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/raid1/www/Hosts/bankrupt/TCR_Public/121217.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, December 17, 2012, Vol. 16, No. 350 Headlines 4KIDS ENTERTAINMENT: Judge OKs Reorganization Plan ACCESS MIDSTREAM: S&P Keeps 'BB-' Corporate Credit Rating AFFINION GROUP: Credit Loan Amendment No Impact on Moody's Ratings AMERICAN AIRLINES: Deal With CIT, BNY Mellon Approved AMERICAN AIRLINES: U.S. Bank Processing Deals Amended AMERICAN AIRLINES: Marathon Wants Payment of Fees and Expenses AMERICAN AIRLINES: Reports Corrected November 2012 Revenue ANTS SOFTWARE: Rik Sanchez Named Board Chairman ARCAS INTERMEDIATE-HOLDINGS: S&P Assigns 'B+' Corp. Credit Rating ARMTEC HOLDINGS: S&P Lowers CCR to 'B-' on High Leverage ATI ACQUISITION: S&P Withdraws 'D' CCR on Lack of Finc'l. Info ATRIUM COS: S&P Keeps 'CCC+' Corporate Credit Rating on Watch Neg AVANTAIR INC: Completes $2.8 Million Convertible Note Financing AVIVA USA: Moody's Downgrades Issuer Rating to 'Ba1' BAKERS FOOTWEAR: Court OKs Pachulski as Committee Counsel BERRY PLASTICS: Parent Guarantees Six Senior Secured Notes BLAST ENERGY: Acquires Interests in Mississippian Lime for $8.6MM BOMBARDIER INC: Fitch Withdraws Low-B Rating on Cancelled Notes BROADWAY FINANCIAL: Says Recapitalization Nearing Completion BUYERS ONLY: Case Summary & 11 Unsecured Creditors CAESARS ENTERTAINMENT: Prices $750MM Notes at 98.25% Issue Price CAESARS ENTERTAINMENT: Bank Debt Trades at 11% Off CANAL CAPITAL: Suspending Filing of Reports With SEC CASCADIA SCHOOL: Case Summary & 15 Unsecured Creditors CATASYS INC: Enters Into 46.9MM Shares Securities Purchase Pact CELL THERAPEUTICS: Further Amends Rights Pact with Computershare CENTRAL EUROPEAN: Hires A&M as Restructuring Advisor CENTRAL EUROPEAN: Rejects Shareholder Proposal to Provide Capital CEQUEL COMMUNICATIONS: Moody's Affirms 'B1' Corp. Family Rating CEQUEL COMMUNICATIONS: S&P Keeps 'B-' Rating on $1.25BB Sr. Notes CLEAR CHANNEL: Bank Debt Trades at 17% Off in Secondary Market CLEARWIRE CORP: Moody's Says Proposed Sprint Deal Credit Positive CLEARWIRE CORP: S&P Puts 'CCC' Corp. Credit Rating on Watch Pos COMMONWEALTH OF PUERTO RICO: Moody's Cuts Bond Ratings to 'Ba1' COMMUNITY BANK/OZARKS: Closed; Bank of Sullivan Assumes Deposits CSD LLC: Hires Lionel Sawyer as Special Counsel CSD LLC: Court Approves Munsch Hardt & Harr, P.C. as Attorneys CSD LLC: Court Approves Greene Infuso as Counsel D MEDICAL: Names David Schwartz as CEO, Yaacov Lev as Chairman DENNY'S CORP: Adopts Pre-Arranged Stock Trading Plan DEWEY & LEBOEUF: Seeks Extension of Case Removal Window DORSET INVESTMENT: Case Summary & 6 Unsecured Creditors DOVE CREEK: Voluntary Chapter 11 Case Summary DUNLAP OIL: Court OKs Peritus Commercial as Financial Advisor DUNLAP OIL: Gets Final Approval on Use of Cash Collateral EDISON MISSION: Bankruptcy Seen This Week; Kirkland on Board ELBIT VISION: Closes $500,000 Private Placement Financing FENWAL INC: S&P Withdraws 'B+' Corp. Credit Rating at Request FIDELITY & GUARANTY: S&P Raises Corp. Credit Rating to 'BB+' FIRST HORIZON: Fitch Lowers Subordinated Debt Rating to 'BB' FLAGSHIP FRANCHISES: Case Summary & 20 Largest Unsecured Creditors G & C CONSTRUCTION: Voluntary Chapter 11 Case Summary GLYECO INC: Receives $4.2 Million Proceeds from Offering GYMBOREE CORP: Moody's Reviews 'B3' CFR/PDR for Downgrade HENRY COUNTY: Suspends Filing of Reports with SEC HIGH LINER: S&P Revises Outlook on 'B' CCR on Improved Performance HIGHWOODS PROPERTIES: Fitch Puts Rating on Preferred Stock at 'BB' HII HOLDING: Moody's Assigns B2 Corp Family Rating; Outlook Stable HORIZON LINES: To Adjust Puerto Rico Service Schedule HOWELL TOWNSHIP: Fitch Cuts Rating on Two LTGO Bonds to Low-B IGLOO HOLDING: Moody's Rates $350MM Sr. Unsecured Notes 'Caa1' IGLOO HOLDINGS: S&P Lowers Corporate Credit Rating to 'B' INTERNAL FIXATION: Files for Chapter 7 Protection INTERNATIONAL TEXTILE: Appoints WL Ross Principal to Board IRVINE SENSORS: Extends Maturity of 2012 Notes to March 2013 JET WORKS: Case Summary & 20 Largest Unsecured Creditors KODIAK OIL: Moody's Raises Corp. Family Rating to 'B2' LA JOLLA: FDA Approves New Drug Application for for GCS-100 LCI HOLDING: Meeting to Form Creditors' Committee on Dec. 20 LEVI STRAUSS: Board Declares $25 Million Cash Dividend LIFECARE HOLDINGS: Inks Severance Agreement With Grant Asay LPATH INC: Agrees to Discontinue PEDigree Trial LUXEYARD INC: Former CEO Resigns from Board of Directors MAGNUM HUNTER: Moody's Rates $150MM Senior Unsecured Notes 'Caa1' MAGNUM HUNTER: S&P Revises Outlook on 'B-' CCR to Stable MIT HOLDING: Incurs $519,000 Net Loss in Third Quarter MGM RESORTS: Promotes Bill Hornbuckle to President & CMO MODERN PRECAST: Meeting to Form Creditors Panel on Dec. 17 MSR RESORT: Judge Approves Disclosure Statement MTS GOLF: Court Approves Forrest Richardson as Architect MTS GOLF: Court Approves Fleet-Fisher as Civil Engineer MUNICIPAL MORTGAGE: Raises $540 Million from New Bond Financing NET TALK.COM: Obtains $1 Million from 1080 NW 163 Drive NEW ENTERPRISE: S&P Keeps 'CCC-' Corp. Credit Rating on Watch Neg NEW PEOPLES: Shareholders Elect Three Directors to Board NEWMARKET CORP: S&P Assigns 'BB+' Corporate Credit Rating NEWPAGE CORP: U.S. Bankruptcy Court Confirms Chapter 11 Plan NORTEL NETWORKS: No Financial Statements for Third Quarter O'DONOGHUE HOLDINGS: Case Summary & Unsecured Creditor ORLANDO, FL: S&P Affirms 'BB' SPUR on Series 2008A Bonds OVERSEAS SHIPHOLDING: Shuman Files Class Action Lawsuit PENINSULA GAMING: S&P Lowers Corporate Credit Rating to 'B' PERRY INVESTMENT: Case Summary & 2 Unsecured Creditors PHOENIX COMPANIES: A.M. Best Puts 'bb-' ICR on Review PLANDAI BIOTECHNOLOGY: Michael Cronin Quits as Accountant PRECISION OPTICS: Amends 5.7 Million Common Shares Prospectus PRESSURE BIOSCIENCES: Appoints C. Mir as Chief Financial Officer R&A PETROLEUM: Case Summary & 3 Largest Unsecured Creditors RESIDENTIAL CAPITAL: Wants Lease Decision Deadline Extended RESIDENTIAL CAPITAL: Drennen, et al., Seek to Certify Class Claim RESIDENTIAL CAPITAL: AIG Asset, et al., Object to RMBS Settlement REVSTONE INDUSTRIES: Amends List of Largest Unsecured Creditors ROSETTA GENOMICS: Says Going Concern Doubt No Longer Exist SAINT PETER'S HOSPITAL: S&P Cuts Rating on $165MM Bonds to 'BB+' SECUREALERT INC: Gary Shelton, et al., Repurchase MMS SECUREALERT INC: Has $16.6 Million Loan Agreement With Sapinda SHERIDAN GROUP: George Whaling Retires from Board of Directors SHREEJI OIL: Voluntary Chapter 11 Case Summary SIRIUS XM: Moody's Lowers PDR to 'B1'; Outlook Stable SIRIUS XM: S&P Keeps 'BB' Rating on Senior Unsecured Debt SORENSON COMMS: Moody's Assigns '(P)Caa2' CFR; Outlook Stable SOUTH COUNTY HOSPITAL: Moody's Affirms 'Ba1' Bond Rating SPANSION INC: Wins OK on $24MM Patent Settlement With Tessera SPEEDEMISSIONS INC: Buys 5 Emission Testing Centers for $425,000 STERLING INVESTORS: A.M. Best Places 'B' FSR Under Review SUPERMEDIA INC: Reaches Agreement With Lender Steering Committee SUPERMEDIA INC: Restructuring Capital Holds 10.8% Equity Stake STRATEGIC AMERICAN: Add'l Results for Namibia Concession Out TCF FINANCIAL: Fitch Rates $115-Mil. Series B Pref. Stock 'B+' TELEDRAFT INC: Case Summary & 11 Largest Unsecured Creditors THERMOENERGY CORP: Obtains $3.7-Mil. Bridge Loan from Investors TOPS HOLDING: Prices $460 Million of 8.875% Senior Secured Notes TRANSFIRST HOLDINGS: S&P Affirms 'B' Corporate Credit Rating TRIBUNE CO: Suit vs. Workers, Investors to Remain After Exit TRIBUNE CO: Wins Approval of Settlement With EZ Buy, 2 Others TRIBUNE CO: Has OK of Deal With New Line and Warner Bros. TRIBUNE CO: Bank Debt Trades at 17% Off in Secondary Market TRILOGY ENERGY: DBRS Finalizes 'B' Provisional Rating TXU CORP: Bank Debt Trades at 27% Off in Secondary Market UFOOD RESTAURANT: Files for Chapter 11 to Resolve Cash Woes UNI-PIXEL INC: To Develop Next-Generation Touch Screens UNITED CONTINENTAL: Pilots Ratify Collective Bargaining Deal US AIRWAYS: S&P Assigns 'B+' Rating on $128MM Class B Certificates VERMILLION INC: Signs Separation Agreement With Former CEO VITESSE SEMICONDUCTOR: Selling 10MM Common Shares at $1.75 Apiece VHGI HOLDINGS: Authorized Capital Stock Hiked to 260MM Shares VIGGLE INC: Obtains Additional $500,000 from Sillerman Investment VOTORANTIM CEMENT: S&P Raises CCR From 'BB+' on Parental Support W.R. GRACE: Lenders, Others File Opening Briefs on Plan Appeal W.R. GRACE: Cash-Settled Collar Agreement Approved W.R. GRACE: $100-Mil. Qualified Settlement Fund Has Go Signal WELDING APPARATUS: Voluntary Chapter 11 Case Summary WESCO INT'L: Term Loan Upsize No Impact on Moody's Ratings WSG ARUNDEL: Case Summary & Lists of Creditors WWDT ENTERPRISES: Case Summary & 2 Largest Unsecured Creditors X-CHANGE CORP: Defaults Under 4 Tech Purchase Agreement Z.U.P. HOLDINGS: Voluntary Chapter 11 Case Summary ZALE CORP: Files Form 10-Q, Incurs $28.3MM Loss in Oct. 31 Qtr. * Fitch's Outlook for Produce Industry is Stable for 2013 * BOND PRICING: For Week From Dec. 10 to 14, 2012 ********* 4KIDS ENTERTAINMENT: Judge OKs Reorganization Plan -------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Shelley C. Chapman sent 4Kids Entertainment Inc. on its way out of Chapter 11 protection, overruling an objection by the American Kennel Club Inc. over a licensing agreement and approving its reorganization plan, which calls for the full payment of claims. Bankruptcy Law360 relates that Judge Chapman confirmed the Debtor's Chapter 11 plan following a brief hearing. The Plan also calls for the preservation of common stock in the children's entertainment company. About 4Kids Entertainment New York-based 4Kids Entertainment, Inc., dba 4Kids, is an entertainment and media company specializing in the youth oriented market, with operations in these business segments: (i) licensing, (ii) advertising and media broadcast, and (iii) television and film production/distribution. The parent entity, 4Kids Entertainment, was organized as a New York corporation in 1970. 4Kids filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code to protect its most valuable asset -- its rights under an exclusive license relating to the popular Yu-Gi-Oh! series of animated television programs -- from efforts by the licensor, a consortium of Japanese companies, to terminate the license and force 4Kids out of business. 4Kids and affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims and notice agent. BDO Capital Advisors, LLC, is the financial advisor and investment banker. EisnerAmper LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids Entertainment disclosed $78,397,971 in assets and $86,515,395 in liabilities as of the Chapter 11 filing. Hahn & Hessen LLP serves as counsel to the Official Committee of Unsecured Creditors. Epiq Bankruptcy Solutions LLC serves as its information agent for the Committee. The Consortium consists of TV Tokyo Corporation, which owns and operates a television station in Japan; ASATSU-DK Inc., a Japanese advertising company; and Nihon Ad Systems, ADK's wholly owned subsidiary. The Consortium is represented by Kyle C. Bisceglie, Esq., Michael S. Fox, Esq., Ellen V. Holloman, Esq., and Mason Barney, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP, in New York. In January 2012, the bankruptcy judge ruled in favor of 4Kids, deciding that the Yu-Gi-Oh! property license agreement between the Debtor and the licensor was not effectively terminated prior to the bankruptcy filing. Following the ruling, 4Kids entered into a settlement where it would receive $8 million to end the dispute over its valuable Yu-Gi-Oh! Property. 4Kids scheduled a Dec. 13 hearing for approval of its liquidating Chapter 11 plan. The plan proposes to pay $6.25 million in unsecured claims in full with interest. Secured creditors were already fully paid. After bankruptcy expenses are paid, equity holders will receive 69 cents a share on each of the about 13.7 million shares outstanding. ACCESS MIDSTREAM: S&P Keeps 'BB-' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB-' issue-level rating to The Williams Cos. Inc.'s proposed $850 million senior unsecured notes. The company intends to use net proceeds from the notes to fund a portion of its $2.4 million investment in Access Midstream Partners L.P. (BB-/Stable/--). As of Sept. 30, 2012, Williams had total consolidated debt of about $9.5 billion. Tulsa-based Williams is a diversified energy company that operates interstate gas pipelines, natural gas liquids transportation pipelines, and gathering and processing assets. Williams also owns about 70% of master limited partnership Williams Partners L.P. (BBB/Stable/--). "For 2013, we forecast that Williams will achieve a consolidated total debt to EBITDA ratio of about 4.4x," S&P said. The Williams Cos. Inc. Corporate credit rating BBB/Stable/-- New Rating $850 mil senior unsecured notes BBB- AFFINION GROUP: Credit Loan Amendment No Impact on Moody's Ratings ------------------------------------------------------------------ Moody's Investors Service said that, while modestly positive, Affinion Group Holdings, Inc.'s amendment to its credit agreement does not currently impact its B3 Corporate Family Rating, SGL-3 Speculative Grade Liquidity Rating, or negative outlook. Affinion is a leading provider of marketing services and loyalty programs to many of the largest financial service companies globally. The company provides credit monitoring and identity- theft resolution, accidental death and dismemberment insurance, discount travel services, loyalty programs, and various checking account and credit card enhancement services. Affinion is 70% owned by private equity sponsor Apollo Management V, L.P. and generates revenues of about $1.5 billion annually. AMERICAN AIRLINES: Deal With CIT, BNY Mellon Approved ----------------------------------------------------- American Airlines Inc. obtained court approval of a deal with C.I.T. Leasing Corp. and The Bank of New York Mellon. The deal calls for the settlement of claims of C.I.T. and BNY Mellon, the trustee under an indenture related to an aircraft identified by U.S. Federal Aviation Administration Number N627AA. Pursuant to the terms of the agreement, C.I.T. can assert a claim against American Airline's estate as damages for any breach, termination or rejection of the lease for the aircraft. The agreement contains confidential information and is not publicly available. American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: U.S. Bank Processing Deals Amended ----------------------------------------------------- The U.S. Bankruptcy Court in Manhattan gave AMR Corp. a go-signal to amend certain agreements between U.S. Bank N.A. and the company's regional carrier American Airlines Inc. The agreements cover the processing of customer transactions using credit cards issued by Visa Inc. and MasterCard Inc. at different locations where American Airlines Inc. sells its products. The term of each of the agreements is set to expire on July 1, 2013. The amendment allows American Airlines to continue processing customer transactions made using VISA and MasterCard credit cards in the ordinary course of business. The bankruptcy court also authorized AMR to reaffirm the guaranty dated March 16, 2007, under which the company guarantied the obligations of American Airlines under the agreements. The agreements reportedly contain confidential information and are not publicly available. American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Marathon Wants Payment of Fees and Expenses -------------------------------------------------------------- Marathon Asset Management LP has filed an application with the U.S. Bankruptcy Court in Manhattan for payment of fees and expenses. The hedge fund manager seeks payment of up to $150,000 in fees and expenses "for making a substantial contribution" in AMR Corp.'s bankruptcy case, according to the court filing. Marathon recounted in the court filing its efforts to protect the rights of American Airlines Inc. in connection with a pre- bankruptcy deal it made with American Eagle Airlines Inc. to turn over Embraer jets worth $1.8 billion. The deal resulted in American Airlines assuming $2.26 billion in debt, raising questions on whether the airline received less in value than it gave up when it assumed the liability on the planes. Marathon said its efforts to protect American Airlines benefited the airline's creditors while providing no benefit to the hedge fund manager itself. A court hearing to consider approval of the application is scheduled for December 19. Objections are due by December 12. American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Reports Corrected November 2012 Revenue ---------------------------------------------------------- AMR Corporation said that on Dec. 10, its press release announcing November 2012 Revenue and Traffic results contained inadvertent errors in the year-to-date totals, and in reported regional and consolidated traffic and capacity results. There were no changes to the mainline traffic information or the unit revenue results for November. The complete corrected press release is as follows: AMR Corporation reported November 2012 consolidated revenue and traffic results for its principal subsidiary, American Airlines, Inc., and its wholly owned subsidiary, AMR Eagle Holding Corporation. Consolidated capacity and traffic were 2.1 percent and 0.9 percent higher year-over-year respectively, resulting in a consolidated load factor of 80.7 percent, a decrease of 1.0 points versus the same period last year. International traffic was 4.6 percent higher on a 5.2 percent increase in capacity, resulting in an international load factor of 78.9 percent, 0.5 points lower compared to the same period last year. The Atlantic entity recorded the highest load factor of 79.9 percent, an increase of 2.3 points versus November 2011. Domestic load factor decreased 1.5 points to 82.8 percent, as traffic decreased 1.2 percent on 0.6 percent more capacity. November's consolidated passenger revenue per available seat mile (PRASM) decreased an estimated 2.3 percent versus the same period last year. American estimates that Hurricane Sandy and the early November snow storm in the Northeast negatively impacted November revenues by approximately $25 million, and lowered unit revenue by 1.5 percentage points. Separately, operational disruptions that took place in late September and early October affected bookings for November travel, negatively impacting revenues in the month by an estimated $30 million, and lowered unit revenue by an additional 1.8 percentage points. American estimates that absent these events, PRASM in November 2012 would have been approximately 1.0 percent higher than in November 2011. On a consolidated basis, the company boarded 8.6 million passengers in November. American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ANTS SOFTWARE: Rik Sanchez Named Board Chairman ----------------------------------------------- ANTs software Inc., by unanimous consent of its Board of Directors, appointed Rik Sanchez the current company Chief Executive Officer, to Chairman of the Board of Directors. On Dec. 7, 2012, Bruce Brown was appointed to the Board of Directors of ANTs. Mr. Brown currently serves as the COO Freebeepay, Inc. He is a former CEO of Instawares, and SVP & CIO of T-Mobile and PowerTel. Legendary in world of telecommunication, Mr. Brown was instrumental in the explosive growth at Bellsouth during his 18 years there. Mr. Bruce brings more than 30 years of business leadership experience, as well as expertise in ecommerce, domestic & international wireless communications, software development and operations. Bruce came to these positions after 18 years of increasingly responsible roles in BellSouth's International, Mobility and Information Systems businesses. On Dec. 7, 2012, Elise Vetula was appointed as Chief Financial Officer and member of the board of directors ANTs. Elise joins ANTs from NextTraq, where she served as the Controller, and brings more than 20 years of experience as a CFO and in other leadership positions in the financial arena, with organizations such as Char Baxter Communications. A very talented professional, Elise has a solid history reorganizing, streamlining, and strengthening financial operations to maximize performance and profitability. Additionally, Elise has the in-depth experience across all core business and operations functions, is a proven, respected, and responsible leader with extensive experience in all areas of financial planning and reporting, 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. ARCAS INTERMEDIATE-HOLDINGS: S&P Assigns 'B+' Corp. Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to ARCAS Intermediate-Holdings Entity (Sequa Auto). The outlook is stable. "At the same time, we assigned a 'B+' issue-level rating to the company's $275 million senior secured credit facility, composed of a $220 million term loan B and $35 million revolver (with U.S.-based ARC Automotive Group Inc. and Casco Automotive Group Inc. as borrowers), and a $20 million revolver (with ARCAS Automotive Group (Luxco 1) S.� r.l., as borrower). We assigned a recovery rating of '3' to the facility, indicating our expectation of a meaningful recovery (50%-70%) in a default scenario," S&P said. "The ratings on Sequa Auto reflect what Standard & Poor's considers a 'weak' business risk profile, which incorporates the company's exposure to cyclical auto production levels, and limited scale and customer diversity--which balanced growth prospects as a result of Sequa Auto's geographic footprint somewhat offset," said Standard & Poor's credit analyst Nishit Madlani. "Our view of its "aggressive" financial risk profile reflects leverage expectations lower than 4.3x, along with fair prospects for positive free cash flow generation over the next two years." Sequa Auto is a manufacturer of airbag inflators for use in driver, passenger, side-impact, and curtain modules. The company also designs power outlets, connectivity devices, and select automotive sensors. "Our financial risk profile assessment incorporates the leveraged buyout (LBO) transaction, which was financed with a $275 million senior secured credit facility (including a $225 million first- lien term loan and an undrawn $55 million revolver) along with a common equity contribution by the private equity sponsor The Jordan Co. (not rated)," S&P said. "Pro forma for the transaction, we estimate leverage to remain less than 4.3x over the next two years. For the rating, we expect the ratio of free operating cash flow to adjusted debt to be in the mid-single digits. We do not incorporate any large debt- financed acquisitions or a significant dividend payout to the sponsors in our base case, but we expect its financial policies to be aggressive given its private-equity ownership structure, which is likely to preclude sustained deleveraging," S&P said. "Our business risk profile assessment incorporates the company's direct exposure to original equipment (OE) production levels, a fairly concentrated overall customer base, and its limited track record with the new sponsor-ownership. The company's longstanding customer relationships coupled with recovering demand in most of its end markets have enabled fair EBITDA margins over the past few years. However, we think demand weakness in Europe over the next year, and a slow recovery in other end markets will likely limit growth beyond the mid-single digits and EBITDA margin expansion over the next two years. In our base-case scenario we anticipate some incremental stand-alone costs," S&P said. "In our view, the company's overall geographic diversity somewhat offsets its customer concentration, given the favorable alignment with global light vehicle production compared with nearly all rated auto suppliers. In our view, this gives Sequa Auto's inflator segment the potential to benefit from future automotive safety regulations worldwide, particularly emerging markets where penetration levels and growth rates will be likely higher. Increasing electronic content per vehicle will drive growth in its power outlets and sensor segment. However, demand for OE is relatively mature in North America and Europe, and exhibits some cyclicality," S&P said. "Sequa Auto's current market share in its high-volume power outlets and its proprietary propellant technology for its inflators also support our expectations for steady margins over the next two years. However, larger auto suppliers such as Autoliv and Takata that have greater scale and financial and technological resources somewhat offset its competitive strengths within its inflator segment," S&P said. "Sequa Auto's exposure to commodity costs is meaningful, and we expect any potential short-term fluctuations in commodity costs to affect free cash flow generation given the lack of pass-through mechanisms in contracts with customers. However, the company has demonstrated some ability to offset this risk in the past. This, coupled with modest capital expenditures of about 2.5% of revenues annually and modest levels of working capital, led to adequate cash flow generation even during 2008-2009. We expect this to continue in 2013-2014," S&P said. "Our economists currently forecast U.S. GDP growing modestly in 2013 and 2014. We expect unemployment will continue to be high, at above 7% for both years. In 2013, light vehicle production is likely to improve in the low-single-digit area in North America, remain roughly flat in Europe, and improve in the high-single- digit area in the rest of the world. Considering these macroeconomic and industry-specific assumptions, and some potential legislation-driven growth in its end markets, our forecast for Sequa Auto's operating performance over the next two years incorporates," S&P said: "Sales growth in the low- to mid-single digits over the next two years, as we do not expect demand for its end products to outperform average auto-component supplier growth estimates," S&P said; EBITDA margin should remain steady--as long as demand recovery in Sequa Auto's end markets is consistent with our base-case; and The ratio of free operating cash flow to (adjusted) debt should remain in the mid-single digits because of increasing capital expenditure requirements for managing inflator line and other capacity expansion to support recent business wins. "Overall, we believe there is a cushion in Sequa Auto's credit metrics under our base case for the rating. This partly alleviates the risks of its relatively limited customer diversity, scale, and inherent exposure to cyclical auto production levels," S&P said. "The stable outlook reflects our expectation that the company's leverage will remain under 4.3x with free operating cash flow generation in mid-single digits as a ratio of its adjusted debt for the next 12 months. This is assuming a slow recovery in its end markets, limiting any significant volume or margin expansion," S&P said. "We could lower our rating if FOCF turned negative for consecutive quarters, which would reduce liquidity. For example, we estimate that if EBITDA margins fell by more than 200 basis points over the next 12 months and revenue growth and working capital performance are less favorable than we expect, the company could begin to use cash and need to borrow a meaningful amount under its revolver. We could also lower the ratings if the company's leverage were to approach 5x because of shareholder-driven actions such as large debt-financed acquisitions or dividends to the new sponsors," S&P said. "We are unlikely to raise the ratings over the next 12 months, given the company's business risk profile and private-equity ownership," S&P said. ARMTEC HOLDINGS: S&P Lowers CCR to 'B-' on High Leverage -------------------------------------------------------- Standard & Poor's Rating Services lowered its long-term corporate credit rating on Guelph, Ont.-based infrastructure products manufacturer Armtec Holdings Ltd. to 'B-' from 'B'. The outlook is stable. "We also lowered our issue-level rating on the company's C$150 million senior unsecured notes to 'CCC' from 'B-' and revised our recovery rating on this debt to '6' from '5'. The '6' recovery rating corresponds with negligible (0%-10%) recovery and an issue- level rating two notches below the corporate credit rating. The revised recovery rating primarily reflects the company's decision to accrue interest on its Brookfield credit facility, thereby causing lower expected recovery on the senior unsecured notes," S&P said. "We base the downgrade on our expectation that Armtec's credit metrics will remain weak in the near term, with adjusted debt-to- EBITDA above 7x and funds from operations-to-debt below 10% for at least the next few years," said Standard & Poor's credit analyst Jatinder Mall. "These credit metrics typically correspond to a 'B- ' rating when coupled with a 'vulnerable' business risk profile," S&P said. "The downgrade also reflects our belief that the company has limited ability to absorb either a slowdown in end-market demand or operational missteps," Mr. Mall added. "This is an important consideration, particularly in light of management's recent assessment that demand for the company's products and solutions is softening slightly and our belief that these risks are interrelated; in the past, slowing demand has caused firms (including Armtec) to bid at margins that leave little room for error or to pursue work outside of their core competencies," S&P said. "We base our ratings on Armtec on its consolidation with parent Armtec Infrastructure Inc. (not rated). The ratings on Armtec reflect what Standard & Poor's view of the company's financial risk profile, which we characterize as 'highly leveraged.' The ratings also reflect our assessment of the company's business risk profile as vulnerable, given its exposure to the cyclical construction industry and volatile raw-material costs. Somewhat offsetting these weaknesses, in our opinion, are the company's end-market and geographic diversity," S&P said. Armtec is a leading Canadian manufacturer and marketer of infrastructure products, offering a range of construction/infrastructure products and engineered solutions for customers in a cross-section of industries located in each main region of Canada, as well as in selected markets globally. "The stable outlook reflects our expectation that Armtec will continue to generate EBITDA in the range of C$40 million-C$50 million in the near term, which based on our current assumptions should be sufficient to fund necessary capital expenditures and minimal debt repayment in the next several years. We could lower the ratings if trailing 12-month EBITDA declines below C$40 million or if end market demand continues to weaken. In our view, either of these circumstances could pressure liquidity, particularly if the company is obligated to pay interest on a cash basis. We are unlikely to raise the ratings in the near term given our view that leverage will remain elevated for a prolonged duration. However, we could consider an upgrade if adjusted debt- to-EBITDA improves to about 5.5x and interest coverage to about 2.0x," S&P said. ATI ACQUISITION: S&P Withdraws 'D' CCR on Lack of Finc'l. Info -------------------------------------------------------------- Standard & Poor's Ratings Services withdrew all of ratings on North Richmond Hills, Texas-based ATI Acquisition Co. The corporate credit rating and all issue-level ratings were rated 'D' at the time of withdrawal. The ratings were withdrawn because of a lack of financial information on the company. ATRIUM COS: S&P Keeps 'CCC+' Corporate Credit Rating on Watch Neg ----------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on Dallas- based Atrium Cos. Inc., including the 'CCC+' corporate credit rating, will remain on CreditWatch with negative implications, where they were initially placed on Sept. 21, 2012, following a tightening of its senior secured leverage covenant. "We are maintaining the CreditWatch on Atrium despite approximately $5.7 million in equity contributions by the company's owners," said Standard & Poor's credit analyst Maurice Austin. "While the equity infusion provides near-term covenant relief, operating performance will need to improve as the senior secured leverage covenant steps down to 5.5x on Jan. 1, 2013, and we estimate that covenant headroom will still be below 10% unless the covenant requirements are re-negotiated." The corporate credit rating on Atrium also reflects what Standard & Poor's considers to be its "highly leveraged" financial risk profile and its "vulnerable" business risk profile. Risks include a double-digit debt to EBITDA ratio as of Sept. 30, 2012, and the company's presence in the highly competitive and fragmented windows industry and its exposure to volatile raw material costs, especially resin and aluminum. AVANTAIR INC: Completes $2.8 Million Convertible Note Financing --------------------------------------------------------------- Avantair, Inc., closed on $2.8 million of Senior Secured Convertible Notes financing. These notes are convertible into shares of the company's common stock at $0.25 per share and were issued with warrants to purchase additional shares of common stock over a five year period at $0.50 per share. The notes have a three year term and an interest rate at 2% payable per annum payable at maturity, subject to increase in certain circumstances. This financing was led by members of the Company's Board of Directors. In addition, the Company restructured its existing aircraft financing arrangements with Midsouth Services, Inc., reducing its monthly lease payments by over $1.8 million during the upcoming 15 months and extending the maturities on two aircraft which become due during the Company's current fiscal quarter. The Company also further amended its Sept. 28, 2012, Amended and Restated Warrant Agreement and Sept. 28, 2012, Restricted Stock Agreement with LW Air. In consideration, Midsouth Services and affiliates of LW Air received shares of the Company's common stock and warrants valued similarly to the stock and warrants underlying the Senior Secured Convertible Notes. "We believe that this new round of financing will allow us to continue making progress on our flight operations and customer service initiatives," said Steven Santo, chief executive officer of Avantair. "Our Board of Directors and primary aircraft providers played a major role in our achieving today's results and providing additional support for our long term business model. Additionally, I am grateful for the continued strong support from our loyal owner group." The notes and warrants were issued in a private placement and have not been registered under the Securities Act of 1933, as amended, or any state securities laws and unless so registered, may not be offered or sold in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. A detailed copy of the Form 8-K is available for free at: http://is.gd/q5Dg20 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'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. AVIVA USA: Moody's Downgrades Issuer Rating to 'Ba1' ---------------------------------------------------- Moody's Investors Service has downgraded the insurance financial strength (IFS) rating of Aviva Life and Annuity Company (Aviva Life) to Baa1 from A1 and the long-term issuer rating of intermediate U.S. holding company, Aviva USA Corporation, to Ba1 from Baa1. All of the ratings have been assigned a developing outlook. These actions conclude the ratings review, established on June 27, 2012, which was prompted by the ultimate parent, Aviva Plc's (Aviva, A3 subordinated debt rating, negative outlook) strategic review of its business segments. Ratings Rationale Moody's said that the downgrade of Aviva Life and related entities was driven by Aviva Plc's announcement in the group's Q3 results that it is in discussions with external parties which may lead to a sale of its US operations. The downgrade, which lowered the rating to the standalone credit profile, reflects the removal of three notches of implicit support in the ratings from the ultimate parent, given Aviva plc's stated intentions. According to Moody's Vice President Neil Strauss, "Recent developments make it clear that the US operations are non-core to Aviva Plc, implying an increased probability of being sold, and we would expect that the US operations will receive limited financial support going forward, regardless of whether or not a sale of Aviva USA is executed." The rating agency commented that the developing outlook reflects the various potential outcomes of a sale of the company, which could result in Aviva Life being acquired by a company that has lower, higher, or the same creditworthiness as Aviva Life. In addition, the amount of implicit and/or explicit support from the buyer, as well as business strategy, capital management, and transaction financing considerations would influence the positioning of the ratings post-close. Moody's would also take into account the contingency of a transaction not taking place and Aviva plc maintaining ownership. As the parent company has expressed its intentions to maintain more capital on a group basis, Moody's expects minimal support for the US operations to be forthcoming. Aviva Plc has already taken an $1.4 billion write-down of intangibles associated with its US operations during 2012 and has acknowledged that a sale of the US operations would be at a substantial discount to IFRS book value. The rating agency said that the ratings could be upgraded if a sale is consummated with an entity whose credit quality is greater than that of Aviva Life together with significant financial support. Conversely, the following could lead to a downgrade of Aviva Life's ratings: (1) sale to an entity with a weaker credit profile than Aviva Life and/or plans to materially lower capital levels at Aviva Life, (2) substantial deterioration in the business or financial profile of Aviva Life post-close or (3) no sale is executed and Aviva Life is placed into runoff. The following ratings were downgraded and assigned a developing outlook: Aviva Life and Annuity Company - insurance financial strength rating to Baa1 from A1; Aviva USA Corporation - issuer rating to Ba1 from Baa1; General Repackaging ACES SPC 2007-4 - backed senior secured debt rating to Baa1 from A1; General Repackaging ACES SPC 2007-5 - backed senior secured debt rating to Baa1 from A1. Aviva Life and Annuity Company markets and underwrites life insurance and annuity products in the U.S. As of September 30, 2012, the company, which is headquartered in Iowa, had consolidated statutory assets in the insurance operating companies of approximately $52 billion and combined total adjusted capital of $3.1 billion. The principal methodology used in this rating was Moody's Global Rating Methodology for Life Insurers published in May 2010. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations. BAKERS FOOTWEAR: Court OKs Pachulski as Committee Counsel --------------------------------------------------------- The Official Committee of Unsecured Creditors in the bankruptcy of Bakers Footwear Group Inc. sought and obtained permission from the U.S. Bankruptcy Court to retain Pachulski Stang Ziehl & Jones LLP as counsel, nunc pro tunc to Oct. 17, 2012. Bradford J. Sandler attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm's hourly rates are: Professional Rates ------------ ----- Partners $525 - $975 Of Counsel $450 - $855 Associates $395 - $525 Paralegals $210 - $275 The attorneys and paralegals designated to represent the Committee, and their current standard hourly rates are: Professional Position Hourly Rate ------------ -------- ----------- Bradford J. Sandler Partner $695.00 Shirley S. Cho Of counsel $675.00 Jason Rosell Associate $425.00 Margaret L. McGee Paralegal $275.00 To the best of the Committee's knowledge, neither PSZJ, nor any of its attorneys, holds or represents any interest adverse to the Committee or the Debtor's estate in the matters on which PSZJ is to be retained. About Bakers Footwear Bakers Footwear Group Inc., a mall-based retailer of shoes for young women, filed for bankruptcy protection (Bankr. E.D. Mo. Case No. 12-49658) in St. Louis on Oct. 3, 2012, after announcing a plan to close stores and reduce costs. Bakers was founded in St. Louis in 1926 as Weiss-Kraemer, Inc., later renamed Weiss and Neuman Shoe Co., a regional chain of footwear stores. In 1997, Bakers was acquired principally by its current chief executive officer, Peter Edison, who had previously served in various senior management positions at Edison Brothers Stores Inc. In June 1999, Bakers purchased selected assets of the "Bakers" and "Wild Pair" footwear retailing chains from the bankruptcy estate of Edison Brothers. The "Bakers" footwear retailing chain was founded in 1924 and is the third-oldest soft goods retail concept still in operation in the United States. In February 2001, the Debtor changed its name to Bakers Footwear Group, Inc. In February 2004, Bakers conducted an initial public offering of its common stock. Bakers' common stock is quoted under the ticker symbol "BKRS" on the, the OTC Markets Group's quotation platform. As of the Petition Date, Bakers operates roughly 215 stores nationwide. In November 2012, the U.S. Bankruptcy Court in St. Louis authorized the company to hire a joint venture between SB Capital Group LLC and Tiger Capital Group LLC as agents to conduct closing sales for 150 stores. Bankruptcy Judge Charles E. Rendlen III presides over the case. Brian C. Walsh, Esq., David M. Unseth, Esq., and Laura Uberti Hughes, Esq., at Bryan Cave LLP, serve as the Debtor's counsel. Alliance Management serves as financial and restructuring advisors. Donlin, Recano & Company, Inc., serves as claims agent. The petition was signed by Peter A. Edison, chief executive officer and president. The Company's balance sheet at April 28, 2012, showed $41.90 million in total assets, $59.49 million in total liabilities and a $17.59 million total shareholders' deficit. Counsel for Crystal Financial, the DIP Lender, are Donald E. Rothman, Esq., at Riemer & Braunstein LLP; and Lisa Epps Dade, Esq., at Spencer, Fane, Britt & Brown, LLP. Bradford Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. BERRY PLASTICS: Parent Guarantees Six Senior Secured Notes ---------------------------------------------------------- Berry Plastics Group, Inc., the parent of Berry Plastics Corporation, became a guarantor of the following securities issued by the BPC and guaranteed by certain subsidiaries of BPC: (i) the 9.75% Second Priority Senior Secured Notes due 2021; (ii) the 9 1/2% Second Priority Senior Secured Notes due 2018; (iii) the First Priority Senior Secured Floating Rate Notes due 2015; (iv) the 8 1/4% First Priority Senior Secured Notes due 2015; (v) the Second Priority Senior Secured Floating Rate Notes due 2014; and (vi) the 10 1/4% Senior Subordinated Notes due 2016. About Berry Plastics Berry Plastics Corporation manufactures and markets plastic packaging products, plastic film products, specialty adhesives and coated products. At Jan. 2, 2010, the Company had more than 80 production and manufacturing facilities, primarily located in the United States. Berry is a wholly-owned subsidiary of Berry Plastics Group, Inc. Berry Group is primarily owned by affiliates of Apollo Management, L.P. and Graham Partners. Berry, through its wholly owned subsidiaries operates five reporting segments: Rigid Open Top, Rigid Closed Top, Flexible Films, Tapes/Coatings and Specialty Films. The Company's customers are located principally throughout the United States, without significant concentration in any one region or with any one customer. On Dec. 3, 2009, Berry Plastics obtained control of 100% of the capital stock of Pliant upon Pliant's emergence from reorganization pursuant to a proceeding under Chapter 11 for a purchase price of $602.7 million. Pliant is a leading manufacturer of value-added films and flexible packaging for food, personal care, medical, agricultural and industrial applications. The acquired business is primarily operated in Berry's Specialty Films reporting segment. The Company's balance sheet at April 2, 2011, showed $5.54 billion in total assets, $5.34 billion in total liabilities, and $202 million in total stockholders' equity. * * * Berry Plastics has a 'B3' corporate family rating, with stable outlook, from Moody's Investors Service. Moody's said in April 2010 that Berry's B3 CFR reflects weakness in certain credit metrics, financial aggressiveness and acquisitiveness and a continued difficult operating and competitive environment especially in the flexible plastics and tapes segments. The rating also reflects the Company's exposure to more cyclical end markets, relatively weak contracts with customers and a high percentage of commodity products. In November 2011, Standard & Poor's Ratings Services affirmed the 'B-' corporate credit rating on Berry and its holding company parent, Berry Plastics Group Inc. "The ratings on Berry reflect the risks associated with the company's highly leveraged financial profile and acquisition- driven growth strategy as well as its fair business risk profile," said Standard & Poor's credit analyst Cynthia Werneth. BLAST ENERGY: Acquires Interests in Mississippian Lime for $8.6MM ----------------------------------------------------------------- Condor Energy Technology LLC, a joint venture between PEDEVCO CORP. (formerly Blast Energy Services, Inc.) and MIE Jurassic Energy Corporation, an affiliate of MIE Holdings Corporation, entered into an Agreement for Purchase of Term Assignment for the acquisition of interests in the Mississippian Lime covering approximately 13,806 net acres located in Comanche, Harper, Barber and Kiowa Counties, Kansas, and Woods County, Oklahoma, and approximately 19.5 square miles of related 3-D seismic data, for an aggregate purchase price of $8,648,661. Pursuant to the Purchase Agreement, Condor has paid an initial deposit in the amount of $864,866, which is refundable in the event the sellers default under the Purchase Agreement prior to closing or if Condor terminates the Purchase Agreement due to sellers' failure to complete any of the necessary closing conditions for which it is responsible. Closing is anticipated to occur in February 2013, subject to certain customary closing conditions, including Condor's satisfactory completion of its due diligence review of the Mississippian Asset. In anticipation of the Purchase Agreement, on Nov. 26, 2012, the Company entered into a Term Assignment Evaluation Agreement with MIE providing that the Company and MIE will each share 50% of the purchase price, ownership interest, development and operational expenses with respect to the Mississippian Asset. MIE will be reimbursed its contributions, subject to certain deductions, if it elects not to participate in the acquisition prior to the closing, as provided in the Evaluation Agreement. The Company and MIE are partners in several joint ventures, and MIE Holdings Corporation is a significant stockholder of the Company. Pursuant to the Consulting Services Agreement, dated June 1, 2012, between Condor and its technical advisor, South Texas Reservoir Alliance LLC, upon closing of the acquisition of the Mississippian Asset, Condor will be obligated to pay STXRA a commission equal to $75 per net acre acquired, or approximately $1,035,450 assuming 13,806 net acres are acquired. The commission will be payable 80% in cash, and 20% in shares of preferred stock, in such series and at such value as the Company is issuing and selling to third parties at the time of the closing. Bylaws Amendment The Board of Directors of the Company unanimously approved an amendment to the Company's Bylaws to permit action by the stockholders by less than unanimous written consent, as authorized by the Company's Amended and Restated Certificate of Formation. The Bylaws previously required unanimous written consent for the stockholders to take action without a meeting. Reverse Stock Split The Company's Board of Directors approved a possible reverse stock split of the Company's common stock and Series A Convertible Preferred Stock in a ratio between 1-for-2 and 1-for-5, with the specific ratio and effective time (if the Company decides to proceed with the split) to be later determined by the Board of Directors. The Company's officers and directors, who hold an aggregate of 12,205,000 shares of common stock, representing approximately 58% of the common stock, also approved the Reverse Stock Split in their capacities as stockholders. The Reverse Stock Split was also approved by holders of an aggregate of 10,456,478 shares of Series A Convertible Preferred Stock, representing approximately 51% of the Series A Convertible Preferred Stock. About Blast Energy Houston, Texas-based Blast Energy Services, Inc., is seeking to become an independent oil and gas producer with additional revenue potential from its applied fluid jetting technology. The Company plans to grow operations initially through the acquisition of oil producing properties and then eventually, to acquire oil and gas properties where its applied fluid jetting process could be used to increase the field production volumes and value of the properties in which it owns an interest. