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/raid1/www/Hosts/bankrupt/TCR_Public/101117.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, November 17, 2010, Vol. 14, No. 319 Headlines A. CORDERO BADILLO: Case Summary & 20 Largest Unsecured Creditors ACCESS PHARMACEUTICALS: Posts $12.7-Mil. Net Loss in 3rd Quarter ADMIRAL WINE: Case Summary & 20 Largest Unsecured Creditors ALL AMERICAN: Posts $8.45 Million Net Loss in Third Quarter ALLEN CAPITAL: Barrier Named Financial Advisor to Unsec. Creditors ALLIED DEFENSE: Posts $39MM Profit in Q3 Following Sale AMBAC FIN'L: Wisconsin Court Commences Hearing on ACC Rehab Plan AMBAC FIN'L: Releases Form 10-Q for the Third Quarter AMBAC FIN'L: Organizational Meeting to Form Panel on Nov. 17 AMBAC FIN'L: Stock Delisted by NYSE, Now Trading on OTC Market AMBAC FIN'L: AAC Plan of Operation Amended November 7 AMERICAN APPAREL: Regains Compliance With NYSE Amex AMERICAN SAFETY: Energizer Obtains U.S. Antitrust Clearance ARMSTRONG WORLD: Moody's Downgrades Corp. Family Rating to 'B1' ATLANTIC SOUTHERN: Posts $3.7MM Q3 Loss; Bank Needs Add'l Capital AVANTAIR INC: Posts $4.81-Mil. Third Quarter Net Loss AXESSTEL INC: Notes of Poor Operating Results; Has $1.1MM Q3 Loss BALL CORP: Fitch Assigns 'BB' Rating to $400 Mil. Notes BALL CORP: Moody's Assigns 'Ba1' Rating to $400 Million Notes BALL CORP: S&P Assigns 'BB+' Rating to $500 Mil. Senior Notes BALTIMORE INNER: Taps Ciardi Ciardi as Bankruptcy Counsel BALTIMORE INNER: Court Extends Schedules Deadline to Dec. 3 BALTIMORE INNER: Asks Court to Dismiss Chapter 11 Bankruptcy Case BIOJECT MEDICAL: Posts $357,000 Net Loss in Third Quarter BIO-KEY INT'L: Sept. 30 Balance Sheet Upside-Down by $1.01-Mil. BLACKHAWK TILE: Case Summary & 20 Largest Unsecured Creditors BONNIE THORNHILL: Voluntary Chapter 11 Case Summary BRIGHTSTAR CORP: Moody's Assigns 'Ba3' Corporate Family Rating BUCYRUS INTERNATIONAL: Moody's Reviews 'Ba2' Corp. Family Rating BUCYRUS INTERNATIONAL: S&P Puts 'BB+' Rating on Positive Watch CENTRAL FALLS, R.I.: Receivership Law Shows Teeth CHANTICLEER HOLDINGS: Posts $149,400 Net Loss in Q3 2010 CHEM RX: Administrative Claims Must Be Filed By Dec. 13 CHRISTIAN LOVE: Case Summary & 20 Largest Unsecured Creditors CLEARWIRE COMMUNICATIONS: Disagreements Cue Moody's Rating Reviews CNESSEN DAIRY: Case Summary & 20 Largest Unsecured Creditors CNOSSEN DAIRY: Case Summary & 20 Largest Unsecured Creditors COACH AMERICA: S&P Puts 'B-' Rating on CreditWatch Negative COMCAM INTERNATIONAL: Posts $17,100 Net Loss in Q3 2010 COMMERCIAL VEHICLE: Board Member Leaves Due to Time Constraints COMMUNITY CENTRAL: Posts $4.8MM Q3 Loss; Bank Signs Consent Order COMSTOCK MINING: Incurs $8.7 Million Net Loss in Q3 2010 CPG INTERNATIONAL: S&P Affirms 'B-' Corporate Credit Rating CREDIT ONE: Posts $24,600 Net Loss in September 30 Quarter CREDIT-BASED ASSET: JPM OKs Use of $8.2MM Cash; Court Nod Sought CREDIT-BASED ASSET: Proposes FIG-Led Auction for CM Business CREDIT-BASED ASSET: Taps Donlin Recano as Noticing, Claims Agent CREDIT-BASED ASSET: WTC, an Indenture Trustee, Has No Exposure CRYSTAL CATHEDRAL: US Trustee Balks at $156K Annual Pay for CFO CYNERGY DATA: Plan Confirmation Hearing Scheduled for Dec. 21 DYNEGY INC: Blackstone Raises Buyout Offer to $5 a Share DYNEGY INC: Rejects Icahn's Funding Offer, Questions Motive EL PASO: Fitch Affirms 'BB+' Issuer Default Ratings EMISPHERE TECHNOLOGY: Posts $9.6-Mil. Net Profit in 3rd Quarter EMPIRE RESORTS: Posts $938,000 Net Loss in September 30 Quarter ENDO PHARMACEUTICALS: Moody's Puts 'Ba2' Corporate Family Rating ENERGY XXI: Moody's Upgrades Corporate Family Rating to 'B3' ENERTECK CORPORATION: Posts $475,800 Net Loss in Q3 2010 EPICEPT CORP: Nets $1.9 Million from Sale of Securities FILMYARD HOLDINGS: S&P Assigns 'B+' Corporate Credit Rating FIRST INDUSTRIAL: Fitch Affirms 'B+' Issuer Default Rating FLAKEBOARD CO: S&P Assigns 'B' Corporate Credit Rating FORD MOTOR: Said to Pare Mazda Stake to 3% GENTA INC: Swings to $7.7-Mil. Net Income in Q3 2010 GLAZIER GROUP: Files For Bankruptcy Protection GLOBAL CONTAINER: Reorganization Cases of Two Affiliates Dismissed GLOBAL CONTAINER: Plan of Reorganization Gets Court Approval GOLDSTEIN FAMILY: Case Summary & 9 Largest Unsecured Creditors GREYSTONE PHARMACEUTICALS: U.S. Withdraws Motion to Dismiss Case GYMBOREE CORP: Moody's Puts Caa1 Rating on $400 Million Notes GYMBOREE CORP: S&P Downgrades Senior Secured Debt Rating to 'B+' HEALTHY FAST: Posts $57,705 Net Loss in September 30 Quarter HELLAS TELECOMMUNICATIONS: Files Ch. 15 Petition in Delaware HELLAS TELECOMMUNICATIONS: Chapter 15 Case Summary HERCULES OFFSHORE: Moody's Junks Corporate Family Rating HUNTER FAN: S&P Gives Stable Outlook; Affirms 'B-' Rating IMPERIAL INDUSTRIES: Posts $1.45-Mil. Net Loss in 3rd Quarter INDEPENDENCE TAX: Posts $408,865 Net Income in Third Quarter INTERNATIONAL GARDEN: Gets Approval of $7.5-Mil. in DIP Loans INTERNATIONAL INC: S&P Assigns 'BB-' Corporate Credit Rating ISE LIMITED: Follows ISE Corporation in Filing for Chapter 11 JAYEL CORP: Won't Give Up Info., Now Wants Case Dismissed KANSAS CITY SOUTHERN: Moody's Raises Corp. Family Rating to 'Ba3' KRATON POLYMERS: S&P Puts 'B+' Rating on CreditWatch Positive LA JOLLA PHARMACEUTICAL: Posts $469,000 Net Loss in Q3 2010 LEHMAN BROTHERS: Asks for Nod to Enter Into Transactions LEHMAN BROTHERS: Proposes Settlement with FNI, et al. LEHMAN BROTHERS: Proposes to Assign Swap Agreements to SwapCo LEHMAN BROTHERS: LBSF Wants to Sell Stake in Libro Companhia LEHMAN BROTHERS: Amends Archstone Loan Restructuring Terms LEHMAN BROTHERS: SIPA Trustee Sends Probe Report for May-Oct. LIFECARE HOLDINGS: Posts $1.7 Million Net Loss in Q3 2010 LITHIUM TECHNOLOGY: Nets $2 Million from Sale of Stock LOCATEPLUS HOLDINGS: Earns $25,480 in September 30 Quarter LOVELL KING: Case Summary & 13 Largest Unsecured Creditors MARIAH RE: S&P Assigns 'B' Rating to Note Issuances MARSHALL & ILSLEY: Moody's Reviews Ratings on Various Debt MARSICO HOLDINGS: S&P Assigns 'CCC+' Counterparty Credit Rating MEDIACOM COMMS: Ratings Could Come Under Pressure, Moody's Says MEDIACOM COMMS: S&P Puts 'B+' Rating on Negative Watch MEDICAL CONNECTIONS: Posts $1.2 Million Net Loss in Q3 2010 METALDYNE CORP: Atlas Acted as Advisor in New Castle Facility Sale METRO-GOLDWYN-MAYER: Proposes to Pay $2.9MM in Shipping Charges METRO-GOLDWYN-MAYER: Taps Ordinary Course Professionals METRO-GOLDWYN-MAYER: Applies for Klee as Bankruptcy Co-Counsel METRO-GOLDWYN-MAYER: Gets Nod for Donlin Recano as Claims Agent METRO-GOLDWYN-MAYER: Bush Gottlieb Represents Union Entities METROPOLITAN 885: Files for Chapter 11 with Plan Support Deal METROPOLITAN 885: Case Summary & 19 Largest Unsecured Creditors MXENERGY HOLDINGS: Posts $23.4MM Net Loss for September 30 Quarter NEWMARKET CORP: S&P Affirms 'BB+' Corporate Credit Rating NEPHROS INC: Posts $375,000 Net Loss in September 30 Quarter NNN 2003: Posts $275,000 Net Loss in September 30 Quarter NORD RESOURCES: Posts $10-Mil. Net Loss in Sept. 30 Quarter NUVEEN INVESTMENTS: Posts $102.5MM Adjusted EBITDA in Q3 ORAGENICS INC: Posts $1.9-Mil. Net Loss in Sept. 30 Quarter ORANGE COUNTY: Court to Set Plan Deadlines on Dec. 17 PAETEC HOLDING: S&P Assigns 'CCC+' Rating to $420 Mil. Notes PERFORMANCE FOOD: Moody's Assigns 'B2' Corporate Family Rating PERFORMANCE FOOD: S&P Assigns 'B' Corporate Credit Rating PET CROSSING: Case Summary & 11 Largest Unsecured Creditors PETCO ANIMAL: Moody's Assigns 'Caa1' Rating to $500 Mil. Notes PFF BANCORP: Unsecured Creditors Files Settlement Motion PRECISION PARTS: Committee Given Approval to Sue Creditors PROBE RESOURCES: Debt Deal Expires; Units Now in Ch. 11 QOC I LLC: Hearing on Case Dismissal Moved to Dec. 7 REAL MEX: Lowers Third Quarter Net Loss to $6.3 Million REFLECT SCIENTIFIC: Posts $122,000 Net Loss in Q3 2010 REGAL ENTERTAINMENT: Posts $42-Mil. Net Income in Third Quarter RENASCENT INC: Files Schedules of Assets and Liabilities ROBERT NAZARIAN: Voluntary Chapter 11 Case Summary RIVANNA PLAZA: To Move Forward with Project ROCK & REPUBLIC: Close to Sale Deal, Seeks Exclusivity Extension RONALD RUNYEON: Section 341(a) Meeting Scheduled for Dec. 10 RONALD RUNYEON: Wants Filing of Schedules Extended Until Dec. 2 RONALD RUNYEON: Asks for Access to Cash Collateral Until January ROTHSTEIN ROSENFELDT: Trustee & AmEx Settle $20.7MM Lawsuit RP SAM: Can Access California Credit's Cash Collateral SANSWIRE CORP: CEO and Partners Buy Shares of Common Stock SEP RIVERPARK: Case Summary & 11 Largest Unsecured Creditors SEVERN BANCORP: Swings to $485,000 Net Income in 3rd Quarter SHUBH HOTELS DETROIT: Secured Creditor Fights Bankruptcy Loan SIX FLAGS: Moody's Upgrades Corporate Family Rating to 'B1' SPECIALTY PRODUCTS: Ordered to Narrow Asbestos Discovery SPIRIT AEROSYSTEMS: Moody's Puts 'Ba3' Rating on $300 Mil. Notes SPIRIT AEROSYSTEMS: S&P Assigns 'BB-' Rating to $300 Mil. Notes SPRINT NEXTEL: Weak Performance Cues Moody's Rating Reviews STATES INDUSTRIES: Renwood Opportunities Acquires Assets STEPHEN SELVAGGIO: U.S. Trustee Wants Case Converted to Chapter 7 STEPHEN SELVAGGIO: Files List of 20 Largest Unsecured Creditors STEPHEN SELVAGGIO: Files Schedules of Assets & Liabilities SUNGARD DATA: Moody's Corrects Speculative Grade Liquidity Rating SUSAN KRYGIELL: Case Summary & 14 Largest Unsecured Creditors TALON INT'L: Posts $1.2 Million Net Loss in September 30 Quarter TC GLOBAL: Posts $1.6 Million Net Loss in Sept. 26 Quarter TEN SIDE: Asks for Court's Permission to Use Cash Collateral TERRESTAR NETWORKS: Marathon Submits $75-Mil. Financing Offer TERRESTAR NETWORKS: Withdraws Plea to Assume EchoStar Plan Deal TERRESTAR NETWORKS: Resolves 7 Cases' Dismissal Motion TERRESTAR NETWORKS: Files Schedules of Assets and Liabilities TERRESTAR NETWORKS: Files Statement of Financial Affairs TETRAGENEX PHARMACEUTICALS: Confirmation Hearing on Jan. 5 TETRAGENEX PHARMACEUTICALS: Proofs of Claim Due by Dec. 13 TIMOTHY WRIGHT: Has Access to Lenders' Cash Until February 1 TOBACCO ROSE: Case Summary & 20 Largest Unsecured Creditors TRIBUNE CO: Wins Nod of 2010 Management Incentive Plan TRIBUNE CO: Proposes Davis Wright as Special Counsel TRIBUNE CO: McDermott Will Charges $716,000 in Fees for June-Aug. TWIN CITY: Case Summary & 4 Largest Unsecured Creditors VM ASC: Case Summary & 2 Largest Unsecured Creditors W&T OFFSHORE: Moody's Gives Stable Outlook; Affirms 'B3' Rating WASHINGTON MUTUAL: Files Notice on Implementation of Class Ballots WAVERLY GARDENS: Hearing to Dismiss Case Continued Until Nov. 23 WEST FELICIANA: Bankruptcy Case Converted to Chapter 7 Liquidation WOLVERINE TUBE: To Sell Component Biz. to Mueller Industries XM SATELLITE: Reports $30,466 Net Income for September 30 Quarter * Upcoming Meetings, Conferences and Seminars ********* A. CORDERO BADILLO: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: A. Cordero Badillo, Inc. aka Supermercados Grande Ave Ponce de Leon 56 Barrio Sabana Catano, PR 00962 Bankruptcy Case No.: 10-10705 Chapter 11 Petition Date: November 12, 2010 Court: U.S. Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Charles Alfred Cuprill, Esq. CHARLES A CURPILL, PSC LAW OFFICE 356 Calle Fortaleza, Second Floor San Juan, PR 00901 Tel: (787) 977-0515 E-mail: cacuprill@aol.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Yarimir Rodrigez, acting comptroller. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ A.E.E Power Services $3,457,240 Oficina Gerente P.O. Box 398 Bayamon PR 00960-0398 Pepsi Cola PR Distributing, LLC Inventory Purchases $2,618,054 PO BOX 2600 and Supply Toa Baja PR 00951-2600 Empacadora Hill Brothers Vegetables & $759,453 P.O. Box 31303 Fruits Inventory 65th Inf. Station San Juan PR 00929 Drogueria Betances, Inc. Medical Supplies $637,181 P.O. Box 368 and Inventory Caguas PR 00726-0368 Triple-S Salud Healthcare Insurance $579,283 P.O. Box 71548 Premiums San Juan PR 00936-8648 De La Cruz & Associates Advertising Services $472,400 P.O. Box 11885 San Juan PR 00922-1885 V. Suarez & Co. Inc. Inventory Purchases $361,675 P.O. Box 364588 (Grocery) San Juan PR 00936-4588 Suiza Dairy Dairy Inventory $357,829 P.O. Box 363207 Purchases San Juan PR 00936-3207 MMR Supermarkets, Inc. Healthcare Insurance $344,291 C/O Econo Pastrana P.O. Box 1657 Trujillo Alto PR 00977 Crim Property Taxes $335,231 P.O. Box 195387 San Juan PR 00919-5387 Mi Pan Asociados Deli Inventory $302,342 Apartado 174 Purchases Sabana Seca PR 00952 Corp Credito/Desarrollo Rent Arrears $267,081 Comercial Y Agricola PR Apartado 195009 San Juan PR 00919-5009 Kellogg's Snacks PR Inventory Purchases $261,733 P.O. Box 50004 (Grocery) San Juan PR 00902-0004 USA Waste Services, Inc. Waste Disposal $261,695 P.O. Box 71561 Services San Juan PR 00936-8661 White Rose, Inc. Inventory Purchases $247,688 (Grocery) Kraft Foods Puerto Rico, LLC Dairy Inventory $195,687 Purchases Bananera Montebello, Inc. Vegetables & $160,652 Fruits Inventory Bridge Security Services, Inc. Security Services $150,941 Fideicomiso Hispamer Rent Arrears $146,995 Marvel Specialties, Inc. Meat Inventories $144,536 Purchases ACCESS PHARMACEUTICALS: Posts $12.7-Mil. Net Loss in 3rd Quarter ---------------------------------------------------------------- Access Pharmaceuticals Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $12.72 million on $127,000 of total revenues for the three months ended Sept. 30, 2010, compared with a net loss of $4.07 million on $144,000 of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2010, showed $2.27 million in total assets, $32.73 million in total liabilities, and a stockholders' deficit of $30.45 million. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6eb1 About Access Pharmaceuticals Access Pharmaceuticals, Inc., is an emerging biopharmaceutical company focused on developing pharmaceutical products primarily based upon its nanopolymer chemistry technologies and other drug delivery technologies. The Company currently has one approved product, one product candidate at Phase 3 of clinical development, three product candidates in Phase 2 of clinical development and other product candidates in pre-clinical development. Following the Company's 2009 results, Whitely Penn LP of Dallas, Texas, expressed substantial doubt against Access Pharmaceuticals' ability as a going concern. The firm reported that the Company has had recurring losses from operations, negative cash flows from operating activities and has an accumulated deficit. ADMIRAL WINE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Admiral Wine and Liquor Co. 79 Sand Park Road Cedar Grove, NJ 07009-1210 Bankruptcy Case No.: 10-45213 Chapter 11 Petition Date: November 12, 2010 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Rosemary Gambardella Debtor's Counsel: Bruce D. Buechler, Esq. Kenneth Rosen, Esq. LOWENSTEIN SANDLER PC 65 Livingston Avenue Roseland, NJ 07068 Tel: (973) 597-2308 (973) 597-2500 E-mail: bbuechler@lowenstein.com krosen@lowenstein.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/njb10-45213.pdf The petition was signed by Michael Zeiger, president. ALL AMERICAN: Posts $8.45 Million Net Loss in Third Quarter ----------------------------------------------------------- All American Group Inc. reported a net loss of $8.45 million for the three months ended Sept. 30, 2010, compared with a net loss of $3.89 million for the same period a yea ago. Net sales for three months ended Sept. 30, 2010, totaled $16.7 million, compared with $16.07 million in the same period in 2009. The Company's balance sheet at Sept. 30, 2010, showed $74.38 million in total assets, $40.95 million in total liabilities, and stockholder's equity of $33.43 million "The Company's sales have increased year to date from 2009 by over 28%, and the Specialty Vehicle segment has generated an operating profit of $0.7 million during that same period", stated Rick Lavers, President and CEO. "While in the third quarter all of the increased revenues came on the Specialty Vehicle side of our business, we expect that to change in the fourth quarter as several major housing projects come on line. Further, the new ARBOC Spirit bus aimed at the commercial fleet business enjoyed a warm reception at this year's BusCon show, although we don't expect any impact from that product line until 2011." Net sales from continuing operations for the nine-month period ended September 30, 2010 were $57.8 million compared to $45.1 million reported for the same period in 2009, an increase of over 28%. As a result, the Company's operating loss for the nine months ended September 30, 2010 was reduced by nearly 30% or $4.0 million to a loss of $9.8 million compared to a loss of $13.8 million for the comparable nine-month period in 2009. The Company said November 8 it has agreed to be acquired by affiliates of All American Group Holdings, LLC, which is an affiliate of H.I.G. All American, LLC, in a merger that would result in the Company's shareholders receiving $0.20 per share, plus an interest in a liquidating trust that will have a contingent right to receive proceeds from the sale of AAG's specialty vehicle business. A full-text copy of the earnings release is available for free at http://ResearchArchives.com/t/s?6e9d A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6e9e About All American Group Elkhart, Indiana-based All American Group, Inc., formerly Coachmen Industries, Inc., (OTC:COHM.PK) says it is one of America's premier systems-built construction companies under the ALL AMERICAN BUILDING SYSTEMS(R), ALL AMERICAN HOMES(R), and MOD-U- KRAF(R) brands, as well as a manufacturer of specialty vehicles. * * * McGladrey & Pullen LLP, in Elkhart, Indiana, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2009 results. The auditors noted that Coachmen has suffered recurring losses from operations and continues to operate in an industry where economic recovery has been very slow. ALLEN CAPITAL: Barrier Named Financial Advisor to Unsec. Creditors ------------------------------------------------------------------ Barrier Advisors Inc. has been named financial advisor to the Official Committee of Unsecured Creditors of DLH Master Land Holding, LLC and its affiliated company, Allen Capital Partners, LLC. On Jan. 25, 2010, DLH Master Land Holding, LLC and Allen Capital Partners, LLC each filed voluntary Chapter 11 petitions in the United States Bankruptcy Court, for the Northern District of Texas, Dallas Division. DLH's primary business is the development of the real estate project known as the Dallas Logistics Hub. When completed, the Dallas Logistics Hub will be the largest logistics park in North America, with 6,000 acres master-planned for 60 million square feet of distribution, manufacturing, office and retail developments. In advising the Unsecured Creditors' Committee Barrier Advisors is investigating and valuing the assets of DLH, including the Dallas Logistics Hub, consulting with the debtors on financing and other matters and participating in the formulation of a plan of reorganization, as well as providing expert testimony as needed. The Committee has authorized Barrier Advisors to investigate options and alternatives for financing sources. Interested parties are encouraged to contact Barrier Advisors to learn more about the Dallas Logistics Hub and explore alternative structures to the debtors' proposed plans that would allow the debtors to reorganize. "We are delighted to be working on a case of this importance to the secured and unsecured creditors of DLH and to the cities of Dallas, Hutchins, Lancaster and Wilmer, Texas," said Jeff Jones, managing director of Barrier Advisors, Inc. "Barrier's track record for helping debtors and creditors put together strategically sound reorganization plans will be critical to the successful structuring of a viable plan of reorganization of Dallas Logistics Hub". About Allen Capital Allen Capital Partners LLC and subsidiary DLH Master Land Holding LLC, are the developers of Dallas Logistics Hub, a 6,000-acre multimodal logistics park 12 miles (19 kilometers) from downtown Dallas. Allen Capital Partners, LLC, dba The Allen Group, filed for Chapter 11 bankruptcy protection on January 25, 2010 (Bankr. N.D. Tex. Case No. 10-30562). Mark MacDonald, Esq., at MacDonald + MacDonald, P.C., assists the Company in its restructuring effort. Lain, Faulkner & Co. is the Debtor's financial advisor. The Company listed $100,000,001 to $500,000,000 in assets and $100,000,001 to $500,000,000 in liabilities in its petition. The Debtor's affiliate -- DLH Master Land Holding, LLC, dba The Allen Group -- filed a separate Chapter 11 bankruptcy petition. Another affiliate, Visalia, California-based Richard S. Allen, Inc., filed for Chapter 11 bankruptcy protection on May 3, 2010 (Bankr. N.D. Texas Case No. 10-33211). Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, assists the Company in its restructuring effort. The Company estimated its assets and debts at $50,000,001 to $100,000,000. ALLIED DEFENSE: Posts $39MM Profit in Q3 Following Sale ------------------------------------------------------- The Allied Defense Group Inc. filed its quarterly report on Form 10-Q, reporting net income of $39.40 million on zero revenue for the three months ended Sept. 30, 2010, compared with a net loss of $3.26 million on zero revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2010, showed $50.99 million in total assets, $5.33 million in total liabilities, and stockholder's equity of $45.65 million. On September 1, 2010, the Company announced that it completed the sale of substantially all of its assets to Chemring Group PLC. Chemring paid approximately $59.6 million in cash and assumed certain specified liabilities in exchange for all of the capital stock of Mecar sprl (formerly Mecar S.A.) and substantially all of the assets of Mecar USA. ADG has no significant operating assets as a result of the asset sale. Following the sale, the Board of Directors of the Company unanimously approved the dissolution of the Company pursuant to a Plan of Complete Liquidation and Dissolution. The Company's stockholders approved the Plan on September 30. In response to concerns of certain of the Company's stockholders, the Company has agreed to delay the filing of a certificate of dissolution with the Delaware Secretary of State so that the stockholders may continue to transfer the Company's common stock while the Company resolves the matters relating to the U.S. Department of Justice subpoena. The Company will now delay the filing of a certificate of dissolution with the Delaware Secretary of State until the earlier of August 31, 2011 or a resolution of all matters concerning the DOJ. The Company received a subpoena from the DOJ on January 19, 2010 requesting that the Company produce documents relating to its dealings with foreign governments. The Company said it is unlikely that any distributions to stockholders will be made until the matters relating to the DOJ subpoena have been resolved. The period of time required to resolve these matters is expected to take in excess of one year. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6ea3 About The Allied Defense Group Vienna, Va.-based The Allied Defense Group, Inc. (OTCQB: ADGI) -- http://www.allieddefensegroup.com/-- is a multinational defense business focused on the manufacture and sale of ammunition and ammunition related products for use by the U.S. and foreign governments. Allied's business is conducted by its two wholly owned subsidiaries: Mecar S.A. ("Mecar") and Mecar USA, Inc. ("Mecar USA"). Mecar is located in Nivelles, Belgium and Mecar USA is located in Marshall, Texas. Corporate is located in Vienna, Virginia. * * * As reported in the Troubled Company Reporter on April 16, 2010, BDO Seidman LLP, in Bethesda, Md., expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted that the Company has suffered recurring losses from operations. Also, the Company has been unable to obtain long-term and short-term financing necessary to support its operations. AMBAC FIN'L: Wisconsin Court Commences Hearing on ACC Rehab Plan ---------------------------------------------------------------- A federal court overseeing the rehabilitation case of Ambac Assurance Corporation commenced a hearing on November 15, 2010, to consider approval of a rehabilitation plan for the Company proposed by Sean Dilweg from the Office of the Commissioner of Insurance of the state of Wisconsin. AAC is the operations' arm of Ambac Financial Group, Inc. Mr. Dilweg is the appointed rehabilitator of the AAC Segregated Account. The AAC rehabilitation proceeding is currently before the Dane County Circuit Court in Wisconsin. Judge William D. Johnston of the Dane County Circuit Court will rule on the OCI Plan for AAC that contemplates paying claimants 25% of their money now and the balance in nine years with an annual interest of 5.1%, Andrew M. Harris of Bloomberg News reports. The OCI explained in an online presentation of the Plan that a 25/75 cash-surplus note split arose from the need to retain sufficient cash to pay all permitted policy claims during the rehabilitation process, Bloomberg relates. Payment of claims on the segregated policies was halted pending approval of the Plan, the report notes. Several parties have objected to the Plan, including the Federal Home Loan Mortgage Corp. or Freddie Mac, and the Federal National Mortgage Association or Fannie Mae; Bank of America Corp; and a group of hedge funds including Aurelius Capital Management LP, King Street Capital LP and Stonehill Capital Management LLC, according to Bloomberg. A group called RMBS Policyholders even alleged that the OCI actively participated in an arrangement that will divert billions of tax attributes from the insurance company that is charged with regulating. Judge Johnston began hearing five days of testimony on November 15, Bloomberg relates. The OCI was the first to testify before the Wisconsin Court, according to the news source. David Greenwald, Esq., counsel to the hedge funds, asked the OCI on what are the chances that his clients will be paid in 2020, Bloomberg notes. The OCI responded that the health of the general account is the key to repayment of the nine-year notes, Bloomberg relates. Payments will be funded by the general account. The OCI pointed out that a prolonged or double-dip recession could scuttle the Plan, while an economic up-tick could accelerate it, according to Bloomberg. The OCI noted that the Plan is dependent on the well-being of AAC's non-segregated business, the report states. The OCI further said that while the 13,000-policy general account has assets and liabilities, the 700-policy segregated account has only liabilities, Bloomberg adds. Bloomberg relates that Judge Johnson also rejected the hedge funds' objection to his going forward of the hearing pending their challenge on an earlier ruling in a Wisconsin appeals court. According to Bloomberg, Ambac and the OCI asked the mortgage-backed securities insureds to provide them and the Wisconsin Court with more detailed information about whom they represent. The AAC Plan is complicated by the Internal Revenue Service's intent to seize AAC's tax refunds totaling $700 million, Mr. Harris observes. Ambac has sued IRS in the U.S. Bankruptcy Court for the Southern District of New York to enjoin the agency from recouping the tax refunds. The OCI told the Wisconsin Court that some of the $700 million is needed to pay policyholders and other claimants. In other matters, Michael Van Sicklen, Esq., the OCI's counsel, informed Judge Johnston of a settlement in principle with holders of Ambac-insured revenue bonds issued by Las Vegas Monorail Co., a bankrupt entity, Bloomberg relates. Mr. Sicklen referred to those obligations as the single largest exposure in the segregated account. The monorail bondholders assert more than $500 million in present-value claims against Ambac, which would increase to $1.1 billion over time, Bloomberg adds. The OCI told Bloomberg via a phone interview that it started monitoring AAC in 2008 during the global financial crisis and noted that by the end of 2009, the insurer's numbers were going down. Ambac was paying out as much as $150 million a month, without taking in equivalent capital, according to the OCI, the report notes. "That was unsustainable," the OCI was quoted by Bloomberg as saying. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Case No. 10-15973) on November 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "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. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed $30.05 billion in total assets, $31.47 billion in total liabilities, and a $1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of ($394.5 million) and total liabilities of $1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about $1.62 billion. The Vanguard Group, Inc., holds 5.46% of the stock of Ambac and is its largest shareholder. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AMBAC FIN'L: Releases Form 10-Q for the Third Quarter ----------------------------------------------------- Ambac Financial Group, Inc. filed with the U.S. Securities and Exchange Commission, a quarterly report on Form 10-Q for the quarter ended September 30, 2010. A full-text copy of the 3rd Quarter 2010 Results on Form 10-Q dated Nov. 15, 2010, is available for free at: http://ResearchArchives.com/t/s?6ead The Company and its affiliates earlier issued a press release on the 2010 third quarter results, listing $31.1 billion in assets and $32.5 billion in liabilities. Net income attributable to AFG for the third quarter was reported at $76,006,000. Ambac Financial Group Inc. and Subsidiaries Consolidated Statements of Cash Flow Nine Months Ended September 30, 2010 (Unaudited) Cash flows from operating activities: Net loss attributable to common shareholders ($671,604,000) Non-controlling interest in subsidiaries' earnings (13,000) ------------------ Net loss ($671,617,000) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,686,000 Amortization of bond premium and discount (103,445,000) Share-based compensation 4,250,000 Current income taxes 443,887,000 Deferred income taxes - Deferred acquisition costs 27,733,000 Unearned premiums, net (1,062,655,000) Loss and loss expense, net 370,910,000 Ceded premiums payable (109,118,000) Investments income due and accrued 35,716,000 Premium receivables 915,347,000 Accrued interest payable 43,850,000 Net mark-to-market (gains) losses (2,792,668,000) Net realized investment gains (153,351,000) Other-than-temporary impairment charges 48,499,000 Variable interest entity activities 504,873,000 Other, net 330,273,000 ------------------ Net cash used in operating activities (2,164,830,000) ------------------ Cash flows from investing activities: Proceeds from sales of bonds 2,349,427,000 Proceeds from matured bonds 584,365,000 Purchases of bonds (880,863,000) Change in short-term investments 344,259,000 Loans, net 59,412,000 Change in swap collateral receivable 24,248,000 Other, net 12,324,000 ------------------ Net cash provided by investing activities 2,493,172,000 ------------------ Cash flows from financing activities: Dividends paid - subsidiary shares to noncontrolling interest (817,000) Proceeds from issuance of investment and payment agreements 1,337,000 Payments from investment and payment draws (290,699,000) Proceeds from the issuance of subsidiary changes to noncontrolling interest - Retirement of subsidiary shares to noncontrolling interest - Capital issuance costs - Net cash collateral paid/received (80,569,000) ------------------ Net cash used in financing activities (370,748,000) ------------------ Net cash flow (42,406,000) ------------------ Cash and cash equivalents at January 1 112,079,000 ------------------ Cash and cash equivalents at September 30 $69,673,000 ================== About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Case No. 10-15973) on November 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "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. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed $30.05 billion in total assets, $31.47 billion in total liabilities, and a $1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of ($394.5 million) and total liabilities of $1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about $1.62 billion. The Vanguard Group, Inc., holds 5.46% of the stock of Ambac and is its largest shareholder. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AMBAC FIN'L: Organizational Meeting to Form Panel on Nov. 17 ------------------------------------------------------------ Tracy Hope Davis, United States Trustee for Region 2, will hold an organizational meeting on November 17, 2010, at 11:00 a.m. (ET) in the bankruptcy case of Ambac Financial Group, Inc. The meeting will be held at the United States Trustee Meeting Rooms, 80 Broad Street, 4th Floor, New York, NY 10004. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Case No. 10-15973) on November 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "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. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed $30.05 billion in total assets, $31.47 billion in total liabilities, and a $1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of ($394.5 million) and total liabilities of $1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about $1.62 billion. The Vanguard Group, Inc., holds 5.46% of the stock of Ambac and is its largest shareholder. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AMBAC FIN'L: Stock Delisted by NYSE, Now Trading on OTC Market -------------------------------------------------------------- NYSE Regulation, Inc. announced the immediate suspension of trading on the New York Stock Exchange of the common stock of Ambac Financial Group, Inc. and the suspension of trading on the NYSE of certain other securities of the Company, according to the company's regulatory filing with the U.S. Securities and Exchange Commission on November 10, 2010. NYSE Regulation determined on November 9, 2010, that Ambac is no longer suitable for listing in light of the company's bankruptcy filing, which is sufficient grounds for the commencement of delisting procedures according to Section 802.01D of the NYSE's Listed Company Manual. In its announcement regarding the suspension, NYSE Regulation noted the uncertainty as to the timing and outcome of the bankruptcy process as well as the ultimate effect of this process on the company's equityholders. In addition, NYSE Regulation stated that Ambac had been notified that it had fallen below the NYSE's continued listing standard for average closing price of less than $1.00 over a consecutive 30 trading day period. Ambac said that at this time, it does not intend to take any action to appeal the NYSE's decision and thus, it is expected that the Suspended NYSE Securities will be delisted after completion by the NYSE of application with the SEC. The Suspended NYSE Securities include: -- common Stock, $0.01 per share (NYSE ticker symbol: ABK); -- 5.875% Debentures due March 24, 2103 (NYSE ticker symbol: AKT); -- 5.95% Debentures due February 28, 2103 (NYSE ticker symbol: AKF); and -- 9.50% Equity Units due February 15, 2021 (NYSE ticker symbol: ABK PRZ). Ambac subsequently related that its common stock and the shares of its equity units began trading exclusively on the over-the- counter market as of November 9, 2010. On the OTC market, shares of Ambac's common stock, which previously traded on the NYSE under the symbol ABK, trade under the symbol ABKFQ. Shares of Ambac's equity units, which previously traded on the NYSE under the symbol ABK-PRZ, trade under the symbol ABKOQ. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Case No. 10-15973) on November 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "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. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed $30.05 billion in total assets, $31.47 billion in total liabilities, and a $1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of ($394.5 million) and total liabilities of $1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about $1.62 billion. The Vanguard Group, Inc., holds 5.46% of the stock of Ambac and is its largest shareholder. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AMBAC FIN'L: AAC Plan of Operation Amended November 7 ----------------------------------------------------- Ambac Assurance Corporation's Plan of Operation for its Segregated Account has been amended effective as of November 7, 2010, to allocate to the Segregated Account: (i) any and all liabilities it has or may have, now or in the future, to Ambac Financial Group Inc., or any of its successor, in regard to tax refunds or the July 18, 1991 Tax Sharing Agreement, as amended; (ii) any and all liabilities it has or may have, now or in the future, to the Internal Revenue Service or the U.S. Department of the Treasury with regard to taxes imposed under the Internal Revenue Code of 1986, as amended, for taxable periods ending on or prior to December 31, 2009; and (iii) any and all liabilities AAC has or may have, now or in the future, to the IRS or the Treasury with regard to any Federal Tax refunds that were received prior to November 7, 2010 by AAC, AFG or their affiliates. AAC is AFG's operations arm. AFG made the disclosure on the Amended AAC Rehabilitation Plan in a regulatory filing with the Securities and Exchange Commission on November 10, 2010. The Office of the Commissioner of Insurance of the State of Wisconsin commenced rehabilitation proceedings with respect to the establishment of a segregated account to segregate certain miscellaneous liabilities and policy liabilities related to certain non-performing segments of AAC's operations on March 24, 2010, in the District Court of Dane County, Wisconsin. The Rehabilitation Court appointed Sean Dilweg, the Wisconsin Commissioner of Insurance, as rehabilitator of the Segregated Account. On November 8, 2010, the Rehabilitation Court issued an order for temporary supplemental injunctive relief enjoining AFG, any successor-in-interest, any state court receiver of the company, all persons purporting to be creditors of AFG, the IRS and all other federal and state governmental entities from commencing or prosecuting any actions, claims, lawsuits or other formal legal proceedings relating to the Allocated Disputed Contingent Liabilities. RMBS Group Reacts to OCI's Actions The RMBS Policyholders Group is concerned that the interests of Ambac policyholders are not adequately protected. The RMBS Policyholders Group noted in a public statement that the events that occurred since November 8, 2010, have demonstrated clearly that the Wisconsin Office of the Commissioner of Insurance failed in its statutory duty to protect policyholders of Ambac Assurance Corporation, and actively participated in an arrangement that will divert billions of dollars of tax attributes from the insurance company that it is charged with regulating. The bankruptcy filings of Ambac's parent, Ambac Financial Group, Inc., reveal that OCI is endorsing a term sheet that allows AFG to retain its equity ownership in AAC, while simultaneously proposing a Plan of Rehabilitation in Wisconsin that impairs claims of policyholders, running afoul of the absolute priority rule, the Group pointed out. Moreover, the Group cited, the term sheet that the OCI endorses proposes to give to AFG billions of dollars of AAC's net operating losses ("NOLs") and requires AAC to compensate AFG for the use of any NOL even though that asset rightfully belongs to AAC. The Group is dismayed to discover that not only has the OCI failed in its statutory obligation to protect policyholders, but arranged behind closed doors with AFG, its management and creditors to strip policyholders of valuable assets. The Group resolves to challenge the OCI's actions. On November 8, 2010, the RMBS Policyholders Group, along with other objectors representing more than $20 billion of insured securities, filed Objections to OCI's Plan of Rehabilitation with the Wisconsin Circuit Court. These Objections make clear that the Plan is flawed on many grounds, the Group stated. The Group's Objections, as well as those filed by other Ambac policyholders, are expected to be heard by the Wisconsin Circuit Court in a hearing scheduled to begin November 15, 2010. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Case No. 10-15973) on November 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "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. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed $30.05 billion in total assets, $31.47 billion in total liabilities, and a $1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of ($394.5 million) and total liabilities of $1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about $1.62 billion. The Vanguard Group, Inc., holds 5.46% of the stock of Ambac and is its largest shareholder. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN APPAREL: Regains Compliance With NYSE Amex --------------------------------------------------- American Apparel Inc. received on November 10, 2010, a letter from the NYSE Amex LLC indicating that the Company has regained compliance for continued listing on the Exchange. On October 29, 2010, the Company filed its Form 10-Q for the second quarter of 2010. On November 9, 2010, the Company also filed its Form 10-Q for the quarter ended September 30, 2010. In August, the Company received a letter from the NYSE Amex LLC stating that the Company's failure to timely file the second quarter 10-Q was a material violation of the Company's listing agreement with the Exchange. About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 30, 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. The Company's balance sheet at September 30, 2010, showed $322.7 million in total assets, $231.3 million in total liabilities, and stockholders' equity of $91.4 million. American Apparel disclosed in its quarterly report on Form 10-Q for the third quarter of 2010 that based upon results of operations for the nine months ended September 30, 2010, and through the issuance of the financial statements and projected for the remainder of 2010, the Company may not have sufficient liquidity necessary to sustain operations for the next twelve months, and that it is probable that beginning January 31, 2011, the Company will not be in compliance with the minimum Consolidated EBITDA covenant under the $80,000,000 term loan with Lion Capital LLP. "Noncompliance with covenants under the Lion Credit Agreement would constitute an event of default under the BofA Credit Agreement, which, if not waived, could block the Company from making borrowings under the BofA Credit Agreement," the Company said in the filing. "These factors, among others, raise substantial doubt that the Company will be able to continue as a going concern." AMERICAN SAFETY: Energizer Obtains U.S. Antitrust Clearance ----------------------------------------------------------- Energizer Holdings, Inc., disclosed that the waiting period for antitrust review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in connection with Energizer's planned acquisition of American Safety Razor (ASR) expired at midnight last night. The acquisition has thus cleared antitrust regulatory requirements in the United States. Clearance from regulatory authorities in Germany and Taiwan remains as a condition that must be satisfied before closing. Energizer will continue to seek clearance from those authorities in advance of the November 23, 2010 deadline in the Asset Purchase Agreement between Energizer and ASR. On October 8, 2010, Energizer announced that it was the winning bidder for ASR in bankruptcy court proceedings, and that Energizer signed an agreement with ASR to purchase substantially all of ASR's assets for $301 million in cash and the assumption of certain liabilities. If the remaining conditions to closing are satisfied, the acquisition is expected to close on November 23, 2010. Headquartered in St. Louis, Energizer Holdings, Inc., makes batteries and portable lighting. The Company also makes personal care products in the wet shave, skin care, feminine care and infant care categories. About American Safety American Safety Razor Company, LLC, doing business as Personna American Safety Razor, manufactures private-label shaving razors and blades. ASR also makes and distributes blades and bladed hand tools for a variety of industrial uses and specialty industrial and medical blades. The Company has roots going back to 1875. American Safety, along with affiliates, sought Chapter 11 relief (Bankr. D. Del. Case No. 10-12351) on July 28, 2010. Mark J. Thompson, Esq., and Morris J. Massel, Esq., at Simpson Thacher & Bartlett LLP, serve as bankruptcy attorneys. Howard A. Cohen, Esq., at Drinker Biddle & Reath LLP, is co-counsel. In addition, Lazard Middle Market LLC is the investment banker and Kurtzman Carson Consultants LLC is the claims and notice agent. American Safety disclosed $204,445,816 in assets and $530,809,101 in liabilities. ARMSTRONG WORLD: Moody's Downgrades Corp. Family Rating to 'B1' --------------------------------------------------------------- Moody's Investors Service downgraded Armstrong World Industries, Inc.'s Corporate Family Rating to B1 from Ba2 and Probability of Default Rating to B1 from Ba3. In a related rating action, Moody's assigned B1 rating to the company's proposed $1.05 billion senior secured bank credit facility. Armstrong's speculative grade liquidity is lowered to SGL-2 from SGL-1. The ratings for the company's existing senior secured bank credit facilities will be withdrawn once repaid. These rating actions result from Armstrong's intent to pay shareholders a special cash dividend in the amount of approximately $800 million funded from a combination of cash on hand and debt. The outlook is stable. These rating actions conclude the review initiated on November 5, 2010. These ratings/assessments were affected by this action: * Corporate Family Rating downgraded to B1 from Ba2; * Probability of Default Rating downgraded to B1 from Ba3; and, * $250 million Senior Secured Revolving Credit Facility due five years from closing rated B1 (LGD3, 42%); * $250 million Senior Secured Term Loan A due five years from closing rated B1 (LGD3, 42%); and, * $550 million Senior Secured Term Loan B due six and one half years from closing rated B1 (LGD3, 42%); The company's speculative grade liquidity rating is lowered to SGL-2 from SGL-1. Ratings Rationale The downgrade of Armstrong's Corporate Family Rating to B1 from Ba2 reflects diminished credit metrics as a result of the aggressive financial strategy exhibited by Armor TPG Holdings LLC, Armstrong's largest shareholder after the Asbestos Personal Injury Settlement Trust. TPG, which Moody's believes effectively controls Armstrong, and the Trust are directing the company to pay shareholders a special cash dividend in the amount of approximately $800 million. The company is financing this dividend with about $450 million of cash on hand and $350 million in debt. The increase in debt will result in deterioration of key credit metrics, higher debt service requirements, and diminished liquidity. On a pro-forma basis for last twelve months through September 30, 2010, debt-to-EBITDA will increase to about 4.5 times from 3.2 times and free cash flow-to-debt will contract to about 10% from 15.4%. Interest coverage defined as EBITA-to- interest expense will also weaken to about 1.1 times from 3.3 times on a pro forma basis as well (all ratios adjusted per Moody's methodology). Moody's views the pro forma financial metrics of Armstrong following the dividend as being consistent with a B1 Corporate Family Rating. Additionally, the contributions from the WAVE JV become more critical to supporting higher debt service requirements, since Armstrong's core operating margins remain weak with adjusted EBITA margin of 4.3% for LTM 3Q10. Nevertheless, the company's strong North American market position in providing flooring to the new residential and commercial construction as well as to the remodeling end market positions the company to benefit from eventual economic and construction recovery. The change in Armstrong's speculative grade liquidity rating to SGL-2 from SGL-1 is due primarily to the use of about $450 million of cash on hand to partially fund the company's proposed dividend. Armstrong is reducing its cash on hand at 3Q10 on a pro form basis to $232 million from $682.2, lessening its financial flexibility to contend with ongoing uncertainties in its end markets. Additionally, Armstrong's ability to generate large amounts of free cash will be modestly diminished due to higher debt service requirements. The stable outlook incorporates Moody's view that Armstrong will maintain credit metrics appropriate for its rating category. Availability under the company's proposed revolving credit facility and the absence of any near-term maturities or other liquidity constraints support the stable outlook as well. The B1 rating assigned to the proposed $1.05 billion senior secured bank credit facility, the same rating as the corporate family rating, reflects the preponderance of debt in Armstrong's capital structure. The bank credit facility will have a first lien on all the company's domestic assets. Proceeds from the bank credit facility with about $450 million of cash will be used to refinance Armstrong's existing outstanding bank debt, to disburse the $800 million dividend, and to pay related fees and expenses A rating upgrade appears unlikely over the intermediate term due to Armstrong's low margins, increased debt burden, and generally weak end market demand. However, over time, if the company proved able to drive EBITA-to-interest coverage towards 3.0 times, and debt-to-EBITDA toward 3.5 times (all ratios adjusted per Moody's methodology), through a mixture of operating improvements and debt deduction a rating upgrade would be considered. A rating downgrade could result from evidence that Armstrong is not benefiting from its cost reduction programs or if financial performance is negatively impacted by an unexpected decline in the company's end markets. EBITA-to-interest expense remaining below 1.5 times or debt-to-EBITDA sustained above 4.5 times (all ratios adjusted per Moody's methodology) for an extended period of time could pressure the ratings. Future shareholder friendly activities, or deterioration in the company's liquidity profile, or debt-financed transactions would also stress Armstrong's ratings. The last press release was on November 5, 2010, at which time Moody's placed Armstrong's ratings under review for potential downgrade. Armstrong World Industries, Inc., headquartered in Lancaster, PA, is a global producer of flooring products and ceiling systems for use primarily in the construction and renovation of residential, commercial and institutional buildings. The company also designs, manufactures and sells kitchen and bathroom cabinets for the U.S. market. Revenues for the last twelve months through September 30, 2010 totaled approximately $2.8 billion. ATLANTIC SOUTHERN: Posts $3.7MM Q3 Loss; Bank Needs Add'l Capital ----------------------------------------------------------------- Atlantic Southern Financial Group, Inc., the holding company for Atlantic Southern Bank, filed its quarterly report on Form 10-Q, reporting a net loss of $3.7 million on $3.9 million of net interest income for the three months ended September 30, 2010, compared with a net loss of $8.3 million on $4.0 million of net interest income for the same period last year. "As a result of the extraordinary effects of what may ultimately be the worst economic downturn since the Great Depression, the Company's and the Bank's capital have been significantly depleted," the Company said in the filing. The Company recorded a net loss of $59.2 million in 2009, and a net loss of $9.3 million in the first nine months of 2010. The Company's ability to raise additional capital will depend on conditions in the capital markets at that time, which are outside its control, and on its financial performance. Accordingly, the Company cannot be certain of its ability to raise additional capital on terms acceptable to them. The Company's inability to raise capital or comply with the terms of the Order [to Cease and Desist] raises substantial doubt about its ability to continue as a going concern." On September 11, 2009, the Company's wholly-owned subsidiary bank, Atlantic Southern Bank, entered into a Stipulation and Consent to the Issuance of an Order to Cease and Desist with the Federal Deposit Insurance Corporation and the Georgia Department of Banking and Finance, whereby the Bank consented to the issuance of an Order to Cease and Desist. The Company's balance sheet at September 30, 2010, showed $852.6 million in total assets, $832.4 million in total liabilities, and stockholders' equity of $20.2 million. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6eb9 About Atlantic Southern Macon, Ga.-based Atlantic Southern Financial Group, Inc. (NASDAQ: ASFN) operates nine banking locations in the middle Georgia markets of Macon and Warner Robins, five locations in the coastal markets of Savannah, Darien, Brunswick, one location in the south Georgia market of Valdosta, Georgia and one location in the northeast Florida market of Jacksonville, Florida. The Company specializes in commercial real estate and small business lending. AVANTAIR INC: Posts $4.81-Mil. Third Quarter Net Loss ----------------------------------------------------- Avantair Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $4.814 million on total revenue of $35.78 million for the quarter ended Sept. 30, 2010, compared with a net loss of $1.367 million on $35.2 million of revenue for the same period in 2009. The Company's balance sheet at Sept. 30, 2010, showed $124.21 million in total assets, $146.82 million in total liabilities, and a stockholders' deficit of $37.25 million. Avantair said in the regulatory filing that its primary growth strategy is to continue to increase the number of fractional share owners and aircraft under management as well as increase the number of flight hour cards and Axis Club Memberships sold. At September 30, 2010, the Company had 25.5 fractional aircraft shares available for sale. In addition to the cost of acquiring aircraft, Avantair's primary expenses are related to fuel, aircraft repositioning (i.e., moving an aircraft to another location to accommodate a customer's need and for demonstration flights for sales purposes), maintenance, charters and insurance. To finance its growth strategy, the Company will continue to actively pursue additional funds through some or a combination of equity financing, including the sale of additional shares of common and preferred stock, asset sales, promotional sales incentives, accelerated payments of management and maintenance fees or debt financing. Avantair said in the Form 10-Q that it has incurred losses since inception and may not be able to generate sufficient net revenue from its business in the future to achieve or sustain profitability. At September 30, 2010, the Company had approximately $6.9 million of unrestricted cash on hand and assuming there is no change in recent sales and expense trends, the Company believes that its cash position will be sufficient to continue operations for the foreseeable future. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6ea1 A full-text copy of the earnings release is available for free at http://ResearchArchives.com/t/s?6e49 About Avantair Inc. Headquartered in Clearwater, Fla., Avantair, Inc. (OTC BB: AAIR) -- http://www.avantair.com/-- sells fractional ownership interests in, and flight hour card usage of, professionally piloted aircraft for personal and business use, and the management of its aircraft fleet. According to AvData, Avantair is the fifth largest company in the North American fractional aircraft industry. As of June 30, 2010, Avantair operated 55 aircraft within its fleet, which is comprised of 46 aircraft for fractional ownership, 5 company owned core aircraft and 4 leased and company managed aircraft. Avantair also operates fixed flight based operations (FBO) in Camarillo, California and in Caldwell, New Jersey. Through these FBOs and its headquarters in Clearwater, Florida, Avantair provides aircraft maintenance, concierge and other services to its customers as well as to the Avantair fleet. AXESSTEL INC: Notes of Poor Operating Results; Has $1.1MM Q3 Loss ----------------------------------------------------------------- Axesstel Inc. filed its quarterly report on Form 10-Q, reporting a $1.1 million net loss on $9.1 million of revenue for the quarter ended Sept. 30, 2010, compared with a net loss of $908,842 on $15 million of revenue in the same period in 2009. The Company's balance sheet at Sept. 30, 2010, showed $10.90 million in total assets, $21.28 in total current liabilities, and a stockholders' deficit of $10.37 million. The Company says it has experienced significant net losses to date from operations. At September 30, 2010, it had cash and cash equivalents of $88,000, negative working capital of $10.9 million, and a stockholders' deficit of $10.4 million. "Poor operating results since the beginning of 2009 have greatly reduced our working capital position from $241,000 at December 31, 2008 to a deficit of $10.9 million at September 30, 2010. While we have diversified our product and customer base, we expect that we will continue to face significant fluctuations in quarterly operating results over the next few quarters. Because of our limited cash position, a temporary reduction in cash flow from operations could have a significant impact on our ability to fund operations," the Company said in the Form 10-Q. The Company said it is working with a number of lenders and anticipates that it will be able to continue to secure financing in the upcoming quarters. A full-text copy of the earnings release is available for free at http://ResearchArchives.com/t/s?6e61 A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6e90 About Axesstel, Inc. San Diego, Calif.