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         T R O U B L E D   C O M P A N Y   R E P O R T E R

           Friday, December 21, 2012, Vol. 16, No. 354

                            Headlines

ACCURIDE CORP: Moody's Cuts CFR to 'B3'; Outlook Negative
ACCURIDE CORP: S&P Cuts CCR to 'B-' on Softening Truck Demand
ALETHEIA RESEARCH: Lost Right to Bankruptcy, Says U.S. Trustee
ALTERRA CAPITAL: Moody's Affirms '(P)Ba1' Preferred Stock Rating
AMERICAN AIRLINES: Nears Deal With USAir on Treatment of Pilots

AMERICAN AIRLINES: Selling Kensington Property for $23-Mil.
AMERICAN AIRLINES: Haynes Lawyers Can Join Airline's Programs
AMERICAN AIRLINES: Creditors Want All-Stock Deal With US Airways
AMERICAN AIRLINES: American Eagle Dispatchers Ratify New Contract
AMERICAN RENAL: Moody's Hikes Corp. Family Rating to 'B2'

AMES DEPARTMENT: Proposes Sale of Residual Assets to Oak Point
AMPAL-AMERICAN: Agrees With Creditors on Chapter 11 Plan
APPLESEED'S INTERMEDIATE: Ohio Tax Agency May Withdraw Claim
ARCAPITA BANK: Has Final Loan Approval, Still No Deal on Plan
ASK MIR: Voluntary Chapter 11 Case Summary

ATI ACQUISITION: Moody's Withdraws 'Ca' Corp. Family Rating
ATP OIL & GAS: Seeks Extension of Chapter 11 Plan Deadline
AVIV REIT: S&P Puts 'B+' Corp Credit Rating on Watch on $300MM IPO
BERNARD L. MADOFF: Peter Gets 10-Year Jail Time for Role in Fraud
C&S GROUP: Moody's Affirms 'Ba3' CFR/PDR; Outlook Positive

CAPITOL BANCORP: Modifies Michigan Plan Stipulation
CASTLEVIEW LLC: Hiring David E. Archer as Expert Witness
CENTENNIAL BEVERAGE: Blames Big-Box Retailers for Woes
CENTENNIAL BEVERAGE: Seeks to Use Compass' Cash Collateral
CENTRAL EUROPEAN: Says RTL's Demand for 100% Control Ridiculous

CLEARWIRE CORP: Sprint to Buy Remaining Stock at $2.9 Apiece
COMMONWEALTH GROUP: Amends List of Largest Unsecured Creditors
COMMUNITY FIRST: Completes Sale of Cool Springs Branch
DEWEY & LEBOEUF: Unsecureds Could Recover 14% Under Plan
DIGITAL DOMAIN: Sells More Assets for Less Than $1 Million

DIOCESE OF WILMINGTON: Accused Priest Wins Modification of Plan
DIOCESE OF WILMINGTON: Waiver of $1MM Bond Requirement Okayed
DIOCESE OF WILMINGTON: Lay Pension Trust to Give Out $2-Mil.
DIOCESE OF WILMINGTON: Post-Confirmation Reports for Jan. to Sept.
DISH NETWORK: Moody's Rates $1-Bil. Sr. Unsecured Notes 'Ba2'

DISH NETWORK: S&P Rates $1-Bil. Senior Unsecured Notes 'BB-'
DISPENSING DYNAMICS: Moody's Cuts CFR to Caa1'; Outlook Stable
EASTMAN KODAK: $525-Mil. From Sale of Digital Imaging Patents
EDISON MISSION: Wins Interim Approval of First Day Motions
EME HOMER: Suspending Filing of Reports with SEC

EMPIRE RESORTS: Charles Degliomini to Continue Serving as EVP
FIRST QUANTUM: Moody's Reviews 'B1' Rating for Downgrade
FORT LAUDERDALE BOATCLUB: Receiver Can Hire Salazar Jackson
FREEDOM GROUP: S&P Puts 'B+' CCR on Watch on Cerberus Sale Plan
GENCORP INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable

GENERAL MOTORS: Fitch Affirms 'BB+' on Repurchase from Govt.
GEOKINETICS INC: Negotiating Debt Swap With Noteholders
GREENWICH SENTRY: Limited Partners Fail to Advance Interests
HARRISBURG, PA: City Council Passes 2013 Budget
HILLMAN GROUP: Moody's Affirms 'B2' CFR; Rates $65MM Notes 'B2'

HMX ACQUISITION: Hart Schaffner Brands Draw No Competing Bids
HOVNANIAN ENTERPRISES: Incurs $84.4MM Net Loss in Oct. 31 Quarter
HUNTER FAN: Moody's Affirms 'B3' CFR; Rates Term Loan 'Caa1'
INDYMAC BANCORP: FDIC Approaches Endgame in Clean Up
INSPIRATION BIOPHARMACEUTICALS: Sale Approval Hearing on Jan. 24

INTERLEUKIN GENETICS: Pyxis Innovations Holds 55.7% Equity Stake
INTERSTATE BAKERIES: Trust Wins Clawback Suit v. Premium Food
IZEA INC: Acquires Twitter Marketing Platform FeaturedUsers
JEFFERSON COUNTY, AL: Birmingham Suit Over Hospital Closure Stayed
JERATH HOSPITALITY: Balloon Payments Allowed Under Bankruptcy Code

JOLIET CROSSINGS: Files for Chapter 11 in Chicago
JOURNAL REGISTER: Delays Auction in Response to Objections
LEHMAN BROTHERS: Milbank, et al., Final Fee Applications Approved
LEHMAN BROTHERS: U.S. Trustee Opposes Milbank's Dual Roles
LEVI STRAUSS: Names Harmit Singh as Chief Financial Officer

LIFECARE HOLDINGS: S&P Withdraws 'D' Corporate Credit Rating
LICHTIN/WADE LLC: ERGS Fails in Bid to Reject AMG Claim
LICHTIN/WADE LLC: Aviation Management Declared as Insider
MAMMOTH LAKES, CA: S&P Hikes COPs Rating to 'BB+'
MARKETING WORLDWIDE: Asher Enterprises Holds 9.9% Equity Stake

METALDYNE LLC: American Securities Completes $800MM Acquisition
MF GLOBAL: SIPA Trustee in Dispute Over Letters of Credit
MF GLOBAL: $46 Million in Professional Fees Unpaid
MTS LAND: Amends List of 20 Largest Unsecured Creditors
MORGAN'S FOODS: JCP Investment Discloses 15.8% Equity Stake

NATIONWIDE MUTUAL: Fitch Holds 'BB+' Preferred Securities Rating
NAVISTAR INT'L: Moody's Cuts CFR/PDR to 'B3'; Outlook Stable
NEOGENIX ONCOLOGY: Loses Control of Chapter 11 Case
NEWPAGE CORP: Authorized to Enter Into Exit Financing Letter
NIELSEN FINANCE: Fitch Affirms 'BB' Issuer Default Rating

NRG ENERGY: S&P Affirms 'BB-' CCR After GenOn Merger Closes
PENN NATIONAL: S&P Cuts Rating on 8.75% Subordinated Notes to BB-
POTLATCH CORP: S&P Lowers Rating on 6.95% Debentures to 'BB'
ROCKIES EXPRESS: Moody's Affirms 'Ba1' CFR/PDR; Outlook Negative
RYMAN HOSPITALITY: S&P Raises Rating on 6.75% Notes Due 2014

SAND SPRING: Plan Filing Exclusivity Extended to Feb. 28
SECUREALERT INC: Advance Technology Discloses 9.7% Equity Stake
SEARS HOLDINGS: Elects Paul DePodesta to Board of Directors
SENSUS USA: S&P Revises Outlook on 'B+' CCR on Weak Credit Metrics
SI ORGANIZATION: Moody's Affirms 'B2' CFR/PDR; Outlook Stable

SOUTH FRANKLIN: Scheduled $53.7MM in Assets, $150MM in Debts
SOUTHERN AIR: Plan Approval Faces Creditor Opposition
SPIRIT REALTY: To Pay Two Cash Dividends on January 15
SPRINT NEXTEL: Offers to Buy Rest of Clearwire for $2.9 Apiece
STABLEWOOD SPRINGS: Files for Chapter 11 in San Antonio

STAR BUFFET: Wins Confirmation of Full-Payment Plan
TENAKA OKLAHOMA: S&P Affirms 'BB-' Rating on $73MM Secured Bonds
TEXACO INC: 2nd Cir. Upholds Discharge Order on Kling et al. Claim
THQ INC: Files for Chapter 11 to Sell to Clearlake
THQ INC: Proposes Quick Sale; Asks for Jan. 9 Auction

THQ INC: Case Summary & 40 Largest Unsecured Creditors
TIMOTHY BLIXSETH: 9th Cir. Addresses Involuntary Case Venue
TWG CAPITAL: Seeks Extension to File Creditor-Payment Plan
TRAVELPORT HOLDINGS: Amends 2006 Credit Agreement with UBS
TRI-VALLEY: Wins More Time to File Chapter 11 Proposal

TRIUS THERAPEUTICS: Expects $4.9MM Proceeds from Stock Sale
US FOODS: S&P Affirms 'CCC+ Rating on Upsized $975MM Notes
VALENCE TECHNOLOGY: Defeats Motion for Official Equity Committee
VENTAS INC: Moody's Affirms '(P)Ba1' Preferred Stock Shelf Rating
VERTIS HOLDINGS: BDO Consulting Okayed as Committee Advisor

VERTIS HOLDINGS: Gets Final Order to Use Term Loan Lenders' Cash
VERTIS HOLDINGS: Cooley LLP Approved as Committee's Lead Counsel
VERTIS HOLDINGS: Cousins Okayed as Committee's Delaware Counsel
VITRO SAB: New Strategy May Persuade Bondholders to Back Off
VOYAGEUR ACADEMY: S&P Affirms 'BB' Rating on $17.4MM Revenue Bonds

WARNER MUSIC: Incurs $112 Million Net Loss in Fiscal 2012
WASHINGTON MUTUAL: Court Rejects Oregon Revenue Department's Claim
WESTERN REFINING: Moody's Hikes Corp. Family Rating to 'B1'
WJO INC: Can Hire Roberto Ponziano as Special Counsel
WJO INC: Patient Care Ombudsman to Step Down

WJO INC: Trustee Can Hire Leonard Sciolla as Special Counsel
WKI HOLDING: S&P Withdraws 'B' Corp. Credit Rating on Request
ZHONE TECH: Gets 180-Day Period to Regain Nasdaq Compliance

* Fitch Says ILFC Sale to Chinese Investors has Unique Attributes
* Moody's Says Public Finance Credits Face New Risk After Sandy
* Moody's Sees Few Signs of Liquidity Stress Heading Into 2013

* Circuit to Rule on Lawyers' Liability on Future Fees
* New Michigan Law Allows Chapter 9 Bankruptcy

* 7th Cir. Appoints Halfenger as E.D. Wis. Bankruptcy Judge

* BOOK REVIEW: Performance Evaluation of Hedge Funds



                            *********

ACCURIDE CORP: Moody's Cuts CFR to 'B3'; Outlook Negative
---------------------------------------------------------
Moody's Investors Service lowered Accuride Corporation's ratings -
- Corporate Family and Probability of Default Ratings to B3 from
B2. In a related action, Moody's lowered rating on Accuride's $310
million senior secured notes to B3 from B2. The rating outlook
remains negative. The company's Speculative Grade Liquidity Rating
was affirmed at SGL-3.

The following ratings were lowered:

  Corporate Family Rating, to B3 from B2;

  Probability of Default, to B3 from B2;

  Senior secured notes, to B3 (LGD4, 56%);

The following rating was affirmed:

  Speculative Grade Liquidity Rating, at SGL-3

The asset based revolving credit is not rated by Moody's.

Rating Rationale

The lowering of Accuride's Corporate Family Rating to B3 reflects
the company's weak operating performance over recent quarters and
the expectation that softness in commercial vehicle demand will
continue to pressure results into 2013. For the LTM period ending
September 30, 2012 Accuride's EBIT/Interest expense (including
Moody's standard adjustments) was 0.5x. Accuride's operations are
being impacted by decreased commercial vehicle OEM production
levels in North America and increased competition in the
aftermarket from low cost country sourced wheels. These factors
have resulted in the company dramatically lowering profit and free
cash flow guidance for fiscal 2012. Accuride has announced a
number of staff and other expense reductions, and plant downtime
to help offset expected revenue softness over the near-term. These
actions follow significant capital expenditure and restructuring
actions take in late 2011 and in 2012 to address operational
issues at the company's Gunite operations, and consolidation
actions in the company's other operations including wheel
manufacturing.

The negative rating outlook incorporates Accuride's credit metrics
which are expected to remains weak into 2013. The conclusion of
restructuring actions at Gunite and Imperial in early 2013 should
result in improved operations. As more certainty emerges on the
impact of U.S. fiscal policies, pent up demand driven by an aging
commercial vehicle fleet may support higher build rates which may
support a stable outlook. However, if consumer spending sentiments
and the resulting demand for commercial vehicles are adversely
affected, Accuride's near-term liquidity may be constrained.

Accuride is anticipated to have an adequate liquidity profile over
the near-term supported by cash balances and availability under
the ABL revolving credit facility. As of September 30, 2012, cash
balances were approximately $20.3 million. The company's updated
2012 profit guidance provides for significantly lower free cash
flow generation than previously anticipated. The company's free
cash flow generation in 2013 is likely to be break-even at best as
softness in commercial vehicle build rates continues offset
somewhat by lower capital expenditures. Liquidity is supported by
a $100 million asset based revolving credit facility maturing in
July 2014. As of September 30, 2012, the facility had
approximately $20 million outstanding, and borrowing base
availability of $59.4 million. The revolving credit facility has a
springing minimum fixed charge coverage ratio test of 1.1x if
excess availability falls below the greater of 15% of the
commitment or $10 million. Access to the ABL revolving credit
facility is expected over the near term. The senior secured note
has no financial covenants nor debt amortization requirements.

Future events that have the potential to improve Accuride's
outlook include improving production levels in the company's
commercial vehicle end-markets, or further enhancement of
operating margins from industry growth and the company's operating
improvement actions, consistent positive free cash flow
generation, and EBIT/interest expense coverage maintained over
1.x.

Accuride's ratings could be driven lower if North American
commercial vehicle production continues to deteriorate without
offsetting restructuring actions resulting in Moody's expectation
of sustained negative free cash flow, or a deteriorating liquidity
profile.

The principal methodology used in rating Accuride was the Global
Automotive Supplier Industry Methodology published in January
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.

Accuride Corporation, headquartered in Evansville, IN, is a
diversified North American manufacturer and supplier of commercial
vehicle components. The company's products include commercial
vehicle wheels, wheel-end components and assemblies, truck body
and chassis parts, and other commercial vehicle components.
Revenues for the LTM period ending September 30, 2012 were
approximately $996 million.


ACCURIDE CORP: S&P Cuts CCR to 'B-' on Softening Truck Demand
-------------------------------------------------------------
Standard & Poor's Ratings Services owered its corporate credit
rating on Evansville, Ind.-based commercial-vehicle component
supplier Accuride Corp. to 'B-' from 'B'. The outlook is negative.
"We have also lowered the issue-level rating on the company's
senior secured notes to 'B-' from 'B'. The recovery rating remains
'4', indicating our expectation for average (30% to 50%) recovery
in the event of a payment default," S&P said.

"The ratings on Accuride reflect Standard & Poor's view that the
company has a 'highly leveraged' financial risk profile and a
'vulnerable' business risk profile, according to our criteria,"
said Standard & Poor's credit analyst Lawrence Orlowski. "We think
the company continues to make some progress in its turnaround. But
Class 8 truck orders have been weak, causing original equipment
manufacturers (OEMs) to reduce their build schedules during the
third and fourth quarters. Volumes are down significantly in the
second half of the year compared with the first half. The loss of
standard position at both Paccar and Navistar and the continued
offshore pressure at Gunite and in the aftermarket steel wheels
business has hurt the company's revenue projections. Also, we
think Navistar, a large customer of Accuride, has suffered market
share losses."

"The Brillion unit's monthly order backlog had fallen in September
by about 40%, compared with the average of the July and August
orders. While the business is still profitable, the falloff has
reduced sales and profit expectations for the rest of the year.
Returning the Imperial business to profitability continues to be a
challenge. The company is negotiating with customers for higher
prices or else it may exit those contracts," S&P said.

"Credit metrics continue to deteriorate. We expect leverage to be
6.5x at the end of 2012 and 6x at the end of 2013. Moreover, by
the end of the 2012, we expect liquidity to be about $60 million.
Under our base assumptions, Accuride will probably have breakeven
free cash flow in 2013. However, given that soft demand will
likely extend into 2013, there is significant uncertainty
surrounding our base case. In the first quarter, liquidity could
dip below $50 million," S&P said.

"At the same time, the company has strengthened its Wheels
business and continues to make progress fixing its Gunite
business. For instance, the company has consolidated its heavy-
duty wheel production at its Henderson and Monterrey facilities
and is now profitable at its London, Ontario, facility because of
better agreements with customers and the Canadian Auto Workers
union. Also, aluminum wheel capacity has doubled since 2011 and
should enable the company to supply customer needs in this growing
segment. In addition, the company has been implementing LEAN
systems to improve operational and financial efficiencies and is
reducing head count by 14% to adjust to current demand trends. At
its Gunite business, the company has completed 90% of its
operational stabilization plan and 85% of its machining and
assembly investment. Management is consolidating the Elkhart and
Brillion machining facilities into the Rockford facility and is
expected to close at the end of the first quarter of 2013.
Management believes that, based on operational improvements in
manufacturing, distribution and supply chain, the company can
increase EBITDA margins by 10% to 12%," S&P said.

"Accuride has good market share, because it is North America's
largest manufacturer of heavy steel wheels and other commercial-
truck components. Still, its markets are extremely cyclical, and
its high fixed-cost base and capital intensity can lead to large
fluctuations in profitability. Geographic diversity, though, is
minimal. The U.S. market accounts for more than 90% of Accuride's
total revenues, and Canada and Mexico account for nearly all the
remainder. The company plans to expand internationally, which we
expect to be a multiyear process. The customer base is highly
concentrated. The top four customers accounted for about 54% of
2011 revenues, although Accuride has longstanding relationships
with each of these customers. We believe any unrecouped increases
in commodity costs, primarily for steel and aluminum (the costs
for which remain volatile) are a further risk. Accuride has
agreements with customers that allow it to pass on higher costs,
but these often have a lag period and can absorb liquidity until
recovered," S&P said.

"We expect commercial-vehicle production in North America to be
flat or slightly negative in 2013. Truck freight tonnage, a key
indicator for truck demand overall, but particularly for heavy-
duty Class 8 trucks, rose 3.7% sequentially in November after
falling 3.7% in October 2012. Year over year, truck freight
tonnage was up 1%. The strength of recovery in commercial-vehicle
demand remains subject to the sustainability of economic recovery
in many markets. Also, although the average age of the U.S. Class
8 truck fleet remains near historically high levels, we believe
trucking companies could allow their fleets to age further in this
economic cycle if the recovery in freight tonnage falters," S&P
said.

"During its third quarter ended Sept. 30, 2012, Accuride's sales
decreased 10.6% because of lower product demand from commercial-
truck and aftermarket customers. Adjusted EBITDA margins for
continuing operations were 5% compared with 8% a year earlier,
mainly as a result of reduced sales and the adverse
impact of operational inefficiencies," S&P said.

"Our outlook on Accuride is negative. We assume commercial-truck
demand in North America will fall for the rest of 2012 and into
2013. We expect free cash flow to be negative in 2012 given the
company's investments to strengthen its Wheels business and fix
the Gunite business. However, we expect free cash flow to be
breakeven in 2013," S&P said.

"We could lower our rating if total cash plus revolving credit
availability falls significantly below $50 million. If the economy
weakens in 2013 and commercial truck demand continues to decline,
or if the company loses a significant level of business from major
customers, free cash flow could fall below our expectations and
further pressure liquidity. For example, if we believed the
company would burn $20 million or more in cash flow in 2013, we
could lower the rating. In mid-2014 the company begins to face
debt maturities," S&P said.

"We could raise the ratings if Accuride reduces leverage--as
measured by debt to EBITDA including our adjustments--to or below
5x and produces consistent free operating cash flow that increases
total liquidity comfortably above $50 million or more. For
example, if the company were to expand gross margins to 10% or
better, and revenues rose at least 5%, we estimate that leverage
(including our adjustments) could approach 5x or better. In such a
scenario, we could revise our assessment of the financial risk
profile to 'aggressive' from highly leveraged, and, under our
criteria, this could support an upgrade of one notch. The company
would also need to refinance its 2014 maturities," S&P said.


ALETHEIA RESEARCH: Lost Right to Bankruptcy, Says U.S. Trustee
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Trustee in Los Angeles argues that Aletheia
Research & Management Inc. should be tossed from bankruptcy court.
The U.S. Trustee, an arm of the Justice Department, explained that
Aletheia was suspended by the California Secretary of State before
bankruptcy. In the U.S. Trustee's opinion, Aletheia therefore lost
the right to file for bankruptcy.

According to the report, the U.S. Trustee argues a bankruptcy
judge in California erred by ruling in 1990 that failure to pay
franchise taxes can't bar a company from filing bankruptcy.

Alternatively, the U.S. Trustee wants the Court to appoint a
trustee in Chapter 11. The bankruptcy watchdog cites the decline
in assets under management and an investigation by the U.S.
Securities and Exchange Commission.

The motion for dismissal or appointment of a trustee is on the
court's calendar for Jan. 15.

                      About Aletheia Research

Aletheia Research and Management, Inc., filed a bare-bones
Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-47718) on
Nov. 11, 2012.  Attorneys at Greenberg Glusker represent the
Debtor.  The board voted in favor of a bankruptcy filing due to
the company's financial situation and ongoing litigation.
According to the list of top largest unsecured creditors, Proctor
Investments has unliquidated and disputed claims of $16 million on
account of pending litigation.


ALTERRA CAPITAL: Moody's Affirms '(P)Ba1' Preferred Stock Rating
----------------------------------------------------------------
Moody's Investors Service has affirmed the A3 insurance financial
strength rating of Alterra Bermuda Limited and the Baa2 senior
debt ratings for subsidiaries of Alterra Capital Holdings Limited.
The outlook on the financial strength rating remains stable and
the outlook on all debt ratings has been changed to negative from
stable. This rating action follows the announcement that Markel
Corporation (senior debt Baa2 negative) has agreed to buy Alterra,
subject to shareholder and regulatory approvals.

Under the terms of the agreement, Markel will acquire Alterra for
approximately $3.13 billion, consisting of $1.0 billion in cash
and $2.13 billion in Markel common stock, based on Markel's
closing share price on December 18, 2012. Half of the cash
component will be funded by a $500 million cash dividend from
Alterra Bermuda Limited. The consideration is fixed and not
subject to variation in Superstorm Sandy loss estimates. At close,
Markel's shareholders will own approximately 69% of the combined
company on a fully diluted basis, with Alterra's shareholders
owning approximately 31%. Completion of the transaction is
contingent upon customary closing conditions, including
shareholder and regulatory approvals, and it is expected to close
in the first half of 2013.

Ratings Rationale

The affirmation of Alterra's financial strength and debt ratings
reflects a weaker credit profile following the merger but one that
still remains consistent with current rating levels. At close of
the merger, Alterra Bermuda Limited will pay a $500 million cash
dividend to Markel Corp. As a result, Alterra Bermuda's standalone
capital adequacy will weaken materially and any headroom in
Alterra group's debt capacity will be significantly reduced. Gross
underwriting leverage, a measure of capital adequacy, for the
Alterra group will rise to pro forma c.2.8x from 2.3x at 30
September 2012. Adjusted debt-to-capital will rise to pro forma
c.17% from 14% at 30 September 2012. On the positive side, Alterra
will likely benefit from better access to capital due to Markel's
name recognition.

Moody's has changed the outlook for Alterra's debt ratings to
negative from stable to reflect the outlook change for Markel's
debt to negative from stable. Should Markel's senior debt end up
lower than its current Baa2 rating, Moody's would expect to
harmonize Alterra's senior debt rating (currently Baa2) with
Markel's senior debt rating, rather than having Alterra's debt
rated higher than the parent's (i.e., Markel's) debt. Conversely,
should Markel's ratings be ultimately affirmed with a stable
outlook, Alterra's debt ratings could be affirmed with a stable
outlook.

The negative outlook on Alterra's debt also reflects a weaker
capital profile at Alterra Bermuda Limited after the $500 million
dividend at close and the possibility for further capital
extraction out of Alterra's subsidiaries in the future, weakening
direct credit support for the debt. Alterra's US specialty
business overlaps with Markel's business, potentially lessening
the need to keep capital at the Alterra US subsidiaries. Concerns
about reduced debt service capacity at the Alterra operating
companies are mitigated in part by Markel's signal that it may
guarantee the Alterra debt at some point in the future.

The following rating has been affirmed with a stable outlook:

Alterra Bermuda Limited -- insurance financial strength at A3

The following ratings have been affirmed with a negative outlook:

Alterra Finance LLC -- guaranteed senior unsecured debt at Baa2;
provisional shelf ratings for guaranteed senior debt at (P)Baa2,
guaranteed subordinated debt (P)Baa3;

Alterra USA Holdings Limited -- guaranteed senior unsecured debt
at Baa2;

Alterra Capital Holdings Limited -- long-term issuer rating at
Baa2, provisional shelf ratings for senior debt at (P)Baa2,
subordinated debt (P)Baa3 and preferred stock (P)Ba1;

Alterra Capital Trust I -- provisional shelf rating for
guaranteed trust preferred securities at (P)Baa3.

Alterra Capital Holdings Limited provides specialty insurance and
reinsurance products to corporations, public entities, and
property and casualty insurers. For the first nine months of 2012,
the company reported gross premiums written of $1.9 billion, net
income available to common shareholders of $196 million and
shareholders' equity of $2.9 billion at 30 September 2012.

The principal methodology used in this rating was the Moody's
Global Rating Methodology for Reinsurers published in December
2011.


AMERICAN AIRLINES: Nears Deal With USAir on Treatment of Pilots
---------------------------------------------------------------
Susan Carey and Mike Spector, writing for The Wall Street Journal,
report that people close to the discussions said AMR Corp.'s
American Airlines and US Airways Group Inc. are nearing a
tentative deal on how their pilots would be treated in a potential
merger, a crucial step toward determining whether the two airlines
will combine when the former emerges from bankruptcy proceedings
next year.

One source told the Journal that the talks include airline
executives, as well as representatives of AMR's creditors
committee and both airlines' pilots unions.  The talks have been
under way in Dallas for more than a week, with a goal of reaching
an agreement before AMR's board meets Jan. 9.  That source said
the meetings have been held on weekends and some sessions have run
until midnight as the parties try to hammer out terms and assess
the costs.  Talks are expected to continue next week, one person
said.

The Journal notes American's unionized flight attendants said on
Thursday that they, too, had been invited to join the discussions,
which are expected to turn to integrating other workers at some
point.

The sources told WSJ that, until American and its creditors have a
clearer picture of pilot labor costs and work rules, discussions
on how to split stock in a merger and how much the new airline
would be worth are on hold.  They cautioned that the negotiations
could be delayed because of the complexity of issues, for example,
which pilots would handle certain kinds of flights in a combined
airline.

WSJ also reports that American's bondholders are becoming more
influential.  Sources told WSJ that, to better sway American's
bankruptcy proceedings, an ad hoc group of bondholders is close to
teaming up with creditors holding AMR-backed bonds that were
issued by municipalities for airport improvements.  Together they
hold at least $2 billion in debt, putting them in a position to
effectively block any bankruptcy-exit proposal from American, the
people said.  Among others, the ad hoc bondholders include J.P.
Morgan Securities and Litespeed Management LLC, while the muni-
bondholders include Blackrock Inc., Nuveen Investments and
OppenheimerFunds.

US Airways sent a merger proposal to American and its creditors
committee in mid-November suggesting American creditors should own
70% of a combined company and US Airways shareholders 30%.  US
Airways proposed the merged carrier be run by its chief, Doug
Parker.

                         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: Selling Kensington Property for $23-Mil.
-----------------------------------------------------------
Jacqueline Palank, writing for Dow Jones' Daily Bankruptcy Review,
reports that American Airlines parent AMR Corp. is selling a
townhouse in London's upscale Kensington neighborhood, a brief
walk from the palace that's home to Prince William and Kate
Middleton.  AMR is seeking bankruptcy-court approval for a private
sale to CG Property Nominees Ltd., which court papers show has
offered 14.15 million British pounds ($23.02 million) for the
home.  AMR won't test the offer at an auction.

DBR, citing a Reuters report, said the home has been used as a
residence for AMR?s senior executives, including current CEO Tom
Horton, and for corporate functions since the company purchased it
in the early 1990s.

DBR relates the five-bedroom home is 5,242 square feet and sits on
one of Britain's most expensive streets.  According to Reuters,
the property is a 10-minute walk from Kensington Palace, the
former home of Princess Diana.  The Duke and Duchess of Cambridge
have a cottage on the palace grounds but expect to make a
renovated palace apartment their full-time home next year.

                         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: Haynes Lawyers Can Join Airline's Programs
-------------------------------------------------------------
At the behest of AMR Corp., the Bankruptcy Court authorized the
participation of two associates at Haynes and Boone LLP in
American Airlines Inc.'s programs.

The court order authorized Autumn Highsmith and Anya Cooper to
participate in the airline's secondment program and lend-a-lawyer
program, respectively.

American Airlines will pay Haynes a monthly flat fee of $27,500
for Ms. Highsmith's participation in the secondment program, and
a monthly flat fee of $25,000 for the other associate.

                         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: Creditors Want All-Stock Deal With US Airways
----------------------------------------------------------------
American Airlines creditors are seeking a potential agreement
with US Airways Group and they want it to be an all stock
contract instead of one that pays claims in cash, Marketsareopen,
one of the leaders in providing investment alerts on U.S. stocks,
pointed out.

This information, according to the report, has been revealed by
three sources having knowledge about the move that highlights
confidence in a combined airline.

The Marketsareopen report said AMR creditors are planning on
capturing a huge benefit from a merger if the airline opts for
emerging out of the state of bankruptcy in an agreement with its
inferior competitor.

The report pointed out that creditors, who are involved in the
bankruptcy, often demand at least a portion of their claims in
cash instead of stock of a restructured company with an
irresolute trading value.  The choice of AMR's creditors to
engage in an all-stock agreement may imply a spark of confidence
in the projected merger.

Marketsareopen said US Airways investigated AMR creditors on how
they all preferred being paid off before putting forward a formal
all-stock contract offer at a meet-up with the creditors
committee.  The discussions relating the agreement among AMR, its
credit-holders and US Airways are happening at an advanced phase,
the report said.  Their decision of emerging out as a free
company or pursuing a combination will be reached sometime in
January of 2013.

Shares of the company soared 13% in the opening session.

Marketsareopen's team is engaged in providing valuable and
updated news information on U.S. stocks on a regular basis.
Marketsareopen's instant stock news on Major Gainers, Hot Stocks
and various other stocks, guides investors in making the wise
stock market investments decision.

                         American Airlines

AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.

AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.

American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights.  The
combined network fleet numbers more than 900 aircraft.

The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011.  AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.

AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.

Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors.  Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel.  Rothschild
Inc., is the financial advisor.   Garden City Group Inc. is the
claims and notice agent.

Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings.  Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.

Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or  215/945-7000).


AMERICAN AIRLINES: American Eagle Dispatchers Ratify New Contract
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that AMR Corp., the parent of American Airlines Inc.,
negotiated a six-year contract with the union representing
dispatchers at American Eagle, the regional airline subsidiary.
AMR was scheduled to seek bankruptcy approval of a new contract
with pilots at American Airlines at a hearing Dec. 19.

According to the report, the American Eagle dispatchers ratified a
new contract that changes neither wages nor medical benefits.
There are 1.5% pay increases in January 2015 and 2016.  The union
will receive a $700,000 cash payment to reimburse expenses of
negotiating the new contract.  On behalf of dispatchers, the union
also will have a $6.1 million unsecured claim against American
Airlines.  The new dispatchers' contract was scheduled for
bankruptcy court hearing on Dec. 21.

                         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 RENAL: Moody's Hikes Corp. Family Rating to 'B2'
---------------------------------------------------------
Moody's Investors Service upgraded American Renal Holdings, Inc.'s
Corporate Family and Probability of Default Ratings to B2 from B3.
Concurrently, Moody's also upgraded American Renal's senior
secured revolving credit facility to Ba3 from B1, its senior
secured notes to B1 from B2, and its senior PIK toggle notes to
Caa1 from Caa2. The rating outlook is stable.

The rating action reflects an overall improvement in American
Renal's operating performance, along with a reduction in leverage
of almost two turns to 5.5 times, for the period ending September
30, 2012. In addition, it's Moody's belief that American Renal
will be able to sustain profitable growth, while funding expansion
in a manner that doesn't weaken credit metrics, despite the
challenging reimbursement environment.

Following is a summary of Moody's rating actions and revised LGD
assessments.

American Renal Holdings, Inc.:

Ratings Upgraded:

Corporate Family Rating to B2 from B3

Probability of Default Rating to B2 from B3

$37.5 million senior secured revolver expiring 2015, to Ba3
(LGD2, 23%) from B1 (LGD2, 24%)

$250 million 1st lien senior secured notes due 2018, to B1
(LGD3, 34%) from B2 (LGD 3, 35%)

American Renal Holdings Company, Inc.:

$125 million senior PIK toggle notes due 2016, to Caa1 (LGD5,
86%) from Caa2 (LGD5, 88%)

Rating Affirmed:

Speculative Grade Liquidity Rating, SGL-2

Ratings Rationale

American Renal's B2 Corporate Family Rating reflects the
aggressive financial policy of the company, characterized by its
high leverage and a $128 million debt financed dividend in 2011.
The rating also reflects the company's modest size and Moody's
expectation that American Renal will use available cash flow to
aggressively grow through the development of de novo centers.
Finally, the rating reflects the risks associated with its sole
focus on the dialysis services marketplace and its high
concentration of revenues from government based programs.

The rating does benefit from the company's unique strategy of
developing clinics in partnership with practicing nephrologists,
which has resulted in favorable operating performance and
relatively rapid maturation of newly developed centers. The rating
also reflects the relatively stable business profile characterized
by increasing incidences of end stage renal disease (ESRD) and the
medical necessity of the service provided.

The stable rating outlook reflects Moody's expectation that the
company will continue to recruit and partner with nephrologist
physicians, which should drive treatment and top line growth. The
stable outlook also reflects Moody's expectation that the company
will look to grow primarily through de novo development of new
centers, which is expected to constrain available free cash flow.

Moody's could downgrade the rating should the company take on
additional debt to fund either an acquisition or dividends, such
that leverage is sustained above 6.5 times. Additionally, Moody's
could downgrade the ratings if it anticipates that the company
will have negative free cash flow coverage of debt for a sustained
period of time.

Though not anticipated in the near-term, a rating upgrade could be
considered if American Renal substantially increases its size,
while geographically diversifying its clinics. More specifically,
if the company improves operating results or repays debt, such
that adjusted debt to EBITDA is sustained below 4.5 times and free
cash flow to adjusted debt to around 8%, Moody's could upgrade the
ratings.

The principal methodology used in rating American Renal Holdings,
Inc. was the Global Healthcare Service Provider Industry
Methodology published in December 2011. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.

Headquartered in Beverly, MA, American Renal Holdings, Inc.
(American Renal) is a provider of outpatient dialysis services to
patients with chronic kidney failure. At September 30, 2012,
American Renal operated 125 centers in 21 states and the District
of Columbia. The centers are jointly owned by nephrologists
partners. The company provides managerial, clinical, regulatory,
accounting, financial, technological and administrative support
services to the joint venture partners.


AMES DEPARTMENT: Proposes Sale of Residual Assets to Oak Point
--------------------------------------------------------------
Ames Department Stores, Inc., et al., ask the U.S. Bankruptcy
Court for the Southern District of New York to authorize the sale
of certain judgments and other residual assets to Oak Point
Partners, Inc.

Oak Point agreed to pay the Debtors an initial payment of $50,000
and then 60% of all proceeds from the accounts in excess of
$75,000.  Oak Point will continue to pay the Debtors the
percentage share of all accounts prior to the earlier of (a) the
entry of a final decree in the Bankruptcy Case or (b) Dec. 31,
2013.

The purchase agreement provides that the sale of the accounts to
Oak Point is on an "As Is, Where Is" basis.

The Debtors intend to complete the proposed sale of the accounts
to Oak Point by private sale and do not intend to conduct an
auction of the residual assets, as they are difficult to value and
the cost associated with the auctioning of the assets would exceed
any proceeds received.

                   About Ames Department Stores

Rocky Hill, Connecticut-based Ames Department Stores was founded
in 1958.  At its peak, Ames operated 700 stores in 20 states,
including the Northeast, Upper South, Midwest and the District of
Columbia.  In April 1990, Ames filed for bankruptcy protection
under Chapter 11 of the U.S. Bankruptcy Code.  In Ames I, the
retailer closed 370 stores and emerged from chapter 11 on Dec. 30,
1992.

Ames filed a second bankruptcy petition under Chapter 11 (Bankr.
S.D.N.Y. Case No. 01-42217) on Aug. 20, 2001.  Togut, Segal
& Segal LLP; Weil, Gotshal & Manges; and Storch Amini Munves PC;
Cadwalader, Wickersham & Taft LLP.  When the Company filed for
protection from their creditors, they reported $1,901,573,000 in
assets and $1,558,410,000 in liabilities.  The Company closed all
of its 327 department stores in 2002.

Ames and its affiliates filed a consolidated Chapter 11 Plan, and
a related Disclosure Statement explaining the Plan with the Court
on Dec. 6, 2004.  A full-text copy of Ames' Chapter 11 Plan
is available at no charge at:

    http://bankrupt.com/misc/ames_chapter_11_plan.pdf

and a full-text copy of Ames' Disclosure Statement is available
at no charge at:

    http://bankrupt.com/misc/ames'_disclosure_statement.pdf

A hearing to determine the adequacy of the Disclosure Statement
explaining Ames' Plan has not yet been scheduled.


AMPAL-AMERICAN: Agrees With Creditors on Chapter 11 Plan
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Ampal-American Israel Corp. and the official
creditors' committee agreed on the economic terms, although not
all details, for a Chapter 11 reorganization plan.  Consequently,
the company and the committee each filed a version of a plan and
disclosure materials in advance of a hearing Dec. 20.

According to the report, the plan proposes to pay unsecured
creditors by giving them all of the new preferred stock with a
total stated value equal to all unsecured claims. The stock will
pay 5% dividends.  Shareholders will retain existing common stock.
Within 90 days of emergence from bankruptcy, creditors will have
the option of requiring the company to purchase the preferred
stock for 75% of face value.  If the so-called put is elected up
until the first anniversary of plan approval, the repurchase price
is 65% of stated value.

The report notes that the company will have the right to buy the
preferred stock at the same prices.

The committee previously said that Ampal's "most significant
equity interest" is a "contingent arbitration claim against the
Egyptian government."

                       About Ampal-American

Ampal-American Israel Corporation and its subsidiaries --
http://www.ampal.com/-- acquired interests primarily in
businesses located in Israel or that are Israel-related.  Ampal is
seeking opportunistic situations in a variety of industries, with
a focus on energy, chemicals and related sectors.  Ampal's goal is
to develop or acquire majority interests in businesses that are
profitable and generate significant free cash flow that Ampal can
control.

Ampal-American filed a voluntary petition for Chapter 11
reorganization (Bankr. S.D.N.Y. Case No. 12-13689) on Aug. 29,
2012, to restructure the Company's Series A, Series B and Series C
debentures.  Bankruptcy Judge Stuart M. Bernstein presides over
the case.


APPLESEED'S INTERMEDIATE: Ohio Tax Agency May Withdraw Claim
------------------------------------------------------------
On July 18, 2011, the State of Ohio Department of Taxation timely
filed a priority tax claim against Appleseed's Intermediate
Holdings LLC, et al., seeking $290,969 and a general unsecured
claim of $156,863 for commercial activities taxes, penalties, and
interest, allegedly imposed pursuant to an Ohio statute.  The
Reorganized Debtors thereafter objected to the ODT Claim and asked
the Court to disallow or expunge it.  The Debtors based their
Objection on arguments that the tax violated the Commerce Clause
of the United States Constitution.  When the Debtors sought a
prompt disposition of the ODT Claim, ODT began motion practice
before the District Court, delaying a determination of the
validity of the ODT Claim.  ODT filed a Motion to Dismiss or
Abstain in the District Court.  The Debtors moved for judgment on
the pleadings.  By Order dated April 6, 2012, the District Court
referred the case back to the Bankruptcy Court to manage discovery
and ascertain the genuine issues of material fact before
scheduling the matter for trial in the District Court.  The
District Court denied ODT's Motion to Reconsider the Order.

ODT now seeks to withdraw the ODT Claim with prejudice on the
principal grounds that the Department has cancelled the tax
assessment, rendering the claim unenforceable under 11 U.S.C. Sec.
502(b).  The Debtors promptly filed their response opposing
withdrawal unless they "will not have to incur in the future the
expense and the burden they have already incurred to litigate" the
legal issues implicated by the ODT Claim and providing a proposed
form of order permitting ODT to withdraw the ODT Claim.

At the Oct. 11, 2012 status conference, the parties disagreed as
to the appropriate language and scope of the Proposed Order.  At
the Court's request, the parties submitted letter memoranda
briefing three provisions of the Proposed Order, of which only two
remain in dispute.  The parties focus their arguments on paragraph
8 of the Debtors' Proposed Order:

     "The Department shall not issue any CAT assessments against
any of the Reorganized Debtors, and shall withdraw any CAT
assessments against any of the Reorganized Debtors, either
individually or in any combination as a "Combined Group," for any
period prior to or after the filing of the petition, based on the
argument, advanced as a basis for the assessments and Proofs of
Claim in this matter, that the Reorganized Debtor has "bright line
presence" pursuant to Ohio Rev. Code 5751.01(I)(3)."

The Debtors argue that this language is consistent with the relief
sought in the Objection and resolves the sole legal issue
presented.

In response, ODT denies that the matter is ripe for decision and
raises a host of constitutional, jurisdictional, and procedural
concerns with what it describes as an injunction on prospective
post-petition assessment liability.  In short, the parties
disagree as to the appropriate scope and preclusive effect of an
order permitting the voluntary withdrawal of the ODT claim.

The second dispute concerns proposed language in the recitals
describing "the relief requested" in the Debtors' Objection as a
"core proceeding pursuant to 28 U.S.C. Sec. 157(b)(2)(B)."  The
Debtors argue that this proceeding is properly characterized as
core under that provision because it concerns the allowance or
disallowance of claims against the estate, and their Objection to
the ODT claim triggered the Court's obligation to allow or
disallow it under 11 U.S.C. Sec. 502(b)(1).

ODT asserts that the proceeding is non-core to the extent it
requires the Court to decide the constitutionality of the CAT.
According to ODT, the proposed language of paragraph 8 improperly
precludes prospective CAT assessment on the Debtors, operates as a
substantive ruling on the constitutional question, and renders
this proceeding non-core.

In a Dec. 19 decision, Bankruptcy Judge Kevin Gross granted ODT's
Motion to Withdraw.  The order, Judge Gross said, will not provide
for issue preclusion pursuant to the proposed paragraph 8 or the
alternative language submitted in the Debtors' letter memorandum,
dated Oct. 19, 2012.  The Court cannot condition withdrawal of the
ODT Claim on language directly or indirectly precluding ODT from
assessing future CAT taxes on the Debtors.  Absent full litigation
of the Debtors' constitutional challenge, the Court is not
prepared to issue a procedural order that operates as a
substantive ruling.  Future assessments of CAT liability must
stand or fall on their own merits.

Further, while the Court agrees that this proceeding is core under
Sec. 157, Judge Gross said the order will not include language
characterizing it as a substantive ruling that grants the relief
requested in the Objection.  The Court does not reach the question
of the constitutionality of the Ohio CAT and makes no comment on
that issue.  The judge said the order operates as a procedural
grant of ODT's Motion to Withdraw with prejudice.  Accordingly,
the order does not address, and need not refer to, the relief
requested in the Objection.

"The parties to the present dispute are locked in an interesting,
maneuvering and procedural struggle. It is best to go directly to
the background and facts before the Court comments further," Judge
Gross noted.

A copy of Judge Gross' Dec. 19 Memorandum Opinion is available at
http://is.gd/oRBTVYfrom Leagle.com.

                   About Appleseed's Intermediate

Based in Beverly, Massachusetts, Appleseed's Intermediate Holdings
LLC, aka Appleseed's Intermediate Holdings, Inc., aka Orchard
Brands sells clothing to people 55 and older.  Orchard Brands has
17 brands including Appleseed's, Draper's & Damon's, Gold Violin,
Haband and Norm Thompson.  It publishes catalogs and has stores
under its Appleseed's and Draper's & Damon's brands.  It has
annual sales of about $1 billion and earnings before interest,
taxes, depreciation and amortization are about $50 million.

Appleseed's is owned by Golden Gate Capital Corp., which also
holds stakes in retailers Express Inc., Eddie Bauer Holdings Inc.
and Zale Corp.

Appleseed's Intermediate and its affiliates filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 11-10160) on
Jan. 19, 2011.  Appleseed's Intermediate estimated assets at
$100 million to $500 million and debts at $500 million to
$1 billion in its Chapter 11 petition.

Richard M. Cieri, Esq., Joshua A. Sussberg, Esq., at Brian E.
Schartz, at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy
counsel.  Domenic E. Pacitti, Esq., at Klehr Harrison Harvey
Branzburg LLP, serves as local counsel to the Debtors.  Moelis &
Company LLC is the Debtors' investment banker and financial
advisor.  Alvarez & Marshal North America, LLC, is the Debtors'
restructuring advisor.  Pricewaterhousecoopers LLP is the Debtors'
independent auditor.  Kurtzman Carson Consultants LLC is the
notice, claims and balloting agent.

Jay R. Indyke, Esq., Cathy Hershcopf, Esq., Brent Weisenberg,
Esq., and Richelle Kalnit, Esq., at Cooley LLP, in New York, and
Robert K. Malone, Esq., Michael P Pompeo, Esq., and Howard A
Cohen, Esq., at Drinker Biddle & Reath LLP, in Wilmington,
Delaware, represent the Official Committee of Unsecured Creditors.

The Orchard Brands subsidiaries implemented their reorganization
plan after obtaining confirmation of the plan on April 14, 2011.
While reducing debt by $420 million, the plan created a creditors'
trust.