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, GBH CPAs, PC, in Houston, Texas, expressed substantial doubt about Blast Energy Services' ability to continue as a going concern. The independent auditors noted that Blast incurred a loss from continuing operations for 2011, and has an accumulated deficit at Dec. 31, 2011. The Company reported a net loss of $4.14 million in 2011, compared with a net loss of $1.51 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $11.62 million in total assets, $3.96 million in total liabilities, $1.25 million in redeemable series A convertible preferred stock, and $6.41 million in total stockholders' equity. BOMBARDIER INC: Fitch Withdraws Low-B Rating on Cancelled Notes --------------------------------------------------------------- Fitch Ratings has withdrawn its 'BB' rating on Bombardier Inc.'s (BBD) cancelled issuance of approximately $1 billion of senior unsecured notes planned in mid-November 2012. Proceeds were intended to support BBD's liquidity during a period of high development spending on new aircraft programs including the CSeries. At Sept. 30, 2012, BBD's liquidity included approximately $2.1 billion of cash and availability under a three-year $750 million bank revolver that matures in 2015. In addition, BT has a EUR500 million revolver that also matures in 2015. Both facilities have been unused. BA and BT also have LC facilities. Other facilities include a performance security guarantee (PSG) facility, various bilateral agreements, committed sale and leaseback facilities and off-balance-sheet non-recourse factoring facilities at BT. Liquidity is offset by current debt maturities that totaled $46 million at Sept. 30, 2012. In addition to debt maturities, BBD had $520 million of other current financial liabilities including refundable government advances, sale and leaseback obligations, lease subsidies and other items. BBD's ratings incorporate the company's operating performance and negative free cash flow (FCF) that have been weaker than anticipated due to a slow recovery in Bombardier Aerospace's (BA) regional aircraft and light business jet markets and execution challenges at Bombardier Transportation (BT). The biggest driver of negative FCF is high capital spending for development programs at BA, which will continue through 2013 before starting to decline. Fitch anticipates consolidated FCF could potentially be negative into 2013 as capital spending at BA more than offsets FCF at BT, which could return to a positive level on an annual basis in 2013. Debt/EBITDA was 4.5 times (x) at Sept. 30, 2012 compared to 3.3x at the end of 2011. The increase in leverage reflects $500 million of new debt issued in the first quarter and weaker earnings during 2012. Credit metrics may not improve significantly until the regional aircraft and business jet markets recover and BA gets beyond its peak program expenditures. Large capital expenditures are centered on the CSeries, but Fitch does not consider the negative impact on FCF at this point in the development cycle to be unusual. First flight of the CS100 is scheduled to occur by the end of June 2013, roughly six months later than originally expected, with entry into service one year later. Entry into service for the CS300 is expected by the end of 2014. The delay of first flight for the CS100 announced in November 2012 does not increase project costs, but BBD may incur some penalties, and the delay slightly extends the negative cash cycle. Rating concerns include the slow recovery in demand for regional aircraft, execution risks at BT, contingent liabilities related to aircraft sales and financing, foreign currency risk, and large pension liabilities. BA's contingent liabilities have been generally stable or slightly lower, except trade-in commitments for used aircraft. These commitments have increased due to the growth in orders for larger business jets. Pension contributions represent a material use of cash. BBD contributed $373 million to its plans in 2011, not including defined contribution plans, and expects to contribute $394 million in 2012. Net pension obligations totaled $2.8 billion at the end of 2011, including $569 million of unfunded plans. Rating concerns are mitigated by BBD's diversification and strong market positions in the aerospace and transportation businesses and BA's portfolio of commercial aircraft and large business jets, which the company has continued to refresh and should position it to remain competitive when the market recovers. WHAT COULD TRIGGER A RATING ACTION Positive: A positive rating action is unlikely until FCF stabilizes, but future developments that may, individually or collectively, lead to higher ratings include: -- Orders and deliveries improve at BA; -- The CSeries program is executed successfully; -- BT resolves its operating challenges as expected; -- FCF improves materially as development spending for aerospace programs begins to wind down. Negative: Future developments that may, individually or collectively, lead to a negative rating action include: -- The CSeries encounters material delays or increased costs; -- Commercial and business jet markets experience an extended period of weak demand; -- FCF fails to improve at BT. Fitch currently rates BBD as follows: Bombardier, Inc. -- Issuer Default Rating 'BB'; -- Senior unsecured revolving credit facility 'BB'; -- Senior unsecured debt 'BB'; -- Preferred stock 'B+'. The Rating Outlook is Stable. The ratings affect approximately $5.6 billion of debt at Sept. 30, 2012 including sale and leaseback obligations. The amount is before adjustments for $347 million of preferred stock, which Fitch gives 50% equity interest, and the exclusion of adjustments for interest swaps reported in long-term debt as the adjustments are expected to be reversed over time. BROADWAY FINANCIAL: Says Recapitalization Nearing Completion ------------------------------------------------------------ Broadway Financial Corporation sent a letter to its stockholders informing them that the Company is preparing for completion of its previously reported recapitalization transactions and providing a summary of those transactions as currently contemplated. The letter further stated that the Company has received approval from the Nasdaq Stock Exchange to rely on an exemption from the Nasdaq stockholder approval requirements that would otherwise apply to the recapitalization that Nasdaq makes available to companies which demonstrate to Nasdaq's satisfaction that the financial viability of the company would be jeopardized by the delay that would be involved in obtaining stockholder approval. Completion of the recapitalization transactions is subject to regulatory approval and other material conditions and there is no assurance that such transactions will be completed. "The Recapitalization is designed to strengthen the common equity base of the Company, while substantially reducing the costs of servicing senior securities and simplifying our capital structure," the Company wrote. "We embarked on the Recapitalization because potential investors that we had approached in late 2010 and 2011 had consistently told us that they would only be willing to invest in Broadway if the senior securities were exchanged for common stock, or otherwise retired or reduced." The Recapitalization has three primary components: (1) the exchange of all of Broadway's five series of outstanding preferred stock, including the two series of Cumulative Preferred Stock held by the U.S. Treasury as part of its Troubled Asset Relief Program, for new common stock with an aggregate value equal to 50% of the aggregate liquidation preference of the preferred stock, plus the exchange of the accumulated dividends on the preferred stock held by the U.S. Treasury for new common stock with a value equal to 100% of the dividends. (2) the exchange of a portion of our $5 million senior bank loan for common stock with an aggregate value equal to 100% of the face amount of the debt that is exchanged (estimated to be approximately $2.54 million), plus forgiveness of all interest accrued to the closing date on the entire loan, and execution of a modified loan agreement for the remainder of the loan (approximately $2.46 million) with an extended maturity of over five years. (3) the private placement of new common stock in the estimated amount of approximately $4.1 million of gross proceeds, including $200,000 that has already been invested by directors and officers. The investors in the Recapitalization will own approximately 93% of the total number of shares outstanding after the closing of the Recapitalization. A copy of the letter to stockholders is available for free at: http://is.gd/9Xpg27 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. 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. 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. "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 such 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," according to the Company's quarterly report for the period ended Sept. 30, 2012. 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," accoring to the Company's quarterly report for the quarter ended Sept. 30, 2012. BUYERS ONLY: Case Summary & 11 Unsecured Creditors -------------------------------------------------- Debtor: Buyers Only Real Estate Agency, LLC 555 South 3rd Street Las Vegas, NV 89101 Bankruptcy Case No.: 12-23519 Chapter 11 Petition Date: December 11, 2012 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Timothy S. Cory, Esq. DURHAM JONES & PINEGAR 10785 W. Twain Avenue, Suite 200 Las Vegas, NV 89135 Tel: (702) 870-6060 Fax: (702) 870-6090 E-mail: tcory@djplaw.com Scheduled Assets: $1,919,460 Scheduled Liabilities: $3,429,873 The Company's list of its 11 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nvb12-23519.pdf The petition was signed by Clifford P. Evarts, managing member. CAESARS ENTERTAINMENT: Prices $750MM Notes at 98.25% Issue Price ---------------------------------------------------------------- Caesars Entertainment Corporation previously announced the intent of its wholly owned subsidiaries, Caesars Operating Escrow LLC and Caesars Escrow Corporation, to offer, through a private placement, $300,000,000 aggregate principal amount of 9% senior secured notes due 2020, subject to market and other conditions. On Dec. 6, 2012, the Escrow Issuers priced $750,000,000 aggregate principal amount of 9% senior secured notes due 2020 at an issue price of 98.25%, plus accrued interest from Aug. 22, 2012. The notes are being offered in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended. The notes will be issued under the same indenture governing the 9% senior secured notes due 2020 that were issued on Aug. 22, 2012, but the notes and the Existing Notes will not be fungible until the completion of a registered exchange offer pursuant to which holders that exchange their notes or Existing Notes will collectively receive registered 9% senior secured notes due 2020 that will have a single CUSIP number and thereafter be fungible. The closing of the offering is subject to a number of conditions. Upon the satisfaction of certain conditions, Caesars Entertainment Operating Company, Inc., will assume the Escrow Issuers' obligations under the notes and the indenture. 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'. CAESARS ENTERTAINMENT: Bank Debt Trades at 11% Off -------------------------------------------------- Participations in a syndicated loan under which Caesars Entertainment, Inc., is a borrower traded in the secondary market at 89.40 cents-on-the-dollar during the week ended Friday, Dec. 14, 2012, a drop of 0.40 percentage points from the previous week, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 525 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 1, 2018, and carries Moody's B2 rating and Standard & Poor's B rating. The loan is one of the biggest gainers and losers among 193 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Caesars Entertainment Las Vegas-based 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. Harrah's announced its re-branding to Caesar's on mid- November 2010. Caesars recorded a net loss of $1.02 billion on $6.57 billion of net revenues for the nine months ended Sept. 30, 2012, compared with a net loss of $471.3 million on $6.46 billion of net revenues for the same period a year ago. 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. * * * The TCR on Dec. 7, 2012 stated that Moody's Investors Service assigned a 'B2' rating to the proposed $300 million senior secured notes due 2020 issued by Caesars Operating Escrow LLC and Caesars Escrow Corporation due 2020 to be assumed by Caesars Entertainment Operating company, Inc. (CEOC). Moody's affirmed Caesars Entertainment Corporation's 'Caa1' corporate family rating and changed the rating outlook to negative. The change in rating outlook to negative reflects Moody's view that Caesars' operating results will not meet Moody's previous expectations as a result of slowing same store gaming revenues through August across many regional U.S. markets in which Caesars participates followed by declines in September and October. CANAL CAPITAL: Suspending Filing of Reports With SEC ---------------------------------------------------- Canal Capital Corporation filed a Form 15 with the U.S. Securities and Exchange Commission to voluntarily deregister its common stock and suspend its reporting obligations with the SEC. As of Dec. 6, 2012, there were only 900 holders of the Company's common shares. About Canal Capital Port Jefferson Station, N.Y.-based Canal Capital Corporation is engaged in two distinct businesses -- real estate and stockyard operations. Canal's real estate properties are located in Sioux City, Iowa, South St Paul, Minnesota, St Joseph, Missouri, Omaha, Nebraska and Sioux Falls, South Dakota. The properties consist, for the most part, of an Exchange Building (commercial office space), land and structures leased to third parties (rail car repair shops, lumber yards and various other commercial and retail businesses) as well as vacant land available for development or resale. Canal currently operates one central public stockyard located in St. Joseph, Missouri. Canal closed the stockyard it operated in Sioux Falls, South Dakota in December 2009. Canal's stock is no longer listed over-the-counter on the "pink sheets". The stock was delisted by the SEC as a result of Canal's filing its fiscal 2009 Form 10-K without benefit of an independent audit. The Company's balance sheet at July 31, 2012, showed $2.82 million in total assets, $1.43 million in total liabilities and $1.39 million in stockholders' equity. CASCADIA SCHOOL: Case Summary & 15 Unsecured Creditors ------------------------------------------------------ Debtor: Cascadia School 10606 NE 14th Street Vancouver, WA 98664 Bankruptcy Case No.: 12-35509 Chapter 11 Petition Date: December 12, 2012 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Paul B. Snyder Debtor's Counsel: Timothy J. Dack, Esq. 916 Main St P.O. Box 61645 Vancouver, WA 98666 Tel: (360) 694-4227 E-mail: bkfile@dackoffice.com Scheduled Assets: $713,446 Scheduled Liabilities: $1,068,919 A copy of the Company's list of its 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb12-48344.pdf The petition was signed by Tricia Crismon, president. CATASYS INC: Enters Into 46.9MM Shares Securities Purchase Pact --------------------------------------------------------------- Catasys, Inc., entered into Securities Purchase Agreements with several investors, including Crede CG II, Ltd., (formerly, Socius Capital Group, LLC), an affiliate of Terren S. Peizer, Chairman and Chief Executive Officer of the Company, and David Smith, an affiliate of the Company, relating to the sale and issuance of an aggregate of 46,987,574 shares of the Company's common stock, par value $0.0001 per share and warrants to purchase an aggregate of 46,978,574 shares of common stock, at an exercise price of $0.07 per share, for aggregate gross proceeds to the Company of approximately $3.3 million. As a result, the exercise price of these warrants decreased to $0.07, however, the number of shares issuable under these warrants remained unchanged. Among other things, the Agreements provide that in the event that the Company effectuates a reverse stock split of its common stock within 24 months of the closing date of the Offering and the volume weighted average price of the Common Stock during the 20 trading days following the effective date of the Reverse Split declines from the closing price on the trading date immediately prior to the effective date of the Reverse Split, that the Company issue additional shares of common stock. The number of Adjustment Shares Will be calculated as the lesser of (a) 20% of the number of shares of common stock originally purchased by such Investor and still held by the Investor as of the last day of the VWAP Period, and (b) the number of shares originally purchased by that Investor and still held by that Investor as of the last day of the VWAP Period multiplied by the percentage decline in the VWAP during the VWAP Period. All prices and number of shares of common stock will be adjusted for the Reverse Split and any other stock splits or stock dividends. In the aggregate, Crede invested $2.5 million in the Offering. After giving effect to the Offering, Mr. Peizer beneficially owns approximately 72.5% of the Common Stock of the Company, including shares underlying options and warrants. Mr. Smith invested $500,000 in the Offering and after giving effect to the Offering, Mr. Smith beneficially owns approximately 40.8% of the Common Stock of the Company, including shares underlying warrants. About Hythiam Inc. Based in Los Angeles, California, Hythiam, Inc., n/k/a Catasys, Inc., is a healthcare services management company, providing through its Catasys(R) subsidiary specialized behavioral health management services for substance abuse to health plans. In its auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Rose, Snyder & Jacobs LLP, in Encino, 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 negative cash flows from operations during the year ended Dec. 31, 2011. The Company reported a net loss of $8.12 million in 2011, compared with a net loss of $19.99 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $3.67 million in total assets, $11.88 million in total liabilities and a $8.21 million total stockholders' deficit. Bankruptcy Warning As of Nov. 14, 2012, the Company had a balance of approximately $657,000 cash on hand. The Company had working capital deficit of approximately $2.2 million at Sept. 30, 2012. The Company has incurred significant net losses and negative operating cash flows since its inception. The Company could continue to incur negative cash flows and net losses for the next twelve months. The Company's current cash burn rate is approximately $450,000 per month, excluding non-current accrued liability payments. The Company expects its current cash resources to cover expenses into December 2012, however delays in cash collections, fees, or unforeseen expenditures, could impact this estimate. The Company will need to immediately obtain additional capital and there is no assurance that additional capital can be raised in an amount which is sufficient for the Company or on terms favorable to its stockholders, if at all. "If we do not immediately obtain additional capital, there is a significant doubt as to whether we can continue to operate as a going concern and we will need to curtail or cease operations or seek bankruptcy relief. If we discontinue operations, we may not have sufficient funds to pay any amounts to stockholders." CELL THERAPEUTICS: Further Amends Rights Pact with Computershare ---------------------------------------------------------------- The Board of Directors of Cell Therapeutics, Inc., approved an amendment to the Company's Shareholder Rights Agreement dated as of Dec. 28, 2009, between the Company and Computershare Trust Company, N.A., as Rights Agent, as amended by that certain First Amendment to Shareholder Rights Agreement dated as of Aug. 31, 2012. The amendment amends the definition of "Final Expiration Date" under the Rights Plan from the close of business on the third anniversary of Jan. 7, 2010, or the record date, to the close of business on Dec. 3, 2015. The amendment also decreases the exercise price of the preferred stock purchase rights under the Rights Plan from $14.00 to $8.00. The Rights were initially distributed as a dividend on each share of the Company's common stock, no par value per share, outstanding on Jan. 7, 2010, and currently trade with each outstanding share of Common Stock. A copy of the Rights Agreement, as amended, is available at: http://is.gd/lS4QOk $500,000 Cash Awards for Executives The Compensation Committee of the Board of Directors of Cell Therapeutics approved fiscal year-end cash incentive awards for 2012 for each of the Company's named executive officers currently employed with the Company: Name and Principal Position Bonus --------------------------- ---------- James A. Bianco, M.D. $325,000 President and Chief Executive Officer Louis A. Bianco $110,550 EVP, Finance and Administration Jack W. Singer, M.D. $68,000 EVP, Global Medical Affairs and Translational Medicine About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Cell Therapeutics reported a net loss attributable to CTI of US$62.36 million in 2011, compared with a net loss attributable to CTI of US$82.64 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $36.17 million in total assets, $32.60 million in total liabilities, $13.46 million in common stock purchase warrants, and a $9.89 million total shareholders' deficit. Going Concern Doubt Raised The report of Marcum LLP, in San Francisco, Calif., dated March 8, 2012, expressed an unqualified opinion, with an explanatory paragraph as to the uncertainty regarding the Company's ability to continue as a going concern. The Company's available cash and cash equivalents are US$47.1 million as of Dec. 31, 2011. The Company's total current liabilities were US$17.8 million as of Dec. 31, 2011. The Company does not expect that it will have sufficient cash to fund its planned operations beyond the second quarter of 2012, which raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Form 10-K for the year ended Dec. 31, 2011, noted that if the Company receives approval of Pixuvri by the EMA or the FDA, it would anticipate significant additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and are currently exploring alternative sources of equity or debt financing. The Company may seek to raise that capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, the Company has a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, it may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CENTRAL EUROPEAN: Hires A&M as Restructuring Advisor ---------------------------------------------------- Marek Forysiak, a member of the board of directors of Central European Distribution Corporation notified the Board of his resignation effective Dec. 10, 2012. Mr. Forysiak, who has served as an independent director of the Company since April 2009, was a member of the Board's Audit Committee. The Company expects Markus Sieger to be appointed to the Audit Committee following Mr. Forysiak's departure. The Company engaged Alvarez & Marsal North America, LLC, Alvarez & Marsal CIS LLP and Alvarez & Marsal Poland Sp. z o.o. as its restructuring advisor. Alvarez & Marsal was selected by the Board with the unanimous approval of the special committee of Company directors. The Company also appointed Maxim Frangulov, Managing Director of Alvarez & Marsal and co-head of Alvarez & Marsal's restructuring practice in Russia, as the Company's Chief Restructuring Officer. Mr. Frangulov and his team will serve as independent contractors to the Company and will report to the Board. Mr. Frangulov has more than 15 years of experience in corporate restructuring advisory services. As Chief Restructuring Officer, he will advise the Company on improving its liquidity management and operational efficiency. About CEDC Mt. Laurel, New Jersey-based Central European Distribution Corporation is one of the world's largest vodka producers and Central and Eastern Europe's largest integrated spirit beverages business with its primary operations in Poland, Russia and Hungary. Ernst & Young Audit sp. z o.o., in Warsaw, Poland, expressed substantial doubt about Central European's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that certain of the Company's credit and factoring facilities are coming due in 2012 and will need to be renewed to manage its working capital needs. The Company's balance sheet at Sept. 30, 2012, showed $1.98 billion in total assets, $1.73 billion in total liabilities, $29.44 million in temporary equity, and $210.78 million in total stockholders' equity. Liquidity Certain credit and factoring facilities are coming due in 2012, which the Company expects to renew. Furthermore, the Company's Convertible Senior Notes are due on March 15, 2013. The Company's current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to make the repayment of principal on the Convertible Notes and, unless the transaction with Russian Standard Corporation is completed the Company may default on them. The Company's cash flow forecasts include the assumption that certain credit and factoring facilities that are coming due in 2012 will be renewed to manage working capital needs. Moreover, the Company had a net loss and significant impairment charges in 2011 and current liabilities exceed current assets at June 30, 2012. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The transaction with Russian Standard Corporation is subject to certain risks, including shareholder approval which may not be obtained. The Company's 2012 Annual Meeting of Stockholders, which was postponed due to the need to restate the Company's financial statements, is expected to be held as soon as practicable. The Company believes that if the transaction is completed as scheduled, the Convertible Notes will be repaid by their maturity date, which would substantially reduce doubts about the Company's ability to continue as a going concern. * * * As reported by the TCR on Aug. 10, 2012, Standard & Poor's Ratings Services kept on CreditWatch with negative implications its 'CCC+' long-term corporate credit rating on U.S.-based Central European Distribution Corp. (CEDC), the parent company of Poland-based vodka manufacturer CEDC International sp. z o.o. "The CreditWatch status reflects our view that uncertainties remain related to CEDC's ongoing accounting review and that CEDC's liquidity could further and substantially weaken if there was a breach of covenants which could lead to the acceleration of the payment of the 2016 notes, upon receipt of a written notice of 25% or more of the noteholders," S&P said. In the Oct. 9, 2012, edition of the TCR, Moody's Investors Service has downgraded the corporate family rating (CFR) and probability of default rating (PDR) of Central European Distribution Corporation (CEDC) to Caa2 from Caa1. "The downgrade reflects delays in CEDC securing adequate financing to repay its US$310 million of convertible notes due March 2013 which are increasing Moody's concerns that the definitive agreement for a strategic alliance between CEDC and Russian Standard Corporation (Russian Standard) might not conclude at the current terms," says Paolo Leschiutta, a Moody's Vice President - Senior Credit Officer and lead analyst for CEDC. CENTRAL EUROPEAN: Rejects Shareholder Proposal to Provide Capital ----------------------------------------------------------------- Central European Distribution Corporation has rejected a proposal made by Roust Trading Ltd. and its principal equityholder, Roustam Tariko, to provide the Company with access to interim and permanent capital, to bolster the Company's leadership, and to support its operational needs. The Proposal was conditioned on the Company promptly holding its long overdue 2012 annual stockholders' meeting, nominating a slate for the Board of Directors of the Company which would include a majority satisfactory to Roust Trading, and providing responsibility for operational and financial management to Mr. Tariko that would enable him to address the Company's well known challenges. Despite initial agreement on all material terms of the proposal, the Company's entrenched directors who are unaffiliated with the Roustan Trading ultimately rejected the Proposal, insisting that they must retain control over the Company's financial restructuring process and finances despite the Company's financial failures and ongoing challenges. Repeated attempts by RTL to address non-RTL Directors' concerns were also rebuffed. The Company inexplicably insists that the same directors who presided over the Company's financial restatements and serious performance deterioration remain in control of the Company's finances and restructuring. The Proposal included the following critical elements: * RTL providing the Company with $50 million of RTL's previously invested capital for general corporate purposes by lifting contractual restrictions on the Company's use of those proceeds; * RTL providing an additional $107 million of capital in connection with a mutually acceptable potential financial restructuring of the Company; * RTL and Mr. Tariko using their commercially reasonable efforts to engage with the Company's lenders and local guarantee providers, in particular in respect of the Company's working capital facilities and guarantees in Russia, seeking to ensure the Company's continued access to existing working capital lines and guarantees to meet its operations requirements; * Delegation of business, operational and financial oversight to directors designated by RTL; * Preparations for a financial restructuring led by a special committee of non-RTL directors until the Company's stockholders elect a new board of directors; * All related party transactions between the Company and RTL to be approved by non-RTL directors; and * Promptly holding the long-overdue annual meeting of stockholders to allow the Company's owners (rather than entrenched self-interested directors) to decide on the Company's corporate governance. As previously disclosed, RTL believes that the Company has materially breached its obligations under the Amended Securities Purchase Agreement. RTL is actively considering its options with respect thereto. In the meantime, RTL urges all stockholders of the Company and holders of the Company's notes who agree that this rejected proposal would provide much-needed leadership, resources and commercial prowess to the Issuer, to strongly communicate those views to the Company's Board of Directors. About CEDC Mt. Laurel, New Jersey-based Central European Distribution Corporation is one of the world's largest vodka producers and Central and Eastern Europe's largest integrated spirit beverages business with its primary operations in Poland, Russia and Hungary. Ernst & Young Audit sp. z o.o., in Warsaw, Poland, expressed substantial doubt about Central European's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that certain of the Company's credit and factoring facilities are coming due in 2012 and will need to be renewed to manage its working capital needs. The Company's balance sheet at Sept. 30, 2012, showed $1.98 billion in total assets, $1.73 billion in total liabilities, $29.44 million in temporary equity, and $210.78 million in total stockholders' equity. Liquidity Certain credit and factoring facilities are coming due in 2012, which the Company expects to renew. Furthermore, the Company's Convertible Senior Notes are due on March 15, 2013. The Company's current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to make the repayment of principal on the Convertible Notes and, unless the transaction with Russian Standard Corporation is completed the Company may default on them. The Company's cash flow forecasts include the assumption that certain credit and factoring facilities that are coming due in 2012 will be renewed to manage working capital needs. Moreover, the Company had a net loss and significant impairment charges in 2011 and current liabilities exceed current assets at June 30, 2012. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The transaction with Russian Standard Corporation is subject to certain risks, including shareholder approval which may not be obtained. The Company's 2012 Annual Meeting of Stockholders, which was postponed due to the need to restate the Company's financial statements, is expected to be held as soon as practicable. The Company believes that if the transaction is completed as scheduled, the Convertible Notes will be repaid by their maturity date, which would substantially reduce doubts about the Company's ability to continue as a going concern. * * * As reported by the TCR on Aug. 10, 2012, Standard & Poor's Ratings Services kept on CreditWatch with negative implications its 'CCC+' long-term corporate credit rating on U.S.-based Central European Distribution Corp. (CEDC), the parent company of Poland-based vodka manufacturer CEDC International sp. z o.o. "The CreditWatch status reflects our view that uncertainties remain related to CEDC's ongoing accounting review and that CEDC's liquidity could further and substantially weaken if there was a breach of covenants which could lead to the acceleration of the payment of the 2016 notes, upon receipt of a written notice of 25% or more of the noteholders," S&P said. In the Oct. 9, 2012, edition of the TCR, Moody's Investors Service has downgraded the corporate family rating (CFR) and probability of default rating (PDR) of Central European Distribution Corporation (CEDC) to Caa2 from Caa1. "The downgrade reflects delays in CEDC securing adequate financing to repay its US$310 million of convertible notes due March 2013 which are increasing Moody's concerns that the definitive agreement for a strategic alliance between CEDC and Russian Standard Corporation (Russian Standard) might not conclude at the current terms," says Paolo Leschiutta, a Moody's Vice President - Senior Credit Officer and lead analyst for CEDC. CEQUEL COMMUNICATIONS: Moody's Affirms 'B1' Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed the B1 corporate family rating of Cequel Communications Holdings, LLC and assigned a B3 rating to its proposed $750 million senior unsecured bonds issuance. The company expects to use proceeds primarily to repay borrowings under its revolver and to fund a tender for its 8.625% senior notes due 2017. The transaction modestly increases leverage (pro forma for the buyout by BC Partners and CPP Investment Board which closed in November) to about 6.2 times debt-to-EBITDA from 6.1 times. Also, Moody's had expected Cequel to use the revolver as a vehicle for debt reduction. Its repayment somewhat diminishes expected de- leveraging, which will now come primarily from EBITDA growth rather than debt reduction (aside from required term loan amortization). However, the transaction would extend maturities, reduce interest expense and boost balance sheet cash, all favorable for liquidity. Furthermore, Moody's continues to expect that EBITDA growth will facilitate a decline in leverage to below 6 times debt-to-EBITDA over the next year. A summary of the actions follows. Cequel Communications Holdings I, LLC Assigned B3, LGD5, 78%, to proposed Senior Unsecured Bonds 8.625% Senior Unsecured Bonds, Affirmed B3, LGD adjusted to LGD5, 78% from LGD5, 79% 6.375% Senior Unsecured Bonds, Affirmed B3, LGD adjusted to LGD5, 78% from LGD5, 79% Cequel Communications, LLC Senior Secured Bank Credit Facility, Affirmed Ba2, LGD adjusted to LGD2, 22% from LGD2, 23% Ratings Rationale Pro forma leverage of just over 6 times debt-to-EBITDA creates risk for a company in a capital intensive, competitive industry, driving Cequel's B1 CFR. However, Moody's expects leverage to decline over the next year as EBITDA grows. Good liquidity, including expectations for increasing free cash flow, also supports the rating. Notwithstanding the maturity of the core video product, the relative stability of the subscription business provides steady cash flow, and the high quality of Cequel's network positions it well against escalating competition. The company's penetration lags behind industry averages, but its high speed data and phone growth is exceeding most peers, which Moody's expects to continue as the company benefits from its network investment. Moody's expects the new owners to seek growth opportunities, which could improve asset value, but absent opportunities for investment or acquisition, sponsor distributions are likely and as such the sponsor ownership weighs negatively on the credit profile. The stable outlook assumes maintenance of an adequate or better liquidity profile and that leverage will fall below 6 times debt- to-EBITDA over the next 12 months driven by EBITDA growth. Modest distributions over the next year would not necessarily negatively impact the rating provided Moody's expected the de-leveraging trend to continue. Cequel's financial sponsor ownership and relatively high leverage limit upward ratings momentum, and a positive rating action is highly unlikely. A higher rating would require sustained free cash flow to debt in the high single digits and sustained leverage below 5 times debt-to-EBITDA, as well as a good liquidity profile and evidence of shareholder commitment to a more fiscally conservative capitalization. A material weakening of operating performance or inability to grow EBITDA due to either escalating competitive pressure or technological changes could pressure the rating down. Incremental shareholder friendly activities, acquisitions resulting in leverage sustained above 6 times debt-to-EBITDA or an erosion of the liquidity profile could also have negative ratings implications. The principal methodology used in rating Cequel Communications was the Global Cable Television Industry Methodology published in July 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in St. Louis, Missouri, and doing business as Suddenlink Communications, Cequel Communications Holdings LLC serves approximately 1.4 million residential and 74 thousand commercial customers. The company provides digital TV, high-speed Internet and telephone services to consumers and businesses and generated revenues of approximately $2 billion of revenue for the twelve months ended September 30. BC Partners, CPP Investment Board and certain members of Cequel's executive management acquired Cequel from Goldman Sachs, Quadrangle, and Oaktree in November. CEQUEL COMMUNICATIONS: S&P Keeps 'B-' Rating on $1.25BB Sr. Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services said its 'B-' issue-level rating and '6' recovery rating on Cequel Communications Holdings I LLC's unsecured notes remains unchanged, following the company's $750 million add-on to its unsecured notes due 2020. "The '6' recovery rating indicates our expectation for negligible (0%-10%) recovery in the event of a payment default," S&P said. "Proceeds from the add-on will be used to repay $160 million of borrowings under the company's revolving credit facility, as well as for tender for $500 million of 8.625% senior unsecured notes due 2017," said Standard & Poor's credit analyst Catherine Cosentino. Standard & Poor's 'B+' corporate credit rating and stable outlook on Cequel also remain unchanged, as do the 'BB-' issue-level rating and '2' recovery rating on subsidiary Cequel Communications LLC's secured credit facilities and the 'B-' issue-level rating and '6' recovery rating on Cequel's 8.625% senior unsecured notes due 2017. "Pro forma for the current transaction and the $500 million of incremental debt issued to fund the buyout by BC Partners and the Canada Pension Plan Investment Board, the company's consolidated leverage was about 6.4x, based on EBITDA for the 12 months ended Sept. 30, 2012. This ratio remains within the parameters of the current rating, given our assessment of the company's 'satisfactory' business risk profile and 'highly leveraged' financial risk profile," S&P said. RATINGS LIST Ratings unchanged Cequel Communications Holdings I LLC Corporate credit rating B+/Stable/-- $1.25 bil. sr unsecured notes due 2020 Senior unsecured B- Recovery rating 6 Cequel Communications LLC $500 mil. revolver due 2017 Senior secured BB- Recovery rating 2 CLEAR CHANNEL: Bank Debt Trades at 17% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Clear Channel Communications, Inc., is a borrower traded in the secondary market at 82.60 cents-on-the-dollar during the week ended Friday, Dec. 14, 2012, an increase of 1.22 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 365 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 30, 2016, and carries Moody's 'Caa1' rating and Standard & Poor's 'CCC+' rating. The loan is one of the biggest gainers and losers among 193 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Clear Channel San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) -- http://www.ccmediaholdings.com/-- is the parent company of Clear Channel Communications, Inc. CC Media Holdings is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and premier opportunities for advertisers. The Company's businesses include radio and outdoor displays. For the six months ended June 30, 2012, the Company reported a net loss attributable to the Company of $182.65 million on $2.96 billion of revenue. Clear Channel reported a net loss of $302.09 million on $6.16 billion of revenue in 2011, compared with a net loss of $479.08 million on $5.86 billion of revenue in 2010. The Company had a net loss of $4.03 billion on $5.55 billion of revenue in 2009. The Company's balance sheet at June 30, 2012, showed $16.45 billion in total assets, $24.31 billion in total liabilities, and a $7.86 billion total shareholders' deficit. Bankruptcy Warning At March 31, 2012, the Company had $20.7 billion of total indebtedness outstanding. The Company said in its quarterly report for the period ended March 31, 2012, that its ability to restructure or refinance the debt will depend on the condition of the capital markets and the Company's financial condition at that time. Any refinancing of the Company's debt could be at higher interest rates and increase debt service obligations and may require the Company and its subsidiaries to comply with more onerous covenants, which could further restrict the Company's business operations. The terms of existing or future debt instruments may restrict the Company from adopting some of these alternatives. These alternative measures may not be successful and may not permit the Company or its subsidiaries to meet scheduled debt service obligations. If the Company and its subsidiaries cannot make scheduled payments on indebtedness, the Company or its subsidiaries, as applicable, will be in default under one or more of the debt agreements and, as a result the Company could be forced into bankruptcy or liquidation. * * * As reported in the TCR on Oct. 17, 2012, Fitch Ratings has affirmed the 'CCC' Issuer Default Rating (IDR) of Clear Channel Communications, Inc. The Rating Outlook is Stable. Fitch's ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2016; the considerable and growing interest burden that pressures FCF; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. The TCR also reported in October 2012 that Standard & Poor's Ratings Services assigned Clear Channel's proposed $2 billion priority guarantee notes due 2019 an issue-level rating of 'CCC+' (the same level as the 'CCC+' corporate credit rating on the parent company) and a recovery rating of '4', indicating its expectation for average (30% to 50%) recovery in the event of a payment default. "In addition, we are affirming our 'CCC+' corporate credit rating on both the holding company, CC Media Holdings Inc., and operating subsidiary Clear Channel, which we view on a consolidated basis; the rating outlook is negative," said Standard & Poor's credit analyst Jeanne Shoesmith. "The CC Media Holdings Inc. reflects the company's steep debt leverage and significant 2016 debt maturities. The proposed transaction extends about $2 billion of debt from 2014 and 2016 to 2019 and reduces 2016 maturities from $12 billion to a little over $10 billion. However, the interest rate on the new debt is about 5% higher than the existing term loan B debt. As a result, we expect that EBITDA coverage of interest will be very thin at about 1.2x and that discretionary cash flow will be only modestly positive in 2013, hindering the company's ability to repay debt and afford additional refinancing transactions with similar interest rate increases. The transaction increases the company's flexibility to repay 2014 maturities (currently $1.5 billion), which previously could only be repaid on a pro rata basis, and now permits the company to exchange and extend $3 billion of additional loans. We still view a significant increase in the average cost of debt or deterioration in operating performance for either cyclical, structural, or competitive reasons, as major risks as the company proceeds with a strategy to deal with its 2016 maturities," S&P said. CLEARWIRE CORP: Moody's Says Proposed Sprint Deal Credit Positive ----------------------------------------------------------------- Moody's Investors Service on Dec. 13 said that Sprint Nextel Corporation (B1, on review for upgrade) offered to buy the remaining 49% stake of Clearwire Corp. (Caa2, stable) that Sprint does not already own. Sprint's offer of $2.90 a share in cash for Clearwire totals $2.1 billion. If a definitive agreement is reached and a transaction is consummated, Moody's believes the deal would be credit positive for Sprint and Clearwire. The principal methodology used in rating Sprint Nextel and Clearwire was the Global Publishing Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. With headquarters in Overland Park, Kansas, Sprint Nextel is one of the largest telecommunications companies in the United States. It offers digital wireless services in addition to a broad suite of wireline communications services. The Company operates two wireless networks, one based on CDMA technology and the other, the former Nextel Communications' iDEN network. Sprint is the third largest wireless carrier in the U.S. with 56.4 million subscribers as of September 30, 2012 Headquarterd in Bellevue, Washington, Clearwire offers high-speed wireless broadband services to consumers and businesses and is building a nationwide 4G mobile broadband network. CLEARWIRE CORP: S&P Puts 'CCC' Corp. Credit Rating on Watch Pos --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'CCC' corporate credit rating, and all other ratings, on Bellevue, Wash.-based wireless service provider Clearwire Corp. on CreditWatch with positive implications. "The CreditWatch listing follows Sprint Nextel Corp.'s (B+/Watch Pos/--) offer to purchase the remaining 49% that it does not already own of Clearwire for about $2.1 billion. It will provide about $800 million of interim financing, which will be used to fund operations and the build-out of Clearwire's Long-Term Evolution (LTE) network. Including Clearwire's debt, we believe the transaction is valued at around $6 billion," S&P said. "The CreditWatch listing reflects the possibility that we could raise the ratings if Sprint Nextel is successful in its bid to acquire the remaining stake in Clearwire," said Standard & Poor's credit analyst Allyn Arden. "Sprint Nextel signed an agreement to sell a 70% stake in the company to Japan-based SoftBank Corp. (BBB/Watch Neg/--), which will include an $8 billion cash infusion. We believe an upgrade of Clearwire would likely be limited to one notch absent a guarantee of Clearwire's debt by Sprint Nextel." "Clearwire is building a fourth-generation wireless network using a technology known as Time Division (TD)-LTE in the 2.5 GHz spectrum band, which is compatible with Softbank's TD-LTE network in Japan. We believe that it has become more evident that Clearwire is important to SoftBank's long-term strategy in the U.S. because Clearwire's large spectrum position in frequencies similar to that of Softbank's will have some potential value for Softbank in equipment and technology development. Additionally, an acquisition of Clearwire could help improve the ecosystem for wireless devices on a TD-LTE network and reduce related handset costs." "As part of our CreditWatch, we will monitor discussions between the two companies regarding the acquisition offer. We could raise or affirm the ratings on Clearwire if an acquisition is ultimately completed, depending partly on how any transaction is structured. We believe an upgrade would likely be limited to one notch, absent a guarantee of Clearwire's debt by Sprint Nextel. Even if the reported talks do not lead to an acquisition in the near term, we believe there is a greater rationale for some additional funding being provided to Clearwire based on our view of the potential importance of Clearwire to SoftBank's long-term strategy. Such strategic considerations or improved liquidity could also result in a moderate ratings uplift for Clearwire," S&P said. COMMONWEALTH OF PUERTO RICO: Moody's Cuts Bond Ratings to 'Ba1' --------------------------------------------------------------- Moody's Investors Service has downgraded the general obligation rating of the Commonwealth of Puerto Rico to Baa3 from Baa1. The downgrade also applies to those ratings that are based on or capped at the G.O. rating of the commonwealth (see list later in the report). The outlook is negative. Summary Rating Rationale The downgrade to Baa3 and the assignment of a negative outlook reflect four primary rating drivers: - Economic growth prospects remain weak after six years of recession and could be further dampened by the commonwealth's efforts to control spending and reform its retirement system, both of which are needed to stabilize the commonwealth's financial results. The lack of significant economic growth drivers and the commonwealth's declining population have also reduced prospects for a strong economic recovery. - Debt levels are very high and continue to grow. - Financial performance has been weak, including lackluster revenue growth and large structural budget gaps that have led to a persistent reliance on deficit financings and serial debt restructurings to support operations in recent years. - Lack of meaningful pension reform and no clear timetable to do so. Reform of the commonwealth's severely underfunded retirement systems is needed to avoid asset depletion and future budget pressure. Credit Strengths - Politically and economically linked to the US, with benefit of the nation's strong financial, legal, and regulatory systems - Large economy, with gross product exceeding that of 15 states and population exceeding that of 22 states - Broad legal powers to raise revenues, adjust spending programs, and employ borrowing in order to maintain fiscal solvency - Constitutional first priority lien on revenues of the commonwealth for general obligation and commonwealth- guaranteed debt Credit Challenges - Very large unfunded pension liability relative to revenues that Moody's expects will claim an increasing share of the budget over the medium term - Very high and growing government debt relative to the size of the economy, due in part to financing budget deficits - High unemployment, low workforce participation, and high poverty levels compared to the US; average income levels remain well below 50% relative to the US mainland median - Declining population - Large size of commonwealth government relative to the economy (although recent government actions are reducing the size of the government employment sector) - Multi-year trend of large General Fund operating deficits, financed by deficit borrowing - Local economy that has been in recession since 2006 DETAILED CREDIT DISCUSSION Economy Still Very Weak With No Clear Growth Drivers Until the mid-2000s, Puerto Rico's economic growth direction tended to mirror that of the US. In 2006, however, Puerto Rico entered recession when the rest of the US was still in full expansion mode. Since then, the commonwealth has remained in recession. Some economic indicators, such as retail, auto and cement sales and the Government Development Bank for Puerto Rico's Economic Activity Index, have stabilized or are now trending up for the first time since 2006, but they are improving off a very low base, and reflect what is still essentially a weak economy that is not likely to be able to absorb much additional stress. Moreover, the commonwealth's economy lacks clear growth drivers as its manufacturing sector continues to see employment reductions. Population declined by 3% from 2005 to 2011 and slight declines are expected in the near term. Unemployment has ticked up slightly to 13.8% after reaching a low of 13.5% versus the US average of 7.8% at the end of the first quarter of fiscal 2013. Tourism has been a relatively good performer, but it remains relatively small and is susceptible to weakness in the larger US economy. Puerto Rico's weak retirement system funding could also challenge the commonwealth's finances and economy, as any new money put into the system would likely come from the government (weakening finances) or employees (weakening the economy). As the economy and financial situation are both fragile, this additional challenge will likely be difficult for the commonwealth to manage. There are approximately 330,000 active and retired members of the commonwealth's two main pension plans, or 9% of the population. Debt Levels are High and Continue to Rise As reported in Moody's 2012 State Debt Medians Report (published in May 2012), debt ratios for the commonwealth are very high, with net tax-supported debt at over $14,000 per capita and approximately 89% of personal income, significantly higher than any US state and also reflective of the relatively low per capita incomes in the commonwealth. Net tax-supported debt as of December 31, 2011 was $51.9 billion reflecting significant new issuance by the commonwealth and Government Development Bank over the past year. Debt measures are also relatively high for similarly rated sovereigns and regional governments outside the US. Revenue Growth in Fiscal 2012 Due to Temporary Excise Tax The commonwealth's general fund net revenues increased 6.1%, or $502 million, in fiscal 2012, in line with the commonwealth's revenue estimates for the year. The increase was mainly due to a temporary, multi-year excise tax imposed on certain foreign persons which yielded approximately $1.2 billion in revenue for the year. Collections from the excise tax, however, were offset by declines in other sources of revenue, including income taxes on individuals and corporations, withholding taxes on non-residents, and property taxes in part due to tax relief provided to individuals and corporations as part of the commonwealth's tax reform program. General fund net revenues through October of fiscal year 2013, however, are down 3.3% or $76 million as compared with the same period last year and about 3.7% below estimates largely due to declines in corporate excise taxes, off-shore shipments of rum and corporate income taxes. Continued Wide Budget Gaps, Reliance on Debt Restructuring and Deficit Financing The commonwealth's deficit for fiscal year 2012 was approximately $1.6 billion, or 17% of general fund revenue, including principal and interest payments on commonwealth general obligation and other debt that was paid with bond proceeds. This is a considerable improvement from 2010 when the commonwealth faced a deficit of $3.1 billion including debt restructurings, or 40% of fiscal 2010 general fund revenues. The commonwealth was able to do this through spending control (reducing spending largely through large government layoffs) and conservative revenue forecasting. Total payroll expenses have been reduced by $907 million, or 16%, since 2009. The budget for fiscal year 2013 is $9.08 billion, down 2% from the fiscal year 2012 budget and down 11% as compared with the fiscal year 2010 budget, mostly due to continuing declines in payroll spending. General fund revenues are projected to be $8.75 billion, or 0.9% over fiscal 2012, with the shortfall being made up with bond proceeds issued by the Puerto Rico Sales Tax Financing Corporation (COFINA) and other sources. Net revenues for fiscal 2012 were $8.66 billion, just slightly above projections of $8.65 billion. The budget gap however, does not include expenditures for approximately $745 million of debt service payments which are expected to be refinanced during fiscal 2013. In addition, the commonwealth recently cut its forecast for economic growth for fiscal 2013 from 1.1% to 0.6% indicating that the projected deficit for the fiscal year ending June 30th will grow. Lack of Progress on Pension Reform to Avoid Asset Depletion In 2011, the commonwealth completed a modest first phase of pension reform (adopting an ascending schedule of future employer contributions and limiting the size of personal loans available to members), but did not undertake further meaningful additional reforms. The timetable for additional reforms remains unclear. The commonwealth's pension plans that comprise its retirement systems are far weaker financially when compared to the pension plans of the 50 US states. As of June 30, 2011, the date of the latest actuarial valuations of the retirement systems, the unfunded actuarial accrued liability (including basic and system administered benefits) for the Employees Retirement System (ERS), the Teachers Retirement System (TRS) and the Judiciary Retirement System was $23.7 billion, $9.1 billion and $319 million, respectively. The pension systems' combined unfunded liability of $33 billion is almost four times the annual budget ($9 billion), a burden that will exert significant budgetary pressure for many years to come. Estimated benefit payments from both ERS and TRS exceed incoming employee and employer contributions by wide margins -- approximately $938 million between the two plans in fiscal 2012- resulting in a projected rapid depletion of system assets. A $3 billion issue of pension bonds in 2008 has helped extend the asset life, though these funds are included in the current depletion forecast. In addition to low asset levels, ERS commingles the assets of both its defined benefit and defined contribution members, meaning future DC payouts must eventually be paid by ERS. No corresponding liabilities for these eventual payouts have been disclosed. Without meaningful additional reforms, the commonwealth will be forced to add direct retirement benefit payments to the budget within several years. Moody's estimates that in fiscal 2012, benefit payments for the major systems plus incremental benefits granted by special laws (currently paid directly from the general fund) plus debt service on the existing pension bonds, less employee contributions, together equal nearly 22% of the $8.7 billion in fiscal 2012 general fund revenues. This is substantially more than the approximately 9% of general fund revenues currently paid in employee contributions and indicative of the size of the budgetary burden of a future "pay-as-you-go" pension structure. Since the ERS defined benefit plan was closed in 2000, the benefit amounts will grow relatively slowly over the next few years, reach a peak benefit level around 2038 and then start to decline. Future costs for TRS and the System 2000 defined contribution payouts, however, are unknown. ACTION AFFECTS MULTIPLE CREDITS The downgrade and negative outlook affects general obligation bonds of the commonwealth, and also affects bonds whose ratings are determined by or linked to that of the commonwealth. Affected credits are listed below. DOWNGRADED TO Baa3 FROM Baa1 - General obligation bonds - Pension funding bonds - Puerto Rico Infrastructure Finance Authority (PRIFA) Special Tax Revenue Bonds - Convention Center District Authority Hotel Occupancy Tax Revenue Bonds - Government Development Bank (GDB) Senior Notes - Municipal Finance Authority (MFA) Bonds - Puerto Rico Highway and Transportation Authority (PRHTA) Transportation Revenue Bonds - Puerto Rico Aqueduct and Sewer Authority (PRASA) Commonwealth Guaranteed Bonds DOWNGRADED TO Baa2 FROM A3 - Puerto Rico Highway and Transportation Authority (PRHTA) Highway Revenue Bonds DOWNGRADED TO Ba1 FROM Baa2 - Puerto Rico Public Finance Corporation (PRPFC) Commonwealth Appropriation Bonds - Puerto Rico Aqueduct and Sewer Authority (PRASA) Revenue Bonds - Puerto Rico Highway and Transportation Authority (PRHTA) Subordinate Transportation Revenue Bonds Outlook The rating outlook is negative, reflecting the stress the commonwealth will face in the next few years as it continues to attempt to address the underfunding of the retirement system from an already weak financial and economic position. While the economy has shown some preliminary signs of stabilizing, the lack of apparent growth drivers, the commonwealth's rising debt levels and continued reliance on deficit financing to fund budget gaps continue to pressure the rating. What Could Make The Rating Go UP - Significant improvement in the condition of the commonwealth's pension system. - Strong rebound in economic growth leading to improved and sustained revenue results. - Spending controls and/or revenue increases that lead to long- term improved budgetary results and outlook. - Reversal of General Fund's deficit position. What Could Make The Rating Go DOWN - Lack of liquidity - Lack of market access - Indication that total fixed costs, including pension contributions and debt service on bonded debt, have become unsustainable or unaffordable. - Steep growth in structural budget gap and an increase in GAAP deficits, solved with non-recurring solutions. - Further recession, resulting in declining revenues, deficit financing and continued out-migration - Inability to curtail increase in debt experienced in recent years. Principal Methodology The principal methodology used in rating the Commonwealth of Puerto Rico was the State Rating Methodology published in November 2004. The principal methodologies used in rating the Government Development Bank for Puerto Rico were the Credit Substitution Methodology published in August 2009 and the State Rating Methodology published in November 2004. The principal methodology used in rating the Puerto Rico Public Finance Corporation appropriation debt was the the Fundamentals of Credit Analysis for Lease Backed Municipal Obligations published in 2011. The principal methodologies used in rating the Puerto Rico Highway and Transportation Authority were the Special Tax Methodology published in March 2012 and the State Rating Methodology published in November 2004. The principal methodologies used in rating the Puerto Rico Infrastructure Finance Authority Special Tax Revenue bonds were the Special Tax Methodology published in March 2012 and the State Rating Methodology published in November 2004. The principal methodologies used in rating the Puerto Rico Municipal Finance Authority were the State Rating Methodology published in November 2004 and a methodology based on evaluating factors Moody's believes are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the 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 debt service coverage provided by such revenue stream, vii) the legal structure that documents the revenue stream and the source of payment, and viii) the issuer's management and governance structure related to the payment. These attributes were compared against other issuers both within and outside of the issuer's core peer group. The ratings are believed to be comparable to ratings assigned to other issuers of similar credit risk. The principal methodology used in rating the Puerto Rico Employees Retirement System bonds was the State Rating Methodology published in November 2004. The principal methodologies used in rating the Puerto Rico Convention Center Authority Hotel Occupancy Tax Revenue Bonds were the Special Tax Methodology published in March 2012 and the State Rating Methodology published in November 2004. The principal methodologies used in rating the Puerto Rico Aqueduct and Sewer Authority were the Analytical Framework for Water and Sewer System Ratings published in August, 1999 and the State Rating Methodology published November 2004. COMMUNITY BANK/OZARKS: Closed; Bank of Sullivan Assumes Deposits ---------------------------------------------------------------- Community Bank of the Ozarks in Sunrise Beach, Mo., was closed on Friday, Dec. 14, by the Missouri Division of Finance, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of Sullivan of Sullivan, Mo., to assume all of the deposits of Community Bank of the Ozarks. The two branches of Community Bank of the Ozarks will reopen during normal business hours as branches of Bank of Sullivan. Depositors of Community Bank of the Ozarks will automatically become depositors of Bank of Sullivan. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Community Bank of the Ozarks should continue to use their existing branch until they receive notice from Bank of Sullivan that it has completed systems changes to allow other Bank of Sullivan branches to process their accounts as well. As of Sept. 30, 2012, Community Bank of the Ozarks had around $42.8 million in total assets and $41.9 million in total deposits. In addition to assuming all of the deposits of the failed bank, Bank of Sullivan agreed to purchase essentially all of the assets. The FDIC and Bank of Sullivan entered into a loss-share transaction on $37.3 million of Community Bank of the Ozarks' assets. Bank of Sullivan will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html. Customers with questions about the transaction should call the FDIC toll-free at 1-800-830-6698. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/cmbkozarks.html. The FDIC estimates that the cost to the Deposit Insurance Fundwill be $10.4 million. Compared to other alternatives, Bank of Sullivan's acquisition was the least costly resolution for the FDIC's DIF. Community Bank of the Ozarks is the 51st FDIC-insured institution to fail in the nation this year, and the fourth in Missouri. The last FDIC-insured institution closed in the state was Excel Bank, Sedalia, on Oct. 19, 2012. CSD LLC: Hires Lionel Sawyer as Special Counsel ----------------------------------------------- CSD, LLC asks the U.S. Bankruptcy Court to employ Lionel Sawyer & Collins as special counsel. Charles H. McCrea attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Las Vegas, Nev.-based CSD, LLC, filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-21668) on Oct. 12, 2012, estimating $50 million to $100 million in assets and $10 million to $50 million in debts. The petition was signed by Steven K. Kennedy, manager of CSD Management, LLC, manager. The Debtor owns 37.82 acres of land, seven houses, and an equestrian facility, all located at 6629 S. Pecos Road, Las Vegas, Nevada. The Debtor purchased the property from Mr. Wayne Newton and his wife, Kathleen, for $19.5 million to develop and operate a museum/tourist attraction honoring the life and career of Wayne Newton. Situated on the purchased property is the current home of the Newtons, known as "Casa de Shenandoah", which was to be used to showcase Wayne Newton's memorabilia. The museum remains unopened. DLH, LLC, which holds a 70% interest in the Debtor, contributed nearly $60 million towards development of the museum. DLH is a Nevada limited liability company, and its members are Lacy Harber and Dorothy Harber. Plans called for contributing $2 million toward the construction of a new home for Mr. Newton on the acreage. The new home hasn't been built, so Mr. Newton still lives in the existing home, paying minimal rent. While the Debtor has made substantial expenditures towards the development of the Newton Museum, the Debtor and the Newtons have been involved in certain disputes regarding the development of the museum. The Debtor in May 2012 filed a lawsuit in Nevada state court for fraud, civil conspiracy, and breach. The Newtons filed counterclaims. Because of the deteriorating relationship of the parties, it appears that it is no longer feasible for the parties to move forward with the development of the museum. On Aug. 9, 2012, the Debtor's committee members held an emergency meeting and voted to dissolve the Debtor. Though the Debtor has sought approval in the state court proceedings to dissolve, that matter is not scheduled to be heard until May 2013. Because the Debtor is out of money and options, and because the Debtor's prepetition secured lender, Neva Lane Acceptance, LLC, is unwilling to lend any additional funds to the Debtor on a prepetition basis, the majority of the committee members voted in favor of the bankruptcy filing. Although the Debtor is out of cash, it claims that it has substantial equity in its property. The Debtor has decided that a sale of the Debtor's property pursuant to Section 363 of the Bankruptcy Code, followed by the filing of a plan of liquidation, is the Debtor's best option for maximizing the value of the property and maximizing the return to the Debtor's creditors and interest holders. James D. Greene, Esq., at Greene Infuso, LLP, in Las Vegas, represents the Debtor. The Debtor's CRO is Odyssey Capital Group, LLC. CSD LLC: Court Approves Munsch Hardt & Harr, P.C. as Attorneys -------------------------------------------------------------- CSD, LLC, sought and obtained permission from the U.S. Bankruptcy Court for the District of Nevada to employ Munsch Hardt Kopf & Harr, P.C., as general bankruptcy counsel to the Debtor. Munsch Hardt will render, among others, these services: 1) serve as attorneys of record for the Debtor in all aspects, including any adversary proceedings commenced in connection the bankruptcy case, and to provide representation and legal advice to the Debtor throughout the bankruptcy case; 2) assist the Debtor in carrying out its duties under the Bankruptcy Code, including advising the Debtor or such duties, its obligations, and its legal rights; 3) consult with the United States Trustee, any statutory committee that may be formed, and all other creditors and parties-in-interest concerning administration of the bankruptcy case; and 4) assist in potential sales of the Debtor's assets. Munsch Hardt's hourly rates for attorneys and paraprofessionals who will most likely be working on the bankruptcy case are: Joseph J. Wielebinski, Esq., Shareholder $635 Zachery Z. Annable, Esq., Associate $350 Audrey Monlezun, Paralegal $200 To the best of the Debtor's knowledge, the shareholders and associates of Munsch Hard are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. About CSD LLC Las Vegas, Nev.-based CSD, LLC, filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-21668) on Oct. 12, 2012, estimating $50 million to $100 million in assets and $10 million to $50 million in debts. The petition was signed by Steven K. Kennedy, manager of CSD Management, LLC, manager. The Debtor owns 37.82 acres of land, seven houses, and an equestrian facility, all located at 6629 S. Pecos Road, Las Vegas, Nevada. The Debtor purchased the property from Mr. Wayne Newton and his wife, Kathleen, for $19.5 million to develop and operate a museum/tourist attraction honoring the life and career of Wayne Newton. Situated on the purchased property is the current home of the Newtons, known as "Casa de Shenandoah", which was to be used to showcase Wayne Newton's memorabilia. The museum remains unopened. DLH, LLC, which holds a 70% interest in the Debtor, contributed nearly $60 million towards development of the museum. DLH is a Nevada limited liability company, and its members are Lacy Harber and Dorothy Harber. Plans called for contributing $2 million toward the construction of a new home for Mr. Newton on the acreage. The new home hasn't been built, so Mr. Newton still lives in the existing home, paying minimal rent. While the Debtor has made substantial expenditures towards the development of the Newton Museum, the Debtor and the Newtons have been involved in certain disputes regarding the development of the museum. The Debtor in May 2012 filed a lawsuit in Nevada state court for fraud, civil conspiracy, and breach. The Newtons filed counterclaims. Because of the deteriorating relationship of the parties, it appears that it is no longer feasible for the parties to move forward with the development of the museum. On Aug. 9, 2012, the Debtor's committee members held an emergency meeting and voted to dissolve the Debtor. Though the Debtor has sought approval in the state court proceedings to dissolve, that matter is not scheduled to be heard until May 2013. Because the Debtor is out of money and options, and because the Debtor's prepetition secured lender, Neva Lane Acceptance, LLC, is unwilling to lend any additional funds to the Debtor on a prepetition basis, the majority of the committee members voted in favor of the bankruptcy filing. Although the Debtor is out of cash, it claims that it has substantial equity in its property. The Debtor has decided that a sale of the Debtor's property pursuant to Section 363 of the Bankruptcy Code, followed by the filing of a plan of liquidation, is the Debtor's best option for maximizing the value of the property and maximizing the return to the Debtor's creditors and interest holders. James D. Greene, Esq., at Greene Infuso, LLP, in Las Vegas, represents the Debtor. The Debtor's CRO is Odyssey Capital Group, LLC. CSD LLC: Court Approves Greene Infuso as Counsel ------------------------------------------------ CSD, LLC, sought and obtained approval from the U.S. Bankruptcy Court for the District of Nevada to employ James D. Greene, Esq., and Greene Infuso, LLP, as counsel to the Debtor, effective as of Oct. 12, 2012. Green Infuson will provide, among others, these legal services: (1) Advising and representing the Debtor concerning the rights and remedies of the Debtor's business company in regard of the business and with respect to the secured, priority and general claims of creditors; (2) Advising and representing the Debtor in connection with the restructuring of its financial and business matters, including sales of any assets; (3) Advising and representing the Debtor in connection with the investigation of potential causes of action against persons or entities, including, but no limited to, avoidance actions, and the litigation thereof, if warranted; and (4) Representing the Debtor in any proceeding or hearing in the Bankruptcy Court, and in any action in other courts where the rights of the company may be litigated or affected. To the best of the Debtor's knowledge, GI is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. The Debtor proposes to pay GI its customary hourly rates in effect from time to time and to reimburse GI for its expenses according to its reimbursement policies. About CSD LLC Las Vegas, Nev.-based CSD, LLC, filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-21668) on Oct. 12, 2012, estimating $50 million to $100 million in assets and $10 million to $50 million in debts. The petition was signed by Steven K. Kennedy, manager of CSD Management, LLC, manager. The Debtor owns 37.82 acres of land, seven houses, and an equestrian facility, all located at 6629 S. Pecos Road, Las Vegas, Nevada. The Debtor purchased the property from Mr. Wayne Newton and his wife, Kathleen, for $19.5 million to develop and operate a museum/tourist attraction honoring the life and career of Wayne Newton. Situated on the purchased property is the current home of the Newtons, known as "Casa de Shenandoah", which was to be used to showcase Wayne Newton's memorabilia. The museum remains unopened. DLH, LLC, which holds a 70% interest in the Debtor, contributed nearly $60 million towards development of the museum. DLH is a Nevada limited liability company, and its members are Lacy Harber and Dorothy Harber. Plans called for contributing $2 million toward the construction of a new home for Mr. Newton on the acreage. The new home hasn't been built, so Mr. Newton still lives in the existing home, paying minimal rent. While the Debtor has made substantial expenditures towards the development of the Newton Museum, the Debtor and the Newtons have been involved in certain disputes regarding the development of the museum. The Debtor in May 2012 filed a lawsuit in Nevada state court for fraud, civil conspiracy, and breach. The Newtons filed counterclaims. Because of the deteriorating relationship of the parties, it appears that it is no longer feasible for the parties to move forward with the development of the museum. On Aug. 9, 2012, the Debtor's committee members held an emergency meeting and voted to dissolve the Debtor. Though the Debtor has sought approval in the state court proceedings to dissolve, that matter is not scheduled to be heard until May 2013. Because the Debtor is out of money and options, and because the Debtor's prepetition secured lender, Neva Lane Acceptance, LLC, is unwilling to lend any additional funds to the Debtor on a prepetition basis, the majority of the committee members voted in favor of the bankruptcy filing. Although the Debtor is out of cash, it claims that it has substantial equity in its property. The Debtor has decided that a sale of the Debtor's property pursuant to Section 363 of the Bankruptcy Code, followed by the filing of a plan of liquidation, is the Debtor's best option for maximizing the value of the property and maximizing the return to the Debtor's creditors and interest holders. James D. Greene, Esq., at Greene Infuso, LLP, in Las Vegas, represents the Debtor. The Debtor's CRO is Odyssey Capital Group, LLC. D MEDICAL: Names David Schwartz as CEO, Yaacov Lev as Chairman -------------------------------------------------------------- D. Medical Industries Ltd. announced that as of Dec. 10, 2012, Mr. David Schwartz has ceased from serving as the Company's chairman and has been appointed as the Company's CEO. Mr. Schwartz will keep serving as a director of the Company. In addition, Mr. Yaacov Bar Lev, who served as a director of the Company as of Sept. 12, 2012, has been appointed as the Company's chairman as of Dec. 10, 2012. A detailed copy of the Form 8-K is available for free at: http://is.gd/1l0WDA About D. Medical D. Medical -- http://www.dmedicalindustries.com/-- is a medical device company that holds through its subsidiaries a portfolio of products and intellectual property in the area of insulin and drug delivery. D. Medical has developed durable and semi-disposable insulin pumps, which continuously infuse insulin into a patient's body, using its proprietary spring-based delivery technology. D. Medical believes that its spring-based delivery mechanism is cost- effective compared to the motor and gear train mechanisms that drive competitive insulin pumps and also allows it to incorporate certain advantageous functions and design features in its insulin pumps. The Company reported a net loss of NIS 48.30 million on NIS 1.51 million of sales for 2011, compared with a net loss of NIS 45.89 million on NIS 1.26 million of sales for 2010. The Company's balance sheet at Dec. 31, 2011, showed NIS 15.63 million in total assets, NIS 11.29 million in total liabilities, and equity of NIS 4.34 million. DENNY'S CORP: Adopts Pre-Arranged Stock Trading Plan ---------------------------------------------------- Denny's Corporation announced the adoption of a pre-arranged stock trading plan for the purpose of repurchasing a limited number of shares of the Company's common stock in accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934 and the Company's policies regarding stock transactions. This plan has been established in accordance with, and as a part of, the Company's stock repurchase program previously announced on May 18, 2012. Repurchases under the Company's 10b5-1 plan will be administered through an independent broker. The plan will cover the repurchase of shares commencing no earlier than Dec. 17, 2012 ,and expiring Feb. 22, 2013. Repurchases are subject to SEC regulations as well as certain price, market volume and timing constraints specified in the plan. About Denny's Corporation Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ: DENN) -- http://www.dennys.com/-- Denny's is one of America's largest full-service family restaurant chains, consisting of 1,348 franchised and licensed units and 232 company-owned units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. The Company said in its annual report for the year ended Dec. 28, 2011, that as the Company is heavily franchised, its financial results are contingent upon the operational and financial success of its franchisees. The Company receives royalties, contributions to advertising and, in some cases, lease payments from its franchisees. The Company has established operational standards, guidelines and strategic plans for its franchisees; however, the Company has limited control over how its franchisees' businesses are run. While the Company is responsible for ensuring the success of its entire chain of restaurants and for taking a longer term view with respect to system improvements, the Company's franchisees have individual business strategies and objectives, which might conflict with the Company's interests. The Company's franchisees may not be able to secure adequate financing to open or continue operating their Denny's restaurants. If they incur too much debt or if economic or sales trends deteriorate such that they are unable to repay existing debt, it could result in financial distress or even bankruptcy. If a significant number of franchisees become financially distressed, it could harm the Company's operating results through reduced royalties and lease income. The Company's balance sheet at Sept. 26, 2012, showed $325.85 million in total assets, $325.29 million in total liabilities and $563,000 in total shareholders' equity. * * * Denny's carries 'B2' corporate family and probability of default ratings from Moody's Investors Service. DEWEY & LEBOEUF: Seeks Extension of Case Removal Window ------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that Dewey LeBoeuf LLP asked a New York bankruptcy judge to extend from Dec. 31 to March 4 the time during which it can remove actions it faces, including 12 prepetition cases already filed against it. About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. Dewey on Nov. 21, 2012, filed a Chapter 11 liquidating plan and disclosure statement, which incorporates the partner contribution plan approved by the bankruptcy court in October. Under the so- called PCP, 440 former partners will receive releases in exchange for $71.5 million in contributions. The plan is also based on a proposed settlement between secured lenders and the unsecured creditors' committee. Secured lenders will have an allowed secured claim for $261.9 million, along with a $100 million unsecured claim for the shortfall in collections on their collateral. Unsecured creditors will have $285 million in allowed claim. In the new lender settlement, secured creditors would permit $54 million in collection of accounts receivable to be utilized in the liquidation. From the first $67.5 million collected in the partners' settlement, the plan offers 80% to secured lenders, with the remaining 20% earmarked for unsecured creditors. Collections from the partners settlement above $67.5 million would be split 50-50 between secured and unsecured creditors. Meanwhile, secured creditors will receive no distribution on the $100 million deficiency claim from the first $67.5 million from the partners' settlement. If secured lenders don't agree to release partners, they receive nothing from the partners' settlement payments. From collection of other assets -- such as insurance, claims against firm management and lawsuits -- the plan divides proceeds, with lenders receiving 60% to 70% and unsecured creditors taking the remainder. A hearing to approve the explanatory Disclosure Statement is set for Jan. 3 at 2:00 p.m. Objections to the Disclosure Statement are due Dec. 24. The Debtor aims a confirmation hearing to approve the plan by the end of February. DORSET INVESTMENT: Case Summary & 6 Unsecured Creditors ------------------------------------------------------- Debtor: Dorset Investment Group, Inc. 956 SW 12th Avenue Pompano Beach, FL 33069 Bankruptcy Case No.: 12-39599 Chapter 11 Petition Date: December 11, 2012 Court: U.S. Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Raymond B. Ray Debtor's Counsel: Susan D. Lasky, Esq. SUSAN D. LASKY, P.A. 2101 N. Andrews Avenue, #405 Wilton Manors, FL 33311 Tel: (954) 565-5854 Fax: (954) 206-0628 E-mail: ECF@suelasky.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its six largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flsb12-39599.pdf The petition was signed by Ian Squire, director. DOVE CREEK: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Dove Creek Quarries, LLC 17600 West P.O. Box 729 Park Valley, UT 84329 Bankruptcy Case No.: 12-35496 Chapter 11 Petition Date: December 12, 2012 Court: United States Bankruptcy Court District of Utah (Salt Lake City) Judge: Joel T. Marker Debtor's Counsel: Matthew M. Boley, Esq. PARSONS KINGHORN HARRIS 111 E. Broadway 11th Floor Salt Lake City, UT 84111 Tel: (801) 363-4300 Fax: (801) 363-4378 E-mail: mmb@pkhlawyers.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by David D. Morris, member/manager. DUNLAP OIL: Court OKs Peritus Commercial as Financial Advisor ------------------------------------------------------------- Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, sought and obtained approval from the Bankruptcy Court for authority to employ Peritus Commercial Finance LLC as their financial advisor. Peritus is a full service business and financial consulting firm with expertise in the areas of corporate finance and valuation, mergers and acquisitions, financial restructuring, business oversight, and litigation support. The Debtors have determined that Peritus has the resources, expertise, and experience necessary to serve as financial advisor. Among other things, the Debtors will look to Peritus: -- for advise in connection with cash flow and financing issues; and with business and financial restructuring of the company, and in the formulation, negotiation, and confirmation of a chapter 11 reorganization plan; -- to perform financial analysis of the Debtors' business and operations; and perform valuation and feasibility analyses; and -- to provide overall financial oversight. The current hourly rates for Peritus professionals who are expected to have primary responsibility for the engagement are: Steve Odenkirk $200 per hour Member $200 per hour Prior to the Petition Date, the Debtors provided Peritus with an advance fee retainer in the amount of $5,000. Prior to bankruptcy filing, the Debtors incurred charges for services performed by Peritus in the amount of $3,260 which were applied against the Retainer. Accordingly, the remaining amount of the Retainer is $1,740. Peritus has informed the Debtors that Peritus will hold the Retainer in trust during the pendency of this case to be applied toward the payment of Peritus approved compensation and expenses awarded in the case pursuant to 11 U.S.C. Sec. 330(a)(1). Peritus provided certain business, financial, and valuation services to the Debtors prepetition. In the 12 months prior to the bankruptcy filing, the Debtors paid Peritus professional fees and expenses totaling $37,354, in addition to the Retainer. All payments made by the Debtors to Peritus for professional fees and expenses were incurred and paid in the ordinary course of business of the Debtors and Peritus. Peritus currently is not owed any unpaid professional fees or expenses in connection with prepetition services rendered. To the best knowledge of the Debtors, Peritus does not hold or represent any interest adverse to the Debtors. Peritus may be reached at: Steve Odenkirk PERITUS COMMERCIAL FINANCE LLC 674 E. Bridal Veil Falls Rd. Oro Valley, AZ 85755 Tel: 520-360-2782 E-mail: steve@perituscf.com About Dunlap Oil and Quail Hollow Inn Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, sought Chapter 11 protection (Bankr. D. Ariz. Case No. 12-23252 and 12-23256) on Oct. 24, 2012. Founded in 1958, Dunlap Oil is a Willcox, Arizona-based operator of 14 gasoline services stations. QOH owns the 89-room outside corridor Best Western Plus Quail Hollow hotel in Willcox. The two companies are owned and operated by the Dunlap family. Judge James M. Marlar presides over the case. John R. Clemency, Esq., and Lindsi M. Weber, Esq., at Gallagher & Kennedy, P.A., serve as the Debtors' counsel. Peritus Commercial Finance LLC serves as financial advisor. QOH declared assets of at least $1 million and debts exceeding $10 million. DOC estimated assets and debts of $10 million to $50 million. The petitions were signed by Theodore Dunlap, president. DUNLAP OIL: Gets Final Approval on Use of Cash Collateral --------------------------------------------------------- Dunlap Oil Company Inc. and Quail Hollow Inn LLC won final authority to use cash tied to prepetition obligations to their secured lenders. The Debtors said they require the use of cash collateral to operate their businesses and reorganize. The Debtors' primary secured creditors are Canyon Community Bank, which asserts an indebtedness of roughly $6.275 million, and Compass Bank, which asserts an indebtedness of roughly $5.44 million. In addition, Dunlap Oil's primary fuel supplier, Jackson Oil Company, asserts an interest in Dunlap Oil's Chevron brand fuels, including proceeds. To the extent that CCB, Compass, Jackson, or any other creditor demonstrates a perfected interest in the Cash Collateral, as adequate protection of any creditor's interest in the Cash Collateral, the Debtors have agreed to grant replacement liens on all similar collateral generated postpetition to the same extent, validity and priority as any liens attached to its prepetition collateral. About Dunlap Oil and Quail Hollow Inn Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, sought Chapter 11 protection (Bankr. D. Ariz. Case No. 12-23252 and 12-23256) on Oct. 24, 2012. Founded in 1958, Dunlap Oil is a Willcox, Arizona-based operator of 14 gasoline services stations. QOH owns the 89-room outside corridor Best Western Plus Quail Hollow hotel in Willcox. The two companies are owned and operated by the Dunlap family. Judge James M. Marlar presides over the case. John R. Clemency, Esq., and Lindsi M. Weber, Esq., at Gallagher & Kennedy, P.A., serve as the Debtors' counsel. Peritus Commercial Finance LLC serves as financial advisor. QOH declared assets of at least $1 million and debts exceeding $10 million. DOC estimated assets and debts of $10 million to $50 million. The petitions were signed by Theodore Dunlap, president. EDISON MISSION: Bankruptcy Seen This Week; Kirkland on Board ------------------------------------------------------------ Mike Spector, writing for The Wall Street Journal, reports that people familiar with the matter said Edison Mission Energy is preparing to file for Chapter 11 bankruptcy protection in the coming days. The sources said Edison Mission could file as soon as Sunday night unless a deal is reached with its creditors. Sources told WSJ that Edison Mission has hired law firm Kirkland & Ellis LLP to work on the expected bankruptcy. They also said investment banks Moelis & Co. and Perella Weinberg Partners are also working on the matter. The report recounts Edison Mission skipped $97 million in interest payments on bonds due Nov. 15 and obtained a grace period that expires Monday. Edison Mission warned in a regulatory filing last month the payment default would likely result in the company's bankruptcy filing. The company also has warned it doesn't expect to have enough cash to address $500 million of debt coming due in June. WSJ reports a company spokesperson did not respond to requests for comment. According to WSJ, Edison Mission owes bondholders $3.7 billion and could yet reach a deal with those creditors before next week in an attempt to stay out of bankruptcy. But the bonds are held by a wide array of investors, making it difficult to get enough creditors to sign off on a deal, the people familiar with the matter said. The bondholders of Edison Mission and its parent, Edison International, have discussed a deal that can be executed in bankruptcy court, some of the people said, according to WSJ. Edison Mission's large bondholders include hedge funds Avenue Capital Group and York Capital Management, the sources said. The deal would likely result in Edison International severing ties with Edison Mission, these people said. As part of the breakup, Edison International would make payments to Edison Mission as part of a complex tax arrangement for two years, assume certain pension and retiree liabilities and possibly make other payments related to a separate potential tax liability, the people said. WSJ's Mr. Spector explains that Edison International, the parent, offsets taxable income through operating losses at Edison Mission, the subsidiary. That results in the parent making payments to the subsidiary. The arrangement requires the parent company to own at least 80% of the subsidiary. As a result, Edison Mission's bondholders can't swap their debt for big ownership stakes in the company, because that would threaten the parent's ability to continue taking advantage of the tax arrangement. That makes it difficult for a restructuring deal to be reached with creditors outside of bankruptcy, WSJ says. WSJ also reports that people familiar with the situation said that in the deal discussed with bondholders, Edison Mission would likely remain in bankruptcy court for some time while the tax arrangement continues, with bondholders converting debt to equity later. One of the sources said Edison Mission could at some point look for a buyer. People familiar with the matter, according to WSJ, also said the company must also spend money to retrofit the Midwest Generation plants and probably needs to renegotiate a $1.5 billion lease there. ELBIT VISION: Closes $500,000 Private Placement Financing --------------------------------------------------------- Elbit Vision Systems Ltd. closed on Dec. 10, 2012, a non-brokered private placement with Mr. Avi Gross. The Company issued and sold 5,263,158 ordinary shares to Mr. Gross at a price of $0.095 per ordinary share for gross proceeds of $500,000 and Mr. Gross provided a $300,000 convertible loan to the Company which may be converted in whole or in part at a price per share of $0.095, within 6 months of the closing date. Should the loan not be converted, the principal and interest (at LIBOR per annum) will be repayable over the following 12 months. As part of the investment, Mr. Gross has also received two warrants to purchase ordinary shares of the Company. The first warrant is exercisable for up to $200,000 of ordinary shares, subject to adjustment, during the 6 month period following the issuance of the warrant at a price per share of $0.095/share. The second warrant is exercisable for up to $1,000,000 of ordinary shares, subject to adjustment, during the period between from the 6 month anniversary of the closing until Feb. 5, 2015. The exercise price of the second warrant is $0.20 per share unless the Company achieves gross revenues of less than $19,000,000 for the year ending Dec. 31, 2014, in which case the exercise price will be reduced to $0.17 per share. Exercise of the second warrant will be contingent on Mr. Gross converting or exercising at least 50% of the aggregate number of shares issuable under both the loan and the first warrant, and the amount issuable will be proportionally reduced based on the aggregate portion of the convertible loan converted and the first warrant exercised. Following the investment Mr. Gross will hold approximately 7.025% of the outstanding share capital of the Company, immediately following the closing. Mr. Gross is entitled to appoint an observer to the Company's board of directors, and should he convert or exercise at least 50% of the value of loan and the first warrant, he will be entitled to appoint a member of the board. The proceeds of the transaction will be used principally for the expansion of the Company's marketing efforts and activities mainly in Asia and South America. Sam Cohen, CEO of EVS commented, "We are delighted that Mr. Avi Gross has agreed to become part of EVS. Mr. Gross brings a wealth of knowledge from his lifetime of successful business experience in the textile industry worldwide which EVS has identified as our primary growth sector. He shares our belief in and commitment towards this dynamic market. His global business network will be an asset to our marketing strategy while his extensive experience will be a resource for our expanding product portfolio." Avi Gross said, "I am excited to partner with the excellent management team at EVS. The company has developed incredibly innovative vision inspection products which address a real need in the textile industry, and I look forward to contributing to the company's future success." About Elbit Vision Based in Caesarea, Israel, Elbit Vision Systems Ltd. (OTC BB: EVSNF.OB) offers a broad portfolio of automatic State-of-the-Art Visual Inspection Systems for both in-line and off-line applications, and process monitoring systems used to improve product quality, safety, and increase production efficiency. The Company's balance sheet at Sept. 30, 2012, showed US$3.62 million in total assets, US$4.28 million in total liabilities, and a US$664,000 shareholders' deficiency. FENWAL INC: S&P Withdraws 'B+' Corp. Credit Rating at Request ------------------------------------------------------------- Standard & Poor's Ratings Services withdrew all of its ratings, including the 'B+' corporate credit rating, on Lake Zurich, Ill.- based Fenwal Inc. at the company's request. The rating withdrawal follows the close of Fenwal's acquisition by Fresenius Kabi, a wholly owned subsidiary of Fresenius SE & Co. KGaA. FIDELITY & GUARANTY: S&P Raises Corp. Credit Rating to 'BB+' ------------------------------------------------------------ Standard & Poor's Ratings Services raised its rating on Fidelity & Guaranty Life Insurance Co. to 'BB+' from 'BB'. "We also revised the outlook to stable from positive. We are now reviewing the company on a solicited basis. At the same time, we assigned Fidelity & Guaranty Life Insurance Co. of New York our 'BB+' rating with a stable outlook. (Collectively, we refer to both companies as F&G)," S&P said. "The rating upgrade and stable outlook reflect F&G's strengthened competitive position, decreased asset risk, and improving operating performance," said Standard & Poor's credit analyst Marilyn Castro. "As of Sept. 30, 2012, F&G earned adjusted statutory net income of $211.5 million, a $64 million increase from prior-year-end levels--2011 results contain the negative impact of about $140 million from the closing of several reinsurance transactions. Adjusted statutory net income for the year so far, as of Sept. 30, 2012, comprised reported net income of $88 million, net realized capital losses of $5 million, and $118 million in unrealized gains from derivatives. When analyzing statutory net income, we adjust earnings to include the unrealized gains or losses on derivatives backing the fixed-indexed annuities--reported as a component of capital and surplus--to match it against the offsetting change in reserves that are reported in income from operations." "F&G recently returned to a top 10 position in indexed annuity sales as of March 31, 2012, a position it last held in 2007. As of June 30, 2012, F&G's indexed annuity sales totaled $1 billion-- almost triple prior-year sales. For the same period, indexed life sales (on a weighted basis) were $9.4 million, a modest increase from prior-year levels. However, F&G's narrow business profile may affect its competitive positioning in the future," S&P said. "In its fulfillment of the terms and conditions for the pending sale of F&G in 2011 from Old Mutual PLC, Harbinger identified certain investments that should be eliminated from the investment portfolio. F&G disposed of these investments in 2010-2011 to lower the risk in its portfolio without incurring significant losses. Although 97% of F&G's bonds were rated investment grade as of Dec. 31, 2011, above-average credit exposure to 'BBB' rated investments (44% of the fixed-income portfolio) offsets its below-average exposure to speculative-grade assets. More than 85% of F&G's investments are fixed income, mainly investment-grade corporate bonds, municipal bonds, and agency collateralized mortgage obligations. The company owns minimal residential mortgage-backed securities (4% of total invested assets) or commercial mortgage- backed securities (3%) and has a small exposure to real estate. F&G also limits its exposure to alternative investments," S&P said. "The ratings on F&G reflect its good competitive position, which it derives from its distribution relationships and fixed index annuities product-development capabilities in its niche markets. The stable outlook reflects F&G's improved sales trends, de- risking of the investment portfolio, and strengthened capitalization. We expect F&G's indexed annuity and life sales growth to be consistent with industry trends for 2012 and 2013. We also expect F&G to generate at least $100 million in adjusted statutory net income in 2012 and 2013 and maintain a top 10 position in its primary niche business: fixed-indexed annuities," S&P said. "We could raise the rating if capitalization becomes sustainably redundant at the 'BBB' confidence level as measured by our model, and if operating performance and risk management continue to improve," Ms. Castro continued. "We could lower the rating if F&G's RBC ratio declines below 300% or capitalization under our model declines significantly. We could also lower the ratings if F&G's investment risk increases aggressively or if its competitive position weakens." FIRST HORIZON: Fitch Lowers Subordinated Debt Rating to 'BB' ------------------------------------------------------------ Fitch Ratings has downgraded the long-term Issuer Default Ratings (IDRs) of First Horizon National Corporation (FHN) and lead bank First Tennessee Bank, N.A. (FTBNA) to 'BBB-' from 'BBB.' The ratings have been removed from Rating Watch Negative and assigned a Stable Rating Outlook. Rating Action Rationale The downgrade of FHN's ratings reflects Fitch's view of FHN's ongoing future performance amidst a challenging economic environment. Fitch notes that FHN has made considerable progress in shifting its strategy over the past few years, but the progress in terms of returning to stronger levels of profitability has been delayed, due in part to the weak economic recovery. First Horizon will likely report a net loss for the year 2012, following a couple years of relatively weak profitability measures, both in absolute and relative terms to peers. Results in 2012 were particularly impacted by the $250 million pre-tax charge it took in 2Q12 relating to expected GSE mortgage repurchase expenses. FHN also continues to report one-time charges resulting from the company's ongoing restructuring and realignment of strategy. RATING DRIVERS - IDR and VR Fitch believes that going forward earnings will be challenged by the expected prolonged period of low interest rates, along with high credit costs related to the nonstrategic portfolio. The nonstrategic loan portfolio, comprising approximately 24% of total loans, has been a continual drag on consolidated results, costing FHN 20 to 25 bps of return on average assets each quarter. FHN has also reported elevated mortgage repurchase expenses in the nonstrategic business segment stemming from its prior nationwide mortgage lending strategy, which was exited and sold in 2008. Outside of any other one-time events, Fitch estimates a consolidated ROA of between 75 and 85 bps over the next 18 to 24 months, roughly in line with 'BBB-' rated banks. Whereas FHN's capital ratios were formerly strong in relation to peer, a combination of sustained, weak earnings performance (including the large mortgage repurchase charge mentioned above), a slowdown in balance sheet shrinkage since late 2010, and recently, share buybacks has brought capital ratios more in line with similarly rated banks. Between 3Q11 and 3Q12, Tier 1 common fell 130 bps to 10.69%. Capital remains acceptable in Fitch's view, but no longer represents a ratings strength, which previously had helped to offset weaker earnings and elevated problem assets. Fitch notes that under the current Basel III framework, FHN has disclosed that its pro forma Tier 1 common ratio would fall approximately 240 bps, as of Sept. 30, 2012, making it more vulnerable to the proposed NPR than others in its peer group. Capital ratios are impacted under Basel III mainly due to the high level of higher-risk residential real estate-related assets. The estimated pro forma impact would place FHN's Tier 1 Common ratio at the low end of company targets of between 8% and 9% as of Sept. 30, 2012. Fitch believes FHN is still exposed to elevated legal risk stemming from its private label securitizations (PLS), though the ultimate timing and amounts are difficult to forecast. FHN originated and securitized $27 billion of PLS between 2005 and 2008, and although the company has not received any repurchase requests to date, FHN is currently subject to six securitization- related lawsuits and three indemnification claims. The outcome and timing of these lawsuits, as well as any lawsuits FHN could be named apart of in the future, is presently unclear and thus not explicitly incorporated in FHN's ratings. However, Fitch believes that even with a large charge of up to 100 bps of Tier 1 Common, FHN's ratings are still firmly situated at 'BBB-'. Positively, FHN continues to report improvement in asset quality metrics. Fitch-calculated nonperforming assets (NPAs) and net charge offs (NCOs) have decreased 3.6% and 25%, respectively through 3Q12 versus a year ago. Fitch anticipates that asset quality with continue to modestly improve going forward as management works through the company's nonstrategic portfolio, but will likely not experience significant improvements as seen in the past given FHN's level of residential real estate-related TDRs (constituting over half of NPAs). This is due to the lifetime TDR status of residential TDRs, while commercial TDRs can cure and no longer be classified as TDRs after a certain period of performance. The visibility into re-default performance for TDRs is not good across the industry. However, FHN's reserves to TDRs appeared adequate at 16% as of Sept. 30, 2012. Fitch notes that the liquidity profile at FTBNA has continued to improve, with a material improvement in wholesale and credit sensitive funding dependence since late 2007. Moreover, similar to prior quarters, Fitch assumes FHN will continue to receive regulatory approval to upstream dividends from FTBNA over future quarters given its present Tier 1 Common ratio of close to 15%. Assuming this, Fitch believes there are adequate liquid funds available to the parent to meet not only operating expenses, but also the maturing $100 million subordinated debt in May 2013. RATING SENSITIVITIES - IDR and VR FHN, like other banking institutions in the industry, has been pursuing various efficiency initiatives in an effort to reduce costs and generate higher returns for stakeholders. The successful execution of efficiency initiatives could lead to rating action or a change in outlook over the longer term as FHN's reports profitability measures more in line with similarly rated peers. Fitch expects FHN's profitability metrics to remain somewhat muted over the near term as consolidated results are weighed down by the drag of the noncore assets. Further, while Fitch believes FHN has sufficient capital to absorb a large, one-time charge related to PLS put back risk as mentioned above, a charge outside of those expectations and similar to that of its GSE-experience could prompt negative rating action or change in outlook. Finally, as stated above, it is Fitch's assumption that FTBNA will continue to receive OCC approval relating to the upstream of dividends in order to meet holding company liquidity needs. If the OCC were to cease the approval of dividends to the parent and there were not adequate funds to meet liquidity needs at the holding company, negative rating action would be a likely outcome. RATING DRIVERS & SENSITIVITIES - SUPPORT RATING & SUPPORT RATING FLOOR In Fitch's view, FHN is not considered systemically important and therefore, believes the probability of state support is unlikely. Therefore, FHN's IDR and VR do not incorporate any government support. RATING DRIVERS & SENSITIVITIES - Subordinated Debt and Other Hybrid Securities Subordinated debt and other hybrid capital issued by FHN, and its subsidiaries FTBNA and First Tennessee Capital II are all notched down from FHN's VR of 'bbb-' in accordance with Fitch's assessment of each instrument's respective non-performance and relative Loss Severity risk profiles, which vary considerably. Their ratings are primarily sensitive to any change in FHN's VR. RATING DRIVERS & SENSITIVITIES - Holding Company: FHN's, IDR and VR is equalized with FTBNA's reflecting its role as the bank holding company, which is mandated in the U.S. to act as a source of strength for its bank subsidiary. Double leverage was at 128% for FHN at Sept. 30, 2012. RATING DRIVERS & SENSITIVITIES - Subsidiary and Affiliated Company Rating: The below ratings factor in a high probability of support from the parent to its subsidiary. This reflects the fact that performing parent banks have very rarely allowed subsidiaries to default. It also considers the high level of integration, brand, management, financial and reputational incentives to avoid subsidiary defaults. Fitch has downgraded the following ratings: First Horizon National Corporation -- Long-term IDR to 'BBB-' from 'BBB'; Outlook Stable; -- Viability to 'bbb-' from 'bbb'; -- Short-term IDR to 'F3' from 'F2'; -- Subordinated debt to 'BB+' from 'BBB-'; -- Senior to 'BBB-' from 'BBB'. First Tennessee Bank, N.A. -- Long-term IDR to 'BBB-' from 'BBB'; Outlook Stable; -- Viability to 'bbb-' from 'bbb'; -- Short-term IDR to 'F3' from 'F2'; -- Long-term deposits to 'BBB' from 'BBB+'; -- Short-term deposits to 'F3' from 'F2'; -- Short-term debt to 'F3' from 'F2'; -- Subordinated debt to 'BB+' from 'BBB-'; -- Preferred stock to 'B' from 'B+'. First Tennessee Capital II -- Preferred stock to 'B+' from 'BB-'. Fitch affirms the following ratings: First Horizon National Corporation -- Support at '5'; -- Support Floor at 'NF'. First Tennessee Bank, N.A. -- Support at '5'; -- Support Floor at 'NF'. FLAGSHIP FRANCHISES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Flagship Franchises of Minnesota, LLC dba Sarah Adult Day Services 4833 West 123rd Street Savage, MN 55378 Bankruptcy Case No.: 12-36898 Chapter 11 Petition Date: December 12, 2012 Court: United States Bankruptcy Court District of Minnesota (St. Paul) Judge: Kathleen H. Sanberg Debtor's Counsel: Edwin H. Caldie, Esq. LEONARD, STREET AND DEINARD 150 South Fifth Street Suite 2300 Minneapolis, MN 55402 Tel: (612) 335-1404 E-mail: Edwin.Caldie@leonard.com Scheduled Assets: $162,229 Scheduled Liabilities: $1,552,906 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mnb12-36898.pdf The petition was signed by Deborah Delaney, founder and manager. G & C CONSTRUCTION: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: G & C Construction, LLC 5510 Kiln Delisle Road Kiln, MS 39556 Bankruptcy Case No.: 12-52530 Chapter 11 Petition Date: December 11, 2012 Court: U.S. Bankruptcy Court Southern District of Mississippi (Gulfport Divisional Office) Judge: Katharine M. Samson Debtor's Counsel: Robert Gambrell, Esq. GAMBRELL & ASSOCIATES, PLLC 101 Ricky D. Britt Boulevard, Suite 3 Oxford, MS 38655 Tel: (662) 281-8800 Fax: (662) 202-1002 E-mail: rg@ms-bankruptcy.