-based Axesstel, Inc. (OTC BB: AXST) -- http://www.axesstel.com/-- is a provider of fixed wireless voice and broadband access solutions for the worldwide telecommunications market. * * * As reported in the Troubled Company Reporter on March 29, 2010, Gumbiner Savett Inc., in Santa Monica, Calif., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2009. The independent auditors noted that the Company has historically incurred substantial losses from operations, and the Company may not have sufficient working capital or outside financing available to meet its planned operating activities over the next 12 months. At March 31, 2010, the Company owed its primary manufacturer $9.7 million, of which $6.1 million was past due under the terms of its credit arrangement. BALL CORP: Fitch Assigns 'BB' Rating to $400 Mil. Notes ------------------------------------------------------- Fitch Ratings has assigned a 'BB' rating to Ball Corporation's $400 million unsecured notes maturing in 2021. Ball intends to use net proceeds from the offering to repay the borrowings under its $300 million secured term loan facility, and for general corporate purposes, which may include potential investments in strategic alliances and acquisitions, the refinancing or repayment of debt, working capital, share repurchases or capital expenditures. Ball's Issuer Default Rating is 'BB' with a Positive Rating Outlook. Ball's ratings incorporate the company's solid cash flow generation, stable credit metrics, leading market positions in its product categories/market segments, and current expectations in the packaging end markets. Ball has aggressively reduced overcapacity and higher fixed costs by closing numerous facilities in North America. With facility cost reductions, the completed integration of the AB InBev acquisition coupled with additional ongoing cost savings with corporate overhead and other initiatives, Fitch expects Ball to realize cost benefits through 2010 while continuing to improve profitability margins. With the recent acquisitions and the divesture of its lower margin commodity-oriented plastics segment, Ball has improved the operational focus of its strategic footprint. In addition the company has taken steps to rebalance its consumer soft drink mix following recent acquisitions and contract negotiations that will result in material volume expansion during 2011 in North America. Risks reflected in the rating include the acquisitive nature of the company, the remaining refinancing of its term loan/ multicurrency revolving facility, the risks inherent within the packaging segment including country and revenue/customer concentration as well as its underfunded pension plans. Near-term maturities are principally $452 million due under Ball's secured credit facilities with amortization requirements that ramp up significantly in the fourth quarter of 2010. All other material maturities for Ball's debt are beyond 2015. The credit facilities mature in October 2011 and bear interest at variable rates and include these: 1) a multicurrency, long-term revolving credit facility that provides the company with up to $700 million availability; 2) a Canadian long-term revolving credit facility that provides the company with up to $35 million; 3) remaining term loans A-C denominated in euros, British pounds, and Canadian. The revolver had $46 million drawn at the end of the third quarter. Ball is currently seeking commitments to replace its existing senior secured credit facilities with new five-year senior secured credit facilities. The company's liquidity is good and was in excess of $800 million at the end of Sept. 26, 2010, including $169 million in cash and revolver availability. Ball's $250 million accounts receivable securitization program had no accounts receivable sold under the program at the end of the third quarter. In October 2010, the company renewed its receivables sales agreement for a period of one year. The size of the new program varies from up to $125 million for settlement dates in January through April and up to $175 million for settlement dates in the remaining months. While capital spending is expected to increase to $300 million due to significant investments in growth projects, Ball expects free cash flow in the range of $500 million for 2010. At the end of third quarter 2010, pro forma leverage was 2.7 times, which has decreased from a peak following the InBev acquisition of 3.0x. Fitch expects leverage in the mid 2x range at the end of 2010. With the company near its leverage target goal, Fitch expects Ball to use the majority of its discretionary cash flow for share repurchases and dividends as well as continue to be opportunistic in regards to acquisitions. Through Nov. 2, Ball had repurchased $494 million of stock in 2010. The Outlook is currently Positive. Fitch expects that a ratings upgrade is possible if these actions occur in the near term: -- Ball addresses remaining liquidity risk of refinancing, repaying and extending term loan/credit facility in a favorable manner; -- Operating trends/performance continue as expected with additional volume recovery; -- The company sustains FCF at current levels; -- Continuation of current financial policies and the company does not pursue permanently leveraging transactions. BALL CORP: Moody's Assigns 'Ba1' Rating to $400 Million Notes ------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to the new $400 million senior unsecured notes due 2021 of Ball Corporation. Moody's also affirmed the company's Ba1 corporate family and probability of default rating. The rating outlook remains stable. Additional instrument ratings are detailed below. The rating is in response to the company's announcement on November 15, 2010, that it had commenced a public offering of $400 million senior unsecured notes due 2021. Ball intends to use the net proceeds from the offering to repay the borrowings under its $300 million secured term loan facility and for general corporate purposes, which may include potential acquisitions, the repayment of debt, working capital or share repurchases. Moody's took these rating actions: -- Affirmed corporate family rating, Ba1 -- Affirmed probability of default rating, Ba1 -- Assigned $500 million senior unsecured notes due2021, Ba1 (LGD 4, 54%) -- Affirmed $715 million multicurrency credit facility due October 2011, Ba1 (LGD 4, 54%) ($700 million after consideration of the Lehman bankruptcy) -- Affirmed $35 million Canadian credit facility due October 2011, Ba1 (LGD 4, 54%) -- Affirmed GBP 55 million Term A Loan due October 2011, Ba1 (LGD 4, 54%) -- Affirmed ?158 million Term B Loan due October 2011, Ba1 (LGD 4, 54%) -- Affirmed CAD 111 million Term C Loan due October 2011, Ba1 (LGD 4, 54%) -- Affirmed $300 million Term D Loan due October 2011, Ba1 (LGD 4, 54%) -- Affirmed $450 million 6.625% senior unsecured notes due March 2018, a Ba1 (LGD 4, 54%) -- Affirmed $375 million 7.125% senior unsecured notes due September 2016, Ba1 (LGD 4, 54%) -- Affirmed $325 million 7.735% senior unsecured notes due September 2019, Ba1 (LGD 4, 54%) -- Affirmed $500 million 6.75% senior unsecured notes due 2020, Ba1 (LGD 4, 54%) Ratings Rationale The affirmation of the rating and outlook reflect the largely credit neutral impact of the transaction. The affirmation also reflects the company's stable profitability, well-consolidated industry structure with long-standing competitive equilibrium and scale. The Ba1 rating also reflects the company's high percentage of long-term contracts with strong cost pass-through provisions, geographic diversification and continued emphasis on innovation and product diversification. The rating is predicated upon the continued maintenance of good liquidity, including the timely refinancing of existing credit facilities given the significant increase in amortization payments beginning December 31, 2010 and the company's dependence of short term financing for seasonal working capital needs. The ratings are constrained by Ball's aggressive financial policy, concentration of sales and primarily commoditized product line. The ratings are also constrained by an EBIT margin that is weak for the rating category. The AB Inbev acquisition has increased the company's exposure to the declining carbonated soft drinks market as well. What Could Change the Rating -- Down The ratings or outlook could be downgraded should an acquisition, new shareholder initiative or exogenous shock impair cash generation. Deterioration in the operating and competitive environment or the failure to refinance the existing credit facilities in a timely manner and maintain adequate liquidity could also result in a downgrade. Specifically, the ratings could be downgraded if adjusted total debt to EBITDA rises above 4.0 times, EBIT margins decline below 9% and free cash flow to debt declines below the high single digits. What Could Change the Rating -- Up Ball's financial aggressiveness is the primary impediment to an upgrade. An upgrade in ratings would require a commitment to maintain less aggressive financial policies or significantly more cushion within the contemplated higher rating category. Additionally, an upgrade would require an improvement in the EBIT margin and continued stability in the competitive and operating environment. Specifically, the rating could be upgraded if the EBIT margin improved to the low teens, adjusted total debt to EBITDA improved to 3.0 times or better and adjusted free cash flow to debt remained above 10% on a sustainable basis. BALL CORP: S&P Assigns 'BB+' Rating to $500 Mil. Senior Notes ------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned a senior unsecured debt rating of 'BB+' (the same as the corporate credit rating) and a recovery rating of '4' to Ball Corp.'s proposed offering of $500 million of senior unsecured notes due 2021. These ratings indicate S&P's expectation of average (30%-50%) recovery in the event of a payment default. At the same time, S&P affirmed the 'BB+' corporate credit rating and all existing issue ratings on Ball. Based on its updated recovery analysis, S&P revised the recovery ratings on Ball's senior unsecured debt to '4' from '3'. The recovery rating on Ball's senior secured debt remains unchanged at '2'. Ball intends to use the net proceeds of this offering to repay its senior secured term loan D ($300 million outstanding) and for general corporate purposes. In addition, the company has indicated that it is currently seeking commitments to replace its existing senior secured credit facilities with new five-year senior secured credit facilities. S&P will reevaluate recovery prospects for each instrument in the capital structure once the new structure has been determined. Pro forma for the notes offering and term loan repayment, as of Sept. 26, 2010, Broomfield, Colo.-based Ball had total adjusted debt of about $3.3 billion. S&P adjusts debt to include about $650 million of tax-effected unfunded postretirement liabilities and capitalized operating leases. "The ratings on Ball reflect its satisfactory business risk profile as a leading global can manufacturer with annual sales of $7.6 billion and a significant financial risk profile," said Standard & Poor's credit analyst Cynthia Werneth. The outlook is stable. Ball's financial profile should remain appropriate for the ratings -- including FFO to debt of about 20% -- given its satisfactory business profile, relatively steady free cash flow generation, and track record of restoring credit quality following acquisitions. S&P could lower the ratings if the company undertook a large, debt-financed acquisition or share repurchases that weaken credit measures below levels S&P considers appropriate for the current ratings with no clear prospects of recovery. Financial policies are likely to preclude an upgrade. BALTIMORE INNER: Taps Ciardi Ciardi as Bankruptcy Counsel --------------------------------------------------------- Baltimore Inner Harbor, LLC, asks for authorization from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to employ Ciardi Ciardi & Astin as bankruptcy counsel. Ciardi Ciardi will, among other things: a. prepare papers and legal documents required to be filed in connection with the Debtor's bankruptcy proceeding; b. negotiate with creditors; c. pursue existing litigation; and d. participate with the Debtor in the formulation of a plan. Ciardi Ciardi will be paid based on the rates of its professionals: Albert A. Ciardi, III $465 Jennifer E. Cranston $275 Alex Giuliano, Paralegal $120 Albert A. Ciardi, III, Esq., a partner at Ciardi Ciardi, assures the Court that the firm is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. Philadelphia, Pennsylvania-based Baltimore Inner Harbor, LLC, owns unimproved real property at 414 Light Street in Baltimore, Maryland. It filed for Chapter 11 bankruptcy protection on November 4, 2010 (Bankr. E.D. Pa. Case No. 10-19623). The Debtor estimated assets and debts at $10 million to $50 million in its Chapter 11 petition. BALTIMORE INNER: Court Extends Schedules Deadline to Dec. 3 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania extended, at the behest of Baltimore Inner Harbor, LLC, the deadline for the filing of schedules of assets and liabilities and statement of financial affairs until December 3, 2010. The deadline for the schedules was previously November 18, 2010. The Debtor is in the process of compiling the information necessary to complete the Schedules. The Debtors asked for an additional 15 days to accurately determine its assets and liabilities. Philadelphia, Pennsylvania-based Baltimore Inner Harbor, LLC, owns unimproved real property at 414 Light Street in Baltimore, Maryland. It filed for Chapter 11 bankruptcy protection on November 4, 2010 (Bankr. E.D. Pa. Case No. 10-19623). Jennifer E. Cranston, Esq., at Ciardi Ciardi & Astin, P.C., assists the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million in its Chapter 11 petition. BALTIMORE INNER: Asks Court to Dismiss Chapter 11 Bankruptcy Case ----------------------------------------------------------------- Baltimore Inner Harbor, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to dismiss its Chapter 11 bankruptcy case. The Debtor said that it is unable to meet its obligations going forward. The Debtor is indebted to 414 Light Street Associates, LLC, successor in interest to Susquehanna Bank, in the amount of $24,329,576.54 and an additional $12,000,000 in unsecured debt. Currently the Debtor's sole asset, 414 Light Street, Baltimore, Maryland, is insured. However, the Debtor is unable to obtain insurance for Baltimore Inner Harbor, LLC, nor is it able to pay for the said insurance. The Debtor determined that no equity exists in the Property after the estimated cost of sale. According to the Debtor, there would likely be no return to unsecured creditors should the above-captioned case be converted. While the Debtor has yet to file a Monthly Operating Report, its distributions remain at zero as the Debtor is not currently operating and thus its estimated fees owed to the Office of the United States Trustee fall at $325. The Debtor will make this payment to the Office of the United States Trustee prior to the entry of an order dismissing its bankruptcy case. The Debtor requests that an expedited hearing be scheduled on its request on November 22, 2010. Philadelphia, Pennsylvania-based Baltimore Inner Harbor, LLC, owns unimproved real property at 414 Light Street in Baltimore, Maryland. It filed for Chapter 11 bankruptcy protection on November 4, 2010 (Bankr. E.D. Pa. Case No. 10-19623). Jennifer E. Cranston, Esq., at Ciardi Ciardi & Astin, P.C., assists the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million in its Chapter 11 petition. BIOJECT MEDICAL: Posts $357,000 Net Loss in Third Quarter --------------------------------------------------------- Bioject Medical Technologies Inc. reported a third quarter 2010 net loss allocable to common shareholders of $357,000, compared to net loss allocable to common shareholders of $187,000 in the comparable year-ago quarter. For each of the quarters ended September 30, 2010 and 2009, Bioject reported revenues of $1.5 million. Third quarter 2010 and 2009 product sales were $1.4 million. License and technology fees for the third quarter 2010 were $91,000, compared to $105,000 in the comparable year-ago quarter. Operating expenses for the third quarter of 2010 were $1.9 million, compared to $1.7 million in the comparable year-ago quarter, a 6% increase from the prior year-ago period. The Company reported a third quarter 2010 operating loss of $331,000, compared to an operating loss of $210,000 in the prior year period. Included in the current quarter operating loss of $331,000 is $189,000 of non-cash charges comprised of non-cash compensation expense related to the fair value of stock-based awards, warrants and stock funding of its 401(k) plan of $71,000 and depreciation and amortization of $118,000, as compared to $228,000 of non-cash charges for the prior year period comprised of $65,000 non-cash compensation expense and $163,000 of depreciation and amortization. The Company's balance sheet at Sept. 30, 2010, shows $3.93 million in total assets, $2.06 million in total current liabilities, $1.18 million in deferred revenue, $351,148 in other long-term liabilities, and stockholder's equity of $338,370. At Sept. 30, 2010, the Company reported cash of $0.3 million and a working capital deficit of $0.2 million. "While Bioject's revenues of $1.5 million remained comparable to the year ago quarter, we experienced higher operating expenses primarily due to our increased sales and business development efforts focused on new opportunities and potential partners," said Ralph Makar, Bioject's President and CEO. "We are pleased to report that third quarter revenues are approximately 30% higher than each of the first two quarters of this year. In addition, we continue to try to improve our cash position by focusing on coming to closure on potential deals in process, increasing sales and/or securing additional sources of capital. Contributing to our cash position, in November 2010 we were informed that Bioject was awarded a grant as part of Section 48D of the Internal Revenue Code for Qualifying Therapeutic Discovery Projects. Today, we received funds amounting to approximately $244,000 from this grant," added Mr. Makar. A full-text copy of the earnings release is available for free at http://ResearchArchives.com/t/s?6eaf A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6eb0 About Bioject Medical Bioject Medical Technologies Inc. (OTCBB: BJCT) -- http://www.bioject.com/-- based in Portland, Oregon, is an innovative developer and manufacturer of needle-free injection therapy systems. The Company is focused on developing mutually beneficial agreements with leading pharmaceutical, biotechnology, and veterinary companies. * * * Moss Adams LLP, in Portland, Oregon, which audited the Company's 2009 results, expressed substantial doubt about the Company's ability to continue as a going concern. The auditor noted that the Company has suffered recurring losses, has had significant recurring negative cash flows from operations, and has an accumulated deficit. BIO-KEY INT'L: Sept. 30 Balance Sheet Upside-Down by $1.01-Mil. --------------------------------------------------------------- BIO-key International Inc. filed with the Securities and Exchange Commission its quarterly report on Form 10-Q for the period ended Sept. 30, 2010. The Company's balance sheet at Sept. 30, 2010, shows $5.97 million in total assets, $1.84 million in total liabilities, and a stockholders' deficit of $1.01 million. The Troubled Company Reporter published on November 15, 2010, BIO- key's earnings release, which said that total revenue for the three months ended September 30, 2010 was $546,376 compared to $524,351 for the same period last year, an increase of 4.2%. Net loss was $943,790 in the third quarter of 2010, compared with $69,411 in the same period in 2009. A full-text copy of the earnings release is available for free at http://ResearchArchives.com/t/s?6e60 A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6e69 About BIO-key Wall, N.J.-based BIO-key International, Inc. (OTC BB: BKYI) -- http://www.bio-key.com/-- develops and markets advanced fingerprint identification biometric technology and software solutions. CCR LLP, in Westborough, Mass., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's results for the year ended Dec. 31, 2009. The independent auditors noted of the Company's substantial net losses in recent years and accumulated deficit. BLACKHAWK TILE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Blackhawk Tile and Stone, Inc. 1850 - 121st Street East, Suite 103 Burnsville, MN 55337 Bankruptcy Case No.: 10-38188 Chapter 11 Petition Date: November 12, 2010 Court: United States Bankruptcy Court District of Minnesota (St Paul) Judge: Nancy C. Dreher Debtor's Counsel: William A. Vincent, Esq. WILLIAM A VINCENT PA 17736 Excelsior Blvd Minnetonka, MN 55345 Tel: (952) 401-8883 Fax: (952) 401-8889 E-mail: wavpatax@aol.com Scheduled Assets: $1,994,650 Scheduled Debts: $1,505,433 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mnb10-38188.pdf The petition was signed by Steve Harrison, president. BONNIE THORNHILL: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Bonnie P. Thornhill 217 Methodist Blvd., Apt 244 Hattiesburg, MS 39402 Bankruptcy Case No.: 10-52722 Chapter 11 Petition Date: November 12, 2010 Court: United States Bankruptcy Court Southern District of Mississippi (Gulfport Divisional Office) Debtor's Counsel: Craig M. Geno, Esq. HARRIS JERNIGAN & GENO, PLLC 587 Highland Colony Parkway P.O. Box 3380 Ridgeland, MS 39157 Tel: (601) 427-0048 Fax: (601) 427-0050 E-mail: cmgeno@harrisgeno.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. BRIGHTSTAR CORP: Moody's Assigns 'Ba3' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service assigned to Brightstar Corp. a first- time Ba3 Corporate Family and Probability of Default Rating. The outlook is stable. Concurrently, Moody's assigned a B1 rating to Brightstar's proposed offering of $250 million senior unsecured notes maturing 2016. Proceeds will be used to prepay various existing loan facilities. The assigned ratings are contingent on the review of final documentation and no material change in the terms and conditions of the debt transaction as advised to Moody's. These first-time ratings/assessments were assigned: * Corporate Family Rating -- Ba3 * Probability of Default Rating -- Ba3 * $250 Million Senior Unsecured Notes due 2016 -- B1 (LGD-4, 64%) Rating Rationale Brightstar's Ba3 CFR reflects its presence and leadership position as a global services company providing distribution and supply chain solutions to key participants in the wireless telecommunications industry. Ratings support is provided by Brightstar's infrastructure, channel reach and capabilities as a principal supplier of distribution, logistics, inventory management and supply-chain services with high entry/exit barriers in the mobility space. Brightstar's Ba3 rating also reflects the challenges posed by the company's low margin business profile, significant supplier/product-line, customer and regional (Latin America) concentrations, and limited pricing power. It also captures exposure to the highly cyclical and volatile wireless telecommunications industry, which is characterized by very short product lifecycles, rapid pace of technological change and considerable share shifts among wireless manufacturers. Additionally, the rating recognizes Brightstar's sizable working capital needs and reliance on external financing during periods of significant revenue growth, which can result in extended periods of negative free cash flow (e.g., 2005 through 2007). Lastly, the rating embeds Moody's expectations that acquisition and/or investment activity over the near-to-intermediate term could increase as Brightstar pursues growth opportunities within regional markets. The rating captures the company's focused distribution services, good internal execution, and meaningful profit contribution from its faster growth and higher margin fee-based supply chain optimization business. The supply chain business represents about one-third of Brightstar's total gross profit dollars despite accounting for about 6% of total revenue. The success of its business model has led to strong revenue growth reflecting the company's growing relevance among customers who increasingly rely on outsourced providers like Brightstar to expand their presence in faster growth market segments, reduce operating costs and enhance their supply chain. The CFR considers the company's solid financial performance and ability to quickly eliminate costs in recessionary periods, as well as the countercyclical nature of its low-capex model, which results in positive FCF and very good liquidity during cycle downturns. The Ba3 CFR incorporates Moody's expectation that Brightstar may experience periods of rising debt levels due to revolver draws to fund rapid growth. Despite this, Moody's anticipate stable-to-improving financial leverage (as measured by total adjusted debt to EBITDA) over the near-to-intermediate term principally from EBITDA expansion. Pro forma for the new debt transaction, total debt to EBITDA (Moody's adjusted) of roughly 3.5x for the LTM period is appropriate for the Ba3 rating in light of Brightstar's smaller scale relative to its Baa3-rated IT distribution peers as well as the potential for greater EBITDA volatility and outsized working capital requirements associated with a product portfolio consisting primarily of wireless, consumer electronics and mobile devices that churn very quickly. The company maintains adequate liquidity. Though the business model requires minimal capex, which generally supports positive FCF generation, Moody's expect negative FCF over the next twelve months due to higher working capital usage for receivables and inventory given the recent outsized revenue growth from new customer signings and penetration into existing client accounts. Additional liquidity support is expected to be provided by an existing $400 million ABL revolver maturing August 2012 (which Moody's anticipate Brightstar to rely on quite heavily), roughly $335 million of credit and trade facilities, and pro forma cash balances of approximately $100 million at closing. The stable rating outlook reflects Moody's expectation that Brightstar's vendor/customer relationships will remain relatively steady, operating margins will be maintained in the 2-4% range, retained cash flow to debt (Moody's adjusted) will stay at or above 20% and liquidity will remain adequate. The potential for moderate spending on acquisitions and investments is also captured in the stable outlook. Brightstar's Ba3 rating could experience upward pressure if the company's revenue and operating profits continue to grow as a result of market share gains, higher revenue and gross profit contribution from the supply chain business, and improvement in vendor, product-line and geographic diversification. Quantitatively, positive rating pressure could occur if the company expands operating margins above 4.5% (Moody's adjusted) on a sustained basis, reduces operating and FCF margin volatility, generates consistently positive FCF leading to improved internal liquidity and reduces leverage to under 2.5x (Moody's adjusted) on a sustained basis. Downward rating pressure could result if Brightstar witnessed material vendor losses or intense competition from distributors and vendors/OEMs were to cause market share losses, pricing pressure and substantial margin erosion as well as a significant decline in FCF and internal liquidity. Additionally, if the company incurs a disproportionate amount of debt relative to additive EBITDA to pursue an acquisition or investment, the rating could be negatively affected. Headquartered in Miami, Florida, Brightstar Corp. is a leading global distributor of wireless handsets, smart phones, IT devices and consumer electronics serving major technology OEMs, network operators and retailers. Consolidated revenues for the twelve months ended September 30, 2010, were approximately $3.8 billion. BUCYRUS INTERNATIONAL: Moody's Reviews 'Ba2' Corp. Family Rating ---------------------------------------------------------------- Moody's Investors Service placed Bucyrus International's Ba2 corporate family rating, Ba2 probability of default rating, and Ba2 bank credit facility ratings under review for possible upgrade. The review results from the announcement that Caterpillar Inc. will acquire Bucyrus in a transaction valued at approximately $8.6 billion (including net debt). Caterpillar intends to fund the transaction, which is expected to close in mid-2011, through a combination of cash on hand, debt and equity. The transaction remains subject to standard regulatory and shareholder approvals, and other normal closing conditions. Moody's review of Bucyrus' ratings will focus on the strategic importance of this business to Caterpillar and the likely capital structure of Bucyrus following the acquisition. Assuming the transaction closes as outlined, Moody's believe it likely that the existing debt at Bucyrus will be refinanced at the Caterpillar level, in which case all of Bucyrus' ratings would be withdrawn. The last rating action on Bucyrus was May 14, 2010, at which time Moody's affirmed the company's Ba2 corporate family rating and probability of default rating and assigned a Ba2 rating to its revolving and term loan credit facilities. Bucyrus International, headquartered in South Milwaukee, Wisconsin, is a global manufacturer of surface and underground original equipment used in the production of coal, iron ore, oil sands, and other minerals. The company also provides aftermarket replacement parts and services for these machines. Bucyrus acquired the mining equipment business of Terex Corporation (Terex Mining) in February 2010 for a consideration of $1.3 billion. Bucyrus' revenues for the 12 months ending September 30, 2010, were $3.1 billion. BUCYRUS INTERNATIONAL: S&P Puts 'BB+' Rating on Positive Watch -------------------------------------------------------------- Standard & Poor's Ratings Services said that it has placed its ratings on Milwaukee, Wis.-based mining equipment manufacturer Bucyrus International Inc., including the 'BB+' corporate credit rating, on CreditWatch with positive implications. "The rating action follows Caterpillar's announcement that it has entered into an agreement to acquire all of Bucyrus' outstanding shares for $92 per share in cash," said Standard & Poor's credit analyst Robyn Shapiro. "S&P will likely withdraw the ratings on Bucyrus if the rated debt is repaid as part the transaction." CENTRAL FALLS, R.I.: Receivership Law Shows Teeth ------------------------------------------------- Dow Jones' Small Cap reports that a state-appointed receiver's firing of the city council in Central Falls, R.I., last week illustrates how powerful the Ocean State's new receivership law is: Not even bankruptcy-court judges can oust elected officials. According to the report, some municipal-bond analysts expect this rare action will give local officials added incentive to resolve their municipalities' fiscal problems, or risk losing their jobs. But some elected leaders may be reluctant to seek help if they may be ousted from office as a result, others say, the report relates. The report notes that for bond holders, a receiver is better than a bankruptcy filing, and can avoid a political morass that hobbles action, said market observers. "In cases where there has been misconduct, corruption or mismanagement, it is the elected officials who got them into the problem in the first place," said Brian Fraser, a partner at the law firm Richards, Kibbe & Orbe in New York, the report adds. CHANTICLEER HOLDINGS: Posts $149,400 Net Loss in Q3 2010 -------------------------------------------------------- Chanticleer Holdings, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $149,356 on $9,250 of revenue for the three months ended September 30, 2010, compared with a net loss of $36,972 on $260,875 of revenue for the same period last year. At September 30, 2010, and December 31, 2009, the Company had a working capital deficit of $646,232 and $675,471, respectively. The Company's balance sheet at September 30, 2010, showed $1.56 million in total assets, $1.14 million in total liabilities, and shareholders' equity of $422,308. Creason & Associates, P.L.L.C., in Tulsa, Okla., expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted that the Company has planned expansion of business for 2010 which will require substantial financing. "In addition, the Company has incurred substantial net losses and negative cash flows from operations for the past two years, along with negative working capital. There can be no assurance that the Company will be able to obtain sufficient funding to complete its business expansion plan or will have sufficient revenues to fund its operations and commitments." A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6ea7 About Chanticleer Holdings Charlotte, N.C.-based Chanticleer Holdings, Inc. (OTC BB: CCLR) -- http://www.chanticleerholdings.com/-- is a publicly traded holding company. It operates two wholly-owned operating subsidiaries: Chanticleer Advisors, an investment manager; and Avenel Ventures, a consulting firm. Additionally, the company owns several minority investments in private companies, including an interest in a convertible note into Hooters of America, Inc. Chanticleer Holdings, Inc. was formed in 2005 as a business development company. In 2008 the Company's shareholders elected to convert to an operating holding company. CHEM RX: Administrative Claims Must Be Filed By Dec. 13 ------------------------------------------------------- With limited exceptions, holders of administrative expense claims arising between May 11, 2009, and Nov. 9, 2010, against Chem RX Corporation n/k/a CRC Parent Corporation, and its debtor- affiliates, must file requests for allowance and payment of those claims by Dec. 13, 2010. As related in the Troubled Company Reporter, the Honorable Mary F. Walrath of approved the $70 million sale of Chem Rx Corp. to PharMerica Corp. Those sale proceeds will be distributed to the Debtors' creditors. The Debtors' first-lien lenders and unsecured creditors are squabbling about how those sale proceeds should be divided up. About Chem RX Corporation Long Beach, N.Y.-based Chem RX Corporation, aka Paramount Acquisition Corp. -- http://www.chemrx.net/-- is a major institutional pharmacy serving the New York City metropolitan area, as well as parts of New Jersey, upstate New York, Pennsylvania and Florida. Chem Rx's client base includes skilled nursing facilities and a wide range of other long-term care facilities. Chem Rx annually provides more than six million prescriptions to more than 69,000 residents of more than 400 institutional facilities. The Company and five affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 10-11567) on May 11, 2010. Dennis A. Meloro, Esq., and Scott D. Cousins, Esq., at Greenberg Traurig, LLP, represent the Company. Cypress Holdings, LLC, served as the Company's financial advisor, and RSR Consulting, LLC, served as the Company's chief restructuring officer. Brunswick Group LLP is the Company's public relations consultant. Grant Thornton LLP is the Company's independent auditor. Lazard Middle Market LLC is the Company's investment banker. Eichen & Dimeglio PC is the Company's tax advisor. Kurtzman Carson Consultants is the Company's claims and notice agent. The Company disclosed $169,690,868 in assets and $178,281,128 in debts as of February 28, 2010. CHRISTIAN LOVE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Christian Love Fellowship Ministries, International dba Genesis Christian Academy dba Berean Bible Center 1601 Stamford Ypsilanti, MI 48198 Bankruptcy Case No.: 10-74467 Chapter 11 Petition Date: November 12, 2010 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Walter Shapero Debtor's Counsel: Lynn M. Brimer, Esq. STROBL & SHARP, PC 300 East Long Lake Road, Suite 200 Bloomfield Hills, MI 48304 Tel: (248) 540-2300 E-mail: lbrimer@stroblpc.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mieb10-74467.pdf The petition was signed by Barbara Hill, director. CLEARWIRE COMMUNICATIONS: Disagreements Cue Moody's Rating Reviews ------------------------------------------------------------------ Moody's Investors Service has placed the ratings for Clearwire Communications LLC under review with direction uncertain. "The rating review with direction uncertain is primarily based on Moody's views about the potential financial and operating implications associated with the on-going disagreements that the company is currently having with its largest shareholder, Sprint," says Moody's Senior Vice President Dennis Saputo. The differences center around Clearwire's retail strategy, wholesale pricing, network expansion plans and future funding needs. At this point in time, the ultimate outcome of these disputes with Sprint remain in doubt and could have a material impact on Clearwire's financial performance. If the dispute lingers and Clearwire does not obtain additional funding, its operating and financial profile may well come under significant pressure, which could have negative implications for the rating. At this point in time Moody's think that Clearwire's funding options are essentially limited to an investment from Sprint or the sale of some of its large spectrum holdings. The sale of spectrum would require Board of Director approval, would take time to close given the regulatory approvals required and would come with restrictions on the use of proceeds. Additionally, Clearwire could attempt to issue new debt or raise equity from an unrelated third party. "However, Moody's believe that due to the size of the necessarry investment, the cost of new debt would be prohibitive and Moody's feel that the likelihood of attracting yet another equity partner is remote given the company's risk profile", continued Saputo. If Sprint and Clearwire quickly come to an agreement and Clearwire receives the funding that it needs to continue rapid expansion of 4G coverage, Clearwire's earnings and financial profile could become stronger than Moody's currently envision and the investment would solidify the strategic importance of Clearwire to Sprint. "We expect the situation to be clarified shortly since Clearwire's cash position, despite implementing various cash conservation measures, is shrinking quickly", concluded Saputo. Ratings Under Review: Clearwire Communications LLC -- Corporate Family Rating - Caa1 -- Probability of Default Rating - Caa2 -- Senior Secured Notes - Caa1 - LGD3 (32%) Other Ratings: Clearwire Communications LLC -- Speculative Grade Liquidity - SGL-2 Moody's most recent rating action on Clearwire was on November 24, 2009, at which time Moody's rated Clearwire's senior secured debt issuance Caa1 and downgraded existing senior secured notes to Caa1 from B3. Clearwire Corporation provides wireless high-speed services to over 50 markets in the U.S. as well as a few markets in Europe. The Company maintains its headquarters in Kirkland, Washington. CNESSEN DAIRY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Cnessen Dairy P.O. Box 153 Hereford, TX 79045 Tel: (806) 578-4578 Bankruptcy Case No.: 10-20758 Chapter 11 Petition Date: November 12, 2010 Court: U.S. Bankruptcy Court Northern District of Texas (Amarillo) Judge: Robert L. Jones Debtor's Counsel: J. Bennett White, Esq. J. BENNETT WHITE, P.C. P.O. Box 6250 Tyler, TX 75711 Tel: (903) 597-4300 Fax: (903) 597-4330 E-mail: sgardner@jbwlawfirm.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $50,000,001 to $100,000,000 The petition was signed by Frank Cnossen, partner. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Deaf Smith Electric -- $119,076 P.O. Box 753 Hereford, TX 79045 J.D. Heiskell & Co. -- $107,346 1616 S. Kentucky, Suite C-400 Amarillo, TX 79102 Lone Star Calf Ranch -- $77,478 4103 County Road E Hereford, TX 79045 Goodin Fuels, Inc. -- $73,859 Armtech Insurance Services -- $68,673 Quality Distillers Grain, LLC -- $64,508 Lone Star Calf Ranch -- $57,745 Quality Distillers Grain, LLC -- $57,345 Lone Star Calf Ranch -- $56,356 Quality Distillers Grain, LLC -- $55,352 Archer Daniels Midland -- $46,219 Walco International - -- $45,961 Central Accounting Walco International - -- $45,144 Central Accounting Top of Texas Gin, LTD -- $43,022 Lone Star Calf Ranch -- $42,472 Standard Dairy Consultants -- $42,306 Archer Daniels Midland -- $39,712 Lone Star Calf Ranch -- $39,623 Lone Star Calf Ranch -- $37,638 Jeremy Pawtzold, Inc. -- $36,963 CNOSSEN DAIRY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Cnossen Dairy P.O. Box 153 Hereford, TX 79045 Tel: (806) 578-4557 Bankruptcy Case No.: 10-20760 Chapter 11 Petition Date: November 12, 2010 Court: U.S. Bankruptcy Court Northern District of Texas (Amarillo) Judge: Robert L. Jones Debtor's Counsel: J. Bennett White, Esq. J. BENNETT WHITE, P.C. P.O. Box 6250 Tyler, TX 75711 Tel: (903) 597-4300 Fax: (903) 597-4330 E-mail: sgardner@jbwlawfirm.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $50,000,001 to $100,000,000 The petition was signed by Frank Cnossen, partner. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Deaf Smith Electric -- $119,076 P.O. Box 753 Hereford, TX 79045 J.D. Heiskell & Co. -- $107,346 1616 S. Kentucky, Suite C-400 Amarillo, TX 79102 Lone Star Calf Ranch -- $77,478 4103 County Road E Hereford, TX 79045 Goodin Fuels, Inc. -- $73,859 Armtech Insurance Services -- $68,673 Quality Distillers Grain, LLC -- $64,508 Lone Star Calf Ranch -- $57,745 Quality Distillers Grain, LLC -- $57,345 Lone Star Calf Ranch -- $56,356 Quality Distillers Grain, LLC -- $55,352 Archer Daniels Midland -- $46,219 Walco International - -- $45,961 Central Accounting Walco International - -- $45,144 Central Accounting Top of Texas Gin, LTD -- $43,022 Lone Star Calf Ranch -- $42,472 Standard Dairy Consultants -- $42,306 Archer Daniels Midland -- $39,712 Lone Star Calf Ranch -- $39,623 Lone Star Calf Ranch -- $37,638 Jeremy Pawtzold, Inc. -- $36,963 COACH AMERICA: S&P Puts 'B-' Rating on CreditWatch Negative ----------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'B-' corporate credit rating, on Coach America Holdings Inc. on CreditWatch with negative implications. Dallas-based Coach, a motor-coach services provider, has been experiencing earnings pressures as a result of the economic downturn in the U.S. Demand has been under pressure in all of its business segments, which include contract services (in which the company provides commuter, work, or school-related transportation), per capita (which includes sightseeing, casino and airport shuttles, and scheduled service offerings), and charter services. Coach has been responding to demand pressures by reducing costs and improving internal operating efficiencies. Despite these efforts, however, earnings remain weak. "S&P expects operating performance to improve as the economy recovers," said Standard & Poor's credit analyst Lisa Jenkins. "However, S&P believes the recovery will take some time and that Coach's credit metrics will remain weak over the coming year." S&P also expects absolute debt levels to remain high, which makes Coach especially vulnerable to fluctuations in earnings and cash flow. S&P views Coach's liquidity position as less than adequate, given S&P's concerns over a potential breach of covenants in the near term. COMCAM INTERNATIONAL: Posts $17,100 Net Loss in Q3 2010 ------------------------------------------------------- ComCam International, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $17,131 on $1.0 million of revenue for the three months ended September 30, 2010, compared with a net loss of $211,681 on $1,620 of revenue for the same period last year. As of September 30, 2010, the Company had an accumulated deficit of $7.4 million. In addition, the Company had a working capital deficit of $556,489 as of September 30, 2010. The Company's balance sheet at September 30, 2010, showed $2.1 million in total assets, $2.5 million in total liabilities, and a stockholders' deficit of $438,243. As reported in the Troubled Company Reporter on April 24, 2010, Pritchett, Siler & Hardy, P.C., in Salt Lake City, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted of the Company's substantial losses and working capital deficit. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6ea8 About ComCam International West Chester, Pa.-based ComCam International, Inc., is both a network solutions innovator and a provider of fusion technologies for security products and modern networks. The Company's proprietary digital wireless camera systems and security integration solutions address complex command-and-control applications for rapid-deployment military situations, borders, ports, airports, and detention facilities. COMMERCIAL VEHICLE: Board Member Leaves Due to Time Constraints --------------------------------------------------------------- Commercial Vehicle Group Inc. said that Scott D. Rued, a member of its Board of Directors since 2001, has retired due to time constraints associated with other business interests. "[Mr. Scott's] experience and contribution to CVG over the last ten years has been invaluable and is reflected in the many successes we have achieved to date. We wish him continued success in his future business ventures," stated Mervin Dunn, President and Chief Executive Officer of Commercial Vehicle Group, Inc. About Commercial Vehicle Group New Albany, Ohio-based Commercial Vehicle Group, Inc., (Nasdaq: CVGI) supplies fully integrated system solutions for the global commercial vehicle market, including the heavy-duty truck market, the construction and agricultural markets, and the specialty and military transportation markets. The Company has facilities located in the United States in Arizona, Indiana, Illinois, Iowa, North Carolina, Ohio, Oregon, Tennessee, Virginia and Washington and outside of the United States in Australia, Belgium, China, Czech Republic, Mexico, Ukraine and the United Kingdom. * * * Commercial Vehicle carries a 'Caa2' Corporate Family Rating and 'Caa2/LD' Probability of Default Rating from Moody's. It has 'CCC+' issuer credit ratings from Standard & Poor's. In mid-October 2010, Moody's Investors Service upgraded Commercial Vehicle Group, Inc.'s Corporate Family Rating to Caa1 from Caa2, and revised the ratings outlook to positive from negative. These positive actions recognize the continuing improvement in the build rates for commercial vehicles and the realized benefits of the company's operating and capital restructurings. According to Moody's, the Caa1 CFR reflects modest size, high debt leverage, and exposure to highly cyclical commercial vehicle end markets. Demand for commercial vehicle components is sensitive to both economic cycles and regulatory implementation schedules. COMMUNITY CENTRAL: Posts $4.8MM Q3 Loss; Bank Signs Consent Order ----------------------------------------------------------------- Community Central Bank Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $4.8 million on $3.3 million of net interest income for the three months ended September 30, 2010, compared with a net loss of $2.4 million on $3.2 million of net interest income for the same period last year. The Company's balance sheet at September 30, 2010, showed $513.7 million in total assets, $501.6 million in total liabilities, and stockholders' equity of $12.1 million. Deposits at banking unit Community Central Bank decreased $32.6 million during the third quarter of 2010. The Company attributed the decrease to withdrawals of deposits by customers concerned about the financial stability of the Bank from the media coverage of the disappearance and death of David A. Widlak, the CEO of the Company and the Bank. Mr. Widlak disappeared on September 20, 2010, and was later found dead. According to the filing, the Bank was able to utilize a non- brokered internet time deposit service and an advance from the Federal Home Loan Bank of Indianapolis to offset the loss in deposits (non-brokered) during the first two weeks following Mr. Widlak's disappearance. The total amount of internet time deposits gathered from September 20, 2010, to September 30, 2010, represented roughly $30.8 million. The Bank increased Federal Home Loan Bank advances by $10 million during the aforementioned time frame. "As of September 30, 2010, due to the Corporation's significant net loss from operations in the three and nine months ended September 30, 2010, deterioration in the credit quality of the loan portfolio, and the decline in the level of its regulatory capital to support operations, there is substantial doubt about the Corporation's ability to continue as a going concern," the Corporation said in the filing. The Bank is currently subject to a "consent order" with the Federal Deposit Insurance Corporation and the Michigan Office of Financial and Insurance Regulation and is "significantly undercapitalized" under the FDIC's prompt corrective action (PCA) rules and accordingly is operating under significant operating restrictions. The Consent Order requires Community Central Bank to take corrective measures in a number of areas to strengthen and improve the Bank's financial condition and operations. The Consent Order is effective as of November 1, 2010. By entering into the Consent Order, the Bank is directed and has agreed to increase board oversight and conduct an independent study of management, improve regulatory capital ratios, charge-off certain classified assets, reduce its level of loan delinquencies and problem assets, limit lending to certain borrowers, revise lending and collection policies, adopt and implement new profit, strategic and liquidity plans, and correct loan underwriting and credit administration deficiencies. The Consent Order also requires the Bank to obtain prior regulatory approval before the payment of cash dividends or the appointment of any senior executive officers or directors. The Bank also is not allowed to accept brokered deposits without a waiver from the FDIC and must comply with certain deposit rate restrictions. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6e99 About Community Central Community Central Bank Corporation is the holding company for Community Central Bank in Mount Clemens, Michigan. The Bank opened for business in October 1996 and serves businesses and consumers across Macomb, Oakland, St. Clair and Wayne counties with a full range of lending, deposit, trust, wealth management and Internet banking services. The Bank operates four full service facilities in Mount Clemens, Rochester Hills, Grosse Pointe Farms and Grosse Pointe Woods, Michigan. Community Central Mortgage Company, LLC, a subsidiary of the Bank, operates locations servicing the Detroit metropolitan area and central and northwest Indiana. River Place Trust and Community Central Wealth Management are divisions of Community Central Bank. Community Central Insurance Agency, LLC, is a wholly owned subsidiary of Community Central Bank. The Corporation's common shares currently trade on The NASDAQ Capital Market under the symbol "CCBD". COMSTOCK MINING: Incurs $8.7 Million Net Loss in Q3 2010 -------------------------------------------------------- Comstock Mining Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $8.7 million for the three months ended September 30, 2010, compared with a net loss of $2.7 million for the same period last year. The Company had no revenues from operations during the three and nine months ended September 30, 2010. The Company's balance sheet at September 30, 2010, showed $5.6 million in total assets, $46.6 million in total liabilities, and a stockholders' deficit of $41.0 million. As reported in the Troubled Company Reporter on April 15, 2010, Jewett, Schwartz, Wolfe & Associates expressed substantial doubt about Goldspring, Inc.'s ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has operating and liquidity concerns and has incurred historical net losses approximating $55.0 million as of December 31, 2009. The Company also used cash in operating activities of $3.6 million in 2009. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6eac 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. CPG INTERNATIONAL: S&P Affirms 'B-' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its ratings, including its 'B-' corporate credit rating, on Scranton, Pa.-based building products manufacturer CPG International Inc. All ratings are removed from CreditWatch where they were placed with positive implications on Sept. 1, 2010. The rating outlook is positive. "The ratings and outlook reflect S&P's view that CPG's credit measures will continue to improve over the next year because of a gradual recovery in housing markets and increased market penetration of its AZEK building products," said Standard & Poor's credit analyst Toby Crabtree. "Specifically, S&P expects adjusted total debt to EBITDA could be between 4x and 5x during this period, which S&P considers to be more in-line with a higher rating given the company's weak business risk profile." Still, a significant portion of the company's capital structure matures in 2012. While S&P expects the company to address its debt maturities over the next several quarters, S&P believes a higher rating is unlikely until such an event occurs. S&P's ratings also incorporate its view of CPG's weak business risk profile reflected in its exposure to challenging residential and nonresidential construction markets and volatile resin costs. CREDIT ONE: Posts $24,600 Net Loss in September 30 Quarter ---------------------------------------------------------- Credit One Financial, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $24,590 on $219,682 of revenue for the three months ended September 30, 2010, compared with a net loss of $40,038 on $1.2 million of revenue for the same period last year. The Company also has an accumulated deficit of $822,033 as of September 30, 2010, and may have to seek loans or sale of its securities to raise cash to meet its cash needs, the Company said in the filing. The Company's balance sheet at September 30, 2010, showed $5.2 million in total assets, $1.2 million in total liabilities, and stockholders' equity of $4.0 million. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6eb8 New York City-based Credit One Financial, Inc. is primarily engaged in the processing and distribution of mineral products, primarily graphite products, in China. The Company's current operations began in April 2009. CREDIT-BASED ASSET: JPM OKs Use of $8.2MM Cash; Court Nod Sought ---------------------------------------------------------------- Credit-Based Asset Servicing And Securitization LLC, et al., seek authority from the U.S. Bankruptcy Court for the Southern District of New York to use the cash securing their obligations to prepetition lenders. The Debtors financed their prepetition activities with multiple repurchase agreements of mortgage loans and mortgage backed securities, and a variety of secured and unsecured debt. The Debtors' principal secured debt consisted of a $1,855,000,000 senior secured credit facility syndicated among a number of lenders and secured by first-priority liens on and security interests in substantially all of the Debtors' assets and junior liens on and security interests in the Debtors' assets covered by the Repurchase Agreements. JPMorgan Chase Bank, N.A., as administrative agent under the Senior Credit Facility, and participant lenders have agreed, inter alia, to permit the Debtors to use up to $8.2 million of the cash proceeds of the "remaining collateral". The vast majority of the collateral for the Senior Credit Facility has been sold or foreclosed upon and the proceeds thereof applied to reduce the balance of the Senior Credit Facility to its current principal balance of approximately $170 million. The Remaining Collateral consists principally of (i) various subordinated tranches of mortgage-backed securities, including the Trust Securities, (ii) the management rights with respect to certain collateralized bond and debt obligation issuances, (iii) whole loans, (iv) REOs, (v) claims against third parties, (vi) deposits with surety bond providers, (vii) furniture, fixtures, equipment and various forms of intellectual property, (viii) receivables for the unused amount, if any, of professional retainers, and (ix) cash collateral on deposit in the Debtors' centralized cash operating account. Peter S. Partee, Sr., Esq., at Hunton & Williams LLP, explains that the Debtors need access to the cash collateral to fund their Chapter 11 case, pay suppliers and other parties. In exchange for using the cash collateral, the Debtors propose to grant the Administrative Agent and the senior lenders replacement security interest in and liens upon the Senior Credit Facility Collateral and any proceeds thereon with the same priority and rights as the liens that secured the Senior Credit Facility Debt to the extent of the post-petition diminution in value of the remaining collateral. The Debtors will also grant the Administrative Agent and the senior lenders administrative superpriority claims with priority in payment over any and all other administrative expenses in the Chapter 11 cases to the extent of the post-petition diminution in value of the remaining collateral. The Debtors will provide the Administrative Agent and the senior lenders with reports in compliance with the provisions of the interim court order. The Administrative Agent is entitled to credit bid, on behalf of the senior lenders, at prices determined after consultation with the Debtors, for any Senior Credit Facility collateral proposed to be sold by the Debtors. About Credit-Based Asset Credit-Based Asset Servicing & Securitization LLC is a subprime mortgage investor based in New York. C-Bass is a joint venture, owned in part by units of mortgage insurers MGIC Investment Corp. and Radian Group Inc. C-Bass and its units filed for Chapter 11 bankruptcy protection on November 12, 2010 (Bankr. S.D.N.Y. Lead Case No. 10-16040). C- BASS estimated its assets at $10 million to $50 million and debts at more than $1 billion. Peter S. Partee, Esq., Richard P. Norton, Esq., Robert A. Rich, Esq., and Scott Howard Bernstein, at Hunton & Williams LLP, assist the Debtors in their restructuring effort. Donlin, Recano & Company is the claims and notice agent. Affiliates that filed separate Chapter 11 petitions are C-BASS CBO Holding LLC, C-BASS Credit Corp., C-BASS Investment Management LLC, NIM I LLC, Pledged Property II LLC, Starfish Management Group LLC, and Sunfish Management Group LLC. CREDIT-BASED ASSET: Proposes FIG-Led Auction for CM Business ------------------------------------------------------------ Credit-Based Asset Servicing and Securitization LLC, et al., has a contract to their collateral management business, to FIG LLC, absent higher and better bids for the assets. Accordingly, C-BASS asks for approval from the U.S. Bankruptcy Court for the Southern District of New York of the proposed bidding and auction procedures for thee CM Business. Under the asset purchase agreement, unless it is outbid at a bankruptcy court-sanctioned auction, FIG will buy the CM Business from the Debtors for $2.4 million, less (i) the deposit of $100,000; (ii) the fee basis reduction amount, and (iii) any management fees paid to the Debtors subsequent to January 1, 2011, but prior to the closing. The Purchase Agreement requires submission by FIG of a good faith deposit in the amount of $100,000. The Debtors or FIG may terminate the Purchase Agreement if Closing will not have occurred and if the drop dead date has not occurred by January 31, 2011. FIG will be entitled to a break-up fee in an amount equal to $100,000 and an expense reimbursement for the reasonable and documented out-of-pocket costs and expenses in connection with negotiation, documentation and implementation of the Purchase Agreement up to a maximum amount of $75,000, in the event that the Purchase Agreement is terminated, or the assets aren't sold to FIG and are instead sold to a third party buyer. If another party submits an offer to buy the assets, an auction will be held on December 14, 2010, at 10:00 a.m. (prevailing Eastern Time). Any person or entity interested in participating in the Auction must submit a qualifying bid by December 13, 2010, at noon (prevailing Eastern Time). To participate in the bidding process, each potential bidder must be prepared to enter into a legally binding asset purchase agreement or similar agreement for the acquisition of the CM Business on terms and conditions no less favorable to the Debtors than the terms and conditions contained in the Purchase Agreement, and with a purchase price of no less than the Proposed Purchaser's purchase price plus the Break-Up Fee, the Expense Reimbursement, and $100,000. The bid must include a $100,000 cash deposit by wire transfer. Qualifying Bidders may submit subsequent bids to the initial highest bid and all subsequent bids must be stated in an amount exceeding each prior bid by $100,000 in purchase price consideration. If an Auction is conducted, the Qualifying Bidder with the next highest or otherwise best qualifying bid, as determined by the Debtors in the exercise of its business judgment at the Auction and in consultation with the Committee and the Administrative Agent, will be required to serve as a back-up bidder and keep the bid open and irrevocable until 24 hours after the closing of the sale transaction with the Successful Bidder. Following the sale hearing, if the Successful Bidder fails to consummate an approved sale because of a breach or failure to perform on the part of the Successful Bidder, the Back-Up Bidder will be deemed to be the new Successful Bidder. The Debtors are required to make their best efforts to obtain entry of an order approving the sale of the CM Business by December 31, 2010. The senior lenders have consented to the sale of the CM Business, The Debtors request that the Court schedule a sale hearing by December 22, 2010 at 10:00 a.m. (prevailing Eastern Time), but in no event later than December 29, 2010, to consider approval of the Purchase Agreement and the sale contemplated thereby, or the approval of any higher or better offer, if any, resulting from an Auction. The Debtors requests that objections, if any, to the sale or an assumption and cure objection be filed with the Clerk of the Bankruptcy Court for the Southern District of New York by 4:00 p.m. (prevailing Eastern Time) on December 15, 2010. The Debtors propose that a hearing be held on November 19, 2010, at 10:00 a.m. (prevailing Eastern Time) for the approval of the bidding procedures. The Debtors propose that the deadline for the objections to the approval of bidding procedures be November 18, 2010, at 4:00 p.m. (prevailing Eastern Time). A copy of which asset purchase agreement with FIG is available for free at: http://bankrupt.com/misc/CREDIT-BASED_purchasepact.pdf About Credit-Based Asset Credit-Based Asset Servicing & Securitization LLC is a subprime mortgage investor based in New York. C-Bass is a joint venture, owned in part by units of mortgage insurers MGIC Investment Corp. and Radian Group Inc. C-Bass and its units filed for Chapter 11 bankruptcy protection on November 12, 2010 (Bankr. S.D.N.Y. Lead Case No. 10-16040). C- BASS estimated its assets at $10 million to $50 million and debts at more than $1 billion. Peter S. Partee, Esq., Richard P. Norton, Esq., Robert A. Rich, Esq., and Scott Howard Bernstein, at Hunton & Williams LLP, assist the Debtors in their restructuring effort. Donlin, Recano & Company is the claims and notice agent. Affiliates that filed separate Chapter 11 petitions are C-BASS CBO Holding LLC, C-BASS Credit Corp., C-BASS Investment Management LLC, NIM I LLC, Pledged Property II LLC, Starfish Management Group LLC, and Sunfish Management Group LLC. CREDIT-BASED ASSET: Taps Donlin Recano as Noticing, Claims Agent ---------------------------------------------------------------- Credit-Based Asset Servicing And Securitization LLC, et al., ask for authorization from the U.S. Bankruptcy Court for the Southern District of New York to employ Donlin, Recano & Company, Inc., as noticing, claims and balloting agent. Donlin Recano will, among other things: (a) notify all potential creditors of the filing of the Debtors' bankruptcy petitions and of the setting of the date for the first meeting of creditors; (b) maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs listing the Debtors' known creditors and the amounts owed thereto; (c) notify all potential creditors of the existence and amount of their respective claims, as evidenced by the Debtors' books and records and as set forth in the Schedules; and (d) furnish a notice of the last day for the filing of proofs of claim and a form for the filing of a proof of claim, after the notice and form are approved by the Court. Donlin Recano will be paid based on the rates of its professionals: Clerical $45-$65 Technology/Programming Consultant $155-$195 Junior Case Manager $140-$175 Senior Case Manager $185-$245 Consultant $250-$285 Senior Consultant $295 A copy of Donlin Recano's retention agreement with the Debtor is available for free at: http://bankrupt.com/misc/CREDIT-BASED_claimsagentservicepact.pdf Louis A. Recano, Donlin Recano's CEO, assures the Court that the firm is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. About Credit-Based Asset Credit-Based Asset Servicing & Securitization LLC is a subprime mortgage investor based in New York. C-Bass is a joint venture, owned in part by units of mortgage insurers MGIC Investment Corp. and Radian Group Inc. C-Bass and its units filed for Chapter 11 bankruptcy protection on November 12, 2010 (Bankr. S.D.N.Y. Lead Case No. 10-16040). C- BASS estimated its assets at $10 million to $50 million and debts at more than $1 billion. Peter S. Partee, Esq., Richard P. Norton, Esq., Robert A. Rich, Esq., and Scott Howard Bernstein, at Hunton & Williams LLP, assist the Debtors in their restructuring effort. Affiliates that filed separate Chapter 11 petitions are C-BASS CBO Holding LLC, C-BASS Credit Corp., C-BASS Investment Management LLC, NIM I LLC, Pledged Property II LLC, Starfish Management Group LLC, and Sunfish Management Group LLC. CREDIT-BASED ASSET: WTC, an Indenture Trustee, Has No Exposure -------------------------------------------------------------- Wilmington Trust is not providing credit to Credit-Based Asset Servicing and Securitization LLC, which filed for Chapter 11 protection on November 12, 2010, in the United States Bankruptcy Court for the Southern District of New York. Recent news reports may have led readers to believe that Wilmington Trust is providing credit to C-Bass. In fact, Wilmington Trust is not a lender to C-Bass, despite the bankruptcy filing's listing of Wilmington Trust among the largest unsecured creditors of C-Bass. Wilmington Trust is serving as indenture trustee for holders of approximately $234 million of debt issued by C-Bass. Wilmington Trust has no credit exposure to C-Bass or any of its subsidiaries. Through its CCS business, Wilmington Trust is paid a fee for providing these services. The bankruptcy filing of C-Bass has no effect on Wilmington Trust's balance sheet, credit quality, or financial condition. Wilmington Trust's CCS business offers institutional trustee, agency, asset management, retirement plan, and administrative services for clients worldwide who use capital market financing structures, as well as those who seek to establish or maintain nexus, or legal residency, for special purpose entities. Because Wilmington Trust does not underwrite securities offerings or provide investment banking services, it is able to deliver corporate trust services that are conflict-free. About Wilmington Trust Wilmington Trust Corporation is a financial services holding company that provides Regional Banking services throughout the mid-Atlantic region, Wealth Advisory services to high-net-worth clients in 36 countries, and Corporate Client services to institutional clients in 89 countries. Its wholly owned bank subsidiary, Wilmington Trust Company, which was founded in 1903, is one of the largest personal trust providers in the United States and the leading retail and commercial bank in Delaware. Wilmington Trust Corporation and its affiliates have offices in Arizona, California, Connecticut, Delaware, Florida, Georgia, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Pennsylvania, South Carolina, Vermont, the Cayman Islands, the Channel Islands, London, Dublin, Frankfurt, Luxembourg, and Amsterdam. About C-BASS Credit-Based Asset Servicing & Securitization LLC is a subprime mortgage investor based in New York. C-Bass is a joint venture, owned in part by units of mortgage insurers MGIC Investment Corp. and Radian Group Inc. C-Bass and its units filed for Chapter 11 bankruptcy protection on November 12, 2010 (Bankr. S.D.N.Y. Lead Case No. 10-16040). C- BASS estimated its assets at $10 million to $50 million and debts at more than $1 billion. Peter S. Partee, Esq., Richard P. Norton, Esq., Robert A. Rich, Esq., and Scott Howard Bernstein, at Hunton & Williams LLP, assist the Debtors in their restructuring effort. Affiliates that filed separate Chapter 11 petitions are C-BASS CBO Holding LLC, C-BASS Credit Corp., C-BASS Investment Management LLC, NIM I LLC, Pledged Property II LLC, Starfish Management Group LLC, and Sunfish Management Group LLC. CRYSTAL CATHEDRAL: US Trustee Balks at $156K Annual Pay for CFO --------------------------------------------------------------- A federal watchdog is objecting to Crystal Cathedral Ministries' proposal to pay its chief financial officer an annual salary of $156,109 in light of the church's financial difficulties, Dow Jones' Small Cap reports. According to the report, in an objection filed Friday with the court overseeing Crystal Cathedral's bankruptcy case, assistant U.S. trustee Frank M. Cadigan said the Garden Grove, Calif., church already employs a full-time accounting staff and questioned why it would also need to employ Fred Southard as CFO and director of finance. "Mr. Southard's role may be duplicative and discovery needs to be conducted in order to determine whether Mr. Southard's continued employment is necessary," the report quoted Mr. Cadigan, whose task it is to ensure bankruptcy laws are followed, as saying. The assistant U.S. trustee also questioned the annual compensation, which consists of $12,242 in salary and a $132,019 housing allowance, especially since Crystal Cathedral is in bankruptcy, the report adds. About Crystal Cathedral Garden Grove, California-based Crystal Cathedral Ministries is a megachurch founded by television evangelist Robert Schuller. The church, known for its television show "The Hour of Power". Crystal Cathedral filed for Chapter 11 bankruptcy protection on October 18, 2010 (Bankr. C.D. Calif. 