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/raid1/www/Hosts/bankrupt/TCR_Public/130204.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, February 4, 2013, Vol. 17, No. 34 Headlines 1031 TAX: Silicon Valley Law Group's Summary Judgment Bid Denied ADEPT TECHNOLOGIES: Taps Travis Jackson for ADEA Lawsuit ADVANCED MICRO: Moody's Cuts CFR to 'B2', Outlook Negative AFA INVESTMENT: Wants Plan Filing Exclusivity Extended to May 28 AHERN RENTALS: Counsel Gordon Silver Changes Hourly Rates AMARU INC: Wilson Morgan Resigns as Accountants AMERICAN AIRLINES: U.S. Bank Has Objections to New Financing AMERICAN AIRLINES: Debtor, Fee Examiner Seek Protective Order AMERICAN DENTAL: S&P Affirms 'B' CCR; Revises Outlook to Negative AMERICAN MEDIA: Trump Executive Named to Board of Directors AMF BOWLING: Mesirow Okayed as Committee's Financial Advisors AMF BOWLING: Wants Sale Process Concluded Before Plan Drafting ARCAPITA BANK: Exclusive Plan Filing Period Extended to Feb. 8 ARCHDIOCESE OF MILWAUKEE: Sexual Abuse Claim Disallowed as Tardy ASPEN GROUP: Projects $18 Million Revenue in 2015 ATLANTIC COAST: ESOP Trust Discloses 5.3% Equity Stake ATLANTIC COAST: Regains Compliance with Nasdaq Market Value Rule ATP OIL: To Become One of Few E&Ps Not Paying Bank Debt in Full AURASOUND INC: Taps Brian Weiss as Chief Restructuring Officer AXION INTERNATIONAL: Samuel Rose Hikes Equity Stake to 40% AXION INTERNATIONAL: Issues $1.2 Million Convertible Notes AXION INTERNATIONAL: MLTM Lending Hikes Equity Stake to 31.8% BBF REALTY: Case Summary & 4 Largest Unsecured Creditors BDRC LOFTS: Judge Won't Move Case to Ft. Worth Bankruptcy Court BHFS I LLC: Full-Payment Plan Declared Effective BIONEUTRAL GROUP: Marcum LLP Raises Going Concern Doubt BIOZONE PHARMACEUTICALS: Files Amendment No. 6 to 8MM Prospectus BON-TON STORES: Morgan Stanley Hikes Equity Stake to 7.1% BON-TON STORES: Morgan Stanley Hikes Equity Stake to 7.1% C-SWDE348 LLC: Court Confirms Plan of Reorganization CANTOR COMMERCIAL: Moody's Assigns 'B1' Sr. Unsecured Debt Rating CANTOR COMMERCIAL: S&P Assigns B+ ICR; B Rating on $250MM Notes CAPITOL BANCORP: Still Needs Investor for Reorganization Plan CATALYST PAPER: Completes $13.5-Mil. Sale of Snowflake Mill CENTAUR ACQUISITION: Moody's Rates $185-Mil. Secured Notes 'Caa1' CENTRAL EUROPEAN: Annual General Meeting Set for March 26 CENTRAL FEDERAL: Therese Liutkus Quits as Treasurer & CFO CELL THERAPEUTICS: Estimates $8.6-Mil. Net Loss in December CHAMPION INDUSTRIES: Incurs $22.9-Mil. Net Loss in Fiscal 2012 CHINA GREEN: Albert Wong Replaces Madsen as Accountants CNL LIFESTYLE: Moody's Affirms 'Ba3' CFR, Outlook Stable COMMERCIAL VEHICLE: S&P Revises Outlook to Positive; Affirms B CCR COMMUNITY FINANCIAL: Cultivate Discloses 6.7% Equity Stake COMMUNITY TOWERS: Has OK to Hire ACM Capital as Financial Advisors COMSTOCK MINING: Provides Production Update, 2013 Outlook CONSTELLATION BRANDS: Antitrust Case No Impact on Moody's Ba1 CFR CORE ENTERTAINMENT: S&P Revises Outlook to Neg; Affirms 'B' Rating CORRECTIONS CORP: Fitch Affirms 'BB+' Issuer Default Rating CRYOPORT INC: Issues $588,000 Convertible Notes to Investors CRYSTALLEX INTERNATIONAL: Files Reports for 2011, Q1, Q2 & Q3 CUBIC ENERGY: To Appeal NYSE's Delisting Determination DEWEY & LEBOEUF: Wants Exclusivity Extended to March 31 DEWEY & LEBOEUF: Can Access Cash Collateral Until March 3 DRINKS AMERICAS: St George Investments Holds 9.9% Equity Stake DRINKS AMERICAS: De Joya Replaces Bernstein as Accountant DRINKS AMERICAS: Amends Oct. 31 Form 10-Q to Add Explanation DUNLAP OIL: Hiring Waterfall Economidis as Collections Counsel E-DEBIT GLOBAL: Restricted Stock Units Lock-Up Expires on Feb. 14 EASTBRIDGE INVESTMENT: Effects 1-for-100 Reverse Stock Split EASTMAN KODAK: Completes $527-Mil. Sale of Digital Imaging Patents EL CENTRO: Unsecureds to Recover 20.5% Under Amended Plan ENERGY FUTURE: Reports Final Results & Exchange Offers Settlement ENERGY FUTURE: S&P Raises Corporate Credit Rating to 'CCC' ENERGYSOLUTIONS INC: BlackRock Discloses 6.1% Equity Stake EMORY HACKMAN: Fountain Group et al. Hit With $2MM Judgment EPICEPT CORP: Has 106.9 Million Outstanding Common Shares EV AMERICA: Case Summary & 20 Largest Unsecured Creditors FAIRFAX COUNTY: S&P Lowers Rating on Series 1998A Bonds to 'B' FAIRPOINT COMMUNICATIONS: S&P Rates $725MM Loans, $300MM Notes 'B' FIROOZHE A. ZAFARI: Former Counsel Agrees to Cut Fee by $30K FIRST BALDWIN BANCSHARES: To File for Chapter 11 to Sell Bank FIRST DATA: Plans to Offer $785 Million of Senior Unsecured Notes FREESEAS INC: Fully Satisfies Obligations to Hanover FREESEAS INC: Issues Add'l 400,000 Settlement Shares to Hanover FREDERICK DARREN BERG: Sun Granite Summary Judgment Bid Denied FRONTIER COMMUNICATIONS: S&P Lowers Ratings on 2 Certs to 'BB-' GCA SERVICES: S&P Assigns B CCR, Rates $150MM 2nd Lien Notes CCC+ GENERAL AUTO: Further Fine-Tunes Plan Disclosures GLOBAL ARENA: To Buy 66.67% Member Interest in MGA From Goldin GREEN EARTH: Amends 55 Million Common Shares Prospectus GREEN ENERGY: William D'Angelo Resigns from Board HAWAII OUTDOOR: Amended List of 20 Largest Unsecured Creditors HAWAII OUTDOOR: Unsecured Creditors Committee Has 3 Members HAWAII OUTDOOR: Hearing on Further Use of Cash on Feb. 25 HAWKER BEECHCRAFT: Court Approves Joint Plan of Reorganization HOSTESS BRANDS: Assets Fetching Bids of $856.4 Million IMS HEALTH: S&P Assigns 'BB-' Rating on $1.7BB & EUR755MM Loans INDALEX LTD: Canadian Supreme Court Rules on Insolvency INDIANAPOLIS DOWNS: Court Confirms Sale-Based Plan INTERFACE SECURITY: Moody's Rates $230MM Second Lien Notes 'B3' INTERTAPE POLYMER: S&P Raises CCR to 'B+'; Outlook Stable JEFFERSON COUNTY, AL: Bondholders Begin Hearing to Take Over LEHMAN BROTHERS: Massachusetts Agency Wants to Pursue Action LEHMAN BROTHERS: Inks Settlement With Standard Chartered Bank LEHMAN BROTHERS: Has Deal to Cut Drawbridge Claim to $25.6-Mil. LIFEPOINT HOSPITALS: Fitch Assigns 'BB+' Rating to $225M Term Loan LIFEPOINT HOSPITALS: Moody's Gives 'Ba1' Rating to USD225MM Loan LIFEPOINT HOSPITALS: S&P Assigns 'BB-' Rating to $225MM Term Loan LODGENET INTERACTIVE: Loan Approved, Confirmation Set for March 7 METRO TOOL: Case Summary & 6 Unsecured Creditors MF GLOBAL: Accord Between SIPA Trustee & UK Unit Approved MODERN RADIATION: Case Summary & 8 Largest Unsecured Creditors MOIRBIA PEORIARE: Case Summary & 10 Largest Unsecured Creditors NCL CORPORATION: S&P Assigns 'BB-' Rating to Proposed $300MM Notes NEW CENTAUR: S&P Assigns Prelim. 'B' CCR; Rates $480MM Debt 'B' NII HOLDINGS: S&P Cuts CCR to B-, Cuts Unsec. Debt Rating to CCC+ NORTH TEXAS HOUSING: S&P Puts 1984 Mortgage Bonds on CreditWatch NORTHAMPTON GENERATING: Confirms Plan, EIF Retains Ownership ONESTOPPLUS GROUP: Debt Increase No Impact on Moody's 'B1' Rating OTELCO INC: Intends to File for "Pre-Packaged" Chapter 11 P&M SPOKANE: Wins Confirmation of First Amended Plan PACIFIC CARGO: Files in Oregon After Acquisition Goes Sour PAR PHARMACEUTICAL: S&P Assigns 'B+' Rating on $1.055-Bil. Loan PATRIOT COAL: Promotes Michael D. Day to EVP Operations PENSON WORLDWIDE: Settles Shareholders' Suit, Files Plan PEREGRINE FINANCIAL: Ex-CEO Wasendorf Gets 50 Years Jail Term PERMIAN HOLDINGS: S&P Assigns 'B-' CCR; Rates $175MM Notes 'B-' PILGRIM'S PRIDE: Moody's Affirms 'B2' CFR; Outlook Stable POWERWAVE TECHNOLOGIES: Lenders' Cash Sweep Prompts Bankruptcy PREMIER PAVING: Receives 1-Month Extension on Right to Use Cash PREMIER PAVING: Committee Hiring OnPointe as Financial Advisors PRESTIGE INVESTMENTS: Can Use Cash Collateral Thru July 31 RESIDENTIAL CAPITAL: Has Agreement With Ally Bank on Loan Deals RESIDENTIAL CAPITAL: Carlson Represents MDL Class Plaintiffs RESIDENTIAL CAPITAL: SBO Servicers' Stipulation Approved REVOLUTION DAIRY: Files Bankruptcy to Deal With Secured Lender RIO GRANDE STUDIOS: Dismissal of Member's Bankruptcy Upheld RLB FRIENDSHIP: Updated Case Summary & Creditors' Lists SABRE HOLDINGS: S&P Rates New $2.55BB Senior Secured Credit 'B' SACO DISTRIBUTING: Case Summary & 20 Largest Unsecured Creditors SANMINA CORP: S&P Affirms 'B+' CCR; Revises Outlook to Positive SCHOOL SPECIALTY: Section 341(a) Meeting Scheduled for March 4 SCIENTIFIC GAMES: S&P Puts 'BB' CCR on CreditWatch Negative SERVICEMASTER CO: Moody's Affirms 'B2' CFR; Outlook Negative SERVICEMASTER CO: S&P Assigns 'B+' Rating to $2.253BB Secured Loan SF & S PETROLEUM: Case Summary & 8 Largest Unsecured Creditors SILVERLINE ENERGY: Case Summary & 20 Largest Unsecured Creditors SK FOODS: Settlement In Principle Reached in Allied World Dispute SOUTHERN AIR: Sets March 14 Confirmation for New Plan STAMP FARMS: Auction Scheduled for Feb. 5 STEBNER REAL ESTATE: Feb. 19 Established as Claims Bar Date SUPERVALU INC.: Moody's Rates $850MM Senior Secured Loan 'B1' SYNIVERSE HOLDINGS: Loan Increase No Impact on Moody's 'B2' CFR VITRO SAB: Nears Settlement With Bondholders WAUPACA FOUNDRY: Moody's Affirms 'B2' Rating on $374MM Sr. Loan WEBCO VENDING: Case Summary & 20 Largest Unsecured Creditors WINDSOR QUALITY: S&P Revises Outlook to Stable; Affirms All Rating * China's Practices Harm American Solar Manufacturers, Says Group * U.S. Tomato Producers Want Old Antidumping Petition Withdrawn * CoreLogic Reports 767,000 Completed Foreclosures in 2012 * U.S. Banks' Heavy 1Q Debt Issuance Bolsters Liquidity * Bailment Defeats Preference Claim by Trustee * BOND PRICING -- For The Week From Jan. 28 to Feb. 1, 2013 ********* 1031 TAX: Silicon Valley Law Group's Summary Judgment Bid Denied ---------------------------------------------------------------- California Magistrate Judge Joseph C. Spero denied the motion for partial summary judgment filed by Silicon Valley Law Group, a defendant in a legal malpractice lawsuit styled as, GERALD A. McHALE, Jr., P.A., as Liquidation Trustee for 1031 Debtors Liquidation Trust, Plaintiff, v. SILICON VALLEY LAW GROUP, a California Law Corporation, Defendant, Case No. 3:10-cv-04864-JCS (N.D. Calif.). The Trustee asserts SVLG was negligent in conducting due diligence in connection with the sale of Advance to Edward Okun, who ultimately looted 1031 Advance of its assets. Before the Court is SVLG's Motion for Partial Summary Judgment as to the Measure of Damages which the Trustee may request at an upcoming trial. SVLG argues that the Trustee may not recover the amount of Exchange Funds which were stolen from 1031 Advance because the Exchange Funds represent a particularized injury to 1031 Advance's clients, and not an injury to 1031 Advance itself. The lawsuit arises in the aftermath of a Ponzi scheme Mr. Okun orchestrated. He has been convicted of stealing hundreds of millions of dollars from the 1031 Debtors -- the bankrupt estates formally under Mr. Okun's control -- and is currently serving a 100-year federal prison sentence for his crimes. Silicon Valley Law Group represented 1031 Advance prior to Okun's purchase of the company. 1031 Advance, like all the 1031 Debtors, was in the business of conducting section 1031 exchanges. Section 1031 of the Internal Revenue Code permits owners of investment property to defer the capital gains tax that would otherwise be due and owing upon sale, conditioned upon timely application of the sale proceeds to the purchase of an identified replacement investment property. In a typical section 1031 exchange, an exchanger sells a piece of real estate, has 45 days from the date of the sale to identify a replacement property, and has 180 days from that date of sale to close on the purchase of the replacement property. To preserve the tax benefit of avoiding capital gains taxes on the sale of the property, an exchanger may not take possession of the sale proceeds. Under the regulations that apply to Section 1031, the use of a qualified intermediary in connection with a 1031 Exchange is a "safe harbor" that will result in a determination that the taxpayer is not in actual or constructive receipt of money or other property for the purposes of Section 1031. A copy of the Court's Jan. 28, 2013 Order is available at http://is.gd/7RM4gdfrom Leagle.com. About 1031 Tax Group Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- was a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. 131 Tax Group had total assets of $164.23 million and total liabilities as of Sept. 30, 2007. The Company and 15 of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 07-11448) on May 14, 2007. Gerard A. McHale, Jr., was appointed Chapter 11 trustee. Jonathan L. Flaxer, Esq., and David J. Eisenman, Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP, represent the Chapter 11 trustee. Kurtzman Carson Consultants LLC acts as claims and notice agent. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. Former CEO Edward H. Okun is in federal prison at Northern Neck Regional Jail in Warsaw, Virginia, after being convicted of mail fraud and other charges. Mr. Okun allegedly engaged in several misappropriations of funds of 1031 Tax Group and other entities. The funds were used for Mr. Okun's lavish lifestyle including acquiring properties and luxury asset. ADEPT TECHNOLOGIES: Taps Travis Jackson for ADEA Lawsuit -------------------------------------------------------- The Bankruptcy Court authorized ADEPT Technologies, LLC, to employ Travis S. Jackson, Esq., at Lanier Ford Shaver & Payne, P.C., as special counsel. Mr. Jackson will represent the Debtor in the continued defense of a lawsuit filed against the Debtor on Aug. 21, 2011, under the Age Discrimination in Employment Act ("ADEA"), as amended 29 U.S.C. Section 621, et seq., in the United States District Court for the Northern District of Alabama, Northeastern Division, Tazewell Shepard, III, as Trustee for the Bankruptcy Estate of Bryant Harris v. KRB, LLC, and Adept Technologies, LLC; Case No. 5:11-cv- 03073-AKK. Prepetition Mr. Jackson represented the Debtor in connection with the defense of the Debtor from the ADEA claim. Upon inquiry, Mr. Jackson does not have any connection with the Debtor, his creditors, any other party-in-interest, or their respective attorneys in this case except for the foregoing representation. Mr. Jackson has incurred approximately $2,861 in prepetition attorney fees and expenses. The Debtor has agreed to pay Mr. Jackson $200 per hour as compensation for his services, plus reasonable and necessary legal expenses. ADEPT Technologies, LLC, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 12-83490) on Oct. 31, 2012, in Decatur, Alabama. The Debtor, which has principal assets located in Huntsville, Alabama, estimated assets of $10 million to $50 million and liabilities of up to $10 million. Judge Jack Caddell presides over the case. Kevin D. Heard, Esq., at Heard Ary, LLC, represents the Debtor as counsel. The petition was signed by Brad Fielder, managing member. ADVANCED MICRO: Moody's Cuts CFR to 'B2', Outlook Negative ---------------------------------------------------------- Moody's Investors Service lowered Advanced Micro Devices' corporate family rating to B2 from B1, and the ratings on the senior unsecured notes to B2 from B1. The speculative grade liquidity rating was lowered to SGL-3 from SGL-2. The outlook is negative. This completes the ratings review opened on October 19. The downgrade of the corporate family rating to B2 reflects AMD's prospects for weaker operating performance and liquidity profile over the next year as the company commences on a multi-quarter strategic reorientation of its business in the face of a challenging macro environment and a weak PC market. The "weak demand conditions in the personal computer space, particularly in the lower end segments where tablet devices continue to take wallet-share, are expected to persist throughout 2013", said Moody's Richard Lane. The negative outlook considers the execution challenges facing AMD during this turnaround and Moody's expectation that the company will consume cash over the next year. Ratings Rationale AMD is reorienting its business model to address markets beyond its core, legacy personal computer market (85% of AMD revenue) that include the faster growing dense server, embedded and semi- custom chips, and ultra low power end markets. AMD is targeting to grow the latter segments from roughly 15% of revenue presently to 40%-50% of its revenue over the next three years. An important aspect of AMD's plan to reach profitability includes achieving a quarterly operational cost structure of around USD450 million by the third quarter. Based on actions expected to be taken through the first quarter, including the reduction of 14% of its employee base, and USD506 million of operational expenses in the December 2012 quarter, Moody's expects this cost base is achievable. However, with more than seasonally lower sequential revenue declines in the first quarter (projected down 9%) and flat second quarter revenue Moody's projects operating losses in the first half of 2013. Moody's projects AMD's operating performance will approximate break even by the third quarter on about USD1.1 billion of quarterly revenue and 39% gross margins. As a result of this outlook, credit metrics will be weak, with adjusted debt to EBITDA over 10x over the next year, up from 6.8 times at December 2012. AMD had nearly USD1.2 billion of cash and marketable securities as of fiscal year end December 2012. AMD does not maintain a committed revolving credit facility. Liquidity is adequate, however, Moody's expects AMD will consume USD250 million to USD300 million of cash over the next year. This view is driven by Moody's projection of operational losses, cash payments of USD175 million to AMD's foundry partner, GlobalFoundries, in the first quarter related to a renegotiated wafer supply agreement, and approximately USD31 million in cash outflows related to restructuring activities (headcount reduction). Cash balances could be buttressed by a USD150 million to USD200 million sale leaseback transaction of it Austin, Texas facilities, which management anticipates could close in the first quarter. As a result, Moody's expects AMD's 2013 year- end cash balances to approximate USD850 million, or over USD1 billion including the potential sale leaseback. Management's minimum target cash balance is USD700 million. As part of the WSA, AMD also needs to make a USD200 million payment to GlobalFoundries at December 31, 2013, which falls in AMD's fiscal year 2014. AMD's next debt maturity is a USD580 million note (unrated) due May 2015. Ratings downgraded: Corporate family rating to B2 from B1 Probability of default rating to B2-PD from B1-PD USD500 million senior unsecured notes due 2017 to B2 (LGD4-54%) from B1 (LGD4-54%) USD500 million senior unsecured notes due 2020 to B2 (LGD4-54%) from B1 (LGD4-54%) USD500 million senior unsecured notes due 2022 to B2 (LGD4-54%) from B1 (LGD4-54%) Speculative grade liquidity rating to SGL-3 from SGL-2 What Could Change the Rating - DOWN The rating could be lowered if AMD's cash and liquid investments are likely to drop below USD700 million or if the company is unlikely to achieve approximately breakeven operating profit by the third quarter. What Could Change the Rating - UP The rating is not likely to be raised over the near term. The outlook could be move to stable if AMD achieves and is likely to sustain operating profitability while maintaining cash and liquid investments in excess of USD1 billion and achieving adjusted debt to EBITDA below 6 times. The principal methodology used in rating Advanced Micro Devices was the Global Semiconductor Industry Methodology published in December 2012. AFA INVESTMENT: Wants Plan Filing Exclusivity Extended to May 28 ---------------------------------------------------------------- The U.S. Bankruptcy Court District of Delaware will convene a hearing on Feb. 21, 2013, at 10:30 a.m., to consider AFA Investment Inc., et al.'s motion for an extension of the Debtors' exclusive plan proposal and solicitation periods. Objections, if any, are due Feb. 8, at 4 p.m. The Debtors, in their motion for a third extension, ask the Court to extend until May 28, 2013, their exclusive period to propose a Chapter 11 plan and until July 29, 2013, their exclusive period to solicit acceptances of that plan. As reported in the Troubled Company Reporter on Jan. 30, 2013, the company said that a "global settlement agreement" among the official creditors committee, former employees, second-lien lenders and other key players in the bankruptcy reorganization may provide a framework" for a Chapter 11 plan. In October the bankruptcy court refused to approve a settlement that would have given releases to Yucaipa Cos., the owner and junior lender. AFA said in a previous court filing that it was near a new settlement to "afford an enhanced return to its administrative and priority creditors." The workers say they have more than $4 million in claims against AFA and Yucaipa for violation of so-called WARN laws as a result of being fired without required notice. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. was one of the largest processors of ground beef products in the United States. The Company had five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA had seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings (BLBT) affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. AFA Foods, Inc., disclosed $615,859,574 in assets and $544,499,689 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. The Committee has obtained approval to hire McDonald Hopkins LLC as lead counsel and Potter Anderson & Corroon LLP serves as co-counsel. The Committee also obtained approval to retain J.H. Cohn LLP as its financial advisor, nunc pro tunc to April 13, 2012. AFA, in its Chapter 11 case, sold plants and paid off the first- lien lenders and the loan financing the Chapter 11 effort. Remaining assets are $14 million cash and the right to file lawsuits. General Electric Capital Corp. and Bank of America Corp. provided about $60 million in DIP financing. The loan was paid off in July. In October 2012, the Bankruptcy Court denied a settlement that would have released Yucaipa Cos., the owner and junior lender to AFA Foods, from claims and lawsuits the creditors might otherwise bring, in exchange for cash to pay unsecured creditors' claims under a liquidating Chapter 11 plan. Under the deal, Yucaipa would receive $11.2 million from the $14 million, with the remainder earmarked for unsecured creditors. Asset recoveries above $14 million would be split with Yucaipa receiving 90% and creditors 10%. Proceeds from lawsuits would be divided roughly 50-50. AHERN RENTALS: Counsel Gordon Silver Changes Hourly Rates --------------------------------------------------------- Gordon Silver, counsel for Ahern Rentals, Inc., notifies the U.S. Bankruptcy Court for the District of Nevada of the changes in its hourly rates effective Feb. 1, 2013. The new rates for the professionals at GS that are most likely to perform services in the Debtor's case are: Attorney 2012 Hourly Rate 2013 Hourly Rate -------- ---------------- ---------------- Gerald M. Gordon $725 $740 William M. Noall $625 $625* Thomas H. Fell $560 $585 Gabrielle A. Hamm $360 $360* Erik T. Gierdingen $205 $230 Kirk D. Homeyer $190 $200 Senior Paralegal $185 $185* Junior Paralegal $135 $135* * The hourly rates for individuals noted with an asterisk have not changed. Their 2013 hourly rates are the same as their 2012 rates. About Ahern Rentals Founded in 1953 with one location in Las Vegas, Nevada, Ahern Rentals Inc. -- http://www.ahern.com/-- now offers rental equipment to customers through its 74 locations in Arizona, Arkansas, California, Colorado, Georgia, Kansas, Maryland, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Washington. Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. In its schedules, the Debtor disclosed $485.8 million in assets and $649.9 million in liabilities. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. The Official Committee of Unsecured Creditors has tapped Covington & Burling LLP as counsel, Downey Brand LLP as local counsel, and FTI Consulting as financial advisor. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Attorneys for the Majority Term Lenders are Paul Aronzon, Esq., and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. The Debtor's Plan lists $379.2 million in debt held by major lenders plus much smaller amounts held by others. According to The Review-Journal's report, Judge Beesley said he does not think Ahern's plan offers full repayment -- known as present value -- so the owners cannot hang on to their entire positions under bankruptcy law. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. AMARU INC: Wilson Morgan Resigns as Accountants ----------------------------------------------- Amaru, Inc., received a notice from its independent registered public accounting firm, Wilson Morgan, LLP, that they had resigned due to the fact that they do not have any other audit partner to service the Company's account, effective as of Jan. 25, 2013. The Company's Board of Directors accepted that resignation on Jan. 28, 2013. Wilson Morgan's audit reports on the financial statements of the Company for the years ended Dec. 31, 2011, and 2010 did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, other than an explanatory paragraph regarding the Company's ability to continue as a going concern. The resignation was not due to any disagreement with the Company. The Company has not retained yet a new independent registered public accounting firm. About Amaru Inc. Singapore-based Amaru, Inc., a Nevada corporation, is in the business of broadband entertainment-on-demand, streaming via computers, television sets, PDAs (Personal Digital Assistant) and the provision of broadband services. The Company's business includes channel and program sponsorship (advertising and branding); online subscriptions, channel/portal development (digital programming services); content aggregation and syndication, broadband consulting services, broadband hosting and streaming services and E-commerce. After auditing the 2011 results, Wilson Morgan, LLP, in Irvine, California, noted that the Company has sustained accumulated losses from operations totalling $40.7 million at Dec. 31, 2011. This condition and the Company's lack of significant revenue, raise substantial doubt about the Company's ability to continue as going concern, the auditors said. Amaru reported a net loss from operations of $1.37 million in 2011, compared with a net loss from operations of $1.50 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $3.28 million in total assets, $3.08 million in total liabilities and $195,261 in total stockholders' equity. AMERICAN AIRLINES: U.S. Bank Has Objections to New Financing ------------------------------------------------------------ U.S. Bank Trust National Association filed separate objections to the proposed order approving AMR Corporation's request to obtain postpetition financing and to pay off $1.32 billion in loans secured by aircraft without paying a so-called make-whole premium. A make-whole is designed to compensate a lender for loss of an investment bearing interest higher than the current market. U.S. Bank filed the objections solely as Loan Trustee and Pass- Through Trustee under those certain Indenture and Security Agreements with respect to the AMR 2009-1 EETC transaction and AMR 2011-2 EETC transaction, and solely as Trustee and Security Agent under the Indenture and Aircraft Security Agreement with American Airlines, Inc. Craig M. Price, Esq., at Chapman and Cutler LLP, in Chicago, Illinois, U.S. Bank's counsel, tells the Court that by its objection, it solely seeks to ensure that its rights to appeal the Court's January 17, 2013 opinion issued in connection with the request remain fully appealable, and to make sure its claim for a Make-Whole is adequately protected in the event that it prevails on appeal. Mr. Price contends the Proposed Order should be changed because it curtails the scope of the Secured Obligations under the Indentures. He argues that U.S. Bank's and Certificateholders' entitlement to the make-whole premium ought to be protected pending appeal. A waiver of any stay is inappropriate to the extent that it adversely impacts the Trustee's appellate rights, Mr. Price further contends. He adds that a waiver or bar of any rights or claims of the Trustee and Certificateholders is inappropriate to the extent it adversely affects appellate rights. U.S. Bank continues to believe that the Debtors have an obligation under Section 1110 of the Bankruptcy Code to perform all of their obligations under the terms of the aircraft financing documents. AMR Responds AMR asked U.S. Bankruptcy Judge Sean Lane to overrule the bank's objection, saying its request that the company protect the bank's interests pending a potential appeal is unfounded. AMR lawyer, Michael Wiles, Esq., at Weil Gotshal & Manges LLP, in New York, said that in the absence of a stay pending appeal, the company is entitled to close the financing in accordance with its terms and to terminate U.S. Bank's interests. "If U.S. Bank wishes to protect itself pending an appeal, then U.S. Bank must seek a stay of this court's order pending appeal," he said in a court filing. Mr. Wiles also said that the bank should post a bond to protect AMR from the damages it may sustain as a result of the injunction. Judge Lane authorized AMR on January 17 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. 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, which is derived from Section 1110 of the Bankruptcy Code, 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. In a January opinion, Judge Lane rejected the idea that the 1110 election obliged AMR to pay the make-whole, citing 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. 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: Debtor, Fee Examiner Seek Protective Order ------------------------------------------------------------- AMR Corp. asked the U.S. Bankruptcy Court for the Southern District of New York to issue an order that will allow the company to turn over confidential information without waiving the attorney-client privilege. The move comes after Robert Keach, the lawyer appointed to review the fees of AMR's Chapter 11 professionals, asked for information regarding fee applications filed by AMR attorneys that is protected from public disclosure. The attorneys represent the company in two separate lawsuits it brought against Sabre, Travelport and Orbitz Worldwide LLC in federal courts in Texas. AMR settled its dispute with Sabre, which was approved by the bankruptcy court last month, while it continues to pursue its claims against Travelport and Orbitz. "Entry of the proposed order will protect against any alleged waiver of the debtors' privileges or protections under applicable law," Alfredo Perez, Esq., at Weil Gotshal & Manges LLP, in New York, said in a motion he jointly filed with the fee examiner. A court hearing is scheduled for February 14. Objections are due by February 7. 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 DENTAL: S&P Affirms 'B' CCR; Revises Outlook to Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Wakefield, Mass.-based dental practice management services provider American Dental Partners Inc. and revised the rating outlook to negative from stable. At the same time, S&P affirmed its 'B' credit rating on ADP's first-lien secured debt. S&P's recovery rating on this debt remains unchanged at '3', indicating S&P's expectation for meaningful (50% to 70%) recovery of principal in the event of a payment default. The rating on American Dental Partners Inc. (ADP) continues to reflect the company's "vulnerable" business risk profile, characterized by its narrow scope of operations in intensely competitive markets with low barriers to entry. S&P also believes it will be challenging for ADP to achieve significant growth in its business model. S&P expects ADP to generate modest discretionary cash flow in 2013 and its lease-adjusted debt leverage to remain near 6x for the next two years, consistent with a "highly leveraged" financial risk profile. S&P's base-case expectation is for ADP to maintain more than 15% headroom under the debt leverage covenant in its loan agreement. "We expect ADP to post low-single-digit annual revenue growth, propelled by new offices, and to a lesser extent acquisitions. Several small affiliates acquired at the end of 2012 will support growth in 2013. We believe its affiliates' same-store patient revenues will continue sliding, notwithstanding a gradually improving economy that bolsters prospects for the total U.S. dental services industry. For the 12 months ended Sept. 30, 2012, ADP's revenues fell 1.9% despite the opening of new offices. We believe ADP may have lost some market share in recent years. After more than 100 acquisitions since ADP was founded in 1995, we believe management is emphasizing growth through the opening of new dental care offices, although we expect it to remain acquisitive," S&P said "Our negative rating outlook on ADP reflects the potential for negative cash flow in 2013 and for a slim covenant cushion. We could lower our ratings if liquidity deteriorates, as evidenced by a projected covenant cushion of less than 10% or significantly reduced revolver availability. This could result from further EBITDA margin compression, more aggressive expansion, a costly legal settlement, or other developments. We estimate the covenant cushion could fall to 10% if bank-calculated EBITDA for the 12 months ended March 31, 2013, is about $400,000 lower than bank- calculated EBITDA for the 12 months ended Sept. 31, 2012," S&P added. S&P could revise the outlook to stable if it gains confidence that a covenant cushion in excess of 15% can be maintained and ADP will generate discretionary cash flow. AMERICAN MEDIA: Trump Executive Named to Board of Directors ----------------------------------------------------------- David J. Pecker, Chairman, President and CEO of American Media, Inc., announced the appointment of David R. Hughes to the Board of Directors, effective as of Jan. 28, 2013. Mr. Hughes currently serves as Corporate Executive Vice President, Chief Financial Officer and Corporate Secretary of Trump Entertainment Resorts, Inc., which he joined in November 2010. Mr. Hughes was previously employed by MTR Gaming Group, Inc., where he was Corporate Executive Vice President and Chief Financial Officer from May 2008 through November 2010 and held positions of increasing responsibility, including Corporate Executive Vice President Strategic Operations and Chief Operating Officer, from 2003 to 2008. "We are honored to have David Hughes join our Board of Directors," said Mr. Pecker. "David is a fantastic addition to the Board of Directors based on his more than twenty-six years of operational and financial experience." Mr. Hughes was designated to serve on the Board of Directors by the "Avenue Stockholders" (as defined in the Stockholders' Agreement, dated as of Dec. 22, 2010, as a Significant Committee Holder Designated Director, pursuant to the terms of the Stockholders' Agreement. Mr. Hughes has not been appointed to any committees of the Board of Directors. About American Media Based in New York, American Media, Inc., publishes celebrity journalism and health and fitness magazines in the U.S. These include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. In addition to print properties, AMI manages 14 different Web sites. The company also owns Distribution Services, Inc., the country's #1 in-store magazine merchandising company. American Media, Inc., and 15 units, including American Media Operations, Inc., filed for Chapter 11 protection in Manhattan (Bankr. S.D.N.Y. Case No. 10-16140) on Nov. 17, 2010, with a prepackaged plan. The Debtors emerged from Chapter 11 reorganization in December 2010, handing ownership to former bondholders. The new owners include hedge funds Avenue Capital Group and Angelo Gordon & Co. The Company's balance sheet at Sept. 30, 2012, showed $632.80 million in total assets, $654.44 million in total liabilities, $3.78 million in redeemable noncontrolling interest, and a $25.41 million total stockholders' deficit. * * * As reported by the TCR on Jan. 22, 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Boca Raton, Fla.- based American Media Inc. to 'CCC+ ' from 'B-'. "The downgrade conveys our expectation that continued declines in circulation and advertising revenues will outweigh the company's cost reductions, resulting in deteriorating operating performance, rising debt leverage, and thinning discretionary cash flow," said Standard & Poor's credit analyst Hal Diamond. AMF BOWLING: Mesirow Okayed as Committee's Financial Advisors ------------------------------------------------------------- The Hon. Kevin R. Huennekins of the U.S. Bankruptcy Court for the Eastern District of Virginia authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of AMF Bowling Worldwide Inc., et al., to retain Mesirow Financial Consulting, LLC as its financial advisors. Mesirow is expected to, among other things: -- assist in the review of reports as required by the Bankruptcy Court of the Office of the U.S. Trustee, including, but not limited to, schedules of assets and liabilities, statements of financial affairs, and monthly operating reports; -- review the Debtors' financial information, including, but not limited to, analyses of cash receipts and disbursements, financial statement items and proposed transactions for which Bankruptcy Court approval is sought; and -- review and analyze reporting regarding cash collateral and any debtor-in-possession financing arrangements and budgets. The hourly rates of Mesirow's personnel effective Jan. 1, 2013, are: Senior Managing Director, Managing Director and Director $895 - $950 Senior Vice President $725 - $795 Vice President $625 - $695 Senior Associate $495 - $595 Associate $295 - $445 Paraprofessional $160 - $250 Fees for services rendered from Nov. 26, 2012, until Dec. 31, 2012, will be billed rates in effect at the time the services are rendered. The rates in effect for the period were: Senior Managing Director, Managing Director and Director $855 - $895 Senior Vice President $695 - $755 Vice President $595 - $655 Senior Associate $495 - $555 Associate $315 - $425 Paraprofessional $160 - $250 To the best of the Committee's knowledge, Mesirow is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About AMF Bowling Worldwide AMF Bowling Worldwide Inc. is the largest operator of bowling centers in the world. The Company and several affiliates sought Chapter 11 protection (Bankr. E.D. Va. Case Nos. 12-36493 to 12-36508) on Nov. 12 and 13, 2012, after reaching an agreement with a majority of its secured first lien lenders and the landlord of a majority of its bowling centers to restructure through a first lien lender-led debt-for-equity conversion, subject to higher and better offers through a marketing process. At the time of the bankruptcy filing, AMF operated 262 bowling centers across the United States and, through its non-Debtor facilities, and 8 bowling centers in Mexico -- more than three times the number of bowling centers of its closest competitor. Debt for borrowed money totals $296 million, including $216 million on a first-lien term loan and revolving credit, and $80 million on a second-lien term loan. Mechanicsville, Virginia-based AMF first filed for bankruptcy reorganization in July 2001 and emerged with a confirmed Chapter 11 plan in February 2002 by giving unsecured creditors 7.5% of the new stock. The bank lenders, owed $625 million, received a combination of cash, 92.5% of the stock, and $150 million in new debt. At the time, AMF had over 500 bowling centers. Judge Kevin R. Huennekens oversees the 2012 case, taking over from Judge Douglas O. Tice, Jr. Patrick J. Nash, Jr., Esq., Jeffrey D. Pawlitz, Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP; and Dion W. Hayes, Esq., John H. Maddock III, Esq., and Sarah B. Boehm, Esq., at McGuirewoods LLP, serve as the Debtors' counsel. Moelis & Company LLC serves as the Debtors' investment banker and financial advisor. McKinsey Recovery & Transformation Services U.S., LLC, serves as the Debtors' restructuring advisor. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. Kristopher M. Hansen, Esq., Sayan Bhattacharyya, Esq., and Marianne S. Mortimer, Esq., at Stroock & Stroock & Lavan LLP; and Peter J. Barrett, Esq., and Michael A. Condyles, Esq., at Kutak Rock LLP, represent the first lien lenders. An ad hoc group of second lien lenders are represented by Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner & Beran, PLC; and Ben H. Logan, Esq., Suzzanne S. Uhland, Esq., and Jennifer M. Taylor, Esq., at O'Melveny & Myers LLP. The petitions were signed by Stephen D. Satterwhite, chief financial officer/chief operating officer. The Committee tapped to retain Pachulski Stang Ziehl & Jones LLP as its lead counsel; Christian & Barton, LLP as its local counsel; and Mesirow Financial Consulting, LLC as its financial advisors. AMF BOWLING: Wants Sale Process Concluded Before Plan Drafting -------------------------------------------------------------- AMF Bowling Worldwide Inc., et al., ask the U.S. Bankruptcy Court for the Eastern District of Virginia to extend their exclusive periods to propose a plan and solicit acceptances of that plan until June 10, 2013, and Aug. 9, 2013, respectively. The current exclusivity periods are set to expire on March 12, and May 11, respectively, absent further order of the Court. The Debtors relate that initially, they intended to commence a plan process that ran parallel to the ongoing sale process. Based on further discussions with their major constituencies, however, the Debtors have determined that it is most efficient to let the sale process run its course before initiating the plan process. By waiting for the conclusion of the sale process, parties entitled to vote to accept or reject the plan of reorganization in the Chapter 11 cases will have the benefit of a clear understanding of the treatment of their claim under the Debtors' proposed chapter 11 plan. About AMF Bowling Worldwide AMF Bowling Worldwide Inc. is the largest operator of bowling centers in the world. The Company and several affiliates sought Chapter 11 protection (Bankr. E.D. Va. Case Nos. 12-36493 to 12-36508) on Nov. 12 and 13, 2012, after reaching an agreement with a majority of its secured first lien lenders and the landlord of a majority of its bowling centers to restructure through a first lien lender-led debt-for-equity conversion, subject to higher and better offers through a marketing process. At the time of the bankruptcy filing, AMF operated 262 bowling centers across the United States and, through its non-Debtor facilities, and 8 bowling centers in Mexico -- more than three times the number of bowling centers of its closest competitor. Debt for borrowed money totals $296 million, including $216 million on a first-lien term loan and revolving credit, and $80 million on a second-lien term loan. Mechanicsville, Virginia-based AMF first filed for bankruptcy reorganization in July 2001 and emerged with a confirmed Chapter 11 plan in February 2002 by giving unsecured creditors 7.5% of the new stock. The bank lenders, owed $625 million, received a combination of cash, 92.5% of the stock, and $150 million in new debt. At the time, AMF had over 500 bowling centers. Judge Kevin R. Huennekens oversees the 2012 case, taking over from Judge Douglas O. Tice, Jr. Patrick J. Nash, Jr., Esq., Jeffrey D. Pawlitz, Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP; and Dion W. Hayes, Esq., John H. Maddock III, Esq., and Sarah B. Boehm, Esq., at McGuirewoods LLP, serve as the Debtors' counsel. Moelis & Company LLC serves as the Debtors' investment banker and financial advisor. McKinsey Recovery & Transformation Services U.S., LLC, serves as the Debtors' restructuring advisor. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. Kristopher M. Hansen, Esq., Sayan Bhattacharyya, Esq., and Marianne S. Mortimer, Esq., at Stroock & Stroock & Lavan LLP; and Peter J. Barrett, Esq., and Michael A. Condyles, Esq., at Kutak Rock LLP, represent the first lien lenders. An ad hoc group of second lien lenders are represented by Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner & Beran, PLC; and Ben H. Logan, Esq., Suzzanne S. Uhland, Esq., and Jennifer M. Taylor, Esq., at O'Melveny & Myers LLP. The petitions were signed by Stephen D. Satterwhite, chief financial officer/chief operating officer. The Committee tapped to retain Pachulski Stang Ziehl & Jones LLP as its lead counsel; Christian & Barton, LLP as its local counsel; and Mesirow Financial Consulting, LLC as its financial advisors. ARCAPITA BANK: Exclusive Plan Filing Period Extended to Feb. 8 -------------------------------------------------------------- The Bankruptcy Court has further extended Arcapita Bank B.S.C.(c) and its debtor subsidiaries and affiliates' exclusive filing and exclusive solicitation periods through Feb. 8, 2013, and April 8, 2013, respectively. The Debtors told the Court that the requested extensions will allow the Official Committee of Unsecured Creditors more time to provide them with additional inputs regarding various inter-creditor issues. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., later filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group has roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. ARCHDIOCESE OF MILWAUKEE: Sexual Abuse Claim Disallowed as Tardy ---------------------------------------------------------------- Bankruptcy Judge Susan V. Kelley sustained the objection filed by the Archdiocese of Milwaukee to Proof of Claim number 89 filed by Roy Ebert for alleged sexual abuse. Judge Kelley sided with the Debtor, which sought summary judgment, arguing that the Claim should be disallowed as time-barred under Wisconsin's statute of limitations. Mr. Ebert filed his claim on Sept. 15, 2011. He alleged that Father George Nuedling sexually assaulted him in 1963 when the Claimant was an altar boy and fourth grade student at St. Lawrence Catholic School in Milwaukee. In support of its summary judgment motion, the Debtor filed an affidavit of Attorney Francis LoCoco and appended copies of correspondence from the Claimant and his attorney to the Debtor. The Claimant sent an e-mail on April 28, 2002, in which he stated that it was "well known among the boys, even in the church rectory, not to stand with your back to this priest. . . ." The e-mail describes Nuedling's violent attack on the Claimant in the school restroom and asks: "I just wonder how many other little boys this evil man harmed?" Barbara Reinke, director of the Debtor's Project Benjamin, responded to the Claimant's e-mail and confirmed that Nuedling was known to the Debtor as an offender, and was confronted before his death. On Jan. 17, 2003, Mr. Ebert's attorney, Daniel Stevens, wrote a letter to Barbara Reinke. The letter states that it is well-known that Nuedling assaulted children since the 1960s for over 30 years. The letter accuses the Debtor of responding to the reports of abuse by reassigning Nuedling to another parish, "exposing innocent victims to a monster." The letter concludes: "I would appreciate a response from you within 10 days from the date of this letter, or I will advise Mr. Ebert to pursue other avenues." On Feb. 5, 2003, the Debtor's attorney, Matthew Flynn, responded: "The Archdiocese appreciates your reporting the matters set out in your letter. However you seem to imply that the Archdiocese knew in the 1960s that Fr. Nuedling was engaged in this kind of conduct. In fact, the Archdiocese did not have knowledge of these kinds of allegations against Fr. Nuedling at that time." The response also invited Attorney Stevens to contact Attorney Flynn "about what you are requesting for Mr. Ebert," and asserted that "any litigation claims that you may be implying would be barred by the statute of limitations." Attorney Flynn cited two Wisconsin Supreme Court decisions as authority for his statement about the statute of limitations. The Debtor urges disallowance of the Claim under 11 U.S.C. Sec. 502(b)(1) because the Claim is "unenforceable against the debtor . . . under any agreement or applicable law." The applicable law is Wisconsin's six-year statute of limitations for fraud. The Claimant responds that equitable estoppel bars the Debtor from raising the statute of limitations. According to Judge Kelley, "The Court feels a deep sympathy for the abuse suffered by the Claimant and the adverse consequences he has endured through no fault of his own. But, under Wisconsin law, the Court must enforce the statute of limitations if the Claimant had enough information brought home to him about the Debtor's fraud that would lead a reasonable person to investigate. "Here, the Claimant's suspicions about the Debtor's conduct in covering up and transferring Nuedling led the Claimant's attorney to demand immediate answers from the Debtor or he would 'explore other avenues.' Unlike other claimants in this case who filed affidavits stating that they did not know about the Debtor's alleged fraud until recently, the record shows that the Claimant suspected in 2003 at the latest that the Debtor covered up Nuedling's atrocious activities. Under these circumstances, the six-year statute of limitations for the Claimant's fraud claim expired prior to the Debtor's bankruptcy petition." A copy of Judge Kelley's Jan. 31, 2013 Memorandum Decision is available at http://is.gd/wevgFBfrom Leagle.com. 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. Wis. 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) ASPEN GROUP: Projects $18 Million Revenue in 2015 ------------------------------------------------- Michael Mathews, the chief executive officer and Chairman of Aspen Group, Inc., gave a presentation at the Company's 2013 Annual Shareholders Meeting held on Jan. 31, 2013. The Company discussed about Aspen University's competitive advantages which include, among other things, exceptional adjunct faculty, high course completion rates and high student satisfaction rates. Aspen projects that total revenues for 2015 will be $18 million from $7.5 million of total revenues in 2013. The Company also expects that total student body for 2015 will reach 7,000 from 3,500 in 2013. The Company has 56.3 million of outstanding shares, 10.3 million of outstanding warrants and 6.9 million of outstanding options. The PowerPoint presentation which was displayed at the Meeting is available for free at http://is.gd/CgIkRc About Aspen Group Denver, Colo.-based Aspen Group, Inc., was founded in Colorado in 1987 as the International School of Information Management. On Sept. 30, 2004, it was acquired by Higher Education Management Group, Inc., and changed its name to Aspen University Inc. On May 13, 2011, the Company formed in Colorado a subsidiary, Aspen University Marketing, LLC, which is currently inactive. On March 13, 2012, the Company was recapitalized in a reverse merger. Aspen's mission is to become an institution of choice for adult learners by offering cost-effective, comprehensive, and relevant online education. Approximately 88% of the Company's degree- seeking students (as of June 30, 2012) were enrolled in graduate degree programs (Master or Doctorate degree program). Since 1993, the Company has been nationally accredited by the Distance Education and Training Council, a national accrediting agency recognized by the U.S. Department of Education. The Company's balance sheet at Sept. 30, 2012, showed $5.34 million in total assets, $4.57 million in total liabilities and $763,228 in total stockholders' equity. "The Company had a net loss allocable to common stockholders of $5,213,755 and negative cash flows from operations of $2,288,416 for the nine months ended September 30, 2012. The Company's ability to continue as a going concern is contingent on securing additional debt or equity financing from outside investors. These matters raise substantial doubt about the Company's ability to continue as a going concern," the Company said in its quarterly report for the period ended Sept. 30, 2012. ATLANTIC COAST: ESOP Trust Discloses 5.3% Equity Stake ------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, The Atlantic Coast Financial Corporation Employee Stock Ownership Plan Trust disclosed that, as of Dec. 31, 2012, it beneficially owns 138,757 shares of common stock of Atlantic Coast Financial Corporation representing 5.3% of 2,629,061 shares of common stock outstanding as of Dec. 31, 2012. A copy of the filing is available at http://is.gd/psjC0p About Atlantic Coast Jacksonville, Florida-based Atlantic Coast Financial Corporation is the holding company for Atlantic Coast Bank, a federally chartered and insured stock savings bank. It is a community- oriented financial institution serving northeastern Florida and southeastern Georgia markets through 12 locations, with a focus on the Jacksonville metropolitan area. The Company's balance sheet at Sept. 30, 2012, showed $784.8 million in total assets, $741.7 million in total liabilities, and stockholders' equity of $43.1 million. Consent Order With OCC On Aug. 10, 2012, the Company's Board of Directors of the Bank agreed to a Consent order (the Agreement) with its primary regulator, the OCC. Among other things the Agreement provides that by Dec. 31, 2012, the Bank must achieve and maintain total risk based capital of 13.00% of risk weighted assets and Tier 1 capital of 9.00% of adjusted total assets. As a result of entering into the Agreement to achieve and maintain specific capital levels, the Bank's capital classification under the Prompt Corrective Action (PCA) rules has been lowered to adequately capitalized, notwithstanding actual capital levels that otherwise would be deemed well capitalized under such rules. The Bank has satisfied all requirements under the Agreement to date. The Bank applied for and received OCC approval for an extension to Dec. 8, 2012, to file its Strategic Plan and Capital Plan. ATLANTIC COAST: Regains Compliance with Nasdaq Market Value Rule ---------------------------------------------------------------- The Nasdaq Stock Market issued a letter to Atlantic Coast Financial Corporation on Jan. 24, 2013, informing the Company that it has regained compliance with the Nasdaq Global Market requirement (Rule 5450(b)(1)(C)) that listed securities maintain a minimum Market Value of Publicly Held Shares of $5 million. The Company regained compliance as its Market Value of Publicly Held Shares was $5 million or greater for a minimum of ten consecutive business days. About Atlantic Coast Jacksonville, Florida-based Atlantic Coast Financial Corporation is the holding company for Atlantic Coast Bank, a federally chartered and insured stock savings bank. It is a community- oriented financial institution serving northeastern Florida and southeastern Georgia markets through 12 locations, with a focus on the Jacksonville metropolitan area. The Company's balance sheet at Sept. 30, 2012, showed $784.8 million in total assets, $741.7 million in total liabilities, and stockholders' equity of $43.1 million. Consent Order With OCC On Aug. 10, 2012, the Company's Board of Directors of the Bank agreed to a Consent order (the Agreement) with its primary regulator, Comptroller of the Currency of the United States of America. Among other things the Agreement provides that by Dec. 31, 2012, the Bank must achieve and maintain total risk based capital of 13.00% of risk weighted assets and Tier 1 capital of 9.00% of adjusted total assets. As a result of entering into the Agreement to achieve and maintain specific capital levels, the Bank's capital classification under the Prompt Corrective Action (PCA) rules has been lowered to adequately capitalized, notwithstanding actual capital levels that otherwise would be deemed well capitalized under such rules. The Bank has satisfied all requirements under the Agreement to date. The Bank applied for and received OCC approval for an extension to Dec. 8, 2012, to file its Strategic Plan and Capital Plan. ATP OIL: To Become One of Few E&Ps Not Paying Bank Debt in Full --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that oil and gas exploration and production companies almost always pay their senior secured debt in full. Indeed, Moody's Investors Service could find only one instance in 32 defaults during the past 25 years where E&P bank debt didn't pay off in full. Mr. Rochelle notes that ATP Oil & Gas Corp. is on the way to becoming the second E&P whose senior secured creditors don't come out whole. In fact, it looks as though the loan financing the Chapter 11 reorganization begun in August won't even be paid in full. The report notes that buyers currently are offering to purchase pieces of the DIP loan for 81 cents on the dollar. Markit Group Ltd. says the ATP DIP loan is the lowest-priced among the 30 DIP loans it tracks. A DIP loan is a debtor-in-possession loan used to finance a Chapter 11 reorganization. ATP received approval in September for $250 million in new borrowing power as part of a financing that converts about $365 million in pre-bankruptcy secured debt into a post-bankruptcy obligation. New financing is being provided by some of the same lenders owed $365 million on a first-lien loan where Credit Suisse Group AG serves as agent. Bank of New York Mellon Trust Co. is agent for the second-lien notes. The new loan comes in ahead of the existing second-lien debt. ATP's $1.5 billion in 11.875% second-lien notes last traded for 7 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The notes have fallen 40% in price since Dec. 13. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. AURASOUND INC: Taps Brian Weiss as Chief Restructuring Officer -------------------------------------------------------------- The Board of Directors of AuraSound, Inc., appointed Brian S. Weiss of BSW & Associates as the Company's Chief Restructuring Officer, to lead the Company's restructuring effort. Mr. Weiss, age 41, is the founder and Principal of BSWA. Mr. Weiss specializes in advising public and private companies in complex transactions including business restructurings and acquisitions/divestitures, Interim/Acting CFO services, and complex SEC and GAAP issues. Prior to founding BSWA in 2006, Mr. Weiss served as Vice President of Finance, North America for Tomy Co. Ltd. Mr. Weiss is a certified public accountant. Mr. Weiss has a B.A. in Business from San Diego State University and an M.B.A. from the University of Southern California. On Dec. 18, 2012, the Company entered into an engagement agreement with BSWA, which is controlled by Mr. Weiss. Under the terms of the Agreement, BSWA will perform services, including, but not limited to: * Developing bankruptcy strategy; * Negotiating with creditors; * Preparing business analysis; and * Providing restructuring advice and assistance to the Company in developing a plan, if applicable, which would be the basis for a plan under Chapter 11 of title 11 of the Bankruptcy Code In connection with the execution of the Agreement, the Company paid BSWA an initial retainer in the amount of $30,000. As compensation for BSWA's services, the Company will pay BSWA fees at the hourly billing rate of $325. In addition, the Company will reimburse BSWA for reasonable out-of-pocket expenses incurred in connection with the provision of its services to the Company. On Dec. 21, 2012, Mr. Robert Tetzloff resigned as Chief Executive Officer of the Company. Mr. Tetzloff remains a member of and the Chairman of the Company's Board of Directors. On Jan. 7, 2013, Mr. Anthony J. Fidaleo resigned as Chief Financial Officer of the Company. The Company cautioned its stockholders that trading in shares of its common stock during the pendency of the bankruptcy filing will be highly speculative and will pose substantial risks. Trading prices for the Company's common stock may bear little or no relationship to the actual recovery, if any, by holders thereof in the Company's Bankruptcy Filing. Accordingly, the Company urges extreme caution with respect to existing and future investments in its common stock. About AuraSound, Inc. Santa Ana, Calif-based AuraSound, Inc. (OTC BB: ARUZE) -- http://www.aurasound.com/-- develops, manufactures, and markets audio products. AuraSound's products include TV soundbars, high- drivers for TVs and laptops, subwoofers, and tactile transducers. AuraSound, Inc., filed a voluntary petition (Bank. C.D. Cal. Case No. 12-24400) on Dec. 12, 2012. The Company will continue to operate its business as a "debtor in possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. The petition was signed by the Debtor's Acting Chief Financial Officer, Anthony J. Fidaleo. The Hon. Mark S. Wallace presides over the case. The Debtor is represented by Winthrop Couchot PC. The Debtor has scheduled assets of $2.2 million and scheduled liabilities of $42.8 million. AXION INTERNATIONAL: Samuel Rose Hikes Equity Stake to 40% ---------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Samuel G. Rose disclosed that, as of Jan. 28, 2013, he beneficially owns 18,036,383 shares of common stock of Axion International Holdings, Inc., representing 40% of the shares outstanding. Mr. Rose previously reported beneficial ownership of 15,764,783 common shares or a 37.4% equity stake as of Dec. 17, 2012. A copy of the amended filing is available at: http://is.gd/ClK39E About Axion International New Providence, N.J.-based Axion International Holdings, Inc. (OTC BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee of patented and patent-pending technologies developed for the production of structural plastic products such as railroad crossties, pilings, I-beams, T-Beams, and various size boards including a tongue and groove design that are utilized in multiple engineered design solutions such as rail track, rail and tank bridges (heavy load), pedestrian/park and recreation bridges, marinas, boardwalks and bulk heading to name a few. RBSM LLP, in New York, the auditor, issued a going concern qualification each in the Company's financial statements for the years ended Dec. 31, 2010, and 2011. RBSM LLP noted that the Company has incurred significant operating losses in current year and also in the past. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern, it said. Axion International reported a net loss of $9.93 for the 12 months ended Dec. 31, 2011, compared with a net loss of $7.10 million for the 12 months ended Sept. 30, 2010. The Company's balance sheet at Sept. 30, 2012, showed $6.97 million in total assets, $8.10 million in total liabilities, $5.86 million in 10% convertible preferred stock, and a $6.99 million total stockholders' deficit. AXION INTERNATIONAL: Issues $1.2 Million Convertible Notes ---------------------------------------------------------- Pursuant to a Note Purchase Agreement dated Aug. 24, 2012, among Axion International Holdings, Inc., and MLTM Lending, LLC, Samuel Rose, Allen Kronstadt and the other investors, the Company issued and sold to the Investors an aggregate principal amount of $1,250,001 of the Company's 8.0% convertible promissory notes. The Notes are initially convertible into shares of the Company's common stock, no par value, at a conversion price equal to $0.40 per share of Common Stock, subject to adjustment. In consideration for the issuance of the Notes and the Warrants, the Investors paid the Company $1,250,001 in cash. The Warrants are exercisable at an exercise price of $0.60 per share of Common Stock, subject to adjustment. A copy of the Form 8-K is available at http://is.gd/XgL5Gc About Axion International New Providence, N.J.-based Axion International Holdings, Inc. (OTC BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee of patented and patent-pending technologies developed for the production of structural plastic products such as railroad crossties, pilings, I-beams, T-Beams, and various size boards including a tongue and groove design that are utilized in multiple engineered design solutions such as rail track, rail and tank bridges (heavy load), pedestrian/park and recreation bridges, marinas, boardwalks and bulk heading to name a few. RBSM LLP, in New York, the auditor, issued a going concern qualification each in the Company's financial statements for the years ended Dec. 31, 2010, and 2011. RBSM LLP noted that the Company has incurred significant operating losses in current year and also in the past. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern, it said. Axion International reported a net loss of $9.93 for the 12 months ended Dec. 31, 2011, compared with a net loss of $7.10 million for the 12 months ended Sept. 30, 2010. The Company's balance sheet at Sept. 30, 2012, showed $6.97 million in total assets, $8.10 million in total liabilities, $5.86 million in 10% convertible preferred stock, and a $6.99 million total stockholders' deficit. AXION INTERNATIONAL: MLTM Lending Hikes Equity Stake to 31.8% ------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, MLTM Lending, LLC, disclosed that, as of Jan. 28, 2013, it beneficially owns 13,339,255 shares of common stock of Axion International Holdings, Inc., representing 31.8% of the shares outstanding. MLTM Lending previously reported beneficial ownership of 10,502,218 common shares or a 28.6% equity stake as of Sept. 28, 2012. On Jan. 28, 2013, MLTM purchased notes in the original principal amount of $391,667 which is initially convertible into 979,168 shares of Common Stock, and an associated warrant to purchase 979,168 shares of Common Stock, in each case subject to adjustment as provided on the terms of such Note and associated warrant. The total amount of funds used by MLTM to purchase that Note and associated warrant was $391,667 in cash. A copy of the amended filing is available at http://is.gd/QGqRrx About Axion International New Providence, N.J.-based Axion International Holdings, Inc. (OTC BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee of patented and patent-pending technologies developed for the production of structural plastic products such as railroad crossties, pilings, I-beams, T-Beams, and various size boards including a tongue and groove design that are utilized in multiple engineered design solutions such as rail track, rail and tank bridges (heavy load), pedestrian/park and recreation bridges, marinas, boardwalks and bulk heading to name a few. RBSM LLP, in New York, the auditor, issued a going concern qualification each in the Company's financial statements for the years ended Dec. 31, 2010, and 2011. RBSM LLP noted that the Company has incurred significant operating losses in current year and also in the past. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern, it said. Axion International reported a net loss of $9.93 for the 12 months ended Dec. 31, 2011, compared with a net loss of $7.10 million for the 12 months ended Sept. 30, 2010. The Company's balance sheet at Sept. 30, 2012, showed $6.97 million in total assets, $8.10 million in total liabilities, $5.86 million in 10% convertible preferred stock, and a $6.99 million total stockholders' deficit. BBF REALTY: Case Summary & 4 Largest Unsecured Creditors -------------------------------------------------------- Debtor: BBF Realty Investments, LLC 13375 SW 128 St # 108A Miami, FL 33186 Bankruptcy Case No.: 13-12054 Chapter 11 Petition Date: January 30, 2013 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Laurel M. Isicoff Debtor's Counsel: Zach B. Shelomith, Esq. LEIDERMAN SHELOMITH, P.A. 2699 Stirling Rd # C401 Ft Lauderdale, FL 33312 Tel: (954) 920-5355 Fax: (954) 920-5371 E-mail: zshelomith@lslawfirm.net Scheduled Assets: $4,003,566 Scheduled Liabilities: $2,846,411 A copy of the Company's list of its four largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/flsb13-12054.pdf The petition was signed by Louis Biasi, manager. Affiliates that earlier filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Juan Miguel Fernandez 13-11926 01/29/13 Louis A. Biasi 13-11962 01/29/13 Ricardo Luis Bandrich 13-11923 01/29/13 BDRC LOFTS: Judge Won't Move Case to Ft. Worth Bankruptcy Court --------------------------------------------------------------- Creditors of BDRC Lofts Ltd. failed in their bid to move the venue of the Chapter 11 proceedings to the federal bankruptcy court in Fort Worth, Texas. Judge Craig A. Gargotta in Austin bankruptcy court, where the case is pending, denied the creditors' request and said, "It is not clear to the Court that transfer would serve the interest of justice or make the bankruptcy proceedings more convenient to the parties." Before BDRC's bankruptcy filing, a group of creditors -- Lawsuit Creditors -- filed a lawsuit against BDRC and related parties in the 342nd Judicial District Court, Tarrant County, Texas, alleging common law fraud and fraudulent conveyances. The Lawsuit Creditors secured a lis pendens on a portion of the property in connection with this lawsuit. BDRC filed a malpractice lawsuit against the Lawsuit Creditors' counsel in their Tarrant County lawsuit, Decker Jones McMarckren, McClane, Hall & Bates, P.C., Veronica Chavez Law, and Mark Dugan. The malpractice lawsuit is also taking place in the 342nd Judicial District Court of Tarrant County, Texas. The Lawsuit Creditors claim that BDRC filed for bankruptcy in order to hinder and delay rulings in the Tarrant County lawsuits. A second group of Creditors -- HP Loft Association Creditors -- filed a Motion to Transfer Venue on July 27, 2012. The HP Loft Association Creditors later filed a Second Motion to Transfer Venue on Aug. 1, 2012. The Lawsuit Creditors filed a Motion to Transfer Venue on Aug. 13, 2012. The Decker Jones Attorneys filed a Motion to Transfer Venue on Aug. 28, 2012. Each of these motions to transfer venue seeks transfer to the Northern District of Texas, Fort Worth Division. After several continuances, the Court held a hearing on Jan. 18, 2013, to consider these various motions to transfer venue. The Decker Jones Attorneys stated that their Motion to Transfer Venue is moot on the record at hearing. The Lawsuit Creditors and the HP Loft Association Creditors proceeded to argue their motions, and the Court took them under advisement. The Lawsuit Creditors include Victoria Powell, Bobby Powell, Michael Crow, Deborah Crow, Beatrice Pardon, Jack Norris, Lee Ann Ostermann, Ian McKee, Paul McKee, Teresa McKee, Porter Rainwater, Doris Rainwater, Lachlan Cullen, Thomas S. Farr, Nancy O'Shea, Mary Alegre, Arthur Kelly, Michele Kelly, Andrew C. de la Torre, Kelsey Marquez de la Torre, Anne Godfrey, Wojtek Mozdyniewicz, Jolanta Mozdyniewicz, Christine Donahue, Nat Baumer, Joane Baumer, Lenel Freemyer, Elizabeth Goforth, Steven Lippert, Lynne Lippert, George Arthur Read, and Stephanie Bobek. The HP Loft Association Creditors include HP Loft Owners Association, Victoria Powell, Steven Lippert, Lee Ann Ostermann, Lynn Lippert, Jack Norris, Andrew C. de la Torre, Anne Godfrey, Christine Donahue, Sandra McGlothin, Nancy O'Shea, and Joane Baumer. A number of individuals belong to both the Lawsuit Creditors group and the HP Loft Association Creditors group. A copy of the Court's Jan. 31, 2013 Memorandum Opinion and Order is available at http://is.gd/MKzUJxfrom Leagle.com. BDRC Lofts Ltd. filed a voluntary Chapter 11 bankruptcy petition (Bankr. W.D. Tex. Case No. 12-11559) on July 6, 2012, in the Austin Division. BDRC's purported reason for filing is to facilitate the sale of real property free and clear of liens. The property represents the majority of BDRC's assets. It includes a condominium unit and parking areas, all of which are located on Houston Street in Fort Worth, Texas. Judge Craig A. Gargotta oversees the case. C. Daniel Roberts & Associates P.C., serves as the Debtor's counsel. In its petition, the Debtor scheduled assets of $1,456,239 and liabilities of $1,222,230. A copy of the Company's list of its 13 largest unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/txwb12-11559.pdf The petition was signed by Bryan Dorsey, president of BDRC, Inc., general partner. BHFS I LLC: Full-Payment Plan Declared Effective ------------------------------------------------ The effective date of BHFS I, LLC, et al.'s Modified Amended Joint Consolidated Plan of Reorganization dated Dec. 13, 2012, occurred on Jan. 2, 2013. The Plan creates nine lasses of creditors and equity interest holders. The Plan was accepted by every voting creditor and every equity interest holder. Holders of claims in Classes 1, 5 and are not impaired and are, thus, conclusively deemed to have accepted the Plan. The balance owing under the allowed syndicated loan claim (Class 7) of $27 million will be repaid on a term of 5 years, through 59 monthly installments of principal and interest (floating rate equal to 30-day LIBOR plus 300 bps), with the 60th payment being a balloon payment. Holders of general unsecured claims (Class 8) will each receive 50% of the principal amount of its claim in cash 10 business days after the Effective Date. The remaining 50% of the principal amount, together will all applicable interest, will be paid in cash on the first anniversary of the Effective Date. Equity Interests in Subsidiary Debtors BHFS I, LLC, BHFS II, LLC, BHFS III, LLC, BHFS IV, LLC, and BHFS Theater, LLC, are preserved and retained under the Plan, and are transferred to reorganized debtor Behringer Harvard Frisco Square, L.P., free and clear of all claims, liens, interests, and encumbrances. A copy of the order confirming the Plan is available at: http://bankrupt.com/misc/bhfs1.doc301.pdf A copy of the Modified Amended Plan dated Dec. 13, 2012, is available at: http://bankrupt.com/misc/bhfs.doc294.pdf About BHFS I LLC Addison, Texas-based BHFS I LLC and its affiliates, owners of the Frisco Square master-planned development in the Dallas suburb of Frisco, filed for Chapter 11 protection (Bankr. E.D. Tex. Case No. 12-41581 to 12-41585) on June 13 in Sherman. The affiliates are Behringer Harvard Frisco Square LP, BHFS II LLC, BHFS III LLC, BHFS IV LLC, and BHFS Theater LLC. BHFS I and BHFS II each estimated assets and debts of $10 million to $50 million. In its schedules, BHFS I LLC disclosed $28,947,198 in total assets and $13,742,348 in total liabilities. The Debtors own and operate substantial office, retail, and residential rental space at the highly regarded project known as "Frisco Square," in Frisco, Texas. The project has 103,120 square feet of rentable office space in three buildings, 110,395 square feet of retail space in six buildings, including a 12-screen, 41,464 square-foot Cinemark theater, and 114 high-end multifamily rental units in two buildings, all built between 2000 and 2010. Occupancy rates are more than 85% for the office and retail space and almost 95% for multifamily space. Judge Brenda T. Rhoades presides over the case. Davor Rukavina, Esq., and Jonathan Lindley Howell, Esq., at Munsch Hardt Kopf & Harr, P.C., serve as the Debtors' counsel. The petition was signed by Michael J. O'Hanlon, president. George H. Barber, Esq., and David D. Ritter, Esq., at Kane Russell Coleman & Logan PC, represent Regions Bank. Bank of America, N.A., is represented by Keith M. Aurzada, Esq., and John Leininger at Bryan Cave. BIONEUTRAL GROUP: Marcum LLP Raises Going Concern Doubt ------------------------------------------------------- BioNeutral Group, Inc., filed on Jan. 29, 2013, its annual report for the fiscal year ended Oct. 31, 2012. Marcum LLP, in New York, expressed substantial doubt about BioNeutral Group's ability to continue as a going concern. The Company's independent accountants noted that the Company has recurring losses, had a working capital deficiency of approximately $1.6 million and an accumulated deficit of approximately $55 million as of Oct. 31, 2012. The Company reported a net loss of $2.4 million on $4,588 of revenues in fiscal 2012, compared with a net loss of $2.8 million on $53,579 of revenue in fiscal 2011. The Company's balance sheet at Oct. 31, 2012, showed $10.0 million in total assets, $2.4 million in total liabilities, and stockholders' equity of $7.6 million. A copy of the Form 10-K is available at http://is.gd/xRIjqE Morristown, New Jersey-based BioNeutral Group is a life science specialty technology company that has developed a novel combinational chemistry-based technology which it believes in certain circumstances may neutralize harmful environmental contaminants, toxins and dangerous micro-organisms, including bacteria, viruses and spores. It currently operates its business through its subsidiary, BioNeutral Laboratories Corporation USA, a corporation organized in Delaware in 2003. BIOZONE PHARMACEUTICALS: Files Amendment No. 6 to 8MM Prospectus ---------------------------------------------------------------- Biozone Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission an amendment to its Form S-1 relating to the sale by Aero Liquidating Trust of up to 8,345,310 shares of the Company's common stock. All of these shares of the Company's common stock are being offered for resale by the selling stockholder. The prices at which the selling stockholder may sell shares will be determined by the prevailing market price for the shares or in negotiated transactions. The Company will not receive any proceeds from the sale of these shares by the selling stockholder. The Company will bear all costs relating to the registration of these shares of its common stock, other than any selling stockholder's legal or accounting costs or commissions. The Company's common stock is quoted on the Over-the-Counter Bulletin Board under the symbol "BZNE.OB". The last reported sale price of the Company's common stock as reported by the OTC Bulletin Board on Jan. 30, 2013, was $3.75 per share. A copy of the amended prospectus is available at: http://is.gd/hgPSkk About Biozone Pharmaceuticals Biozone Pharmaceuticals, Inc., formerly, International Surf Resorts, Inc., was incorporated under the laws of the State of Nevada on Dec. 4, 2006, to operate as an internet-based provider of international surf resorts, camps and guided surf tours. The Company proposed to engage in the business of vacation real estate and rentals related to its surf business and it owns the Web site isurfresorts.com. During late February 2011, the Company began to explore alternatives to its original business plan. On Feb. 22, 2011, the prior officers and directors resigned from their positions and the Company appointed a new President, Director, principal accounting officer and treasurer and began to pursue opportunities in medical and pharmaceutical technologies and products. On March 1, 2011, the Company changed its name to Biozone Pharmaceuticals, Inc. Since March 2011, the Company has been engaged primarily in seeking opportunities related to its intention to engage in medical and pharmaceutical businesses. On May 16, 2011, the Company acquired substantially all of the assets and assumed all of the liabilities of Aero Pharmaceuticals, Inc., pursuant to an Asset Purchase Agreement dated as of that date. Aero manufactures markets and distributes a line of dermatological products under the trade name of Baker Cummins Dermatologicals. On June 30, 2011, the Company acquired the Biozone Labs Group which operates as a developer, manufacturer, and marketer of over- the-counter drugs and preparations, cosmetics, and nutritional supplements on behalf of health care product marketing companies and national retailers. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Paritz and Company. P.A., in Hackensack, N.J., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company does not have sufficient cash balances to meet working capital and capital expenditure needs for the next twelve months. In addition, as of Dec. 31, 2011, the Company has a shareholder deficiency and negative working capital of $4.37 million. The continuation of the Company as a going concern is dependent on, among other things, the Company's ability to obtain necessary financing to repay debt that is in default and to meet future operating and capital requirements. Biozone reported a net loss of $5.45 million in 2011, compared with a net loss of $319,813 in 2010. The Company's balance sheet at Sept. 30, 2012, showed $8.25 million in total assets, $8.33 million in total liabilities and a $74,927 total shareholders' deficiency. BON-TON STORES: Morgan Stanley Hikes Equity Stake to 7.1% --------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Morgan Stanley disclosed that, as of Dec. 31, 2012, it beneficially owns 1,225,501 shares of common stock of Bon-Ton Stores Inc. representing 7.1% of the shares outstanding. Morgan Stanley Capital Services LLC beneficially owns 1,061,837 common shares as of that date. Morgan Stanley previously reported beneficial ownership of 896,827 shares or a 5.2% equity stake as of Sept. 27, 2012. A copy of the amended filing is available for free at: http://is.gd/K7LbMx About Bon-Ton Stores The Bon-Ton Stores, Inc., with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 273 department stores, which includes 11 furniture galleries, in 24 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers nameplates and, in the Detroit, Michigan area, under the Parisian nameplate. The Company's balance sheet at Oct. 27, 2012, showed $1.84 billion in total assets, $1.80 billion in total liabilities, and $40.30 million in total shareholders' equity. * * * As reported by the TCR on July 13, 2012, Moody's Investors Service revised The Bon-Ton Stores, Inc.'s Probability of Default Rating to Caa1/LD from Caa3. The Caa1/LD rating reflects the company's exchange of $330 million of new senior secured notes due 2017 for $330 million of its unsecured notes due 2014. Moody's also affirmed the company's Corporate Family Rating at Caa1 and affirmed the Caa3 rating assigned to the company's senior unsecured notes due 2014. Moody's said the affirmation of the company's 'Caa1' corporate family rating reflects the company's persistent negative trends in sales and operating margins and uncertainties that the company's strategies to reverse these trends will be effective. BON-TON STORES: Morgan Stanley Hikes Equity Stake to 7.1% --------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Morgan Stanley disclosed that, as of Dec. 31, 2012, it beneficially owns 1,225,501 shares of common stock of Bon-Ton Stores Inc. representing 7.1% of the shares outstanding. Morgan Stanley Capital Services LLC beneficially owns 1,061,837 common shares as of that date. Morgan Stanley previously reported beneficial ownership of 896,827 shares or a 5.2% equity stake as of Sept. 27, 2012. A copy of the amended filing is available for free at: http://is.gd/K7LbMx About Bon-Ton Stores The Bon-Ton Stores, Inc., with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 273 department stores, which includes 11 furniture galleries, in 24 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers nameplates and, in the Detroit, Michigan area, under the Parisian nameplate. The Company's balance sheet at Oct. 27, 2012, showed $1.84 billion in total assets, $1.80 billion in total liabilities, and $40.30 million in total shareholders' equity. * * * As reported by the TCR on July 13, 2012, Moody's Investors Service revised The Bon-Ton Stores, Inc.'s Probability of Default Rating to Caa1/LD from Caa3. The Caa1/LD rating reflects the company's exchange of $330 million of new senior secured notes due 2017 for $330 million of its unsecured notes due 2014. Moody's also affirmed the company's Corporate Family Rating at Caa1 and affirmed the Caa3 rating assigned to the company's senior unsecured notes due 2014. Moody's said the affirmation of the company's 'Caa1' corporate family rating reflects the company's persistent negative trends in sales and operating margins and uncertainties that the company's strategies to reverse these trends will be effective. C-SWDE348 LLC: Court Confirms Plan of Reorganization ---------------------------------------------------- The Bankruptcy Court confirmed on Oct. 5, 2012, C-SWDE 348, LLC's Plan of Reorganization dated Dec. 1, 2010. As reported in the TCR on April 8, 2011, the Debtors' Plan contemplates the return of the Lantana Trails Master Plan in Las, Vegas, Nevada, in full satisfaction of a promissory note in the amount of $11,575,000 issued by the Debtor's parent for the benefit of the lenders. The return will occur by canceling the equity interests in the Debtor currently held by the Debtor's parent ad issuing Class A membership interests in the reorganized Debtor to the Lenders on a pro rata basis. In exchange for the cancellation of its common equity, the Parent will receive Class B membership interests in the Debtor, which will permit the Parent to receive only limited distributions from the Debtor. The Parent, as the holder of the Class B Membership Interests, will have no voting rights other than with regard to the dissolution of the reorganized Debtor as permitted by a new operating agreement. The purpose of the Plan is to effectively transfer the ownership of the Property to the Lenders without the necessity and expense of a foreclosure as well as to provide a structure and mechanism to protect and improve and fully realize the value of the Property of the Lenders. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/C-SWDE348_ds.pdf About C-SWDE348 Las Vegas, Nevada-based C-SWDE348, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 11-13942) on March 21, 2011. Scott Bogatz, Esq., at Bogatz & Associates, P.C., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates B-SWDE3, LLC (Bankr. D. Nev. Case No. 09-29051) and four affiliates filed for bankruptcy in 2009. B-NWI1, LLC (Case No. 10-15774) and nine other related entities sought bankruptcy protection in 2010. B-SCT1, LLC (Case No. 11-11560) and G-SWDE1, LLC (Case No. 11-11991) filed Chapter 11 petitions in February 2011. C-NW361, LLC, and five other affiliates sought bankruptcy protection in March 2011 CANTOR COMMERCIAL: Moody's Assigns 'B1' Sr. Unsecured Debt Rating ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 corporate family rating to Cantor Commercial Real Estate Company, L.P. and a B1 senior unsecured debt rating to the proposed bond offering to be co- issued by Cantor Commercial Real Estate Company, L.P. and CCRE Finance Corporation. These are the first ratings Moody's has assigned to the New York City-based commercial real estate finance company focused on originating loans intended for distribution through the commercial mortgage backed securities market. CCRE is a subsidiary of Cantor Fitzgerald, L.P., who is a co-general partner of CCRE and responsible for its day-to-day operations. Ratings Rationale The ratings reflect CCRE's mono-line business model as a commercial real estate lender, which is a highly competitive business. Moody's notes that although CCRE has posted good profitability to date, it has a limited history and has been operating amidst generally favorable market conditions since its 2010 inception. A high proportion of its revenues are derived from securitization gains, which are highly volatile. An expansion of its business model so as to derive a base of recurring revenues would be viewed favorably. Moody's also commented that as a non- bank finance company, CCRE relies on access to confidence- sensitive, wholesale funding to finance its operations. The proposed bond offering will expand its access to capital. Offsetting the risks associated with CCRE's business model, Moody's notes that the company benefits from a strong credit culture and has originated high-quality collateral to date. Leverage is reasonable and the company demonstrates sound liquidity management. CCRE has no significant debt maturities until April 2015 and benefits from USD675 million of secured facilities that lack the ability to call margin based on credit spread changes. This feature should help CCRE preserve liquidity in times of market distress, and its continued access to facilities with these types of terms is a key assumption supporting the ratings. Moody's also believes that the benefits derived from CCRE's affiliation with Cantor Fitzgerald are important credit strengths. The CF sponsorship provides CCRE with access to an extensive sales and trading force (which helps with distribution) and a vast brokerage network (through Newmark Grubb Knight Frank, a global real estate services provider). CCRE also benefits from a flexible cost structure due to its CF shared services agreement, which should help the company reduce costs more easily during a market downturn. The stable rating outlook reflects Moody's expectation that over the next 18-24 months CCRE will sustain, if not increase, its recent pace of originations, while maintaining its disciplined underwriting approach as evidenced by higher quality collateral. Moody's also expects CCRE will retain modest leverage, operating at the upper end of its targeted range (0.75x-1.5x debt/equity) only just prior to a securitization, and continue to lengthen its debt maturity schedule. A ratings upgrade is unlikely over the intermediate term, but would likely reflect CCRE diversifying its business mix so as to reduce reliance on securitization gains, more predictable earnings, maintenance of high credit quality over a sustained period of time, and maintenance of modest average leverage in line with historical levels. The ratings could be downgraded if CCRE experiences deterioration in asset quality, difficulty distributing its collateral, reduced liquidity cushion as evidenced by modest cash balances and a weighted average debt maturity of less than two years, loss of affiliation with Cantor Fitzgerald, increased exposure to market- based margin calls due to a change in terms of loan agreements. The following ratings were assigned with a stable outlook: Cantor Commercial Real Estate Company, L.P. - Ba3 corporate family rating - B1 senior unsecured debt rating * Unsecured Debt being co-issued by Cantor Commercial Real Estate Company, L.P. and CCRE Finance Corporation Cantor Commercial Real Estate Company, L.P. is a commercial real estate finance company headquartered in New York, NY. The principal methodology used in this rating was Finance Company Global Rating Methodology published in March 2012. CANTOR COMMERCIAL: S&P Assigns B+ ICR; B Rating on $250MM Notes --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned a 'B+' issuer credit rating on New York-based Cantor Commercial Real Estate Co. L.P. (CCRE). The outlook on the ratings is stable. At the same time, S&P assigned a 'B' rating on the company's proposed issuance of $250 million in senior unsecured notes. "Our ratings on CCRE reflect the company's monoline business and concentration in commercial real estate, its dependence on repurchase agreement funding facilities, its short operating history, and a limited partnership agreement that allows for dissolution if CCRE fails to reach an IPO or sale by July 18, 2013," said Standard & Poor's credit analyst Brendan Browne. "The company's strong profitability, its position as one of the largest originators and sellers of CRE loans, and the operational and distribution support from Cantor Fitzgerald L.P. are positive rating factors." The company's total focus on originating and selling CRE loans limits the rating. That concentration exposes the company to changes in CRE prices, loan demand, and the securitization market, which have proven volatile historically. S&P believes the currently attractive market conditions should translate into strong earnings and cash flows. However, any material changes in CRE markets could result in sharp reductions in profitability and a weaker financial position. CCRE depends on repurchase agreement funding lines that give its lenders discretion to reject new loans for any reason, which is a negative rating factor. For instance, a lender could refuse to finance new loans if it lost confidence in CCRE's underwriting, the lender itself had liquidity pressures, or for any other reason (although it would continue to finance loans already in the facility). One of the company's four funding lines, representing about 30% of CCRE's funding capacity, also allows for margin calls at the lender's discretion. That lender could conceivably mark down the loans securing the CCRE credit facility, potentially requiring CCRE to post additional collateral or pay down the line. The company protects against these funding and liquidity risks by maintaining low leverage and ample liquidity. CCRE reported a debt-to-equity ratio of 0.9x as of Sept. 30, 2012, and S&P expects the company will maintain leverage of less than 1.5x over the next year. It also had $132 million of cash on its balance sheet, and S&P believes it will hold at least $30 million to $40 million. The outlook is stable. S&P could lower the rating if leverage rises above 1.5x or if cash falls to less than $30 million. S&P could also lower the rating if conditions in CRE markets deteriorate significantly, causing profitability and cash flows to drop substantially. Although unlikely, S&P could lower the rating significantly if ownership chooses to dissolve the firm after July 18, 2013. However, S&P believes any dissolution process would be deliberate and all debt would be repaid. S&P could raise the rating over time as CCRE establishes a longer track record, diversifies its business, and maintains a strong financial profile. For instance, S&P could raise the rating if the company reaches an IPO, builds more permanent capital, and continues to operate with low leverage. CAPITOL BANCORP: Still Needs Investor for Reorganization Plan ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Capitol Bancorp Ltd.'s bid for a quick exit from bankruptcy hit a first snag when affiliates of Valstone Partners LLC declined to proceed with a tentative agreement to fund the reorganization by paying $50 million for common and preferred stock while buying $207 million in face amount of defaulted commercial and residential mortgages. According to the report, Lansing, Michigan-based Capitol had hoped financing would have been arranged in time for approval of the plan last week. Instead, Capitol moved the approval hearing back to March 5, saying more time is needed to complete discussions with potential investors. "Tax complexities," according to Capitol, are contributing to the delay. The Chapter 11 petition filed in Detroit, Mich., was accompanied by a reorganization plan already accepted by the requisite majorities of creditors and equity holders in all classes. Assuming it isn't changed, the original plan would exchange debt and trust-preferred securities for equity. Holders of $6.8 million in senior notes would see a full recovery by receipt of new stock. Holders of $151.3 million in trust-preferred securities would take equity worth $50 million, for a one-third recovery. Holders of $5 million in preferred stock would have a 20% recovery from new equity, while common stockholders would take stock worth $15 million. Several of the bank subsidiaries, which didn't file bankruptcy, are "dangerously close" to having inadequate capital and being taken over by regulators, the company said in a court filing, according to the report. About Capitol Bancorp Capitol Bancorp Ltd. and Financial Commerce Corporation filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case Nos. 12-58409 and 12-58406) on Aug. 9, 2012. Capitol Bancorp -- http://www.capitolbancorp.com/-- is a community banking company with a network of individual banks and bank operations in 10 states and total consolidated assets of roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of FCC, with a number of CBC affiliates owning the remainder. FCC, in turn, is the holding company for five of the banks in CBC's network. CBC is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841, et seq., and trades on the OTCQB under the symbol "CBCR." Lawyers at Honigman Miller Schwartz and Cohn LLP represent the Debtors as counsel. John A. Simon, Esq., of Foley & Lardner LLP represents the Official Committee of Unsecured Creditors as counsel. In its petition, Capitol Bancorp scheduled $112,634,112 in total assets and $195,644,527 in total liabilities. The petitions were signed by Cristin K. Reid, corporate president. The Company's balance sheet at Sept. 30, 2012, showed $1.749 billion in total assets, $1.891 billion in total liabilities, and a stockholders' deficit of $141.8 million. The Debtor's plan would exchange debt and trust-preferred securities for equity. Holders of $6.8 million in senior notes would see a full recovery by receipt of new stock. Holders of $151.3 million in trust-preferred securities would take equity worth $50 million, for a one-third recovery. Holders of $5 million in preferred stock would have a 20% recovery from new equity, while common stockholders would take stock worth $15 million. CATALYST PAPER: Completes $13.5-Mil. Sale of Snowflake Mill ----------------------------------------------------------- Catalyst Paper has completed the U.S. Court approved sale of the Snowflake assets and shares of Apache Railway. The Hackman Capital-led buyer group purchased the assets of the closed Snowflake facility and the shares of Apache Railway for US$13,460,000 and other non-monetary consideration. The transaction received local support from the Town of Snowflake and other interests, based on the buying group's intention to continue to operate the Apache Railway as a going concern. "The successful completion of this transaction will assist Catalyst in reducing its interest obligations and improve overall liquidity," said president and chief executive officer Kevin J. Clarke. "With challenging markets and currency impacts to contend with, we are maintaining tight control of spending on all fronts and making the sale of all remaining non-core assets a priority." Aided by the sale of the Snowflake assets and the sale of inventories and realization of accounts receivable associated with the Snowflake closure, Catalyst has been able to repay substantially all of its cash drawings under its ABL facility leaving only customary letters of credit and a minimal cash drawing outstanding under the facility at this point in time. Drawings under the ABL facility fluctuate with Catalyst's working capital needs from time to time. 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. In the Sept. 17, 2012, edition of the TCR, 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. CENTAUR ACQUISITION: Moody's Rates $185-Mil. Secured Notes 'Caa1' ----------------------------------------------------------------- Moody's Investors Service assigned a B3 corporate family rating and B3-PD probability of default rating to Centaur Acquisition, LLC. Moody's also assigned B1 ratings to the proposed first lien senior secured credit facilities, consisting of a USD20 million revolving credit facility due 2018 and USD460 million term loan due 2019. Moody's also assigned a Caa1 rating to the proposed USD185 million second lien senior secured term loan due 2020. The ratings outlook is stable. Centaur Acquisition, LLC will use proceeds from the proposed debt to fund the acquisition of Indiana Grand Casino & Indiana Downs racetrack, which are the primary assets of Indianapolis Downs, LLC. As part of the acquisition, New Centaur, LLC and the existing sponsor group will also contribute USD342 million in the form of cash, rolled equity, and existing and new unsecured PIK loans due 2026 (unrated). The proposed and existing unsecured PIK loans are an obligation of Centaur Holdings, LLC, which wholly-owns New Centaur, LLC. The acquisition is expected to close in February. The ratings of the proposed credit facilities are subject to review of final documentation. Centaur Acquisition, LLC Corporate family rating at B3 Probability of default rating at B3-PD Proposed USD20 million first lien senior secured revolving credit facility due 2018 at B1 (LGD2, 28%) Proposed USD460 million first lien senior secured term loan due 2019 at B1 (LGD2, 28%) Proposed USD185 million second lien senior secured term loan due 2020 at Caa1 (LGD5, 75%) Ratings Rationale The B3 CFR reflects the company's high initial pro forma leverage and Moody's expectation that debt to EBITDA will only decline to the 6.5 times range over the next 12 to 18 months (Moody's adjusted and including the proposed transaction). The rating also captures execution risk in terms of the realization of cost synergies and the prospects for increased competition, particularly from Ohio and other neighboring states. While the transaction increases scale, the rating also considers a high concentration of assets in the same geographic region. Specifically, Hoosier Park Racing & Casino and Indiana Grand are near Indianapolis, thus exposing both properties to similar economic and competitive risks. Notwithstanding these concerns, the rating derives support from expected EBIT to interest coverage in excess of 1.5 times and modestly positive free cash flow (supported by a very low interest rate on the unsecured PIK loans). The rating also benefits from relatively stable demand trends for Hoosier Park and Indiana Downs, their established market positions with favorable demographics, the potential realization of meaningful synergies, and expected earnings improvement from a Tax Settlement Agreement that will take effect when Centaur Acquisition acquires Indiana Grand. Both locations are somewhat insulated from new competition given that a large portion of their customers are drawn from the immediate area. The stable outlook reflects Moody's expectation that combined revenue trends will not weaken despite increasing competitive pressures and that operating margins will expand through the realization of operating synergies and from the benefit of the Tax Settlement Agreement. The outlook also reflects Moody's expectation that the company will maintain a good liquidity profile, including capacity under its revolving credit facility and room under financial maintenance covenants. The ratings could be downgraded if the soft economy or increased competitive pressures cause revenues to fall or synergy realization is less than anticipated such that debt to EBITDA fails to decline below 7.0 times and/or EBIT to interest is well below 1.5 times over the next 12 to 18 months. A material weakening of the company's liquidity profile, such as reduced cushion under covenants, could also pressure the ratings. A ratings upgrade would require the company to execute on its cost synergy plans and demonstrate growth in the face of increasing competition such that debt to EBITDA is sustained below 5.5 times and EBIT to interest exceeds 2.0 times. The principal methodology used in this rating was the Global Gaming 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. Centaur Acquisition, LLC, owns and operates Hoosier Park Racing & Casino, a casino and race track located approximately 35 miles northeast of Indianapolis, Indiana. Hoosier Park currently features 1,886 slot machines and 19 electronic table games. The company is planning to acquire Indiana Grand Casino & Indiana Downs, which is located 25 miles southeast of downtown Indianapolis and features 1,953 slots and 25 electronic gaming tables. The companies reported combined revenues of USD478 million for their fiscal-years ended December 31, 2011. CENTRAL EUROPEAN: Annual General Meeting Set for March 26 --------------------------------------------------------- The board of directors of Central European Distribution Corporation has scheduled CEDC's annual general meeting of shareholders for Tuesday, March 26, 2013, and has fixed the close of business on Friday, March 1, 2013, as the record date for the determination of shareholders eligible to vote at the annual general meeting or any adjournment or postponement thereof. About CEDC Mt. Laurel, New Jersey-based Central European Distribution Corporation is one of the world's largest vodka producers and Central and Eastern Europe's largest integrated spirit beverages business with its primary operations in Poland, Russia and Hungary. Ernst & Young Audit sp. z.o.o., in Warsaw, Poland, expressed substantial doubt about Central European's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that certain of the Company's credit and factoring facilities are coming due in 2012 and will need to be renewed to manage its working capital needs. The Company's balance sheet at Sept. 30, 2012, showed $1.98 billion in total assets, $1.73 billion in total liabilities, $29.44 million in temporary equity, and $210.78 million in total stockholders' equity. Liquidity The Company's Convertible Senior Notes are due on March 15, 2013. The Company has said its current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to make the repayment of principal on the Convertible Notes and, unless the transaction with Russian Standard Corporation is completed the Company may default on them. The Company's cash flow forecasts include the assumption that certain credit and factoring facilities coming due in 2012 would be renewed to manage working capital needs. Moreover, the Company had a net loss and significant impairment charges in 2011 and current liabilities exceed current assets at June 30, 2012. These conditions, the Company said, raise substantial doubt about its ability to continue as a going concern. * * * As reported by the TCR on Aug. 10, 2012, Standard & Poor's Ratings Services kept on CreditWatch with negative implications its 'CCC+' long-term corporate credit rating on U.S.-based Central European Distribution Corp. (CEDC), the parent company of Poland-based vodka manufacturer CEDC International sp. z o.o. "The CreditWatch status reflects our view that uncertainties remain related to CEDC's ongoing accounting review and that CEDC's liquidity could further and substantially weaken if there was a breach of covenants which could lead to the acceleration of the payment of the 2016 notes, upon receipt of a written notice of 25% or more of the noteholders," S&P said. As reported by the TCR on Jan. 16, 2013, Moody's Investors Service has downgraded the corporate family rating (CFR) and probability of default rating (PDR) of Central European Distribution Corporation (CEDC) to Caa3 from Caa2. "The downgrade follows CEDC announcement on the 28 of December that it had agreed with Russian Standard a revised transaction to repay its $310 million of convertible notes due March 2013 which, in Moody's view, has increased the risk of potential loss for existing bondholders", says Paolo Leschiutta, a Moody's Vice President - Senior Credit Officer and lead analyst for CEDC. CENTRAL FEDERAL: Therese Liutkus Quits as Treasurer & CFO --------------------------------------------------------- Therese Ann Liutkus submitted her resignation as Treasurer and Chief Financial Officer of Central Federal Corporation and CFBank, effective Feb. 8, 2013. Central Federal Corporation and CFBank expect to name a replacement in the near future. About Central Federal Fairlawn, Ohio-based Central Federal Corporation (Nasdaq: CFBK) is the holding company for CFBank, a federally chartered savings association formed in Ohio in 1892. CFBank has four full-service banking offices in Fairlawn, Calcutta, Wellsville and Worthington, Ohio. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Crowe Horwath LLP, in Cleveland, Ohio, expressed substantial doubt about the Company's ability to continue as a going concern. The Company's auditors noted that the Holding Company and its wholly owned subsidiary (CFBank) are operating under regulatory orders that require among other items, higher levels of regulatory capital at CFBank. The Company has suffered significant recurring net losses, primarily from higher provisions for loan losses and expenses associated with the administration and disposition of nonperforming assets at CFBank. These losses have adversely impacted capital at CFBank and liquidity at the Holding Company. At Dec. 31, 2011, regulatory capital at CFBank was below the amount specified in the regulatory order. Failure to raise capital to the amount specified in the regulatory order and otherwise comply with the regulatory orders may result in additional enforcement actions or receivership of CFBank. Central Federal reported a net loss of $5.42 million in 2011, a net loss of $6.87 million in 2010, and a net loss of $9.89 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $222.13 million in total assets, $197.76 million in total liabilities and $24.36 million in total stockholders' equity. Regulatory Matters On May 25, 2011, Central Federal Corporation and CFBank each consented to the issuance of an Order to Cease and Desist (the Holding Company Order and the CFBank Order, respectively, and collectively, the Orders) by the Office of Thrift Supervision (OTS), the primary regulator of the Holding Company and CFBank at the time the Orders were issued. The Holding Company Order required it, among other things, to: (i) submit by June 30, 2011, a capital plan to regulators that establishes a minimum tangible capital ratio commensurate with the Holding Company's consolidated risk profile, reduces the risk from current debt levels and addresses the Holding Company's cash flow needs; (ii) not pay cash dividends, redeem stock or make any other capital distributions without prior regulatory approval; (iii) not pay interest or principal on any debt or increase any Holding Company debt or guarantee the debt of any entity without prior regulatory approval; (iv) obtain prior regulatory approval for changes in directors and senior executive officers; and (v) not enter into any new contractual arrangement related to compensation or benefits with any director or senior executive officer without prior notification to regulators. The CFBank Order required CFBank to have by Sept. 30, 2011, and maintain thereafter, 8% Tier 1 (Core) Capital to adjusted total assets and 12% Total Capital to risk weighted assets. CFBank will not be considered well-capitalized as long as it is subject to individual minimum capital requirements. CFBank did not comply with the higher capital ratio requirements by the Sept. 30, 2011, required date. CELL THERAPEUTICS: Estimates $8.6-Mil. Net Loss in December ----------------------------------------------------------- Cell Therapeutics, Inc., provided information pursuant to a request from the Italian securities regulatory authority, CONSOB, pursuant to Article 114, Section 5 of the Unified Financial Act, that the Company issue at the end of each month a press release providing a monthly update of certain information relating to the Company's management and financial situation. The Company estimated a net loss attributable to common shareholders of US$8.58 million on US$0 of net revenue for the month ended Dec. 31, 2012, compared with a net loss attributable to common shareholders of US$5.79 million on US$0 of net revenue during the prior month. Estimated research and development expenses were US$3.1 million and US$3.6 million for the month of November 2012 and December 2012, respectively. There were no convertible notes outstanding as of Nov. 30, 2012, and Dec. 31, 2012. A copy of the press release is available for free at: http://is.gd/pk6qwf About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Cell Therapeutics reported a net loss attributable to CTI of US$62.36 million in 2011, compared with a net loss attributable to CTI of US$82.64 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $36.17 million in total assets, $32.60 million in total liabilities, $13.46 million in common stock purchase warrants, and a $9.89 million total shareholders' deficit. Going Concern Doubt Raised The report of Marcum LLP, in San Francisco, Calif., dated March 8, 2012, expressed an unqualified opinion, with an explanatory paragraph as to the uncertainty regarding the Company's ability to continue as a going concern. The Company's available cash and cash equivalents are US$47.1 million as of Dec. 31, 2011. The Company's total current liabilities were US$17.8 million as of Dec. 31, 2011. The Company does not expect that it will have sufficient cash to fund its planned operations beyond the second quarter of 2012, which raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Form 10-K for the year ended Dec. 31, 2011, noted that if the Company receives approval of Pixuvri by the EMA or the FDA, it would anticipate significant additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and are currently exploring alternative sources of equity or debt financing. The Company may seek to raise that capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, the Company has a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, it may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CHAMPION INDUSTRIES: Incurs $22.9-Mil. Net Loss in Fiscal 2012 -------------------------------------------------------------- Champion Industries, Inc., filed on Jan. 29, 2013, its annual report on Form 10-K for the fiscal year ended Oct. 31, 2012. Arnett Foster Toothman PLLC, in Charleston, West Virginia, expressed substantial doubt about Champion Industries' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has been unable to obtain a longer term financing solution with its lenders. "Our ability to operate is dependent on our ability to complete a restructuring or refinancing of the existing debt, due to the Company's inability to satisfy short term obligations with currently available funds, primarily related to the maturity of its credit obligations to a syndicate of banks in June of 2013 or earlier if the Company is unable to comply with the multitude of covenants in its Restated Credit Agreement many of which are beyond the direct control of the Company. Therefore, the Company believes there is a reasonable possibility of default at or before March 31, 2013, and our ability to operate as a going concern is dependent on our ability to address our current credit situation." The Company reported a net loss of $22.9 million on $104.4 million of revenues in fiscal 2012, compared with a net loss of $4.0 million on $104.5 million of revenues in fiscal 2011. The Company reported an operating loss of $8.9 million in 2012 as compared to $4.4 million in 2011. The newspaper segment reported an operating loss of $9.0 million in 2012 compared to an operating loss of $6.3 million in 2011. The printing segment reported an operating loss of $1.8 million for 2012 and an operating loss of $0.5 million in 2011. The office products and office furniture segment reported operating profits of $1.9 million in 2012, compared to operating profits of $2.4 million in 2011. The Company's effective tax rate for 2012 and 2011 was a negative (84.9%) and a benefit of 36.7%. The Company's balance sheet at Oct. 31, 2012, showed $47.9 million in total assets, $49.3 million in total liabilities, and a stockholders' deficit of $1.4 million. A copy of the Form 10-K is available at http://is.gd/WdiTQ3 Champion Industries, Inc., is engaged in the commercial printing and office products and furniture supply business in regional markets east of the Mississippi River. The Company also publishes The Herald-Dispatch daily newspaper in Huntington, West Virginia with a total daily and Sunday circulation of approximately 23,000 and 28,000. CHINA GREEN: Albert Wong Replaces Madsen as Accountants ------------------------------------------------------- China Green Creative, Inc., dismissed Madsen & Associates CPA's, Inc (Madsen) as its independent registered accounting firm , Madsen reported on the Company's financial statements for the years ended Dec. 31, 2011, and 20110. Their opinion did not contain an adverse opinion or a disclaimer of opinion, and was not qualified as to uncertainty, audit scope, or accounting principles but was modified as to a going concern. The dismissal was not a result of any disagreement with the accounting firm. Immediately following the dismissal of Madsen, the Company's Board of Directors commenced contacting and interviewing other auditors in order to engage another firm as the Company's independent auditor. Effective Jan. 30, 2013, the Company engaged Albert Wong & Co as its new Independent registered public accounting firm. The decision to engage Albert Wong & Co was approved by the Company's board of directors. During its two most recent fiscal years, and during any subsequent interim period prior to the date of Albert Wong & Co's engagement, the Company did not consult the new auditor regarding either: (i) the application of accounting principles to a proposed or completed specified transaction, or the type of audit opinion that might be rendered, and neither a written report nor oral advice was provided that was an important factor considered by the Company in reaching a decision as to the accounting, auditing, or financial reporting issue; or (ii) any matter that was either the subject of a disagreement or reportable event within the meaning set forth in Regulation S-K, Item 304 a(1)(iv) or (a)(1)(v). About China Green China Green Creative, Inc., located in Shenzhen, Guangdong Province, People's Republic of China, is principally engaged in the distribution of consumer goods and electronic products in the PRC. After auditing the 2011 results, Madsen & Associates CPA's, Inc., in Salt Lake City, Utah, expressed substantial doubt about China Green Creative's ability to continue as a going concern. The independent auditor noted that the Company does not have the necessary working capital to service its debt and for its planned activity. The Company reported a net loss of $344,901 on $1.93 million of revenues for 2011, compared with a net loss of $3.35 million on $2.78 million of revenues for 2010. The Company's balance sheet at June 30, 2012, showed $5.43 million in total assets, $7.43 million in total liabilities, and a $2 million total stockholders' deficit. CNL LIFESTYLE: Moody's Affirms 'Ba3' CFR, Outlook Stable -------------------------------------------------------- Moody's Investors Service has affirmed the senior unsecured and corporate family ratings of CNL Lifestyle Properties, Inc. at Ba3. The outlook remains stable. The rating affirmation reflects the company's conservative financial policy as evidenced by its modest leverage and secured debt levels and minimal lease roll-over due to its long-term triple-net lease structure. Furthermore, the rating incorporates the company's focus in asset types that are vulnerable to cyclical discretionary spending and Moody's concerns regarding tenant concentration risk. The following ratings were affirmed with a stable outlook: CNL Lifestyle Properties, Inc. Corporate family rating at Ba3 Senior unsecured rating at Ba3 Ratings Rationale: Key credit strengths supporting CNL Lifestyle Properties' ("CLP") Ba3 senior unsecured rating include the company's moderate leverage as measured by effective leverage (debt + preferred as a % of total debt) and net debt to EBITDA. As of the end of the third quarter, effective leverage and net debt to EBITDA were 31% and 5.5x, respectively (albeit higher when including CLP's share of unconsolidated JVs). CLP has grown over the past two years, increasing its gross asset base to USD3.6 billion from USD3.1 billion. Most notably, the company's recent acquisitions have primarily been in the senior living space. Moody's believes that the company's senior living facilities helps to diversify CNL Lifestyle Properties' leisure- centric portfolio and provides stability to its portfolio of asset classes that have exposure to seasonality and healthy consumer spending. Still, CLP's portfolio has experienced high degrees of volatility due to operating pressures and a sluggish macro- economic environment, particularly in its golf and attractions segments. Fixed charge coverage has weakened in the last several quarters but improved to 2.7x for 9M12 (typically a strong quarter due to seasonality). Moody's notes that CLP's current coverage has modest cushion to absorb some negative impact on earnings. Offsetting these credit strengths are CLP's large tenant concentrations with a few operators, magnifying the effects on earnings should these tenants run into financial difficulties. The rating is also constrained by the company's lack of unencumbered assets and relatively small line of credit at USD125 million. However, near-term debt maturities are manageable with USD19 million and USD73 million coming due in 2013 and 2014, respectively. Furthermore, the company continues to raise capital through its distribution reinvestment plan, receiving aggregate proceeds of USD55 million as of 3Q12. Moody's expects CLP to continue to maintain adequate liquidity to fund its capital needs. The stable outlook reflects Moody's expectation that CNL Lifestyle Properties will at a minimum maintain its conservative capital structure while improving operating performance across its diversified portfolio of lifestyle assets. According to Moody's, upward rating movement would require growing the unencumbered asset base closer to 50% of gross assets coupled with strong EBITDAR property coverage ratios; secured debt below 10% of gross assets; and reduced tenant concentration with top three tenants representing less than 25% of total property income. A ratings upgrade is unlikely in the near-term. Downward rating pressure would likely be precipitated by material shifts in discretionary spending impacting demand for CNL Lifestyle's properties. Also, fixed charge coverage falling below 2.0x on a consistent basis; secured debt over 30% or any decrease in the quality or size of the unencumbered asset pool would also lead to a ratings downgrade. Any liquidity challenges will also place downward pressure on the ratings. Moody's last rating action with respect to CNL Lifestyle Properties, Inc. was on March 24, 2011 when Moody's assigned a Ba3 senior unsecured and corporate family rating with a stable outlook. The principal methodology used in this rating was Global Rating Methodology for REITs and Other Commercial Property Firms published in July 2010. COMMERCIAL VEHICLE: S&P Revises Outlook to Positive; Affirms B CCR ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it revised its rating outlook on New Albany, Ohio-based Commercial Vehicle Group Inc. (CVG) to positive from stable. S&P affirmed its 'B' corporate credit rating on the company, along with all related issue-level ratings on the company's debt. The ratings on CVG reflect the company's "aggressive" financial risk profile and "vulnerable" business risk profile. CVG's aggressive financial risk profile reflects its trailing-12- month lease-adjusted leverage of 3.6x as of Sept. 30, 2012 (compared with 5.2x in the prior period), free operating cash flow (FOCF) to debt of 5.9% (compared with negative FOCF in the prior period), and EBITDA interest coverage of 3.4x (compared with 2.6x). The leverage decrease resulted entirely from higher EBITDA, rather than debt reduction, because of the expanding Class 8 commercial truck build rate in North America and operational execution. To maintain debt leverage below 4x in 2013 while facing weakening end markets, the company's operational expertise must excel, including a highly flexible labor force. "The company's vulnerable business risk profile reflects geographic, market, and customer concentration, along with end- market cyclicality and exposure to commodity costs," said Standard & Poor's credit analyst Nancy Messer. CVG has somewhat diversified its end market diversity in recent years through acquisitions, but it remains dependent on the economically sensitive heavy duty truck and construction equipment industries. We believe CVG will continue pricing products to incorporate incremental raw material cost increases, as it has historically. Other business risk factors that could pressure profits include limits on credit availability for truck buyers and potential price concessions to customers," S&P noted. CVG derives about 45% of its revenues from sales to the highly cyclical Class 8 truck market in North America. Some of the company's other markets -- construction (25% of revenues), for example -- are also cyclical, while aftermarket (14%) is less volatile. Although the construction equipment market sales contribute some diversity to the earnings stream, S&P views this market as weak and volatile, despite some positive trends in the Asian construction business. Expansion into emerging markets will ultimately provide more market diversity for CVG, but S&P expects Class-8 sales to provide a significant portion of the company's revenues for the next several years. CVG supplies a concentrated group of large, price-sensitive commercial-truck original equipment manufacturers (OEMs). The company's top five customers accounted for 65% of its 2011 sales, and S&P don't expect that exposure to change materially through 2013. If the weakness in the North American Class-8 market that S&P expects in 2013 were to become a full down-cycle, CVG's customers could in-source cab assembly to use excess capacity in a downturn. CVG's business is concentrated in North America, where it generated 76% of its 2011 revenues; S&P expects incremental but not material diversification of its footprint in the year ahead. The company has modestly diversified end-market exposure in recent years, but S&P do not expect significant changes in 2013. The company generated the balance of sales from the company's operations in Europe, Asia, Australia, and Mexico. North American heavy-duty truck production more than doubled in 2011 from the recent 2009 trough, but 2012 builds increased only about 10%. S&P believes the build rate may decrease as much as 10% year over year in 2013 because of the weak economy and housing market. Growth in Europe, China, and the U.S. medium-duty truck market has decelerated, and S&P expects this trend to continue in 2013. Production volumes likely reached 283,000 units in 2012, far below the 2006 production peak of 376,000 units. In S&P's opinion, a long-term replacement trend of 220,000 to 230,000 trucks per year is sustainable in North America. The up-cycle that began in 2009 is a result of the relatively high average age of the U.S. Class 8 truck fleet, combined with improving truck tonnage, among other factors. CVG designs, engineers, and produces structural components of truck cabs, including frame sleeper boxes and cab-related interior products for the commercial-truck markets. The company's products include seating, electronic wire harness assemblies, and interior trim systems. S&P expects CVG to continue to diversify its product offerings and global footprint in the year ahead through relatively small, timely, specific acquisitions, as it has done throughout its existence as a public company. "Our positive rating outlook on CVG means there is a one-third probability that we could raise the ratings in the next year. To raise the ratings, we would need to see that expanding markets could improve CVG's operating efficiencies and enable it to increase earnings enough to reduce leverage and increase cash flow in 2013. This could allow for us to revise our business profile assessment to weak from vulnerable and to raise the corporate credit rating. To raise the rating, we would need to believe that CVG will be able to maintain its lease-adjusted leverage of 3.6x or lower, FOCF to debt of 6%, and EBITDA interest coverage of 3.5x over the next year despite our expectation for weak demand in the company's North American Class 8 truck market and its global construction market in the year ahead. This could occur if EBITDA, including our adjustments, were to increase to $80 million or better and improve from that point. To raise the rating, we would also need to believe the revolving credit facility could be refinanced and that no transforming acquisitions had transpired. This assumes management is able to manage its above-average growth plan (doubling revenues in five years from the 2011 level) while avoiding higher leverage for acquisitions or negative cash flow from prolonged investment in working capital," S&P added. And, for an upgrade, S&P would need to believe that the company's market position and operating execution are sufficiently robust to withstand the possible downturn in commercial-vehicle production volumes in North America beginning in 2014 after reaching a plateau, without causing free cash flow to turn negative. "Alternatively, consistent with our base case, we could revise the outlook to stable if we begin to believe that the North American heavy duty truck weakness will be worse than we project or if the global economic recovery falters, thereby preventing CVG from sustaining the financial measures that we expect for an upgrade. For the current rating, we expect leverage, per our calculation, to remain below 5x. Moreover, we expect funds from operations to total debt of 15% or higher and a break-even or positive FOCF in 2012. For the 12 months ended Sept. 30, 2012, the company had leverage of 3.6x and funds from operation to debt of 20.5%," S&P said. COMMUNITY FINANCIAL: Cultivate Discloses 6.7% Equity Stake ---------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Cultivate, LLC, and Michael T. Keough disclosed that, as of Dec. 21, 2012, they beneficially own 400,000 shares of common stock of Community Financial Shares, Inc., representing 6.71% based on 5,560,567 shares of common stock issued and outstanding as of Dec. 21, 2012, plus 300,000 shares of common stock issuable upon conversion of shares of Series C Preferred Stock. A copy of the filing is available at http://is.gd/XlCJWx About Community Financial Glen Ellyn, Illinois-based Community Financial Shares, Inc., is a registered bank holding company. The operations of the Company and its banking subsidiary consist primarily of those financial activities common to the commercial banking industry. All of the operating income of the Company is attributable to its wholly- owned banking subsidiary, Community Bank-Wheaton/Glen Ellyn. BKD, LLP, in Indianapolis, Indiana, issued a going concern qualification on the consolidated financial statements for the year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and is undercapitalized. The Company reported a net loss of $11.01 million on net interest income (before provision for loan losses) of $10.77 million in 2011, compared with a net loss of $4.57 million on net interest income (before provision for loan losses) of $10.40 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $334.17 million in total assets, $328.69 million in total liabilities and $5.48 million in total shareholders' equity. COMMUNITY TOWERS: Has OK to Hire ACM Capital as Financial Advisors ------------------------------------------------------------------ Community Towers I, LLC, et al., obtained authorization from the U.S. Bankruptcy Court for the Northern District of California to employ ACM Capital Partners, LLC as financial advisors. ACM Capital, as financial advisor, will assist the Debtors in (a) analysis and negotiations regarding their secured debt with their prepetition lender CIBC, Inc.; (b) development of a restructuring plan with respect to the secured debt and negotiations with CIBC related thereto; (c) obtaining new debt financing; and (d) other matters. About Community Towers I Community Towers I LLC is a real estate investment company. Community Towers I LLC and various affiliates -- Community Towers II, LLC, Community Towers III, LLC, Community Towers IV, LLC -- filed a Chapter 11 petition (Bankr. N.D. Calif. Lead Case No. 11-58944) on Sept. 26, 2011, in San Jose, California. Community Towers I disclosed $51,939,720 in assets and $39,479,784 in liabilities as of the Chapter 11 filing. COMSTOCK MINING: Provides Production Update, 2013 Outlook --------------------------------------------------------- Comstock Mining Inc. announced unaudited production, revenues and operational costs for 2012, and its 2013 outlook. Revenues The Company commenced full mining activities in August 2012, and began pouring gold and silver in late September 2012. Metal shipments in the fourth quarter 2012 totaled $5.4 million, with gold revenues of $4.5 million and silver revenues of $0.9 million. Silver is accounted for as a by-product credit for financial reporting purposes. The Company is ramping up its production and plans to achieve a sustained production rate of 400 gold- equivalent ounces poured per week, or over 20,000 gold-equivalent ounces per annum. Since pouring commenced, the Company has averaged 223 gold-equivalent ounces poured per week. During the past eight weeks, the Company averaged 250 gold-equivalent ounces poured per week and in the past two weeks averaged over 300 gold- equivalent ounces poured per week. The Company is successfully and continuously adjusting its operations to improve grade, maximize yields and increase tons crushed and stacked. The Company continues to advance activities in each of these areas on a weekly basis keeping it on track for achieving the 400 gold- equivalent ounce target rate, by late April 2013. Comstock's Chief Executive Officer, Corrado De Gasperis commented, "Over the past three months, we have successfully transitioned into production with less than optimal mining and hauling conditions and have begun growing our weekly metal pours toward our immediate objective of 400 gold-equivalent ounces per week. Costs have been reduced from a primarily construction and ramp up mode into a stable production mode, and have since been further reduced." The Company has also crushed and stacked over 360,000 dry tons of mineralized material since production began, delivering 6,519 estimated ounces of recoverable gold and over 55,770 estimated ounces of recoverable silver to the leach pad, positioning the Company well for sustained growth. Material placed on the heap leach pad remains under solution until the target recovery rates are achieved. Throughout this period, the recovery of gold and silver continues, but the most effective economic recovery of gold and silver takes between 45 to 60 days to complete. The portion of the heap under leach the longest, 80 days, has recovery of gold estimated at 67% and the recovery of silver estimated at 51%. Preliminary laboratory metallurgical test results provide the Company confidence that ultimate heap leach recovery will meet or exceed the expected 70% for gold and 45% for silver. Through Dec. 31, 2012, the Company realized an average price of $1,744.36 price per ounce of gold, including the benefits of the first commemorative bar, and a $32.56 average sales price per ounce of silver. In comparison, commodity market prices in the fourth quarter of 2012 averaged $1,721.79 per ounce of gold and $32.68 per ounce of silver. Operating Costs The Company plans on announcing its audited 2012 Annual financial statements on March 14, 2013. The Company previously provided estimates of the Lucerne Mine's annual operating expenses, including mining, processing, royalties and mine administration costs of approximately $13.3 million per annum plus $3 million of higher costs associated with temporarily using the longer, alternative haul route, or a total of $16.3 million per annum. During the fourth quarter 2012, actual Lucerne Mine operating expenses were approximately $4.1 million (an annualized rate of approximately $16.5 million), including the higher haulage costs. Continued cost optimization resulted in December 2012 with mine operating costs of $1.3 million, further reducing our annualized spend rate to approximately $15.5 million and below plan. The estimated operating expenses do not include corporate administration or other general and administrative costs, nor do they include exploration and mine development costs. Exploration and mine development activities were completed in early December 2012, with approximately $1.7 million expended. The Company is not currently drilling and does not plan on resuming these activities until the Lucerne Mine stabilizes at the 400 gold- equivalent ounce weekly production rate. The Company has completed the updated resource estimates for the Lucerne Resource Area. Behre Dolbear & Company (USA), Ltd., of Denver Colorado is currently completing a technical report with their analysis and recommendations. The Company plans to release the highlights of this important work next week, and then publish Behre Dolbear's full technical report soon thereafter. Federal Permitting and Lot 51 The Company has also made extensive, positive progress with the BLM regarding accessing the primary haul road between the Lucerne Mine and the processing facility in American Flat. Late in the fourth quarter of 2012, the Company and the BLM entered into a Memorandum of Understanding (MOU) to expedite the remainder of the permitting process for the Lucerne Right of Way permit. In January, the BLM launched the public scoping (a process for determining the scope of potential public issues) for comments associated with this permit application. The relevant public meetings have already been completed, with strong public support. In addition, the BLM is also concurrently processing a Color of Title permit application to resolve and recover the use of Lot 51, one of the main blocking factors limiting the use of the Company's existing haul road. Recent discussions with the BLM have been very positive and acceptance of the application would represent a breakthrough allowing more expedient use of Lot 51 and potentially significant hauling efficiencies. 2013 Outlook In the last three months, modifications and optimizations have been engineered into the Company's mine planning, hauling, crushing and recovery systems. The Company has updated its financial analysis for the Lucerne Mine and anticipates annual operating expenses, including mining, processing, royalties and mine administration costs of approximately $13 million per annum, plus approximately $2.25 million of additional, annual haulage costs, with a production schedule currently processing at the rate of one million tons per annum. The Company currently anticipates production rates beyond the 400 gold-equivalent ounces per week in the second half of the year, ultimately achieving between 18- 20,000 actual gold-equivalent ounces produced in 2013. The Company believes its liquidity and capital resources are sufficient for achieving its objectives. These production rates and costs are not only expected to result in positive cash performance, but the cash flows are anticipated to be sufficient for debt service and the resumption of self-funded development drilling by the Comstock team. Mr. De Gasperis concluded, "Our revenue growth and expense management is positively impacting our liquidity, stability and ultimately, our growth. We are further minimizing mining costs across our system. We have also significantly reduced or eliminated external legal, administrative, environmental and regulatory costs associated with non-routine activities, positioning us well for 2013 growth." A copy of the press release is available at http://is.gd/GzbRZG About Comstock Mining Virginia City, Nev.-based Comstock Mining Inc. is a Nevada-based, gold and silver mining company with extensive, contiguous property in the historic Comstock district. The Company began acquiring properties in the Comstock in 2003. Since then, the Company has consolidated a substantial portion of the Comstock district, secured permits, built an infrastructure and brought the exploration project into test mining production. The Company continues acquiring additional properties in the Comstock district, expanding its footprint and creating opportunities for exploration and mining. The goal of the Company's strategic plan is to deliver stockholder value by validating qualified resources (measured and indicated) and reserves (probable and proven) of 3,250,000 gold equivalent ounces by 2013, and commencing commercial mining and processing operations by 2011, with annual production rates of 20,000 gold equivalent ounces. The Company reported a net loss of $11.61 million in 2011, compared with a net loss of $60.32 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $42.15 million in total assets, $29.95 million in total liabilities and $12.19 million in total stockholders' equity. CONSTELLATION BRANDS: Antitrust Case No Impact on Moody's Ba1 CFR ----------------------------------------------------------------- Moody's Investors Service reports that the Department of Justice antitrust lawsuit challenging Anheuser-Busch Inbev's (A3/P-2) proposed acquisition of Grupo Modelo and thus jeopardizing the concurrent sale of the Crown Import business to Constellation Brands is a credit negative for Constellation but does not impact Ba1 corporate family rating or stable outlook. The Justice Department's filed a civil lawsuit in the U.S. District Court for the District of Columbia alleging that ABI's proposed acquisition would substantially lessen competition in the US beer market. ABI issued a statement soon afterward saying that it would vigorously contest the lawsuit which it believes to be inconsistent with the law. Constellation also issued a statement expressing disappointment with the action. Should the lawsuit cause the deal to unwind, Moody's would view the development to be a strategic negative for Constellation, which stood to benefit strategically and financially from the full ownership of Crown Imports. On June 29, 2012, ABI announced its plan to acquire the remaining stake in Grupo Modelo that it did not already own. In a separate agreement, Constellation agreed to buy ABI's stake in Crown Imports, the US distributor of Modelo's products. The transaction was designed specifically to avoid antitrust issues in the US for ABI. The lawsuit seeks to prevent the ABI transactions and preserve the existing competitive landscape where Modelo is an important competitor to ABI, which is already the largest player in the highly concentrated US beer market. As a result of these developments, Constellation no longer expects the deal to close during the first quarter of 2013 and the timing and eventual outcome of the transaction are likely to remain uncertain for several months. Moody's views this development as a credit negative for Constellation. Moody's said that the Crown acquisition, which would total about USD1.85 billion, would be a strategic positive for the company, although leverage will temporarily spike up beyond the range that is comfortable for the current rating level. However, while the loss of this attractive opportunity is a long term negative for Constellation, The company remains well positioned at the current rating level even without the deal. As a condition to the transaction, Constellation pre-funded the acquisition last summer, however the acquisition bonds are callable at par in the event that ABI terminates the contract. While Constellation would be out the interest costs for the time the bonds were outstanding, it would also be entitled to a breakage fee from ABI, which would help to compensate for its expenses. Should the deal ultimately be allowed to proceed, Moody's expects leverage to remain temporarily above 4 times for about 12 to 18 months but to return to the company's long-term target range of 3 to 4 times thereafter. The principal methodology used in rating Constellation Brands was Global Alcoholic Beverage Rating Methodology published in September 2009. Headquartered in Victor, New York, Constellation Brands, Inc. is an international wine company with a broad portfolio of premium brands across the wine, spirits, and imported beer categories. Major brands in the company's current portfolio include, Robert Mondavi, Clos du Bois, Ravenswood, Blackstone, Nobilo, Kim Crawford, Inniskillin,Jackson-Triggs, Arbor Mist, Black Velvet Canadian Whisky, and SVEDKA vodka. It imports Corona through the Crown Imports Joint Venture. Reported net revenue for fiscal 2012 was approximately USD2.7 billion. Pro forma for the acquisition, which would include full consolidation of the Crown JV, 2012 revenue would be approximately USD5.1 billion. CORE ENTERTAINMENT: S&P Revises Outlook to Neg; Affirms 'B' Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on CORE Entertainment Inc. to negative from stable. Existing ratings on the company, including the 'B' corporate rating, were affirmed. "The outlook revision to negative reflects our expectation that recent ratings declines at "American Idol" and "So You Think You Can Dance" could pressure near-term liquidity and could increase refinancing risks surrounding the company's 2017 and 2018 debt maturities," said Standard & Poor's credit analyst Chris Valentine. Standard & Poor's Ratings Services' 'B' corporate credit rating on New York-based CORE Entertainment Inc. (formerly CKX Entertainment Inc.), and its operating subsidiary, CORE Media Group Inc., reflects the company's revenue concentration among two key television franchises, and its high debt leverage. S&P believes CORE's business risk profile is "weak" (based on S&P's criteria), because of its heavy reliance on the "American Idol" brand and, to a lesser extent, "So You Think You Can Dance," both subject to audience viewing habits, increased competition in the reality- based talent contest format, and the risks of declining audience ratings over the finite lifecycle of most television shows. S&P views CORE's financial risk profile as "highly leveraged," based on its lease-adjusted debt leverage of 6.4x bullet maturity structure, which creates refinancing risk in 2017 and 2018, when CORE's key shows will likely draw even lower ratings. S&P's governance assessment is "fair." CORE owns, develops, and monetizes entertainment content. It owns the rights to the IDOLS television brand, including the "American Idol" series and local adaptations of the show broadcast in over 100 countries. In the U.S., the company co-produces "American Idol" with FreemantleMedia Ltd., and retains 50% of TV license fees after production costs. The company's intellectual property (IP)-related assets consist of copyrights to albums released by "American Idol" finalists, as well as the co-ownership of the name, image, and likeness of Elvis Presley and Muhammad Ali. S&P views its IP-related assets as more stable than its television portfolio, although replenishment of the music catalog partly depends on the success and popularity of the "American Idol" franchise, which makes it vulnerable to recent ratings declines. Audience ratings for "American Idol" declined roughly 29% in 2012 (Season 11). S&P believes the decline is the result of increased competition and an expected level of audience attrition. The premiere of Season 12 was also down 20%, a sign that declines are not moderating. S&P believes the fall-off in ratings will have negative repercussions for ratings-based bonus TV fees in 2013, potentially leading to lower revenue generated from music touring, record sales, and merchandizing. Sponsorships and minimum touring guarantees are usually booked 12 months in advance, and could be hurt in 2013 and 2014 based on recent ratings declines. "Our negative rating outlook reflects our expectation that performance of the company's programming portfolio will continue to decline over the next few seasons. Factors leading to a downgrade include a greater-than-expected decline in television revenue for 2013 because of rating declines at "American Idol" in excess of 10%, which we regard as a normal pace of audience attrition. This scenario could result from a decline in the appeal of on-air talent, excessive judge turnover, or the debut of talent-based TV shows with a new concept. We also could lower our rating if we become convinced that CORE will not start generating positive discretionary in 2013. A revision back to stable would require CORE to reduce debt leverage and diversify its portfolio (potentially through successful program development), while maintaining adequate liquidity," S&P said. CORRECTIONS CORP: Fitch Affirms 'BB+' Issuer Default Rating ----------------------------------------------------------- Fitch Ratings has affirmed the credit ratings of Corrections Corp. of America as: -- Issuer Default Rating (IDR) at 'BB+'; -- $785 million secured credit facility at 'BBB-'; -- $645 million senior unsecured notes at 'BB+'. The Rating Outlook is Stable. The affirmation of CCA's ratings considers the company's intention to convert to a REIT from a C-Corp. with a Taxable REIT Subsidiary (TRS) structure, which would become effective Jan. 1, 2013 given a favorable Private Letter Ruling (PLR) from the IRS. This outcome is likely in Fitch's opinion, especially given the announcement of a favorable PLR for GEO Group (CCA's primary competitor) on Jan. 18, 2013. While the conversion does not place pressure on the rating or Outlook, Fitch views CCA's REIT conversion negatively from a credit perspective, driven primarily by the requirement to distribute at least 90% of taxable income to shareholders per regulations governing REITs. Fitch estimates the enhanced dividend stream will more than offset the potential tax savings and deteriorate the free cash flow (FCF) profile by roughly $90 million as compared to the pre-REIT conversion company. This will restrain the company's ability to build more than one new correctional facility per year with FCF, and it will increase reliance on consistent capital market access to grow and refinance indebtedness. The secured debt market for prisons remains undeveloped and is unlikely to become as deep as that for other commercial real estate asset classes, weakening the contingent liquidity provided by CCA's unencumbered asset pool. Fitch would view more positively an increase in institutional secured lender interest for prisons through business cycles and this increase would mitigate the reduced financial flexibility stemming from the conversion. Fitch expects that the company will retain strong access to capital via the unsecured bank, bond and equity markets, given our expectation for strong credit metrics following the conversion that are supported by the niche property type's stable cash flows derived from providing essential governmental services. Financial Policies Fitch calculates CCA's total debt/ LTM EBITDA at 2.6x as of Sept. 30, 2012. Following conversion to REIT status with a TRS structure, Fitch continues to expect the company will manage leverage to around 3x when allocating capital toward additional share repurchases and/ or dividends. The 'BB+' IDR incorporates CCA's financial policies, including the willingness to increase leverage to a cap of around 4x that would only be reached via opportunistic growth investments such as facility acquisitions and/or construction of multiple facilities in a relatively short period of time. The timing of such growth opportunities is difficult to predict, returns on capital have been attractive, and its main competitor (GEO) is more highly leveraged. These factors support the potential for leverage to increase. In the event leverage were to increase to the 4x range due to growth opportunities, Fitch expects that discretionary capital allocation policies would shift toward reducing leverage to around 3x within a relatively short period. However, the reduced FCF profile from the REIT conversion will limit its ability to deleverage quickly, so the timing of any deleveraging could be influenced by the company's willingness to issue equity to partially fund any growth opportunities. Solid Secular Credit Factors and Competitive Position The long-term credit characteristics of the private correctional facilities industry are attractive, including: overcrowding of public prisons, modest private sector penetration of prison populations, and economically defensive characteristics of prison populations. CCA maintains a leading position (44% market share of private prison beds) in the industry, which is highly concentrated and has significant barriers to entry. GEO Group is its largest competitor with about 29% market share. Fitch also views the industry in the context of a comparable set that includes hotels, hospitals, private prisons, and REITs. The U.S. private correctional facilities should continue to exhibit modest growth in the long-run. Although the privatization of correctional facilities dates back to the early 1980s, only about 10% of beds are currently outsourced. The number of outsourced beds has grown to more than 209,000 through the end of 2011 from 11,000 in 1990, a CAGR of 15.1% over that time frame. In contrast, roughly 20% of hospitals are investor-owned. CCA's business reflects the stability tied to contractual income. CCA enters into contracts with the federal, state, and/or local governments that guarantee a per diem rate or a take or pay arrangement that guarantees minimum occupancy levels. However, the short-term nature of the contacts with governmental authorities is a concern. Typical contracts are for roughly three to five years with multiple renewal terms but can be terminated at any time without cause. Additionally, contracts are subject to legislative bi-annual or annual appropriation of funds, so strained budget situations at federal, state, and local levels could pressure negotiated rates. The company received six requests for assistance with contracts in 2009-2010, but only one in 2011 and one in 2012. CCA was able to adjust cost items in contracts to compensate for reduced revenue levels such that the contracted profit did not deteriorate, and the reconfiguration worked in their favor in the most recent request for assistance in 2012. As a result, the company had strong relative financial performance through the recent recession. Another lingering concern remains the concentration of the company's customers. Federal correctional and detention authorities made up 43% of revenues in 2011 and primarily includes the Bureau of Prisons (BOP; 12%), the United States Marshals Service (USMS; 20%), and the U.S. Immigration and Customs Enforcement (ICE; 12%). State customers accounted for 50% of revenues in 2011. The California Department of Corrections and Rehabilitation (CDCR) made up 13% of total revenue for 2011, though this will decline in the coming years, where the pace of which will depend on the successful implementation of changes proposed in California's corrections realignment program and whether or not federal judges uphold their prior rulings centered on CDCR prison population reduction. Fitch says, "Our base case assumes that the population target is upheld and that California will continue to utilize CCA beds out of state until additional CDCR capacity comes on line, translating to a deactivation of a few thousand beds through the end of 2015. Without additional inmate offsets coming on line in this time frame (excluding recently announced contracts with Idaho and Arizona) this can drive growth slightly negative in 2013 and the following couple of years. Whether the withdrawals and offsets proceed according to our conservative base case or California's proposed corrections realignment program, both scenarios - considered in isolation - will be manageable within the 'BB+' IDR." Limited Real Estate Value: Based on a cost of $60,000 per bed, the replacement cost of the company's 47 facilities is around $4 billion, which compares to roughly $1.1 billion of debt and a current enterprise value of $4.8 billion. The company's real estate holdings provide only modest credit support in Fitch's view. There are limited alternative uses of prisons, the properties are often in rural areas, and there is no established mortgage market as a contingent liquidity source. However, the facilities do provide essential governmental services, so there is inherent value in the properties. Additionally, prisons have a long depreciable life (50 years) with a practical useful life greater than that (equivalent to 75 years), and CCA has a young owned portfolio (median age of 16 years). Strong Financial Profile: At Sept. 30, 2012, Fitch calculated FFO less maintenance capex of roughly $240 million for CCA and expects this to increase sizably for 2013 by roughly $50 million, reflecting tax savings from the REIT conversion, partially offset by a slight decline in EBITDA. This strong and stable stream of cash flow will be used to support the large recurring dividend commitments, which Fitch estimates to be roughly $215 million in 2013 excluding the one-time E&P distribution, as well as fluctuations in accounts receivable, prison construction, share repurchases, additional dividends, and/or paying down the balance on the revolver ($635 million at Sept. 30, 2012). CCA's debt maturity profile is attractive. In 2012, the company paid down $375 million of 6.25% notes due 2013, and $150 million of 6.75% notes due 2014 primarily by borrowing on the revolver, which matures December 2016. There are $465 million of 7.75% unsecured notes due 2017 that remain outstanding. The secured credit facility is rated 'BBB-', one notch above the IDR. CCA's accounts receivables are pledged as collateral, which totaled $239 million as of Sept. 30, 2012. Equity in the company's domestic operating subsidiaries and 65% of international subs are also pledged as collateral, but long-term fixed assets are not pledged. As of LTM Sept. 30, 2012, leverage through the secured credit facility was roughly 1.4x, and 1.8x on a fully drawn basis. Sensitivity/Rating Drivers Considerations for an investment grade IDR include these: -- Further penetration and public acceptance of private correctional facilities; -- An acceleration of market share gains and/or contract wins; -- Adherence to more conservative financial policies (2.0x leverage target; 4.0x minimum fixed charge coverage and $150 million minimum liquidity); -- Increased mortgage lending activity in the private prisons sector. Considerations for downward pressure on the 'BB+' IDR and/or Stable Outlook include: -- Increased pressure on per diem rates from customers; -- Decreasing market share gains and/or notable contract losses; -- Material political decisions related to long-term dynamics of the private correctional facilities industry; -- Leverage sustaining above 4.0x and FFO fixed charge coverage sustaining below 4.0x. CRYOPORT INC: Issues $588,000 Convertible Notes to Investors ------------------------------------------------------------ Cryoport, Inc., has issued to certain accredited investors unsecured convertible promissory notes in the original principal amount of $588,000, as of Jan. 24, 2013, pursuant to the terms of Subscription Agreements and Letters of Investment Intent. The Notes accrue interest at a rate of 15% per annum from date of issuance until Jan. 31, 2013, and at a rate of 5% per annum from Feb. 1, 2013, through the date of payment, in each case on a non- compounding basis. All principal and interest under the Notes will be due on Dec. 31, 2013. Cryoport may not prepay the Notes and payments will be on a pari passu basis. In the event Cryoport designates and issues preferred stock while the Notes are outstanding, the Notes will be convertible into shares of that preferred stock at a conversion rate equal to the price per share paid to Cryoport in connection with the issuance of that preferred stock at the option of the holders of the Notes. Emergent Financial Group, Inc., acted as the selling agent for the placement of the Notes and will receive cash commission of $41,160 and a finance fee of an additional $11,760. About Cryoport Lake Forest, Calif.-based CryoPort, Inc. (OTC BB: CYRX) provides comprehensive solutions for frozen cold chain logistics, primarily in the life science industries. Its solutions afford new and reliable alternatives to currently existing products and services utilized for bio-pharmaceuticals and biologics, including in-vitro fertilization, cell lines, vaccines, tissue and other commodities requiring a reliable frozen solution. As reported in the TCR on June 29, 2012, KMJ Corbin & Company LLP, in Costa Mesa, California, expressed substantial doubt about CryoPort's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and has had negative cash flows from operations since inception. "Although the Company has working capital of $4,024,120 and cash & cash equivalents of $4,617,535 at March 31, 2012, management has estimated that cash on hand, which include proceeds from the offering received in the fourth quarter of fiscal 2012, will only be sufficient to allow the Company to continue its operations only into the fourth quarter of fiscal 2013. These matters raise substantial doubt about the Company's ability to continue as a going concern." The Company's balance sheet at Sept. 30, 2012, showed $2.8 million in total assets, $2.0 million in total liabilities, and stockholders' equity of $776,493. CRYSTALLEX INTERNATIONAL: Files Reports for 2011, Q1, Q2 & Q3 ------------------------------------------------------------- Crystallex International Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 20-F disclosing a net loss and comprehensive loss of US$62.36 million for the year ended Dec. 31, 2011, compared with a net loss and comprehensive loss of US$42.63 million during the prior year. A copy of the Form 20-F is available for free at: http://is.gd/q2yQpg For the three months ended March 31, 2012, the Company incurred a net loss and comprehensive loss of US$8.83 million, compared with a net loss and comprehensive loss of US$14.95 million for the same period a year ago. A copy of the Q1 Report is available at: http://is.gd/wDMLcd The Company incurred a net loss and comprehensive loss of US$7.50 million for the six months ended June 30, 2012, compared with a net loss and comprehensive loss of US$10.14 million for the same period a year ago. A copy of the Q2 Report is available at: http://is.gd/QuaqCU For the three months ended Sept. 30, 2012, the Company incurred a net loss and comprehensive loss of US$6.56 million, compared with a net loss and comprehensive loss of US$8.61 million for the same period during the previous year. A copy of the Q3 Report is available at http://is.gd/bb7Jrt http://is.gd/wDMLcd The Company's balance sheet at Sept. 30, 2012, showed US$8.23 million in total assets, US$154.59 million in total liabilities and a US$146.35 million total shareholders' deficiency. About Crystallex Crystallex International Corporation is a Canadian based mining company, with a focus on acquiring, exploring, developing and operating mining projects. Crystallex has successfully operated an open pit mine in Uruguay and developed and operated three gold mines in Venezuela. The Company's principal asset is its international claim in relation to its investment in the Las Cristinas gold project located in Bolivar State, Venezuela. On Dec. 23, 2011, announced that it obtained an order from the Ontario Superior Court of Justice (Commercial List) for protection under the Companies' Creditors Arrangement Act (Canada) (CCAA). Ernst & Young Inc. was appointed monitor under the order. Crystallex has also commenced a proceeding under Chapter 15 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware in order to ensure that relevant CCAA orders are enforced in the United States. The Bankruptcy Court has recognized Crystallex's CCAA proceeding as well as the initial order and subsequent stay extension of the Ontario Superior Court of Justice. Following the Government of Venezuela's unilateral cancellation of the Las Cristinas Mine Operating Contract (the "MOC") on Feb. 3, 2011, the Company filed for arbitration before ICSID's Additional Facility and commenced the process of handing the Las Cristinas project back to the Government of Venezuela. The handover to the Government of Venezuela was completed on April 5, 2011, upon receipt of a certificate of delivery from the Corporacion Venezolana de Guayana (the "CVG"). As a result, the Company has determined that its operations in Venezuela should be accounted for as a discontinued operation. CUBIC ENERGY: To Appeal NYSE's Delisting Determination ------------------------------------------------------ Cubic Energy, Inc., has received a letter from the NYSE MKT LLC indicating that, based upon the Company's continued non-compliance with the stockholders' equity requirements for continued listing and the Exchange's concerns regarding the Company's financial viability with respect to maturing obligations, the Company's common stock is subject to delisting from the Exchange. The Company plans to file an appeal of the determination by requesting an oral hearing before the Listing Qualifications Panel of the Exchange's Committee on Securities, which request will stay the delisting determination until at least such time as the Panel renders a determination following the hearing. The Company is taking steps to address the deficiencies raised by the Exchange; however, there can be no assurance that the Company's appeal will ultimately be successful. The Company continues to work with Donohoe Advisory Associates LLC, along with its securities counsel, to advise and assist it in the preparation and presentation of information to and arguments before the Exchange. About Cubic Energy Cubic Energy, Inc., headquartered in Dallas, Tex., is an independent upstream energy company engaged in the development and production of, and exploration for, crude oil and natural gas. Its oil and gas assets and activities are concentrated in Louisiana. The Company said in its quarterly report for the period ended March 31, 2012, that, "Our debt to Wells Fargo, with a principal amount of $35,000,000, is due on July 1, 2012, and the Wallen Note, with a principal amount of $2,000,000, is due Sept. 30, 2012, and both are classified as a current debt. As of March 31, 2012, we had a working capital deficit of $33,162,110. This level of negative working capital creates substantial doubt as to our ability to pay our obligations as they come due and remain a going concern. We are negotiating with Wells Fargo and Mr. Wallen to extend the maturity date of these debts. There can be no assurance that the Company will be able to negotiate such extensions." Philip Vogel & Co. PC, in Dallas, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2012. The independent auditors noted that the Company has experienced recurring net losses from operations and has uncertainty regarding its ability to meet its loan obligations which raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $29.52 million in total assets, $39.45 million in total liabilities, all current, and a $9.92 million total stockholders' deficit. Bankruptcy Warning "While we commenced a formal process to pursue strategic alternatives, there can be no assurance that the process will result in any transaction, or that, even if a transaction is consummated that it will resolve our significant short-term liquidity issues," the Company said in its annual report for the year ended June 30, 2012. "Even if a potential transaction is announced, no assurances can be given that such potential transaction will have a positive effect on our stock price. Additionally, if a transaction is announced but is not consummated, our stock price may be adversely affected. Restructuring, refinancing or extending the payment date of our indebtedness likely will be necessary." The Company added, "We are continuing to discuss potential transactions with third parties and expect to engage in further discussions with our lenders regarding extensions of the repayment dates of our indebtedness. There can be no assurance that these discussions will lead to a definitive agreement on acceptable terms, or at all, with any party. Any transaction could be highly dilutive to existing stockholders. If we are unsuccessful in consummating a transaction or transactions that address our liquidity issues, we could be required to seek protection under the U.S. Bankruptcy Code." DEWEY & LEBOEUF: Wants Exclusivity Extended to March 31 ------------------------------------------------------- Dewey & LeBoeuf LLP asks the Bankruptcy Court to further extend its exclusive period to solicit acceptances of its Second Amended Plan, filed Jan. 7, 2013, through and including March 31, 2013, as a prophylactic measure in the unlikely event that an extension of the voting deadline is required. This is the Debtor's second extension request. Solicitation packages have been transmitted to the voting classes under the Plan and the hearing to consider confirmation of the plan is scheduled for Feb. 27, 2013. The Debtor says the requested extension will not jeopardize the rights of creditors and other parties, but is intended to develop and build consensus for its Chapter 11 Plan. About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension Benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. Dewey filed a Chapter 11 Plan of Liquidation and an accompanying Disclosure Statement on Nov. 21, 2012. It filed amended plan documents on Dec. 31, in an attempt to address objections lodged by various parties. A second iteration was filed Jan. 7, 2013. The plan is based on a proposed settlement between secured lenders and Dewey's official unsecured creditors' committee. It also incorporates a settlement approved by the bankruptcy court in October where 440 former partners will receive releases in return for $71.5 million in contributions. DEWEY & LEBOEUF: Can Access Cash Collateral Until March 3 --------------------------------------------------------- In a eight supplemental order dated Jan. 31, 2013, the U.S. Bankruptcy Court for the Southern District of New York further extended and modified the final order, dated June 13, 2012, authorizing Dewey & LeBoeuf LLP to use cash collateral of the collateral agent, revolving lenders and noteholders, through the earlier to occur of (a) 11:59 p.m. on the fifth day following the "termination declaration date", or (b) 11:59 p.m. on March 3, 2013. The "challenge period" as defined in the final cash collateral order is extended for an additional 30 days without prejudice. A copy of the Final Cash Collateral Order is available at: http://bankrupt.com/misc/dewey.doc91.pdf About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension Benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. Dewey filed a Chapter 11 Plan of Liquidation and an accompanying Disclosure Statement on Nov. 21, 2012. It filed amended plan documents on Dec. 31, in an attempt to address objections lodged by various parties. A second iteration was filed Jan. 7, 2013. The plan is based on a proposed settlement between secured lenders and Dewey's official unsecured creditors' committee. It also incorporates a settlement approved by the bankruptcy court in October where 440 former partners will receive releases in return for $71.5 million in contributions. DRINKS AMERICAS: St George Investments Holds 9.9% Equity Stake -------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, St George Investments LLC disclosed that, as of Jan. 2, 2013, it beneficially owns 2,516,274 shares of common stock of Drinks Americas Holdings, LTD, representing 9.9% of the shares outstanding. A copy of the filing is available at: http://is.gd/Fgegdh About Drinks Americas Headquartered in Wilton, Conn., Drinks Americas Holdings, Ltd. -- http://www.drinksamericas.com/-- through its majority-owned subsidiaries, Drinks Americas, Inc., Drinks Global, LLC, D.T. Drinks, LLC, and Olifant U.S.A Inc., imports, distributes and markets unique premium wine and spirits and alcoholic beverages associated with icon entertainers, celebrities and destinations, to beverage wholesalers throughout the United States. The Company reported a net loss of $4.58 million on $497,453 of net sales for the year ended April 30, 2011, compared with a net loss of $5.61 million on $890,380 of net sales during the prior year. After auditing the fiscal 2011 financial statements, Bernstein & Pinchuk, in New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses from operations since its inception and has a working capital deficiency. The Company's balance sheet at Oct. 31, 2012, showed $581,780 in total assets, $15.41 million in total liabilities and a $14.82 million total stockholders' deficit. DRINKS AMERICAS: De Joya Replaces Bernstein as Accountant --------------------------------------------------------- Drinks Americas Holdings, Ltd., dismissed Bernstein & Pinchuk LLP, effective as of Dec. 5, 2012, as the Company's independent registered public accounting firm, which dismissal was ratified by the Company's Board of Directors on Jan. 22, 2013. During the fiscal years ended April 30, 2012, and April 30, 2011, Bernstein's reports on the Company's financial statements did not contain an adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the fiscal years ended April 30, 2012, and April 30, 2011, and the subsequent interim periods through Dec. 5, 2012, (i) there were no disagreements between the Company and Bernstein on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the satisfaction of Bernstein, would have caused Bernstein to make reference to the subject matter of the disagreement in connection with its report on the Company's financial statements. As of Jan. 22, 2013, the Company's Board of Directors ratified the engagement of De Joya Griffith, LLC, as its independent registered public accounting firm for the Company's fiscal year ending April 30, 2013. During the years ended April 30, 2012 and April 30, 2011 and the subsequent interim periods through December 6, 2012, the date of engagement of De Joya, the Company did not consult with De Joya regarding either (i) the application of accounting principles to a specified transaction, either completed 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 (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S-K and the related instructions thereto) or a reportable event. About Drinks Americas Headquartered in Wilton, Conn., Drinks Americas Holdings, Ltd. -- http://www.drinksamericas.com/-- through its majority-owned subsidiaries, Drinks Americas, Inc., Drinks Global, LLC, D.T. Drinks, LLC, and Olifant U.S.A Inc., imports, distributes and markets unique premium wine and spirits and alcoholic beverages associated with icon entertainers, celebrities and destinations, to beverage wholesalers throughout the United States. The Company reported a net loss of $4.58 million on $497,453 of net sales for the year ended April 30, 2011, compared with a net loss of $5.61 million on $890,380 of net sales during the prior year. After auditing the fiscal 2011 financial statements, Bernstein & Pinchuk, in New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses from operations since its inception and has a working capital deficiency. The Company's balance sheet at Oct. 31, 2012, showed $581,780 in total assets, $15.41 million in total liabilities and a $14.82 million total stockholders' deficit. DRINKS AMERICAS: Amends Oct. 31 Form 10-Q to Add Explanation ------------------------------------------------------------ Drinks Americas Holdings, Ltd., has amended its quarterly report for the period ended Oct. 31, 2012, solely to add an explanatory note discussing the review process of the Company's independent registered public accounting firm over the Company's Quarterly Report which was filed with the Securities and Exchange Commission on Jan. 22, 2013. The Company has engaged De Joya Griffith, LLC, as its independent registered public accounting firm for the Company's fiscal year ending April 30, 2013. Moreover, on Jan. 25, 2013, the Company dismissed Bernstein & Pinchuk LLP, effective as of Dec. 5, 2012, as the Company's independent registered public accounting firm. Accordingly, the financial statements contained in the Quarterly Report were reviewed by De Joya. Bernstein did not take any part in the review of the Quarterly Report. No other part of the Quarterly Report was being amended. A copy of the Amended Form 10-Q is available at: http://is.gd/zmTLbq About Drinks Americas Headquartered in Wilton, Conn., Drinks Americas Holdings, Ltd. -- http://www.drinksamericas.com/-- through its majority-owned subsidiaries, Drinks Americas, Inc., Drinks Global, LLC, D.T. Drinks, LLC, and Olifant U.S.A Inc., imports, distributes and markets unique premium wine and spirits and alcoholic beverages associated with icon entertainers, celebrities and destinations, to beverage wholesalers throughout the United States. The Company reported a net loss of $4.58 million on $497,453 of net sales for the year ended April 30, 2011, compared with a net loss of $5.61 million on $890,380 of net sales during the prior year. After auditing the fiscal 2011 financial statements, Bernstein & Pinchuk, in New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses from operations since its inception and has a working capital deficiency. The Company's balance sheet at Oct. 31, 2012, showed $581,780 in total assets, $15.41 million in total liabilities and a $14.82 million total stockholders' deficit. DUNLAP OIL: Hiring Waterfall Economidis as Collections Counsel -------------------------------------------------------------- Dunlap Oil Company Inc. has filed papers in Bankruptcy Court seeking authority to employ a special collections counsel. Dunlap specifically has identified Steven J. Itkin, Esq. -- sitkin@wechv.com -- at Tuczon-Arizona-based Waterfall, Economidis, Caldwell, Hanshaw & Villamana, P.C., for the job. Waterfall Economidis will, among other things, provide Dunlap Oil with legal advice with respect to its rights and options on pending collection claims, state court actions and proceedings and other related or potential collection matters. About Dunlap Oil Company and Quail Hollow Inn Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, sought Chapter 11 protection (Bankr. D. Ariz. Case No. 12-23252 and 12-23256) on Oct. 24, 2012. Founded in 1958, Dunlap Oil is a Willcox, Arizona-based operator of 14 gasoline services stations. QOH owns the 89-room outside corridor Best Western Plus Quail Hollow hotel in Willcox. The two companies are owned and operated by the Dunlap family. Judge James M. Marlar presides over the case. John R. Clemency, Esq., and Lindsi M. Weber, Esq., at Gallagher & Kennedy, P.A., serve as the Debtors' counsel. Peritus Commercial Finance LLC serves as financial advisor. Quail Hollow Inn also hired Sally M. Darcy of McEvoy Daniels & Darcy P.C. for the limited purpose of handling any claims, issues, and/or disputes between QHI and Best Western International, Inc. The Debtors' lead counsel, Gallagher & Kennedy, P.A., has a conflict precluding its representation of the Debtor in matters relating to Best Western. QOH declared assets of at least $1 million and debts exceeding $10 million. DOC estimated assets and debts of $10 million to $50 million. The petitions were signed by Theodore Dunlap, president. Ilene J. Lashinsky, the U.S. Trustee for Region 14, has appointed three creditors to serve on an Official Committee of Unsecured Creditor for the Chapter 11 bankruptcy case of Dunlap Oil Company. The Committee tapped Nussbaum Gillis & Dinner, P.C. as its counsel. Pineda Grantor Trust II, successor-in-interest to Compass Bank, is represented by Steven N. Berger, Esq., and Bradley D. Pack, Esq., at Engelman Berger, P.C. Counsel to Canyon Community Bank NA are Jeffrey G. Baxter, Esq., Pat P. Lopez III, Esq., and Rebecca K. O'Brien, Esq., at Rusing Lopez & Lizardi PLLC. E-DEBIT GLOBAL: Restricted Stock Units Lock-Up Expires on Feb. 14 ----------------------------------------------------------------- E-Debit Global Corporation announced the release of a significant number of Restricted Stock Units under Rule 144 upon the expiration of the "lock-up" period on Feb. 14, 2013. "Lock-up expirations are significant corporate events especially when it represents 59% of the issued and outstanding shares of the company," advised Douglas Mac Donald, E-Debit's President and CEO. "The restricted shares were issued as a result of a debt settlement stock conversion of $145,000 in cash advanced loans to E-Debit subsidiaries particularly Westsphere Systems Inc. E- Debit's financial transaction processing "Switch" by two long-time shareholder investors 101105607 Saskatchewan Ltd. and Sundance Gold Ltd. and $90,000 payment of Investor Relations fees related to services rendered and to be rendered by E-Debit contracted Investor Relations firm Open Waters Investment Inc. The debt conversion was converted at $0.001 per share being greater than the previous five day average closing trading price as authorized by the Board of Directors on August 10, 2012. All three parties are holders of more than 10% of E-Debit's common stock." "While the number of shares is considerable there is no issue related to change of control of the company as a result of E- Debit's Board of Directors vote of the Company's preferred share position and I would encourage a review of E-Debits Form 10-Q filing for the period ended 9/30/2012 which can be assessed through our SEC filings available on the front page of our website and particularly in Note 13 on pages 19 and 20 of our quarterly report," added Mr. Mac Donald. "Further reductions of corporate debt for share conversion will be assessed by the Board on case by case basis upon receipt of request for conversion," Mr. Mac Donald stated. About E-Debit Global Corporation E-Debit Global Corporation (WSHE) is a financial holding company in Canada at the forefront of debit, credit and online computer banking. Currently, the Company has established a strong presence in the privately owned Canadian banking sector including Automated Banking Machines (ABM), Point of Sale Machines (POS), Online Computer Banking (OCB) and E-Commerce Transaction security and payment. E-Debit maintains and services a national ABM network across Canada and is a full participating member of the Canadian INTERAC Banking System. Following the 2011 results, Schumacher & Associates, Inc., in Littleton, Colorado, noted that the Company has incurred net losses for the years ended Dec. 31, 2011, and 2010, and had a working capital deficit and a stockholders' deficit at Dec. 31, 2011, and 2010, which raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $1.09 million in 2011, compared with a net loss of $1.15 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.82 million in total assets, $3.52 million in total liabilities, and a $1.70 million total stockholders' deficit. EASTBRIDGE INVESTMENT: Effects 1-for-100 Reverse Stock Split ------------------------------------------------------------ EastBridge Investment Group Corporation said that following the approval of its stockholders to change its state of incorporation from Arizona to Delaware on Thursday, Jan. 17, 2013, the Company filed a Certificate of Conversion with the Secretary of State of Delaware and, effective Jan. 18, 2013, is incorporated in Delaware. The Company changed its state of incorporation by means of a conversion pursuant to Section 265 of the Delaware General Corporation Law. In connection with the conversion, and pursuant to Section 265(j) of the DGCL, the Company elected to exchange its shares of common stock. The shares will be exchanged such that stockholders will receive one (1) share of the Company's Delaware's common stock, par value $0.001 per share, for every one hundred (100) shares of the Company's Arizona common stock, no par value. The exchange will be deemed effective on Thursday, Jan. 31, 2013. Keith Wong, Chairman and CEO of EastBridge Investment Group, stated, "We are pleased to announce the domicile change and reverse split as we continue to implement our strategic growth plan. We look forward to announcing additional achievements as we gain further traction toward building shareholder value." About EastBridge Investment Scottsdale, Arizona-based EastBridge Investment Group Corporation provides investment related services in Asia and in the United States, with a strong focus on the high GDP growth countries, such as China, Australia and the U.S. EastBridge is one of a small group of United States companies solely concentrated in marketing business consulting services to closely held, small to mid-size Asian and American companies that require these services for expansion. Tarvaran Askelson & Company, LLP, in Laguna Niguel, California, expressed substantial doubt about EastBridge Investment's ability to continue as a going concern, following its audit of the Company's financial statements for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred significant losses and that the Company's viability is dependent upon its ability to obtain future financing and the success of its future operations. The Company's balance sheet at Sept. 30, 2012, showed $6.7 million in total assets, $4.5 million in total liabilities, and stockholders' equity of $2.2 million. EASTMAN KODAK: Completes $527-Mil. Sale of Digital Imaging Patents ------------------------------------------------------------------ Eastman Kodak Company has completed a transaction for the sale and licensing of its digital imaging patents for net proceeds of $527 million. The transaction, which achieves one of Kodak's key restructuring objectives, follows other recent major accomplishments that include final Court approval for the company's interim and exit financing. Kodak's monetization of IP assets further builds on its momentum toward emergence in mid-2013. A portion of the $527 million was paid by 12 intellectual property licensees organized by Intellectual Ventures and RPX Corporation. Another portion was paid by Intellectual Ventures, which acquired a substantial majority of the digital imaging patent portfolio subject to these new licenses, as well as previously existing licenses. "The licensing and sale of our digital imaging patents is another major milestone toward successful emergence," Antonio M. Perez, Chairman and Chief Executive Officer, said. "We are on track to emerge as a profitable, sustainable company." The completion of the sale enables Kodak to repay a substantial amount of its initial DIP loan, satisfy a key condition for its newly approved financing facility, and position its core Commercial Imaging business for future growth and success. Kodak retains significant competitive advantages and strong growth prospects in its core Commercial Imaging businesses. In addition to retaining rights to use the 1,100 digital imaging patents sold in the transaction, Kodak maintains ownership of about 9,600 patents, including many focused on its core business. The transaction includes an agreement to settle current patent- related litigation between the participants and Kodak, which avoids additional litigation costs and helps to ensure that management and the company's resources focus on enhancing core operations. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak intends to reorganize by focusing on the commercial printing business. Other businesses are being sold or shut down. EL CENTRO: Unsecureds to Recover 20.5% Under Amended Plan --------------------------------------------------------- El Centro Motors filed on Dec. 17, 2012, a First Amended Disclosure Statement describing its First Amended Plan of Reorganization. Under the Plan, the Ford Credit Term Loan (Class 1) will be refinanced by Ford Credit and the amount of the refinanced Ford Credit Term Loan will be increased to not more than $4,440,000. The incremental funds will be used to retire the Ford Credit Revolving Loan in the current amount of approximately $331,000. The Refinanced Ford Credit Term Loan will have a term of 60 months and will be amortized over a period of 180 months with interest to accrue at a rate of the 30-day LIBOR as of the Effective Date plus 4.60%. Class 1 under the Plan is impaired and is entitled to vote on the Plan. The Ford Credit Revolving Loan (Class 2) will be repaid in full pursuant to the Refinanced Ford Credit Term Loan. Class 2 under the Plan is impaired and is entitled to vote on the Plan. The existing terms of the Ford Credit Flooring Line (Class 3) will not be modified. Class 3 under the Plan is not impaired and will not be entitled to vote on the Plan. The terms of the Community Valley Bank Loan (Class 4) will remain the same as the present terms of the CVB Loan. Class 4 is not impaired and will not be entitled to vote on the Plan. Holders of non-priority general unsecured claims (Class 5) will receive: * an initial cash payment from the Reorganized Debtor within 30 days following the Effective Date, which the Debtor estimates will total approximately $440,000. * annual payments from the Reorganized Debtor, commencing Jan. 15, 2014, in the amount of $150,000, for a period of 4 years, for total payments (including the initial cash payment) of 1,040,000. * a pro rata distribution of any net recoveries obtained from the pursuit of avoidance causes of actions pursued after confirmation of the Plan. Total cash payment to Class 5 claim holders will be 20.5% of the amount of their allowed claims. Earl Cavanah, a prior shareholder of the Debtor and a guarantor of the Ford Credit Term Loan, the Ford Credit Revolving Loan and the CVB Loan, has agreed to waive his right to a distribution on account of hits general unsecured claims against the Debtor. With respect to current existing equity interests in the Debtor (Class 6), in exchange for retaining their existing equity interests in the Debtor, and in exchange for new equity interests in the Reorganized Debtor, Dennis Nesselhauf, Robert Valdes, and Mr. Cavanah will contribute, in total, $400,000 of cash to the Debtor with such cash to be used to fund the Plan. Additionally, on the Effective Date of the Plan, Mr. Nesselhauf will pay $110,000 to the Debtor in full settlement and satisfaction of the Debtor's preference claims against Mr. Nesselhauf, which have been asserted to be in the sum of $110,000. A copy of the First Amended Disclosure Statement is available at: http://bankrupt.com/misc/elcentro.doc147.pdf About El Centro Motors El Centro Motors, dba Mighty Auto Parts, operates a Ford-Lincoln automobile dealership in El Centro, California. It filed a Chapter 11 petition (Bankr. S.D. Calif. Case No. 12-03860) on March 21, 2012, listing $10 million to $50 million in assets and debts. Chief Judge Peter W. Bowie presides over the case. Krifor Meshefajian, Esq., at Levene, Neale, Bender, Yon & Brill LLP, serves as counsel. GlassRatner Advisory & Capital Group, LLC, is the Debtor's proposed financial advisor and investment banker The prior owner of the dealership operated the business since 1932. The business is presently owned by Dennis Nesselhauf and Robert Valdes. The Debtor claims that its assets, which include the property constituting the dealership in El Centro, and new and used vehicles, have a value of $14 million. The Debtor owes Ford Motor Credit Company $4.3 million on a term-loan secured by a first priority deed of trust against the El Centro property, 380,000 on a revolving credit line, and $6 million on a flooring line of credit used to purchase vehicle inventory. The Debtor also owes $1.03 million to Community Valley Bank, which loan is secured by a second priority deed of trust against the property. In addition to $3.95 million arbitration award owed to Dealer Computer Systems, Inc., the Debtor owes $3 million in unsecured debt. According to a court filing, the dealership generally operated at a profit, until it suffered the same economic setbacks suffered by dealerships across the country. In 2007, the Debtor suffered an $806,000 loss; in 2008, it had a $4.5 million loss, and in 2009, it suffered a $957,000 loss. Dealer Computer Services, which provided the dealer management system, obtained in November 2001, an arbitration award in the amount of $3.95 million, following a breach of contract lawsuit it filed against the Debtor. DCS has commenced collection efforts attempting to levy the Debtor's bank accounts and place liens on its assets. The Debtor filed for bankruptcy to preserve and maximize the Debtor's estate for the benefit of creditors, to provide the Debtor a reprieve from highly disruptive and financially detrimental collection efforts, and to provide the Debtor an opportunity to reorganize its financial affairs in as efficient a manner as possible. The Debtor disclosed at least $8,332,571 in total assets and $19,624,057 liabilities as of the Chapter 11 filing. ENERGY FUTURE: Reports Final Results & Exchange Offers Settlement ----------------------------------------------------------------- Energy Future Holdings Corp. announced (a) the final results and settlement of the offers of its direct, wholly-owned subsidiary, Energy Future Intermediate Holding Company LLC, and EFIH's direct, wholly-owned subsidiary, EFIH Finance Inc., to exchange up to approximately $1.3 billion aggregate principal amount of new 10.000% Senior Secured Notes due 2020 of the Offerors for any and all outstanding (i) 9.75% Senior Secured Notes due 2019 of EFH Corp., (ii) 10.000% Senior Secured Notes due 2020 of EFH Corp. and (iii) 9.75% Senior Secured Notes due 2019 of the Offerors and (b) the final results of the concurrent solicitations by EFH Corp. and the Offerors of consents from holders of Old First Lien Notes to proposed amendments to the indentures governing the Old First Lien Notes and to those Old First Lien Notes. EFH Corp. also announced the final results and settlement of the Offerors' previously announced offers to exchange up to approximately $124 million aggregate principal amount of new 11.25%/12.25% Senior Toggle Notes due 2018 of the Offerors for any and all outstanding (i) 10.875% Senior Notes due 2017 of EFH Corp. and (ii) 11.250%/12.000% Senior Toggle Notes due 2017 of EFH Corp. The Consent Solicitations and the Exchange Offers expired at 5:00 p.m., New York City time, on Jan. 24, 2013. As of the Expiration Date, EFH Corp. and the Offerors had received the requisite consents to adopt the Proposed Amendments, and on Jan. 25, 2013, EFH Corp. and the Offerors entered into supplemental indentures to the indentures governing the Old First Lien Notes to give effect to the Proposed Amendments. Title of Old Notes: 9.75% Senior Secured Notes due 2019 Amount Outstanding: $115,446,000 Amount Tendered : $112,988,000 Percentage : 97.87% Title of Old Notes: 10.000% Senior Secured Notes due 2020 Amount Outstanding: $1,060,757,000 Amount Tendered : $1,057,656,000 Percentage : 99.71% Title of Old Notes: 9.75% Senior Secured Notes due 2019 Amount Outstanding: $141,083,000 Amount Tendered : $139,068,000 Percentage : 98.57% Title of Old Notes: 10.875% Senior Notes due 2017 Amount Outstanding: $64,135,000 Amount Tendered : $30,876,000 Percentage : 48.14% Title of Old Notes: 11.250%/12.000% Senior Toggle Notes due 2017 Amount Outstanding: $60,329,699 Amount Tendered : $33,406,721 Percentage : 55.37% In accordance with the terms and conditions of the Exchange Offers, EFH Corp. and the Offerors have accepted all of the Old Notes that were validly tendered for exchange. The Exchange Offers settled on January 29, 2013. On January 29, 2013, the Offerors issued $1,302,106,000 aggregate principal amount of their 10.000% Senior Secured Notes due 2020 in connection with the First Lien Exchange Offers and $63,930,000 aggregate principal amount of their 11.25%/12.25% Senior Toggle Notes due 2018 in connection with the Unsecured Exchange Offers. Additional information is available for free at: http://is.gd/kvgtFt About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. Energy Future had a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $42.73 billion in total assets, $51.90 billion in total liabilities and a $9.16 billion total deficit. * * * As reported by the TCR on Aug. 15, 2012, Moody's downgraded the Corporate Family Rating (CFR) of EFH to Caa3 from Caa2 and affirmed its Caa3 Probability of Default Rating (PDR) and SGL-4 Speculative Grade Liquidity Rating. The downgrade of EFH's CFR to Caa3 from Caa2 reflects the company's financial distress and limited financial flexibility. As reported by the TCR on Dec. 7, 2012, Fitch Ratings has lowered the Issuer Default Rating (IDR) of EFH to 'Restricted Default' (RD) from 'CC'. Fitch Ratings has deemed the recently concluded exchange offer to exchange a portion of the LBO notes and legacy notes at Energy Future Holdings Corp (EFH) for new 11.25%/12.25% senior toggle notes due 2018 at Energy Future Intermediate Holding Company LLC (EFIH) as a distressed debt exchange (DDE). In the Dec. 28, 2012, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit ratings on EFIH, TCEH, and EFCH to 'CC' from 'CCC'. "We lowered to 'CC' from 'CCC' our corporate credit rating on EFH subsidiary EFCH. EFCH guarantees TCEH's senior secured debt (which includes the revolver) and so falls to 'CC' along with TCEH," S&P said. ENERGY FUTURE: S&P Raises Corporate Credit Rating to 'CCC' ---------------------------------------------------------- In a February 1, 2013 ratings release, Standard & Poor's Ratings Services said it raised its corporate credit ratings on EFH, EFIH, TCEH, and Energy Future Competitive Holdings Co. (EFCH) to 'CCC' from 'D' following the completion of several debt exchanges, each of which we consider distressed. There are no rating actions at EFH's regulated subsidiary, Oncor Electric Delivery Co. LLC. Previously, in a January 31, 2013 ratings release, S&P lowered its corporate credit ratings on EFIH, TCEH, and Energy Future Competitive Holdings Co. (EFCH) to 'SD' from 'CC' following the completion of several debt exchanges. S&P also lowered ratings on certain of the debt instruments subject to the exchange to 'D' from 'CC'. These rating changes reflect S&P's distressed debt exchange criteria. The debt instruments subject to the distressed exchange include: -- EFH's 10% senior secured notes due 2020, -- EFH's 9.75% senior secured notes due 2019, -- EFIH's 9.75% senior secured notes due 2019, -- EFH's 10.875% senior cash pay notes due 2017, -- EFH's 11.25%/12.25% senior toggle notes due 2017, and -- TCEH's $645 million senior secured revolving credit facility due 2013. Subsequently, in its Feb. 1 release, S&P said that at EFH, it raised the rating on the small remaining 10% senior secured notes due 2020 and 9.75% senior secured notes due 2019 to 'CC' and revised the recovery rating to '6' from '1' and affirmed the 'D' rating and '6' recovery score on the 10.875% senior cash pay notes due 2017 and EFH's 11.25%/12.25% senior toggle notes due 2017. At EFIH, S&P raised the rating on the small remaining 9.75% senior secured notes due 2019 to 'CC' and revised the recovery rating to '6' from '1'. The decline in the recovery score for the small amount of EFH and EFIH senior secured notes remaining after the exchange is due to the removal of the collateral on these securities under the exchange agreement. At TCEH, S&P raised the rating on the $1.409 billion senior secured revolving credit facility due 2016 to CCC' from 'CC' and left unchanged the '3' recovery rating. "The 'CCC' rating reflects a credit profile that has an unsustainable capital structure over the long term, but a lack of near-term maturities, along with the likelihood of additional distressed exchange over the near term," said Standard & Poor's credit analyst Terry Pratt. The numerous distressed debt exchanges over the past few weeks reflect EFH's various strategies to deal with refinancing risk at TCEH of about $3.8 billion in senior secured credit facilities due October 2014, $3.2 billion in senior unsecured debt due in November 2015, and about $15.7 billion in senior secured credit facilities due in 2017. Exchanges at the EFH level have helped to reduce debt, move most debt to its subsidiary EFIH, and build liquidity by foregoing interest payments through the increased issuance of the EFIH toggle notes to fund most of the exchange. The TCEH exchange of the senior secured revolving credit facility portion due 2013 is a liquidity play, with the offer to extend made after it was fully drawn from a zero or low balance. The overall outlook for credit at the companies is negative. Cash flow from the TCEH's Luminant wholesale generation unit, which provides most cash flow, is currently supported by hedges put in place years ago, but these legacy hedges will begin to roll off later in 2013, creating greater exposure to weak power market conditions in late 2013 and more so in 2014. The robust production of natural gas from shale fields will likely continue to keep power prices low over the forecast period. A significant increase in power prices either through a material rise in natural gas prices or market heat rates is required to help mitigate refinance risk in 2014 and 2015 and beyond. Given that such a development on the natural gas side seems remote, the company may focus on extending 2014 and 2015 maturities outward through exchange offers. ENERGYSOLUTIONS INC: BlackRock Discloses 6.1% Equity Stake ---------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that, as of Dec. 31, 2012, it beneficially owns 5,503,717 shares of common stock of EnergySolutions Inc. representing 6.10% of the shares outstanding. A copy of the filing is available at http://is.gd/b3Vb22 About EnergySolutions, Inc. EnergySolutions offers customers a full range of integrated services and solutions, including nuclear operations, characterization, decommissioning, decontamination, site closure, transportation, nuclear materials management, the safe, secure disposition of nuclear waste, and research and engineering services across the fuel cycle. The Company's balance sheet at Sept. 30, 2012, showed $2.85 billion in total assets, $2.54 billion in total liabilities, and $311.77 million in total stockholders' equity. * * * As reported by the TCR on June 18, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on Salt Lake City- based EnergySolutions Inc. and its subsidiaries by two notches to 'B' from 'BB-'. "The downgrade reflects weakening credit metrics and the added uncertainty stemming from the unexpected change in management since the company's strategic and financial priorities are now less clear," said Standard & Poor's credit analyst James Siahaan. EMORY HACKMAN: Fountain Group et al. Hit With $2MM Judgment ----------------------------------------------------------- Bankruptcy Judge Brian F. Kenney granted a motion for default judgment against defendants in the lawsuit, EMORY E. HACKMAN, et al. Plaintiffs v. FOUNTAIN GROUP COMPANIES OF UTAH, INC., et al. Defendants, Adv. Proc. No. 11-01689 (Bankr. E.D. Va.). All of the Plaintiffs' claims arise out of a prepetition scheme to defraud them, the ostensible purpose of which was the development and construction of a commercial shopping center in Gainesville, Virginia. Judge Kenney said the case is a non-core, or related proceeding, as it involves the collection of prepetition debts owed to the Debtor, which is to say, claims that do not depend on the bankruptcy for their existence and that could have been brought in a non-bankruptcy forum absent the bankruptcy filing. The adversary proceeding originally was filed as a Complaint in the U.S. District Court for the Eastern District of Virginia, styled Gainesville Commerce Center, LLC, et al. v. Fountain Group Companies of Utah, Inc., et al., Civil No. 1:11-cv-1154. On December 16, 2011, the District Court referred the matter to the Bankruptcy Court. At the behest of the Plaintiffs -- Mr. Hackman, Gainesville Commerce Center, LLC, and the Mary Cook Hackman Arlington Trust -- Judge Kenney granted default judgment against defendants Walter Ross, Ross Pacific Trading Company, Edmund E. Wilson and Fountain Group Companies of Utah, Inc., "jointly and severally, as follows: A. $2,031,000, with pre-judgment, simple interest at the rate of 72% per annum on the following amounts, from these dates, through the entry of a final Judgment Order: $150,000 3/1/2008 $300,000 3/1/2008 $30,000 4/24/2008 $15,000 8/1/2008 $50,000 8/12/2008 $110,000 9/17/2008 $8,000 9/26/2008 $5,000 10/14/2008 $5,000 10/24/2008 $4,000 11/18/2008 B. Post-judgment simple interest will accrue on the judgment amount of $2,031,000 (but not on the pre-judgment interest amounts) at the federal judgment rate from the date of the entry of the final Judgment Order, until paid, pursuant to 28 U.S.C. Sec. 1961. C. The Plaintiffs' request for punitive damages be denied. D. Pursuant to Bankruptcy Rule 7054 (incorporating Fed. R. Civ. P. 54(b)), the Court finds that there is no just reason for a delay, and recommends the entry of a judgment against the Defendants be final, notwithstanding the fact that the Plaintiffs' claims against Mr. Wilson remain pending. E. The Defendants are notified that Rule 9033(b) provides as follows: Objections: Time for Filing. Within 14 days after being served with a copy of the proposed findings of fact and conclusions of law a party may serve and file with the clerk written objections which identify the specific proposed findings or conclusions objected to and state the grounds for such objection. A party may respond to another party's objections within 14 days after being served with a copy thereof. A party objecting to the bankruptcy judge's proposed findings or conclusions shall arrange promptly for the transcription of the record, or such portions of it as all the parties may agree upon or the bankruptcy judge deems sufficient, unless the district judge otherwise directs. A copy of the Court's Jan. 29, 2013 Report and Recommendation is available at http://is.gd/Yg8ZYvfrom Leagle.com. Emory E. Hackman, Jr., filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 10-17176) in 2010. EPICEPT CORP: Has 106.9 Million Outstanding Common Shares --------------------------------------------------------- EpiCept Corporation had 106,957,876 shares of its common stock outstanding as of Jan. 31, 2013. In January 2013, all 1,065 shares of EpiCept's Series B Preferred Stock were converted into approximately 13.3 million shares of its Common Stock. About EpiCept Corporation Tarrytown, N.Y.-based EpiCept Corporation (Nasdaq and Nasdaq OMX Stockholm Exchange: EPCT) -- http://www.epicept.com/-- is focused on the development and commercialization of pharmaceutical products for the treatment of cancer and pain. The Company's lead product is Ceplene(R), approved in the European Union for the remission maintenance and prevention of relapse in adult patients with Acute Myeloid Leukemia (AML) in first remission. In the United States, a pivotal trial is scheduled to commence in 2011. The Company has two other oncology drug candidates currently in clinical development that were discovered using in-house technology and have been shown to act as vascular disruption agents in a variety of solid tumors. The Company's pain portfolio includes EpiCept(TM) NP-1, a prescription topical analgesic cream in late-stage clinical development designed to provide effective long-term relief of pain associated with peripheral neuropathies. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Deloitte & Touche LLP, in Parsippany, New Jersey, noted that the Company's recurring losses from operations and stockholders' deficit raise substantial doubt about its ability to continue as a going concern. Epicept reported a net loss of $15.65 million in 2011, a net loss of $15.53 million in 2010, and a net loss of $38.81 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $2.86 million in total assets, $16.03 million in total liabilities and a $13.16 million in total stockholders' deficit. EV AMERICA: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: EV America, LLC P.O. Box 28450 Chattanooga, TN 37424-8450 Bankruptcy Case No.: 13-10441 Chapter 11 Petition Date: January 30, 2013 Court: United States Bankruptcy Court Eastern District of Tennessee (Chattanooga) Judge: Shelley D. Rucker Debtor's Counsel: Kyle R. Weems, Esq. WEEMS & RONAN Suite 520 744 McCallie Avenue Chattanooga, TN 37403 Tel: (423) 624-1000 E-mail: weemslaw@earthlink.net Scheduled Assets: $5,167,339 Scheduled Liabilities: $2,389,395 A copy of the company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/tneb13-10441.pdf The petition was signed by Albert E. Curtis, III, managing member. FAIRFAX COUNTY: S&P Lowers Rating on Series 1998A Bonds to 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered to 'B' from 'B+' its long-term rating on Fairfax County Redevelopment & Housing Authority, Va.'s multifamily housing revenue bonds, series 1998A (Castel Lani Project). The bonds are secured by a mortgage loan that is insured by the Federal Housing Administration under Section 266 of the Housing and Community Development Act of 1992 (Risk Share Program). The outlook is negative. "The rating reflects our view of the continued insufficiency of funds to meet timely debt service requirements based on our current stressed reinvestment rate assumptions as set forth in the related criteria articles, as well as of cash flows projecting multiple taps on the debt service reserve fund beginning in 2019," said Standard & Poor's credit analyst Adam Cray. Standard & Poor's lowered its rating on the issue to 'B+' from 'AAA' in October 2010 due to projected shortfalls in the issue's debt service reserve fund occurring within nine years. As of Jan. 28, 2013, such shortfalls are projected to occur within six years. FAIRPOINT COMMUNICATIONS: S&P Rates $725MM Loans, $300MM Notes 'B' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' issue-level rating and '3' recovery rating to Charlotte, N.C.-based incumbent local exchange carrier (ILEC) FairPoint Communications Inc.'s proposed $650 million senior secured term loan B, $75 million revolving credit facility, and $300 million of secured notes. The company will use proceeds to repay borrowings under its existing bank loan, which currently totals about $950 million. At the same time, S&P revised the outlook on FairPoint to stable from negative and affirmed the 'B' corporate credit rating. "The outlook revision reflects our expectation that the company will achieve modest free operating cash flow [FOCF] for 2012 and beyond, given some margin improvement already achieved over the past year due to cost-cutting efforts, and our expectation that additional cost-saving measures will result in further improvement in profitability metrics over the next few years," said Standard & Poor's credit analyst Catherine Cosentino. Additionally, we expect the company to achieve FOCF positive results in 2012 and beyond on a consistent basis as capital expenditure levels begin to decline with completion of the company's broadband upgrades in New England. The rating on FairPoint continues to reflect a "highly leveraged" financial risk profile and "vulnerable" business risk profile. Key business risk factors include its elevated access-line losses, including a loss of 7.8% for the third quarter of 2012 on a year- over-year basis. Leverage remains high, and totaled 6.4x for the 12 months ended Sept. 30, 2012 (including S&P's operating lease and unfunded pension and other postretirement benefits [OPEB] adjustments). Moreover, given the potential for some re-measurement of the company's pension and OPEB liability for 2012, in line with other companies' recent practices, S&P believes that leverage will remain above 6x for 2013. The rating outlook is stable. S&P expects FairPoint to maintain reported EBITDA margins of at least 23% for full-year 2013, adjusted for stock compensation, with potential for some margin improvement thereafter. Maintenance of the ratings also incorporates S&P's expectation that the company will be able to achieve at least modest levels of FOCF for 2013 and beyond as regulatory commitments related to high speed broadband footprint expansion are completed and the effect of cost cutting initiatives is fully realized. Competitors' efforts to gain broadband residential and business customers in FairPoint's markets could lead to additional pricing pressures, which could hinder margin improvement or lead to an actual degradation in margins from current levels. Such adverse trends, which would likely be accompanied by revenue declines of more than the mid-single-digit area, would reduce EBITDA headroom under financial maintenance covenants and would likely lead to a downgrade. An EBITDA margin decline to below 20% would likely contribute to such a downgrade scenario. Given leverage levels in the 6x area anticipated over at least the next few years, S&P considers an upgrade to be unlikely over the next year. FIROOZHE A. ZAFARI: Former Counsel Agrees to Cut Fee by $30K ------------------------------------------------------------ Bankruptcy Judge Thomas J. Catliota gave his stamp of approval on a stipulation and consent order regarding the application of Richard H. Gins, Esq., former counsel to debtor, Firoozhe A. Zafari, for allowance of compensation. On Nov. 16, 2012, The Law Office of Richard H. Gins filed and served an Application for Allowance of Compensation for the period from Nov. 30, 2009 through and including May 8, 2012, requesting approval of compensation in the amount of $56,475.83 and no reimbursement of expenses. Due to the Debtor's financial difficulties as expressed by the Debtor and the United States Trustee, Richard Gins has agreed to reduce the requested compensation by $30,475.83 to $26,000, and on that basis, the Office of the United States Trustee supports the Application. Accordingly, Judge Catliota approved the Fee Application as revised, and awarded Richard Gins $26,000 in compensation. A copy of the Stipulation dated Jan. 31, 2013 is available at http://is.gd/B8CklPfrom Leagle.com. The Debtor is represented by Sheila Durant, Esq. -- durantsheila@gmail.com -- in Bethesda. Trial Attorney Leander D. Barnhill, Esq. -- leander.d.barnhill@usdoj.gov -- appeared on behalf of U.S. Trustee W. Clarkson McDow, Jr. Richard H. Gins may be reached at richard@ginslaw.com Firoozhe A. Zafari, based in Gaithersburg, Maryland, filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 09-18537) on May 12, 2009, estimating $1 million to $10 million in both assets and debts. Judge Thomas J. Catliota oversees the case. A copy of the petition, including a list of the 18 largest unsecured creditors, is available for free at http://bankrupt.com/misc/mdb09-18537.pdf FIRST BALDWIN BANCSHARES: To File for Chapter 11 to Sell Bank ------------------------------------------------------------- Executives of The First Bancshares, Inc. on Jan. 31 disclosed that The First Bancshares, Inc. has entered into a definitive agreement to acquire First National Bank of Baldwin County. The First (a national banking association, a subsidiary of First Bancshares, Inc.) President & CEO M. Ray "Hoppy" Cole Jr., said, "From day one our focus has been on growing our bank in the gulf coast region, and providing customers a true community bank with personal service. We are excited about expanding our services to south Alabama and growing with this dynamic area." The definitive agreement will expand The First across the gulf coast providing five new branches and our customers a total of 23 convenient locations from Mississippi, Louisiana to south Alabama. Upon completion of the transaction the First will grow to approximately $905 million in assets and approximately $780 million in deposits. W. Wade Neth, President & CEO of First National Bank of Baldwin County, said, "We look forward to joining The First team in continuing the tradition of providing great personal customer service, community-oriented banking products and services, and the local business market experience through our longtime professional bankers. By combining our resources, we'll have even greater opportunities to serve the credit needs of our local businesses and individuals." Part of the acquisition process involves the First National Bank of Baldwin County's holding company First Baldwin Bancshares Inc. filing for reorganization under Chapter 11 of the bankruptcy court. This plan of reorganization will have NO effect on the operations of First National Bank of Baldwin County, or any impact on its bank customers or depositors, and clears the way for First Bancshares to complete the acquisition subject to regulatory approval. Safe, sound, quality growth is the major component of The First's business strategy. And, that is why even in the midst of the most turbulent economic times, The First has continued to achieve 52 consecutive quarters of profitability. It is because of this commitment that The First earned a 5 Star Rating (the highest given) by Bauer Financial, "the nation's bank rating service." In Cole's words, "Our Company is profitable, well-capitalized, and liquid. We are well positioned for future growth and for further acquisition opportunities that may arise. We will continue to follow the guiding principles as set out by our founders, focusing on customer service, building relationships, and expanding our market share in south Mississippi, Alabama and Louisiana." Advisors Chaffe & Associates, Inc. with Jonathan W. Briggs as lead investment banker, acted as financial advisor to The First, and Dover Dixon Horne PPLC, with lead attorney Garland W. Binns, Jr., Esq. and Forshey Prostok, LLP, with lead attorney Jeff Prostok, Esq., acted as its legal advisors. Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP with lead attorneys Michael D. Waters, Esq. and C. Ellis Brazeal, III, Esq. acted as legal advisor to First National Bank of Baldwin County. About The First Bancshares, Inc. Headquartered in Hattiesburg, Miss., The First Bancshares, Inc., - - http://www.TheFirstBank.com--is the parent company of The First, A National Banking Association. Founded in 1996 near Hattiesburg, Mississippi The First has grown rapidly through south Mississippi and Louisiana providing services competitive to those found at larger regional banks. The First has approximately $720 million in assets and currently has 18 locations operating in south Mississippi and Louisiana. The company's stock is traded on Nasdaq Global Market under the symbol FBMS. About First National Bank of Baldwin County Headquartered in Foley, Alabama, First National Bank of Baldwin County, -- http://www.firstbaldwin.com-- has approximately $185 million in assets and serves Baldwin County, Alabama through five locations operating in Foley, Daphne, Fairhope, Gulf Shores, and Orange Beach, AL, as well as a loan production office in Bay Minette, AL. FIRST DATA: Plans to Offer $785 Million of Senior Unsecured Notes ----------------------------------------------------------------- First Data Corporation intends to offer $785 million aggregate principal amount of senior unsecured notes due 2021, subject to market conditions. First Data intends to use the proceeds from the offering to repurchase any and all of its outstanding 10.55% PIK senior unsecured notes due 2015 and to pay related fees and expenses. The Notes have not been registered under the Securities Act of 1933, as amended, and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws. About First Data Based in Atlanta, Georgia, First Data Corporation provides commerce and payment solutions for financial institutions, merchants, and other organizations worldwide. For the 12 months ended Dec. 31, 2012, the Company incurred a net loss attributable to the Company of $700.9 million, compared with a net loss attributable to the Company of $516.1 million during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $37.89 billion in total assets, $35.20 billion in total liabilities, $67.4 million in redeemable noncontrolling interest, and $2.62 billion in total equity. * * * The Company's carries a 'B3' corporate family rating, with a stable outlook, from Moody's Investors Service, a 'B' corporate credit rating, with stable outlook, from Standard & Poor's, and a 'B' long-term issuer default rating from Fitch Ratings. FREESEAS INC: Fully Satisfies Obligations to Hanover ---------------------------------------------------- The Supreme Court of the State of New York, County of New York, on Jan. 14, 2013, entered an order approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, in accordance with a stipulation of settlement between FreeSeas Inc., and Hanover Holdings I, LLC, in the matter entitled Hanover Holdings I, LLC v. FreeSeas Inc., Case No. 654474/2012. Hanover commenced the Action against the Company on Dec. 21, 2012, to recover an aggregate of $305,485 of past-due accounts payable of the Company, plus fees and costs. The Settlement Agreement became effective and binding upon the Company and Hanover upon execution of the Order by the Court on Jan. 14, 2013. As previously reported, pursuant to the terms of the Settlement Agreement approved by the Order, on Jan. 15, 2013, the Company issued and delivered to Hanover 1,375,000 shares of the Company's common stock, $0.001 par value, on Jan. 18, 2013, the Company issued and delivered to Hanover 400,000 additional shares of Common Stock, and on Jan. 29, 2013, the Company issued and delivered to Hanover 82,846 additional shares of Common Stock, totaling 1,857,846 shares of Common Stock. On Jan. 31, 2013, the Court entered an order approving an amendment to the Settlement Agreement reducing the "True-Up Period" from 35 trading days following the date the Initial Settlement Shares were issued to four trading days following the date the Initial Settlement Shares were issued. As a result, the True-Up Period expired on Jan. 22, 2013. Accordingly, the total number of shares of Common Stock issuable to Hanover pursuant to the Settlement Agreement, as amended, is 1,857,846, which number is equal to the quotient obtained by dividing (i) $305,485 by (ii) 70% of the VWAP of the Common Stock over the four-trading day period following the date of issuance of the Initial Settlement Shares, rounded up to the nearest whole share. All of such 1,857,846 shares of Common Stock had been issued to Hanover prior to the amendment of the Settlement Agreement. Accordingly, no further shares of Common Stock are issuable to Hanover pursuant to the Settlement Agreement, as amended, and Hanover is not required to return any shares of Common Stock to the Company for cancellation. About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. As reported in the Troubled Company Reporter on July 18, 2012, Ernst & Young (Hellas) Certified Auditors Accountants S.A., in Athens, Greece, expressed substantial doubt about FreeSeas' ability to continue as a going concern, following its audit of the Company's financial statements for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. "In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements with banks." The Company's balance sheet at June 30, 2012, showed US$120.8 million in total assets, US$104.1 million in total current liabilities, and shareholders' equity of US$16.7 million. FREESEAS INC: Issues Add'l 400,000 Settlement Shares to Hanover --------------------------------------------------------------- FreeSeas Inc. issued an additional 400,000 shares of the Company's common stock, $0.001 par value, to Hanover Holdings I, LLC, pursuant to the terms of a settlement agreement approved by the Court on Jan. 14, 2013. The Supreme Court of the State of New York, County of New York, on entered an order approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, in accordance with a stipulation of settlement between FreeSeas Inc., and Hanover Holdings I, LLC, in the matter entitled Hanover Holdings I, LLC v. FreeSeas Inc., Case No. 654474/2012. Hanover commenced the Action against the Company on Dec. 21, 2012, to recover an aggregate of $305,485 of past-due accounts payable of the Company, plus fees and costs. The Settlement Agreement became effective and binding upon the Company and Hanover upon execution of the Order by the Court on Jan. 14, 2013. On Jan. 15, 2013, the Company issued and delivered to Hanover 1,375,000 shares of the Company's common stock. A detailed copy of the Form 6-K is available for free at: http://is.gd/06laXn Schedule 13G Filing In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Hanover Holdings I, LLC, and Joshua Sason disclosed that, as of Jan. 17, 2013, they do not beneficially own any shares of common stock of FreeSeas Inc. Hanover Holdings and Mr. Sason previously reported beneficial ownership of 1,375,000 common shares or a 8.37% equity stake as of Jan. 14, 2013. A copy of the amended filing is available at http://is.gd/97elC4 About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. As reported in the Troubled Company Reporter on July 18, 2012, Ernst & Young (Hellas) Certified Auditors Accountants S.A., in Athens, Greece, expressed substantial doubt about FreeSeas' ability to continue as a going concern, following its audit of the Company's financial statements for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. "In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements with banks." The Company's balance sheet at June 30, 2012, showed US$120.8 million in total assets, US$104.1 million in total current liabilities, and shareholders' equity of US$16.7 million. FREDERICK DARREN BERG: Sun Granite Summary Judgment Bid Denied -------------------------------------------------------------- Bankruptcy Judge Karen A. Overstreet denied the motion for summary judgment filed by Sun Granite Investments LLC, a defendant in the lawsuit styled, MARK CALVERT, as liquidating Trustee of MERIDIAN INVESTORS TRUST, et al. Plaintiffs, v. FOSTER RADFORD, et al., Defendants, Adv. Proc. No. 12-01505 (Bankr. W.D. Wash.). The Trustee has filed 54 adversary proceedings against investors seeking the return of what the Trustee contends are fraudulent conveyances. The Trustee contends the adversary proceeding arises from a massive Ponzi scheme perpetrated by Frederick Darren Berg, a debtor in his own individual bankruptcy proceeding, along with six other related entities. The Court is presiding over 12 bankruptcy cases involving debtors that are/were investment funds and one affiliated entity formerly owned, managed or controlled by Mr. Berg. Those debtors have been substantively consolidated into one proceeding referred to as the "Meridian Bankruptcy." In the lawsuit against Foster Radford, et al., the Trustee seeks to recover transfers avoidable under Chapter V of the Bankruptcy Code as well as under Washington's Uniform Fraudulent Transfer Act, RCW 19.40.010 et seq. The suit alleges that from Sept. 9, 2002, the defendants collectively made cash loans to one or more of the Meridian Funds in the total amount of $779,259, and that from Oct. 1, 2007, through roughly Nov. 27, 2009, they received total payments from the Meridian Funds in the amount of $1,133,129.11. On the theory that the payments to the defendants were intentionally fraudulent transfers, the Trustee seeks to recover the full amount of those payments, $1,133,129.11, from the defendants. On the theory that the payments were constructively fraudulent transfers, the Trustee seeks to recover the excess of payments over loans in the amount of $353,870.11 as "Fictitious Interest." Sun Granite's Motion for Summary Judgment pertains to one loan, its $360,000 loan made to the Meridian Fund II -- Fund 2 -- on Sept. 27, 2006, and one payment, the payment by Fund 2 to Sun Granite on Oct. 1, 2007 in the amount of $408,073.62. Sun Granite is a Washington Limited Liability Company whose majority members are Lemoine and Foster Radford. Sun Granite has framed the two issues before the Court: (1) whether a borrower's payment of principal and a reasonable rate of interest due on an enforceable promissory note constitutes satisfaction of an antecedent debt within the meaning of Bankruptcy Code Sec. 548(d)(2)(A) and RCW 19.40.031(a); and (2) whether Sun Granite accepted the October 2007 Payment for value and in good faith within the meaning of Section Sec. 548(c) and RCW 19.40.081(a). According to Judge Overstreet, the October 2007 Payment overpaid Sun Granite's principal loan ($360,000) by $48,073.62. However, because discovery has been stayed, Judge Overstreet said it would be unfair to consider the second issue raised in Sun Granite's Motion, whether Sun Granite accepted the October 2007 Payment in good faith. Although the multiple orders on initial disclosures may have created some confusion, a previous Pre-Trial Order clearly states that "until such time that the Court enters a final Discovery Order, all discovery is stayed." At the continued pretrial conference on Jan. 29, 2013, the Court lifted the stay on all discovery proceedings. At a minimum, Judge Overstreet said the Trustee is entitled to take the depositions of Foster and Lemoine Radford. A copy of the Court's Jan. 29, 2013 Order is available at http://is.gd/bChjUhfrom Leagle.com. About Meridian Mortgage and Frederick Darren Berg In November 2010, a federal grand jury in Seattle indicted Frederick Darren Berg on 12 counts of wire fraud, money laundering and bankruptcy fraud in connection with the demise of his Meridian Group of investment funds. Prosecutors believe Mr. Berg took in more than $280 million, with the losses attributed to the ponzi scheme estimated to be roughly $100 million. Hundreds of victims have lost money in the scheme between 2001 and 2010. Mr. Berg commenced a personal Chapter 11 case on July 27, 2010 (Bankr. W.D. Wash. Case No. 10-18668), estimating assets of more than $10 million and liabilities between $1 million and $10 million. The filing came after lawyers for one group of investors, armed with a court order and accompanied by sheriff's deputies, began seizing personal possessions at Mr. Berg's Mercer Island home and downtown Seattle condo. Diana K. Carey, trustee for Mr. Berg's estate, filed on Jan. 27, 2011, voluntary Chapter 11 petitions