/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130121.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, January 21, 2013, Vol. 17, No. 20 Headlines 1701 COMMERCE: OK'd to Incur Administrative Debt from Vestin A123 SYSTEMS: Waiting for Approval, Preparing for Sale to Wanxiang AIR DISTRIBUTION: S&P Assigns 'B' CCR; Rates $100MM Loan 'CCC+' AIRWAY LABS: Weinberg & Baer Raises Going Concern Doubt AMERICAN AIRLINES: Posts 4th Quarter Profit After Year-Ago Loss AMERICAN AIRLINES: Reports $107-Mil. in 2012 Operating Income AMERICAN AIRLINES: Judge Okays $1.5 Billion in New Financing AMERICAN AIRLINES: Not Obligated for Make-Whole Payment AMERICAN AMEX: Directed to File Chapter 11 Plan by Jan. 31 AMERIFORGE GROUP: Moody's Affirms 'B2' CFR; Outlook Stable AMFIN FINANCIAL: Squires Sanders Discusses Ruling on FDIC Claims AMPAL-AMERICAN ISRAEL: NASDAQ to Delist Class A Stock ARCHDIOCESE OF MILWAUKEE: Catholic Cemeteries Might Lose Funding ASSURED GUARANTY: Moody's Cuts Multiple Seniority Shelf to (P)Ba1 BAKERS FOOTWEAR: Bankruptcy Judge Agrees to Chapter 7 Conversion BAKERS FOOTWEAR: Polsinelli Is Committee Co-Counsel BAKERS FOOTWEAR: BDO Consulting Is Committee's Advisor BLUEJAY PROPERTIES: Can Access Cash Collateral Until Jan. 31 BOMBARDIER RECREATIONAL: Moody's Affirms 'B1'; Rates Loan 'B1' BROOKE CORP: Court Dismisses Portions of NCMIC Counterclaims CAMARILLO PLAZA: To Seek Approvla of Plan Disclosures Jan. 24 CASPIAN SERVICES: Incurs $15.95-Mil. Net Loss in Fiscal 2012 CATALYST PAPER: Marks Return to TSX with Opening Siren CGMT INC: Mayer Says 'Absurd' Malpractice Suit Rightly Nixed CHRIST HOSPITAL: Looks to Liquidating Chapter 11 Plan CLEAR CREEK: Court OKs Reduction of Allen Matkins' Role in Case CLEARWATER PAPER: Moody's Affirms 'Ba2' CFR; Rates Sr Notes 'Ba2' CLEARWATER PAPER: S&P Rates New $250MM Senior Unsecured Notes 'BB' COASTAL REALTY: Court Rules on Ozarks Disclosure Objection DAYTON SUPERIOR: J&K Adrian Lawsuit Goes Back to Alabama Court DELL CORP: Fitch Likely to Assign 'B' Issuer Default Rating on LBO DIGITAL DOMAIN: Hudson Bay DIP Loan Extended Until Jan. 31 DIGITAL DOMAIN: Seeks Approval to Pay Incentive Bonuses DIGITAL DOMAIN: Florida Gov't Unit Hires Bankruptcy Lawyers EDF RESOURCES: Shut Down by Small Business Administration ELPIDA MEMORY: Wants DIP Loan Extended Until Feb. 15 on Interim ELPIDA MEMORY: Bondholders Fail to Prove Collusion Claims EMMONS-SHEEPSHEAD BAY: Can Employ Robinsons Brog as Counsel EMPRESAS OMAJEDE: Proposes Charles A. Cuprill as Counsel FIELD FAMILY: Has Access to Cash Collateral Until Jan. 28 GENERAL MOTORS: Citigroup, JPMorgan to Manage Shares Sale GEORGIA GULF: Commences Cash Tender Offer for Senior Secured Notes GEORGIA GULF: Moody's Rates $450MM Unsecured Notes 'Ba3' GEORGIA GULF: S&P Assigns BB Rating to $450MM Sr. Unsecured Notes GIBRALTAR KENTUCKY: Jan. 24 Final Hearing on Case Conversion GIBRALTAR KENTUCKY: Plan Outline Hearing Continued Until Jan. 24 GREAT BASIN: Voluntarily Delists Common Stock on NYSE MKT GLYECO INC: Amends Report on ARI Assets Acquisition GULF FLEET: Court Rules on Summary Judgment Bid in Triple C Suit HEALOGICS INC: Moody's Affirms 'B2' CFR; Rates Facilities 'B1' HOSTESS BRANDS: Bakers Fund Adds Gordian to Advisory Team HOSTESS BRANDS: Jan. 25 Hearing on Unions' Bid for Trustee HOWREY LLP: Trustee Has New Approach on Accord With Ex-Partners INLAND EMPIRE: Left Hazardous Materials at Plant, Says Lessor INTERFACE SECURITY: S&P Gives 'B-' CCR; Rates $230MM Notes 'B-' INTERFAITH MEDICAL: Okayed to Pay $2.5MM to Critical Vendors INTERFAITH MEDICAL: Eric M. Huebscher OK'd as P. Care Ombudsman JOHN CLEMENTE: Bankruptcy Court Flips Ruling on IRS Claim KATHLEEN MORRIS: Hearing Tuesday on Plan Outline, Case Dismissal LCI HOLDING: Hearing on Bidding Procedures on Wednesday LCI HOLDING: U.S. Trustee Wants Patient Care Ombudsman LCI HOLDING: Rothschild Inc. Approved as Financial Advisor LIGHTSQUARED INC: Seeks More Time to Control Its Bankruptcy LKA INTERNATIONAL: Amends Bylaws to Add Annual Meeting Provision LOCATION BASED TECHNOLOGIES: Friedman Is New Accountant MACCO PROPERTIES: Case Dismissal Bid Faces U.S. Trustee Challenge MAKINO RESTAURANT: Nevada Court Threatens to Dismiss Appeal MANSTONE COUNTERTOPS: Ariz. Court Kicks Out Lawyer Due to Delays MARKETING WORLDWIDE: Incurs $11.1 Million Net Loss in 2012 MBIA INC: BofA's Case Backed by Payment Denial, Bank Says MEDYTOX SOLUTIONS: Two Directors Resign from Board MERIDIAN SUNRISE: Files Chapter 11 Petition in Tacoma MERVYN'S LLC: Bankr. Court Won't Hear Navroth Tort Claims MICHAELS STORES: S&P Rates New $1.64BB Secured Loan 'BB-' NEW ORLEANS SEWERAGE: Moody's Affirms 'Ba2' Rating; Outlook Neg. NEWLEAD HOLDINGS: Appoints Michael Zolotas as Chairman OMTRON USA: Taps Duff & Phelps as Investment Banker OMTRON USA: Want to Hire Upshot Services as Claims Agent OMTRON USA: Wants to Hire Fox Rothschild as Attorney OVERSEAS SHIPHOLDING: Hiring MHB as Special Litigation Counsel OVERSEAS SHIPHOLDING: Can Use CEXIM Cash Collateral Until Jan. 24 OVERSEAS SHIPHOLDING: Wants Approval to Use DSF Collateral PACER MANAGEMENT: Knox County Parties Object to Case Dismissal PATRIOT COAL: Brower Piven Named Lead Counsel in Class Suit PICCADILLY RESTAURANTS: Panel Taps Greenberg Traurig as Counsel PICCADILLY RESTAURANTS: Court OKs GA Keen as Real Estate Advisors PICCADILLY RESTAURANTS: Panel Can Hire Derbes as Attorneys PUERTO DEL REY: Discloses $100-Mil. in Assets, $44-Mil. in Debt PUERTO DEL REY: Hires Charles A. Cuprill as Counsel PUERTO DEL REY: Proposes Luis R. Carrasquillo as Consultant QUALTEQ INC: To Auction Unsold Real Estate on Feb. 25 RAVENWOOD HEALTHCARE: Court OKs Walker & Murphy as Special Counsel RAVENWOOD HEALTHCARE: Can Hire Timothy Dixon as Special Counsel RESIDENTIAL CAPITAL: Quinn Emanuel Represents RMBS Purchasers RESIDENTIAL CAPITAL: Walters Bender in Mitchell Class Suit RESIDENTIAL CAPITAL: Wins Approval to Try to Sell Defaulted Loans RITE AID: Moody's Affirms 'Caa1' CFR; Outlook Positive SIX FLAGS: Said to Team With Apollo on Sea World Buyout SKOPE ENERGY: Pine Cliff CCAA Plan of Comprise Accepted SATCON TECHNOLOGY: Taps Lazard Middle as Investment Banker SATCON TECHNOLOGY: Five Members of Official Creditors Committee SUNSTATE EQUIPMENT: Moody's Raises CFR to 'B2'; Outlook Stable SURVEYMONKEY.COM LLC: S&P Assigns Prelim. 'B' Corp. Credit Rating T-L BRYWOOD: Wins Approval to Use Cash Collateral Until March 31 TALON THERAPEUTICS: Joseph Landy Discloses 92.4% Equity Stake TALON THERAPEUTICS: James Flynn Discloses 54.9% Equity Stake TAYLOR BEAN: E.D. Pa. Court Won't Hear Stradley Ronon Suit TRINSEO MATERIALS: Moody's Affirms 'B1' CFR; Rates New Notes 'B1' URANIUM RESOURCES: Approves Stock Split for NASDAQ Compliance VALEANT PHARMACEUTICALS: S&P Retains 'BB' Corp. Credit Rating WEST 380: Hires Strasburger & Price as Bankruptcy Counsel WEST 380: Court Approves Navigant Capital as Financial Adviser * Americas Hotel Transaction Volume to Eclipse 2012 at $18.5 Bil. * Large Junk-Bond Sales in 2012 Continuing This Year * Recoveries More Certain for Senior Debt Holders in Oil & Gas * Avison Young Releases 2013 Commercial Real Estate Forecast * M&A Advisor Submits Finalists of 7th Annual Turnaround Awards * MorrisAnderson Promotes Alpesh Amin to Managing Director * Zhou and Chini Firm Offers Free Consultations on Chapter 11 * BOND PRICING -- For Week From Jan. 17 to 18, 2013 ********* 1701 COMMERCE: OK'd to Incur Administrative Debt from Vestin ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas authorized 1701 Commerce, LLC, to borrow, from Vestin Realty Mortgage II, Inc., the funds deposited by Vestin on Oct. 29, 2012, into the trust account of counsel for the Debtor, Cole, Schotz, Meisel, Forman & Leonard, P.A., in the amount of $420,000, plus additional funds up to a maximum amount of $600,000 upon these terms: i) the postpetition financing will serve as a credit line available to the Debtor to be used solely to pay the Court allowed and approved fees and expenses of Cole Schotz as counsel; ii) the Debtor will be authorized to draw down from the postpetition financing only such amounts as necessary to pay the Court approved and allowed compensation of Cole Schotz; iii) the Oct. 29 funds will remain in the trust account of Cole Schotz pending the Debtor drawing down therefrom the amounts necessary to pay the compensation of Cole Schotz pursuant to orders of the Court, or, alternatively, Cole Schotz will be authorized to draw from the Oct. 29 funds, and the amounts so drawn by Cole Schotz will be deemed and will constitute postpetition borrowing of the Debtor; iv) the postpetition borrowing will be unsecured; v) the postpetition borrowing will not accrue interest; vi) the postpetition borrowing will be an allowed administrative expense of the Debtor's estate and will be paid only after all other allowed administrative expenses of the Debtor's estate are paid in full; and vii) upon the filing of a final fee application by Cole Schotz and after payment in full of all allowed fees and expenses of Cole Schotz, to the extent any of the Oct. 29 funds remain in the Cole Schotz trust account, the amount will be returned by Cole Schotz to Vestin. About 1701 Commerce 1701 Commerce LLC, owner and operator of a full service "Sheraton Hotel" located at 1701 Commerce, Fort Worth, Texas, filed for Chapter 11 protection (Bankr. N.D. Tex. Case No. 12-41748) on March 26, 2012. The Debtor also was the former operator of a Shula's steakhouse at the Hotel. 1701 Commerce LLC was previously named Presidio Ft. Worth Hotel LLC, but changed its name to 1701 Commerce LLC, prior to the bankruptcy filing date to reduce and minimize any potential confusion relating to an entity named Presidio Fort Worth Hotel LP, an unrelated and unaffiliated partnership that was the former owner of the hotel property owned by the Debtor. 1701 Commerce is a Nevada limited liability company whose members are Vestin Realty Mortgage I, Inc., Vestin Mortgage Realty II, Inc., and Vestin Fund III, LLC. 1701 Commerce LLC's operations are managed by Richfield Hospitality Group, an independent management company that is not affiliated with the Debtor or any of its members. Judge D. Michael Lynn presides over the bankruptcy case. The Debtor disclosed $71,842,322 in assets and $44,936,697 in liabilities. The Plan co-proposed by the Debtor and Vestin Realty Mortgage I, Inc., Vestin Realty Mortgage II, Inc., and Vestin Fund III, LLC, provides that, among other things, Convenience Class of Unsecured Claims of $5,000 will be paid 100% in cash without interest within 30 days after Effective Date, and Unsecured Claims in Excess of $5,000 will be paid 100% with interest at 5% through 20 quarterly payments. A123 SYSTEMS: Waiting for Approval, Preparing for Sale to Wanxiang ------------------------------------------------------------------ Peg Brickley, writing for Dow Jones' Daily Bankruptcy Review, reported that government-backed battery maker A123 Systems Inc. has yet to hear whether its proposed sale to China's Wanxiang Group will pass muster before the Committee on Foreign Investment in the United States, but in the absence of a fast "no," the plan is to move ahead with the first stage of the deal this week, a lawyer for the A123 said Tuesday. Speaking at a hearing in the U.S. Bankruptcy Court in Wilmington, Del., A123 attorney Caroline Reckler, who is with Latham & Watkins LLP, said A123 may hear something from the foreign investment review panel "later this afternoon" about the controversial sale, which critics say presents a potential danger to national security, according to the Jan. 15 report. 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. AIR DISTRIBUTION: S&P Assigns 'B' CCR; Rates $100MM Loan 'CCC+' --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating to Richardson, Texas-based Air Distribution Technologies. The rating outlook is stable. At the same time, S&P assigned its 'B' issue-level rating (same as the corporate credit rating) to the company's $100 million revolving credit facility due 2017 and its $525 million first-lien term loan due 2018. The recovery rating is '3', indicating S&P's expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. In addition, S&P assigned its 'CCC+' issue-level rating (two notches below the corporate credit rating) to the company's $135 million second-lien term loan due 2020. The recovery rating is '6', indicating S&P's expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default. Proceeds from these offerings were used to fund the acquisition of Pinafore Holdings B.V.'s Tomkins Group Air Distribution Division by an affiliate of CPPIB. Total consideration for the acquisition is $1.1 billion, including debt and contributed equity from CPPIB. "The corporate credit rating on Air Distribution Technologies reflects what we consider to be the combination of Air Distribution's 'weak' business risk and 'highly leveraged' financial risk," said Standard & Poor's credit analyst Maurice Austin. "Our view of the company's weak business risk is due to Air Distribution's exposure to highly cyclical commercial and residential construction markets, volatile raw material costs, and a highly competitive operating environment." Still, it is our view that Air Distribution derives a competitive advantage from its leading market position in niche categories and its broad and diversified distribution network for its heating, ventilation, and air conditioning (HVAC) components. Air Distribution is the leading North American manufacturer of products that are used to distribute, recycle, and vent air, and which are critical components of HVAC systems within non- residential and residential buildings. Air Distribution designs and manufactures a broad range of products including grilles, registers and diffusers, dampers and louvers, terminal units, commercial & industrial fans, chimneys, vents and accessories and air filters used in a variety of industrial and commercial applications. Air Distribution has developed an extensive distribution network in the U.S. for both its non-residential and residential products that provides a significant competitive advantage relative to smaller, regional, and local competitors, in S&P's opinion. Air Distribution is exposed to the volatility of commodity costs, with about 40% of its cost of sales related to materials (particularly steel and aluminum). Air Distribution has hedged in the past but currently the majority of raw material purchases are done on a spot basis, with very minimal short-term hedging on an opportunistic basis. Still, Air Distribution benefits from attractive pricing dynamics for its products and has a strong record of passing through inflationary price increases through to its customers. The ability to pass through price increases contributed to stable EBITDA margins of low double digits, through the most recent economic cycle. The stable rating outlook reflects S&P's expectation that credit measures will remain consistent with the company's highly leveraged financial risk profile, with 2013 debt to EBITDA and FFO to debt of about 5.5x and 13%, respectively, based on S&P's assumptions of flat end- market demand. S&P expects Air Distribution will maintain adequate liquidity based on committed revolving borrowing capacity and free operating cash flow. "We could lower the rating if Air Distribution experiences weaker- than-expected end-market demand, resulting in weaker-than-expected operating performance or if the company experiences higher-than- expected costs from establishing an internal corporate infrastructure such that total leverage increases above 6x on a sustained basis. This could occur if the aforementioned actions result in more than a 150 basis point decline in gross margins," S&P noted. "An upgrade is less likely in the next 12 months given our outlook for flat commercial construction activity. However, we could raise our rating in the longer term when commercial construction improves and after Air Distribution establishes a track record of maintaining lower leverage comfortably in the 4x to 5x range," S&P added. AIRWAY LABS: Weinberg & Baer Raises Going Concern Doubt ------------------------------------------------------- Airway Labs Corp. filed on Jan. 15, 2013, its annual report on Form 10-K for the fiscal year ended Sept. 30, 2012. Weinberg & Baer LLC, the Company's independent accountants, noted that Airway Labs has suffered losses from operations since inception and requires additional funds for future operating activities that raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $4.1 million on $892,187 of revenues for fiscal 2012, compared with a net loss of $3.0 million on $47,984 of revenues for fiscal 2011. The Company's balance sheet at Sept. 30, 2012, showed $1.1 million in total assets, $3.4 million in total liabilities, and a stockholders' deficit of $2.3 million. A copy of the Form 10-K is available at http://is.gd/IfkSjm Scottsdale, Ariz.-based AirWay Labs primarily engages in the development, manufacture and distribution of nasal breathing devices. AMERICAN AIRLINES: Posts 4th Quarter Profit After Year-Ago Loss -------------------------------------------------------------- AMR Corp., the parent company of American Airlines, reported a fourth-quarter profit following a year-earlier loss and said cost- cutting measures undertaken during restructuring would buoy earnings in future. Reuters reported that the carrier, which is weighing a merger with US Airways Group against exiting Chapter 11 as a standalone company, said 2012 revenue grew 3.7 percent to $24.9 billion, its highest annual revenue ever, the report said. Having filed for bankruptcy protection in late 2011, American has renegotiated plane leases, reduced management and support staff and froze pension plans to lower costs and improve competitiveness with rivals, the report related. "Having reached the vast majority of our restructuring milestones already, we can now focus on the new American becoming reality," Reuters said, citing Chief Executive Tom Horton's statement in a memo to staff. He said the financial improvement would pick up as the full effects of the reorganization kick in. Net income was $262 million, or 69 cents a share, compared with a loss of $1.1 billion, or $3.27 a share, a year earlier, according to the report. Excluding items such as benefits tied to income taxes and the settlement of a commercial dispute, American had a loss of $88 million, or 23 cents a share, Reuters said. That compares with a loss of 53 cents expected by analysts, according to Thomson Reuters I/B/E/S. Quarterly revenue eased 0.3 percent to $5.9 billion due to an estimated $155-million impact of superstorm Sandy, a November snow storm and disruptions to operations last year, the carrier said. Operating expenses fell 12 percent in the quarter, and fuel costs rose nearly 8 percent. American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Reports $107-Mil. in 2012 Operating Income ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp., which may be near a decision on whether to merge with US Airways Group Inc., reported a $1.88 billion net loss in 2012, resulting from $2.21 billion in costs associated with the Chapter 11 reorganization. Revenue last year rose 3.7% to $24.86 billion from a year earlier. Operating income for the year was $107 million. For the fourth quarter, the parent of American Airlines Inc. reported revenue of $5.94 billion and net income of $262 million that would have been greater were it not for $441 million in reorganization costs in the quarter. Net income was increase by $569 million in tax benefits. AMR ended the year with about $4.7 billion in restricted and unrestricted cash, essentially unchanged over the year. American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Judge Okays $1.5 Billion in New Financing ------------------------------------------------------------ Jacqueline Palank at Daily Bankruptcy Review reports that American Airlines parent AMR Corp. won court approval for $1.5 billion in new financing after a bondholder group threatened to hold up the deal. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000 ). AMERICAN AIRLINES: Not Obligated for Make-Whole Payment ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp. received permission from the bankruptcy judge to pay off $1.32 billion in loans secured by aircraft without paying a so-called make-whole premium required outside of bankruptcy if the debt were repaid before maturity. A make-whole, if applicable, is designed to compensate a lender for loss of an investment bearing interest higher than the current market, according to the report. The report relates that U.S. Bankruptcy Judge Sean H. Lane in Manhattan filed a 43-page opinion Jan. 17 rejecting all arguments made by U.S. Bank NA, as indenture trustee for the bondholders. AMR, the parent of American Airlines Inc., will repay the debt with a new $1.5 billion aircraft financing, saving $200 million through lower interest rates. The new financing, to be implemented before AMR emerges from bankruptcy reorganization, utilizes what are known as enhanced equipment trust certificates. The loans being paid off call for interest at rates between 8.6% and 13 percent. AMR said the new debt will bear interest comparable to the 4% to 4.75% rates other major airlines recently negotiated. According to the report, if the make-whole payment were required, AMR would be obliged to repay 155% of the $425 million owing on 10.375% first-lien bonds due 2021. The bonds last traded before Lane's decision for 109 cents on the dollar, to yield about 8.7%, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The report relates that U.S. Bank, arguing the make-whole is due, relied in part on the so-called 1110 election AMR made early in the bankruptcy. The term is derived from Section 1110 of the Bankruptcy Code, which requires an airline to decide within 60 days of bankruptcy whether to retain aircraft. If the airline elects to keep aircraft, it must agree to "perform all obligations" under the loan documents. According to the report, Judge Lane rejected the idea that the 1110 election obliged AMR to pay the make-whole. He pointed to provisions in the indenture saying that the make-whole isn't owing if the underlying default results from bankruptcy. Judge Lane said the 1110 election didn't cure the bankruptcy default, thus still invoking the indenture provision saying no make-whole is due following a bankruptcy default. Judge Lane, according to the report, said the repayment isn't a voluntary redemption, where the make-whole is due, because AMR is repaying debt following an automatic acceleration resulting from bankruptcy where none is owing. Judge Lane said his decision is similar to an unreported 2005 ruling in Virginia during the bankruptcy reorganization of US Airways Group Inc. Make-whole premiums will be required in the new financings. AMR won't know what interest rates it will pay until the new financings are priced after the bankruptcy court gives formal approval. 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. 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 AMEX: Directed to File Chapter 11 Plan by Jan. 31 ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon ordered American Amex, Inc., to file its Chapter 11 Plan and Disclosure Statement, together with a certificate prepared on Local Bankruptcy Form #1165.5, not later than Jan. 31, 2013. American Amex, Inc., filed for Chapter 11 protection petition (Bankr. D. Ore. Case No. 12-30656) on Feb. 1, 2012. The Law Offices of D. Blair Clark PLLC has been tapped as counsel. The Debtor disclosed $30 million in assets and $10.5 million in liabilities as of the Chapter 11 filing. AMERIFORGE GROUP: Moody's Affirms 'B2' CFR; Outlook Stable ---------------------------------------------------------- Moody's Investors Service has affirmed the ratings of Ameriforge Group Inc. (Ameriforge), including the B2 corporate family rating and B2-PD probability of default ratings as well as the B1 rating on its first lien credit facility, following the company's decision to increase the size of its new first lien term loan to $375 million from $350 million. The LGD point estimate on the first lien credit facility was changed to LGD 3-37 from LGD 3-36. The company's second lien term loan rating remained at Caa1. Organization debt list: Corporate Family Rating affirmed at B2 Probability of Default Rating affirmed at B2-PD $82.5 million revolver affirmed at B1 LGD, changed to LGD-37% from LGD3-36% $375 million (was $350 million) term loan B affirmed at B1 LGD, changed to LGD-37% from LGD3-36% $150 million second lien term loan rated Caa1, LGD5-85% The Rating outlook remains Stable Ratings Rationale The $25 million upsizing of the term loan was not considered material enough to result in a different ratings outcome. Moreover, while it positions the company less strongly within the current rating category, the company's debt ratings have been affirmed. 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 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 $600 million when including the acquisitions executed in 2012. Reported revenues for 2011 totaled $339 million. AMFIN FINANCIAL: Squires Sanders Discusses Ruling on FDIC Claims ---------------------------------------------------------------- Squire Sanders successfully argued in front of the US Court of Appeals for the Sixth Circuit, which affirmed an earlier ruling in favor of AmFin Financial Corporation, a bank holding company, against the Federal Deposit Insurance Corporation (FDIC). That ruling, made by the US District Court for the Northern District of Ohio after empaneling an advisory jury, had denied certain capital commitment claims asserted by the FDIC against AmFin under section 365(o) of the Bankruptcy Code. Squire Sanders lawyers Stephen D. Lerner, G. Christopher Meyer and Andrew M. Simon discuss the case and this ruling in "Not Every Promise is a Capital Commitment ? Litigating Section 365(o) Claims By the FDIC," published by A.S. Pratt in the January 2013 issue of Pratt's Journal of Bankruptcy Law. A copy of the Journal is available at http://is.gd/p9fPjo About AmTrust Financial AmTrust Financial Corp. was the owner of the AmTrust Bank. AmTrust was the seventh-largest holder of deposits in South Florida, with $4.7 billion in deposits and 21 branches. In November 2008, the Office of Thrift Supervision issued a cease and desist order requiring AmTrust to improve its capital ratios. AmTrust Financial, together with affiliates that include AmTrust Management Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ohio Case No. 09-21323) on Nov. 30, 2009. The debtor subsidiaries include AmFin Real Estate Investments, Inc., formerly AmTrust Real Estate Investments, Inc. (Case No. 09-21328). G. Christopher Meyer, Esq., Christine M. Piepont, Esq., and Sherri L. Dahl, Esq., at Squire Sanders & Dempsey (US) LLP, in Cleveland, Ohio; and Stephen D. Lerner, Esq., at Squire Sanders & Dempsey (US) LLP, in Cincinnati, Ohio, served as counsel to the Debtors. Kurtzman Carson Consultants served as claims and notice agent. Attorneys at Hahn Loeser & Parks LLP serve as counsel to the Official Committee of Unsecured Creditors. AmTrust Management estimated $100 million to $500 million in assets and debts in its Chapter 11 petition. AmTrust Bank was not part of the Chapter 11 filings. On Dec. 4, 2009, AmTrust Bank was closed by regulators and the Federal Deposit Insurance Corporation was named receiver. New York Community Bank, in Westbury, New York, assumed all of the deposits of AmTrust Bank pursuant to a deal with the FDIC. AmTrust, nka AmFin Financial Corp., obtained confirmation of its Amended Joint Plan of Reorganization on Nov. 3, 2011. The plan was declared effective in December. AMPAL-AMERICAN ISRAEL: NASDAQ to Delist Class A Stock ----------------------------------------------------- Ampal-American Israel Corporation disclosed that by letter dated January 17, 2013 the NASDAQ Listing Qualifications Hearings Panel has determined to delist the Company's Class A Stock from The NASDAQ Capital Market. As a result, trading of the Class A Stock will be suspended on NASDAQ effective at the open of business on Tuesday, January 22, 2013. The Company plans to appeal the determination to the NASDAQ Listing and Hearing Review Council. Accordingly, the Company's shares will not be delisted until the conclusion of the appeal process, which is expected to take several months. The Company's shares are expected to trade on the OTCQB Market during the appeal process. It is also expected that the Company's trading symbol will change to AMPLQ, effective with the open of the market on January 22, 2013. The Company filed a voluntary petition for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York on August 29, 2012, and a plan of reorganization has been proposed by the creditor's committee. In connection with the proposed plan of reorganization and its emergence from Chapter 11 bankruptcy, the Company intends to file a new listing application with NASDAQ for the listing of the Class A Stock and for a series of preferred stock proposed to be issued upon the Company's emergence from bankruptcy. About Ampal-American Ampal-American Israel Corporation -- http://www.ampal.com/-- acquired interests primarily in businesses located in Israel or that are Israel-related. Ampal-American filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-13689) on Aug. 29, 2012, to restructure the Company's Series A, Series B and Series C debentures. Bankruptcy Judge Stuart M. Bernstein presides over the case. Ampal-American sought bankruptcy protection in the U.S. because bankruptcy laws in Israel would lead to the Company's liquidation. Michelle McMahon, Esq., at Bryan Cave LLP, serves as the Debtor's counsel. Houlihan Lokey serves as investment banker. The petition was signed by Irit Eluz, chief financial officer, senior vice president. The Company scheduled US$290,664,095 in total assets and US$349,413,858 in total liabilities. A three-member official committee of unsecured creditors is represented by Brown Rudnick as counsel. The Committee has proposed a Chapter 11 Plan for the Debtor pursuant to a settlement with the Debtor. ARCHDIOCESE OF MILWAUKEE: Catholic Cemeteries Might Lose Funding ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a bankruptcy judge ruled the federal Religious Freedom Restoration Act of 1993 doesn't protect the Archdiocese of Milwaukee from claims by creditors that $55 million was fraudulently transferred to a trust for the maintenance of cemeteries. The report recounts that the perpetual care trust for Catholic cemeteries sued the creditors' committee in June 2011, seeking a declaration that money for upkeep of burial grounds isn't property of the Archdiocese and can't be used to pay sexual-abuse claims. According to the report, U.S. Bankruptcy Judge Susan V. Kelley in Milwaukee rejected the archdiocese's reliance on RFRA in a 12-page opinion handed down Jan. 17. Judge Kelley was careful to say that the inapplicability of RFRA "does not necessarily mean the cemetery trust assets will be available to pay the debtor's creditors." She notes that other parts of the complaint "remain to be decided." RFRA bars "government" from "substantially burdening religious exercise" unless "narrowly tailored to serve a compelling governmental interest," Judge Kelley said in summarizing the statute. Judge Kelley, the report discloses, reached the same result on several grounds. She said RFRA only bars government action and is no impediment to a fraudulent-transfer lawsuit on behalf of creditors. She also said RFRA "cannot be used to invalidate a state law," given that the challenge to the transfer is based on Wisconsin law. The cemetery trust was created in 2007. The archdiocese transferred $55 million to the trust in March 2008, the judge said in her opinion. The report notes that Judge Kelley hasn't always ruled against the archdiocese. In December, she handed down an opinion saying that assets of the parishes can't be thrown into the pot for payment of sexual abuse claims. When the archdiocese's bankruptcy began, its website said the $62.6 million in the trust was a "commitment" to a perpetual-care trust for cemeteries. In total, more than $90 million in funds did "not belong to the archdiocese, are restricted for specific use as designated by donors, or are offset by corresponding liability," according to the site. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASSURED GUARANTY: Moody's Cuts Multiple Seniority Shelf to (P)Ba1 ----------------------------------------------------------------- Moody's Investors Service has downgraded the Insurance Financial Strength (IFS) rating of Assured Guaranty Municipal Corp. (AGM) to A2 from Aa3, the IFS rating of Assured Guaranty Corp. (AGC) to A3, from Aa3, and the IFS rating of Assured Guaranty Re Ltd. (AGRe) to Baa1 from A1. In the same rating action, Moody's also downgraded the senior unsecured debt ratings of both Assured Guaranty US Holdings Inc. and Assured Guaranty Municipal Holdings Inc., to Baa2, from A3. The outlook for the ratings is stable. A full list of rating actions on Assured Guaranty Ltd. (Assured) and its subsidiaries is provided below. The rating action also has implications for the various transactions wrapped by AGM and AGC as discussed later in this press release. SUMMARY RATIONALE "The rating action reflects Moody's downward reassessment of Assured's business franchise, expected future profitability, and financial flexibility," said Moody's. "Assured operates in an industry that has not recovered from the financial crisis and, like its peers, will continue to struggle in the face of declining fundamentals, including a dramatic reduction in insurance usage, modest profitability and still-meaningful legacy risk." While the characteristics of Assured's insured portfolio's credit quality and its capital adequacy generally remain strong (based on the data from September 30, 2012), Assured's positioning on key dimensions of financial strength, namely franchise strength, profitability, and financial flexibility have weakened over time largely as a result of enduring changes in the financial guarantor industry and the broader economic environment as discussed in greater detail in previous Moody's publications. The combination of these characteristics, along with some residual uncertainty with respect to the potential for outsized losses relative to capital in the existing insured portfolio as well as more general unknowns with respect to future insured portfolio production and capital retention, lead to the overall A2 IFS rating assessment of the lead operating company. RATING RATIONALE -- ASSURED GUARANTY MUNICIPAL CORP. Moody's has positioned the IFS rating of Assured Guaranty Municipal Corp. (AGM, formerly Financial Security Assurance Inc.) at A2. As the principal active operating insurer within the Assured group, AGM is a key focus for Moody's analysis of the consolidated group and an important reference point for Moody's ratings of AGC and AGRe, entities whose underwriting profile has been sharply reduced in recent years. Moody's approach to rating the company is outlined in "Moody's Rating Methodology for the Financial Guaranty Insurance Industry", published in September 2006 and as further described in previous reports on the sector, including "Financial Guaranty Insurance: Frequently Asked Questions" (September 2012) and "The Changing Business of Financial Guaranty Insurance" (November 2008). Moody's methodology centers on an assessment of five key factors (outlined below), focusing on financial and operational metrics that are considered together with qualitative assessments and analyst judgment. Factor 1: Franchise Value and Strategy -- Moody's assessment of this factor balances AGM's position as the sole active financial guarantor to survive the 2007-2009 US financial crisis intact against the dramatic decline of the industry. Structured finance business, which accounted for a meaningful portion of AGM's pre- crisis activity, has virtually disappeared. The target market for insuring US public finance issuance (now primarily mid-to-low investment grade municipal bonds) has also declined, and is now less than one-third its size in 2006. While AGM benefits from its position as the most active player in a smaller industry, its overall business activity, as measured by the present value of gross premiums written, remains well below pre-crisis levels. The secular narrowing of its business opportunities, and related pressure on value creation result in Moody's low investment-grade (Baa) assessment of this rating factor. Factor 2: Insurance Portfolio Characteristics -- AGM's insured portfolio is somewhat bifurcated from a risk perspective, with a historically low-loss core municipal book as well as exposure to certain sectors and credits experiencing material credit stress. Based on Assured's internal ratings, the portion of AGM's 3Q2012 insured net par outstanding considered below investment grade was roughly 3.3%. Under Moody's scenario analyses, AGM's credit risk ratio (expected loss) and tail risk ratio (stress case loss) were also consistent with a high investment-grade score for this factor. In developing these estimates, certain adjustments were made to input parameters for Moody's Portfolio Risk Model to account for the 2010 recalibration of Moody's US public finance ratings to the global scale. However, the portfolio does have material exposure to legacy mortgage-related risks, which are highly sensitive to weakness in the macroeconomic environment, and large risks among individual municipal credits. Moody's therefore consider the company's portfolio characteristics score to be in the A rating range. Factor 3: Capital Adequacy --Moody's assessment of AGM's point-in- time capital adequacy is very strong, reflecting the relative emphasis on municipal risks as well as loss-mitigation activities related to RMBS. Based on Moody's base case estimated loss distribution, AGM holds claims-paying resources sufficient to cover losses at a confidence level corresponding to a high Aa score. In this analysis, insured RMBS and certain other stressed exposures are excluded from Moody's Portfolio Risk Model, in order to allow for a separate detailed loss assessment of those transactions. Potential losses estimated for these stressed exposures are then combined with the modeled losses on remaining exposures to derive an aggregate loss distribution for the overall portfolio. However, estimates of capitalization can vary considerably based on underlying assumptions about default probability, loss-given default, and correlation. This kind of variability leads us to assess capitalization somewhat more conservatively than modeling might suggest, but still in the Aa range for this factor. Factor 4: Profitability -- AGM sustained large losses during the financial crisis as a result of claims related to mortgage securitizations. However, profitability has rebounded in recent periods. For the three years ended December 31, 2011, AGM recorded an average statutory return on equity of 15.7%, aided by representation and warranties recoveries from mortgage originators and sponsors of RMBS. Profitability has also been enhanced by large opportunistic purchases of AGM-insured RMBS securities at deep discounts, which are financially beneficial but suggest a lack of investor confidence. Evaluated over longer time horizons, however, profitability has weakened notably, with 5-year and 10- year average statutory returns on equity at 0.5% and 6.8%, respectively, which lags those of its specialty insurance and reinsurance peers and, given the low levels of new business production, we believe AGM's profitability will remain under pressure. Consequently, Moody's views AGM's profitability to be consistent with a score in the single-A range. Factor 5: Financial Flexibility -- AGM's financial leverage is characterized by a relatively modest debt load, and operating earnings coverage has been relatively strong over the past three years. As with profitability, however, earnings coverage is weaker when a longer time frame (e.g. five years) is considered. More importantly, in Moody's view, various market indicators (such as the firm's low stock price relative to operating book value per share, and its elevated CDS spreads) suggest that the firm's financial flexibility in accessing new funds on a cost-effective basis could be quite constrained. For these reasons, Moody's scores AGM's financial flexibility in the Baa range. WHAT COULD CHANGE THE RATING UP OR DOWN The main rating sensitivities for AGM relate to the composition and performance of its insured portfolio as well as its capitalization and market support. The rating could be lowered if the quality of its insured portfolio meaningfully decreased or capital was withdrawn without an associated reduction of risk, or if profitability reduced materially. The rating could be upgraded if there were a significant rebound in business origination at attractive pricing levels and financial flexibility improved. However, fundamental challenges inherent in the business model make a return to the Aa rating level unlikely. The A2 IFS ratings of Assured Guaranty (Bermuda) Ltd. and Assured Guaranty (Europe) Ltd. reflect a combination of formal and implicit support from AGM. The Baa2(hyb) ratings of Sutton Capital Trusts I-IV reflect the subordinated nature of the perpetual preferred stock of AGM that can be delivered to the trusts; AGM has an option to sell such securities to the Trusts at its sole discretion at any time. RATING RATIONALE -- ASSURED GUARANTY CORP. The A3 IFS ratings of Assured Guaranty Corp. (AGC) and its supported affiliate, Assured Guaranty (UK) Ltd., are positioned one notch below the A2 IFS rating of AGM reflecting its more limited stand alone franchise, as well as its weaker capital profile, insurance portfolio characteristics and profitability metrics. The Baa3(hyb) ratings of Woodbourne Capital Trusts I-IV reflect the subordinated nature of the perpetual preferred stock of AGC that can be delivered to the trusts; AGC has an option to sell such securities to the Trusts at its sole discretion at any time. Rating sensitivities for AGC are similar to those described above for AGM. RATING RATIONALE -- ASSURED GUARANTY RE The Baa1 IFS rating of Assured Guaranty Re Ltd. and its supported subsidiaries, Assured Guaranty Re Overseas Ltd. and Assured Guaranty Mortgage Insurance Company, is one notch below the A3 IFS rating of AGC and two notches below the A2 IFS rating of AGM and reflects its limited independent franchise, its weaker relative capital profile, the more flexible Bermudian regulatory environment relative to the U.S., and its role as internal group reinsurer, optimizing the risk profile of its affiliated primary insurance writers. Rating sensitivities for AGRe are similar to those described above for AGM and AGC. RATING RATIONALE -- SENIOR DEBT AND ISSUER RATINGS The Baa2 senior unsecured debt rating of Assured Guaranty Municipal Holdings Inc. (AGM Holdings) is positioned at three notches below the IFS rating of its core operating subsidiaries to reflect the structural subordination of the parent companies relative to the operating companies. The three notch difference between AGM and AGM Holdings reflects the typical notching practice for U.S. insurance holding company structures. The Baa2 senior unsecured debt rating of Assured Guaranty US Holdings Inc. (AG US Holdings) is aligned with that of AGM Holdings, reflecting its access to the financial resources of AGC, as well as subordinated access to those of AGM Holdings. The debt of AG US Holdings also benefits from a guarantee from Assured Guaranty Ltd. The Baa2 issuer rating of Assured Guaranty Ltd. reflects its status as the ultimate parent company of the group with direct access to dividends from Assured Guaranty Re, which has substantial dividend capacity, as well as subordinated access to the resources of both AGM and AGC through intermediate holding companies. The provisional ratings of Assured Guaranty Capital Trusts I and II are aligned with the provisional subordinated debt ratings of their sponsor, Assured Guaranty Ltd. The primary rating sensitivity of AGM Holdings, AG US Holdings and Assured Guaranty Ltd. is to the financial strength of the underlying operating companies and thus their ratings are likely to be positively/negatively impacted by upgrades/downgrades at AGM, AGC and AGRe. RATINGS LIST Issuer: Assured Guaranty (Bermuda) Ltd. Downgrades: Insurance Financial Strength, Downgraded to A2 from Aa3 Outlook Actions: Outlook, Changed To Stable From Rating Under Review Issuer: Assured Guaranty (Europe) Ltd. Downgrades: Insurance Financial Strength, Downgraded to A2 from Aa3 Outlook, Changed To Stable From Rating Under Review Issuer: Assured Guaranty (UK) Ltd Downgrades: Insurance Financial Strength, Downgraded to A3 from Aa3 Outlook, Changed To Stable From Rating Under Review Issuer: Assured Guaranty Capital Trust I Downgrades: Pref. Stock Shelf, Downgraded to (P)Baa3 from (P)Baa1 Outlook Actions: Outlook, Changed To Stable Issuer: Assured Guaranty Capital Trust II Downgrades: Pref. Stock Shelf, Downgraded to (P)Baa3 from (P)Baa1 Outlook Actions: Outlook, Changed To Stable Issuer: Assured Guaranty Corp Downgrades: Insurance Financial Strength, Downgraded to A3 from Aa3 Outlook, Changed To Stable From Rating Under Review Issuer: Assured Guaranty Ltd. Downgrades: Issuer Rating, Downgraded to Baa2 from A3 Multiple Seniority Shelf, Downgraded to (P)Baa2 from (P)A3 Multiple Seniority Shelf, Downgraded to (P)Ba1 from (P)Baa2 Multiple Seniority Shelf, Downgraded to (P)Baa3 from (P)Baa1 Outlook Actions: Outlook, Changed To Stable From Rating Under Review Issuer: Assured Guaranty Mortgage Insurance Company Downgrades: Insurance Financial Strength, Downgraded to Baa1 from A1 Outlook, Changed To Stable From Rating Under Review Issuer: Assured Guaranty Municipal Corp. Downgrades: Insurance Financial Strength, Downgraded to A2 from Aa3 Outlook, Changed To Stable From Rating Under Review Issuer: Assured Guaranty Municipal Holdings Inc. Downgrades: Junior Subordinated Regular Bond/Debenture, Downgraded to Baa3 (hyb) from Baa1 (hyb) Multiple Seniority Shelf, Downgraded to (P)Baa2 from (P)A3 Multiple Seniority Shelf, Downgraded to (P)Baa2 from (P)A3 Multiple Seniority Shelf, Downgraded to (P)Ba1 from (P)Baa2 Multiple Seniority Shelf, Downgraded to (P)Ba1 from (P)Baa2 Multiple Seniority Shelf, Downgraded to (P)Baa3 from (P)Baa1 Multiple Seniority Shelf, Downgraded to (P)Baa3 from (P)Baa1 Senior Unsecured Regular Bond/Debenture, Downgraded to Baa2 from A3 Senior Unsecured Regular Bond/Debenture, Downgraded