/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130109.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, January 9, 2013, Vol. 17, No. 8 Headlines 1946 PROPERTY: Court OKs Diamond Apartment as Management Firm 1946 PROPERTY: U.S. Trustee Seeks Ch.7 Conversion or Dismissal 2334 WASHINGTON: Case Summary & 16 Largest Unsecured Creditors A123 SYSTEMS: Proposed Sale to Chinese Attracts More Criticism A&S GROUP: U.S. Trustee Wants GGG Disqualified as Fin'l Consultant A&S GROUP: SunTrust Withdraws Bid for Chapter 11 Trustee A&S GROUP: Great American Serves as Disposition Agent ALON USA: Moody's Assigns 'B2' CFR/PDR; Outlook Stable AMERICAN AIRLINES: Equity Holders May See Recovery AMERICAN APPAREL: December Comparable Store Sales Hiked by 14% AMERICAN REALTY: Seeks More Time to File Exit Plan AMERICAN SUZUKI: Committee Taps Irell & Manella as Counsel AMERICAN SUZUKI: Committee Taps AlixPartners LLC as Advisor AMERICAN SUZUKI: Taps RLM Finsbury as Communications Consultant AMERICAN SUZUKI: Consulting Omni OK'd as Claims Noticing Agent AMERIFORGE GROUP: Moody's Assign 'B2' CFR/PDR; Outlook Stable ATP OIL: Paul Bulmahn Steps Down as Executive Chairman AVIS BUDGET: Zipcar Acquisition No Impact on Fitch Ratings BEALL CORPORATION: Washington Agency Wants Case Dismissed BEITH FARM: Case Summary & 4 Unsecured Creditors BERRY PLASTICS: Named Pine Creek Partner to Board of Directors BIG M INC: Case Summary & 30 Largest Unsecured Creditors BRAFFITS CREEK: Meeting of Creditors Continued Until Jan. 17 BRANCHBURG COMMERCE: Case Summary & 10 Largest Unsecured Creditors CALYPTE BIOMEDICAL: Inks New Contracts With CEO and CFO CARY CREEK: Files for Chapter 11 in North Carolina CARY CREEK: Proposes Northen Blue as Bankruptcy Counsel CARY CREEK: Proposes Bidencope as Appraiser CBS I LLC: To Refinance U.S. Bank Loan Under Second Amended Plan CHAPALA INC: Case Summary & 7 Largest Unsecured Creditors CENTURY SHREE: Case Summary & 18 Largest Unsecured Creditors CONQUEST SANTA FE: Has Interim Nod to Use LPP Cash Collateral CONQUEST SANTA FE: Hiring MC&R as Counsel CONQUEST SANTA FE: Files List of 20 Largest Unsecured Creditors CONQUEST SANTA FE: Hiring W&H for New Mexico Litigation CONQUEST SANTA FE: Files Schedules of Assets and Liabilities COUGAR SPRINGS: Case Summary & 17 Unsecured Creditors CRAWFORDSVILLE LLC: Case Has Natural Pork's Committee D MEDICAL: CFO Dana to Resign Due to Disputes on Duties DAYTOP VILLAGE: Plan Filing Exclusivity Expires Jan. 10 DEWEY & LEBOEUF: Has Go-Signal to Solicit Plan Votes DLT PROPERTIES: Case Summary & 5 Unsecured Creditors DVORKIN HOLDINGS: Court Okays Seyfarth Shaw as Trustee's Counsel EARTHBOUND HOLDINGS: S&P Lowers Corporate Credit Rating to 'B-' ELCOM HOTEL & SPA: Files Ch. 11 to Sell Bal Harbor Hotel Lot ELCOM HOTEL & SPA: Proposes Kozyak Tropin as Ch. 11 Counsel ELCOM HOTEL & SPA: Has Duanne Morris as Real Estate Counsel ELCOM HOTEL & SPA: A&M's Chuck Bedsole to Serve as CRO ELITE PHARMACEUTICALS: Director Quits for Personal Reasons EMISPHERE TECHNOLOGIES: VP Riley Resigns, Gets $1.4MM From NOLs ENERGYSOLUTIONS INC: To be Sold to Energy Capital for $338-Mil. ENERGYSOLUTIONS INC: S&P Assigns 'B' Corporate Credit Rating FANNIE MAE: Bank of America's Settlement a Positive, Fitch Says FLASH DUTCH: S&P Assigns 'B+' Corp. Credit Rating FLORIDA INSTITUTE: Case Summary & 20 Largest Unsecured Creditors FORT LAUDERDALE BOATCLUB: Court Confirms Plan of Reorganization FR 160: Court Approves MCA Financial as Financial Advisor FRIENDSHIP DAIRIES: Jan. 10 Hearing on Use of Cash Collateral GAME TRADING: Redbox Allowed $1.8-Mil. Unsecured Claim GOLDEN GUERNSEY: Files for Chapter 7 Bankruptcy in Delaware GREAT BASIN: Obtains CCAA Protection Extension Until Jan. 14 HAMPTON ROADS: Completes Relocation of Offices to Virginia Beach HEALTHWAREHOUSE.COM INC: Unable to Pay $3-Mil. Loan Obligations HMX ACQUISITION: Committee Hiring ASK LLP as Local Counsel HMX ACQUISITION: Can Employ CDG Group as Financial Advisor HMX ACQUISITION: Hires Epiq Bankruptcy as Administrative Agent HMX ACQUISITION: Employ Proskauer Rose as Counsels HMX ACQUISITION: Wins OK for William Blair as Investment Banker HMX ACQUISITION: Committee Retains Leonard Street as Lead Counsel HOSTESS BRANDS: Court OKs Hilco for Real Estate Sale HYPERTENSION DIAGNOSTICS: Sells $42,500 Convertible Note to Asher IMMUCOR INC: Moody's Reviews 'B2' CFR for Possible Downgrade IMPACT SERVICES: Low-Level Radioactive Waste Removed From Site INFUSYSTEM HOLDINGS: Names J. Skonieczny Chief Operating Officer INFUSYSTEM HOLDINGS: To Remain as Independent Public Company INSPIRATION BIOPHARMA: Can Employ Evercore as Investment Banker INSPIREMD INC: Incurs $17.6 Million Net Loss in Fiscal 2012 INTERLEUKIN GENETICS: Appoints New Chief Marketing Officer INTERNATIONAL HOME: Preliminary Examiner Report Out Jan. 18 J & J PROPERTIES: Case Summary & 6 Largest Unsecured Creditors JACKSONVILLE BANCORP: Amends Purchase Agreement with CapGen JEFFRIE E. LONG: To Sell Real Properties to Pay Off PNC Bank JERRY FERGUSON: Can't Pay Personal Taxes Under Chapter 12 Plan LBI MEDIA: Voluntarily Deregisters 11% Discount Notes LBI MEDIA: Settles Exchange Offers and Consent Solicitations LDK SOLAR: Agrees to Sell LDK Anhui for RMB25 Million LEE BRICK: Has Final OK to Use Cash Through Plan Confirmation LIGHTSQUARED INC: Lenders Targeting Falcone, Not Company Officers LITHIUM TECHNOLOGY: Axes Chia as Director, Names Nujit as Chair LODGENET INTERACTIVE: Soliciting Approval of Pre-Packaged Plan LODGENET INTERACTIVE: PAR Investment Lowers Equity Stake to 8.4% LODGENET INTERACTIVE: Receives NASDAQ Delisting Notice LON MORRIS: AmeriBid to Get 7% Commission in Asset Sale LOUISIANA RIVERBOAT: Kasowitz Benson OK'd for Global Gaming Suit MADISON HOTEL: Lender Files Further Modifications to Plan Outline MARKWEST ENERGY: Fitch Puts 'BB' Rating on $1-Bil. Senior Notes MARKWEST ENERGY: Moody's Rates $1-Bil. Sr. Unsecured Notes 'Ba3' MARKWEST ENERGY: S&P Rates New $1-Bil. Unsecured Notes 'BB' MASSACHUSETTS LOCAL GOV'T: Still Faces Ongoing Challenges MDC HOLDINGS: Moody's Affirms '(P)Ba2' Subordinate TMN Rating MERRILL CORP: S&P Cuts Corporate Credit Rating to 'D' METEX MFG: Creditors Committee Taps Caplin & Drysdale as Counsel METEX MFG: FCR Legal Representative Taps Young Conaway as Counsel METEX MFG: Meeting of Creditors Postponed Until Further Notice METEX MFG: Taps Lawrence Fitzpatrick as FCR Legal Representative METRO FUEL: Can Employ AP Services as Crisis Managers METRO FUEL: Can Hire Carl Marks as Fin'l Advisor/Investment Banker METROPLAZA HOTEL: 341(a) Meeting of Creditors on Jan. 17 METROPLAZA HOTEL: Proposes DiPasquale as Counsel METROPLAZA HOTEL: Seeks to Use WBCMT's Cash Collateral MICHIGAN TRANSPORTATION: Moody's Maintains' Ba1' Rating MILAGRO OIL: Inks Severance Agreement with President and CEO MODERN PLASTICS: NPC to Appear in Sale Hearing Today MODERN PRECAST: Proposes Griffin as Investment Banker MONITOR COMPANY: Committee Can Retain Cole Schotz as Counsel MONITOR COMPANY: Hiring McGladrey LLP as Tax Advisor MT. VERNON PROPERTIES: Court Dismisses Chapter 11 Case MW GROUP: Court Sets Jan. 16 DS Hearing on Bank of America Plan NAVISTAR INTERNATIONAL: Kenneth Griffin Holds 5.4% Equity Stake NEP INC: Moody's Assigns 'B2' CFR; Outlook Stable NEUSTAR INC: Moody's Rates $325-Mil. Term Loan A 'Ba1' NEUSTAR INC: S&P Affirms 'BB' Corporate Credit Rating NNN CYPRESSWOOD: Files for Chapter 11 in Chicago NNN LENOX PARK 9: Creditor Wants Case Transfer or Dismissal NNN PARKWAY: Files for Chapter 11 Protection NTP MARBLE: Case Summary & 20 Largest Unsecured Creditors OTERO COUNTY HOSPITAL: Accountant Denied Leave to File Late Claim POWERSCREEN OF CHICAGO: Case Summary & Creditors List ROCKIES EXPRESS: Moody's Cuts CFR/PDR to 'Ba2'; Outlook Stable ROVI CORP: RES Unit's Sale No Impact on Moody's 'Ba3' CFR SEARS HOLDINGS: Chairman Ed Lampert Assumes CEO Post SILIKEN MANUFACTURING: Files Petition for Relief Under Ch. 11 SENTINEL MANAGEMENT: INTL FCStone to Challenge Court Ruling SOUTH LAKES DAIRY: Files Schedules of Assets and Liabilities SPECIALTY PRODUCTS: Asbestos Committee Wants Ch. 11 Case Dismissed SSRS INVESTMENTS: Case Summary & 8 Largest Unsecured Creditors STEELE SPORTFISHING: Voluntary Chapter 11 Case Summary THQ INC: Receives Court Approval for Amended Sale Calendar VAL-FAB INC.: Case Summary & 20 Largest Unsecured Creditors WEBB DIVERSIFIED: Case Summary & 8 Unsecured Creditors WELLS ENTERPRISES: Moody's Assigns 'B1' Corp. Family Rating WILLBROS GROUP: Gets Two Transmission Construction Projects * FINRA Unveils 2012 Regulatory Highlights * Corporate High Yield Not Yet at "Bubble" Levels * Retail Trade to Experience Greatest Volatility, Survey Shows * U.S. Faces "Muddle-Through" Economy, Nuveen's Bob Doll Says * Schneider & Stone Reduces Mortgage to Unsec. Chapter 13 Claim * Thompson Hine Names Tuggle as Partner for Cleveland Practice * Upcoming Meetings, Conferences and Seminars ********* 1946 PROPERTY: Court OKs Diamond Apartment as Management Firm ------------------------------------------------------------- 1946 Property, LLC, sought and obtained approval from the U.S. Bankruptcy Court to employ Diamond Apartment Management, Inc., doing business as Diamond Management, to provide a broad range of managerial services to the estate. The firm operates the Debtor's business and provides services relating to issues that have direct and significant impacts on the Debtor's day-to-day operations. The Debtor has said it is essential that employment of the firm be continued to avoid disruption of normal business operations. Diamond's compensation package includes a management fee of 5% of the total monthly income of the Debtor's property. Diane Lawson attests that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. In October, the Debtor obtained approval of its amended application to employ Coffin & Driver, PLLC, as counsel. Coffin & Driver is advising the Debtor with respect to all reorganization, litigation and general corporate law matters, as well as any other matters that may arise in the context of the Chapter 11 case. The law firm's Vickie L. Driver and Patrick J. Coffin charge at an hourly rate of $345. Associates' hourly rates range from $150 to $295 per hour, and legal assistant or law clerk services charge from $50 to $115 per hour. The firm will request reimbursement of out-of-pocket expenses. As of Petition Date, Coffin & Driver received a total of $5,000 in cash retainer from non-debtor funds. Additionally, since the Petition Date, the firm has received a $20,000 in non-debtor funds. The law firm attested it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About 1946 Property 1946 Property, LLC, is a Texas liability company. The Debtor's sole manager is Edward Reiss. The Debtor owns a 252-unit condominium community located at 1946 Northeast Loop 410, in San Antonio, Texas. The Company filed a bare-bones Chapter 11 petition (Bankr. W.D. Tex. Case No. 12-52489) in San Antonio on Aug. 7, 2012. Bankruptcy Judge Leif M. Clark presides over the case. Vickie L. Driver, Esq., at Coffin & Driver, PLLC, represents the Debtor. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. 1946 PROPERTY: U.S. Trustee Seeks Ch.7 Conversion or Dismissal -------------------------------------------------------------- Judy A. Robbins, the U.S. Trustee for Region 7, has asked the U.S. Bankruptcy Court to convert the Chapter 11 case of 1946 Property, LLC to a liquidation in Chapter 7. The U.S. Trustee argued that the Debtor's primary asset was real property located in San Antonio, Texas valued at $10,292,760 on its bankruptcy schedules. SW Loan A, LP filed a Motion to Lift Automatic Stay on Aug. 17, 2012, and sought an order allowing it to foreclose on in its interest in the Debtor's real property. On Oct. 22, the Court entered an order granting SW Loan A relief from the stay to take all actions necessary to foreclose its lien on the real property, including holding a foreclosure sale. The U.S. Trustee said it has been informed by the Debtor's counsel that SW Loan A went forward with the foreclosure sale on Nov. 6, and that the Debtor no longer owns the property. Because the purpose of the Chapter 11 case was to try to keep the real property and because that is no longer possible, no reason exists for the case to remain in chapter 11, the U.S. Trustee pointed out. In the alternative, the case should be dismissed, the U.S. Trustee said. If the case is dismissed, the U.S. Trustee wants the case dismissal order to provide for payment of any quarterly fees owed to the Office of the U.S. Trustee. About 1946 Property 1946 Property, LLC, is a Texas liability company. The Debtor's sole manager is Edward Reiss. The Debtor owns a 252-unit condominium community located at 1946 Northeast Loop 410, in San Antonio, Texas. The Company filed a bare-bones Chapter 11 petition (Bankr. W.D. Tex. Case No. 12-52489) in San Antonio on Aug. 7, 2012. Bankruptcy Judge Leif M. Clark presides over the case. Vickie L. Driver, Esq., at Coffin & Driver, PLLC, represents the Debtor. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. 2334 WASHINGTON: Case Summary & 16 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: 2334 Washington N LLC 445 Central Avenue, #112 Cedarhurst, NY 11516 Bankruptcy Case No.: 13-10035 Chapter 11 Petition Date: January 3, 2013 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Robert E. Gerber Debtor's Counsel: Heidi J. Sorvino, Esq. HODGSON RUSS LLP 1540 Broadway, 24th Floor New York, NY 10036 Tel: (212) 661-3535 E-mail: hsorvino@hodgsonruss.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliates that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- 2607 Jerome N, LLC 13-10034 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 1084 New York N, LLC 13-10036 Northside Development LLC 13-10037 The petitions were signed by Aaron Wexler, managing member of Northside Development, LLC, owner. A. A copy of 2334 Washington N LLC's list of its 16 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb13-10035.pdf B. A copy of 2607 Jerome N, LLC's list of its 17 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb13-10034.pdf A123 SYSTEMS: Proposed Sale to Chinese Attracts More Criticism -------------------------------------------------------------- Rachel Feintzeig at Daily Bankruptcy Review reports that a group of former U.S. military and government leaders says the proposed sale of battery maker A123 Systems Inc. to a Chinese company "poses a long-term threat to American economic and national security." A123 received approval from the bankruptcy court on Dec. 11 to sell the business to China's Wanxiang Group Corp. for $256.6 million. Before the sale can be completed, it must be approved by the Treasury Department's Committee for Foreign Investment in the U.S. About A123 Systems Based in Waltham, Massachusetts, A123 Systems Inc. designs, develops, manufactures and sells advanced rechargeable lithium-ion batteries and battery systems and provides research and development services to government agencies and commercial customers. A123 is the recipient of a $249 million federal grant from the Obama administration. Pre-bankruptcy, A123 had an agreement to sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp. U.S. lawmakers opposed the deal over concerns on the transfer of American taxpayer dollars and technology to China. A123 didn't make a $2.7 million payment due Oct. 15 on $143.75 million in 3.75% convertible subordinated notes due 2016. A123 and U.S. affiliates, A123 Securities Corporation and Grid Storage Holdings LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012. A123 disclosed assets of $459.8 million and liabilities totaling $376 million. Debt includes $143.8 million on 3.75% convertible subordinated notes. Other liabilities include $22.5 million on a bridge loan owing to Wanziang. About $33 million is owed to trade suppliers. The Hon. Kevin J. Carey presides over the case. Lawyers at Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres & Co. LLC acts as the Debtors' financial advisors, while Alvarez & Marsal serves as restructuring advisors. Logan & Company Inc. serves as the Debtors' claims and noticing agent. Wanxiang America Corporation and Wanxiang Clean Energy USA Corp. are represented in the case by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin LLP. JCI is represented in the case by Josh Feltman, Esq., at Wachtell Lipton Rosen & Katz LLP. An official committee of unsecured creditors has been appointed in the case. The Committee is represented by lawyers at Brown Rudnick LLP and Saul Ewing LLP. A123 sought bankruptcy protection with a deal to sell its auto- business assets to Johnson Controls Inc. The deal with JCI is valued at $125 million, and subject to higher offers at a bankruptcy auction. At an auction early in December, JCI's bid was topped by Wanxiang America's $256.6 million offer. The Bankruptcy Court approved the sale on Dec. 11. Wanxiang is buying most of A123, except for its government business. Navitas Systems, a Chicago-area company spun off from Sun MicroSystems, is buying A123's government business for $2.25 million. JCI has filed an appeal from the sale approval. A&S GROUP: U.S. Trustee Wants GGG Disqualified as Fin'l Consultant ------------------------------------------------------------------ Donald F. Walton, United States Trustee for Region 21, has filed papers with the U.S. Bankruptcy Court seeking to disqualify GGG, Inc. as the Debtor's financial consultant. On Sept. 27, 2012, the Court entered an Order approving the employment of GGG Inc. Katie S. Goodman is the managing partner of GGG, Inc., and the individual designated by the Application as the primary person who would work on the Debtor's case. On Oct. 22, 2012, the Debtor's principals, Sami Durukan and Apel Dido, elected Ms. Goodman as Chief Executive Officer and Director of the Debtor. Mr. Durukan and Mr. Dido then resigned as Directors and Officers of the Debtor. Ms. Goodman became to sole Director of the Debtor. Therefore, according to the U.S. Trustee, Ms. Goodman is not disinterested and cannot be retained under 11 U.S.C. Sec. 327(a). About A&S Group Tucker, Georgia-based A&S Group, Inc., aka A&S Marbel and Granite Imports, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-72662) in Atlanta, on Sept. 9, 2012. The Debtor is an importer and distributor of decorative ceramic tile and mosaics, and natural stone products, most of which are used for wall and floor applications and counter and table tops in residential and commercial properties. The Debtor's customer base includes local, regional and national retailers, home centers, developers and retailers. Judge Wendy L. Hagenau oversees the case. The Law Office of A. Keith Logue, Esq., serves as the Debtor's counsel. The Debtor listed total assets of $10,278,149 and total debts of $17,580,095 in its schedules. The petition was signed by Sami Durukan, president. A&S GROUP: SunTrust Withdraws Bid for Chapter 11 Trustee -------------------------------------------------------- SunTrust Bank, a secured creditor of A&S Group, Inc., withdrew a motion seeking appointment of a Chapter 11 Trustee for the Debtor. In consideration of the withdrawal, the Debtor's shareholders, Apel Dido and Omer S. Durukan agreed to appoint Katie Goodman as sole director and chief executive officer, and appointed Ms. Goodman as sole director of the Debtor. Upon appointment of Mr. Goodman, Mr. Dido and Mr. Durukan resigned as directors and officers. The parties' agreement provides that, if either Mr. Dunkan or Dido or any member of their families become an officer of the Debtor without further Court order, the bank will be entitled to the appointment of a trustee. In its motion seeking to appoint a chapter 11 trustee, the bank alleged that, in an attempt to enrich themselves, the Debtor's management worked to divert assets from the Debtor and committed various other fraudulent acts including but not limited to: * transferring $1.5 million in Debtor inventory to an unrelated entity for no consideration to the Debtor, but in exchange for monthly payments of $23,000 to the Debtor's principals; * presenting the Bank with forged documents in an attempt to justify such transfer, as well as creating and distributing to various parties multiple conflicting records regarding the inventory transferred; * manipulating deposits and accounts receivable to divert proceeds of accounts receivable to insiders; * planning to divert Debtor accounts to an entity which is unrelated to the Debtor but in which the principals of the Debtor have an interest; * paying insiders almost $60,000 in the 90 days pre-bankruptcy; * using cash collateral without the Court's permission; and * manipulating accounts receivable reports to defraud the Bank and remain in compliance with its borrowing requirements. The bank also said the Debtor has been grossly mismanaged. About A&S Group Tucker, Georgia-based A&S Group, Inc., aka A&S Marbel and Granite Imports, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-72662) in Atlanta, on Sept. 9, 2012. The Debtor is an importer and distributor of decorative ceramic tile and mosaics, and natural stone products, most of which are used for wall and floor applications and counter and table tops in residential and commercial properties. The Debtor's customer base includes local, regional and national retailers, home centers, developers and retailers. Judge Wendy L. Hagenau oversees the case. The Law Office of A. Keith Logue, Esq., serves as the Debtor's counsel. The Debtor listed total assets of $10,278,149 and total debts of $17,580,095 in its schedules. The petition was signed by Sami Durukan, president. A&S GROUP: Great American Serves as Disposition Agent ----------------------------------------------------- A&S Group, Inc., aka A&S Marbel and Granite Imports sought and obtained approval from the U.S. Bankruptcy Court to employ Great American Group as its asset disposition agent to liquidate its inventory, furniture, fixtures, and equipment. Great American's services include: a. marketing the Debtor's assets for sale on the Debtor's behalf; b. negotiating the terms of sales; and c. implementing any sale agreements reached with purchasers of the Debtor's assets; Mark P. Naughton attests the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Great American will be paid an amount equal to 10% of the net revenues generated from the sales of the Tangible Assets plus reimbursement of all expenses incurred in their sales efforts. The payments will be free and clear of any liens. About A&S Group Tucker, Georgia-based A&S Group, Inc., aka A&S Marbel and Granite Imports, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-72662) in Atlanta, on Sept. 9, 2012. The Debtor is an importer and distributor of decorative ceramic tile and mosaics, and natural stone products, most of which are used for wall and floor applications and counter and table tops in residential and commercial properties. The Debtor's customer base includes local, regional and national retailers, home centers, developers and retailers. Judge Wendy L. Hagenau oversees the case. The Law Office of A. Keith Logue, Esq., serves as the Debtor's counsel. The Debtor listed total assets of $10,278,149 and total debts of $17,580,095 in its schedules. The petition was signed by Sami Durukan, president. ALON USA: Moody's Assigns 'B2' CFR/PDR; Outlook Stable ------------------------------------------------------ Moody's Investors Service assigned a B2 Corporate Family Rating (CFR) and a SGL-3 Speculative Grade Liquidity rating to Alon USA Partners, LP (ALDW), a newly formed variable distribution master limited partnership (MLP). Simultaneously, Moody's affirmed ALDW's B2 $250 million senior secured term loan rating, which has been assumed from Alon USA Energy, Inc. (ALJ). ALDW's rating outlook is stable. In a related action, Moody's downgraded Alon Refining Krotz Springs, Inc.'s (ARK) CFR to B3 from B2 and its senior secured note rating to B3 from B2. The rating outlook for ARK is stable. Moody's withdrew Alon USA Energy, Inc.'s ratings, including its B2 Corporate Family Rating, B2 Probability of Default Rating and SGL- 2 Speculative Grade Liquidity Rating. Alon USA Energy has no outstanding debt. "While we view Alon USA Partners' MLP corporate structure as an inherently risky business model, requiring the quarterly payout of almost all excess cash, the B2 CFR considers the company's commitment to a distribution that varies with cash flow, materially improved consolidated family financial leverage profile, as well as the reasonably strong cash flow generating capacity of the Big Spring's refinery through the cycle," commented Gretchen French, Moody's Vice President. "By the same token, the formation of the new MLP leaves Alon Refining Krotz Springs at a structural disadvantage depriving it of the potential direct support from the Big Spring refinery's cash flows, which traditionally represented the largest source of cash flow within the consolidated Alon USA Energy family." Issuer: Alon USA Partners, LP Assignments: Probability of Default Rating, Assigned B2 Speculative Grade Liquidity Rating, Assigned SGL-3 Corporate Family Rating, Assigned B2 Affirmed: US$250M Senior Secured Bank Credit Facility, Revised to a range of LGD4, 50 % from a range of LGD4, 51 % Issuer: Alon Refining Krotz Springs, Inc. Downgrades: Probability of Default Rating, Downgraded to B3 from B2 Corporate Family Rating, Downgraded to B3 from B2 US$216.5M 13.5% Senior Secured Regular Bond/Debenture, Downgraded to B3 from B2 Outlook Actions: Outlook, Changed To Stable From Rating Under Review Issuer: Alon USA Energy, Inc. Withdrawals: Probability of Default Rating, Withdrawn, previously rated B2 Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-2 Corporate Family Rating, Withdrawn, previously rated B2 Rating Rationale Alon USA Partners, LP ALDW's B2 CFR reflects the company's single refinery asset risk and relatively small scale, the inherent volatility and capital intensity of the refining sector, and the high payouts associated with its MLP corporate structure. The rating is supported by the refinery's proven operational track record and favorable geographic location. ALDW's Big Spring refinery has access to local discounted West Texas Sour (WTS) crude and West Texas Intermediate (WTI) crude and is well positioned within a product short region, resulting in record strong margins in 2012. Moody's believes that ALDW's crude sourcing differentials will continue to remain supportive, but will begin to narrow over the next several years as increased take away capacity comes on stream. However, local differentials associated with direct access to supply sources shall remain in the longer term. ALDW's high payout MLP corporate structure limits credit accretion by taking out all excess cash on a regular basis, preventing the buildup of large cash balances that have traditionally been used as reserve cushions in the inherently volatile refining business for both growth and regulatory spending during sector downturns. However, the variable pay model does offer certain advantages over traditional MLPs, including no incentive distribution rights, a build in cash reserves for turnarounds, and the consideration for working capital needs, and primarily by limiting the distributions to the excess cash flow generation ability of the company. Nevertheless, the variability does not change the basic distribution payout impetus of the MLP model. The MLP business model also relies heavily on capital market access for major capital expenditure programs and acquisitions, which can increase the company's risk profile during financial downturns and lead to higher leverage over the longer term. However, unlike traditional MLPs, Moody's believes Alon USA Partners, as an independent refiner and marketer, is likely to pursue a more modest growth profile and maintain moderate financial leverage. ALDW's SGL-3 Speculative Grade Liquidity Rating reflects an adequate liquidity profile. ALDW's liquidity profile is constrained by the volatility and cyclicality of the refining business and its MLP business model. In 2013, Moody's expects that ALDW's internally generated cash flow will cover capital expenditure at approximately $35 million per annum and turnaround expenditures at estimated $10 million per annum. As of September 30, 2012 pro-forma for the IPO the company had $29 million cash on its balance sheet. The company has a $240 million committed borrowing based secured revolving credit facility which matures in March 2016. Moody's expects the borrowing base to be less, and remain lower than the commitment amount due to lower levels of inventory and accounts receivable as a result of the J. Aron supply and offtake agreement. As of September 30, 2012 ALDW was in compliance with all maintenance covenants. Moody's expects ALDW will remain in compliance with its financial covenants, thus ensuring accessibility to its revolving credit facility. Alon USA Partner's liquidity is enhanced by a supply and offtake agreement whereby J. Aron funds the crude purchase for the Big Spring refinery. This arrangement accounts for a significant portion of the refinery's crude supply. Moody's believes there is little concern this agreement will be canceled by either party in the near term but if it was, substantial inventory would need to be financed by ALDW in a reasonably short time. In this were to occur, traditional sources of capital such as bank revolving credit facilities and trade credit would need to be readily available to finance the working capital assets as they move back on balance sheet. Alternate liquidity is limited given that substantially all of the company's assets are pledged. Under Moody's Loss Given Default Methodology (LGD), ALDW's term loan is rated B2, equal to its CFR. The B2 senior term loan rating reflects both ALDW's overall probability of default, to which Moody's assigns a PDR of B2, and a loss given default of LGD4 - 50%. The ALDW term loan is secured by the property, plant and equipment of the Big Spring refinery. The loan has a second lien on working capital, while ALDW's revolving credit facility has the first lien on the working capital and second lien on the property, plant and equipment. In the event of a distressed situation, the term loan creditors will need to rely on the intrinsic value of the Big Spring refinery. A ready buyer cannot be assured. It is for that reason that Moody's considers asset recovery for the term loan to be inferior to that of ALDW's revolving credit facility and the J. Aron supply and offtake agreement. Hence, Moody's has incorporated a deficiency assumption of 25% for recovery in Moody's LGD analysis for the term loan rating. Alon USA Partner's stable outlook assumes that it will continue to demonstrate consistent operating performance and remain moderately leveraged. The stable outlook also assumes that all future acquisitions and major growth capital expenditures are adequately funded with equity. ALDW's MLP business model and single asset refinery risks limit ratings upside given that any unforeseen prolonged downtime and the company's high payout model could have a significant impact on sufficient cash flow to service debt and capital needs. A modestly-levered acquisition of another refinery could add the operational diversity and scale that would lead to an upgrade. ALDW's ratings could be downgraded if leverage materially rises or liquidity weakens due to a prolonged period of unplanned downtime, debt funding of an acquisition, capital spending requirement or excessive material distributions, or a prolonged period of margin softness. Alon Refining Krotz Springs ARK's B3 CFR reflects single refinery risk and the lower complexity and profitability of the Krotz Springs refinery. ARK's refinery financial performance has improved significantly recently with the transportation of 25,000 to 30,000 bbls/day of WTI crude supply to the refinery. This discounted crude has significantly increased the gross margin of the refinery and allowed the refinery to run at higher utilization rates, thereby reducing unit operating cost. Nevertheless, despite recent performance improvements and the crude supply boost, Moody's believes ARK's profitability and utilization levels will continue to be constrained relative to debt levels. ARK's liquidity profile is constrained by the volatility and cyclicality of the refining business. In addition, ARK has limited sources of liquidity as a stand-alone entity, with no revolving credit facility. However, ARK's liquidity is enhanced by a supply and offtake agreement whereby J. Aron funds the purchase of crude for the Krotz Springs refinery. This arrangement accounts for almost all of the refinery's crude supply. Moody's believes there is little concern this agreement will be canceled by either party in the near term but if it was, substantial inventory would need to be financed by ARK in a reasonably short time. ARK relies solely on parent company ALJ as a source of liquidity in event of a disruption or cancellation of the J. Aaron agreement. Alternate liquidity is limited given that substantially all of the company's assets are pledged. Under Moody's LGD Methodology, ARK's secured notes is rated B3, equal to its CFR. The B3 notes rating reflects both ARK's overall probability of default, to which Moody's assigns a PDR of B3, and a loss given default of LGD3 - 49%. ARK's secured notes have a first lien on the Krotz Springs refinery, whereas the J. Aron supply and offtake agreement has a first lien on the Krotz Springs working capital. In the event of a distressed situation, the secured notes will need to rely on the intrinsic value of the Krotz Springs refinery. A ready buyer cannot be assured. Hence, Moody's considers asset recovery for the secured notes to be inferior to that of the J. Aron supply and offtake agreement at ARK. Considering the history of Gulf Coast refinery transactions and ARK's leverage profile, Moody's has incorporated a deficiency assumption of 50% for recovery in Moody's LGD analysis for the secured notes rating. Alon Refining Krotz Springs' stable outlook assumes that it will demonstrate consistent operating performance over the next 12-18 months, with a steady to declining leverage profile trend. The stable outlook also assumes that all future acquisitions and major growth capital expenditures are adequately funded with equity. To achieve a rating upgrade ARK must demonstrate sustained higher levels of profitability and lower debt levels. Future major acquisition and capital expenditures should be adequately funded with cash flow and/or equity while ARK continues with its original strategy of acquisition debt repayment. ARK's ratings could be downgraded if leverage materially rises due to downtime, debt funding of an acquisition, capital spending requirements, or a prolonged period of margin softness. The principal methodology used in rating Alon was the Global Refining and Marketing Rating Methodology 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. Alon USA Partners, LP is controlled and majority owned by Alon USA Energy, Inc. Alon Refining Krotz Springs is wholly-owned by Alon USA Energy, Inc, Texas. Alon USA Energy, Inc. is headquartered in Dallas, Texas. AMERICAN AIRLINES: Equity Holders May See Recovery -------------------------------------------------- Counsel for AMR Corporation and certain of the Company's direct and indirect domestic subsidiaries, including American Airlines, Inc. and AMR Eagle Holding Corporation, delivered a letter dated Jan. 3, 2013, to Brian S. Masumoto, Trial Attorney for the U.S. Department of Justice, Office of the United States Trustee, Southern District of New York. The letter from AMR's counsel, Harvey R. Miller, Esq., at Weil, Gotshal & Manges LLP, reads: "Reference is made to our letters dated December 20, 2011 and January 10, 2012, respectively. Those letters were responsive to inquiries made by your office as to the request made by a shareholder of record of AMR Corporation (Mr. Simon Mark Tabashnick) for the appointment of an equity committee in the pending chapter 11 cases. Reference also is made to related correspondence concerning the shareholder request from Skadden Arps Slate Meagher & Flom LLP, as attorneys for the Official Committee of Unsecured Creditors of AMR, et al. (UCC). On behalf of the Debtors, our letters opposed the appointment of an equity committee on the primary ground that there did not appear to be a substantial likelihood that [equity holders of AMR] would receive any meaningful distribution in the chapter 11 cases under a strict application of the absolute priority rule. In addition, we noted that equity holders appeared able to adequately represent their interests in the chapter 11 cases without an official statutory committee. "Since January of 2012, the Debtors have made remarkable progress in stabilizing their businesses and improving their prospects. As you know from media reports, the Debtors, the UCC and others are currently in the process of exploring strategic alternatives to effectuate the reorganization of the Debtors, as contemplated by the provisions of chapter 11 of the Bankruptcy Code. In that connection, it appears that the value of the Debtors has significantly appreciated. Depending upon the ultimate strategic alternative adopted and pursued, there exists a reasonable possibility that there may be value for AMR equity holders consistent with the absolute priority rule. "Accordingly, and in the interests of full transparency, we have concluded that it is appropriate to advise you of the change in circumstances concerning the potential economic interests of AMR equity holders. "Should you have any questions concerning the above, please do not hesitate to contact us." 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 APPAREL: December Comparable Store Sales Hiked by 14% -------------------------------------------------------------- American Apparel, Inc., announced preliminary comparable sales for the month ended Dec. 31, 2012, and reported that comparable store sales increased 14%, including a 9% increase in comparable store sales for its retail store channel and a 59% increase in net sales for its online channel. Wholesale net sales increased 12% for the month of December and total net sales increased 14% to $63.5 million. For the year ended Dec. 31, 2012, total net sales increased 13% to $616.7 million, with a 15% increase in comparable store sales, and a 12% increase in wholesale net sales. "December represents our 19th consecutive month of positive comparable sales," said Dov Charney, chairman and chief executive of American Apparel, Inc. "Good performance was achieved in all our businesses: retail, wholesale, and online. We experienced sales growth in almost all major markets and product categories. Our comparable store sales increase in retail and online is particularly important considering our performance last December when we had comparable store sales of 12%. We believe we can continue making store productivity gains and see comparable same store sales increase in all channels through 2013. Additionally, we expect to see corresponding improvements in gross margin through leverage of fixed overhead at the factory and store level." A copy of the press release is available for free at: http://is.gd/VTW94h About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. The Company reported a net loss of $39.31 million in 2011, and a net loss of $86.31 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $333.64 million in total assets, $319.76 million in total liabilities and $13.87 million in total stockholders' equity. AMERICAN REALTY: Seeks More Time to File Exit Plan -------------------------------------------------- Patrick Fitzgerald at Dow Jones' DBR Small Cap reports that American Realty Trust wants more time behind the shield of bankruptcy to figure out how to pay off a judgment from a failed apartment building sale. The Bankruptcy Court has set Feb. 15, 2013, as the deadline for any individual or entity to file non-governmental proof of claims against the Debtor. About American Realty Trust Dallas, Texas-based American Realty Trust, Inc., is a subsidiary of the real estate giant American Realty Investors Inc. Coping with a $73 million legal judgment from an apartment purchase that collapsed more than a decade ago, American Realty Trust, Inc., filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-10883) in Las Vegas on Jan. 26, 2012. The case was later dismissed on Aug. 1 by Judge Mike K. Nakagawa. Creditors David M. Clapper, Atlantic XIII, LLC, and Atlantic Midwest, LLC, sought the dismissal, citing, among other things, the Debtor has been stripped of assets prepetition and its ownership structure changed 10 days before the bankruptcy filing in an admitted effort to avoid disclosures to the Securities and Exchange Commission. American Realty Trust then filed for Chapter 11 protection (Bankr. N.D. Ga. Case No. 12-71453) on Aug. 29, 2012. Bankruptcy Judge Barbara Ellis-Monro presides over the case. Bryan E. Bates, Esq., and Gary W. Marsh, Esq. at McKenna Long & Aldridge, LLP represent the Debtor in its restructuring effort. The petition was signed by Steven A. Shelley, vice president. AMERICAN SUZUKI: Committee Taps Irell & Manella as Counsel ---------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 case of American Suzuki Motor Corporation has retained Irell & Manella LLP as its counsel. Jeffrey M. Reisner, a partner at I&M will be responsible for I&M's representation of the Committee. Mr. Reisner tells the Court that the hourly rates of I&M's personnel are: Partners Hourly Rate -------- ----------- Jeffrey M. Reisner $975 Alan J. Friedman $965 Mitch Cohen $935 Associates Hourly Rate ---------- ----------- Kerri A. Lyman $750 Benjamin Simler $495 Colin Murray $495 Michael McMahon $395 Paralegals Hourly Rate ---------- ----------- Lori S. Gauthier $245 To the best of the Committee's knowledge, I&M is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About American Suzuki Established in 1986, American Suzuki Motor Corporation is the sole distributor of Suzuki automobiles and vehicles in the United States. American Suzuki wholesales virtually all of its inventory through a network of independently owned and unaffiliated dealerships located throughout the continental United States. The dealers then market and sell the Suzuki Products to retail customers. Suzuki Motor Corp., the 100% interest holder in the Debtor, manufacturers substantially all of the Suzuki products. American Suzuki has 295 employees. There are approximately 220 automotive dealerships, over 900 motorcycle/ATV dealerships, and over 780 outboard marine dealerships. American Suzuki filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-22808) on Nov. 5, 2012, to sell the business to SMC, absent higher and better offers. SMC is not included in the Chapter 11 filing. The Debtor disclosed assets of $233 million and liabilities totaling $346 million. Debt includes $32 million owing to the parent on a revolving credit and $120 million for inventory financing. There is about $4 million owing to trade suppliers. The Debtor also filed a plan of reorganization together with the petition. Under the proposed Plan, the Motorcycles/ATV and Marine Divisions will remain largely unaffected including the warranties associated with the products. NounCo, Inc., a wholly owned subsidiary of SMC, will purchase the Motorcycles/ATV and Marine Divisions and the parts and service components of the Automotive Division. The restructured Automotive Division intends to honor automotive warranties and authorize the sale of genuine Suzuki automotive parts and services to retail customers through a network of parts and service only dealerships that will provide warranty services. Bankruptcy Judge Catherine E. Bauer signed an order Oct. 6 reassigning the case to Judge Scott Clarkson. ASMC's legal advisor on the restructuring is Pachulski Stang Ziehl & Jones LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins Riley & Scarborough LLP is serving as special counsel on automobile dealer and industry issues. Further, ASMC has proposed the appointment of Freddie Reiss, Senior Managing Director at FTI Consulting, as chief restructuring officer, and has also added two independent Board members to assist it through this period. Rust Consulting Omni Bankruptcy, a division of Rust Consulting, Inc., is the claims and notice agent. The Debtor has retained Imperial Capital, LLC as investment banker. SMC is represented by lawyers at Klee, Tuchin, Bogdanoff & Stern LLP. Frank Cadigan, Assistant U.S. Trustee for Region 16, appointed seven creditors to serve in the Official Committee of Unsecured Creditors. The Committee tapped to retain Irell & Manella LLP as its counsel, and AlixPartners, LLC as its financial advisor. Jan. 7, 2013, was the deadline for creditors to submit proofs of claims. Governmental units have until May 6 to submit proofs of claims. AMERICAN SUZUKI: Committee Taps AlixPartners LLC as Advisor ----------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 case of American Suzuki Motor Corporation has retained AlixPartners, LLC as its financial advisor. Alixpartners will, among other things: -- advise and assist the Committee in its analysis and monitoring of the Debtor's historical, current and projected financial affairs, including without limitation, schedules of assets and liabilities, statement of financial affairs, periodic operating reports, analyses of cash receipts and disbursements and analyses of cash flow forecasts; -- analyze the Debtor's business plans, including prospective financial statements and the related underlying assumptions and support thereto; and -- develop periodic monitoring reports to enable the Committee to effectively evaluate the Debtor's performance on an ongoing basis. AlixPartners' fee structure is based on the firm's standard hourly rates: Managing Directors $815 - $970 Directors $620 ? $760 Vice Presidents $455 ? $555 Associates $305 - $405 Analysts $270 ? $300 To the best of the Committee's knowledge, AlixPartners is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About American Suzuki Established in 1986, American Suzuki Motor Corporation is the sole distributor of Suzuki automobiles and vehicles in the United States. American Suzuki wholesales virtually all of its inventory through a network of independently owned and unaffiliated dealerships located throughout the continental United States. The dealers then market and sell the Suzuki Products to retail customers. Suzuki Motor Corp., the 100% interest holder in the Debtor, manufacturers substantially all of the Suzuki products. American Suzuki has 295 employees. There are approximately 220 automotive dealerships, over 900 motorcycle/ATV dealerships, and over 780 outboard marine dealerships. American Suzuki filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-22808) on Nov. 5, 2012, to sell the business to SMC, absent higher and better offers. SMC is not included in the Chapter 11 filing. The Debtor disclosed assets of $233 million and liabilities totaling $346 million. Debt includes $32 million owing to the parent on a revolving credit and $120 million for inventory financing. There is about $4 million owing to trade suppliers. The Debtor also filed a plan of reorganization together with the petition. Under the proposed Plan, the Motorcycles/ATV and Marine Divisions will remain largely unaffected including the warranties associated with the products. NounCo, Inc., a wholly owned subsidiary of SMC, will purchase the Motorcycles/ATV and Marine Divisions and the parts and service components of the Automotive Division. The restructured Automotive Division intends to honor automotive warranties and authorize the sale of genuine Suzuki automotive parts and services to retail customers through a network of parts and service only dealerships that will provide warranty services. Bankruptcy Judge Catherine E. Bauer signed an order Oct. 6 reassigning the case to Judge Scott Clarkson. ASMC's legal advisor on the restructuring is Pachulski Stang Ziehl & Jones LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins Riley & Scarborough LLP is serving as special counsel on automobile dealer and industry issues. Further, ASMC has proposed the appointment of Freddie Reiss, Senior Managing Director at FTI Consulting, as chief restructuring officer, and has also added two independent Board members to assist it through this period. Rust Consulting Omni Bankruptcy, a division of Rust Consulting, Inc., is the claims and notice agent. The Debtor has retained Imperial Capital, LLC as investment banker. SMC is represented by lawyers at Klee, Tuchin, Bogdanoff & Stern LLP. Frank Cadigan, Assistant U.S. Trustee for Region 16, appointed seven creditors to serve in the Official Committee of Unsecured Creditors. The Committee tapped to retain Irell & Manella LLP as its counsel, and AlixPartners, LLC as its financial advisor. Jan. 7, 2013, was the deadline for creditors to submit proofs of claims. Governmental units have until May 6 to submit proofs of claims. AMERICAN SUZUKI: Taps RLM Finsbury as Communications Consultant --------------------------------------------------------------- American Suzuki Motor Corporation sought approval from the U.S. Bankruptcy Court for the Central District of California to employ RLM Finsbury, LLC as communications consultant. RLM will render consulting services on behalf of the Debtor. Patrick S. Gallagher, Chief Administration Officer of RLM, tells the Court that the hourly rates of the professionals most likely to work on the matter are: Partners $675 - $1,000 Principals $480 - $575 Senior Vice Presidents $395 - $475 Vice Presidents $280 - $375 Senior Associates $250 - $275 Associates $180 - $250 Account Executives $125 - $175 To the best of the Debtor's knowledge, RLM does not hold or represent any interest adverse to the Debtor or to the estate on the matters for which its employment is proposed. About American Suzuki Established in 1986, American Suzuki Motor Corporation is the sole distributor of Suzuki automobiles and vehicles in the United States. American Suzuki wholesales virtually all of its inventory through a network of independently owned and unaffiliated dealerships located throughout the continental United States. The dealers then market and sell the Suzuki Products to retail customers. Suzuki Motor Corp., the 100% interest holder in the Debtor, manufacturers substantially all of the Suzuki products. American Suzuki has 295 employees. There are approximately 220 automotive dealerships, over 900 motorcycle/ATV dealerships, and over 780 outboard marine dealerships. American Suzuki filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-22808) on Nov. 5, 2012, to sell the business to SMC, absent higher and better offers. SMC is not included in the Chapter 11 filing. The Debtor disclosed assets of $233 million and liabilities totaling $346 million. Debt includes $32 million owing to the parent on a revolving credit and $120 million for inventory financing. There is about $4 million owing to trade suppliers. The Debtor also filed a plan of reorganization together with the petition. Under the proposed Plan, the Motorcycles/ATV and Marine Divisions will remain largely unaffected including the warranties associated with the products. NounCo, Inc., a wholly owned subsidiary of SMC, will purchase the Motorcycles/ATV and Marine Divisions and the parts and service components of the Automotive Division. The restructured Automotive Division intends to honor automotive warranties and authorize the sale of genuine Suzuki automotive parts and services to retail customers through a network of parts and service only dealerships that will provide warranty services. Bankruptcy Judge Catherine E. Bauer signed an order Oct. 6 reassigning the case to Judge Scott Clarkson. ASMC's legal advisor on the restructuring is Pachulski Stang Ziehl & Jones LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins Riley & Scarborough LLP is serving as special counsel on automobile dealer and industry issues. Further, ASMC has proposed the appointment of Freddie Reiss, Senior Managing Director at FTI Consulting, as chief restructuring officer, and has also added two independent Board members to assist it through this period. Rust Consulting Omni Bankruptcy, a division of Rust Consulting, Inc., is the claims and notice agent. The Debtor has retained Imperial Capital, LLC as investment banker. SMC is represented by lawyers at Klee, Tuchin, Bogdanoff & Stern LLP. Frank Cadigan, Assistant U.S. Trustee for Region 16, appointed seven creditors to serve in the Official Committee of Unsecured Creditors. The Committee tapped to retain Irell & Manella LLP as its counsel, and AlixPartners, LLC as its financial advisor. Jan. 7, 2013, was the deadline for creditors to submit proofs of claims. Governmental units have until May 6 to submit proofs of claims. AMERICAN SUZUKI: Consulting Omni OK'd as Claims Noticing Agent -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized American Suzuki Motor Corporation to employ Consulting Omni Bankruptcy, a division of Rust Consulting, Inc., as claims, noticing, and balloting agent. About American Suzuki Established in 1986, American Suzuki Motor Corporation is the sole distributor of Suzuki automobiles and vehicles in the United States. American Suzuki wholesales virtually all of its inventory through a network of independently owned and unaffiliated dealerships located throughout the continental United States. The dealers then market and sell the Suzuki Products to retail customers. Suzuki Motor Corp., the 100% interest holder in the Debtor, manufacturers substantially all of the Suzuki products. American Suzuki has 295 employees. There are approximately 220 automotive dealerships, over 900 motorcycle/ATV dealerships, and over 780 outboard marine dealerships. American Suzuki filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-22808) on Nov. 5, 2012, to sell the business to SMC, absent higher and better offers. SMC is not included in the Chapter 11 filing. The Debtor disclosed assets of $233 million and liabilities totaling $346 million. Debt includes $32 million owing to the parent on a revolving credit and $120 million for inventory financing. There is about $4 million owing to trade suppliers. The Debtor also filed a plan of reorganization together with the petition. Under the proposed Plan, the Motorcycles/ATV and Marine Divisions will remain largely unaffected including the warranties associated with the products. NounCo, Inc., a wholly owned subsidiary of SMC, will purchase the Motorcycles/ATV and Marine Divisions and the parts and service components of the Automotive Division. The restructured Automotive Division intends to honor automotive warranties and authorize the sale of genuine Suzuki automotive parts and services to retail customers through a network of parts and service only dealerships that will provide warranty services. Bankruptcy Judge Catherine E. Bauer signed an order Oct. 6 reassigning the case to Judge Scott Clarkson. ASMC's legal advisor on the restructuring is Pachulski Stang Ziehl & Jones LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins Riley & Scarborough LLP is serving as special counsel on automobile dealer and industry issues. Further, ASMC has proposed the appointment of Freddie Reiss, Senior Managing Director at FTI Consulting, as chief restructuring officer, and has also added two independent Board members to assist it through this period. Rust Consulting Omni Bankruptcy, a division of Rust Consulting, Inc., is the claims and notice agent. The Debtor has retained Imperial Capital, LLC as investment banker. SMC is represented by lawyers at Klee, Tuchin, Bogdanoff & Stern LLP. Frank Cadigan, Assistant U.S. Trustee for Region 16, appointed seven creditors to serve in the Official Committee of Unsecured Creditors. The Committee tapped to retain Irell & Manella LLP as its counsel, and AlixPartners, LLC as its financial advisor. Jan. 7, 2013, was the deadline for creditors to submit proofs of claims. Governmental units have until May 6 to submit proofs of claims. AMERIFORGE GROUP: Moody's Assign 'B2' CFR/PDR; Outlook Stable ------------------------------------------------------------- Moody's Investors Service has assigned a first time Corporate Family Rating and Probability of Default Rating of B2 to Ameriforge Group Inc., a manufacturer of products for the oil and gas, general industrial, power generation, and aerospace/transportation markets. Concurrently, Moody's has assigned a B1 rating to the company's new $82.5 million revolver and to its $350 million 7 year first lien term loan. The $150 million second lien term loan was rated Caa1. The rating outlook is stable. Proceeds from the transaction along with over $400 million in equity provided by First Reserve and its affiliates will go towards funding the acquisition of Ameriforge. Ratings Rationale The B2 CFR reflects the cyclical nature of the oil and gas markets, integration risks associated by the company's historical growth through acquisition strategy, and its small size relative to the market and relative to its larger competitors. Sales for 2011 only totaled $339 million although proforma for its 2011 acquisitions, total revenues for 2012 are expected to be above $600 million. The acquisitions support vertical integration and improve manufacturing and marketing scale. Nevertheless, the company competes against much larger players in a very large end market. The ratings reflect Moody's expectation for the company's 2013 Debt/EBITDA to be around 4 times with free cash flow generation between 5% and 8%. EBITDA coverage of interest for 2013 is estimated to be around 3 times. The rate of deleveraging is anticipated to initially be hindered by large expansion related capital expenditures and acquisitions. The following ratings/assessments have been assigned: Corporate Family Rating, B2 Probability of Default Rating, B2 $82.5 million revolver rated B1 LGD 3-36% $350 million term loan A rated B1 LGD 3-36% $150 million second lien term loan rated Caa1, LGD5-85% The rating outlook is stable. The facilities are jointly and severally guaranteed by the parent and each of the Borrower's existing and future direct or indirect domestic subsidiaries. The revolver and term loan are secured by a first priority interest in substantially all the tangible and intangible assets of the borrower and the guarantors while the second lien term loan is secured on the same assets on a second lien basis. The stable outlook reflects Moody's view that the company's performance is likely to strengthen within the current rating over the next 12 months. Ameriforge has grown meaningfully through acquisitions that were executed in 2011 and are still in the integration process. Moreover, Moody's anticipates further acquisitions and expansionary capital expenditures to constrain the level of cash flow available to reduce debt. The outlook also reflects the company's good liquidity due to its high revolver availability and good headroom under its covenants. What Could Pressure The Ratings If the company's leverage was to increase to above 5 times on a projected basis or EBITDA coverage of interest was anticipated to be sustained below 2 times, the ratings and/or outlook could be adversely affected. A decrease in year-over-year margins could also pressure the ratings, particularly if it is accompanied by revenue contraction. Additionally, a large debt financed acquisition could also pressure the ratings or the rating outlook. What Could Cause Positive Ratings Traction Sustained EBITDA coverage of interest above 3 times along with free cash flow to debt of over 7.5% and leverage under 3.5 times would be necessary for positive ratings traction to occur. The principal methodology used in rating Ameriforge Group, Inc. 