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Karen Groner, managing member. GLYECO INC: Receives $4.2 Million Proceeds from Offering -------------------------------------------------------- GlyEco, Inc., completed its current offering on Dec. 10, 2012. The Company issued an aggregate of 8,450,000 units at a purchase price of $0.50 per unit. Proceeds from the Offering totalled $4,225,000. Each unit sold in the Offering consists of (i) one share of common stock, par value $0.0001 per share, of the Company, and (ii) one warrant to purchase one share of common stock of the Company from the date of issuance until the third anniversary date such date for a purchase price of $1.00 per share. This offering was made to accredited investors only, in accordance with Rule 506 of Regulation D of the Securities Act of 1933. About GlyEco, Inc. Phoenix, Ariz.-based GlyEco, Inc., is a green chemistry company formed to roll-out its proprietary and patent pending glycol recycling technology that transforms waste glycols, a hazardous material, into profitable green products. Jorgensen & Co., in Lehi, Utah, expressed substantial doubt about GlyEco'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 not yet achieved profitable operations and is dependent on the Company's ability to raise capital from stockholders or other sources and other factors to sustain operations. The Company's balance sheet at Sept. 30, 2012, showed $1.55 million in total assets, $2.24 million in total liabilities and a $685,243 total stockholders' deficit. GYMBOREE CORP: Moody's Reviews 'B3' CFR/PDR for Downgrade --------------------------------------------------------- Moody's Investors Service placed all ratings of The Gymboree Corporation's on review for downgrade. LGD assessments are subject to change. The following ratings were placed on review for downgrade: Corporate Family Rating at B3 Probability of Default Rating at B3 $794 million secured term loan due February 2018 at B2 (LGD 3, 39%) $400 million senior unsecured notes due December 2018 at Caa2 (LGD 5, 86%) Ratings Rationale The review for downgrade considers the company's weak third quarter results with adjusted EBITDA (as defined by the company) falling 23% and its updated view that the fourth quarter will show adjusted EBITDA to be comparable to slightly higher than the pror year. This performance in the second half of fiscal 2012 is well below Moody's previous expectations. Management attributed the weaker performance primarily to a change in seasonal buying patterns by its customers at the Gymboree brand, which led to higher than expected markdowns. This, however, is the latest in a series of execution missteps by the company over the past two years and EBITDA is meaningfully below pre-LBO levels. Moody's is also becoming increasingly concerned that lower sales and weak execution at the Gymboree brand could have negative impacts on customer perception of the brand, thus operating margins could become less likely to meaningfully recover toward historical levels. The catalysts to reverse recent negative trends are clouded as the company lacks a permanent CEO and CFO at the current time. Moody's review will focus on the company's operating performance in its fourth quarter which historically is a meaningful seasonal quarter. The review will also focus on management's strategies to stabilize performance and to enact strategies to arrest erosion in same store sales. Moody's notes that while the company's operating performance is under pressure, its liquidity position remains very good, with access to a substantially unused $225 million (unrated) asset based revolver and the lack of any material funded debt maturities until 2018. The principal methodology used in rating Gymboree was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in San Francisco, CA The Gymboree Corporation operated 1,228 retail stores as of October 27, 2012, comprising Gymboree, Gymboree Outlet, Janie and Jack, and Crazy 8 stores as well as online stores for these brands. The company also offers directed parent-child development play programs at 714 franchised and Company-operated Gymboree Play & Music centers in the United States and 42 other countries. HENRY COUNTY: Suspends Filing of Reports with SEC ------------------------------------------------- Henry County Bancshares, Inc., filed a Form 15 with the U.S. Securities and Exchange Commission to voluntarily deregister its common stock and suspend its reporting obligation with the SEC. Henry County Bancshares is a bank holding company and its common stock, par value $2.50 per share, is held of record by 550 persons. The Company is relying on Section 12(g)(4) of the Securities Exchange Act of 1934, as amended by the Jumpstart Our Business Startups Act, to terminate the registration of its common under Section 12(g) of the Act. About Henry County Stockbridge, Georgia-based Henry County Bancshares, Inc., is a Georgia business corporation which operates as a bank holding company. The Company was incorporated on June 22, 1982, for the purpose of reorganizing The First State Bank to operate within a holding company structure. The Bank is a wholly owned subsidiary of the Company. The Company's principal activities consist of owning and supervising the Bank, which engages in a full service commercial and consumer banking business, as well as a variety of deposit services provided to its customers. Until Dec. 15, 2009, when it suspended operations, the Company also conducted mortgage-lending operations through the Bank's wholly owned subsidiary, First Metro Mortgage Company. First Metro provided the Bank's customers with a wide range of mortgage banking services and products in the same primary market area as the Bank. As reported by the TCR on April 6, 2011, Mauldin & Jenkins, LLC, in Atlanta, Ga., expressed substantial doubt about Henry County Bancshares' ability to continue as a going concern. The independent auditors noted that the Company as suffered significant losses from operations due to the economic downturn, which has resulted in declining levels of capital. The Company reported a net loss of $6.7 million on $10.0 million of net interest income for 2010, compared with a net loss of $36.6 million on $6.6 million of net interest income for 2009. Other operating income was $3.9 million for 2010, compared with $2.6 million for 2009. The Company's balance sheet at March 31, 2011, showed $574.87 million in total assets, $560.11 million in total liabilities, and $14.76 million in total stockholders' equity. HIGH LINER: S&P Revises Outlook on 'B' CCR on Improved Performance ------------------------------------------------------------------ Standard & Poor's Ratings Services said it revised its outlook on Lunenburg, N.S.-based High Liner Foods Inc. to positive from stable. "The revised outlook reflects what we view as High Liner's improved operating performance and credit protection measures, which we expect will continue in 2013, "said Standard & Poor's credit analyst Lori Harris. "Adjusted debt to EBITDA of 4x for the last 12 months ended Sept. 29, 2012, is down from about 5x on a pro forma basis a year ago. In addition, the company completed the integration of Icelandic USA in November 2012, which will positively affect High Liner's operating margin in 2013 because of synergistic savings," S&P said. Standard & Poor's also affirmed its 'B' long-term corporate credit rating on High Liner, as well as its 'B' issue-level on the company's US$250 million senior secured term loan due 2017. The '4' recovery rating on the debt is unchanged. "The ratings on High Liner reflect Standard & Poor's view of the company's 'weak' business risk profile and 'aggressive' financial risk profile (as our criteria define the terms). We base our business risk assessment on the company's narrow product portfolio and customer concentration. Partially offsetting these factors, in our view, is the company's solid market position in its niche as the leading supplier of value-added frozen seafood in North America. We base our financial risk assessment on the company's aggressive financial policy, acquisitive nature, and weak, but improving, credit protection measures. We assess the company's management and governance as "satisfactory" as per our criteria," S&P said. "In December 2011, High Liner acquired the U.S. and Asian operations of Reykjavik, Iceland-based Icelandic Group h.f. for US$233 million in a debt-financed transaction; the acquisition represented a very large transaction for High Liner," S&P said. "The positive outlook on High Liner is based on Standard & Poor's belief that the company will maintain its solid market position in the North American value-added frozen seafood industry, while strengthening its profitability and credit measures in the next year. We could consider raising the ratings if High Liner is able to strengthen its profitability and adjusted credit metrics on a sustainable basis, including funds from operations to debt above 15%, debt leverage below 4x, and EBITDA cushion above 15% within its financial covenants. Alternatively, we could revise the outlook back to stable in the event the company's operating performance flattens or if High Liner's adjusted credit ratios or financial flexibility do not show improvement in 2013," S&P said. HIGHWOODS PROPERTIES: Fitch Puts Rating on Preferred Stock at 'BB' ------------------------------------------------------------------ Fitch Ratings assigns a credit rating of 'BBB-' to the $250 million aggregate principal amount 3.625% senior unsecured notes due 2023 issued by Highwoods Realty Limited Partnership, a subsidiary of Highwoods Properties, Inc. (NYSE: HIW). The notes are due Jan. 15, 2023, were issued at 98.9% of par and priced to yield 3.752%. Highwoods expects to use the net proceeds to reduce amounts outstanding under the Company's $475 million revolving credit facility and for general corporate purposes. Fitch currently rates Highwoods Properties as follows: Highwoods Properties, Inc. -- Issuer Default Rating (IDR) 'BBB-'; -- Preferred stock 'BB'. Highwoods Realty Limited Partnership -- Long-term IDR 'BBB-'; -- Unsecured revolving credit facility 'BBB-'; -- Unsecured term loans 'BBB-'; -- Senior unsecured notes 'BBB-.' The Rating Outlook is Stable. The 'BBB-' IDR reflects Highwoods' improved asset portfolio that is well-positioned in its core markets, a granular, strong credit quality tenant base, and manageable lease expiration and debt maturity schedules. These strengths are tempered by challenging office operating fundamentals in many of these markets, which have resulted in stagnant same-store NOI growth and difficult leasing conditions. This is evident by elevated capital expenditures and sustained negative cash rent spreads. However, Fitch expects Highwoods' leverage and coverage metrics to remain appropriate for the rating over the next 12-to-24 months. The Stable Outlook considers Highwoods' adequate liquidity and access to capital and solid unencumbered asset coverage of unsecured debt, partially offset by Fitch's expectation of soft property-level fundamentals. The economic recovery remains fragile, with the high unemployment rate continuing to adversely impact business prospects of many of Highwoods' current tenants, and general office space users. Highwoods' portfolio is focused primarily in the Southeast region, with the top four markets represented by Raleigh (16.3% of annualized cash revenue), Atlanta (15.2%), Tampa (12.8%) and Nashville (11.9%). The company has also continued to grow in the Pittsburgh market, which Fitch views favorably. The recent acquisition of EQT Plaza is consistent with management's strategy to expand the company's footprint in downtown Pittsburgh, which is expected to see above-average demand and robust fundamentals over the near to medium-term. Highwoods' geographic focus, with exposure to some weaker markets with lower barriers to entry, has resulted in same-store NOI declines of 0.6%, 2.9% and 2.8% for 2011, 2010 and 2009, respectively. Operating performance has seen positive momentum more recently, however, with 5.4% same-store NOI growth in first quarter-2012 (1Q'12), 1.8% in 2Q'12 and 2.7% in 3Q'12. This was driven by an increase in same-store occupancy, which has seen sustained improvement to 90.4% at 3Q'12 from 90.0% at 3Q'11. Occupancy improvement has been partially offset by continued rent declines. Office cash rollover rents declined 6% in 1Q'12, 6.3% in 2Q'12 and 9.7% in 3Q'12. This follows significant declines in 2010-2011 that ranged from 5% to 12.4%. Despite the decline, average cash rental rates for all in-place leases were flat year- over-year. This was driven by contractual rent escalators and recent acquisitions and dispositions, which have had a higher net effect on in-place rents. Highwoods' portfolio benefits from solid tenant diversification. The top 10 tenants represent 21% of annual base rent (ABR) as of Sept. 30, 2012. In addition, the US Federal Government is the largest tenant, contributing 7.2% of ABR as of Sept. 30, 2012 (down from 8.9% at Sept. 30, 2011). Highwoods also has a well- laddered lease expiration schedule, with an average of 12% of annual base rent expiring in each of the next five years. This should mitigate the impact of further rent declines. From 2006 - 2011, Highwoods underperformed in comparison to a selected group of office REIT peers by 40bps in same-store NOI performance and 130 bps in occupancy rates. However, Highwoods outperformed its markets on an average NOI basis (as followed by Property & Portfolio Research (PPR)) by nearly 100 bps for the same timeframe. Highwoods competes in markets with more private developers. This enables Highwoods to utilize its stronger liquidity and access to capital to attract and retain tenants. Few of the selected REIT peers own properties in the same markets as HIW. Highwoods has solid fixed charge coverage levels despite same- store NOI deterioration since early 2009. Fixed charge coverage has declined to 2.1x for the twelve months ended Sept. 30, 2012 from 2.2x for full year 2009, but remains appropriate for the 'BBB-' rating. Fitch defines fixed charge coverage as recurring operating EBITDA less recurring capital expenditures, less straight line rent adjustments, divided by interest expense, capitalized interest, and preferred dividends. Leverage (measured as net debt to trailing twelve months recurring operating EBITDA) was 5.7x as of Sept. 30, 2012, compared with 6.7x and 5.4x at Dec. 31, 2011 and 2010, respectively. Highwoods has made ample progress in de-levering since executing debt- financed acquisitions in Pittsburgh and Atlanta in late 2011. Leverage is appropriate for the 'BBB-' rating and is expected to remain so during the forecast period. Highwoods uses a prudent combination of asset sales, common equity and unsecured debt to finance growth and repay debt maturities. Fitch views Highwoods' elevated adjusted funds from operations (AFFO) payout ratio as a credit concern given it has paid out more than 100% of AFFO in common dividends since 2010. Highwoods maintained the dividend level through the downturn while also electing to pay the common dividend entirely in cash, rather than utilize a combination of cash and stock. Additionally, difficult leasing conditions in HIW's markets have led to elevated recurring capital expenditures, which have pressured AFFO. This high payout limits Highwoods' ability to generate internal liquidity. In turn, it will result in Highwoods needing to draw on its credit facility or source other forms of liquidity to fund a portion of the common dividend. An AFFO payout ratio in excess of 100% is inconsistent with an investment- grade rating and could have negative rating implications. The Stable Outlook reflects Fitch's view that Highwoods' credit metrics will remain in an acceptable range for a 'BBB-' rating. The Outlook also takes into account Fitch's expectation that Highwoods will maintain adequate liquidity and appropriate coverage of unsecured debt by unencumbered assets. Pro-forma for the bond issuance, sources of liquidity (unrestricted cash, availability from Highwoods' unsecured revolving credit facility, projected retained cash flows from operating activities after dividends and distributions) divided by uses of liquidity (pro rata debt maturities and projected recurring capital expenditures) result in a liquidity coverage ratio of 1.6x for the period from October 1, 2012 through Dec. 31, 2014. If Highwoods refinanced 80% of its secured debt due in the period, its liquidity coverage would be a strong 3.0x. In addition, Highwoods has a well-laddered debt maturity schedule with no unsecured debt maturities until the revolver in 2015. However, this facility may be extended at Highwoods option to 2016. Highwoods has historically maintained strong coverage of unsecured debt by unencumbered assets. The implied value of unencumbered assets (calculated as unencumbered NOI divided by a stressed capitalization rate of 9%) covered unsecured debt by 2.1x as of June 30, 2012. Fitch deems this adequate for a 'BBB-' rating, though it has fallen since 2009 (when it was approximately 2.9x). The two-notch differential between Highwoods IDR and preferred stock rating is consistent with Fitch's criteria for corporate entities with an IDR of 'BBB-'. Based on Fitch research on 'Treatment and Notching of Hybrids in Nonfinancial Corporates and REIT Credit Analysis' dated Dec. 15, 2011, these securities are deeply subordinated and have loss absorption elements that would likely result in poor recoveries in a corporate default. Fitch does not anticipate positive rating momentum over the near term. That said, the following factors may result in positive momentum on the ratings or Rating Outlook: -- Fitch's expectation of fixed-charge coverage sustaining above 2.25x (fixed charge coverage was 2.1x for the 12 months ended Sept. 30, 2012); -- Fitch's expectation of leverage sustaining below 5.5x (leverage was 5.7x as of Sept. 30, 2012); -- Fitch's expectation of unencumbered asset coverage of unsecured debt sustaining above 2.5x (implied unencumbered asset value calculated as annualized unencumbered property NOI dividend by a 9.0% capitalization rate); -- Demonstrated consistent access to the unsecured bond markets; -- Maintaining a healthy liquidity surplus. Conversely, the following factors may precipitate negative momentum on Highwoods' ratings and/or Outlook: -- Fitch's expectation of fixed charge coverage declining below 1.75x; -- Fitch's expectation of leverage increasing above 6.75x; -- A sustained decline in unencumbered asset coverage of unsecured debt below 2.0x; -- An AFFO payout ratio exceeding 100%. HII HOLDING: Moody's Assigns B2 Corp Family Rating; Outlook Stable ------------------------------------------------------------------ Moody's Investors Service moved the ratings on HII Holding Corporation's proposed first lien senior secured credit facilities to B1 from Ba3 following an announced change in the structure of the transaction through which Gulf Oil Corp. Ltd. will acquire Houghton. Moody's also affirmed the company's B2 Corporate Family Rating ("CFR"), B2 Probability of Default Rating, and the Caa1 rating on the proposed second lien senior secured term loan. The rating outlook is stable. "The $50 million increase in the proposed first lien term loan increases leverage through the first lien level and prompted a one notch reduction in the ratings on the first lien senior secured credit facilities," said Moody's analyst Ben Nelson. The revised structure includes $585 million of first lien senior secured term loans (up from $535 million in the original structure) and $200 million in second lien senior secured term loans (down from $250 million). There is no change in the amount of total debt. Moody's continues to expect financial leverage will rise into the mid 6 times Debt/EBITDA and interest coverage will fall to the low 2 times EBITDA/Interest following the completion of the leveraged buyout transaction. The actions: Issuer: HII Holding Corporation Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2 $50 million First Lien Senior Secured Revolving Credit Facility due 2017, Adjusted to B1 (LGD3 34%) from Ba3 (LGD3 31%) $585 million First Lien Senior Secured Term Loan due 2019, Adjusted to B1 (LGD3 34%) from Ba3 (LGD3 31%) $200 million Second Lien Senior Secured Term Loan due 2020, Affirmed Caa1 (point estimates revised to LGD5 83% from 80%) Outlook, Stable The assigned ratings are subject to Moody's review of the final terms and conditions of the proposed transaction. Rating Rationale The B2 CFR is constrained primarily by weak credit measures for the rating category. The rating also considers Houghton's modest size, inconsistent free cash flow generation, and exposure to cyclical end markets such as automotive and steel. While restructuring activities, acquisitions, and the global macroeconomic environment have made it difficult to interpret Houghton's true earnings and cash flow potential, operating margins have improved steadily over the past few years as the company has streamlined its operations and increased its revenues. The ratings consider favorably the necessity of the company's products, long-term relationships with a broad customer base, meaningful switching costs in certain applications, operational and geographic diversity, and a track record of operating with significant financial leverage. The rating also incorporates the potential strategic benefits of ownership by Gulf Oil, but does not incorporate direct credit support from Gulf because Houghton will be operated as a standalone entity with non-recourse financing. The stable rating outlook assumes that Houghton will reduce financial leverage to well below 6 times over the next twelve-to- eighteen months. Moody's could downgrade the rating if Moody's expects leverage sustained above 6 times, interest coverage below 2 times, or free cash flow below 2% of debt. Moody's could upgrade the rating with expectations for leverage sustained below 4 times, free cash flow approaching 10% of debt, and a commitment to conservative financial policies. The principal methodology used in rating HII Holding Corporation's ("Houghton") was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Houghton International Inc. manufactures and markets metalworking fluid products and services. Gulf Oil Corp. Ltd., owned by investment firm Hinduja Group, agreed to acquire Houghton in a secondary buyout transaction from AEA Investors in November 2012. Gulf intends to operate Houghton as a standalone entity with non- recourse financing. Headquartered in Valley Forge, Pa., the company generated revenues of $858 million for the twelve months ended September 30, 2012. HORIZON LINES: To Adjust Puerto Rico Service Schedule ----------------------------------------------------- Horizon Lines, Inc., is adjusting its Puerto Rico service schedule to better align its deployed capacity with market demand and to improve cargo availability times in San Juan. Effective Jan. 10, 2013, the Company will offer weekly service between Jacksonville, Florida, and San Juan, Puerto Rico. The southbound service will depart Jacksonville on Thursday evenings and arrive in San Juan on Sundays. Cargo will be available at the opening of business on Monday mornings. The Company currently offers twice weekly service between Jacksonville and San Juan, departing Jacksonville on Tuesdays and Fridays. Additionally, Horizon Lines weekly San Juan service from the Northeast will depart Elizabeth, New Jersey on Thursday evenings, instead of Fridays, with cargo availability in San Juan on Mondays. Northbound departures from San Juan to Elizabeth will be on Sunday evenings with arrival on Thursday mornings. Northbound departures from San Juan to Jacksonville will be Monday evenings with arrival on Thursday mornings. Service schedules between Houston, Texas, and San Juan will remain unchanged. This service adjustment is expected to create cost efficiencies that will enable the Company to improve the Puerto Rico trade lane's financial performance and reinvest in the business over the long term. In association with the service change, the Company expects to record a fourth-quarter charge of approximately $3.6 million. "Puerto Rico's economy remains in a prolonged multi-year recession, during which time domestic container volumes to the island have contracted sharply," said Richard Rodriguez, vice president and general manager of Puerto Rico. "After a comprehensive review of our deployments in the market, we determined Horizon can more efficiently serve Puerto Rico through one weekly Jacksonville sailing, instead of two. Adequate capacity exists on our vessel that will depart on Thursdays to serve most customers who previously shipped on our Tuesday and Friday vessels. Customers have frequently requested Monday morning cargo availability and we are excited that our new schedule will provide Sunday arrivals into San Juan so that customers can pick up freight at the opening of business Monday mornings." Horizon Lines will continue to operate the largest vessels in the trade, serving Puerto Rico from the three most geographically diverse U.S. ports with the most extensive intermodal network across North America. "We intend to continue to offer timely and efficient Jacksonville service on a weekly basis," Mr. Rodriguez said. "However, making this service change is necessary to improve cost efficiencies and better position Horizon Lines to make the investments necessary to serve our Puerto Rico customers and maintain and grow our business over the long run." During the past 12 months, Horizon Lines has invested approximately $30 million in an extensive upgrade program to the three vessels that will continue to serve Puerto Rico. The Horizon Navigator and the Horizon Trader, which will continue to call on Jacksonville and the Northeast, are C8 Class container vessels with nominal capacity of 1,125 forty-foot equivalent units (FEUs). The smaller Horizon Producer, with nominal capacity of approximately 840 FEUs, will continue on its regular Houston schedule. The Horizon Discovery, with nominal capacity of approximately 690 FEUs, normally carried the Tuesday cargo from Jacksonville during 2012. It will be removed from active service and used as a relief vessel. The Company also plans to further reduce its non-union workforce beyond the reductions associated with the Puerto Rico service change and expects to incur approximately an additional $1.3 million of expenses for severance and other and employee related costs bringing the total restructuring change to $4.9 million. The Company's non-union workforce will be reduced by approximately 38 positions in total. The workforce reduction is expected to be completed by Jan. 31, 2013. About Horizon Lines Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. Horizon Lines reported a net loss of $229.41 million in 2011, a net loss of $57.97 million in 2010, and a net loss of $31.27 million in 2009. The Company's balance sheet at Sept. 23, 2012, showed $620.50 million in total assets, $617.47 million in total liabilities and $3.02 million in total stockholders' equity. Refinancing The Company was not in compliance with the maximum senior secured leverage ratio and the minimum interest coverage ratio under its Senior Credit Facility at the close of its third fiscal quarter ended Sept. 25, 2011. Non-compliance with these financial covenants constituted an event of default, which could have resulted in acceleration of the maturity. None of the indebtedness under the Senior Credit Facility or Notes was accelerated prior to the completion of a comprehensive refinancing on Oct. 5, 2011. The Senior Credit Facility and 99.3% of the 4.25% Convertible Senior Notes were repaid as part of the refinancing. In addition, as a result of the completion of the refinancing, the short-term obligations under the Senior Credit Facility, the Notes and the Bridge Loan have been classified as long-term debt. As a result of the efforts to refinance the Company's debt and the 2011 amendments to the Senior Credit Facility, the Company paid $17.3 million in financing costs and recorded a loss on modification of debt of $0.6 million during 2011. * * * In June 2012, Moody's Investors Service affirmed Horizon Lines, Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating ("PDR") at Caa2 and removed the LD ("Limited Default") designation from the rating in recognition of the conversion to equity of the $228 million of Series A and Series B Convertible Senior Secured notes due in October 2017 ("Notes"). Moody's said the affirmation of the Corporate Family and Probability of Default ratings considers that total debt has been reduced by the conversion of the Notes, but also recognizes the significant operating challenges that the company continues to face. HOWELL TOWNSHIP: Fitch Cuts Rating on Two LTGO Bonds to Low-B ------------------------------------------------------------- Fitch Ratings downgrades the following ratings for Howell Township, Michigan (the township): -- $2.85 million limited tax general obligation (LTGO) bonds series 2004 to 'B' from 'BB'; -- $300,000 special assessment bonds, series 2007 to 'B' from 'BB'; -- Implied unlimited tax general obligation (ULTGO) bonds to 'B+' from 'BB+'. The rating is removed from Rating Watch Negative and a Negative Rating Outlook is assigned. SECURITY The special assessment bonds are secured by special assessments associated with various special assessment districts. They are also secured, as are LTGO bonds, by the township's full faith and credit general obligation, subject to applicable constitutional, statutory, and charter limitations. Debt service on LTGO bonds has historically been paid from revenues from the waste water treatment plant that the bonds were issued to construct. KEY RATING DRIVERS DOWNGRADE CONSIDERATIONS: The downgrade reflects the failure of millage increases in August and November. Fitch believes the increases were essential to restoring enterprise funds to self- supporting operations and preventing further use of general fund reserves. OUTLOOK CONSIDERATIONS: The Negative Outlook reflects Fitch's expectation of continued fiscal pressure and the limitations of available options as the township attempts to remain solvent. MANAGEMENT PROJECTS 2015 RESERVE DEPLETION: Management projects that debt service payments for the special assessment bonds will deplete available water/sewer (w/s) fund reserves in May 2014 and general fund reserves in May 2015. GENERAL FUND LIQUIDITY ADEQUATE: The general fund made a loan to the w/s fund to pay debt service in 2011. The loan remains outstanding, and revenue raising opportunities are limited. Nonetheless, the general fund has maintained a consistent cash position due to expenditure reductions and careful cost containment practices. RATE INCREASES HAVE NOT RESTORED STABILITY: The township has raised utility rates and introduced a debt service fee for the w/s fund. However, these increases have been insufficient to allow the w/s fund to fully support LTGO bonds, as was intended. Repayment is therefore expected to become reliant on general fund support. TAXABLE VALUES DECLINING: Declines in taxable value (TV) of the township's limited tax base are a concern as property tax revenue is approximately 43% of general fund revenues. REVENUE RAISING OPTIONS LIMITED: The one-notch distinction between the implied ULTGO rating and the LTGO rating reflects the limited level of overall financial flexibility given that the township's revenue raising options are restricted. WHAT COULD TRIGGER A RATING ACTION: DEPLETION OF GF RESERVES: Failure to avert the depletion of general fund (GF) resources will further reduce the cushion available for debt service and likely cause a further downgrade. EXTERNAL INTERVENTION: State intervention, for example in the form of an emergency manager or a state loan, may help the township address its projected insolvency but could also create a path to bankruptcy. CREDIT PROFILE W/S OPERATIONS REMAIN UNSTABLE The township issued its special assessment bonds to provide financing for w/s infrastructure in anticipation of housing developments. These developments were canceled due to the 2007-08 recession. Subsequent significant shortfalls in special assessment revenues have pressured the township's finances, necessitating extensive revenue and expenditure adjustments. As an interim step, the general fund loaned the w/s fund $1.4 million to cover debt service and expenditures in fiscal 2011, approximately $900,000 of which is outstanding. There is no set repayment schedule, although the loan is included as a receivable on the general fund balance sheet In fiscal 2012, utility rates increased (the sewer rate doubled while the water rate increased 30%) and the township instated a debt service fee. While the increases generate additional revenue, with August and November w/s millage failures, the fund remains unable to repay the general fund loan and is dependent on further support. Management does not anticipate placing another millage before voters before November 2014. With 82% of voters voting against the measure in November, Fitch expects that there will be little support for additional millages. MANAGEMENT PROJECTS MAY 2015 DEPLETION OF RESERVES Management projects that w/s reserves will be exhausted after the May 2014 bond payment, causing the township to rely more heavily on general fund support. Current projections show, and Fitch cash flow projections concur, that general fund cash will be exhausted with the township's May 2015 bond payment without significant revenue infusions. TOWNSHIP OPTIONS LIMITED With the failure of recent w/s millages, Fitch believes the township's options have become increasingly limited. Fitch believes that outside management such as a state emergency financial manager may be key to averting a payment default in May 2015. Assuming the emergency financial manager law continues in a form similar to Act 72 of 1990, invoking emergency financial management would allow the township a path to declaring bankruptcy. The township is exploring the sale of various tax lien properties associated with canceled developments to fully offset bond payments the townships has fronted, recoup other fees and penalties, and provide special assessment payments for the life of the bonds. While such a sale could help considerably with the township's ability to repay special assessment debt, Fitch believes that this scenario is subject to considerable execution risk, and is not a factor in the township's current rating. DEBT SERVICE BURDEN DWARFS POSITIVE GF OPERATIONS The magnitude of the township's debt service shortfall dwarfs general fund operations: debt service in fiscal 2012 was $2.5 million or 315% of general fund expenditures. However, the township has maintained large general fund balances relative to its very small budget in the past five years and reports similar results in fiscal 2012. Ending unrestricted general fund balance was $2.8 million or 340% of expenditures, with an addition to fund balance of $354,000 (56% of expenditures). However, much of this fund balance is offset with receivables from the utility funds. If these loans were written off, the general fund balance would be reduced by $1.7 million. The township reported approximately $1 million in general fund cash at year end. This provides a small cushion for any unexpected revenue shortfalls or spending needs. However, drastic expenditure reductions in the general fund have left little room for further cuts and revenue-raising opportunities are limited. The township does not anticipate that the w/s fund will borrow from the general fund in fiscal 2013, and is instead planning to use remaining enterprise cash to make debt service payments. The township's fiscal 2013 budget does not include use of fund balance and otherwise continues limited operations. Management reports revenues and expenditures in all funds are outperforming budget for the first five months of the fiscal year. INCREASES IN GENERAL FUND REVENUE UNCERTAIN Taxable values (TV) in the township saw sharp declines in recent years with the largest decline of 12% occurring in fiscal 2011. TV for 2012 declined 1.5%, below the 5%-7% declines projected by the county assessor and well below the 15% decline budgeted for by the township. The township is already levying the maximum operating millage under the Headlee amendment, so management cannot offset TV declines with a rate adjustment to avoid a drop in property tax revenue. The township's tax base is very small, magnifying concerns about the potential volatility of property tax revenue. Declines in state funding fiscal 2009 and 2010 were reversed with a large increase in 2011. As the state economy begins to recover it is likely that the township will see small increases in constitutionally determined state shared revenue as well. The township is not eligible for the Economic Vitality Incentive Program portion of state aid and is therefore less vulnerable to state aid reductions. LIMITED LOCAL ECONOMY SHOW SIGNS OF IMPROVEMENT Howell Township is located between Lansing and Detroit where the majority of its residents commute to work, generally in the high- tech, higher education, and health care sectors. Township employment data is unavailable; unemployment in Livingston County was 7.6% in September 2012, below the state rate of 8.2% and on par with the national rate. The unemployment rate in the county has declined approximately 15% from the same month last year, with minimal labor force declines indicating the possible beginnings of a recovery. Expansions at Magna International (automotive supplier) and BD Electrical Inc. combined with the relocation of Michigan Automatic Turning Inc. (transmission shaft and gear manufacturer for off-highway equipment), formerly AA Gear, to the township will provide for additional job growth in the area. HIGH DEBT BURDEN, MANAGEABLE PENSION OBLIGATIONS The township's overall debt burden is high at $4,460 per capita and 9.8% of market value (including the special assessment bonds). Principal amortization is above average, with 70% of the total outstanding retired within 10 years. Pensions for township employees are provided through a township-run single employer defined contribution plan. The fiscal 2011 contribution was moderate at 7% of general fund expenditures. The township does not provide other post-employment benefits. IGLOO HOLDING: Moody's Rates $350MM Sr. Unsecured Notes 'Caa1' -------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Igloo Holding Corporation's proposed $350 million senior unsecured and unguaranteed notes due 2017, and raised Interactive Data Corporation's (IDCO) senior unsecured note rating to B3 from Caa1. Moody's is also transferring the B2 Corporate Family Rating (CFR), B2 Probability of Default Rating (PDR) and SGL-2 speculative-grade liquidity rating from IDCO to its parent, Igloo, since Igloo is now the top level debt issuer within the organization. Moody's updated the loss given default assessments to reflect the revised debt structure. The rating outlook is stable. The company plans to utilize the net proceeds from the proposed bond offering along with approximately $100 million of IDCO's cash to fund a $440 million distribution to equity and option holders including affiliates of Silver Lake Technology Management LLC and Warburg Pincus (the equity sponsors). The increase in debt is an aggressive credit negative move that raises the company's already high debt-to-EBITDA leverage to approximately 7.3x (LTM 9/30/12 incorporating Moody's standard adjustments and the proposed bond offering) and cash interest expense by approximately $30 million. Moody's is nevertheless maintaining the B2 CFR based on an expectation that Igloo will generate positive free cash flow and return leverage below 7x in 2014. Leverage is likely to remain high in 2013 as the company continues to fund investments in product development and technical infrastructure including the completion of its unified technology platform project. Moody's expects leverage to drop meaningfully in 2014 primarily due to low single digit revenue growth and cost savings and efficiencies generated from the company's various infrastructure investments. Assignments: Issuer: Igloo Holdings Corporation Corporate Family Rating, Assigned B2 Probability of Default Rating, Assigned B2 Speculative Grade Liquidity Rating, Assigned SGL-2 Senior Unsecured Regular Bond/Debenture, Assigned a Caa1, LGD6 - 93% Upgrades: Issuer: Interactive Data Corporation Senior Unsecured Regular Bond/Debenture, Upgraded to B3, LGD5 - 76% from Caa1, LGD5 - 86% LGD Updates: Issuer: Interactive Data Corporation Senior Secured Bank Credit Facility, Changed to LGD2 - 26% from LGD3 - 32% (no change to Ba3 rating) Withdrawals: Issuer: Interactive Data Corporation Corporate Family Rating, Withdrawn, previously rated B2 Probability of Default Rating, Withdrawn, previously rated B2 Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-2 Ratings Rationale Igloo's B2 CFR reflects its good market position in fixed income evaluated pricing and reference data services for financial institutions, tempered by high debt-to-EBITDA leverage, and event risks related to acquisitions, cash distributions or other leveraging actions by the equity sponsors. Igloo's broad coverage of and evaluated pricing capabilities for a variety of securities, global data collection infrastructure, good customer and geographic diversity and a high percentage of recurring revenue contribute to its market position and good cash flow generation. The importance of the company's pricing and reference data content and services to daily net asset value calculations for a wide range of money management firms as well as limited exposure to primary market new issuance activity dampens the magnitude of cyclical revenue volatility notwithstanding that earnings of its primary customers are cyclical. Leverage is high, but projected to decline to a mid 6x range in 2014. A good liquidity position provides the company flexibility to manage efforts by its customer base to streamline costs due to pressures from an uncertain economic environment and increasing regulatory burdens. Moody's is rating Igloo based on the company's disclosures in the offering memorandum including a representation that it has no material assets or liabilities other than as they relate to IDCO. In addition, Moody's expects to receive sufficient ongoing information relating to Igloo to monitor the company's financial position. Igloo's proposed notes are not guaranteed and are, therefore, structurally subordinated to IDCO's debt and liabilities. Payment of cash interest on the notes is subject to IDCO generating sufficient restricted payment (RP) capacity within its credit facility and unsecured notes to distribute funds to Igloo. Moody's expects enough RP capacity to fund cash interest, although Igloo has the option to pay interest in kind if IDCO's RP capacity is not sufficient to fund cash interest. The proposed 2017 maturity is also prior to the maturity of IDCO's credit facility (February 2018) and senior unsecured notes (August 2018) As a result, IDCO would need to have enough RP capacity within its debt agreements to fund the maturity of Igloo's notes. Such RP capacity may not be sufficient to fund the maturity depending on the level of future earnings, acquisitions and equity holder distributions. However, Moody's believes the most likely outcome is a refinancing of the entire capital structure, potentially in conjunction with a sale of the company. A default on Igloo's notes at maturity would not trigger a default under IDCO's debt agreements. Consistent with Moody's Loss Given Default Methodology, the upgrade of IDCO's senior unsecured notes reflects the new debt cushion provided by Igloo's notes. Igloo's structurally subordinated notes would absorb the first loss in the event of a default. The SGL-2 speculative-grade liquidity rating reflects the company's good liquidity position supported by its cash (approximately $165 million as of 9/30/12 incorporating the proposed offering), marketable securities ($23.6 million held in foreign subsidiaries as of 9/30/12) and Moody's projection for approximately $60-70 million of free cash flow over the next 12 months. The undrawn $160 million revolver matures in July 2015 and provides additional liquidity support. There is no required term loan amortization over the next year as the March 2012 excess cash flow sweep pay down payment was applied to prepay amortization through March 2014. The proposed notes are not included in the leverage or interest coverage covenants in IDCO's credit agreement (although the $100 million cash distribution will reduce the cushion in the leverage covenant, which is based on debt net of cash), and Moody's projects IDCO will maintain an EBITDA cushion in excess of 25% within the financial maintenance covenants over the next year. The stable rating outlook reflects Moody's expectation that IDCO will maintain a good liquidity position, generate modest revenue growth, and maintain positive free cash flow. Moody's anticipates Igloo will utilize free cash flow for modest debt reduction (via the excess cash flow sweep and required term loan amortization), reinvestment through organic development and modestly sized acquisitions and to create capacity for distributions to equity sponsors over time. Moody's expect Igloo's debt-to-EBITDA will decline to a mid 6x range in 2014 and that it will refrain from large debt financed acquisitions and shareholder distributions for the next 18-24 months. Downward rating pressure could occur if Igloo is unable to reduce and maintain debt-to-EBITDA below 7x or if further debt financed acquisitions and shareholder distributions occur. A decline in earnings resulting from reduced client spending, client losses, or a prolonged economic downturn could pressure the rating. IDCO's ratings could also be downgraded if liquidity deteriorates. IDCO could be positioned for an upgrade if it maintains a good liquidity position, generates consistent revenue growth and solid free cash flow, and demonstrates the willingness and ability to sustain debt-to-EBITDA leverage comfortably below 6.0x and free cash flow-to-debt above 5%. IDCO's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (iii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside IDCO's core industry and believes IDCO's ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Igloo, headquartered in Bedford, Massachusetts, is a provider of financial market data, analytics and related solutions to financial institutions and active traders, as well as software and service providers. Affiliates of Silver Lake Technology Management L.L.C. and Warburg Pincus LLC (the equity sponsors) acquired IDCO on July 29, 2010 for a purchase price of approximately $3.7 billion (including transaction fees and expenses). Revenue for the LTM ended September 2012 was approximately $880 million. IGLOO HOLDINGS: S&P Lowers Corporate Credit Rating to 'B' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Bedford, Mass.-based Interactive Data Corp. to 'B' from 'B+'. The outlook is stable. "At the same time, we are assigning the ultimate holding company Igloo Holdings Corp. a 'B' corporate credit rating. The outlook is stable," S&P said. "We are also assigning the proposed senior unsecured notes a 'CCC+' issue-level rating, with a recovery rating of '6', indicating our expectation for negligible (0 to 10%) recovery for senior unsecured noteholders in the event of a payment default," S&P said. "We are also lowering our issue-level ratings on the company's bank debt to 'B+' from 'BB-' and its senior unsecured notes to 'B- ' from 'B'. The recovery ratings on the company's existing debt remain unchanged," S&P said. "The corporate credit rating reflects our expectation that Igloo's consolidated debt leverage will remain high, in the low- to mid-7x area over the next year," said Standard & Poor's credit analyst Jeanne Shoesmith. "We regard Igloo as having a 'satisfactory' business risk profile (based on our criteria), characterized by its leading position in securities pricing data and analytics, benefiting from somewhat high barriers to entry and a diversified client base. We assess the company's financial risk profile as 'highly leveraged' based on the company's mid-7x leverage. We score Igloo's management and governance as "fair." Despite our expectation that management and the board of directors will be focused on returning value to its private equity stakeholders, we are not aware of any material deficiencies in the company's internal controls or risk management." INTERNAL FIXATION: Files for Chapter 7 Protection ------------------------------------------------- Internal Fixation Systems Inc. filed for Chapter 7 liquidation (Bankr. S.D. Fla. Case No. 12-39145) on Dec. 5, 2012. The Company estimated less than $50,000 in assets and liabilities of less than $1 million. A meeting of creditors is scheduled for Jan. 11, 2013 at 2:30 p.m., at 51 SW First Ave., Room 102, in Miami. Proofs of claim are due by April 11, 2013. The Company is represented by: Peter D. Russin, Esq. MELAND RUSSIN & BUDWICK 200 S Biscayne Blvd. #3200 Miami, FL 33131 Tel: (305) 358-6363 Fax: (305) 358-1221 E-mail: prussin@melandrussin.com About Internal Fixation South Miami, Fla.