/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/121010.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 10, 2012, Vol. 16, No. 282 Headlines 360 GLOBAL: Files Form 10-Q for 1st Quarter of 2008 4 KIDS ENTERTAINMENT: Files Plan, Looks to Emerge With New Focus ABB/CON-CISE: Moody's Assigns 'B2' Corp. Family Rating AFA FOODS: Former Workers Move to Push Into Chapter 7 AMERICAN AIRLINES: Wins OK to Purchase 30th New Aircraft AMERICAN AIRLINES: Creditors Committee Won't Review Letter AMERICAN AIRLINES: Oct. 25 Hearing on BNY Adequate Protection Bid AMERICAN AIRLINES: Traffic Dropped 2.8% in September AMERICAN AIRLINES: American Eagle Pilots Ratify New CBA AMPAL-AMERICAN: U.S. Trustee Appoints 3-Member Creditors' Panel AMPAL-AMERICAN: Section 341 Meeting Adjourned to Oct. 24 ARCAPITA CAPITAL: Defends Ch. 11 Extension Bid Amid Objections AVENTINE RENEWABLE: S&P Withdraws 'SD' Corporate Credit Rating AWAS AVIATION: S&P Lifts CCR to 'BB+' on $800MM Loan Conversion BETTER ONLINE: Nasdaq Grants Hearing Request for Continued Listing BEVERAGES & MORE: Moody's Affirms 'Caa1' CFR/PDR; Outlook Stable BROADVIEW NETWORKS: Court Confirms Chapter 11 Plan CELL THERAPEUTICS: Offering 60,000 Series 17 Preferred Shares CENTRAL EUROPEAN: Has $94MM Loss in Q2, Amends Prior Financials CHINA AGRITECH: Rigrodsky & Long Files Fraud Class Action Lawsuit CHRIST HOSPITAL: Can Employ Maloof as Litigation Counsel CLEARWIRE CORP: Intel Owns 12.6% of Class A Shares COCOPAH NURSERIES: Wells Fargo Balks at Bid to Use Cash Collateral COLUMBUS COUNTRY CLUB: Judge Approves $1.6 Million Sale to EMCC CONTEC HOLDINGS: Court Confirms Chapter 11 Prepackaged Plan COLLEGE BOOK: Involuntary Chapter 11 Case Summary DALLAS ROADSTER: J. Bennett White Approved as Substitute Counsel DEWEY & LEBOEUF: Partner Settlements Approved; Examiner Bid Denied DEWEY & LEBOEUF: 2 Members Resign From Former Partners Committee DEWEY & LEBOEUF: Seaport Buys Two Swiss Post Claims DEWEY & LEBOEUF: Settlement Doesn't Require Large Contributions DIGITAL DOMAIN: Hearing on West Palm Bid Reset to Oct. 23 DIGITAL DOMAIN: U.S. Trustee Appoints 3-Member Creditors' Panel DIGITAL DOMAIN: WARN Claimants Question Necessity for KEIP DIGITAL DOMAIN: Hiring FTI to Provide Financial Advisory Services DYNEGY HOLDINGS: Reconstitutes Board of Directors DYNEGY POWER: Fitch Revises Ratings Watch to Positive ENERGY TRANSFER EQUITY: S&P Affirms 'BB' CCR; Outlook Stable ENNIS COMMERCIAL: Schedules of Assets & Debts Filed for Ben Ennis FRIENDFINDER NETWORKS: Bell, Staton Named Non-Executive Chairmen GAMETECH INTERNATIONAL: Asset Sale Completed GAMMA MEDICA: Court Approves $1.5 Million DIP Financing GENE CHARLES: Court Approves Weir & Partners as Co-Counsel GENE CHARLES: Files Schedules of Assets and Liabilities GIBRALTAR CONSTRUCTION: Enters Bankruptcy in Puerto Rico GMX RESOURCES: To Sell Parcel of Texas and La. Assets for $69MM GRUBB & ELLIS: Faces $30 Million Suit Over Office RE Scheme HARTFORD COMPUTER: Levenfeld Helped Resolve Case for Creditors HOFMEISTER PERSONAL: Emerges From Chapter 11 INDALEX INC: Kirkland Can't Duck Suit Over $76MM Dividend Fraud INDIANAPOLIS DOWNS: CEO Gets OK to Examine Winning Bidder's Docs INFOTELECOM LLC: Broadvox-CLEC to Purchase Assets Out of Ch. 11 INSIGHT PHARMACEUTICALS: S&P Affirms 'B' Corporate Credit Rating JILL HOLDINGS: S&P Raises Corp. Credit Rating to 'B-'; Outlook Neg K-V PHARMACEUTICAL: Committee Proposes Stroock as Lead Counsel K-V PHARMACEUTICAL: Committee Retains D&P as Financial Advisor K-V PHARMACEUTICAL: Committee Retaining AGP as Regulatory Counsel K-V PHARMACEUTICAL: Can Employ Willkie Farr as Bankruptcy Counsel KEOWEE FALLS: U.S. Trustee Seeks Chapter 7 Conversion LAKELAND DEVELOPMENT: Hires Henry Eshraghian as Tax Preparer LAND CONSERVANCY: Judge Dismisses Chapter 11 Case LAST MILE: Hires Parentebeard LLC as Tax Accountant LEHMAN BROTHERS: Dante Noteholders Win Appeal on Intervention LEHMAN BROTHERS: SIPA Trustee Settles LB Finance's $6-Bil. Claim LEHMAN BROTHERS: Hedge Fund Group Supports Trustee's Sale Appeal LEHMAN BROTHERS: Barclays Says FirstBank Claims Should Be Barred LEHMAN BROTHERS: Walton, et al. Sue Over Properties LEVEL 3: Announces Pricing of $1.2 Billion Term Loan Refinancing LEVI STRAUSS: Signs Separation Agreement with Aaron Boey LOCATION BASED TECHNOLOGIES: Launches PF886 Tracking Device LON MORRIS: College to Be Sold at Auction LPATH INC: Effects a 1-for-7 Reverse Split of Class A Shares MARTIN COUNTY MARINE: Plan Confirmation Hearing on Oct. 11 MEDIA GENERAL: S&P Hikes CCR to 'B-' on Tampa Tribune Sale Deal MEHR IN LOS ANGELES: Files for Chapter 11 in Los Angeles MERVYN'S LLC: Creditors Land $166 Million LBO Settlement MF GLOBAL: Parent Not Treated as Broker Liquidation MOTHER EARTH'S ALTERNATIVE: Court Dismisses Chapter 11 Case MT. VERNON PROPERTIES: Oct. 31 Hearing on Case Dismissal Bid NASSAU BROADCASTING: Seeks 8-Week Extension to File Plan NEWPAGE CORP: Senior Lenders to Recover 56.6% Under Plan NORTHSTAR AEROSPACE: Court Approves Bid to Reject CBA OCALA FUNDING: Taylor Bean Unit Sues to Recover Fraudulent Payment OCWEN FIN'L: Fitch Puts 'B+' IDR on Watch Negative Over HRH Deal ODYSSEY DIVERSIFIED: Files Schedules of Assets and Liabilities PACIFIC GOLD: Issues 813.3 Million Common Shares to Executives PATRIOT COAL: Caterpillar Objects to Bid to Move Ch. 11 Case PATRIOT COAL: Objects to Automatic Stay Motion PEAK 10: Moody's Assigns 'B3' Corp. Family Rating PENNFIELD CORPORATION: Case Summary & Creditors List PEREGRINE FINANCIAL: Vision Financial Buys Bulk Transfer PINNACLE AIRLINES: Unions Balk at Bid to Void Labor Contracts PINNACLE AIRLINES: T. Schmidt Succeeds A. McDuffie as PAO PITTSBURGH CORNING: Plan Confirmation Hearing Today in Pittsburgh RADAR PICTURES: Former Associates to Face Suit Over Takeover RADIOSHACK CORP: Board OKs Salary Hike for CFO, CEO to $750,000 RADIOSHACK CORP: Significant Decline Cues Fitch to Junk Ratings RAHA LAKES: Case Summary & 13 Largest Unsecured Creditors RAILAMERICA INC: S&P Withdraws 'BB-' CCR on Merger Completion RENEGADE HOLDINGS: Plan Confirmation Hearing Held Tuesday RESIDENTIAL CAPITAL: FGIC Demands $193.7 Million to Cure Breaches RESIDENTIAL CAPITAL: MBS Insurers Rail Against Portfolio Sales RESPONSE GENETICS: Regains Compliance With NASDAQ Standards RITZ CAMERA: Wants Until January to File Liquidating Plan SANTEON GROUP: Incurs $75,000 Net Loss in First Quarter SEALY CORP: Paul Glazer Discloses 6.1% Equity Stake SILOAM SPRINGS: Files for Chapter 9 in Arkansas SILOAM SPRINGS: Chapter 9 Case Summary & Creditor List SIONIX CORP: Signs $1 Million Securities Purchase Agreement SOLYNDRA LLC: UNITE HERE Denounces Reorganization Plan SOUTHERN AIR: Plan to Relocate to CVG On Hold SOUTHERN AIR: Keeps Two B747-400s for Now TECHNEST HOLDINGS: To Borrow $100,000 from Khal Aljerian TOM MARTINO: Asks Court to Convert Liquidating Case to Chapter 11 TRAFFIC CONTROL: Court Approves DSI Hiring, Berman as CRO UNIGENE LABORATORIES: Richard Levy Discloses 65.3% Equity Stake UNITED RETAIL: Plan of Liquidation Became Effective UPPER CRUST: Pizza Chain Files to Reorganize in Boston VISUALANT INC: PMB Succeeds Madsen & Associates as Accountant W.R. GRACE: Wayne Storage Site Removed From Superfund List W.R. GRACE: May Face Lawsuit Over Unpaid Water Bills W.R. GRACE: To Release Third-Quarter Results on Oct. 24 YNOT LLC: Files for Bankruptcy to Restructure $1 Million Debt ZACKY FARMS: Files for Chapter 11 to Reorganize * Moody's Says Global Corporate Default Rate Up 3% in 3Q2012 * Debt of Dissolved Company Not Discharged for Owners * Kramer Levin Has Most "Top 100" Attys. On NY Super Lawyers List * Upcoming Meetings, Conferences and Seminars ********* 360 GLOBAL: Files Form 10-Q for 1st Quarter of 2008 --------------------------------------------------- 360 Global Investments recently filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $0 on $0 of revenue for the three months ended March 31, 2008, compared with a net loss of $1.55 million on $0 of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2008, showed $250,000 in total assets, $250,000 in total liabilities and $0 in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/UsVnBh 360 Global reported 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. On Dec. 12, 2008, 360 Global's Disclosure Statement and Plan of Reorganization was confirmed by U.S. 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. In order 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 - done * 10K annual report for the year ended Dec. 31, 2007-done * 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. 4 KIDS ENTERTAINMENT: Files Plan, Looks to Emerge With New Focus ---------------------------------------------------------------- Rachel Feintzeig at Dow Jones' DBR Small Cap reports that 4Kids Entertainment Inc. introduced its Chapter 11 plan, which would repay unsecured creditors in full and set the business up for a new life as a more streamlined licensing agent with a fresh appetite for sports deals. Lisa Uhlman at Bankruptcy Law360 reports that 4Kids' plan calls for the payment in full of secured and unsecured claims and the preservation of common stock. Bankruptcy Law360 relates that the company argues in a disclosure statement accompanying and explaining the plan that it maximizes the value of 4Kids' estate and that any alternative, such as liquidation, would result in delays, additional costs and possible litigation. About 4Kids Entertainment New York-based 4Kids Entertainment, Inc., dba 4Kids, is an entertainment and media company specializing in the youth oriented market, with operations in these business segments: (i) licensing, (ii) advertising and media broadcast, and (iii) television and film production/distribution. The parent entity, 4Kids Entertainment, was organized as a New York corporation in 1970. 4Kids filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code to protect its most valuable asset -- its rights under an exclusive license relating to the popular Yu-Gi-Oh! series of animated television programs -- from efforts by the licensor, a consortium of Japanese companies, to terminate the license and force 4Kids out of business. 4Kids and affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims and notice agent. BDO Capital Advisors, LLC, is the financial advisor and investment banker. EisnerAmper LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids Entertainment disclosed $78,397,971 in assets and $86,515,395 in liabilities as of the Chapter 11 filing. Hahn & Hessen LLP serves as counsel to the Official Committee of Unsecured Creditors. Epiq Bankruptcy Solutions LLC serves as its information agent for the Committee. The Consortium consists of TV Tokyo Corporation, which owns and operates a television station in Japan; ASATSU-DK Inc., a Japanese advertising company; and Nihon Ad Systems, ADK's wholly owned subsidiary. The Consortium is represented by Kyle C. Bisceglie, Esq., Michael S. Fox, Esq., Ellen V. Holloman, Esq., and Mason Barney, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP, in New York. In January 2012, the bankruptcy judge ruled in favor of 4Kids, deciding that the Yu-Gi-Oh! property license agreement between the Debtor and the licensor was not effectively terminated prior to the bankruptcy filing. Following the ruling, 4Kids entered into a settlement where it would receive $8 million to end the dispute over its valuable Yu-Gi-Oh! Property. ABB/CON-CISE: Moody's Assigns 'B2' Corp. Family Rating ------------------------------------------------------ Moody's Investors Service assigned a B2 Corporate Family Rating and a B3 Probability of Default Rating to ABB/Con-Cise Optical Group LLC. At the same time, Moody's assigned B2 (LGD 3, 31%) ratings to the company's proposed first lien senior secured credit facilities, including a $115 million senior secured first lien term loan B and a $40 million senior secured first lien revolver. The proceeds from the senior secured credit facilities will be used, along with an equity contribution, to finance the acquisition of ABB Concise by New Mountain Capital ("NMC") from current owners, including Riordan, Lewis & Haden, and pay transaction fees and expenses. The outlook for the ratings is stable. The ratings reflect the significant common equity contribution by NMC as well as rollover equity by management and existing shareholders. This is the first time Moody's has publicly rated ABB Concise. All ratings are subject to review of final documentation. Moody's assigned the following ratings: $40 million senior secured first lien revolving credit facility, rated B2 (LGD 3, 31%) $115 million senior secured first lien term loan B, rated B2 (LGD 3, 31%) Corporate Family Rating, B2 Probability of Default Rating, B3 Ratings Rationale "The B2 Corporate Family Rating reflects the company's small absolute size based on revenue and earnings, relatively high financial leverage, and limited business-line and supplier diversity," stated Daniel Gon‡alves, an Analyst at Moody's Investors Service. "However, ABB Concise's credit profile benefits from the company's leading scale and market position among U.S. distributors of soft contact lenses, stable operating margins, solid diversity across both customers and geographies, and good customer retention rates," continued Gon‡alves. On a pro forma basis for the twelve months ended June 30, 2012, the company's adjusted debt to EBITDA was approximately 4.5 times. Moody's expects this metric to improve to approximately 4.3 times on an adjusted basis for the twelve months ended September 30, 2012, on a pro forma basis for the realization of cost savings related to headcount reductions. Over the intermediate-term, Moody's expects ABB Concise to benefit from favorable fundamentals within the U.S. optical industry, as well as increased technological innovation within contact lens market. The rating outlook is stable, reflecting Moody's expectation that financial leverage will improve over the next 12 to 18 months, and that working capital will improve such that the company will exhibit improved free cash flow to debt. That said, it is unlikely that these improvements will be sufficient to warrant a higher rating over this time period, given the company's small size and limited business-line and supplier diversity. While an upgrade is unlikely over the near-term, the ratings could be upgraded if positive free cash flow is sustained, and leverage is permanently reduced to below 3.5 times. Moody's could downgrade the ratings if there is a material contraction in the level of operating cash flow, such that free cash flow remains negative or if leverage rises above 5.0 times on a sustained basis. In addition, the ratings could be lowered if the company's liquidity deteriorates. The principal methodology used in rating ABB Concise 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. Headquartered in Coral Springs, Florida, ABB Concise is the largest distributor of soft contact lenses in the United States, supplying over 20,000 eye care professionals ("ECP"), including approximately 15,000 independent ECPs and 5,000 other ECPs, including national retail chains and franchisees. Following an LBO transaction, the company will be privately-owned by New Mountain Capital, a private-equity sponsor. For the twelve months ended September 30, 2012, the company generated total revenues of approximately $503 million. AFA FOODS: Former Workers Move to Push Into Chapter 7 ----------------------------------------------------- A class of more than 400 former workers displaced by AFA Foods Inc.'s collapse are pushing to have the failed meat processor kicked out of Chapter 11 bankruptcy and forced into a Chapter 7 liquidation. Jamie Santo at Bankruptcy Law360 reports that the putative class of ex-employees wants the company liquidated in Chapter 7, saying the proposed global settlement would leave nothing left for them to recover. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. was one of the largest processors of ground beef products in the United States. The Company had five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA had seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings -- BLBT -- affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. AFA Foods, Inc., disclosed $615,859,574 in assets and $544,499,689 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. The Committee has obtained approval to hire McDonald Hopkins LLC as lead counsel and Potter Anderson & Corroon LLP serves as co-counsel. The Committee also obtained approval to retain J.H. Cohn LLP as its financial advisor, nunc pro tunc to April 13, 2012. AFA, in its Chapter 11 case, sold plants and paid off the first- lien lenders and the loan financing the Chapter 11 effort. Remaining assets are $14 million cash and the right to file lawsuits. General Electric Capital Corp. and Bank of America Corp. provided about $60 million in DIP financing. The loan was paid off in July. Yucaipa, the owner and junior lender, has agreed to a settlement that would generate cash for unsecured creditors under a liquidating Chapter 11 plan. Under the deal, Yucaipa will receive $11.2 million from the $14 million, with the remainder earmarked for unsecured creditors. Asset recoveries above $14 million will be split with Yucaipa receiving 90% and creditors 10%. Proceeds from lawsuits will be divided roughly 50-50. In return, Yucaipa will receive release from claims and lawsuits the creditors might otherwise bring. An affiliate of Yucaipa has a $71.6 million second lien and would claim the remaining assets absent settlement. AMERICAN AIRLINES: Wins OK to Purchase 30th New Aircraft -------------------------------------------------------- Judge Sean Lane gave American Airlines Inc. the go-signal to purchase from The Boeing Co. a Boeing 737-823 aircraft bearing U.S. Registration No. N904NN, and to implement a sale and simultaneous leaseback of the aircraft with International Lease Finance Corp. Since the Petition Date, the Debtors have sought and obtained permission from the Court to purchase almost 30 aircraft from Boeing and enter into sale and leaseback transactions with respect to the purchased aircraft. 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: Creditors Committee Won't Review Letter ---------------------------------------------------------- The committee of AMR Corp.'s unsecured creditors dropped its motion filed September 6, seeking to review the letter it received from a certain Brian McDaniel. Mr. McDaniel wrote to the Bankruptcy Court on July 12 requesting that the Court review the Internal Revenue Service's denial of his request for the turnover of documents related to AMR. The committee wanted a copy of the letter, which was filed under seal, to investigate any wrongful "act and conduct" of AMR and its affiliated debtors. 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: Oct. 25 Hearing on BNY Adequate Protection Bid ----------------------------------------------------------------- AMR Corp. and The Bank of New York Mellon Trust Company, N.A., agreed to adjourn to October 30 the hearing on BNY's motion for adequate protection. The companies also agreed to extend the deadline for filing objections to the motion to October 19. Replies to the objections are due by October 25. This is the second adjournment. The hearing was previously scheduled Oct. 9. For purposes of any adequate protection granted to BNY, the parties agree that the extension of the hearing on the motion will not prejudice BNY's rights. To the extent any adequate protection is awarded to BNY, it will date back to no later than June 5, 2012. BNY Mellon is indenture trustee for roughly $1.3 billion in JFK Special Facility Revenue Bonds, $300 million in LAX Facilities Sublease Revenue Bonds, and $450 million in Tulsa Revenue Bonds. These tax-exempt municipal Bonds were issued by special financing entities of the cities of New York, Los Angeles, and Tulsa, respectively, and the proceeds of the issuances were provided to the Debtors to finance improvements and the construction of certain terminal and maintenance facilities occupied and used by American at the John F. Kennedy International Airport, Los Angeles International Airport, and Tulsa International Airport. The principal collateral securing repayment of the Bonds consist of the Indenture Trustee's interests in certain ground leases of terminal and maintenance facilities at the Airports. "With every day that passes in these cases, American is consuming the Collateral Leases as the remaining terms of these ground leases run. As time passes, the value of the Indenture Trustee's security interests decreases as well . . .," Amy Caton, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, said in the motion. Accordingly, rather than engage at this time in a full scale valuation process to determine the precise amount of lost value, the Indenture Trustee is seeking protection in the form of additional liens and an allowed superpriority claim pursuant to Section 507(b) of the Bankruptcy Code, Ms. Caton relays. 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: Traffic Dropped 2.8% in September ---------------------------------------------------- AMR Corp., which wrestled with weeks of pilot sick calls, a rise in maintenance write-ups and then problems with aircraft seats coming loose on some of its Boeing 757s, said its total traffic declined 2.8% in September, compared with the year-earlier month, and domestic traffic fell by 7.1%. According to a press release by the company, September's consolidated passenger revenue per available seat mile (PRASM) increased an estimated 4.0 percent versus the same period last year, continuing the positive trend the airline has seen throughout this year. Absent the impact of operational challenges due to flight cancellations and delays during the second half of September, unit revenue improvement would have been approximately 0.4 points higher. Consolidated capacity and traffic were 3.4 percent and 2.8 percent lower year-over-year respectively, resulting in a consolidated load factor of 81.1 percent, an increase of 0.5 points versus the same period last year. International load factor increased 3.0 points to 83.6 percent, as traffic increased 3.2 percent on 0.5 percent less capacity. The Atlantic entity recorded the highest load factor of 86.9 percent, an increase of 4.0 points versus September 2011. Domestic capacity and traffic were 5.5 percent and 7.1 percent lower year-over-year, respectively, resulting in a domestic load factor of 80.5 percent, 1.4 points lower compared to the same period last year. On a consolidated basis, the company boarded 8.3 million passengers in September. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. AMERICAN Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: American Eagle Pilots Ratify New CBA ------------------------------------------------------- The American Eagle pilots, represented by the Air Line Pilots Association, Int'l (ALPA) ratified a bankruptcy restructuring agreement that both ALPA and Eagle's senior executives tentatively agreed to in August. With more than 85 percent of eligible pilots casting ballots, 75 percent of Eagle pilots voted in favor of the agreement. Representatives of the American Eagle Master Executive Council (MEC), the union's governing body, approved the tentative agreement in September and sent it out for a ratification vote to all Eagle pilots. "We are pleased with the level of pilot participation in this very important process as well as the result of the vote," said Capt. Tony Gutierrez, chairman of the EGL unit of ALPA. "Emerging from bankruptcy with the majority of our hard fought contract in place is a major achievement in helping ensure that Eagle remains a viable career choice for both existing and future pilots. The hard work is not yet over but a massive piece of this process is now complete and we look forward to expeditious approval from the Court." The newly-ratified contract will now be submitted to the bankruptcy court for 2nd District of New York for final approval. Founded in 1931, the Air Line Pilots Association, International (ALPA) is the largest airline pilot union in the world and represents nearly 51,000 pilots at 35 U.S. and Canadian airlines, including the more than 3,100 pilots at American Eagle. 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). AMPAL-AMERICAN: U.S. Trustee Appoints 3-Member Creditors' Panel --------------------------------------------------------------- Tracy Hope Davis, U.S. Trustee for Region 2, pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Ampal-American Israel Corp. The Creditors Committee members are: 1. Reznik Paz Nevo R.P.N. Trusts 2007 Ltd. Attn: Arye Danziger 1 Azrieli Center (Round Bldg., 22nd floor) Tel Aviv 67201 Israel 2. Hermetic Trust (1975) Ltd. Attn: Dan Offer P.O. Box 3524 Tel Aviv 61034 Israel 3. Mishmeret - Trusts Company Ltd. Attn: Ofer Shapira 5 Azrieli Center (Square Tower, 27th floor) Tel Aviv 67025 Israel About Ampal-American Ampal-American Israel Corporation and its subsidiaries -- http://www.ampal.com/-- acquired interests primarily in businesses located in Israel or that are Israel-related. Ampal is seeking opportunistic situations in a variety of industries, with a focus on energy, chemicals and related sectors. Ampal's goal is to develop or acquire majority interests in businesses that are profitable and generate significant free cash flow that Ampal can control. Ampal-American filed a voluntary petition for Chapter 11 reorganization (Bankr. S.D.N.Y. Case No. 12-13689) on Aug. 29, 2012. The Company is pursuing a plan to restructure the Company's Series A, Series B and Series C debentures. Bankruptcy Judge Stuart M. Bernstein presides over the case. Lawyers at Bryan Cave LLP, in New York, serves as counsel to the Debtor. As of June 30, 2012, the Company had US$542.3 million in total assets and US$775.2 million in total liabilities. The petition was signed by Irit Eluz, chief financial officer, senior vice president. AMPAL-AMERICAN: Section 341 Meeting Adjourned to Oct. 24 -------------------------------------------------------- The Section 341 meeting of creditors and equity security holders in the Chapter 11 case of Ampal-American Israel Corporation, scheduled to take place on Oct. 17, 2012, has been adjourned to Oct. 24, 2012, at 2:00 p.m.. The 341 meeting will be held at 80 Broad Street, 4th Floor, New York. About Ampal-American Ampal-American Israel Corporation and its subsidiaries -- http://www.ampal.com/-- acquired interests primarily in businesses located in Israel or that are Israel-related. Ampal is seeking opportunistic situations in a variety of industries, with a focus on energy, chemicals and related sectors. Ampal's goal is to develop or acquire majority interests in businesses that are profitable and generate significant free cash flow that Ampal can control. Ampal-American filed a voluntary petition for Chapter 11 reorganization (Bankr. S.D.N.Y. Case No. 12-13689) on Aug. 29, 2012. The Company is pursuing a plan to restructure the Company's Series A, Series B and Series C debentures. Bankruptcy Judge Stuart M. Bernstein presides over the case. Lawyers at Bryan Cave LLP, in New York, serves as counsel to the Debtor. As of June 30, 2012, the Company had US$542.3 million in total assets and US$775.2 million in total liabilities. The petition was signed by Irit Eluz, chief financial officer, senior vice president. ARCAPITA CAPITAL: Defends Ch. 11 Extension Bid Amid Objections -------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that Arcapita Bank BSC(c) defended its request for more time to file a Chapter 11 plan Thursday, saying a group of lenders mischaracterized the case as less complex than it is and promoted the "irrational conclusion" that the debtor's plan is almost ready. The Islamic bank filed a reply to the ad hoc group's objection to its second bid for an extension of the exclusivity periods for filing a reorganization plan and soliciting acceptances for it, according to Bankruptcy Law360. 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. AVENTINE RENEWABLE: S&P Withdraws 'SD' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'SD' corporate credit rating on U.S. ethanol producer Aventine Renewable Energy Holdings Inc. "We also withdrew our ratings on the company's debt. We withdrew all the ratings at the company's request," S&P said. AWAS AVIATION: S&P Lifts CCR to 'BB+' on $800MM Loan Conversion --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on AWAS Aviation Capital Ltd., including raising the corporate credit rating to 'BB+' from 'BB', and removed the ratings from CreditWatch, where S&P placed them with positive implications on Oct. 5, 2012. The conversion of shareholder loans has reduced AWAS' debt to capital by about 8% to the high-70% area from the mid-80% area. "The company's debt leverage had been among the highest of its rated peers, and the conversion of shareholder loans into equity narrows the gap somewhat," said Standard & Poor's credit analyst Betsy Snyder. "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 (FFO) to debt to remain at about 9%." "The ratings on AWAS reflect its position as a large provider of aircraft operating leases and its diversified fleet and airline customer base. 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," S&P said. "The outlook is stable. We expect AWAS' financial profile to remain relatively consistent into 2013, with higher earnings and cash flow offsetting incremental debt to fund new aircraft deliveries. We could lower the ratings if AWAS completed a large debt-financed aircraft portfolio acquisition or debt-financed dividend to its owners, causing FFO to debt to decline to the mid- single-digit percent area. We do not foresee an upgrade given the company's ownership structure--it is owned by funds managed by private equity firm Terra Firma and Canada Pension Plan Investment Board (CPPIB). We typically do not rate transportation equipment lessors owned by private equity higher than 'BB+' because of financial policy concerns," S&P said. BETTER ONLINE: Nasdaq Grants Hearing Request for Continued Listing ------------------------------------------------------------------ B.O.S. Better Online Solutions Ltd. disclosed that it received a written notice from the Nasdaq Hearing Panel granting the Company's request for continued listing on The Nasdaq Stock Market until the end of 2012. On Jan. 17, 2012, the Nasdaq Staff initially notified the Company that the bid price of its listed security had closed at less than $1.00 per share over the previous 30 consecutive business days, and, as a result, did not comply with Listing Rule 5550(a)(2). The Company has not regained compliance with the Rule within the 180 calendar days provided under Listing Rule 5810(c) (3) (A) and its securities were therefore subject to delisting. On July 19, 2012, the Company requested a hearing with the Panel, and a hearing was held on Aug. 30, 2012. The Panel determined that the continued listing of the Company's securities on Nasdaq is contingent on: -- The Company affecting a reverse stock split in the ratio of 1 for 4 by not later than Dec. 15, 2012. -- On or before Jan. 16, 2013, the Company must evidence a closing bid price of $1.00 or more for a minimum of ten prior consecutive trading days. -- On or before Oct. 31, 2012, the Company must inform the Panel in writing that the Board of Directors has authorized a shareholders meeting in order to consider and vote upon a reverse stock split by setting a date for the meeting and including in the agenda a vote to approve a reverse stock split in the ratio of 1 for 4. There can be no assurance that such reverse split shall be approved or that, if approved, the closing bid price shall be $1.00 or more for a minimum of ten prior consecutive trading days. Furthermore, the Panel has reserved the right to extend the aforementioned ten-day period and to reconsider the continued listing based on any event, condition or circumstance that exists or develops that would, in the opinion of the Panel, make continued listing inadvisable or unwarranted. In the event that the Company's securities are delisted from the Nasdaq Market, the Company would seek to have its ordinary shares quoted in the over-the-counter market. About BOS B.O.S. Better Online Solutions Ltd. is a leading provider of RFID and Supply Chain solutions to global enterprises. BOS' RFID and mobile division offers both turnkey integration services as well as stand-alone products, including best-of-breed RFID and AIDC hardware and communications equipment, BOS middleware and industry-specific software applications. The Company's supply chain division provides electronic components consolidation services to the aerospace, defense, medical, automotive and telecommunications industries as well as to enterprise customers worldwide. BEVERAGES & MORE: Moody's Affirms 'Caa1' CFR/PDR; Outlook Stable ---------------------------------------------------------------- Moody's Investors Service revised Beverages & More, Inc.'s ("BevMo") outlook to stable from positive. Concurrently, Moody's affirmed all existing ratings including the Caa1 corporate family rating, the Caa1 probability of default rating, and the Caa1 senior secured notes rating. The following ratings have been affirmed and LGD revised: - Corporate family rating at Caa1 - Probability of default rating at Caa1 - $125 million senior secured notes rating at Caa1 (LGD4, 53% from 54%) Ratings Rationale The revision of the outlook to stable from positive reflects Moody's opinion that an upgrade in the near to intermediate term has become less likely as the rate of credit metrics improvements has been slower than expected. While comparable store sales growth still remains positive, the rate of growth has slowed compared to last year. The economic recovery on the West Coast remains sluggish and the traditional grocery store chains -- which sell alcohol and compete with BevMo -- remain heavily promotional. BevMo's debt/EBITDA remains high at above 7x for the twelve months ended July 14,2012, and Moody's expects the metric to remain in the low-7.0x range over the next twelve months, a level not consistent with a higher rating (all metrics include Moody's analytical adjustments). The Caa1 corporate family rating reflects BevMo's weak credit metrics that stem mainly from the 2007 leveraged buy-out of the company by TowerBrook Capital Partners, L.P., a subsequent debt- funded dividend, and the precarious economic conditions in the regions the company operates. The company's small size and limited geographic footprint relative to other retailers are also significant ratings constraints. At the same time, supporting the rating are the company's established position within its core markets, growth track record including this year's entrance into Washington, and the expectation for adequate liquidity over the next twelve months. The stable outlook reflects Moody's expectations of modest sales growth from store openings and flat-to-low-single digit positive comparable store sales balanced with the tepid economic conditions particularly in the areas of BevMo's operations. The outlook also incorporates Moody's belief that the company will maintain adequate liquidity. An upgrade in the near term is unlikely given slower than expected operating performance improvements and the revision of the outlook to stable from positive. Moody's would consider an upgrade with sustained increases in comparable store sales, improved operating margins, positive free cash flow, and a commitment towards deleveraging. Specific metrics include debt/EBITDA sustained below 7.0x and EBITA/interest expense sustained above 1.0x. Downward pressure on the ratings could arise if operating performance falls below current expectations, if comparable store sales growth turns and remains negative, if liquidity weakens in any way, or if financial policies become more aggressive. The principal methodology used in rating Beverages & More, 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. Beverages & More, Inc. is an alcoholic beverage retailer. The company operated a total of 118 stores, with 52 in Northern California, 54 in Southern California, 10 in Arizona, and two in Washington as of July 14, 2012. Private equity sponsor TowerBrook Capital Partners, L.P. has owned the company since 2007. BROADVIEW NETWORKS: Court Confirms Chapter 11 Plan -------------------------------------------------- The U.S. Bankruptcy Court approved Broadview Networks Holdings' Disclosure Statement and concurrently confirmed its Joint Prepackaged Plan of Reorganization. BankruptcyData.com reports that the Plan provides for: (a) Holders of the senior secured notes will receive 97.5% of the new equity and $150 million of new five-year 10.5% senior secured notes. (b) Holders of the existing preferred interests will receive 2.5% of the new equity and two series of eight-year warrants to purchase up to: (i) 11% of the new common stock and (ii) 4% of the new common stock. (c) A new ABL facility with a minimum $25 million commitment will be issued. (d) The ABL facility will be repaid. (e) Other existing equity interests will be cancelled. This plan, which was supported by an overwhelming majority of Broadview Networks' stakeholders, will reduce the Company's outstanding debt securities by half. Broadview Networks anticipates final regulatory approvals will be obtained within the next few weeks. With this done, it will allow the company to emerge from bankruptcy in short order, consistent with the Company's previously announced timeline. Upon emergence, Broadview Networks will have greatly delevered its capital structure, reduced its senior secured notes by 50% from $300 million to $150 million, reduced its annual interest expense by approximately $18 million, and have access to free cash flow that will be used for, among other things, general working capital purposes and growth opportunities. With this new capital structure, Broadview's leverage will be below the average level of its peers. The new debt structure will include a five year term on the new $150 million senior secured notes and $25 million in exit financing in the form of a revolving credit facility. "Our financial restructuring resolves our debt maturity issues and provides a more appropriate capital structure for the company," said Michael K. Robinson, President and Chief Executive Officer of Broadview Networks. "I would like to thank all of Broadview's customers, employees, trading partners, debt and equity stakeholders and our current board of directors for their continued support during our restructuring process. The entire team at Broadview is excited about our greater financial flexibility, allowing us to invest in growth opportunities and further expand our market position in cloud-based services." About Broadview Networks Rye Brook, N.Y.