ARCAPITA BANK: Has Final Loan Approval, Still No Deal on Plan
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Arcapita Bank BSC received final approval from the
bankruptcy court on Dec. 18 for a $150 million loan from Fortress
Credit Corp.  The financing complies with Islamic Shariah
financing regulations.

The report recounts that originally, Arcapita intended for the
financing to be provided by Silver Point Finance LLC until
Fortress made a better offer.

The report notes that Arcapita and the official creditors'
committee haven't agreed on details for a Chapter 11 plan. The
committee this week said there is no agreement on "critical
intercreditor allocation and governance issues."

The company is asking for an extension until Dec. 22 of the
exclusive right to propose a plan. Exclusivity was to have ended
Dec. 15.  The committee said it will file a plan if the company
doesn't.

The report notes that Arcapita retains the exclusive right to
solicit acceptances until Feb. 12.  That deadline can be extended.

                        About Arcapita Bank

Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19,
2012.  The Debtors said they do not have the liquidity necessary
to repay a US$1.1 billion syndicated unsecured facility when it
comes due on March 28, 2012.

Falcon Gas Storage Company, Inc., later filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012.
Falcon Gas is an indirect wholly owned subsidiary of Arcapita that
previously owned the natural gas storage business NorTex Gas
Storage Company LLC.  In early 2010, Alinda Natural Gas Storage I,
L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas
Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.)
acquired the stock of NorTex from Falcon Gas for $515 million.
Arcapita guaranteed certain of Falcon Gas' obligations under the
NorTex Purchase Agreement.

The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP
as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG Inc. as notice and claims
agent.

Milbank, Tweed, Hadley & McCloy LLP represents the Official
Committee of Unsecured Creditors.  Houlihan Lokey Capital, Inc.,
serves as its financial advisor and investment banker.

Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank.  Arcapita is not a domestic bank licensed in the United
States.  Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain.  The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition to
its Bahrain headquarters.  The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.

The Arcapita Group has roughly US$7 billion in assets under
management.  On a consolidated basis, the Arcapita Group owns
assets valued at roughly US$3.06 billion and has liabilities of
roughly US$2.55 billion.  The Debtors owe US$96.7 million under
two secured facilities made available by Standard Chartered Bank.

Arcapita explored out-of-court restructuring scenarios but was
unable to achieve 100% lender consent required to effectuate the
terms of an out-of-court restructuring.

Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from the
Grand Court of the Cayman Islands with a view to facilitating the
Chapter 11 cases.  AIHL sought the appointment of Zolfo Cooper as
provisional liquidator.


ASK MIR: Voluntary Chapter 11 Case Summary
------------------------------------------
Debtor: Ask Mir Management LLC
        18318 Sherman Way
        Reseda, CA 91335

Bankruptcy Case No.: 12-20826

Chapter 11 Petition Date: December 15, 2012

Court: United States Bankruptcy Court
       Central District of California (San Fernando Valley)

Judge: Maureen Tighe

Debtor's Counsel: Philomena N. Nzegge, Esq.
                  LAW OFFICES OF PHILOMENA N NZEGGE
                  3701 Wilshire Blvd., Suite 1120
                  Los Angeles, CA 90010
                  Tel: (213) 739-0650
                  Fax: (213) 739-8167
                  E-mail: pnnzegge@yahoo.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 Alireza Mirshojae, principal officer,
general partner.


ATI ACQUISITION: Moody's Withdraws 'Ca' Corp. Family Rating
-----------------------------------------------------------
Moody's Investor Service has withdrawn all of ATI Acquisition
Company's ratings.

The following ratings have been withdrawn:

Corporate family rating at Ca

Probability of default rating at Caa3

Senior secured revolving credit facility due 2014 at Caa3 (LGD4,
57%)

Senior secured term loan due 2014 at Caa3 (LGD4, 57%)

Subordinated credit agreement due 2015 at Ca (LGD6, 93%)

Ratings Rationale

Moody's has withdrawn the ratings because it believes it has
insufficient or otherwise inadequate information to support the
maintenance of the ratings.

ATI, based in North Richland Hills, Texas, is a postsecondary
education company focused on vocational programs that operates
career training centers and schools in Texas, Florida, New Mexico,
Arizona, and Oklahoma.


ATP OIL & GAS: Seeks Extension of Chapter 11 Plan Deadline
----------------------------------------------------------
Marie Beaudette at Daily Bankruptcy Review reports that ATP Oil &
Gas Corp. is seeking to keep control over its Chapter 11 case for
another 180 days while it pursues a dual-track restructuring that
could see it exit bankruptcy as a standalone company or under new
ownership.

                        About ATP Oil & Gas

Houston, Tex.-based ATP Oil & Gas Corporation is an international
offshore oil and gas development and production company focused
in the Gulf of Mexico, Mediterranean Sea and North Sea.

ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case
No. 12-36187) on Aug. 17, 2012.  Attorneys at Mayer Brown LLP,
serve as bankruptcy counsel.  Porter Hedges LLP serves as local
co-counsel.  Munsch Hardt Kopf & Harr, P.C., is the conflicts
counsel.  Opportune LLP is the financial advisor and Jefferies &
Company is the investment banker.  Kurtzman Carson Consultants LLC
is the claims and notice agent.  Blackhill Partners, LLC, provided
James R. Latimer, III as chief restructuring officer to the
Debtor.  Filings with the Bankruptcy Court and claims information
are available at http://www.kccllc.net/atpog

ATP disclosed assets of $3.6 billion and $3.5 billion of
liabilities as of March 31, 2012.  Debt includes $365 million on a
first-lien loan where Credit Suisse AG serves as agent.  There is
$1.5 billion on second-lien notes with Bank of New York Mellon
Trust Co. as agent.  ATP's other debt includes $35 million on
convertible notes and $23.4 million owing to third parties for
their shares of production revenue.  Trade suppliers have claims
for $147 million, ATP said in a court filing.  In its schedules,
the Debtor disclosed $3,249,576,978 in assets and $2,278,831,445
in liabilities as of the Chapter 11 filing.

An official committee of unsecured creditors has been appointed in
the case.  Evan R. Fleck, Esq., at Milbank, Tweed, Hadley &
McCloy, in New York, represents the Creditors Committee as
counsel.   Duff & Phelps Securities, LLC, serves as its financial
advisors.  The Committee tapped Epiq Bankruptcy Solutions, LLC as
its information agent.


AVIV REIT: S&P Puts 'B+' Corp Credit Rating on Watch on $300MM IPO
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
the 'B+' corporate credit rating and issue-level rating on the
company's senior unsecured notes, on Aviv REIT Inc. on CreditWatch
with positive implications.

"We placed our ratings on Aviv on CreditWatch positive following
the company's filing of a registration statement to raise
approximately $300 million through an initial public offering,"
said credit analyst Matthew Lynam. "The company intends to use
proceeds from the proposed offering to repay existing debt and
for general corporate purposes, including the potential
acquisition of properties."

"The CreditWatch placements reflect our expectation that we could
raise our corporate credit and issue-level ratings (perhaps one to
two notches) if the proposed transaction closes as planned. The
transaction would meaningfully alter the company's financial risk
profile by reducing leverage, eliminating almost all secured debt,
and enhancing Aviv's access to capital, in our opinion," S&P said.


BERNARD L. MADOFF: Peter Gets 10-Year Jail Time for Role in Fraud
-----------------------------------------------------------------
Dan Strumpf, writing for Dow Jones Newswires, report that U.S.
District Judge Laura Taylor Swain on Thursday sentenced Peter
Madoff, 67, to 10 years in prison for his actions as the top
compliance officer at his older brother's investment firm, making
him only the second person sent to prison after four years of
investigations into the multi-billion dollar fraud.  Peter had
also agreed to forfeit all of his personal assets, including a
Ferrari and more than $10 million in cash.  He, however,
maintained he never knew about his brother's Ponzi scheme and
discovered that the investment business was a fraud only after his
brother told him in December 2008.

The report notes friends and relatives sent dozens of letters to
Judge Swain in recent months describing Peter Madoff as a decent
man, eager to satisfy his chillier older brother and always living
in his shadow.

According to the report, Peter, who worked at Bernard L. Madoff
Investment Securities for 38 years, was the chief compliance
officer and responsible for conducting regular reviews of his
brother's firm to ensure it was following all trading rules and
submitting reports to regulators, authorities said in court
documents.  In reality, he was doing nothing of the sort,
authorities said.  Peter Madoff signed off on documents and made
false statements to clients and regulators that only made it
appear he was performing his compliance duties, authorities said.

The report also reports several victims of the Ponzi scheme have
said they are unconvinced of Peter's professed ignorance of the
fraud and said the brother deserved harsher time.  In a separate
report, Mr. Strumpf said the letters were written earlier this
month and disclosed publicly Wednesday.

"Just like Bernard received the maximum, if somewhat symbolic,
sentence of 150 years, I ask that you set aside whatever plea
arrangement Peter made and impose the maximum sentence possible,"
wrote Michael and Emma De Vita ahead of the sentencing, the report
relates. "We the victims still have not heard one person say, 'I
knew and I am sorry.'"

The report notes losses from Bernard Madoff's Ponzi scheme is
estimated to be $17.3 billion, according to the court-appointed
trustee recovering fund for victims.  About $11 billion has been
recovered so far.

                     About Bernard L. Madoff

Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion.  On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970.  The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.).  Mr. Picard has retained AlixPartners LLP as claims
agent.

On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893).  The case is before Hon. Burton Lifland.  The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.

On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).

The Chapter 15 case was later transferred to Manhattan.  In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.

Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)

The SIPA Trustee has said that as of March 31, 2012, through
prepetition litigation and other settlements, he has successfully
recovered, or reached agreements to recover, more than $9 billion
-- over 50% of the principal lost in the Ponzi scheme by those who
filed claims -- for the benefit of all customers of BLMIS.
The liquidation has so far has cost the Securities Investor
Protection Corp. $1.3 billion, including $791 million to pay a
portion of customers' claims.

Mr. Picard has so far made only one distribution in October of
$325 million for 1,232 customer accounts.  Uncertainty created by
the appeals has limited Mr. Picard's ability to distribute
recovered funds.  Outstanding appeals include the $5 billion
Picower settlement and the $1.025 billion settlement.


C&S GROUP: Moody's Affirms 'Ba3' CFR/PDR; Outlook Positive
----------------------------------------------------------
Moody's Investors Service revised the rating outlook for C&S Group
Enterprises LLC's to positive from stable and affirmed the
company's Ba3 Corporate Family and Probability of Default ratings
and the B1 rating on the senior secured notes.

The positive rating outlook reflects C&S's improved credit metrics
due to lower funded debt levels and Moody's expectation for
further improvement in credit metrics driven by sales volumes
increases and the EBITDA contribution from the company's growing
Efficient Storage, Selection and Shipping ("ES3") operations.

"C&S has been successful in increasing its top line despite
operating in a challenging business and industry environment as
new contracts have resulted in increased sales volumes which in
turn have led to increased EBITDA and improved credit metrics",
Moody's Senior Analyst Mickey Chadha stated.

Following ratings were affirmed and LGD point estimates changed:

  Corporate Family Rating at Ba3

  Probability of Default Rating at Ba3

  $270 million senior secured guaranteed notes due 2017 at B1
  (LGD5, 78% from LGD5, 71%)

Ratings Rationale

C&S's Ba3 Corporate Family Rating continues to reflect the
company's leading position in a highly fragmented industry, low
funded debt, good liquidity and the growth opportunity resulting
from the company's ES3 third party logistics solutions business.
The rating also reflects the risks associated with the company's
high customer concentration, its thin margins, and its high fixed
cost structure.

A material loss of revenue or negative impact on cash flow from
serviced stores due to closures or divestitures or loss of any
material customer could result in a downgrade. Quantitatively,
ratings could be lowered if EBITA/interest is sustained below 1.5
times or debt/EBITDA remains above 4.75 times.

A higher rating would likely require a stable operating
environment, a continuation of current business volumes, sustained
EBITA/interest above 2.0 times, and sustained debt/EBITDA below
4.0 times.

C&S Group Enterprises LLC'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;
(ii) 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 C&S
Group Enterprises LLC 's core industry and believes C&S Group
Enterprises LLC'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. Please see the Credit
Policy page on www.moodys.com for a copy of this methodology.

C&S Group Enterprises LLC, issuer of the rated debt, is a
financing subsidiary of C&S Wholesale Grocers Inc. and four
affiliated operating companies (which together comprise the "C&S
Issuer Group"). C&S Wholesale Grocers is a distributor of
groceries to food retailers in the U.S. Consolidated revenues of
C&S Issuer Group are approximately $22 billion.


CAPITOL BANCORP: Modifies Michigan Plan Stipulation
---------------------------------------------------
Capitol Bancorp Ltd., et al., entered into a stipulation modifying
the stipulations resolving (i) the State of Michigan Department of
Treasury's objection to confirmation of the Amended and Restated
Prepackaged Joint Plan of Confirmation of Capital Bancorp Ltd. and
Financial Commerce Corporation; and (ii) the stipulation resolving
United States concurrence to the State of Michigan Department of
Treasury's objection to the Amended Plan.

The Michigan objection was resolved by the stipulation dated
Nov. 7, 2012.  The Internal Revenue Service filed the United
States' concurrence to State of Michigan's objection.  The IRS
objection was resolved by a stipulation dated Nov. 13.

The Debtors, Michigan and IRS agreed to modify the Agreed Tax
Language to be in the form of the provisions to be included in
order confirming Plan. which clarifies that the Debtors must pay
taxes owed to Michigan and the IRS by installments or by agreement
between the Debtors and the applicable taxing authority.

A copy of the document is available for free at
http://bankrupt.com/misc/CAPITOLBANCORP_plan_stipulation.pdf

                          Jan. 9 Hearing

As reported in the Troubled Company Reporter on Dec. 13, 2012,
the Hon. Marci B. McIvor of the U.S. Bankruptcy Court for the
Eastern District of Michigan continued until Jan. 9, 2013, at
10:30 a.m., the combined hearing to consider the approval of the
solicitation procedures, adequacy of the Disclosure Statement and
confirmation of Capitol Bancorp Ltd. and Financial Commerce
Corporation's proposed Plan.

Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reported that the Chapter 11 petition was accompanied by a
reorganization plan already accepted by the requisite majorities
of creditors and equity holders in all classes.  The plan would
exchange debt and trust-preferred securities for equity.  Holders
of $6.8 million in senior notes would see a full recovery by
receipt of new stock.  Holders of $151.3 million in trust-
preferred securities would take equity worth $50 million, for a
one-third recovery.  Holders of $5 million in preferred stock
would have a 20% recovery from new equity, while common
stockholders would take stock worth $15 million.

                       About Capitol Bancorp

Capitol Bancorp Ltd. and Financial Commerce Corporation filed
voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case
Nos. 12-58409 and 12-58406) on Aug. 9, 2012.

Capitol Bancorp -- http://www.capitolbancorp.com/-- is a
community banking company with a network of individual banks and
bank operations in 10 states and total consolidated assets of
roughly $2.0 billion as of June 30, 2012.  CBC owns roughly 97% of
FCC, with a number of CBC affiliates owning the remainder.  FCC,
in turn, is the holding company for five of the banks in CBC's
network.  CBC is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841,
et seq., and trades on the OTCQB under the symbol "CBCR."

Lawyers at Honigman Miller Schwartz and Cohn LLP represent the
Debtors as counsel.

In its petition, Capitol Bancorp scheduled $112,634,112 in total
assets and $195,644,527 in total liabilities.  The petitions were
signed by Cristin K. Reid, corporate president.

The Company's balance sheet at Sept. 30, 2012, showed
$1.749 billion in total assets, $1.891 billion in total
liabilities, and a stockholders' deficit of $141.8 million.


CASTLEVIEW LLC: Hiring David E. Archer as Expert Witness
--------------------------------------------------------
Castleview, LLC asks the U.S. Bankruptcy Court for permission to
employ David E. Archer & Associates, Inc. as an expert witness.

The firm attests that it is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.

David E. Archer & Associates has agreed to be paid for its
services as:

     * Expert Testimony and
     * Report Preparation fees: $125/hr.
     * Mileage: $0.15/mile

                     About Castleview

Castleview, LLC, filed a Chapter 11 petition (Bankr. D. Colo. Case
No. 12-23954) on July 2, 2012, with a plan that intends to pay
creditors in full.  The Debtor disclosed $14.53 million in assets
and $3.21 million in liabilities in its schedules.  The Debtor
owns a 252-acre residential development site located in
Southeastern Castle Rock, Colorado, which property includes 245
residential lots.  The property is worth $10.2 million and secures
a $3.21 million debt. The Debtor is also entitled to bond proceeds
from the Castleview Metropolitan District appraised at $6,248,724.

The Debtor has tapped Weinman & Associates, P.C, as bankruptcy
counsel, and Allen & Vellone, P.C as special counsel.


CENTENNIAL BEVERAGE: Blames Big-Box Retailers for Woes
------------------------------------------------------
Centennial Beverage Group LLC, a chain of 23 liquor stores in
Texas, filed a petition for Chapter 11 reorganization (Bankr.
N.D. Tex. Case No. 12-37901) amid lower sales brought by
competition from big-box retailers.

"Big-box retailers have posed a serious challenge in both pricing
and selection, and changes in local alcohol laws have increased
competition by expanding the ability of grocery stores and other
retailers to sell beer and wine.  As a result of this pressure,
sales have declined (and are currently down approximately 50% year
over year).  At the same time, rent and other occupancy expenses
have become a much larger percentage of operating expenses,
partially as a result of Centennial's recent expansion efforts,"
said Gregory L. Wonsmos, president and CEO, in a court filing.

To avoid bankruptcy, Centennial closed a number of unprofitable
locations, and sold its East Texas and West Texas operational
divisions in the summer of 2012.  But the move was sufficient to
address the liquidity problems.  Centennial still fell behind
payments to wholesalers and was unable to restock its supply of
distilled spirits and wine.

Centennial explored several alternatives to bankruptcy, including
potential sales of substantially all of its non-real property
assets to certain competitors, the sale and leaseback of several
of its stores, and various refinancing opportunities.
Unfortunately, these efforts were ultimately unsuccessful and a
bankruptcy filing became necessary.

The 75-year-old-company at one point had 70 stores throughout
Texas.

The Debtor currently has 247 employees.  Due to the extraordinary
demands during the liquidation sales undertaken by the Debtor
during the 2012 holiday season, the Debtors are paying certain of
the salaried employees on an hourly basis for work beyond their
standard work schedule at the rate of $10.75 per hour.

Sales for the year ended in November were $158 million.  Year-
over-year, revenue declined 50%.

The Debtor estimated assets and debts in excess of $10 million.
Liabilities include $17.4 million owing to Compass Bank on a
secured revolving credit and term loan.  The Debtor also owes
$15.5 million in unsecured subordinated debt and $5 million to a
wholesaler.


CENTENNIAL BEVERAGE: Seeks to Use Compass' Cash Collateral
----------------------------------------------------------
Centennial Beverage Group LLC, a chain of 23 liquor stores in
Texas, sought Chapter 11 protection and filed various first day
motions, including a request to use cash collateral.

The Debtor believes the first day motions are necessary to enable
it to operate in chapter 11 with minimum disruption and loss of
productivity.

The Debtor is asking for approval to use cash collateral in order
to maintain business relationships and confidence with vendors,
suppliers, and customers, to satisfy other working capital and
operational needs, to meet accrued and ongoing obligations to
employees, and to maintain employee morale.

Aside from the cash collateral motion, the Debtor filed motions to
continue certain customer programs, maintain its bank accounts,
continue its insurance programs, and pay prepetition wages of
employees.

Pending final approval of the motion, the Debtor seeks interim
authorization to use cash collateral through Jan. 6, 2013.

The Debtor's budget for the 13 weeks ending March 17, 2013,
incorporates the Debtor's proposed "sell through" of 50% of
existing inventory, which would be replenished.  This will be
accomplished through company-wide promotional pricing during the
initial week of this chapter 11 case, leading into the traditional
high-sales holiday period.

The budget forecasts total sales of approximately $13.9 million
during the 13 weeks ending on March 17, 2013, total receipts of
approximately $21 million, operating cash flow of $7.4 million,
and net cash flow of approximately $5.1 million.

As adequate protection for the interests of Compass Bank in the
cash collateral, Compass will receive replacement liens, and
substantial amounts of the proceeds of the sale of the inventory.
Repayment will be further secured by the remainder of the Debtor's
assets as well as by the JWV Associates real estate.

The Debtor forecasts that its operations in January 2013 will
result in positive cash, including cash flow sufficient for it to
make a timely payment on 2012 ad valorem taxes on the JWV
Associates real estate, avoiding the creation of tax liens senior
to Compass' claim.

Compass Bank is owed $17.4 million on a secured revolving credit
and term loan.


CENTRAL EUROPEAN: Says RTL's Demand for 100% Control Ridiculous
---------------------------------------------------------------
Central European Distribution Corporation filed an open letter to
shareholders and bondholders from the special committee of the
board of directors of CEDC in response to Amendment No. 10 to the
Schedule 13D filed by Roust Trading Ltd. with the Securities and
Exchange Commission on Dec. 11, 2012.  In the amended regulatory
filing, RTL disclosed the rejection by CEDC of its proposal to
to provide CEDC with access to interim and permanent capital, to
bolster CEDC's leadership, and to support its operational needs.

According to CEDC, the amended 13D filing contains inaccurate and
misleading statements and, accordingly, has created confusion and
uncertainty in the marketplace.  CEDC added that RTL's letter is
intended to be destructive and destabilizing and is designed to
serve only the interests of the RTL Parties.

CEDC relates RTL's demands for complete control of the Company are
unreasonable.

"Mr. Tariko has a clear conflict of interest on account of the
many different roles that the RTL Parties have as significant
shareholders, significant debt holders, significant contract
counterparties, possible restructuring transaction counterparties
and competitors in the marketplace.  Handing Mr. Tariko complete
control in this delicate phase of the restructuring of CEDC could
jeopardize the company and its other stakeholders."

RTL, an entity controlled by Roustam Tariko, has become a
significant minority shareholder of CEDC (holding 16.4% of CEDC
shares), a significant holder of CEDC 2013 Convertible Bonds, and
the party to a partnership agreement with CEDC under which RTL
agreed to form a strategic alliance with CEDC and provide funding
to CEDC next year.

A copy of the letter is available for free at:

                       http://is.gd/hV2R5h

                            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.


CLEARWIRE CORP: Sprint to Buy Remaining Stock at $2.9 Apiece
------------------------------------------------------------
Sprint Nextel Corporation filed on Dec. 13, 2012, a Schedule 13D
with the Securities and Exchange Commission, in which it disclosed
its intent to acquire shares of Clearwire Corporation's capital
stock it does not already own at a purchase price of $2.90 per
share of Class A common stock and Class B common stock in cash.

Clearwire is currently in discussions with Sprint regarding a
potential strategic transaction.  A Special Committee of the
Clearwire Board of Directors, previously formed to review
potential indications or proposals, including from Sprint, has
been reviewing the potential strategic transaction.

Sprint has proposed to provide interim financing to Clearwire from
and after the execution of definitive documentation relating to
the Proposed Transaction in an amount up to $800 million.

Clearwire does not comment on ongoing negotiations with
counterparties and, under the direction of the Special Committee,
continues to be in discussions with Sprint to explore a
transaction.  There can be no assurance as to the terms of any
potential transaction or that any transaction will result.

Sprint and its affiliates beneficially own 739,010,818 shares of
Class A  common stock of Clearwire representing 51.7% of the
shares outstanding as of Dec. 11, 2012.

A copy of the regulatory filing is available for free at:

                        http://is.gd/BQYEh1

                    About Clearwire Corporation

Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR)
-- http://www.clearwire.com/-- through its operating
subsidiaries, is a provider of 4G mobile broadband network
services in 68 markets, including New York City, Los Angeles,
Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C.,
Atlanta and Boston.

The Company reported a net loss attributable to the Company of
$717.33 million in 2011, a net loss attributable to the Company of
$487.43 million in 2010, and a net loss attributable to the
Company of $325.58 million in 2009.

The Company's balance sheet at Sept. 30, 2012, showed $8.14
billion in total assets, $5.86 billion in total liabilities and
$2.28 billion in total stockholders' equity.

                           *     *     *

As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings
Services lowered its corporate credit and senior secured first-
lien issue-level ratings on Bellevue, Wash.-based wireless
provider Clearwire Corp. to 'CCC' from 'CCC+'.

The ratings on Clearwire continue to reflect its "highly
leveraged" financial risk profile based on its high debt burden
and "weak" liquidity (both terms as defined in S&P's criteria).
"The ratings also reflect our view that Clearwire has a vulnerable
business position as a developmental-stage company with
significant competition from better capitalized wireless carriers,
including AT&T Mobility and Verizon Wireless, which are deploying
their own 4G wireless services," S&P said in January 2012.

"We believe that the company would likely run out of cash in the
late 2012 to early 2013 time frame absent significant asset sales,
since we view the terms in the December 2011 wholesale agreement
with Sprint Nextel as unfavorable in the near term and will likely
constrain cash inflows in 2012 to 2013.  We have not assumed
spectrum sales in our liquidity assessment because of the
uncertainty involved in finding a buyer, as well as timing.
However, if the company could secure sufficient funding for
operations through 2013, we could raise the ratings," S&P also
stated.


COMMONWEALTH GROUP: Amends List of Largest Unsecured Creditors
--------------------------------------------------------------
Commonwealth Group-Mocksville Partners, LP submitted a new list of
its largest unsecured creditors. The Debtor has removed Energy
United, CenturyLink, and Simplex Grinnell from the list.

Debtor's List of 14 Largest Unsecured Creditors:

  Entity                 Nature of Claim        Claim Amount
  ------                 ---------------        ------------
TIS                                              $25,350
1900 Winston Road
Knoxville, TN 37919

Dominion Real Estate Svs.                        $11,602
P.O. Box 1390
Knoxville, TN 37901

Kennerly, Montgomery &                           $4,899
Finley
P.O. Box 442
Knoxville, TN 37901

Piedmont Property                                $3,599
Services, Inc.

Lattimore, Black,                                $2,550
Morgan & Cain

Kilpatrick Stockton                              $1,829

Town of Mocksville                               $1,600

Republic Services                                $904

Cedar Row Nursery                                $816

Chicago Title                                    $750

Environs Service Company                         $750

         About Commonwealth Group - Mocksville Partners

Commonwealth Group-Mocksville Partners, LP, owns a retail center
and adjacent undeveloped land in Davie County, North Carolina.
Mocksville Partners filed a bare-bones Chapter 11 petition (Bankr.
E.D. Tenn. Case No. 12-34319) on Oct. 25, 2012, in Knoxville,
Tennessee.  The Debtor's principal assets are located at Cooper
Creek Drive, in Mocksville, North Carolina.  Judge Richard Stair
Jr. presides over the case.  Maurice K. Guinn, Esq., at Gentry,
Tipton & McLemore P.C., serves as counsel.  The Debtor estimated
assets and debts of $10 million to $50 million.  The formal
schedules of assets and liabilities are due Nov. 8, 2012.  The
petition was signed by Milton Turner, chief manager and general
partner.


COMMUNITY FIRST: Completes Sale of Cool Springs Branch
------------------------------------------------------
Community First Bank & Trust, a wholly owned bank subsidiary of
Community First, Inc., completed the sale of certain assets and
liabilities relative to the Bank's branch office located at 9045
Carothers Parkway, Franklin, Tennessee 37067, pursuant to the
Purchase and Assumption Agreement, dated Sept. 17, 2012, between
the Bank and First Citizens National Bank.

Pursuant to the Agreement, the Bank sold approximately $20.3
million in loans and approximately $7.3 million in other assets
associated with the operation of the Cool Springs Branch,
including the real property on which the Cool Springs Branch is
located and the related building.  First Citizens also assumed
certain of the Bank's liabilities, including substantially all of
the deposit liabilities associated with the Cool Springs Branch
(which totaled approximately $56.0 million at the time of the
closing).  The final amounts of assets sold and liabilities
transferred are subject to customary post-closing adjustments and
prorations, which are expected to be determined by the end of the
second quarter of 2013 and are not expected to be material.  First
Citizens paid a premium of 4% on the deposit liabilities assumed.
To balance the difference between the amount of the assets
acquired and the liabilities assumed by First Citizens, the Bank
paid approximately $28.4 million in cash to First Citizens at the
closing of the transaction.

                       About Community First

Columbia, Tennessee-based Community First, Inc., is a registered
bank holding company under the Bank Holding Company Act of 1956,
as amended, and became so upon the acquisition of all the voting
shares of Community First Bank & Trust on Aug. 30, 2002.  An
application for the bank holding company was approved by the
Federal Reserve Bank of Atlanta (the "FRB") on Aug. 6, 2002.  The
Company was incorporated under the laws of the State of Tennessee
as a Tennessee corporation on April 9, 2002.

After auditing the Company's 2011 results, Crowe Horwath LLP, in
Brentwood, Tennessee, expressed substantial doubt about Community
First's ability to continue as a going concern.  The independent
auditors noted that the Company's bank subsidiary, Community First
Bank & Trust, is not in compliance with a regulatory enforcement
action issued by its primary federal regulator requiring, among
other things, a minimum Tier 1 Leverage capital ratio at the Bank
of not less than 8.5%, a minimum Tier 1 capital to risk-weighted
assets ratio of not less than 10.0% and a minimum Total capital to
risk-weighted assets ratio of not less than 12.0%.  "The Bank's
Tier 1 Leverage capital ratio was 4.92%, its Tier 1 capital to
risk-weighted assets ratio was 7.22% and its Total-capital to risk
weighted assets ratio was 8.51% at Dec. 31, 2011.  Continued
failure to comply with the regulatory enforcement action may
result in additional adverse regulatory action."

The Company reported a net loss of $15.0 million on $19.6 million
of net interest income (before provision for loan losses) in 2011,
compared with a net loss of  $18.2 million on $21.0 million of net
interest income (before provision for loan losses) in 2010.  Total
non-interest income was $3.4 million for 2011, compared with
$4.7 million for 2010.

The Company's balance sheet at Sept. 30, 2012, showed
$560.15 million in total assets, $551.51 million in total
liabilities, and $8.64 million in total shareholders' equity.


DEWEY & LEBOEUF: Unsecureds Could Recover 14% Under Plan
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Dewey & LeBoeuf LLP's secured creditors are projected
to recover from 47% to 77% under the proposed reorganization plan,
while the recovery by unsecured creditors should range from 5.2%
to 14%.

According to the report, the defunct law firm filed the
projections this week in anticipation of a Jan. 3 hearing for
approval of disclosure materials.  The midpoint recoveries for
secured and unsecured creditors are 58% and 9.1%, respectively.

The report recounts that when Dewey filed the proposed liquidating
Chapter 11 plan in November based on a court-approved settlement
with partners, disclosure materials didn't include an estimate for
creditors' recoveries.  In court papers filed this week, the firm
estimates that available asset proceeds for distribution to
creditors will range from $146.8 million to $246.7 million.

According to the report, the official committee representing
former partners filed its brief this week appealing approval of
the partner settlement.  The partner committee contends that the
firm gave away its most valuable claims for 17 cents on the
dollar.  The committee also contends the amount a partner pays for
a release from claims "bears no relationship to that partner's
degree of culpability."

                       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.


DIGITAL DOMAIN: Sells More Assets for Less Than $1 Million
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Digital Domain Media Group Inc. was authorized by the
bankruptcy judge on Dec. 17 to sell some of the remainder its
assets and intellectual property for $927,000, the aggregate
prices generated at auction.

The report recounts that Digital Domain was a provider of visual
effects for the movie industry.  The major part of the business
was purchased for $36.7 million by a joint venture between
Galloping Horse America LLC, an affiliate of Beijing Galloping
Horse Co., and an affiliate of Reliance Capital Ltd., based in
Mumbai.

The report relates that as the result of a settlement negotiated
by the unsecured creditors' committee with secured lenders, there
will be some recovery for the committee's constituency.

After the primary sale, principal remaining assets included four
unfinished movie projects; the animation studio in Port St. Lucie,
Florida; and intellectual property for the conversion of
conventional movies into three dimensional videos.

                       About Digital Domain

Port St. Lucie, Florida-based Digital Domain Media Group, Inc. --
http://www.digitaldomain.com/-- engaged in the creation of
original content animation feature films, and development of
computer-generated imagery for feature films and trans-media
advertising primarily in the United States.

Digital Domain Media Group, Inc. and 13 affiliates sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12568) on
Sept. 11, 2012, to sell its business for $15 million to
Searchlight Capital Partners LP, subject to higher and better
offers.

At the auction on Sept. 21, the principal part of the business was
purchased by a joint venture between Galloping Horse America LLC,
an affiliate of Beijing Galloping Horse Co., and an affiliate of
Reliance Capital Ltd., based in Mumbai.  The $36.7 million total
value of the contact includes $3.6 million to cure defaults on
contracts and $2.9 million in reimbursement of payroll costs.

Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors.  FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer.  Kurtzman Carson Consultants LLC is the
claims and notice agent.

An official committee of unsecured creditors appointed in the case
is represented by lawyers at Sullivan Hazeltine Allinson LLC and
Brown Rudnick LLP.

The company disclosed assets of $205 million and liabilities
totaling $214 million.  Debt includes $40 million on senior
secured convertible notes plus $24.7 million in interest.  There
is another issue of $8 million in subordinated secured convertible
notes.

The Debtors also have sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of British Columbia, Vancouver Registry.


DIOCESE OF WILMINGTON: Accused Priest Wins Modification of Plan
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a former priest in the Catholic Diocese of Wilmington
Inc. accused of sexually abusing minors won a possibly symbolic
victory when a U.S. district judge modified the confirmation
order approving the diocese's Chapter 11 plan.  On appeal, the
court deleted a provision barring removed priests from receiving
pensions or other payments.

The report relates that the diocese won approval of the
reorganization plan in July 2011 dealing with sexual-abuse claims.
Before confirmation, the creditors' committee asked the court to
bar the diocese from making payments in the future to accused
priests.  The bankruptcy judge admitted a letter into evidence
written by a now-deceased bishop.

According to the report, the letter listed the names of eight
priests against whom the bishop believed there were well-founded
accusations of sexual abuse.  The bankruptcy judge used the letter
as the basis for ruling that the plan wouldn't be offered in good
faith unless accused priests were precluded from receiving
payments in the future from the diocese.

The report recounts that Kenneth Martin, one of the priests named
in the letter, filed an appeal from confirmation of the plan,
contending it was improper to bar him from the receipt of a
pension.

On appeal, U.S. District Judge Sue L. Robinson ruled that the
bankruptcy judge made a legal error by enjoining the diocese from
future payments to the accused priests.  In her opinion on
Dec. 18, she said the bankruptcy judge violated the rule of
evidence barring hearsay by admitting the letter into evidence.
Absent the letter, there was no other evidence on which to base a
conclusion that Martin engaged in sexual abuse.  She therefore
removed the provision from the confirmation order barring payment
of future benefits to Martin.

Mr. Rochelle notes that Martin's victory may be more symbolic than
real because the diocese said it had no intention of making
payments in the future to any of the priests.  Judge Robinson's
ruling may give Martin leverage in attempting to reinstate his
pension and other benefits, because the district judge said in her
opinion the Martin's conduct didn't result in any of the abuse
claims in the diocese's bankruptcy.

The diocese's plan was the product of settlement reached through
mediation with representatives of abuse claimants, the official
creditors' committee, and the diocese's insurance carriers. The
plan created a trust funded with $77.4 million.

The appeal is Martin v. Catholic Diocese of Wilmington (In re
Catholic Diocese of Wilmington), 11-817, U.S. District Court,
District of Delaware.

A copy of the Court's Dec. 18 Memorandum Opinion is available at
http://is.gd/uXq78Xfrom Leagle.com.

                  About the Diocese of Wilmington

The Diocese of Wilmington covers Delaware and the Eastern Shore
of Maryland and serves about 230,000 Catholics.  In 2009, the
Delaware diocese became the seventh Roman Catholic diocese to file
for Chapter 11 protection to deal with lawsuits for sexual abuse.
Previous filings were by the dioceses in Spokane, Washington;
Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks,
Alaska; and San Diego, California.

The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case
No. 09-13560) on Oct. 18, 2009.  Attorneys at Young Conaway
Stargatt & Taylor, LLP, serve as counsel to the Diocese.  The
Ramaekers Group, LLC, is the financial advisor.  The petition says
assets range $50 million to $100 million while debts are between
$100 million to $500 million.

The bankruptcy filing automatically stayed eight consecutive abuse
trials in Delaware scheduled to begin Oct. 19, 2009.  There were
131 cases filed against the Diocese, with 30 scheduled for trial,
as of the bankruptcy filing.

(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


DIOCESE OF WILMINGTON: Waiver of $1MM Bond Requirement Okayed
-------------------------------------------------------------
Judge Christopher Sontchi of the U.S. Bankruptcy Court for the
District of Delaware authorized Marla Eskin, the settlement
trustee of the Catholic Diocese of Wilmington, Inc. Qualified
Settlement Fund to waive the $1 million bond requirement fixed by
the Sept. 2011 order entered by the Court.

Pursuant to the Settlement Trust, a $1 million bond was to be
served.  The bond expired on Sept. 23, 2012, and the cost for
renewal of the bond was $8,000.

The Settlement Trustee sought the waiver because: (i) the vast
majority of the funds held by the Settlement Trust have already
been distributed; (ii) the current $1 million bond will cost the
Settlement Trust $8,000 to renew; (iii) the terms of the
September 2011 Order expressly provided that the bond amount was
"subject to adjustment by further order of the Court;" and (iv)
the Settlement Trustee anticipates filing of a motion to dissolve
the Settlement Trust in the near future, after the conclusion of
the litigation on the motions for protective orders filed by
Charles W. Wiggins and Kenneth Martin.  In early December, Judge
Sontchi granted the motions for protective order filed separately
by Messrs. Martin and Wiggins.

In light of these facts, the Settlement Trustee deemed it not
reasonable for the Settlement Trust to incur the additional
$8,000 in expenses required to renew the Bond for another year.

                  About the Diocese of Wilmington

The Diocese of Wilmington covers Delaware and the Eastern Shore
of Maryland and serves about 230,000 Catholics.  In 2009, the
Delaware diocese became the seventh Roman Catholic diocese to file
for Chapter 11 protection to deal with lawsuits for sexual abuse.
Previous filings were by the dioceses in Spokane, Washington;
Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks,
Alaska; and San Diego, California.

The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case
No. 09-13560) on Oct. 18, 2009.  Attorneys at Young Conaway
Stargatt & Taylor, LLP, serve as counsel to the Diocese.  The
Ramaekers Group, LLC, is the financial advisor.  The petition says
assets range $50 million to $100 million while debts are between
$100 million to $500 million.

The bankruptcy filing automatically stayed eight consecutive abuse
trials scheduled in Delaware scheduled to begin Oct. 19, 2009.
There were 131 cases filed against the Diocese, with 30 scheduled
for trial, as of the bankruptcy filing.

(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


DIOCESE OF WILMINGTON: Lay Pension Trust to Give Out $2-Mil.
------------------------------------------------------------
The Catholic Diocese of Wilmington, Inc., sought and obtained
approval from Judge Christoppher Sontchi of an agreement relating
to the defined-benefit pension plan for the benefit of lay
employees of the Diocese and certain non-Debtor Catholic entities.

Under the agreement, the Diocese and the Official Committee of
Lay Employees agreed on a form of Default Note and mortgage
securing the Pension Plan, as well as a form of Lay Pension Plan
Reaffirmation Agreement, which amends and restates the Lay
Pension Plan.

The Lay Pension Plan Reaffirmation Agreement provides that the
Diocese contributed an additional $5 million to the Lay Pension
Plan Trust on or before Dec. 31, 2011, from the proceeds of
commercial borrowing by the Diocese.  As of March 31, 2012, the
assets in the Pension Plan were valued at approximately $19
million.  The next contribution to the Pension Plan Trust is
June 30, 2012, in the amount of $2 million.

The Lay Pension Plan Reaffirmation Agreement requires additional
funding of $5 million on each of Dec. 31, 2016 and Dec. 31, 2017.

                  About the Diocese of Wilmington

The Diocese of Wilmington covers Delaware and the Eastern Shore
of Maryland and serves about 230,000 Catholics.  In 2009, the
Delaware diocese became the seventh Roman Catholic diocese to file
for Chapter 11 protection to deal with lawsuits for sexual abuse.
Previous filings were by the dioceses in Spokane, Washington;
Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks,
Alaska; and San Diego, California.

The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case
No. 09-13560) on Oct. 18, 2009.  Attorneys at Young Conaway
Stargatt & Taylor, LLP, serve as counsel to the Diocese.  The
Ramaekers Group, LLC, is the financial advisor.  The petition says
assets range $50 million to $100 million while debts are between
$100 million to $500 million.

The bankruptcy filing automatically stayed eight consecutive abuse
trials scheduled in Delaware scheduled to begin Oct. 19, 2009.
There were 131 cases filed against the Diocese, with 30 scheduled
for trial, as of the bankruptcy filing.

(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


DIOCESE OF WILMINGTON: Post-Confirmation Reports for Jan. to Sept.
------------------------------------------------------------------
The Catholic Diocese of Wilmington, Inc., reported that for the
quarterly period Jan. 1 through March 31, 2012, it had $2,376,856
ending cash balance at Citizen's Bank and $19,263,060 at BNY
Mellon Bank.  For that period, the Diocese had cash totaling
$28.46 million and made disbursements totaling $9.5 million.

For the quarterly period April 1 through June 30, 2012, the
Diocese reported that it had ending cash balance of $3,641,483 at
Citizen's Bank and $18,311,595 at BNY Mellon Bank.  For the
period, the Debtors had cash totaling $28.03 million and made
disbursements totaling $6.07 million.

For the quarterly period July 1 through Sept. 30, 2012, the
Diocese reported that it had ending cash balance of $3,320,742 at
Citizen's Bank and $19,543,714 at BNY Mellon Bank.  For the
period, the Debtors had cash totaling $29.0 million and made
disbursements totaling $6.13 million.

Full-text copies of the post-confirmation reports are available
at:

     http://bankrupt.com/misc/wilmpostcon0112.pdf
     http://bankrupt.com/misc/wilmpostcon0412.pdf
     http://bankrupt.com/misc/wilmpostcon0712.pdf

                  About the Diocese of Wilmington

The Diocese of Wilmington covers Delaware and the Eastern Shore
of Maryland and serves about 230,000 Catholics.  In 2009, the
Delaware diocese became the seventh Roman Catholic diocese to file
for Chapter 11 protection to deal with lawsuits for sexual abuse.
Previous filings were by the dioceses in Spokane, Washington;
Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks,
Alaska; and San Diego, California.

The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case
No. 09-13560) on Oct. 18, 2009.  Attorneys at Young Conaway
Stargatt & Taylor, LLP, serve as counsel to the Diocese.  The
Ramaekers Group, LLC, is the financial advisor.  The petition says
assets range $50 million to $100 million while debts are between
$100 million to $500 million.

The bankruptcy filing automatically stayed eight consecutive abuse
trials scheduled in Delaware scheduled to begin Oct. 19, 2009.
There were 131 cases filed against the Diocese, with 30 scheduled
for trial, as of the bankruptcy filing.

(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


DISH NETWORK: Moody's Rates $1-Bil. Sr. Unsecured Notes 'Ba2'
-------------------------------------------------------------
Moody's Investors Service assigned a Ba2 (LGD4 - 67%) rating to
DISH Network Corporation's (DISH) proposed $1 billion senior
unsecured 10 year notes. The new notes will be issued at the
company's wholly-owned subsidiary, DISH DBS Corporation (DISH
DBS), and will be pari pasu with DISH DBS's existing senior
unsecured notes, which are guaranteed only by the US pay-TV
operating company subsidiaries. The company plans to utilize the
net proceeds from the offering for general corporate purposes
which may include spectrum-related strategic transactions. Moody's
believes that proceeds could include the funding of debt
maturities over the coming years as well. The company has about
$1.5 billion of debt maturing over the two years and, in the
absence of a revolving credit facility, Moody's believes this is a
prudent measure. However, there is also the possibility of up-
streaming some cash to DISH to fund a yet to be defined wireless
broadband strategy, which poses some potential credit risk as the
parent is not a guarantor of DISH DBS's notes and the strategy and
capital requirement is yet to be established. Loss given default
assessments were updated to reflect the updated debt mix. DISH's
Ba2 Corporate Family Rating (CFR) and stable rating outlook are
not affected.

The offering increases DISH's gross debt-to-EBITDA from
approximately 3.9x (LTM 9/30/12 incorporating Moody's standard
adjustments) to about 4.1x pro forma for the new issue, which is
high for the rating. However, the company has a cash and
marketable securities balance of over $5 billion as of 9/30/12, a
portion of which Moody's believes will be used to fund maturing
higher cost debt in coming years which will reduce leverage back
to levels consistent with the Ba2 ratings. Moody's contemplates
that the company will need to fund the recently announced Voom
settlement of about $700 million, as well as its planned $1 per
share dividend totaling around $450 million. Moody's believes that
there is potential for funding needs to invest in a wireless
broadband strategy. "In the past, we had concerns that the company
might consider a solo build out strategy," stated Neil Begley, a
Moody's Senior Vice President. "However, we now anticipate that
the company will not build out a network alone and instead, we
believe that a partnership is highly likely which would reduce the
overall funding need and hasten the time to launch a competitive
product," added Begley.

Assignments:

  Issuer: Dish DBS Corporation

    Senior Unsecured Regular Bond/Debenture (Notes due 2022),
    Assigned Ba2, LGD4 - 67%

Ratings Rationale

DISH's Ba2 CFR continues to primarily reflect Moody's concern that
competition from cable and telecommunication companies, who offer
multiple products (video, voice, and data), will pressure margins
and cash flow generation as the costs to grow and retain
subscribers will continue to escalate. Mitigating Moody's concerns
are the company's strong credit metrics for a company of this
scale in the Ba-rating category, its significant cash and
marketable securities balance and its large subscriber base. In
addition, lack of transparency on fiscal policies and financial
guidance from the company's management and flexible indenture
covenants also moderately constrain the CFR. The rating also
reflects the company's controlling shareholder structure, although
the controlling shareholder and Chairman, Charles Ergen, has had a
positive impact on the company as it has maintained strong
liquidity and credit metrics, but also demonstrated the
willingness to be highly acquisitive. As a result of DISH's
acquisition of a significant portfolio of wireless spectrum, there
is elevated event risk with respect to additional acquisitions and
spectrum investment of a material size and a potential funding of
a build out of a wireless broadband network with an as of now to
be determined partner, which may require additional heavy
investments over a prolonged period.