for Mortgage Investors Fund I LLC (Bankr. W.D. Wash. Case No. 11-10830) estimating assets of up to $50,000 and debts of up to $50 million and Meridian Mortgage Investors Fund III LLC (Case No. 11-10833), estimating up to $50,000 in assets and up to $100 million in liabilities. Michael J. Gearin, Esq., at K&L Gates LLP, in Seattle, served as counsel to the Debtors. Creditors filed an involuntary Chapter 11 petition for Meridian Mortgage Investors Fund II LLC (Bankr. W.D. Wash. Case No. 10-17976) on July 9, 2010. The petitioners were represented by Jane E. Pearson, Esq., at Foster Pepper PLLC, in Seattle. Creditors filed involuntary Chapter 11 petitions for Meridian Mortgage Investors Fund VIII, LLC (Bankr. W.D. Was. Case No. 10-17958) and Meridian Mortgage Investors Fund V, LLC (Bankr. W.D. Wash. Case No. 10-17952) on July 9, 2010. The petitioners were represented by John T. Mellen, Esq., at Keller Rohrback LLP, in Seattle, and Cynthia A. Kuno, Esq., at Hanson Baker Ludlow Drumheller PS, in Bellevue, represent the petitioners. On June 22, 2011, the Bankruptcy Court entered an order confirming a consensual Chapter 11 plan in the Meridian bankruptcy. The Plan provides for the creation of the Liquidating Trust for the Substantively Consolidated Meridian Funds, a/k/a/ The Meridian Investors Trust. Mr. Calvert was named Liquidating Trustee. On Feb. 9, 2012, Mr. Berg was sentenced to 18 years of imprisonment, three years of supervised release, and restitution. FRONTIER COMMUNICATIONS: S&P Lowers Ratings on 2 Certs to 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on two classes of certificates linked to Frontier Communications Corp. to 'BB-' from 'BB'. S&P base its ratings on the two classes on its rating on the underlying security, Frontier Communications Co.'s 7.05% senior debentures due 10/1/2046 ('BB-'). The rating actions reflect the Jan. 25, 2013, lowering of S&P's rating on the underlying security to 'BB-' from 'BB'. S&P may take subsequent rating actions on these transactions due to changes in its rating assigned to the underlying security. STANDARD & POOR'S 17G-7 DISCLOSURE REPORT SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security as defined in the Rule, to include a description of the representations, warranties and enforcement mechanisms available to investors and a description of how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. The Rule applies to in-scope securities initially rated (including preliminary ratings) on or after Sept. 26, 2011. If applicable, the Standard & Poor's 17g-7 Disclosure Report included in this credit rating report is available at: http://standardandpoorsdisclosure-17g7.com RATINGS LOWERED Structured Asset Trust Unit Repackages (SATURNS) Citizen Communication Debenture-Backed Ser 2001-2 US$26.122 mil callable units series 2001-2 Class To From Units BB- BB PreferredPLUS Trust Series CZN-1 US$34.5 mil preferredplus 8.375% trust certificates Class To From Certs BB- BB GCA SERVICES: S&P Assigns B CCR, Rates $150MM 2nd Lien Notes CCC+ ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned Cleveland, Ohio-based GCA Services Group Inc. its 'B' corporate credit rating. The rating outlook is stable. At the same time, S&P assigned GCA's new $325 million senior secured first-lien term loan B (including the $15 million segregated prefunded letter of credit facility) an issue-level rating of 'B' (at the same level as the corporate credit rating on the company). (The size of this facility has increased from the originally proposed $315 million). The recovery rating on each of these facilities is '3', reflecting S&P's expectation of meaningful (50%-70%) recovery for lenders in case of a payment default. S&P also assigned the company's new $150 million senior secured second-lien term loan its 'CCC+' issue-level rating (two notches lower than the corporate credit rating). The recovery rating on this debt is '6', reflecting S&P's expectation of negligible (0%- 10%) recovery for lenders in the case of a payment default. The ratings on GCA Services reflect what S&P considers to be a "highly leveraged" financial profile and a "vulnerable" business profile. "Our financial risk assessment incorporates our view that, following the leveraged buyout (LBO), the debt burden will remain significant and that the sponsor, Blackstone, will likely influence financial governance," said Standard & Poor's credit analyst Nalini Saxena. S&P views the company's financial policy as very aggressive and its cash flow metrics and capital structure as weak. S&P expects credit measures to improve moderately over the next 12 to 18 months, but to remain weak. This expectation is based on the following key outcomes of S&P's forecast: -- A pro forma leverage (adjusted total debt to EBITDA) ratio -- based on trailing-12-month data -- in the 8x area and a 2013 year-end leverage ratio in the 6x area; -- Thin EBITDA coverage of interest in the low-2x area at year- end; and -- Weak funds from operations (FFO) to total debt in the high- single-digit percent area at 2013 year-end. The assumptions informing S&P's forecast for operational performance include: -- Approximately 10% revenue growth in both 2012 and 2013, as S&P expects the company to benefit from the ongoing trend toward outsourcing and consolidation of facilities management services; -- EBITDA margins remaining thin, but improving modestly (by about 150 basis points), as S&P expects the company to scale back its overhead and -- administrative costs; -- No voluntary debt repayment beyond the 50% excess cash flow sweep (per the credit agreement); -- Minimal acquisitions; and -- Capital expenditures, which include janitorial equipment and light trucks, of about $10 million annually. S&P believes a combination of pricing pressure and excess overhead resulting from several quarters of rapid growth are constraining GCA's EBITDA margins. While S&P anticipates Blackstone's stewardship of the company to help improve operating performance, due to the price sensitivity of customers, S&P do not expect them to improve into the double-digit percentage area over our forecast period. "Our characterization of GCA's financial policy as very aggressive is based on Blackstone's majority ownership (85%), which we believe could influence financial governance toward shareholder- friendly decision-making, such as dividend payouts. While we believe the competitive landscape does not offer meaningful opportunity for acquisitions, we believe that the tuck-in acquisitions remain a possibility, possibly funded through a combination of internally generated cash flow, additional debt, and sponsor support," S&P said. "Our "vulnerable" business risk assessment incorporates our view that the company is a very small player with a narrow business focus in a competitive, contract-based industry: outsourced facilities management services, predominantly focused on delivery of customized janitorial and custodial services, the market size of which the company estimates to be about $50 billion. Local players as well as international players, such as Sodexo and ARAMARK, operate in this fragmented market. In our opinion, larger participants would threaten GCA's competitive position if they were to meaningfully expand their foodservice offerings into facilities management services. As a small, relatively specialized facilities services player, GCA's growth trajectory is more susceptible to changes in outsourcing trends. GCA also competes against in-housed service delivery, especially in the education market," S&P added. The highly underpenetrated education market--K-12 and higher education--generates almost half of the company's revenues and is poised for growth, as school systems that have budgetary pressures are eager to outsource facilities services at a discount. The reputation and trustworthiness of labor in this space is critical. The commercial segment, which generates the other half of revenues, has slightly higher barriers to entry, as its niche market verticals (e.g., nuclear energy and biopharmaceutical plants) require a certain skill level from service providers. S&P expects the company to generate most of its growth from its education segment. The rating outlook is stable. S&P expects GCA's operating performance to improve primarily through revenue growth and for credit-protection measures to strengthen modestly but remain within the criteria and indicative ratios for a "highly leveraged" financial profile over the next 12 months. S&P expects the company to reduce leverage to the 6x area by the end of 2013. S&P could consider a downgrade if adjusted leverage exceeds the mid-6x area at the end of 2013. This could, for example, result from an inability to win new business or a more aggressive financial policy that increases the company's debt burden. S&P could consider a downgrade if, for example, EBITDA does not improve by at least 33% from current levels. While unlikely over the next 12 months, S&P could consider an upgrade if the company were to strengthen its business profile, potentially through diversification, while sustaining solid operating performance. A higher rating would predicate the adjusted leverage ratio approaching the mid-4x area, possibly as a result of approximately 90% EBITDA improvement from current levels. GENERAL AUTO: Further Fine-Tunes Plan Disclosures ------------------------------------------------- General Auto Building, LLC, filed on Dec. 17, 2012, disclosure statement in support of its Third Amended Reorganization Plan dated Dec. 17, 2012. According to the Third Amended Disclosure Statement, generally, the Plan provides that: (a) all membership interests in the Debtor will be canceled on the Effective Date; (b) North Park Development will purchase a $400,000 membership interest in Reorganized Debtor; (c) all Insiders and Creditors of Debtor are offered the opportunity to purchase membership interests in the Reorganized Debtor in $50,000 increments; (d) membership interests in the Reorganized Debtor will be allocated pro rata among all new investors; and (e) the Debtor will operate in the ordinary course and pay all Creditors in full or in part over time pursuant to the Plan from revenue generated by operations, from cash savings, and from the new investment in the Debtor. The Reorganized Debtor will pay its Secured Creditors, R&H Construction, Multnomah County, and Homestreet Bank as follows: -- R&H Construction Co. filed a proof of claim in the amount of $146,946.80 secured by a construction lien arising from certain improvements made to the General Automotive Building. R&H Construction believes it is owed the claim amount plus (i) interest accruing at the rate of 18% per annum until the Effective Date and (ii) costs and reasonable attorneys' fees. The Plan provides that R&H Construction will be paid $178,000 on the Effective Date. Any unpaid balance will be payable on the second anniversary of the Effective Date. Park & Flanders filed an objection to the R&H Construction claim and initiated an adversary proceeding seeking a determination of the validity and priority of the R&H Construction lien. In the event that Park & Flanders prevails, then the R&H Construction claim may not be an Allowed Secured Claim. -- As of the Petition Date, Multnomah County had a lien on the General Automotive Building for unpaid real property taxes in the approximate amount of $90,000. Multnomah County's Secured Claim will be paid in full prior to the Effective Date. The Debtor anticipates that Multnomah County will have no money owing to it on the Effective Date and, in turn, no Allowed Claim. -- Homestreet Bank's Allowed Secured Claim is secured by a perfected security interest in substantially all of Debtor's assets, including rents. Homestreet will retain its interests in the Tenant Leases notwithstanding the Debtor's assignment of those leases pursuant to section 9.2.3.8. Homestreet's Claim will be an Allowed Secured Claim up to the value of Homestreet's interest in the property securing the Claim. In September 2012, the Bankruptcy Court valued the General Auto Building at $10,800,000. After subtraction of (i) prior liens determined as of the Petition Date and (ii) the amount of adequate protection payments, the Debtor believes that the Allowed Secured Claim of Homestreet will be less than $10,800,000. Commencing on the first day of the first month following the Effective Date and continuing on the first day of the following 11 months, Homestreet will be paid monthly payments of interest only. Commencing on the first day of the thirteenth month following the Effective Date and continuing on the first day of each month thereafter, Homestreet will be paid equal, monthly amortizing payments of principal and interest based upon a 30-year amortization schedule with a balloon payment of the unpaid principal plus accrued interest due on the tenth anniversary of the Effective Date. After the Petition Date, Homestreet assigned its claim to Park & Flanders. General unsecured creditors include Portland Development Commission's Allowed Claim, which Debtor believes is unsecured. Commencing on the last business day of April 2013 and continuing on the last business day of each July, October, January and April thereafter until paid or satisfied, Reorganized Debtor will pay to each holder of a Class 4 claim an amount equal to its pro rata share of the Reorganized Debtor's Excess Cash as of the last day of the prior calendar quarter. Payments will continue until the (a) holders of Class 4 Claims have been paid in full together with interest at the Federal Judgment Rate; or (b) the last day of January 2023, whichever will first occur. However in the event that holders of Class 4 Claims have received payments totaling at least 60% of their Class 4 Claim on or before Dec. 31, 2017, then the Class 4 Claims will be deemed to have been paid and satisfied in full and Reorganized Debtor will have no further payment obligations. If Park & Flanders prevails in its objection to the R&H Construction secured claim, then the R&H Construction claim will be a General Unsecured Claim. Small Unsecured Creditors (creditors with claims of $6,000 or less) will be paid 60% of their Allowed Claim in cash on the later of the Effective Date of the Plan or the date on which the Claim is Allowed. Small Unsecured Creditors will not receive any interest payment. General Auto Lessee, LLC's Allowed Unsecured Claim will be satisfied by the Reorganized Debtor as follows: On the Effective Date, the Debtor will assign all Tenant Leases to General Auto Lessee subject to Homestreet Bank's interests in the Tenant Leases and Debtor and General Auto Lessee will amend the schedule of base rent provided in Section 4.1 of the Master Lease as necessary given the Debtor's historic and projected financial performance. The Debtor and General Auto Lessee restate and reaffirm their rights and obligations arising from and after the Effective Date under the Tax Credit Documents, including but not limited to (i) General Auto Lessee's obligation to fund all remaining tax credit investments, (ii) TCC Historic Tax Credit Fund VII L.P.'s option to sell its membership interest to General Auto Development Manager, and (iii) General Auto Development Manager, LLC's right and option to purchase TCC's membership interest in General Auto Lessee. The Debtor, TCC, and General Auto Lessee will execute such mutual releases of pre-Effective Date claims and such modifications as are necessary or appropriate to effectuate the intent of the Tax Credit Documents and conform the Tax Credit Documents to circumstances as of the Effective Date. The Allowed Unsecured Claims of Insiders will be subordinated to the payment of all other allowed unsecured claims. Existing equity interests in the Debtor will be extinguished. A copy of the Third Amended Disclosure Statement is available at: http://bankrupt.com/misc/generalauto.doc242.pdf About General Auto Building General Auto Building, LLC, filed for Chapter 11 bankruptcy (Bankr. D. Ore. Case No. 12-31450) on March 2, 2012. The Debtor is an Oregon limited liability company formed in 2007 with its principal place of business in Spokane, Washington. It was formed to renovate and lease its namesake commercial property located at 411 NW Park Avenue, Portland, Oregon. As of the Petition date, the Debtor has developed virtually all of the General Automotive Building and has leased approximately 98% of the building's space to retail and commercial tenants. The Debtor continues to seek tenants for the remaining spaces. Judge Elizabeth L. Perris presides over the case. Albert N. Kennedy, Esq., and Ava L. Schoen, Esq., at Tonkon Torp LLP, serve as the Debtor's counsel. The Debtor has scheduled $10,010,620 in total assets and $13,519,354 in total liabilities. The U.S. Trustee was unable to appoint an official committee of unsecured creditors in the case. GLOBAL ARENA: To Buy 66.67% Member Interest in MGA From Goldin -------------------------------------------------------------- Global Arena Holding, Inc., entered into an Agreement of Sale with Marc Goldin and MGA International Brokerage LLC to purchase 66.67% of the aggregate outstanding member interests of MGA International Brokerage LLC. Goldin is the sole member of MGA. Pursuant to the Agreement of Sale, the parties agreed as follows: (A) Goldin will sell 66.67% of its member interests in MGA to Global Arena in exchange for 300,000 options to purchase Global Arena common shares. Each option will be exercisable into one common share of Global Arena at the exercise price of $.25 per common share. The exercise period will be for one year. (B) Global Arena and Goldin will enter into a profit sharing agreement relating to the services of Goldin provided to MGA. (C) MGA will appoint Goldin as Chairman of the Board of Directors, Chief Executive Officer and President. MGA and Goldin will enter into an employment agreement as appropriate. (D) Goldin reserves the right to unwind this transaction at any time with 30 days written notice. A copy of the Agreement of Sale is available at: http://is.gd/yK8Jfz About Global Arena New York, N.Y.-based Global Arena Holding, Inc., formerly Global Arena Holding Subsidiary Corp., was formed in February 2009, in the state of Delaware. The Company is a financial services firm that services the financial community through its subsidiaries as follows: Global Arena Investment Management LLC provides investment advisory services to its clients. GAIM is registered with the Securities and Exchange Commission as an investment advisor and clears all of its business through Fidelity Advisors, its correspondent broker. Global Arena Commodities Corp. provides commodities brokerage services and earns commissions. Global Arena Trading Advisors, LLC provides futures advisory services and earns fees. GATA is registered with the National Futures Association (NFA) as a commodities trading advisor. Lillybell Entertainment, LLC provides finance services to the entertainment industry. Wei, Wei & Co., LLP, in New York, N.Y., expressed substantial doubt about Global Arena's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses since inception, experiences a deficiency of cash flow from operations and has a stockholders deficiency. The Company's balance sheet at Sept. 30, 2012, showed $1.09 million in total assets, $2.35 million in total liabilities and a $1.26 million total stockholders' deficiency. GREEN EARTH: Amends 55 Million Common Shares Prospectus ------------------------------------------------------- Green Earth Technologies, Inc., filed with the U.S. Securities and Exchange Commission amendment no.1 to the Form S-1 prospectus relating to the sale, from time to time, by certain stockholders of up to 55,147,059 shares of the Company's common stock, of which 36,764,706 shares are issuable upon exercise of the conversion rights contained in the Company's 6.0% Secured Convertible Debentures due Dec. 31, 2014, in the aggregate principal of $6,250,000 and 18,382,353 shares are issuable upon exercise of warrants expiring Dec. 31, 2016. The conversion price of the Debentures and the exercise price of the Warrants are $0.17 and $0.21 per share, respectively. The prices at which the Selling Stockholders may sell the shares of the Company's common stock will be determined by the prevailing market price for the shares or in negotiated transactions. The Company will not receive any proceeds from the sale of these shares by the Selling Stockholders. However, the Company did realize gross proceeds of $6,250,000 from the sale of the Debentures and Warrants and the Company will realize gross proceeds of $3,860,294 if all of the Warrants are exercised. The Company's common stock is registered under Section 12(g) of the Securities Exchange Act of 1934, as amended, and is quoted on the OTC Bulletin Board under the symbol "GETG." A copy of the amended prospectus is available at: http://is.gd/PXykn5 About Green Earth Technologies White Plains, N.Y.-based Green Earth Technologies, Inc. (OTC QB: GETG) -- http://www.getg.com/-- markets, sells and distributes bio-degradable performance and cleaning products. The Company's product line crosses multiple industries including the automotive aftermarket, marine and outdoor power equipment markets. Green Earth reported a net loss of $11.26 million for the year ended June 30, 2012, compared with a net loss of $12.21 million during the prior fiscal year. Friedman LLP, in East Hanover, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended June 30, 2012. The independent auditors noted that the Company's losses, negative cash flows from operations, working capital deficit and its ability to pay its outstanding liabilities through fiscal 2013 raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $3.78 million in total assets, $12.63 million in total liabilities and a $8.85 million total stockholders' deficit. GREEN ENERGY: William D'Angelo Resigns from Board ------------------------------------------------- William D'Angelo, a director of Green Energy Management Services Holdings, Inc., informed the Company of his intention to resign from the Board of Directors of the Company, as a result of the increased level of commitment that Mr. D'Angelo will need to devote to his private business interests. Mr. D'Angelo's resignation took effect immediately. Mr. D'Angelo did not make this decision as the result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. About Green Energy Baton Rouge, Louisiana-based Green Energy Management Services Holdings, Inc., is a full service energy management company. GEM provides its clients all forms of energy efficiency solutions mainly based in two functional areas: energy efficient lighting upgrades and efficient water utilization. GEM is currently primarily involved in the distribution of energy efficient light emitting diode ("LED") units (the "Units") to end users who utilize substantial quantities of electricity. GEM is also currently involved in the initial stages of customer installation of its Water Management System. GEM structures its contracts with no upfront or maintenance costs to its customers and shares in the achieved energy, water utilization and maintenance savings. In its audit report for the 2011 results, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about Green Energy Management Services Holdings' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations. The Company reported a net loss of $19.25 million on $116,550 of revenue for 2011, compared with a net loss of $1.91 million on $291,311 of revenue for 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.34 million in total assets, $4.83 million in total liabilities, all current, and a $3.49 million total stockholders' deficit. Bankruptcy Warning "As of September 30, 2012, we had cash of $13,996 and contract receivables of $32,193. With the funds that we currently have on hand and the potential third party financing to monetize the revenues projected from our agreement with Co-op City, pursuant to which we have received approximately $21,000 per month to date, we believe that we will be able to sustain our current level of operations for approximately the next 12 months. "Risk Factors for the matters for which a negative outcome could result in payments by us of substantial monetary damages, or changes to our products or our business, which may have a material and adverse impact on our business, financial condition or results of operations or force us to file for bankruptcy and/or cease our operations." HAWAII OUTDOOR: Amended List of 20 Largest Unsecured Creditors -------------------------------------------------------------- Hawaii Outdoor Tours, Inc., has filed with the U.S. Bankruptcy Court for the District of Hawaii an amended list of its 20 largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ HELCO -- $169,291 P.O. Box 909 Honolulu, HI 96808 EZ Computing -- $32,656 16-572 Ohe Street Keaau, HI 96749 Ms. Marian RB Thornton, Trustee -- $32,251 Eleanor Rose Benda Trust Carrollton, TX 75006 Wastewater Division -- $32,245 Department of Water Supply -- $25,691 Hawaiian Telcom -- $20,267 Hirayama Bros. Electric Inc. -- $20,000 Ms. Marian RB Thornton, Trustee -- $19,146 Eleanor Rose Benda Trust Carrollton, TX 75006 Thyssenkrupp Elevator Corp. -- $12,843 Ashford & Wriston -- $9,805 Hawaii Gas ? $6,489 Rainbow Isle Refrigeration -- $6,239 Oceanic Time Warner Cable -- $5,368 Traditional Chinese Medical -- $5,000 College of Hawaii Hawaii Employer's Mutual Insurance -- $3,677 Co. Land & Natural Resources -- $2,465 Pacific Guardian Life -- $1,762 Bankcard Center -- $1,560 3T Poly LLC -- $904 Solid Waste Division - COH -- $848 About Hawaii Outdoor Tours Hawaii Outdoor Tours, Inc., operator of the Niloa Volcanoes Resort in Hilo, Hawaii, filed a Chapter 11 petition (Bankr. D. Haw. Case No. 12-02279) in Honolulu on Nov. 20, 2012. Niloa Volcanoes is a 382-room hotel with a nine-hole golf course. The 64-acre property is subject to a 65-year lease, commencing Feb. 1, 2006, and provides for a total ground rent for the first 10 years of $500,000 annually. The Debtor used a $10 million loan from First Regional Bank and $10 million of its own cash to invest in the property. First-Citizens Bank & Trust Company, which acquired the First Regional note from the Federal Deposit Insurance Corp., commenced foreclosure proceedings in August. First-Citizens Bank asserts a claim of $9.95 million. The Debtor believes that the value of the hotel property exceeds the amount of the First-Citizens Bank note. Just the bricks and mortal alone was valued in excess of $35 million by First Regional's appraiser and the insurance company. Bankruptcy Judge Robert J. Faris oversees the case. Wagner Choi & Verbrugge acts as bankruptcy counsel. In its petition, the Debtor estimated $10 million to $50 million in both assets and debts. The petition was signed by CEO Kenneth Fujiyama. Ted N. Petitt, Esq., represents Secured Creditor First-Citizens Bank as counsel. Cynthia M. Johiro, Esq., represents the State of Hawaii Department of Taxation as counsel. Tsugawa Biehl Lau & Muzxzi, LLLC, is the proposed counsel for the Official Committee of Unsecured Creditors of the Debtor. HAWAII OUTDOOR: Unsecured Creditors Committee Has 3 Members ----------------------------------------------------------- Tiffany L. Carroll, Acting United States Trustee for Region 15, appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Hawaii Outdoor Tours, Inc. The Creditors Committee members are: 1. Kawelo Paul Malama EZ Computing 16-572 Ohe Street Keaau, HI 96749 Tel: (808) 966-8890 E-mail: ezcomputing@hawaiiantel.net 2. Katherine Hirayama Hirayama Bros. Electric, Inc. 510 Kalanikoa Street Hilo, HI 96720 Tel: (808) 935-0933 Fax: (808) 961-6388 E-mail: hbeohana@gmail.com 3. Pamela Abuna Rainbow Isle Refrigeration 831-H Leilani Street Hilo, HI 96720 Tel: (808) 935-4424 Fax: (808) 935-4942 E-mail: rainboisle1@aol.com About Hawaii Outdoor Tours Hawaii Outdoor Tours, Inc., operator of the Niloa Volcanoes Resort in Hilo, Hawaii, filed a Chapter 11 petition (Bankr. D. Haw. Case No. 12-02279) in Honolulu on Nov. 20, 2012. Niloa Volcanoes is a 382-room hotel with a nine-hole golf course. The 64-acre property is subject to a 65-year lease, commencing Feb. 1, 2006, and provides for a total ground rent for the first 10 years of $500,000 annually. The Debtor used a $10 million loan from First Regional Bank and $10 million of its own cash to invest in the property. First-Citizens Bank & Trust Company, which acquired the First Regional note from the Federal Deposit Insurance Corp., commenced foreclosure proceedings in August. First-Citizens Bank asserts a claim of $9.95 million. The Debtor believes that the value of the hotel property exceeds the amount of the First-Citizens Bank note. Just the bricks and mortal alone was valued in excess of $35 million by First Regional's appraiser and the insurance company. Bankruptcy Judge Robert J. Faris oversees the case. Wagner Choi & Verbrugge acts as bankruptcy counsel. In its petition, the Debtor estimated $10 million to $50 million in both assets and debts. The petition was signed by CEO Kenneth Fujiyama. Ted N. Petitt, Esq., represents Secured Creditor First-Citizens Bank as counsel. Cynthia M. Johiro, Esq., represents the State of Hawaii Department of Taxation as counsel. Tsugawa Biehl Lau & Muzxzi, LLLC, is the proposed counsel for the Official Committee of Unsecured Creditors of the Debtor. HAWAII OUTDOOR: Hearing on Further Use of Cash on Feb. 25 --------------------------------------------------------- At a hearing on Jan. 22, the Bankruptcy Court continued, by agreement of Lender First-Citizens Bank & Trust Company and Debtor Hawaii Outdoor Tours, Inc., the further interim hearing on the Debtor's use of Lender's cash collateral to Feb. 25, 2013. First-Citizens Bank holds a first priority security interest in all property of the Debtor, including cash collateral, as security for a loan in the principal amount of approximately $9,736,403.67, together with interest and other fees under the Secured Loan Agreements. The State of Hawaii Department of Taxation claims junior lien interests in the assets of the Debtor as security for a tax claim in the amount of $473,535.80 as of the Petition Date. On Dec. 21, 2012, the Bankruptcy Court entered a second stipulated interim order authorizing the Debtor's use of cash collateral until Jan. 22, 2013. As adequate protection, the Debtor will pay to First-Citizens Bank by Dec. 20, 2012, and thereafter monthly payments of at least $55,000, paid no later than the 20th day of each month. First-Citizens Bank is also granted a Senior Replacement Lien in all of the Borrower Accounts created from and after the Petition Date and all of the Debtor's Pre-Petition Collateral and related proceeds. The State of Hawaii Department of Taxation is granted a second priority replacement lien in all of the Borrower Accounts created from after after the Petition Date and all of the Pre-Petition Collateral and associated proceeds. The August Lease Payment in the amount of $262,000 to be made by the Lender to the State of Hawaii Department of Land and Natural Resources is authorized and entitled to status as an administrative expense claim, with priority over all other administrative expense claims, now existing or hereafter arising, of the kind specified in or ordered pursuant to Sections 105, 326, 330, 331, 503(b), 506(c), 507(a), and 1114 of the Bankruptcy Code. About Hawaii Outdoor Tours Hawaii Outdoor Tours, Inc., operator of the Niloa Volcanoes Resort in Hilo, Hawaii, filed a Chapter 11 petition (Bankr. D. Haw. Case No. 12-02279) in Honolulu on Nov. 20, 2012. Niloa Volcanoes is a 382-room hotel with a nine-hole golf course. The 64-acre property is subject to a 65-year lease, commencing Feb. 1, 2006, and provides for a total ground rent for the first 10 years of $500,000 annually. The Debtor used a $10 million loan from First Regional Bank and $10 million of its own cash to invest in the property. First-Citizens Bank & Trust Company, which acquired the First Regional note from the Federal Deposit Insurance Corp., commenced foreclosure proceedings in August. First-Citizens Bank asserts a claim of $9.95 million. The Debtor believes that the value of the hotel property exceeds the amount of the First-Citizens Bank note. Just the bricks and mortal alone was valued in excess of $35 million by First Regional's appraiser and the insurance company. Bankruptcy Judge Robert J. Faris oversees the case. Wagner Choi & Verbrugge acts as bankruptcy counsel. In its petition, the Debtor estimated $10 million to $50 million in both assets and debts. The petition was signed by CEO Kenneth Fujiyama. Ted N. Petitt, Esq., represents Secured Creditor First-Citizens Bank as counsel. Cynthia M. Johiro, Esq., represents the State of Hawaii Department of Taxation as counsel. Tsugawa Biehl Lau & Muzxzi, LLLC, is the proposed counsel for the Official Committee of Unsecured Creditors of the Debtor. HAWKER BEECHCRAFT: Court Approves Joint Plan of Reorganization -------------------------------------------------------------- Hawker Beechcraft, Inc. on Feb. 1 disclosed that the U.S. Bankruptcy Court for the Southern District of New York has approved its Joint Plan of Reorganization (Plan), paving the way for the company to emerge from Chapter 11 in the second half of February. In confirming the Plan, Judge Stuart M. Bernstein found that it satisfied all of the requirements of the U.S. Bankruptcy Code. Robert S. ("Steve") Miller, CEO of Hawker Beechcraft, Inc., said, "[Fri]day's ruling marks the final significant step in the restructuring process. Throughout this process, we have been guided by the goal of emerging in a strong operational and financial position, with an enhanced ability to compete well into the future. Our recapitalization and dramatically reduced debt load will allow us to do exactly that." As part of its reorganization, the company intends to rename itself Beechcraft Corporation and implement a business plan that focuses on its turboprop, piston, special mission and trainer/attack aircraft and on its parts, maintenance, repairs and refurbishment businesses, all of which are profitable and have high growth potential. Bill Boisture, Chairman of Hawker Beechcraft Corp., said, "Thanks to the hard work of our employees and the strong support we have received from our key creditors, union partners, elected officials, suppliers and customers, Beechcraft Corporation will emerge from this process as the world's leading designer and manufacturer of turboprop, piston and trainer/attack aircraft with the largest global customer support network in the industry." Ownership Structure and Corporate Governance Hawker Beechcraft expects the Plan to become effective by the end of February, once all of the conditions for effectiveness have been met. Upon emergence, pre-petition secured bank debt, unsecured bond debt, and certain general unsecured claims will be canceled and holders of such claims will receive equity in the reorganized company in the percentages negotiated by the major creditor groups at the time the company commenced its Chapter 11 proceedings. Effective upon emergence, the company's new Board of Directors will include: General Donald G. 'Don' Cook, Gene Davis, Ralph Heath, David Tolley, Gideon Argov, Robert (Bob) Johnson and Bill Boisture. The company expects to name two additional directors prior to the effective date of the Plan. In addition, Bill Boisture will become Chief Executive Officer of Beechcraft Corporation and Steve Miller will become senior advisor to the board. The company's existing leadership team will remain in place, providing continuity and valuable insight into running the business. Exit Financing On Jan. 30, the Court approved the company's motion to retain J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC to act as joint lead arrangers and joint bookrunners to structure, arrange and syndicate $600 million in exit financing, consisting of a term loan and a revolving line of credit. The affiliated banks of the joint lead arrangers, JPMorgan Chase Bank, N.A. and Credit Suisse AG, have committed to underwrite the financing. The financing will be used to repay all claims under the debtor-in- possession post-petition credit facility, pay certain settlement and cure payments and fund ongoing operations. Pension Plans On Jan. 31, the Court has also approved the company's agreement with the Pension Benefit Guaranty Corporation (PBGC) and the International Association of Machinists to address its pension plans within the context of its restructuring efforts. According to the terms of the agreement, accrued retirement benefits for participants in the company's hourly/union plan will remain the responsibility of Hawker Beechcraft, while the PBGC will assume responsibility for the company's base and salaried plans. Under the terms of this approach, the company estimates that 100 percent of union plan participants and more than 99 percent of non-union plan participants will receive the full amount of normal retirement pension benefits that have already vested. The company has reached a separate agreement to compensate those salaried employees and retirees whose pension benefits would otherwise have been reduced. Hawker Beechcraft's legal representative is Kirkland & Ellis LLP; its financial advisor is Perella Weinberg Partners LP; and its restructuring advisor is Alvarez & Marsal. The Ad Hoc Committee of Senior Secured Lenders' legal representative is Wachtell Lipton Rosen & Katz. Credit Suisse serves as agent for the lenders under Hawker Beechcraft's secured pre-petition and debtor-in-possession credit facilities. Credit Suisse's legal representative is Sidley Austin LLP and its financial advisor is Houlihan Lokey. The Unsecured Creditors Committee's legal representative is Akin Gump Strauss Hauer & Feld LLP and its financial advisor is FTI Consulting, Inc. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft reported a net loss of $631.90 million on $2.43 billion of sales in 2011, compared with a net loss of $304.30 million on $2.80 billion of sales in 2010. Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case has selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. The Committee's financial advisor is FTI Consulting, Inc. On June 30, 2012, Hawker filed its Plan, which proposed to eliminate $2.5 billion in debt and $125 million of annual cash interest expense. The plan would give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. In July 2012, Hawker disclosed it was in exclusive talks with China's Superior Aviation Beijing Co. for the purchase of Hawker's corporate jet and propeller plane operations out of bankruptcy for $1.79 billion. In October 2012, Hawker unveiled that those talks have collapsed amid concerns a deal with Superior wouldn't pass muster with a U.S. government panel and other cross-cultural complications. Sources told The Wall Street Journal that Superior encountered difficulties separating Hawker's defense business from those units in a way that would make both sides comfortable the deal would get U.S. government clearance. The sources told WJS the defense operations were integrated in various ways with Hawker's civilian businesses, especially the propeller plane unit, in ways that proved difficult to untangle. Thereafter, Hawker said it intends to emerge from bankruptcy as an independent company. On Oct. 29, 2012, Hawker filed a modified reorganization plan and disclosure materials. Hawker said the plan was supported by the official creditors' committee and by a "substantial majority" of holders of the senior credit and a majority of holders of senior notes. Hawker said it will either sell or close the jet-manufacturing business. The revised plan still offers 81.9% of the new stock in return for $921 million of the $1.83 billion owing on the senior credit. Unsecured creditors are to receive the remaining 18.9% of the new stock. Holders of the senior credit will receive 86% of the new stock. The senior credit holders are projected to have a 43.1% recovery from the plan. General unsecured creditors' recovery is a projected 5.7% to 6.3%. The recovery by holders of $510 million in senior notes is predicted to be 9.2% to 10%. HOSTESS BRANDS: Assets Fetching Bids of $856.4 Million ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that affiliates of Apollo Global Management LLC and C. Dean Metropoulos & Co. signed a contract to pay $410 million cash for a majority of the snack cake business owned by Hostess Brands Inc. Along with five plants, the sale includes Hostess and Dolly Madison brands Twinkies, Mini Muffins, Cup Cakes, Ho Hos, and Zingers. The report relates that along with contracts to sell other bread and cake businesses, Hostess will raise a combined $856.4 million and possibly more if there is competitive bidding at upcoming auctions. The Apollo-Metropoulos contract will face other bids at a March 13 auction, Hostess said in a statement. New York-based Apollo said it expects the acquisition to be completed in April. Apollo had $110 billion of assets under management in September. Greenwich, Connecticut-based Metropoulos owns numerous consumer food business including Pabst Brewing Co., Stella Foods, and Ghirardelli Chocolates. Among premium brands, it has Mumm and Perrier Jouet champagnes. The report discloses that the first auction will take place on Feb. 28 to learn if anyone will top the $390 million offer from Flowers Foods Inc. for most of the Hostess bread business. Two other buyers signed $56.35 million in contracts for other parts of the bread business and the Drakes cake business. Those auctions will occur March 15 if the bankruptcy judge in White Plains, New York, goes along with the schedule Hostess proposes. Hostess will use sale proceeds to pay down secured debt. 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. IMS HEALTH: S&P Assigns 'BB-' Rating on $1.7BB & EUR755MM Loans --------------------------------------------------------------- Standard & Poor's Ratings Services assigned Danbury, Conn.-based IMS Health Inc.'s proposed $1.766 billion U.S. denominated term loan B-1 and its proposed EUR755 million (US$977 million) term loan B-1 its 'BB-' issue-level rating with a recovery rating of '2', indicating S&P's expectation for substantial (70%-90%) recovery for lenders in the event of payment default. The maturity was extended to Sept. 1, 2017 (from Aug. 27, 2017); all other terms are unchanged. The rating on IMS Health Inc. reflects its "highly leveraged" financial risk profile (according to Standard & Poor's Ratings Services' criteria), highlighted by S&P's expectation for leverage sustained at more than 5x over the near term. S&P believes IMS has a "satisfactory" business risk profile because of its dominant position as a provider of critical information to the pharmaceutical market, offset by its narrow focus in providing information primarily to that market. RATINGS LIST IMS Health Inc. Corporate Credit Rating B+/Stable/-- New Ratings IMS Health Inc. $1.766 term loan B-1 due 2017 BB- Recovery Rating 2 EUR755M term loan B-1 due 2017 BB- Recovery Rating 2 INDALEX LTD: Canadian Supreme Court Rules on Insolvency ------------------------------------------------------- Osler, Hoskin & Harcourt LLP disclosed that the Supreme Court of Canada released its highly anticipated decision in Indalex Limited (Re) on Feb. 1. The ruling stemmed from an appeal of an Ontario Court of Appeal decision that had created commercial uncertainty among many participants in the financial services, pensions and restructuring industries. At issue was a priority dispute between a court ordered super- priority charge granted to a lender under the Companies' Creditors Arrangement Act (Canada) (CCAA) and deemed trusts, including under the Ontario Pension Benefits Act (PBA), in respect of the deficit in a defined benefit pension plan. The Supreme Court of Canada: * Unanimously affirmed the priority of a court ordered charge in insolvency proceedings over the interests of provincial pension claims. * Affirmed the broad scope of a provincial statutory deemed trust over the full value of a pension wind up deficiency. * Left governance challenges for plan sponsors and administrators unresolved. Background Indalex had obtained creditor protection under the CCAA. In the CCAA proceedings, beneficiaries of two underfunded defined benefit pension plans sponsored and administered by Indalex opposed a motion to distribute the proceeds from the sale of the company's assets to satisfy a secured claim. The secured claim was held by Indalex's U.S. based parent after it satisfied a guarantee obligation to an arm's length lender that had advanced interim financing directly to Indalex relying on a court ordered superpriority charge. The beneficiaries argued that assets of Indalex with value equal to the full funding deficiencies (not just unpaid amounts due to be paid) were deemed to be held in trust pursuant to provisions of the PBA, and equivalent proceeds of sale should be remitted to the plans on a priority basis, regardless of the court ordered super- priority of the secured claim. The beneficiaries also argued that there were governance, fiduciary duty and notice issues inherent in Indalex's CCAA process, and the treatment of pension interests therein that justified the imposition of the equitable remedy of a constructive trust. The CCAA court nevertheless approved the distribution to satisfy the secured claim. The Ontario Court of Appeal overturned the CCAA court's decision and found that the deemed trust provisions of the PBA apply to all amounts required to liquidate pension plan wind up liabilities, even if those amounts are not yet due under the plan or regulations. The Court of Appeal held that the deemed trust amount should be paid in priority to the holder of a superpriority "debtor-in-possession" charge over the assets of Indalex, despite the CCAA court order creating the charge specifying that it ranked in priority over trusts "statutory or otherwise". Though one of the two pension plans had not been wound up and the PBA deemed trust provisions did not apply, the Court of Appeal found that there was an intention to wind up the plan and awarded priority to that plan on the basis that Indalex had breached its fiduciary obligations in the course of acting as administrator of the plans (in part through steps taken within the CCAA proceedings), resulting in the imposition of a constructive trust by the Court of Appeal over Indalex's assets. The Supreme Court of Canada was asked to consider and bring clarity to several points of law in Indalex that directly affected the interests of pensioners, pension sponsors and administrators, and financiers in the aftermath of insolvency. However, the scope and importance of many of the issues raised in Indalex apply equally in non-insolvency circumstances and a number of interested parties sought to intervene at the Supreme Court of Canada as a result, including the Canadian Bankers Association, the Superintendent of Financial Services (Ontario), the Canadian Labour Congress, the Canadian Federation of Pensioners and the Insolvency Institute of Canada. About Osler Osler -- http://www.osler.com-- is a business law firm practising nationally and internationally from offices across Canada and in New York. About Indalex Indalex Limited produces soft alloy and aluminum extrusion products in North America. It offers custom extrusions, fabricated components, rigid aluminum conduits, and aluminum billets for industrial, commercial, and residential applications internationally. The company is based in Mississauga, Canada. Indalex Limited operates as a subsidiary of Indalex Holding Corporation. INDIANAPOLIS DOWNS: Court Confirms Sale-Based Plan -------------------------------------------------- Indianapolis Downs, LLC and Indiana Capital Corp. won confirmation of their Modified Second Amended Joint Plan of Reorganization. Bankruptcy Judge Brendan Linehan Shannon, in a Jan. 31 decision, overruled objections lodged by (i) the so-called Oliver Parties, who include senior management and holders of equity and debt instruments of the Debtors; (ii) the United States Trustee; and (iii) parties, who agreed to support the Plan, to certain releases contained in the Plan. The Court also denied the Oliver Parties' motion to disregard the votes of any creditors that executed a post-petition (but pre- disclosure statement) restructuring support agreement with the Debtors. The Debtors are selling substantially all of their assets to rival Centaur LLC for $500,000,001. The Oliver Parties contend the Plan is not feasible because the transactions contemplated under the Plan are conditioned upon receipt of regulatory approvals and licensing by the Indiana Gaming Commission and the Indiana Horse Racing Commission. If the necessary approvals are not obtained, that transaction will fail and the Plan will likewise fail. The uncertainty of receipt of those approvals dooms the Plan, according to the Oliver Parties. According to Judge Shannon, 11 U.S.C. Sec. 1129(a)(11) does not require a guarantee of the plan's success; rather the proper standard is whether the plan offers a "reasonable assurance" of success. Judge Shannon cited rulings in Kane v. Johns-Manville Corp. (In re Johns-Manville Corp.), 843 F.2d 636, 649 (2d Cir. 1988) (holding that a plan may be feasible although its success is not guaranteed); In re Rivers End Apartments, Ltd., 167 B.R. 470, 476 (Bankr. S.D. Ohio 1994) (to establish feasibility, "a [plan] proponent must demonstrate that its plan offers a reasonable prospect of success and is workable"). "It is not at all unusual for consummation of a Chapter 11 plan to be conditioned upon the expectation of approval by regulatory authorities, and courts have not typically held up confirmation of a plan to wait for issuance of such approvals," Judge Shannon said, citing In re Tribune, 464 B.R. 126, 185 (Bankr. D. Del. 2011). Judge Shannon said plan proponent bears the burden of demonstrating that achieving the necessary approvals is not subject to "material hurdles" or readily anticipated, significant obstacles. According to the judge, the Debtors have carried their burden regarding feasibility. "The entity requiring regulatory approvals in this case is Centaur; the record reflects that Centaur already operates the only other racino in Indiana and has been duly licensed to do so. Further, in approving the sale to Centaur, the Court has already made necessary findings regarding Centaur's ability to close the transaction, which is similarly predicated upon regulatory approvals," Judge Shannon explained. "But beyond the evidence presented in the sale hearing -- which was adequate for its purpose -- there are also readily apparent and practical considerations that give the Court confidence that there is a reasonable assurance of success: Centaur is already in this business in the State of Indiana, and has thus already successfully gone through the licensing process. It has committed half a billion dollars to this deal. Absent compelling evidence to the contrary, it is almost inconceivable that Centaur, the Debtors and the other stakeholders in these cases would have headed down this path unless they were confident that the necessary licenses and approvals would be obtained." The Debtors entered bankruptcy with substantial secured indebtedness. The Debtors' filings reflect outstanding first priority secured indebtedness (as of the Petition Date) in excess of $98 million. Second lien debt, secured and junior only to the first lien debt, was in the amount of $375 million, plus accrued interest and fees. An ad hoc group of holders of the second lien debt was organized and participated actively in this matter, both before and after the Petition Date. The Debtors also issued third lien debt, with approximately $78 million (plus accrued interest) of such obligations outstanding as of the Petition Date. Fortress Investment Group, LLC, holds a substantial portion of the third lien debt (and second lien debt as well), and has actively participated in these proceedings both pre- and post-petition. The second and third lien obligations are guaranteed by all of the Debtors and are secured by substantially all of the Debtors' assets. The record reflects that the Debtors struggled to service their debt obligations, and in late 2010 the Debtors failed to make a required interest payment due to holders of the second lien debt. Fortress, the Ad Hoc Second Lien Committee and the Debtors' equity owners made formal and informal restructuring proposals to resolve the Debtors' financial distress. None of these pre-bankruptcy negotiations succeeded in resolving the Debtors' looming crisis. Faced with the impending expiration of a forbearance period, the Debtors commenced these cases in hopes of brokering a comprehensive financial restructuring under the protection of Chapter 11. Following months of negotiations and occasional litigation, the Debtors, Fortress and the Ad Hoc Second Lien Committee ultimately achieved consensus on a process that provided for a "parallel path" approach to the Debtors' reorganization. The parties agreed on a plan that contemplated that the Debtors would test the market to determine whether bids would be made for their assets at a sufficiently high level that their major creditor constituents would support a sale. As an alternative simultaneous approach, these parties agreed that if the marketing effort failed to produce adequate offers, then the plan would permit the Debtors to proceed with a recapitalization. This "parallel path" approach was embodied in a Restructuring Support Agreement dated April 25, 2012. The RSA was filed with the Court on April 25, 2012, immediately after it was executed. The Debtors also filed a proposed Disclosure Statement and accompanying Plan on April 25. After a hearing held on June 21, 2012, the Court approved the Debtors' Disclosure Statement over the objection of the Oliver Parties. The Debtors' marketing effort ultimately proved successful, culminating in the half billion dollar bid from Centaur. No superior competing bids were received, and the Debtors proceeded forward with a combined hearing to request approval of the sale to Centaur, and confirmation of the Plan which is predicated upon that sale. The Court held that combined hearing on Oct. 19 and 22, 2012. At the confirmation hearing, the Court heard and considered testimony from six live witnesses, and collectively admitted into evidence over 200 exhibits from the Debtors and the Oliver Parties. By Order dated Oct. 31, 2012, the Court approved the sale of substantially all of the Debtors' assets to Centaur and overruled the Oliver Parties' objections relating to the sale. The sale transaction is proceeding forward to closing, subject to receipt of various regulatory approvals needed by Centaur from the State of Indiana. A copy of the Court's Jan. 31 Memorandum Opinion is available at http://is.gd/wWt0qffrom Leagle.com. About Indianapolis Downs Indianapolis Downs LLC operates Indiana Live -- http://www.indianalivecasino.com/-- a combined race track and casino at a state-of-the-art 283 acre Shelbyville, Indiana site. It also operates two satellite wagering facilities in Evansville and Clarksville, Indiana. Total revenue for 2010 was $270 million, representing an 8.7% increase in 2009. The casino captured 53% of the Indianapolis market share. In July 2001, Indianapolis Downs was granted a permit to conduct a horse track operation in Shelvyville, Indiana, and started operating the track in 2002. It was granted permission to operate the casino at the racetrack operation in May 2007. The casino began operations in July 2010. Indianapolis Downs and subsidiary, Indianapolis Downs Capital Corp., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11046) in Wilmington, Delaware, on April 7, 2011. Indianapolis Downs estimated $500 million to $1 billion in assets and up to $500 million in debt as of the Chapter 11 filing. According to a court filing, the Debtor owes $98,125,000 on a first lien debt. It also owes $375 million on secured notes and $72.6 million on subordinated notes. Matthew L. Hinker, Esq., Scott D. Cousins, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP in Wilmington, Delaware, have been tapped as counsel to the Debtors. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, is the conflicts counsel. Lazard Freres & Co. LLC is the investment banker. Bose Mckinney & Evans LLP and Bose Public Affairs Group LLC serve as special counsel. Kobi Partners, LLC, is the restructuring services provider. Epiq Bankruptcy Solutions is the claims and notice agent. David W. Carickhoff, Esq., at Blank Rome LLP; and Scott L. Alberino, Esq. -- salberino@akingump.com -- at Akin Gump Strauss Hauer & Feld LLP, in Washington, DC, represent the Ad Hoc Second Lien Committee. Thomas M. Horan, Esq. -- thoran@wcsr.com -- at Womble Carlyle Sandridge & Rice, LLP; and Brian L. Shaw, Esq. -- Bshaw100@shawgussis.com -- at Shaw Gussis Fishman Wolfson & Towbin LLC, represent the so-called Oliver Parties. The Oliver Parties consist of Ross J. Mangano, both individually and as the trustee of the Jane C. Warriner Trust dated February 26, 1971, the J. Oliver Cunningham Trust dated February 26, 1971, and the Anne C. McClure Trust dated February 26, 1971, Troon & Co., John C. Warriner, Oliver Estate, LLC, and Oliver Racing, LLC. Matthew Lunn, Esq. -- mlunn@ycst.com -- at Young Conaway Stargatt & Taylor, LLP; and Kristopher Hansen, Esq. -- khansen@stroock.com -- Stroock & Stroock & Lavan, represent Fortress Investment. INTERFACE SECURITY: Moody's Rates $230MM Second Lien Notes 'B3' --------------------------------------------------------------- Moody's Investor Service converted the Corporate Family Rating and the second lien notes rating of Interface Security Systems Holdings, Inc. to definitive from provisional ratings upon closing of the refinancing transaction. Concurrently, Moody's assigned a B3-PD Probability of Default Rating. The ratings outlook remains stable. The following ratings were converted to definitive: - Corporate Family Rating, to B3 from (P)B3 - USD230 (upsized from USD225) million second lien notes due 2018, to B3 (LGD4, 55%) from (P)B3 (LGD4, 56%) Moody's assigned the below rating: - Probability of Default Rating, B3-PD Ratings Rationale The B3 CFR reflects Interface's modest revenue base, even with organic growth of 30% in 2011. Pro forma for the acquisition of Westec, revenues are approximately USD114 million. The ratings are constrained by a short operating history at the current size and scale, significant customer concentration, and weak credit metrics calculated under generally accepted accounting principles (GAAP). Because of management's strategy to grow the commercial business, Moody's expects reported free cash flow to remain materially negative over the next 12-18 months. Interface intends to partially fund new installations at customer locations from drawings on a USD45 million revolver (unrated). Nonetheless, Moody's anticipates at least USD25 million of revolver availability throughout 2013. If Interface were to instead maintain a flat or steady state recurring monthly revenue base, Moody's estimates that levered free cash flow would be modestly positive in 2013. Pro forma debt / RMR of approximately 29 times (excluding preferred stock) is comparatively lower than debt / RMR at other single B rated alarm monitoring issuers. The ratings are further supported by Interface's contracted backlog, the steady and predictable revenue streams provided by subscriber contracts, and the high mix (greater than 75% of RMR) of commercial revenues which inherently generate higher average rates per unit and lower attrition rates than are typical with residential subscribers. The stable outlook reflects Moody's expectation that Interface will maintain an adequate liquidity profile over the next 12-18 months, despite some reliance on the revolver to partly fund expected double-digit revenue growth. The ratings could be upgraded if Interface can organically grow RMR, improve GAAP credit metrics and materially improve its liquidity profile while maintaining debt / RMR and commercial attrition rates at current levels. The ratings could be downgraded if liquidity deteriorates, debt/RMR approaches 35 times, ARPU declines meaningfully, or commercial attrition rates weaken. The principal methodology used in rating Interface Security Systems Holdings, Inc. was the Global Business & Consumer Service Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Interface provides alarm monitoring and secured broadband services to approximately 107 thousand customers in the U.S. The company is majority-owned by affiliates of SunTx and reported revenues of USD104 million in the twelve months ended September 30, 2012. INTERTAPE POLYMER: S&P Raises CCR to 'B+'; Outlook Stable --------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Intertape Polymer Group Inc. to 'B+' from 'B'. The outlook is stable. At the same time, S&P raised its issue-level rating on the company's subordinated notes, which are issued by subsidiary Intertape Polymer U.S. Inc., to 'B-' from 'CCC+'. The recovery rating on the notes remains unchanged at '6', indicating S&P's expectation for negligible (0% to 10%) recovery in the event of a payment default. "The upgrade reflects a significant increase in Intertape's 2012 earnings, resulting from an improved pricing environment, a shift in mix to higher margin products, and ongoing cost reduction initiatives," said Standard & Poor's credit analyst Danny Krauss. S&P expects 2012 EBITDA of more than $85 million, substantially higher than the $63 million generated the prior year. Higher earnings and cash flows have allowed for significant debt reduction and thus a meaningful improvement in credit metrics. The key ratio of funds from operations (FFO) to total debt was 32% as of Sept. 30, 2012--a significant increase from 17% a year earlier. S&P adjusts debt by about $30 million to include the present value of operating leases and tax-adjusted postretirement benefit obligations. S&P believes that the ratio will continue to reflect volatility in the company's operating performance and, over the business cycle, S&P expects the ratio to average about 20%, which S&P considers appropriate for the rating. The ratings on Intertape reflect S&P's assessment of the company's business risk profile as "weak" and financial risk profile as "aggressive." With annual sales of about $780 million as of Sept. 30, 2012, Intertape manufactures mainly tapes, films, and woven products for the industrial, packaging, housing and construction, and food and consumer durables end markets. "The outlook is stable. We expect the company's continued focus on shifting to a higher margin product mix, ongoing cost reduction initiatives, and new product introductions will allow it to maintain EBITDA margins at greater than historical levels. We believe that Intertape is well positioned to benefit from the cyclical recovery in the U.S. housing market and continued pickup in industrial production. In our base-case scenario, we assume that the company will repay the remaining subordinated notes in a timely manner while maintaining sufficient liquidity under the ABL facility. Given the current limitations in the company's business risk profile, highlighted by its limited diversity and meaningful exposure to cyclical end markets, we view the possibility of an upgrade over the next year as unlikely," S&P said. "We could lower the ratings if the company is unable to pass on raw material cost increases to its customers in a timely manner, or if more competitive market conditions cause the recent improvement in EBITDA to reverse and free cash flow to turn negative. Based on our downside scenario, we could lower the ratings if EBITDA margins deteriorate by 400 basis points or more from current levels, coupled with a moderate drop in revenues. We could also lower the ratings if aggressive financial policy decisions, including large outlays for shareholder rewards or acquisitions, reduce the company's liquidity position and result in the FFO-to-debt ratio deteriorating to about 15%," S&P added. JEFFERSON COUNTY, AL: Bondholders Begin Hearing to Take Over ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a hearing began in the municipal bankruptcy of Jefferson County, Alabama, where holders of defaulted sewer bonds are asking the bankruptcy judge for permission to continue a lawsuit in state court, re-impose a receiver to run the sewage system, and raise rates paid by customers. The report notes that once the court receives all the evidence and hears the lawyers' arguments, U.S. Bankruptcy Judge Thomas B. Bennett in Birmingham typically issues a lengthy, erudite opinion a month or two later, laying out the historical underpinnings of the legal and factual issues. The report recounts that on a dispute over closing a county hospital, Judge Bennett wrote an opinion in December explaining why the county isn't solely responsible for its financial difficulties. Judge Bennett said that the county's fiscal problems resulted from failure of the legislature to give the county taxing authority to make up for lost revenue when a wage tax was voided by the state Supreme Court. He said anyone is "ill-informed" who believes financial problems are only the result of the county's conduct. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. LEHMAN BROTHERS: Massachusetts Agency Wants to Pursue Action ------------------------------------------------------------ Massachusetts Housing Finance Agency asked the U.S. Bankruptcy Court for the Southern District of New York for an order clarifying that the automatic stay does not preclude Mass Housing from filing a declaratory judgment action in Massachusetts state court against Lehman Brothers Special Financing, Inc. and Lehman Brothers Holdings, Inc. In the alternative, Mass Housing asks relief from the automatic stay, pursuant to Section 362(d) of the Bankruptcy Code, so that it may commence the litigation. D. Ross Martin, Esq. at Ropes & Gray LLP, in Boston, Massachusetts -- ross.martin@ropesgray.com -- relates that Mass Housing seeks to file a complaint against LBSF and LBHI in the Business Litigation Session of the Superior Court of Massachusetts, seeking a declaration that Lehman's purported termination of certain interest rate swap transactions, between Mass Housing and LBSF, was not valid because Mass Housing had validly terminated the swap transactions at issue over two years earlier. Mass Housing is an independent public agency that was created by an act of the Massachusetts Legislature in 1966 to increase the availability of affordable rental and for-sale housing in the Commonwealth of Massachusetts. Mass Housing provides long-term fixed rate mortgage loans to low-income residents of the Commonwealth of Massachusetts and long-term fixed rate mortgage loans to developers of low-income multi-family housing in the Commonwealth. Mass Housing also finances loans to low-income residents and housing projects through the issuance of bonds, among other financing sources. Prior to LBSF's bankruptcy filing, Mr. Martin relates that Mass Housing entered into various long-term swaps with LBSF to finance housing projects with forty-year fixed rate loans funded by variable rate bonds, and to hedge its real exposure to interest rate fluctuations that could impact its lending activities and ability to pay bond holders. Because Mass Housing was hedging substantial financial risk, he asserts that it was particularly important to Mass Housing to have a financially stable counterparty for the life of its swaps, which has become ineffective after LBSF filed for Chapter 11 with an eye towards an orderly liquidation and wind-down. Mass Housing properly terminated the interest rate swaps at issue in June 2009 solely because of Lehman's bankruptcy and immediately paid LBSF over $5.69 million as a termination payment, Mr. Martin discloses. However, he asserts, LBSF consistently demanded an additional termination payment from Mass Housing, and following negotiations, LBSF demanded a substantially higher termination payment. Mass Housing specifically negotiated with LBSF for the right to litigate disputes arising out of the interest rate swap transactions in the Commonwealth, Mr. Martin says. He contends that Mass Housing has filed this request, however, out of an abundance of caution to confirm that the automatic stay does not prohibit Mass Housing from filing the Complaint against LBSF in the Commonwealth. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LEHMAN BROTHERS: Inks Settlement With Standard Chartered Bank ------------------------------------------------------------- Lehman Brothers Holdings Inc. struck a deal with Standard Chartered Bank and Standard Chartered Bank Korea, which calls for the dismissal of its lawsuit against the banks. The lawsuit, which Lehman filed early last year, was halted pursuant to an earlier order from the bankruptcy court overseeing its bankruptcy case. In its lawsuit, the company asserted claims for fraudulent transfers and asked for the reclassification of Standard Chartered's claims. Under the deal, both sides agreed for the dismissal of the lawsuit and the allowance of the banks' claims under Lehman's Chapter 11 plan. SCBK can assert a claim of more than $36.4 million against Lehman while the other bank can assert a claim of more than $25.6 million. The deal is formalized in a 12-page agreement which can be accessed for free at http://is.gd/fAxuBw Weil Gotshal & Manges LLP, the company's legal counsel, was slated to present the agreement to Judge James Peck for signature on January 29. Objections were due by January 28. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LEHMAN BROTHERS: Has Deal to Cut Drawbridge Claim to $25.6-Mil. --------------------------------------------------------------- Lehman Brothers Holdings Inc. has signed an agreement, which calls for the amendment of Drawbridge Global Macro Master Fund Ltd.'s claim against the company. Drawbridge filed a claim in the sum of $120,365,128, which stems from a guarantee signed on November 27, 2002 and another guarantee signed by the executive committee of Lehman's board of directors. Under the deal, Drawbridge can only assert a claim of $25,623,204 against the company with respect to the 2002 guarantee. Lehman also agreed to withdraw the subpoena it served against the fund. The agreement, which needs court approval, can be accessed for free at http://is.gd/IByoZF The subpoena was served on July 23, 2012, to force Drawbridge to turn over certain documents to Lehman's attorneys as part of its investigation of companies involved in various Lehman deals. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LIFEPOINT HOSPITALS: Fitch Assigns 'BB+' Rating to $225M Term Loan ------------------------------------------------------------------ Fitch Ratings has assigned a 'BB+' rating to LifePoint Hospitals, Inc.'s proposed $225 million bank term loan. The ratings apply to approximately $1.7 billion of debt at Sept. 30, 2012. Proceeds of the new term loan are expected to be used to refinance the $225 million 3.25% convertible senior subordinated debentures due 2025, which are puttable to the company in February 2013. The proposed bank term loan is permitted based on the terms of the company's credit agreement, under which an accordion feature permits additional secured debt subject to a leverage ratio condition. Sensitivity/Rating Drivers -- At 3.3x EBITDA at Sept. 30, 2012, LifePoint's gross debt leverage is amongst the lowest in the for-profit hospital industry. -- Fitch expects debt could trend higher during 2013 as the result of funding acquisitions and a higher level of capital expenditures, but to remain consistent with the company's publicly stated leverage target of 3x-4x EBITDA. -- Liquidity is solid. While lower profitability and higher capital expenditures could pressure the level of free cash flow (FCF; cash from operations less dividends and capital expenditures), Fitch expects it to remain above $150 million annually. -- Organic operating trends in the for-profit hospital industry are presently weak, but Fitch expects the sector to benefit from the implementation of the Affordable Care Act (ACA) starting in 2014. LifePoint's recent hospital acquisitions are supporting growth for the company. Solid Balance Sheet Helps Acquisition Strategy LifePoint has consistently demonstrated a strong level of financial flexibility in recent years and at current levels the financial and credit metrics provide significant headroom within the 'BB' rating category. Gross debt leverage is among the lowest in the for-profit hospital industry. Pro forma for the proposed bank debt and pay-down of the convertible debentures, debt-to- EBITDA will equal 1.4x through the senior secured bank debt, 2.1x through the senior unsecured notes, and 3.3x through the senior subordinated convertible notes. Hospital acquisitions have recently been a top use of cash for LifePoint, consuming 50%, 30%, and 71% of CFO in 2010, 2011 and the LTM ended Sept. 30, 2012, respectively. Fitch estimates that the company's recent acquisitions will contribute about $240 million of revenue in 2012, or about 6.7% of the company's 2011 revenue before bad debt expense of $3.5 billion. In recent years, LifePoint has primarily used cash on hand to fund a series of small acquisitions, focusing on inpatient acute care hospital assets. With CFO trending around $350 million and capital expenditures around $225 million, Fitch estimates that LifePoint can fund two or three transactions with cash on hand annually. Fitch believes that LifePoint's relatively stronger balance sheet, coupled with a track record of successfully managing sole provider hospitals in rural markets, help make the company an attractive acquirer of hospitals in its preferred markets. However, Fitch does not believe that the company has a financial incentive to manage its balance sheet with debt below 3.0x EBITDA and expects leverage could trend higher in 2013 due to the funding of hospital acquisitions and share repurchases. Good Financial Flexibility A favorable debt maturity schedule and adequate liquidity also support LifePoint's credit profile. There are no debt maturities in the capital structure until 2014 when the $575 million senior subordinated convertible notes mature. At Sept. 30, 2012, liquidity was provided by approximately $98 million of cash, availability on the company's $350 million bank credit facility revolver ($280 million available), and FCF ($121 million for the latest 12 months [LTM] period, defined as cash from operations less dividends and capital expenditures). Fitch projects that LifePoint's FCF will contract by about $30 million in 2012 versus the 2011 level of $182 million. This is because of lower profitability and higher capital expenditures. An expectation for a slight contraction in the EBITDA margin in 2012 is primarily because of the integration of less profitable acquired hospitals. Rural Market Recovery Lagging Broader Industry LifePoint is the only pure-play non-urban hospital operator in the industry, with a sole-provider position in 52 of its 56 markets, although it has gained exposure in larger rural and small suburban markets through some of its recent acquisitions. Having sole- provider status in the vast majority of its markets confers certain benefits on LifePoint in capturing organic patient volume growth as well as in negotiating price increases with commercial health insurers. While LifePoint's organic patient volume growth has recently lagged the broader for-profit hospital industry, the company's results have not been inconsistent with the experience of other rural and suburban market hospital operators. While persistently weak organic volume trends across the industry began to show signs of improvement in the second half of 2011, providers in urban markets have exhibited a much stronger rebound in volume growth. LifePoint's management has attempted to address lagging volumes by focusing physician recruitment on fast-growing specialty areas and ramping up its outpatient services. This strategy appears to be having some effect since the company's organic volume growth improved slightly in the third quarter of 2012. Fitch notes that LifePoint's same-hospital net revenue growth of 1.3% in the third quarter of 2012 slowed relative to recent periods, primarily because of a weak trend in pricing. Same- hospital net revenue per adjusted admission was up only 2.9% year over year. This is concerning since strong trends in pricing have been supporting top-line growth for non-urban hospital providers in light of weak volume growth for the past several quarters. Healthcare Reform Positive Driver In 2014 The main provisions of the ACA that will affect the for-profit hospital industry include the mandate for individuals to purchase health insurance or face a financial penalty, and the expansion of Medicaid eligibility. These elements are currently expected to take effect in early 2014. Fitch expects an initially positive effect on the acute-care hospital industry because of the coverage expansion elements of the ACA, mostly as the result of reduced levels of uncompensated care, but also through a mildly positive boost to utilization of healthcare services. Over the several years following the coverage expansion, Fitch expects to see some erosion of the initial benefits due to a reduction in Medicare reimbursement required by the ACA, as well as likely lower rates of commercial health insurance reimbursement. What Could Trigger A Rating Action: LifePoint's current financial and credit metrics provide decent headroom within the 'BB' rating category. However, a positive rating action is unlikely in the near term unless Fitch believes the company will maintain its gross debt level at or below 3.0x EBITDA. A downgrade could result from gross debt to EBITDA being maintained above 4.0x and FCF generation remaining below $150 million annually. Drivers of higher leverage and lower cash generation could include leveraging acquisitions, difficulties in integrating recent acquisitions, and a persistently weak organic operating trend in the for-profit hospital sector. DEBT ISSUE RATINGS Fitch currently rates LifePoint as: -- IDR 'BB'; -- Secured bank facility 'BB+'; -- Senior unsecured notes 'BB'; -- Subordinated convertible notes 'BB-'. LIFEPOINT HOSPITALS: Moody's Gives 'Ba1' Rating to USD225MM Loan ---------------------------------------------------------------- Moody's Investors Service assigned a rating of Ba1 (LGD 3, 31%) to LifePoint Hospitals, Inc.'s. (LifePoint) new senior secured term loan B. Moody's existing ratings on the company, including the Ba2 Corporate Family Rating and Ba2-PD Probability of Default Rating, are unchanged and the outlook for the ratings remains stable. Moody's understands that the proceeds of the new term loan will be used to refinance the company's 3.25% convertible senior subordinated notes, which are puttable back to company in March 2013. Following is a summary of Moody's ratings actions. Ratings assigned: USD225 million senior secured term loan B due 2017, Ba1 (LGD 3, 31%) Ratings unchanged / LGD assessments revised: Senior secured revolving credit facility expiring 2017, to Ba1 (LGD 3, 31%) from Ba1 (LGD 2, 28%) Senior secured term loan A due 2017, to Ba1 (LGD 3, 31%) from Ba1 (LGD 2, 28%) 6.625% senior unsecured notes due 2020, to Ba1 (LGD 3, 31%) from Ba1 (LGD 2, 28%) 3.25% convertible senior sub notes due 2025, to Ba3 (LGD5, 84%) from Ba3 (LGD 5, 82%) Corporate Family Rating, Ba2 Probability of Default Rating, Ba2-PD Speculative Grade Liquidity Rating, SGL-2 Ratings Rationale LifePoint's Ba2 Corporate Family Rating reflects Moody's expectation that the company's operating performance will result in strong interest coverage and cash flow coverage of debt. Leverage is expected to remain moderate and could increase modestly as the company pursues acquisitions. Therefore, Moody's does not expect a near term reduction in debt as the company deploys free cash flow to acquisitions and share repurchase activity. The rating also incorporates Moody's expectation of a continuation of the difficult operating environment characterized by increasing bad debt expense and weak volume trends. Given the expectation that leverage will not likely decline meaningfully beyond current levels and could increase modestly, Moody's does not expect an upgrade in the near term. However, Moody's could upgrade the rating if the company continues to grow earnings through acquisitions that do not significantly disrupt operations or require a material use of incremental debt, such that debt to EBITDA is sustained at or below 3.0 times. Moody's could downgrade the rating if it believes LifePoint's financial policy is changing and aggressively pursues debt financed acquisitions or share repurchases or if the company experiences operating challenges such that leverage was expected to approach 4.0 times. The principal methodology used in this rating was the Global Healthcare Service Providers published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Brentwood, Tennessee, LifePoint operates general acute care hospitals with operations predominantly in non-urban communities. The company generated revenue of approximately USD3.9 billion, before considering the provision for doubtful accounts (USD3.3 billion net of the provision), for the twelve months ended September 30, 2012. LIFEPOINT HOSPITALS: S&P Assigns 'BB-' Rating to $225MM Term Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned Brentwood, Tenn.-based LifePoint Hospitals Inc.'s proposed $225 million senior secured term loan its 'BB-' issue-level rating (the same as the 'BB-' corporate credit rating on the company). S&P also assigned the notes a recovery rating of '3', indicating its expectation for meaningful (50% to 70%) recovery for lenders in the event of a payment default. Although the transaction replaces unsecured debt with secured debt, recovery prospects for the company's secured debt remain consistent with the current recovery rating. The company plans to use the proceeds to refinance existing debt. LifePoint's "weak" business risk profile reflects reimbursement risk, regional competition despite its large number of sole community providers, and the limited supply of health care professionals in its largely nonurban markets. LifePoint's leverage remains consistent with its "significant" financial risk profile, considering its acquisition and share repurchase activity. S&P expects EBITDA to grow through 2013, about in line with revenues. The EBITDA expansion, and limited borrowing needs for its ongoing operations, could keep leverage at the low end of LifePoint's 3x-4x target range. RATINGS LIST LifePoint Hospitals Inc. Corporate Credit Rating BB-/Stable/-- New Ratings LifePoint Hospitals Inc. $225M sr secrd term loan BB- Recovery Rating 3 LODGENET INTERACTIVE: Loan Approved, Confirmation Set for March 7 ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that LodgeNet Interactive Corp., a provider of television and Internet access for the hotel industry, began a prepackaged Chapter 11 on Jan. 27 in New York and may wrap up the reorganization at a confirmation hearing on March 7. According to the report, the bankruptcy judge granted the company interim authority to borrow $5 million from a loan facility, ultimately providing $15 million in new credit. The final hearing to approve financing is scheduled for Feb. 27. The loan for the Chapter 11 effort will include the conversion of $15 million in pre-bankruptcy secured debt into an obligation created during the Chapter 11 case. Gleacher & Co. is agent for the lenders. The plan, the report relates, was accepted by affected creditors before the bankruptcy filing. At the March 7 hearing, the judge will first determine if disclosure materials provided sufficient information so that creditors could vote intelligently. Next, she will consider signing a confirmation order approving the plan. The Plan provides for an amendment to the terms of the Debtors' funded debt to, among other things, extend the maturity date, adjust the interest rate, modify certain financial covenants, and potentially bifurcate the loan into a first lien and a second lien piece. As of Dec. 31, 2012, the Debtors owe $332.6 million under a term loan and $21.5 million under a revolver under a credit agreement provided by lenders led by Gleacher Products Corp., as administrative agent. The Plan also contemplates the Debtors' entry into a new agreement pursuant to which DIRECTV will assume the cost of installation of systems in hotels and healthcare facilities, alleviating the Debtors of expensive and cash intensive burden. Prior to the filing of the chapter 11 cases, certain investors signed an investment agreement, dated as of Dec. 30, 2012, under which they agree to purchase 100% of the shares of the new common stock in Reorganized LodgeNet Interactive for at least $60 million in the aggregate. The group of investors is led by Col-L Acquisition, LLC, a subsidiary of Colony Capital, LLC. Colony was selected by the Debtors following a thorough search for potential acquirers or investors by the Debtors and their advisors. On or before the Effective Date of the Plan, Reorganized LodgeNet Interactive will enter into an amended credit agreement providing for an exit term loan with a term of five years, and in the aggregate principal amount of $346,406,542. Reorganized LodgeNet Interactive also expects to enter into a $20 million revolving loan agreement. The Plan classifies claims against, and interests in, the Debtors, and provides for the treatment of each class as follows: Class Treatment ----- ----------- 1: Priority Non-Tax Claims Payment in full in cash on Effective Date or later date on which such Claim is Allowed 2: Prepetition Lender Claims Pro rata share of the Exit Term Loan 3: Other Secured Claims In Debtors' sole discretion, any of (i) payment in full in cash on the Effective Date or later date on which such Claim is Allowed, (ii) reinstatement pursuant to Section 1124 of the Bankruptcy Code or (iii) such other distribution in satisfaction of section 1129 of the Bankruptcy Code 4: General Unsec. Claims On Effective Date or later date on which such Claim is Allowed, payment in full in cash plus postpetition interest calculated in accordance with the Plan 5: Intercompany Claims Reinstated by the Debtors 6: Interests in Subsidiary Debtors Interests will continue to be owned by same entity that owned on Petition Date 7: Series B Preferred Interests in LodgeNet Interactive No distribution; deemed cancelled 8: Interests in LodgeNet Interactive No distribution; deemed cancelled A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/LodgeNet_Disc_Statement.pdf About LodgeNet Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq: LNET) -- http://www.lodgenet.com/-- provides interactive media and connectivity services to hospitality and healthcare businesses and the consumers they serve. Recently named by Advertising Age as one of the Leading 100 US Media Companies, LodgeNet Interactive serves roughly 1.5 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television, Broadband and Advertising Media Solutions along with nationwide technical and professional support services. LodgeNet Interactive owns and operates businesses under the industry leading brands: LodgeNet, The Hotel Networks and LodgeNet Healthcare. The Company reported a net loss of $631,000 in 2011, a net loss of $11.68 million in 2010, and a net loss of $10.15 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $291.74 million in total assets, $448.72 million in total liabilities and a $156.98 million total stockholders' deficiency. LodgeNet Interactive filed a Chapter 11 petition (Bank. S.D.N.Y. Case No. 13-10238) on Jan. 27, 2013. The prepackaged Chapter 11 filing was commenced in order to effect a recapitalization in which a syndicate of investors led by Colony Capital will invest $60 million in LodgeNet. The petition was signed by James G. Naro, the Company's Co-Chief Executive Officer. The Hon. Shelley C. Chapman presides over the case. Weil, Gotshal & Manges LLP serves as the Debtors' counsel. METRO TOOL: Case Summary & 6 Unsecured Creditors ------------------------------------------------ Debtor: Metro Tool Centers, LLC 701 North Colony Road Wallingford, CT 06492 Bankruptcy Case No.: 13-30194 Chapter 11 Petition Date: January 30, 2013 Court: United States Bankruptcy Court District of Connecticut (New Haven) Judge: Lorraine Murphy Weil Debtor's Counsel: Peter L. Ressler, Esq. GROOB RESSLER & MULQUEEN 123 York Street, Ste 1B New Haven, CT 06511-0001 Tel: (203) 777-5741 Fax: (203) 777-4206 E-mail: ressmul@yahoo.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's six largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ctb13-30194.pdf The petition was signed by Eric Cremo, member. MF GLOBAL: Accord Between SIPA Trustee & UK Unit Approved --------------------------------------------------------- Bankruptcy Judge Martin Glenn gave his stamp of approval on a settlement and compromise between: -- James W. Giddens, the Trustee for the liquidation of MF Global Inc. under the Securities Investor Protection Act, 15 U.S.C. Sec. 78aaa, et seq.; and -- MF Global UK Limited (in special administration) and the MFGUK Joint Special Administrators Richard Heis, Richard Fleming and Michael Pink, on the other. The Settlement Agreement brings to an end an expensive dispute between the insolvency administrators that has held up making substantial distributions to U.S. commodities customers of MFGI. The insolvency administrators have worked constructively to reach an agreement that is in the best interests of the insolvency estates and their creditors. MFGI and MFGUK were subsidiaries of MF Global Holdings Ltd., which was the parent of nearly fifty direct or indirect subsidiaries. Holdings filed for Chapter 11 protection on the morning of Oct. 31, 2011. Soon after, the directors of MFGUK petitioned the High Court of England and Wales to place MFGUK in special administration, and the Securities Investor Protection Corporation commenced a proceeding to liquidate MFGI under SIPA. The High Court appointed Richard Heis, Richard Fleming, and Michael Pink of KPMG LLP as the JSAs. The United States District Court for the Southern District of New York appointed the Trustee for the SIPA liquidation of MFGI. MFGI was MF Global's principal U.S. broker-dealer and futures commission merchant. MFGI traded through more than seventy exchanges globally, including through affiliates in the United Kingdom, Australia, Singapore, India, Canada, Hong Kong and Japan, both on its own behalf and on behalf of customers. A number of affiliates of MFGI in turn traded through accounts with MFGI as their FCM or broker-dealer in the United States. MFGUK, based in London, was MF Global's principal European broker- dealer and dealt in commodities, fixed income, equities, foreign exchange, futures and options. MFGUK is authorized and regulated by the Financial Services Authority in the U.K., and traded and settled securities on European and other foreign exchanges for its customers, affiliates (including MFGI), and on its own behalf. Prior to Oct. 31, 2011, there were extensive dealings between MFGI and MFGUK. The Parties have expended significant effort in investigating these dealings. As a result, the SIPA Trustee and the JSAs have identified and brought claims against each other's respective estates. The Trustee and the JSAs have exchanged tens of thousands of pages of documents, and the Trustee's professionals regularly corresponded with the JSAs' professionals to efficiently and expeditiously resolve of the Parties' claims. Despite these efforts to work cooperatively, the Parties identified significant disputes, some of which have led to litigation. The necessary process of investigating, conducting litigation, and preparing for further litigation of these claims has already cost substantial sums. If the Parties were to continue to advance the litigation between them, significantly more expense would be incurred. Substantial briefing has already occurred before the High Court for issues related to the so-called MFGI 30.7 Client Asset Claim and the RTM collateral, together with substantial discovery in relation to the MFGI 30.7 Client Asset Claim. One of the key legal issues originally underlying the SIPA Trustee's claim in the MFGUK special administration was the determination of the priority under English law for distribution of the funds and assets that the Trustee sought to reclaim on behalf of MFGI's former customers. Given the potentially significant differences in the estimated recovery rates for the categories of property, this determination would have a significant impact on the amount the Trustee could expect to recover from the MFGUK special administration. Claims by MFGI against MFGUK The MFGI Claims against MFGUK amount to a total of approximately $910 million of Client Money and Client Assets and nearly $500 million of unsecured creditor claims: * The MFGI 30.7 Client Asset Claim of approximately $640 million in property that the Trustee believed was or should have been secured for former MFGI 30.7 Customers. * The MFGI Client Money Claim of approximately $270 million, which was comprised of approximately $95 million in respect of MFGI's open positions held with MFGUK as of October 31, 2011. The MFGI Client Money Claim also includes the $175 million wire transfer from MFGI to MFGUK on October 28, 2011. * Unsecured creditor claims of approximately $465 million relating to collateral posted with respect to RTM transactions, intercompany repurchase transactions, and other miscellaneous items. 30.7 Client Asset Claim. MFGI's U.S. futures and options customers who wished to trade on non-U.S. exchanges -- 30.7 Customers -- deposited cash for margin requirements for these trades into MFGI's segregated 30.7 accounts held with Harris Bank. MFGI, which was not authorized to trade on non-U.S. exchanges, conducted its trading on foreign exchanges (with the exception of Canadian exchanges), through MFGUK. Where MFGUK was to act as carrying broker for such trades, MFGI transferred the margin to MFGUK -- 30.7 Funds. Although MFGUK was aware that MFGI was acting on behalf of its underlying 30.7 Customers, the JSAs' position is that MFGUK did not consistently hold the 30.7 Funds" transferred primarily in the form of U.S. Treasury Bills on a secured basis. As of October 31, 2011, MFGI's records show that the value of the margin posted to the relevant secured 30.7 account was $639,918,174. The amount of 30.7 Funds represents a sizeable portion of the total shortfall in the 30.7 estate property available for distribution to 30.7 Customers. For the purposes of the Settlement Agreement, the JSAs have agreed to accept the full value of all claims in respect of the 30.7 Funds, $639,918,174, with a portion (approximately $196 million) being returned as a client asset, and the balance being returned as an unsecured creditor claim. RTM Starting around 2010, MF Global began a policy of accumulating a portfolio of European sovereign debt securities. Investment in these securities peaked at nearly $7 billion in October 2011. Generally, MFGUK purchased the securities on the market and then MFGI and MFGUK entered into repurchase transactions with each other, whereby the securities were sold at fixed prices on the terms that equivalent securities would be repurchased at a later date. These transactions were known as repos to maturity -- RTM -- since the repurchase date under the repos would match the maturity date of the securities, which was generally 12 to 18 months from the beginning of the transaction. There are a number of grounds for dispute in relation to the valuation of the RTM claim, which could potentially involve litigation both in England and in the United States. Hindsight Proceeding On May 3, 2012, the JSAs filed an application with the High Court seeking directions on the appropriate valuation methodology for client money claims in which the clients held open positions as of the date MFGUK entered special administration. The Trustee was not a party to the Hindsight Proceeding but, because the relevant part of the MFGI Client Money Claim was prepared on the basis of values as of October 31, 2011, the outcome could impact the MFGI Client Money Claim. Claims by MFGUK against MFGI The JSAs have also filed claims against MFGI, which, net of duplicate claims, asserts approximately $410 million in claims: $258 million in commodities claims (the MFGUK 4(d) Commodities Claim and the MFGUK 30.7 Commodities Claim) and $147 million in securities claims (the MFGUK Securities Claim and MFGUK DTC Box 7423 Claim). The JSAs have also filed the MFGUK Unsecured General Creditor Claims in the amount of approximately $5 million. Duplicative Claims Certain of the 30.7 Customers of MFGI have submitted or may submit claims against MFGUK in respect of the MFGUK/MFGI Futures and Options Business. Duplicative Claims compete with the claims submitted by the SIPA Trustee against MFGUK. At present, there are approximately 116 known Duplicative Claims. The Parties take the position that the Trustee is the proper and exclusive claimant against MFGUK for the 30.7 Funds, and that the right to recover the 30.7 Funds rests properly and exclusively in the Trustee. The Settlement Agreement therefore provides that existing Duplicative Claims will not be continued against MFGUK, and that further Duplicative Claims will be barred by order of this Court. This is a condition of the JSAs giving effect to the Settlement Agreement. Terms of the Settlement Agreement The Settlement Agreement is comprised of a number of different agreed claim amounts, which include various provisions for setoffs and shortfalls. Although subject to subsequent adjustments in certain cases, the agreed amounts under the Settlement Agreement are as follows: * MFGI Client Asset Claim: $192 million (net of expenses); * MFGI Client Money Claim: $54 million (a conservative estimate pending resolution of Hindsight Proceeding), to be paid at an estimated initial dividend rate of 60 cents; * MFGI Unsecured Creditor Claim: approximately $323 million (subject to further adjustment due to a variety of factors following the Settlement Agreement becoming effective), to be paid at an estimated initial dividend rate of 20 cents; and * The total approximate initial distribution from MFGUK (in special administration) to the MFGI estate following the Effective Date: $291 million. Therefore, the total combined recovery will be approximately $500 million to $600 million, net of offsets of MFGUK's claims into the MFGI estate. There are several conditions to the effectiveness of the Settlement Agreement, specifically: * Entry by the Court, in a form and substance reasonably acceptable to the Parties, of an order: * authorizing the Trustee to implement the Settlement Agreement, perform fully his obligations in respect to the Settlement Agreement, and take all actions reasonably necessary to consummate the Settlement Agreement; * prohibiting the customers and creditors of MFGI from making or continuing any claim directly against MFGUK which is a Duplicative Claim; and * providing that prior to making any further distribution from the MFGI 30.7 commodities estate to a customer (with an allowed claim with a value greater than $12,000 (US)) in MFGI's SIPA proceeding, the Trustee will obtain an appropriate release of all Duplicative Claims in favor of MFGUK and the JSAs. * JPMorgan Chase withdraws certain claims filed against MFGUK, signs appropriate release documents and returns certain account balances and amounts to MFGUK. * Claims in any proceedings by MFGH and MF Global Finance USA Inc. have been withdrawn and MFGH and FinCo. have signed releases in favor of MFGUK, save with respect to certain agreed claims. A copy of the Court's Jan. 31, 2013 Memorandum Opinion is available at http://is.gd/e1Sh69from Leagle.com. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has retained Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. MODERN RADIATION: Case Summary & 8 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Modern Radiation and Oncology of Ocean County, LLC 512 Lakehurst Road Toms River, NJ 08755 Bankruptcy Case No.: 13-11745 Chapter 11 Petition Date: January 30, 2013 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtor's Counsel: Gary N. Marks, Esq. NORRIS, MCLAUGHLIN & MARCUS A Professional Corporation 721 Route 202-206, PO Box 5933 Bridgewater, NJ 08807-5933 Tel: (908) 722-0700 E-mail: gnmarks@nmmlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its eight largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/njb13-11745.pdf The petition was signed by Morris S. Bauer, Trustee for Oncology Associates of Ocean County, LLC. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Oncology Associates of Ocean County, LLC 12-11790 01/25/12 MOIRBIA PEORIARE: Case Summary & 10 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Moirbia Peoriare LLC 16100 N. Arrowhead Fountain Center Dr. Peoria, AZ 85382 Bankruptcy Case No.: 13-01317 Chapter 11 Petition Date: January 30, 2013 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen Jr. Debtor's Counsel: Mark J. Giunta, Esq. LAW OFFICE OF MARK J. GIUNTA 245 W. Roosevelt St., Suite A Phoenix, AZ 85003 Tel: (602) 307-0837 Fax: (602) 307-0838 E-mail: markgiunta@giuntalaw.com Scheduled Assets: $2,360,801 Scheduled Liabilities: $1,795,792 A list of the Company's 10 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/azb13-01317.pdf The petition was signed by Dominic Jones, managing and controlling member. NCL CORPORATION: S&P Assigns 'BB-' Rating to Proposed $300MM Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned NCL Corporation Ltd.'s planned $300 million senior notes due 2018 its issue-level rating of 'BB-' with a recovery rating of '3', indicating S&P's expectation for meaningful (50% to 70%) recovery for lenders in the event of a payment default. The company plans to use the proceeds, combined with borrowings under its revolving credit facility, to refinance its $450 million 11.75% senior secured notes due 2016. S&P will withdraw its ratings on the secured notes when the issue is repaid. S&P's recovery expectation for NCL's senior notes issues is in the 90% to 100% range. However, S&P has capped its recovery rating on the senior notes at '3' (50% to 70% recovery expectation). The cap is in accordance with S&P's recovery rating criteria for unsecured debt issued by corporate entities with corporate credit ratings in the 'BB' category. The cap accounts for the risk that the senior notes' recovery prospects are at greater risk of being impaired by the issuance of additional priority or pari passu debt prior to default. All other ratings are unchanged. Upon the close of the company's IPO on Jan. 24, 2013, NCL announced that net proceeds from the offering (including the underwriters' overallotment and after deducting discounts and expenses) were $478 million. S&P expects that the IPO proceeds and the anticipated reduction in interest costs from the proposed refinancing will result in lease and port commitment-adjusted debt to EBITDA in the high-4x area, funds from operation (FFO) to total adjusted debt around 16%, and EBITDA coverage of interest expense in the low-4x area in 2013. These credit measures are good for the current 'BB-' corporate credit rating, in S&P's view. RATINGS LIST NCL Corporation Ltd. Corporate Credit Rating BB-/Stable/-- New Ratings NCL Corporation Ltd. $300M sr notes due 2018 BB- Recovery Rating 3 NEW CENTAUR: S&P Assigns Prelim. 'B' CCR; Rates $480MM Debt 'B' --------------------------------------------------------------- Standard & Poor's Rating Services assigned Indiana-based gaming operator New Centaur LLC its preliminary 'B' corporate credit rating. The outlook is positive. At the same time, S&P assigned the company's proposed $480 million first-lien credit facility (consisting of a $20 million revolver due 2018 and a $460 million term loan due 2019) its preliminary 'B+' issue-level rating (one notch higher than the preliminary 'B' corporate credit rating) with a preliminary recovery rating of '2', indicating S&P's expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. S&P also assigned the company's proposed $185 million second-lien term loan its preliminary 'CCC+' issue-level rating (two notches below the preliminary 'B' corporate credit rating) with a preliminary recovery rating of '6', indicating its expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default. The first- and second-lien credit facilities will be borrowed at Centaur Acquisition LLC, a subsidiary of New Centaur LLC, and guaranteed by New Centaur LLC and its subsidiary Hoosier Park LLC. Centaur plans to use the proceeds from the proposed debt offerings to refinance its existing first- and second-lien term loans, which remain in place following the company's exit from Chapter 11 bankruptcy protection on Oct. 1, 2011, and to purchase Indiana Grand Casino & Indiana Downs racetrack. S&P's preliminary 'B' corporate credit rating reflects its assessment of Centaur's financial risk profile as "highly leveraged" and S&P's assessment of Centaur's business risk profile as "weak," according to its criteria. "Our assessment of Centaur's financial risk profile as "highly leveraged" reflects our expectation that adjusted debt leverage will remain in the mid-6x area through 2013, and improve to just below 6x in 2014 (our leverage measure includes about $137 million in pay-in-kind notes); interest coverage will remain in the mid-2x area; and that Centaur will generate solid discretionary cash flow, a portion of which we expect will be used for debt reduction," S&P said. "Our assessment of Centaur's business risk profile as weak reflects its narrow business focus as an operator of a two racinos in essentially the same market, which we believe exposes the company to event risk including potential regional economic volatility that could disproportionately affect its operations. The relatively stable operating performance of both Hoosier Park and Indiana Grand Casino throughout the economic cycle, as well as favorable demographics in the Indianapolis metropolitan area somewhat temper these factors. In addition, we believe the company's market position is protected from meaningful additional competition, because we believe there is minimal risk of any new or relocated gaming licenses being granted in Indiana. Similarly, we expect additional competition opening in Ohio will have a minimal effect on performance as the majority of Centaur's customers are within 50 miles," S&P added. "Our ratings currently incorporate our expectation for flat net revenue in 2013 and 2014 as we expect some organic growth to be offset by competitive pressures from a new casino in Cincinnati scheduled to open in 2013 as well as a racino in Dayton likely to open in 2014," said Standard & Poor's credit analyst Jennifer Pepper. NII HOLDINGS: S&P Cuts CCR to B-, Cuts Unsec. Debt Rating to CCC+ ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Latin American wireless carrier NII Holdings Inc. to 'B-' from 'B'. The outlook is stable. At the same time, S&P lowered the senior unsecured debt rating to 'CCC+' from 'B-'. The recovery rating on this debt remains at '5', indicating its expectation for modest (10% to 30%) recovery in the event of payment default. "The downgrade of Reston, Va.-based NII is based on our belief that leverage could temporarily approach 9x in 2013 from about 4.7x as of Sept. 30, 2012 on a rolling-12-month basis," said Standard & Poor's credit analyst Allyn Arden. Our previous rating incorporated the expectation that leverage would peak in the mid- 5x area in 2013 before improving thereafter. The expected sharp deterioration in credit measures is due to a confluence of factors, including: -- Delays in deploying a 3G network in NII's markets, primarily in Brazil, which has placed the company at a competitive disadvantage relative to its peers. -- Lower average revenue per user (ARPU) due to pricing pressure across NII's markets. Additionally, depreciating local currencies could hurt the company's consolidated ARPU, on a U.S.-translated basis, which is problematic, since the company's debt is largely U.S dollars, as are about 20% of its operating expenses. -- Subscriber losses will continue in Brazil until the company is able to deploy 3G services, which will most likely not occur until the second half of 2013. -- S&P's expectation that EBITDA declines at least 20% in 2013 from about $900 million in 2012. -- The company may issue new debt to partially fund free operating cash flow losses in 2013. -- While NII's proposed tower sale and leaseback transaction bolsters the company's liquidity, it could also result in higher overall debt balances. The ratings on NII continue to reflect a "weak" business risk profile and a "highly leveraged" financial risk profile. Key business risk factors include a competitive wireless industry conditions, and exposure to country risk in its key markets, including regulatory, economic, and foreign exchange risks. These factors have contributed to declining ARPU in NII's markets. Moreover, the company faces some technology risk because of its partial dependence on Motorola Inc.'s integrated digital enhanced network (iDEN) technology, which is being phased out over time. Tempering business risk factors include NII's niche business focused on high ARPU and low churn corporate customers, some geographic diversity, and S&P's expectation for continued--albeit slowing--subscriber growth in 2013. Key factors in S&P's financial risk assessment include its expectation for a sharp deterioration in credit measures and ongoing free operating cash flow deficits over the next few years. The outlook is stable and reflects S&P's expectation that operating and financial performance will remain weak in 2013, due primarily to delays in launching a 3G network in Brazil, as well as increased priced-based competition in NII's markets. Although unlikely in the near term, S&P could lower the ratings if competitive pressures accelerate and adverse currency movements result in sharper declines in ARPU and EBITDA, which ultimately pressure liquidity, especially if it results in an overall "weak" liquidity assessment. Conversely, S&P could raise the ratings if the deployment of 3G services NII's markets results in dramatic churn improvement, ARPU stabilization, and improved profitability such that leverage declines to the 5x area, after peaking in 2013. NORTH TEXAS HOUSING: S&P Puts 1984 Mortgage Bonds on CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed on CreditWatch with negative implications its 'BB+' rating on North Texas Housing Finance Corporation's single-family mortgage bonds, series 1984. This rating action reflects a lack of sufficient information to complete a review of these bonds despite multiple attempts to obtain such information from transaction parties. "If we do not receive the requested information by Feb. 15, 2013, we will likely suspend the rating on the bonds," said Standard & Poor's credit analyst Adam Cray. NORTHAMPTON GENERATING: Confirms Plan, EIF Retains Ownership ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Northampton Generating Co., a 112-megawatt electric generating plant in Northampton, Pennsylvania, secured the signature of the bankruptcy judge on a Jan. 29 confirmation order approving the reorganization plan. Under the Plan, holders of $73.4 million in senior secured bonds are receiving $50 million in new bonds, for a predicted 68% recovery. The new $50 million in bonds accrue 5% interest and come due in December 2023. Interest will be paid in cash to the extent of available cash flow. There will be no payments of principal except for a portion of excess cash flow, if any. According to the report, the plan is funded with a new $10 million investment by a fund managed by EIF Management Inc. which is the current 77.5% equity owner. The new investment will give EIF Calypso LLC 91.2 ownership after emergence from Chapter 11 reorganization. Holders of $21.8 million in junior secured bonds were told to expect a 2% recovery, according to the disclosure statement. As reported in the Jan. 23, 2013 edition of the TCR, the estimated recoveries by creditors and interest holders under the Plan are: Amount of Estimated Claims Claim Recovery ------ --------- --------- Senior Bond Claims $73,441,496 68% Junior Bond Claims $21,788,749 2% Claim of Horwith $1,500,000 100% Leasing Co., Inc. and Frank and Geraldine Horwith Convenience Class $58,000 100% Claims General Unsecured Claims $0 N/A Debtor Subsidiary Claims $680,000 100% Intercompany Claims $2,937,000 100% Affiliate Service Claims and Affiliate Administrative Claims $29,840,000 8% Partnership Interests 0% Interests in Debtor Subsidiaries 100% Under the Plan, on the Effective Date, the reinvesting beneficial owner will fund to the Debtor to fund investments in the Reorganized Debtor of $10,000,000 which amount will be sufficient to fund the costs and expenses of the Plan and will provide the Reorganized Companies cash on hand, after accounting for payments made or reserved on the Effective Date, in an amount of not less than the sum of (i) $3,500,000 plus, (ii) a "Horwith Deferral Amount". A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/NORTHAMPTON_GENERATING_ds.pdf About Northampton Generating Northampton Generating Co. LP is the owner of a 112 megawatt electric generating plant in Northampton, Pennsylvania. The plant is fueled with waste products, including waste coal, fiber waste, and tires. The power is sold under a long-term agreement to an affiliate of FirstEnergy Corp. Northampton Generating filed for Chapter 11 bankruptcy (Bankr. W.D.N.C. Case No. 11-33095) on Dec. 5, 2011. Hillary B. Crabtree, Esq., and Luis Manuel Lluberas, Esq., at Moore & Van Allen PLLC, in Charlotte, N.C., serve as counsel to the Debtors. Houlihan Lokey Capital, Inc., is the financial advisor. The Debtor disclosed $205,049,256 in assets and $121,515,045 in liabilities as of the Chapter 11 filing. No request for the appointment of a trustee or examiner has been made, and no statutory committee or trustee has been appointed in the case. ONESTOPPLUS GROUP: Debt Increase No Impact on Moody's 'B1' Rating ----------------------------------------------------------------- Moody's Investors Service reports that OneStopPlus Group's proposed USD25 million first lien term loan increase is a credit negative. The company's ratings, including the B2 corporate family rating and B1 rating assigned to the upsized first lien term loan, are unaffected. OneStopPlus' ratings and LGD assessment changes are as follows: - Corporate Family Rating at B2; - Probability-of-Default Rating at B2-PD; - Senior Secured 1st Lien Term Loan due 2020 at B1 (LGD3, 41%) from (LGD3, 40%). Headquartered in New York, NY, OneStopPlus Group sells plus size apparel nationally through its direct-to-consumer catalogs and e- commerce websites. The company operates eight unique lifestyle brands through its branded website and catalogs, including Woman Within, Roaman's, Jessica London, fullbeauty, King Size, BrylaneHome, BCO, and OneStopPlus.com. Oilers Borrower Corp. is a subsidiary of Oilers Acquisition Holdings Corp., a special purpose holding company formed by Charlesbank Capital Partners, LLC and Webster Capital to acquire OneStopPlus from PPR S.A. OTELCO INC: Intends to File for "Pre-Packaged" Chapter 11 --------------------------------------------------------- Otelco Inc. on Feb. 1 announced a restructuring transaction, which will strengthen the Company by deleveraging its balance sheet and reducing its overall indebtedness by approximately $135 million. Otelco has reached an agreement with its senior lenders to amend and extend the terms of its current senior financing through April 2016. In addition, the Company's IDS units will be cancelled and the existing senior subordinated debt will be converted into equity. The vast bulk of the Company's subordinated debt is held in the IDS units, and, as such, its IDS unit holders will continue to be significant shareholders of the Company as they are today. These efforts will better position the Company to compete in the 21st century telecommunications marketplace, solve the near-term maturity of the Company's senior secured financing, and significantly reduce the Company's debt burden. The Company currently has over $32 million in cash and sufficient liquidity to consummate this transaction. In April 2012, Otelco announced the loss of a material contract to provide services to Time Warner Cable (TWC). The Time Warner contract expired on December 31, 2012 and TWC elected to begin performing services in-house rather than renewing the contract with Otelco. In addition to the loss of the TWC contract, recent rulings by the FCC will also continue to negatively impact the Company's revenues. After consulting with advisors, the Board of Directors and senior management have concluded that reducing the Company's debt and improving its capital structure will be best implemented through a "pre-packaged" chapter 11 filing, which has the support of the Company's senior lenders. Before making its chapter 11 filing, Otelco will seek the support of holders of record on February 8, 2013, of its senior subordinated notes (including notes held in the form of IDSs) for the proposed plan through a solicitation process that will occur in February, 2013. The voting process will take approximately 35 days. After that period, Otelco intends to voluntarily file its reorganization plan with the U.S. Bankruptcy Court in Delaware. The chapter 11 process is designed to allow a company to continue its operations both during and after the filing. Thus, neither the solicitation nor the actual filing is expected to impact Otelco's day-to-day operations. Otelco will continue to provide its customers with the quality services they have come to expect. "This filing will have no impact on our operations," stated Michael Weaver, CEO of Otelco. "Our offices are open, all our employees are working and we're still providing excellent service to all our customers. We hope to be in chapter 11 for a brief period of time. We have significant liquidity and it's business as usual for us." In addition, Otelco is, and intends to remain, current with all of its vendors. "Our proposed plan, with the extension of the existing senior credit facility, will reduce total debt, simplify our capital structure and strengthen our balance sheet. I am confident that this restructuring represents the best possible outcome for the Company and our IDS unit holders, and I highly encourage the IDS holders to support it with a 'yes' vote during the solicitation," continued Weaver. Otelco Inc. is a wireline telecommunication services provider in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia. P&M SPOKANE: Wins Confirmation of First Amended Plan ---------------------------------------------------- Bankruptcy Judge Frank L. Kurtz confirmed E P&M Spokane Properties, LLC's First Amended Plan of Reorganization, as amended per the "Second Amendment to Debtor's First Amended Plan of Reorganization Filed Herein on July 20, 2011", filed Dec. 6, 2012. The judge also approved a Settlement Agreement that, among other things, provided for modifications to the Debtor's loan agreement. The Plan has been accepted in writing by the creditors and equity security holders whose acceptance is required by law. A copy of the Court's Jan. 28, 2013 Findings of Fact is available at http://is.gd/MmG9Eyfrom Leagle.com. Tacoma, Wash.