/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/121122.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, November 22, 2012, Vol. 16, No. 325 Headlines AARON ELKIN: Lawyer in Child Custody Case Granted $75,000 Claim AE BIOFUELS: Delays Form 10-Q for Third Quarter AIRVANA NETWORK: S&P Cuts CCR to 'CCC-' on Declining Revenue ALLIED SYSTEMS: Court OKs Ogletree as Labor & Benefits Counsel ALLIED SYSTEMS: Court OKs Rothschild as Financial Advisor AMBAC FINANCIAL: To Reopen New York City Headquarters AMERICAN APPAREL: Amends Credit Pacts with Crystal and Lion AMERICAN SUZUKI: Gets Approval of Agreement with Ally Financial AMERICAN TIRE: S&P Cuts Corp. Credit Rating to 'B'; Outlook Stable ANTS SOFTWARE: Frank Kautzmann Resigns as Chairman of the Board AS SEEN ON TV: Reports $12.9 Million Net Income in Sept. 30 Qtr. AURORA USA: Moody's Assigns 'Caa1' Rating to $100-Mil. Notes AVANTAIR INC: Delays Form 10-Q for Sept. 30 Quarter BALQON CORP: Delays Q3 Form 10-Q for Accounting Analysis BANKATLANTIC BANCORP: Reports $277-Mil. Net Income in 3rd Quarter BION ENVIRONMENTAL: Carret Asset Does Not Own Common Shares BLUEGREEN CORP: Replaces Stock Merger Pact with Cash Transaction BOMBARDIER INC: S&P Withdraws 'BB' Rating on $1BB Unsecured Notes BON-TON STORES: Incurs $10.1 Million Net Loss in Fiscal Q3 BOSTON BIOMEDICAL: Moody's Cuts Rating on 1999 Bonds to 'Caa1' BROADWAY FINANCIAL: Incurs $613,000 Net Loss in Third Quarter CAESARS ENTERTAINMENT: Taps D. Colvin as Chief Financial Officer CALYPTE BIOMEDICAL: Delays Q3 Form 10-Q for Review Problems CDII TRADING: CD Int'l Has Approval for Sale and Settlement CENTERPLATE INC: Moody's Says NHL Lockout Credit Negative CONQUEST SANTA FE: Seeks to Use Cash Collateral CYPRESS OF TAMPA: Files for Chapter 11 in Tampa D.C. DEVELOPMENT: Court OKs Rial & Assoc. as Lending Consultant D.C. DEVELOPMENT: Court OKs Foley & Lardner as Tax Counsel D.C. DEVELOPMENT: First United Opposes Exclusivity Extension DRIVETIME AUTOMOTIVE: S&P Says B Rating on $200MM Notes Off Watch EDIETS.COM INC: Delays Third Quarter Form 10-Q for Review ECO BUILDING: Delays Form 10-Q for Sept. 30 Quarter EDISON MISSION: Misses Interest Payment, May File for Bankruptcy EDISON MISSION: Fitch Cuts Longterm Issuer Default Rating to 'C' ELPIDA MEMORY: U.S. Court to Decide on Sale to Micron Technology ENERGY EDGE: Delays Third Quarter Form 10-Q for Review FIRST FINANCIAL: Cancels Agreement to Sell Louisville Branches FIRST PLACE: Treasury Department Wants to Slow Down Sale FIRST SECURITY: Incurs $9.4 Million Net Loss in Third Quarter FOREVERGREEN WORLDWIDE: Delays Form 10-Q for Sept. 30 Quarter FTLL ROBOVAULT: BBX Unit Wants Trustee Named or Case Converted GAP INC: S&P Revises Outlook on 'BB+' CCR to Positive GREEN ENERGY: Incurs $306,500 Net Loss in Third Quarter HARPER BRUSH: Asset Prices Rises 88% at Auction HAWAII OUTDOOR: Naniloa Volcanoes Resort Files Chapter 11 HOSTESS BRANDS: Gets OK to Wind Down Business, Sell Assets HOSTESS BRANDS: Teamsters Opposed BCTGM Strike HOSTESS BRANDS: Wind-Down Spurs Employees' Class Suit HOSTESS BRANDS: Klehr Harrison Probing WARN Act Violations HOSTESS BRANDS: eRaise.com Aims to Raise $500MM to Save Hostess HYPERTENSION DIAGNOSTICS: Incurs $729K Net Loss in Sept. 30 Qtr. HCSB FINANCIAL: Delays Q3 Form 10-Q for Regulatory Matters IMEDICOR INC: Delays Form 10-Q for Sept. 30 Quarter INFUSION BRANDS: Incurs $1 Million Net Loss in Third Quarter INTELLICELL BIOSCIENCES: Delays Q3 Form 10-Q Due to Hurricane JC PENNEY: Moody's Cuts CFR/PDR to 'B3'; Outlook Negative JOSEPH YERUSHALMI: Ch.7 Trustee Can't Pursue Alter Ego Claim KNIGHT CAPITAL: GETOCO Owns 23.8% of Class A Common Shares LIBERATOR INC: Posts $6,400 Net Income in Sept. 30 Quarter LLS AMERICA: Court Won't Dismiss Clawback Suits v. 50+ Defendants MAMMOTH LAKES, CA: Municipal Bankruptcy Dismissed MARICOPA IDA: Moody's Affirms 'B1' Bond Rating; Outlook Stable MEDICAL CARD: Moody's Maintains Review on 'Caa3' Ratings MICHAEL HAT: Calif. Appeals Court Rules on Dispute With Ex-Wife MICHAELS STORES: Posts $36 Million Net Income in Third Quarter MOUNTAIN NATIONAL: Delays Q3 Form 10-Q for Regulatory Matters MYLAN INC: Moody's Hike Senior Unsecured Rating From 'Ba2' MYLAN INC: S&P Raises CCR From 'BB+' on Reduced Leverage NAVIOS MARITIME: Reaches Restructuring Agreement With Insurer NEIMAN MARCUS: S&P Cuts Rating on Senior Secured Term Loan to 'B+' NORD RESOURCES: Incurs $2.3 Million Net Loss in Third Quarter NORTH AMERICAN BREWERIES: Moody's Assigns B2 Corp. Family Rating OLYMPIC HOLDINGS: Court Employs M. Jonathan Hayes as Counsel ORLANDO, FL: Moody's Cuts Rating on 2nd Lien Bonds to 'Ba2' OROCO RESOURCE: Enters Into Term Sheet With Waterton for Funding OVERLAND STORAGE: To Issue 250K Shares to Randy Gast as Incentive OVERSEAS SHIPHOLDING: Has Interim Cash Use Approval OVERSEAS SHIPHOLDING: Pomerantz Files Class Action Suit OVERSEAS SHIPHOLDING: Todd M. Garber Files Class Action Lawsuit PACER MANAGEMENT: Case Reassigned to Hon. Tracey Wise PATRIOT COAL: Has Selenium Settlement With Sierra Club, et al. PATRIOT COAL: Brower Piven Flies Class Action Lawsuit PEGASUS RURAL: Wins Confirmation of Chapter 11 Plan PENNFIELD CORP: Court Approves AEG as Financial Advisors PENNFIELD CORP: Court OKs Maschmeyer Karalis as Bankr. Counsel PENNFIELD CORP: Court Approves Groom as Employee Benefits Counsel PENNFIELD CORP: Can Hire Lakeshore as Investment Banker PENNFIELD CORP: Committee Retains Blank Rome as Counsel PEREGRINE PHARMACEUTICALS: Nov. 27 Deadline for Lead Plaintiff PEREGRINE PHARMACEUTICALS: Has Non-Compliance Notice From NASDAQ PICCADILLY RESTAURANTS: Hires Jones Walker as Counsel PICCADILLY RESTAURANTS: Postlethwaite Approved as Auditors PICCADILLY RESTAURANTS: Court OKs BMC Group as Claims Agent PICCADILLY RESTAURANTS: Court Hires J. Cornish as Consultant PICCADILLY RESTAURANTS: Files Schedules of Assets and Liabilities PINNACLE AIRLINES: Court Gives Roadmap for New Pilots Contract PURADYN FILTER: Delays Form 10-Q for Third Quarter PVH CORP: Moody's Confirms 'Ba2' CFR/PDR; Outlook Stable QBEX ELECTRONICS: Hiring GrayRobinson as Bankruptcy Counsel QBEX ELECTRONICS: Wants to Use Bank Leumi's Cash Collateral QUIKSILVER INC: Moody's Affirms 'Caa1' Rating on $400MM Notes RCP INVESTMENTS VI: Can't Sell Property Under Sec. 363(f) RESIDENTIAL CAPITAL: Court Approves Sale to Ocwen and Walter ROTECH HEALTHCARE: Incurs $12.8 Million Net Loss in Third Quarter ROTHSTEIN ROSENFELDT: Lawsuit vs. Jeweler to Proceed to Trial SAFENET: Moody's Affirms 'B2' Corp. Family Rating; Outlook Stable SCS HOLDINGS: S&P Raises Rating on $260-Mil. Term Loan to 'BB-' SEARS HOLDINGS: Incurs $498 Million Net Loss in Oct. 27 Quarter SILVERSUN TECHNOLOGIES: Posts $102,800 Net Income in 3rd Quarter SINOHUB INC: Scott+Scott Files Securities Class Action Lawsuit SPORTS AUTHORITY: Moody's Withdraws 'B3' Rating on $630MM Loan SPRINGS WINDOW: S&P Ups Rating on $356.5MM First-Lien Debt to 'B+' ST. PAUL HOUSING AUTHORITY: Moody's Hikes Bond Ratings From 'Ba1' STALLION OILFIELD: S&P Rates $500MM Senior Secured Term Loan 'B' T BANCSHARES: Reports $439,000 Net Income in Third Quarter T3 MOTION: Delays Form 10-Q for Third Quarter TALON THERAPEUTICS: Posts $40.5-Mil. Net Income in 3rd Quarter TITANIUM GROUP: Zili Sells 20MM Restricted Shares to Snow Hill TITANIUM GROUP: Delays Form 10-Q for Third Quarter TN-K ENERGY: Incurs $79,600 Net Loss in Third Quarter TONGJI HEALTHCARE: Delays Form 10-Q for Third Quarter TTM TECHNOLOGIES: S&P Ups CCR to 'BB' on Stabilizing End Markets UNILAVA CORP: Delays Form 10-Q for Third Quarter UNITED CONTINENTAL: S&P Affirms 'B' Corporate Credit Rating UNIVERSITY GENERAL: Reports $1.9-Mil. Net Income in 3rd Quarter UTSTARCOM INC: Incurs $20.7 Million Net Loss in Third Quarter VANGUARD NATURAL: S&P Hikes CCR to B+; Sr. Unsec. Debt Rating B+ VAUGHAN CO: Court Nixes Summary Judgment Bids Over Saul Ewing Fund VICTORY ENERGY: Incurs $868,000 Net Loss in Third Quarter VUZIX CORP: Delays Form 10-Q for Third Quarter VYCOR MEDICAL: Incurs $792,000 Net Loss in Third Quarter VYSTAR CORP: Incurs $577,800 Net Loss in Third Quarter WAXESS HOLDINGS: Incurs $1.8 Million Net Loss in Third Quarter WIZARD WORLD: Posts $1.7 Million Net Income in Third Quarter WORLD SURVEILLANCE: Agrees to Cancel Shares Issuances to Execs. WOUND MANAGEMENT: Incurs $1.4 Million Net Loss in Third Quarter XERIUM TECHNOLOGIES: S&P Revises Outlook on 'B' CCR to Negative YELLOWSTONE MOUNTAIN: Dist. Court Rejects Disqualification Bid ZHONG WEN: Delays Form 10-Q for Third Quarter ZOO ENTERTAINMENT: Incurs $188,000 Net Loss in Third Quarter ZYTO CORP: Reports $97,613 Net Income in Third Quarter * Moody's Says Michigan School Districts' Outlook Remains Neg. * Recent Small-Dollar & Individual Chapter 11 Filings ********* AARON ELKIN: Lawyer in Child Custody Case Granted $75,000 Claim --------------------------------------------------------------- Bankruptcy Judge Robert A. Mark overruled Aaron Elkin's objection to the proof of claim filed by Arlene Wexler, Esq., counsel to Andrea Labis, the mother of the Debtor's child. The Debtor and Ms. Labis, who are not married, are embroiled in a protracted child custody dispute styled Elkin v. Labis, Index No. 105411/08, still pending in the Supreme Court, County of New York. Ms. Wexler asserts a $75,000 priority unsecured claim for attorney fees incurred in connection with her representation of Ms. Labis. The Claim is based on a Decision and Order in the State Court Case dated Feb. 15, 2011 and entered on March 17, 2011. The Fee Order is a three-page decision awarding $75,000 in attorney fees to Labis, which the State Court ordered the Debtor to pay to Ms. Wexler by April 1, 2011. A copy of the Court's Nov. 16, 2012 Memorandum Opinion and Order is available at http://is.gd/J9VVRsfrom Leagle.com. The Debtor did not pay the award and filed his chapter 11 petition (Bankr. S.D. Fla. Case No. 11-19278) on April 6, 2011. AE BIOFUELS: Delays Form 10-Q for Third Quarter ----------------------------------------------- Aemetis, inc., formerly known as AE Biofuels Inc., was unable to file, without unreasonable effort and expense, its quarterly report on Form 10-Q for the quarter ended Sept. 30, 2012, because the Company's management has not completed their review of the Company's financial statements on Form 10-Q. It is anticipated that the Quarterly Report on Form 10-Q will be filed on or before the 5th calendar day following the prescribed due date of the Company's Quarterly Report on Form 10-Q. About AE Biofuels AE Biofuels, Inc. (OTC BB: AEBF) -- http://www.aebiofuels.com/-- is a biofuels company based in Cupertino, California, developing sustainable solutions to address the world's renewable energy needs. The Company is commercializing its patent-pending next- generation cellulosic ethanol technology that enables the production of biofuels from both non-food and traditional feedstocks. Its wholly-owned Universal Biofuels subsidiary built and operates a nameplate 50 million gallon per year biodiesel production facility on the east coast of India. The Company's balance sheet at June 30, 2012, showed $24.68 million in total assets, $62.10 million in total liabilities and a $37.41 million total stockholders' deficit. Aemetis disclosed a net loss of $18.29 million on $141.85 million of revenue for the year ended Dec. 31, 2011, compared with a net loss of $8.56 million on $8.13 million of revenue during the prior year. AIRVANA NETWORK: S&P Cuts CCR to 'CCC-' on Declining Revenue ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit and issue ratings on Chelmsford, Mass.-based Airvana Network Solutions Inc. to 'CCC-' from 'CCC'. "The recovery rating on the company's senior secured debt remains '4', indicating our expectation of average (30%-50%) recovery in the event of a payment default," S&P said. "In addition, we removed the ratings from CreditWatch, where we placed them with developing implications on Feb. 9, 2012. The outlook is negative," S&P said. "The downgrade reflects rapid declines in revenue and cash flow year to date, and lack of resolution of the legal proceedings against Ericsson, including ongoing uncertainty about potential proceeds from a settlement or judgment," said Standard & Poor's ratings analyst Martha Toll-Reed. "Airvana is dependent on Ericsson for essentially 100% of its revenues. Our ratings on the company reflect the ongoing lawsuit against its sole customer, and the related vulnerability of its future revenues and cash flows," S&P said. "Airvana filed suit against Ericsson in the Supreme Court of the State of New York on Feb. 8, 2012. The suit alleges that Ericsson violated key terms of its contract with Airvana and misappropriated Airvana's critical intellectual property, among other items. As a result, Airvana seeks from Ericsson damages of not less than $330 million and an injunction barring certain conduct by Ericsson. Airvana's 'vulnerable' business risk profile reflects its declining revenue base and ongoing litigation against its sole customer," S&P said. "We view Airvana's financial risk profile as 'highly leveraged,' and we assess Airvana's management and governance as 'weak,' based on our uncertainty regarding the sustainability of the revenues and cash flows," S&P said. "The negative outlook reflects the uncertain status of the litigation against Ericsson. The absence of a timely (before March 1, 2013) and favorable resolution could lead to lower a lower rating in the near term. We could also lower ratings in the near term if negative operating trends put Airvana's revenues, cash flow, and liquidity more at risk," S&P said. ALLIED SYSTEMS: Court OKs Ogletree as Labor & Benefits Counsel -------------------------------------------------------------- Allied Systems Holdings, Inc., and its U.S. and Canadian subsidiaries sought and obtained permission from the U.S. Bankruptcy Court for the District of Delaware to employ Ogletree, Deakins, Nash, Smoak & Stewart, P.C., as labor and benefits counsel for the Debtors, nunc pro tunc to Oct. 1, 2012. Ogletree will (i) advise and represent the Debtors in connection with labor and benefits matters, including the Debtors' current collective bargaining agreements and employee benefit and retirement plans, (ii) advise and represent the Debtors in any labor or employee benefits matters arising in connection with the Chapter 11 cases, and (iii) advise and represent the Debtors in negotiations and litigation, if any, related to the Debtors' collective bargaining agreements with its union employees or the Debtors' employee benefits and retirement plans. Ogletree's billing rates currently range from $300 to $650 per hour for shareholders, $200 to $640 per hour for counsel, $175 to $415 per hour for associates and $100 to $260 per hour for para- professionals. To the best of the Debtors' knowledge: (a) Ogletree is a "disinterested person" under Section 101(14) of the Bankruptcy Code. The Debtors owe Ogletree $4,109 for prepetition services rendered to the Debtor. About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. ALLIED SYSTEMS: Court OKs Rothschild as Financial Advisor --------------------------------------------------------- Allied Systems Ltd. sought and obtained approval from the Bankruptcy Court to employ Rothschild Inc. as financial advisor and investment banker, effective as of the Petition Date. Rothschild has agreed to identify or initiate potential transactions, which includes a plan of reorganization, a sale pursuant to 11 U.S.C. Sec. 363 or a merger or business combination. The firm will also analyze any proposals from third parties. The Official Committee of Unsecured Creditors and the petitioning creditors, namely BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed objections to the application. The objections were later resolved by consent in accordance with the terms of the Court's order. The firm will receive a cash advisory fee of $150,000 per month. As agreed by the parties, Rothschild will be entitled to a completion fee equal to one of the following: (i) $1,750,000 payable in cash promptly upon the earlier of the consummation of the closing or consummation of the sale, transfer or other deposition of the a majority of the Company's equity interest or assets pursuant to 11 U.S.C. Sec. 363; (ii) $2,000,000 payable in cash upon the earlier of the consummation of a Plan that is confirmed at an uncontested confirmation hearing and the closing of a sale of at least a majority of the equity interests or assets to any of the first lien lenders pursuant to Sec. 363; (iii) an amount not more than $2,000,000 to be determined by the parties payable in cash immediately upon the closing of a sale or deposition of the equity interests or assets to any first lien lenders that is not supported or consented to by a first lien supermajority. (iv) if the completion fee is not earned pursuant to (i), (ii) or (iii), $2,500,000, payable in cash upon the earlier of the closing or consummation of a plan or other transaction. The firm will also receive a new capital fee. Allied has agreed to provide the Petitioning Creditors and the Committee copies of any written proposals, expressions of interest or similar communications the Company received from any party. About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. AMBAC FINANCIAL: To Reopen New York City Headquarters ----------------------------------------------------- Ambac Financial Group, Inc. and Ambac Assurance Corporation will reopen their headquarters at One State Street Plaza, New York, New York on Monday, Nov. 26, 2012. As a result of storm damage, the Companies' telephone system will not be fully operational. A temporary system is available for inbound calls, and inquiries may be directed via telephone to (845) 810-3000 or through regular e-mail channels. The Companies will be closed from Wednesday, November 21, 2012 through Friday, Nov. 23, 2012, to facilitate the migration of their systems and operations back to the New York City headquarters from the disaster recovery site in Kingston, NY, during this period. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Judge Shelley C. Chapman entered an order confirming the Fifth Amended Plan of Reorganization of Ambac Financial Group, Inc. on March 14, 2012. The Plan provides for the full payment of secured claims and 8.5% to 13.2% recovery for general unsecured claims. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). The Company's balance sheet at June 30, 2012, showed $26.61 billion in total assets, $30.36 billion in total liabilities and a $3.75 billion total stockholders' deficit. AMERICAN APPAREL: Amends Credit Pacts with Crystal and Lion ----------------------------------------------------------- American Apparel, Inc., and certain of its subsidiaries entered into amendments to both the Crystal Credit Agreement and the Lion Credit Agreement that, among other things, reduced by $600,000 the target minimum EBITDA for the twelve months ended Oct. 31, 2012, under the financial covenants of each credit agreement, respectively. A copy of the amended Crystal Credit Pact is available for free at http://is.gd/xsBRRm About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. The Company reported a net loss of $39.31 million in 2011 and a net loss of $86.31 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $333.64 million in total assets, $319.76 million in total liabilities and $13.87 million in total stockholders' equity. AMERICAN SUZUKI: Gets Approval of Agreement with Ally Financial --------------------------------------------------------------- American Suzuki Motor Corporation has received Bankruptcy Court approval of its agreement with Ally Financial Inc. and certain of its affiliates, including American Suzuki Financial Services Company, to assume certain agreements with Ally that support Ally's provision of automotive dealer floorplan financing and retail financing programs, including zero percent for qualified buyers of Suzuki automobiles. The agreement will help ensure that ASMC's automotive dealers and consumers have continued access to wholesale and retail financing for Suzuki automobiles. As previously announced, all automobile warranties will continue to be fully honored, in accordance with their terms, and parts and service will continue to be provided to consumers through ASMC's continued service and parts dealer network. Also, on Nov. 7, 2012, ASMC obtained authority to continue its financing relationships with GE Capital's Retail Finance and Commercial Distribution Finance businesses, which provide motorcycle and ATV consumer financing programs, as well as motorcycle, ATV and marine dealer inventory financing, respectively. By Court approval of these motions, dealers and consumers of Suzuki products will continue to have access to wholesale and retail financing in the same manner as before the Company's Nov. 5, 2012, chapter 11 filing. The Court also approved the continuation of existing agreements with Sheffield Financial for consumer financing for motorcycle and ATV products. ASMC has begun working within its current U.S. Automotive dealer network to help structure a smooth transition from new automobile sales to exclusively parts and service operations. ASMC intends to market and sell its remaining U.S. automobile inventory through its automotive dealer network, many of whom have expressed interest in continuing to order and receive shipments of Suzuki automobiles as long as they remain available. Through and after the restructuring, all warranties will be fully honored and automobile parts and services will be provided to consumers through the dealer network. ASMC announced on Nov. 5, 2012, that it plans to realign its business to focus on the long-term growth of its Motorcycles/ATV and Marine divisions and to wind down and discontinue new automobile sales in the continental U.S., following a thorough review of its current position and future opportunities in the U.S. automotive market. ASMC determined that the best path to achieve this realignment in an efficient and orderly manner was to restructure its operations under chapter 11. The case was filed in the United States Bankruptcy Court, Central District of California in Santa Ana. About 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. The Debtor also filed a plan of reorganization together with the petition. Under the proposed Plan, the Motorcycles/ATV and Marine Divisions will remain largely unaffected including the warranties associated with the products. NounCo, Inc., a wholly owned subsidiary of SMC, will purchase the Motorcycles/ATV and Marine Divisions and the parts and service components of the Automotive Division. 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. Bankruptcy Judge Catherine E. Bauer signed an order Oct. 6 reassigning the case to Judge Scott Clarkson. 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. SMC is represented by lawyers at Klee, Tuchin, Bogdanoff & Stern LLP. AMERICAN TIRE: S&P Cuts Corp. Credit Rating to 'B'; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Huntersville, N.C.-based American Tire Distributors Inc. (ATD) to 'B' from 'B+'. The outlook is stable. "At the same time, we lowered the rating on the company's senior secured notes to 'CCC+', two notches below the corporate credit rating, from 'B-'. The recovery rating on this debt remains '6', indicating our expectation of negligible recovery (0%-10%) for noteholders in the event of default," S&P said. "The downgrade reflects our view that ATD's leverage falls outside our expectation for the 'B+' corporate credit rating," said Standard & Poor's credit analyst Lawrence Orlowski. "We believe it will continue to do so, given ample expansion opportunities in this fragmented industry." "We view the company's financial risk profile as 'highly leveraged' under our criteria, and we expect ATD's leverage to remain about 6x by the end of the year," S&P said. "We view ATD's business risk as 'weak,' reflecting its limited geographical diversity, fierce competitive landscape, and narrow scope of operations," S&P said. "Our stable outlook on ATD reflects the likelihood that the company will maintain credit measures in line with the new rating: namely, adjusted leverage between 5x and 6x. We do not expect the company to generate positive free cash flow in 2012 in part because of rising working capital requirements related to its geographic expansion. Our view of free cash flow in 2013 is based upon the assumption that the private equity owners will manage growth to prevent further increases in debt," S&P said. ANTS SOFTWARE: Frank Kautzmann Resigns as Chairman of the Board --------------------------------------------------------------- Dr. Frank N. Kautzmann, III, Chairman and Director of ANTs software inc., resigned as Chairman and Director, effective Nov. 13, 2012. Dr. Kautzmann did not have any disagreement with the Company on any matter relating to the Company's operations, policies, practices or any business matters. Dr. Kautzmann previously resigned as President and Chief Executive Officer of the Company on Nov. 12, 2012. About Ants Software ANTs Software inc (OTC BB: ANTS) -- http://www.ants.com/-- has developed a software solution, ACS, to help customers reduce IT costs by consolidating hardware and software infrastructure and eliminating cost inefficiencies. ACS is an innovative middleware solution that accelerates database consolidation between database vendors, enabling application portability. ANTs has not filed financial statements with the Securities and Exchange Commission since May 2011, when it disclosed that it had a net loss of $27.01 million in three months ended March 31, 2011, compared with a net loss of $20.7 million in the same period in 2010. The Company's balance sheet at March 31, 2011, showed $27.2 million in total assets, $52.3 million in total liabilities, and a stockholders' deficit of $25.1 million. As reported in the TCR on April 8, 2011, WeiserMazars LLP, in New York, expressed substantial doubt about ANTs software's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has incurred significant recurring operating losses, decreasing liquidity, and negative cash flows from operations. The Company reported a net loss of $42.4 million for 2010, following a net loss of $23.3 million in 2009. AS SEEN ON TV: Reports $12.9 Million Net Income in Sept. 30 Qtr. ---------------------------------------------------------------- As Seen On TV, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $12.93 million on $637,724 of revenue for the three months ended Sept. 30, 2012, compared with a net loss of $12.09 million on $258,495 of revenue for the same period during the prior year. For the six months ended Sept. 30, 2012, the Company reported net income of $2.18 million on $1.03 million of revenue, compared with a net loss of $12.44 million on $744,383 of revenue for the same period a year ago. The Company reported a net loss of $8.07 million on $8.16 million of revenue for the year ended March 31, 2012, compared with a net loss of $6.97 million on $1.35 million of revenue during the prior fiscal year. The Company's balance sheet at Sept. 30, 2012, showed $9.74 million in total assets, $23.42 million in total liabilities and a $13.68 million total stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/NOr1W3 About As Seen on TV Clearwater, Fla.-based As Seen On TV, Inc., is a direct response marketing company. It identifies, develops, and markets consumer products. AURORA USA: Moody's Assigns 'Caa1' Rating to $100-Mil. Notes ------------------------------------------------------------ Moody's Investors Service issued a correction to the July 26, 2012, rating release of Aurora USA Oil & Gas, Inc. Moody's assigned a Caa1 rating to the Aurora offering of $100 million senior unsecured notes due 2017. These notes are a tack-on issuance to the existing $200 million unsecured senior notes due 2017. Aurora intends to use the net proceeds from the proposed offering to prefund a portion of its development requirements for the Sugarkane field in the Eagle Ford operated by Marathon Oil (MRO). The rating outlook is stable. Ratings Rationale "Aurora is small, highly levered for its production and proved developed reserves and a non-operator of its assets. The rating focuses on its capacity to rapidly expand production and cash flows to better match the large and uncertain timing cash calls for development funds from MRO, the operator. Maintaining liquidity to pay development costs when and as called is imperative; going non-consent cripples Aurora's economics," said Harry Schroeder, Moody's Vice President. The rating is predicated on Marathon Oil's (MRO) reputation and capability as the operator of Aurora's properties, MRO's economic interest and financial ability to rapidly develop this field, its intent to hold drilling locations by production thus accelerating drilling costs, the robust unleveraged cash margins available in the Eagle Ford and full-cycle metrics. Moody's sees the full-cycle metrics for Aurora eroding despite production being almost entirely liquids. Economic entry point of acreage acquisition purchase is critical to ultimate performance as Aurora's management, in reality, has neither control, nor adds significant value to the actual development of the properties. Since March 2012, it has spent about $200 million on increasing its acreage/working interests in Sugarkane (about $65,000 per net acre). Making acceptable economic returns with this embedded cost basis and about $7.5 million per net well is difficult. While equity funded a substantial portion, the need for this issuance is to freshen-up the liquidity initially earmarked for development of existing properties and lowering leverage metrics in the short- term. The rating assumes that Marathon continues as operator, Aurora will maintain adequate liquidity to fund its share of Marathon's drilling program when and as called, that production in the Sugarkane Field grows apace of Moody's expectations and further acquisitions of non-immediate cash generating assets is very limited. The rating is restrained by concentration in a single field, early stage operations, and Aurora's non-operator status. The Caa1 rating on the proposed $100 million senior notes reflects both the Corporate Family Rating (CFR) and Probability of Default Rating (PDR) both of which are B3. The Loss Given Default is LGD 4 (67%). At 6/30/2012, Aurora has a senior secured revolving credit with an $85 million borrowing base that is fully available. This precipitates the notching of the notes to a Caa1 rating. With a proforma post issue cash balance estimated to be about $150 million, proforma 12 months Retained Cash Flow of $150 million and Revolver availability of $85 million approximately $385 million is available to meet cash calls from the operator. This should be sufficient to meet all but the most extraordinary of cash calls. Moody's assigns a Speculative Grade Rating of SGL-2 for liquidity. The principal methodology used in rating Aurora USA Oil & Gas, Inc was the Independent Exploration and Production (E&P) Industry Rating 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. Aurora is based in Perth, Australia. AVANTAIR INC: Delays Form 10-Q for Sept. 30 Quarter --------------------------------------------------- Avantair, Inc., seeks a five-day extension, from Nov. 14, 2012, to Nov. 19, 2012, to file its quarterly report on Form 10-Q for the period ended Sept. 30, 2012. Those delays are primarily due to Company's management's dedication of such management's time to business matters, including efforts for a portion of the Company's aircraft to resume flying following the voluntary stand down of its operations in coordination with the Federal Aviation Administration. In addition, the compilation, dissemination and review of the information required to be presented in the Form 10- Q for the relevant fiscal quarter has imposed time constraints that have rendered timely filing of the Form 10-Q impracticable without undue hardship and expense to the Company. It is anticipated that the Form 10-Q will be filed no later than the fifth calendar day following the prescribed due date. About Avantair Inc. Headquartered in Clearwater, Fla., Avantair, Inc. (OTC BB: AAIR) -- http://www.avantair.com/-- sells fractional ownership interests in, and flight hour card usage of, professionally piloted aircraft for personal and business use, and the management of its aircraft fleet. According to AvData, Avantair is the fifth largest company in the North American fractional aircraft industry. Avantair also operates fixed flight based operations (FBO) in Camarillo, California and in Caldwell, New Jersey. Through these FBOs and its headquarters in Clearwater, Florida, Avantair provides aircraft maintenance, concierge and other services to its customers as well as to the Avantair fleet. The Company reported a net loss attributable to common stockholders of $8.04 million for the year ended June 30, 2012, compared with a net loss of attributable to common stockholders of $13.64 million for the year ended June 30, 2011. The Company's balance sheet at Sept. 30, 2012, showed $84.22 million in total assets, $122.83 million in total liabilities, $14.82 million in series A convertible preferred stock, and a $53.43 million total stockholders' deficit. BALQON CORP: Delays Q3 Form 10-Q for Accounting Analysis -------------------------------------------------------- While preparing its quarterly report on Form 10-Q for the quarterly period ended Sept. 30, 2012, Balqon Corporation has determined that many of its assets needed to be reviewed for impairment. This additional accounting analysis has resulted in delays in closing and reviewing the Company's financial information for the quarterly period ended Sept. 30, 2012. As such, the Company is unable to file its Quarterly Report on Form 10-Q for the quarterly period ended Sept. 30, 2012, within the prescribed time period without unreasonable effort or expense. The Company anticipates reporting net revenues of approximately $712,324 for the three month period ended Sept. 30, 2012, as compared to net revenues of $834,943 for the three month period ended Sept. 30, 2011. The decrease in sales is attributable to a $418,900 decrease in sales of electric vehicles during the three month period ended Sept. 30, 2012, compared to the three month period ended Sept. 30, 2011. The Company anticipates reporting a negative gross profit of approximately $226,702 for the three month period ended Sept. 30, 2012, as compared to gross profit of $105,513 for the three month period ended Sept. 30, 2011. The decrease in gross margin is due to the Company selling $350,000 in batteries wholesale, at a loss, during the third quarter of 2012. The Company anticipates reporting a net loss of approximately $4,191,157 for the three month period ended Sept. 30, 2012, as compared to a net loss of $1,012,383 for the three month period ended Sept. 30, 2011. The significant increase in losses during the three months ended Sept. 30, 2012, are primarily attributable to the anticipated negative gross profit, offset by approximately $300,000 of decreases in general and administrative expenses, research and development costs, and depreciation expense. About Balqon Corporation Harbor City, California-based Balqon Corporation is a developer and manufacturer of electric drive systems, charging systems and battery systems for trucks, tractors, buses, industrial equipment and renewable energy storage devices. The Company also designs and assembles electric powered yard tractors, short haul drayage tractors and inner city trucks utilizing our proprietary drive systems, battery systems and charging systems. Following the Company's 2011 results, Weinberg & Company, P.A., in Los Angeles, California, expressed substantial doubt about Balqon's ability to continue as a going concern. The independent auditors noted that the Company has a shareholders' deficiency and has experienced recurring operating losses and negative operating cash flows since inception. The Company reported a net loss of $7.05 million on $2.13 million of revenues for 2011, compared with a net loss of $4.30 million on $677,745 of revenues for 2010. The Company's balance sheet at June 30, 2012, showed $2.15 million in total assets, $7.41 million in total liabilities, all current, and a $5.26 million total shareholders' deficiency. BANKATLANTIC BANCORP: Reports $277-Mil. Net Income in 3rd Quarter ----------------------------------------------------------------- BBX Capital Corporation, formerly known as BankAtlantic Bancorp Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $277.06 million on $4.23 million of total interest income for the three months ended Sept. 30, 2012, compared with a net loss of $11.79 million on $9.15 million of total interest income for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported net income of $250.54 million on $19.85 million of total interest income, compared with a net loss of $11.28 million on $32.16 million of total interest income for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $488.35 million in total assets, $233.62 million in total liabilities and $254.72 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/gohB0C About BankAtlantic Bancorp BankAtlantic Bancorp (NYSE: BBX) -- http://www.BankAtlanticBancorp.com/-- is a bank holding company and the parent company of BankAtlantic. BankAtlantic -- "Florida's Most Convenient Bank" with a Web presence at http://www.BankAtlantic.com/-- has nearly $6.0 billion in assets and more than 100 stores, and is one of the largest financial institutions headquartered junior in Florida. BankAtlantic has been serving communities throughout Florida since 1952 and currently operates more than 250 conveniently located ATMs. BankAtlantic reported a net loss of $28.74 million in 2011, a net loss of $143.25 million in 2010, and a net loss of $185.82 million in 2009. * * * As reported by the TCR on March 1, 2011, Fitch has affirmed its current Issuer Default Ratings for BankAtlantic Bancorp and its main subsidiary, BankAtlantic FSB at 'CC'/'C' following the announcement regarding the regulatory order with the Office of Thrift Supervision. BankAtlantic has announced that it has entered into a Cease and Desist Order with the OTS at both the bank and holding company level. The regulatory order includes increased regulatory capital requirements, limits to the size of the balance sheet, no new commercial real estate lending and improvements to its credit risk and administration areas. Further, the holding company must also submit a capital plan to maintain and enhance its capital position. BION ENVIRONMENTAL: Carret Asset Does Not Own Common Shares ----------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Carret Asset Management LLC disclosed that, as of Nov. 14, 2012, it does not beneficially owns any shares of common stock of Bion Environmental Technologies, Inc. A copy of the filing is available for free at http://is.gd/mQlC5C About Bion Environmental Bion Environmental Technologies Inc.'s patented and proprietary technology provides a comprehensive environmental solution to a significant source of pollution in US agriculture, large scale livestock facilities known as Confined Animal Feeding Operations. Bion's technology produces substantial reductions of nutrient releases (primarily nitrogen and phosphorus) to both water and air (including ammonia, which is subsequently re-deposited to the ground) from livestock waste streams based upon the Company's operations and research to date (and third party peer review). The Company reported a net loss applicable to the Company's common stockholders of $7.35 million on $0 of revenue for the year ended June 30, 2012, compared with a net loss applicable to the Company's common stockholders of $7.54 million on $0 of revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $8.26 million in total assets, $9.72 million in total liabilities, $19,900 million in Series B Redeemable Convertible Preferred stock, and a $1.47 million total deficit. GHP Horwath, P.C., in Denver, Colorado, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended June 30, 2012. The independent auditors noted that the Company has not generated revenue and has suffered recurring losses from operations which raise substantial doubt about its ability to continue as a going concern. BLUEGREEN CORP: Replaces Stock Merger Pact with Cash Transaction ---------------------------------------------------------------- BFC Financial Corporation and Bluegreen Corporation have terminated their November 2011 merger agreement and entered into a definitive agreement pursuant to which Bluegreen will be acquired in a cash transaction. BFC, through its wholly-owned subsidiary, Woodbridge Holdings, currently owns approximately 54% of Bluegreen's outstanding Common Stock. Under the terms of the agreement, Woodbridge will acquire the remaining approximate 46% of Bluegreen's outstanding Common Stock for $10.00 per share in cash (approximately $150 million) in a merger between a wholly-owned subsidiary and Bluegreen. Once the transaction is completed, Bluegreen will become a direct wholly-owned subsidiary of Woodbridge. The all-cash offer represents a 73.6% premium above the $5.76 closing price of Bluegreen's Common Stock on Nov. 14, 2012. The merger agreement, which was unanimously approved by a special committee comprised of Bluegreen's independent directors as well as the boards of directors of both companies, is subject to approval of Bluegreen's shareholders, Woodbridge obtaining the financing necessary to complete the transaction and the satisfaction of certain other customary closing conditions. Woodbridge plans to fund the acquisition through debt or equity financing, including by issuing up to 46% of the equity interests in Woodbridge and utilizing Bluegreen's assets. It is currently anticipated that the transaction will be completed promptly after all conditions to closing are satisfied. BFC's Chairman and Chief Executive Officer, Alan B. Levan, commented, "We believe this merger validates our long standing commitment to Bluegreen, and our belief in its operating platform and management." A copy of the Agreement and Plan of Merger is available at: http://is.gd/isWtVH About Bluegreen Corp. Bluegreen Corporation -- http://www.bluegreencorp.com/-- provides places to live and play through its resorts and residential community businesses. The Company reported a net loss of $17.25 million in 2011, compared with a net loss of $43.96 million in 2010. The Company's balance sheet at June 30, 2012, showed $1.04 billion in total assets, $716.94 million in total liabilities, and $325.75 million in total shareholders' equity. * * * In December 2010, Standard & Poor's Rating Services raised its corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'. BOMBARDIER INC: S&P Withdraws 'BB' Rating on $1BB Unsecured Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB' issue-level rating, and '4' recovery rating, on Bombardier Inc.'s proposed US$1 billion of unsecured notes. The company has decided to not issue these notes. At the same time, Standard & Poor's affirmed its 'BB' long-term corporate rating on Bombardier. The outlook is stable. "While the company's decision to not issue debt at this time will mean a somewhat better leverage ratio, with an adjusted debt-to- EBITDA ratio of about 6.3x compared with 7.0x for 2012, Bombardier will not benefit from US$1 billion in additional liquidity," said Standard & Poor's credit analyst Jatinder Mall. "We continue to view the company's current liquidity position, with a cash balance of US$2.1 billion, as adequate but there is less cushion if capital expenditures were to increase due to delays in the CSeries programs," Mr. Mall added. "The ratings on Bombardier reflect what we view as the company's satisfactory business risk profile and aggressive financial risk profile. Our ratings take into consideration Bombardier's leading market positions in the transportation and business aircraft segments, its good cost efficiency, and increasing product range and diversity. These positive factors are partially offset, in our opinion, by the financing pressure Bombardier's customers face in the aerospace and transportation divisions, significant execution risk in the launch of its upcoming CSeries jet, increasing leverage, and weakening cushion under the financial covenants," S&P said. Bombardier is engaged in the manufacture of transport solutions worldwide. It operates in two distinct industries: aerospace and rail transportation. It has 69 production and engineering sites in 23 countries, and a worldwide network of service centers. "The stable outlook reflects our expectations that Bombardier will continue to generate strong cash flows and that credit metrics will improve in the next two years, although the heavy capex related to the CSeries will mean debt levels will remain flat. We also view that the company will have sufficient liquidity between cash on hand and positive cash generation from it rail segment to fund heavy capex related to the CSeries programs," S&P said. "A further downgrade is possible if lower customer advances and additional delays in the CSeries programs lead to greater-than- expected negative free cash generation and liquidity becomes less than adequate as per our criteria. This could ultimately lead to delays in any improvement to the adjusted leverage ratio from our current expectations in the next year-and-a-half," S&P said. "Under the current business conditions, we believe an upgrade is unlikely in the near term. Nevertheless, when what we view as more normal and stable market conditions return and the company successfully launches the CSeries, we could consider revising the outlook to positive or raising the rating on Bombardier if in turn the company improves its financial measures, with adjusted debt to EBITDA falling below 4x or adjusted FFO to debt reaching 20% on a sustained basis," S&P said. BON-TON STORES: Incurs $10.1 Million Net Loss in Fiscal Q3 ---------------------------------------------------------- The Bon-Ton Stores, Inc., reported a net loss of $10.14 million on $668.73 million of net sales for the 13 weeks ended Oct. 27, 2012, compared with a net loss of $22.03 million on $656.07 million of net sales for the 13 weeks ended Oct. 29, 2011. For the 39 weeks ended Oct. 27, 2012, the Company reported a net loss of $95.96 million on $1.90 billion of net sales, compared with a net loss of $90.32 million on $1.90 billion of net sales for the 39 weeks ended Oct. 29, 2011. The Company's balance sheet at Oct. 27, 2012, showed $1.84 billion in total assets, $1.80 billion in total liabilities and $40.32 million in total shareholders' equity. Brendan Hoffman, president and chief executive officer, commented, "We believe that our third quarter results reflect progress made as a result of initiatives we have been implementing throughout the year, including a better-balanced merchandise assortment, refined marketing efforts, our 'Customer First' shopping experience, and expense management. We were excited to see customers respond favorably to the new fall receipts and to our multi-channel methods of communication which created excitement and traffic in stores and online. This all led to 36% Adjusted EBITDA growth for the quarter as compared with the prior year third quarter." Mr. Hoffman continued, "We are looking forward to the holiday shopping season as we believe that we are well-positioned for continued momentum in the fourth quarter with strong merchandising and marketing initiatives in place." A copy of the press release is available for free at: http://is.gd/bpFjsa About Bon-Ton Stores The Bon-Ton Stores, Inc., with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 276 department stores, which includes 11 furniture galleries, in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers nameplates and, in the Detroit, Michigan area, under the Parisian nameplate. The Company reported a net loss of $85.81 million on $1.23 billion of net sales for the 26 weeks ended July 28, 2012, compared with a net loss of $68.28 million on $1.24 billion of net sales for the 26 weeks ended July 30, 2011. * * * As reported by the TCR on July 13, 2012, Moody's Investors Service revised The Bon-Ton Stores, Inc.'s Probability of Default Rating to Caa1/LD from Caa3. The Caa1/LD rating reflects the company's exchange of $330 million of new senior secured notes due 2017 for $330 million of its unsecured notes due 2014. Moody's also affirmed the company's Corporate Family Rating at Caa1 and affirmed the Caa3 rating assigned to the company's senior unsecured notes due 2014. Moody's said the affirmation of the company's 'Caa1' corporate family rating reflects the company's persistent negative trends in sales and operating margins and uncertainties that the company's strategies to reverse these trends will be effective. BOSTON BIOMEDICAL: Moody's Cuts Rating on 1999 Bonds to 'Caa1' -------------------------------------------------------------- Moody's Investors Service has downgraded Boston Biomedical Research Institute's (BBRI or Institute) rating on the Series 1999 bonds to Caa1 from Ba3 following the notice of plans to wind down operations during FY 2013. The rating action impacts $12.9 million of rated debt. The bonds were issued through the Massachusetts Development Finance Agency. The rating remains under review for downgrade. Moody's expects to conclude its review of the rating in the next few months. Moody's review will focus on the Institute's plans to wind down operations during FY 2013 and the availability of funds to pay bondholders. Summary Ratings Rationale The downgrade to Caa1 rating reflects the institute's unusual decision to wind down its operations and sell its research facility, as well as further weakening of BBRI's financial performance in FY 2012, and a significant decline in unrestricted investments. The rating also incorporates uncertainty about recovery on the bonds, given the pending cessation of operations and a possible bankruptcy, although the possibility of a full recovery exists depending on the value of asset sales and other variables. The rating remains under review for downgrade. Challenges * Weakened competitive position of the Institute to attract sufficient research grants in light of federal funding constraints and board's decision to wind down operations of the institute during FY 2013, will result in no revenue generation, beyond the existing grants and contacts, and significant expenses to dissolve the organization. * Multiple years of operating deficits eroded the financial resources of the organization. Based on draft FY 2012 financials, BBRI generated a Moody's adjusted 22.8% operating deficit, and cash and investments declined to $10.3 million compared to $12.9 million of debt. * Heavy dependence on grants and contracts (85.4% of operating revenue in FY 2011), with federal funding representing the bulk of (91%)research funding. With the current slowdown in federal research funding and an increasingly competitive environment for securing federal grants, BBRI was unable to grow or stabilize its grant revenue in recent years. * Small scale of operations ($10.1 million revenue base in FY 2012) and limited fundraising support ($292,000 of annual gift revenue in FY 2012). * Breach of the debt service coverage covenant contained within the Loan and Trust Agreement. In FY 2008, 2009, and 2010 BBRI did not meet the debt service coverage covenant (FY 2009: negative 260% and FY 2010: 74% as compared to 110% required). Based on unaudited FY 2012 financials, BBRI did not meet this covenant and has hired a financial consultant, as per the Agreement. The Institute has met the liquidity ratio covenant within the Loan and Trust Agreement (FY 2009: 70.5% FY 2010: 69.2%, FY 2011:132% and FY 2012: 57.1% as compared to 50% required). Strengths * Debt service reserve fund, remaining unrestricted cash and investments, first mortgage on the research facility, security interest in gross receipts provide notable bondholder security. If the debt is accelerated, however, the institute does not have enough unrestricted cash and investments to pay off its debt (based on draft FY 2012 financials) and will have to realize proceeds from the sale of mortgaged property to pay off bondholders. Management is in the process of selling its research lab facility located in Watertown, MA. * No other secured creditors, except for Series 1999 bondholders. * Liquid financial resource base (75% of financial resources are expendable) with monthly liquidity of $8.8 million (FY 2011) covered expenses for 259 days. What Could Make The Rating Go UP Sale of the research facility for an amount in excess of the amount of debt outstanding What Could Make The Rating Go DOWN The rating could be downgraded should there be a delay in the planned asset sale or the amount is insufficient, combined with cash, to repay bondholders; deterioration of balance sheet which would reduce the likelihood of recovery Rating Methodology The Rating was assigned by evaluating factors believed to be relevant to the credit profile of Boston Biomedical Research Institute, such as i) the business risk and competitive position of the issuer versus others within its industry or sector, ii) the capital structure and financial risk of the issuer, iii) the projected performance of the issuer over the near to intermediate term, iv) the issuer's history of achieving consistent operating performance and meeting budget or financial plan goals, v) the nature of the dedicated revenue stream pledged to the bonds, vi) the debt service coverage provided by such revenue stream, vii) the legal structure that documents the revenue stream and the source of payment, and viii) and the issuer's management and governance structure related to payment. These attributes were compared against other issuers both within and outside of the Institute's core peer group and the rating is believed to be comparable to ratings assigned to other issuers of similar credit risk. BROADWAY FINANCIAL: Incurs $613,000 Net Loss in Third Quarter ------------------------------------------------------------- Broadway Financial Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $613,000 on $4.72 million of total interest income for the three months ended Sept. 30, 2012, compared with a net loss of $7.53 million on $6.24 million of total interest income for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported net earnings of $1.23 million on $15.40 million of total interest income, compared with a net loss of $9.38 million on $19.29 million of total interest income for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $384.28 million in total assets, $365.24 million in total liabilities and $19.04 million in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/wuUeZx About Broadway Financial Los Angeles, Calif.