10-24771). March J. Winthrop, Esq., who has an office in Newport Beach, California, assists the Debtor in its restructuring effort. The Debtor estimated assets and debts at $50 million to $100 million in its Chapter 11 petition. CYNERGY DATA: Plan Confirmation Hearing Scheduled for Dec. 21 ------------------------------------------------------------- According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, Cynergy Data LLC, now formally named CD Liquidation Co. Plus LLC, scheduled a confirmation hearing for Dec. 21 when the bankruptcy judge approved the disclosure statement on Nov. 12 explaining the liquidating Chapter 11 plan filed in September. Cynergy sold the business to private-equity investor ComVest Group for $81 million, including $14 million in subordinated debt payable by the purchaser. Under the liquidating Chapter 11 plan, remaining assets won't pay anything aside from lawsuit recoveries to anyone except holders of first-lien debt. The plan is founded on a settlement with secured lenders. Mr. Rochelle relates that in case the plan doesn't fly in December, the bankruptcy judge extended the company's exclusive right to propose a plan until Jan. 11. About Cynergy Data Launched in 1995, Cynergy Data was a merchant credit card processing service provider. The Company and two affiliates -- Cynergy Data Holdings, LLC, and Cynergy Prosperity Plus, LLC -- filed for Chapter 11 bankruptcy protection on September 1, 2009 (Bankr. D. Del. Case No. 09-13038). Cynergy Data said that it had assets of $109.5 million against debts of $186.1 million as of June 30, 2009. The Company's legal advisor is Nixon Peabody LLP; its financial and restructuring advisor is CM&D Management Services LLC; its industry expert is Unicorn Partners, LLC; and its investment bankers are Stifel, Nicolaus & Company and Peter J. Solomon Company. The Company also hired Pepper Hamilton LLP as bankruptcy and restructuring counsel. Charles D. Moore of Conway MacKenzie, Inc., serves as chief restructuring officer. Kurtzman Carson & Consultants LLC serves as claims and notice agent. Cynergy Data filed for Chapter 11 to complete the sale of all of its assets to an affiliate of The ComVest Group. The $81 million sale was completed October 2009. The Debtor was renamed to Liquidation Co. LLC following the sale. DYNEGY INC: Blackstone Raises Buyout Offer to $5 a Share -------------------------------------------------------- Steve Gelsi, reporting for MarketWatch in New York, says Blackstone Group L.P. on Tuesday raised its buyout offer for Dynegy Inc. by 11% to $5 a share, a day before a key shareholder vote on the proposed deal. Blackstone Group said the cash price represents its "best and final offer" and remains subject to agreement to the terms of an amended deal. MarketWatch, citing The Wall Street Journal, reports the higher offer from Blackstone Tuesday came alongside reports that Seneca Capital, a hedge fund that's been fighting the deal, may bid at least $6 a share for Dynegy if shareholders nix the Blackstone bid in a vote Wednesday. Citing unnamed sources familiar with the deal, the WSJ said Seneca Capital is talking to RRI Energy and other parties about teaming up to make an offer for Dynegy. On Tuesday, Seneca urged Dynegy shareholders to vote against the amended $5 per share merger proposal as "it is still the WRONG PRICE at the WRONG TIME for the WRONG REASONS." Seneca has presented a detailed investment case to the marketplace supporting a valuation for Dynegy in excess of $6 per share rising to $16-$18 per share as power prices recover. Seneca believes the increased merger consideration supports Seneca's contention that liquidity is not an issue for Dynegy and that issuing equity would be the wrong decision for shareholders. Seneca also believes that key fundamental factors contributing more than $3.50/sh incremental value to Dynegy's eight-year-low pre-transaction stock price, will provide strong stock support after the proposed deal is defeated. Seneca believes the fact that Dynegy management stands to receive in the aggregate only approximately $400,000 of incremental change of control compensation as a result of this increased offer illustrates their misalignment with achieving the best outcome for shareholders (90% of the $38 million change of control compensation has no relation to the deal price). Seneca said it has performed substantial due diligence on Dynegy, including a thorough review of the company and its assets with outside consultants and former industry management teams. That diligence effort has underpinned Seneca's confidence in its current position of more than 12% of the economic interest in the company. Seneca also noted that, "a better question regards Dynegy's scorched-earth defense of a proposed sale at $4.50 per share when the buyer now proves willing to pay $5.00 per share and, just one year before, the company bought back nearly 30% of its own stock at $9.65 per share." Also on Tuesday, Carlo Icahn indicated he will still be voting against the proposed acquisition of Dynegy by Blackstone. "I believe that, even at $5.00 per share, the proposed Blackstone acquisition undervalues Dynegy. Today's $0.50 per share increase, coming only one day after Blackstone stated that the $4.50 price is 'a full and fair valuation' reassures my belief that the Dynegy/Blackstone transaction leaves too much shareholder value on the table for Blackstone. I have also considered that in a November 15, 2010 report JP Morgan stated that it is 'introducing a December 2011 price target of $7, up from our prior December price target of $5.00.' Mr. Icahn also pointed out that under the merger agreement between Dynegy and Blackstone, Blackstone was granted the right to match a superior offer, and to enter into an exclusive arrangement with NRG, who before that time had been directly negotiating a potential transaction with Dynegy. Blackstone was also given expenses and breakup fees worth over 11% of the shareholder consideration. "In my opinion, all of these features of the proposed Dynegy/Blackstone transactions acted to discourage other potential bidders, reduce the value to be received by shareholders and strengthen my resolve to vote 'no'. I believe that if the transaction is voted down, then in a new, open process, many bids would emerge for Dynegy assets, and I may myself be a bidder -- something I would not have done in the restrictive context of the Dynegy/Blackstone transaction, with its unprecedented breakup fee," Mr. Icahn said. Mr. Icahn added that "I am not concerned about supposed 'liquidity' issues at Dynegy and continue to stand by my previously announced proposal to make financing available to Dynegy." Mr. Icahn said he would press Dynegy to begin a new, open process to sell its assets, free of the elements that have led to the undervalued proposal now before shareholders. The shareholder vote is scheduled for Wednesday. MarketWatch notes Mr. Icahn last week had offered to help line up a credit line of up to $2 billion for Dynegy if it runs into any financial problems should the merger fall through. Financial terms of the $2 billion credit line were not disclosed in Mr. Icahn's filing. MarketWatch also notes Mr. Icahn recently raised his holdings in Dynegy to 15.59 million shares from 12 million shares on Oct. 12, according to a filing with regulators. On Tuesday, Granite Ridge Holdings, LLC, the indirect owner of the Granite Ridge Power Station in Londonderry, New Hampshire, indicated that Jeffrey S. Stein of New York, a member of the Board of Directors of the Company, has been asked by Seneca Capital to serve as a possible nominee for the Board of Directors of Dynegy Inc. "The Company is aware of this request and has no objection to Mr. Stein's candidacy," Granite said. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE:DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Dynegy Inc. and Dynegy Holdings each has a 'B-' issuer default rating from Fitch. In October 2010, Moody's Investors Service lowered the ratings of Dynegy Holdings, including its Corporate Family Rating, to Caa1 from B3 along with the ratings of various affiliates or parent company Dynegy Inc. The rating outlook for DHI and Dynegy remains negative. The rating action follows the expiration of the 40-day "go shop" period, increasing the probability that Dynegy will be acquired by an affiliate of The Blackstone Group L.P. in a transaction valued at approximately $4.7 billion, including the assumption of existing debt. Moody's said Dynegy's financial profile is expected to be quite fragile, particularly during 2011 and 2012, when the company is projected to generate both negative operating cash flow and negative free cash flow due to weak operating margins and the required funding of their capital investment programs. To the extent that the transactions with Blackstone and NRG are not completed, Moody's said downward rating pressure at DHI and Dynegy will continue to exist given the weak financial prospects for the company over the next few years coupled with the liquidity concerns. DYNEGY INC: Rejects Icahn's Funding Offer, Questions Motive ----------------------------------------------------------- Dynegy Inc. on Monday said Carl Icahn's offer -- to help line up a credit line of up to $2 billion for Dynegy if it runs into any financial problems should the Blackstone merger fall through -- does not address the Company's liquidity issues. While the non- binding Icahn credit facility proposal would fulfill certain short-term capital needs, Dynegy told shareholders in a statement the Icahn offer does nothing to address the Company's long-term funding requirements. Financial terms of the $2 billion credit line were not disclosed. Dynegy noted that the terms of Mr. Icahn's facility cannot be fully defined or finalized until well after the special shareholders' meeting on November 17. Dynegy believes it would be able to access the credit markets for a credit facility -- though smaller and more expensive than the current facility -- to satisfy short-term funding needs, making any Icahn credit facility unnecessary. Dynegy said this was specifically considered its Board of Directors in analyzing the Blackstone transaction. Dynegy said it requires access to two types of capital. In the short-term, Dynegy requires funding of collateral, working capital and other temporary cash needs. Dynegy's long-term capital needs require funding to address the projected $1.6 billion of negative free cash flow over the next 5 years1 resulting from the significant change in the U.S. natural gas market and significant environmental enforcement uncertainty. All of this non- discretionary cash will come out before any value can accrue to the common stockholder. "When, inevitably, Dynegy would need to restructure, extend or replace the Icahn credit facility, Mr. Icahn would be the sole senior secured claimant in our capital structure. The Icahn position would be senior to all common stockholders and senior to all Dynegy bondholders. This could provide Mr. Icahn with effective control over the restructuring of Dynegy. In certain restructuring scenarios, Dynegy stockholders could receive no consideration for their investment in Dynegy. Given that the non- binding Icahn credit facility proposal requires an upfront payment of $20 million (an approximate 33% return on investment for Mr. Icahn), Dynegy stockholders could in effect be paying Mr. Icahn today to take control of Dynegy in approximately 18 months, absent a replacement merger or acquisition to replace the Blackstone transaction," Dynegy said. Dynegy also pointed out Mr. Icahn could have made his proposal months ago. "It appears to Dynegy that Mr. Icahn is attempting to derail the Blackstone transaction by making the non-binding Icahn credit facility proposal, which he can withdraw or revoke at any time. Dynegy cannot be sure of Mr. Icahn's motivations, but Dynegy believes he has made this non-binding proposal in order to gain contingent control of Dynegy. If the binding Blackstone transaction is not approved, there is no guarantee (or reasonable expectation) that any other party will make an offer for Dynegy in excess of the current offer. Virtually every sell-side analyst appears to have concluded that the value Blackstone is offering is superior to the risk of a failed transaction. In addition, the nation's leading proxy advisory firm, Institutional Shareholder Services, has concluded that absent the transaction with Blackstone, Dynegy stock would be trading at approximately $2.66 per share. Blackstone's offer represents a 69% premium to this ISS estimate," Dynegy said. Dynegy warned shareholders: "If you oppose the Blackstone transaction, you risk not only diminishing stockholder value in the near- to mid-term; you also risk putting Mr. Icahn in a position to make an offer below the current Blackstone offer." About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE:DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Dynegy Inc. and Dynegy Holdings each has a 'B-' issuer default rating from Fitch. In October 2010, Moody's Investors Service lowered the ratings of Dynegy Holdings, including its Corporate Family Rating, to Caa1 from B3 along with the ratings of various affiliates or parent company Dynegy Inc. The rating outlook for DHI and Dynegy remains negative. The rating action follows the expiration of the 40-day "go shop" period, increasing the probability that Dynegy will be acquired by an affiliate of The Blackstone Group L.P. in a transaction valued at approximately $4.7 billion, including the assumption of existing debt. Moody's said Dynegy's financial profile is expected to be quite fragile, particularly during 2011 and 2012, when the company is projected to generate both negative operating cash flow and negative free cash flow due to weak operating margins and the required funding of their capital investment programs. To the extent that the transactions with Blackstone and NRG are not completed, Moody's said downward rating pressure at DHI and Dynegy will continue to exist given the weak financial prospects for the company over the next few years coupled with the liquidity concerns. EL PASO: Fitch Affirms 'BB+' Issuer Default Ratings --------------------------------------------------- Fitch Ratings has affirmed the ratings of El Paso Corp. and its core pipeline and exploration and production subsidiaries. The Rating Outlook is Stable. Approximately $11.4 billion in debt is affected by the rating action. The EP rating affirmation is reflective of the cash flow stability and low relative business risk profile of the company's interstate pipeline franchise, as well as the hedge positions and cost improvements at the company's upstream business. The ratings recognize that EP is in the middle of a transformative capital spending plan which will significantly increase both the size and scope of, primarily, its pipeline franchise. Fitch notes that this spending program is weighing on EP metrics as the company works towards completing its significant project backlog. However, the ratings reflect Fitch's belief that once completed the pipeline and LNG projects should provide adequate, incremental, sustainable cash flow and earnings and allow EP the ability and flexibility to pay down some of its obligations. EP is in the middle of a multi-year $8 billion capital expenditure cycle, which will see EP grow its pipeline business significantly. Fitch notes that these pipeline and LNG projects on a consolidated basis will have over 90% of their revenue derived from capacity reservation charges with primarily investment grade counterparties, which help to mitigate commodity price/volume exposure and lower counterparty risk. Funding for the projects is being completed from a combination of operating cash flow, additional debt issuances on a project financing basis, equity issuances primarily through dropdowns to EP's pipeline Master Limited Partnership, El Paso Pipeline Partners (Fitch Issuer Default Rating 'BBB-'), and through asset sales. Fitch expects that EP's consolidated credit metrics will show relative weakness over the course of the growth capital spending, but metrics should rebound to more rating appropriate levels as the incremental EBITDA and cash flow generated by the new projects offset additional debt the company needs to take on to complete the projects. Some of the incremental debt will be non-recourse to EP. Fitch expects that as capital expenditure needs are met and to the extent that EP continues to dropdown assets into EPB that any excess proceeds from such transactions would be used to reduce the parent company's substantial debt. Fitch expects EP's leverage on a consolidated basis to approximate 4.7 times in 2011 with operating EBITDA/interest expense coverage of roughly 3.0x based on Fitch estimates. For 2012, Fitch expects EP's leverage metrics to improve to roughly 4.1x on a consolidated basis with EBITDA interest coverage of roughly 3.4x. Other considerations regarding EP's capital spending include construction and cost inflation risk, which remains a concern for EP's planned pipeline projects. Fitch notes that construction on the Ruby pipeline has been delayed which has increased costs on that project, roughly 10% to 15%. Offsetting some of this increase has been EP's completion of some of its other projects below budget. Fitch believes that capital costs will be roughly in line with revised management expectation of a roughly 5% increase, as EP works through its project backlog, but notes that a more meaningful escalation in costs could drive a negative rating action given EP's already weak credit metrics. Additionally, Fitch notes that any meaningful delay in the Ruby project which would push the in service date well beyond the expected June 2011 time frame could also result in a negative rating action. The ratings for the individual pipeline subsidiaries consider the solid credit metrics and significant operating and financial affiliations each pipeline has with EP. Given this linkage the pipelines are all rated one notch higher than EP, lower than their stand-alone credit metrics and business risk profiles would indicate. EP's fleet of natural gas pipelines continue to represent a significant portion of EP's EBITDA and cash flow. EP's pipeline segment is comprised of seven separate majority owned pipeline systems and four 50% owned systems. Nearly 80% of pipeline segment revenues are generated through non-volume sensitive capacity reservation charges, limiting earnings and cash flow volatility. Taken as a whole, the scale and regional diversity the pipeline systems, which have access to the principal U.S. supply basins and deliver into major consumer markets, limit exposure to shifting natural gas supply/demand dynamics. Additional delivery flexibility is provided from interconnected storage capacity and access to the Elba Island, Georgia LNG receiving terminal. Each of the pipelines and storage facilities operates under FERC regulation. However, FERC oversight does not provide meaningful credit 'ring-fencing' to protect the pipelines from affiliated company risk. Additionally, interests in two of EP's pipelines Tennessee Gas Pipeline (TPG) and El Paso Natural Gas (EPNG) are pledged as collateral to EP's $1.5 billion secured revolving credit facility. While each pipeline company has stand-alone operating and financial characteristics at or higher than its current ratings, the debt ratings are constrained due to the pipelines' affiliate relationship with EP. As subsidiaries of EP, EP management has substantial control over their operations and finances, including distributions. EP's subsidiaries participate in EP's cash management program which matches short-term cash surpluses and the needs of the participating affiliates. The pipeline subsidiaries have historically been cash providers under the cash management program in exchange for long-term notes receivable from EP. The ratings at El Paso Exploration & Production primarily reflect its operating and financial affiliations with EP. EPEP's senior secured credit facility is notched above the IDR, reflecting the strong collateral position supporting this facility. The ratings also consider the higher business risk inherent in an E&P operation due to its commodity price exposure. EPEP's results have shown some increased earnings and cash flow stability, in the face of declining commodity prices, due in part to hedges in place for a significant portion of production. The company has hedged a significant portion of its production for 2011, which provides some comfort that earnings and cash flow will exhibit some stability given expectations for continued commodity price environment. Additionally, EPEP has repositioned its production towards more oil rich and condensate natural gas plays in the Haynesville, Eagle Ford and Altamont shale plays which have economic and production advantages given the production profile of shale plays and the economic benefits of liquids rich production given current oil and gas price dynamics. Fitch notes that earnings and cash flow volatility remain a significant credit concern with EPEP particularly as its current hedges roll off. EPEP has extended its hedging program into 2012, however, at lower volumes and prices given the current forward curve. The Stable Outlook is indicative of EP's cash flow stability offset by the still significant leverage at the parent company and the plans for increased capital expenditures. Liquidity at the consolidated entity is adequate with EP, as of Sept. 30, 2010, reporting roughly $2.5 billion in consolidated liquidity; consisting of $300 million in cash and $2.2 billion in availability under various credit facilities (excluding any cash and revolver availability at EPB). Fitch notes that given the significant operating and financial ties any negative rating action at EP would likely drive a negative rating action at the rated subsidiaries. Fitch affirms these: El Paso Corporation -- Issuer Default Rating IDR at 'BB+'; -- $1.5 billion senior secured revolving credit facility (2012) at 'BBB-'; -- $500 million senior unsecured revolving credit facility (2011) at 'BB+'; -- Senior unsecured notes and debentures at 'BB+'; -- Perpetual preferred stock at 'BB-'. El Paso Energy Capital Trust I -- Trust convertible preferred securities at 'BB-'. Colorado Interstate Gas Company -- IDR at 'BBB-'; -- Senior unsecured debt at 'BBB-'. El Paso Natural Gas Company -- IDR at 'BBB-'; -- Senior unsecured debt at 'BBB-'. Southern Natural Gas Company -- IDR at 'BBB-'; -- Senior unsecured debt at 'BBB-'. Tennessee Gas Pipeline Company -- IDR at 'BBB-'; -- Senior unsecured debt at 'BBB-'. El Paso Exploration & Production Company -- IDR at 'BB+'; -- Senior secured revolving credit facility (2012) at 'BBB-'; -- Senior unsecured debt at 'BB+'. El Paso owns North America's largest interstate natural gas pipeline network comprised of approximately 42,000 miles of pipe, 220 Bcf of storage capacity, and an LNG import facility with 1.75 Bcf per day of send-out capacity. The company's upstream operations included year-end 2009 estimated reserves of 2.75 trillion cubic feet equivalent of consolidated proven reserves. EMISPHERE TECHNOLOGY: Posts $9.6-Mil. Net Profit in 3rd Quarter --------------------------------------------------------------- Emisphere Technologies Inc. filed its quarterly report on Form 10-Q, reporting net income of $9.6 million on net sales of $4,000 in the third quarter ended Sept. 30, 2010, compared to a net loss of $4.0 million on zero revenue for the same period last year. The Company reported an operating loss of $3.87 million in the third quarter of 2010 but recorded a net profit due to a $13.52 million non-operating income mostly from a "change in fair value of derivative instruments". The Company's balance sheet at Sept. 30, 2010, showed $5.34 million in total assets, $66.23 million in total liabilities, and a stockholder's deficit of $60.88 million. As of September 30, 2010, the Company's accumulated deficit has reached $459.2 million. A full-text copy of the earnings release is available for free at http://ResearchArchives.com/t/s?6e63 A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6eae About Emisphere Technologies Based in Cedar Knolls, New Jersey, Emisphere Technologies, Inc. (OTC BB: EMIS) -- http://www.emisphere.com/-- is a biopharmaceutical company that focuses on a unique and improved delivery of pharmaceutical compounds and nutritional supplements using its Eligen(R) Technology. The Eligen(R) Technology can be applied to the oral route of administration as well other delivery pathways, such as buccal, rectal, inhalation, intra-vaginal or transdermal. Since its inception in 1986, Emisphere has generated significant losses from operations. Emisphere anticipates it will continue to generate significant losses from operations for the foreseeable future, and that its business will require substantial additional investment that it has not yet secured. In its March 25, 2010 audit report on the Company's financial statements for the year ended December 31, 2009, McGladrey & Pullen, LLP, in New York, said there is substantial doubt about the Company's ability to continue as a going concern. The audit reports prepared by the Company's independent registered public accounting firms relating to its financial statements for the years ended December 31, 2007 and 2008, also included an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern. EMPIRE RESORTS: Posts $938,000 Net Loss in September 30 Quarter --------------------------------------------------------------- Empire Resorts Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $938,000 on $19.48 million of net revenues for the three months ended Sept. 30, 2010, compared with a net loss of $1.58 million on $20.93 million of net revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2010, showed $74.91 million in total assets, $63.20 million in total liabilities, and stockholders' equity of $11.71 million. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6e9b About Empire Resorts Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- owns and operates Monticello Casino & Raceway, a video gaming machine and harness racing track and casino located in Monticello, New York, 90 miles northwest of New York City. Auditor Friedman LLP, in New York, after auditing the Company's 2009 results, said Empire Resorts' ability to continue as a going concern depends on the Company's ability to fulfill its obligations with respect to its $65 million of 5-1/2% senior convertible notes. Friedman also noted of the Company's continuing net losses and negative cash flows from operating activities. ENDO PHARMACEUTICALS: Moody's Puts 'Ba2' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service assigned a Corporate Family Rating of Ba2 to Endo Pharmaceuticals Holdings Inc. Moody's also assigned a Ba2 rating to Endo's new senior unsecured note offering, and a SGL-1 Speculative Grade Liquidity Rating. This is the first time Moody's has assigned ratings to Endo. The rating outlook is stable. Proceeds of the note offering are expected to be used to partially fund the pending acquisition of Qualitest Pharmaceuticals, announced on September 28, 2010. The acquisition is expected to close during the fourth quarter of 2010 or first quarter of 2011. Ratings assigned to Endo Pharmaceuticals Holdings Inc.: * Ba2 Corporate Family Rating * Ba2 Probability of Default Rating * Ba2 (LGD4, 58%) senior unsecured notes of $400 million due 2020 * SGL-1 Speculative-Grade Liquidity Rating Moody's does not rate Endo's amended $500 million senior secured revolving credit facility due 2015, $400 million senior secured Term Loan A due 2015, or $379.5 million 1.75% senior subordinated convertible notes due 2015. Ratings Rationale The Ba2 Corporate Family Rating reflects Endo's modest size and scale relative to larger pharmaceutical peers, partially offset by the company's solid market positioning as a niche player in the pain market and its conservative financial profile. The ratings also reflect Endo's solid cash flow generation, very good liquidity, and potential near-term pipeline opportunities. The ratings are constrained by very high product concentration in Lidoderm, which now faces a patent challenge, its lack of geographic diversity, its aggressive business development philosophy, and an unresolved DOJ investigation into promotional practices for Lidoderm. On a pro forma basis for the proposed acquisition of Qualitest, Endo's credit metrics are expected to remain strong for the rating category, with adjusted Debt/EBITDA of approximately 1.9 times, adjusted CFO/Debt of approximately 32% and adjusted FCF/Debt of approximately 25%. Although Endo's ongoing business development plans may involve debt-financed acquisitions, Moody's currently assumes that Endo's Debt/EBITDA will not materially exceed 2.5 times. The rating outlook is stable. Endo's above-average credit metrics help offset concerns about product concentration, upcoming generic threats, and the unresolved marketing investigation. Although not anticipated over the near-term, upward pressure on the ratings could develop if Endo substantially increases its size, scale and diversification while sustaining conservative credit metrics, e.g. solidly within Moody's "Baa" ranges. Conversely, Endo's ratings could face negative pressure if Moody's assumptions about a conservative financial profile do not materialize. For instance, cash flow to debt ratios below Moody's "Baa" ranges or Debt to EBITDA above 2.5 times could result in a rating downgrade. The Ba2 rating on the senior unsecured notes reflects subordination relative to the secured credit facility and term loan, but also reflects loss absorption provided by convertible subordinated notes. Future changes in Endo's capital structure mix -- such as additional secured debt allowable under the bond indenture or a reduction in subordinated debt -- could result in a downgrade of the Ba2 rating on the senior unsecured notes even if the Corporate Family Rating remains unchanged. Headquartered in Chadds Ford, Pennsylvania, Endo Pharmaceuticals Holdings Inc. is a U.S.-focused specialty pharmaceutical company that develops, manufactures and markets branded and generic prescription pharmaceutical products primarily in the areas of pain management and urology, as well as medical devices and services solutions focused primarily in urology. For the twelve months ended September 30, 2010 Endo generated total revenues of approximately $1.6 billion. ENERGY XXI: Moody's Upgrades Corporate Family Rating to 'B3' ------------------------------------------------------------ Moody's Investors Service upgraded Energy XXI Gulf Coast, Inc.'s Corporate Family Rating to B3 from Caa1. Moody's also upgraded the company's $338 million 16% Second Lien Junior Secured Notes due 2014 to B3 from Caa1 and its $277 million 10% Senior Notes due 2013 to Caa2 from Caa3. The Speculative Grade Liquidity rating was raised to SGL-2 from SGL-3 and the rating outlook is stable. Energy XXI is a wholly owned subsidiary of Energy XXI (Bermuda) Limited. Ratings Rationale "The recent common and preferred stock offerings significantly improved Energy XXI's financial flexibility," commented Pete Speer, Moody's Vice President. "The resulting debt reduction and large cash balances give the company the capacity to grow its reserves and production organically or through acquisitions." Earlier this month, EXXI issued common stock and 5.625% convertible perpetual preferred stock raising total net proceeds of $556 million. The company is using approximately $133 million to redeem $119.7 million aggregate principal amount of its Second Lien Junior Secured Notes, or 35% of those notes outstanding. The company is also repaying its revolver borrowings outstanding ($91.5 million at September 30, 2010) and using approximately $13 million as an inducement for holders of its 7.25% convertible perpetual preferred stock to convert those shares to equity. This leaves Energy XXI with pro forma cash of approximately $330 million as of September 30, 2010 and a fully undrawn $350 million revolving credit facility. Accordingly Moody's have raised the SGL rating to SGL-2. Moody's treats the company's $287.5 million of newly issued preferred stock as 50% debt for fundamental analysis purposes, so the debt reduction is somewhat offset by the preferred stock issuance. However, Moody's expect the company to deploy the cash proceeds towards further debt reduction, capital spending, and acquisitions of developed properties in the U.S. Gulf of Mexico (GOM). This should achieve further improvements in the company's leverage metrics through a combination of debt reduction and increased proved reserves and production volumes. Energy XXI's B3 CFR reflects its greater proved reserve and production scale than many B3 rated peers and relatively high revenues and cash margins per boe due to approximately 69% of its production being oil. This rating is also indicative of the company's high operating cost structure, substantial geographic and field level concentration in the GOM, which entails short reserve lives, weather risks and additional regulatory and cost uncertainties stemming from the fallout of the Macondo well blowout and oil spill. Although the company's leverage metrics are improving, they remain high on a gross debt basis relative to other GOM focused peers. If Energy XXI does not achieve the expected leverage reduction, the rating outlook could be changed to negative or the ratings downgraded. Debt/PD above $13/boe and Debt/Production above $19,000/boepd could pressure the ratings. A positive rating action is unlikely in the near term due to the uncertainty regarding the regulatory environment, pace of permitting process and level of cost escalation for operators in the offshore GOM. In order for Energy XXI's ratings to improve, the company must continue to increase its proved reserve and production scale, improve its geographic diversification, while also lowering its operating cost structure and leverage metrics. The B3 Second Lien Junior Secured Notes rating and Caa2 Senior Notes rating reflect both the overall probability of default of Energy XXI, to which Moody's assigns a PDR of B3, and a loss given default of LGD3 (49%, changed from LGD4 (54%)) and LGD 5 (83% changed from 86%), respectively. The company has a $350 million borrowing base on its $400 million senior secured revolving credit facility. The Second Lien Junior Secured Notes are subordinate to the secured credit facility but will have a priority claim to the company's assets over the Senior Notes, which are unsecured. Therefore the Senior Notes are notched two ratings beneath the B3 CFR under Moody's Loss Given Default Methodology, while the Second Lien Junior Secured Notes are rated the same as the B3 CFR. Energy XXI Gulf Coast, Inc., is an independent exploration and production company based in Houston, Texas. ENERTECK CORPORATION: Posts $475,800 Net Loss in Q3 2010 -------------------------------------------------------- Enerteck Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $475,805 on $33,307 of revenue for the three months ended September 30, 2010, compared with a net loss of $184,688 on $294,195 of revenue for the same period last year. The Company's balance sheet at September 30, 2010, showed $1.8 million in total assets, $2.1 million in total liabilities, and a stockholders' deficit of $335,743. During the nine months ended September 30, 2010, and the year ended December 31, 2009, the Company incurred net losses of $1.4 million and $2.1 million, respectively. In addition, at the nine months ended September 30, 2010, and year ended December 31, 2009, the Company has an accumulated deficit of $22.9 million and $21.5 million, respectively. "These conditions raise substantial doubt about the Company's ability to continue as a going concern." A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6eb2 About Enerteck Corporation EnerTeck Corporation (OTC BB: ETCK.OB) -- http://www.enerteck.net/ -- was incorporated in 1935 and is based in Stafford, Texas. The Company develops, acquires and manufactures combustion enhancement, emission reduction and other performance improvement technologies for the heavy duty transportation industry. EnerTeck's flagship product, EnerBurn(TM), is a diesel fuel specific combustion catalyst, delivered to the engine via the diesel fuel, to improve the combustion rate of the fuel. EPICEPT CORP: Nets $1.9 Million from Sale of Securities ------------------------------------------------------- On November 5, 2010, EpiCept Corporation, entered into a Securities Purchase Agreement with certain investors relating to the issuance and sale in a public offering of approximately 3.3 million shares of the Company's common stock, par value $.0001 per share, at a price of $0.61 per share and warrants to purchase approximately 1.3 million shares of Common Stock. The closing occurred on November 10, 2010. Net proceeds to the Company from the sale of the Securities will be approximately $1.9 million. The Company intends to use the net proceeds it receives to meet the Company's working capital needs and for general corporate purposes. The proceeds of this offering together with existing cash are expected to be sufficient to fund operations into the first quarter of 2011. About EpiCept Corporation EpiCept 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), which has been granted full marketing authorization by the European Commission for the remission maintenance and prevention of relapse in adult patients with Acute Myeloid Leukemia (AML) in first remission. The Company has two 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. The Company's balance sheet at Sept. 30, 2010, showed $6.72 million in total assets, $20.92 in total liabilities, and a stockholder's deficit of $14.19 million. As reported in the Troubled Company Reporter on March 18, 2010, Deloitte & Touche LLP in Parsippany, New Jersey, expressed substantial doubt against EpiCept's ability continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2009. The independent auditors noted that the Company has recurring losses from operations and a stockholders' deficit of $9.1 million at December 31, 2009. FILMYARD HOLDINGS: S&P Assigns 'B+' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services assigned Santa Monica, Calif.- based FilmYard Holdings LLC a preliminary 'B+' corporate credit rating. The rating outlook is stable. At the same time, S&P assigned guaranteed subsidiary Miramax Film NY LLC's proposed $408 million seven-year senior secured term loan B a preliminary issue-level rating of 'B+' (at the same level as the preliminary 'B+' corporate credit rating on the parent company). S&P also assigned this debt a preliminary recovery rating of '3', indicating S&P's expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. The loan will be guaranteed on a senior secured basis by the parent and by the parent and borrower's domestic subsidiaries. The company will use the proceeds of the financing, along with sponsor equity representing about 40% of the net purchase price, to acquire the Miramax film catalog and related assets from The Walt Disney Co. and to pay transaction costs. All ratings are subject to S&P's final review of transaction documentation. "The preliminary 'B+' rating on FilmYard reflects the company's minimal business diversity as a pure film catalog with minimal production investment in new films and its lack of critical mass," said Standard & Poor's credit analyst Deborah Kinzer. "Somewhat tempering these factors is the good cash flow generating potential of a film library, notwithstanding S&P's view that recent declines in industrywide DVD sales, especially sale of catalog titles, are largely a secular trend." FilmYard is a new entity formed by private equity sponsors Colony Capital LLC and investor Ronald Tutor to acquire the Miramax assets from Disney. Under Disney, Miramax operated as a division of the studio business, and information on historical stand-alone financial performance is limited. S&P views FilmYard's business risk profile as weak. FilmYard plans to manage the Miramax assets solely as a film library. FilmYard does not intend to engage in film production, although S&P believes it may acquire films for release or acquire additional libraries. While this eliminates production risk, it makes refreshment of the company's Miramax assets dependent on future further acquisitions. Without such refreshment, cash flows from exploitation of the library will dwindle over time as the films age, as even former hit movies are eventually no longer able to command high licensing fees. FilmYard's financial risk profile is aggressive, in S&P's view, reflecting its expectation of a long-term decline in EBITDA and cash flow. Pro forma for the transaction, debt to EBITDA was 3x as of Oct. 2, 2010, and EBITDA coverage of interest was about 5x. Funds from operations as a proportion of debt was about 15%, which is in line with Standard & Poor's financial risk indicative ratios for an aggressive financial risk profile. FIRST INDUSTRIAL: Fitch Affirms 'B+' Issuer Default Rating ---------------------------------------------------------- Fitch Ratings has removed from Rating Watch Negative and subsequently affirmed these ratings for First Industrial Realty Trust, Inc., and its operating partnership, First Industrial, L.P.: First Industrial Realty Trust, Inc. -- Issuer Default Rating at 'B+'. First Industrial, L.P. -- IDR at 'B+'; -- $400 million unsecured credit facility (including a $200 million unsecured term loan and $200 million unsecured revolving credit facility) at 'BB/RR1'; -- $751.1 million senior unsecured notes at 'BB-/RR3'; -- $145.7 million senior unsecured exchangeable notes at 'BB- /RR3'. Fitch has also upgraded First Industrial Realty Trust, Inc.'s $275 million preferred stock to 'B-/RR5' from 'CCC/RR6'. The Rating Outlook is Stable. The removal of the ratings from Negative Rating Watch is driven by Fitch's view that there is currently a limited likelihood of a covenant violation or deferral of preferred stock dividends by First Industrial. On Oct. 25, 2010, First Industrial announced that it amended its unsecured revolving credit facility agreement. It paid down $100 million of borrowings, such that the credit facility now totals $400 million including a $200 million term loan and $200 million revolving facility. The amended agreement reduced the fixed charge coverage covenant to 1.2 times from 1.5x until September 2011, after which it increases to 1.25x until maturity in September 2012 (although the company has four waivers to remain above 1.2x until maturity), and also reduced the unencumbered asset coverage covenant to 1.3x from 1.6x until September 2011, after which it reverts to 1.6x until maturity in September 2012. The company is in compliance with all new covenants such that it has enhanced financial flexibility to sell non-core assets (i.e., vacant properties or assets outside of major markets), including selling assets at a loss, or to refinance debt maturities. The 'B+' IDR takes into account First Industrial's credit strengths including improved financial flexibility following the recent amendment to its unsecured credit facility agreement. The ratings further reflect that declines in same-property net operating income across the company's portfolio are moderating because of increasing occupancy rates and that portfolio operating performance is bottoming out in the near term. These credit strengths are offset by a fixed charge coverage ratio that remains consistent with the higher end of the 'B' rating category, a constrained liquidity position, and unencumbered asset value that provides modest downside protection to bondholders. First Industrial's ability to sell assets for proceeds of $250 million to $300 million before September 2012 is uncertain, and the risk of a covenant violation remains since the unencumbered asset coverage covenant under the amended credit agreement reverts to 1.6x after September 2011. The Stable Outlook reflects the likelihood that First Industrial's credit metrics will remain consistent with a 'B+' IDR over the near term. First Industrial actively leased space during the third quarter of 2010 (3Q'10), increasing in-service portfolio occupancy meaningfully to 83.6% as of Sept. 30, 2010 from 82.1% as of June 30, 2010. Year-over-year occupancy was also up from 81.7% as of Sept. 30, 2009. Although rents remain under pressure with weighted average rental income per square foot declining to $4.36 in 3Q'10 from $4.47 in 2Q'10 and $4.51 in 3Q'09, same-store declines in NOI on a cash basis are moderating due to more occupied space. Year-over-year same store cash NOI declined by 0.1% in 3Q'10 after declining by 1.7% and 7.2% in 2Q'10 and 1Q'10, respectively. While occupancy is poised to continue improving because of limited new industrial property supply throughout the recent economic downturn, fixed charge coverage will improve modestly but remain consistent with a 'B+' IDR, absent significant deleveraging equity raises. The company's fixed charge coverage ratio (defined as recurring operating EBITDA less recurring capital expenditures less straight-line rent adjustments divided by total interest incurred and preferred stock dividends) was 1.2x for the trailing 12 months ended Sept. 30, 2010. Fixed charge coverage was 1.4x in 3Q'10 and 2Q'10 due to reduced operating expenses and general and administrative expenses along with lower interest expense via senior unsecured debt repurchases and redemptions. For 2011 and 2012, Fitch projects that fixed charge coverage will be approximately 1.2x to 1.3x due to a bottoming out of same-store NOI declines, offset by potential reduced NOI through contemplated sales of non-strategic assets. First Industrial improved its near-term financial flexibility following the recent amendments to the company's unsecured credit facility agreement, but overall liquidity remains constrained. The company's sources of liquidity (unrestricted cash, availability under the unsecured credit facility pro forma for the $100 million pay down following the amended agreement, projected retained cash flows from operating activities after preferred stock dividends) divided by uses of liquidity (pro rata debt maturities, projected recurring capital expenditures) for Oct. 1, 2010 to Dec. 31, 2012 result in a liquidity coverage ratio of 0.4x. The company's liquidity position remains pressured due to limited borrowing capacity under the unsecured credit facility, offset by organic cash flow retention as the company is not currently paying a common stock dividend. Liquidity coverage would be 0.5x if 80% of upcoming secured debt maturities are refinanced. Moreover, absent proceeds from asset sales used to repay indebtedness, the company faces refinance risk in 2012 given significant amounts that remain outstanding under the unsecured credit facility that matures September 2012. First Industrial's real estate portfolio is 73.1% unencumbered as of Sept. 30, 2010, compared with 85.4% as of Sept. 30, 2009. Unencumbered asset coverage of unsecured debt was 1.57x as of Sept. 30, 2010, per the covenants in the company's new unsecured line of credit agreement, which employs an 8.5% capitalization rate to derive the value of unencumbered assets and has a covenant limit of 1.3x. The previous unsecured line of credit agreement limit was 1.6x and employed a 7.75% capitalization rate to derive the value of unencumbered assets. However, unencumbered asset coverage was 1.62x pro forma for the $100 million paydown of unsecured debt via the amended agreement. While the covenants under the amended agreement do not currently restrain First Industrial's financial flexibility, unencumbered asset value provides modest downside protection to bondholders. That being the case, if the company is unable to sell assets to repay debt to the extent contemplated, there is a risk that the company could be closer to the unencumbered asset coverage covenant under the amended credit agreement, which reverts to 1.6x after September 2011. First Industrial's credit metrics are expected to remain consistent with a 'B+' IDR. The company's risk-adjusted capital ratio at a 'B' rating category stress was 1.9x as of Sept. 30, 2010, which is solid for the rating category, compared with 1.8x and 1.5x as of Dec. 31, 2009 and Dec. 31, 2008, respectively. First Industrial's leverage on a net debt to recurring operating EBITDA basis was also strong for the 'B+' IDR at 8.6x as of Sept. 30, 2010 compared with 9.1x and 12.4x as of Dec. 31, 2009 and Dec. 31, 2008, respectively. Fitch projects that over the next two years leverage will approach 8.0x due to expected paydowns of the company's unsecured credit facility via retained operating cash flow as the company is not currently paying a common stock dividend. The Stable Outlook takes into account First Industrial's geographically diversified industrial real estate portfolio and granular tenant roster. The company's top five markets by rental income as of Sept. 30, 2010 were Detroit (7.3%), Minneapolis/St. Paul (7%), Chicago (6.1%), Dallas/Ft. Worth (6.1%), and Los Angeles (6.1%), while no other market comprised more than 6% of total rental income. This insulates First Industrial from individual market fundamentals but exposes the company to various areas outside of key logistics corridors, which Fitch views less favorably. As of Sept. 30, 2010, no individual tenant contributed more than 2.4% of total rental income, which Fitch views positively from a tenant credit risk standpoint. In accordance with Fitch's Recovery Rating methodology, Fitch assigns Recovery Ratings to obligations of issuers with an IDR of 'B+' or lower. At IDR levels of 'B+' or lower, there is greater probability of default, so the impact of recovery prospects on issue specific ratings becomes more meaningful and is more explicitly reflected in the ratings dispersion relative to the IDR. Although a covenant breach is no longer likely due to the amended terms of the unsecured credit facility, the company's inability to sell assets to pay down debt may position the company closer to its revised covenants after September 2011. Therefore, unsecured bondholders continue to face adverse selection risk relative to the lenders under the unsecured credit facility in the absence of First Industrial reaching its asset sales targets. As such, the ratings for the company's unsecured credit facility have been at 'BB/RR1' and ratings for the unsecured notes have been at 'BB-/RR3'. The upgrade of First Industrial's preferred stock rating to 'B- /RR5' from 'CCC/RR6' reflects that the risk of a preferred stock dividend deferral is no longer a real possibility, but that recoveries for preferred stock would likely be weak given default. Based on Fitch's criteria report, 'Equity Credit for Hybrids & Other Capital Securities', the company's preferred stock is 75% equity-like and 25% debt-like since it is perpetual and has no covenants but has a cumulative deferral option in a going concern. Net debt plus 25% of preferred stock to recurring operating EBITDA was 8.9x as of Sept. 30, 2010, compared with 9.5x as of Dec. 31, 2009. These factors may positively impact the ratings and/or Outlook: -- If the company's fixed charge coverage ratio sustains above 1.3x (for the 12 months ended Sept. 30, 2010, fixed charge coverage was 1.2x); -- If the company's net debt to recurring operating EBITDA ratio sustains below 8.5x (as of Sept. 30, 2010, leverage was 8.6x); -- A liquidity surplus. These factors may negatively impact the ratings and/or Outlook: -- An inability to raise capital principally through asset sales to address near-term debt maturities; -- If the company's fixed-charge coverage ratio sustains below 1.2x; -- If the company's net debt-to-recurring operating EBITDA ratio sustains above 9.0x; Organized on Aug. 10, 1993, First Industrial is a REIT headquartered in Chicago that owns, manages, acquires, sells, develops, and redevelops industrial real estate. As of Sept. 30, 2010, First Industrial had $3.5 billion in gross book assets, a total market capitalization of $2.5 billion, and an equity market capitalization of $625.5 million. As of Sept. 30, 2010, First Industrial owned 778 industrial properties located in 28 states in the United States and one province in Canada, containing an aggregate of approximately 68.9 million square feet of gross leasable area. FLAKEBOARD CO: S&P Assigns 'B' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B' long- term corporate credit rating to Markham, Ont.