/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110127.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, January 27, 2011, Vol. 15, No. 26 Headlines 207 NEW MARKET: Case Summary & 2 Largest Unsecured Creditors ALLY FINANCIAL: Banks to Audition Today for IPO Role AMERICAN HOME: Gets Green Light to Destroy Most Loan Documents AMERICAN NATURAL: CEO M. Paulk Owns 214,888 Common Shares ANCHOR BLUE: Closing Medford Store, To Reject Rogue Valley Lease ANF ASBURY: Obtains Dismissal of Chapter 11 Case APF GROUP: Picture Frame Manufacturer Selling Its Assets APPLESEED'S INTERMEDIATE: Seeks Nod of $80-Mil. Exit Commitment APPLESEED'S INTERMEDIATE: Golden Gate's Keehner Steps Down APPTIS INC: Moody's Upgrades Probability of Default Rating to Caa1 ARMORED AUTOGROUP: S&P Assigns 'B' Rating; Outlook 'Negative' ARNIE KLEIN: Michael Jackson Doctor Files for Chapter 11 ARROW TRUCKING: N.D. Okla. Ct. Dismisses Bank Suit vs. Chairman AVIV REIT: S&P Puts 'B+' Rating on Proposed $200-Mil. Unsec. Notes BEACH VILLAGE: Case Summary & 3 Largest Unsecured Creditors BELTWAY 8: Files Schedules of Assets and Liabilities BI-LO LLC: Moody's Gives 'B2' Rating on Proposed $285MM Sr. Notes BI-LO LLC: S&P Puts 'B' Rating on Proposed $285MM Sr. Sec. Notes BIOLASE TECHNOLOGY: Expects to Report Positive Net Income in Q4 BISCAYNE PARK: Sells All Assets to Madison Realty BISCAYNE PARK: Asks for Dismissal of Case Following Sale BLUEKNIGHT ENERGY: MSD, 16.5% Owner, "Disagrees" With GTA Letter BUCKTOWN STATION: Files for Chapter 11 to Finish Project CARBON RESOURCES: Court Approves James LaGanke as Counsel CARBON RESOURCES: Files Schedules of Assets and Liabilities CARIS DIAGNOSTICS: Pursuing Covenant Relief; On Watch Neg. by S&P CASELLA WASTE: S&P Keeps 'B+' Rating, Outlook Now 'Positive' CATHOLIC CHURCH: All Milw. Committee Members Have Abuse Claims CATHOLIC CHURCH: Milw. Employee Pension Plans Underfunded CATHOLIC CHURCH: Wilmington Plan Outline Hearing Set for Feb. 15 CATHOLIC CHURCH: Wilmington Wants Until April 26 to Remove Actions CDR-V LLC: Files Schedules of Assets and Liabilities CDR-V LLC: 341 Meeting of Creditors Set for February 22 CELL THERAPEUTICS: Socius CG Discloses 9.7% Equity Stake CHARYS HOLDING: Liquidating Trusts to Amend Suit v. Hades CIRCLE ENTERTAINMENT: Appoints Gary McHenry as CFO CITYCENTER HOLDINGS: S&P Assigns 'B-' Corporate; Outlook Negative COLONIAL BANCGROUP: FDIC Has No Setoff Rights on BB&T Accounts CORNERSTONE CROSSING: Case Summary & 2 Largest Unsecured Creditors COSINE COMMUNICATIONS: Withdraws POS AM to Form S-8 COUNTRYWIDE FIN'L: MBS Buyers Sue for "Massive Fraud" DANA HOLDING: S&P Lifts Corp. Credit Rating to BB-, Outlook Stable DEL MONTE: Moody's Assigns '(P)B1' Corporate on Planned Buyout DENNY HECKER: Says Former Lawyer & Bankruptcy Trustee Lied DORA AJA: 1st Cir. BAP Upholds Chapter 7 Conversion DUBAI GROUP: In Talks With Lenders for $6BB Debt Restructuring DYNEGY INC: Icahn Extends Tender Offer; No Rival Offers Received EMIVEST AEROSPACE: Creditors' Committee Hirings Approved EMIVEST AEROSPACE: Seeks More Time to Pursue Going-Concern Sale ENERGY FUTURE: Amends Prospectus for $1.06-Bil. Notes Offering ENRON CORP: ECRC Files 25th Post-Confirmation Report ENRON CORP: ECRC Files Notice of Distributions as of November ENRON CORP: Regents Wins OK to Reject Claims Filed After Oct. 12 FKF MADISON: Developer Files Lawsuit Against Rival Investor GENERAL MOTORS: NCR Corp. Files Lawsuit vs. Old GM for $2.2MM GENERAL MOTORS: Nummi Insists on Claims vs. GM for Breach GENERAL MOTORS: Old GM's Asbestos Liabilities Fixed at $625MM GENERAL MOTORS: Toyota Insists on Claims vs. GM for NUMMI GRAND BEAR: Seeks to Tap Lenders' Cash Collateral GREYSTONE PHARMA: Has No Funding, Wants Ch. 7 Liquidation GULFSTREAM INT'L: Creditor Appeals Bankruptcy-Sale Order HARRY & DAVID: Will Likely Default, Says Moody's; PDR Now 'Ca' HERTZ CORP: Fitch Expects to Put BB- Rating on $300MM Unsec. Notes H.K. PORTER: To Purchase Great American Policy for $152,000 HOUGHTON INT'L: S&P Puts 'B' Rating on $500MM Credit Facilities HUNTINGTON INGALLS: S&P Puts BB+ Rating on $1.25BB Credit Facility IMH FINANCIAL: Amends Preliminary Prospectus for IPO INNKEEPERS USA: Bankers Have Contacted 70 Potential Suitors INTELLIGRATED INC: Moody's Assigns Initial 'B2' Corporate Rating INVACARE CORP: Moody's Withdraws 'B1' Rating Following Redemption ISC BUILDING: V. Maldonado Gets Lift As To Insurance ISC BUILDING: Proposes February 4 Auction for Lot B JENNIFER CONVERTIBLES: Ashley Continues Fight Over Trademark Use KANG INVESTMENTS: Case Summary & 20 Largest Unsecured Creditors KURRANT MOBILE: CEO Pierre Turgeon Now Has 53.71% Equity Stake LEHMAN BROTHERS: Amends Bankruptcy Plan, Has Committee Support LEVEL 3 COMMS: Thornburg Investment Discloses 5.19% Equity Stake LEVEL 3 COMMS: To Swap Convertible Notes with $300MM Sr. Notes MARQUETTE TRANSPORTATION: S&P Affirms 'B' Corporate Credit Rating MERUELO MADDUX: Plan Confirmation Hearing Begins Today MOLECULAR INSIGHT: Gets Court OK to Assume Savitr Investment Deal MOLECULAR INSIGHT: Common Stock Now Trades in Pink Sheets MOLECULAR INSIGHT: Court Approves CRT Investment as Fin'l Advisor MOLECULAR INSIGHT: Court Approves Riemer as Local Counsel MOLECULAR INSIGHT: Court Approves Foley as Special Counsel MOMENTIVE PERFORMANCE: Seeks Term Loans Extension Until 2015 MORTGAGE LENDERS: Judge Temporarily Blocks Bid to Destroy Docs. NASSAU COUNTY, NY: State Oversight Board Seized Control Finances NEXAIRA WIRELESS: Novatel Wireless Has 7.0% Equity Stake NORD RESOURCES: Sprott Asset Discloses 7.8% Equity Stake NORTH GENERAL: Examiner Taps Hughes Hubbard as Counsel OASIS PETROLEUM: Moody's Assigns 'B3' Corporate Rating OASIS PETROLEUM: S&P Puts 'B-' Rating on Planned Note Offering OFFICEMAX INC: A&P Fights Lawsuit Over Executive Poaching Claims PALM HARBOR: Wants Private Sale of Georgia Plant for $1.05-Mil. PATHWAY HOLDINGS: Case Summary & 20 Largest Unsecured Creditors PATIENTFIRST HEALTHCARE: Expects to File Schedules February 2 PERFORMANCE FOOD: S&P Puts 'B' Corp. Credit Rating; Outlook Stable RADIENT PHARMACEUTICALS: Gets NYSE Amex Delisting Notice RIVER ROAD: Lenders May or May Not Take O'Hare Hotel Through Plan RUGGED BEAR: Files for Chapter 11 Due to Cash Woes RUGGED BEAR: Case Summary & 30 Largest Unsecured Creditors SCO GROUP: Trustee Picks UnXis as Buyer for Assets SEXY HAIR: Plan Sponsor Open to Competing Bids SEXY HAIR: Has Interim Nod to Use Cash Collateral Until Feb. 3 SEXY HAIR: U.S. Trustee Appoints 5 Members to Creditors Panel SEXY HAIR: Creditors Committee Taps Klee Tuchin as Counsel SUMMIT BUSINESS: Files for Chapter 11 with Pre-Negotiated Plan SUMMIT BUSINESS: Case Summary & 30 Largest Unsecured Creditors TERRESTAR NETWORKS: Committee Wins Order on Confidential Info. TERRESTAR NETWORKS: Jefferies Wants Claim Allowed for Voting TERRESTAR NETWORKS: Kirkland Also Represents Potential Bidder TOWNSENDS INC: Proposes Feb. 15 Auction; No Stalking Horse So Far VITRO SAB: Wants Delay in Trial on Texas Involuntary Cases UNITED WESTERN: Shares to be Delisted on NASDAQ Global Market VIDEO WAREHOUSE: Case Summary & 21 Largest Unsecured Creditors WINDCHASE ENTERPRISES: Voluntary Chapter 11 Case Summary * Johnson & Freedman Promotes January N. Taylor to Partner * Phoenix Adds J. Koskiewicz as Managing Director in Dallas Office * Retired Oklahoma Judge Richard Bohanon Died January 18 * Recent Small-Dollar & Individual Chapter 11 Filings ********* 207 NEW MARKET: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: 207 New Market Street, LLC 13547 Ventura Boulevard, Suite 404 Sherman Oaks, CA 91423 Bankruptcy Case No.: 11-00390 Chapter 11 Petition Date: January 25, 2011 Court: U.S. Bankruptcy Court District of South Carolina (Spartanburg) Judge: John E. Waites Debtor's Counsel: James Calhoun Sarratt, Esq. SARRATT & CLARKE P.O. Box 10293 Greenville, SC 29603 Tel: (864) 271-4100 E-mail: jimsarratt@bellsouth.net Scheduled Assets: $1,624,700 Scheduled Debts: $3,408,005 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/scb11-00390.pdf The petition was signed by Robert Rukavina, managing member. ALLY FINANCIAL: Banks to Audition Today for IPO Role ---------------------------------------------------- Michael J. de la Merced, writing for The New York Times' DealBook, reports that people briefed on the matter told DealBook on Wednesday that several major banks are expected to give presentations to Ally Financial this week in an effort to win a leading role in the impending sale of the government's stake in the company. Sources told DealBook the banks are expected to make their presentations on Thursday. The sources spoke on condition of anonymity because they were not authorized to speak publicly on the matter. A decision on the underwriters will come several days after that, DealBook says. Mr. de la Merced says Gina Proia, a spokeswoman for Ally Financial, declined to comment. News of the bank presentations was reported earlier on Wednesday by CNBC. The Treasury Department owns nearly 74% of Ally, having converted some of its preferred shares in the lender into common stock with the aim of selling that holding off over time. About Ally Financial Ally Financial Inc., formerly GMAC Inc., -- http://www.ally.com/ -- is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3% stake. Private equity firm Cerberus Capital Management LP keeps 14.9%, while General Motors Co. owns 6.7%. The Company has tapped Goldman Sachs Group Inc. and Citigroup Inc. to advise on a range of issues, including strategic alternatives for the mortgage business and repayment of taxpayer funds. Ally's balance sheet at Sept. 30, 2010, showed $173.191 billion in total assets, $152.214 billion in total liabilities, and $20.977 billion in total equity. As reported by the Troubled Company Reporter on January 26, 2011, Standard & Poor's Ratings Services raised its rating on the preferred stock of Ally Financial Inc. (Ally; B/Stable/C) to 'CC' from 'C'. The ratings firm noted that Ally improved its liquidity position and alleviated some funding pressure at its holding Company in recent months, making it easier to meet obligations on its preferred stock. Nevertheless, the Company faces significant debt maturities at its holding Company in 2011 and 2012, which is reflected in the 'CC' rating. AMERICAN HOME: Gets Green Light to Destroy Most Loan Documents -------------------------------------------------------------- Scot J. Paltrow, writing for Reuters, reports that Bankruptcy Judge Christopher Sontchi on Monday allowed American Home Mortgage to destroy most of the 4,100 boxes of original loan files it still has. Reuters says Judge Sontchi also granted a request by Margaret Becker, a lawyer in Staten Island for the Legal Aid Society, to require the American Home trustee to set aside and cull through a few hundred of the boxes which may contain records still relevant to possible foreclosures. Mr. Becker said many low income homeowners were victims of deception about how much their loans actually would cost, and records from the boxes could help prove that they had been defrauded. As reported by the Troubled Company Reporter, Steven Sass, the liquidating trustee for American Home Mortgage, sought Judge Sontchi's permission to destroy 4,100 boxes of loan documents stored in a dank parking garage beneath the company's former headquarters in Melville, Long Island. Mr. Sass stated that the local fire marshal wants the documents removed as a fire hazard, and he said the cost of moving them would be prohibitive. In accordance with a 2009 court order, the bankrupt company earlier had destroyed the contents of thousands of other boxes after banks and other loan servicers had been given a chance to request and pick up particular files. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- was a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for Chapter 11 protection on August 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. American Home filed a de-consolidated plan of liquidation on August 15, 2008. The former home mortgage lender's liquidating Chapter 11 plan was confirmed in February 2009. AMERICAN NATURAL: CEO M. Paulk Owns 214,888 Common Shares --------------------------------------------------------- In a Form 5 filing with the Securities and Exchange Commission on January 24, 2011, Michael K. Paulk, chief executive officer at American Natural Energy Corp., disclosed that he beneficially owns 214,888 shares of common stock of the Company. In addition, Mr. Paulk directly beneficially owns derivative securities: options to purchase (a) 150,000 shares of common stock exercisable on September 8, 2014, at a price of $0.9 per share and (b) 660,000 shares of common stock exercisable on November 30, 2015, at $0.3 per share. About American Natural American Natural Energy Corporation (TSX Venture: ANR.U) is a Tulsa, Oklahoma-based independent exploration and production company with operations in St. Charles Parish, Louisiana. The Company's balance sheet at Sept. 30, 2010, showed $17.74 million in total assets, $9.42 million in total liabilities, and stockholders' equity of $8.32 million. * * * MaloneBailey, LLP, in Houston, after auditing the Company's 2009 results, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has substantial cash used for operating activities during 2009, has a working capital deficiency and an accumulated deficit at December 31, 2009. ANCHOR BLUE: Closing Medford Store, To Reject Rogue Valley Lease ---------------------------------------------------------------- Greg Stiles, writing for The Mail Tribune, Inc., reports that Anchor Blue will close its Medford, Oregon store at the end of the month. Anchor Blue Inc. has moved to reject the lease of its Rogue Valley Mall store in Medford effective Jan. 31, 2011. With the closing, Medford consumers will have to travel to the nearest stores in Lancaster Mall in Salem or Clackamas Town Center to return goods after Jan. 31, according to The Mail Tribune. The Statesman Journal reports that Anchor Blue has agreed to allow limited returns and use of gift cards. All goods purchased before January 7 can be returned for exchange or store credit until February 5 or 30 days after initial purchase, whichever is earlier, according to a consumer alert issued by the Oregon Attorney General's Office. Medford consumers will have to come to the Salem or Clackamas Town Center stores to return any goods after January 31. Anchor Blue plans to close 117 stores as part of its bankruptcy. About Anchor Blue Anchor Blue is a specialty retailer of casual apparel and accessories for the teenage market. Founded in 1972, the Company has 117 stores located in nine western and southwestern states: Arizona, California, Colorado, New Mexico, Oregon, Texas, Utah and Washington. The Company employs 1,400 full and part-time employees in their stores and their corporate headquarters in Corona, California. Anchor Blue is an indirect affiliate of Sun Capital Partners, a Florida-based investment firm. Anchor Blue Holding Corp., together with Anchor Blue Inc., filed for Chapter 11 bankruptcy protection on January 11, 2011 (Bankr. D. Del. Lead Case No. 11-10110). Neil Herman, Esq., and Rachel Mauceri, Esq., at Morgan Lewis, in Philadelphia, Pennsylvania, serves as counsel to the Debtors. Kenneth J. Enos, Esq., and Michael R. Nestor, Esq., at Young, Conaway, Stargatt & Taylor, serve as co-counsel. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. An Official Committee of Unsecured Creditors has been formed in the Chapter 11 cases. As of January 1, 2011, the Debtors' books and records reflected total combined assets of roughly $24.7 million (book value) and total combined liabilities of roughly $38.5 million. ANF ASBURY: Obtains Dismissal of Chapter 11 Case ------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California approved on January 18, 2011, ANF Asbury Park, LLC's motion to dismiss its Chapter 11 case. As reported in the Dec. 29, 2010 edition of the Trouble Company Reporter, the Debtor sought the dismissal after its lender, PA Asbury, LLC, obtained relief from stay with regards to the Debtor's 234 unit apartment building community known as Asbury Park Apartments, aka Park Plaza Apartments, located in Miami Gardens, Florida. Irvine, California-based ANF Asbury Park, LLC, filed for Chapter 11 bankruptcy protection on March 5, 2010 (Bankr. C.D. Calif. Case No. 10-12819). The Company estimated assets and debts at $10 million to $50 million in its Chapter 11 petition. Michael G. Spector, Esq., and Vicki L. Schennum, Esq., at the Law Offices of Michael G. Spector, in Santa, California, represent the Debtor in its restructuring effort. APF GROUP: Picture Frame Manufacturer Selling Its Assets -------------------------------------------------------- APF Group, Inc., intends to sell substantially all of the its assets, including: (a) its interests in real property leases; (b) all furniture, fixtures and equipment appurtenant thereto, (c) inventory, accounts, and (d) all customer-related assets. Bids for the Debtor's assets must be submitted by 5:00 p.m., prevailing Eastern Time, on Feb. 14, 2011, and an auction to flush out the highest and best bid is scheduled for 10:00 a.m., prevailing Eastern Time, on Feb. 16, 2011. For additional information about the uniform Bidding Procedures approved by Bankruptcy Court and other terms and conditions of any sale transaction, contact: Julie A. Cvek, Esq. Rattet, Pasternak & Gordon Oliver, LLP 550 Mamaroneck Avenue, Suite 510 Harrison, NY 10528 Telephone: (914) 381-7400 E-mail: jcvek@rattetlaw.com Picture frame manufacturer APF Group, Inc., dba APF Master Framemakers, APF MUNN Master Framemakers and Michael Thomas Framemakers, located in Yonkers, N.Y., sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23696) on Sept. 11, 2009. Jonathan S. Pasternak, Esq., and Julie A. Cvek, Esq., at Rattet, Pasternak & Gordon-Oliver, LLP, represent the Debtor. In its petition, the Debtor estimated its assets and debts at $10 million to $50 million. APPLESEED'S INTERMEDIATE: Seeks Nod of $80-Mil. Exit Commitment --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that subsidiaries of Orchard Brands Corp. on January 24 filed a motion for approval of a commitment from lenders to provide $80 million in financing to underpin their emergence from Chapter 11. The hearing for approval of the commitment will take place February 11. There will be a separate hearing to approve the loan itself. Mr. Rochelle relates that the contemplated exit loan has optional interest rates. One is for 3.5 percentage point above the London interbank borrowed rate, with a Libor floor of 1.5%. The lenders are UBS Loan Finance LLC, Wells Fargo Bank NA, and Ally Commercial Finance LLC. Plan Support Deal Before filing for bankruptcy protection, Appleseed reached an agreement with over 80% of its first lien secured lenders and 100% of its second lien secured lenders on the terms of a reorganization that will eliminate approximately $420 million of indebtedness (over 55%) to approximately $310 million, and improve the Company's operating flexibility. Under the Plan, first lien lenders will receive 95% of the new stock plus term loans, and second lien lenders will receive 5% of the new stock. Except for holders of "qualified unsecured trade claims", general unsecured claimants will not receive any distributions. Holders of existing also won't receive any distributions on account of the cancellation of the stock. The Debtors will seek approval of the disclosure statement explaining the Plan at a hearing on March 1, 2011, at 3:30 p.m. The Support Agreement binds the Lenders to support the Plan if the Debtors are successful in taking the steps necessary to meet the milestone deadlines included therein, and also provides the "backstop" that a sale will be triggered if certain deadlines are not met. Among other deadlines, the Debtors are required to obtain confirmation of a Plan within 90 days from the Petition Date. About Appleseed's Intermediate Based in Beverly, Massachusetts, Appleseed's Intermediate Holdings LLC, aka Appleseed's Intermediate Holdings, Inc., aka Orchard Brands sells clothing to people 55 and older. Orchard Brands has 17 brands including Appleseed's, Draper's & Damon's, Gold Violin, Haband and Norm Thompson. It publishes catalogs and has stores under its Appleseed's and Draper's & Damon's brands. It has annual sales of about $1 billion and earnings before interest, taxes, depreciation and amortization are about $50 million, sources said told Bloomberg. Appleseed's is owned by Golden Gate Capital Corp., which also holds stakes in retailers Express Inc., Eddie Bauer Holdings Inc. and Zale Corp. Appleseed's Intermediate and its affiliates filed for Chapter 11 bankruptcy protection on January 19, 2011 (Bankr. D. Del. Lead Case No. 11-10160). Richard M. Cieri, Esq., Joshua A. Sussberg, Esq., at Brian E. Schartz, at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP, serves as local counsel to the Debtors. Moelis & Company LLC is the Debtors' investment banker and financial advisor. Alvarez & Marshal North America, LLC, is the Debtors' restructuring advisor. Pricewaterhousecoopers LLP is the Debtors' independent auditor. Kurtzman Carson Consultants LLC is the notice, claims and balloting agent. Appleseed's Intermediate estimated assets at $100 million to $500 million and debts at $500 million to $1 billion in its Chapter 11 petition. APPLESEED'S INTERMEDIATE: Golden Gate's Keehner Steps Down ---------------------------------------------------------- Bloomberg News' Jonathan Keehner in New York reports that Golden Gate Capital Corp. managing director Stefan Kaluzny is leaving the San Francisco-based private equity firm, according to an e-mailed statement from the company. Mr. Kaluzny is a director of Golden Gate Investments, Eddie Bauer Inc., Zale Corp., J Jill Group Inc., Express Inc., and Orchard Brands. "After 10 years with the firm, Stefan Kaluzny has elected to pursue other interests," the company's statement said, according to Bloomberg. "Structural changes are in process at Golden Gate Capital, which will leverage current opportunities in the retail sector." About Appleseed's Intermediate Based in Beverly, Massachusetts, Appleseed's Intermediate Holdings LLC, aka Appleseed's Intermediate Holdings, Inc., aka Orchard Brands sells clothing to people 55 and older. Orchard Brands has 17 brands including Appleseed's, Draper's & Damon's, Gold Violin, Haband and Norm Thompson. It publishes catalogs and has stores under its Appleseed's and Draper's & Damon's brands. It has annual sales of about $1 billion and earnings before interest, taxes, depreciation and amortization are about $50 million, sources said told Bloomberg. Appleseed's is owned by Golden Gate Capital Corp., which also holds stakes in retailers Express Inc., Eddie Bauer Holdings Inc. and Zale Corp. Appleseed's Intermediate and its affiliates filed for Chapter 11 bankruptcy protection on January 19, 2011 (Bankr. D. Del. Lead Case No. 11-10160). Richard M. Cieri, Esq., Joshua A. Sussberg, Esq., at Brian E. Schartz, at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP, serves as local counsel to the Debtors. Moelis & Company LLC is the Debtors' investment banker and financial advisor. Alvarez & Marshal North America, LLC, is the Debtors' restructuring advisor. Pricewaterhousecoopers LLP is the Debtors' independent auditor. Kurtzman Carson Consultants LLC is the notice, claims and balloting agent. Appleseed's Intermediate estimated assets at $100 million to $500 million and debts at $500 million to $1 billion in its Chapter 11 petition. APPTIS INC: Moody's Upgrades Probability of Default Rating to Caa1 ------------------------------------------------------------------ Moody's Investors Service changed the probability of default rating for Apptis (DE), Inc., to Caa1 from Caa1/LD due to the deferral of cash payment on Apptis' subordinated notes due to its private equity owner from January 2011 to February 2013, which lies outside the maturity of Apptis' term loan due December 2012. In addition, Moody's affirmed the B1 ratings on the first lien term loan and revolver. Concurrently, the outlook was changed to positive from stable based on the positive trend in credit metrics over the last twelve months as a result of both an improvement in operating performance and debt reduction. These ratings were upgraded: -- Probability of default rating to Caa1 from Caa1/LD; These ratings were affirmed (including updated loss given default assessments): -- Corporate family rating at Caa1 -- $25 million senior secured revolving credit facility rating to B1 (LGD-2, 20%) from B1 (LGD-2, 23%); -- $79 million senior secured term loan rating to B1 (LGD-2, 20%) from B1 (LGD-2, 23%) The change in rating outlook to positive is based on Moody's recognition of Apptis' improvement in financial performance which, if sustained, could facilitate a complete refinancing of the entire debt structure including the revolving credit facility coming due in December 2011 and term loan due December 2012. The likely conversion of the company's backlog, over half of which is funded, supports the expectation of continued profitability. The Caa1 corporate family rating continues to be constrained by the expiration of the company's revolver in less than a year combined with the near term need to address the December 2012 maturity of the company's bank term loan. Moody's views the current capital structure as an unsustainable structure going forward. The size of the $79 million outstanding term loan due December 2012 is a concern as current liquidity resources are not expected to be sufficient to address the full amounts of the maturing term loan. The Caa1 CFR also acknowledges the company's long-term relationships with diverse agencies within the federal government counterbalanced with the high degree of customer concentration. In addition, the company's use of improving free cash flow to pay down debt in fiscal 2010 is also reflected in the ratings. Any deceleration in revenue trends or profitability and loss of a key customer/contract could have adverse rating implications as would debt/EBITDA levels exceeding and sustained above 6.0 times. In addition, debt-financed acquisitions that diminish the company's liquidity profile or raise leverage could exert downward pressure on the ratings. A ratings increase is considered unlikely at this time given the near-term need to re-capitalize the entire capital structure. The last rating action was on July 30,2010, when Moody's assigned a limited default "LD" designation to the Caa1 probability of default rating of Apptis and affirmed Apptis' Caa1 corporate family rating. For further information please refer to the credit opinion to be posted on moodys.com. The principal methodologies used in this rating were Global Aerospace and Defense published in June 2010, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Apptis (DE), Inc., headquartered in Chantilly, Virginia, provides information technology services and solutions primarily to federal government agencies. The company's core offerings include software development and engineering, network infrastructure deployment and support services, and product fulfillment. Gross revenues for fiscal year 2010 were roughly $1 billion. ARMORED AUTOGROUP: S&P Assigns 'B' Rating; Outlook 'Negative' ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Danbury, Conn.-based Armored AutoGroup Inc. The rating outlook is negative. At the same time, S&P assigned the Company's $50 million revolving credit facility due 2015 and $300 million term loan due 2016 an issue-level rating of 'B+' (one notch higher than the 'B+' corporate credit rating). The recovery rating on the senior secured credit facilities is '2', indicating S&P's expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default. S&P also assigned the Company's $275 million senior unsecured notes due 2018 an issue-level rating of 'CCC+' (two notches lower than the 'B+' corporate credit rating). The recovery rating on the notes is '6', indicating S&P's expectation of negligible (0% to 10%) recovery for noteholders in the event of a payment default. Net proceeds of the term loan and unsecured notes, along with about $258 million of equity, were used to finance Avista Capital Partners' acquisition of Armored AutoGroup, formerly a division of Clorox Co. The 'B' rating on Armored AutoGroup reflects Standard & Poor's Ratings Services' opinion that the Company's financial profile is highly leveraged and its business profile is vulnerable. S&P's business risk assessment incorporates the Company's narrow business focus, vulnerability to commodity price volatility and the economy, and its lack of track record as a stand-alone Company. There is also some concentration risk, as one customer accounted for about 30% of sales. The Company benefits from its well-recognized brands, primarily ArmorAll, STP, Oomph!, Son of a Gun, Tuff Stuff, and Car Buddy. The auto care business was part of Clorox Co., but now operates as an independent entity. Although the lack of a track record as a stand-alone Company is a key rating factor, the new CEO has extensive industry experience, and other key senior management members have been with the business for numerous years. S&P view the Company's financial policy as aggressive because of the mostly debt-financed acquisition, which resulted in a highly leveraged capital structure. S&P estimates that adjusted total debt to EBITDA at the close of the transaction was in the 6.0x range, funds from operations to total debt was only about 4%, and EBITDA interest coverage was thin at about 2x. These measures are weak compared with 'B' category medians. S&P expects Armored to maintain its EBITDA margins in the 29% area and keep its credit measures close to post-transaction levels over the outlook period, as S&P believes the Company will need to invest in and reinvigorate its brands. S&P believes that credit measures could quickly deteriorate given Armored's relatively small revenue and adjusted EBITDA base (about $300 million and $90 million, respectively). Moreover, S&P views the Company's products as vulnerable to changes in the economy, discretionary spending, and commodity prices. ARNIE KLEIN: Michael Jackson Doctor Files for Chapter 11 -------------------------------------------------------- Arnold Klein, a dermatologist who treated celebrity clients, including Michael Jackson, filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 11-12718) on Jan. 20, 2011, in Los Angeles, California. Dr. Klein estimated assets of up to $50,000 and debts between $1,000,000 and $10,000,000 in his bankruptcy petition. BankruptcyHome.com reports that the list of creditors holding the 20 largest unsecured claims against Dr. Klein amounts to $3,518,584. RadarOnline.com reports that the biggest accumulative debts against Dr. Klein was with City National Bank totaling some $2,695,150 in credit lines and unpaid mortgage loans. Dr. Klein also owes American Express $79,493 in credit card fees, Bank Of America $79,852 in credit card and banking fees, Chase $17,579 in credit card fees and $51,857 with Citibank in credit card fees. Also among his creditors are the IRS, owed $127,000, one of his lawyers, the landlord of his office building, and various medical partners, according to BankruptcyHome. BankruptcyHome relates that by filing for Chapter 11 bankruptcy, Dr. Klein signified that he plans to organize his debt, while not liquidating any assets, as a Chapter 7 filing would have indicated. ARROW TRUCKING: N.D. Okla. Ct. Dismisses Bank Suit vs. Chairman --------------------------------------------------------------- Tulsa World staff writer D.R. Stewart, reports that U.S. District Judge Gregory K. Frizzell of the Northern District of Oklahoma has dismissed four claims of alleged financial irregularities filed by a lender against Arrow Trucking Co.'s former owner, director and chairman Carol Pielsticker. The report says Judge Frizzell granted motions filed by Ms. Pielsticker's lawyers to dismiss the four claims filed against her by Transportation Alliance Bank of Ogden, Utah. The report relates TAB's lawsuit alleges Arrow Trucking, Ms. Pielsticker, former President and CEO Doug Pielsticker, former Chief Financial Officer Jonathan Moore and former General Counsel Joseph Mowry breached loan and guaranty agreements, committed fraud and conspiracy, breached their fiduciary duties and made fraudulent transfers of Arrow assets. The bank filed the lawsuit Jan. 8, 2010, the same day lawyers for Arrow filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court in Tulsa. According to the report, Judge Frizzell, however, found there is no evidence that Ms. Pielsticker negotiated, signed or benefitted from the loan or accounts receivable purchase agreement. The report notes Arrow bankruptcy trustee Patrick J. Malloy III estimates Arrow Trucking's assets at $8.55 million and liabilities at $98.97 million. About Arrow Trucking Tulsa-based Arrow Trucking was a 61-year-old trucking business that suspended operations Dec. 22, 2009. Arrow Trucking filed a Chapter 7 bankruptcy petition Jan. 8, 2010. AVIV REIT: S&P Puts 'B+' Rating on Proposed $200-Mil. Unsec. Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Aviv REIT Inc. (Aviv), and two of its subsidiaries, Aviv Healthcare Properties L.P. and Aviv Healthcare Capital Corp. In addition, S&P assigned a 'B+' rating and a recovery rating of '3' to a proposed $200 million senior unsecured note. The note is being co-issued by Aviv Healthcare Properties L.P. and Aviv Healthcare Capital Corp., and guaranteed by Aviv and several of its other operating subsidiaries. The '3' recovery rating indicates S&P's expectation for a meaningful (50%-70%) recovery for noteholders in the event of a payment default. The outlook is stable. S&P's rating on Aviv reflects the Company's aggressive financial risk profile, which is marked by moderate overall debt levels and a manageable debt maturity schedule against higher levels of secured, floating-rate debt and low debt coverage measures compared with peers, and some reliance upon third-party equity sources to achieve targeted growth. S&P considers the Company's business risk profile to be weak, given its heavy reliance on Medicaid reimbursement to drive tenant revenues, seasoned but lean management team, and low tenant rent coverage metrics and occupancy relative to peers. Chicago-based Aviv is a private owner of skilled nursing facilities in the U.S., with 185 owned or managed properties housing almost 18,000 licensed beds. The Company finances predominantly local and regional nursing home operators through the sale and leaseback of properties with long-term triple-net leases. Aviv is among the smallest of S&P's rated REITs and has an undepreciated book asset value of approximately $800 million, which equates to a moderate $40,000 average cost per bed. However, the Company maintains a geographically diverse portfolio of properties in 24 states with concentrations in California (18%), Texas (14%), Arkansas (9%), Missouri (9%), and Washington (7%). S&P's stable outlook reflects S&P's expectation for relatively stable cash flow as Aviv extends its existing tenant relationships and steadily expands its asset base. S&P would consider lowering the rating if the Company's coverage measures were to fall below 1.8x, perhaps due to tenant stress resulting from changes in Medicaid reimbursement or failure to manage cost controls. S&P would also consider a downgrade if the Company increased dividends to a level that reduced total coverage below 1.0x or pursued a large leveraged acquisition, particularly outside of their SNF core competency. While S&P does not view an upgrade as likely in the next 12 months, S&P would consider raising its rating if the Company continued to unencumber and expand its asset base and cash flows, while improving operating performance in the core portfolio, particularly tenant occupancy and rent coverage. BEACH VILLAGE: Case Summary & 3 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Beach Village Development, L.L.C. 4402 West Broad Street Richmond, VA 23230 Bankruptcy Case No.: 11-30486 Chapter 11 Petition Date: January 25, 2011 Court: U.S. Bankruptcy Court Eastern District of Virginia (Richmond) Judge: Douglas O. Tice Jr. Debtor's Counsel: Roy M. Terry, Jr., Esq. DURRETTEBRADSHAW PLC 1111 East Main Street, 16th Floor Richmond, VA 23219 Tel: (804) 775-6948 E-mail: rterry@durrettebradshaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb11-30486.pdf The petition was signed by Mark T. Motley, member. BELTWAY 8: Files Schedules of Assets and Liabilities ---------------------------------------------------- Beltway 8 Associates LP filed with the U.S. Bankruptcy Court of the Middle District of Louisiana its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $25,000,000 B. Personal Property $298,413 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $23,188,770 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $2,199,376 ----------- ----------- TOTAL $25,298,413 $25,388,146 Judge Douglas D. Dodd had extended the deadline for Beltway 8 to file schedules of assets and liabilities, and statement of financial affairs through January 26, 2011. The schedules, statement of affairs and all other documents were originally due on January 18, 2011. About Beltway 8 Baton Rouge, Louisiana-based Beltway 8 Associates, LP, dba Watermarke Apartments, owns and operates Watermarke Apartments, a 280 unit residential apartment complex located on approximately 15.6 acres in Houston, Texas. It filed for Chapter 11 bankruptcy protection on January 3, 2011 (Bankr. M.D. La. Case No. 11-10001). William E. Steffes, Esq., at Steffes, Vingiello & McKenzie, LLC, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. BI-LO LLC: Moody's Gives 'B2' Rating on Proposed $285MM Sr. Notes ----------------------------------------------------------------- Moody's Investors Service downgraded BI-LO, LLC's Corporate Family and Probability of Default ratings to B2 from B1. A B2 rating was assigned to the company's proposed $285 million senior secured notes due 2019. The rating outlook is stable. The proposed notes are being issued to refinance BI-LO's existing $195 million senior secured term loan due 2015 and fund a $74 million cash distribution to the company's equity sponsor. The $74 million dividend represents about half of the cash equity investment made by the sponsor in conjunction with BI-LO's emergence from bankruptcy in April 2010. Rating assigned: -- $285 million senior secured notes maturing 2019 at B2 (LGD 4, 57%) Ratings downgraded: -- Corporate Family Rating to B2 from B1 -- Probability of Default Rating to B2 from B1 Rating affirmed and to be withdrawn once the proposed transaction closes: -- $195 million senior secured term loan maturing 2015 at B2 "The downgrade to B2 considers that BI-LO is pursuing a financial policy that is more aggressive than what was originally expected when we assigned a rating to the company in April 2010 following its emergence from bankruptcy," stated Mickey Chadha, Senior Analyst at Moody's. "The large debt-financed dividend along with the elimination of the cash flow sweep mechanism suggests there will not be any meaningful reduction in funded debt through operating cash flow. As a result, we expect debt/EBITDA will likely remain over 5 times, a level more consistent with a B2 Corporate Family Rating." The rating outlook is stable and assumes that regional business conditions and credit metrics will not deteriorate. Ratings improvement is not likely in the near-to-intermediate term given the company's more aggressive financial policy. Ratings could be upgraded over the longer-term if the company demonstrates the ability and willingness to achieve and maintain debt to EBITDA at or below 4.5 times and EBITA to interest at or above 1.5 times. Ratings could be downgraded if debt to EBITDA rises above 6.0 times or if EBITA to interest drops and remains below 1.0 time. Ratings could also be downgraded if the company's cash flow deteriorates or if operating performance indicates loss of customer traffic. The last rating action for BI-LO, LLC was the assignment of the Corporate Family Rating and a rating to the $200 million senior secured term loan due 2015 on April 22, 2010. The principal methodologies used in this rating were Global Retail Industry published in December 2006, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. BI-LO, LLC, owns and operates supermarkets in the Southeastern U.S. The company has 207 stores under the BI-LO generates annual revenues of about $2.6 billion BI-LO LLC is privately held by an affiliate of Lone Star, a private equity investor headquartered in Dallas, Texas. BI-LO LLC: S&P Puts 'B' Rating on Proposed $285MM Sr. Sec. Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Greenville, S.C.-based BI-LO LLC. At the same time, S&P assigned a 'B' issue-level rating and '4' recovery rating to the Company's proposed $285 million senior secured notes. The '4' recovery rating indicates S&P's expectation of average (30%-50%) recovery of principal in the event of default. The Company intends to use the proceeds of the note issuance to pay off its term loan, fund a dividend the equity sponsors, and pay fees associated with the transaction. "The rating on BI-LO mostly reflects our assessment of the Company's highly leveraged financial risk," said Standard & Poor's credit analyst Charles Pinson-Rose. S&P currently foresees higher sales propelling better operating performance and modest credit metric improvement. S&P characterizes BI-LO's business risk as vulnerable, reflecting intense competition in the U.S. supermarket industry. Because S&P believes BI-LO may not fully pass along near-term food inflation to customers, margin could erode. BIOLASE TECHNOLOGY: Expects to Report Positive Net Income in Q4 --------------------------------------------------------------- BIOLASE Technology, Inc., announced that, based on a preliminary review of its financial performance for the fourth quarter ended December 31, 2010, the Company expects to report net revenue ranging between $9.5 million to $10 million with positive net income excluding non-cash stock option expense. The Company also issued annual revenue guidance for 2011 of net revenue in the range of $55 million to $60 million, a growth of approximately 120% to 140% over 2010, compared to analyst stimates of $40.4 million. Net revenue for the first quarter ended March 31, 2011, traditionally the lowest quarter of the year, is expected to range between $8.75 million to $9.25 million, up from $4.4 million in the first quarter of 2010, with positive net income. Effective January 19, 2011, BIOLASE's Board of Directors approved a stock dividend of one percent, payable March 31, 2011, to shareholders of record on March 15, 2011. In addition, the Board adopted a four% annual stock dividend policy. Federico Pignatelli, Chairman and CEO, said, "We are extremely pleased with our prompt turnaround. The programs that we put in place late this past summer, as I became the CEO, have already produced quantifiable results, in particular our shift to selling direct, instead of the exclusive distribution model that was terminated August 30, 2010. Just as importantly, we were able to achieve our revenue goal per our guidance, despite being negatively affected by the limited availability of a critical component for the iLaseTM new wireless 5 watt diode laser that delayed the sale of approximately $700,000 in revenue until the first quarter of 2011. As a result, BIOLASE has moved to additional suppliers to meet the demand for the iLase. "Furthermore, BIOLASE's newly launched e-commerce store -- http://www.biolasestore.com/-- surpassed our internal revenue goals by more than 40% and we expect the site to became a multi- million dollar revenue contributor in 2011," Pignatelli added. Sales to Henry Schein, Inc., one of the Company's major distributors, accounted for approximately 20% of the revenue in the fourth quarter. Schein continues to be an important long-term distribution partner in the Company's new model of using its own direct sales force and a selected group of high end distributors. Mr. Pignatelli continued, "At the recent Greater New York Dental Tradeshow, I was very impressed by the current demand for laser dental products, as more dentists are looking to incorporate laser dentistry in their practices. The message that I got at the trade show is that there is a strong demand for high tech capital equipment purchases and lasers are becoming a standard of care in the industry. "We foresee a very promising 2011 with revenue and earnings growth on a quarterly basis," Mr. Pignatelli said. "Following a restricted marketplace brought on by the recession and constricted credit, the dental high tech capital equipment market has now shown strong signs of a turnaround and there is reason to believe that it is poised for substantial growth, with the laser dental market at the high end of the spectrum of choices. We see rapid and substantial progress being made towards laser dentistry becoming the standard of care. Diode lasers have been accepted and adopted by a large part of the dental community and we expect the next step to be a larger and deeper adoption of the more sophisticated and clinically superior hard- and all-tissue lasers, with particular reference to our patented and world leading Waterlase(R) YSGG technology. Our new and revolutionary Waterlase iPlusTM, the most advanced all-tissue laser ever produced and scheduled to be launched in Boston at the upcoming Yankee Dental Meeting on January 27th, will be BIOLASE's best opportunity to capture a significant portion of this growing cutting edge dental market. "As a strong commitment to the Company, its shareholders and employees, and in my continuing pursuit to substantially increase shareholder value, I will maintain my $1 annual salary for 2011," Mr. Pignatelli concluded. The Company will provide additional details on a quarterly conference call and Webcast when it reports full financial results in March. About BIOLASE Technology Irvine, Calif.