-based Broadway Financial Corporation was incorporated under Delaware law in 1995 for the purpose of acquiring and holding all of the outstanding capital stock of Broadway Federal Savings and Loan Association as part of the Bank's conversion from a federally chartered mutual savings association to a federally chartered stock savings bank. In connection with the conversion, the Bank's name was changed to Broadway Federal Bank, f.s.b. The conversion was completed, and the Bank became a wholly owned subsidiary of the Company, in January 1996. The Company is currently regulated by the Board of Governors of the Federal Reserve System. The Bank is currently regulated by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. The Company has a tax sharing liability to the Bank which exceeds operating cash at the Company level. The Company used its cash available at the holding company level to pay a substantial portion of this liability pursuant to the terms of the Tax Allocation Agreement between the Bank and the Company on March 30, 2012, and does not have cash available to pay its operating expenses. Additionally, the Company is in default under the terms of a $5 million line of credit with another financial institution lender. "Due to the regulatory cease and desist order that is in effect, the Bank is not allowed to make distributions to the Company without regulatory approval, and that approval is not likely to be given. Accordingly, the Company will not be able to meet its payment obligations within the foreseeable future unless the Company is able to secure new capital. These conditions raise substantial doubt about the Company's ability to continue as a going concern." Crowe Horwath LLP, in Costa Mesa, California, expressed substantial doubt about the Company's ability to continue as a going concern following the annual results for the year ended Dec. 31, 2011. Bankruptcy Warning "There can be no assurance our recapitalization plan will be achieved on the currently contemplated terms, or at all. If we are unable to raise capital, we plan to continue to shrink assets and implement other strategies to increase earnings. Failure to maintain capital sufficient to meet the higher capital requirements could result in further regulatory action, which could include the appointment of a conservator or receiver for the Bank. The Company or its creditors could also initiate bankruptcy proceedings," the Company said in its quarterly report for the period ended Sept. 30, 2012. CAESARS ENTERTAINMENT: Taps D. Colvin as Chief Financial Officer ---------------------------------------------------------------- Caesars Entertainment Corporation announced that Donald Colvin will join the company as Executive Vice President and Chief Financial Officer, subject to required regulatory approvals. In this role, Colvin will be responsible for Caesars' finance functions and report to Gary Loveman, Chairman, President and Chief Executive Officer. "Donald brings to Caesars more than two decades of financial leadership experience and a track record in driving financial strategy, managing complex balance sheets, executing and integrating acquisitions, and increasing shareholder value," Loveman said. "His experience will be a valuable addition to Caesars Entertainment, as we execute our strategy to expand our distribution network and further improve our capital structure." Colvin served as Executive Vice President and CFO of ON Semiconductor Corp. from April 2003 to October 2012. Prior to joining ON Semiconductor, he held a number of financial leadership positions throughout his career, including Vice President of Finance and CFO of Atmel Corporation, CFO of European Silicon Structures and several financial roles at Motorola Inc. "Caesars has a strong operating business and ambitious growth plans," Colvin said. "I look forward to working with Gary, the senior management team and my new colleagues to drive the company's future growth and success." Colvin is a director and chairman of the audit committee of Isola Group and was previously a director of Applied Micro Circuits Corp. He earned a bachelor's degree in economics and an MBA from the University of Strathclyde in Scotland. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. The Company reported a net loss of $666.70 million in 2011, and a net loss of $823.30 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $28.34 billion in total assets, $28.22 billion in total liabilities and $114.7 million in total Caesars stockholders' equity. * * * As reported by the TCR on March 28, 2012, Moody's Investors Service upgraded Caesars Entertainment Corp's Corporate Family Rating (CFR) and Probability of Default Rating both to Caa1 from Caa2. The upgrade of Caesars' ratings reflects very good liquidity, an improving operating outlook for gaming in a number of the company's largest markets that is expected to drive earnings growth, the completion of a bank amendment that resulted in the extension of debt maturities to 2018 from 2015, and the public listing of the company's equity that increases financial flexibility by providing it with another potential source of capital. The upgrade of the SGL rating reflects minimal debt maturities over the next few years, significant cash balances (approximately $900 million at December 31, 2011) and revolver availability that will be more than sufficient to fund the company's cash interest and capital spending needs. In the Aug. 17, 2012, edition of the TCR, Standard & Poor's Ratings Services revised its rating outlook on Las Vegas-based Caesars Entertainment Corp. and wholly owned subsidiary Caesars Entertainment Operating Co. Inc. to negative from stable. "We affirmed all other ratings on the companies, including our 'B-' corporate credit rating," S&P said. As reported by the TCR on Aug. 17, 2012, Fitch Ratings affirmed CEC's long-term issuer default rating at 'CCC'. CALYPTE BIOMEDICAL: Delays Q3 Form 10-Q for Review Problems ----------------------------------------------------------- Calypte Biomedical Corporation was unable to file its quarterly report on Form 10-Q for the quarter ended Sept. 30, 2012, on a timely basis due to difficulties in scheduling a Board meeting for review of the Company's financial statements for the quarter. These difficulties relate to the small size of the Company's Board and the number of time zones spanned by the necessary participants at such a meeting, which limits the times during which a telephonic meeting can be scheduled. As of this time, the Company expects to file its Form 10-Q on or about Nov. 30, 2012. About Calypte Biomedical Portland, Oregon-based Calypte Biomedical Corporation develops, manufactures, and distributes in vitro diagnostic tests, primarily for the diagnosis of Human Immunodeficiency Virus ("HIV") infection. Following the Company's 2011 results, OUM & Co. LLP, in San Francisco, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring operating losses and negative cash flows from operations, and management believes that the Company's cash resources will not be sufficient to sustain its operations through 2012 without additional financing. The Company reported a net loss of $693,000 in 2011, compared with net income of $8.84 million in 2010. The Company's balance sheet at March 31, 2012, showed $1.95 million in total assets, $6.43 million in total liabilities, and a $4.48 million total stockholders' deficit. Bankruptcy Warning The Company said in the 2011 annual report that, in July 2010 the Company entered into a series of agreements providing for (i) the restructuring of the Company's outstanding indebtedness to Marr and SF Capital and (ii) the transfer of the Company's interests in the two Chinese joint ventures, Beijing Marr and Beijing Calypte, to Kangplus. Under the Debt Agreement, $6,393,353 in outstanding indebtedness was agreed to be converted to 152,341,741 shares of the Company's common stock, and the Company's remaining indebtedness to Marr, totaling $3,000,000 was cancelled. In consideration for that debt restructuring, the Company transferred its equity interests in Beijing Marr to Kangplus pursuant to the Equity Transfer Agreement and transferred certain related technology to Beijing Marr. The Company has also agreed to transfer its equity interests in Beijing Calypte to Marr or a designate of its choosing. The transactions contemplated by the Debt Agreement and the Equity Transfer Agreement are subject to Chinese government registration of the transfer of the equity interests. This registration has now been approved, and the Shares were issued in March 2012. Under the debt agreement with SF Capital, $2,008,259 in outstanding indebtedness was converted to 47,815,698 shares of the Company's common stock. Notwithstanding this debt restructuring, the Company's significant working capital deficit and limited cash resources place a high degree of doubt on its ability to continue its operations. In light of the Company's existing operations and financial challenges, the Company is exploring strategic and financing options. Failure to obtain additional financing will likely cause the Company to seek bankruptcy protection. CDII TRADING: CD Int'l Has Approval for Sale and Settlement ----------------------------------------------------------- CD International Enterprises, Inc., a U.S. based company that produces, sources, and distributes industrial commodities in China and the Americas and provides business and financial corporate consulting services, today provided a business update for its international commodities distribution business. CD International and its affiliated companies received bankruptcy court approval for the disposition of CDII Trading's assets and settlement of claims on Sept. 24, 2012. Upon receiving this approval CD International resumed its international commodities distribution business through its CDII Minerals subsidiary. CDII Minerals has spent the weeks following the settlement reestablishing relationships with suppliers and key industry contacts to resume its Latin American commodities operations which were essentially idled during the court proceedings. CDII Minerals recent efforts have resulted in the sale of approximately 11,000 tons of iron ore locally in Mexico to a China based steel mill operating in Manzanillo, Mexico. Additionally, CDII Minerals has worked to resume production in Bolivia to set the stage for shipments to potentially begin out of this area in the coming months. CD International has brought in engineers from China to help CDII Minerals increase the quantity and quality of production out of Latin America as it seeks to expand its Bolivian operations. Commenting on the announcement, Dr. James Wang, Chairman and CEO of CD International, stated, "We are pleased to resume the operation of our commodities business in Latin America. By completing the sale of our inventory in Mexico and positioning CDII Minerals to market our current and future inventories in Bolivia and Chile to further enhance our liquidity, we expect to have greater financial flexibility to build this business in the coming years." About CDII Trading CDI International's wholly-owned subsidiary, CDII Trading, filed a voluntary petition (Bankr. S.D. Fla. Case No. 12-15810) on March 9, 2012, CD International Enterprises, Inc. -- http://www.cdii.net/-- is a U.S. based company that produces, sources, and distributes industrial commodities in China and the Americas and provides business and financial corporate consulting services. Headquartered in Deerfield Beach, Florida with corporate offices in Shanghai, CD International's unique infrastructure provides a platform to expand business opportunities globally while effectively and efficiently accessing the U.S. capital markets. CENTERPLATE INC: Moody's Says NHL Lockout Credit Negative --------------------------------------------------------- Moody's Investors Service said that National Hockey League game cancellations in October and November due to the NHL lockout are a credit negative, but do not affect the ratings or outlook of Centerplate, Inc. (B3, Stable). Centerplate, Inc. provides concession services, including catering and novelty merchandise items at stadiums, sports arenas, convention centers and other entertainment facilities at various locations in the US and Canada. The company reported revenues of approximately $850 million for the twelve months ended October 2, 2012. Centerplate is controlled by private equity firm Olympus Partners following its leveraged buyout in October 2012. CONQUEST SANTA FE: Seeks to Use Cash Collateral ----------------------------------------------- At the onset of its bankruptcy case, Conquest Santa Fe, L.L.C., has sought Court permission to use cash tied to pre-bankruptcy loans to allow the Debtor to operate its ongoing business and reorganize. LPP Mortgage, Ltd., is the successor in interest to the loans. The original lender for the loan was Charter Bank of Santa Fe. In January 2010, the Original Lender was closed by the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation was named Receiver. The FDIC, as Receiver, assigned the loan to Charter Bank of Albuquerque, NM, a subsidiary of Beal Financial Corp., effective Jan. 22, 2010. Effective Oct. 14, 2011, New Charter was merged with and into Beal Bank, SSB, with Beal Bank as the surviving entity. Beal Bank, as successor-by-merger to New Charter, then assigned the loan to Beal Nevada Corp., which then assigned the loan to LPP Mortgage. The Original Lender extended the loan in 2008 to finance the Debtor's construction of a 92-room Hyatt Place Hotel on Cerrillos Road, Santa Fe, New Mexico. The Loan Commitment was for a one- year construction loan in the amount of $9.6 million. Thereafter, the Loan Commitment provided that the construction loan would be converted into a 20-year fixed term loan in the amount of $7.6 million. The Loan Commitment included an approved 20-year debenture from the SBA, in the amount of $2 million to provide permanent financing for the full construction amount. The construction loan had an original maturity date of Oct. 10, 2009, which was later extended to April 10, 2010. The construction loan had an interest rate equal to the prime rate plus 1%. The Loan required monthly interest-only payments, with a lump sum payment of all principal and remaining interest due at maturity. The construction loan authorized the lender to place $480,758 of the principal amount in an interest reserve, to cover the interest payable. In addition, the Loan Commitment included a line of credit note in the amount of $712,502. The line of credit note had an original maturity of Jan. 10, 2011. The line of credit was for site improvements and had a variable rate of interest equal to the prime rate plus one percent. The line of credit note was a demand note. However, if no demand was made, the borrower was to pay the loan in one payment of all outstanding principal plus accrued interest on maturity. On Oct. 18, 2010, New Charter sent a demand letter to the Debtor indicating that the Loan was in default and had an outstanding principal amount due and owing of $6,864,487. According to the Debtor, the letter incorrectly stated that interest was accruing at the rate of 18%, despite the fact that the Oct. 18 letter was the first occasion that a default notice had been sent. Based on the prior breach and the failure to fund by New Charter, the Debtor disputes that it committed any default and further disputes that default interest is chargeable pursuant to the Loan Documents. Without justification, the Debtor said New Charter demanded payment of default interest back to March 2010 (a time before the loan had matured, and when New Charter was refusing to communicate or process any draw requests). The Debtor said that a Dec. 31, 2010 statement from CLMG Corp. later showed total interest for 2010 of $10,740.68 and an outstanding principal of $6,864,487 at year end, with total interest of $46,885 having been paid from the escrow impound. Additionally, a May 2011 audit letter from CLMG showed, as of Dec. 2010, a balance of $6,864,487. In total, the Debtor said, the hotel project that the Loan was to fund was approved for financing at a level of $9.35 million, even after deductive amendments to the Loan Documents. However, that amount was never funded under the Loan. Instead, New Charter, through its agents, in breach of the Loan Documents, refused to meaningfully communicate with the Debtor from the effective date of the Charter Purchase Agreement whereby New Charter took control of the Original Lender until after the date of maturity on the Loan. New Charter created the default by failing to comply with the Loan Documents and the established course of dealing that the Debtor had with the Original Lender. The Debtor alleges New Charter engaged in such conduct in a bad faith effort to create a default that it could use as a pretext to deny further financing under the Loan and deny permanent financing promised in the Commitment. The permanent financing promised in the Loan Commitment was absolutely material to the Debtor's decision to borrow such funds. In its request to use cash collateral, the Debtor propose to provide adequate protection by granting LPP Mortgage replacement liens on similar collateral generated postpetition by the Debtor's use of cash proceeds, in the same nature, extent, and priority as LPP is determined to have a security interest prepetition. About Conquest Santa Fe Conquest Santa Fe, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-24937) in Tucson, Arizona, Nov. 16, 2012, estimating at least $10 million in assets and liabilities. Judge Eileen W. Hollowell presides over the case. Frederick J. Petersen, Esq., and Lowell E. Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., preside over the case. The petition was signed by Morris Eigen, member. CYPRESS OF TAMPA: Files for Chapter 11 in Tampa ----------------------------------------------- The Cypress of Tampa LLC filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-17518) in Tampa on Nov. 20. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated assets and debts of $10 million to $50 million. The Debtor on the Petition Date filed a motion to use cash collateral and an application to employ Jennis & Bowen, P.L., as counsel. The Debtor also seeks joint administration with the bankruptcy case of The Cypress of Tampa II, LLC (Case No. 12-17520). The Chapter 11 plan and explanatory disclosure statement are due March 20, 2013. D.C. DEVELOPMENT: Court OKs Rial & Assoc. as Lending Consultant --------------------------------------------------------------- Recreational Industries, Inc., D.C. Development, LLC, Wisp Resort Development, Inc., and The Clubs at Wisp, LLC, sought and obtained approval from the U.S. Bankruptcy Court to employ R. Hugh Rial of Rial & Associates LLC as banking and commercial lending consultant. R. Hugh Rial attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm will: (a) review and analyze loan documents, correspondence and files; (b) evaluate the banking practices, procedures and conduct employed by Branch Banking and Trust Company concerning the loans; and (c) provide an opinion with respect to lender liability issues that may be present with respect to the BBT loans. The firm will be compensated by the Debtors for its services actually rendered on an hourly basis. Mr. Rial's current hourly rate is $425; however, he has agreed to provide his services at an hourly rate of $390 for this engagement. Mr. Rial's hourly rate for travel time is $125. About Wisp Resort et al. Recreational Industries, Inc., D.C. Development, LLC, Wisp Resort Development, Inc., and The Clubs at Wisp, LLC, operate a ski resort and real estate development companies located in Garrett County, Maryland generally known as Wisp Resort. The Wisp Resort comprises approximately 2,200 acres of master planned and fully entitled land, 32 ski trails covering 132 acres of skiable terrain with 12 lifts and two highly-rated golf courses. Financial problems were caused by a guarantee given to Branch Banking & Trust Co. to secure a $29.6 million judgment the bank obtained on a real estate development within the property. Recreational Industries, D.C. Development, Wisp Resort Development and The Clubs at Wisp filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 11-30548) on Oct. 15, 2011. D.C. Development disclosed $91,155,814 in assets and $46,141,245 in liabilities as of the Chapter 111 filing. The Debtors engaged Logan, Yumkas, Vidmar & Sweeney LLC as counsel and tapped Invotex Group as financial restructuring consultant. SSG Capital Advisors, LLC, serves as exclusive investment banker to the Debtors. The Official Committee of Unsecured Creditors has tapped Cole, Schotz, Meisel, Forman & Leonard, P.A. as counsel. D.C. DEVELOPMENT: Court OKs Foley & Lardner as Tax Counsel ---------------------------------------------------------- D.C. Development, LLC, Recreational Industries, Inc., Wisp Resort Development, Inc., and The Clubs at Wisp, LLC sought and obtained approval from the U.S. Bankruptcy Court to employ Foley & Lardner LLP as special tax and corporate counsel effective as of Aug. 23, 2012. The Debtor said it is necessary to employ Foley as special tax and corporate counsel to render professional services in the case, including, without limitation, advising the Debtors concerning tax and corporate implications of the restructuring and/or sale of the Debtors' estates and/or assets. Albert P. Silva, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The current hourly rates charged by Foley for its professionals who will be engaged in the matter are: Professional Rates ------------ ----- Partners $445 to $475 Associates $270 to $290 Paraprofessionals $60 to $290 About Wisp Resort et al. Recreational Industries, Inc., D.C. Development, LLC, Wisp Resort Development, Inc., and The Clubs at Wisp, LLC, operate a ski resort and real estate development companies located in Garrett County, Maryland generally known as Wisp Resort. The Wisp Resort comprises approximately 2,200 acres of master planned and fully entitled land, 32 ski trails covering 132 acres of skiable terrain with 12 lifts and two highly-rated golf courses. Financial problems were caused by a guarantee given to Branch Banking & Trust Co. to secure a $29.6 million judgment the bank obtained on a real estate development within the property. Recreational Industries, D.C. Development, Wisp Resort Development and The Clubs at Wisp filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 11-30548) on Oct. 15, 2011. D.C. Development disclosed $91,155,814 in assets and $46,141,245 in liabilities as of the Chapter 111 filing. The Debtors engaged Logan, Yumkas, Vidmar & Sweeney LLC as counsel and tapped Invotex Group as financial restructuring consultant. SSG Capital Advisors, LLC, serves as exclusive investment banker to the Debtors. The Official Committee of Unsecured Creditors has tapped Cole, Schotz, Meisel, Forman & Leonard, P.A. as counsel. D.C. DEVELOPMENT: First United Opposes Exclusivity Extension ------------------------------------------------------------ First United Bank and Trust filed an opposition to D.C. Development, LLC, and its affiliates' motion for a fourth extension of exclusive periods to file a plan of reorganization and obtain acceptances thereto by 60 days. First United points out the Debtors said they merely seek additional time to implement a plan and process which as a practical matter could only serve "out of the money" insider interests, while potentially disenfranchising creditor's paramount rights and interests. According to First United, there is no categorical reason why other parties-in-interest, including FUB as a principal secured creditor, should not be permitted to file their own Chapter 11 plan if they so choose. First United says the competition engendered by the potential for competing plans will serve to level the playing field. About Wisp Resort et al. Recreational Industries, Inc., D.C. Development, LLC, Wisp Resort Development, Inc., and The Clubs at Wisp, LLC, operate a ski resort and real estate development companies located in Garrett County, Maryland generally known as Wisp Resort. The Wisp Resort comprises approximately 2,200 acres of master planned and fully entitled land, 32 ski trails covering 132 acres of skiable terrain with 12 lifts and two highly-rated golf courses. Financial problems were caused by a guarantee given to Branch Banking & Trust Co. to secure a $29.6 million judgment the bank obtained on a real estate development within the property. Recreational Industries, D.C. Development, Wisp Resort Development and The Clubs at Wisp filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 11-30548) on Oct. 15, 2011. D.C. Development disclosed $91,155,814 in assets and $46,141,245 in liabilities as of the Chapter 111 filing. The Debtors engaged Logan, Yumkas, Vidmar & Sweeney LLC as counsel and tapped Invotex Group as financial restructuring consultant. SSG Capital Advisors, LLC, serves as exclusive investment banker to the Debtors. The Official Committee of Unsecured Creditors has tapped Cole, Schotz, Meisel, Forman & Leonard, P.A. as counsel. DRIVETIME AUTOMOTIVE: S&P Says B Rating on $200MM Notes Off Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services removed its 'B' issuer credit ratings on DriveTime Automotive Group Inc. and DT Acceptance Corp. from CreditWatch with developing implications. "At the same time, we affirmed the ratings. The outlook is stable. We also removed our 'B' rating on DriveTime's $200 million senior secured notes from CreditWatch developing," S&P said. "DriveTime has announced that it terminated its agreement to sell itself in separate transactions because of unsatisfied conditions related to the closing of the transactions," said Standard & Poor's credit analyst Kevin Cole. "In connection with the termination, the acquiring group has terminated its offer to purchase DriveTime's outstanding senior secured notes, and all notes tendered will be returned to their previous holders," S&P said. "In September 2012, DriveTime agreed to sell its finance receivable portfolio to Santander Consumer USA Inc. (SCUSA). In addition, a new entity owned by third-party investors would acquire all of the outstanding stock of DriveTime, thereby acquiring all of DriveTime's used-vehicle dealerships and other facilities. DriveTime did not specify which closing conditions were not satisfied, and the company did not indicate whether it is still seeking to sell itself to another group of potential buyers. We believe the company may seek another sale in the future. However, we have no indication at this time as to whether DriveTime is still contemplating a sale, or whether the structure of any potential sale would have positive or negative rating implications," S&P said. "The stable outlook is based on our view that DriveTime's asset quality and profitability have stabilized and that the firm will maintain conservative capital levels and regular access to the ABS market on a cost-competitive basis," said Mr. Cole. EDIETS.COM INC: Delays Third Quarter Form 10-Q for Review --------------------------------------------------------- eDiets.com, Inc.'s independent registered public accounting firm was unable to complete its review of the Company's financial statements to be contained in its quarterly report on Form 10-Q for the period ended Sept. 30, 2012, on or prior to the prescribed filing date of Nov. 14, 2012. As a result, the Company was not able to finalize its Quarterly Report on Form 10-Q within the prescribed time period. About eDiets eDiets.com, Inc. is a leading provider of personalized nutrition, fitness and weight-loss programs. eDiets currently features its award-winning, fresh-prepared diet meal delivery service as one of the more than 20 popular diet plans sold directly to members on its flagship site, http://www.eDiets.com Following the 2011 results, Ernst & Young LLP, in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses, was not able to meet its debt obligations in the current year and has a working capital deficiency. The Company's balance sheet at June 30, 2012, showed $1.99 million in total assets, $4.26 million in total liabilities, all current, and a $2.26 million total stockholders' deficit. Bankruptcy Warning On Aug. 10, 2012, the Company entered into a letter of intent with As Seen On TV, Inc., a direct response marketing company, whereby ASTV agreed to acquire all of the Company's outstanding shares of common stock in exchange for 16,185,392 newly issued shares of ASTV common stock, representing an acquisition price of approximately $0.80 per share of the Company's common stock. Under the Letter of Intent, all of the Company's other outstanding securities exercisable or exchangeable for, or convertible into, the Company's capital stock would be deemed converted into, and exchanged for securities of ASTV on an as converted basis immediately prior to the record date of the acquisition. Both before and after consummation of the transactions described in the Letter of Intent, and if those transactions are never consummated, the continuation of the Company's business is dependent upon raising additional financial support. "In light of our results of operations, management has and intends to continue to evaluate various possibilities to the extent these possibilities do not conflict with our obligations under the Letter of Intent," the Company said in its quarterly report for the period ended June 30, 2012. "These possibilities include: raising additional capital through the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt, selling one or more lines of business, or all or a portion of the our assets, entering into a business combination, reducing or eliminating operations, liquidating assets, or seeking relief through a filing under the U.S. Bankruptcy Code." ECO BUILDING: Delays Form 10-Q for Sept. 30 Quarter --------------------------------------------------- Eco Building Products, Inc.'s quarterly report could not be filed within the prescribed time period due to the Company requiring additional time to prepare and review the quarterly report for the period ended Sept. 30, 2012. That delay could not be eliminated by the Company without unreasonable effort and expense. In accordance with Rule 12b-25 of the Securities Exchange Act of 1934, the Company will file its Form 10-Q no later than five calendar days following the prescribed due date. Vista, Calif.-based Eco Building Products is a manufacturer of proprietary wood products treated with an eco-friendly proprietary chemistry that protects against mold, rot, decay, termites and fire. The Company reported a net loss of $11.2 million on $3.7 million of revenue in fiscal 2012, compared with a net loss of $6.0 million on $1.3 million of revenue in fiscal 2011. The Company's balance sheet at June 30, 2012, showed $5.0 million in total assets, $7.6 million in total liabilities, and a stockholders' deficit of $2.6 million. Sam Kan & Company, in Alameda, Calif., expressed substantial doubt about Eco's ability to continue as a going concern following the fiscal 2012 financial results. The independent auditors noted that the Company has generated minimal operating revenues, losses from operations, significant cash used in operating activities and its viability is dependent upon its ability to obtain future financing and successful operations. EDISON MISSION: Misses Interest Payment, May File for Bankruptcy ---------------------------------------------------------------- Edison Mission Energy said it will likely seek for protection under Chapter 11 of the U.S. Bankruptcy Code if it fails to pay indebtedness under its unsecured bonds maturing in 2017, 2019 and 2027. On Nov. 15, 2012, $97 million of interest payments were due on unsecured EME bonds maturing. EME elected not to make the November 15 interest payments at this time. EME's unsecured bonds generally provide for a 30-day grace period for interest payments before an event of default will be deemed to have occurred. If the interest payments are not made prior to the expiration of the grace period on Dec. 17, 2012, then generally either the Trustee or the holders of not less than 25% in aggregate principal amount of the bonds may declare the entire principal amount of the bonds and the interest accrued thereon to be due and payable immediately. EME and its parent, Edison International, continue to engage in discussions with the bondholders' financial and legal advisors regarding potential restructuring transactions of EME. About Edison Mission Santa Ana, California-based Edison Mission Energy is a holding company whose subsidiaries and affiliates are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities. EME also engages in hedging and energy trading activities in power markets through its subsidiary Edison Mission Marketing & Trading, Inc. EME was formed in 1986 and is an indirect subsidiary of Edison International. Edison International also owns Southern California Edison Company, one of the largest electric utilities in the United States. As of Dec. 31, 2010, EME's subsidiaries and affiliates owned or leased interests in 39 operating projects with an aggregate net physical capacity of 10,979 MW of which EME's pro rata share was 9,852 MW. At Dec. 31, 2010, EME's subsidiaries and affiliates also owned four wind projects under construction totaling 480 MW of net generating capacity. The Company reported a $360 million net loss for the first nine months of 2012 on operating revenue of $1.01 billion. It had a net loss of $1.07 billion in 2011, compared with net income of $163 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $8.17 billion in total assets, $6.68 billion in total liabilities and $1.48 billion in total equity. Bankruptcy Warning At June 30, 2012, EME, and its subsidiaries without contractual dividend restrictions, had corporate cash and cash equivalents of $879 million, which includes Midwest Generation's cash and cash equivalents of $177 million. EME and Midwest Generation's previous revolving credit agreements have been terminated or expired and no longer are sources of liquidity. At June 30, 2012, EME had $3.7 billion of unsecured notes outstanding, $500 million of which mature in June 2013. EME is currently experiencing operating losses due to lower realized energy and capacity prices, higher fuel costs and lower generation at the Midwest Generation plants. Forward market prices indicate that these trends are expected to continue for a number of years. As a result, EME expects that it will incur further reductions in cash flow and losses in the current year and in subsequent years. A continuation of these adverse trends coupled with pending debt maturities and the need to retrofit its Midwest Generation plants to comply with governmental regulations will exhaust EME's liquidity. Consequently, EME will need to consider all options available to it, including potential sales of assets, restructuring, reorganization of its capital structure, or conservation of cash that would be otherwise applied to the payment of obligations. EME has entered into non-disclosure and engagement agreements with advisors representing certain of its unsecured bondholders for the purpose of engaging in discussions with those advisors and Edison International regarding EME's financial condition. Absent a restructuring of its obligations, based on current projections, EME is not expected to have sufficient liquidity to repay the $500 million debt obligation due in June 2013. As a result, EME may need to file for protection under Chapter 11 of the U.S. Bankruptcy Code. * * * In August 2012, Moody's Investors Service downgraded the long-term ratings of Edison Mission Energy and its subsidiary, Midwest Generation Company, LLC (MWG), including EME's senior unsecured notes to Ca from Caa3 and EME's Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Ca from Caa2. The rating outlook for EME and MWG is negative. "The rating action reflects the high probability of a default over the next several months as the capital structure appears likely to be restructured in light of expected weak cash flow, environmental capital requirements, and upcoming debt maturities," said A.J. Sabatelle, Senior Vice President at Moody's. "The rating action recognizes comments by EME's management in its recent SEC quarterly filings concerning the increased default prospects for EME and its subsidiary MWG, and factors in Moody's recovery prospects for security holders at EME and MWG in a default scenario," added Sabatelle. EDISON MISSION: Fitch Cuts Longterm Issuer Default Rating to 'C' ---------------------------------------------------------------- Fitch Ratings has downgraded Edison Mission Energy (EME) and Midwest Generation LLC's (MWG) Long-term Issuer Default (IDR) ratings to 'C' from 'CC'. Fitch has also affirmed EME's senior unsecured debt and recovery ratings at 'C' and RR5, respectively. Fitch notes that MWG's secured working capital facility expired in June 2012. Approximately $3.7 billion of long-term, senior unsecured debt is affected by the rating action. The ratings of Edison International (EIX) and Southern California Edison (SCE) are not affected by the rating action. EIX has managed EME on a stand-alone basis. Fitch does not expect any direct financial exposure to result from the anticipated EME bankruptcy. Similarly, SCE operations are separate from EIX and EME consistent with prevailing California Public Utilities Commission regulations. Fitch considers 'C' category credits to possess exceptionally high levels of credit risk. The 'C' category also indicates default is imminent or inevitable, or the issuer is in standstill. Conditions indicative of a 'C' category rating include: -- That the issuer has entered into a grace or cure period following non-payment of a material financial obligation; -- The issuer has entered into a temporary negotiated waiver or standstill agreement following a payment default on a material financial obligation; or -- Fitch Ratings otherwise believes a condition of 'RD' (Restricted Default) or 'D' (Default) to be imminent or inevitable, including through the formal announcement of a distressed debt exchange. On Nov. 15, 2012, EME filed Form 8-K with the Securities and Exchange Commission indicating that the company elected not to make interest payments totaling $97 million on senior unsecured debt scheduled to mature in 2017, 2019 and 2027. EME bond documents provide a 30-day grace period, which expires on Dec. 17, 2012. If the interest payment is not made prior to the end of the grace period on December 17th, the company is likely to file for Chapter 11 protection under the U.S. Bankruptcy Code. An EME bankruptcy would be an event of default under Midwest Generation, LLC's Powerton-Joliet lease. 'C' is the lowest rating assigned to debt instruments in Fitch's rating scale. The 'RR5' Recovery Rating is based on a recovery level of approximately 11% to 30% of principal claims by senior unsecured creditors. ELPIDA MEMORY: U.S. Court to Decide on Sale to Micron Technology ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that an ad hoc bondholder group won a victory over Japan's Elpida Memory Inc. on the issue of whether the U.S. Bankruptcy Court has any meaningful role to pay in the sale of company assets located in the U.S. Elpida took the position that the bankruptcy judge in Delaware is "obliged" to approve the sale of the principal assets to Micron Technology Inc. because the Japanese court already has done so. U.S. Bankruptcy Judge Christopher Sontchi disagreed in a 21-page opinion filed Nov. 16. According to the report, on the sale of property in the U.S. owned by a company principally in bankruptcy abroad, Judge Sontchi concluded that the "plain language" of Chapter 15 of U.S. bankruptcy law requires him to impose the same standard for approval that would be applicable to a company principally in bankruptcy in the U.S. Consequently, Judge Sontchi, the report relates, said he must decide if technology sales meet the so-called business judgment test. Judge Sontchi said Elpida wanted him "to defer completely to the Tokyo court." To do so, he said, "would gut Section 1520" of Chapter 15, the provision governing sales of a foreign-based company's property located in the U.S. The report discloses that Judge Sontchi will hold a hearing on Dec. 4-5 to decide if the sale standard has been satisfied in the Micron transaction. Judge Sontchi also will decide in the December hearing whether to approve the sale of certain patents to Rambus Inc. 