DISH's Ba2 CFR is three notches below that of its direct satellite
pay TV competitor, DIRECTV (Baa2 senior unsecured, stable
outlook). This reflects DISH's underperformance in customer
acquisition and retention, the lack of visibility into its
strategic direction and financial policy, the loss of large telco
partnerships to DIRECTV, its controlling shareholder structure and
moderately higher leverage. The company has consistently lagged in
marketing, promotions and customer service, and in Moody's view,
has been too thrifty in its investments in programming to
differentiate its product offering. In addition, both DBS players
are rated lower than their comparable cable competitors (for the
same leverage level) due to the structural disadvantage of having
only a video product.

What Could Change the Rating - Up

Upward rating pressure could occur if Moody's believed that
present subscriber levels can be maintained in combination with
stable churn rates and retention costs, and leverage can be
sustained under 3.0x debt-to-EBITDA including flexibility to fund
its strategic plans. Also important would be the development of a
broadband strategy which is sufficiently competitive to maintain
if not grow its subscriber base, in a market that is growing its
dependence upon internet access capability, through measured
investment levels as well as with strategic partners .

What Could Change the Rating - Down

Downward rating pressure would occur if Moody's believes that DISH
plans to sustain debt-to-EBITDA leverage (incorporating Moody's
standard adjustments) over 3.5 times. Sustained use of cash for
shareholder rewards or strategic ventures with material negative
implications for DISH's credit profile, material subscriber
losses, multiple satellite failures that cannot be mitigated with
backup transponders or capacity constraints that affect the
company's ability to provide a competitive service could also have
negative rating implications.

DISH'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; (ii) 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 DISH's core industry and
believes DISH's ratings are comparable to those of other issuers
with similar credit risk. Other methodologies used include Loss
Given Default for Speculative Grade Issuers in the US, Canada, and
EMEA, published June 2009.

DISH is the third largest pay television provider in the United
States, operating satellite services, with 14.042 million
subscribers as of 9/30/2012.


DISH NETWORK: S&P Rates $1-Bil. Senior Unsecured Notes 'BB-'
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' issue-level
rating and '3' recovery rating to DISH Network Corp.'s proposed $1
billion of senior unsecured notes, being issued by subsidiary DISH
DBS Corp. "The '3' recovery rating indicates our expectation for
meaningful (50% to 70%) recovery in the event of a payment
default," S&P said.

"The Englewood, Colo.-based satellite TV provider said it intends
to use the proceeds for general corporate purposes, which we
presume will include the execution of its wireless strategy that
the company has yet to articulate. Under the proposed issuance
size, pro forma fully adjusted debt to EBITDA would rise to about
3.6x as of Sept. 30, 2012. Pro forma cash balances increase to
about $7.4 billion as of the same date, prior to payments related
to the company's settlement with Cablevision Systems Corp. and AMC
Networks Inc. regarding the Voom HD litigation," S&P said.

"Our 'BB-' corporate credit rating and positive rating outlook on
the company remain unchanged. We note that DISH recently received
approval from the FCC to deploy a terrestrial wireless network
with its 40 MHz of AWS-4 spectrum, subject to certain power
limitations on its uplink spectrum. Under terms of the ruling,
DISH will be required to make its wireless service available to at
least 40% of the population in areas covered by its spectrum
within the next four years, and 70% within seven years. If DISH is
unable to meet the 40% threshold in four years, it must meet 70%
coverage in six, rather than seven years. The company stated it
could take at least 30 days to provide greater clarity on its
wireless strategy following an FCC ruling, which could include
more detail surrounding additional near-term and long-term funding
needs," S&P said.

"In our view, upgrade potential continues to hinge on the
company's ability to execute on this strategy in such a manner
that leverage would remain under 4x. This leverage threshold
assumes no initial change to our assessment of its 'fair' business
risk profile. Any longer-term revision of our business risk
profile assessment would depend on our view of the company's
longer-term business prospects regarding a wireless rollout,
especially in light of the mature and very competitive industry
landscape, as well as our view of the competitive threats facing
its core video business," S&P said.

RATING LIST

DISH Network Corp.
Corporate Credit Rating           BB-/Positive/--


New Rating

DISH DBS Corp.
$1 Bil. Senior Unsecured Notes    BB-
   Recovery Rating                 3


DISPENSING DYNAMICS: Moody's Cuts CFR to Caa1'; Outlook Stable
--------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
(CFR) of Dispensing Dynamics International (DDI) to Caa1 from B3.
Concurrently, Moody's downgraded the company's proposed $130
million 5-year senior secured notes offering to Caa1 from B3. The
downgrade stems from the upsizing of the offering to $130 million
from $125 million prior to issuance, and while the impact on the
already weak credit metrics is relatively modest, the increased
dividend highlights the aggressive financial policies of the
company. It provides DDI less flexibility at a time when the
company has not yet completed the integration of San Jamar.
Proceeds from the offering are expected to be used to refinance
existing debt, pay a dividend of approximately $50 million to
shareholders, and cover transaction related fees and expenses. The
rating outlook is stable.

The following ratings have been downgraded (subject to the review
of final documentation):

- Corporate Family Rating to Caa1 from B3,

- Probability of Default Rating to Caa1 from B3; and

- $130 million senior secured notes due 2017 to Caa1 (LGD4, 55%)
   from B3 (LGD4, 54%).

The outlook is stable

Ratings Rationale

The Caa1 rating reflects DDI's limited operating history as a
combined entity, small size relative to the rated manufacturer
universe, aggressive financial policies, and elevated leverage
profile. In addition, the rating takes into account the company's
large geographic revenue concentration in North America and
relatively high customer concentration. The rating also considers
the company's solid market positioning in the niche North American
away-from-home (AFH) value-added paper dispensing market, which is
strengthened by high barriers to entry including IP ownership and
long-standing customer relationships. The proprietary nature of
the company's dispensing products, in combination with its
mutually beneficial relationships with some of the nation's
largest paper OEM's, helps the company's margins. Moody's expects
the company's liquidity profile to remain adequate during the next
twelve months; however, the company may need to rely on its
modestly sized ABL for funding needs due to marginal free cash
flow.

The stable outlook assumes DDI will build upon its solid market
position and complete its integration with San Jamar without any
major disruptions and generate positive free cash flow during the
next twelve months.

The ratings could be upgraded if the company demonstrates a longer
track record as a combined entity, can generate positive free cash
flow and improve credit metrics such that leverage is sustained
below 5.5 times (inclusive of the preferred hybrid adjustment).

The ratings could be downgraded if the company's operating
performance deteriorates due to integration problems, margin or
revenue weakness, or if the company generates negative free cash
flow. More specifically, if debt-to-EBITDA were to approach 7.5
times (inclusive of the preferred hybrid adjustment) the ratings
could be downgraded. In addition, if the company were to lever up
for an acquisition, the ratings could be downgraded.

The principal methodology used in rating Dispensing Dynamics
International was the Global Manufacturing Industry Methodology
published in December 2010. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.

Dispensing Dynamics International (DDI), headquartered in City of
Industry, California, is among the leaders in the North American
away-from-home (AFH) value-added paper dispensing market. The
company is a designer, manufacturer and marketer of paper towel,
tissue, and soap dispensing systems primarily used in AFH washroom
setting. Following the February 2012 acquisition of San Jamar Chef
Revival (San Jamar), the company strengthened its washroom
presence while diversifying its product offerings into a broad
range of foodservice safety products. DDI is a subsidiary of DDI
Group, LLC, which is majority owned by Perrin Holdings, LLC, which
in turn is majority owned by private equity sponsor Kinderhook
Industries, LLC. Pro-forma for the acquisition of San Jamar, DDI
generated revenues of nearly $150 million for the twelve month
period ended September 30, 2012.


EASTMAN KODAK: $525-Mil. From Sale of Digital Imaging Patents
-------------------------------------------------------------
Eastman Kodak Company has completed a series of agreements that
successfully monetizes its digital imaging patents.

The proposed transaction, which achieves one of Kodak's key
restructuring objectives, follows other recent major
accomplishments that include an agreement for interim and exit
financing for the company's emergence from its Chapter 11
restructuring, and resolution of U.S. retiree non-pension benefits
liabilities.  Kodak's monetization of IP assets further builds on
its momentum toward a successful emergence in the first half of
2013.

Under the agreements, Kodak will receive approximately $525
million, a portion of which will be paid by 12 intellectual
property licensees organized by Intellectual Ventures and RPX
Corporation, with each licensee receiving rights with respect to
the digital imaging patent portfolio and certain other Kodak
patents.  Another portion will be paid by Intellectual Ventures,
which is acquiring the digital imaging patent portfolio subject to
these new licenses, as well as previously existing licenses.

The proposed transaction is subject to the approval of the
Bankruptcy Court and the satisfaction of certain customary
conditions.

Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that there will be a Jan. 11 hearing in U.S. Bankruptcy
Court in New York for approval of the sale to a group of 12 of the
world's largest technology companies.

The group, officially called Intellectual Ventures Fund 83 LLC,
includes Apple Inc., Microsoft Corp., Research In Motion Ltd.,
Google Inc., Samsung Electronics Co. and Facebook Inc.

"This monetization of patents is another major milestone toward
successful emergence," Antonio M. Perez, Chairman and Chief
Executive Officer, said.  "Our progress has accelerated over the
past several weeks as we prepare to emerge as a strong,
sustainable company.  This proposed transaction enables Kodak to
repay a substantial amount of our initial DIP loan, satisfy a key
condition for our new financing facility, and position our
Commercial Imaging business for further growth and success."

The transaction enables the company to continue innovating in its
core Commercial Imaging technologies that are fundamental to its
future.  Commercial Imaging is a business in which Kodak has
significant competitive advantages and strong growth prospects.

"Kodak remains a major center of invention and innovation," Perez
said.

The transaction also includes an agreement to settle current
patent-related litigation between the participants and Kodak,
which avoids additional litigation costs and helps to ensure that
management and the company's resources focus on enhancing the
operations of its core future businesses.

Bloomberg recounts that Kodak intended to sell the technology at
auction in August.  The auction was adjourned several times when
offering prices from the four bidders weren't satisfactory.  Kodak
was hoping the patents would sell for as much as about
$2.4 billion.

The failure of the auction, according to Bloomberg, caused the
price of Kodak bonds to collapse.  The $400 million in 7%
convertible notes due in 2017 had traded for 26 cents on the
dollar on Aug. 6, according to Trace, the bond-price reporting
system of the Financial Industry Regulatory Authority.  The same
bonds fetched 8.625 cents on Dec. 4, the recent low. The bonds
traded at 2:54 p.m. Dec. 19 for 11.975 cents, an 18% increase from
the prior day.

When the originally conceived auction process ended, the group of
companies had the best offer.  Kodak enabled the group to increase
the price by allowing other companies to join.

The sale will end lawsuits between Kodak and Apple over the
validity and ownership of patents.

                        About Eastman Kodak

Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.

Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras.  Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies with
strong balance sheets and an awareness of Kodak's liquidity
challenges.

In recent years, Kodak has been working to transform itself from a
business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.  Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.

Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors.  FTI Consulting,
Inc., is the restructuring advisor.   Lazard Freres & Co. LLC, is
the investment banker.  Kurtzman Carson Consultants LLC is the
claims agent.

The Official Committee of Unsecured Creditors has tapped Milbank,
Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.

Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the
Unofficial Second Lien Noteholders Committee.

The Retirees Committee has hired Haskell Slaughter Young &
Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC,
as Bankruptcy Consultants and Financial Advisors; and the Segal
Company, as Actuarial Advisors.

Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato,
Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners
II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth
S. Grossman; and Paul Martin.


EDISON MISSION: Wins Interim Approval of First Day Motions
----------------------------------------------------------
The Honorable Judge Jacqueline P. Cox granted interim approval to
certain motions filed by Edison Mission Energy and its affiliates.

Edison Mission sought Chapter 11 protection on Dec. 17 after
reaching an agreement with its noteholders and its parent company,
Edison International.  Pursuant to a yet-to-be-filed plan of
reorganization, EME would transition Edison International's equity
interest in EME to its creditors.  The parties have signed a
transaction support agreement, equity and restructuring term
sheets and have agreed that:

  (1) The parties will negotiate and document the final form of
      their master restructuring agreement ("MRA") within 90 days
      of the Petition Date;

  (2) Within 150 days of the Petition Date, the Debtors will seek
      authority to enter into a MRA with the noteholders'

  (3) The MRA will provide for, among other things, (a) the
      release of claims between the Debtors and their parent, (b)
      the amendment and assumption of the tax sharing agreements
      to provide for tax payments through Dec. 31, 2013, and (c)
      the cancellation of Edison International's 100% equity
      interest in EME on the effective date of the Plan; and

  (4) If the MRA is not approved within 210 calendar days, the
      transaction support agreement and the term sheets signed by
      the parties will terminate.

The Debtors have agreed to pay all reasonable fees of the advisors
to the consenting noteholders, including Ropes & Gray LLP, as
legal counsel, Bruder, Gentile & Marcoux LLP, as federal energy
regulatory counsel and Houlihan Lokey Capital, Inc., as financial
advisor.

The Debtors' professionals include, Kirkland & Ellis LLP, as
attorneys; Perella Weinberg Partners, as investment bankers;
McKinsey Recovery & Transformation Services U.S., LLC, as
restructuring advisors; and McDonald Hopkins LLC, as conflicts
counsel.

The U.S. Trustee has announced that it will hold an organizational
meeting on Jan. 7, 2013 at 10:00 a.m. to consider forming an
official committee of unsecured creditors.

Edison Mission blamed the bankruptcy filing on "a sea change in
the power market's competitive landscape, dramatically higher
environmental capital expenditure requirements, and debt payment
maturities that have severely limited the Debtors' ability to
compete effectively."

                         First Day Motions

Judge Cox convened a hearing on Dec. 18 and immediately granted
the Debtors (i) an extension until Feb. 14, 2013 of the deadline
to file their schedules of assets and liabilities and related
documents, (ii) approval to hire Garden City Group, Inc., as
claims and notice agent, (iii) to continue performance under
special trading contracts.

The judge granted interim orders with respect to the Debtors'
motions to:

   -- pay prepetition sales, use, franchise, property, and other
      taxes, as well as fees;

   -- grant adequate assurance of payment to 17 utilty providers;

   -- implement notification procedures with respect to transfers
      of equity securities and claims in order to protect their
      tax credits from their $2.4 billion in net operating losses
      (NOLs) that may be carried forward to future taxable years;

   -- perform under a forbearance agreement relating to the PoJo
      facilities (obligations related to Midwest Generation LLC's
      Powerton and Joliet Generating Stations in Illinois).

   -- pay certain lien claimants;

   -- pay up to $8.2 million to critical vendors;

   -- pay employee wages and medical benefits of 950 employees;
      and

   -- continue their cash management systems.

The judge has not entered orders with respect to its applications
or motions to hire advisors, pay insider senior executives under
employee incentive programs, implement incentive plans for non-
insider employees, and continue performing under intercompany and
shared services agreements.

The judge continued the hearing to Jan. 16, 2013 to consider
approval of the Debtors' pending first-day motions.

                         Critical Vendors

In the critical vendor motion, the Debtors said they intend to pay
certain critical vendors and service providers in an interim
amount not to exceed $7.0 million, and an aggregate amount not to
exceed $8.2 million. The critical vendor claims that the Debtors
seek to pay represent less than one quarter of one percent of the
Debtors' and their non-Debtors affiliates' $5.2 billion of total
unsecured and project debt.

                        Incentive Programs

In 2012, non-insider employees of EME and its affiliates earned
approximately $26 million under applicable employee incentive
programs, substantially all of which was paid prior to the
Petition Date.  In light of the restructuring efforts, the Debtors
made certain adjustments to their incentive programs but generally
retained the overall structure of their programs for 2013.

In addition, the Debtors' management will recommend up to 50 key
employees for inclusion in a key contributor plan from a group of
non-executive employees who historically are not eligible to
participate in the Debtors' long-term incentive programs.
The Debtors' aggregate retention payments under the Key
Contributor Plan for 2013 will be up to $2.2 million, which may be
paid out over the course of 24 months.

                         Business As Usual

As EME's restructuring process moves forward, operations at EME
and its filing subsidiaries will continue in the normal course
without interruption. The Company's electric facilities across the
country will continue to generate power safely and reliably, and
it will continue to focus on its marketing and trading operations.

EME said it is operationally healthy, and plans to emerge from its
restructuring as a recapitalized company separate from Edison
International.

Edison International is not included in the Chapter 11 filings.

                       About Edison Mission

Santa Ana, California-based Edison Mission Energy is a holding
company whose subsidiaries and affiliates are engaged in the
business of developing, acquiring, owning or leasing, operating
and selling energy and capacity from independent power production
facilities.  EME also engages in hedging and energy trading
activities in power markets through its subsidiary Edison Mission
Marketing & Trading, Inc.

EME was formed in 1986 and is an indirect subsidiary of Edison
International.  Edison International also owns Southern California
Edison Company, one of the largest electric utilities in the
United States.

EME and its affiliates sought Chapter 11 protection (Bankr. N.D.
Ill. Lead Case No. 12-49219) on Dec. 17, 2012.

EME disclosed assets of $5.16 billion and liabilities totaling
$5.09 billion. Liabilities include $3.7 billion on senior
unsecured notes and $1.2 billion in debt on individual projects.

EME didn't make a $97.5 million interest payment due in November
and another $38.1 million payment due Dec. 17.  Another $500
million in debt was set to mature in June 2013.

EME reported a $360 million net loss for the first nine months of
2012 on operating revenue of $1.01 billion. The loss from
operations was $226 million, after a $204 million tax benefit.


EME HOMER: Suspending Filing of Reports with SEC
------------------------------------------------
EME Homer City Generation L.P. filed a Form 15 with the U.S.
Securities and Exchange Commission to voluntarily deregister its
8.137% senior secured bonds due 2019 and 8.734% senior secured
bonds due 2026 and suspend its reporting obligation with the SEC.
As of Dec. 13, 2012, there were only 74 holders of the Notes.

                         About Homer City

Homer City, Pennsylvania-based EME Homer City Generation L.P., is
a Pennsylvania limited partnership with Chestnut Ridge Energy
Company as a limited partner with a 99.9 percent interest and
Mission Energy Westside Inc. as a general partner with a
0.1 percent interest.  Both Chestnut Ridge Energy and Mission
Energy Westside are wholly owned subsidiaries of Edison Mission
Holdings Co., a wholly owned subsidiary of EME.  EME is an
indirect wholly owned subsidiary of Edison International.

EME Homer City was formed for the purpose of acquiring, owning and
operating three coal-fired electric generating units and related
facilities located in Indiana County, Pennsylvania with an
aggregate capacity of 1,884 MW, which Homer City collectively
refers to as the "Homer City plant," for the purpose of producing
electric energy.  Homer City acquired the Homer City plant on
March 18, 1999, and completed a sale-leaseback of its facilities
to third parties in December 2001.

Certain divestitures of Homer City's leasehold interest in the
plant are subject to consent rights of the holders of the secured
lease obligation bonds issued in connection with the original
sale-leaseback transaction.  GECC is currently engaged in
discussions and has reached an agreement in principle on a non-
binding restructuring term sheet with certain of the holders of
the secured lease obligation bonds regarding amendments to the
terms of the 8.137% Senior Secured Bonds due 2019 and the 8.734%
Senior Secured Bonds due 2026, each issued by Homer City Funding
LLC.

"Even though an agreement in principle has been reached with
certain holders of the secured lease obligation bonds, that
agreement may not be approved by the secured lease obligation
bondholders as required under the operative documents to
effectuate the necessary modifications to the terms of the bonds.
If an agreement to modify the terms of the bonds is not approved
and consummated, then it is possible that Homer City could become
the subject of bankruptcy proceedings," the Partnership said in
its quarterly report for the period ended June 30, 2012.

The Company reported a net loss of $686 million in 2011, compared
with net income of $27 million in 2010.

PricewaterhouseCoopers LLP, in Los Angeles, California, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2011.  The indepdendent
auditors noted that the Partnership does not expect to generate
sufficient capital from operations necessary to meet its
obligations, which raises substantial doubt on its ability to
continue as a going concern.

The Company's balance sheet at Sept. 30, 2012, showed
$1.08 billion in total assets, $1.72 billion in total liabilities,
and a $641 million partners' deficit.


EMPIRE RESORTS: Charles Degliomini to Continue Serving as EVP
-------------------------------------------------------------
Empire Resorts, Inc., entered into an employment agreement with
Charles A. Degliomini, pursuant to which Mr. Degliomini will
continue to serve as the Company's Executive Vice President.

The Degliomini Employment Agreement supersedes Mr. Degliomini's
existing employment agreement with the Company, which was entered
into on June 29, 2012.  The terms and conditions of the Degliomini
Employment Agreement are substantially similar to the June
Agreement, except that:

   (i) the term of employment was extended from June 28, 2013, to
       Dec. 31, 2014;

  (ii) the amount of base salary that Mr. Degliomini would be
       entitled to receive if his employment were terminated
       without cause or with good reason before a change in
       control was increased from 12 months to 18 months; and

(iii) the amount of base salary that Mr. Degliomini would be
       entitled to receive if his employment were terminated
       without Cause or with Good Reason after a Change in Control
       was increased from 12 months to 24 months.

A copy of the Employment Agreement is available at:

                        http://is.gd/tFN7xp

                       About Empire Resorts

Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY)
-- http://www.empireresorts.com/-- owns and operates Monticello
Casino & Raceway, a video gaming machine and harness racing track
and casino located in Monticello, New York, 90 miles northwest of
New York City.

The Company reported a net loss of $24,000 in 2011, compared with
a net loss of $17.57 million in 2010.

The Company's balance sheet at Sept. 30, 2012, showed
$51.98 million in total assets, $25.48 million in total
liabilities, and $26.49 million in total stockholders' equity.


FIRST QUANTUM: Moody's Reviews 'B1' Rating for Downgrade
--------------------------------------------------------
Moody's Investors Service has placed all the ratings of First
Quantum Minerals Ltd. on review for downgrade following their
announced intention to launch an unsolicited takeover bid for
Inmet Mining Corporation (B1 stable). The initiation of this
review reflects Moody's preliminary credit assessment of the
announced transaction on FQM, in view of the concerns it raises in
terms of more aggressive financial policy and material execution
risks involved.

RATINGS RATIONALE

The review will focus on the assessment of the following main
factors:

(a) The financial policy approach of FQM, considering the
unsolicited takeover bid and the substantial size of the
acquisition is a departure from the conservative financial policy
factored into the current rating of FQM;

(b) The execution risks of the acquisition and of the capex plan
of Inmet, also considering FQM's intention not to make its offer
conditional upon any due diligence on Inmet;

(c) The credit impact of the acquisition on the business and
financial profile of FQM, with Moody's expectation of increased
leverage and negative free cash flows over the coming several
quarters, in view of the large amount of planned capex of the two
companies, before their main projects will start to be fully
productive;

(d) The implications of the acquisition on the liquidity profile
of FQM, also considering potential cost overruns in the execution
of large projects, as well as possible further liquidity needs to
repay the outstanding notes of Inmet, considering the change of
control clauses triggered by the transaction;

(e) The notching implications for the ratings of FQM's and Inmet's
outstanding bonds, once the final capital structure of the
transaction is confirmed.

Moody's review will also take into consideration the robust
financial profile currently displayed by FQM, with a low leverage
ratio to start with, which could accommodate more debt, as well as
the equity funding which will support a portion of the purchase
price for Inmet.

If the acquisition were to go ahead, Moody's expects that a
possible downgrade of FQM's ratings would likely be limited to one
notch.

The principal methodology used in rating First Quantum Minerals
Ltd was the Global Mining Industry Methodology published in May
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. Please see the Credit Policy page on
www.moodys.com for a copy of these methodologies.

As reported by the Troubled Company Reporter-Europe on Oct. 2,
2012, Moody's Investors Service assigned a Ba3 corporate family
rating (CFR) and a Ba3 probability of default rating (PDR) to
First Quantum Minerals Ltd. Concurrently, Moody's assigned a
provisional (P)B1 rating with a loss-given default (LGD)
assessment of 4 (69%) to the proposed $350 million of senior
unsecured notes to be issued by FQM. Moody's said the outlook on
all ratings is stable.

First Quantum Minerals Ltd (FQM), headquartered in Canada and
listed on the Toronto Stock Exchange and the London Stock Exchange
(ticker `FQM'), is a medium size mining company with large
operations in Zambia, where it manages Kansanshi, a large and low-
cost copper and gold deposit. FQM also operates a small copper and
gold mine in Mauritania, and two nickel mines, namely Ravensthorpe
in Australia (re-commissioned in December 2011) and Kevitsa in
Finland (a nickel-copper mine which produced first concentrate in
May 2012). For the 12 months ended September 2012, FQM generated
revenues of $2.7 billion and an adjusted EBITDA of $1.0 billion.


FORT LAUDERDALE BOATCLUB: Receiver Can Hire Salazar Jackson
-----------------------------------------------------------
Margaret Smith, as receiver for the real and personal property for
the bankruptcy estate of Fort Lauderdale BoatClub, Ltd., sought
and obtained permission from the U.S. Bankruptcy Court for the
Southern District of Florida to employ Salazar Jackson, LLP, as
her counsel in the Debtor's Chapter 11 case to:

  (a) provide legal advice with respect to the Receiver's powers
      and duties in administration of the estate, along with other
      assets in which the estate holds any economic or other
      equity interests;

  (b) prepare on behalf of the Receiver all of the necessary
      applications, motions, answers, orders, reports and other
      legal papers;

  (c) appear in Court and to protect the interests of the Receiver
      and estate before the Court;

  (d) assist with any recovery or disposition of assets; and

  (e) perform other legal services for the Receiver that may be
      necessary and proper in the Debtor's case.

The current hourly rates of the firm's principal attorneys, law
clerks, and paralegals proposed to represent the Receiver are:

     Luis Salazar, Esq.         $450 per hour
     Aaron P. Honaker, Esq.     $350 per hour
     Celi S. Aguilar, Esq.      $285 per hour
     Karina Dominguez, Esq.     $185 per hour

Other attorneys, law clerks, and paralegals will render services
to the Receiver as needed.

To the best of the Receiver's knowledge, Salazar Jackson (a) does
not hold or represent any interest adverse to the estate; and (b)
is a "disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.

                  About Fort Lauderdale BoatClub

Naples, Florida-based Fort Lauderdale BoatClub, Ltd., owns a fully
developed and operational marina facility formerly known as
Jackson Marine Center in Fort Lauderdale.  The marina, which has a
12-acre prime intracoastal waterway real estate, is being leased
to G. Robert Toney & Associates Inc. doing business as National
Liquidators, for $75,000 per month (reduced from the previous rate
$160,000 per month).

The Company filed for Chapter 11 protection (Bankr. S.D. Fla. Case
No. 12-28776) on Aug. 2, 2012.  Bankruptcy Judge Raymond B. Ray
presides over the cases.  Barry P. Gruher, Esq., and Mariaelena
Gayo-Guitian, Esq., at Genovese Joblove & Battista, P.A., in Fort
Lauderdale, Fla., represent the Debtor in its restructuring
effort.  The Debtor has scheduled assets of $13,483,209 and
liabilities of $10,340,756.  The petition was signed by Edward J.
Ruff, president.

In October 2012, the United States Trustee said an official
committee under 11 U.S.C. Sec. 1102 has not been appointed in the
bankruptcy case of Fort Lauderdale BoatClub, Ltd.  The U.S.
Trustee attempted to solicit creditors interested in serving on
the Unsecured Creditors' Committee from the 20 largest unsecured
creditors.  After excluding governmental units, secured creditors
and insiders, the U.S. Trustee has been unable to solicit
sufficient interest in serving on the Committee.  The U.S. Trustee
reserves the right to appoint such a committee should interest
developed among the creditors.


FREEDOM GROUP: S&P Puts 'B+' CCR on Watch on Cerberus Sale Plan
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its 'B+' corporate credit rating, on firearm and ammunition
manufacturer Freedom Group Inc. on CreditWatch with developing
implications. The CreditWatch listing follows Cerberus Capital
Management's announcement it will engage an advisor and plans to
sell its interests in the company. Cerberus' announcement to sell
its interests in the company follows the tragic school shooting in
Newtown, Conn. last week.

"Developing implications means we believe ratings on Freedom could
go down or up. In the event Cerberus' sale of Freedom is a
leveraging event, we could lower ratings. Our measure of lease-
and pension-adjusted leverage was 5x at Sept. 30, 2012. In
addition, if it becomes clear over the next few months that
additional regulation or distribution challenges may hurt some of
Freedom's product lines, we could lower ratings. In recent days,
there has been a significant increase in calls for additional
firearm regulation and a halt in sales by a retailer of modern
sporting rifles in response to the event in Newtown. In the event
Cerberus sells Freedom to a buyer of higher credit quality, we
could raise ratings," S&P said.

"We will resolve the CreditWatch listing once we are confident we
can estimate the impact of the planned sale, and any impact from
possible additional firearm industry regulation or distribution
challenges," said Standard & Poor's credit analyst Ariel
Silverberg.


GENCORP INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its existing ratings,
including the 'B' corporate credit rating, on California-based
GenCorp Inc. and removed the ratings from CreditWatch, where the
ratings were placed with developing implications on July 24, 2012.

"The affirmation reflects Standard & Poor's opinion that an
improvement in GenCorp's market position and diversity will offset
the deterioration in credit ratios from the planned $550 million
debt-financed acquisition of PWR from United Technologies Corp.
(A/Stable/A-1)," said Standard & Poor's credit analyst Chris
Mooney. "The acquisition of PWR is subject to regulatory approval,
which we expect in the first half of 2013."

"We have revised our financial risk assessment to 'highly
leveraged' from 'aggressive.' We expect GenCorp to ultimately
raise more than $500 million of new debt to fund the acquisition,
resulting in pro forma debt to EBITDA increasing to about 5x from
4.8x in 12 months ending Aug. 31, 2012. Similarly, pro forma funds
from operations (FFO) to debt will decline to about 11% from 17%.
GenCorp has high pension and postretirement liabilities, which
added $214 million to our total adjusted debt (as of the last
measurement date of Nov. 30, 2011). However, GenCorp can recover
some of these costs through its government contracts, and we
assume a significant recovery based on the company's contract mix.
The acquisition will not result in a material increase in pension
liabilities, as the seller will retain the majority of the
obligations. If adjusted for recoverability, pro forma debt to
EBITDA would be about 4.7x and FFO to debt would be 12% (compared
with 3.9x and 21% on the same basis, for the past 12 months ended
Aug. 31, 2012). We do not expect material improvement in credit
metrics over the next 12 months because of declining defense and
NASA budgets," S&P said.

"We believe the acquisition improves GenCorp's market position and
product diversity and have revised our business risk assessment to
'fair' from 'weak.' PWR is the largest U.S. producer of liquid
propulsion systems for launch vehicles, including the primary
heavy-launch systems NASA and the U.S. Department of Defense (DoD)
uses. GenCorp does not currently have a large presence in
manufacturing products for these systems, and the acquisition will
complement its range of solid and liquid propulsion systems for
tactical missiles, strategic missiles, small and midsized launch
vehicles, satellites, and missile defense interceptors. However,
we believe likely reductions in NASA and DoD budgets creates
uncertainty regarding future demand for PWRs products. Therefore,
we expect modestly declining sales and earnings over the next
year, on a pro forma basis. We assess GenCorp's management and
governance as 'fair,'" S&P said.

"The outlook is stable. We expect credit ratios to deteriorate but
remain appropriate for the rating, pro forma for the acquisition
and likely pressure on DoD and NASA funding. We could lower the
rating if cuts to GenCorp's key programs or integration issues
result in earnings declining by more than we anticipate, such that
debt to EBITDA rises above 6.5x (before adjusting for pension
recoverability). Although unlikely, we could raise the rating over
the next year if debt to EBITDA falls below 4.5x for a sustained
period, potentially the because of debt reduction," S&P said.

"In the event that the acquisition is not completed because of
regulatory or other issues, we would likely affirm the ratings and
maintain the stable outlook. We revised the outlook to positive in
April 2012 before the acquisition was announced. While the company
has taken steps to improve profitability in recent years, we are
unlikely to raise the rating at this time because of substantial
uncertainty surrounding the federal budget," S&P said.


GENERAL MOTORS: Fitch Affirms 'BB+' on Repurchase from Govt.
------------------------------------------------------------
Fitch Ratings has affirmed the ratings of General Motors Company
(GM) and its wholly owned subsidiary, General Motors Holdings LLC
(GM Holdings), following the announcement that GM will repurchase
a portion of the common stock currently held by the U.S. Treasury
(UST).  The Issuer Default Ratings (IDR) for both GM and GM
Holdings are 'BB+', and the Rating Outlook for both is Stable.

GM announced that it has reached agreement with the UST to
repurchase 200 million common shares currently held by the UST for
$5.5 billion, which is expected to increase the public float of
GM's common stock above 50%.  GM expects to complete the
transaction before year end.  Following the repurchase, the UST
will continue to hold 300 million shares of common stock, equal to
a 19% stake in the company.  However, in conjunction with GM's
agreement to repurchase the shares, the UST has agreed to exit its
remaining stake in the company over the next 12 to 15 months and
to relinquish certain of its governance rights.

Fitch views the transaction as neutral to creditors in the near
term and somewhat positive over the longer term.  Although the
share repurchase will constitute a material use of cash, Fitch
expects GM's liquidity position to remain strong following the
transaction.  As of Sep. 30, 2012, GM had nearly $32 billion in
automotive cash, and in November 2012, the company closed on a new
$11 billion secured credit facility.  Therefore, Fitch expects GM
to have sufficient liquidity to complete the share repurchase and
maintain a total liquidity position well above the $25 billion
(combined cash and credit facility) level that Fitch has
previously identified as a key liquidity target for the company.

In the medium term, the removal of certain U.S. government
restrictions on GM will provide the company with additional
flexibility in operating its business and eliminate some of the
administrative requirements that it has had to perform as a
recipient of financial assistance from the UST.  Over time, Fitch
also expects the decline of the UST's ownership stake to lessen
the stigma associated with GM's government-supported bankruptcy
that has hung over the company and kept some potential customers
from considering GM brands.

GM's ratings incorporate the automaker's positive free cash flow
generating capability, very low leverage, strong liquidity
position, reduced (but still heavy) pension obligations and
improved product portfolio.  Fitch expects GM to continue with its
strategy of keeping a relatively low level of automotive debt on
its balance sheet while maintaining a strong liquidity position,
which will provide the company with substantial financial
flexibility in the event of another industry downturn.  Also
supporting GM's ratings is the global diversity of its operations,
which sets it apart from the other U.S. auto manufacturers.  In
particular, GM's strong presence in China and other emerging
markets helps to shield it from weakness in more mature regions.

Despite its strengthened financial position, GM also continues to
face a number of challenges.  The company's margins, particularly
in North America, remain below those of its strongest competitors,
and it continues to work on improving the efficiency of its
manufacturing and product development processes.  In addition,
GM's European business continues to generate substantial losses,
and weak market conditions and substantial restructuring actions
are likely to weigh on the company's financial performance in the
region for several more years.  The underfunded status of GM's
pension plans also remains relatively high, even after the planned
defeasing of its U.S. salaried retiree obligations.

Fitch could undertake a positive rating action on GM if the
company's margins, particularly in North America, rise to the
level of its strongest competitors and if the financial
performance of its European operations stabilizes.  Also factored
into any positive rating action would be a demonstrated ability to
at least maintain both market share and net pricing in the
company's key global markets.  Continued progress on reducing
pension liabilities will also be a key driver of any positive
rating action. Fitch will look for GM to maintain a sustained
automotive liquidity position of at least $25 billion, including
both cash and revolver availability.

On the other hand, Fitch could consider a negative rating action
if a very severe downturn significantly weakens GM's liquidity
position.  However, Fitch has incorporated into the current
ratings the effect that a downturn would likely have on the
company's credit profile, and GM appears to be generally well
positioned to withstand the pressures of a steep decline in
demand.  Fitch could also consider a negative rating action if
management deviates from its plan to maintain a strong balance
sheet, either by increasing automotive debt or allowing automotive
liquidity to fall below $25 billion for an extended period of
time.  Problems with operational execution or a significant
decline in market share could also lead to a negative action.

Fitch has affirmed the following ratings on GM and GM Holdings, as
follows:

GM

  -- Long-term IDR at 'BB+';
  -- Preferred stock rating at 'BB-';

GM Holdings

  -- Long-term IDR at 'BB+';
  -- Secured revolving credit facilities at 'BBB-';

The Rating Outlook is Stable.

Fitch notes that the ratings of General Motors Financial Company,
Inc. (GMF), a wholly owned subsidiary of GM, remain on Rating
Watch Positive pending the successful close of GMF's purchase of
certain of Ally Financial Inc.'s international operations.  Fitch
expects to equalize GMF's ratings to those of GM once the
acquisition is complete.  GMF's current IDR of 'BB' is one notch
below that of GM.


GEOKINETICS INC: Negotiating Debt Swap With Noteholders
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Geokinetics Inc. didn't make a $14.6 million interest
payment due Dec. 15 on senior secured notes and is in discussions
with creditors on a restructuring to be carried out through a
Chapter 11 filing.  Talks are aimed at converting the notes to
stock while swapping existing preferred stock for cash or out-of-
the-money warrants.  The restructuring is "likely" to be carried
out in bankruptcy court, the Houston-based company said in a
regulatory filing. The grace period for the missed interest
payment ends Jan. 14.

The $300 million in 9.75% first-lien bonds traded Dec. 18 for 41
cents on the dollar, according to Trace, the bond-price reporting
system of the Financial Industry Regulatory Authority.

The stock closed on Dec. 4 at 33 cents, down 17% in New York Stock
Exchange composite trading. The three-year closing high was $10.76
Jan. 19, 2010. The low in the period was 13.8 cents on Sept. 7.

                         About Geokinetics

Headquartered in Houston, Texas, Geokinetics Inc., a Delaware
corporation founded in 1980, is provides seismic data acquisition,
processing and integrated reservoir geosciences services, and
land, transition zone and shallow water OBC environment
geophysical services.  These geophysical services include
acquisition of 2D, 3D, time-lapse 4D and multi-component seismic
data surveys, data processing and integrated reservoir geosciences
services for customers in the oil and natural gas industry, which
include national oil companies, major international oil companies
and independent oil and gas exploration and production companies
worldwide.

The Company's balance sheet at June 30, 2012, showed
$410.85 million in total assets, $580.10 million in total
liabilities, $88.19 million of Series B-1 Senior Convertible
Preferred Stock, and a stockholders' deficit of $257.44 million.

                           *     *     *

Standard & Poor's Ratings Services in December 2012 lowered its
corporate credit rating on Geokinetics Holdings Inc. to 'D' from
'CCC-'.  The rating action follows Geokinetics' announcement on
Dec. 17, 2012 that it missed its interest payment on its 9.75%
senior secured notes due in 2014.

Moody's Investors Service downgraded Geokinetics Holdings USA,
Inc.'s Corporate Family Rating, its senior secured notes rating
and Probability of Default Rating to Ca from Caa2.  The downgrade
follows parent guarantor Geokinetics Inc.'s announcement on
Dec. 17, 2012 that it would not make the interest payments.


GREENWICH SENTRY: Limited Partners Fail to Advance Interests
------------------------------------------------------------
Christopher McLaughlin Keough, Quantum Hedge Strategies Fund, LP
and SIM Hedge Strategies Trust appeal a June 1, 2012 order of the
Bankruptcy Court (Burton R. Lifland, U.S.B.J.), which held that
because they did not file proofs of interest pursuant to a court
order, they are not holders of allowed limited partner interests
entitled to distributions under the confirmed plans of Greenwich
Sentry L.P. and its affiliate, Greenwich Sentry Partners, L.P.
Keough et al. contend the Bankruptcy Court's order is contrary to
the text of the Bankruptcy Act and the relevant Bankruptcy Rules.
District Judge P. Kevin Castel, however, held that the Bankruptcy
Court did not act contrary to statute, and its June 1 order is
affirmed.

Keough, Quantum and SIM are limited partners of Greenwich Sentry.

The appellate case, CHRISTOPHER McLAUGHLIN KEOUGH, QUANTUM HEDGE
STRATEGIES FUND, LP, and SIM HEDGED STRATEGIES TRUST, Appellants,
v. 217 CANNER ASSOCIATES, LLC, Liquidating Trustee, Appellee, Nos.
12 Civ. 5622 (PKC), 10-16229 (BRL) (S.D.N.Y.).  A copy of the
Court's Dec. 17, 2012 Memorandum and Order is available at
http://is.gd/RsEyFGat http://is.gd/RsEyFGfrom Leagle.com.

                      About Greenwich Sentry

Greenwich Sentry, L.P. and Greenwich Sentry Partners, L.P., filed
for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-16229) on
Nov. 19, 2010, hoping to settle lawsuits filed against it in
connection with its investments with Bernard L. Madoff.  Paul R.
DeFilippo, Esq., at Wollmuth Maher & Deutsch LLP, in New York,
represents the Debtors in the Chapter 11 cases.

Bernard L. Madoff was charged by the Securities and Exchange
Commission in December 2008 of orchestrating the largest Ponzi
scheme in history, with losses topping US$50 billion. In March
2009, Mr. Madoff pleaded guilty to 11 federal crimes and admitted
to turning his wealth management business into a Ponzi scheme.  A
trustee was appointed to liquidate and has been filing clawback
suits against investors who withdrew phony profits from Mr.
Madoff.

On May 18, 2009, Irving H. Picard, the trustee liquidating the
estate of Mr. Madoff and his firm, Bernard L. Madoff Investment
Securities, LLC, filed a lawsuit against Fairfield Sentry Limited
and Greenwich, seeking the return of $3.55 billion that Fairfield
withdrew from Madoff during the period from 2002 to Madoff's
arrest in December 2008.  Since 1995, the Fairfield funds invested
about $4.5 billion with BLMIS.

Liquidators of Fairfield Sentry Limited, filed a Chapter 15
petition for Fairfield in June 2010 (Bankr. S.D.N.Y. Case No.
10-13164).  In July 2010, Kenneth Krys and Christopher Stride of
Krys & Associates (BVI) Limited, the liquidators of Fairfield
Sentry Limited, Fairfield Sigma Limited and Fairfield Lambda
Limited obtained cross-border recognition as foreign main
proceedings by the U.S. Bankruptcy Court of the funds' insolvency
proceedings, pending in the British Virgin Islands.  The
liquidators are represented in the U.S. by Brown Rudnick LLP.

Fairfield Sentry Limited was the largest "feeder fund" to Bernard
L. Madoff Investment Securities LLC, and invested approximately
95% of its assets with BLMIS.  BLMIS was placed into liquidation
proceedings in the United States in December 2008, after it was
revealed that Bernard Madoff operated BLMIS as a Ponzi scheme for
many years.  Fairfield Sigma Limited and Fairfield Lambda Limited
were both feeder funds of Fairfield Sentry Limited, and invested
all of their assets with Fairfield Sentry Limited.

Mr. Picard claims that Fairfield knew or should have known about
the fraud give that it received from BLMIS unrealistically high
and consistent annual returns of between 10% and 21% in contrast
to the vastly larger fluctuations in the S&P 100 Index.

In schedules filed with the Court, Greenwich Sentry disclosed
$317,073,770 in total assets and $206,337,244 in total
liabilities.

On Dec. 22, 2011, the Court confirmed the First Amended Plan for
Greenwich Sentry, L.P. and Greenwich Sentry Partners, L.P.  The
First Amended Plans were declared effective Feb. 24, 2012.

The central feature of the Greenwich Sentry Partners Plan is the
BLMIS trustee settlement, wherein the Debtor believing, pursuant
to its good faith business judgment, that avoidance action claims
of the BLMIS trustee would be difficult to defend, has agreed, in
sum, to allow the BLMIS trustee a claim and judgment of $5,985,000
and the BLMIS trustee has agreed to seek recovery of his claim
only from certain specified assets of the Debtor, to allow the
Debtor's customer claim against BLMIS of $2,011,304, to share
recovery on certain litigation claims with the Debtor, and to
provide for the distribution of the retained assets to creditors
and limited partners free and clear of the BLMIS trustee claims.


HARRISBURG, PA: City Council Passes 2013 Budget
-----------------------------------------------
Tara Leo Auchey, writing for Today's The Day Harrisburg, reports
that the Harrisburg City Council passed a budget for the next year
earlier than they have in years.  Today's The Day Harrisburg says
the 2013 Budget was passed not balanced, and with carry over debt
from 2010 and 2011 along with a bit from this year, that takes the
City into the new year with more than a $15 million structural
deficit.  A copy of the article is available at
http://is.gd/wB27Hf

                  About Harrisburg, Pennsylvania

The city of Harrisburg, in Pennsylvania, is coping with debt
related to a failed revamp of an incinerator.  The city is
$65 million in default on $242 million owing on bonds sold to
finance an incinerator that converts trash to energy.

The Harrisburg city council voted 4-3 on Oct. 11, 2011, to
authorize the filing of a Chapter 9 municipal bankruptcy (Bankr.
M.D. Pa. Case No. 11-06938).  The city claims to be insolvent,
unable to pay its debt and in imminent danger of having
tax revenue seized by holders of defaulted bonds.

Judge Mary D. France presided over the Chapter 9 case.  Mark D.
Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's
counsel.  The petition estimated $100 million to $500 million in
assets and debts.  Susan Wilson, the city's chairperson on Budget
and Finance, signed the petition.

Harrisburg said in court papers it is in imminent jeopardy through
six pending legal actions by creditors with respect to a number of
outstanding bond issues relating to the Harrisburg Materials,
Energy, Recycling and Recovery Facilities, which processes waste
into steam and electrical energy.  The owner and operator of the
incinerator is The Harrisburg Authority, which is unable to pay
the bond issues.  The city is the primary guarantor under each
bond issue.  The lawsuits were filed by Dauphin County, where
Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and
Covanta Harrisburg Inc.

The Commonwealth of Pennsylvania, the County of Dauphin, and
Harrisburg city mayor Linda D. Thompson and other creditors and
interested parties objected to the Chapter 9 petition.  The state
later adopted a new law allowing the governor to appoint a
receiver.

Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss
Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg,
P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to
the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey
G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor.

In November 2011, the Bankruptcy Judge dismissed the Chapter 9
case because (1) the City Council did not have the authority under
the Optional Third Class City Charter Law and the Third Class City
Code to commence a bankruptcy case on behalf of Harrisburg and (2)
the City was not specifically authorized under state law to be a
debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2).