-based Flakeboard Co. Ltd. The outlook is stable. At the same time, S&P assigned its 'B' issue-level rating, and a '4' recovery rating, to the company's proposed US$225 million senior secured notes due 2017. The '4' recovery rating indicates S&P's expectation of average (30%-50%) recovery in a default scenario. "The ratings on Flakeboard reflect what S&P views as the company's participation in the cyclical, competitive, and fragmented composite panel industry, exposure to volatile raw material costs, limited product diversity, and high debt leverage," said Standard & Poor's credit analyst Jatinder Mall. "Partially offsetting these weaknesses, in S&P's opinion, are the company's highly variable cost structure and good operating diversity," Mr. Mall added. Flakeboard is the largest producer of medium density fiberboard and the second-largest producer of particleboard in North America, with approximate market shares of 25% and 17% in each segment, respectively. Particleboard and MDF are nonstructural wood-based products used primarily in the production of cabinets, furniture, countertops, and laminate flooring. The company operates two facilities in Canada and six facilities in the U.S., with total production capacity of 899 million square feet of particleboard and 687 million square feet of MDF. Demand for MDF and particleboard is directly affected by the economy, specifically consumer spending on home repair and remodeling and new home construction, all of which are cyclical. With about two-thirds of its cost of sales related to raw materials, Flakeboard is exposed to volatile raw material prices, primarily for resin and wood fiber. The company's margins were significantly affected in 2008 when resin prices increased sharply and it was unable to pass higher input costs to its customers. Particleboard and MDF are similar products with comparable end uses, which somewhat limits Flakeboard's product diversity. That said, the company's eight mills across North America are close to major end markets and key customers, providing Flakeboard with better operating and geographic diversity than most of its competitors, which are focused primarily on regional markets. The stable outlook reflects S&P's expectation that Flakeboard will see stable demand and pricing for MDF and particleboard in the near term as the North American economy slowly recovers. Furthermore, the outlook incorporates S&P's view that the company will be able to continue to generate margins at or above current levels and maintain EBITDA interest coverage of more than 2x and funds from operations to debt of more than 10%, which should ensure some free cash generation. Standard & Poor's could consider taking a negative rating action if weaker-than-expected demand for particleboard and MDF causes financial metrics to deteriorate from current levels, with EBITDA interest coverage under 2x, FFO to debt below 10%, and negative free operating cash flow on a sustained basis. In addition, S&P could take a negative rating action if S&P sees deterioration in Flakeboard's operating margins as a result of raw material cost increases, which the company is unable to pass through to its customers. Conversely, a positive rating action would require the company to deleverage, where adjusted debt to EBITDA falls to 4x and FFO to debt increases to 20% on a sustained basis. FORD MOTOR: Said to Pare Mazda Stake to 3% ------------------------------------------ Sarah Turner, writing for MarketWatch, citing the Nikkei, reports that Ford Motor Co. will sell shares in Mazda Motor Corp. to about 10 firms, including: -- Itochu Corp.; -- Kajima Corp.; -- Sumitomo Mitsui Banking Corp.; and -- Sumitomo Corp. Ford will sell the shares as part of a move to substantially reduce its 11% stake in Mazda, according to the Nikkei. Ford, which has been Mazda's top shareholder for 31 years, will retain a stake of around 3% in the firm, according to the report. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The Company provides financial services through Ford Motor Credit Company. Ford's balance sheet at Sept. 30, 2010, showed $177.07 billion in total assets, $178.81 billion in total liabilities, and a stockholder's deficit of $1.77 billion. * * * As reported by the Troubled Company Reporter on October 12, 2010, Moody's Investors Service raised the Corporate Family Rating of Ford Motor to Ba2 from B1. Other ratings that were raised include Probability of Default to Ba2 from B1; senior secured credit facility to Baa3 from Ba1; senior unsecured to Ba3 from B2; and, preferred stock to B1 from B3. Moody's also raised the CFR and senior unsecured ratings of Ford Motor Credit Company LLC, FCE Bank Plc, and Ford Credit Canada Limited to Ba2 from Ba3. The rating outlook for Ford and Ford Credit is stable. Moody's said Ford's operating performance exceeded expectations during the first half of 2010. Moody's believe that Ford is well positioned to continue generating strong earnings and cash flow through 2011, and to further strengthen its balance sheet. Ford's ability to achieve this progress will be supported by the much healthier industry fundamentals that have resulted from the extensive restructuring of the US automotive sector during the past two years, and by Ford's highly competitive product portfolio. As reported by the TCR in August 2010, Dominion Bond Rating Service upgraded the Issuer Rating of Ford Motor to BB (low) from B; Fitch Ratings upgraded Ford's and Ford Motor Credit's Issuer Default Ratings to 'BB-' from 'B'; and Standard & Poor's Ratings Services raised its corporate credit rating on Ford Motor and Ford Motor Credit LLC to 'B+' from 'B-'. The rating agencies cited Ford's strong financial performance and substantial debt reduction accomplished in the second quarter of 2010. GENTA INC: Swings to $7.7-Mil. Net Income in Q3 2010 ---------------------------------------------------- Genta Incorporated reported net income of $7.7 million for the third quarter of 2010, compared with a reported net loss of $20.4 million for the third quarter of 2009. Net product sales was $82,000 in the third quarter of 2010, compared with $39,000 in third quarter of 2009. The fair value of the conversion feature liability of the March 2010 Notes was re-measured at July 9, 2010 at $81.8 million and credited to permanent equity, resulting in income for the three months ended September 30, 2010 of $14.6 million. The Company's balance sheet at Sept. 30, 2010, showed $19.41 million in total assets, $8.10 million in total current liabilities, $8.14 million in total long-term liabilities, and stockholder's equity of $3.17 million. At September 30, 2010, Genta had cash and cash equivalents totaling $11.7 million, compared with $1.2 million at December 31, 2009. The Company projects that its average net monthly cash outflow for 2010 will be approximately $1.2 million. A full-text copy of the earnings release is available for free at http://ResearchArchives.com/t/s?6eaa A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6eab Berkeley Heights, New Jersey, Genta Incorporated (OTCBB: GETA.OB) -- http://www.genta.com/-- is a biopharmaceutical company with a diversified product portfolio that is focused on delivering innovative products for the treatment of patients with cancer. GLAZIER GROUP: Files For Bankruptcy Protection ---------------------------------------------- Glazier Group Inc has filed for bankruptcy protection. According to Dow Jones' Small Cap reports that Peter Glazier, who owns the company, said in court papers that Glazier Group deployed too much liquidity while expanding and then was hit with the downturn in the U.S. economy. The report relates Glazier Group closed five of its newly opened restaurant facilities and tried to restructure its loan with General Electric Capital Corp. But the company wasn't able to reach a "satisfactory" agreement on restructuring the loan with the lender, spurring the company to file for Chapter 11 protection, Peter Glazier said, the report notes. Glazier Group and affiliates owe GECC $5.8 million under the loan, Mr. Glazier added. Glazier Group Inc. runs an empire of restaurants and event venues such as Michael Jordan's The Steak House NYC and Bridgewaters. GLOBAL CONTAINER: Reorganization Cases of Two Affiliates Dismissed ------------------------------------------------------------------ The Hon. Alan S. Trust of the U.S. Bankruptcy Court for the Eastern District of New York dismissed the Chapter 11 cases of Global Progress LLC, and Global Prosperity LLC, debtor-affiliates of Global Container Lines Limited. The Debtors explained that the Dismissed Debtors have no further assets to administer and no other payments to be made to creditors. Garden City, New York-based Global Container Lines Limited filed for Chapter 11 bankruptcy protection on November 10, 2009 (Bankr. E.D. N.Y. Case No. 09-78585). C. Nathan Dee, Esq., and Matthew G. Roseman, Esq., at Cullen & Dykman, LLP, represent the Debtor. The Company estimated assets and debts at $10 million to $50 million. GLOBAL CONTAINER: Plan of Reorganization Gets Court Approval ------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of New York confirmed Global Container Lines Ltd.'s Plan of Reorganization. As reported in the Troubled Company Reporter on July 14, the Plan proposes to pay all administrative, fee and priority claims in full on the effective date; to pay the NBP secured claim in accordance with the negotiated terms; and to pay general unsecured claim a percentage of the Debtor's available cash flow for a period of six years, together with certain fixed payments. The payments required under the Plan will be made from the Debtor's operations and cash flow. A full-text copy of the Disclosure Statement, as amended, is available for free at: http://bankrupt.com/misc/GlobalContainer_2ndAmendedDS.pdf About Global Container Garden City, New York-based Global Container Lines Limited filed for Chapter 11 bankruptcy protection on November 10, 2009 (Bankr. E.D.N.Y. Case No. 09-78585). C. Nathan Dee, Esq., and Matthew G. Roseman, Esq., at Cullen & Dykman, LLP, represent the Debtor. The Company estimated assets and debts at $10 million to $50 million. GOLDSTEIN FAMILY: Case Summary & 9 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Goldstein Family Limited Partnership 3057/3029 3057 North Rockwell Chicago, IL 60618 Bankruptcy Case No.: 10-50777 Chapter 11 Petition Date: November 13, 2010 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: Joel A Schechter, Esq. LAW OFFICES OF JOEL SCHECHTER 53 W Jackson Blvd., Ste. 1522 Chicago, IL 60604 Tel: (312) 332-0267 Fax: (312) 939-4714 E-mail: joelschechter@covad.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ilnb10-50777.pdf The petition was signed by Michael Goldstein, president of Daddio Management and Investment Corp., Debtor's general partner. GREYSTONE PHARMACEUTICALS: U.S. Withdraws Motion to Dismiss Case ---------------------------------------------------------------- The United States of America, a creditor acting through the Internal Revenue Service, notified the U.S. Bankruptcy Court for the Western District of Tennessee that it has withdrawn its request to dismiss the Chapter 11 case of Greystone Pharmaceuticals, Inc., et al. The United States had sought for the dismissal due to the Debtors' failure to file federal tax returns for 2007, 2008 and 2009. Fort Myers, Florida-based Greystone Pharmaceuticals, Inc. -- aka Greystone Medical, Inc., and Greystone Medical Group, Inc. -- operates a pharmaceutical company. The Company filed for Chapter 11 protection on November 2, 2009 (Bankr. W.D. Tenn. Case No. 09-32236). John L. Ryder, Esq., represents the Debtor. The Company disclosed $25,467,546 in assets and $22,601,150 in liabilities as of the Petition Date. GYMBOREE CORP: Moody's Puts Caa1 Rating on $400 Million Notes ------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to The Gymboree Corporation's proposed offering of $400 million senior unsecured notes. Moody's also affirmed Gymboree's B2 Corporate Family and Probability of Default Ratings, as well as the B1 rating assigned to the company's proposed $820 million senior secured term loan (upsized from $720 million). The rating outlook is stable. The ratings assigned are subject to the receipt and review of final documentation. Ratings Rationale Gymboree's ratings reflect its highly leveraged capital structure following its proposed acquisition by Bain Capital. Leverage will be high, with debt/EBITDA near 6.5 times (incorporating Moody's standard analytical adjustments for operating leases) for the LTM period pro-forma for the proposed transaction. The rating also takes into consideration the moderate scale and the highly fragmented infant and toddler apparel market. Gymboree has a good track record of growth, a well known brand, and strong execution skills as evidenced by the company's high operating margins. Further, the infant and toddler apparel category is relatively stable compared to most apparel categories, primarily due to regular demand as children grow and parents generally will seek to maintain spending on their children. The Caa1 rating assigned to Gymboree's proposed senior unsecured notes reflect their junior ranking position relative to the $820 million secured term loan as well as the company's $225 million Asset Based Loan facility. The rating outlook is stable, reflecting Moody's expectation that the company will maintain stable operating performance in the face of only a sluggish recovery in consumer spending and rising raw material prices. The stable outlook also encompasses expectations the company will make progress on deleveraging such that debt/EBITDA will approach 6 times in the next 12 to 18 months. In view of Gymboree's high leverage, ratings are unlikely to be upgraded in the near term. Over time ratings could be upgraded if the company can deleverage by utilizing free cash flow to reduce debt while at the same time demonstrating continued strong returns from investments in its growth initiatives. Quantitatively, ratings could be upgraded if debt/EBITDA can be sustained below 5.5 times and interest coverage is in excess of 1.75 times. Ratings could be downgraded if the company shows negative trends in sales, or operating margins begin to show material erosion. Quantitatively ratings could be lowered if the company does not make tangible progress toward reducing debt/EBITDA toward 6 times in the next 12 to 18 months or if interest coverage falls below 1.25 times. Ratings could also be lowered if the company's overall good liquidity position were to erode. These ratings were assigned: * $400 million senior unsecured notes at Caa1 (LGD 5, 86%) These ratings were affirmed, and LGD assessments amended: * Corporate Family Rating at B2 * Probability of Default Rating at B2 * $720 million Senior Secured Term Loan due 2017 at B1 (LGD 3, 39% from LGD 3, 35%) Headquartered in San Francisco, California Gymboree operates more than 1000 retail stores under Gymboree, Gymboree Outlet, Janie and Jack, and Crazy 8 brands. Revenues for the most recent LTM period were in excess of $1.0 billion. GYMBOREE CORP: S&P Downgrades Senior Secured Debt Rating to 'B+' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its preliminary senior secured debt rating on The Gymboree Corp.'s $820 million term loan to 'B+' from 'BB-' and revised the preliminary recovery rating on the loan to '3' from '2'. The '3' recovery rating indicates S&P's expectations for meaningful (50%-70%) recovery of principal in the event of a payment default. This action follows the company upsizing its senior secured credit facility by $100 million. Concurrently, S&P assigned its preliminary 'B-' issue-level rating, with a preliminary '6' recovery rating to the company's proposed $400 million senior unsecured notes. The '6' recovery rating indicates S&P's expectations for negligible (0%-10%) recovery of principal in the event of a payment default. S&P also affirmed its preliminary 'B+' corporate credit rating on Gymboree. The outlook is stable. The company intends to use the proceeds from the debt issuance and an approximately $524 million equity contribution to fund acquisition of the company by Bain Capital LLC. To ensure that the company has committed funds to close on this transaction, it has arranged for a $420 million increasing-rate unsecured bridge loan maturing in one year. If not converted into exchange notes before its maturity, the loan will be automatically converted into a senior unsecured term loan. "The ratings reflect what S&P considers Gymboree's weak business profile, based on its expectation that its expansion of the more value-oriented Crazy 8 concept will increase risk, and that cost pressures from higher cotton prices could affect margins," said Standard & Poor's credit analyst Mariola Borysiak. The weak business profile also reflects its presence in the highly competitive and fragmented children's apparel industry, partly offset by its recognized brand, the quality of its products, and good revenue diversity. The highly leveraged financial risk profile reflects the company's hefty debt levels and thin cash flow protection measures following the acquisition by Bain Capital. HEALTHY FAST: Posts $57,705 Net Loss in September 30 Quarter ------------------------------------------------------------ Healthy Fast Food, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $57,705 on $760,403 of revenue for the three months ended September 30, 2010, compared with a net loss of $1.2 million on $530,332 of revenue for the same period of 2009. During August 2009, the Company closed its two Fresh and Fast (formerly EVOS) restaurants. As a result of the closures, activities of the Fresh and Fast concept have been accounted for as discontinued operations. For the three months ended September 30, 2010, the Company realized a gain on discontinued operations of $77,303, as compared to a loss on discontinued operations of roughly $1.0 million for the 2009 period. The Company has accumulated net losses totaling $5.4 million as of September 30, 2010. The Company's balance sheet as of September 30, 2010, showed $2.6 million in total assets, $730,247 in total liabilities, and stockholders' equity of $1.9 million. L.L. Bradford & Company, LLC, in Las Vegas, expressed substantial doubt about the Company's ability to continue as a going concern in its report on the Company's 2009 financial statements. The independent auditors noted that Company has incurred recurring losses and its current liabilities exceed its current assets. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?6eba Henderson, Nev.-based Health Fast Food, Inc., through its wholly- owned subsidiary, U-Swirl International, Inc., owned and operated six U-Swirl Yogurt restaurants, sold four franchises, and sold four franchise area developer agreements. HELLAS TELECOMMUNICATIONS: Files Ch. 15 Petition in Delaware ------------------------------------------------------------ London-based Hellas Telecommunications (Luxembourg) V filed a Chapter 15 petition in Delaware (Bankr. D. Del. Case No. 10-13651) on November 12, 2010. HTV is a finance company whose business operations focus on servicing its debt. Its principal function has been to raise financing for the business of parent WIND Hellas Telecommunications S.A., a telecommunications operator in Greece. Beveridge Alastair, the foreign representative, signed the Chapter 15 petition. The Petitioner is a partner in the Corporate Recovery team at Zolfo Cooper LLP specializing in cross border advisory and formal insolvency appointments as a licensed insolvency practitioner under English law. Mark D. Collins, Esq., at Richards Layton & Finger, in Wilmington, Delaware, serves as counsel to the foreign representative in the Chapter 15 case. Hellas Telecommunications, also known as Troy V S.a.r.l. and Troy GAC Luxembourg V, estimated assets of $500 million to $1 billion and debts of more than $1 billion as of the Chapter 15 filing. Hellas Telecommunications is seeking an order from the U.S. Bankruptcy Court for the District of Delaware (i) recognizing the voluntary restructuring proceeding concerning Hellas Telecommunications (Luxembourg) currently pending before the chancery division (companies court) of the high court of justice of England and Wales as a foreign main proceeding pursuant to 11 U.S.C. Sections 1515 and 1517. A hearing date on the Chapter 15 petition is proposed for December 13. Objections are due December 7. Financial Difficulties Wind Hellas and its units have been materially and adversely impacted by the global and Greek macro-economic downturns in terms of both results of operations and financial condition. In 2009, as a result of Wind Hellas' negative financial performance from the first quarter onwards, various restructuring options for the Wind Hellas Group were considered. A decision was made to place Wind Hellas' former owner, Hellas Telecommunications (Luxembourg) II, a societe en commandite par actions incorporated under the laws of Luxembourg, into administration in England and Wales on November 26, 2009. The assets of HTII were sold to the Existing Parent, a separate indirect Weather subsidiary, during the administration. In May 2010, the further decline in Wind Hellas' performance, coupled with management's clear view that the decline in the overall market environment was not a temporary phenomenon, led its management to revise its four-year outlook for the company and to review its forecast liquidity position, in light of its operating results, including its results for the first quarter of 2010. Wind Hellas commenced negotiations in London with its principal financial creditors in June 2010 regarding the terms of the Restructuring with the aim of reducing the financial pressure on the business of Wind Hellas and ensuring that Wind Hellas will operate as a going concern into the future. The parties on November 3 executed a restructuring agreement, subject to certain termination rights, and has the effect of extending the suspension of rights until January 20, 2011, with respect to consenting and acceding creditors. U.K. Scheme The restructuring of Wind Hellas and its units is intended to be effected, in part, pursuant to a scheme of arrangement. The Scheme is a proceeding under the laws of England and Wales that allows companies to effect compromises or arrangements, including restructuring their liabilities, with their members or creditors (or any class of them). Under the key provisions of the Scheme, creditors will agree -- or be deemed to agree -- that the Claims will be assigned to Crystal Almond S.a.r.l. -- Bidco -- a societe il responsabilite limitee incorporated in Luxembourg, in return for the Scheme Creditors receiving an entitlement to be issued equity shares in Largo Limited -- Holdco -- a limited liability company incorporated in Guernsey that wholly owns Bidco. Immediately upon the Scheme becoming effective, the Scheme Creditors will, subject to receipt by the Information Agent of a validly completed Account Holder Letter, be entitled to receive, in aggregate, 10% of Holdco's issued share capital. Among other things, in the further course of the Restructuring, Bidco will purchase the shares of WIND Hellas and certain other assets in an administration sale in the UK for EUR747.8 million. The funding sources of the Purchase Price are (i) a contribution from Holdco financed by the proceeds of an additional offering of the remaining 90% of the shares of Holdco in the amount of EUR420 million to be underwritten by certain Scheme Creditors and to which Scheme Creditors will be entitled to subscribe for pro rata to their Scheme Claims and (ii) a loan under a short term bridge facility in the amount of EUR357.9 million extended to Bidco that will be repaid by distributions recovered from the administration of the existing parent in respect of the Scheme Claims. The overall purposes of the Scheme and the other steps of the Restructuring are to: -- ensure that the business of WIND Hellas and the WIND Hellas Group immediately following the transfer of all the shares of WIND Hellas to Bidco have a level of debt that is serviceable moving forward and to strengthen the balance sheet and capital structure of the Restructured Group; -- avoid placing certain companies within the Existing Group into liquidation prior to completion of the Restructuring, as a result of which the recoveries for Scheme Creditors and other stakeholders would likely be significantly less than if the Restructuring were to be successfully completed; and -- issue 10% of the equity in Holdco to Scheme Creditors; following the completion of the Restructuring, Holdco will be the parent, through Bidco, of the WIND Hellas Group; in addition, Scheme Creditors will have the right to subscribe for the Additional Shares in Holdco in return for their pro rata share of the New Money Amount and subscribers for such Additional Shares will, in aggregate, be entitled to 90% of the equity in Holdco. The Scheme meeting is set for Dec. 6, 2010, 11:00 a.m. (London time), at the offices of White & Case LLP, 5 Old Broad Street, London EC2N 1DW, UK. HELLAS TELECOMMUNICATIONS: Chapter 15 Case Summary -------------------------------------------------- Chapter 15 Petitioner: Alaslair Beveridge Chapter 15 Debtor: Hellas Telecommunications (Luxembourg) V aka Troy V S.a.r.l. Troy GAC Luxembourg V 55 Old Broad Street London EC2M 1RX United Kingdom Chapter 15 Case No.: 10-13651 Type of Business: The Debtor is a partnership limited by shares incorporated in Luxembourg and having a corporate capital of 31,000. Chapter 15 Petition Date: November 12, 2010 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Debtor's Counsel: Mark D. Collins, Esq. RICHARDS LAYTON & FINGER One Rodney Square P.O. Box 551 Wilmington, DE 19899 Tel: (302) 6517531 Fax: (302) 651-7701 E-mail: collins@rlf.com Estimated Assets: $500,000,001 to $1 billion Estimated Debts: More than $1 billion The Debtor did not file a list of creditors together with its petition. HERCULES OFFSHORE: Moody's Junks Corporate Family Rating -------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating of Hercules Offshore Inc. and the Probability of Default Rating to Caa1 from B2. Moody's also downgraded Hercules' 10.5% senior secured notes due 2017, its senior secured revolving credit facility due 2012, and its senior secured term loan B due 2013, all to Caa1 with LGD3, 45%. The outlook remains negative. Ratings Rationale "The inability of Hercules to generate meaningful free cash flow despite limited reinvestment in its aging fleet of rigs is cause for concern," commented Stuart Miller, Moody's Senior Analyst. "Without a significant de-leveraging of its balance sheet, Hercules is following a path that could lead to financial hardship at the first sign of a market softening." Hercules' Caa1 CFR rating reflects its highly leveraged balance sheet and limited ability to generate free cash flow. The Caa1 rating on the senior secured notes reflects their pari passu secured position in Hercules' capital structure relative to the senior secured credit facilities. Hercules' primary area of operation is in the shallow water GOM, a region that is slowly recovering from the impact of the Macondo well blow out. Fortunately, Hercules' operating results were not negatively impacted by the GOM drilling moratorium, and in fact their liftboat business benefited from the clean-up operations. However, the company's current cash flow is not sufficient to fund a meaningful reduction in leverage in the near future. Hercules remains burdened with over half of its rigs cold-stacked (at a cost of roughly $25 million annually) and a declining backlog of work. The company's contracted backlog has dropped by more than 50% to $233 million as of October 2010 as its international rigs work their way through their three year contracts. With limited free cash flow, Hercules has reduced its capital spending to levels that are unsustainable over the long term without repercussions to the quality of its fleet and its competitiveness. The negative outlook reflects an expectation of a continuing deterioration of the company's financial profile despite a short term pick up in operating performance in the GOM. For the last year, Hercules benefited from relatively high dayrates for its international rigs. But as these contracts roll off in 2011, Moody's expect renewals for these newer and higher spec rigs, but at lower dayrates. Therefore, Moody's is concerned that there may be weakening performance in the second half of 2011 putting the company in a challenging position to deal with debt maturities that begin in 2012. Near term liquidity is approximately $264 million comprised of $100 million of cash on hand and $164 million in availability under a senior secured bank revolving credit facility. However, availability under the revolver is subject to a minimum level of liquidity (currently $100 million) which effectively limits the "available" liquidity to $164 million. Availability is also subject to compliance with financial covenants that become more restrictive over time. For these reasons, barring a rapid improvement in operating performance, the repayment of debt through the sale of assets, or the issuance of junior capital, Moody's are concerned that liquidity may become strained by the end of 2011. Moody's last rating action on Hercules was on October 5, 2009, when Moody's assigned a B2 rating to the 10.5% senior secured notes due 2017 and affirmed the company's CFR and PDR at B2. Hercules Offshore, Inc., is headquartered in Houston, Texas. HUNTER FAN: S&P Gives Stable Outlook; Affirms 'B-' Rating --------------------------------------------------------- Standard & Poor's Rating Services said that it revised its outlook on Memphis, Tenn.-based Hunter Fan Co. to stable from negative. S&P also affirmed all existing ratings, including its 'B-' corporate credit rating on the company. Approximately $190 million of debt was outstanding as of July 31, 2010. In addition, S&P affirmed the 'B' issue-level rating on Hunter Fan's first-lien term loan due 2014. The recovery rating is '2', which indicates S&P's expectation for substantial (70%-90%) recovery of principle in the event of a payment default. At the same time S&P affirmed the 'CCC' issue-level rating on the company's second-lien term loan due 2014. The recovery rating is '6', indicating S&P's expectation of negligible (0-10%) recovery for debt holders in the event of a payment default. "The ratings affirmation and outlook revision reflect S&P's belief that Hunter Fan will continue to improve its operating performance and sustain its recently strengthened credit measures and liquidity," said Standard & Poor's credit analyst Rick Joy. Although sales declined slightly for the first nine months of fiscal 2010, the company experienced double-digit growth for the quarter ended Aug. 1, 2010, on higher demand for ceiling fans. EBITDA has improved a higher rate than sales over the first nine month of fiscal 2010, benefiting from volume gains and cost structure improvements, and margins widened. S&P believes the company's operating environment has stabilized in recent months and sales and profitability will improve over the near term. IMPERIAL INDUSTRIES: Posts $1.45-Mil. Net Loss in 3rd Quarter ------------------------------------------------------------- Imperial Industries Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $1.45 million on $6.46 million of net sales for the three months ended Sept. 30, 2010, compared with a net loss of $4.23 million on $6.86 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2010, showed $5.97 million in total assets, $7.25 million in total liabilities, and a stockholders' deficit of $1.28 million. S. Daniel Ponce, Imperial's chairman of the board, stated, "Our operating results for the third quarter of 2010 reflect the on- going weak market conditions present in the construction industry and low industry demand for our products. In view of the continuing weakness in the residential and commercial construction markets we remain focused on strengthening our core operations through cost reduction initiatives, expanding our product offerings and geographic reach to leverage our reduced overhead costs, as well as maintaining our liquidity and financial flexibility. We believe these initiatives will place us in a position to succeed and grow when economic conditions eventually improve." A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6ea4 A full-text copy of the earnings release is available for free at http://ResearchArchives.com/t/s?6ea5 About Imperial Industries Pompano Beach, Fla.-based Imperial Industries, Inc. (OTC BB: IPII) -- http://www.imperialindustries.com/-- manufactures and distributes stucco, plaster and roofing products to building materials dealers, contractors and others through its subsidiary, Premix-Marbletite Manufacturing Co. The Company sells its products primarily in the State of Florida and to a certain extent the rest of the Southeastern United States. * * * Grant Thornton LLP, in Fort Lauderdale, Fla., in its March 2010 report, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that Company has experienced a significant reduction in its sales volume. In addition, the independent auditors said that for the year ended December 31, 2009, the Company has a loss from continuing operations of roughly $1.2 million and is operating under a forbearance arrangement with its primary lender, which is set to expire on April 30, 2010. On April 30, 2010, the Company fully repaid the outstanding principal balance due under the Line of Credit with its primary lender and the Line of Credit was terminated effective May 11, 2010. INDEPENDENCE TAX: Posts $408,865 Net Income in Third Quarter ------------------------------------------------------------ Independence Tax Credit Plus L.P. filed its quarterly report on Form 10-Q, reporting net income of $408,865 on $1.75 million of total revenues for the three months ended Sept. 30, 2010, compared with a net loss of $107,206 on $1.71 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2010, showed $21.95 million in total assets, $42.66 million in total liabilities, and a partners' deficit of $20.71 million. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6ea0 About Independence Tax Based in New York, Independence Tax Credit Plus L.P. is a limited partnership which was formed under the laws of the State of Delaware on November 7, 1990. The general partner of the partnership is Related Independence Associates L.P., a Delaware limited partnership. The general partner of the General Partner is Related Independence Associates Inc., a Delaware corporation. The ultimate parent of the General Partner is Centerline Holding Company. The partnership was formed to invest as a limited partner in other partnerships that own apartment complexes that are eligible for the low-income housing tax credit enacted in the Tax Reform Act of 1986, some of which may also be eligible for the historic rehabilitation tax credit. The partnership's investment in each local partnership represents from 98% to 98.99% of the partnership's interests in the local partnership. The partnership originally held ownership interests in twenty-eight local partnerships. The partnership does not intend to acquire additional properties. * * * Trien Rosenberg Weinberg Ciullo & Fazzari LLP expressed substantial doubt about Independence Tax's ability as a going concern. The auditor notes that Company's three subsidiary partnerships' net losses aggregated $10,504,227 for 2009 Fiscal Year and $551,341 for 2008 Fiscal Year, and their assets aggregated $6,189,416 and $23,400,218 at March 31, 2010 and 2009, respectively. INTERNATIONAL GARDEN: Gets Approval of $7.5-Mil. in DIP Loans ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware, in a final order, authorized International Garden Products,, Inc., et al., to obtain postpetition secured financing from a syndicate of lenders led by Harris N.A., as administrative and collateral agent, and to use cash collateral. The Debtors were indebted to prepetition $30,669,990 in revolving loans and $13,000,000 in term loans. To secure the prepetition liabilities, the Debtors granted security interests and liens to the prepetition secured parties upon all of the Debtors assets and property. The Debtors would use the DIP financing and the cash collateral to fund their Chapter 11 case, pay suppliers and other parties. As reported in the Troubled Company Reporter on October 13, 2010, the DIP lenders have committed to provide up to $7.5 million postpetition revolving line of credit. The DIP Facility will mature on June 30, 2011. The maximum principal amount of DIP Facility outstanding at any one time must not exceed these amounts without the written consent of 100% of the DIP Lenders: (i) $2.75 million from the Petition Date through and including October 31, 2010; (ii) $4.75 million from November 1, 2010, through and including November 30, 2010; (iii) $7.25 from December 1, 2010 through and including December 31, 2010; (iv) $7.50 million from January 1, 2010, through January 31, 2011; (v) $7.25 from February 1, 2011, through and including February 28, 2011; (vi) $7.00 million from March 1, 2011, through and including March 31, 2011; (vii) $6.00 million from April 1, 2011, through and including April 30, 2011; and (viii) $1.50 million from May 1, 2011, through and including the maturity date. The DIP facility will incur interest at the DIP Agent's Base Rate plus the applicable margin (4.0% per annum), payable monthly in arrears. Base Rate is the greatest of (x) the prime commercial rate, or its equivalent, for U.S. Dollar loans to borrowers in the U.S., as announced from time to time by the DIP Agent, (y) the Federal Funds Rate plus 1/2 of 1%, and (z) the reserve adjusted LIBOR Quoted Rate for a one-month interest period plus 1.00%, calculated on an actual day 360 day basis for actual number of days elapsed. In the event of default, the interest will accrue at the DIP Agent's Base Rate plus the Applicable Margin plus 2.0% per annum. The Debtors will pay the DIP Lenders a fee of 0.25% per annum on the unused available DIP Facility, payable monthly in arrears to the DIP Agent for the ratable account of the DIP Lenders. A per annum participation fee equal to the 4.0% on the face amount of each letter of credit payable monthly in arrears will be paid to the lenders. A fee of 0.125% on the face amount of each letter of credit issued, or the term of which is extended, will be paid to the DIP Agent for its own account, together with the DIP Agent's standard documentary and processing charges in connection with the issuance, amendment, cancellation, negotiation, drawing under or transfer of any letter of credit. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant the DIP Lenders first-priority priming, valid, perfected and enforceable liens, and superpriority administrative expense claim status. In exchange for the use of cash collateral, prepetition secured parties will be granted: (i) additional and replacement security interests in and liens upon all the collateral, which security interests and liens will be junior to the DIP liens the carve-out, permitted prior encumbrances, and other liens consented to in writing by the required prepetition lenders; (ii) an allowed superpriority administrative expense claim; (iii) payment of hedging liability and funds transfer and deposit account liability, as and when due; and (iv) payment of costs, expenses, indemnities and other amounts with respect to the prepetition liabilities hereafter arising in accordance with the prepetition credit agreement and the interim court order. Accrual of interest at the default rate set forth in the prepetition credit agreement will become due and payable on the termination date with respect to the prepetition liabilities. About International Garden Products International Garden Products, Inc. was incorporated in 1996 as a holding company for Iseli Nursery, Inc., California Nursery Supply, Weeks Wholesale Rose Grower, and Old Skagit, Inc. The company's operating businesses, Iseli and Weeks, focus primarily on growing horticultural products for nationwide sale to independent garden centers, landscape suppliers, landscapers and similar parties. Iseli's is known in the industry as the premium source of dwarf conifers, Japanese maples and unique companion plants. Weeks is one of the largest wholesale breeders and growers of premium roses in the U.S. International Garden Products, Inc., and its affiliates filed for Chapter 11 protection on Oct. 4, 2010 (Bankr. Lead Case No. 10- 13207). International Garden estimated assets and debts at $10 million to $50 million in its Chapter 11 petition. Andrew R. Remming, Esq., at Morris, Nichols, Arsht & Tunnell, serves as bankruptcy counsel. Bryan Cave LLP is the legal counsel. FTI Consulting is the restructuring advisor. Garden City Group is the claims and notice agent. The debtor-affiliates are Weeks Wholesale Rose Grower (Bankr. D. Del. Case No. 10-13208), California Nursery Supply (Case No. 10- 13209), Iseli Nursery, Inc. (Case No. 10-13210), and Old Skagit, Inc. (Case No. 10-13211). INTERNATIONAL INC: S&P Assigns 'BB-' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its preliminary 'BB-' corporate credit rating to Irving, Texas-based Darling International Inc. The outlook is stable. At the same time, S&P assigned a preliminary 'BB+' issue-level rating (two notches above the corporate credit rating) to Darling's proposed $300 million senior secured term loan B facility maturing 2016, with a recovery rating of '1', indicating S&P's expectation for very high (90%-100%) recovery in the event of a payment default. S&P also assigned a preliminary 'B' issue-level rating (two notches below the corporate credit rating) to Darling's proposed $250 million senior unsecured notes maturing 2018, with a recovery rating of '6', indicating S&P's expectations for negligible (0%- 10%) recovery in the event of a payment default. The company intends to use debt proceeds totaling about $725 million, including borrowings on an underwritten one-year $250 million bridge facility (not rated), $175 million drawn on a proposed $325 million revolving credit facility (not rated) maturing 2015, and the proposed $300 million senior secured term loan B, together with cash on hand, to purchase Griffin Industries and pay fees and expenses. (S&P anticipates that proceeds from the $250 million senior unsecured notes will be used to repay borrowings on the $250 million bridge facility if drawn.) "The preliminary 'BB-' corporate credit rating reflects S&P's opinion that Darling has a weak business risk profile and a significant financial risk profile pro forma for the pending acquisition," said Standard & Poor's credit analyst Christopher Johnson. ISE LIMITED: Follows ISE Corporation in Filing for Chapter 11 ------------------------------------------------------------- ISE Limited has filed a voluntary petition to reorganize its business under Chapter 11 of the United States Bankruptcy Code. As previously announced on August 10, 2010, ISE Limited's principal operating subsidiary, ISE Corporation, filed for Chapter 11 bankruptcy protection approximately three months ago. Both bankruptcy filings were made in the United States Bankruptcy Court for the Southern District of California. ISE continues to operate its business during the Chapter 11 restructuring process and is currently evaluating various restructuring alternatives, which are likely to include a sale of all or a substantial portion of ISE's business and assets. In the event a sale transaction is consummated, the proceeds of such transaction will be applied first against bankruptcy administrative and priority expenses and then the outstanding claims of ISE's creditors as dictated by the United States Bankruptcy Code. ISE believes that it is unlikely that any proceeds will be available thereafter for distribution to the stockholders of ISE Limited. About ISE Limited ISE Limited --- http://www.isecorp.com/-- is a developer, manufacturer and distributor of Energy Storage Systems (ES Systems) and Heavy Duty Hybrid-Electric Drive Systems (Hybrid Systems). Established in 1995, ISE is headquartered in San Diego, California. ISE's history of innovation and technological leadership has resulted in the design and development of systems and components that deliver superior operating performance. ISE Ltd.'s operating subsidiary, ISE Corporation, filed a voluntary petition to reorganize its business under Chapter 11 on August 10 (Bankr. S.D. Calif. Case No. 10-14198). Marc J. Winthrop, Esq., at Winthrop Couchot Professional Corp., serves as counsel to the Debtor. The Debtor estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. JAYEL CORP: Won't Give Up Info., Now Wants Case Dismissed --------------------------------------------------------- Jayel Corporation now wants the U.S. Bankruptcy Court for the Western District of Arkansas to dismiss its Chapter 11 case. Bankruptcy Judge Ben Barry on November 4 had rejected the request of First National Bank of Fort Smith to dismiss the Debtor's Chapter 11 case or in the alternative to convert it to a Chapter 7. The Debtor relates that at the confirmation hearing, the Court ruled that the Debtor would have 21 days from October 19th to amend its petitions and schedules or the case would be dismissed. The Debtor states that it will be unable to comply. The Debtor attempted to collect the necessary information; however, there are some items the Debtor will be unable to provide in a timely manner. Furthermore, the Debtor is afraid of the detrimental impact to the Debtor's business which would occur if the Debtor had to provide a bankruptcy notification to all the tenants who had security deposits at the time the case was filed. About Jayel Corporation Bentonville, Arkansas-based Jayel Corporation filed for Chapter 11 bankruptcy protection on March 5, 2010 (Bankr. W.D. Ark. Case No. 10-71120). Donald A. Brady, Jr., Esq., at Blair & Brady Attorneys At Law, represents the Debtor. The Company disclosed $14,532,395 in assets and $9,317,149 in liabilities as of the Petition Date. KANSAS CITY SOUTHERN: Moody's Raises Corp. Family Rating to 'Ba3' ----------------------------------------------------------------- Moody's Investors Service has upgraded the ratings of Kansas City Southern, corporate family rating to Ba3 from B1, and Kansas City Southern de Mexico S.A. de C.V., corporate family rating to B1 from B2. The ratings outlook for both KCS and KCSM is positive. At the same time, Moody's raised the debt ratings of The Kansas City Southern Railway Company and Southern Capital Corporation and maintained their positive outlooks. The rating were raised in recognition of dramatically improved operating results realized in 2010 at both KCSR, the U.S. railroad, and Mexican railroad KCSM, and expectations that both entities will continue to exhibit robust financial performance over the next few years as demand will continue to grow in most freight groups at the railroads in a robust pricing environment. The ratings upgrades also reflect the important steps that KCS has taken in re-financing a substantial amount of debt and improve its debt maturity profile. Both KCSR and KCSM have experienced a rebound in freight volume in 2010 at a faster pace than the rest of the Class I railroad sector. This has resulted in operating margins, returns, and cash flow that are supportive of the ratings upgrades. After dramatic weakening in volume in 2009 owing to recessionary conditions that severely impacted the railroad industry, KCSR and KCSM have seen unexpectedly strong weekly volume rebounds of, on average, 10% and 25%, respectively throughout the year to October 2010. This has supported strong pricing growth in 2010 (approximately 6% year- over-year), which the company expects to maintain going into 2011. Because of these factors, both the U.S. and the Mexican railroads have seen operating ratios drop well below 80% in 2010, and it is expected that they will be able to sustain this measure going forward. Along with the rebound in operating performance, the company has undertaken re-financing steps which have helped to reduce leverage and improve its debt maturity profile. In addition to the April 2010 $225 million public offering of KCS stock which was used primarily to prepay high coupon KCSR and KCSM debt coming due between 2012 and 2016, the company has recently announced a planned tender for KCSM's 7-5/8% notes due 2013 and 12-1/2% notes due 2016, to be financed through debt issued by KCSM. Through this program of re-financing, the company has been able to not only reduce debt by almost $350 million during the year, but has also materially improved its debt maturity schedule. All 2012 maturities have been repaid, while 2013 maturities have been reduced substantially. Nevertheless, after the current refinancing is completed, KCS will still face approximately $450 million of maturities in 2013, suggesting the need for continued re-financing efforts over the next two years. Neither KCSR nor KCSM guarantees the other's debt, nor are the obligations of KCSR and KCSM cross defaulted to each other. Therefore, Moody's provides separate corporate family ratings for both KCSM and KCS. The positive outlooks for both KCS and KCSM reflect Moody's expectations that the companies will continue to see steady revenue growth over the near term at improving margins, which will result in improved earnings and positive free cash flow over this period. This could result in credit metrics that are supportive of higher ratings at both companies. Moody's anticipates that such an outcome could be achieved even under a slow macroeconomic growth scenario in North America. Ratings at KCS or KCSM could be upgraded if their respective railroad operations were to show steady and sustained growth in yield and volume the next 12-18 months without any material deterioration in service metrics. The railroads would have to demonstrate a continuous track record of strong positive free cash flow generation while maintaining capital investments at current levels. For KCS, operating ratios at its U.S. operations (KCSR and U.S. guarantors) would need to remain consistently in the low- 70% range throughout the cycle to warrant upward rating consideration, with Debt/EBITDA falling below 3.0 times and EBIT/Interest above 3.5 times. At KCSM, Debt/EBITDA of below 3.5 times and EBIT/Interest above 3.0 times would need to be demonstrated for upward rating consideration. A restoration of more robust cash balances would also factor into a rating upgrade at KCSM. Ratings at KCS or KCSM could face downward revision if operating conditions were to weaken to a point that either railroad's Debt/EBITDA exceeds 4.0 times, if EBIT/Interest falls below 2.0 times, or if deterioration in liquidity becomes a constraint on either company's operating or investing activities. Upgrades: Issuer: Kansas City Southern -- Probability of Default Rating, Upgraded to Ba3 from B1 -- Corporate Family Rating, Upgraded to Ba3 from B1 -- Multiple Seniority Shelf, Upgraded to (P)B1, (P)B2 from (P)B2, (P)B3 Issuer: Kansas City Southern Railway Company (The) -- Multiple Seniority Shelf, Upgraded to (P)B1, (P)B2 from (P)B2, (P)B3 -- Senior Secured Bank Credit Facility, Upgraded to Ba1 from Ba2 -- Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B2 Issuer: Kansas City Southern de Mexico, S.A. de C.V. -- Corporate Family Rating, Upgraded to B1 from B2 -- Senior Secured Bank Credit Facility, Upgraded to Ba3 from B1 -- Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B2 Issuer: Southern Capital Corporation -- Senior Secured Equipment Trust, Upgraded to Ba1 from Ba2 The last rating action was on June 18, 2010, when Moody's changed the ratings outlook for both KCS and KCSM to positive from stable. Kansas City Southern operates a Class I railway in the central U.S. and, through its wholly-owned subsidiary Kansas City Southern de Mexico, S.A. de C.V., owns the concession to operate Mexico's northeastern railroad. KRATON POLYMERS: S&P Puts 'B+' Rating on CreditWatch Positive ------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed all its ratings, including the 'B+' corporate credit rating, on Houston, Texas-based Kraton Polymers LLC on CreditWatch with positive implications. The CreditWatch listing reflects S&P's expectation that improved credit metrics could warrant a modestly higher rating after its review of the company's operating prospects and industry trend expectations. "The CreditWatch listing also reflects S&P's view that Kraton is likely to continue to benefit from favorable pricing trends and volumes gains in the near term," said Standard & Poor's credit analyst Henry Fukuchi. If business conditions remain stable for the next few quarters and profitability remains close to current levels, Kraton's financial profile could support a higher rating. The ratings on Kraton reflect the company's weak business risk profile, which stems from its narrow focus on the styrenic block copolymers market and vulnerability to raw material and demand cycles. These negative factors are balanced by the company's ongoing efforts to maintain favorable pricing relative to raw material market fluctuations, good geographic diversification, improved operating efficiencies through various cost reductions, and an improved financial profile. S&P will resolve the CreditWatch listing after its review of fourth-quarter results and business prospects for the next few quarters. LA JOLLA PHARMACEUTICAL: Posts $469,000 Net Loss in Q3 2010 ----------------------------------------------------------- La Jolla Pharmaceutical Company filed its quarterly report on Form 10-Q, reporting a net loss of $469,000 on zero revenue for the three months ended Sept. 30, 2010, compared with a net loss of $698,000 on no revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2010, showed $7.43 million in total assets, $8.15 million in total liabilities, all current, and $92,000 in convertible preferred stock, and a stockholders' deficit of $806,000. Ernst & Young LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has incurred recurring operating losses, an accumulated deficit of $424.3 million as of December 31, 2009, and has no current source of revenues or financing. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6ea9 About La Jolla Pharmaceutical San Diego, Calif.-based La Jolla Pharmaceutical Company (OTC BB: LJPC) -- http://www.ljpc.com/-- is a biopharmaceutical company that has historically focused on the development and testing of Riquent as a treatment for Lupus nephritis. LEHMAN BROTHERS: Asks for Nod to Enter Into Transactions -------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors seek approval from the U.S. Bankruptcy Court for the Southern District of New York to enter into hedging transactions. The Debtors made the move to reduce or eliminate the risk associated with fluctuations in currency exchange rates that could cause the value of their foreign assets to deteriorate, according to Lori Fife, Esq., at Weil Gotshal & Manges LLP, in New York. The Debtors' foreign assets, which include real estate assets and private equity, involve transactions that are denominated in foreign currencies and entitle the Debtors to receive future payment in foreign currencies. As a result, the value of the foreign assets is subject to volatility in the foreign currency exchange markets. The Debtors' estimate that their total exposure to foreign exchange risk in connection with their foreign assets is approximately $1.8 billion as of June 30, 2010. In connection with the hedging transactions, the Debtors propose to implement a protocol governing the transactions. Under the protocol, the Official Committee of Unsecured Creditors' consent is required before the Debtors can enter into any hedging transactions involving foreign assets whose value is more than $75 million. Below this threshold, the Creditors' Committee will be provided a notice and an opportunity to object. The Creditors' Committee will also be provided a notice of any meeting where any hedging transactions will initially be proposed, together with so-called "information package" containing all relevant documentation and analyses. As part of the transactions, the Debtors also seek a court ruling authorizing them to post cash, property or other collateral and to grant first priority liens on the collateral to secure their obligations under the hedging transactions. "The Debtors cannot engage in the necessary hedging transactions without granting first priority liens on the collateral because hedging counterparties will not enter into and will not accept the risk associated with such transactions on an unsecured basis," Ms. Fife says in court papers. The Creditors' Committee has expressed support to the Debtors, saying the proposed hedging transactions are well designed to safeguard their foreign assets against the foreign exchange risks. The Court will consider approval of the Debtors' request at the hearing scheduled for November 17, 2010. 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 September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed 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. 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. On September 19, 2008, the Honorable Gerard E. Lynch, Judge 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 has 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. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. 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 215/945-7000) LEHMAN BROTHERS: Proposes Settlement with FNI, et al. ----------------------------------------------------- Debtors LB Somerset LLC and LB Preferred Somerset LLC seek court approval of an agreement to settle the claims of their joint venture partner, Falls of Neuse Investments LLC. FNI filed a $7.5 million claim against each of the Lehman units for allegedly violating an agreement that was executed in connection with their joint venture. FNI also filed another $7.5 million claim against Lehman Brothers Holdings Inc. Under the settlement deal, LB Somerset LLC and LB Preferred agreed to drop their membership in the joint venture and sell their stake in it for $150,000 to KBIA Somerset Investments LLC and KBIA Preferred LLC. In return, each of the $7.5 million claims will be withdrawn and the Lehman units' obligations under the agreement with FNI will be assumed by the KBIA entities. The proposed settlement also calls for the dismissal of a lawsuit FNI filed against the Lehman units in Delaware, which was stayed following their bankruptcy filing late last year. A full-text copy of the settlement agreement is available for free at http://bankrupt.com/misc/LBHI_SettlementFNI.pdf The settlement, if approved, would also relieve the Lehman units from investing additional capital in the sum of $4.5 million in the joint venture and from possible litigation with Somerset Properties SPE LLC and LNR Partners Inc. Somerset SPE is the owner of six office buildings and a parking facility in Raleigh, North Carolina, in which the Lehman units hold a stake. The properties face possible foreclosure action from LNR Partners, special servicer of the loans held by CSFB 2001-CP4 Bland Road LLC. The loans, which are secured by the properties, are reportedly in default. As of June 30, 2010, about $29.5 million remained outstanding on the loans. If LNR prevailed in its foreclosure action, the joint venture would likely be rendered valueless because its only significant asset is its membership interest in Somerset SPE whose only valuable assets are its stake in the properties, according to Shai Waisman, Esq., at Weil Gotshal & Manges LLP, in New York. Mr. Waisman adds that creditors would likely be deprived of any meaningful recovery since the Lehman units' only assets are their membership interests in the joint venture. The Court will consider approval of the settlement at the hearing scheduled for December 15, 2010. Deadline for filing objections is November 15, 2010. 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 September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed 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. 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. On September 19, 2008, the Honorable Gerard E. Lynch, Judge 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 has 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. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. 