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. In April 2012, Bankruptcy Judge Christopher Sontchi recognized Japan as home to the so-called foreign main proceeding. The finding automatically halted creditor actions in the U.S. and affords Sontchi the ability to assist the court in Tokyo. At the end of October, the court in Japan approved Micron as the buyer for most Elpida assets and sent the reorganization plan to creditors for a vote. Some U.S. bondholders have been arguing that the proposed sale to Boise, Idaho-based Micron for an estimated $1.8 billion at present value is for substantially less than Elpida's liquidation value. ENERGY EDGE: Delays Third Quarter Form 10-Q for Review ------------------------------------------------------ Energy Edge Technologies Corporation informed the U.S. Securities and Exchange Commission it will be late in filing its quarterly report on Form 10-Q for the period ended Sept. 30, 2012. The review of the financial statements has not yet been completed. Bridgewater, New Jersey-based Energy Edge Technologies Corporation provides energy engineering and services specializing in the development and implementation of advanced, turnkey projects to reduce energy losses and increase the efficiency of new and existing buildings. Revenues come primarily from engineering survey work and turnkey energy projects where the Company takes responsibility for equipment procurement, installation labor, utility rebates, tax incentives, pre and post survey work, waste removal, certifications, and ongoing measurement and verification of results. The Company's balance sheet at June 30, 2012, showed $1.0 million in total assets, $1.2 million in total liabilities, and a stockholders' deficit of $200,862. The Company has limited working capital, and has suffered a significant loss from operations. "These factors create substantial doubt about the Company's ability to continue as a going concern." FIRST FINANCIAL: Cancels Agreement to Sell Louisville Branches -------------------------------------------------------------- First Financial Service Corporation, parent of First Federal Savings Bank of Elizabethtown, announced that First Security Bank of Owensboro, Inc., has terminated the Branch Purchase Agreement with First Federal. The Agreement provided for the sale of First Federal's four retail banking offices in Louisville, Kentucky to First Security. First Security exercised its right to terminate the Agreement because it became reasonably apparent that the Agreement's financing condition would not be satisfied by Nov. 14, 2012. The financing condition provided that First Security's parent bank holding company had to raise and contribute to First Security the capital necessary to satisfy any capital injection requirement needed for governmental approval of the sale. "Our ongoing efforts to evaluate all available strategic options to meet required regulatory capital levels will continue despite the termination of the agreement to sell our Louisville branches," stated Gregory S. Schreacke, President of First Financial Service Corporation." We will continue to provide full customer service to all of our Louisville customers." About First Financial Elizabethtown, Kentucky-based First Financial Service Corporation is the parent bank holding company of First Federal Savings Bank of Elizabethtown, which was chartered in 1923. The Bank serves six contiguous counties encompassing central Kentucky and the Louisville metropolitan area, through its 17 full-service banking centers and a commercial private banking center. As reported in the TCR on April 9, 2012, Crowe Horwath LLP, in Louisville, Ky., audited the Company's financial statements for 2011. The independent auditors said that the Company has recently incurred substantial losses, largely as a result of elevated provisions for loan losses and other credit related costs. "In addition, both the Company and its bank subsidiary, First Federal Savings Bank, are under regulatory enforcement orders issued by their primary regulators. First Federal Savings Bank is not in compliance with its regulatory enforcement order which requires, among other things, increased minimum regulatory capital ratios. First Federal Savings Bank's continued non-compliance with its regulatory enforcement order may result in additional adverse regulatory action." The Company's balance sheet at June 30, 2012, showed $1.192 billion in total assets, $1.143 billion in total liabilities, and stockholders' equity of $48.5 million. In its 2012 Consent Order with the FDIC and KDFI, the Bank agreed to achieve and maintain a Tier 1 capital ratio of 9.0% and a total risk-based capital ratio of 12.0% by June 30, 2012. "At June 30, 2012, we were not in compliance with the Tier 1 and total risk- based capital requirements. We notified the bank regulatory agencies that the increased capital levels would not be achieved and anticipate that the FDIC and KDFI will reevaluate our progress toward achieving the higher capital ratios at Sept. 30, 2012." FIRST PLACE: Treasury Department Wants to Slow Down Sale -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Attorney in Delaware told the bankruptcy court on behalf of the Treasury Department that First Place Financial Corp. should slow down the sale of its 41-branch First Place Bank. According to the report, the bank holding company filed for Chapter 11 protection on Oct. 29 intending within 45 days to sell the bank subsidiary for $45 million to Talmer Bancorp Inc. from Troy, Michigan, absent a better bid at auction. There will be a hearing on Nov. 26 for approval of bidding procedures. The report relates that Treasury says it holds preferred stock in return for injecting cash into the bank during the financial crisis. Unless the sale goes for more than $45 million, Treasury says it will receive nothing from the bankruptcy. Treasury wants the sale slowed by 90 days. Within that time, First Place may determine that net tax loss carry forwards exceed the currently estimated $39 million, thus increasing the company's value. The 11% breakup fee for Talmer is too large, according to Treasury. The report adds the official committee representing holders of trust preferred securities also is objecting to sale procedures. The nature of the objection is unknown because it's filed under seal. Talmer has 45 branches of its own. Along with the purchase, it will provide the First Place bank with $200 million in capital to meet regulatory requirements. About First Place First Place Financial Corp. is a $3.1 billion financial services holding company, based in Warren, Ohio. First Place disclosed assets of $175.3 million and liabilities totaling $64.5 million. Debt includes $64.3 million on three issues of junior subordinated notes held by trusts affiliated with First Place. The First Place bank subsidiary isn't in bankruptcy. Assets include $7.5 million cash mostly held at the bank. First Place filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-12961) in Delaware on Oct. 28, 2012, 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. Donlin, Recano & Company, Inc. -- http://www.donlinrecano.com-- is the claims and notice agent. FIRST SECURITY: Incurs $9.4 Million Net Loss in Third Quarter ------------------------------------------------------------- First Security Group, Inc., announced results for the three and nine months ending Sept. 30, 2012. For the three and nine months ended Sept. 30, 2012, the Company reported a $9.4 million and $23.5 million loss allocated to common shareholders, respectively, for a net loss per share (basic and dilutive) of $5.79 and $14.54 per share. "During the third quarter, we aggressively disposed of nearly 25% of our non-performing assets, which was a significant driver of the loss in the third quarter," said Michael Kramer, president and chief executive officer of First Security. Loans declined by $14.2 million, or 2.4% (9.6% annualized), from June 30, 2012 to Sept. 30, 2012, and $7.3 million, or 1.2% (1.7% annualized) from Dec. 31, 2011, to Sept. 30, 2012, primarily as a result of disposition efforts on non-performing loans. "Since the beginning of the year, we have focused on a dual path of balance sheet cleansing and growth," continued Kramer. "While we are not finished, we are pleased with our progress to date. Annualized growth in pass-rated loans of eight percent is a positive sign of the economic stability within our markets, but the decline of over 40% in impaired loans since year-end demonstrates the focus of our management team to exit nonperforming loans on an aggressive timeline." A copy of the press release is available for free at: http://is.gd/PtteoQ Delays Form 10-Q The Company is in the process of preparing its consolidated financial statements as of Sept. 30, 2012, and for the three and nine months then ended. The process of compiling and disseminating the information required to be included in its Form 10-Q quarterly report was not completed by Nov. 14, 2012. The Company undertakes the responsibility to file that quarterly report no later than five calendar days after its original due date. About First Security Group First Security Group, Inc., is a bank holding company headquartered in Chattanooga, Tennessee, with $1.2 billion in assets as of Sept. 30, 2010. Founded in 1999, First Security's community bank subsidiary, FSGBank, N.A., has 37 full- service banking offices, including the headquarters, along the interstate corridors of eastern and middle Tennessee and northern Georgia and 325 full-time equivalent employees. In Dalton, Georgia, FSGBank operates under the name of Dalton Whitfield Bank; along the Interstate 40 corridor in Tennessee, FSGBank operates under the name of Jackson Bank & Trust. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Joseph Decosimo and Company, PLLC, in Chattanooga, Tennessee, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has recently incurred substantial losses. The Company is also operating under formal supervisory agreements with the Federal Reserve Bank of Atlanta and the Office of the Comptroller of the Currency and is not in compliance with all provisions of the Agreements. Failure to achieve all of the Agreements' requirements may lead to additional regulatory actions. The Company reported a net loss of $23.06 million in 2011, a net loss of $44.34 million in 2010, and a net loss of $33.45 million in 2009. First Security's balance sheet at June 30, 2012, showed $1.11 billion in total assets, $1.05 billion in total liabilities and $53.99 million in total stockholders' equity. FOREVERGREEN WORLDWIDE: Delays Form 10-Q for Sept. 30 Quarter ------------------------------------------------------------- ForeverGreen Worldwide Corp. was unable, without unreasonable effort and expense, to file the Form 10-Q for the period ended Sept. 30, 2012, within the prescribed time period due to its difficulty in obtaining and completing the financial and other information required for that report. About ForeverGreen Worldwide Orem, Utah-based ForeverGreen Worldwide Corporation is a holding company that operates through its wholly owned subsidiary, ForeverGreen International, LLC. The Company's product philosophy is to develop, manufacture and market the best of science and nature through innovative formulations as it produces and manufactures a wide array of whole foods, nutritional supplements, personal care products and essential oils. Sadler, Gibb & Associates, LLC, in Salt Lake City, Utah, expressed substantial doubt about ForeverGreen'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 accumulated net losses of $34,573,495 and has had negative cash flows from operating activities during the year ended Dec. 31, 2011. of $909,844. The Company's balance sheet at June 30, 2012, showed $2.1 million in total assets, $5.8 million in total liabilities, and a stockholders' deficit of $3.7 million. "The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The Company has incurred operating losses during the six months ended June 30, 2012, of $165,663 and has an accumulated net loss totaling $34,739,158. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations." FTLL ROBOVAULT: BBX Unit Wants Trustee Named or Case Converted -------------------------------------------------------------- Paul Brinkmann at South Florida Business Journal reports that Florida Asset Resolution Group, subsidiary of BBX Capital and the primary lender in the RoboVault bankruptcy, seeks immediate appointment of a trustee to oversee RoboVault, or conversion of the case to Chapter 7 liquidation. According to the report, the lender said in a motion filed Nov. 16, 2012, that RoboVault "has exhibited complete incompetence and gross mismanagement." The report notes the BBX subsidiary is represented by Michael Budwick of Miami-based law firm Meland Russin & Budwick. The report relates Mr. Budwick said he sent e-mails Nov. 15 to RoboVault's attorney, Larry Wrenn, Esq., asking why Mr. Wrenn hadn't filed details of the company's finances. In particular, Mr. Budwick wanted to know what the company was doing with income it was generating while in bankruptcy. The report notes Mr. Wrenn replied that he would get the information back to Mr. Budwick by the end of the day. However, according to Mr. Budwick's motion, Mr. Wrenn wrote back later, "Once the dentist finishes my root canal I will address your questions. Presently the pain medication is confusing my thoughts and ability to properly respond." The report adds developer Marvin Chaney filed the bankruptcy petitions for RoboVault and Off Broward Storage in downtown Fort Lauderdale on the same day. Both projects got financing from BankAtlantic or its subsidiaries and successors, including BBX and FARG. In March, the bank foreclosed on the Off Broward property. The report says bankruptcy documents show Robo-Vault has assets of $18.6 million and debt of $21.6 million. The bankruptcy petition lists the BankAtlantic loan as $22 million, with $20 million outstanding. Bankruptcy court documents show Off Broward has an outstanding $5 million loan and additional debt totaling $7.2 million, with the building, valued at $6.2 million, as its primary asset. The report relates RoboVault's bankruptcy filing says it had $600,000 in income from tenants so far in 2012, up from $395,000 in 2010, and that it owed Broward County $850,000 in taxes. About FTLL Robovault LLC Based in Fort Lauderdale, Florida, FTLL RoboVault LLC, aka Robo Vault, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 12-33090) on Sept. 27, 2012. Bankruptcy Judge Raymond B. Ray presides over the case. Lawrence B. Wrenn, Esq., serves as the Debtor's counsel. Developer Marvin Chaney signed Chapter 11 petitions for Robo Vault and affiliate Off Broward Storage. The companies own modern storage warehouses in Fort Lauderdale. The petition scheduled $18,665,069 in assets and $21,528,776 in liabilities. GAP INC: S&P Revises Outlook on 'BB+' CCR to Positive ----------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on San Francisco-based specialty apparel retailer The Gap Inc. (Gap) to positive from stable. "At the same time, we affirmed our ratings, including the 'BB+' corporate credit rating on the company," S&P said. The rating on Gap reflects Standard & Poor's Ratings Services' assessment of the company's "fair" business risk profile and "intermediate" financial risk profile. "Gap's business risk profile reflects our view of Gap's good market position in casual apparel, strong brand name, and geographic diversity," said Standard & Poor's credit analyst Helena Song. "We also believe Gap has demonstrated some improvement in product merchandising and regaining customer traffic in recent quarters, as same-store sales turned positive in the first three quarters of 2012." "Our analysis is tempered by the intensely competitive nature of apparel retailing. We also believe that specialty apparel trends will continue to be difficult to predict, and that Gap will remain vulnerable to changes in fashion. As a result, the company's performance could be uneven because of the timing of consumer buying and changing fashion trends," S&P said. "The outlook is positive. We could raise the ratings if Gap continues its positive operating performance trend, with expanding margins and positive same store sales, including the fourth- quarter holiday season. This performance could warrant a change in our assessment of Gap's business risk profile," S&P said. "We could revise the outlook to stable if the company is unable to maintain positive same store sales and margin expansion in the next several quarters. We could also revise the outlook to stable if the company adopts more aggressive financial policies--for example, if it increases debt by about $1.7 billion to buy back shares," S&P said. GREEN ENERGY: Incurs $306,500 Net Loss in Third Quarter ------------------------------------------------------- Green Energy Management Services Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $306,523 on $55,546 of revenue for the three months ended Sept. 30, 2012, compared with a net loss of $769,682 on $1,653 of revenue for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $1.30 million on $212,657 of revenue, compared with a net loss of $14.26 million on $10,268 of revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $1.34 million in total assets, $4.83 million in total liabilities, all current, and a $3.49 million total stockholders' deficit. Bankruptcy Warning "As of September 30, 2012, we had cash of $13,996 and contract receivables of $32,193. With the funds that we currently have on hand and the potential third party financing to monetize the revenues projected from our agreement with Co-op City, pursuant to which we have received approximately $21,000 per month to date, we believe that we will be able to sustain our current level of operations for approximately the next 12 months. "Risk Factors for the matters for which a negative outcome could result in payments by us of substantial monetary damages, or changes to our products or our business, which may have a material and adverse impact on our business, financial condition or results of operations or force us to file for bankruptcy and/or cease our operations." A copy of the Form 10-Q is available for free at: http://is.gd/yGIss9 About Green Energy Baton Rouge, Louisiana-based Green Energy Management Services Holdings, Inc., is a full service energy management company. GEM provides its clients all forms of energy efficiency solutions mainly based in two functional areas: energy efficient lighting upgrades and efficient water utilization. GEM is currently primarily involved in the distribution of energy efficient light emitting diode ("LED") units (the "Units") to end users who utilize substantial quantities of electricity. GEM is also currently involved in the initial stages of customer installation of its Water Management System. GEM structures its contracts with no upfront or maintenance costs to its customers and shares in the achieved energy, water utilization and maintenance savings. In its audit report for the 2011 results, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about Green Energy Management Services Holdings' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations. The Company reported a net loss of $19.25 million on $116,550 of revenue for 2011, compared with a net loss of $1.91 million on $291,311 of revenue for 2010. HARPER BRUSH: Asset Prices Rises 88% at Auction ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the price for the operating assets of Harper Brush Works Inc., a family owned brush and broom maker, rose by 88 percent at auction this week in U.S. Bankruptcy Court in Des Moines, Iowa. According to the report, the initial bid of $1.84 million came from Q.E.P. Co. from Boca Raton, Florida. There were six bidders, 22 bids and an ultimate high bid of $3.45 million from Q.E.P. for the operating assets. The buyer is a brush maker. Iowa State Bank made a credit bid of $450,000 to purchase the real estate. The bankruptcy judge said at a Nov. 19 hearing that she will sign orders approving the sales. The report recounts that Harper filed to reorganize in late May and has a Chapter 11 plan on file that will distribute sale proceeds in accordance with lien-priority rights and the scheme of distribution laid out in bankruptcy law. Unsecured creditors are told in the disclosure statement that they will receive proceeds from the recovery of preferences, or payments made to creditors within 90 days of bankruptcy. About Harper Brush Works Fairfield, Iowa-based Harper Brush Works, Inc., filed a Chapter 11 petition (Bankr. S.D. Iowa) in Des Moines on May 29, 2012. Family-owned Harper Brush -- http://www.harperbrush.com/-- provides more than 1,000 products, including pushbrooms, mops, floor squeegees, automotive brushes, dust pans, and buckets. The Company disclosed assets of $10.4 million against debt totaling $10 million, including $6 million owing to secured creditors. Judge Anita L. Shodeen presides over the case. Donald F. Neiman, Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., serve as bankruptcy counsel to the Debtor. Equity Partners CRB LLC serves as the Debtor's investment banker. An official committee of unsecured creditors has been appointed in the case. Richard S. Lauter, Esq., and Thomas R. Fawkes, Esq., at Freeborn & Peters LLP, in Chicago, represents the Committee as general bankruptcy counsel. Joseph A. Peiffer, Esq., at Day Rettig Peiffer, P.C., in Cedar Rapids, Iowa, represents the Committee as local counsel. HAWAII OUTDOOR: Naniloa Volcanoes Resort Files Chapter 11 --------------------------------------------------------- Hawaii Outdoor Tours, Incorporated, operator of the Niloa Volcanoes Resort in Hilo, Hawaii, filed a Chapter 11 petition (Bankr. D. Haw. Case No. 12-02279) in Honolulu on Nov. 20. Niloa Volcanoes is a 382-room hotel with a nine-hole golf course. The hotel has 52 employees. Occupancy at the hotel was below 45% in 2012, and is expected to rise to 53% in 2013. The 64-acre property is subject to a 65-year lease, commencing Feb. 1, 2006, and provides for a total ground rent for the first 10 years of $500,000 annually. The Debtor used a $10 million loan from First Regional Bank and $10 million of its own cash to invest in the property. In 2006, after acquiring the leasehold rights for the property, the Debtor commenced renovations required by the state. The Debtor said it spent millions for interior renovation work. Only the renovations for the interior rooms have been completed. Work on the exterior has only been partially initiated. In 2009, Ken Direction Corporation, the parent of the Debtor, failed to provide the Debtor additional financing as it failed to complete a sale of land in Kau. The Debtor said because the source of financing to complete the renovations had dried up, the Debtor was unable to complete the scheduled renovations. First Citizens Bank & Trust Company, which acquired the First Regional note from the Federal Deposit Insurance Corp., commenced foreclosure proceedings in August. First Citizens asserts a claim of $9.95 million. The Debtor believes that the value of the hotel property exceeds the amount of the First-Citizens note. Just the bricks and mortal alone was valued in excess of $35 million by First Regional's appraiser and the insurance company. The Debtor intends to continue operations postpetition. The Debtor anticipates that business currently diverted to other accommodations will be redirected to the hotel upon completion of the renovation plan. The Debtor intends to expand its guest food services, and in December 2012, open a full-time service restaurant. The Debtor is seeking to minimize any disruption to its normal course of operations caused by the bankruptcy proceeding. The Debtor on the Petition Date filed motions to pay prepetition employee benefits, prohibit utilities from discontinuing services, honor prepetition customer deposits, honor travel agency agreements, and use cash collateral. The Debtor also filed an application to employ Wagner Choi & Verbugge as bankruptcy counsel. HOSTESS BRANDS: Gets OK to Wind Down Business, Sell Assets ---------------------------------------------------------- Hostess Brands Inc. disclosed that the U.S. Bankruptcy Court for the Southern District of New York approved its emergency interim motion for the orderly wind down of its business and sale of its assets. Judge Robert Drain approved the motion after the Company and the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) were unable to reach an agreement during an 11th-hour mediation yesterday. Hostess Brands is winding down the Company after a nationwide strike initiated by the BCTGM that commenced on Nov. 9 crippled its operations at a time when the Company lacked the financial resources to survive a significant labor action. Among other provisions, the Court order allows Hostess Brands to return excess ingredients and packaging; provides liquidity through an amended debtor-in-possession financing agreement and consensual use of cash collateral; and authorizes the Company to implement a non-executive employee retention plan to ensure the Company has the necessary personnel to implement the wind down. Hostess Brands said it intends to retain approximately 3,200 employees to assist with the initial phase of the wind down. Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process is expected to be completed in one year. The wind down was necessitated by an inflated cost structure that put the Company at a profound competitive disadvantage. The biggest component of the Company's costs was its collective bargaining agreements that covered 15,000 of 18,500 employees. Hostess Brands worked tirelessly to complete a reorganization of its business as a going concern, including spending the better part of 18 months negotiating with its key constituents to obtain a consensual agreement to lower costs to a sustainable level. The Company had obtained the support of its largest union, the International Brotherhood of Teamsters, and its lenders. However, the BCTGM leadership chose not to negotiate a new labor contract and instead, when presented with a final offer, launched a campaign to cripple the Company's operations and force it to liquidate. The wind down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes, 570 bakery outlet stores and the loss of 18,500 jobs. Prospective bidders for the Company's assets should contact the following representatives: * Brands: Perella Weinberg at hostess@pwpartners.com * Assets: FTI Consulting at hostess@fticonsulting.com For employees whose jobs will be immediately eliminated, additional information can be found at http://www.hostessbrands.info/ * * * Jacqueline Palank and Rachel Feintzeig of Dow Jones Newswires report that Judge Robert D. Drain at Wednesday's hearing also approved up to $4.36 million in retention bonuses for rank-and- file workers who remain at the company during the wind-down. All union and nonunion workers, except for executives and top managers, are eligible for the bonuses. Hostess said its lenders also agreed to allow it to distribute an extra day's pay to its employees, which will total $1 million. Judge Drain has permitted Hostess to proceed with its plan to wind down the business, one day after he presided over a confidential mediation session between the Company and its striking bakers union. As a result, all of Hostess's 18,500 workers will lose their jobs, some immediately and others over the next several months. "This is a tragedy," Hostess attorney Heather Lennox, Esq., at Jones Day, told the court, according to the report. The report relates Ms. Lennox said the Company has received "a flood of inquiries" in recent days. "We therefore think there could be very healthy competition," she said, adding that Hostess may, within the next several weeks, start seeking court approval to take specific assets to the auction block. Judge Drain on Tuesday presided over a confidential mediation session with Hostess and the bakers union. The judge said the parties participated in with good faith. "The fact that they were not able to reach agreement does not indicate anything to the contrary," the judge said, according to the report. "It's a free country, and so people are free not to agree." After the hearing, the report relates, Hostess Chief Executive Gregory Rayburn said he's "disappointed it didn't work, but I certainly was looking at that realistically." Hostess said Wednesday it would return to court at a later date to seek approval of $1.75 million in bonuses for 19 officers and high-level managers. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. HOSTESS BRANDS: Teamsters Opposed BCTGM Strike ---------------------------------------------- The Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) and the Teamsters Union issued statements in connection with Hostess Brands Inc.'s decision to seek liquidation following a decision to strike by the BCTGM and the failure to reach a last minute agreement. "Hostess's announcement that it is liquidating the company is a deep disappointment for all of our Hostess members. While Hostess management wants to blame our members for the demise of the company, the truth is that had it not been for the valiant efforts of our members over the last eight years, including accepting significant wage and benefit concessions after the first bankruptcy, this company would have gone out of business long ago," says BCTGM President Frank Hurt. "Hostess failed because its six management teams over the last eight years were unable to make it a profitable, successful business enterprise. Despite a commitment from the company after the first bankruptcy that the resources derived from the workers' concessions would be plowed back into the company, this never materialized. Management refused to invest in modernizing its bakeries or devote necessary resources to advertising and marketing, product development and new technology. Business plan after business plan failed, leaving the company ever deeper in debt. Mismanagement BCTGM's Hurt in an earlier statement said, "The crisis facing Hostess Brands is the result of nearly a decade of financial and operational mismanagement that resulted in two bankruptcies, mountains of debt, declining sales and lost market share. The Wall Street investors who took over the company after the last bankruptcy attempted to resolve the mess by attacking the company's most valuable asset - its workers. Teamsters General Secretary-Treasurer Ken Hall, in a statement, stated, "Hostess' problems go back almost a decade. The company has clearly been mismanaged for quite some time. However, the workers should not suffer because of poor management and therefore, the Teamsters Union tried everything in its power during the company's most recent financial difficulties to shape an outcome that would put Hostess on strong footing to be viable and preserve jobs. Unfortunately, the company's operating and financial problems were so severe that it required steep concessions from a variety of stakeholders but not all stakeholders were willing to be constructive. Teamster Hostess members, based on the facts and advice from respected restructuring advisors, understood what was at stake and voted to protect all jobs at Hostess." The BCTGM represents more than 80,000 workers in the baking, food processing, grain milling and tobacco industries in the United States and Canada. Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women throughout the United States, Canada and Puerto Rico. Strike BCTGM announced that a total of 24 Hostess production facilities are on strike or honoring the strike with picket lines established by striking Hostess workers at other BCTGM-represented facilities. Additionally, BCTGM members at one transport facility also are on strike. Company claims that union members are crossing picket lines and maintaining production at striking plants are vastly untrue. According to BCTGM, over the past 15 months, Hostess workers have seen the company unilaterally end contractually-obligated payments to their pension plan. These workers, many of whom have worked at Hostess and its predecessor companies for decades, struck in response to the company's unilateral imposition of an unacceptable contract that was rejected by 92 percent of the union's Hostess members in September. BCTGM pointed out that while the company was demanding major concessions from union workers (wage and benefit cuts amounting to 27- 32% overall), the top ten executives of the company rewarded themselves with compensation increases, with one executive receiving a 300 percent increase. The Teamsters Union opposed a strike by the BCTGM. The Teamsters Union disclosed its recommendation to the BCTGM that a vote of its Hostess members by secret ballot should be held to determine if the workers want to continue their strike of the company and force it into liquidation. The Teamsters said it chose to challenge the company's path of a worker-only solution, engage constructively so other constituents would be sacrificing and require management changes and oversight so that the same missteps would not be repeated. The Teamsters said the BCTGM chose a different path, as is their prerogative, to not substantively look for a solution or engage in the process. "The BCTGM leaders are putting Teamster members in a horrible position -- asking them to support a strike that will put them out of a job when they haven't even asked all their members to go on strike," the Teamsters said in a statement. Liquidation Hostess Brands later announced that as a result of the bakery worker's strike, it filed liquidation papers. The company has ceased production in all facilities and its 6,700 Hostess members will finish deliveries of the remaining products. Teamsters said, "The liquidation process will play out in court over the coming months. As we have throughout the bankruptcy we will closely monitor that process to try and ensure that, to the fullest extent possible, Teamster Hostess members are paid what they are owed. Additionally, we will try to shape the process by looking for buyers of individual assets that may want to employ Teamster members with industry experience." Mediation The U.S. Bankruptcy Court for the Southern District of New York suggested that the Debtor enter a confidential mediation on Tuesday with the BCTGM. A Nov. 19 hearing to consider Hostess Brands' motion to wind down the Company and sell all of its assets was adjourned until Nov. 21 to pave way for the mediation. The Teamsters welcomed the mediation, saying, "It is in the best interest of all parties involved that we remember what is at stake - the future of 18,500 workers and their families. This is not only about a brand or a product, it is also about real people that just want to work hard every day to provide for their families." But Hostess Brands later disclosed that a mediation with the BCTGM was unsuccessful. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. On Oct. 11, Hostess Brands and its five subsidiaries filed their Joint Plan of Reorganization and related Disclosure Statement wherein unsecured creditors with more than $2.5 billion in claims will receive nothing. Under the Plan, the Debtors will issue almost $700 million in various levels of new secured debt. Most will pay interest through issuance of more debt. The Debtors will raise $88 million in cash plus enough to pay off the amount outstanding under the $75 million loan financing the reorganization that began in January. The Plan also provides that holders of $80.4 million of first-lien debt will receive as much as $59 million in cash plus new first- lien notes. Holders of $340.7 million in other first-lien debt will also be offered new first-lien debt. In total, there is to be at least $361.8 million in new first-lien debt on the Company's emergence from Chapter 11. For $191.4 million in existing third- lien debt, holders will receive 75% of the new stock and about $172 million in new third-lien notes. The other 25%, plus a $100 million third-lien note, will go to the unions in return for contract concessions. Under the Plan, trade suppliers will receive $5 million in new third-lien debt. Other unsecured creditors receive nothing, although the creditors' committee will retain the right to sue lenders for invalidation of their claims or liens. HOSTESS BRANDS: Wind-Down Spurs Employees' Class Suit ----------------------------------------------------- An employee of Hostess Brands Inc. has filed a lawsuit as a result of the Company's decision to liquidate. According to the lawsuit, as a result of Hostess' decision "to liquidate the company and close down the majority of its operations, more than 15,000 employees were immediately laid off on or about Nov. 21, 2012, or within 30 days thereof." The employee, Mark Popovich, purports to represent a putative class of similarly situated former employees of Hostess Brands and its debtor-affiliates. The lawsuit said Hostess failed to provide 60 days advance written notice of the terminations, in violation of the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Sec. 2101 et seq., and various state plant closing or "baby WARN Acts." The Plaintiff said he is likely to assert state or local WARN Act claims for the states and/or municipalities in which Hostess has a covered Facility and an employment loss occurs, including, but not limited to California, Connecticut, Kansas, Maine, New Jersey, Ohio, and the City of Philadelphia Code. The lawsuit seeks to recover from the Debtors 60 days' wages and benefits pursuant to the WARN Act and various state WARN Acts, and payments owed to them under the Debtors' benefit plans. The lawsuit contends the claims are entitled to first priority administrative expense status pursuant to the United States Bankruptcy Code Sec. 503(b)(1)(A), or alternatively wage priority status pursuant to Bankruptcy Code Sec. 507(a)(4), (5). Mr. Popovich was a Hostess employee and worked as a Loader in the Shipping Department at a Hostess facility located at 8071 Wales Road Northwood, Ohio. Hostess employed approximately 18,500 employees. The case is, Mark Popovich, individually and as Class Representative on behalf of a Putative Class of all others similarly situated, Plaintiffs, v. Hostess Brands, Inc., IBC Sales Corporation, IBC Services, LLC, IBC Trucking, LLC, Interstate Brands Corporation, and MCF Legacy, Inc., Adv. Proc. No. 12-_____ (Bankr. S.D.N.Y.). The Plaintiff and the putative class are represented by: Jeffrey D. Kurtzman, Esq. Charles A. Ercole, Esq. Lee D. Moylan, Esq. Kathryn Evans Perkins, Esq. KLEHR HARRISON HARVEY BRANZBURG LLP 1835 Market Street, Suite 1400 Philadelphia, PA 19103 Telephone: (215) 569-2700 - and - Matt Ray, Esq. Dan Winikka, Esq. SIMON, RAY & WINIKKA, LLP 2525 McKinnon St., Suite 540 Dallas, TX 75201 HOSTESS BRANDS: Klehr Harrison Probing WARN Act Violations ---------------------------------------------------------- Hostess Brands is seeking Bankruptcy Court approval to sell its assets and immediately shut down operations on November 20, potentially resulting in a job loss to 18,500 employees. The Worker Adjustment and Retraining Notification Act (WARN Act) requires employers to give 60 days notice to employees if more than 50 employees are laid off at any one location. Failure to give the 60 days notice entitles employees to damages equal to the wages and benefits that would have been earned during the 60 day notice period. The WARN Act has an exception for layoffs resulting from a strike or lockout. However, that exemption may not apply to Hostess's decision, said Charles A. Ercole, an attorney who specializes in WARN Act cases and is a partner at Klehr Harrison Harvey Branzburg LLP in Philadelphia, Pennsylvania. "The Churchill case held that a three day strike permitted the employer to avoid WARN Act liability when it subsequently shut down the company without giving notice. Many people think Churchill was wrongly decided and would not be followed by other courts. For example, in the USF Red Star case, we successfully argued that the WARN Act exemption does not allow an employer to avoid WARN Act liability merely because it chooses to shut down the plant without giving notice because there was a job action." In USF Red Star, the employer immediately shut down the company after a one day strike and laid off 2000 employees without giving 60 days notice. The company eventually settled the WARN Act claims for $7 million. Mr. Ercole says that his firm is continuing to monitor and investigate the Hostess situation for WARN Act and other labor law violations. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. On Oct. 11, Hostess Brands and its five subsidiaries filed their Joint Plan of Reorganization and related Disclosure Statement wherein unsecured creditors with more than $2.5 billion in claims will receive nothing. Under the Plan, the Debtors will issue almost $700 million in various levels of new secured debt. Most will pay interest through issuance of more debt. The Debtors will raise $88 million in cash plus enough to pay off the amount outstanding under the $75 million loan financing the reorganization that began in January. The Plan also provides that holders of $80.4 million of first-lien debt will receive as much as $59 million in cash plus new first- lien notes. Holders of $340.7 million in other first-lien debt will also be offered new first-lien debt. In total, there is to be at least $361.8 million in new first-lien debt on the Company's emergence from Chapter 11. For $191.4 million in existing third- lien debt, holders will receive 75% of the new stock and about $172 million in new third-lien notes. The other 25%, plus a $100 million third-lien note, will go to the unions in return for contract concessions. Under the Plan, trade suppliers will receive $5 million in new third-lien debt. Other unsecured creditors receive nothing, although the creditors' committee will retain the right to sue lenders for invalidation of their claims or liens. HOSTESS BRANDS: eRaise.com Aims to Raise $500MM to Save Hostess --------------------------------------------------------------- As Hostess Brands, the makers of Twinkie and other snack foods, headed to bankruptcy court to begin liquidation plans, a group of southeast Michigan entrepreneurs are proposing to put the power to the people to save this 82-year-old iconic company, and perhaps, some of those 18,000 jobs. Watch out Wall Street, here comes CrowdFunding. eRaise was founded in 2012 when Steve Schafer, a successful entrepreneur, partnered with Brilliant Chemistry, a creative technology and ideation studio. eRaise, the CrowdFunding platform and engine behind the DoughforHostess.com campaign, will sound the battle cry for generations of Twinkie lovers to help the cream- filled sponge cake live on. CrowdFunding is collective fundraising by a large group of people, who can either donate capital or receive equity stakes in a business. Equity-based CrowdFunding received overwhelming bi- partisan support in the House and Senate earlier this year, culminating with President Obama signing the JOBS Act into law on April 5, 2012. "Not only does Hostess represent an iconic American brand and countless childhood memories," said eRaise CEO Spencer Clark, "but it's also a metaphor for the current state of America, and the struggle many businesses face today balancing payrolls with profits. That is why we are launching Dough for Hostess. It allows anyone to pledge a little dough to help save Hostess. A year ago, CrowdFunding had limited applications, and little awareness of it's potential. When Hostess announced it's pending liquidation, the founders of eRaise jumped at the opportunity to show the power of CrowdFunding to help save a great American brand. By visiting DoughforHostess.com individuals can make a financial pledge, starting at $25. eRaise hopes to raise $500 million dollars in pledges, and is currently exploring the best options to help save Hostess. "Your pledge will provide the opportunity to take part in the single largest CrowdFunding campaign in history, said Clark. "We're secretly rooting for Twinkie, but we'll leave it up to America and the power of the crowd to decide." The U.S. Securities and Exchange Commission is currently working on specific rules and guidelines for equity CrowdFunding, while also ensuring the protection of investors. Once equity based CrowdFunding receives final SEC approval in 2013, it will allow entrepreneurs to raise capital by selling shares in private companies to the general public. eRaise.com -- http://spencer@eraise.com/-- is the first CrowdFunding Marketplace, providing an online and mobile CrowdFunding platform to unite elements of CrowdFunding with critical services and tools for entrepreneurs, businesses, and investors. eRaise founder's have deep experience in building start-ups into successful businesses, and know that to achieve success entrepreneurs, small businesses, and investors need a combination of critical factors in order to succeed in today's uncertain economic environment. These factors include access to online educational resources, risk management and investor fraud prevention, direct access and advice from professional service provides, as well as access to multiple sources of capital. eRaise is currently going through final tests in Closed Beta, and is scheduled to launch in early 2013. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. HYPERTENSION DIAGNOSTICS: Incurs $729K Net Loss in Sept. 30 Qtr. ---------------------------------------------------------------- Hypertension Diagnostics, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $729,837 on $34,622 of total revenues for the three months ended Sept. 30, 2012, compared with a net loss of $1.01 million on $1,200 of total revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $1.11 million in total assets, $2.02 million in total liabilities and a $909,741 total shareholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/ON5RX6 About Hypertension Diagnostics Minnetonka, Minnesota-based Hypertension Diagnostics, Inc., was incorporated under the laws of the State of Minnesota on July 19, 1988. The Company was previously engaged in the medical device business. In mid-2011, HDI's board of directors determined to pursue a change in strategic direction. In August 2011, it sold its medical device inventory, subleased its office and manufacturing facility, and entered into a limited license agreement with a company owned by Jay Cohn, a founder and a director of the Company. In September 2011, the Company formed HDI Plastics Inc., a wholly owned-subsidiary, entered into a new lease agreement, purchased selected manufacturing assets from Compass Bank and Cycled Plastics and began engaging in the business of plastics reprocessing in Austin, Tex. The Company reported a net loss of $1.3 million on $3.2 million of revenues in fiscal 2012, compared with net income of $406,312 on $nil revenue in fiscal 2011. Moquist Thorvilson Kaufmann & Pieper LLC, in Edina, Minnesota, expressed substantial doubt about Hypertension's ability to continue as a going concern following the financial results for the fiscal year ended June 30, 2012. The independent auditors noted that the Company had net losses for the years ended June 30, 2012, and 2011, and has a stockholders' deficit at June 30, 2012. HCSB FINANCIAL: Delays Q3 Form 10-Q for Regulatory Matters ---------------------------------------------------------- HCSB Financial Corporation was not able to file timely its quarterly report on Form 10-Q for the period ended Sept. 30, 2012, by the prescribed due date without unreasonable effort and expense because the Company's unaudited consolidated financial statements for the quarter ended Sept. 30, 2012, have not been finalized. The delay in completing the financial statements is primarily attributable to the timing of an examination of the Company's wholly-owned banking subsidiary, Horry County State Bank, by its primary federal regulator, the Federal Deposit Insurance Corporation. In particular, due to the continued deterioration in the Bank's loan portfolio stemming from the continued downturn in the local real estate market, the Company has been working with the FDIC to determine the appropriateness of the Bank's loan loss reserve. The Company is currently reevaluating the calculation of the allowance for loan losses for the period ended Sept. 30, 2012, based on discussions with the FDIC during their examination. At this time, the Company currently anticipates recording a loan loss provision of approximately $2-$3.7 million, resulting in a net loss of approximately $3.1-$4.2 million. However, based on the Company's continued analysis, this provision could be materially higher when reported, and thus our actual results for the period ended Sept. 30, 2012, may materially differ from the Company's current estimates. As a result of this reevaluation, the Company is still finalizing its unaudited consolidated financial statements and related disclosures for the quarter ended Sept. 30, 2012. About HCSB Financial Loris, South Carolina-based HCSB Financial Corporation was incorporated on June 10, 1999, to become a holding company for Horry County State Bank. The Bank is a state chartered bank which commenced operations on Jan. 4, 1988. From its 13 branch locations, the Bank offers a full range of deposit services, including checking accounts, savings accounts, certificates of deposit, money market accounts, and IRAs, as well as a broad range of non-deposit investment services. During the third quarter of 2011, the Bank closed its Covenant Towers branch located at Myrtle Beach. All deposits were transferred to the Bank's Myrtle Beach branch and the Bank does not expect any disruption of service in that market for its customers. HCSB reported a net loss of $29.01 million in 2011, compared with a net loss of $17.27 million in 2010. The Company's balance sheet at June 30, 2012, showed $531.02 million in total assets, $535.59 million in total liabilities and a $4.57 million total shareholders' deficit. "We note that there are no assurances that we will be able to raise this capital on a timely basis or at all," the Company said in its quarterly report for the period ended June 30, 2012. "If we continue to fail to meet the capital requirements in the Consent Order in a timely manner, then this would result in additional regulatory actions, which could ultimately lead to the Bank being taken into receivership by the FDIC. Our auditors have noted that the uncertainty of our ability to obtain sufficient capital raises substantial doubt about our ability to continue as a going concern." IMEDICOR INC: Delays Form 10-Q for Sept. 30 Quarter --------------------------------------------------- iMedicor, Inc., notified the U.S. Securities and Exchange Commission that it will be delayed in filing its quarterly report on Form 10-Q for the period ended Sept. 30, 2012. The external auditors have not had time to properly review the financial information of the Company prior to the filing deadline. The Form 10-Q will be filed as soon as practicable and within the five day extension period. About iMedicor Inc. Nanuet, N.Y.