/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/121109.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, November 9, 2012, Vol. 16, No. 312 Headlines 1220 SOUTH: Files Schedules of Assets and Liabilities A123 SYSTEMS: U.S. Trustee Objects to $4.2-Mil. Bonuses for Execs A123 SYSTEMS: Section 341(a) Meeting Scheduled for Nov. 26 A123 SYSTEMS: Taps Alvarez & Marsal as Financial Advisors A123 SYSTEMS: Proposes Lazard Freres as Investment Banker A123 SYSTEMS: Gets Interim Approval of $50-Mil. DIP Financing ADEPT TECHNOLOGIES: Files Chapter 11 Petition in Alabama AFA INVESTMENT: Needs More Time to Finalize Global Settlement Deal AMERICAN AIRLINES: Ronald Katz Wants to File Late Claim AMERICAN AIRLINES: Freezes 4 Underfunded Pension Plans AMERICAN AIRLINES: Mediation Board Urges 5th Cir. to Deny Review AMERICAN AIRLINES: Antitrust Suit Remains Pending in California AMERICAN SUZUKI: Parent to Retain Assets via Plan or 363 Sale AMERICAN SUZUKI: Court OKs DIP Loan; Must Confirm Plan by Feb. 28 AMES DEPARTMENT: Wants Plan Exclusivity Until Jan. 31 AMSURG CORP: Moody's Assigns 'Ba3' CFR/PDR; Outlook Stable AMSURG CORP: S&P Assigns 'BB-' Corp. Credit Rating; Outlook Stable ANDERSON NEWS: Lied About Meeting in Antitrust Suit, Time Says ARCAPITA BANK: Can Move Ahead With $125-Mil. Loan From Fortress ARCAPITA BANK: Withdraws London Listing of PointPark Properties ATHABASCA OIL: S&P Assigns 'CCC+' Corporate Credit Rating AXESSTEL INC: Reports $2.1 Million Net Income in Third Quarter B+H OCEAN: Files First Amended Joint Plan of Reorganization BAKERS FOOTWEAR: Court Approves Liquidation Deal With SB, Tiger BAKERS FOOTWEAR: Wins May 1 Extension of Lease Decision Deadline BAKERS FOOTWEAR: Proposes Procedures for Rejecting Leases BEALE STREET BLUES: Restaurant Said to Cease Operation BERNARD L. MADOFF: Investors Settle Class Action for $80.3MM BITI LLC: Court Approves Fuller & Lowenberg as Accountant BITI LLC: Court OKs Rivkin Radler as Committee's Counsel BLUE CITY: Oman's Sovereign Wealth Fund Bails Out Bondholders BOMBARDIER INC: Moody's Affirms 'Ba2' CFR/PDR; Outlook Negative BRAFFITS CREEK: Files List of 20 Largest Unsecured Creditors BRAFFITS CREEK: Files Schedules of Assets and Liabilities CARTER REESE: Judge Fehling Won't Recuse Self CASH4GOLD: Gold Buying Firm Sold for $440,000 in Bankruptcy CELANESE US: Moody's Rates $500MM Senior Unsecured Notes 'Ba2' CELANESE US: S&P Affirms 'BB' Corporate Credit Rating CELOTEX CORP: 11th Circ. Denies Challenge of Asbestos Deal CHATHAM PARKWAY: Case Summary & 8 Unsecured Creditors CHEM RX CORP: Former Execs Dodge Trustee's Suit Over 2007 Buyout CHINA SHEN: Receives Non-Compliance Notice from NYSE MKT CITY NATIONAL: Fitch Rates $175-Mil. Preferred Issuance at 'BB' COMMONWEALTH ADVISORS: SEC Charges Fund Manager for Hiding Losses CONDOR DEVELOPMENT: Dec. 7 Hearing on Motion for Relief from Stay CONSOLIDATION SERVICES: Incurs $186,300 Net Loss in 3rd Quarter CONTEC HOLDINGS: Emerges From Chapter 11 Bankruptcy CRYOPORT INC: Appoints Jerrell Shelton as President and CEO DELPHI CORP: DPH Holdings Files Report for 3rd Quarter 2012 DELPHI CORP: Legislator Demands Pension Termination Docs DELPHI CORP: UAW Addresses Omissions in NBC Report DELPHI SLOVENSKO: To Lay Off 500 Employees Thru June 2014 DESPERADO DAIRY: Bankruptcy Filing Unauthorized DEWEY & LEBOEUF: Wins OK to Subpoena Clients Over Unpaid Fees DIGITAL DOMAIN: Schedules and SOFA Due Today DIGITAL DOMAIN: Committee Wins OK to Retain Attorneys DJL TRUCKING: Case Summary & 20 Largest Unsecured Creditors DPL INC: Fitch Lowers Issuer Default Rating to 'BB' DORAL PROPERTIES: Moody's Corrects Rating on Bonds to 'Caa1' EASTMAN KODAK: Wins Court Nod to End Retiree Benefits ELECTRONIC GAME CARD: SEC Charges Execs, Auditor With Fraud ELPIDA MEMORY: Mosaid Seeks to Sue Over DRAM Patents EMSCHARTS INC: Golden Hour Offers Transition to Customers EVANS OIL: U.S. Trustee Names Philip V. Martino as Ch. 11 Trustee FIBERTOWER CORP: Sale Deal Collapses; Buyers Have No Financing FIRST PLACE: Court Enters Order Restricting Trading in Equity FLETCHER INT'L: Proposes Goldin Associates as Consultant FORT LAMAR: Case Summary & 2 Unsecured Creditors FREMONT GENERAL: California Court Upholds Ruling in Worker's Suit FRIENDSHIP DAIRIES: Committee Taps Levenfeld Pearlstein as Counsel FRIENDSHIP DAIRIES: Committee Proposes Mullin as Local Counsel FRIENDSHIP DAIRIES: Files Schedules of Assets and Liabilities FRIENDSHIP DAIRIES: Taps Raymond Hunter as Business Consultant GAINESVILLE REDEVELOPMENT: Fitch Cuts Rating on $72MM Bonds to BB+ GREGORY FRIEDMAN: Court to Confirm Second Amended Plan GUARANTY BANK: Goldman Sachs, Others Want $900MM MBS Suit Nixed HARBINGER GROUP: Fitch Says Oil Venture Won't Affect 'B' IDR HILLTOP FARMS: Files Chapter 11 in South Dakota HMX ACQUISITION: Seeks Approval to Sell Canadian Affiliate HOMER CITY: Files Prepack Chapter 11 to Transfer Ownership HOMER CITY: Case Summary & 2 Unsecured Creditors HOUGHTON INT'L: S&P Puts 'B' CCR on Watch over Gulf Oil Deal ICEWEB INC: D'Arelli Replaces Sherb as Accountants INSPIRATION BIOPHARMACEUTICALS: Seeks OK of Auction Procedures ITRACKR SYSTEMS: Incurs $222,900 Net Loss in Third Quarter JAMES RIVER: S&P Cuts CCR to 'SD' on Discounted Note Repurchases JEFFERSON COUNTY: Alabama Balks at Sewer-Rate Increase JOHN D OIL: Has Until Dec. 6 to Propose Chapter 11 Plan JOURNAL REGISTER: American Legal Approved as Administrative Agent JOURNAL REGISTER: Court Approves SSG Advisors as Financial Advisor LDK SOLAR: Terminates Solar Wafer Supply Contract with Sumitomo LIFECARE HOLDINGS: Obtains Waiver From Lenders Until Dec. 15 LONSDALE TRUCKING: Case Summary & 20 Largest Unsecured Creditors LOUISIANA RIVERBOAT: Dec. 3 Hearing on Adequacy of Plan Outline METAL SERVICES: Moody's Cuts CFR/PDR to 'B2'; Outlook Stable MICROVISION INC: Incurs $3.8-Mil. Net Loss in Third Quarter MONITOR COMPANY: Consulting Firm Files Ch.11; Sells to Deloitte NEWPAGE CORP: Wins OK to Send Ch. 11 Plan to Creditors for Vote NEW WESTERN: Incurs $105,500 Net Loss in Third Quarter NORTHSTAR AEROSPACE: Court OKs Stipulation for Cash Collateral NOVA FINANCIAL: Files Ch.7 Bankruptcy After Banking Unit Closed NYTEX ENERGY: Incurs $288,000 Net Loss in Third Quarter OHI INTERMEDIATE: S&P Affirms 'B+' Corporate Credit Rating ORIENTAL TRADING: S&P Puts 'B' Corp. Credit Rating on Watch Pos PINNACLE AIRLINES: Flight Attendants Ratify 6-Year Contract PORTER HILLS: S&P Affirms 'BB-' Rating on Series 1998 Revenue Bond POST STREET: Approved to Sell Substantially All Assets QUALTEQ INC: Court OKs Vmark Sale to Brazil's Valid USA QUIGLEY CO: Seeks Two-Week Voting Time Extension for Ch. 11 Plan REEVES DEVELOPMENT: Files for Chapter 11 in Louisiana RESIDENTIAL CAPITAL: U.S., Ally Object to Ocwen $3BB Purchase RG STEEL: Court Approves Settlement With W.V. Insurance Commission RG STEEL: Can Apply Citi Parties' Cash Collateral to WCI L/C Fees RITZ CAMERA: Taps Hilco to Sell Topeka, Kansas Property SAHARA MOTEL: Files for Bankruptcy in New Jersey SATCON TECHNOLOGY: Wins Further Approval to Use Cash Collateral SCHIFF NUTRITION: Moody's Reviews 'B1' CFR for Upgrade SCOTSMAN INDUSTRIES: S&P Puts 'B+' Corp. Credit Rating on Watch SECURITY NATIONAL: Bank of America Balks at Plan Disclosures SECURITY NATIONAL: Bank of America Wants Lift Stay on Collateral SPICY GOURMET: Board Approves Name Changed to BullsnBears.com TEREX CORP: Moody's Rates New $850MM Senior Unsecured Notes 'B3' TEREX CORP: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Stable THINKEQUITY LLC: Files for Chapter 7 Liquidation TOLL ROAD: Moody's Affirms 'Ba1' Underlying Rating; Outlook Neg. TONY TOSH JR: Case Converted to Chapter 7 TRAFFIC CONTROL: Committee Reaches Global Settlement TRANSPORTADORA DE GAS: Fitch Lifts Issuer Default Rating From BB+ VALENCE TECHNOLOGY: Wants More Time to File Chapter 11 Plan VILLAGIO PARTNERS: Hughes Watters Approved as General Counsel VILLAGIO PARTNERS: Court OKs Andrews Mayers as Real Estate Counsel VILLAGIO PARTNERS: Court Approves Kaiser as Litigation Counsel VILLAGIO PARTNERS: U.S. Trustee Unable to Form Committee VIVARO CORP: Sues Distributor for $7-Mil. Over Missed Payments W25 LLC: Files for Chapter 11 in Manhattan WINDOW FACTORY: Chapter 11 Trustee Can Sell Business Assets WM SIX: Has Until Dec. 31 to Use Lenox Mortgage's Cash Collateral YELLOWSTONE MOUNTAIN: Investors Slam Challenge to $26MM Settlement * California Voters Approve Local Tax Hike & New Levies * Michigan Voters Repeal Law on State Takeover Law * Fitch May Downgrade U.S. by Late 2013 if Cliff Unresolved * Moody's Says PPACA Credit Neg. for Not-for-Profit Hospitals * Moody's Says Expanded Gaming to Pressure Northeast US Market * WSJ Report Says Some Public Firms Mum on Bankruptcy Preparations * U.S. Bankruptcy Filings Fall in Third Quarter * Ethanol Production Declines as Costs Rise and Plants Close * SNR Denton, Salans, and Fraser Milner to Combine * BOOK REVIEW: Learning Leadership ********* 1220 SOUTH: Files Schedules of Assets and Liabilities ----------------------------------------------------- 1220 South Ocean Boulevard, LLC filed with the U.S. Bankruptcy Court Southern District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $74,000,000 B. Personal Property $99 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $27,500,000 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $14,023,735 ----------- ----------- TOTAL $74,000,099 $41,523,735 A copy of the schedules is available for free at http://bankrupt.com/misc/1220_SOUTH_sal.pdf About 1220 South Ocean 1220 South Ocean Boulevard, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 12-32609) in its home-town in West Palm Beach, Florida. The Debtor disclosed $74 million in total assets and $41.5 million in liabilities as of Sept. 7, 2012. According to http://1220southocean.com/,1220 South Ocean is a French-inspired waterfront estate homes and resort located in Palm Beach. Owned by real estate developer Dan Swanson, president of Addison Development, 1220 South Ocean sits on 2.5 private and secure acres of land, has 20,000 square feet of living plus an additional 7,000 square feet of loggias, garages & guest house. The resort is located four miles to Palm Beach International Airport. Mr. Swanson other developments include the Phipps Estates in Palm Beach and Addison Estates at the Boca Hotel. Judge Erik P. Kimball oversees the case. Kenneth S. Rappaport, Esq., at Rappaport Osbourne & Rappaport, in Boca Raton, Florida, serves as counsel to the Debtor. A123 SYSTEMS: U.S. Trustee Objects to $4.2-Mil. Bonuses for Execs ----------------------------------------------------------------- The U.S. Trustee says that A123 Systems Inc.'s attempt to pay millions of dollars in "incentive" bonuses to a handful of the battery maker's insiders appears to be a disguised bid to award the employees with illegal "retention" bonuses, according to Patrick Fitzgerald at Dow Jones' Daily Bankruptcy Review. Lance Duroni at Bankruptcy Law360 reports that the U.S. Trustee has questioned A123 Systems' plan to pay up to $4.2 million in bonuses to its top brass while in bankruptcy, saying the bonuses are so easily achieved that the plan is not truly based on performance. About A123 Systems Based in Waltham, Massachusetts, A123 Systems Inc. designs, develops, manufactures and sells advanced rechargeable lithium-ion batteries and battery systems and provides research and development services to government agencies and commercial customers. A123 is the recipient of a $249 million federal grant from the Obama administration. Pre-bankruptcy, A123 had an agreement to sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp. U.S. lawmakers opposed the deal over concerns on the transfer of American taxpayer dollars and technology to China. A123 didn't make a $2.7 million payment due Oct. 15 on $143.75 million in 3.75% convertible subordinated notes due 2016. A123 and U.S. affiliates, A123 Securities Corporation and Grid Storage Holdings LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012, with a deal to sell its auto-business assets to Johnson Controls Inc. The deal with JCI is valued at $125 million, and subject to higher offers at a bankruptcy auction. A123 disclosed assets of $459.8 million and liabilities totaling $376 million. Debt includes $143.8 million on 3.75% convertible subordinated notes. Other liabilities include $22.5 million on a bridge loan owing to Wanziang. About $33 million is owed to trade suppliers. The Hon. Kevin J. Carey presides over the case. Lawyers at Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres & Co. LLC acts as the Debtors' financial advisors, while Alvarez & Marsal serves as restructuring advisors. Logan & Company Inc. serves as the Debtors' claims and noticing agent. Wanxiang America Corporation and Wanxiang Clean Energy USA Corp. are represented in the case by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin LLP. JCI is represented in the case by Josh Feltman, Esq., at Wachtell Lipton Rosen & Katz LLP. An official committee of unsecured creditors has been appointed in the case. The Committee is represented by: William R. Baldiga, Esq. BROWN RUDNICK LLP Seven Times Square New York, NY 10036 - and - Mark Minuti, Esq. SAUL EWING LLP 222 Delaware Avenue, Suite 1200 PO Box 1266 Wilmington, DE 19899 A123 SYSTEMS: Section 341(a) Meeting Scheduled for Nov. 26 ---------------------------------------------------------- The U.S. Trustee for region 3 will convene a meeting of creditors in the Chapter 11 cases of A123 Systems, Inc., et al., on Nov. 26, 2012, at 10 a.m. (EST). The meeting will be held at the J. Caleb Boggs Federal Building, 844 N. King Street, 5th Floor, Room 5209, Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About A123 Systems Based in Waltham, Massachusetts, A123 Systems Inc. designs, develops, manufactures and sells advanced rechargeable lithium-ion batteries and battery systems and provides research and development services to government agencies and commercial customers. A123 is the recipient of a $249 million federal grant from the Obama administration. Pre-bankruptcy, A123 had an agreement to sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp. U.S. lawmakers opposed the deal over concerns on the transfer of American taxpayer dollars and technology to China. A123 didn't make a $2.7 million payment due Oct. 15 on $143.75 million in 3.75% convertible subordinated notes due 2016. A123 and U.S. affiliates, A123 Securities Corporation and Grid Storage Holdings LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012, with a deal to sell its auto-business assets to Johnson Controls Inc. The deal with JCI is valued at $125 million, and subject to higher offers at a bankruptcy auction. A123 disclosed assets of $459.8 million and liabilities totaling $376 million. Debt includes $143.8 million on 3.75% convertible subordinated notes. Other liabilities include $22.5 million on a bridge loan owing to Wanziang. About $33 million is owed to trade suppliers. The Hon. Kevin J. Carey presides over the case. Lawyers at Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres & Co. LLC acts as the Debtors' financial advisors, while Alvarez & Marsal serves as restructuring advisors. Logan & Company Inc. serves as the Debtors' claims and noticing agent. Wanxiang America Corporation and Wanxiang Clean Energy USA Corp. are represented in the case by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin LLP. JCI is represented in the case by Josh Feltman, Esq., at Wachtell Lipton Rosen & Katz LLP. An official committee of unsecured creditors has been appointed in the case. The Committee is represented by William R. Baldiga, Esq., at Brown Rudnick LLP, and Mark Minuti, Esq., at Saul Ewing LLP. A123 SYSTEMS: Taps Alvarez & Marsal as Financial Advisors --------------------------------------------------------- A123 Systems, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Alvarez & Marsal North America, LLC as financial advisors. A&M is expected to provide restructuring support services to manage and advise the Debtors in the course of the cases, including, but not limited to: a) assistance to the Debtors in the preparation of financial- related disclosures required by the Court, including the Debtors' schedules of assets and liabilities, statements of financial affairs and monthly operating reports; b) assistance to the Debtors with information and analyses required pursuant to the Debtors' debtor-in-possession financing; and c) assistance with the identification and implementation of short-term cash management procedures. The Debtors relate that they have chosen Lazard FrŠres & Co LLC as investment banker. A&M will work closely with Lazard to prevent any duplication of efforts in the course of advising the Debtors. The hourly rates of A&M personnel are: Managing Director $650 - $850 Director $450 - $650 Associate $300 - $450 Analyst $250 - $300 Prepetition, A&M received $200,000 retainer and payments totaling to $1,487,449 for services performed. To the best of the Debtors' knowledge, A&M is "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About A123 Systems Based in Waltham, Massachusetts, A123 Systems Inc. designs, develops, manufactures and sells advanced rechargeable lithium-ion batteries and battery systems and provides research and development services to government agencies and commercial customers. A123 is the recipient of a $249 million federal grant from the Obama administration. Pre-bankruptcy, A123 had an agreement to sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp. U.S. lawmakers opposed the deal over concerns on the transfer of American taxpayer dollars and technology to China. A123 didn't make a $2.7 million payment due Oct. 15 on $143.75 million in 3.75% convertible subordinated notes due 2016. A123 and U.S. affiliates, A123 Securities Corporation and Grid Storage Holdings LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012, with a deal to sell its auto-business assets to Johnson Controls Inc. The deal with JCI is valued at $125 million, and subject to higher offers at a bankruptcy auction. A123 disclosed assets of $459.8 million and liabilities totaling $376 million. Debt includes $143.8 million on 3.75% convertible subordinated notes. Other liabilities include $22.5 million on a bridge loan owing to Wanziang. About $33 million is owed to trade suppliers. The Hon. Kevin J. Carey presides over the case. Lawyers at Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres & Co. LLC acts as the Debtors' financial advisors, while Alvarez & Marsal serves as restructuring advisors. Logan & Company Inc. serves as the Debtors' claims and noticing agent. Wanxiang America Corporation and Wanxiang Clean Energy USA Corp. are represented in the case by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin LLP. JCI is represented in the case by Josh Feltman, Esq., at Wachtell Lipton Rosen & Katz LLP. An official committee of unsecured creditors has been appointed in the case. The Committee is represented by William R. Baldiga, Esq., at Brown Rudnick LLP, and Mark Minuti, Esq., at Saul Ewing LLP. A123 SYSTEMS: Proposes Lazard Freres as Investment Banker --------------------------------------------------------- A123 Systems, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Lazard Freres & Co. LLC as investment banker. Lazard will, among other things: a) review and analyze the Debtors' business, operations and financial projections; b) assist to formulate strategy and structural alternatives; c) at the Debtors' request, Lazard will meet with the Debtors' board of directors to discuss the Debtors' strategic alternatives; and d) evaluate the Debtors' potential debt capacity in light of their projected cash flows and advise the Debtors with respect to any debtor-in-possession financing required in connection with a restructuring. The Debtors request approval of the fee structure which includes: i) a monthly fee of $200,000, due on the first day of each month until the earlier of the completion of the restructuring or the termination of Lazard's engagement; ii) a completion fee of $5,000,000, payable upon the consummation of a restructuring; and iii) a cash fee payable with respect to any Senior Secured Credit Facility equal to: (a) 1.50% of the maximum amount of the Senior Secured Credit Facility with respect to the amounts of the Senior Secured Credit Facility borrowed from lender(s) that are banks, (b) 0.75% of the maximum amount of the Senior Secured Credit Facility with respect to the amounts of the Senior Secured Credit Facility borrowed from any of the financing sources named in Schedule A of the Engagement Letter or any of their affiliates, and (c) 3.0% of the maximum amount of the Senior Secured Credit Facility with respect to the amounts of the Senior Secured Credit Facility borrowed from lender(s) that are entities other than banks or Company Financing Sources, due and payable. The Debtors relate that in the unlikely event the services of Lazard and the services of Alvarez & Marsal North America, LLC, do overlap, the Debtors will work with Lazard and A&M to avoid duplication of their work. To the best of the Debtors' knowledge, Lazard is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About A123 Systems Based in Waltham, Massachusetts, A123 Systems Inc. designs, develops, manufactures and sells advanced rechargeable lithium-ion batteries and battery systems and provides research and development services to government agencies and commercial customers. A123 is the recipient of a $249 million federal grant from the Obama administration. Pre-bankruptcy, A123 had an agreement to sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp. U.S. lawmakers opposed the deal over concerns on the transfer of American taxpayer dollars and technology to China. A123 didn't make a $2.7 million payment due Oct. 15 on $143.75 million in 3.75% convertible subordinated notes due 2016. A123 and U.S. affiliates, A123 Securities Corporation and Grid Storage Holdings LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012, with a deal to sell its auto-business assets to Johnson Controls Inc. The deal with JCI is valued at $125 million, and subject to higher offers at a bankruptcy auction. A123 disclosed assets of $459.8 million and liabilities totaling $376 million. Debt includes $143.8 million on 3.75% convertible subordinated notes. Other liabilities include $22.5 million on a bridge loan owing to Wanziang. About $33 million is owed to trade suppliers. The Hon. Kevin J. Carey presides over the case. Lawyers at Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres & Co. LLC acts as the Debtors' financial advisors, while Alvarez & Marsal serves as restructuring advisors. Logan & Company Inc. serves as the Debtors' claims and noticing agent. Wanxiang America Corporation and Wanxiang Clean Energy USA Corp. are represented in the case by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin LLP. JCI is represented in the case by Josh Feltman, Esq., at Wachtell Lipton Rosen & Katz LLP. An official committee of unsecured creditors has been appointed in the case. The Committee is represented by William R. Baldiga, Esq., at Brown Rudnick LLP, and Mark Minuti, Esq., at Saul Ewing LLP. A123 SYSTEMS: Gets Interim Approval of $50-Mil. DIP Financing ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted A123 Systems, Inc., interim approval to use $50 million of debtor- in-possession financing, which is being provided by Wanxiang Group Corporation. The financing supplements the prepetition $22.5 million of liquidity and letter of credit support that Wanxiang provided to A123, which will remain in place. The hearing on bidding procedures with regard to the previously announced asset purchase agreement with Johnson Controls, Inc. JCI that was initiated on Monday, Nov. 5, 2012, has been adjourned until a hearing scheduled for Nov. 8, 2012. Johnson Controls consented to adjourn the hearing on this motion so A123 and Johnson Controls could continue discussions with the recently formed Official Committee of Unsecured Creditors and attempt to resolve consensually any potential issues regarding the bidding procedures. "We are pleased that the Court has granted A123 interim approval for the DIP financing agreement," said Dave Vieau, Chief Executive Officer of A123. "The DIP financing will allow A123 to operate our businesses and provides additional operational and financial stability as we proceed with the transaction process. It is important to note that being the DIP provider does not give Wanxiang or any other party control over or leverage in A123's court-supervised sale process. As we move through the transaction process, we will continue to act in the best interests of A123, its employees and its other stakeholders." About A123 Systems Based in Waltham, Massachusetts, A123 Systems Inc. designs, develops, manufactures and sells advanced rechargeable lithium-ion batteries and battery systems and provides research and development services to government agencies and commercial customers. A123 is the recipient of a $249 million federal grant from the Obama administration. Pre-bankruptcy, A123 had an agreement to sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp. U.S. lawmakers opposed the deal over concerns on the transfer of American taxpayer dollars and technology to China. A123 didn't make a $2.7 million payment due Oct. 15 on $143.75 million in 3.75% convertible subordinated notes due 2016. A123 and U.S. affiliates, A123 Securities Corporation and Grid Storage Holdings LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012, with a deal to sell its auto-business assets to Johnson Controls Inc. The deal with JCI is valued at $125 million, and subject to higher offers at a bankruptcy auction. A123 disclosed assets of $459.8 million and liabilities totaling $376 million. Debt includes $143.8 million on 3.75% convertible subordinated notes. Other liabilities include $22.5 million on a bridge loan owing to Wanziang. About $33 million is owed to trade suppliers. The Hon. Kevin J. Carey presides over the case. Lawyers at Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres & Co. LLC acts as the Debtors' financial advisors, while Alvarez & Marsal serves as restructuring advisors. Logan & Company Inc. serves as the Debtors' claims and noticing agent. Wanxiang America Corporation and Wanxiang Clean Energy USA Corp. are represented in the case by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin LLP. ADEPT TECHNOLOGIES: Files Chapter 11 Petition in Alabama -------------------------------------------------------- ADEPT Technologies, LLC, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 12-83490) on Oct. 31, in Decatur, Alabama. The Debtor filed an application to employ Kevin D. Heard and the law firm of Heard Ary, LLC, as bankruptcy counsel. The Debtor, which has principal assets located in Huntsville, Alabama, estimated assets of $10 million to $50 million and liabilities of up to $10 million. According to the docket, the formal schedules of assets and liabilities and statement of financial affairs are due Nov. 14. AFA INVESTMENT: Needs More Time to Finalize Global Settlement Deal ------------------------------------------------------------------ AFA Investment Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Jan. 28, 2013, and March 28, respectively. The Debtors explained in their second exclusivity extension that they need additional time to finalize the global settlement agreement with the Official Committee of Unsecured Creditors, the second lien agent and other settlement parties, on the key remaining disputes in the cases. A hearing on Nov. 20, 2012, at 3 p.m. has been set. Objections, if any, are due Nov. 9. 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: Ronald Katz Wants to File Late Claim ------------------------------------------------------- Ronald A. Katz Technology Licensing L.P. asks the U.S. Bankruptcy Court to deem its proof of claim against American Airlines Inc. timely filed. Katz said in a court filing it was not able to file its claim before the July 16 deadline for filing proofs of claim because it did not receive a notice from the company. The basis for the claim is the patent-infringement lawsuit Katz filed against American Airlines in a district court in Texas in 2006. The lawsuit was subsequently transferred to a district court in California for pretrial multi-district litigation proceedings. The patent-infringement suit remains stayed as a result of the American Airlines' bankruptcy filing. The lawsuit was filed against American and American Beacon Advisors, Inc. (then a wholly owned subsidiary of the Company) alleging that American infringes a number of the plaintiff's patents, each of which relates to automated telephone call processing systems. The plaintiff is seeking past and future royalties, injunctive relief, costs and attorneys' fees. In 2008, the California district court dismissed with prejudice all claims against American Beacon. In 2009, following the district court's granting of summary judgment to American based on invalidity and non-infringement, the court dismissed all claims against American. Katz appealed, and in 2011, the Federal Circuit Court of Appeals issued a decision affirming in part and reversing in part and remanding the case back to the District Court for further proceedings. Katz's Plaintiff's petition for a rehearing of the appeal en banc before the Federal Circuit was denied. A court hearing is scheduled for December 11. Objections are due by November 19. 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: Freezes 4 Underfunded Pension Plans ------------------------------------------------------ American Airlines Inc. froze its four underfunded pension plans Thursday, according to a November 1 report by Business Insurance. The freezing of the company's pension plans, which have about 130,000 participants, will not affect retirees who will continue to receive promised benefits. However, active participants will no longer accrue benefits. Less than half of plan participants were accruing benefits. American Airlines, though, will make an automatic 401(k) plan contribution for pilots equal to 11% of their pay, and will match other employees' contributions, up to 5.5% of compensation, Business Insurance reported. Reuters, citing American's Denise Lynn, senior vice president for people, reported that the automatic 401(k) contribution was being made in an attempt to ease pilots' uncertainty about retirement contributions when the current plans are frozen. Pension Benefit Guaranty Corp., which protects the pension benefits of 44 million Americans in private-sector pension plans, described the company's move as a "mixed result" for the participants. "We . . . are pleased that they will get to keep the pension benefits they have already earned but it is unfortunate that going forward their retirement benefits will not provide the same level of security as a traditional pension," PBGC Director Josh Gotbaum said in a November 1 statement. 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: Mediation Board Urges 5th Cir. to Deny Review ---------------------------------------------------------------- The National Mediation Board urged the U.S. Court of Appeals for the Fifth Circuit to reject American Airlines Inc.'s bid for a full court review of a ruling that paved the way for a vote on the Communication Workers of America's potential representation of the airline's passenger service agents, Maria Chutchian of BankruptcyLaw360 reported. The board contended that American Airlines has failed to show that the decision was out of line with U.S. Supreme Court precedent when it reversed a district court's June decision blocking a vote on the CWA's representation of passenger service agents. The Fifth Circuit's ruling reversed an earlier ruling by U.S. District Judge Terry Means in Fort Worth, Texas, that blocked the agents' union election from going forward. In a two-page order, the appeals court said the trial court "erred in exercising its jurisdiction." It said review of National Mediation Board decisions was only warranted when the board has committed "egregious error." American Airlines sued the National Mediation Board in May to stop the union election by nearly 10,000 passenger service agents. Judge Means blocked the vote, saying the board exceeded its authority when it authorized an election. The case is American Airlines Inc. v. National Mediation Board, 12-10680, U.S. Court of Appeals for the Fifth Circuit (New Orleans). 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: Antitrust Suit Remains Pending in California --------------------------------------------------------------- A class action lawsuit captioned Turner v. American Airlines, et al., remains pending in California, according to AMR Corporation's October 17, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2012. On June 20, 2006, the U.S. Department of Justice served the Company with a grand jury subpoena as part of an ongoing investigation into possible criminal violations of the antitrust laws by certain domestic and foreign passenger carriers. The Company said in its filing that it does not believe it is a target of the DOJ investigation. The Company said it intends to cooperate fully with this investigation. On September 4, 2007, the Attorney General of the State of Florida served the Company with a Civil Investigative Demand as part of its investigation of possible violations of federal and Florida antitrust laws regarding the pricing of air passenger transportation. In the event that this or other investigations uncover violations of the U.S. antitrust laws or the competition laws of some other jurisdiction, those findings and related legal proceedings could have a material adverse impact on the Company. Approximately 52 purported class action lawsuits have been filed in the U.S. against the Company and certain foreign and domestic air carriers alleging that the defendants violated U.S. antitrust laws by illegally conspiring to set prices and surcharges for passenger transportation. On October 25, 2006, these cases, along with other purported class action lawsuits in which the Company was not named, were consolidated in the United States District Court for the Northern District of California as In re International Air Transportation Surcharge Antitrust Litigation, Civ. No. 06-1793 (the Passenger MDL). On July 9, 2007, the Company was named as a defendant in the Passenger MDL. On August 25, 2008, the plaintiffs dismissed their claims against the Company in this action. On March 13, 2008, and March 14, 2008, an additional purported class action complaint, Turner v. American Airlines, et al., Civ. No. 08-1444 (N.D. Cal.), was filed against the Company, alleging that the Company violated U.S. antitrust laws by illegally conspiring to set prices and surcharges for passenger transportation in Japan and certain European countries, respectively. The Turner plaintiffs have failed to perfect service against the Company, and it is unclear whether they intend to pursue their claims. In the event that the Turner plaintiffs pursue their claims, the Company said it will vigorously defend these lawsuits, but any adverse judgment in these actions could have a material adverse impact on the Company. 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 SUZUKI: Parent to Retain Assets via Plan or 363 Sale ------------------------------------------------------------- American Suzuki Corp. has determined to pursue a reorganization strategy in its Chapter 11 case that includes a proposed plan of reorganization by which a sale of substantially all of its assets to an entity formed by its parent, automaker Suzuki Motor Corp. In the event the Debtor ultimately determines not to proceed with the proposed plan, the Debtor expects to proceed with the sale to the SMC unit under 11 U.S.C. Sec. 363. The SMC unit, NounCo, Inc., has signed a deal to purchase the Debtor's business of distributing, selling and servicing Suzuki brand vehicles for $95 million in cash and the assumption of cure and warranty liabilities. The proposed Plan effectuates, among other things, the sale of property, rights, and interests comprising and/or relating to the Debtor's motorcycle, all-terrain vehicle, marine and other non- automotive business lines, the Debtor's automotive parts/service business line ("Auto Parts/Service Business"), and certain other surplus assets (the "Purchased Assets") to NounCo. The assets to be sold exclude cash and cash equivalents, the estate's avoidance actions, and the Debtor's automotive sales business. The Debtor disclosed assets of $233 million and liabilities totaling $346 million. Debt includes $32 million owing to the parent on a revolving credit and $120 million for inventory financing. There is about $4 million owing to trade suppliers. The Chapter 11 Plan The Debtor filed the Plan together with the bankruptcy petition. Under the proposed Plan, the Debtor's Motorcycle/ATV and Marine Divisions will remain largely unaffected including the warranties associated with such products. The restructured Automotive Division intends to honor automotive warranties and authorize the sale of genuine Suzuki automotive parts and services to retail customers through a network of parts and service only dealerships that will provide warranty services. Under the Plan, SMC will assume and honor all contractual and statutory warranty and service obligations, whether express or implied, undertaken by the Debtor as the factory authorized U.S. distributor of Suzuki Products (including Suzuki-brand automobiles, motorcycles, ATVs, marine and other non-automotive products), whether arising prior to or after the Effective Date, pursuant to a post-Effective Date warranty program. The Plan will be funded through a combination of Cash on hand, net proceeds from ordinary course operations, the liquidation of the retained assets, and the sale proceeds from NounCo. Generally, all creditors, other than general unsecured creditors, will be paid in full in cash on or as soon as practicable after the Effective Date or in deferred cash payments, with interest, as permitted under the Bankruptcy Code. In particular, all Allowed Administrative Claims, Priority Tax Claims, Priority Non-Tax Claims and Secured Claims, will be paid or otherwise satisfied pursuant to the terms of the Plan; provided, however, as discussed herein, SMC will voluntarily subordinate certain of its Secured Claims vis-a-vis the Settling Creditors in order to effectuate the payment in full of these creditors' allowed claims, subject to the terms and conditions set forth in the Plan. Provided that the Plan is otherwise confirmable, as of the Effective Date, all existing Interests in the Debtor, including the common stock of the Debtor held by SMC, will remain unaffected and unimpaired by the Plan and will remain existing as of the Effective Date; provided, however, in the event that SMC elects otherwise or any of Classes 3, 4 and 5 votes against the Plan, all Interests will be cancelled on the Effective Date. In the event that all Interests are cancelled under the Plan, after all Allowed Claims and Plan Expenses have been paid or otherwise satisfied in full, any remaining funds of the Post-Effective-Date Debtor will be distributed to SMC. A copy of the Disclosure Statement explaining the Plan is available for free at http://bankrupt.com/misc/Amer_Suzuki_DS.pdf Sale Motion If the plan doesn't work, Suzuki will have the bankruptcy court hold an auction that won't include concessions the parent will make for dealers and other creditors. The Debtor has filed a motion seeking approval to conduct an action for substantially all of its assets pursuant to 11 U.S.C. Sec. 363. Competing bids are required to submit an initial bid must be in an amount that is sufficient to pay the success fee to the Debtor's proposed investment banker in the amount of $2 million plus the expense reimbursement of $750,000, and result in additional consideration of at least $500,000. Bidders are each required to submit a good faith deposit of $2.5 million to participate in the auction. The Debtor is asking the court to approve an expense reimbursement of up to $750,000 to compensate the stalking horse bidder for the fees and expenses incurred in connection with negotiating and executing the APA. The Debtor has retained Imperial Capital, LLC as investment banker and will proceed with a thorough marketing process over the next 60 to 90 days. Under the deal with NounCo, the Debtor must close the sale by March 29, 2013. SMC is represented by: Michael Tuchin, Esq. Lee Bogdanoff, Esq. Martin Barash, Esq. David Fidler, Esq. KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 Avenue of the Stars, 39th Floor Los Angeles, CA 90067, E-mail: mtuchin@ktbslaw.com lbogdanoff@ktbslaw.com mbarash@ktbslaw.com dfidler@ktbslaw.com Serious Challenges The Debtor determined that its Automotive Division is facing and will continue to face a number of serious challenges in the highly regulated and competitive automotive industry in the continental U.S. market. The challenges include unfavorable foreign exchange rates, disproportionally high and increasing costs associated with meeting more stringent state and federal automotive regulatory requirements unique to the continental U.S. market, low sales volumes, a limited number of models in its line-up, and existing and potential litigation costs. The Debtor has exhausted all available means to reduce the cost of operating the Automotive Division for it to operate profitably. Accordingly, the Debtor determined that the best way to preserve and enhance the value of its overall business is to wind down new sales of the Automotive Division in the continental U.S. and realign its business focus on the long-term growth of its Motorcycle/ATV and Marine Divisions. American Suzuki Established in 1986 American Suzuki Motor Corporation is the sole distributor of Suzuki automobiles and vehicles in the United States. American Suzuki wholesales virtually all of its inventory through a network of independently owned and unaffiliated dealerships located throughout the continental United States. The dealers then market and sell the Suzuki Products to retail customers. Suzuki Motor Corp., the 100% interest holder in the Debtor, manufacturers substantially all of the Suzuki products. American Suzuki has 295 employees. There are approximately 220 automotive dealerships, over 900 motorcycle/ATV dealerships, and over 780 outboard marine dealerships. American Suzuki filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-22808) on Nov. 5, 2012, to sell the business to SMC, absent higher and better offers. ASMC's legal advisor on the restructuring is Pachulski Stang Ziehl & Jones LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins Riley & Scarborough LLP is serving as special counsel on automobile dealer and industry issues. Further, ASMC has proposed the appointment of M. Freddie Reiss, Senior Managing Director at FTI Consulting, as Chief Restructuring Officer, and has also added two independent Board members to assist it through this period. Rust Consulting Omni Bankruptcy, a division of Rust Consulting, Inc., is the claims and notice agent. SMC is not included in the Chapter 11 filing. AMERICAN SUZUKI: Court OKs DIP Loan; Must Confirm Plan by Feb. 28 ----------------------------------------------------------------- American Suzuki Motor Corporation won interim court authority to obtain postpetition loans, credit and other financial accommodations from non-debtor parent company, Suzuki Motor Corporation, pursuant to a Debtor-In-Possession Loan and Security Agreement dated Nov. 5, 2012. American Suzuki also obtained permission to use, on an interim basis, the collateral, including cash collateral, tied to the Debtor's pre-bankruptcy loan with SMC. The Debtor said it has an urgent and immediate need for access to cash collateral and borrowings under the DIP Credit Agreement with SMC in the principal amount of up to $50,000,000 in postpetition advances and $50,000,000 in inventory loans following entry of the Final DIP Order, of which $15,000,000 in postpetition advances and $30,000,000 in inventory loans would be available under the Interim DIP Order. The DIP loan is secured by security interests and liens on substantially all of the Debtor's assets, excluding causes of action arising under Bankruptcy Code sections 542, 544, 547, 548, 550, 551, 553(b) or 724(a), or any applicable avoidance or fraudulent transfer state law, or any proceeds. The Debtor owes its parent company no less than $152,300,000 under a Loan and Security Agreement dated July 27, 2012. According to a cash flow forecast, American Suzuki projects $373,846,000 in total receipts during the five-month period ending in March 2013 against $383,846,000 in total disbursements, including $16,337 in restructuring-related expenses. Postpetition advances under the DIP Credit Facility will bear interest at the rate of LIBOR plus 3% per annum, which will be payable quarterly on the last day of each quarter. Inventory loans will not accrue interest if paid within 15-day credit terms. No closing or exit fees are payable under the DIP Credit Agreement. The DIP Lender's professional fees relating to the financing, however, will be reimbursed. The DIP loan matures on the earliest to occur of (i) six months after the date of the DIP Credit Agreement or such later date to which the DIP Lender consents, (ii) the closing of a sale of substantially all of the assets of the Debtor or substantial consummation of a chapter 11 plan, or (iii) the occurrence of an event of default. American Suzuki has determined to pursue a reorganization strategy in its Chapter 11 case that includes a proposed plan of reorganization by which a sale of substantially all of its assets to an entity formed by its parent, automaker Suzuki Motor Corp. In the event the Debtor ultimately determines not to proceed with the proposed plan, the Debtor expects to proceed with the sale to the SMC unit under 11 U.S.C. Sec. 363. The SMC unit, NounCo, Inc., has signed a deal to purchase the Debtor's business of distributing, selling and servicing Suzuki brand vehicles for $95 million in cash and the assumption of cure and warranty liabilities. The proposed Plan effectuates, among other things, the sale of property, rights, and interests comprising and/or relating to the Debtor's motorcycle, all-terrain vehicle, marine and other non- automotive business lines, the Debtor's automotive parts/service business line, and certain other surplus assets to NounCo. The assets to be sold exclude cash and cash equivalents, the estate's avoidance actions, and the Debtor's automotive sales business. In accordance with the DIP Credit Agreement, the Debtor will comply with these "Plan/Sale Milestones": (a) filing of a plan of reorganization, a disclosure statement, and a motion to approve a Stalking Horse asset purchase agreement, no later than three business days after the Filing Date; (b) entry of an order approving bidding procedures in connection with the Stalking Horse APA by no later than Dec. 7, 2012; (c) subject to entry of the Final DIP Order, entry of an order approving