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. Ameriforge Group Inc., headquartered in Houston, Texas, is a manufacturer of mission-critical products for a number of segments within the oil and gas, general industrial, power generation, and Aerospace/Transportation segment. Revenues for the LTM period ended in September 20, 2012 totaled over $700 million when including the acquisitions executed in 2012. Reported revenues for 2011 totaled $339 million. ATP OIL: Paul Bulmahn Steps Down as Executive Chairman ------------------------------------------------------ Paul Bulmahn, the Executive Chairman and Chairman of the Board of ATP Oil & Gas Corporation informed the Company's Board of Directors of his decision to step down as the Executive Chairman effective Dec. 31, 2012. Mr. Bulmahn will continue to serve as the Chairman of the Board. About ATP Oil 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. AVIS BUDGET: Zipcar Acquisition No Impact on Fitch Ratings ---------------------------------------------------------- Fitch Ratings believes there is no impact on the ratings of Avis Budget Group, Inc., and its debt-issuing subsidiary Avis Budget Car Rental, LLC following ABG's announcement on Jan. 2, 2013 of its intent to acquire the outstanding shares of Zipcar, Inc. (ZIP) for $12.25 per share, totaling approximately $500 million. A complete list of ratings appears at the bottom of this release. ABG has agreed to acquire ZIP, a leading car-sharing network, representing a transaction value totaling approximately $500 million. ABG intends to finance the purchase price primarily through incremental corporate debt borrowings. The combination is expected to produce $50 million to $70 million in annual synergies through lowering fleet costs, increasing utilization across the two companies, and increased incremental revenues, which Fitch believes is achievable given ABG's track record of managing operating leverage. The acquisition is subject to approval by regulators and ZIP shareholders, and is expected to be completed in the spring of 2013. Fitch views the ZIP acquisition to be neutral to ABG's current ratings, as the transaction is not expected to result in a significant increase in cash flow leverage. On a pro forma basis, corporate debt-to-annualized adjusted EBITDA, assuming $60 million of potential synergies, would increase approximately a quarter turn from 3.6x to 3.9x as of Sept. 30, 2012. Net of cash, leverage is expected to rise from 2.9x to 3.2x, which remains within ABG's articulated leverage target of between 3x and 4x. Fitch believes the acquisition is strategically complementary, as it expands ABG's current daily and weekly car rentals to include ZIP's hourly product offerings. In addition, Fitch expects ABG's standalone near-term operating performance will improve, given the continued strength of the used vehicle market and the company's efforts to optimize fleet utilization and operating efficiencies. RATING DRIVERS AND SENSITIVITIES Positive rating actions would be driven by ABG's ability to sustain improvements in operating leverage and liquidity, maintain appropriate capitalization and economic access to funding in the capital markets, and its ability to achieve proposed synergies and manage expected integration costs. Fitch would also view positively ABG's ability to manage net leverage, as measured by net corporate debt-to-adjusted EBITDA below its articulated range in the longer term. Conversely, negative rating actions could result from a material deterioration in revenue and cash flow generation resulting from declines in passenger volumes, rental rates and used car values which impair ABG's access to funding, liquidity, and/or capitalization. A meaningful and sustained increase in net leverage over and above ABG's articulated range could also yield negative rating actions. Fitch currently has these ratings: Avis Budget Group, Inc. -- Long-term Issuer Default Rating (IDR) 'B+'. Avis Budget Car Rental, LLC -- Long-term IDR 'B+'; -- Secured term loan 'BB+/RR1'; -- Senior secured debt 'BB+/RR1'; -- Senior unsecured debt 'B+/RR4'. The Rating Outlook is Positive. BEALL CORPORATION: Washington Agency Wants Case Dismissed --------------------------------------------------------- The State of Washington Department of Revenue asks the U.S. Bankruptcy Court for the District of Oregon to dismiss Beall Corporation's Chapter 11 case, for failing to remit the August 2012 sales tax in the amount of $13,481.22 (due Sept. 25, 2012) and the September 2012 sales tax in the amount of $10,816.15 (due Oct. 25, 2012), in violation of 11 U.S.C. Sec. 1112(a)(4)(1) and 28 U.S.C. Sec. 959(b). About Beall Corporation Portland, Oregon-based Beall Corporation, a manufacturer of lightweight, efficient, and durable tanker trucks, trailers and related products, filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 12-37291) on Sept. 24, 2012, estimating at least $10 million in assets and liabilities. Founded in 1905, Beall has four factories and nine sale branches across the U.S. The Debtor has 285 employees, with an average weekly payroll of $300,000. Judge Elizabeth L. Perris presides over the case. The Debtor has tapped Tonkon Torp LLP as counsel. The Debtor disclosed $14,015,232 in assets and $28,791,683 in liabilities as of the Chapter 11 filing. Robert D. Miller Jr., the U.S. Trustee for Region 18, appointed six members to the official committee of unsecured creditors. Ball Janik LLP represents the Committee. BEITH FARM: Case Summary & 4 Unsecured Creditors ------------------------------------------------ Debtor: Beith Farm, LLC 3221 Fiday Road Joliet, IL 60431 Bankruptcy Case No.: 13-00263 Chapter 11 Petition Date: January 4, 2013 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Janet S. Baer Debtor's Counsel: Steven B. Towbin, Esq. SHAW FISHMAN GLANTZ & TOWBIN, LLC 321 N. Clark Street, Suite 800 Chicago, IL 60654 Tel: (312) 276-1333 Fax: (312) 980-3888 E-mail: stowbin@shawfishman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ilnb13-00263.pdf The petition was signed by Amy Jean Capista, manager. BERRY PLASTICS: Named Pine Creek Partner to Board of Directors -------------------------------------------------------------- Berry Plastics Group, Inc., announced the appointment of Carl J. Rickertsen to its Board of Directors. Mr. Rickertsen is a managing partner of Pine Creek Partners, a private equity investment firm based in Washington, D.C. Mr. Rickertsen has worked in private equity since 1987. Prior to founding Pine Creek Partners, he was chief operating officer and partner of Thayer Capital Partners, a Washington, D.C.-based private equity investment firm. Mr. Rickertsen was a founding partner of three Thayer investment funds totaling over $1.4 billion and is a published author. "I am very proud to join the board of this exciting company," said Rickertsen. "Not only is Berry Plastics a leading global manufacturer and marketer of packaging products today, there is also much growth ahead for the Company as it continues to research, develop, and bring to market new and innovative customer solutions." Mr. Rickertsen has been a member of the board of directors of MicroStrategy (NASDAQ: MSTR), since October 2002. He joined the Apollo Senior Credit Fund (NYSE: AFT) board in 2011 and the board of Noranda (NYSE: NOR) in 2012. Mr. Rickertsen was formerly a board member of publicly-traded companies Convera Corporation, a search-engine software company, UAP Holding Corp., a distributor of agriculture products, and Homeland Security Capital Corporation, a specialized technology provider to government and commercial customers. "We are pleased to have Rick join Berry Plastics' Board of Directors and serve on our Board's Audit Committee," said Jon Rich, Chairman and CEO of Berry Plastics. "Rick brings with him a wealth of knowledge gained from his 25 years in the private equity sector and in his capacity of serving on boards of publicly traded companies. His knowledge, experience, and insight will be beneficial to Berry as we pursue our deleveraging and strategic growth initiatives." Mr. Rickertsen graduated with distinction from Stanford University and Harvard Graduate School of Business, obtaining a BS in Industrial Engineering from Stanford and MBA from Harvard. About Berry Plastics Berry Plastics Corporation manufactures and markets plastic packaging products, plastic film products, specialty adhesives and coated products. At Jan. 2, 2010, the Company had more than 80 production and manufacturing facilities, primarily located in the United States. Berry is a wholly-owned subsidiary of Berry Plastics Group, Inc. Berry Group is primarily owned by affiliates of Apollo Management, L.P. and Graham Partners. Berry, through its wholly owned subsidiaries operates five reporting segments: Rigid Open Top, Rigid Closed Top, Flexible Films, Tapes/Coatings and Specialty Films. The Company's customers are located principally throughout the United States, without significant concentration in any one region or with any one customer. On Dec. 3, 2009, Berry Plastics obtained control of 100% of the capital stock of Pliant upon Pliant's emergence from reorganization pursuant to a proceeding under Chapter 11 for a purchase price of $602.7 million. Pliant is a leading manufacturer of value-added films and flexible packaging for food, personal care, medical, agricultural and industrial applications. The acquired business is primarily operated in Berry's Specialty Films reporting segment. The Company's balance sheet at Sept. 29, 2012, showed $5.10 billion in total assets, $5.55 billion in total liabilities, $23 million in redeemable shares, and a $475 million total stockholders' deficit. * * * Berry Plastics has a 'B3' corporate family rating, with stable outlook, from Moody's Investors Service. Moody's said in April 2010 that Berry's B3 CFR reflects weakness in certain credit metrics, financial aggressiveness and acquisitiveness and a continued difficult operating and competitive environment especially in the flexible plastics and tapes segments. The rating also reflects the Company's exposure to more cyclical end markets, relatively weak contracts with customers and a high percentage of commodity products. In November 2011, Standard & Poor's Ratings Services affirmed the 'B-' corporate credit rating on Berry and its holding company parent, Berry Plastics Group Inc. "The ratings on Berry reflect the risks associated with the company's highly leveraged financial profile and acquisition- driven growth strategy as well as its fair business risk profile," said Standard & Poor's credit analyst Cynthia Werneth. BIG M INC: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Big M, Inc. dba Mandee Stores dba Annie sez dba Afaze 12 Vreeland Avenue Totowa, NJ 07512 Bankruptcy Case No.: 13-10233 Chapter 11 Petition Date: January 6, 2013 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Donald H. Steckroth Debtor's Counsel: Kenneth A. Rosen, Esq. LOWENSTEIN SANDLER LLP 65 Livingston Avenue Roseland, NJ 07068 Tel: (973) 597-2500 Fax: (973) 597-2400 E-mail: krosen@lowenstein.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $50,000,001 to $100,000,000 The petition was signed by Glenn R. Langberg, chief restructuring officer. Debtor's List of 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ CIT Group/Commercial Factor $1,980,601 Services Inc. 11 West 42nd St., 12F New York, NY 10036 G III Leather Trade $578,864 1000 Secaucus Road Secaucus, NJ 07094 Ambiance Apparel Trade $470,202 930 Towne Avenue Fed Ex: 2542-4727-8 Los Angeles, CA 90021 Alva Partnership Lease $426,420 6911 Eighth Avenue Brooklyn, NY 11204 Wells Fargo Financial Factor $338,188 100 Park Avenue, 3rd Flr New York, NY 10017 Milberg Factors Factor $286,721 99 Park Avenue, 21st Flr New York, NY 10016 Epicor Retail Solutions Trade $241,181 Corp. Sterling Factors Corp. Factor $213,949 Acadia Marcus Ave LLC Lease $203,521 Prime Business Credit Factor $183,279 Joe Benbasset Inc. Trade $178,120 Amanda Vinci Trade $173,612 Hana Financial Factor $142,883 Columbia Place LLC Lease $137,324 Alan & Jeffrey Resnick Lease $136,456 Imperial Fragrances, LLC Trade $134,236 Have Fashion Inc. Trade $121,310 KIOP Merrick LP Lease $119,868 Millburn Realty Assoc. Lease $116,484 Levin Management Corp. Lease $114,280 KIR Glen Cove 025, LLC Lease $111,479 Sunbeam Packaging Trade $108,084 Treeco/Center, LP Lease $102,020 XOXO Kellwood Company Trade $101,772 Poof Apparel Corp. Trade $101,428 East 8th Group LLC Trade $100,993 Soho Fashion Ltd. Trade $98,888 Midway Shopping Lease $98,350 Center LP IBM Credit LLC Lease $97,698 Laundry Service Trade $94,200 BRAFFITS CREEK: Meeting of Creditors Continued Until Jan. 17 ------------------------------------------------------------ The U.S. Trustee for Region 17 continued until Jan. 17, 2013, at 12 p.m., the meeting of creditors in the Chapter 11 case of Braffits Creek Estates, LLC. Las Vegas, Nevada-based Braffits Creek Estates, LLC is a single asset real estate that owns raw land located 3200 Subdivision, in Iron County, Utah. The Company filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-19780) on Aug. 23, 2012. Bankruptcy Judge Bruce A. Markell presides over the case. David J. Winterton, & Assoc., Ltd., represents the Debtor's restructuring effort. The Debtor disclosed $25,003,800 in assets and $33,959,140 in liabilities as of the Chapter 11 filing. BRANCHBURG COMMERCE: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Branchburg Commerce Park, LLC 110 Woodfern Road, Box 25 Neshanic Station, NJ 08853 Bankruptcy Case No.: 13-10187 Chapter 11 Petition Date: January 4, 2013 Court: U.S. Bankruptcy Court District of New Jersey (Trenton) Judge: Raymond T. Lyons, Jr. Debtor's Counsel: David L. Bruck, Esq. GREENBAUM, ROWE, SMITH & DAVIS, LLP P.O. Box 5600 Woodbridge, NJ 07095 Tel: (732) 549-5600 Fax: (732) 549-1881 E-mail: bankruptcy@greenbaumlaw.com Scheduled Assets: $3,615,245 Scheduled Liabilities: $2,647,065 A copy of the Company's list of its 10 unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb13-10187.pdf The petition was signed by Samuel Ornstein, manager. CALYPTE BIOMEDICAL: Inks New Contracts With CEO and CFO ------------------------------------------------------- Calypte Biomedical Corporation entered into employment agreements with Adel Karas, its President and Chief Executive Officer and a member of its Board of Directors, and Kartlos Edilashvili, its Chief Financial Officer and a member of its Board of Directors, each effective on Jan. 1, 2013. The agreement with Mr. Karas provides that he will be employed as President and Chief Executive Officer, based in Dubai, United Arab Emirates, reporting to the Board of Directors. The agreement requires Mr. Karas to devote substantially all reasonable and necessary time, efforts, skills and attention for the benefit of and with his primary attention to the affairs of the Company. Under his agreement, Mr. Karas is entitled to a base salary of $90,000 per year, increased to $180,000 at such time as the Company achieves profitability. Mr. Karas's agreement prohibits him from competing with the Company during his employment and for a period of 12 months thereafter in the event of his termination for Cause or six months thereafter in all other events. Mr. Edilashvili's agreement is substantially identical to Mr. Karas's, except as follows: (i) Mr. Edilashvili is employed as Chief Financial Officer reporting to the Chief Executive Officer; (ii) his initial base salary is $50,000, increasing to $100,000 when the Company achieves profitability; and (iii) he will be entitled to six months of salary continuation in the event his employment is terminated by the Company other than for cause or by Mr. Edilashvili for good reason. About Calypte Biomedical Portland, Oregon-based Calypte Biomedical Corporation develops, manufactures, and distributes in vitro diagnostic tests, primarily for the diagnosis of Human Immunodeficiency Virus ("HIV") infection. Following the Company's 2011 results, OUM & Co. LLP, in San Francisco, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring operating losses and negative cash flows from operations, and management believes that the Company's cash resources will not be sufficient to sustain its operations through 2012 without additional financing. The Company reported a net loss of $693,000 in 2011, compared with net income of $8.84 million in 2010. The Company's balance sheet at March 31, 2012, showed $1.95 million in total assets, $6.43 million in total liabilities, and a $4.48 million total stockholders' deficit. Bankruptcy Warning The Company said in the 2011 annual report that, in July 2010 the Company entered into a series of agreements providing for (i) the restructuring of the Company's outstanding indebtedness to Marr and SF Capital and (ii) the transfer of the Company's interests in the two Chinese joint ventures, Beijing Marr and Beijing Calypte, to Kangplus. Under the Debt Agreement, $6,393,353 in outstanding indebtedness was agreed to be converted to 152,341,741 shares of the Company's common stock, and the Company's remaining indebtedness to Marr, totaling $3,000,000 was cancelled. In consideration for that debt restructuring, the Company transferred its equity interests in Beijing Marr to Kangplus pursuant to the Equity Transfer Agreement and transferred certain related technology to Beijing Marr. The Company has also agreed to transfer its equity interests in Beijing Calypte to Marr or a designate of its choosing. The transactions contemplated by the Debt Agreement and the Equity Transfer Agreement are subject to Chinese government registration of the transfer of the equity interests. This registration has now been approved, and the Shares were issued in March 2012. Under the debt agreement with SF Capital, $2,008,259 in outstanding indebtedness was converted to 47,815,698 shares of the Company's common stock. Notwithstanding this debt restructuring, the Company's significant working capital deficit and limited cash resources place a high degree of doubt on its ability to continue its operations. In light of the Company's existing operations and financial challenges, the Company is exploring strategic and financing options. Failure to obtain additional financing will likely cause the Company to seek bankruptcy protection. CARY CREEK: Files for Chapter 11 in North Carolina -------------------------------------------------- Cary Creek Limited Partnership sought Chapter 11 protection (Bankr. E.D.N.C. Case No. 13-00041) on Jan. 3, 2013. Cary Creek is the owner of 1009 acres of land located adjacent to the west boundary of NC Highway 55 immediately sought of its interchange with NC-540/I-540, in Cary, Wake County, North Carolina. The property is managed by American Asset Corporation. The primary secured creditor is Bank of America, N.A. BoA has a first mortgage lien on the Debtor's property. According to the case docket, there's a meeting of creditors under 11 U.S.C. Sec. 341(a) on Jan. 29, 2013, at 10:00 a.m. Proofs of claim are due April 29. Governmental entities are required to send in claims by July 2. The Debtor has been ordered to submit a Chapter 11 plan and disclosure statement by April 3, 2013. A status hearing is set for Jan. 10, 2013, at 10:00 a.m. Cary Creek is seeking joint administration of its Chapter 11 case with the consolidated Chapter 11 cases of Brier Creek Corporate Center Associates Limited Partnership, et al. Cary Creek, Brier Creek Debtors are parties to litigation pending in the Bankruptcy Court against BofA, Adv. Pro No. 12-00121. The BofA litigation was instituted on Oct. 13, 2011, in Mecklenburg County Superior Court, and was removed and subsequently transferred to the Bankruptcy Court after the Brier Creek Debtors filed for Chapter 11 bankruptcy protection in March 2012. Cary Creek is related to the Brier Creek Debtors through common ownership, common property management, and common secured and unsecured creditors. About Brier Creek Corporate Brier Creek Corporate Center Associates Limited, Whitehall Corporate Center #4, LLC, and seven other related entities filed for Chapter 11 protection (Bankr. E.D.N.C. Lead Case No. 12-01855) on March 9, 2012. The Debtors own real property located in Wake County, North Carolina and Mecklenburg County, North Carolina. In most instances, the real property owned by the Debtors consists of land upon which is constructed commercial or industrial buildings consisting of office, service or retail space. The affiliates that also sought bankruptcy protection are: Brier Creek Office #4, LLC; Brier Creek Office #6, LLC; Service Retail at Brier Creek, LLC; Service Retail at Whitehall II L.P.; Shopton Ridge 30-C, LLC; Whitehall Corporate Center #4, LLC; Whitehall Corporate Center #5, LLC; and Whitehall Corporate Center #6, LLC. Brier Creek is a 106-acre development that is to have 2.8 million square feet of commercial space. Whitehall has 146 acres and will have 4 million square feet on completion. Brier Creek Corporate scheduled assets of $19,713,147 and liabilities of $18,086,183. Judge Stephani W. Humrickhouse oversees the case. Northen Blue, LLP, serves as counsel to the Debtors. C. Richard Rayburn, Jr. and the firm Rayburn Cooper & Durham, P.A., serve as special counsel. Grant Thornton LLP is the accountant. Bidencope & Associates was hired as appraiser. The petitions were signed by Terry Bradshaw, vice president. CARY CREEK: Proposes Northen Blue as Bankruptcy Counsel ------------------------------------------------------- Cary Creek Limited Partnership is seeking approval from the Bankruptcy Court to hire John A. Northen and the firm of Northen Blue, LLP, as bankruptcy counsel. The firm will represent the Debtor in connection with the restructuring of existing secured and unsecured debt in the context of a Chapter 11 proceeding. With respect to the pending litigation with Bank of America, the firm expects to associate the firm of Rayburn Cooper & Durham, P.A., as special counsel due to RC&D's existing representation of the Debtor in that matter. Mr. Northen's hourly rate is $450 per hour and Vicki L. Parrott is $350 per hour. The firm received an initial retainer of $15,000, of which $4,707 has been expended in payment of prepetition services and expenses. Mr. Northen and the firm represent no other entity in connection with the Chapter 11 cases, represents or holds no interest adverse to the interest of the estates with respect to the matters on which they are to be employed, and are disinterested as that term is defined in 11 U.S.C. Sec. 101. About Cary Creek Cary Creek Limited Partnership sought Chapter 11 protection (Bankr. E.D.N.C. Case No. 13-00041) on Jan. 3, 2013. Cary Creek is the owner of 1009 acres of land located adjacent to the west boundary of NC Highway 55 immediately sought of its interchange with NC-540/I-540, in Cary, Wake County, North Carolina. The property is managed by American Asset Corporation. CARY CREEK: Proposes Bidencope as Appraiser ------------------------------------------- Cary Creek Limited Partnership is seeking approval from the Bankruptcy Court to hire Damon Bidencope and the firm of Bidencope & Associates to prepare a written appraisal and to the extent needed, supporting testimony in deposition and a trial, with respect to the fair market value of the Debtor's property. Bidencope has agreed to represent the Debtor for the following compensation: a. A flat fee in the amount of $2,500 for the written appraisal. b. Additional compensation for time and expenses incurred in connection with preparation for and testimony in deposition or at trial, at customary hourly rates, and subject to allowance and approval in accordance with the provisions of the Bankruptcy Code. The appraiser represents or holds no interest adverse to the interests of the estate or with respect to the matters on which he is to be employed, and is disinterested as that term is defined in 11 U.S.C. Sec. 101. About Cary Creek Cary Creek Limited Partnership sought Chapter 11 protection (Bankr. E.D.N.C. Case No. 13-00041) on Jan. 3, 2013. Cary Creek is the owner of 1009 acres of land located adjacent to the west boundary of NC Highway 55 immediately sought of its interchange with NC-540/I-540, in Cary, Wake County, North Carolina. The property is managed by American Asset Corporation. CBS I LLC: To Refinance U.S. Bank Loan Under Second Amended Plan ---------------------------------------------------------------- CBS I, LLC, has filed a second amended disclosure statement in support of its reorganization plan dated Nov. 14, 2012. The disclosure statement hearing is scheduled for Jan. 23, 2013, at 9:30 a.m. The classification and treatment of claims under the plan are: A. Uncassified claims, consisting of administrative claims and priority tax claims, will be paid the allowed amount in cash on or prior to the Effective Date, or receive other treatment as agreed by the Holder of the Allowed Priority Claim and the Debtor. B. Allowed Secured Claims of U.S. Bank will receive a U.S. Bank Refinanced Secured Loan evidenced by the Plan and the Plan Confirmation Order, which will be secured by the U.S. Bank Property. The U.S. Bank Refinanced Secured Loan will modify the U.S. Bank Loan to allow Debtor to obtain secondary financing on the Property of up to $750,000 in the future in order to repair, remodel, and make capital improvements to the Property. C. Allowed General Unsecured Deficiency Claims will only include Deficiency Claims of U.S. Bank to the extent Allowed by the Court, separate from all other General Unsecured Creditors. Holders of Class 2 Allowed General Unsecured Deficiency Claims will receive payment of 5% of their Allowed Deficiency Claim without interest or $99,884.95. This amount will be paid in 60 equal monthly payments in the amount of $1,664.75 to begin on the first of the month immediately following the Effective Date of the Plan. D. Other Allowed General Unsecured Claims will only include (i) Holders of Allowed General Unsecured Claim's listed in Debtor's Schedules as Creditors Holding Unsecured Nonpriority Claims that are not disputed, contingent, or unliquidated; and (ii) Claims resulting from rejection of executory contracts and unexpired leases. Holders of Class 3 Other Allowed General Unsecured Claims will receive payment of 100% of their filed claim to be paid in six months after entry of the confirmation order with simple interest at a rate of 3%. E. Insider Unsecured Claims will receive no payments pursuant to this Plan. A copy of the disclosure statement is available for free at: http://bankrupt.com/misc/CBS_I_ds_2amended.pdf About CBS I CBS I, LLC, filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-16833) on June 7, 2012. The Company is a limited liability company whose sole asset consists of 71,546 square feet of gross rentable building area on a site containing approximately 206,474 net square feet or 4.74 acres, located at 10100 West Charleston Boulevard, in Las Vegas, Nevada. Debtor is owned by Jeff Susa (25%), Breslin Family Trust (25%), M&J Corrigan Family Trust (25%) and S&L Corrigan Family Trust (25%). The Debtor scheduled assets of $19,356,448 and liabilities of $19,422,805. Judge Mike K. Nakagawa presides over the case. Jeff Susa signed the petition as manager. The bankruptcy filing came after U.S. Bank, trustee for holders of the $16.4 million mortgage, initiated foreclosure proceedings and filed a lawsuit May 24, 2012, in Clark County District Court asking that a receiver be appointed to take control of the Summerlin building in Howard Hughes Plaza at 10100 West Charleston Blvd., just west of Hualapai Way. Zachariah Larson, Esq., at Marquis Aurbach Coffing, in Las Vegas, represents the Debtor as bankruptcy counsel. Dimitri P. Dalacas, Esq., at Flangas McMillan Law Group, in Las Vegas, represents the Debtor as special counsel. CHAPALA INC: Case Summary & 7 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Chapala, Inc. dba Supermercado Y Carniceria Chapala 7117 N. Clark Chicago, IL 60626 Bankruptcy Case No.: 13-00423 Chapter 11 Petition Date: January 6, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtor's Counsel: Midong Michael Choi, Esq. SHINWON LAW 921 Oakton Elk Grove Village, IL 60007 Tel: (847) 434-0100 Fax: (847) 239-7928 E-mail: puter808@sbcglobal.net Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's seven largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ilnb13-00423.pdf The petition was signed by Miguel Hernandez, president, secretary. CENTURY SHREE: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Century Shree Corp. dba Hampton Inn & Suites 2366 Cedar Street Rawlins, WY 82301 Bankruptcy Case No.: 13-20008 Chapter 11 Petition Date: January 4, 2013 Court: U.S. Bankruptcy Court District of Wyoming (Cheyenne) Debtor's Counsel: Ken McCartney, Esq. THE LAW OFFICES OF KEN MCCARTNEY, P.C. P.O. Box 1364 Cheyenne, WY 82003 Tel: (307) 635-0555 Fax: (307) 635-0585 E-mail: bnkrpcyrep@aol.com Scheduled Assets: $5,819,324 Scheduled Liabilities: $8,337,177 A copy of the Company's list of its 18 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wyb13-20008.pdf The petition was signed by Falgun Patel, president. CONQUEST SANTA FE: Has Interim Nod to Use LPP Cash Collateral ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona granted Conquest Santa Fe, L.L.C., interim authorization to use cash collateral of secured lender LPP Mortgage, Ltd. The Debtor will use cash collateral to pay ordinary, necessary and customary expenses relating to operations of the Hyatt Place Santa Fe Hotel, in Santa Fe, New Mexico. The Debtor will not use cash collateral to pay any insiders or affiliates or any fees of professionals. As adequate protection for the Debtor's use of cash collateral, LLP Mortgage is granted fully perfected replacement liens, in an amount equal to the Cash Collateral used by the Debtor, of the same nature and priority as the liens that LPP held prepetition. LPP Mortgage is the successor in interest to the loans. In January 2010, the original lender, Charter Bank of Santa Fe, was closed by the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation was named receiver. The FDIC, as receiver, assigned the loan to Charter Bank of Albuquerque, NM, a subsidiary of Beal Financial Corp., effective Jan. 22, 2010. Effective Oct. 14, 2011, New Charter was merged with and into Beal Bank, SSB, with Beal Bank as the surviving entity. Beal Bank, as successor-by-merger to New Charter, then assigned the loan to Beal Nevada Corp., which then assigned the loan to LPP Mortgage. About Conquest Santa Fe Conquest Santa Fe, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-24937) in Tucson, Arizona, Nov. 16, 2012, estimating at least $10 million in assets and liabilities. Judge Eileen W. Hollowell presides over the case. Frederick J. Petersen, Esq., and Lowell E. Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., preside over the case. The petition was signed by Morris Eigen, member. CONQUEST SANTA FE: Hiring MC&R as Counsel ----------------------------------------- Conquest Santa Fe, L.L.C., asks the U.S. Bankruptcy Court for the District of Arizona for authorization to employ Mesch, Clark & Rothschild, P.C., as its counsel. MC&R will render these services: a. To give the Debtor legal advice with respect to its power and duties in the continued operation and management of its properties. b. To take necessary action to recover certain property and money owed to the Debtor, if necessary. c. To represent the Debtor in litigation. d. To prepare on behalf of the Debtor, the necessary applications, answers, complaints, orders, reports, disclosure statement, plan of reorganization, motions, and other legal papers. e. To perform all other legal services that the Debtor deems necessary. The hourly rates of MC&R attorneys and staff who may work on this case and their hourly rates are: Lowell E. Rothschild, Esq. $550 Scott H. Gan, Esq. $450 Frederick J. Petersen, Esq. $425 Partners $300 to $550 Associates $175 to $295 Paralegals $180 Legal Assistants $85 to $115 Law Clerks $100 MC&R does not represent any other entity having an adverse interest in connection with the Debtor's case. About Conquest Santa Fe Conquest Santa Fe, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-24937) in Tucson, Arizona, Nov. 16, 2012, estimating at least $10 million in assets and liabilities. Judge Eileen W. Hollowell presides over the case. Frederick J. Petersen, Esq., and Lowell E. Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., preside over the case. The petition was signed by Morris Eigen, member. CONQUEST SANTA FE: Files List of 20 Largest Unsecured Creditors --------------------------------------------------------------- Conquest Santa Fe, L.L.C., has filed with the Bankruptcy Court a list of its 20 largest unsecured creditors: Entity Type of Claim Claim Amount ------ ------------- ------------ Graham Mechanical Vendor $33,143.95 Blueline Construction Vendor $23,279.00 Granite Creations Vendor $14,177.90 Sysco Vendor $4,399.99 Ecolab Equipment Care Vendor $1,630.73 United Healthcare Vendor $1,446.52 MSI Vendor $1,058.33 Velocity Vendor $896.90 Lodgenet Interactive Co Vendor $622.08 Zarape LLC Vendor $530.12 Thyssenkrupp Elevator Corp Vendor $481.56 Color Glo Int'l Vendor $308.34 Tri State Music & Video Vendor $240.89 USA Today Vendor $218.13 Navital Lease Finance Corp Vendor $166.97 Southern Wine & Spirits Vendor $145.20 of New Mexico Cintas Corporation Vendor $130.41 Vistar Vendor $128.03 The Santa Fe New Mexican Vendor $78.13 HD Supply Facilities $61.88 Maintenance Ltd About Conquest Santa Fe Conquest Santa Fe, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-24937) in Tucson, Arizona, Nov. 16, 2012, estimating at least $10 million in assets and liabilities. Judge Eileen W. Hollowell presides over the case. Frederick J. Petersen, Esq., and Lowell E. Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., preside over the case. The petition was signed by Morris Eigen, member. CONQUEST SANTA FE: Hiring W&H for New Mexico Litigation ------------------------------------------------------- Conquest Santa Fe, L.L.C., asks the U.S. Bankruptcy Court for the District of Arizona for authorization to employ Walcott & Henry, P.C., through Donald A. Walcott, Esq., and Charles V. Henry, Esq., as special counsel to the Debtor in relation to pending litigation in the United States District Court of New Mexico, LLP Mortgage, Ltd. v. Conquest Santa Fe, L.L.C., et al., Case No. 12-CV-00260. To the best of the Debtor's knowledge, W&H does not represent or hold any interest adverse to the Debtor or to its estate with respect to the New Mexico Litigation in which W&H is to be employed, and that W&H has no connection with the creditors, any other parties-in-interest, any of their respective attorneys, or any person employed in the office of the United States Trustee. The Debtor's bankruptcy counsel, Mesch, Clark & Rothschild, P.C., transferred a portion of its retainer funds in the amount of $2,500 to be held as a retainer by W&H. W&H attorneys and staff who may work on the New Mexico Litigation and their hourly rates are: Donald A. Walcott, Esq. $250.00 Charles V. Henry, Esq. $200.00 About Conquest Santa Fe Conquest Santa Fe, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-24937) in Tucson, Arizona, Nov. 16, 2012, estimating at least $10 million in assets and liabilities. Judge Eileen W. Hollowell presides over the case. Frederick J. Petersen, Esq., and Lowell E. Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., preside over the case. The petition was signed by Morris Eigen, member. CONQUEST SANTA FE: Files Schedules of Assets and Liabilities ------------------------------------------------------------ Conquest Santa Fe, L.L.C., filed with the Bankruptcy Court for the District of Arizona its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $11,000,000 B. Personal Property $1,052,967 C. Property Claimed as Exempt D. Creditors Holding $6,820,636 Secured Claims E. Creditors Holding $26,079 Unsecured Priority Claims F. Creditors Holding $2,823,142 Unsecured Non-priority Claims ----------- ----------- TOTAL $12,052,967 $9,669,857 About Conquest Santa Fe Conquest Santa Fe, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-24937) in Tucson, Arizona, Nov. 16, 2012, estimating at least $10 million in assets and liabilities. Judge Eileen W. Hollowell presides over the case. Frederick J. Petersen, Esq., and Lowell E. Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., preside over the case. The petition was signed by Morris Eigen, member. COUGAR SPRINGS: Case Summary & 17 Unsecured Creditors ----------------------------------------------------- Debtor: Cougar Springs Ranch, LLC aka Grove Creek Ranch P.O. Box 2506 Grand Junction, CO 81502 Bankruptcy Case No.: 13-10100 Chapter 11 Petition Date: January 4, 2013 Court: U.S. Bankruptcy Court District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Lee M. Kutner, Esq. KUTNER MILLER BRINEN, P.C. 303 E. 17th Avenue, Suite 500 Denver, CO 80203 Tel: (303) 832-2400 E-mail: lmk@kutnerlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 17 largest unsecured creditors is available for free at http://bankrupt.com/misc/cob13-10100.pdf The petition was signed by Rosemarie Elisabeth Glas. CRAWFORDSVILLE LLC: Case Has Natural Pork's Committee ----------------------------------------------------- According to a notice, the United States Trustee for Region 12 appointed the Official Committee of Unsecured Creditors previously appointed in the case of Natural Pork Production II, LLP, to serve as the committee in the case of Crawfordsville, LLC. As reported in the Oct. 17, 2012 edition of the TCR, members of the creditors committee in Natural Pork's cases are: 1. Alan Axelrod Acting Chairperson 400 Alton Road, Suite 603 Miami Beach, FL 33139 Tel: (786) 216-7091 E-mail: alan@axelrodinvestments.com 2. Aribe & Manuela Axelrod c/o Alan Alexlrod 1201 S. Ocean Drive, Suite 2201N Hollywood, FL 33013 Tel: (786) 216-7091 E-mail: alan@axelrodinvestments.com 3. Frederick W.W. Bolander c/o Gabriel Ventures Partners 350 Marine Pkwy, Suite 200 Redwood City, CA 94065 Tel: (650) 551-5010 E-mail: rbolander@gabrielvp.com 4. R II B Family, LLC c/o Rick Bolander Gabriel Ventures Partners 350 Marine Pkwy, Suite 200 Redwood City, CA 94605 Tel: (650) 551-5010 E-mail: rbolander@gabrielvp.com 5. Revocable Trust of Frederick & Rinske Bolander c/o Gabriel Ventures Partners 350 Marine Pkwy, Suite 200 Redwood City, CA 94065 Tel: (650) 551-5010 E-mail: rbolander@gabrielvp.com About Crawfordsville Crawfordsville, LLC, and three affiliates sought Chapter 11 protection (Bankr. S.D. Iowa Lead Case No. 12-03748) in Council Bluffs, Iowa, on Dec. 7, 2012. Crawfordsville filed schedules disclosing $5.17 million in assets and $32.2 million in liabilities, including $19.6 million owed to secured creditors. The Debtor owns parcels of land in Montgomery County, Indiana. A debtor-affiliate, Brayton LLC, disclosed assets of $14.2 million and liabilities of $27.8 million in its schedules. The Debtor owns the 20-acre of land and buildings known as Goldfinch Place in Audobon County, Iowa, which is valued at $1.68 million. The schedules say the company has $10.5 million in claims for disgorgement and damages resulting from fraudulent conveyances and preferential payments to dissociated partners. Crawfordsville, et al., are subsidiaries of hog raiser Natural Pork Production II, LLP, which filed for Chapter 11 bankruptcy (Bankr. S.D. Iowa Case No. 12-02872) on Sept. 11, 2012, in Des Moines. D MEDICAL: CFO Dana to Resign Due to Disputes on Duties ------------------------------------------------------- D. Medical Industries Ltd. announced that its current chief financial officer, Mr. David Dana, has notified the Company of his decision to terminate his employment with the Company, effective as of March 3, 2013. Mr. Dana stated in his resignation letter that the reason for his resignation is a dispute concerning the performance of his duties. About D. Medical D. Medical -- http://www.dmedicalindustries.com/-- is a medical device company that holds through its subsidiaries a portfolio of products and intellectual property in the area of insulin and drug delivery. D. Medical has developed durable and semi-disposable insulin pumps, which continuously infuse insulin into a patient's body, using its proprietary spring-based delivery technology. D. Medical believes that its spring-based delivery mechanism is cost- effective compared to the motor and gear train mechanisms that drive competitive insulin pumps and also allows it to incorporate certain advantageous functions and design features in its insulin pumps. The Company reported a net loss of NIS 48.30 million on NIS 1.51 million of sales for 2011, compared with a net loss of NIS 45.89 million on NIS 1.26 million of sales for 2010. The Company's balance sheet at Sept. 30, 2012, showed NIS8.7 million in total assets, NIS7.7 million in total liabilities, and equity of NIS1.0 million. As reported by the Troubled Company Reporter on July 18, 2012, Kesselman & Kesselman, in Haifa, Israel, expressed substantial doubt about D. Medical Industries Ltd.'s ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses and negative cash flows from operations. DAYTOP VILLAGE: Plan Filing Exclusivity Expires Jan. 10 ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended, for the second time, Daytop Village Foundation Incorporated, et al.'s exclusive periods to file and solicit acceptances for the proposed plan or plans of reorganization until Jan. 10, 2013, and March 15, respectively. Previously, the Official Committee of Unsecured Creditors objected to the Debtor's motion for an extension, stating that, among other things: (i) the Debtors have failed to make sufficient progress on their restructuring to justify a further sixty day extension of exclusivity; (ii) the Debtors continue to lose approximately $400,000 per month thereby further jeopardizing any recovery for creditors; and (iii) the continuation of sole exclusivity for the Debtors is impeding the Committee's ability to explore alternatives which are consistent with the Debtor's healthcare mission and its duty to maximize creditor recoveries. About Daytop Village Daytop Village Foundation Incorporated, along with affiliate Daytop Village Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11436) on April 5, 2012, in Manhattan. In 1963, Father William O'Brien and Dr. Alexander Bassin founded the Daytop Lodge, a substance abuse treatment facility, in Staten Island. Today, Daytop is the third largest substance abuse agency operating in the State of New York and the only substance abuse agency operating world-wide under a contract with the Unites States State Department. It provides family-oriented substance abuse treatment for adults and adolescents. Through six residential facilities and eight outreach clinics in New York, Daytop offers individual treatment plans by providing professional counseling, medical, social and spiritual attention. Judge Shelley C. Chapman presides over the Chapter 11 cases. Lowenstein Sandler PC is the Debtors' counsel. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. The Debtors' Restructuring and Management Officer is Marotta Gund Budd Dezera LLC. The petition was signed by Michael Dailey, chief executive officer. Daytop Village Inc., as of Jan. 31, 2012 has $8.68 million in assets and $45.03 million of liabilities. DVF has $42.20 million in assets and $32.00 million in liabilities as of Jan. 31, 2012. Island Funding II, the DIP lender, is represented by Paul R. DeFilippo, Esq., at Wollmuth Maher & Deutsch LLP. Counsel to the prepetition lender Signature Bank is Stephen D. Brodie, Esq., at Herrick Feinstein LLP; and Joshua I. Divack, Esq., at Hahn & Hessen LLP. Counsel to the prepetition lender Hudson Valley Bank is James P. Blose, Esq., at Griffin Coogan Blose & Sulzer P.C. The Official Committee of Unsecured Creditors was formed April 17, 2012. Bendinger & Schlesinger, Inc., is the chair of the Committee. Alvarez & Marsal Healthcare Industry Group LLC is the Committee's financial advisor. Robinson Brog Leinwand Greene Genovese & Gluck P.C. is the Committee's counsel. Eric M. Huebscher was appointed Patient Care Ombudsman in the case. DEWEY & LEBOEUF: Has Go-Signal to Solicit Plan Votes ---------------------------------------------------- Dewey & LeBoeuf LLP on Monday received the green light to solicit votes on its plan of liquidation. Bankruptcy Judge Martin Glenn approved the disclosure statement relating to Dewey's Second Amended Chapter 11 Plan of Liquidation. The Court held a hearing Jan. 3 to consider adequacy of the information provided in the Disclosure Statement. Dewey filed the Second Amended Plan on Monday. "The Disclosure Statement, as it may have been or may be further modified to reflect changes made or ordered on the record at the hearing on the Disclosure Statement, contains 'adequate information' within the meaning of section 1125(a) of the Bankruptcy Code," the judge said in an 18-page order. Judge Martin also approved this timeline to confirm the Liquidation Plan: Jan. 3, 2013 Voting Record Date Jan. 10, 2013; 32 calendar days Mailing Solicitation prior to the Voting Deadline and Packages Plan Objection Deadline Jan. 21, 2013; 21 calendar days Deadline for Publication prior to the Voting Deadline and of the Confirmation Plan Objection Deadline Hearing Notice Jan. 21, 2013 at 5:00 p.m. Deadline to File Claims prevailing Eastern Time; Estimation Motion 21 calendar days prior to the Voting Deadline and Plan Objection Deadline Feb. 4, 2013; 7 calendar days Deadline to File prior to the Voting Deadline Plan Supplement Feb. 11, 2013 at 5:00 p.m. Voting Deadline prevailing Eastern Time; 11 business days prior to the Confirmation Hearing Feb. 13, 2013 at 5:00 p.m. Plan Objection Deadline prevailing Eastern Time; 9 business days prior to the Confirmation Hearing Feb. 19, 2013 at 5:00 p.m. Deadline for Epiq to prevailing Eastern Time; File the Tabulation 6 business days prior to the Affidavit and Cure Confirmation Hearing Claims Bar Date Feb. 20, 2013 at 12 noon Deadline for Replies prevailing Eastern Time; to Confirmation 5 business days prior to Objections the Confirmation Hearing Feb. 27, 2013 at 10:00 a.m. Confirmation Hearing prevailing Eastern Time In the Amended Plan outline filed Monday, the Debtor cautioned that the range of estimated recoveries are based upon, inter alia, the assumed effectuation of the partner contribution plans, receivables collection recoveries, asset disposition recoveries and the favorable resolution of certain claims and causes of action. The Debtor said the estimated recoveries assume the aggregate cost of administering the Bankruptcy Case through the Effective Date and Allowed Priority Claims will be roughly $55 million. To the extent those administrative costs and Priority Claims exceed those estimates, Section 7.10 of the Plan allocates the funding of overages between Secured Lenders and holders of Allowed General Unsecured Claims. The Debtor also disclosed that as of Jan. 3, 2013, the Debtor had received roughly 2,500 requests for files relating to roughly 37,000 client matters contained within roughly 82,000 boxes of off-site files and roughly 1,500 requests for electronic records. Notwithstanding the passing of the Bankruptcy Court's approved deadline (of Sept. 11, 2012) for submission of retrieval forms, the Debtor continued to accept requests through the end of December 2012. The Debtor estimates that roughly 345,000 boxes of off-site files remain at the storage facilities. The Debtor has negotiated a budget with the Secured Lenders and the Creditors' Committee which includes the costs to destroy (shred) unclaimed files. The Debtor has filed a request authorizing the Debtor or, after the Plan Effective Date, the Liquidating Trustee to destroy, with the Debtor's off-site storage facilities' cooperation, unclaimed files that are unnecessary to wind-down the Estate. In separate orders, the Bankrupcy Court authorized Dewey to reject a software contract with Microsoft Licensing, GP. The Court also granted Dewey an extension of the time period provided by Fed.R.Bankr.Proc. Rule 9027 within which the Debtor may file notices of removal of related proceedings under Bankruptcy Rules 9006 and 9027(a)(2), up to and including March 4, 2013. 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 filed a Chapter 11 Plan of Liquidation and an accompanying Disclosure Statement on Nov. 21, 2012. It filed amended plan documents on Dec. 31, in an attempt to address objections lodged by various parties. A second iteration was filed Jan. 7, 2013. The plan is based on a proposed settlement between secured lenders and Dewey's official unsecured creditors' committee. It also incorporates a settlement approved by the bankruptcy court in October where 440 former partners will receive releases in return for $71.5 million in contributions. 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. The settlement calls for secured creditors to 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. The first amended plan documents include projected recoveries of certain classes of claims: -- Non-tax priority claims in Class 1, estimated to be roughly $1.4 million, will be paid in full, in cash; -- Dewey's secured lenders will be allowed a $261,897,943 claim in Class 2 and a $100,000,000 unsecured deficiency claim in Class 4. They are projected to receive 46.8% to 76.7% under the plan. The Secured Lender Claims estimated recoveries assume that all holders of Secured Lender Claims are Releasing Secured Lenders (i.e., Secured Lenders who, on their Ballots, have not opted out of the release of Participating Partners). Under the Plan, Non- Releasing Secured Lenders (i.e., those Secured Lenders who, on their Ballots, opt out of the release of Participating Partners) are not entitled to receive proceeds from the Partner Contribution Plan. Accordingly, the estimated recoveries for such Claim holders may vary from those of Releasing Secured Lenders. In addition, the recovery estimates for Secured Lenders Claims may be reduced if the amount of Allowed Administrative Claims exceeds the amount projected in the Budget. -- Other secured claims in Class 3 are projected to receive 100%. The plan outlined noted, however, that based on the Debtor's preliminary analysis of Claims raised as potential Class 3 ? Other Secured Claims, the Debtor believes Allowed Claim amounts for the Class will be $0. -- General unsecured claims are classified in Class 4 and includes the Secured Lenders' deficiency claim. There are $285 million in listed claims by unsecured creditors. Unsecureds are expected to recover 5.25% to 14.1% under the plan. The recovery estimates for Allowed General Unsecured Claims may be reduced if the amount of Allowed Administrative Claims exceeds the amount projected in the Budget. Additionally, Secured Lender Deficiency Claims are not entitled to a Distribution from the Initial PCP/Unfinished Business Proceeds (a Distribution that such holders would otherwise be entitled to as general Unsecured Creditors). Accordingly, the range of recoveries for holders of Secured Lender Deficiency Claims on account of such Claims will be between 1.8% and 9.6%. The estimates also assume that all holders of Secured Lender Deficiency Claims are Releasing Secured Lenders (i.e., Secured Lenders who, on their Ballots, have not opted out of the release of Participating Partners). Under the Plan, Non-Releasing Secured Lenders (i.e., those Secured Lenders who, on their Ballots, opt out of the release of Participating Partners) are not entitled to receive proceeds from PCPs. Accordingly, the estimated recoveries for such Claim holders may vary from those of other holders of General Unsecured Claims including Releasing Secured Lenders. -- Insured malpractice claims in Class 5 may recover 100% and will be paid pursuant to, and solely from the proceeds of, any applicable Malpractice Policy with respect to the Insured Portion of such Claims. -- Subordinated Claims in Class 6 and Interests in Class 7 will receive no distribution. Dewey is being managed by a Wind-Down Committee comprised of (a) Janis M. Meyer, Esq.; and (b) Stephen J. Horvath III, Esq. Dewey aims a confirmation hearing to approve the plan by the end of February. DLT PROPERTIES: Case Summary & 5 Unsecured Creditors ---------------------------------------------------- Debtor: DLT Properties, Inc. P.O. Box 283 Alcoa, TN 37701 Bankruptcy Case No.: 13-50008 Chapter 11 Petition Date: January 3, 2013 Court: U.S. Bankruptcy Court Eastern District of Tennessee (Greeneville) Judge: Marcia Phillips Parsons Debtor's Counsel: Thomas Lynn Tarpy, Esq. HAGOOD, TARPY & COX, PLLC Suite 2100, Riverview Tower 900 South Gay Street Knoxville, TN 37902-1537 Tel: (865) 525-7313 E-mail: ltarpy@htandc.com Scheduled Assets: $1,010,615 Scheduled Liabilities: $1,661,352 The Company's list of its five largest unsecured creditors is available for free at: http://bankrupt.com/misc/tneb13-50008.pdf The petition was signed by Darrell Tipton, president. DVORKIN HOLDINGS: Court Okays Seyfarth Shaw as Trustee's Counsel ---------------------------------------------------------------- Gus A. Paloian, the Chapter 11 Trustee of Dvorkin Holdings LLC, sought and obtained approval from the U.S. Bankruptcy Court to employ Seyfarth Shaw LLP as counsel. The Chapter 11 Trustee said it needs counsel to represent him in the performance of his duties, the liquidation of certain assets, and, as may be appropriate, confirmation of a chapter 11 plan. Additionally, the Trustee anticipates the need to initiate litigation to recover funds that are property of the Estate, but which were not disclosed in the Debtor's schedules and have not been willingly returned thereto. The firm attests it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm's rates are: Professional Position/Practice Area 2012 Rate ------------ --------------------------- ---- Gus A. Paloian Partner/Bankruptcy $600.00 Jason J. DeJonker Partner/Bankruptcy $480.00 Jason P. Stiehl Partner/Litigation $435.00 James B. Sowka Associate/Bankruptcy $395.00 Christopher J. Harney Associate/Bankruptcy $370.00 Andrew Connor Paralegal/Bankruptcy $265.00 Jennifer M. McManus Paralegal/Bankruptcy $255.00 Alice Shepro Case Assistant/Bankruptcy $90.00 About Dvorkin Holdings Dvorkin Holdings LLC, a holding company that has interests in 40 non-debtor entities, filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-31336) in Chicago on Aug. 7, 2012. The Debtor estimated assets of at least $10 million and debts of up to $10 million. Bankruptcy Judge Jack B. Schmetterer oversees the case. Michael J. Davis, Esq., at Springer, Brown, Covey, Gaetner & Davis, in Wheaton, Illinois, served as counsel to the Debtor. The petition was signed by Loran Eatman, vice president of DH-EK Management Corp. The Bankruptcy Court in October 2012 granted the request of Patrick S. Layng, the U.S. Trustee for the Northern District of Illinois, to appoint Gus Paloian as the Chapter 11 trustee. Lender, FirstMerit Bank, N.A., also sought appointment of a chapter 11 trustee. EARTHBOUND HOLDINGS: S&P Lowers Corporate Credit Rating to 'B-' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating on San Juan Bautista, Calif.