to Baa2 from A3 Senior Unsecured Regular Bond/Debenture, Downgraded to Baa2 from A3 Outlook Actions: Outlook, Changed To Stable From Rating Under Review Issuer: Assured Guaranty Re Ltd. Downgrades: Insurance Financial Strength, Downgraded to Baa1 from A1 Outlook, Changed To Stable From Rating Under Review Issuer: Assured Guaranty Re Overseas Ltd. Downgrades: Insurance Financial Strength, Downgraded to Baa1 from A1 Outlook, Changed To Stable From Rating Under Review Issuer: Assured Guaranty US Holdings, Inc. Downgrades: Junior Subordinated Regular Bond/Debenture, Downgraded to Baa3 (hyb) from Baa1 (hyb) Senior Unsecured Regular Bond/Debenture, Downgraded to Baa2 from A3 Senior Unsecured Regular Bond/Debenture, Downgraded to Baa2 from A3 Outlook Actions: Outlook, Changed To Stable From Rating Under Review Issuer: Sutton Capital Trust I Downgrades: Pref. Stock Non-cumulative Preferred Stock, Downgraded to Baa2 (hyb) from A3 (hyb) Outlook Actions: Outlook, Changed To Stable From Rating Under Review Issuer: Sutton Capital Trust II Downgrades: Pref. Stock Non-cumulative Preferred Stock, Downgraded to Baa2 (hyb) from A3 (hyb) Outlook Actions: Outlook, Changed To Stable From Rating Under Review Issuer: Sutton Capital Trust III Downgrades: Pref. Stock Non-cumulative Preferred Stock, Downgraded to Baa2 (hyb) from A3 (hyb) Outlook Actions: Outlook, Changed To Stable From Rating Under Review Issuer: Sutton Capital Trust IV Downgrades: Pref. Stock Non-cumulative Preferred Stock, Downgraded to Baa2 (hyb) from A3 (hyb) Outlook Actions: Outlook, Changed To Stable From Rating Under Review Issuer: Woodbourne Capital Trust I Downgrades: Pref. Stock Non-cumulative Preferred Stock, Downgraded to Baa3 (hyb) from A3 (hyb) Outlook Actions: Outlook, Changed To Stable From Rating Under Review Issuer: Woodbourne Capital Trust II Downgrades: Pref. Stock Non-cumulative Preferred Stock, Downgraded to Baa3 (hyb) from A3 (hyb) Outlook Actions: Outlook, Changed To Stable From Rating Under Review Issuer: Woodbourne Capital Trust III Downgrades: Pref. Stock Non-cumulative Preferred Stock, Downgraded to Baa3 (hyb) from A3 (hyb) Outlook Actions: Outlook, Changed To Stable From Rating Under Review Issuer: Woodbourne Capital Trust IV Downgrades: Pref. Stock Non-cumulative Preferred Stock, Downgraded to Baa3 (hyb) from A3 (hyb) Outlook Actions: Outlook, Changed To Stable From Rating Under Review TREATMENT OF WRAPPED TRANSACTIONS Moody's ratings on securities that are guaranteed or "wrapped" by a financial guarantor are generally maintained at a level equal to the higher of the following: a) the rating of the guarantor (if rated at the investment grade level); or b) the published underlying rating (and for structured securities, the published or unpublished underlying rating). Moody's approach to rating wrapped transactions is outlined in Moody's special comment "Assignment of Wrapped Ratings When Financial Guarantor Falls Below Investment Grade" (May, 2008); and Moody's November 10, 2008 announcement "Moody's Modifies Approach to Rating Structured Finance Securities Wrapped by Financial Guarantors". As a result of the rating action, the Moody's-rated securities that are guaranteed or "wrapped" by AGC or AGM are also downgraded, except those with equal or higher published underlying ratings (and for structured finance securities, except those with equal or higher published or unpublished underlying ratings). The principal methodology used in these ratings was Moody's Rating Methodology for the Financial Guaranty Insurance Industry published in September 2006. BAKERS FOOTWEAR: Bankruptcy Judge Agrees to Chapter 7 Conversion ---------------------------------------------------------------- Patrick Fitzgerald and Rachel Feintzeig, writing for Dow Jones' Daily Bankruptcy Review, reports Judge Charles E. Rendlen III of the U.S. Bankruptcy Court in St. Louis, Missouri, indicated at a hearing Wednesday he would approve Bakers Footwear Group Inc.'s request to convert its case to Chapter 7. As reported by the Troubled Company Reporter on Jan. 16, 2013, Bill Rochelle, the bankruptcy columnist for Bloomberg News, said the company admitted in a court filing Jan. 14 the reorganization effort is "administratively insolvent," meaning there aren't enough unencumbered assets to pay professional expenses and other costs incurred since the bankruptcy began in October. The Bloomberg report adds that the bankruptcy judge signed an order Jan. 15 allowing Bakers to conduct going-out-of-business sales at around 56 remaining stores. Bakers conducted sales in the other 150 stores in November. The judge authorized Bakers to hire Great American Group LLC as consultant to run sales at the remaining stores. The sales are to be completed by the end of February. Great American will receive a fee of 1.45% of gross sales along with $560 a day for each supervisor. Bakers will pay all operating expenses during the sales. About Bakers Footwear Bakers Footwear Group Inc., a mall-based retailer of shoes for young women, filed for bankruptcy protection (Bankr. E.D. Mo. Case No. 12-49658) in St. Louis on Oct. 3, 2012, after announcing a plan to close stores and reduce costs. Bakers was founded in St. Louis in 1926 as Weiss-Kraemer, Inc., later renamed Weiss and Neuman Shoe Co., a regional chain of footwear stores. In 1997, Bakers was acquired principally by its current chief executive officer, Peter Edison, who had previously served in various senior management positions at Edison Brothers Stores Inc. In June 1999, Bakers purchased selected assets of the "Bakers" and "Wild Pair" footwear retailing chains from the bankruptcy estate of Edison Brothers. The "Bakers" footwear retailing chain was founded in 1924 and is the third-oldest soft goods retail concept still in operation in the United States. In February 2001, the Debtor changed its name to Bakers Footwear Group, Inc. In February 2004, Bakers conducted an initial public offering of its common stock. Bakers' common stock is quoted under the ticker symbol "BKRS" on the, the OTC Markets Group's quotation platform. As of the Petition Date, Bakers operates roughly 215 stores nationwide. In November 2012, the U.S. Bankruptcy Court in St. Louis authorized the company to hire a joint venture between SB Capital Group LLC and Tiger Capital Group LLC as agents to conduct closing sales for 150 stores. Bankruptcy Judge Charles E. Rendlen III presides over the case. Brian C. Walsh, Esq., David M. Unseth, Esq., and Laura Uberti Hughes, Esq., at Bryan Cave LLP, serve as the Debtor's counsel. Alliance Management serves as financial and restructuring advisors. Donlin, Recano & Company, Inc., serves as claims agent. The petition was signed by Peter A. Edison, chief executive officer and president. The Company's balance sheet at April 28, 2012, showed $41.90 million in total assets, $59.49 million in total liabilities and a $17.59 million total shareholders' deficit. Counsel for Crystal Financial, the DIP Lender, are Donald E. Rothman, Esq., at Riemer & Braunstein LLP; and Lisa Epps Dade, Esq., at Spencer, Fane, Britt & Brown, LLP. Bradford Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. BAKERS FOOTWEAR: Polsinelli Is Committee Co-Counsel --------------------------------------------------- The Official Committee of Unsecured Creditors of Bakers Footwear Group Inc. sought and obtained approval from the U.S. Bankruptcy Court to retain Polsinelli Shughart PC as co-counsel in the case. Sherry Dreisewerd, Esq., attests the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm's rates are: Professional Rates ------------ ----- James E. Bird (shareholder) $440/hr Sherry K. Dreisewerd (shareholder) $270/hr Matthew S. Layfield (associate) $270/hr Rebecca M. O'Brien (paralegal) $125/hr About Bakers Footwear Bakers Footwear Group Inc., a mall-based retailer of shoes for young women, filed for bankruptcy protection (Bankr. E.D. Mo. Case No. 12-49658) in St. Louis on Oct. 3, 2012, after announcing a plan to close stores and reduce costs. Bakers was founded in St. Louis in 1926 as Weiss-Kraemer, Inc., later renamed Weiss and Neuman Shoe Co., a regional chain of footwear stores. In 1997, Bakers was acquired principally by its current chief executive officer, Peter Edison, who had previously served in various senior management positions at Edison Brothers Stores Inc. In June 1999, Bakers purchased selected assets of the "Bakers" and "Wild Pair" footwear retailing chains from the bankruptcy estate of Edison Brothers. The "Bakers" footwear retailing chain was founded in 1924 and is the third-oldest soft goods retail concept still in operation in the United States. In February 2001, the Debtor changed its name to Bakers Footwear Group, Inc. In February 2004, Bakers conducted an initial public offering of its common stock. Bakers' common stock is quoted under the ticker symbol "BKRS" on the, the OTC Markets Group's quotation platform. As of the Petition Date, Bakers operates roughly 215 stores nationwide. In November 2012, the U.S. Bankruptcy Court in St. Louis authorized the company to hire a joint venture between SB Capital Group LLC and Tiger Capital Group LLC as agents to conduct closing sales for 150 stores. Bankruptcy Judge Charles E. Rendlen III presides over the case. Brian C. Walsh, Esq., David M. Unseth, Esq., and Laura Uberti Hughes, Esq., at Bryan Cave LLP, serve as the Debtor's counsel. Alliance Management serves as financial and restructuring advisors. Donlin, Recano & Company, Inc., serves as claims agent. The petition was signed by Peter A. Edison, chief executive officer and president. The Company's balance sheet at April 28, 2012, showed $41.90 million in total assets, $59.49 million in total liabilities and a $17.59 million total shareholders' deficit. Counsel for Crystal Financial, the DIP Lender, are Donald E. Rothman, Esq., at Riemer & Braunstein LLP; and Lisa Epps Dade, Esq., at Spencer, Fane, Britt & Brown, LLP. Bradford Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. BAKERS FOOTWEAR: BDO Consulting Is Committee's Advisor ------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Missouri authorized the Official Committee of Unsecured Creditors of Bakers Footwear Group Inc. to employ BDO Consulting as its financial advisors. The firm, will among other things, provide these services: a. analyze the financial operations of the Debtor prepetition and postpetition, as necessary; b. conduct any requested financial analysis including verifying the material assets and liabilities of the Debtor, as necessary, and their values; and c. assist the committee in its review of monthly statements of operations submitted by the Debtor. David E. Berliner attested that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Bakers Footwear Bakers Footwear Group Inc., a mall-based retailer of shoes for young women, filed for bankruptcy protection (Bankr. E.D. Mo. Case No. 12-49658) in St. Louis on Oct. 3, 2012, after announcing a plan to close stores and reduce costs. Bakers was founded in St. Louis in 1926 as Weiss-Kraemer, Inc., later renamed Weiss and Neuman Shoe Co., a regional chain of footwear stores. In 1997, Bakers was acquired principally by its current chief executive officer, Peter Edison, who had previously served in various senior management positions at Edison Brothers Stores Inc. In June 1999, Bakers purchased selected assets of the "Bakers" and "Wild Pair" footwear retailing chains from the bankruptcy estate of Edison Brothers. The "Bakers" footwear retailing chain was founded in 1924 and is the third-oldest soft goods retail concept still in operation in the United States. In February 2001, the Debtor changed its name to Bakers Footwear Group, Inc. In February 2004, Bakers conducted an initial public offering of its common stock. Bakers' common stock is quoted under the ticker symbol "BKRS" on the, the OTC Markets Group's quotation platform. As of the Petition Date, Bakers operates roughly 215 stores nationwide. In November 2012, the U.S. Bankruptcy Court in St. Louis authorized the company to hire a joint venture between SB Capital Group LLC and Tiger Capital Group LLC as agents to conduct closing sales for 150 stores. Bankruptcy Judge Charles E. Rendlen III presides over the case. Brian C. Walsh, Esq., David M. Unseth, Esq., and Laura Uberti Hughes, Esq., at Bryan Cave LLP, serve as the Debtor's counsel. Alliance Management serves as financial and restructuring advisors. Donlin, Recano & Company, Inc., serves as claims agent. The petition was signed by Peter A. Edison, chief executive officer and president. The Company's balance sheet at April 28, 2012, showed $41.90 million in total assets, $59.49 million in total liabilities and a $17.59 million total shareholders' deficit. Counsel for Crystal Financial, the DIP Lender, are Donald E. Rothman, Esq., at Riemer & Braunstein LLP; and Lisa Epps Dade, Esq., at Spencer, Fane, Britt & Brown, LLP. Bradford Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. BLUEJAY PROPERTIES: Can Access Cash Collateral Until Jan. 31 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Kansas authorized Bluejay Properties, LLC, to use the rents constituting cash collateral during the period commencing on the Petition Date through Jan. 31, 2013. Bankers' Bank of Kansas ("BBOK") and University National Bank ("UNB")'s objections to the Debtor's use of cash collateral were overruled by the Court. Kaw Valley Bank ("KVB"), which asserts that its claim is superior to the claims of BBOK and UNB, consented to the use of cash collateral. The Debtor and KVP dispute the validity of BBOK's first priority pre-petition lien and the validity of UNB's second lien position. The Court finds that creditors BBOK and UNB presently are not entitled to adequate protection under 11 U.S.C. Sec. 553(b) and 11 U.S.C. Sec. 361 beyond or in addition to the replacement liens, except as may be required under 11 U.S.C. Sec. 362(d)(3). Under 362(d)(3), the Debtor, as a single asset real estate debtor, must submit not later than 90 days from the entry of the order for relief, a Plan of Reorganization that has a reasonable possibility of being confirmed within a reasonable time, or the Debtor will commence monthly payments in an amount equal to the non-default contract rate of interest on the value of BBOK's interest in the real estate, a monthly payment payable to BBOK as a form of adequate protection. BBOK and UNB will have and are granted additional and replacement security interests and liens, in the same priorities as were present prepetition, in and upon all past and future postpetition cash collateral assets of the Debtor. This additional and replacement lien will only exist to the extent that the Court determines that the claimed liens of BBOK and UNB are valid, prior and enforceable liens as to the Debtor's property. BBOK and UNB, either or both as the case may be, will have an allowed superpriority administrative expense claim as provided and to the full extent allowed by Sections 503(a), 507(a) and 507(b) of the Bankruptcy Code. About Bluejay Properties Based in Junction City, Kansas, Bluejay Properties, LLC, doing business as Quinton Point, filed a bare-bones Chapter 11 petition (Bankr. D. Kan. Case No. 12-22680) in Kansas City on Sept. 28, 2012. Bankruptcy Judge Robert D. Berger presides over the case. Todd A. Luckman, Esq., at Stumbo Hanson, LLP in Topeka. The Debtor owns the Quinton Point Apartment Complex in Kansas City valued at $17 million. The Debtor scheduled liabilities of $13,112,325. The petition was signed by Michael L. Thomas of TICC Prop., managing member. Bankers' Bank of Kansas, owed approximately $13.08 million, is represented by Arthur S. Chalmers of Hite, Fanning & Honeyman, LLP. The University National Bank, owed approximately $1.2 million, is represented by Edward J. Nazar of Redmond & Nazar, L.L.P., and Todd Thompson of Thompson Ramsdell & Qualseth, P.A. BOMBARDIER RECREATIONAL: Moody's Affirms 'B1'; Rates Loan 'B1' -------------------------------------------------------------- Moody's Investors Service affirmed Bombardier Recreational Products Inc.'s ("BRP") B1 corporate family rating (CFR), B1-PD probability of default rating, Ba1 senior secured revolving credit facility rating, and assigned a B1 rating to BRP's proposed senior secured term loan. Net proceeds from the new $1.05 billion term loan will be used to refinance $655 million of existing term loans and pay dividends of $375 million to its private owners. The B1 ratings on existing term loans were affirmed and will be withdrawn when the refinancing transaction closes. The rating outlook remains stable. BRP's B1 CFR was affirmed as it already incorporated the potential that a debt-financed dividend recapitalization would occur given the company's improved results since the 2008/2009 downturn. As well, pro-forma credit metrics remain supportive of the rating (adjusted Debt/EBITDA of 4.3x and EBITA/Interest of 2.3x). Ratings Assigned: $1.05 billion secured term loan due 2019, B1 (LGD4, 52%) Ratings Affirmed: Corporate Family Rating, B1 Probability of Default Rating, B1-PD $350 million secured revolving credit facility due 2016, Ba1 (LGD1, 7%) $530 million secured term loan due 2016, B1 (LGD4, 52%) $125 million secured term loan due 2016, B1 (LGD4, 52%) Outlook: Remains Stable RATINGS RATIONALE BRP's B1 CFR primarily reflects event risk related to its majority ownership by financial sponsors as well as the cyclical demand for its high-priced, discretionary products. The rating also reflects Moody's modest volume growth expectations for BRP's established products into the medium term due to ongoing economic challenges, elevated consumer debt and high unemployment levels. However, the rating considers BRP's well-recognized global brands and leading market positions, efficient management of dealer inventory levels, good liquidity, and demonstrated ability to successfully launch new products. Moody's expects stable demand for existing products and growth from new product introductions to drive improved profitability and free cash flow which will enable the company's adjusted Debt/ EBITDA to fall towards 3.5x within the next 12 to 18 months. The rating is stable because Moody's expects further improvement in BRP's credit metrics in the next 12 to 18 months, while the potential for additional re-leveraging dividends to its private equity owners remains. The rating would be upgraded if BRP's adjusted Debt/EBITDA was sustained below 3x, EBITA/Interest was sustained above 3.5x and Moody's was to gain confidence that BRP would not be highly levered through shareholder actions. This would be associated with a material decline in the ownership of BRP by its financial sponsors. The ratings could be downgraded should increased debt levels, cash distributions to private owners or earnings shortfalls result in adjusted Debt/ EBITDA being sustained above 4x and EBITA/ Interest below 2x. The principal methodology used in rating Bombardier Industry Methodology Global Consumer Durables Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Bombardier Recreational Products Inc. is a leading global manufacturer of motorized recreational products, including snowmobiles, personal watercraft, all-terrain vehicles, motorcycles and related products. Revenue for the last twelve months ended October 31, 2012 was $2.9 billion. The company is headquartered in Valcourt, Quebec, Canada. BROOKE CORP: Court Dismisses Portions of NCMIC Counterclaims ------------------------------------------------------------ Bankruptcy Judge Dale L. Somers granted, in part, and denied, in part, the request of the Chapter 7 Trustee of Brooke Corporation and its affiliated debtors to dismiss counterclaims asserted by NCMIC Finance Corporation in the lawsuit, CHRISTOPHER J. REDMOND, Chapter 7 Trustee of Brooke Corporation, Brooke Capital Corporation (f/k/a Brooke Franchise Corporation), and Brooke Investments, Inc.; Plaintiff, v. NCMIC FINANCE CORPORATION, Defendant, Case No. 08-22786 (Bankr. D. Kan.). The motion presents the question whether a creditor's claims for damages allegedly caused by the tortious acts of a custodian, who was superseded by the filing of a petition under Chapter 11 and the appointment of a Chapter 11 Trustee, are entitled to administrative priority under 11 U.S.C. Sec. 503(b)(1)(A) or (b)(3)(E). After carefully considering the pleadings and the oral arguments of counsel, the Court held that only the claims arising from postpetition conduct are eligible for administrative expense status, but that, except for the one claim that was asserted in NCMIC's proof of claim, administrative expense status for those claims is barred by a prior Court order. As to NCMIC's prayer that the counterclaims defeat the Chapter 7 Trustee's fraudulent conveyance claims against it, the Court held that only the counterclaims arising from postpetition conduct are eligible for offset under Sec. 553 and that recoupment is not available for any of the counterclaims. NCMIC, which began its relationship with Brooke in 1998, initially fulfilled a "warehouse" financing role for Brooke agency franchise loans, holding the loans until they were securitized or sold to community banks. Later, NCMIC provided insurance premium financing and merchant credit card processing services to Brooke agents/franchisees. In addition, NCMIC purchased various participation interests in loans which Aleritas made to Brooke agents. The Chapter 7 Trustee filed his adversary proceeding against NCMIC on May 5, 2012. The Complaint alleges five counts: Count I for avoidance of a security interest; Counts II and III for recovery of allegedly preferential transfers; and Counts IV and V for recovery of allegedly constructively fraudulent transfers. Counts I, II, and III were dismissed by consent, after NCMIC filed a motion for summary judgment. NCMIC describes the Chapter 7 Trustee's pending claims to avoid fraudulent transfers as seeking recovery of: (1) $5.6 million in loan payments made by Brooke Credit Corporation, d/b/a Aleritas Capital Corporation, a majority-owned subsidiary of Brooke Corp., which did not file for bankruptcy, on loans to franchisees that were assigned to NCMIC; (2) $17 million in loan payments to other lenders which allegedly benefitted NCMIC; and (3) $22.3 million in franchisees' operating expenses that were paid to third parties, such as landlords and utility companies, which allegedly benefitted NCMIC. NCMIC denied the allegations and asserted "Counterclaim for Purposes of Recoupment, Offset and/or Administrative Claim". NCMIC seeks compensation for multi-million dollar losses allegedly relating to activities engaged in during the period that a special master was in charge of the Debtors' estates, plus limited claims for the conduct of the Special Master, Albert A. Riederer, who also served as Chapter 11 Trustee. A copy of the Court's Jan. 15, 2013 Memorandum Opinion and Order is available at http://is.gd/5q1VdLfrom Leagle.com. About Brooke Corp. Based in Kansas, Brooke Corp. -- http://www.brookebanker.com/-- was an insurance agency and finance company. The company owned 81% of Brooke Capital. The majority of the company's stock was owned by Brooke Holding Inc., which, in turn was owned by the Orr Family. A creditor of the family, First United Bank of Chicago, foreclosed on the BHI stock. The company's revenues were generated from sales commissions on the sales of property and casualty insurance policies, consulting, lending and brokerage services. Brooke Corp. and Brooke Capital Corp. filed separate petitions for Chapter 11 relief on Oct. 28, 2008; Brooke Investments, Inc. filed for Chapter 11 relief on Nov. 3, 2008 (Bankr. D. Kan. Lead Case No. 08-22786). Angela R. Markley, Esq., was the Debtors' in-house counsel. Albert Riederer was appointed as the Debtors' Chapter 11 trustee. He acted as special master of Brooke in prepetition federal court proceedings. Benjamin F. Mann, Esq., John J. Cruciani, Esq., and Michael D. Fielding, Esq,, at Husch Blackwell Sanders LLP, and Kathryn B. Bussing, Esq., at Blackwell Sanders LLP, represented the Chapter 11 trustee as counsel. David A. Abadir, Esq., and Robert J. Feinstein, Esq., at Pachulski Stang Ziehl & Jones LLP, Kristen F. Trainor, Esq., and Mark Moedritzer, Esq., at Shook, Hardy & Bacon, represented the Official Committee of Unsecured Creditors as counsel. The Debtors disclosed assets of $512,855,000 and debts of $447,382,000. On Oct. 29, 2008, the Court granted a motion to jointly administer the bankruptcies of Brooke Corporation, Brooke Capital, and Brooke Investment with the Brooke Corporation bankruptcy case being the lead case. The case was converted to Chapter 7 on June 29, 2009. Christopher J. Redmond was named Chapter 7 Trustee. He is represented by Benjamin F. Mann, Esq., John J. Cruciani, Esq., and Michael D. Fielding, Esq., at Husch Blackwell LLP. CAMARILLO PLAZA: To Seek Approvla of Plan Disclosures Jan. 24 ------------------------------------------------------------- Camarillo Plaza, LLC, filed with the Bankruptcy Court its Plan of Liquidation and an explanatory Disclosure Statement. The hearing to consider the adequacy of the Disclosure Statement will be held on Jan. 24, 2013, at 10:00 a.m. The Debtor has found a buyer for its property, an 8.54-acre with 74,000 net rentable square feet of retail commercial space. Secured creditors Wells Fargo Bank, N.A., as Trustee for the Registered Holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Pass-Through Certificates, Series 2006-C3, has agreed to cooperate in consummating the sale. The Debtor and the Lender expect to resolve the amount of Lender's claim by the time of confirmation of the Plan. The current purchase offer is for $18.2 million. The Lender's asserted secured claim is $12.7 million as of July 16, 2012. The purchase price will be paid by (i) assumption of the Loan by the purchaser, and (ii) the balance in cash. The $18.2 million offer is subject to overbid on the terms set forth in the bidding procedures. The net cash proceeds of the sale are expected to be sufficient to pay all creditors 100% of their allowed claims. General unsecured creditors will be paid 100% of their allowed claims without interest as soon as practicable after the close of escrow. About Camarillo Plaza Shopping center operator Camarillo Plaza LLC, based in Los Angeles, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-59637) on Dec. 5, 2011. Judge Sheri Bluebond was assigned to the case. At the Debtor's behest the next day, the case was transferred to the Northern Division (Bankr. C.D. Calif. Case No. 11-bk-15562). The case in the Los Angeles Division was closed, and Judge Robin Riblet took over from Judge Bluebond. The Debtor scheduled assets of $21.6 million and liabilities of $12.3 million as of the Chapter 11 filing. Janet A. Lawson, Esq., in Ventura County, California, serves as the Debtor's counsel. The petition was signed by Aaron Arnold Klein, managing partner. CASPIAN SERVICES: Incurs $15.95-Mil. Net Loss in Fiscal 2012 ------------------------------------------------------------ Caspian Services, Inc., filed on Jan. 15, 2013, its annual report on Form 10-K for the fiscal year ended Sept. 30, 2012. Hansen, Barnett & Maxwell, P.C., the Company's independent accountants, noted that a creditor has indicated that it believes the Company may be in violation of certain covenants of certain substantial financing agreements. "The financing agreements have acceleration right features that, in the event of default, allow for the loan and accrued interest to become immediately due and payable. As a result of this uncertainty, the Company has included the note payable and all accrued interest as current liabilities at Sept. 30, 2012. At Sept. 30, 2012, the Company had negative working capital of approximately $60,273,000. Uncertainty as to the outcome of these factors raises substantial doubt about the Company's ability to continue as a going concern." The Company reported a net loss of $15.95 million on $24.89 million of revenues in fiscal 2012, compared with a net loss of $12.01 million on $49.5 million of revenues in fiscal 2011. During fiscal 2012 revenue from vessel operations decreased 46% to $17.69 million, while revenue from geophysical services fell 59% to $6.31 million. The Company's balance sheet at Sept. 30, 2012, showed $87.48 million in total assets, $85.05 million in total liabilities, and shareholders' equity of $2.43 million. According to the regulatory filing, EBRD has verbally notified the Company that it believes the Company is in violation of at least some of the financial covenants of its financing agreements. EBRD May Force Company into Bankruptcy "As of Sept. 30, 2012, the outstanding amount due to the European Bank for Reconstruction and Development was $21,319,000. In addition, were EBRD to accelerate its put option the accelerated put price would be $10,000,000 plus an internal rate of return of 20% per annum, which at Sept. 30, 2012, was $17,822,000." "If we were unable to obtain funding to repay the loan or satisfy the put, we anticipate EBRD could seek any legal remedies available to it to obtain repayment of its loan. These remedies could include forcing the Company into bankruptcy. As the financing provided to us by EBRD is secured by mortgages on the real property, assets and bank accounts of Balykshi LLP and Caspian Real Estate, Ltd, and guaranteed by the Company, EBRD could also pursue remedies under those security agreements, including foreclosing on the marine base and other assets." A copy of the Form 10-K is available at http://is.gd/LAzcJ2 Headquartered in Salt Lake City, Caspian Services, Inc., was incorporated under the laws of the state of Nevada on July 14, 1998. Since February 2002 the Company has concentrated its business efforts to provide diversified oilfield services to the oil and gas industry in western Kazakhstan and the Caspian Sea, including providing a fleet of vessels, onshore, transition zone and marine seismic data acquisition and processing services and a marine supply and support base in the port of Bautino, in Bautino Bay, Kazakhstan. CATALYST PAPER: Marks Return to TSX with Opening Siren ------------------------------------------------------ Catalyst Paper is marking its return to publicly traded status earlier this month by opening the market at Toronto Stock Exchange on Jan. 15, 2013. Catalyst President and Chief Executive Officer Kevin J. Clarke, is being joined by board member Todd Dillabough, other Catalyst executives and representatives of several key stakeholder groups to mark the event. Catalyst's new class of common shares began trading on TSX under the symbol CYT on Jan. 7, 2013. This follows the successful conclusion of a reorganization conducted last year under the Companies' Creditors Arrangement Act, through which Catalyst achieved significant debt and operating cost reductions. "Everyone - employees, customers, suppliers and others - got behind the need to change, adapt and innovate," says Clarke. "Starting the trading day is a great way to mark the fresh start that we've collectively secured." In the spirit of communities and commerce, Clarke was joined in initiating the siren by Adrian Dix, Member of the British Columbia Legislative Assembly and Leader of the Official Opposition, and Vice-President Lorne Richmond of YPG, the country's largest directory publisher and a longstanding Catalyst customer. About Catalyst Paper Catalyst Paper Corp. -- http://www.catalystpaper.com/-- manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With four mills, located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 1.9 million tons. The Company is headquartered in Richmond, British Columbia, Canada and its common shares trade on the Toronto Stock Exchange under the symbol CTL. Catalyst on Dec. 15, 2011, deferred a US$21 million interest payment on its outstanding 11.00% Senior Secured Notes due 2016 and Class B 11.00% Senior Secured Notes due 2016 due on Dec. 15, 2011. Catalyst said it was reviewing alternatives to address its capital structures and it is currently in discussions with noteholders. Perella Weinberg Partners served as the financial advisor. In early January 2012, Catalyst entered into a restructuring agreement, which will see its bondholders taking control of the company and includes an exchange of debt for equity. The agreement said it would slash the company's debt by C$315.4 million ($311 million) and reduce its cash interest expenses. Catalyst also said it will continue to "operate and satisfy" its obligations to customers, trade creditors, employees and retirees in the ordinary course of business during the restructuring process. On Jan. 17, 2012, Catalyst applied for and received an initial court order under the Canada Business Corporations Act (CBCA) to commence a consensual restructuring process with its noteholders. Affiliate Catalyst Paper Holdings Inc., filed for creditor protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 12-10219) on the same day and sought recognition of the Canadian proceedings. Catalyst joins a line of paper producers that have succumbed to higher costs, increased competition from Asia and Europe, and falling demand as more advertisers and readers move online. In 2011, Cerberus Capital-backed NewPage Corp. filed for bankruptcy protection, followed by SP Newsprint Co., owned by newsprint magnate and fine art collector Peter Brant. In December, Wausau Paper said it will close its Brokaw mill in Wisconsin, cut 450 jobs and exit its print and color business. The Supreme Court of British Columbia granted Catalyst creditor protection under the CCAA until April 30, 2012. As reported by the TCR on July 2, 2012, Catalyst received approval for its reorganization plan from the Supreme Court of British Columbia. The Company's second amended plan under the Companies' Creditors Arrangement Act received 99% support from creditors. As reported by the TCR on Sept. 17, 2012, Catalyst Paper has successfully completed its previously announced reorganization pursuant to its Second Amended and Restated Plan of Compromise and Arrangement under the Companies' Creditors Arrangement Act. Catalyst Paper's balance sheet at Sept. 30, 2012, showed C$1.04 billion in total assets, C$887.3 million in total liabilities and C$152.8 million in equity. CGMT INC: Mayer Says 'Absurd' Malpractice Suit Rightly Nixed ------------------------------------------------------------ Megan Stride of BankruptcyLaw360 reported that Mayer Brown LLP and health care manager CMGT Inc.'s bankruptcy trustee sparred before the Seventh Circuit on Wednesday, with the firm calling the trustee's $17 million malpractice suit over a contract fight improperly prepared and "absurd" while the trustee argued to revive the malpractice case. CMGT trustee David Grochocinski filed suit accusing Mayer Brown of committing malpractice by failing to defend CMGT in a California breach of contract suit filed by Spehar Capital LLC, a consultant hired to help CMGT obtain financing, the report said. About CMGT Inc. In early 2004, Spehar Capital, LLC, a venture capital consulting firm, secured a $17 million default judgment against CMGT, Inc., in California state court. Seeking to recover the $17 million judgment, SC filed a single- creditor involuntary bankruptcy petition against CMGT in Illinois (Bankr. N.D. Ill. Case No. 04 B 31669). David Grochocinski, in his capacity as Chapter 7 Trustee for the bankruptcy estate of CMGT, sued Mayer Brown Rowe & Maw LLP and Ronald B. Given, one of its attorneys, for legal malpractice. CHRIST HOSPITAL: Looks to Liquidating Chapter 11 Plan ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Christ Hospital sold the 367-bed acute-care hospital in Jersey City, New Jersey, in July and is looking for a fourth expansion of the exclusive period for filing a Chapter 11 plan. According to the report, the hospital said it's talking with creditors and the Pension Benefit Guaranty Corp. about "consensual confirmation of a plan to provide for a distribution to all creditors." The exclusivity motion will be a topic for discussion at a Jan. 28 hearing, the report discloses. The hospital was sold to Hudson Hospital Holdco LLC from Philadelphia under a contract calling for $29.5 million in cash, the cost of curing defaults on contracts, plus $3.5 million paid to the PBGC. About Christ Hospital Christ Hospital filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 12-12906) on Feb. 6, 2012. Christ Hospital, founded in 1872 by an Episcopalian priest, is a 367-bed acute care hospital located in Jersey City, New Jersey at 176 Palisade Avenue, serving the community of Hudson County. The Debtor is well-known for its broad range of services from primary angioplasty for cardiac patients to intensity modulated radiation therapy for those battling cancer. Christ Hospital is the only facility in Hudson County to offer IMRT therapy, which is the most significant breakthrough in cancer treatment in recent years. Christ Hospital filed for Chapter 11 after an attempt to sell the assets fell through. Judge Morris Stern presides over the case. Lawyers at Porzio, Bromberg & Newman, P.C., serve as the Debtor's counsel. Alvarez & Marsal North America LLC serves as financial advisor. Logan & Company Inc. serves as the Debtor's claim and noticing agent. The Health Professional and Allied Employees AFT/AFI-CIO is represented in the case by Mitchell Malzberg, Esq., at Mitnick & Malzberg P.C. CLEAR CREEK: Court OKs Reduction of Allen Matkins' Role in Case --------------------------------------------------------------- Clear Creek Ranch II, LLC, et al. sought and obtained from the U.S. Bankruptcy Court for the District of Nevada an order: -- terminating their employment of Allen Matkins Leck Gamble Mallory & Natsis LLP as general reorganization counsel; -- employing and substituting the Law Offices of Amy N. Tirre, a Professional Corporation, as new general reorganization counsel; and -- employing Allen Matkins as special transactional counsel. The Debtors relate that since the commencement of the Chapter 11 cases, Allen Matkins has represented the Debtors as general counsel, including as reorganization counsel, and the Tirre Firm has served as counsel for local matters, including practice in the Bankruptcy Court and the occasional matter of Nevada law. The Debtors add that Allen Matkins will have no further responsibility for Chapter 11 matters. After Oct. 5, 2012, sole responsibility for Chapter 11 matters will lie with the Tirre Firm which is fully cognizant of all pending or uncompleted matters and deadlines by virtue of its part and ongoing involvement in the cases. As special transactional counsel, Allen Matkins will assist with the Debtors' negotiation, formulation, and preparation of various transactional documents with their new financial partner so as to facilitate and fund their reorganization. To the best of the Debtors' knowledge, Allen Matkins and its attorneys do not hold any interest adverse to the Debtors. About Clear Creek Ranch II Minden, Nevada-based Clear Creek Ranch II LLC owns a 530.74-acre undeveloped residential subdivision located within the project known as Clear Creek. That project included a world-class golf course, the residential subdivision around the golf course, a lake house on Lake Tahoe and a fly fishing ranch along the West Walker River. The co-developers and joint venturers of the Project are CCR II's affiliate, Clear Creek at Tahoe LLC, and entities affiliated with Nevada businessman John Serpa, Sr., and his sons. On April 30, 2010, the Serpas purchased the $15 million First Horizon Loan secured by the residential subdivision, and then threatened foreclosure to coerce CCT to pay money on both the First Horizon Loan and the (Serpa-owned) Nevada Friends, LLC Note. The Serpas then scheduled a foreclosure sale for the Residential Subdivision for July 18, 2011. On July 18, 2011, Clear Creek Ranch II and Clear Creek at Tahoe filed separate Chapter 11 bankruptcy petitions (Bankr. D. Nev. Case Nos. 11-52302 and 11-52303). In its petition, Clear Creek Ranch II estimated assets and debts of $10 million to $50 million. The petitions were signed by James S. Taylor, the Trustee. Judge Bruce T. Beesley presides over the cases. Vincent M. Coscino, Esq., Thomas E. Gibbs, Esq., and Richard M. Dinets, Esq., at Allen Matkins Leck Gamble Mallory & Natsis LLP, in Irvine, Calif., represented the Debtors as general reorganization counsel. Amy N. Tirre, Esq., at the Law Offices of Amy N. Tirre, APC, in Reno, Nev., served as the Debtors as local reorganization counsel. Beginning Oct. 5, 2012, the Tirre took the lead role, and the Allen Matkins firm agreed to serve as special counsel. No creditors' committee has been appointed by the Office of the United States Trustee. CLEARWATER PAPER: Moody's Affirms 'Ba2' CFR; Rates Sr Notes 'Ba2' ----------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Clearwater Paper Corporation's proposed $250 million senior unsecured notes due 2023. Moody's also upgraded the ratings on Clearwater's existing senior unsecured notes to Ba2 from Ba3. The company's Ba2 corporate family rating (CFR) and SGL-2 speculative-grade liquidity rating are affirmed. The outlook remains stable. Proforma for the new notes, the senior unsecured notes and other equally-ranked liabilities constitute an increased majority of debt at Clearwater and the recovery expectations for the unsecured notes are now the same as for the company overall. As a result the senior unsecured rating has been upgraded to "Ba2" to be in line with the company's CFR. Moody's took the following rating actions: Assigned Ba2 (LGD4 59%) rating to the proposed senior unsecured notes due 2023 Upgraded existing senior unsecured notes to Ba2 (LGD4 59%) from Ba3 (LGD4 61%) The proceeds from the proposed notes will be used to repay $150 million senior unsecured notes due 2016 and to finance the company's announced share repurchase program. The proposed notes will rank equally with Clearwater's existing $375 million senior unsecured notes due 2018. The company's Ba2 senior unsecured rating incorporates the noteholders' position behind the company's $125 million asset-backed revolver (unrated). All the ratings are subject to the conclusion of the proposed transaction and Moody's review of final documentation. RATINGS RATIONALE Clearwater's Ba2 corporate family rating reflects the company's significant position as one of the leading North American producers of private label tissue products and bleached paperboard. The rating incorporates the relative demand stability of the high-end tissue and paper packaging markets and expectations of adjusted leverage of about 3x. The rating also reflects the company's vulnerability to larger and financially stronger branded tissue producers in the highly competitive consumer products industry. The company's cash flow generation is projected to improve over the next year as the additional capital spending associated with the build-out of the company's new North Carolina tissue mill will be complete and the new mill is expected to be operating at its full production run rate (70,000 tons) by the start of 2014. The stable rating outlook reflects Moody's expectation that Clearwater will complete its North Carolina tissue expansion as scheduled and that the company's normalized operating and financial performance will be in line with its rating. An upgrade may be considered if normalized adjusted Debt to EBITDA is expected to be sustained below 3x and (RCF-CapEx)/TD exceeds 10%. Should Moody's expectation of leverage increase above 4x, or if liquidity arrangements deteriorate significantly, the rating may be susceptible to downwards pressure. The principal methodology used in rating Clearwater Paper Corporation was the Global Paper and Forest Products Industry Methodology published in September 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Spokane Washington, Clearwater is a leading North American producer of private label tissue products and bleached paperboard. CLEARWATER PAPER: S&P Rates New $250MM Senior Unsecured Notes 'BB' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB' issue-level rating (the same as the corporate credit rating) to Spokane, Wash.