-based Broadview Networks Holdings, Inc., is a communications and IT solutions provider to small and medium sized business ("SMB") and large business, or enterprise, customers nationwide, with a historical focus on markets across 10 states throughout the Northeast and Mid-Atlantic United States, including the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington, D.C. Broadview Networks and 27 affiliates on Aug. 22, 2012, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-13579) with a plan that will eliminate half of the debt under the Company's existing senior secured notes and lower interest expense by roughly $17 million annually. The Company's restructuring counsel is Willkie Farr & Gallagher LLP and its financial advisor is Evercore Group, L.L.C. Bingham McCutchen LLP is the special regulatory counsel. Kurtzman Carson Consultants is the claims and notice agent. The restructuring counsel for the ad hoc group of noteholders is Dechert LLP and their financial advisor is FTI Consulting. CELL THERAPEUTICS: Offering 60,000 Series 17 Preferred Shares ------------------------------------------------------------- Cell Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission a free writing prospectus relating to the offering of 60,000 shares of Series 17 Preferred Stock (42.9 million shares of common stock issuable upon conversion of the Series 17 Preferred Stock) of the Company. Gross proceeds of the offering will be $60 million. The offering is expected to close on Oct. 11, 2012. Jefferies & Company, Inc., is acting as sole book-running manager for this offering, and Roth Capital Partners, LLC, and ThinkEquity LLC are acting as co-managers. A copy of the FWP is available for free at: http://is.gd/CvvKEN About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Cell Therapeutics reported a net loss attributable to CTI of US$62.36 million in 2011, compared with a net loss attributable to CTI of US$82.64 million in 2010. The Company's balance sheet at June 30, 2012, showed $38.34 million in total assets, $39.83 million in total liabilities, $13.46 million in common stock purchase warrants, and a $14.95 million total shareholders' deficit. Going Concern Doubt Raised The report of Marcum LLP, in San Francisco, Calif., dated March 8, 2012, expressed an unqualified opinion, with an explanatory paragraph as to the uncertainty regarding the Company's ability to continue as a going concern. The Company's available cash and cash equivalents are US$47.1 million as of Dec. 31, 2011. The Company's total current liabilities were US$17.8 million as of Dec. 31, 2011. The Company does not expect that it will have sufficient cash to fund its planned operations beyond the second quarter of 2012, which raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Form 10-K for the year ended Dec. 31, 2011, noted that if the Company receives approval of Pixuvri by the EMA or the FDA, it would anticipate significant additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and are currently exploring alternative sources of equity or debt financing. The Company may seek to raise that capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, the Company has a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, it may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CENTRAL EUROPEAN: Has $94MM Loss in Q2, Amends Prior Financials --------------------------------------------------------------- Central European Distribution Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $93.64 million on $402.75 million of sales for the three months ended June 30, 2012, compared with a net loss attributable to the Company of $3.33 million on $425.83 million of sales for the same period during the prior year. For the six months ended June 30, 2012, the Company reported a net loss attributable to the Company of $33.46 million on $724.50 million of sales, in comparison with a net loss attributable to the Company of $5.36 million on $743.91 million of sales for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $1.86 billion in total assets, $1.68 billion in total liabilities, $29.55 million in temporary equity, and $158.10 million in total stockholders' equity. Liquidity Certain credit and factoring facilities are coming due in 2012, which the Company expects to renew. Furthermore, the Company's Convertible Senior Notes are due on March 15, 2013. The Company's current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to make the repayment of principal on the Convertible Notes and, unless the transaction with Russian Standard Corporation is completed the Company may default on them. The Company's cash flow forecasts include the assumption that certain credit and factoring facilities that are coming due in 2012 will be renewed to manage working capital needs. Moreover, the Company had a net loss and significant impairment charges in 2011 and current liabilities exceed current assets at June 30, 2012. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The transaction with Russian Standard Corporation is subject to certain risks, including shareholder approval which may not be obtained. The Company's 2012 Annual Meeting of Stockholders, which was postponed due to the need to restate the Company's financial statements, is expected to be held as soon as practicable. The Company believes that if the transaction is completed as scheduled, the Convertible Notes will be repaid by their maturity date, which would substantially reduce doubts about the Company's ability to continue as a going concern. A copy of the Q2 2012 Form 10-Q is available for free at: http://is.gd/ZTaRjo Amends Periodic Reports CEDC amended its annual report for the year ended Dec. 31, 2011, and its quarterly reports for the period ended March 31, 2012, and Sept. 30, 2011. As previously disclosed, the Company changed its senior management at its principal operating subsidiary in Russia, the Russian Alcohol Group, during April 2012. Following this change, senior Company management requested that the new management team review RAG's business operations and internal controls, including an assessment of the resources and needs of the corporate finance and reporting departments. After completing its accounting investigation, the Audit Committee has identified accounting irregularities at RAG, which resulted in the understatement of retroactive trade rebates and trade marketing refunds, as well as certain other errors that were concealed from both the Company's senior management and the independent auditors. The Company's restated statements of operations at Dec. 31, 2011, reflect a net loss of $1.32 billion on $1.73 billion of sales, compared to a net loss of $1.29 billion on $1.78 billion of sales as originally reported. The Company's amended balance sheet at Dec. 31, 2011, showed $2.01 billion in total assets, $1.80 billion in total liabilities and $207.32 million in total stockholders' equity. The Company originally reported $2.07 billion in total assets, $1.80 billion in total liabilities and $266.37 million in total stockholders' equity. A copy of the amended 2011 Form 10-K is available for free at http://is.gd/ndjBu7 The Company's restated statements of operations for the three months ended Sept. 30, 2011, reflect a net loss of $848.73 million on $432.94 million of sales, in comparison with a net loss of $839.85 million on $451.59 million of sales as originally reported. A copy of the amended Q3 2011 Form 10-Q is available at http://is.gd/C6EGPb The restated statements of operations for the three months ended March 31, 2012, show net income attributable to the Company of $60.18 million on $321.75 million of sales, compared with net income attributable to the Company of $62.49 million on $323.97 million of sales as previously reported. A copy of the amended Q1 2012 Form 10-Q is available at http://is.gd/7TKxKa About CEDC Mt. Laurel, New Jersey-based Central European Distribution Corporation is one of the world's largest vodka producers and Central and Eastern Europe's largest integrated spirit beverages business with its primary operations in Poland, Russia and Hungary. Ernst & Young Audit sp. z o.o., in Warsaw, Poland, expressed substantial doubt about Central European'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 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. * * * As reported by the TCR on Aug. 10, 2012, Standard & Poor's Ratings Services kept on CreditWatch with negative implications its 'CCC+' long-term corporate credit rating on U.S.-based Central European Distribution Corp. (CEDC), the parent company of Poland-based vodka manufacturer CEDC International sp. z o.o. "The CreditWatch status reflects our view that uncertainties remain related to CEDC's ongoing accounting review and that CEDC's liquidity could further and substantially weaken if there was a breach of covenants which could lead to the acceleration of the payment of the 2016 notes, upon receipt of a written notice of 25% or more of the noteholders," S&P said. CHINA AGRITECH: Rigrodsky & Long Files Fraud Class Action Lawsuit ----------------------------------------------------------------- Rigrodsky & Long, P.A. discloses that it has filed a class action lawsuit in the U.S. District Court for the District of Delaware on behalf of all persons or entities that purchased the securities of China Agritech, Inc. between Nov. 12, 2009 and March 11, 2011, alleging violations of the Securities Exchange Act of 1934 against certain of the Company's officers. The case is entitled Smyth v. Chang, Case No. 12-cv-1262 (D. Del.). The firm can be reached at: Peter Allocco RIGRODSKY & LONG, P.A. 825 East Gate Boulevard, Suite 300 Garden City, NY Tel: (888) 969-4242 E-mail: info@rigrodskylong.com http://www.rigrodskylong.com/news/china-agritech-inc-cagc The Complaint alleges that China Agritech overstated its revenues and omitted to disclose significant related-party transactions. On Nov. 12, 2009, the Company filed a Form 10-Q with the U.S. Securities and Exchange Commission reporting its third quarter results. The 10-Q was false because it materially misstated the Company's revenue and net income for the quarter. The Company's Form 10-K, filed with the SEC on April 1, 2010, contained similar misstatements about the Company's revenue and net income, in addition to concealing related-party transactions involving China Agritech's Chief Executive Officer, Yu Chang. The 10-K indicated that the Company purchased 15% and 12% of its raw materials from Shenzhen Hongchou Technology Company Ltd. in fiscal 2009 and 2008, respectively. However, it failed to disclose that during that time, Defendant Chang owned 90% of Shenzhen Hongchou. Generally Accepted Accounting Principles, State of Financial Accounting Standards and SEC regulations all require the Company to disclose all material related-party transactions, which it failed to do. However, the truth started to reveal itself regarding the accuracy of China Agritech's financial statements. On Feb. 3, 2011, the research firm LM Research published a report asserting that China Agritech was engaged in fraud. The report concluded that the Company's financial statements were fraudulent, its purported revenue was overstated and that its plants were idle. As a result of the LM Research report, shares in China Agritech declined from a close of $10.78 on Feb. 2, 2011 to $9.85 on Feb. 3, 2011, on unusually high volume of over 2.6 million shares. Then, on Feb. 15, 2011, Bronte Capital issued a scathing report presenting additional facts indicating that China Agritech was engaged in fraud and could not possibly have produced the revenue it claimed in its financial statements. As a result of the Bronte Capital report, shares in China Agritech declined from a close of $9.21 on February 15, 2011 to $7.44 on Feb. 16, 2011, again on unusually high volume of over 2.8 million shares. On March 13, 2011, China Agritech announced the formation of a Special Committee of its Board of Directors to investigate the allegations of fraud that the Company maintained had been made by third parties. The next day, China Agritech announced in a Form 8-K filed with the SEC that Ernst & Young Hua Ming ("E&Y") had been dismissed as the Company's independent auditor. In explaining its reasons for the dismissal, the Company revealed that it had, in essence, concealed that E&Y had identified serious problems with its financial statements as early as Dec. 15, 2010 and had informed the Company's board that an internal investigation was necessary. Yet, the Company failed to correct the problems with the financial statements and failed to provide verification for certain transactions - prompting "E&Y [to] orally advise[] the Audit Committee that it may not be able to rely on management's representations based on the issues identified." Additionally, on March 14, 2011, the NASDAQ halted trading in China Agritech stock with its share price at $6.88 per share and initiated delisting proceedings. On May 20, 2011, after being delisted by the NASDAQ, China Agritech shares opened for trading on the pink sheets. That day, shares in China Agritech closed at $3.80 per share, a decline of $3.08 per share, or almost 45%. The firm says that entities who wish to serve as lead plaintiff must move the Court no later than Dec. 4, 2012. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Rigrodsky & Long, P.A., with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States. About China Agritech China Agritech, Inc. -- http://www.chinaagritechinc.com-- is engaged in the development, manufacture and distribution of liquid and granular organic compound fertilizers and related products in China. The Company has developed proprietary formulas that provide a continuous supply of high-quality agricultural products while maintaining soil fertility. The Company sells its products to farmers located in 28 provinces of China. CHRIST HOSPITAL: Can Employ Maloof as Litigation Counsel -------------------------------------------------------- The U.S. Bankruptcy Court for District of New Jersey has authorized Christ Hospital to employ Maloof, Lebowitz, Connahan & Oleske as its special litigation counsel, nunc pro tunc to Feb. 6, 2012. Maloof will be compensated on a contingency fee basis, according to its historical practice of netting 25% of the total settlement proceeds, as payment in full of fees and expenses incurred in the prosecution of any matters settled. Maloof will forfeit $15,000 of the $35,734 in postpetition fees received without seeking prior approval of the Bankruptcy Court. The Forfeiture will be returned to the Debtor's estate pursuant to a compromise and settlement of the Debtor's claims against Independent Care and United Health. Maloof will apply to the Court for approval of any settlements pursuant to the requirements of Bankruptcy Rule 9019, and seek approval of the contingency fee to be assessed if the proposed settlements are approved. About Christ Hospital Christ Hospital filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 12-12906) on Feb. 6, 2012. Christ Hospital, founded in 1872 by an Episcopalian priest, is a 367-bed acute care hospital located in Jersey City, New Jersey at 176 Palisade Avenue, serving the community of Hudson County. The Debtor is well-known for its broad range of services from primary angioplasty for cardiac patients to intensity modulated radiation therapy for those battling cancer. Christ Hospital is the only facility in Hudson County to offer IMRT therapy, which is the most significant breakthrough in cancer treatment in recent years. Christ Hospital filed for Chapter 11 after an attempt to sell the assets fell through. Judge Morris Stern presides over the case. Lawyers at Porzio, Bromberg & Newman, P.C., serve as the Debtor's counsel. Alvarez & Marsal North America LLC serves as financial advisor. Logan & Company Inc. serves as the Debtor's claim and noticing agent. The Health Professional and Allied Employees AFT/AFI-CIO is represented in the case by Mitchell Malzberg, Esq., at Mitnick & Malzberg P.C. DIP lender HFG is represented in the Debtor's case by Benjamin Mintz, Esq., at Kaye Scholer LLP and Paul R. De Filippo, Esq., at Wollmuth Maher & Deutsch LLP. Andrew H. Sherman, Esq., at Sills, Cummis & Gross, serves as counsel to the Official Committee of Unsecured Creditors. J.H. Cohn LLP serves as financial advisor to the committee. Suzanne Koenig of SAK Management Services, LLC, has been appointed as patient care ombudsman. She is represented by Greenberg Traurig as counsel. Hudson Hospital Holdco is represented in the case by McElroy, Deutsch, Mulvaney & Carpenter, LLP. Community Healthcare Associates is represented in the case by Lowenstein Sandler PC. Liberty Healthcare System, Inc., d/b/a Jersey City Medical Center, which joined in CHA's bid, is represented by Duane Morris LLP. CLEARWIRE CORP: Intel Owns 12.6% of Class A Shares -------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Intel Corporation disclosed that as of Oct. 3, 2012, it beneficially owns 94,076,878 shares of Class A Common Stock of Clearwire Corporation representing 12.6% of the shares outstanding. Intel previously reported beneficial ownership of 94,076,878 Class A shares representing 14.3% of the shares outstanding as of Aug. 29, 2012. A copy of the amended filing is available for free at http://is.gd/CaCTyG About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a provider of 4G mobile broadband network services in 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company reported a net loss attributable to the Company of $717.33 million in 2011, a net loss attributable to the Company of $487.43 million in 2010, and a net loss attributable to the Company of $325.58 million in 2009. The Company's balance sheet at June 30, 2012, showed $8.43 billion in total assets, $5.65 billion in total liabilities, and $2.78 billion in total stockholders' equity. * * * As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured first- lien issue-level ratings on Bellevue, Wash.-based wireless provider Clearwire Corp. to 'CCC' from 'CCC+'. The ratings on Clearwire continue to reflect its "highly leveraged" financial risk profile based on its high debt burden and "weak" liquidity (both terms as defined in S&P's criteria). "The ratings also reflect our view that Clearwire has a vulnerable business position as a developmental-stage company with significant competition from better capitalized wireless carriers, including AT&T Mobility and Verizon Wireless, which are deploying their own 4G wireless services," S&P said in January 2012. "We believe that the company would likely run out of cash in the late 2012 to early 2013 time frame absent significant asset sales, since we view the terms in the December 2011 wholesale agreement with Sprint Nextel as unfavorable in the near term and will likely constrain cash inflows in 2012 to 2013. We have not assumed spectrum sales in our liquidity assessment because of the uncertainty involved in finding a buyer, as well as timing. However, if the company could secure sufficient funding for operations through 2013, we could raise the ratings," S&P also stated. COCOPAH NURSERIES: Wells Fargo Balks at Bid to Use Cash Collateral ------------------------------------------------------------------ Wells Fargo Bank N.A. has opposed the entry of a third interim order authorizing Cocopah Nurseries of Arizona, Inc., to use cash collateral. Wells Fargo said that under the proposed order, the Debtor is unilaterally seeking to impose a five-week extension of the use of Wells Fargo's cash collateral without the bank's consent. Wells Fargo said the request should be denied because it was procedurally improper. Wells Fargo also argued that: * The Debtors are aware that Wells Fargo was agreeable to a limited extension of cash collateral which had been conveyed to the Debtors; however, the Debtors unilaterally decided to request a longer extension knowing that a longer extension was not acceptable to Wells Fargo. * Other than theorizing that nothing will have changed in two weeks, the Debtors present no justification and certainly no legal authority for either a unilateral extension or a longer extension. * A longer extension is not warranted at this time. Wells Fargo is represented by: Susan G. Boswell, Esq. John A. Harris, Esq. QUARLES & BRADY LLP One South Church Avenue, Suite 1700 Tucson, AZ 85701-1621 Telephone: (520) 770-8700 Facsimile: (520) 623-2418 E-mail: susan.boswell@quarles.com john.harris@quarles.com - and - M. David Minnick, Esq. PILLSBURY WINTHROP SHAW PITTMAN LLP 50 Fremont Street Post Office Box 7880 San Francisco, CA 94120-7880 Telephone: (415) 983-1351 Facsimile: (415) 983-1200 E-mail: dminnick@pillsburylaw.com Cocopah Nurseries of Arizona, Inc., and three affiliates sought Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 12-15292) on July 9, 2012. The affiliates are Wm. D. Young & Sons, Inc.; Cocopah Nurseries, Inc.; and William Dale Young & Sons Trucking and Nursery. Cocopah Nurseries is a Young-family owned agricultural enterprise with operations in Arizona and California. The core business involves the cultivation of palm trees and other trees used for landscaping purposes, as well as the associated farming of citrus, dates, and other crops. The Debtors presently own more than 250,000 palm trees in various stages of the tree-growth cycle. Cocopah has 250 full-time salaried employees, and taps an additional 50 to 250 contract laborers depending on the season. Revenue in 2010 was $23 million, down from $57 million in 2006. Judge Eileen W. Hollowell presides over the case. The Debtors' counsel are Craig D. Hansen, Esq., and Bradley A. Cosman, Esq., at Squire Sanders (US) LLP. The petitions were signed by Darl E. Young, authorized representative. Attorneys for Rabobank, N.A., are Robbin L. Itkin, Esq., and Emily C. Ma, Esq., at Steptoe & Johnson LLP, and S. Cary Forrester, Esq., at Forrester & Worth, PLLC. Non-debtor affiliate Jewel Date Company, Inc., is represented by Michael W. Carmel, Ltd., as counsel. COLUMBUS COUNTRY CLUB: Judge Approves $1.6 Million Sale to EMCC --------------------------------------------------------------- The Associated Press reports that a federal bankruptcy judge has approved East Mississippi Community College's acquisition of the Columbus Country Club. EMCC was the only bidder at $1.6 million. The AP, citing the Commercial Dispatch, EMCC officials said the school will use the property to expand its course offerings and relocate programs from crowded campus in Mayhew. According to the AP, the sale will only satisfy debt to the first primary secured creditor, a five-bank consortium to which the Country Club owes $1.52 million. The remaining primary secured creditors -- Cadence Bank and Columbus businessman David Shelton -- will not be repaid, according to court records. The country club owed Cadence $212,762 and Mr. Shelton $375,438. Based in Columbus, Massachusetts, Columbus Country Club Inc. filed for Chapter 11 bankruptcy protection (Bankr. N.D. Miss. Case No. 11-12005) on May 3, 2011. Craig M. Geno, Esq., at Harris Jernigan & Geno, PLLC, represents the Debtor. The Debtor estimated assets and debts of between $1 million and $10 million. CONTEC HOLDINGS: Court Confirms Chapter 11 Prepackaged Plan ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware confirmed on Oct. 4, 2012, the joint Chapter 11 prepackaged plan of reorganization of CHL, Ltd., and its debtor-affiliates. The plan swaps $201 million in senior secured debt for 80% of the new equity and $27.5 million in new second-lien notes. The plan was accepted by the required percentages of affected creditors before the Chapter 11 filing. Unsecured trade suppliers are being paid in full. A copy of the confirmation order is available at: http://bankrupt.com/misc/chl.confirmationorder.pdf 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. COLLEGE BOOK: Involuntary Chapter 11 Case Summary ------------------------------------------------- Alleged Debtor: College Book Rental Company, LLC 306 Andrus Drive Murray, KY 42017 Case Number: 12-09130 Involuntary Chapter 11 Petition Date: October 4, 2012 Court: Middle District of Tennessee (Nashville) Petitioner's Counsel: Joseph A. Kelly, Esq. FROST BROWN TODD LLC 150 3rd Avenue South, Suite 1900 Nashville, Tennessee 37201 Tel: (615) 251-5550 College Book's petitioners: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ David Griffin Money Loaned $15,000,000 413 Hillwood Drive Nashville, TN 37205 Commonwealth Economics Services Provided $15,000 John R. Farris 108 Esplanade Suite 340 Lexington, KY 40507 John Wittman Services Provided $158 306 Andrus Drive Murray, KY 42017-2180 CTI Communications Services Provided $21,793 Rick Morrison 2821 emington Street Suite 100 Fort Collins, CO 80525 DALLAS ROADSTER: J. Bennett White Approved as Substitute Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Texas, having approved the employment of J. Bennett White, P.C., to serve as counsel for Roadster Ltd. and IEDA Enterprises, Inc., has approved the emergency motion of the Debtors for the substitution of J. Bennett White, P.C., for the law firm of DeMarco-Mitchell, PLLC, as Debtors' counsel. J. Bennett White, P.C., will: a. give the Debtors legal advice with respect to their powers and duties as debtors-in-possession in the continued operation of their business and management of their property; b. prepare necessary applications, answers, orders, pleadings, reports, and other legal papers; and c. perform all other legal services for Debtors as debtors-in-possession which may be necessary. J. Bennett White will undertake this representation at the hourly rate of $300 per hour. The rates of other attorneys in the Firm range from $175 per hour to $225 per hour. The terms of employment also include an initial fee deposit in the amount of $25,000 which is to be replenished whenever funds are withdrawn as interim compensation. To the best of the Debtors' knowledge, J. Bennett White is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Dallas Roadster and IEDA Enterprises Dallas Roadster Ltd. owns and operates an auto dealership with locations in both Richardson and Plano, Texas. IEDA Enterprises, Inc., is the general partner of Roadster. Dallas Roadster and IEDA Enterprises filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases. J. Bennett White, P.C., replaced DeMarco Mitchell, PLLC, as the Debtors' bankruptcy counsel. Dallas Roadster estimated $10 million to $50 million in assets. The Debtors' assets were placed under the care of a receiver on Nov. 16, 2011, pursuant to a state court action by Texas Capital Bank, National Association. No trustee has been appointed in the Chapter 11 cases. DEWEY & LEBOEUF: Partner Settlements Approved; Examiner Bid Denied ------------------------------------------------------------------ Bankruptcy Judge Martin Glenn issued a 27-page Memorandum Opinion on Tuesday approving Dewey & LeBoeuf LLP's Partner Contribution Settlement Agreements and Mutual Releases for Participating Partners. In the same decision, Judge Glenn declined the request by an ad hoc committee of retired partners of LeBoeuf, Lamb, Leiby & MacRae to appoint an examiner. "The Court must weigh the future benefits of the [partner contribution plan] settlement against the likelihood of success of future litigation against the partners, while considering the complexity and protracted nature of that potential litigation. The benefits of the PCPs are incontrovertible," Judge Glenn said. In denying the Examiner Motion, Judge Glenn noted, "From early on in this case, it has been clear that the Ad Hoc Committee intended to do whatever it could to scuttle any proposed PCP. The Examiner Motion has been the main tactical choice of the Ad Hoc Committee to try to derail the PCPs." Under the PCPs, 400 of Dewey's roughly 670 ex-partners agreed to participate and have committed roughly $71 million in aggregate settlement payments, constituting roughly 80% of the aggregate of all Partner Contribution Amounts sought from former partners. Jonathan A. Mitchell, Dewey's Chief Restructuring Officer, testified in Court that the firm's costs currently average $8 million to $9 million a month, most of which is currently funded by a temporary agreement with the Secured Lenders to use cash collateral. According to Judge Glenn, the PCPs will permit the Debtor to focus its resources on the claims assigned to the estate by the Participating Partners and the claims that the PCPs do not release. The PCPs will protect the estate from the extraordinary administrative expense of litigating 400 additional adversary proceedings (one per partner) over the course of an undeterminable number of years. The Debtor's professionals reviewed the Debtor's financial records from 2011 to the Petition Date, and determined that approximately $400 million was paid to partners during that period that could be subject to various estate causes of action. "The PCPs will lead to a quicker wind-down in chapter 11, and -- more importantly -- a quicker and more certain distribution to creditors," Judge Glenn said. "Conversely, the success rate of complex and protracted future litigation against partners is largely uncertain. While the Debtor estimates that partners received roughly $400 million in distributions during periods subject to various estate causes of action, the results of what is likely to be protracted litigation to recover more money would be uncertain -- partners could and certainly would assert numerous defenses." Judge Glenn also noted that the date of Debtor's insolvency and whether the Debtor had sufficient capital to conduct its business -- critical factors with respect to avoidance claims -- would be substantially controverted. There could also be practical difficulties in collecting judgments. Judge Glenn said that, based on investigations of the Debtor's finances by the Debtor's professionals, there was strong evidence to support the assertion that the Debtor was insolvent in 2012, but insolvency would be more difficult to prove for 2011, and even harder for 2010. Complicating the issue, Dewey had a clean audit opinion issued in 2010 and was able to refinance a significant portion of its debt, and in 2011 the average partner generated revenue of $800,000. The PCPs explicitly exclude -- and preserve the firm's claims against -- three of the Debtor's former partners or senior managers -- Steven H. Davis; Stephen DiCarmine; and Joel Sanders -- because it is alleged that they had a more integral role in the Debtor's downfall. JPMorgan Chase Bank, N.A., as the Administrative Agent for Dewey's secured lenders; the Official Committee of Unsecured Creditors; the Informal Group of Certain Former Partners; and the Informal Group of Thirty-Seven Former Partners supported the so-called partner contribution plan. The Ad Hoc Committee of Retired Partners of LeBoeuf, Lamb, Leiby & Macrae, and the Official Committee of Former Partners objected. The Former Partners Committee and the Ad Hoc Committee argue that the PCPs were negotiated among insiders, the potential claims and circumstances on which the PCPs are premised were not sufficiently investigated, and the PCPs are not in the best interest of creditors. Limited objections were filed against the PCPs by UniCredit Bank AG; Kenneth A. Freeling; 1301 Properties Owner LP; Steven H. Davis; Stephen DiCarmine; and Joel Sanders. UniCredit, Freeling, and 1301 Properties expressed concerns whether the PCPs will interfere with third parties' and non-settling partners' rights to assert claims against either settling partners or the estate. The Former Partners Committee supported the Examiner Motion. Dewey, the Secured Lenders, and the Unsecured Creditors Committee objected. * * * The Am Law Daily last week reported that Judge Glenn told Dewey advisers at the Oct. 4 hearing he hoped to rule by Tuesday or Wednesday this week on the PCPs. "We're waiting for you," lead Dewey bankruptcy lawyer Albert Togut replied when he was asked by Judge Glenn about any updates on the bankruptcy's status, Am Law Daily reported. Mr. Togut also mentioned that the estate now has permission from its secured creditors to fund the bankruptcy using cash collateral through Nov. 4. Am Law Daily said the Oct. 4 hearing lasted less than 10 minutes and involved Judge Glenn's approval of the Dewey estate's request that it be allowed to pay two of its remaining 37 employees bonuses as incentives for continuing to work on the bankruptcy. Director of billing Lourdes Rodriguez -- who court documents show has created invoices for $54 million in work-in-progress begun when Dewey was an operational law firm and is working to invoice another $46 million in bills -- will receive $50,000. Collections manager Lisa Sucoff, who the estate credits with collecting more than $50 million in unpaid bills to date, will get $5,000, the report notes. Am Law Daily said Dewey's advisers dropped their request to pay a third bonus in the amount of $165,000 to former Dewey finance director Frank Canellas, who has continued to serve that function for the estate since Dewey's bankruptcy filing. The U.S. trustee's office and an official committee of former partners opposed the bonus payment, saying Mr. Canellas is too involved in firm management to be qualified for such a perk. Am Law Daily noted that Michael Driscoll, a lawyer with the U.S. trustee's office, said during Thursday's hearing he is concerned the estate will try to revive the Canellas bonus issue in the future, given that it has now moved twice to reward him with extra compensation. Judge Glenn dismissed Mr. Driscoll's concerns, saying he would address the matter in the event it actually arises. About Dewey & LeBoeuf 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 LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. 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: 2 Members Resign From Former Partners Committee ---------------------------------------------------------------- Former Dewey & LeBoeuf partners John P. Campo and John S. Kinzey on Friday wrote to Judge Martin Glenn to inform that they're stepping down from the official committee of former Dewey partners. In a two-page letter, Messrs. Campo and Kinzey explained that they are former partners of LeBoeuf, Lamb, Greene & MacRae LLP who declined to join the Ad Hoc Committee of former LeBoeuf partners at the time it was formed. "At that time, we expressed our view that the more appropriate means for the former partners to be heard in the Debtor's bankruptcy case was to seek representation on an official committee. Despite the formation of the FPC, the Ad Hoc Committee has actively participated in this case, and, in our view, advocated views and positions that are either ill-advised or premature, and not in the best interests of the former partners, the Debtor's estate, or its creditors, including (1) its motion to appoint a trustee or an examiner, and (2) its wholesale rejection of the Debtor's Partnership Contribution Plan," the letter said. "While we understand (and share) the Ad Hoc Committee's outrage and anger at the Debtor's baseless efforts to coerce former partners to contribute to the PCP, and its refusal to recognize the validity of the former partners' claims, we nonetheless find ourselves, on the one hand, having a fiduciary duty as members of the FPC to represent the interests of the members of the Ad Hoc Committee (as well as all other former partners) but, on the other hand, having a fundamental (and sincere) difference of opinion with the Ad Hoc Committee as to how the issues in this case should be addressed. "Accordingly, we are resigning from the FPC and filing notices of appearance in the case, so we will be free to advocate our own views individually as the case moves forward." Messrs. Campo and Kinzey said that, rather than arguing that the PCP should be rejected out-of-hand in its entirety, they believe that the PCP represents an appropriate blueprint for resolving the estate's claims against nearly all of the more than 400 Dewey "active" and former partners who have elected to participate in the PCP. "However, we believe the PCP is flawed in two respects. First, we believe that less than twenty senior, highly compensated partners are returning too little of the excessive compensation that they received from the Debtor. We say this not out of concern that the PCP was intentionally designed to favor these highly-compensated partners. Rather, to us, an objective comparison of the amounts they are contributing to the PCP to the high amounts of compensation they received (many pursuant to guarantees and other special arrangements), demonstrates that the PCP falls below the lowest point in the 'range of reasonableness' to the extent it settles the Debtor's claims against these individual partners," Messrs. Campo and Kinzey said. Messrs. Campo and Kinzey pointed out as an "egregious example" the "cap" of $3.5 million on partner contributions. "From sources independent of our work with the FCP, we understand that one partner received at least $10 million out of the firm in the period relevant to the PCP. Under the PCP, this partner is allowed to keep at least $6.5 million of this excessive compensation. Needless to say, this is unreasonable," according to the letter. Messrs. Campo and Kinzey said they would not object to releasing former members of the Executive Committee for any claims based on compensation they received from the Debtor. "However, we do not believe that they should be released at this time from claims the Debtor may have against them based on breach of fiduciary duty or mismanagement because (1) there has been no investigation of those claims, and (2) accordingly, there is at least a danger that releasing the Executive Committee members will also reduce the Debtor's claims against Messrs. [Steven H. Davis; Stephen DiCarmine; and Joel Sanders] by the amounts for which the Executive Committee members might have been liable in contribution, to the point at which the net claims against those three individuals became less than the amount of available insurance coverage," Messrs. Campo and Kinzey said. As reported by the Troubled Company Reporter on Aug. 17, 2012, Tracy Hope Davis, the U.S. Trustee for Region 2, filed an amended list of members of the Official Committee of Former Partners to reflect the addition of Stuart Hirshfield as member. Prior to Messrs. Campo and Kinzey's resignation, the Former Partners Committee consisted of: 1. David Bicks c/o Duane Morris 1540 Broadway New York, NY 10036 2. Cameron F. MacRae c/o Duane Morris 1540 Broadway New York, NY 10036 3. John S. Kinzey 3314 West End Ave, Unit 601 Nashville, TN 37203 4. John P. Campo c/o Troutman Sanders LLP 405 Lexington Avenue New York, NY 10174 5. Stuart Hirshfield 6 Meadow Road P.O. Box 127 Stockbridge, MA 01262 About Dewey & LeBoeuf 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 LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. 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: Seaport Buys Two Swiss Post Claims --------------------------------------------------- The Seaport Group LLC informed the Bankruptcy Court on Friday it has acquired two claims filed by Swiss Post Solutions Inc. against the estate of Dewey & LeBoeuf LLP. New York-based Swiss Post transferred to Seaport two claims (Claim Nos. 43 and 168), each asserting $392,601. The filings did not indicate how much Seaport paid for the claims. Seaport may be reached at: Scott Friedberg Managing Director - Trade Claims The Seaport Group LLC / Sea Port Group Securities LLC 360 Madison Avenue, 22nd Floor New York, NY 10017 Tel: 212-616-7728 917-913-4281 E-mail: SFriedberg@theseaportgroup.com Jonathan Silverman, Esq., serves as Seaport's general counsel. About Dewey & LeBoeuf 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 LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. 