-based Earthbound Holding III LLC to 'B-' from 'B'. The outlook is developing. "We also lowered our issue-level rating on Earthbound's senior secured credit facility to 'B' from 'B+'. The recovery rating remains at '2', indicating our expectations for substantial (70% to 90%) recovery in the event of a payment default," S&P said. On Sept. 30, 2012, Earthbound had approximately $333 million of total debt outstanding. "The downgrade reflects our belief that Earthbound will have difficulty complying with its financial covenants over the near term, given its weaker-than-expected operating performance and continued tight covenant cushion," said Standard & Poor's credit analyst Jeffrey Burian. Earthbound reports that its operating performance for fiscal year 2012 through Sept. 30, 2012, is below the company's budget, primarily due to retail pricing pressures, raw material cost increases, and operating inefficiencies. "We had expected Earthbound's covenant cushion to improve in the second half of 2012, but we estimate that the cushion level was very limited at the end of the third quarter and we believe that the company may not be able to remain in compliance with its covenants if operating performance does not improve. In addition, Earthbound's leverage covenant level becomes more restrictive at the end of the first quarter of 2013. Although the company possesses limited equity cure rights, Earthbound has not announced plans to exercise these rights or restore covenant cushion via any type of amendment process," S&P added. "The developing outlook reflects our concern that Earthbound may be unable to remain in compliance with its leverage covenant over the near-term, given its weakened operating performance and upcoming leverage covenant step-down. If the company is unable to demonstrate a credible plan to remedy its covenant cushion and potential compliance issues in the near-term, we could consider lowering its ratings further or revising our liquidity assessment to weak. Alternatively, we could raise the ratings if the company is able to develop a credible plan to restore and sustain covenant cushion levels to at least 15% through improved EBITDA or an amendment of its covenant test levels," S&P noted. ELCOM HOTEL & SPA: Files Ch. 11 to Sell Bal Harbor Hotel Lot ------------------------------------------------------------ Elcom Hotel & Spa LLC and Elcom Condominium LLC sought Chapter 11 protection (Bankr. S.D. Fla. Case Nos. 13-10029 and 13-10031) early this month, with plans to sell their hotel and condominium property. Elcom Condominium owns nine of the hotel condominium units at the One Bal Harbor Resort & Spa. The resort is located on five acres of land in Bal Harbor, Florida. The building and improvements consist of 185 luxury residential condominium units and 124 hotel condominium units. Elcom Hotel owns the hotel lot. In 2011, the hotel lot was taken over by a receiver, Jorge J. Perez. BMC-The Benchmark Management Company, as the receiver's agent, has maintained and operated the hotel lot on the Debtor's behalf. The Debtors are seeking joint administration of their Chapter 11 cases. Elcom Hotel estimated assets and liabilities of less than $50 million. The Debtor owes OBH Funding, LLC, $1.8 million on a mortgage and F9 Properties, LLC, formerly known as ANO, LLC, $9 million on a mezzanine loan secured by a lien on the ownership interests in the project's owner. OBH Funding and ANO are owned by Thomas D. Sullivan, the manager of the Debtors. OBH Funding consents to the Debtors' use of cash collateral. The Debtors say the receiver, during his tenure, has failed to maximize the hotel lot revenues. Every budget he has prepared calls for the hotel lot to operate at a substantial loss. According to a court filing, the Debtors intend to pursue a sale transaction with the assistance of Alvarez & Marsal Real Estate Advisory Services LLC and A&M's Embree C. "Chuck" Bedsole; however, the Debtors have not excluded any possible exit strategies, including an internal reorganization. ELCOM HOTEL & SPA: Proposes Kozyak Tropin as Ch. 11 Counsel ----------------------------------------------------------- Elcom Hotel & Spa, LLC and Elcom Condominium, LLC, are seeking approval to hire Kozyak, Tropin & Throckmorton, P.A., as general bankruptcy counsel nunc pro tunc to Jan. 2, 2013. KT&T's professionals will provide services on an hourly basis, at rates comparable to those the firm uses for comparable matters. Currently, the rates for KT&T attorneys range from $250 to $600 per hour, and the rate for non-attorneys is $200. On Dec. 5, 2012, the firm received a $150,000 prepetition retainer from the Debtors' manager, Thomas D. Sullivan. The firm attests it has no connection with the Debtor's creditors or other parties in interest and their respective attorneys. About Elcom Hotel Elcom Hotel & Spa, LLC and Elcom Condominium, LLC sought Chapter 11 protection (Bankr. S.D. Fla. Case Nos. 13-10029 and 13-10031) on Jan. 2, 2013, with plans to sell their hotel and condominium property. Elcom Condominium owns nine of the hotel condominium units at the One Bal Harbor Resort & Spa. The resort is located on five acres of land in Bal Harbor, Florida. The building and improvements consist of 185 luxury residential condominium units and 124 hotel condominium units. Elcom Hotel owns the hotel lot. Elcom Hotel estimated assets and liabilities of less than $50 million. The Debtor owes OBH Funding, LLC, $1.8 million on a mortgage and F9 Properties, LLC, formerly known as ANO, LLC, $9 million on a mezzanine loan secured by a lien on the ownership interests in the project's owner. OBH Funding and ANO are owned by Thomas D. Sullivan, the manager of the Debtors. ELCOM HOTEL & SPA: Has Duanne Morris as Real Estate Counsel ----------------------------------------------------------- Elcom Hotel & Spa, LLC and Elcom Condominium, LLC, are seeking permission from the Bankruptcy Court to hire Duane Morris LLP as special litigation, real estate, and hospitality counsel, nunc pro tunc to the Chapter 11 petition date. Duane Morris' professionals will provide services on an hourly basis, at rates comparable to those the firm uses for comparable matters. Currently, the rates for Duane Morris attorneys range from $285 to $580 per hour, and the rate for non-attorneys is $225. Duane Morris has represented the Debtors on an hourly basis in the receivership action prepetition, and in several other significant prepetition litigation matters. The Debtors are seeking to engage Duanne Morris as special counsel under 11 U.S.C. Sec. 327(e) and not as bankruptcy counsel pursuant to Sec. 327(a). Therefore the Debtors submit that the fact that Duane may not be "disinterested" does not preclude its employment as special litigation counsel. About Elcom Hotel Elcom Hotel & Spa, LLC and Elcom Condominium, LLC sought Chapter 11 protection (Bankr. S.D. Fla. Case Nos. 13-10029 and 13-10031) on Jan. 2, 2013, with plans to sell their hotel and condominium property. Elcom Condominium owns nine of the hotel condominium units at the One Bal Harbor Resort & Spa. The resort is located on five acres of land in Bal Harbor, Florida. The building and improvements consist of 185 luxury residential condominium units and 124 hotel condominium units. Elcom Hotel owns the hotel lot. Elcom Hotel estimated assets and liabilities of less than $50 million. The Debtor owes OBH Funding, LLC, $1.8 million on a mortgage and F9 Properties, LLC, formerly known as ANO, LLC, $9 million on a mezzanine loan secured by a lien on the ownership interests in the project's owner. OBH Funding and ANO are owned by Thomas D. Sullivan, the manager of the Debtors. ELCOM HOTEL & SPA: A&M's Chuck Bedsole to Serve as CRO ------------------------------------------------------ Elcom Hotel & Spa, LLC and Elcom Condominium, LLC, are seeking permission from the Bankruptcy Court to hire Alvarez & Marsal Real Estate Advisory Services, LLC, to provide the services of Embree C. "Chuck" Bedsole as chief restructuring officer and provide additional personnel. The Debtors have determined that the services of experienced restructuring managers will substantially enhance their attempts to maximize the value of their estates. A&M and Mr. Bedsole served as the asset manager for One Bal Harbour from November 2006 to June 2008, and are intimately familiar with the Debtors' financial affairs. A&M's engagement personnel will support the Debtors with respect to: (a) asset management services; (b) assisting the Debtors' finance personnel in a financial review of the business; (c) assist in the identification and execution of cost reduction and operational improvement opportunities; (d) assist in various real estate rationalization initiatives; (e) assist in performance of cost/benefit analyses related to non-store executory contracts. A&M will be paid by the Debtors for the services of its personnel at their customary hourly billing rates: Hourly Rate ----------- Managing Director $675 to $875 Directors $475 to $675 Associate/Consultant $375 to $475 Analyst $275 to $375 In addition to the hourly rates, A&M will be paid a success fee in the amount of the greater of 3% of the Company's assets sold or $500,000. However, the success fee will not be payable with respect to any sale or disposition of the assets to take place on or before Dec. 31, 2013 to (i) Mark Pordes; (ii) Capella Hotel Group; (iii) Stoneleigh Capital; (iv) Auberge Resorts; (v) East Coast Realty Ventures, LLC; or (vi) Metro 1 Properties, Inc. Neither Mr. Bedsole nor the firm has any connection with the Debtor's creditors or other parties in interest in their respective attorneys. The firm may be reached at: ALVAREZ & MARSAL REAL ESTATE ADVISORY SERVICES LLC 2100 Ross Venue, 21st Floor Dallas, TX 75201 Tel: +1 214 438 1000 Fax: +1 214 438 1001 About Elcom Hotel Elcom Hotel & Spa, LLC and Elcom Condominium, LLC sought Chapter 11 protection (Bankr. S.D. Fla. Case Nos. 13-10029 and 13-10031) on Jan. 2, 2013, with plans to sell their hotel and condominium property. Elcom Condominium owns nine of the hotel condominium units at the One Bal Harbor Resort & Spa. The resort is located on five acres of land in Bal Harbor, Florida. The building and improvements consist of 185 luxury residential condominium units and 124 hotel condominium units. Elcom Hotel owns the hotel lot. Elcom Hotel estimated assets and liabilities of less than $50 million. The Debtor owes OBH Funding, LLC, $1.8 million on a mortgage and F9 Properties, LLC, formerly known as ANO, LLC, $9 million on a mezzanine loan secured by a lien on the ownership interests in the project's owner. OBH Funding and ANO are owned by Thomas D. Sullivan, the manager of the Debtors. ELITE PHARMACEUTICALS: Director Quits for Personal Reasons ---------------------------------------------------------- Ram Potti resigned from the board of directors of Elite Pharmaceuticals, Inc., citing personal reasons. In his resignation, Mr. Potti expressed that he remains committed in his support of Elite as he was while a director of the company. About Elite Pharmaceuticals Northvale, New Jersey-based Elite Pharmaceuticals, Inc., is a specialty pharmaceutical company principally engaged in the development and manufacture of oral, controlled-release products, using proprietary technology and the development and manufacture of generic pharmaceuticals. The Company has one product, Phentermine 37.5mg tablets, currently being sold commercially. Elite Pharmaceuticals reported a net loss attributable to common shareholders of $15.05 million for the year ended March 31, 2012, compared with a net loss attributable to common shareholders of $13.58 million during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $10.07 million in total assets, $31.87 million in total liabilities and a $21.80 million total stockholders' deficit. Demetrius & Company, L.L.C., in Wayne, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2012, citing significant losses resulting in a working capital deficiency and shareholders' deficit, which raise substantial doubt about the Company's ability to continue as a going concern. EMISPHERE TECHNOLOGIES: VP Riley Resigns, Gets $1.4MM From NOLs ----------------------------------------------------------------- Gary I. Riley resigned as Vice President of Non-Clinical Development and Applied Biology of Emisphere Technologies, Inc., effective on Dec. 31, 2012. No disagreement existed between Mr. Riley and the Company that resulted in his resignation, and Mr. Riley has agreed to continue providing services to the Company in a consulting capacity. Meanwhile, on Dec. 18, 2012, the Company received approximately $1.4 million from the sale of New Jersey State Net Operating Losses from prior periods through the 2012 Technology Business Tax Certificate Transfer Program, sponsored by the New Jersey Economic Development Authority. About Emisphere Cedar Knolls, N.J.-based Emisphere Technologies, Inc., is a biopharmaceutical company that focuses on a unique and improved delivery of therapeutic molecules or nutritional supplements using its Eligen(R) Technology. These molecules are currently available or are under development. The Company's balance sheet at Sept. 30, 2012, showed $1.29 million in total assets, $68.14 million in total liabilities and a $66.85 million total stockholders' deficit. McGladrey and Pullen, LLP, in New York City, expressed substantial doubt about Emisphere's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and its total liabilities exceed its total assets. ENERGYSOLUTIONS INC: To be Sold to Energy Capital for $338-Mil. --------------------------------------------------------------- EnergySolutions, Inc., has entered into an agreement to be acquired by a subsidiary of Energy Capital Partners II, LLC, in a transaction with an enterprise value of $1.1 billion. According to Reuters, the purchase price is $338.5 million. Under the terms of the agreement, EnergySolutions' shareholders will receive $3.75 in cash for each share of common stock. This represents a premium of approximately 20% over the average closing share price of EnergySolutions' common stock for the 30 days ended Jan. 4, 2013. The definitive acquisition agreement has been unanimously approved by the EnergySolutions' Board of Directors. "For our shareholders, this transaction offers compelling value, representing a substantial premium to our share price over recent months," stated David Lockwood, CEO and President of EnergySolutions. "For our company, this transaction enables us to continue to execute on our strategic plan by providing the investment capital to expand and to grow our business. With over $7 billion of capital commitments under management, Energy Capital is one of the largest energy-focused private equity firms in the world, with extensive knowledge and deep relationships across the energy and utility sectors. In addition, as a result of this transaction, our company becomes part of the ECP network of portfolio companies, providing the ability to leverage the firm's management, financial resources and operational expertise. As a private company with substantial financial backing, we will be able to better manage our business for the long-term in order to serve the best interests of our customers, employees, joint venture partners and other stakeholders." "We are excited to acquire EnergySolutions, one of the leading global environmental and nuclear services companies," said Tyler Reeder, a Partner at ECP. "The Company employs an exceptionally talented workforce experienced in providing critical services to commercial customers and governmental agencies with a strong track record of environmental stewardship. We look forward to investing capital in support of management's strategic vision to continue to expand the Company's business both in North America and internationally. In particular, we see a tremendous opportunity for the Company to grow its decommissioning and disposal businesses in the United States, through strategic partnerships with large engineering and construction firms, expanding its services business with governmental agencies, and the rebidding of Magnox and other opportunities in Europe." ECP plans to operate EnergySolutions as a standalone business operation with the current management team remaining in place. The ECP acquisition of EnergySolutions is subject to customary closing conditions, including regulatory approvals in the U.S. and U.K. and clearance under the Hart-Scott-Rodino Act. In addition, the transaction is subject to approval by EnergySolutions' stockholders. Under the terms of the merger agreement, EnergySolutions may solicit superior proposals from third parties through Feb. 6, 2013. The EnergySolutions Board of Directors, with the assistance of its advisors, will actively solicit acquisition proposals during this period. There are no guarantees that this process will result in a superior proposal. EnergySolutions and the Board of Directors do not intend to disclose developments with respect to the solicitation process unless and until the Board of Directors has made a decision. Goldman, Sachs & Co. is serving as financial advisor to EnergySolutions and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to EnergySolutions. Morgan Stanley is serving as financial advisor and Latham & Watkins, LLP, is acting as legal advisor to ECP. Morgan Stanley is also committing to provide senior secured credit facilities to help finance the acquisition, and will act as a lead arranger and book-runner in the financing. About EnergySolutions, Inc. EnergySolutions offers customers a full range of integrated services and solutions, including nuclear operations, characterization, decommissioning, decontamination, site closure, transportation, nuclear materials management, the safe, secure disposition of nuclear waste, and research and engineering services across the fuel cycle. The Company's balance sheet at Sept. 30, 2012, showed $2.85 billion in total assets, $2.54 billion in total liabilities, and $311.77 million in total stockholders' equity. * * * As reported by the TCR on June 18, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on Salt Lake City- based EnergySolutions Inc. and its subsidiaries by two notches to 'B' from 'BB-'. "The downgrade reflects weakening credit metrics and the added uncertainty stemming from the unexpected change in management since the company's strategic and financial priorities are now less clear," said Standard & Poor's credit analyst James Siahaan. ENERGYSOLUTIONS INC: S&P Assigns 'B' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings, including its 'B' corporate credit rating, on Salt Lake City-based nuclear services provider EnergySolutions Inc. on CreditWatch with developing implications. "The CreditWatch placement follows EnergySolutions' announcement that it has entered into a definitive agreement to be acquired by a subsidiary of Energy Capital Partners II," said Standard & Poor's credit analyst Jim Siahaan. Energy Capital Partners II is an investment fund of Energy Capital Partners, an energy-focused private equity sponsor with more than $7 billion in capital commitments. According to the terms of the agreement, EnergySolutions' shareholders will receive $3.75 in cash for each share of common stock, which, based on 90.3 million of common shares outstanding reported at Nov. 7, 2012, is approximately $338.5 million. The company's adjusted debt at Sept. 30, 2012 was $583 million, or roughly 3.6x its trailing-12- months' adjusted EBITDA. The adjusted debt figure is calculated net of more than $300 million in restricted cash and includes approximately $72 million related to the capitalization of operating leases and asset retirement obligations. EnergySolutions is permitted to seek superior proposals from third parties until Feb. 6, 2013. The acquisition is subject to customary closing conditions, including regulatory approvals in the U.S. and U.K. and the approval by EnergySolutions' stockholders. "The ratings are on CreditWatch with developing implications. Per the terms of the agreement, EnergySolutions is permitted to engage in discussions with other suitors, which may include other financial sponsors or strategic buyers. Depending on the final proposal, the impacts to EnergySolutions' financial risk profile and operating strategy could prompt us to raise, lower, or affirm the ratings. We plan to meet with management to discuss the acquisition and to resolve the CreditWatch following a review of the transaction. We expect to resolve the CreditWatch during the next several weeks after evaluating the new capital structure, the sponsor's financial policies, and management's business strategies," S&P added. FANNIE MAE: Bank of America's Settlement a Positive, Fitch Says --------------------------------------------------------------- Fitch Ratings believes Bank of America's recently announced settlement with Fannie Mae is overall positive for the company. The settlement amount is below Fitch's expectations under various stress scenarios. Fitch believes this settlement substantially addresses BAC's exposure to mortgage repurchase obligations from FNM and addresses much of the uncertainty related to this exposure. Fitch believes BAC's total consideration to FNM is very manageable within the context of BAC's capital and earnings generation, and will also allow management to begin to move from dealing with legacy issues to focusing more on growing the franchise. Fitch notes that terms of the settlement are in two parts, which include a $3.6 billion cash payment to FNM to be made in January 2013 as well as the repurchase of $6.75 billion in residential mortgage loans sold to FNM, which BAC has valued at less than the purchase price. Given existing representation and warranty reserves, this proposed settlement will increase representation and warranty provision expense by $2.5 billion in fourth-quarter 2012, which Fitch believes to be well covered by the company's earnings generation. This proposed settlement resolves outstanding claims of $11.2 billion alleged representation and warranty breaches on residential mortgage loans sold to FNM from Jan. 1, 2000 through Dec. 31, 2008, as well as potential future claims on 2000 to 2008 originations. Given that this period includes some of the most problematic mortgage vintages that BAC has had to resolve over the last few years, Fitch believes that a large portion of the uncertainty regarding BAC's potential future liabilities, which under an extreme stress scenario Fitch noted could be as high as $20 billion, has been reduced. That said, since that BAC does still have some remaining litigation risks to other parties, Fitch would still expect some additional costs going forward. However, Fitch believes BAC's improved capital, liquidity, and slowly improving earnings, should provide a buffer to absorb these incremental costs going forward. FLASH DUTCH: S&P Assigns 'B+' Corp. Credit Rating ------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Flash Dutch 2 BV, the co-issuer of the debt that will finance the acquisition of DuPont's coatings business. At the same time, based on preliminary terms and conditions, S&P assigned a senior secured debt rating of 'B+' (the same as the corporate credit rating) and a recovery rating of '3' to the following proposed senior secured debt to be co-issued by Flash Dutch 2 BV and its indirect, wholly owned subsidiary, U.S. Coatings Acquisition Inc. (together also known as DuPont Performance Coatings or DPC): -- $400 million senior secured revolving credit facility maturing 2018; -- $2.3 billion senior secured term loan maturing 2020; -- EUR150 million senior secured term loan maturing 2020; and -- EUR230 million senior secured notes due 2021. S&P also assigned a 'B-' senior unsecured debt rating (two notches below the corporate credit rating) and a recovery rating of '6' to the $1.1 billion of proposed senior unsecured notes due 2021 to be issued by the same co-issuers. The outlook is stable. "The ratings on DPC reflect our assessment of its business risk profile as satisfactory and its financial risk profile as highly leveraged," said Standard & Poor's credit analyst Cindy Werneth. Standard & Poor's assesses its management and strategy as fair. Together with its global competitors, PPG Industries Inc., BASF SE, and Akzo Nobel N.V., DPC is a leading manufacturer of coatings for the auto original equipment manufacturer (OEM) and refinish markets, as well as for other transportation and industrial applications, with trailing-12-month sales of nearly $4.3 billion as of Sept. 30, 2012. Its strengths include its large market shares, global presence, and track record of technological innovation. In particular, it has a leading share (27%) of the highly profitable and relatively stable global auto refinish market. "The outlook is stable. Although DPC will be highly leveraged, because we expect relatively stable EBITDA and modest capital expenditures, it should generate FOCF of between $150 million and $200 million per year. We expect total adjusted debt to EBITDA to remain in the 6.0-6.5x range, which we consider appropriate for the ratings. Nevertheless, we would lower the ratings if economic or auto industry conditions deteriorate or DPC cannot achieve the standalone cost profile that we expect, including EBITDA margins averaging 14%-15%. Our scenario forecasting suggests that this could occur if revenues increase by about 1.5% in 2013 as we expect and adjusted EBITDA margins drop below 14% without prospects for near-term improvement. We would also lower the ratings if liquidity is less than adequate," S&P said. FLORIDA INSTITUTE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Florida Institute for Neurologic Rehabilitation, Inc. P.O. Box 1348 Wauchula, FL 33873 Bankruptcy Case No.: 13-00102 Chapter 11 Petition Date: January 4, 2013 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Craig I. Kelley, Esq. KELLEY & FULTON, P.A. 1665 Palm Beach Lakes Boulevard, Suite 1000 West Palm Beach, FL 33401 Tel: (561) 491-1200 Fax: (561) 684-3773 E-mail: cik@kelleylawoffice.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliates that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- FINR II, Inc. 13-00103 Assets: $0 to $50,000 Debts: $1,000,001 to $10,000,000 FING II, Inc. 13-00107 Assets: $0 to $50,000 Debts: $0 to $50,000 FINR III, LLC 13-00104 FINR III, Inc. 13-00105 The petitions were signed by Joseph Brennick, president. A. A copy of Florida Institute's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb13-00102.pdf B. A copy of FINR II's list of its 15 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb13-00103.pdf C. A copy of FING II's large unsecured creditor filed with the petition is available for free at: http://bankrupt.com/misc/flmb13-00107.pdf FORT LAUDERDALE BOATCLUB: Court Confirms Plan of Reorganization --------------------------------------------------------------- On Dec. 27, 2012, the U.S. Bankruptcy Court for the Southern District of Florida granted final approval to Fort Lauderdale BoatClub, Ltd.'s First Amended Disclosure Statement explaining the Debtor's Plan of Reorganization dated Nov. 15, 2012. The Court also confirmed the Debtor's Plan. The holders of Claims in Class 2 (Allowed Secured Claim of EverBank) and 3 (Allowed General Unsecured Claims) voted to accept the Plan. Class 4 (Allowed Subordinated Claims and 5 (Allowed Equity Interests) did not cast a ballot on the Plan and are deemed to have rejected the Plan. Class 1 (Allowed Priority Claims) is Unimpaired and did not vote. A copy of the order (i) approving the First Amended Disclosure Statement for Debtor's Plan of Reorganization and (ii) confirming Debtor's Plan of Reorganization is available at: http://bankrupt.com/misc/fortlauderdale.doc129.pdf As reported in the TCR on Dec. 27, 2012, the Debtor filed a first amended disclosure statement in support of its reorganization plan dated Nov. 28, 2012. The classification and treatment of claims under the plan are: A. Class 1 (Allowed Priority Claims) will be paid in full on the later of: (i) the Effective Date; or (ii) the date of a Final Order allowing such Priority Claim. B. Class 2 (Allowed Secured Claim of EverBank) will be paid and satisfied by the Debtor after the Effective Date in accordance with the Restructured Loan Instruments. C. Class 3 (Allowed General Unsecured Claims) will be satisfied by periodic Distributions to the holders of each Allowed Unsecured Claim on a pro rata basis with the holders of all Allowed Unsecured Claims in this Class 3. The initial Distribution to holders of Allowed Unsecured Claims will be made from the Available Cash generated from and constituting property of the Estate within 20 days after the Effective Date by the Reorganized Debtor and all future Distributions will be made from the Reorganized Debtor on the respective Distribution Dates. The initial Distribution will be in the amount of $4,166 and subsequent Distributions will be monthly in the amount of $4,166 for a period of 24 months, but not to exceed $100,000. E. Class 4 (Allowed Subordinated Claims) will be satisfied by periodic Distributions to the holders of such Allowed Subordinated Claims on a pro-rata basis with the holders of all Allowed Subordinated Insider Claims in Class 4. F. Class 5 (Allowed Equity Interests) will be extinguished and canceled as of the Effective Date and New Partnership Interests in the Reorganized Debtor shall be issued on the Effective Date. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/FORT_LAUDERDALE_ds_1amended.pdf 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. FR 160: Court Approves MCA Financial as Financial Advisor --------------------------------------------------------- FR 160 LLC sought and obtained approval from the U.S. Bankruptcy Court to employ MCA Financial Group, LTD as the Debtor's financial advisor to, among other things: a. review the Debtor's bankruptcy Plan of Reorganization and Disclosure Statement and related projections and analysis prepared in support thereof; b. review and analyze the historical operating history of the Debtor including the Debtor's assets, cash flow, liabilities and other relevant items; and c. evaluate the Debtor's projections and related analysis. Keith Bierman, Senior Managing Director with MCA Financial Group, Ltd., attests the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The Debtor has agreed to pay the firm on an hourly basis at rates ranging from $250 to $375 per hour as set forth more fully in the parties' Consulting Agreement. About FR 160 FR 160 LLC, originally named IMH Special Asset NT 160 LLC, was formed for the purpose of owning 51 residential lots and Tract H at the Flagstaff Ranch Golf Club Community generally located in Coconino County, Arizona. FR 160 LLC filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-13116) in Phoenix on June 12, 2012. FR 160, which claims to be a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated assets of up to $50 million and debts of up to $100 million. Attorneys at Snell & Wilmer L.L.P., in Phoenix, serve as counsel. The U.S. Trustee has not appointed an official committee in the case due to an insufficient number of persons holding unsecured claims against the Debtor that have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint a committee should interest develop among the creditors. Attorneys at Gordon Silver, in Phoenix, represent creditor Flagstaff Ranch Golf Club as counsel. FRIENDSHIP DAIRIES: Jan. 10 Hearing on Use of Cash Collateral ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas will convene a hearing on Jan. 10, 2012, at 1:30 p.m., to consider Friendship Dairies' request for use of cash collateral. About Friendship Dairies Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The Debtor estimated assets and debts of $10 million to $50 million. The Debtor operates a dairy near Hereford, Deaf Smith County, Texas. The dairy consists of 11,000 head of cattle, fixtures and equipment. The Debtor also farms 5,000 acres of land for production of various crops used in feeding for the cattle. The Debtor owes McFinney Agri-Finance, LLC, $16 million secured by the Debtor's property, which is appraised at more than $24 million. The debtor disclosed $44,421,851 in assets and $45,554,951 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett White, P.C. serves as the Debtor's counsel. The petition was signed by Patrick Van Adrichem, partner. The U.S. Trustee appointed a six-member creditors committee in the Debtor's case. The Committee tapped Levenfeld Pearlstein as lead counsel, and Mullin, Hoard & Brown as local counsel. GAME TRADING: Redbox Allowed $1.8-Mil. Unsecured Claim ------------------------------------------------------ Bankruptcy Judge Nancy V. Alquist gave her stamp of approval on a Stipulation and Consent Order entered into by and between Peter Chadwick, in his capacity as Responsible Officer for the estates of Game Trading Technologies, Inc., and Gamers Factory, Inc.; and Redbox Automated Retail, LLC. Redbox filed proof of claim no. 13-1 in case no. 15-11519, which supersedes the claim scheduled by GTTI in favor of Redbox in the amount of $1,361,861. The Claim asserts that Redbox holds a general unsecured claim against the Debtors in the amount of $2,237,087, consisting of $1,441,469 in alleged unpaid invoices for disks delivered to the Debtors, as well as $795,643 in damages allegedly resulting from the Debtors' failure to deliver disks to their publisher under the terms of a Vendor Services Agreement. The Responsible Officer has sought to reduce and allow Redbox's claim from $2,237,087 to $1,361,861, consistent with the Scheduled Claim and based on a review of the Debtors' books and records. The discrepancy between the Scheduled Claim and the Claim consists of (i) a $79,583 difference in unpaid invoices due to Redbox from the Debtors; and (ii) $795,643 in damages for the Debtors' alleged failure to deliver disks to its publisher. After considering the anticipated nominal payout to general unsecured creditors, as well as the expense of litigating the validity of the $795,643 in damages sought by Redbox, the parties determined that it was in the best interest of the estate and Redbox to settle the Claim. The Responsible Officer and Redbox agreed to resolve the objection to the Claim by allowing the Claim in the amount of $1,800,000, which is approximately $437,087 less than the Claim and $438,138 more than the Scheduled Claim. Redbox is represented by: Brian A. Jennings, Esq. PERKINS COIE LLP 1201 Third Avenue, Suite 4900 Seattle, WA 98101 Tel: (206) 359-3679 Fax: (206) 359-4679 E-mail: bjennings@perkinscoie.com A copy of the Stipulation and Consent Order signed Jan. 3, 2013, is available at http://is.gd/CXZ9kgfrom Leagle.com. About Game Trading Technologies Game Trading Technologies Inc., fka City Language Exchange, Inc., (OTC BB: GMTD) filed for Chapter 11 protection (Bankr. D. Md. Lead Case No. 12-11519) on Jan. 30, 2012. James Edward Van Horn, Jr., Esq., at McGuirewoods LLP, represents the Debtor. WeinsweigAdvisors LLC's Marc Weinsweig serves as chief restructuring officer. When it filed for bankruptcy, Game Trading estimated $0 to $50,000 in assets and $1 million to $10 million in debts. Affiliate Gamers Factory, Inc., filed a separate petition for Chapter 11 relief (Bankr. D. Md. Case No. 12-11522) on the same day, listing $1 million to $10 million in both assets and debts. An Official Committee of Unsecured Creditors has been appointed in the case. The panel is represented by Gary H. Leibowitz, Esq., and G. David Dean, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A. On Feb. 8, 2012, the Debtors filed their proposed plan of reorganization and motion to establish bidding procedures for and sale of substantially all of the companies' assets. Pursuant to the sale and bid procedures motion, the companies seek to sell, subject to higher and better offers and bankruptcy Court approval, substantially all of their assets to two stalking horse bidders, DK Trading Partners, LLC, and Mantomi Sales, LLC, respectively. Mantomi Sales, LLC, is 100% owned by Todd Hayes, the Debtors' president and CEO. Pursuant to the Mantomi Sales LLC asset purchase agreement, (i) Mr. Hays was required to resign as President and CEO of the companies on or before the execution of the Mantomi APA; (ii) the companies' Chief Restructuring Officer may employ Mr. Hays as an independent consultant to the companies in matters unrelated to the sale; and (iii) nothing in the Mantomi APA constitutes or will be deemed a breach of the employment agreement between Mr. Hays and the companies. Counsel for the Official Committee of Unsecured Creditors are Gary H. Leibowitz, Esq., and G. David Dean, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A. GOLDEN GUERNSEY: Files for Chapter 7 Bankruptcy in Delaware ----------------------------------------------------------- OpenGate Capital, LLC, a private investment and acquisition firm, announced that one of its portfolio companies, Waukesha, Wisconsin-based milk processor Golden Guernsey, LLC, has filed for Chapter 7 bankruptcy in Delaware bankruptcy court. This action follows the closing of Golden Guernsey's facility on January 5th. OpenGate Capital acquired Golden Guernsey in September 2011 from Dean Foods after the United States Department of Justice required Dean Foods to sell the business in order to resolve antitrust concerns that Dean Foods' share of the school milk supply business was too large. When OpenGate Capital acquired Golden Guernsey the acquisition terms included an exclusive and fixed-price milk supply agreement, and the assumption of a legacy union contract. During the investment period, OpenGate Capital and its management team successfully implemented new sales and operations strategies which created a seamless transition of Golden Guernsey from the former owner's organization and yielded an increase in sales of 20 percent. However, as Golden Guernsey was suffering under the pressure to meet demands for lower cost products, it was unable to successfully reduce its expenses in a way to achieve a state of financial viability given some of its legacy relationships. Since being acquired by OpenGate Capital, Golden Guernsey made vigorous efforts to reduce its expenses through discussions with its various suppliers, vendors, and the labor union. The prospect of closing the plant and the potential for bankruptcy was raised on several occasions with these groups, all of which were provided with a clear picture of Golden Guernsey's fragile financial condition. Despite this, Golden Guernsey's efforts were rejected, leading to the closure of the business. Andrew Nikou, OpenGate Capital's CEO, stated, "We have to make realistic decisions about our investments, and the reality is that the Golden Guernsey business was unable to achieve financial autonomy given the pressure to lower prices and seemingly non- negotiable operating expenses. This was a very difficult decision given the loss of jobs and disruption to milk delivery service, yet it had to be made. The closure of the plant is not a reflection of the hard work contributed by the Golden Guernsey family of employees. Unfortunately, when expenses overwhelm revenue for too long, and we are unable to achieve cooperation from the people with whom we do business, the business cannot be sustained." About OpenGate Capital OpenGate Capital, LLC -- http://www.opengatecapital.com-- is a global private investment firm specializing in the acquisition and operation of businesses seeking revitalization through growth and operational improvements. Established in 2005, OpenGate Capital is headquartered in Los Angeles, California and maintains offices in Paris, France and Sao Paulo, Brazil. GREAT BASIN: Obtains CCAA Protection Extension Until Jan. 14 ------------------------------------------------------------ Great Basin Gold Ltd. initiated creditor protection proceedings under CCAA in Canada in September 2012. Under the CCAA proceedings, the stay of any potential creditor lawsuits was extended until Jan. 14, 2013. As previously announced, the Company's executive officers are now provided by a professional restructuring services firm which was appointed by agreement with the bank lenders who are the Company's principal creditors. The third fiscal quarter's management's discussion and analysis filed Nov. 14, 2012, at www.sedar.com discloses that the Company will require additional funding by mid-January 2013 in order to allow the planned sales or recapitalization process for its two principal mining projects (Hollister in Nevada, Burnstone in South Africa). While discussions with the lenders about securing additional funding are ongoing, no assurances can be given that the required funding will be obtained. The third quarter MD&A also stated that reviews of the lowered Hollister reserve and resource estimates were also ongoing (the Company recognizes reserves at Hollister for Canadian but not US purposes). Based on ongoing analyses, in-house staff now estimates a further reduction in Hollister resources and reserves is appropriate which implies a 3 year mine life based on the current reserve estimate at current production rates versus the 6 years previously estimated. Engineering and geological staff believe this life could potentially be extended by further developmental drilling which the Company has not been in a position to fund. The Company has initiated preparation of a NI 43-101 technical report to be filed within 45 days which will provide data and analyses to support these tentative conclusions and to serve as a basis to determine if an impairment charge from the approximately $90 million carrying value of Hollister is now warranted. The revised mineral resource estimates reflect changes in geological modeling adopted for the purposes of stringent grade control for the mineral reserve estimation process based on trial mining experience. The mineral resources are comprised of epithermal vein and disseminated Tertiary mineralization. At a 0.15 gold ounce per ton cutoff grade Measured and Indicated Resources have been reduced to 545,000 gold equivalent ounces1 ("Au eqv oz") in 0.49 Mt grading 0.918 opt Au and 5.7 opt Ag. The estimate also includes 254,000 Au eqv oz in Inferred Mineral Resources. Re-estimated Proven and Probable Mineral Reserves total 187,000 Au eqv oz in 0.29 Mt grading 0.590 opt Au and 2.7 opt Ag2. A limited underground drilling program that has continued over the past 18 months has focused on increasing confidence in the estimates of mineral resources and reserves to allow for improved mine planning and forecasting. The outcome of this drilling has been a considerable tightening up of the geological vein modeling, which resulted in a higher-grade lower-tonnage resource model being used for the purposes of mine planning and mineral reserve estimation. Critical to the sustainability of the project will be the funding and completion of underground development necessary to access the mineral resources and reserves, with the objective of extending the current 3-year life of the project. Future work should include phases of surface drilling to test targets peripheral to the current underground infrastructure. The revised mineral resources and reserves also reflect depletion from trial mining in excess of 370,000 tons which yielded approximately 400,000 Au eqv oz since commencement in 2008. There has been a downgrading in the estimate of reserves primarily because of the lower volume vein resource model used and the exclusion of reserves previously estimated for the Tertiary material. The Tertiary mineralization occurs in broad pod-like zones of low-grade gold concentration that are generally developed around very high-grade, narrow structures that are sometimes linked to underlying epithermal veins. There is a need for continued underground development and drilling before reserve status can be assigned to this material. The trial mining operation continues to extract ore from zones of the Tertiary mineralization as there is a very significant upside mineralized component to these areas. During 2012, trial mining of a number of Tertiary zones has realized 12,915 Au eqv oz from 13,200 tons grading 0.897 opt Au and 3.747 opt Ag. It is believed that considerable upside exists through further refinement and development of the Tertiary material through a combination of maximizing access and stoping options from the trackless infrastructure afforded by the spiral ramp, and optimization of pillar/backfill designs to maximize profitable extraction. The epithermal vein mineral resource and reserve estimates were completed by Hollister staff and reviewed by specialists at Deswik Mining Consultants PTY Ltd, an international consulting firm based in South Africa. The Tertiary mineral resource estimate was completed by Deswik. The work was done under the supervision of Phil Bentley, Pr.Sci.Nat., Great Basin Gold's Vice President: Geology & Exploration and Dana Roets, FSAIMM, Great Basin Gold's Chief Operating Officer, both of whom are Qualified Persons as defined by Canadian National Instrument 43-101 (Disclosure Standards for Mineral Projects), both of whom have reviewed and approved the technical information in this news release. Great Basin Gold is applying to voluntarily delist its common shares from the JSE and NYSE MKT effective immediately. Notwithstanding that the Company will apply to delist its securities, it will continue to comply with its continuous disclosure obligations. For additional details on Great Basin Gold Ltd. and its gold properties, please visit the Company's web site at www.grtbasin.com or contact Ray Dombrowski, Great Basin CEO or Peter Gibson, Great Basin CFO care of Alvarez & Marsal Canada ULC. email: rdombrowski@alvarezandmarsal.com A copy of the press release is available at http://is.gd/RW6ILf About Great Basin Gold Great Basin Gold Ltd. is incorporated under the laws of the Province of British Columbia and its registered address is 1108- 1030 West Georgia Street, in Vancouver BC, Canada. Great Basin Gold Ltd., including its subsidiaries is a mineral exploration and development company with two operating assets, both in the production build-up phase, the Hollister Project on the Carlin Trend in Nevada, U.S.A, and the Burnstone Project in the Witwatersrand Goldfields in South Africa. Over and above the exploration being conducted at the above mentioned properties, greenfields exploration is being undertaken in Tanzania and Mozambique. On Sept. 18, 2012, Great Basin Gold Ltd. announced that its principal South African subsidiary, Southgold Exploration (Pty) Ltd., owner of the Burnstone mine, filed for protection under the South African business rescue ("BR") procedures. On Sept. 19, 2012, the Company made a Companies Creditors Arrangement Act (Vancouver Registry 126583) following the business rescue proceedings for the Burnstone mine that commenced Sept. 14, 2012, as a result of the termination of all development and production activities at the mine on Sept. 11, 2012. CCAA is a Canadian insolvency statute which will allow the Company a period of time to seek buyers and partners for its two gold mining projects and/or corporate level financiers in an effort to restructure the Company. Operating and development activities were suspended at the Burnstone mine in early September 2012 which created a default under the loan agreement. Term loan 1 will be restructured or settled under the Business rescue proceedings of the South African subsidiary owing title to the Burnstone mine as well as the CCAA filing by the Company. As a result of the default the outstanding amounts have been disclosed as current. HAMPTON ROADS: Completes Relocation of Offices to Virginia Beach ---------------------------------------------------------------- Hampton Roads Bankshares, Inc., the holding company for The Bank of Hampton Roads and Shore Bank, has completed the relocation of its corporate offices to 641 Lynnhaven Parkway in Virginia Beach. In addition to housing the Company's corporate officers, the Lynnhaven Parkway offices also house Human Resources, Accounting and Treasury, Facilities Management, Legal, Risk Management, Compliance, Security and Special Assets staff for the Company and BHR. Douglas J. Glenn, president and chief executive officer of the Company and chief executive officer of BHR, said, "This relocation represents another step in returning to the Company's roots as a community bank, while also reducing our operating expenses by better utilizing facilities we own. We are proud to be the largest community bank by assets headquartered in Virginia Beach, and committed to earning a place as the most meaningful community bank in every community we serve." About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and 15 ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company reported a net loss of $98 million in 2011, compared with a net loss of $210.35 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $2.07 billion in total assets, $1.88 billion in total liabilities and $187.96 million in total shareholders' equity. HEALTHWAREHOUSE.COM INC: Unable to Pay $3-Mil. Loan Obligations --------------------------------------------------------------- HealthWarehouse.com, Inc., failed to make required payments of $1 million in principal and approximately $180,000 of accrued interest due under its Loan and Security Agreement dated Nov. 9, 2010. The Company's obligations under the Loan Documents are secured by a first-priority security interest in substantially all the assets of the Company and its subsidiaries, including, without limitation, inventory and the equipment the Company uses to fill prescriptions. The Loan Documents also require the Company to pay to the Lenders all costs and expenses incurred in connection with the enforcement and collection of the its obligations under the Loan Documents. In addition, on Jan. 15, 2013, the Company will be required to pay the Lenders $2 million in principal and approximately $193,000 in accrued interest under its Loan and Security Agreement dated Sept. 2, 2011, with the Lenders, and the 7% Promissory Notes issued thereunder. The Company's obligations under the 2011 Loan Documents are also secured by liens over the Collateral, and the 2011 Loan Documents also require the Company to pay to the Lenders all costs and expenses incurred in connection with the enforcement and collection of the its obligations thereunder. If the Lenders do elect to exercise these remedies, the Company may no longer be able to operate. In particular, if the Lenders take action against the Company's inventory or equipment, the Company will not be able to fill customer orders, and if the Company is unable to fill customers' prescriptions, it will be required by law to transfer those prescriptions to other pharmacies. In addition, the Company's suppliers and other vendors may be unwilling to provide it goods and services until it has satisfied its obligations under the Loan Documents and the 2011 Loan Documents. The Company does not currently have sufficient resources to pay its obligations under the Loan Documents and the 2011 Loan Documents, and it does not believe that the value of the Collateral will be sufficient to satisfy these obligations. Accordingly, if the Company enters, or is compelled to enter, a restructuring, reorganization, or liquidation, inside or outside of bankruptcy, it is unlikely that significant, or any, resources will be available for distribution to its unsecured creditors, to its preferred stock holders or to the holders of its common stock. The Company is considering a broad set of alternatives, including seeking additional financing and negotiating with the Lenders, to address its current liquidity constraints and to satisfy its obligations under the Loan Documents and the 2011 Loan Documents. There is no assurance that the Company will be able to pursue any course of action that will allow it to continue to operate its business as a going concern, or to continue to operate in a manner that preserves the interests of its current creditors and equity holders. About HealthWarehouse.com Florence, Kentucky-based HealthWarehouse.com, Inc., is a licensed U.S. pharmacy and healthcare e-commerce company that sells discounted brand name and generic prescription drugs and over-the- counter (OTC) medical products. As reported in the TCR on July 5, 2012, Marcum LLP, in New York, N.Y., expressed substantial doubt about HealthWarehouse.com's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. The Company's balance sheet at June 30, 2012, showed $2.2 million in total assets, $6.8 million in total liabilities, $752,226 of Redeeemable Preferred Stock Series C, and a stockholders' deficiency of $5.3 million. "Since inception, the Company has financed its operations primarily through product sales to customers, debt and equity financing agreements, and advances from stock holders. As of June 30, 2012, and Dec. 31, 2011, the Company had negligible cash and working capital deficiency of $5,724,914 and $2,404,464, respectively. For the six months ended June 30, 2012, cash flows included net cash used in operating activities of $581,948, net cash provided by investing activities of $138,241 and net cash provided by financing activities of $443,846. Additionally, all of the Company's outstanding convertible notes payable mature at the end of December 2012 and outstanding notes payable mature in January 2013. These conditions raise substantial doubt about the Company's ability to continue as a going concern." HMX ACQUISITION: Committee Hiring ASK LLP as Local Counsel ---------------------------------------------------------- The Official Committee of Unsecured Creditors of HMX Acquisition Corp., et al., asks the U.S. Bankruptcy Court for the Southern District of New York for authorization to retain ASK LLP as its local counsel, nunc pro tunc to Nov. 14, 2012. The hearing on the motion will be held on Jan. 8, 2013, at 10:00 a.m. ASK LLP's services will include: (a) providing assistance and advice to the Committee in its examination and analysis of the conduct of the Debtors' affairs; (b) providing assistance and advice to the Committee in the review, analysis and negotiation of the proposed sale of assets and assistance to the Committee in the review, analysis and negotiation of related documents and filings; (c) providing assistance and advice to the Committee in the review, analysis and negotiation of financing agreements; (d) assisting primary counsel in taking all necessary actions to protect and preserve the Committee's interests, including possible prosecution of actions on its behalf; and if appropriate, review and analysis of claims filed against the Debtors' estates; (e) providing preparation on behalf of the Committee of all necessary motions, applications, answers, orders, reports, pleadings and papers in support of positions taken by the Committee; (f) appearing, as appropriate, before the Bankruptcy Court, the Appellate Courts and the United States Trustee to protect the interests of the Committee before such courts and before the United States Trustee; (g) performing all other necessary legal services on behalf of the Committee in this case, as instructed by the Committee; (h) advising primary counsel on local rules and customs; and (i) acting as counsel to the Committee to the extent primary counsel has a conflict. The Creditors Committee believes that ASK LLP does not represent and does not hold any interest adverse to the Debtors' estates, its creditors or any parties in interest in the matters upon which ASK LLP is to be engaged. ASK LLP will seek reasonable compensation from the Debtors' estates for services rendered to the Committee based on the following hourly rates: $300-$450 for partners and counsel, $250-$350 for associates, and $150 for paraprofessionals. ASK LLP will also seek reimbursement for all out-of-pocket expenses incurred in rendering services to the Committee, consistent with the rules and guidelines of the Bankruptcy Court. Counsel for ASK LLP may be reached at: Edward E. Neiger, Esq. Marianna Udem, Esq. Sahar Hakakian, Esq. ASK LLP 151 West 46th Street, 4th Floor New York, NY 10036 Tel: (212) 267-7342 Fax: (212) 918-3427 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. Leonard, Street and Deinard Professional Association, in Minneapolis, Minnesota, represents the Committee as lead counsel. HMX ACQUISITION: Can Employ CDG Group as Financial Advisor ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized HMX Acquisition Corp., et al., to employ CDG Group, LLC, as their financial advisor, nunc pro tunc to Oct. 19, 2012. CDG will: a. perform the necessary due diligence on the Company's operations, business structure, debt obligations and historic forecast performance; b. understand the cash flows and liquidity of the Company's business and assist the Company in preparing its thirteen- week cash forecasts; c. advise with respect to the Company's cash management and overall liquidity; d. review negotiations of any sale or refinancing proposals; and e. perform other services as may be agreed to by the Company and CDG from time to time. The Debtors have agreed to pay CDG a weekly fee in the amount of $20,000 during those weekly periods that the Debtors are not in default under their senior secured loan and $30,000 during those weekly periods that the Debtors are in default under their senior secured loan, with the initial payment paid on the date of execution of the Engagement Letter and then on each seventh day thereafter during the term of the engagement. The Debtors have been paying CDG at the rate of $30,000 per week since the weekly period commencing July 24, 2012. CDG is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, as required by Section 327(a) of the Bankruptcy Code and does not hold or represent any interest adverse to the Debtors' estates. 