-based BIOLASE Technology, Inc. (NASDAQ: BLTI) -- http://www.biolase.com/-- is a dental laser company. The Company develops, manufactures and markets Waterlase technology and lasers and related products that advance the practice of dentistry and medicine. The Company's balance sheet at Sept. 30, 2010, showed $19.49 million in total assets, $23.04 million in total liabilities, and a stockholders' deficit of $3.54 million. As reported in the Troubled Company Reporter on March 22, 2010, BDO Seidman, LLP, in Costa Mesa, Calif., 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, has had declining revenues, has limited financial resources at December 31, 2009, and is substantially dependent upon its primary distributor for future purchases of the Company's products. BISCAYNE PARK: Sells All Assets to Madison Realty ------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida has confirmed the sale of all of Biscayne Park LLC's assets, including but not limited to the real property located at 8360 Biscayne Boulevard, in Miami, Florida, to Biscayne Park Acquisition Group, LLC. Madison Realty Capital, LP, a prepetition lender to the Debtor submitted the highest and best bid for the assets at the Court- ordered auction on December 1, 2010. Madison designated Biscayne Park Acquisition to be the purchaser of the assets. At the Auction, Madison submitted a credit bid of $1,000,000 of its claims against the Debtor. Madison Realty holds an allowed claim of not less than $10,607,711 secured by the Debtor's assets. The assets will be conveyed to Biscayne Park Acquisition free and clear of all Claims, provided that the first priority lien of the Miami-Dade County Tax Collector for real estate taxes owed with respect to the Assets will continue to attach to the Assets. Biscayne Park Acquisition agrees that the assets sold will not include (a) the mobile home of Christiane Desir, and (b) the $230,000 supersedeas bond posted by Walmart in Miami-Dade County Circuit Court under Case Number 08-67361 CA 22. The Debtor has since turned over management of the property to Madison. About Biscayne Park LLC Miami, Florida-based Biscayne Park LLC filed for Chapter 11 bankruptcy protection on April 26, 2010 (Bankr. S.D. Fla. Case No. 10-20941). Joel M. Aresty, Esq., who has an office in North Miami Florida, assists the Company in its restructuring effort. The Company disclosed $13,285,500 in assets and $14,318,965 in liabilities as of the Petition Date. BISCAYNE PARK: Asks for Dismissal of Case Following Sale -------------------------------------------------------- Biscayne Park LLC has asked the U.S. Bankruptcy Court for the Southern District of Florida to dismiss its bankruptcy case and to establish an administrative claims bar date. On December 30, 2010, the U.S. Bankruptcy Court for the Southern District of Florida confirmed the sale of all of the assets of Biscayne, including the Debtor's Miami real property located at 8360 Biscayne Boulevard, to Madison Park Realty, LP. Madison, which has an allowed claim of roughly $10.6 million secured by the Assets of the Debtor, submitted the highest and best bid for the Assets at the Court-ordered auction on December 1, 2010, via a credit bid of $1.0 million of its claims. The Debtor says it desires to now close this case in an organized and expeditious manner. The Debtor tells the Court that Madison froze the debtor-in-possession account in December and has diverted December rental receipts due in December to a different account. The Debtor also wants the Court to immediately set an administrative claims bar date so that, among other things, claims and fee applications can be considered and paid. The Court has set hearing to consider the Debtor's request on February 8, 2011, at 2:30 p.m. About Biscayne Park LLC Miami, Florida-based Biscayne Park LLC filed for Chapter 11 bankruptcy protection on April 26, 2010 (Bankr. S.D. Fla. Case No. 10-20941). Joel M. Aresty, Esq., who has an office in North Miami Florida, assists the Company in its restructuring effort. The Company disclosed $13,285,500 in assets and $14,318,965 in liabilities as of the Petition Date. BLUEKNIGHT ENERGY: MSD, 16.5% Owner, "Disagrees" With GTA Letter ---------------------------------------------------------------- In an amended Schedule 13D filing with the Securities and Exchange Commission on January 24, 2011, each of MSD Capital, L.P. and MSD Torchlight, L.P., disclosed beneficial ownership of 3,576,944 shares of common stock of Blueknight Energy Partners LP, representing 16.5% of the shares outstanding. As of November 5, 2010, there were 21,538,462 preferred units, 21,727,724 common units and 12,570,504 subordinated units outstanding. On January 24, 2011, MSD Capital, L.P. and MSD Torchlight, L.P. sent a letter to James C. Dyer, IV, the chief executive officer of the General Partner, and Jon M. Biotti, the manager of CB- Blueknight, LLC, a co-owner of the General Partner, expressing disagreement with certain of the statements set forth in a letter dated January 18, 2011 sent by Mr. Dyer to other unitholders of the Partnership and reiterating their willingness to engage in further discussions with Mr. Dyer regarding modifications to the Global Transaction Agreement. MSD Capital and MSD Torchlight now intend to have further discussions and other communications with the General Partner's management, members of the General Partner's Board of Directors, including Mr. Dyer and Mr. Biotti, regarding the subject matter of the correspondence. MSD Capital and MSD Torchlight may also communicate with other unitholders of the Partnership. Vitol Deal, GTA Modification As reported in the Jan. 21, 2011 edition of the Troubled Company Reporter, Blueknight Energy Partners, L.P., have exchanged letters with Solus Alternative Asset Management LP, owner of 7.2% of the common units of the Partnership, and Swank Capital, LLC, owner of 16.2%, in connection with the shareholders' objections to further implementation of a Global Transaction Agreement. As contemplated by the Global Transaction Agreement entered into on October 25, 2010, by and among Blueknight Energy Partners, L.P., Blueknight Energy Partners G.P., L.L.C., the general partner of the Partnership (the "General Partner"), Blueknight Energy Holding, Inc. ("Vitol Holding") and CB-Blueknight, LLC ("Charlesbank Holding"), on November 12, 2010, the General Partner purchased 433,758 General Partner Units in the Partnership to maintain the General Partner's approximate 2% general partner interest in the Partnership in exchange for aggregate consideration of approximately $2.8 million. The General Partner Units were issued and sold in a private transaction exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, and certain rules and regulations promulgated under that section. In a Jan. 5 letter to Blueknight, Swank Capital said, "Although we are disappointed with the GTA and believe that it violates the intent of fair dealings set forth in the Partnership Agreement, we are encouraged that you are willing to consider modifications in order to better align the long-term interests of all stakeholders of the Partnership." Solus also raised "serious" objections to the transactions outlined in the GTA. Solus believes that the General Partner has acted improperly with regard to the terms of the Phase I Transactions. In a January 12 letter to Blueknight, Solus said, "We ask that you reconsider the Global Transaction Agreement, an option which the General Partner and its Conflicts Committee specifically retained." On January 18, 2011, Solus and Swank received a written response from Mr. Dyer, the CEO of the General Partner. "Everyone is well aware that Blueknight faced great uncertainty and many risks following the bankruptcy filing of SemCrude, et. al. The loss of a majority of Blueknight's revenues, its excessive debt, defaults and restrictive covenants under its credit facility, increased interest payments and costly bank fees, and its ongoing shareholder litigation created for Blueknight a set of narrow and unsatisfactory options. You and other of our significant unitholders have access to capital and were certainly more than welcome to have submitted proposals for restructuring of the partnership. To our knowledge, only one such proposal was ever submitted. That proposal suggested an all-debt refinancing option, a notion determined to be infeasible by every investment banker with whom we discussed possible recapitalization ideas, including the same institution that had originally suggested the all-debt refinancing option," Mr. Dyer stated in the letter. "Blueknight went to great lengths to figure out terms on which equity capital -- true risk capital -- could be made available to underwrite a refinancing plan. We were well aware that without Vitol leading the refinancing, with both the equity infusion and with a new bank facility, there was no path to financial recovery. None. We were able to convince Vitol and later Charlesbank that bankruptcy was not the best solution for the Partnership, an option we did consider and one that would have certainly all but eliminated any remaining value for the Common Unitholders." A full-text copy of Mr. Dyer's response to Swank Capital and Solus is available for free at http://ResearchArchives.com/t/s?724e In response to the letter, Solus and Swank jointly stated January 19, "Notwithstanding the statements made in your letter, we wish to emphasize that at no time was Solus made "welcome" to submit a proposal for a restructuring of the Partnership. In fact, we are extremely disappointed that the general partner of the Partnership did not approach us for access to the capital which you apparently know that we have. Your contention that Vitol presented the only path for the Partnership's financial recovery is unsupportable. We remain ready to discuss a possible debt/equity infusion, or another transaction, for the Partnership on significantly better economic terms than those which the general partner obtained from its controlling persons." About Blueknight Energy Blueknight Energy Partners, L.P. (Pink Sheets: BKEP) -- http://www.bkep.com/-- provides integrated terminalling, storage, processing, gathering and transportation services for companies engaged in the production, distribution and marketing of crude oil and asphalt product. It provides services for the customers, and its only inventory consists of pipeline linefill and tank bottoms necessary to operate the assets. It has three operating segments: crude oil terminalling and storage services, crude oil gathering and transportation services, and asphalt services. The Company's balance sheet at Sept. 30, 2010, showed $295.96 million in total assets, $444.02 million in current liabilities, $4.69 million in long-term payable to related parties, and a partners' deficit of $152.75 million. * * * PricewaterhouseCoopers LLP, in Tulsa, Okla., in its report on the Partnership's financial statements for the year ended December 31, 2009, expressed substantial doubt about its ability to continue as a going concern. The independent auditors noted that the Partnership has substantial long-term debt, a deficit in partners' capital, and significant litigation uncertainties. BUCKTOWN STATION: Files for Chapter 11 to Finish Project -------------------------------------------------------- Andrew Schroedter, writing for Crain's Chicago Business' ChicagoRealEstateDaily.com, reports that Bucktown Station, LLC, a venture controlled by Bruce Fogelson, president of Chicago-based Paramount Homes, filed a Chapter 11 petition about seven months after PNC Bank filed to foreclose on the Bucktown Station's condominium development. According to the report, the venture has sold just three of the condos in the project at 1845 N. Western Ave., which was completed in late 2008. The Chapter 11 filing offers the "chance to catch my breath and finish the project," says Mr. Fogelson, son of South Loop condo developer Gerald Fogelson. "I have to have time to reorganize." ChicagoRealEstateDaily reports that the project has been in receivership since November, at the request of Pittsburgh-based PNC Bank. The lender sued the Fogelson-led venture in June to collect a past-due construction loan from Cleveland-based National City Bank, which PNC acquired in 2008. The loan, issued in November 2006, has a remaining balance of just under $5.6 million, according to a filing in the bankruptcy case. Mr. Fogelson said the loan matured in September 2008 but he kept making monthly payments until mid-2010, when the bank stopped cashing his checks. Bucktown Station is a triangle-shaped development at Western and Winnebago avenues has 15 two-and-three bedroom units, 21 indoor parking spaces and 3,000-square-feet of retail space. Bucktown Station, LLC, filed for Chapter 11 protection (N.D. Ill. Case No. 11-02004) in Chicago, Illinois on January 19, 2011. Karen J. Porter, Esq., at Porter Law Firm, in Chicago, represents the Debtor. The Debtor estimated assets of $1,000,001 to $10,000,000 and debts of up to $50,000 in its Chapter 11 petition. CARBON RESOURCES: Court Approves James LaGanke as Counsel --------------------------------------------------------- The Honorable Robert H. Jacobvitz of the U.S. Bankruptcy Court for the District of New Mexico approved the application of Carbon Resources, LLC, to employ the law firm of James M. LaGanke P.L.L.C. as its bankruptcy counsel, effective as of December 27, 2010. The firm may be reached at: James M. LaGanke, P.L.L.C. 13236 North 7th Street, Suite 4-257 Phoenix, Arizona 85022 Tel: (602) 279-6399 Fax: (602) 993-5323 E-mail: jameslaganke@aol.com Sandia Park, New Mexico-based Carbon Resources LLC filed for Chapter 11 bankruptcy protection on December 10, 2010 (Bankr. N.M. Case No. 10-16104). M.J. Keefe, Esq., at Gilpin & Keefe, PC, and the law firm of James M. LaGanke P.L.L.C., serve as the Debtor's bankruptcy counsel. The Debtor estimated its assets at $10 million to $50 million, and debts at $1 million to $10 million. CARBON RESOURCES: Files Schedules of Assets and Liabilities ----------------------------------------------------------- Carbon Resources, LLC, filed with the U.S. Bankruptcy Court for the District of New Mexico its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $22,200,000 B. Personal Property $10,696 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $4,484,338 E. Creditors Holding Unsecured Priority Claims $8,176 F. Creditors Holding Unsecured Non-priority Claims $923,440 ----------- ----------- TOTAL $22,210,696 $5,416,004 Sandia Park, New Mexico-based Carbon Resources LLC filed for Chapter 11 bankruptcy protection on December 10, 2010 (Bankr. N.M. Case No. 10-16104). M.J. Keefe, Esq., at Gilpin & Keefe, PC, and the law firm of James M. LaGanke P.L.L.C. serve as the Debtor's bankruptcy counsel. CARIS DIAGNOSTICS: Pursuing Covenant Relief; On Watch Neg. by S&P ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Irving, Texas-based Caris Diagnostics, Inc., remain on CreditWatch with negative implications, where they were placed on Nov. 24, 2010. The CreditWatch placement was based on Caris' tightened liquidity and potential for breaching a credit agreement covenant. It is S&P's understanding that the Company is actively negotiating with its lenders to amend the loan agreement including a modification of the covenants. If the proposed modifications are approved, Standard & Poor's expects to affirm its 'B' corporate credit rating on the Company, along with all related credit and recovery ratings on the Company's debt issues. The rating outlook would be negative. The negative outlook would reflect S&P's expectations of decelerating revenue and EBITDA growth. S&P expects modest debt repayment over the next few quarters, as the Company continues to operate within its new, but still restrictive, loan covenants. S&P could lower S&P's rating if S&P believes another covenant breach is imminent or borrowing capacity under the revolving credit agreement shrinks substantially. This could relate to EBITDA margins dropping 300 basis points, suggesting a more vulnerable business position, or the ongoing prospect of losses in the hematopathology business. CASELLA WASTE: S&P Keeps 'B+' Rating, Outlook Now 'Positive' ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Casella Waste Systems Inc. and revised the outlook to 'positive' from 'stable'. S&P also affirmed its 'BB' issue rating and '1' recovery rating on the Company's existing first-lien senior secured credit facility; raised S&P's issue rating and revised S&P's recovery rating on the Company's second- lien notes to 'BB-' and '2', respectively, from 'B+' and '4'; and assigned S&P's 'B-' issue rating and '6' recovery rating to the Company's proposed $200 million senior subordinated notes due 2019. "Our affirmation of the corporate credit rating and revision of the outlook reflect Casella's commitment to and progress toward reducing debt leverage," said Standard & Poor's credit analyst James Siahaan. "The rating action also incorporates what we believe will be a more