-based Clearwater Paper Corp.'s proposed $250 million senior unsecured notes. S&P assigned the notes a '3' recovery rating, which indicates S&P's expectation for meaningful (50% to 70%) recovery in the event of a payment default. S&P expects proceeds to be used to repay $150 million 10.625% senior secured notes due 2016 and for general corporate purposes. "The ratings on Clearwater reflect our expectation for modest top line growth and slightly better EBITDA margins in 2013. Pro forma leverage climbs closer to 3.5x EBITDA, on higher absolute debt levels. However, this higher pro forma leverage estimate remains well within the 3x to 4x range we view to be consistent with Clearwater's "significant" financial risk profile. We also view the paper producer to have a "fair" business risk profile based on its vertical integration and geographic diversity. Still, Clearwater faces competition from larger and better capitalized competitors. For our most recent corporate credit rationale, see our summary analysis on Clearwater published Jan. 4, 2013, on RatingsDirect," S&P said. RATINGS LIST Clearwater Paper Corp. Corporate credit rating BB/Stable/-- New Ratings Proposed $250 mil sr unsecd notes BB Recovery rating 3 COASTAL REALTY: Court Rules on Ozarks Disclosure Objection ---------------------------------------------------------- Bankruptcy Judge John S. Dalis denied, in part, and sustained, in part, the Bank of the Ozarks' objection to the Disclosure Statement and Amended Disclosure Statement explaining Coastal Realty Investments, Inc.'s Chapter 11 plan. Judge Dalis said the Amended Disclosure Statement should include a copy of any agreement(s) personally guaranteeing the Debtor's debt to Ozarks as well as a narrative explanation of whether the Debtor disputes the agreement(s). The Amended Disclosure Statement should also include an explanation of how the Debtor calculates the figures listed in the monthly budget attached to the Amended Disclosure Statement. To the extent that Ozarks' objection relates to the deficiency of the items, Judge Dalis said the objection is sustained. To the extent that Ozarks' objection advances grounds for disapproval based on the feasibility of the amended plan or the inadequacy of the Amended Disclosure Statement in general, the objection is overruled. Ozarks is a creditor whose $1,148,386 claim is secured by Coastal Realty's condominium property. In addition to Ozarks, the Debtor has two other secured creditors, First Glynn Bank, a division of First Chatham Bank, and Certus Bank, N.A., and six unsecured creditors. On Aug. 15, 2012, the Debtor filed a Chapter 11 plan of reorganization and disclosure statement, and shortly thereafter, a hearing on the disclosure statement was set for Oct. 11, 2012. Before the hearing date, both the United States Trustee and Ozarks filed objections to the disclosure statement, and in response to those objections, on Oct. 9, 2012, the Debtor filed an amended chapter 11 plan and an amended disclosure statement. At the October hearing, the Court continued the matter until Nov. 15, 2012 and ordered that any objections to the Amended Disclosure Statement be filed by Nov. 8, 2012. On that date, Ozarks filed another objection to both the Disclosure Statement and the Amended Disclosure Statement. At the November hearing, the United States Trustee withdrew his objection to the disclosure statement, but Ozarks did not. Instead, Ozarks contended that the Disclosure Statement and the Amended Disclosure Statement lacked sufficient information to allow creditors to make informed decisions about the feasibility of the Amended Plan, and urged the Court to consider each ground set forth in the Amended Objection. At the November hearing, property appraiser Richard Freeman testified that using two methods of appraisal, he considered the Coastal Condos to be worth $1,375,000 if furnished and $1,345,000 if unfurnished. Based on the evidence presented, at the conclusion of his testimony, the Court set the value of the property at $1,375,000. Judge Dalis noted that the $1,375,000 matches the Debtor's asset valuation attached to the Amended Disclosure Statement, and Ozarks is oversecured in the amount of $226,613. A copy of the Court's Jan. 17, 2013 Opinion and Order is available at http://is.gd/wfBfLwfrom Leagle.com. Brunswick, Georgia-based Coastal Realty Investments, Inc., is a corporation founded in May 2001 for the purpose of buying and selling real estate. As part of its business, Coastal Realty purchased several properties, one of which was a 32 unit condominium complex housing short-term renters in the Brunswick area. When Coastal Realty began renting the Condos, an average of 80% to 90% of the units were occupied. However, in early 2011, half of the Condos units were vacated within a timespan of three weeks, and the occupancy rate dropped by around 50%. Coastal Realty filed a Chapter 11 bankruptcy petition (Bankr. S.D. Ga. Case No. 12-20564) on May 21, 2012, listing between $1 million and $10 million in both assets and debts. The Bankruptcy Court on July 20, 2012, determined that the case was a single asset real estate case with the Coastal Condos property comprising the only asset. Amanda Fordham Williams, Esq., serves as the Debtor's counsel. The petition was signed by Daniel R. Coty, Sr., CFO. DAYTON SUPERIOR: J&K Adrian Lawsuit Goes Back to Alabama Court -------------------------------------------------------------- Bankruptcy Judge Brendan Linehan Shannon in Delaware sent a lawsuit by J & K Adrian Bakery, L.L.C., against Dayton Superior Corporation back to the United States District Court for the Northern District of Alabama where it was originally filed, saying that the Plaintiff's claims are not within the scope of the order confirming Dayton's plan of reorganization. J & K Adrian Bakery, LLC, Plaintiff, v. Dayton Superior Corporation, Defendant, Adv. Proc. No. 12-50950 (Bankr. D. Del.), alleges three counts for damages to the Plaintiff's property: (i) breach of contract for failing to guard, repair, and insure the property as required by the lease; (ii) negligence for failing to guard the property or take reasonable care in keeping the property safe; and (iii) wantonness for failing to take steps to secure the property despite knowledge of trespassing and theft. In the Alabama District Court, the Defendant moved to dismiss or, in the alternative, to transfer to the Delaware Bankruptcy Court. Citing ambiguity in the Reorganized Debtor's Confirmation Order, the Alabama District Court transferred the dispute to the Delaware Bankruptcy Court to determine whether the claims fall under the scope of the Confirmation Order. The Alabama District Court stated that if the claims are not within the scope of the Confirmation Order, the Bankruptcy Court should transfer the case back to Alabama to proceed on the merits of the Plaintiff's state law claims. A copy of the Court's Jan. 15, 2013 Opinion is available at http://is.gd/cWOz7Sfrom Leagle.com. About Dayton Superior Headquartered in Dayton, Ohio, Dayton Superior Corporation (Pink Sheets: DSUPQ) -- http://www.daytonsuperior.com/-- makes and distributes construction products. Aztec Concrete Accessories Inc., Dayton Superior Specialty Chemical Corporation, Dur-O-Wa Inc., Southern Construction Products Inc., Symons Corporation and Trevecca Holdings Inc. were merged with the Company on Dec. 31, 2004. Dayton Superior filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-11351) on April 19, 2009. Lawyers at Latham & Watkins LLP and Richards, Layton & Finger, P.A., served as bankruptcy counsel. Dayton Superior had less than $300 million in assets and debts in excess of $400 million as of the filing. Dayton Superior emerged from Chapter 11 bankruptcy protection effective Oct. 26, 2009, pursuant to a Plan of Reorganization approved by the Bankruptcy Court on Oct. 14. In conjunction with the Plan, Dayton Superior closed its $110 million exit financing facility and new $100 million term loan. DELL CORP: Fitch Likely to Assign 'B' Issuer Default Rating on LBO ------------------------------------------------------------------ Fitch's 2013 technology outlook released earlier in January 2012 stated that speculation around a Dell leveraged buyout (LBO) would re-surface in 2013 but would unlikely be consummated for several reasons. "Since our outlook, press reports indicate that a deal may well be on its way. We believe that should an LBO occur, and keeping in mind that there are a number of different financing scenarios, an issuer default rating in the single -'B' category would be likely," Fitch says. "Depending on the structuring, we believe gross leverage could be between 3.5 times (x) to and 4.5x assuming repatriation of a large portion of Dell's international cash. Leverage could be approximately 1.0x higher should the company seek to raise debt secured by portions of the international cash (as some media outlets have speculated). "We would expect the basis for any going-private transaction would revolve around transforming the company into a smaller, higher margin business over the next three-to-five years that would command a higher enterprise value multiple upon exit than its currently being awardedvalue in the public equity market. "Dell, led by David Johnson (the recently departed head of corporate strategy), has done a solid job of building a portfolio of higher margin end-to-end enterprise solutions of security, networking, storage, and IT management tools. Despite these higher- margin businesses, execution to date has been relatively nascent relative to the company's overall size. High leverage would greatly limit the company's flexibility to address challenges in the highly competitive and evolving technology industry. Dell will continue to face formidable competitors, such as EMC, IBM, Cisco, Oracle, Accenture, HP, and others, all of which will have far greater financial flexibility, should an LBO be completed. "Dell's ability to repatriate its significant offshore cash is a critical determinant in the LBO decision, as it greatly influences the expected rate of return on the transaction and the vast majority of Dell's cash is held offshore. In addition, we have historically stated that a portion of Dell's cash balance is directly tied to the company's negative working capital balance, which results in significant cash usage when revenues declines. Therefore, we believe Dell needs to maintain an adequate cash cushion to offset this liquidity risk, particularly given the weak macro environment and continued poor performance of the company's PC business. "Dell has spent the last several years expanding its financing business beyond the core U.S. market into Canada and Europe. We would require additional clarity around the company's long-term plans in this area, as it would be impossible to finance this business at the corporate level with a sub-investment investment- grade rating without third-party help. The inability to offer financing would place the company at competitive disadvantage. "We fully expect existing unsecured bonds to be subordinated by any potential LBO transaction. The bonds do not contain change of control covenants and the limitation on liens covenant is generally weak for bondholders." DIGITAL DOMAIN: Hudson Bay DIP Loan Extended Until Jan. 31 ---------------------------------------------------------- The Hon. Brendan Shannon of the U.S. Bankruptcy Court for the District of Delaware authorized DDMG Estate, et al., previously known as Digital Domain Media Group Inc., et al., to enter into a first amendment to the Nov. 7, 2012 final order authorizing the Debtors to obtain postpetition financing and use of cash collateral. The Court approved that the "outside date" will be amended to Jan. 31, 2013. A copy of the approved budget is available for free at: http://bankrupt.com/misc/DIGITALDOMAIN_CC_finalorder_amendment.pdf The terms and conditions of the final DIP order will remain in full force and effect, except as specifically amended or modified by the order. As reported in the Troubled Company Reporter on Nov. 26, 2012, the Court authorized, on a final basis, the Debtors, to obtain postpetition superpriority financing from Hudson Bay Master Fund Ltd., as agent on behalf of the DIP lenders. The original terms of the DIP financing included, among other things: * Interim DIP Loan: a term loan facility to be available in (i) a single drawing on the interim closing date in an aggregate principal amount of $8,980,000 in order to provide sufficient working capital to the Company. * Final DIP Loan: a term loan facility to be available in multiple draws on and after the final closing date in the aggregate principal amount equal to $20,122,000, less the interim DIP loan drawn plus the amount of any roll up. * Interest Rate: 12% per annum, to be paid in kind with the interest added to the principal amount of the DIP loans compounded monthly in arrears on the last day of each month. * Maturity date: Dec. 31, 2012. About Digital Domain Port St. Lucie, Florida-based Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/-- engaged in the creation of original content animation feature films, and development of computer-generated imagery for feature films and trans-media advertising primarily in the United States. Digital Domain Media Group, Inc. and 13 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11, 2012, to sell its business for $15 million to Searchlight Capital Partners LP, subject to higher and better offers. At a bankruptcy auction, the principal part of the business was purchased by a joint venture between Galloping Horse America LLC, an affiliate of Beijing Galloping Horse Co., and an affiliate of Reliance Capital Ltd., based in Mumbai. The $36.7 million total value of the contact includes $3.6 million to cure defaults on contracts and $2.9 million in reimbursement of payroll costs. Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. An official committee of unsecured creditors appointed in the case is represented by lawyers at Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP. The company disclosed assets of $205 million and liabilities totaling $214 million. Debt includes $40 million on senior secured convertible notes plus $24.7 million in interest. There is another issue of $8 million in subordinated secured convertible notes. The Debtors also have sought ancillary relief in Canada, pursuant to the Companies' Creditors Arrangement Act in the Supreme Court of British Columbia, Vancouver Registry. DIGITAL DOMAIN: Seeks Approval to Pay Incentive Bonuses ------------------------------------------------------- Stephanie Gleason at Dow Jones' DBR Small Cap reports that Digital Domain Media Group Inc. is asking for a bankruptcy court's permission to pay $63,000 in employee-incentive bonuses as a reward for meeting one of three sale goals. About Digital Domain Port St. Lucie, Florida-based Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/-- engaged in the creation of original content animation feature films, and development of computer-generated imagery for feature films and trans-media advertising primarily in the United States. Digital Domain Media Group, Inc. and 13 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11, 2012, to sell its business for $15 million to Searchlight Capital Partners LP, subject to higher and better offers. At a bankruptcy auction, the principal part of the business was purchased by a joint venture between Galloping Horse America LLC, an affiliate of Beijing Galloping Horse Co., and an affiliate of Reliance Capital Ltd., based in Mumbai. The $36.7 million total value of the contact includes $3.6 million to cure defaults on contracts and $2.9 million in reimbursement of payroll costs. Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. An official committee of unsecured creditors appointed in the case is represented by lawyers at Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP. The company disclosed assets of $205 million and liabilities totaling $214 million. Debt includes $40 million on senior secured convertible notes plus $24.7 million in interest. There is another issue of $8 million in subordinated secured convertible notes. The Debtors also have sought ancillary relief in Canada, pursuant to the Companies' Creditors Arrangement Act in the Supreme Court of British Columbia, Vancouver Registry. DIGITAL DOMAIN: Florida Gov't Unit Hires Bankruptcy Lawyers ----------------------------------------------------------- Brittany Alana Davis, writing for The Miami Herald, reports that Florida's state Department of Economic Opportunity has hired bankruptcy attorneys Sean Cork, Esq., and Albert del Castillo, Esq., at $540 per hour to try to reclaim money awarded in 2009 to Digital Domain Media Group, the animation company behind Titanic and founded by popular director James Cameron. The $20 million in incentives helped lured Digital Domain to Port St. Lucie. But the company filed for bankruptcy in September, closed its offices and laid off 300 Florida workers. Lawyers for the state say Digital Domain broke its contract by failing to notify the state it had filed for bankruptcy. The Department of Economic Opportunity, an office under Gov. Rick Scott, has asked the Legislature for $500,000 to help recoup the state's original $20 million investment. About Digital Domain Port St. Lucie, Florida-based Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/-- engaged in the creation of original content animation feature films, and development of computer-generated imagery for feature films and trans-media advertising primarily in the United States. Digital Domain Media Group, Inc. and 13 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11, 2012, to sell its business for $15 million to Searchlight Capital Partners LP, subject to higher and better offers. At a bankruptcy auction, the principal part of the business was purchased by a joint venture between Galloping Horse America LLC, an affiliate of Beijing Galloping Horse Co., and an affiliate of Reliance Capital Ltd., based in Mumbai. The $36.7 million total value of the contact includes $3.6 million to cure defaults on contracts and $2.9 million in reimbursement of payroll costs. Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. An official committee of unsecured creditors appointed in the case is represented by lawyers at Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP. The company disclosed assets of $205 million and liabilities totaling $214 million. Debt includes $40 million on senior secured convertible notes plus $24.7 million in interest. There is another issue of $8 million in subordinated secured convertible notes. The Debtors also have sought ancillary relief in Canada, pursuant to the Companies' Creditors Arrangement Act in the Supreme Court of British Columbia, Vancouver Registry. EDF RESOURCES: Shut Down by Small Business Administration --------------------------------------------------------- Hackard Law attorneys regularly represent borrowers and guarantors in negotiation with and litigation against lenders. By the time the law firm is engaged, it's not unusual that "the wolf is at our client's front door", and there's limited time for deliberation. Yet a recent case illustrates that an entire wolf pack might also be at the lender's door. EDF Resource Capital, Inc. ("EDF") v. United States Small Business Administration ("SBA") et al. brings the need for lender knowledge to life. EDF was an SBA-authorized Certified Development Company (CDC). As such it was allowed to arrange, close, service and when necessary collect on SBA 504 Loans. EDF, on behalf of the SBA, received processing and closing fees for both originating as well as servicing 504 Loans. Since 2006, EDF has received over $49 million in fees from its participation in the 504 Loan Program. It had the "second largest SBA 504 Loan portfolio of the CDCs currently participating in the 504 Loan Program." But there were, according to the SBA, "significant problems in EDF's systems or controls, deceptive action, substantial law violation, serious compliance problems, and serious reporting failures." Such problems resulted in EDF's closure. An intensive review of SBA's Agency Decision regarding EDF Resource Capital, Inc. is a must- read for EDF borrowers and guarantors seeking to know their lenderi. EDF as a lender in its final months or years of operation was in a precarious position. The SBA record reveals it was insolvent and was not paying the millions that it owed on its SBA reimbursement obligations. EDF was maintaining two sets of accounting books and records: one disclosed to the SBA and one notii. Such conduct hid from the "SBA the status of hundreds of defaulted loans, thus knowingly painting a materially incomplete, misleading and falsely positive picture of its Loan Loss Reserve Fund and of the Fund's ability to protect SBA from the risk of loss." The SBA's Final Agency Decision indicates that EDF refused to pay its payment and loss share obligations. The decision recites that "the nature, extent and severity of EDF's breaches and violations, including the dollar magnitude of the risk, EDF's insolvency, the unwillingness of EDF's management and board to correct identified problems, and program integrity considerations, all warrant the permanent revocation of EDF's 504 program authority and require the permanent transfer of EDF's SBA 504 Loan portfolio." Borrowers and guarantors attempting to negotiate loan settlements with EDF experienced the same type of deceptive actions as those referenced by the SBA. The Final Agency Decision, coupled with a Federal Judge's Memorandum Opinion, go a long way for EDF borrowers and guarantors to know their lender. ELPIDA MEMORY: Wants DIP Loan Extended Until Feb. 15 on Interim --------------------------------------------------------------- Yukio Sakamoto and Nobuaki Kobayashi, as foreign representatives of Elpida Memory, Inc., ask the U.S. Bankruptcy Court for entry of a "bridge order" extending, until Feb. 15, 2013, the liens on U.S. assets granted pursuant to the Court-approved security agreements with Shinseigin Finance Co., Ltd. The Debtor is subject of reorganization proceedings under Japanese law pending before the Tokyo District Court, Eighth Civil Division. On April 27, 2012, the foreign representatives entered into a facility agreement with DIP lender Shinseigin Finance pursuant to which the DIP Lender agreed to provide Elpida with financing through Dec. 28, 2012, and up to a maximum commitment amount of JPY15,000,000,000. According to foreign representatives, the extension is necessary, given the extension of the timetable in the Japan Proceeding for the voting and approval of the Plan. The Debtor is negotiating with the DIP Lender and with Micron regarding an extension of the DIP Facility. It is contemplated that the extension would provide for: a. Extension of the deadline to drawdown from the DIP Facility until March 31, 2013; b. Repayment of the DIP Facility in installment payments made at the end of June, July, and August 2013; c. A reduction of the amount of the DIP Facility from JPY15 billion to JPY10 billion; d. A guaranty of Elpida's repayment of the DIP Facility by Micron and Micron Technology Asia Pacific, Inc.; e. Payment to the DIP Lender of an arrangement fee; and f. No change in the interest rate. The parties are still negotiating the terms of the Micron Guaranty and the definitive documentation of the DIP Facility extension, and the final form of the extended debtor-in-possession financing is not yet known. The foreign representatives note that there is JPY8 billion outstanding under the DIP Facility. the DIP Lender has agreed to allow the DIP Facility to remain outstanding while the extension documents are being finalized and the requested approvals obtained, subject to Elpida's maintenance of an escrow account to backstop its obligations under the facility. About Elpida Memory Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is a Japan-based company principally engaged in the development, design, manufacture and sale of semiconductor products, with a focus on dynamic random access memory (DRAM) silicon chips. The main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM, Mobile RAM and XDR DRAM, among others. The Company distributes its products to both domestic and overseas markets, including the United States, Europe, Singapore, Taiwan, Hong Kong and others. The company has eight subsidiaries and two associated companies. After semiconductor prices plunged, Japan's largest maker of DRAM chips filed for bankruptcy in February with liabilities of 448 billion yen ($5.6 billion) after losing money for five quarters. Elpida Memory and its subsidiary, Akita Elpida Memory, Inc., filed for corporate reorganization proceedings in Tokyo District Court on Feb. 27, 2012. The Tokyo District Court immediately rendered a temporary restraining order to restrain creditors from demanding repayment of debt or exercising their rights with respect to the company's assets absent prior court order. Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo Court as Supervisor and Examiner in the case. Elpida Memory Inc. sought the U.S. bankruptcy court's recognition of its reorganization proceedings currently pending in Tokyo District Court, Eight Civil Division. Yuko Sakamoto, as foreign representative, filed a Chapter 15 petition (Bankr. D. Del. Case No. 12-10947) for Elpida on March 19, 2012. ELPIDA MEMORY: Bondholders Fail to Prove Collusion Claims --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Elpida Memory Inc. bondholders failed to persuade a bankruptcy judge there was any "collusion or improper motives" when the Japanese memory-chip maker agreed to sell technology assets in the U.S. Elpida is in a Chapter 15 bankruptcy in Delaware to supplement the principal bankruptcy reorganization in Japan. The report recounts that technology sales to Micron Technology Inc. and Rambus Inc. were previously approved by the bankruptcy court in Japan. The Micron sale is part of Elpida's proposed reorganization. Bondholders had taken the position that a sale to Boise, Idaho-based Micron for an estimated $1.8 billion at present value would be substantially less than Elpida's liquidation value. In November, U.S. Bankruptcy Judge Christopher Sontchi came down on the side of bondholders in ruling that his approval is required before U.S. assets can be sold, even though he previously recognized Japan as home to the principal Elpida bankruptcy. According to the report, Judge Sontchi wrote a 43-page opinion on Jan. 16 explaining why he is approving the sales. Judge Sontchi concluded from the evidence given at a hearing in December that the Japanese trustees for Elpida "exercised their sound business judgment in negotiating and executing the agreements." The prices were "fair and reasonable," he said. The Delaware judge dismissed the bondholders' argument that a sale was defective because there was no auction. Judge Sontchi said that the Japanese trustees had no obligation to hold an auction after deciding in their business judgment that no better offers were available. Mr. Rochelle notes that the basis for the bondholders' objection was unclear because most of the factual allegations in their publicly filed court documents were blanked out. About Elpida Memory Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is a Japan-based company principally engaged in the development, design, manufacture and sale of semiconductor products, with a focus on dynamic random access memory (DRAM) silicon chips. The main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM, Mobile RAM and XDR DRAM, among others. The Company distributes its products to both domestic and overseas markets, including the United States, Europe, Singapore, Taiwan, Hong Kong and others. The company has eight subsidiaries and two associated companies. After semiconductor prices plunged, Japan's largest maker of DRAM chips filed for bankruptcy in February with liabilities of 448 billion yen ($5.6 billion) after losing money for five quarters. Elpida Memory and its subsidiary, Akita Elpida Memory, Inc., filed for corporate reorganization proceedings in Tokyo District Court on Feb. 27, 2012. The Tokyo District Court immediately rendered a temporary restraining order to restrain creditors from demanding repayment of debt or exercising their rights with respect to the company's assets absent prior court order. Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo Court as Supervisor and Examiner in the case. Elpida Memory Inc. sought the U.S. bankruptcy court's recognition of its reorganization proceedings currently pending in Tokyo District Court, Eight Civil Division. Yuko Sakamoto, as foreign representative, filed a Chapter 15 petition (Bankr. D. Del. Case No. 12-10947) for Elpida on March 19, 2012. EMMONS-SHEEPSHEAD BAY: Can Employ Robinsons Brog as Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York authorized Emmons-Sheepshead Bay Development, LLC, to employ Robinson Brog Leinwand Greene Genovese & Gluck P.C. as Chapter 11 attorneys for the Debtor, effective as of the Petition Date. Robinson Brog will provide these professional services: (a) providing advice to the Debtor with respect to its powers and duties under the Bankruptcy Code in the continued operation of its business and the management of its property; (b) negotiating with creditors of the Debtor, preparing a plan of reorganization and taking the necessary legal steps to consummate a plan, including, if necessary, negotiations with respect to financing a plan; (c) appearing before the various taxing authorities to work out a plan to pay taxes owing in installments; and (d) preparing on the Debtor's behalf necessary applications, motions, motions, answers, replies, discovery requests, forms of orders, reports and other pleadings and legal documents. The Debtor believes that Robinson Brog is a "disinterested person" as that term is defined by the Bankruptcy Code. As compensation, Robinson Brog will receive its customary fees, subject to the submission of appropriate applications and the approval of the Court. Robinson Brog received a $26,046 payment from Emmons Avenue, LLC, an affiliated entity controlled by the Debtor's principal, on Aug. 9, 2012, which amount included the Chapter 11 filing fee. Emmons-Sheepshead Bay Development LLC, the owner of 49 unsold condominium units on Emmons Avenue in Brooklyn, filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 12-46321) on Aug. 30, 2012, in Brooklyn. The Debtor said the property is worth $14 million. It has $32.6 million in total liabilities, including $31 million owed to TD Bank N.A., which is secured by first, second and third priority liens on the property. Judge Elizabeth S. Stong presides over the case. Arnold Mitchell Greene, Esq., at Robinson Brog Leinwand Greene et al., serves as the Debtor's counsel. The petition was signed by Jacob Pinson, managing member, Yachad Enterprises, LLC. EMPRESAS OMAJEDE: Proposes Charles A. Cuprill as Counsel -------------------------------------------------------- Empresas Omajede filed an application to employ Charles A. Cuprill, P.S.C., Law Offices, as counsel. The Debtor is not sufficiently familiar with the law to be able to plan and conduct the proceedings without competent legal counsel. Cuprill is a disinterested entity as defined in 11 U.S.C. Sec. 101(14). The Debtor has tapped the firm on the basis of a $15,000 retainer, against which the firm will bill on the basis of $350 per hour, plus expenses, for worked performed by Charles A. Cuprill- Hernandez, Esq., $225 per hour for any senior associate, $150 per hour for junior associates, $85 for paralegals, upon application and approval of the Court. Empresas Omajede Inc., filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-10113) in Old San Juan, Puerto Rico, on Dec. 21, 2012. Patricia I. Varela, Esq., at Charles A. Cuprill, PSC, serves as counsel. The Debtor disclosed $5,613,568 in assets and $98,762,700 in its schedules. The Debtor is a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B) with principal assets located at La Ectronica Building, 1608 Bori St., in San Juan, Puerto Rico. FIELD FAMILY: Has Access to Cash Collateral Until Jan. 28 --------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania authorized Field Family Associates, LLC, to use its lender's cash collateral until Jan. 28, 2013, in accordance with the approved budget. As adequate protection, the lender is granted replacement liens in all property of the Debtor, whether acquired prior or after the Relief Date; provided such replacement liens will not include causes of action held by the Debtor's estate or related proceeds. A further hearing to consider the use of cash collateral on a final basis is scheduled for Jan. 23, 2013, at 10:00 a.m. The lender, Wells Fargo Bank, N.A., as Trustee for the Registered Holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2007-CIBC18, Commercial Mortgage Pass-Through Certificates, Series 2007-CIBC18), objected to the use of cash collateral, citing that it had not had a meaningful opportunity to review and approve the budget. The lender asserts that as of July 2, 2012, it is owed not less than $38.9 mililion under the loan documents. About Field Family Five creditors filed an involuntary Chapter 11 bankruptcy petition against King of Prussia, Pa.-based Field Family Associates, LLC (Bankr. E.D. Pa. Case No. 12-16331) on July 2, 2012. On Sept. 6, 2012, a sixth creditor filed a Joinder in the involuntary Chapter 11 Petition. The Court entered an order for relief on Sept. 12, 2012. The Debtor owns and operates a 216-room hotel located at 144-10 135th Steet, in Jamaica, New York. Judge Stephen Raslavich presides over the case. Catherine G. Pappas, Esq., Lawrence G. McMichael, Esq., and Peter C. Hughes, Esq., at Dilworth Paxson LLP, in Philadelphia, Pa., represent the Alleged Debtor as counsel. Ashely M. Chan, Esq., at Hangley Aronchick Segal & Pudlin, in Philadelphia, Pa., represents the petitioning creditors as counsel. The U.S. Trustee appointed a three-member creditors committee. Hangley Aronchick Segal Pudline & Schiller represents the Committee. GENERAL MOTORS: Citigroup, JPMorgan to Manage Shares Sale --------------------------------------------------------- Ian Katz and Lee Spears, writing for Bloomberg News, reported that the U.S. Treasury Department chose Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM) to manage the sale of shares in General Motors Co. (GM), as the government works to disentangle itself from the biggest U.S. automaker following the $50 billion bailout that began in 2009. The department announced the selection of the banks in documents on its website, according to the report. It holds about 300 million shares after selling 200 million to Detroit-based GM for $5.5 billion in December. The agency said then that it would sell off the rest of its 19 percent stake within 15 months, starting as soon as January. The banks will get a commission of 1 cent per share for handling the sales, the Treasury documents show. The sale, according to the report, may reassure GM investors weary of the government's influence on the stock. GM had sunk 23 percent from its November 2010 initial public offering price before the sale was disclosed last month. Since going public, GM has announced plans to end losses in Europe by mid-decade and to introduce 13 new Chevrolet models this year to try to increase its share of the U.S. market, Bloomberg noted. Bloomberg said the shares had gained 21 percent in the past year before Jan. 17. They advanced 1 percent to $29.60 at 9:45 a.m. in New York. The U.S. needed to sell its shares for more than $50 each to break even on the GM bailout. Banks' Benefits Citigroup and JPMorgan could potentially make additional money from bid-ask spreads and build relationships with clients, Kip Weissman, a partner representing banks for Luse Gorman Pomerenk & Schick PC in Washington, told Bloomberg. "It's real important for major firms to be major players and to be able to get customers the stock they want," Weissman said. "If the customers are clamoring for getting GM at a good price, JPM and Citi will be able to do that, and that means those customers will use them for other services." For the banks, "there's a certain level of prestige" in handling the sale, Stephen Myrow, a former Treasury official in the George W. Bush administration, told Bloomberg. "They can say, ?Hey, the U.S. Treasury trusts us.' JPMorgan and Citi wouldn't be doing this if they didn't feel it was in their interests." Myrow is now managing director at ACG Analytics Inc., an investment research and consulting firm in Washington. The bailouts of the predecessors of GM and Chrysler Group LLC by U.S. and Canadian governments propped up a light-vehicle industry that has since reported three straight years of at least 10 percent growth, Bloomberg said. GM received $49.5 billion from the U.S. as part of its restructuring, Treasury said Dec. 19. Bailout Costs Last month, Treasury sold its last 234.2 million shares of insurer American International Group Inc. (AIG), marking the end of the rescue more than four years after the U.S. took over the company to save the global economy, Bloomberg related. Proceeds from the sale boosted the U.S. profit on the AIG bailout to $22.7 billion. According to Bloomberg, the Congressional Budget Office projected in October that the Treasury's Troubled Asset Relief Program, which bailed out companies such as AIG, Citigroup and GM, will cost taxpayers $24 billion, down from an estimate of $109 billion in March 2010. The Treasury's latest estimate of the expense to taxpayers for bailing out GM, Chrysler and Ally Financial Inc. (ALLY) amounted to $24.3 billion as of Sept. 30. The department updates the figure on a quarterly basis. U.S. sales of cars and light trucks totaled 14.5 million in 2012, the best since 2007, according to Bloomberg. The 13 percent gain was the biggest since 1984. Auto Profits U.S.-based automakers have said they can now be profitable at industrywide sales of about 10 million vehicles annually in their home market, Bloomberg related. In 2013, industry sales are projected at 15.1 million, the average estimate of 18 analysts surveyed by Bloomberg. Bloomberg noted that GM increased sales in its home market by 3.7 percent last year to 2.6 million. Because its growth didn't match the expansion of industrywide sales, GM's U.S. market share in 2012 plunged to 17.9 percent, an 88-year-low. Chief Executive Officer Dan Akerson told reporters earlier this month the company should see "modest" gains in U.S. market share this year. "It starts and ends with product, that's what we've been focused on since bankruptcy," Akerson told reporters at the company's Detroit headquarters. This year and next "will be good years, not only here domestically but on an international basis." About General Motors With its global headquarters in Detroit, Michigan, General Motors Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. GM employs 208,000 people in every major region of the world and does business in more than 120 countries. GM and its strategic partners produce cars and trucks in 30 countries, and sell and service these vehicles through the following brands: Baojun, Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall, and Wuling. GM's largest national market is China, followed by the United States, Brazil, the United Kingdom, Germany, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government once owned as much as 60.8% stake in New GM on account of the financing it provided to the bankrupt entity. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. General Motors Corp. and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31, 2011. GEORGIA GULF: Commences Cash Tender Offer for Senior Secured Notes ------------------------------------------------------------------ Georgia Gulf Corporation on Jan. 17 disclosed that it has commenced a cash tender offer for any and all of its outstanding $450.0 million aggregate principal amount of 9% Senior Secured Notes due 2017 (CUSIP Nos. 373200AV6 and U37332AG5) (the "Notes"). The Company also announced a concurrent consent solicitation for proposed amendments to the indenture dated as of December 22, 2009 (as amended, supplemented or otherwise modified as of the date hereof, the "Indenture"), among the Company, the guarantors party thereto and U.S. Bank National Association, as trustee (the "Trustee"), under which the Notes were issued. The tender offer and the consent solicitation are being made on the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated January 17, 2013 (the "Offer to Purchase") and the related Letter of Transmittal and Consent. Holders that tender their Notes pursuant to the tender offer will be deemed to have consented to the proposed amendments to the Indenture. The tender offer will expire at 9:00 a.m., New York City time, on February 15, 2013 unless extended or earlier terminated (such time and date, as the same may be extended, the "Expiration Date"). Holders of Notes ("Holders") must tender their Notes and provide their consents to the amendments to the Indenture on or before 5:00 p.m., New York City time, on January 31, 2013, unless extended (such time and date, as the same may be extended, the "Consent Payment Deadline"), in order to be eligible to receive the Total Consideration. Holders of Notes who tender their Notes after the Consent Payment Deadline and on or before the Expiration Date will only be eligible to receive the Tender Offer Consideration. Following the Expiration Date, the Company intends to redeem the balance of outstanding Notes, if any. The following table summarizes the material pricing terms. Outstanding Consent Tender Offer Consent Total Principal Payment Consideration(1) Payment Consideration(1) Amount Deadline $450,000,000 5:00 p.m. $1,094.23 $30.00 $1,124.23 New York City time, January 31, 2013 (1) For each $1,000 principal amount of Notes. Accrued but unpaid interest from, and including, the most recent interest payment date for the Notes to, but not including, the applicable payment date, will be paid in addition to the Tender Offer Consideration or the Total Consideration, as applicable. The "Total Consideration" for each $1,000 principal amount of Notes validly tendered, and not validly withdrawn, prior to the Consent Payment Deadline and accepted for purchase is $1,124.23. The "Tender Offer Consideration" for each $1,000 principal amount of Notes validly tendered, and not validly withdrawn, after the Consent Payment Deadline but prior to the Expiration Date and accepted for purchase is $1,094.23. The Tender Offer Consideration is the Total Consideration minus the Consent Payment (as defined below). Holders who validly tender, and do not validly withdraw, Notes accepted for payment by the Company will also receive accrued and unpaid interest from, and including, the most recent interest payment date for the Notes to, but not including, the applicable payment date. The "Consent Payment" is an amount equal to $30.00 per $1,000 principal amount of Notes and will be payable only with respect to each Note that is validly received, and not validly withdrawn, on or before the Consent Payment Deadline. The Consent Payment is included in the Total Consideration and is not in addition to the Total Consideration. Holders may not tender Notes without delivering consents with respect to such Notes, nor may Holders give their consents in respect of any Notes they do not tender. The tender offer and consent solicitation are subject to the satisfaction or waiver of certain conditions as described in the Offer to Purchase, including (1) receipt by the Company, on or prior to the Initial Acceptance Date (as defined in the Offer to Purchase), of net proceeds from a new debt financing or financings on terms and conditions satisfactory to the Company which will in the aggregate provide the Company with funds sufficient to pay (x) the Total Consideration (as defined below) in respect of all Notes (regardless of the actual amount of Notes tendered) and (y) estimated fees and expenses relating to the Offer to Purchase, (2) the consummation, on or prior to the Initial Acceptance Date, of the Transactions (as defined in the Offer to Purchase), and (3) that (a) Holders of at least a majority in aggregate principal amount of outstanding Notes validly deliver, and do not validly revoke, consents to amend and supplement the Indenture to give effect to the proposed amendments and (b) an amendment to the Indenture is executed by the Company, certain guarantors party thereto and the Trustee. Notes tendered pursuant to the tender offer may be validly withdrawn and consents delivered pursuant to the consent solicitation may be validly revoked at any time on or before 5:00 p.m., New York City time, on January 31, 2013 (the "Withdrawal Deadline"). A Holder may not validly revoke a consent unless such Holder validly withdraws such Holder's previously tendered Notes. Any Notes tendered on or before the Withdrawal Deadline that are not validly withdrawn before the Withdrawal Deadline may not be withdrawn thereafter, and any Notes tendered after the Withdrawal Deadline may not be withdrawn, unless in either case the Company is otherwise required by applicable law to permit the withdrawal. A valid withdrawal of tendered Notes on or before the Withdrawal Deadline shall be deemed a valid revocation of the related consent. The proposed amendments to the Indenture would, among other modifications, eliminate substantially all of the restrictive covenants and certain events of default and modify certain related provisions in the Indenture. Holders of at least a majority in principal amount of the Notes must consent to the amendments to the Indenture for the amendments to the Indenture to become effective. Holders who deliver their consents before the Consent Payment Deadline will receive the Consent Payment (included in the Total Consideration) if the offer is consummated. The Company has engaged Barclays Capital Inc. as dealer manager and solicitation agent for the tender offer and consent solicitation. Persons with questions regarding the tender offer and consent solicitation should contact Barclays Capital Inc. at (800) 438-3242 (toll-free) or (212) 528-7581 (collect). Requests for documents should be directed to D.F. King & Co., Inc., the Information Agent and Tender Agent for the tender offer and consent solicitation, at (212) 269-5550 (bankers and brokers) and (800) 578-5378 (all others). About Georgia Gulf Georgia Gulf Corporation -- http://www.ggc.com-- is an integrated North American manufacturer of two chemical lines, chlorovinyls and aromatics, and manufactures vinyl-based building and home improvement products. The Company's vinyl-based building and home improvement products, marketed under Royal Building Products and Exterior Portfolio brands, include window profiles, patio doors, mouldings, siding, pipe and pipe fittings, soffit, rain ware and decking. Georgia Gulf, headquartered in Atlanta, Georgia, has manufacturing facilities located throughout North America to provide industry-leading service to customers. * * * As reported by the Troubled Company Reporter on January 17, 2013, Standard & Poor's Ratings Services removed its corporate credit rating on Georgia Gulf from CreditWatch, where it had been placed on July 19, 2012, when the parties announced the merger. S&P then raised the rating to 'BB' from 'BB-'. GEORGIA GULF: Moody's Rates $450MM Unsecured Notes 'Ba3' -------------------------------------------------------- Moody's Investors Service assigned at Ba3 rating to Georgia Gulf Corporation's (GGC) $450 million of guaranteed senior unsecured notes due 2023. Proceeds from the transaction plus some balance sheet cash will be used to repay GGC's 9% senior secured notes due 2017 and pay fees and expenses. Moody's also affirmed GGC's existing ratings and will withdraw the ratings on the secured notes upon completion of the transaction. The outlook for GGC and Eagle Spinco is stable. The assigned ratings are subject to receipt of final documentation that is consistent with the draft documentation provided. As PPG has received the required tax letter and GGC has received its shareholder approval, the transaction is expected to close by the end of the month. "This transaction will significantly lower GGC's debt service costs, despite being junior to the debt it is refinancing," stated John Rogers, Senior Vice President at Moody's Investors Service. Ratings assigned: Georgia Gulf Corporation $450 million unsecured notes due 2021 -- Ba3 (LGD4, 69%) Ratings affirmed: Georgia Gulf Corporation Corporate Family Rating at Ba2 Probability of Default Rating at Ba2-PD Speculative Grade Liquidity Rating at SGL-1 Senior secured notes at Ba1 (LGD3, 36%)* Eagle Spinco, Inc. $688 million unsecured notes due 2021 -- Ba3; assessment moved to (LGD4, 69%) from (LGD5, 81%) *: the rating on these notes will be withdrawn upon completion of the transaction Ratings Rationale GGC's Ba2 CFR reflects its position as one of the largest producers of chor alkali upon completion of the merger with Eagle Spinco Inc. (the legal name of the chlor alkali and derivatives business of PPG), strong financial metrics (pro forma Debt/EBITDA of 2.6x and Retained Cash Flow/Net Debt of 26% based on an estimate of full year 2012 results, including Moody's standard adjustments), conservative financial policies, the improvement in GGC's vertical back integration and the expectation that Gulf Coast natural gas costs will provide a sustainable competitive advantage for exports. These notes will be guaranteed by most of GGC's domestic subsidiaries and once the merger with the chlor alkali and derivatives business (Eagle Spinco) of PPG Industries, Inc.'s (PPG, Baa1, stable) is completed, the notes will be guaranteed by Eagle Spinco's subsidiaries as well. These notes will be pari passu with the notes issued by Eagle Spinco earlier this week. As part of the transaction GGC will be changing its name to Axiall Corporation. GGC's speculative Grade Liquidity Rating of SGL-1 will be supported post-merger by cash balances of roughly $140 million and meaningful free cash flow generation. As part of the transaction, GGC will move to a new $500 million ABL revolving credit facility that will be undrawn at close. The key financial covenant in the ABL is a springing consolidated Fixed Charge Coverage Ratio of 1:1. GGC is not expected to approach the level of borrowing that would cause this covenant to be in effect (availability of less than $62.5 million). The outlook is currently stable. However, if the Aromatics and Building Products segments begin contributing greater than 20% of consolidated EBITDA, there could be some upside to the rating. A downgrade is unlikely, but could be possible if there were integration problems or a sustained weakening of credit metrics (over 3.5x Debt/EBITDA & less than 15% Retained Cash Flow/Debt). Georgia Gulf Corporation (GGC), headquartered in Atlanta, Georgia, is a producer of commodity chemicals including chlorovinyls (chlorine, caustic soda, vinyl chloride monomer, polyvinyl chloride resins and vinyl compounds), PVC fabricated products (pipe, siding, window profiles, moldings, etc.), and aromatics (cumene, phenol and acetone). The company generated revenues of $3.2 billion for the LTM ending September 30, 2012. On January 14, 2013, Moody's upgraded the ratings of GGC following the completion of the company's merger with PPG's Commodity Chemicals Business. The combined business is expected to have annual revenues of over $5 billion. The principal methodology used in rating Georgia Gulf Corporation was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. GEORGIA GULF: S&P Assigns BB Rating to $450MM Sr. Unsecured Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BB' senior unsecured debt rating and '3' recovery rating to Georgia Gulf Corp.'s proposed offering of $450 million senior unsecured notes due 2023. The issue rating is the same as the 'BB' corporate credit rating. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. "At the same time, based on our updated recovery analysis, we revised our recovery rating on Georgia Gulf subsidiary Eagle Spinco Inc.'s proposed offering of $688 million of senior unsecured notes due 2021 to '3' from '4'. The 'BB' senior unsecured debt rating on these notes and all our other ratings on Georgia Gulf and Eagle Spinco remain unchanged," S&P said. "The company plans to use proceeds of the $450 million notes offering to redeem its $450 million 9% senior secured notes due 2017," said Standard & Poor's credit analyst Cynthia Werneth. "The ratings reflect what we consider to be Georgia Gulf's "fair" business risk profile following its planned merger with PPG Industries' commodity chemicals business and its "significant" financial risk profile. We expect the key funds from operations to total debt ratio to be about 25%. For the entire corporate credit rating rationale, see our research update on Georgia Gulf, published Jan. 15, 2013, on RatingsDirect," S&P said. RATINGS LIST Rating Unchanged Georgia Gulf Corp. Corporate Credit Rating BB/Stable/-- New Rating Georgia Gulf Corp. $450 mil. senior unsecured notes due 2023 Senior Unsecured BB Recovery Rating 3 Issue Rating Unchanged; Recovery Rating Revised Eagle Spinco Inc. $688 mil. senior unsecured notes due 2021 To From Senior Unsecured BB BB Recovery Rating 3 4 GIBRALTAR KENTUCKY: Jan. 24 Final Hearing on Case Conversion ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Florida will convene a final preliminary hearing on Jan. 24, 2013, at 1:30 p.m., to consider the motion to convert the Chapter 11 case of Gibraltar Kentucky Development, LLC, to one under Chapter 7 of the Bankruptcy Code. Creditors Lindley, Kentucky Central Energy Partners, LLC, Kentucky Central Energy Partners, B&G Energy and Sun Kentucky Central Energy Co. ask the Court for the conversion of the Debtor's case. In seeking the conversion, the Creditors claim, among other things: -- During the pendency of the bankruptcy, the Debtor has failed to generate sufficient income to even pay the legal fees of the Debtor; and -- The Debtor's failure to proceed forward to generate revenues during the pendency of the case to pay its unsecured creditors and equity holders demonstrates that there is no likelihood of rehabilitation. About Gibraltar Kentucky Gibraltar Kentucky Development, LLC, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 12-13289) on Feb. 10, 2012, in West Palm Beach, Florida. Palm Beach Gardens-based Gibraltar Kentucky says that it is not a small business debtor under 11 U.S.C. Sec. 101(51D). Documents attached to the petition indicate that McCaugh Energy LLC owns 42.15% of the "fee simple" securities. According to the Web site http://www.gibraltarenergygroup.com/ Gibraltar Kentucky is part of the Gibraltar Energy Group. The various companies of the group are involved with the drilling, development and production of oil and gas, as well as, the sale of coal and timber. Offices are in Michigan and Florida and investments are in Michigan and Kentucky. Judge Erik P. Kimball presides over the case. David L. Merrill, Esq., at Talarchyk Merrill, LLC, serves as the Debtor's counsel. The Debtor disclosed $175,395,449 in assets and $1,193,516 in liabilities as of the Chapter 11 filing. The petition was signed by Bill Boyd, as manager. Steven R. Turner, Trustee for Region 21, has informed the Court that, until further notice, he will not appoint a committee of creditors. GIBRALTAR KENTUCKY: Plan Outline Hearing Continued Until Jan. 24 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida continued until Jan. 24, 2013, at 1:30 p.m., the hearing to consider adequacy of information in the Amended Disclosure Statement explaining Gibraltar Kentucky Development, LLC's proposed Chapter 11 Plan. As reported in the TCR on Nov. 28, 2012, Donald F. Walton, U.S. Trustee for Region 21, asked the Court to deny approval of the disclosure statement. The U.S. Trustee said the Disclosure Statement does not contain adequate information as required by Section 1125 of the Bankruptcy Code. According to the U.S Trustee, the Disclosure Statement must, among other things: -- disclose the names the equity holders and amount of membership interests held by each party; -- provide more information regarding the Debtor's operations; and -- provide sufficient information regarding the potential income the Debtor may receive from litigation against The Lindley Group. The TCR on Oct. 17 reported the terms of the Plan. The Plan and Disclosure Statement, filed Sept. 21, provides for this treatment of claims: 1. On the Effective Date, each holder of an allowed taxing authority claims will receive payment in full. 2. Allowed general unsecured claims will be paid in full plus interest at 1% on the Confirmation Date. 3. No plan payments other than full retention of paid for membership interests will be made to the equity interest holders of the Debtor. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/GIBRALTAR_KENTUCKY_ds.pdf About Gibraltar Kentucky Gibraltar Kentucky Development, LLC, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 12-13289) on Feb. 10, 2012, in West Palm Beach, Florida. Palm Beach Gardens-based Gibraltar Kentucky says that it is not a small business debtor under 11 U.S.C. Sec. 101(51D). Documents attached to the petition indicate that McCaugh Energy LLC owns 42.15% of the "fee simple" securities. According to the Web site http://www.gibraltarenergygroup.com/ Gibraltar Kentucky is part of the Gibraltar Energy Group. The various companies of the group are involved with the drilling, development and production of oil and gas, as well as, the sale of coal and timber. Offices are in Michigan and Florida and investments are in Michigan and Kentucky. Judge Erik P. Kimball presides over the case. David L. Merrill, Esq., at Talarchyk Merrill, LLC, serves as the Debtor's counsel. The Debtor disclosed $175,395,449 in assets and $1,193,516 in liabilities as of the Chapter 11 filing. The petition was signed by Bill Boyd, as manager. Steven R. Turner, Trustee for Region 21, has informed the Court that, until further notice, he will not appoint a committee of creditors. GREAT BASIN: Voluntarily Delists Common Stock on NYSE MKT --------------------------------------------------------- Great Basin Gold Ltd. formally notified NYSE MKT on Jan. 15, 2013, of its intention to file a Form 25 - Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities Exchange Act of 1934, as amended, with the SEC on or about Jan. 25, 2013. The Company previously disclosed its intention to delist voluntarily its common shares from NYSE MKT. The management believes that under the Company's current financial circumstances, it is not practicable for the Company to maintain a plan of compliance that would satisfy NYSE MKT's continued listing requirements. As such, the Board of Directors of the Company determined that it is in the best interests of the Company to delist voluntarily the Company's common stock from NYSE MKT. The Company expects that the delisting will take effect on or about Feb. 4, 2013. The Company has not arranged for listing or registration of its common shares on another national securities exchange or for quotation of its common shares in a quotation medium. 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. Under the CCAA proceedings, the stay of any potential creditor lawsuits was extended until Jan. 14, 2013. There have been no updates of the CCAA proceedings as of January 17. GLYECO INC: Amends Report on ARI Assets Acquisition --------------------------------------------------- On Oct. 9, 2012, and subsequently amended on Nov. 1, 2012, GlyEco Acquisition Corp. #6, a wholly-owned subsidiary of GlyEco, Inc., acquired the business and all of the glycol-related assets of Antifreeze Recycling, Inc., effective Oct. 29, 2012, pursuant to the Asset Purchase Agreement, dated Oct. 3, 2012, as amended. The Company further amended the Form 8-K to file as exhibits the required financial statements of ARI and pro forma financial information of the Company required by Item 9.01(a) and (b) of Form 8-K and Regulation S-X promulgated by the Commission. Copies of the exhibits are available for free at: http://is.gd/6EcgdE http://is.gd/NyOKSg http://is.gd/ORvAcw About GlyEco, Inc. Phoenix, Ariz.-based GlyEco, Inc., is a green chemistry company formed to roll-out its proprietary and patent pending glycol recycling technology that transforms waste glycols, a hazardous material, into profitable green products. Jorgensen & Co., in Lehi, Utah, expressed substantial doubt about GlyEco's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has not yet achieved profitable operations and is dependent on the Company's ability to raise capital from stockholders or other sources and other factors to sustain operations. The Company's balance sheet at Sept. 30, 2012, showed $1.55 million in total assets, $2.24 million in total liabilities and a $685,243 total stockholders' deficit. GULF FLEET: Court Rules on Summary Judgment Bid in Triple C Suit ---------------------------------------------------------------- Bankruptcy Judge Robert Summerhays granted, in part, and denied, in part, the motion for summary judgment filed by Alan Goodman, the trustee of the Gulf Fleet Liquidating Trust, in his adversary proceeding against Triple "C" Marine Salvage, Inc. Triple "C" supplies used equipment and parts for marine vessels. In November 2009, Gulf Fleet purchased four reconditioned capstans for installation on its vessels. Two of the capstans, represented by invoice number 20091201-C, were delivered on Nov. 25, 2009. One of these capstans was installed on the M\V Miss Emma Jo and the other was installed on the M\V Gulf Pride. The other two capstans, represented by invoice number 20091212-C, were installed on the M\V Gulf Quest and the M\V Gulf Carrier. The summary judgment record does not establish when these two capstans were actually delivered. The invoice for the first two capstans is dated December 1, 2009 and reflects a purchase price of $13,000. The invoice for the other two capstans is dated December 11, 2009 and reflects a purchase price of $14,400. Gulf Fleet paid invoice number 20091201-C with a check issued on Feb. 9, 2010. This check cleared on Feb. 16, 2010. Gulf Fleet paid invoice number 20091212-C with a check dated Feb. 23, 2010. This check cleared on Feb. 25, 2010. After Gulf Fleet filed for Chapter 11 in May 2010, Comerica Bank filed a proof of claim in the bankruptcy case asserting a secured claim totaling $38,126,869.78 and asserting a security interest in all of the vessels owned by the Debtors, including the four vessels on which the capstans purchased from Triple "C" were installed. The court subsequently approved Gulf Fleet's motion to sell certain vessels, including the four vessels, free and clear of all liens and interests. Based on the sale orders and Gulf Fleet's confirmed plan of reorganization, Comerica Bank received a distribution from the proceeds of the sales. Because the proceeds were insufficient to satisfy Comerica's claim, Comerica retained an unsecured deficiency claim. Gulf Fleet's confirmed plan of reorganization created the Gulf Fleet Liquidating Trust, which was charged, inter alia, with liquidating the remaining assets and claims of Gulf Fleet. The plan transferred certain avoidance actions to the trust. Alan Goodman was subsequently appointed trustee of the Gulf Fleet Liquidating Trust. On Feb. 16, 2012, the Trustee commenced the adversary proceeding seeking to avoid the two payments to Triple "C" under 11 U.S.C. Sec. 547 as avoidable preferences. The case is, ALAN GOODMAN, TRUSTEE FOR THE GULF FLEET LIQUIDATING TRUST, Plaintiff v. TRIPLE "C" MARINE SALVAGE, INC., Defendant, Adv. Proc. No. 12-05024 (Bankr. W.D. La.). A copy of the Court's Jan. 16, 2013 Reasons for Decision is available at http://is.gd/5IMi40from Leagle.com. About Gulf Fleet Lafayette, Lousiana-based Gulf Fleet Holdings, Inc. -- along with affiliates Star Marine, LLC; Gulf Wind, LLC; Gulf Service, LLC; Gulf Worker, LLC; Hercules Marine, LLC; Gulf Fleet, LLC; Gulf Fleet Marine, Inc.; Gulf Fleet Management, LLC; Gulf Fleet Offshore, LLC; and Gulf Ocean Marine Services, LLC -- filed for Chapter 11 bankruptcy protection on May 14, 2010 (Bankr. W.D. La. Case No. 10-50713). Gulf Fleet owned and operated a fleet of offshore and fast supply vessels that supported oil and gas exploration and production companies and other oilfield service companies. Gulf Fleet also operated an independent vessel brokerage business. Gulf Fleet estimated $100 million to $500 million in assets and $50 million to $100 million in debts in its Chapter 11 petition. In their schedules, affiliate Gulf Fleet, LLC, disclosed $2,088,277 in assets and $83,891,116 in liabilities; Gulf Fleet Management, LLC, disclosed $943,256 in assets and $45,071,399 in liabilities; and Gulf Ocean Marine Services, LLC, disclosed $15,777,138 in assets and $79,513,230 in liabilities. R. Michael Bolen, U.S. Trustee for Region 5 appointed seven members to the official committee of unsecured creditors. The Committee is represented by Alan H. Goodman, Esq., Christopher D. Johnson, Esq., and Hugh M. Ray, Jr., Esq. HEALOGICS INC: Moody's Affirms 'B2' CFR; Rates Facilities 'B1' -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Healogics, Inc.'s proposed $320 million senior secured first lien credit facilities, consisting of a $30 million revolver expiring 2018 and a $290 million first lien term loan due 2019. In addition, Moody's assigned a Caa1 rating to the proposed $110 million second lien term loan due 2020. Healogics' B2 Corporate Family Rating and B2- PD Probability of Default Ratings are affirmed. The outlook is stable. Proceeds from the new credit facilities will be used to refinance the existing debt, pay about $50 million in special dividends to shareholders and cover transaction fees and expenses associated with the refinancing. Following is a summary of Moody's ratings actions for Healogics, Inc.: Ratings assigned: $30 million first lien revolver expiring 2018 at B1 (LGD 3, 35%) $290 million first lien term loan due 2019 at B1 (LGD 3, 35%) $120 million second lien term loan due 2020 at Caa1 (LGD 5, 87%) Ratings unchanged: Corporate Family Rating at B2 Probability of Default Rating at B2-PD Ratings to be withdrawn upon completion of the refinancing: $30m Sr. Sec. 1st lien revolver due 2017 at B1 (LGD 3, 35%) $250m Sr. Sec. 1st lien due 2017 at B1 (LGD 3, 35%) $75m Sr Sec. 2nd Lien due 2018 at Caa1 (LGD 5, 86%) Rating Rationale Healogics' B2 Corporate Family Rating reflects the company's small revenue base just above $250 million, high leverage at 5.8 times, (incorporating Moody's standard accounting adjustments), and its narrow product focus on wound care management. The rating is also constrained by the small size, early stage of development of the wound care market and shareholder orientation. The rating benefits from good customer and geographic diversification and no government pay reimbursement risk. The stable rating outlook reflects Moody's expectation that the company will continue to see stable non-acquired growth in the low double-digit range. The stable outlook also encompasses Moody's expectation that the company will delever. Given the small revenue size and product concentration, Moody's does not anticipate upgrading the rating in the near-term. However, Moody's could consider an upgrade should the company materially increase its size, while also reducing leverage such that it approaches 4 times. In addition, Moody's would also be looking for the company to improve its liquidity profile. The rating could be downgraded should the company become free cash flow negative, take on additional debt for acquisitions or becomes more shareholder orientated and further decapitalize the company. The rating could also be lowered if profitability weakens over the medium term such that leverage remains about 5.5 times on a sustained basis. The principal methodologies used in rating Healogics were Global Business & Consumer Service Industry published in October 2010, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website. Headquartered in Jacksonville, Fl., Healogics provides management services and the latest technology and expertise in wound healing to its client hospitals. The company partners with hospitals to establish, staff and run specialized wound care centers that treat patient with chronic, non-healing wounds brought on primarily by old-age and ailments such as diabetes and obesity. Healogics is owned by private equity sponsor Metalmark Capital. HOSTESS BRANDS: Bakers Fund Adds Gordian to Advisory Team --------------------------------------------------------- The Bakery and Confectionery Union and Industry International Pension Fund (Bakers Fund) on Jan. 19 disclosed that it has engaged the prominent New York distressed investment banking firm, Gordian Group, LLC, in connection with Hostess Brands' chapter 11 cases currently pending in the Bankruptcy Court for the Southern District of New York. "We are making every effort for our members by working to preserve their jobs and pension benefits, and assisting with the continuation of Hostess' business and operations. We are delighted to add Gordian's firepower to our advisory team," said David Durkee, President of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Chairman of the Bakers Fund. "They have a long and excellent track record in distressed financial situations and we are pleased that they are now working with us." "Given the sale process that is underway, we believe the Bakers working with a buyer create the opportunity to increase value and are pivotal to the success of the business. Buyers should know that the Bakers are very interested in having direct discussions with them," commented Gordian's President and Head of Restructuring and Distressed M&A, Peter Kaufman. "The Bakers are here to work with bidders in any way as our sole goal is to maximize jobs and pension benefits for our members," said Mr. Durkee. "We are looking to support and work with well-capitalized bidders." Mr. Kaufman added, "Our mission here is a critical one, and we aim to assist the Bakers' leadership and counsel in working with interested bidders to preserve jobs, providing a seamless restart of baking operations, and achieving the best possible outcome for the Bakers' members under these difficult circumstances." Gordian distinguishes itself from other investment banks, among other ways, by providing conflict-free advice. Gordian has no institutional loyalties to funds or bondholders, including those in the Hostess Brands capital structure. Gordian was named Outstanding Investment Banking Firm of 2011 by Turnarounds & Workouts magazine. Gordian has provided expert investment banking advice on a variety of high-profile corporate restructurings, including American Airlines (on behalf of the Transport Workers Union), Alamo/National Rent-a-Car, Ambac, General Motors, LTV Steel and many others. Kaufman and Gordian CEO Henry F. Owsley are co-authors of the definitive book on distressed investment banking. 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. HOSTESS BRANDS: Jan. 25 Hearing on Unions' Bid for Trustee ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on Jan. 25, 2013, at 10 a.m., to consider approval of a motion to appoint a Chapter 11 trustee for Hostess Brands Inc., et al. Objections, if any, are due Jan. 18, 2013. As reported in the TCR on Nov. 29, 2012, Silver Point Finance LLC, the Debtors' DIP lender, challenged the request of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, and the Bakery and Confectionery Union and Industry International Pension Fund to replace the Debtors' management with a chapter 11 trustee to oversee the bankruptcy estate. The RWDSU and Industry Pension Fund; the IUOE Stationary Engineers Local 39, Local 101, Local 286, Local 399, Local 627 and Local 926; Stationary Engineers Local 39 Pension Trust Fund; and Stationary Engineers Local 39 Annuity Trust Fund have filed a joinder to the motion to appoint a Chapter 11 trustee. The unions said appointment of a chapter 11 trustee is the required -- and most advantageous -- mechanism for orderly liquidation of these estates and conclusion of the bankruptcy cases. The unions pointed out the Debtors have admitted (or at minimum, alluded) to three distinct and independent grounds that require appointment of a Chapter 11 trustee: (i) The Debtors have filed pleadings which substantiate the continuing and substantial diminution to these estates alongside their inability to "rehabilitate" (i.e., continue as a going concern); (ii) As evidenced by the plan the Debtors filed in October 2012, a plan premised on the unachievable condition that certain administrative and priority creditors agree to waive their claims -- at this juncture, it is impossible for the Debtors to propose any confirmable plan; and (iii) While the Debtors admit that they are on the precipice of administrative insolvency, the evidence adduced at the final hearing on the Wind-Down Motion will show that to the contrary, these cases are currently administratively insolvent. Silver Point argued that there simply is no need for a replacement fiduciary to oversee the Debtors' winddown. Silver Point also said the unions' statements regarding administrative insolvency and plan confirmation are simply untrue. According to Silver Point, the Debtors need not "rehabilitate" themselves to stave off a trustee appointment, and appointment of a chapter 11 trustee would do nothing to enhance administrative solvency or the prospects for "rehabilitation" or confirmation of a plan in these cases. Silver Point serves as (i) administrative and collateral agent under the Debtor-in-Possession Credit, Guaranty and Security Agreement, dated as of Jan. 12, 2012; (ii) administrative and collateral agent under the Credit and Guaranty Agreement, dated as of Feb. 3, 2009; and (iii) administrative and collateral agent under the Third Lien Credit and Guaranty Agreement, dated as of Feb. 3, 2009. "What is 'in the interests of creditors?' The evidence overwhelmingly leads only to one answer: the Debtors' management should be allowed to implement the winddown that was approved on an interim basis at the last hearing. Other significant creditor constituencies, including the Creditors' Committee and the pre- petition revolving lenders, agree. Respectfully, the self- serving, contrary views of the [Bakers union], whose actions throughout these cases have consistently proven antithetical to the interests of the Debtors' creditors, should not be allowed to override those of the estates' fiduciaries and their principal economic stakeholders," Silver Point said. 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. HOWREY LLP: Trustee Has New Approach on Accord With Ex-Partners --------------------------------------------------------------- Sara Randazzo, writing for The Am Law Daily, reports that Allan Diamond, the trustee overseeing the Chapter 11 bankruptcy of Howrey LLP, says he is seeking about $100 million in clawback claims for money paid to former partners when the firm was likely insolvent, as well as an estimated up to $100 million more for so- called unfinished business claims stemming from work those partners took with them to their new firms. The report notes a total of 71 firms hired the 302 partners streaming out of Howrey in the months leading up to its March 2011 dissolution. According to the report, Mr. Diamond says he plans to take a new approach to reach settlements in the Howrey case by presenting law firms with a bundled settlement plan that includes both the claims against individual partners and the unfinished business claims against the firm. Mr. Diamond also says he'll approach each settlement "with a rational model based upon the strength of my claim at various points in time." Mr. Diamond groups the 71 firms into a few categories: -- About 20 to 25 firms that he's been talking to for months and hopes to settle by using an all-in-one proposal; -- others who want him to speak directly with partners rather than presenting the claims together; and -- less than 10 firms in what he calls a "go stick it in your ear" camp that refuse to cooperate. Am Law Daily relates Mr. Diamond won't say which firms fall into which camp, but the ones with potentially the largest dollar amounts at stake are easy to spot. Baker & Hostetler, Baker Botts, Jones Day, and Winston & Strawn all took in at least 10 partners. Morgan, Lewis & Bockius; Perkins Coie; and Pillsbury Winthrop Shaw Pittman each hired a considerable number as well. According to the report, most firms either had no comment or did not immediately respond to a request for comment. A Perkins Coie spokesman said the firm plans to cooperate with the trustee and "respond to all reasonable requests". Am Law Daily notes that Mr. Diamond's claims are a common source of recovery in law firm bankruptcies. The report points out that: -- In the Chapter 11 case of Dewey & LeBoeuf, the estate's advisers hope to collect some $70 million from former partners as part of a "rough justice" settlement currently awaiting final approval in federal bankruptcy court in New York. Unfinished business settlements with firms that Dewey partners landed at are in the works as well. -- Thelen LLP, which dissolved in 2008 and filed for Chapter 7 bankruptcy in 2009, continues to reach settlements with former partners years later. Most recently, eight former partners agreed to pay back a collective $475,000, according to a Law360 report. On the unfinished business front, Thelen has collected at least $1.9 million from successor firms, court filings show. McGrane Lawsuit Am Law Daily also reports that Mr. Diamond said settlement talks with successor firms could have been further along by now but slowed last fall when San Francisco attorney William McGrane filed a purported class action against all 302 former Howrey partners. The report relates the lawsuit, filed Nov. 1, uses an interpretation of the bankruptcy code to claim the attorneys are so-called Howrey "alter egos," meaning they are equally responsible for the firm's debts. Filed by Mr. McGrane -- who also pushed Howrey into involuntary bankruptcy in April 2011 and served for a time on the unsecured creditors committee -- the plaintiff in the case is Howrey Claims LLC, a company incorporated in Georgia that on October 31 bought the $994.25 unsecured claim of court reporting agency Jan Brown & Associates. According to Am Law Daily, at a two-hour hearing earlier this month, U.S. Bankruptcy Court Judge Martin Glenn scrutinized Mr. McGrane's suit, ultimately saying from the bench that "I think the right remedy in my view is to simply dismiss the complaint." The report notes no official ruling has been filed with the court, and Mr. McGrane said via e-mail that he plans to appeal any dismissal. About Howrey LLP Three creditors filed an involuntary Chapter 7 petition (Bankr. N.D. Calif. Case No. 11-31376) on April 11, 2011, against the remnants of the Washington-based law firm Howrey LLP. The filing was in San Francisco, where the firm had an office. The firm previously was known as Howrey & Simon and Howrey Simon Arnold & White LLP. The firm at one time had more than 700 lawyers in 17 offices. The partners voted to dissolve in March 2011. The firm specialized in antitrust and intellectual-property matters. The three creditors filing the involuntary petition together have $36,600 in claims, according to their petition. The involuntary chapter 7 petition was converted to a chapter 11 case in June 2011 at the request of the firm. In its schedules filed in July, the Debtor disclosed assets of $138.7 million and liabilities of $107.0 million. Representing Citibank, the firm's largest creditor, is Kelley Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton & Garrison. Representing Howrey is H. Jason Gold, Esq., a partner at Wiley Rein. The Official Committee of Unsecured Creditors is represented in the case by Bradford F. Englander, Esq., at Whiteford, Taylor And Preston LLP. In September 2011, Citibank sought conversion of the Debtor's case to Chapter 7 or, in the alternative, appointment of a Chapter 11 Trustee. The Court entered an order appointing a Chapter 11 Trustee. In October 2011, Allan B. Diamond was named as Trustee. INLAND EMPIRE: Left Hazardous Materials at Plant, Says Lessor ------------------------------------------------------------- The Odessa Public Development Authority asks the Bankruptcy Court to lift the stay to permit the removal of property including certain hazardous property left by debtor Inland Empire Oilseeds, LLC at a property it used as a biodiesel plant, and disposing of it as required by non-bankruptcy law. Inland Empire Oilseeds was sent to Chapter 11 bankruptcy by a group of creditors and a week later opted to seek Chapter 7 liquidation. Inland Empire and OPDA entered into a lease dated Dec. 6, 2006, providing for a lease of premises and personal property located at Odessa, Washington, for the purpose of operating a biodiesel manufacturing plant. The lease was set to expire June 5, 2017. The Debtor was required to pay annual lease payments in variable amounts, ranging from $35,500 to as much as $418,719. Interest accrues on delinquent rent at the rate of $12 per annum. The Debtor has failed to make the required lease payments to OPDA. Prepetition lease payments are delinquent for the years of 2008 through 2012 totaling $2.62 million plus interest. Prior to the filing of its Chapter 7 case, the Debtor ceased operations at the plan. The Debtor has abandoned the plant, but has left numerous items of personal property therein. Included in the Debtor's inventory are methanol and acid, which are hazardous materials and which would cause severe contamination and other damage should they freeze and their containers burst. Accordingly, OPDA asks the Bankruptcy Court to lift the stay to permit the removal of all property, and to permit effective Jan. 21, 2012, OPDA to take immediate temporary possession and control of the plant. OPDA was not among the creditors who signed an involuntary Chapter 11 petition for the Debtor. Five alleged creditors of Inland Empire Oilseeds, LLC, filed an involuntary Chapter 11 petition for Inland Empire Oilseeds LLC (Bankr. E.D. Wash. Case No. 12-05395) on Dec. 21, 2012. Creditors who signed the Chapter 11 petition include AgVentures NW, LLC, which claims to be owed $1.2 million. The petitioners are represented by Kevin O'Rourke, Esq., at Southwell & O'Rourke, in Spokane. On Dec. 27, 2012, Inland Empire filed a Chapter 7 bankruptcy petition (Bankr. Case No. 12-05426), declaring $1 million to $10 million in assets and liabilities. The Debtor is represented by: William L Hames, Esq. HAMES ANDERSON & WHITLOWS PS PO Box 5498 Kennewick, WA 99336-0498 Tel: 509 586-7797 Fax: 509 586-3674 E-mail: billh@hawlaw.com OPDA is represented by: Ian Ledlin, Esq. PHILLABAUM LEDLIN MATTHEWS & SHELDON PLLC 421 w. Riverside Avenue #900 Spokane, WA 99201 Tel: (509) 838-6055 INTERFACE SECURITY: S&P Gives 'B-' CCR; Rates $230MM Notes 'B-' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to St. Louis, Mo.-based Interface Security Systems Holdings Inc. The outlook is stable. At the same time, S&P assigned a 'B-' issue rating with a recovery rating of '4' to the company's $230 million senior secured notes, which indicates S&P's expectation for (30% to 50%) average recovery for lenders in the event of default. Interface Security Systems LLC is a co-issuer to the debt The company also plans to issue a $45 million revolving credit facility (unfunded at closing), which S&P do not rate. After the announcement of preliminary transaction terms, Interface upsized its original senior note issuance by $5 million to $230 million, which has minimal impact on credit metrics, and has no impact on credit rating, outlook, or recovery rating. "The rating on Interface reflects the company's 'highly leveraged' financial risk profile, with expected lease-adjusted pro forma debt to EBITDA of about 9x in 2013," said Standard & Poor's credit analyst Katarzyna Nolan. Our assessment of the company's "vulnerable" business risk profile takes into account the company's modest scale, its highly competitive industry, and its concentrated customer base. Positive factors include Interface's growing recurring revenue base, as well as its unique bundled service offering that combines physical security and secured network solutions and results in above-industry average revenue per user (ARPU). Interface provides physical security and secured network services to approximately 107,000 customer sites in the U.S. The company's customers include primarily large, commercial, multisite customers. Its physical security solutions include alarm/event monitoring, interactive video surveillance, managed access control and fire safety systems. Interface's secured network services include secured managed broadband (SMB), payment card industry (PCI) compliance, and managed digital voice services. "In our view, Interface has a vulnerable business risk profile. Interface has a limited scale and it operates in a highly fragmented industry where it faces competition from much larger alarm monitoring companies, cable companies, and cloud-based managed service providers. Based on the company's revenues of about $104 million for the 12 months ended Sept. 30, 2012, Interface was approximately three times smaller than second-tier alarm monitoring companies like Protection One and Monitronics. In addition, Interface's customer concentration is high with its top-10 customers accounting for approximately 39% of its recurring monthly revenue (RMR) and its largest customer accounting for approximately 19% of the company's RMR. This is partly offset by the fact that the company's largest customers are the multiple- site national accounts that are significantly "stickier" than other commercial customers. Interface attempts to differentiate itself from its large competitors by offering a suite of bundled services, which reduces costs for its customers and allows the company to generate an above-industry ARPU. In addition, bundled customer attrition is lower due to the custom configuration of each security solution and the significant switching costs. The company's average ARPU for new bundled customers as of Sept. 30, 2012, was approximately $127 versus $25 to $50 for traditional residential alarm customers and its average net attrition rate was approximately 7.3% (4.2% for national accounts), below the alarm monitoring industry average of about 12%. In the nine months ended Sept. 30, 2012, Interface's revenues increased by approximately 26%, reflecting growth in the subscriber base, higher ARPU, and the revenue contribution from the acquisition of Westec. S&P expects the company's revenue to rise by approximately 20% in 2013, reflecting continued growth in the subscriber base, fueled by the company's channel partnerships, as well as sales of secured network bundled offerings and interactive video services. In addition, the company has a substantial contracted backlog and sales pipeline. S&P also expect an improvement in EBITDA margins because of the greater revenues that new contracts are generating as the company sells more secured network features and interactive video services. In S&P's assessment, the company's management and governance is "fair". Interface's financial risk profile is highly leveraged. S&P expects pro forma lease-adjusted debt to adjusted EBITDA to decrease to around 9x in 2013 from the high-9x area in 2012. S&P adjusts EBITDA to reflect costs that the company has to incur to offset attrition. S&P expects a modest leverage improvement in 2014 and beyond, as a result of EBITDA growth rather than debt reduction. The stable outlook reflects S&P's expectation that the company will achieve somewhat improved credit metrics from the current weak levels over the next year through revenue and EBITDA growth. An upgrade in the next 12 months is unlikely, given the company's highly leveraged financial profile and S&P's view that it will continue using debt to finance growth rather than repay debt. S&P could lower the rating if account creation costs increase or if industry conditions deteriorate such that the company can't internally fund attrition, or if its financial covenants under the revolving facility are stressed. INTERFAITH MEDICAL: Okayed to Pay $2.5MM to Critical Vendors ------------------------------------------------------------ The Hon. Carla E. Craig of the U.S. Bankruptcy Court for the Eastern District of New York authorized, on a final basis, Interfaith Medical Center, Inc., to pay in the ordinary course of its business, the critical vendor claims in amounts not to exceed $2.5 million. Headquartered in Brooklyn, New York, Interfaith Medical Center, Inc., operates a 287-bed hospital on Atlantic Avenue in Bedford- Stuyvesant and an ambulatory care network of eight clinics in central Brooklyn, in Crown Heights and Bedford-Stuyvesant. The Company filed for Chapter 11 protection (Bankruptcy E.D.N.Y. Case No. 12-48226) on Dec. 2, 2012. The Debtor estimated assets and debts of $100 million to $500 million. Alan J. Lipkin, Esq., at Willkie Farr & Gallagher LLP, serves as bankruptcy counsel to the Debtor. Nixon Peabody LLP is the special corporate and healthcare counsel. INTERFAITH MEDICAL: Eric M. Huebscher OK'd as P. Care Ombudsman --------------------------------------------------------------- The Hon. Carla E. Craig of the U.S. Bankruptcy Court for the Eastern District of New York approved the appointment of a patient care ombudsman in the Chapter 11 case of Interfaith Medical Center, Inc.: Eric M. Huebscher Huebscher & Co 630 3rd Avenue, 21st Floor New York, NY 10017 Tel: (646) 584-3141 Fax: (212) 202-3503 E-mail: ehuebscher@huebscherconsulting.com As reported in the TCR on Jan. 11, 2013, the Debtor failed in its effort to escape appointment of a patient care ombudsman in its Chapter 11 case. The Debtor sought a determination from the bankruptcy judge that an ombudsman is not required at this time in light of its "extensive internal quality management procedures as well as oversight from numerous government agencies and professional associations." In an order entered Dec. 28, Bankruptcy Judge Carla E. Craig denied the Debtor's motion and ordered the U.S. Trustee to name an ombudsman pursuant to 11 U.S.C. Sec. 333. Tracy Hope Davis, the U.S. Trustee for Region 2, insisted that an ombudsman is necessary. The Official Committee of Unsecured Creditors filed a joinder to the U.S. Trustee's objection. The patient care ombudsman is expected to, among other things: 1) monitor the quality of patient care provided to patients of the Debtor, to the extent necessary under the circumstances, including interviewing patients and physicians; 2) not later than 60 days after the date of appointment, and not less frequently than at 60 day intervals thereafter, report to the court after notice to the parties in interest, at a hearing or in writing, regarding the quality of patient care provided to patients of the Debtor; and 3) if such ombudsman determines that the quality of patient care provided to patients of the debtor is declining significantly or is otherwise being materially compromised, file with the court a motion or written report, with notice to the parties in interest immediately upon making such determination. To the best of the U.S. Trustee's knowledge, Mr. Huebscher is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Interfaith Medical Center Headquartered in Brooklyn, New York, Interfaith Medical Center, Inc., operates a 287-bed hospital on Atlantic Avenue in Bedford- Stuyvesant and an ambulatory care network of eight clinics in central Brooklyn, in Crown Heights and Bedford-Stuyvesant. The Company filed for Chapter 11 protection (Bankruptcy E.D. N.Y. Case No. 12-48226) on Dec. 2, 2012. The Debtor estimates assets and debts at $100 million to $500 million. Alan J. Lipkin, Esq., at Willkie Farr & Gallagher LLP, serves as bankruptcy counsel to the Debtor. Nixon Peabody LLP is the special corporate and healthcare counsel. JOHN CLEMENTE: Bankruptcy Court Flips Ruling on IRS Claim --------------------------------------------------------- Bankruptcy Judge Michael B. Kaplan granted the Motion for Reconsideration filed on behalf of the United States of America in Dr. John Clemente's Chapter 7 bankruptcy case. Through the Motion, the United States seeks to vacate the order granting the Chapter 7 Trustee's motion to expunge, reduce, and modify the United States' two proofs of claims under Fed. R. Bankr. P. 9024. The Chapter 7 Trustee does not oppose the United States' Motion and consented to the amended priority claim subsequently filed by the Internal Revenue Service. Dr. John Clemente opposes the United States' Motion and disputes the amount and the dischargeability of the IRS's claim. Dr. Clemente filed a Motion to Expunge Claims of United States of America, Internal Revenue Service on July 16, 2010. At that time, he was represented by Timothy P. Neumann, Esq. According to Judge Kaplan, after evidentiary hearings, oral argument and post-hearing submissions by the parties, the Court finds that there was no basis to expunge or reduce the IRS's claims. Since the filing of the Motion to Reconsider, the Chapter 7 Trustee and the United States have submitted a Consent Order with respect to the amount and classification of the IRS's claim. Consistent with that Order, Judge Kaplan fixed the IRS's priority claim in the amount of $299,590.53 and the IRS's general unsecured claim in the amount of $654.75. To the extent the claims are priority claims, they are non-dischargeable and only non-priority claims are deemed dischargeable. A copy of the Court's Jan. 16, 2013 Memorandum Decision is available at http://is.gd/ISVGPJfrom Leagle.com. Dr. John Clemente filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 08-10812) on Jan. 17, 2008. The case was converted to a Chapter 7 bankruptcy on June 3, 2009, and Barry Frost, Esq. was appointed as the Chapter 7 Trustee. Milton Bouhoutsos, Jr., Esq., in Manasquan, New Jersey, argues for the Debtor. Brian W. Hofmeister, Esq., at Teich Groh, in Trenton, represents the Chapter 7 Trustee. KATHLEEN MORRIS: Hearing Tuesday on Plan Outline, Case Dismissal ---------------------------------------------------------------- Nanea Kalani, writing for The Maui News, reports the U.S. Bankruptcy Court in Honolulu, Hawaii, will hold a hearing Tuesday to consider approval of the disclosure statement explaining the Chapter 11 plan of reorganization of Kathleen Patricia Morris -- also known as Tricia Morris -- and David Duffy Herman, the husband-and-wife duo behind a one-time prominent Maui mortgage brokerage. The report relates the hearing was continued to Tuesday after several objections to the disclosure statement were received. The report also relates that at Tuesday's hearing the Court will also consider a request by the U.S. Trustee to convert or dismiss the case. Kathleen Patricia Morris -- also known as Tricia Morris -- and David Duffy Herman filed a joint personal Chapter 11 bankruptcy petition last year (Bankr. D. Hawaii Case No. 12-01122), listing between 100 and 199 creditors owed between $1 million and $10 million in estimated liabilities. According to the report, Ms. Morris and Mr. Herman describe their debts as "primarily business debts" tied to their Kihei-based company Hawaii's Premiere Mortgage Co., including unpaid mortgages and loans against more than two dozen properties in Hawaii and Idaho. The report says a submitted reorganization plan proposes paying the first mortgagees or most senior secured creditors on 26 different properties -- including 19 on Maui -- monthly payments at 3.5% interest over 20 years. Multiple creditors have objected to the proposed plan, according to court documents. The