-based P&M Spokane Properties, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Wash. Case No. 11-00243) on Jan. 20, 2011. Dan Orourke, Esq. -- dorourke@southwellorourke.com -- at Southwell & Orourke, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in both assets and debts. The petition was signed by William Stegeman. PACIFIC CARGO: Files in Oregon After Acquisition Goes Sour ---------------------------------------------------------- Pacific Cargo Services LLC, an overnight freight service based in Troutdale, Oregon, filed a petition for Chapter 11 reorganization (Bankr. D. Ore. Case No. 13-30439) on Jan. 28 in Portland, Oregon. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the company blamed bankruptcy on the 2010 acquisition of an unprofitable company that turned out to have more problems than expected. Pacific Cargo disclosed assets of $7.7 million and liabilities totaling $12 million. Debts include $6 million in secured claims. Assets include 140 trucks and cargo vans. PAR PHARMACEUTICAL: S&P Assigns 'B+' Rating on $1.055-Bil. Loan --------------------------------------------------------------- Standard & Poor's Ratings Services assigned Woodcliff Lake, N.J.- based Par Pharmaceutical Companies Inc.'s proposed $1.055 billion term loan B-1 its 'B+' issue-level rating, with a recovery rating of '3', indicating S&P's expectation for meaningful (50%-70%) recovery for lenders in the event of payment default. All of the terms, including the maturity on Sept. 28, 2019, are unchanged. The rating on Par reflects S&P's assessment that the company has a "weak" business profile because of its position as the fifth largest generic pharmaceutical company and its lack of scale compared with other larger generic companies. S&P also believes that Par has an "aggressive" financial risk profile. Despite pro forma leverage of about 5x as of Sept. 30, 2012, S&P believes EBITDA growth and the use of some free cash flow for debt reduction will bring leverage to less than 5x over the next year. Par is a manufacturer and marketer of a broad portfolio of generic drugs. RATINGS LIST Par Pharmaceutical Companies Inc. Corporate Credit Rating B+/Stable/-- New Ratings Par Pharmaceutical Companies Inc. $1.055B term loan B-1 B+ Recovery Rating 3 PATRIOT COAL: Promotes Michael D. Day to EVP Operations ------------------------------------------------------- Patriot Coal Corporation on Feb. 1 disclosed that Michael D. Day has been promoted to the new position of Executive Vice President - Operations. Previously, Mr. Day served as Senior Vice President overseeing Patriot's West Virginia Central and Kentucky operations, along with its centralized engineering group. In his expanded role, Mr. Day will assume responsibility for all of Patriot's operations, as well as the safety, engineering, purchasing, and maintenance functions. He will continue to report to Bennett K. Hatfield, President and Chief Executive Officer. "Mike is a proven and experienced leader with operations and engineering expertise. In his new position, he will oversee a number of operational cost reduction initiatives that are critical to achieving the results in our business plan," stated Patriot President and Chief Executive Officer Bennett K. Hatfield. "Mike will further strengthen our executive management team and support Patriot's ongoing reorganization efforts." Regional operations executives reporting to Mr. Day will be James N. Magro - Senior Vice President - West Virginia Northern Region; John R. Jones - Senior Vice President - West Virginia Southern Region; Matthew G. Cook - Vice President - West Virginia Central Region; and Robert W. Bosch - General Manager - Kentucky Operations. Also reporting to Mr. Day will be Terry G. Hudson - Vice President - Safety; Kent R. DesRocher - Vice President - Engineering; C. Wayne Elkins - Vice President - Materials Management; and James R. Clendenen - Director of Maintenance. Mr. Day has more than 20 years of mining experience and holds a Bachelor of Science degree in Mining Engineering from the University of Kentucky. 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. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. PENSON WORLDWIDE: Settles Shareholders' Suit, Files Plan -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Penson Worldwide Inc., formerly a clearing broker and future commission merchant, settled a securities class-action suit for $6.5 million. According to the report, shareholders sued in federal district court in Texas in August 2011, alleging Penson overstated assets and cash flow. XL Specialty Insurance Co., the provider of directors' and officers' liability insurance, agreed to settle the suit by payment of $6 million. The auditor BDO Seidman LLP agreed to kick in $500,000. The bankruptcy court in Delaware will hold a hearing on Feb. 8 for approval of the settlement. The district court must also approve. Penson filed a Chapter 11 petition to liquidate the assets in agreement with senior and convertible noteholders. The proposed liquidating Chapter 11 plan provides for distributing proceeds of collateral to secured creditors. Otherwise, unsecured creditors will receive distributions in the order of priority laid out in bankruptcy law. Second-lien creditors are treated as unsecured creditors. The report notes that there will be no substantive consolidation, so creditors will receive distributions only from assets of the Penson company liable on the claim. Penson, the report discloses, so far didn't file an explanatory disclosure statement, so there is no projection about percentage recoveries. Creditors can't vote on the plan until the bankruptcy court approves a disclosure statement. About Penson Worldwide Plano, Texas-based Penson Worldwide Inc. and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061) on Jan. 11, 2013. Founded in 1995, Penson Worldwide is provider of a range of critical securities and futures processing infrastructure products and services to the global financial services industry. The company's products and services include securities and futures clearing and execution, financing and cash management technology and other related offerings, and it provides tools and services to support trading in multiple markets, asset classes and currencies. Penson was one of the top two clearing brokers overall in the United States. Its foreign-based subsidiaries were some of the largest independent clearing brokers in Canada and Australia and the second largest independent clearing broker in the United Kingdom as of Dec. 31, 2010. In 2012, the company sold its futures division to Knight Capital Group Inc. and its broker-deal subsidiary to Apex Clearing Corp. But the company was unable to successfully streamline is business after the asset sales. Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The company estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. The last publicly filed financial statements as of June 30 showed assets of $1.17 billion and liabilities totaling $1.227 billion. PEREGRINE FINANCIAL: Ex-CEO Wasendorf Gets 50 Years Jail Term ------------------------------------------------------------- Jacob Bunge, writing for Dow Jones Newswires, reports that former Peregrine Financial Group Inc. CEO, Russell Wasendorf Sr., 64, was sentenced to the maximum 50 years in jail after admitting to orchestrating a fraud at his futures brokerage and misleading regulators for almost 20 years. Federal prosecutors said the fraud had cost clients $215.5 million. Mr. Wasendorf also was ordered to pay the full amount of missing funds in restitution. According to the report, Peregrine counted about $377 million in customer funds on deposit in early July, and the trustee appointed to liquidate the firm has estimated that investors and creditors face a $190 million shortfall in funds. The report also relates Mr. Wasendorf's pastor, Linda Livingston, said in court Thursday that Mr. Wasendorf has lost more than 30 pounds during his seven months in jail, and has been diagnosed with a tumor on his pancreas. She noted that his mother had died of pancreatic cancer. Dow Jones notes that, in a brief statement to the court, Mr. Wasendorf said, "My guilt is such that I accept my sentence, no matter what it is." He said the personal fallout from the uncovering of his fraud was worse than any punishment the court could hand down. "I have lost the love of my son, and I will never see my grandchildren again," Mr. Wasendorf said, his voice breaking. He added that he was "very sorry" for damage to investors, staff and the futures industry. Dow Jones also relates that Judge Linda Reade said Mr. Wasendorf's cooperation with investigators didn't make him deserving of a lesser sentence, as he only cooperated after the fraud came to light. His age and charitable giving also had no bearing on the sentence, according to the judge. "It is easy to be generous with other people's money," she said. PERMIAN HOLDINGS: S&P Assigns 'B-' CCR; Rates $175MM Notes 'B-' --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B-' corporate credit rating to Dallas-based Permian Holdings Inc. The outlook is stable. At the same time, S&P assigned its 'B-' issue rating (same as the corporate credit rating) to Permian's proposed $175 million senior secured notes due 2018. The recovery rating is '3', indicating expectations of meaningful (50% to 70%) recovery in the event of a payment default. S&P expects Permian will use proceeds from the proposed notes to pay up to a $105.9 million dividend to its owners, subject to certain conditions and to repay borrowings under its existing credit facility, which has $86 million outstanding as of Jan. 15, 2013. The amount of the dividend will initially be $80.9 million, with the remaining $25 million contingent on the establishment of a $25 million secured credit facility following this offering. "The ratings on Permian Holdings LLC reflect our view of the company's 'vulnerable' business risk and 'highly leveraged' financial risk profiles and our assessment of liquidity as 'adequate'," said Standard & Poor's credit analyst Paul B. Harvey. These assessments reflect Permian's very limited scale of operations, participation in a highly fragmented industry with low technological complexity, and exposure to the often volatile drilling levels and resulting well count of the exploration and production industry. On the other hand, near-term financial measures should be well within S&P's expectations for the rating, and like other equipment manufacturers, Permian has low maintenance capital spending. S&P expects Permian to generate free cash flow that it can use for either debt repayment or near- term growth. Permian is a privately held company, with about 96% owned by funds affiliated with Carlyle Strategic Partners II L.P. and Carlyle/Riverstone Energy Partners III L.P., and the remainder owned by Permian's management. The company's main business segment is the construction and sale of above-ground steel and fiberglass well-site storage tanks, which constitute about 70% of revenue. Permian also manufactures well site processing equipment, walkways, and stairways, although the storage tank business will continue to be its main focus. Although Permian benefits from modest geographic diversity, with core markets in liquid rich plays such as the Permian Basin, Eagle Ford Shale, and Anadarko/Woodford Basin, S&P believes its small scale limits this positive rating factor. S&P expects Permian to grow organically or through acquisitions, in other liquids-driven markets such as the Bakken and Marcellus Shales. The stable outlook reflects S&P's expectation that Permian will generate free cash flow such that it can support capital spending and fund its annual offers to repurchase debt without impairing liquidity. S&P expects debt leverage to remain about 3.5x or less. S&P would consider an upgrade if Permian can increase its scale of operations and improve liquidity to levels more consistent with a 'B' level rating, such that annual EBITDA is at least $125 million and liquidity is greater than $50 million. Absent significant acquisitions, S&P do not expect Permian to meet these benchmarks over the next 12 to 18 months. S&P would consider a downgrade if Permian failed to maintain minimum liquidity of $15 million. S&P could lower ratings if it expected debt leverage to exceed 8x without a near-term remedy. This would most likely occur over the next 12 to 18 months if Permian deviates from S&P's expectations and pursues aggressively funded acquisitions or other leveraging transactions. PILGRIM'S PRIDE: Moody's Affirms 'B2' CFR; Outlook Stable --------------------------------------------------------- Moody's Investors Service revised the rating outlook for Pilgrim's Pride to stable from negative and affirmed the company's B2 Corporate Family Rating, and B2-PD Probability of Default Rating. Moody's also raised the company's Speculative Grade Liquidity Rating to SGL-2 from SGL-3. The outlook revision to stable reflects Pilgrim's significant debt reduction over the past year funded by positive quarterly free cash flow and a USD200 million rights offering a year ago. Pilgrim's reduced its debt balances by over 20%, or approximately USD300 million, during 2012. The stable outlook also reflects Pilgrim's stronger liquidity profile evidenced by approximately USD700 million of combined cash and borrowing capacity compared to USD286 million at the end of fiscal 2011. To be sure, the chicken industry faces challenges ahead as high corn prices and volatile weather conditions will likely pressure gross margins in 2013. However, Pilgrim's has been more successful this year than in the past at managing through challenging operating conditions and at maintaining positive cash flow, owing in part to the influence of 75% owner JBS S.A. that acquired a controlling stake in December 2010. Ratings Rationale The B2 Corporate Family Rating reflects Pilgrim's concentration in the highly competitive, U.S. chicken industry that is currently facing high feed costs and high domestic supplies. Pilgrim's credit profile also reflects currently moderately high financial leverage, narrow profit margins, positive but volatile cash flow, and good liquidity cushion. The ratings are supported by the company's position as one the world's largest producers of poultry and by its majority ownership by Sao Paulo, Brazil-based JBS, S.A. (B1 stable), one of the largest protein processors in the world. The B2 CFR incorporates the wide range of operating performance that is typical within the cyclical commodity chicken industry. At the top of the cycle, Moody's expects leverage to be very modest relative to the rating category. Conversely, at the bottom of the cycle the rating can often tolerate leverage that is outside normal bounds for a limited period of time. Importantly, periods of high leverage should be balanced against ample access to external sources of liquidity. Pilgrim's Pride Corporation: Ratings affirmed (LGD assessments updated): Corporate Family Rating at B2; Probability of Default Rating at B2-PD; USD500 million senior unsecured notes due 2018 at Caa1 LGD-5 (87%) from Caa1 LGD-5 (88%). Ratings upgraded: Speculative Grade Liquidity Rating to SGL-2 from SGL-3; The outlook is revised to stable from negative. The principal methodology used in this rating was the Global Food - Protein and Agriculture Industry 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 Greeley, Colorado, Pilgrim's Pride Corporation (NYSE: PPC), is the second largest chicken producer in the world, with operations in the United States, Mexico and Puerto Rico. The company produces, processes, markets and distributes fresh, frozen and value-added chicken products to foodservice customers, distributors and retail operators worldwide. For the twelve months ended September 23, 2012, revenues for the company approximated USD7.8 billion. Pilgrim's Pride is controlled with a 75% equity stake by JBS, S.A. POWERWAVE TECHNOLOGIES: Lenders' Cash Sweep Prompts Bankruptcy -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Powerwave Technologies Inc. explained in a court filing that bankruptcy became necessary because secured lenders "swept" bank accounts on Jan. 25 by taking $8.5 million cash. Powerwave says the cash sweep was in violation of credit agreements because there was no advance notice. According to the report, the Debtor disclosed $213.5 million in assets and debt totaling $396.1 million. Debt includes $35 million owing on a secured term loan having most of the assets as collateral, with P-Wave Holdings LLC is agent. There is $150 million owing on 3.875% convertible subordinated notes and $106 million in 2.75% convertible senior subordinated notes. In addition, Powerwave says there is from $15 million to $25 million owing to trade suppliers. The 3.875% subordinated notes last traded on Jan. 29 for 5 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Purchasers were offering to buy the 2.75% senior convertible notes for 12.875 cents on Jan. 30. The company generated $127.8 million in sales over the first nine months of 2012, resulting in a net loss of $153.1 million. The cost of goods exceeded sales by $27.1 million. For 2011, there was a $77.3 million net loss on sales of $444.4 million. Over the past three years, the high for the stock was $23.45 on May 2, 2011. The stock traded Jan. 30 around 5 cents. About Powerwave Technologies Powerwave Technologies Inc, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-10134) on Jan. 28, 2013. Powerwave Technologies, headquartered in Santa Ana, Calif., is a global supplier of end-to-end wireless solutions for wireless communications networks. The Company has historically sold the majority of its product solutions to the commercial wireless infrastructure industry. PREMIER PAVING: Receives 1-Month Extension on Right to Use Cash --------------------------------------------------------------- Bankruptcy Judge Michael E. Romero in Denver, Colorado, approved an agreement that allows Premium Paving Inc. continued use of cash collateral. Wells Fargo Bank N.A. has consented to the Debtor's use of cash collateral through Feb. 1, 2013. Pursuant to a stipulation entered Jan. 23, 2013, Wells Fargo permits the Debtor to access the cash collateral to meet its operational needs and generate new revenues through March 1. In exchange, the Debtor is required to pay Wells Fargo $25,000 per month during the term if the Cash Collateral order. The first payment was due June 30, 2012. The Debtor also is required to, among others, satisfy reporting requirements, maintain insurance, pay postpetition taxes. One week after filing for bankruptcy in April 2012, at the Debtor's behest, the Bankruptcy Court gave the Debtor interim authority to use cash collateral. The Interim Order set May 1, 2012, as the final hearing date on the Cash Collateral Motion, and provided Wells Fargo with the right to conduct an audit of the Debtor, with the first audit to commence April 18, 2012. The Debtor and Wells Fargo entered into a Second Interim Cash Collateral Agreement which reset the final hearing for July 2, 2012. The Second Interim Cash Collateral Agreement was approved May 29, 2012. Wells Fargo and the official committee of unsecured creditors appointed in the Debtor's case objected to the Cash Collateral Motion. Thereafter the Debtor and the bank entered into a stipulation for the use of cash collateral on a final basis through Sept. 30, 2012. The Committee consented, and the Court approved, the deal. Since Sept. 30, the Debtor and the bank have consented to the use of cash collateral on a monthly basis. The Debtor's right to use cash collateral was previously extended by one-month periods through Feb. 1, Jan. 1, and Dec. 1. Premium Paving operates a full service highway construction company, which services include pavying, grading and milling, geotextiles, traffic control, and quality control. Premium Paving also owns and operates an asphalt plant. Accord With Supplier Meanwhile, Premium Paving settled a claims dispute with a supplier of asphalt cement and the Debtor's unsecured creditors. Suncor Energy (USA) Inc. asserts a prepetition claim for $1,816,767. On Oct. 8, 2012, the Debtor and Suncor entered into a stipulation pursuant to which the Debtor and Suncor assert that Suncor is a critical vendor and, to prevent Suncor from shutting off its supply of asphalt cement to the Debtor, the Debtor agreed to pay $7,000 per month to Suncor and release Suncor of all potential preference claims. The Official Committee of Unsecured Committee asserted an informal objection to the deal based on, among other things, the release of the preference claims and Suncor's defenses to those claims. After discussions among the parties, the Committee asserts that the total amount of payments received by Suncor during the 90-day period prior to the Petition Date was $503,172. After reductions for joint checks and subsequent new value, the Committee asserts that Suncor's potential preference exposure is approximately $189,000. This amount does not take into account other defenses that may be available to Suncor, including defenses under 11 U.S.C. Sec. 547(c)(2). To resolve the informal objection, Suncor, the Debtor and the Committee agreed that: A. Suncor would reduce and amend its Prepetition Claim by $189,000 and the resulting Suncor claim would be $1,627,726; and B. The Debtor will pay Suncor $7,000 per month, retroactively from July 1, 2012, for an estimated amount of $35,000 by paying $7,000 a month until paid in full, beginning in December 2012. The Court approved the parties' agreement in December. In November, Edward G. Woodland, Esq., at Woodland & Associates LLC was permitted to withdraw as counsel to American West Construction LLC. About Premier Paving Denver, Colorado-based Premier Paving Inc. -- http://www.premierpavinginc.com/-- operates a full-service highway construction company, which services include paving, grading and milling, geo-textiles, trucking, traffic control and quality control. Premier Paving also owns and operates an asphalt plant. Premier Paving filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 12-16445) on April 2, 2012. Judge Michael E. Romero presides over the case. Lee M. Kutner, Esq., at Kutner Miller Brinen, P.C., serves as the Debtor's counsel. In its petition, the Debtor estimated up to $50 million in assets and debts. The petition was signed by David Goold, treasurer. The Official Unsecured Creditors Committee is represented by Onsager, Staelin & Guyerson, LLC. The secured lender, Wells Fargo Bank N.A., is represented by Douglas W. Brown, Esq. -- dbrown@bbdfirm.com -- at Brown, Berardini & Dunning P.C. The Debtor filed its Plan, along with its Disclosure Statement, on Oct. 31, 2012. There's a hearing Feb. 25 at 3:00 p.m. on the Disclosure Statement. Early in December, the Debtor won Court permission to employ Pinnacle Real Estate Advisors LLC to provide professional broker services related to the sale of certain of the Debtor's real estate assets. PREMIER PAVING: Committee Hiring OnPointe as Financial Advisors --------------------------------------------------------------- The Official Unsecured Creditors Committee in the Chapter 11 case of Premier Paving Inc. won Court authority to retain OnPointe Financial Group, LLC, as the panel's financial advisors to review, analyze and advise the Committee on (i) the assets, liabilities and operations of the Debtor, (ii) the Debtor's financial statements, budgets and its business projections, (iii) valuation of the Debtor's assets; and (iv) the Debtor's Disclosure Statement and Plan of Reorganization. The Debtor filed its Plan, along with its Disclosure Statement, on Oct. 31, 2012. There's a hearing Feb. 25 at 3:00 p.m. on the Disclosure Statement. Early in December, the Debtor won Court permission to employ Pinnacle Real Estate Advisors LLC to provide professional broker services related to the sale of certain of the Debtor's real estate assets. The Court also approved an Exclusive-Right-To-Sell Listing Contract. Robert Kleeman, a principal of OnPointe who will lead the OnPointe team, is a licensed Certified Public Accountant in Colorado and has over 35-years' experience as a CPA. Mr. Kleeman has extensive experience regarding business valuation matters, and has been qualified as an expert witness on valuation issues in numerous cases, including bankruptcy cases, nationwide. OnPointe will charge for its services according to the firm's hourly rates. Mr. Kleeman's hourly rate is $300 per hour and other OnPointe employee's hourly rates vary from $140 to $300 per hour. OnPointe will also charge for its out of pocket expenses, including travel, computer processing charges, copying and postage. As set forth in the Engagement Letter, OnPointe agrees that its fees and costs will not exceed $15,000. OnPointe requested a retainer in the amount of $5,000. The Debtor asserted an informal objection to the requested retainer. To resolve the objection, the Debtor and the Committee stipulated to reduce OnPointe's retainer to $2,500. Moreover, the payment of the $2,500 is conditioned on the payment of not violating the cash collateral agreement with Wells Fargo Bank, N.A. OnPointe attests it does not represent or hold any interest adverse to the Debtor, the estate or the Committee in the matter upon which it is to be retained or in any other matters; and that its members, managers and other professionals on staff are "disinterested persons" as defined in Section 101(14) of Bankruptcy Code. About Premier Paving Denver, Colorado-based Premier Paving Inc. -- http://www.premierpavinginc.com/-- operates a full-service highway construction company, which services include paving, grading and milling, geo-textiles, trucking, traffic control and quality control. Premier Paving also owns and operates an asphalt plant. Premier Paving filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 12-16445) on April 2, 2012. Judge Michael E. Romero presides over the case. Lee M. Kutner, Esq., at Kutner Miller Brinen, P.C., serves as the Debtor's counsel. In its petition, the Debtor estimated up to $50 million in assets and debts. The petition was signed by David Goold, treasurer. The Official Unsecured Creditors Committee is represented by Onsager, Staelin & Guyerson, LLC. The secured lender, Wells Fargo Bank N.A., is represented by Douglas W. Brown, Esq., at Brown, Berardini & Dunning P.C. PRESTIGE INVESTMENTS: Can Use Cash Collateral Thru July 31 ---------------------------------------------------------- Bankruptcy Judge Paul Mannes signed off on a Second Interim Stipulation and Consent Order between Industrial Bank and Prestige Investments, LLC, extending the Debtor's authority to use the Lender's cash collateral and the granting of adequate protection payments and liens through and including July 31, 2013. The Debtor said it has a continuing need to use Cash Collateral to fund the operation of its business. A prior cash collateral order covered the period through Jan. 31, 2013. The Debtor owes the Lender $680,517 under an October 2004 loan secured by a first priority lien on the Debtor's real property located at 9601 Ardwick Ardmore Road, Landover, Maryland, and all improvements and fixtures; and a first priority security interest in all of the Debtor's present and future leases together with all rents, revenue and profits from the Collateral. The Loan matured on Oct. 28, 2009. The Collateral is an approximately 4,400 square foot multi-use building, located on approximately 2.9 acres of land. Currently, the Collateral is leased to a religious organization and is used for commercial purposes. The Debtor and the Lender entered into a Forbearance Agreement dated Dec. 22, 2011, pursuant to which the Lender agreed, so long as the forbearance period was not terminated sooner as the result of the occurrence of an "Event of Default" as defined therein, to forbear from foreclosing on the Collateral through July 1, 2012. Prior to the Petition Date, the Lender directed the tenant, World Impact Christian Center, to send to the Lender all rental income owed to the Debtor under the Tenant's lease. As adequate protection for the Lender, among other things: -- the Lender will receive from the Tenant $7,500 in rent each month commencing Feb. 1, 2013 and ending on July 31, 2013. The Rent Payments constitute Cash Collateral. The Lender will then return up to $1,300 to the Debtor so that the Debtor can pay the necessary quarterly fees to the Office of the United States Trustee. -- the Lender is authorized to apply and/or hold in escrow the balance of the Rent Payments for (a) payment of real property taxes assessed in relation to the Collateral that will become due and owing to the Prince George's County Director of Finance; (b) payment of insurance premiums that will become due and owing after the Petition Date on an insurance policy with respect to the Collateral; and (c) adequate protection payments to Lender of principal and interest under the Loan. -- No claim for professional fees during the term of the Second Interim Order will have priority over the claims of the Lender, or may be charged against the Lender, the Collateral, the Leases, the Rental Income or the Cash Collateral, whether pursuant to Section 506(c) of the Bankruptcy Code or otherwise. A copy of the Second Interim Stipulation and Consent Order is available at http://is.gd/unOmEgfrom Leagle.com. Prestige Investments LLC, based in Brookeville, Maryland, filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 12-27030) on Sept. 17, 2012. Jonathan P. Morgan, Esq., at Morgan Rose, LLC, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and $500,001 to $1 million in debts. The petition was signed by Aniema A. Udofa, sole member. Industrial Bank, the lender based in Silver Spring, Maryland, is represented by: Mary Fran Ebersole, Esq. Catherine K. Hopkin, Esq. TYDINGS & ROSENBERG LLP 100 East Pratt Street Baltimore, Maryland 21202 Tel: (410) 752-9700 Fax: (410) 727-5460 E-mail: mebersole@tydingslaw.com chopkin@tydingslaw.com RESIDENTIAL CAPITAL: Has Agreement With Ally Bank on Loan Deals --------------------------------------------------------------- Residential Capital LLC and Ally Bank won a bankruptcy judge's approval of a stipulation authorizing the Debtors to continue to perform under the terms of the Amended and Restated Master Mortgage Loan Purchase and Sale Agreement, dated May 1, 2012, and the Client Contract and Addendum dated as of November 29, 2011. Debtor GMAC Mortgage, LLC, will provide Ally Bank with documentation reasonably acceptable to Ally Bank evidencing full remediation of the Specified Compliance Issues in accordance with the Program Documents by January 31, 2013, provided that GMACM will provide Ally Bank with documentation reasonably acceptable to Ally Bank evidencing full remediation of Issue Number SI-2012- RCSA-MO-3330 as detailed in the Specific Compliance Issues by March 31, 2013. If GMACM does not remediate all Specified Compliance Issues in accordance with the Stipulation, Ally Bank is granted limited relief from the automatic stay to terminate the Client Contract and the MMLPSA with cause upon three business days' notice to GMACM, which notice will be filed with the Court. The MMLPSA and the Client Contract will automatically terminate, without further notice or order of the Court, upon the date on which the sale of the Debtors' assets closes. The parties also agreed the Client Contract will automatically terminate, without further order of the Court, on the termination of the MMLPSA, provided that Ally Bank agrees not to deliver any termination notice without cause until after January 31, 2013. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Carlson Represents MDL Class Plaintiffs ------------------------------------------------------------ Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, R. Bruce Carlson, Esq., at Carlson Lynch, Ltd., in Pittsburgh, Pennsylvania, disclosed that his firm is co-lead interim class counsel representing the putative class, including the class representative, in the matter 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 (the "MDL Class Action"). The MDL Class Action asserts claims based on violations of the Real Estate Settlement Practices Act, the Truth in Lending Act, the Home Ownership Equity Protection Act and the Racketeer Influenced and Corrupt Organizations Act. In the MDL Class Action, the MDL Class Reps 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 second mortgage loans. Mr. Carlson may be reached at: R. Bruce Carlson, Esq. CARLSON LYNCH, LTD. 115 Federal Street, Suite 210 Pittsburgh, PA 15212 Tel: (412) 322-9243 Fax: (412) 231-0246 Email: bcarlson@carlsonlynch.com 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: SBO Servicers' Stipulation Approved -------------------------------------------------------- Residential Capital LLC and its affiliates obtained approval from the Bankruptcy Court of a stipulation they entered into with Branch Banking and Trust Company, OceanFirst Bank and Columbia Home Loans, LLC, and PNC Mortgage, a Division of PNC Bank, NA -- SBO Servicers -- resolving the SBO Servicers' objection to the sales of the Debtors' mortgage loan servicing and origination platform and whole loan portfolio. Pursuant to the stipulation, following the effective date of each of the sale of the Debtors' assets to Ocwen Loan Servicing, LLC, and Berkshire Hathaway, Inc., the applicable Purchaser will reimburse the SBO Servicers for claims for outstanding servicing advances made prior to the effective date of the sale, but not yet due and payable to the SBO Servicer as of the effective date of the sale. The SBO Servicers are also permitted to continue to reimburse themselves for servicing advances made out of available collections received from borrowers as permitted pursuant to the terms of the applicable SBO Servicing Agreements. The SBO Servicers are owners or master servicers of certain mortgage servicing rights with respect to certain mortgage or home equity lines of credit which they subservice on behalf of the Debtors. 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). REVOLUTION DAIRY: Files Bankruptcy to Deal With Secured Lender -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Revolution Dairy LLC, one of the largest dairy farms in Utah, filed for bankruptcy reorganization to deal with secured debt owing to lender Rabo AgriFinance Inc. The farm has some 7,000 cows, not including calves and cows not currently milking. According to the report, the farm blamed the bankruptcy on rapid expansion just before milk prices declined. The dairy says the lender demanded large payments which could only be made by selling significant portions of the herd, thus losing economies of scale and making the remaining operation unprofitable. By fending off demands from the lender, the dairy said it intends to propose a plan paying all creditors in full over time, according to the report. Delta, Utah-based Revolution Dairy, LLC and Highline Dairy, LLC, filed bare-bones Chapter 11 petitions (Bankr. D. Utah Case No. 13- 20770 and 13-20771) in Salt Lake City on Jan. 27, 2013. The two companies have hired the law firm of Prince, Yeates and Geldzahler as counsel. Each of the Debtors estimated $10 million to $50 million in assets and liabilities. RIO GRANDE STUDIOS: Dismissal of Member's Bankruptcy Upheld ----------------------------------------------------------- Bankruptcy Judge David T. Thuma denied the request of Michael Jacques Jacobs to vacate a prior court order dismissing his Chapter 13 case. The Court dismissed the Debtor's Chapter 13 case on Jan. 7, 2013 because he had not filed most of his bankruptcy schedules, or his statement of financial affairs, within the 45 day deadline set by 11 U.S.C. Sec. 521(i)(1). According to Judge Thuma, "The Court tries to work with pro se debtors when it appears they are doing their best to comply with the Bankruptcy Code and Bankruptcy Rules. Here, there is little indication that Debtor is making the necessary effort, or that such effort, if made, would have resulted in a successful Chapter 13 case." A copy of the Court's Jan. 30, 2013 Memorandum Opinion is available at http://is.gd/warUyffrom Leagle.com. Michael Jacques Jacobs and his wife Ruby Jacobs have been involved in four bankruptcy cases in the District of New Mexico. The first case was In re Rio Grande Studios, LLC, case no. 11-13639 TA, filed Aug. 11, 2011. The case was filed as a Chapter 11. Judge James S. Starzynski oversaw the case. Albert W. Schimmel, III, Esq., of the Schimmel Law Office, served as counsel. The petition estimated under $50,000 in assets and between $1 million to $10 million in debts. The petition was signed by Michael Jacobs, managing member. The Rio Grande Studios case was converted to Chapter 7 on June 14, 2012, by stipulation of the Debtor and the U.S. Trustee's office. The case was closed in September 2012 after the case trustee concluded there were no assets available for creditors. Ms. Jacobs next filed an individual chapter 7 case on Oct. 28, 2011, no. 7-11-14707-JA. Ms. Ruby received a Chapter 7 discharge Feb. 21, 2012. She disclosed the Debtor as a non-filing spouse. Ms. Jacobs filed the third case (a chapter 13) on Feb. 28, 2012, no. 13-12-10748-JA. She disclosed the Debtor as a non-filing spouse in this case as well. The case was dismissed June 7, 2012, because Ms. Jacobs did not file an amended plan or amended schedules, did not comply with 11 U.S.C. Sections 521(a)(1)(B)(iv) and 521(e)(2)(A), and did not comply with the Court's order. Michael Jacobs filed the Chapter 13 case on Nov. 13, 2012. The Chapter 13 Trustee moved to dismiss the case on Dec. 4, 2012, based on the Debtor's failure to file a Chapter 13 plan, schedules, and/or statements, and because the Debtor allegedly failed to cooperate with the trustee or provide the documents and information pursuant to Sec. 521(a)(3) and (4). The next day the Clerk's Office sent the Debtor a Notice of Failure to File Information Which May Result in Automatic Dismissal, notifying the Debtor that the Court would dismiss the case after Dec. 28, 2012 if the Debtor did not file all documents required by Sec. 521(a)(1). On Dec. 27, 2012, the Debtor filed a Motion for Order Extending Time, seeking an unspecified extension of time to file his schedules and statement of financial affairs, and to file a Chapter 13 plan. The Debtor also asked the Court to reschedule the Sec. 341 meeting. The Court entered an Order Confirming Automatic Dismissal of Bankruptcy Case on Jan. 7, 2013. The dismissal was effective as of Dec. 29, 2012. RLB FRIENDSHIP: Updated Case Summary & Creditors' Lists ------------------------------------------------------- Lead Debtor: RLB Friendship, LLC 240 The Bluffs Austell, GA 30168-7835 Bankruptcy Case No.: 13-51742 Chapter 11 Petition Date: January 30, 2013 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Rodney L. Eason, Esq. THE EASON LAW FIRM Suite 200 6150 Old National Highway College Park, GA 30349-4367 Tel: (770) 909-7200 Fax: (770) 909-0644 E-mail: reason@easonlawfirm.com Scheduled Assets: $3,978,514 Scheduled Liabilities: $5,851,301 Affiliate that simultaneously filed separate Chapter 11 petition: Debtor Case No. ------ -------- Horizon Development, LLC 13-51744 Scheduled Assets: $4,000,259 Scheduled Debts: $5,425,622 The petition was signed by Joe H. Bajjani, general manager of Bajjani Services, Inc. Affiliate previously sought Chapter 11 protection: Petition Debtor Case No. Date ------ -------- ---- Georgia Hydraulic Cylinder, Inc. 12-75987 10/17/12 A. A copy of RLB Friendship, LLC's list of its eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb13-51742.pdf B. A copy of Horizon Development, LLC's list of its seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb13-51744.pdf SABRE HOLDINGS: S&P Rates New $2.55BB Senior Secured Credit 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed all existing ratings, including the 'B' corporate credit rating, on U.S. travel technology company Sabre Holdings Corp. The outlook is stable. At the same time, S&P assigned the company's proposed $2.55 billion senior secured credit facility (consisting of a $352 million revolving credit facility due 2018, $1.95 billion term loan B due 2019, and $250 million term loan C due 2018) a 'B' issue-level rating (the same as the corporate credit rating) with a recovery rating of '3', indicating S&P's expectation for meaningful (50% to 70%) recovery for debtholders in the event of a default. "The proposed transaction will help Sabre reduce its total interest expense and push out the nearest meaningful maturity to March 2016 when its senior unsecured notes mature," said Standard & Poor's credit analyst Andy Liu. "The proposed transaction is also expected to incorporate financial covenants that will ensure the company greater access to its $352 million revolving credit facility." The 'B' corporate credit rating incorporates S&P's assumption of fairly stable operating performance, despite an ongoing dispute with one of its largest airline customers, and competitive pressure at Travelocity, its online travel agency (OTA). S&P believes that Travelocity could continue to lose market share to Expedia Inc. and Priceline.com Inc. over the intermediate term. The rating outlook is stable. Standard & Poor's expects Sabre's credit measures to gradually improve in 2013, notwithstanding costs related to the pending AMR settlement. If Sabre can continue to perform and recover from the use of cash flow for the settlement as well as resolve its dispute with US Airways, S&P could raise the rating. An upgrade also would likely entail S&P's becoming convinced that pressures from airlines on GDSs are abating. On the other hand, if airlines gain the ability to disintermediate GDS , resulting in lower profitability and shrinking discretionary cash flow, S&P could lower the rating. SACO DISTRIBUTING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: SACO Distributing, Inc. dba Saco, Inc. 5435 Trebor Lane Knoxville, TN 37914 Bankruptcy Case No.: 13-30282 Chapter 11 Petition Date: January 30, 2013 Court: United States Bankruptcy Court Eastern District of Tennessee (Knoxville) Judge: Richard Stair Jr. Debtor's Counsel: Keith L. Edmiston, Esq. GRIBBLE CARPENTER & ASSOCIATES, PLLC 118 Parliament Drive Maryville, TN 37804 Tel: (865) 980-7700 Fax: (865) 980-7717 E-mail: kle@gribblecarpenter.com Scheduled Assets: $611,000 Scheduled Liabilities: $1,060,673 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/tneb13-30282.pdf The petition was signed by Jeff Ketron, president. SANMINA CORP: S&P Affirms 'B+' CCR; Revises Outlook to Positive --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on San Jose, Calif.-based Sanmina Corp., and revised the outlook to positive from stable. "The outlook revision reflects our expectation that Sanmina will stabilize its operating trends over the next 12 months, which combined with additional debt reduction will enable the company to maintain leverage at or below the low-3x level," said Standad & Poor's credit analyst Martha Toll-Reed. The rating on Sanmina reflects S&P's view of the company's "weak" business risk profile and an "aggressive" financial risk profile (as defined by S&P's criteria). S&P believes Sanmina will experience modest revenue declines in the first half of fiscal 2013 due to soft end-market demand and an uncertain macroeconomic environment. However, S&P expects the company will maintain annual EBITDA margins in the 4.5% to 5% range. S&P's profitability assumptions include the benefits of anticipated, second-half revenue growth and recent restructuring actions, which should largely offset variability in margins due to product mix shifts, new contracts (which can have lower initial margins) as well as some seasonal volatility. Sanmina offers vertically integrated manufacturing services to its original equipment manufacturers (OEMs), in which it assembles key system components and subcomponents. Sanmina's weak business risk profile reflects highly competitive industry conditions, limited earnings visibility, moderate concentration of customer sales, and low market share in some of its businesses. The company's good business position in low-volume, complex electronics manufacturing services partly offsets these negative factors. Sanmina reported revenues of $1.495 billion in the December 2012 quarter, down slightly from the year-ago period, primarily reflecting soft end- market demand. Given market uncertainty, S&P believes modest revenue declines will continue into calendar 2013. The quarterly EBITDA margin (adjusted for nonrecurring restructuring charges, stock-based compensation expense, and operating lease and pension obligations) was about 4.2% of sales in the December 2012 quarter, versus 5.1% in the year-earlier quarter. The margin decline was due to revenue weakness, including slower-than-expected growth in new contract revenues, and unfavorable product mix shifts. In S&P's view, margin pressures should diminish with the expected reversal of those trends. Although Sanmina has made significant debt reductions over the past 18 months, S&P views the company's financial risk profile as aggressive, reflecting its lack of operating performance predictability and the sensitivity of leverage metrics to EBITDA declines. These factors are partially mitigated by the announced debt redemption, and S&P's expectation of positive cash flow generation. Adjusted debt to EBITDA was 3.5x as of December 2012, down from 3.8x in the prior-year period, largely reflecting debt reductions. In S&P's assessment, the company's management and governance is "fair". The positive outlook reflects S&P's expectation that new business opportunities should result in modest revenue and EBITDA growth in the second half of 2013. If Sanmina can sustain adjusted debt to EBITDA at or below the low-3x level in fiscal 2013, while maintaining adequate liquidity, S&P could raise the rating in the next 12 months. However, if ongoing revenue declines cause adjusted EBITDA to fall 20% below the LTM December 2012 level (of approximately $283 million), S&P could revise the outlook to stable. SCHOOL SPECIALTY: Section 341(a) Meeting Scheduled for March 4 -------------------------------------------------------------- The U.S. Trustee has scheduled a meeting of creditors in the bankruptcy case of School Specialty, Inc., on March 4, 2013, at 2:00 p.m. at J. Caleb Boggs Federal Building, 5th Floor, Room 5209, Wilmington, DE. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About School Specialty Based in Greenville, Wisconsin, School Specialty is a supplier of educational products for kindergarten through 12th grade. Revenue in 2012 was $731.9 million through sales to 70% of the country's 130,000 schools. School Specialty and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 (Bankr. D. Del. Lead Case No. 13-10125) on Jan. 28, 2013, to facilitate a sale to lenders led by Bayside Financial LLC, absent higher and better offers. The petition was signed by David N. Vander Ploeg, the company's chief financial officer. Judge Kevin J. Carey presides over the case. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. Alvarez & Marsal North America LLC is the restructuring advisor and Perella Weinberg Partners LP is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. The petition disclosed assets of $494.5 million and debt of $394.6 million. SCIENTIFIC GAMES: S&P Puts 'BB' CCR on CreditWatch Negative ----------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'BB' corporate credit rating, on U.S. gaming services provider Scientific Games Corp. on CreditWatch with negative implications. The CreditWatch listing follows Scientific Games' announcement that it plans to acquire WMS Industries. Based on the announced terms, the transaction values WMS at $1.5 billion and will add roughly that same amount in additional debt. This would translate into an additional 0.6x of operating lease-adjusted debt to EBITDA, based on Scientific Games and WMS' combined EBITDA for the 12 months ended Sept. 30, 2012, and excluding synergies that Scientific Games expects to be able to achieve. On a trailing 12-month basis, leverage, as S&P measures it, was 5.1x for Scientific Games, compared with S&P's maximum threshold of 5.0x at the current rating. While leverage was slightly above S&P's maximum threshold, it had previously expected the company would begin to build in some cushion relative to this threshold, and S&P also indicated that it would likely consider lower ratings if the company embarked on larger-than-expected investments for acquisitions, such that S&P no longer believe the company has the ability or commitment to maintain leverage below 5x. On a trailing-12-month basis, this transaction results in leverage in the high-5x area, which is weak for the current rating on Scientific Games, in S&P's view. "We believe the acquisition demonstrates a financial policy that is more aggressive than we had previously anticipated, and are less certain of management's commitment, or ability, to maintain leverage, as we measure it, below 5x," said Standard & Poor's credit analyst Melissa Long. In addition to the increase in leverage, S&P believes this acquisition creates some degree of integration risk, particularly since the addition of WMS will expand the content and product offerings that Scientific Games offers. In resolving the CreditWatch listing, S&P will monitor the company's ability to address various closing conditions and receive the required regulatory approvals; update S&P's performance expectations for the combined company; and meet with management to discuss integration plans and potential synergies, near- and longer-term growth objectives, and financial policy. If a downgrade for Scientific Games is the outcome of S&P's analysis, it would likely be limited to one notch. SERVICEMASTER CO: Moody's Affirms 'B2' CFR; Outlook Negative ------------------------------------------------------------ Moody's Investors Service revised the ratings outlook of The ServiceMaster Company, Inc. debt to negative from stable. All debt ratings were affirmed, including the B2 Corporate Family, B2-PD Probability of Default, Ba3 senior secured debt instrument and B3 senior unsecured debt instrument ratings. Ratings Rationale "Current operating performance, especially at TruGreen, suggests revenue and profitability growth may be under pressure over the near term," noted Edmond DeForest, Moody's Senior Analyst. The negative outlook reflects Moody's expectation for a flat to low single digit revenue growth rate and flat profitability, making it unlikely for ServiceMaster to generate free cash flow to reduce debt meaningfully. As a result, Moody's expects debt to EBITDA to remain above 6.5 times through much of 2013, a level of financial leverage which is high for the B2 rating category. However, the proposed new bank loans will reduce the annual interest burden by about USD20 million per year and leave ServiceMaster without material debt maturities until 2017. The ratings could be downgraded if ServiceMaster's growth, efficiency and turn-around initiatives fail to produce EBITDA and free cash flow growth, if TruGreen does not demonstrate a turnaround during the coming season, or if Moody's expects debt to EBITDA to remain above 6 times or free cash flow to debt to be below 3%. The ratings outlook could be stabilized if profitable revenue growth can be achieved at TruGreen and maintained in other businesses, driving mid-single digit EBITDA growth and evidence of progress towards moving debt to EBITDA below 6 times. Expectations for free cash flow of at least USD200 million and a good liquidity from excess cash and revolving credit availability would also be important considerations to stabilize the ratings. The ratings could be upgraded if the company demonstrates steady revenue and profitability growth and improves credit metrics such that Debt to EBITDA and free cash flow to debt are sustained at less than 5 times and above 5%, respectively. Issuers: ServiceMaster Company (The); ServiceMaster Company (The) (Old); ServiceMaster Company LimitedPartnership(The) Outlook, Changed To Negative from Stable Issuer: ServiceMaster Company (The) Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Secured Bank Credit Facility, Affirmed Ba3 Senior Unsecured Bond, Affirmed B3 Issuer: ServiceMaster Company (The) (Old) Senior Unsecured Bond, Affirmed Caa1 Issuer: ServiceMaster Company LimitedPartnership(The) Senior Unsecured Bond, Affirmed Caa1 The principal methodology used in rating The ServiceMaster Company was the Global Business & Consumer Service Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. The ServiceMaster Company, based in Memphis, TN, provides lawn care, termite and pest control, home service contracts, cleaning and disaster restoration, house cleaning, furniture repair and home inspection products and services through company-owned operations and franchise licenses. Brands include: TruGreen, Terminix, American Home Shield (AHS), ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec. SERVICEMASTER CO: S&P Assigns 'B+' Rating to $2.253BB Secured Loan ------------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B+' senior secured debt rating to Memphis, Tenn.