manageable debt maturity schedule following the debt repayment and refinancing transactions." Casella has signed a definitive agreement to divest certain recycling facilities along with a transfer station to CE Holdings- -a Company formed by Pegasus Capital Advisors LP and Intersection LLC, and financially backed by Pegasus, MissionPoint Capital Partners LLC, HarbourVest Partners LLC, and Ares Capital Corp. S&P believes that the Company is likely to use the entire divestiture proceeds along with borrowings under its revolving credit facility to repay its term loan B due April 2014. Rutland, Vermont-based Casella Waste Systems Inc. is a vertically integrated provider of collection, recycling, transfer, and disposal services to residential, commercial, and industrial customers. The Company operates predominantly in the northeastern U.S. and focuses on competing in secondary and tertiary markets. Casella occupies the largest or second-largest market position in about 80% of the markets it serves. CATHOLIC CHURCH: All Milw. Committee Members Have Abuse Claims -------------------------------------------------------------- Patrick S. Layng, the United States Trustee for Region 11, appointed five members to the Official Committee of Unsecured Creditors in the Archdiocese of Milwaukee's Chapter 11 case: (1) Charles Linneman, acting chairperson; (2) Dean Weissmueller; (3) Kevin Wester; (4) Karen Konter; and (5) Peter Neels The newly appointed members are among those holding the largest unsecured claims against the Archdiocese, and are willing to serve in the Creditors Committee, according to the U.S. Trustee's Court filing. According to a report from Journal Sentinel, Mike Finnegan, Esq., at Jeff Anderson & Associates, in St. Paul, Minnesota, has confirmed that all five committee members have abuse claims against Catholic clergy. Jeff Anderson represents the five committee members, and hence, all of their addresses are listed as c/o Jeff Anderson, 366 Jackson Street, in St. Paul, Minnesota 55101 with telephone number (651) 227-9990 and facsimile number (651) 297-6543. About the Archdiocese of Milwaukee The Diocese of Milwaukee was established on November 28, 1843, and was elevated to an Archdiocese on February 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No. 11-20059) on January 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Milw. Employee Pension Plans Underfunded --------------------------------------------------------- The Archdiocese of Milwaukee revealed at a meeting held last January 21, 2011, that its employees' pension plans are underfunded, the Journal Sentinel reports. The meeting was among Milwaukee, its creditors, and David W. Asbach, assistant U.S. Trustee for Region 11, for the selection of the members of an official committee of unsecured creditors, relates Annysa Johnson of the Journal Sentinel. According to the Daily Reporter, Jerry Topczewski, chief of staff for Archbishop Jerome E. Listecki, could not estimate the extent of the shortfall, but that it affects only the Archdiocese's employees and retirees, and not those of schools, parishes or other participating employers. The shortfall is attributed to poor investment performance. "It's not because we haven't made payments. They're made on time and based on actuarial projections," Mr. Topczewski was quoted by the Journal Sentinel as saying. Mr. Topczewski is one of nearly 5,800 people covered in a pension plan for lay employees. Mr. Topczewski also said that all investment stocks took a hit in 2008, and the plans are still trying to recover from that. "You could call all kinds of pension funds around town and find a lot are underfunded," he said. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, disclosed at the meeting that the Archdiocese participates in four retiree plans: three pension funds for lay workers, priests and union workers; and a retired priest's health plan, the Journal Sentinel reports. The plans are held in trusts, and hence, are not assets available to fund a settlement between the Archdiocese and its creditors, Mr. Topczewski said. About the Archdiocese of Milwaukee The Diocese of Milwaukee was established on November 28, 1843, and was elevated to an Archdiocese on February 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No. 11-20059) on January 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Wilmington Plan Outline Hearing Set for Feb. 15 ---------------------------------------------------------------- The Catholic Diocese of Wilmington, Inc., notified parties-in- interest that it will seek approval of the disclosure statement explaining its proposed Chapter 11 plan at a hearing on February 15, 2011, before Judge Christopher S. Sontchi of the United States Bankruptcy Court for the District of Delaware. Deadline to file objections to the adequacy of the Disclosure Statement, as amended, is on February 5, 2011. To recall, the Diocese filed with the Court its Third Amended Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on January 10, 2011. The Amended Plan provides for the establishment of a trust, to which the Diocese will contribute the unrestricted assets of the bankruptcy estate, less approximately $3 million, which will be used as startup capital for the Reorganized Debtor following confirmation of the Amended Plan. The Amended Plan also offers two choices for the Abuse Survivors: (i) Settlement Plan. An immediate, estimated $74 million global settlement of abuse claims against the Diocese, the Parish Corporations and the related Catholic Entities; and (ii) CDOW-Only Plan. A pared-down option using only Diocesan assets, which may provide as little as $15 million, depending on litigation outcomes, to compensate all creditors and resolve claims against the Diocese alone. Under either plan option, the Diocese proposes to undertake voluntary steps and non-monetary actions for the Abuse Survivors, including the sending by the Bishop of letters of apology to survivors and their families, and the posting on the Diocese's Web site the results of the annual audit by the United States Conference of Catholic Bishops of the Diocese's compliance with the Charter for the Protection of Children and Young People. The Abuse Survivors and their counsel, however, are not happy with the Archdiocese's Amended Plan and Disclosure Statement, alleging that the Amended Plan is insincere and insufficient, both in terms of the compensation offered to victims and disclosure of information related to abuser priests. They argued, among other things, that the Amended Plan will prolong the dispute and suffering on all sides. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 on Oct. 18, 2009 (Bankr. D. Del. Case No. 09-13560). Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50,000,001 to $100,000,000 while debts are between $100,000,001 to $500,000,000. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin October 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Wilmington Wants Until April 26 to Remove Actions ------------------------------------------------------------------ The Catholic Diocese of Wilmington, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to extend through April 26, 2011, the period within which it may remove various civil actions pending as of the Petition Date. The Diocese also asks Judge Sontchi that the proposed April 26 Removal Period apply to all matters specified in Rules 9027(a)(2)(A), (B) and (C) of the Federal Rules of Bankruptcy Procedure, and that the order approving the request be without prejudice to (i) any position the Diocese may take regarding whether Section 362 of the Bankruptcy Code applies to stay any given civil action pending against the Diocese, and (ii) the right to seek further extensions of the Removal Period. The Diocese's current Removal Period expires on January 26, 2011. Judge Sontchi, however, will convene a hearing on February 16, 2011, to consider the request, with objections due on February 7. Pursuant to Del.Bankr.L.R. 9006-2, the Removal Period is automatically extended until the conclusion of that hearing without the necessity for the entry of a bridge order. The Diocese believes that there is ample cause to extend the deadline for removal of the Actions, given that the Actions assert personal injury tort claims over which the Bankruptcy Court has limited subject-matter jurisdiction, and the liquidation and estimation of the claims in the U.S. District Court for the District of Delaware may well be necessary in order to move the bankruptcy case forward. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, asserts that since the filing of the last extension request, the Diocese has engaged in additional plan negotiations and discussions with its key constituencies, the culmination of which was the filing on January 10, 2011, of the Amended Plan of Reorganization and Disclosure Statement. The Amended Plan expressly contemplates the Diocese exercising its removal rights under Rule 9001 of the Federal Rules of Bankruptcy Procedure and Section 1452 of the Judicial and Judiciary Procedures Code to allow for an efficient and consistent process to liquidate claims, Mr. Patton points out. Accordingly, the Current Deadline should be extended to allow the Bankruptcy Court to consider confirmation of the Amended Plan and the important removal provision, he maintains. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 on Oct. 18, 2009 (Bankr. D. Del. Case No. 09-13560). Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50,000,001 to $100,000,000 while debts are between $100,000,001 to $500,000,000. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin October 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CDR-V LLC: Files Schedules of Assets and Liabilities ---------------------------------------------------- CDR-V LLC filed with the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $863,000 B. Personal Property $3,077 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $1,300,000 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $0 ----------- ----------- TOTAL $866,077 $1,300,000 Lancaster, California-based CDR-V, LLC filed for Chapter 11 bankruptcy protection on December 23, 2010 (Bankruptcy Case No. 10-64829). Judge Vincent P. Zurzolo presides over the case. The Debtor estimated its assets at $10 million to $50 million, and debts at $1 million to $10 million. The Debtor is represented by Gary L. Harre, Esq., at Global Capital Law PC. CDR-V LLC: 341 Meeting of Creditors Set for February 22 ------------------------------------------------------- A Section 341 meeting of creditors in the Chapter 11 case of CDR-V, LLC is set for February 22, 2011, at 1:15 p.m. The meeting will be held at 725 S Figueroa St., Room 2610, in Los Angeles, California 90017. During the meeting, creditors can question the Debtor's representative. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice. Lancaster, California-based CDR-V, LLC filed for Chapter 11 bankruptcy protection on December 23, 2010 (Bankruptcy Case No. 10-64829). Judge Vincent P. Zurzolo presides over the case. The Debtor is represented by Gary L. Harre, Esq., at Global Capital Law PC. CELL THERAPEUTICS: Socius CG Discloses 9.7% Equity Stake -------------------------------------------------------- In a Schedule 13G filing with the Securities and Exchange Commission on January 24, 2011, each of Socius CG II, Ltd., Socius Capital Group, LL, Sabra ICG, LLC, Patricia Peizer and Terren S. Peizer disclosed beneficial ownership of 87,029,396 shares of common stock of Cell Therapeutics, Inc. representing 9.7% of the shares outstanding. As of October 22, 2010, there were 814,781,932 shares of common stock of the company outstanding. On January 12, 2011, Cell Therapeutics, Inc. entered into a Securities Purchase Agreement between the Company and Socius CG II, Ltd. Pursuant to the Purchase Agreement, the Company agreed to issue to the Socius CG II, Ltd. in a registered offering: (i) up to 25,000 shares of the Company's Series 8 Non- Convertible Preferred Stock, no par value per share; (ii) warrants to purchase up to 22,563,177 shares of the Company's common stock, no par value per share; and (iii) an additional investment right to purchase up to 25,000 shares of the Company's Series 9 Convertible Preferred Stock, no par value per share, for an aggregate offering price of $25 million. The closing of the Offering is subject to certain conditions. The shares of Series 8 Preferred Stock will accrue annual dividends at the rate of 10% from the date of issuance, payable in additional shares of Series 8 Preferred Stock. The shares of Series 8 Preferred Stock are redeemable at the option of the Company at any time after issuance, in whole or in part, either in cash or by offset against recourse notes fully secured with marketable securities, which may be issued by Socius CG II, Ltd. to the Company in connection with the exercise of the Warrants and the Additional Investment Right. Each Warrant has an initial exercise price of $0.3878 per share of common stock. The Warrants are exercisable immediately and expire two years from the date of issuance, provided that the Warrants must be exercised simultaneously with the exercise of the Additional Investment Right so that the percentage of the Warrants that have been exercised will always equal or exceed the percentage of the Additional Investment Right that has been exercised. The exercise price for the Warrants may be paid in cash or through the issuance by Socius CG II, Ltd. to the Company of Notes. The Warrants are subject to mandatory exercise and cancellation, in whole or in part, in certain circumstances. The Additional Investment Right has an exercise price of $1,000 per share of Series 9 Preferred Stock. The Additional Investment Right is exercisable immediately and must be exercised no later than February 11, 2011. The exercise price of the Additional Investment Right may be paid in cash or through the issuance of Notes by Socius CG II, Ltd to the Company. The Additional Investment Right is subject to cancellation, in whole or in part, in certain circumstances. Each share of Series 9 Preferred Stock is convertible at the option of the holder, at any time during its existence, into approximately 2,579 shares of common stock at a conversion price of $0.3878 per share of common stock, for a total of approximately 64,466,219 shares of common stock. About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. The Company's balance sheet at September 30, 2010, showed $46.6 million in total assets, $38.9 million in total liabilities, $13.4 million in common stock purchase warrants, and a stockholders' deficit of $5.7 million. Stonefield Josephson, Inc., in San Francisco, 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 sustained loss from operations, incurred an accumulated deficit, and has substantial monetary liabilities in excess of monetary assets as of December 31, 2009. CHARYS HOLDING: Liquidating Trusts to Amend Suit v. Hades --------------------------------------------------------- Bankruptcy Judge Brendan Linehan Shannon granted the request of Charys Liquidating Trust and C&B Liquidating Trust for leave to file a second amended complaint against Hades Advisors, LLC. The Plaintiffs' First Amended Complaint asserted four counts. Count I seeks the avoidance and recovery of the funds that Charys Holding Company, Inc., had wired to Hades before Charys filed for bankruptcy on the ground that the Transfer was a preferential payment subject to avoidance under 11 U.S.C. Secs. 547 and 550. Pursuant to a motion to dismiss filed by the Defendant, the Court dismissed without prejudice to the Plaintiffs Count I of the Complaint because the Complaint lacked facts from which the Court could have inferred that the Transfer had been made on account of an antecedent debt. Thereafter, the parties commenced written discovery on the remaining counts articulated in the Complaint, in the course of which the Plaintiffs obtained new information in support of Count I. The Plaintiffs have amended the Complaint to plead these additional facts. Several months prior to its chapter 11 filing, Charys's board of directors began negotiations with certain of its noteholders to restructure its debt. Billy V. Ray, the chief executive officer of Charys, whose replacement was contemplated as part of the restructuring effort, sought alternatives that would not include his termination. The Plaintiffs allege that Mr. Ray engaged Hades, without the authority or knowledge of Charys's board, for this express purpose, despite the fact that Charys had already engaged AlixPartners LLP as management advisors. In January 2008, Charys wired to Hades $100,000 in connection with Hades' restructuring services. At the time of the Transfer, Charys is alleged to have been insolvent because its total liabilities exceeded its total assets by at least $10 million. Counsel for Charys Liquidating Trust and C&B Liquidating Trust are: Thomas M. Horan, Esq. Michael G. Busenkell, Esq. WOMBLE CARLYLE SANDRIDGE & RICE, PLLC 222 Delaware Avenue Wilmington, DE 19801 Telephone: (302) 252-4339 Facsimile: (302) 661-7707 E-mail: thoran@wcsr.com mbusenkell@wcsr.com Counsel for Advisors, LLC, are: Scott J. Leonhardt, Esq. Frederick B. Rosner, Esq. THE ROSNER LAW GROUP LLC 824 Market Street, Suite 810 Wilmington, DE 19801 Telephone: (302) 295-5093 E-mail: leonhardt@teamrosner.com rosner@teamrosner.com The case is Charys Liquidating Trust and C&B Liquidating Trust, v. Hades Advisors, LLC, Adv. Pro. No. 10-50211 (Bankr. D. Del.). A copy of the Court's January 20, 2011 Opinion is available at http://is.gd/yNTrugfrom Leagle.com. About Charys Holding Headquartered in Atlanta, Georgia, Charys Holding Co., Inc. -- http://www.charys.com/-- provided remediation & reconstruction and wireless communications & data infrastructure. Charys Holding and its affiliated debtor, Crochet & Borel Services, Inc., filed for Chapter 11 protection (Bankr. Del. Lead Case No. 08-10289) on February 14, 2008. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Lydia T. Protopapas, Esq., at Weil, Gotshal & Manges LLP, represented the Debtors as counsel. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., represented the Debtors as Delaware counsel. Matthew S. Barr, Esq., at Milbank, Tweed, Hadley & McCloy, LLP represented the Official Committee of Unsecured Creditors as counsel. Chad A. Fights, Esq., and Gregory W. Werkheiser, Esq., at Morris, Nichols, Arsht & Tunnell, represented the Committee as Delaware counsel. Charys Holding's Chapter 11 plan was declared effective on March 12, 2009. Under the plan, convertible noteholders was to recover 32.5% in the form of 94% of the new stock plus $20 million in secured notes maturing in four years and paying 15% interest. Unsecured creditors with $107 million in claims recover 15 cents on the dollar, from a liquidating trust created under the Plan. Holders of subordinated claims and equity interests in Charys did not get anything. Upon confirmation of their bankruptcy plan, the Debtors had assets of roughly $215 million and the liabilities of roughly $339 million. CIRCLE ENTERTAINMENT: Appoints Gary McHenry as CFO -------------------------------------------------- Gary McHenry has been appointed to serve as the Chief Financial Officer of Circle Entertainment Inc. effective January 21, 2011. Mr. McHenry, as the Chief Financial Officer, will serve as the Company's Principal Financial Officer. Mr. McHenry, 60 years old, has served as the Company's Principal Accounting Officer since August 1, 2009. He also served as the Controller of the Company's former Las Vegas subsidiary from 2007 until its emergence from Chapter 11 bankruptcy proceedings in December 2010. Mr. McHenry is an at-will employee of the Company. Mr. McHenry is a CPA and has over 10 years professional experience in the real estate, manufacturing and communications industries. There is no arrangement or understanding between Mr. McHenry and any other person pursuant to which he was selected as an officer of the Company. There are no family relationships between Mr. McHenry and any executive officer or director of the Company, and there are no transactions in which Mr. McHenry has an interest requiring disclosure under Item 404(a) of Regulation S-K. About FX Real Estate FX Real Estate and Entertainment Inc. owns 17.72 contiguous acres of land located at the southeast corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada. The Las Vegas Property is currently occupied by a motel and several commercial and retail tenants with a mix of short and long-term leases. On June 23, 2009, as a result of the default under the first mortgage loan, the first lien lenders had a receiver appointed to take control of the property. The Company is headquartered in New York City. The Company's balance sheet at September 30, 2010, showed $142.3 million in total assets, $525.3 million in total liabilities, and a stockholders' deficit of $383.0 million. * * * As reported in the Troubled Company Reporter on April 15, 2010, LL Bradford, in Las Vegas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company is in default under the mortgage loan, has limited available cash, has a working capital deficiency and will need to secure new financing or additional capital in order to pay its obligations. The Company disclosed in its Form 10-Q for the quarter ended June 30, 2010, that it has no current cash flow and cash on hand as of August 13, 2010, is not sufficient to fund its short-term liquidity requirements, including its ordinary course obligations as they come due. On April 21, 2010, the Company's remaining Las Vegas subsidiary, namely FX Luxury Las Vegas I, LLC, filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Nevada (Case No. 10-17015). The Company's Las Vegas subsidiary filed for Chapter 11 bankruptcy on April 21, 2010, and a plan of liquidation or reorganization will eventually be implemented under which the Company will surrender ownership of the Las Vegas Property. Under such a plan, it is extremely unlikely the Company will receive any material interest or benefit. CITYCENTER HOLDINGS: S&P Assigns 'B-' Corporate; Outlook Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Las Vegas-based CityCenter Holdings LLC. The rating outlook is negative. At the same time, S&P assigned the Company's $500 million senior secured first-lien term loan due 2015 and $900 million senior secured first-lien notes due 2016 S&P's 'B' issue-level rating (one notch higher than the 'B-' corporate credit rating). S&P also assigned these debt issues its recovery rating of '2', indicating S&P's expectation for substantial (70%-90%) recovery for lenders and noteholders in the event of a payment default. In addition, S&P assigned CityCenter's $600 million senior secured second-lien pay-in-kind (PIK) toggle notes due 2017 S&P's 'CCC' issue-level rating (two notches lower than the 'B-' corporate credit rating) with a recovery rating of '6', indicating S&P's expectation of negligible (0%-10%) recovery for noteholders. Both the first- and second-lien notes [[[the first lien term loan will not be co-issued]]] were co-issued by wholly owned subsidiary CityCenter Finance Corp. The Company used the proceeds from the notes offerings to repay a portion of the previously existing $1.85 billion senior secured credit facility and to prefund interest expense obligations on both first-lien debt instruments for approximately 18 months. Concurrent with the close of the notes offering, an amendment and restatement of the previously existing credit agreement became effective, resulting in a $500 million first-lien term loan outstanding that will mature in 2015. Additionally, under the terms of the senior secured second-lien PIK toggle notes, the first three interest payments on those notes will be paid in kind. Thereafter, the Company may elect to pay interest on the second-lien notes entirely in cash, entirely via PIK interest accrual, or 50% cash and 50% PIK. "The 'B-' corporate credit rating reflects CityCenter's weak credit measures and the very slow ramp-up experienced at the property since its opening in December 2009," said Standard & Poor's credit analyst Ben Bubeck, "as well as our belief that the Company will be challenged to ramp up cash flow generation to a level sufficient to service the capital structure." These risks are only modestly offset by liquidity enhancements to facilitate a prolonged ramp-up period, including the prefunded interest reserve on the first-lien debt, and S&P's view that the Las Vegas Strip should realize at least modest growth in gaming revenues over the next few years, as well as continued moderate growth in convention business. COLONIAL BANCGROUP: FDIC Has No Setoff Rights on BB&T Accounts -------------------------------------------------------------- Bankruptcy Judge Dwight H. Williams, Jr., denied a renewed motion by The Federal Deposit Insurance Corporation, in its capacity as receiver for Colonial Bank, Montgomery, Alabama, for relief from the automatic stay, to the extent deemed applicable, to permit the FDIC to exercise alleged setoff rights against the balances held in certain demand deposit accounts of The Colonial BancGroup, Inc., at Branch Banking and Trust Company. The FDIC-Receiver initially filed a motion for relief from the automatic stay on October 5, 2009. The motion requested permission to offset the balances in the Debtor's accounts against the FDIC's claim under 11 U.S.C. Sec. 365(o). Section 365(o) requires a Chapter 11 debtor to cure any deficit under a commitment to maintain the capital of Colonial Bank. The FDIC also asserted a security interest in the Debtor's accounts and contended that the Debtor's inability to reorganize constituted grounds for the lifting of the stay. The FDIC later amended the motion to clarify that its setoff rights were not limited to its claim under 365(o) but extended to all of the claims set forth in the FDIC's proof of claim filed with the court. By stipulation of the parties, the Bankruptcy Court ruled first on the FDIC's claim under Sec. 365(o). The Court denied the claim, rendering the setoff issue moot as to that claim. The FDIC filed a renewed motion for relief from the automatic stay on September 27, 2010, asserting rights of setoff with respect to its other claims. The renewed motion does not assert a security interest in the accounts, and the motion does not assert inability to reorganize as a basis for relief from the stay. In his Memorandum Opinion dated January 24, 2011, Judge Williams held that the FDIC has not shown the requirements for the exercise of setoff against the Debtor's deposit balances. The debt is not a mutual debt because the FDIC has no liability to the Debtor on the accounts. Further, if the FDIC were to incur liability on the accounts at this time, it would constitute a postpetition debt ineligible for setoff under 11 U.S.C. Sec. 553. A copy of Judge William's ruling is available at http://is.gd/LnVg79from Leagle.com. FDIC to Appeal Earlier Ruling Joseph Checkler, writing for Dow Jones Newswires, reports that the FDIC is renewing its bid for a nearly $1 billion priority claim in Colonial BancGroup's Chapter 11 case, arguing a bankruptcy judge erred last year when he ruled in favor of Colonial. The FDIC had argued that Colonial Bank's former parent owed it $909 million, an amount equal to the gap between how much capital its banking subsidiary was required to have and what it actually had on hand when it was seized by regulators in August 2009. According to Dow Jones, in a briefing to the U.S. District Court for the Middle District of Alabama late last week, the FDIC said Bankruptcy Judge Williams "erroneously" read into a statute and his rulings "are based on a misreading of the 'plain language' that was actually used in the debtor's commitments." The FDIC said it was entitled to a nearly $1 billion priority claim in the parent's bankruptcy case. According to Dow Jones, if successful, Colonial's bankruptcy lawyers had successfully argued last year, the holding company would have been forced to liquidate and creditors owed some $400 million would have been out of the money. Dow Jones recounts that Judge Williams had held that the "unambiguous language" of agreements between the parent and federal and state bank regulators indicated the holding company "did not make a commitment to maintain the capital of Colonial Bank." Feb. 3 Confirmation Hearing Colonial BancGroup is scheduled to present its Plan of Liquidation for confirmation at a hearing on February 3, 2011, after it obtained approval from the Bankruptcy Court of the explanatory disclosure statement. As reported in the December 15, 2010 edition of the Troubled Company Reporter, according to the Disclosure Statement, the Plan calls for the liquidation of all assets of the Debtor and the distribution of the proceeds to the Debtor's creditors. After the Plan is confirmed by the Bankruptcy Court, the Plan Trustee will be authorized to continue the task begun by the Debtor of pursuing, collecting and liquidating the remaining assets of the Debtor. In addition to liquidating the Debtor's Core Assets, the Plan Trustee will investigate and evaluate any claims the Debtor may have against insiders, affiliated companies and independent third parties, the pursuit of which may supplement the proceeds recovered by liquidating the Debtor's core assets. The proceeds of this liquidation effort will be used to pay the outstanding claims against the Debtor in accordance with the classifications and order of priority of these claims under the Plan. The Debtor intends to pay all claims in full. However, the Debtor does not anticipate any distribution to Classes G (Statutorily Subordinated Claims) and H (Equity Interests). If there are insufficient funds to pay a certain class in full, available funds will be distributed pro rata among the members of that class in accordance with the amount of the allowed claims in that class. Reserves will be established for the payment of disputed claims to the extent required in the Plan. About The Colonial BancGroup Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc., (NYSE: CNB) owned Colonial Bank, N.A, its banking subsidiary. Colonial Bank -- http://www.colonialbank.com/-- operated 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. On August 14, 2009, Colonial Bank was seized by regulators and the Federal Deposit Insurance Corporation was named receiver. The FDIC sold most of the assets to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion in assets and assumed $20 billion in deposits of the Bank. The Colonial BancGroup filed for Chapter 11 bankruptcy protection (Bankr. M.D. Ala. Case No. 09-32303) on August 25, 2009. W. Clark Watson, Esq., at Balch & Bingham LLP, and Rufus T. Dorsey IV, Esq., at Parker Hudson Rainer & Dobbs LLP, assist the Debtor. The Debtor disclosed $45 million in total assets and $380 million in total liabilities as of the Petition Date. In September 2009, an Official Committee of Unsecured Creditors was formed consisting of three members, Fine Geddie & Associates, The Bank of New York Trust Company, N.A., and U.S. Bank National Association. Burr & Forman LLP and Schulte Roth & Zabel LLP serve as co-counsel for the Committee. Colonial Brokerage, a wholly owned subsidiary of Colonial BancGroup, filed for Chapter 7 protection with the U.S. Bankruptcy Court in the Middle District of Alabama in June 2010. Susan S. DePaola serves as Chapter 7 trustee. CORNERSTONE CROSSING: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Cornerstone Crossing, LLC c/o John F. Battaile