the Disclosure Statement by no later than Dec. 21, 2012; (d) subject to entry of the Final DIP Order, entry of a Final Order either (i) confirming the Plan of Reorganization or (ii) approving the sale by no later than Feb. 28, 2013; and (e) subject to entry of the Final DIP Order, consummation of the Plan of Reorganization or closing of the sale no later than March 29, 2013. A final hearing on the DIP financing is set for Dec. 6, 2012 at 11:00 a.m. Objections to the financing are due Nov. 26. American Suzuki Established in 1986 American Suzuki Motor Corporation is the sole distributor of Suzuki automobiles and vehicles in the United States. American Suzuki wholesales virtually all of its inventory through a network of independently owned and unaffiliated dealerships located throughout the continental United States. The dealers then market and sell the Suzuki Products to retail customers. Suzuki Motor Corp., the 100% interest holder in the Debtor, manufacturers substantially all of the Suzuki products. American Suzuki has 295 employees. There are approximately 220 automotive dealerships, over 900 motorcycle/ATV dealerships, and over 780 outboard marine dealerships. American Suzuki filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-22808) on Nov. 5, 2012, to sell the business to SMC, absent higher and better offers. SMC is not included in the Chapter 11 filing. ASMC's legal advisor on the restructuring is Pachulski Stang Ziehl & Jones LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins Riley & Scarborough LLP is serving as special counsel on automobile dealer and industry issues. Further, ASMC has proposed the appointment of Freddie Reiss, Senior Managing Director at FTI Consulting, as Chief Restructuring Officer, and has also added two independent Board members to assist it through this period. Rust Consulting Omni Bankruptcy, a division of Rust Consulting, Inc., is the claims and notice agent. The Debtor has retained Imperial Capital, LLC as investment banker and will proceed with a thorough marketing process over the next 60 to 90 days. SMC is represented by lawyers at Klee, Tuchin, Bogdanoff & Stern LLP. AMES DEPARTMENT: Wants Plan Exclusivity Until Jan. 31 ----------------------------------------------------- Ames Department Stores, Inc., et al., ask the U.S. Bankruptcy Court for the Southern District of New York to extend until Jan. 31, 2013, their exclusive period to solicit acceptances for the proposed Chapter 11 Plan. Out of an abundance of caution, the Debtors believe an extension of the solicitation period is warranted and will avoid motion practice and unnecessary intrusion on management's time occasioned by a competing plan. A hearing on Nov. 14, 2012, at 12 noon, has been set. Objections, if any, are due Nov. 14 at 11 a.m. About Ames Department Stores Rocky Hill, Connecticut-based Ames Department Stores was founded in 1958. At its peak, Ames operated 700 stores in 20 states, including the Northeast, Upper South, Midwest and the District of Columbia. In April 1990, Ames filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. In Ames I, the retailer closed 370 stores and emerged from chapter 11 on Dec. 30, 1992. Ames filed a second bankruptcy petition under Chapter 11 (Bankr. S.D.N.Y. Case No. 01-42217) on Aug. 20, 2001. Togut, Segal & Segal LLP; Weil, Gotshal & Manges; and Storch Amini Munves PC; Cadwalader, Wickersham & Taft LLP. When the Company filed for protection from their creditors, they reported $1,901,573,000 in assets and $1,558,410,000 in liabilities. The Company closed all of its 327 department stores in 2002. Ames and its affiliates filed a consolidated Chapter 11 Plan, and a related Disclosure Statement explaining the Plan with the Court on Dec. 6, 2004. A full-text copy of Ames' Chapter 11 Plan is available at no charge at: http://bankrupt.com/misc/ames_chapter_11_plan.pdf and a full-text copy of Ames' Disclosure Statement is available at no charge at: http://bankrupt.com/misc/ames'_disclosure_statement.pdf A hearing to determine the adequacy of the Disclosure Statement explaining Ames' Plan has not yet been scheduled. AMSURG CORP: Moody's Assigns 'Ba3' CFR/PDR; Outlook Stable ---------------------------------------------------------- Moody's Investor Service assigned Ba3 Corporate Family and Probability of Default Ratings to AmSurg Corp.'s. As the same time, Moody's assigned a Ba3 rating to AmSurg's proposed $250 million senior unsecured notes. A Speculative Grade Liquidity Rating of SGL-2 is assigned. Proceeds will be used to refinance AmSurg's existing $475 million senior secured revolver. The outlook is stable The following ratings and LGD assessment have been assigned: AmSurg Corp. Corporate Family rating at Ba3; Probability of Default Rating at Ba3; $250 million senior unsecured notes due 2020 at Ba3 (LGD 3, 49%) Speculative Grade Liquidity Rating at SGL-2 The outlook is stable. Rating Rationale The Ba3 Corporate Family Rating is supported by AmSurg's scale as the leading provider of Ambulatory Surgical Centers in the US, and significant market share in the regions in which it competes. Further, AmSurg benefits from good diversity by geography and payor, as Medicare constitutes only roughly 28% of revenues. Moreover, AmSurg benefits from the relatively stable near term reimbursement environment and the longer term favorable prospects for the ASC industry and Moody's expectation that leverage will be managed to under 4 times. The rating is, however, constrained by ongoing challenges associated with the economy and high unemployment, which have resulted in an overall reduced number of ASC visits. The rating also reflects Moody's concerns with AmSurg's revenue concentration in gastroenterology and a revenue base under $1.0 billion. The stable rating outlook reflects Moody's expectation of near term reimbursement stability. In addition, Moody's expects that the company will remain disciplined about the use of additional leverage for acquisitions and that leverage is expected to be managed in the 3.5 times range. Given the prospective nature of the rating, an upgrade is unlikely in the near-term. However, for Moody's to consider an upgrade, AmSurg would need to expand its revenue scale and lessen its concentration within gastroenterology, while also maintain leverage in the 3 times range. If Moody's expects debt to EBITDA to increase and be sustained above 4.5 times, either through unforeseen adverse developments in Medicare reimbursement, a significant debt-financed acquisition, a change in appetite for shareholder initiatives, or deterioration in operating performance, the ratings could be downgraded. The principal methodology used in rating AmSurg was the Global Healthcare Service Providers Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Nashville, Tennessee, AmSurg Corp. acquires, develops and operates ambulatory surgery centers in partnership with physicians. As of Sept. 30, 2012, AmSurg had 229 operating ASCs, of which the company owned a majority interest (primarily 51%) in 226 ASCs and owned a minority interest in three ASCs. AmSurg recognized approximately $914 million of revenue in the twelve months ended September 30, 2012. AMSURG CORP: S&P Assigns 'BB-' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned Nashville, Tenn.-based surgery center operator AmSurg Corp. its 'BB-' corporate credit rating. The outlook is stable. "At the same time, we assigned the proposed $250 million senior unsecured notes our 'B' issue-level rating with a recovery rating of '6', indicating our expectation for negligible (0 to 10%) recovery for lenders in the event of a payment default; we expect the maturity to be eight to 10 years," said Standard & Poor's credit analyst Rivka Gertzulin. "The company also has an unrated $475 million revolving credit facility, of which $296 million is borrowed, and unrated $75 million senior secured notes," S&P said. "The ratings on AmSurg reflect what we consider to be the company's 'significant' financial risk profile and 'weak' business risk profile (as our criteria define the terms). At the time of the transaction, we expect lease-adjusted debt leverage to be about 3.3x, after repayment of the revolving credit facility. However, our base case assumes that the company will borrow from its revolver again to fund the acquisitions of 15 separate centers currently under letters of intent. In this case, debt leverage will temporarily increase to about 4.5x (not including acquired EBITDA), but we expect it to decline to 3.8x by the end of 2013; liquidity is adequate. Our base case also assumes low single-digit same-center growth based on slightly positive increases in revenue per case and some growth in surgical volumes following employment trends. While we expect the reimbursement environment to remain slightly positive and EBITDA margins of around 17.5% to remain stable, third-party reimbursement risks (as owner and operator of surgical facilities) dominate the weak business risk profile. We also assume $250 million of acquisitions in 2012 and $100 million in 2013 at a purchase multiple of 7x EBITDA. In 2011 and 2010, the company used $239 million and $54 million on acquisitions. We expect debt leverage to be 3.8x and funds from operations to debt to be about 20% at the end of 2013. AmSurg owns and operates 229 ambulatory surgery centers in 35 states with some geographic concentration in California, Arizona, Maryland, Florida, and Texas," S&P said. "The remaining revenue is from multispecialty centers (32%) and ophthalmology (13%). Over the longer term, we expect AmSurg to further diversify as it acquires more multispecialty surgery centers. Its peers, United Surgical Partners, Surgical Care Affiliates, and Symbion are more diversified in areas of treatment specialty. Still, given the key reimbursement risks that these companies face, we consider them to also have weak business risk profiles," S&P said. "The significant financial risk profile reflects pro forma debt leverage of 3.3x at the time of the transaction and expected leverage at 3.8x at the end of 2013, assuming debt-financed acquisitions. For purposes of calculating leverage, we consider EBITDA after distributions to minority interests. To adjust for leases, we are capturing 51% of the reported lease obligation, given that AmSurg generally does not guarantee the minority owner (physicians) portion of the operating lease," S&P said. ANDERSON NEWS: Lied About Meeting in Antitrust Suit, Time Says -------------------------------------------------------------- Ben James at Bankruptcy Law360 reports that Time Inc. and others accused of sinking Anderson News LLC urged a New York federal court Monday to sanction Anderson for alleging in its recent antitrust complaint the occurrence of a conspiratorial meeting that the defendants called a "sheer fabrication." Time, Hudson News Distributors LLC, Hearst Communications Inc., Rodale Inc. and other defendants asked the court to award sanctions and strike the 63rd paragraph from the amended complaint Anderson News filed Sept. 7, according to Bankruptcy Law360. About Anderson News Anderson News LLC is a sales and marketing company for books and magazines. Anderson News ceased doing business in February 2009, and was the subject of an involuntary bankruptcy filing (Bankr. D. Del. 09-_____) on March 2, 2009, on which an order for relief was entered on Dec. 30, 2009. The publishing companies claimed that Anderson News owes them a combined $37.5 million. Anderson News converted the case to a voluntary chapter 11 case on the same day. ARCAPITA BANK: Can Move Ahead With $125-Mil. Loan From Fortress --------------------------------------------------------------- Joseph Checkler at Dow Jones' Daily Bankruptcy Review reports that a judge said Bahrain's Arcapita Bank can move forward with a historic bankruptcy loan from Fortress Investment Group LLC. The Debtor first signed a deal for $150 million of Shari'ah compliant financing with Silver Point Finance LLC. However, the Debt later received a binding commitment from Fortress Credit Corp. to provide $100 million in Shari'ah compliant financing, which, subject to confirmatory due diligence, may be upsized to $150 million, which is substantially better terms than those offered by Silver Point. The Debtors point out that the Fortress deal contains several material advantages over the Silver Point financing. They point out that the Fortress deal: (i) does not condition the initial $100 million of the Fortress commitment on due diligence or internal credit committee approval, (ii) provides for a lower commitment fee, a lower profit and a substantially lower unused line fee, and (iii) provides that (a) the Debtors may actively seek out alternative proposals, and (b) Fortress will have the right to match the terms of any alternative transaction, with no termination fee becoming payable unless the Debtors fail to provide Fortress an opportunity to match. The Debtors also point out: -- The scope of what constitutes a "Material Adverse Change" has been narrowed, reducing uncertainty regarding the Debtors' ability to access funds under the Fortress Facility. -- Fortress can terminate the deal only under a more limited set of circumstances; for example, the Debtors revising the budget in such a way that the Debtors will not borrow the full amount of the Fortress Facility does not allow Fortress to terminate the financing commitment. -- The Debtors have a contractual right to notify Fortress to cease performing confirmatory due diligence in connection with the additional commitment of $50 million (which would otherwise increase the Fortress Commitment from $100 million to $150 million), potentially reducing the profit and fees to be paid by the estates. The hearing on the motion will be held on Nov. 5, 2012, at 2:00 p.m. A copy of the Fortress Commitment Letter is available at: http://bankrupt.com/misc/arcapita.doc610.pdf About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., later filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group has roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. ARCAPITA BANK: Withdraws London Listing of PointPark Properties --------------------------------------------------------------- David French at Reuters reports that Arcapita has withdrawn a planned London listing of its PointPark Properties (P3) unit, highlighting valuation gaps still exist between sellers and investors despite renewed life in the European IPO market. The report says P3, which has 46 warehouse properties across Europe, had hoped to raise around 250 million pounds ($402.8 million) through the London IPO, which was announced last month. The report relates the money raised from the listing would be used to acquire a property portfolio from Arcapita worth 760.1 million euros ($984.9 million), with the rest of the purchase funded through a 15% equity stake being issued in the firm to Arcapita. P3 will continue to manage the portfolio on behalf of its private equity owner while Arcapita decides its next move, which could range from reviving the IPO at a later date to a private sale, the banking source said. The report says the offering was being run by Credit Suisse and Deutsche Bank. In March, Arcapita became the first Gulf entity to file for Chapter 11 bankruptcy protection in the United States, after it was threatened with legal action if it did not repay a hedge fund in full. The report notes the bankruptcy filing may have helped contribute to the lower valuation which investors placed upon P3 compared with Arcapita. 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. ATHABASCA OIL: S&P Assigns 'CCC+' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' long-term corporate credit rating to Calgary, Alta.-based upstream producer Athabasca Oil Corp. (AOC). The outlook is developing. "At the same time, Standard & Poor's assigned its 'B' issue-level rating to The company's proposed senior secured second-lien bonds, with a '1' recovery rating, indicating an expectation of very high (90%-100%) recovery for debtholders in a default scenario," S&P said. "Our estimated enterprise value for AOC at the time of our simulated default is substantially higher than its expected obligations, so pro forma this bond issue, we believe there is sufficient value inherent in the company's asset base to provide full recovery," said Standard & Poor's credit analyst Michelle Dathorne. "Nevertheless, in our opinion, the risk profile associated with AOC's asset base is different from those of its oil sands peer group, given the very high proportion of contingent resources, relative to proven and probable reserves, in the company's upstream portfolio," Ms. Dathorne added. "The ratings on AOC reflect Standard & Poor's view of the company's regionally focused upstream operations, its small (albeit growing) production base, the associated weak forecasted cash flow generation, and inability to internally fund its stated conventional and oil sands growth objectives. We believe that offsetting these weaknesses somewhat are AOC's ability to sell portions of its vast undeveloped acreage and its liquidity position, which we believe is enhanced by both its proposed C$600 million senior secured bond issue; and the company's ability to sell its 40% interest in the Dover property through its put-call agreement with its joint venture partner, Phoenix Energy Holdings Ltd. (previously Cretaceous Oilsands Holdings Ltd.; a wholly owned subsidiary of PetroChina International Investment Co. Ltd.)," S&P said. "AOC focuses on the development of conventional oil and gas and in-situ bitumen. It operates two business segments: the light oil division and thermal oil division. AOC's conventional oil and gas operations are concentrated in northwest Alberta, and its bitumen resources are in Dover, Dover West, Hangingstone, Birch, and Grosmont (all in the Athabasca oil sands fairway)," S&P said. "The developing outlook reflects Standard & Poor's view that, based on the company's prospective competitive position, there is almost an equal likelihood of its credit profile strengthening or deteriorating during our forecast period," S&P said. "If AOC's production and cash flow profile strengthen in the future, we believe the company's business and financial risk profiles could support a 'B-'rating, assuming debt remains relatively stable. The company's cash flow protection metrics should strengthen materially as cash flows continue increasing relative to fairly stable debt levels. We believe AOC should be able to continue increasing its conventional oil and gas production as it ramps up the development of the assets in its light oil division. Although forecast FFO will likely remain well below our estimated near- and medium-term capital expenditures for the company, cash flow protection metrics should strengthen by year-end 2013 and beyond. Under our assumptions, we believe AOC's fully adjusted debt-to-EBITDA could trend below 6.5x by year-end 2013. If the company is able to continue improving its cash flow protection metrics, as it increases its oil and gas production, we would raise the corporate credit rating to 'B-'," S&P said. "Conversely, we believe the company's credit profile is also vulnerable to near-term deterioration, because the small scale of its operations limits its ability to absorb unexpected adverse events, which we believe could occur due to the oil and gas industry's inherent volatility. Furthermore, AOC's prospective liquidity relies heavily on anticipated asset sales and its proposed debt issuance, so we believe the company will have limited ability to fund material cost overruns if capital expenditures increase above the levels expected during 2012-2014. As a result, if the company's liquidity position were to weaken materially, such that it would not be able to increase or sustain its operations, we would lower the ratings," S&P said. AXESSTEL INC: Reports $2.1 Million Net Income in Third Quarter -------------------------------------------------------------- Axesstel, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $2.12 million on $16.32 million of revenue for the three months ended Sept. 30, 2012, compared with net income of $1.30 million on $17.06 million of revenue for the same period a year ago. Axesstel reported net income of $3.49 million on $43.89 million of revenue for the nine months ended Sept. 30, 2012, compared with net income of $80,616 on $37.23 million of revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $14.88 million in total assets, $22.70 million in total liabilities and a $7.82 million total stockholders' deficit. Clark Hickock, chief executive officer of Axesstel, said, "Our strong third quarter and year-to-date 2012 performance is a significant indication of the progress we have made and the momentum ahead for the business in 2013 and beyond. We are on track to achieve our key operating goals for 2012, posting consistent quarterly profitability and year-over-year revenue growth. We also delivered on our commitments to improve our working capital position and reduce our cost of capital this quarter. Our business model of customer driven innovation and extension of our product footprint is delivering value for our stockholders." "Because of our net losses prior to Q3 2011, and negative working capital position, our independent auditors, in their report on our financial statements for the year ended December 31, 2011, expressed substantial doubt about our ability to continue as a going concern," the Company said in its quarterly report for the period ended Sept. 30, 2012. As reported in the TCR on Feb. 23, 2012, Gumbiner Savett Inc., in Santa Monica, Calif., expressed substantial doubt about Axesstel'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 although the Company generated net income in 2011, the Company has historically incurred substantial losses from operations and the Company may not have sufficient working capital or outside financing available to meet its planned operating activities over the next twelve months. "Additionally, there is uncertainty as to the impact that the worldwide economic downturn may have on the Company's operations." A copy of the Form 10-Q is available for free at: http://is.gd/OLII2O About Axesstel Axesstel Inc., based in San Diego, Calif., develops fixed wireless voice and broadband access solutions for the worldwide telecommunications market. The Company's product portfolio includes fixed wireless phones, wire-line replacement terminals, and 3G and 4G broadband gateway devices used to access voice calling and high-speed data services. B+H OCEAN: Files First Amended Joint Plan of Reorganization ----------------------------------------------------------- BankruptcyData.com reports that B+H Ocean Carriers filed with the U.S. Bankruptcy Court a First Amended Joint Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, "The Plan constitutes a joint plan of reorganization for the eleven Debtors. Although the Chapter 11 Cases are jointly administered pursuant to an order of the Bankruptcy Court, the Plan does not provide for the substantive consolidation of the Debtors' Estates. The Plan's overall objective is to liquidate and Distribute all Assets of the Debtors to holders of Allowed Claims and Allowed Unclassified Claims in satisfaction of the Debtors' obligations . . ." About B+H Ocean Carriers B+H Ocean Carriers Ltd. is an international ship-owning and operating company that owns, through subsidiaries, a fleet of four product-suitable Panamax combination carriers capable of transporting both wet and dry bulk cargoes, along with a 50% interest in an additional combination carrier. B+H Ocean Carriers and its subsidiaries filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 12-12356) on May 30, 2012. The Debtors disclosed assets of US$4.52 million and liabilities of $46.09 million as of the Chapter 11 filing. John H. Hall, Jr., Esq., at Pryor & Mandelup, L.L.P., in New York, serves as bankruptcy counsel for the Debtors. BAKERS FOOTWEAR: Court Approves Liquidation Deal With SB, Tiger --------------------------------------------------------------- Bankruptcy Judge Charles E. Rendlen in St. Louis, Missouri, on Nov. 8 issued an 18-page order permitting Bakers Footwear Group Inc. to enter into and perform under an agency agreement with a joint venture consisting of SB Capital Group, LLC and Tiger Capital Group, LLC; conduct closing sales at 150 of the Debtor's retail stores and its distribution center; and abandon unsold assets of de minimis value. All amounts payable by the Liquidation Agent under the Agency Agreement will be paid to Crystal Financial LLC for application (a) first, to any outstanding obligations on the Pre-Petition Credit Agreement; and (b) second, to any outstanding obligations on the DIP Credit Agreement. After all such obligations have been fully and unconditionally repaid, any additional amounts payable by the Agent under the Agency Agreement will be paid to the Debtor. Bakers faces a Nov. 16 deadline to consummate either (a) a replacement debtor-in-possession financing facility with Salus Capital Partners, LLC or its designee, or (b) an assignment of the DIP Credit Agreement, and re-designation of the "Agent" from the Lender to Salus on terms and conditions satisfactory to the Lender, in its exclusive discretion. Otherwise, Bakers will exercise a put option to liquidate inventory at its remaining 63 stores. If the Debtor exercises that option, the Debtor and the Agent will enter into a supplemental agency agreement. Salus is providing an $8.5 million loan to support Bakers' reorganization. Lisa Brown at St. Louis Post-Dispatch reports that Bakers is scrambling to complete a restructuring plan that will appeal to creditors. If that plan is rejected, the company will have no choice but to close all its stores. According to the Post-Dispatch, under the latest plan, Bakers has identified at least 151 stores that it intends to close nationwide and liquidate the merchandise, furniture and fixtures during this holiday season. Bakers previously said it planned to close only dozens of stores by year's end to pay off creditors. According to the report, Bakers plans to hold store-closing sales between Nov. 9 and Dec. 31 at the 151 stores slated for closure, to coincide with the holiday shopping season. The report recounts Bakers had an agreement to sell as many as 52 of its stores to Canadian-based footwear chain Aldo Group, but after Bakers filed for bankruptcy, Aldo wanted out. The 151 stores on Bakers' closure list include the stores that were to be sold to Aldo. Bakers has said it intends to force Aldo to follow through with the deal. According to the report, in September, its lender, Crystal Financial, submitted a notice of acceleration of indebtedness and termination of its credit agreement with Bakers after a default. Bakers was delisted from the NASDAQ in 2010 and sold its Wild Pair trademark for nearly $4 million last year. Crystal may be reached at: Evren Ozargun CRYSTAL FINANCIAL LLC Two International Place, 17th Floor Boston, MA 02110 E-mail: eozargun@crystalfinco.com The Liquidation Agent may be reached at: Robert Raskin SB CAPITAL GROUP, LLC 1010 Northern Boulevard, Suite 340 Great Neck, NY 11021 Tel: (516) 829-2400 E-mail: rraskin@sbcapitalgroup.com - and - Steve Goldberger Dan Kane TIGER CAPITAL GROUP, LLC 84 State Street, Suite 420 Boston, MA 20109 Tel: (617) 523-5001 Fax: (617) 523-3007 E-mail: sgoldberger@tigergroupllc.com dkane@tigergroupllc.com About Bakers Footwear Bakers Footwear Group Inc., a mall-based retailer of shoes for young women, filed for bankruptcy protection (Bankr. E.D. Mo. Case No. 12-49658) in St. Louis on Oct. 3, 2012, after announcing a plan to close stores and reduce costs. Bakers was founded in St. Louis in 1926 as Weiss-Kraemer, Inc., later renamed Weiss and Neuman Shoe Co., a regional chain of footwear stores. In 1997, Bakers was acquired principally by its current chief executive officer, Peter Edison, who had previously served in various senior management positions at Edison Brothers Stores Inc. In June 1999, Bakers purchased selected assets of the "Bakers" and "Wild Pair" footwear retailing chains from the bankruptcy estate of Edison Brothers. The "Bakers" footwear retailing chain was founded in 1924 and is the third-oldest soft goods retail concept still in operation in the United States. In February 2001, the Debtor changed its name to Bakers Footwear Group, Inc. In February 2004, Bakers conducted an initial public offering of its common stock. Bakers' common stock is quoted under the ticker symbol "BKRS" on the, the OTC Markets Group's quotation platform. As of the Petition Date, Bakers operates roughly 215 stores nationwide. Bankruptcy Judge Charles E. Rendlen III presides over the case. Brian C. Walsh, Esq., David M. Unseth, Esq., and Laura Uberti Hughes, Esq., at Bryan Cave LLP, serve as the Debtor's counsel. Alliance Management serves as financial and restructuring advisors. Donlin, Recano & Company, Inc., serves as claims agent. The petition was signed by Peter A. Edison, chief executive officer and president. The Company's balance sheet at April 28, 2012, showed $41.90 million in total assets, $59.49 million in total liabilities and a $17.59 million total shareholders' deficit. Counsel for Crystal Financial, the DIP Lender, are Donald E. Rothman, Esq., at Riemer & Braunstein LLP; and Lisa Epps Dade, Esq., at Spencer, Fane, Britt & Brown, LLP. The U.S. Trustee has appointed 11 members to the official committee of unsecured creditors. Bradford Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Committee. BAKERS FOOTWEAR: Wins May 1 Extension of Lease Decision Deadline ---------------------------------------------------------------- At the behest of Bakers Footwear Group, Inc., the Bankruptcy Court extended the Debtor's deadline to decide whether to assume or reject unexpired leases of nonresidential real property. The period within which the Debtor may assume or reject any or all of the Leases is extended, pursuant to 11 U.S.C. Sec. 365(d)(4), through and including the earlier of (a) May 1, 2013, and (b) the date of the entry of an order confirming a plan. The Extension Order will be without prejudice to (a) the right of the Debtor to seek additional extensions of the period within which to assume or reject the Leases in accordance with requirements of 11 U.S.C. Sec. 365(d)(4(B)(ii), or (b) the right of any Landlord to request, at any time, a shortening or termination of the period within which the Debtor may assume or reject a specific Lease. About Bakers Footwear Bakers Footwear Group Inc., a mall-based retailer of shoes for young women, filed for bankruptcy protection (Bankr. E.D. Mo. Case No. 12-49658) in St. Louis on Oct. 3, 2012, after announcing a plan to close stores and reduce costs. Bakers was founded in St. Louis in 1926 as Weiss-Kraemer, Inc., later renamed Weiss and Neuman Shoe Co., a regional chain of footwear stores. In 1997, Bakers was acquired principally by its current chief executive officer, Peter Edison, who had previously served in various senior management positions at Edison Brothers Stores Inc. In June 1999, Bakers purchased selected assets of the "Bakers" and "Wild Pair" footwear retailing chains from the bankruptcy estate of Edison Brothers. The "Bakers" footwear retailing chain was founded in 1924 and is the third-oldest soft goods retail concept still in operation in the United States. In February 2001, the Debtor changed its name to Bakers Footwear Group, Inc. In February 2004, Bakers conducted an initial public offering of its common stock. Bakers' common stock is quoted under the ticker symbol "BKRS" on the, the OTC Markets Group's quotation platform. As of the Petition Date, Bakers operates roughly 215 stores nationwide. Bankruptcy Judge Charles E. Rendlen III presides over the case. Brian C. Walsh, Esq., David M. Unseth, Esq., and Laura Uberti Hughes, Esq., at Bryan Cave LLP, serve as the Debtor's counsel. Alliance Management serves as financial and restructuring advisors. Donlin, Recano & Company, Inc., serves as claims agent. The petition was signed by Peter A. Edison, chief executive officer and president. The Company's balance sheet at April 28, 2012, showed $41.90 million in total assets, $59.49 million in total liabilities and a $17.59 million total shareholders' deficit. Counsel for Crystal Financial, the DIP Lender, are Donald E. Rothman, Esq., at Riemer & Braunstein LLP; and Lisa Epps Dade, Esq., at Spencer, Fane, Britt & Brown, LLP. The U.S. Trustee has appointed 11 members to the official committee of unsecured creditors. Bradford Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Committee. BAKERS FOOTWEAR: Proposes Procedures for Rejecting Leases --------------------------------------------------------- Bakers Footwear Group, Inc., is asking the Bankruptcy Court: -- to approve procedures for rejection of unexpired leases of non-residential real property, and -- for authority to reject unexpired leases of non- residential real property pursuant to the procedures. The Rejection Procedures allows Bakers to make its final decision with respect to rejection of any Lease on five business days' notice so long as the Rejection Procedures are followed. The Debtor said adoption of the Rejection Procedures represents (a) a sound exercise of the Debtor's business judgment, and (b) a fair balancing of the need of a Landlord for certainty with the Debtor's need to move quickly and to cut off the needless accrual of administrative charges for which the estate will be receiving no benefit. In addition, the Rejection Procedures will save substantial legal expense and Court time that possibly would otherwise be incurred if multiple hearings were held on separate motions with respect to each Lease that the Debtor determines should be rejected. The Debtor believes the proposed Rejection Procedures will enable the Debtor to minimize unnecessary post-petition obligations and will provide Landlords with adequate notice of proposed rejections and abandonments and an opportunity to object to such relief within a definitive time period. A hearing on the request is set for Nov. 27. About Bakers Footwear Bakers Footwear Group Inc., a mall-based retailer of shoes for young women, filed for bankruptcy protection (Bankr. E.D. Mo. Case No. 12-49658) in St. Louis on Oct. 3, 2012, after announcing a plan to close stores and reduce costs. Bakers was founded in St. Louis in 1926 as Weiss-Kraemer, Inc., later renamed Weiss and Neuman Shoe Co., a regional chain of footwear stores. In 1997, Bakers was acquired principally by its current chief executive officer, Peter Edison, who had previously served in various senior management positions at Edison Brothers Stores Inc. In June 1999, Bakers purchased selected assets of the "Bakers" and "Wild Pair" footwear retailing chains from the bankruptcy estate of Edison Brothers. The "Bakers" footwear retailing chain was founded in 1924 and is the third-oldest soft goods retail concept still in operation in the United States. In February 2001, the Debtor changed its name to Bakers Footwear Group, Inc. In February 2004, Bakers conducted an initial public offering of its common stock. Bakers' common stock is quoted under the ticker symbol "BKRS" on the, the OTC Markets Group's quotation platform. As of the Petition Date, Bakers operates roughly 215 stores nationwide. Bankruptcy Judge Charles E. Rendlen III presides over the case. Brian C. Walsh, Esq., David M. Unseth, Esq., and Laura Uberti Hughes, Esq., at Bryan Cave LLP, serve as the Debtor's counsel. Alliance Management serves as financial and restructuring advisors. Donlin, Recano & Company, Inc., serves as claims agent. The petition was signed by Peter A. Edison, chief executive officer and president. The Company's balance sheet at April 28, 2012, showed $41.90 million in total assets, $59.49 million in total liabilities and a $17.59 million total shareholders' deficit. Counsel for Crystal Financial, the DIP Lender, are Donald E. Rothman, Esq., at Riemer & Braunstein LLP; and Lisa Epps Dade, Esq., at Spencer, Fane, Britt & Brown, LLP. The U.S. Trustee has appointed 11 members to the official committee of unsecured creditors. Bradford Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Committee. BEALE STREET BLUES: Restaurant Said to Cease Operation ------------------------------------------------------ The Las Vegas Review-Journal reports that employees who asked not to be identified said the B.B. King's Blues Restaurant & Club at The Mirage will shut Nov. 18. The report also relates that S. Tommy Peters, manager of club owner of Beale Street Blues Company Las Vegas LLC, said in papers filed in U.S. Bankruptcy Court that a September ruling in the company's Chapter 11 case had severely crimped revenues. The Mirage was allowed to keep the charges that patrons put on their room tabs, called recoupment, to pay down unpaid bills that predate the bankruptcy. "Now that the Mirage is withholding all of the room charges, it has destroyed (B.B. King's) cash flow," Mr. Peters said. The report notes that, according to Mirage attorneys, B.B. King's ran up at least $114,000 in unpaid union obligations and $223,000 in sales and taxes during the summer, even though it was supposed to stay current. The report says the Memphis-based parent company is no longer willing to put money into the local club. Beale Street Blues Company Las Vegas LLC owns the B.B. King's Blues Club restaurant and live music club at the Mirage hotel- casino in Las Vegas. Beale Street filed a Chapter 11 petition (Bankr. W.D. Tenn. Case No. 11-21619) in Memphis, Tennessee, on Feb. 16, 2011. Jonathan E. Scharff, Esq., at Harris Shelton Hanover Walsh, PLLC, in Memphis, serves as counsel to the Debtor. Beale Street disclosed assets of $2.5 million and liabilities of $3.8 million. The Las Vegas club and restaurant is part of a Memphis-based group of B.B. King's clubs named for the music legend. The other B.B. King's -- which are not part of the bankruptcy -- are in Memphis, Nashville, Orlando and West Palm Beach, Fla. BERNARD L. MADOFF: Investors Settle Class Action for $80.3MM ------------------------------------------------------------ Stewart Bishop at Bankruptcy Law360 reports that Fairfield Greenwich Group, a prominent controller of feeder funds to imprisoned Ponzi schemer Bernie Madoff, and others on Tuesday settled their part in a class action for as much as $80.3 million, brought by investors who claim the company and others misrepresented their investments in Madoff's scam. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) The SIPA Trustee has said that as of March 31, 2012, through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. The liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Uncertainty created by the appeals has limited Mr. Picard's ability to distribute recovered funds. Outstanding appeals include the $5 billion Picower settlement and the $1.025 billion settlement. BITI LLC: Court Approves Fuller & Lowenberg as Accountant --------------------------------------------------------- Biti LLC sought and obtained approval from the U.S. Bankruptcy Court to employ Fuller & Lowenberg & Co. CPAs P.C. as accountant. Oyster Bay, New York-based Biti LLC filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 12-74810) in New York on Aug. 2, 2012. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated assets and debts of at least $10 million. The Debtor owns 11.701 acres of property located at the south side of Skillman Street, west of Bryant Avenue, Village of Roslyn. Judge Robert E. Grossman presides over the case. Ronald M. Terenzi, Esq., at Stagg, Terenzi, Confusione, & Wabnik, LLP. In its petition, the Debtor scheduled $14,146,612 in assets and $12,900,070 in liabilities. The petition was signed by William Cohn, member. BITI LLC: Court OKs Rivkin Radler as Committee's Counsel -------------------------------------------------------- The Official Committee of Unsecured Creditors of Biti LLC sought and obtained approval from the U.S. Bankruptcy Court to retain Rivkin Radler LLP as counsel, nunc pro tunc to Sept. 5, 2012. The Committee will, among other things: -- advise the Committee with respect to its rights and duties in the Chapter 11 cases; -- assist and advise the Committee in its consultation with the Debtor in connection with the administration of the case; and -- assist the Committee in analyzing the claims of the Debtor's creditors, and negotiating with holders of claims and equity interests. The primary attorneys and paralegals in Rivkin Radler's Bankruptcy and Financial Restructuring Group designated to the represent the Committee are: Stuart I. Gordon (Partner), $485 per hour Matthew V. Spero (Senior Associate), $345 per hour, and Patricia (Paralegal), $125 per hour. About Biti LLC Oyster Bay, New York-based Biti LLC filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 12-74810) in New York on Aug. 2, 2012. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated assets and debts of at least $10 million. The Debtor owns 11.701 acres of property located at the south side of Skillman Street, west of Bryant Avenue, Village of Roslyn. Judge Robert E. Grossman presides over the case. Ronald M. Terenzi, Esq., at Stagg, Terenzi, Confusione, & Wabnik, LLP. In its petition, the Debtor scheduled $14,146,612 in assets and $12,900,070 in liabilities. The petition was signed by William Cohn, member. BLUE CITY: Oman's Sovereign Wealth Fund Bails Out Bondholders ------------------------------------------------------------- Camilla Hall, writing for The Financial Times, reports that a unit of the Oman Investment Fund, the Gulf country's sovereign wealth Fund, has offerd to buy "class B" subordinad notes of Blue City, a $20 billion beachside real estate development that stalled as the financial crisis took a grip. At 35 cents on the dollar, the offer gives investors a rare opportunity to walk away with cash as the oil-rich government steps in to clean up the mess. FT says the project, planned for 200,000 people, was a poster child of the pre-crisis boom. As investors poured into Dubai property, Oman's Blue City was a plan to attract both the region's wealthiest and those from further afield. BOMBARDIER INC: Moody's Affirms 'Ba2' CFR/PDR; Outlook Negative --------------------------------------------------------------- Moody's Investors Service affirmed Bombardier Inc.'s Ba2 Corporate Family rating, Ba2 Probability of Default rating and Ba2 Senior Unsecured ratings and changed its rating outlook to negative from stable. The company's Speculative Grade Liquidity rating was lowered to SGL-3 from SGL-2. "The outlook change and lowering of Bombardier's liquidity rating is driven by the company's higher than expected cash consumption in 2012 and our view that the company's negative cash flow trends will persist through 2013", said Darren Kirk, Moody's Vice President and Senior Credit Officer. "Bombardier is at the late stage of a high capital investment period which we expect will help improve its earnings and cash flow prospects beginning in 2014. However the company's current key credit metrics are stretched for its Ba2 rating and additional shortfalls to our cash flow expectations would lead to a ratings downgrade", added Kirk. Ratings Rationale Bombardier's Ba2 rating its driven by its significant scale and diversity, strong global market positions, natural barriers to entry and sizeable backlog levels in both its Aerospace and Transportation business segments. Moody's expects Bombardier will realize modest earnings growth and about $750 million in consolidated free cash flow consumption in 2013 due to lingering economic weakness affecting its Aerospace division, spending associated with the company's sizeable aerospace programs, ongoing margin pressure from recent problem contracts in its Transportation segment and a continuing weak level of cash advances from customers. Consequently, the company's adjusted leverage is likely to remain very high (currently 6.2x) over the 12 to 18 month ratings horizon. Execution risks related to the development of its new CSeries commercial aircraft are also incorporated in the rating and these risks have increased with the six month delay in the aircraft's first flight to June 2013. Bombardier's $2 billion in cash balances and $1.4 billion (USD equivalent) in total revolver availability is sufficient to fund $1 billion in aggregate cash consumption in the four quarters ending Q3/2013, based on Moody's expectations. Significant quarterly working capital swings and modest covenant constraints however cause Moody's to view Bombardier's liquidity as adequate rather than good. The outlook is negative because Bombardier has consumed more cash than Moody's expected in the past couple of years. A continuation of this trend would lead to a downgrade given that Bombardier's leverage is very high for the rating. Bombardier's rating could be downgraded if the CSeries is further delayed or if Bombardier's leverage is not expected to reduce below 6x through the ensuing 12-18 months with ongoing expected improvement beyond that timeframe. Further deterioration in the company's liquidity would also cause a downward rating action. An upgrade would require evidence of a sustained cyclical upturn in Aerospace, resolution of recent operational challenges in Transportation, the successful entry into service of the CSeries, with a growing order book and leverage sustained below 3.5x. As well, the company would need to improve and sustain its liquidity rating. The principal methodology used in rating Bombardier was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Montreal, Quebec, Canada, Bombardier is a globally diversified manufacturer of business and commercial jets as well as rail transportation equipment. Annual revenues total roughly $17 billion. BRAFFITS CREEK: Files List of 20 Largest Unsecured Creditors ------------------------------------------------------------ Braffits Creek Estates LLC filed with the U.S. Bankruptcy Court for the District of Nevada amended list of its largest unsecured creditors, disclosing: Name of Creditor Nature of Claim Amount of Claim ---------------- --------------- --------------- Kennedy Fundings, Inc. Bank Loan $28,860,000 2 university Plaza, Suite 402 Hacken Sack, NJ 07601 Iron County Treasurer $1,700,000 P.O. Box 369 Parowan, UT 84761 AT Asphalt Paving Inc. $732,029 1575 E 1300 S Washington, UT 84780 Guido Holdings, Inc. $660,164 9101 W Sahara No. 105 Las Vegas, NV 89117 McKittrick Properties LLC $417,583 717 E. Cobble Creek Drive Cedar City, UT 84721 Big Horn Basin $330,821 1575 Duneville Street Las Vegas, NV 89146 Gregg Wood Bank Loan $300,000 4760 S Highland Dr., Suite 122 Holladay, UT 84117 GPC, Inc. $300,000 4760 S. Highland No. 122 Holloday, UT 84117 R & W Excavating $297,360 P.O. Box 840830 Hilldale, UT 84784 Bridgewater Consulting Group $144,985 Ten Hospitality $115,000 Parowan Foothills $90,977 Utah Mountain Vistas, LLC $5,154 IRS $2,734 Kim Walker CPA $2,200 Walker JV $130 Braffits Creek disclosed a single claim -- $1.5 million owing to Iron County Treasurer -- in the prior iteration of the list of creditors. About Braffits Creek Estates Las Vegas, Nevada-based Braffits Creek Estates, LLC is a single asset real estate that owns raw land located 3200 Subdivision, in Iron County, Utah. The Company filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-19780) on Aug. 23, 2012. Bankruptcy Judge Bruce A. Markell presides over the case. David J. Winterton, & Assoc., Ltd., represents the Debtor's restructuring effort. The Debtor estimated assets at $10 million to $50 million, and debts at $1 million to $10 million. BRAFFITS CREEK: Files Schedules of Assets and Liabilities --------------------------------------------------------- Braffits Creek Estates LLC filed with the U.S. Bankruptcy Court for the District of Nevada its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $25,000,000 B. Personal Property $3,800 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $29,160,000 E. Creditors Holding Unsecured Priority Claims $1,720,735 F. Creditors Holding Unsecured Non-priority Claims $3,096,405 ----------- ----------- TOTAL $25,003,800 $33,959,140 A copy of the schedules is available for free at http://bankrupt.com/misc/BRAFFITS_CREEK_sal.pdf Las Vegas, Nevada-based Braffits Creek Estates, LLC is a single asset real estate that owns raw land located 3200 Subdivision, in Iron County, Utah. The Company filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-19780) on Aug. 23, 2012. Bankruptcy Judge Bruce A. Markell presides over the case. David J. Winterton, & Assoc., Ltd., represents the Debtor's restructuring effort. The Debtor estimated assets at $10 million to $50 million, and debts at $1 million to $10 million. CARTER REESE: Judge Fehling Won't Recuse Self --------------------------------------------- Bankruptcy Judge Richard E. Fehling declined to recuse himself from hearing and presiding over the Chapter 11 proceeding of Carter P. Reese and Sarah C. Reese. Judge Fehling held that none of "my contacts with Debtors over the past 15 years or so requires me to disqualify or recuse myself from involvement in this proceeding." Judge Fehling said he met the Reeses for the first time sometime in the late 1990s or early 2000s. He said he was aware at some time in the late 1990s or early 2000s that the Debtors had a business of assisting foreign students in the admission process for secondary schools and colleges in the United States. Judge Fehling's recollection of his prior contacts with the Debtors include visiting the Debtors' home at 84 Grandview Blvd., Wyomissing Hills, Berks County, Pennsylvania, some time in the late 1990s or early 2000s, for a social event. The judge said he has no recollection of any details of the event, i.e., whether it was a sit-down dinner, a reception, or some Other type of event. The judge also recalled that during a visit to the Debtors' home, he toured an upper floor and saw a display of antique toys shown in plexiglass-like cases. "Over the past 10-12 years, I have seen Debtors a half dozen times more or less at social or institutional charitable events throughout Berks County, at which our contacts/conversations were nothing more than exchanging pleasantries," Judge Fehling said. "At some time in the past two or three years, my wife and Mrs. Reese worked together to organize a birthday party for one of their mutual friends (who is also a friend of mine)." A copy of Judge Fehling's Nov. 6, 2012 statement Supporting Order Dated Nov. 2, 2012, is available at http://is.gd/UMyI0Ofrom Leagle.com. Carter P. Reese and Sarah C. Reese filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case No. 12-19376) on Oct. 2, 2012. CASH4GOLD: Gold Buying Firm Sold for $440,000 in Bankruptcy ----------------------------------------------------------- Fortune's Dan Primack reports that Cash4Gold, the metal refinery known for having MC Hammer rap its praises during the 2009 Super Bowl, is being sold for $440,000 to Direct Holdings Americas, the parent company of Time-Life, which is not affiliated with Time Inc., the publisher of Fortune. The assets to be sold include the company's domain name and client database. The deal is subject to bankruptcy court approval. Fortune says another bidder, Cash4GoldUSA, offered $200,000 for the assets. Fortune's Mr. Primack relates Cash4Gold is owned by Green Bullion Financial Services, the Pompano Beach, Fla.