Dismissal of the Chapter 9 petition was upheld in a U.S. District
Court.

That same month, the state governor appointed David Unkovic as
receiver for Harrisburg.  Mr. Unkovic is represented by the
Municipal Recovery & Restructuring group of McKenna Long &
Aldridge LLP, led by Keith Mason, Esq., co-chair of the group.

Mr. Unkovic resigned as receiver March 30, 2012.


HILLMAN GROUP: Moody's Affirms 'B2' CFR; Rates $65MM Notes 'B2'
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to the Hillman
Group, Inc.'s incremental $65 million 10.875% senior unsecured
notes. Concurrently, Moody's affirmed Hillman's B2 corporate
family and probability of default ratings, Ba3 senior secured
credit facility rating, and the B3 rating on its existing $200
million 10.875% senior unsecured notes. The outlook remains
stable.

Proceeds from the $65 million bond issuance combined with the $77
million delayed draw term loan will be used to fund Hillman's
pending $105 million acquisition of Canadian fastener maker, H.
Paulin & Co., Limited (Paulin), to repay drawings under the
revolving credit facility ($12 million outstanding as of September
30, 2012), and for general corporate purposes. The $65 million
bond must be repaid by March 28, 2013 if the acquisition does not
occur by that date. Furthermore, the $77 million delayed draw term
loan will expire on April 1, 2013.

While the transaction is credit negative as it will significantly
increase Hillman's leverage, it will not impact the ratings or the
outlook as Moody's expects the company to deleverage relatively
quickly with EBITDA generated by Paulin. According to Moody's
Analyst Mariko Semetko, "Hillman has a very acquisitive business
model and is not averse to using debt to finance growth, but
management has a consistent track record of deleveraging following
acquisitions."

Immediately following closing of the proposed acquisition, Moody's
expects Hillman's debt/EBITDA will be in the high-7-times range.
Assuming no additional debt-funded acquisitions or capital
projects, the leverage metric should fall below 7 times within a
year.

While the acquisition makes strategic sense as it will expand
Hillman's presence in Canada, integration risks are high in
Moody's view. The Paulin acquisition is large for Hillman
considering its acquisitions tend to be below $50 million. Should
the integration take longer or should Paulin not generate EBITDA
as expected, Hillman's debt leverage may remain high and interest
coverage may weaken, and could pressure the rating or the outlook.

The ratings are subject to the receipt and review of final
documentation.

The following rating was assigned:

- $65 million senior unsecured notes due 2018 at B3 (LGD5, 73%)

The following ratings were affirmed and LGD modified:

- Corporate family rating at B2

- Probability of default rating at B2

- $30 million senior secured revolving credit facility due 2015
   at Ba3 (LGD2, 23% from 26%)

- $313 million senior secured term loan due 2016 at Ba3 (LGD2,
   23% from 26%)

- $77 million senior secured delayed draw term loan due 2016 at
   Ba3 (LGD2, 23% from 26%)

- $200 million senior unsecured notes due 2018 at B3 (LGD5, 73%
   from 75%)

- Speculative grade liquidity rating of SGL-3

The outlook is stable.

Ratings Rationale

Hillman's B2 corporate family rating reflects its high debt
leverage, highly acquisitive growth strategy, aggressive financial
policies, and modest scale. Since its May 28, 2010 LBO, the
company has used debt financing to make a series of acquisitions,
resulting in high and volatile debt leverage. The company's
private equity ownership increases the likelihood of aggressive
financial policies and shareholder-friendly activities that could
be detrimental to lenders. At the same time, Hillman's rating is
supported by the replenishment nature and low price point of its
products, which limits the company's susceptibility to changes in
discretionary consumer spending and provides a high degree of
earnings stability. The rating is also supported by the company's
credible position with well recognized retailers.

The stable outlook reflects Moody's expectations for modest
organic revenue and earnings growth and the maintenance of
adequate liquidity. Furthermore, the outlook assumes that the
company will increase debt solely for accretive acquisitions or
capital projects that will result in deleveraging within six to
twelve months.

Material debt funded acquisitions, sustained erosion in operating
margins, sustained negative free cash flow, or deterioration of
liquidity for any reason could negatively impact the B2 rating.
Furthermore, negative rating pressures will build with any
integration problems or if the company further materially
increases leverage before the Paulin acquisition is substantially
integrated. Specifically, debt/EBITDA sustained near 7.5 times or
EBITA/interest expense approaching 1.0 time could result in a
downgrade.

The magnitude of improvement in credit metrics required to sustain
a higher rating and an aggressive fiscal policy constrain upward
momentum. An upgrade is unlikely absent an equity funded
acquisition or contribution to debt pay-down that materially
improves the credit profile. Specific metrics required for a
higher rating include debt/EBITDA below 4.5 times and free cash
flow/debt approaching 10%.

The principal methodology used in rating The Hillman Group, Inc.
was the Global Consumer Durables 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.

The Hillman Companies, Inc., headquartered in Cincinnati, OH,
sells hardware including fasteners, rods, keys, tags and signs to
retailers in the North and South Americas as well as in Australia.
It also provides related services including installing and
maintaining key duplication and engraving machines. Revenues are
over $500 million. Since the May 28, 2010 buyout, Hillman has been
owned by private equity firm Oak Hill Capital Partners.


HMX ACQUISITION: Hart Schaffner Brands Draw No Competing Bids
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that HMX Acquisition Corp. was scheduled to appear in
court Dec. 19 to seek approval to sell the business to Authentic
Brands Group LLC, the stalking horse bidder.  There were no
competing bids, so the auction was canceled.

Authentic Brands is buying the business for enough to cover the
$60.6 million loan from Salus Capital Partners LLC, an affiliate
of Harbinger Group Inc., plus $5 million to $9 million in cash.

Objections to the sale from the official creditors' committee were
resolved, Robert Kugler of Leonard Street & Deinard said in an
interview.  Mr. Kugler is a lawyer for the committee.

When the sale process began, HMX said a sale to Authentic Brands
would enable "a projected dividend to unsecured creditors."

Meanwhile, Stephanie Gleason at Dow Jones' DBR Small Cap earlier
reported that HMX Group notified the bankruptcy court that it has
reached a licensing agreement with lead bidder Authentic Brands
Group, a critical component of the deal that will keep current
management and workers in place.

                       About HMX Acquisition

HMX Acquisition Corp. and HMX Poland Sp. z o. o. filed for Chapter
11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 12-14300 and
12-14301) on Oct. 19, 2012.  On Oct. 21, 2012, affiliates HMX,
LLC, Quartet Real Estate, LLC, and HMX, DTC Co. also filed for
Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Cases Nos. 12-
14327 to 12-14329).  Judge Allan L. Gropper presides over the
cases.  The Debtors are seeking to have their cases jointly
administered for procedural purposes under Case No. 12-14300,
which is the case number assigned to HMX Acquisition Corp.  The
Debtors' principal place of business is located at 125 Park
Avenue, in New York.

The Debtors are leading American designers, manufacturers,
licensors, and licensees of men's and women's business and leisure
apparel focused primarily on the luxury, bridge, and better price
points.  The Debtors are the largest manufacturer and marketer of
U.S.-made men's tailored clothing, with an attractive portfolio of
owned and licensed brands sold primarily through upscale
department stores, specialty stores, and boutiques.

As of Oct. 12, 2012, the Debtors had consolidated assets of
$153.6 million and total liabilities of $119.5 million.

Jared D. Zajac, Esq., at Proskauer Rose LLP, in New York; and Mark
K. Thomas, Esq., and Peter J. Young, Esq., in Proskauer Rose LLP,
in Chicago, represent the Debtors as counsel.  The Debtors'
investment banker is William Blair & Company, L.L.C.  CDG Group,
LLC, is the Debtors' financial advisor.  Epiq Bankruptcy
Solutions, LLC is the Debtors' claims agent.

Tracy Hope Davis, the U.S. Trustee for Region 2, appointed five
members to the official committee of unsecured creditors.


HOVNANIAN ENTERPRISES: Incurs $84.4MM Net Loss in Oct. 31 Quarter
-----------------------------------------------------------------
Hovnanian Enterprises, Inc., reported a net loss of $84.41 million
on $487.04 million of total revenues for the three months ended
Oct. 31, 2012, compared with a net loss of $98.34 million on
$341.62 million of total revenues for the same period during the
prior year.

For the 12 months ended Oct. 31, 2012, the Company reported a net
loss of $66.19 million on $1.48 billion of total revenues,
compared with a net loss of $286.08 million on $1.13 billion of
total revenues for the same period a year ago.

The Company's balance sheet at Oct. 31, 2012, showed $1.68 billion
in total assets, $2.16 billion in total liabilities and a $485.34
million in total deficit.

"We are very happy to report a pre-tax profit before debt
extinguishment gains or losses for the first time in 25 quarters.
The fourth quarter marked the sixth sequential increase in our
quarterly gross margin percentage, and our gross margin has
improved 350 basis points over that period," said Ara K.
Hovnanian, Chairman of the Board, President and Chief Executive
Officer.  "During fiscal 2012, we were able to generate
significant operating leverage by holding our total SG&A and
interest expenses at a fairly constant dollar amount, while
growing our revenues by more than 30%.  As a result, our SG&A as a
percentage of total sales declined to 10.0% during the fourth
quarter, which by historical standards we consider a normalized
level.  Furthermore, our sales growth continued with a 46%
increase in dollar value of net contracts for the quarter and a
34% increase in dollar value of our backlog."

"After the worst downturn that the homebuilding industry has ever
seen, I do not think there is any question that the industry is
finally in a period of modest recovery.  Building homes creates
jobs for carpenters, electricians, plumbers and many other trades,
as well as jobs in related industries like manufacturing
appliances and home furnishings.  A sustained recovery in the
homebuilding sector will help drive overall improvement in the
U.S. economy and that will encourage even more consumers to buy a
home," concluded Mr. Hovnanian.

A copy of the press release is available for free at:

                        http://is.gd/TzL7hH

                    About Hovnanian Enterprises

Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV)
-- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian,
is one of the nation's largest homebuilders with operations in
Arizona, California, Delaware, Florida, Georgia, Illinois,
Kentucky, Maryland, Minnesota, New Jersey, New York, North
Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and
West Virginia.  The Company's homes are marketed and sold under
the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton
Homes, Parkwood Builders, Town & Country Homes, Oster Homes and
CraftBuilt Homes.  As the developer of K. Hovnanian's Four Seasons
communities, the Company is also one of the nation's largest
builders of active adult homes.

The Company reported a net loss of $286.08 million for the fiscal
year ended Oct. 31, 2011, compared with net income of $2.58
million during the prior fiscal year.

The Company's balance sheet at July 31, 2012, showed $1.62 billion
in total assets, $2.02 billion in total liabilities and a $404.20
million total deficit.

                           *     *     *

As reported by the TCR on Nov. 7, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Hovnanian
Enterprises Inc. to 'CCC+' from 'CCC-' and removed it from
CreditWatch positive.

"We raised our corporate credit rating to reflect operating
performance that is better than we expected, resulting in
narrowing pretax losses," said credit analyst George Skoufis.  "It
also reflects improved liquidity following the recent debt
issuances that will extend the bulk of the company's 2016
maturities to 2020 and reduce its overall interest burden."

In the Dec. 11, 2012, edtiiton of the TCR, Fitch Ratings has
affirmed the ratings for Hovnanian Enterprises, Inc. (NYSE: HOV),
including the company's Issuer Default Rating (IDR), at 'CCC'.
The rating for HOV is influenced by the company's execution of its
business model, land policies, and geographic, price point and
product line diversity.  The rating additionally reflects the
company's liquidity position, substantial debt and high leverage.

Hovnanian carries 'Caa2' corporate family and probability of
default ratings from Moody's.

Moody's said in April 2012 that the Caa2 corporate family rating
reflects Hovnanian's elevated debt leverage weak gross margins,
continued operating losses, negative cash flow generation, and
Moody's expectation that the conditions in the homebuilding
industry over the next one to two yeas will provide limited
opportunities for improvement in the company's operating and
financial metrics.  In addition, the ratings consider Hovnanian's
negative net worth position, which Moody's anticipates will be
further weakened by continuing operating losses and impairment
charges.  As a result, adjusted debt leverage, currently standing
at 149%, is likely to increase further.


HUNTER FAN: Moody's Affirms 'B3' CFR; Rates Term Loan 'Caa1'
------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to Hunter Fan
Company's proposed $55 million senior secured second lien term
loan due 2018. Concurrently, Moody's affirmed all other existing
ratings including the company's B3 corporate family and
probability of default ratings and the B1 first lien credit
facility ratings. The outlook is stable.

The company has elected not to proceed with the $25 million one-
time dividend it had proposed in November 2012. The decision to
not pay the dividend is credit positive but is not enough to
change the B3 corporate family rating or the stable outlook. While
Moody's now expects the company to maintain solid credit metrics
for its B3 rating, the company's small scale, narrow product
focus, and customer concentration constrain the rating. Moreover,
the company has shown a willingness to increase its leverage to
fund a special dividend, and the private equity ownership
increases the likelihood of aggressive financial policies.

The new proposed capital structure will consist of a five-year
$125 million senior secured first lien facility (comprised of a
$25 million revolver and a $100 million term loan) and a six-year
$55 million senior secured second lien term loan. The maturities
for each facility have been reduced by one year and pricing has
increased compared to the initial plan. Because Hunter's nearest
maturity is not until 2017 and its interest expense pro forma for
the revised financing is effectively unchanged despite the higher
rates because of reductions in the first and second lien term
loans, these changes will not have any meaningful impact on the
company's adequate liquidity profile.

The ratings are subject to the receipt and review of final
documentation upon closing of the proposed refinancing
transaction.

Rating assigned:

- Proposed senior secured second lien term loan due 2018 at Caa1
   (LGD5, 75%)

Ratings affirmed:

- Corporate Family Rating at B3

- Probability of Default Rating at B3

- Proposed senior secured revolver due 2017 at B1 (LGD2, 29%)

- Proposed senior secured first lien term loan due 2017 at B1
   (LGD2, 29%)

The following ratings will be withdrawn upon closing of
transaction:

- Senior secured first lien revolving credit facility due 2014
   at B1 (LGD2, 29%)

- Senior secured first lien term loan due 2014 at B1 (LGD2, 29%)

- Senior secured second lien term loan due 2014 at Caa1 (LGD5,
   76%)

Ratings Rationale

Hunter's B3 corporate family rating is constrained by its high
financial leverage, small scale, narrow product focus, and heavy
product and customer concentrations. The company's private equity
ownership increases the likelihood of aggressive financial
policies and shareholder-friendly activities that could be
detrimental to lenders. At the same time, positive rating
consideration is given to the company's well recognized brand
names, its credible market position, and its demonstrated ability
to maintain solid margins through aggressive cost efficiencies. In
addition, Moody's expects the company will maintain at least
adequate liquidity in the next twelve months, supported by
expectations of modestly positive free cash flow, comfortable room
under financial covenants and availability under the proposed
revolving credit facility.

The stable outlook reflects Moody's expectations that Hunter will
achieve moderate earnings and credit metric improvement while
maintaining adequate liquidity.

An upgrade would require an increase in scale, material credit
metric improvements, and more robust liquidity. Quantitatively,
the ratings could be upgraded if debt/EBITDA is sustained below
5.0 times and EBITA/interest expense is maintained above 2.0
times.

The ratings or rating outlook could be negatively impacted if
operating performance were to deteriorate in a way that caused
debt protection metrics to weaken materially. Specifically,
ratings could be downgraded if debt/EBITDA is sustained at or
above 6.5 times or EBITA/interest expense approaches 1.0 times.
Further, any deterioration in liquidity may result in a downgrade.

The principal methodology used in rating Hunter Fan Company was
the Global Consumer Durables 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.

Headquartered in Memphis, Tennessee, Hunter Fan Company designs,
engineers, sources and markets ceiling fans and home comfort
appliances primarily under the "Hunter" and "Casablanca" brands.
Revenues for the twelve months ended July 31, 2012 were $237
million. The company is owned by private equity firm, MidOcean
Partners. Hunter's fiscal year ends in late October.


INDYMAC BANCORP: FDIC Approaches Endgame in Clean Up
----------------------------------------------------
Patrick Fitzgerald at Daily Bankruptcy Review reports that more
than four years after the collapse of IndyMac Bank, one of the
costliest bank failures in history, the Federal Deposit Insurance
Corp. is wrapping up a number of civil lawsuits against the
thrift's executives.

                       About Indymac Bancorp

Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) --
http://www.indymacbank.com/-- is the holding company for IndyMac
Bank FSB, a hybrid thrift/mortgage bank that originated mortgages
in all 50 states of the United States.  Through its hybrid thrift-
mortgage bank business model, IndyMac designed, manufactured, and
distributing cost-efficient financing for the acquisition,
development, and improvement of single-family homes.  IndyMac also
provided financing secured by single-family homes to facilitate
consumers' personal financial goals and strategically invests in
single-family mortgage-related assets.

On July 11, 2008, the Office of Thrift Supervision closed IndyMac
Bank and appointed FDIC as the bank's receiver.  Thacher Proffitt
& Wood LLP was engaged as counsel to the FDIC.

Indymac Bancorp filed for Chapter 7 bankruptcy protection (Bankr.
C.D. Calif., Case No. 08-21752) on July 31, 2008.  Representing
the Debtor are Dean G. Rallis, Jr., Esq., and John C. Weitnauer,
Esq.  Bloomberg noted that Indymac had about $32.01 billion in
assets as of July 11, 2008.  In court documents, IndyMac disclosed
estimated assets of $50 million to $100 million and estimated
debts of $100 million to $500 million.


INSPIRATION BIOPHARMACEUTICALS: Sale Approval Hearing on Jan. 24
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Inspiration Biopharmaceuticals Inc. was authorized by
the bankruptcy court in Boston to sell the assets at auction.  No
buyer is yet under contract.  A hearing for sale approval was set
for Jan. 24.

               About Inspiration Biopharmaceuticals

Inspiration Biopharmaceuticals Inc. develops recombinant blood
coagulation factor products for the treatment of hemophilia.
Inspiration, based in Cambridge, Massachusetts, has two products
in what the company calls "advanced clinical development."  Two
other products are in "pre-clinical development."  None of the
products can be marketed as yet.

Inspiration filed for voluntary Chapter 11 reorganization (Bankr.
D. Mass. Case No. 12-18687) on Oct. 30, 2012, in Boston.
Bankruptcy Judge William C. Hillman oversees the case.  Mark
Weinstein and Michael Nolan, at FTI Consulting, Inc., serve as the
Debtor's Chief Restructuring Officers.  The Debtor is represented
by Harold B. Murphy of Murphy & King.

The petition shows assets and debt both exceed $100 million.
Assets include patents, trademarks and the products in
development.  Liabilities include $195 million owing to Ipsen
Pharma SAS, which is also a 15.5% shareholder.  Ipsen is also owed
$19.4 million in unsecured debt.  There is another $12 million in
unsecured claims.  Ipsen is pledged to provide $18.3 million in
financing.  The Debtor disclosed $20,383,300 in assets and
$241,049,859 in liabilities.

As part of its bankruptcy, Inspiration is seeking to sell its
assets to a third party purchaser.  Ipsen -- http://www.ipsen.com/
-- a global specialty driven pharmaceutical company, also has
agreed to include its hemophilia assets in the sale process under
certain conditions.  Ipsen is represented by J. Eric Ivester,
Esq., at Skadden Arps.

The Official Committee of Unsecured Creditors tapped Jeffrey D.
Sternklar and Duane Morris LLP as its counsel, and The Hawthorne
Consulting Group, LLC as its financial advisor.


INTERLEUKIN GENETICS: Pyxis Innovations Holds 55.7% Equity Stake
----------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Pyxis Innovations Inc. and its affiliates
disclosed that, as of Nov. 30, 2012, they beneficially own
37,579,298 shares of common stock of Interleukin Genetics, Inc.,
representing 55.7% of the shares outstanding.  Pyxis previously
reported beneficial ownerhip of 37,585,785 common shares as of
April 13, 2012.  A copy of the amended filing is available for
free at http://is.gd/x3yKIj

                         About Interleukin

Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized
health company that develops unique genetic tests to provide
information to better manage health and specific health risks.

Following the Company's financial results for the year ended
Dec. 31, 2011, Grant Thornton LLP, in Boston, Massachusetts,
expressed substantial doubt about Interleukin Genetics' ability to
continue as a going concern.  The independent auditors noted that
the Company incurred a net loss of $5.02 million during the year
ended Dec. 31, 2011, and, as of that date, the Company's current
liabilities exceeded its current assets by $12.27 million and its
total liabilities exceeded total assets by $11.4 million.

The Company reported a net loss of $5.0 million for 2011, compared
with a net loss of $6.0 million for 2010.

The Company's balance sheet at Sept. 30, 2012, showed $3.50
million in total assets, $15.96 million in total liabilities, all
current, and a $12.45 million total stockholders' deficit.


INTERSTATE BAKERIES: Trust Wins Clawback Suit v. Premium Food
-------------------------------------------------------------
U.S. Bank, in its capacity as trustee of the IBC Creditor's trust,
seeks partial summary judgment in an action to avoid and recover
$412,240 in allegedly preferential transfers the Debtor made to
Premium Food Sales, Inc. in the 90 days before the Debtor's
bankruptcy petition date.  The Trustee seeks a determination as a
matter of law that: 1) it has established all of the requirements
under 11 U.S.C. Sec. 547(b) for avoidance of the Transfers; 2)
Premium has no defense to this action, with the exception of the
Sec. 547(c)(2) "Ordinary Course Defense" or the Sec. 547(c)(4)
"New Value Defense," which defenses the Trustee concedes will be
determined at trial; and 3) the amount of any credit for new value
Premium is ultimately able to claim will be calculated using the
delivery dates and amounts set forth in the Trustee's motion.

In a Dec. 19, 2012 Memorandum Opinion available at
http://is.gd/xRk8MZfrom Leagle.com, Bankruptcy Judge Jerry W.
Venters granted the Trustee's motion in all regards.  The judge
said the uncontroverted facts establish judgment as a matter of
law that: 1) the Transfers are avoidable under 11 U.S.C. Sec.
547(b); 2) Premium cannot shield the Transfers from avoidance
under Sec. 547(c)(1); 3) Premium's ability to shield the Transfers
from avoidance under Sec. 547(c)(2) and (c)(4) will be determined
at the trial currently scheduled for April 10, 2013; and 4) any
credit for new value will be calculated using the delivery dates
and amounts set forth in the ruling.

The lawsuit is, US BANK NATIONAL ASSOCIATION, in its capacity as
Trustee of the IBC CREDITOR'S TRUST, Plaintiffs, v. Petro
Commercial Services Inc.; RND Enterprises, LLC f/k/a RND
Mechanical Contractors, Inc.; Premium Food Sales Inc.; Prime
Industrial Recruiters, Inc.; Public Service Electric and Gas
Company d/b/a PSE&G, Defendants, Original Adversary Proceeding No.
09-4191, Bifurcated Adversary Proceeding No. 09-4205 (Bankr. W.D.
Mo.).

                        About Hostess Brands

Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder.  Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.

Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York.  DHostess Brands disclosed
assets of $982 million and liabilities of $1.43 billion as of the
Chapter 11 filing.

The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814).

In the new Chapter 11 case, Hostess has hired Jones Day as
bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, and
Kurtzman Carson Consultants LLC as administrative agent.

Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.

Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are Jeffrey R. Freund, Esq.,
at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David
A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright &
Jaworski L.L.P.

The official committee of unsecured creditors selected New York
law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom
Mayer and Ken Eckstein head the legal team for the committee.

Hostess Brands in mid-November opted to pursue the orderly wind
down of its business and sale of its assets after the Bakery,
Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a
nationwide strike.  The Debtor failed to reach an agreement with
BCTGM on contract changes.  Hostess Brands said it intends to
retain approximately 3,200 employees to assist with the initial
phase of the wind down. Employee headcount is expected to decrease
by 94% within the first 16 weeks of the wind down.  The entire
process is expected to be completed in one year.

The bankruptcy judge signed a formal order on Nov. 30 giving final
approval to wind-down procedures. The latest budget projects the
$49 million loan for the Chapter 11 case being paid down to
$21.2 million by Feb. 22.


IZEA INC: Acquires Twitter Marketing Platform FeaturedUsers
-----------------------------------------------------------
IZEA, Inc., has acquired Twitter marketing platform FeaturedUsers
in a cash-plus-stock transaction that will enable IZEA to expand
its portfolio of social media fan-building services while giving
existing FeaturedUsers customers access to IZEA's global audience.

Launched in 2010, FeaturedUsers was among the first ad networks
specifically designed to help Twitter users grow their followers.
The FeaturedUsers network has served more than 3,500 advertisers
including The American Cancer Society, HootSuite and Radian6.

"Our brand marketing clients and influencers are always looking
for ways to increase their social reach," said Ted Murphy, CEO of
IZEA.  "The acquisition of FeaturedUsers allows our customers to
purchase exposure on leading Twitter-related websites, building
real fans that are genuinely interested in what they have to say."

IZEA's FeaturedUsers platform offers promotional plans starting at
just $19 per month.  The platform provides geographic and language
targeting as well as real-time analytics for advertisers.  IZEA
has updated and redesigned FeaturedUsers.com commensurate with the
acquisition announcement.

"IZEA pioneered the social media sponsorship space and uniquely
understands the value of social influence," said Trey Copeland,
CEO of FeaturedUsers.  "This acquisition creates more value for
our loyal customer-base and provides them with opportunities to
further monetize their reach."

FeaturedUsers is the second acquisition IZEA has made within the
Twitter application ecosystem.  In 2011, IZEA acquired advertising
network Magpie, which was based in Germany and broadened the
company's European footprint.  "We are actively looking for other
acquisition targets in the Twitter space and across the social-
sphere," said Murphy.  "With current market conditions, I believe
there is a tremendous opportunity for consolidation of social
media sponsorship platforms and expansion into related offerings."

                          About IZEA, Inc.

IZEA, Inc., headquartered in Orlando, Fla., believes it is a world
leader in social media sponsorships ("SMS"), a rapidly growing
segment within social media where a company compensates a social
media publisher to share sponsored content within their social
network.  The Company accomplishes this by operating multiple
marketplaces that include its platforms SocialSpark,
SponsoredTweets and WeReward, as well as its legacy platforms
PayPerPost and InPostLinks.

The Company has incurred significant losses from operations since
inception and has an accumulated deficit of $20.9 million as of
June 30, 2012.

Cross, Fernandez & Riley, LLP, in Orlando, Florida, expressed
substantial doubt about IZEA's ability to continue as a going
concern, following the Company's results for the fiscal year ended
Dec. 31, 2011.  The independent auditors noted that the Company
has incurred recurring operating losses and had an accumulated
deficit at Dec. 31, 2011, of $18.1 million.


JEFFERSON COUNTY, AL: Birmingham Suit Over Hospital Closure Stayed
------------------------------------------------------------------
Bankruptcy Judge Thomas B. Bennett ruled that the automatic stay
imposed in the Chapter 9 bankruptcy case of Jefferson County also
applies to actions sought to be taken by the City of Birmingham,
Alabama, William A. Bell, Sr. in his capacity as the Mayor of
Birmingham, and both of them ex rel the State of Alabama, against
the county's hospital property, Cooper Green Mercy Hospital.

The Court ruled that a lawsuit by Birmingham et al. in a court of
the State of Alabama seeking a determination of the scope and
applicability of the Alabama Health Care Responsibility Act to
Jefferson County's decision to cease providing medical services is
stayed.  An AHCRA-based action against the Jefferson County
Commissioners is also stayed.

Cooper Green Mercy Hospital is owned by Jefferson County, Alabama,
and functions as one of its departments.  The Jefferson County
Commission has authority to direct, control, and maintain property
of the County, including Cooper Green.  Cooper Green has a storied
history of caring for Jefferson County residents who are unable to
pay for medical care.

A copy of the Court's Dec. 19, 2012 Memorandum Opinion is
available at http://is.gd/SWo4aDfrom Leagle.com.

                      About Jefferson County

Jefferson County has its seat in Birmingham, Alabama.  It has a
population of 660,000.

Jefferson County filed a bankruptcy petition under Chapter 9
(Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an
agreement among elected officials and investors to refinance
$3.1 billion in sewer bonds fell apart.

John S. Young Jr. LLC was appointed as receiver by Alabama Circuit
Court Judge Albert Johnson in September 2010.

Jefferson County's bankruptcy represents the largest municipal
debt adjustment of all time.  The county said that long-term debt
is $4.23 billion, including about $3.1 billion in defaulted sewer
bonds where the debt holders can look only to the sewer system for
payment.

The county said it would use the bankruptcy court to put a value
on the sewer system, in the process fixing the amount bondholders
should be paid through Chapter 9.

Judge Thomas B. Bennett presides over the Chapter 9 case.  Lawyers
at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff &
Stern LLP, led by Kenneth Klee, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC serves as claims and noticing
agent.  Jefferson estimated more than $1 billion in assets.  The
petition was signed by David Carrington, president.

The bankruptcy judge in January 2012 ruled that the state court-
appointed receiver for the sewer system largely lost control as a
result of the bankruptcy. Before deciding whether Jefferson County
is eligible for Chapter 9, the bankruptcy judge will allow the
Alabama Supreme Court to decide whether sewer warrants are the
equivalent of "funding or refunding bonds" required under state
law before a municipality can be in bankruptcy.

U.S. District Judge Thomas B. Bennett ruled in March 2012 that
Jefferson County is eligible under state law to pursue a debt
restructuring under Chapter 9.  Holders of more than $3 billion in
defaulted sewer debt had challenged the county's right to be in
Chapter 9.


JERATH HOSPITALITY: Balloon Payments Allowed Under Bankruptcy Code
------------------------------------------------------------------
Jerath Hospitality, LLC's proposed chapter 11 plan amortizes the
Georgia Department of Revenue's claim over 48 monthly installments
with a lump sum payment due prior to the 60th month following the
petition date.  At the hearing, the parties stipulated that all
the requirements of confirmation have been met, except for a legal
determination of whether the "regular installment payments"
language of 11 U.S.C. Sec. 1129(a)(9)(C) requires payments at
uniform intervals in equal amounts, or whether balloon payments
are allowed.  At the hearing on Dec. 13, Bankruptcy Judge Susan D.
Barrett in Augusta, Ga., held that the Bankruptcy Code does not
prohibit balloon payments, and nothing in Sec. 1129 (a) (9)
requires the payments to be in equal monthly amounts.
Accordingly, the Court overruled the Georgia Department of
Revenue's objection and confirmed the Debtor's chapter 11 plan.

A copy of the Court's Dec. 18, 2012 Opinion and Order is available
at http://is.gd/KyMGY2from Leagle.com.

Jerath Hospitality, LLC, filed for Chapter 11 bankruptcy (Bankr.
S.D. Ga. Case No. 11-12314) in Augusta in 2011.


JOLIET CROSSINGS: Files for Chapter 11 in Chicago
-------------------------------------------------
Joliet Crossings 2010, LLC, filed a Chapter 11 petition (Bankr.
N.D. Ill. Case No. 12-49294) in Chicago, Illinois, on Dec. 17,
2012.

The Debtor disclosed assets of $17 million and total liabilities
of $15.9 million in schedules attached to the petition.  The
Debtor owns the property known as Tower Market Place in Illinois
Route 59 and Theodore Street, in Joliet, Illinois.

Washington Note Acquisition, LLC holds a 100% membership interest
in the Debtor.

The Debtor has tapped Weissberg & Associates, Ltd., as counsel.
The Debtor agreed to pay the firm an advanced payment fee in the
amount of $7,500.  The firm will bill on an hourly-basis at these
rates:

            Ariel WEissberg         $425 per hour
            Rakesh Khanna           $350 per hour
            John B. Wolf            $325 per hour

            Paralegal               $100 per hour


JOURNAL REGISTER: Delays Auction in Response to Objections
----------------------------------------------------------
Rachel Feintzeig at Dow Jones' DBR Small Cap reports that Journal
Register Co. has agreed to push back its auction date three weeks
in response to protests from Pension Benefit Guaranty Corp., which
took aim at the company's "rushed" efforts to sell its assets.
Journal Register Co.'s sale plans have elicited protests from
parties including the Pension Benefit Guaranty Corp., which said
it is taking aim at the company's "rushed" efforts to auction off
its assets.

Journal Register, with the advice of SSG Capital Advisors, LLC, as
financial advisor and investment banker, determined that the most
viable and cost-effective means of implementing a restructuring of
their operations and capital structure to maximize value for
creditors was through a going concern sale of substantially all of
their assets.

After extensive negotiations, the Debtors signed an asset purchase
agreement with 21st CMH Acquisition Co., an affiliate of funds
managed by Alden Global Capital LLC.

21st CMH has agreed to buy the assets in exchange for:

   i) a cash payment equal to the sum of (A) $1,750,000 (to be
used for postsale wind down expenses and as a pot for distribution
to general unsecured creditors) plus (B) cash sufficient to pay
off all Obligations of the Debtors to Wells Fargo Bank, N.A., as
lender under the debtor-in-possession facility and the Loan and
Security Agreement, dated as of Aug. 7, 2009;

  ii) a credit bid in the amount of $117,500,000 which will
include a release of the Debtors and any guarantors of
obligations, claims, rights, actions, causes of action, suits,
liabilities, damages, debts, costs, expenses and demands
whatsoever, in law or in equity arising under the prepetition loan
agreements, and a waiver of all the claims, up to the credit bid
amount;

iii) an amount equal to the severance pay and accrued paid time
off that is required to be paid to any of seller's employees who
are not offered employment with the purchaser pursuant to the
agreement; and

  iv) the assumption by the purchaser of the assumed liabilities.

The original bidding procedures proposed by Journal Register
contemplate a Jan. 18 deadline for bids, a Jan. 23 auction for the
assets and a sale hearing on Jan. 25.

                       About Journal Register

Journal Register Company -- http://www.JournalRegister.com/-- is
the publisher of the New Haven Register and other papers in 10
states, including Philadelphia, Detroit and Cleveland, and in
upstate New York.  The Company's more than 350 multi-platform
products reach an audience of 21 million people each month.  JRC
is managed by Digital First Media and is affiliated with MediaNews
Group, Inc., the nation's second largest newspaper company as
measured by circulation.

Journal Register, along with its affiliates, first filed for
Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No.
09-10769) on Feb. 21, 2009.  Attorneys at Willkie Farr & Gallagher
LLP, served as counsel to the Debtors.  Attorneys at Otterbourg,
Steindler, Houston & Rosen, P.C., represented the official
committee of unsecured creditors.  Journal Register emerged from
Chapter 11 protection under the terms of a pre-negotiated plan.

Journal Register returned to bankruptcy (Bankr. S.D.N.Y. Lead Case
No. 12-13774) on Sept. 5, 2012, to sell the business to 21st CMH
Acquisition Co., an affiliate of funds managed by Alden Global
Capital LLC.  The deal is subject to higher and better offers.
Journal Register expects to complete the auction and sale process
within 90 days.

Journal Register exited the 2009 restructuring with $225 million
in debt and with a legacy cost structure, which includes leases,
defined benefit pensions and other liabilities that have become
unsustainable and threatened the Company's efforts for a
successful digital transformation.  Journal Register managed to
reduce the debt by 28% with the Company servicing in excess of
$160 million of debt.

Alden Global is the holder of two terms loans totaling $152.3
million.  Alden Global acquired the stock and the term loans from
lenders in Journal Register's prior bankruptcy.

Journal Register disclosed total assets of $235 million and
liabilities totaling $268.6 million as of July 29, 2012.  This
includes $13.2 million owing on a revolving credit to Wells Fargo
Bank NA.

Bankruptcy Judge Stuart M. Bernstein presides over the 2012 case.
Neil E. Herman, Esq., Rachel Jaffe Mauceri, Esq., and Patrick D.
Fleming, Esq., at Morgan, Lewis & Bockius, LLP; and Michael R.
Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner,
Esq., at Young Conaway Stargatt & Taylor LLP, serve as the 2012
Debtors' counsel.  SSG Capital Advisors, LLC, serves as financial
advisors.  American Legal Claims Services LLC acts as claims
agent.  The petition was signed by William Higginson, executive
vice president of operations.

Otterbourg, Steindler, Houston & Rosen, P.C., represents Wells
Fargo.  Akin, Gump, Strauss, Hauer & Feld LLP, represents the
Debtors' Tranche A Lenders and Tranche B Lenders.  Emmet, Marvin &
Martin LLP, serves as counsel to Wells Fargo, in its capacity as
Tranche A Agent and the Tranche B Agent.

The Official Committee of Unsecured Creditors appointed in the
case has retained Lowenstein Sandler PC as counsel and FTI
Consulting, Inc. as financial advisor.


LEHMAN BROTHERS: Milbank, et al., Final Fee Applications Approved
-----------------------------------------------------------------
The U.S. Bankruptcy Court in Manhattan approved the applications
for final allowance of fees and reimbursement of expenses of these
bankruptcy professionals hired in connection with Lehman Brothers
Holdings Inc.'s Chapter 11 case:

   Professional              Period           Fees      Expenses
   ------------              ------         --------    --------
Bortstein Legal LLC        09/15/08 to   $4,171,275          $0
                            03/06/12

Bracewell & Giuliani LLP   09/15/08 to     $194,370      $4,122
                            03/06/12

Dechert LLP                09/15/08 to   $8,245,422    $154,199
                            03/06/12

Fried Frank Harris Shriver 09/15/08 to     $873,634     $35,476
  & Jacobson LLP            03/06/12

Gianni Origoni Grippo      09/15/08 to     $217,853     $12,761
  Cappelli & Partners       03/06/12

Hardinger & Tanenholz LLP  09/15/08 to   $1,211,383     $23,483
                            03/06/12

Kramer Levin Naftalis &    09/15/08 to     $199,857      $4,572
  Frankel LLP               03/06/12

Krebsbach & Snyder PC      09/15/08 to     $797,683     $14,752
                            03/06/12

Milbank Tweed Hadley &     09/15/08 to $140,430,022  $6,707,064
  McCloy LLP                03/06/12

MMOR Consulting Inc.       09/15/08 to   $1,051,407     $19,001
                            03/06/12

Momo-o Matsuo & Namba      09/15/08 to     $758,456     $11,711
                            03/06/12

Weil Gotshal & Manges LLP  09/15/08 to $421,578,556 $11,153,196
                            03/05/12

Meanwhile, the U.S. Trustee, a Justice Department agency that
oversees bankruptcy cases, filed court papers opposing Milbank
Tweed Hadley & McCloy's representation of the individual members
of the creditors committee who are asking for reimbursement of
their fees.

"It is a blatant conflict of interest for Milbank to both review
the fees on behalf of the committee and simultaneously seek
payment of those fees on behalf of the individual committee
members," the U.S. Trustee said, pointing out that the committee
and its counsel have a duty to all unsecured creditors and must
review those fees.

Pursuant to Lehman's Chapter 11 plan, the committee will continue
to exist to perform all functions related to the review of fees
incurred prior to the effective date of the plan.  The retention
of its counsel also continues in order for the counsel to assist
the committee.

                       About Lehman Brothers

Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States.  For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.

Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555).  Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history.  Several other affiliates followed
thereafter.

Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.

The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman.  Epiq
Bankruptcy Solutions serves as claims and noticing agent.

Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.

On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)).  James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.

The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion.  Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees.  Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.

Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history.  The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.

Lehman made its first payment of $22.5 billion to creditors in
April 2012 and a second payment of $10.2 billion on Oct. 1.  A
third distribution is set for around March 30, 2013.  The
brokerage is yet to make a first distribution to non-customers.

Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates.  (http://bankrupt.com/newsstand/or 215/945-700)


LEHMAN BROTHERS: U.S. Trustee Opposes Milbank's Dual Roles
----------------------------------------------------------
Tracy Davis Hope, the U.S. trustee for Region 2, objects to
Milbank Tweed Hadley & McCloy LLP's representation of both the
Official Committee of Unsecured Creditors of Lehman Brothers
Holdings Inc. and the individual committee members seeking legal
fees from the Debtors' bankruptcy case, arguing that the dual
representation poses a conflict of interest.

The U.S. Trustee asserts that, while seeking to review fee
applications, including those sought by the individual Committee
members, on one side of the table, Milbank will also be
representing the individual committee members seeking those fees
on the other side of the table.  This, the U.S. Trustee argues,
is clearly the representation of two adverse interests by
Milbank.

Accordingly, Milbank should be barred from acting as counsel to
the individual committee members, the U.S. Trustee further
argues.

"There are many law firms that the individual Committee members
could retain, none of which has a duty of loyalty to the
Committee.  Surely the Committee members can find a firm other
than Milbank, the firm charged with advising the Committee on
professional fees.  At the very least, Milbank's representation
of the individual Committee members gives an appearance of
impropriety which should be avoided at all costs," the U.S.
Trustee says in court papers.

The U.S. Trustee also objects to the payment by the Debtors'
post-confirmation estates of any fees associated with Milbank's
representation of the individual Committee members.  Those fees
should only be paid by the parties that benefitted from those
services, the individual committee members themselves, the U.S.
Trustee asserts.

In an Oct. 15 ruling, Judge Peck approved the payment of
$2,824,307 to the so-called ad hoc group of Lehman Brothers
creditors for the services provided by its advisers, AlixPartners
and Molinaro Advisors.  Judge Peck also ordered the payment of
$12,710,343 to another group of creditors which include Bank of
America N.A. and Deutsche Bank AG, and hedge funds Oaktree
Capital Management L.P. and Silver Point Finance LLC.  Blackstone
Advisory Partners L.P., the group's financial adviser, will get
$11.595 million from the total payment.

The U.S. Trustee also objected to the applications for fee
payment filed by these creditors but dropped those objections
following talks with the creditors to resolve its objections.

According to a court document, the application for payment of
fees was signed by the individual applicants' attorneys.
Milbank, however, filed a reply in mid-November to the U.S.
Trustee's objection and that reply was not signed by the
individual applicants' attorneys.

                       About Lehman Brothers

Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States.  For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.

Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555).  Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history.  Several other affiliates followed
thereafter.

Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.

The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman.  Epiq
Bankruptcy Solutions serves as claims and noticing agent.

Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.

On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)).  James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.

The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion.  Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees.  Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.

Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history.  The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.

Lehman made its first payment of $22.5 billion to creditors in
April 2012 and a second payment of $10.2 billion on Oct. 1.  A
third distribution is set for around March 30, 2013.  The
brokerage is yet to make a first distribution to non-customers.

Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates.  (http://bankrupt.com/newsstand/or 215/945-700)


LEVI STRAUSS: Names Harmit Singh as Chief Financial Officer
-----------------------------------------------------------
Levi Strauss & Co. announced that Harmit Singh will join the
Company as executive vice president and chief financial officer on
Jan. 16, 2013, reporting to company president and chief executive
officer Chip Bergh.  In this role, he will be responsible for the
Company's global information technology and finance functions,
including financial planning and analysis, accounting and
controls, tax, treasury, risk management, internal audit and
investor relations.

Mr. Singh brings almost 30 years of experience as a financial
leader within the hospitality, restaurant and travel industries.
Most recently, Mr. Singh was chief financial officer of Hyatt
Hotels Corporation, where he successfully led the financial
planning and operations for an organization with about 500 hotels
across 45 countries.  During his time at Hyatt, he played an
important role in establishing the global financial structure, led
the company through the IPO process, built a strong balance sheet
and drove growth by supporting capital deployment for acquisitions
and investments.

"Having led the financial and information technology operations
behind some of the largest restaurant and hotel companies, Harmit
has extensive experience in developing and implementing growth
strategies for companies that serve consumers around the globe,"
said Chip Bergh, president and chief executive officer of LS&Co.
"His combination of financial and operational expertise, global
experience and deep understanding of Asia will make him a strong
addition to our leadership team at Levi Strauss & Co."

In addition to his four years at Hyatt Hotels Corporation and
fourteen years of various global leadership roles at Yum! Brands,
the world's largest restaurant company, (including CFO of Pizza
Hut), Singh also worked at American Express India and Price
Waterhouse in India.

"Levi Strauss & Co. is admired around the world for its iconic
brands," said Mr. Singh.  "I am excited to be joining a company
with such a rich and established heritage.  I look forward to
working with leaders in the company and the finance and technology
group as we grow the brands globally and enhance value for all
stockholders."

The employment arrangement with Mr. Singh provides for a base
salary of $12,987 per week, approximately $675,000 per year.  Mr.
Singh is also eligible to participate in the Company's Annual
Incentive Program at a target participation rate of 80% of his
base salary which would result in a 2013 target value of $540,000
to be prorated based on his start date.  He will also receive a
one-time signing bonus of $250,000 which is subject to prorated
repayment if his employment with the Company does not exceed
twenty-four months under certain conditions.

Upon his arrival, Kevin Wilson, who has served as interim chief
financial officer since August 2012, will resume his role as vice
president, finance for the Americas Commercial Operations.

                     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: S&P Withdraws 'D' Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'D' corporate
credit rating on U.S.-based LifeCare Holdings Inc. at the
company's request. "At the same time, we withdrew our 'D' issue-
level rating and '6' recovery rating on LifeCare's subordinated
debt," S&P said.

"The withdrawal of the ratings follows the company's bankruptcy
filings under Chapter 11 in the U.S. Bankruptcy Court on Dec. 11,
2012," S&P said.


LICHTIN/WADE LLC: ERGS Fails in Bid to Reject AMG Claim
-------------------------------------------------------
ERGS II, L.L.C. succeeded in its request to exclude Aviation
Management Group, Inc. from voting on the plan of reorganization
of Lichtin/Wade, LLC, by virtue of its insider status.

But in the next round of the fight, ERGS failed to convince the
bankruptcy judge to reject AMG's claim.

On May 20, 2012, AMG acquired the claims of Caterpillar Financial
Services Corporation.  The Debtor's Schedule D lists two claims
held by Caterpillar Financial in the amounts of $2,622.24 and
$8,987.86.  The deadline to file a proof of claim as set by the
Court expired on June 13, 2012.  On June 28, 2012 AMG filed Proof
of Claim No. 19-1 in the amount of $11,601.10.  POC 19 states it
is based on a note/transfer of claim and the amount of secured
claim is $7,569.44 and is accruing interest at an annual rate of
8%.  The claims are based on two equipment leases of two back-up
generators located in each of the Debtor's two office building.
The Bankruptcy Court has previously ruled that the equipment
leases are in fact disguised security interests.