report notes the Office of the U.S. Trustee is asking the court to either convert the case to a Chapter 7 bankruptcy or, alternatively, to dismiss the Chapter 11 filing. According to the report, Acting U.S. Trustee Tiffany Carroll wrote in a Dec. 28 motion, "The debtors have demonstrated gross mismanagement of their estate and have not provided information reasonably requested by the U.S. Trustee." The U.S. Trustee argues in the motion that Ms. Morris and Mr. Herman have concealed assets, failed to disclose bank accounts, diverted "substantial amounts" of rental income into a business account they claimed was inactive, and improperly solicited votes on their reorganization plan prior to court approval. The report notes attorneys for Ms. Morris and Mr. Herman said they received an "unprecedented" number of objections to the couple's disclosure statement and asked the court to continue a Jan. 14 hearing until Tuesday. Ms. Morris and Mr. Herman are listed as the "fee owners" of at least 15 Maui properties with a combined assessed tax value of more than $14.5 million, according to Maui County property tax records. They are named in more than a dozen state civil lawsuits, including ones filed by condo owner associations and banks. They also have pending nonjudicial foreclosure cases against four of their Maui properties. LCI HOLDING: Hearing on Bidding Procedures on Wednesday ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware reset to Jan. 23, 2013 at 3:30 p.m., the hearing to consider approval of LCI Holding Company, Inc., et al.'s motion to establish bidding procedures relating to the sale of substantially all of their assets. Objections, if any, were due Jan. 16, at 4:00 p.m. LifeCare and its affiliates have agreed to sell their assets to their existing lenders in exchange for debt, absent higher and better offers in an auction. The secured lenders have also agreed to provide financing for the Chapter 11 effort. Prepetition, LifeCare solicited offers from potential buyers but it failed secure an offer that would fully pay $353.4 million owing on the secured credit facility where JPMorgan Chase Bank NA is agent. Under the bid procedures, the Debtors will continue accepting initial offers for the assets until Feb. 27. If offers are received by the bid deadline, an auction will be conducted on March 5, at 10 a.m. at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, in New York. Hospital Acquisition LLC, the entity formed by the secured lenders, will be the stalking horse bidder at the auction. In the event that the Debtors pursue a sale of the assets to another buyer, Hotel Acquisition will receive an expense reimbursement of up to $1 million. About LifeCare LCI Holding Company, Inc., and its affiliates, doing business as LifeCare Hospitals, operate eight "hospital within hospital" facilities and 19 freestanding facilities in 10 states. The hospitals have about 1,400 beds at facilities in Louisiana, Texas, Pennsylvania, Ohio and Nevada. LifeCare is controlled by Carlyle Group, which holds 93.4 percent of the stock following a $570 million acquisition in August 2005. LCI Holding Company, Inc., and its affiliates, including LifeCare Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13319) on Dec. 11, 2012, with plans to sell assets to secured lenders. Ken Ziman, Esq., and Felicia Perlman, Esq., at Skadden, Arps, Slate Meagher & Flom LLP, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Huron Management Services LLC will provide the Debtors an interim chief financial officer and certain additional personnel; and (ii) designate Stuart Walker as interim chief financial officer. The steering committee of lenders is represented by attorneys at Akin Gump Strauss Hauer & Feld LLP and Blank Rome LLP. The agent under the prepetition and postpetition secured credit facility is represented by Simpson Thacher & Barlett LLP. The Debtors disclosed assets of $422 million and liabilities totaling $575.9 million as of Sept. 30, 2012. As of the bankruptcy filing, total long-term obligations were $482.2 million consisting of, among other things, institutional loans and unsecured subordinated loans. A total of $353.4 million is owing under the prepetition secured credit facility. A total of $128.4 million is owing on senior subordinated notes. LCI HOLDING: U.S. Trustee Wants Patient Care Ombudsman ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware adjourned to Feb. 11, 2013, at 9:30 a.m., LCI Holding Company, Inc., et. al.'s motion for am order finding that the appointment of patient care ombudsman unnecessary. Roberta A. DeAngelis, the U.S. Trustee objected to the Debtor's motion, stating that the Debtors have not met their burden of proof. The motion was filed with no supporting evidence. The U.S. Trustee notes that under the Bankruptcy Assistance Consumer Protection Act of 2005 added Section 333 to the Bankruptcy Code. The provision requires the court to appoint a patient care ombudsman within 30 days of a petition being commenced. The PCO will represent the interests of the patients unless the court finds the appointment is not necessary based upon the facts of the case. The U.S. Trustee explains that the Debtors' patients are entirely dependent upon the Debtors for their care and sustenance. Any sudden reduction in staffing or equipment could result in death or serious injury to a patient. The appointment of a PCO is not intended to be remedial, but preventive. Cost must be relegated to second place when lives are at risk. About LifeCare LCI Holding Company, Inc., and its affiliates, doing business as LifeCare Hospitals, operate eight "hospital within hospital" facilities and 19 freestanding facilities in 10 states. The hospitals have about 1,400 beds at facilities in Louisiana, Texas, Pennsylvania, Ohio and Nevada. LifeCare is controlled by Carlyle Group, which holds 93.4 percent of the stock following a $570 million acquisition in August 2005. LCI Holding Company, Inc., and its affiliates, including LifeCare Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13319) on Dec. 11, 2012, with plans to sell assets to secured lenders. Ken Ziman, Esq., and Felicia Perlman, Esq., at Skadden, Arps, Slate Meagher & Flom LLP, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Huron Management Services LLC will provide the Debtors an interim chief financial officer and certain additional personnel; and (ii) designate Stuart Walker as interim chief financial officer. The steering committee of lenders is represented by attorneys at Akin Gump Strauss Hauer & Feld LLP and Blank Rome LLP. The agent under the prepetition and postpetition secured credit facility is represented by Simpson Thacher & Barlett LLP. The Debtors disclosed assets of $422 million and liabilities totaling $575.9 million as of Sept. 30, 2012. As of the bankruptcy filing, total long-term obligations were $482.2 million consisting of, among other things, institutional loans and unsecured subordinated loans. A total of $353.4 million is owing under the prepetition secured credit facility. A total of $128.4 million is owing on senior subordinated notes. LCI HOLDING: Rothschild Inc. Approved as Financial Advisor ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized LCI Holding Company, Inc., et al., to employ Rothschild Inc. as financial advisor and investment banker. The Debtors require Rothschild's services in connection with a possible restructuring of their existing obligations, possible new financing and/or a potential sale or other disposition of the assets. The Debtors have agreed to pay Rothschild the compensation set forth in the engagement letter, which provides: * Monthly Fee: $200 per month from July 2012 through December 2012; thereafter, $150,000. * Completion Fee: $3,425,000 upon confirmation and effectiveness of a Plan or closing of another Transaction. * M&A Fee: a percentage of the aggregate consideration but not less than $1,000,000 upon closing of an M&A transaction. * New Capital Fee: 1.0% of senior secured debt raised; 2% of junior secured debt; 2% of unsecured debt; 3% of equity and similar capital raised. The term "Transaction" is defined as any one or more of: (a) any transaction or series of transactions resulting in a restructuring, reorganization, refinancing with respect to a material portion of the company's indebtedness, (b) any merger or reorganization pursuant to which the Company is acquired by another entity; (c) any acquisition of a material portion of the assets or equity interests; or (d) any transaction similar in nature. The Debtors will reimburse Rothschild for its reasonable expenses incurred in connection with the performance of the engagement. During the 90 days preceding the Petition Date, Rothschild received fee payments totaling $800,000 and reimbursements totaling $142,000. As of the Petition Date, the Debtors did not owe Rothschild any fees or expenses incurred prepetition. About LifeCare LCI Holding Company, Inc., and its affiliates, doing business as LifeCare Hospitals, operate eight "hospital within hospital" facilities and 19 freestanding facilities in 10 states. The hospitals have about 1,400 beds at facilities in Louisiana, Texas, Pennsylvania, Ohio and Nevada. LifeCare is controlled by Carlyle Group, which holds 93.4 percent of the stock following a $570 million acquisition in August 2005. LCI Holding Company, Inc., and its affiliates, including LifeCare Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13319) on Dec. 11, 2012, with plans to sell assets to secured lenders. Ken Ziman, Esq., and Felicia Perlman, Esq., at Skadden, Arps, Slate Meagher & Flom LLP, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Huron Management Services LLC will provide the Debtors an interim chief financial officer and certain additional personnel; and (ii) designate Stuart Walker as interim chief financial officer. The steering committee of lenders is represented by attorneys at Akin Gump Strauss Hauer & Feld LLP and Blank Rome LLP. The agent under the prepetition and postpetition secured credit facility is represented by Simpson Thacher & Barlett LLP. The Debtors disclosed assets of $422 million and liabilities totaling $575.9 million as of Sept. 30, 2012. As of the bankruptcy filing, total long-term obligations were $482.2 million consisting of, among other things, institutional loans and unsecured subordinated loans. A total of $353.4 million is owing under the prepetition secured credit facility. A total of $128.4 million is owing on senior subordinated notes. LIGHTSQUARED INC: Seeks More Time to Control Its Bankruptcy ----------------------------------------------------------- Joseph Checkler at Daily Bankruptcy Review reports that LightSquared is asking a judge to give it until May 31 to file a reorganization plan without the threat of rival proposals. 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. LKA INTERNATIONAL: Amends Bylaws to Add Annual Meeting Provision ---------------------------------------------------------------- Effective Jan. 14, 2013, the board of directors amended the bylaws of LKA International, Inc., by adding the following as an additional sentence to Section 1.1 of the bylaws: "In the event an annual meeting of the stockholders has not been held during the prior 12 months, an annual meeting shall be held upon the request of a stockholder or stockholders controlling 10% or more of voting power entitled to vote at any such meeting." All provisions of the bylaws previous to the amendment remain in full force and effect. A copy of the Amended Bylaws is available for free at: http://is.gd/EDlW1q About LKA International Gig Harbor, Washington-based LKA International, Inc., is currently engaged in an intensive exploration program at the Golden Wonder mine with the objective of returning the mine to a commercial producing status. MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about LKA's ability to continue as a going concern, following their audit of the Company's financial statements for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company suffered losses from operations and has a working capital deficit, which raises substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $1.1 million in total assets, $2.1 million in total liabilities, and a stockholders' deficit of $1.0 million. LOCATION BASED TECHNOLOGIES: Friedman Is New Accountant ------------------------------------------------------- The Board of Directors of Location Based Technologies, Inc., approved the termination of Comiskey & Company, P.C., as the Company's independent registered public accounting firm. Comiskey has provided auditing services to the Company since 2007 and is unable to rotate partners as required by the Sarbanes-Oxley Act of 2002. This in turn, creates the necessity for the Company to change auditors at this time. The Company's financial statements as of Aug. 31, 2012, and 2011 and for the fiscal years then ended were audited by Comiskey. Comiskey's report on the Company's financial statements as of Nov. 26, 2012, did not contain an adverse opinion, a disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles, except for the addition of an explanatory paragraph regarding the Company's ability to continue as a going concern. During the year ended Aug. 31, 2012, and through the date of discontinuance of Comiskey's engagement as the Company's independent registered public accounting firm, there were no disagreements with Comiskey on any matter of accounting principles or practices, financial statement disclosure, auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Comiskey, would have caused it to make reference to the subject matter of the disagreement in its reports on the Company's financial statements for those periods. During the period the Company engaged Comiskey, neither the Company nor anyone on the Company's behalf consulted with Comiskey regarding either (i) the application of accounting principles to a specified transaction, either contemplated or proposed, or the type of audit opinion that might be rendered on the Company's financial statements or (ii) any matter that was either the subject of a disagreement or a reportable event. On Dec. 6, 2012, the Company's Board of Directors appointed Friedman LLP as the Company's new independent registered public accounting firm. Friedman is located at 1700 Broadway, New York, NY 10019. To Amend Fiscal 2012 Annual Report On Jan. 14, 2013, the Board of Directors of Location Based concluded that previously issued audited financial statements of the Company for its fiscal year ended Aug. 31, 2012, which were included in the Company's annual report on Form 10-K which was filed on Nov. 29, 2011, should no longer be relied upon. The net effect of the restatement will have a positive impact on the Company's income statement and balance sheet. The Company will restate revenue and cost of revenue for PocketFinder devices sold to the Company's main distributor due to an accounting error and change in accounting policy. Revenues are recognized in accordance with Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, as amended by SAB No. 104, Revenue Recognition. The Company has reevaluated the factors that it used to determine revenue recognition for devices sold to the Company's distributor and concluded that it is appropriate to restate revenue and cost of revenue for year ended Aug. 31, 2012. Other related accounts affected include allowance for sales returns, deferred revenue, inventory purchase commitment, device revenue and cost of revenue. The Company is also amending Footnote 1 "Nature of Operations and Summary of Significant Accounting Policies" and Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations" to reflect changes to the financial statements as a result of the restatement. Delays Form 10-Q The Company was unable to file its quarterly report on Form 10-Q for the quarter ended Nov. 30, 2012, by the prescribed date of Jan. 14, 2013, without unreasonable effort or expense because its internal accountants need additional time to complete portions of the Report as a result of the changes in accounting methodology. The Company intends to file its Report on or prior to the prescribed extended date. About Location Based Technologies Irvine, Calif.-based Location Based Technologies, Inc., designs, develops, and sells leading-edge personal locator devices and services. Location Based's balance sheet at Aug. 31, 2012, showed $5.52 million in total assets, $5.75 million in total liabilities, $430,700 in commitments and contingencies and a $661,566 total stockholders' deficit. Comiskey & Company, the Company's independent registered public accounting firm, included an explanatory paragraph in its report on the Company's financial statements for the fiscal year ended Aug. 31, 2012, which expresses substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring losses since inception and has an accumulated deficit in excess of $45,000,000. There is minimal sales history for the Company's products, which are new to the marketplace. Bankruptcy Warning The Company remains obligated under a significant amount of notes payable, and Silicon Valley Bank has been granted security interests in its assets. "If we are unable to pay these or other obligations, the creditors could take action to enforce their rights, including foreclosing on their security interests, and we could be forced into liquidation and dissolution. We are also delinquent on a number of our accounts payable. Our creditors may be able to force us into involuntary bankruptcy," the Company said in its annual report for the year ended Aug. 31, 2012. MACCO PROPERTIES: Case Dismissal Bid Faces U.S. Trustee Challenge ----------------------------------------------------------------- The United States Trustee filed an objection to Jennifer Price's renewed motion to dismiss the Chapter 11 case of MA Cedar Lake Apartments LLC. The U.S. Trustee said Ms. Price filed her initial motion for conditional order dismissing the case on Nov. 2, 2012. Ms. Price asserted in her initial motion that the Chapter 11 trustee of Macco Properties, Inc., was to sell Macco's ownership interest in Cedar Lake to Price et al. In her initial motion, Ms. Price provided assurances that all claims of all creditors would be paid and as such, there would be no need for the continuation of the bankruptcy. Ms. Price, according to the U.S. Trustee, did not want to be confined in her operation of the business by the duties and responsibilities imposed by the Bankruptcy Code and Rules. In light of Ms. Price's previous conduct and unfulfilled promises to creditors and parties in interest, her initial motion drew objections from All American Bank, Cedar Lake, and the U.S. Trustee. Each objector opposed dismissal of the case without payment of creditors' claims first. In addition, the U.S. Trustee wanted documented proof of payment of all claims. The matter was set for hearing and continued twice in the span of a week in the hope that the sale of Macco's ownership interest in Cedar Lake to Price et al would close and all creditors would contemporaneously be paid. The sale did not close by an agreed date, creditors were not paid, and Ms. Price withdrew her initial motion. On Nov. 28, 2012, the sale eventually closed and the AAB claim was paid, subject to further litigation by Ms. Price. Ms. Price on Nov. 30 filed her renewed motion to dismiss the Cedar Lake bankruptcy. Ms. Price asserts in her Renewed Motion that "the continued pendency of the Cedar Lake case would (i) unnecessarily delay payment of the Remaining Creditor's claims . . ." (which the U.S. Trustee believed approximated $65,000 at the time of closing). According to the U.S. Trustee, Ms. Price continues to pursue dismissal of the case with hollow promises of paying all creditors. Ms. Price knows the claims to be paid and just has to pay them. However, since the closing, the U.S. Trustee believes Ms. Price has not paid any other claims, except AAB's which of course Ms. Price is challenging. In addition, the UST believes since the closing additional administrative claims $165,000 now exist and have gone unpaid. About Macco Properties Oklahoma City, Oklahoma-based Macco Properties, Inc., is a property management company that is the sole or controlling member and/or manager of numerous multi-family residential rental units in Oklahoma City, Oklahoma, Wichita, Kansas, and Dallas, Texas, and several and commercial business properties in Oklahoma City, Oklahoma, and Holbrook, Arizona. The Company filed for Chapter 11 bankruptcy protection (Bankr. W.D. Okla. Case No. 10-16682) on Nov. 2, 2010. The Debtor disclosed $50,823,581 in total assets, and $4,323,034 in total liabilities. Receivership Services Corp., a division of the Martens Cos., serves as property manager for the six Wichita apartment complexes caught up in the bankruptcy of Macco Properties of Oklahoma City. Michael E. Deeba, the Chapter 11 trustee, is represented by Christopher T. Stein, of counsel to the firm of Bellingham & Loyd, P.C. Grubb & Ellis/Martens Commercial Group LLC, to act as the Chapter 11 Trustee's exclusive listing broker/realtor for properties. The trustee wants to real estate holdings wants to sell some of the property off, including a luxury high-rise condominium in Dallas valued at more than $2.5 million and several run-down apartment complexes in the metro area. The Official Unsecured Creditors' Committee is represented by Ruston C. Welch, at Welch Law Firm, P.C., in Oklahoma City, Oklahoma. MAKINO RESTAURANT: Nevada Court Threatens to Dismiss Appeal ----------------------------------------------------------- Nevada District Judge James C. Mahan has threatened to dismiss a bankruptcy appeal -- DAVID J. WINTERTON& ASSOC., LTD. Appellant(s), v. SUNG KANG and SUE KANG, Appellee(s), Nos. 2:12- CV-643 JCM (PAL), BK-S-08-14533-BAM (D. Nev.) -- which involves Makino Restaurant Group Inc., a Chapter 11 debtor. The bankruptcy appeal was filed in District Court on April 17, 2012. To date, no designation of record, statement of issues, or reporter's transcript has been filed. Judge Mahan has given the appellants through Jan. 25 -- 10 days from the publication of the Court order -- to comply with all the applicable rules, complete the record, and correct the deficiencies. A copy of the Court's Jan. 15, 2013 Order is available at http://is.gd/9R0GCDfrom Leagle.com. Las Vegas-based Makino Restaurant Group, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case No. 08-14533) on May 5, 2008, listing $1 million to $10 million in both assets and debts. The Debtor owned and operated restaurants that serve Pan-Asian food. Judge Bruce A. Markell presided over the case. David J. Winterton, Esq. -- david@davidwinterton.com -- served as the Debtor's counsel. MANSTONE COUNTERTOPS: Ariz. Court Kicks Out Lawyer Due to Delays ---------------------------------------------------------------- Bankruptcy Judge Sarah Sharer Curley removed Robert Cook, Esq., as counsel to Chapter 11 debtors Manstone Countertops, LLC, and David R. Robinson and Chelle C. Robinson, blaming the lawyer for delays in the case. Judg Curley said Mr. Cook's failure to obey the court directives delayed the administration of the case, and interfered with the duties of the duly appointed Chapter 11 Trustee. The judge said Mr. Cook's actions constitute conduct tantamount to bad faith and require the Court to exercise its inherent authority to sanction such misconduct accordingly. After the initial disclosure statement was filed on Nov. 19, 2010, Mr. Cook filed five amended disclosure statements. The Third Amended Disclosure Statement, filed on Dec. 2, 2011, first alerted the Court and other parties that Manstone intended to fund its Plan of Reorganization, at least in part, through payments made to Manstone from Air2WaterGlobal, LLC. Air2Water is an entity wholly owned by David and Chellee Robinson, the principals of Manstone, and the individual debtors in a jointly administered case with Manstone. The Court held a status hearing on Dec. 6, 2011 at which the Court and the United States Trustee expressed to Mr. Cook that the Debtors needed to disclose more information about Air2Water. Mr. Cook filed a Fourth Amended Disclosure Statement and a Fifth Amended Disclosure Statement, and hearings were held on these on Feb. 7, 2012 and June 7, 2012, respectively. Both of the amended disclosure statements still failed to properly inform the Court and interested parties as to the projected income of Air2Water. As a result, the Court found that creditors did not have adequate information. For instance, unsecured creditors were being promised payment of anywhere between 10% to 100% of their claims, and that wide range all depended upon Air2Water's distributions. Furthermore, as property of the Robinsons' bankruptcy estate, Air2Water would either have to pay the Robinsons' creditors in full or all of the impaired creditors would need to consent to their treatment in order for Air2Water to make distributions to Manstone's reorganization. Thus, Air2Water's financial projections were critical for interested parties to make an informed judgment about Manstone's Plan. Despite the failed attempts, the Court gave Mr. Cook another opportunity by allowing him to file a Sixth Amended Disclosure Statement, including financial projections for Air2Water, and continued the hearing to July 25, 2012. Manstone failed to file the documents, and Mr. Cook failed to appear at the July hearing. At this point, the Court appointed a Chapter 11 Trustee for both Manstone and the Robinsons. The Court next held a hearing on Oct. 10, 2012, at which the newly appointed Chapter 11 Trustees for both Manstone and the Robinsons and Mr. Cook appeared. Both Chapter 11 Trustees requested that Mr. Cook submit his final fee applications, while the issue of whether Mr. Cook could continue on as the attorney for the Robinsons in the Manstone case was left open. On Dec. 19, 2012, the Court held another hearing where it was brought to the Court's attention that, despite being removed as counsel for Manstone in July 2012, Mr. Cook had filed operating reports on behalf of Manstone in December 2012. Additionally, Mr. Cook advised the Court of Manstone's business developments at the hearing. The Chapter 11 Trustee for Manstone reported that she had not been informed of these business developments and had not received any of the operating reports filed by Mr. Cook prior to Mr. Cook filing them. In essence, Mr. Cook, in direct contravention of the Court's previous orders and admonishments, continued to act as the attorney for Manstone, as if it were still a debtor-in-possession, even long after he had been removed as counsel. Based on Mr. Cook's continued involvement, Mr. Robinson, as principal of the Debtor, continued to disclose all of Manstone's business developments and operations to Mr. Cook rather than to the Chapter 11 Trustee. Judge Curley said the Robinsons may obtain other counsel to represent them. A copy of the Court's Jan. 17, 2013 Memorandum Decision is available at http://is.gd/R8F2imfrom Leagle.com. About Manstone Countertops Manstone Countertops LLC, in Mesa, Arizona, filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 09-26913) on Oct. 22, 2009. Judge Sarah Sharer Curley oversees the case. The Law Offices Of Robert M. Cook PLLC -- robertmcook@yahoo.com -- served as counsel to the Debtor. In its petition, the Debtor estimated $1 million to $10 million in both assets and debts. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/azb09-26913.pdf The petition was signed by David R. Robinson, member of the Company. David R. Robinson and Chelle C. Robinson also filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 09-bk-32033). Warren J. Stapelton was appointed Chapter 11 Trustee in the David and Chellee C. Robinson case. Trudy A. Nowak was named Chapter 11 Trustee in the Manstone Countertops case. MARKETING WORLDWIDE: Incurs $11.1 Million Net Loss in 2012 ---------------------------------------------------------- Marketing Worldwide Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $11.11 million on $790,211 of revenue for the year ended Sept. 30, 2012, compared with a net loss of $2.27 million on $1.90 million of revenue during the prior year. Marketing Worldwide's balance sheet at Sept. 30, 2012, showed $1.19 million in total assets, $16.24 million in total liabilities and a $15.05 million total deficiency. RBSM, LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012. The independent auditors noted that the Company has generated negative cash flows from operating activities, experienced recurring net operating losses, is in default of certain loan covenants, and is dependent on securing additional equity and debt financing to support its business efforts which factors raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-K is available for free at: http://is.gd/HaRyFj About Marketing Worldwide Based in Howell, Michigan, Marketing Worldwide Corporation operates through the holding company structure and conducts its business operations through its wholly owned subsidiaries Colortek, Inc., and Marketing Worldwide, LLC. Marketing Worldwide, LLC, is a complete design, manufacturer and fulfillment business providing accessories for the customization of vehicles and delivers its products to large global automobile manufacturers and certain Vehicle Processing Centers primarily in North America. MWW operates in a 23,000 square foot leased building in Howell Michigan. Colortek, Inc., is a Class A Original Equipment painting facility and operates in a 46,000 square foot owned building in Baroda, which is in South Western Michigan. MWW invested approximately $2 million into this paint facility and expects the majority of its future growth to come from this business. MBIA INC: BofA's Case Backed by Payment Denial, Bank Says --------------------------------------------------------- David McLaughlin, writing for Bloomberg News, reported that Bank of America Corp.'s claims against MBIA Inc. (MBI) over the bond insurer's 2009 restructuring are supported by an insurance regulator's refusal to let MBIA make an interest payment, a lawyer for the bank said. The decision by New York's Department of Financial Services, disclosed by MBIA, backs claims from Charlotte, North Carolina- based Bank of America and Paris-based Societe Generale SA (GLE) in litigation against the insurer, a lawyer for the banks said in a letter to state Justice Barbara Kapnick, Bloomberg said. The banks claim assets were improperly transferred out of MBIA Insurance, harming policyholders. The regulator's decision to reject an interest payment on notes "confirms that MBIA Insurance cannot meet its financial obligations without the $5 billion improperly siphoned from MBIA Insurance," the lawyer, Robert Giuffra, wrote, according to Bloomberg. Kapnick last year presided over a trial at which the banks sought to reverse the state's approval of MBIA's restructuring, Bloomberg added. The judge in December said she was "getting there" on making a decision in the case. A separate lawsuit is also pending. Kevin Brown, a spokesman for Armonk, New York-based MBIA, didn't immediately respond to an e-mail seeking comment on the letter, Bloomberg said. The cases are ABN Amro Bank v. Dinallo, 601846-2009, and ABN Amro Bank v. MBIA, 601475-2009, New York State Supreme Court, New York County (Manhattan). MBIA Inc., together with its consolidated subsidiaries, operates the financial guarantee insurance businesses in the industry and is a provider of asset management advisory services. MEDYTOX SOLUTIONS: Two Directors Resign from Board -------------------------------------------------- Each of Joseph Fahoome and Robert Kuechenberg resigned from the Board of Directors of Medytox Solutions, Inc., effective Dec. 31, 2012. Neither Mr. Fahoome nor Mr. Kuechenberg expressed any disagreement with the Company on any matter relating to the Company's operations, policies or practices. The Company granted to each of Mr. Fahoome and Mr. Kuechenberg options to purchase 10,000 shares of the Company's common stock, par value $.0001 per share, exercisable at $2.50 a share through Dec. 31, 2014, pursuant to the terms of their respective option agreements. About Medytox Solutions West Palm Beach, Florida-based Medytox Solutions, Inc., formerly Casino Players, Inc., is a provider of laboratory services specializing in providing blood and urine drug toxicology to physicians, clinics and rehabilitation facilities in the United States. Peter Messineo, CPA, in Palm Harbor, Florida, expressed substantial doubt about Medytox Solutions' ability to continue as a going concern following the 2011 financial results. The independent auditor noted that the Company has an accumulated deficit and negative cash flows from operations, and additionally, there is certain litigation involving a consolidated entity which is unresolved. The Company reported net income of $92,701 of $3.99 million of revenues for 2011, compared with a net loss of $327,041 on $77,591 of revenues for 2010. The Company's balance sheet at Sept. 30, 2012, showed $6.09 million in total assets, $7.35 million in total liabilities and a $1.25 million total stockholders' deficit. MERIDIAN SUNRISE: Files Chapter 11 Petition in Tacoma ----------------------------------------------------- Meridian Sunrise Village LLC filed a Chapter 11 petition (Bankr. W.D. Wash. Case No. 13-40342) in Tacoma, Washington, on Jan. 18, 2013. The Debtor, a single asset real estate under 11 U.S.C. Sec. 101(51B), disclosed $70.6 million in total assets and $65.9 million in total liabilities in its schedules. The Debtor owns the property known as the New Meridian Sunrise Village in 10507 156th St. E. Puyallup, Washington. The Debtor has valued the property at $70 million, which property secures debt of $64.4 million to U.S. Bank, National Association. A copy of the schedules attached to the petition is available at http://bankrupt.com/misc/wawb13-40342.pdf MERVYN'S LLC: Bankr. Court Won't Hear Navroth Tort Claims --------------------------------------------------------- At the behest of Mervyn's Holdings, LLC, Bankruptcy Judge Kevin Gross dismissed the amended claims for work-related injuries asserted by John Navroth, II, against the Debtors as the amended claims were filed after the deadline for filing proofs of claim. Judge Gross abstained from hearing on Mr. Navroth's initial claims, saying the injury claims raises only California workers' compensation law and non-core to the bankruptcy case. Mr. Navroth filed Claim No. 3283 on Jan. 2, 2009, in the amount of $671,759.86 -- a general unsecured component of $635,000 and a $36,759.86 priority component. Thereafter, he filed Claims No. 7228, 7479, 7493, 7498, 7511 and 7528, beginning on June 15, 2009, and received by the claims agent on June 17, 2009. The claims bar date was Jan. 9, 2009. In the Initial Claim, Mr. Navroth seeks damages for alleged injuries from a work related accident (dropping a folding table on his foot). The Initial Claim includes allegations of and requests for compensation for physical and emotional suffering and demands for payment of vacation, sick and personal holiday time. The alleged incident occurred in California prior to the Debtors' bankruptcy. Importantly, the Claimant filed a statutory workers' compensation proceeding prior to the commencement of the bankruptcy case. The Amended Claims contain allegations of breaches of fiduciary duties, discrimination, employment discrimination, interference with contractual relations and interference with prospective business advantage. The Amended Claims increase the total sum Claimant seeks to in excess of $21 million. The Claimant also alleges that the Amended Claims are secured. "The Amendments are clearly new claims filed after the Bar Date and are therefore void. The Court carefully reviewed the Amended Claims against the Initial Claim and it is beyond any doubt that the Amended Claims are not related to the Initial Claim," said Judge Gross. The Debtors also argue that they are entitled to summary judgment in their favor on the Claimant's allegations of willful misconduct and fraudulent concealment. Judge Gross said the Court is not prepared to entertain the Debtors' request for summary judgment because the Debtors did not provide notice or grounds to the Claimant in advance of the Claimant's response papers. Moreover, it is not necessary for the Court to reach the substantive merits of the Initial Claim, since the Court finds that its abstention is necessary in the interests of justice. A copy of the Court's Jan. 17, 2013 Memorandum Opinion is available at http://is.gd/bNiFEufrom Leagle.com. About Mervyn's LLC Headquartered in the San Francisco Bay Area, Mervyn's LLC -- http://www.mervyns.com/-- provided a mix of top national brands and exclusive private labels. Mervyn's had 176 locations in seven states. Mervyn's stores had an average of 80,000 retail square feet, smaller than most other mid-tier retailers and easier to shop, and were located primarily in regional malls, community shopping centers, and freestanding sites. The Company and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 08-11586) on July 29, 2008. Howard S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis & Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi, Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The Debtors' financial advisor is Miller Buckfire & Co. LLC. Mervyn's LLC's balance sheet at Aug. 30, 2008, showed $665,493,000 in total assets and $717,160,000 in total liabilities resulting in a $51,667,000 total stockholders' deficit. In October 2008, Mervyn's decided to pursue liquidation. MICHAELS STORES: S&P Rates New $1.64BB Secured Loan 'BB-' --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating on Irving, Texas-based arts and crafts retailer Michaels Stores Inc.'s proposed $1,640 million senior secured term loan B. The recovery rating is '1', indicating S&P's expectation for very high recovery (90% to 100%) in the event of a payment default. "We are also raising our issue-level rating on the company's $1,000 million 7.75% senior unsecured notes due 2018 to 'B' from 'B-'. We are revising the recovery rating to '4' from '5' because we extended our simulated default year in our recovery analysis. We did so because the company has paid down the former B-1 term loan and to reflect an increase in amortization on the new term loan. The '4' recovery rating indicates our expectation that noteholders would receive average (30% to 50%) recovery in the event of a payment default," S&P said. At the same time, S&P affirmed its 'CCC+' issue-level rating on the company's $400 million 11.375% senior subordinated notes due 2016. The recovery rating is '6', indicating S&P's expectation that noteholders would receive negligible recovery (0% to 10%) in the event of a payment default. In addition, S&P affirmed the 'B' corporate credit rating on the company and maintained our positive outlook. The company plans to use proceeds from the debt transaction to refinance $1,495 million on its existing term loan, reduce its subordinated notes by approximately $137 million, and pay debt breakage costs and expenses. "The ratings on Michaels reflect Standard & Poor's view that the company's business risk profile will remain 'fair,' based on the risks associated with the competitive and highly fragmented arts and crafts industry, the risks surrounding new-store growth, and the substantial seasonality in quarterly operating performance," said Standard & Poor's credit analyst Kristina Kolunicki. Key factors in our financial risk profile assessment of "highly leveraged" include the financial sponsor's significant ownership stake and our expectation that financial ratios will remain indicative of a highly leveraged profile absent the pay down of debt. We believe the retailer can strengthen its financial ratios to levels indicative of an "aggressive" financial risk profile, pending the use of proceeds of the potential IPO. The positive outlook on Michaels reflects S&P's expectation that potential debt reduction may improve the financial risk profile to aggressive from highly leveraged, especially if it completes an IPO within the next 12 months. S&P could raise its ratings if ratios reach levels indicative of an aggressive financial risk profile, including leverage below 5x. Based on third-quarter fiscal 2012 results, debt reduction of more than $800 million or EBITDA growth that exceeds 20% is necessary for leverage to decline below 5x. "We could revise our outlook to stable if it becomes clear that further debt reduction is unlikely, which could occur if the company cancels the anticipated IPO. We could also revise the outlook to stable if the improvement in operating performance stalls, likely from poor holiday season results. These scenarios could cause financial ratios to remain near current levels, including leverage of about 6x," S&P added. NEW ORLEANS SEWERAGE: Moody's Affirms 'Ba2' Rating; Outlook Neg. ---------------------------------------------------------------- Moody's Investors Service has affirmed the Ba2 underlying rating and assigns a negative outlook to the New Orleans Sewerage and Water Board's $32.4 million in outstanding Water Revenue Bonds. Bonds are secured by a gross pledge of revenues received from the imposition of water rates. Ratings Rationale The rating affirmation reflects adequate legal provisions for outstanding debt, a stable customer base that continues to grow modestly after historic lows following hurricane Katrina, and a moderate debt profile . The Ba2 rating continues to reflect weak financial performance with negative net working capital, and weak debt service coverage inclusive of significant FEMA reimbursement for reconstruction. Although the Board recently adopted significant rate increases for the next eight years, they have yet to have a positive impact on the system's finances. Assignment of the negative outlook reflects the challenges Moody's believes the system will have to accommodate significant borrowing needs, stabilize financial margins, and restore satisfactory cash balances. STRENGTHS * Recent significant rate increases * Board of Liquidation oversight * Diverse customer base CHALLENGES * Weak balance sheet performance * Weak liquidity position * Continued reliance on federal funding sources and inter-fund receivables Negative Outlook The negative outlook reflects the challenges Moody's believes the system will have in the near term to accommodate significant borrowing needs, stabilize financial margins, and restore satisfactory cash balances. WHAT COULD MAKE THE RATING GO - UP * Restoration of structural balance * Trend of solid balance sheet performance bolstering current reserves * History of achieving rate covenant absent one-time revenues WHAT COULD MAKE THE RATING GO - DOWN * Further weakening of balance sheet * Increase in the system debt profile * Additional leveraging including failure to obtain forgiveness for liabilities resulting in their amortization The principal methodology used in this rating was Analytical Framework For Water And Sewer System Ratings published in August 1999. NEWLEAD HOLDINGS: Appoints Michael Zolotas as Chairman ------------------------------------------------------ NewLead Holdings Ltd. on Jan. 18 disclosed that Michael Zolotas, president and chief executive officer of NewLead, will assume the role and responsibilities of chairman of the Company following the recent resignation of Nicholas Fistes as chairman and director of the Company. Michael Zolotas, chairman, president and chief executive officer of NewLead, stated, "I would like to thank Nicholas Fistes for his valuable contribution to the Company and wish him success in his future endeavors." About NewLead Holdings NewLead Holdings Ltd. -- http://www.newleadholdings.com-- is an international, vertically integrated shipping company that owns and manages product tankers and dry bulk vessels. NewLead currently controls 22 vessels, including six double-hull product tankers and 16 dry bulk vessels of which two are newbuildings. N ewLead's common shares are traded under the symbol "NEWL" on the NASDAQ Global Select Market. PricewaterhouseCoopers S.A. in Athens, Greece, said in a May 15, 2012, audit report NewLead Holdings Ltd. has incurred a net loss, has negative cash flows from operations, negative working capital, an accumulated deficit and has defaulted under its credit facility agreements resulting in all of its debt being reclassified to current liabilities. These raise substantial doubt about its ability to continue as a going concern, PwC said. OMTRON USA: Taps Duff & Phelps as Investment Banker --------------------------------------------------- Omtron USA LLC filed papers with the U.S. Bankruptcy Court for the District of Delaware seeking permission to employ Duff & Phelps Securities LLC as its investment banker. A hearing is set for Jan. 23, 2012, at 10:00 p.m., to consider approval of the Debtor's request. Among other things, the firm is expected to: a) prepare a teaser and confidential information memorandum and a summary which will be discussed with and approved by the Debtor; b) prepare a list of potential purchasers and present it to the Debtor; c) contact potential purchasers to solicit their interest in the transaction and to provide them with the confidential information memorandum under a confidential disclosure agreement which has been approved by the Debtor; d) exert efforts to procure a potential purchasers at the earliest practical date, willing and able to consummate a sale on terms satisfactory to the Debtor; and e) participate in due diligence visits, meetings and consultations. The Debtor will pay the firm a consulting fee of $40,000. The fee will cover the cost of researching prospective potential purchasers. The firm attests it is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Omtron USA bought poultry producer Townsends Inc. out of bankruptcy in 2011, shut down operations in later that year, and filed its own Chapter 11 petition (Bankr. D. Del. Case No. 12- 13076) on Nov. 9, 2012, in Delaware. John H. Strock, III, Esq., at Fox Rothschild LLP, in Wilmington, Delaware, serves as counsel to the Debtor. The Debtor listed $40,633,406 in assets and $4,518,756 and liabilities. Omtron paid $24.9 million in February 2011 for the North Carolina operations belonging to Townsends Inc. OMTRON USA: Want to Hire Upshot Services as Claims Agent -------------------------------------------------------- Omtron USA LLC asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Upshot Services LLC as its claims and noticing agent to prepare and serve required notices and documents in the case under the Bankruptcy Code and Federal Rules of Bankruptcy Procedure. The Debtor paid the firm s $5,000 retainer fee before it filed for bankruptcy. The firm attests it is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Omtron USA bought poultry producer Townsends Inc. out of bankruptcy in 2011, shut down operations in later that year, and filed its own Chapter 11 petition (Bankr. D. Del. Case No. 12- 13076) on Nov. 9, 2012, in Delaware. John H. Strock, III, Esq., at Fox Rothschild LLP, in Wilmington, Delaware, serves as counsel to the Debtor. The Debtor listed $40,633,406 in assets and $4,518,756 and liabilities. Omtron paid $24.9 million in February 2011 for the North Carolina operations belonging to Townsends Inc. OMTRON USA: Wants to Hire Fox Rothschild as Attorney ---------------------------------------------------- Omtron USA LLC has filed papers in U.S. Bankruptcy Court for the District of Delaware seeking permission to employ Fox Rothschild LLP as its attorney to provide legal advice with respect to the Debtor's powers and duties as debtor-in-possession in the management of its property and administration of its estate. The firm will charge on an hourly basis for its legal services in accordance with its ordinary and customary rates. The Debtor assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Omtron USA bought poultry producer Townsends Inc. out of bankruptcy in 2011, shut down operations in later that year, and filed its own Chapter 11 petition (Bankr. D. Del. Case No. 12- 13076) on Nov. 9, 2012, in Delaware. John H. Strock, III, Esq., at Fox Rothschild LLP, in Wilmington, Delaware, serves as counsel to the Debtor. The Debtor listed $40,633,406 in assets and $4,518,756 and liabilities. Omtron paid $24.9 million in February 2011 for the North Carolina operations belonging to Townsends Inc. OVERSEAS SHIPHOLDING: Hiring MHB as Special Litigation Counsel -------------------------------------------------------------- Overseas Shipholding Group, Inc., asks the U.S. Bankruptcy Court for the District of Delaware for authorization to employ Mullin Hoard & Brown, L.L.P., as special litigation counsel to the Debtors, nunc pro tunc to Jan. 2, 2013. MHB will render the following professional services to the Debtors: a. perform all necessary services as the Debtors; special litigation counsel, including, without limitation, investigating possible professional liability and other claims against various third parties who provided services to OSG prior to the filing of its Chapter 11 bankruptcy proceeding as instructed by the Debtors, advising the Debtors regarding such possible claims and possible related professional liability insurance coverage claims, and if necessary, litigating such possible claims; and b. perform all other necessary legal services as requested by the Debtors. None of MHB's partners, counsel, or associates hold or represent any interest adverse to the Debtors' estates or their creditors, and MHB is a "disinterested person," as defined in Section 101(14) of the Bankruptcy Code. As of Jan. 1, 2013, attorneys and paralegals principally responsible for the representation of the Debtors and their current hourly rates will be as follows: John M. Brown, Esq. $425 Steven L. Hoard, Esq. $425 Brett Stecklein, Esq. $350 Greg Dimmick, Esq. $350 Sarah Pelley, Esq. $250 Richard Biggs, Esq. $225 Jorge E. Leal, Esq. $225 Alysia Cordova, Esq. $210 Flannery Hoard, Esq. $195 Erica Anderson, Esq. $150 Amy Cruz, Esq. $125 About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012. Bankruptcy Judge Peter J. Walsh oversees the case. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. Cleary Gottlieb Steen & Hamilton LLP serves as OSG's Chapter 11 counsel, while Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC will provide certain administrative services. The Debtors disclosed $4.15 billion in assets and $2.67 billion in liabilities as of June 30, 2012. Liabilities include $1.49 billion on an unsecured credit agreement with DNB Bank ASA as agent. In addition to the secured Chinese loan, there is $518 million in unsecured notes and debentures plus $267 million on ship mortgages taken down to finance nine vessels. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed a five-member official committee of unsecured creditors in the case of Overseas Shipholding Group Inc. OVERSEAS SHIPHOLDING: Can Use CEXIM Cash Collateral Until Jan. 24 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Overseas Shipholding Group, Inc., et al., to continue using cash collateral of the Export-Import Bank of China ("CEXIM") until the date of the adjourned final hearing on Jan. 24, 2013, subject to the terms of the Interim Cash Collateral Order dated Nov. 20, 2012. As of the Petition Date, $311,751,114 in aggregate principal amount was outstanding under the CEXIM Facility. Borrowings under the CEXIM Facility financed the construction in China of five vessels that carry crude oil or finished petroleum products. Each of the CEXIM Vessels is owned by a CEXIM Borrower. Pursuant to the Interim Cash Collateral Order, as adequate protection for the use of cash collateral, CEXIM is granted, among others: a. postpetition liens and security interest in all of the cash collateral. b. OSG International, Inc. ("OIN") will pay to CEXIM the current cash payment of interest on the CEXIM Prepetition Obligations at the non-default contract rate of interest set forth (and at the times provided in) the CEXIM Facility Documens. A copy of the Interim Cash Collateral Order dated Nov. 20, 2012, is available at http://bankrupt.com/misc/OSG.doc62.pdf About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012. Bankruptcy Judge Peter J. Walsh oversees the case. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. Cleary Gottlieb Steen & Hamilton LLP serves as OSG's Chapter 11 counsel, while Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC will provide certain administrative services. The Debtors disclosed $4.15 billion in assets and $2.67 billion in liabilities as of June 30, 2012. Liabilities include $1.49 billion on an unsecured credit agreement with DNB Bank ASA as agent. In addition to the secured Chinese loan, there is $518 million in unsecured notes and debentures plus $267 million on ship mortgages taken down to finance nine vessels. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed a five-member official committee of unsecured creditors in the case of Overseas Shipholding Group Inc. OVERSEAS SHIPHOLDING: Wants Approval to Use DSF Collateral ---------------------------------------------------------- Overseas Shipholding Group, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware to use Danish Ship Finance A/S's prepetition collateral and to grant DSF adequate protection with respect to any diminution in the value of its interests in the collateral. As of the Petition Date, $266,935,725 was outstanding under the DSF Facility. Borrowings under the DSF facility financed the construction of nine vessels that carry crude oil or finished petroleum products. The maturity of the loans ranges from 2014 to 2020. The DSF Facility is secured by mortgages on the DSF Vessels, assignments of certain DSF Vessel earnings, and assignments of vessel insurance in favor of DSF (the "DSF Prepetition Collateral"). A hearing on the motion has been scheduled for Jan. 24, 2013, at 9:30 a.m. Objections were due Jan. 14. A copy of the motion is available at: http://bankrupt.com/misc/osg.doc249.pdf About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012. Bankruptcy Judge Peter J. Walsh oversees the case. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. Cleary Gottlieb Steen & Hamilton LLP serves as OSG's Chapter 11 counsel, while Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC will provide certain administrative services. The Debtors disclosed $4.15 billion in assets and $2.67 billion in liabilities as of June 30, 2012. Liabilities include $1.49 billion on an unsecured credit agreement with DNB Bank ASA as agent. In addition to the secured Chinese loan, there is $518 million in unsecured notes and debentures plus $267 million on ship mortgages taken down to finance nine vessels. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed a five-member official committee of unsecured creditors in the case of Overseas Shipholding Group Inc. PACER MANAGEMENT: Knox County Parties Object to Case Dismissal -------------------------------------------------------------- Knox County, Kentucky and Knox Hospital Corporation filed objections to the U.S. Trustee's request for conversion to Chapter 7 liquidation or dismissal of the bankruptcy case of Pacer Management of Kentucky, LLC, et al. The Knox County Parties said they share the concerns of the Office of the United States Trustee regarding the irregularity of the Debtors' filing of monthly operating reports and the inaccuracies noted by the Office of the United States Trustee. The estate is paying for the services of an accounting firm whose authorization includes the preparation of monthly operating reports and the Debtors should be required to particularly address and to resolve the concerns of the United States Trustee. But the Knox County Parties says it is not in the best interest of the creditors of the bankruptcy estates for the case to be converted to Chapter 7 or dismissed. The primary asset of the Debtors' estates is accounts receivable generated prior to July 16, 2012. According to the MORs filed as of Oct. 31, 2012, there are approximately $1.2 million in accounts receivable outstanding and uncollected but which the Debtors believe are collectible. The Debtors have retained the services of a firm which purports to specialize in the collection of medical accounts receivable. This firm undertook the collection of outstanding accounts receivable at the end of July 2012, and that process is on-going. Since that date, the Debtors have collected $1 million in accounts receivable. According to the Knox County Parties, the proceeds collected are being used by the estate to fund its obligations under a Settlement Agreement with Knox County, to fund the payment of self-insured health benefits to its former employees arising from health benefit claims incurred prior to the transition of the hospital operations to Knox Hospital Corporation, and to fund adequate protection payments to the IRS in exchange for the use of the IRS's cash collateral. The Settlement has not been fully consummated. Under this agreement, the Debtors are obligated to deliver $230,000 to Knox County from the next $460,000 in accounts receivable collections. The Knox County Parties contend a Chapter 7 trustee does not have the expertise necessary to effectively maximize the collection of medical accounts receivable, and would have to retain the services of a specialist in that area. The Knox County Parties are represented by: Mary L. Fullington, Esq. Douglas L. McSwain, Esq. WYATT, TARRANT & COMBS, LLP 250 West Main Street, Suite 1600 Lexington, KY 40507-1746 Telephone: (859) 233-2012 Facsimile: (859) 259-0649 E-mail: Lexbankruptcy@wyattfirm.com About Pacer Management Pacer Management of Kentucky, LLC, and Pacer Health Management Corporation of Kentucky filed voluntary Chapter 11 petitions (Bankr. E.D. Ky. Case Nos. 12-60410 and 12-60411) on March 27, 2012. Cumberland-Pacer, LLC also filed for Chapter 11 (Bankr. E.D. Ky. Case No. 12-60412) also filed a separate petition on the same day. Pacer Management estimated up to $50 million in assets and debts. The Debtors lease the assets and real property to operate the hospital from Knox County, Kentucky and Knox Hospital Corporation. According to court filings, the lessors in 2009 filed suit against Pacer Health and others in the Knox Circuit Court alleging a breach of the Lease Agreement but the suit was later resolved. Under the deal, CP was substituted as lessee. CP is a Kentucky limited liability company established by Dr. Satyabrata Chatterjee and Dr. Ashwini Anand to purchase the stock of Pacer Holdings of Kentucky, Inc., which owned 100% of the stock of Pacer Health and 60% of the stock of Pacer Management. CP, which previously owned 40% of the stock of Pacer Management, became the sole owner of Pacer Management following the transaction. In October 2011, the county notified CP it was in default under the lease agreement. The parties negotiated numerous extensions of time to cure the alleged defaults, most recently until 12:01 a.m. on March 29, 2012. Prior to expiration of the most recent extension, the Lessors again filed suit in the Knox Circuit Court on March 20, 2012 seeking to have the Lease Agreement terminated and requesting entry of a restraining order against CP, PHM and PM, among others. On March 20, 2012, the Knox Circuit Court issued a restraining order which precluded the Debtors from spending hospital funds other than for ordinary operating expenses, among other things. A March 22, 2012 report by The Associated Press said that county officials and the hospital board have agreed to terminate the facility's lease with the Debtors. The group then agreed to sign with another management company that will keep the hospital open and prepare it to be sold, according to the report. The Debtors filed for Chapter 11 protection to retain control of the Hospital. The Debtors said they seek to continue operating the Hospital pursuant to the terms of the Lease Agreement and preserve their option to purchase the Hospital. Judge Joseph M. Scott, Jr. presides over the case. Lawyers at DelCotto Law Group PLLC, in Lexington, Ky., serve as the Debtors' counsel. Craig Morgan, the Debtors' CEO, has been appointed by the Court as the individual responsible for performing the duties of the Company as a Debtor in possession. Mr. Morgan signed the bankruptcy petitions. Dr. Satyabrata Chatterjee, one of the DIP lenders, is represented by Dinsmore & Shohl, LLP. Dr. Ashwini Anand has teamed up with Dr. Chatterjee to provide the DIP loan. An Official Committee of Unsecured Creditors has been appointed and reconstituted by the United States Trustee in the Chapter 11 cases, but has not been active. No trustee or examiner has been appointed, although a patient care ombudsman has been appointed. PATRIOT COAL: Brower Piven Named Lead Counsel in Class Suit ----------------------------------------------------------- In the case, ERNESTO ESPINOZA, on behalf of himself and all others similarly situated Plaintiff, v. RICHARD M. WHITING and MARK N. SCHROEDER, Defendants, Nos. 4:12cv1711 SNLJ, 4:12cv1815 RSW, Consolidated No. 4:12cv2167 FRB (E.D. Mo.), District Judge Stephen N. Limbaugh appointed: (a) the Patriot Coal Investor Group -- consisting of Dr. Jan Arnett, Douglas Keehn, Dennis Doucet, Kevin Lowery, and Thomas J. Podraza -- as Lead Plaintiff for the Class pursuant to Section 21D(a)(3)(B) of the Securities Exchange Act of 1934, 15 U.S.C. Sec. 78u-4(a)(3)(B), as amended by Section 101(b) of the Private Securities Litigation Reform Act of 1995; (b) Brower Piven, A Professional Corporation, the Patriot Coal Investor Group's lawyers, to serve as Lead Counsel; and (c) Holland, Groves, Schneller & Stolze, LLC, to serve as Liaison Counsel. The Court denied the request for appointment of lead plaintiff and lead counsel filed by (1) John Ziants; (2) James Karas and Denis Dehne; (3) James Schmitt, Karel Rybacek, and Douglas Combs; (4) the Cambridge Retirement System; and (6) Richard Sitko. The consolidated securities class action cases are brought on behalf of all persons who purchased Patriot Coal Corporation securities between Oct. 21, 2010 and July 6, 2012 against certain officers of Patriot Coal. The officers are alleged to have made false and misleading statements concerning Patriot Coal's court- ordered environmental remediation efforts. A copy of the Court's Jan. 16, 2013 Memorandum and Order is available at http://is.gd/A0Dw94from Leagle.com. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. PICCADILLY RESTAURANTS: Panel Taps Greenberg Traurig as Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Piccadilly Restaurants, LLC, sought and obtained approval from the U.S. Bankruptcy Court to retain Greenberg Traurig LLP as counsel, nunc pro tunc to Nov. 1, 2012. The Committee attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The current hourly rates applicable to the principal attorneys and paralegals proposed to represent the Committee are: Professional Rates ------------ ----- David B. Kurzweil $750 Shari L. Heyen $675 David R. Eastlake $350 Lee Hart $345 Gail Jamrock $250 Fran Russell $250 Notwithstanding the hourly rate, Greenberg has agreed that its blended hourly rate for the Chapter 11 cases will not exceed $395 per hour. Greenberg represents no other entity in the case, is disinterested as the term is defined in 11 U.S.C. Sec. 101(14), and represents or holds no interest adverse to the interest of the Debtors' estates. About Piccadilly Restaurants Piccadilly Restaurants, LLC, and two affiliated entities sought Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos. 12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are Piccadilly Food Service, LLC, and Piccadilly Investments LLC. Piccadilly Restaurants, LLC, headquartered in Baton Rouge, Louisiana, is the largest cafeteria-style restaurant in the United States, with operations in 10 states in the Southeast and Mid- Atlantic regions. It is wholly owned by Piccadilly Investments, LLC. Piccadilly operates an institutional foodservice division through a wholly owned subsidiary, Piccadilly Food Service, LLC, servicing schools and other organizations. With a history dating back to 1944, the Company operates 81 restaurants at three owned and 78 leased locations. Then known as Piccadilly Cafeterias, Inc., the Company filed for Chapter 11 relief (Bankr. S.D. Fl. Case No. 03-27976) on Oct. 29, 2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A. represented the Debtor in the case. After Piccadilly declared bankruptcy under Chapter 11, but before its plan was submitted to the Bankruptcy Court for the Southern District of Florida, the Bankruptcy Court authorized Piccadilly to sell its assets to Yucaipa Cos., for about $80 million. In October 2004, the Bankruptcy Court confirmed the plan. Judge Robert Summerhays oversees the 2012 cases. Lawyers at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in New Orleans, serve as the 2012 Debtors' counsel. BMC Group, Inc., serves as claims agent, noticing agent and balloting agent. In its schedules, the Debtor disclosed $34,952,780 in assets and $32,000,929 in liabilities. New York-based vulture fund Atalaya Administrative LLC, in its capacity as administrative agent for Atalaya Funding II, LP, Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya Special Opportunities Fund (Cayman) IV LP (Tranche B), the Debtors' prepetition secured lender, is represented in the case by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C.; and Patton Boggs, LLP. Henry G. Hobbs, Jr., Acting United States Trustee for Region 5, in October appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of Piccadilly Restaurants, LLC. PICCADILLY RESTAURANTS: Court OKs GA Keen as Real Estate Advisors ----------------------------------------------------------------- Piccadilly Restaurants, LLC, sought and obtained approval from the U.S. Bankruptcy Court to employ GA Keen Realty Advisors, LLC, as special real estate advisors, nunc pro tunc to Nov. 14, 2012. The firm will: (a) organize the lease information for the leased properties in a manner that clearly displays the site-level business and lease economics. (b) contact the landlord for the leased properties and will seek to negotiate with the landlord for modifications in accordance with the parameters established by the Debtors. (c) work with the landlords, the Debtors, and the Debtors' counsel to document all lease modification proposals. The Debtors will pay Keen Realty an earned, non-refundable engagement fee of $10,000. The Debtors will pay the firm on a per property basis, a transaction fee, which is the greater of $4,000 or 5% of "savings" to be calculated as the difference between: (a) the remaining leasehold liability payable by the Debtors before the execution of the applicable modification agreement, and (b) the remaining leasehold liability payable by the Debtors following the lease modification agreement date. Before deciding to retain Keen Realty, the Debtors (a) identified certain select leases that it may seek to reject, and (b) undertook and, in some instances completed, the process of re-negotiating certain lease renewals or amendments. With respect to those leases, because the majority of the work has been completed, the Debtors believe that it is appropriate to exclude those properties from the normal 5% transaction fee. The Debtors would also advance Keen Realty a $2,500 payment against out of pocket expenses. Keen Realty must seek Keen Realty's prior written approval for any single expense that exceeds $1,000. About Piccadilly Restaurants Piccadilly Restaurants, LLC, and two affiliated entities sought Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos. 12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are Piccadilly Food Service, LLC, and Piccadilly Investments LLC. Piccadilly Restaurants, LLC, headquartered in Baton Rouge, Louisiana, is the largest cafeteria-style restaurant in the United States, with operations in 10 states in the Southeast and Mid- Atlantic regions. It is wholly owned by Piccadilly Investments, LLC. Piccadilly operates an institutional foodservice division through a wholly owned subsidiary, Piccadilly Food Service, LLC, servicing schools and other organizations. With a history dating back to 1944, the Company operates 81 restaurants at three owned and 78 leased locations. Then known as Piccadilly Cafeterias, Inc., the Company filed for Chapter 11 relief (Bankr. S.D. Fl. Case No. 03-27976) on Oct. 29, 2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A. represented the Debtor in the case. After Piccadilly declared bankruptcy under Chapter 11, but before its plan was submitted to the Bankruptcy Court for the Southern District of Florida, the Bankruptcy Court authorized Piccadilly to sell its assets to Yucaipa Cos., for about $80 million. In October 2004, the Bankruptcy Court confirmed the plan. Judge Robert Summerhays oversees the 2012 cases. Lawyers at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in New Orleans, serve as the 2012 Debtors' counsel. BMC Group, Inc., serves as claims agent, noticing agent and balloting agent. In its schedules, the Debtor disclosed $34,952,780 in assets and $32,000,929 in liabilities. New York-based vulture fund Atalaya Administrative LLC, in its capacity as administrative agent for Atalaya Funding II, LP, Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya Special Opportunities Fund (Cayman) IV LP (Tranche B), the Debtors' prepetition secured lender, is represented in the case by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C.; and Patton Boggs, LLP. Henry G. Hobbs, Jr., Acting United States Trustee for Region 5, in October appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of Piccadilly Restaurants, LLC. PICCADILLY RESTAURANTS: Panel Can Hire Derbes as Attorneys ---------------------------------------------------------- The Unsecured Creditors Committee of Piccadilly Restaurants, LLC sought and obtained approval from the U.S. Bankruptcy Court to retain the Derbes Law Firm, LLC, as attorneys. Piccadilly Restaurants, LLC, and two affiliated entities sought Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos. 12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are Piccadilly Food Service, LLC, and Piccadilly Investments LLC. Piccadilly Restaurants, LLC, headquartered in Baton Rouge, Louisiana, is the largest cafeteria-style restaurant in the United States, with operations in 10 states in the Southeast and Mid- Atlantic regions. It is wholly owned by Piccadilly Investments, LLC. Piccadilly operates an institutional foodservice division through a wholly owned subsidiary, Piccadilly Food Service, LLC, servicing schools and other organizations. With a history dating back to 1944, the Company operates 81 restaurants at three owned and 78 leased locations. Then known as Piccadilly Cafeterias, Inc., the Company filed for Chapter 11 relief (Bankr. S.D. Fl. Case No. 03-27976) on Oct. 29, 2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A. represented the Debtor in the case. After Piccadilly declared bankruptcy under Chapter 11, but before its plan was submitted to the Bankruptcy Court for the Southern District of Florida, the Bankruptcy Court authorized Piccadilly to sell its assets to Yucaipa Cos., for about $80 million. In October 2004, the Bankruptcy Court confirmed the plan. Judge Robert Summerhays oversees the 2012 cases. Lawyers at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in New Orleans, serve as the 2012 Debtors' counsel. BMC Group, Inc., serves as claims agent, noticing agent and balloting agent. In its schedules, the Debtor disclosed $34,952,780 in assets and $32,000,929 in liabilities. New York-based vulture fund Atalaya Administrative LLC, in its capacity as administrative agent for Atalaya Funding II, LP, Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya Special Opportunities Fund (Cayman) IV LP (Tranche B), the Debtors' prepetition secured lender, is represented in the case by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C.; and Patton Boggs, LLP. Henry G. Hobbs, Jr., Acting United States Trustee for Region 5, in October appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of Piccadilly Restaurants, LLC. PUERTO DEL REY: Discloses $100-Mil. in Assets, $44-Mil. in Debt --------------------------------------------------------------- Puerto Del Rey sought Chapter 11 protection before the end of 2012 and disclosed $99.8 million in total assets and $44.4 million in liabilities. The Debtor disclosed that its commercial property -- the Puerto Del Rey Marina in Fajardo, Puerto Rico -- is worth $67.3 million and secures $43 million of debt to First Bank Puerto Rico Inc. The 22-acre facility in Fajardo, Puerto Rico, has 918 wet slips dry storage for 600 boats, and commercial building Plaza Del Puerto and supporting buildings. The Debtor also owns other properties in Ceiba and Fajardo, in Puerto Rico. Aside from the $43.2 million debt to First Bank, the Debtor owes $90,000 in unsecured priority claims and $1.03 million in unsecured nonpriority claims. A copy of the schedules attached to the petition is available for free at http://bankrupt.com/misc/prb12-10295.pdf Puerto del Rey, Inc. filed a petition for Chapter 11 protection on Dec. 28 in Old San Juan, Puerto Rico (Bankr. D.P.R. Case No. 12-10295). PUERTO DEL REY: Hires Charles A. Cuprill as Counsel --------------------------------------------------- Puerto del Rey, Inc., sought and obtained approval from the Bankruptcy Court to employ Charles A. Cuprill, P.S.C., Law Offices, as counsel. The Debtor has tapped the firm on the basis of a $40,000 retainer, against which the firm will bill on the basis of $350 per hour, plus expenses, for worked performed by Charles A. Cuprill-Hernandez, Esq., $225 per hour for any senior associate, $150 per hour for junior associates, $85 for paralegals, upon application and approval of the Court. Cuprill said it is a disinterested entity as defined in 11 U.S.C. Sec. 101(14). About Puerto del Rey Puerto del Rey, Inc., owner of the Puerto Del Rey Marina, filed a petition for Chapter 11 protection on Dec. 28 in Old San Juan, Puerto Rico (Bankr. D.P.R. Case No. 12-10295), owing $43 million to secured lender First Bank Puerto Rico Inc. The 22-acre facility in Fajardo, Puerto Rico, has 918 wet slips and dry storage for 600 boats. Bankruptcy was designed to forestall creditors from attaching assets. The Debtor disclosed assets of $99.8 million and liabilities totaling $44.4 million. PUERTO DEL REY: Proposes Luis R. Carrasquillo as Consultant ----------------------------------------------------------- Puerto del Rey, Inc., is in need of an experienced financial consultant to assists its management in the financial restructuring of its affairs by providing advice in strategic planning and the preparation of the Debtor's plan of reorganization and disclosure statement, and participating in the Debtor's negotiations with financial institutions, lessors, and creditors. Accordingly, the Debtor proposes to employ Luis R. Carrasquillo Ruiz, CPA, on the basis of a $15,000 in advance, paid by the Debtor, against which Carrasquillo will bill on the standard rates: Professional Position Hourly Rate ------------ -------- ----------- CPA Luis R. Carrasquillo Partner $160 CPA Marcelo Gutierrez Senior CPA $125 Other CPAs $90 to $125 Lionel Rodriquez Perez Senior Accountant $85 Carmen Callejas Echevarna Senior Accountant $80 Alfredo J. Segarra Senior Accountant $75 Sandra Zavala Diaz Junior Account $60 Janet Marrero Admin. and Support $40 Iris L. Franqul Admin. And Support $40 The financial advisor can be reached at: LUIS R. CARRASQUILLO RUIZ, CPA 28th Street, #TI-26 Turabo Gardens Avenue Caguas PR 00725 Tel: 787-746-4555, 787-746-4556 Fax: 787-746-4564 E-mail: luis@cpacarrasquillo.com About Puerto del Rey Puerto del Rey, Inc., owner of the Puerto Del Rey Marina, filed a petition for Chapter 11 protection on Dec. 28 in Old San Juan, Puerto Rico (Bankr. D.P.R. Case No. 12-10295), owing $43 million to secured lender First Bank Puerto Rico Inc. The 22-acre facility in Fajardo, Puerto Rico, has 918 wet slips and dry storage for 600 boats. Bankruptcy was designed to forestall creditors from attaching assets. The Debtor disclosed assets of $99.8 million and liabilities totaling $44.4 million. QUALTEQ INC: To Auction Unsold Real Estate on Feb. 25 ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for Qualteq Inc., a provider of production services for direct-marketing firms until the business was sold, will hold an auction on Feb. 25 to sell eight remaining parcels of real estate. According to the report, initial bids are due Feb. 20 under auction and sale procedures approved Jan. 16 by the U.S. Bankruptcy Court in Chicago. Bidders can submit offers for the entire package or individual properties. Secured lenders may bid their claims rather than cash. There will be a March 5 hearing to approve the sale. About QualTeq Inc. South Plainfield, New Jersey-based QualTeq, Inc., engages in the design, manufacture, and personalization of plastic cards in the United States. The company manufactures magnetic, contact, and dual interface smart cards. Qualteq Inc. and 17 affiliated companies filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12572) on Aug. 14, 2011. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, serve as local counsel to the Debtors. K&L Gates LLP is the general bankruptcy counsel. Eisneramper LLP is the accountants and financial advisors. Scouler & Company is the restructuring advisors. Lowenstein Sandler PC is counsel to the Committee. Avadamma LLC disclosed $38,491,767 in assets and $36,190,943 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors. Lowenstein Sandler PC represents the Committee. Eisneramper LLP serves as its accountants and financial advisors. In November 2012, the Qualteq trustee completed the sale of the business for $51.2 million to Valid USA Inc. The price included $46.1 million in cash plus the assumption of liabilities. At the request of Bank of America NA, the bankruptcy judge appointed a Chapter 11 trustee in May 2012. The case was transferred to Chicago from Delaware in February 2012. Fred C. Caruso, the Chapter 11 Trustee, tapped Hilco Real Estate, LLC, as real estate advisors. The Debtors' Third Amended Joint Plan of Reorganization provides that on or after the Confirmation Date, the applicable Debtors or Reorganized Debtors may enter into Restructuring Transactions and may take actions as the Debtors or the Reorganized Debtors determine to be necessary or appropriate to (i) effect a corporate restructuring of their respective businesses; (ii) to simplify the overall corporate structure of the Reorganized Debtors; or (iii) to preserve the value of any available net operating losses and other favorable tax attributes; or (iv) to maximize the value of the Reorganized Debtors, all to the extent not inconsistent with any other terms of the Plan or existing law. RAVENWOOD HEALTHCARE: Court OKs Walker & Murphy as Special Counsel ------------------------------------------------------------------ Ravenwood Healthcare, Inc., doing business as Harborside Nursing and Rehabilitation Center, sought and obtained permission from the U.S. Bankruptcy Court to employ Walker & Murphy, LLP as special counsel. Walker is retained by CNA -- not the Debtor -- and submits its billing directly to CNA. The Debtor is not obligated to pay for any of the services or expenses incurred by Walker. Therefore, Walker will not be submitting any requests for payment in accordance with 11 U.S.C. Section 330(a). Walker will not serve as bankruptcy and reorganization counsel to the Debtor. John J. Murphy attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Ravenwood Healthcare Ravenwood Healthcare, Inc. filed a Chapter 11 petition (Bankr. M.D. La. Case No. 12-10612) on April 27, 2012, in its home-town in Baton Rouge. Ravenwood Healthcare is a not-for-profit corporation which owns and operates the Harborside Nursing and Rehabilitation Center, a 165-bed skilled care facility in Baltimore, Maryland. It has 134 hourly rate based and 11 salaried rate based employees. Bankruptcy Judge Douglas D. Dodd oversees the case. William E. Steffes, Esq., and Noel Steffes Melancon, Esq., at Stefes, Vingiello & McKenzie, LLC, serve as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in both assets and debts. The petition was signed by Richard T. Daspit, Sr., president. RAVENWOOD HEALTHCARE: Can Hire Timothy Dixon as Special Counsel --------------------------------------------------------------- Ravenwood Healthcare, Inc., sought and obtained approval from the U.S. Bankruptcy Court to employ Timothy E. Dixon, PA, as special counsel. Dixon has received payments from the Debtor in the one year period prior to the Petition Date in the amount of $28,000. There is an outstanding balance owed to Dixon for billed unpaid prepetition work in the amount of $13,000. Dixon understands that it may not seek to collect said debt from the Debtor and is bound by whatever plan is ultimately confirmed herein. Dixon has no connection with the Debtor, the Debtor's creditors, or any other party-in-interest in the Debtor's bankruptcy case, or their respective attorneys or other professionals, or any employee of the Office of the United States Trustee. About Ravenwood Healthcare Ravenwood Healthcare, Inc. filed a Chapter 11 petition (Bankr. M.D. La. Case No. 12-10612) on April 27, 2012, in its home-town in Baton Rouge. Ravenwood Healthcare is a not-for-profit corporation which owns and operates the Harborside Nursing and Rehabilitation Center, a 165-bed skilled care facility in Baltimore, Maryland. It has 134 hourly rate based and 11 salaried rate based employees. Bankruptcy Judge Douglas D. Dodd oversees the case. William E. Steffes, Esq., and Noel Steffes Melancon, Esq., at Stefes, Vingiello & McKenzie, LLC, serve as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in both assets and debts. The petition was signed by Richard T. Daspit, Sr., president. RESIDENTIAL CAPITAL: Quinn Emanuel Represents RMBS Purchasers ------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, Susheel Kirpalani, Esq., at Quinn Emanuel Urquhart & Sullivan, LLP, in New York, disclosed that his firm represents these parties-in-interest in the Chapter 11 cases of Residential Capital LLC and its affiliated debtors: Entities Nature of Claim -------- --------------- AIG Asset Management (US), LLC Purchaser of RMBS issued by 45 securitization trusts as to which the Debtors acted as sponsor, depositor and originator. AMG Clients suffered approximately $1.168 billion in losses on the securities. Allstate Insurance Company Purchaser of RMBS issued by 23 securitization trusts as to which the Debtors acted as sponsor, depositor and originator. Allstate suffered approximately $140 million in losses on those securities. Massachusetts Mutual Life Purchaser of RMBS issued by Insurance Company 18 securitization trusts as to which the Debtors acted as sponsor, depositor or originator. MassMutual suffered $217 million in losses in those securities. Prudential Financial, Inc. Purchaser of RMBS issued by 35 securitization trusts as to which the Debtors acted as sponsor, depositor or originator. Prudential suffered $226 million in losses on those securities. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Walters Bender in Mitchell Class Suit ---------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, David M. Skeens, Esq., at Walters Bender Strohbehn & Vaughan, P.C., in Kansas City, Missouri, disclosed that his firm serves as: -- lead counsel in In re: Community Bank of Northern Virginia Second Mortgage Lending Practices Litigation, MDL No. 1674, United States District Court for the Western District of Pennsylvania; and -- class counsel for named plaintiffs Steven and Ruth Mitchell and all other members of a settlement class in the certified class action entitled Steven and Ruth Mitchell v. Residential Funding Corporation, et al., Circuit Court of Jackson County, Missouri, Case No. 03-CV-770489-1. In the MDL Class Action, the MDL Class Representatives seek to represent themselves and the Putative Class, which class consists of borrowers in more than 44,000 residential second mortgages loan transactions who were charged illegal and excessive settlement and other fees, and who were not provided accurate and/or timely disclosures concerning the loan costs, in connection with those second mortgage loans. The Mitchell Class Action involved the claims of Missouri home owners that second mortgage loans they obtained violated Missouri's Second Mortgage Loan Act, RSMo Sec. 408.231 et seq. The loans at issue were originated by an entity known as Mortgage Capital Resource Corporation and then acquired by, among others, Residential Funding Company, LLC. After a jury verdict in favor of the plaintiff class and an appeal, the remaining claims were settled, including a settlement by those class members whose loans were acquired by RFC in the amount of $14.5 million dollars. That settlement agreement forms the basis of the respective class and individual claims and disclosable economic interests of the RFC Settlement Class being asserted in the class lawsuit. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Wins Approval to Try to Sell Defaulted Loans ----------------------------------------------------------------- Steven Church, writing for Bloomberg News, reported that Residential Capital LLC, the bankrupt mortgage company whose parent is owned by the U.S. government, won court approval to try to sell a pool of defaulted loans with a balance of about $130 million. The mortgages are the best of about $1 billion in bad loans that ResCap was forced to repurchase after borrowers quit paying, Bloomberg said, citing papers the company filed earlier this month in U.S. Bankruptcy Court in Manhattan. ResCap ?identified those loans that will be attractive to a number of prospective bidders, which are expected to result in the highest average market price for the loans sold,? the company said in the filing. ResCap picked about 650 loans that have the best information about the value of the homes. ResCap, based in New York, filed for bankruptcy in May with plans to sell its major assets and resolve legal claims related to mortgage loans. The company is owned by Ally Financial Inc. (ALLY), a Detroit-based auto lender majority owned by U.S. taxpayers, Bloomberg recounted. Last year, the company held auctions for the most valuable ResCap assets -- its loan-servicing business and a separate portfolio of mortgages, the report pointed out. Ocwen Financial Corp. (OCN) won the Oct. 24 auction for the loan- servicing unit with a bid of $3 billion. The next day, Berkshire Hathaway Inc. (BRK/A) won the auction for a portfolio of ResCap's loans with a $1.5 billion offer. ReCap's 6.5 percent bonds that mature in April climbed 1.7 percent to 29.25 cents on the dollar, Bloomberg said, citing Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Protests Linger Maria Chutchian of BankruptcyLaw360 reported that the U.S. government's concerns over Residential Capital LLC's proposed sale of a $130 million loan portfolio insured by the Federal Housing Administration will live another day after a New York bankruptcy judge approved ResCap's auction procedures Wednesday but held off on ruling on the sale itself. U.S. Bankruptcy Judge Martin Glenn signed off on the structure of the auction process, moving ResCap one step closer to getting rid of at least one subset of the $1 billion in FHA-insured defaulted loans, the report said. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RITE AID: Moody's Affirms 'Caa1' CFR; Outlook Positive ------------------------------------------------------ Moody's Investors Service changed Rite Aid Corporation's outlook to positive from stable. All existing ratings including its Caa1 Corporate Family Rating and Speculative Grade Liquidity rating of SGL-3 are affirmed. Ratings Rationale The change in outlook to positive acknowledges the continued improvement in Rite Aid's operating income, a trend which Moody's believes is sustainable. Rite Aid's operating income has improved as a result of its improved store environment from its "Wellness" remodels, continued growth in its Wellness+ loyalty card program, maintaining to date a high level of customers it gained from Walgreen's dispute with Express Scripts, and the strong generic pipeline. As a result, Rite Aid's operating income for the nine months ended December 1, 2012 increased to $352 million from $239 million in the prior year period. Credit metrics also improved with debt to EBITDA falling to 8.3 times for the twelve months ended December 1, 2012 from 8.9 times at the last fiscal year end. The positive outlook acknowledges that Moody's expects Rite Aid's credit metrics to improve further over the next twelve months. However, despite demonstrating solid improvement, Rite Aid's credit metrics remain weak, which is a key driver of its Caa1 Corporate Family Rating. In particular, EBITA to interest expense is 0.9 times for the twelve months ended December 1, 2012. Also, Rite Aid needs to address it sizable 2014 debt maturities which will likely be at a higher interest rate. Although, Rite Aid's 2014 debt maturities are its first lien secured debt which Moody's believes will be easier to refinance than Rite Aid's unsecured debt, Rite Aid's interest expense is likely to increase as a result of any term loan refinancing. Positive ratings consideration is given to Rite Aid's adequate liquidity, its large revenue base, and the solid opportunities of the prescription drug industry. The following ratings are affirmed Corporate Family Rating at Caa1 Probability of Default Rating at Caa1-PD First-lien bank credit facilities at B2 (LGD 2, 27%) First-lien senior secured notes at B2 (LGD 2, 27%) Second-lien senior secured notes at Caa1 (LGD 4, 58%) Guaranteed senior unsecured notes at Caa2 (LGD 5, 82%) Senior unsecured notes and debentures at Caa3 (LGD 6, 95%) Speculative Grade Liquidity rating at SGL-3 An upgrade would require Rite Aid's operating performance to further improve or absolute debt levels to fall such that it demonstrates that it can maintain EBITA to interest expense above 1.0 time assuming the refinancing of the 2014 term loan at a likely higher interest rate. In addition, Rite Aid would also need to demonstrate that it can maintain debt to EBITDA below 8.0 times, a level that is more sustainable over the longer term. Lastly, a higher rating would require Rite Aid to continue to maintain adequate liquidity. Given the positive outlook, it is unlikely that ratings would be downgraded at the present time. However, ratings could be lowered if the company experiences a decline in earnings or liquidity, should free cash flow become persistently negative, or should the probability of default increase including by way of a distressed exchange. The principal methodology used in rating Rite Aid was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Rite Aid Corporation, headquartered in Camp Hill, Pennsylvania, operates about 4,800 drug stores in 31 states and the District of Columbia. Revenues are about $26 billion. SIX FLAGS: Said to Team With Apollo on Sea World Buyout ------------------------------------------------------- Reuters' Soyoung Kim and Olivia Oran report that three people familiar with the matter said Orlando, Florida-based SeaWorld Parks and Entertainment, which is exploring a sale, has attracted early buyout interest from private equity firm Apollo Global Management LLC, and amusement park operator Six Flags Entertainment Corp. SeaWorld, controlled by private equity firm Blackstone Group LP, filed for an initial public offering in December but is also in talks with potential buyers in what is known as a "dual track" process, Reuters reported previously. The sources told Reuters that Apollo, which got into the resort and leisure business with its $262 million acquisition of Great Wolf Resorts in 2012, and Six Flags, the largest regional theme park operator in the world, are among several potentially interested parties. A deal could value SeaWorld at about $4 billion, based on the financials of its publicly listed peers, such as Six Flags and Cedar Fair LP. Blackstone acquired SeaWorld from beer giant Anheuser-Busch InBev SA for $2.3 billion in December 2009, according to Blackstone's Web site. Reuters says Blackstone and Apollo declined to comment, while Six Flags was not immediately available. The sources asked not to be named because the process is not public. About Six Flags Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, served as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, served as local counsel. Cadwalader Wickersham & Taft LLP, served as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., served as financial advisors, while KPMG LLC served as accountants. Kurtzman Carson Consultants LLC served as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. The Court on April 29, 2010, confirmed the Modified Fourth Amended Plan of Reorganization of Six Flags Inc. and its debtor- affiliates. On April 30, the Debtors consummated their restructuring through a series of transactions contemplated by the Plan and the Plan became effective pursuant to its terms. On the Effective Date, Six Flags, Inc. changed its corporate name to "Six Flags Entertainment Corporation." SKOPE ENERGY: Pine Cliff CCAA Plan of Comprise Accepted ------------------------------------------------------- Skope Energy Inc. on Jan. 18 disclosed that Pine Cliff Energy Ltd. obtained an order on January 15, 2012 from the Court of Queen's Bench of Alberta: (a) accepting the filing of a plan of compromise and arrangement under the Companies' Creditors Arrangement Act by Pine Cliff concerning, affecting and involving Skope Energy Inc. and Skope Energy International Inc.; (b) authorizing Skope and Pine Cliff to establish one class of unsecured creditors in the Plan for the purposes of considering and voting on the Plan; (c) authorizing and directing Skope to call, hold and conduct a meeting of certain of its creditors to consider and vote on a resolution to approve the Plan; and (d) approving the procedures to be followed with respect to the calling and conduct of the Creditors' Meeting. The purpose of the Plan is to restructure Skope's debt and to effect a compromise of the claims of all unsecured creditors of Skope. The Plan contemplates the compromise and arrangement of the claims of all unsecured creditors by the payment of a distribution to all unsecured creditors pursuant to the provisions of the CCAA. The Plan proposed by Pine Cliff, in addition to restructuring Skope's unsecured claims, will result in the redemption, without compensation, of all of the outstanding shares of Skope. Pursuant to the Plan: (i) a new class of redeemable shares of the Company will be created; (ii) the existing Skope Shares will be converted to Redeemable Shares; (iii) a new class of voting shares of the Company will be created; and (iv) new Class A Voting Shares will be issued to Pine Cliff or its nominee for $1.00. On the date that the Plan as proposed by Pine Cliff is implemented, the existing Skope Shares will be redeemed by the Company for no consideration and all related options, warrants and other rights to acquire Skope Shares will be cancelled, without compensation. In order to be approved, the Plan must receive the affirmative vote of a majority in number of affected creditors with voting claims, and two-thirds in value of the voting claims held by such affected creditors, in each case who vote (in person or by proxy) on the Plan at the Creditors' Meeting. The Meeting Order provides that a notice to creditors, the Plan, form of proxy and instructions to creditors relating to the Creditors' Meeting will be mailed to affected creditors on or before January 18, 2013 and that the Creditors' Meeting will be held on February 15, 2013. Holders of Skope Shares are not entitled to vote at the Creditors' Meeting, except in their capacity as creditors, if applicable. The date of which the Plan will become effective, is expected to be on or about February 20, 2013. Further details regarding the Plan and the Meeting are available on the Monitor's Web site at http://cfcanada.fticonsulting.com/sfc A copy of the Meeting Order is available on the Monitor's Web site at http://www.ey.com/ca/skopeenergy All inquiries regarding the Company's proceedings under the CCAA should be directed to the Monitor, Ernst & Young Inc., #1000, 440 - 2nd Avenue S.W., Calgary, Alberta T2P 5E9, Attention Jessica Caden, or by telephone at (403) 206-5153. Information about the CCAA proceedings, including copies of all court orders and the Monitor's reports, are available at the Monitor's Web site http://www.ey.com/ca/skopeenergy Skope Energy Inc. is in the business of oil and natural gas exploration, development and production in Western Canada with a focus on shallow natural gas. SATCON TECHNOLOGY: Taps Lazard Middle as Investment Banker ---------------------------------------------------------- Satcon Technology Corporation, et al., asked the U.S. Bankruptcy Court for the District of Delaware for permission to employ Lazard Middle Market LLC as investment banker and financial advisor. The Debtors note that LMM is a subsidiary of LF&Co., which is the primary U.S. operating subsidiary of a preeminent international financial advisory and asset management firm. LMM will, among other things: -- advise the Debtors on the timing, nature and terms of new securities, and other consideration of other inducements to be offered pursuant to restructuring; -- advise and assist the Debtors in evaluating any potential financing transaction by the Debtors and contracting potential sources of capital as the debtors may designate and assist the Debtors in implementing the financing; and -- assist the Debtors in preparing documentation within LMM's area of expertise that is required in connection with any restructuring. The Debtors agreed to pay LMM's fee structure, including, among other things: 1. a monthly fee of $100,000; 2. a fee equal to $1.25 million, payable upon the consummation of a restructuring; and 3. a fee equal to $1.25 million, if the Company consummates a sale transaction incorporating all or majority of the assets or all or a majority or controlling interest in the equity securities of the Company. To the best of the Debtors' knowledge, LMM is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About SatCon Technology Based in Boston, SatCon Technology Corporation (NasdaqCM: SATC) -- http://www.satcon.com/-- and its wholly owned subsidiaries provide utility-grade power conversion solutions for the renewable energy market, primarily for large-scale commercial and utility- scale solar photovoltaic markets. Satcon Technology Corporation, along with six related entities, filed Chapter 11 petitions (Bankr. D. Del. Case No. 12-12869) on Oct. 17, 2012. Satcon disclosed assets of $92.3 million and liabilities totaling $121.9 million. Liabilities include $13.5 million in secured debt owing to Silicon Valley Bank. There is another $6.5 million in secured subordinated debt. Unsecured liabilities include $16 million on subordinated notes. The Hon. Kevin Gross presides over the case. Dennis A. Meloro, Esq., at Greenberg Traurig serves as the Debtors' counsel. Fraser Milner Casgrain LLP acts as the general Canadian counsel. Lazard Middle Market LLC serves as the Debtors' financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors tapped to retain Holland & Knight LLP as its counsel, Sullivan Hazeltine Allinson LLC as its co-counsel SATCON TECHNOLOGY: Five Members of Official Creditors Committee --------------------------------------------------------------- Roberta A. Deangelis, U.S. Trustee for Region 3 appointed five creditors to serve in the Official Committee of Unsecured Creditors in the Chapter 11 cases of Satcon Technology Corporation, et al. The Committee comprises of: 1. Capital Ventures International c/o Heights Capital Management Attn: Michael L. Spolan 101 California Street, Suite 3250 San Francisco, CA 94111 Tel: (415) 403-6500 Fax: (415) 403-6525 2. Columbia Tech Attn: Bobby Hazleton 17 Briden Street Worcester, MA 01602 Tel: (508) 365-1386 Fax: (508) 459-8340 3. Creation Technologies LP Attn: Mike Walsh 3939 North Fraser Way Burnaby British Columbia Canada, V5J 5J2 Tel: (604) 430-4336 Fax: (604) 430-4337 4. Metal Works, Inc. Attn: Fred Pierce ZY Industrial Dr. Londonderry, NH 03053 Tel: (603) 669-6180 Fax: (603) 641-5106 5. SynQor, Inc. Attn: Arthur R. Hofmann, Jr. 155 Swanson Road Boxborough, MA 01719 Tel: (978) 849-0611 Fax: (978) 263-0925 About SatCon Technology Based in Boston, SatCon Technology Corporation (NasdaqCM: SATC) -- http://www.satcon.com/-- and its wholly owned subsidiaries provide utility-grade power conversion solutions for the renewable energy market, primarily for large-scale commercial and utility- scale solar photovoltaic markets. Satcon Technology Corporation, along with six related entities, filed Chapter 11 petitions (Bankr. D. Del. Case No. 12-12869) on Oct. 17, 2012. Satcon disclosed assets of $92.3 million and liabilities totaling $121.9 million. Liabilities include $13.5 million in secured debt owing to Silicon Valley Bank. There is another $6.5 million in secured subordinated debt. Unsecured liabilities include $16 million on subordinated notes. The Hon. Kevin Gross presides over the case. Dennis A. Meloro, Esq., at Greenberg Traurig serves as the Debtors' counsel. Fraser Milner Casgrain LLP acts as the general Canadian counsel. Lazard Middle Market LLC serves as the Debtors' financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors tapped to retain Holland & Knight LLP as its counsel, Sullivan Hazeltine Allinson LLC as its co-counsel SUNSTATE EQUIPMENT: Moody's Raises CFR to 'B2'; Outlook Stable -------------------------------------------------------------- Moody's Investors Service upgraded Sunstate Equipment Co., LLC's ratings including its corporate family rating ("CFR") to B2 from B3 based on the expectation that credit metrics will be supportive of a B2 rating level over the intermediate term and support from its recent majority ownership interest by Sumitomo Corporation (rated A2/stable). The ratings outlook is stable. The following ratings were upgraded: Corporate family rating, to B2 from B3 Probability of default rating, to B2-PD from B3-PD $170 million second priority senior secured notes due 2016, to B3 (LGD-5, 76%) from Caa1 (LGD-5, 74%) Ratings Rationale The ratings upgrade incorporates the expectation that industry conditions will continue to remain favorable over the intermediate term supporting the positive trend in credit metrics. An improvement in credit metrics is anticipated to be driven largely by an increase in absolute EBITDA levels stemming from continued growth in revenue. The ratings also recognize that although the positive trend in operating metrics is expected to continue, the rate of improvement will not be as high as it was over the last year when the industry was recovering from a severe downturn. Moody's notes that Sumitomo recently announced its increased ownership in Sunstate to a now majority 80 percent interest based on their expectation for continued rental penetration growth in the U.S. The B2 corporate family rating reflects the company's small scale relative to other rated peers and exposure to the highly cyclical equipment rental industry. Moreover, the company is regionally focused with a large part of its business in the Southwestern portion of the United States. The ratings include the expectation of operating performance in line with a B2 rating level including debt/EBITDA maintained below 4.5 times and EBITDA/interest coverage of over 2.5 times, on a Moody's adjusted basis. Although the company will likely draw additional amounts under the revolver in future periods to support business growth, commensurate EBITDA growth should keep metrics sustained at the B2 rating level over the intermediate term. The stable outlook is supported by Sunstate's adequate liquidity profile and Moody's view that positive U.S. equipment rental industry fundamentals should continue to be supportive of its B2 credit profile over the intermediate term. Factors that could lead to a positive outlook or stronger ratings include demonstrating an ability to continue growing sales while maintaining current margins, greater cash flow generation, lowering its debt/EBITDA to below 4.0 times and demonstrating EBITDA/interest coverage at or above 3.5 times on a sustained basis. Developments that could establish negative pressure on the ratings include significant declines in revenues and margins, a deterioration in the company's liquidity profile, or an elevation of its debt/EBITDA towards 5.0 times on a sustained basis and EBITDA/interest falling below the 1.0 times level. The principal methodology used in this rating was the Global Equipment and Automobile Rental Industry 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. Sunstate Equipment Co. LLC, headquartered in Phoenix, AZ, is a regional equipment supplier with over 50 branches predominately in the Southwestern U.S. The company is majority owned by SMS International Corporation, a subsidiary of Sumitomo Corporation and the remaining interest owned by Watts Holding, Inc. (Sunstate's founder Mike Watts). Annual revenues approximate $230 million. SURVEYMONKEY.COM LLC: S&P Assigns Prelim. 'B' Corp. Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned Palo Alto, Calif.- based online survey provider SurveyMonkey.com LLC (doing business as SurveyMonkey Inc.) its 'B' preliminary corporate credit rating. The outlook is stable. "At the same time, we assigned SurveyMonkey's proposed $350 million senior secured credit facilities our preliminary issue-level rating of 'B' (same as our corporate credit rating on the company), with a preliminary recovery rating of '3', indicating our expectation for meaningful (50% to 70%) recovery for lenders in the event of a payment default. The facility consists of a $50 million revolving credit facility due 2018 and a $300 million term loan due 2019. SurveyMonkey plans to use the debt proceeds to buy out certain existing shareholders and refinance existing debt," S&P said. "The 'B' preliminary corporate credit rating reflects the company's niche business focus and aggressive financial profile," said Standard & Poor's credit analyst Daniel Haines. S&P views the company's business risk profile as "weak" as it has a narrow product focus, small scale, and relatively low barriers to entry compared with most rated peers. Pro forma for the transaction, leased-adjusted leverage is 5.8x (5.2x excluding preferred stock) and EBITDA coverage of interest is 3.2x, based on preliminary 2012 results. In S&P's view, the company's financial risk profile is "highly leveraged" due to its significant debt load. S&P views SurveyMonkey's management and governance as "fair." SurveyMonkey is a leading online survey tool for individual survey creation, response collection, and result analysis. Although SurveyMonkey's subscriber base has grown rapidly, the company operates on a limited scale and has a narrow business focus. The vast majority of the company's revenue comes from online surveys. At this time, there is no major online survey competitor, but the possibility of a new product or significantly better-capitalized competitor gaining market share is a risk. The company has grown through a combination of organic growth, international expansion, and acquisitions. SurveyMonkey spends very little on marketing. Instead, the millions of customers that use the product continually spread awareness by sending out surveys to colleagues, classmates, and friends. Over the last few years, the company has focused on expanding internationally and now supports 15 languages. About one-third of customers are international. The company has also grown through acquisitions. In January 2012, the company acquired Zoomerang, which had been SurveyMonkey's closest competitor. This acquisition increased the company's installed base of subscribers. T-L BRYWOOD: Wins Approval to Use Cash Collateral Until March 31 ---------------------------------------------------------------- T-L Brywood LLC won approval from the bankruptcy judge to use cash collateral until March 31, 2013. In return for the Debtor's continued interim use of cash collateral, lender The Private Bank and Trust Company is granted adequate protection for its purported secured interest, including: -- inspection by the lender of the Debtor's book of records, -- the Debtor's maintenance of insurance to cover all assets. -- and reservation of the Debtor of sufficient funds for the payment of real estate taxes, and -- granting the lender security interests in the Debtor's postpetition assets. A final hearing on the Debtor's request will be held March 26, 2013, at 10:00 a.m. T-L Brywood LLC filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No.12-09582) on March 12, 2012. T-L Brywood owns and operates a commercial shopping center known as the "Brywood Centre" -- http://www.brywoodcentre.com/-- in Kansas City, Missouri. The Property encompasses roughly 25.6 acres and comprises 183,159 square feet of retail space that is occupied by 12 operating tenants. The occupancy rate for the Property is approximately 80%. The Debtor and lender The PrivateBank and Trust Company reached an impasse over the terms and conditions of another extension of a mortgage loan on the Property. As a result, the Debtor filed the Chapter 11 case to protect the Property from foreclosure while the Debtor formulates an exit strategy from the reorganization case. As of the Petition Date, no foreclosure relating to the Property had been filed by the Lender. Judge Donald R. Cassling oversees the case. The Debtor is represented by David K. Welch, Esq., Arthur G. Simon, Esq., and Jeffrey C. Dan. Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago. The Debtor disclosed total assets of $16,666,257 and total liabilities of $13,970,622 in its schedules. The petition was signed by Richard Dube, president of Tri-Land Properties, Inc., manager. PrivateBank is represented by William J. Connelly, Esq., at Hinshaw & Culbertson LLP. TALON THERAPEUTICS: Joseph Landy Discloses 92.4% Equity Stake ------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Joseph P. Landy and his affiliates disclosed that, as of Jan. 11, 2013, they beneficially own 265,568,897+ shares of common stock of Talon Therapeutics, Inc., representing 92.4% of the shares outstanding. Mr. Landy previously reported beneficial ownership of 265,461,487+ common shares as of Nov. 14, 2012. On Jan. 11, 2013, pursuant to the terms of the 2012 Investment Agreement (as amended by the 2012 Purchase Agreement Amendment), (i) WP X purchased 52,326 shares of the Company's Series A-3 Preferred for an aggregate purchase price of $5,232,600 and (ii) WPP X purchased 1,674 shares of Series A-3 Preferred for an aggregate purchase price of $167,400. A copy of the amended filing is available for free at: http://is.gd/6QLUUd About Talon Therapeutics Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc. (TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical company dedicated to developing and commercializing new, differentiated cancer therapies designed to improve and enable current standards of care. The company's lead product candidate, Marqibo, potentially treats acute lymphoblastic leukemia and lymphomas. The Company has additional pipeline opportunities some of which, like Marqibo, improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity. Effective Dec. 1, 2010, Hana Biosciences changed its name to Talon Therapeutics. The name change was effected by merging Talon Therapeutics, a wholly owned subsidiary of the Company, with and into the Company, with the Company as the surviving corporation in the merger. The Company's balance sheet at Sept. 30, 2012, showed $6.61 million in total assets, $57.93 million in total liabilities, $44.94 million in redeemable convertible preferred stock, and a $96.25 million total stockholders' deficit. The Company reported a net loss of $18.82 million for the year ended Dec. 31, 2011, compared with a net loss of $25.98 million during the prior year. BDO USA, LLP, in San Jose, California, issued a "going concern" qualification on the financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and net capital deficiency that raise substantial doubt about the Company's ability to continue as a going concern. TALON THERAPEUTICS: James Flynn Discloses 54.9% Equity Stake ------------------------------------------------------------ In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, James E. Flynn and his affiliates disclosed that, as of Jan. 11, 2013, they beneficially own 26,455,389 shares of common stock of Talon Therapeutics, Inc., representing 54.96% of the shares outstanding. On Jan. 11, 2013, pursuant to the terms of the 2012 Investment Agreement (as amended by the Amendment to the 2012 Investment Agreement), the Deerfield Purchasers purchased 6,000 shares of Series A-3 Preferred Stock for an aggregate purchase price of $600,000. Mr. Flynn previously reported beneficial ownership of 24,409,921 common shares or a 52.96% equity stake as of Nov. 14, 2012. A copy of the amended filing is available for free at: http://is.gd/6oT0DS About Talon Therapeutics Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc. (TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical company dedicated to developing and commercializing new, differentiated cancer therapies designed to improve and enable current standards of care. The company's lead product candidate, Marqibo, potentially treats acute lymphoblastic leukemia and lymphomas. The Company has additional pipeline opportunities some of which, like Marqibo, improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity. Effective Dec. 1, 2010, Hana Biosciences changed its name to Talon Therapeutics. The name change was effected by merging Talon Therapeutics, a wholly owned subsidiary of the Company, with and into the Company, with the Company as the surviving corporation in the merger. The Company's balance sheet at Sept. 30, 2012, showed $6.61 million in total assets, $57.93 million in total liabilities, $44.94 million in redeemable convertible preferred stock, and a $96.25 million total stockholders' deficit. The Company reported a net loss of $18.82 million for the year ended Dec. 31, 2011, compared with a net loss of $25.98 million during the prior year. BDO USA, LLP, in San Jose, California, issued a "going concern" qualification on the financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and net capital deficiency that raise substantial doubt about the Company's ability to continue as a going concern. TAYLOR BEAN: E.D. Pa. Court Won't Hear Stradley Ronon Suit ---------------------------------------------------------- Eastern District of Pennsylania Judge Joel H. Slomsky dismissed a declaratory judgment action filed by a law firm against its former client in the hope of circumventing a possible legal malpractice lawsuit. The District Court said it doesn't have jurisdiction on the action, which stemmed from the demise of Taylor, Bean & Whitaker Mortgage Corporation. Under pressure of a looming malpractice lawsuit from Sovereign Bank, N.A., for drafting a contract that allegedly did not fully protect Sovereign from financial losses caused by Taylor Bean's bankruptcy, the law firm of Stradley, Ronon, Stevens & Young, LLP, filed the action seeking relief under the Declaratory Judgment Act, 28 U.S.C. Sections 2201-02. The Act grants a district court the discretion to "declare the rights and other legal relations of any interested party seeking such declaration" upon the filing of a pleading seeking such relief. Stradley seeks a declaration that the contract it drafted effectively protected Sovereign's financial interests and, in essence, that there is no basis for a malpractice lawsuit. Sovereign sought dismissal, arguing that Stradley's purpose for filing the lawsuit was to circumvent a state court malpractice action. Sovereign argues the Declaratory Judgment Act should not be used for this purpose. The Court agrees. In the mortgage industry, a "mortgagee" holds an interest in the mortgage note and has the right to foreclose on a property if the homeowner defaults on the mortgage. When a homeowner defaults and the mortgagee begins foreclosure proceedings on the property, the obligation of the homeowner to pay certain expenses continues. The expenses include, among other things, property taxes and insurance premiums. Mortgagees seek to recover the cost of these mandatory payments from the homeowner during foreclosure. To ensure these payments are made, mortgagees contract with "mortgage servicers" who place advance funds into escrow accounts from which the expenses are paid. The payments are known as "Servicer Advances." After a mortgage servicer pays a Servicer Advance, the Servicer Advance becomes a debt owed to the mortgage servicer by the mortgagee. Taylor Bean was a mortgage servicer. It serviced mortgages for several mortgagees, including the following companies: FHLMC ("Freddie Mac"), GNMA ("Ginnie Mae"), Wells Fargo Bank, N.A. ("Wells Fargo"), and Bayview Loan Servicing LLC ("Bayview"). When Taylor Bean entered into a contract to service a mortgage, it was required to pay from its own funds any mortgage-related expenses. The mortgage companies were obligated to compensate Taylor Bean for Servicer Advances paid on their behalf. The Servicer Advances owed to Taylor Bean by these mortgagees play a central role in the dispute between Sovereign and the law firm. To pay Servicer Advances, Taylor Bean required access to large amounts of cash. To meet this cash requirement, TBW borrowed funds through a revolving secured line of credit at Sovereign. Sovereign was a member of the group of banks funding the line of credit. The Taylor Bean line of credit was controlled by a contract titled the "Servicing Facility Loan and Security Agreement". The Agreement secured the line of credit with collateral to protect Sovereign in the event Taylor Bean filed for bankruptcy. The Agreement was amended several times over the life of the line of credit. In late 2007, Stradley began advising Sovereign on matters related to the Fourth Amended Agreement. About that time, Taylor Bean owed roughly $300 million on the line of credit and, in turn, various mortgagees owed Taylor Bean roughly $300 million for the Servicer Advances made. After the nationwide financial and credit crisis began in 2008, Taylor Bean struggled to make payments on the line of credit. As a result, the Agreement with Sovereign was amended once again, resulting in the Fifth Amended Agreement. The Fifth Amended Agreement restricted Taylor Bean's access to revolving credit by reducing the line of credit to $35 million. The outstanding balance of $300 million owed to Sovereign by Taylor Bean was converted to a non-revolving loan. Stradley was then asked by Sovereign to draft an amendment to the Fifth Amended Agreement. A Sixth Amended Agreement was prepared and its terms are also central to the lawsuit. The Amended Agreement is the first and only version of the Agreement over which Stradley had actual drafting responsibilities. The changes made in the Sixth Amended Agreement focused on accelerated collection of the Taylor Bean line of credit. Sovereign was named the "Agent" for the group of banks funding the TBW line of credit. The Sixth Amended Agreement also described the collateral and was intended to grant to Sovereign a broad security interest in all rights held by Taylor Bean arising from the Servicer Advances in certain assets of the mortgagees. Both Section 4.2 and Schedule 3 of the Agreement had been drafted by a law firm other than Stradley and were included in a prior version of the Agreement. Stradley made no changes to either provision in the Sixth Amended Agreement. Before Sovereign executed the Sixth Amended Agreement, an attorney with Stradley, Kevin Masucci, emailed the draft of the Sixth Amended Agreement to Sovereign, requesting comment and a confirmation that the contract was accurate. In response, Sovereign did not request that any changes be made to Schedule 3 of the Sixth Amended Agreement. On May 15, 2009, the Sixth Amended Agreement was executed. In the summer of 2009, federal investigators uncovered evidence that Taylor Bean was engaged in fraudulent activities. Its Federal Housing Administration license was revoked, and officers and employees of Taylor Bean were later indicted for their role in criminal acts of fraud and falsification of mortgage data and financial statements. In August 2009, Taylor Bean filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Middle District of Florida. During the bankruptcy proceeding, a committee of Taylor Bean's unsecured creditors asserted that Sovereign did not have a valid security interest in Taylor Bean's Servicer Advances with respect to any mortgagee other than Ginnie Mae and Freddie Mac, the only two entities listed on Schedule 3. The unsecured creditors argued the Sixth Amended Agreement did not capture Servicer Advances owed to Taylor Bean by other banks, such as Wells Fargo and Bayview, because they were not listed in Schedule 3. Sovereign blamed Stradley for this problem and requested that the law firm enter into a tolling agreement to protect against the running of a statute of limitations on a professional negligence or malpractice action. The unsecured creditors filed an adversary proceeding against Sovereign in the bankruptcy matter, seeking a declaratory judgment from the bankruptcy court that the Sixth Amended Agreement did not place liens on the Wells Fargo and Bayview collateral. In January 2011, Sovereign filed an answer and counterclaim. Sovereign took the position that the Sixth Amended Agreement gave Taylor Bean a valid security interest in the Wells Fargo and Bayview Servicer Advances owed to Taylor Bean. Over the next two years, Sovereign and Stradley entered into tolling agreements and met from time to time in an attempt to resolve their dispute. On May 4, 2012, Stradley terminated the last tolling agreement and filed a Complaint seeking declaratory relief on these claims: (1) the contract, as drafted, effectively protected Sovereign's right to the target collateral, and Stradley had satisfactorily performed its duties to Sovereign; (2) Sovereign is judicially estopped from arguing in any court that the contract was deficient because it took just the opposite position during the adversary proceeding before the bankruptcy court; and (3) to the extent the contract may have been deficient, Stradley was not responsible because Sovereign failed to provide updated information during the representation. On June 5, 2012, shortly after Stradley filed the action, Sovereign filed a malpractice lawsuit against Stradley in the Philadelphia Court of Common Pleas. The next day, Sovereign filed in the federal action the Motion to Dismiss the Complaint. According to Judge Slomsky, the essence of the case is a malpractice dispute between a law firm and an aggrieved client. A claim of malpractice against a law firm involves a cause of action under state law. By filing the action, Stradley has attempted to preempt the ensuing state court proceeding against it for malpractice by suing first in federal court, rather than waiting to be sued in state court. Judge Slomsky said, however, the District Court should not interfere with the pending state action, even though it was filed after the federal action. While Stradley requests a declaration, in effect, that it did not commit malpractice, the Declaratory Judgment Act should not be used to afford Stradley the relief it seeks. The judge also said the claim involves a matter arising under state law, and Stradley may defend itself in state court. Therefore, declaratory judgment is not appropriate, as the justiciable controversy properly lies in the state court malpractice action. The lawsuit is, STRADLEY, RONON, STEVENS & YOUNG, LLP, Plaintiff, v. SOVEREIGN BANK, N.A., Defendant, Civil Action No. 12-2466 (E.D. Pa.). A copy of Judge Slomsky's Jan. 15, 2013 Opinion is available at http://is.gd/LwGAIVfrom Leagle.com. About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala- based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009. Taylor Bean filed the Chapter 11 petition three weeks after federal investigators searched its offices. The day following the search, the Federal Housing Administration, Ginnie Mae and Freddie Mac prohibited the company from issuing new mortgages and terminated servicing rights. Taylor Bean estimated more than $1 billion in both assets and liabilities in its bankruptcy petition Lee Farkas, the former chairman, was sentenced in June to 30 years in federal prison after being convicted on 14 counts of conspiracy and bank, wire and securities fraud in what prosecutors said was a $3 billion scheme involving fake mortgage assets. Jeffrey W. Kelly, Esq., and J. David Dantzler, Jr., Esq., at Troutman Sanders LLP, in Atlanta, Ga., and Russel M. Blain, Esq., and Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Fla., represent the Debtors. Paul Steven Singerman, Esq., and Arthur J. Spector, Esq., at Berger Singerman PA, in Miami, Fla., represent the Committee. BMC Group, Inc., serves as the claims and noticing agent. Unsecured creditors were expected to receive 3.3% to 4.4% under a Chapter 11 plan approved in July 2011. TRINSEO MATERIALS: Moody's Affirms 'B1' CFR; Rates New Notes 'B1' ----------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Trinseo Materials Operating S.C.A.'s (TMO) $1.325 billion senior secured notes due 2018. Moody's also affirmed the corporate family rating (CFR) of Trinseo S.A. at B1. Proceeds from the transaction are expected to be used to repay the company's outstanding term loan and revolver balances. The outlook remains negative. "Trinseo's financial performance remains weak for the B1 rating," said John Rogers, Senior Vice President at Moody's. "The recent completion of the SSBR expansion and modest improvements in its other product lines should allow the company to improve earnings and cash flow. However, if earning don't improve in the first half of 2013, we could lower the rating." Ratings assigned: Trinseo Materials Operating S.C.A. $1.325 billion 6-year senior secured notes -- B1 (LGD4, 55%) Ratings affirmed: Trinseo S.A. Corporate Family Rating -- B1 Probability of Default Rating -- B1-PD $1.4 billion senior secured term loan due 2017* Outlook -- Negative *: The term loan rating will be withdrawn upon completion of the refinancing RATINGS RATIONALE Trinseo is weakly positioned in the B1 category due to weak financial performance caused by margin volatility. The CFR reflects Trinseo's narrow portfolio of commodity and quasi- commodity products, weak credit metrics, exposure to volatile feedstock prices and a limited amount of cash equity. Trinseo's credit profile is supported by its size in terms of revenue, leading market positions in three of its four product lines (polycarbonates is the exception), relatively stable volume demand in its emulsion polymers and rubber businesses, an experienced management team and the success in lowering fixed costs since the acquisition by Bain in 2010. While September 2012 LTM credit metrics are significantly depressed due to the weak fourth quarter in 2011, Debt/EBITDA (including Moody's standard adjustments) is still expected to be above 6x at year-end 2012. The negative outlook reflects concerns over the potential for continued volatility in financial performance that may cause financial metrics to remain weaker than would be appropriate for the B1 rating. To the extent that continued earnings volatility causes Trinseo to report earnings of below $50 million in more than one quarter in any four quarter period prior to an additional $200-300 million of debt reduction from free cash flow, Moody's could lower Trinseo's rating by a notch to B2. The ratings have limited upside at this time, but could be raised if Net Debt/EBITDA falls below 4.0x and is expected to remain at that level for a sustained period. Trinseo has good liquidity primarily supported by cash balances expected to be roughly $140 million at the close of the transaction, its proposed $300 million revolver and a $160 million A/R securitization that is currently capped at roughly $100 million due to the availability of qualified receivables. Trinseo S.A. is the world's largest producer of styrene butadiene (SB) latex, the largest European producer of synthetic rubber (solution styrene butadiene rubber -- SSBR), the third largest global producer of polystyrene and a leading producer of polycarbonate resins and blends. Trinseo had revenues of roughly $5.5 billion for the last four quarters ending September 30, 2012. Trinseo is owned by an affiliate of Bain Capital and was acquired from The Dow Chemical Company in 2010 The principal methodology used in rating Trinseo was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. URANIUM RESOURCES: Approves Stock Split for NASDAQ Compliance ------------------------------------------------------------- Uranium Resources, Inc. on Jan. 18 disclosed that its Board of Directors has approved a 1-for-10 reverse stock split of its common stock. On January 14, 2013, the Company announced shareholder approval to conduct a reverse stock split of its issued and outstanding common stock by a ratio of not less than 1- for-5 and not more than 1-for-15. The primary purpose of the reverse split was to bring URI into compliance with NASDAQ's $1.00 minimum bid price requirement. The Company expects the reverse split to become effective immediately following the close of trading on January 22, 2013 and the consolidated common shares to begin trading on a split-adjusted basis as of January 23, 2013. When the reverse stock split becomes effective, every ten shares of issued and outstanding URI common stock will be combined into one issued and outstanding share of common stock with no changes to the par value of the shares. The reverse split will reduce the number of URI's outstanding common stock from approximately 161.1 million shares to approximately 16.1 million shares. No fractional shares will be issued as a result of the reverse stock split. Any fractional shares that would have resulted will be settled in cash. Additionally, the Company received a Staff Determination Letter from the NASDAQ on January 15, 2013, notifying URI that its securities will be subject to delisting from the NASDAQ Stock Market even though the reverse stock split has been approved because the Company will not regain compliance until the closing bid price for its common stock exceeds $1.00 for a minimum of 10 consecutive business days under Rule 5550(a)(2). In accordance with NASDAQ rules, URI has requested a hearing with the NASDAQ Hearing Panel to appeal the determination letter, which will stay the action until the Company has completed the hearing and the Hearing Panel has issued its decision. "As anticipated, the Company received notification from NASDAQ that its common stock remains in noncompliance with its listing qualifications," stated Terence J. Cryan, Interim President and CEO of URI. "We believe that URI's reverse stock split initiative will produce a favorable result from the hearing process with NASDAQ, and bring us back into full compliance with NASDAQ listing requirements." About Uranium Resources Uranium Resources Inc. -- http://www.uraniumresources.com-- explores for, develops and mines uranium. Since its incorporation in 1977, URI has produced over 8 million pounds of uranium by in- situ recovery (ISR) methods in the state of Texas. URI has over 206,600 acres of uranium mineral holdings and 152.9 million pounds of in-place mineralized uranium material in New Mexico and an NRC license to produce up to 1 million pounds of uranium per year. URI has an additional 1.3 million pounds of in-place mineralized uranium material in Texas and South Dakota. The Company acquired these properties over the past 20 years along with an extensive information database of historic drill hole logs, assay certificates, maps and technical reports. VALEANT PHARMACEUTICALS: S&P Retains 'BB' Corp. Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services assigned Montreal-based pharmaceutical company Valeant Pharmaceuticals International Inc.'s proposed $2,114 million term loan A (tranche A-1) its 'BBB-' issue-level rating, with a recovery rating of '1', reflecting S&P's expectation for very high (90%-100%) recovery in the event of a payment default. The terms for the term loan A (tranche A-1), including the maturity on April 20, 2016, are unchanged. The rating on Montreal-based Valeant Pharmaceuticals International Inc. reflects S&P's belief that the company has an aggressive financial risk profile. At Sept. 30, 2012, adjusted leverage (pro forma for Medicis) was about 5x. S&P believes the company will use some of its strong cash flows to reduce adjusted leverage to 4x by the end of 2013, but that the company's high level of acquisition activity will sustain adjusted leverage in the 4x-5x range. S&P's consideration of Valeant's business risk profile as fair reflects the benefits of a broader product portfolio, geographic diversification, and expanded pipeline it has achieved through multiple acquisitions over the past two years. This is offset by the potential for integration issues with Medicis and the potential challenges of managing a very large portfolio of small products given the high acquisition activity. Ratings Unchanged Valeant Pharmaceuticals International Inc. Corporate Credit Rating BB/Stable/-- New Ratings Valeant Pharmaceuticals International Inc. $2,114M term loan A (tranche A-1) due 2016 BBB- Recovery Rating 1 WEST 380: Hires Strasburger & Price as Bankruptcy Counsel --------------------------------------------------------- West 380 Family Care Facility filed papers in U.S. Bankruptcy Court seeking permission to employ Stephen A. Roberts, Duane J. Brescia, Andrew G. Edson, and the law firm Strasburger & Price, as bankruptcy counsel. Mr. Roberts' current hourly rate is $525, Mr. Brescia's current hourly rate is $450 and Mr. Edson's current hourly rate is $255. From time to time, other attorneys in the firm may be utilized when necessary and cost effective. The rates of other attorneys in the Firm range from $255 to $650 per hour and paralegals are $180 to $240 per hour. Prior to the initiation of the Chapter 11 case, the firm has received a total of $130,000 in connection with its assistance on workout advice, negotiating the proposed sale of assets and pre- bankruptcy preparations. Stephen A. Roberts, Esq., attests the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About West 380 Bridgeport, Texas-based West 380 Family Care Facility, doing business as North Texas Community Hospital, opened in August 2008 and operates in a 99,000 square-feet two-story building on 19 acres of land. The hospital has 36 beds and 57 doctors on staff. There are 200 employees constituting 130 full time equivalent employees. West 380 filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-46274) on Nov. 8, 2012. Andrew G. Edson, Esq., Duane J. Brescia, Esq., and Stephen A. Roberts, Esq., at Strasburger & Price LLP serve as its counsel. It estimated $10 million to $50 million in assets and $50 million to $100 million in debts. Judge D. Michael Lynn presides over the case. WEST 380: Court Approves Navigant Capital as Financial Adviser -------------------------------------------------------------- West 380 Family Care Facility sought and obtained approval from the U.S. Bankruptcy Court to employ Navigant Capital Advisors, LLC as financial adviser. Bridgeport, Texas-based West 380 Family Care Facility, doing business as North Texas Community Hospital, opened in August 2008 and operates in a 99,000 square-feet two-story building on 19 acres of land. The hospital has 36 beds and 57 doctors on staff. There are 200 employees constituting 130 full time equivalent employees. West 380 filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-46274) on Nov. 8, 2012. Andrew G. Edson, Esq., Duane J. Brescia, Esq., and Stephen A. Roberts, Esq., at Strasburger & Price LLP serve as its counsel. It estimated $10 million to $50 million in assets and $50 million to $100 million in debts. Judge D. Michael Lynn presides over the case. * Americas Hotel Transaction Volume to Eclipse 2012 at $18.5 Bil. ----------------------------------------------------------------- Hotel real estate investors, who unlocked capital and aggressively bid on hotel assets in 2012, are expected to increase their buying activity in 2013. The abundance of equity capital and improving debt markets will support a buoyant market for hotel trades this year. Americas hotel transaction volume for the year is expected to surpass the $17.5 billion that 2012 netted, with a moderate increase to $18.5 billion[i], according to initial results from Jones Lang LaSalle's annual Hotel Investment Outlook report. The Hotel Investment Outlook report is a forward-looking, global analysis which tracks key factors affecting the hotel investment market. The Americas highlights include: -- Competition for high-quality assets will push up capital values and drive down yields -- Strong re-emergence of hotel financing will be driven by CMBS -- Private equity funds to be the largest net buyers of hotels in 2013 "We expect 2013 to be another strong year for hotel transactions," said Arthur Adler, Americas CEO of Jones Lang LaSalle's Hotels & Hospitality Group. "The United States remains the world's most liquid hotel investment market which will lead the Americas region to transact approximately 55 percent of the global transaction volume. We should see global volumes top $32 billion this year." Urban Land Institute's Emerging Trends in Real Estate 2013 report agrees that this year will continue to gain transaction velocity, noting "transaction volume should finally gain momentum as buyers capitulate in the face of strong revenue growth and lenders dispose of more foreclosed assets." [ii] The Propellers of Debt Liquidity A strong re-emergence of hotel financing driven by CMBS will propel debt liquidity to its highest level since 2007. CMBS lenders will continue to drive pricing, terms and accessibility. Balance sheet lenders are more selective with regard to asset quality, market and sponsorship, but will continue to provide floating rate structures that are favored by hotel owners. It's expected that hotels will remain a targeted asset class for lenders as they offer high yields, relative to other real estate and fixed income classes, relative to the risk. "The unpaid balance of hotel CMBS loans with initial maturity dates through 2013 totals nearly $19 billion [iii]. Lenders, and in particular subordinate lenders, have shown an increased willingness to foreclose or exercise other rights and remedies, including note sales. Consequently, 2013 could very well mark the beginning of the long-awaited 'great deleveraging' particularly for hotel assets," added Mathew Comfort, Executive Vice President of Jones Lang LaSalle. Striking While the Iron's Hot: The Big Buyers There are several key drivers of deal activity including: availability and cost of capital, changes in supply and demand fundamentals, REIT stock prices, the size of the assets brought to market and the overall hotel ownership composition as more hotels are in the hands of traders verse long-term holders. Jones Lang LaSalle expects private equity funds to be the largest net buyers in 2013 as the funds unleashed more than $6.5 billion of capital into Americas hotel investments in 2012. During the next several years these funds will have a buying capacity with leverage of up to $45 billion for hotel acquisitions. Coupled with REITs, private equity will likely comprise as much as 70 percent of total acquisition volume. REITs will remain active buyers of single-asset acquisitions or