-based Internal Fixation Systems, Inc., is a manufacturer and marketer of generically priced orthopedic and podiatric implants. Customers include ambulatory surgery centers, hospitals and orthopedic surgeons. IFS's strategy is to focus on commonly used implants that no longer have patent protection. The Company enhances the implants and sells them at prices below the market leaders. The Company reported a net loss of $3.45 million in 2011, compared with a net loss of $781,440 in 2010. After auditing the Company's financial results for 2011, Goldstein Schechter Koch P.A., in Hollywood, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company had a net loss in 2011 and 2010. Additionally, the Company has an accumulated deficit of approximately $4.21 million and a working capital deficit of approximately $683,500 at Dec. 31, 2011, and is unable to generate sufficient cash flow to fund current operations. The Company's balance sheet at June 30, 2012, showed $1.73 million in total assets, $1.93 million in total liabilities and a $206,095 total stockholders' deficit. INTERNATIONAL TEXTILE: Appoints WL Ross Principal to Board ---------------------------------------------------------- The board of directors of International Textile Group, Inc., fixed the size of the Board at 10 members, and appointed Harvey L. Tepner as a director. Mr. Tepner has been a Principal of WL Ross & Co. LLC since 2008. Mr. Tepner also serves as a director of Core-Mark Holdings, Inc. Mr. Tepner's compensation for service as a director will be consistent with that of the Company's other directors who are affiliated with either the Company, WL Ross & Co. LLC or Wilbur L. Ross, Jr., the chairman of the Board. There are no arrangements or understandings between Mr. Tepner and any other person pursuant to which he was selected as a director, and there are no transactions involving Mr. Tepner that would be required to be reported under Item 404(a) of Regulation S-K. About International Textile International Textile Group, Inc., is a global, diversified textile manufacturer headquartered in Greensboro, North Carolina, with current operations principally in the United States, China, Mexico, and Vietnam. ITG's long-term focus includes the realization of the benefits of its global expansion, including reaching full production at ITG facilities in China and Vietnam, and continuing to seek other strategic growth opportunities. The Company's balance sheet at Sept. 30, 2012, showed $367.41 million in total assets, $469.69 million in total liabilities and a $102.28 million total stockholders' deficit. International Textile incurred a net loss of $69.43 million in 2011, compared with a net loss of $46.30 million in 2010. IRVINE SENSORS: Extends Maturity of 2012 Notes to March 2013 ------------------------------------------------------------ Effective on or about Sept. 28, 2012, ISC8 Inc., formerly known as Irvine Sensors Corporation, issued and sold to certain accredited investors, including The Griffin Fund LP (a major stockholder and debt holder of the Company), Senior Subordinated Secured Convertible Promissory Notes in the aggregate principal amount of $1,500,000 as part of an issue of an aggregate principal amount of up to $10,000,000 of Senior Subordinated Secured Convertible Promissory Notes due Nov. 30, 2012, that the Company may issue to Griffin or its affiliates and certain other accredited investors. Effective as of Nov. 30, 2012, the Company and the holder representative for the 2012 Notes entered into an Amended Form of Note to extend the maturity date of the 2012 Notes from Nov. 30, 2012, to March 31, 2013. All other terms, provisions, conditions, covenants, and agreements contained in the 2012 Notes remain in unchanged and in full force and effect. CFO Resigns On Dec. 4, 2012, Dan A. Regalado tendered to the Chief Executive Officer and Board of Directors of the Company his resignation as the Company's Chief Financial Officer and Treasurer, effective immediately, citing personal and health reasons. Also on Dec. 4, 2012, in connection with Mr. Regalado's resignation and not as a result of any disagreement with the Company, Edward J. Scollins resigned as a member of the Company's Board of Directors and its Audit and Nominating and Corporate Governance Committees, and the Company named Mr. Scollins as the Company's Interim Chief Financial Officer and Treasurer. Mr. Scollins served as a member of the Board and Audit and Nominating and Corporate Governance Committees of the Company since December 2010. Mr. Scollins will serve at the pleasure of the Board until a successor Chief Financial Officer is appointed. Mr. Scollins will perform his duties on a contract basis and be compensated at the rate of $7,500 per month. Mr. Scollins brings to his new role the same wealth of knowledge, experience and qualifications that well qualified him to serve on the Company's Board and Audit and Nominating and Corporate Governance Committees. There are no family relationships between Mr. Scollins and any director or executive officer of the Company. Mr. Scollins is the Chief Financial Officer of Roark Rearden and Hamot Capital Management, the investment adviser to Costa Brava Partnership III LP, a major stockholder and debt holder of the Company. About Irvine Sensors Headquartered in Costa Mesa, Calif., Irvine Sensors Corporation (OTC BB: IRSN) -- http://www.irvine-sensors.com/-- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating said products. Irvine Sensors also conducts research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. The Company reported a net loss of $15.76 million on $14.09 million of total revenues for the fiscal year ended Oct. 2, 2011, compared with a net loss of $11.15 million on $11.71 million of total revenues for the fiscal year ended Oct. 3, 2010. The Company's balance sheet at July 1, 2012, showed $8.87 million in total assets, $36.99 million in total liabilities, and a $28.12 million total stockholders' deficit. JET WORKS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Jet Works Air Center Management LLC dba Jet Works Air Center dba Jet Works Aviation 5035 Warbird Drive Denton, TX 76207 Bankruptcy Case No.: 12-46776 Chapter 11 Petition Date: December 12, 2012 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: Bill F. Payne, Esq. THE MOORE LAW FIRM, LLP 100 N. Main Street Paris, TX 75460 Tel: (903) 784-4393 Fax: (903) 737-0586 E-mail: bpayne@moorefirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A copy of the Company's list of its 20 unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txnb12-46776.pdf The petition was signed by Jimmy C. Weaver, president. KODIAK OIL: Moody's Raises Corp. Family Rating to 'B2' ------------------------------------------------------ Moody's Investors Service upgraded Kodiak Oil & Gas Corp.'s Corporate Family Rating (CFR) to B2 from B3 and upgraded its senior unsecured notes rating to B3. The outlook is stable. "The upgrade reflects Kodiak's delivery of substantial 2012 production growth, which is expected to continue into 2013," commented Andrew Brooks, Moody's Vice President. "With oil comprising over 80% of production, Kodiak is well placed to convert high oil prices into high cash margins, and the company's acreage in the Bakken provides Kodiak with substantial drilling potential to support continued profitable growth." Ratings upgraded: Corporate Family Rating, upgraded to B2 from B3 Probability of Default Rating, upgraded to B2 from B3 Senior Unsecured Notes Rating, upgraded to B3 (LGD4 66%) from Caa1 Ratings Rationale Kodiak's B2 CFR reflects its emergence as a rapidly growing mid- sized oil producer in the prolific Bakken Shale, its high quality asset base extensively weighted to crude oil and the generous cash margins that its oil production enjoys. Well completion setbacks experienced earlier in 2012, likely partially attributable to the company's rapid ramp up in growth, appear to have been successfully remediated. The rating is restrained by Kodiak's high debt leverage, which at September 30 exceeded $80,000 per Boe of average daily production, although based on third quarter production volumes alone, leverage approximated $59,000 per Boe. While Kodiak continues to significantly outspend internally generated cash during this growth phase, relative leverage measures are likely to improve as crude oil production climbs. Kodiak produced for sale 15,855 Boe per day of hydrocarbons in 2012's third quarter (another 1,610 Boe per day of natural gas was flared, reflecting lagging basin-wide gas infrastructure), quadrupling year-ago averages. Over 88% of its salable production was crude oil. Late November sales volumes approximated 22,000 Boe per day, and the company projects a fourth quarter exit rate of 27,000 Boe per day; a target it established in late 2011 and continues to adhere to. Kodiak's mid-year proved reserves of 70.1 million Boe (86% oil, 40% proved developed) reflect a 76% increase over year-end 2011 levels. Its 60% Proved Undeveloped Reserves (PUDs) provide substantial drilling upside, and with Bakken costs moderating and infrastructure bottlenecks subsiding Moody's expects a continuation of strong cash margins and a leveraged full-cycle ratio exceeding 2x to be reflected in ongoing production gains. Kodiak has identified roughly 800 drilling locations and intends to run a six drilling rig program in 2013. Moody's expects Kodiak to have adequate liquidity through 2013, as reflected by its SGL-3 Speculative Grade Liquidity rating. At September 30, 2012, Kodiak had $260 million available under its $375 million secured borrowing base revolving credit facility, which matures October 2016. Kodiak's funds from operations and revolver availability should adequately cover its capital spending requirements through 2013, which Moody's estimates will be about flat with 2012's expected $750 million. The revolver requires Kodiak to maintain debt to EBITDAX of no more than 4.25x, which at September 30 was 3.26x. Additional liquidity could become available to Kodiak should the $375 million commitment under its secured revolving credit increase to the full amount of its $450 million borrowing base. The stable outlook reflects Moody's view that Kodiak's production will grow to a sustainable level approaching 30 mBoe per day in 2013 with negative free cash flow diminishing over the course of the year. An upgrade could be considered if Kodiak reduces financial leverage below $40,000 per Boe of average daily production while attaining sustained production in excess of 35 mBoe per day and maintaining a leveraged full-cycle ratio above 2.25x. A downgrade could be considered if Kodiak re-encounters well completion issues that result in stagnating production, should improvements in relative debt leverage be reversed or if it's leveraged full-cycle ratio drops below 1.5x. The B3 rating on Kodiak's senior unsecured notes reflects both the overall probability of default of Kodiak, to which Moody's assigns a PDR of B2, and a loss given default of LGD4 (66%). Kodiak's senior unsecured notes are subordinate to its $375 million secured revolving credit facility's potential priority claim to the company's assets. The size of the potential senior secured claims relative to Kodiak's outstanding senior unsecured notes results in the notes being rated one notch below the B2 CFR under Moody's Loss Given Default methodology. The principal methodologies used in rating Kodiak were the Independent Exploration and Production Industry methodology published in December 2011, and the Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA, published in June 2009. Kodiak Oil & Gas is an independent exploration and production company headquartered in Denver, Colorado. LA JOLLA: FDA Approves New Drug Application for for GCS-100 ----------------------------------------------------------- La Jolla Pharmaceutical Company announced that the FDA Division of Cardiovascular and Renal Products has approved the Company's Investigational New Drug Application for GCS-100. La Jolla will start a Phase 1/2 clinical trial of GCS-100 in patients with chronic kidney disease. "FDA approval of our IND allowing us to proceed with our clinical trial in patients with CKD is a major milestone for La Jolla," said George Tidmarsh, M.D. Ph.D., chief executive officer of La Jolla. "Chronic kidney disease patients suffer an inexorable decline with very limited treatment options. Our desire is to one day help these long-suffering individuals." Chronic kidney disease currently affects 14% of Americans or 49 million people in the U.S. The United States Renal Data System, 2012 Annual Data Report, states that in 2010, costs for CKD reached $41 billion for Medicare alone. Overall per person per year costs for CKD were estimated at $22,323 for Medicare patients of age 65 and older and $13,395 for patients of age 50-64. Patients with CKD may progress to End-stage Renal Disease (ESRD). According to The National Institute of Diabetes and Digestive and Kidney Diseases as of 2008, there were 547,982 individuals in the US under treatment for and 88,630 deaths per year from ESRD. The study will be an open-label, multi-center, test of weekly doses of GCS-100 in patients with Stage 3b and 4 CKD. The primary objectives of the study include evaluations of the safety of a single dose of GCS-100 (Part A) and repeat doses of GCS-100 (Part B). Secondary study objectives will include evaluating renal function and other markers of activity in CKD. The study will be open to patients at least 18 years of age with moderately severe to severe renal impairment. The Company anticipates screening of patients will start this month and the first patient will enter the study in January of next year. The trial will be conducted at centers in the US and include some of the top investigators in the field of CKD. While it is not currently anticipated, the study design may be amended from time-to-time to comply with requests from the FDA, the governing Institutional Review Board, study investigators or at the discretion of the Company. "We believe the clinical trial is well designed and we have engaged some of the best investigators in the world," Tidmarsh added. "The successful filing and approval of the IND underscore the dedication and competency of the La Jolla team, and I am proud of their hard work. We look forward to analyzing data from the study which we expect to have by late next year." About GCS-100 GCS-100 is a complex polysaccharide that has the ability to bind to and block the effects of galectin-3. Galectin-3 is a soluble protein, over-expression of which has been implicated in a number of human diseases including cancer and chronic organ failure. The unique ability of GCS-100 to bind and sequester galectin-3 makes it an ideal candidate to prevent and treat diseases in which galectin-3 plays an important role. About La Jolla Pharmaceutical San Diego, Calif.-based La Jolla Pharmaceutical Company (OTC BB: LJPC) -- http://www.ljpc.com/-- is a biopharmaceutical company that has historically focused on the development and testing of Riquent as a treatment for Lupus nephritis. La Jolla reported a net loss of $11.54 million in 2011, compared with a net loss of $3.76 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $3.40 million in total assets, $12.93 million in total liabilities, all current, $5.80 million in Series C-1 redeemable convertible preferred stock, and a $15.33 million total stockholders' deficit. After auditing the 2011 results, BDO USA, LLP, in San Diego, 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 losses from operations, has an accumulated deficit of $439.6 million and a stockholders' deficit of $15.6 million as of Dec. 31, 2011, and has no current source of revenues. LCI HOLDING: Meeting to Form Creditors' Committee on Dec. 20 ------------------------------------------------------------ Roberta A. DeAngelis, the United States Trustee for Region 3, will hold an organizational meeting on Dec. 20, 2012, at 11:00 a.m. in the bankruptcy cases of LCI Holding Company Inc. The meeting will be held at: J Caleb Boggs Federal Building 844 King Street, Room 5209 Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About LifeCare LCI Holding Inc. and its affiliates, doing business as LifeCare Hospitals, operate eight "hospital within hospital" facilities and 19 freestanding facilities in 10 states. The hospitals have about 1,400 beds at facilities in Louisiana, Texas, Pennsylvania, Ohio and Nevada. LifeCare is controlled by Carlyle Group, which holds 93.4 percent of the stock following a $570 million acquisition in August 2005. LifeCare Holdings and its affiliates, including LifeCare Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13319) on Dec. 11, 2012, with plans to sell assets to secured lenders. Ken Ziman, Esq., and Felicia Perlman, Esq., at Skadden, Arps, Slate Meagher & Flom LLP, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. The steering committee of lenders is represented by attorneys at Akin Gump Strauss Hauer & Feld LLP and Blank Rome LLP. The agent under the prepetition and postpetition secured credit facility is represented by Simpson Thacher & Barlett LLP. The Debtors disclosed assets of $422 million and liabilities totaling $575.9 million as of Sept. 30, 2012. As of the bankruptcy filing, total long-term obligations were $482.2 million consisting of, among other things, institutional loans and unsecured subordinated loans. A total of $353.4 million is owing under the prepetition secured credit facility. A total of $128.4 million is owing on senior subordinated notes. LEVI STRAUSS: Board Declares $25 Million Cash Dividend ------------------------------------------------------ Levi Strauss & Co.'s Board of Directors declared a one-time cash dividend of $0.670625 per share, for a total of approximately $25 million. The dividend is payable to stockholders of record at the close of business on Dec. 17, 2012. The declaration of cash dividends in the future is subject to determination by the Company's Board of Directors based on a number of factors, including the income tax impact to the dividend recipients, the Company's financial condition and compliance with the terms of its debt agreements. For these reasons, as well as others, there can be no assurance that the Company's Board of Directors will declare additional cash dividends in the future. About Levi Strauss & Co. Headquartered in San Francisco, California, Levi Strauss & Co. -- http://www.levistrauss.com/-- is one of the world's leading branded apparel companies. The Company designs and markets jeans, casual and dress pants, tops, jackets and related accessories, for men, women and children under the Levi's(R), Dockers(R) and Signature by Levi Strauss & Co.(TM). The Company markets its products in three geographic regions: Americas, Europe, and Asia Pacific. The Company's balance sheet at Aug. 26, 2012, showed $3 billion in total assets, $3.08 billion in total liabilities, $7.99 million in temporary equity, and an $82.08 million total stockholders' deficit. * * * In April 2012, Standard & Poor's Ratings Services assigned its 'B+' rating (same as the corporate credit rating) to San Francisco-based Levi Strauss & Co.'s proposed $350 million senior unsecured notes due 2022. "The ratings on Levi Strauss reflect our view that the company's financial profile continues to be 'aggressive,' particularly since the company's balance sheet remains highly leveraged and we expect cash flow protections measures to continue to be weak. In addition, we continue to consider Levi Strauss' business risk profile to be 'weak,' given its continuing participation in the highly competitive denim and casual pants market, which is subject to fashion risk and still-weak consumer spending, and our expectation that the company's business focus will remain narrow. We believe the company benefits from its strong, well-recognized Levi's brand, long operating history, and distribution channel diversity (both by retail customer and geography)," S&P said. In April 2012, Moody's Investors Service affirmed Levi Strauss & Co ("LS&Co) B1 Corporate Family and Probability of Default Ratings. Moody's also assigned a B2 rating to the company's proposed $350 million senior unsecured notes due 2022 and affirmed the B2 ratings of the company's other series of unsecured debt. Levi Strauss' B1 Corporate Family Rating reflects the company's negative trends in operating margins reflecting inconsistent execution as well as input cost pressures. The ratings also reflect the company's still significant debt burden, which has been increasing due to the company's continued investment in its own retail stores and its sizable underfunded pension. Debt/EBITDA (incorporating Moody's standard analytical adjustments) was 5.1 times for the LTM period ending 2/26/2012. The rating take into consideration the company's significant global scale, with revenues near $5 billion, its operations in over 110 countries and the ownership of the iconic Levi's trademark. LIFECARE HOLDINGS: Inks Severance Agreement With Grant Asay ----------------------------------------------------------- LifeCare Holdings, Inc., through its subsidiary, LifeCare Management Services, LLC, entered into a Severance Agreement and Release of All Claims with Grant Asay, executive vice president of Operations of the Company, in connection with his previously reported resignation. Mr. Asay's resignation will become effective on Jan. 31, 2013. Pursuant to the terms of the Agreement, all financial obligations will be satisfied with Mr. Asay's receipt of a lump sum severance payment of $50,000, less any applicable payroll and tax withholdings. The severance payment is in addition to Mr. Asay's final wages through his final date of employment. The Agreement also modifies certain provisions in Mr. Asay's existing amended and restated employment agreement related to non-competition and non-solicitation following the termination of Mr. Asay's employment with the Company. Under the Agreement, Mr. Asay has agreed to release the Company from any and all claims, actions and causes of action that Mr. Asay has or might have related to the conclusion of his employment with the Company, including causes of action related to certain provisions of the Employment Agreement. About LifeCare Holdings Based in Plano, Texas, LifeCare Holdings, Inc. -- http://www.lifecare-hospitals.com/-- currently operates 27 long term acute care hospitals located in ten states. Long-term acute care hospitals specialize in the treatment of medically complex patients who typically require extended hospitalization. LifeCare Holdings Inc. filed for bankruptcy protection (Bankr. D. Del. Case No. 12-13319) in Wilmington on Dec. 11, 2012, citing debt and losses from Hurricane Katrina and saying it plans to sell the company, according to a Bloomberg report. The Company reported a net loss of $34.83 million in 2011, compared with net income of $2.63 million on $358.25 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $422.15 million in total assets, $575.87 million in total liabilities and $153.72 million total stockholders' deficit. * * * In November 2010, Standard & Poor's Ratings lowered its corporate credit rating on LifeCare Holdings to 'CCC-' from 'CCC+'. "The downgrade reflects the imminent difficulty the company may have in meeting its bank covenant requirements and the risk of it successfully refinancing significant debt maturing in 2011 and 2012," said Standard & Poor's credit analyst David Peknay. The likelihood of a debt covenant violation is heightened by the company's lack of appreciable operating improvement coupled with a large upcoming tightening of is debt covenant in the first quarter of 2011. Additional equity by the company's financial sponsor may be necessary to avoid a covenant violation. Accordingly, S&P believes the chances of bankruptcy have increased. As reported by the TCR on Aug. 23, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on Plano Texas-based LifeCare Holdings Inc to 'D' from 'CCC-', following the missed interest payment on the company's $119.3 million senior subordinated notes. In the Dec. 13, 2012, edition of the TCR, Moody's Investors Service lowered LifeCare Holdings, Inc.'s corporate family rating to Ca from Caa3 and the probability of default rating to D from Ca/LD. The ratings were downgraded because LifeCare filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. LPATH INC: Agrees to Discontinue PEDigree Trial ----------------------------------------------- Lpath, Inc., on Dec. 16, 2010, entered into an Option, License and Development Agreement with Pfizer Inc., which provides Pfizer with an exclusive option for a worldwide license to develop and commercialize iSONEP, the Company's lead monoclonal antibody product candidate, which is being evaluated for the treatment of wet age-related macular degeneration (wet AMD) and other ocular disorders. Under the original terms of the Agreement, Pfizer and the Company planned to conduct two studies, including a Phase 1b study in wet AMD patients with Pigment Epithelial Detachment (PED), a complication of wet AMD, and a larger Phase 2a study in wet AMD patients generally. The Company began enrolling patients in the PEDigree and Nexus trials in September 2011 and October 2011, respectively. The PEDigree and Nexus trials were placed on clinical hold in January 2012 following a determination by the FDA that the fill- and-finish contractor that had filled the iSONEP clinical trial vials was not in compliance with the FDA's current Good Manufacturing Practice standards during the time period it provided those services to the Company. Thereafter, the Company manufactured new iSONEP drug substance and resumed dosing patients in the Nexus trial in September 2012. As a result of the clinical hold and the requirement to manufacture new drug substance, the projected costs to complete the iSONEP trials increased significantly. As previously announced, Pfizer requested the Company to consider potential alternatives to reduce the overall cost of the iSONEP trials. On Dec. 5, 2012, the Company and Pfizer amended the Agreement to, among other things, reflect the parties' agreement to discontinue the PEDigree trial and to focus on the Nexus trial. The parties modified the protocol for the Nexus trial to include certain wet AMD patients with PED in the Nexus trial. In addition, the Company can elect to conduct the PEDigree trial at any time at its cost. Under the terms of the Amendment, the parties will continue to pursue and share the cost of the iSONEP trials, including any costs associated with discontinuing the PEDigree trial. As of Sept. 30, 2012, Pfizer had paid the Company $20 million pursuant to the terms of the Agreement, including an upfront payment of $14 million. The Amendment does not modify the Company's obligation to fund the next $6 million of Nexus trial costs. About Lpath, Inc. San Diego, Calif.-based Lpath, Inc. is a biotechnology company focused on the discovery and development of lipidomic-based therapeutics, an emerging field of medical science whereby bioactive lipids are targeted to treat human diseases. The Company reported a net loss of $3.11 million in 2011, compared with a net loss of $4.60 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $18.77 million in total assets, $12.98 million in total liabilities, and $5.79 million in total stockholders' equity. LUXEYARD INC: Former CEO Resigns from Board of Directors -------------------------------------------------------- Luxeyard, Inc.'s former Chief Executive Officer, Braden Richter tendered his resignation as the Company's director, retroactively effective to Oct. 23, 2012. The Board of Directors of the Company approved the resignation on Nov. 30, 2012. Based on Mr. Richter's resignation letter, the Company believes that Mr. Richter resigned as a director of the Company because Mr. Richter felt he was wrongfully terminated by the Board from his position as the Company's CEO. Los Angeles, California-based Luxeyard, Inc., a Delaware Corporation, is an internet company selling luxury goods on a flash web site. Luxeyard, Inc., is the parent company of the wholly owned subsidiaries, LY Retail, LLC, incorporated under the laws of the State of Texas on April 20, 2011, and LY Retail, LLC, incorporated in the State of California on Nov. 8, 2011. The Company's balance sheet at Sept. 30, 2012, showed $1.5 million in total assets, $5.8 million in total liabilities, and a stockholders' deficit of $4.3 million. "As of Sept. 30, 2012, we have generated minimal revenues since inception. We expect to finance our operations primarily through our existing cash, our operations and any future financing. However, there exists substantial doubt about our ability to continue as a going concern because we will be required to obtain additional capital in the future to continue our operations and there is no assurance that we will be able to obtain such capital, through equity or debt financing, or any combination thereof, or on satisfactory terms or at all. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet our capital needs. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, our operations would be materially negatively impacted. Therefore, there is substantial doubt as to our ability to continue as a going concern." MAGNUM HUNTER: Moody's Rates $150MM Senior Unsecured Notes 'Caa1' ----------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Magnum Hunter Resources Corporation's (MHR) proposed $150 million senior unsecured notes. This issuance is an add-on to the 9.75% $450 million 2020 notes that were issued in May, 2012. MHR's other ratings and stable outlook were unchanged. Net proceeds from the note offering will be used to reduce indebtedness under the revolving credit facility. "The transaction will free up MHR's revolver capacity and allow more time to boost production and find an alternative source of funding for its significant capital program in 2013," said Sajjad Alam, Moody's Analyst. Issuer: Magnum Hunter Resources Corporation Assignments: US$150M Senior Unsecured Regular Bond/Debenture, Assigned Caa1 US$150M Senior Unsecured Regular Bond/Debenture, Assigned a range of LGD5, 70 % Ratings Rationale The senior unsecured notes are rated Caa1, one notch below the B3 CFR, given the significant size of MHR's secured revolving borrowing base credit facility and its priority ranking in the liability waterfall. MHR's B3 Corporate Family Rating (CFR) reflects its small scale E&P operations; high leverage relative to current production and reserves levels; short drilling and production history of its core properties, and the execution and financing risks surrounding the company's planned transformation into a sizeable unconventional oil and gas producer over the next two years. The rating is supported by MHR's significant and growing oil production, repeatable unconventional properties that have predictable geology and contain a large inventory of drilling locations, and its diversified presence in several prolific liquids-rich hydrocarbon basins in North America. The rating also considers MHR's experienced management team, above-market natural gas price hedges through 2013, and the value in the company's midstream assets. The company's production and cash flows have been lackluster since Moody's initial rating assignment in May 2012. While the proportion of liquids (oil plus natural gas liquids) in the production mix has grown alongside proved reserves since the end of 2011, overall volume growth has been limited because of weak natural gas prices and the lack of rich-gas processing capacity at the Marcellus. Meanwhile MHR's continued high spending has pushed leverage higher in terms of production and proved developed reserves. However, the recent completion of MarkWest's Mobley processing plant in West Virginia should immediately lift MHR's production by up to 3,000 boe/day over the next three months and boost margins. Additional drilling in the Marcellus and Utica acreages and an accelerated development strategy in the oily Williston Basin, together, is expected to provide further production and cash flow growth in 2013. MHR should have adequate liquidity through the end of 2013, which is captured in Moody's SGL-3 Speculative Grade Liquidity rating. However, the company would need to execute a more focused drilling program if it were to improve internal cash flow generation. Concurrent with this note issue, MHR's revolver borrowing base was cut to $337.5 million from $375 million. Moody's estimates roughly $200 million was outstanding under the revolver at the end of November. Proforma for the add-on issue, MHR would have roughly $280 million of availability under the bank facility to fund its projected negative free cash flows in 2013. However, full access to the revolver will depend on MHR's ongoing ability to meet the leverage covenant (maximum re-set at 4.75x ) by improving EBITDA performance. The stable outlook assumes MHR' production will rise quickly and leverage will trend downward. MHR's current level of leverage is considered very high and there is minimal debt capacity in the ratings. The CFR could be downgraded if MHR acquires additional non-producing properties using debt or debt-like preferred equity, or total liquidity (cash plus revolver availability) falls below $75 million. A downgrade could also occur if the anticipated production and reserves growth do not materialize in the first half of 2013 and large cash outspending continues. An increasing trend in production and clearer visibility on funding arrangements beyond 2013 will be pre-requisites for an upgrade. An upgrade may be considered if production can be sustained above 25,000 boe/day and debt to average daily production is reduced below $40,000 per boe. The principal methodology used in rating Linc was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Magnum Hunter Resources Corporation (MHR) is a Houston, Texas based publicly traded oil and gas exploration and production (E&P) company with principal assets in the states of West Virginia, Kentucky, Ohio, Texas, North Dakota and Saskatchewan, Canada. MAGNUM HUNTER: S&P Revises Outlook on 'B-' CCR to Stable -------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Houston- based Magnum Hunter Resources Corp. (Magnum) to stable from positive and affirmed its 'B-' corporate credit rating on the company. "In addition, Magnum added $150 million to its existing senior unsecured notes due 2020, bringing the total for this issue to $600 million. We also lowered our issue rating on the these notes to 'CCC' from 'CCC+' and revised the recovery rating on these notes to '6' from '5', indicating our expectation of negligible (0% to 10%) recovery for lenders in the event of a default," S&P said. "The stable outlook reflects our expectation that Magnum will be able to grow production to an average of 20,000 boe per day in 2013 while keeping its adjusted debt to EBITDA ratio just below 5x," said Standard & Poor's credit analyst Christine Besset. "Our lowering of the senior unsecured issue rating reflects an updated valuation of the company's reserves, increases in the company's borrowing base, and higher levels of unsecured debt." Standard & Poor's views Magnum's business profile as "vulnerable". The company's proved reserve base totals 67.7 million barrels of oil equivalents (boe) at the end of June 2012. This positions the company on the smaller end of rated exploration and production (E&P) companies. The company has moderate exposure to weak natural gas prices, with natural gas representing 36% of its reserves. Magnum's cost structure was also elevated compared with its E&P peers in 2011, especially given its exposure to natural gas. Despite these concerns, the company has started to reap the benefits of its recent acquisitions and capital spending in its oil-rich plays in 2012. "We expect Magnum to increase production by about 140% by Dec. 31, 2012, compared with 2011. Magnum was also able to reduce cash operating costs to $20.52 per boe in the first nine months of 2012 from $30.54 per boe in 2011 as a result of increased scale of operations and improvement in well costs. Moreover, Magnum's increasing exposure to oil and liquids (which should represent about 50% of production in 2012) and current pricing should yield better profitability, going forward," S&P said. "The stable outlook reflects our expectation that Magnum will be able to grow production to an average of about 20,000 boe/d in 2013 while keeping at about 5x, a high but still acceptable level for the rating. We expect a growing borrowing base and the ability to sell assets or reduce growth capital expenditures to continue to support Magnum's liquidity," S&P said. "We could lower the rating if liquidity declines below $75 million. Based on a $337 million borrowing base, such a scenario could occur if the company fails to materialize at least $130 million in asset sale without a reduction in spending, or make further debt-financed acquisitions," S&P said. "We could raise the rating if the company meets its production target while reducing leverage below 4.5x and strengthening liquidity. We consider an upgrade unlikely over the next 12 months barring any asset sale due to our expectation that spending levels will remain high relative to the company's liquidity," S&P said. MIT HOLDING: Incurs $519,000 Net Loss in Third Quarter ------------------------------------------------------ MIT Holding, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $519,228 on $719,172 of sales and services rendered for the three months ended Sept. 30, 2012, compared with net income of $2.47 million on $1.51 million of sales and services rendered for the same period a year ago. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $1.03 million on $2.85 million of sales and services rendered, compared with net income of $1.46 million on $4.72 million of sales and services rendered for the same period during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $982,670 in total assets, $4.42 million in total liabilities, and a $3.44 million total stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/2VckyJ MIT Holding distributes wholesale pharmaceuticals, administers intravenous infusions, operates an ambulatory center where therapies are administered and sells and rents home medical equipment. At June 30, 2012, the Company had negative working capital of $2.0 million. From inception, the Company has incurred an accumulated deficit of $10.6 million. "These factors raise substantial doubt as to the Company's ability to continue as a going concern." MGM RESORTS: Promotes Bill Hornbuckle to President & CMO -------------------------------------------------------- MGM Resorts International has announced the promotion of Bill Hornbuckle to President & Chief Marketing Officer. In the newly-created position that will report to Jim Murren, Chairman & CEO of MGM Resorts International, Mr. Hornbuckle will assume expanded responsibility to include Gaming Development. "Bill Hornbuckle is widely regarded as one of the most strategic and effective leaders in the hospitality and entertainment industry," Murren said. "Since assuming the newly-created role of CMO for the company in 2010, he has been focused on growing the company's relationships with our customers and guests. He has achieved this with significant success, for example, in the creation and growth of our M life customer loyalty program," Murren added. Mr. Murren said the appointment evolved from the execution of the Company's strategic plan that included expanding the Company's presence domestically and internationally. Mr. Murren also announced expanded responsibilities for Corey Sanders, the company's Chief Operating Officer, Bobby Baldwin, President & CEO of CityCenter, and Dan D'Arrigo, Chief Financial Officer. Mr. Sanders will have expanded oversight and leadership of the company's operating functions including Retail, Corporate Advertising and Sales divisions in support of the company's growth strategies. Mr. Baldwin will assume the day to day leadership role for the Aria, Vdara, and Mandarin Hotels, as well as CityCenter Residential and Crystals Retail. Messrs. Sanders, Baldwin and D'Arrigo will continue to report to Murren. "Bill, Corey, Bobby and Dan are part of a leadership team that is high performing and recognized as among the best of the best in our industry. I am proud to have such strong Finance, Development, Marketing and Operational leaders as we continue to grow the company as a leader in the hospitality and entertainment industry," Murren said. About MGM Resorts MGM Resorts International (NYSE: MGM) -- http://www.mgmresorts.com/-- has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, Illinois and Macau. The Company reported net income of $3.23 billion in 2011 and a net loss of $1.43 billion in 2010. MGM's balance sheet at Sept. 30, 2012, showed $27.83 billion in total assets, $18.56 billion in total liabilities, and $9.26 billion in total stockholders' equity. Bankruptcy Warning In the Form 10-K for the year ended Dec. 31, 2011, the Company said that any default under the senior credit facility or the indentures governing the Company's other debt could adversely affect its growth, its financial condition, its results of operations and its ability to make payments on its debt, and could force the Company to seek protection under the bankruptcy laws. * * * As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on MGM Resorts International to 'B-' from 'CCC+'. In March 2012, S&P revised the outlook to positive from stable. "The revision of our rating outlook to positive reflects strong performance in 2011 and our expectation that MGM will continue to benefit from the improving performance trends on the Las Vegas Strip," S&P said. In March 2012, Moody's Investors Service affirmed its B2 corporate family rating and probability of default rating. The affirmation of MGM's B2 Corporate Family Rating reflects Moody's view that positive lodging trends in Las Vegas will continue through 2012 which will help improve MGM's leverage and coverage metrics, albeit modestly. Additionally, the company's declaration of a $400 million dividend ($204 million to MGM) from its 51% owned Macau joint venture due to be paid shortly will also improve the company's liquidity profile. The ratings also consider MGM's recent bank amendment that resulted in about 50% of its $3.5 billion senior credit facility being extended one year from 2014 to 2015. As reported by the TCR on Oct. 15, 2012, Fitch Ratings has affirmed MGM Resorts International's (MGM) Issuer Default Rating (IDR) at 'B-' and MGM Grand Paradise, S.A.'s (MGM Grand Paradise) IDR at 'B+'. MODERN PRECAST: Meeting to Form Creditors Panel on Dec. 17 ---------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, will hold an organizational meeting today, Dec. 17, 2012, at 9:30 a.m. in the bankruptcy cases of Modern Precast Concrete, Inc. The meeting will be held at: Office of the United States Trustee 833 Chestnut Street, Suite 501 Philadelphia, PA 19107 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Modern Precast Concrete, Inc. filed a Chapter 11 petition (Bankr. E.D. Penn. Case No. 12-21304) on Dec. 16, 2012, in Reading, Pennsylvania. Aaron S. Applebaum, Esq. and Barry D. Kleban, Esq., at McElroy Deutsch Mulvaney & Carpenter LLP, in Philadelphia, serve as counsel to the Debtor. The Debtor estimated up to $50 million in both assets and liabilities. West Family Associates, LLC (Case No. 12-21306) and West North, LLC (Case No. 12-21307) also sought Chapter 11 protection. The petitions were signed by James P. Loew, chief financial officer. MSR RESORT: Judge Approves Disclosure Statement ----------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Sean H. Lane signed off on MSR Resort Golf Course LLC's disclosure statement, clearing the resort owner to begin soliciting votes for its Chapter 11 plan following a recent agreement to sell off its five-resort portfolio for $1.5 billion. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owned a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. The Official Committee of Unsecured Creditors is represented by Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, in New York. MTS GOLF: Court Approves Forrest Richardson as Architect -------------------------------------------------------- MTS Golf LLC has obtained approval from the U.S. Bankruptcy Court to employ Forrest Richardson & Assoc. as Golf Course Architect for Debtors. MTS Land LLC and MTS Golf LLC own and operate the now dormant Mountain Shadows Golf Club. They filed separate Chapter 11 petitions (Bankr. D. Ariz. Case Nos. 12-16257 and 12-16257) in Phoenix on July 19, 2012. Mountain Shadows Golf Club -- http://www.mountainshadowsgolfclub.com/-- is an 18 hole, par 56 course located at Paradise Valley. Nestled in the foothills of Camelback Mountain, the 3,081-yard Executive course claims to be one of the most scenic golf courses in Arizona. MTS Land and MTS Golf are affiliates of Irvine, Calif.-based Crown Realty & Development Inc. MTS Land and MTS Golf each estimated assets and debts of $10 million to $50 million. Judge Charles G. Case II oversees the Debtors' cases. Lawyers at Gordon Silver serve as the Debtors' counsel. The petition was signed by Robert A. Flaxman, administrative agent. Lender U.S. Bank is represented in the case by Snell & Wilmer L.L.P. MTS GOLF: Court Approves Fleet-Fisher as Civil Engineer ------------------------------------------------------- MTS Golf LLC sought and obtained approval from the U.S. Bankruptcy Court to employ Fleet-Fisher Engineering, Inc. as Civil Engineer for Debtors. Fred E. Fleet attests that it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Fleet's current rate is $150 per hour. MTS Land LLC and MTS Golf LLC own and operate the now dormant Mountain Shadows Golf Club. They filed separate Chapter 11 petitions (Bankr. D. Ariz. Case Nos. 12-16257 and 12-16257) in Phoenix on July 19, 2012. Mountain Shadows Golf Club -- http://www.mountainshadowsgolfclub.com/-- is an 18 hole, par 56 course located at Paradise Valley. Nestled in the foothills of Camelback Mountain, the 3,081-yard Executive course claims to be one of the most scenic golf courses in Arizona. MTS Land and MTS Golf are affiliates of Irvine, Calif.-based Crown Realty & Development Inc. MTS Land and MTS Golf each estimated assets and debts of $10 million to $50 million. Judge Charles G. Case II oversees the Debtors' cases. Lawyers at Gordon Silver serve as the Debtors' counsel. The petition was signed by Robert A. Flaxman, administrative agent. Lender U.S. Bank is represented in the case by Snell & Wilmer L.L.P. MUNICIPAL MORTGAGE: Raises $540 Million from New Bond Financing --------------------------------------------------------------- Municipal Mortgage & Equity, LLC, through its subsidiaries MuniMae TE Bond Subsidiary, LLC, and TEB Credit Enhancer, LLC, closed on a new bond financing that generated $540.1 million of proceeds which, along with cash of $3.1 million from the Company, replaced all of the Company's securitization debt that had credit enhancement and liquidity facilities expiring on March 31, 2013. The new facility is subject to a remarketing on Dec. 1, 2016. As a result of the transaction, the Company placed bonds and instruments representing interests in bonds with an aggregate fair value at Sept. 30, 2012, of approximately $875.3 million into the borrowing entity (TEB Credit Enhancer). The borrowing entity then issued $540.1 million of Class A certificates. Merrill Lynch, Pierce, Fenner & Smith Incorporated advised on the placement of the Class A certificates, which were initially placed with a single investor. The Class A certificates, which can be called by the Company in whole or in part at any time, are treated as a borrowing on the Company's GAAP financial statements. The Class A certificates bear a floating rate of interest at SIFMA plus 200bps, reset weekly, subject to a maximum rate for each Class A certificate equal to the coupon of the bond underlying such Class A certificate less 5 bps. If the interest rate on any Class A certificate is reset at its maximum rate, the Company will be required to purchase and cancel Class A certificates in order to meet certain requirements with respect to tax-exempt income. The Company expects to receive all net cash flow from the Bonds after payment of the amount due and payable on the Class A certificates and recurring fees. The facility is subject to, among others, the following covenants. A collateral ratio of at least 144% of the Class A certificates outstanding must be maintained or all net cash flow from all the Bonds will be held back and not distributed to the Company until the minimum ratio is restored. In addition, in the event that a Trust Bond fails to pay its full debt service, monies from the Bonds that are not Trust Bonds will be used to pay the deficiency and an equal amount is required to be retained as collateral and not distributed to the Company until such Bond default is cured or the associated Class A certificates are redeemed. In the event a Bond that is not a Trust Bond fails to pay its debt service in full, cash flow from the Bonds which are not Trust Bonds will be held back from the Company in the amount of the shortfall until that Bond either pays its shortfall or is replaced by another bond. In the event that the percentage of Bonds in payment default rise above certain thresholds established under the documents, no monies will be distributable to the Company from the Bonds pledged as collateral until certain more stringent thresholds are achieved. The Company incurred closing costs of approximately $4.7 million, consisting primarily of a structuring and placement fee and legal fees. Appoints New Director On Dec. 5, 2012, the Board of Directors of Municipal Mortgage & Equity, LLC, appointed J.P. Grant as a new director of the Company effective Jan. 1, 2013. Mr. Grant will receive compensation and perquisites in accordance with the standard policies and procedures previously approved by the Board of Directors for all non-employee directors of the Company. Mr. Grant is the founder, President and CEO at Grant Capital Management, Inc. (previously First Municipal Credit Corporation), where he has specialized in providing tax-exempt financing to city and state governments since the company's founding in 2000. Prior to that, he held positions in major account sales for IBM Corporation - Public Sector and Federal Data Corporation. About Municipal Mortgage Baltimore, Md.-based Municipal Mortgage & Equity, LLC (Pink Sheets: MMAB) -- http://www.munimae.com/-- was organized in 1996 as a Delaware limited liability company and is classified as a partnership for federal income tax purposes. When the Company became a publicly traded company in 1996, it was primarily engaged in originating, investing in and servicing tax- exempt mortgage revenue bonds issued by state and local government authorities to finance affordable multifamily housing developments. Since then, the Company made several acquisitions that significantly expanded its business. However, in 2008, due to the financial crisis, the Company began contracting its business. The Company has sold, liquidated or closed down all of its different businesses except for its bond investing activities and certain assets and residual interests related to the businesses and assets that the Company sold due to its liquidity issues. The Company has a majority position in International Housing Solutions S.a.r.l., a partnership that was formed to promote and invest in affordable housing in overseas markets. In addition, at Dec. 31, 2010, the Company has an unfunded equity commitment of $5.1 million, or 2.67% of total committed capital with respect to its role as the general partner to the South Africa Workforce Housing Fund SA I ("SA Fund"). The SA Fund was formed to invest directly or indirectly in housing development projects and housing sector companies in South Africa. A portion of the funding of SA Fund is participating debt provided by the United States Overseas Private Investment Corporation, a federal government entity, and the remainder is equity primarily invested by institutional and large private investors. The Company expects to continue this business. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, KPMG LLP, in Baltimore, Maryland, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has been negatively impacted by the deterioration of the capital markets and has liquidity issues which have resulted in the Company having to sell assets and work with its creditors to restructure or extend its debt arrangements. The Company's balance sheet at Sept. 30, 2012, showed $1.85 billion in total assets, $1.12 billion in total liabilities and $723.23 million in total equity. Bankruptcy Warning The Company said in its 2011 annual report that although it has been able to extend, restructure and obtain forbearance agreements on various debt and interest rate swap agreements, these extensions, restructurings and forbearance agreements are generally short-term in nature and do not by themselves provide a viable long-term solution to the Company's liquidity issues. If the Company is not able to negotiate other arrangements, the Company will not be able to pay the interest on certain of its subordinate debt following the rate increases that are scheduled to occur in April and May of 2012. The Company's future cash flows are not expected to be sufficient to satisfy the overall debt service required under the subordinate debt following such increases, and the Company would be unable to repay the indebtedness if the subordinate debt were accelerated. In the event management is not successful in restructuring or settling its remaining non-bond related debt, or if the bond portfolio net interest income and the common equity distributions the Company receives from its subsidiaries are substantially reduced, the Company may have to consider seeking relief through reorganization under the U.S. Bankruptcy Code. NET TALK.COM: Obtains $1 Million from 1080 NW 163 Drive ------------------------------------------------------- Net Talk.com, Inc., borrowed $1,000,000 from 1080 NW 163 Drive, LLC, and in exchange, the Company issued a 12% Promissory Note and a Mortgage and Security Agreement. The 12% Promissory Note, among other matters, accrues interest at 12% per annum, is payable in full on Nov. 29, 2014, and is secured by the Company's corporate office building, located at 1080 NW 163rd Drive, Miami Gardens, FL 33169. Proceeds from the 12% Promissory Note were used for marketing and general working capital. About Net Talk.com Based in Miami, Fla., Net Talk.com, Inc., is a telephone company, that provides, sells and supplies commercial and residential telecommunication services, including services utilizing voice over internet protocol technology, session initiation protocol technology, wireless fidelity technology, wireless maximum technology, marine satellite services technology and other similar type technologies. The Company's balance sheet at Sept. 30, 2012, showed $5.58 million in total assets, $20.52 million in total liabilities, $7.20 million in redeemable preferred stock, and a $22.15 million total stockholders' deficit. Net Talk.com incurred a net loss of $26.17 million for the year ended Sept. 30, 2011, compared with a net loss of $6.30 million during the prior year. NEW ENTERPRISE: S&P Keeps 'CCC-' Corp. Credit Rating on Watch Neg ----------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on New Enterprise Stone & Lime Co. Inc., including its 'CCC-' corporate credit rating, remain on CreditWatch with negative implications. "The continued CreditWatch listing follows the failure of New Enterprise Stone & Lime to file its already delinquent annual and quarterly financial reports on Form 10-K and 10-Q. Also, the trustee under the existing notes has provided notice to the company that New Enterprise is not in compliance with the financial reporting requirements of the indentures," S&P said. "Failure to provide such reports by Jan. 3, 2013, would result in an event of default under the indentures. New Enterprise is endeavoring to provide financial statements prior to that date. Our baseline expectation is that the company will file its 10-K and first-quarter 10-Q prior to the deadline, however, there can be no assurances that the preparation and filing of these statements will not be further delayed," S&P said. "In addition to technical defaults under various debt obligations, the delayed filing limits visibility of the company's operating results and raises concern that liquidity could become more constrained than we previously anticipated if cash flows are weaker than our most recent estimates. However, we have been provided with information from the company regarding its current liquidity situation, which appears to be sufficient for near-term needs as long as the company's asset based revolving credit lenders continue to provide availability under the company's $170 million revolving credit facility," S&P said. "New Enterprise is a privately held company that sells construction materials including aggregates, concrete, and concrete products; engages in highway construction and paving; and provides traffic safety services and equipment. Its operations are concentrated in Pennsylvania and western New York," S&P said. "We will review the CreditWatch listing once the company files its delinquent annual and quarterly reports and after we have had an opportunity to discuss the company's liquidity, the state of its internal controls, and its most recent operating performance. We could affirm our ratings and remove them from CreditWatch if the company resolves any potential default under its indentures, and if it appears that 2012 and 2013 and future operating cash flows will be neutral or modestly positive as per our estimates. We would lower our rating to 'D' if the company fails to meet the Jan. 3, 2013, date for filing its delinquent financial statements or if lenders pursue remedies under any defaults and demand payment," S&P said. NEW PEOPLES: Shareholders Elect Three Directors to Board -------------------------------------------------------- New Peoples Bankshares, Inc., convened its 2012 annual shareholders' meeting on Dec. 4, 2012. The shareholders elected three directors to serve three year terms expiring in 2015. The three directors elected to serve the three year terms were Joe Carter, Harold Lynn Keene, and Fred W. Meade. The shareholders approved a non-binding advisory vote to approve the compensation of the Company's named executive officers. The shareholders voted to ratify the Company's Audit Committee of the Board of Directors' appointment of Elliott Davis, LLC, to serve as its independent registered public accounting firm for the year ending Dec. 31, 2012. About New Peoples Bankshares New Peoples Bankshares, Inc., is a Virginia bank holding company headquartered in Honaker, Virginia. New Peoples subsidiaries include: New Peoples Bank, Inc., a Virginia banking corporation (the Bank) and NPB Web Services, Inc., a web design and hosting company (NPB Web). The Bank is headquartered in Honaker, Virginia and operates 27 full service offices in the southwestern Virginia counties of Russell, Scott, Washington, Tazewell, Buchanan, Dickenson, Wise, Lee, Smyth, and Bland; Mercer County in southern West Virginia and the eastern Tennessee counties of Sullivan and Washington. According to the Company's quarterly report for the period ended June 30, 2012, the Company and the Bank are subject to various capital requirements administered by federal banking agencies. "The Bank was well capitalized as of June 30, 2012, as defined by the capital guidelines of bank regulations, however, the Company continued to be below the minimum capital requirements as a result of the Tier 1 leverage ratio decreasing to 3.72%, which was below the minimum requirement of 4.00%. Subject to the conversion of the director notes, we expect to return to well-capitalized status at the holding company level in 2012. The Company's capital as a percentage of total assets was 3.27% at June 30, 2012, compared to 3.70% at Dec. 31, 2011." The Company's balance sheet at Sept. 30, 2012, showed $708.21 million in total assets, $680.10 million in total liabilities and $28.11 million in total stockholders' equity. NEWMARKET CORP: S&P Assigns 'BB+' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' long-term corporate credit rating to NewMarket Corp. The outlook is stable. "At the same time, we assigned our 'BB+' issue-level rating to the company's proposed $300 million senior unsecured notes due 2022. The recovery rating on the notes is '3', indicating our expectation of a meaningful (50% to 70%) recovery in the event of a payment default. We expect the company to use the proceeds from the proposed notes to refinance borrowings under its revolving credit facility, which it had used to pay a special dividend of $335 million during November 2012," S&P said. "The ratings on NewMarket Corp. reflect the company's focus on the competitive and mature global petroleum additives industry, exposure to volatile raw material costs, and planned capital projects over the next two years," said credit analyst James Siahaan. "The stable outlook reflects our view that industry dynamics are relatively benign despite low organic growth rates and still subdued economic conditions. We expect NewMarket to maintain credit measures that are appropriate for the rating, even as it implements financial and strategic initiatives aimed at increasing shareholder returns, diversity, and growth," S&P said. "We could raise the rating modestly if the longer-term competitive dynamics in the global petroleum additives industry remain generally favorable, if the company manages its growth objectives and capital spending plan prudently, and if the company demonstrates its ability to maintain its recently expanded operating margins and cash flow generation. While less likely given our current expectations, we could also consider a lower rating if the company's operating profitability erodes materially or if FFO-to-debt deteriorates unexpectedly. In our downside scenario, this would require a return toward pre-2009 historical operating margins. Although we do not expect the company to make any large acquisitions in the near-term, we could also reassess our rating and outlook if such an event occurs," S&P said. NEWPAGE CORP: U.S. Bankruptcy Court Confirms Chapter 11 Plan ------------------------------------------------------------ NewPage Corporation disclosed that the U.S. Bankruptcy Court for the District of Delaware in Wilmington on Thursday confirmed the Company's Chapter 11 Plan. The Plan was accepted by the overwhelming majority of NewPage creditors entitled to vote. The Company will now proceed to close on the restructuring transactions contemplated by the Plan. "We are pleased that the Court has confirmed our Chapter 11 Plan, clearing the way for us to officially exit bankruptcy, hopefully by the end of this year," said George Martin, president and chief executive officer for NewPage. "We will exit bankruptcy with substantially less debt and new financing at lower interest rates. NewPage will be well positioned to serve the needs of our customers and compete successfully in the North American paper industry." The Plan places the leading coated paper manufacturer in the U.S. under the control of senior noteholders owed $1.7 billion. According to Bankruptcy Law360, at a court hearing in Wilmington, U.S. Bankruptcy Judge Kevin Gross said he would sign off on the plan pending minor language changes the Debtors expect to finish by Friday, Bankruptcy Law360 says. About NewPage Corp Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage Group, NewPage Holding, NewPage, and certain of their U.S. subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del. Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its subsidiary, Consolidated Water Power Company, is not a part of the Chapter 11 proceedings. Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage Port Hawkesbury Corp., brought a motion before the Supreme Court of Nova Scotia to commence proceedings to seek creditor protection under the Companies' Creditors Arrangement Act of Canada. NPPH is under the jurisdiction of the Canadian court and the court- appointed Monitor, Ernst & Young in the CCAA Proceedings. Initial orders were issued by the Supreme Court of Nova Scotia on Sept. 9, 2011 commencing the CCAA Proceedings and approving a settlement and transition agreement transferring certain current assets to NewPage against a settlement payment of $25 million and in exchange for being relieved of all liability associated with NPPH. On Sept. 16, 2011, production ceased at NPPH. NewPage originally engaged Dewey & LeBoeuf LLP as general bankruptcy counsel. In May 2012, Dewey dissolved and commenced its own Chapter 11 case. Dewey's restructuring group led by Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., moved to Proskauer Rose LLP. In June, NewPage sought to hire Proskauer as replacement counsel. NewPage is also represented by Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, NewPage disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. The Official Committee of Unsecured Creditors selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. An affiliate, Newpage Wisconsin System Inc., disclosed $509,180,203 in liabilities in its schedules. NORTEL NETWORKS: No Financial Statements for Third Quarter ---------------------------------------------------------- Nortel Networks Corporation (NRTLQ) and Nortel Networks Limited (NNL) disclosed that, consistent with their announcement of Aug. 9, 2012, NNC and NNL did not file their respective unaudited financial statements and related disclosure filings for the third quarter of 2012 by the required filing deadlines under applicable securities laws as a result the determination of the court- appointed monitor in their Canadian creditor protection proceedings that future periodic reporting by both companies could no longer be justified and would be discontinued, effective as of the filing deadlines for their 2012 third quarter financial results. As a result of the Canadian filing defaults, a temporary cease trade order ("CTO") was issued on Dec. 12, 2012 by Authorite Des Marches Financiers (the "AMF"). The CTO is substantially similar to the cease trade order issued by the Ontario Securities Commission on December 11, 2012. The CTO prohibits all trading in securities of both NNC and NNL, effective immediately, other than for: (i) trades made for nominal consideration for the purpose of permitting a security holder to crystallize a tax loss; or (ii) trades in notes of either NNC or NNL to an entity that qualifies as an "accredited investor" as that term is defined under applicable Canadian securities laws. The temporary CTO is scheduled to expire 15 days from the date of its issue unless extended by the AMF. NNC and NNL understand that the AMF will convene a hearing before the expiration date of the CTO for the purpose of making the CTO permanent. NNC and NNL expect that other Canadian provincial or territorial securities regulators will issue cease trade orders similar to the CTO. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation and its various affiliated entities provided next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel did business in more than 150 countries around the world. Nortel Networks Limited was the principal direct operating subsidiary of Nortel Networks Corporation. On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent Nortel Networks Corporation, NNI's direct corporate parent Nortel Networks Limited and certain of their Canadian affiliates commenced a proceeding with the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (Canada) seeking relief from their creditors. Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. That same day, the Monitor sought recognition of the CCAA Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No. 09-10164) under Chapter 15 of the U.S. Bankruptcy Code. That same day, NNI and certain of its affiliated U.S. entities filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10138). In addition, the High Court of England and Wales placed 19 of NNI's European affiliates into administration under the control of individuals from Ernst & Young LLP. Other Nortel affiliates have commenced and in the future may commence additional creditor protection, insolvency and dissolution proceedings around the world. On May 28, 2009, at the request of administrators, the Commercial Court of Versailles, France, ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in U.S. Bankruptcy Court for recognition of the English Proceedings as foreign main proceedings under Chapter 15. U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and 15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors' general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The United States Trustee appointed an Official Committee of Unsecured Creditors in respect of the U.S. Debtors. An ad hoc group of bondholders also was organized. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. An Official Committee of Retired Employees and the Official Committee of Long-Term Disability Participants tapped Alvarez & Marsal Healthcare Industry Group as financial advisor. The Retiree Committee is represented by McCarter & English LLP as Delaware counsel, and Togut Segal & Segal serves as the Retiree Committee. The Committee retained Alvarez & Marsal Healthcare Industry Group as financial advisor, and Kurtzman Carson Consultants LLC as its communications agent. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Since the commencement of the various insolvency proceedings, Nortel has sold its business units and other assets to various purchasers. Nortel has collected roughly $9 billion for distribution to creditors. Of the total, $4.5 billion came from the sale of Nortel's patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. O'DONOGHUE HOLDINGS: Case Summary & Unsecured Creditor ------------------------------------------------------ Debtor: O'Donoghue Holdings, LLC 707 Nicolette Avenue Winter Park, FL 32789 Bankruptcy Case No.: 12-16632 Chapter 11 Petition Date: December 12, 2012 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: Eric A. Lanigan, Esq. LANIGAN & LANIGAN, PL 831 W. Morse Blvd. Winter Park, FL 32789 Tel: (407) 740-7379 Fax: (407) 740-6812 E-mail: ecf@laniganpl.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of 20 largest unsecured creditors contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Orange County Florida County Property $50,050 P.O. Box 2551 Taxes Orlando, FL 32802-2551 The petition was signed by Bruce O'Donoghue, managing member. ORLANDO, FL: S&P Affirms 'BB' SPUR on Series 2008A Bonds -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' underlying ratings (SPUR) on the City of Orlando, Fla.'s series 2008A (first lien) bonds and our 'CCC' SPUR on its series 2008B (second lien) bonds. The outlooks are stable. Standard & Poor's also affirmed its 'CC' SPUR on the city's 2008C (third lien) tourist development tax (TDT) revenue bonds. The outlook remains negative due to our expectation of insufficient pledged TDT revenues to cover its series C Nov. 1, 2013, debt service payment, and the depletion of its series C liquidity reserve at that time," S&P said. "The notching of the ratings among the three series reflects their lien priority and the level of outstanding debt within each lien, which magnifies the impact of even a modest decrease in revenues. The notching further reflects our view of the level of sustained pledged revenue growth we believe would likely be needed to provide at least 1x annual debt service (ADS) coverage at each lien," S&P said. "The negative outlook on the rating for the series C bonds reflects our view of the potential for these bonds to, absent extraordinary growth, deplete their liquidity and debt service reserve funds," said Standard & Poor's credit analyst Le T. Quach. "The outlook on the series 2008A and 2008B bonds is stable based on our expectation of adequate coverage of the respective liens," S&P said. OVERSEAS SHIPHOLDING: Shuman Files Class Action Lawsuit ------------------------------------------------------- The Shuman Law Firm disclosed that a lawsuit seeking class action status has been filed in the United States District Court for the Southern District of New York on behalf of purchasers of Overseas Shipholding Group, Inc. between May 4, 2009 and Oct. 19, 2012, inclusive. For queries, contact: Kip B. Shuman, Esq. Rusty E. Glenn, Esq. The Shuman Law Firm Tel: (866) 974-8626 E-mail: kip@shumanlawfirm.com rusty@shumanlawfirm.com The Complaint alleges that 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." Members of the proposed class may request with the Court an appointment as lead plaintiff of the class no later Dec. 26, 2012. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. The Shuman Law Firm represents investors throughout the nation, concentrating its practice in securities class actions and derivative litigation. About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, 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 owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012. Bankruptcy Judge Peter J. Walsh oversees the case. 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. Kurtzman Carson Consultants LLC will provide certain administrative services. 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. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed a five-member official committee of unsecured creditors in the case of Overseas Shipholding Group Inc. PENINSULA GAMING: S&P Lowers Corporate Credit Rating to 'B' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Peninsula Gaming LLC to 'B' from 'B+' and removed it from CreditWatch, where it was placed with negative implications on May 17, 2012, following the announcement that Boyd had entered into an agreement to acquire Peninsula. "We subsequently withdrew our corporate credit rating on Peninsula Gaming LLC, because it now is an indirect, wholly owned subsidiary of Boyd Gaming Corp.," S&P said "At the same time, we assigned issue-level and recovery ratings to Peninsula's new $875 million credit facilities, consisting of a $50 million priority revolving credit facility and an $825 million term loan, both due Nov. 17, 2017," said Standard & Poor's credit analyst Melissa Long. "We assigned the revolver our issue-level rating of 'BB-' (two notches higher than our 'B' corporate credit rating on Boyd Gaming Corp.) and our recovery rating of '1', indicating our expectation of very high (90% to 100%) recovery for lenders in the event of a payment default. We assigned the term loan our issue-level rating of 'B+' (one notch higher than the corporate credit rating) and a recovery rating of '2', indicating our expectation of substantial (70% to 90%) recovery for lenders in the event of a default. Our rating assignment follows the concurrent closing of the company's new credit facility with the acquisition and our review of final documentation." "We also affirmed our 'B' corporate credit rating on Boyd Gaming Corp. The rating outlook is stable," S&P said. The corporate credit rating on Boyd reflects S&P's assessment of the company's financial risk profile as "highly leveraged" and its business risk profile as "fair," according to its rating criteria. PERRY INVESTMENT: Case Summary & 2 Unsecured Creditors ------------------------------------------------------ Debtor: Perry Investment Group, LLC P.O. Box 958 Bluefield, WV 24701 Bankruptcy Case No.: 12-10164 Chapter 11 Petition Date: December 12, 2012 Court: United States Bankruptcy Court Southern District of West Virginia (Bluefield) Judge: Ronald G. Pearson Debtor's Counsel: Joseph W. Caldwell, Esq. Marshall C. Spradling, Esq. CALDWELL & RIFFEE P.O. Box 4427 Charleston, WV 25364-4427 Tel: (304) 925-2100 Fax: (304) 925-2193 E-mail: joecaldwell@frontier.com marshall@spradlinglaw.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $50,001 to $100,000 A copy of the Company's list of its two unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wvsb12-10164.pdf The petition was signed by Ward B. Perry, member. PHOENIX COMPANIES: A.M. Best Puts 'bb-' ICR on Review ----------------------------------------------------- A.M. Best Co. has placed under review with negative implications the financial strength rating (FSR) of B+ (Good) and issuer credit ratings (ICR) of "bbb-" of the insurance subsidiaries of The Phoenix Companies, Inc. (Phoenix) (headquartered in Hartford, CT) [NYSE: PNX]. In addition, A.M. Best has placed under review with negative implications the ICR of "bb-" of Phoenix, as well as all the debt ratings on the outstanding securities issued by the group. (See below for a detailed listing of the companies and ratings.) The rating actions follow the announcement that Phoenix is seeking consent from the bondholders to waive the indenture's requirement to furnish timely financials to the trustee on its 7.45% Quarterly Interest Bonds due 2032. Phoenix will need consent from a majority of the bondholders in order to successfully extend the date on this requirement for the filing of third quarter 2012 financial statements. As previously announced on November 8, 2012, Phoenix declared it was postponing the release of its third quarter 2012 financial statements due to a restatement of its financial results. The company intends to file this report prior to the timely filing of its year-end 2012 Form 10-K, which has a deadline of March 18, 2013. Phoenix is seeking to remedy this reporting covenant violation through the amendment to the indenture. Within the next 10 days, Phoenix plans to make available to its bondholders a Consent Solicitation Statement and begin outreach to the bondholders for their consent to the amendment. Phoenix's 7.45% Quarterly Interest Bonds, with approximately $253 million outstanding, are a retail issue sold in $25 increments. They currently trade near par. The under review status reflects A.M. Best's concerns as to the uncertainty of achieving a successful outcome to the waiver process. A. M. Best believes Phoenix has a credible contingency strategy in place if needed, but one which significantly reduces an already limited financial flexibility. Although the current operating performance of its insurance subsidiaries is profitable, A. M. Best believes they will be materially impacted by an inability of Phoenix to obtain the necessary waiver. The ratings are likely to remain under review pending the completion of the waiver process and the filing of the year-end 2012 Form 10-K. The FSR of B+ (Good) and ICRs of "bbb-" have been placed under review with negative implications for the following subsidiaries of The Phoenix Companies, Inc.: -- Phoenix Life Insurance Company -- PHL Variable Insurance Company -- Phoenix Life and Annuity Company -- American Phoenix Life and Reassurance Company The following debt ratings have been placed under review with negative implications: The Phoenix Companies, Inc. -- "bb-" on $300 million 7.45% senior unsecured notes, due 2032 Phoenix Life Insurance Company -- "bb" on $175 million 7.15% surplus notes, due 2034 PLANDAI BIOTECHNOLOGY: Michael Cronin Quits as Accountant --------------------------------------------------------- Plandai Biotechnology, Inc.'s Board of Directors, acting through the Chief Executive Officer, Roger Duffield, accepted the resignation of Michael F. Cronin, CPA, from his engagement to be the independent certifying accountant for the Company. Mr. Cronin is pursuing a career in the private sector. The reports of Michael F. Cronin, CPA, on the Company's financial statements for the fiscal year ended June 30, 2012, did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that it included an emphasis paragraph on the substantial doubt about the Company's ability to continue as a going concern as of a result of the Company having suffered recurring losses from operations. On Dec. 3, 2012, the Company engaged Patrick Rodger, CPA, P.A., as the Company's independent accountant to audit the Company's financial statements and to perform reviews of interim financial statements. During the fiscal years ended June 30, 2012, and March 31, 2011, through Dec. 3, 2012, neither the Company nor anyone acting on its behalf consulted with Patrick Rodger, CPA, P.A., regarding (i) either the application of any accounting principles to a specific completed or contemplated transaction of the Company, or the type of audit opinion that might be rendered by Patrick Rodger, CPA, P.A., on the Company's financial statements; or (ii) any matter that was either the subject of a disagreement with Michael F. Cronin, CPA or a reportable event with respect to Michael F. Cronin, CPA. About Plandai Based in Seattle, Washington, Plandai Biotechnology, Inc., through its recent acquisition of Global Energy Solutions, Ltd., and its subsidiaries, focuses on the farming of whole fruits, vegetables and live plant material and the production of proprietary functional foods and botanical extracts for the health and wellness industry. Its principle holdings consist of land, farms and infrastructure in South Africa. The Company's balance sheet at Sept. 30, 2012, showed $7.3 million in total assets, $8.0 million in total liabilities, and a stockholders' deficit of $709,235. As reported in the TCR on Oct. 22, 2012, Michael F. Cronin CPA expressed substantial doubt about Plandai's ability to continue as a going concern in his report on the Company's June 30, 2012, financial statements. Mr. Cronin noted that the Company has incurred a $3.7 million loss from operations, consumed $700,000 of cash due to its operating activities, and may not have adequate readily available resources to fund operations through June 30, 2013. PRECISION OPTICS: Amends 5.7 Million Common Shares Prospectus ------------------------------------------------------------- Precision Optics Corporation, Inc., filed with the U.S. Securities and Exchange Commission a first amendment to the Form S-1 registration statement relating to the sale or other disposition of up to 5,730,547 shares of the Company's common stock and shares underlying warrants by selling stockholders. The Company is not selling any securities in this offering and therefore will not receive any proceeds from this offering. The Company may receive proceeds from the possible future exercise of warrants. All costs associated with this registration will be borne by the Company. The Company's common stock is quoted on the OTCQB under the symbol "PEYE." On Nov. 29, 2012, the last reported sale price of the Company's common stock on the OTCQB was $1.16 per share. A copy of the amended prospectus is available for free at: http://is.gd/j1clWu About Precision Optics Headquartered in Gardner, Massachusetts, Precision Optics Corporation, Inc., has been a developer and manufacturer of advanced optical instruments since 1982. The Company designs and produces high-quality micro-optics, medical instruments and other advanced optical systems. The Company's medical instrumentation line includes laparoscopes, arthroscopes and endocouplers and a world-class product line of 3-D endoscopes for use in minimally invasive surgical procedures. The Company reported net income of $960,972 on $2.15 million of revenue for the year ended June 30, 2012, compared with a net loss of $1.05 million on $2.24 million of revenue during the prior fiscal year. The Company's balance sheet at Sept. 30, 2012, showed $3.38 million in total assets, $984,227 in total liabilities, all current, and $2.40 million in total stockholders' equity. PRESSURE BIOSCIENCES: Appoints C. Mir as Chief Financial Officer ---------------------------------------------------------------- Pressure BioSciences, Inc., announced that Mr. Conrad F. Mir has joined the Company as its chief financial officer, effective Dec. 5, 2012. Mr. Mir has over 20 years experience in investment banking, financial structuring, and corporate reengineering. He has served in various executive management roles and on the Board of Directors of several companies in the biotechnology industry. Most recently, Mr. Mir was chairman and CEO of Genetic Immunity, Inc. (GI), a plasmid, DNA company in the HIV space. Prior to GI, Mr. Mir served as executive director of Advaxis, Inc., a vaccine company. During his tenure at GI and Advaxis, Mr. Mir was responsible for raising nearly $40 million in growth capital and broadening corporate reach to new investors and current shareholders. "I look forward to being a part of the management team at Pressure BioSciences," said Mr. Mir. "It is my intent to help develop and implement a sustainable fiscal road map that can increase shareholder value by supporting continued growth, particularly in the marketing and sales area. I am grateful for the opportunity to help define the Company's future." Mr. Richard T. Schumacher, President and CEO of PBI, commented: "During 2012, we implemented an aggressive commercialization program for PCT that included, among other things, an increase in international sales and distribution coverage from three to over twenty countries. In addition, last month Cole Parmer, a Thermo Fisher Company, the world leader in serving science, announced they will distribute our PBI Shredder SG3 System." Mr. Schumacher continued, "We recently announced record PCT product sales and believe our new commercialization program was integral to this achievement. Going forward, we need to ensure that we properly finance this initiative. This is currently our biggest concern; it is also one of Conrad's best strengths. He has proven over the past few years that he has the ability to raise significant funds for small, developing companies in a smart and timely way. Soon I believe that all stakeholders in PBI will come to understand just how fortunate we are to have Conrad join us as our new CFO." Prior to GI and Advaxis, Mr. Mir worked for several investment banks including Sanford C. Bernstein, First Liberty Investment Group, and Nomura Securities International. He holds a BA/BS in Economics and English with special concentrations in Mathematics and Physics from New York University. He is a classically trained pianist and teacher, and a student of martial arts. He is married with two children, the alumni council chairman of Tau Kappa Epsilon fraternity - Tau Alpha chapter (NYU), and a member of NIRI. About Pressure Biosciences Pressure BioSciences, Inc., headquartered in South Easton, Massachusetts, holds 14 United States and 10 foreign patents covering multiple applications of pressure cycling technology in the life sciences field. As reported in the TCR on March 2, 2012, Marcum LLP, in Boston, Massachusetts, expressed substantial doubt about Pressure Biosciences' 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 had recurring net losses and continues to experience negative cash flows from operations. The Company's balance sheet at Sept. 30, 2012, showed $1.91 million in total assets, $2.64 million in total liabilities and a $730,839 total stockholders' deficit. R&A PETROLEUM: Case Summary & 3 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: R&A Petroleum LLC 1716 So. Main Street Clearfield, UT 84015 Bankruptcy Case No.: 12-35509 Chapter 11 Petition Date: December 12, 2012 Court: United States Bankruptcy Court District of Utah (Salt Lake City) Judge: R. Kimball Mosier Debtor's Counsel: Russell S. Walker, Esq. WOODBURY & KESLER 265 East 100 South, Suite 300 Salt Lake City, UT 84111 Tel: (801) 364-1100 Fax: (801) 359-2320 E-mail: rwalker@wklawpc.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its three unsecured creditors is available for free at http://bankrupt.com/misc/utb12-35509.pdf The petition was signed by Arshi Singh, member. RESIDENTIAL CAPITAL: Wants Lease Decision Deadline Extended ----------------------------------------------------------- Residential Capital LLC and its affiliates and their professionals have spent time and effort on a multitude of critical matters, including conducting auction sales of their assets, and these efforts, according to Gary S. Lee, Esq., at Morrison & Foerster LLP, in New York, have required significant time commitments from the Debtors and their professionals. To make informed decisions regarding whether to assume or reject each of the Debtors' unexpired leases, the Debtors require more time to adequately evaluate the potential value of each of the Leases in the context of their restructuring efforts. In addition, the purchasers of the Debtors' assets are still determining which Leases they intend to acquire as necessary to continue the Debtors' mortgage loan origination and servicing business. Rather than prematurely assume certain Leases or risk inadvertent rejection of the Leases, the Debtors have contacted certain of the Lease counterparties requesting an extension of the assumption or rejection date for each of the Leases. The Debtors tell the Court that they have received consents from certain Lease counterparties to further extend the Assumption/Rejection Date for the Leases. Accordingly, the Debtors ask the Court to further extend their lease decision deadline to the date agreed upon with the Lease Counterparties. 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. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. 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. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. 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. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Drennen, et al., Seek to Certify Class Claim ----------------------------------------------------------------- Rowena Drennen, Flora Gaskin, Roger Turner, Christie Turner, John Picard, and Rebecca Picard, on behalf of themselves and all others similarly situated and the general public including, without limitation, the putative class of persons represented in the consolidated class action entitled In Re: Community Bank of Northern Virginia Second Mortgage Lending Practice Litigation, filed in the United States District Court for the Western District of Pennsylvania, MDL No. 1674, Case Nos. 03-0425, 02- 01201, 05-0688, 05-1386, ask the U.S. Bankruptcy Court for the Southern District of New York to enter an order authorizing the application of Rule 7023 of the Federal Rules of Bankruptcy Procedure to any contested matters associated with or arising out of any of the claims asserted against GMAC-Residential Funding Corporation, n/k/a Residential Funding Company, LLC, and other Debtors pursuant to the class proofs of claim filed by the Class Claimants in the Debtors' Chapter 11 cases. The Class Claimants have filed a proof of claim against RFC on behalf of the Putative Class. The Claim asserts: -- violations of the Real Estate Settlement Procedures Act ("RESPA") for kickbacks, unearned fees and impermissible business relationships; -- violations of the Truth in Lending Act ("TILA") and the Home Ownership and Equity Protection Act ("HOEPA") for inaccurate and understated material disclosures; -- violations of other disclosure and substantive requirements of TILA and HOEPA; and -- violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO") for racketeering activities used to perpetuate and further a predatory lending scheme. The Class Claimants also filed a Proof of Claim against RFC's immediate and ultimate Debtor parents -- respectively, GMAC-RFC Holding Company, LLC and Residential Capital, LLC -- on an alter ego and veil piercing theory. The Class Claimants estimate that the damages for which RFC and other Debtors are liable on the claims total at least $1.87 billion. The Class Claimants are represented by: Daniel J. Flanigan, Esq. POLSINELLI SHUGHART PC 805 Third Avenue, Suite 2020 New York, NY 10022 Tel: (212) 684-0199 Fax: (212) 759-8290 Email: dflanigan@polsinelli.com - and - David M. Skeens, Esq. WALTERS, BENDER, STROHBEHN & VAUGHAN, PC 2500 City Center Square 1100 Main Kansas City, MO 64105 Tel: (816) 421-6620 Fax: (816) 421-4747 Email: dskeens@wbsvlaw.com - and - R. Bruce Carlson, Esq. CARLSON LYNCH LTD. 115 Federal Street, Suite 210 Pittsburgh, PA 15212 Tel: (412) 322-9243 Fax: (412) 231-0246 Email: bcarlson@carlsonlynch.com Objections Drennen, et al., according to the Debtors, are trying for a third time to achieve what has eluded proponents of class certification against RFC during the past 11 years -- certification of a class of more than 44,000 individuals residing across the country. The claims at issue relate to the lending practices of two non-debtor banks, Community Bank of Northern Virginia and Guaranty National Bank of Tallahassee and the relationship of these two banks with the "Shumway/Bapst Organization" in making second mortgage loans. RFC is named as a defendant because it purchased many of those loans and thus allegedly funded the Shumway/Bapst Organization. These claims have been in litigation in one form or another for over 11 years, and prior settlement approvals have been twice reversed on appeal by the U.S. Court of Appeals for the Third Circuit. Notwithstanding that lengthy history, to date, no certified class exists and little discovery has taken place on the issue of certification, much less on the merits of the claimants' allegations. The Debtors argue that the Bankruptcy Court should not exercise its discretion under Rule 9014 to apply Rule 7023 to the contested matter because: (a) the Putative Class was not certified as a class prepetition, (b) the putative class members received sufficient notice of the bar date and should have been on notice that they could not rely on class representation, and (c) the benefits and costs of class litigation are far outweighed by the efficiencies created by the bankruptcy claims resolution process. The Debtors further argue that the Movants have failed to satisfy the requirements for class certification pursuant to Rule 23 of the Federal Rules of Civil Procedure due to the absence of competent evidence sufficient to carry their burden of proof. For the reasons stated, the Debtors ask the Court to deny the Movants' request. PNC Bank, N.A., reserves its right to object to any request for class certification in the multi-district litigation filed in the Western District of Pennsylvania under the caption, In re Community Bank of Northern Virginia Second Mortgage Lending Practice Litigation, MDL No. 1674, Case Nos. 03-0425, 02-01201, 05-0688, 051386. 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. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. 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. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. 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. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: AIG Asset, et al., Object to RMBS Settlement ----------------------------------------------------------------- AIG Asset Management (U.S.), LLC, and its affiliates and other several other investors holding residential mortgage-backed securities marketed by debtors Residential Capital LLC and its affiliates have concerns regarding the Debtors' motion for approval of a compromise and settlement of an allowed claim of up to $8.7 billion against certain Debtors to be offered to and allocated amongst certain securitization trusts. AIG Asset, et al., take no position on the merits of the RMBS Trust Settlement Motion -- whether the Allowed Claim amount is a defensible amount, or whether it is appropriate or even legal under the relevant Governing Documents for part of its value to be shifted from certificate holders to a group of attorneys. The Investors, however, assert that approval of the settlement may, without clarification, severely prejudice the ability of creditors like them to ensure that at the plan confirmation stage, they and other similarly situated creditors are provided fair and equal treatment. In order to address their concerns, the Investors suggest that the Court needs to expressly provide in any order approving the RMBS Trust Settlement Motion that any Allowed Claim is not deemed to be an unsubordinated claim or that any such determination is without prejudice to later challenges, and that all arguments as to the classification and treatment of any Allowed Claim as compared to any other claims are fully reserved, without prejudice. Those provisions would do no violence to the merits of the settlement, but would ensure that, through this settlement, the Debtors do not improperly prejudice parties in later plan confirmation stages, the Investors further assert. Amherst Advisory & Management, LLC, acting in its capacity as investment manager for holders of trust certificates issued by RALI Series 2006-QO7 Trust, objects to the proposed settlement complaining that the documents provide little information as to method of allowing the Allowed Claim among the settling trusts. The "agreed-upon formulation" guiding allocation consists of retaining a third-party professional and providing that professional with unfettered discretion to estimate the Trusts' relative net losses, Amherst specifies. Amherst is represented by: David M. Feldman, Esq. Joshua P. Weisser, Esq. GIBSON, DUNN & CRUTCHER LLP 200 Park Avenue New York, NY 10166-0193 Tel: (212) 351-4000 FREE Fax: (212) 351-4035 Email: dfeldman@gibsondunn.com jweisser@gibsondunn.com New Jersey Carpenters Health Fund, the court-appointed lead plaintiff in the consolidated securities class action styled as New Jersey Carpenters Health Fund, et als., on Behalf of Themselves and All Others Similarly Situated v. Residential Capital, LLC, et als., filed in the United States District Court for the Southern District of New York, Case No. 08-CV-8781 (HB), reserves its rights as to the ultimate appropriate distribution under any plan of reorganization or liquidation filed by the Debtors, as well as the classification and treatment of its claims. The Lead Plaintiff asserts that any order approving the RMBS Trust settlement should affirmatively and expressly carve out from any and all releases provided in the RMBS Trust Settlement all of its claims asserted or assertable against any Debtors or non-Debtors. Union Central Life Insurance Company, Ameritas Life Insurance Corp., and Acacia Life Insurance Company, plaintiffs in the civil action styled as Union Cent. Life Ins. Co. et al. v. Credit Suisse First Boston Mortg. Sec. Corp. et al., pending in the United States District Court for the Southern District of New York, Case No. 11-CV-2890 (GBD) and Cambridge Place Investment Management Inc., plaintiff in the civil actions styled as Cambridge Place Investment Management Inc. v. Morgan Stanley & Co., Inc., et al., pending in the Superior Court of Massachusetts, Case Nos. 10-2741-BLS1 and 1-0555-BLS1, join in New Jersey Carpenters' objection. Triaxx Prime CDO 2006-1, LLC, Triaxx Prime CDO 2006-2, LLC, and Triaxx Prime CDO 2007-1, LLC, which hold certificates issued by 20 Trusts, complain that the proposed settlement is faulty because it treats losses as proxy for representation and warranty claims, and assumes that the losses in all Trusts are equally likely to correlate to variable R&W claims. The losses in some Trusts are much more likely to give rise to R&W Claims than others, Triaxx asserts. Triaxx also objects to the Allocation Formula specifically rather than the amount of the Allowed Claim. The Allocation Formula should be revised to take into account the relative likelihood of viable R&W Claims, based on (a) the types of Loans held by the Trusts and (b) the representations and warranties applicable thereto, Triaxx further asserts. The hearing on the approval of the proposed RMBS Trust Settlement has been further moved to March 18, 2013. 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. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. 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. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. 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. 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). REVSTONE INDUSTRIES: Amends List of Largest Unsecured Creditors --------------------------------------------------------------- Revstone Industries LLC has filed with the Bankruptcy Court an amended list of creditors holding the 20 largest unsecured claims, disclosing: Name of Creditors Nature of Claim Claim Amount ----------------- --------------- ------------ Boston Finance Group LLC Loan $20,958,834 c/o Craig Neckers Smith Haughey Rice & Roegge 101 N. Park St., Ste. 100 Traverse City, MI 49684 Tel: 231-929-4878 Fax: 231-929-4182 Schoeller Arca Systems Inc. Trade $10,000,000 c/o Suann Trimmer Dawda, Mann, Mulcahy & Sadler PLC 39533 Woodlawn Ave., Suite 200 Bloomfield Hills, MI 48304 Tel: 248-642-3700 Fax: 248-642-7791 GE CF Mexico, S.A. De C.V. Trade $8,800,000 c/o Antonio Dovali Jaime No. 70 Piso 5 Colonia Santa Fe 01210 Mexico D.F., Mexico Tel: 011 52 55 5257-6400 Fax: 011 52 55 5257-9580 Additional contact: Alfredo Espino E-mail: Alfredo.Espino@gemmc.ge.com RI SPC Trade $8,524,145 c/o David Bartholomew Bingham McCutchen LLP One Federal Street Boston, MA 02110 Tel: 617-951-8592 Fax: 617-951-8736 JMP Industries Inc. Loan $8,000,000 c/o Shusheng Wang Miller, Canfield, Paddock & Stone PLC 840 West Long Lake Road Suite 200 Troy, MI 48098 Tel: 248-267-3353 Fax: 248-879-2001 Jeffrey Owens & Trade $3,271,623 Palm Marketing c/o Jeffrey Owen E-mail: Jeffrey.owen@palmplastics.com Comvest Capital II, L.P. Trade $2,600,000 c/o Jonathan Cooper Goldberg Kohn Ltd. 55 East Monroe Street Suite 3300 Chicago, IL 60603 Tel: 312-201-3980 Fax: 312-863-7480 Dexter Foundry, Inc. Loan $1,850,000 c/o Craig R. Foss Foss Kuiken & Cochran P.C. 100 E. Burlington Ave. First National Bank Building, Ste. 201 P.O. Box 30 Fairfield, IA 52556 Tel: 641-472-3129 Fax: 641-472-9423 Patrick O'Mara Loan $1,400,000 c/o Scott R. Murphy Barnes & Thornburg LLP 171 Monroe Ave., NW, Ste 1000 Grand Rapids, MI 49503 Tel: 616-742-3930 Fax: 616-742-3999 Thule Holdings Inc. Trade $1,000,000 Thule Towing Systems LLC c/o Mark Schnitzler Ivey, Barnum & O'Mara LLC 170 Mason Street Greenwich, CT 06830 Tel: 203-661-6000 Fax: 203-661-4962 Nexteer Trade $841,359 c/o Dante Benedettini 3900 East Holland Road Saginaw, MI 48601 Tel: 989-798-1342 Kerry Capital Trade $722,600 c/o Tom Janes Two Liberty Square 10th Floor Boston, MA 02109 Tel: 617-723-2620 E-mail: tjanes@kerrycapital.com Phare Capital Trade $710,000 c/o Liz Varley Camp 9 West 57th Street 26th Floor New York, NY 10019 Tel: 212-845-9898 Cabot-TX1L01 LP Trade $669,123 c/o Cabot Properties Inc. One Beacon Street, 17th Flr Boston, MA 02108 Tel: 617-723-7400 Fax: 617-723-4200 General Motors Trade $618,182 c/o Tricia Sherrick Honingman Miller Schwartz and Cohn LLP 2290 First National Bldg 660 Woodward Avenue Detroit, MI 48226 Tel: 313-465-7662 Fax: 313-465-7663 SG Equipment Finance Trade $593,242 USA Corp. c/o Kevin M. Chudler & Associates 26211 Central Park Blvd. Suite 211 Southfield, MI 48076 Tel: 248-212-8585 Fax: 201-839-1111 - and - c/o Michael Tsang The Tsang Law Firm P.C. 40 Wall Street, 26th Flr New York, NY 10005 Tel: 212-227-2246 Fax: 212-227-2265 SAPA Group Trade $547,738 Jeff Day 8550 W. Bryn Mawr Ave. 10th Floor Chicago, IL 60031 Tel: 773-380-6315 Fax: 773-380-4080 Loeb Financial Services LLC Trade $538,318 James Newman 4131 S. State Street Chicago, IL 60609 Tel: 773-548-4131 Fax: 773-548-2608 Native American Logistics Trade $378,073 Worldwide LLC c/o Kevin N. Summers Dean & Fulkerson 801 W. Big Beaver Road Suite 500 Troy, MI 48084 Tel: 248-362-1300 Fax: 248-362-1358 StormHarbour Securities LP Trade $375,000 c/o Putney Twombley Hall & Hirson LLP 521 Fifth Avenue New York, NY 10175 Tel: 212-682-0020 Fax: 212-682-9380 Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. Lawyers at Richards, Layton & Finger, P.A., serve as the Debtor's counsel. In its petition, Revstone estimated under $50 million in assets and debts. ROSETTA GENOMICS: Says Going Concern Doubt No Longer Exist ---------------------------------------------------------- Rosetta Genomics Ltd. has restated its consolidated financial statements as of Dec. 31, 2011, to reflect that the conditions that raised substantial doubt about whether the Company would continue as a going concern no longer exist. The restated consolidated financial statements are being filed in connection with a new shelf Registration Statement on Form F-3 that the Company filed to replace its previous shelf Registration Statement on Form F-3 that expired pursuant to the SEC's rules in November 2012. Since the date of completion of the Company's audit of the accompanying financial statements and initial issuance of its report thereon dated April 2, 2012, which report contained an explanatory paragraph regarding the Company's ability to continue as a going concern, the Company has completed several rounds of issuances of its ordinary shares resulting in aggregate net proceeds of $37,945. Therefore, the conditions that raised substantial doubt about whether the Company will continue as a going concern no longer exist. A copy of the amended Annual Report is available for free at: http://is.gd/G0azl7 Offering $75MM Worth of Securities Rosetta filed with the SEC a Form F-3 prospects relating to the offer and sale of up to $75,000,000 aggregate dollar amount of ordinary shares, debt securities, warrants and units. The Company will specify in one or more prospectus supplements the terms of the securities to be offered and sold. The Company may sell these securities to or through underwriters or dealers and also to other purchasers or through agents. The Company's ordinary shares are currently listed on The NASDAQ Capital Market under the symbol "ROSG." On Dec. 6, 2012, the last reported sale price of the Company's ordinary shares was $4.51 per share. As of Dec. 7, 2012, the aggregate market value of the Company's outstanding ordinary shares held by non-affiliates was approximately $50,644,183, based on 9,096,548 shares of outstanding common stock, of which 9,092,313 shares were held by non-affiliates, and a per share price of $5.57 based on the closing sale price of the Company's ordinary shares on Oct. 17, 2012. The Company has offered securities with an aggregate market value of approximately $10,152,882, consisting of (1) 540,000 ordinary shares we offered and sold in April 2012 at a public offering price of $2.55 per share, (2) 632,057 ordinary shares the Company offered and sold in May 2012 at a public offering price of $3.50 per share, and (3) 570,755 ordinary shares the Company offered and sold in May 2012 at a public offering price of $11.50 per share. A copy of the Form F-3 is available for free at: http://is.gd/BzpXBh About Rosetta Based in Rehovot, Israel, Rosetta Genomics Ltd. is seeking to develop and commercialize new diagnostic tests based on a recently discovered group of genes known as microRNAs. MicroRNAs are naturally expressed, or produced, using instructions encoded in DNA and are believed to play an important role in normal function and in various pathologies. The Company has established a CLIA- certified laboratory in Philadelphia, which enables the Company to develop, validate and commercialize its own diagnostic tests applying its microRNA technology. The Company reported a net loss after discontinued operations of $8.83 million in 2011, compared with a net loss after discontinued operations of $14.76 million in 2010. The Company's balance sheet at June 30, 2012, showed $7.67 million in total assets, $3.95 million in total liabilities and $3.71 million in total shareholders' equity. SAINT PETER'S HOSPITAL: S&P Cuts Rating on $165MM Bonds to 'BB+' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating to 'BB+' from 'BBB-' on $165.6 million series 2011 and 2007 bonds issued by the New Jersey Health Care Facilities Financing Authority for Saint Peter's University Hospital. "The rating action reflects our assessment of the hospital's unexpectedly weak year-to-date financial results due to significant volume declines," said Standard & Poor's credit analyst Cynthia Keller. "Although there have been changes made in an effort to reverse the volume, we believe the rebound could be slow as there is ample competition in the service area," said Ms. Keller. "Although the 2012 loss followed a profitable year, the organization has an inconsistent earnings trend and while the balance sheet is generally consistent with an investment-grade rating, it is not sufficiently strong to compensate for the persistent operating losses," according to Standard & Poor's. The 'BB+' rating reflects Standard & Poor's view of Saint Peter's: Weak debt service coverage, cash flow, and margins to date in 2012; Significant volume declines in 2012; Ample competition in the service area; and Receipt of charity care and hospital relief funding, and although state support has been very stable, reliance on these funds for profitability is a credit risk. A lower rating is precluded by Saint Peter's; Improved cash and investment balances; Conservative all fixed-rate bonds; Favorable location in 'A+' rated New Brunswick and 'AAA' rated Middlesex County; and Revenue diversity from acute care and long-term-care operations. "The stable outlook reflects that it is unlikely Standard & Poor's will lower the rating within the one-year horizon covered by the outlook period, and that the uncertainty about whether management's strategy will be successful in rebuilding volumes is inherent in this lower rating. A return to profitable operations sufficient to generate a multiyear record of 2x debt service coverage is necessary before Standard & Poor's could consider a positive outlook or higher rating. Furthermore, the balance sheet must remain stable, with no material additional debt issuance or decline in unrestricted reserves. The state's record of subsidy support is also an important rating consideration," according to Standard & Poor's. SECUREALERT INC: Gary Shelton, et al., Repurchase MMS ----------------------------------------------------- SecureAlert, Inc., entered into a Stock Purchase Agreement with Gary Shelton, Larry Gardner and Sue Gardner (the "Buyers") whereby the Buyers purchased all of the issued and outstanding capital stock of Midwest Monitoring & Surveillance, Inc., a wholly-owned subsidiary of the Company. The Agreement is effective as of Oct. 1, 2012. On Dec. 1, 2007, SecureAlert entered into a stock purchase agreement to purchase MMS from the Buyers. Under the terms of the Original Transfer Agreement the Company currently owed the Buyers $300,000 plus a percentage of future revenue, estimated to be approximately $350,000, for a total of $650,000. The Buyers have agreed to repurchase MMS from the Company on terms contained in the Agreement. The purchase price payable by the Buyers to the Company under the Agreement is equal to all sums owed or potentially owed by the Company to the Buyers as of the effective date of the transaction (Oct. 1, 2012). Specifically, the Company's obligation for payment under the Original Transfer Agreement, as amended, as well as any ancillary document entered into by the Registrant and the Sellers, including employment agreements, promissory notes, and amendments to the Original Transfer Agreement, plus $100,000 in cash, currently held as security for the performance bond known as the "Moose Lake Bond." The payment of the cash portion of the purchase price under the Agreement is evidenced by a promissory note made by MMS in favor of the Company in the principal amount of $100,000. Pursuant to the Agreement, the parties also entered into a mutual release of all claims related to past transactions and the business relationship between the Company and the Buyers. A copy of the Stock Purchase Agreement is available at: http://is.gd/rNY3jS About SecureAlert Inc. Sandy, Utah-based SecureAlert, Inc. (OTC BB: SCRA) -- http://www.securealert.com/-- is an international provider of electronic monitoring systems, case management and services widely utilized by more than 650 law enforcement agencies worldwide. In the auditors' report accompanying the consolidated financial statements for the fiscal year ended Sept. 30, 2011, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, noted that the Company has incurred losses, negative cash flows from operating activities and has an accumulated deficit. The Company's balance sheet at June 30, 2012, showed $22.73 million in total assets, $9.51 million in total liabilities, and $13.21 million in total equity. SECUREALERT INC: Has $16.6 Million Loan Agreement With Sapinda -------------------------------------------------------------- SecureAlert, Inc., entered into a Loan and Security Agreement with Sapinda Asia Limited whereby Sapinda will loan the Company $16,640,000. The Loan will accrue interest at 8% per annum and is subject to an origination fee of $640,000. The proceeds of the Loan will be used to repurchase a royalty on revenue of the Company held by Borinquen Container Corporation, and for general corporate purposes. Sapinda previously advanced to the Company Loan proceeds of $2,060,550. Additionally, Sapinda will advance $1,000,000 of the Loan principal to the Company two business days after execution of the Loan Agreement and an additional $2,200,024 will be advanced to the Company on or before Dec. 17, 2012; these amounts will be used for general corporate purposes. The remainder of the Loan principal, $10,739,426, will be used to repurchase the Royalty. The Loan will be due on June 17, 2014. Sapinda will have the right to convert the Loan and accrued interest into common stock of the Company at a rate of $0.0225 per share, after March 1, 2013. The Loan is secured by all of the intellectual property and other assets of the Company and by the Royalty. In the event of a default by the Company, Sapinda will have the right to purchase the Royalty from the Company by reducing the outstanding principal of the Loan in the amount of $10,739,426. Sapinda has previously advanced $2,000,000 under the Loan to Borinquen Container Corporation which will be credited against the purchase of the Royalty. A copy of the Loan and Security Agreement is available at: http://is.gd/qWD3TH About SecureAlert Inc. Sandy, Utah-based SecureAlert, Inc. (OTC BB: SCRA) -- http://www.securealert.com/-- is an international provider of electronic monitoring systems, case management and services widely utilized by more than 650 law enforcement agencies worldwide. In the auditors' report accompanying the consolidated financial statements for the fiscal year ended Sept. 30, 2011, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, noted that the Company has incurred losses, negative cash flows from operating activities and has an accumulated deficit. The Company's balance sheet at June 30, 2012, showed $22.73 million in total assets, $9.51 million in total liabilities, and $13.21 million in total equity. SHERIDAN GROUP: George Whaling Retires from Board of Directors -------------------------------------------------------------- George A. Whaling informed The Sheridan Group, Inc., of his retirement as a member of the Board of Directors of the Company, effective Dec. 5, 2012. There were no disagreements between him and the Company or any officer or director of the Company. About The Sheridan Group Hunt Valley, Maryland-based The Sheridan Group, Inc. -- http://www.sheridan.com/-- is a specialty printer offering a full range of printing and value-added support services for the journal, catalog, magazine and book markets. The Company reported a net loss of $8.96 million in 2011, compared with a net loss of $5.94 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $206.51 million in total assets, $177.24 million in total liabilities, and $29.27 million in total stockholders' equity. * * * As reported by the TCR on Sept. 16, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on Hunt Valley, Md.