Altfeld & Battaile P.C. 250 N. Meyer Avenue Tucson, AZ 85701 Tel: (520) 622-7733 Bankruptcy Case No.: 11-01934 Chapter 11 Petition Date: January 25, 2011 Court: U.S. Bankruptcy Court District of Arizona (Tucson) Judge: James M. Marlar Debtor's Counsel: John F. Battaile, Esq. ALTFELD & BATTAILE P.C. 250 N. Meyer Avenue Tucson, AZ 85701 Tel: (520) 622-7733 Fax: (520) 622-7967 E-mail: jfbattaile@abazlaw.co Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/azb11-01934.pdf The petition was signed by Richard J. Orosel, managing member. COSINE COMMUNICATIONS: Withdraws POS AM to Form S-8 --------------------------------------------------- On January 24, 2011, Terry R. Gibson, chief executive officer at CoSine Communications, Inc., sent a letter to the Securities and Exchange Commission requesting that the company's Post-Effective Amendment No. 1 to Form S-8 Registration Statements, originally filed with the Securities and Exchange Commission on January 20, 2011, be withdrawn. The Company requested withdrawal of the Post-Effective Amendments because of a filing error relating to the EDGAR coding. The Post- Effective Amendment was incorrectly coded and filed as an "POS AM," whereas the Company intended the Post-Effective Amendment to be filed with the Commission with the code "S-8 POS." The Company expects to promptly file the Post-Effective Amendment with the code "S-8 POS." No securities were sold pursuant to the Post- Effective Amendment. On the same day, Cosine Communications filed with the SEC Forms S-8 POS relating to the deregistration of these securities: (a) 25,535,979 shares of CoSine Communications, Inc. common stock, par value $0.0001 per share, for the CoSine Communications, Inc. 1997 Stock Plan, the CoSine Communications, Inc. 2000 Stock Plan, the CoSine Communications, Inc. 2000 Employee Stock Purchase Plan and the CoSine Communications 2000 Director Option Plan; (b) 17,225,190 shares of Common Stock the CoSine Communications, Inc. 2002 Stock Plan, the CoSine Communications, Inc. 2000 Stock Plan, the CoSine Communications, Inc. 2000 Employee Stock Purchase Plan and the CoSine Communications 2000 Director Option Plan. About Cosine Communications Los Gatos, California-based CoSine Communications, Inc. (Pink Sheets:COSN.pk) was founded in 1998 as a global telecommunications equipment supplier. As of December 31, 2006, CoSine had ceased all its product and customer service related operations. CoSine's strategic plan is to redeploy its existing resources to identify and acquire, or invest in, one or more operating businesses with the potential for generating taxable income or capital gains. The Company's balance sheet at Sept. 30, 2010, showed $21.84 million in total assets, $189.0 thousand in liabilities, all current, and stockholders' equity of $21.65 million. Burr Pilger Mayer Inc. of San Jose, California, which audited the Company's annual report for 2009, said that that the CoSine Communications' actions in September 2004 in connection with its ongoing evaluation of strategic alternatives to terminate most of its employees and discontinue production activities in an effort to conserve cash, raise substantial doubt about its ability to continue as a going concern. COUNTRYWIDE FIN'L: MBS Buyers Sue for "Massive Fraud" ----------------------------------------------------- Reuters' Jonathan Stempel reports that Bank of America Corp's Countrywide mortgage unit has been sued by investors claiming they were victimized in a "massive fraud" when they bought mortgage- backed securities from 2005 to 2007 that they thought were "conservative, low-risk investments." The lawsuit was filed on Monday in a New York state court by 12 plaintiffs including the TIAA-CREF fund family, New York Life Insurance Co. and Dexia Holdings Inc. Other defendants include several former Countrywide officials, including longtime Chief Executive Angelo Mozilo. According to Reuters, the investors said Countrywide misrepresented the securities' safety in offering documents and elsewhere, and compromised their investments by ignoring its underwriting guidelines. As a result, the complaint said, most of the securities now carry "junk" credit ratings rather than the "triple-A" ratings they once had, resulting in "significant losses." The plaintiffs want compensatory and punitive damages. According to Reuters, Bank of America spokeswoman Shirley Norton said in a statement that the lender would review the lawsuit, "but on first glance these sound like large, sophisticated investors who now want to blame someone for the fact that the declining economy caused their investment to lose value." The case is Dexia Holdings Inc. et al. v. Countrywide Financial Corp et al., No. 650185/2011 (N.Y. State Supr. Ct., New York Cty.). About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- originated, purchased, securitized, sold, and serviced residential and commercial loans. In mid-2008, Bank of America completed its purchase of Countrywide for $2.5 billion. The mortgage lender was originally priced at $4 billion, but the purchase price eventually was whittled down to $2.5 billion based on BofA's stock prices that fell over 40% since the time it agreed to buy the ailing lender. DANA HOLDING: S&P Lifts Corp. Credit Rating to BB-, Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on auto supplier Dana Holding Corp. to 'BB-' from 'B+'. The outlook is stable. S&P also assigned S&P's 'BB-' issue-level rating and '3' recovery rating on Dana's proposed $700 million senior unsecured notes. S&P expect the notes to be issued in two tranches with maturity dates of 2019 and 2021. "The upgrade on Dana reflects our reassessment of the Company's financial risk profile to significant from aggressive, given the Company's improved credit measures in the past nine months," said Standard & Poor's credit analyst Nancy Messer. "Our view of the financial risk profile is based on the Company's recent track record of free cash flow generation, which S&P believe is sustainable, and the lack of any significant near-term debt maturities, after the repayment of its term loan. Furthermore, S&P believe the Company's performance and financial policy will enable it to sustain these improved credit measures." S&P also believes the recovery in light-vehicle production in North America and Europe will continue, although moderately, and that the Company can continue its current profitability because of tighter cost controls, enhanced operational efficiency, and ongoing expansion in the North American commercial-vehicle market. S&P estimates that Dana may have achieved adjusted total debt to EBITDA of less than 3.5x and adjusted funds from operations (FFO) to total debt of more than 20% at year-end 2010. In addition, the Company's proposed transaction -- issuance of $700 million in unsecured notes to pay down its secured term loan -- will improve liquidity by eliminating certain constraining covenants and extending maturities. "We could raise the ratings if we believed Dana could increase EBITDA such that adjusted leverage was comfortably lower than 2.5x and FFO to total debt was 30% or better," Ms. Messer continued. "This could occur if, for example, the Company's revenues rose more than 10% in 2011 and EBITDA margins (including our adjustments) were more than 10%. For example, we calculate that Dana could achieve 2.5x adjusted leverage if it reaches and sustains adjusted EBITDA of at least $650 million (excluding equity earnings in affiliates) with no change in debt after completion of the proposed transaction. We would also need to believe that any use of its large cash balances would be consistent with our expectations for a higher rating, indicating that Dana is maintaining a financial policy consistent with that during the recent post-bankruptcy period." S&P could lower the ratings if it believed auto industry markets would not improve as S&P assumes or if the economic recovery falters, thereby preventing the Company from achieving the financial assumptions that S&P expect for the 'BB-' rating in 2011, pushing the Company's leverage above 3.5x. This could occur, for instance, if revenue was flat and EBITDA margins fell below 8%. Or, S&P could lower the ratings if free cash generated after capital spending dropped below $100 million for any 12-month period in 2011, or if the Company were to pursue a material debt- financed acquisition or large dividend payouts. DEL MONTE: Moody's Assigns '(P)B1' Corporate on Planned Buyout -------------------------------------------------------------- Moody's Investors Service has assigned a provisional corporate family rating of (P)B1 to Del Monte Foods Company, an intermediate holding company and parent of Del Monte Corporation, and assigned provisional ratings of (P)Ba3 to its proposed $2.5 billion senior secured term loan and (P)B3 to $1.5 billion in proposed senior secured notes, to be issued in connection with the planned leveraged buyout of publicly-traded Del Monte, by an investor group led by Kohlberg Kravis Roberts & Co. L.P. The new ratings will be assigned a stable outlook. The existing ratings on $1.27 billion of debt at Del Monte, a wholly owned subsidiary of DelMonte HoldCo, will remain under review for possible downgrade until the transaction has closed, immediately after which the ratings on existing Del Monte debt instruments will be withdrawn. The provisional debt ratings of DelMonte HoldCo reflect the high financial leverage that will result from the planned LBO of Del Monte, balanced against the stable operating-level performance anticipated at Del Monte with improving product mix. Del Monte's credit metrics had been trending positively in recent years-Debt/ EBITDA recently fell below three times compared to over five times a few years ago-reflecting a more focused portfolio following the Starkist canned tuna sale in 2009 that accelerated the company's strategy to shift its sales mix way from consumer foods and toward the higher margin pet food business. Moody's estimates that at closing of the LBO transaction, proforma debt to EBITDA will approximate 6.7 times, but could decline to below 6 times by the end of fiscal 2012. "Del Monte's core operating performance should remain stable in the intermediate term, with the consumer foods business providing stable cash flows and the pet food business driving margin expansion and earnings growth," commented Moody's senior credit officer, Brian Weddington. "Barring acquisitions, this should provide for steady reduction in leverage over time," added Weddington. The LBO transaction valued at $5.3 billion enterprise value will be financed with an $1.6 billion equity investment from the sponsors, and $4.75 billion of new debt instruments issued by Del Monte Foods Company consisting of a $750 million five-year asset- backed revolving loan facility, a $2.5 billion seven-year senior secured term loan, and $1.5 billion of senior unsecured notes with tenors of up to ten years. The transaction is expected to close during Del Monte's fourth fiscal quarter ending this April. Ratings assigned: Del Monte Foods Company: -- Corporate family rating at (P)B1; -- Probability of default rating at (P)B1; -- $2.5 billion proposed senior secured term loan due 2018 at (P)Ba3 (LGD3) LGD% at 32; -- $1.5 billion of proposed senior unsecured notes due up to 2021 at (P)B3 (LGD5), LGD% 85. The senior secured term loan is secured by a first priority lien on substantially all the assets of Del Monte Foods Company and each guarantor, and a second priority lien on the ABL collateral. All the Del Monte Foods Company debt will be guaranteed by all direct and indirect subsidiaries, including Del Monte Corporation. The instrument ratings reflect both the overall probability of default and an average mean family loss given default assessment of 50%, in line with Moody's LGD Methodology. Moody's believes that leverage and event risk will likely remain high while Del Monte is under the control of a sponsor group, which limits the possibility of a ratings upgrade in the foreseeable future. However, Del Monte HoldCo's ratings could be considered for an upgrade if the company maintains stable operating performance such that Debt to EBITDA was sustained below 5.0 times and Retained Cash Flow to Net Debt above 11%. A rating downgrade could be caused by a significant deterioration in operating performance or a major acquisition or unfavorable change in capital structure. Quantitatively, downward pressure would build if Debt to EBITDA exceeded 7.0 times, or Retained Cash Flow to Net Debt fell below 10%. For more information on Del Monte, refer to http://www.Moodys.com/ The most recent rating action on Del Monte was on November 26, 2010, when Moody's placed the ratings of Del Monte Foods Corporation on review for possible downgrade following the company's announcement that it had entered an agreement to sell itself to an investor group led by KKR that also includes Vestar Capital Partners and Centerview Partners for a total of $5.3 billion. The principal methodologies used in this rating were Global Packaged Goods Industry published in July 2009, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in San Francisco, California, Del Monte Corporation is one of the largest producers, distributors and marketers of premium quality branded food and pet products for the U.S. retail market. Revenues for the last twelve months ended October 31, 2010 were approximately $3.7 billion. DENNY HECKER: Says Former Lawyer & Bankruptcy Trustee Lied ---------------------------------------------------------- John Welbes, writing for the St. Paul Pioneer Press, reports that Denny Hecker has accused his own former attorney, William Skolnick, and the Chapter 7 trustee overseeing his case of lying to the court. In a handwritten letter dated Jan. 17 to Bankruptcy Judge Robert Kressel, Mr. Hecker said Mr. Skolnick lied about where Mr. Hecker obtained $75,000 a year ago to secure the title to Mr. Hecker's Medina home. According to the report, Mr. Hecker said once the bankruptcy trustee, Randall Seaver, figured out Mr. Skolnick's alleged deceit about the source of the funds, Mr. Seaver held "the lies over (Skolnick's) head" to extract information from Mr. Hecker that ended up hurting his bankruptcy case. Mr. Hecker also accuses attorneys for Chrysler Financial, Mr. Hecker's biggest lender, of paying a former Hecker employee for e-mails that were used against him. The report notes Mr. Hecker, 58, is being held in the Sherburne County Jail, and is scheduled to be sentenced Feb. 11 on criminal fraud charges. The report says Mr. Hecker faces up to 10 years in prison after pleading guilty to bankruptcy fraud and conspiracy to commit wire fraud in September. The Pioneer Press says calls to Mr. Skolnick and Barbara May, Mr. Hecker's current bankruptcy attorney, weren't immediately returned Monday. About Denny Hecker Dennis E. Hecker owned and operated dozens of auto dealerships, car rental franchises, and other businesses until 2009. He filed a voluntary chapter 7 petition (Bankr. D. Minn. Case No. 09-50779) on June 4, 2009, after his auto empire collapsed into bankruptcy. Chrysler Financial filed a dischargeability action (Bankr. D. Minn. Adv. Pro. No. 09-5019) on July 8, 2009. Chrysler Financial alleged that $83 million of $350 million owed is nondischargeable under 11 U.S.C. Sec. 523(a) because Mr. Hecker allegedly obtained it through the use of false pretenses, false representations, fraud, defalcation, and embezzlement. The Honorable Robert J. Kressel granted Chrysler Financial's motion for sanctions and ordered $83 million of the judgment against Mr. Hecker, together with accrued interest, not dischargeable in the Chapter 7 bankruptcy case. Mr. Hecker has pleaded guilty to two fraud charges: concealing assets from the bankruptcy court and lying to get multimillion- dollar loans for his dealerships and leasing operation. DORA AJA: 1st Cir. BAP Upholds Chapter 7 Conversion --------------------------------------------------- WestLaw reports that the phrase "after notice and a hearing," as used in a bankruptcy statute authorizing the court to convert a Chapter 11 case for cause after notice and a hearing, 11 U.S.C.A. Sec. 1112(b), means notice that is appropriate under the circumstances. A bankruptcy court could reduce the notice period specified under Bankruptcy Rule 2002(a) based on the debtor's admitted failure to provide proof of insurance on estate property. In re Aja, ---B.R.