Class 3 of the Second Amended Plan is comprised of the claims of
AMG. The Debtor's Plan proposes to treat the claims as secured
claims amortized over 3 years with interest at 5%. Payments are to
begin on the 15th day of the first full month following the
Effective Date of the Plan. The Debtor asserts that this class is
impaired.  The Supplement to Disclosure Statement filed on Oct.
15, 2012, shows AMG will receive a total of $1,798.80 in 2013,
$1,798.80 in 2014 and $1,349.10 in 2015.

ERGS contends that the Court must disallow POC 19 as a matter of
law pursuant to 11 U.S.C. Sec. 502(b)(9) because AMG failed to
timely file the proof of claim.  The deadline to file a proof of
claim as set by the Court was June 13, 2012.  The Debtor responds
that 11 U.S.C. Sec. 503(b)(9) is not applicable as 11 U.S.C. Sec.
1111(a) governs proofs of claims in Chapter 11 cases, which
provides that a proof of claim or interest is deemed filed under
Section 501 of this title for any claim or interest that appears
in the schedules.

At the hearing on Nov. 15, 2012, ERGS and the Debtor stipulated
that if the AMG claims were allowed, the allowed amount should be
$236.

Judge Randy Doub agreed with the Debtor.  Because the claim was
listed on the schedules, AMG was not required to file a proof of
claim.  If the claim had not been listed on the Debtor's
schedules, or was listed as contingent, disputed, or unliquidated,
AMG would have been required to file a proof of claim.
Accordingly, the AMG claim is allowed for $236.

Prior to the date of filing, the Debtor and Branch Banking and
Trust Company entered into four promissory notes, secured by all
of the Debtor's real property, assignment of rents, and certain of
the Debtor's personal property. The four Secured Notes matured on
Dec. 15, 2011.  On March 27, 2012, BB&T entered into an agreement
with ERGS, whereby ERGS purchased from BB&T all of its rights,
title, and interests in and to the Secured Notes.  On May 2, ERGS
filed Proof of Claim No. 10 in the secured amount of $39,236,631
representing principal, interest, and fees.  On May 29, the Debtor
filed the Objection to Claim, objecting to ERGS's Proof of Claim.
On Aug. 8, the Court entered an order determining that ERGS's
claim was to be treated as a secured claim in the amount of
$38,390,000, and an unsecured claim in the amount of $673,661.  On
April 24, the Debtor and ERGS entered into a stipulation agreement
agreeing and stipulating that the real property owned by the
Debtor securing ERGS's claim shall be valued at $38,390,000.

A copy of the Court's Dec. 19, 2012 Order is available at
http://is.gd/8bJCbKfrom Leagle.com.

                         About Lichtin/Wade

Lichtin/Wade LLC filed for Chapter 11 bankruptcy (Bankr. E.D.N.C.
Case No. 12-00845) on Feb. 2, 2012.  Lichtin/Wade, based in Wake
County, North Carolina, owns and operates an office park known as
the Offices at Wade, comprised of two Class A office buildings and
vacant land approved for additional office buildings.  The
buildings are known as Wade I and Wade.  Each building is over 90%
leased, with only three vacant spaces remaining between the two
buildings.

Judge Randy D. Doub presides over the case.  Trawick H. Stubbs,
Jr., Esq., and Laurie B. Biggs, Esq., at Stubbs & Perdue, P.A.,
serve as the Debtor's counsel.

The Debtor disclosed $47,053,923 in assets and $52,548,565 in
liabilities as of the Petition Date.

The petition was signed by Harold S. Lichtin, president of Lichtin
Corporation, the Debtor's manager.


LICHTIN/WADE LLC: Aviation Management Declared as Insider
---------------------------------------------------------
At the behest of ERGS II, L.L.C., Bankruptcy Judge Randy Doub in
Raleigh, North Carolina, ruled that Aviation Management Group,
Inc. is an insider of Lichtin/Wade, LLC, pursuant to 11 U.S.C.
Sec. 1129(a)(10); and AMG's will not be recognized for purposes of
voting ono the Debtor's plan of reorganization.

ERGS contends that AMG purchased the claims of Caterpillar
Financial Services Corporation in bad faith at the direction of
Harold Lichtin, principal of the Debtor, for the purpose of
creating an artificially impaired class.

AMG acquired Caterpillar's claims on May 20, 2012.  On June 28,
AMG filed Proof of Claim No. 19-1 for $11,601.  The claim states
it is based on a note/transfer of claim and the amount of secured
claim is $7,569.44 and is accruing interest at an annual rate of
8%.  The claim is based on two equipment leases of two back-up
generators located in each of the Debtor's two office building.
The Court has previously ruled that the equipment leases are in
fact disguised security interests.

Class 3 of the Debtor's Second Amended Plan is comprised of AMG's
claims.  The Debtor's Plan proposes to treat the claims as secured
claims amortized over three years with interest at 5%.  Payments
are to begin on the 15th day of the first full month following the
Effective Date of the Plan.  The Debtor asserts that this class is
impaired.  The Supplement to Disclosure Statement filed on Oct.
15, 2012, shows AMG will receive a total of $1,798.80 in 2013,
$1,798.80 in 2014 and $1,349.10 in 2015.

The Debtor argues that AMG is not an alter ego of the Debtor, nor
is it in any way controlled by the Debtor.  Further the Debtor
responds that the Debtor's and AMG's actions do not give rise to
the kind of bad faith contemplated by 11 U.S.C. Sec. 1126(e).

AMG provides management and consulting expertise for the operation
of private aircraft owned by individuals and companies.  AMG
provides services to Lichtin Corporation, the manager of the
Debtor, which is solely owned and controlled by Harold S. Lichtin.
Mr. Lichtin owns an aircraft and AMG has provided services to Mr.
Lichtin since 1998.  Lichtin Corp. is billed annually in the
approximate amount of $400,000 for AMG's services.

AMG also provides support services for the aircraft, including
maintenance services, cleaning services and scheduling services
for Mr. Lichtin's trips.  Within the last 18 months, Lichtin Corp.
has not paid AMG on a timely basis and currently owes AMG
$200,000.  AMG, however, continues to provide services to Lichtin
Corp.

The Court noted that AMG has never purchased a claim in a
bankruptcy proceeding prior to purchasing the Caterpillar claims
in the Debtor's case.  On July 10, 2012, ERGS deposed William
Graef, the president of AMG.  Mr. Graef testified that:

     -- Mr. Lichtin called him regarding the Caterpillar claims in
early May of 2012.  Mr. Lichtin inquired as to whether Mr. Graef
would be willing to purchase the Caterpillar claims.

     -- he understood that if he purchased the claims, AMG would
have the opportunity to cast a vote in favor of the Plan.

     -- AMG purchased the claims one day prior to the ballot due
date so that AMG as a secured creditor could cast a vote in favor
of the plan.

     -- he did not have any hesitation in purchasing the claims
because Mr. Lichtin was a friend.  Mr. Graef did not review any
documents, leases or bankruptcy filings prior to deciding to
purchase the Caterpillar claims.

     -- he cast a ballot accepting the Chapter 11 Plan without
ever reading the terms of the plan because he had confidence in
Mr. Lichtin as a businessman.  Mr. Graeff was not aware that the
plan proposed to stretch out the debt owed to Caterpillar and pay
it over five years at $200 per month.

     -- he did not have a business justification for purchasing
the Caterpillar claims but was doing this strictly to help Mr.
Lichtin.

     -- AMG has roughly 120 clients and that Lichtin Corporation
is one its top 15 larger clients.

ERGS contends that AMG is a nonstatutory insider based on Mr.
Graef's personal relationship with Mr. Lichtin developed over a
14-year business relationship.

The Court agrees, and finds that AMG is a nonstatutory insider.

Prior to the date of filing, the Debtor and Branch Banking and
Trust Company entered into four promissory notes, secured by all
of the Debtor's real property, assignment of rents, and certain of
the Debtor's personal property.  The four Secured Notes matured on
Dec. 15, 2011.

On March 27, 2012, BB&T entered into an agreement with ERGS,
whereby ERGS purchased from BB&T all of its rights, title, and
interests in and to the Secured Notes.  On May 2, ERGS filed Proof
of Claim No.10 in the secured amount of $39,236,631 representing
principal, interest, and fees.  On May 29, the Debtor objected to
the claim.  On Aug. 8, the Court entered an order determining that
ERGS's claim was to be treated as a secured claim in the amount of
$38,390,000, and an unsecured claim in the amount of $673,661.

On April 24, 2012, the Debtor and ERGS entered into a stipulation
agreement agreeing and stipulating that the real property owned by
the Debtor securing ERGS's claim will be valued at $38,390,000.

A copy of the Court's Dec. 18, 2012 Order is available at
http://is.gd/eV642sfrom Leagle.com.

                         About Lichtin/Wade

Lichtin/Wade LLC filed for Chapter 11 bankruptcy (Bankr. E.D.N.C.
Case No. 12-00845) on Feb. 2, 2012.  Lichtin/Wade, based in Wake
County, North Carolina, owns and operates an office park known as
the Offices at Wade, comprised of two Class A office buildings and
vacant land approved for additional office buildings.  The
buildings are known as Wade I and Wade.  Each building is over 90%
leased, with only three vacant spaces remaining between the two
buildings.

Judge Randy D. Doub presides over the case.  Trawick H. Stubbs,
Jr., Esq., and Laurie B. Biggs, Esq., at Stubbs & Perdue, P.A.,
serve as the Debtor's counsel.

The Debtor disclosed $47,053,923 in assets and $52,548,565 in
liabilities as of the Petition Date.

The petition was signed by Harold S. Lichtin, president of Lichtin
Corporation, the Debtor's manager.


MAMMOTH LAKES, CA: S&P Hikes COPs Rating to 'BB+'
-------------------------------------------------
Standard & Poor's Ratings Services raised its rating on the Town
of Mammoth Lakes, Calif.'s certificates of participation (COPs) to
'BB+' from 'C'.  The outlook is stable.

"We base the upgrade on our view of a recent negotiated settlement
between the town and its largest creditor, Mammoth Lakes Land
Acquisition, as well as the town's successful November 2012
withdrawal of its petition for bankruptcy," said Standard & Poor's
credit analyst Sussan Corson.

"This bankruptcy filing was withdrawn before the bankruptcy court
found the town eligible for bankruptcy. In our opinion, while
Mammoth Lakes submitted a petition for Chapter 9 in July 2012, its
immediate withdrawal of the petition and the town council's
recently adopted multi-year budget restructuring plan to
accommodate the settlement payments somewhat mitigate our concern
about the town's future willingness to pay debt service. The
sizable budget adjustments necessary to accommodate the annual
settlement payments, however, pressure Mammoth Lakes' financial
flexibility in our view," S&P said.

"In the spring of 2012, Mammoth Lakes entered into a mediated
neutral evaluation process with its creditors under California
Government Code section 53760.3 (AB 506). This was a preliminary
step required by recent state law for municipalities considering
bankruptcy. While the town sought concessions from its employees
and other creditors, we understand it submitted a bankruptcy
petition in July 2012 after Mammoth Lakes Land Acquisition (MLLA)
did not attend the AB 506 mediation discussions," S&P said.

"In a subsequent settlement agreement with MLLA in September 2012,
Mammoth Lakes agreed to pay to MLLA $2.5 million in the current
fiscal year and $2.0 million annually beginning in fiscal 2014, or
11% of fiscal 2014 projected general fund expenditures, over a
period of 23 years," S&P said.

"Mammoth Lakes is 250 miles east of San Francisco in Mono County
in the eastern Sierra Nevada Mountains at an elevation of 7,000
feet; it is generally known for its very large and popular Mammoth
Mountain Ski Resort, which dominates the local economy," S&P said.

"We base the stable outlook on our view of Mammoth Lakes'
restructuring plan, which we believe would accommodate an ongoing
$2 million annual settlement payment while maintaining thin-but-
adequate budgetary reserves in the next five years, although it
incorporates large cuts to public safety expenses and relies on
one-time revenue in the near term. Should the town implement
budget adjustments as planned to approach structural budgetary
balance including the settlement payment, we could raise the
rating in the next year. The town's failure to maintain adequate
general fund reserves on a GAAP basis as it absorbs the additional
settlement costs into the budget and manages potential
fluctuations in general fund revenue could lead to a downgrade,"
S&P said.


MARKETING WORLDWIDE: Asher Enterprises Holds 9.9% Equity Stake
--------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Asher Enterprises, Inc., disclosed that, as of
Dec. 12, 2012, it beneficially owns 29,034,960 shares of common
stock of Marketing Worldwide Corp. representing 9.99% of the
shares outstanding.  A copy of the filing is available at:

                        http://is.gd/DNfbNS

                     About Marketing Worldwide

Based in Howell, Michigan, Marketing Worldwide Corporation
operates through the holding company structure and conducts its
business operations through its wholly owned subsidiaries
Colortek, Inc., and Marketing Worldwide, LLC.

Marketing Worldwide, LLC, is a complete design, manufacturer and
fulfillment business providing accessories for the customization
of vehicles and delivers its products to large global automobile
manufacturers and certain Vehicle Processing Centers primarily in
North America.  MWW operates in a 23,000 square foot leased
building in Howell Michigan.

Colortek, Inc., is a Class A Original Equipment painting facility
and operates in a 46,000 square foot owned building in Baroda,
which is in South Western Michigan.  MWW invested approximately
$2 million into this paint facility and expects the majority of
its future growth to come from this business.

The Company reported a net loss of $2.27 million for the year
ended Sept. 30, 2011, compared with a net loss of $2.34 million
during the prior year.

The Company's balance sheet at June 30, 2012, showed $1.14 million
in total assets, $11.94 million in total liabilities and a $10.80
million total deficiency.

After auditing the financial statements for the year ended
Dec. 31, 2011, RBSM LLP, in New York, expressed substantial doubt
about the Company's ability to continue as a going concern
following the Company's 2011 financing results.  The independent
auditors noted that the Company has generated negative cash flows
from operating activities, experienced recurring net operating
losses, is in default of loan certain covenants, and is dependent
on securing additional equity and debt financing to support its
business efforts.


METALDYNE LLC: American Securities Completes $800MM Acquisition
---------------------------------------------------------------
Metaldyne LLC on Dec. 19 said it has been acquired by private
equity firm American Securities LLC in a transaction that includes
all of Metaldyne's global operations.  Financial terms of the
transaction were not disclosed.

Reuters' Greg Roumeliotis reports that the deal is valued at about
$820 million.  Reuters reported in September that American
Securities was in the lead to buy Metaldyne for over $800 million
from Carlyle.

People familiar with the matter previously told Reuters that
American Securities beat competition from Linamar Corp, Canada's
second-largest auto supplier, to acquire Metaldyne.

American Securities has more than $8 billion under management.

Metaldyne, which is headquartered in Plymouth, Michigan, has over
$1 billion in revenue and is well positioned to serve its global
customers with 4,000 employees at its 25 facilities located in 13
countries throughout North America, Europe, Latin America, and
Asia.

"We are proud of our commitment to operational excellence,
differentiating technology, and continuous improvement," said
Thomas Amato, president and CEO of Metaldyne.  "We look forward to
partnering with American Securities to accelerate the growth of
our company and to continue our global collaboration with our
customers."

American Securities closed its sixth fund in June 2012 with
approximately $3.6 billion of committed capital. American
Securities' other investments in the automotive sector include HHI
Group Holdings, a manufacturer of forged components, hub unit
bearings, and engine timing systems, and GT Technologies, a
manufacturer of valvetrain components.

"Our acquisition of Metaldyne is another example of American
Securities' strategy of investing in market-leading companies,"
said Kevin S. Penn, managing director at American Securities.  "We
are excited to make an investment in Metaldyne because the company
has an exceptional management team and a solid growth trajectory.
We anticipate continued growth for the auto industry as it
recovers globally, and Metaldyne is well positioned to take
advantage of that opportunity."

American Securities purchased Metaldyne from an investment group
led by Carlyle Strategic Partners, which owned Metaldyne since
October of 2009.

Reuters noted that Carlyle Strategic Partners in December 2011
announced the sale of another auto parts supplier it had picked up
from bankruptcy, Diversified Machine Inc.  This was also sold to a
private equity firm, Platinum Equity.

Reuters also noted that American Securities in October acquired
HHI Group Holdings, which makes forged parts, wheel bearings and
powdered metal engine and transmission components for the
automotive and industrial sectors, from KPS Capital Partners.
American Securities has no plans to merge HHI with Metaldyne, the
report said.

Reuters reports Bank of America Merrill Lynch and Kirkland & Ellis
LLP advised Metaldyne, while Nomura Securities and Weil, Gotshal &
Manges LLP were advisors to American Securities on the deal.

                          About Metaldyne

Metaldyne LLC -- http://www.metaldyne.com/-- is a leading global
manufacturer of engineered metal-based components for engine,
transmission, and driveline applications in the automotive and
light truck markets.  Products include powder metal engine
connecting rods, engine bearing caps, engine cylinder oil jets,
transmission sub assemblies, forged differential gears and
pinions, differential assemblies, engine balance shaft modules,
transmission shafts, and engine crankshaft dampers.  Metaldyne has
over $1 billion in annual revenue, with 25 locations in 13
countries.

Metaldyne Corp. and its affiliates filed for Chapter 11 protection
on May 27, 2009 (Bankr. S.D.N.Y. Case No. 09-13412).  The filing
did not include the company's non-U.S. entities or operations.  As
of March 29, 2009, the Company, utilizing book values, listed
assets of US$977 million and liabilities of $927 million.

Richard H. Engman, Esq., at Jones Day, represented the Debtors in
their restructuring.  Judy A. O'Neill, Esq., at Foley & Lardner
LLP served as conflicts counsel; Lazard Freres & Co. LLC and
AlixPartners LLP as financial advisors; and BMC Group Inc. as
claims agent.  A committee of Metaldyne creditors was represented
by Mark D. Silverschotz, Esq., and Kurt F. Gwynne, Esq., at Reed
Smith LLP, and the committee tapped Huron Consulting Services,
LLC, as its financial advisor.

Judge Martin Glenn approved the sale of substantially all assets
to Carlyle Group in November 2009 for roughly $496.5 million, and
confirmed the Debtors' liquidating chapter 11 plan on Feb. 23,
2010.  Under the terms of the confirmed liquidation plan, Oldco M
Distribution Trust is the post-confirmation entity charged with
prosecuting all claim objections and distributing all plan assets
pursuant to the terms of the plan.  The Trust is represented by
Kimberly E.C. Lawson, Esq., at Reed Smith LLP, in Wilmington, Del.


MF GLOBAL: SIPA Trustee in Dispute Over Letters of Credit
---------------------------------------------------------
Dan Strumpf, writing for Dow Jones' Newswires, reports that the
federal district court in Manhattan was scheduled to hear
Wednesday a dispute between the SIPA trustee liquidating MF
Global's brokerage unit and ConocoPhillips.  At issue is whether
letters of credit should be treated the same as other types of
collateral in a brokerage liquidation.

The SIPA trustee insists they should be, arguing that Commodity
Futures Trading Commission rules are on his side.

Issued by banks, letters of credit essentially act as guarantees
so that a customer doesn't have to put up cash or other assets.
The letters could be drawn upon if the customer defaults on a
trade.  They were useful for the customers because they freed up
cash that would otherwise sit around as collateral.

The report notes thousands of former MF Global Holdings Ltd.
customers still don't have a chunk of their money more than a year
after the brokerage firm's collapse, but some of the big clients
largely avoided similar losses, thanks to arrangements struck with
the firm before its demise.

The report says nine customers, including two units of Houston-
based ConocoPhillips and the energy-trading arm of Koch
Industries, based in Wichita, Kan., had agreements to back
millions of dollars in trades with so-called letters of credit.

According to the report, James Giddens, the SIPA Trustee, said the
letters of credit have created imbalances.

The report notes the big clients and the trustee are now battling
in court against a trustee who says they owe him funds.  The
report says the fight casts a spotlight on the privileges these
and a small number of other customers secured from MF Global and
raises the question whether these arrangements should continue
after bankruptcy.

Mr. Giddens has so far returned 80% of assets to customers with
U.S.-based accounts and 5% to customers with overseas accounts.

The report notes that, for the customers with letters of credit,
the situation has been different.  Because some of their trades
were backed by a guarantee instead of actual assets, their losses
were smaller than they would have been if they had put up cash,
the trustee says.  Mr. Giddens argues this has created an unfair
situation, where these customers haven't fully contributed to the
pool of assets he is able to distribute back to the customer base.

The report also relates ConocoPhillips has countered in court
papers that since it never defaulted on its trades, the trustee
cannot draw upon the letters.  "Neither MF Global nor the Trustee
. . . has ever declared default on the part of ConocoPhillips,"
according to a filing by Conoco's attorneys.  As a result, the
Trustee has had no legal authority to present the letters of
credit for payment."

According to Dow Jones, at issue for ConocoPhillips are six
letters of credit valued at $205 million posted to a combination
of domestic and foreign accounts and issued by banks based in
Italy, Sweden and the U.K.

Koch and the trustee are engaged in separate litigation on the
issue.  According to the report, for Koch, at stake is a $20
million letter of credit issued by a unit of J.P. Morgan Chase &
Co. and posted to a foreign account.  In court filings, Koch also
says it never defaulted on its trades, meaning the trustee can't
claim the letter as customer property. It also added that the
letter expired at the end of last year.

According to the report, if the trustee prevails, the companies
would have to pay additional funds.  ConocoPhillips could owe $58
million to the trustee, according to a calculation based on
figures filed in court by ConocoPhillips, though the company could
be owed money if it prevails.

The report also notes the other customers with letters of credit
have reached agreements with the trustee, a spokesman for Mr.
Giddens said.  Only one agreement has been disclosed in court
records.  It involved GFX Corp., a subsidiary of CME Group Inc.

                          About MF Global

New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
is one of the world's leading brokers of commodities and listed
derivatives.  MF Global provides access to more than 70 exchanges
around the world.  The firm is also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York.  MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.

MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed.  As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities.  It is easily the largest bankruptcy filing so far
this year.

Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel.  The Garden City Group, Inc., serves as
claims and noticing agent.  The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.

The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers.  James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act.  He is a partner at Hughes
Hubbard & Reed LLP in New York.

Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.

U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.

Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or  215/945-7000 )


MF GLOBAL: $46 Million in Professional Fees Unpaid
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that professionals liquidating MF Global Holdings Ltd.
have run up almost $46 million in fees that can't be paid,
according to the latest operating report filed with the U.S.
Bankruptcy Court in New York.  MF Global Holdings is the parent of
the liquidating commodity broker with a $1.6 billion shortfall in
customers' property.

According to the report, through the end of November, Louis Freeh
and professionals serving him as Chapter 11 trustee for the MF
Global holding company together have accrued $32.7 million in fees
since the bankruptcy began at the end of October 2011.

Professionals for the official creditors' committee billed another
$13.3 million that can't be paid for lack of cash.

Mr. Freeh's principal lawyers are Morrison & Forester LLP, and his
financial advisers are FTI Consulting Inc.

To pay expenses of liquidation other than professional fees, Mr.
Freeh has been using cash representing collateral for the claim of
secured lender JPMorgan Chase & Co.  Originally $25.3 million,
cash had been reduced to $14.1 million when November drew to a
close.

The cash outflow at the holding company was $610,500 in November,
according to the operating report. The month's loss from
operations was $845,000.

                          About MF Global

New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
is one of the world's leading brokers of commodities and listed
derivatives.  MF Global provides access to more than 70 exchanges
around the world.  The firm is also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York.  MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.

MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed.  As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities.  It is easily the largest bankruptcy filing so far
this year.

Judge Martin Glenn presides over the Chapter 11 case.  J. Gregory
Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq.,
at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy
counsel.  The Garden City Group, Inc., serves as claims and
noticing agent.  The petition was signed by Bradley I. Abelow,
Executive Vice President and Chief Executive Officer of MF Global
Finance USA Inc.

The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers.  James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act.  He is a partner at Hughes
Hubbard & Reed LLP in New York.

Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.

U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.

Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


MTS LAND: Amends List of 20 Largest Unsecured Creditors
-------------------------------------------------------
MTS Land LLC has submitted to the Bankruptcy Court a new list of
top largest unsecured creditors.


        Entity                Nature of Claim         Claim Amount
        ------                ---------------         ------------
Access Telecom L.C.           IT                            $2,612

Arcadia Studio                landscape architecture        $7,699

Arizona Machinery             equiptment parts                $883

Chubb Group of Insurance      insurance claim             $139,588

CIT Technology Fin Service    copy machines                 $3,087

Elliot D. Pollack & Co.       physical impact analysis      $2,250

Maricopa County               Maricopa county environment   $1,030

Audelos Landscaping           landscaping                  $10,290

Regeneration Pacific Corp.    claim of Kenneth Kavanaugh    $2,000
                              Golf Course design for
                              Golf course design services
                              provided to the Debtor
                              pre-petition. Regeneration
                              Pacific Corp. purchased
                              this claim.

Regeneration Pacific Corp.    claim of Forrest Richardson   $3,287
                              Assoc. for providing golf
                              course architecture consulting
                              services to the Debtor
                              prepetition.
                              Regeneration Pacific Corp.
                              Purchased this claim.


Regeneration Pacific Corp.    claim of Wilbur- Ellis Co.    $3,159
                              for fertilizers delivered
                              to the Debtor pre-petition.
                              Regeneration Pacific Corp.
                              Purchased this claim.


Regeneration Pacific Corp.    claim of Oz Architecture     $59,591
                              for architecture services
                              rendered to the Debtor
                              pre-petition.
                              Regeneration Pacific Corp.
                              Purchased this claim.


Regeneration Pacific Corp.    claim of in celebration      $33,355
                              of golf for costs, leases
                              insurance, and management
                              services provided to the
                              Debtor prepetition, Rege
                              nation Pacific Corp.

Regeneration Pacific Corp.    claim of Fleet-Fisher        $15,328
                              Engenering Inc. for
                              engineering services
                              provided to the Debtor
                              pre-petition. Regeneration
                              Pacific Corp. purchased
                              this claim.

Regeneration Pacific Corp.    claim of Cullum Homes,       $15,328
                              Inc. for costs & services
                              requested pre-petition by
                              the Debtor. Regeneration
                              Pacific Corp. purchased
                              this claim.

RLH Associates, LLC           Home builders                 $3,703

Shamrock                      Food inventory                $2,310

State of Arizona              Transaction Privilege       $117,890
                              Taxes

Thomas P. Cox Architects      Architecture                  $8,322

Xerox Corporation             Copy machines                 $4,133

                          About MTS Land

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 by Steven D. Jerome, Esq., and
Evans O'Brien, Esq., at Snell & Wilmer L.L.P.

The U.S. Trustee for Region 14 advised the Court that an official
committee of unsecured creditors has not been appointed because an
insufficient number of persons holding unsecured claims against
the Debtors have expressed interest in serving on a committee.
The U.S. Trustee reserves the right to appoint a committee if
interest develop among the creditors.


MORGAN'S FOODS: JCP Investment Discloses 15.8% Equity Stake
-----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, JCP Investment Partnership, LP, and its
affiliates disclosed that, as of Dec. 10, 2012, they beneficially
own 462,858 shares of common stock of Morgan's Foods, Inc.,
representing 15.8% of the shares outstanding.  JCP Investment
previously reported beneficial ownership of 451,496 common shares
or a 15.4% equity stake as of July 26, 2012.  A copy of the
amended filing is available for free at http://is.gd/KQVZNh

                       About Morgan's Foods

Cleveland, Ohio-based Morgan's Foods, Inc., which was formed in
1925, operates through wholly-owned subsidiaries KFC restaurants
under franchises from KFC Corporation, Taco Bell restaurants under
franchises from Taco Bell Corporation, Pizza Hut Express
restaurants under licenses from Pizza Hut Corporation and an A&W
restaurant under a license from A&W Restaurants, Inc.

As of May 20, 2011, the Company operates 56 KFC restaurants,
5 Taco Bell restaurants, 10 KFC/Taco Bell "2n1's" under franchises
from KFC Corporation and franchises from Taco Bell Corporation,
3 Taco Bell/Pizza Hut Express "2n1's" under franchises from Taco
Bell Corporation and licenses from Pizza Hut Corporation,
1 KFC/Pizza Hut Express "2n1" under a franchise from KFC
Corporation and a license from Pizza Hut Corporation and 1 KFC/A&W
"2n1" operated under a franchise from KFC Corporation and a
license from A&W Restaurants, Inc.

The Company reported a net loss of $1.68 million for the year
ended Feb. 26, 2012, compared with a net loss of $988,000 for the
year ended Feb. 27, 2011.

The Company's balance sheet at Aug. 12, 2012, showed
$52.67 million in total assets, $53.47 million in total
liabilities, and a $800,000 total shareholders' deficit.


NATIONWIDE MUTUAL: Fitch Holds 'BB+' Preferred Securities Rating
----------------------------------------------------------------
Fitch Ratings has affirmed the Insurer Financial Strength (IFS)
ratings of Nationwide Mutual Insurance Company (NMIC) and its
related intercompany pool members (collectively, Nationwide
Mutual), as well as Nationwide Life Insurance Company (NLIC), at
'A'.  In addition, Fitch has affirmed the ratings on NMIC's
outstanding surplus notes at 'BBB'.

Fitch has also affirmed the following ratings of Nationwide
Financial Services, Inc. (NFS):

  -- Issuer Default Rating (IDR) at 'BBB+';
  -- Senior unsecured notes at 'BBB';
  -- Trust preferred securities at 'BB+'.

The Rating Outlook is Stable for all ratings. (A full rating list
follows at the end of this press release).

The rating affirmation reflects Nationwide Mutual's strong
competitive position in personal lines insurance, and a more
moderate position in commercial lines insurance, which was
enhanced by the merger with Harleysville Mutual Insurance Company
(Harleysville) in 2012.

The affirmation also reflects business diversification benefits
provided by Nationwide Mutual's wholly owned Financial Services
segment (NFS), which offers a variety of individual protection and
asset accumulation products, as well as group products and
services.  Fitch notes however, that NFS has relatively high
exposure to variable annuity products and mortgage-related
investments.

The property and casualty (P/C) segment reported a GAAP net
operating income of $208 million for the first nine months of
2012, compared with a loss of $221 million for the same period in
2011.  NFS segment results declined 16% to $470 million for the
first nine months of 2012, after increasing almost 40% for the
full year 2011 relative to 2010.

Nationwide Mutual's statutory combined ratio (including
Harleysville) improved to 105.7% for the first nine months of
2012, from 112.6% for the same period in 2011 (excluding
Harleysville).  Fitch believes the company's losses related to
Superstorm Sandy will not be outsized relative to their industry
market share and will be an earnings, not a capital, event for the
company.  The company paid a record $2.3 billion in weather-
related claims in 2011, nearly $1 billion more than in 2010.

Statutory surplus increased 7% to $13.7 billion at Sept. 30, 2012,
from $12.8 billion at Dec. 31, 2011, primarily due to the merger
with Harleysville.  Still, Fitch views Nationwide Mutual's
capitalization as worse than most peer companies.  Specifically,
the quality of capital is diminished by a high percentage of
surplus notes in the capital structure, and unstacked operating
leverage (excluding the carrying value of the life company)
estimated at 1.59 times (x) at Sept. 30, 2012 is higher than
average.

Fitch considers Nationwide Mutual's financial leverage to be high
relative to its mutual peers. Fitch estimates that consolidated
debt-to-capital, including short-term debt and operating debt,
declined somewhat from 24.9% at year-end 2011. This was due to the
repayment of a $300 million debt maturity in July as well as the
17% increase in policyholders' equity to $19 billion at Sept. 30,
2012 (including an undisclosed increase from the Harleysville
acquisition as well as FAS 115 unrealized bond gains).

At Sept. 30, 2012, long-term debt totaled $4.5 billion, down $471
million from year-end 2011 (including $2.2 billion in surplus
notes supporting the P/C operations and $2.3 billion in debt
primarily supporting the life insurance operations). The company's
short-term debt levels have periodically also been sizable, but
are undisclosed at interim periods.

Key rating triggers for Nationwide's ratings that could lead to a
downgrade include: ongoing poor underwriting profitability that
widens from recent performance relative to both mutual company and
industry averages; significant deterioration in operating earnings
generated by the life and annuity business; weakness in capital
strength as measured by Fitch's capital model, NAIC risk-based
capital or unstacked operating leverage greater than 1.75x; and/or
consolidated debt-to-capital, including short-term debt and
operating debt, of greater than 30%.

Key rating triggers that could lead to an upgrade over the longer
term include: a sustained improvement in underwriting performance
as measured by a combined ratio under 100% that is nearer to or
better than peers; improved catastrophe and overall risk
management through difficult underwriting and economic conditions;
an improvement in capital strength as measured by Fitch's capital
model or unstacked operating leverage below 1.0x; a material
reduction in the consolidated debt-to-capital ratio to below 20%;
and a significant reduction in the degree to which NFS's earnings
are leveraged to the equity market.

Fitch has affirmed the following ratings with a Stable Outlook:

Nationwide Mutual Insurance Co.

  -- IDR at 'A-';
  -- 8.25% surplus notes due Dec. 1, 2031 at 'BBB';
  -- 7.875% surplus notes due April 1, 2033 at 'BBB';
  -- 6.60% surplus notes due April 15, 2034 at 'BBB';
  -- 5.81% surplus notes due Dec. 15, 2024 at 'BBB';
  -- 9.375% surplus notes due Aug. 15, 2039 at 'BBB'.

Nationwide Financial Services Inc.

  -- IDR at 'BBB+';
  -- 5.625% Senior notes due Feb. 13, 2015 at 'BBB';
  -- 5.10% Senior notes due Oct. 1, 2015 at 'BBB';
  -- 5.375% Senior notes due March 25, 2021 at 'BBB';
  -- 7.899% Trust preferred due March 1, 2037 at 'BB+'.

Nationwide Mutual Insurance Co.
Nationwide Mutual Fire Insurance Co.
Crestbrook Insurance Co.
National Casualty Co.
Nationwide Agribusiness Insurance Co.
Nationwide Insurance Company of America
Scottsdale Insurance Co.
Farmland Mutual Insurance Co.
Colonial County Mutual Insurance Company
Nationwide Assurance Company
Nationwide General Insurance Company
Nationwide Lloyds
Nationwide Property & Casualty Insurance Company
Titan Indemnity Company
Titan Insurance Company
Victoria Automobile Insurance Company
Victoria Fire & Casualty Company
Victoria Select Insurance Company
Victoria Specialty insurance Company
Scottsdale Indemnity Company
Scottsdale Surplus Lines Insurance Company
Western Heritage Insurance Company
Allied Property & Casualty Insurance Company
AMCO Insurance Company
Depositors Insurance Company
Nationwide Affinity Company

  -- IFS at 'A'.

Nationwide Life Insurance Co.

  -- IFS at 'A';
  -- Short-term IDR at 'F1';
  -- Short-term IFS at 'F1';
  -- Commercial paper at 'F1'.

Nationwide Life Global Funding I

  -- Program rating at 'A'.


NAVISTAR INT'L: Moody's Cuts CFR/PDR to 'B3'; Outlook Stable
------------------------------------------------------------
Moody's Investors Service lowered the long-term ratings of
Navistar International Corporation -- Corporate Family Rating
(CFR), Probability of Default Rating (PDR) and senior unsecured
debt rating -- to B3 from B2, and senior secured to Ba3 from Ba2.
The company's Speculative Grade Liquidity is unchanged at SGL-3.
The outlook is stable.

Ratings Rationale

The downgrade of Navistar's rating reflects the continuing
challenges the company faces in re-establishing its competitive
position and profitability in the North American medium and heavy
truck markets. These challenges are illustrated by the company's
need to increase warranty reserves by $149 million during the
fourth quarter of the fiscal year ending October 2012. This most
recent increase in warranty accruals follows a previous increase
of $255 million during the first three quarters of 2012, bringing
the full-year accrual total to $404 million. Navistar must also
contend with the softening North American truck demand, the
process of transitioning to SCR emission technology during the
next twelve months, and the impact that defense spending cut backs
will have on its military business.

Notwithstanding theses challenges Moody's recognizes that Navistar
maintains a high level of customer loyalty among many truck
purchasers, it has a sound dealer network and the company's
strategy for strengthening the competitiveness of its trucks and
engines is viable. In addition, despite the softening near-term
outlook for North American truck sales, there is considerable
pent-up demand. The age of the US trucking fleet stands at near-
record levels, and trucking firms have been deferring purchases
due to uncertainty over the outlook for the US economy.
Consequently, Moody's expects that industry sales will rebound
strongly -- possibly during the second half of 2013 or early 2014.

As a result of the fundament strength of Navistar's truck
franchise and the likelihood that it will be able to fully
participate in the sector's eventual rebound, the company was able
to raise $1 billion through a secured term loan in August and $215
million through a public offering of common stock. These
transactions afford the company with considerable liquidity, with
year-end October 31 cash position of $1.5 billion. The company
anticipates that this robust liquidity position will enable it to
fund the cash requirements it will incur until demand recovers.
These requirements will include: the expenditures associated with
higher warranty expenses; costs associated with transitioning to
SCR emission technology; operating losses that will be incurred
until demand recovers; and large seasonal working capital
requirements.

Navistar's operating performance and key credit metrics for the
last twelve months through July 2012 (reflecting Moody's standard
adjustments) remain very weak and also contribute to the rating
downgrade. These metrics include: EBITA margin --negative 0.7%;
EBIT/interest -- negative 0.4x; and, debt/EBITDA -- 19x.

The stable outlook reflects Moody's view that Navistar's operating
and financial plan - relying on a large cash position to bridge
the period until truck demand recovers - is viable. Moody's
believes the company has adequate liquidity to implement its
operating plan and adequately fund the cash requirements that will
be incurred until the truck market rebounds. Nevertheless, credit
metrics will remain very weak through 2014 and will be consistent
with the B3 rating level.

Prior to fiscal 2011 Navistar had a $2 billion deferred tax
valuation allowance. This allowance was reversed during 2011
(thereby significantly boosting reported net income) due the
company's improving earnings prospects. As a result of the
unexpected increase in warranty accruals during the fourth quarter
of fiscal 2012, Navistar has reestablished this deferred tax
allowance (thereby significantly lowering reported net income).
Both of these actions - the 2011 reversal of the accrual allowance
nor the 2012 reestablishment of the allowance -- are non-cash
items that do not impact key credit metrics and will not result in
any covenant violations. Nevertheless, the reversal and subsequent
reestablishment of the allowance during a twelve-month period
point to the tenuous nature of the company's earnings prospects.

Navistar's rating could come under further pressure during the
coming quarters in the absence of evidence that the company's
operating plan is being implemented successfully. Areas of focus
will include Navistar's ability to: improve market share; launch
new products and engines in an on-time and trouble-free manner;
and improve product quality. The rating could also be pressured by
further weakening in truck demand.

The principal methodology used in rating Navistar was the Global
Heavy Manufacturing Industry Methodology published in November
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.


NEOGENIX ONCOLOGY: Loses Control of Chapter 11 Case
---------------------------------------------------
The U.S. Bankruptcy Court last month denied a motion by Neogenix
Oncology, Inc. for extension until Jan. 22, 2013, of the deadline
to file its Chapter 11 plan and disclosure statement.  The Court
also denied an extension until March 25, 2013, of the deadline for
the Debtor to solicit acceptances of such chapter 11 plan.

Neogenix Oncology Inc. in Rockville, Maryland, filed a Chapter 11
petition (Bankr. D. Md. Case No. 12-23557) on July 23, 2012, in
Greenbelt with a deal to sell the assets to Precision Biologics
Inc., absent higher and better offers.

Founded in December 2003, Neogenix is a clinical stage, pre-
revenue generating, biotechnology company focused on developing
therapeutic and diagnostic products for the early detection and
treatment of cancer.  Neogenix, which has 10 employees, says it
its approach and portfolio of three unique monoclonal antibody
therapeutics -- mAb -- hold the potential for novel and targeted
therapeutics and diagnostics for the treatment of a broad range of
tumor malignancies.

Thomas J. McKee, Jr., Esq., at Greenberg Traurig, LLP, in McLean,
Virginia, serves as counsel.  Kurtzman Carson Consultants LLC is
the claims and notice agent.

The Debtor estimated assets of $10 million to $50 million and
debts of $1 million to $10 million.

W. Clarkson McDow, Jr., U.S. Trustee for Region 4, appointed seven
members to the committee of equity security holders.

Sands Anderson PC represents the Official Committee of Equity
Security Holders.  The Committee tapped FTI Consulting, Inc., as
its financial advisor.


NEWPAGE CORP: Authorized to Enter Into Exit Financing Letter
------------------------------------------------------------
The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District
of Delaware authorized NewPage Corporation, et al., (a) to enter
into an exit financing commitment letter and related fee letters,
(b) incur and pay certain fees, indemnities, costs and expenses in
connection therewith; and (c) file the fee letters under seal.

The Court also ordered that the Debtors are not authorize to
borrow any funds under the exit financing documents or to pledge
any assets to secured any obligations under the exit financing,
all of which will be subject to approval in connection with
confirmation of the Debtors' plan of reorganization.

As reported in the Troubled Company Reporter on Dec. 17, 2012, the
Court confirmed the Debtors' Chapter 11 Plan.  The Plan was
accepted by the overwhelming majority of NewPage creditors
entitled to vote.  The Debtors 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.

                         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.


NIELSEN FINANCE: Fitch Affirms 'BB' Issuer Default Rating
---------------------------------------------------------
Fitch Ratings has affirmed its Issuer Default Ratings (IDR) for
Nielsen Holdings, N.V. (Nielsen), and Nielsen Finance LLC and
Nielsen Finance Co. (collectively, Nielsen Finance) at 'BB'.  The
Rating Outlook has been revised to Stable from Positive.  The
Outlook revision reflects Fitch's expectations that a credit
profile consistent with a higher rating is not expected within the
next 12 to 24 months.

On December 18, Nielsen announced a definitive agreement to
acquire Arbitron Inc.  The transaction is valued at approximately
$1.3 billion and will be funded entirely with cash/new debt.
Nielsen noted that it has obtained commitments to fund the
transaction.  The transaction is expected to close as soon as
customary closing conditions are met and regulatory review is
completed.

Fitch has and continues to expect Nielsen to deploy cash flows
towards acquisitions.  While Fitch was not anticipating an
acquisition of this size, Nielsen has the financial flexibility to
absorb it and maintain current ratings.  Fitch calculates pro-
forma unadjusted gross leverage at approximately 4.6x.  Fitch
believes Nielsen will be able to continue to reduce gross leverage
levels as Fitch expects EBITDA will grow in the low- to mid-single
digits over the next two years, coupled with mandatory debt
amortization payments.

Nielsen has publicly stated its goal to reach investment grade
(including on its most recent investor conference discussing the
planned acquisition), but has not provided a leverage target or a
rationale for maintaining investment-grade ratings.  Fitch's
concerns remain around the uncertainty of Nielsen's long-term
financial policy (including a change in its investment-grade goal)
and the risk to the balance sheet from a private equity exit.
Nielsen noted in its public remarks that it would disclose
additional information regarding financial policy, including
returning capital to shareholders, at its earnings call in
February.

At the current ratings, the above concerns are mitigated by
Nielsen's free cash flow (FCF) profile.  Fitch expects Nielsen to
generate FCF in the $300 million-$400 million range per annum over
the next several years (without adjusting for the Arbitron Inc.
acquisition).  This will provide Nielsen with the financial
flexibility to satisfy mandatory debt amortization, make small
acquisitions, and institute balanced shareholder-friendly
programs.

Key Rating Drivers:

Nielsen was much more resilient during the downturn than other
media companies, given the contractual and diversified nature of
its revenue stream and the benign competitive environment.  The
company exhibited revenue and EBITDA growth, as well as positive
FCF, through the trough of the downturn.

Nielsen's Watch and Buy businesses are well positioned in their
respective markets.  The ratings reflect the risk that competitive
threats may emerge over time. Increased competition could result
in revenue pressure (lost share), incremental costs
(talent/sales/services), and some FCF pressure (investments in
offerings).  However, the complexity and significant investments
associated with attempting to replicate Nielsen's offerings create
meaningful barriers to entry.

Fitch believes Nielsen's liquidity is sufficient. At Sept. 30,
2012, liquidity was composed of $325 million of cash on hand and
$558 million available under the $635 million senior secured
revolver due in 2016. In the 12 months ended Sept. 30, 2012, Fitch
calculates the company generated $367 million of FCF.

Adjusting for Nielsen's October market activity, but not for the
Arbitron acquisition, total debt at Sept. 30, 2012 was
approximately $6.3 billion, consisting primarily of $4.2 billion
in secured term loans and revolver borrowings; $215 million of
senior unsecured notes due 2014; $1.1 billion of senior unsecured
notes due 2018; and $800 million of senior unsecured notes due
2020.  The company has been active in managing its near-term
maturities, and they are manageable over the next several years.
Fitch calculates unadjusted gross leverage as of Sept. 30, 2012 at
4.0x (adjusting for October market activity).

In addition to the debt noted above, the company has $288 million
of 6.25% mandatory convertible subordinated notes due 2013, which
are afforded 100% equity credit under Fitch's hybrid criteria.
These notes will automatically convert on Feb. 1, 2013 (less than
three years) into common equity and have a set conversion rate (a
max of 2.1739 and a min of 1.8116).  The notching of the mandatory
convertible instruments reflects Fitch's hybrid criteria, which
typically notches such hybrid securities two notches down from the
IDR.

The notching on Nielsen Finance's senior secured debt reflects the
security provided to the lenders.

What Could Trigger a Rating Action

Positive: Absent a clear leverage target statement, continued
improvement in operating trends with gross leverage less than 4x.

Negative: Additional debt-funded acquisitions that materially
increased leverage, or shareholder-friendly policies that
increased debt in the near term, and kept pro forma unadjusted
gross leverage above 4.5x, would pressure the ratings.

Fitch has affirmed the following ratings:

Nielsen

  -- IDR at 'BB';
  -- Mandatory convertible subordinated notes at 'B+'.

Nielsen Finance

  -- IDR at 'BB';
  -- Senior secured bank facility at 'BB+';
  -- Senior unsecured notes at 'BB'.

The Rating Outlook is Stable.


NRG ENERGY: S&P Affirms 'BB-' CCR After GenOn Merger Closes
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating on NRG Energy Inc. and removed the ratings from
CreditWatch with negative implications, where S&P placed them on
July 23, 2012. "At the same time, we raised GenOn Energy Inc.'s
ratings to 'B' from 'B-' and removed them from CreditWatch
positive, where we placed them on July 23, 2012," S&P said.

"The rating actions follow the closing of NRG's merger with GenOn.
Following the exchange, NRG's existing shareholders own about 71%
of the pro forma company," S&P said.