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: Settlement Doesn't Require Large Contributions --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that two former members of the Dewey & LeBoeuf LLP official committee of former partners say the proposed settlement with their ranks doesn't require large enough contributions from its 20 most highly compensated members. The two made their contention in a resignation letter sent to the U.S. bankruptcy judge in New York. According to the report, the defunct law firm proposed a settlement where 444 former partners agreed to pay an aggregate of $71.5 million in return for immunity from being sued. At hearings last month, Bankruptcy Judge Martin Glenn listened to objections from the official partners' committee and from other partners who formed an ad hoc committee. John P. Campo and John S. Kinzey, both bankruptcy lawyers, said in their Oct. 5 letter to Glenn that the $3.5 million maximum contribution from any one partner is a "particularly egregious" example of shortcomings in the settlement. Both Mr. Campo and Mr. Kinzey left Dewey before the firm folded and are now with Troutman Sanders LLP. The report relates that they told Judge Glenn in their letter that the most richly salaried lawyers aren't paying a high enough percentage of their compensation. They point to one unnamed partner settling for $3.5 million although he received "at least $10 million" from the firm during the time for which partners are paying settlements. They say he is "being allowed to keep at least $6.5 million of this excessive compensation." They also fault the settlement for giving releases to firm leaders who sat on the executive committee. Although they don't object to releasing the leaders for compensation-related claims, they believe the settlement should keep alive claims for "breach of fiduciary duty or mismanagement." They say there has been no investigation about claims being released. The report notes that Mr. Campo and Mr. Kinzey say that some positions taken by the ad hoc partners' committee were "either ill-advised or premature." Although they share the ad hoc group's "outrage and anger at the debtor's baseless efforts to coerce former partners" to contribute, the two resigned from the official committee because they have fiduciary duties to the ad hoc group. According to Bloomberg, having resigned from the committee, Mr. Campo and Mr. Kinzey said they will now be free to file papers advocating their "own views individually." The largest contribution toward the settlement, $3.5 million, would be made by Berge Setrakian, according to a court filing by the firm. Lisa Uhlman at Bankruptcy Law360 reports that the highly anticipated fate of Dewey & LeBoeuf LLP's $71.5 million clawback deal with former partners, which has hung in the balance for two weeks, should be decided by Tuesday, the New York bankruptcy judge overseeing the case said Thursday. 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. DIGITAL DOMAIN: Hearing on West Palm Bid Reset to Oct. 23 --------------------------------------------------------- Andrew Abramson at The Palm Beach Post reports the Bankruptcy Court in Delaware has moved to Oct. 23 the hearing on West Palm's bid to recoup the 2.4 acre site it deeded to Digital Domain in 2010 to build a digital animation college. According to the report, while the deed says West Palm gets the land back if Digital Domain fails to build the college, former Digital Domain CEO John Textor complicated matters by taking out two $1 million mortgages on the property. Mr. Textor borrowed the money against the property from Hudson Bay Master Fund Ltd., a company organized in the Cayman Islands and representing unidentified investors; and Comvest Capital II LP, a West Palm Beach-based private equity firm and Digital Domain creditor owed at least $8 million. The report notes creditors now have until Oct. 10 to file an objection to West Palm's motion to get the land back. 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. DIGITAL DOMAIN: U.S. Trustee Appoints 3-Member Creditors' Panel --------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, pursuant to 11 U.S.C. Sec. 1102(a)(1), appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Digital Domain Media Group, Inc., et al. The Creditors Committee members are: 1. Minh-Tam Frye 1986 SW GRanello Terr. Port St. Lucie, FL 34953 Tel: (772) 267-1813 2. Straticon, LLC Attn: John Colmar PO Box 588 Richland, MI 49083 Tel: (269) 629-5936 Fax: (269) 629-3134 3. Leighton Security Management, Inc. Attn: Stephen G. Leighton PO Box 308 Stuart, FL 34995 Tel: (772) 220-9400 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, 2012, 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. DIGITAL DOMAIN: WARN Claimants Question Necessity for KEIP ---------------------------------------------------------- Digital Domain Media Group, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware to authorize and approve the implementation of a key employee incentive program, the purpose of which is to incentivize eligible employees to maximize the value to be generated from the sale of certain of the Debtors' assets, and the sale of additional assets during the course of the Debtors' cases. Under the terms of the Incentive Plan, the Eligible Employees will be paid an incentive payment only if they actually meet certain objective benchmarks. The maximum amount of incentive payments that the Eligible Employees could collectively receive under the Incentive Plan - if they meet all applicable performance criteria - is approximately $350,000. According to papers filed with the Court, the eligible employees, which include many of the employees remaining in Port St. Lucie, have increased both their responsibilities and their workloads due to the substantial workforce reduction in Florida and the need to comply with the obligations imposed by Chapter 11, without additional compensation or the possibility of continued employment beyond the Debtors' bankruptcy cases. A hearing on the motion was slated Oct. 10, 2012, at 11:00 a.m. Minh-Tam Frye, on behalf of herself and a class of similarly- situated former employees of the Debtors, questioned the necessity for the Incentive Plan. These questions were raised by the WARN Claimants: 1. Why is the relief requested necessary now, after the sale already has closed? 2. What specific tasks were the bonus winners incentivized to do? 3. How does payment of a bonus directly translate into a measurable benefit for the WARN Claimants? 4. For any Eligible Employee already making a six figure salary, why is any bonus necessary "to help motivate the Eligible Employees..."? 5. Why should an undisclosed "insider" of the Debtors receive any bonus? Are the bonus winners senior executives, middle management or rank and file employees?" As reported in the TCR on Oct. 1, 2012, the sale of the Company's visual effects studios in Venice, Calif., and Vancouver, Canada, for $30.2 million to Galloping Horse America, a division of a Beijing media company, and Reliance MediaWorks, part of the Indian conglomerate Reliance Group, closed on Sept. 27, 2012. As such, the WARN Claimants say the relief requested by the motion no longer is necessary or warranted. 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. DIGITAL DOMAIN: Hiring FTI to Provide Financial Advisory Services ----------------------------------------------------------------- Digital Domain Media Group, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware for authorization to employ FTI Consulting, Inc., to provide, nunc pro tunc to the Petition Date: * temporary officers Michael Katzenstein as chief restructuring officer, John Debus and Ranjit Mankekar as associate restructuring officers, Luke Schaffer and Roger Scadron as vice presidents of development, and * additional personnel for the Debtors. The FTI personnel will, among others, provide these financial advisory and consulting services: 1. managing cash flow and working capital; 2. interfacing with the Debtors' DIP lenders and other capital sources; 3. preparing valuations of the Debtors' significant assets, if required; 4. managing the expedited sales process for the Debtors' assets, which will include the VFX business in California and Vancouver, Canada, and the assets of the Debtors in Florida, as well as intellectual property; 5. assisting in the preparation and filing of financial information required by the Court and the Office of the US Trustee; 6. interfacing with the Official Committee of Creditors if one is constituted; and 7. providing such other similar services as may be reasonably requested by the Board. Fees in connection with this engagement will be $260,000 per month for the first month of the case, $210,000 per month for the second month, $180,000 per month for the third month, and $130,000 for all months thereafter. The Additional Personnel will be billed at their current hourly rate. $50,000 of the Monthly Fee for each of the second and third months of the case will be paid by application of the prepetition retainer held by FTI and not from any other funds of the Debtors. The Monthly Fee is a substantial discount from FTI's standard fees for services of this type. Accordingly, FTI will have an opportunity to earn a success or completion fee as part of the compensation for its services. First, 50% of the Monthly Fee for any month after the third month will be credited against any success or completion fee that is in excess of $1.5 million. Second, FTI will receive a success fee for the sale of the VFX assets as follows: (a) a net sale price of up to $15 million will result in a $100,000 completion fee; (b) a net sale price of between $15 million to $17 million will result in a success fee of the Base Completion Fee plus 15% of the incremental increase in sale price over $15 million; (c) a net sale price of between $17 million to $25 million will result in a success fee of $400,000 plus 8% of the incremental increase in sale price over $17 million; and (d) a net sale price of over $25 million will result a success fee $1,040,000 plus 10% of the increase in sale price over $25 million. The net sale price of the Debtors' other assets over $13 million will result in a success fee of 2% of the net proceeds. The net sales price will be calculated without regard to fees paid to other professionals. FTI is to receive payment upon the receipt of the proceeds of the sale by the Debtors. Because the Debtors are not seeking to retain FTI as a professional under section 327 of the Bankruptcy Code, there is no requirement that FTI, the Temporary Officers, or any of the Additional Personnel be disinterested. Nevertheless, to the best of the Debtors' knowledge, information and belief, FTI does not have or represent any interest adverse to the Debtors' estates or any class of creditor or equity security holders, by reason of any direct or indirect relationship to, connection with or interest in, parties in interest in the Debtors' cases, or for any other reason. The hearing to consider the motion is scheduled for Nov. 6, 2012, at 1:00 p.m. The objection deadline is Oct. 23, 2012, at 4:00 p.m. 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. DYNEGY HOLDINGS: Reconstitutes Board of Directors ------------------------------------------------- Effective on Sept. 30, 2012, five directors have departed Dynegy Inc.'s board of directors in connection with the Company's emergence from Chapter 11 proceedings and pursuant to the Joint Plan: Messrs. Thomas Elward, Michael Embler, Vincent Intrieri, Samuel Merksamer and Felix Pardo. Pursuant to the Joint Plan, the Board was reconstituted, subject to the completion of the Company's administrative process, to consist of Messrs. Pat Wood III (Chairman), Paul M. Barbas, Robert C. Flexon, Richard L. Kuersteiner, Jeffrey S. Stein, John R. Sult and Ms. Hilary E. Ackermann. Pat Wood, III, 50, is serving as the Board's non-executive Chairman and has served as a principal of Wood3 Resources, an energy infrastructure developer, since July 2005. From 2001 until July 2005, Mr. Wood served as chairman of the Federal Energy Regulatory Commission. From 1995 until 2001, he chaired the Public Utility Commission of Texas. Paul M. Barbas, 55, was President and Chief Executive Officer of DPL Inc. and its principal subsidiary, The Dayton Power and Light Company (DP&L), from October 2006 until December 2011. He also served on the Board of Directors of DPL Inc. and DP&L. He previously served as Executive Vice President and Chief Operating Officer of Chesapeake Utilities Corporation, a diversified utility company engaged in natural gas distribution, transmission and marketing, propane gas distribution and wholesale marketing and other related services from 2005 until October 2006, as Executive Vice President from 2004 until 2005, and as President of Chesapeake Service Company and Vice President of Chesapeake Utilities Corporation, from 2003 until 2004. Robert C. Flexon, 54, has served as the Company's President and Chief Executive Officer since July 2011 and a director of the Company since June 2011. Prior to joining the Company, Mr. Flexon served as the Chief Financial Officer of UGI Corporation, a distributor and marketer of energy products and related services from February 2011 to July 2011. Mr. Flexon was the Chief Executive Officer of Foster Wheeler AG from June 2010 until October 2010 and the President and Chief Executive Officer of Foster Wheeler USA from November 2009 until May 2010. Prior to joining Foster Wheeler, Mr. Flexon was Executive Vice President and Chief Financial Officer of NRG Energy, Inc. from February 2009 until November 2009. Richard L. Kuersteiner, 73, was a member of the Franklin Templeton Investments legal department in San Mateo, California from 1990 until May 2012. Mr. Kuersteiner has a strong interest in good corporate governance practices and is a long-standing member of the Stanford Institutional Investors Forum. At Franklin he served as Associate General Counsel from 2007 until May 2012 and in various other capacities, including Director of Restructuring and Managing Corporate Counsel. For many years he also was an officer of virtually all of the Franklin, Templeton and Mutual Series funds. Jeffrey S. Stein, 42, is a Co-Founder and Managing Partner of Power Capital Partners LLC a private equity firm founded in January 2011. Mr. Stein is an investment professional with over 19 years of experience in the high yield, distressed debt and special situations asset class who has substantial experience investing in the merchant power and regulated electric utility industries. John R. Sult, 53, was Executive Vice President and Chief Financial Officer of El Paso Corporation from March 2010 until May 2012. He previously served as Senior Vice President and Chief Financial Officer from November 2009 until March 2010, and as Senior Vice President and Controller from November 2005 until November 2009. Mr. Sult served as Executive Vice President and Chief Financial Officer of El Paso Pipeline GP Company, L.L.C., from July 2010 until May 2012, as Senior Vice President and Chief Financial Officer from November 2009 until July 2010, and as Senior Vice President, Chief Financial Officer and Controller from August 2007 until November 2009. Hilary E. Ackermann, 56, was Chief Risk Officer with Goldman Sachs Bank USA from October 2008 to 2011. In this role, she managed Credit, Market and Operational Risk for Goldman Sach's commercial bank; developed bank's risk management infrastructure including policies and procedures and processes; maintained ongoing relationship with bank regulators including New York Fed, NY State Banking Department and the FDIC; chaired Operational risk, Credit risk and Middle Market Loan Committees; served as Vice Chair of Bank Risk Committee; was a member of Community Investment, Business Standards and New Activities Committees; was a member of GS Group level Credit Policy and Capital Committees; and chaired GS Group level Operational Risk Committee. Compensation for the Company's non-employee directors has not yet been determined, but is expected to be determined by the newly constituted Board at its first Board meeting. The Company adopted the 2012 Long Term Incentive Plan, effective as of the Effective Date under which an aggregate of 6,084,576 shares of New Dynegy Common Stock are reserved for issuance as equity-based awards to employees, directors and certain other persons. None of the LTIP Shares were issued on the Effective Date. A complete copy of the Form 8-K is available for free at: http://is.gd/eHtmeg About Dynegy Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) on Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. A settlement, which has already been approved by the bankruptcy court, provides for Dynegy Inc. and Holdings to merge and for the administrative claim granted to Dynegy Inc. in the Holdings Chapter 11 case to be transferred out of Dynegy Inc. for the benefit of its shareholders. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Inc. is represented by White & Case LLP and advised by Lazard Freres & Co. LLC. Dynegy Inc. successfully completed its Chapter 11 reorganization and emerged from bankruptcy October 1. Dynegy Northeast Generation, Inc., Hudson Power, L.L.C., Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C., remain under Chapter 11 protection. DYNEGY POWER: Fitch Revises Ratings Watch to Positive ----------------------------------------------------- Fitch Ratings has revised its Ratings Watch listing of Dynegy Power, LLC (GasCo, Issuer Default Rating [IDR] 'CCC') and Dynegy Midwest Generation, LLC (CoalCo, IDR 'CCC') to Positive from Evolving. Fitch has withdrawn its 'D' IDR on Dynegy Inc. (Dynegy). Dynegy emerged from bankruptcy on Oct. 1, 2012. Fitch has also withdrawn the IDR and ratings on Dynegy Holdings, LLC (DH) and Dynegy Capital Trust I pursuant to termination of the registration of these entities following the conclusion of the bankruptcy proceedings. The revision in Ratings Watch on GasCo and CoalCo reflects the elimination of litigation and other associated risks due to the bankruptcy proceedings surrounding DH and Dynegy. Fitch expects to resolve the Rating Watch after further clarification of management's intent regarding capital and legal structure and future strategic direction. Fitch considers it likely that the IDR and ratings for GasCo and CoalCo could be upgraded by one to two notches. On a consolidated basis, Dynegy represent a cleaner corporate structure post emergence from bankruptcy, yet one that remains highly leveraged due to depressed EBITDA and FFO outlook given the current and Fitch's forecasted commodity environment. Management could likely undertake strategic transformations of the company with respect to both its power portfolio and capital structure. GasCo's ratings reflect an improving operating environment spurred by coal-to-gas switching that is driving significantly increased generation at the company's fleet and some improvement in overall margins. GasCo's EBITDA is less sensitive to changes in natural gas prices due to a large component of capacity/ tolling revenues in the overall mix. In addition, at low levels of natural gas prices, higher volume can largely offset the compressed margins while providing some operational cost efficiencies. However, GasCo's faces a few headwinds due to expiration of an above market contract in the northeast in 2014 and uncertainty over resource adequacy payments in California. GasCo also retains capex exposure to once through water cooling rules in California. CoalCo's ratings reflect a challenging business environment led by compressed dark spreads, adversely shifting basis differentials due to coal-to-gas switching impact on power dispatch, and increase in railway transportation costs as current favorable contract expires in 2013. CoalCo is close to concluding its large environment capex program that places it in a good position with respect to many of the Environmental Protection Agency (EPA) rules though some exposure remains for coal ash handling. In Fitch's current estimation, CoalCo's credit metrics will likely remain depressed if natural gas prices remain range bound between $3.00 - 4.00/MMBtu. The individual security ratings at GasCo and CoalCo are notched above or below the IDR, as a result of the relative recovery prospects in a hypothetical default scenario. Fitch values the power generation assets that secure the term loans at GasCo and Coalco using a net present value (NPV) analysis. For the NPV, Fitch uses plant values provided by Wood Mackenzie as an input as well as Fitch's own price deck and other assumptions. Fitch has revised the Rating Watch to Positive from Evolving for the following ratings: Dynegy Power, LLC -- IDR 'CCC'; -- Secured term loan at 'B/RR1'. Dynegy Midwest Generation, LLC -- IDR 'CCC'; -- Secured term loan 'B/RR1'. Fitch has withdrawn the following ratings: Dynegy, Inc. -- IDR 'D'. Dynegy Holdings, LLC -- IDR at 'D'; -- Senior unsecured notes at 'CC/RR3'. Dynegy Capital Trust I -- Trust preferred at 'C/RR5' ENERGY TRANSFER EQUITY: S&P Affirms 'BB' CCR; Outlook Stable ------------------------------------------------------------ Standard & Poor's Ratings Services took various rating actions as a result of the completion of the Energy Transfer Partners L.P./Sunoco Inc. purchase agreement: * S&P affirmed its 'BBB-' corporate credit ratings on Energy Transfer Partners L.P. (ETP), Southern Union Co. (SUG), and Panhandle Eastern Pipe Line Co. L.P. and maintained stable outlooks on the companies. * S&P affirmed its 'BB' corporate credit rating on Energy Transfer Equity L.P. (ETE) and maintained its stable outlook. S&P also changed the recovery rating on ETE's senior secured debt to '4' from '3' (indicating expectations of average [30% to 50%] recovery if a payment default occurs), but rate ETE's senior secured notes in line with the corporate credit rating of 'BB'. * S&P affirmed its 'BB+' corporate credit rating on Sunoco Inc. and removed the rating from CreditWatch. The rating was originally placed on CreditWatch with positive implications on April 30, 2012, and the CreditWatch implications were revised to negative on June 18, 2012. S&P subsequently withdraw the rating at the company's request. S&P also raised its ratings on Sunoco's senior unsecured notes to 'BBB-' from 'BB+' because ETP is now a co-obligor on Sunoco's debt obligations. * S&P lowered its rating on Sunoco Logistics Partners L.P.'s (SXL) to 'BBB-' from 'BBB' and removed it from CreditWatch, where it was placed with negative implications on April 30, 2012. As of June 30, 2012, the ETE family of companies (including ETP, SUN, SXL, SUG, and Regency Energy Partners L.P.) had about $20 billion of balance-sheet debt. "We believe the acquisition of Sunoco and formation of a new company entitled ETP HoldCo Corp., which will hold Sunoco Inc. and Southern Union, is broadly neutral to positive for ETP's credit risk profile," said Standard & Poor's credit analyst William Ferara. "The transaction will cause ETP's EBITDA base to grow materially to about $4 billion, with its overall cash flow diversity notably improving. The transactions do, however, further entrench ETP's aggressive growth strategy and that of the ETE family of companies as a whole. The Sunoco acquisition will extend ETP's scale and enhance its competitive position across the natural gas, oil, and natural gas liquids value chain, with the addition of Southern Union bringing additional diversity and scale to ETP." ENNIS COMMERCIAL: Schedules of Assets & Debts Filed for Ben Ennis ----------------------------------------------------------------- Schedules of assets and liabilities for Ben A. Ennis have been filed with the Bankruptcy Court for the Eastern District of California, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $2,670,589 B. Personal Property $522,161 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $37,972,452 E. Creditors Holding Unsecured Priority Claims -- F. Creditors Holding Unsecured Non-priority Claims -- ----------- ----------- TOTAL $3,192,750 $135,625,599 About Ennis Commercial Porterville, California-based Ennis Commercial Properties, LLC's business consists of acquiring raw land and building commercial developments. The Company then either operates or sells the commercial buildings comprising the commercial development. ECP is owned by Ben Ennis, Brian Ennis and Pamela Ennis, in equal shares. On Sept. 20, 2010, Pam Ennis and Brian Ennis transferred all of their ownership interests in ECP to Ben Ennis. ECP filed for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No. 10-12709) on March 16, 2010. Peter L. Fear, Esq., and Gabriel J. Waddell, Esq., at the Law Offices of Peter L. Fear, in Fresno, Calif., represent the Debtor as counsel. No creditors committee has been formed in the case. In its schedules, the Debtor disclosed $40,878,319 in assets and $43,922,485 in liabilities. Ben Ennis filed a voluntary petition under Chapter 11 (Bankr. E.D. Calif. Case No. 10-62315) on Oct. 25, 2010. On May 25, 2011, Terence Long was appointed as Chapter 11 Trustee in the Benn Ennis bankruptcy. Consequently, the Chapter 11 Trustee stands in the shoes of Ben Ennis, and holds all of the membership interests in ECP and controls it accordingly. Justin D. Harris, Esq., at Motschiedler, Michaelides, Wishon, Brewer & Ryan, LLP, in Fresno, represents the Chapter 11 Trustee as counsel. FRIENDFINDER NETWORKS: Bell, Staton Named Non-Executive Chairmen ---------------------------------------------------------------- FriendFinder Networks Inc. and each of Marc H. Bell and Daniel C. Staton determined to change Messrs. Bell's and Staton's status to non-executive Co-Chairmen of the Board. Mr. Bell previously served as Chief Strategy Officer while Mr. Staton served as Executive Co-Chairman of the Board. In connection with this change in status, FriendFinder and each of Messrs. Bell and Staton have agreed to terminate the Amended and Restated Employment Agreements, dated as of April 24, 2012. No termination payments are being made pursuant to the Employment Agreements. Moreover, FriendFinder determined it was in the best interests of the Company for Messrs. Bell and Staton to provide consulting services. As a result, FriendFinder and each of Messrs. Bell and Staton entered into Consulting Agreements, dated as of Oct. 5, 2012. The Consulting Agreements provide for a term that runs through March 29, 2017, and sets forth that Messrs. Bell and Staton will provide consulting services in connection with enterprise-wide business initiatives, strategic planning and issues relating to the Company's debt, including any refinancing of the Company's debt. Each of Messrs. Bell and Staton will receive an annual consulting fee of $500,000 per year which may be increased each fiscal year by 10% following the first anniversary of the Consulting Agreements if permitted under the terms of the agreements governing the Company's indebtedness and obligations in effect from time to time. Under the Consulting Agreements, each of Messrs. Bell and Staton will receive a grant of 62,500 shares of the Company's common stock on the last day of each calendar quarter beginning with the calendar quarter commencing Oct. 1, 2012, an option to purchase 4,167 shares of the Company's common stock on April 3, 2013, and each anniversary thereafter, and an annual grant of 2,500 shares of restricted stock on May 16, 2013, and on each anniversary thereafter. About FriendFinder Networks FriendFinder Networks (formerly Penthouse Media Group) owns and operates a variety of social networking Web sites, including FriendFinder.com, AdultFriendFinder.com, Amigos.com, and AsiaFriendFinder.com. All total, its Web sites are offered in 12 languages to users in some 170 countries. The company also publishes the venerable adult magazine PENTHOUSE, and produces adult video content and related images. The Company is based in Boca Raton, Florida. Friendfinder's balance sheet at March 31, 2012, showed $475.34 million in total assets, $624.96 million in total liabilities, and a $149.62 million total stockholders' deficiency. * * * As reported by the TCR on Aug. 24, 2012, Standard & Poor's Ratings Services lowered its rating on Boca Raton, Fla.-based FriendFinder Networks Inc. to 'CCC' from 'CCC+'. "The rating actions reflect the company's declining paid subscriptions and the likelihood that operating results will remain weak over the near term, pressuring covenant compliance," said Standard & Poor's credit analyst Daniel Haines. "In addition, we believe that the company faces significant risks related to refinancing its large debt maturities due in September 2013. We expect continued economic headwinds and declining subscriptions to remain a drag on results," added Mr. Haines. GAMETECH INTERNATIONAL: Asset Sale Completed -------------------------------------------- BankruptcyData.com reports that GameTech International completed the sale of substantially all of its assets to YI GT Acquisition, pursuant to an asset purchase agreement dated Aug. 8, 2012 by and among the Company, its wholly-owned subsidiaries, GameTech Arizona Corp., GameTech Canada Corp. and GameTech Mexico S. de R.L. de C.V., Buyer and Yuri Itkis Gaming Trust. After allowing time for other bidders and objections, the Court approved the sale of substantially all of the Company's assets on Sept. 27, 2012. In consideration for the sale of its assets, the Company received (i) credit of all the Company's outstanding indebtedness under its loan agreement with Yuri Itkis which, as of Sept. 27, 2012, totaled $17.1 million; (ii) cash in an amount equal to $2,500,000; (iii) the assumption of the assumed obligations and (iv) payment of all sales taxes. About GameTech International Based in Reno, Nevada, GameTech develops and manufactures gaming entertainment products and systems. GameTech holds a significant position in the North American bingo market with its interactive electronic bingo systems, portable and fixed-based gaming units, and complete hall management modules. It also holds a significant position in select North American VLT markets, primarily Montana, Louisiana, and South Dakota, where it offers video lottery terminals and related gaming equipment and software. It also offers Class III slot machines and server-based gaming systems. GameTech International, Inc. and its wholly owned subsidiaries have filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-11964) on July 2, 2012, to effect a restructuring of the company's debt obligations. GameTech disclosed total assets of $27.22 million and total liabilities of $22.88 million as of Jan. 29, 2012. GameTech's $16 million secured credit matured on June 30. Three days earlier, the loan was purchased by YIGT. Before bankruptcy, GameTech rejected an offer from YIGT to combine the two companies. GameTech said in a court filing that it was hoping for a more favorable transaction. GameTech said that YIGT purchased the loan at discount from lenders US Bank NA and Bank of the West. Judge Peter J. Walsh presides over the case. The Debtors are represented by Greenberg Traurig, LLP. Kinetic Advisors, LLC, serves as the Debtors' financial advisor. GAMMA MEDICA: Court Approves $1.5 Million DIP Financing ------------------------------------------------------- Heraldonline.com reports that Judge Victoria Kaufman of the U.S. Bankruptcy Court for the Central District of California has approved Gamma Medica Inc.'s $1.5 million debtor-in-possession financing on a final basis October 3, 2012 as part of its Chapter 11 restructuring. The report relates the DIP financing order provides the Company with sufficient financing to pursue a reorganization or asset sale. "Gamma Medica's LumaGEM Molecular Breast Imaging System is already in the market and is very promising," the report quotes recently named CEO Jim Calandra as saying. "We also have industry leading preclinical imaging products. We plan on being sure our tools are in the hands of researchers and radiologists working in women's imaging." The report adds Gamma Medica has also hired the investment bank CRS Capstone LLC to advise the company on the sale or financial restructuring of one or more of Gamma Medica's divisions. "We were already restructuring Gamma Medica when the company filed for Chapter 11 protection, so we are already on the path to emergence," said Mr. Calandra, founder of the restructuring firm Birch Hill Partners. "We've made changes in management and we're already refocusing operations on the needs of our customers." Based in Northridge, California, Advanced Molecular Imaging LLC -- http://www.gammamedica.com/-- develops imaging equipment for pre-clinical research and diagnosis of disease. AMI and four affiliates sought Chapter 11 protection (Bankr. C.D. Calif. Lead Case No. 12-17475, under Gamma Medica-Ideas (USA) Inc.). Krikor J. Meshefejian, Esq., and Ron Bender, Esq., at Levene, Neale, Bender, Yoo & Brill LLP, represents the Debtors. The Debtors listed assets of between $1 million and $10 million, and liabilities of between $10 million and $50 million. GENE CHARLES: Court Approves Weir & Partners as Co-Counsel ---------------------------------------------------------- The Gene Charles Valentine Trust sought and obtained approval from the U.S. Bankruptcy Court to employ Weir & Parners LLP, as co-counsel, nunc pro tunc to Aug. 9, 2012. W&P will assist and consult with the Debtor's lead and local counsel, MazurKraemer Business Law, in: a. providing legal assistance and counseling with respect to the Chapter 11 case; b. providing legal advice with respect to assisting Debtor in the preparation of the Plan of Reorganization and Disclosure Statement; c. providing legal assistance with respect to Confirmation of the Plan of Reorganization; and d. performing all other legal services for the Debtor that may be necessary and proper in the proceedings. To the best of the Debtor's knowledge, W&P does not hold or represent any interest adverse to the Debtor or the Debtor's estate with respect to the matters regarding which W&P is to be employed. W&P has received a $15,000 retainer from the Debtor. About Gene Charles Valentine A business trust created by investment advisor and broker-dealer agent Gene Charles Valentine sought Chapter 11 bankruptcy protection (Bankr. N.D. W.Va. Case No. 12-01078) in Wheeling, West Virginia on Aug. 9, 2012. The Gene Charles Valentine Trust owns commercial and real estate properties in West Virginia, the Financial West Group, the Peace Point Equestrian Center and the Aspen Manor. It estimated $10 million to $50 million in assets and up to $10 million in liabilities. Financial West Investment Group, Inc., doing business as Financial West Group -- http://www.fwg.com/-- is a firm with more than 340 registered representatives supervised by 44 Offices of Supervisory Jurisdiction throughout the United States. Financial West Group is a FINRA, and SIPC member and SEC Registered Investment Advisor (over $1 billion under control) that offers a full range of financial products and services. Its corporate office 32 member staff is dedicated to providing registered representatives quality service and technology to allow them to focus on best servicing their investors needs. Aspen Manor -- http://www.aspenmanorresort-- is a resort that claims to be the "The Jewel of the Ohio Valley." Along with its architectural artistry, including hand-carved ceilings, the Manor is filled will original art, statues, historic furniture and artifacts. Bankruptcy Judge Patrick M. Flatley oversees the case. The Trust hired Mazur Kraemer Law Inc., as bankruptcy counsel. GENE CHARLES: Files Schedules of Assets and Liabilities ------------------------------------------------------- The Gene Charles Valentine Trust filed with the Bankruptcy Court for the Northern District of West Virginia its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $4,476,490 B. Personal Property $29,624,903 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $10,882,162 E. Creditors Holding Unsecured Priority Claims $311,000 F. Creditors Holding Unsecured Non-priority Claims $11,430,392 ----------- ----------- TOTAL $34,101,393 $22,623,554 About Gene Charles Valentine A business trust created by investment advisor and broker-dealer agent Gene Charles Valentine sought Chapter 11 bankruptcy protection (Bankr. N.D. W.Va. Case No. 12-01078) in Wheeling, West Virginia on Aug. 9, 2012. The Gene Charles Valentine Trust owns commercial and real estate properties in West Virginia, the Financial West Group, the Peace Point Equestrian Center and the Aspen Manor. It estimated $10 million to $50 million in assets and up to $10 million in liabilities. Financial West Investment Group, Inc., doing business as Financial West Group -- http://www.fwg.com/-- is a firm with over 340 registered representatives supervised by 44 Offices of Supervisory Jurisdiction throughout the United States. Financial West Group is a FINRA, and SIPC member and SEC Registered Investment Advisor (over $1 billion under control) that offers a full range of financial products and services. Its corporate office 32 member staff is dedicated to providing registered representatives quality service and technology to allow them to focus on best servicing their investors needs. Aspen Manor -- http://www.aspenmanorresort-- is a resort that claims to be the "The Jewel of the Ohio Valley." Along with its architectural artistry, including hand-carved ceilings, the Manor is filled will original art, statues, historic furniture and artifacts. Bankruptcy Judge Patrick M. Flatley oversees the case. The Trust hired Mazur Kraemer Law Inc., as bankruptcy counsel. GIBRALTAR CONSTRUCTION: Enters Bankruptcy in Puerto Rico -------------------------------------------------------- Gibraltar Construction Co. filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-07583) on Sept. 26, 2012, estimated assets of at least $10 million and liabilities of at least $1 million. Carla Main, substituting for Bloomberg bankruptcy columnist Bill Rochelle, reports that the Debtor's affiliate, Gulfcoast Irrevocable Trust, a stockholder in the debtor, has a pending bankruptcy case in Puerto Rico. According to the report, Gibraltar declared personal property valued at $21.2 million, unsecured priority claims of $249,571 and unsecured non-priority claims of $4.42 million in court filings. Claimants are building-industry trades. GMX RESOURCES: To Sell Parcel of Texas and La. Assets for $69MM --------------------------------------------------------------- GMX Resources Inc. has entered into a definitive purchase and sale agreement with a private third party to sell a portion of its East Texas and Louisiana assets for approximately $69 million, subject to certain adjustments. The sale is expected to be closed within 30 days and is subject to customary diligence review and adjustments for title and environmental matters. The asset sale includes the Company's interests in specified operated and non- operated properties in the Cotton Valley Sands and shallow rights located in East Texas and Louisiana. The Company is retaining its entire Haynesville/Bossier natural gas resource base with significant resource potential for natural gas, as well as Cotton Valley Sands and shallow rights across approximately 13,130 net acres that include 10 producing wells and 28 undeveloped horizontal locations within its East Texas core position. The Company will provide customary transitional services to the buyer to ensure continued successful operations of the assets. Those services to include land, accounting, operations and marketing for a period of no less than three months. About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's strategy is to significantly increase production, revenues and reinvest in increasing production. GMXR's goal is to grow and build shareholder value every day. GMX Resources' balance sheet at June 30, 2012, showed $394.79 million in total assets, $462.46 million in total liabilities and a $67.67 million total deficit. The Company reported net losses of $206.44 million in 2011, $138.29 million in 2010, and $181.08 million in 2009. * * * As reported by the TCR on Sept. 25, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on GMX Resources Inc. to 'SD' (selective default) from 'CC', reflecting its completion of an exchange offer for a portion of its 5.0% convertible notes due 