small portfolios of institutional quality hotels in the top 15 markets; however, the exact force of REITs on the market will depend largely on their ability to raise capital when it is accretive to shareholders. On the flip side, private equity funds will be seeking needle-moving bulk investments in either large single assets or portfolios as well as high-yield driven trades in the secondary and tertiary markets. "Look for the private equity merger and acquisition market to also pick up," added Robert Webster, Managing Director of Jones Lang LaSalle's Hotels & Hospitality Group. "In addition, Middle Eastern and Asian investors are likely to fund $1 billion in transactions this year as they selectively pursue opportunities in prominent gateway markets like San Francisco, Los Angeles, Miami, Washington D.C. and New York. We also expect several landmark hotels to trade in secondary cities from opportunistic international investors." Beyond Brazil: Latin America and the Caribbean Investor interest in quality hotel product extends beyond the United States as Latin America and the Caribbean experience considerable growth. Opportunistic investors and hotel brands with some risk tolerance are looking to Latin America to make strategic plays in key markets where there are viable development opportunities. Mexico's expanding network of branded limited service hotels that cater to the middle class will be a primary growth area for investors. The Caribbean transaction market will be largely driven by resort or stalled projects defaulting loans. In terms of fundamentals, the standout markets will include the Dominican Republic, Jamaica and Aruba. The hotel space in South America will continue to make dramatic transformations as under-supplied countries like Brazil, Chile, Colombia and Peru are increasingly on the radar of intra-regional investors. Future Looks BrightMacro-economic pressures have kept a lid on economic growth resulting in slow but steady growth. However, as the future comes into focus growth is poised to accelerate. "A scarcity of high-quality, performing assets will drive competitive bidding pushing up capital values and driving down yields." Adler added, "Hotel fundamentals will continue to be driven by growing tourism, business and leisure travel in major gateway and convention markets, as well as in resort destinations throughout the Americas. This will result in increased occupancy and stronger pricing power. The United States is expected to experience RevPAR gains of six to seven percent, creating opportunities for buyers and sellers alike in 2013." About Jones Lang LaSalle Jones Lang LaSalle -- http://www.joneslanglasalle.com-- is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company's investment management business, is one of the world's largest and most diverse in real estate with $47 billion of assets under management. [i] This refers to asset sales and does not include note and loan sales, and deed-in-lieu transfers [ii] PwC and the Urban Land Institute. Emerging Trends in Real Estate 2013. Washington D.C.: PwC and the Urban Land Institute 2012. [iii] Morningstar LLC. * Large Junk-Bond Sales in 2012 Continuing This Year ---------------------------------------------------- Primary issuance in the leveraged finance markets remains strong despite uncertainty around U.S. debt ceiling negotiations, according to Fitch Ratings. The high yield bond market is off to a record start this year, coming on the heels of a record-setting 2012 during which over $315 billion of high yield bonds were priced. As of Jan. 15, a total of 19 high yield bonds totaling $9.3 billion have been sold. This represents a 12% increase over the same time period last year. Over 75% of the issuance to date has been used to refinance existing debt, a trend generally seen throughout 2012. "Issuers continue to take advantage of historically low spreads in an effort to reduce overall interest expense and push out their debt maturity profile. We expect this trend to continue as long, as borrowing rates remain favorable. High yield spreads have dropped 35 basis points thus far in 2013. Based on Fitch's most recent "U.S. Leveraged Finance Stats Quarterly" report, interest coverage for the speculative grade category has improved from 2.9x in 2010 to 3.5x at the end of the third quarter 2012. Speculative grade coverage statistics could continue to strengthen, as they are just now beginning to realize a full 12 months of savings from lower cost debt issued over the past 12 to 18 months, offset by higher debt levels among companies at the higher end of the credit spectrum," Fitch says. "High yield investors have seemingly become comfortable once again with risk, underscored by easy access for issuers. Investor confidence has been supported by decent economic and earnings reports, stronger credit profiles and a benign bond default at remain around 2% (we project the U.S. high yield default rate to be around 2% in 2013). High yield investors poured in $1.1 billion into high yield retail funds the week of Jan. 9, 2013, reversing a four week trend of outflows and further evidence of a risk on investor environment. "The leveraged loan market has also had a solid start. After a somewhat slow first week, the leveraged loan market saw a pick-up in primary activity. Loan demand continues to be high as investors look to hedge against higher future inflation. Leveraged loan retail funds have seen two weeks of inflows in 2013, totaling nearly $1 billion. This marks the 30th consecutive week of positive flows into the asset class, dating back to 2012. "Loan demand from collateral loan obligations (CLOs) has continued as the primary CLO market has quickly picked up steam in 2013. As many as 13 deals are being marketed and, so far this week, three deals were priced totaling approximately $1.8 billion. Based on the pipeline of CLO deals to date, over 35 deals could price between January and February and most consensus estimates put full year 2013 issuance between $70 billion and $80 billion. "Through the first two weeks, a total of 14 deals have been launched, totaling $15 billion of new loan issuance. In addition, Fitch's forward calendar has doubled from $16 billion at the end of December to $35 billion as of Jan. 15, 2013. As loan spreads continue to grind lower, we expect borrowers will take advantage of the favorable tone, which could translate into a new wave of repricings, similar to what was seen in the first four months of last year. "We believe one trend likely to continue into 2013 is the resurgence of the second-lien loan market. Second-lien issuance hit an annual post-crisis high of $18 billion in 2012, with nearly 40% of this total coming in the last quarter of the year. Thus far in January, Ameriforge Group, NEP Broadcasting, NFR Energy, LLC, and TNS Inc. have combined added $1 billion of second-lien loans to the forward calendar. "Recent surges in second-lien issuance have been observed during periods of strong demand, as investors are willing to accept poorer security packages in exchange for higher pricing. We note that the recovery rates on second-liens loans over the past several years have decreased significantly and also exhibit a wider range of values than first lien recoveries. On average, second-lien recoveries are more similar of those observed on unsecured bonds. "Limited supply in the primary market has forced investors to turn to the secondary market for assets, which has pushed secondary bids higher. After hitting a 2012 high of 97.94 on Dec. 24, 2012, the overall market bid continues to trend higher in 2013. Today, approximately 80% of all loans in the secondary loan market are priced at 98.0 or higher." * Recoveries More Certain for Senior Debt Holders in Oil & Gas -------------------------------------------------------------- North American oil and gas exploration and production companies' reputation for higher-than-average investor recoveries following default does not hold true for all debt instruments, Moody's Investors Service says in a new report. While senior secured bank debt has superior expected loss, this comes at the expense of unsecured and subordinated debt holders. The superior expected loss at the most senior level of oil and gas companies' capital structure is not entirely for the reasons usually assumed. "The continuous depletion of oil and gas companies' assets, in combination with the cyclical, commodity- based nature of their business, has resulted in more conservative financial structures," says Stuart Miller, Vice President - Senior Credit Officer and co-author of "Oil and Gas Reserve-Based Loans Outperform." In addition, oil and gas exploration and production companies benefit from a transparent and liquid secondary market into which they can sell reserves to raise cash or repay debt, as well as the ability to defer capital investment during periods of financial stress. And all these same factors can help oil and gas companies avoid default entirely. "Our data suggests that at the firm-wide level investor recoveries for oil and gas companies are close to the average for all non- financial corporates," says Senior Vice President and co-author David Keisman. "Where oil and gas firms differ is at the senior secured level, where lenders in senior secured bank debt, including reserve-based loans, have fared better than senior secured lenders in other industries." Indeed, senior secured bank debt recoveries in Moody's sample of oil and gas exploration and production companies that have defaulted averaged 94.7%, Mr. Keisman says, compared with 80.2% for the broader universe of corporate debt issuers. Unsecured and subordinated debt instruments bore the brunt of losses in the oil and gas sector, showing below-average recoveries. * * * Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that buying debt of oil and gas exploration and production companies in the U.S. is a safe haven from potential default, although only on the secured end of the capital structure. According to the report, Moody's Investors Service said that the conventional wisdom that so-called E&P companies inflict fewer losses on debt holders is true only on the secured end of the spectrum. Looking at 31 E&P defaults in the past 25 years, Moody's found that above-average recovery is true only for secured debt. For unsecured and subordinated debt, the recoveries are below average, Moody's said. For bank debt, the average recovery has been 94.7 percent, compared with 80.2% for all non-financial defaulting companies. For senior secured bank debt, the average recovery for E&Ps is even higher at 98.5%. Only one E&P didn't repay senior secured debt in full, Moody's said. For unsecured bonds, the average E&P recovery is 32.3%, less than the 39.2% average for non-financial defaulters. Moody's ascribed better recoveries for secured creditors to conservative capital structures necessitated by "continuous depletion" of assets and exposure to a cyclical commodity business. Recoveries are generally better because there is "an active secondary market for oil and gas reserve assets," according to the Moody's report. ATP Oil & Gas Corp. bears out Moody's findings with regard to unsecured debt. The $1.5 billion in 11.875% second-lien notes traded Jan. 17 for 7.75 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Whether secured creditors of Houston-based ATP emerge without a scratch is yet to be seen. ATP's shallow- water oil and gas properties in the Gulf of Mexico will be sold at auction on Feb. 26 if the U.S. Bankruptcy Court in Houston approves sale procedures at a Jan. 24 hearing. ATP's deep-water properties will be sold later. ATP filed for reorganization under Chapter 11 in August. * Avison Young Releases 2013 Commercial Real Estate Forecast ------------------------------------------------------------ 2013: A year to position for the future; looking much like 2012, Canada and U.S. commercial real estate markets offer a healthy balance of risk and opportunity Stability and opportunity will drive Canada's commercial real estate markets in 2013, while select U.S. markets and sectors are poised for growth, even while caution persists. Against a global backdrop of financial uncertainty stemming from continuing issues with stability in Europe, a potential slowdown in China, the debt ceiling and new "fiscal cliffs" in the U.S. and potential plateauing in Canada, North American real estate markets still appear to be the most stable -- with a healthy balance of risk and opportunity. These are some of the key trends noted in Avison Young's 2013 Canada, U.S. Forecast, released on Jan. 17. The annual report covers the office, retail, industrial and investment markets in 29 Canadian and U.S. metropolitan regions: Calgary, Edmonton, Halifax, Lethbridge, Mississauga, Montreal, Ottawa, Quebec City, Regina, Toronto, Vancouver, Winnipeg, Atlanta, Boston, Charleston, Chicago, Dallas, Detroit, Houston, Las Vegas, Los Angeles, New Jersey, New York, Pittsburgh, Raleigh-Durham, Reno, San Francisco, South Florida and Washington, DC. "With all the headwinds that continue to plague our industry, what we at Avison Young have been advising for the last three years will continue to be our mantra: stay patient, risk-manage your strategy on the buy-side, and take advantage of off-market and distressed opportunities when they present themselves," comments Mark E. Rose, Chair and CEO of Avison Young. He continues: "As a seller, do not be afraid to take some profits. Core assets in the major markets are highly sought-after and, therefore, aggressively priced when up for competitive bid. Plenty of opportunities can still be found in off-market transactions, if one knows where to look. At Avison Young, we have been very successful in helping our clients do just that." According to the report, in Canada, the shortage of product (evidenced by real estate investment trusts (REITs) buying portfolios and private funds buying REITs) and very low current vacancy rates suggest more demand-side price upside, even though the large development pipeline may temper rent growth. The strong Canadian dollar is a problem for the domestic economy, though positive for Canadian institutions going global -- a trend expected to increase in 2013. These factors, combined with pervasive condo overbuilding, are resulting in "Are we at the top?" questions in Canada. On the other hand, in the U.S., the early signs of a housing recovery are triggering the question: "Is the U.S. at the bottom?" The lack of development is providing confidence for investors making value-add acquisitions, and core class A product is expensive everywhere. Thus, as Canada appears to have reached a short-term top in pricing, the U.S. is just beginning to get its sea legs. Mr. Rose adds: "Amid uncertainty and risk lies opportunity. This is not to say that we should write off 2013, or sit on the sidelines. Quite the opposite: there is much to be transacted in 2013 while strengthening positions for the future, as the ongoing issues domestically and abroad see some form of resolution." "What we are recommending to clients is clear and consistent. Focus on building capital positions in 2013, perhaps selling non- strategic assets to fund a war chest; and arrange for access to additional debt and equity, as 2014 appears bright. Continue to execute on current plans in 2013 as the environment is likely to remain stable. Re-balance investment portfolios according to a five-year strategy horizon and adjust your corporate real estate occupancy. If you are financing or re-financing, seek longer-term maturities at today's unprecedented low rates." The report goes on to show that office and industrial vacancy rates in Canada continue to be half of those in the U.S.; however, U.S. markets are expected to improve -- some more quickly than others -- narrowing the spread. Across the 12 Canadian office markets tracked by Avison Young, vacancy sat at 7.1% as 2012 drew to a close. By comparison, the 17 U.S. office markets collectively displayed a vacancy of 15.1%. A distinct gap also exists in the industrial markets, with Canada posting a vacancy rate of 4.7%, compared with 8.8% in the U.S. "Those of us who follow the markets closely are beginning to sound a bit like a broken record when it comes to praising Canada's well-being. Relative to the rest of the world, Canada is seen as a picture of economic health, and nowhere is this more evident than in the performance of the commercial real estate market, which continues to display sound and improving market fundamentals across most sectors and asset classes," says Bill Argeropoulos, Vice-President and Director of Research (Canada) for Avison Young. "While Canada has accelerated up the recovery curve and is now showing moderate signs of slowing, the positive signals out of the U.S. -- be it the housing market with rising starts, sales and pricing, or improving employment levels -- can only benefit Canada in the long run," he says. "Coming off what will likely be a record year in commercial real estate investment sales in Canada, and given the small investable universe and competitive climate that has emerged, cross-border activity will grow further. Although 10-year bond yields are similar between Canada and the U.S., for the most part, cap rates are generally higher in the U.S. The wider spread in investment yields will intensify cross-border activity with more Canadian buyers looking for bargains in secondary markets, while others will continue to bid for assets in fortress or gateway markets (Washington, DC and New York), either alone or through joint-venture partnerships," adds Mr. Argeropoulos. According to the report, the U.S. real estate markets survived the ambiguity of the election year and looming so-called "fiscal cliff" in 2012 with modest growth in most sectors and markets, though fluctuations in values persisted. "The major coastal markets again seized the most capital interest, leaving the interior markets lagging," notes Earl Webb, Avison Young's President, U.S. Operations. "As we approached year-end 2012, sales volumes were on pace to eclipse 2011, led by multi-residential and office sales." Webb states that absorption rates in most of the office markets were modest as corporate and governmental occupiers remained very cautious, though cities buoyed by energy and tech sectors -- or "gateway" metropolitan areas -- saw the strongest performance. "Even New York City, with its diverse business base, saw a slowing of absorption and a flattening of rents -- currently at $56 (USD) per square foot (psf) on average with only Midtown South showing rental strength," he notes. Webb says early 2013 will look and feel like 2012, with a great deal of uncertainty persisting and with most markets only posting modest improvement. "The overall lack of development is a plus for real estate markets, and recent job growth is encouraging; however, we'll need sustained job growth for a full and robust recovery." CANADA Office Approaching nearly 500 million square feet (msf), Canada's office market had another solid year, characterized by mostly low- to mid-single-digit vacancy rates, relatively healthy demand, stable-to-rising rental rates and a growing urban supply pipeline driven by corporations following the migration of younger workers who are increasingly living downtown. This has kicked off another development cycle in almost every market with the majority of the space projected to come online in the next four years. As 2012 was winding down, the national office vacancy rate settled at 7.1%, down from 7.3% in 2011 and from 2009's recessionary peak of 9.2% - a 210-basis-point (bps) rebound. A west-east divide persists not only in employment, but also in vacancy rates. Larger resource-rich and commodity-based Western markets (Vancouver, Calgary and Edmonton) had a combined market-wide vacancy of 6% in 2012 - 110 bps below the national average. From this group, Calgary is by far the tightest market with a vacancy rate of 4.4% (-160 bps since 2011). The lack of vacant large-block options in downtown Calgary has pushed some tenants into the suburbs, including Imperial Oil, which made an unprecedented decision to move to Quarry Park in the suburban south. Sitting some 230 bps higher at 6.7% (-70 bps), Vancouver is in the midst of the largest downtown office-building construction cycle it has ever experienced, with four new office towers and one major redevelopment underway. Edmonton came in at 8.7% (-80 bps), and economic growth and the expansion of numerous engineering and energy firms are expected to encourage leasing activity in 2013, pushing vacancy lower. The smaller, Prairie markets are booming as well. Despite the biggest jump (+320 bps) in vacancy of any Canadian market last year, Regina once again recorded the lowest vacancy (4.2%) in the country, beating out Calgary. Neighbouring Winnipeg finished at 6.3% (-70 bps), while Lethbridge saw its vacancy rise 170 bps to 11.4%. For 2013, and in order of magnitude, vacancy rates are projected to rise in Vancouver (+70 bps to 7.4%), Winnipeg (+10 bps to 6.4%), fall in Calgary (-70 bps to 3.7%) and Edmonton (-40 bps to 8.3%) and remain unchanged in Regina and Lethbridge. On the other hand, the major financial services and manufacturing- based markets in the East (Toronto, Montreal and Ottawa) collectively posted an office vacancy rate almost 200 bps higher (7.9%) than their large Western counterparts. Despite seeing vacancy rise to 8.1% (+30 bps) in the closing months of 2012, Toronto, the nation's largest city and office market, is once again experiencing intense construction activity downtown -- only a short time since the delivery of the last cycle. A number of projects are currently underway, with other announcements -- including this week's groundbreaking of 1 York Street by Menkes Developments and Healthcare of Ontario Pension Plan -- taking place in the opening months of 2013. Even Montreal (-30 bps to 8.2%) is witnessing a mini-renaissance in downtown office development, following a long period of inactivity. Ottawa, the nation's capital, continued to weather the effects of the Conservative government's downsizing better than many predicted. Overall Ottawa office vacancy rose to 6.2% in 2012 -- a modest increase from 5.6% in 2011. Elsewhere in the East, vacancy inched up 10 bps to 12.8% in Mississauga/Toronto West and stayed the same in Quebec City (5%) and Halifax (5.5%). This year, vacancy is expected to hold firm in Halifax, decline in Ottawa (-20 bps to 6%) and rise in Quebec City (+180 bps to 6.8%), Montreal (+50 bps to 8.7%), Toronto (+40 bps to 8.5%) and Mississauga/Toronto West (+30 bps to 13.1%). In 2013, demand will be frustrated in some Canadian markets by the shortage of available space, putting upward pressure on rental rates in affected market segments until the developments currently underway are delivered, starting in 2014. In the meantime, the national office vacancy rate is expected to increase a modest 20 bps to 7.3% by the end of 2013. Retail Canada's retail landscape remains a popular destination for many foreign retailers, especially those south of the border in the U.S. (Nordstrom and Microsoft Store), lured by the resilience of the Canadian economy and continuing low interest rates, which allow consumers to spend more. The strong activity is taking place despite warnings about Canadian household debt levels rising to the point where the ratio of household debt to disposable income is now higher than U.S. consumer indebtedness prior to the crash. Two important metrics driving retailers to Canada from the U.S. may well be the sizeable difference in retail sales per square foot, and the large spread in retail space per capita between the two countries. Steadily rising retail sales growth in most Canadian markets, coupled with aggressive U.S. expansion into Canada, has kept the Canadian retail stock almost fully occupied and the development pipeline active. For example, in Calgary, up to 1 msf of retail space will be completed this year at projects such as Sierra Springs. While Canadian retailers are bracing for store openings from U.S. discount giant Target in 2013, landlords are continually reinvesting in and repositioning retail centres to retain tenants and attract the many new brands entering the country. Significant expenditures and redevelopment have been completed or are underway, including: Bayshore and St. Laurent Centre in Ottawa; Yorkdale and Sherway Gardens in Toronto; Southland Mall in Regina and Mic Mac and West End Malls in Halifax, to name a few. Live-work-play downtown lifestyles are increasingly popular, and urban retail intensification is increasing, transforming urban centres as suburban retail players join forces with office and residential experts to acquire sites for mixed-use developments. Going forward, retailers will continue their balancing act between "bricks and clicks", responding to evolving consumer habits with small-format stores, virtual stores, electronic coupons and mobile apps as emerging trends that will redefine the retail landscape of the future. Industrial Canada's 1.8-billion-square-foot (bsf) industrial market has seen vacancy decline steadily from a recession high of 6.3% in 2009 to 4.7% in late 2012. Space shortages are evident in the Western markets, which posted a combined vacancy rate of 3.7% in 2012 - 100 bps below the national average. In the West, industrial vacancy rates ranged from a low of 2% in Winnipeg (-10 bps) - edging out Lethbridge (-70 bps to 2.2%) and Regina (+20 bps to 2.3%) - to a high of 4.8% in Calgary (-10 bps). The West's largest industrial market, Vancouver, finished 2012 at 3.6%, plunging 100 bps during the last year -- the most improved of any of the industrial markets. Rounding off the West was Edmonton (+40 bps to 4.4%). This year, with the exception of Edmonton which will remain unchanged, vacancy is expected to climb in the remaining Western markets by between 10 and 170 bps with the biggest jump coming in Calgary, owing largely to the delivery of new supply. In contrast, the Eastern industrial markets were higher but respectable at 5.1% - 40 bps above the national average. The country's largest market, Toronto, saw its vacancy rate inch up 20 bps to 5.1% towards the end of 2012, while Halifax recorded the biggest annual jump - up 100 bps to 6.6%. Elsewhere in the East, vacancy rates trended downwards, led by the tightest market, Ottawa (-90 bps to 2.5%), Montreal (-30 bps to 5.4%) and Mississauga/Toronto West (-10 bps to 5.7%). By the end of 2013, industrial vacancy rates are expected to fall in Halifax (- 60 bps to 6%), hold firm in Mississauga/Toronto West (5.7%) and rise in Toronto (+40 bps to 5.5%), Ottawa (+50 bps to 3%) and Montreal (+10 bps to 5.5%). Developers in most cities have responded to tight market conditions with build-to-suit and speculative construction - with increased demand, especially from U.S.-based corporations, for facilities offering higher clear heights and multiple large bays. This year will be similar to 2012, with new supply prompting a moderate rise in vacancy, slightly above the 5% range. Look for older, dysfunctional stock to be demolished, while manufacturing facilities are repurposed for distribution uses. Investment Supported by healthy underlying property market fundamentals (low vacancy and stable-to-rising rental rates), attractively priced capital and all-time-low borrowing costs, the commercial real estate investment sector had an exceptional 2012, and with the overall tally still to come, it may very well end up being a record year with sales volume (for office, industrial, retail and multi-residential assets) exceeding the previous peak of $24 billion (CAD) in 2007. Early indications point to record investment volumes for a number of markets, including Vancouver, Calgary, Toronto and Ottawa. No matter the final result, 2012 was a year of big deals, ranging from blockbuster, single-asset acquisitions -- Scotia Plaza (100% interest) and TD Canada Trust Tower (50% interest) in the heart of Toronto's financial core by Dundee and H&R REITs and Public Sector Pension Investment Board, respectively - to notable M & A activity, including the takeout of CANMARC and Whiterock by Cominar and Dundee, respectively, to IPOs by Dundee Industrial REIT and Regal Lifestyle Communities. While the investor profile remains varied, the $1.3-billion sale of Scotia Plaza, among others, established REITs as aggressive buyers who can go head-to-head with -- and outbid -- the pension funds for coveted assets. This environment has pushed capitalization rates for top-tier, well-leased assets in core locations to historic levels, with every transaction setting a new benchmark low. Every market had its special story or trend, be it in Edmonton, where land was the most actively traded property type as development became an alternative to purchasing highly priced existing properties, or Vancouver, where the battle for yield pushed up pricing and the prevalence of off-market deals increased again. The same forces that were at play in 2012 will continue to fuel the flow of capital to real estate throughout 2013. However, the usual risks remain: the threat of rising interest rates (though the consensus is that they will remain low in the short- to medium-term), less product coming to the market, and the possibility that prices for top-tier assets have already reached a plateau. Some buyers are taking precautions by financing (or refinancing) assets over longer periods, while others are opting for development. There is also a growing sense that the risk premium to real estate is narrowing and that the focus will turn to driving net operating income. Further cap rate compression will likely make acquisitions less accretive for REITs, laying the groundwork for increased M & A activity (e.g. KingSett - Primaris) and REIT formations (e.g. Loblaws and HBC). U.S. Office The 10.2-bsf U.S. office market registered an overall vacancy rate of 12.1% as year-end 2012 approached, reflecting a slight improvement compared with 2011. Class A properties accounted for the bulk of net absorption in 2012 as the flight-to- quality trend continued and tenants sought to lock-in favorable rates. As a result, class A vacancy declined 50 bps to 13.6% from 14.1% at the end of 2011. Tenants continued to enjoy favorable conditions with tech- and energy-driven markets experiencing the greatest levels of positive absorption. The 17 U.S. markets Avison Young tracked for this report comprise 2.8 bsf with an overall vacancy rate of 15.1%, down slightly from that of year-end 2011. A majority of Avison Young markets are forecasting further improvement in 2013; however, vacancy in the U.S. markets will likely remain elevated overall when compared with Canada. Among Avison Young markets, New Jersey recorded the highest 2012 vacancy (+50 bps to 25.5%), with flat market conditions expected in 2013. Although down slightly from 2011, vacancy rates in Atlanta (-100 bps to 19.9%) and Detroit (-70 bps to 19.8%) remained high in 2012. The lowest vacancy rates were recorded in Pittsburgh (8.1%), where rents have risen to new levels; San Francisco (9.9%), where large-tenant movement is driving the market; and Manhattan (10.6%). Manhattan, the largest U.S. office market, reported flat absorption and rents in 2012; however, employment growth is leading to positive absorption and vacancy could return to single digits by year-end 2013. At the submarket level, the steady delivery of new space at World Trade Center and World Financial Center could push vacancy into the teens for downtown class A space. With minimal new office construction and a lower unemployment rate, Reno experienced the biggest improvement (-330 bps to 16.4%) in office vacancy from 2011 to 2012. The Las Vegas market is showing signs of slow recovery; while 2012 saw no change in vacancy rates, there is a -90 bps projected change by year-end 2013. Only four markets expect to see increased vacancy in 2013, with the largest increase being in Washington, DC. (+60 bps), where there are threats of federal spending cutbacks and where 4 msf of office space is set to be delivered this year. Retail U.S. retail markets held steady with an average vacancy of 6.9% -- unchanged for four quarters -- and were kept in check by a dearth of new supply. Delivery of new retail product has fallen each year since 2008 and, in 2012, 46 msf was delivered. Power centers are outperforming retail as a whole and posted a 6.2% vacancy rate nationwide. Many Avison Young markets are reporting the expansion of discount and big-box retailers. Select submarkets in Charleston and Houston have improving retail conditions due to population increases; Boston is seeing further stabilization; San Francisco is reporting a steady retail comeback and limited construction; and New Jersey welcomed several new retailers and substantial development, with nearly 3.5 msf of new inventory going under construction in 2012. Two of Raleigh-Durham's largest malls finished 2012 with vacancy rates below 0.5%, and retail development activity there increased to the highest levels witnessed since 2008, with slightly more than 859,000 sf scheduled for delivery in 2013. Industrial Avison Young industrial markets totaled 6.6 bsf with an average vacancy rate of 8.8% as of third-quarter 2012 -- nearly double the vacancy found in Avison Young's Canadian markets. Chicago (1.2 bsf) and Los Angeles (1.1 bsf) are the largest U.S. industrial markets, with vacancy rates of 9.6% and 4.5%, respectively. Charleston saw the biggest decrease in vacancy, ending 2011 at 12.1% and dropping to 9.9% in 2012. Reno was the only city to see an increase in industrial vacancy during 2012 (+20 bps) and all but two U.S. markets are expecting further declines in vacancy during 2013. Dallas (+10 bps) is experiencing growth of warehouse/distribution space around the city's inland port and, in the Houston market (+30 bps), oil and gas drilling activity is fueling manufacturing and the Port of Houston's expansion. Atlanta should continue to experience positive absorption in 2013 with the largest projected drop (-400 bps) in vacancy. The anticipated expansion of the Panama Canal is spurring speculative development and aggressive land acquisitions in South Florida, while in Detroit, industrial rents are primed to rise following four quarters of positive absorption. Investment Through third-quarter 2012, total investment volume for multi-residential, office, industrial and retail properties topped $163 billion, demonstrating stabilization after second-quarter sales volumes for all property types (except multi-residential) fell year over year. Demand for core assets with stable cash flow exceeded the available product in many U.S. markets. Manhattan led the country in office sales with $7.8 billion, followed by San Francisco with $3.9 billion and Los Angeles with $3.1 billion. In Boston, the volume of industrial purchases doubled from 2011 to 2012. Capital flow into the U.S. continued in 2012 as cross-border investors accounted for $20.3 billion in sales by mid-December. Canadian buyers alone purchased $7.5 billion in multi-residential, office, industrial and retail assets. Avison Young anticipates growing opportunities in the U.S. for investors willing to look to non-coastal locations and expects most markets to experience uncertainty and further, albeit modest, recovery in 2013. Founded in 1978, Avison Young is Canada's largest independently- owned commercial real estate services company. Headquartered in Toronto, Ontario, Avison Young is also the largest Canadian-owned, principal-managed commercial real estate brokerage firm in North America. Comprising more than 1,100 real estate professionals in 43 offices across Canada and the U.S., the full-service commercial real estate company provides value-added, client-centric investment sales, leasing, advisory, management, financing and mortgage placement services to owners and occupiers of office, retail, industrial and multi-residential properties. * M&A Advisor Submits Finalists of 7th Annual Turnaround Awards -------------------------------------------------------------- The M&A Advisor on Jan. 18 announced that 175 nominations, representing over 300 companies, have been submitted for the 7th Annual M&A Advisor Turnaround Awards. The Finalist companies have been selected from the nominees in the first stage of evaluation and the independent panel of judges will now focus their attention on the challenging task of selecting the ultimate award winners. The winners for Distressed M&A Deal of the Year, Restructuring Deal of the Year, Reorganization Deal of the Year, Refinancing Deal of the Year, Firm of the Year, Turnaround Product/Service of the Year and Turnaround Professional of the Year categories will be announced at the 7th Annual M&A Advisor Turnaround Awards Gala on Wednesday, March 6th at the Colony Hotel in Palm Beach, FL. "Although the bankruptcy filings of corporations such as Hawker Beechcraft and Residential Capital, municipalities such as Stockton, CA. and the liquidation activities of Hostess Brands, highlight today's difficult environment, there were thousands of successful turnarounds in 2012 thanks to the energy and ingenuity of the world's leading restructuring and distressed investing professionals," says Roger Aguinaldo, CEO and Founder of The M&A Advisor. "The deal teams represented in our 2013 Turnaround Award finalist group have demonstrated creativity and perseverance in today's challenging climate." This year's finalists represent the industry's leading firms, including: Blackstone; Rothschild; Bloomberg; Mesirow Financial Consulting; FTI Consulting; Kurtzman Carson Consultants; Sun Capital; Bayside and feature the year's leading transactions including: Chapter 11 Restructuring of General Maritime Corporation; Financial restructuring and recapitalization of Lower Bucks Hospital; Reorganization of Rotonics Manufacturing, Inc. by Lake Pointe Partners, LLC; Restructuring of Kerzner International Holdings Limited; Reddy Ice Corporation Restructuring; Restructuring of Los Angeles Dodgers; Watermill Group's Acquisition of Manistique Papers; Reorganization of Lehman Brothers Holdings; Reorganization of Travelport and Restructuring of Landsbanki. For more information, please visit at http://www.maadvisor.comor contact The M&A Advisor at 718 997 7900. The M&A Advisor Since 1998, The M&A Advisor has been presenting, recognizing the achievement of and facilitating connections between the world's leading mergers and acquisitions, financing and turnaround professionals with a comprehensive range of services including M&A SUMMITS; M&A AWARDS; M&A CONNECTS(TM); M&A ALERTS(TM), M&A LINKS(TM) and M&A MARKET INTEL(TM). * MorrisAnderson Promotes Alpesh Amin to Managing Director ---------------------------------------------------------- MorrisAnderson, a Chicago-based middle market financial and operational advisory firm, on Jan. 18 disclosed that Alpesh Amin has been promoted to managing director from director. In this role, Amin will leverage his more than 13 years of experience in corporate finance, restructuring and banking to further support MorrisAnderson's advisory services for distressed companies and private equity firms. Since Mr. Amin, 36, joined MorrisAnderson in 2008 as a consultant, he has served in an advisory capacity for both company management and creditors. His background includes corporate turnarounds and restructurings, Chapter 11 bankruptcy proceedings, asset sales and liquidations and business plan development, particularly for companies in the consumer products, electronics, construction materials, distribution, transportation and automotive sectors. "Alpesh consistently provides solutions and leadership for distressed companies, lenders and private equity firms navigating complex business challenges," said Dan Dooley, principal and chief executive officer of MorrisAnderson. "He is a strong leader at the firm, and has particularly helped grow our construction materials practice group by successfully managing client engagements within that sector." Most recently, Mr. Amin served as financial advisor and investment banker for Werthan Packaging, Inc., a regional printing and packaging manufacturer, where he assisted the company in developing and executing a business plan and led the successful refinancing efforts for the company. Mr. Amin also served as financial advisor and investment banker to Ridgewood Corp., a building products retailer and wholesaler, and developed a business plan that enabled Ridgewood to sell its assets while preserving the value of equity in various real estate assets and preserving 50 employees' jobs. Additionally, Mr. Amin served as financial advisor and investment banker to a family-owned hardware and building supply distributor. In this role, he assisted the company in developing a multi- faceted business plan that included restructuring the company's core operations, the divestiture of its underperforming subsidiary and a senior debt refinancing. "Alpesh's career trajectory from consultant to director and now to managing director is an example of MorrisAnderson's corporate growth strategy to provide meaningful career advancement opportunities at all levels of our firm," added Mr. Dooley. "We strive to ensure emerging leaders such as Alpesh are recognized for their contributions and accomplishments so our clients can continue to receive industry-leading financial and operational advisory services during times of distress." Prior to joining MorrisAnderson, Amin held restructuring, turnaround and mergers and acquisitions roles with Huron Consulting Group, Bridge Associates, LLC, Merrill Lynch and LaSalle Bank NA. Mr. Amin is a member of the Turnaround Management Association (TMA) and the American Bankruptcy Institute (ABI). He holds a bachelor's degree in business administration with concentrations in finance and management information systems from Miami University. About MorrisAnderson Chicago-based MorrisAnderson is a middle market consulting firm focused on underperforming and distressed companies, with offices in Florida, Missouri, New York and Ohio. The firm's service offerings include financial advisory, interim, turnaround and crisis management, investment banking, performance improvement and litigation support. * Zhou and Chini Firm Offers Free Consultations on Chapter 11 ------------------------------------------------------------- The law office of Zhou and Chini has announced it will conduct free consultations for individuals seeking more information about Chapter 11 bankruptcy. The law office decided to offer this service to help struggling Orange County business that are looking for alternative options. The law office of Zhou and Chini are well versed in bankruptcy law and are offering this free service to help give options for those in need. For more information about the bankruptcy attorneys in Orange County, or about Chapter 11 bankruptcy Orange County information visit, http://is.gd/BGuAuY For more information about bankruptcy and the different Chapters involved speak to an experienced bankruptcy lawyer at, 888-901- 3440 The Law Office of Zhou & Chini servicing the cities and counties of California. He is a graduate of UCLA and has been practicing law since 1999. Mr. Zhou has a wealth of experience in bankruptcy, civil litigation, family law, criminal law and unlawful detainer. Zhou and Chini Law Offices provide bankruptcy assistance in Orange County, Los Angeles and San Diego. * BOND PRICING -- For Week From Jan. 17 to 18, 2013 --------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- 1ST BAP CHUR MEL 7.500 12/12/2014 5.000 AES EASTERN ENER 9.000 1/2/2017 3.570 AES EASTERN ENER 9.670 1/2/2029 4.125 AGY HOLDING COR 11.000 11/15/2014 51.250 AHERN RENTALS 9.250 8/15/2013 79.750 ALION SCIENCE 10.250 2/1/2015 50.500 AMBAC INC 6.150 2/7/2087 5.000 ATP OIL & GAS 11.875 5/1/2015 7.000 ATP OIL & GAS 11.875 5/1/2015 7.000 ATP OIL & GAS 11.875 5/1/2015 7.500 BUFFALO THUNDER 9.375 12/15/2014 34.250 CENTRAL EUROPEAN 3.000 3/15/2013 53.550 CHAMPION ENTERPR 2.750 11/1/2037 1.000 DELTA AIR 1992B2 10.125 3/11/2015 30.000 DOWNEY FINANCIAL 6.500 7/1/2014 64.250 DYN-RSTN/DNKM PT 7.670 11/8/2016 4.500 EASTMAN KODAK CO 7.000 4/1/2017 13.500 EASTMAN KODAK CO 7.250 11/15/2013 14.000 EASTMAN KODAK CO 9.200 6/1/2021 13.775 EASTMAN KODAK CO 9.950 7/1/2018 12.678 EDISON MISSION 7.500 6/15/2013 50.290 ELEC DATA SYSTEM 3.875 7/15/2023 95.000 FAIRPOINT COMMUN 13.125 4/1/2018 1.000 FAIRPOINT COMMUN 13.125 4/1/2018 1.000 FAIRPOINT COMMUN 13.125 4/2/2018 1.220 FIBERTOWER CORP 9.000 1/1/2016 28.000 GEOKINETICS HLDG 9.750 12/15/2014 54.375 GEOKINETICS HLDG 9.750 12/15/2014 58.000 GLB AVTN HLDG IN 14.000 8/15/2013 18.900 GLOBALSTAR INC 5.750 4/1/2028 61.500 GMX RESOURCES 4.500 5/1/2015 44.010 GMX RESOURCES 5.000 2/1/2013 97.260 HAWKER BEECHCRAF 8.500 4/1/2015 6.000 HAWKER BEECHCRAF 8.875 4/1/2015 16.000 HORIZON LINES 6.000 4/15/2017 30.000 JAMES RIVER COAL 4.500 12/1/2015 38.250 JEHOVAH-JIREH 7.800 9/10/2015 N/A LBI MEDIA INC 8.500 8/1/2017 25.375 LEHMAN BROS HLDG 0.250 12/12/2013 21.125 LEHMAN BROS HLDG 0.250 1/26/2014 21.125 LEHMAN BROS HLDG 1.000 10/17/2013 21.125 LEHMAN BROS HLDG 1.000 3/29/2014 21.125 LEHMAN BROS HLDG 1.000 8/17/2014 21.125 LEHMAN BROS HLDG 1.000 8/17/2014 21.125 LEHMAN BROS HLDG 1.250 2/6/2014 21.125 MASHANTUCKET PEQ 8.500 11/15/2015 5.250 MASHANTUCKET PEQ 8.500 11/15/2015 5.250 MASHANTUCKET TRB 5.912 9/1/2021 5.250 MF GLOBAL LTD 9.000 6/20/2038 65.500 OPENSL-CALL02/13 9.750 2/1/2015 83.000 OVERSEAS SHIPHLD 8.750 12/1/2013 36.770 PLATINUM ENERGY 14.250 3/1/2015 66.000 PLATINUM ENERGY 14.250 3/1/2015 N/A PMI CAPITAL I 8.309 2/1/2027 0.125 PMI GROUP INC 6.000 9/15/2016 30.500 POWERWAVE TECH 1.875 11/15/2024 3.500 POWERWAVE TECH 1.875 11/15/2024 3.500 POWERWAVE TECH 3.875 10/1/2027 3.500 POWERWAVE TECH 3.875 10/1/2027 3.500 RADISYS CORP 2.750 2/15/2013 100.000 RESIDENTIAL CAP 6.875 6/30/2015 29.500 REVEL AC INC 12.000 3/15/2018 N/A SAVIENT PHARMA 4.750 2/1/2018 27.500 SCHOOL SPECIALTY 3.750 11/30/2026 50.625 TERRESTAR NETWOR 6.500 6/15/2014 10.000 TEXAS COMP/TCEH 10.250 11/1/2015 30.750 TEXAS COMP/TCEH 10.250 11/1/2015 28.000 TEXAS COMP/TCEH 10.250 11/1/2015 31.010 TEXAS COMP/TCEH 15.000 4/1/2021 41.100 TEXAS COMP/TCEH 15.000 4/1/2021 35.000 THQ INC 5.000 8/15/2014 26.250 TL ACQUISITIONS 10.500 1/15/2015 35.000 TL ACQUISITIONS 10.500 1/15/2015 34.625 TOUSA INC 7.500 1/15/2015 0.001 UAL 1991 TRUST 10.020 3/22/2014 11.250 USEC INC 3.000 10/1/2014 38.500 VERSO PAPER 11.375 8/1/2016 38.800 WCI COMMUNITIES 6.625 3/15/2015 0.875 WESTERN EXPRESS 12.500 4/15/2015 63.375 WESTERN EXPRESS 12.500 4/15/2015 63.375 ********* 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 ***