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. Leonard, Street and Deinard Professional Association, in Minneapolis, Minnesota, represents the Committee as lead counsel. HMX ACQUISITION: Hires Epiq Bankruptcy as Administrative Agent -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized HMX Acquisition Corp., et al., to employ Epiq Bankruptcy Solutions, LLC, as administrative agent in the Debtors' Chapter 11 Cases, nunc pro tunc to Oct. 19, 2012. Epiq will render these administrative services: a. Gathering data in conjunction with the preparation, and assist with the preparation, of the Debtors' schedules of assets and liabilities and statements of financial affairs; b. Generating, providing and assisting with claims reports, claims objections, exhibits, claims reconciliation, and related matters; c. Assisting with, among other things, if necessary, solicitation, balloting, tabulation and calculation of votes, as well as preparing any appropriate reports, as required in furtherance of confirmation of plan(s) of reorganization; d. Generating an official ballot certification and testify, if necessary, in support of the ballot tabulation results; and e. Providing other claims processing, noticing, solicitation, balloting and other administrative services, as may be requested from time to time by the Debtors, the Court or the clerk of the Court. To the best of Epiq's knowledge, it is a "disinterested person" as referenced in Section 327(a) of the Bankruptcy Code and as defined in Section 101(14) of the Bankruptcy Code. The Debtors seek to compensate Epiq in accordance with the terms of the Services Agreement, a copy of which is available at: http://bankrupt.com/misc/hmx.doc40exhibita.pdf 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. Leonard, Street and Deinard Professional Association, in Minneapolis, Minnesota, represents the Committee as lead counsel. HMX ACQUISITION: Employ Proskauer Rose as Counsels -------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized HMX Acquisition Corp., et al., to employ Proskauer Rose LLP as counsel for the Debtors, nunc pro tunc to Oct. 19, 2012. Proskauer will waive its claim to the Accrued Fees upon entry of this Order. Proskauer will provide ten (10) business days' notice to the Debtors, the U.S. Trustee and any statutory committee appointed in the Debtors' Chapter 11 cases in connection with any increase of the hourly rates listed in the Thomas Declaration. Proskauer will render these services: a. advising the Debtors of their powers and duties as debtors in possession; b. advising the Debtors on the conduct of the Chapter 11 cases, including all of the legal and administrative requirements of operating in chapter 11; c. representing the Debtors in proceedings and hearings in the United States District and Bankruptcy Courts for the Southern District of New York; d. preparing on behalf of the Debtors any necessary motions, applications, orders and other legal papers; e. providing assistance, advice and representation concerning the Debtors' proposed sale of substantially all of their assets, confirmation of any proposed plan and soliciting acceptances or responding to objections of such plan; f. providing assistance, advice and representation concerning any investigation of the assets, liabilities and financial condition of the Debtors that may be required under local, state or federal law; g. prosecuting and defending litigation matters and such other matters that might arise during the Chapter 11 cases; h. providing counseling and representation with respect to assumption or rejection of executory contracts and leases, sales of assets and other bankruptcy-related matters arising from the Chapter 11 Cases; i. rendering advice with respect to general corporate and litigation issues relating to the Chapter 11 cases, including, but not limited to, intellectual property, corporate finance, labor, tax and commercial matters; and j. performing other legal services as may be necessary and appropriate for the efficient and economical administration of the Chapter 11 Cases. The hourly rates generally charged by Proskauer are: Partner $550 to $1,050 Senior Counsel $450 to $950 Associate $205 to $750 Paraprofessionals $100 to $315 The primary restructuring attorneys providing services on this engagement and their hourly rates are: Mark K. Thomas, Esq. $975 Peter J. Young, Esq. $800 Jared D. Zajac, Esq. $600 Brandon W. Levitan, Esq. $475 Proskauer's hourly rates will increase effective Nov. 1, 2012, which is the beginning of Proskauer's fiscal year. To the best of the Debtors' knowledge, Proskauer is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, as required by Section 327(a) of the Bankruptcy Code and does not hold or represent any interest adverse to the Debtors' estates. 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. Leonard, Street and Deinard Professional Association, in Minneapolis, Minnesota, represents the Committee as lead counsel. HMX ACQUISITION: Wins OK for William Blair as Investment Banker --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized HMX Acquisition Corp., et al., to employ William Blair & Company, L.L.C., as their investment banker, nunc pro tunc to Oct. 19, 2012. Blair will be compensated and reimbursed for its expenses in the Debtors' Chapter 11 cases in accordance with the terms of the parties' Engagement Letter. Blair, however, has agreed to (i) delete the Forbearance Fee and the Credit Facility Transaction Fee from the Engagement Letter and (ii) a credit of 100% of the postpetition Monthly Fees once against the M&A Fee or the Financing Fee. In addition, the table set forth in section 2.d of the Engagement Letter will be modified as follows: Incremental Aggregate Consideration Fee ----------------------------------- --- Up to and including $50 million 1.85% More than $50 million, up to but not including $65 million 2.40% $65 and up to but not including $80 million 3.25% $80 million and up to but not including $100 million 4.00% $100 million and up 5.00% Blair will advise the Debtors in connection with a (i) Credit Facility Transaction; (ii) Financing Transaction; and/or (iii) M&A Transaction. Blair will also provide such investment banking services as Blair and the Debtors deem appropriate in connection with a possible transactions. Pursuant to the Engagement Letter, the parties agreed to this compensation structure: a. A monthly fee in the amount of $150,000; b. Upon the consummation of a Credit Facility Transaction (other than a Forbearance Transaction), the Company will pay a Credit Facility Transaction Fee equal to $500,000. Upon the consummation of a Forbearance Transaction, the Company will pay to Blair a Forbearance Fee of $100,000, which fee will be fully credited against any Credit Facility Transaction Fee. c. Upon the consummation of a Financing Transaction, the Company will pay Blair a Financing Fee, calculated by multiplying the applicable fee percentage set forth by the total gross proceeds raised or committed: Funds Raised or Committed Fee ------------------------- --- Senior Secured Revolving Credit Facility 1.25% Secured (by the Company's intellectual 3.00% property or otherwise), Junior Secured, or Unsecured Debt Equity or Equity Equivalents from a party other than S. Kumars Nationwide Limited ("SKNL") * Up to and including $30 million 6.00% * More than $30 million and up to but not including $40 million 4.00% * $40 million and above 3.00% Equity or Equity Equivalents from SKNL 3.00% To the best of the Debtors' knowledge, Blair is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, as required by Section 327(a) of the Bankruptcy Code, and does not hold or represent any interest adverse to the Debtors' estates. 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. Leonard, Street and Deinard Professional Association, in Minneapolis, Minnesota, represents the Committee as lead counsel. HMX ACQUISITION: Committee Retains Leonard Street as Lead Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized the official committee of unsecured creditors of HMX Acquisition Corp., et al., to retain Leonard, Street and Deinard Professional Association as its lead counsel, nunc pro tunc to Nov. 14, 2012. Leonard Street will provide, among other things, the following services: (a) Assistance and advice to the Committee in its examination and analysis of the conduct of the Debtors' affairs; (b) Assistance and advice to the Committee in the review, analysis and negotiation of the proposed sale of assets and assistance to the Committee in the review, analysis and negotiation of related documents and filings; (c) Assistance and advice to the Committee in the review, analysis and negotiation of financing agreements; (d) Taking all necessary actions to protect and preserve the Committee's interests, including possible prosecution of actions on its behalf; and if appropriate, review and analysis of claims filed against the Debtors' estate; (e) Preparation on behalf of the Committee of all necessary motions, applications, answers, orders, reports, pleadings and papers in support of positions taken by the Committee; (f) Appearing, as appropriate, before the Bankruptcy Court, the Appellate Courts and the United States Trustee to protect the interests of the Committee before such courts and before the United States Trustee; and (g) Performing all other necessary legal services on behalf of the Committee in this case, as instructed by the Committee. Ten business days' notice must be provided by Leonard Street to the Debtor, the United States Trustee, and the Committee prior to any increases in the rates set forth in the Application, and said notice must be filed with the Court. The 2011 hourly rates for the attorneys who are expected to provide the bulk of services for the Committee are: Robert T. Kugler, Shareholder $490 Edwin H. Caldie, Associate $305 Amanda K. Schlitz, Associate $285 Phillip J. Ashfield, Associate $275 Aong Moua, Paralegal $190 The Committee believes that the attorneys selected by the Committee do not represent any other interest in connection with this case, do not hold or represent any interest adverse to the Debtors' estates, and are disinterested under Section 328 of the Bankruptcy Code. Counsel for Lenard Street may be reached at: Robert T. Kugler, Esq. Lara O. Glaesman, Esq. Edwin H. Caldie, Esq. LEONARD, STREET AND DEINARD Professional Association 150 South Fifth Street, Suite 2300 Minneapolis, MN 55402 Tel: (612) 335-1500 Fax: (612) 335 1657 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. Leonard, Street and Deinard Professional Association, in Minneapolis, Minnesota, represents the Committee as lead counsel. HOSTESS BRANDS: Court OKs Hilco for Real Estate Sale ---------------------------------------------------- Federal Bankruptcy Judge Robert Drain approved the appointment of privately-held Hilco as the agent representing Hostess Brands, Inc. Hilco will sell all real estate, machinery and equipment, and rolling stock assets that remain in the company's estate following the completion of bankruptcy court supervised auctions conducted by investment bank Perella Weinberg Partners. The auctions are expected to be completed this coming spring. Hilco will play a crucial role in helping Hostess maximize value for all of the company's stakeholders by leveraging its considerable global expertise in the marketing and sale of various real estate, machinery and equipment and rolling stock assets. Hilco will also assist Perella Weinberg Partners in the sale of any remaining intellectual property. "This assignment carries with it great responsibilities. As the liquidating agent representing Hostess Brands, I am confident that Hilco will succeed in generating maximum value for the benefit of company's creditors," said Jeffrey B. Hecktman, Chairman and CEO of Hilco. Mr. Hecktman went on to say, "Hilco has managed multiple asset class sales of this nature in the past. Our strategy has been to use an integrated approach to value enhancement, made possible by leveraging the deep expertise and global reach of three Hilco business units that are core to the Hostess assignment: Hilco Real Estate LLC, Hilco Industrial, LLC and Hilco Streambank." A fourth business unit, Hilco Asset Protection, LLC has also been hired to provide security services at bakery facilities across the country for the duration of the sale process. About Hilco Trading, LLC Headquartered in Northbrook, Illinois, Hilco -- http://www.hilcotrading.com-- is a privately-held, diversified financial and operational services firm whose principal competency is understanding and maximizing the value of business assets, including retail, consumer and industrial inventory; machinery and equipment; real estate; accounts receivable; intellectual property; and, going-concern enterprises. Through 500 professionals operating on five continents, Hilco helps companies and their professional advisors assess asset value, maximize value for said assets through asset monetization solutions, and enhance value through advisory and consulting solutions. 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. HYPERTENSION DIAGNOSTICS: Sells $42,500 Convertible Note to Asher ----------------------------------------------------------------- Hypertension Diagnostics, Inc., entered into a Securities Purchase Agreement with Asher Enterprises, Inc., pursuant to which the Company sold to Asher an 8% Convertible Promissory Note in the original principal amount of $42,500. The Note has a maturity date of Sept. 12, 2013, and is convertible into the Company's common stock at the Variable Conversion Price of 58% multiplied by the Market Price. "Market Price" means the average of the lowest three trading prices for the common stock during the 10 trading day period ending on the latest complete Trading Day prior to the Conversion Date. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The Company has the right to prepay the outstanding Note for an amount equal to 115%, multiplied by the sum of the then outstanding principal amount of this Note plus accrued and unpaid interest on the unpaid principal amount of this Note. The purchase and sale of the Note closed on Jan. 2, 2013, the date that the purchase price was delivered to the Company. The issuance of the Note was exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser was an accredited and sophisticated investor familiar with the Company's operation, and there was no solicitation. About Hypertension Diagnostics Minnetonka, Minnesota-based Hypertension Diagnostics, Inc., was previously engaged in the design, development, manufacture and marketing of proprietary devices. In August 2011, the Company sold its medical device inventory, subleased its office and manufacturing facility, and entered into a limited license agreement with a company controlled by Jay Cohn, a founder and at that time, a director of the Company. In September 2011, the Company formed HDI Plastics Inc. ("HDIP"), a wholly owned- subsidiary, leased a facility for warehouse and processing of recycled plastic, purchased selected manufacturing assets and began engaging in the business of plastics reprocessing in Austin, Tex. On March 29, 2012, the Company ceased operations at the Austin facility and it is currently seeking to relocate the processing facility to a new location. The Company currently has a plan to resume production around Feb. 1, 2013, assuming adequate capital is obtained to do so. The Company's balance sheet at Sept. 30, 2012, showed $1.1 million in total assets, $2.0 million in total liabilities, and a stockholders' deficit of $909,741. As reported in the TCR on Oct. 2, 2012, Moquist Thorvilson Kaufmann & Pieper LLC, in Edina, Minnesota, expressed substantial doubt about Hypertension's ability to continue as a going concern. The independent auditors noted that the Company had net losses for the years ended June 30, 2012, and 2011, and has a stockholders' deficit at June 30, 2012. IMMUCOR INC: Moody's Reviews 'B2' CFR for Possible Downgrade ------------------------------------------------------------ Moody's Investors Service placed the ratings of Immucor, Inc. including the company's B2 Corporate Family Rating, under review for possible downgrade. Immucor's Speculative Grade Liquidity rating of SGL-2 remains unchanged. Ratings are placed under review for possible downgrade: Corporate Family Rating, B2 Probability of Default Rating, B2 $400 million Senior Unsecured Notes due 2019, (Caa1, LGD5, 84%) $610 million Term Loan B due 2018, (Ba3, LGD2, 29%) $100 million Revolver due 2017, (Ba3, LGD2, 29%) Ratings Rationale The review for possible downgrade reflects Immucor's substantial financial leverage and deviation from Moody's expectation in reducing leverage to a level that is commensurate with its current rating. Immucor's leverage as measured by debt/EBITDA (incorporating Moody's analytical adjustments) was high at around 7.0x at the end of the 1Q 2013 (August 31, 2012). Moody's believes near-term deleveraging will be limited due to: flat demand for blood testing products due to the soft macro-economic environment; higher expenses related to investments the company is making in R&D and sales and marketing; and the medical device tax starting in 2013. The deleveraging pace could also be delayed by the recently announced acquisition of LIFECODES (which provides organ transplantation diagnostics services), due to expected additional debt incurred to partially fund the acquisition and business risk associated with the integration. In addition, Immucor's operating risk profile remains clouded by on-going regulatory uncertainty with respect to the FDA's notice of intent to revoke ("NOIR") Immucor's biologics license in Moody's view. Moody's review will evaluate management's strategies and effectiveness to reinvigorate revenue and earnings growth in light of the unfavorable industry headwinds, regulatory uncertainty from FDA inspection and potential integration risks from the acquisition. The review will focus on the company's ability and willingness to delever in the next 6-12 months and will incorporate Immucor's operating performance in its second quarter, business outlook and liquidity profile. Moody's expects to conclude the review within the next 60-90 days. Immucor's liquidity profile benefits from considerable availability under its $100 million revolver and Moody's expectation for good headroom under the net senior secured leverage covenant. However, free cash flow will continue to exhibit seasonality, especially in quarters with interest payment on the unsecured notes. The principal methodology used in rating Immucor, Inc was the Global Medical Product and Device Industry Methodology published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Immucor, Inc., headquartered in Norcross, Georgia, is a leading in-vitro diagnostic blood typing and screening company that develops and manufactures reagents and automated systems used by hospitals, donor centers and reference laboratories. For the twelve months ended August 31, 2012, Immucor reported net sales of approximately $336 million. IMPACT SERVICES: Low-Level Radioactive Waste Removed From Site -------------------------------------------------------------- Frank Munger, writing for Knoxville News Sentinel, reports that about 600,000 pounds of low-level radioactive waste has been removed from the Oak Ridge site of IMPACT Services Inc. The company shut down operations in May and subsequently filed for bankruptcy. The report relates Meg Lockhart, a spokeswoman for the Tennessee Department of Environment and Conservation, provided the estimate in response to questions. In accordance with its license, IMPACT Services had a $1.2 million surety bond for the operations, and Mr. Lockhart said the state -- which is overseeing the waste removal in conjunction with its contractor, Science Applications International Corp. -- had now gained control of the full bond amount. So far, there have been 94 shipments of wastes from the Oak Ridge site, Mr. Lockhart said. In most cases, the waste stored at site has been returned to the original generators, she said. About Impact Services Oak Ridge, Tennessee-based Impact Services Inc., a radioactive waste-treatment center, and affiliate Impact Holdings Inc. commenced liquidation proceedings under Chapter 7 of the Bankruptcy Code (Bankr. D. Del. Case No. 12-11605 and 12-11604) in Wilmington, Delaware, on May 24, 2012. The petition lists $1 million to $10 million in assets and $10 million to $50 million in debts. Lawyers at Young Conaway Stargatt & Taylor LLP represent the Company. According to the Chapter 7 petition, the Debtor operated radioactive waste processing centers. The radioactive waste processed by the Debtor is low-level radioactive waste. The Debtor said it does not believe the current storage and processing of low-level radioactive waste currently poses a threat of imminent and identifiable harm to public health or safety, but warned it may cause harm if not properly stored or processed. Jacqueline Palank, writing for Dow Jones' Daily Bankruptcy Review, reported Impact came under controversy when it was alleged to have illegally and intentionally disposed of radioactive materials at a Tennessee landfill. The allegation formed the base of an anonymous complaint brought to the National Response Center. Impact disputed the allegations as "unfounded and groundless," according to a letter sent to Tennessee officials. The state cleared the company's name in January 2012, DBR related, citing Knoxville News Sentinel, finding "no validity" to the allegations after inspections. INFUSYSTEM HOLDINGS: Names J. Skonieczny Chief Operating Officer ---------------------------------------------------------------- The Board of Directors of InfuSystem Holdings, Inc., appointed Janet Skonieczny, the Company's Vice President of Operations and Corporate Compliance Officer since 2007, as Chief Operating Officer, effective immediately. She will report directly to InfuSystem's Interim Chief Executive Officer, Dilip Singh. In this new corporate role, Ms. Skonieczny is responsible for the following: Payor Relationship Management, including CMS Competitive Bidding; Billing and Claims Management; Supply Chain Management; Customer Service and Clinical Support; Inventory and Asset Management; Warehousing/Logistics and Regulatory Issues. Additionally, all of the Company's Operational functions for pump sales and rentals in Olathe, KS and Madison Heights, MI will report directly to her. Ms. Skonieczny has also served as Vice President of Operations of InfuSystem, Inc., the Company's wholly-owned subsidiary, since 1998. She originally joined InfuSystem and its predecessor company, Venture Medical, in 1988. "Jan Skonieczny is a seasoned and experienced operational healthcare executive who is well prepared to assist the leadership team with executing the Company's strategic vision and operational plans," said Interim CEO Dilip Singh. "She is not only familiar with the complexity of the ever-evolving healthcare marketplace that we serve, but also understands the specific needs of payors, health care providers, and patients. This is what distinguishes InfuSystem from all of its competitors and helps make us the leading provider in the Infusion Pump Service industry." In connection with this appointment, Ms. Skonieczny will receive an annual salary of $250,000. About InfuSystem Holdings InfuSystem Holdings, Inc., operates through operating subsidiaries, including InfuSystem, Inc., and First Biomedical, Inc. InfuSystem provides infusion pumps and related services. InfuSystem provides services to hospitals, oncology practices and facilities and other alternate site healthcare providers. Headquartered in Madison Heights, Michigan, InfuSystem delivers local, field-based customer support, and also operates pump service and repair Centers of Excellence in Michigan, Kansas, California, and Ontario, Canada. After auditing the Company's 2011 financial statements, Deloitte & Touche LLP, in Detroit, Michigan, said that the possibility of a change in the majority representation of the Board and consequent event of default under the Credit Facility, which would allow the lenders to cause the debt of $24.0 million to become immediately due and payable, raises substantial doubt about the Company's ability to continue as a going concern. The Company reported a net loss of $45.44 million in 2011, compared with a net loss of $1.85 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $74.02 million in total assets, $34.68 million in total liabilities and $39.33 million in total stockholders' equity. INFUSYSTEM HOLDINGS: To Remain as Independent Public Company ------------------------------------------------------------ The Board of Directors of InfuSystem Holdings, Inc., has formally ended its assessment of potential strategic alternatives initiated by InfuSystem's prior management in conjunction with the investment banking firm, Houlihan Lokey. The Board stated that it believes the Company's current strategic plan offers greater value. Making the announcement, Executive Chairman Ryan Morris said the Board unanimously agreed that, given current business indicators and the certainty stemming from the Company's recent financing arrangement, InfuSystem shareholders would be best served by remaining an independent public company. "The Company," he added, "intends to focus on delivering consistent growth and profitable results in its core business as well as executing strategic initiatives designed to leverage its existing, strong client base." The Company anticipates that final costs associated with the strategic alternatives program its Board evaluated will be reflected in the fourth quarter 2012 results. The Company also announced it has initiated a search process to hire a permanent Chief Executive Officer. The Board's Executive Search Committee, headed by Lead Independent Director John Climaco, will work closely with RobinsonButler, a top-tier retained executive search firm serving the life science industry, to conduct a thorough, transparent and expeditious search process. Interim CEO Dilip Singh will step down upon completion of the search assignment. Mr. Morris commented further: "The Board thanks Interim CEO Dilip Singh for his outstanding contributions to the important progress we have achieved since the current leadership team assumed control of the Company in the second quarter of 2012. He is instrumental in our implementing strategic efforts that have returned InfuSystem to profitability, improved operational performance, and strengthened the Company's overall financial footing by increasing cash and reducing debt on the balance sheet as well as securing a new, superior credit facility. Dilip's success sets a compelling strategic course for 2013 and provides the basis for an orderly transition, a solid long-term foundation, and maximum continuity as we grow the business." About InfuSystem Holdings InfuSystem Holdings, Inc., operates through operating subsidiaries, including InfuSystem, Inc., and First Biomedical, Inc. InfuSystem provides infusion pumps and related services. InfuSystem provides services to hospitals, oncology practices and facilities and other alternate site healthcare providers. Headquartered in Madison Heights, Michigan, InfuSystem delivers local, field-based customer support, and also operates pump service and repair Centers of Excellence in Michigan, Kansas, California, and Ontario, Canada. After auditing the Company's 2011 financial statements, Deloitte & Touche LLP, in Detroit, Michigan, said that the possibility of a change in the majority representation of the Board and consequent event of default under the Credit Facility, which would allow the lenders to cause the debt of $24.0 million to become immediately due and payable, raises substantial doubt about the Company's ability to continue as a going concern. The Company reported a net loss of $45.44 million in 2011, compared with a net loss of $1.85 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $74.02 million in total assets, $34.68 million in total liabilities and $39.33 million in total stockholders' equity. INSPIRATION BIOPHARMA: Can Employ Evercore as Investment Banker --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts authorized Inspiration Biopharmaceuticals, Inc., to employ Evercore Group, LLC, as its investment banker, jointly and severally with Ipsen Pharma, S.A.S., its principal secured creditor, for the limited purpose of a sale. The Debtor filed the case to implement an orderly sale of all or substantially all of its assets together with certain assets of Ipsen that are related to the Debtor's assets, i.e., the treatment of hemophilia. Evercore has agreed to provide these services: (a) Advising and assisting the Debtor and Ipsen in a Sale transaction, if the Debtor and Ipsen determine to undertake such a transaction; (b) Providing testimony in any proceedings under the Bankruptcy Code that are pending before the Bankruptcy Court, as necessary, with respect to a Sale and/or with respect to the procedures and processes to be employed in connection with a sale; (c) Assisting the Debtor and Ipsen in: structuring and effecting a sale; reviewing and analyzing the business, operations and financial projections of the Assets involved in a Sale; identifying interested parties and/or potential acquirors and, at the Debtor's and Ipsen's request, contacting such interested parties and/or potential acquirors; and, advising the Debtor and Ipsen in connection with negotiations with potential interested parties and/or acquirors and aiding in the consummation of a sale. To the best of the Debtor's knowledge: (i) Evercore is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, and does not hold or represent an interest materially adverse to the Debtor's estate; and (ii) Evercore has no connection to the Debtor, its creditors or other parties-in- interest in the Debtor's Chapter 11 case. A copy of the Employment Application, which includes a summary of the Fee and Expense Structure, can be found at: http://bankrupt.com/misc/inspiration.doc69.pdf 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. INSPIREMD INC: Incurs $17.6 Million Net Loss in Fiscal 2012 ----------------------------------------------------------- InspireMD, Inc., filed an amendment the annual report on Form 10-KT for the transition period ended June 30, 2012, for the purpose of including the results of operations for the 12 month period ended June 30, 2012, included in "Part II?Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and audited financial statements for the 12 month period ended June 30, 2012. InspireMD reported a net loss of US$17.59 million on US$5.35 million of revenue for the year ended June 30, 2012, compared with a net loss of US$6.17 million on US$4.67 million of revenue during the prior year. The Company's balance sheet at June 30, 2012, showed US$16.01 million in total assets, US$10.62 million in total liabilities and US$5.38 million in total equity. Kesselman & Kesselman, in Tel Aviv, Israel, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2012. The independent auditors noted that the Company has had recurring losses, negative cash flows from operating activities and has significant future commitments that raise substantial doubt about its ability to continue as a going concern. A copy of the amended filing is available for free at: http://is.gd/mSwv9f About InspireMD InspireMD, Inc., was organized in the State of Delaware on Feb. 29, 2008, as Saguaro Resources, Inc., to engage in the acquisition, exploration and development of natural resource properties. On March 28, 2011, the Company changed its name from "Saguaro Resources, Inc." to "InspireMD, Inc." Headquartered in Tel Aviv, Israel, InspireMD, Inc., is a medical device company focusing on the development and commercialization of its proprietary stent platform technology, Mguard. MGuard provides embolic protection in stenting procedures by placing a micron mesh sleeve over a stent. The Company's initial products are marketed for use mainly in patients with acute coronary syndromes, notably acute myocardial infarction (heart attack) and saphenous vein graft coronary interventions (bypass surgery). The Company's balance sheet at Sept. 30, 2012, showed $13.6 million in total assets, $14.4 million in total liabilities, and a stockholders' deficit of $756,000. The Company said the following statement in its quarterly report for the period ended Sept. 30, 2012: "Because we have had recurring losses and negative cash flows from operating activities and have significant future commitments, substantial doubt exists regarding our ability to remain in operation at the same level we are currently performing. Further, the report of Kesselman & Kesselman C.P.A.s (Isr.), our independent registered public accounting firm, with respect to our financial statements at June 30, 2012, Dec. 31, 2011. and 2010, and for the six month period ended June 30, 2012, and the years ended Dec. 31, 2011, 2010, and 2009, contains an explanatory paragraph as to our potential inability to continue as a going concern. Additionally, this may adversely affect our ability to obtain new financing on reasonable terms or at all." INTERLEUKIN GENETICS: Appoints New Chief Marketing Officer ---------------------------------------------------------- Interleukin Genetics, Inc., appointed Scott Snyder as Chief Marketing Officer. In this role, Scott will spearhead the launch of the Company's proprietary PST genetic risk panel to guide more effective dental preventive care. Scott will have responsibility for marketing Interleukin's professional healthcare tests, including PST and a proprietary test for osteoarthritis progression, and for the Inherent Health brand of health and wellness genetic tests within consumer channels. "I am very pleased to welcome Scott as Interleukin's new Chief Marketing Officer and have great confidence that he will drive the next phase of the Company's growth," said Kenneth Kornman, DDS, PhD, chief executive officer, Interleukin Genetics, Inc. "Scott's extensive experience in marketing innovative life sciences products and knowledge of the oral healthcare market are consistent with our company's goal of advancing more personalized care in the prevention of periodontal disease and across all of our wellness programs. He has a proven track record of building valuable brands and driving strong sales performance." Scott Snyder has nearly 25 years of global consumer marketing experience in life sciences and consumer healthcare. Most recently, Scott served as Vice President of Marketing and General Manager at Bausch & Lomb, Inc., where he led the successful turnaround of the company's global lens care business and directed global franchise management. Prior to this, Scott held marketing leadership roles with Johnson & Johnson, Inc. (J&J) for more than 20 years, including Executive Director of Marketing for Orapharma, Inc., where he successfully led the post-acquisition integration of the dental company into J&J and repositioned the business for further growth. Other positions at J&J included Vice President of Marketing for Therakos, Inc., Director of Managed Care Sales for McNeil Specialty Pharmaceuticals, Inc. and Marketing Director for the Tylenol brand. "I welcome the opportunity to work with Interleukin and its strategic partners to provide the marketing leadership necessary to advance personalized care in dentistry through the regular use of the PST genetic test and personalized medicine overall," said Scott Snyder, chief marketing officer, Interleukin Genetics, Inc. 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. INTERNATIONAL HOME: Preliminary Examiner Report Out Jan. 18 ----------------------------------------------------------- The Hon. Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court for the District of Puerto Rico approved the appointment of Marcos L. Colon Cuebas, CPA, as examiner for International Home Products, Inc., and Health Distillers International, Inc. Donald F. Walton, the U.S. Trustee for Region 21, and the examiner have agreed to this timetable for the work to be performed: a. Dec. 7, 2012 -- Work-plan and budget due, after examination of documents at the Debtors' facilities; b. Jan. 18, 2013 -- Preliminary report due; and c. Feb. 19, 2012 -- Final report due. The examiner will be compensated at these hourly rates: Partners $150 Manager $100 Seniors $75 Staff $65 To the best of the U.S. Trustee's knowledge, the examiner is a "disinterested person' as that term is defined in Section 101(14) of the Bankruptcy Code. As reported by the TCR on Oct. 2, 2012, secured creditor First Bank Puerto Rico asked the Court to appoint an examiner in the Chapter 11 cases of the Debtors, saying that the examiner will conduct an investigation of the Debtors' management of assets and their financial affairs because, among other things, the Debtors have not completed an audit of their financial statements for the years 2010 and 2011. Creditor Marian Ellen Foti joined in the motion of First Bank to appoint an examiner. On Oct. 4, 2012, the Court stated that since the debts in the case exceed $5 million, the appointment of an examiner is mandatory. On Oct. 9, 2012, the Debtors requested reconsideration to the court order due to the fact that the Debtors have contested in their objection to the appointment of the examiner and the supplement thereto that the fixed, liquidated and unsecured debts excluding debts for goods, services, or taxes, or debts to insiders, do not reach the $5 million limit imposed by the Bankruptcy Code. The Debtors reinstated in the supplement that First Bank's claim in full has been disputed and is contingent to the results of an adversary proceeding and a pending appeal. Without First Bank's claim, the requirement of the $5 million fixed, liquidated, unsecured debts, excluding debts for goods, services, taxes or debts to insiders, is not complied. On Oct. 22, 2012, the Court denied the Debtors' motion for reconsideration on the court order authorizing the appointment of an examiner. The Court said that the record shows that the Debtors have more than $5 million in unsecured debts. Proof of claim 9-1, as amended, filed by Firstbank shows a total amount claimed of $36,865,623 and the value of collateral of $27 million. Thus the difference exceeds $5 million. According to the Court, the claim has not been objected to. The issue regarding Firstbank's claim is whether it is secured or not. The Court found that it was at a hearing held on May 3, 2012, and in the order entered on May 15, 2012. The order was entered in relation to the Debtors' request for use of cash collateral and not as a result of an objection to claim. The order was appealed to the U.S. District Court. "If the Debtors prevail in their appeal, the amount of unsecured debt will increase," the Court stated. A review of the minutes of the hearing held on July 24, 2012, shows the Debtors accepted amounts of $40 million; and in the joint motion filed on June 22, 2012, the unsecured debt admitted exceeds $5 million. About International Home Products International Home Products, Inc., is engaged in the sale, financing of "Lifetime" cookware and other kitchenware as well as sale of account receivables in the secondary market. It is the exclusive distributor of "Lifetime" products in Puerto Rico for over 40 years. The Company filed for Chapter 11 bankruptcy protection (Bankr. D.P.R. Case No. 12-02997) on April 19, 2012. Carmen D. Conde Torres, Esq., in San Juan, P.R., serves as the Debtor's counsel. Wigberto Lugo Mendel, CPA, serves as its accountants. The Debtor disclosed $66,155,798 and $43,350,031 in liabilities as of the Chapter 11 filing. Secured lender First-Bank Puerto Rico is represented by Manuel Fernandez-Bared, Esq., and Jane Patricia Van Kirk, Esq., at Toro, Colon, Mullet, Rivera & Sifre, P.S.C. J & J PROPERTIES: Case Summary & 6 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: J & J Properties of Lake Wylie, LLC P.O. Box 5274 Lake Wylie, SC 29710 Bankruptcy Case No.: 13-00067 Chapter 11 Petition Date: January 4, 2013 Court: U.S. Bankruptcy Court District of South Carolina (Spartanburg) Judge: Helen E. Burris Debtor's Counsel: Reid B. Smith, Esq. PRICE BIRD SMITH & BOULWARE, P.A. 1712 St Julian Place, Suite 102 Columbia, SC 29204 Tel: (803) 779-2255 E-mail: reid@pricebirdlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its six unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/scb13-00067.pdf The petition was signed by JR Pettus, authorized representative. JACKSONVILLE BANCORP: Amends Purchase Agreement with CapGen ----------------------------------------------------------- Jacksonville Bancorp, Inc., on Dec. 31, 2012, entered into an Amended and Restated Stock Purchase Agreement with its largest shareholder, CapGen Capital Group IV LP, and 19 other accredited investors for the purchase by the Investors of an aggregate of approximately 50,000 shares of the Company's Mandatorily Convertible, Noncumulative, Nonvoting Perpetual Preferred Stock, Series A, liquidation preference $1,000 per share, at a purchase price of $1,000 per share, subject to the terms and conditions contained in the Restated Stock Purchase Agreement. The Stock Purchase closed on Dec. 31, 2012. The Company expects an aggregate of approximately 100 million shares of common stock and Nonvoting Common Stock to be issued upon conversion of the Series A Preferred Stock. The Conversion Price and Conversion Rate were approved by a special pricing committee of the Company's board of directors comprised solely of disinterested directors, and ratified by the entire board. Under the Restated Stock Purchase Agreement, the Investors have preemptive rights with respect to public or private offerings of Common Stock during a 24-month period after the closing of the Stock Purchase to enable the Investors to maintain their percentage interests of Common Stock beneficially owned. The Investors' preemptive rights will not apply to a public offering, including any rights offering, of up to $10 million that commences within six months of the closing of the Stock Purchase. The Company's directors and executive officers have agreed to vote their shares of common stock in favor of the issuance of Common Stock and Nonvoting Common Stock in the conversion and the amendment to the Articles increasing the authorized shares of Common Stock and authorizing the new class of Nonvoting Common Stock, among the other proposals to be considered at the special meeting of the Company's shareholders. Under the Restated Stock Purchase Agreement, the Company agreed to reimburse CapGen for all of its expenses incurred in connection with the transaction, up to $750,000, and agreed to pay fees totaling $714,000 to Investors advised or managed by two current shareholders of the Company, in respect of their new investments. Sandler O'Neill + Partners, L.P., acted as sole placement agent for the Stock Purchase. In connection with the Stock Purchase, the Company has agreed to indemnify the Placement Agent and the Investors against certain liabilities. A copy of the Amended Stock Purchase Agreement is available for free at http://is.gd/H2qouN Registration Rights Also on Dec. 31, 2012, and in connection with the Stock Purchase, the Company entered into an Amended and Restated Registration Rights Agreement with the Investors pursuant to which the Company is obligated to use its commercially reasonable best efforts to file a registration statement covering the resale of the shares of Series A Preferred Stock issued in the Stock Purchase and the shares of Common Stock and Nonvoting Common Stock issuable upon conversion of such Series A Preferred Stock, within 45 days following the closing of the Stock Purchase. The Restated Registration Rights Agreement also provides Investors with demand registration rights and piggyback registration rights under certain circumstances. The Restated Registration Rights Agreement replaced the Registration Rights Agreement dated Aug. 22, 2012, by and between the Company and CapGen. A copy of the Amended Registration Rights Agreement is available for free at: http://is.gd/NRcXHW Exchange of Series B Preferred Stock Simultaneously with the closing of the Stock Purchase, CapGen exchanged its 5,000 outstanding shares of the Company's Noncumulative, Nonvoting, Perpetual Preferred Stock, Series B for an aggregate of 5,000 shares of Series A Preferred Stock. The Exchange was made pursuant to the Amended and Restated Exchange Agreement between the Company and CapGen dated Dec. 31, 2012, which replaced the Exchange Agreement between the Company and CapGen dated Sept. 27, 2012. A copy of the Amended Exchange Agreement is available at: http://is.gd/YfxL8n Subscription Agreements Also on Dec. 31, 2012, the Company accepted subscriptions to purchase a total of 2,265 shares of Series A Preferred Stock, at a purchase price of $1,000 per share, from ten of its executive officers, directors and other related parties, including affiliates of CapGen, which consideration consisted of an aggregate of $465,000 in cash and $1.8 million in the cancellation of outstanding debt under the Company's revolving line of credit held by those Subscribers or their related interests. The Subscriptions were made pursuant to individual subscription agreements with the Company. The Company has agreed to include the shares of Series A Preferred Stock issued to the Subscribers in the resale registration statement filed pursuant to the Restated Registration Rights Agreement. A copy of the Subscription Agreement is available at http://is.gd/gSGwjh Asset Sale On Dec. 28, 2012, The Jacksonville Bank, a wholly-owned subsidiary of the Company, entered into an Asset Purchase Agreement with a real estate investment firm for the purchase by the Asset Purchaser of approximately $25.1 million of certain of the Bank's loans and other assets for approximately $11.7 million. The assets underlying the Asset Sale included other real estate owned (OREO), non-accrual loans and other loans with high potential for further deterioration. The valuation for the consideration paid in the Asset Sale was supported by an analysis of similar sales conducted by the Bank's financial advisor, and by other local area marketing of the same assets. The Asset Sale was completed on Dec. 31, 2012, immediately prior to the closing of the Stock Purchase, and involved the immediate transfer of servicing from the Bank, as permitted by federal law. The Asset Purchase Agreement contained customary representations and warranties and the closing was subject to the satisfaction of customary conditions. On Dec. 31, 2012, the Bank completed the Asset Sale. A copy of the Asset Purchase Agreement is available at: http://is.gd/j2RPm8 On Dec. 31, 2012, the Company, the Bank and Stephen C. Green entered into Amendment No. 1 to the Executive Employment Agreement for Mr. Green. The Green Amendment provides that Mr. Green, upon the occurrence of certain conditions and upon further action of the Compensation Committee, will receive an option award exercisable for shares of Common Stock equal to 2% of the shares of Common Stock and Nonvoting Common Stock to be issued in the conversion of the Series A Preferred Stock. If granted, the option award would vest 40% on the date of grant, 20% on the first anniversary of the date of grant and 40% on the second anniversary of the date of grant, and the exercise price for the option would be the fair market value of the Common Stock on the date of grant. The option award is contingent upon, among other things, the conversion of the Series A Preferred Stock and the receipt of certain shareholder approvals. The option award replaces the award of restricted stock described in Mr. Green's original employment agreement. Under the Green Amendment, if Mr. Green's employment is terminated, Mr. Green will be entitled to receive his base salary for a period of 18 months following his termination date. Upon such early termination of employment, any unvested equity awards held by Mr. Green will be forfeited, except in the event that he terminates his employment because of an uncured breach of the employment agreement by the Company or the Bank or as a result of a change in his position or duties, in which case any unvested equity awards he held as of the termination date will be automatically vested in full. A copy of the Employment Amendment is available for free at: http://is.gd/5qf3yC On Dec. 27, 2012, the Company amended its Articles to amend and restate the Series B Preferred Stock designation previously filed with the Florida Secretary of State on Sept. 27, 2012. The Series B Designation Amendment amended the Series B Designation primarily to (i) reduce the total number of authorized shares of Series B Preferred Stock from 10,000 shares to 5,000 shares, (ii) provide that no dividends will accrue or be payable on the Series B Preferred Stock prior to June 1, 2013, for any purpose, and (iii) reduce the redemption price of the Series B Preferred Stock from 105% to 100% of the liquidation preference. The Series B Designation Amendment became effective upon filing. Also on Dec. 27, 2012, the Company filed with the Florida Secretary of State the Series A Designation as an amendment to the Articles establishing the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations and restrictions applicable to the Series A Preferred Stock. The Company authorized for issuance 50,000 shares of Series A Preferred Stock in the Series A Designation. About Jacksonville Bancorp Jacksonville Bancorp, Inc., a bank holding company, is the parent of The Jacksonville Bank, a Florida state-chartered bank focusing on the Northeast Florida market with approximately $583 million in assets and eight full-service branches in Jacksonville, Duval County, Florida, as well as the Company's virtual branch. The Jacksonville Bank opened for business on May 28, 1999, and provides a variety of community banking services to businesses and individuals in Jacksonville, Florida. According to the Form 10-Q for the period ended June 30, 2012, the Bank was adequately capitalized at June 30, 2012. Depository institutions that are no longer "well capitalized" for bank regulatory purposes must receive a waiver from the FDIC prior to accepting or renewing brokered deposits. The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") generally prohibits a depository institution from making any capital distribution (including paying dividends) or paying any management fee to its holding company, if the depository institution would thereafter be undercapitalized. The Bank had a Memorandum of Understanding ("MoU") with the FDIC and the Florida Office of Financial Regulation that was entered into in 2008, which required the Bank to have a total risk-based capital of at least 10% and a Tier 1 leverage capital ratio of at least 8%. Recently, on July 13, 2012, the 2008 MoU was replaced by a new MoU, which, among other things, requires the Bank to have a total risk-based capital of at least 12% and a Tier 1 leverage capital ratio of at least 8%. "We did not meet the minimum capital requirements of these MOUs at June 30, 2012, and Dec. 31, 2011, when the Bank had total risk-based capital of 8.09% and 9.85% and Tier 1 leverage capital of 5.26% and 6.88%, respectively." Jacksonville's balance sheet at Sept. 30, 2012, showed $551.55 million in total assets, $537.97 million in total liabilities and $13.57 million in total shareholders' equity. JEFFRIE E. LONG: To Sell Real Properties to Pay Off PNC Bank ------------------------------------------------------------ Jeffrie E. Long, Sr. and Sharon L. Long have agreed to sell all or part of their real estate properties by Feb. 15 as part of the Longs' stipulation to provide adequate protection to their lender, PNC Bank, National Association. Proceeds of the sale will be applied to their debt with PNC Bank. PNC Bank provided a commercial loan to the Debtors pre-bankruptcy. As of the Petition Date, the Bank asserts, and the Debtors do not dispute, a balance due on two term notes of $564,185, including principal, interest, fees, attorney's fees and costs on Note One of $344,304 and principal, interest, fees, attorney's fees and costs on Note Two of $219,880. Note One is secured by a first priority lien on the Debtors' real property known as 5981 Stephen Reid Road, Huntington, Maryland; and on real property known as 4719 N. Solomans Island Road, Huntington, Maryland. Note Two is secured by a second priority lien on the Solomans Island Property. The Debtors previously filed three motions to sell the Solomans Island Property, but have withdrawn all three Motions for various reasons. The Debtors also have agreed to make consecutive monthly adequate protection payments to the bank of $1,872.45 beginning Nov. 30, 2012, and due by the 15th day of each month thereafter. Bankruptcy Judge Thomas J. Catliota gave his stamp of approval on the parties' Stipulation and Consent Order (A) Providing Adequate Protection to PNC Bank, National Association and (B) Modifying the Automatic Stay, on dated Jan. 3, 2013. A copy of the Stipulation is available at http://is.gd/5nB5g4from Leagle.com. Jeffrie E. Long, Sr. and Sharon L. Long filed a Chapter 11 petition (Bankr. D. Md. Case No. 11-29719) on Oct. 3, 2011. The Longs are represented by: Alon J. Nager, Esq. CHAIFETZ AND COYLE, P.C. 7164 Columbia Gateway Drive, Suite 205 Columbia, MD 21046 Tel: 443-546-4608 E-mail: anager@chaifetzandcoyle.com Counsel for lender, PNC Bank, is: Marc E. Shach, Esq. WEINSTOCK, FRIEDMAN & FRIEDMAN, P.A. 4 Reservoir Circle Baltimore, MD 21208 Tel: 410-559-90000 E-mail: marc.shach@weinstocklegal.com JERRY FERGUSON: Can't Pay Personal Taxes Under Chapter 12 Plan -------------------------------------------------------------- Judge Thomas L. Perkins denied confirmation of a First Amended Chapter 12 Plan of Reorganization that proposes to pay through the plan the debtors' postpetition personal (non-estate) tax liabilities, saying the provision runs afoul of broad and clear proscription of the Supreme Court's ruling in Hall v. U.S. against paying any postpetition income taxes through a chapter 12 plan. In the first amended plan, Jerry D. Ferguson and Julie R. Ferguson propose to pay large income tax liabilities to the Internal Revenue Service and the Illinois Department of Revenue. When the Fergusons' filed their chapter 12 petition (Bankr. C.D. Ill. Case No. 10-81401) on April 28, 2010, they filed Schedule E stating that they did not have any unpaid prepetition income tax liability. On Aug. 31, 2010, after notice and Court approval, the Fergusons sold much of their farm machinery and equipment at auction, generating gross proceeds of $304,470 and creating a tax liability for capital gains of an unspecified amount. The Fergusons also had ordinary farm income in 2010, as well as nonfarm income from Jerry Ferguson's employment as a railroad conductor and Julie Ferguson's employment as a respiratory therapist. The initial Chapter 12 Plan the Fergusons filed on May 25, 2011, proposed to treat the postpetition capital gains taxes as general unsecured (nonpriority) claims in reliance on 11 U.S.C. Section 1222(a)(2)(A). In proposing that treatment of the tax debt in their initial plan, the Fergusons relied upon Knudsen v. I.R.S., 581 F.3d 696 (8th Cir. 2009), holding that the priority-stripping effect of section 1222(a)(2)(A) is not limited to prepetition sales, but captures capital gains taxes arising from postpetition sales of farm assets as well. According to Judge Perkins, Knudsen was subsequently abrogated by the Supreme Court in Hall v. U.S., 132 S.Ct. 1882, 182 L.Ed.2d 840 (2012)(decided May 14, 2012), holding that the federal income tax liability resulting from a postpetition farm sale is not "incurred by the estate" under section 503(b) and thus is neither collectible nor dischargeable in a chapter 12 plan. The first amended plan, filed Aug. 28, 2012, estimates the Fergusons' 2010 income tax liability to the IRS at $193,635 and to IDOR at $19,553, and proposes to pay these postpetition debts in full within three months after confirmation. The first amended plan also proposes to have the Chapter 12 Trustee pay the tax liability for their 2011 and 2012 income in full within the same three-month period. That liability is unknown. Nothing in the record indicates that the Fergusons have filed their federal or state income tax returns for 2010 or any subsequent year. The Fergusons propose to obtain the funds needed to pay the postpetition tax liabilities from the post-confirmation sale of a 48 acre farm that the Fergusons own. The first amended plan provides that the farm will be sold to Jerry Ferguson's brother for $321,000, with the sale proceeds, net of transaction costs, secured claims and expenses of administration of the estate, used to pay the postpetition income and capital gains taxes to the extent of available funds. Objections to confirmation have been filed by creditors Lee Foster, LaHarpe Elevator and West Central FS, Inc. While the standing Chapter 12 Trustee, Michael D. Clark, has not filed a written objection to the first amended plan, he has asserted a verbal objection and has filed a brief in opposition to confirmation. The objecting creditors and the Trustee contend that the first amended plan's proposal to use estate assets to pay the postpetition tax liability violates the Supreme Court's ruling in Hall. The Fergusons argue that because they are no longer seeking to discharge the postpetition capital gains tax debts in reliance on section 1222(a)(2)(A), Hall is no impediment to confirmation of the first amended plan. According to Judge Perkins, the Fergusons' narrow view of Hall cannot withstand even a cursory reading of the opinion. The Supreme Court held that the federal income tax liability resulting from a postpetition farm sale is not "incurred by the estate" and is neither collectible nor dischargeable in a chapter 12 plan. The Fergusons are not seeking to discharge any portion of their postpetition income and capital gains tax liability in their chapter 12 case since they are proposing full payment of the liability. They are, however, proposing to have that liability paid and collected through their plan out of the proceeds from sale of assets of the estate. This proposal runs afoul of Hall's holding that postpetition tax liabilities incurred by chapter 12 debtors, personally, rather than by the estate, are not collectible (payable) in a chapter 12 plan. Judge Perkins said, while Hall's holding was issued in the context of capital gains tax liability, the Supreme Court's rationale, that a chapter 12 estate is not a taxable entity and cannot incur income tax liability, is broader and covers ordinary income taxes as well as capital gains taxes. A copy of the Court's Jan. 2 Opinion is available at http://is.gd/U1E2Pafrom Leagle.com. LBI MEDIA: Voluntarily Deregisters 11% Discount Notes ----------------------------------------------------- LBI Media Holdings, Inc., filed a Form 15 with the U.S. Securities and Exchange Commission to voluntarily terminate registration of its 11% senior discount notes due 2013 and suspend its reporting obligations with the SEC. The 11% Senior Discount Notes due 2013 were held of record by approximately 14 persons as of Jan. 1, 2012, and approximately 13 persons as of Jan. 1, 2013. About LBI Media Headquartered in Burbank, CA, LBI Media, Inc., operates Spanish- language broadcasting properties including 21 radio stations (15 FM and 6 AM generating 47% of 2011 revenue) and 9 television stations plus the EstrellaTV Network (53% of 2011 revenue). EstrellaTV is a Spanish-language television broadcast network that was launched in the fall of 2009. Through EstrellaTV, the company is affiliated with television stations in 39 DMAs comprising 78% of U.S. Hispanic television households. Jose Liberman founded the company in 1987, together with his son, Lenard Liberman. Shareholders include Jose Liberman (20%), Lenard Liberman (41%), Oaktree Capital (26%) and Tinicum Capital (13%). The dual class equity structure provides the Liberman's with 94% of voting control between Jose Liberman (31%) and Lenard Liberman (63%). Revenues for FY2011 totaled $117.5 million. LBI Media's balance sheet at Sept. 30, 2012, showed $311.61 million in total assets, $561.02 million in total liabilities and a $249.40 million total stockholders' deficiency. "The condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern," the Company said in its quarterly report for the period ended Sept. 30, 2012. "However, as a result of uncertainties related to future sources and sufficiency of liquidity required by the Company to satisfy its outstanding debt and debt service obligations... there is substantial doubt about the Company's ability to continue as a going concern." * * * As reported by the TCR on Dec. 13, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Burbank, Calif.