2013 and 4.5% convertible notes due 2015. GRUBB & ELLIS: Faces $30 Million Suit Over Office RE Scheme ----------------------------------------------------------- Natalie Rodriguez at Bankruptcy Law360 reports that owners of a Durham, N.C., office complex reached a deal to pursue part of their more than $30 million suit against Grubb & Ellis Co. over the alleged misrepresentation of the building and local real estate market, according to a stipulation approved Thursday. Bankruptcy Law360 relates that U.S. Judge Martin Glenn of the Southern District of New York's bankruptcy court signed off on a stipulation to partially lift an automatic stay that had been placed on the bankrupt Grubb & Ellis. About Grubb & Ellis Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is a commercial real estate services and property management company with more than 3,000 employees conducting throughout the United States and the world. It is one of the oldest and most recognized brands in the industry. Grubb & Ellis and 16 affiliates filed for Chapter 11 bankrutpcy (Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 21, 2012, to sell almost all its assets to BGC Partners Inc. The Santa Ana, California-based company disclosed $150.16 million in assets and $167.2 million in liabilities as of Dec. 31, 2011. Judge Martin Glenn presides over the case. The Debtors have engaged Togut, Segal & Segal, LLP as general bankruptcy counsel, Zuckerman Gore Brandeis & Crossman, LLP, as general corporate counsel, and Alvarez & Marsal Holdings, LLC, as financial advisor in the Chapter 11 case. Kurtzman Carson Consultants is the claims and notice agent. BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co., L.P., the DIP lender and Prepetition Secured Lender, are represented in the case by Emanuel C. Grillo, Esq., at Goodwin Procter LLP. On March 27, 2012, the Court approved the sale to BCG. An auction was cancelled after no rival bids were submitted. Pursuant to the term sheet signed by the parties, BGC would acquire the assets for $30.02 million, consisting of a credit bid the full principal amount outstanding under the (i) $30 million credit agreement dated April 15, 2011, with BGC Note, (ii) the amounts drawn under the $4.8 million facility, and (iii) the cure amounts due to counterparties. BGC would also pay $16 million in cash because the sale was approved by the March 27 deadline. Otherwise, the cash component would have been $14 million. Approval of the sale was simplified when BGC settled with unsecured creditors by increasing their recovery. Several parties in interest have taken an appeal from the sale order. Grubb & Ellis Co. was renamed Newmark Grubb Knight Frank following the sale. HARTFORD COMPUTER: Levenfeld Helped Resolve Case for Creditors -------------------------------------------------------------- Levenfeld Pearlstein's bankruptcy group has proven that Chapter 11 matters can be resolved quickly and efficiently for both secured and unsecured creditors. Hartford Computer Inc. filed for bankruptcy protection last December so it could sell its assets. Less than a year later, a judge last week approved a joint liquidation plan formulated by the company and its creditors, said LP partner Jonathan Friedland, lead counsel for the committee of unsecured creditors. Under federal bankruptcy law, the $35 million in cash proceeds from the April sale would go to Hartford Computer's senior secured creditor, hedge fund Delaware Street Capital unless Delaware Street agreed to carve out a recovery for unsecured creditors, or unless unsecured creditors could prove why Delaware Street's liens should be invalidated or its claims subordinated. LP conducted an investigation of Delaware Street Capital on behalf of unsecured creditors. The investigation laid the groundwork for negotiations that led to the hedge fund striking a deal to net unsecured creditors up to 50 cents on the dollar. Peter Kravitz, chairman of the unsecured creditors Committee, who helped negotiate the deal, said Friedland "ran a diligent investigation, balanced competing interests flawlessly, and got a contested plan confirmed that really works for unsecured creditors." The Debtor was represented in the case by KMZ Rosenman; Delaware Street was represented by Jenner & Block; and certain shareholders were represented by Winston & Strawn. Each of these firms showed the "utmost professionalism in the case," according to Friedland. About Levenfeld Pearlstein Recognized by The National Law Journal as one of the nation's most innovative mid-sized law firms, Chicago-based Levenfeld Pearlstein, LLC provides Unusually Good legal and business counsel to sophisticated clients across a broad range of corporate, real estate and litigation matters. The firm possesses the resources and depth to manage the most complex matters, ensuring that the needs of all clients are met in the most efficient and cost- effective manner possible. Levenfeld Pearlstein's world-class attorneys work with clients to understand the full impact of the law on their business and proactively address their legal issues so that they can quickly return to doing what they do best. About Hartford Computer Schaumburg, Illinois-based Hartford Computer Hardware Inc. and its affiliated entities are one of the leading providers of repair and installation services in North America for consumer electronics and computers. Hartford Computer Hardware operates in three complementary business lines: parts distribution and repair, depot repair, and onsite repair and installation. Products serviced include laptop and desktop computers, commercial computer systems, flat-screen television, consumer gaming units, printers, interactive whiteboards, peripherals, servers, POS devices, and other electronic devices. Hartford Computer Hardware, though all U.S. companies, operates a significant portion of their business in Markham, Ontario, Canada. Hartford Computer Hardware and three units filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Lead Case No. 11-49744) on Dec. 12, 2011. The affiliates are Hartford Computer Group Inc. (Case No. 11-49750); Hartford Computer Government Inc. (Case No. 11-49752) and Nexicore Services LLC (Case No. 11-49754). Judge Pamela S. Hollis oversees the case. John P. Sieger, Esq., Peter A. Siddiqui, Esq., and Paige E. Barr,Esq., at Katten Muchin Rosenman LLP, in Chicago, serve as the Debtors' counsel. The Debtors' investment banker is Paragon Capital Partners, LLC; the special counsel is ThorntonGrout Finnigan LLP; and the notice and claims agent is Kurtzman Carson Consultants LLC. The Debtors disclosed $19,013,862 in assets and $72,984,394 in liabilities as of the Chapter 11 filing. The petitions were signed by Brian Mittman, chief executive officer. Hartford Computer obtained Court permission to act as the foreign representative of the Debtors in Canada to seek recognition of the Chapter 11 case on the Debtors' behalf, and request the Ontario Superior Court of Justice (Commercial List) to lend assistance to the Bankruptcy Court in protecting the Debtors' property. Avnet Inc., proposed buyer for Nexicore and HCG, is represented by Frank M. Placenti, Esq., at Squire, Sanders & Dempsey L.L.P. Delaware Street, the DIP lender, is represented in the case by Landon S. Raiford, Esq., and Michael S. Terrien, Esq., at Jenner & Block. Matthew J. Botica, Esq., and Nancy G. Everett, Esq., at Winston & Strawn LLP, argue for lenders ARG Investments, Enable Systems, Inc., MRR Venture LLC, SKM Equity Fund II, L.P. and SKM Investment Fund II. The Official Committee of Unsecured Creditors in the Debtors' cases tapped to retain Levenfeld Pearlstein, LLC, as its counsel and Crowe Horwath LLP as its financial analysts. HOFMEISTER PERSONAL: Emerges From Chapter 11 -------------------------------------------- Rob Bates, senior editor at JCKonline.com, reports that Hofmeister Personal Jewelers emerged from Chapter 11 on Oct. 3, 2012. The report relates the store owner Carter Hofmeister said "Being a jeweler I really didn't know how something like this works. When I first went Chapter 11, I felt like I didn't have any other choice. After a difficult series of events, the bank called my note. I had millions in inventory, so I was adequately secured. But banks today are really not business-friendly." Hofmeister Personal Jewelers Inc. owns and operates jewelry stores. The Company filed for Chapter 11 reorganization in April 2011, listing assets of nearly $3.8 million and liabilities of $5.4 million. INDALEX INC: Kirkland Can't Duck Suit Over $76MM Dividend Fraud --------------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that a Delaware bankruptcy judge on Tuesday refused to dismiss a malpractice suit alleging Kirkland & Ellis LLP advised Indalex Inc. on a wasteful $76 million dividend without disclosing that some of the firm's partners were invested in private equity funds that owned the company and stood to gain from the transaction. About Indalex Inc. Indalex filed for Chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del., because of financial difficulties brought on by the global economic slowdown, which spurred a drop in demand, earnings, and liquidity. On July 2, 2009, the company's sale to Sapa holdings AB, a Swedish aluminum products maker, was approved. The transaction included 10 active plants in North America. Workers and retirees with questions may consult the PBGC Web site, http://www.pbgc.gov/or call toll-free at 1-800-400-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask for 800-400-7242. Indalex retirees who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit. Further information may be found on the PBGC Web site at http://www.pbgc.gov/workers- retirees/benefits-information/content/page13692.html Assumption of the plan's unfunded liabilities will increase the PBGC's claims by $47.1 million and was not previously included in the agency's fiscal year 2009 financial statements. The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns. INDIANAPOLIS DOWNS: CEO Gets OK to Examine Winning Bidder's Docs ---------------------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that a Delaware bankruptcy judge on Friday allowed Indianapolis Downs LLC's CEO to examine communications between Centaur Gaming LLC, which agreed to buy the rival horse track and casino for $500 million, and certain state agencies, finding his discovery requests pertinent to the Chapter 11 proceedings. Chairman and CEO Ross Mangano sought discovery into Centaur's dealings with Indiana governmental agencies on behalf of himself and several family trusts, collectively known as the "Oliver parties," according Bankruptcy Law360. About Indianapolis Downs Indianapolis Downs LLC operates Indiana Live -- http://www.indianalivecasino.com/-- a combined race track and casino at a state-of-the-art 283 acre Shelbyville, Indiana site. It also operates two satellite wagering facilities in Evansville and Clarksville, Indiana. Total revenue for 2010 was $270 million, representing an 8.7% increase in 2009. The casino captured 53% of the Indianapolis market share. In July 2001, Indianapolis Downs was granted a permit to conduct a horse track operation in Shelvyville, Indiana, and started operating the track in 2002. It was granted permission to operate the casino at the racetrack operation in May 2007. The casino began operations in July 2010. Indianapolis Downs and subsidiary, Indianapolis Downs Capital Corp., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11046) in Wilmington, Delaware, on April 7, 2011. Indianapolis Downs estimated $500 million to $1 billion in assets and up to $500 million in debt as of the Chapter 11 filing. According to a court filing, the Debtor owes $98,125,000 on a first lien debt. It also owes $375 million on secured notes and $72.6 million on subordinated notes. Matthew L. Hinker, Esq., Scott D. Cousins, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP in Wilmington, Delaware, have been tapped as counsel to the Debtors. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, is the conflicts counsel. Lazard Freres & Co. LLC is the investment banker. Bose Mckinney & Evans LLP and Bose Public Affairs Group LLC serve as special counsel. Kobi Partners, LLC, is the restructuring services provider. Epiq Bankruptcy Solutions is the claims and notice agent. INFOTELECOM LLC: Broadvox-CLEC to Purchase Assets Out of Ch. 11 --------------------------------------------------------------- Broadvox-CLEC, LLC has entered into an agreement to purchase the assets of Infotelecom, LLC out of Chapter 11 bankruptcy. The asset purchase is pending regulatory approvals and is expected to close before the end of 2012. Upon approval, Infotelecom, its assets and customers will be transferred to Broadvox-CLEC. Both parties are extremely pleased with the purchase. It allows Infotelecom to bring an end to its bankruptcy with absolutely no interruption of service to its customers. As Broadvox-CLEC customers, they will continue to receive the same services on the same terms and conditions as they received from Infotelecom. Broadvox customers, who previously only had regional access to these services, will now have nation-wide availability. Further, all Broadvox customers will benefit from an improved cost structure and more flexibility in product innovation. "Broadvox-CLEC currently operates as a competitive local exchange carrier on a regional basis. With the Infotelecom purchase, Broadvox-CLEC can now offer its products and services nationwide," said Kyle Bertrand, Vice President of Network Planning at Broadvox-CLEC. Nationwide product and service offerings include: -- Long Distance Termination -- Local Termination -- Toll Free Origination -- DID TN Origination -- MSRN Service -- E911 -- SMS -- Virtual Tandem Service -- Sip-enabled Pseudo-CIC and 1+ Transport -- Traffic Exchange -- IP Service Peering Based in Cleveland, Ohio, Infotelecom, LLC, filed for Chapter 11 protection on Oct. 18, 2011 (Bankr. N.D. Ohio Case No. 11-18945). Judge Jessica E. Price Smith presides over the case. Dov Frankel, Esq., and William T. Miller, Esq., at Taft Stettinius & Hollister LLP, represent the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. INSIGHT PHARMACEUTICALS: S&P Affirms 'B' Corporate Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Trevose, Pa.-based Insight Pharmaceuticals LLC. The outlook is negative. "At the same time, we lowered our issue-level ratings on Insight's $20 million first-lien revolving credit facility due 2016 and its upsized $290 million first-lien senior secured term loan facility due 2016 to 'B' from 'B+'. We lowered our recovery ratings to '3' from '2', which indicates our expectation for meaningful (50% to 70%) recovery for first-lien lenders in the event of a payment default. We do not rate the company's second-lien senior secured term loan due 2017," S&P said. Insight Pharmaceuticals is increasing its first-lien secured term loan to $290 million (from about $250 million outstanding) and reducing its second-lien secured term loan to $112 million (from about $145 million outstanding). "We believe the increased size of the company's first-lien secured debt reduces the recovery prospects for these lenders in a simulated default scenario," said Standard & Poor's credit analyst Brian Milligan. "Total debt modestly increases in order to cover estimated fees and expenses." "The ratings on Insight reflect Standard & Poor's view that the company's business risk profile will remain 'vulnerable,' principally because its recently acquired brands have not performed up to expectations, and continuing underperformance could hurt credit ratios. We believe competitive pressures from both branded and private label competition is a credible risk to a potential rebound in sales of these brands. Our assessment continues to recognize the company's continuing narrow business focus within the OTC consumer healthcare products segment, brand concentration with Monistat and e.p.t., and ongoing lack of international diversity. The ratings also reflect our expectation for the company's financial risk profile to remain 'highly leveraged' as a result of its high debt burden relative to its size, and its aggressive financial policies stemming from its financial sponsor ownership. We continue to forecast Insight will maintain financial ratios indicative of a 'highly leveraged' financial risk profile through at least the end of 2013, including," S&P said. "The outlook is negative, reflecting our view of the potential for continuing underperformance from Monistat and e.p.t., a significant part of the company's business, to cause material credit ratio deterioration during 2013," S&P said. JILL HOLDINGS: S&P Raises Corp. Credit Rating to 'B-'; Outlook Neg ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Quincy, Mass.-based, women's specialty apparel retailer Jill Holdings LLC to 'B-' from 'CCC'. The outlook is negative. "At the same time, we revised our issue-level rating on subsidiary JJ Lease Funding Corp.'s senior secured term loan B to 'B-' from 'CCC'. We also revised the recovery rating on the loan to '3' from '4'. The '3' recovery rating indicates our expectation for meaningful recovery (50% to 70%) for noteholders in the event of a payment default," S&P said. Rationale "The upgrade reflects our revision of the company's liquidity profile to 'adequate' from 'weak,' based on its amended financial covenants. Jill has made a $27.5 million partial paydown of its existing term loan B, using proceeds from a new $30 million unsecured mezzanine term loan facility. As a result, we have revised the recovery rating to '3' as the recovery prospects for the term loan B have improved. The ratings on Jill reflect its 'vulnerable' business risk profile and 'highly leveraged' financial risk profile," S&P said. "The company's vulnerable business profile incorporates competition from a number of different retailers, including department stores, other specialty retailers, and mass merchandisers. Jill is a smaller participant than many of its direct competitors, in both store count and sales, which, in our opinion, limits its ability to reach and retain customers more competitively. The company's performance in 2011 was weak, and we remain concerned that prior merchandising issues may resurface over the next year. However, we anticipate sales to be modestly higher as the company adds new stores. In our view, a reduction of promotional activities will benefit margins," S&P said. "Additional factors in our forecast for 2013 include," S&P said: -- Revenue increases in the mid-single digits; -- EBITDA margins to moderately increase due to sales leveraging and lower promotional activity; -- Modest positive free operating cash flow (FOCF); and -- No financial support from Arcapita. "We view the company's financial risk profile as highly leveraged, characterized by high debt from its LBO by Arcapita in June 2011. Although, Arcapita filed for Chapter 11 in March 2012, we continue to believe the filing is unlikely to significantly affect Jill's operations. For fiscal 2013, we anticipate that metrics will continue to improve gradually, if the company does not have any additional merchandising missteps. We expect debt to EBITDA to decrease to low-7.0x area, EBITDA coverage to remain flat, and funds from operations (FFO) to debt will increase to about 15%. Total debt to EBITDA was about 8.1x at July 31, 2012, and EBITDA interest coverage was about 1.2x. FFO to total debt was approximately 18% during the same period," S&P said. Liquidity "We assess Jill's liquidity as adequate as we believe that cash sources are likely to exceed uses over the next 12 months, even in the event of moderate, unforeseen EBITDA declines. Sources of liquidity for the company include excess cash, projected available borrowings under its $40 million revolving credit facility, and FFO. Cash uses over the near term are its current portion of long- term debt and estimated capital expenditures," S&P said. Relevant aspects of the company's liquidity are: -- Sources of liquidity over the next 12 months will exceed its uses by 1.2x or more; -- Sources will continue to exceed uses, even if EBITDA were to drop by 20%; -- Sufficient covenant headroom for forecasted EBITDA to decline by 15% without the company breaching coverage tests; and -- No meaningful near-term maturities and manageable term loan amortizations. "Jill is required to meet amended financial covenants under its term facility, including a maximum leverage ratio and a minimum interest coverage ratio. We anticipate Jill will maintain adequate covenant headroom on all covenants over the next year," S&P said. Outlook "The negative outlook reflects our concerns that the company may not be able to solve its merchandising issues over the next year. Performance could suffer as a result, as future step-downs could put additional pressure on its liquidity. We anticipate the credit ratios will remain reflective of a highly leveraged financial risk profile over the next year," S&P said. "We could lower the ratings if weaker-than-expected performance results in inadequate covenant headroom, pressuring the company's liquidity position. For this to occur, there would be EBITDA deterioration such that financial covenant cushion falls to less than 10%," S&P said. "Alternatively, we could revise the outlook to stable if the company consistently maintains adequate cushion under their financial covenants. This will be predicated on if we believe the company will be able to maintain covenant cushion over 20%," S&P said. Ratings List Upgraded To From Jill Holdings LLC Corporate Credit Rating B-/Negative/-- CCC/Negative/-- Upgraded; Recovery Ratings Revised To From Jill Holdings LLC JJ Lease Funding Corp. Senior Secured B- CCC Recovery Rating 3 4 K-V PHARMACEUTICAL: Committee Proposes Stroock as Lead Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors of K-V Pharmaceutical Company asks the U.S. Bankruptcy Court for the Southern District of New York for authorization to retain Stroock & Stroock & Lavan LLP as lead bankruptcy counsel to the Committee, nunc pro tunc to Aug. 13, 2012. Stroock will, among other things: (a) advise the Committee with respect to its rights, duties and powers in the Chapter 11 cases; (b) assist and advise the Committee in its consultations and negotiations with the Debtors relative to the administration of the Chapter 11 cases; (c) assist the Committee in analyzing the claims of the Debtors' creditors and in negotiating with the creditors; (d) assist with the Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and of the operation of the Debtors' business; and (e) assist the Committee in its analysis of, and negotiations with, the Debtors or their creditors concerning matters related to, among other things, the terms of a plan or plans of reorganization for the Debtors and related disclosure statement filed in connection therewith and all ancillary documents related thereto. Stroock's current hourly rates: Partners $750 to $1,085 Counsel $650 to $775 Associates $350 to $725 Paraprofessionals $245 to $335 Litigation Support $125 to $135 To the best of the Committee's knowledge, information and belief, Stroock is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, and does not hold or represent an adverse interest in connection with the Debtors, the Chapter 11 cases or the Debtors' estates, and that neither Stroock nor any of its members, counsel or associates has had or presently has any connection with the Debtors, their creditors, equity security holders, or any other known parties-in-interest, the U.S. Trustee, or any person employed by the office of the U.S. Trustee, in any matters related to the Debtors or the Chapter 11 cases. The hearing to consider the application of the Committee of Stroock as lead bankruptcy counsel was scheduled for Oct. 10, 2012, at 9:30 a.m. About K-V Pharmaceutical KV Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. K-V Pharmaceutical Company and certain domestic subsidiaries on Aug. 4 filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V has retained the services of Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V has retained Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The U.S. Trustee appointed five persons to serve in the Official Committee of Unsecured Creditors. K-V PHARMACEUTICAL: Committee Retains D&P as Financial Advisor -------------------------------------------------------------- The Official Committee of Unsecured Creditors of K-V Pharmaceutical Company asks the U.S. Bankruptcy Court for the Southern District of New York for authorization to retain Duff & Phelps, LLC, as financial advisor to the Committee, nunc pro tunc to Aug. 13, 2012. D&P will: (a) review and analyze the Company's operations, assets, financial condition, business plan, strategy, and operating forecasts; (b) assist in the determination of an appropriate go-forward / post-emergence capital structure for the Company; (c) analyze any proposed financing(s); (d) analyze any merger, divestiture, joint-venture, or investment transaction, including the proposed structure and form thereof; (e) analyze any new debt and/or equity capital (including advice on the nature and terms of new securities); and (f) assist the Committee in developing, evaluating, structuring and negotiating the terms and conditions of a restructuring or Plan of Reorganization, including the value of the securities, if any, that may be issued to the Committee under any such restructuring or Plan. As compensation for its services, D&P will receive: (1) Monthly Fee: The Company will pay D&P a cash fee of $125,000 per month for the term of the engagement beginning Aug. 13, 2012. (2) Deferred Restructuring Fee: In addition, at the end of the case or in connection with a proposed Restructuring Transaction, D&P will have the ability to seek a reasonable deferred restructuring fee subject to the direct approval and consent of the Committee and subject to notice, hearing and approval of the Bankruptcy Court. The amount and timing of such fee, if any, are subject to Bankruptcy Court approval. D&P will not be entitled to more than one Deferred Restructuring Fee. (c) Expense Reimbursement: D&P will be entitled to monthly reimbursement of reasonable and documented out-of-pocket expenses incurred in connection with the services to be provided under the Engagement Letter. To the best of the Committee's knowledge, information, and belief, D&P does not hold or represent any interest adverse to the Committee, the Debtors' estates, creditors or other parties-in- interest in connection with the Chapter 11 cases and 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, and to the extent required by Sections 328 and 1103 of the Bankruptcy Code and Bankruptcy Rule 2014. About K-V Pharmaceutical KV Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. K-V Pharmaceutical Company and certain domestic subsidiaries on Aug. 4 filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V has retained the services of Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V has retained Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The U.S. Trustee appointed five persons to serve in the Official Committee of Unsecured Creditors. K-V PHARMACEUTICAL: Committee Retaining AGP as Regulatory Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of K-V Pharmaceutical Company asks the U.S. Bankruptcy Court for the Southern District of New York for authorization to retain Arnall Golden Gregory LLP as regulatory counsel to the Committee, nunc pro tunc to Aug. 13, 2012. AGP will, among others, provide these services: (a) advise the Committee regarding various federal and state laws and regulations affecting the sales of Makena(R) and other pharmaceutical products of the Debtors; (b) analyze the validity and effectiveness of claims and legal actions commenced by the Debtors in state Medicaid actions and against regulatory agencies; and (c) advise the Committee regarding legal requirements applicable to compounding pharmacies whose practices affect the sales of Makena(R), the Debtors' most important product. To the best of the Committee's knowledge, information and belief, AGG is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, and does not hold or represent an adverse interest in connection with the Debtors, the Chapter 11 cases or the Debtors' estates, and that neither AGG nor any of its members, counsel or associates has had or presently has any connection with the Debtors, their creditors, equity security holders, or any other known parties-in-interest, the U.S. Trustee, or any person employed by the office of the U.S. Trustee, in any matters related to the Debtors or the Chapter 11 cases. At present, the hourly rates for the AGG partners designated to represent the Committee range from $490 to $520 per hour and the hourly rates for the AGG associates designated to represent the Committee range from $200 to $300 per hour. It is anticipated that the fees of AGG, in its capacity as regulatory counsel to the Committee, will not exceed $10,000 per month, and AGG will endeavor to inform Stroock, Committee's proposed lead counsel, prior to incurring more than $10,000 of fees in a month. AGG will also seek reimbursement for necessary expenses incurred, including travel, photocopying, delivery service, postage and package delivery, vendor charges, court fees, transcript costs, expenses for "working meals," computer-aided research and other out-of-pocket expenses incurred in providing professional services. About K-V Pharmaceutical KV Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. K-V Pharmaceutical Company and certain domestic subsidiaries on Aug. 4 filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V has retained the services of Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V has retained Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The U.S. Trustee appointed five persons to serve in the Official Committee of Unsecured Creditors. K-V PHARMACEUTICAL: Can Employ Willkie Farr as Bankruptcy Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized K-V Pharmaceutical Company, et al., to employ Willkie Farr & Gallagher LLP as bankurptcy counsel, effective as of the Petition Date. As reported in the TCR on Aug. 29, 2012, Willkie Farr & Gallagher bills at these hourly rates: attorneys at $400 to $1,090 and paralegal at $120 and $310. About K-V Pharmaceutical KV Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. K-V Pharmaceutical Company and certain domestic subsidiaries on Aug. 4 filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V has retained the services of Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V has retained Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The U.S. Trustee appointed five persons to serve in the Official Committee of Unsecured Creditors. KEOWEE FALLS: U.S. Trustee Seeks Chapter 7 Conversion ----------------------------------------------------- W. Clarkson McDow, Jr., the United States Trustee for Region 4, asks the U.S. Bankruptcy Court to enter an order converting the Chapter 11 case of Keowee Falls Investment Group to Chapter 7 liquidation. The U.S. Trustee tells the Court that the Debtor's disclosure statement and plan were due Aug. 29, 2012, pursuant to SCBLR 3016-1(a), but the Debtor has not filed the disclosure statement and plan. The Debtor has represented that it has approximately $165,000 in cash once all sales are closed. The schedules show unsecured claims in the amount of $214,661. 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. LAKELAND DEVELOPMENT: Hires Henry Eshraghian as Tax Preparer ------------------------------------------------------------ Lakeland Development Company asks the U.S. Bankruptcy Court for permission to employ H. Henry Eshraghian for the special purpose of preparing the Debtor's tax returns for the years 2009, 2010 and 2011. The Debtor will pay $1,295 for each of the three years for which both state and federal tax returns have been prepared and filed. H. Henry Eshraghian attests that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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 CONSERVANCY: Judge Dismisses Chapter 11 Case ------------------------------------------------- Jennifer Lin at Philly News reports that U.S. Bankruptcy Judge Eric L. Frank signed an order Oct. 3 dismissing the Chapter 11 case of the Land Conservancy of Elkins Park after the conservancy said in a Sept. 28 filing it was withdrawing an earlier objection to the dismissal bid. According to the report, the Dominican Congregation of St. Catherine de Ricci pushed for case dismissal to clear the way for the ejection of the conservancy and its founder, David Dobson, from the congregation's property. "The dismissal of the bankruptcy case eliminates a legal venue from our dispute with the Land Conservancy," which is "trespassing," the report quotes Sister Anne Lythgoe, president of the congregation, as saying. According to the report, the conservancy's counsel, Edmond M. George, said the conservancy had "consented to dismissal . . . in the hope that it would facilitate a setting within which the parties could attempt to reach a non-litigation resolution to the issues between them. . . ." According to a financial statement filed with Bankruptcy Court, the conservancy had cash on hand of $111,065. To keep it operating for the last two years, Food for All has been advancing funds totaling $3.9 million, the report adds. Land Conservancy of Elkins Park, Inc., filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 10-19522) on Nov. 11, 2010, listing $1 million to $10 million in assets and debts. Judge Eric L. Frank presides over the case. Edmond M. George, Esq., at Obermayer Rebmann Maxwell & Hippel, LLP, serves as the Debtor's counsel. The petition was signed by David D. Dobson, president. LAST MILE: Hires Parentebeard LLC as Tax Accountant --------------------------------------------------- Last Mile Inc., also known as Sting Communications, asks the U.S. Bankruptcy Court for approval to employ ParenteBeard LLC as accountant, effective as of March 25, 2012. The professional services that ParenteBeard will provide to the Debtor include the preparation of the Debtor's federal and Pennsylvania state tax returns for the year 2011. ParenteBeard will charge the Debtor on an hourly basis for its services. ParenteBeard's hourly rates range from $120 to $230 for staff, and $230 to $430 for senior managers and partners. The Debtor believes that ParenteBeard's fees are reasonable and reflect market rates. The Debtor has used ParenteBeard's services since approximately 2006 and ParenteBeard is familiar with the Debtor's operations. Leah K. Keller, a member of the firm, attests it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Last Mile Based in Lebanon, Pennsylvania, Last Mile Inc., aka Sting Communications, is a telecommunications services company delivering advanced Ethernet transport services. It specializes in designing, implementing and managing Wide Area Networks that leverage the power of Internet Protocol to link the customers' locations securely, efficiently and cost effectively to support delivery of advanced applications, voice, data and video at scalable broadband speeds. Last Mile filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 11-14769) on Oct. 12, 2011. Judge Sean H. Lane presides over the case. Kenneth A. Rosen, Esq., Jeffrey A. Kramer, Esq., and Thomas A. Pitta, Esq., at Lowenstein Sandler PC, in New York, represent the Debtor as counsel. In its schedules, the Debtor disclosed $11,757,058 in assets and $23,300,655 in liabilities. Tracy Hope Davis, the United States Trustee for Region 2, pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Last Mile Inc., aka Sting Communications. Halperin Battaglia Raicht, LLP, serves as counsel for the Committee. LEHMAN BROTHERS: Dante Noteholders Win Appeal on Intervention ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that holders of notes in synthetic collateralized debt obligations created by Lehman Brothers Holdings Inc. subsidiary Lehman Brothers Special Financing Inc. won an appeal Oct. 4 in the U.S. Court of Appeals in Manhattan. According to the report, the victory enhances chances that noteholders in the so called Dante program will be allowed to participate in negotiations or litigation over the validity of so-called flip clauses in bankruptcy. The opinion expands the definition of when an order is appealable in bankruptcy. Were there no bankruptcy, the flip clause provides that Lehman would receive first proceeds from collateral. The flip clause provided that noteholders instead would receive the collateral first because Lehman went bankrupt. Flip clauses thus turned profits for Lehman into losses as a result of bankruptcy. Lehman has taken the position multiple times in bankruptcy court in New York that the flip clause violates the so-called ipso facto clause in the Bankruptcy Code, which provides that companies can't forfeit rights or property simply on account of filing for bankruptcy. In another Lehman lawsuit, U.S. Bankruptcy Judge James M. Peck ruled in January 2010 that flip clauses aren't enforceable in bankruptcy. The report recounts that before an appeal could be completed; there was a settlement and thus no higher-court ruling about enforceability of a flip clause in bankruptcy. Judge Peck later adhered to his 2010 conclusion in an opinion in May in another lawsuit. Lehman initiated the lawsuit at hand regarding the Dante program in September 2010. The case involved the validity of a flip clause in transactions involving Lehman's bankrupt Australian affiliate. With negotiations ongoing, the bankruptcy judge froze the lawsuit several times. Most recently, the suit was stayed until Jan. 20. Dante noteholders sought to intervene in the suit which had been stayed. Judge Peck denied the intervention application "without prejudice." He said the noteholders could seek to intervene again, although only after the stay was dissolved. The report notes that the noteholders appealed, only to have the appeal dismissed. The district court concluded that the bankruptcy court's ruling wasn't a "final order" and therefore wasn't appealable. The Second Circuit Court of Appeals in Manhattan reversed in an unsigned Oct. 4 opinion by a three-judge panel. The appeals court cited familiar law for the principle that the concept of "finality" is "more flexible" in bankruptcy than in other civil suits. "Finality is viewed functionally, focusing on pragmatic considerations rather than on technicalities," the court said. Looking at the practical effect of non-intervention, the circuit court noted that "negotiations are ongoing." Unless allowed to intervene, the circuit judges said that that the noteholders "may ultimately arrive at the scene of a fait accompli, or be foreclosed altogether from proceedings that they may be entitled to join." According to Bloomberg, the court said it was expressing no opinion on how the district court should rule on whether the noteholders should be entitled to intervene. Strictly speaking, the appeals court ruling did nothing more than send the appeal back to district court, where the judge will consider the question of whether the noteholders should be allowed to intervene. The noteholders contend they aren't being adequately represented by the indenture trustee. Should they be allowed to intervene, the noteholders will be able to oppose continuation of the stay of the lawsuit, argue the merits of the flip clause, and possibly win themselves a seat at the negotiating table. The Bloomberg report discloses that the flip clause and the Dante program have arisen in several litigated contexts in the Lehman case. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December and implemented in March, with two distributions since then. Lehman's brokerage subsidiary is under control of a trustee appointed under the Securities Investor Protection Act. The Lehman brokerage is yet to make a first distribution to non-customers. The intervention appeal is Liquidators of Lehman Brothers Australia Ltd. v. Lehman Brothers Special Financing Inc. (In re Lehman Brothers Holdings Inc.), 11-2967, U.S. Court of Appeals for the Second Circuit (Manhattan). About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman 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. LEHMAN BROTHERS: SIPA Trustee Settles LB Finance's $6-Bil. Claim ---------------------------------------------------------------- The trustee liquidating Lehman Brothers Holdings Inc.'s brokerage asked the U.S. Bankruptcy Court in Manhattan to approve a settlement of Lehman Brothers Finance AG's $6 billion in bankruptcy claims. The agreement grants Lehman Brothers Finance an allowed customer claim in the sum of $189.924 million, and an unsecured non- priority general claim in the sum of $360 million. The allowed claims are less than 6% of the potential customer claim and less than 10% of Lehman Brothers Finance's total claims, according to a court filing. Christopher Kiplok, Esq., at Hughes Hubbard & Reed LLP, in New York, said Lehman Brothers Finance's claims are among the largest filed in the brokerage's liquidation case. "The elimination of the uncertainty and need for a very substantial reserve through the settlement with [Lehman Brothers Finance] will greatly enhance the trustee's ability to make a substantial distribution to customers," Mr. Kiplok said. The proposed settlement is formalized in a 17-page agreement, which is available without charge at: http://bankrupt.com/misc/LBHI_SettlementLBFinanceClaim.pdf A court hearing to consider approval of the agreement is scheduled for Nov. 14. Objections are due by Oct. 25. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. LEHMAN BROTHERS: Hedge Fund Group Supports Trustee's Sale Appeal ---------------------------------------------------------------- The Managed Fund Association, a hedge fund advocacy group, filed an amicus curiae brief telling the U.S. Court of Appeals for the Second Circuit that a New York federal court's ruling in Lehman Brothers Inc.'s bankruptcy will cause a "substantial loss of confidence" in the capital markets and must be overturned, Lisa Uhlman of BankruptcyLaw360 reported. The hedge fund group, which says it represents the global alternative investment industry, takes issue with U.S. District Judge Katherine B. Forrest's June 5 ruling largely siding with Barclays PLC in its multibillion-dollar dispute with the liquidation trustee for LBI, Lehman Brothers Holdings Inc.'s brokerage unit. James Giddens, the trustee overseeing the liquidation of LBI under the U.S. Securities Investor Protection Act of 1970, previously argued before the Second Circuit that there was denial of due process when the North American investment banking business was sold to Barclays Plc one week after the bankruptcy filing in Septembers 2008. Mr. Giddens is seeking to overturn Judge Forrest's ruling, which concluded that the bankruptcy judge was wrong in requiring Barclays to pay $1.5 billion. In addition to reinstating the $1.5 billion judgment in his favor, Mr. Giddens also wants the 2nd Circuit to award him $4 billion in cash representing so-called margin assets. The Barclays appeal in the court of appeals is Giddens v. Barclays Capital Inc. (In re Lehman Brothers Holdings Inc.), 12-2328, 2nd U.S. Circuit Court of Appeals (Manhattan). The Barclays appeal in district court is Barclays Capital Inc. v. Giddens (In re Lehman Brothers Inc.), 11-6052, U.S. District Court, Southern District of New York. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. LEHMAN BROTHERS: Barclays Says FirstBank Claims Should Be Barred ---------------------------------------------------------------- FirstBank Puerto Rico violated a bankruptcy judge's order when it sued Barclays Capital Inc. over securities it acquired from Lehman Brothers Holdings Inc.'s brokerage, according to court papers filed by the U.K. bank. Judge James Peck of the U.S. Bankruptcy Court in Manhattan issued the order in 2008, which authorized the sale of Lehman's North American broker-dealer business to Barclays. Barclays lawyer, Lindsee Granfield, Esq., at Cleary Gottlieb Steen & Hamilton LLP, in New York, said the 2008 ruling enjoins anyone who has claims on the assets sold from suing the U.K. bank. "FirstBank's claims are barred, and its suit enjoined, by the express terms of this court's sale order which approved the transfer of those assets to Barclays free and clear of the very claims FirstBank makes," Ms. Granfield said. "FirstBank's actions constitute a willful violation of the sale order necessitating a finding of contempt." Barclays asked Judge Peck to force FirstBank to compensate the U.K. bank through an award of attorneys' fees and costs. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. LEHMAN BROTHERS: Walton, et al. Sue Over Properties --------------------------------------------------- William Walton and three others filed a lawsuit against Lehman Brothers Inc. over the ownership of properties in Georgia. Walton et al., who are represented by Atlanta-based Legacy Law Group, seek an order declaring them to be the title owner of record of the properties located in Marietta and in Covington, Georgia. "The proceeding is brought to remove a particular cloud or clouds, include a statement as to the grounds wrongful encumbrances and wrongful foreclosure perpetuated by parties with no standing and without an interest in the property," said Rodd Walton, Esq., at Legacy Law Group, in Atlanta, Georgia. The lawsuit, which was filed on October 1 in the U.S. Bankruptcy Court in Manhattan, also named Bank of America N.A. and Federal National Mortgage Association as defendants. The case is William Walton, et al. v. Lehman Brothers Inc., et al., 12-01898, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. LEVEL 3: Announces Pricing of $1.2 Billion Term Loan Refinancing ---------------------------------------------------------------- Level 3 Communications, Inc.'s subsidiary, Level 3 Financing, Inc., has successfully completed the marketing of its new senior secured Tranche B-II 2019 Term Loan to fully refinance its existing Tranche B II Term Loan and Tranche B III Term Loan under its existing senior secured credit facilities. The $1.2 billion Tranche B-II 2019 Term Loan will bear interest at LIBOR plus 3.25 percent, with a minimum LIBOR of 1.50%, and will mature on Aug. 1, 2019. The term loan is being priced to lenders at par. The existing Tranche B II and Tranche B III term loans have interest rates of LIBOR plus 4.25%, with a minimum LIBOR of 1.50% and were due to mature in 2018. As a result of this refinancing, the company expects to save $12 million of cash interest payments per year. The closing of the refinancing transaction is scheduled to be completed on Oct. 4, 2012, subject to execution of definitive documentation and customary closing conditions. About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. The Company reported a net loss of $756 million in 2011, a net loss of $622 million in 2010, and a net loss of $618 million in 2009. The Company's balance sheet at June 30, 2012, showed $12.94 billion in total assets, $11.73 billion in total liabilities, and $1.21 billion in total stockholders' equity. * * * As reported by the TCR on April 2, 2012, Fitch Ratings upgraded Level-3 Communications' Issuer Default Rating to 'B' from 'B-' on Oct. 4, 2011, and assigned a Positive Outlook. The rating action followed LVLT's announcement that the company closed on its previously announced agreement to acquire Global Crossing Limited (GLBC) in a tax-free, stock-for-stock transaction. In the July 20, 2012, edition of the TCR, Moody's Investors Service affirmed Level 3 Communications, Inc.'s corporate family and probability of default ratings at B3. The company's B3 ratings are based on expectations that net synergies from the recently closed acquisition of Global Crossing Ltd. will reduce expenses sufficiently such that Level 3 will be modestly cash flow positive (on a sustained basis) by late 2013. Level 3 carries a 'B-' corporate credit rating from Standard & Poor's Ratings Services. LEVI STRAUSS: Signs Separation Agreement with Aaron Boey -------------------------------------------------------- Aaron Beng-Keong Boey, Executive Vice President and President, Commercial Operations Asia Pacific and President, Global Denizen brand, of Levi Strauss & Co., will separate from the Company effective Nov. 24, 2012, pursuant to a Separation Agreement and Release of all Claims signed on Oct. 4, 2012. Under the agreement, in exchange for certain releases of claims and compliance with certain restrictive covenants, Mr. Boey is eligible to receive an amount equal to US$546,075, which will be payable in a lump sum on the Separation Date. Mr. Boey remains eligible to receive a payment under the Company's 2012 Annual Incentive Plan pursuant to the terms of that plan. Mr. Boey's post-termination obligations include covenants relating to non-solicitation for a period of one year, non-disparagement, confidentiality and cooperation with litigation matters and administrative inquiries. This agreement supersedes any other potential separation benefits from the Company, including, but not limited to, any rights under the Company's Executive Severance Plan. Andrew Martin, Vice President, Finance, of the Asia Pacific division, will assume responsibilities for the role until a successor is selected. About Levi Strauss & Co. Headquartered in San Francisco, California, Levi Strauss & Co. -- http://www.levistrauss.com/-- is one of the world's leading branded apparel companies. The Company designs and markets jeans, casual and dress pants, tops, jackets and related accessories, for men, women and children under the Levi's(R), Dockers(R) and Signature by Levi Strauss & Co.(TM). The Company markets its products in three geographic regions: Americas, Europe, and Asia Pacific. The Company's balance sheet May 27, 2012, showed $2.89 billion in total assets, $2.99 billion in total liabilities, $5.02 million in temporary equity, and a $110.65 million total stockholders' deficit. * * * In April 2012, Standard & Poor's Ratings Services assigned its 'B+' rating (same as the corporate credit rating) to San Francisco-based Levi Strauss & Co.'s proposed $350 million senior unsecured notes due 2022. "The ratings on Levi Strauss reflect our view that the company's financial profile continues to be 'aggressive,' particularly since the company's balance sheet remains highly leveraged and we expect cash flow protections measures to continue to be weak. In addition, we continue to consider Levi Strauss' business risk profile to be 'weak,' given its continuing participation in the highly competitive denim and casual pants market, which is subject to fashion risk and still-weak consumer spending, and our expectation that the company's business focus will remain narrow. We believe the company benefits from its strong, well-recognized Levi's brand, long operating history, and distribution channel diversity (both by retail customer and geography)," S&P said. In April 2012, Moody's Investors Service affirmed Levi Strauss & Co ("LS&Co) B1 Corporate Family and Probability of Default Ratings. Moody's also assigned a B2 rating to the company's proposed $350 million senior unsecured notes due 2022 and affirmed the B2 ratings of the company's other series of unsecured debt. Levi Strauss' B1 Corporate Family Rating reflects the company's negative trends in operating margins reflecting inconsistent execution as well as input cost pressures. The ratings also reflect the company's still significant debt burden, which has been increasing due to the company's continued investment in its own retail stores and its sizable underfunded pension. Debt/EBITDA (incorporating Moody's standard analytical adjustments) was 5.1 times for the LTM period ending 2/26/2012. The rating take into consideration the company's significant global scale, with revenues near $5 billion, its operations in over 110 countries and the ownership of the iconic Levi's trademark. LOCATION BASED TECHNOLOGIES: Launches PF886 Tracking Device ----------------------------------------------------------- Location Based Technologies Inc. continues to expand its product line by announcing their new PF-886. Designed to meet the demanding business and governmental applications and to work in the harshest environments, the PF 886 is a dedicated A-GPS device for customers who need the ability to track and manage highly mobile assets from the office or while actively in the field. The device comes with a 2, 3 or 4 wire option that delivers a broad array of features and functionality to meet the diverse requirements of today's business environment or it can be used un- tethered for extended periods of time. The device itself is a mere 4.25 inches by 2.2 inches and weighs only 5.7 ozs. "The PF 886 is a rugged and cost effective solution that can perform for up to three weeks without being connected to a power source," stated Dave Morse, CEO of Location Based Technologies. "The battery life is far better than anything in its class and our test customers tell us that the A-GPS sensitivity exceeds the performance of other GPS devices. We are excited to bring this new device to market with a 'first order' of $880,000 from a world recognized Fortune 50 company." Location Based Technologies launched its business solutions www.locationbasedtech.com Web site and interface in July of this year. Since that time, LBT has seen a continued acceleration of commercial business growth adding new small to medium sized businesses each day to its platform. "As more and more businesses are experiencing the value in tracking not only vehicles but other mobile assets, we knew the development of the PF 886 was the logical next step in continuing to deliver solutions that meet the needs of our customers," stated Gregory Gaines, CMSO of Location Based Technologies. The PF 886 is a rugged, cost effective and powerful device which is fully compatible with other Location Based Technologies' mobile solutions. When accessed by LBT's easy-to-use End User interface or its intuitive App based functionality, this mobile solution increases operational visibility and improves an organization's mobile resource efficiency while lowering costs. System management and reporting capability also comes with the solution package. The platform solution can be accessed and managed via an office computer or in the field through an intuitive mobile application. Each device icon is displayed on the interface dashboard and conveys critical information about the device's current location as well as its speed, heading and altitude. A device's location history is stored for 90 days and can be easily accessed through the "History" tab and users can create geo-fences so that they receive email or text alerts when a device enters or exits a particular area. About Location Based Technologies Irvine, Calif.-based Location Based Technologies, Inc., designs, develops, and sells leading-edge personal locator devices and services. The Company's balance sheet at May 31, 2012, showed $7.64 million in total assets, $5.44 million in total liabilities, $499,387 of commitments and contingencies, and stockholders' equity of $1.70 million. "The Company has incurred net losses since inception, and as of May 31, 2012, had an accumulated deficit of $42,125,209. These conditions raise substantial doubt as to the Company's ability to continue as a going concern," the Company said in its quarterly report for the period ended May 31, 2012. As reported in the TCR on Dec. 2, 2011, Comiskey & Company, in Denver Colorado, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal year ended Aug. 31, 2011. The independent auditors noted that the Company has incurred recurring losses since inception and has an accumulated deficit in excess of $37,000,000. "There is no established sales history for the Company's products, which are new to the marketplace." LON MORRIS: College to Be Sold at Auction ----------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Lon Morris College, a 158-year-old not-for-profit college in Jacksonville, Texas, filed for bankruptcy reorganization in July and was unable to merge with another educational institution. The college canceled the fall term, arranged for students to transfer elsewhere, and filed a proposed Chapter 11 plan on Oct. 5 where the campus will be sold at auction. As described in the proposed disclosure statement, the properties will either be sold at auction, with proceeds given to lenders, or turned over to the lenders. If there is an excess after payment of secured claims, the remainder would go to unsecured creditors. The Bloomberg report discloses that the college will ask the U.S. Bankruptcy Court in Tyler, Texas, to structure the auction so each lender's collateral will be sold separately, to establish the value of each lender's collateral. The auction will also take bids for the entire college. About Lon Morris College Lon Morris College was founded in 1854 as a not-for-profit religiously affiliated two-year degree granting institution. Over the past 158 years, the College has impacted the lives of countless members of the local Jacksonville community in Texas. Lon Morris College filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 12-60557) in Tyler, on July 2, 2012, after lacking enough endowments to pay teachers, vendors and creditors. In May 2012, the Debtor missed two payrolls and vendor payables, utilities, and long term debt were also past due. From a headcount of 1,070 in 2010, enrolments have been down to 547 in 2012. The president of the College has resigned, as have members of the board of trustees. Judge Bill Parker oversees the case. Bridgepoint Consulting LLC's Dawn Ragan took over management of the College as chief restructuring officer. Attorneys at McKool Smith P.C., and Webb and Associates serve as counsel to the Debtor. Capstone Partners serves as financial advisor. According to its books, on April 30, 2012, the College had roughly $35 million in assets, including $11 million in endowments and restricted funds, and $18 million in funded debt and $2 million in trade and other liabilities. The Debtor disclosed $29,957,488 in assets and $15,999,058 in liabilities as of the Chapter 11 filing. Amegy Bank is represented in the case by James Matthew Vaughn, Esq., at Porter Hedges LLP. LPATH INC: Effects a 1-for-7 Reverse Split of Class A Shares ------------------------------------------------------------ Lpath, Inc., announced a 1-for-7 reverse split of the Company's issued and outstanding Class A common stock and a corresponding decrease in the number of its authorized shares of Class A common stock. The reverse stock split was effective as of 5:00 p.m. PDT on Oct. 5, 2012. "We have elected to effect a reverse stock split to help Lpath meet the listing requirements of the NASDAQ Capital Market," said Scott Pancoast, president and chief executive officer of Lpath. "We believe that a NASDAQ listing and the reverse stock split can broaden our shareholder base and increase the appeal of our stock to institutional investors. Further, these actions should provide benefits to our shareholders by improving trading liquidity in the stock, thereby enhancing long-term shareholder value." Each shareholder's percentage ownership interest in Lpath and the proportional voting power remains unchanged after the reverse stock split. In addition, the rights and privileges of the holders of the Company's common stock are unaffected by the reverse stock split. This reverse stock split is pursuant to a Certificate of Change filed with the State of Nevada. As of the effective date, every seven shares of issued and outstanding common stock will be converted into one share of common stock, with all fractional shares being rounded up to the nearest whole share. The reverse stock split will reduce the number of shares of issued and outstanding Class A common stock from approximately 73.7 million pre-split to approximately 10.5 million post-split. The number of authorized shares of Class A common stock will be reduced from 200 million to 28.6 million. Proportional adjustments will be made to Lpath's warrants, stock options, and equity-compensation plans. The reverse stock split will have no effect on the company's authorized shares of preferred stock. The Company's common stock will trade under a new CUSIP number (548910306). The Company's ticker symbol will remain unchanged, although a "D" will be placed on the LPTN ticker symbol (LPTND) for 20 business days to alert the public about the reverse stock split. It is not necessary for shareholders of the company to exchange their existing stock certificates for new stock certificates of the company in connection with the reverse stock split, although shareholders may do so if they wish. About Lpath, Inc. San Diego, Calif.-based Lpath, Inc. is a biotechnology company focused on the discovery and development of lipidomic-based therapeutics, an emerging field of medical science whereby bioactive lipids are targeted to treat human diseases. The Company reported a net loss of $3.11 million in 2011, compared with a net loss of $4.60 million in 2010. The Company's balance sheet at June 30, 2012, showed $21.03 million in total assets, $14.31 million in total liabilities and $6.71 million in total stockholders' equity. MARTIN COUNTY MARINE: Plan Confirmation Hearing on Oct. 11 ---------------------------------------------------------- Paul Ivice at The Palm Beach Post reports that Martin County Marine Corp. will return to the Bankruptcy Court Oct. 11 to seek approval of a plan of reorganization plan. According to the report, Martin County Marine is trying to shed about $1 million in debt, most of it accumulated in legal fees owed to a Stuart law firm, which it converted into a second mortgage. The report notes Martin County Marine Holdings LLC, a consortium of Orlando-based investors that buys troubled loans, holds the first mortgage for about $1.6 million, which it bought in late 2009 from Seacoast National Bank. According to the report, Jack McGregor, the marina's chief restructuring officer, said the reorganization plan groups creditors in six classes, including mortgage holders, government entities with tax claims and the Martin Downs Property Owners Association. He said unsecured creditors including several contractors and vendors owed about $1 million to $1.25 million -- depending on how the judge rules on an estimated $250,000 in claims by Sandi Nickerson, daughter of former co-owner Claire Nickerson -- will receive their pro rata share of $25,000 in settlement of the claims, for roughly 2 cents to 2.5 cents on the dollar recovery. The report adds Sandi Nickerson inherited a 25% ownership in the marina from her mother, but that stock was canceled with the bankruptcy. She said in July that the marina's debt is the result of mismanagement by Steven Brown, the real estate developer based in Chatsworth, Calif., and that she would submit an alternate plan of debt reorganization. No such plan was submitted, the CRO said. Martin County Marine Corp. filed for Chapter 11 protection (Bankr. S.D. Fla. Case No. 12-11819) on Jan. 24, 2012. According to the Palm Beach Post, the 24-year-old marina on the west bank of the St. Lucie River has a capacity to dry stack about 300 boats and also offers the typical range of marina services, including boat maintenance and repair, hurricane storage and boat sales. Judge Erik P. Kimball presides over the case. Bradley S. Shraiberg, Esq., at Shraiberg, Ferrara, & Landau P.A., represents the Debtor. The Debtor estimated assets of between $50,000 and $100,000, and debts of between $1 million and $10 million. In July 2012, Jack McGregor took over day-to-day operations of the marina as its chief restructuring officer. MEDIA GENERAL: S&P Hikes CCR to 'B-' on Tampa Tribune Sale Deal --------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on Richmond, Va.-based Media General Inc. to 'B-' from 'CCC+' and removed it from CreditWatch, where it was placed with positive implications on May 18, 2012. The rating outlook is stable. "In addition, we raised our issue-level rating on the company's senior secured notes to 'B-' from 'CCC+' and removed it from CreditWatch in conjunction with the upgrade. Our recovery rating on this debt remains unchanged at '3', indicating our expectation of meaningful (50% to 70%) recovery for noteholders in the event of a payment default," S&P said. "The corporate credit rating on Media General is based on our expectation that the company will be able to maintain adequate liquidity despite its very high leverage," noted Standard & Poor's credit analyst Jeanne Shoesmith. "We consider the company's business risk profile 'weak' (based on our criteria), reflecting the company's modest diversification and EBITDA margin that lags most peers'. Media General's pro forma ratio of lease-adjusted debt to EBITDA of 8.7x as of June 24, 2012 underpins our view of the company's financial risk profile as 'highly leveraged.'" "Media General operates a portfolio of 18 TV stations (indicating only modest diversification), with revenue concentration in NBC and CBS-affiliated stations. Its NBC and CBS affiliated stations account for roughly 60% and 30% of the company's revenues. This concentration leaves Media General vulnerable to declines in either of these networks' audience ratings. The company's advertising revenue is highly sensitive to economic downturns and election cycles. EBITDA can drop as much as 25% in nonelection years. Media General's pro forma EBITDA margin, at 26% as of June 24, 2012, lags its peers' and contributes to our assessment of the company's business risk profile as 'weak.' Despite the company's major network affiliations, its business is subject to long-term secular trends of fragmenting viewership and increasing audience engagement with Internet-based entertainment," S&P said. "Under our base-case scenario, we expect pro forma revenue to grow by roughly 25% in the second half of 2012, reflecting low-single- digit percent growth in core advertising, healthy growth in retransmission revenue, and a return of significant political advertising in the current presidential election year. We expect EBITDA to grow in excess of 40% in the second half of 2012 as a result of growth in high-margin political and retransmission revenue. In 2013, we expect revenue to decline at a mid-single- digit rate and EBITDA to decline by roughly 15%, with the decline in political advertising revenue more than offsetting low-single- digit growth in core local and national advertising revenue and further robust growth in retransmission revenue. The company's EBITDA margin, in our view, could expand to the high-20% area by the end of 2012, before contracting nearly 300 basis points (bps) in 2013. We expect television operating expenses will continue to grow at a low-single-digit rate, but that corporate expenses will decline in 2013 as the cost cuts taken in the second half of 2012 are realized," S&P said. "The company's adjusted debt to EBITDA is consistent with our financial risk indicative ratio of more than 5x for a 'highly leveraged' financial profile. Media General's pro forma EBITDA coverage of interest for the 12 months ended June 24, 2012 remained thin at 1.2x, compared to 1.5x a year ago. We expect adjusted debt to EBITDA will moderate to the low-7x area by the end of 2012 and that EBITDA coverage of interest will improve to the mid-1x area because of an increase in retransmission and political advertising revenue. Both of these measures are likely to deteriorate again in 2013; accordingly, our rating is predicated on the company maintaining sufficient, albeit less than robust, near-term liquidity," S&P said. MEHR IN LOS ANGELES: Files for Chapter 11 in Los Angeles -------------------------------------------------------- Mehr in Los Angeles Enterprises, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-43589) on Oct. 4, 2012. The Debtor estimated assets of at least $10 million and liabilities of at least $1 million. Michael S. Kogan, Esq., at Kogan Law Firm APC, in Los Angeles, serves as counsel. MERVYN'S LLC: Creditors Land $166 Million LBO Settlement -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the creditors of Mervyn's LLC brought home a $166 million settlement enabling the liquidated retailer to propose a Chapter 11 plan with a "meaningful distribution" to unsecured creditors, the creditor panel said in papers seeking bankruptcy court approval for the compromise. According to the report, Mervyn's filed for reorganization in July 2008, only to decide by October 2008 that liquidation was necessary. The official creditors' committee filed suit in September 2008 against discount retailer Target Corp. and about 40 other defendants, contending the $1.175 billion leveraged buyout in 2004 was fraught with fraudulent transfers. In addition to Target, defendants included Cerberus Capital Management LP, Lubert-Adler & Klaff Partners LP, and Sun Capital Partners Inc., the leader of the investor group that bought the Mervyn's chain. The report relates that there will be a hearing on Oct. 29 in U.S. Bankruptcy Court in Delaware for approval of the settlement. The report notes that although the going-out-of-business sales paid secured debt fully, the "case has been severely administratively insolvent" since late 2008, court papers state. According to Bloomberg, the settlement will cover $93 million in expenses that arose during the Chapter 11 case, not including professional claims, according to the court filing. Unsecured claims amount to about $400 million, according to the papers. The committee was represented in the lawsuit by Cooley LP. The firm was retained to prosecute the lawsuit on a contingency. Even a liquidating Chapter 11 plan can't be approved unless administration claims are fully paid. Administrative claims include expenses to run the business and professional costs incurred after the bankruptcy filing. The report recounts that pressure on the defendants for settlement increased in March 2010 when U.S. Bankruptcy Judge Kevin Gross declined to dismiss the suit, collapsing multiple transactions into one. By collapsing, Judge Gross said that a so-called safe harbor in federal bankruptcy law didn't apply to protect Target. Target isn't a party to the settlement agreement, although it receives and grants releases. Judge Gross' opinion said the LBO had "devastating" effects on Mervyn's creditors, "including the stripping of debtor's real estate assets." The lawsuit is Official Committee of Unsecured Creditors of Mervyn's Holdings LLC v. SCSF Mervyn's (Offshore) Inc. About Mervyn's LLC Headquartered in the San Francisco Bay Area, Mervyn's LLC -- http://www.mervyns.com/-- provided a mix of top national brands and exclusive private labels. Mervyn's had 176 locations in seven states. Mervyn's stores have an average of 80,000 retail square feet, smaller than most other mid-tier retailers and easier to shop, and are located primarily in regional malls, community 100 shopping centers, and freestanding sites. The Company and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 08-11586) on July 29, 2008. Howard S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis & Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi, Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The Debtors' financial advisor is Miller Buckfire & Co. LLC. Mervyn's LLC's balance sheet at Aug. 30, 2008, showed $665,493,000 in total assets and $717,160,000 in total liabilities resulting in a $51,667,000 total stockholders' deficit. MF GLOBAL: Parent Not Treated as Broker Liquidation --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that MF Global Holdings Ltd., the parent of the liquidating commodity broker, for the time being at least will not itself be treated like a commodity broker, as the result of an Oct. 5 ruling by a U.S. district judge in Manhattan. The issue of whether customers will have first dibs to the parent's assets wasn't decided. According to the report, MF Global Holdings and the commodity brokerage subsidiary MF Global Inc. began separate bankruptcies in October. The parent went into Chapter 11 while the broker was put in liquidation under the Securities Investor Protection act, each with a separate trustee. Commodities customer Sapere Wealth Management LLC filed papers in bankruptcy court, asking the judge to treat the parent company as a commodity broker under provisions of the Bankruptcy Code governing brokerage liquidations. Sapere, saying it has a claim for more than $90 million, reasoned that customer claims would come ahead of everyone else if the parent were treated as a broker. In February, the bankruptcy judge denied the request, first saying that brokerage provisions in bankruptcy law only apply if the company were in a Chapter 7 liquidation. Since the MF Global parent is in Chapter 11, the brokerage provisions couldn't apply, the judge said. The report relates that the bankruptcy judge next treated Sapere's motion as a request for conversion of the parent's bankruptcy to a Chapter 7 liquidation. The judge denied that request as well. According to Bloomberg, Sapere, based in Matthews, North Carolina, appealed. It lost in a 10-page opinion handed down on Oct. 5 by U.S. District Judge Jesse M. Furman, who never reached the question of whether the brokerage provisions of bankruptcy law should be applied to the MF Global parent. Judge Furman said that Sapere's appeal was premature because the decision from the bankruptcy court wasn't a "final order." Judge Furman said the opinion was an "interlocutory order" that Sapere wasn't entitled to appeal. The Bloomberg report discloses that the ruling in bankruptcy court wasn't final, Judge Furman said, because the bankruptcy judge specifically said he wasn't yet deciding how the parent's assets should be distributed. The court left open the question of whether the parent's bankrupt estate should be distributed under brokerage liquidation rules. The appeal is Sapere Wealth Management LLC v. Statutory Committee of MF Global Holdings Ltd. (In re MF Global Holdings Ltd., 12 3757, 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. MOTHER EARTH'S ALTERNATIVE: Court Dismisses Chapter 11 Case ----------------------------------------------------------- Stephanie Gleason, writing for Dow Jones Newswires, reports that Bankruptcy Judge Laura Taylor on Oct. 4 dismissed the Chapter 11 case of San Diego medical-marijuana dispensary Mother Earth Alternative Healing Cooperative. Judge Laura Taylor said in court papers, "Cause for dismissal exists where the only bankruptcy purpose is to attempt to preserve a lease and to otherwise support a business that is engaged in activity that is prohibited, indeed criminal, under federal law." "The proceeds of the business, as a result, are subject to forfeiture -- thus payments made during the case are illusory," the judge said. "Confirmation and consummation of a plan, thus, are impossible. . . . Liquidation in a chapter 7 is impossible; the Court will not require a chapter 7 trustee to engage in illegal activity." Dow Jones notes the dispensary had requested that the case be dismissed, saying it would be unable to propose or fund a plan of reorganization after the shutdown. The U.S. trustee supported the dismissal, saying only that Mother Earth should be required to pay the trustee fees, which Judge Taylor confirmed. According to Dow Jones, Mother Earth owner Bob Riedel confirmed Thursday said, "We intend to reopen." He said he will continue to fight for the people who don't have access to medical marijuana as a result of Mother Earth's closure. Mother Earth is a medical-marijuana dispensary, licensed by the state of California and San Diego County, but it's seen as illegal by the federal government, according to a July report by Dow Jones. Mother Earth's Alternative Healing Cooperative, Inc., filed for Chapter 11 (Bankr. S.D. Calif. Case No. 12-10223) on July 25, 2012, listing under $1 million in assets and debts. A copy of the petition is available at http://bankrupt.com/misc/casb12-10223.pdf David L. Speckman, Esq., at represented the Debtor as counsel. MT. VERNON PROPERTIES: Oct. 31 Hearing on Case Dismissal Bid ------------------------------------------------------------ Mt. Vernon Properties, LLC, is asking the Bankruptcy Court to dismiss its Chapter 11 case. The Debtor's assets consisted primarily of its real properties. Any other assets listed on the Debtor's schedules of assets and liabilities have since been liquidated and/or disbursed to pay the Lenders and expenses of the Chapter 11 case. The Debtor's properties have been sold and the Debtor has no assets with which to formulate and confirm a plan. The Debtor also noted that, because it is the party seeking dismissal of the voluntary case -- as opposed to a creditor seeking dismissal or conversion -- its request for dismissal rather than conversion should be given some deference. The Debtor has requested that the dismissal order provide that the provisions and effectiveness of the sale orders entered in the case will survive dismissal. A continued hearing on the proposed case dismissal is scheduled for Oct. 31, 2012, at 11:00 a.m. U.S. Trustee's Objection The U.S. Trustee, which has also sought dismissal of the case, said it does not oppose the Debtor's move. The U.S. Trustee, however, expressed concerned with certain provisions in the proposed order. The U.S. Trustee wants the Court retain jurisdiction over the Debtor's case. About Mt. Vernon Properties Mt. Vernon Properties, LLC, based in Baltimore, Maryland, is the owner of many parcels of real property located in Baltimore City that the Debtor operates as multi-family rental properties. The Company filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 11-24801) on July 18, 2011. Judge David E. Rice presides over the case. Aryeh E. Stein, Esq. -- astein@meridianlawfirm.com -- at Meridian Law, LLC, in Baltimore, serves as bankruptcy counsel. The Debtor disclosed $10,237,448 in assets and $15,064,059 in liabilities as of the Chapter 11 filing. The petition was signed by Ronald Persaud, managing member of Mt. Vernon Properties II LLC, the Debtor's sole member. NASSAU BROADCASTING: Seeks 8-Week Extension to File Plan -------------------------------------------------------- Marie Beaudette at Dow Jones' DBR Small Cap reports that Nassau Broadcasting Corp. is seeking an eight-week extension to file a creditor-repayment plan as it awaits regulatory approval to sell its radio stations. About Nassau Broadcasting Nassau Broadcasting Partners LP is a radio-station owner and operator. Three secured lenders -- affiliates of Goldman Sachs Group Inc., Fortress Investment Group LLC and P.E. Capital LLC -- filed involuntary Chapter 7 bankruptcy petitions (Bankr. D. Del. Case No. 11-12934) on Sept. 15, 2011, against Nassau Broadcasting Partners LP, the owner of 45 radio stations in the northeastern U.S. The lender group said in court papers that they are owed $83.8 million secured by all of Nassau's property. Involuntary petitions were also filed against three affiliates of Nassau, which is based in Princeton, New Jersey. The lenders said the stations aren't worth enough to pay them in full. Nassau Broadcasting in October won a Delaware bankruptcy court's blessing to convert its involuntary Chapter 7 bankruptcy -- pressed by creditors including Goldman Sachs Lending Partners LLC -- to a proceeding on its own terms in Chapter 11. NEWPAGE CORP: Senior Lenders to Recover 56.6% Under Plan -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that NewPage Corp. filed a revised reorganization plan along with an explanatory disclosure statement telling first-lien creditors they will have a 56.6% recovery by receiving all of the new stock in the paper maker in exchange for debt. According to the report, the plan, filed after business hours on Oct. 5, was the product of a settlement cobbled together by a bankruptcy judge serving as mediator. The settlement was disclosed Oct. 1. There will be an Oct. 31 hearing to approve the disclosure statement. Second-lien noteholders and some unsecured creditors will split $30 million in cash and the first $50 million collected by a litigation trust. The disclosure statement tells holders of $1.06 billion in second-lien debt that their recovery amounts to 6%. The report relates that depending on which election some creditors make, the recovery by holders of $29.3 million in unsecured claims is 5.3%, according to the disclosure statement. Trade suppliers who agree to provide credit in the future will receive 15% on their claims over two years. For holders of $207.8 million in senior subordinated debt, the predicted recovery is 0.2%, according to the disclosure statement. After the initial $50 million from the trust, additional distributions will be shared by the first- and second-lien noteholders and some unsecured creditors. NewPage will fund the litigation trust with $40 million in cash and specified lawsuit recoveries. NewPage will also loan the trust $5 million for administrative expenses. The official creditors' committee supports the newly negotiated plan. The report notes that NewPage filed a Chapter 11 plan in August that dissatisfied both secured and unsecured creditors. The company said unsecured creditors were "hopelessly out of the money," with no theory that would bring them a dividend under a Chapter 11 plan. The settlement compromised allegations by the official creditor's committee that that the lenders financed an acquisition in 2007 and a refinancing two years later that included fraudulent transfers. The Bloomberg report discloses that NewPage, 80%-owned by Cerberus Capital Management LP, disclosed assets of $3.4 billion and debt totaling $4.2 billion in the Chapter 11 reorganization begun in September 2011. Liabilities included $232 million on a revolving credit, plus $1.77 billion on 11.375% senior secured first-lien notes. Second-lien obligations include $802 million in 10% secured notes and $225 million in floating-rate notes. In addition to $200 million in 12% senior unsecured notes, $498 million is owing on two issues of floating-rate pay-in-kind notes. 