"NRG had about $11.3 billion of total debt as of Sept. 30, 2012.
Recourse corporate debt was about $8.05 billion. GenOn has about
$3.7 billion of outstanding debt pro forma after paying off the
term loan B, but we impute about $1.8 billion in additional debt
into our financial measures to reflect operating lease liabilities
at key subsidiaries GenOn MidAtlantic LLC and GenOn REMA LLC," S&P
said.

"We raised GenOn's corporate rating by one notch to 'B'. The
upgrade reflects that the company benefits from optimization of
its portfolio through scope and scale, lower operating and
maintenance expenses, and the extension of a secured revolving
credit facility (about $500 million) from NRG. While GenOn has
repaid its $686 million term loan and improved its stand-alone
financial measures, it has used to pay down the term loan and also
reduced liquidity further by terminating the $788 million
revolving facility. Finally, we have not equalized GenOn's ratings
with NRG's to underscore the nonrecourse optionality NRG retains
and its intention to operate the two businesses at arm's length,"
S&P said.

"Over time, if we see a deeper relationship between the two units
that could stand in times of stress, a lesser ratings separation
would follow," said Standard & Poor's credit analyst Aneesh
Prabhu.

"The stable outlook reflects our view that the business risk
profile, financial risk profile, free cash flow, and liquidity are
not likely to change from our expectations over the next two
years. There is no upside potential for NRG's ratings through 2014
given that we expect the company's consolidated cash flow from
operations to debt ratio to be at the weaker end for the rated
level, at about 12% to 13% through 2013. We will likely lower
NRG's ratings if its cash flow to debt measures decline
consistently below 12%. Still, free operating cash flow to debt
and discretionary cash flow to debt ratios remain strong, at
about 7% and 6%, respectively, indicating the large free cash flow
generation potential, which will allow the company to internally
fund both its capital spending and distributions even under our
price deck. We believe GenOn's operations are strategically
important to NRG, but will maintain the rating differential
because NRG retains the optionality of walking away from GenOn's
nonrecourse debt. Over time, if we see a deeper relationship
between the two units that could stand in times of stress, a
lesser separation would follow. Ratings would also be affected--
with NRG's likely declining--if NRG extends support to GenOn if
its credit quality deteriorates," S&P said.


PENN NATIONAL: S&P Cuts Rating on 8.75% Subordinated Notes to BB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its recovery rating on
Penn National Gaming Inc.'s 8.75% senior subordinated notes due
2019 to '5' (expectation of 10% to 30% recovery) from '4' (30% to
50% recovery) and consequently lowered its issue-level rating on
the notes to 'BB-' from 'BB', in accordance with S&P's notching
criteria. The issue-level rating was removed from CreditWatch,
where it was placed with negative implications on Oct. 17, 2012.

"The rating revisions reflect the closing on a $1 billion add-on
to the existing senior secured credit facilities. This scenario
and potential rating outcome were previously discussed in our
research report on Penn National Gaming, published Oct. 17, 2012,
on RatingsDirect. The $1 billion add-on results in a higher level
of secured debt outstanding under our simulated default scenario
versus our previous analysis. This reduces the recovery prospects
for the subordinated notes enough to warrant a downward revision
to our recovery rating on the notes," S&P said.

RATINGS LIST

Ratings Unchanged

Penn National Gaming Inc.
Corporate Credit Rating         BB/Stable/--

Ratings Downgraded And Removed From CreditWatch;
Recovery Ratings Revised

Penn National Gaming Inc.
                                To          From
8.75% sr sub notes due 2019    BB-         BB/Watch Neg/--
  Recovery Rating               5           4


POTLATCH CORP: S&P Lowers Rating on 6.95% Debentures to 'BB'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issue-level rating
on Spokane, Wash.-based Potlatch Corp.'s 6.95% debentures' to 'BB'
(same as the corporate credit rating) from 'BBB-' and revised the
recovery rating to '3', which indicates S&P's expectation of
meaningful (50% to 70%) recovery for lenders in the event of a
default, from '1'.

"At the same time, we affirmed all other ratings, including our
'BB' corporate credit rating, on Potlatch. The outlook is stable,"
S&P said.

"The issue-level rating action and corporate credit rating
affirmation follow Potlatch Corp.'s entry into a new $250 million
unsecured revolving credit facility and reflect the release of
collateral securing the debentures according to the company's
latest 8-K report," said Standard & Poor's credit analyst Tobias
Crabtree. "The 'BB' issue-level for the 6.95% debentures is in
line with our 'BB' corporate credit rating on the company and our
notching guidelines for a '3' recovery rating."

"The ratings on Potlatch reflect Standard & Poor's assessment of
the company's 'fair' business risk. Potlatch is a midsize forest
products company with cyclical earnings and cash flow--primarily
in wood products manufacturing--and modest geographic diversity.
The ratings also incorporate our assessment of Potlatch's
'significant' financial risk, given our view that the company's
leverage over the next several quarters will decline to 4x or
below," S&P said.

"Potlatch is a U.S. timber REIT that owns and manages
approximately 1.43 million acres of timberlands in Arkansas,
Idaho, and Minnesota. It is our view that the carrying value of
these timberlands (about $651 per acre) materially understates
their economic value. For example, Potlatch's debt to capital
ratio is 76% on a book value basis. However, debt to capital is
closer to 22% if we adjust these holdings closer to market value,
using an estimated market value of approximately $1,400 per acre.
(We derived this estimate by reviewing a range of recent
timberland transactions, as reported by publicly traded timber
REITs, and by considering the appraised value of Potlatch's
timberlands as required by its new credit agreement. The values
ranged from about $1,500 per acre in Idaho to $750 per acre in the
Lake States and $1,550 per acre in the U.S. South. Our analysis
does not ascribe additional value to the 220,000 to 250,000 acres
of property held for higher or better uses than timberlands)," S&P
said.

"The stable rating outlook reflects our expectation that improving
housing and lumber markets will result in Potlatch's leverage
declining to 4x over the next several quarters," S&P said.

"We could raise the rating if a continued improvement in the log
and lumber markets results in the company's 2013 EBITDA being
approximately 20% higher than our current projection--in turn,
increasing its FFO to 25% and causing its debt to EBITDA to
decline to the mid-3x area," S&P said.

"We could lower the ratings if the expected housing recovery
stalls, rendering Potlatch's financial measures more indicative of
an 'aggressive' financial risk profile, or if the company's
financial policy becomes more aggressive with respect to
dividends, share repurchases, or debt-financed timberland
purchases. Specifically, we would view leverage approaching 5x and
FFO to debt in the low-teens area on a sustained basis as
consistent with a lower rating," S&P said.


ROCKIES EXPRESS: Moody's Affirms 'Ba1' CFR/PDR; Outlook Negative
----------------------------------------------------------------
Moody's Investor Service changed the rating outlook for Rockies
Express Pipeline LLC (REX) to negative from stable. The Ba1
Corporate Family Rating (CFR) and senior notes rating were
affirmed.

"The negative outlook for Rockies Express reflects high leverage
and the potential for earnings declines in late 2014 when about
10% of its capacity is likely to require re-contracting,"
commented Pete Speer, Moody's Vice President. "With the recent
acquisition by Tallgrass Energy Partners and the uncertainties
regarding Rockies Express' earnings power post 2019, leverage
reduction is necessary to support REX's existing ratings."

Issuer: Rockies Express Pipeline LLC

  Ratings Affirmed:

    Corporate Family Rating Ba1

    Probability of Default Rating Ba1

    Senior Unsecured Regular Bond/Debenture ratings Ba1, changed
    to a range of LGD4, 50% from a range of LGD4, 53%

  Outlook Actions:

    Outlook, Changed To Negative From Stable

RATINGS RATIONALE

REX's Ba1 CFR is supported by access to large natural gas supply
basins in the Rocky Mountain region, multiple interconnections
with long haul pipelines serving the Midwest and Northeastern US,
and long-term firm transportation contracts with mostly investment
grade producers and marketing companies. These positive attributes
are offset by REX's high financial leverage and the long-term
challenges to its competitive position posed by increasing gas
production from the Marcellus Shale. The pipeline has about 10% of
its capacity that is likely to require re-contracting in late
2014, which could result in a significant increase in leverage
metrics absent debt reduction.

The sale of 50% equity ownership in REX to Tallgrass Energy
Partners (Tallgrass Operations LLC, Ba3 stable) by Kinder Morgan
Energy Partners (KMP, Baa2 stable) indicated that REX's current
fair value is less than its cost to build. This further validated
Moody's concerns regarding the future tariffs that REX will
receive when its original customer contracts expire in 2019. In
addition, this transaction replaced KMP as a sponsor and operator
with a lower rated private equity sponsored entity with a limited
operating track record.

REX has $500 million of debt that is maturing in July 2013. Given
Moody's concerns regarding a potential decline in earnings in late
2014 and REX's long-term competitiveness, a reduction in financial
leverage to below 5x is necessary to support REX's Ba1 ratings. If
Debt/EBITDA isn't reduced below 5x through debt repayment or
earnings increases then the ratings could be downgraded to Ba2.
These credit issues makes a rating upgrade unlikely over the next
two years.

The principal methodology used in rating REX was the Natural Gas
Pipeline Industry Methodology published in November 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.

Rockies Express LLC is an interstate natural gas pipeline running
from Colorado to Ohio, owned by subsidiaries of Tallgrass Energy
Partners, Phillips 66 (Baa1 stable) and Sempra Energy (Baa1
stable).


RYMAN HOSPITALITY: S&P Raises Rating on 6.75% Notes Due 2014
------------------------------------------------------------
Standard & Poor's Ratings Services revised its recovery rating on
Nashville, Tenn.-based Ryman Hospitality Properties Inc.'s 6.75%
senior notes due 2014 to '1', reflecting an expectation of very
high (90% to 100%) recovery for lenders in the event of a payment
default, from '5' (10% to 30% recovery expectation). "In
accordance with our notching criteria for a '1' recovery rating,
we raised our issue-level rating on the notes to 'BB' from 'B'.
Ryman recently announced that it will redeem the 6.75% senior
notes on Jan. 17, 2013, using availability under its credit
facility, at which time we will withdraw our ratings on the
notes," S&P said.

"This action has no effect on our 'B+' corporate credit rating on
the company. The rating outlook is stable," S&P said.

"The revised recovery rating reflects a change in our approach in
determining Ryman's recovery value under our simulated default
scenario. We are now using a discrete asset valuation based on
distressed real estate values, where we previously used an
enterprise valuation based on estimated distressed cash flow
levels after a hypothetical payment default. This is consistent
with the approach used for the two other non-investment-grade
rated hotel REITs, Host Hotels & Resorts Inc. and FelCor Lodging
Trust Inc. In May 2012, Ryman agreed to sell its hotel management
company and Gaylord brand to Marriott International Inc. and
convert to a REIT. The sale to Marriott closed in October, and the
REIT conversion is effective Jan. 1, 2013. In our liquidation
scenario, we believe that the value to lenders is now unburdened
by a significant level of corporate costs that would have remained
in place under a reorganization scenario. We believe that the
removal of these corporate costs contributes to an increase in the
collateral value. In addition, we believe lenders could realize
increased value in a default scenario through the sale of the
company's assets, either individually or as a package," S&P said.

"Our corporate credit rating reflects our assessment of the
company's business risk profile as 'weak' and our assessment of
the company's financial risk profile as 'aggressive,' according to
our criteria. Our assessment of Ryman's business risk profile
reflects its limited asset diversity and small hotel portfolio.
The company has good quality properties that target group and
convention customers, providing some advance booking visibility
and somewhat offsetting business risks," S&P said.

"Our assessment of Ryman's financial risk profile as 'aggressive'
reflects our belief that EBITDA coverage of interest expense will
be strong, at around 4x, and total lease-adjusted debt to EBITDA
will be in the low-5x area at the end of 2012 and improve to the
high-4x area in 2013. Our measure of EBITDA also includes the
interest income received from the Prince George's County bonds
that are held by Ryman," S&P said.


SAND SPRING: Plan Filing Exclusivity Extended to Feb. 28
--------------------------------------------------------
The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware, extended Sand Spring Capital III, LLC et
al.'s exclusive periods to propose a Chapter 11 plan and solicit
acceptances for that plan until Feb. 28, 2013, and May 13,
respectively.  This is the fourth exclusivity extension granted to
the Debtors.

Sand Spring Capital III, LLC, filed a Chapter 11 petition
(Bankr. D. Del. Case No. 11-13393) on Oct. 25, 2011 in Delaware.
Affiliates, Sand Spring Capital III, LLC, CA Core Fixed Income
Fund, LLC, CA Core Fixed Income Offshore Fund, Ltd., CA High Yield
Fund, LLC, CA High Yield Offshore Fund, Ltd., CA Strategic Equity
Fund, LLC, CA Strategic Equity Offshore Fund, Ltd., Sand Spring
Capital III, Ltd., Sand Spring Capital III Master Fund, LLC,
sought Chapter 11 protection on the same day.

Sand Spring Capital III LLC disclosed $4,882,373 in assets and
$4,140 in liabilities.  CA Core Fixed Income Fund LLC disclosed
$36,176,682 in assets and $48,244 in liabilities.  CA Core Fixed
Income Offshore Fund Ltd. disclosed $6,900,726 in assets and
$10,393 in liabilities.  CA High Yield Fund LLC disclosed
$5,626,644 in assets and $11,568 in liabilities.  CA High Yield
Offshore Fund, Ltd. disclosed $10,840,032 in assets and $22,785 in
liabilities.  CA Strategic Equity Fund LLC scheduled $2,013,461 in
assets and $0 debt.  CA Strategic Equity Offshore Fund Ltd.
disclosed $2,285,492 in assets and $0 debts.  Sand Spring Capital
III Ltd. disclosed $2,214,099 in assets and $1,820 in debts.  Sand
Spring Capital III Master Fund LLC disclosed $7,096,473 in assets
and $0 in debts.


SECUREALERT INC: Advance Technology Discloses 9.7% Equity Stake
---------------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, Advance Technology Investors, LLC, disclosed that, as
of Oct. 1, 2012, it beneficially owns 89,413,200 shares of common
stock of SecureAlert, Inc., representing 9.7% of the shares
outstanding.  A copy of the filing is available for free at:

                       http://is.gd/HuBQkV

                       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.


SEARS HOLDINGS: Elects Paul DePodesta to Board of Directors
-----------------------------------------------------------
Paul G. DePodesta, currently Vice President, Player Development &
Amateur Scouting for the New York Mets major league baseball club,
was elected to the Board of Directors of Sears Holdings
Corporation.  Mr. DePodesta will hold office until the 2013 annual
meeting of stockholders of the Company, or until his successor is
duly elected and qualified.  The Board has determined that Mr.
DePodesta meets the standards of independence under the Company's
Corporate Governance Guidelines and the applicable NASDAQ listing
rules.  As of Dec. 13, 2012, and in connection with, his election,
Mr. DePodesta has not yet been named to any committees of the
Board of Directors.

                            About Sears

Hoffman Estates, Illinois-based Sears Holdings Corporation
(Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's
fourth largest broadline retailer with more than 4,000 full-line
and specialty retail stores in the United States and Canada.
Sears Holdings operates through its subsidiaries, including Sears,
Roebuck and Co. and Kmart Corporation.  Sears Holdings also owns a
94% stake in Sears Canada and an 80.1% stake in Orchard Supply
Hardware.  Key proprietary brands include Kenmore, Craftsman and
DieHard, and a broad apparel offering, including such well-known
labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the
Apostrophe and Covington brands.  It also has the Country Living
collection, which is offered by Sears and Kmart.

Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary
Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on
Jan. 22, 2002.  Kmart emerged from chapter 11 protection on May 6,
2003, pursuant to the terms of an Amended Joint Plan of
Reorganization.  John Wm. "Jack" Butler, Jr., Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, represented the retailer in its
restructuring efforts.  The Company's balance sheet showed
$16,287,000,000 in assets and $10,348,000,000 in debts when it
sought chapter 11 protection.  Kmart bought Sears, Roebuck & Co.,
for $11 billion to create the third-largest U.S. retailer, behind
Wal-Mart and Target, and generate $55 billion in annual revenues.
Kmart completed its merger with Sears on March 24, 2005.

The Company's balance sheet at Oct. 27, 2012, showed $21.80
billion in total assets, $17.90 billion in total liabilities and
$3.90 billion in total equity.

                         Negative Outlook

Standard & Poor's Ratings Services in January 2012 lowered its
corporate credit rating on Hoffman Estates, Ill.-based Sears
Holdings Corp. to 'CCC+' from 'B'.  "We removed the rating from
CreditWatch, where we had placed it with negative implications on
Dec. 28, 2011.  We are also lowering the short-term and commercial
paper rating to 'C' from 'B-2'.  The rating outlook is negative,"
S&P said.

"The corporate credit rating reflects our projection that Sears'
EBITDA will be negative in 2012, given our expectations for
continued sales and margin pressure," said Standard & Poor's
credit analyst Ana Lai.  She added, "We further expect that
liquidity could be constrained in 2013 absent a turnaround
or substantial asset sales to fund operating losses."

Moody's Investors Service in January 2012 lowered Sears Holdings
Family and Probability of Default Ratings to B3 from B1.
The outlook remains negative. At the same time Moody's affirmed
Sears' Speculative Grade Liquidity Rating at SGL-2.

The rating action reflects Moody's expectations that Sears will
report a significant operating loss in fiscal 2011.  Moody's added
that the rating action also reflects the company's persistent
negative trends in sales, which continue to significantly
underperform peers.

As reported by the TCR on Dec. 7, 2012, Fitch Ratings has affirmed
its long-term Issuer Default Ratings (IDR) on Sears Holdings
Corporation (Holdings) and its various subsidiary entities
(collectively, Sears) at 'CCC' citing that The magnitude of Sears'
decline in profitability and lack of visibility to turn operations
around remains a major concern.


SENSUS USA: S&P Revises Outlook on 'B+' CCR on Weak Credit Metrics
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Sensus USA Inc. to negative from stable. "We affirmed all the
ratings on the company, including the 'B+' corporate credit
rating," S&P said.

"The outlook revision reflects the potential for a one-notch
downgrade if Sensus' credit measures remain weak in the fiscal
year, ending March 31, 2013, primarily as a result of weaker-than-
expected operating and financial performance and our view that the
company's covenant headroom could tighten to about 10% or less in
the coming quarters," said Standard & Poor's credit analyst Carol
Hom.

In its base-case credit scenario, S&P forecast assumes:

-- Sensus will have flat to low-single-digit contraction in its
    top line for fiscal year March 2013;

-- EBITDA margin will be roughly 10%; and

-- Capital expenditures will be roughly 3% of revenues.

The ratings on Sensus reflect its "weak" business risk profile and
its "aggressive" financial risk profile. "Our assessment of the
company's weak business risk profile primarily reflects its
participation in the highly competitive metering systems industry,
limited geographic diversity, and high customer concentration. In
addition, it also reflects the company's exposure to discretionary
capital spending by utilities, capital availability, the level of
penetration, and the pace of transition to the new smart-grid
technology. Success within this industry typically depends on a
company's breadth of product offering, product quality and
availability, customer service, customers' acceptance of new
technology, and price," S&P said.

"We believe Sensus holds the No. 1 position globally in water
meters, with approximately 20% market share, and is one of the top
three players in North America in smart electric meters and
communications technology. The company generates about 70% of
revenues from North America. We believe Sensus' water meter
business should continue to benefit from the industry shift to
smart technology, which enables two-way communication between the
meter and utilities. We understand that the use of automated
metering reading (AMR) and advanced metering infrastructure (AMI)
technologies should expand and that Sensus' revenues will increase
as utilities shift to smart meters from traditional mechanical
ones," S&P said.

"The company manufactures water, gas, and electricity meters and
also offers related communications, networking, and software
solutions. We estimate that the company's revenues will be flat to
slightly negative based on a slowdown in orders and contracts
because of the weaker global economy. However, we believe the
majority of sales will continue to occur as aftermarket
replacement meters or upgrades. We expect overall long-term growth
to be similar to residential and nonresidential construction
growth, which Standard & Poor's chief economist currently
forecasts at 4% (for nonresidential construction) and roughly 19%
(up from a relatively low base for residential construction) for
2013. We believe the company's EBITDA margin will remain about
10%, below historical levels of roughly 15% primarily because of
higher research and development spending on upcoming potential
projects, which we expect to partly affected profitability in
fiscal 2013. Volatility in the cost of raw materials -- including
brass, plastic resins, and aluminum -- can affect profitability.
We view the company's management and governance profile as
'fair,'" S&P said.

"We believe Sensus' financial risk profile is 'aggressive.' As of
Sept. 30, 2012, the ratio of total debt to EBITDA (adjusted for
operating leases and pension underfunding) was more than 6x, and
funds from operations (FFO) to total debt was less than 10%,
against our expectation of total debt to EBITDA of 4x-5x, and FFO
to total debt of 10%-15%. Credit metrics are currently weaker than
our expectations, and we expect these metrics could remain so
through fiscal 2013 based on our expectation of negative free cash
flow, which we believe will likely constrain debt reduction.
Further, we believe any small to midsize acquisitions to
consolidate market positions could delay deleveraging. The company
is co-owned by The Resolute Fund L.P., an affiliate of private-
equity firm The Jordan Co., and Goldman Sachs Capital Partners
L.P.," S&P said.

"The outlook is negative. We could lower the ratings if Sensus'
headroom under financial covenants falls below 10%, if credit
measures do not return to levels commensurate for the current
ratings -- for instance, if total debt to EBITDA remains above 5x
for an extended period -- and if FFO to total debt does not
improve to more than 10%. Conversely, we could revise the outlook
to stable if operating performance improves meaningfully, which
could improve credit measures within our expectations for the
ratings. The company's weak business risk profile, coupled with
its private-equity ownership, limits any potential for an
upgrade," S&P said.


SI ORGANIZATION: Moody's Affirms 'B2' CFR/PDR; Outlook Stable
-------------------------------------------------------------
Moody's Investors Service has changed the rating outlook of The SI
Organization, Inc. to negative from stable. All existing ratings,
including the B2 Corporate Family Rating, have been affirmed. The
revised rating outlook acknowledges weak credit metrics for the
rating level and US budgetary pressures likely to constrain
revenue and margin opportunities ahead.

Ratings:

  Corporate Family, affirmed at B2

  Probability of Default, affirmed at B2

  $40 million first lien revolver due 2015, affirmed at Ba3,
  LGD2, 28%

  $300 million first lien term loan due 2016, affirmed at Ba3,
  LGD2, 28%

  Rating Outlook, to Negative from Stable

Ratings Rationale

The negative rating outlook considers weak credit metrics for the
rating level, including debt to EBITDA exceeding 8x (Moody's
adjusted basis, LTM Q3-2012) with free cash flow to debt of only
about 2%. Since the late 2010 leveraged buy-out from Lockheed
Martin Corporation, after which SI became a stand-alone operating
company, free cash flow generation has been below sector rated
peer levels and debt reduction has been negligible. High leverage
limits financial flexibility and makes the credit vulnerable to
stress, while low free cash flow limits the ability to boost
resilience through debt reduction. Demand for qualified service
contractors within SI's intelligence community niche should remain
steady over the intermediate-term but margin pressures broadly
taking hold across the federal services sector will lessen niche
earnings potential, inhibiting the credit metric gains necessary
to sustain the B2 CFR. Beyond 2013, financial ratio covenant tests
under the first lien credit facility are scheduled to step down to
levels that could become tight, another consideration of the
negative rating outlook.

The B2 Corporate Family Rating nonetheless recognizes SI's solid
business franchise that could drive market share gains and
ultimately improve credit metrics, although room for error will be
low because the declining defense services environment is
encouraging many competitors to lower pricing and bid broadly. As
a well regarded program manager and systems integrator focused on
classified agencies, SI's labor qualifications and performance
track record favor re-compete win rates within its narrow customer
set. Higher-than-average revenue growth over the past year also
reflects SI's progress, since becoming a standalone entity, at
penetrating new directorates. Continuation of market share gains
could more than offset margin pressures that are constraining free
cash flow, particularly if the company's efficiency initiatives
contribute lower overhead rates. Contracting officers are
increasingly focused on maximizing the value of procurements,
making competitive direct labor rates, low billable overhead and
past contract performance scores key bidding differentiators.
Supporting the upside prospect is a funded backlog to revenue
ratio of 70%, relatively good for a services contractor and which
provides some insulation against the Budget Control Act of 2011's
("BCA") sequestration feature. (BCA is focused on capping future
authorizations, not existing ones like the funded commitments
represented in SI's backlog.) Further, the funded portion of SI's
backlog typically becomes revenue within a year. The liquidity
profile is adequate despite high leverage, helped mostly by low
scheduled annual debt amortizations until 2016 and enough cash on
hand to internally fund the yearly working capital cycle. The
near-term covenant compliance headroom expected gives SI time to
pursue further market share gains that may in turn permit a
material degree of debt pre-payment.

Stabilization of the rating outlook would depend on expectation of
debt to EBITDA declining to the mid 6x range in 2013, with free
cash flow to debt in the mid-single digit percentage range and
sustained compliance headroom. The rating would be downgraded in
2013 if debt to EBITDA remains above 7x with limited free cash
flow generation.

The principal methodology used in rating SI was the Global
Aerospace and Defense Industry Methodology published in June 2010.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

The SI Organization, Inc. ("SI") provides advanced systems
engineering and integration ("SE&I") services to U.S. government
intelligence agencies as well as related modeling, simulation,
analysis and risk mitigation services. Revenues for the twelve
months ending September 2012 approached $700 million. The company
is majority-owned by entities of Veritas Capital.


SOUTH FRANKLIN: Scheduled $53.7MM in Assets, $150MM in Debts
------------------------------------------------------------
South Franklin Circle filed with the U.S. Bankruptcy Court for the
Northern District of Ohio its schedules of assets and liabilities,
disclosing:

     Name of Schedule              Assets         Liabilities
     ----------------            -----------      -----------
  A. Real Property               $45,820,400
  B. Personal Property            $7,901,703
  C. Property Claimed as
     Exempt
  D. Creditors Holding
     Secured Claims                              $100,586,192
  E. Creditors Holding
     Unsecured Priority
     Claims                                        $2,134,356
  F. Creditors Holding
     Unsecured Non-priority
     Claims                                       $47,136,048
                                 -----------      -----------
        TOTAL                    $53,722,103     $149,856,596

A copy of the schedules is available for free at
http://bankrupt.com/misc/SOUTH_FRANKLIN_sal.pdf

Daniel M. Mcdermott, U.S. Trustee for Region 9 notified the U.S.
Bankruptcy Court for the Northern District of Ohio that he was
unable to form a committee of unsecured creditors in the Chapter
11 case of South Franklin Circle.  The Trustee said that there
were an insufficient number of creditors willing to serve on a
committee.

The bankruptcy judge authorized South Franklin Circle to employ
Vorys, Sater, Seymour and Pease, LLP as special counsel nunc pro
tunc to Oct. 29, 2012.

As reported in the Dec. 7, 2012 edition of the TCR, the bankruptcy
judge has signed off on South Franklin Circle's restructuring
plan, a little more than a month after the Ohio retirement
community sought Chapter 11 protection.  The Debtor's bankruptcy
plan is designed to reduce secured debt by 40%.  The general
unsecured claimants and equity holders are unaffected by the Plan.

                    About South Franklin Circle

South Franklin Circle, a nonprofit continuing-care retirement
community, filed a Chapter 11 petition (Bankr. N.D. Ohio Case No.
12-17804) on Oct. 24, 2012, with a prepackaged Chapter 11 plan.
The Debtor owns a 239-unit retirement community in Bainbridge
Township, Ohio.  About 53% of the 199 independent-living units and
more than half of the 40 assisted-living units are occupied.

Bankruptcy Judge Pat E. Morgenstern-Clarren oversees the case.
The Debtor has tapped McDonald Hopkins LLC as bankruptcy counsel,
Schneider, Smeltz, Ranney & LaFond, P.L.L., as special counsel,
Aurora Management Partners, Inc., for staffing services and the
firm's Jay P. Auwerter as interim restructuring officer.

The Debtor disclosed $53,722,103 in assets and $149,856,596 in
liabilities as of the Chapter 11 filing.

KeyBank, the DIP agent, is represented in the case by Thompson
Hine LLP.

The Court approved the Debtor's restructuring plan, designed to
reduce secured debt by 40%.  The general unsecured claimants and
equity holders are unaffected by the Plan.


SOUTHERN AIR: Plan Approval Faces Creditor Opposition
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Southern Air Holdings Inc. was authorized by the
bankruptcy court in Delaware to send the Chapter 11 reorganization
plan to creditors for a vote.  Securing approval of the plan at
the Feb. 14 confirmation hearing will require overcoming
opposition from the official creditors' committee which urges
creditors to vote "no."  Court-approved disclosure materials state
that unsecured creditors with $101 million in claims can expect to
recover between 2.6% and 3.1%.

The report relates Southern Air filed for Chapter 11 bankruptcy
reorganization in late September after working out a plan giving
82.5% of the stock to secured lenders in return for $295 million
in debt.  The projected recovery by the lenders is 11.9% to 20.6%.
Oak Hill would retain the other 17.5% in return for making
payments to cover lease obligations and provide capital.

                        About Southern Air

Based in Norwalk, Connecticut, military cargo airline Southern
Air Inc. -- http://www.southernair.com/-- its parent Southern Air
Holdings Inc. and their affiliated entities filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Case Nos. 12-12690 to
12-12707) in Wilmington on Sept. 28, 2012, blaming the decline in
business from the U.S. Department of Defense, which reduced its
troop count in Afghanistan and hired Southern Air less frequently.

Bankruptcy Judge Christopher S. Sontchi presides over the case.
Brian S. Rosen, Esq., Candace Arthur, Esq., and Gabriel Morgan,
Esq., at Weil, Gotshal & Manges LLP; and M. Blake Cleary, Esq.,
and Maris J. Kandestin, Esq., at Young, Conaway, Stargatt &
Taylor, serve as the Debtor's counsel.  Zolfo Cooper LLC serves as
the Debtors' bankruptcy consultant and special financial advisor.
Kurtzman Carson Consultants, LLC, serves as claims and notice
agent.

CF6-50, LLC, debtor-affiliate, disclosed $338,925,282 in assets
and $288,000,000 in liabilities as of the Chapter 11 filing.  The
petition was signed by Jon E. Olin, senior vice president.

Canadian Imperial Bank of Commerce, New York Agency, the DIP agent
and prepetition agent, is represented by Matthew S. Barr, Esq.,
and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP; and
Mark D. Collins, Esq., and Katherine L. Good, Esq., at Richards
Layton & Finger PA.

Stephen J. Shimshak, Esq., and Kelley A. Cornish, Esq., at Paul
Weiss Rifkind Wharton & Garrison LLP; and Mark E. Felger, Esq., at
Cozen O'Connor, represent Oak Hill Capital Partners II, LP, OH
Aircraft Acquisition LLC, and Oak Hill Cargo 360 LLC.

The Debtors' Plan provides that lenders agreed to accept ownership
of the company as payment for their $288 million loan.

On Nov. 21, 2012, Roberta DeAngelis, U.S. Trustee for Region 3,
appointed the statutory committee of unsecured creditors.


SPIRIT REALTY: To Pay Two Cash Dividends on January 15
------------------------------------------------------
Spirit Realty Capital, Inc.'s Board of Directors has declared two
cash dividends on its common stock.

The first dividend of $0.0204 per share is for the stub period
from the completion of the Company's initial public offering on
Sept. 25, 2012, to the end of the third quarter on Sept. 30, 2012.

The second dividend of $0.3125 per share is for the fourth quarter
ending Dec. 31, 2012.

Both dividends will be paid on Jan. 15, 2013, to stockholders of
record on Dec. 31, 2012.

                       About Spirit Finance

Spirit Finance Corporation (now known as Spirit Realty Capital,
Inc.) headquartered in Phoenix, Arizona, is a REIT that acquires
single-tenant, operationally essential real estate throughout
United States to be leased on a long-term, triple-net basis to
retail, distribution and service-oriented companies.

The Company's balance sheet at Sept. 30, 2012, showed $3.20
billion in total assets, $1.98 billion in total liabilities and
$1.22 billion in total stockholders' equity.

                           *     *     *

As reported by the TCR on Oct. 9, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Spirit Realty
Capital Inc. (Spirit) to 'B' from 'CCC+'.   "The upgrade reflects
Spirit Realty Capital Inc.'s successful completion of an IPO of
its common stock, which raised $465 million of net proceeds," said
credit analyst Elizabeth Campbell.

In the Sept. 15, 2011, edition of the TCR, Moody's Investors
Service affirmed the corporate family rating of Spirit Finance
Corporation at Caa1.

"This rating action reflects Spirit's consistent compliance with
its term loan covenants throughout the downturn (despite
relatively thin cushion at certain times), as well as the recent
debt paydown which, in Moody's view, will help Spirit remain in
compliance within the stated covenant limits going forward."


SPRINT NEXTEL: Offers to Buy Rest of Clearwire for $2.9 Apiece
--------------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, Sprint Nextel Corporation and its affiliates disclosed
that, as of Dec. 11, 2012, they beneficially own 739,010,818
shares of Class A common stock of Clearwire Corporation
representing 51.7% of the shares outstanding.

On Dec. 12, 2012, the Board of Directors of Sprint authorized
Sprint's management to proceed with discussions with Clearwire
with the intent to attempt to reach a definitive agreement for a
potential merger transaction.  Representatives of Sprint have
proposed certain terms for the Proposed Transaction.  The Board of
Directors of Clearwire has formed a special committee comprised of
disinterested directors that is reviewing the Proposed
Transaction.

Pursuant to the Sprint Proposal, Sprint would acquire all of the
shares of Common Stock and Clearwire Communications Class B Common
Interests not already owned by the Sprint Entities at a purchase
price of $2.90 per share of Class A Common Stock and Class B
Common Stock (together with the corresponding Clearwire
Communications Class B Common Interests) in cash.

Sprint has proposed to provide interim financing to Clearwire from
and after the execution of definitive documentation relating to
the Proposed Transaction in an amount up to $800 million.

A copy of the regulatory filing is available at:

                        http://is.gd/BQYEh1

                        About Sprint Nextel

Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S)
-- http://www.sprint.com/-- is a communications company offering
a comprehensive range of wireless and wireline communications
products and services that are designed to meet the needs of
individual consumers, businesses, government subscribers and
resellers.

The Company's balance sheet at Sept. 30, 2012, showed
$48.97 billion in total assets, $40.47 billion in total
liabilities and $8.50 billion in total stockholders' equity.

                           *     *     *

As reported by the TCR on Oct. 17, 2012, Standard & Poor's Ratings
Services said its ratings on Overland Park, Kan.-based wireless
carrier Sprint Nextel Corp., including the 'B+' corporate credit
rating, remain on CreditWatch.  "The CreditWatch update follows
the announcement that Sprint Nextel has agreed to sell a majority
stake to Softbank," said Standard & Poor's credit analyst Allyn
Arden.

In the Oct. 17, 2012, edition of the TCR, Moody's Investors
Service has placed all the ratings of Sprint Nextel, including its
B1 Corporate Family Rating, on review for upgrade following the
announcement that the Company has entered into a series of
definitive agreements with SOFTBANK CORP.

As reported by the TCR on Aug. 8, 2012, Fitch Ratings affirms,
among other things, the Issuer default rating (IDR) of Sprint
Nextel and its subsidiaries at 'B+'.  The ratings for Sprint
reflect the ongoing execution risk both operationally and
financially regarding several key initiatives that the company
expects will improve cash generation, network performance and
longer-term profitability.


STABLEWOOD SPRINGS: Files for Chapter 11 in San Antonio
-------------------------------------------------------
Stablewood Springs Resort, LP, owner of a high-end resort
destination encompassing 140 acres of a 543-acre private ranch in
the Texas hill country near Hunt, filed a bare-bones Chapter 11
petition (Bankr. W.D. Tex. Case No. 12-53887) in San Antonio on
Dec. 17, 2012.

The Debtor disclosed assets of $11.15 million and liabilities of
$22.8 million as of Nov. 30, 2012.  Liabilities include $10.4
million in secured debt and $9.3 million of disputed secured debt.


STAR BUFFET: Wins Confirmation of Full-Payment Plan
---------------------------------------------------
Star Buffet, Inc. disclosed that on Dec. 17, 2012 U.S. Bankruptcy
Court for the District of Arizona entered an order confirming the
company's Second Amended Plan of Reorganization.  The Plan
includes payment of 100% of the allowed claims for all creditors
and retention of the company's common stock.

Robert E. Wheaton, Star Buffet, Inc.'s President and CEO stated,
"The Bankruptcy Court's approval of our Plan of Reorganization is
an important next step in a process to provide a solid foundation
to grow the company for the benefit of our employees, customers,
vendors, creditors and shareholders."

Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Plan pays all claims in full over periods ranging
from four to seven years.  Payments required when the plan is
approved will be made with a $300,000 secured loan from the
company's chief executive officer, who holds about 45% of the
stock.

Star closed Dec. 18 at $2.66, up 6 cents in over-the-counter
trading.

Based in Arizona, Star Buffet, Inc. filed for Chapter 11
protection (Bankr. D. Ariz. Case No. 11-27518) on Sept. 28, 2011.
Judge George B. Nielsen Jr. presides over the case.  S. Cary
Forrester, Esq., at Forrester & Worth, PLLC, represents the
Debtor.  The Debtor estimated both assets and debts of between
$1 million and $10 million.

Summit Family Restaurants Inc. filed a voluntary petition for
reorganization under Chapter 11 on Sept. 29, 2011.  The cases are
being jointly administered.  None of the Company's other
subsidiaries were included in the bankruptcy filing.


TENAKA OKLAHOMA: S&P Affirms 'BB-' Rating on $73MM Secured Bonds
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook to stable
from negative and affirmed its 'BBB-' rating on Kiowa Power
Partners LLC's (KPP) $642 million senior secured bonds ($340
million currently outstanding) due in 2013 and 2021. At the same
time, S&P revised its outlook to stable from negative and affirmed
its 'BB-' rating on Tenaska Oklahoma I L.P.'s (TOILP) $73.5
million senior secured bonds ($19.89 million currently
outstanding) due in 2014 because Tenaska Oklahoma pays debt with
distributions from KPP. The '1' recovery rating on TOILP is
unchanged.

"The revised outlook reflects our view that operations for the
project have now stabilized," said Standard & Poor's credit
analyst Grace Drinker. "Since the forced outage in June 2011, the
project has not experienced any major operational issues to date,"
Ms. Drinker added.

"TOILP is the holding company of KPP, is a 1,220 megawatt (MW)
combined-cycle gas-fired power plant located in Pittsburg County,
Okla., and sells capacity and energy under an 18-year agreement
with Shell Energy North America (US) L.P. (SENA; A-/Stable). Shell
Oil Co. (AA/Stable/A-1+), fully guarantees SENA's obligations
under the EMA, subject to a limit of $1.325 billion amortizing in
line with the bonds' scheduled redemption profile. Neither entity
guarantees the bonds," S&P said.


TEXACO INC: 2nd Cir. Upholds Discharge Order on Kling et al. Claim
------------------------------------------------------------------
The United States Court of Appeals for the Second Circuit upheld
an Oct. 6, 2011 judgment of the U.S. District Court for the
Southern District of New York (Seibel, J.), affirming an Aug. 3,
2010 order of the United States Bankruptcy Court (Drain, J.),
which (1) found that all claims asserted by Kling Realty Company,
Walet Planting Company, and others against Texaco, Inc., in an
action in Louisiana state court were discharged by the bankruptcy
court's March 23, 1988 order confirming Texaco's Chapter 11 second
amended joint plan of reorganization; (2) directed Kling to
dismiss all such claims; and (3) enjoined Kling from pursuing
those claims.

The Kling parties took an appeal.  In essence, Kling argues on
appeal that the bankruptcy court erred by dismissing its claims
and enjoining it from pursuing claims that Texaco engaged in
tortious conduct by spreading contaminated mud and fluids around
the portion of Kling's property known as Section 27, both after
the date Texaco's bankruptcy petition was filed and after the date
its plan of reorganization was confirmed.  Kling also contends
that the bankruptcy court lacked subject matter jurisdiction to
dismiss its claims arising after the Confirmation Date.

The Appeals Court ruled that, for substantially the reasons
articulated by the district court, the bankruptcy court did not
err in concluding that Kling's tort claims for restoration of
Section 27 arose before the Petition Date and were discharged by
the Confirmation Order.

The appellate case is, KLING REALTY COMPANY, INC., WALET PLANTING
COMPANY, KATHLEEN WALET MEITKAMP, DEANNA CECIL WALET GONDRON,
MERLIN P. WALET, JR., HERMAN CHARLES WALET, CAROLYN MARIE WALET,
ARTHUR STERN, J.D. MIER, SALLY A. MIER, MURIEL O. LEVINSON, ANN C.
MARTINEZ, KATHRYN S. CEJA, BRENDA S. BUXH, DAVID L. STERN, MICHAEL
L. SNUR, CARY S. SOLOMON, AMY F. TILLEY, WILLIAM A. SNUR, DREW M.
LERNER, DOUGLAS P. LERNER, REID S. LERNER, J. LIONEL KLING TRUST,
Appellants, v. TEXACO, INC., Appellee. No. 11-4587-bk (2nd Cir.).

A copy of the Second Circuit's Dec. 19 Summary Order is available
at http://is.gd/2Lv3M4from Leagle.com.  The three-judge panel
consists of Circuit Judges Robert D. Sack, Denny Chin, Raymond J.
Lohier, Jr.


THQ INC: Files for Chapter 11 to Sell to Clearlake
--------------------------------------------------
THQ Inc. on Dec. 19 disclosed that it entered into an Asset
Purchase Agreement with a "stalking horse bidder," affiliates of
Clearlake Capital Group, L.P., to acquire substantially all of the
assets of THQ's operating business, including THQ's four owned
studios and games in development.  The sale will allow THQ to shed
certain legacy obligations and emerge with the strong financial
backing of a new owner with substantial experience in software and
technology.

To facilitate the sale, THQ and its domestic business units have
filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy
Court for the District of Delaware.  The company's foreign
operations, including Canada, are not included in the filings.
The company has obtained commitments from Wells Fargo and
Clearlake for debtor-in possession (DIP) financing of
approximately $37.5 million, subject to Court approval.

THQ will continue operating its business without interruption
during the sale period, subject to Court approval of THQ's first-
day motions. All of the company's studios remain open, and all
development teams continue.  The company remains confident in its
existing pipeline of games.  THQ maintains relationships with some
of the top independent development studios around the globe.  As
part of the sale, the company is seeking approval to assume the
contracts of these studios, and Clearlake will assume these
contracts.

"The sale and filing are necessary next steps to complete THQ's
transformation and position the company for the future, as we
remain confident in our existing pipeline of games, the strength
of our studios and THQ's deep bench of talent," said Brian
Farrell, Chairman and CEO of THQ.  "We are grateful to our
outstanding team of employees, partners and suppliers who have
worked with us through this transition.  We are pleased to have
attracted a strong financial partner for our business, and we hope
to complete the sale swiftly to make the process as seamless as
possible."

According to Jason Rubin, who joined THQ as President last May,
"We have incredible, creative talent here at THQ.  We look forward
to partnering with experienced investors for a new start as we
will continue to use our intellectual property assets to develop
high-quality core games, create new franchise titles, and drive
demand through both traditional and digital channels."

Clearlake has agreed to serve as the "stalking horse bidder" for a
Section 363 sale process, which allows other interested parties to
come forward with competing bids.  Aggregate consideration offered
by Clearlake for the purchase totals approximately $60 million,
including a new $10 million note for the benefit of the company's
creditors. The company is asking the Court for a schedule to
complete the sale process in about 30 days.

Consumers and retailers should see no changes while the company
completes a sale.  The new financing will support business
operations throughout the period.  THQ does not intend to reduce
its workforce as a result of the filing, and employees will
continue to work their usual schedules and receive normal
compensation and benefits, pending customary Court approval.

As is the case after a Chapter 11 filing, THQ expects to receive
notice from NASDAQ informing the company that its shares will be
delisted from the exchange within nine calendar days of
notification.

THQ is being advised by Centerview Partners LLC and FTI Consulting
as its financial advisors and Gibson, Dunn & Crutcher as legal
counsel.  Clearlake is being advised by DLA Piper as legal
counsel.

                   About Clearlake Capital Group

Clearlake Capital Group, L.P. -- http://www.clearlakecapital.com
-- is a private investment firm focused on special situations and
private equity investments such as corporate divestitures,
recapitalizations, buyouts, reorganizations, turnarounds and other
equity investments.

                            About THQ

THQ Inc. (NASDAQ: THQI) -- http://www.thq.com/-- is a worldwide
developer and publisher of interactive entertainment software.
The Company develops its products for all popular game systems,
personal computers, wireless devices and the Internet.
Headquartered in Los Angeles County, California, THQ sells product
through its network of offices located throughout North America
and Europe.

THQ's balance sheet at Sept. 30, 2012, showed $265.41 million in
total assets, $306.58 million in total liabilities and a $41.17
million total stockholders' deficit.

                           *     *     *

Media organization WWE said it is following the developments of
THQ's bankruptcy filing and proposed sale under Section 363 of the
Bankruptcy Code.  The Company anticipates actively participating
within this proceeding.

WWE has a portfolio of businesses that create and deliver original
content 52 weeks a year to a global audience.  WWE is committed to
family friendly entertainment on its television programming, pay-
per-view, digital media and publishing platforms.  WWE programming
is broadcast in more than 145 countries and 30 languages and
reaches more than 600 million homes worldwide.


THQ INC: Proposes Quick Sale; Asks for Jan. 9 Auction
-----------------------------------------------------
THQ Inc. has a deal to sell its video-game development business to
Clearlake Capital Group LP for about $60 million, absent higher
and better offer for the assets.  The bankruptcy judge will
convene a hearing on Jan. 4, 2013 at 10:30 a.m. to consider
approval of the proposed procedures for the sale of substantially
all of the Debtors' assets.

Objections to the auction schedule and the proposed bid
protections for the lead bidder are due Jan. 2.

Samuel M. Greene, a partner at Centerview Partners, which was
engaged by the Debtors in June to find an investor or a buyer,
said Clearlake's proposal in October was to provide a $70 million
capital investment in the Debtors.  But due to a projected
liquidity shortfall in late December, the proposal was converted
from a debt investment into an outright purchase of the Company
for cash consideration that would satisfy the Debtors' secured
debt and administrative/priority claims. Clearlake later improved
its proposal to include a $10 million note payable to the Debtors'
estates.

To maximize the value of the estates, the Debtors are seeking to
conduct a bankruptcy court-sanctioned auction.