-based parent company, which raised $40 million in venture capital funding from firms like General Catalyst Partners and Highland Capital Partners. The report relates Cash4Gold used some of that money to finance the Super Bowl ad, which reportedly cost $2.4 million to broadcast and hundreds of thousands of dollars to produce. By the middle of 2010, however, both VC firms had written down their investment to nearly zero, and shortly thereafter exited the company altogether. Highland also was sued by one of Cash4Gold's former business partners for fraud and breaches of contract, but the case was later settled out of court. Fortune says the bankruptcy was filed in July. Fortune also reports insolvency manager Moecker & Associates was hired by the court to find a buyer. Moecker also appears to have helped continue fulfilling orders for Cash4Gold, as the actual company shut down operations and stopped even answering its phone. Fortune's Mr. Primack also reports that Cash4Gold's largest creditor was Euro RSCG, a marketing agency that had produced that old Super Bowl ad -- with an outstanding bill of $800,000 (the second-largest creditor was Google, which was owed around $115,000). The report relates multiple sources told Mr. Primack that Direct Holdings America purchased some or all of that outstanding Euro RSCG credit, which ultimately gave it greater bidding flexibility. The Huffington Post's Nate C. Hindman says Cash4Gold is a popular gold-buying company. The report recounts that Cash4Gold sought to capitalize on the down economy in 2008, when it launched a service that pays people to mail in their gold. According to The Huffington Post, the company's head of marketing told the Christian Science Monitor in 2009 that, "The entire economy is crumbling, and when that happens people below the line need cash." The head of marketing added that the firm had seen "a thousand percent" year-over-year growth. But, The Huffington Post relates, a barrage of lawsuits filed by Cash4Gold customers subsequently damaged the Florida-based firm's reputation, ultimately leading to its bankruptcy. Reports of gold packages that were shipped to the company and then mysteriously vanished in the mail contributed to the downfall. "I was duped, and the gold's gone," one angry customer told ABC earlier this year, according to The Huffington Post. CELANESE US: Moody's Rates $500MM Senior Unsecured Notes 'Ba2' -------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to $500 million of senior unsecured notes due 2022 to be issued by Celanese US Holdings LLC (CUSH), a wholly owned subsidiary of Celanese Corporation. Proceeds from the notes will be used to reduce amounts outstanding under the Term Loan C and pension funding. The existing Term Loan C matures in 2016 and is expected to have less than $1 billion remaining outstanding after the completion of this transaction. The outlook on all of Celanese's ratings is positive. Moody's affirmed the existing Ba2 Corporate Family Rating (CFR) and Speculative Grade liquidity (SGL) rating of SGL-1 at Celanese Corporation. Moody's also raised the rating on the senior unsecured debt at Celanese US Holdings LLC to Ba2 from Ba3 due to the decline in secured debt subsequent to this transaction. "Although management has indicated that it is seeking to move toward investment grade, their lack of targeted credit metrics or clear financial priorities continues to slow the company's progress." stated John Rogers, Senior Vice President at Moody's. Ratings Rationale Celanese's Ba2 CFR takes into account the company's size and leading global positions in the acetyl chain, with strong operational, geographical and product diversity. In addition, the company's elevated exposure to developing markets, along with on- going capital spending, bodes well for continued volume growth over the next several years. The rating is tempered by significant exposure to volatile petrochemical feedstocks, sizable debt-like liabilities and management's lack of targeted credit metrics for the firm. Although management has stated its desires to achieve an investment grade rating, its primary focus has been on sales and earnings growth. The company continues to maintain a large cash balance and reduce debt gradually. However, increases in pension liabilities and capitalized operating leases have slowed the improvement in Moody's adjusted financial metrics. The positive outlook reflects the assumption that management will provide greater clarity over its financial priorities and policies in 2013, which could trigger the move to a higher rating. Furthermore, Moody's believes that there is limited downside to the company's credit metrics despite a somewhat uncertain global economic environment. Any further decline in earnings and cash flow in 2013 should be partially offset by further modest debt reduction. Moody's noted that the company has reduced balance sheet debt by almost $500 million over the past two years. As of the twelve months ending September 30, 2012, the company had Debt/EBITDA of 3.9x, Net Debt/EBITDA of 3.2x, Retained Cash Flow/Debt of 20% and Retained Cash Flow/Net Debt of 24%. To the extent that Celanese's Debt/EBITDA falls to below 3.3 times and Retained Cash Flow/Debt remains near 20%, Celanese's ratings would be upgraded. Also, if management provides greater clarity over its financial priorities and targets, Moody's would consider the appropriateness of a higher rating. However, if operating performance is weaker than anticipated and Debt/EBITDA remains closer to 4.0x for an extended period, Moody's would likely return the outlook to stable. To the extent that Debt/EBITDA rises to over 4.0 times and Retained Cash Flow/Debt declined to below 15%, on a sustainable basis, Moody's would likely lower the company's rating. Celanese's SGL-1 Speculative Grade Liquidity rating is supported by a large cash balance of over $900 million, expected free cash flow generation in excess of $200 million over the next year and full availability under its $600 million revolving credit facility. Ratings assigned: Celanese US Holdings LLC $500 million guaranteed senior unsecured notes due 2022 at Ba2 (LGD4, 58%) Ratings upgraded: $400 million guaranteed senior unsecured notes due 2021 at Ba2 (LGD4, 58%) from Ba3 (LGD4, 61%) $600 million guaranteed senior unsecured notes due 2018 at Ba2 (LGD4, 58%) from Ba3 (LGD4, 61%) Senior unsecured shelf at (P)Ba2 from (P)Ba3 Ratings affirmed: Celanese Corporation Corporate Family Rating -- Ba2 Probability of Default Rating -- Ba2 Speculative Grade Liquidity assessment -- SGL-1 Outlook -- Positive Celanese US Holdings LLC Guaranteed senior secured revolver due 2015 and letter of credit facility due 2014 at Ba1 (LGD3, 32%) from (LGD3, 34%) Guaranteed senior secured term loan due 2016 at Ba1 (LGD3, 32%) from (LGD3, 34%) The principal methodology used in rating Celanese Corporation was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Celanese Corporation, headquartered in Dallas, Texas, is a leading global producer of acetyls, vinyl acetate monomer, emulsions, acetate tow and engineered thermoplastics. Celanese reported sales of $6.5 billion for the twelve months ended September 30, 2012. Celanese US Holdings LLC and Celanese Americas LLC are wholly owned subsidiaries and co-borrowers under the credit facilities. CELANESE US: S&P Affirms 'BB' Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' issue rating and '4' recovery rating to Celanese's proposed $500 million notes due 2022. "We also affirmed the 'BB' corporate credit rating on the company, as well as the 'BBB-' rating on the senior secured notes. We are maintaining our '1' recovery rating for the senior secured debt obligations, indicating our expectation of a very high (90% to 100%) recovery in the event of payment default. Also, we raised our rating on the senior unsecured notes to 'BB' and revised our recovery rating for both tranches of the unsecured notes to '4' from '5', indicating our expectation of an average (30% to 50%) recovery in the event of payment default," S&P said. "The company will use proceeds from the notes issuance to repay a portion of the outstanding term loans under the company's senior credit facilities, and to make a $100 million contribution to Celanese's U.S. pension plan," said credit analyst Liley Mehta. "The ratings on Celanese US Holdings LLC, a subsidiary of Celanese Corp., reflect our assessment of the company's business risk profile as 'satisfactory' and a financial risk profile we view as 'significant'." "The positive outlook reflects the company's above-par credit metrics, and our expectation of continued earnings growth over the next couple of years. Given its ongoing product innovation, geographic diversity, and efforts to boost productivity, we believe that Celanese can maintain its strong internal cash generation. We do not expect the company to make significant share repurchases or large acquisitions. We could raise the long-term ratings by one notch during the next several quarters if earnings and cash flow continue to increase, so that Celanese can preserve an FFO-to-total debt of 25% to 30% on sustained basis. This could happen if the firm maintains debt near current levels while achieving annual top-line growth of 5% to 10% and EBITDA margins improving by 100 to 200 basis points from current levels," S&P said. "On the other hand, we could revise the outlook to stable if FFO- to-total debt declines to less than 20% as a result of weaker end- market demand, greater-than-expected shareholder-friendly activity, or any large debt-financed acquisitions," S&P said. CELOTEX CORP: 11th Circ. Denies Challenge of Asbestos Deal ---------------------------------------------------------- Linda Chiem at Bankruptcy Law360 reports that the Eleventh Circuit on Tuesday rejected an appeal by six universities and colleges that challenged the sufficiency of an asbestos settlement with bankrupt Celotex Corp., saying the court lacked jurisdiction to review the bankruptcy court's order governing claims for the settlement trust. In a published opinion, the panel said the Eleventh Circuit was not the forum for the institutions to challenge the settlement amount they received from the trust created by the Chapter 11 bankruptcy of Celotex, and its subsidiary Carey Canada, Bankruptcy Law360 relates. About Celotex Corp. Thirty-seven colleges and universities filed an adversary proceeding (Bankr. M.D. Fla. Adv. Pro. No. 09-00558) against The Celotex Asbestos Settlement Trust created under The Celotex Corp.'s confirmed Chapter 11 plan, alleging that the truste and its trustees breached their fiduciary duties in connection with certain property damage claims. One university subsequently filed amended complaint as a "representative" for "class members" described in the amended complaint. The Trust moved to dismiss the amended complaint, and the Honorable Paul M. Glenn granted that request. The Celotex Corporation manufactured, marketed, and distributed building products. Carey Canada Inc. mined asbestos until it ceased operations in 1986. Celotex and Carey Canada sought chapter 11 protection (Bankr. M.D. Fla. Case No. 90-10016) on Oct. 12, 1990. At the time of the filing, Celotex and Carey Canada had been named as defendants in thousands of lawsuits filed by Asbestos Personal Injury Claimants, and in hundreds of lawsuits filed by Asbestos Property Damage Claimants. On Dec. 6, 1996, the Bankruptcy Court entered an Order Confirming the Modified Joint Plan of Reorganization for Celotex and Carey Canada. A principal feature of the confirmed Plan was the creation of the Asbestos Settlement Trust under 11 U.S.C. Sec. 524(g) "to address, liquidate, resolve, and disallow or allow and pay Asbestos Claims, which will operate in accordance with the Asbestos Claims Resolution Procedures." In re The Celotex Corporation, 204 B.R. 586, 602 (Bankr. M.D.Fla. 1996). CHATHAM PARKWAY: Case Summary & 8 Unsecured Creditors ----------------------------------------------------- Debtor: Chatham Parkway Self Storage, LLC 5801 Abercorn Street Savannah, GA 31405 Bankruptcy Case No.: 12-42153 Chapter 11 Petition Date: November 2, 2012 Court: U.S. Bankruptcy Court Southern District of Georgia (Savannah) Debtor's Counsel: Jesse C. Stone, Esq. MERRILL & STONE, LLC P.O. Box 129 Swainsboro, GA 30401 Tel: (478) 237-7029 Fax: (478) 237-9211 E-mail: bkymail@merrillstonehamilton.com - and ? Jon A. Levis, Esq. Merrill & Stone, LLC P.O. Box 129 Swainsboro, GA 30401 Tel: (478) 237-7029 Fax: (478) 237-9211 E-mail: bkymail@merrillstonehamilton.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its eight largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/gasb12-42153.pdf The petition was signed by Ben G. Farmer, manager. CHEM RX CORP: Former Execs Dodge Trustee's Suit Over 2007 Buyout ---------------------------------------------------------------- Maria Chutchian at Bankruptcy Law360 reports that U.S. District Judge Lewis A. Kaplan on Wednesday tossed a suit against the former executives of Chem Rx Corp. looking to avoid and recover allegedly fraudulent transfers in connection with a 2007 leveraged buyout of CRC's predecessor in interest. Judge Lewis A. Kaplan dismissed each count in the amended complaint, filed against former CEO Jerry Silva, his wife Rosalie Silva and his son Steven Silva, by the trustee of the CRC Litigation Trust, an entity created by a bankruptcy court. About Chem RX Corp. Long Beach, N.Y.-based Chem RX Corporation, aka Paramount Acquisition Corp. -- http://www.chemrx.net/-- is a major institutional pharmacy serving the New York City metropolitan area, as well as parts of New Jersey, upstate New York, Pennsylvania and Florida. The Company and five affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 10-11567) on May 11, 2010. Dennis A. Meloro, Esq., and Scott D. Cousins, Esq., at Greenberg Traurig, LLP, in Delaware, represent the Company in its restructuring. Cypress Holdings, LLC, is the Company's financial advisor. RSR Consulting, LLC, is the Company's chief restructuring officer. Brunswick Group LLP is the Company's public relations consultant. Grant Thornton LLP is the Company's independent auditor. Lazard Middle Market LLC is the Company's investment banker. Eichen & Dimeglio PC is the Company's tax advisor. Kurtzman Carson Consultants is the Company's claims and notice agent. Attorneys at White & Case and Fox Rothschild LLP serve as co-counsel to the Official Committee of Unsecured Creditors Chanin Capital Partners LLC serves as Restructuring and Financial Advisor for the Official Committee of Unsecured Creditors. The Company disclosed $169,690,868 in assets and $178,281,128 in debts as of Feb. 28, 2010. Chem Rx changed its name to CRC Parent Corp. following the sale of its business to PharMerica Corp. at a bankruptcy court-sanctioned auction. PharMerica paid $70.6 million and assumed specified liabilities. The deal enabled PharMerica to move into the New York and New Jersey markets. CHINA SHEN: Receives Non-Compliance Notice from NYSE MKT -------------------------------------------------------- China Shen Zhou Mining & Resources, Inc. received a letter from the NYSE MKT LLC advising that the Company currently is below certain of the Exchange's continued listing standards. The Exchange indicated that its review of the Company's Form 10-Q for the quarter ended June 30, 2012, indicates that the Company is not in compliance with Section 1003(a)(iv), which applies if a listed company has sustained losses that are substantial in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether the company will be able to continue operations and/or meet its obligations as they mature. The Company is afforded the opportunity to submit a plan of compliance to the Exchange by Nov. 30, 2012 that demonstrates the Company's ability to regain compliance with Section 1003(a)(iv) of the Company Guide by April 24, 2013. If the Company does not submit a plan of compliance, or if the plan is not accepted by the Exchange, the Company will be subject to delisting procedures as set forth in Section 1010 and Part 12 of the Company Guide. The Company believes it can provide the Exchange with a satisfactory plan by November 30, 2012, to show that it will be able to return to compliance with Section 1003(a)(iv) of the Company Guide. About China Shen Zhou China Shen Zhou Mining & Resources, Inc., -- http://www.chinaszmg.com/-- through its subsidiaries, is engaged in the exploration, development, mining, and processing of fluorite. CITY NATIONAL: Fitch Rates $175-Mil. Preferred Issuance at 'BB' --------------------------------------------------------------- Fitch Ratings has assigned a 'BB' rating to City National Corporations (CYN) $175 million non-cumulative perpetual preferred issuance. The coupon is fixed for life at 5.5% and callable after five years. The hybrid instrument is rated five notches lower than CYN's viability rating in accordance with Fitch's criteria 'Rating Bank Regulatory Capital and Similar Securities' dated Dec. 15, 2011. This reflects the designed loss-absorbing nature of the preferred stock as well as its non-cumulative or deferral feature. Proceeds of the offering are expected to be used to fund an upcoming debt maturity and for general corporate purposes. The following rating has been assigned. City National Corporation -- Non-cumulative preferred at 'BB'. COMMONWEALTH ADVISORS: SEC Charges Fund Manager for Hiding Losses ----------------------------------------------------------------- The Securities and Exchange Commission on Nov. 8 charged a hedge fund manager in Baton Rouge, La., with defrauding investors by hiding millions of dollars in losses suffered during the financial crisis from investments tied to residential mortgage-backed securities (RMBS). The SEC alleges that Walter A. Morales and his firm Commonwealth Advisors Inc. caused the hedge funds they managed to buy the lowest and riskiest tranches of a collateralized debt obligation (CDO) called Collybus. They sold mortgage-backed securities into the CDO at prices they had obtained four months earlier while knowing that the RMBS market had declined precipitously in the meantime. As the CDO investments continued to perform poorly, Morales instructed Commonwealth employees to conduct a series of manipulative trades between the hedge funds they advised (called cross-trades) in order to conceal a $32 million loss experienced by one of the funds in its Collybus investment. Morales and Commonwealth lied to investors about the amount and value of mortgage-backed assets held in the hedge funds, and they created phony internal documents to justify their false valuations. "Morales and Commonwealth Advisors concealed significant hedge fund losses from investors, including pension fund investors, instead of owning up to them and facing the consequences," said Robert Khuzami, Director of the SEC's Division of Enforcement. "Investors put their fundamental trust in the hands of their investment adviser, and they deserve better than being manipulated and lied to through deceptive trades and phony documents." According to the SEC's complaint filed in U.S. District Court for the Middle District of Louisiana, Commonwealth's hedge fund clients included pension funds and individual investors. Morales and Commonwealth invested a significant portion of hedge fund assets in RMBS. When the mortgage markets began to decline dramatically in 2007, bond rating agencies began to aggressively downgrade subprime RMBS. Therefore, Commonwealth clients were sustaining heavy investment losses and Morales knew those losses would probably continue. The SEC alleges that rather than come clean with investors, Morales directed Commonwealth to execute more than 150 deceptive cross-trades from two hedge funds they advised to another one of their hedge funds in June 2008 at prices below Commonwealth's own valuation for those securities. After the trades, Morales directed a Commonwealth employee to mark the securities at fair market value, which created a fraudulent $19 million gain for the acquiring hedge fund at the expense of the funds that sold. Morales ordered the cross-trades even though Commonwealth had represented in forms filed with the SEC that it would not execute such trades between these hedge fund clients. Moreover, when the trades raised concern from the prime broker, Morales falsely represented that the transactions were for a legitimate business purpose and at prevailing market prices. The SEC further alleges that Morales deceived Commonwealth's largest investor about its exposure to the CDO. Morales agreed to limit the investor's exposure to Collybus through its investment in a particular Commonwealth hedge fund to 10 percent of that hedge fund's equity. Morales, however, abided by this agreement only temporarily, and the investor's exposure to Collybus more than doubled by mid-2008. After the large investor learned that Commonwealth was not following its stated valuation procedures, the investor requested valuation committee meeting minutes to review. Morales prepared false minutes that were delivered to the investor purporting to describe meetings that never occurred. The SEC's complaint charges Morales and Commonwealth with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8. The SEC also alleges that Commonwealth violated Sections 204, 206(4), and 207 of the Advisers Act and Rules 204-2, 206(4)-2, and 206(4)-7, and that Morales aided and abetted Commonwealth's violations of Section 10(b) of the Exchange Act, Rule 10b-5, and Sections 204, 206(1), 206(2), 206(4), and 207 of the Advisers Act and Rules 204-2, 206(4)-2, 206(4)-7, and 206(4)-8. Morales was a controlling person of Commonwealth pursuant to Section 20(a) of the Exchange Act, and is therefore liable as a control person for Commonwealth's violations of the Exchange Act. The SEC's investigation, which is continuing, has been conducted by Gary M. Zinkgraf, Carol E. Schultze, Jacob D. Krawitz, and Paul Gunson in coordination with members of the SEC Enforcement Division's Structured and New Products Unit and Asset Management Unit. Matthew Rossi and Jan Folena will handle the SEC's litigation. CONDOR DEVELOPMENT: Dec. 7 Hearing on Motion for Relief from Stay ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Washington continued until Dec. 7, 2012, at 9:30 a.m., the hearing to consider EastWest Bank's motion for relief from the automatic stay. Objections, if any, are due Nov. 30. Condor Development LLC, aka Ciara Inn and Condor Management Group, operates the Comfort Inn Suites, a hotel located at Seatac, Washington. Condor Development filed a Chapter 11 petition (Bankr. W.D. Wash. Case No. 12-13287) on March 30, 2012, in Seattle. In its schedules, the Debtor disclosed $16.4 million in total assets and $9.11 million in total liabilities. Affiliate Seattle Group also filed for Chapter 11 protection (Bankr. Case No. 12-13263) on March 30, 2012. The Debtor disclosed $15,501,088 in assets and $10,409,935 in liabilities as of the Chapter 11 filing. CONSOLIDATION SERVICES: Incurs $186,300 Net Loss in 3rd Quarter --------------------------------------------------------------- Consolidation Services, Inc., reported a net loss of $186,341 on $24,870 of oil and gas revenues for the three months ended Sept. 30, 2012, compared with a net loss of $159,307 on $74,846 of oil and gas revenues for the same period ended Sept. 30, 2011. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $533,426 on $100,131 of oil and gas revenues, compared with a net loss of $1.1 million on $239,973 of oil and gas revenues for the same period ended Sept. 30, 2011. The Company's general and administrative expenses for the nine months ended Sept. 30, 2012, and 2011, were $486,732 and $1.1 million, respectively. The decrease is primarily attributable to the reduction in stock issued to officers of $12,000 incurred in 2012 (approximately $643,000 in 2011). The Company's balance sheet at Sept. 30, 2012, showed $1.8 million in total assets, $1.2 million in total liabilities, and stockholders' equity of $582,957. The Company has sustained recurring losses from operations including a net loss for the nine months ended Sept. 30, 2012, of $533,426. "Further, the Company has inadequate working capital to maintain or develop its operations, and is dependent upon funds from lenders, investors and the support of certain stockholders. These factors raise substantial doubt about the ability of the Company to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/2a857l About Consolidation Services Las Vegas, Nev.-based Consolidation Services, Inc., is solely engaged in the maintenance and production of its oil and gas wells in Kentucky and Tennessee. The Company also owns oil and gas mineral rights on approximately an additional 12,000 acres in Eastern Kentucky. * * * GBH CPAs, PC, in Houston, Tex., expressed substantial doubt about Consolidation Services' ability to continue as a going concern, following the Company's results for the year ended Dec. 31, 2011. The independent auditors noted that the Company sustained recurring losses from operations, has inadequate working capital to maintain or develop its operations, and is dependent upon funds from lenders, investors and the support of certain stockholders. CONTEC HOLDINGS: Emerges From Chapter 11 Bankruptcy --------------------------------------------------- BankruptcyData.com reports that CHL's Joint Modified Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan on October 4, 2012, under which the Debtors' $350 million long-term debt will be reduced to approximately $52.5 million. 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. CRYOPORT INC: Appoints Jerrell Shelton as President and CEO ----------------------------------------------------------- Cryoport, Inc., announced that Jerrell Shelton has been named President and Chief Executive Officer, effective Nov. 5, 2012. Mr. Shelton joined the Company's Board of Directors on Oct. 22, 2012. "Following his appointment to the Board last month, Jerry and the other directors reviewed the Company's requirements at the executive level, and concluded that his background and skills were the right fit for the position," said Stephen Wasserman, Cryoport's Chairman. "Jerry has led several companies to success, and we believe he has the strategic vision and hands-on management experience to do the same at Cryoport." Mr. Shelton commented, "Cryoport is addressing a large opportunity as the premier solution for deep frozen cold-chain logistics in the life science industries. Its solutions afford new and reliable alternatives, and its partnerships with leading companies in various biologics, in-vitro fertilization, cell lines, stem cells, and other commodities requiring a deep frozen solution is unsurpassed. "Cryoport's revolutionary and proprietary portal, providing a robust dashboard of information from the time materials are loaded through successful delivery, distinguishes it as the undisputed leader in deep frozen logistics. One of the additional things that has impressed me is the recognition of Cryoport's technology by FedEx and the partnership that has developed between the two companies. With great anticipation, I am looking forward to working with the Cryoport team to advance its mission to improve the quality and reliability of deep frozen cold chain logistics in the worldwide market," said Shelton. Mr. Shelton has more than thirty years of executive and corporate governance experience across several industries, including information services, telecommunications, manufacturing and distribution. Previously, he was a Visiting Executive at IBM Research where his team created and developed WebFountain, a project contributing significantly to IBM's software strategy. He was also President and Chief Executive Officer of NDC Holdings, Continental Graphics Holdings, Thomson Business Information Group, and Advantage Companies. Under his leadership each of those companies achieved rapid revenue growth, improved profitability and increases in shareholder value. Mr. Shelton holds a BSBA degree from the University of Tennessee, and a MBA from the Harvard Business School. With the appointment of Mr. Shelton as the Company's President and Chief Executive Officer, the Board of Directors dissolved the Office of the Chief Executive which had been formed on an interim basis upon the departure of the Company's previous President and Chief Executive Officer. On Nov. 5, 2012, the Company entered into an employment agreement with Mr. Shelton. The Agreement provides an initial term of six months and an agreement subsequent to the Term would be negotiated at the conclusion of the Agreement. The Agreement provides an initial annual base salary of $300,000 during the Term. About CryoPort Inc. Headquartered in Lake Forest, Calif., CryoPort, Inc. (OTC BB: CYRXD) -- http://www.cryoport.com/-- provides innovative cold chain frozen shipping system dedicated to providing superior, affordable cryogenic shipping solutions that ensure the safety, status and temperature of high value, temperature sensitive materials. The Company has developed a line of cost-effective reusable cryogenic transport containers capable of transporting biological, environmental and other temperature sensitive materials at temperatures below 0-degree Celsius. The Company reported a net loss of $7.83 million for the year ended March 31, 2012, compared with a net loss of $6.15 million during the prior fiscal year. The Company's balance sheet at June 30, 2012, showed $4.23 million in total assets, $1.96 million in total liabilities and $2.26 million in total stockholders' equity. KMJ Corbin & Company LLP, in Costa Mesa, California, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended March 31, 2012. The independent auditors noted that the Company has incurred recurring operating losses and has had negative cash flows from operations since inception. Although the Company has working capital of $4,024,120 and cash & cash equivalents of $4,617,535 at March 31, 2012, management has estimated that cash on hand, which include proceeds from the offering received in the fourth quarter of fiscal 2012, will only be sufficient to allow the Company to continue its operations only into the fourth quarter of fiscal 2013. These matters raise substantial doubt about the Company's ability to continue as a going concern. DELPHI CORP: DPH Holdings Files Report for 3rd Quarter 2012 ----------------------------------------------------------- DPH Holdings Corp. and its affiliates submitted to Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York on October 19, 2012, a consolidated operating report for the quarter period ended September 30, 2012. DPH Holdings President John C. Brooks said the Reorganized Debtors posted an operating income of $600,000 for the third quarter of 2012. DPH Holdings Corp., et al. Schedule of Disbursements Three Months Ended September 30, 2012 DPH Holdings Corp. $1,813,000 ASEC Manufacturing General Partnership 0 ASEC Sales General Partnership 0 DPH Medical Systems Colorado LLC 0 DPH Medical Systems Texas LLC 0 DPH Medical Systems LLC 0 DPH-DAS Overseas LLC 0 DPH-DAS (Holding), LLC 0 DPH Diesel Systems LLC 0 DPH Connection Systems LLC 0 DPH-DAS Services LLC 0 DPH-DAS LLC 0 Mr. Brooks noted that disbursements were allocated to the legal entities but all disbursements are being made by DPH Holdings Corp. In connection with the consummation of Delphi Corp.'s Confirmed Modified First Amended Joint Plan of Reorganization, DIP Holdco LLP, now known as Delphi Automotive LLP, as assignee of DIP Holdco 3 LLC, through various subsidiaries and affiliates, acquired on October 6, 2009, substantially all of the global core business of Delphi Corp., now known as DPH Holdings Corp. and its debtor affiliates, including the stock of Delphi Technologies, Inc., and the membership interests in Delphi China LLC. Thus, neither Delphi Technologies, Inc., nor Delphi China LLC is included in the current quarterly operating report. Debtor Delphi Technologies, Inc. filed with the Court a separate operating report for the quarter ended September 30, 2012, disclosing that its disbursements for the period totaled $6,602,000. Delphi Corp. Treasurer Keith D. Stipp related that operating expenses plus any applicable cure payments for the quarter ended September 30, 2012, was used as a proxy for disbursements for Delphi Technologies, Inc. Delphi Technologies, he added, had an operating income of $36 million for the third quarter of 2012. DELPHI CORP: Legislator Demands Pension Termination Docs -------------------------------------------------------- The Daily Caller reports that House Ways and Means Committee Chairman Rep. Dave Camp threatened Treasury Secretary Timothy Geithner and President Barack Obama on Oct. 23, 2012, to produce Delphi documents related to the pensions termination or get served with subpoenas. "This is my third letter requesting that the Department of the Treasury come clean about its involvement in the decision-making that led to certain Delphi pension beneficiaries being treated differently during the 2009 General Motors Company (GM) bailout," Rep. Camp wrote in an Oct. 23 letter to Sec. Geithner, according to The Daily Caller. "To date, Treasury has provided two demonstrably incomplete productions consisting of little more than publicly available documents, redacted e-mails, ex post facto rationale for Treasury actions, and incomplete productions prepared for other inquiries. Despite my request, Treasury has refused to certify that it has produced all responsive documents or provide a privilege log for any documents withheld. This pattern of stonewalling is inconsistent with the high standards you have set for Treasury." According to an Oct. 23 The Daily Caller report, Rep. Camp warned Mr. Geithner that if he doesn't provide all responsive documents to the Ways and Means Committee by Oct. 30, he would be forced to consider using compulsory process to secure production of the documents. In the 2009 auto bailout, a decision was made to terminate the pension plans for 20,000 Delphi non-union autoworker retirees, The Daily Caller recounts. For years since, the Obama administration has claimed the Pension Benefit Guaranty Corporation made the decision on its own, free of administration influence, the report adds. However, email correspondence uncovered in August 2012 shows that this might not have been the case. Rep. Camp's committee is one of three in the House investigating the Delphi pension issue. The House Committee on Oversight and Government Reform and the House Committee on Education and the Workforce are conducting their own probes, The Daily Caller cites. Delphi Pension Issue Surfaces in Presidential Election Campaign The controversial pension cut for Delphi non-union retirees was brought up in the U.S. presidential election campaign, The Oakland Press relates. The report, citing The Nation magazine, relates the Romney family pocketed at least $15.3 million from the 2009 auto bailout through an investment by one of its proxies, Elliott Management, in Delphi Corp. The information was apparently lifted from a filing on a blind trust for Ann Romney, which invested $1 million with Elliott Management, The Oakland Press points out. Elliott Management was one of the lender groups that helped brought Delphi out of bankruptcy in 2009. A spokesperson for Mr. Romney said the Republican candidate had no role whatsoever in the investment or the restructuring of Delphi, The Oakland Press narrates. DELPHI CORP: UAW Addresses Omissions in NBC Report -------------------------------------------------- NBC News left out critical information regarding Delphi employee pensions in a November 4 report, failing to report that a 1999 contract, not favoritism, is what made pensions whole for some employees, according to the United Auto Workers. All Delphi employees had their pensions terminated and put into Pension Benefit Guaranty Corporation (PBGC), and only workers under a 1999 contract that required GM to cover Delphi pension shortfalls had their pensions made whole. "These workers are right to be angry about their pensions, but they have misdirected their anger. The Obama Administration saved more than a million jobs through the auto rescue, and automakers and states alike are stronger for it," said UAW president Bob King. "What workers may not know is that Mitt Romney not only opposed the auto rescue, but also profited off the misfortune of Delphi workers." NBC News made no mention of Mitt Romney's stake in Delphi Corp. Mr. Romney profited from his family's investment in Delphi at the expense of the Delphi workers, and The Nation recently reported that the Romney family personally profited by at least $15.3 million from the auto loans of 2009. Romney's investor group increased profits to gain a 3,000 to 4,000 percent return on investment, making $4.2 billion. If they lived up to pension obligations by designating 25 percent of profits to pensions, they still would have made a 2,000 to 3,000 percent return on their investment and more than $3 billion in profits. These auto rescue profits have not gone unnoticed. The UAW and a coalition of labor and good government organizations filed an ethics complaint on November 1 with the U.S. Office of Government Ethics calling for an investigation into Mitt Romney's noncompliance with the Ethics in Government Act to compel him to either disclose his investments in Delphi or divest them. The coalition believes that Romney's undisclosed stock holdings create serious conflicts of interest. Yet Romney's June 1, 2012, Public Financial Disclosure Report to the Office of Government Ethics did not reveal this windfall because he did not disclose the underlying holdings of his private equity and limited partnership funds. Tens of thousands of supporters have signed a petition asking Romney to come clean about profits made in the auto rescue and how he made a fortune off the misfortune of others. DELPHI SLOVENSKO: To Lay Off 500 Employees Thru June 2014 --------------------------------------------------------- The Slovak Spectator reports that trade unionists from Delphi Slovensko protested on October 24, 2012, against the Company's planned layoff of more than 500 employees, and sought higher severance pay for those affected. Union leaders expressed dismay that the labor office has consented to mass layoffs via a fast-tracked procedure, the Slovak Spectator relates. The employees to be terminated are to receive severance pay worth three to five month's salary, but the union wants at least 14 months, The Slovak Spectator cites. Delphi Slovensko manufactures cable-bundles for the automobile industry. The lay-offs will be carried out in four stages, with the first 85 employees to lose their jobs by the end of the year and the rest by June 2014, the report specifies. DESPERADO DAIRY: Bankruptcy Filing Unauthorized ----------------------------------------------- Bankruptcy Judge Robert L. Jones dismissed the Chapter 11 case of Desperado Dairy, LLC, saying the bankruptcy petition was filed without authority. Steven Whitten and Marc Schuil, members of Desperado Dairy, sought dismissal. Their motion was opposed by member Howard Hellman, ostensibly on behalf of Desperado Dairy, and creditors Darrell Buhr d/b/a Buhr Trucking and S.O.O. Trucking Co. The decision to file chapter 11 was made exclusively by Mr. Hellman as "Manager" of Desperado Dairy. He was at the time, and still is, a 33.33% owner of Desperado Dairy. The other members -- Messrs. Whitten and Schuil -- were not consulted regarding the filing, though Mr. Hellman knew at the time that they were opposed to placing Desperado Dairy into a bankruptcy proceeding. A copy of the Court's Nov. 6, 2012 Memorandum Opinion and Order is available at http://is.gd/jiejlYfrom Leagle.com. Based in Lubbock, Texas, Desperado Dairy LLC filed for Chapter 11 (Bankr. N.D. Tex. Case No. 12-50354) on Aug. 13, 2012, estimating under $10 million in both assets and debts. Judge Robert L. Jones presides over the case. David R. Langston, Esq., at Mullin, Hoard & Brown, serves as the Debtor's counsel. Howard and Lillian Hellman also sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 12-50353) on the same day. DEWEY & LEBOEUF: Wins OK to Subpoena Clients Over Unpaid Fees ------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Martin Glenn gave Dewey & LeBoeuf LLP some power Wednesday in its bid to collect $154 million in remaining accounts receivable from "recalcitrant" former clients, saying the move was in the best interests of all parties. Judge Glenn granted the defunct firm's Oct. 13 motion for authority to issue subpoenas for the production of documents from former clients as it seeks to bring in the money, which is one of its biggest assets at this point in its bankruptcy, according to Bankruptcy Law360. 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. DIGITAL DOMAIN: Schedules and SOFA Due Today -------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended until Nov. 9, 2012, Digital Domain Media group, Inc., et al.'s time to file their schedules of assets and liabilities and statement of financial affairs. About Digital Domain Port St. Lucie, Florida-based Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/-- engaged 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, subject to higher and better offers. At the auction on Sept. 21, the principal part of the business was purchased by a joint venture between Galloping Horse America LLC, an affiliate of Beijing Galloping Horse Co., and an affiliate of Reliance Capital Ltd., based in Mumbai. The $36.7 million total value of the contact includes $3.6 million to cure defaults on contracts and $2.9 million in reimbursement of payroll costs. Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the Debtors. Cassels Brock and Blackwell served as Canadian counsel and Cadwalader, Wicksham & Taft as special counsel. 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. The Debtors also have sought ancillary relief in Canada, pursuant to the Companies' Creditors Arrangement Act in the Supreme Court of British Columbia, Vancouver Registry. DIGITAL DOMAIN: Committee Wins OK to Retain Attorneys ----------------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court approved Digital Domain Media Group's official committee of unsecured creditors' motions to retain Brown Rudnick as counsel and Sullivan Hazeltine Allinson as co-counsel. Separately, the Court also approved the Debtors' motion to retain Kurtzman Carson Consultants as information agent. About Digital Domain Port St. Lucie, Florida-based Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/-- engaged 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, subject to higher and better offers. At the auction on Sept. 21, the principal part of the business was purchased by a joint venture between Galloping Horse America LLC, an affiliate of Beijing Galloping Horse Co., and an affiliate of Reliance Capital Ltd., based in Mumbai. The $36.7 million total value of the contact includes $3.6 million to cure defaults on contracts and $2.9 million in reimbursement of payroll costs. 