- based LBI Media Inc. (LBI) to 'CC' from 'D'. "We raised the corporate credit rating to 'CC' from 'D' based on LBI Media Holdings' disclosure that it made the interest payment (about $3.8 million) on its 11% senior discount notes and had cured the default," said Standard & Poor's credit analyst Minesh Patel. In the April 5, 2012, edition of the TCR, Moody's Investors Service downgraded LBI Media, Inc.'s Corporate Family Rating (CFR) and Probability-of-Default Rating (PDR) each to Caa2 from Caa1 and downgraded debt instruments accordingly. The downgrades follow the company's earnings release for the 4th quarter of 2011 and reflect weakened liquidity, revenue and EBITDA declines for radio stations compounded by EBITDA declines for television operations, and Moody's view that LBI's capital structure is unsustainable. The rating outlook was changed to Negative from Stable. LBI MEDIA: Settles Exchange Offers and Consent Solicitations ------------------------------------------------------------ LBI Media Holdings, Inc., Liberman Broadcasting, Inc., the direct parent of Holdings, and LBI Media, Inc., a wholly-owned direct subsidiary of Holdings, settled (i) their previously announced private exchange offers and consent solicitations to exchange: (a) up to 100% of Media's outstanding 8 1/2% Senior Subordinated Notes due 2017 in exchange for Media's new 11 1/2% / 13 1/2% PIK toggle second priority secured subordinated notes due 2020 and warrants to purchase shares of Parent's Class A common stock, par value $0.001; and (b) up to 100% of Holdings' outstanding 11% senior discount notes due 2013 in exchange for either (i) Second Priority Secured Subordinated Notes, or (ii) Holdings' new 11% senior notes due 2017, and (ii) Media's previously announced concurrent solicitation of consents from holders of its 9 1/4% Senior Secured Notes due 2019 to certain amendments to the indenture governing the First Priority Senior Secured Notes. As previously announced, (i) approximately $174.6 million, or 76.3%, of the outstanding principal amount of Old Senior Subordinated Notes were validly tendered and not withdrawn in exchange for Second Priority Secured Subordinated Notes and Warrants and (ii) approximately $30.9 million, or 73.8%, of the outstanding principal amount of Discount Notes not held by Holdings were validly tendered and not withdrawn, of which approximately $10.2 million were validly tendered in exchange for Second Priority Secured Subordinated Notes and approximately $20.7 million were validly tendered in exchange for Holdings Notes. Based on the principal amount of Old Notes validly tendered, not withdrawn and accepted, approximately $115.2 million aggregate principal amount of Second Priority Secured Subordinated Notes, $21.1 million aggregate principal amount of Holdings Notes and 106.1559 Warrants will be issued in exchange for those Old Notes, as applicable. In connection with the settlement of the Exchange Offers, Holdings or Media, as applicable, entered into the following agreements or amendments to previously executed agreements: (a) Second Priority Secured Subordinated Notes Indenture and Second Priority Secured Subordinated Notes On Dec. 31, 2012, Media issued approximately $115.2 million aggregate principal amount of the Second Priority Secured Subordinated Notes, which mature on April 15, 2020, pursuant to an indenture, dated as of Dec. 31, 2012, among Media, the guarantors party thereto, and U.S. Bank National Association, as trustee. (b) Holdings Notes Indenture and Holdings Notes On Dec. 31, 2012, Holdings issued approximately $21.1 million aggregate principal amount of 11% Senior Notes due 2017, which mature on April 30, 2017, pursuant to an indenture, dated as of Dec. 31, 2012, between Holdings and the Trustee. The Holdings Notes are Holdings' general unsecured senior obligations and rank equally in right of payment with the Discount Notes and all of Holdings' future unsecured senior indebtedness. (c) Old Senior Subordinated Notes Supplemental Indenture On Dec. 31, 2012, Media amended the Indenture, dated as of July 23, 2007, among Media, the guarantors party thereto and the Trustee, relating to the Old Senior Subordinated Notes pursuant to a supplemental indenture dated as of Dec. 31, 2012, among Media, the guarantors party thereto and the Trustee. The Old Senior Subordinated Notes Supplemental Indenture revised the Old Senior Subordinated Notes Indenture by modifying the anti-layering covenant to permit the issuance of the Second Priority Secured Subordinated Notes and up to $5 million principal amount of indebtedness that may be issued in the future in exchange for either Old Senior Subordinated Notes or Discount Notes. (d) Discount Notes Supplemental Indenture On Dec. 31, 2012, Holdings amended the Indenture, dated as of Oct. 10, 2003, between Holdings and the Trustee, relating to the Discount Notes pursuant to a supplemental indenture dated as of Dec. 31, 2012, between Holdings and the Trustee. The Discount Notes Supplemental Indenture, among other things, revised the Discount Notes Indenture by eliminating substantially all of the restrictive covenants and certain events of default, modifying covenants regarding mergers and consolidations and modifying or eliminating certain other provisions, including certain provisions relating to defeasance. (e) First Priority Senior Secured Notes Supplemental Indenture On Dec. 31, 2012, Media amended the Indenture, dated as of March 18, 2011, among Media, the guarantors party thereto and the Trustee, relating to the First Priority Senior Secured Notes pursuant to a supplemental indenture dated as of Dec. 31, 2012, among Media, the guarantors party thereto and the Trustee. The First Priority Senior Secured Notes Supplemental Indenture, among other things, revised the First Priority Senior Secured Notes Indenture and the First Priority Senior Secured Notes to increase the interest rate payable on the First Priority Senior Secured Notes from 9 1/4% to 10% per annum, modify the covenants to permit the Exchange Offers and related transactions, modify debt, lien, investment and restricted payment negative covenants, add a requirement to pay additional interest of 3% per annum upon and during the continuance of an event of default and add certain real property collateral as security for the First Priority Senior Secured Notes. The First Priority Senior Secured Notes Supplemental Indenture also limits Media's ability to repay the Discount Notes to no more than 10% of the outstanding principal amount of the Discount Notes outstanding immediately prior to the closing of the Exchange Offers (excluding Discount Notes held by Holdings or its affiliates or any directors, officers, stockholders and other affiliates of Media or Holdings) and any related interest, premium, fees, costs, expenses and other amounts owing thereunder with respect thereto, or a maximum amount of approximately $4.2 million. All of these covenants are subject to a number of important limitations and exceptions. (f) Amendment to Credit Agreement The proposed amendments to Media's Amended and Restated Credit Agreement, dated as of March 18, 2011, by and among Media, the guarantors party thereto, the lenders party thereto, Credit Suisse Securities (USA) LLC, as lead arranger, Credit Suisse AG, Cayman Islands Branch, as collateral trustee, and Credit Suisse AG, Cayman Islands Branch, as administrative agent that were previously disclosed in Holdings' Current Report on Form 8-K filed on Dec. 21, 2012, became effective on Dec. 31, 2012, in connection with the consummation of the Exchange Offers. Compensatory Arrangements of Certain Officers On Dec. 31, 2012, Media: (a) in connection with Jose Liberman's employment arrangements with the Companies, forgave the following loans (including all accrued and unpaid interest thereon) previously made by Media to Jose Liberman, the Chairman of the board of directors of each of the Companies: (i) a loan in the initial principal amount of $146,950 made on or around Dec. 20, 2001, and (ii) a loan in the initial principal amount of $75,000 made on or around July 29, 2002, (the loans described in the preceding clauses (i) and (ii), together with all accrued and unpaid interest thereon, are referred to herein as the "Jose Liberman Loans"). In connection with the forgiveness of the Jose Liberman Loans, any and all outstanding related notes and other documentation were cancelled. In connection with his continuing employment arrangements and the successful completion of the Exchange Offers, Jose Liberman was also granted a bonus of up to $225,000. (b) in connection with Lenard Liberman's employment arrangements with the Companies, forgave the following loans previously made by Media to Lenard Liberman, the Chief Executive Officer, President, Secretary and a director of each of the Companies: (i) a loan in the initial principal amount of $243,095 made on or around Dec. 20, 2001, (ii) a loan in the initial principal amount of $32,000 made on or around June 14, 2002, and (iii) a loan in the initial principal amount of $1,916,563 made on or around July 9, 2002, (the loans described in the preceding clauses (i), (ii) and (iii), together with all accrued and unpaid interest thereon. In connection with the forgiveness of the Lenard Liberman Loans, any and all outstanding related notes and other documentation were cancelled. In connection with his continuing employment arrangements and the successful completion of the Exchange Offers, Lenard Liberman was also granted a bonus of up to $2.2 million. (c) in connection with Winter Horton's employment arrangements with the Companies, forgave the following loans (including all accrued and unpaid interest thereon) previously made by Media to Winter Horton, the Chief Operating Officer and a director of each of the Companies: (i) a loan in the initial principal amount of $30,000 made on or around Nov. 20, 1998, (ii) a loan in the initial principal amount of $36,000 made on or around November 22, 2002, (iii) a loan in the initial principal amount of $349,000 made on or around Nov. 29, 2002 and (iv) a loan in the initial principal amount of $275,000 made on or around April 8, 2006, (the loans described in the preceding clauses (i), (ii), (iii) and (iv), together with all accrued and unpaid interest thereon, are referred to herein as the "Winter Horton Loans"). In connection with the forgiveness of the Winter Horton Loans, any and all outstanding related notes and other documentation were cancelled. In connection with the Exchange Offers, Parent will issue Warrants to purchase up to 106.1559 shares of its Class A Common Stock, $0.001 par value per share, in exchange for Old Senior Subordinated Notes that were validly tendered and accepted in the Exchange Offers. The shares of Class A Common Stock issuable upon exercise of the Warrants will represent approximately 26.7% of the outstanding shares of Class A Common Stock and Class B Common Stock, par value $0.001 per share, of Parent, outstanding immediately after closing of the Exchange Offers and after giving effect to the exercise of the Warrants. A full-text copy of the Form 8-K is available for free at: http://is.gd/7SUABJ About LBI Media Headquartered in Burbank, CA, LBI Media, Inc., operates Spanish- language broadcasting properties including 21 radio stations (15 FM and 6 AM generating 47% of 2011 revenue) and 9 television stations plus the EstrellaTV Network (53% of 2011 revenue). EstrellaTV is a Spanish-language television broadcast network that was launched in the fall of 2009. Through EstrellaTV, the company is affiliated with television stations in 39 DMAs comprising 78% of U.S. Hispanic television households. Jose Liberman founded the company in 1987, together with his son, Lenard Liberman. Shareholders include Jose Liberman (20%), Lenard Liberman (41%), Oaktree Capital (26%) and Tinicum Capital (13%). The dual class equity structure provides the Liberman's with 94% of voting control between Jose Liberman (31%) and Lenard Liberman (63%). Revenues for FY2011 totaled $117.5 million. LBI Media's balance sheet at Sept. 30, 2012, showed $311.61 million in total assets, $561.02 million in total liabilities and a $249.40 million total stockholders' deficiency. "The condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern," the Company said in its quarterly report for the period ended Sept. 30, 2012. "However, as a result of uncertainties related to future sources and sufficiency of liquidity required by the Company to satisfy its outstanding debt and debt service obligations... there is substantial doubt about the Company's ability to continue as a going concern." * * * As reported by the TCR on Dec. 13, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Burbank, Calif.- based LBI Media Inc. (LBI) to 'CC' from 'D'. "We raised the corporate credit rating to 'CC' from 'D' based on LBI Media Holdings' disclosure that it made the interest payment (about $3.8 million) on its 11% senior discount notes and had cured the default," said Standard & Poor's credit analyst Minesh Patel. In the April 5, 2012, edition of the TCR, Moody's Investors Service downgraded LBI Media, Inc.'s Corporate Family Rating (CFR) and Probability-of-Default Rating (PDR) each to Caa2 from Caa1 and downgraded debt instruments accordingly. The downgrades follow the company's earnings release for the 4th quarter of 2011 and reflect weakened liquidity, revenue and EBITDA declines for radio stations compounded by EBITDA declines for television operations, and Moody's view that LBI's capital structure is unsustainable. The rating outlook was changed to Negative from Stable. LDK SOLAR: Agrees to Sell LDK Anhui for RMB25 Million ----------------------------------------------------- LDK Solar Co., Ltd., has signed a purchase agreement with Shanghai Qianjiang Group in which Qianjiang Group has agreed to purchase all shares of LDK Anhui, located in Hefei City, for approximately RMB 25 million. According to the terms of the agreement, Qianjiang Group will release the guarantee LDK Solar provided to LDK Anhui and its subsidiaries within 12 months, as well as compensate LDK Solar for any loss associated with that guarantee, prior to its release. As of Sept. 30, 2012, LDK Anhui carried consolidated negative net assets of approximately US$54 million and as of Sept. 30, 2012, total bank borrowings of LDK Anhui and its subsidiaries totaled approximately US$485 million, with a consolidated asset-to- liability ratio of 107%. LDK Solar anticipates that the divestiture of LDK Anhui will increase LDK Solar's pro forma consolidated net assets by US$58 million as well as decrease LDK Solar's pro forma consolidated asset-to-liability ratio by approximately 1.8%. "We are pleased to reach this purchase agreement with Shanghai Qianjiang Group for LDK Anhui," stated Xingxue Tong, president and CEO of LDK Solar. "This agreement marks continued progress on our plan to improve LDK Solar's liquidity and working capital." About LDK Solar LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province, People's Republic of China, is a vertically integrated manufacturer of photovoltaic products, including high-quality and low-cost polysilicon, solar wafers, cells, modules, systems, power projects and solutions. LDK Solar was incorporated in the Cayman Islands on May 1, 2006, by LDK New Energy, a British Virgin Islands company wholly owned by Xiaofeng Peng, LDK's founder, chairman and chief executive officer, to acquire all of the equity interests in Jiangxi LDK Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin Industrial Limited. KPMG in Hong Kong, China, said in a May 15, 2012, audit report, there is substantial doubt on the ability of LDK Solar Co., Ltd., to continue as a going concern. According to KPMG, LDK Solar has a net working capital deficit and is restricted to incur additional debt as it has not met a financial covenant ratio under a long-term debt agreement as of Dec. 31, 2011. These conditions raise substantial doubt about the Group's ability to continue as a going concern. LDK Solar's balance sheet at Sept. 30, 2012, showed US$5.76 billion in total assets, US$5.41 billion in total liabilities, US$299.02 million in redeemable non-controlling interests and US$45.91 million in total equity. LEE BRICK: Has Final OK to Use Cash Through Plan Confirmation ------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of North Carolina granted Lee Brick & Tile Company final authority to use cash collateral of Capital Bank, N.A., through and including the confirmation of the Debtor's Plan of Reorganization on the same terms and conditions set forth in the Interim Order dated Aug. 23, 2012. U.S. Bankruptcy Judge Randy D. Doub has already approved the disclosure statement for the Chapter 11 plan of Lee Brick. The confirmation hearing is scheduled for Jan. 16, 2013, at 9:30 A.M. About Lee Brick Sanford, North Carolina-based Lee Brick & Tile Company filed a bare-bones Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-04463) on June 15, 2012, in Wilson on June 15, 2012. Lee Brick -- http://www.leebrick.com/-- began its operations in 1951 after Hugh Perry and 10 local businessmen from Lee County decided three years prior to invest in the business of brickmaking. In the late 1950's Hugh Perry bought out the investing partners, making Lee Brick a solely owned and operated family company. Hugh Perry named his son Frank president in 1970, which he served until 1999 and currently serves as CEO. Since 1999 Don Perry succeeded his father and serves as the company's president. Frank Perry, along with his sons Don and Gil, and brother-in-law JR (rad) Holton have helped guide the family business through revolutionary changes in brick manufacturing that few people in the ceramic industry could have ever anticipated. Judge Randy D. Doub presides over the case. Kevin L. Sink, Esq., at Nicholls & Crampton, P.A., serves as the Debtor's counsel. The petition was signed by Don W. Perry, president. The Debtor, in its amended schedules, disclosed $27,851,968 in assets and $14,136,003 in liabilities as of the Chapter 11 filing. In the original schedules, the Debtor scheduled $27,851,968 in assets and $14,135,140 in liabilities. Lender Capital Bank is owed $13.0 million, of which $6.5 million is secured. LIGHTSQUARED INC: Lenders Targeting Falcone, Not Company Officers ----------------------------------------------------------------- Joseph Checkler at Daily Bankruptcy Review reports that a group of LightSquared Inc.'s lenders reiterated its desire to go after Phil Falcone and Harbinger Capital Partners for a prebankruptcy loan made to the wireless satellite company, making it clear that the troubled venture's officers and directors won't be a target of the lawsuit. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, as the Company seeks to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties, LITHIUM TECHNOLOGY: Axes Chia as Director, Names Nujit as Chair --------------------------------------------------------------- Lithium Technology Corporation received a written consent of majority shareholders Arch Hill Capital N.V. and its affiliates removing Mr. William Chia as director of the Company. On Jan. 3, 2013, AHC re-iterated its written consent and instruction to the Company. Effective Jan. 3, 2012, Hugorinus C. Nujit was appointed chairman of the Board of Directors of the Company. On April 1, 2011, Mr. Nujit was appointed as the Managing Director of Arch Hill Capital N.V. He graduated from Leyden University (NL) in business law. After his military services with the Dutch Navy as navigation officer of a flotilla mine sweepers he worked for various Dutch and US companies as legal counsel and director including Wijsmuller Towage and Salvage, MAB Real Estate Development and Building, Digital Equipment Corporation, Intergraph Corporation and as Legal Counsel Europe and Director of 30 European legal entities at ArvinMeritor Corp. About Lithium Technology Plymouth Meeting, Pa.-based Lithium Technology Corporation is a mid-volume production stage company that develops large format lithium-ion rechargeable batteries to be used as a new power source for emerging applications in the automotive, stationary power, and national security markets. The Company was not able to file its annual report for the period ended Dec. 31, 2011, and its quarterly reports for the succeeding periods. For the nine months ended Sept. 30, 2011, the Company reported a net loss of $12.26 million on $6.06 million of total revenue. The Company reported a net loss of $7.25 million on $6.35 million of products and services sales for the year ended Dec. 31, 2010, compared with a net loss of $10.51 million on $7.37 million of product and services sales during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $8.83 million in total assets, $35.09 million in total liabilities and a $26.26 million total stockholders' deficit. Going Concern As reported by the TCR on April 8, 2011, Amper, Politziner & Mattia, LLP, Edison, New Jersey, after auditing the Company's financial statements for the year ended Dec. 31, 2010, noted that the Company has recurring losses from operations since inception and has a working capital deficiency that raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning The Form 10-Q for the quarter ended Sept. 30, 2011, noted that the Company's operating plan seeks to minimize its capital requirements, but the expansion of its production capacity to meet increasing sales and refinement of its manufacturing process and equipment will require additional capital. The Company raised capital through the sale of securities closing in the second quarter of 2011 and realized proceeds from the licensing of its technology pursuant to the terms of a licensing agreement and the sale of inventory used in manufacturing its batteries as part of the establishment of a joint venture in the fourth quarter of 2011, but is continuing to seek other financing initiatives and needs to raise additional capital to meet its working capital needs, for the repayment of debt and for capital expenditures. Such capital is expected to come from the sale of securities. The Company believes that if it raises approximately $4 million in additional debt and equity financings it would have sufficient funds to meet its needs for working capital, capital expenditures and expansion plans through the year ending Dec. 31, 2012. No assurance can be given that the Company will be successful in completing any financings at the minimum level necessary to fund its capital equipment, debt repayment or working capital requirements, or at all. If the Company is unsuccessful in completing these financings, it will not be able to meet its working capital, debt repayment or capital equipment needs or execute its business plan. In that case the Company will assess all available alternatives including a sale of its assets or merger, the suspension of operations and possibly liquidation, auction, bankruptcy, or other measures. These conditions raise substantial doubt about the Company's ability to continue as a going concern. LODGENET INTERACTIVE: Soliciting Approval of Pre-Packaged Plan -------------------------------------------------------------- LodgeNet Interactive Corporation entered into an Investment Agreement with Colony Capital, LLC, and its affiliate, Col-L Acquisition, LLC, and certain other investors, pursuant to which Colony and those other investors will invest $60 million of new capital in the Company, with an option to invest up to an additional $30 million, to support a proposed recapitalization of the Company. Pursuant to the terms of the Investment Agreement, the Company and all of its domestic subsidiaries will, among other things, (a) commence a solicitation for acceptance of a pre-packaged plan of reorganization based on the recapitalization transaction contemplated by the Investment Agreement, (b) file voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code, and (c) seek approval of the Plan by the bankruptcy court. Because the Chapter 11 cases have not yet been commenced, this Disclosure Statement has not been approved by the Bankruptcy Court as containing adequate information within the meaning of section 1125(a) of the Bankruptcy Code. Following the commencement of the chapter 11 cases, the Debtors expect to promptly seek an order of the Bankruptcy Court (1) approving this Disclosure Statement as containing adequate information, (2) approving the solicitation of votes as being in compliance with sections 1125 and 1126(b) of the Bankruptcy Code, and (iii) confirming the proposed Plan. On Jan. 4, 2013, the Company commenced a solicitation for acceptance of the Plan. A copy of the disclosure statement regarding the Plan is available at http://is.gd/leXDme The Plan provides that holders of prepetition trade and other general unsecured claims will receive payment in full in cash. About LodgeNet Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq: LNET) -- http://www.lodgenet.com/-- provides interactive media and connectivity services to hospitality and healthcare businesses and the consumers they serve. Recently named by Advertising Age as one of the Leading 100 US Media Companies, LodgeNet Interactive serves roughly 1.5 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television, Broadband and Advertising Media Solutions along with nationwide technical and professional support services. LodgeNet Interactive owns and operates businesses under the industry leading brands: LodgeNet, The Hotel Networks and LodgeNet Healthcare. The Company reported a net loss of $631,000 in 2011, a net loss of $11.68 million in 2010, and a net loss of $10.15 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $291.74 million in total assets, $448.72 million in total liabilities and a $156.98 million total stockholders' deficiency. LODGENET INTERACTIVE: PAR Investment Lowers Equity Stake to 8.4% ---------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, PAR Investment Partners, L.P., PAR Group, L.P., and PAR Capital Management, Inc., disclosed that, as of Jan. 2, 2013, they beneficially own 2,248,677 shares of common stock of LodgeNet Corporation representing 8.4% of the shares outstanding. PAR Investment Partners previously reported beneficial ownership of 5,098,677 common shares or 18.65% equity stake as of Nov. 18, 2010. A copy of the amended filing is available for free at: http://is.gd/MewobC About LodgeNet Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq: LNET) -- http://www.lodgenet.com/-- provides interactive media and connectivity services to hospitality and healthcare businesses and the consumers they serve. Recently named by Advertising Age as one of the Leading 100 US Media Companies, LodgeNet Interactive serves roughly 1.5 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television, Broadband and Advertising Media Solutions along with nationwide technical and professional support services. LodgeNet Interactive owns and operates businesses under the industry leading brands: LodgeNet, The Hotel Networks and LodgeNet Healthcare. The Company reported a net loss of $631,000 in 2011, a net loss of $11.68 million in 2010, and a net loss of $10.15 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $291.74 million in total assets, $448.72 million in total liabilities and a $156.98 million total stockholders' deficiency. LODGENET INTERACTIVE: Receives NASDAQ Delisting Notice ------------------------------------------------------ LodgeNet Interactive Corporation disclosed that on January 3, 2013 the Company received a Staff Determination Letter from the Listing Qualifications Department of The NASDAQ Stock Market, notifying the Company that the Company's securities will be subject to delisting from The NASDAQ Stock Market. Trading of the Company's common stock will be suspended at the opening of business on January 14, 2013, and a Form 25-NSE will be filed with the U.S. Securities and Exchange Commission to remove the Company's common stock from listing and registration on The NASDAQ Stock Market. The Company does not intend to request an appeal of the decision to delist its common stock. On December 31, 2012, the Company disclosed that it has entered into a $60 million investment agreement with Colony Capital, LLC and its affiliate, and certain other investors, to effect a recapitalization of the Company that will be implemented through an expedited Chapter 11 bankruptcy process. Pursuant to the Planned Bankruptcy Filing, as previously disclosed, holders of the Company's outstanding shares of common stock and Series B Preferred Stock will have their shares cancelled without receiving any distribution. The Staff's determination to delist the Company's securities from The NASDAQ Stock Market, in accordance with the Staff's authority under Listing Rules 5101 and IM-5101-1, was based on the Planned Bankruptcy Filing and associated public interest concerns raised by it. The Staff's letter also cited concerns regarding the residual equity interest of the existing listed securities holders, as well as concerns about the Company's ability to sustain compliance with all requirements for continued listing on The NASDAQ Stock Market, as reasons for the delisting determination. As previously disclosed, on August 31, 2012, the Staff notified the Company that the bid price of its common stock had closed below $1 per share for 30 consecutive trading days, and accordingly, that the Company did not comply with Listing Rule 5450(a)(1). Also, as previously disclosed, on September 21, 2012, the Staff notified the Company that for 30 consecutive days prior thereto it no longer met the market value of publicly held shares requirement of $15 million as required by Listing Rule 5450(b)(3)(C). The Company has not regained compliance with either rule. About LodgeNet Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq: LNET) -- http://www.lodgenet.com/-- provides interactive media and connectivity services to hospitality and healthcare businesses and the consumers they serve. Recently named by Advertising Age as one of the Leading 100 US Media Companies, LodgeNet Interactive serves roughly 1.5 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television, Broadband and Advertising Media Solutions along with nationwide technical and professional support services. LodgeNet Interactive owns and operates businesses under the industry leading brands: LodgeNet, The Hotel Networks and LodgeNet Healthcare. The Company reported a net loss of $631,000 in 2011, a net loss of $11.68 million in 2010, and a net loss of $10.15 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $291.74 million in total assets, $448.72 million in total liabilities and a $156.98 million total stockholders' deficiency. LON MORRIS: AmeriBid to Get 7% Commission in Asset Sale ------------------------------------------------------- AmeriBid LLC, which is being hired by Lon Morris College to conduct an auction of the Debtor's assets, will charge a 7% commission and 2% buyer's premium to be paid from the proceeds of the sale. In addition, the Debtor and the firm will each pay 50% of advertising and marketing expenses actually incurred in connection with the auction, up to $35,000 each, for a total of $70,000, with the firm receiving reimbursement for half of its related half- share out of first sale proceeds. The firm has not entered into any agreement to share compensation as may be awarded to it for services rendered in this case. AmeridBid replaced Tranzon as auctioneer. The Debtor said in court filings AmeriBid is expected to sell real property in Jacksonville, Texas, and certain tangible personal property associated with the real property. The Debtor originally proposed to hold the auction Dec. 13, 2012. The auction was moved to Jan. 14, 2013. The sale would be approved in the context of a plan confirmation after the auction. The Debtor has proposed a plan that encompasses an auction of the secured and unencumbered property. The Debtor has said the auction -- as a cash-only, noncredit bid auction -- should create a mechanism by which the free market values the assets and gives the greatest recovery to the unsecured creditors. Stephen Karbelk, Co-Chairman of AmeriBid, is primarily responsible for services rendered to the Debtor. Mr. Karbelk has assured the Court his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Lon Morris College Lon Morris College was founded in 1854 as a not-for-profit religiously affiliated two-year degree granting institution. Over the past 158 years, the College has impacted the lives of countless members of the local Jacksonville community in Texas. Lon Morris College filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 12-60557) in Tyler, on July 2, 2012, after lacking enough endowments to pay teachers, vendors and creditors. In May 2012, the Debtor missed two payrolls and vendor payables, utilities, and long term debt were also past due. From a headcount of 1,070 in 2010, enrolments have been down to 547 in 2012. The president of the College has resigned, as have members of the board of trustees. Judge Bill Parker oversees the case. Bridgepoint Consulting LLC's Dawn Ragan took over management of the College as chief restructuring officer. Attorneys at Webb and Associates, and McKool Smith P.C., serve as counsel to the Debtor. Capstone Partners serves as financial advisor. According to its books, on April 30, 2012, the College had roughly $35 million in assets, including $11 million in endowments and restricted funds, and $18 million in funded debt and $2 million in trade and other liabilities. The Debtor disclosed $29,957,488 in assets and $15,999,058 in liabilities as of the Chapter 11 filing. Amegy Bank is represented in the case by James Matthew Vaughn, Esq., at Porter Hedges LLP. The college has a Chapter 11 plan on file to be funded by a sale of the properties. The Bankruptcy Court has approved the Third Amended Disclosure Statement describing the Plan. The Court fixed Jan. 18, 2013, at 4:00 p.m., at the Voting Deadline. Written objections to confirmation of the proposed Chapter 11 Plan must be filed by Jan. 18, 2013. The confirmation hearing will be held Feb. 4, 2013, at 1:30 p.m. A copy of the Third Amended Disclosure Statement is available at: http://bankrupt.com/misc/lonmorris.doc230.pdf LOUISIANA RIVERBOAT: Kasowitz Benson OK'd for Global Gaming Suit ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Louisiana authorized Louisiana Riverboat Gaming Partnership, et al., to employ the Law Firm of Kasowitz, Benson, Torres & Friedman LLP as special litigation counsel. Kasowitz is expected to represent the Debtors in connection with the evaluation and, if necessary, the prosecution of litigation against Global Gaming on behalf of the Debtors' estates, nunc pro tunc to Dec. 20, 2012. These professionals are expected to have primary responsibility for providing services to the Debtors with current applicable rates as: Marc E. Kasowitz $1,195 Andrew K. Glenn $910 Jed Bergman $795 Nii-Amar Amamoo $430 The hourly rates of Kasowitz's personnel are: (i) $500 to $1,195 for attorneys, (ii) $150 to $315 for project assistants and paralegals. Kasowitz's partners and associates do not hold or represent any interest adverse to the Debtors or their estates with respect to the matters for which Kasowitz is to be employed. About Legends Gaming Legends Gaming LLC, owns gaming facilities located in Bossier City, Louisiana, and Vicksburg, Mississippi, operating under the DiamondJack's trade name. Legends Gaming LLC, and five related entities, including Louisiana Riverboat Gaming Partnership, filed Chapter 11 petitions (Bankr. W.D. La. Case No. 12-12013) in Shreveport, Indiana, on July 31, 2012, to sell the business for $125 million to Global Gaming Solutions LLC, absent higher and better offers. Legends Gaming acquired the business from Isle of Capri Casinos Inc., in 2006 for $240 million. After breaching covenant with lenders, the Debtors in March 2008 sought Chapter 11 protection, jointly administered under Louisiana Gaming Partnership (Case No. 08-10824). The Debtors emerged from bankruptcy in September 2009 and retained ownership and operation of two "DiamondJacks" hotels and casinos in Bossier City and Vicksburg. The Plan restructured $162.1 million owed to the first lien lenders and $75 million owed to secured lien lenders, which would be paid in full, with interest, over time. The Debtors' properties comprise 60,000 square feet of gaming space with 1,913 slot machines, 48 table games and 693 hotel rooms. Revenues in fiscal 2011 were $99.8 million in Louisiana and $39.7 million in Mississippi. As of July 31, 2012, first lien lenders are owed $181.2 million and second lien lenders are owed $114.7 million. Louisiana Riverboat Gaming Partnership disclosed $104,846,159 in assets and $298,298,911 in liabilities as of the Chapter 11 filing. Attorneys at Heller, Draper, Hayden Patrick & Horn serve as counsel to the Debtors. Sea Port Group Securities, LLC is the financial advisor. Kurtzman Carson Consultants LLC as is the claims and notice agent. The Debtors have tapped Jenner & Block LLP as special counsel. The primary purposes of the Plan are: (i) to provide for the sale of substantially all of the Debtors' assets to Global Gaming Legends, LLC, a Delaware limited liability company, Global Gaming Vicksburg, LLC, a Delaware limited liability company and Global Gaming Bossier City, LLC, a Delaware limited liability company, pursuant to a certain Purchase Agreement dated as of July 25, 2012; and (ii) to provide for payments and distributions to creditors. MADISON HOTEL: Lender Files Further Modifications to Plan Outline ----------------------------------------------------------------- Senior secured creditor 62 Madison Lender, LLC, has filed a Second Modified Third Amended Disclosure Statement explaining its Second Modified Third Amended Plan of Reorganization in the Chapter 11 case of Madison Hotel, LLC. As of the Petition Date, the amount of the Class 1 Secured Claim of 62 Madison Lender, LLC, was $22,134,392.61, and as of Aug. 23, 2012, was $23,549,732.45. For purposes of the Plan, the Class 1 Secured Claim is an Allowed Secured Claim in the amount of $23,549,732.45. The Plan contemplates the sale of the Debtor's Hotel Property with the net proceeds realized upon the consummation of any such sale being distributed in accordance with the terms of the Plan. The Hotel Broker, working in conjunction and in cooperation with the Liquidating Trustee, will implement the Hotel Property Sale Procedures in connection with the solicitation of bids for the Hotel Property and the conduct of any competitive bid auction in connection therewith. As proposed, a competitive bid auction will be held on the 46th day after the Effective Date and, at the election of the Liquidating Trustee, the Sale hearing will be held 10 days after the Auction. On the Effective Date, the Liquidating Trustee will enter into a Purchase and Sale Agreement with the holder of the Allowed Class 1 Secured Claim (62 Madison Lender, LLC) under which the holder of the Allowed Class 1 Secured Claim agrees to serve as a "stalking horse" buyer of the Hotel Property for an aggregate purchase of $23,000,000, subject to higher and/or better offers, in accordance with the Hotel Property Sale Procedures. Holders of administrative claims, priority tax claims, and priority claims in the Debtor's estate will be paid on or about the Effective Date from available Hotel cash on hand; provided that, in the case of priority tax claims and other priority claims, at the election of the Plan Proponent the claims may be paid on a deferred basis in accordance with applicable provisions of the Bankruptcy Code. Holders of unsecured claims in Class 3 (approximately $4,500,000 based on Plan Proponent's estimate) will receive (a) their pro rata share of net distributable Hotel Property sale proceeds after the payment in full of the allowed Class 1 secured claim, any residual allowed priority tax claims, and any residual allowed priority claims, plus (b) their pro rata share of net distributable proceeds realized by the Liquidating Trustee from the prosecution and/or settlement of any causes of action and/or avoidance actions. The holder of the Allowed Class 1 Secured Claim will receive, until the full Allowed Amount of its Class 1 Secured Claim is paid in full, all of the net distributable Hotel Property Sale Proceeds and, to the extent necessary and available, Hotel Cash on Hand, after deduction of any amounts necessary to pay in full any remaining Allowed Priority Tax Claims, Allowed Priority Claims and any amounts due the Receiver. The Liquidation Trust will pay to the holder of the Allowed Class 1 Secured Claim from Hotel Cash on Hand the sum of $164,322.96 in respect of post-confirmation accrued and accruing interest on Allowed Amount of the Class 1 Secured Claim. All Class 4 equity interests will be canceled upon the occurrence of the Effective Date. Each holder of a Class 4 equity interest will receive in full, complete and final satisfaction of each such allowed Class 4 equity interest its pro rata share of remaining net distributable proceeds, if any, realized by the Liquidation Trust after the payment in full of all administrative claims, priority tax claims, the Class 1 secured claim, Class 2 priority claims, and Class 3 general unsecured claims. A copy of 62 Madison Lenders' Second Modified Third Amended Disclosure Statement is available at: http://bankrupt.com/misc/madisonhotel.doc141.pdf Express Service Competing Plan Express Service Capital, Inc., the largest unsecured creditor of Madisol, LLC, has filed a disclosure statement explaining its own Plan of Liquidation for the Debtor. Express holds over 91% of all the Debtor's unsecured Debt, or approximately over $4,300,000. Because the Liquidating Trustee will enter into a stalking horse sale agreement (for a $25,400,000 bid for the Sale Property) the Plan provides for estimated distributions to General Unsecured claims of approximately 30% which could be increased if a higher sales price is obtained at the Auction. As proposed by Express, Holders of General Unsecured Claims (estimated by Express at $4,700,000) will receive their pro rata share of the proceeds remaining from the Sale, after Madison Lender's Class Claim and Priority non-tax claims in Class 2 have been paid in full. Equity Interests in Class 4 will not receive any distributions until all claims in other classes are paid in full with interest. A copy of Express Service's Disclosure Statement is available at: http://bankrupt.com/misc/madisonhotel.doc143.pdf About Madison Hotel Madison Hotel, LLC, owns the 72 room 12-story hotel located at 62 Madison Avenue, New York, New York. Madison Hotel Owners, LLC, owns 100% of the membership interests of Madison Hotel, LLC. The Debtors estimate that the value of the hotel property is $32 million. An appraisal is pending. Prepetition, after a building loan went into arrears, a foreclosure action was commenced, and a receiver appointed. The receiver has continued to operate the hotel postpetition. Madison Hotel, LLC, based in New York, filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 11-12560) on May 27, 2011. Judge Martin Glenn presides over the case. Mark A. Frankel, Esq., at Backenroth Frankel & Krinsky, LLP, serves as bankruptcy counsel. In its schedules, the Debtor disclosed $33.6 million in assets and $26.1 million in liabilities as of the Chapter 11 filing. MARKWEST ENERGY: Fitch Puts 'BB' Rating on $1-Bil. Senior Notes --------------------------------------------------------------- Fitch Ratings assigns MarkWest Energy Partners, L.P.'s proposed issuance of $1 billion senior unsecured notes due 2023 'BB'. The notes are to be co-issued by MarkWest and MarkWest Energy Finance Corporation (a wholly owned subsidiary). The new notes are to rank pari passu with the company's senior unsecured debt. MarkWest plans to use proceeds to redeem $81 million 8.75% notes due 2018, $175 million 6.5% notes due 2021, and $245 million of 6.25% notes due 2022. The remaining proceeds are to be used to fund capital expenditures, working capital and for general partnership purposes. Fitch currently rates MarkWest as follows: -- Long-term Issuer Default Rating (IDR) 'BB'; -- Senior unsecured revolving credit facility 'BB+'; -- Senior unsecured debt 'BB'. MarkWest's Rating Outlook is Stable. KEY RATING DRIVERS Key rating factors which support the rating include: -- A modestly diverse footprint with leading positions in the liquids-rich areas in the Mid-continent and Appalachia; -- strategically well-positioned assets with exposure to the rapidly growing Marcellus and Utica shale plays; -- an increasing amount of fee-based revenue sources and a layered hedging strategy; and -- a strategy to fund growth with a balanced combination of debt and equity. The ratings also factor in these concerns: -- Increased leverage which should decrease over the next few quarters; -- A still-significant percentage of non-fee-based cash flows from keep-whole and percent-of-proceeds arrangements; -- Reliance on drilling and production activities in the E&P sector for gathering and processing volumes, which in turn are ultimately driven by volatile hydrocarbon prices; -- A capital expenditure program which has been growing significantly; -- Use of a proxy hedging that can be periodically affected by breakdowns in the correlation between crude oil and natural gas liquids (NGL) prices. Amendment: In December 2012, MarkWest's secured revolving credit agreement was amended to increase the financial covenant for the total leverage ratio (as defined by the bank agreement) to 5.5x from 5.25x through the fourth quarter of 2013 (4Q'13). After then, the total leverage ratio cannot exceed 5.25x. The bank definition of total leverage differs from the Fitch calculation and the largest difference is that the bank definition gives pro forma EBITDA credit for material projects. Leverage: At the end of 3Q'12, debt to adjusted leverage (defined by Fitch as debt to adjusted EBITDA) was 5.0x, which was substantially above 4.1x at the end of 2011. The reason for the higher leverage was the $750 million of notes issued during 3Q'12. With the issuance of new notes, leverage will be elevated over the next few quarters to fund growth projects in two important shale plays, the Marcellus and Utica. Fitch anticipates that leverage should remain around 5.0x at end of 2012 and slightly below that at the end of 2013. Fitch expects significant EBITDA expansion in 2014 which should enable leverage to fall in the range of 4.0x to 4.5x depending on the funding of capex. Adequate Liquidity: At the end of 3Q'12, MarkWest had $1.6 billion of liquidity which consisted of $415 million of cash and nearly $1.2 million available on its revolving bank facility which extends until 2017. Fitch considers the current revolver's size and the company's financial flexibility to be adequate to meet MarkWest's liquidity needs. The next debt maturity is scheduled for 2020 after the 2018's are redeemed. Capital Expenditures: The company has been spending significantly to fund growth projects. The company expects 2012 capex to be approximately $1.8 billion which excludes the Keystone acquisition for $510 million in 3Q'12 net of The Energy Minerals Group's (EMG) contribution. In 2013, MarkWest expects spending to be in the range of $1.4 billion to $1.9 billion. While MarkWest's spending has been significant, the company has used a combination of debt and equity to fund growth. In 2012, net equity proceeds were $1.6 billion while new debt issued was just $750 million. Distributable Cash Flow and Coverage: Distributable cash flow (DCF) for the latest 12 months (LTM) ending 3Q'12 was $393 million, an increase from $333 million in 2011. The company expects it to grow to $500 million to $575 million in 2013. The distribution coverage for the LTM ending 3Q'12 was healthy at 1.2x, which was unchanged from the end of 2011. As of July 1, 2013, 20% of the 19.95 million Class B units held by EMG will begin to vest (the vesting schedule is 20% per year beginning in 2013) so the coverage ratio may slightly decline but Fitch does not anticipate any material changes. Hedging: The company uses some direct product hedges as well as a proxy hedging strategy which is vulnerable to a periodic breakdown in the correlation between crude oil and NGLs. At the end of 3Q'12, 67% of its expected volumes were hedged for 2012, approximately 73% for 2013, and 22% for 2014. At the end of 3Q'12, about 35% of its hedges for 2014 were direct product hedges. Fee-Based Contracts: For the first nine months of 2012, 47% of net operating margin was from fee-based contracts and MarkWest projects this will increase to more than 60% by the end of 2013 and almost 70% by the end of 2014. Fitch considers the increase of fee based contracts favorable from a credit perspective. WHAT COULD TRIGGER A RATING ACTION Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- Increased size, scale, and earnings diversification matched with a sustained decrease in leverage to approximately 3.5x. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Leverage (defined as debt to adjusted EBITDA) in excess of 5.0x on a sustained basis. -- Higher leverage either for high multiple acquisitions or to fund growth projects above and beyond planned debt increases. MARKWEST ENERGY: Moody's Rates $1-Bil. Sr. Unsecured Notes 'Ba3' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to MarkWest Energy Partners, L.P.'s and MarkWest Energy Finance Corporation's proposed $1 billion senior unsecured notes due 2023. The Ba2 Corporate Family Rating (CFR) is unchanged and the outlook remains stable. MarkWest plans to use the proceeds of the proposed note offering to redeem approximately $500 million of senior unsecured notes and for general corporate purposes. Ratings Rationale "The incremental debt associated with this offering, along with the pace of ongoing project-based capital investments, has increased leverage to the point where it is testing the limits of MarkWest's current credit rating," said Stuart Miller, Moody's Vice President - Senior Credit Officer. "We are maintaining the current credit rating with the belief that there will be a significant increase in earnings and cash flow in 2013 to support the increased debt balance. However, if steady progress in the reduction of leverage is not seen throughout 2013, MarkWest's Ba2 Corporate Family Rating and Ba3 unsecured bond rating will be at risk for a downgrade." MarkWest's Ba2 CFR incorporates Moody's expectation for continued fee-based expansion in the company's current geographic footprint. It is also based on Moody's expectation for negative free cash flow into the foreseeable future along and decreasing levels of exposure to commodity price and throughput risk. Like many midstream master limited partnerships, MarkWest has substantial negative free cash flow because of significant growth capital expenditures along with a high percentage of funds from operations being distributed to unit holders. Despite a growing proportion of operating margin derived from fee-based contractual arrangements, MarkWest remains exposed to commodity price risk through its legacy gas processing contracts and to volume risk associated with production decline rates and third-party drilling activity levels. To address these risks and to maintain financial flexibility, MarkWest uses a balance of equity and debt to finance its growth. In 2012, MarkWest issued over $1.6 billion of equity compared to $750 million of debt. However, because of the aggressive investment program in infrastructure in the Marcellus and Utica Shales, since June 30, 2012 the ratio of debt to EBITDA has ballooned from 3.7x to 5.6x pro forma for the new note offering, including Moody's standard adjustments. Moody's is maintaining the current corporate ratings as Moody's expects MarkWest to increase EBITDA to over $700 million by the end of 2013 compared to a debt balance of approximately $3 billion, or a leverage ratio just north of 4.0x. In addition, MarkWest's credit profile should improve as the percentage of operating margin associated with fee-based businesses should approaching 60% by the end of 2013, a meaningful improvement from the year end 2012 level of less than 50%. The Ba3 rating on the senior unsecured notes reflects both the overall probability of default of MarkWest, to which Moody's assigns a PDR of Ba2, and a loss given default of LGD4 (62%). MarkWest's senior unsecured notes are subordinated to any borrowings under the company's $1.2 billion senior secured revolving credit facility. Because of their structurally junior position, MarkWest's senior unsecured notes are rated one-notch below the Ba2 CFR, consistent with Moody's Loss Given Default Methodology. To satisfy its short term liquidity needs, MarkWest relies on its $1.2 billion senior secured revolving credit facility that matures in September 2017. Pro forma for the new note offering, Moody's expects the full amount of the credit facility to be available to fund capital expenditures and/or distributions to unit holders. A covenant amendment executed in December 2012 provides a cushion for MarkWest to manage through its elevated leverage position in 2013. Therefore, Moody's deems near term liquidity to be adequate. A near term upgrade in the MarkWest's CFR is unlikely given the elevated leverage expected in 2013, the expectation for negative free cash flow, and continuing exposure to commodity and volume risk. To be considered for an upgrade, leverage should be reduced with visibility that it will be maintained between 3.5x and 4.0x and the proportion of operating income generated under fee-based contracts should exceed 60%. Alternatively, a negative action could result if leverage is expected to remain above 4.5x through the end of 2013. The principal methodology used in rating MarkWest Energy Partners, L.P. was the Global Midstream Energy 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. MarkWest Energy Partners, L.P. is headquartered in Denver, Colorado. MarkWest has geographic diversity and is one of the largest gas gatherers and processors in the Granite Wash, the Woodford Shale, and in the Marcellus Shale. MARKWEST ENERGY: S&P Rates New $1-Bil. Unsecured Notes 'BB' ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on Denver-based MarkWest Energy Partners L.P. The outlook is stable. At the same time, S&P assigned its 'BB' issue rating and '4' recovery rating to MarkWest's and MarkWest Finance's proposed $1 billion unsecured notes offering due 2023, indicating that creditors can expect average (30% to 50%) recovery in the event of a payment default. The partnership plans to use the net proceeds to redeem its 8.75% notes due 2018 and a portion of its notes due 2021 and 2022, partly fund its 2013 capital spending program, and for general corporate purposes. As of Sept. 30, 2012, MarkWest had total balance sheet debt of about $2.5 billion. The ratings on MarkWest Energy Partners L.P. reflect a "fair" business risk profile characterized by its strong competitive position in the Marcellus Shale region, increasing scale and geographic diversity, and increasing fee-based cash flow. "Our ratings also consider an "aggressive" financial risk profile characterized by forecasted elevated financial leverage in 2013, the partnership's commodity-price-sensitive contract mix, its limited asset diversity, and the risk that a decrease in drilling could affect throughput levels,"S&P said. "The stable outlook reflects our view that MarkWest will maintain adequate liquidity, successfully execute its large organic growth plans in 2013, and achieve financial leverage in the mid-4x area by year-end," S&P added. "Higher ratings are unlikely in the near term, but are possible over time as MarkWest executes its capital projects, meaningfully expands into new resources plays, continues to increase its fee- based cash flows, and keeps total debt to EBITDA in the mid-3x area. We could lower the rating if total adjusted debt to EBITDA is more than 4.75x at year-end 2013 or early 2014, which could occur due to cost overruns associated with the capital spending programs or a weak commodity price environment," said Standard & Poor's credit analyst Michael Grande. MASSACHUSETTS LOCAL GOV'T: Still Faces Ongoing Challenges --------------------------------------------------------- Despite the slow pace of the economic recovery, Massachusetts local governments continue to maintain their strong credit quality, says Moody's Investors Service in a new report. The commonwealth's diverse and improving economy, combined with a steady growth in property tax revenues, have led to general stability in the 282 municipal issuers that Moody's rates in Massachusetts. Local governments in the commonwealth benefit from its high wealth levels, educated workforce, and a housing market that proved resilient through the recession. Most local governments also feature strong governance and fiscal management and lower debt burdens to mitigate rising long-term liabilities in pensions and other post-employment benefit (OPEB) costs. Massachusetts local governments do, however, face ongoing challenges. Potential federal budget cuts in the job-heavy areas of defense, healthcare and research could impair the commonwealth's economic recovery. Local governments also face rising pension and OPEB costs, limited to no growth in state aid to municipalities, and reserve levels that are lower than the national median. These topics are discussed in the new Moody's report "Credit Trends: Massachusetts Local Governments Maintain Strong Credit Quality During Slow Economic Recovery." Managing these challenges will determine whether the municipalities are able to maintain their long-term financial health and credit strength. "Over the medium term, we believe many local governments will continue to draw on their residents' high wealth and historical support of government services to provide property tax growth and, in some cases, overrides of Proposition 2 � to sustain credit strength," says Nicholas Lehman, a Moody's Analyst. Although Proposition 2 � limits property tax revenue growth, the mechanics of the cap allow for property tax revenue increases even as taxable values weaken. Proposition 2 � limits growth in the property tax levy, not the rate, so in years of flat or falling assessed values, local governments are still able to raise the levy 2.5% over the previous year. Massachusetts municipalities have increased their tax levies regularly, and these have grown at an overall rate of approximately 5%, which represents a combination of the allowable 2.5% growth, additional revenue from exclusions to the levy limit for new development, as well as voter-approved increases. "Given that ad valorem taxes are one of the most stable sources of local government revenues, communities in Massachusetts benefit from a steady and predictable stream of operating revenue," says Tom Compton, a Moody's Associate Analyst. During 2008 and 2009, Moody's downgraded a higher proportion of Massachusetts local governments than it did US local governments as a whole, as local governments in Massachusetts drew on reserves because of some mid-year state aid cuts. But since 2009, rating downgrades of local governments have been less frequent in Massachusetts than in the US as a whole, and Massachusetts has been outperforming the nation in rating upgrades as a percentage of total ratings. MDC HOLDINGS: Moody's Affirms '(P)Ba2' Subordinate TMN Rating ------------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to MDC Holdings, Inc.'s proposed $250 million senior unsecured notes due 2043. In the same rating action, Moody's affirmed the Baa3 rating on MDC's existing senior unsecured notes and the existing shelf ratings were affirmed. The rating outlook was revised to negative from stable. The following rating actions were taken: Issuer: M.D.C. Holdings, Inc. Proposed $250 million senior unsecured notes due 2043, assigned a Baa3; Existing senior unsecured notes, affirmed at Baa3; Senior unsecured shelf (domestic), affirmed at (P)Baa3; Senior unsecured medium term note shelf (MTN, domestic), affirmed at (P)Baa3; Senior subordinate shelf (domestic), affirmed at (P)Ba2; Junior subordinate shelf (domestic), affirmed at (P)Ba2; Subordinate MTN (domestic), affirmed at (P)Ba2; Preferred shelf (domestic), affirmed at (P)Ba3; Outlook changed to negative from stable. Issuer: MDC Capital Funding Trust I Backed preferred shelf (domestic), affirmed at (P)Ba3; Outlook changed to negative from stable. Issuer: MDC Capital Funding Trust II Backed preferred shelf (domestic), affirmed (P)Ba3; Outlook changed to negative from stable. Ratings Rationale The proceeds from the $250 million senior unsecured notes will be designated for general corporate uses. MDC's cash balance will increase by the amount of the offering, while specific uses such as potential land investments or debt retirement going forward will be determined by management based on market conditions. The change in outlook to negative from stable reflects Moody's expectation that the company will continue under performing on many of its key credit metrics, particularly gross margins, without having the formerly strong mitigant of a sizable net cash position. After holding a net cash position for the last five years, which has been a distinguishing strength of the company, MDC's net debt position is likely to begin expanding, largely because of increasing land spend due to increasing volumes. At the same time, however, Moody's anticipates that the offset from earnings growth will not be sufficient to enable MDC to restore credit metrics rapidly. Moody's regards MDC as being weakly positioned in its rating category. The proposed transaction results in a higher absolute debt level, and pro forma adjusted homebuilding debt to capitalization rises from 46.3% to 53.3% (and further to 55.6%, if the company should choose to upsize the offering to $350 million). Moody's acknowledges that MDC turned the corner on profitability in 2012 and increased its adjusted gross margins to 16% in the trailing 12 month period ending September 30, 2012 from 15% in 2011. Additionally, the company's homebuilding interest coverage and return on assets began inching up from the extremely low levels of the recent past. Moody's also considers that increased earnings as well as the reversal of the deferred tax valuation allowance will help MDC's homebuilding debt leverage to decline in the intermediate term. The Baa3 rating considers MDC's conservative land strategy and clean and transparent balance sheet, notably its lack of off- balance sheet recourse obligations such as joint venture debt and specific performance lot option contracts. Additionally the rating incorporates positive net income generation (the company generated $33 million of net income in the nine months of 2012), improving gross margins, and Moody's view that the healthy industry conditions will result in further expansion of earnings in 2013 and 2014. At the same time, Moody's recognizes that, while gradually improving, most of the company's traditional credit metrics remain relatively weak, coming from very low levels. MDC's rating is also constrained by the accelerating land spend due to increasing volumes and the resulting negative cash flow generation. MDC has a solid liquidity profile, supported by $801 million of unrestricted cash and investments at September 30, 2012, which will be augmented by the size of the note offering; lack of debt maturities until December 2014, when $250 million of 5.375% senior unsecured notes come due; and the absence of bank covenants with which to maintain compliance. However, the company's liquidity is likely to weaken from its increasing land spend and negative cash flow, which will burn cash and move the company into a growing net debt position. The liquidity is also constrained by the lack of a revolving credit facility. The negative outlook incorporates Moody's expectation that the company's earnings growth may not be sufficient to offset its loss of its formerly unique net cash position. The outlook could be restored to stable if the company demonstrates that its expected cash burn is compensated for by a more rapid than expected restoration of respectable credit metrics. The ratings could come under pressure if the company's earnings growth slows, homebuilding debt leverage does not begin to decline, and/or if liquidity weakens such that cash declines significantly without a committed revolving credit facility in place. Further, the ratings could be lowered if the company made a sizable debt-financed acquisition or instituted a material share repurchase program. The principal methodology used in rating M.D.C. Holdings, Inc. was the Global Homebuilding Industry Methodology published in March 2009. Based in Denver, Colorado, M.D.C. Holdings, Inc. ("MDC"), whose subsidiaries build homes under the name "Richmond American Homes," is a mid-sized national homebuilder, based on 2011 revenues. The company also provides mortgage financing, primarily for MDC's homebuyers, through its wholly owned subsidiary, HomeAmerican Mortgage Corporation. MDC has homebuilding divisions across the country, including Denver, Colorado Springs, Salt Lake City, Las Vegas, Phoenix, Tucson, California, Northern Virginia, Maryland, Philadelphia/Delaware Valley, Jacksonville, and Seattle. Total revenues and consolidated net income in the last twelve months ended September 30, 2012 were approximately $1.0 billion and $14 million, respectively. MERRILL CORP: S&P Cuts Corporate Credit Rating to 'D' ----------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Merrill Corp. to 'D' from 'CCC-'. "We reinstated then subsequently lowered our issue-level ratings on the first-lien term loan due 2012, revolving credit facility due 2012 to 'D' from 'CCC' with a recovery rating of '2'. We also lowered the second- lien term loan due 2014 to 'D' from 'C', with a recovery rating of '6'," S&P said. "The downgrade reflects Merrill's failure to refinance or pay off its $374 million first-lien term loan and $33 million drawn revolver prior to its Dec. 22, 2012 maturity," said Standard & Poor's credit analyst Chris Valentine. "The second lien is also in technical default because of the cross default provision in the credit agreement. We should have lowered the ratings following the missed payment on the 22nd," Mr. Valentine noted. "We believe the company is engaged in negotiations with its lenders to restructure its current debt maturities. We will update our analysis as new information becomes available related to a potential refinancing or a financial restructuring," Mr. Valentine added. METEX MFG: Creditors Committee Taps Caplin & Drysdale as Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on Jan. 16, 2013, at 10 a.m., to consider the request of the Official Committee of Unsecured Creditors in the Chapter 11 case of Metex Mfg. Corporation to retain Caplin & Drysdale, Chartered, as counsel. Objections, if any, are due Jan. 11, 2013, at 4 p.m. Caplin & Drysdale served as counsel to the ad hoc committee of three law firms that represented the largest number of holders of asbestos-related claims against the Debtor, and a representative of future asbestos personal injury claimants in connection with the negotiations and the development of the Prepackaged Plan. The hourly rates of the Caplin & Drysdale professionals who are expected to serve the Committee are: Elihu Inselbuch, member $1,000 Peter Van N. Lockwood, member $955 Ann C. McMillan, member $660 Jeffrey A. Liesemer, member $565 Rita C. Tobin, of counsel $545 Andrew J. Sackett, associate $420 Ann M. Weber, associate $295 Sara Joy DelSavio, paralegal $230 Eugenia Benetos, paralegal $230 Zachary D. Orsulak, paralegal $215 Members and Senior Counsel $485 - $1,120 Of Counsel $400 - $545 Associates $250 - $475 Paralegals $215 - $230 To the best of the Committee's knowledge, Caplin & Drysdale is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Metex Great Neck, New York-based Metex Mfg. Corporation, formerly known as Kentile Floors, Inc., started business in the late 1800's as a manufacturer of cork tile, and thereafter progressed to making composite tile for commercial and residential use. It filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 12- 14554) on Nov. 9, 2012. The petition was signed by Anthony J. Miceli, president. The Debtor estimated its assets and debts at $100 million to $500 million. Judge Burton R. Lifland presides over the case. Affiliate Kentile Floors, Inc., filed a separate Chapter 11 petition (Bankr. S.D.N.Y. Case No. 92-46466) on Nov. 20, 1992. Caplin & Drysdale, Chartered represents the Official Committee of unsecured Creditors in the Debtor's case. METEX MFG: FCR Legal Representative Taps Young Conaway as Counsel ----------------------------------------------------------------- Lawrence Fitzpatrick, Esq., proposed legal representative for future asbestos claimants in the Chapter 11 case of Metex Mfg. Corporation, asks the U.S. Bankruptcy Court for the Southern District of New York for permission to retain Young Conaway Stargatt & Taylor, LLP as his counsel. The hourly rates of Young Conaway's personnel are: Edwin J. Harron, partner $650 Daniel F.X. Georghan, partner $570 Sara Beth A.R. Kohut, associate $390 Chad Corazza, paralegal $140 To the best of FCR Legal Representative's knowledge, Young Conaway is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Metex Great Neck, New York-based Metex Mfg. Corporation, formerly known as Kentile Floors, Inc., started business in the late 1800's as a manufacturer of cork tile, and thereafter progressed to making composite tile for commercial and residential use. It filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 12- 14554) on Nov. 9, 2012. The petition was signed by Anthony J. Miceli, president. The Debtor estimated its assets and debts at $100 million to $500 million. Judge Burton R. Lifland presides over the case. Affiliate Kentile Floors, Inc., filed a separate Chapter 11 petition (Bankr. S.D.N.Y. Case No. 92-46466) on Nov. 20, 1992. Caplin & Drysdale, Chartered represents the Official Committee of unsecured Creditors in the Debtor's case. METEX MFG: Meeting of Creditors Postponed Until Further Notice -------------------------------------------------------------- The U.S. Trustee for Region 2 notified the U.S. Bankruptcy Court for the Southern District of New York that meeting of creditors in the Chapter 11 case of Metex Mfg. Corporation has been postponed until further notice. The meeting was originally scheduled for Dec. 18, 2012. A notice of the new date and time for the meeting of creditors will be provided once established. About Metex Great Neck, New York-based Metex Mfg. Corporation, formerly known as Kentile Floors, Inc., started business in the late 1800's as a manufacturer of cork tile, and thereafter progressed to making composite tile for commercial and residential use. It filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 12- 14554) on Nov. 9, 2012. The petition was signed by Anthony J. Miceli, president. The Debtor estimated its assets and debts at $100 million to $500 million. Judge Burton R. Lifland presides over the case. Affiliate Kentile Floors, Inc., filed a separate Chapter 11 petition (Bankr. S.D.N.Y. Case No. 92-46466) on Nov. 20, 1992. Caplin & Drysdale, Chartered represents the Official Committee of unsecured Creditors in the Debtor's case. METEX MFG: Taps Lawrence Fitzpatrick as FCR Legal Representative ---------------------------------------------------------------- Metex Mfg. Corporation asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Lawrence Fitzpatrick, Esq., as legal representative for future claimants. Future asbestos claimants are individuals who do not currently hold asbestos claims against the Debtor but are expected to assert asbestos claims in the future. The Debtor explains that the appointment of a future claimants' representative is necessary to represent the interests of future claimants and ensure that the relief sought through any plan of reorganization in the case comports with due process and fairness. Mr. Fitzpatrick agrees to be compensated at the rate of $420 per hour, subject to upward annual adjustments that may be made at the beginning of each calendar year. To the best of the Debtor's knowledge, Mr. Fitzpatrick is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Metex Great Neck, New York-based Metex Mfg. Corporation, formerly known as Kentile Floors, Inc., started business in the late 1800's as a manufacturer of cork tile, and thereafter progressed to making composite tile for commercial and residential use. It filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 12- 14554) on Nov. 9, 2012. The petition was signed by Anthony J. Miceli, president. The Debtor estimated its assets and debts at $100 million to $500 million. Judge Burton R. Lifland presides over the case. Affiliate Kentile Floors, Inc., filed a separate Chapter 11 petition (Bankr. S.D.N.Y. Case No. 92-46466) on Nov. 20, 1992. Caplin & Drysdale, Chartered represents the Official Committee of unsecured Creditors in the Debtor's case. METRO FUEL: Can Employ AP Services as Crisis Managers ----------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York authorized Metro Fuel Oil Corp., et al., to (a) employ AP Services, LLC, as crisis managers for the Debtors, effective as of the Commencement Date, (b) to appoint David Johnston as Chief Restructuring Officer and (c) to appoint Thomas Studebaker as Chief Financial Officer. APS and Messrs. Johnston and Studebaker will act under the direction, control and guidance of the Board of Directors of Metro Fuel Oil Corp. and will serve at the Board's pleasure. Success fees, transaction fees or other "back-end" fees, including the Success Fee, will be subject to the approval of the Court upon the filing of a fee application on a reasonableness standard and are not being pre-approved by entry of this Order. No success fee, transaction fee or other "back-end" fee will be sought upon conversion of the case, dismissal of the case for cause or appointment of a trustee. A copy of the Engagement Letter is available at: http://bankrupt.com/misc/metrofuel.apservicesagreement.pdf About Metro Fuel Metro Fuel Oil Corp., is a family-owned energy company, founded in 1942, that supplies and delivers bioheat, biodiesel, heating oil, central air conditioning units, ultra low sulfur diesel fuel, natural gas and gasoline throughout the New York City metropolitan area and Long Island. Owned by the Pullo family, Metro has 55 delivery trucks and a 10 million-gallon fuel terminal in Brooklyn. Financial problems resulted in part from cost overruns in building an almost-complete biodiesel plant with capacity of producing 110 million gallons a year. Based in Brooklyn, New York, Metro Fuel Oil Corp., fka Newtown Realty Associates, Inc., and several of its affiliates filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Lead Case No. 12-46913). Judge Elizabeth S. Stong presides over the case. Nicole Greenblatt, Esq., at Kirkland & Ellis LLP, represents the Debtor. The Debtor selected Epiq Bankruptcy Solutions LLC as notice and claims agent. The petition showed assets of $65.1 million and debt totaling $79.3 million. Liabilities include $58.8 million in secured debt, with $48.3 million owing to banks and $10.5 million on secured industrial development bonds. METRO FUEL: Can Hire Carl Marks as Fin'l Advisor/Investment Banker ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of New York authorized Metro Fuel Oil Corp., et al., to employ Carl Marks Advisory Group LLC as financial advisor and investment banker to the Debtors effective as of Oct. 2, 2012, pursuant to the terms and conditions of the amended Financial Advisory Agreement, as modified by the Court. CMAG is authorized to provide the Debtors with these services: (a) Serving as the financial advisor to the Debtors in connection with its exploration of prospective transactions; (b) Reviewing the Debtors' business plan and other information in working with management and APS to stimulate interest among potential acquirers or merger candidates; (c) Formulating and implementing a strategy for identifying additional prospective Acquirers, approaching them and ascertaining their level of interest in a transaction; (d) Assisting and supporting the Debtors and APS in coordinating the sales effort and due diligence process, managing data flow between management and potential acquirers and assisting in the negotiation and structuring of the aspects of each proposed transaction; (e) Discussing with the Debtors all interested parties, coordinating the negotiation process with the Debtors, participating in negotiations and otherwise reasonably assisting the Debtors in effectuating the transaction; (f) Analyzing the relative merits of competing transaction proposals for the Debtors' evaluation; (g) Assisting the Debtors, APS and counsel in negotiating appropriate bid protections and bid procedures for any potential stalking horse bidder; (h) Assisting in conducting any Court approved auction and sale hearing; and (i) With the participation and approval of the Board of Directors of the Debtors or its designated representatives, assisting in negotiations with selected potential acquirers, assisting in structuring a Transaction on terms deemed acceptable to the Debtors, assisting in managing the documentation and closing process associated with the Transaction and facilitating discussions between the legal, accounting, tax and business transaction teams of the Debtors and the selected acquirers with the objective of reaching a closing on terms acceptable to the Debtors. A copy of the CMAG Agreement is available at: http://bankrupt.com/misc/metrofuel.cmagagreement.pdf About Metro Fuel Metro Fuel Oil Corp., is a family-owned energy company, founded in 1942, that supplies and delivers bioheat, biodiesel, heating oil, central air conditioning units, ultra low sulfur diesel fuel, natural gas and gasoline throughout the New York City metropolitan area and Long Island. Owned by the Pullo family, Metro has 55 delivery trucks and a 10 million-gallon fuel terminal in Brooklyn. Financial problems resulted in part from cost overruns in building an almost-complete biodiesel plant with capacity of producing 110 million gallons a year. Based in Brooklyn, New York, Metro Fuel Oil Corp., fka Newtown Realty Associates, Inc., and several of its affiliates filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Lead Case No. 12-46913). Judge Elizabeth S. Stong presides over the case. Nicole Greenblatt, Esq., at Kirkland & Ellis LLP, represents the Debtor. The Debtor selected Epiq Bankruptcy Solutions LLC as notice and claims agent. The petition showed assets of $65.1 million and debt totaling $79.3 million. Liabilities include $58.8 million in secured debt, with $48.3 million owing to banks and $10.5 million on secured industrial development bonds. METROPLAZA HOTEL: 341(a) Meeting of Creditors on Jan. 17 -------------------------------------------------------- A meeting of creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of Metroplaza Hotel, LLC, is scheduled for Jan. 17, 2013, at 11:00 a.m. at Room 129, Clarkson S. Fisher Courthouse. Proofs of claim are due by April 17, 2013. About Metroplaza Hotel Inn at Woodbridge Inc. and Metroplaza Hotel LLC sought Chapter 11 protection (Bankr. D.N.J. Case Nos. 12-38603 and 12-38611) in Trenton on Dec. 6, 2012. Metroplaza Hotel disclosed assets of $36.2 million and liabilities of $42.2 million, including $41.9 million owed to secured creditor WBCMT 2006-C24 Wood Avenue, LLC. Metroplaza owns an 11-story hotel and office building on a 9.95-acre site in Iselin, New Jersey, which is valued at $35.5 million. The property serves as collateral to the WBCMT debt. The Debtors have hired Greenbaum, Rowe, Smith & Davis LLP as Chapter 11 counsel. METROPLAZA HOTEL: Proposes DiPasquale as Counsel ------------------------------------------------ Metroplaza Hotel LLC is asking for approval from the bankruptcy judge to hire DiPasquale, Della Fera & Sodono, P.C. as its counsel. The individuals presently designated to represent the Debtor and their hourly rates are: Individual Position Rate ---------- -------- ---- Joseph J. DiPasquale Partner $520 Thomas M. Walsh Partner $450 John J. Stoelker Associate $265 Other members or associates of the firm may also render services to the Debtor, if appropriate, at rates commensurate with the foregoing, as follows: Rate ---- Partners $400 to $570 Associates $205 to $300 Law Clerks $185 to $195 Paralegals and Support Staff $185 to $195 To the best of the Debtor's knowledge, the firm does not represent or hold any interest adverse to the Debtor, and is a disinterested person under 11 U.S.C. Sec. 101(14). About Metroplaza Hotel Inn at Woodbridge Inc. and Metroplaza Hotel LLC sought Chapter 11 protection (Bankr. D.N.J. Case Nos. 12-38603 and 12-38611) in Trenton on Dec. 6, 2012. Metroplaza Hotel disclosed assets of $36.2 million and liabilities of $42.2 million, including $41.9 million owed to secured creditor WBCMT 2006-C24 Wood Avenue, LLC. Metroplaza owns an 11-story hotel and office building on a 9.95-acre site in Iselin, New Jersey, which is valued at $35.5 million. The property serves as collateral to the WBCMT debt. Inn at Woodbridge hired Greenbaum, Rowe, Smith & Davis LLP as Chapter 11 counsel. METROPLAZA HOTEL: Seeks to Use WBCMT's Cash Collateral ------------------------------------------------------ Metroplaza Hotel LLC filed a motion to use cash collateral of WBCMT 2006-C24 Wood Avenue, LLC. The Debtor intends to grant the lender adequate protection in the form of replacement liens. The Debtor asserts that there exists an equity cushion that protects WBCMT's interests. The Debtor will use the cash collateral to pay operating expenses. About Metroplaza Hotel Inn at Woodbridge Inc. and Metroplaza Hotel LLC sought Chapter 11 protection (Bankr. D.N.J. Case Nos. 12-38603 and 12-38611) in Trenton on Dec. 6, 2012. Metroplaza Hotel disclosed assets of $36.2 million and liabilities of $42.2 million, including $41.9 million owed to secured creditor WBCMT 2006-C24 Wood Avenue, LLC. Metroplaza owns an 11-story hotel and office building on a 9.95-acre site in Iselin, New Jersey, which is valued at $35.5 million. The property serves as collateral to the WBCMT debt. Inn at Woodbridge hired Greenbaum, Rowe, Smith & Davis LLP as Chapter 11 counsel. DiPasquale, Della Fera & Sodono, P.C. is the counsel for Metroplaza. MICHIGAN TRANSPORTATION: Moody's Maintains' Ba1' Rating ------------------------------------------------------- Moody's Investors Service has withdrawn the programmatic ratings on Michigan Transportation Fund (MTF) bonds issued by eight local governments in the State of Michigan (general obligation rated Aa2/stable outlook), as well as the programmatic rating on the MTF itself. The withdrawal corrects Moody's approach to rating MTF bonds by applying its rating methodology "US Public Finance Special Tax Methodology". SUMMARY RATINGS RATIONALE Moody's released its "US Public Finance Special Tax Methodology" in March of 2012. The withdrawal of the MTF programmatic rating corrects Moody's approach to rating MTF secured bonds by applying the new methodology. The change in analytic approach is reflective of the revenue source securing the bonds, which is MTF revenue that is collected primarily from statewide taxes on motor vehicle fuel sales and vehicle licensing. The change in analytic approach is also reflective of the absence of a formalized state programmatic framework to secure MTF bonds. While the MTF revenue provides the primary funding source for debt service on the bonds, there is no legal separation of these revenues from the issuing local government. Without legal separation, special tax ratings are capped at the local government's general obligation rating. The MTF bonds issued by Grand Traverse County, the City of Kalamazoo, the City of Southfield, the City of Taylor, Wayne County, the City of Westland and the City of Wyoming are also secured by the general obligation limited tax pledge of the issuing entity. Given that secondary pledge and the special tax methodology that limits these ratings to the general obligation rating, the local government's general obligation limited tax rating now provides the basis of the rating on outstanding MTF bonds. The MTF bonds issued by the Oakland County Road Commission, by contrast, are secured solely by the net MTF revenues and the rating of these bonds is therefore based solely on application of the special tax methodology. Moody's has also withdrawn the Aa2 programmatic rating on the Michigan Transportation Fund. The fund is a special revenue fund of the State of Michigan into which motor vehicle fuel and license taxes are collected. Revenue is appropriated from the fund for specific, statutory purposes and then allocated to other state funds and local governments via a statutory formula. While the state and local governments may then issue debt secured by these revenues, the Michigan Transportation Fund itself does not issue debt. Affected Ratings - The Aa2 programmatic rating on Grand Traverse County's MTF Bonds Series 2006 bonds has been withdrawn and a corrected Aa2 underlying rating applied. - The Aa2 programmatic rating on Grand Traverse County's MTF Bonds, Series 2008 has been withdrawn; Moody's maintains the Aa2 underlying rating on the bonds. - The Aa2 programmatic rating on the City of Kalamazoo's 1998 Michigan Transportation Fund Bonds has been withdrawn; Moody's maintains the Aa3 underlying rating on the bonds. - The Aa2 programmatic rating on the Oakland County Road Commission's MTF Notes, Series 2007 has been withdrawn and a corrected Aa2 underlying rating has been assigned. - The Aa2 programmatic rating on the City of Southfield's MTF Bonds, Series 2005 has been withdrawn; Moody's maintains the Aa2 underlying rating on the bonds. - The Aa2 programmatic rating on the City of Taylor's MTF Bonds, Series 2005 bonds has been withdrawn; Moody's maintains the Ba1 underlying rating with a negative outlook on the bonds. - The Aa2 programmatic rating on Wayne County's MTF Bonds 1999 Bonds has been withdrawn; Moody's maintains the Baa2 underlying rating with a negative outlook on the bonds. - The Aa2 programmatic rating on the City of Westland's MTF Bonds 1998 and 2004 MTF Bonds has been withdrawn; Moody's maintains the A1 underlying rating on the bonds. - The Aa2 rating on the City of Wyoming's 2002 MFT Bonds has been withdrawn; Moody's maintains the Aa3 underlying rating on the bonds. WHAT COULD CHANGE THE RATING UP - Legal divergence of MTF revenues, separating them from any local government control, prior to payment of debt service - Improvement in General Obligation credit profile of issuing local governments WHAT COULD CHANGE THE RATING DOWN - Deterioration of General Obligation credit profile of issuing local governments - Legislative changes to the MTF program leading to reduced revenue distributions to local governments Principal Methodology The principal methodology used in this rating was US Public Finance Special Tax Methodology published in March 2012. MILAGRO OIL: Inks Severance Agreement with President and CEO ------------------------------------------------------------ James G. Ivey, the President and Chief Executive Officer of Milagro Oil & Gas, Inc., as well as a director of the Company, resigned, and his employment agreement with the Company was terminated. Effective Dec. 27, 2012, the Company entered into a Severance Agreement and Mutual Release with Mr. Ivey whereby (i) the termination of his employment agreement with the Company was confirmed, subject to the continued enforcement of the provisions relating to non-competition, non-solicitation, non-disparagement and confidentiality; (ii) he and the Company entered into mutual releases; (iii) he is entitled to a one time payment of $300,000, reflecting the expected bonus he would have earned for 2012; and (iv) he is entitled to receive his base salary of $25,000 per month for the next 12 months. About Milagro Oil Milagro Oil & Gas, Inc., is an independent energy company based in Houston, Texas that is engaged in the acquisition, development, exploitation, and production of oil and natural gas. The Company's historic geographic focus has been along the onshore Gulf Coast area, primarily in Texas, Louisiana, and Mississippi. The Company operates a significant portfolio of oil and natural gas producing properties and mineral interests in this region and has expanded its footprint through the acquisition and development of additional producing or prospective properties in North Texas and Western Oklahoma. The Company's balance sheet at Sept. 30, 2012, showed $509.0 million in total assets, $461.3 million in total liabilities, $235.4 million in Redeemable series A preferred stock, and a stockholders' deficit of $187.7 million. Going Concern Uncertainty According to the regulatory filing, the 2011 Credit Facility contains customary financial and other covenants, including minimum working capital levels (the ratio of current assets plus the unused availability of the borrowing base under the 2011 Credit Facility to current liabilities) of not less than 1.0 to 1.0, minimum interest coverage ratio, as defined, of not less than 2.50 to 1.0, maximum leverage ratio, as defined, of debt balances as compared to EBITDA of not greater than 4.25 to 1.0 and maximum secured leverage ratio, as defined, of secured debt balances as compared to EBITDA of not greater than 2.00 to 1.0. The maximum leverage ratio will reduce to 4.00 to 1.0 as of March 31, 2013, and all periods thereafter. "The Company is currently exploring a range of alternatives to be in compliance with the financial covenant at the applicable dates. Unless the Company is able to execute one or more of these alternatives, the Company's maximum leverage ratio may not meet the reduced threshold in the covenants beginning on March 31, 2013. In that event, the Company would have to seek a waiver or amendment to these agreements and, if not granted, the lenders could declare a default and the Company will not be able to borrow additional funds under the facility. Accordingly, there is substantial doubt of the Company's ability to continue as a going concern." * * * As reported by the TCR on Nov. 29, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on Houston-based Milagro Oil & Gas Inc. to 'CCC' from 'CCC+'. "The rating action reflects our assessment that Milagro could face a near-term liquidity crisis," said Standard & Poor's credit analyst Christine Besset. MODERN PLASTICS: NPC to Appear in Sale Hearing Today ---------------------------------------------------- When New Products Corporation (NPC) recently learned about the proposed bankruptcy sale of Modern Plastics Corp.'s real estate on North Shore Drive in Benton Harbor, including all the lands and buildings, for a low price of $25,000, the company started asking questions. After all, Modern Plastics had been a customer and NPC's neighbor on North Shore Drive in Benton Harbor for more than 70 years before it was forced to close its doors in 2008 and file for bankruptcy. "We only learned about the option to purchase Modern Plastics because we are one of the creditors," said Cheryl Miller, NPC's president and CEO. "We supplied parts to Modern Plastics for years. We are one of many creditors still owed money. They even owed paychecks to some of their loyal employees." Following further inquiries, NPC learned that an offer of $25,000 to purchase Modern Plastics' facilities and property was made by a company formed by an attorney from the law firm of Dickinson Wright, which also represents Whirlpool and Harbor Shores. In December, NPC filed an objection with the bankruptcy court, offering to pay more for the property to protect creditors of Modern Plastics, and to prevent Harbor Shores' complete encirclement of NPC's manufacturing facilities and operations. "It's no coincidence that Harbor Shores has been eyeing our property and our neighbor, Modern Plastics' property, for many years," added Ms. Miller. "We have access to drawings that date back to 2005, showing residential development on both the properties." This is not the first time NPC has gone head to head with Harbor Shores. In September 2011, NPC filed a lawsuit against Harbor Shores and developers of the Harbor Shores Golf Course for taking the company's property without asking. It is now part of the 18th fairway. This lawsuit is still pending in Berrien County Circuit Court, as the parties engage in discovery. "We refuse to be squeezed out of business," said Ms. Miller. "Our mission is to continue supplying high quality parts to customers worldwide, to protect the jobs and livelihoods of our workers, and continue to be good neighbors in Benton Harbor by acting with integrity and doing the right thing." Ms. Miller and NPC's legal counsel will attend the upcoming bankruptcy hearing with regard to its objection and counter-offer to purchase Modern Plastics. The hearing is scheduled to be held in Kalamazoo's Michigan Western District Bankruptcy Court at 9 a.m. on Wednesday, January 9, 2013. Bankruptcy Judge Scott W. Dales is presiding. MODERN PRECAST: Proposes Griffin as Investment Banker ----------------------------------------------------- Modern Precast Concrete and its affiliates filed an application to employ Griffin Financial Group, LLC, as investment banker. Prior to the Petition Date, Griffin provided various services to Modern, including, most notably, pre-petition analysis and marketing of the Debtors' businesses as a going concern and negotiating a letter of intent and ultimately an asset purchase agreement with the Debtors' proposed "stalking horse" bidder in connection with the Debtors' proposed sale of assets pursuant to Section 363 of the Bankruptcy Code. During the pendency of the Chapter 11 case, the firm will, among other things, solicit offers from potential lenders or buyers, negotiate, in coordination with the Debtors and their professionals, a financing or sale deal on behalf of the Debtor, develop and review possible financing or sale transaction structures, and provide various financial analyses to assit in negotiations. Compensation will be payable to Griffin by way of a flat monthly fee in the amount of $5,000 per month, plus a contingent fee upon the completion of either a financing or sale transaction. In the case of a financing transaction, Griffin will be paid an amount equal to the greater of $250,000 or 3.0% of the total amount advanced or committed to the Debtors, other than by the Debtors' secured lender, M&T Bank. In the event of a sale transaction, Griffin will be paid an amount equal to the greater of $250,000 or 3.0% of the "total consideration" of any purchase. In the case of either a financing or sale transaction, the completion or closing of such transaction, as applicable, will be conditioned upon the payment of Griffin's contingent fee. About Modern Precast Modern Precast Concrete, Inc. filed a Chapter 11 petition (Bankr. E.D. Penn. Case No. 12-21304) on Dec. 16, 2012, in Reading, Pennsylvania. Aaron S. Applebaum, Esq. and Barry D. Kleban, Esq., at McElroy Deutsch Mulvaney & Carpenter LLP, in Philadelphia, serve as counsel to the Debtor. The Debtor estimated up to $50 million in both assets and liabilities. West Family Associates, LLC (Case No. 12-21306) and West North, LLC (Case No. 12-21307) also sought Chapter 11 protection. The petitions were signed by James P. Loew, chief financial officer. Founded in 1946 as Woodrow W. Wehrung Excavating, Modern Precast is a leading manufacturer and distributor of precast concrete structures, pipes and related products. Modern also purchases and resells related products. Modern operates from two facilities, a 91,010 square-foot facility in Easton, Pennsylvania and a 43,784 square-foot facility in Ottsville, Pennsylvania. Modern is a single source supplier of virtually every precast concrete product needed for residential, commercial/industrial, Department of Transportation and municipality projects. Modern, on a consolidated basis, generated revenues of $23.4 million and $19.4 million and operating EBITDA of $1.4 million and ($382,000) for years 2010 and 2011, respectively. The Debtors have tapped Beane Associates, Inc. as financial restructuring advisor and McElroy, Deutsch, Mulvaney & Carpenter, LLP as attorneys. MONITOR COMPANY: Committee Can Retain Cole Schotz as Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of unsecured Creditors in the Chapter 11 cases of Monitor Company Group Limited Partnership, et al., to retain Cole, Schotz, Meisel, Forman & Leonard, P.A., as its counsel, nunc pro tunc to Nov. 15, 2012. As reported in the TCR on Dec. 14, 2012, the hourly rates of Cole Schotz' personnel are: Norman L. Pernick, member $765 Michael D. Warner, member $650 Warren A. Usatine, member $595 Marc P. Press, member $555 Ryan T. Jareck, associate $310 Kerri L. LaBrada, paralegal $200 Members $380 - $785 Associates $210 - $400 Paralegals $185 - $245 About Monitor Company Group Monitor Company Group LP -- http://www.monitor.com/-- is a global consulting firm with 1,200 personnel in offices across 17 countries worldwide. Founded in 1983 by six entrepreneurs, and headquartered in Cambridge, Massachusetts, Monitor advises for- profit, sovereign, and non-profit clients on growing their businesses and economies and furthering their charitable purposes. Monitor and several affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 12-13042 to 12-13062) on Nov. 7, 2012. Judge Hon. Christopher S. Sontchi presides over the case. Pepper Hamilton LLP and Ropes & Gray LLP serve as the Debtors' counsel. The financial advisor is Carl Marks Advisory Group LLC. Epiq Bankruptcy Solutions, LLC is the claims and noticing agent. The petitions were signed by Bansi Nagji, president. Bank of America is represented in the case by Jinsoo Kim, Esq., and Timothy Graulich, Esq., at Davis Polk & Wardwell LLP; and Mark D. Collins, Esq., at Richards Layton & Finger PA. J. Gregory Milmoe, Esq., and Shana A. Elberg, Esq., at Skadden Arps Slate Meagher & Flom LLP in New York; and Mark Chehi, Esq., and Christopher DiVirgilio, Esq., at Skadden Arps in Delaware, represent Deloitte Consulting LLP. Caltius Partners IV LP; Caltius Partners Executive IV, LP; and CP IV Pass-Through (Monitor) LP are represented by John Sieger, Esq., at Katten Muchin Rosenman LLP. Monitor's consolidated unaudited financial statements as of June 30, 2012, which include the assets and liabilities of non- Debtor foreign subsidiaries, reflected total assets of roughly $202 million (including $93 million in current assets) and total liabilities of roughly $200 million. Monitor filed for bankruptcy to sell substantially all of their businesses and assets to Deloitte Consulting LLP, a Delaware registered limited liability partnership and DCSH Limited, a UK company limited by shares, subject to higher or otherwise better offers. The base purchase price set forth in the Stalking Horse Agreement is $116.2 million, plus (i) assumption of certain liabilities and (ii) certain cure costs for assumed contracts. The Stalking Horse Agreement provides for the Stalking Horse Bidder to receive a combined breakup fee and expense reimbursement of $4 million. The Debtors propose to hold an auction on Nov. 28, 2012, at the offices of the Sellers' counsel, Ropes & Gray LLP in New York. Closing of the deal must occur by the earlier of (i) 30 days following entry of the Sale Order and (ii) Feb. 28, 2013. MONITOR COMPANY: Hiring McGladrey LLP as Tax Advisor ---------------------------------------------------- Monitor Company Group Limited Partnership, et al., ask the U.S. Bankruptcy Court for the District of Delaware for authorization to employ McGladrey LLP as tax advisor to the Debtors, nunc pro tunc to Nov. 29, 2012. McGladrey LLP will provide tax consulting and analysis in connection with the proposed transaction between Monitor Company Group Limited Partnership and Deloitte Consulting LLP and affiliate or, in the event other offers are received, proposed transactions with other purchasers. The initial phase of the work will consider the tax ramifications to the partner group of the proposed sale of assets. The analysis will consider U.S. federal tax consequences, state tax matters and the U.S. implications of the sale of foreign assets. Tax consulting services would include: 1) preparation of tax filings, 2) review of Debtor-prepared filings, 3) preparation and/or review of supporting workpapers and analysis, and 4) any related guidance and advice. In the wind down phase, services would include: 1) withdrawal from states and/or liquidation of entities, 2) tax matters involving severance and other payments during the bankruptcy and wind down, and 3) any related guidance and advice. McGladrey will also assist in preparing tax related disclosures for any disclosure statement filed in connection with a plan of reorganization or plan of liquidation filed in the Debtors' Chapter 11 bankruptcy cases. McGladrey's services will be billed at McGladrey's standard rates which are: Partner $572 Director $317-$459 Manager $257-$405 Staff $130-$180 McGladrey has informed the Debtors that it is (a) a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b), and (b) does not hold or represent an interest adverse to the Debtors' estates. In addition, to the best of its knowledge, neither McGladrey, nor any of its employees, has any connection with the Debtors, its creditors, equity holders, or any other parties-in-interest (as reasonably known to McGladrey) or their respective attorneys and accountants, or the Office of the United States Trustee for the District of Delaware, or any person employed in the office of the United States Trustee. About Monitor Company Group Monitor Company Group LP -- http://www.monitor.com/-- is a global consulting firm with 1,200 personnel in offices across 17 countries worldwide. Founded in 1983 by six entrepreneurs, and headquartered in Cambridge, Massachusetts, Monitor advises for- profit, sovereign, and non-profit clients on growing their businesses and economies and furthering their charitable purposes. Monitor and several affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 12-13042 to 12-13062) on Nov. 7, 2012. Judge Hon. Christopher S. Sontchi presides over the case. Pepper Hamilton LLP and Ropes & Gray LLP serve as the Debtors' counsel. The financial advisor is Carl Marks Advisory Group LLC. Epiq Bankruptcy Solutions, LLC is the claims and noticing agent. The petitions were signed by Bansi Nagji, president. Bank of America is represented in the case by Jinsoo Kim, Esq., and Timothy Graulich, Esq., at Davis Polk & Wardwell LLP; and Mark D. Collins, Esq., at Richards Layton & Finger PA. J. Gregory Milmoe, Esq., and Shana A. Elberg, Esq., at Skadden Arps Slate Meagher & Flom LLP in New York; and Mark Chehi, Esq., and Christopher DiVirgilio, Esq., at Skadden Arps in Delaware, represent Deloitte Consulting LLP. Caltius Partners IV LP; Caltius Partners Executive IV, LP; and CP IV Pass-Through (Monitor) LP are represented by John Sieger, Esq., at Katten Muchin Rosenman LLP. Monitor's consolidated unaudited financial statements as of June 30, 2012, which include the assets and liabilities of non- Debtor foreign subsidiaries, reflected total assets of roughly $202 million (including $93 million in current assets) and total liabilities of roughly $200 million. Monitor filed for bankruptcy to sell substantially all of their businesses and assets to Deloitte Consulting LLP, a Delaware registered limited liability partnership and DCSH Limited, a UK company limited by shares, subject to higher or otherwise better offers. The base purchase price set forth in the Stalking Horse Agreement is $116.2 million, plus (i) assumption of certain liabilities and (ii) certain cure costs for assumed contracts. The Stalking Horse Agreement provides for the Stalking Horse Bidder to receive a combined breakup fee and expense reimbursement of $4 million. The Debtors propose to hold an auction on Nov. 28, 2012, at the offices of the Sellers' counsel, Ropes & Gray LLP in New York. Closing of the deal must occur by the earlier of (i) 30 days following entry of the Sale Order and (ii) Feb. 28, 2013. MT. VERNON PROPERTIES: Court Dismisses Chapter 11 Case ------------------------------------------------------ The U.S. Bankruptcy Court has dismissed the chapter 11 case of Mt. Vernon Properties, LLC. As reported by the Troubled Company Reporter on Oct. 10, 2012, Mt. Vernon Properties sought case dismissal, saying its assets have since been liquidated or disbursed to pay the lenders and expenses of the Chapter 11 case. The properties have been sold and the Debtor has no assets with which to formulate and confirm a plan. The Court dismissed the case pursuant to an order dated Nov. 5. Mt. Vernon Properties, LLC, based in Baltimore, Maryland, owned many parcels of real property located in Baltimore City that the Debtor operated as multi-family rental properties. The Company filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 11-24801) on July 18, 2011. Judge David E. Rice presides over the case. Aryeh E. Stein, Esq., at Meridian Law, LLC, in Baltimore, served as bankruptcy counsel. The Debtor disclosed $10,237,448 in assets and $15,064,059 in liabilities as of the Chapter 11 filing. The petition was signed by Ronald Persaud, managing member of Mt. Vernon Properties II LLC, the Debtor's sole member. MW GROUP: Court Sets