The bid procedures contemplate that prospective purchasers must
submit bids by Jan. 8, 2013, and that if, a "qualified bid" in
addition to Clearlake's is received, an auction will be conducted
on Jan. 9.  Upon the selection of a winning bid, the Debtors will
seek approval for the sale no later than Jan. 10.

Clearlake's offer for the business comprises: (a) cash sufficient
to pay secured claims, including the DIP credit facility
(projected balance at $29 million), (b) cash of $6.65 million at
closing, (c) a promissory note in the face amount of $10 million,
which will pay interest only at the rate of 2% per annum.

If Clearlake is not the winning bidder, the Debtors propose to pay
a break-up fee of $1.75 million and expense reimbursement of
$500,000.

                          DIP Financing

Wells Fargo Capital Finance LLC and Clearlake have agreed to
provide the Debtors with postpetition financing.  The DIP facility
will be comprised of (i) an asset based revolving credit facility
of up to $27.5 million of revolving loans, and (ii) a term loan
facility of $10 million.  The revolving credit facility component
of the DIP facility will bear interest at a per annum rate equal
to either LIBOR plus 400 basis points or the prepetition lenders'
Base Rate plus 250 basis points.  The term loan facility will bear
interest at a per annum rate equal to 15.0%.  The DIP facility is
due on Jan. 18, 2013, unless otherwise extended.

The DIP facility increases the availability above the existing
borrowing basis formula by $10 million through the term loan
proceeds.

The Debtors said they need a quick sale of the assets.  The
Debtors' cash flow for the next several months is negative and
they project they will fully exhaust the $10 million additional
term loan capacity being provided by Clearlake through the DIP
credit facility by Jan. 15, 2013.  If the sale does not proceed in
the requested time-frame, the Debtors would not have enough cash
to continue operating after that date, whether or not the DIP
credit facility were extended.

The Debtors' normal business cycle includes periods of negative
cash flow, while they are developing and marketing a game prior to
its actual release, followed by periods of positive cash flow
after the release of a new game.  The Debtors are not scheduled to
release any new games until March 2013.

The bankruptcy judge has granted interim approval of the DIP
financing.  A final hearing on the motion will be held not later
than Jan. 4, 2013.

The company, which lost money for the last five years, disclosed
assets of $204.8 million against debt totaling $248.1 million as
of Dec. 17, 2012.

Wells Fargo, which is owed $20 million a revolving credit, had
declared a default before the bankruptcy and was drawing down some
cash in the company's accounts.

The DIP Lenders are represented by:

       Gregg M. Galardi, Esq.
       DLA PIPER LLP (US)
       1251 Avenue of the Americas
       New York 10020
       E-mail: gregg.galardi@dlapiper.com

          - and -

       Matt Murphy, Esq.
       DLA PIPER LLP (US)
       203 North LaSalle Street, Suite 1900
       Chicago, IL 60601
       E-mail: matt.murphy@dlapiper.com


THQ INC: Case Summary & 40 Largest Unsecured Creditors
------------------------------------------------------
Lead
Debtor: THQ Inc.
        29903 Agoura Road
        Agoura Hills, CA 91301
        fka THQ San Diego
        fka Paradigm Entertainment
        fka Heavy Iron Studios
        fka Incinerator Studios
        fka Helixe
        fka Concrete Games
        fka Sandblast Games, fka Cranky Pants Games
        fka Elephant Entertainment
        fka ValuSoftArcade.com fka SlingDot
        fka Kaos Studios
        fka ValuSoft

Bankruptcy Case No.: 12-13398

Affiliates that simultaneously sought Chapter 11 protection:

     Debtor                                 Case No.
     ------                                 --------
     THQ Digital Studios Phoenix, Inc.      12-13399
     THQ Wireless Inc.                      12-13400
     Volition, Inc.                         12-13401
     Vigil Games, Inc.                      12-13402

Type of Business: THQ Inc. (NASDAQ: THQI) develops and publishes
                  of interactive entertainment software.  The
                  Company develops its products for all popular
                  game systems, personal computers, wireless
                  devices and the Internet.  Headquartered in
                  Los Angeles County, California, THQ sells
                  product through its network of offices located
                  throughout North America and Europe.

                  Web site: http://www.thq.com/

Chapter 11 Petition Date: Dec. 19, 2012

Court: U.S. Bankruptcy Court
       District of Delaware (Delaware)

Judge: Hon. Mary F. Walrath

Debtors'
Counsel:    Jaime Luton Chapman, Esq.
            M. Blake Cleary, Esq.
            Michael R. Nestor, Esq.
            YOUNG CONAWAY STARGATT & TAYLOR, LLP
            1000 West Street, 17th Fl.
            P.O. Box 391
            Wilmington, DE 19899-0951
            Tel: (302) 571-6600
            E-mail: jchapman@ycst.com
                    mbcleary@ycst.com
                    mnestor@ycst.com

                   - and -

            Oscar Garza
            Jeffrey C. Krause
            Gibson, Dunn & Crutcher LLP
            333 South Grand Avenue
            Los Angeles, CA 90071-3197
            Tel: (213) 229-7000
            Fax: (213) 229-7520
            http://www.gibsondunn.com


Debtors'
Financial
Advisors:   FTI CONSULTING

                   - and -

            CENTERVIEW PARTNERS LLC

Debtors'
Claims
Agent:      KURTZMAN CARSON CONSULTANTS
            http://www.kccllc.net/thq

Total Assets: $204,800,000 as of Dec. 17, 2012

Total Liabilities:  $248,100,000 as of Dec. 17, 2012

The petitions were signed by Brian J. Farrell, chief executive
officer.

Debtors' Consolidated List of Their 40 Largest Unsecured
Creditors:

        Entity                     Nature of Claim    Claim Amount
        ------                     ---------------    ------------
Wilmington Trust, N.A.             Notes              $101,902,173
(Indenture Trustee for 5%
Notes due 2014)
Attn: Peter Finkel
50 South Sixth Street
Suite 1290
Minneapolis, MN 55402
Tel: (612) 217-5629
Fax: (612) 217-5651

World Wrestling Entertainment      Trade Debt          $45,076,041
Inc.
Attn: Tina Giello
PO Box 27238
New York, NY 10087-7238
Tel: (203) 352-8637
Fax: (203) 352-8688
E-mail: tina.giello@wwecorp.com

Yukes Co Ltd                       Trade Debt          $17,771,188
Attn: Hirome Furuta
4-45-1 Ebisuyima-cho
Sakai
Osaka, 27 5900985
Tel: (081) 722-2451
E-mail: hiro@yukes.co.jp

Mattel Inc.                        Trade Debt          $12,750,000
Attn: Jeffrey Korchek, Esq.
VP Legal
333 Continental Blvd.
El Segundo, CA 90245
Tel: (310) 252-2000 ext-4229
E-mail: Jeffrey.korcheck@mattel.com

Viacom International Inc.          Trade Debt          $10,000,000
Attn: Ahmad Godfrey
1515 Broadway
New York, NY 10036
Tel: (212) 846-4785
E-mail: ahmad.godfrey@viacom.com

JAKKS Pacific Inc.                  Trade Debt          $4,000,000
Attn: Stephen Bernan
22619 Pacific Coast Highway
Suite 250
Malibu, CA 90265
Tel: (310) 455-6269
Fax: (310) 456-7099
E-mail: jakksgb@aol.com
        stephenb@jakks.com

Microsoft Licensing, Inc.            Trade Debt         $2,911,684
Attn: Richard Hernandez
6100 Neil Road, Suite 210
Reno, NV 89511-1132
Tel: (457) 707-5157
E-mail: richern@microsoft.com

Starcom Mediavest Group Inc.         Trade Debt         $2,628,869
Attn: Soo Chin
35 West Wacker Drive
Chicago, IL 60601
Tel: (312) 220-3535
E-mail: soo.chin@naresources.com

Zuffa, LLC                           Trade Debt         $1,928,772
Attn: Nichole Thompson
2960 West Sahara Ave.
Ste 100
Las Vegas, NV 89102
Tel: (702) 221-4789
Fax: (702) 367-3633
E-mail: ngross@ufc.com

Technicolor Payments                 Trade Debt         $1,663,127
Attn: Chris Manzione
Dept. No 7658
Los Angeles, CA 90088-7658
Tel: (805) 445-4232
Fax: (805) 445-0042
E-mail: techthqpo.thomson.net

Pipeworks Software                   Trade Debt         $1,121,366
Attn: Lindsay Gupton, VP
Studio Head
9 Pasteur, Suite 100
Irvine, CA 92618
Tel: (541) 393-3500
Fax: (541) 393-3501

Sony Pictures Television             Trade Debt           $793,662
Attn: Jaime Cyr
Executive Director, Music
Affairs Group
File 53771
Los Angeles, CA 90074-3771
Tel: (310) 244-7922
Fax: (310) 244-2128
E-mail: Jaime-cyr@spe.sony.com

LucasFilm Ltd                        Trade Debt           $267,105
Attn: Paul Southern
One Letterman Drive, Bldg. B
P.O. BoX 29901
San Francisco, CA 94129-0901
Tel: (415) 623-1928
E-mail: Paul.Southern@lucasfilm.com

Acquia, Inc.                         Trade Debt           $251,758
Attn: Sareth Kang
36 Corporate Dr., Ste 400
Burlington, MA 01803
E-mail: Sareth.Kang@acquia.com

Binari Sonori S.R.L.                  Trade Debt          $244,734
Attn: Andrea Ballista
Viale Fulvio Testi, 11
Cinisello Balsamo
Tel: +39-02-61866-309
E-mail: andrea.ballista@binarisonori.com

Mediavest Worldwide                  Trade Debt           $221,536
Attn: Ty Ferguson
PO Box 11758
Montreal, QC H3C 6V6
E-mail: ty.ferguson@naresources.com

Transavision Limited                 Trade Debt           $184,047
Attn: Eugene Kuchma
8 Samou Street
Nicosia, NC 1086
Tel: 38 004 496 1805
E-mail: eugene.kuchma@gscgame.com

ImagineEngine                        Trade Debt           $165,057
Attn: David G. Mann
9 Pasteur, Suite 100
Irvine, CA 92618
Tel: (949) 698-1500
Fax: (949) 698-1505
E-mail: david@f9e.com

Mosaic Sales Solutions               Trade Debt           $114,370
Attn: Heather Ike
P.O. Box 841678
Irving, TX 75284-1678
Tel: (972) 870-4724
Fax: (972) 870-4603
E-mail: heather.ike@mosaic.com

Frame Machine, LLC                   Trade Debt           $110,364
Attn: Steven Lehrhoff
President
1507 7th Street #600
Santan Monica, CA
90401
Tel: (323) 801-0292
E-mail: slehrhoff@framemachine.tv

Random House, Inc.                    Trade Debt         $100,000
Attn: Lynee Barr
PO Box 120001
Dallas, TX 75312-0919
Tel: (818) 871-8633
E-mail: lbarr@randomhouse.com

Microsoft Ireland Operations Ltd      Trade Debt          $97,534
Attn: Francine Meaden
Atrium Building
Block B
Dublin, DB 18
Tel: +44 118 919 3276
E-mai: a-frmead@xbox.com

MS MCC Highland, LLC                  Facilities/         $91,176
Attn: Grabrielle Vasseur              Overhead
P.O. Box 749951
Los Angeles, CA 90074-9951
E-mail: gmv@mccarthycook.com

Machinima, Inc.                       Trade Debt          $80,755
Attn: Marc Levy
8441 Santa Monica Blvd.
West Hollywood, CA
90069
E-mail: marc.levy@machinima.com

High Voltage Software, Inc.            Trade Debt          $72,000

Workforcelogic LLC                     Trade Debt          $70,826
Attn: Bernadette Hofer
PO Box 534305
Atlanta, GA 30353-4305
E-mail: bhofer@workforcelogic.com

House of Moves                         Trade Debt         $65,467

Rokkan, LLC                            Trade Debt         $62,500
Attn: Chung Ng
176 Grand Street, 2nd Floor
New York, NY 10012
E-mail: chung.ng@rokkan.com

Winking Entertainment (HK)             Trade Debt         $51,975

Lieberman Research Worldwide, Inc.     Trade Debt         $50,000
Attn: Joe Favre
1900 Avenue of the Stars
#1600
Los Angeles, CA 91505
E-mail:  jfavre@lrwonline.com

Media Planning Group USA LLC           Trade Debt         $50,000
Attn: Pat George
195 Broadway
New York, NY 10007
Tel: (646) 587-5133
E-mail: patricia.george@us.mpg.com

Deloitte & Touche LLP                  Trade Debt         $50,000
Attn: Diane Castro
350 South Grand Ave., Ste 200
Los Angeles, CA 90071-3462
E-mail: dicastro@deloitte.com

American International Relocations     Trade Debt         $49,786
Attn: Cindy Mullen-Greer
500 Ross Street 154-0455
Pittsburgh, PA 15250
E-mail: cgreeg@aires.com

NBC Universal Television               Trade Debt         $49,294
Distribution
Attn: Stephanie Van Velsen
Los Angeles, CA 90074-0308
E-mail: Stephanie.vanvelzen@nbcuni.com

Games Workshop Ltd                     Trade Debt         $48,512
Attn: Jon Gillard
Willow Road, Lenton
Nottingham, UK NG7 2WS
E-mail: Jon.gillard@gwplc.com

Electronic Entertainment Design        Trade Debt         $44,000
Attn: Shelli Francoise
2075 Corte Del Nogal, Suite B
Carlsbad, CA 92011
E-mail: sfrancoise@eedar.com

Oxford Realty & Holding LLC            Facilities/        $42,515
Attn: Saul Tawil                       Overhead
57 West 38th St., 7th Floor
New York, NY 10018
E-mail: saul@broadwayexport.com

Technicolor                            Trade Debt         $34,270
Attn: Chris Manzione
280301 Schoolcraft Road
Livonia, MI 48151
E-mail: techthqpo@thomson.net

JCCE-PALOMAR, LLC                      Facilities/         $34,258
Attn: Steve White                      Overhead
P.O. Box 601759
Charlotte, NC 28260-1759
E-mail: swhite@jcce.com

Hammer Creative                        Trade Debt          $32,500
Attn: Randy McKenzie
6311 Romaine Street
Suite 7316
Hollywood, CA 90038
E-mail: mckenzie@hammercreative.com


TIMOTHY BLIXSETH: 9th Cir. Addresses Involuntary Case Venue
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a divided Bankruptcy Appellate Panel for the Ninth
Circuit ruled on the question: if an individual's principal assets
are ownership of two limited liability corporations, what is a
proper venue for an involuntary bankruptcy? Is it the individual's
residence or the state of the incorporation of the LLCs?

The Ninth Circuit BAP ruled that proper venue is the state of
incorporation.

Mr. Rochelle recounts that Montana tax authorities along with
taxing authorities in California and Idaho filed an involuntary
Chapter 7 bankruptcy in April 2011 in Las Vegas against Timothy
Blixseth, the former owner of the bankrupt Yellowstone Mountain
Club LLC. Venue was based on two LLCs incorporated under Nevada
law.  Mr. Blixseth sought to dismiss the involuntary petition,
saying the Nevada venue was improper.  He said he resided in
Washington state and that the two LLCs were holding companies
whose assets weren't in Nevada.

The bankruptcy judge, the report continues, dismissed the
bankruptcy, saying venue was improper because intangible property
either has no location at all or is located where the owner
resides.  Montana taxing authorities appealed to the Bankruptcy
Appellate Panel and won.  The other two states dropped out of the
bankruptcy after Mr. Blixseth paid what they were owed.

According to the report, writing for the majority on the three-
judge panel, U.S. Bankruptcy Judge Jim D. Pappas began with the
proposition that intangible property has no physical location.  He
said governing law from the U.S. Court of Appeals in San Francisco
requires a "common sense, context-specific analysis."  Judge
Pappas determined that Nevada was a proper venue and therefore
reinstated the involuntary bankruptcy.  Judge Pappas said the LLCs
could be deemed located in Nevada because that is where they were
created and is the state under whose laws creditors' remedies are
governed.

The report notes that U.S. Bankruptcy Judge Eileen W. Hollowell
dissented.  Under common law, intangible property is located where
the owner lives, she said.

After the involuntary petition was dismissed, Mr. Blixseth filed
papers asking the bankruptcy judge to compel Montana to reimburse
him for $815,000 he spent in fending off bankruptcy.

The dispute was stayed by the appellate panel pending appeal.

The appeal is State of Montana v. Blixseth (In re Blixseth),
11-1305, 9th U.S. Circuit Bankruptcy Appellate Panel (San
Francisco).

                     About Timothy Blixseth

Tax officials from California, Montana and Idaho on April 5, 2011
filed an involuntary-bankruptcy petition under Chapter 7 against
Timothy Blixseth in Las Vegas, Nevada (Bankr. D. Nev. Case No.
11-15010).  The three states that signed the petition against the
Yellowstone Club co-founder claim they are owed $2.3 million in
back taxes.  A copy of the petition is available for free at
http://bankrupt.com/misc/nvb11-15010.pdf

Mr. Blixseth and his former wife, Edra Blixseth, founded the
Yellowstone Club, near Big Sky, Montana, in 2000 as a ski resort
for millionaires looking for vacation homes.  Members paid
$205 million for 72 properties in 2005 alone.

Bloomberg News, citing a court ruling by U.S. Bankruptcy Judge
Ralph B. Kirscher, says the couple took cash for their personal
use from a $375 million loan arranged by Credit Suisse.  Finances
at the club deteriorated thereafter, and the club eventually went
bankrupt, Judge Kirscher found.  Mr. Blixseth was ordered to pay
$40 million to the club's creditors under a September ruling by
Judge Kirscher.  Mr. Blixseth said he's appealing that judgment.

                     About Edra D. Blixseth

Edra D. Blixseth owns the Porcupine Creek Golf Club in Rancho
Mirage and the Yellowstone Club in Montana.  Ms. Blixseth filed
for Chapter 11 bankruptcy protection on March 26, 2009 (Bankr. D.
Mont. Case No. 09-60452).  Gary S. Deschenes, Esq., at Deschenes &
Sullivan Law Offices assists Ms. Blixseth in her restructuring
efforts.  The Debtor estimated $100 million to $500 million in
assets and $500 million to $1 billion in debts.  The Debtor's case
was converted from a Chapter 11 to a Chapter 7 by Court order
entered May 29, 2009.

                    About Yellowstone Mountain

Located near Big Sky, Montana, Yellowstone Mountain Club LLC --
http://www.theyellowstoneclub.com/-- is a private golf and ski
community with more than 350 members, including Bill Gates and Dan
Quayle.  The Company was founded in 1999.

Yellowstone Club and its affiliates filed for Chapter 11
bankruptcy on Nov. 10, 2008 (Bankr. D. Mont. Case No. 08-61570).
The Company's owner affiliate, Edra D. Blixseth, filed for
Chapter 11 protection on March 27, 2009 (Case No. 09-60452).

In June 2009, the Bankruptcy Court entered an order confirming
Yellowstone's Chapter 11 Plan.  Pursuant to the Plan, CrossHarbor
Capital Partners, LLC, acquired equity ownership in the
reorganized Club for $115 million.

Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green
PLLC represented Yellowstone.  The club hired FTI Consulting Inc.
and Ronald Greenspan as CRO.  The official committee of unsecured
creditors were represented by Parsons, Behle and Latimer, as
counsel, and James H. Cossitt, Esq., at local counsel.  Credit
Suisse, the prepetition first lien lender, was represented by
Skadden, Arps, Slate, Meagher & Flom.


TWG CAPITAL: Seeks Extension to File Creditor-Payment Plan
----------------------------------------------------------
Marie Beaudette at Dow Jones' DBR Small Cap reports that
Indianapolis insurance finance firm TWG Capital Inc. is seeking to
keep control over its Chapter 11 case for another 90 days while it
works to close the sale of its assets.

TWG Capital filed a Chapter 11 petition (Bankr. S.D. Ind. Case No.
12-11019) on Sept. 14, 2012.  Attorneys at Faegre Baker Daniels
LLP, in Indianapolis, serve as counsel to the Debtor.  The Debtor
estimated less than $1 million in assets and at least $1 million
in liabilities.


TRAVELPORT HOLDINGS: Amends 2006 Credit Agreement with UBS
----------------------------------------------------------
Travelport Limited amended and restated its existing credit
facility dated as of Aug. 23, 2006, with UBS AG, Stamford Branch,
as administrative agent and L/C issuer, UBS Loan Finance LLC, as
swing line lender.

The First Lien Credit Agreement, among other things, (i) adds
additional guarantees and collateral from subsidiaries previously
excluded from the collateral and guarantee requirements under the
First Lien Credit Agreement, (ii) amends intercompany transaction
restrictions, and (iii) increases the interest rate payable to
lenders by 25 basis points.

In addition, upon an additional increase of 50 basis points in the
interest rate payable to lenders under the First Lien Credit
Agreement, the First Lien Credit Agreement:

   (i) permits the Company to issue additional junior secured debt
       in an aggregate amount not to exceed the greater of (x)
       $866 million plus the amount of any interest added to the
       principal of the second lien notes in accordance with the
       terms of the Second Lien Indenture described below (less
       any amounts outstanding under (1) the Credit Agreement,
       dated May 8, 2012, among Travelport LLC, as borrower,
       Travelport Limited, as intermediate parent guarantor,
       Waltonville Limited, as parent guarantor, TDS Investor
       (Luxembourg) S.….r.l., as intermediate parent guarantor,
       Credit Suisse AG, as administrative agent and collateral
       agent, and the other lenders party; and

   (2) the Second Lien Indenture, dated Nov. 30, 2011, among
       Travelport LLC, as issuer, Travelport Limited, as parent
       guarantor, Waltonville Limited, as intermediate parent
       guarantor, TDS Investor (Luxembourg) S.a.r.l., as
       intermediate parent guarantor, and Wells Fargo Bank,
       National Association, as trustee and collateral agent) and
       (y) the amount that could be borrowed by us subject to a
       total leverage ratio not to exceed 7.0 to 1.0 (calculated
       on a pro forma basis) and a secured leverage ratio not to
       exceed 5.0 to 1.0 (calculated on a pro forma basis).

A complete copoy of the Form 8-K is available for free at:

                       http://is.gd/htKeX4

                     About Travelport Holdings

Travelport Holdings is the direct parent of Travelport Limited, is
a broad-based business services company and a leading provider of
critical transaction processing solutions to companies operating
in the global travel industry.  With a presence in 160 countries
and approximately 3,500 employees, Travelport is comprised of the
global distribution system (GDS) business, which includes the
Galileo and Worldspan brands and its Airline IT Solutions
business, which hosts mission critical applications and provides
business and data analysis solutions for major airlines.

Travelport also owns approximately 48% of Orbitz Worldwide (NYSE:
OWW), a leading global online travel company.  Travelport is a
private company owned by The Blackstone Group, One Equity
Partners, Technology Crossover Ventures, and Travelport
management.

Travelport Holdings Limited is a holding company with no direct
operations.  Its principal assets are the direct and indirect
equity interests it holds in its subsidiaries, including
Travelport Limited.

Travelport's balance sheet at Sept. 30, 2012, showed $3.35 billion
in total assets, $4.38 billion in total liabilities, and a
stockholders' deficit of $1.02 billion.

                          *     *     *

As reported by the TCR on Oct. 10, 2011, Standard & Poor's Ratings
Services lowered its long-term corporate credit ratings on travel
services provider Travelport Holdings Limited (Travelport
Holdings) and indirect subsidiary Travelport LLC (Travelport) to
'SD' (selective default) from 'CC'.

The downgrades follow the implementation of a capital
restructuring, which was necessary because of the Travelport
group's high leverage, weak liquidity, and the upcoming maturity
of its $693 million (as of end-June 2011) PIK loan in March 2012.
"According to our criteria, we view this restructuring as a
distressed exchange and tantamount to a default (see 'Rating
Implications Of Exchange Offers And Similar Restructurings,
Update,' published May 12, 2009, on RatingsDirect on the Global
Credit Portal)," S&P related.


TRI-VALLEY: Wins More Time to File Chapter 11 Proposal
------------------------------------------------------
Rachel Feintzeig at Dow Jones' DBR Small Cap reports that oil and
natural gas company Tri-Valley Corp. won permission to remain in
control of its bankruptcy case through Feb 1.

                       About Tri-Valley Corp.

Bakersfield, California-based Tri-Valley Corporation (OTQCB: TVLY)
-- http://www.tri-valleycorp.com/-- explores for and produces oil
and natural gas in California and has two exploration-stage gold
properties in Alaska.  It has 21 wells in California and
exploration rights in Alaska.

Tri-Valley and three affiliates filed Chapter 11 bankruptcy
petitions (Bankr. D. Del. Lead Case No. 12-12291) on Aug. 7 with
funding from lenders that require a prompt sale of the business.

K&L Gates LLP serves as bankruptcy counsel.  Attorneys at Landis
Rath & Cobb LLP serve as Delaware and conflicts counsel.  The
Debtors have tapped Epiq Bankruptcy Solutions, LLC, as claims
agent.

The Debtor disclosed assets of $17.6 million and liabilities
totaling $14.1 million.  Former Chairman G. Thomas Gamble, who is
financing the bankruptcy case, is owed $7.2 million on several
secured notes.  There is an unsecured note for $528,000 and
$9.4 million in unsecured debt owing to suppliers.


TRIUS THERAPEUTICS: Expects $4.9MM Proceeds from Stock Sale
-----------------------------------------------------------
Trius Therapeutics, Inc., previously entered into a Common Stock
Purchase Agreement with Terrapin Opportunity, L.P., pursuant to
which the Company may sell Terrapin shares of its common stock.

On Dec. 13, 2012, the Company expects to settle with Terrapin on
the purchase of 1,122,218 shares of the Company's common stock
under the Purchase Agreement at an aggregate purchase price of
$5.0 million.  The Company will receive estimated net proceeds
from the sale of these shares of approximately $4.9 million after
deducting the Company's estimated offering expenses.

                      About Trius Therapeutics

San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) --
http://www.triusrx.com/-- is a biopharmaceutical company focused
on the discovery, development and commercialization of innovative
antibiotics for serious, life-threatening infections.  The
Company's first product candidate, torezolid phosphate, is an IV
and orally administered second generation oxazolidinone being
developed for the treatment of serious gram-positive infections,
including those caused by MRSA.  In addition to the company's
torezolid phosphate clinical program, it is currently conducting
two preclinical programs using its proprietary discovery platform
to develop antibiotics to treat infections caused by gram-negative
bacteria.

In the Form 10-K for the year ended Dec. 31, 2011, the Company
said it has incurred losses since its inception and it anticipates
that it will continue to incur losses for the foreseeable future.
As of Dec. 31, 2011, the Company had an accumulated deficit of
$95.4 million.  The Company has funded, and plan to continue to
fund, its operations from the sale of securities, through research
funding and from collaboration and license payments, including
payments under the Bayer collaboration.  However, the Company has
generated no revenues from product sales to date.

The Company's balance sheet at Sept. 30, 2012, showed
$80.25 million in total assets, $18.90 million in total
liabilities and $61.34 million in total stockholders' equity.


US FOODS: S&P Affirms 'CCC+ Rating on Upsized $975MM Notes
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed the 'CCC+' rating on
Rosemont, Ill.-based US Foods Inc.'s (USF) upsized $975 million
senior unsecured notes, which includes the proposed $175 million
add-on. "The recovery rating on the notes is '6', indicating our
expectation of minimal recovery (0% to 10%) for note holders in
the event of a payment default or bankruptcy. We expect that the
proceeds from the add-on offering, in combination with a modest
amount of cash, will be used to repay about $165 million of USF's
11.25% senior subordinated notes, the related make-whole premium,
and fees. The ratings are subject to change and assume the
transaction is closed on substantially the terms presented to us,"
S&P said.

"All of our other existing ratings on the company, including the
'B' corporate credit rating, remain unchanged. The outlook is
stable. Pro forma for the proposed transaction, total debt
outstanding is about $4.9 billion," S&P said.

"USF's ratings reflect Standard & Poor's analysis that the
company's financial risk profile will remain 'highly leveraged'
for the foreseeable future. This is based on our opinion that the
company has a very aggressive financial policy and significant
debt burden. It is our opinion that the company's gross margin
will remain under pressure because of continued weak demand and
higher expenses, specifically elevated food costs. However, we
expect credit measures to show slight improvement through 2014
thanks to fixed cost reductions and some debt repayment. Over the
next year, we expect adjusted leverage to approach 7x and the
ratio of funds from operations (FFO) to total debt to remain weak
at roughly 8.5%," S&P said.

"Our 'fair' business risk assessment reflects USF's participation
in an intensely competitive, low-margin industry. The company
benefits from its satisfactory market position, relatively stable
historic industry demand, and broad geographic diversification
within the U.S. Nevertheless, the potential for meaningfully
higher food costs next year (stemming from the 2012 drought) is a
key risk factor. If food prices increase significantly, USF's
profitability could fall. This could occur if volume drops because
of fewer people purchasing food away from home, or if food service
distributors are unable to pass through most food-cost inflation
to customers," S&P said.

RATING LIST

Rating unchanged
US Foods Inc.
Corporate credit rating             B/Stable/--
Senior secured                      B-
   Recovery rating                   5

Rating affirmed
US Foods Inc.
Senior unsecured
  $975 mil. 8.5% notes               CCC+
    Recovery rating                  6


VALENCE TECHNOLOGY: Defeats Motion for Official Equity Committee
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports there will be no official shareholders' committee for
Valence Technology Inc.  The U.S. Bankruptcy Court in Austin,
Texas, denied a motion for an equity panel where shareholders'
attorneys' fees would have been paid by the company.  The official
creditors' committee said an equity committee would have been a
"frivolous waste of the debtor's assets."

                     About Valence Technology

Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D.
Tex. Case No. 12-11580) on July 12, 2012, in its home-town in
Austin.  Founded in 1989, Valence develops lithium iron magnesium
phosphate rechargeable batteries.  Its products are used in hybrid
and electric vehicles, as well as hybrid boats and Segway personal
transporters.

The Debtor disclosed debt of $82.6 million and assets of
$31.5 million as of March 31, 2012.  The Debtor disclosed
$24,858,325 in assets and $78,520,831 in liabilities as of the
Chapter 11 filing.  Chairman Carl E. Berg and related entities own
44.4% of the shares.  ClearBridge Advisors, LLC owns 5.5%.

Valence expects to complete its restructuring during 2012.

Judge Craig A. Gargotta presides over the case.  The Company is
being advised by Streusand, Landon & Ozburn, LLP with respect to
bankruptcy matters.  The petition was signed by Robert Kanode,
CEO.

On Aug. 8, 2012, the U.S. Trustee for Region 7 appointed five
creditors to serve on the Official Committee of Unsecured
Creditors of the Debtor.  Brinkman Portillo Ronk, PC, serves as
its counsel.


VENTAS INC: Moody's Affirms '(P)Ba1' Preferred Stock Shelf Rating
-----------------------------------------------------------------
Moody's Investors Service affirmed Ventas Inc.'s senior unsecured
debt ratings at Baa2 and revised the ratings outlook to positive
from stable.

Ratings Rationale

The positive outlook reflects Ventas' growth and success in
integrating key portfolio acquisitions into its overall business
model in recent years. Ventas's health care real estate platform
is deep and broad, encompassing triple-net lease senior housing,
triple-net lease skilled nursing, senior housing operating,
medical office businesses, and long term acute care hospitals. The
size and scale provides Ventas with cost of capital advantages as
it continues to grow.

Ventas has also made significant progress in diversifying its
operators/managers and business model. Kindred Healthcare, which
represented 36% of total NOI at 1Q11 (data used in Moody's last
rating action), is expected to decline to 14% of total NOI in
2013. Moody's expects that no single operator/manager will
represent more than 15% of NOI over the intermediate term. In
addition, Ventas has diversified further into the medical office
business through its 2012 acquisition of Cogdell Spencer. Medical
office buildings, which represented 9% of total NOI at 1Q11, now
represent 17% of total NOI.

Moody's expects other key credit metrics to improve or remain
strong over the near-term. Effective leverage and net debt to
EBITDA were 36% and 5.3x, respectively at 3Q12, and are expected
to remain at similar levels over the intermediate term. Fixed
charge coverage is also strong at 4.7x at 3Q12. Even in a stress
scenario, fixed charge coverage is expected to remain strong.
Moody's notes that it expects Ventas to grow its unencumbered
asset base as secured debt matures.

Ventas' complex legal structure remains a credit concern. From a
structural perspective, Nationwide Health Properties (and its
assets) is a wholly-owned subsidiary of Ventas, Inc. Ventas, Inc.
does not guarantee the unsecured bonds of NHP, however, it remains
a guarantor of the unsecured bonds co-issued by Ventas Realty
Limited Partnership (VRLP) and Ventas Capital Corporation (VCC).

The positive outlook reflects the expectation that VTR will
continue to operate with a conservative capital strategy,
especially given the shift in its business model and its remaining
exposure to reimbursement risks. Moody's also expects Ventas to
maintain net debt to EBITDA at approximately 5.0X on a long-term
basis, even as the REIT grows, and that development and joint
ventures will remain an insignificant component of VTR's balance
sheet.

Moody's stated that a rating upgrade would be predicated upon a
permanent reduction in net debt to EBITDA at approximately 5.0X,
secured debt closer to 10% of gross assets, and unencumbered
assets closer to 70% of gross book assets. Downward rating
pressure could result should net debt to EBITDA increase to 6.0X
and secured debt increase to the mid-to-high teens, both on a
sustained basis. Material operating weakness in its top
tenant/operators translating into fixed charge coverage closer to
2.5X would result in a downgrade. In addition, any added
complexity to the organizational legal structure that would
diminish bondholder protections would also result in negative
ratings pressure.

The following ratings were affirmed with a positive outlook:

  Ventas Realty Limited Partnership -- Senior debt at Baa2;
  senior debt shelf at (P)Baa2; subordinated debt shelf at
  (P)Baa3

  Ventas, Inc. -- Senior debt shelf at (P)Baa3; subordinated debt
  shelf at (P)Ba1; preferred stock shelf at (P)Ba1

  Ventas Capital Corporation -- Senior debt shelf at (P)Baa2;
  subordinated debt shelf at (P)Baa3

  Nationwide Health Properties, Inc. -- Senior unsecured debt at
  Baa2

The last rating action with respect to Ventas, Inc. was on July
12, 2011 when Moody's upgrated Ventas, Inc.'s senior unsecured
debt ratings to Baa2 from Baa3, and at the same time affirmed
Nationwide Health Properties, Inc.'s senior unsecured debt ratings
at Baa2.

Ventas, Inc. is a healthcare real estate investment trust which
owns a diverse portfolio of more than 1,400 assets in 47 states
(including the District of Columbia) and two Canadian provinces.
Healthcare real estate assets include seniors housing communities,
skilled nursing facilities, hospitals, medical office buildings
and other properties. At September 30, 2012, Ventas had $18.4
billion in book assets.

The principal methodology used in this rating was the Global
Rating Methodology for REITs and Other Commercial Property Firms
published in July 2010.


VERTIS HOLDINGS: BDO Consulting Okayed as Committee Advisor
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
the Official Committee of Unsecured Creditors in the Chapter 11
cases of Vertis Holdings, Inc., et al., to retain BDO Consulting,
a division of BDO USA, LLP as its financial advisor.

As reported in the Troubled Company Reporter on Nov. 26, 2012,
BDO is expected to, among other things:

   -- analyze the financial operations of the Debtors pre- and
      postpetition, as necessary;

   -- analyze the financial ramifications of any proposed
      transactions for which the Debtors seek Bankruptcy Court
      approval including, but not limited to, postpetition
      financing, sale of all or a portion of the debtors' assets,
      retention of management or employee incentive and severance
      plans; and

   -- conduct any requested financial analysis including verifying
      the material assets and liabilities of the Debtors, as
      necessary, and their values.

The hourly rates of BDO's personnel are:

         Partners/Managing Directors               $475 - $795
         Directors & Senior Managers               $375 - $525
         Managers                                  $325 - $425
         Seniors                                   $200 - $350
         Staff                                     $150 - $225

                           About Vertis

Vertis Holdings Inc. -- http://www.thefuturevertis.com/--
provides advertising services in a variety of print media,
including newspaper inserts such as magazines and supplements.

Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821),
returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to
sell the business to Quad/Graphics, Inc., for $258.5 million,
subject to higher and better offers in an auction.

As of Aug. 31, 2012, the Debtors' unaudited consolidated financial
statements reflected assets of approximately $837.8 million and
liabilities of approximately $814.0 million.

Bankruptcy Judge Christopher Sontchi presides over the 2012 case.
Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal,
and Cadwalader, Wickersham & Taft LLP.  Quad/Graphics is advised
by Blackstone Advisory Partners, Arnold & Porter LLP and Foley &
Lardner LLP, special counsel for antitrust advice.  Kurtzman
Carson Consultants LLC is the Debtors' claims agent.

Quad/Graphics is a global provider of print and related
multichannel solutions for consumer magazines, special interest
publications, catalogs, retail inserts/circulars, direct mail,
books, directories, and commercial and specialty products,
including in-store signage. Headquartered in Sussex, Wis. (just
west of Milwaukee), the Company has approximately 22,000 full-time
equivalent employees working from more than 50 print-production
facilities as well as other support locations throughout North
America, Latin America and Europe.

Vertis first filed for bankruptcy (Bankr. D. Del. Case No.
08-11460) on July 15, 2008, to complete a merger with American
Color Graphics.  ACG also commenced separate bankruptcy
proceedings.  In August 2008, Vertis emerged from bankruptcy,
completing the merger.

Vertis again filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 10-16170) on Nov. 17, 2010.  The Debtor estimated its
assets and debts of more than $1 billion.  Affiliates also filed
separate Chapter 11 petitions -- American Color Graphics, Inc.
(Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr.
S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case
No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No.
10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and
Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174).  The
bankruptcy court approved the prepackaged Chapter 11 plan on
Dec. 16, 2010, and Vertis consummated the plan on Dec. 21.  The
plan reduced Vertis' debt by more than $700 million or 60%.
Vertis Inc., a Debtor-affiliate disclosed $600,219,555 in assets
and $571,695,687 in liabilities as of the Chapter 11 filing.

GE Capital Corporation, which serves as DIP Agent and Prepetition
Agent, is represented in the 2012 case by lawyers at Winston &
Strawn LLP.  Morgan Stanely Senior Funding Inc., the agent under
the prepetition term loan, and as term loan collateral agent, is
represented by lawyers at White & Case LLP, and Milbank Tweed
Hadley & McCloy LLP.

The Official Committee of Unsecured Creditors is represented by
Cooley LLP as its lead counsel, and Cousins Chipman & Brown, LLP
as its Delaware counsel.  The Committee tapped BDO Consulting, a
division of BDO USA, LLP as its financial advisor.


VERTIS HOLDINGS: Gets Final Order to Use Term Loan Lenders' Cash
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized,
in a final basis, Vertis Holdings, Inc., et al., to use cash
collateral of the prepetition term loan lenders.

As reported in the Troubled Company Reporter on Oct. 15, 2012, the
Debtors asked for authorization to obtain postpetition senior
secured superpriority financing of up to $150 million from a
consortium of lenders led by General Electric Capital Corporation
as administrative agent and collateral agent, and Wells Fargo
Capital Finance LLC.

The Debtors said they have an immediate and critical need to
obtain postpetition financing under the DIP credit facility and to
use cash collateral to, among other things, expeditiously pursue a
value-maximizing sale of substantially all of their assets in
accordance with the timeline required by Quad/Graphics Inc., the
stalking horse buyer.

The Debtors will use a portion of the DIP loan funds to pay in
full, in cash, the outstanding balances of all advances and other
obligations under the Debtors' prepetition revolving credit
facility.  As of the petition date, the Debtors owed roughly
$104.1 million under their prepetition revolving facility and
letters of credit facility with GE and Wells Fargo, including not
less than $88.3 million with respect to the revolving credit
advances.  The repayment is a condition to closing the DIP
facility.

Vertis is also a borrower under a term loan facility with Morgan
Stanely Senior Funding Inc., the agent under the prepetition term
loan, and as term loan collateral agent, entered in December 2010.
As of the petition date, the Debtors owed $386.5 million in term
loans.

GE Capital Markets Inc. serves as lead arranger and book-running
manager; bank of America N.A. serves as co-lead arranger, co-book
running manager, and syndication agent; and Wells Fargo serves as
documentation agent.

The $150 million DIP facility includes a $25 million letter of
credit subfacility and a $25 million swing-line subfacility.  The
facility matures on the earliest of Dec. 31, 2012, although Vertis
may extend the date not more than three times; or the effective
date of a confirmed Chapter 11 plan.

The Lenders' funding commitments are:

     Lender                            Revolving Loan Commitment
     ------                            -------------------------
     General Electric Capital Corp.    $94.28 million, including
                                       $25 million as swing-line
                                       commitment

     Bank of America                   $30 million

     Wells Fargo                       $25.17 million

The final cash collateral order also provides that any of the
prepetition term loan lenders may credit bid on the Debtors'
assets.

As adequate protection from any diminution in value of the
lenders' collateral, the Debtor will grant the lenders,
replacement liens on all of the right, title and interest of the
Debtors in the collateral, and superpriority administrative
expense status, subject to carve out on certain expenses.

Additionally, the Debtors will pay to the prepetition term loan
agents (i) immediately upon entry of the final term loan adequate
protection order, in the form of cash payments equal to all
accrued and unpaid reasonable fee and expenses owing to the
prepetition term loan agents.

A copy of the terms of the final order is available for free at
http://bankrupt.com/misc/VERTISHOLDINGS_CC_finalorder.pdf

                           About Vertis

Vertis Holdings Inc. -- http://www.thefuturevertis.com/--
provides advertising services in a variety of print media,
including newspaper inserts such as magazines and supplements.

Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821),
returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to
sell the business to Quad/Graphics, Inc., for $258.5 million,
subject to higher and better offers in an auction.

As of Aug. 31, 2012, the Debtors' unaudited consolidated financial
statements reflected assets of approximately $837.8 million and
liabilities of approximately $814.0 million.

Bankruptcy Judge Christopher Sontchi presides over the 2012 case.
Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal,
and Cadwalader, Wickersham & Taft LLP.  Quad/Graphics is advised
by Blackstone Advisory Partners, Arnold & Porter LLP and Foley &
Lardner LLP, special counsel for antitrust advice.  Kurtzman
Carson Consultants LLC is the Debtors' claims agent.

Quad/Graphics is a global provider of print and related
multichannel solutions for consumer magazines, special interest
publications, catalogs, retail inserts/circulars, direct mail,
books, directories, and commercial and specialty products,
including in-store signage. Headquartered in Sussex, Wis. (just
west of Milwaukee), the Company has approximately 22,000 full-time
equivalent employees working from more than 50 print-production
facilities as well as other support locations throughout North
America, Latin America and Europe.

Vertis first filed for bankruptcy (Bankr. D. Del. Case No.
08-11460) on July 15, 2008, to complete a merger with American
Color Graphics.  ACG also commenced separate bankruptcy
proceedings.  In August 2008, Vertis emerged from bankruptcy,
completing the merger.

Vertis again filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 10-16170) on Nov. 17, 2010.  The Debtor estimated its
assets and debts of more than $1 billion.  Affiliates also filed
separate Chapter 11 petitions -- American Color Graphics, Inc.
(Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr.
S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case
No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No.
10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and
Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174).  The
bankruptcy court approved the prepackaged Chapter 11 plan on
Dec. 16, 2010, and Vertis consummated the plan on Dec. 21.  The
plan reduced Vertis' debt by more than $700 million or 60%.
Vertis Inc., a Debtor-affiliate disclosed $600,219,555 in assets
and $571,695,687 in liabilities as of the Chapter 11 filing.

GE Capital Corporation, which serves as DIP Agent and Prepetition
Agent, is represented in the 2012 case by lawyers at Winston &
Strawn LLP.  Morgan Stanely Senior Funding Inc., the agent under
the prepetition term loan, and as term loan collateral agent, is
represented by lawyers at White & Case LLP, and Milbank Tweed
Hadley & McCloy LLP.

The Official Committee of Unsecured Creditors is represented by
Cooley LLP as its lead counsel, and Cousins Chipman & Brown, LLP
as its Delaware counsel.  The Committee tapped BDO Consulting, a
division of BDO USA, LLP as its financial advisor.


VERTIS HOLDINGS: Cooley LLP Approved as Committee's Lead Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Vertis Holdings, Inc., et al., to retain Cooley LLP as
its lead counsel.

As reported in the Troubled Company Reporter on Nov. 26, 2012,
Jay R. Indyke, a member of Cooley, told the Court that the hourly
rates of Cooley's personnel are:

         Jay R. Indyke, partner               $895
         RichardS. Kanowitz, partner          $795
         Jeffrey L. Cohen, partner            $660
         Seth Van Aalten Associate            $630
         Michael A. Klein Associate           $630
         Dana S. Katz Associate               $445
         Robert Winning Associate             $395
         Rebecca Goldstein Paralegal          $255

To the best of the Committee's knowledge, Colley represents no
interest adverse to the Committee, the Debtors, their estates or
any parties-in-interest.

                           About Vertis

Vertis Holdings Inc. -- http://www.thefuturevertis.com/--
provides advertising services in a variety of print media,
including newspaper inserts such as magazines and supplements.

Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821),
returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to
sell the business to Quad/Graphics, Inc., for $258.5 million,
subject to higher and better offers in an auction.

As of Aug. 31, 2012, the Debtors' unaudited consolidated financial
statements reflected assets of approximately $837.8 million and
liabilities of approximately $814.0 million.

Bankruptcy Judge Christopher Sontchi presides over the 2012 case.
Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal,
and Cadwalader, Wickersham & Taft LLP.  Quad/Graphics is advised
by Blackstone Advisory Partners, Arnold & Porter LLP and Foley &
Lardner LLP, special counsel for antitrust advice.  Kurtzman
Carson Consultants LLC is the Debtors' claims agent.

Quad/Graphics is a global provider of print and related
multichannel solutions for consumer magazines, special interest
publications, catalogs, retail inserts/circulars, direct mail,
books, directories, and commercial and specialty products,
including in-store signage. Headquartered in Sussex, Wis. (just
west of Milwaukee), the Company has approximately 22,000 full-time
equivalent employees working from more than 50 print-production
facilities as well as other support locations throughout North
America, Latin America and Europe.

Vertis first filed for bankruptcy (Bankr. D. Del. Case No.
08-11460) on July 15, 2008, to complete a merger with American
Color Graphics.  ACG also commenced separate bankruptcy
proceedings.  In August 2008, Vertis emerged from bankruptcy,
completing the merger.