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. The Debtors also have sought ancillary relief in Canada, pursuant to the Companies' Creditors Arrangement Act in the Supreme Court of British Columbia, Vancouver Registry. DJL TRUCKING: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: DJL Trucking, Inc. 3060 Sherman Road Perris, CA 92570 Bankruptcy Case No.: 12-34807 Chapter 11 Petition Date: November 2, 2012 Court: U.S. Bankruptcy Court Central District of California (Riverside) Judge: Deborah J. Saltzman Debtor's Counsel: William D. May, Esq. LAW OFFICES OF STEPHEN R. WADE, P.C. 350 W. Fourth Street Claremont, CA 91711 Tel: (909) 985-6500 Fax: (909) 399-9900 E-mail: laurel@srwadelaw.com Estimated Assets: $50,001 to $100,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/cacb12-34807.pdf The petition was signed by David J. Lonsdale, president. DPL INC: Fitch Lowers Issuer Default Rating to 'BB' --------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating (IDR) of DPL Inc. (DPL) to 'BB' from 'BB+'. In addition, Fitch has placed DPL and its wholly owned subsidiary The Dayton Power and Light Company (DP&L) on Rating Watch Negative. The Rating Watch Negative implies that the ratings may be either lowered or affirmed and are typically resolved over a relatively short period of time. Fitch expects to resolve the Rating Watch Negative for DPL and DP&L once the outcome of DP&L's recently filed Electric Security Plan (ESP) is known. The downgrade in DPL's ratings and the assignment of Rating Watch Negative is driven by significantly reduced EBITDA and FFO expectations compared with Fitch's prior forecasts. A material reduction in power prices that has exacerbated switching to alternate retail electricity providers among DP&L's standard service offer (SSO) customers and reduced DP&L's wholesale revenues accounts for Fitch's revised expectations. The substantial increase in leverage at DPL following the acquisition by The AES Corporation (AES, rated 'BB-' Outlook Stable by Fitch) is causing additional stress on DPL's credit metrics, in an operating environment that continues to worsen. DPL's ratings reflect its highly leveraged capital structure and the primary support it receives from the upstream distributions from DP&L. The ratings of DPL and DP&L are linked and the IDRs of both entities consider the combined leverage, which consists of approximately $1.7 billion of debt at DPL and $0.9 billion of debt at DP&L. The ratings of DPL and DP&L are not tightly linked to the IDR of the ultimate parent, AES. However, any material weakening of the credit of AES could adversely affect Fitch's ratings of DPL and DP&L. DP&L is facing several regulatory and market challenges in Ohio. Its current ESP expires in Dec. 31, 2012. DP&L has filed for a new ESP to be effective Jan. 1, 2013 in an environment where low power prices have caused acceleration in customer switching and heightened retail competition. DP&L has requested a non- bypassable charge of $120 million over the five-year ESP period, a faster transition of SSO tariff to market, and a commitment to file a generation separation plan by YE 2013 such that DP&L expects that the non-regulated generation business would be legally separated from the regulated transmission and distribution business by YE 2017. Switching has accelerated in DP&L's retail territory in 2012. As of June 30, 2012, approximately 56% of DP&L's customers had switched to alternate suppliers. Through the first six months of 2012, customer switching has impacted DP&L's gross margin by $110 million and DPL's gross margin by 59 million. The lost gross margin at DP&L has been partially offset by higher margins at DPL's non-regulated subsidiary, DPL Energy Resources (DPLER), which has been successful in winning a majority of the switched load. DPLER is also actively competing for the retail load in non-DP&L service territory. DPL's credit metrics have sharply deteriorated in the wake of increased switching and falling wholesale revenues. For the last twelve months (LTM) ended June 30, DPL's consolidated funds from operations (FFO)-to-debt ratio was 11% and debt-to-EBITDA ratio was 6.3x. Fitch expects a further deterioration of these metrics absent a waning of residential switching, a constructive ESP outcome and material debt reduction at DPL. All these three factors bear monitoring and will be used by Fitch to drive future rating actions. DP&L's LTM metrics remain robust, though these have moderated somewhat from their very strong historical financial performance as a result of increased competition in the competitive retail energy market and weaker wholesale revenues. For the LTM ending June 30, DP&L's FFO-to-debt ratio was 38% and its debt-to-EBITDA ratio was 2.1x. Fitch forecasts DP&L's robust credit metrics to deteriorate somewhat based on the terms of the requested ESP and assuming that residential switching exacerbates for a few months before moderating. However, Fitch expects DP&L's forecasted credit metrics to remain superior relative to Fitch guidelines for the 'BBB-' IDR. DP&L's current ratings are constrained by the additional leverage at DPL and the need for a high proportion of DP&L's earnings to be upstreamed to DPL as dividends to support parent debt. Fitch has notched DP&L's IDR two levels above that of DPL. The Merger Stipulation, as approved by the Public Utility Commission of Ohio (PUCO), places explicit financial restrictions on DP&L that reduces its credit risk relative to DPL. DP&L is required to maintain a capital structure that includes an equity ratio of at least 50% and cannot have a negative retained earnings balance. In addition, the DP&L Articles of Incorporation, and the Ohio state codes place further restrictions on: (1) upstream dividend distribution; (2) transactions with an affiliate such as liquidity support, debt incurrence or collateral support; and (3) issuance of new debt without explicit approval from the PUCO. Liquidity is adequate and is supported by DP&L's cash flows and full availability on the utility's $200 million revolving credit facility maturing in August 2015 and $200 million revolving credit facility maturing in April 2013. DPL also has full availability on its own $75 million revolving credit facility maturing in August 2014. Subsequent to a recent amendment to its credit agreement, the capacity on the revolver was reduced to $75 million, from $125 million previously. The amendment also eliminated the prior debt to capital financial covenant replacing it with a debt to EBITDA covenant. The amendment also imposes significant restriction on DPL's ability to pay dividend to AES. In the third quarter of 2012, DPL recognized an estimated $1.85 billion non-cash goodwill impairment charge. DPL had recorded substantial goodwill of $2.6 billion in the fourth quarter of 2011 in connection with its acquisition by AES. DP&L has a significantly large debt maturity on Oct. 1, 2013, with its $469 million first mortgage bonds coming due. Although these notes account for more than half of DP&L's existing debt outstanding, Fitch expects the replacement of this debt to be manageably done prior to maturity. What Could Trigger a Rating Action Outcome of the ESP: Fitch expects to resolve the Rating Watch for DPL and DP&L once the outcome of the recently filed ESP is known. While no procedural schedule is set as of now, it is Fitch's expectation that the PUCO could issue a final order before the end of the first quarter of 2013. Pace of debt reduction: A constructive ESP outcome in itself may not be adequate to ward off negative rating actions for DPL and DP&L. Fitch expects DPL to significantly reduce debt from the current levels to prevent further downgrade to ratings. Higher switching levels: Higher than anticipated switching levels and the inability to secure a switching tracker in its ESP order could place additional stress on DP&L's cash flows, and in turn, exert greater pressure on the upstream dividends from DP&L to DPL. Higher than Anticipated Capex: Capital expenditures in excess of Fitch's current forecasts could accentuate the stress that the combined entity will undergo over the next few years. Ratings Upgrade Unlikely: Positive rating actions are unlikely for several years given the highly leveraged balance sheet at DPL and the structural change in the operating environment facing DP&L. The separation plan, once filed by DP&L and approved by the PUCO, and the resulting capital structure at the regulated utility will have an important bearing on the future rating actions for DP&L. Fitch has downgraded the following ratings and placed them on Rating Watch Negative: DPL -- Long-term IDR to 'BB' from 'BB+'; -- Senior unsecured debt to 'BB' from 'BB+'. DPL Capital Trust II -- Junior subordinate debt to 'B+' from 'BB-'. Fitch has placed the following ratings on Rating Watch Negative: DPL -- Short-term IDR 'B'. DP&L -- Long-term IDR 'BBB-'; -- Senior secured debt 'BBB+'; -- Preferred stock 'BB+'; -- Short-term IDR 'F3''. DORAL PROPERTIES: Moody's Corrects Rating on Bonds to 'Caa1' ------------------------------------------------------------ Moody's Investors Service has corrected the current rating and rating history of the Series 2002 industrial revenue bonds (CUSIP: 74527BSL9) issued by Doral Properties, Inc. through the Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority (AFICA). The current rating has been corrected to Caa1 from Baa2. Doral Properties, Inc. is a wholly-owned subsidiary of Doral Financial Corporation (Doral Financial) and Doral Financial is legally responsible for the payments on the AFICA bonds that are currently outstanding. Due to an internal administrative error, the ratings on these industrial revenue bonds were inadvertently omitted from several rating actions relating to Doral Financial. The corrections align the AFICA bond ratings with Doral Financial's Caa1 senior unsecured debt rating. The complete corrected rating history of these bonds is as follows: September 17, 2002 -- Baa2 assigned; April 21, 2005 -- Baa2 placed on review for downgrade; June 10, 2005 -- Baa2 downgraded to Baa3 and placed on review for further downgrade; September 6, 2005 -- Baa3 downgraded to Ba1 and placed on review for further downgrade; October 28, 2005 -- Ba1 downgraded to Ba3; March 23, 2006 -- Ba3 downgraded to B1; January 5, 2007 -- B1 downgraded to B2 and placed on review for downgrade; July 19, 2007 -- B2 confirmed; December 18, 2007 -- B2 upgraded to B1; March 17, 2009 -- B1 downgraded to B2; September 9, 2009 -- B2 downgraded to Caa1. EASTMAN KODAK: Wins Court Nod to End Retiree Benefits ----------------------------------------------------- Maria Chutchian at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Allan J. Gropper on Monday approved a multimillion-dollar deal that will allow Eastman Kodak Co. to stop providing retiree health and survivor benefits by the end of the year, a Kodak spokeswoman confirmed. Bankruptcy Law360 relates that Judge Gropper signed off on the company's agreement with the Official Committee of Retired Employees, a significant step for the film and photography company as it continues its efforts to exit bankruptcy. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. ELECTRONIC GAME CARD: SEC Charges Execs, Auditor With Fraud ----------------------------------------------------------- The Securities and Exchange Commission on Nov. 8 charged three executives with repeatedly lying to investors about the operations and financial condition of an Irvine, Calif.-based company that purported to sell credit card-size electronic games. The SEC also charged the company's independent auditor with facilitating the scheme. The SEC alleges that chief executive officer Lee Cole and chief financial officer Linden Boyne orchestrated a scheme in which Electronic Game Card Inc. (EGMI) enticed investors by claiming to have millions of dollars in annual revenue, hold millions of dollars in investments, and own an off-shore bank account worth more than $10 million. In reality, many of the company's purported contracts were phony, the purported investments were merely in entities affiliated with Cole or Boyne, and the bank account did not exist. As a result of EGMI's false claims, the company's outstanding common stock was once valued as high as $150 million. EGMI is now bankrupt and its stock is worthless. The SEC charged the company's outside auditor -- certified public accountant Timothy Quintanilla -- with repeatedly issuing clean audit opinions about EGMI based on reckless and deficient audit work. Also charged is Kevin Donovan, who later replaced Cole as CEO and ignored many red flags about the accuracy of the company's public statements and the integrity of Cole and Boyne. He provided false information during conference calls with analysts and investors. "Cole and Boyne played a game of make-believe with a publicly- traded microcap company," said Andrew M. Calamari, Director of the SEC's New York Regional Office. "We will continue to fight microcap fraud and bring charges against not only the company executives but also the auditors or other gatekeepers who legitimize a fraud and allow investors to be victimized." According to the SEC's complaint filed in federal court in Manhattan, EGMI's material misrepresentations and omissions in SEC filings and public statements occurred from 2007 to 2009. The company repeatedly reported non-existent revenues and assets, misrepresented its business operations, and failed to disclose related-party transactions. Those misrepresentations and others like them were just part of a scheme that Cole and Boyne orchestrated through EGMI to reap approximately $12 million in unlawful gains. While they were making material misrepresentations to inflate EGMI's stock price, Cole and Boyne also secretly funneled millions of shares of EGMI stock to entities based in Gibraltar that they secretly controlled. They directed the Gibraltar entities to sell the shares, and proceeds of those sales were transferred to people or entities associated with Cole and Boyne or to EGMI itself. Cole and Boyne bolstered their lies by providing falsified documents to the company's outside auditors. The SEC alleges that as EGMI's engagement partner, Quintanilla and the public accounting firm Mendoza Berger & Co. LLP issued clean audit opinions for EGMI's year-end financial statements for 2006, 2007, and 2008, even though those statements were riddled with material misstatements and omissions. Mendoza Berger and Quintanilla knowingly or recklessly misrepresented that the firm had conducted audits of EGMI's financial statements "in accordance with the standards of the Public Company Accounting Oversight Board (United States)." Mendoza Berger's opinion stated that EGMI's financial statements "present[ed] fairly, in all material respects, the financial position" of EGMI. In fact, Mendoza Berger had not audited critical aspects of EGMI's financial statements, and its work did not conform to the standards of the Public Company Accounting Oversight Board (PCAOB). Quintanilla had no meaningful basis to have Mendoza Berger issue an opinion on EGMI's financial statements. The SEC further alleges that shortly after Donovan became CEO, he was notified of many red flags related to the company's public statements about its operations, finances, and share count. Donovan violated the antifraud provisions of the securities laws when he led several public conference calls with securities analysts and investors in 2009, and knowingly or recklessly relayed false financial information about the company that had been provided to him by Cole and Boyne. The SEC's complaint alleges that Cole and Boyne violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933; Sections 10(b), 13(b)(5), 13(d), and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 13a-14, 13b2-1, 13b2-2, 13d-1, 13d-2, 16a-2, and 16a-3; and Section 304 of the Sarbanes-Oxley Act of 2002. The SEC also alleges that Cole and Boyne are liable as control persons and for aiding and abetting violations of Sections 10(b), 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1 and 13a-13. The SEC charges that Donovan violated Sections 17(a)(1) and 17(a)(3) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5. The SEC alleges that Quintanilla violated Section 17(a) of the Securities Act and Sections 10(b), 10A(a)(1), and 10A(b)(1) of the Exchange Act and Rule 10b-5. Quintanilla also is charged with aiding and abetting violations of Sections 10(b), 10A(a)(1), and 10A(b)(1) of the Exchange Act and Rule 10b-5 thereunder. The SEC's complaint seeks, among other things, a final judgment ordering Cole, Boyne, Donovan, and Quintanilla to pay financial penalties and permanently enjoining them from future violations of the securities laws; enjoining Cole, Boyne, and Donovan from serving as officers and directors of public companies and from participating in penny stock offerings; and ordering Cole, Boyne, and Quintanilla to disgorge their ill-gotten gains with prejudgment interest. The SEC's investigation, which is continuing, has been conducted by Michael Paley, Stephen Larson, James Addison, Gwen Licardo, and Aaron Arnzen of the New York Regional Office. Mr. Arnzen will lead the SEC's litigation. The SEC thanks the PCAOB for its assistance in this matter. ELPIDA MEMORY: Mosaid Seeks to Sue Over DRAM Patents ---------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that Mosaid Technologies Inc. asked a Delaware bankruptcy judge Wednesday for leave to bring a patent suit against Japanese chipmaker Elpida Memory Inc., saying that Chapter 15 protection does not shield the bankrupt company from alleged infringements that occurred after its foreign filing. Bankruptcy Law360 relates that a leading producer of dynamic random access memory chips, Elpida initiated bankruptcy proceedings in Tokyo court back in February and followed in March with a Chapter 15 petition in Delaware seeking relief from U.S. creditors, particularly with regard to U.S. patent suits. About Elpida Memory Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is a Japan-based company principally engaged in the development, design, manufacture and sale of semiconductor products, with a focus on dynamic random access memory (DRAM) silicon chips. The main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM, Mobile RAM and XDR DRAM, among others. The Company distributes its products to both domestic and overseas markets, including the United States, Europe, Singapore, Taiwan, Hong Kong and others. The company has eight subsidiaries and two associated companies. After semiconductor prices plunged, Japan's largest maker of DRAM chips filed for bankruptcy in February with liabilities of 448 billion yen ($5.6 billion) after losing money for five quarters. Elpida Memory and its subsidiary, Akita Elpida Memory, Inc., filed for corporate reorganization proceedings in Tokyo District Court on Feb. 27, 2012. The Tokyo District Court immediately rendered a temporary restraining order to restrain creditors from demanding repayment of debt or exercising their rights with respect to the company's assets absent prior court order. Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo Court as Supervisor and Examiner in the case. Elpida Memory Inc. sought the U.S. bankruptcy court's recognition of its reorganization proceedings currently pending in Tokyo District Court, Eight Civil Division. Yuko Sakamoto, as foreign representative, filed a Chapter 15 petition (Bankr. D. Del. Case No. 12-10947) for Elpida on March 19, 2012. EMSCHARTS INC: Golden Hour Offers Transition to Customers --------------------------------------------------------- Golden Hour announced it will provide a transition path to assist customers currently using emsCharts and other integrated dispatch systems to transition to the Golden Hour Live Dispatch and Clinical Charting Service. emsCharts filed for bankruptcy on Oct. 17, 2012, and will operate in accordance with bankruptcy law as they attempt to reorganize as a result of a recent patent infringement jury verdict. "This may be a confusing time for emsCharts' customers, employees, and partners within the air medical industry. Golden Hour has created an easy path that allows customers to transition to the Golden Hour Live Dispatch and Clinical Charting Service. Golden Hour will honor all fee schedules for emsCharts' and other integrated dispatch systems during this transition period," said Rick Mosteller, VP Business Development. Golden Hour Data Systems, Inc. -- http://www.GoldenHour.com/-- is the only patented integrated computerized solution for the emergency medical transportation industry. EmsCharts, Inc., filed a Chapter 11 petition (Bankr. N.D. W.Va. Case No. 12-01385) on Oct. 17, 2012. Aurelius Patrick Robleto, Esq., at Robleto Law, PLLC, serves as counsel. See http://bankrupt.com/misc/wvnb12-01385.pdf EVANS OIL: U.S. Trustee Names Philip V. Martino as Ch. 11 Trustee ----------------------------------------------------------------- Donald F. Walton, U.S. Trustee for Region 21, asks the U.S. Bankruptcy Court for the Middle District of Florida to approve the appointment of Philip V. Martino as Chapter 11 trustee in the cases of Evans Oil Co., L.L.C., et al. On Sept. 28, 2012, the Court directed the appointment of a Chapter 11 trustee. The condition precedent to the appointment is that the asset purchase sale be closed. In this relation, chief restructuring officer Soneet Kapila has notified the Office of the U.S. Trustee that the sale has closed. To the best of the U.S. Trustee's knowledge, Mr. Martino is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Evans Oil Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC, distributes bulk oil, gas, diesel and lubricant products. Evans Oil, together with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30, 2011. Attorneys at Hahn Loeser & Parks LLP serve as bankruptcy counsel to the Debtors. Garden City Group Inc. is the claims and notice agent. The Parkland Group Inc. is the restructuring advisor. Evans Oil estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. Fifth Third Bank failed in its bid for appointment of a Chapter 11 trustee to replace management. Soneet Kapila was appointed by the bankruptcy judge as facilitator effective on May 10, 2012 for Evans Oil. All due diligence regarding any plan of reorganization or any sale of the Debtors' assets will be facilitated by Mr. Kapila until the earlier of consummation of a sale of all or substantially all of the assets, or (2) confirmation of a plan of reorganization. FIBERTOWER CORP: Sale Deal Collapses; Buyers Have No Financing -------------------------------------------------------------- Katy Stech at Dow Jones' DBR Small Cap reports that the purchase offer for troubled FiberTower Corp. has fallen through after the buyer couldn't follow up on its promise to buy the San Francisco company, which routes cellphone calls through its towers and claims to hold a license for a massive chunk of wireless channel spectrum in major cities. About FiberTower Corp. FiberTower Corporation, FiberTower Network Services Corp., FiberTower Licensing Corp., and FiberTower Spectrum Holdings LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case Nos. 12-44027 to 12-44031) on July 17, 2012, together with a plan support agreement struck with prepetition secured noteholders. FiberTower is an alternative provider of facilities-based backhaul services, principally to wireless carriers, and a national provider of millimeter-band spectrum services. Backhaul is the transport of voice, video and data traffic from a wireless carrier's mobile base station, or cell site, to its mobile switching center or other exchange point. FiberTower provides spectrum leasing services directly to other carriers and enterprise clients, and also offer their spectrum services through spectrum brokerage arrangements and through fixed wireless equipment partners. FiberTower's significant asset is the ownership of a national spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum licenses, including over 740 MHz in the top 20 U.S. metropolitan areas and, in the aggregate, roughly 1.72 billion channel pops (calculated as the number of channels in a given area multiplied by the population, as measured in the 2010 census, covered by these channels). FiberTower believes the Spectrum Portfolio represents one of the largest and most comprehensive collections of millimeter wave spectrum in the U.S., covering areas with a total population of over 300 million. As of the Petition Date, FiberTower provides service to roughly 5,390 customer locations at 3,188 deployed sites in 13 markets throughout the U.S. The fixed wireless portion of these hybrid services is predominantly through common carrier spectrum in the 11, 18 and 23 GHz bands. FiberTower's biggest service markets are Dallas/Fort Worth and Washington, D.C./Baltimore, with additional markets in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit, Houston, New York/New Jersey, Pittsburgh, San Antonio/Austin/Waco and Tampa. As of June 30, 2012, FiberTower's books and records reflected total combined assets, at book value, of roughly $188 million and total combined liabilities of roughly $211 million. As of the Petition Date, FiberTower had unrestricted cash of roughly $23 million. For the six months ending June 30, 2012, FiberTower had total revenue of roughly $33 million. With the help of FTI Consulting Inc., FiberTower's preliminary valuation work shows that the Company's enterprise value is materially less than $132 million -- i.e., the approximate principal amount of the 9.00% Senior Secured Notes due 2016 outstanding as of the Petition Date. The preliminary valuation work is based upon the assumption that FiberTower's spectrum licenses will not be terminated. Fibertower Spectrum disclosed $106,630,000 in assets and $175,501,975 in liabilities as of the Chapter 11 filing. Judge D. Michael Lynn oversees the Chapter 11 case. Lawyers at Andrews Kurth LLP serve as the Debtors' lead counsel. Lawyers at Hogan Lovells and Willkie Farr and Gallagher LLP serve as special FCC counsel. FTI Consulting serve as financial advisor. BMC Group Inc. serve as claims and noticing agent. The petitions were signed by Kurt J. Van Wagenen, president. Wells Fargo Bank, National Association -- as indenture trustee and collateral agent to the holders of 9.00% Senior Secured Notes due 2016 owed roughly $132 million as of the Petition Date -- is represented by Eric A. Schaffer, Esq., at Reed Smith LLP. An Ad Hoc Committee of Holders of the 9% Secured Notes Due 2016 is represented by Kris M. Hansen, Esq., and Sayan Bhattacharyya, Esq., at Stroock & Stroock & Lavan LLP. Wells Fargo and the Ad Hoc Committee also have hired Stephen M. Pezanosky, Esq., and Mark Elmore, Esq., at Haynes and Boone, LLP, as local counsel. U.S. Bank, National Association -- in its capacity as successor indenture trustee and collateral agent to holders of the 9.00% Convertible Senior Secured Notes due 2012, owed $37 million as of the Petition Date -- is represented by Michael B. Fisco, Esq., at Faegre Baker Daniels LLP, as counsel and J. Mark Chevallier, Esq., at McGuire Craddock & Strother PC as local counsel. William T. Neary, the U.S. Trustee for Region 6 appointed five members to the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee is represented by Otterbourg, Steindler, Houston & Rosen, P.C., and Cole, Schotz, Meisel, Forman & Leonard, P.A. Goldin Associates, LLC serves as its financial advisors. FIRST PLACE: Court Enters Order Restricting Trading in Equity ------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware has entered an order that imposes substantial restrictions on the trading of equity interests in First Place Financial Corp. A copy of the order may be found at the following internet address: http://www.donlinrecano.com/fpfc; questions regarding the order may be directed to representatives of the debtor at the following address: Patton Boggs LLP Attn: Brent McIlwain 2000 McKinney Avenue, Suite 1700 Dallas, TX 75201. First Place Financial Corp. filed a bare-bones Chapter 11 petition (Bankr. D. Del. Case No. 12-12961) in Delaware on Oct. 28 to sell its bank unit to Talmer Bancorp, Inc., absent higher and better offers. The Debtor declared $175 million in total assets and $65.6 million in total liabilities as of Oct. 26, 2012. The Debtor has tapped Patton Boggs LLP and The Bayard Firm, PA as legal counsel. FLETCHER INT'L: Proposes Goldin Associates as Consultant -------------------------------------------------------- Richard J. Davis, Chapter 11 trustee appointed in the case of Fletcher International, Ltd., seeks approval to hire Goldin Associates, LLC, as special consultant. A hearing on the application is scheduled for Nov. 9, 2012, at 9:45 a.m. According to the trustee, Goldin has provided and can provide high-quality consultant services in a timely and cost-effective manner. Goldin will, among other things: a) conduct forensic financial review to understand the operations and financial affairs of the Debtor and related entities and individuals as well as their assets and liabilities; b) consider strategic alternatives to preserve and maximize the value of the estate; and c) evaluate potential claims and formulating and evaluating proposals for the settlement and resolution of claims. The hourly rates of Goldin's personnel are: Managing Director $550 to $795 Director $400 to $550 Vice President $375 to $450 Manager $300 to $400 Associate & Senior Analyst $250 to $375 Analyst $150 to $300 The trustee proposes to have the Debtor's estate compensate Goldin at Goldin's regular hourly rates less a 10% discount and to reimburse Goldin for all reasonable and necessary expenses. To the best of the Trustee's knowledge, Goldin is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Fletcher International Fletcher International, Ltd., filed a bare-bones Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-12796) on June 29, 2012, in Manhattan. The Bermuda exempted company estimated assets and debts of $10 million to $50 million. The bankruptcy documents were signed by its president and director, Floyd Saunders. David R. Hurst, Esq., at Young Conaway Stargatt & Taylor, LLP, in New York, serves as counsel and Appleby (Bermuda) Limited serves as special Bermuda counsel. The Debtor disclosed $52,163,709 in assets and $22,997,848 in liabilities as of the Chapter 11 filing. Fletcher International Ltd. is managed by the investment firm of Alphonse "Buddy" Fletcher Jr. Fletcher Asset Management was founded in 1991. During its initial four years, FAM operated as a broker dealer trading various debt and equity securities and making long-term equity investments. Then, in 1995, FAM began creating and managing a family of private investment funds. The Debtor is a master fund in the Fletcher Fund structure. As a master fund, it engages in proprietary trading of various financial instruments, including complex, long-term, illiquid investments. The Debtor is directly owned by Fletcher Income Arbitrage Fund and Fletcher International Inc., which own roughly 83% and 17% of the Debtor's common shares, respectively. Arbitrage's direct parent entities are Fletcher Fixed Income Alpha Fund and FIA Leveraged Fund, both of which are incorporated in the Cayman Islands and are subject to liquidation proceedings in that jurisdiction, and which own roughly 76% and 22% of Arbitrage's common stock, respectively. The Debtor currently has a single subsidiary, The Aesop Fund Ltd. After filing for Chapter 11 protection, Fletcher immediately started a lawsuit in bankruptcy court to stop the involuntary bankruptcy in Bermuda. Judge Gerber at least temporarily halted liquidators appointed in the Cayman Islands from moving ahead with proceedings in Bermuda. The lawsuit to halt the Bermuda liquidation is Fletcher International Ltd. v. Fletcher Income Arbitrage Fund, 12-01740, in the same court. Richard J. Davis, Chapter 11 trustee appointed in the case taps Luskin, Stern & Eisler LLP as his counsel. FORT LAMAR: Case Summary & 2 Unsecured Creditors ------------------------------------------------ Debtor: Fort Lamar Properties, LLC P.O. Box 85 Carnesville, GA 30521 Bankruptcy Case No.: 12-77423 Chapter 11 Petition Date: November 2, 2012 Court: U.S. Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Jared L. Mitnick, Esq. DANIEL MITNICK & ASSOCIATES, P.C. 3780 Mansell Road, Suite 450 Alpharetta, GA 30022 Tel: (770) 408-7000 Fax: (770) 408-7001 E-mail: jmitnick@mitnicklaw.com Scheduled Assets: $1,085,000 Scheduled Liabilities: $1,348,479 A copy of the Company's list of its two largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ganb12-77423.pdf The petition was signed by Therrell Murphy, Jr., managing member. FREMONT GENERAL: California Court Upholds Ruling in Worker's Suit ----------------------------------------------------------------- The Court of Appeals of California, Second District, Division Three, affirmed lower court rulings in an employee lawsuit against Signature Group Holdings, Inc., formerly known as Fremont Reorganizing Corporation. FRC appeals the judgment, which awarded Alan W. Faigin $1,347,000 in damages for breach of an implied-in-fact agreement to terminate his employment only for good cause. FRC contends the evidence does not support the jury verdict and some of the jury's factual findings are contrary to law. FRC also contends the damages are excessive and challenges the admission of evidence and the refusal of its proposed jury instructions. Mr. Faigin appeals a postjudgment order denying his motion for prejudgment interest. He contends he is entitled to an award of prejudgment interest on his unliquidated claim for damages under Civil Code section 3287, subdivision (b). The Appeals Court concluded that substantial evidence supports the jury verdict and that FRC has shown no legal error or prejudicial abuse of discretion. The Appeals Court also concluded that the denial of Mr. Faigin's motion for prejudgment interest was proper. The case is ALAN W. FAIGIN, Plaintiff and Appellant, v. SIGNATURE GROUP HOLDINGS, INC., Defendant and Appellant, No. B224598 (Calif. App. Ct.). A copy of the Appeals Court's Nov. 6, 2012 decision is available at http://is.gd/qnreD8from Leagle.com. About Signature Group Signature Group Holdings, Inc. -- http://www.signaturegroupholdings.com/-- is a diversified0 business and financial services enterprise with principal activities in industrial distribution and special situations debt. Signature has significant capital resources and is actively seeking acquisitions as well as growth opportunities for its existing businesses. The Company was formerly a $9 billion in assets industrial bank and financial services business that reorganized during a two-year bankruptcy period. The reorganization provided for Signature to maintain federal net operating loss tax carryforwards in excess of $850 million. Fremont General Corp. filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 08-13421) on June 18, 2008. Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at Stutman Treister & Glatt, represented the Debtor as counsel. Kurtzman Carson Consultants LLC was the Debtor's noticing agent and claims processor. Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Brian M. Metcalf, at Klee, Tuchin, Bogdanoff & Stern LLP, represented the Official Committee of Unsecured Creditors as counsel. Fremont's formal schedules showed $330,036,435 in total assets and $326,560,878 in total debts. Fremont General emerged from bankruptcy and filed Amended and Restated Articles of Incorporation with the Secretary of State of Nevada on June 11, 2010, which, among other things, changed the Debtor's name to Signature Group Holdings, Inc. Signature's plan of reorganization became effective on June 11, 2010. The name change also took effect as of that date. FRIENDSHIP DAIRIES: Committee Taps Levenfeld Pearlstein as Counsel ------------------------------------------------------------------ The Official Committee of Unsecured Creditors Creditors' Committee in the Chapter 11 cases of Friendship Dairies asks the U.S. Bankruptcy Court for the Northern District of Texas for permission to retain Levenfeld Pearlstein as its lead counsel. The hourly rates of Levenfeld Pearlstein's personnel are: Partners $350 to $575 Associates $295 to $375 Paralegals $190 to $210 Levenfeld Pearlstein has agreed to cap the hourly rates of its attorneys and legal assistants as: Partners $450 Associates $350 Paralegals $175 The Committee is not seeking a retainer or professional fee "carve-out" from existing cash collateral orders in connection with the application, but reserves the right to do so by separate application in the event it is unable to reach an agreement in respect thereof with the Debtor and the lead secured lenders in the case. About Friendship Dairies Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The Debtor estimated assets and debts of $10 million to $50 million. The Debtor operates a dairy near Hereford, Deaf Smith County, Texas. The dairy consists of 11,000 head of cattle, fixtures and equipment. The Debtor also farms 5,000 acres of land for production of various crops used in feeding for the cattle. The Debtor owes McFinney Agri-Finance, LLC, $16 million secured by the Debtor's property, which is appraised at more than $24 million. The debtor disclosed $44,421,851 in assets and $45,554,951 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett White, P.C. serves as the Debtor's counsel. The petition was signed by Patrick Van Adrichem, partner. The U.S. Trustee appointed a six-member creditors committee in the Debtor's case. The Committee tapped Levenfeld Pearlstein as lead counsel, and Mullin, Hoard & Brown as local counsel. FRIENDSHIP DAIRIES: Committee Proposes Mullin as Local Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of Friendship Dairies to retain Mullin, Hoard & Brown as its local counsel. The law firm of Levenfeld Pearlstein, LLC, the proposed lead counsel for the Committee is located in Chicago, Illinois. Therefore, the Committee believes it is necessary to employ local attorneys as well, to assist lead counsel in representing the Committee before the Court. The hourly rates of Mullin Hoard's personnel are: Partners/Associates $150 to $350 Paralegals and Law Clerks $80 to $100 The Committee is not seeking a retainer or professional fee carve- out from existing cash collateral orders in connection with the application, but reserves the right to do so by separate application in the event it is unable to reach an agreement in respect thereof with the Debtor and the lead secured lenders in the case. To the best of Committee's knowledge, Mullin Hoard is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Friendship Dairies Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The Debtor estimated assets and debts of $10 million to $50 million. The Debtor operates a dairy near Hereford, Deaf Smith County, Texas. The dairy consists of 11,000 head of cattle, fixtures and equipment. The Debtor also farms 5,000 acres of land for production of various crops used in feeding for the cattle. The Debtor owes McFinney Agri-Finance, LLC, $16 million secured by the Debtor's property, which is appraised at more than $24 million. The debtor disclosed $44,421,851 in assets and $45,554,951 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett White, P.C. serves as the Debtor's counsel. The petition was signed by Patrick Van Adrichem, partner. The U.S. Trustee appointed a six-member creditors committee in the Debtor's case. The Committee tapped Levenfeld Pearlstein as lead counsel, and Mullin, Hoard & Brown as local counsel. FRIENDSHIP DAIRIES: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Friendship Dairies filed with the U.S. Bankruptcy Court for the Northern District of Texas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $20,829,900 B. Personal Property $23,591,951 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $42,199,882 E. Creditors Holding Unsecured Priority Claims $373,424 F. Creditors Holding Unsecured Non-priority Claims $2,981,645 ----------- ----------- TOTAL $44,421,851 $45,554,951 A copy of the schedules is available for free at http://bankrupt.com/misc/FRIENDSHIP_DAIRIES_sal.pdf About Friendship Dairies Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The Debtor estimated assets and debts of $10 million to $50 million. The Debtor operates a dairy near Hereford, Deaf Smith County, Texas. The dairy consists of 11,000 head of cattle, fixtures and equipment. The Debtor also farms 5,000 acres of land for production of various crops used in feeding for the cattle. The Debtor owes McFinney Agri-Finance, LLC, $16 million secured by the Debtor's property, which is appraised at more than $24 million. The debtor disclosed $44,421,851 in assets and $45,554,951 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett White, P.C. serves as the Debtor's counsel. The petition was signed by Patrick Van Adrichem, partner. The U.S. Trustee appointed a six-member creditors committee in the Debtor's case. The Committee tapped Levenfeld Pearlstein as lead counsel, and Mullin, Hoard & Brown as local counsel. FRIENDSHIP DAIRIES: Taps Raymond Hunter as Business Consultant -------------------------------------------------------------- Friendship Dairies asks the U.S. Bankruptcy Court for the Northern District of Texas for permission to employ the agricultural business consulting firm of Emerald Agriculture, particularly Raymond Hunter, Ph.D., as special dairy business consultants. Dr. Hunter's services will include conducting an assessment of the current state of the dairy herd and business, suggesting a reporting system through which parties in interest can be assured concerning the fundamental physical and financial performance of the herd, conducting a strategic analysis of the business, and reviewing the Debtor's physical and financial projections to provide objectivity as to how the business might be expected to perform. Dr. Hunter will be authorized and instructed to share all findings, conclusions, and work product with the Debtor and the Creditor Committee. Emerald Agriculture will serve at the hourly rate of $375 for Mr. Hunter, and $125 for Dennis March, plus reimbursable expenses. To the best of the Debtor's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Friendship Dairies Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The Debtor estimated assets and debts of $10 million to $50 million. The Debtor operates a dairy near Hereford, Deaf Smith County, Texas. The dairy consists of 11,000 head of cattle, fixtures and equipment. The Debtor also farms 5,000 acres of land for production of various crops used in feeding for the cattle. The Debtor owes McFinney Agri-Finance, LLC, $16 million secured by the Debtor's property, which is appraised at more than $24 million. The debtor disclosed $44,421,851 in assets and $45,554,951 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett White, P.C. serves as the Debtor's counsel. The petition was signed by Patrick Van Adrichem, partner. The U.S. Trustee appointed a six-member creditors committee in the Debtor's case. The Committee tapped Levenfeld Pearlstein as lead counsel, and Mullin, Hoard & Brown as local counsel. GAINESVILLE REDEVELOPMENT: Fitch Cuts Rating on $72MM Bonds to BB+ ------------------------------------------------------------------ Fitch Ratings downgrades the rating on approximately $72 million of Gainesville Redevelopment Authority, GA's revenue refunding bonds issued on behalf of Riverside Military Academy (RMA) to 'BB+' from 'BBB-'. The Rating Outlook is revised to Stable. Security The bonds are an absolute and unconditional obligation of RMA, secured by a fully funded debt service reserve and a first lien on the academy's campus. Key Rating Drivers RATING DOWNGRADE: The rating downgrade is based on a six-year trend of deeply negative operating deficits and sustained reliance on balance sheet resources, which has substantially depleted unrestricted liquidity. A high debt burden continues to hamper RMA's ability to balance operations. LONG TERM STRATEGY: The Stable Outlook reflects growth in student headcount from fiscal 2010 through 2012 as a result of the academy's execution of a multi-year business plan that is expected to reduce endowment support and achieve profitability on a cash- flow basis by fiscal 2015. DIMINISHING LIQUIDITY: Investment losses and continued reliance on balance sheet resources to support operations have eroded unrestricted liquidity by roughly 50% over a five-year operating history. RMA recently adopted a predominantly fixed income based investment allocation that is expected to preserve RMA's endowment going forward. HIGH DEBT BURDEN: Although reduced by RMA's retirement of a portion of outstanding bonds in fiscal 2011, debt burden remains relatively high at 34%. This high leverage is mitigated by the school's limited future capital needs. Credit Profile RMA was founded in 1907 as a military-style boys college preparatory school and offers boarding and day school programs for grades 7-12. The academy is situated on a 206-acre campus located in the foothills of the Blue Ridge Mountains, north of Atlanta in Gainesville, Georgia. Operating Deficits; Liquidity Off Target RMA's performance for the last six years has been characterized by deeply negative margins that are expected to continue through the intermediate term. While Fitch acknowledges improvement in operating performance for the past three years, operating margins are not expected to achieve breakeven for another four to five years. RMA has been diligent in executing a board adopted business plan to return to profitability by fiscal 2015. However, RMA's recovery has been impeded by costs incurred to improve the student experience via food service and admission and enrollment related expenditures to expand student headcount. Balance sheet resources constitute RMA's primary credit strength and have diminished substantially since 2008. Totaling over $82 million as of fiscal 2008, the academy's available funds (AF), consisting of unrestricted cash and investments declined precipitously to $41.5 million as of May 31, 2012. While AF provides strong coverage of operating expenses (213%) and adequate coverage of long-term debt (54.6%), future draws to support operations are anticipated to weaken current liquidity levels. The academy initially forecast $44.7 million in available funds for fiscal 2012 but was unable to meet the goal due to investment losses. To curb any further investment related dilution, RMA adopted a very conservative investment allocation. The academy currently holds 90% of its investments in fixed income securities and will increase the allocation to 95% by March 2013. The remainder is expected to be held in cash. This change in investment policy is noted favorably. Additionally, Fitch emphasizes the importance for the academy to maintain balance sheet resources at forecasted levels to preserve rating stability. Increased Reliance On Endowment Fund raising initiatives, which previously were minimal, have been incorporated into RMA's operating functions and offset some of the growth in expenses. Acknowledging developing revenue sources and sunk costs for future enrollment success, Fitch notes that the ability to curb costs and balance operations through enrollment driven revenue growth is key to sustain RMA's improvements and avert ratings action. Enrollment Growth Progress Evident The academy has attained a degree of stability with enrollment. Fitch favorably notes RMA enrolled 471 students in school year 2011-2012, an enrollment target forecasted for school year ending 2015. Fall 2012 enrollment (2012-2013 school year) was the highest noted in five years at 424 students, representing 19% year-over-year growth from fall 2011. The academy conservatively expects to end the school year with 480 students. Retention rates have improved along with enrollment growth. 