-based The ServiceMaster Co.'s proposed $2.253 billion secured term loan due 2017. The recovery rating on the secured term loan is '2', indicating S&P's expectation of substantial recovery (70%-90%) in a default scenario. "We expect proceeds from the proposed transaction to be used to refinance the outstanding roughly $1.2 billion secured term loan due 2014 and $1.0 billion secured term loan due 2017. While we expect total reported debt to remain relatively unchanged at approximately $4 billion, we estimate debt-to-EBITDA leverage has increased to the mid 7x area for full year 2012 and could rise to the high 7x area during the first half of 2013, as a result of lower EBITDA amid weak performance at its TruGreen lawn care segment. However, we estimate leverage will decline to the low 7x area by year-end 2013 as the company benefits from modest growth in its Terminix business, partly as a result of full year operation of 2012 acquisitions, and modest improvement in profitability at TruGreen for the 2013 lawn care season due to greater product offerings and operating efficiency," S&P said. "Our ratings on ServiceMaster reflect our view that the company's financial risk profile continues to be "highly leveraged," particularly since the company's balance sheet remains highly leveraged and we expect cash flow protection measures to continue to be weak. In addition, we continue to consider ServiceMaster's business risk profile to be "fair," reflecting our view that the company's business will remain sensitive to still weak economic conditions and consumer spending, as well as seasonal weather conditions. Our business risk assessment also incorporates the benefits ServiceMaster achieves from its business positions in its fragmented and competitive end markets, which have historically translated into good cash flow generation from a fairly diverse portfolio of services," S&P noted. RATINGS LIST The ServiceMaster Co. Corporate credit rating B/Stable/-- Ratings Assigned The ServiceMaster Co. Senior secured $2.253 billion term loan due 2017 B+ Recovery rating 2 SF & S PETROLEUM: Case Summary & 8 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: SF & S Petroleum Inc. 114 East Broadway Waukesha, WI 53186 Bankruptcy Case No.: 13-21045 Chapter 11 Petition Date: January 30, 2013 Court: United States Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Judge: Pamela Pepper Debtor's Counsel: Leonard G. Leverson, Esq. LEVERSON & METZ S.C. 225 East Mason Street Suite 100 Milwaukee, WI 53202 Tel: (414) 271-8503 E-mail: lgl@levmetz.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its eight largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/wieb13-21045.pdf The petition was signed by Shahbaz A. Qureshi, director. SILVERLINE ENERGY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Silverline Energy Services, LLC 10820 Gulfdale San Antonio, TX 78216 Bankruptcy Case No.: 13-50173 Chapter 11 Petition Date: January 30, 2013 Court: United States Bankruptcy Court Western District of Texas (San Antonio) Debtor's Counsel: James Samuel Wilkins, Esq. WILLIS & WILKINS, LLP 100 W Houston St, Suite 1275 San Antonio, TX 78205 Tel: (210) 271-9212 Fax: (210) 271-9389 E-mail: jwilkins@stic.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/txwb13-50173.pdf The petition was signed by Linda J. Ramirez Mendez, president. SK FOODS: Settlement In Principle Reached in Allied World Dispute ----------------------------------------------------------------- Allied World National Assurance Company and Allied World Assurance Company (U.S.) Inc. have reached a settlement in principle with all remaining defendants (except those defendants against whom the Clerk has already entered default) in the lawsuit against S.K. Foods PM Corp., SK Foods, L.P., and various parties. The Allied entities have reached separate agreements with two groups of defendants: the Chapter 11 Trustee for SK Foods, L.P. and RHM Industrial/Specialty; and the so-called Salyer Parties. The Salyer Parties are: 1) Frederick Scott Salyer, individually and as trustee for the Scott Salyer Revocable Trust, 2) Robert Pruett, Trustee for the Caroline Gazelle Salyer 1999 Irrevocable Trust and the Caroline Gazelle Salyer 2007 Irrevocable Trust (sued as The Caroline Gazelle Salyer Irrevocable Trust), the Stefanie Ann Salyer 1999 Irrevocable Trust and the Stefanie Ann Salyer 2007 Irrevocable Trust (sued as The Stefanie Ann Salyer Irrevocable Trust), 3) SK PM Corp., aka "S.K. Foods PM Corp.," 4) Blackstone Ranch, aka "Blackstone Ranch Calif `S' Corp," 5) SS Farms, LLC, 6) SARS, LLC, 7) CSSS LP, d/b/a Central Valley Shippers, 8) SK Foods LLC, 9) S.K. Foods PM Corp., 10) SKF Aviation, LLC, 11) SSC Farming LLC, 12) SSC Farms I, LLC, 13) SSC Farms II, LLC, 14) SSC Farms III, LLC, 15) SK Farm Services, LLC, 16) SK Frozen Foods, LLC, 17) Carmel Wine Merchants LLC, and 18) Salyer American Cooling. On Dec. 21, counsel for the Salyer Parties first informed counsel for Allied that several of the Salyer Parties have had entered receivership. As a result, there is some uncertainty regarding who has the authority to execute the settlement agreement on behalf of these parties. Counsel for the Salyer Parties has been in contact with the receiver for these parties, and expects to have confirmation regarding who has the authority to execute the settlement agreement within the next several days. Once the confusion over who has authority to enter into the settlement agreement is resolved, the parties expect to finalize the settlement agreements and proceed with seeking bankruptcy court approval of the Chapter 11 Trustee settlement agreement and the dismissal of the Allied lawsuit. At the present time, the parties do not believe that the current confusion over who has authority to enter into the settlement agreement will jeopardize the settlement in any way. In a Jan. 30 Joint Report available at http://is.gd/NIHSkGfrom Leagle.com, at the settling parties' behest, District Judge Lawrence J. Neill extended the Salyer Parties' deadline to respond to the First Amended Complaint until March 15, 2013; and the deadline for the Allied entities and the Salyer Parties to exchange initial disclosures pursuant to Fed. R. Civ. P. 26(a)(1) to March 15, 2013. On May 5, 2011, the Clerk entered default against defendants Circle Pacific Ltd., SK Foods, LP 401K Plan, and Sunrise Coast Japan. On May 6, 2011, the Clerk entered default against Salyer American Fresh Foods, and Salyer American Insurance Services. The lawsuit is styled, ALLIED WORLD NATIONAL ASSURANCE COMPANY, a New Hampshire corporation, and ALLIED WORLD ASSURANCE COMPANY (U.S. INC., a Delaware corporation, Plaintiffs, v. SK PM CORP., a California corporation aka "S.K. Foods PM Corp.," SK FOODS, L.P., a California limited partnership, FREDERICK SCOTT SALYER, an individual, BLACKSTONE RANCH, a California corporation aka "Blackstone Ranch Calif `S' Corp," LISA CRIST, an individual, MARK MCCORMICK, an individual, SCOTT SALYER REVOCABLE TRUST, a trust, THE CAROLINE GAZELLE SALYER IRREVOCABLE TRUST, a trust, THE STEFANIE ANN SALYER IRREVOCABLE TRUST, a trust, SS FARMS, LLC, a California limited liability company, SK FOODS, LP 401K PLAN, an ERISA plan aka "SK Foods L.P. Blackstone Ranch & SK Foods L.P. 401K Plan," SARS, LLC, a California limited liability company, CSSS LP, a California limited partnership d/b/a Central Valley Shippers, SK FOODS LLC, a Nevada limited liability company, S.K. FOODS PM CORP., an entity or a d/b/a of unknown legal capacity, SKF AVIATION, LLC, a California limited liability company, SSC FARMING, LLC, a California limited liability company, RHM INDUSTRIAL/SPECIALTY FOODS, INC., a California corporation d/b/a Colusa County Canning Company and d/b/a SK Foods ? Colusa Canning, CARMEL WINE MERCHANTS LLC, a California limited liability company, CIRCLE PACIFIC LTD., a New Zealand company, SUNRISE COAST JAPAN, an entity or a d/b/a of unknown legal capacity, SSC FARMS I, LLC, a California limited liability company, SSC FARMS II, LLC, a California limited liability company, SK FARM SERVICES, LLC, a California limited liability company, SK FROZEN FOODS, LLC, a California limited liability company, SALYER AMERICAN INSURANCE SERVICES, a California limited liability company, SSC FARMS III, LLC, a California limited liability company, SALYER AMERICAN COOLING, a general partnership, SALYER WESTERN COOLING COMPANY, a general partnership, YUMA AMERICAN COOLING CORPORATION, an entity or a d/b/a of unknown legal capacity, SAWTOOTH COOLING, LLC, a California limited liability company, and SALYER AMERICAN FRESH FOODS, a California corporation, Defendants, Case No. 1:10-CV- 01262-LJO-JLT (E.D. Calif.). Allied World National Assurance Company and Allied World Assurance Company (U.S.) Inc. are represented by: Terrence R. McInnis, Esq. Kevin F. Kieffer, Esq. Peter R. Luicer, Esq. TROUTMAN SANDER LLP E-mail: terrnece.mcinnis@troutmansanders.com kevin.kieffer@troutmandsers.com peter.lucier@troutmansanders.com Attorneys for Bradley D. Sharp, the Chapter 11 Trustee, are: Gregory C. Nuti, Esq. Kevin W. Coleman, Esq. Kathryn N. Richter, Esq. SCHNADER HARRISON SEGAL & LEWIS LLP E-mail: gnuti@schnader.com kcoleman@schnader.com krichter@schnader.com The Law Offices of David C. Winton -- david@dcwintonlaw.com -- argues for Frederick Scott Salyer individually and as trustee for the Scott Salyer Revocable Trust, Robert Pruett, Trustee for the Caroline Gazelle Salyer 1999 Irrevocable Trust, the Caroline Gazelle Salyer 2007 Irrevocable Trust, the Stefanie Ann Salyer 1999 Irrevocable Trust and the Stefanie Ann Salyer 2007 Irrevocable Trust, SK PM Corp., aka "S.K. Foods PM Corp.," Blackstone Ranch, aka "Blackstone Ranch Calif `S' Corp," SS Farms, LLC, SARS, LLC, CSSS LP, d/b/a Central Valley Shippers, SK Foods LLC, S.K. Foods PM Corp., SKF Aviation, LLC, SSC Farming LLC, SSC Farms I, LLC, SSC Farms II, LLC, SSC Farms III, LLC, SK Farm Services, LLC, SK Frozen Foods, LLC. About SK Foods SK Foods LP ran a tomato processing facility. It filed for Chapter 11 bankruptcy protection after being dropped by its lending group. Creditors filed an involuntary Chapter 11 petition against SK Foods LP and affiliate RHM Supply/ Specialty Foods Inc. (Bankr. E.D. Calif. Case No. 09-29161) on May 8, 2009. SK Foods had said it was preparing to file a voluntary Chapter 11 petition when the creditors initiated the involuntary case. The Company later put itself into Chapter 11 and Bradley D. Sharp was appointed as Chapter 11 trustee. The Debtors were authorized on June 26, 2009, to sell the business for $39 million cash to a U.S. arm of Singapore food processor Olam International Ltd. The replacement cost for the assets is $139 million, according to Olam. As reported by the Troubled Company Reporter on Feb. 19, 2010, a federal grand jury returned a seven-count indictment charging Frederick Scott Salyer, former owner and CEO of SK Foods, with violations of the Racketeer Influenced and Corrupt Organizations Act, in connection with his direction of various schemes to defraud SK Foods' corporate customers through bribery and food misbranding and adulteration, and with wire fraud and obstruction of justice. Salyer supporters launched a Web site which can be accessed from two addresses: http://www.operationrottentomato.comand http://www.scott-salyer.com SOUTHERN AIR: Sets March 14 Confirmation for New Plan ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that although Southern Air Holdings Inc. had approval from the bankruptcy court in December for sending a reorganization plan to creditors for a vote, the cargo airline decided instead to negotiate with the creditors' committee which was opposing the plan. As a result, the airline reached agreement with the committee and filed a new version of the plan. The bankruptcy court in Delaware this week approved revised explanatory disclosure materials and scheduled a March 14 confirmation hearing for approval of the modified plan. Southern Air also said it lost a customer, necessitating recalculation of projections underpinning the creditor settlement and the disclosure statement. The report recounts that, Southern Air, acquired in 2007 by Oak Hill Capital Partners LP, filed for bankruptcy reorganization in September after working out a plan giving a $17.5 million term loan and 82.5% of the stock to secured lenders in return for $295 million in debt. The recovery by the lenders was originally projected as being 11.9% to 20.6%. The original court-approved disclosure materials told unsecured creditors with $101 million in claims they could expect a recovery between 2.6% and 3.1% by splitting up $2 million cash. According to the report, the revised plan will fund a trust for unsecured creditors with $2.5 million. Unsecured creditors are now told to expect a recovery between 2.4% and 2.6%. Under the revised plan, the recovery is pegged at 10.4% to 17.5%. Secured lenders will participate in the litigation trust only after unsecured creditors recover 10%. Oak Hill is to retain the other 17.5% in return for making payments to cover lease obligations and provide capital. About Southern Air Based in Norwalk, Connecticut, military cargo airline Southern Air Inc. -- http://www.southernair.com/-- its parent Southern Air Holdings Inc. and their affiliated entities filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12690 to 12-12707) in Wilmington on Sept. 28, 2012, blaming the decline in business from the U.S. Department of Defense, which reduced its troop count in Afghanistan and hired Southern Air less frequently. Bankruptcy Judge Christopher S. Sontchi presides over the case. Brian S. Rosen, Esq., Candace Arthur, Esq., and Gabriel Morgan, Esq., at Weil, Gotshal & Manges LLP; and M. Blake Cleary, Esq., and Maris J. Kandestin, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtor's counsel. Zolfo Cooper LLC serves as the Debtors' bankruptcy consultant and special financial advisor. Kurtzman Carson Consultants, LLC, serves as claims and notice agent. CF6-50, LLC, debtor-affiliate, disclosed $338,925,282 in assets and $288,000,000 in liabilities as of the Chapter 11 filing. The petition was signed by Jon E. Olin, senior vice president. Canadian Imperial Bank of Commerce, New York Agency, the DIP agent and prepetition agent, is represented by Matthew S. Barr, Esq., and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP; and Mark D. Collins, Esq., and Katherine L. Good, Esq., at Richards Layton & Finger PA. Stephen J. Shimshak, Esq., and Kelley A. Cornish, Esq., at Paul Weiss Rifkind Wharton & Garrison LLP; and Mark E. Felger, Esq., at Cozen O'Connor, represent Oak Hill Capital Partners II, LP, OH Aircraft Acquisition LLC, and Oak Hill Cargo 360 LLC. The Debtors' Plan provides that lenders agreed to accept ownership of the company as payment for their $288 million loan. On Nov. 21, 2012, Roberta DeAngelis, U.S. Trustee for Region 3, appointed the statutory committee of unsecured creditors. Lowenstein Sandler PC and Pachulski, Stang, Ziehl & Jones LLP serves as its co-counsels, and Mesirow Financial Consulting LLC serves as its financial advisor. STAMP FARMS: Auction Scheduled for Feb. 5 ----------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Stamp Farms LLC, the owner of about 20,000 acres spread across six Michigan counties, will hold an auction Feb. 5 to learn if there is a better offer than the $22.8 million bid from Boersen Farms Inc. Under sale procedures approved Jan. 29, competing bidders must qualify by Feb. 1. A hearing to approve the sale will take place Feb. 7. About Stamp Farms Stamp Farms, L.L.C., and three affiliates sought Chapter 11 protection (Bankr. W.D. Mich. Lead Case No. 12-10410) on Nov. 30, 2012, in Grand Rapids, Michigan. Stamp Farms began in 1968 with its purchase of 168 acres of farmland in Decatur, Michigan. The family was also heavily involved in the swine industry, operating a 500 sow swine operation until 1995. In 1997, Mike Stamp took over operations of Stamp Farms' 1500 acres and has grown the farm operation to cover 20,000+ acres across six southwestern Michigan counties. Debtor Stamp Farms sells its grain to Northstar Grain, L.L.C., solely owned by Mike Stamp, which conducts a grain elevator business on land it owns and leases and upon which buildings, grain storage bins, grain loading and related equipment and rail spurs are located. Stamp Farms estimated at least $10 million in assets and at least $50 million in liabilities in its bare-bones petition. Mr. Stamp also filed a Chapter 11 petition (Case No. 12-10430). Judge Scott W. Dales oversees the case. The Debtor has hired the law firm of Varnum LLP as counsel. STEBNER REAL ESTATE: Feb. 19 Established as Claims Bar Date ----------------------------------------------------------- Bankruptcy Judge Timothy W. Dore in Seattle, Washington, has established Feb. 19, 2013, as the deadline for creditors of Stebner Real Estate Inc., to file proofs of claim. In December, the Debtor's lawyer filed papers in Court seeking to employ Bill Henshaw as the Debtor's realtor. In addition, Marc S. Stern, the receiver/custodian for the Debtor's assets, obtained Court authority to hire Saratoga Management to manage the Cornwall property in accordance with a management agreement. The ruling said Derek Stebner's contact with Saratoga Management or any real estate agent employed by the Custodian will be made through counsel unless other arrangements are made. Mr. Stern is exclusively authorized to negotiate, approve, or decide the sale of all of the properties. AmericanWest Bank, a creditor, in November sought to terminate the Debtor's exclusive rights to propose and solicit acceptances of a reorganization plan. The Debtor opposed the request. A hearing was set for Nov. 30 and no ruling has been posted on the court docket. Stebner Real Estate Inc., which is based in Scottsdale, Arizona, filed a bare-bones Chapter 11 petition (Bankr. W.D. Wash. Case No. 12-19825) in Seattle on Sept. 26, 2012. The Debtor estimated assets and debts of $10 million to $50 million. Jeffrey B. Wells, Esq., in Seattle, serves as counsel to the Debtor. Derek Stebner, the president, signed the Chapter 11 petition. Seattle-based Marc S. Stern -- marc@hutzbah.com -- of Marc S. Stern Attorney at Law, acts as pro se receiver/custodian for the Debtor. SUPERVALU INC.: Moody's Rates $850MM Senior Secured Loan 'B1' ------------------------------------------------------------- Moody's revised two items in its previously released report on SUPERVALU Inc.'s new term loan: The following rating is affirmed and will be withdrawn upon closing: SUPERVALU Inc. USD850 million senior secured loan maturing 2018 at B1 (LGD2, 26%) The following ratings are withdrawn: New Albertson's Inc. Senior Unsecured Shelf and MTN programs at (P) Caa1 (LGD5, 71%) SUPERVALU Inc. is headquartered in Eden Prairie, Minnesota and proforma for the proposed sale of majority of its retail grocery stores it will have about 1,520 stores, including 1,329 Save-A-Lot stores of which 946 are licensed to third party-operators. SUPERVALU also has a food distribution business serving over 1,950 independent grocery stores in addition to its own stores. The company's proforma annual sales will be approximately USD17 billion. SYNIVERSE HOLDINGS: Loan Increase No Impact on Moody's 'B2' CFR --------------------------------------------------------------- Moody's Investors Services said Syniverse Holdings Inc.'s B2 Corporate Family Rating and stable outlook remain unchanged following the company's announcement to upsize its senior secured delayed draw term loan due April 2019 to USD700m from the initial proposal of USD625m. The principal methodology used in rating Syniverse was the Global Business & Consumer Service Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Tampa, Florida, Syniverse Holdings, Inc. provides interoperability and network services for wireless telecommunication carriers. In recent years, the company has expanded its product offering to encompass GSM capability and geographic presence through both acquisitions and new product development adapting both to a changing technology and customer landscape. The company had revenues of USD752 million for the last twelve month ended September 30, 2012. VITRO SAB: Nears Settlement With Bondholders -------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Vitro SAB and U.S. bondholders may be near a settlement of disputes that resulted in bankruptcies in the U.S. and Mexico following the Mexican glassmaker's default on $1.2 billion in bonds in May 2009. Vitro, the report relates, agreed to an injunction issued Jan. 29 by the U.S. Bankruptcy Court in Dallas. The injunction prohibiting Vitro and subsidiaries from transferring assets outside of the ordinary course of business was made "to allow parties to continue settlement negotiations," according to court records. The injunction was slated to expire Feb. 1 unless the parties agree to an extension. Bloomberg News notes that the bondholders racked up a number of victories, the most notable in November when the U.S. Court of Appeals in New Orleans upheld the bankruptcy court by ruling that Vitro's Mexican bankruptcy reorganization plan wasn't worthy of enforcement in the U.S. because it absolved Vitro subsidiaries of their guarantees on bonds without the units being in bankruptcy anywhere. According to the report, since then the bondholders turned up the heat, contending that Vitro orchestrated numerous fraudulent transfers before and during bankruptcy. The bankruptcy judge was scheduled to rule on a bondholder initiative where subsidiary Vitro Packaging de Mexico SAB in substance would be deprived of bankruptcy relief in the U.S. The report relates that U.S. Bankruptcy Judge Harlin "Cooter" Hale in Dallas agreed in the Jan. 29 injunction that he won't rule. His injunction orders the Vitro parent and 55 subsidiaries to operate only in the ordinary course of business and prohibits them from "moving assets or diverting business opportunities to other entities" so long as the injunction is in effect. "Throughout its restructuring process, Vitro has always complied with both Mexican and U.S. law," Vitro General Counsel Alejandro Sanchez Mujica said in an e-mailed statement. The appeal in the Circuit Court is Vitro SAB de CV v. Ad Hoc Group of Vitro Noteholders (In re Vitro SAB de CV), 12-10689, U.S. Court of Appeals for the Fifth Circuit (New Orleans). About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. Vitro is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009, and sought to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. Concurso Mercantil & Chapter 15 Proceedings Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, commencing its voluntary concurso mercantil proceedings -- the Mexican equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. But an appellate court in Mexico reinstated the reorganization in April 2011. Following the reinstatement, Vitro SAB on April 14, 2011, re-filed a petition for recognition of its Mexican reorganization in U.S. Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11-11754). The Vitro parent received sufficient acceptances of its reorganization by using the US$1.9 billion in debt owing to subsidiaries to vote down opposition by bondholders. The holders of US$1.2 billion in defaulted bonds opposed the Mexican reorganization plan because shareholders could retain ownership while bondholders aren't being paid in full. Vitro announced in March 2012 that it has implemented the reorganization plan approved by a judge in Monterrey, Mexico. In the present Chapter 15 case, the Debtor seeks to block any creditor suits in the U.S. pending the reorganization in Mexico. Chapter 11 Proceedings A group of noteholders opposed the exchange -- namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P. Together, they held US$75 million, or approximately 6% of the outstanding bond debt. The Noteholder group commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders, known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. A bankruptcy judge in Fort Worth, Texas, denied involuntary Chapter 11 petitions filed against four U.S. subsidiaries. On April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro America LLC and three other U.S. subsidiaries -- that were subject to the involuntary petitions into voluntary Chapter 11. The Texas Court on April 21 denied involuntary petitions against the eight U.S. subsidiaries that didn't consent to being in Chapter 11. Kurtzman Carson Consultants is the claims and notice agent to Vitro America, et al. Alvarez & Marsal North America LLC, is the Debtors' operations and financial advisor. The official committee of unsecured creditors appointed in the Chapter 11 cases of Vitro America, et al., has selected Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. Blackstone Advisory Partners L.P. serves as financial advisor to the Committee. The U.S. Vitro companies sold their assets to American Glass Enterprises LLC, an affiliate of Sun Capital Partners Inc., for US$55 million. U.S. subsidiaries of Vitro SAB are having their cases converted to liquidations in Chapter 7, court records in January 2012 show. In December, the U.S. Trustee in Dallas filed a motion to convert the subsidiaries' cases to liquidations in Chapter 7. The Justice Department's bankruptcy watchdog said US$5.1 million in bills were run up in bankruptcy and hadn't been paid. On June 13, 2012, U.S. Bankruptcy Judge Harlin "Cooter" Hale in Dallas entered a ruling that precluded Vitro from enforcing its Mexican reorganization plan in the U.S. Vitro's appeal is pending. In November, the U.S. Court of Appeals Judge Carolyn King ruled that Vitro SAB won't be permitted to enforce its bankruptcy reorganization plan in the U.S. She said that Vitro "has not shown that there exist truly unusual circumstances necessitating the release" preventing bondholders from suing subsidiaries. WAUPACA FOUNDRY: Moody's Affirms 'B2' Rating on $374MM Sr. Loan --------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Waupaca Foundry, Inc., including the B1 Corporate Family Rating, the B1-PD Probability of Default Rating, and the B2 rating on the upsized USD374 million senior secured term loan. The rating outlook is stable. The following ratings were affirmed: Corporate Family Rating, B1; Probability of Default Rating, B1-PD; B2 (LGD4, 67%), for the upsized USD374 million senior secured term loan The assigned ratings are subject to Moody's review of the final terms and conditions of the proposed transaction below, and review of the company's September 30, 2012 fiscal year-end audited financials. Ratings Rationale The affirmation of Waupaca's B1 Corporate Family Rating incorporates approximately USD150 million of incremental debt being incurred to support a special dividend to the company's sponsors, balanced by the company's diverse revenue profile within the iron castings industry. The company's focus on shareholder returns is a detractor to the ratings. However, improving North American automotive demand has driven higher profitability. As a result, Waupaca's reduction in Debt/EBITDA leverage, following the proposed special dividend, will lag Moody's previous expectations when the initial rating was assigned in June 2012. Yet, the company's pro forma Debt/EBITDA leverage (including Moody's standard adjustments) is estimated at about 3.1x and continues to support the assigned rating. Softening demand in the North American commercial vehicle and off-highway markets (about 20% and 19% of the company's revenues, respectively) may further pressure Waupaca's leverage over the coming quarters. This risk is expected to be partially mitigated by Waupaca's exposure to the North American automotive light vehicle market (at about 50% of revenues), where Moody's expects U.S retail sales to grow about 3.6% in 2013. The stable outlook incorporates Waupaca's relatively strong credit metrics following the special dividend, exposure to the growing North American automotive light vehicle market, and good liquidity profile. Waupaca is expected to have a good liquidity profile over the near term supported by positive free cash flow and modest availability under the asset based revolving credit facility. Following the special dividend transaction, Waupaca is anticipated to have nominal cash balances on hand. Yet, positive free cash flow is expected over the near-term, supported by revenue growth in North America as well as modest working capital and capital reinvestment needs. Borrowing base availability under the USD225 million asset based revolving credit facility is expected to support operating flexibility over the near-term. Financial covenants under the term loan include a maximum leverage test and a minimum fixed charge coverage test which will be reset with the proposed transaction. The asset based revolver's financial covenant is a springing minimum fixed charge coverage test. Alternate liquidity is limited as essentially all of the company's assets secure the credit facilities. An improvement in Waupaca's rating could occur if the company is able to sustain EBIT/Interest above 3.5x and Debt/EBITDA below 3.0x while demonstrating a financial policy that is focused on debt reduction rather than shareholder returns. The rating could be lowered if automotive production levels weaken or if the company's profit margins deteriorate to drive EBIT/Interest below 2.0x or Debt/EBITDA to approach 4.0x. A deteriorating liquidity profile or shareholder distributions that signal a shift to more aggressive financial policies also could lead to a lower rating. The principal methodology used in this rating was the Global Automotive Supplier Industry Methodology published in January 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Waupaca Foundry, Inc., headquartered in Waupaca, Wisconsin, is an iron foundry and manufacturer of gray, ductile and compacted graphite iron castings. The company's products are sold into the commercial vehicle, off-highway, agriculture, construction, hydraulic, and materials handling markets. Revenues for fiscal year 2012 were approximately USD1.7 billion. The company is a wholly-owned subsidiary of affiliates of KPS Capital Partners, LP. WEBCO VENDING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Webco Vending Corporation, LLC 223 Elizabeth Street Proctorville, OH 45669 Bankruptcy Case No.: 13-30041 Chapter 11 Petition Date: January 30, 2013 Court: United States Bankruptcy Court Southern District of West Virginia (Huntington) Judge: Ronald G. Pearson Debtor's Counsel: Mitchell Lee Klein, Esq. KLEIN LAW OFFICE 3566 Teays Valley Road Hurricane, WV 25526 Tel: (304) 562-7111 Fax: (304) 562-7115 E-mail: swhittington@kleinandsheridan.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/wvsb13-30041.pdf The petition was signed by Timothy Robert Webb II. WINDSOR QUALITY: S&P Revises Outlook to Stable; Affirms All Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services revised the rating outlook to stable from negative and affirmed its ratings, including the 'B+' corporate credit rating, on U.S.-based Windsor Quality Food Co. Ltd. In addition, S&P affirmed the 'BB-' issue-level ratings on Windsor's revolving credit and term loan facilities. The recovery rating remains '2', indicating S&P's expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. "The outlook revision reflects our belief that Windsor will maintain adequate liquidity during the next 12 months," said Standard & Poor's credit analyst Bea Chiem. In September 2012, the company received a covenant amendment that reset its leverage tests for the September 2012 quarter through June 2014. As of Sept. 30, 2012, the company was in compliance with its financial covenants with more than 15% cushion, and S&P expects the company will maintain at least 15% covenant cushion during the next 12 months. * China's Practices Harm American Solar Manufacturers, Says Group ----------------------------------------------------------------- The Coalition for American Solar Manufacturers on Feb. 1 announced appeals in recent trade cases to counter illegal Chinese trade practices. A key appeal, according to CASM, challenges a loophole in the scope of the U.S. trade remedies that allows Chinese producers to evade duties and continue to benefit from illegal, export-intensive subsidies and dump product into the U.S. market. Appeals filed on Feb. 1 with the U.S. Court of International Trade in New York challenge the Department of Commerce's formulation of the cases' scope to cover all solar cells and panels manufactured in China but not cells manufactured elsewhere and assembled into panels in China, CASM announced. The SolarWorld-led coalition argues that Chinese producers of solar panels made from photovoltaic cells produced elsewhere receive the same illegal Chinese subsidies and illegally dump at the same artificially low prices as other Chinese manufacturers. From the 2011 outset of its cases, CASM says, SolarWorld's scope covered both cells and panels; however, the Department of Commerce curtailed it, the coalition says. "With our cases, the U.S. government went a long way in investigating and attempting to halt the anti-competitive and destructive impacts of China's illegal trade practices on America's domestic solar industry," said Gordon Brinser, president of SolarWorld Industries America Inc., based in Oregon. "Now we are looking to finish the job. American jobs depend on it." CASM represents a still-growing coalition representing more than 230 U.S. solar installers, integrators and producers employing more than 18,000 American workers. The National Renewable Energy Laboratories, according to CASM, has concluded that it costs more to produce and ship solar technology for the U.S. market from China than from the United States. In the cases, CASM says, Commerce also found that due to the many illegal categories of illegal subsidies, Chinese producers were selling exports in the U.S. market at prices below their costs of production. The bipartisan U.S. International Trade Commission (ITC) voted 6-0 that China's trade practices were harming U.S. manufacturing. More than 25 solar manufacturers of all kinds have dramatically downsized, filed for bankruptcy or quit the business since 2010, CASM says. In late 2012, after Commerce's year-long investigation found illegal Chinese subsidization and pricing, the department imposed import duties ranging from 24 percent up to more than 250 percent on solar imports of crystalline silicon solar technology made in China. But because Commerce's final orders excluded panels assembled in China from cells produced elsewhere, CASM says, Chinese producers can grow silicon crystal, slice that crystal into solar wafers, outsource conversion of those wafers into cells to Taiwan or elsewhere, then bring them back for assembly into panels for export to the U.S. market without facing any measure to offset the anti-competitive effects of China's illegal subsidies and U.S. pricing. In addition to the scope issue, SolarWorld's appeals challenge U.S. government determinations: -- Not to investigate Chinese subsidies on aluminum extrusions and rolled glass, which the Department of Commerce has found in other, similar cases to be illegally subsidized and dumped in the U.S. market. -- Granting separate, lower duty rates for several large Chinese companies such as Trina Solar, Hanwha SolarOne, Chint Solar and JA Solar that should not have qualified for such rates because the companies failed to provide sufficient evidence that they were not ultimately owned or controlled by the Chinese government. SolarWorld co-founded a coalition in Europe that is similar to CASM but called EU ProSun. The European coalition expects the European Commission this spring to announce preliminary findings on its trade allegations about Chinese solar imports, CASM says. The Coalition for American Solar Manufacturing, founded by seven companies that manufacture solar cells and panels in the United States, has more than 230 employers with over 18,000 workers who have registered their support for CASM's case. The founding manufacturers have plants in nearly every region in the United States, including the Northwest and California, the Southwest, Midwest, Northeast and South and support several thousand U.S. manufacturing jobs. * U.S. Tomato Producers Want Old Antidumping Petition Withdrawn --------------------------------------------------------------- In June 2012, U.S. tomato producers from throughout the United States filed a request to withdraw the 16-year old antidumping petition and have the existing suspension agreement covering fresh tomato exports from Mexico terminated. Their effort was designed to ensure a fair and transparent market as U.S. law provides. After extensive consultations with the U.S. Department of Commerce, domestic tomato growers indicated tentative support for the revisions negotiated by the U.S. Government and Mexican growers. After being briefed on the tentative agreement, the Florida Tomato Exchange and Certified Greenhouse Farmers released the following statement: Reggie Brown, Executive Vice President of the Florida Tomato Exchange, said, "[Sun]day, the U.S. Government initialed an agreement with Mexican growers that they believe will address unfair trade in fresh tomatoes. The existing suspension agreement had serious flaws and injury was being felt by U.S. producers and their workers. We have been honored and humbled by the support we have received from Agricultural Commissioners and Secretaries in a number of states, Members of Congress and representatives of the workers, most importantly the Coalition of Immokalee Workers, in the fight for fair trade." Mr. Brown continued, "Mexican growers and their government have tried to protect their interests with tremendous pressure on our government, threats to U.S. producers and a well-funded lobbying and media campaign. The facts, however, were clear and could not be disputed. Mexican tomatoes were being sold in the U.S. market in rapidly increasing volumes at prices that did not reflect the cost of production. In technical trade jargon, that's known as "dumping" and is illegal under U.S. and Mexican trade laws and the suspension agreement that Mexican producers had signed with the U.S. Department of Commerce. The public understands its real impact which has been declining production and employment, the bankruptcy of growers and community devastation." "Undersecretary Sanchez and his entire team have worked hard to update the suspension agreement to deal with the concerns of domestic producers and to achieve an agreement that more closely follows the statutory mandates. Growers in Florida and across the country appreciate his efforts and those of the Department and others in the Obama Administration. Hard work remains, but they've consulted closely with us in the days leading up to this tentative agreement. Domestic growers have been focused on the proper implementation of U.S. law and the need for any agreement to reflect accurate cost data. In the future, the government will have to affirm the accuracy of Mexican growers' cost of production," said Mr. Brown. Edward Beckman, President of Certified Greenhouse Farmers, said, "The law entitles our industry to fair conditions of trade in fresh tomatoes. That's been the simple goal of this effort. In the sixteen years since the first suspension agreement was imposed upon domestic producers, the industry has changed dramatically but the suspension agreement has failed to change with the times as technology and growing methods have changed. The agreement has not even kept up with inflation. During the negotiations between the Department of Commerce and Mexico and their growers, we identified three essential components to any new agreement to bring about fair trade: pricing, coverage, and enforcement. Each component had to reflect the reality of today's market: inflation of almost 250% since the base year in Mexico; the changes within the industry in both the U.S. and Mexico that have taken place over the last sixteen years, including the growing importance of greenhouse tomatoes which have dramatically different growing environments and cost structures; and, the gaming of the system by Mexican exporters that has occurred." Mr. Beckman, commented, "We believe that the Department of Commerce and Mexico have struck a deal that meets those three tests, and we're hopeful and optimistic that we'll be able to compete under fair trade conditions. Much work remains to have the agreement fully and faithfully implemented and continuous monitoring and enforcement will be critical. We're confident that our government understands the challenges facing the U.S. industry and will work with us in the coming days to achieve its objectives. The domestic industry will be evaluating administrative opportunities to ensure that, in fact, the statutory requirements are met and continue to be met over time." "It's important to recognize that since tomato growers first raised concerns about unfair trade with Mexico 16 years ago, the market has changed considerably. This new suspension agreement recognizes the changes and includes definitions to cover the evolution and diversification of the market. These provisions will protect consumer interests and promote the further development and diversification of the market while ensuring that growers receive a fair price for those products", said Mr. Beckman. * CoreLogic Reports 767,000 Completed Foreclosures in 2012 ---------------------------------------------------------- CoreLogic(R) on Feb. 1 released its National Foreclosure Report, which provides data on completed U.S. foreclosures and the overall foreclosure inventory. According to CoreLogic, there were 56,000 completed foreclosures in the U.S. in December 2012, down from 71,000 in December 2011, a year-over-year decrease of 21 percent. On a month-over-month basis, completed foreclosures fell from 58,000* in November 2012 to the current 56,000, a decrease of 3 percent. As a basis of comparison, prior to the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month between 2000 and 2006. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 4.1 million completed foreclosures across the country. Approximately 1.2 million homes were in the national foreclosure inventory as of December 2012 compared to 1.5 million in December 2011, a 19.5 percent year-over-year decrease. Month over month, the national foreclosure inventory was down 4.2 percent from November 2012 to December 2012. The foreclosure inventory is the share of all mortgaged homes in any stage of the foreclosure process. The national foreclosure inventory as of December 2012 represented 3 percent of all homes with a mortgage. "The most encouraging foreclosure trend reported here is that the inventory of foreclosed properties is almost 20 percent smaller than a year ago," said Mark Fleming, chief economist for CoreLogic. "This big improvement indicates we are working toward resolving the backlog of the most distressed assets in the shadow inventory." "The rate of foreclosures continues to trend down, albeit at a slower rate as we exit 2012," said Anand Nallathambi, president and CEO of CoreLogic. "This trend should continue into 2013 and is another positive signal that the gradual healing process in the housing market is gaining traction." Highlights as of December 2012: -- The five states with the highest number of completed foreclosures for the 12 months ending in December 2012 were: California (100,000), Florida (98,000), Michigan (74,000), Texas (57,000) and Georgia (49,000). These five states account for almost half of all completed foreclosures nationally. -- The five states with the lowest number of completed foreclosures for the 12 months ending in December 2012 were: District of Columbia (89), Hawaii (421), North Dakota (521), Maine (537) and West Virginia (645). -- The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: Florida (10.1 percent), New Jersey (7.0 percent), New York (5.1 percent), Nevada (4.7 percent) and Illinois (4.5 percent). -- The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were: Wyoming (0.4 percent), Alaska (0.6 percent), North Dakota (0.7 percent), Nebraska (0.8 percent) and Colorado (1.0 percent). *November data was revised. Revisions are standard, and to ensure accuracy, CoreLogic incorporates newly released data to provide updated results. Table 1: Judicial Foreclosure States Foreclosure Ranking (Sorted by Completed Foreclosures) Table 2: Non-Judicial Foreclosure States Foreclosure Ranking (Sorted by Completed Foreclosures) Table 3: Foreclosure Data for Select Large Core Based Statistical Areas (CBSAs) (Sorted by Completed Foreclosures) Figure 1: Number of Mortgaged Homes per Completed Foreclosure Judicial Foreclosure States vs. Non-Judicial Foreclosure States (3-month moving average) Figure 2: Foreclosure Inventory as of December 2012 Judicial Foreclosure States vs. Non-Judicial Foreclosure States Figure 3: Foreclosure Inventory by State Map Methodology The data in this report represent foreclosure activity reported through December 2012. This report separates state data into judicial vs. non-judicial foreclosure state categories. In judicial foreclosure states, lenders must provide evidence to the courts of delinquency in order to move a borrower into foreclosure. In non-judicial foreclosure states, lenders can issue notices of default directly to the borrower without court intervention. This is an important distinction since judicial states, as a rule, have longer foreclosure timelines, thus affecting foreclosure statistics. A completed foreclosure occurs when a property is auctioned and results in the purchase of the home at auction by either a third party, such as an investor, or by the lender. If the home is purchased by the lender, it is moved into the lender's real estate owned (REO) inventory. In "foreclosure by advertisement" states, a redemption period begins after the auction and runs for a statutory period, e.g., six months. During that period, the borrower may regain the foreclosed home by paying all amounts due as calculated under the statute. For purposes of this Foreclosure Report, because so few homes are actually redeemed following an auction, it is assumed that the foreclosure process ends in "foreclosure by advertisement" states at the completion of the auction. The foreclosure inventory represents the number and share of mortgaged homes that have been placed into the process of foreclosure by the mortgage servicer. Mortgage servicers start the foreclosure process when the mortgage reaches a specific level of serious delinquency as dictated by the investor for the mortgage loan. Once a foreclosure is "started," and absent the borrower paying all amounts necessary to halt the foreclosure, the home remains in foreclosure until the completed foreclosure results in the sale to a third party at auction or the home enters the lender's REO inventory. The data in this report accounts for only first liens against a property and does not include secondary liens. The foreclosure inventory is measured only against homes that have an outstanding mortgage. Homes with no mortgage liens can never be in foreclosure and are therefore excluded from the analysis. Approximately one-third of homes nationally are owned outright and do not have a mortgage. CoreLogic has approximately 85 percent coverage of U.S. foreclosure data. About CoreLogic CoreLogic -- http://www.corelogic.com-- is a property information, analytics and services provider in the United States and Australia. The company's combined data from public, contributory, and proprietary sources includes over 3.3 billion records spanning more than 40 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, transportation and government. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and managed services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in seven countries. * U.S. Banks' Heavy 1Q Debt Issuance Bolsters Liquidity ------------------------------------------------------- The largest U.S. banks have generally moved quickly to address their 2013 funding objectives in January, issuing at least $25 billion in senior long-term debt this month, bolstering already strong liquidity positions. Fitch Ratings views this as an opportunistic response to the persistence of very low long-term borrowing costs, even though scheduled debt maturities for the five largest institutions are lower in aggregate by $130 billion compared with 2012. "Major U.S. banks generally have ramped up issuance in January to take advantage of narrower bond spreads and still low all-in borrowing costs for long-term debt. With Treasury yields backing up in January (10-year yields now near 2%), we believe more banks may be encouraged to tap the capital markets early in the year to address 2013 maturities. In aggregate, the top five U.S. banks face $152 billion in maturing long-term debt this year (down from $282 billion in 2012)," Fitch says. "We expect large U.S. banks to continue working down long-term debt balances in 2013, though likely not at the pace seen in previous years. In part this reflects the lower volume of scheduled maturities this year after the last Temporary Liquidity Guarantee Program (TLGP) maturities were addressed in 2012. In addition, we believe major bank management teams regard their liquidity positions as generally solid, with good coverage of upcoming funding needs from cash and liquid assets on the balance sheet. As of year-end 2012, we estimate that the five largest U.S. banks' aggregate ratio of liquidity reserves to short-term debt and 2013 maturities stood at an ample 466%. "Another factor supporting issuance volumes is the desire by banks to maintain large amounts of "bail-in" debt at the holding company level in anticipation of the eventual implementation of Title 2 of the Dodd-Frank Act, which will set guidelines for the Orderly Liquidation Authority (OLA) in the event of a bank failure. The question of how much bail-in debt should be held is still being discussed by global regulators, and potential metrics have not been determined. The aggregate ratio of total long-term debt to total assets for the top five banks stood at about 13% as of Dec. 31. The bulk of this debt is issued at the holding company level. "We estimate that year-to-date long-term debt issuance by the five largest banks already accounts for approximately 16% of 2013 debt maturities. The largest amount of January issuance has been completed by JPM and Goldman Sachs, both of which have priced $8 billion of long-term debt so far this month. Among the top five institutions, Bank of America faces the highest long-term debt maturities, with $49 billion in current maturities (down from $97 billion in 2012). However, with $6 billion issued so far in 2013 and more than $370 billion in cash and highly liquid securities on the balance sheet, Bank of America is well positioned from a liquidity and funding perspective. "As large bank bond spreads have tightened relative to comparably rated corporates, all-in borrowing costs have dropped to levels not seen since the financial crisis. New five-year issues this month are generally pricing near 2.0%, lowering debt service costs by replacing comparable maturing five-year obligations with coupons averaging 5.25%, according to our estimates. "Over the longer term, assuming some material increases in interest rates, refinancing requirements for low-cost debt now being issued could be a negative factor if borrowing rate differentials flip meaningfully. However, large banks appear to recognize this risk and have taken a cautious approach to the laddering of future maturities. In addition, annual debt maturities will likely remain at far lower levels than in prior years as banks have generally worked down their balances of long- term debt considerably since the crisis and have greatly reduced reliance on short-term unsecured debt." * Bailment Defeats Preference Claim by Trustee ---------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a bailment saved a livestock broker from an $863,000 judgment for what otherwise looked like a common garden variety preference. According to the report, the case involved two livestock dealers. The creditor delivered cattle to the company that was to become bankrupt. The debtor sold the cattle and was to pay over the proceeds to the creditor. Within 90 days of bankruptcy, the payments amounted to $863,000. The bankruptcy judge found no preference, and the trustee appealed unsuccessfully to U.S. Magistrate Judge Frederick J. Kapala in Chicago. The creditor was saved because the principal for the bankrupt testified that his company had no ownership rights in the cattle. Judge Kapala said that the arrangement therefore created a bailment. According to the report, the trustee argued that placing the funds in the bankrupt's general account defeated the bailment and made the proceeds property of the estate, thus eligible for serving as basis for a preference claim. Judge Kapala again disagreed. The judge cited cases for the proposition "commingling funds is insufficient to defeat the existence of a bailment." Because the bankrupt had no equitable interest in the proceeds, there was no basis for a preference, Judge Kapala ruled. The case is Mississippi Valley Livestock, Inc. v. J & R Farms, 12-50341, U.S. District Court, Northern District of Illinois (Chicago). * BOND PRICING -- For The Week From Jan. 28 to Feb. 1, 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 1.750 AES EASTERN ENER 9.670 1/2/2029 4.125 AGY HOLDING COR 11.000 11/15/2014 51.046 AHERN RENTALS 9.250 8/15/2013 58.835 ALION SCIENCE 10.250 2/1/2015 49.875 AMBAC INC 6.150 2/7/2087 13.750 ATP OIL & GAS 11.875 5/1/2015 4.750 ATP OIL & GAS 11.875 5/1/2015 5.025 ATP OIL & GAS 11.875 5/1/2015 4.750 BUFFALO THUNDER 9.375 12/15/2014 33.500 BZH-CALL02/13 6.875 7/15/2015 101.000 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 12.900 EASTMAN KODAK CO 7.250 11/15/2013 13.750 EASTMAN KODAK CO 9.200 6/1/2021 15.000 EASTMAN KODAK CO 9.950 7/1/2018 13.000 EDISON MISSION 7.500 6/15/2013 48.035 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 1.000 FIBERTOWER CORP 9.000 11/15/2012 3.000 FIBERTOWER CORP 9.000 1/1/2016 28.000 GEOKINETICS HLDG 9.750 12/15/2014 55.250 GEOKINETICS HLDG 9.750 12/15/2014 55.125 GLB AVTN HLDG IN 14.000 8/15/2013 18.900 GLOBALSTAR INC 5.750 4/1/2028 61.938 GMX RESOURCES 4.500 5/1/2015 51.650 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 41.125 JEHOVAH-JIREH 7.800 9/10/2015 10.000 LAS VEGAS MONO 5.500 7/15/2019 21.000 LBI MEDIA INC 8.500 8/1/2017 27.375 LEHMAN BROS HLDG 0.250 12/12/2013 21.375 LEHMAN BROS HLDG 0.250 1/26/2014 21.375 LEHMAN BROS HLDG 1.000 10/17/2013 21.375 LEHMAN BROS HLDG 1.000 3/29/2014 21.375 LEHMAN BROS HLDG 1.000 8/17/2014 21.375 LEHMAN BROS HLDG 1.000 8/17/2014 21.375 LEHMAN BROS HLDG 1.250 2/6/2014 21.375 MERRILL LYNCH 5.450 2/5/2013 99.900 MF GLOBAL LTD 9.000 6/20/2038 73.000 MOHEGAN GAMING 6.125 2/15/2013 100.100 ONCURE HOLDINGS 11.750 5/15/2017 47.500 OVERSEAS SHIPHLD 8.750 12/1/2013 36.770 PENSON WORLDWIDE 12.500 5/15/2017 41.500 PLATINUM ENERGY 14.250 3/1/2015 51.500 PLATINUM ENERGY 14.250 3/1/2015 66.200 PMI CAPITAL I 8.309 2/1/2027 0.125 PMI GROUP INC 6.000 9/15/2016 32.000 POWERWAVE TECH 1.875 11/15/2024 4.875 POWERWAVE TECH 1.875 11/15/2024 4.875 POWERWAVE TECH 3.875 10/1/2027 4.875 POWERWAVE TECH 3.875 10/1/2027 5.000 RADISYS CORP 2.750 2/15/2013 100.000 RESIDENTIAL CAP 6.875 6/30/2015 29.500 SCHOOL SPECIALTY 3.750 11/30/2026 37.500 TERRESTAR NETWOR 6.500 6/15/2014 10.000 TEXAS COMP/TCEH 10.250 11/1/2015 27.875 TEXAS COMP/TCEH 10.250 11/1/2015 28.000 TEXAS COMP/TCEH 10.250 11/1/2015 29.500 TEXAS COMP/TCEH 15.000 4/1/2021 38.600 TEXAS COMP/TCEH 15.000 4/1/2021 38.542 THQ INC 5.000 8/15/2014 35.000 TL ACQUISITIONS 10.500 1/15/2015 35.000 TL ACQUISITIONS 10.500 1/15/2015 30.375 TOUSA INC 7.500 1/15/2015 0.001 TOUSA INC 10.375 7/1/2012 0.001 TRICO MARINE SER 8.125 2/1/2013 1.000 TRICO MARINE SER 8.125 2/1/2013 1.000 UAL 1991 TRUST 10.020 3/22/2014 11.250 USEC INC 3.000 10/1/2014 38.900 VERSO PAPER 11.375 8/1/2016 40.250 WCI COMMUNITIES 4.000 8/5/2023 0.375 WCI COMMUNITIES 4.000 8/5/2023 0.375 WESTERN EXPRESS 12.500 4/15/2015 63.000 WESTERN EXPRESS 12.500 4/15/2015 63.000 ********* 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 ***