-based iMedicor, Inc., formerly Vemics, Inc., builds portal-based, virtual work and learning environments in healthcare and related industries. The Company's focus is twofold: iMedicor, the Company's web-based portal which allows Physicians and other healthcare providers to exchange patient specific healthcare information via the internet while maintaining compliance with all Health Insurance Portability and Accountability Act of 1996 ("HIPAA") regulations, and; recently acquired ClearLobby technology, the Company's web-based portal adjunct which provides for direct communications between pharmaceutical companies and physicians for the dissemination of information on new drugs without the costs related to direct sales forces. The Company's solutions allow physicians to use the internet in ways previously unavailable to them due to HIPAA restrictions to quickly and cost- effectively exchange and share patient medical information and to interact with pharmaceutical companies and review information on new drugs offered by these companies at a time of their choosing. Demetrius & Company, L.L.C., expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 financial results. The independent auditors noted that the Company has experienced significant losses resulting in a working capital deficiency and shareholders' deficit. The Company had a net loss of $5.20 million for the year ended June 30, 2011, following an $11.40 million net loss in the preceding year. The Company's balance sheet at March 31, 2012, showed $1.81 million in total assets, $6.12 million in total liabilities and a $4.31 million total stockholders' deficiency. INFUSION BRANDS: Incurs $1 Million Net Loss in Third Quarter ------------------------------------------------------------ Infusion Brands International, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.03 million on $3 million of product sales for the three months ended Sept. 30, 2012, compared with a net loss of $2.25 million on $2.19 million of product sales for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $4.51 million on $7.85 million of product sales, compared with a net loss of $5.37 million on $11.56 million of product sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $8.28 million in total assets, $11.87 million in total liabilities, $37.88 million in redeemable preferred stock, and a $41.47 million total shareholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/kWhgBa About Infusion Brands Infusion Brands International, Inc. is a global consumer products company. Its wholly owned operating subsidiary, Infusion Brands, Inc. specializes in building and marketing profitable brands through international direct-to-consumer channels of distribution. On Dec. 16, 2010, as part of its quasi-reorganization in order to change its business model from that of an acquisition strategy to a singular operating model as a consumer products company which builds and markets brands internationally through direct-to- consumers channels of distribution, OmniReliant Holdings, Inc. entered into an agreement and plan of merger with Infusion Brands International, Inc., a Nevada corporation and the Company's wholly-owned subsidiary. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, the Company merged with and into Infusion Brands International, Inc., solely to effect a name change of the Company. Meeks International LLC, in Tampa, Florida, expressed substantial doubt about the Company's ability to continue as a going concern following the financial results for the year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred significant recurring losses from operations and is dependent on outside sources of financing for continuation of its operations and management is restructuring and redirecting its operating initiatives that require the use of its available capital resources. The Company reported a net loss of $6.94 million on $17.94 million of product sales in 2011, compared with a net loss of $16.07 million on $7.17 million of product sales in 2010. INTELLICELL BIOSCIENCES: Delays Q3 Form 10-Q Due to Hurricane ------------------------------------------------------------- Intellicell Biosciences, Inc., said the compilation, dissemination and review of the information required to be presented in the quarterly report on Form 10-Q for the period ended Sept. 30, 2012, has imposed time constraints that have rendered timely filing of the Quarterly Report on Form 10-Q impracticable without undue hardship and expense to the Company and the Company's normal process for compilation and review of its financial statements was delayed due to the effects of Hurricane Sandy. The Company undertakes the responsibility to file that report within the applicable extension period. About Intellicell Biosciences Intellicell BioSciences, Inc., headquartered in New York, N.Y., was formed on Aug. 13, 2010, under the name "Regen Biosciences, Inc." as a pioneering regenerative medicine company to develop and commercialize regenerative medical technologies in large markets with unmet clinical needs. On Feb. 17, 2011, the company changed its name from "Regen Biosciences, Inc." to "IntelliCell BioSciences Inc". To date, IntelliCell has developed proprietary technologies that allow for the efficient and reproducible separation of stromal vascular fraction (branded "IntelliCell(TM)") containing adipose stem cells that can be performed in tissue processing centers and in doctors' offices. The Company has incurred losses since inception resulting in an accumulated deficit of $43,079,590 and a working capital deficit of $3,811,024 as of March 31, 2012, respectively. However, if the non-cash expense related to the Company's change in fair value of derivative liability and stock based compensation is excluded then the accumulated deficit amounted to $4,121,538. Further losses are anticipated in the continued development of its business, raising substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at June 30, 2012, showed $3.76 million in total assets, $6.97 million in total liabilities and a $3.20 million in total stockholders' deficit. JC PENNEY: Moody's Cuts CFR/PDR to 'B3'; Outlook Negative --------------------------------------------------------- Moody's Investors Service downgraded J.C. Penney Company, Inc.'s ("JCP") long term ratings, including its Corporate Family Rating and Probability of Default Rating to B3. At the same time, Moody's also downgraded J.C. Penney's Speculative Grade Liquidity rating to SGL-3 which represents adequate liquidity. The rating outlook is negative. The following ratings are downgraded For J.C. Penney Company, Inc. Corporate Family Rating to B3 from Ba3 Probability of Default Rating to B3 from Ba3 Speculative Grade Liquidity rating to SGL-3 from SGL-1 For J.C. Penney Corporation, Inc. Senior unsecured notes to Caa1 (LGD 4, 66%) from Ba3 (LGD 4, 59%) Senior unsecured shelf to (P) Caa1 from (P) Ba3 Ratings Rationale The downgrade of the Corporate Family Rating and Probability of Default rating reflects Moody's expectation that JCP's fourth quarter gross margins will severely decline as a result of the need to actively clear excess inventory. This, when combined with continued sizable sale declines in the fourth quarter, will lead to earnings and credit metrics bottoming out at levels significantly weaker than expected. Thus, Moody's no longer believes that credit metrics will return to being supportive of a Ba3 rating over the next twelve months. Moody's currently estimates that JCP's credit metrics will fall to levels indicative of a Ca rating for fiscal year 2012. The downgrade of the Speculative Grade Liquidity to SGL-3 from SGL-1 reflects Moody's estimate of increased cash burn over prior estimates and Moody's belief that JCP will need to draw down its cash balances in 2013 to finance the capital required for the new shops. This will require JCP to temporarily use its revolving credit facility over the next twelve months to fund capital expenditures and interim working capital needs. JCP recently announced third quarter results which were significantly worse than Moody's expectations of a -20% decline. JCP's third quarter sales results indicated an acceleration in the pace of decline to a -26.1% comparable store sales decline compared to -21.7% in the second quarter. In addition, EBIT also declined significantly in the second quarter to $(268) million compared to $120 million last year. The B3 rating reflects JCP's very poor credit metrics, significant level of operating losses, and projected level of free cash flow burn. It also reflects that sales will contract further resulting in additional erosion in earnings and credit metrics by the end of 2012. The rating is supported by JCP's adequate liquidity from its $525 million in cash at October 27, 2012 and a $1.5 billion undrawn asset based revolving credit facility expiring July 2016. It also reflects that JCP's nearest debt maturity is not until 2015 when its $200 million 6.875% medium term notes mature. JCP's adequate liquidity and lack of near dated debt maturities provide it with the flexibility to develop a strategy to abate the sizable declines in both sales and gross margins while rolling out its new shops concept. Moody's also believes that JCP's unencumbered assets provide it with additional financial flexibility. Moody's continues to believe that the new shops are compelling and the sales per square foot generated during the third quarter provide a hopeful data point. However, the new shops only comprise about 11% of JCP selling space and it will take JCP another year to bring the new shops up to 40% of its selling space. In addition, it is currently unclear how JCP will bring back customer traffic and drive sales in the "heritage" JCP square footage. The B3 rating balances the near term significant weakness in JCP's profitability and credit metrics against a longer term view that ultimately its shops concept and revitalized merchandise will drive higher gross margins increasing profitability such that credit metrics will improve back to levels supportive of a B3 level. Moody's notes that JCP debt to EBITDA at October 27, 2012 was 8.0 times and EBITA to interest expense was 0.0 times, both levels are more indicative of a Ca rating. Moody's anticipates that credit metrics will erode further from these levels but that the erosion will be temporary. The negative outlook indicates Moody's concern that JCP earnings and free cash flow may decline further than currently anticipated. The negative outlook also reflects the risk that JCP could increase its reliance on its revolving credit facilities. Ratings could be downgraded should the rate of JCP's sales decline accelerate above the third quarter rate in the fourth quarter of 2012. Ratings could also be downgraded should the sales decline not abate once JCP anniversaries the launch of its new pricing strategy in the first quarter of 2013 or should gross margins not begin to recover in the first quarter of 2013. Quantitatively ratings could be downgraded should it become likely that debt to EBITDA will remain sustained above 8.0 times over the longer term. Given the negative outlook, it is unlikely that ratings will be upgraded over the near term. However, ratings could be upgraded should operating performance improve such that sales begin to grow while achieving a 36% gross margin and debt to EBITDA is likely to remain sustained below 7.0 times. The rating outlook could return to stable should JCP's sales and gross margins stabilize. The principal methodology used in rating J.C. Penney Company, Inc was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. J.C. Penney Company, Inc. is a department store operator with about 1,100 locations in the United States and Puerto Rico. It also operates a website, www.jcp.com. Revenues are about $14 billion. JOSEPH YERUSHALMI: Ch.7 Trustee Can't Pursue Alter Ego Claim ------------------------------------------------------------ Marc A. Pergament, the Chapter 7 Trustee of Trustee of the Estate of Joseph Yerushalmi, sued the Debtor's ex-wife, Malka Yerushalmi, and Joseph and Malka, in their capacities as Trustees for September 7, 1995 Qualified Personal Residence Trust, arguing that a qualified personal residence trust established by the Debtor to hold real property in Great Neck, New York, is by law the alter ego of the Debtor and consequently the property held by the trust is property of the estate which must be turned over for the benefit of all creditors of the estate. The Defendants argue, in part, that judgment should be entered in their favor in that the chapter 7 trustee lacks standing to bring the alter ego claim because as a matter of law that claim belongs to creditors not to the Debtor and its estate. Bankruptcy Judge Robert E. Grossman ruled that, as a matter of law, a chapter 7 trustee is the only person with standing to pursue alter ego claims on behalf of a bankruptcy estate pursuant to section 541 of the Bankruptcy Code, as long as the claim could have been asserted by the debtor pre-petition and the claim involves a generalized injury which is not particular to one creditor. In the Yerushalmi case, the Court noted that the Debtor could have asserted the alter ego claim pre-petition against the trust, and the claim, if asserted by a creditor, did not involve an injury which was specific to any particular creditor. The Court also held that because the claim is asserted under section 541 and as such is an action to recover property of the estate, it is not subject to the statute of limitations applicable to fraud actions. However, on the merits, the Court found that the Trustee has failed to satisfy his burden to prove that the Debtor exercised the requisite dominion and control over the trust necessary to sustain an alter ego finding; nor has he proven the fraud or wrongdoing necessary to support the piercing claim. The case is MARC A. PERGAMENT, Chapter 7 Trustee of Trustee of the Estate of JOSEPH YERUSHALMI, Plaintiff, v. MALKA YERUSHALMI, JOSEPH YERUSHALMI and MALKA YERUSHALMI as Trustees for September 7, 1995 Qualified Personal Residence Trust, Defendants, Adv. Proc. No. 809-8003 (Bankr. E.D.N.Y.). A copy of the Court's Nov. 19, 2012 Memorandum Decision is available at http://is.gd/mr2VVffrom Leagle.com. Joseph was a named partner at the law firm Yerushalmi, Shiboleth, Yisraeli and Roberts, LLP. The partnership dissolved sometime in 1995, and in April 1997 the Debtor started practicing law under the name Yerushalmi & Associates, LLP. In April 2002, Malka commenced a divorce action. Despite their estrangement, the Debtor and Malka continued to reside at the Great Neck Residence. On July 25, 2007, Joseph filed separate chapter 11 bankruptcy petitions for himself and his law firm, Y&A (Bankr. E.D.N.Y. Case Nos. 07-72816 and 07-72817). Both his individual case and the Y&A case were converted to chapter 7 on Oct. 2, 2007. Marc A. Pergament was appointed chapter 7 trustee of the Debtor's individual case. KNIGHT CAPITAL: GETOCO Owns 23.8% of Class A Common Shares ---------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, GETCO Holding Company, LLC, and GETCO Strategic Investments, LLC, disclosed that, as of Nov. 15, 2012, they beneficially own 56,875,362 shares of Class A Common Stock Knight Capital Group, Inc., representing 23.8% of the shares outstanding. The reporting persons previously reported beneficial ownership of 58,334,429 Class A shares as of Aug. 6, 2012. A copy of the amended filing is available at http://is.gd/DBOxGk About Knight Capital Knight Capital Group (NYSE Euronext: KCG) -- http://www.knight.com/-- is a global financial services firm that provides access to the capital markets across multiple asset classes to a broad network of clients, including broker-dealers, institutions and corporations. Knight is headquartered in Jersey City, N.J. with a global presence across the Americas, Europe, and the Asia Pacific regions. At the start of trading on Aug. 1, Knight Capital installed a trading software to push itself onto a new trading platform that the New York Stock Exchange opened that day. But when Knight's new system went live, the firm "experienced a human error and/or a technology malfunction related to its installation of trading software." The error caused Knight to place unauthorized offers to buy and sell shares of big American companies, driving up the volume of trading and causing a stir among traders and exchanges. The orders affected the shares of 148 companies, including Ford Motor, RadioShack and American Airlines, sending the markets into upheaval. Knight had to sell the stocks that it accidentally bought, prompting a $440 million pre-tax loss, the firm announced Aug. 2. Knight Capital averted collapse after announcing Aug. 6 that it has arranged $400 million in equity financing with Wall Street firms including Jefferies Group, Inc., which conceived and structured the investment, as well as Blackstone, GETCO LLC, Stephens, Stifel Financial Corp. and TD Ameritrade Holding Corporation. Knight has said that the software that led to the Aug. 1 trading issue has been removed from the company's systems. The New York Stock Exchange nonetheless said Aug. 7 said it "temporarily" reassigned the firm's market-making responsibilities for more than 600 securities to Getco, the high-speed trading firm that also invested in Knight. "This event severely impacted the Company's capital base and business operations, and the Company experienced reduced order flow, liquidity pressures and harm to customer and counterparty confidence," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, there was substantial doubt about the Company's ability to continue as a going concern." Following the event of Aug. 1, 2012, the Company has begun an internal review into such event and associated controls. Knight Capital's balance sheet at Sept. 30, 2012, showed $8.58 billion in total assets, $7.10 billion in total liabilities, $259.27 million in convertible preferred stock, and $1.21 billion in total equity. LIBERATOR INC: Posts $6,400 Net Income in Sept. 30 Quarter ---------------------------------------------------------- Liberator, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $6,479 on $3.21 million of net sales for the three months ended Sept. 30, 2012, compared with a net loss of $172,944 on $2.95 million of net sales for the same period during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $3.20 million in total assets, $4.50 million in total liabilities and a $1.30 million in total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/jKy9xS Atlanta, Georgia-based Liberator is a vertically integrated manufacturer that designs, develops and markets products and accessories that enhance intimacy. Liberator is also a nationally recognized brand trademark, brand category and a patented line of products commonly referred to as sexual positioning shapes and sex furniture. The Company reported a net loss of $782,417 fiscal 2012, compared with a net loss of $801,252 in fiscal 2011. Webb & Company, P.A., in Boynton Beach, Fla., expressed substantial doubt about Liberator's ability to continue as a going concern following the fiscal 2012 financial results. The independent auditors noted that the Company has a net loss of $782,417, a working capital deficiency of $1.6 million, an accumulated deficit of $7.8 million, and negative cash flow from continuing operations of $464,800. LLS AMERICA: Court Won't Dismiss Clawback Suits v. 50+ Defendants ----------------------------------------------------------------- Bankruptcy Judge Patricia C. Williams issued several orders dated Nov. 16, denying requests to dismiss adversary proceedings, among hundreds commenced by Bruce P. Kriegman, the Chapter 11 trustee of the LLS America, LLC bankruptcy estate. The lawsuits, filed pursuant to 11 U.S.C. Sec. 548 and other causes of action, seek to recover money paid by the debtor to certain lenders or investors as part of an alleged Ponzi scheme conducted by the debtor. The defendants, who sought dismissal of the adversary proceedings, are: Amount Amount Loaned Received Claim Defendant or Invested From Debtor Amount --------- ----------- ----------- ------ Amanda and Joel Omand C$110,000 C$149,539 $170,500 Robert and Joanne Omand C$629,006 C$1,22,897 $824,999 Cheryl Clarke C$120,000 C$127,006 $169,230 Jordan Baker C$60,000 C$160,069 $112,470 Jayden Pakosh C$86,500 C$159,666 $150,000 Ian and Bonnie Palmer C$110,000 C$256,801 $198,238 Alexander Geissler C$130,000 C$274,426 C$236,416 Arket Contractors, Ltd. C$190,000 C$274,144 $190,000 Dean and Radine Johnson C$150,000 C$280,812 $246,800 Senno Rist C$190,000 C$286,548 $264,035 Tirtho Ark C$80,000 C$398,425 C$80,000 $62,213 $25,000 David and Shelly C$245,000 C$495,442 $557,153 Armstrong Donald and Diane Baker C$205,000 C$729,662 $582,670 Tyler Foerstner C$96,000 C$643,569 $249,741 Breck Foerstner C$245,000 C$721,497 $730,252 1140966 Alberta Ltd. C$1,585,000 $192,680 $3,291,761 C$4,010,237 692323 Capital, Inc. $30,113 $64,000 $155,000 BBI Group Investments C$32,500 C$94,926 $63,000 Dave and Bev Coello C$60,000 C$66,846 $84,000 Harrison Bay Dairy Farm C$50,000 C$81,249 $93,750 Doug and Barbara James $15,000 $78,976 $30,000 C$90,067 C$23,000 Iris MacDonald C$60,000 C$64,284 $85,050 Elaine Nichols $20,000 $58,671 $54,600 Gary and Erin Padgham C$24,000 $55,366 $67,526 Gary and Iris Padgham C$30,000 C$76,000 $87,728 Thomas and Glenda Popowich C$75,000 C$80,372 $99,665 Mike and Marcelle Power C$80,000 C$97,594 $141,111 Kathy Roberts C$40,000 C$90,166 $40,000 Jackson Saunders [C$______] C$61,000 $34,983 Martha Schultz C$25,000 C$49,700 $36,000 Ron and Lois Taylor [C$______] C$68,041 $30,000 Stan and Diane Tymkow C$50,000 C$53,230 $70,000 Theodore and C$192,000 C$339,873 C$128,917 Betty Schultz $5,000 $95,333 $38,524 Luke Saunders [C$______] C$29,700 $28,899 Kirkwood Kitchens, Inc. [C$______] C$37,500 $50,115 Reinhard Paul C$10,000 C$28,037 $23,000 Elizabeth Weinberger-Van Dyk C$40,000 C$28,635 $73,051 Nicole Haer C$25,000 C$60,985 C$25,000 Amy Belling [C$______] C$38,500 $5,631 Chantelle Clarke C$30,000 C$35,429 $28,239 Rhonda Harris [C$______] C$38,138 $2,400 Daljit Haer C$50,000 C$117,616 $50,000 Richard and Pearl Needham C$120,000 C$128,015 C$176,429 Amar Bains C$60,000 C$178,030 $42,500 Lawrence MacDonald C$30,000 C$22,090 $38,534 Gary and Mikki Padgham [C$______] C$24,000 $30,482 Anna Saunders [C$______] C$23,000 $36,673 Colleen, Peter Andrew and Aiden Saunders C$30,000 C$59,813 $26,632 $34,983 James Baker C$20,000 C$23,000 $34,645 Dougal Shewan $3,000 $16,430 $4,434 Fritz Bretzke C$15,000 C$20,739 $39,725 Jason McDonald C$15,000 C$19,673 $24,220 John McDonald C$35,000 C$16,052 $______ A copy of one of the Court's Nov. 16, 2012 Memorandum Decision issued in the case is BRUCE P. KRIEGMAN, solely in his capacity as court-appointed Chapter 11 Trustee for LLS America, LLC, Plaintiff, v. DEAN JOHNSON and RADINE JOHNSON, Defendants, Adv. Proc. No. 11-80134-PCW (Bankr. E.D. Wash.), is available at http://is.gd/HCOrT0from Leagle.com. About Little Loan Shoppe LLS America LLC, doing business as Little Loan Shoppe, operated an online payday loan business. Affiliate Team Spirit America provided the manpower, management and equipment for Little Loan Shoppe. The companies are among a multitude of Canadian and American business entities owned and operated by Doris E. Nelson, a/k/a Dee Nelson, a/k/a Dee Foster. Investors claimed Ms. Nelson operated a Ponzi scheme. Ms. Nelson allegedly told investors they could earn as much as 60% on money her companies used to make payday loans to consumers. American and Canadian investors bought notes worth US$29 million and another C$26,000,000. However, the investors received no payments after March 2009. One investor group placed a related company, LLS-A LLC, into bankruptcy in July 10, 2009. LLS America LLC filed for bankruptcy (Bankr. D. Nev. Case No. 09-23021) on July 21, 2009, before Judge Linda B. Riegle. Gregory E. Garman, Esq., at Gordon Silver, served as the Debtor's counsel. In its petition, the Debtor listed $2,661,584 in assets and $24,013,837 in debts. The petition was signed by Ralph Gamble, CEO of the Company. The case was subsequently moved to Washington state (Bankr. E.D. Wash. Case No. 09-06194). Charles Hall was appointed as examiner in the case. MAMMOTH LAKES, CA: Municipal Bankruptcy Dismissed ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports the city of Mammoth Lakes is one California town no longer in bankruptcy. The Chapter 9 municipal bankruptcy was dismissed on Nov. 16. According to the report, the city negotiated a settlement in August with the developer whose $43 million judgment forced the resort town into filing for municipal bankruptcy in July. The bankruptcy was dismissed after the judgment was modified by the state court to comport with the settlement resulting from court- ordered mediation. The report relates that developer Mammoth Lakes Land Acquisition LLC won a breach of contract suit related to a development project at the airport. The California Supreme Court refused to hear an appeal. About Mammoth Lakes The town of Mammoth Lakes, a small California resort community near Yosemite National Park, filed a Chapter 9 bankruptcy petition (Bankr. E.D. Calif. Case No. 12-32463) on July 3, 2012, estimating $100 million to $500 million in assets and $50 million to $100 million in debts. Bankruptcy Judge Thomas C. Holman oversees the case. Lawyers at Fulbright & Jaworski LLP and Klee, Tuchin, Bogdanoff & Stern, LLP, serve as the Debtor's counsel. The petition was signed by Dave Wilbrecht, town manager. MARICOPA IDA: Moody's Affirms 'B1' Bond Rating; Outlook Stable -------------------------------------------------------------- Moody's Investors Service affirms the B1 rating and assigns a stable outlook to the Industrial Development Authority (IDA) of the County of Maricopa, Arizona Education Revenue Bonds (Arizona Charter School Project I) Series 2000A and Taxable Series 2000B outstanding in the approximate amount of $22 million. Summary Rating Rationale The rating incorporates the primary source of payment for the bonds, State Per Pupil Operating Revenue, and the security provided by the direct transfer of these funds to the Trustee to fund debt service. The pool includes charter schools of varying sizes and credit qualities which as a group demonstrate satisfactory, though variable, school demand and narrow operating performance. The legal structure of the pool, described below, is key to the rating. Key structural factors included in the rating are strong legal and reporting requirements, available debt service reserves (in part cross-collateralized among the schools) providing adequate default tolerance, a mortgage on participants' facilities, a fifteen-year initial charter period, and a 1.2 times additional bonds test. Strengths - Direct intercept of gross per pupil revenues to pay debt service - Cross-collateralized reserves Challenges - Weak financial performance from largest pool borrowers - Potential competition from surrounding school districts - Fluctuating enrollment and small size of each participant What Could Make The Rating Go -- Up - Significant improvement in participant credit quality - Sustained trend of increased per pupil funding from state resulting in improved balance sheet and operating metrics - Sustained trend of healthy increases in enrollment for each participant What Could Make The Rating Go -- Down - Deteriorating financial performance at any participant due to enrollment, management or state level funding The principal methodology used in this rating was Charter Schools Methodology published in November 2006. MEDICAL CARD: Moody's Maintains Review on 'Caa3' Ratings -------------------------------------------------------- Moody's Investors Service has announced that it is maintaining its review for downgrade of Medical Card System, Inc.'s (MCS's) Caa3 senior secured debt rating and Caa3 corporate family rating, reflecting the delay in the release of the company's 2011 audited financial statements. The B3 insurance financial strength (IFS) rating of the company's operating subsidiary, MCS Advantage, Inc., also remains under review for downgrade. Ratings Rationale Moody's said that the review for downgrade continues the review first initiated on December 20, 2011 when MCS's ratings were downgraded and placed on review for further downgrade as a result of a combination of financial and operational problems at MCS. The rating agency said that the primary drivers of the ratings and a potential further downgrade are driven by concerns with respect to an additional deterioration in financial performance, especially if there is a significant loss of membership during the current Medicare Advantage open enrollment period as a result of reputational damage. This would result in an expected higher severity of loss should a default occur. According to the rating agency, as of November 19, 2012, MCS has not filed an audited 2011 GAAP financial statement. However, the company has reported weak full year 2011 statutory results (the sum of the 3 regulated entities MCS Advantage, MCS Life, MCS HMO): a consolidated net loss for 2011 of $21.6 million, and the company's consolidated risk based capital (RBC) ratio has declined to 54% of company action level (CAL) as of year-end 2011--a low level of capital adequacy--from 97% of CAL at December 31, 2010. Moody's added that while the company continued to report losses on a statutory basis for the first quarter of 2012 (a net loss of approximately $15 million on a consolidated basis), results for the second and third quarters were improved with a net gain of approximately $4 million for the combined nine month period. The rating agency stated that due to significantly lower earnings of MCS in the third quarter of 2011, there was a high probability that the company would not meet certain financial covenants in its bank credit facility at the end of the fourth quarter 2011. A breach of these covenants could prompt lenders to force an acceleration of repayment of the outstanding loan amount. Furthermore, as a result of the poor statutory results reported by the company for the fourth quarter of 2011, there is an increased likelihood of a covenant breach. MCS had been operating under a waiver granted by its bank lenders with respect to the delay in the release of audited financial statements; however, the waiver agreement expired at the end of June and has not been formally renewed. Moody's added that there are also continued concerns regarding an ongoing federal investigation of the company. While no charges have been made against the company, the concern is that this could result in the federal authorities placing operational constraints and/or assessing fines/penalties, which would have negative financial implications for the company. Moody's said its review for downgrade will focus on MCS's operating and financial results, when published, and the company's retention of its commercial and Medicare Advantage membership (which should be available in January 2013), as well as the impact of these factors on the expected recovery value to creditors if there is an acceleration of repayment of the bank loan. The rating agency said the review will also factor in any new developments from the federal investigation. Additionally, Moody's stated the ratings could be withdrawn if 2011 audited GAAP financial statements are not received within a reasonable timeframe. Moody's stated that if there is an adverse development with respect to the federal investigation, the ratings could be downgraded. Additionally, Moody's stated that the ratings could be lowered if the company is required to make a significant financial remuneration to lenders as a result of breaching one or more of the covenants in its term loan agreement, if EBITDA margins fall below 0%, or if membership declines by 20% or more. Moody's noted that there is unlikely to be upward rating movement near-term given the likelihood of an event of default and potential losses to creditors under such a scenario; however, the ratings could be confirmed if MCS is able to meet the financial covenants in its term loan agreement, there is minimal or no impact on membership, and there are no material actions taken against the company in connection with the federal investigation. The principal methodology used in rating Medical Card System was Moody's Rating Methodology for U.S. Health Insurance Companies published in May 2011. The following ratings remain under review for downgrade: Medical Card System, Inc. -- senior secured debt rating at Caa3; corporate family rating at Caa3; MCS Advantage, Inc. -- insurance financial strength rating at B3. Medical Card System, Inc. is headquartered in San Juan, Puerto Rico. For the first nine months of 2012 MCS reported total revenues on a statutory basis of approximately $1.0 billion and a net gain of approximately $4.1 million. Medicare Advantage membership as of September 30, 2012 was 113,056 members (including Medicare Part D stand alone membership) compared to 118,280 members at September 30, 2011. Moody's insurance financial strength ratings are opinions about the ability of insurance companies to punctually pay senior policyholder claims and obligations. MICHAEL HAT: Calif. Appeals Court Rules on Dispute With Ex-Wife --------------------------------------------------------------- The Court of Appeals of California, Third District, in San Joaquin, said it lacks jurisdiction to consider whether a trial court erred in denying Michael Hat's motion to compel arbitration of claims related to a release granted to his ex-wife, Sharon Stevens, because Mr. Hat failed to appeal from the trial court's order denying his motion to stay and compel arbitration as moot. Mr. Hat and Ms. Stevens were married in 1982 and divorced in 2000. During their marriage, Mr. Hat developed three businesses engaged in the farming of grapes and the production of wine or juice: Michael Hat Farming Company; Capello, Inc.; and Grapeco, Inc. These entities held interests in these assets: Capello Winery; Grissom Ranch Vineyard; Pond Ranch Vineyard; Coastal Ranch Vineyard; Rampage Ranch Vineyard; Arvin Ranch Vineyard; and Sedan Ranch Vineyard. In July 2001, Mr. Hat, individually and as Michael Hat Farming Company, Capello, Inc., and Grapeco, Inc., filed petitions for chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No. 01-_____), and a bankruptcy trustee was appointed. In 2003, when proposed reorganization plans were not accepted by various creditors, the proceeding changed to a liquidation proceeding, and some of the bankruptcy estates' assets were abandoned back to Mr. Hat, including the Rampage Ranch Vineyard, Coastal Ranch Vineyard, and Pond Ranch Vineyard. In mid-2003, Mr. Hat and Ms. Stevens entered into a verbal agreement to create a joint venture that would (1) seek to acquire additional assets from the bankruptcy estate by abandonment or by the exercise of Ms. Stevens's right of first refusal under Bankruptcy Code section 363(i) and (2) operate, hold, or sell such assets. The parties agreed to share any net profits after expenses and to wind up the joint venture and divide the profits and remaining property between them once the bankruptcy proceeding concluded. The dispute stemmed from the bankruptcy trustee's attempt to sell certain assets, and Ms. Stevens asserting her right of first refusal. The case is MICHAEL HAT, Plaintiff and Appellant, v. SHARON STEVENS, Defendant and Appellant, No. C064791 (Calif. App. Ct.). A copy of the Appellate Court's Nov. 19, 2012 decision, including a background of the dispute, is available at http://is.gd/8bhqpS from Leagle.com. MICHAELS STORES: Posts $36 Million Net Income in Third Quarter -------------------------------------------------------------- Michaels Stores, Inc., reported net income of $36 million on $1.01 billion of net sales for the quarter ended Oct. 27, 2012, compared with net income of $32 million on $996 million of net sales for the quarter ended Oct. 29, 2011. For the nine months ended Oct. 27, 2012, the Company reported net income of $102 million on $2.88 billion of net sales, compared with net income of $79 million on $2.80 billion of net sales for the nine months ended Oct. 29, 2011. The Company's balance sheet at Sept. 30, 2012, showed $1.90 billion in total assets, $4.27 billion in total liabilities and a $2.37 billion total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/H3ZEBj About Michaels Stores Headquartered in Irving, Texas, Michaels Stores, Inc., is the largest arts and crafts specialty retailer in North America. As of March 9, 2009, the Company operated 1,105 "Michaels" retail stores in the United States and Canada and 161 Aaron Brothers Stores. * * * As reported by the TCR on April 5, 2012, Moody's Investors Service upgraded Michaels Stores, Inc.'s Corporate Family Rating to B2 from B3. "The upgrade of Michaels' Corporate Family Rating primarily reflects the positive benefits of its continuing business initiatives which have led to consistent improvements in same store sales," said Moody's Vice President Scott Tuhy. In the April 16, 2012, edition of the TCR, Standard & Poor's Ratings Services raised its corporate credit rating on Irving, Texas-based Michaels Stores Inc. to 'B' from 'B-'. "Standard & Poor's Ratings Services' upgrade on Michaels Stores reflects the improvement in financial ratios following the company's performance in the important fourth quarter, given the seasonality of the company's business," said Standard & Poor's credit analyst Brian Milligan. "The CreditWatch placement remains effective, given the pending IPO." MOUNTAIN NATIONAL: Delays Q3 Form 10-Q for Regulatory Matters ------------------------------------------------------------- Mountain National Bancshares, Inc., was unable to file its quarterly report on Form 10-Q for the quarter ended Sept. 30, 2012, by Nov. 14, 2012, without unreasonable effort or expense because of the Company's ongoing efforts to complete the preparation of its annual audited financial statements. The completion of the Company's quarterly and annual financial statements has required more time than in prior years due to issues related to the regulatory and capital issues involving Mountain National Bank. Therefore, the Company was not able to file the Form 10-Q by Nov. 14, 2012. About Mountain National Mountain National is a bank holding company registered with the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956, as amended. The Company provides a full range of banking services through its banking subsidiary, Mountain National Bank. The Company conducts its banking activities from its main office located in Sevierville, Tennessee and through eight additional branch offices in Sevier County, Tennessee, as well as a regional headquarters and two branch offices in Blount County, Tennessee. The Company's balance sheet at June 30, 2011, showed $521.40 million in total assets, $509.90 million in total liabilities, and stockholders equity of $11.50 million. The Company and its principal subsidiary, Mountain National Bank, are subject to various regulatory capital requirements administered by the federal banking agencies. In February 2010, the Bank agreed to an Office of the Comptroller of the Currency ("OCC") minimum capital requirement ("IMCR") to maintain a minimum Tier 1 capital to average assets ratio of 9% and a minimum total capital to risk-weighted assets ratio of 13%. The Bank had 4.61% of Tier 1 capital to average assets and 7.69% of total risk-based capital to risk-weighted assets ratio at June 30, 2011, and was therefore not in compliance with the IMCR. As a result, the OCC may bring additional enforcement actions, including a consent order or a capital directive, against the Bank. Based upon its capital levels at June 30, 2011, the Bank's capital shortfall was approximately $23,374,000 for the Tier 1 capital to average assets requirement and approximately $20,342,000 for the total capital to risk-weighted assets requirement. As reported by the TCR on June 29, 2012, the designation of Mountain National Bank was changed to "significantly undercapitalized" effective upon the Bank's filing of an amended Dec. 31, 2011, Report of Condition and Income with its federal regulators on May 30, 2012, in which its tangible equity capital ratio was 2.10%. The Bank's tangible equity capital ratio as of March 31, 2012, as reflected in its amended Call Report filed with the federal regulators on June 14, 2012, improved further to 2.45%. As a result of no longer being designated as "critically undercapitalized", the Bank is no longer required under applicable Prompt Corrective Action regulations to be placed into conservatorship or receivership within 90 days of that designation under certain circumstances. MYLAN INC: Moody's Hike Senior Unsecured Rating From 'Ba2' ---------------------------------------------------------- Moody's Investors Service upgraded Mylan Inc. to investment grade, including the senior unsecured rating to Baa3 from Ba2. At the same time, Moody's affirmed Mylan's Baa2 senior secured bank rating. The upgrade results in a withdrawal of the Ba1 Corporate Family Rating, Ba1 Probability of Default rating and SGL-2 Speculative Grade Liquidity Rating as these measures are applicable only for non-investment grade companies. Ratings upgraded: Senior secured notes to Baa3 from Ba2 (LGD 5, 74%) (LGD point estimates withdrawn) Ratings affirmed: Baa2 senior secured revolving credit facility (LGD point estimates withdrawn) Baa2 senior secured term loans (LGD point estimates withdrawn) Ratings withdrawn: Ba1 Corporate Family Rating Ba1 Probability of Default Rating SGL-2 Speculative Grade Liquidity Rating The upgrade reflects Moody's expectation that Mylan will maintain a capital structure that supports an investment grade rating, and that strong operating results will result in rising EBITDA and cash flow in the coming years. "Mylan's publicly-articulated 3.0-times debt/EBITDA target supports an investment grade rating when considered in tandem with its strong global position and good growth outlook," stated Michael Levesque, Moody's Senior Vice President. Ratings Rationale Mylan's Baa3 senior unsecured rating reflects its strong global position in generic pharmaceuticals, its robust growth outlook, and the expectation that financial policies will be consistent with an investment-grade rating. Mylan has articulated a financial policy in which it does not expect leverage to exceed the covenant limits in its credit facility (currently 4.25 times) and in which deleveraging to 3.0 times would be accomplished within 18 months of acquisitions which resulted in a leverage increase. The rating also reflects Mylan's strong geographic diversification and its robust generic pipeline capabilities. Further, the rating is supported by favorable industry fundamentals based on the large number of branded pharmaceutical products facing patent expirations in the coming years as well as global demographic factors driving drug utilization. The rating is constrained by Mylan's appetite for leverage which has been high in the past and could increase for acquisitions. Further, Mylan's cash flow to debt measures will remain somewhat modest driven by high interest costs, capital expenditures and working capital needs to support global growth. The rating outlook is stable and reflects Moody's expectations that strong growth will continue and that financial policies will include a debt/EBITDA target of 3.0 times. Moody's could upgrade Mylan's ratings if the company continues to execute on its growth strategy for several more years, makes progress in its biosimilars strategy, and sustains stronger credit ratios including debt/EBITDA below 2.5 times. Conversely, Moody's could downgrade the ratings if Mylan sustains debt/EBITDA above 4.0 times. This could occur if Mylan pursues extremely large debt-financed acquisitions or if EBITDA significantly contracts due to pricing pressure or other operating setbacks. Although the overall rating outlook on Mylan is stable, an upgrade from another rating agency would result in collateral release for the senior secured revolver and term loan. Under this scenario and upon confirmation of collateral release, Moody's envisions lowering the rating on Mylan's credit facilities to Baa3 from Baa2. Headquartered in Canonsburg, Pennsylvania, Mylan Inc. is a global generic and specialty pharmaceutical company. For the first nine months of 2012, Mylan reported total revenues of approximately $5.1 billion. The principal methodology used in rating Mylan was the Global Pharmaceutical Industry Methodology published in October 2009. MYLAN INC: S&P Raises CCR From 'BB+' on Reduced Leverage -------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating (CCR) on generic drug maker Mylan Inc. to 'BBB-' from 'BB+'. The outlook is stable. "We raised the rating on Mylan's unsecured debt to 'BBB-' from 'BB', pari passu with the CCR under our investment grade rating criteria," said Standard & Poor's credit analyst Michael Kaplan. "However, Standard & Poor's lowered the issue-level ratings on Mylan's $1.25 billion senior term loan and $1.25 billion revolving credit facility to 'BBB-' from 'BBB' given that the security interest in collateral will be released upon the upgrade of the company. Since Standard & Poor's does not assign recovery ratings on the debt of investment-grade-rated companies, we are withdrawing the issue-level recovery ratings on all of the company's debt," S&P said. "The ratings on Mylan reflect our expectation of mid-single-digit EBITDA growth over the next few years, and that leverage measures will remain in line with the guidelines for an 'intermediate' (according to our criteria) financial risk profile. The upgrade incorporates room for potential share repurchases and acquisitions, given the ongoing consolidation of the generic drug industry. We expect operational performance to reflect increased new product introductions and a higher level of R&D spending. A 'satisfactory' business risk profile reflects Mylan's well- established position in the generic drug industry and our expectation that Mylan will continue participating in ongoing industry consolidation in a measured manner. We expect the generic drug industry to experience mid-single-digit growth over the next three years, as a record number of patent expirations through 2014 expand the range of generic drugs available. At the same time, payors and revenue-challenged governments worldwide are encouraging greater use of less-expensive generic drugs," S&P said. "The outlook is stable. Debt to EBITDA fell to 2.7x as of Sept. 30, 2012, as Mylan continues realizing benefits from recent small acquisitions and sharply increased EpiPen revenues. With a large global footprint and a full generic drug pipeline, Mylan is also well positioned to capitalize on the opportunities in the global generic space over the next three years. These opportunities should enable revenue growth rates at least in the mid- to upper- single digits, with stable margins in the mid-20% area for the foreseeable future. A broad product portfolio lessens the risk that any one product setback could significantly affect operations. We could raise our rating if we believed that credit measures would be sustained at around 2.5x and FFO to debt at close to 40%. However, we could lower our rating if Mylan undertakes additional significantly debt-financed acquisitions or engages in shareholder-friendly capital market actions that drive leverage to about 4x, without the prospect that it would then decline to 3x within 18 months. Accordingly, we believe that the company has the capacity to make a richly valued $4 billion acquisition within the context of the current rating," S&P said. NAVIOS MARITIME: Reaches Restructuring Agreement With Insurer ------------------------------------------------------------- Navios Maritime Partners L.P. and its subsidiaries agreed to restructure its credit default insurance. Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners, stated, "Navios Partners entered into a restructuring agreement with its credit default insurer. We view this as a positive development and believe that Navios Partners will be stronger after the restructuring. Navios Partners will receive (1) $24.6 million lump sum cash payment, (2) pool insurance covering $175.9 million of charter revenue, providing a maximum payout of $120 million and (3) supplemental credit default insurance from Navios Maritime Holdings Inc. on $76.7 million revenue of charter revenue, providing a maximum payout of $20 million." Credit Default Insurance In connection with this restructuring, Navios Partners will receive: -- $24.6 million lump sum cash payment; -- $175.9 million of revenue covered under restructured credit default insurance policy; and -- $76.7 million revenue covered under Navios Maritime Holdings Inc. supplemental credit default insurance policy. -- $24.6 million lump sum cash payment Navios Partners will receive $24.6 million of cash from the credit default insurer, composed, in part, of $9.8 million attributable to defaulted charters. The remaining $14.8 million is not attributable to any charter and represents excess cash compensation. The Company anticipates using the $24.6 million to repay debt, reducing net debt to book capitalization by 7.5%. The Company anticipates repaying $10.8 million due in 2013, $4.9 million due in 2014 and $8.9 million due in 2015 and beyond. $175.9 million of revenue covered under restructured credit default insurance Navios Partners will have $175.9 million of charters that will participate in pool insurance coverage from the credit default insurer. This pool insurance will pay a maximum cash payment of $120.0 million. Navios Holdings has additional charters totaling $41.2 million that will also participate in this pool coverage. $76.7 million revenue covered under Navios Holdings supplemental insurance As part of restructuring of the credit default insurance and pursuant to the management agreement between the parties, Navios Holdings agreed to provide $76.7 million supplemental charter insurance with a maximum cash payment of $20 million. Navios Holdings agreed to provide this additional insurance to provide certainty to the cash flow of Navios Partners. Total charter revenue covered by the two insurance policies amounts to $252.6 million. Approximately 80% of this amount is for counterparties that are rated as investment grade by recognized rating agencies. The maximum cash payment to Navios Partners from the two policies is $140.0 million. Excluding investment grade counterparties, the maximum cash payment provides 278% coverage to revenue from non- investment grade counterparties. Closing of the credit default insurance restructuring is expected within November 2012, subject to customary closing conditions and required approvals by financing banks. NEIMAN MARCUS: S&P Cuts Rating on Senior Secured Term Loan to 'B+' ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its issue-level rating on The Neiman Marcus Group Inc.'s senior secured term loan to 'B+' from 'BB-' and revised the recovery rating to '3' from '2', indicating its expectation of meaningful (50% to 70%) recovery in the event of payment default. "At the same time, we affirmed all other ratings, including the 'B+' corporate credit rating, on the company. Neiman Marcus plans to use the proceeds from the $500 million incremental term loan to repay its senior subordinated notes," S&P said. "The ratings on Dallas-based luxury retailer Neiman Marcus incorporate Standard & Poor's Ratings Services' assessment of a 'fair' business risk profile and a 'highly leveraged' financial risk profile," said Standard & Poor's credit analyst David Kuntz. "The company's business risk profile reflects its participation in the highly competitive department store sector, relatively narrow market compared with other department store operators, and small store base. Its solid position in the high-service, luxury merchandise specialty department store industry, strong vendor relationships, and improved operating performance over the past year somewhat offset these risks. In our view, Neiman Marcus has done a good job maintaining its customer service, reputation, and merchandise," S&P said. "Our stable rating outlook on Neiman Marcus reflects our expectation that performance gains will continue over the next year, with EBITDA growth in the mid-single digits. We expect further strength in luxury retailing to propel revenue gains in the upper-single digits, but margins to erode slightly because of investments in infrastructure and technology initiatives. In our view, the company's aggressive financial policies will negate any meaningful improvements in credit protection metrics over the long term. However, there could be some modest strengthening of metrics over the next year," S&P said. "Although unlikely over the next 12 months, we could raise our rating on the company if revenues rise in the upper-single digits and margins increase by over 75 basis points. Concurrently, the company would significantly moderate its future dividend policies. Under this scenario, leverage would be in the upper-4x area and interest coverage would be in the mid-3x area," S&P said. "We could lower the rating if performance slows substantially because of an unexpected drop in luxury retail spending or if the company increases the amount of future dividends and issues debt to fund them. Under this scenario, the company would issue debt above $600 million and use the proceeds to pay a dividend, leading to leverage of about 6x," S&P said. NORD RESOURCES: Incurs $2.3 Million Net Loss in Third Quarter ------------------------------------------------------------- Nord Resources Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $2.28 million on $2.03 million of net sales for the three months ended Sept. 30, 2012, compared with a net loss of $1.73 million on $3.84 million of net sales for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $7.18 million on $6.42 million of net sales, compared with a net loss of $7.08 million on $11.98 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $52.82 million in total assets, $67.76 million in total liabilities and a $14.93 million total stockholders' deficit. "Since July 2010, when Nord suspended mining new ore, our operations have consisted of leaching copper from the material previously placed on our three pads and processing it through the Johnson Camp Mine's SX-EW plant," said Wayne Morrison, chief executive and chief financial officer. "As expected, while this assists us in operating with minimal, tightly controlled costs, our copper production is in steady decline." "We are continuing to explore potential, financing options that would enable us to restructure our debt and provide us with the capital needed for constructing a new leaching pad. With this accomplished, we would resume mining and processing new ore from the Johnson Camp Mine's deposits. We continue to work on obtaining new financing. However, we cannot be certain that our efforts will prove successful," Mr. Morrison said. The filing of the Company's Form 10-Q was delayed to facilitate completion of the review of certain financial information by Nord's independent registered public accounting firm pursuant to Rule 10-01(d) of Regulation S-X. A copy of the Form 10-Q is available for free at: http://is.gd/kiUOn3 About Nord Resources Based in Tuczon, Arizona, Nord Resources Corporation (TSX:NRD/OTCBB:NRDS.OB) -- http://www.nordresources.com/-- is a copper mining company whose primary asset is the Johnson Camp Mine, located approximately 65 miles east of Tucson, Arizona. Nord commenced mining new ore in February 2009. On June 2, 2010, Nord Resources appointed FTI Consulting to advise on refinancing structures and strategic alternatives. Nord Resources reported a net loss of $10.31 million on $14.48 million of net sales in 2011, compared with a net loss of $21.20 million on $28.64 million of net loss in 2010. NORTH AMERICAN BREWERIES: Moody's Assigns B2 Corp. Family Rating ---------------------------------------------------------------- Moody's Investors Service assigned a first time corporate family rating (CFR) of B2 to North American Breweries Holdings, LLC ("NAB") and rated its proposed $175 million term loan B facilities at B2 (LGD4, 52%). The proceeds will be used to repay existing debt as well as equity in connection with the sale of the company to Cerveceria Costa Rica S.A. The rating outlook is stable. This is a first time rating assignment. Rating Rationale "The newly assigned CFR of B2 reflects the company's small scale and limited geographic diversity relative to large global brewers," said Linda Montag, Moody's Senior Vice President. NAB operates predominantly in the US, with pockets of regional strength aligned with its four breweries which are on the coasts, and a very light presence in the middle of the country. NAB's operating margins are thin due to portfolio mix and scale disadvantages relative to much larger peers. A meaningful amount of the company's volumes are from contract brewing which is not very profitable, and certain other brands that also dilute profitability. Lower margins are somewhat offset by its more profitable craft brands and Seagram's Escapes, while Labatt brands make a solid and stable contribution. Significant acquisition activity over the past few years has led to the creation of the portfolio as it exists today, so the longer term track record of managing brands which are strong in disparate regions of the country remains to be seen. Moody's expects EBITA margins to remain in the high single digit range in the next 12-18 months. These speculative grade elements are offset by NAB's good liquidity and moderate leverage. Moody's estimates that the company's Debt/EBITDA (calculated using Moody's accounting adjustments) will be in the 3.5 to 4.5 times range in the next 12 to 18 months. While the company is small relative to other global, deep-pocketed brewers in the North American market, it has good growth prospects thanks to its portfolio of craft, import, flavored malt beverages and other popular brands. In addition, Moody's believes that the new owner, Costa Rican based Cerveceria Costa Rica S.A., which has its own interests in beer in Central America, can be considered more of a strategic owner than previous private equity owner KPS Capital Partners, a potential positive due to sharing of best practices and possible revenue synergies. The proposed bank facilities will be secured by substantially all of the tangible and intangible assets of the borrower. Moody's expects the company to have at least a 30% cushion under its most restrictive financial covenants at all times. Ratings Assigned: Corporate Family Rating at B2 Probability of Default rating at B2 Senior secured Term loan B at B2, LGD 4, 52% To achieve an upgrade, NAB will need to demonstrate its ability to profitably grow its business and generate consistent positive free cash flow to enable leverage reduction. Improving the profitability of its larger brands and growing the scale of certain smaller but more profitable brands would be a plus. Quantitatively, an upgrade would be considered if EBITA margin were to be sustained above 9% and leverage declined to under 4 times, while also increasing scale. The rating would be lowered if NAB's financial performance were to deteriorate such that EBITA margins fell from current levels, debt to EBITDA rose above 5.5 times or free cash flow were negative. Large debt financed acquisitions or shareholder returns could also result in a ratings downgrade. The principal methodology used in rating this issuer was the Global Alcoholic Beverage Industry Methodology published in September 2009, which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating this issue can also be found in the Credit Policy & Methodologies directory. Headquartered in Rochester, NY, NAB's portfolio of brands includes, Genessee, Labatt brands in the US, Original Honey Brown Lager and Dundee Ales and Lagers, Seagram's Escapes, Magic Hat, Pyramid an Mac Tarnahans . NAB also performs contract brewing on behalf of other companies. The company posted sales of $432 million for the twelve months ended 9/30/2012. OLYMPIC HOLDINGS: Court Employs M. Jonathan Hayes as Counsel ------------------------------------------------------------ Olympic Holdings, LLC, sought and obtained permission from the Bankruptcy Court to employ the law offices of M. Jonathan Hayes as its general bankruptcy counsel. The Debtor requires the services of Hayes to render the types of professional services relating to the Chapter 11 proceeding: A. Preparation of the schedules and the additional forms required to begin the bankruptcy case; B. Advice and assistance regarding compliance with the requirements of the United States Trustee; C. Advice regarding matters of bankruptcy law, including the rights and remedies of the Debtor in regard to its assets and with respect to the claims of creditors; D. Negotiate the use of cash collateral and obtain court permission for same; E. Conduct examinations of witnesses, claimants or adverse parties and prepare and assist in the preparation of reports, accounts and pleadings; F. Advice concerning the requirements of the Bankruptcy Code and applicable rules; G. Assist with the negotiation, formulation, confirmation and implementation of a Chapter 11 plan; H. Make any appearances in the Bankruptcy Court on behalf of the Debtor; and I. Take such other action and to perform such other services as the Debtor may require. Hayes will render services to the Debtor at his regular hourly rates, which may be subject to adjustment from time to time. Hayes will bill his time in the Chapter 11 case at $385 per hour, associate Roksana Moradi at $265 per hour, and associate Carolyn Afari at $165 per hour. Hayes also intends to apply for compensation and reimbursement for fees incurred and costs advanced. The Debtor assures the Court the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Beverly Hills, California-based Olympic Holdings, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-32707) on June 29, 2012, in Los Angeles. The Debtor estimated assets and liabilities at $10 million to $50 million. A related entity, Wooton Group, LLC, earlier sought bankruptcy protection (Case No. 12-31323) on June 19, 201 ORLANDO, FL: Moody's Cuts Rating on 2nd Lien Bonds to 'Ba2' ----------------------------------------------------------- Moody's Investors Service has affirmed the City of Orlando's (FL) $181.7 million Senior Tourist Development Tax Revenue Bonds (6th Cent Contract Payments), Series 2008A at Baa2, and downgraded the rating on the $33.4 million Second Lien Subordinate Tourist Development Tax Revenue Bonds (6th Cent Contract Payments), Series 2008B to Ba2 from Ba1; the outlooks are revised to stable from negative. There is also a Subordinate Third Lien TDT bond issue ($87.3 million outstanding) not rated by Moody's. All of the bonds are secured by a senior lien (Series 2008A) and a second (subordinate) lien (Series 2008B) pledge on "Contract" 6th cent tourist development tax (TDT) revenues that compose one-half of a countywide 6th cent TDT, plus an additional incremental portion ("Installment Amount") available for a ten-year period to November 2018. The bond structures initially included separate cash-funded, debt service (50%) and liquidity reserves (50%) for each series, which together equal to 100% of MADS (Series A&B) and 10% of par (Series C). The bonds were originally issued, along with other funds, to construct an Event Center in the city's downtown area. Summary Rating Rationale The Baa2 and Ba2 ratings for the senior and second lien subordinate bonds, respectively, are based on the near term expectation of depletion of both the liquidity and debt service reserves to help make debt service payments for the Series C third lien subordinate bonds (not rated) which would, in turn, trigger cross-default provisions affecting both the Series A and Series B bondholders. The ratings also factor in the narrow senior and second lien debt service coverage from recovering TDT proceeds, with the expectation that the senior lien bonds would continued to be paid even under reasonable stress scenarios, and the subordinate second lien bonds under less stressed scenarios. The differential between the senior and second lien subordinate bonds reflects the more marginal coverage currently for the second lien bonds, the expiration of installment payments in 2018, and the fact that a period of negative collections make the bonds more speculative. The bonds (Series A, B and C) are insured for payment of principal and interest by Assured Guaranty Corp. (Aa3/RUR, possible downgrade). The Tourist Development Tax (TDT) is a passive tax collected by the county and based on temporary lodging and tourism activity. It bears no relationship to the city's overall financial performance or credit position (Aa1 Issuer Rating). The Orlando MSA has a well-established and sizable tourist-oriented component that retains favorable long-term growth prospects. Strengths - TDT is levied on a sizable base with an established tourism identity as well as favorable convention activity - Historical collections of TDT show strong results with declines typically recouped within two years Challenges - Sufficiency of contract 6th cent TDT receipts to adequately cover debt service requirements on a significant amount of debt - Inability to adjust the TDT - Global and national economic uncertainties that could negatively affect discretionary travel to Orlando Outlook The stable outlooks, while recognizing the strong likelihood of Series C bonds triggering cross default provisions under the indenture, also consider the favorable long-term TDT collection history and the likelihood that, under a priority lien payment status, senior lien bonds especially should continue to be fully paid in the intermediate term. What Could Make the Rating go UP - Significant improvement in contract TDT receipts, significantly improving coverage What Could Make the Rating go DOWN - Additional declines in contract TDT receipts either further narrowing coverage or being insufficient to cover debt requirements for Series A and/ or Series B bonds - Economic events nationally that could reduce discretionary travel to the Orlando area The principal methodology used in this rating was US Public Finance Special Tax Methodology published in March 2012. OROCO RESOURCE: Enters Into Term Sheet With Waterton for Funding ---------------------------------------------------------------- Oroco Resource Corp. has entered into a Term Sheet with Waterton Global Value L.P. whereby Waterton has committed to provide a secured $5 million convertible debt facility to Oroco. Pursuant to the Term Sheet, the Facility will have a term of two years and a coupon rate of 10% per annum. The Facility amount will be convertible into shares of the Company at a deemed price of $0.25 per share. If the Company pre-pays the Facility amount in whole or in part prior to its maturity date, the amount of pre- payment will be 115% of the Facility amount being pre-paid, which would increase to 130% if the Company were to lose the current amparo petitions with regard to the Xochipala property (see news release of October 22, 2012). Waterton may call for repayment of the Facility in the event there is a change of control of the Company. If the Facility is pre-paid before its maturity date or there is a change in the Company's ownership or interest in the Celia Gene and Celia Generosa concessions (the "Xochipala Concessions") other than as a result of the current amparo, the Company shall transfer a 12.5% interest in the Xochipala Concessions to Waterton and grant it an option to earn a further 10% interest by funding $1,250,000 in exploration expenditures on the Xochipala Concessions. The Facility is subject to completion of legal documentation, receipt of regulatory approvals, including that of the TSX Venture, and standard material adverse change exceptions. The Company will use the Facility to repay all amounts due pursuant to the convertible debentures issued by the Company in May, 2012. The Company has received notices of default from the Debenture holders for failure to pay interest and a break fee which resulted from the Company not proceeding with the related gold prepayment agreement. The Debentures, in the aggregate principal amount of $3.75 million, are therefore now due and payable. The balance of the proceeds of the Facility will be used to pay costs and fees associated with the Facility and for general working capital purposes. The Company also announces that it intends to complete a non- brokered private placement of up to 5,000,000 units at a price of $0.20 per unit to raise gross proceeds of up to $1,000,000. Each unit consists of one common share and one half of one common share purchase warrant. Each whole share purchase warrant will be exercisable into one additional common share for a period of 18 months at a price of $0.35 per share. The private placement, which is intended to provide interim working capital for the Company, is subject to the acceptance of the TSX Venture Exchange. The Company's previously announced private placement has been canceled and the Company will be contacting subscribers in order to determine whether they will be participating in the current private placement. OVERLAND STORAGE: To Issue 250K Shares to Randy Gast as Incentive ----------------------------------------------------------------- Overland Storage, Inc., filed with the U.S. Securities and Exchange Commission a Form S-8 registration statement registering 250,000 shares of common stock issuable under the Inducement Stock Option Grant to Randy Gast, dated Aug. 23, 2012. The proposed maximum aggregate offering price is $413,000. Randy Gast serves as the Company's Senior Vice President of Strategic Alliances and Client Services. A copy of the filing is available for free at http://is.gd/CUzUAd About Overland Storage San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) -- http://www.overlandstorage.com/-- is a global provider of unified data management and data protection solutions designed to enable small and medium enterprises (SMEs), corporate departments and small and medium businesses (SMBs) to anticipate and respond to change. The Company incurred a net loss of $16.16 million for the fiscal year 2012, compared with a net loss of $14.49 million for the fiscal year 2011. The Company's balance sheet at June 30, 2012, showed $38.26 million in total assets, $35.22 million in total liabilities, and $3.04 million in total shareholders' equity. Moss Adams LLP, in San Diego, California, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2012. The independent auditors noted that the Company's recurring losses and negative operating cash flows raise substantial doubt about the Company's ability to continue as a going concern. OVERSEAS SHIPHOLDING: Has Interim Cash Use Approval --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Overseas Shipholding Group Inc. said it has enough cash and doesn't need an operating loan. OSG nonetheless needs permission to use cash representing collateral for $312 million in loans made by the Export-Import Bank of China for construction of five tankers. The bankruptcy court gave OSG interim permission Nov. 20 to use the collateral. According to the report, in return for use of cash, OSG agreed to pay interest on the loan every month at the non-default rate. The company also agreed that it won't use any of the cash to attack the lender's loan or security interest. There will be a final hearing on Dec. 7 for use of cash. About Overseas Shipholding Overseas Shipholding Group, Inc., and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012. OSG, headquartered in New York City, NY, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG, owner or operator of 111 vessels that transport oil and petroleum products throughout the world, said in a statement that it intends to use the Chapter 11 process to significantly reduce its debt profile, reorganize other financial obligations and create a strong financial foundation for the Company's future. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. Cleary Gottlieb Steen & Hamilton LLP serves as OSG's Chapter 11 counsel, while Chilmark Partners LLC serves as financial adviser. The Debtors disclosed $4.15 billion in assets and $2.67 billion in liabilities as of June 30, 2012. Liabilities include $1.49 billion on an unsecured credit agreement with DNB Bank ASA as agent. In addition to the secured Chinese loan, there is $518 million in unsecured notes and debentures plus $267 million on ship mortgages taken down to finance nine vessels. OVERSEAS SHIPHOLDING: Pomerantz Files Class Action Suit ------------------------------------------------------- Pomerantz Grossman Hufford Dahlstrom & Gross LLP has filed a class action lawsuit against Overseas Shipholding Group, Inc. and certain of its officers. The class action filed in United States District Court, Southern District of New York, and docketed under 12 CIV. 7938 is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired securities of Overseas Shipholding between May 4, 2009 and October 19, 2012, both dates inclusive. This class action seeks to recover damages against the Company and certain of its officers and directors as a result of alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder. If you are a shareholder who purchased Overseas Shipholding securities during the Class Period, you have until December 26, 2012 to ask the Court to appoint you as Lead Plaintiff for the Class. To discuss this action, contact Robert S. Willoughby POMERANTZ GROSSMAN HUFFORD DAHLSTROM & GROSS LLP E-mail: rswilloughby@pomlaw.com Tel: 888.476.6529 or 888.4-POMLAW, toll free, x237. Web site: http://www.pomerantzlaw.com/ The Complaint alleges that throughout the Class Period, the Company made materially false and misleading statements regarding the Company's business, operations and compliance policies. Specifically, the Company made false and/or misleading statements and/or failed to disclose that: (i) the Company improperly accounted for certain tax liabilities; (ii) the Company lacked adequate internal and financial controls; and (iii) as a result of the above, the Company's financial statements were materially false and misleading at all relevant times. About Overseas Shipholding Overseas Shipholding Group, Inc., and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012. OSG, headquartered in New York City, NY, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG, owner or operator of 111 vessels that transport oil and petroleum products throughout the world, said in a statement that it intends to use the Chapter 11 process to significantly reduce its debt profile, reorganize other financial obligations and create a strong financial foundation for the Company's future. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. Cleary Gottlieb Steen & Hamilton LLP serves as OSG's Chapter 11 counsel, while Chilmark Partners LLC serves as financial adviser. The Debtors disclosed $4.15 billion in assets and $2.67 billion in liabilities as of June 30, 2012. Liabilities include $1.49 billion on an unsecured credit agreement with DNB Bank ASA as agent. In addition to the secured Chinese loan, there is $518 million in unsecured notes and debentures plus $267 million on ship mortgages taken down to finance nine vessels. OVERSEAS SHIPHOLDING: Todd M. Garber Files Class Action Lawsuit --------------------------------------------------------------- The Law Offices of Todd M. Garber disclosed that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of a class comprising all persons or entities who purchased the securities of Overseas Shipholding Group, Inc. between April 28, 2008 and Oct. 22, 2012, inclusive. The Complaint alleges that throughout the Class Period the Company and certain of its executive officers made false and/or misleading statements and/or failed to disclose that: (1) the Company improperly accounted for certain tax liabilities; (2) as a result, the Company's financial results were misstated during the Class Period; (3) the Company lacked adequate internal and financial controls; (4) as a result, the defendants' statements during the Class Period were materially false and misleading; and (5) as a result of the foregoing, the defendants' positive statements about OSG's financial performance, well-being and prospects lacked a reasonable basis. On Oct. 22, 2012 the Company filed a Form 8-K with the Securities and Exchange Commission disclosing that on Oct. 19, 2012 "the Audit Committee of the Board of Directors of the Company, on the recommendation of management, concluded that the Company's previously issued financial statements for at least the three years ended Dec. 31, 2011 and associated interim periods, and for the fiscal quarters ended March 31 and June 30, 2012, should no longer be relied upon." The Form 8-K further stated that the Company is reviewing whether a restatement of those financial statements may be required and "evaluating its strategic options, including the potential voluntary filing of a petition for relief to reorganize under Chapter 11 of the Bankruptcy Code." If you are a member of the above-described Class, you may move the Court no later than December 24, 2012 to serve as lead plaintiff; however, you must meet certain legal requirements. Contact the firm at: Todd M. Garber, Esquire Law Offices of Todd M. Garber Tel: (213) 700-7262 E-mail: info@toddgarberlaw.com About Overseas Shipholding Overseas Shipholding Group, Inc., and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012. OSG, headquartered in New York City, NY, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG, owner or operator of 111 vessels that transport oil and petroleum products throughout the world, said in a statement that it intends to use the Chapter 11 process to significantly reduce its debt profile, reorganize other financial obligations and create a strong financial foundation for the Company's future. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. Cleary Gottlieb Steen & Hamilton LLP serves as OSG's Chapter 11 counsel, while Chilmark Partners LLC serves as financial adviser. The Debtors disclosed $4.15 billion in assets and $2.67 billion in liabilities as of June 30, 2012. Liabilities include $1.49 billion on an unsecured credit agreement with DNB Bank ASA as agent. In addition to the secured Chinese loan, there is $518 million in unsecured notes and debentures plus $267 million on ship mortgages taken down to finance nine vessels. PACER MANAGEMENT: Case Reassigned to Hon. Tracey Wise ----------------------------------------------------- Bankruptcy Judge Joseph M. Scott, Jr., entered an order reassigning the bankruptcy case of Pacer Management of Kentucky, LLC, and Pacer Health Management Corporation to the Honorable Tracey N. Wise. Pacer Management of Kentucky, LLC, and Pacer Health Management Corporation of Kentucky filed voluntary Chapter 11 petitions (Bankr. E.D. Ky. Case Nos. 12-60410 and 12-60411) on March 27, 2012. Cumberland-Pacer, LLC also filed for Chapter 11 (Bankr. E.D. Ky. Case No. 12-60412) also filed a separate petition on the same day. Pacer Management estimated up to $50 million in assets and debts. The Debtors lease the assets and real property to operate the hospital from Knox County, Kentucky and Knox Hospital Corporation. According to court filings, the lessors in 2009 filed suit against Pacer Health and others in the Knox Circuit Court alleging a breach of the Lease Agreement but the suit was later resolved. Under the deal, CP was substituted as lessee. CP is a Kentucky limited liability company established by Dr. Satyabrata Chatterjee and Dr. Ashwini Anand to purchase the stock of Pacer Holdings of Kentucky, Inc., which owned 100% of the stock of Pacer Health and 60% of the stock of Pacer Management. CP, which previously owned 40% of the stock of Pacer Management, became the sole owner of Pacer Management following the transaction. In October 2011, the county notified CP it was in default under the lease agreement. The parties negotiated numerous extensions of time to cure the alleged defaults, most recently until 12:01 a.m. on March 29, 2012. Prior to expiration of the most recent extension, the Lessors again filed suit in the Knox Circuit Court on March 20, 2012 seeking to have the Lease Agreement terminated and requesting entry of a restraining order against CP, PHM and PM, among others. On March 20, 2012, the Knox Circuit Court issued a restraining order which precluded the Debtors from spending hospital funds other than for ordinary operating expenses, among other things. A March 22, 2012 report by The Associated Press said that county officials and the hospital board have agreed to terminate the facility's lease with the Debtors. The group then agreed to sign with another management company that will keep the hospital open and prepare it to be sold, according to the report. The Debtors filed for Chapter 11 protection to retain control of the Hospital. The Debtors said they seek to continue operating the Hospital pursuant to the terms of the Lease Agreement and preserve their option to purchase the Hospital. Judge Joseph M. Scott, Jr. presides over the case. Lawyers at DelCotto Law Group PLLC, in Lexington, Ky., serve as the Debtors' counsel. Craig Morgan, the Debtors' CEO, has been appointed by the Court as the individual responsible for performing the duties of the Company as a Debtor in possession. Mr. Morgan signed the bankruptcy petitions. Dr. Satyabrata Chatterjee, one of the DIP lenders, is represented by Dinsmore & Shohl, LLP. Dr. Ashwini Anand has teamed up with Dr. Chatterjee to provide the DIP loan. An Official Committee of Unsecured Creditors has been appointed and reconstituted by the United States Trustee in the Chapter 11 cases, but has not been active. No trustee or examiner has been appointed, although a patient care ombudsman has been appointed. PATRIOT COAL: Has Selenium Settlement With Sierra Club, et al. -------------------------------------------------------------- Patriot Coal Corporation has reached a proposed settlement agreement with the Ohio Valley Environmental Coalition, Inc., the West Virginia Highlands Conservancy, Inc. and the Sierra Club regarding claims under the Clean Water Act relating to surface mining activities in West Virginia. As a result of the proposed settlement, the deadline for compliance with selenium effluent limitations at outfalls under the Hobet 22 permit will be extended from May 2013 until August 2014. Additionally, compliance schedules under the global consent decree announced in January 2012 will be extended by 12 months. In exchange, Patriot will agree to certain restrictions on large- scale surface mining activities. "This settlement agreement allows Patriot to defer up to $27 million of compliance-related cash outlays from 2012 and 2013 into 2014 and beyond, which improves our liquidity as we reorganize our company and increases the likelihood that we will emerge from the Chapter 11 process as a viable business," stated Patriot President & Chief Executive Officer Bennett K. Hatfield. "Importantly, this proposed settlement allows Patriot to continue mining according to existing permits and is consistent with our long-term business plan to focus capital on expanding higher- margin metallurgical coal production and limiting thermal coal investments to selective opportunities where geologic and regulatory risks are minimized." The settlement remains subject to approval by the Federal District Court for the Southern District of West Virginia following a public comment period, as well as approval by the Bankruptcy Court for the Southern District of New York. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The case has been assigned to Judge Shelley C. Chapman. The U.S. Trustee appointed a seven-member creditors committee. PATRIOT COAL: Brower Piven Flies Class Action Lawsuit ----------------------------------------------------- Brower Piven, A Professional Corporation, disclosed that a class action lawsuit has been commenced in the United States District Court for the Eastern District of Missouri on behalf of purchasers of the common stock of Patriot Coal Corporation during the period between Oct. 21, 2010 and July 9, 2012, inclusive. If you have suffered a net loss for all transactions in Patriot Coal Corporation common stock during the Class Period, you may obtain additional information about this lawsuit and your ability to become a lead plaintiff by contacting: BROWER PIVEN 1925 Old Valley Road Stevenson, Maryland 21153. Web site: www.browerpiven.com E-mail: hoffman@browerpiven.com Tel: (410) 415-6616 The complaint accuses the defendants of violations of the Securities Exchange Act of 1934 by virtue of the Company's failure to disclose during the Class Period that costs of certain of its selenium water treatment requirements were improperly capitalized and the true extent of the impact those accounting errors would have on the Company's previous financial statements as well as that there existed a deficiency in internal control over financial reporting associated with its accounting treatment for the Apogee FBR and Hobet ABMet water treatment facilities that should have been classified as a material weakness for the years ended Dec. 31, 2011 and Dec. 31, 2010. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The case has been assigned to Judge Shelley C. Chapman. The U.S. Trustee appointed a seven-member creditors committee. PEGASUS RURAL: Wins Confirmation of Chapter 11 Plan --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that bankrupt subsidiaries of Xanadoo Co. have an approved Chapter 11 plan. The U.S. Bankruptcy Judge in Delaware signed a confirmation order on Nov. 19 approving the plan even though it pays nothing to unsecured creditors. According to the report, early this year, the company predicted that all secured and unsecured creditor would be paid in full. The poor recovery resulted from sales of the frequency spectrum that didn't attract outside bidders at hoped-for prices. About Pegasus Rural Broadband Pegasus Rural Broadband, LLC, and its affiliates, including Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11772) on June 10, 2011. The Debtors are subsidiaries of Xanadoo Company, a 4G wireless Internet provider. Xanadoo Co. was not among the Chapter 11 filers. The subsidiaries sought Chapter 11 protection after they were unable to restructure $52 million in 12.5% senior secured promissory notes that matured in May. The notes are owing to Beach Point Capital Management LP. Xanadoo Holdings, through Xanadoo LLC -- XLC -- offers wireless high-speed broadband service, including digital phone services, under the Xanadoo brand utilizing licensed frequencies in the 2.5 GHz frequency band. As of May 31, 2011, XLC served 12,000 subscribers in Texas, Oklahoma and Illinois. In the summer of 2010, the Debtors closed all of their retail stores and kiosks in its six operating markets and severed all fulltime sales personnel. Since the closings, the Debtors relied one key retailer in each market to serve as local point of presence to market customer transactions. Judge Peter J. Walsh presides over the case. Rafael Xavier Zahralddin-Aravena, Esq., Neil Raymond Lapinski, Esq., Shelley A. Kinsella, Esq., and Jonathan M. Stemerman, Esq., at Elliott Greenleaf, in Wilmington, Delaware, serve as counsel to the Debtor. NHB Advisorsm Inc., is their financial advisors. Epiq Systems, Inc., is the claims and notice agent. Xanadoo Holdings, Pegasus Guard Band and Xanadoo Spectrum each estimated assets of $100 million to $500 million and debts of $50 million to $100 million. The Chapter 11 filing followed the maturity in May 2011 of almost $60 million in secured notes owing to Beach Point Capital Management LP. The Court denied a motion by the secured noteholders to dismiss the Chapter 11 case and appoint a Chapter 11 trustee. The companies filed a proposed reorganization plan in February predicting sale of licenses in the 700 megahertz spectrum would pay all secured and unsecured creditors in full, with interest. In a separate filing, the companies said the assets will be turned over to secured lenders if there is neither a lender nor a buyer to finance a plan. The plan will be funded either by a new loan or by selling the business and the assets. No committee or trustee has been appointed in these cases. PENNFIELD CORP: Court Approves AEG as Financial Advisors -------------------------------------------------------- Pennfield Corporation and Pennfield Transport Company sought and obtained permission from the U.S. Bankruptcy Court to employ AEG Partners LLC as financial advisors. The order was entered as unopposed. AEG's services include overseeing operations and work with existing management to assure stability and continuity through consummation of a sale, providing financial oversight management, assisting in determining the Debtors' working capital and liquidity requirements necessary to support the sale process; and provide guidance to the Debtors' management in its dealings with the Debtors' creditors, and assisting in sale efforts. Craig S. Dean, a principal of AEG, will lead all activities that surround the engagement. The Debtors propose to pay AEG a flat advisory fee of $25,000 per week plus reasonable out-of-pocket expenses. On or within 90 days prior to the petition date, AEG received roughly $192,400 from the Debtors. About Pennfield Corporation Pennfield Corporation and Pennfield Transport Company filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 12-19430 and 12-19431) on Oct. 3, 2012, in Philadelphia. Founded in 1919, Pennfield is a Lancaster, Pennsylvania-based manufacturer of bulf and bagged feeds for dairy, equine and other commercial and backyard livestock. The company owns and operates three production mills located in Mount Joy, Martinsburg, and South Montrose, in Pennsylvania. The Debtors filed for bankruptcy to sell their assets to Carlisle Advisors, LLC, subject to higher and bettr offers. Carlisle has also agreed to provide a $2.0 million DIP Loan. Judge Bruce I. Fox presides over the case. Attorneys at Maschmeyer Karalis P.C., in Philadelphia, serve as the Debtors' bankruptcy counsel. Skadden, Arps, Slate, Meagher & Flom LLP is the special counsel. Groom Law Group, Chartered, is the employee benefits counsel. AEG Partners LLC is the financial advisor. Lakeshore Food Advisors, LLC, is the investment banker. Pennfield Corp. estimated $10 million to $50 million in assets and debts. Pennfield Transport estimated under $1 million in assets and debts. The petition was signed by Arnold Sumner, president. PENNFIELD CORP: Court OKs Maschmeyer Karalis as Bankr. Counsel -------------------------------------------------------------- Pennfield Corporation and Pennfield Transport Company sought and obtained permission from the U.S. Bankruptcy Court to employ Maschmeyer Karalis P.C. as their general bankruptcy counsel. The firm has rendered services to the Debtors pre-bankruptcy. During the 90-day period prior to the Chapter 11 filing, the firm received from the Debtors: * $50,000 as retainer on Sept. 14; * $52,092 as retainer on Sept. 25; * $76,000 as retainer on Sept. 28; and * $10,000 as retainer on Oct. 2 The firm received no other payments from the Debtors within one year of the petition date. The firm's Aris J. Karalis, Esq., attests his firm does not hold any interest materially adverse to the Debtors' estates. About Pennfield Corporation Pennfield Corporation and Pennfield Transport Company filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 12-19430 and 12-19431) on Oct. 3, 2012, in Philadelphia. Founded in 1919, Pennfield is a Lancaster, Pennsylvania-based manufacturer of bulf and bagged feeds for dairy, equine and other commercial and backyard livestock. The company owns and operates three production mills located in Mount Joy, Martinsburg, and South Montrose, in Pennsylvania. The Debtors filed for bankruptcy to sell their assets to Carlisle Advisors, LLC, subject to higher and bettr offers. Carlisle has also agreed to provide a $2.0 million DIP Loan. Judge Bruce I. Fox presides over the case. Attorneys at Maschmeyer Karalis P.C., in Philadelphia, serve as the Debtors' bankruptcy counsel. Skadden, Arps, Slate, Meagher & Flom LLP is the special counsel. Groom Law Group, Chartered, is the employee benefits counsel. AEG Partners LLC is the financial advisor. Lakeshore Food Advisors, LLC, is the investment banker. Pennfield Corp. estimated $10 million to $50 million in assets and debts. Pennfield Transport estimated under $1 million in assets and debts. The petition was signed by Arnold Sumner, president. PENNFIELD CORP: Court Approves Groom as Employee Benefits Counsel ----------------------------------------------------------------- Pennfield Corporation and Pennfield Transport Company sought and obtained approval from the U.S. Bankruptcy Court to employ Groom Law Group, Chartered as special employee benefits counsel. The firm's services include providing the Debtors advice and representation concerning the Debtors' employee benefit plans, including negotiations with federal agencies concerning the plans. The firm received roughly $23,700 from the Debtors during the 90- day period prior to the petition date. About Pennfield Corporation Pennfield Corporation and Pennfield Transport Company filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 12-19430 and 12-19431) on Oct. 3, 2012, in Philadelphia. Founded in 1919, Pennfield is a Lancaster, Pennsylvania-based manufacturer of bulf and bagged feeds for dairy, equine and other commercial and backyard livestock. The company owns and operates three production mills located in Mount Joy, Martinsburg, and South Montrose, in Pennsylvania. The Debtors filed for bankruptcy to sell their assets to Carlisle Advisors, LLC, subject to higher and bettr offers. Carlisle has also agreed to provide a $2.0 million DIP Loan. Judge Bruce I. Fox presides over the case. Attorneys at Maschmeyer Karalis P.C., in Philadelphia, serve as the Debtors' bankruptcy counsel. Skadden, Arps, Slate, Meagher & Flom LLP is the special counsel. Groom Law Group, Chartered, is the employee benefits counsel. AEG Partners LLC is the financial advisor. Lakeshore Food Advisors, LLC, is the investment banker. Pennfield Corp. estimated $10 million to $50 million in assets and debts. Pennfield Transport estimated under $1 million in assets and debts. The petition was signed by Arnold Sumner, president. PENNFIELD CORP: Can Hire Lakeshore as Investment Banker ------------------------------------------------------- Pennfield Corporation and Pennfield Transport Company sought and obtained approval from the U.S. Bankruptcy Court to employ Lakeshore Food Advisors LLC as investment bankers. The Debtors will look to Lakeshore for: -- advise in the analysis of relevant financial and operating data to develop appropriate financial structuring objectives to meet the Debtors' strategic objectives; -- advise the Debtors on structuring alternatives; -- assist and advice the Debtors in developing a strategy for accomplishing refinancing and a sale of substantially all of the Debtors' assets, including contacting prospective buyers. The Debtors will pay Lakeshore a flat fee of $17,500 per month plus reimbursement of reasonable out-of-pocket expenses. Lakeshore will also be entitled to a success fee in the event a transaction, like a sale or refinancing, occurs. The success fee will be 3% of the total consideration. Lakeshore will remain entitled to the success fee in the event the transaction is consummated within 12 months after the expiration or termination of the firm's engagement. The Debtors also agree to indemnify Lakeshore. Lakeshore began providing services to the Debtors prior to the Chapter 11 filing. During the 90 days prior to the petition date, Lakeshore received payments from the Debtors: $17,500 as retainer on July 9; $17,500 also as retainer on July 27; $21,489 as retainer and reimbursement of expenses on Aug. 28; $23,851 as retainer and reimbursement of expenses on Sept. 27; Lakeshore's Mary Burke attests her firm does not hold any interest materially adverse to the Debtors' estates. About Pennfield Corporation Pennfield Corporation and Pennfield Transport Company filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 12-19430 and 12-19431) on Oct. 3, 2012, in Philadelphia. Founded in 1919, Pennfield is a Lancaster, Pennsylvania-based manufacturer of bulf and bagged feeds for dairy, equine and other commercial and backyard livestock. The company owns and operates three production mills located in Mount Joy, Martinsburg, and South Montrose, in Pennsylvania. The Debtors filed for bankruptcy to sell their assets to Carlisle Advisors, LLC, subject to higher and bettr offers. Carlisle has also agreed to provide a $2.0 million DIP Loan. Judge Bruce I. Fox presides over the case. Attorneys at Maschmeyer Karalis P.C., in Philadelphia, serve as the Debtors' bankruptcy counsel. Skadden, Arps, Slate, Meagher & Flom LLP is the special counsel. Groom Law Group, Chartered, is the employee benefits counsel. AEG Partners LLC is the financial advisor. Lakeshore Food Advisors, LLC, is the investment banker. Pennfield Corp. estimated $10 million to $50 million in assets and debts. Pennfield Transport estimated under $1 million in assets and debts. The petition was signed by Arnold Sumner, president. PENNFIELD CORP: Committee Retains Blank Rome as Counsel ------------------------------------------------------- The Official Creditor's Committee of Pennfield Corporation and Pennfield Transport Company sought and obtained approval from the U.S. Bankruptcy Court to employ Blank Rome LLP as counsel, nunc pro tunc to Oct. 12, 2012. The Committee has been advised by Blank Rome that the currently hourly rates, which will be currently charged in respect of the