * Moody's Says US Local Government Sector Remains Negative ---------------------------------------------------------- The outlook for the US local government sector remains negative as financial flexibility continues to be tested by the slow economy, strains on property tax and state aid revenues, and rising pension and healthcare costs, says Moody's Investors Service in a new report. "The pace of economic recovery is tepid and uneven across regions with some pockets of more solid growth and others lagging the nation," said Moody's Vice President Kristin Button, author of the report, "Outlook for US Local Governments Remains Negative," an update of the rating agency's annual sector outlook published in February. "As budget reserves and other sources of liquidity dwindle, issuers are turning to borrowing for operations and more are facing severe financial strain," said Mr. Button. "An increasing number of issuers also face pressures related to contingent liabilities for non-core enterprises and ventures," The Moody's report concludes that property taxes and state aid will stay under pressure and that more instances of severe credit stress will surface on the back of mounting wage and benefit costs, failing enterprise risks, and over-reliance on short-term debt to meet liquidity pressures. "Rising pension and benefit costs are adding fiscal pressures to already stressed budgets, notwithstanding efforts at both the state and local level to reform benefits and reduce costs," said Mr. Button. On the positive side, she said, local governments typically have low debt service burdens, and the majority still have room to mitigate financial burdens through spending adjustments and by raising property taxes, fees, and user charges for essential utility services. "Lifting the negative outlook would require economic growth to burgeon and span several quarters, revenue declines to reverse course, and liquidity measures to stabilize and begin to recover," said Mr. Button. "However, these factors are not likely to materialize on a widespread basis over the next year." This means budget options are growing more limited and politically difficult, says Moody's, forcing local governments to choose among deeply unpopular tax increases, multiple rounds of job and service cuts, and depletion of reserves. The outlook, which expresses the rating agency's expectations for the fundamental credit conditions in the sector over the next 12 to 18 months, does not speak to expectations for individual rating changes and is not a prediction of the expected balance of rating changes during this time frame. * Epiq Says Chapter 11 Bankruptcy Filings Reaching 4-Year Low ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the 680 Chapter 11 filings in September were the fewest since March 2008. For the year as a whole, bankruptcy reorganizations in Chapter 11 are on track roughly to equal the 2008 total of 10,100. According to the report, the 87,500 overall bankruptcies in September were the fewest since January 2008, according to data compiled from court records by Epiq Systems Inc. Commercial bankruptcies in September were the fewest since December 2007, Epiq said in its report. Bankruptcies of all types in September were 10% below the same month one year ago. Total filings this year are on track to come in around 1.23 million, or some 11% fewer than the 2011 total. The report relates that filings so far this year are down in all 50 states. The most filings per capita were in Tennessee, Nevada and Georgia, the same ranking as last month. Last year's 1.38 million bankruptcies were 11.7% fewer than the 1.56 million in 2010, which recorded the most bankruptcies since the all-time record of 2.1 million set in 2005. The Bloomberg report discloses that in 2005, Americans were filing bankruptcy in advance of new laws making it more difficult for individuals to cancel debt. In the last two weeks before the law changed, 630,000 American sought bankruptcy protection. * McDonald Hopkins Elects Five New Members ------------------------------------------ McDonald Hopkins LLC, a business advisory and advocacy law firm with offices in Chicago, Cleveland, Columbus, Detroit, Miami, and West Palm Beach, discloses the election of five attorneys to the firm's membership. Todd A. Benni (West Palm Beach and Cleveland) - Member, Intellectual Property Joseph J. Crimaldi (Cleveland) - Member, Intellectual Property Nicole J. Gray (Cleveland) - Member, Labor and Employment Lisa S. Lauer (Chicago) - Member, Business Law Scott M. Slaby (Cleveland) - Member, Intellectual Property "It is a pleasure to congratulate these five talented attorneys who have already achieved much success at our firm," said Carl. J. Grassi, president of McDonald Hopkins. "Our clients highly value their expertise and we appreciate their contributions to the growth of our firm." Todd A. Benni (West Palm Beach and Cleveland) is an intellectual property attorney who has a wide range of experience advising both domestic and international clients. He helps clients obtain, manage and protect all types of intellectual property rights. Benni also has extensive experience providing legal advice and counseling to clients regarding advertising issues, such as CAN- SPAM, COPPA, sweepstakes, websites privacy policies, and terms of use of websites. Before joining McDonald Hopkins, Atty. Benni served as senior managing counsel, IP, advertising and licensing for a leading global supplier of office products and services. Atty. Benni has a J.D. from the University of Pittsburgh School of Law and a Bachelor of Science degree from Purdue University. He is the ambassador of the board of the Office Depot Foundation. Joseph J. Crimaldi (Cleveland) is an intellectual property attorney who provides strategic planning and intellectual property asset management, both foreign and domestic, for start-ups, publicly traded companies and universities. He has prepared and prosecuted patent applications in a wide variety of technical areas and has drafted patent validity and infringement opinions in the areas of trademark prosecution and litigation. Atty. Crimaldi has a J.D. from Cleveland-Marshall College of Law and a Bachelor of Science degree from Miami University. Nicole J. Gray (Cleveland) counsels employers on day-to-day human resource matters to ensure compliance with complex issues arising from federal and state employment laws. Her litigation experience includes representing employers in administrative proceedings and before federal and state courts in employment-related matters, with emphasis on defending complaints and/or charges of wrongful termination, discrimination, retaliation, and harassment; noncompliance with wage and hour laws; protected leave violations; breach of contract; defamation; and tortuous interference. Atty. Gray works with employers to develop effective strategies for implementing difficult employment business decisions related to reductions-in-force, disciplinary matters and employee separations. A frequent speaker on workplace compliance issues, Gray provides training to employers and employees on a variety of topics, including implementation of effective personnel policies and organizational management/behavior. Gray has a J.D. from The Ohio State University Moritz College of Law and a Bachelor of Arts degree from Boston College. Atty. Gray was named as an Ohio Rising Star in 2012 and is a member of University Hospital's MacDonald Women's Hospital Leadership Council and a Board member of the Junior League of Cleveland. Lisa S. Lauer (Chicago) counsels businesses, business owners and investors in a wide array of industries. She has been involved in a broad range of transactions, such as mergers and acquisitions; dispositions; joint ventures and restructurings; public and private securities issuances and filings; private equity investments; corporate finance deals; 144A placements and subsequent registered exchange offers; tender offers, and going- private transactions. In addition, Lauer provides general corporate counseling and is skilled at drafting, analyzing and negotiating all types of commercial contracts and complex agreements. Lauer has a J.D. from the University of Michigan Law School and a Bachelor of Science degree from Wayne State University. She was selected for inclusion in Illinois Rising Stars in 2012 and has volunteered with numerous nonprofit organizations that provide support to urban development projects, mentoring of at-risk youth and survivors of domestic abuse. Scott M. Slaby (Cleveland) is an intellectual property attorney who helps clients in domestic and foreign patent preparation and procurement in the chemical, biochemical and mechanical arts, as well as preparing legal opinions regarding patentability, validity and right to market. In addition, Slaby has experience with trademark prosecution and counseling, intellectual property due diligence and assists in patent, trademark, copyright, and trade secret litigation; licensing, and agreement matters. Atty. Slaby has a J.D. from Cleveland-Marshall College of Law and graduated from John Carroll University with Master of Science and Bachelor of Science degrees. He serves on the Executive Committee of The Lawyers Guild of the Catholic Diocese of Cleveland Foundation. About McDonald Hopkins McDonald Hopkins has a more than 80-year history. The firm's comprehensive services are provided by teams of specialized attorneys and professionals in areas such as business law, litigation, business restructuring and bankruptcy, estate planning, government affairs, healthcare, intellectual property, labor and employment, and mergers and acquisitions. For more information about McDonald Hopkins, visit mcdonaldhopkins.com. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABSOLUTE SOFTWRE ABT CN 129.7 (4.8) 1.7 ADVANCED BIOMEDI ABMT US 0.2 (2.0) (1.6) AK STEEL HLDG AKS US 3,901.0 (360.6) 129.6 AMC NETWORKS-A AMCX US 2,173.4 (959.1) 542.5 AMER AXLE & MFG AXL US 2,441.2 (394.7) 169.7 AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2) AMERISTAR CASINO ASCA US 2,058.5 (28.0) 42.5 AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0 ARRAY BIOPHARMA ARRY US 108.1 (85.8) 17.2 ATLATSA RESOURCE ATL SJ 886.5 (270.4) 21.8 AUTOZONE INC AZO US 6,265.6 (1,548.0) (676.6) BERRY PLASTICS G BERY US 5,114.0 (472.0) 552.0 BOSTON PIZZA R-U BPF-U CN 162.9 (92.3) (0.3) CABLEVISION SY-A CVC US 6,991.7 (5,641.6) (286.1) CADIZ INC CDZI US 53.7 (6.9) 1.3 CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CHENIERE ENERGY CQP US 1,873.0 (442.2) 117.0 CHOICE HOTELS CHH US 857.7 (11.2) 402.1 CIENA CORP CIEN US 1,915.3 (60.3) 710.4 CINCINNATI BELL CBB US 2,702.7 (696.2) (52.8) CLOROX CO CLX US 4,355.0 (135.0) (685.0) DEAN FOODS CO DF US 5,553.1 (3.1) 185.6 DELTA AIR LI DAL US 44,720.0 (1,135.0) (6,236.0) DENNY'S CORP DENN US 328.9 (2.8) (20.3) DIRECTV DTV US 19,632.0 (4,045.0) 520.0 DOMINO'S PIZZA DPZ US 424.6 (1,369.1) 52.9 DUN & BRADSTREET DNB US 1,795.6 (821.9) (655.6) E2OPEN INC EOPN US 29.7 (34.5) (32.5) ELOQUA INC ELOQ US 37.5 (9.6) (14.2) FAIRPOINT COMMUN FRP US 1,877.4 (184.4) 51.6 FERRELLGAS-LP FGP US 1,397.3 (27.5) (50.9) FIESTA RESTAURAN FRGI US 286.0 2.6 (14.7) FIFTH & PACIFIC FNP US 900.5 (175.5) 130.9 GENCORP INC GY US 874.0 (171.3) 47.3 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GOLD RESERVE INC GRZ CN 78.3 (25.8) 56.9 GOLD RESERVE INC GRZ US 78.3 (25.8) 56.9 GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 HCA HOLDINGS INC HCA US 27,132.0 (6,943.0) 1,690.0 HOVNANIAN ENT-A HOV US 1,624.8 (404.2) 881.0 HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8) HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8) HYPERION THERAPE HPTX US 9.6 (41.8) (31.4) INCYTE CORP INCY US 312.0 (217.2) 154.4 INFINITY PHARMAC INFI US 113.0 (3.4) 70.2 IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2 JUST ENERGY GROU JE US 1,583.6 (245.9) (227.2) JUST ENERGY GROU JE CN 1,583.6 (245.9) (227.2) LIMITED BRANDS LTD US 6,589.0 (245.0) 1,316.0 LIN TV CORP-CL A TVL US 839.2 (51.8) 52.7 LORILLARD INC LO US 2,576.0 (1,568.0) 881.0 MARRIOTT INTL-A MAR US 5,865.0 (1,296.0) (1,532.0) MERITOR INC MTOR US 2,555.0 (933.0) 279.0 MONEYGRAM INTERN MGI US 5,185.1 (116.1) (35.3) MORGANS HOTEL GR MHGC US 545.9 (110.1) (7.0) MPG OFFICE TRUST MPG US 2,061.5 (827.9) - NATIONAL CINEMED NCMI US 794.2 (354.5) 95.8 NAVISTAR INTL NAV US 11,143.0 (358.0) 1,585.0 NB MANUFACTURING NBMF US 2.4 (0.0) (0.5) NEXSTAR BROADC-A NXST US 566.3 (170.6) 40.2 NPS PHARM INC NPSP US 186.9 (45.3) 130.3 NYMOX PHARMACEUT NYMX US 2.7 (7.7) (0.9) ODYSSEY MARINE OMEX US 22.4 (29.3) (26.9) OMEROS CORP OMER US 10.1 (20.5) (8.7) PALM INC PALM US 1,007.2 (6.2) 141.7 PDL BIOPHARMA IN PDLI US 259.8 (161.1) 144.3 PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PRIMEDIA INC PRM US 208.0 (91.7) 3.6 PROTECTION ONE PONE US 562.9 (61.8) (7.6) QUALITY DISTRIBU QLTY US 454.5 (29.8) 60.7 REGAL ENTERTAI-A RGC US 2,306.3 (542.3) 62.5 RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) REVLON INC-A REV US 1,173.9 (665.6) 177.8 RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SINCLAIR BROAD-A SBGI US 2,160.2 (66.3) (1.4) TAUBMAN CENTERS TCO US 3,096.1 (295.3) - TEMPUR-PEDIC INT TPX US 865.5 (12.1) 258.9 THRESHOLD PHARMA THLD US 86.3 (51.4) 71.2 TRULIA INC TRLA US 27.6 (3.2) (4.9) UNISYS CORP UIS US 2,397.9 (1,190.0) 463.1 VECTOR GROUP LTD VGR US 885.7 (119.5) 248.2 VERISIGN INC VRSN US 1,942.0 (59.2) 858.0 VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) VRINGO INC VRNG US 3.7 (1.4) 2.1 WEIGHT WATCHERS WTW US 1,193.6 (1,784.6) (259.9) ZOGENIX INC ZGNX US 64.9 (15.0) 7.5 ********* 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 ***