Vertis again filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 10-16170) on Nov. 17, 2010.  The Debtor estimated its
assets and debts of more than $1 billion.  Affiliates also filed
separate Chapter 11 petitions -- American Color Graphics, Inc.
(Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr.
S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case
No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No.
10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and
Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174).  The
bankruptcy court approved the prepackaged Chapter 11 plan on
Dec. 16, 2010, and Vertis consummated the plan on Dec. 21.  The
plan reduced Vertis' debt by more than $700 million or 60%.
Vertis Inc., a Debtor-affiliate disclosed $600,219,555 in assets
and $571,695,687 in liabilities as of the Chapter 11 filing.

GE Capital Corporation, which serves as DIP Agent and Prepetition
Agent, is represented in the 2012 case by lawyers at Winston &
Strawn LLP.  Morgan Stanely Senior Funding Inc., the agent under
the prepetition term loan, and as term loan collateral agent, is
represented by lawyers at White & Case LLP, and Milbank Tweed
Hadley & McCloy LLP.

The Official Committee of Unsecured Creditors is represented by
Cooley LLP as its lead counsel, and Cousins Chipman & Brown, LLP
as its Delaware counsel.  The Committee tapped BDO Consulting, a
division of BDO USA, LLP as its financial advisor.


VERTIS HOLDINGS: Cousins Okayed as Committee's Delaware Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
The Official Committee of unsecured Creditors in the Chapter 11
cases of Vertis Holdings, Inc., et al., to retain Cousins Chipman
& Brown, LLP as its Delaware counsel.

                       About Vertis Holdings

Vertis Holdings Inc. -- http://www.thefuturevertis.com/--
provides advertising services in a variety of print media,
including newspaper inserts such as magazines and supplements.

Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821),
returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to
sell the business to Quad/Graphics, Inc., for $258.5 million,
subject to higher and better offers in an auction.

As of Aug. 31, 2012, the Debtors' unaudited consolidated financial
statements reflected assets of approximately $837.8 million and
liabilities of approximately $814.0 million.

Bankruptcy Judge Christopher Sontchi presides over the 2012 case.
Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal,
and Cadwalader, Wickersham & Taft LLP.  Quad/Graphics is advised
by Blackstone Advisory Partners, Arnold & Porter LLP and Foley &
Lardner LLP, special counsel for antitrust advice.  Kurtzman
Carson Consultants LLC is the Debtors' claims agent.

Quad/Graphics is a global provider of print and related
multichannel solutions for consumer magazines, special interest
publications, catalogs, retail inserts/circulars, direct mail,
books, directories, and commercial and specialty products,
including in-store signage. Headquartered in Sussex, Wis. (just
west of Milwaukee), the Company has approximately 22,000 full-time
equivalent employees working from more than 50 print-production
facilities as well as other support locations throughout North
America, Latin America and Europe.

Vertis first filed for bankruptcy (Bankr. D. Del. Case No.
08-11460) on July 15, 2008, to complete a merger with American
Color Graphics.  ACG also commenced separate bankruptcy
proceedings.  In August 2008, Vertis emerged from bankruptcy,
completing the merger.

Vertis again filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 10-16170) on Nov. 17, 2010.  The Debtor estimated its
assets and debts of more than $1 billion.  Affiliates also filed
separate Chapter 11 petitions -- American Color Graphics, Inc.
(Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr.
S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case
No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No.
10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and
Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174).  The
bankruptcy court approved the prepackaged Chapter 11 plan on
Dec. 16, 2010, and Vertis consummated the plan on Dec. 21.  The
plan reduced Vertis' debt by more than $700 million or 60%.
Vertis Inc., a Debtor-affiliate disclosed $600,219,555 in assets
and $571,695,687 in liabilities as of the Chapter 11 filing.

GE Capital Corporation, which serves as DIP Agent and Prepetition
Agent, is represented in the 2012 case by lawyers at Winston &
Strawn LLP.  Morgan Stanely Senior Funding Inc., the agent under
the prepetition term loan, and as term loan collateral agent, is
represented by lawyers at White & Case LLP, and Milbank Tweed
Hadley & McCloy LLP.

The Official Committee of Unsecured Creditors is represented by
Cooley LLP as its lead counsel, and Cousins Chipman & Brown, LLP
as its Delaware counsel.  The Committee tapped BDO Consulting, a
division of BDO USA, LLP as its financial advisor.




VITRO SAB: New Strategy May Persuade Bondholders to Back Off
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Vitro SAB may have hatched a strategy to achieve
ultimate victory over U.S. bondholders attempting to overturn the
glassmaker's bankruptcy reorganization approved this year by a
court in Mexico.

The report notes that during the past month, Vitro sustained three
defeats in U.S. courts inflicted by holders of some of the $1.2
billion in defaulted bonds.  In late November, the U.S. Court of
Appeals in New Orleans upheld the bankruptcy court and ruled that
Vitro's Mexican plan couldn't be enforced in the U.S.

Bondholders' second victory came a few days later, when a
bankruptcy judge ruled that several Vitro subsidiaries should be
in bankruptcy involuntarily in the U.S. Last week, the appeals
court dissolved an injunction and allowed bondholders to attempt
to collect judgments on the defaulted bonds.

The report relates that the new strategy announced this week may
turn defeat into victory for Vitro.  If the strategy plays out as
designed, Vitro will have money judgments against bondholders
offsetting creditors' success in persuading U.S. courts not to
enforce the Mexican reorganization plan in the U.S.

According to the report, Vitro said this week that it began the
process of recovering as much as $1.59 billion in damages against
bondholders who filed unsuccessful involuntary bankruptcies in
Mexico against the company and 17 subsidiaries.  If Vitro
succeeds, the company said it has the right to recover the damage
award from new bonds and money set aside for the dissidents under
the Mexican plan.  If Vitro wins an award greater than the
bondholders' distributions, bondholders' problems mount.  U.S.
law, like Mexican law, contains provisions where a company that
defeats an involuntary bankruptcy can obtain damages, sometimes
including punitive damages.  If a Mexican court assesses damages,
it's not clear that a U.S. court would refuse to enforce the
judgment, given the similarity of the two countries' laws.

Vitro, the report discloses, said it will pursue damages against
bondholders Knighthead Master Fund LP, Brookville Horizons Fund LP
and Davidson Kempner Distressed Opportunities Fund LP.  If
bondholders have agreements to share costs, Vitro said it would
also pursue damages from Aurelius Capital Management LP and
Elliott Management Corp.

Mr. Rochelle points out that Vitro and bondholders have so far
shown no inclination to settle, even though the bankruptcy court
in Dallas required both sides to conduct talks.  Future weeks may
see bondholders taking judgments around the world attempting to
freeze accounts receivable owing to Vitro.  At the same time,
Vitro may be pressing for large monetary awards against
bondholders.  Consequently, bondholders must hope to succeed in
defeating Vitro's efforts to obtain a significant damage award in
Mexico.

The appeal in the Circuit Court is Vitro SAB de CV v. Ad Hoc Group
of Vitro Noteholders (In re Vitro SAB de CV), 12-10689, U.S. Court
of Appeals for the Fifth Circuit (New Orleans).

                          About Vitro SAB

Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV:
VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases
Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global
glass producer, serving the construction and automotive glass
markets and glass containers needs of the food, beverage, wine,
liquor, cosmetics and pharmaceutical industries.

Vitro is the largest manufacturer of glass containers and flat
glass in Mexico, with consolidated net sales in 2009 of MXN23,991
million (US$1.837 billion).

Vitro defaulted on its debt in 2009, and sought to restructure
around US$1.5 billion in debt, including US$1.2 billion in notes.
Vitro launched an offer to buy back or swap US$1.2 billion in
debt from bondholders.  The tender offer would be consummated
with a bankruptcy filing in Mexico and Chapter 15 filing in the
United States.  Vitro said noteholders would recover as much as
73% by exchanging existing debt for cash, new debt or convertible
bonds.

            Concurso Mercantil & Chapter 15 Proceedings

Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a
pre-packaged Concurso Plan in the Federal District Court for
Civil and Labor Matters for the State of Nuevo Leon, commencing
its voluntary concurso mercantil proceedings -- the Mexican
equivalent of a prepackaged Chapter 11 reorganization.  Vitro SAB
also commenced parallel proceedings under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan
on Dec. 13, 2010, to seek U.S. recognition and deference to its
bankruptcy proceedings in Mexico.

Early in January 2011, the Mexican Court dismissed the Concurso
Mercantil proceedings.  But an appellate court in Mexico
reinstated the reorganization in April 2011.  Following the
reinstatement, Vitro SAB on April 14, 2011, re-filed a petition
for recognition of its Mexican reorganization in U.S. Bankruptcy
Court in Manhattan (Bankr. S.D.N.Y. Case No. 11-11754).

The Vitro parent received sufficient acceptances of its
reorganization by using the US$1.9 billion in debt owing to
subsidiaries to vote down opposition by bondholders.  The holders
of US$1.2 billion in defaulted bonds opposed the Mexican
reorganization plan because shareholders could retain ownership
while bondholders aren't being paid in full.

Vitro announced in March 2012 that it has implemented the
reorganization plan approved by a judge in Monterrey, Mexico.

In the present Chapter 15 case, the Debtor seeks to block any
creditor suits in the U.S. pending the reorganization in Mexico.

                      Chapter 11 Proceedings

A group of noteholders opposed the exchange -- namely Knighthead
Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc.,
Davidson Kempner Distressed Opportunities Fund LP, and Brookville
Horizons Fund, L.P.  Together, they held US$75 million, or
approximately 6% of the outstanding bond debt.  The Noteholder
group commenced involuntary bankruptcy cases under Chapter 11 of
the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D.
Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010.

Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation
counsel to analyze the potential rights that Vitro may exercise
in the United States against the ad hoc group of dissident
bondholders and its advisors.

A larger group of noteholders, known as the Ad Hoc Group of Vitro
Noteholders -- comprised of holders, or investment advisors to
holders, which represent approximately US$650 million of the
Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not
among the Chapter 11 petitioners, although the group has
expressed concerns over the exchange offer.  The group says the
exchange offer exposes Noteholders who consent to potential
adverse consequences that have not been disclosed by Vitro.  The
group is represented by John Cunningham, Esq., and Richard
Kebrdle, Esq. at White & Case LLP.

A bankruptcy judge in Fort Worth, Texas, denied involuntary
Chapter 11 petitions filed against four U.S. subsidiaries.  On
April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro
America LLC and three other U.S. subsidiaries -- that were
subject to the involuntary petitions into voluntary Chapter 11.
The Texas Court on April 21 denied involuntary petitions against
the eight U.S. subsidiaries that didn't consent to being in
Chapter 11.

Kurtzman Carson Consultants is the claims and notice agent to
Vitro America, et al.  Alvarez & Marsal North America LLC, is the
Debtors' operations and financial advisor.

The official committee of unsecured creditors appointed in the
Chapter 11 cases of Vitro America, et al., has selected Sarah
Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq.,
and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP,
in New York, as counsel.  Blackstone Advisory Partners L.P.
serves as financial advisor to the Committee.

The U.S. Vitro companies sold their assets to American Glass
Enterprises LLC, an affiliate of Sun Capital Partners Inc., for
US$55 million.

U.S. subsidiaries of Vitro SAB are having their cases converted
to liquidations in Chapter 7, court records in January 2012 show.
In December, the U.S. Trustee in Dallas filed a motion to convert
the subsidiaries' cases to liquidations in Chapter 7.  The
Justice Department's bankruptcy watchdog said US$5.1 million in
bills were run up in bankruptcy and hadn't been paid.

On June 13, 2012, U.S. Bankruptcy Judge Harlin "Cooter" Hale in
Dallas entered a ruling that precluded Vitro from enforcing
its Mexican reorganization plan in the U.S.  Vitro's appeal is
pending.

In November, the U.S. Court of Appeals Judge Carolyn King ruled
that Vitro SAB won't be permitted to enforce its bankruptcy
reorganization plan in the U.S.  She said that Vitro "has not
shown that there exist truly unusual circumstances necessitating
the release" preventing bondholders from suing subsidiaries.


VOYAGEUR ACADEMY: S&P Affirms 'BB' Rating on $17.4MM Revenue Bonds
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook to positive
from stable and affirmed its 'BB' long-term rating on the Michigan
Finance Authority's $17.4 million series 2011 public school
academy limited obligation revenue bonds issued for Voyageur
Academy (Voyageur).

"The outlook revision reflects our view of the school's solid
demand profile, growing enrollment, robust liquidity, and
relatively strong coverage levels in its general fund," said
Standard & Poor's credit analyst Avanti Paul.

The 'BB' rating reflects S&P's view of the academy's:

-- Solid operating liquidity of approximately 96 days' cash on
    hand;

-- Rapidly improving and above-average aggregate test scores
    compared with state and local district results;

-- High college attendance rate, solid niche, and significant
    student demand;

-- Good relationship with the charter authorizer, Ferris State
    University, with two extensions and one successful charter
    renewal; and

-- Full faith and credit pledge to appropriate funds annually in
    support of debt service through a state aid pledge agreement.

"Of the approximately $17.4 million in proceeds from the series
2011 bond issuance, $1.9 million was used to reimburse the academy
for spending associated with the acquisition of property across
the street from its elementary school, and the remaining proceeds
were used to construct a two-story academic facility for the
middle and high schools on the newly acquired land," S&P said.


WARNER MUSIC: Incurs $112 Million Net Loss in Fiscal 2012
---------------------------------------------------------
Warner Music Group Corp. filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing
a net loss attributable to the Company of $112 million on $2.78
billion of revenue for the fiscal year ended Sept. 30, 2012,
compared with a net loss attributable to the Company of $31
million on $556 million of revenue for the period from July 20,
2011, through Sept. 30, 2011.

For the period from Oct. 1, 2012, through July 19, 2011, Warner
Music incurred a net loss attributable to the Company of $174
million on $2.31 billion of revenue, compared with a net loss
attributable to the Company of $143 million on $2.98 billion of
revenue for the fiscal year ended Sept. 30, 2010.

The Company's balance sheet at Sept. 30, 2012, showed $5.27
billion in total assets, $4.33 billion in total liabilities and
$944 million in total equity.

"We had a very productive year.  Warner Music Group performed well
and is positioned to capitalize on the industry's more stable
recent trends," said Stephen Cooper, Warner Music Group's CEO.
"Among our important achievements, we grew global digital and
physical Recorded Music sales on an aggregate basis, for the
quarter and the fiscal year."

"We improved Free Cash Flow significantly for both the quarter and
the full fiscal year, and we nearly doubled our cash balance to
$302 million at September 30th - up by $148 million for the fiscal
year," added Brian Roberts, Warner Music Group's Executive Vice
President and CFO.

A copy of the Form 10-K is available for free at:

                        http://is.gd/hgyQQo

                      About Warner Music Group

Based in New York, Warner Music Group Corp. (NYSE: WMG)
-- http://www.wmg.com/-- was formed by a private equity
consortium of investors on Nov. 21, 2003.  The Company is the
direct parent of WMG Holdings Corp., which is the direct parent of
WMG Acquisition Corp.  WMG Acquisition Corp. is one of the world's
major music-based content companies and the successor to
substantially all of the interests of the recorded music and music
publishing businesses of Time Warner Inc.

The Company classifies its business interests into two fundamental
operations: Recorded Music and Music Publishing.  The Company's
Recorded Music business primarily consists of the discovery and
development of artists and the related marketing, distribution and
licensing of recorded music produced by such artists.  The
Company's Music Publishing operations include Warner/Chappell, its
global Music Publishing company, headquartered in New York with
operations in over 50 countries through various subsidiaries,
affiliates and non-affiliated licensees.

In May 2011, Warner Music Group Corp. and Access Industries, the
U.S.-based industrial group, announced the execution of a
definitive merger agreement under which Access Industries will
acquire WMG in an all-cash transaction valued at $3.3 billion.
The purchase includes WMG's entire recorded music and music
publishing businesses.

On July 20, 2011, the Company notified the New York Stock
Exchange, Inc., of its intent to remove the Company's common stock
from listing on the NYSE and requested that the NYSE file with the
SEC an application on Form 25 to report the delisting of the
Company's common stock from the NYSE.  On July 21, 2011, in
accordance with the Company's request, the NYSE filed the Form 25
with the SEC in order to provide notification of that delisting
and to effect the deregistration of the Company's common stock
under Section 12(b) of the Securities Exchange Act of 1934, as
amended.  On August 2, 2011, the Company filed a Form 15 with the
SEC in order to provide notification of a suspension of its duty
to file reports under Section 15(d) of the Exchange Act.  The
Company continues to file reports with the SEC pursuant to the
Exchange Act in accordance with certain covenants contained in the
instruments governing the Company's outstanding indebtedness.

The Company reported a net loss of $60 million on $1.40 billion of
revenue for the six months ended March 31, 2012.  The Company
reported a net loss of $206 million on $2.86 billion of revenue
for the combined 12 months ended Sept. 30, 2011, following a net
loss of $145 million on $2.98 billion of revenue for the fiscal
year ended Sept. 30, 2010.


WASHINGTON MUTUAL: Court Rejects Oregon Revenue Department's Claim
------------------------------------------------------------------
Bankruptcy Judge Mary F. Walrath sustained the Objection of WMI
Liquidating Trust, as successor in interest to Washington Mutual,
Inc. and WMI Investment Corp., to the proof of claim filed by the
Oregon Department of Revenue.

In 2008, Oregon conducted an audit of WMI and certain of its
subsidiaries.  By letter dated Nov. 12, 2008, Oregon asserted that
additional corporate excise taxes, penalties, and interest were
due by WMI and its subsidiaries for tax years 2002 through 2006.
On March 17, 2009, WMI and Oregon attended an informal conference
at which WMI contested the results of the Oregon audit. On Oct. 8,
2009, Oregon's positions with respect to each of the audit issues
was upheld and a notice of assessment was issued.  On Jan. 6,
2010, WMI timely filed a written appeal from the Notice of
Assessment, which appeal remains pending.

In the interim, Oregon filed a proof of claim in the Debtors'
chapter 11 cases, pursuant to which Oregon sought payment of
$29,381,722.91 for corporate excise taxes, interest, and penalties
related to the Taxable Period.  The Debtors objected to the claim
on the basis that Oregon sought payment for excise taxes owed by
entities other than the Debtors.

Oregon responded that WMI is jointly and severally liable for the
excise tax obligations of the WMB Entities under Oregon law.
Thereafter, Oregon filed an amended claim (in the same amount as
the original claim).  The Debtors objected to the amended claim,
asserting that the tax was unconstitutional because WMI lacked a
substantial nexus with the State of Oregon.

Alternatively, WMI asserted that if the tax is constitutionally
permissible, the amount of the claim should be zero.

In its Seventh Amended Plan of Reorganization, the Debtors
designated a liquidating trust to administer the liquidating trust
assets and distribute the proceeds thereof.  On Feb. 24, 2012, the
Plan was confirmed and the Trust was formed.  On Sept. 13, 2012,
the Trust, as successor in interest to the Debtors, filed its
memorandum of law in support of the Debtors' objection to Oregon's
claim.

The Court said it will sustain the Trust's Objection to Oregon's
claim on the bases that it violates the Due Process and Commerce
Clauses of the U.S. Constitution.

A copy of the Court's Dec. 19, 2012 Opinion is available at
http://is.gd/2BkKdafrom Leagle.com.


WESTERN REFINING: Moody's Hikes Corp. Family Rating to 'B1'
-----------------------------------------------------------
Moody's Investors Service upgraded Western Refining, Inc.'s
Corporate Family Rating (CFR) to B1 from B2 and the company's
senior secured note rating to B1 from B3. The rating outlook was
changed to stable from positive.

"The upgrade of the CFR to B1 reflects Western's significant
leverage reduction, reducing its debt by $567 million over the
past four quarters, as well as its strong profitability and free
cash flow generation, " commented Arvinder Saluja, Moody's
Analyst.

Upgrades:

  Issuer: Western Refining, Inc.

     Probability of Default Rating, Upgraded to B1 from B2

     Corporate Family Rating, Upgraded to B1 from B2

     $325 million Senior Secured Notes, Upgraded to B1 (LGD3,
     46%) form B3 (LGD4, 58%)

     Speculative Grade Liquidity Rating, Upgraded to SGL-1 from
     SGL-2

Outlook Actions:

    Outlook, Changed To Stable From Positive

Ratings Rationale

The upgrade to B1 CFR is supported by the company's leverage,
strong profitability and liquidity, and free cash flow generation
due to its mid-continent location with access to low priced
feedstock crude oil in the current price environment. The CFR is
constrained by a modest level of asset diversification with the El
Paso refinery providing approximately 84% of consolidated
throughput capacity and the majority of EBITDA. The CFR also
reflects geographic concentration, small scale, and the inherent
risk of disproportionate dependence on a single asset.

The B1 secured note ratings reflect both the overall probability
of default of Western, to which Moody's assigns a PDR of B1, and a
loss given default of LGD3-46%. The senior secured notes have a
first lien against the Western's PP&E, while the credit facility
has a first lien on working capital assets. As a result of the
notes having discrete assets as collateral and Moody's view that
the refineries, despite inherently being illiquid assets, would
provide value for the note holders even in an event of distress,
the senior secured notes are rated in line with the CFR.

The SGL-1 reflects strong liquidity through 2013. At September 30,
Western had $510 million of cash and about $350 million of
availability under the asset based credit facility, which matures
in 2016. Moody's anticipates that the company will generate free
cash flow through the end of 2013. The size of the borrowing base
under the asset based credit facility is driven by the value of
inventory and receivables and is therefore sensitive to oil and
refined product prices. As of September 30, the credit facility
had a borrowing base of $646.6 million, with $1 billion in total
commitments. The sole financial covenant under the credit facility
is a minimum fixed charge coverage ratio of at least 1.0x, which
only applies when availability under the facility drops below $50
million or 12.5% of the borrowing base (whichever is greater). As
of September 30, Western's fixed charge coverage ratio was 5.12x
and Moody's anticipates that the company will be well within
compliance with this covenant through the second quarter of 2013.
There are no debt maturities until June 15, 2014 when the $215
million convertible notes mature. Substantially all of Western's
assets are pledged as security under the credit facility which
limits the extent to which asset sales could provide a source of
additional liquidity.

An upgrade is unlikely given Western's current scale and asset
concentration. However, Moody's could consider an upgrade if there
is a material improvement in operational diversity and scale that
is funded conservatively. Moody's could downgrade the ratings if
there is an unexpectedly severe and prolonged deterioration in
sector conditions, leverage increases materially, or if the
company does not maintain adequate cash balances to support good
liquidity and to counter the risk of prolonged unplanned downtime.

The principal methodology used in rating Western Refining, Inc.
was the Global Refining and Marketing 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.

Western Refining, Inc. is an independent refining and marketing
company headquartered in El Paso, Texas.


WJO INC: Can Hire Roberto Ponziano as Special Counsel
-----------------------------------------------------
The Chapter 11 Trustee of WJO, Inc. sought and obtained permission
from the U.S. Bankruptcy Court to employ Roberto B. Ponziano as
special counsel to continue with its prosecution of the so-called
MVA cases and future MVA Cases that maybe assigned to Mr. Ponziano
by the Chapter 11 Trustee.  The Chapter 11 trustee attests that
counsel is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.

                      About WJO Inc.

Bristol, Pennsylvania-based WJO, Inc., operates six family
practices located in Newtown, Bristol, Bensalem, Bustleton, South
Philadelphia, and Bethlehem, Pennsylvania and consists of Board
Certified Osteopathic Physicians specializing in Family Medicine.
Prior to the petition date, and to allow the Company to
restructure effectively, HyperOx Inc., HyperOx I, LP, HyperOx
III, LP, and East Coast TMR, Inc., were merged into WJO.

WJO filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa.
Case No. 10-19894) on Nov. 15, 2010.  The Debtor disclosed
$19,923,802 in assets and $6,805,255 in liabilities as of the
Chapter 11 filing.

Holly Elizabeth Smith, Esq., and Thomas Daniel Bielli, Esq., at
Ciardi Ciardi & Astin, P.C., serve as the Debtor's bankruptcy
counsel.  Pond Lehocky Stern Giordano serves as the Debtor's
special counsel to represent it in worker's compensation
proceedings pertaining to the Therapeutic Magnetic Resonance
treatments.  Patrick Yun serves as the Debtor's financial advisor.
Attorneys at Keifer & Tsarouhis LLP serve as counsel to the
official committee of unsecured creditors.  ParenteBeard LLC
serves as the Committee's accountant and financial advisor.

The United States Trustee has appointed David Knowlton as patient
care ombudsman in the case.  The Ombudsman is represented in the
case by Karen Lee Turner, Esq., at Eckert Seamans Cherin &
Mellott, LLC, as counsel.

Tristate Capital Bank, the cash collateral lender, is represented
in the case by lawyers at Benesch Friedlander Coplan & Aronoff
LLP.

On July 3, 2012, Roberta A. DeAngelis, U.S. Trustee for Region 3,
obtained permission from the Hon. Jean K. Fitzsimon of the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania to
appoint Alfred T. Giuliano as Chapter 11 trustee of the bankruptcy
estate of WJO, Inc.  Maschmeyer Karalis P.C. serves as the Chapter
11 Trustee's general bankruptcy counsel.


WJO INC: Patient Care Ombudsman to Step Down
--------------------------------------------
David L. Knowlton, the duly appointed Patient Care Ombudsman, has
asked the U.S. Bankruptcy Court to terminate the appointment of
the Ombudsman from any other obligations and responsibilities in
connection with WJO Inc.'s bankruptcy case.

The Ombudsman said in a November filing that, at the current stage
in the Debtor's case, the Ombudsman is no longer necessary to
protect patients.  As noted in a third report dated Sept. 15,
2012, the Ombudsman has addressed the entire patient complaints of
which he was aware.  In addition, the Ombudsman has not received
any patient complaints regarding quality care and saw no cause for
concern in this regard.

In the light of the appointment of the Chapter 11 Trustee, the
Ombudsman said he is no longer necessary to protect the patients.

                      About WJO Inc.

Bristol, Pennsylvania-based WJO, Inc., operates six family
practices located in Newtown, Bristol, Bensalem, Bustleton, South
Philadelphia, and Bethlehem, Pennsylvania and consists of Board
Certified Osteopathic Physicians specializing in Family Medicine.
Prior to the petition date, and to allow the Company to
restructure effectively, HyperOx Inc., HyperOx I, LP, HyperOx
III, LP, and East Coast TMR, Inc., were merged into WJO.

WJO filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa.
Case No. 10-19894) on Nov. 15, 2010.  The Debtor disclosed
$19,923,802 in assets and $6,805,255 in liabilities as of the
Chapter 11 filing.

Holly Elizabeth Smith, Esq., and Thomas Daniel Bielli, Esq., at
Ciardi Ciardi & Astin, P.C., serve as the Debtor's bankruptcy
counsel.  Pond Lehocky Stern Giordano serves as the Debtor's
special counsel to represent it in worker's compensation
proceedings pertaining to the Therapeutic Magnetic Resonance
treatments.  Patrick Yun serves as the Debtor's financial advisor.
Attorneys at Keifer & Tsarouhis LLP serve as counsel to the
official committee of unsecured creditors.  ParenteBeard LLC
serves as the Committee's accountant and financial advisor.

The United States Trustee has appointed David Knowlton as patient
care ombudsman in the case.  The Ombudsman is represented in the
case by Karen Lee Turner, Esq., at Eckert Seamans Cherin &
Mellott, LLC, as counsel.

Tristate Capital Bank, the cash collateral lender, is represented
in the case by lawyers at Benesch Friedlander Coplan & Aronoff
LLP.

On July 3, 2012, Roberta A. DeAngelis, U.S. Trustee for Region 3,
obtained permission from the Hon. Jean K. Fitzsimon of the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania to
appoint Alfred T. Giuliano as Chapter 11 trustee of the bankruptcy
estate of WJO, Inc.  Maschmeyer Karalis P.C. serves as the Chapter
11 Trustee's general bankruptcy counsel.


WJO INC: Trustee Can Hire Leonard Sciolla as Special Counsel
------------------------------------------------------------
Alfred T. Guiliano, the Chapter 11 Trustee for WJO, Inc., sought
and obtained approval from the U.S. Bankruptcy Court to employ
Leonard, Sciolla, Hutchinson, Leonard & Tinari LLP as special
counsel.

The Chapter 11 Trustee attests that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code.

                      About WJO Inc.

Bristol, Pennsylvania-based WJO, Inc., operates six family
practices located in Newtown, Bristol, Bensalem, Bustleton, South
Philadelphia, and Bethlehem, Pennsylvania and consists of Board
Certified Osteopathic Physicians specializing in Family Medicine.
Prior to the petition date, and to allow the Company to
restructure effectively, HyperOx Inc., HyperOx I, LP, HyperOx
III, LP, and East Coast TMR, Inc., were merged into WJO.

WJO filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa.
Case No. 10-19894) on Nov. 15, 2010.  The Debtor disclosed
$19,923,802 in assets and $6,805,255 in liabilities as of the
Chapter 11 filing.

Holly Elizabeth Smith, Esq., and Thomas Daniel Bielli, Esq., at
Ciardi Ciardi & Astin, P.C., serve as the Debtor's bankruptcy
counsel.  Pond Lehocky Stern Giordano serves as the Debtor's
special counsel to represent it in worker's compensation
proceedings pertaining to the Therapeutic Magnetic Resonance
treatments.  Patrick Yun serves as the Debtor's financial advisor.
Attorneys at Keifer & Tsarouhis LLP serve as counsel to the
official committee of unsecured creditors.  ParenteBeard LLC
serves as the Committee's accountant and financial advisor.

The United States Trustee has appointed David Knowlton as patient
care ombudsman in the case.  The Ombudsman is represented in the
case by Karen Lee Turner, Esq., at Eckert Seamans Cherin &
Mellott, LLC, as counsel.

Tristate Capital Bank, the cash collateral lender, is represented
in the case by lawyers at Benesch Friedlander Coplan & Aronoff
LLP.

On July 3, 2012, Roberta A. DeAngelis, U.S. Trustee for Region 3,
obtained permission from the Hon. Jean K. Fitzsimon of the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania to
appoint Alfred T. Giuliano as Chapter 11 trustee of the bankruptcy
estate of WJO, Inc.  Maschmeyer Karalis P.C. serves as the Chapter
11 Trustee's general bankruptcy counsel.


WKI HOLDING: S&P Withdraws 'B' Corp. Credit Rating on Request
-------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'B' corporate
credit rating on WKI Holding Co. Inc. at the company's request as
it is no longer pursuing its previously planned financing
transaction. "We also withdrew the 'B+' issue-level rating on
subsidiary co-borrowers World Kitchen LLC and Snapware Corp.'s
proposed senior secured credit facility and '2' recovery rating,"
S&P said.


ZHONE TECH: Gets 180-Day Period to Regain Nasdaq Compliance
-----------------------------------------------------------
Zhone Technologies, Inc. disclosed that on Dec. 19, 2012, it
received notification from The Nasdaq Stock Market granting the
company an additional 180-day period, or until June 17, 2013, to
regain compliance with Nasdaq's minimum $1.00 bid price per share
rule required for continued listing on The Nasdaq Capital Market.

To regain compliance, the closing bid price of the Company's
common stock must be at or above $1.00 per share for a minimum of
10 consecutive business days prior to June 17, 2013.

If the company does not regain compliance by the end of this
second grace period, it will receive notification from Nasdaq that
its shares are subject to delisting.  At that time, the company
may then appeal the delisting determination to a Hearings Panel.

There can be no assurances that the company will be able to regain
compliance with the Nasdaq minimum bid price rule and thereby
maintain the listing of its common stock.

                     About Zhone Technologies

Zhone Technologies, Inc. provides IP multi-service access
solutions to more than 750 of the world's most innovative network
operators.  The IP Zhone is the only solution that enables service
providers to build the network of the future.today, supporting
end-to-end Voice, Data, Entertainment Social Media, Business,
Mobile Backhaul and Mobility service. Zhone is committed to
building the fastest and highest quality All IP Multi-Service
solution for its customers.  Zhone is headquartered in California
and its products are manufactured in the USA in a facility that is
emission, waste-water and CFC free.


* Fitch Says ILFC Sale to Chinese Investors has Unique Attributes
-----------------------------------------------------------------
There are many unique attributes to American International Group's
(AIG) potential sale of its majority stake in leading aircraft
lessor International Lease Finance Corp. (ILFC, 'BB/Stable') to a
consortium of Chinese investors.  While the deal underlines Asia's
increasing importance in the global aviation market, Fitch does
not believe it will significantly alter the industry landscape in
the region.

The most recent acquisitions in this sector have involved large
Asian banks and smaller private aircraft lessors with newer fleets
of 100-250 jets, primarily narrowbodies.  These transactions have
typically been completed at premiums to book value.  By contrast,
ILFC has the second-largest fleet in the world with a sizeable
component of widebody and older-vintage aircraft.  AIG is selling
ILFC at a 33% discount to its book equity, despite the sizeable
impairment charges taken over the last two years.

In our view, these factors make the potential ILFC sale unique and
less representative of the general trends in the market.
Nonetheless, the Chinese investor community and regulators may
become more receptive to additional investment in the aircraft
leasing sector if the ILFC investment proves to be successful.

Japanese banks have been the most active acquirers so far this
year.  Sumitomo Mitsui Financial Group acquired RBS Aviation for
$1.2 billion in January 2012, and Mitsubishi UFJ purchased Jackson
Square Aviation in October for $1.3 billion.  Both of these units
will likely become subsidiaries and have some level of integration
and synergies with the parent.  BOC Aviation ('A-/Stable') went
through a similar process in 2006.

Acquisitions of smaller lessors by larger banks create certain
benefits in terms of lower funding costs, consistent single-
shareholder strategy, and cross-selling opportunities with the
parent.  Conversely, lessors that are subsidiaries of larger
entities tend to operate with higher balance sheet leverage and
may not have the same level of funding diversity as their peers.

The combination of airlines' increasing reliance on operating
leases globally, along with the expected growth in air travel,
make aircraft lessors an attractive acquisition target for
financial institutions.  Fitch expects to see further
consolidation activity in the sector, especially among those
lessors that are owned by private-equity sponsors.

Particularly rapid growth in demand for leased aircraft among
Asian airlines points to further expansion of Asian investor
interest in leasing.  According to Boeing's latest Current Market
Outlook report, the Asia Pacific region is expected to represent
35% of all commercial aircraft deliveries through 2031.  We expect
changing ownership structures to drive more investment, both
through acquisitions and organic growth, as Asian carriers look
for new sources of financing to support rapid fleet growth in
coming years.

* Moody's Says Public Finance Credits Face New Risk After Sandy
---------------------------------------------------------------
Public finance credits should continue to handle the costs of the
Hurricane Sandy recovery with minimal impact on their credit
ratings says Moody's Investors Service in "U.S. Public Finance
Issuers Transition to Recovery Stage in the Aftermath of Hurricane
Sandy," authored by Moody's analyst Dan Seymour. New risks are
evolving as the recovery moves into a new stage, however. They now
involve the timing of Federal Emergency Management Agency (FEMA)
aid, access to capital markets for borrowing, and reductions in
property tax collections and tax-base valuations.

"We believe the sector as a whole will manage well through the
storm's short- and long-term effects," says Geordie Thompson, a
Moody's Vice President and Senior Credit Officer. "Other than
those we have already taken, we anticipate few ratings to change
as a result of the storm."

To date Moody's has only downgraded one public finance issuer --
the Borough of Seaside Heights, NJ (A3) -- because of the effects
of the storm. Moody's has assigned negative outlooks to four New
Jersey shore municipalities and placed five New York and New
Jersey credits on review for downgrade for which the rating agency
believes the storm's aftermath poses acute risks.

Most rebuilding costs will be reimbursed by private insurance,
federal aid, charitable donations, state and local resources, and
personal savings, and Moody's expects most of the damaged areas to
rebuild. Delays in FEMA reimbursement for cleanup and overtime
costs, as well as revalued property tax bases, could pressure some
entities in the medium-term.

Many public finance issuers have temporarily used their own cash
or incurred debt in the past month, intending to replenish the
cash or pay down the debt when FEMA reimbursements arrive. Moody's
continues to assume that such reimbursements will be forthcoming,
given that some payments have begun to arrive.

Any departure from the assumed 75% reimbursement rate, or
reimbursement delays lasting substantially longer than one year,
could place unanticipated rating pressure on many issuers.

"Many of the fundamental strengths of state and local government
sector, such as the dependability and consistency of taxation as a
revenue source even in the face substantial damage to the tax
base, and the rarity of borrowing to fund operations, will
contribute to the sector's rating stability even as the effects of
the hurricane strains cash balances, increase debt burdens, and
lowers tax base values," says Julie Beglin, a Moody's Vice
President and Senior Analyst.

Hurricane Sandy caused enormous damage to hundreds of local
governments, utilities, universities, and other types of public
finance debt issuers, primarily along the New Jersey Shore and the
South Shore of Long Island.


* Moody's Sees Few Signs of Liquidity Stress Heading Into 2013
--------------------------------------------------------------
Moody's Liquidity-Stress Index (LSI) remains near its record low,
highlighting that speculative-grade companies have good
flexibility to weather the challenges on the horizon as we head
into 2013, Moody's Investors Service says in its latest edition of
SGL Monitor. The LSI is likely to end 2012 on a positive note,
after a drop to 3.7% by mid-December from 4.0% at the end of
November, putting it closer to July's historical low of 3.1%. The
LSI will be down for a fourth consecutive year in 2012, and
remains well below its 7.5% long-term average.

The LSI falls when corporate liquidity appears to improve, and
rises when it appears to weaken.

"Another record year for speculative-grade bond issuance amid low
borrowing costs continues to enable companies to proactively
address maturities," says Vice President -- Senior Credit Officer
John Puchalla. "And this has combined with steady, if
unspectacular, cash flow performance to yield healthy liquidity
positions." US speculative-grade companies have slashed the amount
of bank debt and bonds due in 2013 to around $20 billion, down
about 70% from the 2013 maturity total at the end of 2011,
according to Moody's analysis.

Liquidity risks nevertheless exist. Among the biggest threats are
the tax increases and spending cuts that will take effect in the
US if policymakers there do not reach a budget agreement by the 1
January deadline, Mr. Puchalla says. If they do not, Moody's
Analytics projects that US GDP growth will come in about 3.4%
lower than it would otherwise, resulting in economic contraction
and recession. Other key threats are contagion from Europe's
sovereign debt crisis and slowdowns in developing markets.

Nevertheless, Puchalla says, "The continuing low LSI suggests that
US speculative-grade rate will remain low in 2013, despite these
risks." December's low LSI reading is consistent with Moody's
projections that the US speculative-grade default rate will fall
from its current 3.1% level to 2.5% by next June, then gradually
rise to 2.9% in November 2013.

December's lower LSI reading reflects the liquidity rating
upgrades of three companies: Realogy Group, inVentiv Health, Inc.
and Six Flags. Lone Pine Resources Inc. is the sole downgrade to
SGL-4 so far in December.

Moody's Covenant-Stress Index (MCSI) inched up to 2.4% in November
from 2.2% in October. The index, like the LSI, has held in a tight
and low range throughout 2012. December's low reading suggests
that few speculative-grade companies have pressing covenant issues
to address heading into 2013. The MCSI remains far below the 2009
high of 17.3% and the historical average of 6.9% seen from October
2002 through September 2012.


* Circuit to Rule on Lawyers' Liability on Future Fees
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in Manhattan agreed to
decide which of two federal district judges was correct on the
question of whether a defunct law firm is entitled to recover
hourly fees clients pay to lawyers who take over unfinished
business.

The report recounts that in September U.S. District Judge William
H. Pauley III ruled in a case involving Thelan LLP that hourly
fees earned on unfinished business by a new law firm aren't
property of the defunct firm.  Judge Pauley disagreed with a
decision in May by U.S. District Judge Colleen McMahon, who ruled
in the liquidation of Coudert Brothers LLP that fees earned on
unfinished business belong to the liquidated firm.

The Second Circuit in New York agreed on Dec. 18 to hear the
Coudert appeal even though Judge McMahon's ruling didn't fully
decide the case. In technical terms, the circuit court is allowing
an interlocutory appeal.  Judge McMahon's case involves the
potential liability of nine law firms.

Judge McMahon's case in the circuit court is In re Coudert
Brothers LP, 12-3006, U.S. Court of Appeals for the Second
Circuit (Manhattan).


* New Michigan Law Allows Chapter 9 Bankruptcy
----------------------------------------------
Caitlin Devitt, writing for The Bond Buyer, reports that a month
after voters overturned Michigan's emergency management law,
Public Act 4, lawmakers last week passed new legislation that
restores many of the state's powers over distressed local
governments and features a new focus on Chapter 9 bankruptcy as an
early option.  If signed into law by Gov. Rick Snyder as expected,
the legislation will take effect in late March.

The report notes the law comes as Detroit teeters on the edge of
insolvency, with the municipal finance world watching to see if it
will be the largest American city to file for Chapter 9.  But
despite the new law's emphasis on bankruptcy as an option to deal
with a financial emergency, it will likely remain a last resort
for Detroit and many other local governments struggling across the
state, experts said.

According to the report, Michigan has never had a local government
declare bankruptcy, despite a recession that started in 2000 and
battered cities and school districts across the state.  Under the
state's old law for distressed governments, only an emergency
manager could declare bankruptcy, with the governor's permission.
The new law moves the option up earlier in the process, giving the
choice to the local government, with the governor's final
approval.  An emergency manager still has the power to ask for
bankruptcy.

"Chapter 9 is on the table now," Richard Ciccarone, chief research
officer at McDonnell Investment Management, according to Bond
Buyer.  "The chance of bankruptcy in Michigan today is greater
than under the old law. But the state is trying to do what it can
to keep Detroit and others out of bankruptcy."

According to Bond Buyer, Treasury spokesman Terry Stanton said in
an email the state considers Chapter 9 as the "last option" but
"one that cannot be dismissed."

Bond Buyer notes the new emergency management law, which is called
the Local Government and School District Fiscal Responsibility
Act, restores powers that proponents consider key to resolving
financial emergencies, particularly the ability to terminate or
amend labor contracts.  The new law exempts a local government
from collective bargaining for five years after a financial
emergency has been declared.

According to the report, under the new law, if a local unit is
found to be in a state of financial emergency, the governing body
has seven days to select one of four options: It can opt for a
consent agreement with the state, an emergency manager, a so-
called neutral evaluation process similar to California's Assembly
Bill 506 process, or Chapter 9, with the governor's consent.

The law gives the local governing body and mayor the ability to
vote out an emergency manager after one year and replace the
manager with a mediator.  It expands to 18 the number of triggers
for a state review and broadens to 30 the actions that an EM may
take.  Sixteen of the actions are new, according to an analysis of
the bill by the independent House Fiscal Agency, the report notes.
It also outlines a specific exit strategy for governments emerging
from state oversight.


* 7th Cir. Appoints Halfenger as E.D. Wis. Bankruptcy Judge
-----------------------------------------------------------
The Seventh Circuit Court of Appeals appointed Bankruptcy Judge G.
Michael Halfenger to a fourteen-year term of office in the Eastern
District of Wisconsin, effective January 11, 2013, (vice, Shapiro)

          Honorable G. Michael Halfenger
          United States Bankruptcy Court
          517 East Wisconsin Avenue, Room 140
          Milwaukee, WI 53202
          Telephone: (414) 290-2680
          Fax: (414) 297-4088

          Term Expiration: January 10, 2027


* BOOK REVIEW: Performance Evaluation of Hedge Funds
----------------------------------------------------
Edited by Greg N. Gregoriou, Fabrice Rouah, and Komlan Sedzro
Publisher: Beard Books
Hardcover: 203 pages
Listprice: $59.95
Review by Henry Berry

Hedge funds can be traced back to 1949 when Alfred Winslow Jones
formed the first one to "hedge" his investments in the stock
market by betting that some stocks would go up and others down.
However, it has only been within the past decade that hedge funds
have exploded in growth.  The rise of global markets and the
uncertainties that have arisen from the valuation of different
currencies have given a boost to hedge funds.  In 1998, there
were approximately 3,500 hedge funds, managing capital of about
$150 billion.  By mid-2006, 9,000 hedge funds were managing $1.2
trillion in assets.

Despite their growing prominence in the investment community,
hedge funds are only vaguely understood by most people.
Performance Evaluation of Hedge Funds addresses this shortcoming.
The book describes the structure, workings, purpose, and goals of
hedge funds.  While hedge funds are loosely defined as "funds
with no rules," the editors define these funds more usefully as
"privately pooled investments, usually structured as a
partnership between the fund managers and the investors."  The
authors then expand upon this definition by explaining what sorts
of investments hedge funds are, the work of the managers, and the
reasons investors join a hedge fund and what they are looking for
in doing so.

For example, hedge funds are characterized as an "important
avenue for investors opting to diversify their traditional
portfolios and better control risk" -- an apt characterization
considering their tremendous growth over the last decade.  The
qualifications to join a hedge fund generally include a net worth
in excess of $1 million; thus, funds are for high net-worth
individuals and institutional investors such as foundations, life
insurance companies, endowments, and investment banks.  However,
there are many individuals with net worths below $1 million that
take part in hedge funds by pooling funds in financial entities
that are then eligible for a hedge fund.

This book discusses why hedge funds have become "notorious as
speculating vehicles," in part because of highly publicized
incidents, both pro and con.  For example, George Soros made $1
billion in 1992 by betting against the British pound.
Conversely, the hedge fund Long-Term Capital Management (LTCP)
imploded in 1998, with losses totalling $4.6 billion.
Nonetheless, these are the exceptions rather than the rule, and
the editors offer statistics, studies, and other research showing
that the "volatility of hedge funds is closer to that of bonds
than mutual funds or equities."

After clarifying what hedge funds are and are not, the book
explains how to analyze hedge fund performance and select a
successful hedge fund.  It is here that the book has its greatest
utility, and the text is supplemented with graphs, tables, and
formulas.

The analysis makes one thing clear: for some investors, hedge
funds are an investment worth considering.  Most have a
demonstrable record of investment performance and the risk is
low, contrary to common perception.  Investors who have the
necessary capital to invest in a hedge fund or readers who aspire
to join that select club will want to absorb the research,
information, analyses, commentary, and guidance of this unique
book.

Greg N. Gregoriou teaches at U. S. and Canadian universities and
does research for large corporations.  Fabrice Rouah also teaches
at the university level and does financial research.  Komlan
Sedzro is a professor of finance at the University of Quebec and
an advisor to the Montreal Derivatives Exchange.



                            *********

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.


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