primary members of the Blank Rome engagement team for the Committee, are: Professional Hourly Rate ------------ ----------- Michael B. Schaedle $600 David W. Carickhoff $515 Josef W. Mintz $320 From time to time, other Blank Rome attorneys may be involved in the Chapter 11 cases as needed. The ranges of hourly rates of the firm's professionals likely to assist in the case, prior to the applicable 10% rate accommodation, are: $305 to $940 per hour for partners, $250 to $566 per hour for associates, and $100 to $355 per hour for paralegals. Michael B. Schaedle attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Pennfield Corporation Pennfield Corporation and Pennfield Transport Company filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 12-19430 and 12-19431) on Oct. 3, 2012, in Philadelphia. Founded in 1919, Pennfield is a Lancaster, Pennsylvania-based manufacturer of bulf and bagged feeds for dairy, equine and other commercial and backyard livestock. The company owns and operates three production mills located in Mount Joy, Martinsburg, and South Montrose, in Pennsylvania. The Debtors filed for bankruptcy to sell their assets to Carlisle Advisors, LLC, subject to higher and bettr offers. Carlisle has also agreed to provide a $2.0 million DIP Loan. Judge Bruce I. Fox presides over the case. Attorneys at Maschmeyer Karalis P.C., in Philadelphia, serve as the Debtors' bankruptcy counsel. Skadden, Arps, Slate, Meagher & Flom LLP is the special counsel. Groom Law Group, Chartered, is the employee benefits counsel. AEG Partners LLC is the financial advisor. Lakeshore Food Advisors, LLC, is the investment banker. Pennfield Corp. estimated $10 million to $50 million in assets and debts. Pennfield Transport estimated under $1 million in assets and debts. The petition was signed by Arnold Sumner, president. PEREGRINE PHARMACEUTICALS: Nov. 27 Deadline for Lead Plaintiff -------------------------------------------------------------- Bernstein Liebhard LLP disclosed of the deadline to file a motion for lead plaintiff in a securities class action concerning Peregrine Pharmaceuticals, Inc. The case, filed in the United States District Court, Central District of California, is on behalf of all persons who purchased Peregrine common stock between July 17, 2012 and September 26, 2012. Throughout the class period, the Company made materially false and misleading statements regarding the Company's Bavituximab Phase II Second-Line Non-Small Cell Lung Cancer Trial. Specifically, the Company made false and/or misleading statements and/or failed to disclose that there were major discrepancies between some patient sample test results and patient treatment code assignments in the Company's Phase II Trial. In order to join in the action to serve as lead plaintiff, parties must meet certain requirements set forth in the applicable law and file appropriate papers no later than Nov. 27, 2012. Contact the firm at: BERNSTEIN LIEBHARD LLP Joseph R. Seidman, Jr. Tel: (877) 779-1414 E-mail: seidman@bernlieb.com About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's CEO Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial is the regulated unit of the brokerage PFGBest. At a quickly-convened hearing on July 13, the bankruptcy judge authorized the Chapter 7 trustee to operate Peregrine's business on a "limited basis" through Sept. 13. PEREGRINE PHARMACEUTICALS: Has Non-Compliance Notice From NASDAQ ---------------------------------------------------------------- Peregrine Pharmaceuticals received a notice from The NASDAQ Stock Market indicating that the company's minimum bid price has fallen below $1.00 for 30 consecutive business days, and therefore, was not in compliance with NASDAQ Marketplace Rule 5550(a)(2). The company has been provided 180 calendar days, or until May 13, 2013, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the company's common stock must be at least $1.00 per share for a minimum of 10 consecutive business days. This notice does not impact the company's listing on The NASDAQ Stock Market at this time. If the company does not regain compliance within the initial 180- day period, but otherwise meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The NASDAQ Capital Market, except for the minimum bid price requirement, and notifies NASDAQ of its intention to take the necessary steps to cure the deficiency during the second compliance period, the company will be granted an additional 180 calendar days to regain compliance. If the company is not eligible for an additional compliance period, NASDAQ will notify the company that its securities will be subject to delisting. At that time, the company may appeal this determination to delist its securities to a Listing Qualification Panel. About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's CEO Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial is the regulated unit of the brokerage PFGBest. At a quickly-convened hearing on July 13, the bankruptcy judge authorized the Chapter 7 trustee to operate Peregrine's business on a "limited basis" through Sept. 13. PICCADILLY RESTAURANTS: Hires Jones Walker as Counsel ----------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Louisiana approved Piccadilly Restaurants, LLC, et al.'s request to employ Jones, Walker, Waechter, Poitevent, Carr re & Denegre, L.L.P. as counsel. The Debtors had engaged R. Patrick Vance, Elizabeth J. Futrell, Mark A. Mintz, Patrick L. McCune, and Tyler J. Rench. The Debtors' former counsel in the cases was the law firm of Gordon, Arata, McCollam, Duplantis & Eagan, LLC. According to the Debtors' case docket, on Sept. 26, 2012, the Court granted Gordon Arata's request to withdraw as attorney for the Debtor. Prepetition, Jones Walker represented Piccadilly Restaurants with regard to intellectual property issues. Since January 2011, Restaurants has paid Jones Walker $37,120 in attorney's fees and expenses. As of the Petition Date, Jones Walker has unpaid bills of $290, and additional unbilled time and expenses of $3,227. Jones Walker has agreed to waive both unpaid bill as part of the application. The Debtors note Gordon Arata was paid a retainer of $200,000, which was designed to secure the payment of services performed and reimburse expenses. Jones Walker's sole expectation for a retainer is that the remaining amount of the retainer will be transferred to Jones Walker to be held as Jones Walker's retainer. To the best of the Debtors' knowledge, Jones Walker is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Piccadilly Restaurants Piccadilly Restaurants, LLC, and two affiliated entities sought Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos. 12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are Piccadilly Food Service, LLC, and Piccadilly Investments LLC. Piccadilly Restaurants, LLC, headquartered in Baton Rouge, Louisiana, is the largest cafeteria-style restaurant in the United States, with operations in 10 states in the Southeast and Mid- Atlantic regions. It is wholly owned by Piccadilly Investments, LLC. Piccadilly operates an institutional foodservice division through a wholly owned subsidiary, Piccadilly Food Service, LLC, servicing schools and other organizations. With a history dating back to 1944, the Company operates 81 restaurants at three owned and 78 leased locations. Then known as Piccadilly Cafeterias, Inc., the Company filed for Chapter 11 relief (Bankr. S.D. Fl. Case No. 03-27976) on Oct. 29, 2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A. represented the Debtor in the case. After Piccadilly declared bankruptcy under Chapter 11, but before its plan was submitted to the Bankruptcy Court for the Southern District of Florida, the Bankruptcy Court authorized Piccadilly to sell its assets to Yucaipa Cos., for about $80 million. In October 2004, the Bankruptcy Court confirmed the plan. In the 2012 petition, Piccadilly Restaurants estimated under $50 million in total assets and liabilities. Judge Robert Summerhays oversees the 2012 cases. Lawyers at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in New Orleans, serve as the 2012 Debtors' counsel. New York-based vulture fund Atalaya Administrative LLC, in its capacity as administrative agent for Atalaya Funding II, LP, Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya Special Opportunities Fund (Cayman) IV LP (Tranche B), the Debtors' prepetition secured lender, is represented in the case by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C.; and Patton Boggs, LLP. PICCADILLY RESTAURANTS: Postlethwaite Approved as Auditors ---------------------------------------------------------- Piccadilly Restaurants, LLC, sought and obtained approval from the U.S. Bankruptcy Court for the Western District of Louisiana to employ Postlethwaite & Netterville, PAC, as independent auditors, accountants and tax consultants. The hourly rates of Postlethwaite's personnel are: Candace E. Wright, a director of the Company $250 Kelly Hidalgo $220 Chelsea Marlborough $100 To the best of the Debtors' knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Piccadilly Restaurants Piccadilly Restaurants, LLC, and two affiliated entities sought Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos. 12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are Piccadilly Food Service, LLC, and Piccadilly Investments LLC. Piccadilly Restaurants, LLC, headquartered in Baton Rouge, Louisiana, is the largest cafeteria-style restaurant in the United States, with operations in 10 states in the Southeast and Mid- Atlantic regions. It is wholly owned by Piccadilly Investments, LLC. Piccadilly operates an institutional foodservice division through a wholly owned subsidiary, Piccadilly Food Service, LLC, servicing schools and other organizations. With a history dating back to 1944, the Company operates 81 restaurants at three owned and 78 leased locations. Then known as Piccadilly Cafeterias, Inc., the Company filed for Chapter 11 relief (Bankr. S.D. Fl. Case No. 03-27976) on Oct. 29, 2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A. represented the Debtor in the case. After Piccadilly declared bankruptcy under Chapter 11, but before its plan was submitted to the Bankruptcy Court for the Southern District of Florida, the Bankruptcy Court authorized Piccadilly to sell its assets to Yucaipa Cos., for about $80 million. In October 2004, the Bankruptcy Court confirmed the plan. In the 2012 petition, Piccadilly Restaurants estimated under $50 million in total assets and liabilities. Judge Robert Summerhays oversees the 2012 cases. Lawyers at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in New Orleans, serve as the 2012 Debtors' counsel. New York-based vulture fund Atalaya Administrative LLC, in its capacity as administrative agent for Atalaya Funding II, LP, Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya Special Opportunities Fund (Cayman) IV LP (Tranche B), the Debtors' prepetition secured lender, is represented in the case by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C.; and Patton Boggs, LLP. PICCADILLY RESTAURANTS: Court OKs BMC Group as Claims Agent ----------------------------------------------------------- Piccadilly Restaurants, LLC, and its affiliates sought and obtained approval from the Bankruptcy Court to employ BMC Group, Inc., as claims agent, noticing agent and balloting agent, nunc pro tunc to Oct. 10, 2012. BMC may provide these services: (a) prepare, serve or publish notices or other pleadings in the Chapter 11 Case; (b) maintain copies of all proofs of claim and proofs of interest filed in the bankruptcy cases; (c) assist the Debtors' counsel with the administrative management, reconciliation and resolution of claims in the Chapter 11 Case; (d) if requested by the Court, create and maintain the official claims register(s) in the Chapter 11 Case; (e) receive and record all transfers of claims pursuant to Bankruptcy Rule 3001(e) in the Chapter 11 Case; (f) maintain an up-to-date mailing list for all entities who have filed proofs of claim and/or requests for notices in the Chapter 11 Case; (g) print, mail and tabulate ballots for purposes of plan voting in the Chapter 11 Case; (h) assist with the preparation and maintenance of the Debtors' Schedules of Assets and Liabilities, Statements of Financial Affairs and other master lists and databases of creditors, assets and liabilities in the Chapter 11 Case; (i) assist with the production of reports, exhibits and schedules of information or use by the Debtors, its counsel, or to be delivered to the Court, the Clerk's Office, the U.S. Trustee or third parties in the Chapter 11 Case; (g) provide other technical and document management services of a similar nature requested by the Debtors, its counsel, or in the Clerk's office; (k) facilitate or perform distributions, as and to the extent approved by the Court; and (l) assist the Debtors and its counsel with all analyses and/or collections of avoidance actions pursuant to Chapter 5 of the United States Bankruptcy Code. To the best of the Debtors' knowledge, BMC is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Piccadilly Restaurants Piccadilly Restaurants, LLC, and two affiliated entities sought Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos. 12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are Piccadilly Food Service, LLC, and Piccadilly Investments LLC. Piccadilly Restaurants, LLC, headquartered in Baton Rouge, Louisiana, is the largest cafeteria-style restaurant in the United States, with operations in 10 states in the Southeast and Mid- Atlantic regions. It is wholly owned by Piccadilly Investments, LLC. Piccadilly operates an institutional foodservice division through a wholly owned subsidiary, Piccadilly Food Service, LLC, servicing schools and other organizations. With a history dating back to 1944, the Company operates 81 restaurants at three owned and 78 leased locations. Then known as Piccadilly Cafeterias, Inc., the Company filed for Chapter 11 relief (Bankr. S.D. Fla. Case No. 03-27976) on Oct. 29, 2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A. represented the Debtor in the case. After Piccadilly declared bankruptcy under Chapter 11, but before its plan was submitted to the Bankruptcy Court for the Southern District of Florida, the Bankruptcy Court authorized Piccadilly to sell its assets to Yucaipa Cos., for about $80 million. In October 2004, the Bankruptcy Court confirmed the plan. In the 2012 petition, Piccadilly Restaurants estimated under $50 million in total assets and liabilities. Judge Robert Summerhays oversees the 2012 cases. Lawyers at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in New Orleans, serve as the 2012 Debtors' counsel. New York-based vulture fund Atalaya Administrative LLC, in its capacity as administrative agent for Atalaya Funding II, LP, Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya Special Opportunities Fund (Cayman) IV LP (Tranche B), the Debtors' prepetition secured lender, is represented in the case by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C.; and Patton Boggs, LLP. PICCADILLY RESTAURANTS: Court Hires J. Cornish as Consultant ------------------------------------------------------------ Piccadilly Restaurants, LLC, and its affiliates sought and obtained approval from the Bankruptcy Court for authorization to employ Jeffrey L. Cornish, as their consultant nunc pro tunc to the Petition Date. Mr. Cornish will perform the same services that he performed before the Petition Date; namely, advice, analyses, and recommendations with respect to operations, marketing, labor scheduling, real property lease renegotiations, restructurings, asset sales, and the like. The Consultant is performing many of the functions of Chief Financial Officer and Controller of the Debtors. Mr. Cornish is familiar with the Debtors' businesses and financial affairs and is well-qualified to provide the services required by the Debtor in this Chapter 11 Case. Prior to the Petition Date, the provided the Consulting Services to the Debtors since July 2012, as provided for in the Consulting Agreement. Mr. Cornish will receive $4,000 per week for his services. In providing prepetition services to the Debtors, the Consultant has become well-acquainted with the Debtors' financial systems, business, and operational difficulties, attributes and other related matters. Accordingly, the Consultant has developed significant experience and expertise regarding the Debtors' businesses that will assist it in providing effective and efficient services in the Chapter 11 Case. To the best of the Debtors' knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Piccadilly Restaurants Piccadilly Restaurants, LLC, and two affiliated entities sought Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos. 12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are Piccadilly Food Service, LLC, and Piccadilly Investments LLC. Piccadilly Restaurants, LLC, headquartered in Baton Rouge, Louisiana, is the largest cafeteria-style restaurant in the United States, with operations in 10 states in the Southeast and Mid- Atlantic regions. It is wholly owned by Piccadilly Investments, LLC. Piccadilly operates an institutional foodservice division through a wholly owned subsidiary, Piccadilly Food Service, LLC, servicing schools and other organizations. With a history dating back to 1944, the Company operates 81 restaurants at three owned and 78 leased locations. Then known as Piccadilly Cafeterias, Inc., the Company filed for Chapter 11 relief (Bankr. S.D. Fl. Case No. 03-27976) on Oct. 29, 2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A. represented the Debtor in the case. After Piccadilly declared bankruptcy under Chapter 11, but before its plan was submitted to the Bankruptcy Court for the Southern District of Florida, the Bankruptcy Court authorized Piccadilly to sell its assets to Yucaipa Cos., for about $80 million. In October 2004, the Bankruptcy Court confirmed the plan. In the 2012 petition, Piccadilly Restaurants estimated under $50 million in total assets and liabilities. Judge Robert Summerhays oversees the 2012 cases. Lawyers at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in New Orleans, serve as the 2012 Debtors' counsel. New York-based vulture fund Atalaya Administrative LLC, in its capacity as administrative agent for Atalaya Funding II, LP, Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya Special Opportunities Fund (Cayman) IV LP (Tranche B), the Debtors' prepetition secured lender, is represented in the case by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C.; and Patton Boggs, LLP. PICCADILLY RESTAURANTS: Files Schedules of Assets and Liabilities ----------------------------------------------------------------- Piccadilly Restaurants, LLC, filed with the Bankruptcy Court for the Western District of Louisiana its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $3,285,000 B. Personal Property $31,667,780 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $22,800,000 E. Creditors Holding Unsecured Priority Claims $244,408 F. Creditors Holding Unsecured Non-priority Claims $8,956,520 ----------- ----------- TOTAL $34,952,780 $32,000,929 About Piccadilly Restaurants Piccadilly Restaurants, LLC, and two affiliated entities sought Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos. 12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are Piccadilly Food Service, LLC, and Piccadilly Investments LLC. Piccadilly Restaurants, LLC, headquartered in Baton Rouge, Louisiana, is the largest cafeteria-style restaurant in the United States, with operations in 10 states in the Southeast and Mid- Atlantic regions. It is wholly owned by Piccadilly Investments, LLC. Piccadilly operates an institutional foodservice division through a wholly owned subsidiary, Piccadilly Food Service, LLC, servicing schools and other organizations. With a history dating back to 1944, the Company operates 81 restaurants at three owned and 78 leased locations. Then known as Piccadilly Cafeterias, Inc., the Company filed for Chapter 11 relief (Bankr. S.D. Fl. Case No. 03-27976) on Oct. 29, 2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A. represented the Debtor in the case. After Piccadilly declared bankruptcy under Chapter 11, but before its plan was submitted to the Bankruptcy Court for the Southern District of Florida, the Bankruptcy Court authorized Piccadilly to sell its assets to Yucaipa Cos., for about $80 million. In October 2004, the Bankruptcy Court confirmed the plan. In the 2012 petition, Piccadilly Restaurants estimated under $50 million in total assets and liabilities. Judge Robert Summerhays oversees the 2012 cases. Lawyers at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in New Orleans, serve as the 2012 Debtors' counsel. New York-based vulture fund Atalaya Administrative LLC, in its capacity as administrative agent for Atalaya Funding II, LP, Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya Special Opportunities Fund (Cayman) IV LP (Tranche B), the Debtors' prepetition secured lender, is represented in the case by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C.; and Patton Boggs, LLP. PINNACLE AIRLINES: Court Gives Roadmap for New Pilots Contract -------------------------------------------------------------- Pinnacle Airlines Corp.'s (PNCLQ) wholly owned subsidiary, Pinnacle Airlines Inc., disclosed that, in accordance with Section 1113 of the United States Bankruptcy Code, the United States Bankruptcy Court for the Southern District of New York has issued a ruling providing Pinnacle Airlines and the Air Line Pilots Association (ALPA), the legal representative of the Pinnacle Airlines pilot group, a clear path to a consensual agreement. The Court noted three "very limited exceptions" that prevented it from granting Pinnacle's motion at this time, characterizing them as "relatively easy to fix." The court concluded that significant modifications to the CBA are needed. "Today's ruling gives Pinnacle a brief opportunity to reach an agreement that will provide the savings we need," said John Spanjers, president and CEO of Pinnacle Airlines Corp. "Although the Court did not approve our proposed modifications in full, the Court gave the parties a clear road map to arrive at cost savings necessary for Pinnacle to emerge from bankruptcy as a viable, competitive company. We are hopeful that the Court's decision will facilitate a consensual resolution, and we will continue to devote every effort to that goal. Pinnacle continues to face severe financial challenges requiring urgent cost savings, but we now believe there is a path to achieving a competitive cost structure necessary to survive in our challenging industry." 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. PURADYN FILTER: Delays Form 10-Q for Third Quarter -------------------------------------------------- Puradyn Filter Technologies Incorporated notified the U.S. Securities and Exchange Commission it will be late in filing its quarterly report on Form 10-Q for the period ended Sept. 30, 2012. Additional time is required to insure that a complete and accurate filing is submitted. About Puradyn Filter Boynton Beach, Fla.-based Puradyn Filter Technologies Incorporated (OTC BB: PFTI) designs, manufactures and markets the puraDYN‹¨«' Oil Filtration System. The Company's balance sheet at June 30, 2012, showed $1.4 million in total assets, $9.8 million in total liabilities, and a stockholders' deficit of $8.4 million. As reported in the TCR on April 10, 2012, Webb and Company, P.A., in Boynton Beach, Florida, expressed substantial doubt about Puradyn'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, its total liabilities exceed its total assets, and it has relied on cash inflows from an institutional investor and current stockholder. PVH CORP: Moody's Confirms 'Ba2' CFR/PDR; Outlook Stable -------------------------------------------------------- Moody's Investors Service confirmed PVH Corp.'s Corporate Family and Probability of Default Ratings at Ba2. Moody's also confirmed the ratings assigned to the company's various debt instruments as detailed below. Moody's assigned a Ba1 rating to the company's proposed $3.825 billion senior secured bank credit facilities that will be used to finance the acquisition of Warnaco Group, Inc., to refinance existing debt of PVH and for general corporate purposes. The ratings assigned to the proposed bank facilities are subject to receipt and review of final documentation. The rating outlook is stable. The rating actions conclude the review for downgrade of PVH which commenced on October 31, 2012. The following ratings were confirmed: Corporate Family Rating at Ba2 Probability of Default Rating at Ba2 $100 million senior secured bonds due 2023 at Ba1 (LGD 3, 33% from LGD 2, 28%) $600 million senior unsecured notes due 2020 at Ba3 (LGD 5, 85% from LGD 5,81%) Senior unsecured shelf rating at (P) Ba3 The following ratings were confirmed, and are expected to be withdrawn upon repayment following closing of the new credit facilities: $450 million senior secured revolving credit facility due 2016 at Ba1 (LGD 2, 28%) $691 million senior secured term loan A due 2016 at Ba1 (LGD 2, 28%) $413 million senior secured term loan B due 2016 at Ba1 (LGD 2, 28%) The following ratings were assigned: $750 million five-year senior secured revolving credit facility at Ba1 (LGD 3, 33%) $1.2 billion five-year senior secured term loan A at Ba1 (LGD 3, 33%) $1.875 billion seven-year senior secured term loan B at Ba1 (LGD 3, 33%) Ratings Rationale The confirmation of PVH's Ba2 Corporate Family Rating reflects Moody's view that the company's proposed acquisition of Warnaco will significantly strengthen its overall business profile. The transaction will provide PVH with greater control of the Calvin Klein brand and will also enable the company to further expand its global presence, notably through Warnaco's meaningful operating presence in Latin America and China. Moody's also expects the company will be able to successfully integrate the acquired Warnaco business as the substantial majority of Warnaco's revenues will be related to the Calvin Klein brand. Moody's also considers PVH's track record of successful integration, evidenced by its success integrating the May 2010 acquisition of Tommy Hilfiger. While initial leverage is expected to be high, Moody's expects the company will make tangible progress deleveraging the balance sheet over the next 12 to 18 months such that credit metrics will improve to levels appropriate for the Ba2 rating category. Moody's expects PVH to reduce its existing debt by more than $200 million in the second half of 2012 and that during 2013 the company should reduce debt by a further $400 million from cash flow and utilization of the combined company's excess cash balances. The Ba1 rating assigned to the company's proposed $3.825 billion senior secured credit facilities reflects their first priority lien in substantially all domestic assets of PVH as well as the pledge of approximately 66% of the stock of its direct foreign subsidiaries. The Ba1 rating also reflects the meaningful level of unsecured debt in the company's capital structure including its existing $600 million senior unsecured notes and the intention of PVH to issue an additional $500 million of unsecured debt. Moody's expects to withdraw ratings on PVH's existing senior secured bank credit facilities upon closing of these new facilities. PVH's Ba2 rating reflects the company's strong market position supported by its ownership of two of the largest global fashion brands -- Tommy Hilfiger and Calvin Klein. The rating reflects the global presence of these two large brands and expectations that operating margins of these business will remain solidly in the double digit range. While the combined company has a meaningful presence in Europe, Moody's believes there are still meaningful organic growth opportunities that can offset weak economic conditions in those markets. PVH's heritage businesses-- comprised primarily of PVH's moderate sportswear brands and dress furnishings business as well as Warnaco's heritage intimate apparel and Speedo businesses -- have lower organic growth opportunities, but generate high returns on capital and stable cash flows. The rating takes into consideration the higher level of debt following this transaction as well as Moody's expectations the company will utilize free cash flow to reduce debt. The stable outlook reflects expectations that PVH will successfully integrate the Warnaco acquisition and that free cash flow will be used to reduce debt. Moody's does not anticipate any material acquisition activity, beyond modest investments in JV's and re-acquisition of smaller licenses consistent with historical practice. Ratings could be upgraded if the company makes progress integrating the Warnaco acquisition while also reducing absolute debt levels. The company would also need to demonstrate continued stability in operating performance in the face of weak economic conditions in Europe. Quantitatively, ratings could be upgraded if debt/EBITDA was sustained below 3.75x and interest coverage exceeded 3.25 times. Ratings could be lowered if the company is unable to make progress reducing debt/EBITDA below 4.25 times within 12 to 18 months from closing of the acquisition or the company's expected very good liquidity profile were to weaken. This would most likely be the case if the Warnaco integration experiences unexpected issues, or if economic conditions in key markets such as Europe weaken beyond Moody's current expectations. The principal methodology used in rating PVH Corp. was the Global Apparel Industry Methodology published in May 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. QBEX ELECTRONICS: Hiring GrayRobinson as Bankruptcy Counsel ----------------------------------------------------------- QBEX Electronics Corporation Inc. filed papers in Court to employ GrayRobinson P.A. as bankruptcy counsel. The firm's Robert A. Schatzman will lead the engagement. The firm will, among others, represent the Debtor in negotiations with its creditors in the preparation of a bankruptcy plan. The firm attests it does not hold or represent any interest adverse to the Debtor's estates, and is "disinterested" as that term is defined in 11 U.S.C. Sec. 101(14). About QBEX QBEX Electronics Corporation, Inc., based in Miami, Florida, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 12-37551) on Nov. 15, 2012. Judge Robert A. Mark oversees the case. Robert A. Schatzman, Esq., and Steven J. Solomon, Esq., at GrayRobinson, P.A., serve as the Debtor's counsel. QBEX scheduled assets of $11,027,058 and liabilities of $8,246,385. The petitions were signed by Jorge E. Alfonso, president. Qbex Colombia, S.A., also sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 12-37558) on Nov. 15, listing $433,627 in assets and $5,792,217 in liabilities. QBEX ELECTRONICS: Wants to Use Bank Leumi's Cash Collateral ----------------------------------------------------------- QBEX Electronics Corporation Inc. seek interim and final orders authorizing it to use cash collateral of its prepetition lender. QBEX owes $3.68 million, plus unpaid accrued interest, costs and attorneys' fees, under a 2006 revolving line of credit with Bank Leumi USA. The bank asserts a first priority perfected security interest in the Debtor's property. QBEX said it has not reviewed the line of credit or any of the related documents that give rise to any claim the bank has against the Debtor. QBEX said it reserves the right to reconsider any position pertaining to the validity, priority or extent of any lien claimed by the bank against the Debtor's estate. A hearing on the request was slated for Nov. 19. About QBEX QBEX Electronics Corporation, Inc., based in Miami, Florida, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 12-37551) on Nov. 15, 2012. Judge Robert A. Mark oversees the case. Robert A. Schatzman, Esq., and Steven J. Solomon, Esq., at GrayRobinson, P.A., serve as the Debtor's counsel. QBEX scheduled assets of $11,027,058 and liabilities of $8,246,385. The petitions were signed by Jorge E. Alfonso, president. Qbex Colombia, S.A., also sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 12-37558) on Nov. 15, listing $433,627 in assets and $5,792,217 in liabilities. QUIKSILVER INC: Moody's Affirms 'Caa1' Rating on $400MM Notes ------------------------------------------------------------- Moody's Investors Service revised Quiksilver Inc.'s outlook to stable from positive following recent negative operating trends. Gross margins and operating expenses have increased as a percentage of sales over the first three quarters of 2012 after being pressured by an increasingly promotional environment in Europe and Australia which account for more that 40% of Quiksilver's sales and high cotton and polyester prices which has depressed gross margins. The recent underperformance has resulted in significant increases in the company's leverage ratio which began this year at 4.7x and is currently 5.7x Debt/EBITDA with interest coverage of 1.3x as of July 2012. Although declining cotton prices should benefit the company over the next few quarters, the economic environment will remain a headwind as the company contends with elevated promotional activity. The downgrade of the Senior Unsecured Euro notes reflects the increased reliance of Quiksilver on unsecured working capital credit facilities in Europe and Asia. The following ratings were affirmed and LGD point estimates revised: Corporate Family Rating at B2 Probability of Default Rating at B2 $400 million 6 7/8% senior unsecured notes due 2015 at Caa1 (LGD 5, 81% from LGD 5, 78%) Speculative Grade Liquidity rating at SGL-2 The following ratings were downgraded: Boardriders SA EUR 200 million senior unsecured notes due 2017 at B1 (LGD 3, 34%) from Ba3 (LGD 3 31%) RATINGS RATIONALE Quiksilver's B2 Corporate Family rating reflects the company's narrow focus into a highly fashion sensitive demographic. The discretionary nature of its product offering and its relatively higher price point leaves the company vulnerable to downturns in overall consumer spending and weakness in operating margins through 2012. Currently leverage of debt/EBITDA of 5.7x which is high for the rating category. The ratings are supported by its diverse portfolio of brands and geographic reach within the action sports market along with the company's good liquidity profile. The company has no major debt maturities until August 2014. The downgrade of the EUR200 million notes issued by Boardrider SA to B1 from Ba3 reflects the expected continued reliance on their European working capital credit facilities for additional external funding. The notes also benefit from structural seniority in Quiksilver's capital structure as well as the from domestic and foreign guarantees. The Caa1 rating for the $400 million senior unsecured notes due 2015 is two notches lower than the Quiksilver's B2 Corporate Family Rating which primarily reflects these notes junior position relative to the significant level of secured and structurally senior debt in the company's capital structure. Ratings could be downgraded if debt/EBITDA is maintained above 5.5 times over the next few quarters or EBITA/interest declines below 1.25 times. Any additional erosion in liquidity or failure to make progress in re-financing the American credit facilities maturing in 2014 could also result in a downgrade. Given recent weakness in operating performance there is no tolerance in the rating for more aggressive financial policies, such as debt financed acquisitions or other shareholder friendly actions. Given the actions an upgrade of the rating is unlikely, however ratings could be upgraded if Quiksilver is able to restore margins to historical levels while maintaining sales levels in the European and Southeast Asian markets. The company would also need to improve debt/EBITDA to the mid 4 times range and maintain a good liquidity profile. The principal methodology used in rating Quiksilver was the Global Apparel Industry Methodology published in May 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. RCP INVESTMENTS VI: Can't Sell Property Under Sec. 363(f) --------------------------------------------------------- Bankruptcy Judge William L. Stocks denied the request of RCP Investments VI, LLC, for a private sale of a residential real property located on Northernway Court in Durham, North Carolina, for $185,000, pursuant to Section 363(f) of the Bankruptcy Code. The property is subject to a deed of trust securing debt owed to TD Bank, N.A. The Court noted that a Plan of Liquidation was confirmed in the Debtor's Chapter 11 case on July 10, 2012. Although the confirmed Plan contains provisions dealing with the manner in which the Debtor's real estate is to be liquidated, the Debtor now seeks to ignore the Plan and proceed under Section 363 (f) . Having negotiated and agreed to the Plan treatment for TD Bank and obtained confirmation of the consensual Plan of Liquidation, the Court said the Debtor is bound by the terms of the Plan and may not resort to section 363 for relief that is contrary to the terms of the Plan. Otherwise, the Plan is illusory and the confidence of creditors and other parties in interest regarding the Chapter 11 process would be undermined, the judge said. The Court also noted that the $185,000 sale price will not fully satisfy TD Bank's allowed secured claim and is below the price specified in the agreed upon pricing strategy referred to in the Plan. Under the terms of the confirmed Plan, TD Bank has the right to approve or disapprove the proposed sale. TD Bank has declined to approve the sale and is within its rights to do so under the Debtor's confirmed Plan. Confirmation having occurred, Section 363 may not be invoked post-confirmation in order to proceed in a manner contrary to the terms of the Plan. A copy of the Court's Nov. 16, 2012 Opinion and Order is available at http://is.gd/YVoIrafrom Leagle.com. RCP Investments VI, LLC, based in Durham, North Carolina, filed for Chapter 11 bankruptcy (Bankr. M.D.N.C. Case No. 11-81357) on Aug. 21, 2011. Judge William L. Stocks oversees the case. Joseph E. Propst, Esq., at Jordan, Price, et al. PLLC, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets, and $500,001 to $1 million in debts. A list of the Company's two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ncmb11-81357.pdf The petition was signed by Theodore S. Royall, Jr., manager. RCP Investments VII, LLC, filed a separate Chapter petition on Aug. 21, 2011. RESIDENTIAL CAPITAL: Court Approves Sale to Ocwen and Walter ------------------------------------------------------------ The United States Bankruptcy Court, Southern District of New York, has approved the sale of the Residential Capital, LLC's (ResCap) mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation. The Court also approved the sale of ResCap's whole loan portfolio to Berkshire Hathaway. The case, number 12-12020 (MG), is presided over by the Honorable Judge Martin Glenn. "We are very pleased to have obtained the Court's approval as it has resulted in the best possible outcome for our creditors," said ResCap Chief Executive Officer Thomas Marano. "Working closely with Berkshire Hathaway and both Ocwen and Walter Investment, the ResCap management team will create a smooth transition for our employees and ensure the servicing transfer is as seamless as possible for homeowners." The Court-approved joint bid from Ocwen and Walter is a total purchase price of $3 billion. The Court-approved bid from Berkshire Hathaway is a purchase price of $1.5 billion for a loan portfolio made up of approximately 50,000 whole loans. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Ocwen Financial Corp. was given tentative permission from the bankruptcy judge Nov. 20 to buy the loan-servicing business owned by Residential Capital LLC. The judge also said he would approve sale of ResCap's remaining mortgage portfolio to Berkshire Hathaway Inc. As reported by the Troubled Company Reporter, 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. According to the Bloomberg report, most objections to the Ocwen sale were worked out. If there isn't agreement on how much ResCap must pay to cure payment defaults, there will be another hearing in December. The $2.1 billion in third-lien 9.625% secured notes due 2015 last traded on Nov. 15 for 103.5 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The $473.4 million of ResCap senior unsecured notes due April 2013 last traded on Nov. 15 for 24.5 cents on the dollar, according to Trace. Centerview Partners LLC and FTI Consulting are acting as financial advisors to ResCap. Morrison & Foerster LLP is acting as legal advisor to ResCap. Morrison Cohen LLP is advising ResCap's independent directors. 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. 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). ROTECH HEALTHCARE: Incurs $12.8 Million Net Loss in Third Quarter ----------------------------------------------------------------- Rotech Healthcare Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $12.86 million on $113.78 million of net revenues for the three months ended Sept. 30, 2012, compared with a net loss of $2.05 million on $122.40 million of net revenues for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $43.73 million on $347.28 million of net revenues, compared with a net loss of $7.71 million on $365.35 million of net revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities and a $346.22 million total stockholders' deficiency. "Patient growth for our key product lines continues to be good, and our efforts to reduce adjustments for contractuals and bad debt are beginning to have a positive impact," said Philip Carter, president and chief executive officer. "Planning for 2013 is well underway to position the Company for improved financial performance for the year ahead," Mr. Carter added. Bankruptcy Warning "In the event that we lack the ability to generate adequate cash to support our ongoing operations, we may need to access the financial markets by seeking additional debt or equity financing. As disclosed in our Risk Factors, there may be uncertainty surrounding our ability to access capital in the marketplace. The Company may be unable to secure the $15.0 million in additional financing permitted to it under the Indentures for our Senior Secured Notes and our Senior Second Lien Notes or to refinance its indebtedness on commercially reasonable terms, in which case it would need to identify alternative options to address its current and prospective credit situation, such as a sale of the Company or other strategic transaction, or a transformative transaction, such as a possible restructuring or reorganization of the Company's operations which could include filing for bankruptcy protection." A copy of the Form 10-Q is available for free at: http://is.gd/aAWKoa About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. * * * As reported by the TCR on Aug. 21, 2012, Standard & Poor's Ratings Services lowered its rating on Orlando, Fla.