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 215/945-7000) LEHMAN BROTHERS: Proposes to Assign Swap Agreements to SwapCo ------------------------------------------------------------- Lehman Brothers Special Financing Inc. and Lehman Brothers Financial Products Inc. seek court approval to assume and assign their interests in swap agreements with a group of trusts. The trusts include IMPAC Secured Assets Trust 2006-3, IMPAC Secured Assets Trust 2007-3, First Franklin Mortgage Loan Trust 2006-FF8 and Harbourview CDO III Limited. LBSF and LBFP propose to assume and assign their interests to 1271 SwapCo. Ltd., a company based in Cayman Islands. SwapCo was formed solely to enter into swap deal as an intermediary between Lehman Brothers Holdings Inc. or its affiliated debtors and counterparties to the swap deal. LBSF holds all the residual economic interests in SwapCo. Under the proposed transaction, LBSF and LBFP will be released of their obligations under the swap agreements. Meanwhile, LBHI's obligations including its role as guarantor or credit support provider won't be assumed. Deutsche Bank AG will guarantee the payment of SwapCo to the trusts under the swap agreements. As condition to the assignment, each trust will be required to make payments owed either to LBSF or LBFP upon assumption of the swap agreements. LBSF or LBFP will receive payment of $75,047,655 from IMPAC Secured Assets Trust 2006-3; $17,931,999 from IMPAC Secured Assets Trust 2007-3; and $7,712,971 from Harbourview. First Franklin will return to LBSF $7,173,160 worth of its collateral. To effect the assumption and assignment, novation agreements will be executed by SwapCo, LBSF, LBFP and the trusts. A list of the swap agreements to be assumed and assigned is available without charge at: http://bankrupt.com/misc/LBHI_SwapAgreementsSwapco.pdf LBSF and LBFP also ask the Court for approval to reach new swap agreements with SwapCo and interest rate cap agreements with Deutsche Bank AG, and to pay the bank a fee at the market rate for those transactions. The fee for each transaction will have to be approved by the Official Committee of Unsecured Creditors. The Court will consider approval of the requests at the hearing scheduled for December 15, 2010. Deadline for filing objections is December 8, 2010. 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 September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed 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. 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. On September 19, 2008, the Honorable Gerard E. Lynch, Judge 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 has 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. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. 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 215/945-7000) LEHMAN BROTHERS: LBSF Wants to Sell Stake in Libro Companhia ------------------------------------------------------------ Lehman Brothers Special Financing Inc. asks the Court to approve the sale of its debt and equity interest in Libro Companhia Securitizadora de Creditos Financeiros. Libro is a Brazil-based company formed to invest in fixed income and distressed assets in the Latin country. LBSF and a non- debtor affiliate LBI Group Inc. own all outstanding equity of Libro and certain notes it issued. LBSF and LBI Group propose to sell their debt and equity interest to Jive Investments Holding Ltd. for BRL27 million or more than US$15.8 million, of which about BRL6,241,700 will go to LBSF. LBSF will also get an additional BRL15,047,200 to be paid by LBI Group from its share of the purchase price. Under the deal, Jive Investments will assume the obligations and liabilities of LBSF and LBI Group. It will be paid 2% of the purchase price or approximately BRL540,000 as break-up fee if the deal does not push through and the sellers accept a better sale proposal. It will also be reimbursed up to US$50,000 for its expenses if the sale is not completed by March 31, 2011. The deal is formalized in a 51-page agreement, a copy of which is available at http://bankrupt.com/misc/LBHI_JIHAgreement.pdf Libro currently does not have employees and ongoing business. As of October 30, 2010, its only assets are three portfolios of fixed income and distressed assets, more than BRL31.1 million in cash, and a real property worth more than BRL7.3 million, according to court papers. The Court will consider approval of the proposed sale at the hearing scheduled for November 22, 2010. Deadline for filing objections is December 1, 2010. 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 September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed 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. 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. On September 19, 2008, the Honorable Gerard E. Lynch, Judge 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 has 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. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. 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 215/945-7000) LEHMAN BROTHERS: Amends Archstone Loan Restructuring Terms ---------------------------------------------------------- Lehman Brothers Holdings Inc. asks the Bankruptcy Court to approve an amendment to the terms governing the restructuring of investments made in Archstone-Smith Trust. The amendment provides for the conversion of certain corporate loans made to Archstone into new equity interests instead of into a new fully-funded term loan. The initial terms of the restructuring, which was approved by the Court on May 25, 2010, provides for the conversion to new equity interests of the $5.2 billion loan provided by LBHI's affiliates, Bank of America and Barclays Capital Real Estate Inc. to finance the buyout of Archstone. The terms also provide that the corporate loans, which have an aggregate principal amount of $237 million, would have remained outstanding as a new fully-funded term loan. LBHI, Bank of America and Barclays Capital are still negotiating the restructuring and, thus, its terms are not yet final, according to Shai Waisman, Esq., at Weil Gotshal & Manges LLP, in New York. A definitive agreement on the terms of the restructuring will require final approval by Barclays Capital and Bank of America. LBHI and its affiliated debtors will not proceed with the restructuring without the final approval, Mr. Waisman says. In a declaration, Jeffrey Fitts, co-head of LBHI's real estate group, says the changes made to the restructuring provide the best framework for protecting and maximizing the value of the investments made in Archstone and that they are immaterial in the context of the overall value of the restructuring. "Once effectuated, the restructuring, as modified, will further reduce the leverage of the capital structure of Archstone by an additional amount of approximately $237 million for a total reduction of approximately $5.4 billion by effect of the equity conversion," Mr. Fitts says. The proposed changes to the restructuring drew support from the Official Committee of Unsecured Creditors. It asks the Court to approve the proposed changes so long as they won't adversely affect the Debtors' claims or interests with respect to Archstone. The Court will hold a hearing on November 17, 2010, to consider approval of the proposed amendment. Deadline for filing objections is November 15, 2010. 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 September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed 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. 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. On September 19, 2008, the Honorable Gerard E. Lynch, Judge 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 has 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. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. 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 215/945-7000) LEHMAN BROTHERS: SIPA Trustee Sends Probe Report for May-Oct. ------------------------------------------------------------- James Giddens, the trustee for Lehman Brothers Inc.'s SIPA proceeding, submitted with the Court a State of the Estate presentation. The presentation, according to the LBI Trustee, was filed in concurrence with the interim investigation report he submitted on October 26. The LBI Trustee said he has addressed 125,000 customer claims seeking return of more than $180 billion. Specifically, the LBI Trustee presented this table showing the customer claims process: Total Amount No. of Claims (in millions) ------------- ------------- Total Customer Claims 124,977 $180,385.8 Claims Resolved by transfers to Barclays 72,527 $43,249.3 Claims Resolved by transfers to Neuberger Berman 38,106 $45,566.7 Claims Resolved through Trustee's Prime Brokerage Protocol 287 $3,485.3 Claims Determined through the Claims Process 14,057 $88,084.5 Total Customer Claims closed through the Claims Process 10,496 $47,612.7 Claims Allowed 837 $9,476.4 Claims Reclassified as General Creditor Claims 2,784 $10,457.3 Claims Denied 6,875 $27,679.0 Total Unresolved Customer Claims 3,561 $40,471.8 The LBI Trustee disclosed that as of September 30, 2010, LBI's assets under his control totals $20.640 billion, composed of $2.226 billion of total cash and cash equivalents and $18.414 billion of total securities. A full-text copy of the State of the Estate, dated October 28, is available for free at http://bankrupt.com/misc/lbisote102810.pdf Trustee Files Corrected Chart The LBI Trustee filed a corrected version of the chart entitled "Claims Determined Through the Claims Process" contained in his interim report for the period from May 11 to October 26, 2010. A copy of the Chart is available for free at: http://bankrupt.com/misc/LhmSIPA4thChrt.pdf 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 September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed 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. 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. On September 19, 2008, the Honorable Gerard E. Lynch, Judge 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 has 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. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. 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 215/945-7000) LIFECARE HOLDINGS: Posts $1.7 Million Net Loss in Q3 2010 --------------------------------------------------------- LifeCare Holdings, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.7 million on $85.5 million of revenue for the three months ended September 30, 2010, compared with a net loss of $1.5 million on $84.3 million of revenue for the same period last year. The Company's balance sheet at September 30, 2010, showed $472.5 million in total assets, $482.1 million in total liabilities, and a stockholders' deficit of $9.6 million. The Company says in the filing that it is are required to comply on a quarterly basis with certain financial and other covenants under its senior secured credit facility, including an interest coverage ratio test and a maximum leverage ratio test. The Company is currently in compliance with the covenants under its senior secured credit facility for the four quarter period ended September 30, 2010. "Based upon our current projections, we believe that it is probable that we will not be able to comply with certain financial covenants under our senior secured credit facility during the next twelve months." "In the event we are unable to comply with the covenants under our senior secured credit facility, an event of default may occur. If we are unable to exercise a cure right or obtain waivers or amendments to cure such event of default, the lenders would be entitled to take various actions, including the acceleration of amounts due under our senior secured credit facility, terminating our access to our revolving credit facility and all actions permitted to be taken by a secured creditor. Acceleration under our senior secured credit facility would further create a cross- default under our senior subordinated notes indenture. Such an acceleration would have a material adverse effect on our financial position, results of operations and cash flow and raise substantial doubt about our ability to continue as a going concern." A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6ebb About LifeCare Holdings Plano, Tex.-based LifeCare Holdings, Inc. -- http://www.lifecare-hospitals.com/-- operates 19 hospitals located in nine states, consisting of eight "hospital within a hospital" facilities (27% of beds) and 11 freestanding facilities (73% of beds). Through these 19 long-term acute care hospitals, the Company operates a total of 1,057 licensed beds and employ approximately 3,200 people, the majority of whom are registered or licensed nurses and respiratory therapists. Additionally, the Company holds a 50% investment in a joint venture for a 51-bed LTAC hospital located in Muskegon, Michigan. LifeCare Holdings, Inc., carries Moody's Investors Service's "Caa1" corporate family and probability of default ratings. The outlook remains negative. LITHIUM TECHNOLOGY: Nets $2 Million from Sale of Stock ------------------------------------------------------ Lithium Technology Corporation has closed a $2,000,000 common stock financing with a strategic investor in a private placement. The investor purchased a total of 83,333,333 shares of LTC common stock. The proceeds will be used for working capital. LTC has also entered into a letter of intent with this investor which provides for a series of strategic transactions as well as additional financing. The intention is that this initial financing will be followed by these additional strategic transactions in the near term. Pursuant to the proposed strategic transactions, LTC would deliver 15,000 cells as part of a development program of electric vehicles. An automotive OEM supplier is expected to be involved in the follow-on transaction as well. The proposed strategic transaction would also include a multi-year agreement for the collaboration on large volume battery systems for motive applications. "We are excited about this strategic opportunity," said Theo Kremers, CEO of LTC. "The collaboration will give us access to the large automotive market as well as the ability to meet the requirements and regulations for this market." Mr. Kremers also said, "The quality of our large format cylindrical cells manufactured in Nordhausen clearly shows LTC's ability to meet the demands of the highly competitive automotive market". The strategic transaction is subject to completion of definitive agreements and requisite approvals. The closing is expected to take place by year end. About Lithium Technology Plymouth Meeting, Pa.-based Lithium Technology Corporation is a global manufacturer and provider of rechargeable energy storage solutions for diverse applications. The Company's balance sheet as of December 31, 2009, showed $11,468,000 in assets, $29,308,000 of debts, and a stockholders' deficit of $17,840,000. The Company reported a net loss of $10,510,00 on $7,371,000 of revenue for 2009, compared with a net loss of $6,414,000 on $4,167,000 of revenue for 2008. Amper, Politziner & Mattia LLP, in Edison, N.J., expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company as recurring losses from operations since inception and has a working capital deficiency. LOCATEPLUS HOLDINGS: Earns $25,480 in September 30 Quarter ---------------------------------------------------------- LocatePLUS Holdings Corporation filed its quarterly report on Form 10-Q, reporting net income of $25,480 on $1.9 million of revenue for the three months ended September 30, 2010, compared with a net loss of $167,225 on $1.8 million of revenue for the same period last year. The Company has sustained net losses of $639,916 and $2.8 million for the fiscal periods ended September 30, 2010, and December 31, 2009, respectively. The Company has an accumulated deficit of $53.9 million, a stockholders' deficit of $9.0 million and a working capital deficit of $6.3 million at September 30, 2010. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at September 30, 2010, showed $2.5 million in total assets, $11.5 million in total liabilities, and a stockholders' deficit of $9.0 million. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6eb5 About LocatePLUS Holdings Beverly, Mass.-based LocatePLUS Holdings Corporation, through itself and its wholly-owned subsidiaries LocatePLUS Corporation, Worldwide Information, Inc., Entersect Corporation, Dataphant, Inc., and Employment Screening Profiles, Inc. are business-to- business, business-to-government and business-to-consumer providers of public information via its proprietary data integration solutions. LOVELL KING: Case Summary & 13 Largest Unsecured Creditors ---------------------------------------------------------- Joint Debtors: Lovell King, II Connie Z. King 2747 Anointed Place Nanjemoy, MD 20662 Bankruptcy Case No.: 10-35773 Chapter 11 Petition Date: November 11, 2010 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Paul Mannes Debtor's Counsel: Kimberly D. Marshall, Esq. 603 Post Office Road, Suite 209 Waldorf, MD 20602 Tel: (301) 893-2311 Fax: (301) 893-0392 E-mail: somdbankruptcy@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Joint Debtors' 13 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mdb10-35773.pdf MARIAH RE: S&P Assigns 'B' Rating to Note Issuances --------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B(sf)' rating to the notes issued by Mariah Re Ltd. The notes cover losses in the covered area resulting from severe thunderstorms. Losses will be calculated on an annual aggregate basis. Mariah Re is a special-purpose Cayman Islands exempted company licensed as a Class B insurer in the Cayman Islands. Wilmington Trust (Cayman) Ltd., as share trustee, holds all of Mariah Re's issued and outstanding shares in trust for charitable or similar purposes. The cedent is American Family Mutual Insurance Co. on behalf of itself and its affiliates. Standard & Poor's does not maintain an interactive rating on AmFam. However, because covered losses are linked to industry losses as calculated by the Property Claim Services, there is no reliance on AmFam's underwriting and claims- processing capabilities. In addition, AmFam will prepay the reinsurance premium quarterly for the upcoming accrual period for the tenor of the transaction, which mitigates any credit exposure noteholders would have to it. Ratings List New Rating Mariah Re Ltd. Notes issue B(sf) MARSHALL & ILSLEY: Moody's Reviews Ratings on Various Debt ---------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade the debt ratings of Marshall & Ilsley Corporation (senior debt at Baa1). At the same time, Moody's placed M&I's subsidiaries under review for possible downgrade, including its lead bank, M&I Marshall & Ilsley Bank (bank financial strength at C, long-term deposits at A3). The holding company's Prime-2 short-term rating was also placed on review for possible downgrade. However, the Prime-2 short-term ratings at M&I's banking subsidiaries were affirmed. The review will focus on the impact of the ongoing weakness in M&I's real estate portfolios, both commercial and residential. Moody's notes that M&I has reported eight consecutive quarterly losses, driven by very elevated loan loss provisioning tied to real estate loans. Although M&I's current capital position is good and was boosted by significant common equity issuance in 2009, its capital metrics have fallen behind those of many similarly-rated peers, most of which have already returned to profitability. Nonetheless, the rating agency added that M&I's nonperforming assets have declined for five consecutive quarters and are down 27% from their peak in the summer of 2009. That trend, as well as the positive trend in M&I's delinquencies, suggests that although near-term credit costs could remain elevated, they are likely to shrink over the long-term absent more significant housing market deterioration. However, in the event that M&I does not return to profitability over the next several quarters, its capital position could fall further behind those of its peers. In addition, Moody's would become more concerned that a valuation allowance could be set up against M&I's sizable deferred tax asset. Moody's noted that M&I's long-term ratings may move down by up to two notches, though that outcome is less likely. Nonetheless, in that scenario, M&I's holding company Prime-2 rating would be downgraded to Prime-3, and it was therefore placed on review for possible downgrade. Notwithstanding the review, Moody's noted that M&I's ratings continue to be supported by its franchise strengths, specifically its large direct banking business in its home state of Wisconsin and its ample liquidity profile. Moody's last rating action on M&I was on December 4, 2009 when its ratings were downgraded by one notch. On Review for Possible Downgrade: Issuer: M&I Bank FSB -- Bank Financial Strength Rating, Placed on Review for Possible Downgrade, currently C -- Issuer Rating, Placed on Review for Possible Downgrade, currently A3 -- OSO Senior Unsecured OSO Rating, Placed on Review for Possible Downgrade, currently A3 -- Senior Unsecured Deposit Rating, Placed on Review for Possible Downgrade, currently A3 Issuer: M&I Capital Trust C -- Preferred Stock Shelf, Placed on Review for Possible Downgrade, currently (P)Baa3 Issuer: M&I Capital Trust D -- Preferred Stock Shelf, Placed on Review for Possible Downgrade, currently (P)Baa3 Issuer: M&I Captial Trust E -- Preferred Stock Shelf, Placed on Review for Possible Downgrade, currently (P)Baa3 Issuer: M&I LLC -- Multiple Seniority Medium-Term Note Program, Placed on Review for Possible Downgrade, currently (P)Baa2, (P)Baa1 -- Multiple Seniority Shelf, Placed on Review for Possible Downgrade, currently a range of (P)Ba1 to (P)Baa1 -- Senior Unsecured Medium-Term Note Program, Placed on Review for Possible Downgrade, currently (P)Baa1 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently Baa1 Issuer: M&I Marshall & Ilsley Bank -- Bank Financial Strength Rating, Placed on Review for Possible Downgrade, currently C -- Issuer Rating, Placed on Review for Possible Downgrade, currently A3 -- OSO Senior Unsecured OSO Rating, Placed on Review for Possible Downgrade, currently A3 -- Multiple Seniority Bank Note Program, Placed on Review for Possible Downgrade, currently Baa1, A3 -- Subordinate Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently Baa1 -- Senior Subordinated Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently Baa1 -- Senior Unsecured Deposit Note/Takedown, Placed on Review for Possible Downgrade, currently A3 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently A3 -- Senior Unsecured Deposit Rating, Placed on Review for Possible Downgrade, currently A3 Issuer: M&I Marshall & Ilsley Investment II Corp. -- Preferred Stock Preferred Stock, Placed on Review for Possible Downgrade, currently Baa3 Issuer: Marshall & Ilsley Corporation -- Multiple Seniority Medium-Term Note Program, Placed on Review for Possible Downgrade, currently (P)Baa2, (P)Baa1 -- Senior Unsecured Commercial Paper, Placed on Review for Possible Downgrade, currently P-2 -- Senior Unsecured Medium-Term Note Program, Placed on Review for Possible Downgrade, currently (P)Baa1 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently Baa1 Outlook Actions: Issuer: M&I Bank FSB -- Outlook, Changed To Rating Under Review From Negative Issuer: M&I Capital Trust C -- Outlook, Changed To Rating Under Review From Negative Issuer: M&I Capital Trust D -- Outlook, Changed To Rating Under Review From Negative Issuer: M&I Captial Trust E -- Outlook, Changed To Rating Under Review From Negative Issuer: M&I LLC -- Outlook, Changed To Rating Under Review From Negative Issuer: M&I Marshall & Ilsley Bank -- Outlook, Changed To Rating Under Review From Negative Issuer: M&I Marshall & Ilsley Investment II Corp. -- Outlook, Changed To Rating Under Review From Negative Issuer: Marshall & Ilsley Corporation -- Outlook, Changed To Rating Under Review From Negative Marshall & Ilsley Corporation, headquartered in Milwaukee, Wisconsin, reported assets of $52 billion at September 30, 2010. MARSICO HOLDINGS: S&P Assigns 'CCC+' Counterparty Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'CCC+' counterparty credit rating to Marsico Holdings LLC and its 'CCC-' rating to its $600 million senior subordinated notes due 2020. S&P has withdrawn the D rating on the $600 million senior subordinated notes due 2016 originally issued by Marsico Parent Co. LLC, as these notes have been exchanged for the new notes that Marsico Holdings LLC issued. The 'CCC+' rating on the $1 billion senior secured term loan due December 2014 was not affected by the debt restructuring, although Marsico Holdings LLC is now the designated borrower and has effectively assumed all repayment responsibilities from Marsico Parent Co. LLC. Consequently, S&P has withdrawn its 'SD' counterparty credit rating on Marsico Parent Co. LLC. The rating on Marsico Holdings LLC factors the high degree of business and financial risks at this boutique asset manager. On the financial side, the recently completed debt restructuring gives Marsico some wiggle room with respect to servicing the $600 million 10.625% senior subordinated notes, because the maturity has been extended four years to 2020 and periodic cash interest expense is a function of the available cash generated from fundamental operations during the quarter. Specifically, if available cash generated during the quarter is below certain thresholds, interest may be capitalized (i.e., paid-in-kind). The aggregate amount of debt at Marsico Holdings LLC, after the debt exchange, is about $1.6 billion. S&P views this amount to be very large relative to AUM, which totaled $47 billion as of Sept. 30, 2010. S&P believes that at the current level of AUM, Marsico's ability to service its debt remains weak. Marsico continues to suffer from net redemptions because growth equities, the company's asset- management specialty, have fallen out of favor with investors. S&P estimate that at the current AUM level, debt-to-EBITDA is 10.0x and EBITDA interest coverage is about 1.2x. S&P considers these credit metrics to be very weak on an absolute basis, but otherwise consistent with the ratings. "In addition to the high degree of financial risk, S&P also believe that there is a high degree of business risk at Marsico. As a growth stock asset manager, the company is particularly vulnerable to vacillating stock prices. It has an undiversified business model and portfolios may be concentrated in relatively few stocks," said Standard & Poor's credit analyst Charles Rauch. There is key man risk because Tom Marsico, founder and CEO, is also the chief investment officer and co-portfolio manager for the two flagship mutual funds. Positively, the firm's distribution capabilities are adequately diversified among proprietary mutual funds, sub-advisory funds, wrap accounts, and institutional accounts. The stable outlook incorporates S&P's base case scenario that AUM will be flat in 2011 and financial performance remains weak. If AUM were to retreat significantly from current levels, due to a pick-up in net redemptions and/or market depreciation, Marsico would not have to pay cash interest on the senior subordinated notes due 2020. Nonetheless, its ability to service cash interest and mandatory amortization on the senior secured term loan due 2014 would be impaired and S&P could lower the ratings. Alternatively under a more favorable scenario in which AUM grows significantly from current levels, S&P still does not foresee Marsico generating enough cash flow from operations to fully repay unamortized principal on the senior secured term loan when it comes due in December 2014. Therefore, S&P sees little upgrade potential at this time. MEDIACOM COMMS: Ratings Could Come Under Pressure, Moody's Says --------------------------------------------------------------- Moody's Investors Service said Mediacom Communications Corporation's ratings could come under pressure if the proposed transaction to go private as announced, the second following an initial offer of May 31, 2010, comes to fruition. The last rating action for Mediacom was on April 15, 2010, when Moody's assigned Ba3 ratings for new bank credit facilities of subsidiaries Mediacom LLC and Mediacom Broadband, LLC. Mediacom Communications Corporation, through its operating subsidiaries, is a domestic cable multiple system operator serving approximately 1.2 million basic video subscribers in a wide variety of small- to mid-sized markets. Mediacom generated approximately $1.5 billion in revenue over the twelve month period ended 9/30/10. The company maintains its headquarters in Middletown, New York. MEDIACOM COMMS: S&P Puts 'B+' Rating on Negative Watch ------------------------------------------------------ Standard & Poor's Ratings Services said it placed all its ratings, including its 'B+' corporate credit rating and all issue-level ratings, on Middletown, N.Y.-based cable TV operator Mediacom Communications Corp. on CreditWatch with negative implications. The rating action follows Mediacom's announcement that it had reached a definitive agreement under which its chairman, CEO, and founder Rocco Commisso would acquire the remaining stock in the company not owned by him for $8.75 per share in cash -- approximately $360 million. This represents an increase from an earlier take-private offer of $6 per share. The transaction is subject to approval by holders of a majority of Mediacom's class A shares not owned by Mr. Commisso, as well as the receipt of financing to pay for the all-cash offer. If this transaction were to be funded entirely with debt, S&P estimates that leverage would increase to nearly 7.0x, including S&P's adjustments from about 6.3x at the end of Sept. 30, 2010. "S&P is placing the ratings on CreditWatch with negative implications to reflect the potential increase in leverage and uncertainty about the company's financial policy if the transaction is completed," said Standard & Poor's credit analyst Naveen Sarma. S&P will also assess the terms, conditions, and maturity structure of any new financing as well as the impact on the company's liquidity position, which S&P currently view as strong under its criteria. MEDICAL CONNECTIONS: Posts $1.2 Million Net Loss in Q3 2010 ----------------------------------------------------------- Medical Connections Holdings, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.2 million on $2.3 million of revenue for the three months ended September 30, 2010, compared with a net loss of $1.9 million on $1.6 million of revenue for the same period last year. The Company's balance sheet at September 30, 2010, showed $2.8 million in total assets, $653,473 in total liabilities, and stockholders' equity of $2.2 million. As reported in the Troubled Company Reporter on April 7, 2010, De Meo, Young, McGrath, CPA, in Fort Lauderdale, Fla., expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted of the Company's dependence on outside financing, lack of sufficient working capital, and recurring losses from operations. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6eb4 Boca Raton, Fla.-based Medical Connections Holdings, Inc. provides medical recruitment and staffing services. METALDYNE CORP: Atlas Acted as Advisor in New Castle Facility Sale ------------------------------------------------------------------ Atlas Partners, LLC, acted as real estate advisor to Robert D. Katz, of Executive Sounding Board Associates Inc., Liquidating Trustee for OldCo M Distribution Trust, in the sale of the former Metaldyne Corp. facility in New Castle, Indiana. Atlas marketed and sold a 983,000 square foot industrial property located on 89 acres. Metaldyne Corp. was a global designer and supplier of metal based components, assemblies and modules for transportation related powertrain applications including engine, transmission/transfer case, driveline, and noise and vibration control products to the motor vehicle industry. Metaldyne and its affiliates filed for Chapter 11 protection on May 27, 2009 (Bankr. S.D.N.Y. Case No. 09-13412). The filing did not include the company's non-U.S. entities or operations. Richard H. Engman, Esq., at Jones Day represented the Debtors in their restructuring. Judy A. O'Neill, Esq., at Foley & Lardner LLP served as conflicts counsel; Lazard Freres & Co. LLC and AlixPartners LLP as financial advisors; and BMC Group Inc. as claims agent. A committee of Metaldyne creditors was represented by Mark D. Silverschotz, Esq., and Kurt F. Gwynne, Esq., at Reed Smith LLP, and the committee tapped Huron Consulting Services, LLC, as its financial advisor. For the fiscal year ended March 29, 2009, the company recorded annual revenues of approximately US$1.32 billion. As of March 29, 2009, utilizing book values, the Company had assets of US$977 million and liabilities of $927 million. Judge Glenn approved the sale of substantially all assets to Carlyle Group in Nov. 2009 for approximately $496.5 million, and confirmed the Debtors' liquidating Chapter 11 plan on Feb. 23, 2010. Under the terms of the confirmed liquidation plan, Oldco M Distribution Trust is the post-confirmation entity charged with prosecuting all claim objections and distributing all plan assets pursuant to the terms of the plan. The Trust is represented by Kimberly E.C. Lawson, Esq., at Reed Smith LLP, in Wilmington, Del. METRO-GOLDWYN-MAYER: Proposes to Pay $2.9MM in Shipping Charges --------------------------------------------------------------- Metro-Goldwyn-Mayer Studios Inc. and its affiliates seek court approval to pay about $2.91 million for prepetition shipping, storage and laboratory charges. As of November 3, 2010, the Debtors owe as much as $375,000 to storage facilities; $35,000 to shippers; and $2.5 million to Deluxe Laboratories Inc. and other firms for laboratory services. Deluxe provides technical services and maintains the Debtors' film and television library under a 2009 agreement. Jay Goffman, Esq., at Skadden Arps Slate Meagher & Flom LLP, in New York, says many of the Debtors' service providers would likely assert liens on materials in their custody and refuse to return those materials if their pre-bankruptcy claims are not paid. "The value of these materials generally exceeds the amount of the outstanding claims and, thus, the Debtors believe that most of the vendors will ultimately be entitled to be paid in full for their prepetition claims," Mr. Goffman says in court papers. In connection with the proposed payment, the Debtors also ask the Court to authorize banks and other financial institutions to process and honor checks presented for payment as well as requests for electronic payment. About Metro-Goldwyn-Mayer Studios Metro-Goldwyn-Mayer Studios Inc. -- http://www.mgm.com/-- -- is actively engaged in the worldwide production and distribution of motion pictures, television programming, home video, interactive media, music, and licensed merchandise. The company owns the world's largest library of modern films, comprising around 4,100 titles. Operating units include Metro- Goldwyn-Mayer Studios Inc., Metro-Goldwyn-Mayer Pictures Inc., United Artists Films Inc., MGM Television Entertainment Inc., MGM Networks Inc., MGM Distribution Co., MGM International Television Distribution Inc., Metro-Goldwyn-Mayer Home Entertainment LLC, MGM ON STAGE, MGM Music, MGM Consumer Products and MGM Interactive. In addition, MGM has ownership interests in domestic and international TV channels reaching over 130 countries. As of September 30, 2010, the Debtors' unaudited consolidated financial statements, as prepared in accordance with accounting principles generally accepted in the United States for interim financial statements, included $2,673,772,000 in total assets and $3,451,493,000 in total liabilities Excluding certain adjustments made by the Company in accordance with GAAP, the Debtors' total outstanding liabilities would be $5,766,721,000, which includes the total face value of outstanding principal and accrued, but unpaid, interest under the Credit Agreement and interest rate swap agreements. Metro-Goldwyn-Mayer Inc. and 160 of its affiliates on November 3 filed Chapter 11 cases (Bankr. S.D.N.Y. Lead Case No. 10-15774), to seek confirmation of their "pre-packaged" plan of reorganization. Jay M. Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, serves as bankruptcy counsel to the Debtors. Klee, Tuchin, Bogdanoff & Stern LLP is the legal counsel. Moelis & Company is the financial advisor. Donlin Recano & Company, Inc., is the claims and notice agent. CAIR Management, LLC, Stephen F. Cooper, and Zolfo Cooper Management LLC, is the Debtors' management service providers. Bankruptcy Creditors' Service, Inc., publishes METRO-GOLDWYN-MAYER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Metro-Goldwyn-Mayer Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) METRO-GOLDWYN-MAYER: Taps Ordinary Course Professionals ------------------------------------------------------- Metro-Goldwyn-Mayer Studios Inc. and its affiliates sought and obtained court approval to employ professionals utilized in the ordinary course of business effective November 3, 2010. The Debtors intend to hire more than 100 OCPs without applying separately for the employment of each professional. The OCPs will not play central roles in the administration of the Debtors' bankruptcy cases, according to Jay Goffman, Esq., at Skadden Arps Slate Meagher & Flom LLP, in New York. In connection with the OCP's employment, the Debtors were authorized to pay, without formal application, 100% of the OCP's interim fees and disbursements upon submission by the OCPs of an invoice to the Debtors, provided those fees do not exceed $50,000 or $100,000 per month for each OCP for the duration of the bankruptcy cases. The OCPs that will receive a monthly fee of up to $100,000 are: OCPs Service Provided ------ ---------------- Advisors LLP Real Estate Counsel Gibson Dunn & Crutcher LLP Corporate Counsel Kendall Brill & Klieger LLP Litigation Counsel Loeb & Loeb LLP Intellectual Property, Litigation, Music Clearance & Corporate Counsel O'Melveny & Myers LLP Litigation and Corporate Counsel, Domestic and International Television Licensing and Networks Counsel Proskauer Rose LLP Television Licensing and Networks Counsel Glaser, Weil, Fink, Jacobs Litigation Counsel Howard & Shapiro LLP Real Estate Counsel A list of the OCPs that will receive a monthly fee of up to $50,000 is available for free at: http://bankrupt.com/misc/MGM_OCPList.pdf If the Debtors reach an agreement with the U.S. Trustee for higher monthly fee caps, the agreement must be evidenced by the filing of a notice of increased cap amount. The increased cap amount will be deemed approved upon the filing of the notice without further action of the Court. In the absence of an agreement, the monthly fee caps will be enforced, subject to the right of the Debtors to file a motion to increase the amount. If an OCP seeks fees in excess of the monthly caps and no agreement is reached, the excess fees will be subject to court approval. In case an OCP seeks fees in excess of $500,000 during the duration of the bankruptcy cases, that OCP must seek retention under Sections 327 and 328 of the Bankruptcy Code. In lieu of an employment application, the OCPs were required by the Court to file and serve a verified statement pursuant to Bankruptcy Rule 2014. About Metro-Goldwyn-Mayer Studios Metro-Goldwyn-Mayer Studios Inc. -- http://www.mgm.com/-- -- is actively engaged in the worldwide production and distribution of motion pictures, television programming, home video, interactive media, music, and licensed merchandise. The company owns the world's largest library of modern films, comprising around 4,100 titles. Operating units include Metro- Goldwyn-Mayer Studios Inc., Metro-Goldwyn-Mayer Pictures Inc., United Artists Films Inc., MGM Television Entertainment Inc., MGM Networks Inc., MGM Distribution Co., MGM International Television Distribution Inc., Metro-Goldwyn-Mayer Home Entertainment LLC, MGM ON STAGE, MGM Music, MGM Consumer Products and MGM Interactive. In addition, MGM has ownership interests in domestic and international TV channels reaching over 130 countries. As of September 30, 2010, the Debtors' unaudited consolidated financial statements, as prepared in accordance with accounting principles generally accepted in the United States for interim financial statements, included $2,673,772,000 in total assets and $3,451,493,000 in total liabilities Excluding certain adjustments made by the Company in accordance with GAAP, the Debtors' total outstanding liabilities would be $5,766,721,000, which includes the total face value of outstanding principal and accrued, but unpaid, interest under the Credit Agreement and interest rate swap agreements. Metro-Goldwyn-Mayer Inc. and 160 of its affiliates on November 3 filed Chapter 11 cases (Bankr. S.D.N.Y. Lead Case No. 10-15774), to seek confirmation of their "pre-packaged" plan of reorganization. Jay M. Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, serves as bankruptcy counsel to the Debtors. Klee, Tuchin, Bogdanoff & Stern LLP is the legal counsel. Moelis & Company is the financial advisor. Donlin Recano & Company, Inc., is the claims and notice agent. CAIR Management, LLC, Stephen F. Cooper, and Zolfo Cooper Management LLC, is the Debtors' management service providers. Bankruptcy Creditors' Service, Inc., publishes METRO-GOLDWYN-MAYER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Metro-Goldwyn-Mayer Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) METRO-GOLDWYN-MAYER: Applies for Klee as Bankruptcy Co-Counsel -------------------------------------------------------------- Metro-Goldwyn-Mayer Studios Inc. and its affiliates have filed an application with the Court to employ Klee, Tuchin, Bogdanoff & Stern LLP as their bankrupty co-counsel effective November 3, 2010. The Debtors selected Klee Tuchin because of the firm's extensive experience and knowledge of the Chapter 11 bankruptcy process. The firm is also familiar with the Debtors' business and financial affairs, according to court papers. As bankruptcy counsel, Klee Tuchin will be tasked to render these services: (1) provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their businesses and management of their properties; (2) prepare legal papers on behalf of the Debtors; (3) appear in Court on behalf of the Debtors; and (4) prepare and pursue confirmation of a plan and approval of a disclosure statement or sale of the Debtors' assets. Klee Tuchin will be paid for its services on an hourly basis and will be reimbursed for its expenses. The firm's hourly rates are: Professionals Hourly Rates ------------- ------------ Partners & Of-Counsel $550-975 Associates $375-490 Paralegals $250 Law Clerks $170 Kenneth Klee, Esq., a partner at Klee Tuchin, assures the Court that the firm does not hold or represent any interest adverse to the Debtors' estates and is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About Metro-Goldwyn-Mayer Studios Metro-Goldwyn-Mayer Studios Inc. -- http://www.mgm.com/-- -- is actively engaged in the worldwide production and distribution of motion pictures, television programming, home video, interactive media, music, and licensed merchandise. The company owns the world's largest library of modern films, comprising around 4,100 titles. Operating units include Metro- Goldwyn-Mayer Studios Inc., Metro-Goldwyn-Mayer Pictures Inc., United Artists Films Inc., MGM Television Entertainment Inc., MGM Networks Inc., MGM Distribution Co., MGM International Television Distribution Inc., Metro-Goldwyn-Mayer Home Entertainment LLC, MGM ON STAGE, MGM Music, MGM Consumer Products and MGM Interactive. In addition, MGM has ownership interests in domestic and international TV channels reaching over 130 countries. As of September 30, 2010, the Debtors' unaudited consolidated financial statements, as prepared in accordance with accounting principles generally accepted in the United States for interim financial statements, included $2,673,772,000 in total assets and $3,451,493,000 in total liabilities Excluding certain adjustments made by the Company in accordance with GAAP, the Debtors' total outstanding liabilities would be $5,766,721,000, which includes the total face value of outstanding principal and accrued, but unpaid, interest under the Credit Agreement and interest rate swap agreements. Metro-Goldwyn-Mayer Inc. and 160 of its affiliates on November 3 filed Chapter 11 cases (Bankr. S.D.N.Y. Lead Case No. 10-15774), to seek confirmation of their "pre-packaged" plan of reorganization. Jay M. Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, serves as bankruptcy counsel to the Debtors. Klee, Tuchin, Bogdanoff & Stern LLP is the legal counsel. Moelis & Company is the financial advisor. Donlin Recano & Company, Inc., is the claims and notice agent. CAIR Management, LLC, Stephen F. Cooper, and Zolfo Cooper Management LLC, is the Debtors' management service providers. Bankruptcy Creditors' Service, Inc., publishes METRO-GOLDWYN-MAYER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Metro-Goldwyn-Mayer Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) METRO-GOLDWYN-MAYER: Gets Nod for Donlin Recano as Claims Agent --------------------------------------------------------------- Metro-Goldwyn-Mayer Studios Inc. and its affiliates sought and obtained court approval to employ Donlin, Recano & Company Inc. as their claims and noticing agent effective November 3, 2010. As claims and noticing agent, Donlin will be responsible for the distribution of notices and the maintenance, processing and docketing of proofs of claim filed in the Debtors' Chapter 11 cases. Specifically, the firm will be tasked to provide these services: (1) notify all potential creditors of the filing of the Debtors' bankruptcy petitions and, if applicable, of the setting of the date for the first meeting of creditors; (2) maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs; (3) notify all potential creditors about their claims based on the Debtors' books and records, and schedules; (4) furnish a notice of the last day for the filing of proofs of claim and a form for the filing of a proof of claim; (5) maintain a post office box for receiving proofs of claim; (6) for all notices, file with the Clerk an affidavit or certificate of service which includes a copy of the notice, a list of entities to which it was mailed and the date mailed, within seven days of service; (7) docket any claims received by the Clerk's Office, maintain the official claims register for each Debtor on behalf of the Clerk and, upon the Clerk's request, provide a certified duplicate unofficial claims register; (8) specify in the claims register, these pieces of information for each claim docketed: (i) the claim number assigned, (ii) the date received, (iii) the name and address of the claimant and agent, if applicable, that filed the claim, (iv) the filed amount of the claim, if liquidated, and (v) the asserted classification of the claim according to the proof of claim; (9) record any transfers of claims and provide any notices of those transfers; (10) relocate, by messenger, any court-filed proofs of claim to the offices of Donlin not less than weekly; and (11) upon completion of the docketing process for all proofs of claim received to date for each case, turn over to the Clerk copies of the claims registers. Donlin may also provide other services like assisting the Debtors in gathering the data needed to prepare their schedules and statements, according to Stephen Cooper, a member of MGM Studios' Office of the Chief Executive Officer. Prior to the Debtors' bankruptcy filing, Donlin provided services in connection with the solicitation of votes for their restructuring plan. For those services, the firm received advance payment in the form of a $50,000 retainer. The Debtors will reimburse the firm for its expenses and will pay the firm's professionals for their consulting services at these hourly rates: Professionals Hourly Rates ------------- ------------ Clerical $34 - $51 Case Manager (Level l) $106 - $149 Case Manager (Level 2) $157 - $187 Senior Case Manager $191 - $234 Senior Consultant $250 Technology/Programming Consultant $119 - $161 Donlin Chief Executive Louis Recano assured the Court that his firm does not hold or represent interest adverse to the Debtors' estates and that it is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About Metro-Goldwyn-Mayer Studios Metro-Goldwyn-Mayer Studios Inc. -- http://www.mgm.com/-- -- is actively engaged in the worldwide production and distribution of motion pictures, television programming, home video, interactive media, music, and licensed merchandise. The company owns the world's largest library of modern films, comprising around 4,100 titles. Operating units include Metro- Goldwyn-Mayer Studios Inc., Metro-Goldwyn-Mayer Pictures Inc., United Artists Films Inc., MGM Television Entertainment Inc., MGM Networks Inc., MGM Distribution Co., MGM International Television Distribution Inc., Metro-Goldwyn-Mayer Home Entertainment LLC, MGM ON STAGE, MGM Music, MGM Consumer Products and MGM Interactive. In addition, MGM has ownership interests in domestic and international TV channels reaching over 130 countries. As of September 30, 2010, the Debtors' unaudited consolidated financial statements, as prepared in accordance with accounting principles generally accepted in the United States for interim financial statements, included $2,673,772,000 in total assets and $3,451,493,000 in total liabilities Excluding certain adjustments made by the Company in accordance with GAAP, the Debtors' total outstanding liabilities would be $5,766,721,000, which includes the total face value of outstanding principal and accrued, but unpaid, interest under the Credit Agreement and interest rate swap agreements. Metro-Goldwyn-Mayer Inc. and 160 of its affiliates on November 3 filed Chapter 11 cases (Bankr. S.D.N.Y. Lead Case No. 10-15774), to seek confirmation of their "pre-packaged" plan of reorganization. Jay M. Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, serves as bankruptcy counsel to the Debtors. Klee, Tuchin, Bogdanoff & Stern LLP is the legal counsel. Moelis & Company is the financial advisor. Donlin Recano & Company, Inc., is the claims and notice agent. CAIR Management, LLC, Stephen F. Cooper, and Zolfo Cooper Management LLC, is the Debtors' management service providers. Bankruptcy Creditors' Service, Inc., publishes METRO-GOLDWYN-MAYER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Metro-Goldwyn-Mayer Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) METRO-GOLDWYN-MAYER: Bush Gottlieb Represents Union Entities ------------------------------------------------------------ Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, Joseph A. Kohanski, Esq., at Bush Gottlieb Singer Lopez Kohanski Adelstein & Dickinson, A Law Corporation, in Glendale, California -- jkohanski@bushgottlieb.com -- notifies the Court that his firm represents these creditors in the Debtors' Chapter 11 cases: (a) Directors Guild of America, Inc. 7920 Sunset Boulevard Los Angeles, CA 90046 (310) 289-2000 (b) Screen Actors Guild, Inc. 5757 Wilshire Boulevard Los Angeles, CA 90036 (323) 954-1600 (c) Writers Guild of America, West, Inc. 7000 West Third Street Los Angeles, CA 90048 (323) 951-4000 (d) Directors Guild of America, Inc-Producer Pension and Health Plans 8436 West Third Street, Suite 900 Los Angeles, CA 90048-4189 (323) 866-2255 (e) Motion Picture Industry Pension and Health Plans 11365 Ventura Boulevard Studio City, CA 91604 (818) 769-0007 (f) Screen Actors Guild-Producers Pension & Health Plans 3601 West Olive Avenue, 2nd Floor Burbank, CA 91510-7830 (818) 973-4444 (g) Writers Guild Pension Plan and Industry Health Fund 1015 North Hollywood Way Burbank, CA 91505 (818) 846-1015 Babette A. Ceccotti, Esq., at Cohen, Weiss and Simon LLP, New York -- bceccotti@cwsny.com -- also informs the Court, pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, that Cohen Weiss was engaged to serve as local counsel of these entities. These creditors are "Union" entities, which have claims against certain of the Debtors, Mr. Kohanski says. These claims arise from obligations of the Debtors under collective bargaining agreements, relating primarily to amounts owing for residual payments, he says. The claims asserted by the Union Entities arose both before and during the one year period prior to the filing of the Chapter 11 cases. The Union Entities estimate that their claims total, in the aggregate, approximately $20 million as of the filing date, and additional claims will accrue through the Debtors' continuing exploitation of their motion picture library after the filing date. Bush Gottlieb is the long-standing outside counsel to the Union Entities in connection with insolvency and collection matters. Bush Gottlieb has no claims or interests against any of the Debtors, Mr. Kohanski assures the Court. About Metro-Goldwyn-Mayer Studios Metro-Goldwyn-Mayer Studios Inc. -- http://www.mgm.com/-- -- is actively engaged in the worldwide production and distribution of motion pictures, television programming, home video, interactive media, music, and licensed merchandise. The company owns the world's largest library of modern films, comprising around 4,100 titles. Operating units include Metro- Goldwyn-Mayer Studios Inc., Metro-Goldwyn-Mayer Pictures Inc., United Artists Films Inc., MGM Television Entertainment Inc., MGM Networks Inc., MGM Distribution Co., MGM International Television Distribution Inc., Metro-Goldwyn-Mayer Home Entertainment LLC, MGM ON STAGE, MGM Music, MGM Consumer Products and MGM Interactive. In addition, MGM has ownership interests in domestic and international TV channels reaching over 130 countries. As of September 30, 2010, the Debtors' unaudited consolidated financial statements, as prepared in accordance with accounting principles generally accepted in the United States for interim financial statements, included $2,673,772,000 in total assets and $3,451,493,000 in total liabilities Excluding certain adjustments made by the Company in accordance with GAAP, the Debtors' total outstanding liabilities would be $5,766,721,000, which includes the total face value of outstanding principal and accrued, but unpaid, interest under the Credit Agreement and interest rate swap agreements. Metro-Goldwyn-Mayer Inc. and 160 of its affiliates on November 3 filed Chapter 11 cases (Bankr. S.D.N.Y. Lead Case No. 10-15774), to seek confirmation of their "pre-packaged" plan of reorganization. Jay M. Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, serves as bankruptcy counsel to the Debtors. Klee, Tuchin, Bogdanoff & Stern LLP is the legal counsel. Moelis & Company is the financial advisor. Donlin Recano & Company, Inc., is the claims and notice agent. CAIR Management, LLC, Stephen F. Cooper, and Zolfo Cooper Management LLC, is the Debtors' management service providers. Bankruptcy Creditors' Service, Inc., publishes METRO-GOLDWYN-MAYER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Metro-Goldwyn-Mayer Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) METROPOLITAN 885: Files for Chapter 11 with Plan Support Deal ------------------------------------------------------------- Metropolitan 885 Third Avenue Leasehold, LLC, filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-16103) on November 16, 2010. The Debtor included in its bankruptcy filing (i) an exit facility plan support agreement with Royal Bank of Canada, the Debtor's principal secured lender; (ii) Equity Commitment Agreement from New Lipstick LLC; and (iii) Plan Support Agreement -- Existing Equity. Marc E. Richards, Esq., at Blank Rome, LLP, in New York, serves as counsel to the Debtor. The Debtor owns the leasehold interest on a 34-story Class A office building located on the eastside of Third Avenue between 53rd and 54th Streets in New York City. The building was completed in 1986 and is commonly known as the "Lipstick Building" for its distinctive elliptical shape. The Debtor estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. The Exit Facility Plan Support Agreement acknowledges RBC's support for the Debtor's Plan of Reorganization dated November 12, 2010 submitted together with the petition. The Equity Commitment Agreement confirms that NL will contribute funds of not less than $15 million to pay down the secured loan held by RBC. Finally, the Existing Equity PSA acknowledges the treatment and support of the direct and indirect members of the Debtor. Prior to the Petition Date, the Debtor became indebted to RBC in the sum of $210,000,000. The RBC Loan was secured by a lien on the Third Avenue Property. Jacob Abikzer, a member of Metropolitan Real Estate Investors, LLC, itself the managing member of the Debtor, cited various causes for the Debtor's bankruptcy: "First, the recent violent downturn in the building and real estate markets have had a significant impact on the Debtor's operations. Vacancy rates have increased making it more challenging to service the debt on the property. Renewal lease rates have also been lower than anticipated. Such lower renewal lease rates have continued to negatively impact the cash flow of the Third Avenue Property, which resulted and continues to result in an undue strain on the [required $2,300,000 debt service fund]. The Debtor filed this case as a result of serious liquidity issues." The Chapter 11 Plan Pursuant to the Plan, (i) RBC has agreed, solely in connection with the confirmation and the effective date of the Plan, to further reduce the outstanding principal amount of the RBC Loan so that the same shall have an outstanding principal amount equal to $130,000,000 and (ii) Debtor will prepay a portion of the outstanding principal amount of the RBC Loan in an amount equal to $15,000,000 leaving a balance of $115,000,000. In connection with the Reduction in Principal and as provided for in the Plan, Debtor and RBC have agreed to modify the terms of the RBC Loan. In connection therewith, Debtor and RBC will enter into an Amended and Restated Loan Agreement. In connection therewith, Debtor and RBC intend to enter into a Second Amended, Restated and Consolidated Promissory Note on the Effective Date of the Plan, pursuant to which the Original Notes will be consolidated, amended and restated into a single note in an outstanding principal amount equal to $115,000,000. The Amended Note will be secured by a Second Amended, Restated and Consolidated Leasehold Mortgage, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents dated as of the Effective Date. As part of the restructuring of the RBC Loan under the Plan, NL will also pledge to RBC all of its 100% ownership interest as the sole member of Debtor. METROPOLITAN 885: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Metropolitan 885 Third Avenue Leasehold, LLC 135 East 57th Street New York, NY 10022 Bankruptcy Case No.: 10-16103 Chapter 11 Petition Date: November 16, 2010 Bankruptcy Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Bankruptcy Judge: Shelley C. Chapman Debtor's Counsel : Marc E. Richards, Esq. BLANK ROME, LLP The Chrysler Building 405 Lexington Avenue New York, NY 10174-0208 Tel.: (212) 885-5000 Fax : (212) 885-5003 Email: mrichards@blankrome.com Debtor's Claims Agent : THE GARDEN CITY GROUP, INC. 105 Maxess Road Melville, NY 11747 Tel.: (631) 470-6834 Estimated Assets: $100 million to $500 million Estimated Debts : $100 million to $500 million The petition was signed by Jacob Abikzer, managing member. Debtor's List of 19 Largest Unsecured Creditors: Entity/Person Nature of Claim Claim Amount ------------- --------------- ------------ Royal Bank of Canada Bank Loan $80,000,000 New York Branch One Liberty Plaza 3rd Floor New York, NY 10006-1404 Quality Building Janitorial- $146,151 Services Corp Contract 801 2nd Ave 8th Floor Services New York, NY 10017 Schindler Elevator Services $101,100 Corporation P.O. Box 93050 Chicago, IL 60673-3050 Quality Protection Security $59,500 Services Services Wachtel & Masyr, LLP Professional $9,214 Fee Wachtel & Masyr, LLP Professional $9,059 Fee Velocity Express Messenger $1,276 Services Boca Group Category 1 $990 International testing Verizon Business Telephone Blackberry $760 Main Line BOMA of Greater NY Annual Membership $725 Inc. Due D P G Enterprises Inc Indoor Landscape $706 Nextel Communications Blackberry srv $575 LeaseProbe LLC Lease abstract $450 De Lage Landen Lease Rental $379 Operation Services SiteCompli LLC R&M Consultant $375 Verizon Telephone Blackberry $318 Maximum Security Smoke Detectors $310 Systems Inc Verizon Communications Telephone Blackberry- $94 Inc. DSL NYC Water Board Steam $93 MXENERGY HOLDINGS: Posts $23.4MM Net Loss for September 30 Quarter ------------------------------------------------------------------ MxEnergy Holdings Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $23.43 million on $94.36 million on sales of natural gas and electricity for the three months ended Sept. 30, 2010, compared with a net loss of $10.24 million on $75.97 million of sales of natural gas and electricity for the same period a year ago. The Company's balance sheet at Sept. 30, 2010, showed $178.29 million in total assets, $114.69 million in total liabilities, and stockholder's equity of $63.60 million. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6e9f About MxEnergy Holdings MxEnergy Holdings Inc. was founded in 1999 as a retail energy marketer. The two principal operating subsidiaries of Holdings are MxEnergy Inc. and MxEnergy Electric Inc. which are engaged in the marketing and supply of natural gas and electricity, respectively. Holdings and its subsidiaries operate in 39 market areas located in 14 states in the United States and in two Canadian provinces. MxEnergy carries Caa3 long term corporate family and Ca/LD probability of default ratings from Moody's Investors Service. NEWMARKET CORP: S&P Affirms 'BB+' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+' corporate credit rating on Richmond, Va.-based NewMarket Corp. The outlook is stable. At the same time, S&P raised the issue-level rating on the company's 7.125% senior unsecured notes due 2016 to 'BB+' (same as the corporate credit rating) from 'BB' and revised the recovery rating to '4', indicating S&P's expectation of average recovery (30% to 50%) in the event of a payment default, from '5'. The upgrade on the issue-level rating follows NewMarket's announcement that it has closed on an unrated $300 million senior unsecured revolving credit facility maturing in 2015. This transaction refinanced NewMarket's $150 million senior secured revolving credit facility that would have matured in 2011. The new facility will be used for general corporate purposes and will add capacity for acquisitions and shareholder rewards. Pro forma for Sept. 30, 2010, the facility was $20 million drawn. "The ratings on NewMarket reflect the company's focus on the highly competitive, mature global petroleum additives industry, exposure to volatile raw material costs, and moderately aggressive financial policies," said Standard & Poor's credit analyst Ket Gondha. Well-entrenched market positions in niche product areas, adequate liquidity, and credit ratios that are currently robust for the rating temper these negative factors. S&P characterize the business risk profile as fair and the financial risk profile as intermediate. The stable outlook reflects S&P's view that industry dynamics are relatively benign and that NewMarket will maintain credit metrics appropriate for the rating, even as the company implements its financial and strategic initiatives aimed at increasing shareholder returns, diversity, and growth. S&P could raise the rating if the company maintains healthy operating margins and cash flow generation, which would strengthen its balance sheet. Key to higher ratings is S&P's assessment that financial policies will support improved credit quality, particularly as they relate to acquisitions, shareholder rewards, and other value creation activities. S&P would also need comfort that longer-term competitive dynamics are favorable, such that NewMarket can demonstrate its ability to maintain recently expanded operating margins. S&P would consider a lower rating if the company's operating profitability erodes materially or FFO to debt posts a significantly declining trend. In S&P's scenario, this would require a return toward pre-2009 historical operating margins. Uncertainties related to potential acquisitions are a risk factor when considering the strength of financial metrics in the intermediate term. Larger acquisitions are not expected at the current ratings but cannot be ruled out, the announcement of which would result in a reassessment of the rating and outlook. NEPHROS INC: Posts $375,000 Net Loss in September 30 Quarter ------------------------------------------------------------ Nephros, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $375,000 on revenue of $622,000 for the three months ended September 30, 2010, compared with a net loss of $395,000 on $711,000 of revenue for the same period last year. The Company has incurred significant losses in its operations in each quarter since inception. At September 30, 2010, the Company has an accumulated deficit of $91.2 million. The Company's balance sheet at September 30, 2010, showed $1.7 million in total assets, $884,000 in total liabilities, and stockholders' equity of $798,000. As reported in the Troubled Company Reporter on April 6, 2010, Rothstein, Kass & Company, P.C. expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has incurred negative cash flow from operations and net losses since inception. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6eb7 Headquartered in River Edge, N.J., Nephros, Inc. (OTC: NEPH.OB - News) -- http://www.nephros.com/-- is a medical device company developing and marketing filtration products for therapeutic applications, infection control, and water purification. NNN 2003: Posts $275,000 Net Loss in September 30 Quarter --------------------------------------------------------- NNN 2003 Value Fund, LLC, filed its quarterly report on Form 10-Q, reporting a net loss of $275,000 on $1.8 million of revenue for the three months ended September 30, 2010, compared with a net loss of $895,000 on $1.7 million of revenue for the same period last year. The mortgage loan for Sevens Building, located in St. Louis, Missouri, or the Sevens Building property, which had an outstanding principal balance of $21.5 million as of September 30, 2010, became due on October 31, 2010, and is now in default due to non-payment of the outstanding principal balance upon maturity. The Company is currently in discussions with the Sevens Building lender regarding the Company's options for transferring the Sevens Building property to the Sevens Building lender, including foreclosure, deed-in-lieu of foreclosure, or another form of transfer, which the Company expects may be completed in early 2011. In addition, the mortgage loan for Four Resource Square, located in Charlotte, North Carolina, or the Four Resource Square property, which had an outstanding principal balance of $21.9 million as of September 30, 2010, is due on November 30, 2010. "The maturities of the mortgage loans on the Sevens Building and Four Resource Square properties and the expected transfers of these properties to their respective lenders, combined with our loss from continuing operations, raises substantial doubt about our ability to continue as a going concern," the Company said in the filing. The Company's balance sheet at September 30, 2010, showed $33.7 million in total assets, $45.1 million in total liabilities, and a stockholders' deficit of $11.4 million. Ernst & Young LLP, in Irvine, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has incurred recurring losses, continued deficit cash flows from operating activities and will not have sufficient cash flow to repay mortgage loans that are past due or will become due in 2010. About NNN 2003 Santa Ana, Calif.-based NNN 2003 Value Fund, LLC, was formed as a Delaware limited liability company on June 19, 2003. The Company was organized to acquire, own, operate and subsequently sell its ownership interests in a number of unspecified properties believed to have higher than average potential for capital appreciation, or value-added properties. As of September 30, 2010, the Company held interests in three commercial office properties, including two consolidated properties and one unconsolidated property. The Company currently intends to sell, or otherwise dispose of, all of its remaining properties and pay distributions to its unit holders from available funds. The Company does not anticipate acquiring any additional real estate properties at this time. NORD RESOURCES: Posts $10-Mil. Net Loss in Sept. 30 Quarter ----------------------------------------------------------- Nord Resources Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $10.08 million on $22.60 million of net sales for the three months ended Sept. 30, 2010, compared with a net loss of $402,023 on $13.11 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2010, showed $70.61 million in total assets, $57.46 million in total liabilities, and stockholder's equity of $13.14 million. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6ea6 About Nord Resources Based in Tuczon, Arizona, Nord Resources Corporation (TSX:NRD/OTCBB:NRDS.OB) -- http://www.nordresources.com/-- is a copper mining company whose primary asset is the Johnson Camp Mine, located approximately 65 miles east of Tucson, Arizona. Nord commenced mining new ore on February 1, 2009. Nedbank, the Company's senior lender, has declined to extend the forbearance agreement with respect to the scheduled principal and interest payment in the approximate amount of $2,150,000 that was due on March 31, 2010 under the Company's $25,000,000 secured term-loan credit facility with Nedbank. Nedbank Capital has also declined to extend the forbearance agreement regarding the Company's failure to make the payment of $697,869 due on April 6, 2010 under the Copper Hedge Agreement between the parties. Both forbearance agreements expired at midnight on May 13, 2010. The Company is now in default of its obligations under the Credit Agreement and the Copper Hedge Agreement with Nedbank. On June 2, 2010, Nord Resources appointed FTI Consulting to advise on refinancing structures and strategic alternatives. The Company's balance sheet at June 30, 2010, showed $71.34 million in total assets, $54.68 million in total liabilities, and $16.65 million in stockholders' equity. NUVEEN INVESTMENTS: Posts $102.5MM Adjusted EBITDA in Q3 -------------------------------------------------------- Nuveen Investments discussed its third quarter 2010 results on November 11, 2010. The Company said it had income before taxes of $52,255,000 and Adjusted EBITDA of $102,515,000 for the third quarter of 2010. Nuveen has assets under management of $162,847,000 as of Sept. 30, 2010. Gross sales during the third quarter was $8,177,000. A full-text copy of the Sales, Net Flows and Assets Under Management for the Periods Ended December 31, 2009 and September 30, 2010, is available for free at: http://ResearchArchives.com/t/s?6e74 About Nuveen Investments Founded in 1898, Nuveen Investments, Inc., based in Chicago, Illinois, provides investment management services to high-net- worth and institutional investors and the financial consultants and advisors who serve them. The Company derives substantially all of its revenues from providing investment advisory services and distributing managed account products, closed-end exchange- traded funds and open-end mutual funds. Nuveen carries a 'Caa1' corporate family rating from Moody's Investors Service and a 'B-' long-term counterparty credit rating from Standard & Poor's ratings service. At the end of July 2010, Moody's changed the outlook for its he ratings to positive from stable following the company's announcement that it has entered into an agreement to acquire the long-only assets of First American Fund Advisors, a subsidiary of US Bancorp (Aa3/P- 1/Neg). Moody's stated that Nuveen's outlook change reflects improving fundamentals at Nuveen and expected near-term financial and longer-term strategic benefits of the FAF Advisors acquisition. However, Moody's still views Nuveen's leverage as "clearly excessive, particularly in the context of elevated market volatility." The Caa1 corporate family rating incorporates a high potential for a modest capital restructuring, Moody's said. ORAGENICS INC: Posts $1.9-Mil. Net Loss in Sept. 30 Quarter ----------------------------------------------------------- Oragenics, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.87 million on $364,574 of revenue for the three months ended September 30, 2010, compared with a net loss of $1.44 million on $199,675 of revenue for the same period last year. As of September 30, 2010, the Company had an accumulated deficit of $31.14 million. "We expect to incur significant and increasing operating losses for the foreseeable future as we advance our product candidates through preclinical testing and clinical trials to seek regulatory approval and eventual commercialization." the Company said in the filing. The Company's balance sheet at September 30, 2010, showed $2.64 million in total assets, $2.46 million in total liabilities, and stockholders' equity of $175,550. Kirkland Russ Murphy & Tapp, PA in Clearwater, Florida, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has incurred recurring operating losses, negative operating cash flows and has an accumulated deficit. A complete text of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6eb6 About Oragenics Inc. Tampa, Fla.-based Oragenics, Inc. (OTC BB: ORNI) -- http://www.oragenics.com/-- is a biopharmaceutical company focused primarily on oral health products and novel antibiotics. Within oral health, Oragenics is developing its pharmaceutical product candidate, SMaRT Replacement Therapy, and also commercializing its oral probiotic product, ProBiora3. Within antibiotics, Oragenics is developing a pharmaceutical candidate, MU1140-S and intends to use its patented, novel organic chemistry platform to create additional antibiotics for therapeutic use. ORANGE COUNTY: Court to Set Plan Deadlines on Dec. 17 ----------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has continued until December 17, 2010, at 10:00 a.m., the hearing on the status of Orange County Motorsports, Inc.'s bankruptcy case, and the Court may set deadlines to file the Disclosure Statement and Plan of Reorganization. Los Angeles, California-based Orange County Motorsports, Inc., filed for Chapter 11 bankruptcy protection on December 18, 2009 (Bankr. C.D. Calif. Case No. 09-45902). The Debtor's affiliate, Lawrence Hart also filed Chapter 11 bankruptcy petition. Michael S. Kogan, Esq., at Ervin Cohen & Jessup LLP, represents the Debtor. The Company estimated assets and debts at $10 million to $50 million. PAETEC HOLDING: S&P Assigns 'CCC+' Rating to $420 Mil. Notes ------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned a 'CCC+' issue-level rating and a '6' recovery rating to Fairport, N.Y.- based PAETEC Holding Corp.'s proposed $420 million senior unsecured notes due 2018, to be issued under Rule 144A with registration rights. The '6' recovery rating indicates S&P's expectation for negligible (0%-10%) recovery in the event of default. The company expects to use the proceeds plus $40 million of cash from its balance sheet to fund the acquisition of Richmond, Va.-based CLEC Cavalier Telephone Corp. At the same time, S&P affirmed all other ratings on PAETEC, including the 'B' corporate credit rating. The outlook is stable. Total debt outstanding, pro forma for the transaction, will be about $1.37 billion. "S&P expects the additional debt to fund the proposed acquisition of Cavalier Telephone Corp.," said Standard & Poor's credit analyst Michael Senno, "and S&P expects minimal effect on leverage as a result of the transactions, which would keep credit measures consistent with its assumptions for the rating and S&P's financial risk assessment." Adjusted total debt to last-12-month EBTIDA as of Sept. 30, 2010, pro forma for the acquisition and additional debt, would increase to about 4.8x from approximately 4.6x on a stand-alone basis earlier this year. Adjusted debt includes the addition of the present value of operating leases and minimum telecommunications purchase commitments to debt. PERFORMANCE FOOD: Moody's Assigns 'B2' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service assigned B2 Corporate Family and Probability of Default ratings to Performance Food Group, Inc., as well as a Caa1 (LGD 5, 89%) rating to the company's new $550 million senior unsecured notes issue. The outlook is stable. This is the first time Moody's has assigned ratings to PFG. New Ratings Assigned: * Corporate Family Rating at B2 * Probability of Default Rating at B2 * $550 million senior unsecured notes at Caa1 (LGD 5, 89%). Rating Rationale The B2 Corporate Family Rating and Probability of Default ratings reflect PFG's weak key credit metrics, with debt/EBITDA of around 5.8 times and EBITA/Interest of around 1.45 times. The ratings also reflect PFG's aggressive financial policy due to its financial sponsor ownership. The ratings are supported by the company's solid position in the food distribution segment, with its focus on vending and repeat business from large, well-known, restaurant chains, and its "street" business catering to independent restaurants and small local and regional chains. "Moody's feels that while PFG is well-positioned in the food distribution segment, with potential for successful growth in all three of its primary operating segments, financial policy considerations may be a constant overriding rating factor," stated Moody's Senior Analyst Charlie O'Shea. The stable outlook anticipates that credit metrics will show some improvement over the next 12-18 months, and that PFG's liquidity will remain good. PFG has an unrated $1.1 billion ABL to support cash flows that can exhibit some seasonality, but these cash flows should remain sufficient to cover operating needs including capital expenditures. The Caa1 rating on the senior unsecured notes recognizes their junior position in the capital structure due to the lack of full guarantees, which places them structurally subordinate to other unsecured liabilities. Proceeds will be utilized to repay $300 million in high-rate mezzanine debt and pay a dividend to the sponsors/owners, affiliates of The Blackstone Group and Wellspring. Ratings could be upgraded if debt/EBITDA was maintained below 5.5 times and EBITA/interest was sustained near 1.5 times, which would reflect moderation of the existing financial policy. Ratings could be downgraded if operating performance were to weaken or financial policy decisions resulted in debt/EBITDA exceeding 6 times or EBITA/interest fell below 1.25 times. PERFORMANCE FOOD: S&P Assigns 'B' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its preliminary 'B' corporate credit rating to Richmond, Va.-based Performance Food Group Inc. (formerly Vistar Corp.) and its preliminary 'CCC+' issue level rating to the proposed $550 million seven year senior unsecured notes. The outlook is stable. The preliminary recovery rating on the proposed notes is '6', indicating that lenders could expect negligible (0 to 10%) recovery in the event of a payment default or bankruptcy. The preliminary ratings are subject to change and assume the proposed transaction closes on substantially the terms presented to S&P. Pro forma for the proposed transaction, total debt outstanding is about $1.1 billion. "S&P's ratings on Performance Food Group reflect S&P's belief that the company's weak credit measures will improve over the next 12 to 24 months through free cash flow generation and modest profit improvement, despite facing a highly competitive environment and the risk of escalating fuel costs," said Standard & Poor's credit analyst Jerry Phelan. "S&P believes PFG's profitability and cash flow should benefit from anticipated future food cost inflation, given that a portion of PFG's business operates on a fixed percentage mark-up basis," he continued. Nevertheless, the company's weak business risk profile reflects its inherently low levels of profitability given its participation in the low margin though historically stable foodservice distribution industry, exposure to strong bargaining power of certain large casual and family dining restaurant chain customers, and limited growth prospects for the company's vending business, despite its overall No. 3 position in North American foodservice distribution industry and strength in certain niche markets. The company's highly leveraged financial risk profile is indicative of a very aggressive financial policy in view of the $250 million debt-financed sponsor dividend. PFG is the third-largest competitor in the historically stable foodservice distribution industry. Although meaningfully smaller than its two largest competitors, S&P believes it has a satisfactory position as a near-exclusive distributor to certain family and casual dining restaurant chains. PFG does benefit, although to a lesser extent, from its position as the dominant distributor of candy/snacks, coffee, beverages and other products to the low growth vending, office coffee services, and theater channels, as this is a smaller component of PFG's overall mix. PET CROSSING: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Pet Crossing Animal Hospital & Dental Clinic, LLC 10861 Bloomington Ferry Road Bloomington, MN 55438 Bankruptcy Case No.: 10-48434 Chapter 11 Petition Date: November 12, 2010 Court: United States Bankruptcy Court District of Minnesota (Minneapolis) Judge: Robert J. Kressel Debtor's Counsel: Thomas Flynn, Esq. LARKIN HOFFMAN DALY & LINDGREN 7900 Xerxes Ave South, Suite 1500 Bloomington, MN 55431 Tel: (952) 896-3362 E-mail: tflynn@larkinhoffman.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mnb10-48434.pdf The petition was signed by Steve Barghusen, treasurer. PETCO ANIMAL: Moody's Assigns 'Caa1' Rating to $500 Mil. Notes -------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to PETCO Animal Supplies Stores, Inc.'s proposed $500 million senior unsecured notes. All other ratings including the company's B2 Corporate Family and Probability of Default Ratings were affirmed. The outlook is negative. Moody's ratings are subject to receipt and review of final documentation. Upon closing of the transaction the Corporate Family Rating will be moved to the holding company, Petco Animal Supplies, Inc. Ratings Rationale The $500 million senior unsecured notes due 2018 are part of a $1.725 billion refinancing announced by PETCO. The company plans to use the proceeds from the notes, its new $1.225 billion senior secured term loan, and cash on hand to repay its $674 million term loan due 2013 and $450 million subordinated notes due 2014, and pay a dividend to PETCO's equity owners. In addition, PETCO plans to replace its $200 million asset based revolving credit facility with a new $250 million ABL expiring in 2015. The B2 Corporate Family Rating reflects Moody's expectation that PETCO's credit metrics will remain weak pro forma for the transaction. Moody's expects that debt to EBITDA will remain above 6.5 times over the next twelve months. The rating also reflects the continuing weak macro-economic environment and the company's aggressive financial policy. Balancing these are PETCO's good liquidity, its stable operating performance through the recession, and its broad geographic diversification. The negative outlook reflects the aggressive financial policies that favor shareholder returns and Moody's expectations that leverage will remain high for a B2 rated company. New rating assigned: * $500 million senior unsecured notes due 2018 at Caa1 (LGD 5, 86%) These ratings are affirmed and point estimates changed: * Corporate Family Rating at B2 * Probability of Default Rating at B2 * $1.225 billion senior secured term loan due 2017 at B1 (to LGD 3, 38% from LGD 3, 35%) * $674 million senior secured term loan due 2013 at B1 (LGD 3, 33%) (to be withdrawn upon completion of the refinancing) Given the negative outlook and the company's aggressive financial policies, an upgrade in the near to medium term is unlikely. Over the longer term, a higher rating would require that PETCO demonstrate the ability and willingness to achieve and maintain debt/EBITDA below 5.25 times and EBITA/interest expense above 1.5 times. A higher rating would also require that the company continue to generate positive free cash flow and maintain a good liquidity profile. A stabilization of the outlook would require debt/EBITDA to fall and be sustained below 6.5 times. Ratings could be pressured if PETCO's operating performance deteriorates below recent levels -- an indication that it is not benefiting from spending on operating improvements, if debt levels materially increase, or if liquidity weakens. Quantitatively, a downgrade could occur if debt/EBITDA remains above 6.5 times over a prolonged period or if EBITA/interest expense is not sustained above 1.25 times. PETCO Animal Supplies, headquartered in San Diego, California, is a specialty retailer of premium supplies, food, and services for household pets. The company currently operates over 1,000 stores in 50 states. Revenues are about $2.8 billion. PFF BANCORP: Unsecured Creditors Files Settlement Motion -------------------------------------------------------- BankruptcyData.com reports that the official committee of unsecured creditors in PFF Bancorp's cases is asking the bankruptcy court to approve a stipulation with the Debtors. The stipulation grants the Creditors Committee standing to pursue certain estate causes of action and granting the Committee leave, standing and authority to prosecute and, if appropriate, settle certain claims on behalf of the Debtor's estates. According to BData, the Stipulation authorizes the Committee to investigate and pursue certain potential claims and/or causes of action against each of (i) the recipients of transfers from the Debtors which may be avoidable under 11 U.S.C. Sections 544, 547, 548 and 549 other than Paul Hastings Janofsky & Walker or the Debtors' current officer, directors or independent contractor and (ii) the Debtors' former auditor KPMG for the benefit of the Debtors' estates. About PFF Bancorp PFF Bancorp Inc. -- http://www.pffbank.com/-- was a non- diversified unitary savings and loan holding company within the meaning of the Home Owners' Loan Act with headquarters formerly located in Rancho Cucamonga, California. Bancorp is the direct parent of each of the remaining Debtors. Prior to filing for bankruptcy, Bancorp was also the direct parent of PFF Bank & Trust, a federally chartered savings institution, and said bank's subsidiaries. PFF Bancorp Inc. and its affiliates sought Chapter 11 protection on December 5, 2008 (Bankr. D. Del. Case No. 08-13127 to 08-13131). Chun I. Jang, Esq., and Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC serves as the Debtors' claims agent. Jason W. Salib, Esq., at Blank Rome LLP, represents the official committee of unsecured creditors as counsel. PRECISION PARTS: Committee Given Approval to Sue Creditors ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that the official committee of unsecured creditors for Precision Parts International Services Corp. received authority to pursue lawsuits to recover payments made by the Debtor within 90 days of the Chapter 11 filing in December 2008. The Committee says that PPI consents to allowing the committee to pursue preference suits. Mr. Rochelle relates that the Creditors Committee says that its constituency is likely to be the beneficiaries of preference recoveries. The Committee's constituency will also be the defendants in the preference suits, according to Mr. Rochelle. PPI sold it assets in March for $16 million, with $9.8 million paid to secured creditors. After the Official Committee of Unsecured Creditors challenged the validity of the secured lenders' claim, it obtained a settlement in which $575,000 was carved out for the Company's creditors. In addition to $150,000 cash, unsecured creditors are to receive some recoveries from lawsuits, plus other excess cash, if any. Mr. Rochelle relates that any suits brought by the Committee will be taken over by a trust to be created under the proposed liquidating Chapter 11 plan. The hearing for approval of the disclosure statement is currently on the court's calendar for Dec. 1. About Precision Parts Headquartered in Rochester Hills, Michigan, Precision Parts International Services Corp. -- http://www.precisionparts.com/-- sold products to major north American automotive and non- automotive original equipment manufacturers and Tier 1 and 2 suppliers. PPI and its units operated six manufacturing facilities throughout North America, including a facility in Mexico operated on their behalf by Intermex Manufactura de Chihuahua under a shelter and logistics agreement. The Company and eight of its affiliates filed for Chapter 11 protection on December 12, 2008 (Bankr. D. Del. Lead Case No. 08-13289). Attorneys at Pepper Hamilton LLP are bankruptcy counsel to the Debtors. Alvarez & Marsal North America LLC is the Debtor's financial advisors and Kurtzman Carson Consultants LLC is the claims, noticing and balloting agent. PPI Holdings, Inc., estimated assets and debts between $100 million and $500 million in its Chapter 11 petition. PROBE RESOURCES: Debt Deal Expires; Units Now in Ch. 11 ------------------------------------------------------- Probe Resources Ltd. disclosed that its Debt Restructuring Agreement which became effective on August 31, 2009 has expired and, accordingly, the Company's Board of Directors has appointed a restructuring agent to assist with the Company's restructuring efforts. Additionally, the Company's U.S. subsidiaries have filed voluntary Chapter 11 petitions in U.S. Bankruptcy Court. Debt Restructuring Agreement The DRA was established to schedule repayment of the Company's outstanding past due trade payables and credit agreements in an orderly manner consistent with monthly collected revenues, following deduction for well and lease operating costs, transportation payments and royalty payments as well as general and administrative expenses of the Company. The amended DRA expired on October 15, 2010 and did not have established renewal or extension provisions for outstanding balances at the time of expiration. As a result of the expiry of the DRA, the Company's Forbearance Agreement with its primary lender has also expired resulting in modifications to the cash management process that has been in place since August 31, 2009. The Company's primary lender has also exercised its right to take control over funds in the respective control accounts of Probe's operating subsidiaries. Chief Restructuring Officer Appointment Probe's Board of Directors has formally engaged Energy Spectrum Advisors Inc. as the Company's exclusive financing advisor and restructuring agent. ESA will immediately undertake a restructuring plan on behalf of Probe in the best interests of the Company and its stakeholders. Also as part of its terms of engagement, Coy Gallatin, Senior Vice President of ESA will act as Chief Restructuring Officer of the Company effective immediately. Mr. Gallatin has been an advisory professional with ESA since 2008. Prior to joining ESA, Mr. Gallatin served three years as Executive Vice President and manager of Energy Lending for Bank of Texas, an affiliate of BOK Financial. In addition, he has served as manager of other BOK Financial affiliated energy groups. Mr. Gallatin brings with him over 25 years of experience with financial institutions in various energy-related fields, including all of the major mid-continent markets. Chapter 11 Filing The Company's U.S. subsidiaries filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of Texas in Houston, Texas. Probe and its subsidiaries will continue to operate their businesses and manage their properties as debtors in possession. The bankruptcy filing follows the expiration of the DRA and Forbearance Agreements, and the resulting sweep of all unrestricted cash accounts by the Company's primary lender. In addition, the emergency cash fund held in restricted accounts by the Creditors' Agent under the DRA was disbursed to creditors. This left the Company with no operating cash. Management and its primary lender had previously proposed several restructuring plans that were initially agreed to by both secured and unsecured creditors, but none of the plans were executed. Ultimately, the primary lender and Creditors' Agent indicated to Management that no further plans would be considered in absence of a Bankruptcy filing. "The loss of all cash flow as a result of Hurricane Ike, unprecedented declines in commodity prices, the mechanical failure of the EC 37 A-2 well, and difficulty in accessing affordable capital have resulted in the Company's current situation. We are hopeful that the restructuring of the Company through the Bankruptcy process will result in the ability to fully realize the significant value of the Company's undeveloped assets," stated Scott Broussard, Probe's Chief Executive Officer and Chairman of the Board. Operational Update The Company provides an operational update on its development activities in the Gulf of Mexico as follows: High Island 115 After an extended shut in due to decommissioning of the host processing platform in HI 71, related disconnection of the sales export pipeline, and installation of production facilities, the High Island B-1 Sidetrack well recommenced production in July 2010 and is currently producing approximately 6.5 MMCF/D. Probe, non- operator of the well, currently owns a 27.50% working interest and 22.06% net revenue interest in the well. East Cameron 36 The EC 36 A-1 well continues to produce at a gas rate of 5.7 MMCF/D with a condensate rate of 50 BCPD and flowing tubing pressure of 2,310 psi. Probe is the operator and holds a 52% WI and a 35.62% NRI prior to project payout. Petrodome EC, LLC owns a 44% WI and 32.10% NRI BPPO. East Cameron 37 Remediation efforts have been unsuccessful in resolving the mechanical issues in the EC 37 A-2 well. The Company is evaluating its plans to plug back to a gas bearing sand in the current well bore. The well may ultimately be sidetracked to re- capture Rob L reserves and to evaluate deeper objectives. The Company holds a 52% WI and 35.36% NRI BPPO. Petrodome EC, LLC owns a 44% WI and 32.10% NRI BPPO. East Cameron 246 The EC 246 #2 well was drilled, cased, and suspended in 2008. Probe is reviewing its plans to complete the development of the discovery early in 2011. The development consists of the installation of production facilities, an export pipeline, and completion of the well. The expected gross production rate from this formation is 8-12 MMCF/D plus associated condensate. Probe's independent reserve engineers estimated probable reserves of 11.1 BCF gas and 5,600 BBLS condensate. Probe is operator and currently holds a 90% WI and a 61.60% NRI in the EC 246 Well #2 BPPO. The ultimate restructuring plan will address potential sources of funding required to complete the development of the discovery. South Timbalier 214 The ST 214 #A-6 Sidetrack well is currently producing at a nominal gas rate of 2.0 MMCF/D and condensate rate of 20 BCPD. It also produces approximately 2,250 BWPD. The well has produced approximately 10.5 BCF of gas and 117,000 barrels of condensate to date. Production has significantly exceeded the projected proved reserve estimates conducted by Probe's independent reservoir engineers at the time of initial production. The independent reserve engineers are currently updating the reserve estimates to reflect actual production. Probe is the operator and holds a 100% WI and 68.50% NRI BPPO. South Timbalier 198 Probe will be evaluating plans to drill the ST 198 A-7 Sidetrack 2 well. The lease was acquired in 2009 subsequent to purchasing the platform used to develop the ST 214 A-6 Sidetrack well. Probe's independent reserve engineers have estimated approximately 9.3 BCF gas and 167,000 BBLS condensate as proved undeveloped reserves and 8.7 BCF gas and 212,000 BBLS condensate as probable reserves with the potential for additional reserves in other categories. Probe is currently seeking a joint venture partner to facilitate the drilling and completion of a sidetrack of an existing well on the platform to develop these reserves. The ultimate restructuring plan will address potential sources of capital required to fund Probe's share of completion costs. Probe is operator and currently holds a 100% WI and 70% NRI in the lease. The foregoing approximations are estimates only based on available technical data and are not contained in a compliant National Instrument 51-101 reserve report and therefore should not be relied upon in making any investment decision. As part of its annual fiscal reporting requirement, Probe has engaged its independent engineering firm to complete a National Instrument 51- 101 report with respect to the possible additional reserves which will be filed publicly as soon as such report is available. In addition to the risks with respect to the completion of the reserve report, Probe will require funding in order to develop any additional reserves. About Probe Resources The Company, along with its wholly-owned subsidiaries located in The Woodlands, Texas, is an oil and natural gas exploration and production company focused on generating, acquiring, developing, and operating drilling prospects within the Texas and Louisiana Outer Continental Shelf of the Gulf of Mexico. QOC I LLC: Hearing on Case Dismissal Moved to Dec. 7 ---------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida has continued until December 7, 2010, at 10:00 a.m., the hearing to consider the request to dismiss the Chapter 11 case of QOC I LLC. As reported in the Troubled Company Reporter on October 8, Wells Fargo Securities, LLC, and Wells Fargo Bank, N.A., asked the Court to dismiss the Debtor's case because the bankruptcy constitutes a "bad faith" filing. Wells Fargo asserted that its operations consist primarily of "owning life insurance policies previously issued by insurance companies and sold in the life settlement market. At the same hearing, the Court will also address the Debtor's request to further access to use $1,112,766 of Wells Fargo Bank, National Association's cash collateral. Wells Fargo also challenged the value that QOC I has assigned to the life insurance policies. While QOC I asserted that its assets are worth $160-165 million (i.e., in excess of Wells Fargo's claims), the bank asserted that the policies "have a present market value of not more than $100 million. About QOC I LLC Boca Raton, Florida-based QOC I LLC owns previously issued life insurance policies purchased in the life settlement market. QOC I filed for Chapter 11 bankruptcy protection on October 1, 2010 (Bankr. S.D. Fla. Case No. 10-40153). Attorneys at Genovese Joblove & Battista, P.A., serve as counsel to the Debtor. The Debtor estimated its assets and debts at $100 million to $500 million as of the Petition Date. REAL MEX: Lowers Third Quarter Net Loss to $6.3 Million ------------------------------------------------------- Real Mex Restaurants Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $6.30 million on $118.62 million of total revenues for three months ended Sept. 26, 2010, compared with a net loss of $13.45 million on $124.21 for the three months ended Sept. 27, 2010. The Company's balance sheet at Sept. 30, 2010, showed $287.51 million in total assets, $248.57 million in total liabilities, and stockholder's equity of $38.93 million. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6e6f About Real Mex Based in Cypress, California, Real Mex Restaurants, Inc., owns and operates restaurants, primarily through its major subsidiaries El Torito Restaurants, Inc., Chevys Restaurants, LLC, and Acapulco Restaurants, Inc. The Company operated 183 restaurants as of March 28, 2010, of which 152 were located in California and the remainder were located in 12 other states, primarily under the trade names El Torito Restaurant(R), Chevys Fresh Mex(R) and Acapulco Mexican Restaurant Y Cantina(R). In addition, the Company franchised or licensed 34 restaurants in 12 states and two foreign countries as of March 28, 2010. The Company's other major subsidiary, Real Mex Foods, Inc., provides internal production, purchasing and distribution services for the restaurant operations and also provides distribution services and manufactures specialty products for sale to outside customers. Moody's Investors Service affirmed Real Mex Restaurant Inc.'s Speculative Grade Liquidity rating at SGL-3. Real Mex's long term ratings, including its Caa2 Corporate Family Rating, and stable outlook are unaffected by the announcement. REFLECT SCIENTIFIC: Posts $122,000 Net Loss in Q3 2010 ------------------------------------------------------ Reflect Scientific, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $121,988 on $735,344 of revenue for the three months ended September 30, 2010, compared with a net loss of $932,582 on $1.1 million of revenue for the same period last year. The Company is currently in default on its issued and outstanding debentures totaling $2.3 million. Under the terms of the debenture, a penalty of 30% of the outstanding principle was accrued upon default. On the date of default the Company recognized this additional amount due of $690,000. Also under the terms of the debenture, upon default, the Company was required to accrue and pay interest at the default rate of 18%. The Company's balance sheet at September 30, 2010, showed $4.7 million in total assets, $4.1 million in total liabilities, and stockholders' equity of $652,104. As reported in the Troubled Company Reporter on April 6, 2010, Mantyla McReynolds, LLC, in Salt Lake City, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has experienced recurring losses from operations and negative operating cash flows from operations. The Company is also in default on its debentures. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6ea2 Orem, Utah-based Reflect Scientific, Inc. (OTC: RSCF) was incorporated under the laws of the State of Utah on November 3, 1999, under the name Cole, Inc. On December 30, 2003, the Company changed its name to Reflect Scientific, Inc. Over the next twelve months the Company's focus will be on the commercialization of products acquired and developed over the last several years. Included in this focus will be the continued development and commercialization of the Company's ultra low temperature refrigerator line, with the refrigerated trailer, known as a "reefer" being given highest priority. Additionally, the Company will continue to develop and expand its focus on solutions and services to retrofit server and computer rooms to help reduce the cost of cooling such rooms, as well as provide a more reliable and efficient method to cool such rooms. The Company will also continue to focus on the expansion of its detector line and contract manufacturing operations. REGAL ENTERTAINMENT: Posts $42-Mil. Net Income in Third Quarter --------------------------------------------------------------- Regal Entertainment Group filed its quarterly report on Form 10-Q, reporting net income of $42.6 million on $696.4 million of total revenues for the quarter ended Sept. 30, 2010, compared with a net loss of $1.9 million on $673.5 million of total revenues for the quarter ended Oct. 1, 2009. The Company's balance sheet at Sept. 30, 2010, showed $2.67 billion in total assets, $2.94 billion in total liabilities, and a stockholder's deficit of $267.3 million. A full-text copy of the quarterly report on Form 10-Q is available for free at http://researcharchives.com/t/s?6ec5 About Regal Entertainment Group Based in Knoxville, Tennessee, Regal Entertainment Group (NYSE: RGC) -- http://www.REGmovies.com/-- is the largest motion picture exhibitor in the world. Regal's theatre circuit, comprising Regal Cinemas, United Artists Theatres and Edwards Theatres, operates 6,739 screens in 545 locations in 38 states and the District of Columbia. Regal operates theatres in 43 of the top 50 U.S. designated market areas. * * * Regal Entertainment carries 'B1' corporate family and probability of default ratings from Moody's Investors Service, 'B+' issuer default rating from Fitch Ratings, and 'B+' corporate credit rating from Standard & Poor's Ratings Services. As reported in the Troubled Company Reporter on Aug. 13, 2010, Fitch Ratings assigned a 'B-/RR6' rating to Regal Entertainment Group $275 million 9.125% senior unsecured note due 2018. Also as reported in the TCR on August 13, Moody's assigned a B3 rating to Regal's proposed new $275 million senior unsecured note issuance. Standard & Poor's assigned Regal's proposed $275 million senior unsecured notes due 2018 its issue-level rating of 'B-' (two notches lower than S&P's 'B+' corporate credit rating on the company). S&P also assigned this debt a recovery rating of '6', indicating its expectation of negligible (0% to 10%) recovery for noteholders in the event of payment default. RENASCENT INC: Files Schedules of Assets and Liabilities -------------------------------------------------------- Renascent, Inc., filed with the U.S. Bankruptcy Court for the District of Montana its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $12,800,000 B. Personal Property $331,199 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $6,328,420 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $950,000 ----------- ----------- TOTAL $13,131,199 $7,278,420 Victor, Montana-based Renascent, Inc, filed for Chapter 11 bankruptcy protection on September 29, 2010 (Bankr. D. Mont. Case No. 10-62358). Jon R. Binney, Esq., who has an office in Missoula, Montana, represents the Debtor. ROBERT NAZARIAN: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Robert S. Nazarian 418 North End Blvd. Salisbury, MA 01952 Bankruptcy Case No.: 10-22329 Chapter 11 Petition Date: November 11, 2010 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Henry J. Boroff Debtor's Counsel: Gary W. Cruickshank, Esq. LAW OFFICE OF GARY W. CRUICKSHANK 21 Custom House Street, Suite 920 Boston, MA 02110 Tel: (617) 330-1960 Fax: (617) 330-1970 E-mail: gwc@cruickshank-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- R&D Development Realty LLC 09-21771 12/31/09 RIVANNA PLAZA: To Move Forward with Project ------------------------------------------- Rivanna Plaza LLC, the developer of a project proposed for U.S. 29 north of Charlottesville, Virginia, has filed for Chapter 11 protection. The Debtor, however, is still planning to move forward with the project and expects to break ground in the middle of the coming year, The Daily Progress reports. Rivanna Plaza, LLC, filed a Chapter 11 petition on November 9, 2010 (Bankr. W.D. Va. Case No. 10-63212). Douglas E. Little, Esq., serves as bankruptcy counsel. The Debtor scheduled $3,000,000 in assets and $2,104,973 in liabilities as of the petition date. ROCK & REPUBLIC: Close to Sale Deal, Seeks Exclusivity Extension ---------------------------------------------------------------- Rock & Republic Enterprises Inc. wants more time to control its Chapter 11 case, saying it's on the brink of officially striking a deal for the sale of its apparel business, Dow Jones' Small Cap reports. According to the report, the Debtor is requesting a 15-day extension of its exclusive right to propose a bankruptcy-exit plan, seeking to keep possible rival plans at bay while it hashes out the details of a sale transaction and repayment proposal. Rock & Republic said it's in the "final stages of negotiating an asset purchase agreement." The Debtor in September received the go-ahead from a judge to proceed with exclusive sale talks after securing a non-binding letter of intent from an entity known as GR Acquisition LLC, the report notes. GR Acquisition is offering at least $33 million in exchange for the assets, according to court papers introduced earlier this fall, the Dow Jones report says. About Rock & Republic New York-based Rock & Republic Enterprises, Inc., is a wholesale and retail apparel company specializing in an avant-garde and distinctive line of clothing. Originally started in 2002 by its Chief Executive Officer, Michael Ball, primarily as an American jeans company, the Debtors have expanded their lines to include high fashion clothing for men, women and children as well as shoes, cosmetics and accessories. The Company's merchandise can be found at most high end retail stores such as Nordstrom, Neiman Marcus, Bergdorf Goodman, Bloomingdales, Lord & Taylor, Harvey Nichols and Saks Fifth Avenue, as well as in small upscale boutiques. The Company filed for Chapter 11 bankruptcy protection on April 1, 2010 (Bankr. S.D.N.Y. Case No. 10-11728). Alex Spizz, Esq., and Arthur Goldstein, Esq., at Todtman, Nachamie, Spizz & Johns, P.C., assist the Company in its restructuring effort. Manderson, Schaefer & McKinlay, LLP, is the Company's special corporate counsel. The Company estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities. The Company's affiliate, Triple R, Inc., filed a separate Chapter 11 petition on April 1, 2010 (Bankr. S.D.N.Y. Case No. 10-11729). The Court has extended the Debtors' exclusive period to propose a Chapter 11 plan until November 15, 2010, and its exclusive period to solicit acceptances of that plan until January 14, 2011. Rock & Republic has said it is in talks with a newly formed entity called GR Acquisition LLC, which offered to purchase its assets for at least $33 million. RONALD RUNYEON: Section 341(a) Meeting Scheduled for Dec. 10 ------------------------------------------------------------ The U.S. Trustee for Region 8 will convene a meeting of Ronald D. Runyeon's creditors on December 10, 2010, at 10:00 a.m. The meeting will be held at Customs House, 701 Broadway, Room 100, Nashville, TN 37203. This is the first meeting of creditors required under Section 341(a) of the U.S. 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. Kingston Springs, Tennessee-based Ronald D. Runyeon and Linda Sue Simmons filed for Chapter 11 bankruptcy protection on November 4, 2010 (Bankr. M.D. Tenn. Case No. 10-12006). Elliott Warner Jones, Esq., and Warner Jones, Esq., and Emerge Law, PLC, assist the Debtor in its restructuring effort. The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million. RONALD RUNYEON: Wants Filing of Schedules Extended Until Dec. 2 --------------------------------------------------------------- Ronald D. Runyeon and Linda Sue Simmons ask the U.S. Bankruptcy Court for the Middle District of Tennessee to extend until December 2, 2010, the deadline for the filing of schedules of assets and liabilities and statement of financial affairs. The Debtors are working diligently to assemble their financial information but expects that they will require additional time to complete the Statements and Schedules and ensure the accuracy thereof. The 14-day time period specified in Rule 1007 of the Federal Rules of Bankruptcy Procedure and Interim Local Rule 1007- I for filing the Statements and Schedules expires on November 18, 2010. Kingston Springs, Tennessee-based Ronald D. Runyeon and Linda Sue Simmons filed for Chapter 11 bankruptcy protection on November 4, 2010 (Bankr. M.D. Tenn. Case No. 10-12006). Elliott Warner Jones, Esq., and Warner Jones, Esq., and Emerge Law, PLC, assist the Debtor in its restructuring effort. The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million. RONALD RUNYEON: Asks for Access to Cash Collateral Until January ---------------------------------------------------------------- Ronald D. Runyeon and Linda Sue Simmons seek authority from the U.S. Bankruptcy Court for the Middle District of Tennessee to use until January 2011 the cash collateral securing their obligation to their prepetition lenders. The Debtors' primary secured creditors are Aurora Loan Services, Bank of America, Cenlar, Chase Home Finance, Fidelity Bank, GreenBank, Heritage Bank, IndyMac Mortgage, Northpointe Bank, Regions Mortgage, RoundPoint Mortgage, Southeast Federal Credit Union and SunTrust Bank. As of the Petition Date, the total amount owed to the Lenders was $6,000,000. The Debtors' unsecured obligations total a $193,000. The Debtors believe a security interest in cash collateral and assignment of rents may exist in favor of one or more of the Lenders. The Lenders are the only entities that may claim an interest in the Debtor's cash collateral and have assignment of rents provisions contained in their loan documents with the Debtors. Elliott W. Jones, Esq., at Emerge Law PLC, explains that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. The Debtors will use the collateral pursuant to a three-month budget, a copy of which is available for free at http://bankrupt.com/misc/RONALD_RUNYEON_budget.pdf In exchange for using the cash collateral, the Debtors propose to grant the Lenders a postpetition replacement lien to the Lenders on cash to the extent of cash collateral actually expended and on the same assets and in the same order of priority as currently exists. Kingston Springs, Tennessee-based Ronald D. Runyeon and Linda Sue Simmons are a married couple in the business of residential real estate investment and rentals in and around the Nashville, Tennessee area. Ronald D. Runyeon and Linda Sue Simmons filed for Chapter 11 bankruptcy protection on November 4, 2010 (Bankr. M.D. Tenn. Case No. 10-12006). Elliott Warner Jones, Esq., and Warner Jones, Esq., and Emerge Law, PLC, assist the Debtor in its restructuring effort. The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million. ROTHSTEIN ROSENFELDT: Trustee & AmEx Settle $20.7MM Lawsuit ----------------------------------------------------------- American Express Co. and Scott Rothstein's law firm have settled a $20.7 million lawsuit regarding the use of Rothstein's credit card to cover the personal purchases of the Ponzi-scheme operator, his wife, his mother and his colleagues, Dow Jones' Small Cap reports. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA, has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non-existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. RP SAM: Can Access California Credit's Cash Collateral ------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California approved the stipulation authorizing RP Sam Houston Plaza, L.P., to use the cash collateral of California Credit Union, a California state chartered credit union. The stipulation was negotiated in good faith and at arm's-length among the Debtor and CCU. Pursuant to the prepetition loan documents, all obligations of the Debtor to California Credit are secured by a first priority blanket security interest in substantially all of the Debtor's assets including, without limitation, three office buildings in Houston, Texas located at 507, 519, and 523 N. Sam Houston Parkway East, Houston, Texas 77060 and the proceeds of the buildings. The Debtor's loan with California Credit has an outstanding principal balance of $10.3 million as of July 28, 2010. The Debtor believes the value of the buildings is $14.0 million. The Debtor would use the cash collateral to fund its Chapter 11 case, pay suppliers and other parties. As adequate protection of California Credit's interests in the prepetition collateral, including use of the cash collateral, the Debtor will grant California Credit replacement liens in all property of the Debtor's estate, including any of Debtor's unencumbered assets. The Debtor will also make monthly adequate protection payments to California Credit in the same amounts and at the same times specified in the prepetition loan documents. About RP Sam Houston Plaza, L.P. Rancho Cucamonga, California-based RP Sam Houston Plaza, L.P., filed for Chapter 11 bankruptcy protection on July 29, 2010 (Bankr. C.D. Calif. Case No. 10-33922). D. Edward Hays, Esq., at Marshack Hays LLP, assists the Debtor in its restructuring effort. The Company estimated its assets and debts at $10 million to $50 million in its Chapter 11 petition. SANSWIRE CORP: CEO and Partners Buy Shares of Common Stock ---------------------------------------------------------- Sanswire Corp. announced that its president and CEO, Glenn Estrella, along with several of the Company's partners have made an investment in Sanswire by purchasing shares of Common Stock of the Company, the proceeds of which will be used to advance our STS-111 UAV flight testing and Company operations. This new investment by the Company's CEO and partners follows an investment by the Company's Chairman of the Board, Michael Clark, at the end of September to facilitate the Company's effort and offer to settle pending litigation with the Securities and Exchange Commission. The Company has teamed up with several of its defense partners to assist in funding the further development and testing of the STS- 111 UAV's onboard flight systems, including an upgraded propulsion system and the integration of an intelligence, surveillance and reconnaissance package into the STS-111. Sanswire is currently in discussions with government officials concerning mid altitude flight testing at government facilities with the appropriate airspace in which to operate the Company's UAVs. Following any successful negotiations, Sanswire expects to transport the STS-111 and supporting systems and personnel to certain flight facilities where the Company plans to undertake increased altitude and endurance testing of its UAVs. Sanswire President and CEO Glenn Estrella stated, "Along with our dedicated partners, I am committed to executing our business plan and wanted to assist the Company by providing necessary resources to demonstrate the capabilities of the STS-111 UAV at targeted venues for potential customers." Mr. Clark added, "Together we will work to enhance our technology to produce UAVs with capabilities that satisfy the requirements of the demanding marketplace." About Sanswire Corp. Aventura, Fla.-based Sanswire Corp.'s primary business is the design, construction and marketing of a variety of aerial vehicles through a joint venture with TAO Technologies, Stuttgart, Germany, named Sanswire-TAO Corp. The High Altitude class of prospective airships are generally referred to as HAAs (High Altitude Airships) but have also been called HAPs (High Altitude Platform) and HALEs (High Altitude Long Endurance). They have been designed to be able to keep a station in one location in the Stratosphere, at approximately 65,000 ft. for durations of 30 days or more. The Company's balance sheet as of June 30, 2010, showed $3.6 million in total assets, $19.5 million in total liabilities, and a stockholders' deficit of $15.9 million. The Company had a working capital deficit of $17.6 million and a stockholders' deficit of $15.9 million at June 30, 2010. Additionally, at June 30, 2010, the Company had an accumulated deficit of $139.5 million, compared to $134.7 million at December 31, 2009. SEP RIVERPARK: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: SEP Riverpark Plaza, L.L.C. aka Riverpark Plaza Apartments P.O. Box 22546 Oklahoma City, OK 73123 Bankruptcy Case No.: 10-16832 Chapter 11 Petition Date: November 11, 2010 Court: U.S. Bankruptcy Court Western District of Oklahoma (Oklahoma City) Judge: Sarah A. Hall Debtor's Counsel: G. Rudy Hiersche, Jr., Esq. 105 North Hudson Hightower Building, Suite 300 Oklahoma City, OK 73102 Tel: (405) 235-3123 E-mail: rudy@hlfokc.com Scheduled Assets: $19,165,623 Scheduled Debts: $12,026,685 The petition was signed by Lew McGinnis, president Of Macco Properties Inc. Debtor's List of 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sedgwick County Treasurer Trade Debt $631,369 525 N. Main Wichita, KS 67203 Tenant Security Deposits Trade Debt $69,095 Wichita Water Utilities Trade Debt $47,321 455 N. Main Wichita, KS 67202 Corporate Group LLC Trade Debt $20,000 Wichita Awning Trade Debt $7,399 Waste Management Of Wichita Trade Debt $7,385 Macco Properties, Inc. Trade Debt $7,280 Westar Trade Debt $6,243 Central Glass Trade Debt $2,300 Cox Communications Trade Debt $602 Kansas Natural Gas Trade Debt $487 SEVERN BANCORP: Swings to $485,000 Net Income in 3rd Quarter ------------------------------------------------------------ Severn Bancorp Inc. filed its quarterly report on Form 10-Q, reporting net income for the third quarter of $485,000 compared to net loss of $4.4 million per share for the third quarter of 2009. The Company reported interest income of $12.08 million in the three months ended Sept. 30, 2010, compared with $13.34 million in the same period in 2009. The Company's balance sheet at Sept. 30, 2010, shows $975.89 million in total assets and $870.08 million in total liabilities. At September 30, 2010, Severn's regulatory capital ratios continued to exceed the levels required to be considered "well capitalized" under applicable federal banking regulations, including its core ratio of approximately 12.1% compared to the regulatory requirement of 5% for "well capitalized" status. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6e6e A full-text copy of the Company's earnings release is available for free at http://ResearchArchives.com/t/s?6c99 About Severn Savings Bank Founded in 1946, Severn Savings Bank, FSB -- http://www.severnbank.com/-- is a full-service community bank offering a wide array of personal and commercial banking products as well as residential and commercial mortgage lending. It has assets of nearly $1 billion and four branches located in Annapolis, Edgewater and Glen Burnie. The bank specializes in exceptional customer service and holds itself and its employees to a high standard of community contribution. Severn Bancorp, Inc., (Nasdaq: SVBI) is the parent company of Severn Savings Bank. As reported by the TCR on November 25, 2009, Annapolis, Maryland- based Severn Bancorp along with its Bank unit, has entered into supervisory agreements with the Office of Thrift Supervision, the Bank's primary federal regulator. The agreements set forth steps being taken in response to regulatory concerns with its operating results and effects of the current economic environment facing the financial services industry. SHUBH HOTELS DETROIT: Secured Creditor Fights Bankruptcy Loan ------------------------------------------------------------- Shubh Hotels Detroit LLC's proposed financing package is based on "speculative" and "unrealistic assumptions" about its odds of successfully reopening its shuttered Detroit hotel and should therefore be denied, according to creditor United Central Bank, Dow Jones' Small Cap reports. According to the report, the bank, owed more than $29.7 million on the hotel's first mortgage, said it's "simply inappropriate" for Shubh Hotels Detroit to seek approval of a $3 million loan in light of Detroit's economic troubles, the allegations of mismanagement that spurred a court to take away the company's control of the former Detroit Riverside Hotel and the fact that the hotel has been closed for more than a year. "Their ability to perform under the proposed financing is speculative and there is no realistic prospect for a successful reorganization or rehabilitation under Chapter 11," United Central Bank said in court papers, the report notes. Dow Jones' says that Shubh Hotels Detroit is seeking to tap a $3 million bankruptcy loan from Chicago-based JDI Loans LLC. Shubh Hotels Detroit, LLC, filed for Chapter 11 protection on October 21, 2010 (Bankr. S.D. Fla. Case No. 10-42163). Susan D. Lasky, Esq., at Susan D. Lasky, PA, in Wilton Manors, Florida, represents the Debtor. The Debtor estimated up to $50,000 in assets and debts of $10,000,001 to $50,000,000 in the Chapter 11 petition. SIX FLAGS: Moody's Upgrades Corporate Family Rating to 'B1' ----------------------------------------------------------- Moody's Investors Service upgraded Six Flags Theme Parks, Inc.'s Corporate Family Rating and Probability of Default Rating each to B1 from B2 and assigned a B1 rating to the company's upsized $1.1 billion senior secured first lien credit facility. Six Flags plans to utilize the net proceeds from the facility along with approximately $65 million of existing cash to refinance $745 million of outstanding first lien term loans, retire its $250 million senior secured second lien term loan and pay transaction fees and expenses. The rating outlook is stable. Upgrades: Issuer: Six Flags Theme Parks, Inc. -- Corporate Family Rating, Upgraded to B1 from B2 -- Probability of Default Rating, Upgraded to B1 from B2 -- Existing Senior Secured First Lien Bank Credit Facility, Upgraded to Ba3, LGD3 - 36% from B1, LGD3 - 37% -- Existing Senior Secured Second Lien Bank Credit Facility, Upgraded to B3, LGD5 - 86% from Caa1, LGD5 - 87% Assignments: Issuer: Six Flags Theme Parks, Inc. -- Proposed Senior Secured Bank Credit Facility, Assigned a B1, LGD3 - 47% Ratings Rationale The upgrade of the CFR to B1 reflects Moody's expectation that Six Flags will be able to sustain the earnings improvement and lower leverage level achieved since it emerged from Chapter 11 bankruptcy on April 30, 2010. Six Flags' net $45 million debt repayment in connection with the refinancing, the August 2010 $25 million first lien debt pay down, and improved operating performance will lower debt-to-EBITDA to approximately 5.0x (LTM September 30, 2010, incorporating Moody's standard adjustments, the proposed refinancing, and the partnership park puts as debt) from the 7.1x level (pro forma 2009) estimated at the time of emergence. Moody's anticipates attendance will continue to gradually recover from the 2009 downturn over the next 2-3 years, and this recovery along with the company's cost reduction and yield management strategies are expected to grow EBITDA. Cash interest expense will decline due to the reductions in debt and the credit facility spread. The B1 rating on the proposed first lien facility (consisting of a 6-year $950 million term loan and the existing 5-year $120 million revolver) is one notch below the revised Ba3 rating on the existing first lien facility despite the upgrade of the CFR as the meaningful layer of second lien debt would no longer exist to cushion losses for first lien creditors (as reflected in the higher loss given default assessment of 47% vs. 36% on the first lien loan prior to the refinancing). Moody's anticipates that Six Flags will begin to distribute cash to shareholders over the next several years if the improvement in operating performance continues. The existing first lien credit agreement limits restricted payments to $10 million in 2010 with the limit growing (in $10 million annual increments) to $40 million in FY 2013. The proposed facility includes an additional restricted payments basket of up to 50% of the company's share of excess cash flow, as defined in the credit agreement. Moody's estimates this will provide approximately $25 million of incremental restricted payments capacity in each of 2010 and 2011. Moody's anticipates Six Flags will utilize the restricted payments capacity to fund a dividend and share repurchases from free cash flow. The rating on Six Flags' existing first lien credit facility was upgraded to Ba3 from B1 and the rating on its $250 million senior secured second lien term loan was upgraded to B3 from Caa1. These ratings will be withdrawn if the proposed refinancing is completed and the loans are repaid. The loss given default assessments on these instruments were updated to reflect the current debt mix prior to the proposed refinancing. Six Flags' B1 CFR reflects the sizable attendance and revenue generated from the geographically diversified regional amusement park portfolio, lower margins than other regional theme park operators, vulnerability to cyclical consumer spending, high leverage, and liquidity and funding risks associated with minority holders' annual right to put their share of partnership parks to Six Flags Entertainment Corporation (Six Flags' parent). The new management team installed after SFEC and Six Flags emerged from bankruptcy is executing a broad cost restructuring plan and implementing new marketing strategies to reduce the margin gap relative to the industry and increase earnings. These efforts build upon the earnings progress made after the Dan Snyder-led proxy takeover at the end of 2005 led to new management and progress in making the parks more family-friendly and restoring the company's image. Moody's believe these actions along with alleviating the burden of the previously over-levered capital structure will lead to improved park performance. The amusement park industry is also mature and operators must compete with a wide variety of leisure and entertainment activities to generate consumer interest, with attendance growth in the low single digit range expected over the next 3-5 years. The SGL-4 speculative-grade liquidity rating continues to reflect the risk associated with funding minority interest puts should holders exercise the maximum amount of potential obligations putable through May 2011. Moody's believes the company's improved leverage profile and cash balance provide additional capacity to meet put exercises. However, Six Flags would likely need additional external funding from uncommitted sources to fund a full exercise of the puts in part because the annual exercise date occurs near the weakest point in its seasonal cash cycle. Moody's anticipates in the CFR that annual put exercises are closer to historical norms (less than $7 million per year since 1999 except for $66 million in 2009) rather than the full amount that is assumed in the SGL rating, and that the puts can be funded from existing capacity on the $120 million revolver and $150 million multiple draw term loan facility from Time Warner. Downward rating pressure could occur if acquisitions, cash distributions to shareholders or declines in attendance and earnings driven by competition or a prolonged economic downturn lead to debt-to-EBITDA above 5.5x or free cash flow-to-debt less than 4%. Ratings could also be pressured if liquidity weakens -- including if concerns arise regarding the company's ability to meet partnership put obligations -- or the company's financial policies become more aggressive. A good liquidity position including sufficient cash, projected free cash flow and committed financing to fully cover all potential partnership park put exercises would be necessary for an upgrade. In addition, Six Flags would need to continue to improve park operating performance and margins, generate consistently strong free cash flow-to-debt and reduce debt-to-EBITDA meaningfully to be upgraded (these ratios incorporate Moody's standard adjustments and include the partnership puts as debt). Please see the credit opinion posted to www.moodys.com for additional information on Six Flags' ratings. Moody's last rating action on Six Flags was on May 4, 2010, when the company was assigned a B2 CFR, B2 PDR, B1 senior secured first lien credit facility rating, and Caa1 senior secured second lien credit facility rating. Six Flags' ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Six Flags' core industry and believes Six Flags' ratings are comparable to those of other issuers with similar credit risk. Six Flags along with its parent SFEC, headquartered in Dallas, TX, is a regional theme park company that operates 19 parks spread across North America. The park portfolio includes 15 wholly-owned facilities (including parks near New York City, Chicago and Los Angeles) and three consolidated partnership parks -- Six Flags over Texas, Six Flags over Georgia, and White Water Atlanta -- as well as Six Flags Great Escape Lodge, which is a consolidated joint venture. SFEC currently owns 52.7% of SFOT and approximately 29.7% of SFOG/White Water Atlanta. Revenue including the consolidation of the partnership parks and joint venture was approximately $970 million for the LTM period ended 9/30/10. SPECIALTY PRODUCTS: Ordered to Narrow Asbestos Discovery -------------------------------------------------------- Bankruptcy Law360 reports that Judge Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware ordered Specialty Products Holding Corp. on Monday to narrow its discovery requests against various asbestos trusts and claimants in an ongoing battle over document discovery that pits bankrupt companies against asbestos trust funds and claims processors About Specialty Products Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM, Inc., is a wholly owned subsidiary of RPM International Inc. The Company is the holding company parent of Bondex International, Inc., and the direct or indirect parent of certain additional domestic and foreign subsidiaries. The Company claims to be a leading manufacturer, distributor and seller of various specialty chemical product lines, including exterior insulating finishing systems, powder coatings, fluorescent colorants and pigments, cleaning and protection products, fuel additives, wood treatments and coatings and sealants, in both the industrial and consumer markets. The Company and filed for Chapter 11 bankruptcy protection on May 31, 2010 (Bankr. D. Del. Lead Case No. 10-11780), estimating its assets and debts at $100,000,001 to $500,000,000. The Company's affiliate, Bondex International, Inc., filed a separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779), estimating its assets and debts at $100,000,001 to $500,000,000. Gregory M. Gordon, Esq., Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve as bankruptcy counsel to the Debtors. Daniel J. DeFranceschi, Esq., and Zachary I. Shapiro, Esq., at Richards Layton & Finger, serve as co-counsel. Logan and Company is the Company's claims and notice agent. Blackstone Advisory Partners L.P. is the Debtors' financial advisor and investment banker. As of the Petition Date, the Debtors were defendants in over 10,000 pending asbestos-related bodily injury lawsuits. A significant portion of these lawsuits involve mesothelioma claims. Attorneys at Montgomery Mccracken Walker & Rhoads, LLP, serve as counsel to the Committee of Asbestos Personal Injury Claimants. SPIRIT AEROSYSTEMS: Moody's Puts 'Ba3' Rating on $300 Mil. Notes ---------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 rating to Spirit Aerosystems, Inc's proposed $300 million senior unsecured notes due 2020. The notes, for which the use of proceeds is to repay borrowings under the senior secured revolving credit facility as well as general corporate purposes, will rank pari-passu to the company's existing 7.5% notes due 2017. Concurrently, Moody's has upgraded the rating on the company's existing senior unsecured notes to Ba3 from B1, affirmed the Ba1 ratings on the company's senior secured credit facilities, and affirmed the company's Ba2 Corporate Family and Probability of Default Rating. The rating outlook remains stable. These ratings/assessments have been affected: * $300 million senior unsecured notes due 2020, assigned Ba3 (LGD5, 81%); * $300 million 7.5% senior unsecured notes due 2017, upgraded to Ba3 (LGD5, 81%) from B1 (LGD5, 86%); * Corporate Family, affirmed at Ba2; * Probability of Default, affirmed at Ba2; * $650 million senior secured revolving credit facility due September 2014, affirmed at Ba1 (LGD3, 31%); * $130.2 million senior secured term loan due September 2013, affirmed at Ba1 (LGD3, 31%); * $437.4 million senior secured term loan due September 2016, affirmed at Ba1 (LGD3, 31%). Ratings Rationale The assignment of a Ba3 rating to the company's proposed senior unsecured note issuance as well as the upgrade of the company's existing senior unsecured notes to Ba3 results from a higher proportion of the company's debt at the unsecured level, thus moving the rating on that instrument closer to the company's overall corporate family rating, consistent with Moody's loss given default methodology. The affirmation of the Ba2 Corporate Family Rating is reflective of the company's leading position in the aerostructures market, strong credit metrics and operating margins, and recent improvement in the debt maturity profile. The rating is supported by a substantial order backlog in an environment of an increasing production build rate, notably on the high volume Boeing 737 platform and ramp up of B787, with expectation now that B787 end-customer deliveries will commence in the first quarter of 2011. With the return to record global revenue passenger miles, increased airline profitability, and expectation for continued RPM growth, the industry is poised for OEM production levels to remain strong through at least 2013. Given Spirit's leading Tier-1 aerostructures position on Boeing's commercial platforms, and increasingly important role with Airbus, Moody's believe that Spirit will realize revenue and earnings growth for at least the next several years. The ratings also, however, recognize that increased production rates, on-going development costs and the delays in customer delivery of the B787 have, and will continue to, pressure working capital. This, combined with continued high levels of capital expenditures necessary to expand capacity (including for the B787 and A350), will result in significant negative free cash flow generation through much of 2011. That said, once working capital stability is achieved, combined with expected increases in operating income and reductions in capital expenditures, Spirit will be positioned to generate substantial free cash flow and to reduce leverage. Although a near term upgrade is unlikely, the rating could improve if the company demonstrates sustainable positive free cash flow generation with improving credit metrics, evidence successful execution of new platform development and maintain a strong order backlog. The ratings and outlook could be pressured if Spirit is unable to sustain solid free cash flow as production of B787 ramps up to Boeing's target production rates, including consistent progress to FCF/Debt of 10%, or if its liquidity profile weakened for any reason. The last rating action for Spirit Aerosystems, Inc., was on October 7, 2010, when the company's CFR and PDR were upgraded to Ba2 from Ba3, senior secured bank credit facilities were upgraded to Ba1 from Ba2, and senior unsecured notes were upgraded to B1 from B2. Spirit Aerosystems, Inc., headquartered in Wichita, KS, with facilities in Wichita, KS, Tulsa and McAlester OK, Kinston, NC, Prestwick, Scotland, Samlesbury, England and Kuala Lumpur, Malaysia, is a designer and manufacturer of fuselages, pylons, struts, nacelles, thrust reversers, wing assemblies and other complex components for commercial aircraft and business jets. 7/01/10 LTM revenue for Spirit approximated $4.2 billion. SPIRIT AEROSYSTEMS: S&P Assigns 'BB-' Rating to $300 Mil. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services said that it has assigned its 'BB-' issue-level rating to Spirit AeroSystems Inc.'s proposed $300 million senior unsecured notes due 2020, one notch lower than the corporate credit rating. The recovery rating is '5', indicating S&P's expectation of modest (10%-30%) recovery in a payment default scenario. The company plans to sell the notes via SEC rule 144A with registration rights, and will use proceeds to repay borrowings under the senior secured revolving credit facility and for general corporate purposes. "The ratings on Spirit reflect S&P's expectations that the company will maintain adequate liquidity and appropriate or better credit protection measures, despite near-term cash flow pressures resulting from continued liquidation of advance payments from Boeing Co. related to its 787 aircraft, increasing inventory to support new programs, and higher levels of capital expenditures," said Standard & Poor's credit analyst Roman Szuper. "The ratings also take into account the company's participation in the competitive and cyclical commercial aerospace industry; reliance on one customer, Boeing, for about 85% of sales; significant near- term costs related to the development of Boeing's 787 aircraft; and the large upfront investment required to participate in new programs," Mr. Szuper added. Spirit's position as the largest independent supplier of structures for commercial aircraft, sizable backlog, moderately leveraged capital structure, and credit metrics that are generally above average for the rating partly offset these factors. S&P assesses the company's business risk profile as fair and its financial risk profile as significant. Ratings List Spirit AeroSystems Inc. Corporate credit rating BB/Stable/-- New Rating Spirit AeroSystems Inc. $300 mil. senior unsecured notes BB- due 2020 Recovery rating 5 SPRINT NEXTEL: Weak Performance Cues Moody's Rating Reviews ----------------------------------------------------------- Moody's Investors Service placed the ratings of Sprint Nextel Corporation under review for possible downgrade. The review was prompted by Moody's concerns that Sprint's continued weak, albeit slowly improving, operating performance combined with a further deterioration in its relationship with Clearwire, its 4G network partner and partially-owned subsidiary, could lead to potentially higher postpaid subscriber losses and increased investment requirements in the near to medium term. In its review, Moody's will assess the sustainability of Sprint's recent operational improvements, the magnitude of the company's future internal capital investments and the likely evolution of Sprint's relationship with Clearwire. After a long slide which began following the acquisition of Nextel, Sprint's operating performance has improved gradually over the past few quarters with sequential improvements in both churn and gross adds while ARPU has remained strong. The company's postpaid base continues to shrink, although at a decelerating pace and may return to growth in 2011, although the majority of new subscribers are likely to be prepaid. Sprint's focus on customer satisfaction is starting to show up in lower churn for the core Sprint brands. Through its wholesale arrangement with Clearwire, Sprint is seeing strong adoption of its branded 4G service, while industry competitors have yet to launch competing offers. "Nevertheless, the company's operational turnaround remains fragile with significant execution risk", said Moody's Senior Vice President, Dennis Saputo. To address its poor cost structure, Sprint has announced a large network modernization effort which could push capital spending higher, although the project is unlikely to be wholly incremental to the current capex spending levels. The company's dual CDMA and iDEN networks, which are based on older technology, result in high operating costs and large in-footprint roaming fees. Sprint's network modernization effort is intended to address both of these issues, but Moody's believes it will take some time before the full financial benefits are realized. Depending upon the strategic direction chosen, Sprint could invest several billion dollars into Clearwire to develop its 4G network. The recent rift regarding Clearwire's development and sales strategy threatens to compromise the head start Sprint once had in the nascent 4G marketplace. Both Verizon, with its fast moving LTE launch, and T-Mobile, with clever advertising of its "3.5G" service, could capitalize on a potential deceleration in Sprint's 4G build-out. "Consequently, Moody's feels that a prolonged delay in the resolution of Clearwire's future funding and operating direction may derail Sprint's operational turnaround", continued Saputo. If Sprint chooses to forego further investments in Clearwire and Clearwire defaults on its debt obligations, Sprint may need to increase its own investments to pursue an independent 4-G strategy. "Moody's believes that the risk of a cross-default to Sprint's debt is low based on a variety of options available to address this issue in addition to the terms and conditions of the Equityholders' Agreement", concluded Saputo. However, a Clearwire default could cause Sprint to lose access to Clearwire's valuable wireless spectrum assets if it prompts a bankruptcy filing by Clearwire. Sprint has over $5 billion in debt which matures from 2011 to 2013. The combination of these future financial obligations, higher capex, a still fragile operational recovery and uncertainty surrounding its relationship with Clearwire, could result in a downgrade of Sprint's Ba2 rating. Specifically, downward rating momentum could develop if leverage is likely to be sustained above 4.0x (Total debt/EBITDA, Moody's adjusted). Moody's views Sprint's liquidity as strong, and projects the company will exit 2010 with over $5 billion in cash. Moody's could confirm the rating if Sprint's operating and financial performance demonstrates the success of its turnaround plan and if the dispute with Clearwire is resolved in a manner that does not weaken Sprint's credit quality. Specifically, Moody's will look for postpaid churn remaining below 2.0% and Debt/EBITDA remaining less than 4.0 times, both metrics on a sustained basis. Ratings Under Review Include: Sprint Nextel Corp. * Corporate Family Rating - Ba2 * Probability of Default Rating - Ba2 * Senior Unsecured - Ba3 -- LGD5 (74%) * Senior Unsec. Bank Credit Facility - Baa2 LGD1 (8%) Sprint Capital Corp. * Senior Unsecured - Ba3 - LGD5 (74%) Nextel Communications Inc. * Senior Unsecured - Ba2 -- LGD3 (39%) iPCS Inc. * Senior Secured 1st Priority - Ba2 -- LGD3 (42%) * Senior Secured 2nd Priority - Ba3 -- LGD5 (74%) Other ratings: * SGL / Short-Term Rating - SGL-1 Moody's most recent rating action for Sprint was on April 15, 2010, when Moody's assigned a Baa2 rating to Sprint Nextel's new revolving credit facility. Sprint Nextel Corporation, with headquarters in Overland Park, Kansas, is one of the largest telecommunications companies in the United States. It offers digital wireless services under the Sprint master brand name in addition to a broad suite of wireline communication services. The Company operates two wireless networks, one based on CDMA technology and the other over the former Nextel Communication's iDEN network. As of 9/30/2010, Sprint Nextel had 44.7 million wireless customers, including wholesale and affiliate subscribers. The Company generated $32 billion in revenues for the last four quarters ending 9/30/2010. STATES INDUSTRIES: Renwood Opportunities Acquires Assets -------------------------------------------------------- Renwood Opportunities Fund acquired the assets of States Industries, Inc. Renwood acquired the senior debt in July 2010, and in conjunction with States Industries entering Chapter 11, provided debtor-in- possession financing. Renwood successfully credit bid its senior debt in a 363 sale for the assets of States Industries. The total time from purchase of the senior debt to the closing of the 363 asset sale was less than 90 days, which preserved the going concern value of the business. About Renovo Capital Renovo Capital, through its Renwood Opportunities Fund, makes control equity investments in troubled and underperforming companies, and invests in other special situation opportunities. Renovo's investment size ranges from $3 million to $15 million with a primary focus on operating turnarounds, bankruptcy reorganizations, debt purchases and out-of-court restructurings for companies in the manufacturing, distribution and service industries. About States Industries Eugene, Oregon-based States Industries, Inc., manufactures and sells natural wood veneered panels to consumers in the form of residential wall paneling. States Industries also manufactures and sells industrial panels to manufacturers of cabinets, furniture, store fixtures and architectural interiors. States Industries' consumer products are sold through retail home improvement stores. States Industries filed for Chapter 11 bankruptcy protection on August 24, 2010 (Bankr. D. Ore. Case No. 10-65148). Brad T. Summers, Esq., and Justin D. Leonard, Esq., who have an office in Portland, Oregon, assist the Debtor in its restructuring effort. According to its schedules, the Debtor disclosed $20,615,286 in total assets and $28,458,541 in total liabilities as of the petition date. STEPHEN SELVAGGIO: U.S. Trustee Wants Case Converted to Chapter 7 ----------------------------------------------------------------- Roberta A. Deangelis, U.S. trustee for Region 3, asks the Hon. Richard E. Fehling U.S. Bankruptcy Court for the Eastern District of Pennsylvania to convert Stephen F. & Teresa Selvaggio's Chapter 11 case to Chapter 7, or to dismiss the case. According to the U.S. Trustee, the Debtors commenced this case by filing a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code on November 5, 2010, the same date on which a petition for an entity owned and controlled by the Debtors was also filed under Chapter 11. The U.S. Trustee said that this case is the Debtors' second bankruptcy case filed in this District, the first case having been filed on July 8, 2010, case number 10-22027, which was dismissed as requested by the U.S. Trustee on August 12, 2010. The U.S. Trustee said that similar to their first case, the Debtors (i) filed for a second bankruptcy commencing the instant case without any of the other required documents including, but not necessarily limited to their Schedules, Statement of Financial Affairs, Creditor Matrix, and Form 22A; (ii) filed their current petition without paying the required filing fee; and (iii) failed to obtain credit counseling prior to the commencement of their case as required. The U.S. Trustee stated that although the current petition was filed by attorney Erv D. McClain, Esq., the Petition is not signed by this or any other attorney, nor has an application for approval of the employment of any professional to represent the Debtor in this case been filed. "The attorney who filed the Petition on behalf of the Debtors is not qualified to represent the Debtors in this proceeding as he is not a disinterested person and/or holds an interest which is adverse to the Debtors," the U.S. Trustee said. The Debtors, according to the U.S. Trustee, commenced this case to again stay certain foreclosure and receivership proceedings brought by one or more of their secured creditors, or secured creditors of entities the Debtors own and/or control. The Debtors have not obtained the permission of the creditors to use cash collateral, nor has it made any payments to its secured creditor(s) subsequent to the Petition Date, the Trustee stated. Given the Debtors' apparent inability and unwillingness to comply with and fulfill even the most basic fiduciary obligations and responsibilities, and their apparent lack of any intent and ability to reorganize, the Trustee avers that cause exists for the dismissal or conversion of the Chapter 11 case to Chapter 7. If the Court grants the request for dismissal, the Trustee requests that the Debtors be barred from filing any future bankruptcy case without express permission of the Court. A hearing on the U.S. Trustee's request will be held on November 18, 2010, at 11:00 a.m. About Stephen F. Selvaggio Bethlehem, Pennsylvania-based Stephen F. Selvaggio and Teresa A. Selvaggio own and control numerous entities holding real estate and conducting business in Bucks, Northampton, and Lehigh Counties, among other places. They filed for Chapter 11 bankruptcy protection on November 5, 2010 (Bankr. E.D. Pa. Case No. 10-23282). Erv D. McLain, Esq., at Mclain & Associates, assists the Debtors in their restructuring effort. The Debtors estimated their assets and debts at $10 million to $50 million. Affiliate MNMS LP filed a separate Chapter 11 petition on November 5, 2010 (Bankr. E.D. Pa. Case No. 10-23283). STEPHEN SELVAGGIO: Files List of 20 Largest Unsecured Creditors --------------------------------------------------------------- Stephen F. and Teresa A. Selvaggio have filed with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania a list of its 20 largest unsecured creditors: Entity Claim Amount ------ ------------ County of Northampton Tax Claim Bureau 669 Washington Street Easton, PA 18042-7482 $113,010 County of Northampton Tax Claim Bureau 669 Washington Street Easton, PA 18042-7482 $106,948 County Northampton Tax Claim Bureau 669 Washington Street Easton, PA 18042-7482 $103,332 County of Northampton Tax Claim Bureau $40,362 County of Northampton Tax Claim Bureau $39,315 Internal Revenue Service $38,885 County of Northampton Tax Claim Bureau $35,048 County of Northampton Tax Claim Bureau $34,935 County of Northampton Tax Claim Bureau $33,827 County of Northampton Tax Claim Bureau $33,698 County of Northampton Tax Claim Bureau $27,795 Pennsylvania Department of Revenue $27,106 Wayne county Tax Claim Bureau $23,158 Wayne County Tax Claim Bureau $20,548 County of Northampton Tax Claim Bureau $14,657 County of Northampton Tax Claim Bureau $13,841 County of Northampton Tax Claim Bureau $13,274 County of Northampton Tax Claim Bureau $5,652 County of Northampton Tax Claim Bureau $5,652 County of Northampton Tax Claim Bureau $5,652 Bethlehem, Pennsylvania-based Stephen F. Selvaggio and Teresa A. Selvaggio filed for Chapter 11 bankruptcy protection on November 5, 2010 (Bankr. E.D. Pa. Case No. 10-23282). Erv D. McLain, Esq., at Mclain & Associates, assists the Debtors in their restructuring effort. The Debtors estimated their assets and debts at $10 million to $50 million. Affiliate MNMS LP filed a separate Chapter 11 petition on November 5, 2010 (Bankr. E.D. Pa. Case No. 10-23283). STEPHEN SELVAGGIO: Files Schedules of Assets & Liabilities ---------------------------------------------------------- Stephen F. and Teresa A. Selvaggio have filed with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $22,925,000 B. Personal Property $152,630 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $12,294,968 E. Creditors Holding Unsecured Priority Claims $778,181 F. Creditors Holding Unsecured Non-priority Claims $0 ----------- ----------- TOTAL $23,077,630 $13,073,149 Bethlehem, Pennsylvania-based Stephen F. Selvaggio and Teresa A. Selvaggio filed for Chapter 11 bankruptcy protection on November 5, 2010 (Bankr. E.D. Pa. Case No. 10-23282). Erv D. McLain, Esq., at Mclain & Associates, assists the Debtors in their restructuring effort. Affiliate MNMS LP filed a separate Chapter 11 petition on November 5, 2010 (Bankr. E.D. Pa. Case No. 10-23283). SUNGARD DATA: Moody's Corrects Speculative Grade Liquidity Rating ----------------------------------------------------------------- Moody's Investors Service has made a correction to the speculative grade liquidity rating of SunGard Data Systems Inc. Substitute 'Speculative Grade Liquidity Rating of SGL 1- from SGL-2' for 'Speculative Grade Liquidity Rating -- SGL-2.' Moody's assigned a Caa1 rating to SunGard Data System's proposed $500 million senior unsecured notes offering. The proceeds from the proposed notes will be used to refinance a portion of the existing 9.125% Senior Unsecured Notes due 2013. The assigned ratings are subject to review of final documentation and no material change in the terms and conditions of the transaction as advised to Moody's. Ratings Rationale SunGard's B2 corporate family rating reflects the company's high financial leverage of about 6x (debt-to-EBITDA, adjusted for leases and Moody's standard adjustments) and aggressive financial policies due to its acquisitive nature. Since the LBO in 2005, the company has not de-levered significantly and Moody's expects that management will remain acquisitive in order to further expand and diversify its revenue base while seeking growth opportunities. These credit risks are mitigated by the company's solid market position as a leading provider of business continuity and financial institution processing services and its strong business profile, as represented by low customer concentration, diverse product line offerings, and broad geographic reach. In addition, the company has displayed a relatively consistent and recurring revenue base and solid free cash flow generation even during economic recessions. The stable outlook incorporates Moody's expectation that SunGard will maintain credit metrics consistent with B2 rated companies with modest improvement to its financial leverage and other financial metrics. The stable outlook also assumes SunGard will not increase its debt leverage significantly or make dividend payments to its private equity sponsors. Despite the downturn and operating weakness across the financial services sector, the company, through its diverse service offerings and highly recurring revenue model, continues its stable performance during the downturn and maintains profit margins approximately in line with current levels. If the company were to incur additional leverage, the rating and/or outlook could experience negative rating pressure. This new rating was assigned: * $500 million Senior Unsecured Notes -- Caa1 (LGD 5, 79%) These ratings were affirmed/assessments revised: * Corporate Family Rating -- B2 * Probability of Default Rating -- B2 * $830 million Secured Revolving Credit Facility due 2011 and 2013 -- Ba3 (LGD-2, 27% from 28%) * $4.7 billion Secured Term Loan Facility due 2014 and 2016 -- Ba3 (LGD-2, 27 from 28%) * $250 million Senior Notes due 2014 -- B3 (LGD-4, 64% from 65%) * $500 million Senior Unsecured Notes due 2015 -- Caa1 (LGD-5, 79% from 80%) * $1.1 billion Senior Notes due 2013 -- Caa1 (LGD-5, 79% from 80%) * $1.0 billion Senior Subordinated Notes due 2015 -- Caa1 (LGD-6, 94%) Rating upgraded: * Speculative Grade Liquidity Rating - SGL 1 from SGL-2 With about $5.3 billion in revenues for the twelve months ended September 30, 2010, SunGard Data Systems Inc., headquartered in Wayne, Pennsylvania, is a provider of software and IT services. SunGard was acquired in a leveraged buy-out (LBO) by a consortium of private equity investors (including Bain, Blackstone, KKR, Silver Lake, Texas Pacific Group, GS Partners, and Providence Equity) in August 2005. SUSAN KRYGIELL: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Susan H. Krygiell 23 Quiet Moon Lane Las Vegas, NV 89135 Bankruptcy Case No.: 10-31398 Chapter 11 Petition Date: November 11, 2010 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: H Stan Johnson, Esq. CJD LAW GROUP, LLC 6293 Dean Martin Drive, Suite G Las Vegas, NV 89118 Tel: (702) 823-3500 Fax: (702) 823-3400 E-mail: sjohnson@cjdnv.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's 14 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb10-31398.pdf TALON INT'L: Posts $1.2 Million Net Loss in September 30 Quarter ---------------------------------------------------------------- Talon International Inc. reported that net loss for the quarter ended September 30, 2010 was $1.2 million compared to a net loss of $647,000 for the same period in 2009. The Company's balance sheet at Sept. 30, 2010, showed $12.77 million in total assets, $8.00 million in total liabilities, and a stockholder's equity of $12.38 million. Talon zipper sales were $5.5 million for the quarter ended September 30, 2010, reflecting a decline of 4.9% from the same quarter in 2009. Global economic weakness continued to drag on consumer confidence and spending, and fueled caution among retailers to avoid excess inventories. Buying at the wholesale level suffered in the third quarter as these concerns increased. "Although the third quarter sales results were a modest disappointment we nevertheless believe the third quarter of 2010 was a major success and a new beginning for growth and profitability. During the quarter we saw our customers embracing cautious outlooks with regard to retail sales and consequently adopting limited inventory purchase plans for the balance of 2010," noted Lonnie Schnell, Talon's CEO. "Despite the softness in the quarter's revenues we were pleased with our third quarter as we completed a milestone recapitalization of the Company's debt that greatly enhances our future liquidity and positions the Company to generate quality net earnings in future periods." A full-text copy of the earnings release is available for free at http://ResearchArchives.com/t/s?6e6c About Talon International Woodland Hills, Calif.-based Talon International, Inc. (OTC BB: TALN) -- http://www.talonzippers.com/-- is a global supplier of apparel fasteners, trim and interlining products to manufacturers of fashion apparel, specialty retailers, mass merchandisers, brand licensees and major retailers. Talon manufactures and distributes zippers and other fasteners under its Talon(R) brand, known as the original American zipper invented in 1893. Talon also designs, manufactures, engineers, and distributes apparel trim products and specialty waistbands under its trademark names, Talon, Tag-It and TekFit, to more than 60 apparel brands and manufacturers including Wal-Mart, Kohl's, J.C. Penney, Victoria's Secret, Tom Tailor, Abercrombie and Fitch, Polo Ralph Lauren, Phillips-Van Heusen, Reebok and Juicy Couture. Talon has offices and facilities in the United States, United Kingdom, Hong Kong, China, and Bangladesh. TC GLOBAL: Posts $1.6 Million Net Loss in Sept. 26 Quarter ---------------------------------------------------------- TC Global Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $1.59 million on $9.20 million of net sales for the thirteen weeks ended Sept. 26, 2010, compared with a net loss of $1.27 million of $9.78 million for the thirteen weeks ended Sept. 27, 2009. The Company's balance sheet at Sept. 30, 2010, showed $10.13 million in total assets, $15.94 million in total liabilities, and a stockholders' deficit of $5.82 million. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6e5d About Tully's Coffee Headquartered in Seattle, Washington, TC Global, Inc., dba Tully's Coffee -- http://www.tullyscoffeeshops.com/-- is a specialty coffee retailer and wholesaler. Through company owned, licensed and franchised specialty retail stores in Washington, Oregon, California, Arizona, Idaho, Montana, Colorado, Wyoming and Utah, throughout Asia with Tully's Coffee International, and with its global alliance partner Tully's Coffee Japan, Tully's premium coffees are available at 545 branded retail locations globally. TC Global also has the rights to distribute Tully's coffee through all wholesale channels internationally, outside of North America, the Caribbean and Japan. TEN SIDE: Asks for Court's Permission to Use Cash Collateral ------------------------------------------------------------ Ten Side Holdings, LLC, seeks authority from the U.S. Bankruptcy Court for the Northern District of Georgia to use cash collateral. On July 6, 2007, the Debtor entered into a Construction Loan Agreement with Keybank National Association, for a loan to the Debtor in the original principal amount of $44,400,000. On February 29, 2008, the Debtor entered into a First Modification of Construction Loan Agreement with Keybank, for an increase of the amount of the Loan of up to $5,000,000. The Debtor's sole member and owner, Ten Side Member, LLC, entered into a mezzanine loan agreement with Capital Mezz, LLC, to borrow up to $10,767,307. On February 29, 2010, Ten Side Member entered into a Modification to Loan Documents with Capital Mezz, to increase the amount of the Mezz Loan to $14,609,327. As of the Petition Date, the total outstanding balance on the Loan was approximately $45,778,222.04. Capital Mezz, through its sole member Archstone, began contacting Waterton Associates, LLC regarding the possible interest of Waterton Associates in purchasing the Loan. Waterton Associates requested that Archstone send to Waterton Associates confidential information obtained from the Debtor during inspections regarding, inter alia, the potential environmental liability. Archstone provided confidential financial and other information about the Property to Waterton Associates. Waterton and Capital Mezz entered into an agreement whereby Capital Mezz would receive a monetary benefit from Waterton should it succeed in its foreclosure action against the Debtor. On October 21, 2010, Keybank endorsed, transferred and assigned the Loan, together with all of Keybank's rights, title, and interest in and to the Loan and related documents, to special purpose entity Waterton Tenside N.H., LLC. Waterton purchased the Loan from Keybank with the sole purpose of immediately foreclosing on a project that constitutes 38,600-square feet of ground level retail space, and another that constitutes a multi-level parking garage, all located at 1000 Northside Drive, Atlanta, Georgia. Denise D. Dell-Powell, Esq., at Burr & Forman, LLP, explains that the Debtor needs to access cash collateral to fund its Chapter 11 case, pay suppliers and other parties. The Debtor will use the collateral pursuant to a budget. The Debtor is yet to supplement this motion to provide a proposed budget. The Debtor submits that Waterton is adequately protected because the Debtor proposes: (a) granting replacement liens on the Debtor's property of the same type and nature that may secure Waterton's pre-petition claim; (b) using Cash Collateral in accordance with the budget which will maintain and enhance the Property and normal business operations so as to preserve the going concern value of the Property, and which includes monthly escrow payments to cover property taxes and property insurance; and (c) commencing monthly cash payments in an amount equal to the non-default rate of interest on the value of Waterton's interest in the Property4. The Debtor's proposed commencement of monthly interest payments to Waterton provides further adequate protection. Secured creditor Waterton objects to the Debtor's request to use cash collateral. Waterton said that prepetition, the Debtor was in substantial default under the Loan Documents. Waterton filed a complaint in state court seeking the appointment of a receiver. After the state court judge signed the order appointing the receiver, the Debtor filed this bankruptcy action. According to Waterton, the Debtor has not met its burden of demonstrating that Waterton is adequately protected. Waterton Tenside NH, L.L.C., is represented by Paul M. Rosenblatt -- prosenblatt@kilpatrickstockton.com -- at Kilpatrick Stockton LLP. About Ten Side Atlanta, Georgia-based Ten Side Holdings, LLC, fka Tivoli 643 Holdings, LLC, filed for Chapter 11 bankruptcy protection on November 3, 2010 (Bankr. N.D. Ga. Case No. 10-93402). Denise D. Dell-Powell, Esq., at Burr & Forman, assists the Debtor in its restructuring effort. The Debtor estimated its assets at $10 million to $50 million and debts at $50 million to $100 million. TERRESTAR NETWORKS: Marathon Submits $75-Mil. Financing Offer ------------------------------------------------------------- TerreStar Networks Inc. and its debtor affiliates are set to convene before the U.S. Bankruptcy Court for the Southern District of New York today, November 16, 2010, to convince Judge Sean Lane to grant them final authority to enter into a $75 million postpetition credit agreement with EchoStar Corporation. EchoStar is the Debtors' largest secured creditor. David McLaughlin of Bloomberg News reports that counsel to Marathon Asset Management LP said at the hearing today that Marathon is also ready to put up a $75 million loan commitment to fund the Debtors' bankruptcy process and to replace EchoStar as DIP lender. Marathon is a large holder of shares of stock issued by TerreStar Corporation, the Debtors' parent company. In a Schedule 13D filing with the U.S. Securities and Exchange Commission dated November 8, 2010, Marathon disclosed that it is deemed to beneficially own 22,547,001 shares in TerreStar or 16.2% of the TerreStar shares deemed issued and outstanding as of August 2, 2010. Marathon is also one of the parties that objected to the approval of the Debtors' EchoStar-sponsored DIP Financing Motion. As previously reported, the other entities that objected to the DIP Motion are Harbinger Capital Partners LLC, et al; Solus Alternative Asset Management LP and Remus Holdings LLC; and Sprint Nextel Corporation. Two more parties recently filed their objections to the DIP Motion -- the Official Committee of Unsecured Creditors and the ad hoc committee of 15% senior secured payment-in-kind noteholders. The Creditors' Committee opposes the Debtors' proposed waiver of collateral surcharge rights provided under Section 506(c) of the Bankruptcy Code. The Ad Hoc Noteholder Group says it would like to allow the Debtors to have sufficient "runway" to at least market substantially all of their assets to a strategic or financial buyer, but notes that under the proposed milestones of the Debtors' Restructuring Support Agreement with EchoStar Corporation which cross-default the DIP Financing, potential buyers will not have a chance to participate in the process. In response to the Objections, Ira S. Dizengoff, Esq, at Akin Gump Strauss Hauer & Feld LLP, in New York, counsel to the Debtors, contends that the decision to choose the current DIP Financing proposal was a sound exercise of the Debtors' business judgment. None of the terms of the DIP Agreement preclude the Court from entering a Final DIP Order, he maintains. "No one suggests that the Debtors failed to run a complete and robust process to obtain proposals for their DIP Financing nor did the Debtors not extensively scour the market to identify potential postpetition lenders," Mr. Dizengoff asserts. "No one suggests that the Debtors favored the proposed EchoStar Corporation DIP Financing at the expense of another financing facility that would have created more value for the Debtors' estates." Each of the Objectors relies primarily on the link between the DIP Agreement and the Restructuring Support Agreement between the Debtors and EchoStar, specifically the cross-default provisions in each, to argue that EchoStar has improperly wrested control of the Chapter 11 cases from the Debtors and that together the DIP Agreement and the RSA constitute a "sub rosa" plan that only benefits EchoStar, Mr. Dizengoff points out. "While these arguments are not supported by the facts -- and the Debtors vehemently dispute the assertions -- they are now moot because the Debtors are no longer asking this Court to approve the assumption of the RSA," Mr. Dizengoff emphasizes. Mr. Dizengoff reiterates that the Debtors' DIP financing process was unassailable, and there is no objection to the fact that the EchoStar DIP financing commitment represents the best available financing proposal. He specifies that of the Objectors, Solus alone, likely recognizing that the Debtors easily satisfy the business judgment standard, tries to argue that the Debtors' decision should be evaluated under the entire fairness standard. "Solus is wrong," Mr. Dizengoff argues. He explains that the heightened scrutiny of entire fairness is inapplicable here because there can be no self-dealing, the parties engaged in arm's-length negotiations, and EchoStar is neither a board member nor exercises any control over any of the Debtors. As to milestone dates, Mr. Dizengoff states that they are commonly included in DIP agreements by first lien/priming lenders to ensure that a lender's investment is protected from a protracted stay in Chapter 11. He notes that the Debtors' business does not currently generate more than a minimal revenue stream, and EchoStar was providing funds on a junior basis. For this reason, he points out, EchoStar insisted on certain "Milestones" to ensure that its $75,000,000 junior DIP Loan would provide the liquidity necessary to get the Debtors through these bankruptcy proceedings, but would not result in undue risk on the DIP Lender in a situation in which it was making a junior investment behind more than $1 billion. EchoStar's insistence on the Milestones, which give the Debtors more than three months from the Petition Date to market their assets and maximize value for all stakeholders, does not give EchoStar control over the outcome of the proceedings, Mr. Dizengoff assures the Court. The Debtors, he maintains, could replace the EchoStar DIP Financing Agreement if a more advantageous replacement loan becomes available. "There is nothing about the Milestones that makes the outcome a fait accompli and, as a result, the Milestones do not turn the DIP Agreement into a sub rosa plan," Mr. Dizengoff asserts. Mr. Dizengoff also argues that any objections at the early stage of the Debtors' Chapter 11 cases relating to the existence of security interests in prepetition assets are entirely premature and improper in the context of the DIP Motion. He elaborates that as part of the DIP Financing, the Debtors have not taken a position on whether a particular creditor is or is not secured by any particular prepetition assets; rather, the Debtors have simply stipulated in the DIP Financing order that creditors have security interests in whatever assets the relevant documents state. With regard to specific objections, Mr. Dizengoff asserts that: * The Creditors' Committee's objection should be overruled because many of them are addressed in a revised proposed final order to the DIP Financing Motion; * Sprint's objections are founded in its attempt to "protect" recovery on account of its contingent, unliquidated and disputed litigation claim. Mr. Dizengoff argues that the Sprint Objection primarily addresses whether valid liens exist in the Debtors' Federal Communications Commission Licenses or the related proceeds and similar arguments are entirely premature and improper in the context of the DIP Financing Motion; * Sprint's remaining argument has no merit, where Sprint asserts that TerreStar License Inc., as a non-operating entity, should not guarantee the DIP Financing as it will receive no benefit from the DIP Financing. Mr. Dizengoff asserts that the objection wholly misses the point -- that without the support provided by TerreStar Networks Inc. and its continued operations, which are made possible through the DIP Financing, any value that exists in the licenses held by TLI could be lost; and * The Court should not consider Marathon's objections to the DIP Motion because Marathon lacks standing. Mr. Dizengoff points out that Marathon is not a party-in-interest in the Debtors' Chapter 11 cases and has no direct stake in or relationship with the Debtors. Instead, Marathon is a shareholder of common stock of the Debtors' parent corporation, which is not part of the bankruptcy proceedings. As a result, Marathon's objections are improper and should be disregarded. A chart summarizing the objections and the Debtors' responses is available for free at http://bankrupt.com/misc/TrStrDIPObjSum.pdf Debtors Ink 1st Amendment to DIP Agreement The Debtors entered into a first amendment of the DIP Credit Agreement on November 12, 2010. The Amendments are effective as of November 5, 2010, and includes these changes: (a) The definition of Acceptable Plan in Section 1.01 is amended in its entirety to read as: "'Acceptable Plan' shall mean a Plan in form and substance reasonably acceptable to the Required Lenders; provided, however, that a Plan, which is consistent in all respects with, and includes all the terms of, the Plan filed with the Bankruptcy Court on November 5, 2010, as such Plan has been, or may be amended pursuant to Article XI thereof, shall be deemed acceptable to the Required Lenders." (b) The definition of Agreed Budget in Section 1.01 is amended in its entirety to read as: "'Agreed Budget' shall mean Exhibit A to the Agreed Budget Letter Agreement, dated November 12, 2010, by and between the Borrower and Lender party thereto, subject to modification pursuant to Section 5.11(a)." (c) The definition of Milestone Requirement in Section 1.01 is amended in its entirety to read as: "Milestone Requirement" shall mean the requirement that the Loan Parties, other than the Non-Subsidiary Guarantors, shall meet the following deadlines; provided however, that in the case of clauses (b), (f) and (g) below, the deadlines shall be met by all Loan Parties (which, for the avoidance of doubt, exclude the Non-Subsidiary Guarantors from and after the Repayment Date): (a) filing an Acceptable Plan by November 5, 2010, (b) filing, jointly with any person required by the FCC or Industry Canada, (i) all necessary applications for approval of the transfers of control over all the FCC Licenses, and the transfer of control over, transfer or assignment of all the Industry Canada Licenses within the terms and conditions thereof, and related authorizations held by any Loan Party that are contemplated by any Acceptable Plan and (ii) all required notifications to the FCC and Industry Canada, in each case by December 14, 2010, (c) receiving Bankruptcy Court approval of a disclosure statement by December 14, 2010, (d) commencement of a hearing by the Bankruptcy Court on confirmation of an Acceptable Plan by January 31, 2011, (e) entry of a final, non- appealable order by the Bankruptcy Court confirming such Acceptable Plan by February 14, 2011, (f) within 7 days after request of the Administrative Agent (acting at the written request of the Required Lenders), with respect to any order of the Bankruptcy Court, a corresponding recognition order, in form and substance reasonably acceptable to the Required Lenders shall have been entered in the Canadian Court, which order shall have become final and non-appealable within twenty-one (21) days after entry of such order by the Canadian Court, and (g) the Final DIP Order and Final Recognition Order shall have become final and non- appealable within 60 and 63 days of the date of the entry of the Interim DIP Order and Initial Recognition Order, respectively." (d) The definitions of Loan Parties and Guarantors from and after the Repayment Date will exclude the Non-Subsidiary Guarantors, and, from and after the date, the Non- Subsidiary Guarantors will cease to be Guarantors and will cease to be Loan Parties, and any security interests granted in any of the Loan Documents in any of the Collateral of the Non-Subsidiary Guarantors will be released and terminated. A full-text copy of the First Amended DIP Agreement is available for free at http://bankrupt.com/misc/TrStr1stDIPAgmt.pdf About TerreStar Networks Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR) -- http://www.terrestar.com/-- is in the mobile communications business through its ownership of TerreStar Networks, its principal operating subsidiary, and TerreStar Global. TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, majority-owned subsidiaries of Trio 1 and 2 General Partnerships, plans to launch an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. This system build out will be based on an integrated satellite and ground- based technology intended to provide communication service in most hard-to-reach areas and will provide a nationwide interoperable, survivable and critical communications infrastructure. The Company intends to provide multiple communications applications, including voice, data and video services. As of June 30, 2010, the Company had four wholly owned subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar Holdings Inc., and TerreStar New York Inc. Motient Ventures Holding Inc., a wholly owned subsidiary of MVH Holdings Inc., directly holds approximately 89.3% and 86.5% interest in TerreStar Networks and TerreStar Global, respectively. TerreStar Networks Inc. and Its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No. 10-15446). The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not among the Chapter 11 filers. The Garden City Group, Inc. will act as claims and noticing agent in the chapter 11 cases. Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq. at Fraser Milner Casgrain LLP and Ira Dizengoff, Esq. , Arik Preis, Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP , serve as bankruptcy counsel to the Debtors. Blackstone Advisory Partners LP is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TERRESTAR NETWORKS: Withdraws Plea to Assume EchoStar Plan Deal --------------------------------------------------------------- TerreStar Networks Inc. and its units have withdrawn their request to assume the restructuring agreement it reached with EchoStar Corporation. The Debtors' request on the RSA assumption was previously scheduled to be heard on November 16, 2010. Before its withdrawal, the Debtors' request was subject to a number of objections from Spring Nextel Corporation, Solus Alternative Asset Management LP and Remus Holdings LLC, and Harbinger Capital Partners LLC. MAST Capital Management LLC joined the fray by suggesting changes to the proposed order. The latest objection filed before the requested RSA assumption was withdrawn was from the Official Committee of Unsecured Creditors who argued that the Debtors were attempting to force feed the RSA to parties-in-interest. The Committee also made the same assertions as the other objectors in the contention that the RSA gave EchoStar complete control over the Debtors' Chapter 11 cases. Spring Nextel Corporation; Solus Alternative Asset Management LP and Remus Holdings LLC; Harbinger Capital Partners LLC; and Marathon Asset Management L.P., in separate filings, asked Judge Lane to deny the Debtors' request to assume a restructuring support agreement with EchoStar Corporation. On behalf of Spring Nextel, Eric T. Moser, Esq., at K&L Gates LLP, in New York, contends that the sole purpose of the Restructuring Support Agreement is to obtain confirmation of a plan that transfers the value of the unencumbered assets of TerreStar License, Inc. for the benefit of the Senior Secured Noteholders. "There is no legal justification for that result, and the Assumption Motion should be denied for that reason alone," Mr. Moser asserts. Mr. Moser further argues that the RSA Assumption Motion treats the Debtors as if they have been substantively consolidated and fails to show that the proposed plan is in the best interest of each Debtor entity. The "fiduciary out" provisions are completely illusory given the deadlines imposed for confirmation of the Debtors' proposed Chapter 11 Plan of Reorganization, he says. Solus Alternative, Remus Holdings, and Harbinger Capital argue that consummation of the Restructuring Support Agreement is not only tantamount to a breach of the Debtors' fiduciary duties to other stakeholders, but that it also lacks any sound business justification. Representing Solus Alternative and Remus Holdings, Susheel Kirpalani, Esq., at Quinn Emanuel Urquhart & Sullivan LLP, in New York, contends that EchoStar's efforts to commandeer the Debtors' Chapter 11 cases for parochial purposes must be stopped in order to realize on a primary and egalitarian objective of Chapter 11, which is to maximize value for all stakeholders. In addition to needlessly constraining the Debtors' options, the Restructuring Support Agreement improperly misappropriates value to EchoStar and its fellow 15% Noteholders because it transfers value to the 15% Noteholders based on the erroneous assumption that the 15% Noteholders hold a valid, perfected security interest in certain assets, Mr. Kirpalani argues on behalf of Solus Alternative and Remus Holdings. Counsel to Harbinger Capital, Debra A. Dandeneau, Esq., at Weil Gotshal & Manges LLP, in New York, notes that the Debtors are asking the Court, in the very early stages of the Chapter 11 cases, to take the unprecedented, destructive, and wholly unnecessary step of tying the hands of the Debtors, the Court, and all parties-in-interest to a particular restructuring proposal that was forced upon the Debtors on the eve of their bankruptcy filing by EchoStar. Counsel to Marathon, Philip D. Anker, Esq., at Wilmer Cutler Pickering Hale and Dorr LLP, in New York, argues that the RSA and the DIP Facility are integral, intertwined parts of EchoStar's control strategy in the Debtors' Chapter 11 cases. He asserts that EchoStar recognizes the potential for enormous value in the Debtors' assets, and it is therefore trying at this very early stage in the Chapter 11 cases to gain irrevocable control over where the Chapter 11 cases are headed. If the RSA is assumed and the DIP Facility is approved in its proposed form, it will be much harder for any entity other than EchoStar to seek to buy the Debtors' assets or propose any restructuring alternative to the Plan, Mr. Anker points out on behalf of Marathon. The RSA and DIP Facility, working together, predetermine the process and outcome for the Plan -- to the detriment of the Debtors' estates and their stakeholders, Mr. Anker says. "While the Debtor has every right to propose the Plan, that Plan should be evaluated on its terms and in accordance with the normal bankruptcy process," Marathon asserts. About TerreStar Networks Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR) -- http://www.terrestar.com/-- is in the mobile communications business through its ownership of TerreStar Networks, its principal operating subsidiary, and TerreStar Global. TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, majority-owned subsidiaries of Trio 1 and 2 General Partnerships, plans to launch an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. This system build out will be based on an integrated satellite and ground- based technology intended to provide communication service in most hard-to-reach areas and will provide a nationwide interoperable, survivable and critical communications infrastructure. The Company intends to provide multiple communications applications, including voice, data and video services. As of June 30, 2010, the Company had four wholly owned subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar Holdings Inc., and TerreStar New York Inc. Motient Ventures Holding Inc., a wholly owned subsidiary of MVH Holdings Inc., directly holds approximately 89.3% and 86.5% interest in TerreStar Networks and TerreStar Global, respectively. TerreStar Networks Inc. and Its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No. 10-15446). The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not among the Chapter 11 filers. The Garden City Group, Inc. will act as claims and noticing agent in the chapter 11 cases. Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq. at Fraser Milner Casgrain LLP and Ira Dizengoff, Esq. , Arik Preis, Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP , serve as bankruptcy counsel to the Debtors. Blackstone Advisory Partners LP is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TERRESTAR NETWORKS: Resolves 7 Cases' Dismissal Motion ------------------------------------------------------ TerreStar Networks, Inc. and its debtor affiliates; EchoStar Corporation; Solus Alternative Asset Management LP; Millennium International Management LP; Harbinger Capital Partners LLC; and Highland Capital Management L.P. seek entry into a stipulation in an attempt to resolve a Motion to Dismiss the Chapter 11 cases of seven affiliates of TerreStar, known as the Non-TSN Debtors. The Non-TSN Debtors refer to Motient Holdings, Inc.; MVH Holdings, Inc.; TerreStar New York, Inc.; Motient Communications, Inc.; Motient Services, Inc.; Motient Ventures Holding, Inc.; and Motient License Inc. The Case Dismissal Motion was filed by Solus and Millennium International, known holders of TerreStar's Series B Cumulative Convertible Preferred Stock. Harbinger and Highland Capital are also holders of TerreStar Series B Preferred Stock. The Parties specifically stipulate on these terms: (a) TerreStar Corporation and the Non-TSN Debtors will remain parties to the Plan Support Agreement entered into by the Debtors, TSC, TerreStar Holdings Inc., and EchoStar. (b) The PSA will be deemed amended according to these guidelines: (i) the assets, property, and stock of the Non-TSN Debtors and any direct or indirect subsidiary of TSC -- other than (1) TSN or any of TSN's direct or indirect subsidiaries, or (2) any assets that the Non-TSN Debtors have in the TSN Debtors, including, without limitation, the common stock of TSN held by Motient Ventures Holding Inc. -- will not be restructured or distributed pursuant to the Plan; (ii) TSC, TS Holdings, and the Non-TSN Debtors will not be liable for any monetary damages for any alleged breach of the PSA, and the only remedy that will be available to the other parties for any breach will be specific performance; and (iii) TSC, TS Holdings, and the Non-TSN Debtors will not be required to vote any claims or interests they have against TSN or any subsidiary of TSN in favor of or against the Plan. The TSN Debtors refer to TSN, TerreStar National Services, Inc., TerreStar License, Inc., 0887729 B.C. Ltd., TerreStar Networks Holdings (Canada) Inc. and TerreStar Networks (Canada) Inc. (c) None of the Non-TSN Debtors will be party to any plan of reorganization that restructures or reorganizes the TSN Debtors, unless either (i) the Preferred Stockholders holding a majority of each of the aggregate number of shares then outstanding of TSC's Series A Cumulative Convertible Preferred Stock and the aggregate number of shares then outstanding of TSC's Series B Cumulative Convertible Preferred Stock held by the Preferred Stockholders consent, which consent will not be unreasonably withheld or delayed, or (ii) a Non-TSN Debtor determines in good faith that its fiduciary duties require it to be party to a plan; (d) The Debtor-In-Possession Credit, Security & Guaranty Agreement, by and among the Debtors, EchoStar and any lender parties thereto, and The Bank of New York Mellon, will be amended to provide that, upon repayment to Echostar, in full and in cash of all principal and accrued interest, of any funds owed by the Non-TSN Debtors under the DIP Credit Agreement, the Non-TSN Debtors will be removed as Loan Parties from the DIP Credit Agreement without penalty or requirement to provide guaranties; provided that any funding needs required by the Non-TSN Debtors will be provided through a loan to be made available to TSC and the Non-TSN Debtors upon the date of the Non-TSN Debtors' Funds Repayment by certain of the Preferred Stockholders, subject to the TSC Loan documentation being in form and substance reasonably satisfactory to TSC, the Non-TSN Debtors, and the subject lenders. For the avoidance of doubt, the Non-TSN Debtors will not be removed as Loan Parties and guarantors under the DIP Credit Agreement unless and until the Non-TSN Debtors' Funds Repayment occurs. Accordingly, the Debtors and EchoStar agree (i) not to advance, or allow to be advanced, more than $15,000 in the aggregate to the Non-TSN Debtors under the DIP Credit Agreement, and (ii) not to amend the DIP Credit Agreement at any time after the Funds Repayment to provide that the Debtors will be added as Loan Parties to the DIP Credit Agreement. (e) From and after the closing date of the TSC Loan until the earliest of (i) 75 days after the TSC Closing Date, (ii) the time either TSC or TS Holdings enters into an agreement regarding postpetition financing for one or both of TSC and TS Holdings, or (iii) the date TSC or TS Holdings files a petition under the Bankruptcy Code or commences any similar insolvency proceeding, provided no event of default under the TSC Loan will have occurred, each of the Preferred Stockholders will forbear from exercising rights and remedies under the certificates of designations with respect to the Preferred Stock, including the right to appoint or elect board members. During the forbearance period, the Certificates of Designations, and the protections therein in favor of the Preferred Stockholders, will remain in effect. (f) The Preferred Stockholders, solely in their capacity as preferred stockholders, agree not to object to the relief asked in the DIP Motion or the PSA Motion. (g) Solus and Millennium International will hold their Motion to Dismiss in abeyance as of November 8, 2010. Solus and Millennium also agree to withdraw the Motion to Dismiss without prejudice upon the Bankruptcy Court's approval of the parties' Stipulation. Each of the other Preferred Stockholders agrees that, absent any Non-TSN Debtor becoming party to any plan of reorganization that restructures or reorganizes any or all of the TSN Debtors without first having obtained the consent of the Preferred Stockholders, it will not bring an action or file a motion seeking any of the relief requested in the Motion to Dismiss. (h) In the event TSC or TS Holdings becomes a debtor in a Chapter 11 case and moves to assume the PSA, each of the Preferred Stockholders agrees not to object to that motion. (i) The Debtors acknowledge and Echostar agrees not to object, that TSC's intercompany loan to TSN, evidenced by certain notes dated June 8, 2009; July 6, 2009; August 4, 2009; August 26, 2009; and September 21, 2009; with a face amount totaling $50 million (plus interest) is an allowed, undisputed, and non-contingent claim in TSN's Chapter 11 cases. The Debtors further agree that the TSC IC Loan will be listed on TSN's schedule of assets and liabilities as such, without prejudice to the rights of other parties in interest. The Debtors and TSC agree not to amend or modify any of the terms of the TSC IC Loan unless each of a majority of the aggregate number of shares then outstanding of TSC's Series A Cumulative Convertible Preferred Stock and a majority of the aggregate number of shares then outstanding of TSC's Series B Cumulative Convertible Preferred Stock held by the Preferred Stockholders consent, which consent will not be unreasonably withheld or delayed. The Stipulation is scheduled to be heard by Judge Lane on Nov 16, 2010, if an objection is timely filed by Nov. 12. If no objections are filed, the Stipulation will be presented to the Court on Nov. 15. About TerreStar Networks Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR) -- http://www.terrestar.com/-- is in the mobile communications business through its ownership of TerreStar Networks, its principal operating subsidiary, and TerreStar Global. TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, majority-owned subsidiaries of Trio 1 and 2 General Partnerships, plans to launch an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. This system build out will be based on an integrated satellite and ground- based technology intended to provide communication service in most hard-to-reach areas and will provide a nationwide interoperable, survivable and critical communications infrastructure. The Company intends to provide multiple communications applications, including voice, data and video services. As of June 30, 2010, the Company had four wholly owned subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar Holdings Inc., and TerreStar New York Inc. Motient Ventures Holding Inc., a wholly owned subsidiary of MVH Holdings Inc., directly holds approximately 89.3% and 86.5% interest in TerreStar Networks and TerreStar Global, respectively. TerreStar Networks Inc. and Its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No. 10-15446). The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not among the Chapter 11 filers. The Garden City Group, Inc. will act as claims and noticing agent in the chapter 11 cases. Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq. at Fraser Milner Casgrain LLP and Ira Dizengoff, Esq. , Arik Preis, Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP , serve as bankruptcy counsel to the Debtors. Blackstone Advisory Partners LP is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TERRESTAR NETWORKS: Files Schedules of Assets and Liabilities ------------------------------------------------------------- A. Real Property $0 B. Personal Property B.1 Cash on hand 0 B.2 Bank Accounts Sun Trust Bank Demand deposit 1,034,160 Investment 1,362,563 Certificate of deposits 237,228 B.3 Security Deposits 0 BCI Northwood Flex LC 4,957 Florida Power & Light Company 195 Forum Financial Services 13,710 B.4 Household Goods 0 B.5 Books and other collectibles 0 B.6 Wearing apparel 0 B.7 Furs & Jewelry 0 B.8 Firearms 0 B.9 Insurance Unknown See http://bankrupt.com/misc/TSNSkdB9.pdf B.10 Annuities 0 B.11 Education 0 B.12 IRA, ERISA, and other pension 0 B.13 Stock and Interests TerreStar National Services, Inc. Unknown -- 100% of Common Stock Ownership 0887729 B.C. Ltd. Unknown -- 100% of Common Stock Ownership TerreStar License, Inc. Unknown -- 100% of Common Stock Ownership TerreStar Networks Holdings (Canada) Inc. Unknown -- 33.33% of Common Stock Ownership TerreStar Networks (Canada), Inc. Unknown -- 20% of Common Stock Ownership TerreStar Solutions, Inc. Unknown -- 46.7% of Common Stock Ownership B.14 Partnerships & joint ventures 0 B.15 Bonds 0 B.16 Accounts Receivable Intercompany Receivable TerreStar Networks (Canada) Inc. 7,817,053 TerreStar Networks (Canada) Inc. 43,497 TerreStar National Services, Inc. 804,867 TerreStar Corporation 214,215 TerreStar Global Ltd. 51,475 B.17 Alimony 0 B.18 Other Liquidated Debts 0 B.19 Future Interests 0 B.20 Death Benefit Plan 0 B.21 Other Contingent Claims B.22 Patents Unknown See http://bankrupt.com/misc/TSNSkdB22.pdf B.23 Licenses Unknown See http://bankrupt.com/misc/TSNSkdB23.pdf B.24 Customer Lists 0 B.25 Automobiles 0 B.26 Boats 0 B.27 Aircrafts 0 B.28 Office Equipment 709,111 See http://bankrupt.com/misc/TSNSkdB28.pdf B.29 Machinery 443,259,858 See http://bankrupt.com/misc/TSNSkdB29.pdf B.30 Inventory Hardware 2,573,345 Hardware (Demo Sets) 4,250 Accessory 516,319 Accessory (Demo Sets) 785 B.31 Animals 0 B.32 Crops 0 B.33 Farming 0 B.34 Farm Supplies 0 B.35 Other Personal Property Prepaid Expenses Financing Fees 2,032,173 Inventory 2,754,000 Insurance 2,380,130 Rent 203,508 Site Rent 37,160 Maintenance 1,281,947 Software 17,524 Financing Fees 4,826,411 Employee Travel Advances 9,850 Miscellaneous 214,141 Leasehold Improvements 1,439,778 TOTAL SCHEDULED ASSETS $473,844,219 ======================================================= C. Property Claimed as Exempt Not applicable D. Secured Claims Data Sales Co., Inc. Unknown Forum Financial Services, Inc. Unknown IBM Credit LLC Unknown U.S. Bank National Association Purchase money credit facility $85,995,122 Senior secured notes 944,354,969 E. Unsecured Priority Claims Unknown See http://bankrupt.com/misc/TSNSkdE.pdf F. Unsecured Non-priority Claims Deutsche Bank National Trust 178,715,631 TerreStar Corporation 56,875,342 Space Systems/Loral 35,647,804 Elektrobit, Inc. 25,847,904 Others 16,011,039 See http://bankrupt.com/misc/TSNSkdF.pdf TOTAL SCHEDULED LIABILITIES $1,343,447,811 ======================================================= About TerreStar Networks Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR) -- http://www.terrestar.com/-- is in the mobile communications business through its ownership of TerreStar Networks, its principal operating subsidiary, and TerreStar Global. TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, majority-owned subsidiaries of Trio 1 and 2 General Partnerships, plans to launch an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. This system build out will be based on an integrated satellite and ground- based technology intended to provide communication service in most hard-to-reach areas and will provide a nationwide interoperable, survivable and critical communications infrastructure. The Company intends to provide multiple communications applications, including voice, data and video services. As of June 30, 2010, the Company had four wholly owned subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar Holdings Inc., and TerreStar New York Inc. Motient Ventures Holding Inc., a wholly owned subsidiary of MVH Holdings Inc., directly holds approximately 89.3% and 86.5% interest in TerreStar Networks and TerreStar Global, respectively. TerreStar Networks Inc. and Its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No. 10-15446). The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not among the Chapter 11 filers. The Garden City Group, Inc. will act as claims and noticing agent in the chapter 11 cases. Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq. at Fraser Milner Casgrain LLP and Ira Dizengoff, Esq. , Arik Preis, Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP , serve as bankruptcy counsel to the Debtors. Blackstone Advisory Partners LP is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TERRESTAR NETWORKS: Files Statement of Financial Affairs -------------------------------------------------------- Vincent Loiacono, chief financial officer of TerreStar Networks, Inc., disclosed that the company incurred losses from the operation of its business during the two years immediately preceding the Petition Date: Period Source Amount ------ ------ -------------- YTD 09/30/10 Loss from Operation ($174,877,804) FYE 12/31/09 Loss from Operation ($164,334,814) FYE 12/31/08 Loss from Operation ($213,250,321) TSN also earned income or incurred expenses other than from the operation of its business during the two years immediately preceding the Petition Date: Period Source Amount ------ ------ -------------- YTD 09/30/10 Other income (expense) ($123,774) YTD 09/30/10 Interest income $915,933 FYE 12/31/09 Other income $275,644 FYE 12/31/09 Interest income $813,953 FYE 12/31/08 Other income $202,631 FYE 12/31/08 Interest income $3,279,576 Mr. Loiacono reported within 90 days immediately before the Petition Date, TSN made payments to creditors, a list of which can be accessed for free at http://bankrupt.com/misc/TSNSkd3b.pdf Moreover, within one year immediately before the Petition Date, TSN made payments to creditors who are insiders, a list of which is available for free at http://bankrupt.com/misc/TSNInsiders.pdf TSN is a party to two lawsuits currently pending in the United States District Court for the Eastern District of Virginia. The Lawsuits are: -- a commercial litigation filed by Spring Nextel Corporation vs. TerreStar Networks and New ICO Satellite Services G.P.; and -- a threatened IP Infringement Claim filed by Jae-Youn Kim. Within one year before the Petition Date, TSN paid professionals who helped in preparing the company in filing for bankruptcy protection. The Professionals are: -- Akin Gump Strauss Hauer & Feld LLP, -- Bennet Jones, -- Blackstone Advisory Partners LP, -- Deloitte & Touche LLP, -- Fraser Milner Casgrain LLP, -- Stikeman Elliott LLP, and -- The Garden City Group, Inc. A list of the amounts paid to each Professional is available for free at http://bankrupt.com/misc/TSNProFees.pdf Within two years immediately before the Petition Date, the Company transferred these properties: Date of Property Transfer Transferee -------- -------- ---------- Exclusivity Agreement/ 01/26/10 Harbinger Capital Partners Prepayment Agreement Fund I, Ltd.; Harbinger Capital Partners Special Situation Fund; HGW Holding Company LP Satellite Minutes 05/06/10 LightSquared LP f/k/a Agreement Sky Terra Communications, Inc. Purchase Money Credit 02/05/10 US Bank National Agreement Association as collateral agent TSN's books and records are kept by: Name Dates Services Rendered ---- ----------------------- Premsigh Giridharsuryakala 06/01/09 - present Controller Vincent Loiacono 10/31/08 - present Chief Financial Officer TSN's books and records for the year ended 2009 were audited by Ernst & Young. For the year ended 2008, the Company's books and records were audited by Friedman LLP. TSN officers, directors, and stockholders who directly or indirectly own 5% percent or more of the voting or equity securities of the corporation are: Name Title Percentage ---- ----- ---------- Alexandra M. Field Senior Vice President & -- Deputy General Counsel Law and Public Policy David Andonian Director -- David Meltzer Director -- Dennis W. Matheson Chief Technology Officer & -- Executive Vice President Corporate Planning Douglas Brandon General Counsel & Secretary -- Eugene Davis Director -- Jacques Leduc Director -- Jeffrey Epstein President and Chief -- Executive Officer Jeffrey Stern Senior Vice President -- Government Solutions Leonard Dale Weaver Senior Vice President -- Operations Motient Ventures -- Stockholder Holding Inc. 81.9% of Common Stock Ownership MSV Investors LLC -- Stockholder 10.3% of Common Stock Ownership TerreStar Corporation -- Stockholder 7.4% of Common Stock Ownership Vincent Loiacono Chief Financial Officer -- William M. Freeman Chairman of the Board of -- Directors William Sparks Senior Vice President -- Human Resources & Administration TSN terminated two of its directors, David Raynor and Dean A. Olmstead, on December 31, 2009. One year before the Petition Date, TSN distributed amounts aggregating more than $3,000,000 to insiders. A list of the insiders and the amounts given to each insider is available for free at http://bankrupt.com/misc/TSNInsidersPay.pdf TSN's taxes are paid together with its parent, TerreStar Corporation, under taxpayer identification number 93-0976 127. For six years, TSN has been responsible for contributing under a 401(k) Plan under TIN 32-0003931. About TerreStar Networks Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR) -- http://www.terrestar.com/-- is in the mobile communications business through its ownership of TerreStar Networks, its principal operating subsidiary, and TerreStar Global. TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, majority-owned subsidiaries of Trio 1 and 2 General Partnerships, plans to launch an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. This system build out will be based on an integrated satellite and ground- based technology intended to provide communication service in most hard-to-reach areas and will provide a nationwide interoperable, survivable and critical communications infrastructure. The Company intends to provide multiple communications applications, including voice, data and video services. As of June 30, 2010, the Company had four wholly owned subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar Holdings Inc., and TerreStar New York Inc. Motient Ventures Holding Inc., a wholly owned subsidiary of MVH Holdings Inc., directly holds approximately 89.3% and 86.5% interest in TerreStar Networks and TerreStar Global, respectively. TerreStar Networks Inc. and Its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No. 10-15446). The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not among the Chapter 11 filers. The Garden City Group, Inc. will act as claims and noticing agent in the chapter 11 cases. Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq. at Fraser Milner Casgrain LLP and Ira Dizengoff, Esq. , Arik Preis, Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP , serve as bankruptcy counsel to the Debtors. Blackstone Advisory Partners LP is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TETRAGENEX PHARMACEUTICALS: Confirmation Hearing on Jan. 5 ---------------------------------------------------------- Tetragenex Pharmaceuticals, Inc., fka Innapharma, Inc., sought chapter 11 protection (Bankr. E.D.N.Y. Case No. 10-78439) on Oct. 26, 2010, and filed its Prepackaged Plan of Reorganization of Tetragenex Pharmaceuticals, Inc., dated Aug. 10, 2010, and its Disclosure Statement for the Prepackaged Plan of Reorganization of Tetragenex Pharmaceuticals, Inc., dated Aug. 10, 2010, that same day. Copies of the Plan and Disclosure Statement may be obtained upon written request of the Debtor's counsel by contacting: Paul Rachmuth, Esq. GERSTEN SAVAGE, LLP 600 Lexington Avenue New York, NY 10022 E-mail: prachmuth@gerstensavage.com Prior to the Petition Date, each class of creditor and interest holder entitled to vote on the Plan voted to accept the Plan. On November 4, 2010, the Bankruptcy Court entered an Amended Order (A) Scheduling a Combined Hearing on the Adequacy of the Disclosure Statement; Confirmation of the Plan and Setting the Objection Deadline for the Disclosure Statement and Plan; (B) Approving the Form and Notice of the Combined Hearing on Adequacy of the Disclosure Statement and Confirmation of the Plan; (C) Establishing Procedures for Objecting to the Disclosure Statement and Plan; (D) Approving the Prepetition Solicitation Procedures; and (E) Granting Related Relief, scheduling a combined hearing on the adequacy of the Debtors' prepetition solicitation procedures, the adequacy of the Disclosure Statement and to consider confirmation of the Plan. The Bankruptcy Court has not approved the Disclosure Statement as having adequate information within the meaning of Sec. 1125 (a) of the Bankruptcy Code, and has not confirmed the Plan pursuant to Sec. 1129 of the Bankruptcy Code. The Combined Hearing will be held on Jan. 5, 2010 at 2:00 p.m. (Eastern Time) before the Honorable Robert Grossman, United States Bankruptcy Judge, in Courtroom 860 of the United States Bankruptcy Court for the Eastern District of New York, Alfonse M. D'Amato U.S. Courthouse, 290 Federal Plaza, Central Islip 11722. The Combined Hearing may be adjourned from time to time without further notice other than an announcement of the adjourned date or dates in open court or at the Combined Hearing and will be available on the electronic case filing docket. Any objections to the Solicitation Procedures, the Disclosure Statement or confirmation of the Plan must be filed with the Clerk of the Court together with proof of service thereof, and served so as to be actually received by no later than Dec. 20, 2010 at 4:00 p.m. TETRAGENEX PHARMACEUTICALS: Proofs of Claim Due by Dec. 13 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York has entered an Order establishing Dec. 13, 2010, as the last date for each person or entity (including individuals, partnerships, corporations, joint ventures and trusts, and with the exception of Governmental Units) to file a Proof of Claim against Tetragenex Pharmaceuticals, Inc. Tetragenex Pharmaceuticals, Inc., fka Innapharma, Inc., sought Chapter 11 protection (Bankr. E.D.N.Y. Case No. 10-78439) on Oct. 26, 2010, and filed its Prepackaged Plan of Reorganization of Tetragenex Pharmaceuticals, Inc., dated Aug. 10, 2010, and its Disclosure Statement for the Prepackaged Plan of Reorganization of Tetragenex Pharmaceuticals, Inc., dated Aug. 10, 2010, that same day. The Debtor is represented by Paul Rachmuth, Esq., at Gersten Savage, LLP. TIMOTHY WRIGHT: Has Access to Lenders' Cash Until February 1 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Arizona extended the interim access of Timothy Ray Wright to rents securing debts to certain designated creditors. The Debtor would use the cash collateral to operate is business until February 1, 2011. As reported in the Troubled Company Reporter on January 14, 2010, numerous secured creditors claim liens on the Debtor's assets totaling $40,000,000, with a fair market value estimated at $35,000,000. The secured creditors claim the rental revenue generated by the Debtor's postpetition rental activities. As adequate protection for any diminution in value of the secured creditors' collateral, the Debtor added that the secured creditors will be adequately protected by: 1. the Debtor's and the Companies' continuation and preservation of the on-going concern value of the business. 2. the equity cushion in many of the Debtor's real properties and the absence of any blanket liens. 3. the replacement lien in the Debtor's postpetition rents on the same assets and in the same order of priority as currently exists between the DIP and each secured creditor. About Timothy Ray Wright Phoenix, Arizona-based Timothy Ray Wright -- dba Timothy R. Wright and Timothy Wright -- filed for Chapter 11 bankruptcy protection on December 14, 2009 (Bankr. D. Ariz. Case No. 09-32244). Howard C. Meyers, Esq., at Burch & Cracchiolo, P.A., represents the Debtor. The Company estimated assets and debts at $10 million to $50 million. TOBACCO ROSE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Tobacco Rose Farm Construction & Development Services, LLC 681 Blue Sky Parkway Lexington, KY 40509 Bankruptcy Case No.: 10-53628 Chapter 11 Petition Date: November 12, 2010 Court: United States Bankruptcy Court Eastern District of Kentucky (Lexington) Debtor's Counsel: Jamie L. Harris, Esq. DELCOTTO LAW GROUP PLLC 200 North Upper Street Lexington, KY 40507 Tel: (859) 231-5800 E-mail: jharris@dlgfirm.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/kyeb10-53628.pdf The petition was signed by Sheila H. Baker, president. TRIBUNE CO: Wins Nod of 2010 Management Incentive Plan ------------------------------------------------------ Judge Kevin Carey authorized Tribune Co. and its units to implement their 2010 management incentive plan to approximately 640 management mployees except with respect to Chandler Bigelow, Daniel G. Kazan, Harry Amsden, Robert Gremillion, and David D. Williams. The Debtors' 2010 MIP has an aggregate payout opportunity of approximately: (a) $16.5 million, representing a 50%-of-target payout to all 2010 MIP Participants, if the Company achieves "threshold" performance equal to $500 million of 2010 consolidated operating cash flow; (b) $33.0 million, representing a 100%-of-target payout to all MIP Participants, if the Company achieves "target" performance for 2010 equal to $550 million of consolidated OCF; and (c) $42.9 million, representing a 130%-of-target payout to all 2010 MIP Participants, if the Company achieves "maximum" performance for 2010 of $685 million of consolidated OCF. The Court's order is without prejudice to the Debtors' right to seek approval of the 2010 MIP Motion as to those Deferred Participants at a future time, or to the right of any party to raise objections to any motion. Prior to the hearing on the Motion, the Official Committee of Unsecured Creditors told the Court it is premature to reward the five Deferred Participants because they are: (a) implicated in the report of Kenneth N. Klee, as Examiner, dated July 26, 2010 as possibly having been involved in wrongdoing or having acted inconsistently with their fiduciary obligations in connection with the 2007 leveraged buy-out of Tribune Company; and (b) named as defendants in the adversary proceeding brought by it against third parties on behalf of the Tribune estates. In consideration of the Committee's objection, the Debtors delivered to the Court a revised form of order with respect to their proposed 2010 Management Incentive Plan. The revised form of order added a "clawback" provision requiring the repayment of the 2010 MIP award received by any 2010 MIP participant who is found by the Court or any other court of competent jurisdiction, in a final non-appealable order or judgment, to have breached his or her fiduciary duty or committed an intentional tortuous wrong as part of Tribune Company's leveraged buy-out transaction in 2007. The Debtors also supplemented their witness and exhibit information as set forth in the Joint Pretrial Memorandum regarding the motion for an order authorizing the Debtors to implement a Management Incentive Plan for 2010. At the hearing on the 2010 MIP Motion, the Debtors called Eddy Hartenstein, co-president of Tribune Company/Publisher & CEO of The Los Angeles Times, as a fact witness in their direct case. Principal areas of Mr. Hartenstein's testimony included a description of the Debtors' business and the 2010 MIP; the facts and circumstances justifying the 2010 MIP; and the Debtors' historical compensation practices. The testimony of John Dempsey, partner at Mercer (U.S.), Inc., included a description of the 2010 MIP, including initial and revised performance goals, award opportunities and compensation. The Debtors' remaining witnesses and any rebuttal witnesses are set forth in the Joint Pre-trial Memorandum. The Debtors revised their list of exhibits that they presently intend to offer into evidence in their direct case at the hearing on the 2010 MIP Motion: (a) Tribune Company Incentive Compensation Plan (Restated as of 2004); (b) Comparison of Pay-for-Performance Structure of 2010 MIP to prior years; (c) July 23, 2010 Supplemental Mercer Report re: 2010 MIP; (d) May 26, 2010 Mercer Report re: 2010 MIP; (e) October 26, 2010 Mercer Report re: Executive Compensation; (f) Chart Comparing Initial and Revised 2010 MIP Metrics and Payouts; (g) 2010 MIP Comparison Statistics vs. Prior Years; (h) Tribune 2010 Projections (incl. 2010 Plan); (i) Dow Jones Industrial Average Graph; and (j) Publishing Group Performance Charts. In a separate order, Judge Carey authorized the Debtors to file under seal the unredacted May 2010 Mercer Report and unredacted July 2010 Mercer Report. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Proposes Davis Wright as Special Counsel ---------------------------------------------------- Tribune Co. and its units seek the Bankruptcy Court's authority to employ Davis Wright Tremaine LLP as special counsel to Los Angeles Times Communications LLC for certain media litigation matters nunc pro tunc to October 1, 2010. The Debtors filed the Application for the limited purpose of converting Davis Wright's existing retention by LA Times under the Court's Ordinary Course Professional Order into a retention pursuant to Sections 327(e) and 1107 of the Bankruptcy Code. The Debtors tell the Court that Davis Wright has exceeded the applicable monthly cap on its services under the OCP Order for multiple consecutive months, and they expect that Davis Wright may continue to exceed that monthly cap on a regular basis in the future. The Debtors relate that Davis Wright has represented LA Times with respect to various Media Litigation Matters that have arisen or have resulted in unanticipated legal costs subsequent to the Petition Date. These, according to the Debtors, have included: -- a lawsuit under the California Public Records Act against the Los Angeles County Sheriff, in which LA Times initially was successful, but subsequently was challenged by the officer's union, resulting in substantial unanticipated fees and costs; -- a lawsuit involving disclosure of the identities of Pasadena police officers who exercised lethal force, in which the union's counsel initiated lengthy discovery fights; and -- researching and advising LA Times concerning legal issues about a possible new business initiative. The Debtors maintain that those representations of the LA Times by Davis Wright, taken together with Davis Wright's representations of the LA Times in connection with the pre-existing Media Litigation Matters, caused Davis Wright's fees to exceed the Monthly Cap of $50,000 in each of the months from March to June 2010, inclusive. Moreover, the Debtors note, the Media Litigation Matters on which Davis Wright now represents the LA Times are now at a level of activity that makes it likely that Davis Wright will exceed the existing Monthly Cap on a regular basis going forward. The Debtors will pay Davis Wright in accordance with its ordinary and customary rates: Professional Rate/Hour ------------ --------- Partners $390-$675 Associates $240-$400 Para-professionals $69-$180 The Debtors agree to reimburse Davis Wright for its out-of-pocket expenses and internal charges incurred in the rendition of services, including mail and express mail charges, special and hand delivery charges and photocopying charges. Kelli L. Sager, Esq., at Davis Wright Tremaine LLP, assures the Court that her firm does not represent or hold any adverse interest with respect to the matters on which it is to be employed. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: McDermott Will Charges $716,000 in Fees for June-Aug. ----------------------------------------------------------------- Pursuant to Sections 330 and 331 of the Bankruptcy Code, professionals of Tribune Co. and the Official Committee of Unsecured Creditors filed with the Court applications for fees and reimbursement of expenses: A. Debtors Professional Period Fees Expenses ------------ ------ ---- -------- McDermott Will & Emery 06/01/10- LLP 08/31/10 $716,188 $4,885 Cole, Schotz, Meisel, 06/01/10- Forman & Leonard, P.A. 08/31/10 426,313 17,087 Dow Lohnes PLLC 09/01/10- 09/30/10 96,508 509 Stuart Maue 04/01/10- 05/31/10 14,115 52 Stuart Maue 06/01/10- 08/31/10 32,172 224 Stuart Maue 09/01/10- 09/30/10 125,257 442 Jones Day 08/22/10 09/30/10 555,956 3,139 Davis Wright Tremaine 03/01/10- LLP 06/30/10 274,726 15,077 Stuart Maue, as the Fee Examiner, withdrew its Fee Applications for the period from April 1 to May 31, 2010 and June 1 to August 31, 2010. According to Stuart Maue, these Applications should have been filed under a different matter. Davis Wright serves as First Amendment, Internet, and communications counsel for Los Angeles Times Communications LLC. McDermott Will and Dow Lohnes serve as the Debtors' special counsels. Cole Schotz acts as the Debtors' co-counsel. In a separate filing, the Debtors certified to the Court that no objection was filed as to the monthly fee application of Seyfarth Shaw LLP for the period from August 1 to August 31, 2010. B. Official Committee of Unsecured Creditors Professional Period Fees Expenses ------------ ------ ---- -------- AlixPartners, LLP 09/01/10- 09/30/10 $211,663 $23 Moelis & Company LLC 09/01/10- 09/30/10 200,000 2,065 AlixPartners serves as the Committee's financial advisor while Moelis & Company serves as the Committee's investment banker. In a separate filing, the Committee certified to the Court that no objection was filed as to Moelis & Company's fee application for the period from August 1 to August 31, 2010. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TWIN CITY: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Twin City Lofts, LLC 158 North 4th St. Brooklyn, NY 11211 Bankruptcy Case No.: 10-50625 Chapter 11 Petition Date: November 11, 2010 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Joel B. Rosenthal Debtor's Counsel: David Carlebach, Esq. LAW OFFICES OF DAVID CARLEBACH 40 Exchange Place, Suite 1306 New York, NY 10005 Tel: (212) 785-3041 Fax: (212) 785-3618 E-mail: david@carlebachlaw.com Scheduled Assets: $10,000,000 Scheduled Debts: $4,724,562 A list of the Company's four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nyeb10-50625.pdf The petition was signed by Yehuda Backer, managing member. VM ASC: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------- Debtor: VM ASC Partnership 210 E. Plank Road Altoona, PA 16602 Bankruptcy Case No.: 10-71330 Chapter 11 Petition Date: November 12, 2010 Court: U.S. Bankruptcy Court Western District of Pennsylvania (Johnstown) Debtor's Counsel: Robert O. Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 E-mail: rol@lampllaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Gregory S. Morris, partner. Debtor-affiliates that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- 200 East Plank Road, L.P. 10-70679 06/09/10 Altoona Pizza One, Inc. 10-70680 06/09/10 Altoona VVB, LP 10-70678 06/09/10 Bedford PCH, L.P. 10-71136 09/24/10 Clearfield PCH, L.P. 10-71137 09/24/10 Gregory S. Morris 10-70574 05/16/10 Hampton Inn Altoona Pennsylvania, LP 10-70676 06/09/10 MMFRE Limited Partnership 10-70685 06/10/10 MMH, L.P. 10-71138 09/24/10 Morris Management Harrisburg, LP 10-70687 06/10/10 Morris Management Real Estate, LP 10-70677 06/09/10 Phase Two 17th Street Logan Township, 10-71139 09/24/10 L.P. Tyrone PCH, LP d/b/a Tyrone Colonial 10-70681 06/09/10 Courtyard VenMor Partnership 10-71140 09/24/10 Venmor Tipton Partnership 10-70686 06/10/10 Debtor's List of two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Harleysville Mutual Insurance Trade Debt $6,554 355 Maple Avenue Harleysville, PA 19438 D&M Maintenance Trade Debt $2,100 450 Windmere Drive, Suite 200 State College, PA 16801 W&T OFFSHORE: Moody's Gives Stable Outlook; Affirms 'B3' Rating --------------------------------------------------------------- Moody's Investors Service changed the outlook for W&T Offshore Inc. to Stable from Negative, changed the Speculative Grade Liquidity rating to SGL-2 from SGL-3, affirmed the B3 Corporate Family Rating and Probability of Default Rating, and affirmed the Caa1 senior unsecured notes rating. Ratings Rationale The change to a stable outlook reflects favorable reserve replacement performance to date in 2010 from two acquisitions, a corresponding anticipated stabilization in the company's leverage and production trends, and an improved liquidity profile. In May of 2010 W&T announced an acquisition of Gulf of Mexico oil and gas properties from Total E&P USA, Inc. in which it acquired 11.6 million barrels of oil equivalent of proven reserves for a price of approximately $13.47/boe including asset retirement obligations. In November 2010 W&T announced an acquisition of GOM oil and gas properties from Shell Offshore Inc. in which it acquired 25.7mmboe of proven reserves, 97% of which is proven developed producing for a price of approximately $19.44/boe including asset retirement obligations. Moody's views these as favorable reserve replacement costs given the proportion of liquids versus gas production acquired, particularly in comparison to the negative performance trends in 2008 and 2009. The combined acquisitions were financed with a mix of cash and revolver borrowings which keeps leverage on production and proven reserves roughly at pre-acquisition levels. Moody's views these acquisitions as a significant step toward halting the pre-2010 decline in reserve replacement performance. W&T's B3 CFR reflects the company's relatively small scale and concentration in the offshore GOM, its diversification within the GOM, and the high decline rates, capital intensity, and operational challenges inherent in the GOM including risks of hurricane damage to drilling platforms and pipeline transportation infrastructure. The rating also considers W&T's twenty seven years of operating experience in the area. Over the past several years, as the shallower GOM has matured, W&T has increased its activities in the deeper areas which are inherently exposed to greater operational challenges. The CFR is restrained by high leverage on proved developed reserves and production volumes, particularly in light of the company's GOM reserve profile, as well as the high finding and development costs and low reserve replacement rates in 2008 and 2009, which have shown significant improvement so far in 2010. W&T has good liquidity to meet its cash needs over the next twelve months. At September 30, 2010, the company had $180 million of cash and approximately $405 million of availability under its senior secured borrowing base revolver which has a current borrowing base (prior to the acquisition of additional proven developed reserves in the November 2010 acquisition) of $405 million. There are no near term debt maturities with the revolver not maturing until July of 2012 and the senior notes maturing in 2014. Covenants under the revolver include debt / EBITDA of 3.0x and a current ratio of 1.0x. As of September 30, 2010 W&T's debt / EBITDA was roughly 1.0x and its current ratio was greater than 3.0x. The November 2010 acquisition is not expected to materially impact the current level of covenant headroom. Substantially all of W&T's assets are pledged as security under the revolver which limits the extent to which asset sales could provide a source of additional liquidity if needed. The Caa1 senior unsecured notes rating reflects both the overall probability of default of W&T, to which Moody's assigns a PDR of B3, and a loss given default of LGD 5 (75%). The size of the senior secured revolver's potential priority claim relative to the senior unsecured notes results in the notes being rated one notch beneath the B3 CFR under Moody's Loss Given Default Methodology. If capital productivity were to decline from year to date 2010 levels resulting in declining reserve replacement levels, increased reserve replacement costs, higher leverage on production and reserves, an unfavorable production trend, or a weakened liquidity profile then the outlook could be changed to negative or the ratings downgraded. A positive rating action is unlikely in the near term given the uncertainty regarding the regulatory environment, permitting processes, and operating costs in the GOM due to the Macondo well blowout and oil spill. W&T Offshore Inc. is an independent exploration and production company headquartered in Houston, Texas. WASHINGTON MUTUAL: Files Notice on Implementation of Class Ballots ------------------------------------------------------------------ Washington Mutual, Inc. has filed a supplemental notice regarding the implementation of elections made on Class 16 Ballots for holders of Allowed PIERS Claims with respect to the Company's proposed Plan of Reorganization. The Supplemental Notice provides additional information regarding Section 20.2 of the Plan, pursuant to which holders of Allowed PIERS Claims have the right to elect on Class 16 Ballots to receive additional Creditor Cash, Cash on account of Liquidating Trust Interests, or Reorganized Common Stock. The Supplemental Notice explains the following procedures regarding elections on Class 16 Ballots: Liquidating Trust Interests distributed to holders of Allowed PIERS Claims shall be issued in two classes: Priority Liquidating Trust Interests and Residual Liquidating Trust Interests. Priority Liquidating Trust Interests shall represent the right to receive priority distributions from the Liquidating Trust (before distributions are made on account of Residual Liquidating Trust Interests), and the cap on the value of the Priority Liquidating Trust Interests that will be issued on the Effective Date shall be based on the net assets of the Liquidating Trust on the Effective Date (the estimated value of the Liquidating Trust on the Effective Date, less the anticipated expenses of the Liquidating Trust post-Effective Date). Residual Liquidating Trust Interests shall be distributed to holders of Allowed PIERS Claims to the extent that Allowed PIERS Claims are not fully satisfied by the distribution of Creditor Cash, Reorganized Common Stock and Priority Liquidating Trust Interests, such that the sum of the value of Creditor Cash, Reorganized Common Stock, Priority Liquidating Trust Interests and Residual Liquidating Trusts Interests distributed to each holder of an Allowed PIERS Claim shall equal the amount of such holder's Allowed PIERS Claim. To the extent that a holder of an Allowed PIERS Claim does not indicate an election on its Class 16 Ballot with respect to allocation of its proposed distribution, such holder shall receive its Pro Rata Share of Creditor Cash, Reorganized Common Stock, Priority Liquidating Trust Interests, and Residual Liquidating Trust Interests, without any adjustment on account of elections made by other Allowed PIERS Claim holders. Similarly, to the extent that a holder of an Allowed PIERS Claim elects to receive 100% of its distribution as Creditor Cash or 100% of its distribution as Reorganized Common Stock, and no Creditor Cash or no Reorganized Common Stock, as the case may be, is available to holders of Allowed PIERS Claims on the Effective Date, such holder shall be treated as though it made no election on its Class 16 Ballot. Assuming Creditor Cash and/or Reorganized Common Stock is available for distribution to holders of Allowed PIERS Claims on the Effective Date, elections made on the Class 16 Ballots shall influence only the distribution of Creditor Cash, Reorganized Common Stock and Priority Liquidating Trust Interests (to the extent each is available), and not Residual Liquidating Trust Interests. To the extent that a holder of an Allowed PIERS Claim elects to receive more than its Pro Rata Share of Creditor Cash, Reorganized Common Stock, or Cash on account of Liquidating Trust Interests, as the case may be, the amount of such election in excess of its Pro Rata Share shall be exchanged for Creditor Cash, Reorganized Common Stock, or Cash on account of Priority Liquidating Trust Interests (and not Residual Liquidating Trust Interests), as the case may be, that otherwise would have been allocated to such holder, on a dollar-for-dollar basis (meaning, the "exchange rate" is $1 of Creditor Cash for $1 face of Reorganized Common Stock for $1 face of Priority Liquidating Trust Interests). The percentage elections indicated on each Class 16 Ballot, if any, must equal 100%. WMI estimates that the net assets of the Liquidating Trust and, thus, the aggregate face value of the Priority Liquidating Trust Interests on the Effective Date (without taking into account the value, if any, of claims and causes of action to be assigned to the Liquidating Trust) will be between $100 and $150 million. The official Supplemental Notice filed with the Bankruptcy Court, as well as WMI's Plan and Disclosure Statement and the Settlement annexed to the Plan, are available at www.kccllc.net/wamu. Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500,000,000 to $1,000,000,000 with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. Fred S. Hodera, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York City and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unseucred Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JP Morgan Chase, which acquired WaMu's assets prior to the Petition Date WAVERLY GARDENS: Hearing to Dismiss Case Continued Until Nov. 23 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Tennessee has continued until November 23, 2010, at 11:00 a.m., the hearing to consider the request to dismiss the Chapter 11 cases of Waverly Gardens of Memphis, LLC, and Kirby Oaks Integra, LLC. As reported in the Troubled Company Reporter on April 27, Richard F. Clippard, the U.S Trustee for Region 8, asked the Court to dismiss the Debtors' Chapter 11 cases because the Debtors failed to file monthly operating reports since December 31, 2009, until the present. The U.S. Trustee added that without timely operating reports, he cannot determine the exact amount of quarterly fees due, because this amount is calculated based upon information contained in the monthly operating reports. TCR reported on October 17, 2008, that the U.S Trustee also sought for the dismissal of the Debtors' case because of their failure to file: (i) schedules of assets and liabilities; (ii) statement of financial affairs; (iii) attorney fee disclosure statement; and (iv) list of equity security holders. About Waverly Gardens of Memphis Memphis, Tennessee-based Waverly Gardens of Memphis, LLC and Kirby Oaks Integra, LLC -- http://www.waverlygardens.com/-- operate two senior living facilities consisting of a total of 248 units. Waverly Gardens consists of 196 rental units and is located at 6539 Knight Arnold Road, Memphis, Tennessee 38115. Kirby Oaks consists of 52 rental units and is located at 6551 Knight Arnold Road, Memphis, Tennessee 38115. The Debtors filed separate petitions for Chapter 11 relief on Oct. 2, 2008 (Bankr. W.D. Tenn. Lead Case No. 08-30218). Michael P. Coury, Esq., and Robert Campbell Hillyer, Esq., at Butler, Snow, O'Mara, Stevens & Cannada, represent the Debtors as counsel. Waverly Gardens estimated assets at $10 million to $50 million, and debts at $1 million to $10 million. Kirby Oaks estimated assets and debts at $1 million and $10 million. WEST FELICIANA: Bankruptcy Case Converted to Chapter 7 Liquidation ------------------------------------------------------------------ The Hon. Douglas D. Dodd of the U.S. Bankruptcy Court for the Middle District of Louisiana converted the Chapter 11 case of West Feliciana Acquisitions, L.L.C., to one under Chapter 7 of the Bankruptcy Code. As reported in the Troubled Company Reporter on July 19, 2010, the Debtor asked the Court to dismiss its case explaining that it does not have sufficient resources to make the cash payments in order to confirm a plan of reorganization or liquidation. Saint Francisville, Louisiana-based West Feliciana Acquisition, LLC, filed for Chapter 11 bankruptcy protection on January 17, 2010 (Bankr. M.D. La. Case No. 10-10053). Louis M. Phillips, Esq., at Gordon, Arata, McCollam, Duplantis & Eagan, L.L.P., represented the Debtor. The Company estimated assets at $50 million to $100 million and debts at $10 million to $50 million. WOLVERINE TUBE: To Sell Component Biz. to Mueller Industries ------------------------------------------------------------ Wolverine Tube Inc. has struck a deal to sell its air conditioning component business, owned by debtor Tube Forming LP, to Mueller Industries Inc. unit Overstreet-Hughes Co. Inc. -- or possibly a higher bidder, Bankruptcy Law360 reports. Bankruptcy Judge Peter J. Walsh signed off on the asset sale plan Friday in the U.S. Bankruptcy Court for the District of Delaware, setting up a Dec. 13 bid deadline, according to Law360. Huntsville, Alabama-based Wolverine Tube, Inc., is a global manufacturer and distributor of copper and copper alloy tube, fabricated products, and metal joining products. The Company currently operates seven facilities in the United States, Mexico, China, and Portugal. It also has distribution operations in the Netherlands and the United States. Wolverine Tube filed for Chapter 11 bankruptcy protection on November 1, 2010 (Bankr. D. Del. Case No. 10-13522). Cozen O'Connor, Esq., Mark E. Felger, Esq., and Simon E. Fraser, Esq., who have offices in Wilmington, Delaware, assist the Debtor in its restructuring effort. Scott K. Rutsky, Esq., and Adam T. Berkowitz, Esq., at Proskauer Rose LLP, are the Debtor's special corporate and tax counsel. Deloitte Financial Advisory Services LLP is the Debtor's financial advisor. Donlin Recano & Company, Inc., is the Debtor's claim agent. The Debtor disclosed $115,624,000 in total assets and $237,548,000 in total debts. Affiliates Tube Forming, L.P. (Bankr. D. Del. Case No. 10-13523), Wolverine Joining Technologies, LLC (Bankr. D. Del. Case No. 10- 13524), TF Investor Inc. (Bankr. D. Del. Case No. 10-13525), and WT Holding Company, Inc. (Bankr. D. Del. Case No. 10-13526) filed separate Chapter 11 petitions. XM SATELLITE: Reports $30,466 Net Income for September 30 Quarter ----------------------------------------------------------------- XM Satellite Radio Inc. reported net income of $30,466 for the three months ended September 30, 2010, from a $42,772 net loss for the same period in 2009. The Company posted a $76,807 net income for the nine months ended September 30, 2010, from a $344,572 net loss for the same period a year ago. Total revenues were $382,257 for the third quarter of 2010, from $325,473 for the third quarter 2009. Total revenues were $1,105,860 for the first nine months of 2010, from $934,538 for the first nine months of 2009. As of September 30, 2010, the Company had $4,035,140 total assets; $4,587,337 total liabilities; and a $552,197 stockholders' deficit. A full-text copy of the Company's Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?6e79 About XM Satellite Washington, D.C.-based XM Satellite Radio, Inc. broadcasts its music, sports, news, talk, entertainment, traffic and weather channels in the United States for a subscription fee through its proprietary satellite radio system. The Company's system consists of four in-orbit satellites, over 650 terrestrial repeaters that receive and retransmit signals, satellite uplink facilities and studios. Subscribers can also receive certain of the Company's music and other channels over the Internet. XM Satellite Radio, Inc. is a direct wholly owned subsidiary of Sirius XM Radio Inc. * * * As reported in the Troubled Company Reporter on June 29, 2010, Moody's Investors Service said that the Caa1 rating on XM Satellite Radio Inc.'s proposed senior secured notes is not affected by the increase in the size of the offering to $526 million from $350 million. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Nov. 29, 2010 RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP, INC. 17th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York City Contact: 1-903-595-3800; http://www.renaissanceamerican.com/ Dec. 9-11, 2010 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, a JW Marriott Resort & Spa, Scottsdale, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ January 26-28, 2011 TURNAROUND MANAGEMENT ASSOCIATION TMA Distressed Investing Conference Aria Las Vegas Contact: http://www.turnaround.org/ Jan. 27-28, 2011 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colo. Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 3-5, 2011 AMERICAN BANKRUPTCY INSTITUTE Caribbean Insolvency Symposium Westin Casuarina Resort & Spa, Grand Cayman Island Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 24-25, 2011 AMERICAN BANKRUPTCY INSTITUTE Valcon Four Seasons Las Vegas, Las Vegas, Nev. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 4, 2011 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Hyatt Regency Century Plaza, Los Angeles, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 7-9, 2011 AMERICAN BANKRUPTCY INSTITUTE Conrad Duberstein Moot Court Competition Duberstein U.S. Courthouse, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 10, 2011 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts - Florida Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 10-12, 2011 AMERICAN BANKRUPTCY INSTITUTE SUCL/ Alexander L. Paskay Seminar on Bankruptcy Law and Practice Marriott Tampa Waterside, Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 17-19, 2011 AMERICAN BANKRUPTCY INSTITUTE Byrne Judicial Clerkship Institute Pepperdine University School of Law, Malibu, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ April 27-29, 2011 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott, Chicago, IL Contact: http://www.turnaround.org/ May 5, 2011 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts - New York City Association of the Bar of the City of New York, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ May 6, 2011 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Hilton New York, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ June 6, 2011 AMERICAN BANKRUPTCY INSTITUTE Canadian-American Cross-Border Insolvency Symposium Fairmont Royal York, Toronto, Ont. Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Mich. Contact: http://www.abiworld.org/ July 21-24, 2011 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Hyatt Regency Newport, Newport, R.I. Contact: 1-703-739-0800; http://www.abiworld.org/ July 27-30, 2011 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Sanctuary at Kiawah Island, Kiawah Island, S.C. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 4-6, 2011 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 14, 2011 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Tampa Convention Center, Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. __, 2011 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Dublin, Ireland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 25-27, 2011 TURNAROUND MANAGEMENT ASSOCIATION Hilton San Diego Bayfront, San Diego, CA Contact: http://www.turnaround.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: November 3, 2010 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2010. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***