75% of former RMA students returned in fall 2012, reflecting marked improvement from the previous four-year average (65%) retention rate. In addition to enrollment growth, RMA increased tuition and fees 4% for both 2011-2012 and 2012-2013 after holding tuition stable for 2009 and 2010. The academy still remains affordable relative to other all-boys boarding schools nationwide. Fitch will monitor ending enrollment for fiscal 2013 and fall 2014 to measure success of RMA's admission initiatives. Fitch notes that decline in current enrollment levels can further pressure the rating. Although RMA has achieved some success from following its business plan, the ability to sustain improvement can be impeded by uncertain future demand and volatility in global financial markets, which could negatively impact RMA's resource base. High Debt; Minimal Needs The debt burden remains high. Maximum annual debt service consumes 34% of fiscal 2012 unrestricted operating revenues, which is significantly in excess of Fitch investment grade guidelines for independent schools. Debt outstanding totals $72 million and is secured by all revenues of RMA and a fully funded debt service reserve. RMA can draw upon a line of credit secured by its long- term investments; however, the line is currently unutilized and has a zero balance. The academy's facilities were updated between 1994 and 2004 and are fairly new. RMA does not have significant capital needs and does not anticipate additional debt issuance. GREGORY FRIEDMAN: Court to Confirm Second Amended Plan ------------------------------------------------------ Bankruptcy Judge James M. Marlar said the second amended plan of reorganization filed by Gregory A. Friedman and Judith Mercer- Friedman may be confirmed. Judge Marlar overruled each of the objections lodged by creditor P+P LLC. Judge Marlar said the Chapter 11 case is progressing as it should, and the Court finds that the Debtors have presented themselves in the best possible light throughout. Under the Plan, all of the assets of the Debtors' estate will be vested in the Debtors and the Debtors will continue to work in their consulting and business management company. The Debtors will pay all expenses of their personal life, including taxes and insurance costs, on a current basis. The Debtors' disposable income will be deposited into an interest-bearing deposit account and distributed as provided in the Plan. In a "modification" to the Plan, the Debtors detailed exactly what amounts would be distributed as to their disposable income, pursuant to 11 U.S.C. Sec. 1115. In their Disclosure Statement, the Debtors detailed their best estimation of how creditors would fare in a hypothetical liquidation. For unsecured creditors, that estimated recovery was felt to be zero. A copy of the Court's Nov. 5, 2012 Memorandum Decision is available at http://is.gd/pxjFRufrom Leagle.com. Gregory A. Friedman and Judith Mercer-Friedman sought Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 07-02135) on Oct. 26, 2007, estimating under $1 million in assets and debts. GUARANTY BANK: Goldman Sachs, Others Want $900MM MBS Suit Nixed --------------------------------------------------------------- Stewart Bishop at Bankruptcy Law360 reports that Goldman Sachs & Co. and other banks urged a Texas federal judge Monday to throw out the Federal Deposit Insurance Corp.'s $900 million suit over mortgage-backed securities sold to now-collapsed Guaranty Bank, saying the action is time-barred. The FDIC, which took over Guaranty after the bank collapsed in 2009, originally filed the suit in Texas state court Aug. 17, targeting Goldman, Ally Securities LLC, Deutsche Bank Securities Inc., JPMorgan Securities LLC, Structured Asset Mortgage Investments II Inc. and The Bear Stearns Cos. LLC, Bankruptcy Law360 relates. As reported in the TCR on Aug. 24, 2009, Guaranty Bank, Austin, TX was closed August 21 by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with BBVA Compass, Birmingham, Alabama, to assume all of the deposits of Guaranty Bank, excluding those from brokers. Guaranty Bank had 103 branches in Texas and 59 branches in California. Former branches of Guaranty Bank will reopen during normal banking hours starting tomorrow as branches of BBVA Compass. Depositors of Guaranty Bank will automatically become depositors of BBVA Compass. Depositors will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until BBVA Compass can fully integrate the deposit records of Guaranty Bank. HARBINGER GROUP: Fitch Says Oil Venture Won't Affect 'B' IDR ------------------------------------------------------------ Harbinger Group Inc.'s (HRG) 'B' Issuer Default Rating (IDR) is unaffected by HRG's recent announcement that it will establish an oil and gas joint venture with EXCO Resources (EXCO). HRG will acquire a 75% limited partnership interest and a 50% general partnership interest in the joint venture, while EXCO will acquire a 25% and 50% interest, respectively. Under the terms of the transaction HRG will provide $373 million in cash towards the purchase of properties for the joint venture. Fitch views the transaction as in line with HRG's primary strategy to deploy its existing parent company cash and short-term investments to acquire and grow attractive businesses that generate sustainable free cash flow. The joint venture is expected to start distributing sustainable free cash flow to the partners shortly after the transaction is completed. HRG believes the transaction is expected to close in early 2013. The initial effect on covenant tests related to HRG's senior secured debt and preferred shares is expected to be minimal. Key rating triggers that could lead to a downgrade include a reduction in F&G Life's ordinary statutory dividend capacity to below $40 million, a change in SPB's strategy to reduce leverage to between 2.5x to 3.5x within 18 to 24 months, an increase in consolidated leverage to the 6x range, an increase in HRG (parent only) financial leverage ratio to above 70%, and the deployment of existing cash balances that increases the enterprise's credit risk. Key rating triggers that could lead to an upgrade include an significant increase in F&G Life's ordinary statutory dividend capacity from its current level of approximately $80 million, a reduction in consolidated leverage to the 4x range, a reduction in HRG (parent only) financial leverage ratio below 40%, and the deployment of existing cash balances that improves the magnitude and diversity of cash flows to HRG. HRG is a NYSE-traded holding company that is majority owned by investment funds affiliated with Harbinger Capital Partners LLC (Harbinger). Harbinger established HRG as a permanent capital vehicle to obtain controlling equity interests in established, dividend paying businesses that operate across a diversified set of industries. The company currently operates in three business segments: consumer products through its 57.5% ownership in SPB, insurance through its wholly owned subsidiary F&G Life, and Salus, an asset based lending business. Fitch rates Harbinger as follows: -- Long-Term IDR 'B'; -- $500 million 10.625% senior secured notes 'B/RR4'. The Rating Outlook is Stable. HILLTOP FARMS: Files Chapter 11 in South Dakota ----------------------------------------------- Hilltop Farms, LLC, filed a Chapter 11 petition (Bankr. Bankr. D.S.D. Case No. 12-40768) on Nov. 2, 2012, in Sioux Falls, South Dakota. Hilltop Farms, owner of properties in Brookings County, South Dakota, disclosed assets of $13.1 million and $13.5 million in liabilities as of Nov. 2, 2012. A copy of the schedules filed together with the petition is available for free at: http://bankrupt.com/misc/sdb12-40768.pdf Laura L. Kulm Ask, Esq., at Gerry & Kulm Ask, Prof LLC, serves as counsel to the Debtor. HMX ACQUISITION: Seeks Approval to Sell Canadian Affiliate ---------------------------------------------------------- Stephanie Gleason at Dow Jones' DBR Small Cap reports that HMX Group is asking the U.S. Bankruptcy Court to approve the sale of Coppley Corp., its men's clothing brand in Canada, to Tom James Co., a Tennessee-based men's suit maker. About HMX Acquisition HMX Acquisition Corp. and HMX Poland Sp. z o. o. filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 12-14300 and 12-14301) on Oct 19, 2012. On Oct. 21, 2012, affiliates HMX, LLC, Quartet Real Estate, LLC, and HMX, DTC Co. also filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Cases Nos. 12-14327 to 12-14329). Judge Allan L. Gropper presides over the cases. The Debtors are seeking to have their cases jointly administered for procedural purposes under Case No. 12-14300, which is the case number assigned to HMX Acquisition Corp. The Debtors' principal place of business is located at 125 Park Avenue, in New York. The Debtors are leading American designers, manufacturers, licensors, and licensees of men's and women's business and leisure apparel focused primarily on the luxury, bridge, and better price points. The Debtors are the largest manufacturer and marketer of U.S.-made men's tailored clothing, with an attractive portfolio of owned and licensed brands sold primarily through upscale department stores, specialty stores, and boutiques. As of Oct. 12, 2012, the Debtors had consolidated assets of $153.6 million and total liabilities of $119.5 million. Jared D. Zajac, Esq., at Proskauer Rose LLP, in New York; and Mark K. Thomas, Esq., and Peter J. Young, Esq., in Proskauer Rose LLP, in Chicago, represent the Debtors as counsel. The Debtors' investment banker is William Blair & Company, L.L.C. CDG Group, LLC, is the Debtors' financial advisor. Epiq Bankruptcy Solutions, LLC is the Debtors' claims agent. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. HOMER CITY: Files Prepack Chapter 11 to Transfer Ownership ---------------------------------------------------------- Homer City Funding LLC, a special-purpose entity created to finance a coal-fired electric generating facility 45 miles (72 kilometers) from Pittsburgh, initiated a prepackaged Chapter 11 reorganization (Bankr. D. Del. Case No. 12-13024) on Nov. 5 to transfer ownership of the plant. Bloomberg News reports that the plan was accepted before bankruptcy by the required majorities of $640 million in bonds. Homer City is asking the bankruptcy court to hold one hearing on Dec. 6 both to approve the disclosure materials and sign a confirmation order approving the prepackaged plan. The project is operated under a lease by an affiliate of power producer Edison Mission Energy. The project's owner is an entity that is 90 percent-controlled by an affiliate of General Electric Capital Corp. and 10% by an affiliate of MetLife Inc. The bonds are publicly traded. An affiliate of GECC holds $103 million, or 16 percent, of the bonds, according to a court filing. According to the report, the project was unable to pay interest on the bonds, partly because of the low price of electricity. The plant is a merchant generator because it has no long-term power- purchase agreement. It also faces large costs to curtail emissions. The report adds that when the plan is confirmed, ownership will transfer to an entity controlled by GECC and MetLife. The new owner will issue new bonds in exchange for the existing bonds. The new bonds will be in a principal amount equal to the outstanding principal and unpaid interest on the old bonds at the non-default rate. The new bonds will have the same interest rates and maturities. Interest on the new bonds can be paid by issuing more bonds through April 2014. GECC will provide the project with a $75 million secured credit on emergence from Chapter 11. The $466 million in 8.734% secured bonds due in 2026 traded Nov. 5 for 111 cents on the dollar, to yield more than 7%, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. HOMER CITY: Case Summary & 2 Unsecured Creditors ------------------------------------------------ Debtor: Homer City Funding LLC c/o Wilmington Trust, N.A. Suite 1300 1105 N. Market Street Wilmington, DE 19801 Bankruptcy Case No.: 12-13024 Chapter 11 Petition Date: Nov. 6, 2012 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Kevin Gross Debtor's Counsel: Paul Noble Heath, Esq. Zachary I Shapiro, Esq. RICHARDS, LAYTON & FINGER One Rodney Square P. O. Box 551 Wilmington, DE 19899 Tel: 302-651-7700 Fax : 302-651-7701 E-mail: heath@rlf.com shapiro@rlf.com Debtor's Claims Agent: EPIQ BANKRUPTCY SOLUTIONS Estimated Assets: $500 million to $1 billion Estimated Debts: $500 million to $1 billion The petition was signed by Thomas M. Strauss, authorized officer. Homer City Funding LLC's List of Its 2 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Bank of New York 8.734% Senior $465,976,000 Mellon Secured 101 Barclay Street Bond issued in New York, New York 10286 the original Attn: Corporate Trust Division principal amount Fax: (212) 815-5704 of $530 million, maturing in 2026 (the "Series B Bonds") The Bank of New York 8.137% Senior $174,000,000 Mellon Secured New York, New York 10286 Bond issued in Attn: Corporate Trust Division in the original Fax: (212) 815-5704 principal amount of $300 million, maturing in 2019 (the "Series A Bonds") HOUGHTON INT'L: S&P Puts 'B' CCR on Watch over Gulf Oil Deal ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on Houghton, including its 'B' corporate credit rating, on CreditWatch with negative implications. "The CreditWatch placement follows the announcement that Gulf Oil Corp., owned by Hinduja Group, has agreed to acquire Houghton from U.S.-based private equity owners, AEA Investors LP, for approximately $1.05 billion," said credit analyst Seamus Ryan. "We expect that the company will finance the deal with a mix of debt and equity. The CreditWatch placement reflects the potential for a downgrade if debt increases meaningfully without relative improvement to the business risk profile, subject to a review of the terms of the proposed transaction." "We will monitor developments associated with the pending transaction and plan to resolve the CreditWatch listing upon review of the company's financing plans and expected business and financial profiles following the transaction. We could lower the ratings if additional debt weakens financial metrics without measurable offsetting benefits to the business profile," S&P said. ICEWEB INC: D'Arelli Replaces Sherb as Accountants -------------------------------------------------- IceWEB, Inc., dismissed Sherb & Co., LLP, as the Company's independent registered public accountants and engaged D'Arelli Pruzansky, P.A., as the independent registered public accountants. The dismissal of Sherb & Co., LLP, and the engagement of D'Arelli Pruzansky was approved by the Company's Audit Committee. Sherb & Co. did not resign or decline to be reappointed as the Company's independent registered public accountants. Neither the report of Sherb & Co. dated Dec. 22, 2011, on the Company's consolidated balance sheets as of Sept. 30, 2011, and 2010 and the related consolidated statements of operations, changes in stockholders' equity (deficit), and cash flows for the years ended Sept. 30, 2011, and 2010 nor the report of Sherb & Co. dated Dec. 20, 2010, on the the Company's consolidated balance sheets as of Sept. 30, 2010, and 2009 and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the years ended Sept. 30, 2010, and 2009 contained an adverse opinion or a disclaimer of opinion, nor were either such report qualified or modified as to uncertainty, audit scope, or accounting principles. During the two most recent fiscal years and the subsequent interim period prior to the dismissal of Sherb & Co., there were no disagreements with Sherb & Co. on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Sherb & Co. would have caused it to make reference thereto in connection with its reports on each of the Company's financial statements for those years. Prior to Nov. 2, 2012, which was the date that D'Arelli Pruzanskywas engaged, the Company did not consult D'Arelli Pruzansky with respect to 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 consolidated financial statements, or any other matters or reportable events as defined in Item 304(a)(2)(i) and (ii) of Regulation S-K. About IceWEB Inc. Sterling, Va.-based IceWEB, Inc., manufactures high performance unified data storage appliances with enterprise storage management capabilities. The Company's balance sheet at June 30, 2012, showed $3.1 million in total assets, $7.9 million in total liabilities, and a stockholders' deficit of $4.8 million. Sherb & Co., LLP, in Boca Raton, Florida, stated in its report on the consolidated financial statements of the Company for the years ended Sept. 30, 2011, and 2010, that the Company had net losses of $4.7 million and $7.0 million respectively, for the years ended Sept. 30, 2011, and 2010, which raise substantial doubt about the Company's ability to continue as a going concern. INSPIRATION BIOPHARMACEUTICALS: Seeks OK of Auction Procedures -------------------------------------------------------------- Carla Main, substituting for Bloomberg News bankruptcy columnist Bill Rochelle, reports that Inspiration Biopharmaceuticals Inc. has asked the court to approve bidding procedures in connection with marketing and a proposed sale. Inspiration Bio has asked for bidding procedures that contemplate the sale of "substantially all of its assets," according to court papers. The Debtor has negotiated with secured creditor Ipsen Pharma SAS to waive its right to a credit bid "if competitive bids exceed a certain threshold," according to a filing. According to the report, the Debtor has also agreed with Ipsen Pharma "to provide essential post-petition liquidity" through a debtor-in-possession loan and to market and sell Ipsen hemophilia- related assets FIX and OBI-1 in Ipsen territories, according to court papers. Inclusion of the Ipsen assets in the sale is "vitally important to successfully market and materially enhance the value of the debtor assets," Inspiration said in a filing. About Inspiration Biopharmaceuticals Inspiration Biopharmaceuticals develops recombinant blood coagulation factor products for the treatment of hemophilia. Inspiration, based in Cambridge, Massachusetts, has two products in what the company calls "advanced clinical development." Two other products are in "pre-clinical development." None of the products can be marketed as yet. Inspiration sought Chapter 11 protection on Oct. 30, 2012 with the U.S. Bankruptcy Court in Boston, Massachusetts (Bankr. D. Mass. Case No. 12-18687). Attorneys at Murphy & King, P.C., serve as counsel to the Debtor. The petition shows assets and debt both exceed $100 million. Assets include patents, trademarks and the products in development. Liabilities include $195 million owing to Ipsen Pharma SAS, which is also a 15.5% shareholder. Ipsen is also owed $19.4 million in unsecured debt. There is another $12 million in unsecured claims. Ipsen is pledged to provide $18.3 million in financing. ITRACKR SYSTEMS: Incurs $222,900 Net Loss in Third Quarter ---------------------------------------------------------- iTrackr Systems, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $222,930 on $131,593 of revenue for the three months ended Sept. 30, 2012, compared with a net loss of $204,991 on $231,783 of revenue for the same period last year. For the nine months ended Sept. 30, 2012, the Company had a net loss $998,007 on $422,548 of revenue, compared with a net loss of $461,729 on $324,859 of revenue for the same period of 2011. The Company's balance sheet at Sept. 30, 2012, showed $2.1 million in total assets, $1.9 million in total current liabilities, and stockholders' equity of $229,824. According to the regulatory report, in the course of funding development and sales and marketing activities, the Company has sustained operating losses since inception and has an accumulated deficit of $5,970,703 and $4,972,696 at Sept. 30, 2012, and Dec. 31, 2011, respectively. "In addition, the Company has negative working capital of $1,754,938 and $1,307,926 at Sept. 30, 2012, and Dec. 31, 2011, respectively. The Company has and will continue to use significant capital to commercialize its products. These factors raise substantial doubt about the ability of the Company to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/U6jtAF Boca Raton, Fla.-based iTrackr Systems, Inc., is an ecommerce and social media software and services company. The Company has developed two technology platforms branded as RespondQ and iTrackr both of which enable web based and local businesses to increase sales through innovative technology and increased web presence. JAMES RIVER: S&P Cuts CCR to 'SD' on Discounted Note Repurchases ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Richmond, Va.-based James River Coal Co. to 'SD' (selective default) from 'CCC+'. "At the same time, we lowered our issue-level rating on the company's 7.875% senior notes due 2019 to 'D' from 'B-'. The recovery rating on these notes remains '2', indicating our expectation for substantial (70%-90%) recovery in the event of payment default. We also lowered our issue-level rating on the company's 4.5% and 3.125% convertible notes to 'D' from 'CCC-'. The recovery rating on these notes remains '6', indicating our expectation for negligible (0%-10%) recovery in the event of payment default," S&P said. "The rating actions follow James River's announcement that it had repurchased approximately $61 million of its senior and convertible notes in the third quarter and in October 2012," said credit analyst Megan Johnston. "The company bought the notes at a roughly 60% discount to their face value, and the amounts repurchased equated to approximately 9% of the previously outstanding aggregate balance. In our opinion, these repurchases constituted a distressed restructuring given the steep discount and the significant relative size of the transactions, and are tantamount to a default." "In accordance with our criteria for exchange offers and similar restructurings, we will perform a review on James River in the near term. It is our preliminary assessment that the corporate credit rating following our review would likely not be higher than the 'CCC' category, given challenging operating conditions for Central Appalachian (CAPP) thermal coal producers like James River, which we expect to persist into 2013," S&P said. JEFFERSON COUNTY: Alabama Balks at Sewer-Rate Increase ------------------------------------------------------ Katy Stech Dow Jones' Daily Bankruptcy Review reports that Alabama's top lawyer is trying to stop Jefferson County leaders from making its residents pay unfairly high sewer bills for its $3.2 billion sewer system, a network he calls overpriced because the borrowing deals that Wall Street bankers sold to the county were layered with fraud. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. JOHN D OIL: Has Until Dec. 6 to Propose Chapter 11 Plan ------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Pennsylvania extended John D. Oil, et al.'s exclusive periods to propose a Chapter 11 plan and solicit acceptances for the plan until Dec. 6, 2012, and Feb. 4, 2013, respectively. About John D. Oil Mentor, Ohio-based John D. Oil & Gas Co., is in the business of acquiring, exploring, developing, and producing oil and natural gas in Northeast Ohio. The Company has 58 producing wells. The Company also has one self storage facility located in Painesville, Ohio. The self-storage facility is operated through a partnership agreement between Liberty Self-Stor Ltd. and the Company. John D. Oil's affiliated entities -- Oz Gas, LTD. and Great Plains Exploration LLC -- filed voluntary Chapter 11 petitions (Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10058) on Jan. 11, 2012. Two days later, John D. Oil filed its own Chapter 11 petition (Bankr. W.D. Pa. Case No. 12-10063). On Nov. 21, 2011, at the request of the lender RBS Citizens, N.A., dba Charter One, a receiver was appointed for all three corporate Debtors, in the United States District Court for the Northern District of Ohio at case No. 11-cv-2089-CAB. District Judge Christopher A. Boyko issued an order appointing Mark E. Dottore as receiver. The Receivership Order was appealed to the Sixth Circuit Court of Appeals on Dec. 19, 2011 and the appeal is currently pending. Judge Thomas P. Agresti oversees the Chapter 11 cases. Robert S. Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to the Debtors. Each of Great Plains and Oz Gas estimated $10 million to $50 million in assets and debts. John D. Oil's balance sheet at Sept. 30, 2011, showed $8.12 million in total assets, $12.92 million in total liabilities and a $4.79 million total deficit. The petitions were signed by Richard M. Osborne, CEO. The United States Trustee said a committee has not been appointed because no unsecured creditor responded to the U.S. Trustee's communication for service on the committee. JOURNAL REGISTER: American Legal Approved as Administrative Agent ----------------------------------------------------------------- The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York authorized Journal Register Company, et al., to employ American Legal Claim Services, LLC as administrative agent. ALCS is expected to, among other things: a) assist with the preparation of the Debtors' schedules and statements of financial affairs by inputting and formatting data provided by the Debtors and their professionals; b) assist with discrete aspects of the Debtors' claim reconciliation process, as inputting and formatting data provided by the Debtors; and c) tabulate votes and perform subscription services as may be requested or required in connection with any and all plans filed by the Debtors and provide ballot reports and related balloting and tabulation services to the Debtors and their professionals. The Debtor previously obtained approval to hire ALCS as claims and noticing agent. About Journal Register Journal Register Company -- http://www.JournalRegister.com/-- is the publisher of the New Haven Register and other papers in 10 states, including Philadelphia, Detroit and Cleveland, and in upstate New York. The Company's more than 350 multi-platform products reach an audience of 21 million people each month. JRC is managed by Digital First Media and is affiliated with MediaNews Group, Inc., the nation's second largest newspaper company as measured by circulation. Journal Register, along with its affiliates, first filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 09-10769) on Feb. 21, 2009. Attorneys at Willkie Farr & Gallagher LLP, served as counsel to the Debtors. Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C., represented the official committee of unsecured creditors. Journal Register emerged from Chapter 11 protection under the terms of a pre-negotiated plan. Journal Register returned to bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-13774) on Sept. 5, 2012, to sell the business to 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC. The deal is subject to higher and better offers. Journal Register expects to complete the auction and sale process within 90 days. Journal Register exited the 2009 restructuring with $225 million in debt and with a legacy cost structure, which includes leases, defined benefit pensions and other liabilities that have become unsustainable and threatened the Company's efforts for a successful digital transformation. Journal Register managed to reduce the debt by 28% with the Company servicing in excess of $160 million of debt. Alden Global is the holder of two terms loans totaling $152.3 million. Alden Global acquired the stock and the term loans from lenders in Journal Register's prior bankruptcy. Journal Register disclosed total assets of $235 million and liabilities totaling $268.6 million as of July 29, 2012. This includes $13.2 million owing on a revolving credit to Wells Fargo Bank NA. Bankruptcy Judge Stuart M. Bernstein presides over the 2012 case. Neil E. Herman, Esq., Rachel Jaffe Mauceri, Esq., and Patrick D. Fleming, Esq., at Morgan, Lewis & Bockius, LLP; and Michael R. Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner, Esq., at Young Conaway Stargatt & Taylor LLP, serve as the 2012 Debtors' counsel. SSG Capital Advisors, LLC, serves as financial advisors. American Legal Claims Services LLC acts as claims agent. The petition was signed by William Higginson, executive vice president of operations. Otterbourg, Steindler, Houston & Rosen, P.C., represents Wells Fargo. Akin, Gump, Strauss, Hauer & Feld LLP, represents the Debtors' Tranche A Lenders and Tranche B Lenders. Emmet, Marvin & Martin LLP, serves as counsel to Wells Fargo, in its capacity as Tranche A Agent and the Tranche B Agent. Tracy Hope Davis, U.S. Trustee for Region 2, appointed these persons to serve on the Official Committee of Unsecured Creditors. Lowenstein Fandler PC represents the Committee. The Committee tapped FTI Consulting, Inc. as its financial advisor. JOURNAL REGISTER: Court Approves SSG Advisors as Financial Advisor ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized Journal Register Company, et al., to employ SSG Advisors, LLC, as financial advisor and investment banker. To the best of the Debtors' knowledge, SSG is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Journal Register Journal Register Company -- http://www.JournalRegister.com/-- is the publisher of the New Haven Register and other papers in 10 states, including Philadelphia, Detroit and Cleveland, and in upstate New York. The Company's more than 350 multi-platform products reach an audience of 21 million people each month. JRC is managed by Digital First Media and is affiliated with MediaNews Group, Inc., the nation's second largest newspaper company as measured by circulation. Journal Register, along with its affiliates, first filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 09-10769) on Feb. 21, 2009. Attorneys at Willkie Farr & Gallagher LLP, served as counsel to the Debtors. Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C., represented the official committee of unsecured creditors. Journal Register emerged from Chapter 11 protection under the terms of a pre-negotiated plan. Journal Register returned to bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-13774) on Sept. 5, 2012, to sell the business to 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC. The deal is subject to higher and better offers. Journal Register expects to complete the auction and sale process within 90 days. Journal Register exited the 2009 restructuring with $225 million in debt and with a legacy cost structure, which includes leases, defined benefit pensions and other liabilities that have become unsustainable and threatened the Company's efforts for a successful digital transformation. Journal Register managed to reduce the debt by 28% with the Company servicing in excess of $160 million of debt. Alden Global is the holder of two terms loans totaling $152.3 million. Alden Global acquired the stock and the term loans from lenders in Journal Register's prior bankruptcy. Journal Register disclosed total assets of $235 million and liabilities totaling $268.6 million as of July 29, 2012. This includes $13.2 million owing on a revolving credit to Wells Fargo Bank NA. Bankruptcy Judge Stuart M. Bernstein presides over the 2012 case. Neil E. Herman, Esq., Rachel Jaffe Mauceri, Esq., and Patrick D. Fleming, Esq., at Morgan, Lewis & Bockius, LLP; and Michael R. Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner, Esq., at Young Conaway Stargatt & Taylor LLP, serve as the 2012 Debtors' counsel. SSG Capital Advisors, LLC, serves as financial advisors. American Legal Claims Services LLC acts as claims agent. The petition was signed by William Higginson, executive vice president of operations. Otterbourg, Steindler, Houston & Rosen, P.C., represents Wells Fargo. Akin, Gump, Strauss, Hauer & Feld LLP, represents the Debtors' Tranche A Lenders and Tranche B Lenders. Emmet, Marvin & Martin LLP, serves as counsel to Wells Fargo, in its capacity as Tranche A Agent and the Tranche B Agent. Tracy Hope Davis, U.S. Trustee for Region 2, appointed these persons to serve on the Official Committee of Unsecured Creditors. Lowenstein Fandler PC represents the Committee. The Committee tapped FTI Consulting, Inc. as its financial advisor. LDK SOLAR: Terminates Solar Wafer Supply Contract with Sumitomo --------------------------------------------------------------- LDK Solar Co., Ltd., has reached an agreement with Japan-based Sumitomo Corporation to terminate their long-term solar wafer supply agreement. Under the terms of the agreement, originally signed in September 2008, LDK Solar was to supply multicrystalline silicon wafers to Sumitomo over an eight-year period, beginning in 2009 and extending through 2016. As part of the original agreement, Sumitomo made an advanced payment representing a portion of the contract value to LDK Solar. In exchange for LDK's agreement to terminate the supply agreement, Sumitomo has agreed to pay LDK Solar a settlement amount totaling $33.4 million. "We are pleased to have reached a mutually agreeable conclusion to our 2008 wafer supply contract with Sumitomo," stated Xiaofeng Peng, Chairman of LDK Solar. "We look forward to establishing a new commercial relationship with Sumitomo. We will continue to work closely with our customers and partners as we navigate the current industry challenges." LDK Solar is assessing the financial impact on its full year 2012 earnings of the Sumitomo termination and related contract termination charges. About LDK Solar LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province, People's Republic of China, is a vertically integrated manufacturer of photovoltaic products, including high-quality and low-cost polysilicon, solar wafers, cells, modules, systems, power projects and solutions. LDK Solar was incorporated in the Cayman Islands on May 1, 2006, by LDK New Energy, a British Virgin Islands company wholly owned by Xiaofeng Peng, LDK's founder, chairman and chief executive officer, to acquire all of the equity interests in Jiangxi LDK Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin Industrial Limited. KPMG in Hong Kong, China, said in a May 15, 2012, audit report, there is substantial doubt on the ability of LDK Solar Co., Ltd., to continue as a going concern. According to KPMG, LDK Solar has a net working capital deficit and is restricted to incur additional debt as it has not met a financial covenant ratio under a long-term debt agreement as of Dec. 31, 2011. These conditions raise substantial doubt about the Group's ability to continue as a going concern. The Company's balance sheet at June 30, 2012, showed US$6.40 billion in total assets, US$5.95 billion in total liabilities, US$254.44 million in redeemable non-controlling interests and US$192.17 million in total equity. LIFECARE HOLDINGS: Obtains Waiver From Lenders Until Dec. 15 ------------------------------------------------------------ LifeCare Holdings, Inc., entered into a Limited Waiver and Second Amendment to Credit Agreement to its Credit Agreement, dated as of Feb. 1, 2011, with LCI Holdco LLC, the requisite Secured Lenders and JPMorgan Chase Bank, N.A., as Administrative and Collateral Agent for the lenders under the Credit Agreement. Pursuant to the Agreement, the Administrative Agent and the requisite Secured Lenders have agreed: (i) to waive any Default or Event of Default during the Waiver Period arising from the failure of the Company to make the required interest payment due on Aug. 15, 2012, to the holders of its Subordinated Notes and to remedy that failure within the applicable 30-day payment grace period that ended on Sept. 14, 2012; (ii) to waive any Default or Event of Default arising from the failure of the Company to observe or perform certain other covenants, conditions or agreements contained in the Credit Agreement; and (iii) to make certain amendments to the Credit Agreement to effect those waivers. The Agreement constitutes an extension of the waiver granted by the requisite Secured Lenders in the Limited Waiver and First Amendment to the Credit Agreement on Sept. 14, 2012. The "Waiver Period" is the period from Sept. 14, 2012, to the earlier of (i) Dec. 15, 2012, and (ii) the occurrence of any Waiver Default. A "Waiver Default" will occur immediately upon the occurrence of certain events, including (a) the occurrence of a Default or Event of Default under the Credit Agreement not arising from the failure to make the interest payment on the Subordinated Notes (other than those otherwise waived by the Agreement), (b) the entry into certain refinancing transactions, (c) the making of payments under the Subordinated Notes, (d) the making of payments under certain other outstanding indebtedness of the Company without prior written consent of the requisite Secured Lenders, (e) the occurrence of an event of default under the Indenture or the termination of the Second Waiver Agreement without consent of the requisite Secured Lenders or (f) any material amendment to the Company's existing employee retention plans or adoption of new employee retention plans without approval of the requisite Secured Lenders. The occurrence of certain other events, including the failure of the Company to comply with the terms, conditions or covenants of the Agreement, will constitute a Waiver Default if those events remain uncured for five business days after written notice is given by the Administrative Agent or the requisite Secured Lenders. The Agreement also amends certain restrictions on the Company, including restrictions on the ability of the Company to make certain payments or enter into new material contracts, that were added to the Credit Agreement pursuant to the First Limited Waiver Agreement. The Agreement also imposes certain information requirements on the Company. During the Waiver Period, loans outstanding under the Credit Agreement will bear interest at a rate of 2% plus the rate otherwise applicable to that loan, which additional interest will be payable half as pay-in-kind interest and half in cash. A copy of the Limited Waiver and Second Amendment is available for free at http://is.gd/ftVt5p On Nov. 1, 2012, the Company also entered into a Second Limited Waiver Agreement to its Indenture, dated as of Aug. 11, 2005, pursuant to which the Company has outstanding $119.3 aggregate principal amount of 9.25% Senior Subordinated Notes due 2013. Pursuant to the Second Waiver Agreement, the requisite holders of the Subordinated Notes have agreed to waive the default associated with the Company's failure to pay interest on the Subordinated Notes on Aug. 15, 2012, or any Event of Default arising from the Specified Event during the Waiver Period. The Second Waiver Agreement constitutes an extension of the waiver granted by the requisite holders in the Limited Waiver Agreement on Sept. 14, 2012. The "Waiver Period" is the period from Sept. 15, 2012, to the date that is the earlier of (i) Dec. 15, 2012, and (ii) the occurrence of a Termination Event. A "Termination Event" includes (i)(x) the occurrence of an Event of Default under the Indenture other than an Event of Default resulting from the Specified Event, (y) the failure of the Company or any Guarantor to timely comply with the terms, conditions or covenants set forth in the Second Waiver Agreement or (z) the failure of any representation or warranty made by the Company or any Guarantor in the Second Waiver Agreement to be true and correct in any material respect as of the date when made and (ii) the termination of the applicable waiver period under the Agreement. The Second Waiver Agreement contains certain representations, conditions and covenants of the Company and the Guarantors, including restrictions on certain payments by the Company, the Guarantors and their respective Restricted Subsidiaries. A copy of the Second Limited Waiver Agreement is available at: http://is.gd/Demlrw About LifeCare Holdings Plano, Tex.-based LifeCare Holdings, Inc. -- http://www.lifecare-hospitals.com/-- operates 19 hospitals located in nine states, consisting of eight "hospital within a hospital" facilities (27% of beds) and 11 freestanding facilities (73% of beds). Through these 19 long-term acute care hospitals, the Company operates a total of 1,057 licensed beds and employ approximately 3,200 people, the majority of whom are registered or licensed nurses and respiratory therapists. Additionally, the Company holds a 50% investment in a joint venture for a 51-bed LTAC hospital located in Muskegon, Michigan. The Company reported a net loss of $34.83 million in 2011, compared with net income of $2.63 million on $358.25 million in 2010. The Company's balance sheet at June 30, 2012, showed $510.03 million in total assets, $566.26 million in total liabilities, and a $56.22 million total stockholders' deficit. Bankruptcy Warning "We are continuing to work with our financial advisor and lenders under our senior secured credit facility and senior subordinated notes to develop a comprehensive strategy that will allow us to refinance or restructure our existing capital structure prior to the acceleration of any indebtedness," the Company said in its quarterly report for the period ended June 30, 2012. "There can be no assurance, however, that any of these efforts will prove successful or be on economically reasonable terms. In the event of a failure to obtain necessary waivers or forbearance agreements or otherwise achieve a restructuring of our financial obligations, we may be forced to seek reorganization under Chapter 11 of the United States Bankruptcy Code." * * * In November 2010, Standard & Poor's Ratings lowered its corporate credit rating on LifeCare Holdings to 'CCC-' from 'CCC+'. "The downgrade reflects the imminent difficulty the company may have in meeting its bank covenant requirements and the risk of it successfully refinancing significant debt maturing in 2011 and 2012," said Standard & Poor's credit analyst David Peknay. The likelihood of a debt covenant violation is heightened by the company's lack of appreciable operating improvement coupled with a large upcoming tightening of is debt covenant in the first quarter of 2011. Additional equity by the company's financial sponsor may be necessary to avoid a covenant violation. Accordingly, S&P believes the chances of bankruptcy have increased. As reported by the TCR on Aug. 23, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on Plano Texas-based LifeCare Holdings Inc to 'D' from 'CCC-', following the missed interest payment on the company's $119.3 million senior subordinated notes. In the June 6, 2012, edition of the TCR, Moody's downgraded LifeCare Holdings, Inc.'s corporate family rating to Caa3 and probability of default rating to Ca. The downgrade of the corporate family rating to Caa3 reflects heightened refinancing risk, an untenable capital structure, and interest burden that is not covered by cash flows generated from the company's ongoing operations. Moody's believes LifeCare will need to address its entire capital structure in the next twelve months which is reflected in the Ca probability of default rating. As reported by the TCR on Oct. 5, 2012, Moody's Investors Service assigned a limited default (LD) designation to LifeCare Holdings, Inc.'s Ca probability of default rating. The Caa3 corporate family rating and C senior subordinated notes rating were affirmed. The limited default designation reflects the company's failure to make the subordinated notes' $5.5 million interest payment due August 15, 2012, within a 30-day grace period as provided in the original debt agreement. Moody's will remove the LD designation after resolution occurs between LifeCare and its creditors. LONSDALE TRUCKING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Lonsdale Trucking, Inc. 3060 Sherman Road Perris, CA 92570 Bankruptcy Case No.: 12-34804 Chapter 11 Petition Date: November 2, 2012 Court: U.S. Bankruptcy Court Central District of California (Riverside) Judge: Mark S. Wallace Debtor's Counsel: William D. May, Esq. LAW OFFICES OF STEPHEN R. WADE, P.C. 350 W. Fourth Street Claremont, CA 91711 Tel: (909) 985-6500 Fax: (909) 399-9900 E-mail: laurel@srwadelaw.com Estimated Assets: $50,000 to $100,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/cacb12-34804.pdf The petition was signed by David J. Lonsdale, president. LOUISIANA RIVERBOAT: Dec. 3 Hearing on Adequacy of Plan Outline --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Louisiana will convene a hearing on Dec. 3, 2012, at 9 a.m., to consider adequacy of the disclosure statement explaining Louisiana Riverboat Gaming Partnership, et al.'s proposed chapter 11 plan dated as of Oct. 26, 2012. Objections, if any, are due seven business days before the hearing. According to the Disclosure Statement, the primary purposes of the Plan are: -- provide for the sale of substantially all of the Debtors' assets to Global Gaming Legends, LLC, a Delaware limited liability company, Global Gaming Vicksburg, LLC, a Delaware limited liability company and Global Gaming Bossier City, LLC, a Delaware limited liability company, pursuant to a certain Purchase Agreement dated as of July 25, 2012; and -- provide for payments and distributions to creditors. As reported in the Troubled Company Reporter on Nov. 1, 2012, casinos in Bossier City, Louisiana, and Vicksburg, Mississippi, will be sold for $125 million to an affiliate of the Chickasaw Nation. No bids were submitted in competition with the tribe's, so an auction this month was canceled. The tribe owns 17 casinos already. The report related that consequently, approval of the sale will occur in conjunction with confirmation of a Chapter 11 reorganization plan. The federally recognized Chickasaw tribe will pay the purchase price with $61.5 million in new first-lien debt and $36 million in second-lien debt. The remainder will be in cash. Although the price is less than the $181.2 million in first-lien debt, the lenders previously announced support for the sale. The plan will generate a 67% recovery for the first lien lenders. The second- lien lenders, owed $116.3 million, will recover nothing on their secured claim because the properties aren't worth as much as the first-lien debt. The report noted that the deficiency claims of the first-lien lenders, along with the second-lien lenders' claims, will participate in the class of unsecured creditors, where claims are projected to total $177 million, according to the disclosure statement. If unsecured creditors vote in favor of the plan as a class, they will split $40,000, for a recovery amounting to a small fraction of 1%. The Chickasaw tribe's properties include the Lone Star Park horse racetrack near Dallas. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/LOUISIANA_RIVERBOAT_ds.pdf About Legends Gaming Legends Gaming LLC, owns gaming facilities located in Bossier City, Louisiana, and Vicksburg, Mississippi, operating under the DiamondJack's trade name. Legends Gaming LLC, and five related entities, including Louisiana Riverboat Gaming Partnership, filed Chapter 11 petitions (Bankr. W.D. La. Case No. 12-12013) in Shreveport, Indiana, on July 31, 2012, to sell the business for $125 million to Global Gaming Solutions LLC, absent higher and better offers. Legends Gaming acquired the business from Isle of Capri Casinos Inc., in 2006 for $240 million. After breaching covenant with lenders, the Debtors in March 2008 sought Chapter 11 protection, jointly administered under Louisiana Gaming Partnership (Case No. 08-10824). The Debtors emerged from bankruptcy in September 2009 and retained ownership and operation of two "DiamondJacks" hotels and casinos in Bossier City and Vicksburg. The Plan restructured $162.1 million owed to the first lien lenders and $75 million owed to secured lien lenders, which would be paid in full, with interest, over time. The Debtors' properties comprise 60,000 square feet of gaming space with 1,913 slot machines, 48 table games and 693 hotel rooms. Revenues in fiscal 2011 were $99.8 million in Louisiana and $39.7 million in Mississippi. As of July 31, 2012, first lien lenders are owed $181.2 million and second lien lenders are owed $114.7 million. Louisiana Riverboat Gaming Partnership disclosed $104,846,159 in assets and $298,298,911 in liabilities as of the Chapter 11 filing. Attorneys at Heller, Draper, Hayden Patrick & Horn serve as counsel to the Debtors. Sea Port Group Securities, LLC is the financial advisor. Kurtzman Carson Consultants LLC as is the claims and notice agent. The Debtors have tapped Jenner & Block LLP as special counsel. METAL SERVICES: Moody's Cuts CFR/PDR to 'B2'; Outlook Stable ------------------------------------------------------------ Moody's Investors Service downgraded Metal Services LLC's ("Phoenix") the Corporate Family Rating and Probability of Default Rating to B2 from B1, and assigned B1 ratings to the company's proposed $305 million senior secured credit facilities. Proceeds from the proposed transaction will be used to refinance existing bank debt, put cash on the balance sheet to fund upcoming capital commitments, and pay transaction-related fees and expenses. The rating outlook is stable. The downgrade of the CFR incorporates Moody's expectations for continued weak business conditions in the steel industry, the unfavorable impact of a recent customer bankruptcy, and some of the planned debt-funded capital spending required to restore operating performance to levels envisioned previously. Pro forma for the proposed credit facilities, financial leverage will rise to over 4 times in terms of adjusted debt/EBITDA and the company is expected to rely in part on balance sheet cash from the transaction as it makes substantive capital investments to install equipment at new customer sites. Interest coverage will decline to about 1.6 times EBIT/Interest (including non-cash payment-in-kind interest), below the 2 times that Moody's had anticipated. While these metrics could improve with recent new business wins and pro forma financial leverage will be below 4 times on a net basis, the execution risk associated with these site start-ups and the envisioned debt levels, result in a credit profile more consistent with the B2 rating level. The actions: Issuer: Metal Services, LLC Probability of Default Rating, Downgraded to B2 from B1 Corporate Family Rating, Downgraded to B2 from B1 $30 million Senior Secured Revolving Credit Facility due 2016, Assigned B1 LGD3 42% $275 million Senior Secured Term Loan B due 2017, Assigned B1 LGD3 42% Outlook, Stable The assigned ratings are subject to Moody's review of final terms and conditions of the proposed transaction, which is expected to close in the fourth quarter. The company's existing bank debt ratings will be withdrawn at closing. Rating Rationale The B2 CFR is constrained primarily by high anticipated financial leverage and a concentrated business model exposed to the highly cyclical steel industry. The company has significant customer concentration with ArcelorMittal and to a lesser extent geographic concentration in the U.S. and Europe, though new business wins will provide some additional diversity. The rating benefits from a demonstrated ability to win new business such as Nucor in 2012, strong profit margins, downside protection provided by contracted base fees and a highly variable cost structure that help offset end market volatility, and long-term contracts with major steelmakers that do not contain cross-default provisions between sites and help mitigate the customer concentration. The stable rating outlook anticipates that the company will rely on its cash balances in the near-term to help fund the portion of its capital spending program that is in excess of internally- generated cash flow, but with improved EBITDA financial leverage will fall towards 4 times over that horizon. The outlook also assumes that the company will maintain good liquidity to support its operations. Moody's could upgrade the rating if management meets its operating targets, reduces leverage to the mid 3 times area, and is expected to maintain leverage well below 4 times through a cyclical downturn. Moody's could downgrade the rating with expectations for leverage exceeding 5 times, interest coverage approaching 1 time EBIT/Interest, or sustained negative free cash flow. Erosion in liquidity, debt-funded acquisitions, or sponsor dividends could also have negative rating implications. The principal methodology used in rating Metal Services LLC was the Global Steel Industry Methodology published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Kennett Square, Pennsylvania, Metals Services LLC provides on-site steel mill services. The company was founded by CEO Douglas Lane in 2006 and has been majority-owned by private equity firm Olympus Partners since 2009. MICROVISION INC: Incurs $3.8-Mil. Net Loss in Third Quarter ----------------------------------------------------------- MicroVision, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $3.8 million on $2.6 million of total revenue for the three months ended Sept. 30, 2012, compared with a net loss of $7.8 million on $1.8 million of total revenue for the same period last year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $18.6 million on $5.6 million of total revenue, compared with a net loss of $26.0 million on $4.1 million of total revenue for the same period of 2011. The Company's balance sheet at Sept. 30, 2012, showed $16.8 million in total assets, $8.2 million in total liabilities, and stockholders' equity of $8.6 million. PricewaterhouseCoopers LLP, in Seattle, Washington, expressed substantial doubt about MicroVision's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency. A copy of the Form 10-Q is available at http://is.gd/lIB7ZE Redmond, Washington-based MicroVision, Inc., provides the PicoP(R) display technology platform designed to enable next-generation display and imaging products for consumer devices, vehicle displays and wearable displays. The Company's patented PicoP display technology combines a Micro-Electrical Mechanical Systems (MEMS) scanning mirror with highly efficient laser light sources to create vivid images with high contrast and brightness. MONITOR COMPANY: Consulting Firm Files Ch.11; Sells to Deloitte --------------------------------------------------------------- Consulting firm Monitor Company Group Limited Partnership said Nov. 7 it has agreed to join forces with Deloitte, one of the world's largest professional services providers. The transaction is subject to certain conditions and Monitor expects it to close as soon as practicable following their satisfactory completion. To help facilitate this proposed transaction and preserve the firm's considerable value as a going concern, the assets will be sold by means of a court-approved sale under Section 363 of the U.S. Bankruptcy Code. The transaction with Deloitte would be completed following approval of the U.S. Bankruptcy Court in Wilmington, Delaware and is subject to, among other things, higher or otherwise better offers, as well as regulatory approvals. Stephanie Gleason, writing for Dow Jones' Daily Bankruptcy Review, reports that Deloitte has agreed to purchase Monitor's assets for $116.2 million and assume some liabilities. The offer will be tested in an auction process. According to Monitor's statement, increasing demand for tighter integration between strategy and implementation makes Monitor and Deloitte a natural fit. As a pure-play strategy consultant, Monitor was facing increasing financial pressure as a stand-alone business. The recent economic downturn drove Monitor to evaluate its strategic options and determine that Deloitte was not only the right strategic match, but also provided the opportunity for substantial short-term and long-term growth as well as opportunities for its employees and clients. Under the asset purchase agreement with Monitor, Deloitte Consulting LLP will acquire Monitor's U.S. practice, and practices outside the U.S. will be acquired by certain other member firms of Deloitte Touche Tohmatsu Limited. Monitor intends to continue serving its clients in the ordinary course and has filed a number of customary motions seeking court authorization to continue to support its business operations. Gadhafi Link Dow Jones' Ms. Gleason reports that Monitor Co. became the subject of intense scrutiny when in early 2011 it was revealed, prior to the U.S. intervention, that the firm had accepted a $3 million contract with the Libyan government and deceased Libyan dictator Moammar Gadhafi. The project was aimed at helping Mr. Gadhafi be seen "as a thinker and intellectual, independent of his more widely known and very public persona as the Leader of the Revolution in Libya." The company, DBR relates, later admitted that the contract was a mistake, but not before it became the subject of numerous news articles. Ms. Gleason also reports that during the 2008 recession, Monitor said in court documents, demand for consulting work slowed dramatically. Revenues shrank and liquidity tightened. The firm's partners advanced $4.5 million to the company and passed on $20 million in bonuses in 2009. It also raised $51 million by issuing notes to private equity firm Caltius Capital Management. According to the DBR report, Monitor said it was unable to pay rent on its Cambridge headquarters in September and October. It negotiated a plan to catch up on the payments but said it will be unable to make that payment this month. It also missed an interest payment to Caltius, putting the notes in default. DBR notes Monitor was founded in 1983 by Harvard Business School professors Michael Porter and Mark Fuller, along with Joseph Fuller. It has 1,200 employees in 17 countries. Monitor may be reached at: Contact: Eamonn Kelly Email: Eamonn_Kelly@monitor.com Tel: 415-932-5358 Founded in 1983, Monitor Company Group LP -- http://www.monitor.com/-- is a global consulting firm headquartered in Cambridge, Massachusetts. The firm advises for- profit, sovereign, and non-profit clients in growing their businesses and economies and furthering their charitable purposes. Monitor creates and sustains leading, world-class capabilities in the management disciplines essential to growth -- including strategy, marketing, organizational design and innovation -- and brings those capabilities to bear in a pragmatic and customized way for clients. Monitor authors have published more than 80 articles in leading business journals and have published some of the most influential business strategy books of the last 25 years NEWPAGE CORP: Wins OK to Send Ch. 11 Plan to Creditors for Vote --------------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that NewPage Corp. on Tuesday won Delaware bankruptcy court approval for the disclosure statement detailing its reorganization plan, allowing the struggling paper company to submit the plan to creditors for a vote. At a court hearing in Wilmington, Del., U.S. Bankruptcy Judge Kevin Gross said he would sign off on the disclosures once they are submitted with minor language changes requested by creditors, according to Bankruptcy Law360. BankruptcyData.com reports that NewPage Corp. filed with the U.S. Bankruptcy Court Second Amended Joint Chapter 11 Plan and Disclosure Statement. According to the Disclosure Statement, "Under the Plan, the First Lien Noteholders will receive, among other consideration, 100 percent of the equity in the Reorganized Debtors. The Second Lien Noteholders and certain other unsecured creditors (excluding certain trade creditors) will receive their pro rata share of (i) $30 million in cash and (ii) the first $50 million in proceeds that are realized by a Litigation Trust. After the first $50 million received by the Litigation Trust, any additional proceeds received by the Litigation Trust will be shared by the First Lien Noteholders, the Second Lien Noteholders and certain unsecured creditors. For the avoidance of doubt, the First Lien Noteholders will be entitled to receive distributions on account of the foregoing distributions through the enforcement of certain subordination rights and/or their deficiency claim, as provided for in the Plan. Certain trade creditors who agree to provide credit terms as specified in the Plan will receive a 15% recovery on their Claims over a two year period. Consistent with the foregoing, on the Effective Date of the Plan, the Debtors will fund the Litigation Trust with: (i) $40 million in cash (less $500,000 retained by the Debtors for the SEO Professional Fees) that the Debtors had previously allocated to resolving issues related to PM35 located in the Debtors' Stevens Point, Wisconsin mill, and (ii) the Committee Litigation Claims. In addition, the Debtors will provide $5 million for trust administration expenses, which will be repaid to the Debtors from certain proceeds of the Litigation Trust (other than the initial $40 million cash deposit referenced above)." 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. An affiliate, Newpage Wisconsin System Inc., disclosed $509,180,203 in liabilities in its schedules. See http://bankrupt.com/misc/NEWPAGE_CORPORATION_wisconsin_sal.pdf NEW WESTERN: Incurs $105,500 Net Loss in Third Quarter ------------------------------------------------------ New Western Energy Corp. reported a net loss of $105,525 on $24,398 of revenues for the three months ended Sept. 30, 2012, compared with a net loss of $38,494 on $42,567 of revenues for the same period last year. For the nine months ended Sept. 30, 2012, the Company had a net loss of $321,836 on $76,043 of revenues, compared with a net loss of $198,960 on $42,567 of revenues for the same period of 2011. The Company's balance sheet at Sept. 30, 2012, showed $1.2 million in total assets, $283,041 in total liabilities, and stockholders' equity of $879,347. At Sept. 30, 2012, the Company had a working capital deficit of $217,216, incurred a net loss of $321,836 during the nine months ended Sept. 30, 2012, and used cash in operating activities of $190,162. A copy of the Form 10-Q is available at http://is.gd/v7DObV About New Western Energy Irvine, Calif.-based New Western Energy Corporation is an oil and gas and mineral exploration and production company with current projects located in Kansas, Oklahoma and Texas. * * * Salberg & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about New Western Energy's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has a net loss and net cash used in operating activities in 2011 of $378,453 and $328,965, respectively, and has working capital deficit and an accumulated deficit of $109,669 and $1.4 million, respectively at Dec. 31, 2011. NORTHSTAR AEROSPACE: Court OKs Stipulation for Cash Collateral -------------------------------------------------------------- The U.S. Bankruptcy Court of Delaware approved a stipulation extending NSA (USA) Liquidating Corp, formerly known as Northstar Aerospace (USA) Inc., et al.'s post-sale use of cash collateral under final DIP Financing order. On July 3, 2012, the Court entered a final order authorizing the US Debtors (i) to use the cash collateral; (ii) to obtain postpetition financing. The stipulation was entered among the Debtors, Fifth Third Bank, in its capacity as DIP agent for the senior DIP lenders, prepetition agent for the prepetition senior lenders, and The Boeing Capital Loan Corporation, as lender under the junior DIP facility. The stipulation provides that, among other things: -- following the closing of the sale, $3.3 million less expenditures authorized under the budget will be remitted to the prepetition agent and held in a cash collateral account established with the prepetition agent; and -- the Debtors' authority to incur additional secured indebtedness under the DIP facility terminated as of the closing of the sale. A copy of the stipulation is available for free at http://bankrupt.com/misc/northstaraero_stipulation.pdf 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. The names of the Debtors were changed as contemplated by the approved sale transaction. 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. NOVA FINANCIAL: Files Ch.7 Bankruptcy After Banking Unit Closed --------------------------------------------------------------- Dawn McCarty at Bloomberg News reports that Nova Financial Holdings Inc. filed for Chapter 7 bankruptcy (Bankr. E.D. Pa. Case No. 12-20140) after its banking unit was closed by regulators, making it the 47th bank to fail in the U.S. this year. The Company in its Chapter 7 petition estimated assets of as much as $100,000 and debt of as much as $50 million. Nova Bank had about $483 million in assets and $432 million in deposits as of June 30, according to the Federal Deposit Insurance Corp. According to the report, shareholder lawsuits "created enough ongoing uncertainty throughout the investment community that the company's negotiations with investor groups that had expressed interest in providing new capital were unsuccessful," the Berwyn, Pennsylvania-based company said Oct. 30 in a statement. The Pennsylvania Department of Banking closed Nova Bank on Oct. 26, according to the FDIC, which became the receiver. The FDIC was unable to find another financial institution to take over the banking operations. Nova Bank's failure will cost the Deposit Insurance Fund about $91.2 million, the FDIC estimated. The Bloomberg report discloses that Nova said Oct. 30 its board decided to liquidate in bankruptcy court. The company had been following a plan to reinforce its capital base that was adopted in 2010 in conjunction with an accord with the Federal Reserve Bank of Philadelphia, according to its statement. "The ongoing effects of the weak economy negatively impacted" the company's capital position, Nova said Oct. 30 in a statement. The company said it had been following a plan intended to strengthen its capital base in accordance with a 2010 agreement with the Federal Reserve Bank of Philadelphia. The Berwyn, Pennsylvania-based company said attempts to raise new funds were thwarted by shareholder lawsuits, which scared away interested investor groups. Regulators closed Nova's bank unit on Oct. 26. NYTEX ENERGY: Incurs $288,000 Net Loss in Third Quarter ------------------------------------------------------- NYTEX Energy Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $288,033 on $931,668 of total revenues for the three months ended Sept. 30, 2012, compared with a net loss of $1.46 million on $181,470 of total revenues for the same period during the prior year. NYTEX reported a net loss of $6.58 million on $3.11 million of total revenues for the nine months ended Sept. 30, 2012, compared with a net loss of $6.86 million on $603,186 of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $11.59 million in total assets, $5.05 million in total liabilities and $6.54 million in total equity. A copy of the Form 10-Q is available for free at: http://is.gd/Iyr9fD About NYTEX Energy Located in Dallas, Texas, Nytex Energy Holdings, Inc., is an energy holding company with operations centralized in two subsidiaries, Francis Drilling Fluids, Ltd. ("FDF") and NYTEX Petroleum, Inc. ("NYTEX Petroleum"). FDF is a 35 year old full- service provider of drilling, completion and specialized fluids and specialty additives; technical and environmental support services; industrial cleaning services; equipment rentals; and transportation, handling and storage of fluids and dry products for the oil and gas industry. NYTEX Petroleum, Inc., is an exploration and production company focusing on early stage development of minor oil and gas resource plays within the United States. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Whitley Penn LLP, in Dallas, Texas, expressed substantial doubt about Nytex Energy's ability to continue as a going concern. The independent auditors noted that the Company is not in compliance with certain loan covenants related to two debt agreements. OHI INTERMEDIATE: S&P Affirms 'B+' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on OHI Intermediate Holdings Inc., a provider of wood preservation and treatment technology, utility services, and railroad infrastructure services. The outlook is stable. "At the same time, we assigned our 'B+' issue-level ratings (the same as the corporate credit rating) and '4' recovery ratings to the company's proposed $45 million revolving credit facility due 2017, $315 million term loan due 2018, and $40 million delayed draw term loan due 2018. The recovery rating of '4' indicates our expectation of average (30% to 50%) recovery for lenders in the event of a payment default," S&P said. "Our ratings affirmation reflects that we still think leverage will peak at lower than 4.5x despite the 'very aggressive' financial policy of the equity sponsor, which includes paying a debt-financed dividend a few months after acquiring OHI," said Standard & Poor's credit analyst Robyn Shapiro. "We continue to expect the company to generate positive free cash flow, with credit metrics consistent with an 'aggressive' financial risk profile, such as debt to EBITDA of about 4x and funds from operations (FFO) to total debt in the low-teens percent area. We expect modest improvements in credit metrics over the next few years, given the cash flow sweep requirement in the credit agreement, our assumptions for gradual EBITDA improvements, and our expectation that management will approach growth prudently". "The ratings on OHI reflect our assessment of the company's business risk profile as 'weak' and financial risk profile as 'aggressive.' Supporting the business profile is the company's estimate of significant market share in the niche markets for its utility pole inspection and treatment services and its wood treatment preservation technology. The aggressive financial risk profile reflects the company's private-equity ownership," S&P said. "OHI, in its utility services segment, provides utility pole inspection and treatment services to utilities and municipalities in the U.S. Demand for the company's services in this segment comes from the utilities' regulations to ensure infrastructure safety and reliability. U.S. utility infrastructure is aging, and increase in utility customers' outsourcing of needed maintenance should push continued growth in this business. In the legacy niche wood preservative chemicals industry, demand for the company's product can vary with discretionary outdoor residential repair and remodeling spending," S&P said. "Finally, we expect demand for the company's railroad infrastructure services, including bridge inspection, engineering, maintenance, repair, and construction services, to remain relatively consistent over time as aging rail infrastructure, increased tonnage of railcars, and regulatory mandates continue to propel demand for the company's services. We assume the company will make small acquisitions in some or all of these segments," S&P said. "The company's cash flows benefit from the recurring maintenance contracts in its utilities and railroad infrastructure services businesses. However, a portion of the railroad business contract work is on a lump-sum basis. We view these types of contracts as more risky than cost-reimbursable work because of the possibility of cost overruns. Although the company has a good track record on recent work, project execution is a critical risk inherent in construction and can result in high variability in reported results," S&P said. "We expect margins to be generally stable, although volatility in raw material costs (copper) in the company's wood preservation business could affect margins and cash flow. We understand that, to help dampen commodity cost volatility, the company buys forward to hedge projected copper consumption," S&P said. "The rating assumes the company continues its track record of successfully mitigating raw material cost volatility through hedging or passing on cost increases, albeit with some time lag," S&P said. "Our financial risk profile assessment is based on OHI's new capital structure. Pro forma for the acquisition and new debt issuance, FFO to total debt is in the low-teens percent area and we estimate debt to EBITDA is 4.2x. For the rating, we expect this ratio to be less than 4x. We consider OHI's financial policies as 'very aggressive,' given the private-equity ownership," S&P said. "Our stable rating outlook reflects our belief that OHI will achieve positive free cash flow in 2012 and 2013, given the relatively favorable trends in each of its business segments and its track record of profitability," S&P said. "However, we could lower our rating if free operating cash flow generation were to become negative or if we believed that debt to EBITDA would rise above 4.5x or higher rather than slowly declining. This could occur as a result of an unexpected decline in the wood preservation chemicals business or the company's utilities services, the adoption of a more aggressive growth plan, or a more shareholder-focused financial plan," S&P said. "We consider an upgrade unlikely because we believe the company's financial policies will remain aggressive under its private-equity owners," S&P said. ORIENTAL TRADING: S&P Puts 'B' Corp. Credit Rating on Watch Pos --------------------------------------------------------------- Standard & Poor's Ratings Services placed all its ratings, including the 'B' corporate credit rating, on Omaha, Neb.-based Oriental Trading Co. Inc. on CreditWatch with positive implications. "The CreditWatch placement follows the announcement that Berkshire Hathaway Inc. [AA+/Negative/A-1+] entered into an agreement to acquire OTC," said Standard & Poor's credit analyst Mariola Borysiak. "It also reflects our expectation that we will raise our corporate credit rating on OTC to 'BB-' from 'B'. The expected two-notch upgrade reflects our view that OTC's financial risk profile will benefit from the acquisition by much stronger Berkshire Hathaway. We anticipate that all outstanding debt at OTC will be paid off following the closure of the transaction." "In addition, we believe OTC's recent efforts to revitalize the company's brand will continue to propel operational gains and support cash flow generation for the company," S&P said. "We currently view OTC's business risk profile as 'vulnerable' and its financial risk profile as 'aggressive' under our criteria. Pro forma for the reduction of the company's term loan subsequent to the June 30, 2012, quarter we estimate that leverage is about 2.7x," S&P said. "The CreditWatch placement reflects our expectation that we could raise our corporate credit rating on OTC to 'BB-' as a result of the announced transaction and anticipation for continuous profitability gains," S&P said. PINNACLE AIRLINES: Flight Attendants Ratify 6-Year Contract ----------------------------------------------------------- Pinnacle Airlines Flight Attendants, represented by the Association of Flight Attendants-CWA (AFA) ratified a six-year agreement that preserves wages, protects affordable health care and provides job security for over 1,500 Flight Attendants. The agreement includes $6.4 million in concessions demanded by management through the Chapter 11 restructuring process. The agreement was reached with the assistance of the National Mediation Board. "Ratifying the Tentative Agreement does not mean we like it. Ratifying the agreement means we understand the value of preserving an enforceable contract, hourly wage rates, affordable health care and job protections. We worked with our professionals to minimize the impact and write key protections into the contract - and within onerous conditions we were successful. Still, the deck is stacked against the frontline workers who make Pinnacle fly. The Bankruptcy Section 1113 process for workers essentially means having to pick your poison," stated Terry French, AFA President at Pinnacle Airlines. "Flight Attendants are doing our part to solve a problem we didn't create. And, we will continue our professional work as first responders as we promote a positive future at Pinnacle. We expect Pinnacle management to do their part through their own sacrifices and putting in place a successful plan for the future of our airline," French said. The agreement was ratified by 71 percent of Flight Attendants voting. The agreement will only take effect once concessions are put in place for all work groups either through agreement or court authority. Pinnacle Airlines, a Delta Connection carrier, filed for bankruptcy in April. The Association of Flight Attendants is the world's largest Flight Attendant union. Focused 100 percent on Flight Attendant issues, AFA has been the leader in advancing the Flight Attendant profession for 67 years. Serving as the voice for Flight Attendants in the workplace, in the aviation industry, in the media and on Capitol Hill, AFA has transformed the Flight Attendant profession by raising wages, benefits and working conditions. 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. PORTER HILLS: S&P Affirms 'BB-' Rating on Series 1998 Revenue Bond ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook to stable from negative and affirmed its 'BB-' long-term rating and underlying rating (SPUR) on Grand Rapids Economic Development Corp., Mich., and Michigan Strategic Fund's series 2003 auction- rate securities. "At the same time, Standard & Poor's affirmed its 'BB-' long-term rating on Michigan Strategic Fund's series 1998 revenue bonds. Both series of bonds were issued for Porter Hills Presbyterian Village (PHPV)," S&P said. The outlook revision reflects S&P's view of various steps that PHPV has taken to stem operating losses, which it believes will be sustained as a result of the organization's investment in complimentary services and further planned initiatives to minimize expense growth, said Standard & Poor's credit analyst Avanti Paul. The 'BB-' rating reflects S&P's view of PHPV's: -- Improved occupancy in fiscal 2012, which S&P anticipates will continue as a result of the conversion of a few units to provide higher levels of care meeting community needs; -- Investment in complementary programs to diversify revenue and further expand the organization; -- Sufficient excess income in fiscal 2012, generating good 1.8x adjusted maximum annual debt service coverage in fiscal 2012; and -- Low capital spending and a lack of major capital plans funded with debt or cash. POST STREET: Approved to Sell Substantially All Assets ------------------------------------------------------ The Hon. Thomas E. Carlson of the U.S. Bankruptcy Court for the Northern District of California authorized Post Street, LLC, et al., to: i) sell substantially all of its assets pursuant to a Purchase and Sale Agreement, dated Aug. 8, 2012, between the Debtors and TIAA-CREF Global Investments LLC, and assigned by TIAA- CREF Global to Teachers Insurance and Annuity Association of America, a New York corporation by way of that certain Assignment of Purchase and Sale Agreement and Escrow Agreement dated Aug. 16, 2012, between TIAA-CREF Global and purchaser, for $79,200,000 million in cash plus or minus pro-rations and other adjustments provided for in the PSA; and ii) assume and assign certain executory contracts. The Court was informed that no objections to the motion have been filed, and that the Debtors and secured creditor Post Investors LLC's have resolved their disputes. The Court has ordered that in the event the closing of the sale of the purchased assets does not timely occur and the payment amount is not delivered to Post Investors by federal funds wire transfer by 5 p.m. PDT on Sept. 28, 2012, then the order will be null and void. The deadline will only be extended by all parties hereto, by the signing of a written stipulation filed with the Bankruptcy Court prior to Sept. 28. According to the Debtor's case docket dated Sept. 26, the Court has approved a stipulation relating to a grief extension of the Sept. 28, deadline. The Court has entered an order confirming the Debtors' Second Amended Plan of Reorganization, as modified Sept. 17, 2012. About Post Street LLC Post Street LLC, based in San Francisco, California, filed for Chapter 11 bankruptcy (Bankr. Case No. 11-32255) on June 15, 2011. Judge Thomas E. Carlson presides over the case. Jeffrey C. Krause, Esq., Eric D. Goldberg, Esq., H. Alexander Fisch, Esq., and Michael S. Neumeister, Esq., at Stutman, Treister and Glatt, in Los Angeles, serves as the Debtor's bankruptcy counsel. Nossaman LLP serves as special litigation counsel. In its amended schedules, the Debtor disclosed assets of $280,815 plus unknown amount and liabilities of $56,092,852 as of the Chapter 11 filing. The petition was signed by Stanley W. Gribble, authorized agent. Affiliate Post 240 Partners, LP, aka Festival Retail Fund 1 228 Post Street, LP, filed for Chapter 11 bankruptcy (Bank. N.D. Calif. Case No. 11-33788) on Oct. 19, 2011. The Debtor estimated both assets and debts of $50 million to $100 million. Post Street, LLC, and Post 240 Partners, L.P., own 34.41% and 65.59% tenant in common interests, respectively, in a building located at 228-240 Post Street, Union Square, San Francisco. The Debtors' Plan Plan is premised on an immediate infusion of cash, as new capital to the Debtors, provided by Stanley W. Gribble, which, together with the Debtors' Cash on hand, will be used by the Debtors, and will be in a sufficient amount, to fund the Brooks Brothers Work, establish a working capital reserve for the Debtors, and pay all Administrative Priority Claims and Priority Tax Claims. QUALTEQ INC: Court OKs Vmark Sale to Brazil's Valid USA ------------------------------------------------------- Vmark, Inc. and certain of its affiliates disclosed that the United States Bankruptcy Court for the Northern District of Illinois has approved Vmark's agreement with security solutions provider Valid USA, Inc., a wholly owned subsidiary of Valid S.A. (mf&fbovespa:VLID3), for Valid USA to purchase substantially all of the operating assets of the Vmark companies, including Versatile Card Technology, Inc., Qualteq, Inc. (d/b/a VCT-New Jersey, Inc.), Creative Automation, Unique Mailing Services, Inc., Global Card Services, Inc., Unique Embossing Services, Inc., Automated Presort, Inc., Fulfillment Xcellence, Inc., Unique Data Services, Inc., and Veluchamy, LLC, for consideration valued at approximately $51.2 million in the aggregate. The Court's approval is an important step in the sale process initiated by Vmark under section 363 of the United States Bankruptcy Code. The sale agreement is subject to customary closing conditions, with Vmark anticipating a closing on or before November 30, 2012. "I would like to thank the Vmark employees for their dedication throughout the chapter 11 process. Their hard work has made this sale possible," declared Mr. Fred C. Caruso, Vmark's court- appointed Trustee. "We are pleased and honored to have achieved this important milestone and we look forward to welcoming the Vmark customers, employees and partners into the Valid family, thereby strengthening our ability to meet today's and tomorrow's needs in the rapidly emerging digital economy," announced Sidney Levy, the Chairman of Valid. The Vmark companies operate across 7 facilities with 1,200 employees, principally around Chicago, Illinois and in South Plainfield, New Jersey. A publicly-traded Brazilian company, Valid is present in all Brazilian states and is expanding operations around the world, with its brand already recognized and respected in countries including Argentina, Spain and the United States. With a market capitalization of more than US$1 billion, and more than 5,000 employees, Valid is a proven market leader in meeting the demands for cyber and information security which has made the Valid trademark a byword for trust and credibility. PricewaterhouseCoopers Corporate Finance, LLC, Hilco Real Estate LLC, and Kirkland & Ellis LLP advised the Trustee in connection with the transaction. Dreifus Associates, Ltd., Inc. served as industry advisor to Valid, and Deutsche Bank, Deloitte LLP and DLA Piper LLP (US) provided financial and legal advice to Valid. About QualTeq Inc. South Plainfield, New Jersey-based QualTeq, Inc., engages in the design, manufacture, and personalization of plastic cards in the United States. The company manufactures magnetic, contact, and dual interface smart cards. Qualteq Inc. and 17 affiliated companies filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12572) on Aug. 14, 2011. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, serve as local counsel to the Debtors. K&L Gates LLP is the general bankruptcy counsel. Eisneramper LLP is the accountants and financial advisors. Scouler & Company is the restructuring advisors. Lowenstein Sandler PC is counsel to the Committee. Avadamma LLC disclosed $38,491,767 in assets and $36,190,943 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors. Lowenstein Sandler PC represents the Committee. Eisneramper LLP serves as its accountants and financial advisors. As reported in the Troubled Company Reporter on Feb. 23, 2012, Delaware Bankruptcy Judge Kevin J. Carey granted the request of Bank of America, N.A., to transfer the venue of the Chapter 11 cases to the U.S. Bankruptcy Court for the Northern District of Illinois. Fred C. Caruso, the Chapter 11 Trustee, tapped Hilco Real Estate, LLC, as real estate advisors. The Debtors' Third Amended Joint Plan of Reorganization provides that on or after the Confirmation Date, the applicable Debtors or Reorganized Debtors may enter into Restructuring Transactions and may take actions as the Debtors or the Reorganized Debtors determine to be necessary or appropriate to (i) effect a corporate restructuring of their respective businesses; (ii) to simplify the overall corporate structure of the Reorganized Debtors; or (iii) to preserve the value of any available net operating losses and other favorable tax attributes; or (iv) to maximize the value of the Reorganized Debtors, all to the extent not inconsistent with any other terms of the Plan or existing law. QUIGLEY CO: Seeks Two-Week Voting Time Extension for Ch. 11 Plan ---------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that Pfizer Inc. unit Quigley Co. Inc. asked a New York bankruptcy judge Monday to extend the voting deadline on its Chapter 11 plan by two weeks, saying Hurricane Sandy's aftermath has disadvantaged creditors in the Northeast, who have requested more time. According to Bankruptcy Law360, Quigley filed a motion asking U.S. Bankruptcy Judge Stuart M. Bernstein to extend the deadline by which holders of claims against it must vote to accept or reject its fifth amended plan of reorganization from Nov. 16 to Nov. 30. About Quigley Co. Quigley Co. was acquired by Pfizer in 1968 and sold small amounts of products containing asbestos until the early 1970s. In September 2004, Pfizer and Quigley took steps that were intended to resolve all pending and future claims against the Company and Quigley in which the claimants allege personal injury from exposure to Quigley products containing asbestos, silica or mixed dust. Quigley filed for bankruptcy in 2004 and has a Chapter 11 plan and a settlement with Chrysler. Quigley filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 04-15739) on Sept. 3, 2004, to implement a proposed global resolution of all pending and future asbestos- related personal injury liabilities. Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, represent the Debtor in its restructuring efforts. Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it disclosed $155,187,000 in total assets and $141,933,000 in total debts. In April 2011, the bankruptcy judge approved a plan-support agreement with Pfizer and an ad hoc committee representing 30,000 asbestors claimants. A May 20, 2011 opinion by District Judge Richard Holwell concluded that Pfizer was directly liable for some asbestos claims arising from products sold by its now non-operating subsidiary Quigley. REEVES DEVELOPMENT: Files for Chapter 11 in Louisiana ----------------------------------------------------- Reeves Development Company, LLC, a commercial and residential real estate developer, filed a Chapter 11 petition (Bankr. W.D. La. Case No. 12-21008) in Lake Charles, Louisiana on Oct. 30. The closely held developer was founded in 1998 by Charles Reeves Jr., its sole owner. Reeves Development has about 80 employees and generates about $40 million in annual revenue, according to its Web site. The Debtor has filed an application to employ Arthur A. Vingiello and the law firm of Steffes, Vingiello & McKenzie, LLC, in Baton Rouge, as counsel. The Debtor estimated assets and debts of $10 million to $50 million. According to the docket, the formal schedules of assets and liabilities and statement of financial affairs are due Nov. 13. Affiliate Reeves Commercial Properties LLC also sought court protection. RESIDENTIAL CAPITAL: U.S., Ally Object to Ocwen $3BB Purchase ------------------------------------------------------------- Peg Brickley at Dow Jones' Daily Bankruptcy Review reports that the U.S. is worried Ocwen Financial Corp. won't abide by a home- lending industry overhaul that was "designed to protect homeowners from future occurrences of mortgage-related abuse and fraud" when it takes over Residential Capital LLC's servicing platform as part of a $3 billion deal. 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. Nationstar was to make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. would serve as stalking- horse bidder for the remaining portfolio of mortgages. ResCap sold its assets at auctions that started Oct. 23. The partnership of Ocwen Financial Corp. and Walter Investment Management Corp. won the auction for the mortgage-servicing and origination assets. Their $3 billion offer defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc. Nationstar was the stalking horse bidder. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. The hearing to approve the sales is set for Nov. 19. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000 ). RG STEEL: Court Approves Settlement With W.V. Insurance Commission ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved the settlement agreement between WP Steel Venture LLC, et al., and the State of West Virginia Offices of the Insurance Commission regarding the motion of the Commissioner for relief from the automatic stay to enforce its lien against a 52-week Treasury Bill in the principal amount at maturity of $7,057,000.50 that RG Steel Wheeling, LLC, deposited with the State of West Virginia Treasurer's Office as collateral for the Company's obligations and liabilities under the State of West Virginia Workers' Compensation Act. In its motion for relief from the stay, the Commissioner argued that the funds from the collateral are necessary to cover RG Steel Wheeling LLC's workers' compensation obligations and to avoid passing those costs onto other employers or West Virginia and its taxpayers. Further, the Commissioner argued that the Debtors lack any equity in the collateral because "the actuarially-based calculation of the amount of RG Steel Wheeling's obligations to pay workers' compensation claims and benefits to its injured workers in the future, together with its other obligations under the workers' compensation program -- $13,549,078 in the aggregate -- exceeded the value of the Treasury Bill." The Debtors filed a limited objection from the motion consenting to the use of RG Steel Wheeling's collateral to pay for the Company's workers' compensation obligations, but requesting, in part, that the Court require the Commissioner to (1) substantiate its claims that the Debtors lack any equity in the collateral with appropriate documentation; and (2) provide a detailed accounting. On Sept. 26, 2012, the Commissioner revoked RG Steel Wheeling self-insured status and ordered RG Steel Wheeling to obtain insurance for its workers' compensation obligations amounting to $13,549,078. The parties agree, among other things, that: 1. Upon Bankruptcy Court approval of the Settlement Agreement, the automatic stay will be terminated solely for the purpose of permitting the Commissioner to enforce its liens against the collateral and, subject to the terms of the Agreement, to set off the proceeds against RG Steel Wheeling's obligations and liabilities under the West Virginia Workers' Compensation Act. 2. Upon the request of the Debtors, the Commissioner will provide a report of (a) the payments made on account of RG Steel Wheeling's workers' compensation claims, (b) the annual updated estimate of the Company's workers compensation claims, inclusive of the obligations or liabilities of or arising from W-P Coal Co., (c) the interest accrued on account of the Company's defaults in the payment of such claims, and (d) the costs and expenses incurred by the Commissioner in connection with the administration of the Company's workers' compensation claims. 3. If either (a) the payment in full of the Company's workers' compensation claims (exclusive of the obligations or liabilities of or arising from W-P Coal Co.) or (b) a report establishes that the collateral exceeds the Company's obligations (exclusive of the obligations or liabilities of or arising from W-P Coal Co.), the Debtors may apply to the Bankruptcy Court for the return of such excess to RG Steel Wheeling. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Huron Consulting Services LLC serves as its financial advisor. The Debtor has sold off the principal plants. The sale of the Wheeling Corrugating division to Nucor Corp. brought in $7 million. That plant in Sparrows Point, Maryland, fetched the highest price, $72.5 million. RG STEEL: Can Apply Citi Parties' Cash Collateral to WCI L/C Fees ----------------------------------------------------------------- WP Steel Venture LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware to authorize and approve the stipulation by and among Debtor RG Steel Warren, LLC, Citicorp USA, Inc., and Citibank, N.A., permitting the remaining cash collateral in the amount of $300,472 to be applied to outstanding letter of credit fees incurred by WCI Steel, Inc., a predecessor of RG Warren, in the amount of $72,480. Other than the outstanding WCI L/C Fees, the WCI L/C Obligations have been satisfied in full. Pursuant to the Stipulation, within 5 business days following the application of the cash collateral to the outstanding WCI L/C Fees, and a contingent reserve of $8,000 as security for other fees that may be owing to the Citi Parties under the Cash Collateral Agreement, the Citi Parties will return cash collateral remaining after the final application. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Huron Consulting Services LLC serves as its financial advisor. The Debtor has sold off the principal plants. The sale of the Wheeling Corrugating division to Nucor Corp. brought in $7 million. That plant in Sparrows Point, Maryland, fetched the highest price, $72.5 million. RITZ CAMERA: Taps Hilco to Sell Topeka, Kansas Property ------------------------------------------------------- Ritz Camera & Image L.L.C., et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Hilco Real Estate, LLC, as exclusive real estate agent for the sale of certain real property located in Topeka, Kansas; and waive certain reporting requirements. On Aug. 24, 2012, the Court authorized the employment of Hilco IP Services, LLC, doing business as Hilco Streambank, to serve as exclusive sales and marketing agent to the Debtors for non-core intellectual property. On Sept. 25, 2012, the Court authorized the expansion of services of Hilco Streambank, to serve as exclusive sale and marketing agent for core intellectual property. The Debtors are liquidating their remaining assets. The Debtors determined that the sale of the real property separate from the sale processes for the Debtors' other remaining assets is the best way to maximize the sale price of the real property. The Debtors agreed to pay Hilco Real according to these fee structure which includes, among other things: -- In the event the real property is sold, Hilco Real will earn a fee equal to 4.5% of the gross sale proceeds; -- Hilco Real will be paid $30,000 for negotiating the termsof an asset purchase agreement with the LOI Third party for the sale and purchase of the real property; -- In the event the real property is sold to LOI Third party or another third party for total consideration of more than $2.2 million, in addition to the Topeka Property Base Fee, Hilco Real will receive an incentive fee equal to 10% of the total consideration received by the Company in excess of $2.2 million. To the best of the Debtors' knowledge, Hilco Real is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. A hearing on Nov. 28 at 3 p.m. has been set. Objections, if any, are due Nov. 12, at 4 p.m. 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. Ritz Camera disclosed $43,692,961 in assets and $49,147,316 in liabilities as of the Chapter 11 filing. 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, pursuant to Section 1102(a)(1) of the Bankruptcy Code, appointed six persons to Official Committee of Unsecured Creditors. SAHARA MOTEL: Files for Bankruptcy in New Jersey ------------------------------------------------ Carla Main at Bloomberg news reports that the Sahara Motel LLC filed for bankruptcy in Camden, New Jersey (Bankr. D.N.J. Case No. 12-36557) on Nov. 7, citing less than $50,000 in assets and at least $1 million in debts. According to the report, the Debtor operates a family motel located near the beach and boardwalk at the Jersey Shore town of North Wildwood, according to a website maintained by area motels. "There have been ongoing negotiations between the debtor and the lender," said Brian Hofmeister, a lawyer for the Sahara Motel, who said he was recently brought into the case on "an emergent basis" and therefore wasn't certain whether Hurricane Sandy played a role in the filing. The Bloomberg report discloses that North Wildwood is located in Cape May County, New Jersey, a region hit hard by Hurricane Sandy Oct. 29. 510 East 18th Avenue is the largest secured creditor, holding a mortgage on the motel in the approximate amount of $1.4 million, Mr. Hofmeister said. SATCON TECHNOLOGY: Wins Further Approval to Use Cash Collateral --------------------------------------------------------------- Carla Main, substituting for Bloomberg News bankruptcy columnist Bill Rochelle, reports that Satcon Technology Corp. has obtained a second interim, or temporary, court order allowing it to use cash collateral. According to the report, Silicon Valley Bank, the Debtor's senior secured lender, agreed to the terms of the interim order. The order states that Satcon and its co-debtor units agree with Silicon Valley Bank that they are responsible "as of" Oct. 16 under the senior pre-petition loan agreement for the approximate amount of $14.536 million "plus accrued interest in the approximate amount of $88,896," as well as other fees and costs owed under the agreement, according to court papers. About SatCon Technology Based in Boston, SatCon Technology Corporation (NasdaqCM: SATC) -- http://www.satcon.com/-- and its wholly owned subsidiaries provide utility-grade power conversion solutions for the renewable energy market, primarily for large-scale commercial and utility- scale solar photovoltaic markets. Satcon Technology Corporation, along with six related entities, filed Chapter 11 petitions (Bankr. D. Del. Case No. 12-12869) on Oct. 17, 2012. Satcon disclosed assets of $92.3 million and liabilities totaling $121.9 million. Liabilities include $13.5 million in secured debt owing to Silicon Valley Bank. There is another $6.5 million in secured subordinated debt. Unsecured liabilities include $16 million on subordinated notes. The Hon. Kevin Gross presides over the case. Dennis A. Meloro, Esq., at Greenberg Traurig serves as the Debtors' counsel. Fraser Milner Casgrain LLP acts as the general Canadian counsel. Lazard Middle Market LLC serves as the Debtors' financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as the Debtors' claims and noticing agent. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. In the past three years, the stock's high of $43.92 on Jan. 18, 2011. The day before bankruptcy, the stock closed at 35 cents. On Nov. 7, the stock fell 14% to close at 17.5 cents on the Nasdaq Stock Market. SCHIFF NUTRITION: Moody's Reviews 'B1' CFR for Upgrade ------------------------------------------------------ Moody's Investors Service placed Schiff Nutrition International, Inc.'s B1 Corporate Family and B2 Probability of Default Ratings as well as its B1 Senior Secured ratings under review for upgrade. This follows the company's announcement that it has entered into an agreement to be acquired by Bayer HealthCare LLC (a wholly owned subsidiary of Bayer AG -- A3 senior unsecured rating) for approximately $1.1 billion in cash. The review for upgrade reflects the potential for Shiff to be acquired by a company with a much stronger credit profile. The transaction, barring any superior offers made for the company, is expected to close by the end of 2012. Moody's review will focus on any structural enhancements, debt protection features, or additional support from Bayer that may result from an amendment to the bank facilities should the acquisition close as contemplated. To the extent Bayer chooses to repay the facilities, ratings on Schiff's existing debt will be withdrawn. Ratings placed under review for upgrade are as follows: Corporate family rating of B1; Probability of default rating of B2; $60 million senior secured revolver expiring 2017 rated B1 (LGD 3, 33%), and $140 million senior secured term loan due 2019 rated B1 (LGD 3, 33%) Ratings Rationale Schiff's B1 Corporate Family and B2 Probability of Default ratings (currently under review for upgrade) reflect its relatively small scale and the inherent business risks of negative publicity and product liability associated with the VMNS industry. The rating is also constrained by significant customer concentration with Costco and Walmart, as well as a certain amount of event risk of debt- funded acquisitions as the industry consolidates. Schiff also operates in an intensely competitive product category with very large competitors. The ratings take into account the relatively balanced branded portfolio of VMNS products and favorable demographic trends supporting continued growth in the industry. Further, the ratings incorporate Schiff's good EBITA margins, modest leverage and low-capital expenditures. Schiff's proven ability to innovate and differentiate its branded products, coupled with its longstanding customer relationships in the mass retail channel, are credit positives that support the ratings. Moody's believes that the favorable demographic trends for VMNS products will continue to grow and that Schiff's product categories are well positioned to benefit from those trends For an upgrade (independent of the possible acquisition by Bayer Healthcare), Schiff would need to increase its scale significantly beyond its current level and demonstrate strong organic growth and good liquidity. Financial metrics would also need to remain strong such that debt-to-EBITDA can be sustained below 3.5 times and EBITA-to-interest sustained above 3 times. Schiff's ratings could be downgraded if the company's financial performance deteriorates as a result of unexpected weakness in its portfolio, material supply chain disruptions, aggressive debt funded acquisitions, or any material product recalls or liability claims. Erosion in interest coverage, leverage sustained above 5 times, or any deterioration in liquidity are all additional factors that could contribute to a downgrade. The principal methodology used in rating Schiff was the Global Packaged Goods Industry Methodology published in July 2009. Other methodologies used include Loss given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Schiff, headquartered in Salt Lake City, Utah, develops, manufactures, markets and distributes branded and private label vitamins, minerals and nutritional supplements in the U.S. and abroad. Key brands include Schiff Move Free(R), Schiff(R) Vitamins, Schiff MegaRed(R), Schiff Mega-D3(R), Tiger's Milk(R), Schiff Sustenex(R), and Schiff Digestive Advantage(R). For the twelve months ended August 31, 2012 the company generated revenue of about $286 million. SCOTSMAN INDUSTRIES: S&P Puts 'B+' Corp. Credit Rating on Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Vernon Hills-Ill. based ice machine manufacturer Scotsman Industries Inc., including its 'B+' corporate credit rating, on CreditWatch with positive implications. "The CreditWatch listing reflects our opinion that credit quality could improve following the transaction, which we believe could occur before the end of the year," said Standard & Poor's credit analyst John Sico. "Our view is supported by the strategic acquisition by a much more broadly diverse global food service equipment manufacturer that should enhance the business risk profile and by less aggressive financial policies absent private equity ownership," S&P said. "We will likely withdraw our corporate credit rating on Scotsman Industries when the transaction closes. We expect that the current bank debt outstanding will repaid at the close of the deal and we will withdraw our ratings on this debt," S&P said. SECURITY NATIONAL: Bank of America Balks at Plan Disclosures ------------------------------------------------------------ Bank of America, N.A., as administrative agent for the lenders, has asked the U.S. Bankruptcy Court for the District of Delaware to deny approval of the Disclosure Statement explaining Security National Properties Funding III, LLC, et al.'s proposed Chapter 11 Plan. According to Bank of America, the Disclosure Statement dated April 24, 2012, fails to provide adequate information regarding the most fundamental and essential components of the Plan. Further, the Disclosure Statement describes a plan that cannot be confirmed. Bank of America noted that the proposed treatment of lenders' claim under the Plan, which includes a 7 year loan amortized over 25 years at an absurdly low proposed 3.875% per annum interest rate, will not be able to meet the fair and equitable test under Section 1129(b) of the Bankruptcy Code. Further, Bank of America said that the lenders will have a substantial deficiency claim against each Debtor but one, which, upon a review of the Debtors' schedules, will give the lenders over a third of the total amount of non-insider unsecured claims with respect to each Debtor. Moreover, the Debtors will not have sufficient cash flow to pay the lenders' claims. About Security National Eureka, California-based Security National Properties Funding III LLC owns and operates 33 commercial office, retail, industrial and other properties. Security National and various affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13277) on Oct. 13, 2011. Judge Kevin Gross presides over the case. Andrew R. Remming, Esq., and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, serve as the Debtors' counsel. GCG Inc. serves as the Debtors' claims and notice agent. The Debtors' scheduled assets total $24,758,433 while scheduled liabilities total $354,657,501. The U.S. Trustee for Region 3 was unable to form an official committee of unsecured creditors. SECURITY NATIONAL: Bank of America Wants Lift Stay on Collateral ---------------------------------------------------------------- Bank of America, N.A., as administrative agent for the lenders, has asked the U.S. Bankruptcy Court for the District of Delaware to: -- value its collateral in the Chapter 11 cases of Security National Properties Funding III, LLC, et al., in light of the proposed disposition or use of the property, and in conjunction with any hearing on the disposition or use or on a plan; and -- grant relief from the automatic stay in the Debtors' primary assets, i.e. 33 income-producing real properties. Bank of America said that valuation of the properties is needed in relation to the Bank's stay relief motion to determine whether any of the Debtors lack equity in the properties. Bank of America asserted that cause exist for relief of stay because, among other things: (i) the Debtor does not have any equity in the property, and the properties are not necessary for effective reorganization; (ii) the Debtors' plan is not feasible; and (iii) the lenders' interest in the collateral is not adequately protected. About Security National Eureka, California-based Security National Properties Funding III LLC owns and operates 33 commercial office, retail, industrial and other properties. Security National and various affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13277) on Oct. 13, 2011. Judge Kevin Gross presides over the case. Andrew R. Remming, Esq., and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, serve as the Debtors' counsel. GCG Inc. serves as the Debtors' claims and notice agent. The Debtors' scheduled assets total $24,758,433 while scheduled liabilities total $354,657,501. The U.S. Trustee for Region 3 was unable to form an official committee of unsecured creditors. SPICY GOURMET: Board Approves Name Changed to BullsnBears.com ------------------------------------------------------------- Spicy Gourmet Manufacturing, Inc. announced that on Oct. 20, 2012, its Board of Directors approved a change in name of the Company to BullsnBears.com, Inc., effective at the close of business on Nov. 15, 2012. This corporate action was ratified on Oct. 20, 2012, by holders of a majority of the shares of Common Stock of SPICY acting on written consent. The Certificate of Amendment will be filed with the State of Delaware, with the action to take effect on Nov. 15, 2012. Spicy also announced that it has relocated its headquarters to Delray Beach, Florida. The new address is: 4731 W. Atlantic Ave., Suite 7 Delray Beach, FL 33445. Tel: (561) 265-5657 These changes reflect its change in business focus from the Manufacturing of Spice Mills, to building and deploying a financial networking community for both companies and individual investors. This system/portal will fulfill a current need in the market place, providing a secure and unbiased social media platform available to both novice and professional investors. About Spicy Gourmet Manufacturing Spicy Gourmet Manufacturing, Inc., was organized under the laws of the State of Delaware on Dec. 30, 2010. The Company was established as part of the Chapter 11 reorganization of Spicy Gourmet Organics, Inc. Under SGO's Plan of Reorganization, as confirmed by the U.S. Bankruptcy Court for the Central District of California, the Company was incorporated to: (1) receive and own any interest which SGO had in the manufacturing of spice mills and similar products; and (2) issue shares of its common stock to SGO's general unsecured creditors, to its administrative creditors, and to its shareholder. The Company has been in the development stage since its formation and has not yet realized any revenues from its planned operations. TEREX CORP: Moody's Rates New $850MM Senior Unsecured Notes 'B3' ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Terex Corporation's new $850 million senior unsecured notes and affirmed the company's B2 Corporate Family Rating (CFR) and Probability of default rating (PDR). The rating on the company's current senior unsecured notes was downgraded to B3 while the senior credit facility was affirmed at Ba2. The rating outlook was changed to positive from stable to reflect the expectation improving credit metrics. The company's Speculative Grade Liquidity Rating (SGL) was changed to SGL-3 from SGL-2 partially as a result of recent debt paydowns that have reduced its cash balances and to a lesser degree increased working capital requirements that are expected to accompany higher sales. Ratings Rationale The rating outlook was changed to positive from stable reflecting the expectation that Terex's operating performance and credit metrics will continue to improve as demand strengthens and the company continues to focus on margins and efficiency. The affirmation of the B2 CFR and PDR reflects the expectation for ongoing improvement in most of Terex's operating segments. Moreover, Moody's believes that the execution risks associated with the company's acquisition of Demag Cranes AG ("Demag") are mostly behind the company and that Demag will improve Terex's product portfolio in the important and growing port and industrial markets. The change in the company's SGL rating to SGL-3 from SGL- 2 reflects the company's lower cash balances, increased letters of credit usage, and the expectation that working capital use will increase over the next 12 months. The company's liquidity benefits from revolver availability, an improved debt maturity ladder and modest free cash flow. Proceeds from the $850 million senior unsecured issuance will go towards refinancing the company's $800 million in subordinated notes. The refinancing will extend the company's debt maturity waterfall and will also change its liability waterfall. The company's first lien credit facility was affirmed at Ba2 and reflects its position in the company's capital structure as it relates to its debt liability waterfall. Assignments: Issuer: Terex Corporation Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD4, 68%) Downgrades: Issuer: Terex Corporation Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Senior Unsecured Regular Bond/Debenture, Downgraded to B3 (LGD4, 68%) from B2 (LGD3, 47%) Affirmations: Issuer: Terex Corporation Senior Subordinated Conv./Exch. Bond/Debenture, Affirmed at Caa1 (LGD6, 95%) ($800 million notes due 2017 to be withdrawn upon close) Senior Secured Bank Credit Facility, Affirmed at Ba2 (LGD2, 16%) Issuer: Terex International Financial Services Co. Senior Secured Bank Credit Facility, Affirmed at Ba2 (LGD2, 16%) Outlook Actions: Issuer: Terex Corporation Outlook, Changed To Positive From Stable Issuer: Terex International Financial Services Co. Outlook, Changed To Positive From Stable The positive outlook could be under pressure or the ratings could be downgraded if the company's cash flow meaningfully weakens or if sales were to weaken. EBITDA to interest under 2 times, or Debt to EBITDA above 5 times could also result in a change in outlook or even the rating. Meaningfully negative free cash flow or a weakening of the company's liquidity could pressure its rating. The ratings could be upgraded if the company's leverage improved to under 4x or EBITDA/interest coverage metric improvement sustained over 3.5x. Positive free cash flow, if sustainable, could support positive traction. The principal methodology used in rating Terex was the Global Heavy Manufacturing Rating Industry Methodology published November 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Terex Corporation, headquartered in Westport, CT, is a diversified global manufacturer supporting the construction, mining, utility and other end markets. LTM revenues for through September 2012 totaled over $7 billion. TEREX CORP: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Terex Corp. The outlook is stable. "We also lowered our rating on the company's existing senior unsecured notes to 'B+' from 'BB-'. The recovery rating has been revised to '5', indicating our expectation for modest (10%-30%) recovery in a default scenario, from '4'," S&P said. "At the same time, we assigned 'B+' issue-level and '5' recovery ratings to the company's proposed $850 million senior unsecured notes, which are to be issued through separate U.S. dollar- denominated and euro-denominated offerings. Both the U.S. dollar and euro issues will be guaranteed by Terex Corp. and certain wholly owned domestic subsidiaries. The U.S. dollar notes will be issued by Terex Corp. The issuer of the European notes is Terex International Financial Services Co., an Irish subsidiary of Terex Corp.," S&P said. "The downgrade of Terex's unsecured notes reflects the increased amount of outstanding notes after the transaction that reduces recovery prospects for this class of debtholder," said Standard & Poor's credit analyst Dan Picciotto. "We affirmed our other ratings on the company because we believe operating performance will continue to improve next year, bringing credit measures in line with our expectations for the rating. Terex expects to use proceeds from the issuance to refinance $800 million of subordinated notes due 2017 and to pay related fees and expenses." "The ratings on the Westport, Conn.-based construction and industrial equipment manufacturer reflect Standard & Poor's assessment of the company's 'aggressive' financial risk profile and 'fair' business risk profile. We expect that operating performance will continue to improve in 2013 as the global economy continues its slow recovery. The company should also benefit from its acquisition of 82% of the shares of Demag Cranes AG (not rated), a Germany-based supplier of industrial cranes, port technology, and related services, in August of 2011 for about $1.1 billion. We expect Terex to generate about $7.5 billion in sales and for its adjusted EBITDA margin in 2012 to be about 9%, benefiting from higher volumes and its 2011 restructuring. Next year, we forecast revenue growth to decelerate to the mid-single digits but expect continued modest improvements in profitability to result in 10% or higher adjusted EBITDA margin," S&P said. "We believe this will support improved credit measures, including adjusted debt to EBITDA of less than 4x and funds from operations (FFO) to total debt of about 20%, which would meet our expectations for the rating after several years of very weak credit measures," S&P said. Terex manufactures a broad range of equipment for the construction and infrastructure industries. The company operates in the highly cyclical and competitive construction equipment industry, and its profitability can be volatile. However, we expect it will maintain good positions in some niche construction-related markets--such as its No. 2 position in the aerial work platform market. Terex has good geographic diversity. Europe and the U.S. each account for close to 30% of sales, and about 40% comes from the rest of the world. Terex also has decent product diversity across its five reporting segments," S&P said. "We consider Terex's financial risk profile to be aggressive because of its acquisitive strategy and our expectation for significant swings in cash flow generation through the operating cycle. Credit measures have recently been weak for the rating in recent years, but we expect them to meet our expectations in 2013. At the rating, we expect Terex to maintain FFO to total debt of 15%-20%, but metrics are likely to be volatile. Decent cash balances and a manageable maturity profile also support the ratings. Terex has also increased its credit offering to customers through Terex Financial Services (TFS). The scale of this operation is modest, with about $142 million in assets at the end of the third quarter, and we do not anticipate rapid growth in the near term," S&P said. "The outlook is stable. We believe credit measures are likely to meet our expectations for the rating within about one year. We expect a sizable tax payment--the company disclosed about $124 million through the third quarter of 2012 related to the sale of Bucyrus in 2010--to limit improvement in FFO this year, keeping FFO to total debt at about 10%. Still, we expect FFO to total debt of about 20% and adjusted debt to EBITDA of less than 4x by the end of 2013," S&P said. "We could lower the ratings if additional debt were likely to result in FFO to total adjusted debt less than 15% in 2013 and excess cash balances were not significant. We could raise the ratings if the company generates adjusted FFO to total debt of 20% and we expect further, sustained improvement that would result in meaningfully positive free cash flow generation of $200 million or more annually, on average, for the next few years," S&P said. THINKEQUITY LLC: Files for Chapter 7 Liquidation ------------------------------------------------ ThinkEquity LLC filed to liquidate in bankruptcy (Bankr. D. Del. Case No. 12-13034) on Nov. 7, about three weeks after the San Francisco-based investment bank closed its stock-trading business. Bankruptcy Law360 says the company, which listed $7 million in assets against $3.2 million of debt in its Chapter 7 petition, began winding down the business on Oct. 17, according to Eliza Sporn Fromberg, a managing director at the firm. It had around 100 employees at the time, she said. Carla Main, substituting for Bloomberg News bankruptcy columnist Bill Rochelle, reports that ThinkEquity Chief Executive Officer Greg Wright said Oct. 17 that the company was closing its stock- trading business amid a market slump and preparing to transfer its remaining investment-banking unit to another firm. He declined to identify the other firm at the time. The Bloomberg report discloses that ThinkEquity, which employed about 100 people, joined other firms closing or shrinking their stock-trading businesses as investors trade less and pay lower commissions. TOLL ROAD: Moody's Affirms 'Ba1' Underlying Rating; Outlook Neg. ---------------------------------------------------------------- Moody's Investors Service has affirmed the Ba1 underlying rating on the Toll Road Investors Partnership II LP's (TRIP II, or the project) Dulles Greenway Project Revenue Bonds. The rating outlook is negative. Ratings Rationale The Ba1 rating reflects the essential service the road provides by connecting Loudoun county to Washington DC, the growing service area and high resident income levels that should support some traffic growth and toll increases over time; the Virginia State Corporation Commission's (SCC) continuous support for toll increases that are at least on par with economic growth; the project's flexible debt service schedule and strong liquidity. The Ba1 rating also reflects the project's significant underperformance compared to original traffic and financial projections; the highly leveraged structure resulting in poor financial metrics; the possible public opposition to future rate increases given the already expensive tolls, and Moody's expectation that the project will be unable to meet future total debt service requirements through toll increases alone. TRIP II's bonds are rated Baa2 based upon the financial strength of the insurer, National Public Finance Guarantee (NPFG, rated Baa2, formerly MBIA). The negative outlook reflects the expectation that traffic may continue to experience additional declines given the federal government cuts and budget uncertainties that may affect the Washington DC service area. The negative outlook also reflects Moody's expectation that financial margins will continue to tighten as debt service escalates at a higher rate than revenue growth. The project has experienced a continuous trend of decline since 2005 with an annual average rate (AAR) of 4.5% through 2011. Though recent traffic performance has seen the lowest declines since 2005, traffic does not seem to have recovered yet. Average daily traffic declined an additional 2.5% in 2011 and growth as of September 2012 has been flat with a minor increase of 0.4%. The extent of any recovery in the Dulles Greenway's traffic in the near-term is difficult to predict given the budget uncertainties on the service area economy. While the Washington DC service area has experienced a modest recovery from the economic recession, recovery may stall as a result of the spending reductions Congress put in places in 2011, including federal job losses and reduced military spending. Loudoun County is an affluent service area and has and is expected to continue experiencing significant housing growth. Though in the longer term, this growth should translate into additional demand, the Dulles Greenway has largely underperformed original traffic projections, making it difficult to predict the extent to which housing growth will continue to support traffic growth in the near-term. The effect of TRIP II's poor traffic performance on its financial performance is currently mitigated through annual toll increases, a flexible debt service schedule, and strong liquidity. However, the benefit of these strengths will deteriorate without recovery in traffic in the near-term. Unlike traffic, TRIP II's total revenues have increased at an average annual rate of 6.6% since 2005, reflecting the benefit of annual toll increases since 2005. Moody's expects the benefit of toll increases will be more limited going forward. First, up until 2012, the project had benefited from rate increases higher than economic growth as approved by the Virginia SCC, the entity that grants the project the right to operate in the state. Starting in 2013 however, the increases will be limited to grow at the greater of CPI +1%, GDP or 2.8%,until 2020, at which time, the state will revisit the toll structure. Second, the road is currently one of the most expensive in the US, with an average rate per transaction of $4.25 in 2012 or 30.3 cents per mile compared to the adjacent Dulles Toll Road's average rate of $2.00 or 14.3 cents per mile. Though the SCC has demonstrated continuous support for toll increases, which is a credit positive, the allowance for toll increases after 2020 may be limited by public opposition to significant increases on already expensive tolls. The project is highly leveraged with negative FFO/debt, per Moody's calculations, as of 2011, but also benefits from flexibility in its debt service schedule. Debt service is growing at higher rates than revenues. Total debt service in 2011 ramped up by 27% while cash flows available for debt service grew only by 9.8% not including the one-time payment of $2 million the Partnership made to its former operator AIV following its termination of its operation and maintenance agreement. As a result, the debt service coverage ratio (DSCR) of total debt service in 2011 dropped to 1.16 times from 1.34 times in 2010. Total debt service will grow 13% in 2012 and 7% from 2013-2015, which are rates higher than historical revenue growth. As a result, financial margins will continue to tighten if revenue growth cannot keep up with the project's growing debt service requirements. The projected tightening of financial margins is mitigated by the project's flexible debt service structure, which enables the project to postpone a portion of its debt service obligations. Debt service in 2011 totaled $44.3 million, of which amount $29.1 million was mandatory. The remainder constituted scheduled early redemptions, which TRIP II is only required to make to the extent sufficient excess cash flow is available. Mandatory DSCR in 2011 was1.77 times in contrast to the 1.16 times DSCR of scheduled debt service. To date, the project has met its total scheduled debt service requirements. Additionally, as of February 2012, the project has made early retirements of its 1999B bonds totaling $63.5 million using $34.3 million of surplus cash in its Early Redemption Reserve Fund. This deleveraging measure will have a significant impact in relieving pressure on margins by reducing debt service during 2018 to 2021 though limited to only those years. The flexible debt service structure and recent 3-year reduction in leverage continue to support the Ba1 rating. The tightening of financial margins is also mitigated by strong liquidity. The project benefits from debt service and early redemption reserves equal to maximum annual debt service and 50% of maximum annual debt service respectively. As of February, 2012, the project holds $39.7 million in the Senior Debt Service Reserve and $42.4 million in the Early Redemption Reserve Fund. This provides a total coverage of approximately 1.5 years of the scheduled debt service and 2.5 years of the mandatory debt service obligations from 2013 to 2015. Other reserves include an operating reserve funded at 50% of next year's costs and an improvement fund currently holding $6 million. What Could Change the Rating - UP While the rating is currently well-positioned, the outlook coulde be revised to stable from negative if sustainable growth in traffic resumes within the next 12 to 18 months. Longer term, stronger traffic and revenue growth that improves DSCR of both mandatory and scheduled debt service could exert upward rating pressure. What Could Change the Rating - DOWN TRIP II's rating could face downward pressure if traffic declines continue over the near term. TRIP II is a special purpose company that owns a concession to operate the Dulles Greenway, a 14-mile long toll road extending westward through Loudoun County, VA (rated Aaa) from Dulles Airport to the Town of Leesburg (rated Aa1). TRIP II was acquired by Macquarie Infrastructure Group in September of 2005. The last underlying rating action was on June 27, 2011 when the rating was downgraded to Ba1 from Baa3 for TRIP II's Series 2005 and 1999 Bonds and the rating outlook was maintained as negative. The principal methodology used in this rating was Operational Toll Roads published in December 2006. TONY TOSH JR: Case Converted to Chapter 7 ----------------------------------------- Bankruptcy Judge J. Rich Leonard converted the Chapter 11 case of Tony Tosh Jr., to a liquidation under Chapter 7 of the Bankruptcy Code. The Bankruptcy Administrator in Raleigh, North Carolina, filed the motion to convert or dismiss the Debtor's case for cause, pursuant to 11 U.S.C. Sec. 1112(b)(4). The Bankruptcy Administrator contends that by failing to deposit all of his income into his DIP account, the Debtor is exhausting funds belonging to the bankruptcy estate without any reliable record and the Debtor has not made a good faith effort in the preparation of his monthly reports. The Debtor did not file a response or objection to the Bankruptcy Administrator's motion, nor did he or his counsel appear at the hearing. In deciding to convert the case, instead of dismissing it, Judge Leonard noted that the estate has sufficient assets available for a Chapter 7 trustee to administer. The Court directed the Bankruptcy Administrator to appoint a Chapter 7 trustee. A copy of the Court's Nov. 6, 2012 Order is available at http://is.gd/AeRT2Hfrom Leagle.com. Tony Tosh, Jr., filed a voluntary Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-03300) on May 1, 2012. TRAFFIC CONTROL: Committee Reaches Global Settlement ---------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Traffic Control and Safety Corporation, et al., asks the U.S. Bankruptcy Court for the District of Delaware to approve a global settlement agreement between the Debtors, the Committee and the secured lender Marwit, and certain of the Debtors' current and former officers and directors. The Committee understands that, as a result of the sale, all of the Debtors' secured claims and unsecured trade claims have been satisfied. Several unsecured claims against the Debtors' estates remain, however, the largest of which are held by the holders of unsecured subordinated notes related to that certain credit agreement dated as of May 28, 2010. Marwit Capital Partners II. L.P. and their affiliates hold the second largest remaining unsecured claim by virtue of its status as sub-debt holder. The settlement provides for, among other things, that the Committee will have standing, sole authority to prosecute, compromise, settle, or otherwise adjudicate or resolve estate claims, subject to the occurrence of the Marwit settlement Effective Date and Marwit's receipt of the Marwit Payment. Under the settlement: i) Fifth Street waives any and all claims and rights to the excess payments made to the Debtors' estates for the purpose of paying certain trade claims, which amounts to approximately $400,000. ii) the director defendants will pay, or cause to be paid $700,000 to the Debtors' estates. iii) Greg Grosch waives any and all claims that he may have against the Debtors. The parties also agree that the Plan of Liquidation will provide for an anticipated distribution to unsecured creditors of at least $600,000 and will provide for the separate classification and subordination of the sub-debt claims to the class of general unsecured claims. A copy of the settlement is available for free at http://bankrupt.com/misc/TRAFFICCONTROL_settlement.pdf 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. TRANSPORTADORA DE GAS: Fitch Lifts Issuer Default Rating From BB+ ----------------------------------------------------------------- Fitch Ratings has upgraded Transportadora de Gas Internacional S.A. E.S.P.'s (TGI) foreign and local currency Issuer Default Ratings (IDRs) to 'BBB-' from 'BB+'. These rating actions apply to USD750 million of debt outstanding. The Rating Outlook for is Stable. The rating action reflects Fitch's recent upgrade of Empresa de Energia de Bogota's (EEB) to 'BBB-', which was a result of its improving financial profile. TGI's upgrade reflects the company's linkage with its primary shareholder, EEB, which supports the company through intercompany loans. TGI's upgrade also reflects the company's improved cash flow generation due to recent investments, improving credit metrics and solid contracted position. Low Business Risk: TGI's ratings reflect the company's low business risk profile, which stems from its stable and predictable cash flow generation, as well as its strong competitive position. TGI has favorable long-term, take-or-pay contracts with approximately 80% of revenues coming from regulated fixed tariffs. The high percentage of fixed capacity payments from a diversified portfolio of off- takers adds to cash flow stability. The company has low exposure to volume risk as only approximately 20% of its revenues are linked to volume throughput. TGI's pipeline location and the importance of its service area, where 70% of the Colombian population resides, represent great growth potential and help support the company's investment grade rating. Moderate Leverage: TGI's leverage level is moderate with debt to EBITDA of approximately 2.9 times (x) in dollar terms as of Sept. 30, 2012. Including a USD370 million deeply subordinated intercompany loan from EEB, leverage would be approximately 4.3x in dollar terms. Going forward, TGI's leverage could decline in the future as a result of cash flow growth due to recent investments and the expectation of a favorable resolution of the company's current tariff dispute. As of the LTM ended Sept. 30, 2012, TGI reported an EBITDA of approximately USD263 million and total senior debt of approximately USD857 million. Parent Support and Moderate Regulatory Risk TGI benefits from its parent company's explicit and implicit support. EEB owns 68.1% of TGI, and, in turn, the District Capital of Bogota (Bogota DC; foreign currency IDR 'BBB-') owns 76.3% of EEB. TGI's ratings also incorporate its exposure to regulatory risk, as the bulk of its revenue comes from contract tariffs, which are set by the regulator. TGI's revenue is determined by the maximum allowable tariff set by the regulator every five years and adjusted according to inflation every year. The company is expected to benefits from its ongoing tariff appeal, which initially granted the company a 17% revenue increase; the company claims this increase would not compensate it for all of the investments it had made. Strong Liquidity and Low Refinancing Risk: The company's adequate liquidity position is supported by its cash on hand, strong internal cash flow generation and favorable amortization schedule. The company has no significant amounts of debt coming due before 2022. On Sept. 30, 2012, TGI's cash and marketable securities were USD105 million, and consolidated cash at EEB was USD286 million. TGI is not expected to pay dividends in the short term, but this policy may change in the future. TGI's regulated revenues are partially indexed to the U.S. dollar (approximately 60% of revenue are indexed to USD), which mitigates the risk from currency fluctuations as USD denominated revenues satisfactorily cover interest expenses. Going forward, the company's liquidity position will be supported by its internal cash flow generation and easing capital investments needs as the company completed a significant portion of its expansion plan during 2012. Capital expenditures for 2013 to 2016 are estimated at approximately USD390 million, a significant reduction from 2011 capital expenditures of USD733 million. Rating Drivers: A negative rating action or Outlook would be considered if leverage reached 4.0x and stayed above that level for sustained period of time. A positive rating action or Outlook would be considered if the company significantly reduces its leverage for a sustained period of time. VALENCE TECHNOLOGY: Wants More Time to File Chapter 11 Plan ----------------------------------------------------------- Valence Technology Inc. is seeking a 60-day extension on its Chapter 11 reorganization plan. Valence wants an extension of its exclusive periods to file and solicit acceptances for the proposed plan of reorganization until Jan. 8, 2013, and March 8, respectively. The Debtor explained that it has focused on stabilizing its operations, negotiating with its creditors and secured lenders, and obtaining debtor-in-possession financing to fund its operations during this restructuring process. Since the Petition Date, the Debtor has paid its postpetition bills in full and on time. The Debtor is also working diligently to negotiate an exit financing facility. Valence's lawyers said the company has made significant progress in the nearly four months since it filed bankruptcy, but feel Valence needs more time. "Several unresolved contingencies remain, such as finalizing the terms for exit financing," they said. About Valence Technology Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 12-11580) on July 12, 2012, in its home-town in Austin. Founded in 1989, Valence develops lithium iron magnesium phosphate rechargeable batteries. Its products are used in hybrid and electric vehicles, as well as hybrid boats and Segway personal transporters. The Debtor disclosed debt of $82.6 million and assets of $31.5 million as of March 31, 2012. Chairman Carl E. Berg and related entities own 44.4% of the shares. ClearBridge Advisors, LLC owns 5.5%. Valence expects to complete its restructuring during 2012. Judge Craig A. Gargotta presides over the case. The Company is being advised by Streusand, Landon & Ozburn, LLP with respect to bankruptcy matters. The petition was signed by Robert Kanode, CEO. On Aug. 8, 2012, the United States Trustee for Region 7 appointed five creditors to serve on the Official Committee of Unsecured Creditors of the Debtor. VILLAGIO PARTNERS: Hughes Watters Approved as General Counsel ------------------------------------------------------------- Villagio Partners Ltd., et al., sought and obtained approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Hughes Watters Askanase, LLP, as general counsel, nunc pro tunc to the Petition Date. Hughes Watters will provide these professional services: a) Rendering bankruptcy related legal advice to the Debtors regarding their continued operation and management of cash and property; b) Assisting, on behalf of the Debtors, in the preparation of necessary applications, notices, motions, answers, orders, reports, schedules, statement of affairs, and other legal papers; c) Assisting the Debtors in the negotiation and formulation of plans of reorganization and the preparation of disclosure statements; d) Assisting the Debtors in preserving and protecting the Debtors' estates; and e) Performing all other legal services for the Debtors which may be necessary or appropriate in administering the bankruptcy cases. To the best of the Debtors' knowledge and belief, the firm has no adverse connection or relationship with the Debtors, their creditors, or other parties in interest, and that the firm has no relationship which would cause its disqualification, and no actual conflict of interest exists which would render the firm ineligible to serve as counsel for the Debtors. The firm will charge for time at its normal billing rates for attorneys and paralegals, and will request reimbursement for its out-of-pocket expenses, subject to Bankruptcy Court approval. About Villagio Partners et al. Villagio Partners Ltd., along with six affiliates, filed separate Chapter 11 petitions (Bankr. S.D. Tex. Case Nos. 12-35928, 12-35930 to 12-35932, 12-35934, 12-35936 and 12-35937) in Houston on Aug. 6, 2012. The Debtors are engaged