-based Rotech Healthcare Inc. to 'CCC-' from 'B'. "The ratings reflect Rotech's highly leveraged financial risk profile, dominated by its weak liquidity position, high debt burden and overall sensitivity of credit metrics to the uncertain reimbursement environment," said Standard & Poor's credit analyst Tahira Wright. In the Aug. 30, 2012, edition of the TCR, Moody's Investors Service downgraded Rotech Healthcare, Inc.'s Corporate Family Rating to Caa3 from B3 and Probability of Default Rating to Caa3 from B2. This rating action is based on Moody's expectation that Rotech's liquidity and credit metrics -- which are already weak -- will deteriorate further over the next few quarters. Moody's expects continued top-line pressure from Medicare reimbursement cuts in 2013. ROTHSTEIN ROSENFELDT: Lawsuit vs. Jeweler to Proceed to Trial ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports U.S. Bankruptcy Judge Raymond B. Ray in Fort Lauderdale answered the question: If a Ponzi scheme operator pays $9.9 million for jewelry, must the jeweler pay the money back or was it a good-faith exchange protecting the jeweler from a lawsuit by the bankruptcy trustee? According to the report, Judge Ray ruled that the jeweler might have to give back the money, depending on how the facts turn out at trial. The dispute arose in the bankruptcy of the law firm once run by Scott Rothstein, a confessed Ponzi scheme operator. The report recounts the bankruptcy trustee filed a $9.9 million suit in October 2011 against Levinson & Co., a high-end jeweler in Fort Lauderdale. The trustee alleges that all the money used to purchase jewelry over four years was stolen from investors. The jeweler filed a summary judgment motion saying he can't be liable because he gave equal value for the payments. Judge Ray, the report discloses, said there are disputed issues of fact so the jeweler can't get off the hook so easily. Mr. Rothstein himself testified that he participated with Levinson in "off the books cash transactions involving loose diamonds and stones," according to Ray's opinion on Nov. 14. The judge said the allegations, if proven true at a later trial, could prevent the jeweler from raising a good faith defense and might constitute notice to Levinson that Mr. Rothstein was engaged in fraud. The jeweler argued that the money he received came from Mr. Rothstein's personal account and therefore wasn't money belonging to the law firm, the bankrupt entity. Since all of Mr. Rothstein's personal money came from the firm, Judge Ray said he might be able at trial to collapse all the transactions into one, making Levinson the direct recipient of stolen money. "The Rothstein-Levinson story has a moral. Anyone who has the misfortune of doing business with a Ponzi scheme operator can expect to be sued, as Dan Marino, a retired quarterback for the Miami Dolphins, found out the hard way," Mr. Rochelle points out. The Rothstein trustee sued Marino's foundation, seeking to recover $259,000 in charitable contributions. Judge Ray dismissed the suit in late October. The lawsuit is Stettin v. Levinson & Co. (In re Rothstein Rosenfeldt Adler PA), 11-2687, U.S. Bankruptcy Court, Southern District of Florida (Fort Lauderdale). About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. The official committee of unsecured creditors appointed in the case filed a bankruptcy plan and disclosure statement on Aug. 17. The plan was filed and signed by the Committee attorney, Michael Goldberg of Akerman Senterfitt, and not by the court-appointed trustee Herbert Stettin. The plan calls for the creation of a liquidating trust and four classes of claimants. A date for confirmation of the plan was left blank. SAFENET: Moody's Affirms 'B2' Corp. Family Rating; Outlook Stable ----------------------------------------------------------------- Moody's Investors Service affirmed SafeNet's B2 corporate family rating (CFR) and revised the ratings for the company's first lien credit facilities to Ba2 from B1, and the rating for its second lien credit facility to B3 from Caa1. The ratings actions were prompted by SafeNet's plans to divest its Government Solutions (GS) business and use the net proceeds to repay a substantial portion of its first lien term loans. The outlook for ratings is stable. Ratings Rationale SafeNet expects to apply the proceeds, net of expected taxes and transaction fees, from the sale of its GS business to pare total debt by about 50%. A portion of the proceeds will be held in escrow and would be utilized to pay debt upon release of funds from escrow. SafeNet's GS business has experienced declining revenues since 2009 due to the company's mature products and weak demand by the U.S. Department of Defense and its agencies . The proposed transaction will not alter the company's total debt-to- EBITDA leverage (approximately 4.6x, Moody's adjusted) and the company will divest a business with uncertain prospects. However, the GS business had strong EBITDA margins relative to the retained businesses and the GS businesses has historically supported SafeNet's credit profile due to the high barriers to entry in the classified government data products market. SafeNet's continuing operations will comprise Data Protection and software rights management (SRM) segments. Although SafeNet's user authentication products in the data protection segment and its software rights management offering are well-regarded, the company's competitive risks will increase as it will derive all of its revenues from the intensely competitive enterprise data protection and SRM markets. The carve-out of a high margin GS business will reduce the company's flexibility to invest in business or pursue small acquisitions. However, Moody's affirmed SafeNet's B2 CFR to reflect the company's moderate financial leverage and good growth prospects for the company's remaining businesses, especially the enterprise data protection segment which represents a fast growing market. The rating is supported by SafeNet's good projected levels of free cash flow in the low-to-mid teen percentages of total debt, which will be bolstered by the expiry of an interest rate hedging agreement. The B2 rating is constrained by SafeNet's limited operating scale and product portfolio. The rating additionally considers propensity for high financial risk tolerance by the company's financial sponsors. Moody's revised SafeNet's debt instrument ratings upward to reflect improved recovery prospects for the first and second lien credit facilities as a result of the proposed repayment of a substantial portion of first lien debt. Moody's could downgrade SafeNet's ratings if the company's liquidity weakens and anticipated free cash flow does not materialize. The rating could be downgraded if Moody's believes that SafeNet is unable to sustain total debt-to-EBITDA leverage below 5.5x and free cash flow/Debt ratio remains below 5% (both metrics Moody's adjusted). Given the company's shareholder-oriented policies a ratings upgrade is unlikely in the next 12 to 18 months. However, Moody's could upgrade SafeNet's ratings if the company demonstrates sustainable earnings growth driven by strong revenue growth and if it could maintain leverage below 4.0x (Moody's adjusted) and free cash flow/total debt in excess of 15%, incorporating potential for debt-financed distributions to shareholders and ongoing modest- sized acquisitions. Moody's has taken the following rating actions: Issuer: SafeNet, Inc. Corporate Family Rating -- affirmed at B2 Probability of Default Rating -- affirmed at B2 $25 million first lien secured revolving credit facility due April 2013 -- Upgraded to Ba2 (LGD2, 13%) from B1 (LGD3, 32%) $221 million (originally $250 million) first lien secured credit facility due April 2014 -- Upgraded to Ba2 (LGD2, 13%) from B1 (LGD3, 32%) $131 million second lien secured credit facility due April 2015 -- Upgraded to B3 (LGD4, 64%) from Caa1 (LGD 5, 81%) Outlook action: Outlook: Stable The principal methodology used in rating SafeNet was the Global Software 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 Belcamp, MD, SafeNet provides data security solutions to government and enterprise customers. Pro forma for the proposed divestiture of GS business SafeNet reported approximately $335 million in revenue in the LTM June 2012 period. Funds affiliated to private equity firm Vector Capital own majority interest in SafeNet. SCS HOLDINGS: S&P Raises Rating on $260-Mil. Term Loan to 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services raised the issue-level ratings on San Antonio, Texas-based SCS Holdings I Inc.'s ("Sirius") proposed $260 million senior secured term loan B (reduced from $340 million) to 'BB-' from 'B+'. "We revised the recovery rating on this debt to '2' from and '3'. The '2' recovery rating indicates our expectations for substantial (70% to 90%) recovery in the event of payment default. We also affirmed our 'B+' corporate credit rating on Sirius. The outlook is stable," S&P said. "The rating changes reflect the improved recovery prospects resulting from a lower amount of senior secured debt in the capital structure," said Standard & Poor's credit analyst Martha Toll-Reed. "The company intends to use proceeds of the debt issuance to redeem 54% of its existing preferred equity and all accrued dividends, and to repay existing debt outstanding." The ratings on SCS Holdings I Inc. and its wholly owned subsidiary, Sirius Computer Solutions Inc., reflect the company's "weak" business risk profile and "aggressive" financial risk profile, incorporating the proposed recapitalization and redemption of preferred stock, and S&P's view that the company's private equity ownership structure is likely to preclude sustained deleveraging. "Sirius provides its customers hardware, software, and services that enable the use of mission-critical applications, including data storage, network security, network access, application development and web hosting. The U.S. computer solutions provider market is very fragmented and highly competitive. The company reported revenues of $885.6 million in fiscal 2011, up more than 40% from the prior year (including acquisitions). Sirius' weak business risk profile reflects the company's relatively narrow product base and geographic presence, with significant supplier concentration. Nevertheless, Sirius' market position as a national VAR with significant investments in sales and technical training provides a relative competitive advantage against smaller participants, and has enabled the company to gain market share. We anticipate flat-to-modest, year-over-year near-term revenue and EBITDA growth. Sirius' quarterly revenues and EBITDA are somewhat seasonal, and vulnerable to potential weakness in U.S. information technology (IT) spending. However, based on a history of effective cost management, we expect the company to maintain consistent annual EBITDA margins in the 8% to 9% range, which is good for its peer group," S&P said. "The outlook is stable, reflecting our expectation that Sirius will maintain consistent profitability, with modest free operating cash flow. A decline in IT spending, leading to increased competition and diminished operating earnings, with sustained leverage in excess of the mid-5x level or FOCF to debt approaching a mid-single-digit percentage could lead to lower ratings. Ratings upside is limited by our view that the company's ownership structure is likely to preclude sustained deleveraging," S&P said. SEARS HOLDINGS: Incurs $498 Million Net Loss in Oct. 27 Quarter --------------------------------------------------------------- Sears Holdings Corporation reported a net loss of $498 million on $8.85 billion of merchandise sales and services for the 13 weeks ended Oct. 27, 2012, compared with a net loss of $425 million on $9.40 billion of merchandise sales and services for the 13 weeks ended Oct. 29, 2011. For the 39 weeks ended Oct. 27, 2012, the Company reported a net loss of $437 million on $27.59 billion of merchandise sales and services, compared with a net loss of $743 million on $29.08 billion of merchandise sales and services for the 39 weeks ended Oct. 29, 2011. The Company's balance sheet at Oct. 27, 2012, showed $21.80 billion in total assets, $17.90 billion in total liabilities and $3.90 billion in total equity. Lou D'Ambrosio, Sears Holdings' chief executive officer and president, said, "For the 3rd quarter and year-to-date, we improved EBITDA, accelerated our strategic actions and generated significant cash by delivering on the actions we outlined at our Annual meeting. Our EBITDA improvement in the quarter came from some of our most important categories like Appliances, Apparel, and Home Services as we introduced new offers, honed pricing, effectively managed costs and implemented better inventory management. We did experience shortfalls, however, in categories like Grocery and Household and Consumer Electronics, and are taking actions to improve that performance." A copy of the press release is available for free at: http://is.gd/cxYljw About Sears Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's fourth largest broadline retailer with more than 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94% stake in Sears Canada and an 80.1% stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. SILVERSUN TECHNOLOGIES: Posts $102,800 Net Income in 3rd Quarter ---------------------------------------------------------------- Silversun Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $102,808 on $3.46 million of net total revenues for the three months ended Sept. 30, 2012, compared with a net loss of $14,141 on $2.37 million of net total revenues for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $939,414 on $9.44 million of net total revenues, compared with net income of $2.80 million on $7.82 million of net total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $3.07 million in total assets, $3.64 million in total liabilities, all current, and a $570,080 total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/EqhFHz About SilverSun Livingston, N.J.-based SilverSun Technologies, Inc., formerly known as Trey Resources, Inc., focuses on the business software and information technology consulting market, and is looking to acquire other companies in this industry. SWK Technologies, Inc., the Company's subsidiary and the surviving company from the acquisition and merger with SWK, Inc., is a New Jersey-based information technology company, value added reseller, and master developer of licensed accounting and financial software published by Sage Software. SWK Technologies also publishes its own proprietary supply-chain software, the Electronic Data Interchange (EDI) solution "MAPADOC." SWK Technologies sells services and products to various end users, manufacturers, wholesalers and distribution industry clients located throughout the United States, along with network services provided by the Company. As reported in the TCR on April 2, 2011, Friedman LLP, in East Hanover, NJ, expressed substantial doubt about Trey Resources, Inc.'s ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has incurred substantial accumulated deficits and operating losses, and at Dec. 31, 2010, has a working capital deficiency of approximately $5.1 million. SINOHUB INC: Scott+Scott Files Securities Class Action Lawsuit -------------------------------------------------------------- Scott+Scott LLP filed a class action complaint in the United States District Court for the Southern District of New York on behalf of purchasers of SinoHub, Inc. common stock during the period between May 17, 2010 and August 21, 2012, seeking remedies under the Securities Exchange Act of 1934. To serve as a lead plaintiff in the action, parties must move the Court no later than Jan. 21, 2013. Contact the firm at: SCOTT+SCOTT E-mail: scottlaw@scott-scott.com Tel: (800) 404-7770 (860) 537-5537 The securities class action charges SinoHub and certain of its officers and directors with violations of the Exchange Act. The Company, together with its subsidiaries, operates as an electronics company worldwide. The complaint charges that SinoHub maintained that its internal controls over financial reporting were effective. However, as evidenced by the Company's correspondence with the U.S. Securities and Exchange Commission regarding the Company's internal controls, Defendants knowingly or recklessly implemented, or ignored the existence of, ineffective internal controls which ultimately resulted in the use of improper accounting procedures and the overstatement of the Company's financial statements and future earnings potential. On May 16, 2011, to the surprise of investors, the Company announced it would be restating its Form 10-K for 2010 and Form 10-Qs for all three quarters in 2010 due to material misstatements of liabilities and expenses, and significant deficiencies in internal control. The market reacted negatively to the news and on May 16, 2011, SinoHub's stock price dropped from an opening price of $1.76 per share to a closing price of $1.36, a 23% decline in one trading day. Thereafter, on March 30, 2012, the Company released its Form 10-K Annual Report for 2011, which revealed that SinoHub had not experienced any revenue growth during the year. SinoHub's stock price responded accordingly, closing at $0.54 per share on March 30, 2012 after opening that day at $0.63 per share, a single day decline of 16%. The complaint alleges, however, SinoHub continued to represent in its Form 10-K for 2011 that the Company had remediated its internal control problems and that SinoHub's internal controls were now "effective." On August 14, 2012, the Company shocked investors when it announced that it would be unable to file its Quarterly Report on Form 10-Q for June 30, 2012 within the prescribed time period. The Company stated that it expected to file the report within an extension period. Upon the disclosure of this information, and over the next three trading days, SinoHub's stock declined approximately 26% on unusually high trading volume. Finally, on Aug 21, 2012, the last day of the Class Period, SinoHub announced that it would not file its Form 10-Q within the extension period as a result of a delay in the Company's retrieval of information requested by the Company's auditors to confirm prior-period sales. The Company announced results for the quarter ended June 30, 2012, stating that it had suffered a net loss of $2.7 million. Over the next three trading days SinoHub's stock price dropped by 20%. The Company's stock has now been delisted by the NYSE. SinoHub is headquartered in Shenzhen, People's Republic of China. SPORTS AUTHORITY: Moody's Withdraws 'B3' Rating on $630MM Loan -------------------------------------------------------------- Moody's Investors Service withdrew the B3 rating of the proposed $630 million term loan of the Sports Authority. The following rating was withdrawn: - Proposed $630 million senior secured term loan due 2019 at B3 (LGD4, 54%) The following ratings have been affirmed and LGD point estimates updated: - Corporate family rating at B3 - Probability of default rating at B3 - $295 million term loan due 2017 at B3 (LGD3, 45% from 44%) The outlook remains stable. The new term loan rating was withdrawn because the Sports Authority's proposed refinancing did not materialize. The dollar- for-dollar refinancing was leverage neutral but would have resulted in a meaningful reduction in interest expense given that the company would have paid off the more expensive subordinated notes (11.0% cash interest plus 0.5% PIK) with term debt. Without the refinancing, the company's interest expense reduction will be modest. Nonetheless, Moody's maintains a stable outlook as the company's strategic initiatives are expected to improve earnings. The Sports Authority has been lowering inventory levels, which will reduce the risk of markdowns and associated margin declines, a factor that will be particularly key as the company is in its peak winter selling season. The stable outlook reflects Moody's expectations that the company will continue to implement cost control initiatives and disciplined inventory management to minimize markdowns, while maintaining adequate liquidity. The stable outlook also incorporates expectations for flat-to-low single digit same store sales growth. Ratings could be downgraded if debt/EBITDA is sustained at or above 7.0 times or EBITA/interest expense remains at or below 1.0 times. Further, any deterioration in liquidity may result in a downgrade. The principal methodology used in rating The Sports Authority, Inc. was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. The Sports Authority, Inc., under The Sports Authority and S.A. Elite banners, is a full-line sporting goods retailer operating over 470 stores in 43 states. The company is owned by private equity firm Leonard Green & Partners, L.P. SPRINGS WINDOW: S&P Ups Rating on $356.5MM First-Lien Debt to 'B+' ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its issue-level ratings on Springs Window Fashions LLC's $356.5 million first-lien debt one notch to 'B+' (one notch above the corporate credit rating) from 'B'. "At the same time we revised the recovery ratings on this debt to '2', indicating our expectations for substantial (70% to 90%) recovery in the event of a payment default, from '3', reflecting the company's reduced debt levels from required amortization and an excess cash flow sweep," S&P said. "The 'B' corporate credit rating on Springs Window remains unchanged, as do the 'CCC+' issue-level ratings on the company's $125 million second-lien term loan. The recovery rating on the second-lien term debt remains '6', indicating our expectation for negligible (0% to 10%) recovery in the event of a payment default," S&P said. The ratings on Springs Window reflect S&P's view of the company's "highly leveraged" financial risk profile and "vulnerable" business risk profile. "We assess the company's financial policy as very aggressive, supported by a debt-financed dividend and highly leveraged capital structure. We estimate adjusted leverage remains high at about 5.1x at Sept. 30, 2012, compared with the low-3x area prior the dividend in May 2011. Springs Window's narrow business focus in the cyclical window coverings industry, customer concentration, and participation in an intensely competitive industry continue to contribute to the company's vulnerable business risk profile," S&P said. RATING LIST Springs Window Fashions LLC Corporate credit rating B/Stable/-- Issue rating raised; Recovery rating revised To From Springs Window Fashions LLC Senior secured $300 mil. term loan due 2017 B+ B Recovery rating 2 3 $56.5 mil. revolver due 2016 B+ B Recovery rating 2 3 ST. PAUL HOUSING AUTHORITY: Moody's Hikes Bond Ratings From 'Ba1' ----------------------------------------------------------------- Moody's Investors service has upgraded the rating on Housing and Redevelopment Authority of the City of Saint Paul, MN Multifamily Housing Revenue Bonds (GNMA Collateralized Mortgage Loan -- Winnipeg Apartments Project) Series 2007A to Aaa from Ba1. This rating affects $2,885,000 of outstanding debt. Rating Rationale In 2010, the bonds were downgraded to Ba1 from Aaa due to projected asset-to-debt ratio (otherwise known as "parity") insufficiencies that were expected to occur in the near future. Moody's recently identified however that the cash flow projections used in the 2010 rating action overstated the bond balance throughout the life of the program, and led to an incorrect calculation of parity as below 100% at a certain point in the future. Moody's has rectified this issue and adjusted the projections to accurately reflect the future performance of the bond program. Once these corrections were incorporated, cash flow projections demonstrated parity sufficiency throughout the life of the bonds which is consistent with a higher rating. Recent Developments Moody's published a Request For Comment on March 19, 2012 titled Proposed Changes to Methodology for Stand-Alone US Public Finance Housing Transactions with Mortgage Enhancements. Within it, Moody's proposed to cap at Aa1 the ratings of stand-alone housing transactions with semi-annual debt service payments secured by Ginnie Mae/Fannie Mae/Freddie Mac mortgage-backed securities (MBS) or Fannie Mae/Freddie Mac stand-by Credit Enhancement Instruments (CEI). If Moody's implements this change, the rating on these bonds may be downgraded to Aa1. WHAT COULD CHANGE THE RATING UP * Not applicable WHAT COULD CHANGE THE RATING DOWN * A downgrade to the US government * Projected or actual parity or cash flow insufficiencies * A change in methodology which assesses the credit profile of this bond program differently, as discussed in Proposed Changes to Methodology for Stand-Alone US Public Finance Housing Transactions with Mortgage Enhancements The principal methodology used in this rating was GNMA Collateralized Multifamily Housing Bonds published in June 2001. STALLION OILFIELD: S&P Rates $500MM Senior Secured Term Loan 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned issue-level and recovery ratings to Stallion Oilfield Holdings Inc.'s $500 million senior secured term loan facility due 2017. "The assigned issue rating on the term loan is 'B' (the same as the corporate credit rating). The recovery rating on this debt is '3', indicating our expectation of meaningful (50% to 70%) recovery in the event of default," S&P said. "The company intends to use proceeds to redeem the remaining $134 million outstanding on its existing 10.50% senior secured notes due 2015 and to pay a one-time cash dividend of $385 million to its direct equity holders. While the company is increasing the total amount of debt outstanding, its recovery rating still remains '3', although at the lower end of the '3' range," S&P said. "The ratings on Houston-based Stallion Oilfield Holdings Inc. (Stallion) reflect our assessment of the company's 'vulnerable' business risk and 'aggressive' financial risk. The ratings incorporate the company's participation in the highly cyclical North American oilfield services market and the company's relatively small scale. Ratings also reflect the current relatively good market conditions, moderate debt leverage, and low annual maintenance capital spending requirements," S&P said. RATINGS LIST Stallion Oilfield Holdings Inc. Corporate credit rating B/Stable/-- New Ratings $500 mil senior secured facility due 2017 B Recovery rating 3 T BANCSHARES: Reports $439,000 Net Income in Third Quarter ---------------------------------------------------------- T Bancshares, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $439,000 on $1.52 million of total interest income for the three months ended Sept. 30, 2012, compared with net income of $352,000 on $1.65 million of total interest income for the same period a year ago. For the nine months ended Sept. 30, 2012, the Company reported net income of $1.42 million on $4.46 million of total interest income, compared with a net loss of $1.15 million on $5.18 million of total interest income for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $128.95 million in total assets, $112.61 million in total liabilities and $16.33 million in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/MMiAPr About T Bancshares, Inc. T Bancshares, Inc., is a bank holding company headquartered in Dallas, Texas, offering a broad array of banking services through T Bank, N.A. The Company's principal markets include North Dallas, Addison, Plano, Frisco, Southlake and the neighboring Texas communities. T3 MOTION: Delays Form 10-Q for Third Quarter --------------------------------------------- The quarterly report of T3 Motion, Inc., on Form 10-Q for the quarter ended Sept. 30, 2012, could not be filed within the prescribed time period due to the fact that the Company was unable to finalize its financial results without unreasonable expense or effort. As a result, the Company could not solicit and obtain the necessary review of the Form 10-Q in a timely fashion prior to the due date of the report. About T3 Motion Costa Mesa, Calif.-based T3 Motion, Inc., develops and manufactures T3 Series vehicles, which are electric three-wheel stand-up vehicles that are directly targeted to the public safety and private security markets. After auditing the 2011 results, KMJ Corbin & Company LLP, in Costa Mesa, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant operating losses and has had negative cash flows from operations since inception, and at Dec. 31, 2011, has an accumulated deficit of $54.9 million. The Company reported a net loss of $5.50 million in 2011, compared with a net loss of $8.32 million in 2010. The Company's balance sheet at June 30, 2012, showed $2.85 million in total assets, $3.31 million in total liabilities and a $451,781 total stockholders' deficit. TALON THERAPEUTICS: Posts $40.5-Mil. Net Income in 3rd Quarter -------------------------------------------------------------- Talon Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $40.49 million for the three months ended Sept. 30, 2012, compared with a net loss of $706,000 for the same period a year ago. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $50.79 million, compared with a net loss of $17.17 million for the same period during the prior year. The Company does not expect to generate any revenue from product sales or royalties in 2012. The Company anticipates revenues beyond 2012 provided it is able to develop and commercialize its products, license its technology or enter into strategic partnerships. If the Company is unsuccessful, its ability to generate future revenues will be significantly diminished. The Company's balance sheet at Sept. 30, 2012, showed $6.61 million in total assets, $57.93 million in total liabilities, $44.94 million in redeemable convertible preferred stock, and a $96.25 million total stockholders' deficit. As of Sept. 30, 2012, the Company had cash and cash equivalents of $5.6 million. "FDA accelerated approval of Marqibo (vinCRIStine sulfate LIPOSOME injection) is Talon's most important achievement to date," stated Steven R. Deitcher, M.D., president, chief executive officer and Board Member of Talon. "The patient population Marqibo will be serving is in need of new treatment options. We are in the process of evaluating a number of paths to commercialize Marqibo, including a potential strategic transaction, licensing agreement, or a Talon launch." A copy of the Form 10-Q is available for free at: http://is.gd/Rys8hW About Talon Therapeutics Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc. (TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical company dedicated to developing and commercializing new, differentiated cancer therapies designed to improve and enable current standards of care. The company's lead product candidate, Marqibo, potentially treats acute lymphoblastic leukemia and lymphomas. The Company has additional pipeline opportunities some of which, like Marqibo, improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity. Effective Dec. 1, 2010, Hana Biosciences Inc. changed its name to Talon Therapeutics Inc. The name change was effected by merging Talon Therapeutics, Inc., a wholly-owned subsidiary of the Company, with and into the Company, with the Company as the surviving corporation in the merger. The Company reported a net loss of $18.82 million for the year ended Dec. 31, 2011, compared with a net loss of $25.98 million during the prior year. BDO USA, LLP, in San Jose, California, issued a "going concern" qualification on the financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and net capital deficiency that raise substantial doubt about the Company's ability to continue as a going concern. TITANIUM GROUP: Zili Sells 20MM Restricted Shares to Snow Hill -------------------------------------------------------------- Zili Industrial Co Limited, Snow Hill Developments Limited, Titanium Group Ltd., and Cancare Investment limited, entered into a Share Exchange Agreement, wherein Zili agrees to sell to Snow Hill 20,000,000 restricted shares of the common stock, $0.01 par value, representing in aggregate of 20% of the total issued and outstanding shares of Titanium owned by Zili in Titanium in exchange for 2,500,000 shares of Cancare Investment representing in aggregate 20% of the total issued and outstanding equity securities of Cancare Investment owned by Snow Hill in Cancare Investment, a Hong Kong company unrelated to Titanium. Concurrent with the share exchange transaction, Zili transferred the remaining 17,700,000 shares of common stock it held in the Company to Huabao Asia Limited, representing in aggregate 17.7% of the issued and outstanding shares of the Company's common stock. Prior to the transactions, Huabao held an approximately in aggregate 52.63% shares of the outstanding common stock of the Company. The transferred shares from Zili to Huabao constitutes approximately 17.7% of the issued and outstanding shares of the Company's common stock, resulting in Huabao holding approximately 70.33% of the Company's issued and outstanding shares of common stock. The Transferred shares from Zili to Snow Hill constitutes approximately 20% of the issued and outstanding shares of the Company's common stock, resulting in Snow Hill holding approximately 20% of the Company's issued and outstanding shares of common stock post the transaction. A copy of the Stock Exchange Agreement is available at: http://is.gd/T0Z5Sb About Titanium Group Wanchai, Hong Kong-based Titanium Group Limited, through its wholly owned subsidiary Shenzhen Kanglv Technology Ltd., is engaged in the manufacture and sales of electronic cable products in the PRC. Shenzhen Kanglv's principal products are various types of computer cables, such as HDMI, DVI, VGA and USB cables, as well as electric power cables. The Company's balance sheet at June 30, 2012, showed US$6.84 million in total assets, US$6.89 million in total liabilities and a US$50,933 total stockholders' deficit. "The continuation of the Group as a going concern through June 30, 2013, is dependent upon the continuing financial support from its stockholders," the Company said in its quarterly report for the period ended June 30, 2012. "Management believes, the existing majority stockholders will provide the additional cash to meet with the Company's obligations as they become due. These factors raise substantial doubt about the Company's ability to continue as a going concern." TITANIUM GROUP: Delays Form 10-Q for Third Quarter -------------------------------------------------- Titanium Group Limited notified the U.S. Securities and Exchange Commission that the compilation, dissemination and review of the information required to be presented in its quarterly report on Form 10-Q for the quarterly period ended Sept. 30, 2012, has imposed time constraints that have rendered timely filing of the Form 10-Q impracticable without unreasonable effort and expense. About Titanium Group Wanchai, Hong Kong-based Titanium Group Limited, through its wholly owned subsidiary Shenzhen Kanglv Technology Ltd., is engaged in the manufacture and sales of electronic cable products in the PRC. Shenzhen Kanglv's principal products are various types of computer cables, such as HDMI, DVI, VGA and USB cables, as well as electric power cables. The Company's balance sheet at June 30, 2012, showed US$6.84 million in total assets, US$6.89 million in total liabilities and a US$50,933 total stockholders' deficit. "The continuation of the Group as a going concern through June 30, 2013, is dependent upon the continuing financial support from its stockholders," the Company said in its quarterly report for the period ended June 30, 2012. "Management believes, the existing majority stockholders will provide the additional cash to meet with the Company's obligations as they become due. These factors raise substantial doubt about the Company's ability to continue as a going concern." TN-K ENERGY: Incurs $79,600 Net Loss in Third Quarter ----------------------------------------------------- TN-K Energy Group Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $79,611 on $53,647 of total revenue for the three months ended Sept. 30, 2012, compared with a net loss of $149,245 on $258,585 of total revenue for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported net income of $4.11 million on $1.84 million of total revenue, compared with net income of $1.88 million on $846,065 of total revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $2.70 million in total assets, $4.03 million in total liabilities and a $1.32 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/00Wxb2 About TN-K Energy Crossville, Tenn.-based TN-K Energy Group, Inc., an independent oil exploration and production company, engaged in acquiring oil leases and exploring and developing crude oil reserves and production in the Appalachian basin. After auditing the 2011 results, Sherb & Co., LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going. The independent auditors noted that the Company has incurred recurring operating losses and will have to obtain additional financing to sustain operations. The Company's balance sheet at June 30, 2012, showed $2.75 million in total assets, $3.99 million in total liabilities and a $1.24 million total stockholders' deficit. TONGJI HEALTHCARE: Delays Form 10-Q for Third Quarter ----------------------------------------------------- Tongji Healthcare Group, Inc., has encountered a delay in assembling the information for its financial statements for the quarter ended Sept. 30, 2012, required to be included in its Sept. 30, 2012, Form 10-Q quarterly report. The Company expects to file its Sept. 30, 2012, Form 10-Q with the U.S. Securities and Exchange Commission within five calendar days of the prescribed due date. About Tongji Healthcare Based in Nanning, Guangxi, the People's Republic of China, Tongji Healthcare Group, Inc., a Nevada corporation, operates Nanning Tongji Hospital, a general hospital with 105 licensed beds. As reported in the TCR on April 18, 2012, EFP Rotenberg, LLP, in Rochester, New York, expressed substantial doubt about Tongji Healthcare Group's ability to continue as a going concern, following the Company's results for the year ended Dec. 31, 2011. The independent auditors noted that the Company has negative working capital of $9.8 million, an accumulated deficit of $581,741, and a stockholders' deficit of $5,161 as of Dec. 31, 2011. The Company's balance sheet at June 30, 2012, showed $13.7 million in total assets, $13.8 million in total liabilities, and a stockholders' deficit of $133,691. TTM TECHNOLOGIES: S&P Ups CCR to 'BB' on Stabilizing End Markets ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Costa Mesa, Calif.-based TTM Technologies Inc. to 'BB' from 'BB-'. The outlook is stable. "At the same time, we raised our issue-level rating on the company's convertible notes due 2015 to 'BB' from 'BB-'. The recovery rating of '4' is unchanged and indicates our expectation of average (30% to 50%) recovery in the event of payment default," S&P said. "The upgrade reflects our view that the company's networking and computing end markets, which are down 23% and 15%, respectively, in 2012, will stabilize in 2013 and that smartphone and tablet programs will deliver high-margin revenue growth, resulting in leverage in the mid- to high-2x area," said Standard & Poor's credit analyst Christian Frank. "The ratings reflect our view of TTM's 'weak' business risk profile marked by cyclical end market demand, a fragmented and competitive PCB manufacturing industry, meaningful customer concentration, and rising labor costs. These weaknesses are partially offset by expected strong demand from smartphone and tablet programs, leading to a more profitable product mix, diverse end markets, and the company's 'significant' financial risk profile with a track record of leverage below 3x," S&P said. TTM is a PCB manufacturer serving networking, computing, defense, and cellular end markets focusing on products with high manufacturing complexity. Its eight Asian facilities, which make up about 60% of revenue, support the company's smartphone, tablet, computing, and networking programs, and its seven U.S. facilities support aerospace and defense, high-end computing, and networking programs. The company is the leading PCB maker in the Americas with market share in the midteens and the sixth leading supplier globally with market share in the low-single-digits. Key customers are Apple, Cisco, Ericsson, Huawei, IBM, Juniper, and ZTE. "The stable outlook reflects our expectation that the company's networking and computing end markets will stabilize in 2013 and that smartphone and tablet programs will lead to EBITDA expansion, resulting in modest deleveraging. In our view, the possibility of an upgrade is limited because of the company's competitive and cyclical industry conditions. Alternatively, we could lower the rating if further declines in the company's end markets, pricing pressure from customers, or higher labor costs cause EBITDA to decline, or if the company pursues debt-financed acquisitions, resulting in leverage above 3x on a sustained basis," S&P said. UNILAVA CORP: Delays Form 10-Q for Third Quarter ------------------------------------------------ Unilava Corporation was unable, without unreasonable effort and expense, to prepare the financial statements in sufficient time to allow the timely filing of its quarterly report on Form 10-Q for the period ended Sept. 30, 2012. About Unilava Corporation Unilava Corporation (OTC BB: UNLA)-- http://www.unilava.com/-- is a diversified communications holding company incorporated under the laws of the State of Wyoming in 2009. Unilava Corporation and its subsidiary brands provide a variety of communications services, products, and equipment that address the needs of corporations, small businesses and consumers. The Company is licensed to provide long distance services in 41 states throughout the U.S. and local phone services across 11 states. Through its carrier-grade microwave wireless broadband infrastructure and broadband Internet access partners, the Company also offers mobile and high-definition IP-hosted voice services to residential customers and corporate clients. Additionally, Unilava Corp. delivers a comprehensive and integrated suite of fee-based online and mobile advertising and web services to a broad array of business enterprises. Headquartered in San Francisco, the Company has regional offices in Chicago, Seoul, Hong Kong, and Beijing. The Company reported a net loss of $2.98 million in 2011, compared with a net loss of $1 million in 2010. In its audit report accompanying the financial statements for fiscal 2011, De Joya Griffith & Company, LLC, in Henderson, Nevada, noted that the Company has suffered losses from operations, which raises substantial doubt about its ability to continue as a going concern. UNITED CONTINENTAL: S&P Affirms 'B' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on United Continental Holdings Inc. (UCHI). "We raised our issue ratings on the company's senior unsecured debt and second-lien secured debt to 'B', equal to the corporate credit rating, from 'B-'. We revised our recovery rating on that debt to '4', indicating our expectation of average (30%-50%) recovery in a default scenario, from '5'. Although we do not assign recovery ratings to airport revenue bonds, we raised our issue ratings to 'B' from 'B-' on airport revenue bonds that we classify as equivalent to senior unsecured debt. We also raised or lowered our issue ratings on selected enhanced equipment trust certificates, based on our assessment of changes in collateral coverage," S&P said. Chicago, Ill.-based United Continental Holdings Inc., parent of United Air Lines Inc. and Continental Airlines Inc. (each rated B/Stable/--), has reported weaker earnings this year than in 2011 because of merger-related costs and integration problems, as well as higher fuel costs. "We expect the company to report a net loss, after substantial merger-related special charges, of several hundred million dollars, but to return to profitability next year," said Standard & Poor's credit analyst Philip Baggaley. S&P's base-case scenario assumptions include: -- U.S. real GDP growth of 2.1% in 2012 and 2.3% in 2013; Crude oil (WTI) averages about $94 this year and $89 next year, with crack spreads and other costs that result in jet fuel costs of $3.20-$3.30 per gallon this year and $3.00-$3.10 in 2013; -- Consolidated capacity (available seat miles) shrinks about 1.3% this year and another 1% next year; -- Passenger revenues per available seat mile rise 1.6%-1.8% this year and about 2% next year as the company works through some of its merger-related operational problems but the economy remains soft; and -- Non-fuel operating cost per available seat mile rises close to 3% this year and another 3% in 2013 (not including the effect of mostly merger-related special charges). In this scenario, S&P projects these key credit measures: -- EBITDA interest coverage of 1.3x-1.5x this year (well below the 2.4x generated in 2011), recovering to about 2x next year; Funds flow to debt of 9%-10% this year (compared with 13% in 2011), and 11%-12% in 2013; -- Debt to EBITDA rising to 8.5x-9.0x in 2012, from 6.2x last year, before recovering to about 6.5x in 2013; and -- S&P also considers debt to EBITDAR because of airlines' heavy use of leasing, and that measure is not as highly leveraged: 4.6x in 2011, 5.5x-6.0x this year, and it expects 4.5x-5.0x next year. "These credit measures, though below our previous expectations, are acceptable for the rating, particularly given that we expect revenue synergies from the merger of United and Continental to build over time, though labor costs will also rise. We base our corporate credit ratings (CCRs) on United Continental and its subsidiaries on the consolidated credit profile of the parent company. Our ratings reflect United Continental's substantial debt and lease burden, and risks associated with participation in the volatile U.S. airline industry. The company's substantial market position as the largest U.S. airline with a broad route network is a positive. Under our criteria, we categorize UCHI's business risk profile as 'weak,' its financial profile as 'highly leveraged,' and its liquidity as 'adequate,'" S&P said. "Our rating changes on selected enhanced equipment trust certificates (EETCs) are based on trends in collateral value that are outside of our previous expectations for the affected issues. The upgrades were mostly on older EETCs that have paid down debt more rapidly than the collateral aircraft value declined. However, in the case of several senior certificates secured by regional jets, we raised the ratings to 'B' from 'B-' not because of positive trends in the values of those planes, but rather because we raised the senior unsecured debt ratings of United Continental and its airline subsidiaries," S&P said. "Although we do not assign recovery ratings to enhanced equipment trust certificates, secured creditors are entitled to a senior unsecured claim for any shortfall in the value of their collateral relative to what they are owed, and we accordingly equalized our issue ratings on these certificates with our revised senior unsecured ratings. The downgrades were mostly of more recent EETCs, where collateral aircraft values (including current technology planes that were about 10 years old when refinanced through these EETCs) have fallen faster than we previously expected. Our review of United and Continental EETCs included enhanced aircraft notes issued by special purpose entity Air 2 US LLC, which leases A320-200 aircraft to United. We affirmed the existing 'BB' rating on the Class A notes and 'B-' rating on the Class B notes," S&P said. "The outlook is stable. We don't expect to change our CCRs on United Continental or its subsidiaries over the next year. However, we could raise our ratings if strong earnings and faster- than-expected achievement of merger synergies allows the consolidated entity to generate adjusted FFO to debt consistently at least in the mid-teens percent area. On the other hand, we could lower our ratings if financial results deteriorate such that FFO to debt falls into the mid-single-digit percentage area. This could happen in adverse industry conditions, possibly resulting from a major recession or much-worse-than-anticipated merger integration problems," S&P said. UNIVERSITY GENERAL: Reports $1.9-Mil. Net Income in 3rd Quarter --------------------------------------------------------------- University General Health Systems, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income attributable to the Company of $2.59 million on $36.02 million of total revenues for the three months ended Sept. 30, 2012, compared with net income of $1.04 million on $20.65 million of total revenues for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported net income attributable to the Company of $7.82 million on $84.18 million of total revenues, compared with net income attributable to the Company of $377,946 on $53.98 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $140.67 million in total assets, $128.38 million in total liabilities and $3.79 million in series C, convertible redeemable preferred stock, and $8.49 million in total equity. "The third quarter reflects continued positive quarter-on-quarter growth, which we believe validates our physician-centric, integrated, diversified regional delivery system and lays a foundation for further expansion in the Houston area and replication in other markets," concluded Sapaugh. A copy of the Form 10-Q is available for free at: http://is.gd/BJs0qa About University General University General Health System, Inc., located in Houston, Texas, is a diversified, integrated multi-specialty health care provider that delivers concierge physician- and patient-oriented services. UGHS currently operates one hospital and two ambulatory surgical centers in the Houston area. It also owns a revenue management company, a hospitality service provider and facility management company, three senior living facilities and manages six senior living facilities. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Moss, Krusick & Associates, LLC, in Winter Park, Florida, expressed substantial doubt about University General's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and negative operating cash flows, and has negative working capital. University General reported a net loss of $2.38 million in 2011, following a net loss of $1.71 million in 2010. UTSTARCOM INC: Incurs $20.7 Million Net Loss in Third Quarter ------------------------------------------------------------- UTStarcom Holdings Corp. reported a net loss of $20.76 million on $40.32 million of net sales for the three months ended Sept. 30, 2012, compared with net income of $7.55 million on $83.29 million of net sales for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $27.93 million on $143.45 million of net sales, compared with net income of $8.31 million on $237.11 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $505.93 million in total assets, $279.29 million in total liabilities and $226.64 million in total equity. A copy of the press release is available for free at: http://is.gd/XQbUSN About UTStarcom, Inc. UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a global leader in IP-based, end-to-end networking solutions and international service and support. The Company sells its solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. The Company's headquarters are currently in Alameda, California, with its research and design operations primarily in China. The Company had income of $11.77 million in 2011, following a net loss of $65.29 million in 2010, and a net loss of $225.70 million in 2009. VANGUARD NATURAL: S&P Hikes CCR to B+; Sr. Unsec. Debt Rating B+ ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Houston-based Vanguard Natural Resources LLC (Vanguard) to 'B+' from 'B'. The outlook is stable. "We also raised the issue-level rating on the company's senior unsecured debt to 'B' (one notch lower than the corporate credit rating) from 'B-'. The recovery rating on this debt remains '5', indicating our expectation for modest (10% to 30%) recovery in the event of a payment default," S&P said. "The upgrade reflects our assessment that Vanguard's business risk profile has improved," said Standard & Poor's credit analyst Marc D. Bromberg. "The company's reserves have increased to approximately 1.1 to 1.2 trillion cubic feet equivalent (Tcfe), pro forma for recent acquisitions, from 476 Bcfe at the end of 2011. We expect that this growth will benefit production levels, which we think will average more than 200 MMcfe/d in 2013, compared with an average of slightly more than 80 MMcfe/d in the first quarter of 2012. While we expect a majority of this production to come from natural gas, pricing of which is relatively weak, Vanguard is very well hedged, meaning that internally generated cash flows should be relatively stable. We project that Vanguard will continue to be acquisitive, but we expect that the company will fund these acquisitions prudently, such that debt generally represents no more than 50% of the acquisition cost. The ratings on Vanguard Natural Resources LLC reflect our view of the company's 'weak' business risk and 'aggressive' financial risk. Its reserve replacement strategy relies heavily on acquisitions and Vanguard distributes almost all of its excess cash flow to unitholders. Partially buffering these weaknesses, the company has a decent hedge book over the next several years that should mitigate hydrocarbon volatility, a high percentage of lower-risk proved developed reserves, and modest capital spending requirements. We consider the company's liquidity to be 'adequate,'" S&P said. Vanguard is a limited liability company. However, it resembles a master limited partnership (MLP) in several ways. Vanguard pays out nearly all available cash flows to unitholders on a quarterly basis, and we believe that its equity investors typically value the company on a yield basis - meaning that management could be particularly reluctant to curtail the distribution. Unlike the typical MLP structure, there is neither a general partnership interest nor incentive distribution rights. "The stable outlook reflects our expectation that Vanguard will fund its acquisitions prudently, such that debt generally represents no more than 50% of the acquisition cost. We also expect the company to continue to hedge nearly all future production, enabling it to maintain adequate liquidity. If this occurs, we foresee Vanguard's run rate leverage in the 3.5x area, which we consider appropriate for the current rating. We could lower the rating if leverage is likely to breach 4.25x on a run rate basis, which could occur if the company funds acquisitions such that debt represents more than 50% of the acquisition cost or if the company's production fails to meet our expectations," S&P said. "We consider an upgrade unlikely over the next 12 months given our assessment of Vanguard's modest internal growth prospects," S&P said. VAUGHAN CO: Court Nixes Summary Judgment Bids Over Saul Ewing Fund ------------------------------------------------------------------ Bankruptcy Judge James S. Starzynski denied motions for summary judgment in the complaint filed by Yvette Gonzales, the Chapter 7 for the estate of Douglas F. Vaughan, against Saul Ewing, LLP, Robert L. Turner, and Judith A. Wagner, the Chapter 11 Trustee of the bankruptcy estate of the Vaughan Company, Realtors. The Complaint seeks turnover of the $200,000 in trust funds held by Saul Ewing, claiming that they are property of Douglas Vaughan's Chapter 7 estate. The funds were on deposit in Saul Ewing's attorney trust account held on behalf of Mr. Vaughan. Ms. Wagner and Mr. Turner assert claims to the funds. Ms. Wagner also asserts a cross-claim against Mr. Turner alleging he received a preferential transfer from VCR, and seeks to avoid it and recover it for the VCR estate. Mr. Turner is an individual residing and doing business in Bernalillo County, New Mexico. It has been alleged that Mr. Turner and Mr. Vaughan were long-standing friends. During the period of May 2009 through February 2010, Mr. Vaughan borrowed funds from Mr. Turner on a monthly basis in amounts totaling $3,650,000 in a series of 11 transactions. Mr. Turner wrote a check to VCR for "legal fees" and asserted a claim for $300,000. A copy of the Court's Nov. 15 Memorandum Opinion is available at http://is.gd/xd4HQ6from Leagle.com. About Vaughan Company The Vaughan Company, Realtors, descended into bankruptcy after Douglas F. Vaughan, the former controlling shareholder, used the company to run a Ponzi scheme from 1993 until January 2010. Mr. Vaughan has entered into a plea agreement with the United States, admitting guilt to various securities violations. In March 2010, the Securities and Exchange Commission filed fraud charges against Mr. Vaughan, a New Mexico realtor, and obtained an emergency court order to halt his $80 million Ponzi scheme. The SEC's complaint, filed in federal court in Albuquerque, alleges Mr. Vaughan through his company issued promissory notes that he claimed would generate high fixed returns for investors. Mr. Vaughan also used another entity -- Vaughan Capital LLC -- to solicit investors for different types of real estate-related investments, such as buying residential properties at distressed prices. Mr. Vaughan relied entirely on new money raised from investors through both companies to fund Vaughan Company's ever- increasing obligations to note holders. The SEC also charged both of Mr. Vaughan's companies in the enforcement action. Neither Mr. Vaughan nor his companies are registered with the SEC to offer securities under the federal securities laws. The Vaughan Company Realtors filed for Chapter 11 protection on Feb. 22, 2010 (Bankr. N.M. Case No. 10-10759). George D. Giddens, Jr., Esq., represents the Debtor in its restructuring efforts. The Company estimated both assets and debts of between $1 million and $10 million. Judith A. Wagner was appointed as Chapter 11 Trustee. Mr. Vaughan filed a separate Chapter 11 petition (Bankr. D. N.M. Case No. 10-10763) on Feb. 22, 2010. The case was converted to a chapter 7 proceeding on May 20, 2010. Yvette Gonzales is the duly appointed trustee of the Chapter 7 estate. VICTORY ENERGY: Incurs $868,000 Net Loss in Third Quarter --------------------------------------------------------- Victory Energy Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $868,093 on $77,035 of revenue for the three months ended Sept. 30, 2012, compared with a net loss of $765,134 on $90,570 of revenue for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $6.27 million on $209,151 of revenue, compared with a net loss of $2.66 million on $253,794 of revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $1.69 million in total assets, $259,886 in total liabilities and $1.43 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/gVcQjK About Victory Energy Austin, Texas-based Victory Energy Corporation is engaged in the exploration, acquisition, development and exploitation of domestic oil and gas properties. Current operations are primarily located onshore in Texas, New Mexico and Oklahoma. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, WilsonMorgan LLP, in Irvine, California, expressed substantial doubt about Victory Energy's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring losses since inception and has an accumulated deficit. The Company reported a net loss of $3.95 million on $305,180 of revenues for 2011, compared with a net loss of $432,713 on $385,889 of revenues for 2010. VUZIX CORP: Delays Form 10-Q for Third Quarter ---------------------------------------------- Vuzix Corporation was unable to file its report on Form 10-Q for the calendar quarter ended Sept. 30, 2012, on or before the required due date, because it was unable prepare the financial statements required in that Report without unreasonable effort or expense. Specifically, on June 15, 2012, the Company sold a significant portion of its assets and business to an unrelated third party. Determination of the accounting treatment for that transaction, which had a material effect on the Company's financial statements for the calendar quarter ended Sept. 30, 2012, delayed the completion of the Company's financial statements for that Quarter. Those financial statements could not have been prepared in order to file the Company's Report on Form 10-Q for the calendar quarter ended Sept. 30, 2012, on or before the required due date without unreasonable effort or expense. About Vuzix Corp. Rochester, New York-based Vuzix Corporation (TSX-V: VZX) OTC BB: VUZI) -- http://www.vuzix.com/-- is a supplier of Video Eyewear products in the defense, consumer and media & entertainment markets. The Company reported a net loss of $3.87 million in 2011, a net loss of $4.55 million in 2010, and a net loss of $3.25 million in 2009. After auditing the 2011 annual report, EFP Rotenberg, LLP, in Rochester, New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred substantial losses from operations in recent years. In addition, the Company is dependent on its various debt and compensation agreements to fund its working capital needs. And while there are no financial covenants with which the Company must comply with, these debts are past due in some cases. The Company's balance sheet at June 30, 2012, showed $3.88 million in total assets, $7.60 million in total liabilities and a $3.72 million total stockholders' deficit. Bankruptcy Warning The Company said in its 2011 annual report that its future viability is dependent on its ability to execute these plans successfully. If the Company fails to do so for any reason, the Company would not have adequate liquidity to fund its operations, would not be able to continue as a going concern and could be forced to seek relief through a filing under U.S. Bankruptcy Code. VYCOR MEDICAL: Incurs $792,000 Net Loss in Third Quarter -------------------------------------------------------- Vycor Medical, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $792,109 on $220,121 of revenue for the three months ended Sept. 30, 2012, compared with a net loss of $1.14 million on $231,278 of revenue for the same period a year ago. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $2.37 million on $918,108 of revenue, compared with a net loss of $3.92 million on $518,731 of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $2.69 million in total assets, $3.86 million in total liabilities and a $1.17 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/v57dDq About Vycor Medical Boca Raton, Fla.-based Vycor Medical, Inc. (OTC BB: VYCO) -- http://www.VycorMedical.com/-- is a medical device company committed to making neurological brain, spinal and other surgical procedures safer and more effective. The Company's flagship, Patent Pending ViewSite(TM) Surgical Access Systems represent an exciting new minimally invasive access and retraction system that holds the potential for speedier, safer and more economical brain, spinal and other surgeries and a quicker patient discharge. Vycor's innovative medical instruments are designed to optimize neurosurgical site access, reduce patient risk, accelerate recovery, and add tangible value to the professional medical community. The Company reported a net loss of $4.77 millionin 2011, compared with a net loss of $1.98 million in 2010. Paritz & Company, P.A., in Hackensack, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 annual results. The independent auditors noted that the Company has incurred a loss since inception, has a net accumulated deficit and may be unable to raise further equity. VYSTAR CORP: Incurs $577,800 Net Loss in Third Quarter ------------------------------------------------------ Vystar Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $577,866 on $95,553 of revenue for the three months ended Sept. 30, 2012, compared with a net loss of $580,200 on $71,651 of revenue for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $1.84 million on $240,000 of revenue, compared with a net loss of $2.90 million on $316,582 of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $1.31 million in total assets, $2.57 million in total liabilities and a $1.25 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/4YEbco About Vystar Corp Duluth, Ga.-based Vystar Corporation is the creator and exclusive owner of the innovative technology to produce Vytex(R) Natural Rubber Latex. This technology reduces antigenic protein in natural rubber latex products to virtually undetectable levels in both liquid NRL and finished latex products. Bankruptcy Warning According to the Company's quarterly report on Form 10-Q for the period ended June 30, 2012, there can be no assurances that the Company will be able to achieve its projected level of revenues in 2012 and beyond. "If the Company is unable to achieve its projected revenues and is not able to obtain alternate additional financing of equity or debt, the Company would need to significantly curtail or reorient its operations during 2012, which could have a material adverse effect on the Company's ability to achieve its business objectives and as a result may require the Company to file for bankruptcy or cease operations." Habif, Arogeti & Wynne, LLP, in Atlanta, Georgia, expressed substantial doubt about Vystar's ability to continue as a going concern, following its results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has recurring losses from operations, a capital deficit, and limited capital resources. WAXESS HOLDINGS: Incurs $1.8 Million Net Loss in Third Quarter -------------------------------------------------------------- AirTouch Communications, Inc., fka Waxess Holdings, filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.85 million on $1.03 million of net revenue for the three months ended Sept. 30, 2012, compared with a net loss of $2.22 million on $0 of net revenue for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $6.90 million on $1.80 million of net revenue, compared with a net loss of $6.56 million on $477,217 of net revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $4.05 million in total assets, $2.87 million in total liabilities and $1.18 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/cQMqD3 About Waxess Holdings Waxess Holdings, Inc., is a technology firm, located in Newport Beach, Calif., that was incorporated in 2008 and develops and markets phone terminals capable of converging traditional landline, cellular and data services based on its patent portfolio. Waxess currently offers its DM1000 (cell@home) product through various channels, including several of the major US carriers, and is working to bring its higher performance, lower cost next generation DM1500 and MAT1000 products to the market. The Company reported a net loss of $9.41 million for the year ended Dec. 31, 2011, compared with a net loss of $4.85 million during the prior year. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Anton & Chia, LLP, in Irvine, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has sustained accumulated losses from operations totaling approximately $16 million at Dec. 31, 2011. WIZARD WORLD: Posts $1.7 Million Net Income in Third Quarter ------------------------------------------------------------ Wizard World, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $1.70 million on $2.79 million of convention revenue for the three months ended Sept. 30, 2012, compared with a net loss of $1.39 million on $1.43 million of convention revenue for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $1.28 million on $5.17 million of convention revenue, compared with a net loss of $2.11 million on $3.07 million of convention revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $2.58 million in total assets, $6.78 million in total liabilities and a $4.19 million total stockholders' deficit. "As reflected in the accompanying consolidated financial statements, the Company had an accumulated deficit at September 30, 2012, and had a net loss for the interim period then ended. These factors raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/MuJzgQ About Wizard World Based in New York, N.Y., Wizard World, Inc., is a producer of pop culture and multimedia conventions ("Comic Cons") across North America that markets movies, TV shows, video games, technology, toys, social networking/gaming platforms, comic books and graphic novels. These Comic Cons provide sales, marketing, promotions, public relations, advertising and sponsorship opportunities for entertainment companies, toy companies, gaming companies, publishing companies, marketers, corporate sponsors and retailers. WORLD SURVEILLANCE: Agrees to Cancel Shares Issuances to Execs. --------------------------------------------------------------- World Surveillance Group Inc. entered into an agreement with Glenn D. Estrella, the Company's president and chief executive officer, W. Jeffrey Sawyers, the Company's chief financial officer and treasurer, and Barbara M. Johnson, the Company's vice president, general counsel and secretary, whereby the parties mutually agreed to rescind the issuances of certain shares of common stock, par value $0.00001 per share, of the Company that had been issued to Mr. Estrella, Mr. Sawyers and Ms. Johnson, respectively, during 2012 or which shares had vested in 2012. On Nov. 13, 2012, Mr. Estrella, Mr. Sawyers and Ms. Johnson received options to purchase certain shares of Common Stock at an exercise price of $0.023 per share, which was the closing price of the Company's Common Stock on the date the Company's Board of Directors approved the issuance of the options, pursuant to certain option agreements. The options are fully vested and are exercisable until the earlier of seven years from the effective date of the options or 90 days after the termination of their respective employment with the Company. No underwriting discounts or commissions were paid in connection with any of the above agreements or securities issuances. About World Surveillance World Surveillance Group Inc. designs, develops, markets and sells autonomous lighter-than-air (LTA) unmanned aerial vehicles (UAVs) capable of carrying payloads that provide persistent security and/or wireless communication from air to ground solutions at low, mid and high altitudes. The Company's airships, when integrated with electronics systems and other high technology payloads, are designed for use by government-related and commercial entities that require real-time intelligence, surveillance and reconnaissance or communications support for military, homeland defense, border control, drug interdiction, natural disaster relief and maritime missions. The Company is headquartered at the Kennedy Space Center, in Florida. The Company reported a net loss of $1.12 million in 2011, compared with a net loss of $9.79 million in 2010. The Company's balance sheet at June 30, 2012, showed $2.95 million in total assets, $15.73 million in total liabilities and a $12.78 million total stockholders' deficit. Bankruptcy Warning The Company's indebtedness at June 30, 2012, was $15,706,655. A portion of those indebtedness reflects judicial judgments against the Company that could result in liens being placed on the Company's bank accounts or assets. The Company is reviewing its ability to reduce this debt level due to the age or settlement of certain payables but the Company may not be able to do so. This level of indebtedness could, among other things: * make it difficult for the Company to make payments on this debt and other obligations; * make it difficult for the Company to obtain future financing; * require the Company to redirect significant amounts of cash from operations to servicing the debt; * require the Company to take measures such as the reduction in scale of the Company's operations that might hurt the' Company's future performance in order to satisfy its debt obligations; and * make the Company more vulnerable to bankruptcy or an unwanted acquisition on terms unsatisfactory to the Company. After auditing the 2011 results, Rosen Seymour Shapss Martin & Company LLP, in New York, expressed substantial doubt about World Surveillance's ability to continue as a going concern. The independent auditors noted that the Company has experienced significant losses and negative cash flows, resulting in decreased capital and increased accumulated deficits. WOUND MANAGEMENT: Incurs $1.4 Million Net Loss in Third Quarter --------------------------------------------------------------- Wound Management Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.39 million on $360,245 of revenue for the three months ended Sept. 30, 2012, compared with a net loss of $337,837 on $133,841 of revenue for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $1.14 million on $734,191 of revenue, compared with a net loss of $7.58 million on $1.29 million of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $2.76 million in total assets, $6.36 million in total liabilities and a $3.60 million deficit. A copy of the Form 10-Q is available for free at: http://is.gd/PseosJ About Wound Management Fort Worth, Texas-based Wound Management Technologies, Inc., markets and sells the patented CellerateRX(R) product in the expanding advanced wound care market; particularly with respect to diabetic wound applications. Pritchett, Siler & Hardy, P.C., in Salt Lake City, Utah, expressed substantial doubt about Wound Management'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 incurred substantial losses and has a working capital deficit. XERIUM TECHNOLOGIES: S&P Revises Outlook on 'B' CCR to Negative --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Raleigh, N.C.-based paper product manufacturer Xerium Technologies Inc.'s corporate credit rating to negative from stable. At the same time, S&P affirmed the ratings on the company, including the 'B' corporate credit rating. "The negative outlook reflects our expectation that weak end markets, especially in Europe where Xerium generates about 30% of its revenues, are likely to continue to pressure Xerium's operating performance in 2013," said Standard & Poor's credit analyst Sarah Wyeth. "We believe volumes are tied to GDP growth, and we expect GDP in the eurozone to contract 0.8% in 2012 and be flat in 2013. Despite cost reductions and relatively better demand in Asia and America, the company may not be able to maintain a comfortable level of headroom over its financial covenants if European markets do not stabilize." S&P forecast also assumes: -- GDP growth in the U.S. of 2.1% in 2012 and 2.3% in 2013; Mid-single-digit contraction in Xerium's top line in 2012 and no growth in 2013; -- High-teens EBITDA margin; and -- Annual capital expenditures of about $30 million. The ratings also reflect S&P's view of Xerium's "weak" business risk profile and "highly leveraged" financial risk profile. "The business risk profile takes into account the company's continued presence in the cyclical and competitive market for papermaking products, limited end-user industry diversification, and our expectation that structurally weak medium-term demand in mature markets will likely continue to pressure prices for the company's products. In our view, Xerium's relatively variable cost structure, sound margins, and fair geographic diversification partly offset these weaknesses. Xerium's geographic diversification should enable it to benefit from more positive industry fundamentals in emerging markets," S&P said. "The company generated revenues of $550 million in the 12 months ended Sept. 30, 2012. Xerium operates in two business segments: clothing, in the form of synthetic textile belts that transport paper through papermaking machines, and roll covers, which provide covering surface for large steel cylinders between which paper travels. Clothing represents roughly 65% of revenue, and roll covers make up the remainder. These consumables will continue to play key roles in converting raw material into paper, and we expect customers to continue to prefer local, long-standing suppliers that they believe are reliable. The company has indicated that it derives about two-thirds of its sales from products customers use in the production of high-growth paper grades such as tissue, containerboard, and specialty paper. Newsprint and printing paper grades represent the remaining sales; these are experiencing low growth or contraction," S&P said. "We expect the long-term shift of global production to Asia to continue, and, in our view, this could cause production volumes in North America and Europe to remain subdued. As a result, we believe pricing, although not the key buying decision (given the product's critical nature and its low cost compared with the total cost of papermaking), will remain highly competitive in these markets. Xerium derives about 28% of its sales from Asia-Pacific and South America, and it should benefit from higher growth rates in these regions. However, the company does not currently have paper-machine clothing production facilities in China, and this could constrain its ability to capitalize on growth trends in this large market," S&P said. Xerium's adjusted operating margin (before depreciation and amortization), at about 17% in the 12 months ended Sept. 30, 2012, has declined from about 21% last year because of lower volumes in Europe. "In our view, paper mill closures, industry consolidation, and limited pricing power are likely to continue to pressure Xerium's margins. However, we believe the company's restructuring actions should enable it to prevent further decline in margins. The company held margins in the high teens when revenue contracted by more than 20% in 2009," S&P said. "The capital structure reflects what we consider to be a highly leveraged financial risk profile. Leverage, measured by adjusted total debt to EBITDA, was about 5.5x as of Sept. 30, 2012. For the rating, we expect total debt to EBITDA of 5x-6x. In our view, stable operating margins should contribute cash flow sufficient enough to cover capital expenditures and working capital requirements and also to support modest debt reduction. The ratings do not account for large, debt-financed acquisitions, and such acquisitions could result in our reviewing the ratings for a possible downgrade of the company," S&P said. "The outlook is negative. We could lower the ratings if EBITDA declines and the company does not reduce its debt, which could result in limited EBITDA headroom over its financial covenants. Factors that could contribute to such a scenario would be continued global economic weakness, increased pricing pressures, and adverse foreign exchange movements. We could revise the outlook to stable if operations stabilize and we expect the company to maintain headroom of at least 15% over its covenants," S&P said. YELLOWSTONE MOUNTAIN: Dist. Court Rejects Disqualification Bid -------------------------------------------------------------- Timothy L. Blixseth failed to convince the district court in Butte, Montana, on his bid to disqualify the Honorable Ralph B. Kirscher, United States Bankruptcy Judge, in the Chapter 11 bankruptcy In re Yellowstone Mountain Club, LLC, Cause No. 08-61570-11, and in five related adversary proceedings. Judge Kirscher denied the disqualification motions on Feb. 25, 2011. Mr. Blixseth moved for reconsideration, which Judge Kirscher denied on July 26, 2011. At the district court level, District Judge Sam E. Haddon held that "no showing of bias, or prejudice or any lack of impartiality by Judge Kirscher has been demonstrated. Rather, dispassionate assessment reveals that extraordinary consideration was accorded Blixseth and his position throughout the proceedings." The case before the District Court is, TIMOTHY L. BLIXSETH, Appellant, v. YELLOWSTONE MOUNTAIN CLUB, LLC; CREDIT SUISSE; AD HOC GROUP OF CLASS B UNIT HOLDERS; CIP SUNRISE RIDGE OWNER LLC; ROBERT SUMPTER; NORMANDY HILL CAPITAL LP; MARC S. KIRSCHNER; CIP YELLOWSTONE LENDING LLC; CROSSHARBOR CAPITAL PARTNERS LLC, Appellees, No. CV-11-73-BU-SHE (D. Mont.). A copy of the Court's Nov. 16, 2012 Memorandum and Order is available at http://is.gd/T6Jcqzfrom Leagle.com. About Timothy Blixseth Tax officials from California, Montana and Idaho on April 5, 2011 filed an involuntary-bankruptcy petition under Chapter 7 against Timothy Blixseth in Las Vegas, Nevada (Bankr. D. Nev. Case No. 11-15010). The three states that signed the petition against the Yellowstone Club co-founder claim they are owed $2.3 million in back taxes. A copy of the petition is available for free at http://bankrupt.com/misc/nvb11-15010.pdf Mr. Blixseth and his former wife, Edra Blixseth, founded the Yellowstone Club, near Big Sky, Montana, in 2000 as a ski resort for millionaires looking for vacation homes. Members paid $205 million for 72 properties in 2005 alone. Bloomberg News, citing a court ruling by U.S. Bankruptcy Judge Ralph B. Kirscher, had reported the couple took cash for their personal use from a $375 million loan arranged by Credit Suisse. Finances at the club deteriorated thereafter, and the club eventually went bankrupt, Judge Kirscher found. Mr. Blixseth was ordered to pay $40 million to the club's creditors under a September ruling by Judge Kirscher. Mr. Blixseth took an appeal from that judgment. About Edra D. Blixseth Edra D. Blixseth owned the Porcupine Creek Golf Club in Rancho Mirage and the Yellowstone Club in Montana. Ms. Blixseth filed for Chapter 11 bankruptcy protection on March 26, 2009 (Bankr. D. Mont. Case No. 09-60452). Gary S. Deschenes, Esq., at Deschenes & Sullivan Law Offices, assisted Ms. Blixseth in her restructuring efforts. She estimated $100 million to $500 million in assets and $500 million to $1 billion in debts. Her case was converted from a Chapter 11 to a Chapter 7 by Court order entered May 29, 2009. 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 on Nov. 10, 2008 (Bankr. D. Mont. Case No. 08-61570). The Company's owner affiliate, Edra D. Blixseth, filed for Chapter 11 protection on March 27, 2009 (Case No. 09-60452). 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. Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green PLLC represented Yellowstone. The club hired FTI Consulting Inc. and Ronald Greenspan as CRO. The official committee of unsecured creditors were represented by Parsons, Behle and Latimer, as counsel, and James H. Cossitt, Esq., at local counsel. Credit Suisse, the prepetition first lien lender, was represented by Skadden, Arps, Slate, Meagher & Flom. ZHONG WEN: Delays Form 10-Q for Third Quarter --------------------------------------------- Zhong Wen International Holding Co., Ltd., is still awaiting its independent auditor to review its management prepared unaudited financial statements in order to prepare the Form 10-Q. For the foregoing reason, the Company requires additional time in order to prepare and file its quarterly report on Form 10-Q for the quarter ended Sept. 30, 2012. The Company does not expect significant changes in its results of operations and earnings from the corresponding period ended Sept. 30, 2011. About Zong Wen Located in Qingzhou, Shandong, People's Republic of China, Zhong Wen International Holding Co., Ltd., is in the business of equipment products procurement for the construction industry, and project consultation for construction projects. After auditing results for the year ended Dec. 31, 2011, Bongiovanni & Associates, CPA's, in Cornelius, North Carolina, expressed substantial doubt about Zhong Wen's ability to continue as a going concern. The independent auditors noted that the Company has suffered losses from operations and has a net capital deficiency as of Dec. 31, 2011. The Company's balance sheet at June 30, 2012, showed $1.47 million in total assets, $1.55 million in total liabilities, all current, and a $79,114 total stockholders' deficit. Bankruptcy Warning The Company estimates that its cash and cash equivalents will fund its operations through the financial support from the Company's shareholders. The Company's shareholders have indicated their continuing support to enable it to meet its obligations to third parties as and when they fall due and to continue as a going concern. This belief is based on the Company's current cost structure and its current expectations regarding operating expenses and anticipated revenues. "If we are unable to obtain additional funds, we will not be able to sustain our operations and would be required to cease our operations and/or seek bankruptcy protection. Given the difficult current economic environment, we believe it will be difficult to raise additional funds and there can be no assurance as to the availability of additional financing or the terms upon which additional financing may be available," the Company said in its quarterly report for the period ended June 30, 2012. ZOO ENTERTAINMENT: Incurs $188,000 Net Loss in Third Quarter ------------------------------------------------------------ indiePub Entertainment, Inc., formerly Zoo Entertainment, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $188,000 on $154,000 of revenue for the three months ended Sept. 30, 2012, compared witha net loss of $4.09 million on $1.16 million of revenue for the same period a year ago. For the nine months ended Sept. 30, 2012, the Company reported net income of $2.83 million on $628,000 of revenue, compared with a net loss of $19.74 million on $8.59 million of revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $1.94 million in total assets, $7.44 million in total liabilities and a $5.49 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/i19BTY About Zoo Entertainment Cincinnati, Ohio-based Zoo Entertainment, Inc. (NASDAQ CM: ZOOG) is a developer, publisher and distributor of interactive entertainment for Internet-connected consoles, handheld gaming devices, PCs, and mobile devices. The Company reported a net loss of $25.87 million in 2011, compared with a net loss of $14.03 million in 2010. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, EisnerAmper LLP, in Edison, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has both incurred losses and experienced net cash outflows from operations since inception. ZYTO CORP: Reports $97,613 Net Income in Third Quarter ------------------------------------------------------ Zyto Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $97,613 on $1.17 million of net revenues for the three months ended Sept. 30, 2012, compared with a net loss of $28,397 on $993,411 of net revenues for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported net income of $194,467 on $3.66 million of net revenues, compared with a net loss of $425,787 on $2.97 million of net revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $1.22 million in total assets, $3.84 million in total liabilities and a $2.61 million total stockholders' deficit. "During the three months ended September 30, 2012 and 2011, we recognized net income of $97,613 and a net loss of $28,397, respectively. During the nine months ended September 30, 2012 and 2011, we recognized net income of $194,467 and a net loss of $425,787, respectively. "As of September 30, 2012, and December 31, 2011, our current liabilities exceeded our current assets by $725,548 and $1,016,852, respectively. "These factors raise substantial doubt about our ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/sxdncR Lindon, Utah-based ZYTO Corp.'s operations consist of the manufacturing and distribution of biocommunication devices and software designed to facilitate communication between computers and the human body. Hansen, Barnett, & Maxwell, P.C., in Salt Lake City, Utah, expressed substantial doubt about ZYTO'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 an accumulated deficit, and negative working capital. * Moody's Says Michigan School Districts' Outlook Remains Neg. -------------------------------------------------------------- After several years of unprecedented fiscal stress from funding cuts and enrollment declines, the outlook for Michigan school districts remains negative, says Moody's Investors Service in a new report. Given the limited ability of some districts to close funding gaps, additional rating downgrades are possible. Although state per pupil aid should not decline further, some districts will continue to face financial challenges in the absence of stabilized enrollments or increased state aid, according the new Moody's report "Michigan School Districts Under Pressure: Outlook Remains Negative." "We expect the majority of districts to continue to manage challenges and maintain fiscal stability," says Matthew Butler, the Moody's analyst who wrote the report. "However, additional rating downgrades may occur for districts under immense pressure as well as for those that have exhausted options to cut expenditures." Districts with rapidly declining enrollment and waning operating revenue face the biggest challenges. A small number are dealing with extremely high rates of declining enrollment with no clear indication that the trends will reverse soon. Moody's already rates five of these most pressured districts below investment grade; they include the Detroit Public Schools and the Pontiac City School district. Of the 14 school districts rated in the Baa category and below, seven had negative general fund balances at the close of FY 2011. In recent years, rating downgrades among Michigan school districts have been concentrated in the economically challenged southeast region of the state, which accounted for nearly 80% of the downgrades Moody's has taken since January 2009. The area of the state is comprised mostly of the Detroit metropolitan area. Statewide, enrollment in Michigan school districts has steadily declined since fiscal 2004 by an average of 1.3% annually and a total of 10%. Because school funding in Michigan is provided on a per-pupil basis, enrollment trends have a direct impact on school district operating revenues. The decline in enrollment mirrors the state population trend over the prior decade. Between the 2000 and 2010 census periods, population loss within the under-18 age group was a substantial 9.7%. "While some individual districts have benefited from enrollment gains, many more have experienced enrollment declines on par with, or in excess of, the statewide trend and are expected to contend with further declines going forward," says Moody's Butler. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re L & M Creations, Inc. Bankr. D. Nev. Case No. 12-22657 Chapter 11 Petition filed November 10, 2012 See http://bankrupt.com/misc/nvb12-22657.pdf represented by: Neil J. Beller, Esq. E-mail: nbeller@njbltd.com In re Michael Shults Bankr. M.D. Fla. Case No. 12-17138 Chapter 11 Petition filed November 10, 2012 In re Hands on Healthcare, LLC Bankr. S.D. Fla. Case No. 12-37197 Chapter 11 Petition filed November 11, 2012 See http://bankrupt.com/misc/flsb12-37197.pdf represented by: Donna A. Bumgardner, Esq. Bumgardner & Associates, P.A. E-mail: donnabkclaw@aol.com In re Abdul Aziz Bankr. E.D. Va. Case No. 12-16711 Chapter 11 Petition filed November 11, 2012 In re Steven Grosvenor Bankr. D. Ariz. Case No. 12-24639 Chapter 11 Petition filed November 13, 2012 In re Heart Tronics Inc. aka Signalife Inc. Bankr. C.D. Calif. Case No. 12-20002 Chapter 11 Petition filed November 13, 2012 See http://bankrupt.com/misc/cacb12-20002.pdf Filed pro se In re Desert Hot Spring Ranch Inc. Bankr. C.D. Calif. Case No. 12-20005 Chapter 11 Petition filed November 13, 2012 See http://bankrupt.com/misc/cacb12-20005.pdf Filed pro se In re Jack Rosen Bankr. C.D. Calif. Case No. 12-47820 Chapter 11 Petition filed November 13, 2012 In re Walter Bollinger Bankr. C.D. Calif. Case No. 12-30038 Chapter 11 Petition filed November 13, 2012 In re Donna Galante Bankr. N.D. Calif. Case No. 12-58139 Chapter 11 Petition filed November 13, 2012 In re Humberto Silva Bankr. N.D. Calif. Case No. 12-33215 Chapter 11 Petition filed November 13, 2012 In re Roberto Edrosa Bankr. N.D. Calif. Case No. 12-49176 Chapter 11 Petition filed November 13, 2012 In re Lance Sheffield Bankr. N.D. Fla. Case No. 12-50537 Chapter 11 Petition filed November 13, 2012 In re Soo Corporation dba Nozumi Restaurant & Blue Ginger Rest Bankr. N.D. Ill. Case No. 12-44985 Chapter 11 Petition filed November 13, 2012 See http://bankrupt.com/misc/ilnb12-44985.pdf represented by: Joseph M. Williams, Esq. In re The Grill 1, Inc. Bankr. S.D. Ind. Case No. 12-13393 Chapter 11 Petition filed November 13, 2012 See http://bankrupt.com/misc/insb12-13393.pdf represented by: David R. Krebs, Esq. Hostetler & Kowalik P.C. E-mail: dkrebs@hklawfirm.com In re RGG, Inc. dba The Grill 2 Bankr. S.D. Ind. Case No. 12-13393 Chapter 11 Petition filed November 13, 2012 See http://bankrupt.com/misc/insb12-13394.pdf represented by: David R. Krebs, Esq. Hostetler & Kowalik P.C. E-mail: dkrebs@hklawfirm.com In re Bucknell Investment Company Bankr. W.D. Mich. Case No. 12-90605 Chapter 11 Petition filed November 13, 2012 See http://bankrupt.com/misc/miwb12-90605p.pdf See http://bankrupt.com/misc/miwb12-90605c.pdf represented by: Rudolph F. Perhalla, Esq. Perhalla Law Office E-mail: perhallalawoffice@hotmail.com In re Jindo Management, LLC Bankr. D.N.J. Case No. 12-36878 Chapter 11 Petition filed November 13, 2012 See http://bankrupt.com/misc/njb12-36878p.pdf See http://bankrupt.com/misc/njb12-36878c.pdf represented by: Michael T. Stewart, Esq. Caruso Pope Edell Picini PC E-mail: mstewart@carusosmith.com In re Senior Associates Properties LLC Bankr. W.D.N.Y. Case No. 12-13488 Chapter 11 Petition filed November 13, 2012 See http://bankrupt.com/misc/nywb12-13488.pdf represented by: Matthew Allen Lazroe, Esq. Law Office of Matthew Allen Lazroe E-mail: lazroebankruptcy@gmail.com In re John Proctor Bankr. E.D.N.C. Case No. 12-088116 Chapter 11 Petition filed November 13, 2012 In re Mark Thomas Bankr. E.D. Tenn. Case No. 12-15906 Chapter 11 Petition filed November 13, 2012 In re Estate of the Late Dirk Dresselhuizen Bankr. D. Vt. Case No. 12-10906 Chapter 11 Petition filed November 13, 2012 See http://bankrupt.com/misc/vtb12-10906.pdf represented by: Donald Hayes, Esq. Raymond J. Obuchowski, Esq. Obuchowski and Emens-Butler E-mail: don@oeblaw.com ray@oeblaw.com In re Jerry Welch Bankr. W.D. Wash. Case No. 12-21437 Chapter 11 Petition filed November 13, 2012 In re James Klay Bankr. D. Ariz. Case No. 12-24708 Chapter 11 Petition filed November 14, 2012 In re Allen Bird Bankr. E.D. Ark. Case No. 12-16634 Chapter 11 Petition filed November 14, 2012 In re Voiceboard Corporation Bankr. C.D. Calif. Case No. 12-14206 Chapter 11 Petition filed November 14, 2012 See http://bankrupt.com/misc/cacb12-14206.pdf represented by: Daniel A. Higson, Esq. THE LAW OFFICES OF DANIEL A. HIGSON E-mail: dhigson30@aol.com In re Sanford Deutsch Bankr. C.D. Calif. Case No. 12-20070 Chapter 11 Petition filed November 14, 2012 In re KEC, INC aka KEC-1 INC Bankr. C.D. Calif. Case No. 12-48075 Chapter 11 Petition filed November 14, 2012 See http://bankrupt.com/misc/cacb12-48075.pdf Filed as Pro Se In re Lack/Skinner Enterprises, Inc. fdba Big O Tires dba Amador Tire & Auto Service Bankr. E.D. Calif. Case No. 12-39967 Chapter 11 Petition filed November 14, 2012 See http://bankrupt.com/misc/caeb12-39967.pdf represented by: David C. Johnston, Esq. JOHNSTON & JOHNSTON LAW CORP. In re Phillips Delivery Bankr. E.D. Calif. Case No. 12-39999 Chapter 11 Petition filed November 14, 2012 In re Charles Ramos Bankr. N.D. Calif. Case No. 12-33234 Chapter 11 Petition filed November 14, 2012 In re Kristina Lisper Bankr. N.D. Calif. Case No. 12-33235 Chapter 11 Petition filed November 14, 2012 In re Tanya Dennis Bankr. N.D. Calif. Case No. 12-49185 Chapter 11 Petition filed November 14, 2012 In re Mohammad Bahae Bankr. S.D. Calif. Case No. 12-15171 Chapter 11 Petition filed November 14, 2012 In re Department of Treasury, Colorado Bankr. D. Colo. Case No. 12-33421 Chapter 11 Petition filed November 14, 2012 Filed as Pro Se In re American Wire Corporation Bankr. D. Conn. Case No. 12-52038 Chapter 11 Petition filed November 14, 2012 See http://bankrupt.com/misc/ctb12-52038.pdf represented by: Matthew K. Beatman, Esq. ZEISLER AND ZEISLER E-mail: MBeatman@zeislaw.com In re William McCarthy Bankr. D. Conn. Case No. 12-52039 Chapter 11 Petition filed November 14, 2012 In re New Light Christian Church, Inc. Bankr. M.D. Fla. Case No. 12-07402 Chapter 11 Petition filed November 14, 2012 See http://bankrupt.com/misc/flmb12-07402.pdf represented by: Jason A. Burgess, Esq. THE LAW OFFICES OF JASON A. BURGESS, LLC E-mail: jason@jasonaburgess.com In re Scott Marshall Bankr. N.D. Ill. Case No. 12-45186 Chapter 11 Petition filed November 14, 2012 In re Machavelle, LLC Bankr. E.D.N.Y. Case No. 12-47860 Chapter 11 Petition filed November 14, 2012 See http://bankrupt.com/misc/nyeb12-47860.pdf represented by: Farrel Donald, Esq. LAW OFFICES OF FARREL DONALD In re St. Clair Richards Bankr. S.D.N.Y. Case No. 12-14592 Chapter 11 Petition filed November 14, 2012 In re Thomas Lounge, Incorporated Bankr. W.D. Pa. Case No. 12-25598 Chapter 11 Petition filed November 14, 2012 See http://bankrupt.com/misc/pawb12-25598.pdf represented by: Mary Bower Sheats, Esq. FRANK,GALE, BAILS, MURCKO & POCRASS, P.C. E-mail: mbsheats@fbmgg.com In re Jose Sosa Barbosa Bankr. D.P.R. Case No. 12-09090 Chapter 11 Petition filed November 14, 2012 In re Alec Olsen Bankr. W.D. Wash. Case No. 12-21448 Chapter 11 Petition filed November 14, 2012 In re Steven Hanson Bankr. D. Ariz. Case No. 12-24833 Chapter 11 Petition filed November 15, 2012 In re Mark Shubert Bankr. N.D. Calif. Case No. 12-58227 Chapter 11 Petition filed November 15, 2012 In re Robert Hall Bankr. D.C. Case No. 12-00753 Chapter 11 Petition filed November 15, 2012 In re Party Barn, Inc. Bankr. M.D. Fla. Case No. 12-07432 Chapter 11 Petition filed November 15, 2012 See http://bankrupt.com/misc/flmb12-07432.pdf represented by: Jason A. Burgess, Esq. The Law Offices of Jason A. Burgess, LLC E-mail: jason@jasonaburgess.com In re Comercializadora De Productos Tecnologicos CPT Colombia SAS Bankr. S.D. Fla. Case No. 12-37560 Chapter 11 Petition filed November 15, 2012 See http://bankrupt.com/misc/flsb12-37560.pdf represented by: Robert A. Schatzman, Esq. GrayRobinson, P.A. E-mail: robert.schatzman@gray-robinson.com In re GK Management Partners, Inc. Bankr. N.D. Ga. Case No. 12-23946 Chapter 11 Petition filed November 15, 2012 See http://bankrupt.com/misc/ganb12-23946.pdf represented by: Laura E. Woodson, Esq. Scroggins & Williamson E-mail: lwoodson@swlawfirm.com In re Forte II, LLC Bankr. D. Nev. Case No. 12-22790 Chapter 11 Petition filed November 15, 2012 See http://bankrupt.com/misc/nvb12-22790.pdf represented by: Boris A. Avramski, Esq. Avramski Law, PC E-mail: bkhelpvegas@yahoo.com In re Paul Aquino Bankr. D. Nev. Case No. 12-22792 Chapter 11 Petition filed November 15, 2012 In re Vameershala Davis Bankr. E.D.N.Y. Case No. 12-47888 Chapter 11 Petition filed November 15, 2012 In re 920 Wootton Road, LP Bankr. E.D. Pa. Case No. 12-20714 Chapter 11 Petition filed November 15, 2012 See http://bankrupt.com/misc/paeb12-20714.pdf represented by: Michael Gumbel, Esq. Bainbridge Law Center E-mail: mgumbel@bainbridgelawcenter.com In re West Bradford Development Company, LLC Bankr. E.D. Pa. Case No. 12-20669 Chapter 11 Petition filed November 15, 2012 See http://bankrupt.com/misc/paeb12-20669.pdf represented by: Thomas Daniel Bielli, Esq. O'Kelly Ernst Bielli & Wallen E-mail: tbielli@oelegal.com In re Oak Lawn Memorial Gardens, Inc. Bankr. M.D. Pa. Case No. 12-06634 Chapter 11 Petition filed November 15, 2012 See http://bankrupt.com/misc/pamb12-06634.pdf represented by: Lawrence V. Young, Esq. CGA Law Firm E-mail: lyoung@cgalaw.com In re Mezzanine, Inc. dba Normandie Cafe & Bakery Bankr. D. Utah Case No. 12-34490 Chapter 11 Petition filed November 15, 2012 See http://bankrupt.com/misc/utb12-34490.pdf represented by: Paul James Toscano, Esq. The Law Office of Paul Toscano, P.C. E-mail: ptoscano@expresslaw.com In re Padow's Deli, Inc. Bankr. E.D. Va. Case No. 12-36583 Chapter 11 Petition filed November 15, 2012 See http://bankrupt.com/misc/vaeb12-36583.pdf represented by: Paula S. Beran, Esq. Tavenner & Beran, PLC E-mail: pberan@tb-lawfirm.com In re Padow's Hams & Deli, Inc. Bankr. E.D. Va. Case No. 12-36584 Chapter 11 Petition filed November 15, 2012 See http://bankrupt.com/misc/vaeb12-36584.pdf represented by: Paula S. Beran, Esq. Tavenner & Beran, PLC E-mail: pberan@tb-lawfirm.com In re BK Alliance Group, Inc. dba Bee Jay's Wash-n-Lube Bankr. W.D. Wis. Case No. 12-16272 Chapter 11 Petition filed November 15, 2012 See http://bankrupt.com/misc/wiwb12-16272.pdf represented by: Mart W. Swenson, Esq. Laman & Swenson Law Offices E-mail: marts@lamanswensonlaw.com In re Viking Tool and Mfg. Inc. Bankr. W.D. Wis. Case No. 12-16248 Chapter 11 Petition filed November 15, 2012 See http://bankrupt.com/misc/wiwb12-16248.pdf represented by: Galen W. Pittman, Esq. Galen W. Pittman, S.C. E-mail: galenpittman@centurytel.net In re Hugo Paulson Bankr. D. Ariz. Case No. 12-24935 Chapter 11 Petition filed November 16, 2012 In re Subodh Bhagat Bankr. C.D. Calif. Case No. 12-23211 Chapter 11 Petition filed November 16, 2012 In re Schram Rod Bankr. C.D. Calif. Case No. 12-23241 Chapter 11 Petition filed November 16, 2012 In re Michelle Truffaut Bankr. C.D. Calif. Case No. 12-48230 Chapter 11 Petition filed November 16, 2012 In re Danielle Frankina Bankr. N.D. Calif. Case No. 12-58296 Chapter 11 Petition filed November 16, 2012 In re Steven Lewark Bankr. N.D. Ill. Case No. 12-40788 Chapter 11 Petition filed November 16, 2012 In re Hani Abdallah Bankr. N.D. Ill. Case No. 12-45458 Chapter 11 Petition filed November 16, 2012 In re Yolanda Gunzel Bankr. S.D. Ill. Case No. 12-41397 Chapter 11 Petition filed November 16, 2012 In re Daniel Durkes Bankr. D. Kans. Case No. 12-41832 Chapter 11 Petition filed November 16, 2012 In re Elias Chahwan Bankr. D. Mass. Case No. 12-19111 Chapter 11 Petition filed November 16, 2012 In re JSH Enterprises, LLC Bankr. D. Mass. Case No. 12-31710 Chapter 11 Petition filed November 16, 2012 See http://bankrupt.com/misc/mab12-31710.pdf Filed as Pro Se In re Pamela Tschudy Bankr. N.D. Ohio Case No. 12-18452 Chapter 11 Petition filed November 16, 2012 In re United Information Systems Inc. Bankr. W.D. Pa. Case No. 12-25637 Chapter 11 Petition filed November 16, 2012 See http://bankrupt.com/misc/pawb12-25637.pdf represented by: Christopher M. Frye, Esq. STEIDL & STEINBERG E-mail: chris.frye@steidl-steinberg.com In re Martin Espinosa Bankr. M.D. Tenn. Case No. 12-10579 Chapter 11 Petition filed November 16, 2012 In re Shelbyville Warehouse, LLC Bankr. M.D. Tenn. Case No. 12-10602 Chapter 11 Petition filed November 16, 2012 See http://bankrupt.com/misc/tnmb12-10602.pdf represented by: Steven L. Lefkovitz, Esq. LAW OFFICES LEFKOVITZ & LEFKOVITZ E-mail: slefkovitz@lefkovitz.com In re Bernard Durbin Bankr. W.D. Va. Case No. 12-62618 Chapter 11 Petition filed November 16, 2012 In re Carl Perry Enterprise, Inc. Bankr. N.D. Ga. Case No. 12-78803 Chapter 11 Petition filed November 17, 2012 See http://bankrupt.com/misc/ganb12-78803.pdf represented by: Howard P. Slomka, Esq. Slomka Law Firm E-mail: ign@slomkalawfirm.com In re Mustafa Farooqi Bankr. N.D. Ill. Case No. 12-45613 Chapter 11 Petition filed November 17, 2012 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. 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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. 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