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. NORTHSTAR AEROSPACE: Court Approves Bid to Reject CBA ----------------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court approved Northstar Aerospace's motion to reject collective bargaining agreements with Communication Workers of America, Local Union No. 14430. About Northstar Aerospace Chicago, Illinois-based Northstar Aerospace -- http://www.nsaero.com/-- is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. Northstar Aerospace, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington, Delaware, on June 14, 2012, to sell its business to affiliates of Wynnchurch Capital, Ltd., absent higher and better offers. Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel to the Debtors. The Debtors have obtained approval to hire Logan & Co. Inc. as the claims and notice agent. Certain Canadian affiliates are also seeking protection pursuant to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended. As of March 31, 2012, Northstar disclosed total assets of $165.1 million and total liabilities of $147.1 million. Approximately 60% of the assets and business are with the U.S. debtors. OCALA FUNDING: Taylor Bean Unit Sues to Recover Fraudulent Payment ------------------------------------------------------------------ Jacqueline Palank at Dow Jones' Daily Bankruptcy Review reports that Ocala Funding LLC is suing to recover nearly $22.5 million that was looted from its coffers as part of the fraud that took down its parent, mortgage lender Taylor, Bean & Whitaker Mortgage Corp. About Ocala Funding Orange, Florida-based Ocala Funding, LLC, a funding vehicle once controlled by mortgage lender Taylor Bean & Whitaker Mortgage Corp., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-04524) in Jacksonville on July 10, 2012. Ocala Funding used to be the largest originator and servicer of residential loans. Ocala was created by Taylor Bean & Whitaker to purchase loans originated by TBW and selling the loans to third parties, Freddie Mac. In furtherance of this structure Ocala raised money from noteholders Deutsche Bank AG and BNP Paribas Mortgage Corp. and other financial institutions, as secured lenders through sales of asset-backed commercial paper. The Debtor disclosed $1,747,749,787 in assets and $2,650,569,181 in liabilities as of the Chapter 11 filing. TBW was forced to file for Chapter 11 relief (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009, amid allegations of fraud by Taylor Bean's former CEO Lee Farkas and other employees. Mr. Farkas is now serving a 30-year prison term for 14 counts of conspiracy and fraud for being the mastermind of a $2.9 billion bank fraud. Mr. Farkas allegedly directed the sale of more than $1.5 billion in fake mortgage assets to Colonial Bank and misappropriated more than $1.5 billion from Ocala. TBW's bankruptcy also caused the demise of Colonial Bank, which for years was TBW's primary bank. TBW and its joint debtor-affiliates confirmed their Second Amended Joint Plan of Liquidation on July 21, 2011, and the TBW Plan became effective on Aug. 10, 2011. The TBW Plan established the TBW Plan Trust to marshal and distribute all remaining assets of TBW. Neil F. Lauria, as CRO for TBW and trustee of the TBW Plan Trust, signed the Chapter 11 petition of Ocala. In its Chapter 11 Petition, Ocala estimated more than $1 billion in assets and debts. Ocala holds 252 mortgage loans with an unpaid balance of $42.3 million as of May 31, 2012. The Debtor also holds five "real estate owned" properties resulting from foreclosures. The Debtor also holds $22.4 million in proceeds of mortgage loans previously owned by it that are on deposit in an account in the Debtor's name at Regions Bank. It also has an interest in $75 million in cash, consisting of proceeds of mortgage loans previously owned by the Debtor, that are in an account maintained by Bank of America, N.A. as prepetition indenture trustee for the benefit of the Noteholders. The Debtor also holds a claim in the current amount of $1.6 billion against the estate of TBW. The largest unsecured creditors include the Federal Deposit Insurance Corp., owed $898,873,958; and Cadwalader, Wickersham & Taft LLP, owed $1,632,385. Judge Jerry A. Funk presides over the case. Proskauer Rose LLP and Stichter, Riedel, Blain & Prosser, serve as the Debtor's counsel. Neil F. Lauria at Navigant Capital Advisors, LLC, serves as the Debtor's Chief Restructuring Officer. OCWEN FIN'L: Fitch Puts 'B+' IDR on Watch Negative Over HRH Deal ---------------------------------------------------------------- Fitch Ratings placed Ocwen Financial Corporation's 'B+' long-term Issuer Default Rating on Rating Watch Negative, following the company's announcement on Oct. 3, 2012 that it has entered into an agreement with private equity firm WL Ross & Co. LLC to acquire Homeward Residential Holdings, Inc. and its various mortgage loan servicing and origination operating subsidiaries. At the same time, Fitch has affirmed Ocwen's short-term IDR at 'B'. Homeward's acquisition is subject to regulatory approval and anticipated to close by year-end 2012. Currently, Homeward services approximately 422,000 mortgage loans with an aggregate unpaid principal balance of over $77 billion, which would bring Ocwen's combined mortgage servicing portfolio to 1.2 million mortgage loans with an unpaid principal balance of approximately $209 billion based on Ocwen's June 30, 2012 data. Homeward's loan origination business includes correspondent and retail lending and is focused on conforming, Agency mortgages. The transaction is expected to be funded by approximately $588 million in cash and $162 million in Ocwen convertible stock. The cash portion of the acquisition is expected to be funded through existing balance sheet cash on hand and operating cash flows, as well as proceeds from the sale of a portion of its servicing assets. While Fitch does not anticipate Ocwen to undertake incremental debt to finance the acquisition, overall leverage is expected to increase on a pro forma basis, as the company assumes approximately $2.3 billion of Homeward's existing servicing advances. While Fitch views the acquisition as strategically complementary to Ocwen's current business model, there remain near-term integration and execution risks, which could result in potential service disruptions, which may ultimately impact cash flow generation. Fitch remains concerned regarding the potential leverage implications and integration risks associated with Ocwen's ongoing growth through large, opportunistic portfolio acquisitions. In addition, heightened regulatory scrutiny for the overall sector continues to weigh on the company's operational risk profile. RATING DRIVERS AND SENSITIVITIES Resolution of the Rating Watch Negative will be evaluated in the context of the success of the integration of Homeward, the extent to which Ocwen is able to stabilize leverage, and any other acquisitions that Ocwen pursues over the short- to intermediate term. The ratings could be downgraded due to a material deterioration in revenue and cash flow generation resulting from potential integration risks and service disruptions. Should Ocwen pursue future acquisitions that would require a substantial cash outlay or a need for incremental debt that results in an increase in balance sheet leverage beyond Fitch's expectations for the current rating level, this could also yield negative rating actions. Fitch expects a potential downgrade would be limited to two notches from Ocwen's current rating level of 'B+'. Conversely, the rating could be affirmed in the event that Ocwen is able to maintain sufficient liquidity and funding flexibility over an extended period of time, including a reduction of balance sheet leverage to pre-acquisition levels. Positive improvement in operating performance, including incremental EBITDA and cash flow generation through measured growth, also may lead to a ratings affirmation. Fitch has taken the following rating actions: Ocwen Financial Corporation -- Long-term IDR of 'B+', placed on Rating Watch Negative; -- Short-term IDR affirmed at 'B'. ODYSSEY DIVERSIFIED: Files Schedules of Assets and Liabilities -------------------------------------------------------------- Odyssey Diversified VI, LLC, filed with the Bankruptcy Court for the Middle District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property None B. Personal Property $549 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $20,000,000 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $4,884,004 ----------- ----------- TOTAL $549 $24,884,004 Odyssey Diversified VI, LLC, Odyssey Diversified VII, LLC, and Odyssey Diversified IX, LLC, sought Chapter 11 protection (Bankr. M.D. Fla. Case Nos. 12-12323 to 12-12325) on Aug. 10, 2012, in Tampa, Florida. Edward J. Peterson. Esq., at Tampa, Florida, serves as counsel to the Debtors. Diversified VI's and Diversified VII each estimated up to $10 million in assets and up to $50 million in liabilities. PACIFIC GOLD: Issues 813.3 Million Common Shares to Executives -------------------------------------------------------------- Pacific Gold Corp. issued an aggregate of 813,339,192 shares of its common stock, including 590,046,248 shares to its executive officers and 144,000,000 shares to an affiliated entity of one of its executive officers, as follows: 1. 256,871,160 shares to Robert Landau, the Company's Chief Executive Officer, in exchange for $321,088 of past due salary; 2. 221,808,760 shares to Mitchel Geisler, the Company's Chief Operating Officer, in exchange for $277,260 of past due salary; 3. 31,272,464 shares to Mr. Geisler for payment of $39,090 in unreimbursed expenses; 4. 4,892,944 shares to a lender for repayment of $6,116 in outstanding debt; 5. 40,800,000 shares to an investor for a $51,000 investment of new equity; 6. 144,000,000 shares to Jabi Inc., an entity affiliated with Mr. Landau, upon conversion of $180,000 in principal and interest due under an outstanding convertible note; 7. 13,600,000 shares to a lender upon conversion of $17,000 in principal due under an outstanding convertible note; 8. 80,093,864 shares to Mr. Landau for payment of $100,117 in unreimbursed expenses related to the Company's Nevada Rae Gold, Inc. subsidiary; and 9. 20,000,000 shares to a lender for repayment of $25,000 in outstanding debt owed by the Company's Pilot Mountain Resources subsidiary. These securities were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. About Pacific Gold Las Vegas, Nev.-based Pacific Gold Corp. is engaged in the identification, acquisition, and development of prospects believed to have gold mineralization. Pacific Gold through its subsidiaries currently owns claims, property and leases in Nevada and Colorado. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Silberstein Ungar, PLLC, in Bingham Farms, Michigan, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred losses from operations, has negative working capital and is in need of additional capital to grow its operations so that it can become profitable. The Company reported a net loss of $1.38 million in 2011, compared with a net loss of $985,278 in 2010. The Company's balance sheet at June 30, 2012, showed $1.48 million in total assets, $6.16 million in total liabilities and a $4.68 million total stockholders' deficit. PATRIOT COAL: Caterpillar Objects to Bid to Move Ch. 11 Case ------------------------------------------------------------ Lisa Uhlman at Bankruptcy Law360 reports that Patriot Coal Corp. creditor Caterpillar Inc. filed an objection Friday to several requests to move the debtor's Chapter 11 case out of New York, saying doing so would not be in the interests of justice and would unfairly favor Patriot's union. The company and affiliates Caterpillar Financial Services Corp. and Caterpillar Global Mining LLC, which refer to themselves collectively as the CAT creditors, filed the post-hearing opposition to motions by the United Mine Workers of America and a group of sureties to transfer the case, according to Bankruptcy Law360. 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: Objects to Automatic Stay Motion ---------------------------------------------- BankruptcyData.com reports that Patriot Coal filed with the U.S. Bankruptcy Court an objection to the motion filed by Patricia Willits, William G. Parrott Jr. and Don Petrie (Trustee for the PPW Royalty Trust) for relief from the automatic stay. The Debtors assert, "The Motion has no legal basis and should be denied. As an initial matter, the Movants do not even have standing to modify the automatic stay because they are not creditors of the Debtors (precisely because it is now res judicata that the Movants have no claims against the Debtors). In addition, even putting aside their lack of standing, the Movants do not come close to establishing 'cause' to lift the automatic stay." 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. PEAK 10: Moody's Assigns 'B3' Corp. Family Rating ------------------------------------------------- Moody's Investors Service has assigned a first-time B3 Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Peak 10, Inc. Moody's has also assigned B2 (LGD3-34%) ratings to the company's proposed $330 million senior secured credit facilities which consist of a $300 million senior secured term loan due 2019 and $30 million senior secured revolver due 2018. The proceeds from the new senior secured facilities along with cash on hand will be used to fund a $215 million dividend to the company's equity sponsor and repay existing senior debt. The outlook is stable. Issuer: Peak 10, Inc. Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3 US$300M Senior Secured Bank Credit Facility, Assigned B2 (LGD3, 34%) US$30M Senior Secured Bank Credit Facility, Assigned B2 (LGD3, 34%) Outlook, Stable Ratings Rationale Peak 10's B3 corporate family rating reflects its small scale, high leverage and aggressive financial policy. The rating also reflects the company's high capital intensity and Moody's concerns about the risk of price competition developing within the industry. The aggressive, debt-financed dividend will result in very high leverage and low interest coverage metrics, positioning Peak 10 weakly within the B3 rating. These limiting factors are partially offset by Peak 10's stable base of contracted recurring revenues, its position in smaller markets with less intense competitive dynamics and the strong market demand for colocation services. The data center industry continues to attract investment due to its growth profile and inherent operating leverage. Operators such as Peak 10 currently hold a first-mover advantage and are positioned to grow and capture market demand. But, Moody's believes that the data center industry is vulnerable to cyclicality. In such a cycle, strong demand and low interest rates trigger rapid investment in new supply which, due to long construction intervals and imprecise demand forecasts, can exceed actual demand and cause rental prices to fall. In this context, the current state of strong demand and limited supply could represent a peak in the cycle. The proposed $330 million senior secured credit facilities are rated B2 (LGD3 -34%), one notch higher than the CFR given the support provided by the company's unrated $135 million mezzanine debt. Moody's expects Peak 10 to have adequate liquidity over the next twelve months, with approximately $10 million in cash or equivalents and an undrawn $30 million revolving credit facility at the transaction's close. Moody's projects that Peak 10's cash from operations and revolver should be sufficient to meet its cash obligations over the next 12-18 months. The stable outlook reflects Moody's view that Peak 10 will continue to produce strong revenue and EBITDA growth that will allow the company to delever following this transaction. Downward rating pressure could develop if liquidity becomes strained or adjusted leverage remains above 7x for more than 12 months, which may result from business deterioration or future debt-funded acquisitions or dividends. While unlikely, Moody's could consider a ratings upgrade if the company generated free cash flow equal to at least 5% of debt and leverage were to trend towards 4x (both on a Moody's adjusted basis). The principal methodology used in rating Peak 10 Parent Corporation was the Global Communications Infrastructure Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Charlotte, NC, Peak 10, Inc. is a provider of network-neutral data center, cloud and managed services. The company currently operates 23 data centers in 10 markets across the United States. PENNFIELD CORPORATION: Case Summary & Creditors List ------------------------------------------------------ Debtor: Pennfield Corporation 2260 Erin Court Lancaster, PA 17601 Bankruptcy Case No.: 12-19430 Chapter 11 Petition Date: October 3, 2012 Court: U.S. Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Bruce I. Fox Debtor's Counsel: Aris J. Karalis, Esq. MASCHMEYER KARALIS P.C. 1900 Spruce Street Philadelphia, PA 19103 Tel: (215) 546-4500 E-mail: akaralis@cmklaw.com - and ? Robert W. Seitzer, Esq. MASCHMEYER KARALIS P.C. 1900 Spruce Street Philadelphia, PA 19103 Tel: (215) 546-4500 E-mail: rseitzer@cmklaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Arnold Sumner, president. Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bryn Mawr Trust Company -- $7,698,000 1 West Chocolate Avenue, Suite 200 Hershey, PA 17033 Bunge North America (East) Inc. -- $1,231,000 P.O. Box 28500 11720 Borman Drive St. Louis, MO 63146-1000 Risser Grain Inc. -- $978,000 1196 Holtwood Road Holtwood, PA 17532 Hostetter Grains Incorporated -- $947,000 481 Limestone Road Oxford, PA 19363 Agricultural Prod. Extension LLC -- $798,000 40 Main Street Hamburg, NY 14075 Agricultural Commodities, Inc. ?- $563,000 1585 Granite Station Road Gettysburg, PA 17325 Shady Brae Farms Inc. ?- $490,000 29 Engle Road Marietta, PA 17547 Keystone Commodities Company -- $320,000 1041 Spoon Avenue Landisville, PA 17538 Interstate Commodities, Inc. -- $273,000 P.O. Box 607 Troy, NY 12181 Keystone Ingredients/Div Old Mill -- $187,000 Troy, Inc. Kirby Agri Inc. -- $126,000 Land O'Lakes Animal Milk Products -- $113,000 Co. Reconserve of Maryland -- $110,000 Quality Liquid Feeds, Inc. -- $109,000 JBS (Smithfield) -- $93,000 Charles Sunday -- $79,000 J L Moyer & Sons, Inc. -- $76,000 M & T Trucking, Inc. -- $71,000 American Farm Products -- $71,000 Pleasantview Farms, Inc. -- $69,000 PEREGRINE FINANCIAL: Vision Financial Buys Bulk Transfer -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that customers of Peregrine Financial Group Inc., the bankrupt commodity broker, will receive their first interim distribution by having their accounts and cash transferred in bulk to Vision Financial Markets LLC. With offices in Chicago, Connecticut, California and New York, Vision is paying the Peregrine trustee $325,000 for receiving the accounts and hoping customers won't move their accounts to other brokers. According to the report, the bankruptcy judge in Chicago formally approved the distributions and account transfers on Oct. 5. The first distribution of $123 million to futures customers is being made from the $181 million in customer property trustee Ira Bodenstein has collected. The interim distribution will be 30%, or $111.75 million in cash, for so-called 4d customers with commodity futures and options accounts. The first distribution will be 40%, or $11.25 million cash, for so-called 30.7 customers with accounts for trading futures or options on foreign exchanges. The report relates that Vision will receive all of the customers' 14,600 accounts, including so-called open positions. Mr. Bodenstein separately will transfer "specifically identifiable customer property" and customers' Treasury securities. The distribution is being made under commodity brokerage provisions in the Bankruptcy Code because Peregrine isn't covered by the Securities Investors Protection Act and its customers therefore aren't entitled to payments from the SIPC fund. Mr. Bodenstein is holding back $58 million pending resolutions of customer's claims and determinations of whether there were any "inappropriate historical cash movements." About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's CEO Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial is the regulated unit of the brokerage PFGBest. At a quickly-convened hearing on July 13, the bankruptcy judge authorized the Chapter 7 trustee to operate Peregrine's business on a "limited basis" through Sept. 13. PINNACLE AIRLINES: Unions Balk at Bid to Void Labor Contracts ------------------------------------------------------------- Patrick Fitzgerald at Dow Jones' Daily Bankruptcy Review reports that Pinnacle Airlines Corp.'s thousands of pilots and flight attendants are objecting to the airline's bid to scrap their contracts, a move the regional carrier says is necessary to exit bankruptcy protection. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. The official committee of unsecured creditors tapped Morrison & Foerster LLP as its counsel, and Imperial Capital, LLC, as financial advisors. Pinnacle has the exclusive right to propose a reorganization plan until Jan. 25. PINNACLE AIRLINES: T. Schmidt Succeeds A. McDuffie as PAO --------------------------------------------------------- Pinnacle Airlines Corp. on March 29, 2012, Anthony D. McDuffie was appointed as the principal accounting officer of the Company. On Sept. 28, 2012, Mr. McDuffie resigned as the Company's Vice President, Finance and Controller, as well as the Company's principal accounting officer. Thomas M. Schmidt was appointed as the principal accounting officer of the Company on Oct. 1, 2012. Mr. Schmidt, 60, has been Vice President, Operations Finance of the Company since March 2011. From October 2005 through February 2011, Mr. Schmidt was the Vice President, Finance of Mesaba Aviation, Inc., a subsidiary of the Company. Mr. Schmidt is an at-will employee and does not have an employment agreement with the Company. Mr. Schmidt continues to be eligible to participate in the health, dental, disability, life insurance and 401(k) plans that the Company makes available to all employees. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. The official committee of unsecured creditors tapped Morrison & Foerster LLP as its counsel, and Imperial Capital, LLC, as financial advisors. Pinnacle has the exclusive right to propose a reorganization plan until Jan. 25. PITTSBURGH CORNING: Plan Confirmation Hearing Today in Pittsburgh ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Pittsburgh Corning Corp., a joint venture between Corning Inc. and PPG Industries Inc., may succeed after almost 13 years in persuading a bankruptcy judge to approve a reorganization plan. According to the report, there will be a confirmation hearing today, Oct. 10, in Pittsburgh where U.S. Bankruptcy Judge Judith K. Fitzgerald will consider approving the plan. The company says Judge Fitzgerald already rejected objections lodged by creditors Garlock Sealing Technologies LLC, a company trying to eliminate its own asbestos claims in Chapter 11, and by two insurance companies, Mt. McKinley Insurance Co. and Everest Reinsurance Co. The plan coming to court tomorrow was filed in April as the result of Judge Fitzgerald's ruling in June 2011 when, for a second time, she refused to confirm a reorganization plan designed to shed PCC, Corning, and PPG of liability for asbestos claims arising from PCC's business. She refused to approve a prior version of the plan in 2006. The report relates that last year, Judge Fitzgerald rebuffed the plan because it would have barred claims that were independent of PCC's business. She said the plan didn't comply with the so- called insurance neutrality test because it was ambiguous and might be interpreted to alter insurance company's rights to resist payment of asbestos claims. Judge Fitzgerald said during a hearing in June that the two insurance companies' objections weren't well taken, according to the company. The company also argues that Judge Fitzgerald already ruled that Garlock doesn't have the right to object to the plan. The Bloomberg report discloses that although rejected by the judge, last year's plan was accepted by 99% of asbestos claimants. When confirmed, the plan will allow both Corning and PPG to shed some liabilities by channeling asbestos claims into a trust to be funded with insurance proceeds. The new plan, like predecessors, is supported by the asbestos claimants' committee and the representative of future claimants. It deals with 140,000 claims arising from an asbestos pipe insulation not manufactured after 1972. About Pittsburgh Corning Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 00-22876) on April 16, 2000, to address numerous claims alleging personal injury from exposure to asbestos. At the time of the bankruptcy filing, there were about 11,800 claims pending against the Company in state court lawsuits alleging various theories of liability based on exposure to Pittsburgh Corning's asbestos products and typically requesting monetary damages in excess of $1 million per claim. The Hon. Judith K. Fitzgerald presides over the case. Reed Smith LLP serves as counsel and Deloitte & Touche LLP as accountants to the Debtor. The United States Trustee appointed a Committee of Unsecured Trade Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to the Committee of Unsecured Trade Creditors, and Pascarella & Wiker, LLP, as financial advisor. The U.S. Trustee also appointed a Committee of Asbestos Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of these professionals by the Committee of Asbestos Creditors: (i) Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell & Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as special insurance counsel; (iv) Legal Analysis Systems, Inc., as Asbestos-Related Bodily Injury Consultant; (v) defunct firm, L. Tersigni Consulting, P.C. as financial advisor, and (vi) Professor Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered. On Feb. 16, 2001, the Court approved the appointment of Lawrence Fitzpatrick as the Future Claimants' Representative. The Bankruptcy Court authorized the retention of Meyer, Unkovic & Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP as his special counsel, and Analysis, Research and Planning Corporation as his claims consultant. In 2003, a plan of reorganization was agreed to by various parties-in-interest, but, on Dec. 21, 2006, the Bankruptcy Court issued an order denying the confirmation of that plan, citing that the plan was too broad in addressing independent asbestos claims that were not associated with Pittsburgh Corning. On Jan. 29, 2009, an amended plan of reorganization (the Amended PCC Plan) -- which addressed the issues raised by the Court when it denied confirmation of the 2003 Plan -- was filed with the Bankruptcy Court. As reported by the TCR on April 25, 2012, Pittsburgh Corning Corp., a joint venture between Corning Inc. and PPG Industries Inc., filed another amendment to its reorganization plan designed to wrap up a Chapter 11 begun 12 years ago. According to the report, a hearing to consider the new plan is scheduled for June 21. RADAR PICTURES: Former Associates to Face Suit Over Takeover ------------------------------------------------------------ Zach Winnick at Bankruptcy Law360 reports that Los Angeles Superior Court Judge Ernest M. Hiroshige held Thursday that former associates of movie mogul Frederick "Ted" Field will have to face in court allegations that they hatched an elaborate scheme to take over his Radar Pictures Inc., the production company behind "The Last Samurai," and force it into bankruptcy. Bankruptcy Law360 relates that Judge Hiroshige denied motions to compel arbitration filed by five former Field associates and two of their companies, Four K Entertainment LLC and Convergence Media LLC. Based in Los Angeles, California, Radar Pictures Inc. produces, finances, and acquires feature-length motion pictures. Radar Pictures, Inc., filed Chapter 11 petition (Bankr. C.D. Calif. Case No. 11-56008) on Nov. 4, 2011. Judge Sheri Bluebond presides over the case. John Joseph Gezelin, Esq., at Alan R. Smith Law Offices, represent the Debtor. Radar Pictures estimated $100,001 to $500,000 in assets and $1,000,001 to $10,000,000 in debts. RADIOSHACK CORP: Board OKs Salary Hike for CFO, CEO to $750,000 --------------------------------------------------------------- The Board of Directors of RadioShack Corporation an increase of Dorvin Lively's annual salary from $625,000 to $750,000. Mr. Lively serves as the Company's Chief Financial Officer and Acting Chief Executive Officer. If Mr. Lively is employed by the Company on Oct. 1, 2013, Mr. Lively will be entitled to receive a one-time cash retention bonus of $750,000, subject to any required withholding taxes. That payment will be made on or before Oct. 31, 2013. In addition, the Company will grant Mr. Lively $750,000 in value of restricted shares. One-third of the Equity Retention Bonus will vest on each of Oct. 1, 2013, Oct. 1, 2014, and Oct. 1, 2015, subject to Mr. Lively being employed by the Company on each such vesting date. If Mr. Lively is terminated without cause prior to Oct. 1, 2013, Mr. Lively will be entitled to the following: (x) a one-time cash payment equal to $750,000, subject to any required withholding taxes, to be paid within 30 days of the date of that termination; and (y) the vesting of any of the Equity Retention Bonus not vested at the time of that termination. The Management Development and Compensation Committee of the Board also changed the base salaries of Ms. Sharon Stufflebeme, Senior Vice President - Chief Information Officer, and Mr. Gene Dinkens, Senior Vice President - Store Operations, to $425,000 and Mr. Telvin Jeffries, Executive Vice President - Chief Human Resources Officer and General Manager of Retail Services, to $500,000, effective Sept. 26, 2012. About Radioshack RadioShack sells consumer electronics and peripherals, including cellular phones. It operates roughly 4,700 stores in the U.S. and Mexico. It also operates about 1,500 wireless phone kiosks in Target stores. The company also generates sales through a network of 1,100 dealer outlets worldwide. Revenues for the last 12 months' period ending June 30, 2012, were roughly $4.4 billion. Radioshack's balance sheet at June 30, 2012, showed $2.08 billion in total assets, $1.38 billion in total liabilities, and $704.6 million in total stockholders' equity. * * * As reported by the TCR on Aug. 1, 2012, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Fort Worth, Texas-based RadioShack Corp. to 'B-' from 'B+'. "The downgrade of RadioShack reflects our view that it will be very difficult for the company to improve its gross margin in the second half of the year," said Standard & Poor's credit analyst Jayne Ross, "given the highly promotional nature of year- end holiday retailing in the wireless and consumer electronic categories. It is our belief that all segments of the company's business will remain under margin pressure for 2012 and into 2013." In the July 27, 2012, edition of the TCR, Fitch Ratings has downgraded its long-term Issuer Default Rating (IDR) for RadioShack Corporation to 'CCC' from 'B-'. The downgrade reflects the significant decline in RadioShack's profitability, which has become progressively more pronounced over the past four quarters. RADIOSHACK CORP: Significant Decline Cues Fitch to Junk Ratings --------------------------------------------------------------- Fitch Ratings has taken the following rating actions on RadioShack Corporation: -- Long-term Issuer Default Rating (IDR) affirmed at 'CCC'; -- $450 million senior secured revolving credit facility affirmed at 'B/RR1'; -- $50 million senior secured term loan assigned 'B/RR1'; -- $100 million senior secured term loan facility assigned 'B-/RR2'; -- Senior unsecured notes downgraded to 'CC/RR6' from 'CCC-/RR5'. The ratings reflect the significant decline in RadioShack's profitability, which has become progressively more pronounced over the past four quarters. Results have been disappointing, due in particular to pressure on the company's mobility segment, leading to a marked deterioration in the company's credit profile. There is a lack of stability in the business and no apparent catalyst to stabilize or improve operations. In addition, sharp declines in cash flow, together with the expected repayment of the $375 million of convertible notes maturing in August 2013, is expected to materially reduce the company's financial flexibility. RadioShack's comparable store sales were flat in the second quarter ended June 30, 2012, and have been negative in four of the past five quarters due to mixed results in the mobility segment (51% of 2011 sales), sharp declines in the consumer electronics segment (19% of sales), and flattish sales in the signature segment (29% of sales). Weakness in sales have coincided with significant margin compression, with the gross margin off by over 800 basis points in the second quarter versus the second quarter of 2011 (2Q'11), due primarily to pressure within the mobility segment. EBITDA for 2Q'12 was negative $0.1 million (assuming stock based comp of $1.8 million) versus $83 million in 2Q'11. In the 12 months ended June 30, 2012, EBITDA fell to $145 million from $284 million in 2011 and $473 million in 2010. This caused lease adjusted debt/EBITDAR to increase to 6.8 times (x) at June 30, 2012, from with 5.1x at end-2011. Fitch now expects leverage will trend above 7x over the next two years as EBITDA will likely erode further, potentially to the $60 million- $80 million range for 2012. RadioShack's mobility segment generated 3.3% growth in the second quarter, while margins declined sharply due to the growth of smart phone sales (iPhones in particular). The mobility segment is a lower-margin business operating in a competitive space, and consumer awareness of RadioShack's mobile phone offerings is low, as the bulk of industry-wide wireless transactions are completed at the carrier's stores. The longer-term prospects for this segment are uncertain. The signature business (29% of 2011 sales), which includes sales of accessories, power and technical products sales, generates healthy margins but had flat sales in the second quarter following a 4% sales decline in 2011. The consumer electronics (19% of 2011 sales) segment experienced a 26.5% sales decline in the second quarter and a 19% sales decline in 2011, reflecting the competitive nature of that business as sales shift to the online channel. Overall, Fitch expects that the company will need to continue to be promotional given the challenging economy, price- sensitive consumer and largely commoditized consumer electronics space. RadioShack currently has adequate liquidity, with $517 million in cash (excluding restricted cash) and $393 million available on its secured credit facility as of June 30, 2012. RadioShack has suspended its dividend (annual rate of $50 million) to preserve liquidity. In addition, while the company has sufficient cash on hand to repay its nearest debt maturity, the $375 million of 2.5% convertible notes due August 2013, doing so is expected to materially reduce its financial flexibility. The $150 million in new notes will be used to refinance up to 40% of the convertibles and Fitch expects the remainder to be mainly paid down with cash. The ratings on the various securities reflect Fitch's recovery analysis which is based on a liquidation value of RadioShack in a distressed scenario of around $600 million. Applying this value across the capital structure results in an outstanding recovery prospect (91%-100%) for the asset-based facility which includes both the revolver and the new $50 million term loan (which has a last-out provision) tranche and are therefore rated 'B/RR1'. The ABL facility is collateralized by a first lien on receivables, inventory and select real estate. The $100 million term loan facility has a first lien on (i) intellectual property, (ii) furniture, fixtures, machinery & equipment; and, (iii) all other owned real estate (which is very minimal). The term loan facility also has a second lien on the collateral securing the ABL facility. Fitch anticipates that recovery to the term loan facility will primarily depend on its second lien collateral as it does not attribute material value to its first lien collateral. As the $100 million term loan facility is essentially 'third' in line on the inventory and receivables collateral, Fitch rates this one notch lower than the ABL facility at 'B-/RR2', indicating recovery of 70%-90%. Fitch estimates very little remaining proceeds to unsecured creditors and has downgraded the rating unsecured senior notes and convertible notes to 'CC/RR6' from 'CCC/RR5'. These notes have poor recovery prospects given default (0%-10%). WHAT COULD TRIGGER A RATING ACTION? Positive: Stabilization in the business leading to a sustainable recovery in operating trends and financial flexibility could lead to an upgrade. This is not expected in the near to intermediate term. Negative: Continued deterioration in EBITDA that further constrains cash flow and liquidity and impedes the company's day to day operations would lead to a downgrade. RAHA LAKES: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Raha Lakes Enterprises, LLC 11601 Wilshire Bouevard, Suite 2160 Los Angeles, CA 90025 Tel: (310) 432-2310 Bankruptcy Case No.: 12-43422 Chapter 11 Petition Date: October 3, 2012 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Ernest M. Robles Debtor's Counsel: Michael S. Kogan, Esq. KOGAN LAW FIRM APC 1901 Avenue of the Stars, Suite 1050 Los Angeles, CA 90067 Tel: (310) 432-2310 E-mail: mkogan@koganlawfirm.