primarily in the business of owning and operating commercial retail shopping centers and offices. The Debtors' commercial real properties are located in and around the Houston Metropolitan area, including Katy, Humble and The Woodlands. The petitions were signed by Vernon M. Veldekens, CEO for The Marcel Group. The Marcel Group -- http://www.themarcelgroup.com/-- is an integrated commercial real estate firm specializing in development, construction, design, engineering, master planning, leasing and property management. Village Partners, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated assets and debts of at least $10 million. It says that a real property in Katy, Texas, is worth $24.6 million. The affiliated debtors are Compass Care Holdings Ltd., Cinco Office VWM, Greens Imperial Center, Inc., Marcel Construction & Maintenance, Ltd., Tidwell Properties, Inc., and Research-New Trails Partners, Ltd. Bankruptcy Judge Marvin Isgur presides over the case. Simon Richard Mayer, Esq., and Wayne Kitchens, Esq., at Hughes Watters Askanase, LLP, in Houston, represent the Debtors as counsel. VILLAGIO PARTNERS: Court OKs Andrews Mayers as Real Estate Counsel ------------------------------------------------------------------ Villagio Partners Ltd., et al., sought and obtained approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Andrews Myers, P.C., as special counsel to represent and advise the Debtors in al matters related to the negotiation of real property leases, as well as the sale of certain real properties, as necessary, effective as of Aug. 6, 2012. The firm will charge the Debtors' estate on an hourly basis: Patrick Hayes, Shareholder $350.00 per hour Susan George, Senior Counsel $260.00 per hour Paralegal $150.00 per hour All fees and expenses are subject to further Court approval. About Villagio Partners et al. Villagio Partners Ltd., along with six affiliates, filed separate Chapter 11 petitions (Bankr. S.D. Tex. Case Nos. 12-35928, 12-35930 to 12-35932, 12-35934, 12-35936 and 12-35937) in Houston on Aug. 6, 2012. The Debtors are engaged primarily in the business of owning and operating commercial retail shopping centers and offices. The Debtors' commercial real properties are located in and around the Houston Metropolitan area, including Katy, Humble and The Woodlands. The petitions were signed by Vernon M. Veldekens, CEO for The Marcel Group. The Marcel Group -- http://www.themarcelgroup.com/-- is an integrated commercial real estate firm specializing in development, construction, design, engineering, master planning, leasing and property management. Village Partners, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated assets and debts of at least $10 million. It says that a real property in Katy, Texas, is worth $24.6 million. The affiliated debtors are Compass Care Holdings Ltd., Cinco Office VWM, Greens Imperial Center, Inc., Marcel Construction & Maintenance, Ltd., Tidwell Properties, Inc., and Research-New Trails Partners, Ltd. Bankruptcy Judge Marvin Isgur presides over the cases. Simon Richard Mayer, Esq., and Wayne Kitchens, Esq., at Hughes Watters Askanase, LLP, in Houston, represent the Debtors as counsel. VILLAGIO PARTNERS: Court Approves Kaiser as Litigation Counsel -------------------------------------------------------------- Villagio Partners Ltd., et al., sought and obtained approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Kaiser, P.C., as special litigation counsel, effective as of the Petition Date. Kaiser will represent the Debtors in certain litigation matters separate from the bankruptcy cases. Currently, the firm represents some or all of the Debtors in the Chapter 11 cases: * Research New Trails Partners, Ltd., et al. v. Terry English d/b/a Commercial Tax Network, Cause No. 2011-04811 in the 270th District Court of Harris County, Texas; * Orleans Ventures, Ltd. v. Restoration Pros Two, Inc., et al., Cause No. 2011-27185 in the 189th District Court of Harris County, Texas; * Compass Care Holdings, Ltd. v. Sandra Silva d/b/a Mya's Playce, Cause No. 2011-67410 in the 61st District Court of Harris County, Texas; * Luebe-Jones Inc. v. Marcel Construction & Maintenance, Ltd., Cause No. 2008-46609 in the 55th District Court of Harris County, Texas; * Orleans Ventures, Ltd. v. Mohammad Ali Rehmat, Cause No. 2010-64460 in the 164 District Court of Harris County, Texas; and * Villagio Partners, Ltd. v. Ioannis Tsokos, et al., Cause No. 2010-16319 in the 55th District Court of Harris County, Texas; related to Tower Insurance Company v. Ioannis Tsokos, Cause No. 2010-16319-A in the 55th District Court of Harris County. Marcel Construction & Maintenance, Ltd., also has a claim against Tim and Amy Swanson d/b/a Hair Spa. To date no lawsuit has been filed, but litigation upon the Debtor's tenant's breach of lease is anticipated. To the extent a settlement is agreed to it will be subject to Bankruptcy Court approval. Villagio Partners, Ltd. also has a claim against Nomad Energy Inc. which recently filed a Chapter 7 bankruptcy under Case No. 12- 35261-H3-7 in the United States Bankruptcy Court for the Southern District of Texas. The Firm bills: Jeff Kaiser, Partner $250 per hour Paralegal $90 per hour About Villagio Partners et al. Villagio Partners Ltd., along with six affiliates, filed separate Chapter 11 petitions (Bankr. S.D. Tex. Case Nos. 12-35928, 12-35930 to 12-35932, 12-35934, 12-35936 and 12-35937) in Houston on Aug. 6, 2012. The Debtors are engaged primarily in the business of owning and operating commercial retail shopping centers and offices. The Debtors' commercial real properties are located in and around the Houston Metropolitan area, including Katy, Humble and The Woodlands. The petitions were signed by Vernon M. Veldekens, CEO for The Marcel Group. The Marcel Group -- http://www.themarcelgroup.com/-- is an integrated commercial real estate firm specializing in development, construction, design, engineering, master planning, leasing and property management. Village Partners, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated assets and debts of at least $10 million. It says that a real property in Katy, Texas, is worth $24.6 million. The affiliated debtors are Compass Care Holdings Ltd., Cinco Office VWM, Greens Imperial Center, Inc., Marcel Construction & Maintenance, Ltd., Tidwell Properties, Inc., and Research-New Trails Partners, Ltd. Bankruptcy Judge Marvin Isgur presides over the cases. Simon Richard Mayer, Esq., and Wayne Kitchens, Esq., at Hughes Watters Askanase, LLP, in Houston, represent the Debtors as counsel. VILLAGIO PARTNERS: U.S. Trustee Unable to Form Committee -------------------------------------------------------- The United States Trustee failed to appoint an official committee of unsecured creditors in the bankruptcy case of Villagio Partners Ltd., according to papers filed by the federal watchdog last month. The U.S. Trustee said it attempted to solicit creditors interested in serving on the Unsecured Creditors' Committee from the 20 largest unsecured creditors. After excluding governmental units, secured creditors and insiders, the U.S. Trustee has been unable to solicit sufficient interest in serving on the Committee, in order to appoint a proper Committee. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. About Villagio Partners et al. Villagio Partners Ltd., along with six affiliates, filed separate Chapter 11 petitions (Bankr. S.D. Tex. Case Nos. 12-35928, 12-35930 to 12-35932, 12-35934, 12-35936 and 12-35937) in Houston on Aug. 6, 2012. The Debtors are engaged primarily in the business of owning and operating commercial retail shopping centers and offices. The Debtors' commercial real properties are located in and around the Houston Metropolitan area, including Katy, Humble and The Woodlands. The petitions were signed by Vernon M. Veldekens, CEO for The Marcel Group. The Marcel Group -- http://www.themarcelgroup.com/-- is an integrated commercial real estate firm specializing in development, construction, design, engineering, master planning, leasing and property management. Village Partners, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated assets and debts of at least $10 million. It says that a real property in Katy, Texas, is worth $24.6 million. The affiliated debtors are Compass Care Holdings Ltd., Cinco Office VWM, Greens Imperial Center, Inc., Marcel Construction & Maintenance, Ltd., Tidwell Properties, Inc., and Research-New Trails Partners, Ltd. Bankruptcy Judge Marvin Isgur presides over the cases. Simon Richard Mayer, Esq., and Wayne Kitchens, Esq., at Hughes Watters Askanase, LLP, in Houston, represent the Debtors as counsel. VIVARO CORP: Sues Distributor for $7-Mil. Over Missed Payments -------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that Vivaro Corp. and related debtors filed an adversary proceeding in New York bankruptcy court Monday arguing that distributor Raza Communication Inc. and its principal owe them $7.4 million for failing to pay outstanding accounts receivable. Bankruptcy Law360 relates that Vivaro, along with STi Prepaid LLC, Kare Distribution Inc., STi Telecom Inc., TNW Corp., STi CC I LLC and STi CC 2 LLC, sued Raza and Salim Hemani, alleging they failed to pay Kare $1.01 million and STi Prepaid $87,000. About Vivaro Corp. Vivaro Corp., which specializes in the sale of international calling cards in the U.S., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-13810) on Sept. 5, 2012, together with six other related companies, including Kare Distribution Inc. The Debtor is represented by Frederick E. Schmidt, Esq., at Hanh V. Huynh, Esq., at Herrick, Feinstein LLP. Garden City Group Inc. is the claims and notice agent. A five-member official committee of unsecured creditors has been appointed in the case. W25 LLC: Files for Chapter 11 in Manhattan ------------------------------------------ W25 LLC filed a bare-bones Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-14526) in Manhattan on Nov. 6, 2012. Avrum J. Rosen, Esq., at The Law Offices of Avrum J. Rosen, PLLC, in Huntington, New York, serves as counsel. The Debtor estimated assets and debts of at least $10 million. WINDOW FACTORY: Chapter 11 Trustee Can Sell Business Assets ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California authorized Richard M Kipperman, Chapter 11 trustee for The Window Factory, Inc., to sell the Debtor's business assets to All American Home Improvements, Inc., pursuant to a Purchase and Sale of Certain Assets dated July 10, 2012. The buyer agreed to purchase the primary assets of the Debtor for $60,000, in their "as is/where is" condition and without warranty, including the transferable right, title and interests of the trustee, estate and the Debtor in the personal property assets located at Debtor's business locations. The Court said that no timely opposition to the motion were filed or served. About The Window Factory American Integrity Corp., Ajit Ahooja, and Herde Computer Services signed involuntary Chapter 11 petitions for The Window Factory, Inc., (Bankr. S.D. Calif. Case No. 11-19842) on Dec. 8, 2011. Judge Laura S. Taylor presides over the case. Jeffrey D. Schreiber, Esq., at The Schreiber Law Firm, serves as counsel to the petitioning creditors, which allege $407,000 in total claims. The Window Factory is engaged in the business of manufacturing, sale and installation of windows and related products. As reported in the Troubled Company Reporter on Jan. 27, 2012, the Court entered an order for relief under Chapter 11. Richard Kipperman was appointed as Chapter 11 trustee. Slater & Truxaw LLP represents the trustee as general counsel. The U.S. Trustee for Region 15 appointed Robert C. Fellmeth as consumer privacy ombudsman in the Chapter 11 case of The Window Factory, Inc. WM SIX: Has Until Dec. 31 to Use Lenox Mortgage's Cash Collateral ----------------------------------------------------------------- The Hon. J. Rich Leonard of the U.S. Bankruptcy Court for the Eastern District of North Carolina, in a second interim order, authorized WM Six Forks, LLC's continued access to cash collateral which Lenox Mortgage XVII LLC asserts an interest. The Debtor is the owner of an apartment and retail/office building in Raleigh, North Carolina known as Manor Six Forks which opened in March of 2010. The project includes 298 residential apartments and 14,000 square feet of retail space on the ground floor of the Property. As of the Petition Date, all the retail/office space is vacant and approximately 95% of the residential apartments are subject to existing leases. The lender contends that it is owed $39,027,860 as of the Petition Date. Lender also contends that the outstanding indebtedness is secured by a first mortgage lien on the project, including any rents, profits and income generated by the Project, pursuant to the Deed of Trust and Security Agreement. The Debtor has not determined the present fair market value of the project. However, the 2012 tax value of the project as assessed by Wake County is $32,544,445. The Debtor would use the cash collateral to pay on-going costs of insuring, preserving, repairing and protecting the project until the earlier of (i) Dec. 31, 2012, or (ii) the Effective Date of a confirmed plan of reorganization for the Debtor. During the interim period, the Debtor is not required to provide additional adequate protection to lender for the use of cash collateral. A hearing on Dec. 18 at 11 a.m., has been on set to consider further access to cash collateral. Lenox Mortgage has filed an objection to the Debtor's motion. About WM Six Forks WM Six Forks LLC is the owner of an apartment and retail/office complex in Raleigh, North Carolina, known as Manor Six Forks, which opened in March 2010. The property includes 298 residential apartments and roughly 14,000 square feet of retail/office space on the ground floor. As of the bankruptcy filing date, all the retail/office space is vacant and roughly 95% of the residential apartments are subject to existing leases. WM Six Forks filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-05854) on Aug. 12, 2012. The Debtor disclosed assets of $33.36 million and liabilities of $49.8 million. The Debtor said in court papers the Manor is valued at $32.54 million. The Debtor also owns a 15.15-acre property, the value of which is not yet determined. The Debtors' property serves as collateral to a $39 million debt to Lenox Mortgage XVI, LLC. A copy of the schedules filed together with the petition is available at http://bankrupt.com/misc/nceb12-05854.pdf Bankruptcy Judge J. Rich Leonard oversees the case. The Debtor hired Northen Blue, LLP as counsel. The petition was signed by William G. Garner, manager of WM6F Completion & Performance Assoc., LLC. Dawn Barnes has been assigned as case manager. YELLOWSTONE MOUNTAIN: Investors Slam Challenge to $26MM Settlement ------------------------------------------------------------------ Ama Sarfo at Bankruptcy Law360 reports that Yellowstone Mountain Club LLC investors said Tuesday that club members disputing the investors' $26 million pre-bankruptcy settlement are violating a bankruptcy stay barring the members from bringing claims, asking a Montana federal court to halt the suit. About Yellowstone Mountain Located near Big Sky, Montana, Yellowstone Mountain Club LLC -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. The Company was founded in 1999. Yellowstone Club and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Montana, Case No. 08-61570) on Nov. 10, 2008. The Company's owner affiliate, Edra D. Blixseth, filed a separate Chapter 11 petition on March 27, 2009 (Case No. 09-60452). Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green PLLC represented Yellowstone. The Debtors hired FTI Consulting Inc. and Ronald Greenspan as CRO. The official committee of unsecured creditors were represented by Parsons, Behle and Latimer; and James H. Cossitt, Esq., as counsel. Credit Suisse, the prepetition first lien lender, was represented by Skadden, Arps, Slate, Meagher & Flom. In June 2009, the Bankruptcy Court entered an order confirming Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor Capital Partners LLC acquired equity ownership in the reorganized Club for $115 million. Marc S. Kirschner, Esq., was appointed the Trustee of the Yellowstone Club Liquidating Trust created under the Plan. * California Voters Approve Local Tax Hike & New Levies ------------------------------------------------------- Alison Vekshin, writing for Bloomberg News, reports California voters on Tuesday approved statewide sales and income tax increases of $6 billion a year as well as higher sales levies in about two dozen cities and counties strained by the financial downturn. The report relates the municipalities, limited in raising property taxes, appealed for the boosts to help repair roads, pay rising pensions costs and avert further cuts to staff and services. The report also notes municipalities in California, the most populous U.S. state, can't impose higher sales taxes without going to voters, and the state caps real-estate levies at 1% of a property's most recent sales price. According to Bloomberg, voters approved Governor Jerry Brown's plan to increase the statewide sales tax to 7.5% from 7.25%, and boost rates on income starting at $250,000. Those making $1 million or more will pay 13.3%, the most of any state. The increases, which will raise an estimated $6 billion annually, are to expire by 2018. Three California cities -- Stockton, San Bernardino and Mammoth Lakes -- have filed for Chapter 9 bankruptcy since June. * Michigan Voters Repeal Law on State Takeover Law -------------------------------------------------- The Wall Street Journal's Matthew Dolan reports that voters in Michigan on Tuesday repealed a law that allowed the state to take control of financially struggling communities, raising the prospect that more such municipalities would be forced to seek bankruptcy protection. WSJ recounts Republican Gov. Rick Snyder pushed through the beefed-up emergency-manager law last year as a way to prevent insolvency at the local level and enhance the power of state- appointed overseers. Republicans, who dominate the state Legislature, argued that the earlier law didn't give local governments power to break labor contracts to stabilize their finances. Democrats and unions countered that the more powerful law disenfranchised voters, sidelined their elected leaders and unjustly threatened the right of public workers to bargain for wages, benefits and working conditions. "I'm disappointed because it makes life more difficult," said Gov. Snyder, who pushed through the legislation last year over the objections of Democrats and the state's largest unions, according to the report. WSJ relates the governor said that, without the "early warning" provisions of the law, the state may be caught unaware of the true financial condition of a city or school district that is at risk of insolvency. "The probability of municipal bankruptcy could increase," he said in a discussion with reporters Wednesday morning, WSJ says. The governor also said the vote will also put struggling municipalities at greater risk of a credit downgrade. WSJ also relates the governor said all eight emergency managers deployed in Michigan would stay in place under an earlier version of the law, but that legislation also faces a court challenge. The power-sharing agreement that Detroit and the state signed in the spring to stave off financial collapse also remains in effect, the governor said. * Fitch May Downgrade U.S. by Late 2013 if Cliff Unresolved ----------------------------------------------------------- David Riley, managing director at Fitch Ratings, wrote in a press release that the newly re-elected US President Barack Obama will need to quickly secure agreement on avoiding the 'fiscal cliff' and raising the debt ceiling following Tuesday's elections, Fitch Ratings says. The economic policy challenge facing the President is to put in place a credible deficit-reduction plan necessary to underpin economic recovery and confidence in the full faith and credit of the US. Resolution of these fiscal policy choices would likely result in the US retaining its 'AAA' status from Fitch. As reflected in the Negative Outlook on the rating, failure to avoid the fiscal cliff and raise the debt ceiling in a timely manner as well as securing agreement on credible deficit reduction would likely result in a rating downgrade in 2013. The fiscal cliff -- some $600 billion of tax increases and spending cuts that come into effect on 1 January 2013 -- and an increase in the debt ceiling are pressing issues that the President and Congress must address in the coming weeks if the US is to avoid a fiscal and economic crisis. Fitch estimates that the fiscal cliff would tip the US economy into an unnecessary and avoidable recession and result in an increase in the unemployment rate to above 10% in 2013. In Fitch's opinion, the tax increases and spending cuts implied by the fiscal cliff would not fully address the longer-term drivers of higher public spending and the relatively narrow and volatile tax base. Moreover, the fiscal cliff would likely be at least partially reversed by Congress as the economy slowed and unemployment began to rise, perpetuating the uncertainty over government tax and spending policies that has weighed on the economic recovery. Fitch is currently projecting substantial deficit reduction equivalent to around 1.5% of GDP in 2013 as part of a medium-term deficit reduction strategy. On current projections, the Treasury Secretary will likely have to implement extraordinary measures by year-end to maintain borrowing capacity under the current debt ceiling of $16.394 trillion. Failure yet again to reach agreement on raising the debt ceiling in a timely manner -- not Fitch's expectation -- would undermine confidence in the United States as a reliable borrower and thus its 'AAA' status, prompting a formal review of the US sovereign rating. Avoiding the fiscal cliff and a timely increase in the debt ceiling would support the economic recovery and send a positive signal that agreement can be reached on a credible plan to reduce the federal budget deficit and stabilise federal debt over the medium term, consistent with the US retaining its 'AAA' status. Conversely, failure to reach even a temporary arrangement to prevent the full range of tax increases and spending cuts implied by the fiscal cliff and a repeat of the August 2011 debt ceiling episode would mean that the general election had not resolved the political gridlock in Washington and likely result in a sovereign rating downgrade by Fitch. From an economic and sovereign credit perspective, the most important policy priority for the President and Congress is reaching agreement on a deficit reduction plan backed by clear targets and specific tax and spending measures that would firmly place US public finances on a sustainable path over the medium to long term. In Fitch's opinion, such a plan would significantly reduce the uncertainty that currently characterises federal tax and spending policies and underpin a sustainable economic recovery and confidence in the full faith and credit of the federal government. Fitch placed the US 'AAA' rating on Negative Outlook on 28 November 2011, following the failure of the Congressional Joint Select Committee on Deficit Reduction to reach agreement on at least $1.2 trillion of deficit-reduction measures. The failure of the so-called Super-Committee to reach agreement eroded Fitch's confidence that timely fiscal measures necessary to place US public finances on a sustainable path consistent with the US 'AAA' status would be forthcoming. Further prevarication would undermine the economic recovery and mean that federal debt would continue to rise over the foreseeable future. Federal debt held by the public currently stands at around 75% of GDP, its highest level since 1950. Without policy action, it will reach 90% of GDP by the end of the decade and continue to rise towards unsustainable levels. Assuming that the fiscal cliff is avoided and there is a timely increase in the debt ceiling, Fitch expects to resolve the Negative Outlook on the US 'AAA' sovereign rating in late 2013. Failure to reach agreement on the fiscal cliff and debt ceiling would likely trigger a rating downgrade before then. The presidential election underscored the broad political and public recognition of the importance of addressing the federal government deficit and stabilising government debt - the challenge facing President Obama and Congress is to address head-on the hard choices on tax and spending. Contact: David Riley Managing Director Tel: +44 20 3530 1175 Fitch Ratings Limited 30 North Colonnade London E14 5GN * Moody's Says PPACA Credit Neg. for Not-for-Profit Hospitals ------------------------------------------------------------- The re-election of President Barack Obama is a neutral event for the credit quality of the not-for-profit hospital industry, says Moody's Investors Service, as President Obama's healthcare policies have already been factored into the sector outlook. With the President's re-election, the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA) has a greater chance of being implemented, which Moody's has previously noted is a discreet credit positive for the sector. But PPACA overall remains a net negative overall for not-for-profit hospitals, which Moody's captures in its current negative outlook for the sector. "Significant ambiguity remains with the future of federal healthcare policy given the scope of the federal deficit," says Brad Spielman, a Moody's analyst who authored the report "The Re- Election of President Barack Obama is Credit Neutral for Not-for- Profit Hospitals." "This uncertainty continues to heighten credit risk in an already pressured operating environment," said Spielman. Key long-term credit negatives embedded in PPACA include the $150 billion in reduced Medicare reimbursement to the hospitals over the next 10 years and $14 billion of Medicaid disproportionate share cuts. The law also will introduce new payment models intended to lower reimbursements to hospitals even further. On the positive side, Moody's notes the individual mandate of PPACA is in much less jeopardy with President Obama's re-election. Because PPACA requires individuals to obtain health insurance starting in 2014, it is likely to decrease the rolls of uninsured patients appearing in hospital emergency rooms, reducing the cost of uncompensated care. Although President Obama's reelection increases the chances that most of PPACA will be implemented, significant uncertainty remains over healthcare policy and healthcare funding because of sequestration, says Moody's. Even if the administration brokers a deal in the next two months that negates sequestration, which requires a 2% reduction in Medicare payments, the size of the federal deficit will continue to pressure lawmakers to reduce federal spending on Medicare and other healthcare programs. * Moody's Says Expanded Gaming to Pressure Northeast US Market -------------------------------------------------------------- The expansion of gaming in Rhode Island and Maryland will further saturate the Northeast US regional gaming market, Moody's Investors Service says in a new report, "Rhode Island and Maryland Say Yes To Expanded Gaming." Voters in those states approved ballot measures to do so when they went to the polls Tuesday. "While certain casinos in Rhode Island and Maryland stand to gain from the expansion, we believe the current 'keeping-up-with-the- Joneses' mindset will only further deluge an already saturated gaming market," says Senior Vice President and author of the report Keith Foley. "The measures won't necessarily attract more customers. Rather, they will force operators to reach ever farther to attract the same number." Although the expansion could still lead to higher overall gaming and gaming-related revenues, Foley says, without a marked improvement in the US economy revenues are not expected to result in a material improvement in the sector's profitability as customers stay home. The measures aim to keep gamblers in Rhode Island and Maryland from spending money in neighboring states such as Massachusetts, Connecticut, New Jersey Delaware, Pennsylvania and West Virginia. In Rhode Island, their approval is credit positive for Twin River Management Group, owner of the Twin River casino. The casino already operates video lottery terminals, but had said it could lose up to 35% of its business when Massachusetts gaming opens in the next one to two years if it wasn't able to offer table games. Twin River could begin doing so as early as next summer, giving Rhode Island a first-mover advantage over Massachusetts. The expansion is credit negative for Penn National Gaming, Mohegan Tribal Gaming Authority and Mashantucket Pequot Tribe of Connecticut in Rhode Island, due to increased competition. In Maryland, the state's three existing and two planned casinos can now offer table games, while voters also supported the development of a sixth casino in Prince George's County, near the densely populated Washington, D.C. area. Table games could begin in Maryland as early as next year. The expansion in that state is bad news for Penn National, which owns and operates Hollywood Casino at Charles Town Races in West Virginia and Hollywood Casino Perryville in Maryland. Those casinos' results have already been negatively affected by the recent opening of the Maryland Live! Casino, Foley says, and the opening of a sixth casino will increase the competition even further. * WSJ Report Says Some Public Firms Mum on Bankruptcy Preparations ------------------------------------------------------------------ The Wall Street Journal's Mike Spector reports that more than two dozen companies in the past five years didn't disclose Chapter 11 bankruptcy preparations to investors, according to a Wall Street Journal analysis of regulatory filings. The report says companies, including Eastman Kodak Co. and American Airlines parent AMR Corp., refrained from warning investors about potentially seeking Chapter 11 protection from creditors despite facing dire financial straits or, in some cases, hiring restructuring advisers to make the preparations. Some of the firms only disclosed later, in court documents, that they had laid the groundwork for the filings in advance. The Journal examined 90 of the largest companies with publicly traded stocks or bonds that filed for bankruptcy protection between 2007 and April 1, 2012, reviewing all disclosures the firms made during the 12 months preceding a Chapter 11 filing. The report relates 61 companies opted to disclose bankruptcy preparations, noting that they may need to seek court protection or warned investors of "substantial doubt" about their "ability to continue as a going concern," according to the Journal's analysis, performed with Valeo Partners, a Washington-based consulting firm. The report relates 29 companies -- or almost one third -- didn't make specific disclosures. Some companies, such as financial firms Lehman Brothers Holdings Inc. and MF Global Holdings Ltd. collapsed quickly, making such disclosure near-impossible. Others made preparations but didn't alert investors. In some instances, court documents show advisers were hired and preparations made before a filing even though there were no disclosures at the time. * U.S. Bankruptcy Filings Fall in Third Quarter ----------------------------------------------- Carla Main, substituting for Bloomberg News bankruptcy columnist Bill Rochelle, reports that bankruptcy filings fell in the third quarter, according to the Administrative Office of the U.S. Courts. Total bankruptcy filings declined by 8.4% from the previous quarter, total business filings fell 10.9% and consumer bankruptcy filings dropped 8.4%. According to the report, Chapter 7 bankruptcy filings, which allow certain property to be kept exempt from creditors, fell 12.3%. Chapter 13 filings, which require creditors to be at least partially repaid in installment payments over three to five years, rose 1.3% from the second quarter. The Bloomberg report discloses that in the year ending June 30 there were 1,311,602 petitions, compared with 1,529,560 petitions filed the previous year, according to a statement by the Nov. 7. * Ethanol Production Declines as Costs Rise and Plants Close ------------------------------------------------------------ Carla Main, substituting for Bloomberg News bankruptcy columnist Bill Rochelle, reports that U.S. ethanol production is headed for the first decline in 16 years, jeopardizing the nation's drive to boost alternative fuels, as higher costs and lower demand close plants. According to the report, as many as 10 companies, from Valero Energy Corp. to Biofuel Energy Corp., have closed distilleries after the worst drought since the 1950s sent the price of corn to a record just as gasoline demand slumped. President Barack Obama's administration has until Nov. 13 to decide whether to agree to calls from a bipartisan group of lawmakers for the suspension of the law, which was the centerpiece of former President George W. Bush's plan to wean the U.S. off oil. The report relates that ethanol accounts for about 9.2% of total gasoline consumption, according to the Energy Department. "Right now, it is the toughest time ever to run an ethanol plant," said Bruce Babcock, an energy and farm economist at Iowa State University in Ames. "It's never been this bad in the last four years." The Bloomberg report discloses that more than a dozen producers, including Brookings, South Dakota-based VeraSun Energy Corp., once the largest American distiller, filed for bankruptcy protection over an 18-month period starting in October 2008. * SNR Denton, Salans, and Fraser Milner to Combine -------------------------------------------------- Three leading law firms, Salans, Fraser Milner Casgrain and SNR Denton, are recommending to their partners on Nov. 13, that they become foundational members in the creation of a new top 10 international law firm. The firms will bring together their unique strengths, experience and cultures across Europe, Canada, the UK, the US, the Middle East, Central and East Asia, and Africa to create a fully integrated global firm that will rank as the seventh largest law firm in the world, measured by number of lawyers and professionals. According to a statement issued by the firms, the new firm will be uniquely positioned to serve clients as: a firm not centered on the uniting of a UK and US firm; the first combination involving a Canadian firm and a firm with a substantial US presence; and a truly polycentric firm. * Beyond a US/UK Merger: The combination is the most significant law firm combination not born out of the merger of a UK and US firm and the only combination involving firms with significant operations in Europe, Canada, the UK and the US. * First Firm with Extensive Canadian and US Operations: FMC is the first Canadian firm to combine with a firm that has a substantial presence in the US, allowing a single firm to meet the needs of clients operating on both sides of the largest trading relationship between two countries in the world. * Truly Polycentric: The new firm fully embraces the diversity of its geography, cultures and legal traditions, qualities that make it truly polycentric. It will have no headquarters, no dominant national culture, and will proudly offer clients talent from diverse backgrounds and countries with deep experience in Civil Law, English Common Law and US Common Law. The combination is driven by the opportunity to unite three firms with complementary geographic footprints. This will allow the new firm to respond to client demands for greater cross-border depth and a modern, business-oriented approach to complex legal challenges. The client base of the new firm will include many of the world's leading multi-national private and public corporations, funds, banks, insurance companies and governmental entities. The platform will also allow the new firm to challenge other leading global law firms more effectively and significantly grow its market share of legal services. Bringing together this depth and array of talent will enable clients to benefit from more than 2,500 lawyers and professionals in 79 locations in 52 countries across Africa, Asia Pacific, Canada, Europe and Central Asia, the Middle East, the UK and the US in key business sectors: * The combination unites pre-eminent Energy practices in Africa, Asia, Canada, Europe, Central Asia, the Middle East, the UK and the US. In addition, it connects a dominant Canadian Mining practice to strong practices in Africa, Central Asia, the Middle East, Europe, the UK and the US. * It will create an international leader in Banking and Finance, offering clients the full range of transactional, dispute resolution and regulatory services in the world's leading financial and commercial centers: London, New York, Paris, Toronto, Frankfurt, Hong Kong, Moscow, Dubai, Chicago, Shanghai and Singapore. * The combination joins three leading Real Estate practices, and clients will now have singular access to preeminent real estate teams in Asia, Europe, the UK and North America who specialize in private equity and sovereign wealth funds, real estate finance and capital markets, hotels and resorts, development and construction, acquisition and disposition and leasing. * The new firm brings together leading Insurance practices serving top clients in six of the eight largest commercial insurance markets in the world: Canada, China, France, Germany, the UK and the US. * The new firm will offer clients top tier talent and leading practices on four continents in additional sectors and capabilities in demand by clients including Antitrust and Competition; Bankruptcy and Restructuring; Capital Markets; Corporate; Employment, Benefits and Pensions; Government; Healthcare & Life Sciences; Hotels & Resorts; Intellectual Property; International Trade; Litigation and International Arbitration; Luxury Brands; Manufacturing; Mergers & Acquisitions; Privacy; Private Equity; Public Policy and Regulation; Securities; Tax; Technology, Media & Telecommunications; Transportation, Infrastructure and Construction; Trusts, Estates and Wealth Management; and Venture Technology. While providing clients the services of the highest quality lawyers is the new firm's goal, it will have the largest practices, by number of lawyers, in Energy, Insurance, Media and Entertainment, and Real Estate law, and the second largest Bankruptcy, International Trade and Environmental practices globally, according to industry rankings by Law 360. The new firm will be known as: DENTONS Salans FMC SNR Denton It will employ an innovative name migration strategy to capture the inherent brand equity of the Salans, FMC and SNR Denton names in their current geographies, commencing with the use of dentons.com as the new firm's URL on the effective date of the combination. Details of the merger will be available at http://www.dentonscombination.com/nameon Nov. 13. The new firm will be structured as a Swiss Verein and led by a global board and leadership team including: * Elliott Portnoy, Global Chief Executive Officer, currently SNR Denton's Global Chief Executive Officer * Joe Andrew, Global Chair, currently SNR Denton's Global Chair * Francois Chateau, Global Vice-Chair, currently Salans' Global Board Chair * Bill Jenkins, Global Vice-Chair, currently FMC's National Partnership Board Presiding Member * Matthew Jones, UK, Middle East and Africa Chief Executive Officer, currently SNR Denton's EMEA Chief Executive Officer * Dariusz Oleszczuk, Europe Chief Executive Officer, currently Salans' Global Managing Partner * Chris Pinnington, Canada Chief Executive Officer, currently FMC's Chief Executive Officer * Peter Wolfson, US Chief Executive Officer, currently SNR Denton's US Chief Executive Officer * Jana Cohen Barbe, currently SNR Denton's Financial Institutions and Funds Sector Co-Chair * Michael Barr, currently SNR Denton's US Senior Partner * Neil Cuthbert, currently SNR Denton's Middle East Senior Partner * Mike Kaplan, currently Managing Partner of FMC's Toronto Office * Martin Kitchen, currently SNR Denton's UK Senior Partner * Evan Lazar, currently Salans' Global Real Estate Co-Chair The partners of each firm will vote on the proposed combination in November. Subject to the vote, the combination will become effective in the first quarter of 2013. Contact Information: Global Stuart Wilson Tel: +1 212 398 8466 E-mail: stuart.wilson@snrdenton.com UK Louise Ray-Hill Tel: +44 (0) 7246 7082 E-mail: louise.ray-hill@snrdenton.com Europe Annette Spencer Tel: +44 207429 6029 E-mail: aspencer@salans.com Canada Amy Holmes Tel: +1 416 863 4481 E-mail: amy.holmes@fmc-law.com US Mark Goldberg Tel: +1 212 398 5297 E-mail: mark.goldberg@snrdenton.com Asia Pacific/Middle East Marie McDermott Tel: +86 21 2315 6039 E-mail: marie.mcdermott@snrdenton.com About Salans Salans is a full service international commercial law firm built on a pioneering spirit, with 930 fee earners and over 1,500 staff operating from 20 offices. The firm prides itself on its independent and entrepreneurial spirit, combining extensive international capabilities with solution-oriented local expertise, market intelligence and experience in each jurisdiction in which it operates. Salans has established offices in financial hubs and capital cities in 17 countries across Western Europe, Central and Eastern Europe, Russia/CIS, North America and Asia. The offices are listed here alphabetically: Almaty, Baku, Barcelona, Berlin, Bratislava, Brussels, Bucharest, Budapest, Frankfurt, Istanbul, Kyiv, London, Madrid, Moscow, New York, Paris, Prague, Shanghai, St. Petersburg and Warsaw. About Fraser Milner Casgrain LLP (FMC) Fraser Milner Casgrain LLP (FMC) is one of Canada's leading business and litigation law firms with more than 500 lawyers and professionals in six full-service offices located in the country's key business centers. The firm focuses on providing outstanding service and value to its clients and it strives to excel as a workplace of choice for its people. Regardless of where clients choose to do business in Canada, FMC's strong team of professionals possess knowledge and expertise on regional, national and cross-border matters. FMC's well-earned reputation for consistently delivering the highest quality legal services and counsel to its clients is complemented by an ongoing commitment to diversity and inclusiveness to broaden its insight and perspective on its clients' needs. About SNR Denton SNR Denton is a client-focused international legal practice delivering quality and value. It serves clients in key business and financial centers from more than 60 locations worldwide, through offices, associate firms and special alliances across the US, the UK, Europe and Central Asia, the Middle East, Asia Pacific and Africa, making it a top 25 legal services provider by lawyers and professionals. SNR Denton offers business, government and institutional clients premier service and a disciplined focus to meet evolving needs in eight key industry sectors: Energy, Transport and Infrastructure; Financial Institutions and Funds; Government; Health and Life Sciences; Insurance; Manufacturing; Real Estate, Retail and Hotels; and Technology, Media and Telecommunications. * BOOK REVIEW: Learning Leadership ---------------------------------- Author: Abraham Zaleznik Publisher: Beard Books Hardcover: 548 pages Listprice: $34.95 Review by Henry Berry The lesson in Learning Leadership -- The Abuse of Power in Organizations is to "use power so that substance leads process." This is done, says the author, by keeping the "content of work at the center of communication." The premise of this intriguing book is that many managers, executives, and other business leaders allow "forms of communication [to become] the center of work." As a result, misguided and counterproductive leadership and management practices have settled into many organizations. A culprit is the popular "how-to" leadership manuals that offer simple, superficial principles that only skim the surface of leadership. Zaleznik argues that the primary way to get work done is to put aside personal agendas and deal directly with those who are involved in the work. With this emphasis on substance over process, the concept of leadership lies not in techniques, but personal qualities. The essential personal qualities of leadership are captured by the "three C's" of competence, character, and compassion. The author then delves more deeply into each of these C's. We learn, for example, that the three C's are not learned skills. Competence entails "building one's power base on talent." Character and compassion are the two other qualities of a leader that must be present before there is any talk about methods of operation, lines of communication, definition of goals, structure of a team, and the like. There is more to character that the common definition of the "quality of the person." Character also embraces, says the author, the "code of ethics that prevents the corruption of power." Compassion is defined as a "commitment to use power for the benefit of others, where greed has no place." This concept of a good leader is not idealized or unrealistic. It takes into account human nature and the troubling behavior of many leaders. Of course, any position of leadership brings with it temptations and the potential to abuse power. Effective leaders are those who "take responsibility for [their] own neurotic proclivities," says the author. They do this out of a sense of the true purpose of leadership, which is communal benefit. The power holder will "avoid the treacheries of an unreasonable sense of guilt, while recognizing the omnipresence of unconscious motivation." Zaleznik's definition of the essentials of leadership comes from his study of notable (and sometime notorious) leaders. Some tales are cautionary. The Fashion Shoe Company illustrates the problems that can occur when a leader allows action to overcome thought. The Brandon Corporation illustrates the opposite leadership failing -- allowing thought to inhibit action. Taken together, the two examples suggest that balance is needed for good leadership. Andrew Carnegie exemplifies the struggle between charisma and guilt that affects some leaders. Frederick Winslow Taylor is seen by the author as an obsessed leader. From his behavior in the Sicilian campaign in World War II, General Patton is characterized as a leader who violated the code binding leaders and those they lead. With his training in psychoanalysis and his experience in the business field, Zaleznik's leadership dissections and discussions are instructive. The reader will find Learning Leadership -- The Abuse of Power in Organizations to be an engaging text on the human qualities and frailties of leaders. Abraham Zaleznik is emeritus Konosuke Matsushita Professor of Leadership at the Harvard Business School. He is also a certified psychoanalyst. ********* 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 ***