-based printing company The Sheridan Group Inc. to 'CCC+' from 'B-'. "The 'CCC+' corporate credit rating reflects Sheridan's ongoing thin margin of compliance with its minimum EBITDA covenant," said Standard & Poor's credit analyst Tulip Lim. "It also reflects our expectation of continued difficult operating conditions across the company's niche printing segments, its vulnerability to prevailing economic pressures, its high debt leverage, and the secular shift away from print media." In the April 2, 2011, edition of the TCR, Moody's Investors Service lowered the corporate family and probability of default ratings for The Sheridan Group, Inc., to B3 from B2 and to Caa1 from B3, respectively. Moody's believes that Sheridan will be able to service its debt, but the proposed capital structure affords the company with minimal ability to reduce leverage given expectations for modest free cash flow available for debt reduction and weak growth prospects. SHREEJI OIL: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Shreeji Oil Inc. dba Stop 24 Mart 700 S. Main Creve Coeur, IL 61610 Bankruptcy Case No.: 12-82690 Chapter 11 Petition Date: December 11, 2012 Court: U.S. Bankruptcy Court Central District of Illinois (Peoria) Judge: Thomas L. Perkins Debtor's Counsel: Sumner Bourne, Esq. RAFOOL, BOURNE & SHELBY, P.C. 411 Hamilton Boulevard, #1600 Peoria, IL 61602 Tel: (309) 673-5535 E-mail: sbnotice@mtco.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Pranav Patel, manager/director. SIRIUS XM: Moody's Lowers PDR to 'B1'; Outlook Stable ----------------------------------------------------- Moody's Investors Service upgraded Sirius XM Radio Inc.'s Speculative Grade Liquidity (SGL) Rating to SGL -- 1 from SGL -- 2 to reflect improved liquidity given the company's new $1.25 billion senior secured revolver facility, notwithstanding the near term potential for the funding of share repurchases with revolver advances, and affirmed the B1 corporate family rating. In addition, Moody's downgraded the Probability-of-Default Rating (PDR) to B1 from Ba3 to reflect the new bank and bond debt mix. Ratings on all other debt instrument were affirmed and the rating outlook is stable. Upgraded: Issuer: Sirius XM Radio Inc. Speculative Grade Liquidity Rating: Upgraded to SGL -- 1 from SGL -- 2 Affirmed: Issuer: Sirius XM Radio Inc. Corporate Family Rating: Affirmed B1 $800 million of 8.75% sr notes due 2015: Affirmed B1, LGD4 -- 57% (from LGD4 -- 60%) $700 million of 7.625% sr notes due 2018: Affirmed B1, LGD4 -- 57% (from LGD4 -- 60%) $400 million of 5.25% sr notes due 2022: Affirmed B1, LGD4 -- 57% (from LGD4 -- 60%) Downgraded: Issuer: Sirius XM Radio Inc. Probability of Default Rating: Downgraded to B1 from Ba3 Outlook: Issuer: Sirius XM Radio Inc. Outlook is Stable Ratings Rationale Sirius' B1 corporate family rating reflects moderate leverage with 3.2x debt-to-EBITDA as of September 30, 2012 (including Moody's standard adjustments). Improved leverage compared to 4.6x at FYE 2011, reflects an EBITDA increase of roughly 17% in combination with a $625 million debt reduction. Increases in the company's subscriber base to 23.4 million as of September 2012 from 21.9 million at December 2011 and improving operating margins contributed to higher EBITDA levels and free cash flow. The company successfully refinanced higher coupon debt in 2012 and currently has an average cost of roughly 7.5% compared to 9.3% at year end 2011. Looking forward, Moody's analysts expect deliveries of light vehicles to reach 14.5 million units in 2013 reflecting 3% to 4% growth over an estimated 14 million units for 2012. Growth in new vehicle deliveries and modest economic recovery should support net subscriber additions over the next 12 months. Moody's expects EBITDA in 2013 to increase above the $900 million level estimated for 2012 (including Moody' standard adjustments) accompanied by reduced capital spending in the years leading up to the next satellite launch cycle. Continued growth in the subscriber base will drive higher EBITDA levels and could better position the company to fund the next cycle of significant expenditures related to construction and launching of replacement satellites beginning as early as 2016 so long as share repurchases and dividends are maintained within prudent levels. On December 5, 2012, the company raised a new $1.25 billion senior secured revolver facility due 2017, and subsequently announced a special cash dividend of roughly $325 million, payable on December 28, 2012, and a $2 billion common share repurchase program. The dividend can be funded with balance sheet cash ($556 million as of September 30, 2012) while share repurchases are expected to be funded with revolver advances and operating cash flow over an extended period. Timing for share repurchases is currently uncertain; however, Moody's expects repurchases to be funded while maintaining leverage and coverage ratios within the B1 rating category including debt-to-EBITDA ratios of 4.25x (including Moody's standard adjustments) or better. The senior notes rank below the new $1.25 billion senior secured revolver and the B1 instrument rating on the $1.9 billion of senior notes is in line with the B1 corporate family rating. Moody's affirmed the B1 instrument rating on the senior notes although it is one notch above the implied rating indicated by the loss given default model. Moody's temporarily overrides the implied rating given the likelihood of changes to the debt structure over the rating horizon. The 7% exchangeable senior subordinated notes rank below the senior notes, and to the extent these subordinated notes are refinanced with senior debt instruments, erosion of the subordinated cushion could shift the ratings of the senior notes down one notch to B2. Conversely, to the extent the $1.25 billion senior secured debt instruments are reduced, there would be upward pressure on ratings for the senior notes. The stable outlook reflects Moody's view that Sirius will increase its subscriber base resulting in higher revenue and EBITDA. The outlook also incorporates Sirius maintaining good liquidity, even during periods of satellite construction, and the likelihood of share repurchases or additional dividends being funded from revolver advances as well as free cash flow. The outlook does not incorporate leveraging transactions or shareholder distributions that would negatively impact liquidity or sustain debt-to-EBITDA ratios above 4.25x (including Moody's standard adjustments). Event risk related to the timing or the final form of the company's eventual corporate structure including a controlling position by its largest shareholder, Liberty Media, or a potential tax free spin-off creates uncertainty. The stable outlook assumes that changes in the corporate structure will not adversely impact the company's operating strategy, credit metrics, or financial policies. Ratings could be downgraded if debt-to-EBITDA ratios are sustained above 4.25x (including Moody's standard adjustments) or if free cash flow generation falls below targeted levels as a result of subscriber losses due to a potentially weak economy or migration to competing media services, functional problems with satellite operations, or unplanned capital investments. A weakening of Sirius' liquidity position below expected levels as a result of dividends, share repurchases, capital spending, or a significant acquisition could also lead to a downgrade. Ratings could be upgraded if management demonstrates a commitment to balance debt holder returns with those of its shareholders. Moody's would also need assurances that the company will operate in a financially prudent manner consistent with a higher rating including sustaining debt-to-EBITDA ratios below 3.5x (including Moody's standard adjustments) and free cash flow-to-debt ratios above 15% even during periods of satellite construction. The principal methodology used in rating Sirius was the Global Broadcast and Advertising Related Industry Methodology published in May 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Sirius XM Radio Inc., headquartered in New York, NY, provides satellite radio services in the United States and Canada. The company offers a programming lineup of more than 135 channels of commercial-free music, sports, news, talk, entertainment, traffic, weather, and data services. Sirius also provides music channels that offer genres ranging from rock, pop and hip-hop to country, dance, jazz, Latin, and classical; sports channels; talk and entertainment channels; comedy channels; national, international, and financial news channels; and religious channels. Sirius XM is publicly traded with Liberty Media Corporation recently increasing its potential ownership interest to just under 50%. Sirius had 23.4 million subscribers as of September 30, 2012 and generated revenue of $3.3 billion for the trailing 12 months ended September 30, 2012. SIRIUS XM: S&P Keeps 'BB' Rating on Senior Unsecured Debt --------------------------------------------------------- Standard & Poor's Ratings Services assigned New York City-based satellite radio company Sirius XM Radio Inc.'s (BB/Stable/--) $1.25 billion senior secured revolving credit facility due 2017 our 'BBB-' issue-level rating (two notches above its 'BB' corporate credit rating on the company), with a recovery rating of '1'. "The '1' recovery rating reflects our expectation of very high (90% to 100%) recovery in the event of a payment default. The 'BB' rating on the company's senior unsecured debt, with a recovery rating of '3' and 'BB' rating on its subordinated debt, with a recovery rating of '4' are not affected by the proposed addition of secured debt in the capital structure, based on our expectation of slightly better creditor recovery prospects, given consistent subscriber additions and stable churn, despite price increases," S&P said. "Sirius announced a special dividend of about $325 million payable on Dec. 28, 2012, which will reduce excess cash balances, and announced a $2 billion common stock repurchase program. The timing and magnitude of share repurchases have not been determined. We expect Sirius XM to fund the share repurchase program through discretionary cash flow and periodic borrowings under its revolving credit facility," S&P said. "The rating on Sirius incorporates our expectation that leverage will not increase above our 4.5x target despite the announcement of these moves to boost shareholder returns, because of its good operating outlook and growing discretionary cash flow. We assess Sirius' business risk profile as 'fair' (based on our criteria), reflecting its relative stability, its dependence on U.S. auto sales and consumer discretionary spending for growth, and its longer-term exposure to competition from alternative media. We view Sirius XM's financial risk as 'significant' because of the company's announced special dividend and share repurchase program," S&P said. "Our rating outlook is stable, reflecting our view that a continued recovery in auto sales, together with the January 2012 12% price increase (implemented as subscriber contracts expire), should spur growth over the next year and maintain leverage consistent with our threshold for the rating," S&P said. RATING LIST Sirius XM Radio Inc. Corporate credit rating BB/Stable/-- Rating Assigned $1.25 bil. sr sec. revolver due 2017 BBB- Recovery rating 1 SORENSON COMMS: Moody's Assigns '(P)Caa2' CFR; Outlook Stable ------------------------------------------------------------- Moody's Investors Service assigned to Sorenson Communications, Inc., a provisional (P)Caa2 Corporate Family rating. Provisional instrument ratings of (P)B1 were assigned to the proposed Senior Secured Revolving Credit Facility, (P)B2 to the proposed Senior Secured Term Loan and First Lien Senior Secured Notes and (P)Caa3 to its proposed Exchange Notes. The provisional ratings reflect an assumed 54% pay-down and exchange of the existing $795 million 10.5% Senior Secured Notes due 2015 with cash and the new 12% Exchange Notes due 2020. Should holders of more than 85% of the $795 million of 10.5% Senior Secured Notes due 2015 agree to exchange, a one notch upgrade to the CFR and instrument ratings (other than the Senior Secured Revolving Credit Facility) would be likely. The ratings will remain provisional until the exchange offer has concluded. The rating outlook is stable. Ratings Rationale The (P)Caa2 Corporate Family rating (CFR) is primarily driven by the risk of material Video Relay Services (VRS) reimbursement rate cuts by the Federal Communications Commission's (FCC) Telecommunications Relay Services (TRS) Fund, which is the source of virtually all of Sorenson's revenue, and medium term restructuring risk if a substantial portion of the existing notes due 2015 are not exchanged. Higher than anticipated rate reductions would adversely impact revenue and profitability, driving debt to EBITDA above 7 times, a level which is consistent with other issuers in the Caa category. The presumed 54% exchange offer acceptance rate is equal to the amount of acceptances already received as disclosed in the publicly-filed exchange offer documents, and therefore assumes no other holders agree to the exchange. In such a scenario, the 10.5% Senior Secured Notes due 2015 remaining outstanding would create medium term liquidity pressure, likely leading Sorenson to engage in future restructuring activity. If the exchange offer acceptance rate is at least 85%, Moody's anticipates Sorenson would have available cash sources to repay the remaining 10.5% Senior Secured Notes at maturity in 2015, providing support for a CFR upgrade to Caa1. Further support for the ratings comes from Sorenson's dominant share of the VRS market, history of cash flow generation, solid EBITDA margins and the potential for growth from new products serving the hard of hearing telephone market. The stable outlook reflects Moody's expectation of moderate revenue growth in 2013 driven by new products for the hard of hearing partially offset by lower VRS reimbursement rates. Given the uncertainty related to future VRS reimbursement rates, Moody's base case expectation is for annual mid to high single digit reductions in VRS reimbursement rates by the FCC. The VRS subscriber count and utilization of Sorenson's VRS services should remain steady over the next few years. The CFR could be raised to Caa1 if the exchange offer is accepted by at least 85% of holders of the 10.5% Senior Secured Notes due 2015. The ratings could also be upgraded if the FCC adopted a long-term rate structure that mitigates the risk of near term profitability declines such that Moody's comes to expect debt to EBITDA to be sustained at about 6 times and free cash flow to debt at about 3%. A downgrade could occur if VRS rate cuts are more severe than anticipated leading to impaired liquidity and a heightened probability of default. Ratings and LGD Assessments Assigned: Senior Secured Revolving Credit Facility due 2018, (P)B1 (LGD1, 1%) Senior Secured Term Loan due 2020, (P)B2 (LGD2, 21%) First Lien Senior Secured Notes due 2020, (P)B2 (LGD2, 21%) Exchange Notes due 2020, (P)Caa3, (LGD4, 64%) The principal methodology used in rating Sorenson was the Global Business & Consumer Service Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Sorenson is the leading provider of IP-based video communication technology and services to the deaf and hard of hearing. The company's sign language interpreters join telephone calls by or to deaf customers via its videophones. The service is provided free of charge to qualified deaf individuals as mandated by the Americans with Disabilities Act of 1990. Moody's expects 2013 revenues of over $500 million. SOUTH COUNTY HOSPITAL: Moody's Affirms 'Ba1' Bond Rating -------------------------------------------------------- Moody's Investors Service has affirmed the Ba1 long-term ratings assigned to South County Hospital's (SCH) $37.4 million of outstanding bonds. The outlook is revised to positive from stable. Summary Rating Rationale The affirmation of the Ba1 bond rating and revision of the outlook to positive reflect SCH's favorable financial performance in the last two fiscal years with operating surpluses and improving cash flow generation which improved debt coverage ratios and aided unrestricted cash growth. Furthermore, the affirmation incorporates the hospital's strong market share in a demographically favorable service area. These attributes are offset by SCH's small size, flat inpatient admission growth, and vulnerability to physician departures given the small size of the medical staff. The hospital has been challenged by a risky debt profile and investment allocation; however management has made recent changes that improve the level of risk for these credit aspects over the near term, although the outstanding interest rate swap continues to impair further cash growth due to required collateral postings. Strengths * Two years of improved financial performance in unaudited fiscal year (FY) 2012 and FY 2011 with consecutive years of operating surpluses and improving operating cash flow margins with 9.5% (bad debt is classified as a revenue deduction in FY 2012) and 8.7%, respectively, compared to the 6.8% and 6.3% operating cash flow margins reported in fiscal years 2010 and 2009, respectively * Continued improvement in debt coverage measures attributable to favorable operating performance in FY 2012 and continued debt pay down; debt-to-cash flow improved to 3.5 times in FY 2012 from 4.3 times in FY 2011 and maximum annual debt service (MADS) coverage improved to 4.0 times in FY 2012 from 3.6 times in FY 2011 * Growth in unrestricted cash and investments to $43 million or 131 days cash on hand at fiscal yearend (FYE) 2012 from $40 million or 121 days cash at FYE 2011, favorable to the below Baa median of 84 days * Leading market share (51%) in primary service area, Rhode Island with limited competition, the nearest hospitals are approximately a 30 minute drive away; market share has remained stable in recent years * Favorable demographics in Washington County, RI with unemployment rate below state level and high median household incomes above the state and national levels; the service area also benefits from a diversified employment market with University of Rhode Island's as the largest employer and a strong summer vacation season; Medicaid represents a low 5.5% and commercial payors represent a good 45% of the gross payor mix in FY 2012 * Favorable payor mix with approximately 45.5% of gross revenue from commercial payers, 45.1% Medicare and low 5.5% Medicaid Challenges * Small sized community hospital (with just under 5,000 admissions and $130 million in operating revenue compared to the all ratings median admissions of 22,267 and operating revenue of $502 million) leaving the hospital susceptible to variability in financial performance and physician departures * Debt structure risk with 100% of outstanding bonds in variable rate mode, leaving the hospital vulnerable to interest rate risk but no put risk; Moody's notes, however, that the new agreement with Radian, the sole bondholder, for Series 2006A bonds is for five years and Series 2003A&B bonds have been refinanced with five-year term bank qualified loans with Washington Trust and Royal Bank of Scotland/Citizens Bank; the variable interest rate formula is the same for all series of bonds * Atypical investment portfolio with target allocations of 60% to equity and alternative investments and 40% to cash and fixed income investments compared to the average for Baa rated credits of 21% and 72%, respectively; recently the hospital reports that it has reduced its investments in alternatives to 10% as of December 31, 2012 but Moody's continues to view the high allocation to equities as a risk for this small sized provider Outlook The positive outlook reflects a second year of favorable financial performance, improved debt coverage ratios and growth in absolute unrestricted cash and investments. With its strong market position, favorable service area and payor mix and employed medical staff, Moody's believes the hospital should be able to maintain and improve the current level of performance. The degree to which management is able to sustain the current level of performance in FY 2013 could affect future rating action. What Could Make The Rating Go UP Sustained improvement in financial performance in FY 2013 and beyond; continued growth in cash flow improving debt coverage ratios; growth in inpatient and surgical volumes; continued gains in unrestricted cash and investments What Could Make The Rating Go DOWN Downturn in financial performance; decline in liquidity; increase in debt load without commensurate increase in cash flow Rating Methodology The principal methodology used in this rating was Not-For-Profit Healthcare Rating Methodology published in March 2012. SPANSION INC: Wins OK on $24MM Patent Settlement With Tessera ------------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that a Delaware bankruptcy judge approved Spansion Inc.'s $24 million settlement of patent infringement claims brought by Tessera Inc., tying up one of the last loose ends from the flash memory maker's 2010 reorganization. Bankruptcy Law360 relates that the settlement takes care of Tessera's outstanding claim in the bankruptcy and facilitates a broader deal resolving lawsuits in California federal court and before the U.S. International Trade Commission that accused Spansion of infringing Tessera patents for small-format semiconductor packaging technology. About Spansion Spansion Inc. -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 bankruptcy on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On Feb. 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, served as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, served as the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee appointed an official committee of unsecured creditors in the case. As of Sept. 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Spansion submitted its first plan of reorganization on Oct. 26, 2009, and gained approval from the U.S. Bankruptcy Court on its amended disclosure statement on Dec. 22, 2009. Spansion received confirmation from the U.S. Bankruptcy Court for its plan on April 16, 2010, and emerged from Chapter 11 protection May 10, 2010. Spansion entered Chapter 11 reorganization with more than $1.5 billion in debt. Spansion emerged a well-capitalized company with less than $480 million in debt and roughly $230 million in cash, which is supplemented with an undrawn credit line of up to $65 million. SPEEDEMISSIONS INC: Buys 5 Emission Testing Centers for $425,000 ---------------------------------------------------------------- Speedemissions, Inc., completed the acquisition of certain operating assets comprising five emission testing centers owned by Auto Emissions Express, LLC. AEE owns and operates 11 emission testing centers in the Atlanta, Georgia area, including the five the Company purchased. After taking into consideration the acquisition of these five emission testing centers, the Company now operates 43 emissions testing centers in the Atlanta, Georgia; Houston, Texas; St. Louis, Missouri and Salt Lake City, Utah metropolitan areas, plus four mobile units in the Atlanta, Georgia area. In exchange for these operating assets, the Company paid AEE $425,000 on Nov. 30, 2012. The shareholders of AEE were unrelated to the Company and its affiliates, and the purchase price was determined by arms-length negotiations. The purchase price was paid in cash by the Company using funds available under the Company's existing credit agreement with TCA Global Master Credit, LP. A copy of the Asset Purchase Agreement is available at: http://is.gd/o7IpM9 About Speedemissions Tyrone, Georgia-based Speedemissions, Inc., is a test-only emissions testing and safety inspection company. The Company reported a net loss of $1.6 million in 2011, compared with a net loss of $2.2 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $2.15 million in total assets, $978,772 in total liabilities, $4.57 million in series A convertible, redeemable preferred stock, and a $3.40 million total shareholders' deficit. After auditing the 2011 results, Habif, Arogeti & Wynne, LLP, in Atlanta, Georgia, expressed substantial doubt about Speedemissions' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has a capital deficiency. STERLING INVESTORS: A.M. Best Places 'B' FSR Under Review --------------------------------------------------------- A.M. Best Co. has placed under review with developing implications the financial strength rating of B (Fair) and issuer credit rating of "bb+" of Sterling Investors Life Insurance Company (Sterling) (Rome, GA). Sterling was a wholly owned subsidiary of Sterling Holdings, Inc. (Sterling Holdings), which in turn was owned 50-50 by the Joanne Yancey Residual Trust and M&D Holdings. The under review status reflects Puritan Financial Companies, Inc's recent purchase of Sterling Holdings and its subsidiary, Sterling. Puritan is a multi-state, diversified financial services company that includes two life insurance companies, Puritan Life Insurance Company and Puritan Life Insurance Company of America, a broker-dealer and regional network of agents. Sterling will continue to market senior life/health insurance products, including Medicare supplement insurance, which represents the majority of its premium and income. Sterling's ratings will remain under review with developing implications until A.M. Best meets with the company's new owners and management. SUPERMEDIA INC: Reaches Agreement With Lender Steering Committee ---------------------------------------------------------------- Dex One Corporation and SuperMedia Inc. have reached an agreement with a steering committee representing senior lenders of both companies on a revised set of amendments to the companies' credit agreements as part of their proposed merger. As a result, the companies have also entered into an Amended and Restated Merger Agreement. The credit agreement amendments will: * Uphold the basic economic terms and strategic merits of the merger as initially announced; * Preserve the interests of all investors without any dilution; and * Extend the maturity dates of the companies' senior secured debt up to 26 months until Dec. 31, 2016. Following the initial announcement of the proposed merger in August 2012, the lender steering committee was formed to evaluate the proposed amendments to the companies' respective credit agreements. The existing senior credit agreements for both companies require 100% approval from the senior lenders for the amendments, and the companies are working with the steering committee to obtain the requisite approval from the remaining senior lenders. The steering committee has unanimously agreed to support the revised credit agreement amendments. As previously disclosed, in the event the companies obtain sufficient, but not unanimous, support from the remaining lenders, either or both companies may seek to finalize credit agreement amendments and complete the merger by means of a pre-packaged bankruptcy. Dex One and SuperMedia will also seek approval from their respective shareholders for the proposed merger and the pre- packaged bankruptcy plan, if the pre-packaged plan becomes necessary to secure the credit agreement amendments. The merger is expected to be completed in the first half of 2013. A copy of the Amended Plan of Merger is available at: http://is.gd/wuJqyN About Idearc Inc. Headquartered in D/FW Airport, Texas, Idearc, Inc., now known as SuperMedia Inc., is the second largest U.S. yellow pages publisher. Idearc was spun off from Verizon Communications, Inc. Idearc and its affiliates filed for Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 09-31828) on March 31, 2009. The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represented the Debtors in their restructuring efforts. The Debtors tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their claims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on the official committee of unsecured creditors. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. Idearc completed its debt restructuring and its plan of reorganization became effective as of Dec. 31, 2009. In connection with its emergence from bankruptcy, Idearc changed its name to SuperMedia Inc. Under its reorganization, Idearc reduced its total debt from more than $9 billion to $2.75 billion of secured bank debt. Less than two years since leaving bankruptcy protection, SuperMedia remains in quandary. Early in October 2011, Moody's Investors Service slashed its corporate family rating for SuperMedia to Caa1 from B3 prior. The downgrade reflects Moody's belief that revenues will continue to decline at a double digit rate for the foreseeable future, leading to a steady decline in free cash flow. SuperMedia's sales were down 17% for the second quarter of 2011 in a generally improving advertising sector. Moody's ratings outlook for SuperMedia remains negative. While SuperMedia is attempting to transition the business away from its reliance on print advertising through development of online and mobile directory service applications, Moody's is increasingly concerned that the company will not be able to make this change quickly enough to stabilize the revenue base over the intermediate term. Further, the high fixed cost nature of SuperMedia's business could lead to steep margin compression, notwithstanding continued aggressive cost management. SUPERMEDIA INC: Restructuring Capital Holds 10.8% Equity Stake -------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Restructuring Capital Associates, L.P., and its affiliates disclosed that, as of Dec. 11, 2012, they beneficially own 1,691,766 shares of common stock of Supermedia Inc. representing 10.8% of the shares outstanding. Restructuring Capital previously reported beneficial ownership of 1,745,090 common shares or an 11.3% equity stake as of Dec. 31, 2011. A copy of the amended filing is available at http://is.gd/LX9u8M About Idearc Inc. Headquartered in D/FW Airport, Texas, Idearc, Inc., now known as SuperMedia Inc., is the second largest U.S. yellow pages publisher. Idearc was spun off from Verizon Communications, Inc. Idearc and its affiliates filed for Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 09-31828) on March 31, 2009. The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represented the Debtors in their restructuring efforts. The Debtors tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their claims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on the official committee of unsecured creditors. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. Idearc completed its debt restructuring and its plan of reorganization became effective as of Dec. 31, 2009. In connection with its emergence from bankruptcy, Idearc changed its name to SuperMedia Inc. Under its reorganization, Idearc reduced its total debt from more than $9 billion to $2.75 billion of secured bank debt. Less than two years since leaving bankruptcy protection, SuperMedia remains in quandary. Early in October 2011, Moody's Investors Service slashed its corporate family rating for SuperMedia to 'Caa1' from 'B3' prior. The downgrade reflects Moody's belief that revenues will continue to decline at a double digit rate for the foreseeable future, leading to a steady decline in free cash flow. SuperMedia's sales were down 17% for the second quarter of 2011 in a generally improving advertising sector. Moody's ratings outlook for SuperMedia remains negative. While SuperMedia is attempting to transition the business away from its reliance on print advertising through development of online and mobile directory service applications, Moody's is increasingly concerned that the company will not be able to make this change quickly enough to stabilize the revenue base over the intermediate term. Further, the high fixed cost nature of SuperMedia's business could lead to steep margin compression, notwithstanding continued aggressive cost management. STRATEGIC AMERICAN: Add'l Results for Namibia Concession Out ------------------------------------------------------------ Duma Energy, formerly Strategic American Oil Corporation, has received from Hydrocarb Energy Corporation additional results from a recent field outcrop study on its 5.2 million acre concession in northern Namibia. Final lab analyses have indicated significant reservoir porosity as well the presence of degraded crude oil. In-house resource estimates at the structural Oponono Prospect range from 235 million (P90) up to a potential 1.1 billion (P10) barrels of oil. P50 resources at Oponono Prospect are estimated at 650 million barrels of oil. Additional prospects have been identified including reefs and several structural traps. Reservoir rock outcrop studies have indicated good lateral extent, thickness, and porosity of target reservoir facies. Porosities in the primary carbonate reservoir objective, Huttenberg Formation, exceed 36% total porosity and range from 22% - 37%. The partnership is encouraged by the results of the initial prospect evaluation. Oil from probable carbonate sources has been detected in soil samples collected at the previously drilled and tested Etosha 5-1A well and were analyzed and identified by Weatherford Laboratories in Houston, Texas. The concession blocks (1714A, 1715, 1814A, 1815A) are located in the under-explored and highly prospective Owambo Basin, operated by Hydrocarb Energy and held with partners, Duma Energy with a 39% working interest and Namcor with 10%. Pasquale Scaturro, President and COO of Hydrocarb, commented, "We believe the Owambo Basin has all the ingredients to become a major new hydrocarbon province. We've discovered several new prospects and significant progress has been made towards identifying source and reservoir rocks. Hydrocarb Energy Corporation is continuing with its aggressive work program, including an airborne magnetic and gravity survey and the planning of new two-dimensional seismic data." "This marks another milestone for our 5.3 million-acre concession in the Republic of Namibia in southern Africa," stated Jeremy G. Driver, chief executive officer of Duma Energy. "The resources of the Namibian concession increasingly appear to have the potential to add significant value to Duma and its shareholders. We remain very encouraged by the results and look forward to providing our shareholders with even greater insight into these project developments as they become available." About Strategic American Corpus Christi, Tex.-based Strategic American Oil Corporation (OTC BB: SGCA) -- http://www.strategicamericanoil.com/-- is a growth stage oil and natural gas exploration and production company with operations in Texas, Louisiana, and Illinois. The Company's team of geologists, engineers, and executives leverage 3D seismic data and other proven exploration and production technologies to locate and produce oil and natural gas in new and underexplored areas. The Company's balance sheet at July 31, 2012, showed $25.78 million in total assets, $13.47 million in total liabilities and $12.30 million in total stockholders' equity. Duma Energy incurred a net loss of $4.57 million for the year ended July 31, 2012, compared with a net loss of $10.28 million during the prior fiscal year. TCF FINANCIAL: Fitch Rates $115-Mil. Series B Pref. Stock 'B+' -------------------------------------------------------------- Fitch Ratings has assigned a 'B+' rating to TCF Financial Corporation's (TCB) $115 million non-cumulative perpetual preferred issuance. Quarterly coupons are payable on March 1, June 1, Sep. 1 and Dec. 1 of each year (commencing on March 1, 2013). The securities are perpetual but are callable on the X day of March, June, September, and December beginning Dec. 19, 2017. Bank hybrid securities, such as this preferred issuance, are typically notched down from the issuing entity's Viability rating ('bbb' in the case of TCB). The notch differential reflects an assessment of loss severity of the preferred issuance relative to the average recoveries assumed for a typical bank senior debt instrument. The differential is also indicative of incremental non-performance risk. In this case, the hybrid instrument is rated five notches lower than TCB's Viability rating. This reflects the designed loss- absorbing nature of the preferred stock as well as its non- cumulative or deferral feature. Proceeds of the offering are intended to increase TCB's regulatory capital levels and for general corporate purposes. TELEDRAFT INC: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Teledraft, Inc. P.O. Box 11672 Tempe, AZ 85284 Bankruptcy Case No.: 12-26289 Chapter 11 Petition Date: December 11, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Jon S. Musial, Esq. LAW OFFICE OF JON S. MUSIAL 8230 E. Gray Road Scottsdale, AZ 85260 Tel: (480) 951-0669 Fax: (602) 922-0653 E-mail: jon.musial@azbar.org Scheduled Assets: $3,905,164 Scheduled Liabilities: $2,324,762 A copy of the Company's list of its 11 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/azb12-26289.pdf The petition was signed by Al Slaten, president. THERMOENERGY CORP: Obtains $3.7-Mil. Bridge Loan from Investors --------------------------------------------------------------- ThermoEnergy Corporation, on Nov. 30, 2012, entered into a Bridge Loan Agreement with a group of investors, all of whom are holders of the Company's Series B Convertible Preferred Stock pursuant to which the Investors made loans to the Company in the aggregate principal amount of $3,700,000: Investor Loan Amount --------------- --------------- Robert S. Trump $1,500,000 Empire Capital Partners, L.P. $500,000 Empire Capital Partners, Ltd. $500,000 Empire Capital Partners Enhanced Master Fund, Ltd $500,000 Focus Fund $450,000 The Quercus Trust $250,000 The Loans were made in anticipation of the Company's designation, offer and issuance of a new series of Preferred Stock to be designated as Series C Convertible Preferred Stock which will have rights, including liquidation rights, senior to the rights of the Series B Stock. The Company intends to call a meeting of shareholders to consider and act upon a proposal to effect certain amendments to its Certificate of Incorporation including amending the terms of the Series B Stock and authorizing the Series C Stock. In connection with that meeting, the Company will prepare and distribute to its shareholders a proxy statement setting forth the text of the proposed amendments to its Certificate of Incorporation and other relevant information. About ThermoEnergy Corporation Little Rock, Ark.-based ThermoEnergy Corporation is a clean technologies company engaged in the worldwide development of advanced municipal and industrial wastewater treatment systems and carbon reducing clean energy technologies. After auditing the 2011 results, Grant Thornton LLP, in Boston, Massachusetts, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company incurred a net loss for the year ended Dec. 31, 2011, and, as of that date, the Company's current liabilities exceeded its current assets by $3,387,000 and its total liabilities exceeded its total assets by $4,603,000. The Company reported a net loss of $17.38 million in 2011, compared with a net loss of $14.85 million during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $3.85 million in total assets, $13.06 million in total liabilities, and a $9.21 million total stockholders' deficiency. TOPS HOLDING: Prices $460 Million of 8.875% Senior Secured Notes ---------------------------------------------------------------- Tops Holding Corporation and Tops Markets, LLC, have priced their $460 million in aggregate principal amount of 8.875% senior secured notes due 2017. The net proceeds from this offering and borrowings under the Company's proposed new asset based loan facility are expected to be used to repurchase any and all of the Issuers' existing $350 million senior secured notes due 2015 tendered pursuant to the previously announced tender offer by the Issuers and to pay a dividend to the Company's stockholders. The Senior Secured Notes have not been registered under the Securities Act of 1933, as amended, or applicable state securities laws and may not be offered or sold in the United States absent registration under those laws or applicable exemptions from those registration requirements. About Tops Markets Privately owned Tops Markets, LLC headquartered in Williamsville, New York, operates a chain of 71 owned Tops supermarkets and 5 franchised stores ("legacy stores") in western New York state, with approximately $1.7 billion of annual revenues. In February 2010, Tops acquired 79 stores from the bankruptcy estate of Penn Traffic. Tops continues to operate 55 stores, of which 7 may sold or closed as a result of a preliminary FTC order. The remaining 48 stores are in the final process of being re-branded as Tops stores. Tops' primary markets have historically been the Buffalo and Rochester metro areas, and will expand to the south and east with the acquisition of the Syracuse-based Penn Traffic stores. The company is 75% owned by Morgan Stanley Capital Partners, with remaining ownership held largely by a unit of HSBC and company management. The Company's balance sheet at Oct. 6, 2012, showed $661.49 million in total assets, $705.22 million in total liabilities and a $43.73 million total shareholders' deficit. * * * In the Nov. 25, 2011, edition of the TCR, Moody's Investors Service upgraded the Corporate Family and Probability of Default Ratings of Tops Holding Corporation ("Tops") to B3 from Caa1. Tops Corporate Family Rating of B3 reflects the company's weak credit metrics, its modest size relative to competitors, regional concentration and aggressive financial policies. The rating is supported by its stable operating performance in a challenging business and competitive environment, its good regional market presence and its good liquidity. As reported by the TCR on April 30, 2012, Standard & Poor's Ratings Services raised its ratings on Buffalo, N.Y.-based Tops Holdings Corp., including the corporate credit rating to 'B+' from 'B'. "The upgrade primarily reflects our revised view of the company's financial risk profile as 'aggressive' from 'highly leveraged,'" said Standard & Poor's credit analyst Charles Pinson-Rose. TRANSFIRST HOLDINGS: S&P Affirms 'B' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' rating on TransFirst Holdings Inc. The outlook remains stable. "We also assigned our 'B' issue rating and '3' recovery rating to the proposed first-lien term loan and revolving credit facility and our 'CCC+' issue rating and '6' recovery rating to the proposed second-lien term loan. The '3' recovery rating indicates our expectation for meaningful (50% to 70%) recovery in the event of a default, and the '6' recovery rating indicates our expectation for negligible (0% to 10%) recovery in the event of a default. These three types of debt make up the $650 million credit facility," S&P said. "The ratings reflect the company's 'weak' business risk profile as a result of its limited operating scale, as well as its 'highly leveraged' financial risk profile," S&P said. "We expect the company to maintain 'adequate' liquidity from internal and external sources," said Standard & Poor's credit analyst John Moore. "The rating outlook is stable, reflecting TransFirst's steady and improving operations, and predictable cash flow generation, which lead us to believe credit measures will remain fairly stable over the coming 12 months. The company's highly leveraged financial profile and accretion of the preferred stock, which we include as debt for analytical purposes, limits a possible upgrade," S&P said. "Deterioration of operating metrics, because of competitive pricing pressure or an increase in merchant attrition that signals a decline in profitability, could lead to a downgrade. A downgrade could also result from a large debt-financed acquisition, which increases leverage to over 10x," S&P said. TRIBUNE CO: Suit vs. Workers, Investors to Remain After Exit ------------------------------------------------------------ American Bankruptcy Institute reported that thousands of former employees and shareholders will remain stuck in litigation with Tribune even after its exit from bankruptcy. Lynne Marek, writing for Crain's Chicago Business, noted that Tribune's Plan of Reorganization, while partially paying off creditors, lets some creditors to revive litigation to squeeze the employees and shareholders for additional payment. About 50 cases filed in state and federal courts nationwide have been consolidated in New York but were on hold during the past two years, pending Tribune's emergence, the report related. The lawsuit pertains to Tribune's $8 billion leveraged buyout in 2007 led by current Tribune Chairman Sam Zell and former CEO Dennis FitzSimons. That buyout, according to creditors, led the saddled the company with $13 billion in debt, the report pointed out. Aside from former Tribune directors and executives, also caught in the dragnet are rank-and-file employees who sold stock or collected deferred compensation in the LBO and even elderly investors who long ago bought Tribune stock, Crain's Chicago Business added. Creditors include companies that held Tribune debt before the LBO and unsecured creditors in the bankruptcy case, the report said. In some cases, creditors have said that only people who sold more than $100,000 in stock would be subject to their claims, while in other cases only those who sold $50,000 would be, the report noted. The litigation, according to Abraham Neuhaus, a New York lawyer defending asset manager Karlin Holdings L.P., is a complicated one that could last many years, Crain's Chicago Business cited. The report also related that Marc Kirschner, a New York-based lawyer who heads the trust created to pursue the creditors' claims, formally will step into his role after Tribune exits bankruptcy, likely making new decisions as to how the cases will proceed. U.S. District Judge William Pauley III, who is overseeing the litigation in New York, will decide in March next year whether to dismiss the cases against some or all of the members of the broader group of stockholders. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Wins Approval of Settlement With EZ Buy, 2 Others ------------------------------------------------------------- Tribune Co. obtained an order from the U.S. Bankruptcy Court for the District of Delaware approving a settlement of claims with EZ Buy & EZ Sell Recycler Corp. and two other claimants. EZ Buy, Wilshire Classifieds LLC and Target Media Partners Operating Company LLC filed eight claims against Tribune and two of its subsidiaries to recover more than $3 million. Meanwhile, Wilshire reportedly owes Tribune more than $1.3 million while Target Media owes $387,234 to the company and Los Angeles Times Communications LLC. The claims stemmed from various transactions entered into by the companies, including the sale of Tribune's shares in EZ Buy to Wilshire in 2007. Under the deal, the parties agreed to release each other from all claims arising from their various transactions. The agreement also terminates the parties' obligations or the amounts due under those transactions. A copy of the settlement agreement can be accessed for free at http://is.gd/TTylTE About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Has OK of Deal With New Line and Warner Bros. --------------------------------------------------------- Tribune Co. obtained court approval of a deal with New Line Television Inc. and Warner Bros. Television Distribution Inc. The deal calls for the settlement of claims filed by New Line and Warner Bros. The claimants seek to recover more than $21,892,695 from their various television programming agreements with the Tribune subsidiaries. Under the terms of the agreement, the claims of New Line and Warner Bros. will be allowed in the reduced amount of $21,778,906. Meanwhile, any distribution made to Warner Bros. under Tribune's Chapter 11 plan will be reduced by $869,455, which the former owes to Tribune Broadcasting Co. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Bank Debt Trades at 17% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Tribune Co. is a borrower traded in the secondary market at 83.48 cents-on-the- dollar during the week ended Friday, Dec. 14, 2012, an increase of 1.15 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank loan matures on May 17, 2014. The loan is one of the biggest gainers and losers among 193 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRILOGY ENERGY: DBRS Finalizes 'B' Provisional Rating ----------------------------------------------------- DBRS has finalized its provisional rating of B on Trilogy Energy Corp.'s $300 million of 7.25% Senior Unsecured Notes due December 13, 2019 (the Notes, with a recovery rating of RR4), as well as the Company's provisional Issuer Rating of B, both with Stable trends. The Notes will rank pari passu with any future senior unsecured indebtedness of the Company. DBRS understands that the net proceeds from the issuance will be used to pay down indebtedness under Trilogy's Senior Secured Credit Facility. TXU CORP: Bank Debt Trades at 27% Off in Secondary Market --------------------------------------------------------- Participations in a syndicated loan under which TXU Corp., now known as Energy Future Holdings Corp., is a borrower traded in the secondary market at 72.84 cents-on-the-dollar during the week ended Friday, Dec. 14, 2012, an increase of 4.11 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 350 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2014, and carries Standard & Poor's 'CCC' rating. The loan is one of the biggest gainers and losers among 193 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. The Company's balance sheet at Dec. 31, 2011, showed $44.07 billion in total assets, $51.83 billion in total liabilities, and a $7.75 billion total deficit. Energy Future had a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. * * * In late January 2012, Moody's Investors Service changed the rating outlook for Energy Future Holdings Corp. (EFH) and its subsidiaries to negative from stable. Moody's affirmed EFH's Caa2 Corporate Family Rating (CFR), Caa3 Probability of Default Rating (PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1 senior secured rating for Oncor. EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited flexibility. EFH's capital structure is complex and, in our opinion, untenable which calls into question the sustainability of the business model and expected duration of the liquidity reserves. UFOOD RESTAURANT: Files for Chapter 11 to Resolve Cash Woes ----------------------------------------------------------- UFood Restaurant Group, Inc. and its wholly owned subsidiaries sought Chapter 11 bankruptcy protection (Bankr. D. Mass. Lead Case No. 12-19702) on Dec. 14, 2012, in order to preserve its operations and to resolve its liquidity issues in the face of the slow recovery from the current economic downturn. Other members of the UFood group (including its affiliates and franchised stores in Massachusetts, Ohio, Texas, Utah and Maryland) have not filed for protection. The Company's financial troubles stem from a number of factors that prevented the anticipated growth and caused some of the Company's stores to be unprofitable for a significant period of time resulting in the Company's current liquidity problems. The Company will pursue a plan of reorganization to capitalize on opportunities for future growth and profitability including the evaluation of any underperforming stores, strengthening its brand strategies and the restructuring of its financial obligations along with the strengthening of its balance sheet and capital structure. The Company has obtained a financing facility that is likely to be sufficient to support it during the chapter 11 process and the Company's restructuring plan has the support of its lenders. Day-to-day operations and business will continue throughout the country as the Company continues to provide its customers with the highest quality and healthiest food at the most reasonable price. The Chapter 11 process will provide the Company with the opportunity to restructure its finances and execute on its business model to provide sustainable profits and long-term growth. The Company looks forward to continuing its relationships with its customers, vendors and franchisees in the process of shaping the long term success of the UFood brand. Any questions should be directed to the Company's attorney: Thomas H. Curran, Esq. McCARTER & ENGLISH, LLP 265 Franklin St. Boston, MA 02110 Tel: (617) 449-6500 UNI-PIXEL INC: To Develop Next-Generation Touch Screens ------------------------------------------------------- UniPixel, Inc., has joined forces with a manufacturer of personal computers to develop and introduce products that feature next- generation touch screens based on UniPixel's UniBoss pro-cap, multi-touch sensor film. UniPixel has granted the PC maker a limited exclusive license in the notebook market segment for UniBoss Performance Engineered Film technology that provides the licensee priority development, dedicated production capacity and preferred pricing. The license can be extended to the PC maker's supply chain, including third- party manufacturing partners, touch panel module manufactures, controller manufactures, LCD makers and original design manufacturers. The terms of the agreement and name of the PC maker are confidential. "The preferred price and capacity license agreement furthers UniPixel's stated go-to-market strategy," said UniPixel president & CEO, Reed Killion. "Our strategy includes offering reduced pricing, dedicated production capacity and limited exclusives to licensees, while enabling UniPixel to expand production capacity." "The license agreement also represents a major step towards worldwide commercialization of our UniBoss touch screen technology," continued Killion. "We believe the touch ecosystem recognizes the unique advantages of metal mesh touch sensors based on our UniBoss additive, roll to roll, flexible electronics process compared with traditional, subtractive, ITO-based, touch sensor solutions." The advantages of UniBoss touch screen technology include higher touch response and sensitivity, superior touch distinction, better durability, lower power requirements, and extensibility to many sizes and form factors. It also promises lower production costs versus standard ITO-based touch technology, including lower material costs, fewer steps in the manufacturing process and a simplified supply chain. About Uni-Pixel Inc. The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL) -- http://www.unipixel.com/-- is a production stage company delivering its Clearly Superior(TM) Performance Engineered Films to the Lighting & Display, Solar and Flexible Electronics market segments. The Company reported a net loss of $8.57 million in 2011 compared to a net loss of $3.82 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $16.39 million in total assets, $103,588 in total liabilities, and $16.29 million in total shareholders' equity. UNITED CONTINENTAL: Pilots Ratify Collective Bargaining Deal ------------------------------------------------------------ The pilots of United and Continental, represented by the Air Line Pilots Association, Int'l, have approved a joint collective bargaining agreement with United Continental Holdings, Inc. Of the 10,193 eligible pilots, 97.66 percent participated in the ratification vote. 67 percent approved the agreement. This agreement brings both pilot groups together, working under a single contract. It will begin to be implemented immediately, and will provide gains in compensation, work rules, job protections and retirement and benefits for the pilots. This contract ratification represents a giant step toward finalizing the merger between the two airlines. Capt. Jay Heppner, chairman of the United Master Executive Council and Capt. Jay Pierce, chairman of the Continental Master Executive Council, issued the following joint statement. "The era of bankruptcy and concessionary contracts is now over. For too long, the pilots of United and Continental have had to shoulder more than their share of the burden as our respective airlines struggled through the difficult economic times of the past decade. We now stand ready to embark on a fresh start for the pilots and the airline. "We call on United management to seize this opportunity for a new beginning, and to work with us as equal, respected partners in building United Airlines as the world's preeminent airline." Captains Heppner and Pierce also thanked the Joint Negotiating Committee for its tireless work in negotiating this agreement for the pilots, as well as the National Mediation Board for their assistance in helping the parties reach this agreement. Now that the combined contract has been approved, integrating the seniority lists represents the next major hurdle in combining the two pilot groups into a single, 12,000-member strong unit. The seniority integration process is expected to take several months to complete. The process is independent of airline management and involves negotiations between the two pilot groups. Absent an agreement, binding arbitration will be used to settle any remaining differences. The process follows a predefined timeline following contract ratification that was agreed upon by the two pilot groups shortly after the merger was announced. The Air Line Pilots Association, International (ALPA) is the largest airline pilot union in the world and represents more than 51,000 pilots at 35 U.S. and Canadian airlines, including more than 12,000 United Continental Holdings, Inc. pilots. About United Continental United Continental Holdings, Inc. (NYSE: UAL) -- http://www.UnitedContinentalHoldings.com/-- is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, the airlines operate a total of 5,800 flights a day to 371 airports throughout the Americas, Europe and Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo and Washington, D.C. United Air Lines, UAL Corp. and their affiliates filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 02-8191) on Dec. 9, 2002. Kirkland & Ellis represented the Debtors in their restructuring efforts. Sonnenschein Nath & Rosenthal LLP, nka SNR Denton, represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for UAL on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. * * * In November 2012, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on United Continental. United Continental 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. In October 2012, Moody's Investors Service affirmed all of its debt ratings including the B2 Corporate Family and B2 Probability of Default ratings assigned to United Continental. The outlook is stable. The affirmation of the B2 Corporate Family and Probability of Default ratings considers the company's good liquidity, competitive market position and supportive credit metrics. The corporate ratings reflect Moody's belief that the combined group can sustain its current credit profile beyond 2012 notwithstanding (1) potential pressure on operating earnings should demand weaken and (2) anticipated negative free cash flow generation because of higher capital expenditures for new aircraft. US AIRWAYS: S&P Assigns 'B+' Rating on $128MM Class B Certificates ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BBB'(sf) rating to US Airways Inc.'s $418.113 million series 2012-2 Class A pass- through certificates, with an expected maturity of June 3, 2025. "At the same time, we assigned our 'B+'(sf) rating to the $128.071 million Class B pass-through certificates, with an expected maturity of June 3, 2021. The final legal maturities will be 18 months after the expected maturity. The issues are drawdowns under a Rule 415 shelf registration," S&P said. "We base the 'BBB'(sf) and 'B+'(sf) ratings on US Airways' credit quality, substantial collateral coverage by good quality aircraft, and on legal and structural protections available to the pass- through certificates," said Standard & Poor's credit analyst Betsy Snyder. "The company will use the proceeds of the offering to finance seven A321-200 aircraft and four A330-200 aircraft to be delivered in May through October 2013. Each aircraft's secured notes are cross-collateralized and cross-defaulted, a provision that we believe increases the likelihood that US Airways would affirm the notes (and thus continue to pay on the certificates) in bankruptcy." "The pass-through certificates are a form of enhanced equipment trust certificates (EETC) and benefit from legal protections afforded under Section 1110 of the federal bankruptcy code and by a liquidity facility provided by Landesbank Hessen-Thueringen Girozentrale (A/Stable/A-1). The liquidity facility is intended to cover up to three semiannual interest payments, a period during which collateral could be repossessed and remarketed by certificateholders following any default by the airline, or to maintain continuity of interest payments as certificateholders negotiate with US Airways in a bankruptcy with regard to certificates," S&P said. "The ratings apply to a unit consisting of certificates representing the trust property and escrow receipts, initially representing interests in deposits (the proceeds of the offerings). A depositary bank, The Bank of New York Mellon (AA-/Negative/A-1+), holds the escrow deposits pending paying off existing debt on the planes (which should be accomplished by August 2013). Amounts deposited under the escrow agreements are not property of US Airways and are not entitled to the benefits of Section 1110 of the U.S. Bankruptcy Code, and any default arising under an indenture solely by reason of the cross-default in such indenture may not be of a type required to be cured under Section 1110. Any cash collateral held as a result of the cross- collateralization of the equipment notes also would not be entitled to the benefits of Section 1110. Neither the certificates nor the escrow receipts may be separately assigned or transferred," S&P said. "We believe that US Airways views these planes as important and would, given the cross-collateralization and cross-default provisions, likely affirm the aircraft notes in a bankruptcy scenario. In contrast to most EETCs issued before 2009, the cross- default would take effect immediately in a bankruptcy if US Airways rejected any of the aircraft notes. This should prevent US Airways from selectively affirming some aircraft notes and rejecting others (cherry-picking), which often harms the interests of certificateholders in a bankruptcy," S&P said. "We consider the collateral pool of A321-200s and A330-200s to be of good quality. The A321-200 is the largest version of Airbus' popular A320 narrowbody family of planes. The A321-200 has not been as successful as the A320 or smaller A319, but nonetheless is operated by 95 airlines worldwide, many more than Boeing's competing B737-900ER (although the latter is a newer model and thus has had less time to attract orders). Airbus has announced that it will offer a more fuel-efficient new-engine-option (NEO) on its narrowbody planes starting in 2016. Orders to date indicate that this will be a popular option. If widely adopted, sale of NEO planes could depress somewhat residual values of existing- technology Airbus narrowbody planes. However, this effect is most likely for older planes in the A320 family (e.g. those delivered in the 1990s), rather than the recently delivered A321-200s in the 2012-1 collateral pool," S&P said. "The other approximately 80% of aircraft securing the certificates is A330-200s, a small, long-range widebody plane. This model, which incorporates newer technology than Boeing's competing B767- 300ER, has been successful and is operated by 98 airlines worldwide. It will face more serious competition when large numbers of Boeing's long-delayed B787 are delivered. Still, it will take a while for this to occur, even though Boeing has finally begun to make its first aircraft deliveries earlier in 2012," S&P said. "The initial loan-to-value of the Class A certificates is 55.2% and of the Class B certificates is 72.1%, using the appraised base values and depreciation assumptions in the offering memorandum. However, we focused on more conservative maintenance-adjusted appraised values (not disclosed in the offering memorandum). We also use more conservative depreciation assumptions for all of the planes than those in the prospectus. We assumed that, absent cyclical fluctuations, values of the A321-200s and A330-200s would decline by 6.5% of the preceding year's value per year. Using these values and assumptions, the Class A initial loan-to-value is higher, 55.9%, and rises to about 60% at its highest point before declining gradually. The Class B initial loan-to-value, using our assumptions, is about 73% and peaks at about 80% before declining. Our analysis also considered that a full draw of the liquidity facility, plus interest on those draws, represents a claim senior to the certificates. This amount is in line (as a percent of asset value) with EETCs issued recently by other U.S. airlines and is lower than US Airways' 2011-1 and 2012-1 EETCs, which amounted to more than 8%. Initially, a full draw, with interest, is equivalent to about 5.7% of asset value, using our assumptions. The transaction is structured so that US Airways could later issue Class C certificates without a liquidity facility. In the past, airlines, including US Airways, have structured follow-on certificates of this kind in such a way as to not affect the rating on outstanding senior certificates," S&P said. "Our ratings on US Airways Group Inc. reflect its substantial debt and lease burden and participation in the high-risk U.S. airline industry. The ratings also incorporate benefits from the company's operating costs, which are lower than those of other legacy airlines. Tempe, Ariz.-based US Airways is the fifth-largest U.S. airline, carrying about 9% of industry traffic. We characterize the company's business profile as vulnerable, its financial profile as highly leveraged, and its liquidity as adequate," S&P said. "The outlook is stable. We expect US Airways' financial profile to remain fairly consistent through 2013, with EBITDA interest coverage in the mid-1x area and funds from operations (FFO) to debt in the low-teen percent area. We believe that an upgrade is not likely over the next year, but could occur if FFO to debt moves consistently into the high-teen percent area and unrestricted cash and short-term investments increase to more than $2.5 billion. We also believe a downgrade is unlikely over the near term. However, if a stalled U.S. economic recovery or serious oil price spike caused losses, eroding liquidity to below $1 billion, we could lower the ratings," S&P said. RATINGS LIST US Airways Inc. US Airways Group Inc. Corporate credit rating B-/Stable/-- New Ratings Assigned US Airways Inc. Series 2012-2 Class A pass-through certificates BBB (sf) Series 2012-2 Class B pass-through certificates B+ (sf) VERMILLION INC: Signs Separation Agreement With Former CEO ---------------------------------------------------------- Vermillion, Inc., entered into a Separation Agreement and Release with Gail S. Page regarding her previous employment as President and Chief Executive Officer of the Company. Ms. Page served as the Company's President and CEO until Dec. 2, 2012, and transitioned to an advisory role effective as of Dec. 3, 2012. Her mutually agreed termination without cause was first announced on May 15, 2012, and was not the result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. Pursuant to the terms of the Separation Agreement, the Company agrees to provide severance and benefits as outlined in the Employment Agreement dated Sept. 28, 2010, between the Company and Ms. Page, subject to the following modifications: (1) the continued payment of Ms. Page's base salary provided for in section 5(i) of the Employment Agreement was instead paid to Ms. Page on the date of the Separation Agreement in one lump sum totaling $385,000, and (2) the Company and Ms. Page agree that accelerated vesting of options provided for in section 5(ii) of the Employment Agreement will apply to both unvested options and restricted stock units. Pursuant to the Separation Agreement, Ms. Page agrees to waive any and all claims she may have regarding her employment with the Company. About Vermillion Vermillion, Inc. is dedicated to the discovery, development and commercialization of novel high-value diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. Vermillion, along with its prestigious scientific collaborators, has diagnostic programs in oncology, hematology, cardiology and women's health. The Company filed for Chapter 11 on March 30, 2009 (Bankr. D. Del. Case No. 09-11091). Vermillion's legal advisor in connection with its successful reorganization efforts wass Paul, Hastings, Janofsky & Walker LLP. Vermillion emerged from bankruptcy in January 2010. The Plan called for the Company to pay all claims in full and equity holders to retain control of the Company. After auditing the Company's results for 2011, PricewaterhouseCoopers LLP, in Austin, Texas, expressed substantial doubt about Vermillion, Inc.'s ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring losses and negative cash flows from operations and has debt outstanding due and payable in October 2012. The Company reported a net loss of $17.8 million in 2011, compared with a net loss of $19.0 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $16.9 million in total assets, $11.5 million in total liabilities, and stockholders' equity of $5.4 million. VITESSE SEMICONDUCTOR: Selling 10MM Common Shares at $1.75 Apiece ----------------------------------------------------------------- Vitesse Semiconductor Corporation is offering to sell 10,000,000 shares of its common stock at a price to the public of $1.75 per share. The Company has also granted to the underwriters a 30-day option to purchase, at the same price per share as the underwriters paid for the initial shares, an additional 1,409,294 shares to cover over-allotments in connection with the offering. After deducting the underwriting discount and estimated offering expenses payable by the Company, the Company expects to receive net proceeds of approximately $16.1 million, assuming no exercise of the over- allotment option. The offering is expected to close on Dec. 12, 2012, subject to customary closing conditions. Needham & Company, LLC, is acting as the sole book-running manager of the offering. Craig-Hallum Capital Group LLC is acting as co-manager. Certain officers and directors of Vitesse Semiconductor are expected to participate in the offering. Vitesse intends to use the net proceeds from the offering for working capital and general corporate purposes. A portion of the net proceeds also may be used to repay or restructure indebtedness. About Vitesse Based in Camarillo, California, Vitesse Semiconductor Corporation (Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of semiconductor solutions for Carrier and Enterprise networks worldwide. In October 2009, Vitesse completed a debt restructuring transaction that resulted in the conversion of 96.7% of the Company's 2024 Debentures into a combination of cash, common stock, Series B Preferred Stock and 2014 Debentures. With respect to the remaining 3.3% of the 2024 Debentures, Vitesse settled its obligations in cash. Additionally, Vitesse repaid $5.0 million of its $30.0 million Senior Term Loan, the terms of which were amended as part of the debt restructuring transactions. Vitesse incurred a net loss of $1.11 million in 2012, a net loss of $14.81 million in 2011, and a net loss of $20.05 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $56.61 million in total assets, $80.63 million in total liabilities, and a $24.01 million total stockholders' deficit. VHGI HOLDINGS: Authorized Capital Stock Hiked to 260MM Shares ------------------------------------------------------------- VHGI Holdings, Inc., filed an amendment to its Amended and Restated Certificate of Incorporation, increasing the authorized capital stock of VHGI from 110,000,000 to 260,000,000 shares of capital stock consisting of 250,000,000 shares of common stock and 10,000,000 shares of preferred stock. VHGI filed a Certificate of Designations, Preferences, Rights and Limitations designating 500,000 shares of a new Series D Convertible Preferred Stock. About VHGI Holdings Fort Worth, Tex.-based VHGI Holdings, Inc., is a holding company with revenue streams from the following business segments: (a) precious metals (b) oil and gas (c) coal and (d) medical technology. In their auditors' report on the Company's consolidated financial statements for the year ended Dec. 31, 2011, Pritchett, Siler & Hardy, P.C., in Salt Lake City, Utah, expressed substantial doubt about VHGI Holdings' ability to continue as a going concern. The independent auditors noted that the Company has incurred substantial losses and has a working capital deficit. The Company reported a net loss of $5.43 million in 2011, compared with a net loss of $1.67 million in 2010. The Company's balance sheet at June 30, 2012, showed $47.64 million in total assets, $51.78 million in total liabilities and a $4.13 million total stockholders' deficit. VIGGLE INC: Obtains Additional $500,000 from Sillerman Investment ----------------------------------------------------------------- Sillerman Investment Company LLC, an affiliate of Robert F.X. Sillerman, the executive chairman and chief executive officer of the Company, previously agreed to advance up to $10,000,000 to Viggle, Inc., as evidenced by a line of credit grid promissory note, dated as of June 29, 2012, that was executed and delivered by the Company in favor of the Lender on July 6, 2012. On Oct. 31, 2012, the Company's Board of Directors approved an increase in the line of credit from $10,000,000 to $12,000,000 and a further advance of $2,000,000 was made on Oct. 31, 2012. On Dec. 3, 2012, the Company's Board of Directors approved an increase in the line of credit from $12,000,000 to $12,500,000 and entered into an Amended and Restated Line of Credit Promissory Note for $12,500,000 but otherwise on the same terms and conditions as the Grid Note. A further advance of $500,000 was made by the Lender. The Company is using the proceeds to fund working capital requirements and for general corporate purposes. Because Mr. Sillerman is a director, executive officer and greater than 10% stockholder of the Company, the Company's independent directors approved the transaction. About Viggle New York City-based Viggle Inc. is a loyalty marketing company. The Company has developed a loyalty program for television that gives people real rewards for checking into the television shows they are watching on most mobile operating system. Viggle users can redeem their points in the app's rewards catalog for items such as movie tickets, music, or gift cards. The Company's balance sheet at Sept. 30, 2012, showed $17.3 million in total assets, $22.2 million in total liabilities, and a stockholders' deficit of $4.9 million. As reported in the TCR on Oct. 22, 2012, BDO USA, LLP, in New York City, expressed substantial doubt about Viggle's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and at June 30, 2012, has deficiencies in working capital and equity. VOTORANTIM CEMENT: S&P Raises CCR From 'BB+' on Parental Support ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term corporate credit rating on Votorantim Cement North America Inc. (VCNA) to 'BBB-' from 'BB+' to reflect a higher degree of perceived support from VCNA's parent, Brazil-based Votorantim Participacoes S.A. (VPar; BBB/Stable/--). The outlook is stable. "At the same time, we affirmed our 'BBB' issue-level rating on the company's US$450 first-lien credit facility. We also withdrew our '1' recovery rating on the debt reflecting our rating criteria for investment-grade issuers," S&P said. "The upgrade reflects a one-notch lift in our 'bb+' stand-alone credit profile on VCNA based on our expectation that VPar would support indirect wholly owned subsidiary VCNA if necessary, given our view of the strategic importance of VCNA to VPar and the extent to which VPar has demonstrated this support," said Standard & Poor's credit analyst Jatinder Mall. VCNA represents a sizable investment for VPar and is its sole cement entity in North America. VPar consolidates VCNA's financial results, has cross-default/cross-acceleration provisions in certain of its debt instruments, and has infused equity capital into the company, most recently through the conversion of intercompany loans into equity. The ratings on VCNA reflect what Standard & Poor's views as the company's "fair" business risk profile and "intermediate" financial risk profile on a stand-alone basis, which are bolstered by our assessment of parental support. "We have factored in the strength of the underlying collateral protecting creditors in our 'BBB' issue-level rating on the company's US$450 million first- lien credit facility." "The stable outlook reflects Standard & Poor's view that VCNA will maintain credit metrics consistent with an intermediate financial risk profile -- specifically, funds from operations (FFO) to debt above 30% and debt to EBITDA not materially exceeding 3x. We could lower the ratings if debt to EBITDA exceeds 3.5x or FFO to debt declines below 25% on a sustained basis, possibly as a result of a slowdown in VCNA's key Ontario market. While not likely given our current assessment of VCNA's relationship to its parent, we could also lower the ratings if we no longer viewed VCNA as having the same level of strategic importance to VPar. Alternatively, we could consider raising the ratings on VCNA if we revise upward the level of perceived support attributable to VPar or we upgrade VPar," S&P said. W.R. GRACE: Lenders, Others File Opening Briefs on Plan Appeal -------------------------------------------------------------- A group of prepetition bank lenders, Garlock Sealing Technologies, LLC, and Her Majesty the Queen in Right of Canada, filed in late November opening briefs in the U.S. Court of Appeals for the Third Circuit in support of their appeals from a district court order affirming confirmation of the Chapter 11 plan of reorganization of W.R. Grace & Co. and its debtor affiliates. The objectors argued that the way their claims are dealt with in the Plan are flawed; they ask the Third Circuit to either reverse the confirmation of the plan or modify it, Stewart Bishop at BankruptcyLaw360 reported. In January 2011, Bankruptcy Judge Judith Fitzgerald confirmed Grace's Chapter 11 plan. It took almost a year and several motions for reconsideration and hearings on the plan for Judge Ronald Buckwalter of the U.S. District Court for the District of Delaware to affirm Judge Fitzgerald's plan confirmation order on January 2012. In June 2012, Judge Buckwalter overruled objections to its January 2012 affirmation order. Eight parties-in-interest filed separate appeals to the U.S. Court of Appeals for the Third Circuit from June 11 Memorandum. The Appellants are (1) a group of lenders under the Debtors' prepetition bank credit facilities ("Bank Lenders"); (2) claimants injured by exposure to asbestos from the Debtors' operations in Lincoln County, Montana ("Libby Claimants"); (3) Garlock Sealing Technologies, LLC; (4) the state of Montana; (5) Maryland Casualty Company; (6) Her Majesty the Queen in Right of Canada; (7) BNSF Railway Company; and (8) Anderson Memorial Hospital. Grace's Chief Executive Officer Fred Festa said only five appeals from the Plan are pending after three appeals were withdrawn following a settlement between the Debtors and the Libby Claimants. Briefing schedule on the appeals before the Third Circuit will be completed by this year and oral arguments will be heard by the Third Circuit in the first quarter of 2013. Grace said in early October that it targets emergence from bankruptcy protection by the fourth quarter of 2014. The company's target emergence date has been moved several times mostly due to pending appeals from its confirmed Plan. Terms Under the Chapter 11 Plan The Plan, which was filed with the Bankruptcy Court in September 2008, establishes two asbestos trusts to compensate personal injury claimants and property owners. Funds for the trusts will come from a variety of sources including cash, warrants to purchase Grace common stock, deferred payment obligations, insurance proceeds, and payments from certain third parties. The trusts' assets and operations are designed to cover all current and future asbestos claims. An estimation proceeding on the Debtors' asbestos liabilities was held in 2008 but was concluded after the Debtors reached an agreement settling all of their present and future asbestos- related PI claims for $1.8 billion. Prior to that agreement, the Debtors were involved in a series of trials to estimate their asbestos personal injury claims. Grace's experts estimated that the company's asbestos personal injury liabilities are between $385 million and $1.314 billion. The PI Committee, representing more than 100,000 asbestos claimants, said Grace's liabilities range from $4.7 billion to $6.2 billion. Pursuant to the April 2008 settlement, the asbestos trusts will be funded by: -- Cash in the amount of $250,000,000; -- Warrants to acquire 10,000,000 shares of Grace common stock at an exercise price of $17.00 per share, expiring one year from the effective date of a plan of reorganization; -- Rights to proceeds under Grace's asbestos-related insurance coverage; -- The value of cash and stock under the litigation settlement agreements with Sealed Air Corporation and Fresenius Medical Care Holdings, Inc.; and -- Deferred payments at $110,000,000 per year for five years beginning in 2019, and $100,000,000 per year for 10 years beginning in 2024; the deferred payments would be obligations of Grace backed by 50.1% of Grace's common stock to meet the requirements of Section 524(g). The effectiveness of the Joint Plan is subject to the satisfaction or waiver of a number of conditions precedent, including the condition that the order confirming the Joint Plan become final and non-appealable. Grace has said that it was unable to obtain the necessary waivers from Sealed Air Corporation and Fresenius Medical Care Holdings, Inc. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Cash-Settled Collar Agreement Approved -------------------------------------------------- Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware authorized W.R. Grace & Co. and its debtor affiliates to enter into a cash-settled collar agreement under which the warrant for 10 million shares of Grace's common stock that will be delivered to the Asbestos Personal Injury Trust will be settled in cash rather than physically settled. The Debtors' confirmed Plan of Reorganization provides that the Debtors will deliver to the Asbestos PI Trust a warrant for 10 million shares of Grace common stock, the expiration of which is one year after the Effective Date and has an exercise price of $17.00. Under the agreement, Grace would repurchase the warrants issued to the Asbestos PI Trust for a price equal to the average of the closing prices of Grace common stock during the period commencing one day after the effective date of the Joint Plan and ending on the day prior to the date the Asbestos PI Trust elects to sell the warrants back to Grace (but no later than one year after the effective date of the Joint Plan), multiplied by 10 million, less $170 million (the aggregate exercise price of the warrant). If the average of the closing prices is less than $54.50 per share, then the repurchase price would be $375 million, and if the average of the closing prices exceeds $66 per share, then the repurchase price would be $490 million. The agreement also establishes a minimum and maximum price for the settlement, respectively the "floor price" and the "ceiling price." Following extensive negotiations, the Plan Proponents -- the Debtors, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative, and the Official Committee of Equity Security Holders -- agreed on a floor price of $54.50 per share and a ceiling price of $66.00 per share. A full-text copy of the Cash-Settled Collar Agreement is available for free at: http://bankrupt.com/misc/grace_1025cscdeal.pdf Judge Fitzgerald's Order, dated Dec. 11, 2012, also provided that the Bankruptcy Court retains jurisdiction with respect to all matters arising from or related to the implementation of the Order until the earlier of plan confirmation by the Bankruptcy Court or the dismissal or conversion of the case to another chapter or the closing of the bankruptcy case for any reason. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: $100-Mil. Qualified Settlement Fund Has Go Signal ------------------------------------------------------------- The Bankruptcy Court authorized W.R. Grace & Co. and its affiliates to establish a "qualified settlement fund" and transfer up to $100 million before the end of 2012 to a segregated bank account that would qualify as a QSF under federal tax law. By establishing a QSF before the end of 2012, the Debtors can receive a tax deduction for this year. Amounts transferred to the QSF will ultimately be transferred to the Asbestos Personal Injury Trust on the Effective Date in accordance with the Plan of Reorganization. Based on the Debtors' current 35% tax rate, the QSF would result in up to $35 million in 2012 federal tax savings, plus additional state tax savings. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WELDING APPARATUS: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Welding Apparatus Co., Inc. 1668 N. Ada Street Chicago, IL 60642 Bankruptcy Case No.: 12-48738 Chapter 11 Petition Date: December 12, 2012 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Jacqueline P. Cox Debtor's Counsel: Lincoln M. King, Esq. RUDDY & KING, LLC 2631 Ginger Woods Parkway, Suite 101 Aurora, IL 60502 Tel: (630) 820-0333 Fax: (630) 820-0594 E-mail: lincoln@ruddyking.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Brant Terzic, president. WESCO INT'L: Term Loan Upsize No Impact on Moody's Ratings ---------------------------------------------------------- Moody's Investors Service said that WESCO International, Inc.'s recent announcement that it upsized the US Dollar denominated tranche of the term loan facility to $700 million from $605 million with proceeds used to partially fund the redemption of its $150 million of 7.5% senior subordinated notes due 2017, is credit positive but does not impact the company's ratings (including the Ba3 corporate family rating) or stable outlook. Holders of the notes will be paid in full on January 9, 2013. WESCO Distribution, Inc. (a wholly-owned subsidiary of WESCO) deposited funds with a trustee sufficient to pay principal and interest on all outstanding notes. WESCO is one of the leading providers of electrical construction products and electrical, industrial, and communications maintenance, repair and operating supplies in North America. The company reported sales of $6.5 billion for the twelve months ended September 30, 2012. WSG ARUNDEL: Case Summary & Lists of Creditors ---------------------------------------------- Debtor: WSG Arundel One, LLC P.O. Box 546918 Miami Beach, FL 33154 Bankruptcy Case No.: 12-32030 Chapter 11 Petition Date: December 11, 2012 Court: U.S. Bankruptcy Court District of Maryland (Baltimore) Debtor's Counsel: Lawrence A. Katz, Esq. LEACH TRAVELL BRITT, P.C. 8270 Greensboro Drive, Suite 700 Tysons Corner, VA 22102 Tel: (703) 584-8362 Fax: (703) 584-8901 E-mail: lkatz@ltblaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliates that simultaneously sought Chapter 11 protection: Entity Case No. ------ -------- WSG Arundel Two, LLC 12-32032 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 WSG Hanover One, LLC 12-32034 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 WSG Hanover Two, LLC 12-32035 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by Eric D. Sheppard, executive manager. A. A copy of WSG Arundel One's list of its eight largest unsecured creditors is available for free at: http://bankrupt.com/misc/mdb12-32030.pdf B. A copy of WSG Arundel Two's list of its seven largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/mdb12-32032.pdf C. A copy of WSG Hanover One's list of its eight largest unsecured creditors is available for free at: http://bankrupt.com/misc/mdb12-32034.pdf D. A copy of WSG Hanover Two's list of its seven largest unsecured creditors is available for free at: http://bankrupt.com/misc/mdb12-32035.pdf WWDT ENTERPRISES: Case Summary & 2 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: WWDT Enterprises Inc. 223 N Garfield, Ste. 208 Monterey Park, CA 91754 Bankruptcy Case No.: 12-50746 Chapter 11 Petition Date: December 12, 2012 Court: United States Bankruptcy Court Central District Of California (Los Angeles) Judge: Sheri Bluebond Debtor's Counsel: Paul Harrigan, Esq. HARRIGAN LAW FIRM 2785 S Bear Clay Way Meridian, ID 83642 Tel: (208) 891-2482 Fax: (831) 401-2296 Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its two unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-50746.pdf The petition was signed by Wei Wang, president. X-CHANGE CORP: Defaults Under 4 Tech Purchase Agreement ------------------------------------------------------- 4C Tech Holdings, Inc. disclosed the termination of the purchase agreement with X-Change Corporation. 4C Tech entered into a purchase agreement with X-Change to purchase all of the outstanding shares of Guardian Telecom, Inc. in exchange for the sum of $3,500,000 and one million shares of the common stock of X-Change. X-Change was in default of its payments obligations under the purchase agreement. On Oct. 11, 2012, X-Change was notified in writing of its default of the prepayment terms of the 30-day promissory note for $250,000. On Nov. 15, 2012 a written notification was given to X-Change regarding failure to meet its prepayment obligations set forth in the second promissory note in the amount of $750,000. 4C Tech terminated the purchase agreement with X-Change on Nov. 30, 2012 for default on its payment obligations under the promissory note obligations set forth in the purchase agreement. X-Change Corporation is building interests in a broad range of oil and gas projects worldwide. The Company is an independent energy company engaged in the production, development, acquisition, exploitation and exploration of crude oil and natural gas. Z.U.P. HOLDINGS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Z.U.P. Holdings LLC 3312 Hudson Avenue Union City, NJ 07087 Bankruptcy Case No.: 12-38923 Chapter 11 Petition Date: December 12, 2012 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Novalyn L. Winfield Debtor's Counsel: Leonard C. Walczyk, Esq. Steven Z. Jurista, Esq. WASSERMAN, JURISTA & STOLZ 225 Millburn Ave., Suite 207 P.O. Box 1029 Millburn, NJ 07041-1712 Tel: (973) 467-2700 Fax: (973) 467-8126 E-mail: lwalczyk@wjslaw.com sjurista@wjslaw.com Scheduled Assets: $0 Scheduled Liabilities: $10,000,000 Affiliates that simultaneously sought Chapter 11 protection: Debtor Case No. ------ -------- TUC Holdings LLC 12-38925 Assets: $0 Debts: $11,500,000 ZZ Union Holdings LLC 12-38926 Assets: $0 Debts: $10,000,000 PKT Properties LLC 12-38927 The petitions were signed by Joel Weiss, managing member. Affiliate that previously sought Chapter 11 protection: Petition Debtor Case No. Date ------ -------- ---- Contello, LLC 12-27005 07/05/12 The Debtors did not file a list of its largest unsecured creditors together with its petitions. ZALE CORP: Files Form 10-Q, Incurs $28.3MM Loss in Oct. 31 Qtr. --------------------------------------------------------------- Zale Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $28.26 million on $357.46 million of revenues for the three months ended Oct. 31, 2012, compared with a net loss of $31.87 million on $350.98 million of revenues for the same period during the prior year. USG's balance sheet at Oct. 31, 2012, showed $1.33 billion in total assets, $1.18 billion in total liabilities and $151.96 million in total stockholders' investment. A copy of the Form 10-Q is available for free at: http://is.gd/TXo6UR About Zale Corporation Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is a specialty retailer of diamonds and other jewelry products in North America, operating approximately 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at http://www.zales.com/, http://www.zalesoutlet.com/, http://www.gordonsjewelers.com/and http://www.pagoda.com/ Zale Corp. incurred a net loss of $27.31 million for the year ended July 31, 2012, a net loss of $112.30 million for the year ended July 31, 2011, and a net loss of $93.67 million for the year ended July 31, 2010. * Fitch's Outlook for Produce Industry is Stable for 2013 --------------------------------------------------------- Fitch Ratings expects pricing and efficiency to be paramount for the protein, dairy, and produce sectors in 2013, as the pace of large scale divestitures and spinoffs slows, according to an outlook report. Proceeds from transformative transactions by Dean Foods Co. (Dean: 'B+/Watch Positive') and Dole Food Co. ('B/Watch Positive') are funding debt reduction for these firms, but additional large scale deals in the commodity food sector are viewed as unlikely. Fitch's outlook for the industry is stable for 2013 as lower debt balances, solid liquidity and minimal refinancing needs reduce credit risk and improve the ability of these low-margin firms to handle inflationary cost pressures. Global corn prices are likely to remain elevated in 2013, although prices have eased from recent highs, due to relatively low supplies, good demand, and the potential for unfavorable weather. Fitch expects pricing to mitigate some of the cost pressure in the protein sector even though moderate declines in volumes could occur and margins are at risk of contracting. Dairy processors, such as Dean, are also expected to realize pricing with volume declines continuing due to secular changes in milk consumption. Operating efficiency is expected to remain a focus for all commodity food companies, but given the magnitude of cost savings achieved over the past couple of years, firms may experience less incremental benefit. Tyson Foods, Inc. (Tyson: 'BBB/Stable') is projecting $600 million of incremental grain costs and $100 million of efficiencies across its chicken and prepared foods segments during fiscal 2013. Fitch expects pricing to contribute to sales growth and views the targeted improvements as achievable, given Tyson's ability to realize about $1 billion in its chicken operations alone since 2008. * BOND PRICING: For Week From Dec. 10 to 14, 2012 ------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- AES EASTERN ENER 9.000 1/2/2017 3.570 AES EASTERN ENER 9.670 1/2/2029 4.000 AGY HOLDING COR 11.000 11/15/2014 46.400 AHERN RENTALS 9.250 8/15/2013 63.250 ALION SCIENCE 10.250 2/1/2015 51.300 AM AIRLN PT TRST 10.180 1/2/2013 93.000 AMBAC INC 6.150 2/7/2087 3.250 ARK OF SAFETY 8.000 4/15/2029 6.000 ATP OIL & GAS 11.875 5/1/2015 11.500 ATP OIL & GAS 11.875 5/1/2015 11.250 ATP OIL & GAS 11.875 5/1/2015 11.250 BUFFALO THUNDER 9.375 12/15/2014 35.000 C-CALL12/12 6.000 6/22/2037 100.013 CAPMARK FINL GRP 6.300 5/10/2017 2.000 CATERP FIN SERV 4.500 12/15/2012 100.000 CENTRAL EUROPEAN 3.000 3/15/2013 41.125 CHAMPION ENTERPR 2.750 11/1/2037 1.000 DELTA AIR 1992B2 10.125 3/11/2015 30.000 DIRECTBUY HLDG 12.000 2/1/2017 18.750 DIRECTBUY HLDG 12.000 2/1/2017 18.750 DOWNEY FINANCIAL 6.500 7/1/2014 62.000 DYN-RSTN/DNKM PT 7.670 11/8/2016 4.875 EASTMAN KODAK CO 7.000 4/1/2017 10.875 EASTMAN KODAK CO 7.250 11/15/2013 10.099 EASTMAN KODAK CO 9.200 6/1/2021 8.400 EASTMAN KODAK CO 9.950 7/1/2018 8.000 EDISON MISSION 7.500 6/15/2013 50.745 F-CALL12/12 4.000 12/20/2014 100.000 F-CALL12/12 4.750 12/20/2016 100.000 F-CALL12/12 4.750 12/20/2018 100.000 F-CALL12/12 5.000 12/20/2018 100.022 F-CALL12/12 5.250 6/20/2021 100.000 F-CALL12/12 5.250 12/20/2021 100.000 FFCB-CALL12/12 3.610 12/21/2026 100.005 FIBERTOWER CORP 9.000 11/15/2012 13.875 FIBERTOWER CORP 9.000 11/15/2012 13.875 FIBERTOWER CORP 9.000 1/1/2016 20.500 FONTAINEBLEAU LA 10.250 6/15/2015 0.250 FRIENDSHIP WEST 8.000 6/15/2024 9.100 GEN ELEC CAP CRP 5.000 12/15/2012 100.000 GEN ELEC CAP CRP 5.100 12/15/2012 100.000 GEOKINETICS HLDG 9.750 12/15/2014 39.625 GEOKINETICS HLDG 9.750 12/15/2014 39.250 GLB AVTN HLDG IN 14.000 8/15/2013 32.000 GLOBALSTAR INC 5.750 4/1/2028 47.500 GMAC LLC 7.125 12/15/2012 100.015 GMAC LLC 7.250 12/15/2012 100.000 GMX RESOURCES 4.500 5/1/2015 45.250 HAWKER BEECHCRAF 8.500 4/1/2015 6.650 HAWKER BEECHCRAF 8.875 4/1/2015 5.375 HORIZON LINES 6.000 4/15/2017 25.000 HUTCHINSON TECH 8.500 1/15/2026 61.700 JAMES RIVER COAL 4.500 12/1/2015 42.000 JEHOVAH-JIREH 7.800 9/10/2015 10.000 LEHMAN BROS HLDG 0.250 12/12/2013 20.625 LEHMAN BROS HLDG 0.250 1/26/2014 20.625 LEHMAN BROS HLDG 1.000 10/17/2013 20.625 LEHMAN BROS HLDG 1.000 3/29/2014 20.625 LEHMAN BROS HLDG 1.000 8/17/2014 20.625 LEHMAN BROS HLDG 1.000 8/17/2014 20.625 LEHMAN BROS HLDG 1.250 2/6/2014 20.625 LEHMAN BROS INC 7.500 8/1/2026 15.000 LIFECARE HOLDING 9.250 8/15/2013 13.900 LIFEPOINT CMNTY 8.400 10/20/2036 4.000 MANNKIND CORP 3.750 12/15/2013 71.250 MASHANTUCKET PEQ 8.500 11/15/2015 5.250 MASHANTUCKET PEQ 8.500 11/15/2015 15.750 MASHANTUCKET TRB 5.912 9/1/2021 5.250 METRO BAP CHURCH 8.400 1/12/2029 4.000 MF GLOBAL LTD 9.000 6/20/2038 66.500 NEWPAGE CORP 10.000 5/1/2012 4.751 NEWPAGE CORP 11.375 12/31/2014 47.000 OVERSEAS SHIPHLD 8.750 12/1/2013 36.000 PENSON WORLDWIDE 8.000 6/1/2014 43.290 PLATINUM ENERGY 14.250 3/1/2015 48.000 PLATINUM ENERGY 14.250 3/1/2015 47.000 PMI CAPITAL I 8.309 2/1/2027 1.625 PMI GROUP INC 6.000 9/15/2016 30.500 POWERWAVE TECH 1.875 11/15/2024 3.875 POWERWAVE TECH 1.875 11/15/2024 3.875 POWERWAVE TECH 3.875 10/1/2027 3.875 POWERWAVE TECH 3.875 10/1/2027 4.000 RESIDENTIAL CAP 6.500 4/17/2013 23.750 RESIDENTIAL CAP 6.875 6/30/2015 22.000 REVEL AC INC 12.000 3/15/2018 5.750 SAVIENT PHARMA 4.750 2/1/2018 24.000 SCHOOL SPECIALTY 3.750 11/30/2026 49.750 TERRESTAR NETWOR 6.500 6/15/2014 10.000 TEXAS COMP/TCEH 7.000 3/15/2013 82.375 TEXAS COMP/TCEH 10.250 11/1/2015 20.000 TEXAS COMP/TCEH 10.250 11/1/2015 23.000 TEXAS COMP/TCEH 10.250 11/1/2015 22.993 TEXAS COMP/TCEH 15.000 4/1/2021 31.250 TEXAS COMP/TCEH 15.000 4/1/2021 34.250 THQ INC 5.000 8/15/2014 9.000 TIMES MIRROR CO 7.250 3/1/2013 39.000 TL ACQUISITIONS 10.500 1/15/2015 30.500 TL ACQUISITIONS 10.500 1/15/2015 32.125 TRAVELPORT LLC 11.875 9/1/2016 48.000 TRAVELPORT LLC 11.875 9/1/2016 45.875 TRIBUNE CO 5.250 8/15/2015 36.875 UAL 1991 TRUST 10.020 3/22/2014 11.250 USEC INC 3.000 10/1/2014 34.250 VERSO PAPER 11.375 8/1/2016 39.132 WCI COMMUNITIES 4.000 8/5/2023 0.375 WCI COMMUNITIES 4.000 8/5/2023 0.375 WCI COMMUNITIES 6.625 3/15/2015 0.500 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Carmel Paderog, Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***