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Kayhan Shakib, managing member. Debtor's List of Its 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kamran Shakib Trade $250,000 10450 Wilshire Boulevard, #5G Los Angeles, CA 90024 Los Angeles County Tax Collector Property Tax $98,271 225 North Hill Street Los Angeles, CA 90012 Reed Smith LLP Trade $5,000 Department 33489 P.O. Box 39000 San Francisco, CA 94139 Marc Bral Trade $2,500 Tim Afrasiabi Trade $2,478 Abtin Missahi Trade $2,300 Caspian Insurance Services Trade $2,000 Yervand Darabedian Trade $2,000 Ali Rostampour Trade $1,500 Shipping Supply Plus, Inc. Trade $1,500 LA Municipal Services (DWP) Trade $1,000 Vicente Escalante Trade $600 American Waste Trade RAILAMERICA INC: S&P Withdraws 'BB-' CCR on Merger Completion ------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB-' corporate credit rating on Jacksonville, Fl.-based short-line railroad RailAmerica Inc. "The withdrawal follows the successful close of the proposed merger as previously announced and repayment of RailAmerica's outstanding debt," said Standard & Poor's credit analyst Anita Ogbara. Following close of the transaction, control of RailAmerica will be placed into a voting trust. The trust will remain in effect until the U.S. Surface Transportation Board issues its decision on Genesee & Wyoming's application to control RailAmerica and its railroads. This decision could be announced as early as the fourth quarter of 2012 or as late as the first quarter of 2013. RENEGADE HOLDINGS: Plan Confirmation Hearing Held Tuesday --------------------------------------------------------- Richard Craver at Winston-Salem Journal reported that Renegade Holdings Inc., Renegade Tobacco Co. and Alternative Brands Inc. were to return to the Bankruptcy Court in Greensboro, North Carolina Tuesday, Oct. 9, for confirmation of their reorganization plan. The report said Renegade intends to exit Chapter 11 bankruptcy protection in early 2013, focusing primarily on filtered cigars, including international contract sales, and taking its discount brands national. According to the report, U.S. District Judge William Stocks has approved the disclosure statement by Peter Tourtellot, trustee for the three companies. Mr. Tourtellot has amended the plan three times, the latest being submitted last week. According to the report, the terms of the plan include: -- pooling at least $15 million into a liquidation trust; -- resolving legal responsibilities, including ousting Calvin Phelps as the companies' owner; -- paying the companies' financial obligations within four years upon their exit; -- keeping control of the companies initially to Mr. Tourtellot, rather than selling the companies to a third party. -- creating new equity that Mr. Tourtellot would control until the equity is sold to investors or distributed to key company managers, or both. The report said the latest amended plan secured the support of Bank of the Carolinas Corp. The exit plan eventually would make the bank whole for $3.23 million on a term loan and $3 million on a revolving line of credit. The report recounted that the bankruptcy administrator in September objected to the plan. The U.S. Justice Department and the National Association of Attorneys General also had filed objections. According to the report, Mr. Tourtellot said that of the nine classes of creditors, five voted to accept the latest version of the plan, three voted against, and one did not cast a ballot. According to the report, the National Association of Attorneys General prefers an outright sale. Michael West, the bankruptcy administrator, said he is concerned about the feasibility of the plan, particularly certain financial aspects regarding administrative costs. According to the report, Mr. Tourtellot said the amended plan addresses Mr. West's administrative cost concerns and those of the Justice Department and attorneys general by clarifying the financial steps to be taken if the companies were to close and their assets required to be liquidated. The report noted that the Justice Department's Alcohol and Tobacco Tax and Trade Bureau said the disclosure statement does not set aside enough money to handle an excise tax dispute. Mr. West also expressed concerns about the federal excise tax issue. The report said creditors approved Renegade's initial reorganization plan in June 2010, which also was opposed by the attorneys general group, which represents 16 states including North Carolina. In July 2010, Judge Stocks vacated the plan and put the companies back into bankruptcy. He based that decision on hearing a presentation by the attorneys general about a criminal investigation in Mississippi involving Phelps and accusations of "unlawful trafficking in cigarettes and other related crimes." According to the report, Mr. Tourtellot said Judge Stocks vacated the first reorganization plan because creditors were not fully informed of the Mr. Phelps criminal investigation and how it could affect the companies' finances. Those details are included in the second disclosure statement. About Renegade Holdings Renegade Holdings and two subsidiaries -- Alternative Brands, Inc. and Renegade Tobacco Company -- filed for Chapter 11 protection (Bankr. M.D.N.C. Lead Case No. 09-50140) on Jan. 28, 2009, and exited bankruptcy on June 1, 2010. They were put back into bankruptcy July 19, 2010, when Judge William L. Stocks vacated the reorganization plan, in part because of a criminal investigation of owner Calvin Phelps and the companies regarding what authorities called "unlawful trafficking of cigarettes." Alternative Brands is a federally licensed manufacturer of tobacco products consisting primarily of cigarettes and cigars. Renegade Tobacco distributes the tobacco products produced by ABI through wholesalers and retailers in 19 states and for export. ABI also is a contract fabricator for private label brands of cigarettes and cigars which are produced for other licensed tobacco manufacturers. The stock of RHI is owned indirectly by Calvin A. Phelps through his ownership of the stock of Compliant Tobacco, LLC which, in turn, owns all of the stock of RHI which in turn owns all of the stock of RTC and ABI. Mr. Phelps was the chief executive officer of all three companies. All three of the Debtors' have their offices and production facilities in Mocksville, North Carolina. In August 2010, the Bankruptcy Court approved the appointment of Peter Tourtellot, managing director of turnaround-management company Anderson Bauman Tourtellot Vos & Co., as Chapter 11 trustee. RESIDENTIAL CAPITAL: FGIC Demands $193.7 Million to Cure Breaches ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that bond insurer Financial Guaranty Insurance Co. claims it's entitled to be paid $193.7 million before Residential Capital LLC can sell the loan-servicing business at a hearing in November. According to the report, FGIC, which says it guaranteed more of ResCap's securitized mortgages than anyone else, disagrees with the company's contention that there are no outstanding breaches of insurance contracts the buyer will acquire along with ResCap's loan servicing business. Bankruptcy law requires curing defaults before the bond insurance contracts can be given to the buyer as part of the sale. The largest category of breaches is about $190 million from what FGIC calls "improper addition of loans into the mortgage loan pool." New York-based FGIC said it guaranteed about 10% of ResCap's securitizations. The report notes that at the end of September, ResCap said it will negotiate with creditors about changes in the plan. Just before the announcement, third-lien bondholders withdrew their support for the so-called prepackaged plan. The bankruptcy court scheduled auctions for Oct. 23 where Fortress Investment Group LLC will make the first bid for the mortgage-servicing business. The Bloomberg report discloses that Berkshire Hathaway Inc. is to be the stalking-horse for the remaining portfolio of mortgages. A hearing to approve the sales is set for Nov. 5. The $2.1 billion in third-lien 9.625% secured notes due 2015 last traded on Oct. 4 for 100.25 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The $473.4 million of ResCap senior unsecured notes due April 2013 last traded on Oct. 5 for 25.375 cents on the dollar, according to Trace. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap is selling its mortgage origination and servicing businesses and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets. At the onset of the bankruptcy case, ResCap struck a deal with Nationstar Mortgage LLC for the mortgage origination and servicing businesses, and with Ally Financial for the legacy portfolio. Together, the asset sales are expected to generate roughly $4 billion in proceeds. Following a hearing in June, the bankruptcy judge scheduled auctions for Oct. 23. A hearing to approve the sales was set for Nov. 5. Fortress Investment Group LLC will make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. will serve as stalking-horse bidder for the remaining portfolio of mortgages. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: MBS Insurers Rail Against Portfolio Sales -------------------------------------------------------------- Joseph Checkler at Dow Jones' Daily Bankruptcy Review reports that two creditors who insure Residential Capital LLC's mortgage securities are railing against ResCap's upcoming sale of its loan portfolios, saying they don't have assurances that a new owner will pay them what they think they are owed. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap is selling its mortgage origination and servicing businesses and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets. At the onset of the bankruptcy case, ResCap struck a deal with Nationstar Mortgage LLC for the mortgage origination and servicing businesses, and with Ally Financial for the legacy portfolio. Together, the asset sales are expected to generate roughly $4 billion in proceeds. Following a hearing in June, the bankruptcy judge scheduled auctions for Oct. 23. A hearing to approve the sales was set for Nov. 5. Fortress Investment Group LLC will make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. will serve as stalking-horse bidder for the remaining portfolio of mortgages. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESPONSE GENETICS: Regains Compliance With NASDAQ Standards ----------------------------------------------------------- Response Genetics, Inc., a company focused on the development and commercialization of molecular diagnostic tests for cancer, announced today that on Oct. 5, 2012, the Company was notified that it has regained compliance with the NASDAQ Capital Market and its minimum market value of listed securities requirement. The Company regained compliance with NASDAQ Marketplace Rule 5550(b) (2) and was notified by NASDAQ that the delisting matter is now closed. About Response Genetics Response Genetics, Inc. -- http://responsegenetics.com/-- is focused on the development and sale of molecular diagnostic tests for cancer. RGI's technologies enable extraction and analysis of genetic information from genes derived from tumor samples stored as formalin-fixed and paraffin-embedded specimens. In addition to diagnostic testing services, RGI also generates revenue from the sales of its proprietary analytical pharmacogenomic testing services of clinical trial specimens to the pharmaceutical industry. The Company's headquarters is located in Los Angeles, California. RITZ CAMERA: Wants Until January to File Liquidating Plan --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Ritz Camera & Image LLC, once the operator of 265 camera stores and an Internet business, needs more time to file a Chapter 11 plan, although the assets are almost all sold. Unable to find a buyer to acquire the remaining camera stores as a going concern, liquidators were hired to run going out-of-business sales through the end of October. Last month, Ritz sold the right to use the name Boater's World and related trademarks and Internet names for $140,000. If approved by the Delaware bankruptcy judge at an Oct. 22 hearing, the plan-filing deadline will be pushed out by 90 days to Jan. 21. About Ritz Camera Beltsville, Maryland-based Ritz Camera & Image LLC -- http://www.ritzcamera.com-- sold digital cameras and accessories, and electronic products. It sought Chapter 11 protection (Bankr. D. Del. Case No. 12-11868) on June 22, 2012, to close unprofitable stores. Ritz claims to be the largest camera and image chain the U.S., operating 265 camera stores in 34 states as well as an Internet business. When it filed for bankruptcy, Ritz Camera intended to shut 128 locations and cut its staff in half. Included in the closing are 10 locations in Maryland and 4 in Virginia. Affiliate Ritz Interactive Inc., owner e-commerce Web sites that include RitzCamera.com and BoatersWorld.com, also filed for bankruptcy. RCI's predecessor, Ritz Camera Centers, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10617) on Feb. 22, 2009. Ritz generated $40 million by selling all 129 Boater's World Marine Centers. A group that included the company's chief executive officer, David Ritz, formed Ritz Camera & Image to buy at least 163 of the remaining 375 camera stores. The group paid $16.25 million in cash and a $7.8 million note. Later, Ritz sold a $4 million account receivable for $1.5 million to an owner of the company that owed the debt. In the 2009 petition, Ritz disclosed total assets of $277 million and total debts of $172.1 million. Lawyers at Cole, Schotz, Meisel, Forman & Leonard, P.A., served as bankruptcy counsel. Thomas & Libowitz, P.A., served as the Debtor's special corporate counsel and conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc., served as the Debtor's chief restructuring officer. Kurtzman Carson Consultants LLC acted as claims and noticing agent. Attorneys at Cooley Godward Kronish LLP and Bifferato LLC represented the official committee of unsecured creditors as counsel. In April 2010, the Court approved a liquidating Chapter 11 plan proposed by the company and the official creditor's committee. Under the Plan, unsecured creditors were to recover 4% to 14% of their claims. In the 2012 petition, RCI estimated total assets and liabilities of $50 million to $100 million. The Debtors owe not less than $16.32 million for term and revolving loans provided by secured lenders led by Crystal Finance LLC, as administrative agent. Attorneys at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims agent. WeinsweigAdvisors LLC's Marc Weinsweig has been appointed as Ritz's CRO. Mark L. Desgrosseilliers, Esq., and Ericka F. Johnson, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC. Crystal Finance, the DIP lender, is represented by Morgan, Lewis & Bockius and Young Conaway Stargatt & Taylor LLP. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee tapped Cooley LLP as its lead counsel, Richards, Layton & Finger, P.A. as its Delaware counsel, and PricewaterhouseCoopers LLP as its financial advisor. SANTEON GROUP: Incurs $75,000 Net Loss in First Quarter ------------------------------------------------------- Santeon Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $75,297 on $774,550 of revenue for the three months ended March 31, 2012, compared with a net loss of $122,640 on $510,054 of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $934,974 in total assets, $1.16 million in total liabilities and a $228,477 total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/FvpBPe The Company was late in filing its annual report on Form 10-K for the period ended Dec. 31, 2011. The Company reported a net loss of $475,333 for 2011, compared with a net loss of $699,993 for 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.0 million in total assets, $1.2 million in total liabilities, all current, and a stockholders' deficit of $173,180. The Company was also late in filing its Form 10-Qs for the three months ended March 31, 2011, June 30, 2011, Sept. 30, 2011, March 31, 2012, and June 30, 2012. As of Oct. 4, 2012, the Company has not yet filed its quarterly report for the period ended June 30, 2012. About Santeon Reston, Va.-based Santeon Group, Inc., is a diversified software products and services company specializing in the transformation and optimization of business through the deployment or the development of innovative products and services using Agile mindsets in the information systems/technology, healthcare, environmental/energy and media sectors. The Company's innovative software solutions enable organizations to optimize performance and maximize revenues. The Company's clients include state and local governments, federal agencies and numerous private sector customers. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, RBSM LLP, in New York, N.Y., expressed substantial doubt about Santeon's ability to continue as a going concern. The independent auditors noted that the Company has suffered losses from operations and is experiencing difficulty in generating sufficient cash flows to meet its obligations and sustain its operations. SEALY CORP: Paul Glazer Discloses 6.1% Equity Stake --------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Paul J. Glazer and Glazer Capital, LLC, disclosed that, as of Sept. 27, 2012, they beneficially own 6,736,532 shares of common stock of Sealy Corporation representing 6.1% of the shares outstanding. A copy of the filing is available at: http://is.gd/PFJeln About Sealy Corp. Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) -- http://www.sealy.com/-- is the largest bedding manufacturer in the world with sales of $1.5 billion in fiscal 2008. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), including SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns & Foster(R), and Bassett(R) brands. Sealy operates 25 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy sells its products to approximately 3,000 customers with more than 7,000 retail outlets. The Company reported a net loss of $9.88 million for the 12 months ended Nov. 27, 2011, and a net loss of $13.74 million during the prior year. The Company reported a net loss of $15.20 million for the three months ended Nov. 27, 2011. The Company's balance sheet at May 27, 2012, showed $923.55 million in total assets, $988.20 million in total liabilities and a $64.64 million total stockholders' deficit. * * * Sealy carries 'B' local and issuer credit ratings, with stable outlook, from Standard & Poor's. SILOAM SPRINGS: Files for Chapter 9 in Arkansas ----------------------------------------------- Siloam Springs Municipal Property Owners' Improvement District No. 1- Gabriel Park, owner of a lot in Gabriel Park Subdivision, in Benton County, Arkansas, filed a Chapter 9 bankruptcy petition (Bankr. W.D. Ark. Case No. 12-73750) on Oct. 4, 2012. In its schedules filed before the U.S. Bankruptcy Court in Fayetteville, Arkansas, the Debtor disclosed just $152,437 in assets and $345,000 in liabilities. The District sold bonds in June 1996 to finance infrastructure improvements for the real property in the District which was platted into lots as Gabriel Park Subdivision. The principal amount of the outstanding bonds is $345,000. The Bank of Fayetteville, trustee for the beneficial owners of the bonds, holds $153,000 in District funds. The District will receive only $2,187 in annual revenues through the year 2013 from the two lots in the District which are still obligated to pay the District's annual tax. The board has determined that the District should file a petition for Chapter 9 under the U.S. Bankruptcy Code and seek Court confirmation of a municipal debt adjustment plan authorizing the trustee to make an equitable distribution of all District funds, less expenses of the Chapter 9 case, to the beneficial owners of the Bonds. SILOAM SPRINGS: Chapter 9 Case Summary & Creditor List ------------------------------------------------------ Debtor: Siloam Springs Municipal Property Owners' Improvement District No. 1- Gabriel Park 217 East Dickson, Suite 102 Fayetteville, AR 72701 Bankruptcy Case No.: 12-73750 Chapter 9 Petition Date: October 4, 2012 Court: Western District of Arkansas (Fayetteville) Debtor's Counsel: John T. Lee, Esq. P.O. Box 1348 Siloam Springs, AR 72761-1348 Tel: (479) 524-2337 Fax: (479) 524-3693 E-mail: jtlee.atty@cox-internet.com Scheduled Assets: $152,437 Scheduled Liabilities: $345,000 A copy of the Debtor's list of its 10 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/arwb12-73750.pdf The petition was signed by John Kapp, chairman of the Board of Commissioners. SIONIX CORP: Signs $1 Million Securities Purchase Agreement ----------------------------------------------------------- Sionix Corporation entered into a securities purchase agreement dated Sept. 25, 2012, with several accredited investors for the purchase and sale of $1,025,000 of its convertible notes and warrants. Convertible Capital, a division of Trump Securities, LLC, acted as placement agent for the financing. The Notes bear interest at the rate of 10% per annum beginning as of Sept. 25, 2012, and mature on June 25, 2013. On the closing date, the Company paid and the Holders received nine months of pre-paid interest on the original principal amount of the Notes. The Notes are convertible at any time at the option of the Holders into the Company's common stock at a conversion price based on 80% of the average of the three lowest closing prices for the common stock during the ten consecutive trading days immediately preceding the conversion request, however the conversion price may not exceed $0.04, and may not be lower than $0.02 per share. The Notes may be redeemed by the Company at any time prior to maturity with 10 days' prior notice to the Holders, and payment of a premium of 25% on the unpaid principal amount of the Notes. In addition the Notes and related securities purchase agreement contain representations, warranties and covenants that are customary for financings of this type. The Company also agreed to issue warrants to the Holders for the purchase of up to 23,125,000 shares of Company common stock, pro rata in proportion to the amount invested, which can be exercised for a period of five years from the closing date, with a fixed exercise price of $0.08 per share. The Company has agreed to register the common stock into which the Notes may be converted, any shares of common stock that may be issued as payment of principal or interest, and the common stock underlying the Warrants, as well as any shares of common stock that may be issued as a result of any stock split, dividend or other distribution. The Company has agreed to file an initial registration statement within 30 days of the date of the registration rights agreement. If the Company fails to file a registration statement within this 30 day period, or to have it declared effective within 90 days after the date of the registration rights agreement, or to maintain its effectiveness, the Company will be obligated to pay the investors liquidated damages equal to 2% of the principal amount of the Notes per month until the event is cured, for up to one year, and 1% per month thereafter if the event continues uncured. At the closing of the sale and issuance of the Notes, the Company paid a cash placement fee to Convertible Capital amounting to 8.54% of the gross proceeds of the offering. The Company agreed not to use the proceeds of the financing for redemption of common stock, settlement of litigation, or investments in certain other securities, and the proceeds will generally be applied toward working capital and operating expenses of the Company. About Sionix Corp. Los Angeles, Calif.-based Sionix Corporation designs, develops, markets and sells cost-effective water management and treatment solutions intended for use in the oil and gas, agriculture, disaster relief, and municipal (both potable and wastewater) markets. The Company's balance sheet at March 31, 2012, showed $2.77 million in total assets, $3.60 million in total current liabilities, and a stockholders' deficit of $830,380. As reported in the TCR on Dec. 27, 2011, Kabani & Company, Inc., in Los Angeles, Calif., expressed substantial doubt about Sionix Corporation's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2011. The independent auditors noted that the Company has incurred cumulative losses of $31.9 million. "In addition, the company has had negative cash flow from operations for the period ended Sept. 30, 2011, of $2,187,812." SOLYNDRA LLC: UNITE HERE Denounces Reorganization Plan ------------------------------------------------------ Officials of UNITE HERE, a hospitality workers union with 250,000 members, have taken the unusual step of publicly denouncing a proposed bankruptcy reorganization plan. They are in part reacting to conservative politicians denouncing the millions in federal subsidies and loan guarantees given to Solyndra, the Fremont, CA-based solar cell company which filed for bankruptcy in September 2011. Mitt Romney referred to it in this past Wednesday's presidential debate, and also held a campaign event in front of Solyndra's shuttered factory gates. "What has usually been missing from this past year's commentary is that much of Solyndra's funding came from private sources. Prominent among them is Madrone Capital, a private equity firm which acts as an investment arm of the Walton family fortune. The Waltons are active supporters of Republicans," noted UNITE HERE Secretary-Treasurer Sherri Chiesa. She also noted the connection to Hyatt Hotels. "Madrone's co-managing partner Greg Penner is a director of Hyatt Hotels, controlled by the prominent Pritzker family," Chiesa explained. Solyndra's creditors are now voting on the company's proposed bankruptcy plan (October 10th is the voting deadline). The plan, if passed, will heavily benefit Madrone and other major investors at the expense of Solyndra's smaller creditors and the federal government, which will likely recoup only 3 cents and less than 19 cents on the dollar, respectively. UNITE HERE General Counsel Richard McCracken noted, "In principle, bankruptcy plans are supposed to protect creditors over shareholders because shareholders get all the upside if a company does well - that is part of the inherent risk in making an equity investment." But Solyndra's plan would give these investors all of this Company's tax credits. These tax credits are likely worth $318 million to $352 million, according to the bankruptcy disclosure statement. For these credits, investors Madrone and Argonaut would pay at most $10.2 million (most of which is accompanied by assigning them various claims). Madrone's co-managing partner Greg Penner is a current Wal-Mart director, a former Wal-Mart executive and the current husband of Carrie Walton (daughter of Wal-mart's Rob Walton). According to Enphase Energy, "Madrone invests on behalf of members of the Walton Family" (Madrone general partner Jamie McJunkin sits on the Enphase board). Mr. Penner also sits on the boards of Hyatt Hotels Corporation, Baidu (the Chinese search engine company similar to Google) and 99Bill Corporation (the Chinese online payment platform company similar to PayPal). "With that kind of profile, there can be little doubt that Madrone and Penner can afford to give Solyndra's creditors and the American taxpayer a better share of Solyndra's unused hundreds of millions in tax benefits," Chiesa noted. On Oct. 17, the proposed plan will go before a judge in a Wilmington, DE federal bankruptcy court hearing. It is unclear as of now whether Solyndra's creditors or the federal courts will ultimately uphold the proposed bankruptcy plan. "In the interest of taxpayers like our Union's members and Solyndra's creditors alike, this deal does not deserve to see the light of day," Chiesa concluded. About Solyndra LLC Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. The Official Committee of Unsecured Creditors of Solyndra LLC has tapped Blank Rome LLP as counsel and BDO Consulting as financial advisors. In October 2011, the Debtors hired Berkeley Research Group, LLC, and designated R. Todd Neilson as Chief Restructuring Officer. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. When they filed for Chapter 11, the Debtors pursued a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors were unable to identify any potential buyers, an orderly liquidation of the assets for the benefit of their creditors. Solyndra did not receive acceptable offers to buy the business as a going concern. Two auctions late last year brought in a total of $8 million. A three-day auction in February generated another $3.8 million. An auction in June generated $1.79 million from the sale of 7,200 lots of equipment. Solyndra filed a liquidating plan at the end of July and scheduled a hearing on Sept. 7 for approval of the explanatory disclosure statement. The Plan is designed to pay 2.5% to 6% to unsecured creditors with claims totaling as much as $120 million. Unsecured creditors with $27 million in claims against the holding company are projected to have a 3% dividend. SOUTHERN AIR: Plan to Relocate to CVG On Hold --------------------------------------------- Jason Williams at The Community Press & Recorder reports that Southern Air's future plans at Cincinnati/Northern Kentucky International Airport are uncertain after the air cargo carrier filed for bankruptcy. The report relates Southern Air in July was close to reaching a deal to relocate its operations team to CVG. "We understand Southern Air remains interested in relocating part of its operations to CVG," the report quotes airport spokeswoman Meghan Glynn as saying. "However, that is all on hold until the issues are resolved through the bankruptcy court." According to the report, Southern Air has tentatively planned an $8.5 million investment at CVG, a move that would create about 120 full-time jobs. In May, the state of Kentucky preliminarily approved a $2.7 million tax incentive in an effort to lure Southern Air. The incentive is contingent on the company moving here, and fulfilling its job creation and investment obligations, a spokesman for the Kentucky Cabinet for Economic Development said. The report notes the Kenton County Airport Board in July approved a five-year agreement for Southern Air to lease office space at CVG. The agreement is contingent on completion of the incentive agreement between Southern Air and the state. About Southern Air Military cargo airline Southern Air Inc. -- http://www.southernair.com/-- its parent Southern Air Holdings Inc., and their affiliated entities filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12690 to 12-12707) in Wilmington on Sept. 28, 2012, blaming the decline in business from the U.S. Department of Defense, which reduced its troop count in Afghanistan and hired Southern Air less frequently. Bankruptcy Judge Christopher S. Sontchi presides over the case. Brian S. Rosen, Esq., Candace Arthur, Esq., and Gabriel Morgan, Esq., at Weil, Gotshal & Manges LLP; and M. Blake Cleary, Esq., and Maris J. Kandestin, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtor's counsel. Zolfo Cooper LLC serves as the Debtors' bankruptcy consultant and special financial advisor. Kurtzman Carson Consultants, LLC, serves as claims and notice agent. In its petition, the Debtors estimated $100 million to $500 million in both assets and debts. The petition was signed by Jon E. Olin, senior vice president. Canadian Imperial Bank of Commerce, New York Agency, the DIP agent and prepetition agent, is represented by Matthew S. Barr, Esq., and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP; and Mark D. Collins, Esq., and Katherine L. Good, Esq., at Richards Layton & Finger PA. Stephen J. Shimshak, Esq., and Kelley A. Cornish, Esq., at Paul Weiss Rifkind Wharton & Garrison LLP; and Mark E. Felger, Esq., at Cozen O'Connor, represent Oak Hill Capital Partners II, LP, OH Aircraft Acquisition LLC, and Oak Hill Cargo 360 LLC. SOUTHERN AIR: Keeps Two B747-400s for Now ----------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that cargo airline Southern Air Holdings Inc. avoided having two of its 11 aircraft taken back last week by the owners. According to the report, acquired in 2007 by Oak Hill Capital Partners LP, Southern Air filed a Chapter 11 petition on Sept. 28 in Delaware, having already worked out a plan giving 82.5% of the stock to secured lenders in return for debt. Oak Hill would retain the other 17.5%. The day of bankruptcy, Wells Fargo Bank NA, as trustee for the owners of two Boeing 747-400 aircraft, filed papers asking the bankruptcy judge for the immediate surrender of the two aircraft. The owners contend that the leases for the aircraft were both terminated before bankruptcy, giving Southern Air no right to retain and use the planes. Southern Air responded that the owners had agreed not to take action when they were told a bankruptcy filing was imminent. Instead, Wells Fargo sent the termination notices. The airline argued that an owner who agrees not to act cannot enforce the action taken in violation of the promise. U.S. Bankruptcy Judge Christopher S. Sontchi held a hearing last week and decided that the owners weren't entitled to a temporary restraining order requiring immediate surrender of the aircraft. The report notes that Judge Sontchi scheduled an Oct. 25 hearing on a motion for a preliminary injunction where the owners again may seek surrender of the aircraft. Southern Air said that the two aircraft are used only for government business. Since government and military business produces 45% of the company's revenue, Southern Air said that the loss of government business "would prove disastrous" to the company. Southern leases 11 wide- body aircraft. A profitable contract with DHL Worldwide Express produces about 64% of non-government revenue, a court filing said. According to Bloomberg, the company reported assets of $206.9 million and liabilities totaling $486.5 million. Revenue for the year ended in July was $428.2 million, resulting in a net loss of $159.8 million. Southern blamed bankruptcy on the drawdown in military personnel abroad and shrinking defense budgets. There is $288 million in secured debt and $31.1 million owing to trade suppliers, according to court papers. Canadian Imperial Bank of Commerce is the agent for secured lenders on a revolving credit and $250 million term loan. The Bloomberg report discloses that last week, the bankruptcy court gave interim approval for Southern Air to borrow $12.5 million of fresh cash on an interim basis while converting $37.5 million of pre-bankruptcy debt into a post-bankruptcy loan. The financing is being provided by CIBC as agent and a lender. At a final financing hearing on Oct. 25, the new-money portion of the loan is scheduled for increase to $25 million. About Southern Air Based in Norwalk, Connecticut, military cargo airline Southern Air Inc. -- http://www.southernair.com/-- its parent Southern Air Holdings Inc., and their affiliated entities filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12690 to 12-12707) in Wilmington on Sept. 28, 2012, blaming the decline in business from the U.S. Department of Defense, which reduced its troop count in Afghanistan and hired Southern Air less frequently. Bankruptcy Judge Christopher S. Sontchi presides over the case. Brian S. Rosen, Esq., Candace Arthur, Esq., and Gabriel Morgan, Esq., at Weil, Gotshal & Manges LLP; and M. Blake Cleary, Esq., and Maris J. Kandestin, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtor's counsel. Zolfo Cooper LLC serves as the Debtors' bankruptcy consultant and special financial advisor. Kurtzman Carson Consultants, LLC, serves as claims and notice agent. In its petition, the Debtors estimated $100 million to $500 million in both assets and debts. The petition was signed by Jon E. Olin, senior vice president. Canadian Imperial Bank of Commerce, New York Agency, the DIP agent and prepetition agent, is represented by Matthew S. Barr, Esq., and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP; and Mark D. Collins, Esq., and Katherine L. Good, Esq., at Richards Layton & Finger PA. Stephen J. Shimshak, Esq., and Kelley A. Cornish, Esq., at Paul Weiss Rifkind Wharton & Garrison LLP; and Mark E. Felger, Esq., at Cozen O'Connor, represent Oak Hill Capital Partners II, LP, OH Aircraft Acquisition LLC, and Oak Hill Cargo 360 LLC. TECHNEST HOLDINGS: To Borrow $100,000 from Khal Aljerian -------------------------------------------------------- AccelPath, Inc., formerly known as Technest Holdings Inc., entered into a loan agreement and a promissory note to borrow $100,000 from Mr. Khal Aljerian, which will be repaid with six monthly payments of $23,000 beginning May 1, 2014, with the last payment being made on Oct. 1, 2014, for a total repayment amount of $138,000. On Oct. 2, 2012, AccelPath entered into an amendment to the loan agreement and promissory note dated Feb. 10, 2012, with Mr. Albert Friesen pursuant to which the Company extended the maturity date of the promissory note from Aug. 10, 2012, to Nov. 10, 2012, in exchange for a payment to Mr. Friesen of $2,000 and the issuance of a warrant to purchase 250,000 shares of Common Stock at an exercise price of $0.01 per share. The issuance and sale of the securities to Messrs. Aljerian and Friesen was not registered under the Securities Act of 1933, and was made in reliance upon the exemptions from the registration requirements of the Securities Act set forth in Section 4(2) thereof. About Technest Holdings Bethesda, Md.