Jan. 16 DS Hearing on Bank of America Plan --------------------------------------------------------------- Bank of America, N.A., successor by merger to LaSalle Bank National Association , has filed a disclosure statement in conjunction with its Chapter 11 Plan of Liquidation for Debtor MW Group, LLC. The hearing to consider approval of the disclosure statement will be held on Jan. 16, 2013, at 9:30 a.m. The last date to file and serve written objections to the disclosure statement pursuant to Rule 3017(s) is fixed as Jan. 9, 2013. Two separate plans of reorganization have been proposed for Debtor's bankruptcy estate -- (1) the Bank of America Plan and (2) the Plan of Reorganization submitted by Debtor. The Court, however, can confirm only one Plan. The Bank Plan Claims in Class 1 (Allowed Secured Claim), Class 2 (Allowed Unsecured Claims)and Class 3 (Insider Claims) are impaired under the Bank Plan, and therefore, Holders of Class 1, Class 2 and Class 3 Allowed Claims are entitled to vote to accept or reject the Bank Plan. Allowed Class 4 Interests will receive no distribution under the Bank Plan and shall retain no property whatsoever under the Bank Plan. Holders of Class 4 Claims are deemed to have rejected the Bank Plan by virtue of Bankruptcy Code Section 1126(g) and is not entitled to vote to accept or reject the Bank Plan. Bank of America holds a secured claim totaling at least $5,725,420.28. Under the Bank Plan, Bank of America has agreed to have its secured claim bifurcated into (a) a $5,300,000 secured claim and (b) a $425,420.28 deficiency claim. Further, pursuant to the Bank Plan, Bank of America has agreed to have its Bank Secured Claim be deemed satisfied upon receipt of payment of $5,300,000 from the Cash Collateral in possession of the Trustee and/or Net Sale Proceeds from the Sale of Debtor's real property, including (a) that certain real property consisting of 36.5 acres of vacant land, (b) the 48 condominium units in the Marlborough Woods Condominium Association for rent, (c) the 200 apartments known as Weyland and Weyland II, and (d) all improvements and personal property located thereon or relating thereto. On the Effective Date of the Bank Plan, all of Debtor's Property, including the Real Property, will be deemed to be property of the Trust, as managed by Trustee. Trustee, on behalf of the Trust, will hold title to the Real Property and market and sell the same as soon as reasonably practicable, but no later than six (6) months after the Effective Date. Pursuant to the Bank Plan, Bank of America has agreed to subordinate its Bank Deficiency Claim to all other Allowed Claims. If the Net Sale Proceeds are less than the Bank Secured Claim amount, then Bank of America will subordinate its remaining unpaid portion of its Bank Secured Claim, along with its Bank Deficiency Claim totaling approximately $425,420.28, to all other Allowed Claims. Further, under the Bank Plan, Bank of America has agreed to allow Trustee to utilize Bank of America's Cash Collateral to ensure that each Holder of an Allowed General Unsecured Claim will receive a 100% distribution on their respective Allowed General Unsecured Claims. Bank of America has not agreed, however, to allow its Cash Collateral to be used to pay the Allowed Insider Claims. According to papers filed with the Court, all Holders of Allowed Claims (excluding Bank of America as the Holder of the Bank Deficiency Claim) will be paid more under the Bank Plan than the Debtor Plan or in a Chapter 7 liquidation. Irrespective of the actual value of the Real Property or the amount of Net Sale Proceeds, Holders of Allowed General Unsecured Claims will receive 100% distributions from the Net Sale Proceeds and/or Cash Collateral. To administer payments to Holders after confirmation, the Bank Plan provides for the formation of a liquidating trust (the "Trust" under the Bank Plan). An individual designated by Bank of America and approved by the Bankruptcy Court will act as the trustee (the "Trustee" under the Bank Plan) of the Trust. Trustee, on behalf of the Trust, will liquidate Debtor's Property, including the Real Property, and will retain the right to pursue all Causes of Action. Bank of America, to recover on its Bank Deficiency Claim will be able to recover from any Cash that may remain after the Sale of Debtor's Property and payment on all other Allowed Claims. A copy of the Bank Disclosure Statement is available at: http://bankrupt.com/misc/mwgroup.doc223.pdf The Debtor Plan Bank of America has previously objected to the Debtor Disclosure Statement of the Debtor Plan, and the Bankruptcy Court previously did not approve the Debtor Disclosure Statement and ordered the filing of an amended disclosure statement. On Nov. 16, 2012, the Debtor submitted a Disclosure Statement explaining its First Amended Plan of Reorganization dated Nov. 16, 2012. The Debtor segregates the various Claims and Interests into 8 Classes: Estimated Description Voting Status Recovery ----------- ------------- --------- Class 1 Priority Non-Tax Claims Impaired; Entitled 100% to Vote Class 2 Secured Tax Claims Impaired; Entitled 100% to Vote Class 3 Secured Claim of BOA Impaired; Entitled 100% to Vote Class 4 General Unsecured Claims Impaired; Entitled 100% to Vote Class 5 Unsecured Claim of the EPA Impaired; Entitled 100% to Vote Class 6 Insider Unsecured Claims Impaired; Entitled 100% to Vote Class 7 Employee Unsecured Claims Not Impaired; Not 100% Entitled to Vote Class 8 Membership Interests Not Impaired; Not 100% Entitled to Vote The Secured Claim of Bank of America in Class 3 will be restructured over a 7 year period. The Debtor estimates that the BOA Allowed Secured Claim will be approximately $5,700,000. Upon confirmation of the Plan, the BOA debt will be reamortized over a 25 year term at an interest rate of 3.25% per annum. Payments on account of this claim will be made from the revenues and operations of the Reorganized Debtor. Each holder of an Allowed General Unsecured Claim in Class 4 will be paid in Cash, in full, on the Effective Date, as otherwise agreed upon by the Debtor and holder of a General Unsecured Claim, or in deferred cash payments with interest from the Petition Date at the rate of 3.25% per annum, in equal monthly installments of principal and interest sufficient to fully amortize the outstanding indebtedness over a period of 12 months after the Effective Date. The Allowed Unsecured Claims of the Debtor's insiders in Class 6 will be paid in full under the Plan. Each holder of an Allowed Class 6 Claim will be paid in full, in Cash, with interest upon the sale or refinance of the Property. Interest will accrue on the principal balance of the Allowed Insider Unsecured Claims as of the Petition Date at the prime rate of interest plus 2% per annum. The Debtor's members (Class 8) will retain their membership interests in the Debtor because the Plan provides for the payment in full of all senior classes of creditors. The Debtor's members will not receive any distributions until all senior classes have actually been paid in full, provided however, that the Debtor's members may take such interim distributions as necessary to pay their respective income taxes attributable to their ownership of the Debtor. A copy of the Disclosure Statement for the Debtor's First Amended Plan is available at http://bankrupt.com/misc/mwgroup.doc226.pdf About MW Group Charlotte, North Carolina-based MW Group, LLC, filed for Chapter 11 bankruptcy (Bankr. W.D.N.C. Case No. 11-32674) on Oct. 21, 2011. The Debtor scheduled assets of $10.32 million and liabilities of $8.42 million. Donald R. James signed the petition as manager. The Debtor's assets consist of 36.5 acres of vacant land, 48 condo units for rent, and 200 apartments known as Weyland and Weyland II, located in Charlotte, Mecklenburg County, North Carolina. The Debtor is represented by Christine L. Myatt, Esq., at Nexsen Pruet, PLLC, in Greensboro, North Carolina. No official committee of unsecured creditors has been appointed in the case. NAVISTAR INTERNATIONAL: Kenneth Griffin Holds 5.4% Equity Stake --------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Kenneth Griffin and his affiliates disclosed that, as of Dec. 24, 2012, they beneficially own 4,348,428 shares of common stock of Navistar International Corporation representing 5.4% of the shares outstanding. A copy of the filing is available for free at http://is.gd/1lxCoX About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The Company also provides truck and diesel engine parts and service. Another affiliate offers financing services. Navistar incurred a net loss attributable to the Company of $3.01 billion for the year ended Oct. 31, 2012, compared with net income attributable to the Company of $1.72 billion during the prior year. The Company's balance sheet at Oct. 31, 2012, showed $9.10 billion in total assets, $12.36 billion in total liabilities and a $3.26 billion total stockholders' deficit. * * * In the Aug. 3, 2012, edition of the TCR, Moody's Investors Service lowered Navistar International Corporation's Corporate Family Rating (CFR), Probability of Default Rating (PDR), and senior note rating to B2 from B1. The downgrade of Navistar's ratings reflects the significant challenges the company will face during the next eighteen months in re-establishing the profitability and competitiveness of its US and Canadian truck operations in light of the failure to achieve EPA certification of its EGR emissions technology, the significant reductions in military revenues and substantially higher engine warranty reserves. As reported by the TCR on June 13, 2012, Standard & Poor's Ratings Services lowered its ratings on Navistar International Corp., including the corporate credit rating to 'B+', from 'BB-'. "The downgrade and CreditWatch placement reflect the company's operational and financial setbacks in recent months," said Standard & Poor's credit analyst Sol Samson. In the Sept. 19, 2012, edition of the TCR, Fitch Ratings has downgraded the Issuer Default Ratings (IDR) for Navistar International Corporation (NAV) and Navistar Financial Corporation (NFC) to 'CCC' from 'B-'. The rating Outlook is Negative. The rating downgrades and Negative Rating Outlook reflect the company's heightened liquidity risk and negative manufacturing free cash flow (FCF) which could continue into 2013. NEP INC: Moody's Assigns 'B2' CFR; Outlook Stable ------------------------------------------------- Moody's Investors Service assigned B2 corporate family and probability of default ratings to NEP/NCP Holdco, Inc. (NEP), a B1 to its first lien credit facility, and a Caa1 to its second lien credit facility. The transaction consists of a $60 million first lien revolver (undrawn), a $455 million first lien term loan, and a $165 million second lien term loan. Proceeds, together with an approximately $200 million cash equity contribution from Crestview Partners and rollover equity from management, repaid existing debt and funded the purchase of NEP from prior owner American Securities LLC. NEP provides services and equipment for remote television production, studio production, video display and live-to-web event production. Its major customers include television networks such as ESPN, and key events it supports include The Super Bowl, the Olympics and NASCAR races, as well as entertainment shows such as American Idol and The Voice. The outlook is stable and a summary of the action follows. NEP/NCP Holdco, Inc Assigned B2 Corporate Family Rating Assigned B2 Probability of Default Rating $60M First Lien Revolver, Assigned B1, LGD3, 36% $455M First Lien Term Loan, Assigned B1, LGD3, 36% $165M Second Lien Term Loan, Assigned Caa1, LGD5, 88% Outlook, Stable RATINGS RATIONALE The capital intensity of the business combined with significant interest expense related to the debt load leaves NEP with minimal free cash flow (projected at less than 5% of debt over the next several years), which drives the B2 corporate family rating. The weak capital structure, including leverage in the mid 5 times debt-to-EBITDA pro forma for the transaction, poses significant risk for a small company seeking to expand through both acquisitions and organic growth in related segments and new geographies. Nevertheless, the company's leading position within its niche business facilitates good client relationships as well as access to potential acquisitions, and its long term contractual relationships with key broadcast networks and cable channels provide some measure of cash flow stability. These factors mitigate some of the risk related to scale and execution, as does NEP's track record of acquiring and integrating smaller companies without negatively impacting the credit profile. Given the sponsor ownership, the potential for future leveraging events, such as dividends or an exit through the sale of the company, constrains the rating. NEP's fleet of mobile broadcast trucks and engineering expertise provides for a strong value proposition to its customers and also lends asset value, supporting the rating. Furthermore, NEP facilitates the viewing of live events, a service Moody's considers key to content producers and content distributors, which positions the company well regardless of how the consumption and delivery of media evolves and therefore suggests sustainability of the cash flow. The stable outlook assumes leverage in the low to mid 5 times debt-to-EBITDA range, modestly positive free cash flow, and the maintenance of adequate or better liquidity. The stable outlook incorporates tolerance for continued modest acquisitions in line with the historic pattern, provided these do not cause a material negative impact on the operating or credit profile. The lack of scale and sponsor ownership limit upward ratings momentum. However, Moody's would consider a positive rating action with expectations for sustainable leverage around 4 times debt-to- EBITDA and sustainable positive free cash flow in excess of 5% of debt. Deterioration of the liquidity profile or expectations for sustained leverage of 6 times debt-to-EBITDA or higher or sustained negative free cash flow would likely have negative ratings implications. NEP'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 NEP's core industry and believes NEP's ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. NEP/NCP Holdco, Inc. provides outsourced media services necessary for the delivery of live and broadcast sports and entertainment events to television and cable networks, television content providers, and sports and entertainment producers. The company's majority owner is Crestview Partners and it maintains its headquarters in Pittsburgh, Pennsylvania. Annual revenue pro forma for acquisitions is approximately $350 million. NEUSTAR INC: Moody's Rates $325-Mil. Term Loan A 'Ba1' ------------------------------------------------------ Moody's Investors Service has assigned a Ba1 (LGD2-27%) rating to Neustar, Inc.'s proposed $325 million Term Loan A due 2018, a Ba1 (LGD2-27%) rating to its proposed $200 million revolver due 2018 and a Ba3 (LGD5-82%) rating to its proposed $300 million senior unsecured notes due 2023. The proceeds will be used to refinance the existing Term Loan B and pay related fees and expenses. Concurrently, Moody's affirmed the Company's Ba2 corporate family rating and upgraded the Companys's probability of default rating to Ba2 from Ba3 to reflect the change in the refinanced capital structure. The outlook remains stable. Moody's has taken the following rating actions: Issuer: Neustar, Inc. Upgrades: Probability of Default Rating, Ba2, from Ba3 Assignments: $325 million Senior Secured Term Loan A due 2018, Assigned Ba1, LGD 2-27% $200 million Senior Secured Revolver due 2018, Assigned Ba1, LGD 2-27% $300 million Senior Unsecured Notes due 2023, Assigned Ba3, LGD 5-82% Ratings Rationale Neustar's Ba2 corporate family rating reflects its stable, contracted, recurring revenue, its low leverage, very good liquidity and strong free cash flows. These strengths are offset by Neustar's modest scale, its reliance upon a single contract for approximately half of its revenues and the long-term potential impact of VoIP telephony. The rating also incorporates the risk of future debt-funded acquisitions or share repurchase. The new proposed capital structure will consist of a five-year $525 million senior secured credit facility (comprised of a $200 million revolver and a $325 million Term Loan A) and ten-year $300 million senior unsecured notes. The secured credit facility is rated Ba1 (LGD2 -- 27%), one notch higher than Neustar's Ba2 corporate family rating, reflecting its senior ranking in the capital structure and the loss absorbtion provided by the Ba3 (LGD5-82%) rated unsecured notes. Moody's expects Neustar to maintain very good liquidity over the next 12-18 months supported by $269 million of cash and short term investments on the balance sheet as of 9/30/2012 and its proposed $200 million revolver. Moody's projects that Neustar's cash from operations should be more than sufficient to meet its modest capex obligations and fund continued share buy-backs. The Company has two financial covenant tests: consolidated leverage ratio and consolidated fixed charge coverage ratio. Moody's expects the company to have ample cushion under both covenants governing the credit facilities. The stable rating outlook reflects Moody's expectations that the company will continue to generate strong free cash flows and maintain ample liquidity primarily through the defense of its strong market position within the carrier services market. The stable outlook also reflects Moody's assumption that the contract with the North American Portability Management LLC ("NAPM") will likely be renewed. Moody's could consider a ratings upgrade if leverage (Moody's adjusted) were to trend towards 1.5x to 1.75x on a sustainable basis, while free-cash-flow to debt remained above 20%. Any rating action would also be contingent upon the likelihood of contract renewal with the NAPM and the maintenance of a prudent capital allocation policy. Downward rating pressure could develop if adjusted leverage increases towards 3.0x on a sustainable basis or if FCF/Debt falls below 10%, which may result from future debt-funded acquisitions or share buyback programs. The ratings could also come under pressure if the company experiences a heightened competitive threat within its core business segment. Although highly unlikely to occur, the loss of the NAPM contract could result in a potential multi-notch downgrade. The principal methodology used in rating Neustar was the Global Business & Consumer Service Industry Rating 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. Based in Sterling, VA, Neustar, Inc is the leading provider of information and data services catering to carriers and enterprises. For last twelve month ending in September 30, 2012, Neustar generated approximately $791 million in revenue. NEUSTAR INC: S&P Affirms 'BB' Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB-' issue-level rating and '1' recovery rating to Sterling, Va.-based Neustar Inc.'s proposed $200 million senior secured revolving credit facility due 2018 and $325 million senior secured term loan A. "The '1' recovery rating indicates our expectation for very high (90% to 100%) recovery in the event of payment default. We also assigned a 'BB-' issue-level rating and '5' recovery rating to the company's proposed $300 million senior notes due 2023, to be issued under rule 144A with registration rights. The '5' recovery rating indicates our expectation for modest (10% to 30%) recovery in the event of payment default," S&P said. At the same time, S&P affirmed the 'BB' corporate credit rating on the company and maintained the developing outlook. "The developing outlook is based on our expectation that the vendor selection for the number portability administration center (NPAC) contracts that Neustar currently services will be determined within the next 12 months, and the outcome could lead to an upgrade or downgrade of our ratings," S&P noted. S&P expects the company to use net proceeds from the debt transaction to refinance about $593 million of existing debt, pay about $13 million of related fees and expenses, and add about $19 million of cash to the balance sheet. While we expect the refinancing to lower the company's interest expense and improve free operating cash flow (FOCF), these factors are not sufficient to result in a change to our financial risk assessment, which we view as "intermediate". "Our ratings incorporate the expectation that operating lease-adjusted leverage will remain in the 2x area or below over the next couple of years, with potential improvement dependent on growth from newer business lines," said Standard & Poor's credit analyst Allyn Arden. "The ratings on Neustar also reflect our business risk assessment of "fair," which we base in part on the high near-term predictability of nearly half of Neustar's revenues, which it derives from the NPAC contracts. These include wireline and wireless number portability under seven exclusive contracts through June 2015, managing the allocation of pooled blocks of telephone numbers, and providing other network management services in the U.S. The contracts, with an industry group representing all telecom service providers in the U.S., include fixed fees, as well as some annual escalators," S&P added. "We expect that the company's NPAC services will provide stability and predictability to its overall base of business and associated cash flows over at least the next year. However, we could raise the ratings if the company is able to renew the NPAC contracts on favorable terms because this could provide Neustar with revenue stability for several years beyond 2015 for about half of its business. A ratings upgrade would also be predicated on the company maintaining an "intermediate" financial risk profile, including leverage of about 2x," S&P said. "Conversely, we could lower the ratings if Neustar is unable to renew the NPAC contracts or if it renewed the contracts on significantly less favorable terms than its prior contract. An unfavorable contract could constrain revenue and profitability and could prompt us to revise downward our business and financial risk assessment of the company. We could also lower the ratings if Neustar were to materially modify its financial policy, including substantially increasing its stock repurchase plans or pursuing material debt-financed acquisitions, such that leverage were to increase to the mid-3x area or higher," S&P noted. NNN CYPRESSWOOD: Files for Chapter 11 in Chicago ------------------------------------------------ NNN Cypresswood Drive 25, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-50952) on Dec. 31, 2012, in Chicago. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), has principal assets located at 9720 & 9730 Cypresswood Drive, in Houston, Texas. The Debtor valued its assets and liabilities at less than $50 million. NNN LENOX PARK 9: Creditor Wants Case Transfer or Dismissal ----------------------------------------------------------- NNN Lenox Park 9, LLC, owner of a fractional interest in two office buildings in Memphis, Tennessee, sought Chapter 11 protection to stop a non-judicial foreclosure sale of the properties. U.S. Bank National Association -- as trustee, successor to Wells Fargo Bank, N.A., as Trustee, for the registered holders of Citigroup Commercial Mortgage Trust 2007-C6, Commercial Mortgage Pass-Through Certificates, Series 2007-C6, acting by and through CWCapital Asset Management LLC, solely in its capacity as Special Servicer -- retaliated, asking for a transfer of the case to Tennessee or an immediate dismissal of the case. Case Dismissal Bid CWCapital filed with the Bankruptcy Court a motion for an order dismissing NNN Lenox Park 9's Chapter 11 case. CWCapital points out that the Debtor's sole asset in this single asset real estate case is a 2.795% tenant in common interest in Lenox Park Buildings A & B. The remaining 97.205% tenant in common interests in the Property are held in varying percentages by approximately 32 separate non-debtor entities. On the eve of a non-judicial foreclosure in Memphis, Tennessee, the Debtor filed the Chapter 11 case in an attempt to prevent the Holder from exercising its contractual right to foreclose on property interests that belong to non-debtors. "The Debtor's chapter 11 petition (unaccompanied by any applications or motions) does nothing more than inequitably subject [the] Holder to irreparable harm. This case could not possibly achieve any legitimate objective of chapter 11, since the Debtor has no valid reorganizational purpose in this filing. Where the debtor only owns a piece of paper that is pledged to a creditor, there is no reorganizational purpose," CWCapital tells the Court. "The Debtor filed the Petition in bad faith solely to frustrate Holder from exercising its legal rights. The Debtor is using the bankruptcy forum not to reorganize for the benefit of employees (which the Debtor has none) and creditors; rather, the Debtor is using this Court to limit the exposure of its principals by preserving tax benefits for remote investors. This represents a patent abuse of the bankruptcy forum and bears all the indicia of a bad faith filing of a chapter 11 case, which is "cause" for dismissal pursuant to 11 U.S.C. Sec. 1112(b)." The minute order for the Dec. 14 hearing says, "Matter continued - date to be determined at a later date" Transfer of Case Venue Sought CWCapital also filed a separate motion asking the U.S. Bankruptcy Court for the Southern District of Indiana to transfer the venue of NNN Lenox Park 9, LLC's Chapter 11 case to the Western District of Tennessee, Western Division. CWCapital points out that the Debtor's sole asset is a fractional ownership of a property in Tennessee. The receiver, Commercial Advisors Asset Services, LLC, is a Memphis-based commercial real estate firm. The Debtor has no actual business operations or employees. Most, if not all of the Debtor's creditors are located in or around Tennessee and all debt owed by the Debtor relates to the property. Venue in Indiana is based solely on the location of the Debtor's sole member. Proceeding in the U.S. Bankruptcy Court for the Southern District of Indiana creates hardship on the Debtor's Tennessee creditors and impedes the Tennessee non-judicial foreclosure process, CWCapital contends. The minute order for the Dec. 14 hearing says, "Matter Taken under Advisement. Debtor permitted to file a response. Court to rule by next week." The Court has not entered a ruling as of Jan. 7. Debtor Wants Stay Enforced Just days after filing for bankruptcy NNN Lenox filed a motion to enforce the stay. It said that R. Spencer Clift, III, the substitute trustee, was notified Dec. 6 that the sale could not proceed because of the stay provisions of 11 U.S.C. Sec. 362. Mr. Clift said that the sale was adjourned but moving forward. "The law is clear. Adjournment of a foreclosure sale during the pendency of the automatic stay is not a violation of the automatic stay," CWCapital said, in responding to the stay motion. "Simply stated, the mere act of continuing a foreclosure sale date from week to week in the manner prescribed by state law does not advance the foreclosure process. It merely maintains the status quo. NNN Lenox also filed emergency motions to compel the receiver to turn over books and documents so that it can file the schedules of assets and liabilities as required by 11 U.S.C. Sec. 521. The minute entry for the Dec. 14 hearing says that an agreed entry would be submitted. CWCapital is represented by: R. Spencer Clift, III BAKER, DONELSON, BEARMAN CALDWELL & BERKOWITZ, PC Suite 2000 Memphis, TN 38103 Tel: (901) 577-2216 E-mail: sclift@bakerdonelson.com - and - Timothy M. Lupinacci BAKER, DONELSON, BEARMAN CALDWELL & BERKOWITZ, PC 420 North 20th Street, Suite 1600 Birmingham, AL 35203 Tel: (205) 244-3835 E-mail: tlupinacci@bakerdonelson.com About NNN Lenox New Albany, Indiana-based NNN Lenox Park 9, LLC, owns the undivided 2.795% tenant in common interest in two four-story office buildings located at 3175 Lenox Park Drive & 6625 Lenox Park Drive, Memphis, Shelby County, Tennessee. The Lenox Park Buildings A & B contain 193,029 square footage of office space and 853 surface parking spaces in adjoining parking. NNN Lenox filed a Chapter 11 petition (Bankr. S.D. Ind. Case No. 12-92686) in New Albany, Indiana, on Dec. 4, 2012, on the eve of a non-judicial foreclosure of the Property in Memphis, Shelby County, Tennessee. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated at least $10 million in assets and liabilities. Judge Basil H. Lorch, III, presides over the case. Mubeen Aliniazee, president of Highpoint Management Solutions, LLC, has been named the restructuring officer. Jeffrey M. Hester, Esq., at Tucker Hester, LLC, in Indianapolis, serves as counsel to the Debtor. NNN PARKWAY: Files for Chapter 11 Protection -------------------------------------------- NNN Parkway 400 26, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-24593) in Santa Ana, California, on Dec. 31, 2012. According to the docket, the schedules of assets and liabilities, the statement of financial affairs and other incomplete filings are due Jan. 14, 2013. Dana Point, California-based NNN Parkway estimated assets and debts of $10 million to $50 million. NTP MARBLE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: NTP Marble Inc. dba Colonial Marble & Granite 690 Market Street Upper Darby, PA 19082 Bankruptcy Case No.: 13-10087 Chapter 11 Petition Date: January 4, 2013 Court: U.S. Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Stephen Raslavich Debtor's Counsel: Albert A. Ciardi, III, Esq. CIARDI CIARDI & ASTIN, P.C. One Commerce Square 2005 Market Street, Suite 1930 Philadelphia, PA 19103 Tel: (215) 557-3550 Fax: (215) 557-3551 E-mail: aciardi@ciardilaw.com - and ? Jennifer E. Cranston, Esq. Ciardi Ciardi & Astin, P.C. One Commerce Square 2005 Market Street, Suite 1930 Philadelphia, PA 19103 Tel: (215) 557-3550 E-mail: jcranston@ciardilaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/paeb13-10087.pdf The petition was signed by Nikos Papadopoulos, president. OTERO COUNTY HOSPITAL: Accountant Denied Leave to File Late Claim ----------------------------------------------------------------- Bankruptcy Judge Robert H. Jacobvitz denied an Amended Motion for Extension of Time to File a Proof of Claim filed by Jo Ann Pinette, a former employee of Otero County Hospital Association, Inc. The hospital operator objected to the request. Ms. Pinette asks the Court for leave to file a late proof of claim under Fed.R.Bankr.P. 9006(b)(1). Ms. Pinette contends her failure to file a proof of claim on or before the Dec. 21, 2011 Claims Bar Date was a result of excusable neglect. Otero counters that Ms. Pinette is not entitled to relief under Rule 9006(b)(1) because her failure to file a proof of claim was the result of a mistake of law rather than excusable neglect. The Court agreed with the Debtor. Ms. Pinette, a resident of Alamogordo, was employed by Otero in its accounting department for several years until Otero terminated her employment on July 6, 2011. A copy of the Court's Jan. 4, 2013 Memorandum Opinion is available at http://is.gd/ET26LGfrom Leagle.com. About Otero County Hospital Otero County Hospital Association Inc. filed for Chapter 11 protection (Bankr. D. N.M. Case No. 11-13686) in Albuquerque, New Mexico, on Aug. 16, 2011. The Alamogordo, New Mexico-based nonprofit developed and operates the Gerald Champion Regional Medical Center. GCRMC serves a total population of approximately 70,000 people. Otero County Hospital Association also does business as Mountain View Catering. Judge Robert H. Jacobvitz presides over the case. Craig H. Averch, Esq., and Roberto J. Kampfner, Esq., at White & Case, LLP, in Los Angeles; and John D. Wheeler, Esq., at John D. Wheeler & Associates, PC, in Alamogordo, New Mexico, serve as bankruptcy counsel. Kurtzman Carson Consultants, LLC, serves as claims agent. The Debtor disclosed $124,186,104 in assets and $40,506,759 in liabilities as of the Chapter 11 filing. Alice Nystel Page, U.S. Trustee for Region 20, appointed five creditors to serve on the Official Committee of Unsecured Creditors of the Debtor. Gardere Wynne Sewell LLP serves as the Committee's counsel. The Committee tapped James Morell of JCM Advisors, LLC, as healthcare management consultant. The U. S. Trustee appointed E. Marissa Lane PLLC as patient care ombudsman on Sept. 13, 2011. No trustee or examiner has been requested or appointed in the Chapter 11 Case. The Debtor's Third Amended Plan of Reorganization dated June 20, 2012, provides that the Plan will resolve the Trust Personal Injury Claims on a consensual basis; resolve all issues between the Debtor and Quorum Health Resources, LLC well as the Debtor and Nautilus Insurance Company on a consensual basis; satisfy the claims of Bank of America in full; provide for the payment of trade and other unsecured creditors in full; and allow the Debtor to emerge from chapter 11 in a strong position and with the ability to satisfy the medical needs of Otero County. The Plan contemplates that the Debtor will obtain exit financing to the extent necessary to satisfy the claims of its primary secured creditor, Bank of America, and provide the Debtor with sufficient capital to meet its other obligations under the Plan and continue its normal operations. On June 21, 2012, the Court entered an order approving the disclosure statement and establishing procedures relating to confirmation of the plan. Following a confirmation hearing held Aug. 3, 2012, the Court entered an order confirming a fourth amended plan, which contained non-material modifications to the third amended plan. POWERSCREEN OF CHICAGO: Case Summary & Creditors List ----------------------------------------------------- Debtor: Powerscreen of Chicago, Ltd. 1212 S. Naper Boulevard, Suite 119 Naperville, IL 60540 Bankruptcy Case No.: 13-00138 Chapter 11 Petition Date: January 3, 2013 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Carol A. Doyle Debtor's Counsel: John J. Lynch, Esq. LAW OFFICES OF JOHN J. LYNCH, P.C. 801 Warrenville Road, Suite 152 Lisle, IL 60532 Tel: (630) 960-4700 Fax: (630) 960-4755 E-mail: jjlynch@jjlynchlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 11 unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ilnb13-00138.pdf The petition was signed by Niall Horan, president. ROCKIES EXPRESS: Moody's Cuts CFR/PDR to 'Ba2'; Outlook Stable -------------------------------------------------------------- Moody's Investor Service downgraded Rockies Express Pipeline LLC's (REX) Corporate Family Rating to Ba2 from Ba1. Moody's also downgraded the company's existing senior notes ratings to Ba2 from Ba1 and assigned a Ba2 rating to the proposed offering of $525 million senior notes due 2019. The outlook was changed to stable from negative. The proceeds from the senior notes offering will be used to redeem maturing senior notes. "We consider this refinancing to be a missed opportunity for debt reduction," commented Pete Speer, Moody's Vice President. "The ratings downgrade reflects Rockies Express' continued high financial leverage and the uncertainties regarding its earnings power when most of its current customer contracts expire in 2019." Issuer: Rockies Express Pipeline LLC Ratings Downgraded: Corporate Family Rating to Ba2 from Ba1 Probability of Default Rating to Ba2 from Ba1 Senior Unsecured Regular Bond/Debenture ratings to Ba2, LGD 4 (50%) from Ba1 LGD4 (50%) Ratings Assigned: $525 million senior notes due 2019 rated Ba2, LGD 4 (50%) Outlook Actions: Outlook, Changed to Stable From Negative Ratings Rationale REX's Ba2 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 (Debt/EBITDA of 5.6x at September 30, 2012) and the long-term challenges to its competitive position posed by increasing gas production from the Marcellus Shale. 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) replaced KMP as a sponsor and operator with a lower rated private equity sponsored entity. The transaction also indicated that REX's current fair value is less than its cost to build, validating concerns regarding the future tariffs that REX will receive when its original customer contracts expire in 2019. Although REX's cash flows are largely sheltered from these competitive pressures through its long-term contracts, the pipeline has about 10% of its capacity that is likely to require re-contracting in late 2014. This could result in a decrease in earnings absent successful execution of organic expansion projects over the next two years. The stable outlook reflects the contractually supported earnings profile through late 2014 and Moody's expectation that capital projects will be funded through free cash flow or partner capital contributions to avoid further significant increases in financial leverage. If Debt/EBITDA were to increase above 6x then the ratings could be downgraded. An upgrade of REX's ratings is unlikely given the uncertainties regarding REX's earnings post 2014 and the limited opportunities for debt reduction prior to 2015. In order for an upgrade to Ba1 to be considered, Debt/EBITDA would have to be reduced to under 5x. The Ba2 ratings on the proposed $525 million of senior notes and the existing senior notes reflect the overall probability of default of REX, to which Moody's assigns a PDR of Ba2, and a loss given default of LGD 4 (50%). The company has a committed $100 million unsecured revolving credit facility. Since the revolver and senior notes are all unsecured, the senior notes are rated the same as the company's Ba2 CFR under Moody's Loss Given Default Methodology. The principal methodology used in rating Rockies Expres Pipeline 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 Wyoming and Colorado to Ohio, owned by subsidiaries of Tallgrass Energy Partners, Phillips 66 (Baa1 stable) and Sempra Energy (Baa1 stable). ROVI CORP: RES Unit's Sale No Impact on Moody's 'Ba3' CFR --------------------------------------------------------- Moody's Investors Service said Rovi Corporation's intent to pursue the sale of its cash-absorptive Rovi Entertainment Store (RES) business, which encompasses Rovi's on-demand video entertainment delivery solutions, is credit positive. However, Rovi's ratings are not affected at the present time as the company continues to face challenges in offsetting the decline in its legacy Analog Copy Protection business through growth in new product categories. As reported by the Troubled Company Reporter on July 24, 2012, Moody's Investors Service said Rovi Corporation's weaker-than- expected cash flow generation for 2012 and the resultant delay in achieving previously committed deleveraging target of less than 4.0x (total debt to company's adjusted pro forma EBITDA) are credit negative and leave very little margin for execution missteps in the current Ba3 Corporate Family Rating. Headquartered in Santa Clara, California, Rovi Corporation provides integrated solutions to media entertainment market. The company has a broad patent portfolio spanning display of and interaction with TV program guides. SEARS HOLDINGS: Chairman Ed Lampert Assumes CEO Post ---------------------------------------------------- Dana Mattioli, writing for The Wall Street Journal, reports that hedge fund billionaire Edward S. Lampert will become CEO at the struggling department store chain Sears Holdings Corp., succeeding Lou D'Ambrosio, who led the company for around two years. Mr. D'Ambrosio's departure was influenced by a close family member's medical condition, people familiar with the matter said. Mr. Lampert is serving as chairman of the company. WSJ notes Mr. Lampert, the former Goldman Sachs star, created the company in 2005 by merging Sears and Kmart. But he lacks a retail background and has been criticized for skimping on investments at the chains' base of 2,000 stores and turning off customers. His task will be to stem the decline in sales and cut costs to preserve Sears' cash flow. "There's a very big difference between being a CEO of a company and a shareholder or chairman of a company," said Mr. Lampert, whose hedge fund ESL Investments Inc. controls 56.2% of Sears shares, according to WSJ. But, he said, his longtime board seats at Autozone Inc. and AutoNation Inc. have taught him a lot about retailing. Mr. Lampert gained control of Kmart in 2003 after the company emerged from bankruptcy protection, then combined it with Sears in an $11.5 billion deal. WSJ relates that Sears lost $441 million in the nine months ended October, as its revenue fell by $1.5 billion from a year earlier to $27.6 billion. On Monday, the company said it expected to lose another $280 million to $360 million in the quarter ending Feb. 2 amid pension costs. Mr. D'Ambrosio was an executive with International Business Machines Corp., before he was named CEO of Sears in early 2011. About Sears Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- operates 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. SILIKEN MANUFACTURING: Files Petition for Relief Under Ch. 11 ------------------------------------------------------------- Siliken Manufacturing, USA, Inc., and its wholly-owned subsidiary, Siliken USA, Inc. on Jan. 8 filed concurrent petitions for relief under chapter 11 of the Bankruptcy Code. The petitions were filed in the United States Bankruptcy Court for the Southern District of California. The Siliken Companies are represented by Cooley, LLP (Ali Mojdehi and Janet Gertz), general bankruptcy counsel to the Companies. The Siliken Companies are dedicated to the development, sale, and marketing of PV solar energy products. "It has become increasingly clear that the Siliken Companies will not have the capital resources they need to move forward with their business strategy due to the continued weak U.S. economy, along with an environment of continued downward price pressures for PV solar energy products and the lack of outside investment sources. In light of these challenges, and with the authorization of their respective boards of directors, the Siliken Companies have filed petitions for relief under Chapter 11 of the Bankruptcy Code in order to best maximize value for their creditors," said Scott Sporrer, Vice President and General Manager of Siliken USA. In October 2012, the Siliken Companies engaged Richard M. Kipperman of Corporate Management, Inc. as Chief Restructuring Officer. With the assistance of Mr. Kipperman, the Siliken Companies have been evaluating their restructuring options and have concluded that seeking protection under the Bankruptcy Code was the best means of providing value to their constituents. "We believe that utilizing the protections of chapter 11 of the Bankruptcy Code will serve the interests of the Siliken Companies' creditors and other constituencies to the greatest extent possible and that the assets of the Siliken Companies' estates are maximized to provide for the maximum possible return," commented Mr. Kipperman. In an effort to reduce costs, the Siliken Companies have eliminated the balance of their workforce over the past year. The Companies will seek to monetize the remaining inventory and equipment during the chapter 11 proceedings and to equitably distribute the proceeds. About The Siliken Companies Siliken Manufacturing USA, Inc. is a wholly-owned subsidiary of Siliken, S.A., Valencia, Spain, which has itself sought relief from creditors and is pursuing restructuring alternatives under the laws of Spain. The Siliken Companies are part of the Siliken Group, which develops solutions for the renewable energy industry, especially in the area of photovoltaic solar energy. It manufactures and distributes photovoltaic modules and components. The Siliken Group has module production plants in Spain and Romania, next to its own purification plant for solar-grade silicon in Spain. The cases are styled, In re Siliken Manufacturing, USA, Inc., Case No. 13-00119-11 and In re Siliken USA, Inc., Case No. 13-00120-11, which are pending in the United States Bankruptcy Court for the Southern District of California. For additional information about the reorganization please go to: http://www.omnimgt.com/SilikenManufacturingUSAor send an e-mail to siliken.usa@siliken.com SENTINEL MANAGEMENT: INTL FCStone to Challenge Court Ruling ----------------------------------------------------------- INTL FCStone Inc. on Jan. 8 disclosed that it is considering its legal alternatives, including appeal, in response to the judgment rendered by the U.S. District Court, Northern District of Illinois, on January 4, 2013 against its subsidiary, FCStone, LLC ("FCStone"), in the matter of Frederick J. Grede (as Liquidation Trustee of the Sentinel Liquidation Trust) vs FCStone, LLC. In the view of FCStone, a futures commission merchant regulated by the CFTC, the court's ruling, if upheld, could undermine the integrity of the futures industry's system of segregated customer accounts and the CFTC regulations which are designed to protect those accounts from the claims of creditors. Unless successfully appealed, the court's ruling would result in a net pre-tax loss to FCStone of between $4 million and $6 million. FCStone is committed to the protection of its customers, and the court's ruling will not affect its customers in any way. The case arises from the 2007 bankruptcy of Sentinel Management Group, Inc. ("Sentinel"), an SEC-registered investment adviser and CFTC-regulated futures commission merchant. Sentinel, in accordance with CFTC regulations, invested customer funds on behalf of FCStone and many other futures commission merchants. Sentinel also invested funds deposited by hedge funds and other securities investors. In August 2007, Sentinel declared bankruptcy. Shortly thereafter, a Chicago federal district court ordered Sentinel to return all remaining customer funds which had been deposited by the futures commission merchants, including FCStone, and Sentinel did so. At that time, FCStone itself covered any account shortfall in order to ensure that its customers suffered no harm due to the insolvency of Sentinel. Approximately a year later, the Sentinel bankruptcy trustee filed virtually identical lawsuits against FCStone and approximately a dozen other futures commission merchants, seeking a return of the August 2007 distribution of customer funds. The trustee has never alleged any wrongdoing on the part of FCStone or the other futures commission merchants. Rather, the trustee simply claimed that the futures commission merchants, including FCStone, received a greater percentage of their account balances than the other Sentinel customers. The trustee has argued that FCStone and the other futures commission merchants should receive, from the bankruptcy estate, the same percentage as the other Sentinel customers, and no more. On January 4, 2013, in a "test case" decision, the federal district court ruled that FCStone should return its original distribution of $15.6 million and receive a revised distribution based on an equal distribution to all of Sentinel's customers, which would result in a net pre-tax loss to FCStone of between $4 million and $6 million. "We are surprised and disappointed by the court's ruling. In the wake of MF Global and other futures commission merchant bankruptcies, we believe that the regime of heightened protection for futures market customer funds has special relevance, not just to FCStone, but the industry as a whole," said Sean O'Connor, CEO of INTL FCStone. "We are considering all of our legal alternatives at this point, including the possibility of an appeal." About INTL FCStone Inc. INTL FCStone Inc. (INTL) -- http://www.intlfcstone.com-- provides execution and advisory services in commodities, currencies and international securities. INTL's businesses, which include the commodities advisory and transaction execution firm FCStone Group, serve more than 20,000 commercial customers in more than 100 countries through a network of offices in twelve countries around the world. About Sentinel Management Based in Northbrook, Illinois, Sentinel Management Group Inc. -- http://www.sentinelmgi.com/-- was a full service firm offering a variety of security solutions. The Company filed a voluntary Chapter 11 petition on Aug. 17, 2007 (Bankr. N.D. Ill. Case No. 07-14987). Ronald Barliant, Esq., Randall Klein, Esq., and Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black Rosenbloom & Moritz, Ltd., represent the Debtor. Lawyers at Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represent the Official Committee of Unsecured Creditors. When the Debtor sought bankruptcy protection, it estimated assets and debts of more than $100 million. On Aug. 28, 2007, the Court approved Frederick Grede as the Debtor's Chapter 11 Trustee. Marc I. Fenton, Esq., at DLA Piper US LLP, and Vincent E. Lazar, Esq, at Jenner & Block LLP, represent the Chapter 11 Trustee. The Court confirmed a plan of liquidation for Sentinel on Dec. 15, 2008, and Mr. Grede is managing the liquidation. SOUTH LAKES DAIRY: Files Schedules of Assets and Liabilities ------------------------------------------------------------ South Lakes Dairy Farm filed its schedules of assets and liabilities in the U.S. Bankruptcy Court for the Eastern District of California, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property B. Personal Property $19,447,981 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $19,961,380 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Non-priority $6,232,026 Claims ----------- ----------- TOTAL $19,447,981 $26,193,406 About South Lakes Dairy South Lakes Dairy Farm is a California partnership engaged in the dairy cattle4 and milking business. The partnership filed a bare- bones Chapter 11 petition (Bankr. E.D. Calif. Case No. 12-17458) in Fresno, California on Aug. 30, 2012, disclosing $19.5 million in assets and $25.4 million in liabilities in its schedules. The Debtor said it has $1.97 million in accounts receivable charged to Dairy Farmers of America on account of milk proceeds, and that it has cattle worth $12.06 million. The farm owes $12.7 million to Wells Fargo Bank on a secured note. Bankruptcy Judge W. Richard Lee presides over the case. Jacob L. Eaton, Esq., at Klein, DeNatale, Goldner, Cooper, Rosenlieb & Kimball, LLP, in Bakersfield, Calif., represents the Debtor as counsel. The Debtor tapped A&M Livestock Auction, Inc., to auction livestock. August B. Landis, the Acting U.S. Trustee for Region 17, appointed seven creditors to serve in the Official Committee of Unsecured Creditors. The Official Committee of Unsecured Creditors tapped Blakeley & Blakeley LLP as its counsel. SPECIALTY PRODUCTS: Asbestos Committee Wants Ch. 11 Case Dismissed ------------------------------------------------------------------ The Official Committee of Asbestos Claimants asks the Bankruptcy Court to dismiss Specialty Products Holdings Corp.'s chapter 11 cases as bad faith filings. Natalie D. Ramsey, Esq., at Montgomery, Mccracken, Walker & Rhoads, LLP, tells the Court that the Committee has long questioned the propriety of the bankruptcy cases. It has, however, resisted filing a motion to dismiss based on the Debtors' continued representations to the Court that they intended to seek a consensual plan. However, the positions that the Debtors have taken in the final days before the estimation trial leave no doubt that these cases had no proper purpose when filed and have been maintained to further the Debtors' admitted litigation strategy of limiting their liabilities in ways that could not be done in the tort system. As such, the Committee is now constrained to seek the dismissal of the cases. On the eve of the estimation trial, Ms. Ramsey says the Debtors have revealed their true colors -- that these cases were filed to obtain litigation advantage. In a series of recently filed motions, they have sought to significantly limit their asbestos liability on the basis of positions and theories that they never asserted, and could not obtain on an aggregate basis, in the tort system. With the benefit of hindsight, it is now clear that the goal of the Debtors in and since filing these cases has been to use them as a means of leverage, and an attempt to circumvent the due process rights afforded to personal injury and wrongful death plaintiffs. On Dec. 5, 2012, Ms. Ramsey recalls the Debtors filed two motions seeking declaratory relief limiting their liability -- one seeking a determination that neither of the Debtors have continuing liability for any claims arising as a result of the sale of asbestos-containing products by The Reardon Company, and the other seeking a determination that SPHC does not have liability for any claims arising as a result of the sale of asbestos-containing products by Bondex after it was spun-off from SPHC as a separate company. While portraying the motions as estimation-related motions, the Debtors' actual agenda was much more far-reaching and duplicitous. The Debtors' plan provides that asbestos creditors will be "unimpaired" if they are channeled to a trust funded by the full amount of the Court's estimation determination. The Debtors' Plan also provides that asbestos creditors are deemed to accept the plan and not entitled to vote even on the section 524(g) injunction provided under their plan to not only the Debtors but also to RPM International and all of its family of companies. According to Ms. Ramsey, by first seeking determinations intended to artificially reduce their liability "merely for purposes of estimation," then seeking to impose those determinations through the Debtors' Plan, the Debtors sought to trample on the due process rights afforded to asbestos creditors. The Debtors sought: (1) to avoid jurisprudence holding that this Court may not make binding determinations on future claimants outside of section 524(g) of the Bankruptcy Code, (2) to avoid the specific voting provisions of section 524(g) designed to protect both the present and future asbestos creditors, and (3) to both avoid and cut off the rights of individual asbestos creditors to litigate issues of successor liability and piercing in the tort system. Ms. Ramsey notes the Court has properly opined that the Debtors cannot circumvent the specific requirements of section 524(g), making the Debtors' Plan unconfirmable on its face. There is no question that Bondex is defunct and hopelessly insolvent, and that the Debtors' Plan envisions no future business activity for it. Unless another entity is available to fund its liability, there is no point to estimating its asbestos liability. As the Court correctly observed on Dec. 17, 2012, under the circumstances present in the case and without any legitimate reorganization objective, the proper course is either to dismiss Bondex's bankruptcy case or convert it to a chapter 7 case. 12 As to Debtor SPHC -- a company with assets in excess of $800 million -- according to the Committee, the Debtors would have the Bankruptcy Court find that its aggregate present and future asbestos liability is only about $40 million. Even if those Motions are unsuccessful, the Debtors' expert seeks to depress SPHC's liability to an untenably low figure of about $125 million. Ms. Ramsey contends there can be no other purpose for the continuation of these cases other than to permit the Debtors to seek a 'bankruptcy discount' based upon their "shaped" liability, or to permit them to attempt to obtain settlement leverage by the threat of delay. Since the Court of Appeals for the Third Circuit has plainly ruled that such a litigation purpose is improper, Ms. Ramsey asserts that the Bankruptcy Court should not permit the Debtors to further manipulate the Bankruptcy Code and delay their creditors in pursuing recovery in the tort system. The Asbestos Claimants Committee is represented by: Natalie D. Ramsey, Esq. MONTGOMERY, MCCRACKEN, WALKER & RHOADS, LLP 1105 North Market St., Suite 1500 Wilmington, DE 19801-1201 Tel: (302) 504-7800 Fax: (302) 504-7820 The hearing on the motion is scheduled for Jan. 18, 2013, at 4:00 p.m. About Specialty Products Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM, Inc., is a wholly owned subsidiary of RPM International Inc. The Company is the holding company parent of Bondex International, Inc., and the direct or indirect parent of certain additional domestic and foreign subsidiaries. The Company claims to be a leading manufacturer, distributor and seller of various specialty chemical product lines, including exterior insulating finishing systems, powder coatings, fluorescent colorants and pigments, cleaning and protection products, fuel additives, wood treatments and coatings and sealants, in both the industrial and consumer markets. The Company filed for Chapter 11 bankruptcy protection on May 31, 2010 (Bankr. D. Del. Case No. 10-11780). Gregory M. Gordon, Esq., Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve as bankruptcy counsel. Daniel J. DeFranceschi, Esq., and Zachary I. Shapiro, Esq., at Richards Layton & Finger, serve as co-counsel. Logan and Company is the Company's claims and notice agent. The Company estimated its assets and debts at $100 million to $500 million. The Company's affiliate, Bondex International, Inc., filed a separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779), estimating its assets and debts at $100 million to $500 million. As reported by the Troubled Company Reporter, Specialty Products has proposed a Chapter 11 reorganization plan. The official committee of Asbestos Personal Injury Claimants and the Future Claimants' Representative also have filed a joint Chapter 11 plan for the Debtors. SSRS INVESTMENTS: Case Summary & 8 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: SSRS Investments I, LP P.O. Box 866 Van Alstyne, TX 75495 Bankruptcy Case No.: 13-40080 Chapter 11 Petition Date: January 4, 2013 Court: U.S. Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: Eric A. Liepins, Esq. ERIC A. LIEPINS P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 E-mail: eric@ealpc.com Scheduled Assets: $732,300 Scheduled Liabilities: $1,437,400 A copy of the Company's list of its eight largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txeb13-40080.pdf The petition was signed by Shazia Morakabian, secretary of general partner. STEELE SPORTFISHING: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Steele Sportfishing Service Corp., Inc. 5700 Executive Drive Baltimore, MD 21228 Bankruptcy Case No.: 13-10186 Chapter 11 Petition Date: January 5, 2013 Court: United States Bankruptcy Court District of Maryland (Baltimore) Debtor's Counsel: Kim Y. Johnson, Esq. P.O. Box 643 Laurel, MD 20725-0643 Tel: (443) 838-3614 Fax: (301) 725-2065 E-mail: kimyjcounsel@aol.com Estimated Assets: $0 to $50,000 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 Scott R. Steele, secretary. THQ INC: Receives Court Approval for Amended Sale Calendar ---------------------------------------------------------- THQ Inc. received approval from the U.S. Bankruptcy Court on the calendar to conduct bidding and complete the sale of the company following an agreement reached between the potential buyer and the committee representing unsecured creditors. The Court approved Clearlake Capital Group, L.P.'s bid for the entire company as the opening bid for an orderly auction process. The Court also approved procedures that allow other interested parties to bid for individual assets or for the entire company, but bids for individual assets will only be considered superior to an aggregate bid for the entire company if the value generated by separate sales were to exceed the price offered by an individual bidder for the entire company. The new calendar now calls for all bids to be received by January 22, 2013 at 9:00 a.m. ET. The auction will be held later that day at 3:00 p.m. The hearing on the sale will be held at 9:30 a.m. January 23, and the closing will occur January 24. The Court also approved an amended financing agreement that will support THQ's operations during this period. "Today's ruling provides a clear path. We will now know definitively by Jan. 23rd where we stand," confirmed Brian Farrell, Chairman and CEO of THQ. "We appreciate the support of our employees, partners, and suppliers now more than ever." THQ is being advised by Centerview Partners LLC and FTI Consulting as its financial advisors and Gibson, Dunn & Crutcher LLP as legal counsel. For information regarding the Chapter 11 case, please visit http://www.kccllc.net/thq 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 Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13398) on Dec. 19, 2012. THQ has a deal to sell its video-game development business to Clearlake Capital Group LP for about $60 million, absent higher and better offers at an auction proposed for January 2013. Clearlake and existing lender Wells Fargo Capital Finance LLC are providing $10 million of DIP financing. Attorneys at Young Conaway Stargatt & Taylor, LLP and Gibson, Dunn & Crutcher LLP serve as counsel to the Debtors. FTI Consulting and Centerview Partners LLC are the financial advisors. Kurtzman Carson Consultants is the claims and notice agent. VAL-FAB INC.: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: VAL-FAB, Inc. 218 Jackson Street Neenah, WI 54957 Bankruptcy Case No.: 13-20090 Chapter 11 Petition Date: January 4, 2013 Court: U.S. Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Judge: Susan V. Kelley Debtor's Counsel: Craig E. Stevenson, Esq. KREKELER STROTHER, S.C. 2901 West Beltline Highway, Suite 301 Madison, WI 53701-0828 Tel: (608) 258-8555 Fax: (608) 258-8299 E-mail: cstevenson@ks-lawfirm.com - and ? Eliza M. Reyes, Esq. KREKELER STROTHER, S.C. 2901 West Beltline Highway, Suite 301 Madison, Wi 53713 Tel: (608) 258-8555 Fax: (608) 258-8299 E-mail: ereyes@ks-lawfirm.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wieb13-20090.pdf The petition was signed by Gary L. Van Linn, vice president. WEBB DIVERSIFIED: Case Summary & 8 Unsecured Creditors ------------------------------------------------------ Debtor: Webb Diversified, LLC 295 Rosehill Drive East Tallahassee, FL 32312 Bankruptcy Case No.: 13-40006 Chapter 11 Petition Date: January 3, 2013 Court: U.S. Bankruptcy Court Northern District of Florida (Tallahassee) Debtor's Counsel: Thomas B. Woodward, Esq. THOMAS B. WOODWARD, ATTY. P.O. Box 10058 Tallahassee, FL 32302 Tel: (850) 222-4818 Fax: (850) 561-3456 E-mail: woodylaw@embarqmail.com Scheduled Assets: $3,323,394 Scheduled Liabilities: $4,497,120 A list of the eight entities identified by the Company in the list of 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flnb13-40006.pdf The petition was signed by Wayne S. Webb, Jr., member/CFO. WELLS ENTERPRISES: Moody's Assigns 'B1' Corp. Family Rating ----------------------------------------------------------- Moody's Investors Service assigned B1 Corporate Family and Probability of Default Ratings to Wells Enterprises, Inc. Moody's also assigned a B2 (LGD 4, 60%) rating to the company's new $235 million senior secured notes due 2020. Proceeds from the issuance are being used to pay equity holders a dividend and refinance existing debt. Ratings are subject to Moody's review of the final documentation. The outlook is stable. The following ratings are assigned to Wells Enterprises, Inc: Corporate Family Rating at B1; Probability of Default Rating at B1; $235 million senior secured notes due January 2020, at B2 (LGD 4, 60%) The outlook is stable. Wells' B1 Corporate Family Rating reflects the company's thin profit margins, small scale relative to its larger and more diverse packaged food competitors, limited geographic diversity and its sole focus on ice cream and frozen novelties. However, the rating also reflects the company's well known licensed brands such as Weight Watchers, Cadbury and Yoplait and its solid position as a private label ice cream manufacturer. The company's presence in branded products as well as private label, coupled with the sheer scale and breadth of its manufacturing operations, enable Wells to maximize penetration of distribution channels spanning a broad range of retail, foodservice, club operators, convenience stores and mobile vendors. The rating outlook is stable, reflecting the company's modest leverage, diverse distribution channels and solid position in private label ice cream manufacturing. The outlook also reflects the company's narrow focus on ice cream and related novelties, as well as its relatively narrow profit margins and limited geographic diversity. An upgrade in the near term is unlikely given the company's size, narrow product offering, and exposure to commodity prices. Considerations that could contribute to an upgrade would be the company growing revenues above $1.5 billion, demonstrating success in its expansion strategy, and strengthening its cash flow. Credit metrics that could contribute to an upgrade include sustaining EBIT to interest above 2.5 times and maintaining debt/EBITDA below 3.5 times. Wells' ratings could be downgraded if the company's operating performance were to materially deteriorate, if it is unable to effectively manage its growth efforts, or should its liquidity become constrained. A rating downgrade could also be considered if debt/EBITDA approaches 4.5 times. Headquartered in Le Mars, Iowa, family-owned Wells Enterprises ("Wells") is the third largest ice cream manufacturer in the U.S. producing a range of packaged ice cream and frozen novelty products. In addition to its Blue Bunny branded frozen dessert products the company produces a diverse portfolio of products under licensed brands such as Weight Watchers and Yoplait as well as private label ice cream products for national retailers. For the twelve months ending September 30, 2012, Wells posted revenues of approximately $970 million. The principal methodology used in rating Wells Enterprises, Inc. was the Global Packaged Goods Industry Methodology published in December 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. WILLBROS GROUP: Gets Two Transmission Construction Projects ----------------------------------------------------------- Willbros Group, Inc. on Jan. 8 disclosed that two units of its Utility T&D segment have been awarded transmission construction projects in Texas. Willbros T&D was awarded a contract by New Braunfels Utilities to remove 3.1 miles of existing line and install approximately 3.8 miles of new line. The project is scheduled to begin in February and will be completed by the end of May. Additionally, Xcel Energy Services Inc., on behalf of its operating company, Southwestern Public Service Company, awarded Chapman Construction, a division of Willbros, the first 104 miles of a 200 mile single circuit 345-kilovolt transmission line project in the Texas Panhandle. Construction on the project is scheduled to commence towards the end of the second quarter with wire installation in the last half of 2013. Randy Harl, President and Chief Executive Officer, remarked, "We are very pleased to have the opportunity to work with New Braunfels Utilities and Xcel Energy to support their reliability and expansion efforts. These awards demonstrate progress towards our strategy to expand our transmission capabilities and presence in Texas and the surrounding states. We are seeing increased opportunities for both high and low voltage transmission construction and these project awards position us to obtain additional work in this region." Willbros Group, Inc. -- http://www.willbros.com-- is an independent contractor serving the oil, gas, power, refining and petrochemical industries, providing engineering, construction, turnaround, maintenance, life-cycle extension services and facilities development and operations services to industry and government entities worldwide. * * * As reported by the Troubled Company Reporter on Nov. 13, 2012, Willbros amended its credit agreement to extend the maturity date of its senior secured credit facility and to modify the debt covenants and increase the amount of funds available for borrowing under certain conditions. The company also received incremental term loans of $60 million. These amendments have addressed some of the debt maturity and liquidity concerns that led to Moody's negative outlook in May of this year. However, recent operating results have been weak and the company is expected to generate negative free cash flow this year. In addition, this is the second time the company has been forced to amend its credit facility within the past 20 months and it has not addressed its longer term financing needs. Therefore, Moody's is maintaining the company's B3 corporate family rating and Moody's negative outlook. * FINRA Unveils 2012 Regulatory Highlights ------------------------------------------ The Financial Industry Regulatory Authority (FINRA) marked 2012 with significant accomplishments in detecting fraudulent activity, implementing cross-market surveillance, increased transparency of securities markets and fulfilling its regulatory mandate to protect investors, assessing $68 million in fines, ordering a record $34 million in restitution to harmed customers and taking measures to ensure market integrity. Richard Ketchum, FINRA's Chairman and CEO, said, "FINRA fulfilled its role as the first line of defense for investors through a comprehensive and aggressive enforcement program, supported by a realigned and more risk-based examination program and the provision, for the first time, of cross-market surveillance programs that more effectively detected electronic manipulative trading. Protecting investors and helping to ensure the integrity of the nation's financial markets is at the heart of what we do every day." Regulatory Highlights One of the most significant regulatory achievements this year was the range of civil and criminal actions stemming from FINRA referrals of potential fraudulent conduct. FINRA's Office of Fraud Detection and Market Intelligence (OFDMI) conducts a robust insider trading and fraud surveillance program across nearly all U.S. equities markets. FINRA referrals and proactive sharing of regulatory intelligence have provided assistance to the Securities and Exchange Commission (SEC) and law enforcement agencies, targeting a wide variety of schemes. One example of immediate intervention as a result of an OFDMI insider trading referral was an insider trading matter involving suspicious trading by foreign accounts prior to an M&A transaction that generated more than $13 million in illicit profits in July. FINRA alerted the SEC to the suspicious trading within hours after the acquisition was announced, leading to an emergency asset freeze. In 2012, OFDMI referred 692 matters involving potential fraudulent conduct to the SEC and other federal or state law enforcement agencies, including 347 insider trading referrals and 260 fraud referrals. These referrals and cooperative regulatory efforts resulted in many SEC actions, including PIPEs transactions, microcap fraud, insider trading and market manipulation. FINRA brought a number of highly significant disciplinary actions in 2012, including being the first regulator to address a number of ongoing frauds by taking immediate action. -- WR Rice - Filed a temporary cease and desist order and complaint to halt further fraudulent sales activities by WR Rice Financial Services and its owner, as well as the conversion of investors' funds or assets -- Hudson Valley - Expelled the firm and barred the CEO for defrauding its clearing firm and customers by using their funds and securities to cover losses caused by the CEO's manipulative day trading -- TWS Financial - Filed a complaint against TWS's president/owner, alleging a fraudulent scheme targeting the Polish community. FINRA brought 1,541 disciplinary actions (an increase of 53 from 2011) against registered individuals and firms, levied fines totaling more than $68 million and ordered restitution of $34 million to harmed investors. In addition, FINRA expelled 30 firms from the securities industry, barred 294 individuals and suspended 549 brokers from association with FINRA-regulated firms. Disciplinary highlights include cases involving complex products, including exchange-traded funds (ETFs), structured products and non-traded REITs, as well as research analyst conflicts, inadequate disclosure and mispricing. FINRA finalized several high profile cases against firms in 2012. Cases Involving Complex Products -- Non-traded REITs - FINRA sanctioned David Lerner Associates, the firm's founder, President and CEO, and the firm's head trader in an action related to the non-publicly traded Apple REITs involving suitability and supervision violations. The settlement also consolidated numerous matters, including a municipal and CMO markup case, a pending enforcement investigation of more recent municipal and CMO markups, and 10 pending market regulation matters involving municipal markups identified through surveillance reviews. -- Improper Sales of ETFs - FINRA sanctioned Citigroup Global Markets, Inc.; Morgan Stanley & Co., LLC; UBS Financial Services; and Wells Fargo Advisors, LLC a total of more than $9.1 million for selling leveraged and inverse ETFs without reasonable supervision and for not having a reasonable basis for recommending the securities. The firms were fined more than $7.3 million and are required to pay a total of $1.8 million in restitution to certain customers who made unsuitable leveraged and inverse ETF purchases. In addition, FINRA also brought similar cases against Merrill Lynch and Scott & Strongfellow. -- Structured Products - Merrill Lynch was fined $450,000 for supervisory failures relating to the sales of structured products to retail customers. The firm relied upon automated exception- based reporting systems to flag transactions and/or accounts that met certain pre-defined criteria, but did not specifically monitor for potentially unsuitable concentration levels. Conflicts, Disclosure and Mispricing Cases -- Research Analysts - FINRA filed an action against Goldman Sachs for failing to supervise equity research analyst communications with traders and clients, and for failing to adequately monitor trading in advance of published research changes to detect and prevent possible information breaches by its research analysts. FINRA fined Goldman Sachs $11 million. The firm also settled with the SEC for an additional $11 million fine. -- Improper Reimbursement of Fees to Lobbying Group - Five firms -- Citigroup, Goldman Sachs, JP Morgan, Merrill Lynch and Morgan Stanley -- were sanctioned a total of more than $4.48 million for unfairly obtaining the reimbursement of fees they paid to the California Public Securities Association (Cal PSA) from the proceeds of municipal and state bond offerings. The firms violated fair dealing and supervisory rules of the Municipal Securities Rulemaking Board by obtaining reimbursement for these voluntary payments to pay the lobbying group. The firms were fined a total of more than $3.35 million and are required to pay a total of $1.13 million in restitution to certain issuers in California. This is the first case brought by regulators on the manner in which banks pay bond-lobby fees. -- Mispricing of Mutual Fund Orders - FINRA ordered Pruco Securities, LLC to pay more than $10.7 million in restitution, plus interest, to customers who placed mutual fund orders with Pruco via facsimile or mail, and received an inferior price for their shares. FINRA also fined Pruco $550,000 for its pricing errors and for failing to have an adequate supervisory system and written procedures in this area. Disciplinary Actions Ensuring Market Integrity -- Direct Market Access - Master/Sub-Account - FINRA filed a number of direct market access - master/sub cases, which sanctioned firms for allowing foreign traders to conduct suspicious trading activity at the firms (Hold Brothers, Genesis, and Title Securities). -- Credit Default Swap (CDS) Pricing - FINRA fined GFI Securities, Inc., and five CDS brokers/supervisors more than $2.9 million for violations related to improper communications and collusion designed to hamper customers' efforts to obtain CDS brokerage services at rates reflecting a bona fide competitive market, and for related supervisory deficiencies. FINRA also suspended the five individuals. -- Inflated Advertised Trade Volume - FINRA censured and fined Deutsche Bank Securities, Inc., $1.25 million for substantially overstating its advertised trade volume to three private service providers and for related supervisory deficiencies. FINRA also censured and fined Jeffries & Company, Inc., $550,000 for similar conduct. -- Market Manipulation - FINRA expelled Biremis Corp., a brokerage that handled U.S. trading for a trading company, and barred its President and CEO for lacking procedures to prevent a trading scheme called "layering" and numerous other violations. In 2012, FINRA initiated 1,846 routine examinations, more than 800 branch office examinations, and 5,100 cause examinations in response to events such as customer complaints, terminations for cause and regulatory tips. As part of a redesign of the platform used by examination staff to conduct exams, FINRA developed new technology to support and streamline the process with new technology, tools, data and new exam content that, along with the underlying risk hierarchy, make up the new, modernized framework for the risk-based examination process. This framework is critical to identifying and prioritizing areas of risk exposure at firms, and subsequently, helping FINRA determine the appropriate regulatory response to those risks and improve our ability to quickly make decisions regarding pursuing "red flags" and other areas of heightened focus. In addition, FINRA devoted significant resources to monitoring the financial condition of certain firms facing franchise-threatening problems. For example, when clearing firm Penson faced bankruptcy earlier this year, FINRA's Risk Oversight & Operational Regulation staff worked with the SEC and the firm's management to facilitate an acquisition, saving 1.6 million customers from a SIPC liquidation. Staff also worked with Knight Capital in the wake of the technology glitch in August to facilitate the sale of its error positions and the infusion of additional capital. Investor Protection and Transparency Initiatives -- On July 9, FINRA implemented a new suitability rule requiring a broker-dealer or their associated persons to have a "reasonable basis" to believe a recommended transaction is suitable for the customer, based on information obtained through "reasonable diligence" to understand a customer's investment profile. FINRA recently published a set of frequently asked questions on the rule. -- The SEC approved a rule that requires FINRA-regulated firms that sell an issuer's securities in a private placement to file with FINRA a copy of any private placement memorandum, term sheet or other offering document the firm used within 15 days of the date of the sale. The rule enhances FINRA's oversight of firms' sales activities in private placements and became effective in December 2012. -- An important investor-protection initiative in 2012 was a proposal to inform customers of recruitment compensation practices when they are considering following a registered person to a new firm. The rule proposal would require the new firm to disclose the details of enhanced compensation over $50,000 paid to a registered person to any former customer of the registered person who is contacted about moving or moves his account to the new firm. -- FINRA increased investors' ability to obtain information on financial professionals through BrokerCheck by including a zip code search and a combined search function that provides easy access to information on investment advisers from the SEC's Investment Adviser Public Disclosure (IAPD) database. FINRA also obtained Board approval in September 2012 to file proposed rule changes to require firms to include a reference and a link to BrokerCheck on their websites, to provide for disclosure of additional information through BrokerCheck, and to establish the legal and technical framework for the provision of BrokerCheck data; and implemented changes in October 2012 to effect the display of links to BrokerCheck in response to Internet search engine queries on the names of broker-dealers and associated persons. -- In November, FINRA Dispute Resolution released data reflecting the outcomes of cases heard under its all-public panel program, a program implemented in February 2011 allowing investors the option of a panel comprised of all public arbitrators versus a panel made up of one arbitrator with securities industry experience (nonpublic arbitrator) and two public arbitrators. The all-public panel option represents an investor-friendly change to the program, designed to ensure a fair playing field for all parties. To date, the data indicate that in cases decided by three public arbitrators, customers were awarded damages 51 percent of the time, whereas in cases decided by a panel including one nonpublic arbitrator and two public arbitrators, investors were awarded damages 32 percent of the time. -- FINRA and the FINRA Investor Education Foundation engaged in a comprehensive outreach strategy to investors that included distributing more than 630,000 educational brochures and other resources to investors. The FINRA Foundation delivered its Outsmarting Investment Fraud curriculum to more than 9,000 investors at more than 170 live events nationwide. Over one million copies of FINRA's Job Dislocation: Making Smart Financial Choices after a Job Loss have been distributed since the end of 2008. The Foundation also delivered tools and resources to thousands of military families through the Foundation's military financial readiness project, including distribution of free FICO(R) Scores to more than 46,000 service members and spouses, and reached more than 3,700 service members at 33 educational forums across the globe. During 2012, the FINRA Foundation approved 25 new grants totaling $2.68 million and managed 111 existing grant-funded projects to research, improve, expand, innovate, sustain, and evaluate financial and investor education and protection services across the United States. Many of these projects comprised two grassroots initiatives administered in partnership with the American Library Association and United Way Worldwide to bring reliable, unbiased financial education to underserved communities. Market-Integrity Initiatives -- In 2012, FINRA implemented comprehensive cross-market surveillance patterns for the markets it regulates (the NYSE and NASDAQ families of markets and the OTC market for listed equities). These patterns address more than 50 threat scenarios and canvas approximately 80 percent of the listed equities market. FINRA will continue to pursue potential cross-market abuses and refine its surveillance patterns based on new threat scenarios and regulatory intelligence. FINRA also introduced a suite of surveillance patterns to further enhance oversight of trading in non-exchange-listed OTC equities, which will allow FINRA to better review for potential manipulative trading activity, such as frontrunning and marking the close. In addition, as TRACE has provided increased transparency to the debt markets, FINRA has enhanced its ability to review for potential abuses common in transparent markets, such as wash sales, marking the close and trading ahead. In 2012, FINRA Market Regulation's Trading and Market Making Examination (TMMS) program continued to implement a more risk-based approach to planning and conducting examinations. Thematric and cause examinations focused on trading issues associated with alternative trading systems, information barriers, the SEC's market access rule and amendments to FINRA's order protection rule. -- FINRA is working with the national exchanges to develop a National Market System (NMS) plan to implement a consolidated audit trail (CAT). CAT will give regulators a database of customer-level trading details, which will significantly increase regulators' ability to conduct surveillance across multiple markets and identify problematic trading activity. The development of CAT will also improve regulators' ability to perform market reconstruction and analysis. -- FINRA continued to bring transparency to the fixed income markets. On Nov. 12, 2012, FINRA began disseminating price and other transaction-level information on Agency Pass-Through Mortgage-Backed Securities traded to be announced (TBA transactions), which represent more than 80 percent of asset- backed security (ABS) transaction volume. -- FINRA also filed a rule proposal to further expand price transparency in the ABS market by requiring the dissemination of mortgage-backed securities (MBS) traded in Specified Pool Transactions and Small Business Administration (SBA)-backed ABS. The proposal has been approved by the SEC, and dissemination will begin on July 22, 2013. Crowdfunding FINRA is committed to ensuring that the capital-raising objectives of the JOBS Act are advanced in a manner consistent with investor protection. To that end, FINRA has solicited comments on the specific rules that it should adopt for registered funding portals that become FINRA members. FINRA has also asked for comment on the application of existing rules to broker-dealers engaging in crowdfunding activities. In the near future, FINRA will issue an Interim Form for Funding Portals. This voluntary form seeks essential information from prospective funding portals intending to apply for membership with FINRA. Prospective funding portals would file the interim form with FINRA voluntarily until final SEC and FINRA rules governing funding portals are in place. FINRA, the Financial Industry Regulatory Authority -- http://www.finra.org-- is the largest non-governmental regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business -- from registering and educating all industry participants to examining securities firms, writing and enforcing rules and the federal securities laws, informing and educating the investing public, providing trade reporting and other industry utilities, and administering the largest dispute resolution forum for investors and registered firms. * Corporate High Yield Not Yet at "Bubble" Levels ------------------------------------------------- Sentiment in the media and in many corners of the marketplace that holds that high-yield corporate debt is in "bubble" territory may be missing some key factors currently shaping the bond landscape, according to Fran Rodilosso, fixed income portfolio manager at Market Vectors ETFs. "I think there is a difference so far between what we are seeing at the beginning of 2013 and the type of credit bubbles we have seen historically," said Mr. Rodilosso. "A bubble is built on excessive leverage, and modern bubbles have been fueled by leveraged buyouts, real estate speculation, and structured products with a high degree of embedded leverage." "No doubt some of these phenomena are creeping back into the market, and leverage at the company level, to generalize, did start rising during the latter part of 2012," he added. "But whereas during a more 'classic' bubble a vast majority of debt issuance has historically funded takeovers, dividends, and massive capital spending, 2012's record issuance was still, for the most part, done for the purpose of refinancing. That refinancing was done at lower interest rates, reducing the cost of debt for many borrowers, while also reducing the amount to be paid back over the next two years." He continued, "Yields have been pushed down by a highly aggressive central bank policy, with the result that yield-oriented investors have been pushed into owning lower-rated credits. As a result, the yields on riskier debt are as low as they have ever been. But the credit spreads, the difference between the yield on a high yield bond and a Treasury security, are actually closer to their historic average." According to Mr. Rodilosso, that fact implies that there still remains some cushion in high yield bonds against a moderate rise in interest rates, a cushion he notes we are already seeing in action thus far in 2013. "I think the point is that bonds are not 'cheap' in the sense that there is considerably less upside than there was a year ago, and credit markets are vulnerable to a significantly higher move in US interest rates. But, putting aside the actions of the federal government, the private sector does not yet appear to me to be at the excessive level of leverage that would lead to imminent liquidity issues and a spike in default rates, at least not yet." Mr. Rodilosso has 20 years of experience trading and managing risk in fixed income investment strategies, including 17 years covering emerging markets. Among the Market Vectors ETFs under his watch are Fallen Angel High Yield Bond ETF (nyse arca:ANGL), LatAm Aggregate Bond ETF (nyse arca:BONO), Emerging Markets Local Currency Bond ETF (nyse arca:EMLC), Emerging Markets High Yield Bond ETF (nyse arca:HYEM), International High Yield Bond ETF (nyse arca:IHY), Renminbi Bond ETF (nyse arca:CHLC) and Investment Grade Floating Rate ETF (nyse arca:FLTR). As of November 30, 2012, the total assets for these ETFs amounted to approximately $1.4 billion. * Retail Trade to Experience Greatest Volatility, Survey Shows -------------------------------------------------------------- From the fourth quarter Phoenix Management "Lending Climate in America" Survey, results show that retail trade and finance & insurance industries supplanted construction for the first time in two years as those industries most likely to experience volatility. When asked to identify three industries that will experience the most volatility in the next six months, 48% of lenders agree that retail trade will experience the greatest volatility. This is a nine percentage point increase over last quarter (thirty-nine percent). Finance and insurance followed close behind with 38% of those polled (a jump of twelve points from last quarter). Somewhat surprising, construction landed in third place this quarter with 28% of lender responses. Last quarter construction had a majority response of 61%. "This is an interesting shift from lenders," says Michael Jacoby, Phoenix Senior Managing Director and Shareholder. "The results surprised me a bit. I know that home prices have seen a recent uptick, but it is unusual to see the construction industry drop to third place." The survey also found lenders this quarter believe an uptick of bankruptcies and loan losses are on the horizon. These two categories increased by eight percentage points and two percentage points respectively. There was also a five percentage point increase in those lenders who feel unemployment will increase as well. To see the full results of Phoenix's "Lending Climate in America" Survey, please visit http://www.phoenixmanagement.com/survey/ About Phoenix For over 25 years, Phoenix -- http://www.phoenixmanagement.com/-- has provided smarter, operationally focused solutions for middle market companies in transition. Phoenix Management Services(R) provides turnaround, crisis and interim management, specialized advisory and operational due diligence services for both distressed and growth oriented companies. Phoenix Capital Resources(TM) provides seamless investment banking solutions including M&A advisory, complex restructurings and capital placements. Phoenix Capital Resources is a U.S. registered broker-dealer and member of FINRA and SIPC. Proven. Results.(R) * U.S. Faces "Muddle-Through" Economy, Nuveen's Bob Doll Says ------------------------------------------------------------- Nuveen Asset Management, the $117 billion multi-asset affiliate of Nuveen Investments, on Jan. 8 disclosed that Chief Equity Strategist and Senior Portfolio Manager, Robert C. Doll has released his Ten Predictions 2013. As part of Nuveen Asset Management's ongoing efforts to provide investors calm, reasoned analysis to help them and their financial advisors make informed, long-term investment decisions, Mr. Doll's Predictions are intended to take a deep and thorough look at the trends and issues that will help shape the year to come. A Look Back at 2012 Commenting on the broad themes shaping the market in 2012, Mr. Doll said, "The tug-of-war between debt deflation and policy reflation, and the political and economic fog in the US, Eurozone, and China, has kept consumer, business, and investor confidence fairly depressed throughout the year as most market participants hesitated to accept economic risk exposure and instead stayed defensively positioned." Despite this persistent backdrop, financial market returns were better than most people forecasted as most equity benchmarks returned a double digit percentage. This result was echoed in many credit-oriented fixed income benchmarks. The stubbornly slow labor market recovery prompted the Fed to act pre-emptively and initiate further quantitative easing. "In some respects, the US economy received a double dose of easing in the form of lower interest rates and lower inflation. This combined to give the first noticeable improvement in many housing- related measures. In an ironic way, that which almost 'did us in' during 2008/9 -- residential real estate -- began to witness nascent signs of recovery," he said. Key Themes for the Year Ahead Cautiously optimistic, Mr. Doll is hopeful on the outlook for the global economy and risk assets in the year ahead. Equity markets may be choppy in the near-term as the US fiscal cliff is dealt with. We expect political compromise to reduce its drag to a moderate amount in 2013. Further progress toward calming the financial crisis in the Eurozone, even though the region remains mired in recession is also expected. "In the broadest terms, 2013 will see the United States experience a more 'muddle-through economy' and a 'grind- higher' equity market. Our somewhat constructive outlook is not driven by expectations for a strong acceleration in global growth, but rather a modest improvement leading to increased business spending which will make the recovery broader and more sustainable than has been the case since the Great Recession ended." Global Forces Make an Impact Outside of the United States, events in Europe, China and other emerging nations will play a more prominent role in the broader health of global markets. "For most countries in Europe (especially in the north), we will see fewer recessionary reports in the second half of the year, with glimpses of a lackluster recovery in 2014. The financial stresses will likely rear their ugly heads from time to time during the course of 2013, but hopefully remain contained," noted Mr. Doll. According to Mr. Doll, the aggressive monetary policy in emerging nations that halted the slowdown in growth should give way to better relative economic and earnings growth in 2013. "As long as a cyclical problem doesn't get in the way, we believe the secular story accompanying the growing population and rising middle class should prevail, causing emerging markets to outperform," he said. If the above events in Europe and the emerging nations prove correct, Mr. Doll sees US multi-nationals outperforming domestically-focused companies in 2013. "If we are correct that relative economic momentum will be best outside the US in 2013, it is likely that companies with earnings exposure outside the US will benefit. We have seen the outperformance of domestically focused equities over the last couple of years and as a result, many multinational companies have become attractive on a relative value basis as well," Mr. Doll stated. Domestic Outlook Commenting on Washington's efforts to pass a meaningful budget deal, Mr. Doll said, "In our view, the pressure from the electorate, bond rating agencies, and foreign holders of US debt will cause lawmakers to craft a compromise yielding some meaningful results." He added, "Any deal is likely to have its share of flaws, but reducing the rate of increase in federal government outlays particularly with respect to entitlements is a pre-requisite for any chance of fiscal prudence in the United States. Year-over-year dividend growth has been in the double-digit percentage territory since mid-2011 and in 2013 Mr. Doll sees that pattern continuing. Uncertainty and cautiousness in corporate boardrooms regarding reinvestment in the business, high cash balances, strong free cash flow profiles and low payout ratios contribute to this pattern. "While expectations of higher taxes on dividends have increased the number of one-time dividends, we expect higher taxes on dividends to have little effect on continued increases in payouts. In many cases, cash and cash flow are so strong that increased hiring and reinvestment by corporations could happen along with increased dividend payouts." Mr. Doll said. Mr. Doll also sees a US manufacturing renaissance built upon the nation's vast supply of cheap natural gas. Narrowing of wage differentials between the US and emerging markets on the back of a dollar decline in recent years and significant wage increases elsewhere have made the US somewhat more attractive. Mr. Doll noted, "We believe we will witness an increase in manufacturing jobs and GDP as a percentage of total jobs and GDP, admittedly from a low base. Realization of this prediction in 2013 and beyond should have a positive impact on trade, capital expenditures, jobs, and inflation." Addressing Risks Commenting on what he sees as primary risks to the markets in 2013, Mr. Doll noted, "Political risks in 2013 loom large and the most immediate risk is the political process in Washington, DC surrounding the fiscal cliff." Lurking not far from the surface remain the still unresolved imbalances in the European Union. Mr. Doll said, "It is also not clear that economic recoveries in emerging economies will be very vigorous, and the political and social unrest in the Middle East will continue to be an issue to monitor closely. Further, debt deleveraging threats are not totally in the rear view mirror, nor are the inflation possibilities associated with exploded central bank balance sheets." With these themes in mind, Mr. Doll presents his Ten Predictions for 2013. Ten Predictions 2013 -- The U.S. economy continues to muddle through with nominal growth below 5% for the seventh year in a row -- Europe begins to exit recession by the end of year as the ECB eases and financial stresses lessen -- The U.S. yield curve steepens as financial risks recede and deflationary threats lessen -- U.S. stocks record a new all-time high as stocks advance for the fifth year in a row -- Emerging market equities outperform developed market equities -- After two years of underperformance, U.S. multinationals outperform domestically focused companies -- Large-cap stocks outperform small-cap stocks and cyclical companies outperform defensive companies -- Dividends increase at a double-digit rate as payout ratios rise -- A nascent U.S. manufacturing renaissance continues, powered by cheap natural gas -- The U.S. government passes a $2-3 trillion ten-year budget deal Grading 2012's Predictions 1. The European debt crisis begins to ease, even as Europe experiences a recession. Correct 2. The U.S. economy continues to muddle through yet again. Correct 3. Despite slowing growth, China and India contribute more than half of the world's economic growth. Correct 4. U.S. earnings grow moderately, but fail to exceed estimates for the first time since the Great Recession. Correct 5. Treasury rates rise and quality spreads fall. Half-Correct 6. US equities experience a double-digit percentage return as multiples rise modestly for the first time since the Great Recession. Correct 7. US stocks outperform non-US markets for the third year in a row. Incorrect 8. Company dividends and share buybacks hit a record high. Half-Correct 9. Healthcare and energy outperform utilities and financials. Incorrect 10. Republicans capture the Senate, retain the House and defeat President Obama. Incorrect Total Score: 6.0 out of 10 Real World Considerations for Investors Today The beginning of the new year offers investors an opportune time to review investment goals and adjust asset allocation decisions with their financial advisor. Based upon his Predictions for 2013, Mr. Doll believes the following themes would be especially relevant for investors to consider as they review their investment portfolio for 2013 and beyond. Consider today's "stealth" cyclical bull market: 2012 witnessed a double digit equity market advance, and the cyclical bull market remains intact as equities have had positive returns four years in a row. Although risks remain, largely centered on the potential for political and policy mistakes, we believe that investors seeking long-term capital appreciation should participate in equities while remaining highly selective about the investments they make. Focus on companies with free cash flow: Using free cash flow, companies can buy back shares, hire workers, increase capacity, engage in M&A activity or boost dividends. In our view, record high corporate cash levels, combined with record low dividend payout ratios, mean that high-quality, dividend-paying stocks play an integral role. These companies have generally exhibited lower price swings during market volatility; and sustainable, increasing dividends can provide income, help hedge against inflation and offer potential for price appreciation. Put sustainable growth to work: Historically, those growth companies that have consistently and strongly outperformed consensus earnings expectations have enjoyed price appreciation. We believe that stocks with strong, sustainable growth characteristics will be rewarded in 2013. Recognize the need for research-driven credit selection: As financial risks recede and deflationary threats lessen, long-term rates may creep higher. In this environment, we believe investors will benefit from disciplined, research-driven security selection across investment grade and high yield corporate bonds, the financial sector of the investment-grade universe, BBB and lower rated municipal bonds, the preferred securities sector and emerging markets corporate bonds. Consider an allocation to liquid alternatives: For many investors, risk management has replaced relative return as a top priority. For these investors, "alternative assets" such as commodities or real estate securities can introduce new and diversified sources of risk, return and/or income to a portfolio. For more detailed information on Bob Doll's Ten Predictions 2013, including full commentary and a point-by-point examination of his 2012 predictions, visit www.Nuveen.com/ten-predictions * Schneider & Stone Reduces Mortgage to Unsec. Chapter 13 Claim --------------------------------------------------------------- The Law Offices of Schneider & Stone, a bankruptcy and business law firm based in Skokie, has successfully removed a Bank of America mortgage from their clients' home. In an incredible turn of events, the homeowners' Chapter 13 plan will treat the entire mortgage as unsecured -- no different than a common credit card -- and the clients will own their home free and clear after successfully completing their case. The firm's clients refinanced their property with Bank of America several years ago. The clients signed a standard mortgage giving Bank of America a lien on their house. Bank of America failed to record the mortgage with the Recorder of Deeds. The homeowners fell behind on their mortgage payments and filed Chapter 13 bankruptcy to save their home. Chapter 13 does not discharge a mortgage from a debtor's home; it rolls late payments into the bankruptcy plan and lets the client start making regular payments until the loan is paid off. In this case, Bank of America's failure to record the mortgage negated their rights. The bankruptcy filing caused the bank to review the account, at which point it determined that the mortgage had never been recorded. The bank filed a Motion for Relief from the Automatic Stay in an effort to record the mortgage. The Law Offices of Schneider & Stone objected to the Motion and the court denied relief. The court demanded briefs, and on November 28, 2012, after hearing both parties, the court entered an order deeming the bank's claim as wholly unsecured. "An unrecorded mortgage does not create a valid secured claim, period," said bankruptcy attorney and firm partner Ben Schneider. "The fact that the bank tried to record its mortgage post-petition is incredible to me, and based on the facts of this case, the court absolutely made the right decision." Since this matter has been resolved, the homeowners' Chapter 13 plan will now be able to move forward with confirmation. With the mortgage treated as an unsecured claim, successful completion of the plan will mean the homeowners will leave the bankruptcy with a mortgage-free home. The bankruptcy judge has set a status hearing on the matter, scheduled for January 18, 2013. (case number:12-11838) Ben Schneider is the principal bankruptcy attorney at The Law Offices of Schneider & Stone. Schneider handles all types of consumer bankruptcy cases, including Chapter 7, Chapter 13 and individual Chapter 11 bankruptcies. Mr. Schneider and his partner, Motty Stone, also want to give credit to associate Edward Brener, who did a lot of the research that led to the win. For more information, contact Ben Schneider by calling (847) 933- 0300 or by filling out a contact form at http://www.windycitylawgroup.com/contact-us * Thompson Hine Names Tuggle as Partner for Cleveland Practice -------------------------------------------------------------- Thompson Hine LLP has elected six lawyers to the firm's partnership effective January 1, 2013. The new partners, located in the firm's Dayton, Cincinnati, Cleveland and New York offices, represent a broad range of practice areas including Business Litigation; Business Restructuring, Creditors' Rights & Bankruptcy; Environmental; Product Liability Litigation; and Real Estate. "Each of these lawyers has exceptional legal acumen and has demonstrated our firm's commitment to client service excellence by continually bringing value to clients. We welcome them to our partnership," said Deborah Z. Read, Thompson Hine's managing partner. The new partners are: Rebecca Brazzano (Business Litigation - New York) has extensive experience litigating complex commercial, employment and IP matters across a variety of industries including financial services, health care, manufacturing, telecommunications, hospitality, medical devices, Internet technology and media. She has tried cases before courts and arbitral panels around the country and has assisted clients to resolve business disputes short of trial in efficient and creative arrangements where it has been consistent with our clients' goals. Ms. Brazzano received her J.D. from Brooklyn Law School in 1995 and her B.A., with distinction, from Queens College, City University of New York in 1992. Susan C. Cornett (Real Estate - Dayton) focuses on real estate matters, particularly mortgage and mezzanine financing, commercial real estate purchases and sales, commercial leasing, and solar energy facility leasing and purchases. Ms. Cornett represents both borrowers and lenders in mortgage financing transactions. She was selected by Ohio Super Lawyers(R) magazine as an Ohio Super Lawyers Rising Star in 2012. Ms. Cornett earned her J.D. and M.B.A. in 2004 and her B.S. in 2001, all from the University of Cincinnati. Heather M. Hawkins (Business Litigation - Cincinnati) focuses her practice on construction, general commercial and intellectual property litigation in federal and state courts across the country. She has extensive first- and second-chair experience in multimillion-dollar jury trials and arbitrations. She was selected by Ohio Super Lawyers magazine as an Ohio Super Lawyers Rising Star for Construction Litigation in 2011 and 2012 and named a YWCA Rising Star in 2007. Ms. Hawkins received her J.D., cum laude, from The University of Louisville Brandeis School of Law in 2004 and her B.A., summa cum laude, from the University of Louisville in 2001. Emily S. Huggins Jones (Environmental - Cleveland) focuses her practice on environmental counseling and litigation, environmental compliance and regulatory analysis, planning for business transactions, toxic tort and product liability litigation, and maritime litigation and counseling. She was selected by Ohio Super Lawyers magazine as an Ohio Super Lawyers Rising Star in 2012 and was one of only 10 lawyers named as "Who to Watch in Law" for 2012 by Crain's Cleveland Business. In addition, she was honored with the YWCA Women of Professional Excellence Award in 2011. Ms. Jones received her J.D. from the University of Notre Dame Law School in 2004 and her B.A., with distinction, from the University of Virginia in 2000. Jared E. Oakes (Real Estate - Cleveland) represents a broad range of public and private investors, developers and owners of commercial real estate, with a particular focus on retail/shopping center assets. He advises on the acquisition and sale of commercial properties, repositioning troubled assets, entity planning, leasing, development, asset management, commercial lending and debt restructuring. Mr. Oakes also devotes a significant portion of his practice to providing strategic counseling on corporate real estate matters and complex real estate litigation. He has been recognized as a leading real estate lawyer in Ohio by Chambers USA: America's Leading Lawyers for Business each year since 2010, and was selected by Ohio Super Lawyers magazine as an Ohio Super Lawyers Rising Star in 2012. He also has been recognized nationally by The Legal 500. Mr. Oakes received his J.D. from Case Western Reserve University School of Law in 2005, his M.B.A. from Case Western Reserve University Weatherhead School of Management in 2005 and his B.A. from Mercyhurst University in 2000. Curtis L. Tuggle (Business Restructuring, Creditors' Rights & Bankruptcy - Cleveland) focuses his practice on commercial and creditors' rights, bankruptcy (primarily Chapter 11 reorganizations), workouts, preference action litigation, commercial litigation, Uniform Commercial Code controversies and other commercial law cases including secured transactions. He has significant experience representing indenture trustees and secured lenders in major bankruptcy and cross-border insolvency proceedings and workouts. Mr. Tuggle was selected for inclusion in The Best Lawyers in America(R) 2013. He also was selected for inclusion in 2012 Ohio Super Lawyers and recognized in Chambers USA: America's Leading Lawyers for Business for Bankruptcy/Restructuring (Ohio) in 2011 and 2012. Mr. Tuggle received his J.D. from The Ohio State University Michael E. Moritz College of Law in 2004 and his B.S., with distinction, summa cum laude, from The Ohio State University in 2001. About Thompson Hine LLP Established in 1911, Thompson Hine -- http://www.ThompsonHine.com -- is a business law firm with offices in Atlanta, Cincinnati, Cleveland, Columbus, Dayton, New York and Washington, D.C., * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Jan. 24-25, 2013 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Four Seasons Hotel Denver, Denver, Colo. Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 7-9, 2013 AMERICAN BANKRUPTCY INSTITUTE Caribbean Involvency Symposium Eden Roc Renaissance, Miami Beach, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 17-19, 2013 AMERICAN BANKRUPTCY INSTITUTE Advanced Consumer Bankruptcy Practice Institute Charles Evans Whittaker Courthouse, Kansas City, Mo. Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 20-22, 2013 AMERICAN BANKRUPTCY INSTITUTE VALCON Four Seasons Las Vegas, Las Vegas, Nev. Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ Apr. 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ June 13-16, 2013 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Mich. Contact: 1-703-739-0800; http://www.abiworld.org/ July 11-13, 2013 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Hyatt Regency Newport, Newport, R.I. Contact: 1-703-739-0800; http://www.abiworld.org/ July 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 8-10, 2013 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 22-24, 2013 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nev. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ Nov. 1, 2013 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Atlanta Marriott Marquis, Atlanta, Ga. Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 25, 2013 BEARD GROUP, INC. 20th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Dec. 5-7, 2013 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Terranea Resort, Rancho Palos Verdes, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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., Washington, D.C., 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 2013. 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 $975 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 Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***