-based Technest Holdings, Inc., has two primary businesses: AccelPath, which is in the business of enabling pathology diagnostics and Technest, which is in the business of the design, research and development, integration, sales and support of three-dimensional imaging devices and systems. Following the fiscal 2011 results, Wolf & Company, P.C., in Boston, Massachusetts, expressed substantial doubt about Technest Holdings' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations, has negative cash flows from operations, a stockholders' deficit and a working capital deficit. The Company reported a net loss of $2.9 million on $450,000 of revenues for the fiscal year ended June 30, 2011, compared with a net loss of $325,000 on $0 revenue for the fiscal year ended June 30, 2010. The Company's balance sheet at March 31, 2012, showed $5.29 million in total assets, $6.55 million in total liabilities and a $1.25 million total stockholders' deficit. TOM MARTINO: Asks Court to Convert Liquidating Case to Chapter 11 ----------------------------------------------------------------- Heather Draper at Denver Business Journal reports that troubleshooter Tom Martino has filed a motion in the U.S. Bankruptcy Court for the District of Colorado, seeking to convert his Chapter 7 bankruptcy to Chapter 11. "The debtor now believes that conversion of the within case from Chapter 7 to Chapter 11 would be in the best interests of the debtor and the estate, especially the debtor's creditors," the court documents say, according to the report. According to the report, Mr. Martino filed a motion in July to delay the "discharge order" in his Chapter 7 bankruptcy to Oct. 5 so that he could possibly pursue Chapter 11. The discharge order in a Chapter 7 bankruptcy releases the debtor from personal liability from certain specified types of debt. Because the Chapter 7 trustee didn't file anything to protest a delay, the court gave Mr. Martino until October 5 to file to convert the case to a Chapter 11, said bankruptcy attorney Arthur Lindquist-Kleissler, founder of Denver-based Lindquist-Kleissler & Co LLC, who is serving as co-counsel on the case with attorney Stephen Berken, according to the report. The report relates Mr. Martino has claimed that Chapter 7 trustee Simon Rodriguez isn't trying to settle his case. The report says Mr. Martino sued Mr. Rodriguez and three of his creditors in December 2011, claiming that Mr. Rodriguez was dragging out the case and that the creditors' claims of fraud against him were "unsupported and spurious." according to court filings. In a ruling April 26, a judge dismissed Mr. Martino's case against Mr. Rodriguez. Tom Martino filed for Chapter 7 bankruptcy on Sept. 2, 2011, listing assets of $1.37 million and liabilities of $78.6 million. Mr. Martino later amended the bankruptcy filing on Oct. 1, 2011, listing total assets of $2.3 million and liabilities of $46.4 million. According to Denver Business Journal, Mr. Martino has appeared on radio and TV talking about consumer issues for many years and operates the Troubleshooter.com Web site. TRAFFIC CONTROL: Court Approves DSI Hiring, Berman as CRO --------------------------------------------------------- Traffic Control and Safety Corporation sought and obtained approval from the U.S. Bankruptcy Court to employ Development Specialists, Inc., to provide Geoffrey L. Berman as chief restructuring officer and independent director, nunc pro tunc to Aug. 10, 2012. Mr. Berman will be a member of the board, as sole member of the restructuring committee, and director of TCSC's Debtor subsidiaries. The firm, among other things, will provide these services: a. act as the remaining corporate officer and an independent director, including serving as the Debtors' CRO, through the services of, Geoffrey L. Berman, and elected by the Debtors' directors or shareholders, in each case to oversee the liquidation of any remaining assets of the Debtors; b. oversee the completion of the Debtors' Chapter 11 cases, including the possible filing of the Joint Plan (or some other similar plan as may be decided at the appropriate time), to take whatever steps are deemed necessary to work towards the confirmation of such plan and thereafter, in whatever role or capacity may be appropriate, or the conversion to cases under chapter 7 of the Bankruptcy Code, if appropriate; and c. assist in the review and adjudication of creditor claims as filed with the Court. DSI will receive a monthly rate of $10,000 per month. The monthly rate for August 2012 is pro-rated at $5,000 per month, due upon initiation of the Engagement Agreement. About Traffic Control Traffic Control and Safety Corporation and six subsidiaries filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-11287) on April 20, 2012. TCSC is the largest independent provider of safety services and products in California and Hawaii. Formed by Marwit Capital Partners II, L.P., in June 2007, TCSC has 430 full- time employees and serves state and local agencies, public works organizations, general contractors, the motion picture industry, and provide services at special events. TCSC estimated assets of up to $50 million and debts of up to $100 million as of the Chapter 11 filing. Toomey Industries, Inc. disclosed $10,322,077 in assets and $67,844,144 in liabilities as of the Chapter 11 filing. Judge Kevin J. Carey presides over the case. Latham & Watkins LLP serves as the Debtors' bankruptcy counsel and Young Conaway Stargatt & Taylor LLP as Delaware counsel. Broadway Advisors, LLC serves as financial advisors, and Epiq Bankruptcy Solutions LLC as the claims and notice agent. The Debtors have won authority to (i) use cash collateral in which the First Lien Lender has an interest, and (ii) obtain postpetition financing from Fifth Street Finance Corp. and other entities in the maximum amount of $12,775,000. The Debtors have canceled an auction with only their biggest lender bidding for the assets. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed five unsecured creditors to the Official Committee of Unsecured Creditors. The Committee tapped Potter Anderson & Corroon LLP as its counsel and GlassRatner Advisory & Capital Group LLP as its financial advisor. UNIGENE LABORATORIES: Richard Levy Discloses 65.3% Equity Stake --------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Richard Levy and his affiliates disclosed that, as of Sept. 21, 2012, they beneficially own 162,391,326 shares of common stock of Unigene Laboratories, Inc., representing 65.3% of the shares outstanding. Mr. Levy previously reported beneficial ownership of 75,126,704 common shares or a 46.6% equity stake as of July 16, 2012. A copy of the amended filing is available for free at http://is.gd/Y2KarN About Unigene Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/ -- is a biopharmaceutical company focusing on the oral and nasal delivery of large-market peptide drugs. Unigene reported a net loss of $17.92 million in 2011, a net loss of $27.86 million in 2010, and a net loss of $13.38 million in 2009. The Company's balance sheet at June 30, 2012, showed $11.69 million in total assets, $77.56 million in total liabilities and a $65.87 million total stockholders' deficit. Grant Thornton LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 financial results. The independent auditors noted that the Company has incurred a net loss of $17,900,000 during the year ended Dec. 31, 2011, and, as of that date, has an accumulated deficit of approximately $189,000,000 and the Company's total liabilities exceeded total assets by $55,138,000. Bankruptcy Warning Under the Company's amended and restated March 2010 financing agreement with Victory Park Management, LLC, so long as the Company's outstanding note balance is at least $5,000,000, the Company must maintain a minimum cash balance equal to at least $2,500,000 and its cash flow must be at least $2,000,000 in any fiscal quarter or $7,000,000 in any three consecutive quarters. "Without additional financing, we will not be able to maintain a minimum cash balance of $2,500,000, or maintain an adequate cash flow, in order to avoid default in periods subsequent to September 30, 2012," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, we will be in default under the financing agreement, which would result in the full amount of our debt owed to Victory Park becoming immediately due and payable. Even if we are able to raise cash and maintain a minimum cash balance of at least $2,500,000 through the March 2013 maturity date, there is no assurance that the notes will be converted into common stock, in which case, we may not have sufficient cash from operations or from new financings to repay the Victory Park debt when it comes due. There can be no assurance that new financings will be available on acceptable terms, if at all. In the event that we default, Victory Park could retain control of the Company and will have the ability to force us into involuntary bankruptcy and liquidate our assets." UNITED RETAIL: Plan of Liquidation Became Effective --------------------------------------------------- BankruptcyData.com reports that United Retail Group's Joint Plan of Liquidation became effective. The Debtor obtained confirmation of the Plan is September. As reported in the June 25, 2012 edition of the TCR, the Debtors have a plan that provides for the distribution to creditors from the consideration provided by Redcats USA, Inc., pursuant to an asset purchase agreement. Holders of allowed secured claims will be paid in full in cash or receive the collateral securing the claim. Holders of general unsecured creditors totaling $25 million to $30 million will recover 9.2% to 11% of their claims which payments will be funded from the $2.75 million in unsecured claims funds plus any additional cash. Equity holders won't receive anything and are deemed to reject the Plan. On April 13, 2012, the Debtors closed the sale of substantially all of their assets to Avenue Stores, LLC an affiliate of Versa Capital Management, LLC. Pursuant to the APA, the Buyer is the primary source of the Cash consideration for distributions under the Plan. The Buyer has agreed to pay in Cash: -- up to $27 million in the aggregate for (1) amounts outstanding under the DIP Facility as of the Closing and (2) Administrative Claims (not including 503(b)(9) Claims, which are accounted for separately under the APA) and Priority Claims as of the Closing that ultimately are Allowed; -- up to $4.7 million for Allowed 503(b)(9) Claims; -- $1.5 million for the benefit of holders of Allowed General Unsecured Claims on account of the Claims; and -- up to $2 million for costs associated with winding down the Debtors' estates. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/UNITED_RETAIL_ds.pdf About United Retail United Retail Group Inc., owner of the Avenue brand of women's fashion apparel and a subsidiary of Redcats USA, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1, 2012, as it seeks to sell the business to Versa Capital Management for $83.5 million, subject to higher and better offers. The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners LLP serves as restructuring advisor and Peter J. Solomon Company serves as financial advisor and investment banker; and Donlin Recano & Company Inc. is the notice, claims and administrative agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP. Avenue has 433 stores and an e-commerce site -- http://www.avenue.com/. Avenue employs roughly 4,422 employees, roughly 294 of which are located at Avenue's corporate headquarters in Rochelle Park, New Jersey or at the Troy Distribution Facility. The Company disclosed $117.2 million in assets and $67.3 million in liabilities as of the Chapter 11 filing. Cooley LLP serves as counsel for the Official Committee of Unsecured Creditors. As reported in the Troubled Company Reporter on Sept. 21, 2012, Bankruptcy Law360 said U.S. Bankruptcy Judge Stuart M. Bernstein on Tuesday confirmed a Chapter 11 plan for Redcats USA Inc.'s high-end women's clothing retailer United Retail Group Inc. following a Versa Capital Management LLC unit's April purchase of its assets in a Section 363 sale. According to Bankruptcy Law360, Judge Bernstein confirmed the plan, which calls for the liquidation of what's left of the debtor after the sale to Versa affiliate Ornatus URG Acquisition LLC, a sale that created a new company called Avenue Stores LLC. UPPER CRUST: Pizza Chain Files to Reorganize in Boston ------------------------------------------------------ Upper Crust Pizza LLC, the operator of upscale pizza restaurants in Massachusetts, filed a Chapter 11 petition (Bankr. D. Mass. Case No. 12-18134) on Oct. 9, 2012, in Boston on Oct. 4, 2012. John C. Elstad, Esq., at Murphy & King, P.C., in Boston, serves as counsel. The Debtor disclosed assets and liabilities of at least $1 million. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that financial problems were caused in part by a U.S. Labor Department order requiring the closely held company to pay $342,000 in overtime wages to workers. There is also litigation among the owners amid charges of using business income for personal expenses. The Bloomberg report discloses that the principal secured lender is TD Bank, owed $1.36 million. VISUALANT INC: PMB Succeeds Madsen & Associates as Accountant ------------------------------------------------------------- Visualant, Inc., dismissed Madsen & Associates CPA's, Inc., as the Company's independent registered public accounting firm on Sept. 29, 2012. The decision to change accountants was approved by the Company's Audit Committee. The Madsen reports on the Company's consolidated financial statements for the past two fiscal years did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that the audit report of Madsen on the Company's financial statements for fiscal years 2010 and 2011 contained an explanatory paragraph which noted that there was substantial doubt about the Company's ability to continue as a going concern. On Sept. 29, 2012, the Company, upon the Audit Committee's approval, engaged the services of PMB Helin Donovan LLP as the Company's new independent registered public accounting firm to audit the Company's consolidated financial statements as of Sept. 30, 2012, and for the year then ended. PMB will be performing reviews of the unaudited consolidated quarterly financial statements to be included in the Company's quarterly reports on Form 10-Q going forward. During each of the Company's two most recent fiscal years and through Oct. 4, 2012, (a) the Company has not engaged PMB as either the principal accountant to audit the Company's financial statements, or as an independent accountant to audit a significant subsidiary of the Company and on whom the principal accountant is expected to express reliance in its report; and (b) the Company or someone on its behalf did not consult PMB with respect to (i) either: the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's financial statements, or (ii) any other matter that was either the subject of a disagreement or a reportable event as set forth in Items 304(a)(1)(iv) and (v) of Regulation S-K. About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on Oct. 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant reported a net loss of $2.39 million for the year ended Sept. 30, 2011, compared with a net loss of $1.14 million during the previous year. The Company's balance sheet at June 30, 2012, showed $6.84 million in total assets, $7.03 million in total liabilities, $28,350 in noncontrolling interest, and a $220,669 total stockholders' deficit. The Company anticipates that it will record losses from operations for the foreseeable future. As of June 30, 2012, the Company's accumulated deficit was $13.1 million. The Company has limited capital resources, and operations to date have been funded with the proceeds from private equity and debt financings. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The audit report prepared by the Company's independent registered public accounting firm relating to the Company's financial statements for the year ended Sept. 30, 2011, includes an explanatory paragraph expressing the substantial doubt about the Company's ability to continue as a going concern. The audit report prepared by the Company's independent registered public accounting firm relating to its financial statements for the year ended Sept. 30, 2011, includes an explanatory paragraph expressing the substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Securities Purchase Agreement dated June 17, 2011, with Ascendiant Capital Partners, LLC, will terminate if the Company's common stock is not listed on one of several specified trading markets (which include the OTCBB and Pink Sheets, among others), if the Company files protection from its creditors, or if a Registration Statement on Form S-1 or S-3 is not effective. If the price or the trading volume of the Company's common stock does not reach certain levels, the Company will be unable to draw down all or substantially all of its $3,000,000 equity line of credit with Ascendiant. The maximum draw down amount every 8 trading days under the Company's equity line of credit facility is the lesser of $100,000 or 20% of the total trading volume of the Company's common stock for the 10-trading-day period prior to the draw down multiplied by the volume-weighted average price of the Company's common stock for that period. If the Company stock price and trading volume decline from current levels, the Company will not be able to draw down all $3,000,000 available under the equity line of credit. "If we are not able to draw down all $3,000,000 available under the equity line of credit or if the Securities Purchase Agreement is terminated, we may need to restructure our operations, divest all or a portion of our business, or file for bankruptcy," the Company said in its quarterly report for the period ended June 30, 2012. W.R. GRACE: Wayne Storage Site Removed From Superfund List ---------------------------------------------------------- U.S. Environmental Protection Agency Regional Administrator Judith A. Enck was joined on Sept. 25, 2012, by Senator Frank R. Lautenberg, Congress Member Bill Pascrell, Jr. and U.S. Army Corps of Engineers, New York District Commander Col. Paul E. Owen to announce that the W.R. Grace & Co./Wayne Interim Storage site in Wayne Township, New Jersey, has been cleaned up and will be taken off the Superfund list of the most hazardous waste sites in the nation. The site was contaminated by thorium and rare earth metals, which can have serious effects of people's health. Studies have shown that inhaling thorium dust causes an increased risk of developing lung cancer, and cancer of the pancreas. The EPA has made a final decision to remove the site from the Superfund list after a review of conditions confirmed that it no longer poses a threat to people's health and the environment. Some of the cleanup was conducted by the U.S. Army Corps of Engineers with oversight by the EPA. "The removal of a site from the Superfund list is a significant achievement," said EPA Regional Administrator Judith A. Enck. "Monitoring has found that the cleanup conducted at this site has removed a significant risk that was posed to this community." "The Corps of Engineers is proud to have been the lead agent for the cleanup here at the Wayne Interim Storage Site since 1997 and it's been a pleasure working as a team of teams with our great partners here like the EPA and our other federal, state and local partners," said U.S. Army Corps of Engineers, New York District Commander Col. Paul E. Owen. "It took several years of hard work, including the safe removal and disposal of approximately 135,000 cubic yards of contaminated material, and I'm proud to be celebrating the fruits of that labor -- the de-listing of this site." The six-acre site, located at 868 Black Oak Ridge Road in Wayne, NJ, was used by Rare Earths, Inc., between 1948 and 1957 to extract thorium and rare earth metals from monazite ore. In 1957, a division of W.R. Grace & Co. Inc. acquired the facility and continued to process monazite ore at the site until 1971. Radioactive waste and contaminated building rubble were stored in approximately 16 burial pits on the site. The U.S. Department of Energy managed the site from 1984 to 1997, when it was transferred to the U.S. Army Corps of Engineers. The Corps cleaned, dug up, and properly disposed of contaminated soil from the site and from a number of properties in the immediate area. The Corps also decontaminated and demolished a processing building on the site and removed and treated contaminated ground water near the areas that were excavated. It also instituted a program to monitor the site to ensure that the work was successful. The work was completed in 2003 and the site was transferred to Wayne Township in 2006. Once a cleanup is complete, the EPA conducts reviews every five years to evaluate if the completed work is protective of human health and the environment. Based on the EPA's five-year review, completed in 2008, and a final report, the EPA, the Corps and the state of New Jersey determined that the cleanup was successful and no further actions or reviews are needed. 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: May Face Lawsuit Over Unpaid Water Bills ---------------------------------------------------- The clerk of court of the Circuit Court in Baltimore plans to pursue a class action lawsuit to force the city to collect delinquent water bills from businesses and other large customers in the area, Matthew Hay Brown, writing for The Baltimore Sun, reported. According to the Baltimore Sun, more than $10 million are owed by corporations, non-profits and government offices in water bills. The figure includes almost $500,000 owed by W.R. Grace & Co., nearly $7 million by RG Steel in Sparrows Point, and more than $135,000 by the Maryland Zoo. Frank M. Conaway, the Clerk of Court, called the city's failure to collect the money, as it was moving to take the homes of private residents who owed far less, "unconscionable and inexcusable," the Baltimore Sun cited. "Hundreds of city homeowners have lost their homes because of $300 or $400 delinquent bills directly because of the aggressive actions by the city to collect revenues, yet the city without any excuses or plausible explanations allows certain corporations and nonprofits to squander millions of taxpayers' dollars in delinquent water bills," Mr. Conaway said in a statement. A spokesman for Mayor Stephanie Rawlings-Blake said the city's departments of finance and public works work "very hard to collect from delinquent accounts." "Obviously, the largest amount involved a very complex bankruptcy transaction," spokesman Ryan O'Doherty said, referring to RG Steel. "The law department's working very aggressively to make sure that we're doing everything we can to retrieve what is owed." Mr. Conaway released a letter asking Finance Director Harry E. Black for the names and addresses of homeowners who are more than 90 days delinquent on their water bills "who have been adversely affected as opposed to those that have been allowed to delay payments." "If the Mayor and City Solicitor cannot do their jobs collecting delinquent revenues, and funding recreation centers, fire stations and essential services, then the citizens of Baltimore and the courts simply will have to do their jobs for them," the letter said. Mr. O'Doherty said the mayor's office would "take a close look" at Mr. Conaway's letter and respond to him directly. 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: To Release Third-Quarter Results on Oct. 24 ------------------------------------------------------- W.R. Grace & Co. (NYSE: GRA) will release its third quarter 2012 financial results at 6:00 a.m. ET on Wednesday, October 24. A company-hosted conference call and webcast will follow at 11:00 a.m. ET that day. During the call, Fred Festa, Chairman and Chief Executive Officer, and Hudson La Force, Senior Vice President and Chief Financial Officer, will discuss the third quarter results. A question and answer session with analysts will follow the prepared remarks. Access to the live webcast and the accompanying slides will be available through the Investor Relations section of the company's web site, http://investor.grace.com/ Those without access to the Internet can participate by dialing +1 866.730.5766 (U.S.) or +1 857.350.1590 (International). The participant passcode is 84018437. Investors are advised to dial into the call at least 10 minutes early in order to register. An audio replay will be available at 1:00 p.m. ET on October 24. The replay will be accessible by dialing +1 888.286.8010 (U.S.) or +1 617.801.6888 (International) and entering the participant passcode 14454327. The replay will be available for one week. About Grace Grace is a leading global supplier of catalysts; engineered and packaging materials; and, specialty construction chemicals and building materials. The company's three industry-leading business segments--Grace Catalysts Technologies, Grace Materials Technologies and Grace Construction Products--provide innovative products, technologies and services that enhance the quality of life. Grace employs approximately 6,000 people in over 40 countries and had 2011 net sales of $3.2 billion. More information about Grace is available at www.grace.com. 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) YNOT LLC: Files for Bankruptcy to Restructure $1 Million Debt ------------------------------------------------------------- Chris Bagley, staff writer at Triangle Business Journal, reports that YNOT LLC, which owns an office building on West Main Street in Durham, North Carolina, has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Eastern District of North Carolina in an attempt to restructure more than $1 million in debts. According to the report, YNOT cited assets and liabilities each in the range of $1 million to $10 million. A debtor has to submit more detailed financial information within a few weeks of its initial filing. The report notes Susan Hutson is listed as company owner. The report adds Bill Janvier represents the Company as its attorney. ZACKY FARMS: Files for Chapter 11 to Reorganize ----------------------------------------------- Zacky Farms, LLC, has filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code. Zacky filed the petition in Sacramento, California (Bankr. E.D. Calif. Case No. 12-37961). Zacky emphasized that normal operations and customer service will continue without disruption, including sales, order processing and delivery. In connection with its Chapter 11 filing, Zacky also announced that it has secured a debtor-in-possession financing facility from The Lillian Zacky Family Trust. Zacky has also employed financial advisors to explore strategic alternatives to maximize value for its stakeholders. Zacky noted that the poultry industry is a capital intensive and volatile business which, over the past few years, has been under severe stress due to historically high corn and soybean meal prices. As a result, Zacky has incurred significant operating losses that have depleted its liquidity and working capital position. "After careful consideration we concluded that a Chapter 11 restructuring represents the best long-term solution for Zacky," said Keith Cooper, Chief Restructuring Officer. "We appreciate the ongoing loyalty and support of our employees, growers, customers and vendors," Mr. Cooper commented. "Their dedication and hard work is critical to our success. We remain committed to leading Zacky toward a strong and profitable future with the help of our employees, our growers, our customer base, and our vendor community. Zacky remains a viable business that is deeply committed to our employees and the customers that we serve." Zacky has not set a target date for emergence from Chapter 11, but Zacky stressed that the company's strategy is to move quickly. "There is much work ahead," he stated, "but time and time again, our employees have proven their ability to face significant challenges and handle change. By working together, we can preserve Zacky and its future." Zacky, headquartered in Fresno, California, is a vertically integrated poultry company that has been in operation for over 70 years. Zacky expresses its sincere gratitude to the multitude of employees, growers, vendors and customers that have contributed to its success and growth over these many years and thanks them for their loyal support. * Moody's Says Global Corporate Default Rate Up 3% in 3Q2012 ------------------------------------------------------------ The trailing 12-month global speculative-grade default rate finished the third quarter of 2012 at 3.0%, up slightly from 2.9% in the second quarter, Moody's Investors Service says in its monthly default report. A year ago, the default rate stood at 1.8%. In the US, the speculative-grade default rate ended the third quarter at 3.5%, up from 3.2% in the previous quarter. A year ago, the US default rate was 2.0%. In Europe, the default rate edged lower in the third quarter of 2012, to 2.6%, compared with 2.8% in second quarter and 1.4% this time last year. Based on its forecasting model, Moody's expects the global speculative-grade default rate to end this year at 3.0%, before declining to 2.9% by the end of the third quarter 2013. Both rates, if realized, will be well below the historical average of 4.8% since 1983. Moody's further expects the rate to be 3.5% by year's end in the US, while declining to 2.4% in Europe. "The corporate default rate has remained low and stable for some time now, despite some very weak economic fundamentals," notes Albert Metz, Managing Director of Moody's Credit Policy Research. "With ample liquidity available, we are not expecting that to change over the coming months." There were nine defaults among Moody's-rated corporate debt issuers in the third quarter of 2012, seven in North America and the remaining two in Europe and Latin America. So far this year there have been 46 defaults in total, compared with 17 in the first nine months of last year. By dollar volume, the global speculative-grade bond default rate held steady from quarter to quarter, to close the third at 2.0%, up from 1.2% at the same time last year. In the US, the dollar-weighted speculative-grade bond default rate ended the third quarter at 1.6%, also unchanged from the second quarter and compared with 1.2% a year ago. In Europe, the dollar- weighted speculative-grade bond default rate came in at 3.3% in the third quarter, down from 3.7% in the second, and up from 1.5% a year ago. In the coming year, Moody's expects default rates to be highest in the Media: Advertising, Printing & Publishing sector in the US and the Hotel, Gaming & Leisure sector in Europe. Moody's distressed index ended the third quarter at 17.0%, down from 19.5% in the previous quarter and 24.6% in the same period last year. The distressed index is a measure of the percentage of high-yield issuers whose debt is trading at distressed levels. In the leveraged loan market, two Moody's-rated companies defaulted on their loans in the third quarter of 2012, including Marsico Parent Company, LLC, which defaulted in September. There was just one default in the third quarter of last year. The trailing 12-month US leveraged loan default rate ended the third quarter at 2.6%, up from 2.4% in the second and 1.2% a year ago. * Debt of Dissolved Company Not Discharged for Owners ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that shareholders who dissolve a corporation to avoid paying a judgment against the business end up with a non- dischargeable debt in their personal bankruptcies, U.S. District Judge Edgardo Ramos in White Plains, New York, ruled in upholding an decision from last October by U.S. Bankruptcy Judge Cecelia G. Morris in Poughkeepsie, New York. According to the report, the corporation was hit with a $350,000 judgment. While the judgment was on appeal, the two shareholders dissolved the corporation and continued operating the business. Morris said that the shareholders "dissolved their corporation in secrecy to those creditors who they did not see fit to pay." The report relates that under New York corporate law, shareholders who dissolve a corporation without notice to creditors are said to hold the assets of the business "in trust for the benefit of creditors." In the decision upheld by Judge Ramos on Sept. 26, Morris held that the former owners who filed in Chapter 7 are personally liable for the judgment against the business. Judge Ramos also upheld the ruling that the debt was obtained by false pretenses and thus wasn't dischargeable in the individuals' bankruptcies under Section 523(a) (2) (A) of the Bankruptcy Code. The case on appeal in District Court is Hartley v. Esposito (In re Harley), 11-9692, U.S. District Court, Southern District of New York (White Plains). The case in bankruptcy court was Esposito v. Hartley (In re Hartley), 19-9055, U.S. Bankruptcy Court, Southern District of New York (Poughkeepsie). * Kramer Levin Has Most "Top 100" Attys. On NY Super Lawyers List ----------------------------------------------------------------- Kramer Levin Naftalis & Frankel LLP disclosed that 65 of the firm's attorneys were recognized in the 2012 edition of New York Super Lawyers. Seven of these lawyers, Barry H. Berke, Alan R. Friedman, Thomas Moers Mayer, Gary P. Naftalis, Jay A. Neveloff, Paul H. Schoeman and Harold P. Weinberger, appeared in the "Top 100," which recognizes the lawyers who received the highest point totals in the New York Super Lawyers balloting. Kramer Levin had more attorneys named to the "Top 100" than any other firm. Mr. Naftalis, who was also listed in the "Top 10," received the highest point total overall in New York and was ranked number one, an honor he has received for the second time. The selection process is based on a combination of peer recognition and professional achievement. Super Lawyers names only five percent of New York metro area lawyers to this honor. Additionally, seven Kramer Levin attorneys, Daniel R. Berman, Joshua Brody, Aaron M. Frankel, Matan A. Koch, Douglas Mannal, Seth R. Merl and Anupama Yerramallli, were selected for inclusion on the "New York Rising Stars 2012" list. The "Rising Star" honor, which is also based on peer recognition and professional achievement, is allotted to no more than 2.5 percent of New York metro area lawyers. The 58 Kramer Levin lawyers that received the "Super Lawyer" designation are: Peter A. Abruzzese - Intellectual Property Arthur H. Aufses, III - Securities Litigation Thomas D. Balliett - Business/Corporate Philip Bentley - Bankruptcy & Creditor/Debtor Rights Barry H. Berke - Criminal Defense: White Collar Jeffrey L. Braun - Business Litigation Jonathan H. Canter - Real Estate Jonathan S. Caplan - Intellectual Property Litigation Pamela M. Capps - Tax Amy D. Caton - Bankruptcy & Creditor/Debtor Rights Kenneth Chin - Banking Nicholas L. Coch - Intellectual Property Litigation Michael J. Dell - Business Litigation Abbe L. Dienstag - Securities & Corporate Finance Matthew S. Dunn - Immigration Kenneth H. Eckstein - Bankruptcy & Creditor/Debtor Rights Ronald M. Feiman - Securities & Corporate Finance David S. Frankel - Criminal Defense: White Collar Alan R. Friedman - Securities Litigation Carl Frischling -Securities & Corporate Finance James P. Godman - Real Estate Cheryl E. Hader - Estate Planning & Probate Barry Herzog - Tax Robert N. Holtzman - Employment & Labor Gregory A. Horowitz - Business Litigation Thomas T. Janover - Bankruptcy & Creditor/Debtor Rights Maria T. Jones - Tax Mark D. Koestler - Immigration Kenneth P. Kopelman - Corporate Governance & Compliance Michael P. Korotkin - Real Estate Kevin B. Leblang - Employment & Labor Randy Lipsitz - Intellectual Property Litigation Christine Lutgens - Employee Benefits/ERISA Thomas Moers Mayer - Bankruptcy & Creditor/Debtor Rights Thomas E. Molner - Mergers & Acquisitions Gary P. Naftalis - Business Litigation Jay A. Neveloff - Real Estate John C. Novogrod - Estate Planning & Probate Michael S. Oberman - Business Litigation Paul M. Ritter - Employee Benefits/ERISA Jennifer L. Rochon - Business Litigation Adam C. Rogoff - Bankruptcy & Creditor/Debtor Rights Howard J. Rothman - Tax Ted Ruthizer - Immigration Robert T. Schmidt - Bankruptcy & Creditor/Debtor Rights Paul H. Schoeman - Criminal Defense: White Collar Paul D. Selver - Land Use/Zoning Stephen R. Senie - Real Estate Michael T. Sillerman - Land Use/Zoning Norman C. Simon - Business Litigation Gary R. Tarnoff - Land Use/Zoning Eric A. Tirschwell - Criminal Defense: White Collar Jeffrey S. Trachtman - Bankruptcy & Creditor/Debtor Rights Neil R. Tucker - Real Estate Elise Wagner - Land Use/Zoning Jonathan M. Wagner - Intellectual Property Litigation Charles S. Warren - Environmental Harold P. Weinberger - Intellectual Property Litigation The seven Kramer Levin lawyers that received the "Rising Star" designation are: Daniel R. Berman - Real Estate Joshua Brody - Bankruptcy & Creditor/Debtor Rights Aaron M. Frankel - Intellectual Property Litigation Matan A. Koch - Business Litigation Douglas Mannal - Bankruptcy & Creditor/Debtor Rights Seth R. Merl - Business/Corporate Anupama Yerramalli - Bankruptcy & Creditor/Debtor Rights Kramer Levin Naftalis & Frankel LLP -- http://www.kramerlevin.com/ -- is a premier, full-service law firm with offices in New York, Silicon Valley and Paris. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 18, 2012 AMERICAN BANKRUPTCY INSTITUTE International Insolvency & Restructuring Symposium Parco dei Principi Grand Hotel & Spa, Rome, Italy Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 26, 2012 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program San Diego Marriott Marquis and Marina, San Diego, Calif. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 1-2, 2012 AMERICAN BANKRUPTCY INSTITUTE Corporate Restructuring Competition Wharton University of Pennsylvania, Philadelphia, Pa. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 7, 2012 AMERICAN BANKRUPTCY INSTITUTE U.S./Mexico Restructuring Symposium The Four Seasons, Mexico City, D.F. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 12, 2012 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Conference MGM Grand, Detroit, Mich. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 26, 2012 BEARD GROUP, INC. 19th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Nov. 29-30, 2012 MID-SOUTH COMMERCIAL LAW INSTITUTE 33rd Annual Bankruptcy & Commercial Law Seminar Nashville Marriott at Vanderbilt, Nashville, Tenn. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 29 - Dec. 1, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Dec. 4-8, 2012 AMERICAN BANKRUPTCY INSTITUTE ABI/SJUSL Mediation Training Symposium St. John's University, Queens, N.Y. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Jan. 24-25, 2013 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Four Seasons Hotel Denver, Denver, Colo. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Feb. 7-9, 2013 AMERICAN BANKRUPTCY INSTITUTE Caribbean Involvency Symposium Eden Roc Renaissance, Miami Beach, Fla. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Feb. 17-19, 2013 AMERICAN BANKRUPTCY INSTITUTE Advanced Consumer Bankruptcy Practice Institute Charles Evans Whittaker Courthouse, Kansas City, Mo. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Feb. 20-22, 2013 AMERICAN BANKRUPTCY INSTITUTE VALCON Four Seasons Las Vegas, Las Vegas, Nev. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Apr. 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ Apr. 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800 ; http://www.abiworld.org/ June 13-16, 2013 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Mich. Contact: 1-703-739-0800 ; http://www.abiworld.org/ July 11-13, 2013 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Hyatt Regency Newport, Newport, R.I. Contact: 1-703-739-0800 ; http://www.abiworld.org/ July 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Aug. 8-10, 2013 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Aug. 22-24, 2013 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nev. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ Nov. 1, 2013 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Atlanta Marriott Marquis, Atlanta, Ga. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Dec. 2, 2013 BEARD GROUP, INC. 19th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Dec. 5-7, 2013 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Terranea Resort, Rancho Palos Verdes, Calif. Contact: 1-703-739-0800 ; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: Sept. 15, 2012 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Carmel Paderog, Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***