----, 2011 WL 181743 (1st Cir. BAP (Mass.)). Proceeding pro se, Dora L. Aja filed a chapter 11 petition (Bankr. D. Mass. Case No. 09-21872) on Dec. 8, 2009. In January 2010, the United States Trustee moved to convert the case to chapter 7 on the grounds that the Debtor did not have required property insurance, and because she failed to open a debtor-in-possession account. The Honorable Joan N. Feeney initially set the Conversion Motion hearing for February 2010, but then, sua sponte, rescheduled the hearing for January 21, 2010. At the hearing on the Conversion Motion, the U.S. Trustee informed the bankruptcy judge that she notified the Debtor of the rescheduled hearing via telephone immediately after receiving the court's notice of the hearing date change. The court stated that it also had contacted the Debtor regarding the hearing date change. The Debtor did not appear at the hearing. The bankruptcy judge granted the Conversion Motion noting that the Debtor was using cash collateral without authority, had not provided evidence that required insurance was in place, and that there was no likelihood of rehabilitation, particularly given her mathematically incorrect operating report. The day after the hearing, the Debtor moved for reconsideration of the Conversion Order, on the ground that she had not received notice of the hearing. That same day, the bankruptcy judge denied the motion, saying that the Debtor had received timely telephonic notice of the hearing from the court, and failed to provide a credible reason for not appearing. In February 2010, the bankruptcy court held a hearing on two motions for relief from stay, and at the end of the hearing, the Debtor made an oral motion to "reconvert" her case. The bankruptcy court issued a bench order denying the motion, but did not formalize its decision in a written order. The Debtor filed a notice of appeal and a motion for reconsideration of the Conversion Order. The Bankruptcy Appellate Panel dismissed Ms. Aja's appeal, and a copy of the BAP's ruling is available at http://is.gd/sYDinIfrom Leagle.com. DUBAI GROUP: In Talks With Lenders for $6BB Debt Restructuring -------------------------------------------------------------- The Associated Press reports that Dubai Group said Tuesday it has begun talking with two sets of lenders separately in an effort to hammer out a $6 billion debt restructuring more efficiently. According to the AP, Dubai Group has a $1.5 billion Islamic loan coming due this year. A total of 24 banks from the Middle East, Europe and Asia were involved in that loan when it was launched in 2008, including local lender Noor Islamic Bank and the U.K.'s Royal Bank of Scotland Group PLC. A Dubai Group spokeswoman told The Associated Press that one negotiating committee is composed of secured creditors, which means their loans are backed by collateral, while the other is made up of partially secured and unsecured lenders. The spokeswoman said the committees were established in recent days and are in discussions with Dubai Group. Splitting the lenders into two blocs representing similar interests is meant to streamline the negotiations. The AP notes Dubai Group first acknowledged it was in debt talks with lenders in November, but gave no details, including the size of its liabilities. According to the AP, Noor and Royal Bank of Scotland are part of the six-member coordinating committee representing partially secured and unsecured lenders that was first made public by Bloomberg News. According to the AP, the Dubai Group spokeswoman confirmed the accuracy of the list, which also includes the UAE's Emirates NBD, Union National Bank, and al-Hilal Bank, as well as the Commercial Bank of Qatar. Nexgen, a division of France's Natixis SA, and Dubai-based Mashreqbank represent the secured creditors. The AP also relates a committee of seven core banks negotiated the broad terms of Dubai World's $24.9 billion restructuring, which eventually won support from the state conglomerate's more than 70 creditors in October. Dubai Group is part of a conglomerate known as Dubai Holding, which is personally controlled by the city-state's hereditary ruler, Sheik Mohammed bin Rashid Al Maktoum. Dubai Group owns property in the U.S. and has sizable stakes in several financial companies, including regional bank EFG-Hermes and Europe's Marfin Popular Bank. The AP relates that another division of Dubai Holding -- Dubai Holding Commercial Operations Group -- late in December refinanced a $555 million credit arrangement with three international banks into a five-year loan after months of negotiations. DYNEGY INC: Icahn Extends Tender Offer; No Rival Offers Received ---------------------------------------------------------------- Icahn Enterprises L.P. on Wednesday said its wholly owned subsidiary, IEH Merger Sub LLC, has extended the expiration date of its tender offer for all outstanding shares of common stock, including the associated rights, of Dynegy Inc., for $5.50 per share in cash, without interest and less any applicable withholding taxes, until 5:00 p.m., New York City time, on February 9, 2011, unless further extended or earlier terminated. The tender offer was previously scheduled to expire at 12:00 midnight, New York City time, on Tuesday, January 25, 2011. All other terms and conditions of the tender offer remain unchanged. On Tuesday, Dynegy said it did not receive any bona fide acquisition proposals prior to the expiration of its open strategic alternatives process on January 24, 2011. Goldman, Sachs & Co. and Greenhill & Co., LLC, which conducted the process at the direction of the Special Committee of Dynegy's Board of Directors, had contacted over 50 parties to determine whether they would be interested in exploring a transaction with Dynegy. After working with several of these parties, Dynegy received no such acquisition proposal. As reported by the Troubled Company Reporter, Seneca Capital has asked the Special Committee of the Board of Directors of Dynegy for limited waivers of Dynegy's Stockholder Protection Rights Agreement dated as of November 22, 2010 as amended, to permit Seneca (i) to work in concert with others for the purpose of acquiring additional Dynegy common stock at a price greater than $5.50 per share, and (ii) to acquire additional non-voting Beneficial Ownership of Dynegy common stock at a price that is greater than $5.50 per share. On December 15, 2010, Dynegy entered into an Agreement and Plan of Merger with affiliates of Icahn. On December 22, 2010, an affiliate of IEP commenced a tender offer to purchase all of the outstanding shares of Dynegy common stock for $5.50 per share in cash, or roughly $665 million. The only remaining regulatory approval necessary to satisfy the closing conditions of the IEP tender offer relates to the Federal Energy Regulatory Commission. A joint application filed by Dynegy and IEP is currently pending before FERC, and approval is expected to be forthcoming. On Tuesday, Dynegy said its Board -- in consultation with its independent financial and legal advisors and based upon the unanimous recommendation of the Special Committee comprised solely of non-management independent directors -- has unanimously determined that the tender offer is in the best interests of all Dynegy stockholders. The Dynegy Board unanimously recommends that Dynegy stockholders accept the tender offer and tender their Dynegy shares into the tender offer. American Stock Transfer & Trust Company, LLC, the depositary for the tender offer, has indicated that, as of midnight, New York City time, on January 25, 2011, 5,398,317 shares of Dynegy's common stock had been validly tendered and not withdrawn pursuant to the tender offer, representing 4.42% of the outstanding shares of Dynegy common stock. The Depositary for the tender offer is American Stock Transfer & Trust Company LLC, Reorganization Department, 6201 15th Avenue, Brooklyn, New York 11219. The Information Agent for the tender offer is Morrow & Co., LLC, 470 West Avenue, Stamford, CT 06902. The tender offer materials may be obtained at no charge by directing a request to Morrow & Co., LLC by mail at the address provided above or by calling toll-free (800) 607-0088 or (203) 658-9400, and may also be obtained at no charge at the Web site maintained by the SEC at http://www.sec.gov/ Additionally, any questions related to the tender offer may be directed to Morrow & Co., LLC at the mailing address or telephone numbers provided. Icahn Enterprises L.P. (NYSE: IEP), a master limited partnership, is a diversified holding company engaged in eight primary business segments: Investment Management, Automotive, Gaming, Railcar, Food Packaging, Metals, Real Estate and Home Fashion. 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. The Troubled Company Reporter has chronicled Dynegy's attempts to sell itself. In August 201, Dynegy struck a deal to be acquired by an affiliate of The Blackstone Group at $4.50 a share or roughly $4.7 billion. That offer was raised to $5.00 a share in November. Through Icahn and Seneca's efforts, shareholders thumbed down both offers. On December 22, 2010, an affiliate of IEP commenced a tender offer to purchase all of the outstanding shares of Dynegy common stock for $5.50 per share in cash, or roughly $665 million in the aggregate. Goldman, Sachs & Co. and Greenhill & Co., LLC are serving as financial advisors and Sullivan & Cromwell LLP is serving as legal counsel to Dynegy. * * * As reported by the Troubled Company Reporter on November 26, 2010, Fitch Ratings downgraded the ratings of Dynegy Inc. and its subsidiaries: Dynegy Inc. Issuer Default Rating to 'CCC' from 'B-'; Dynegy Holdings, Inc. IDR to 'CCC' from 'B-'; Secured bank credit facilities and notes to 'B+/RR1' from BB-/RR1; Senior unsecured to 'CCC/RR4' from 'B/RR3'; and Dynegy Capital Trust I preferred to 'C/RR6' from 'CCC/RR6'. The downgrade reflects Fitch's belief that the rejection of The Blackstone Group's bid to acquire Dynegy for $5/share will likely lead to another transaction and capital restructuring by Dynegy's management as activist stockholders seek to maximize shareholder values. The downgrade also reflects the underperformance of Dynegy's merchant generation operations. 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 action followed the expiration of the 40-day "go shop" period, according to Moody's, increasing the probability that Dynegy will be acquired by an affiliate of The Blackstone Group L.P.. 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. In December 2010, Moody's said its ratings and negative rating outlook for Dynegy, Inc., and its subsidiary, Dynegy Holdings, Inc (Caa1 Corporate Family Rating) will remain unchanged following announcement of the Icahn deal. EMIVEST AEROSPACE: Creditors' Committee Hirings Approved -------------------------------------------------------- The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware earlier this month approved the retention of Pachulski Stang Ziehl & Jones LLP as counsel to the Official Committee of Unsecured Creditors, nunc pro tunc to November 4, 2010, in the bankruptcy case of Emivest Aerospace Corporation. Judge Walrath also approved the Committee's retention of Deloitte Financial Services LLP as the panel's financial advisors, nunc pro tunc to November 15, 2010. Pursuant to Section 1102(a)(1) of the Bankruptcy Code, the U.S. Trustee for Region 3 on November 4 appointed three entities to the Committee of Unsecured Creditors in Emivest Aerospace's case: * Israel Aerospace Industries Ltd. Attn: Rafael Matalon Ramat Hagolan, Israel 12944 Tel: (972) 3-935-3343 Fax: (972) 3-935-8278 * Action Aviation Attn: Hamish Harding PO Box 211502 Dubai, United Arab Emirates Tel: (760) 793-1912 * Metalcraft Technologies, Inc. Attn: David J. Grant 526 North Aviation Way Cedar City, UT 84721 Tel: (435) 586-3871 Fax: (435) 586-0289 About Emivest Aerospace Emivest Aerospace Corporation -- http://www.sj30jet.com/-- is a U.S.-based aircraft manufacturing company and a subsidiary of Emirates Investment & Development PSC. Emivest Aerospace Corporation produces the SJ30 light jet. Emivest Aerospace Corporation filed for Chapter 11 protection on Oct. 20, 2010 (Bankr. D. Del. Case No. 10-13391). Emivest estimated assets and debts between $50 million and $100 million. Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, serves as counsel to the Debtor. EMIVEST AEROSPACE: Seeks More Time to Pursue Going-Concern Sale --------------------------------------------------------------- Emivest Aerospace Corporation asks the U.S. Bankruptcy Court for the District of Delaware to extend by 90 days the periods during which the Debtor has the exclusive right (i) to file a Chapter 11 plan, through and including May 18, 2011, and (ii) solicit acceptances of the plan, through and including July 17, 2011. According to Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, Emivest Aerospace is currently in the process of marketing its business with the hope of completing a going-concern sale of substantially all of its assets in the near term. These efforts require the full attention of the Debtor's personnel and legal and financial advisors, he tells the Court. Emivest Aerospace does not believe that, in the event of a successful sale, it will be able to negotiate with its various constituencies and to formulate a Chapter 11 plan within the current exclusivity time frame. The requested extension of the exclusivity periods is appropriate and will not cause undue delay, Mr. Dehney asserts. About Emivest Aerospace Emivest Aerospace Corporation -- http://www.sj30jet.com/-- is a U.S.-based aircraft manufacturing company and a subsidiary of Emirates Investment & Development PSC. Emivest Aerospace Corporation produces the SJ30 light jet. Emivest Aerospace Corporation filed for Chapter 11 protection on Oct. 20, 2010 (Bankr. D. Del. Case No. 10-13391). Emivest estimated assets and debts between $50 million and $100 million. Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, serves as counsel to the Debtor. The Official Committee of Unsecured Creditors has tapped Pachulski Stang Ziehl & Jones LLP as counsel and Deloitte Financial Services LLP as financial advisors. ENERGY FUTURE: Amends Prospectus for $1.06-Bil. Notes Offering -------------------------------------------------------------- On January 24, 2011, Energy Future Holdings Corp. filed with the Securities and Exchange Commission an amended Form S-1 relating to its plans to issue $1,060,757,000 10.000% Senior Secured Notes due 2020. The Company amended the registration statement to delay its effective date until the Company shall file a further amendment which specifically states that the registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Interest on the 10.000% Senior Secured Notes due 2020 is payable on January 15 and July 15 of each year. The notes accrue interest at the rate of 10.000% per annum. The notes will mature on January 15, 2020. EFH Corp. may redeem any of the notes beginning on January 15, 2015. EFH Corp. may also redeem any of the notes at any time prior to January 15, 2015 at a price equal to 100% of their principal amount, plus accrued and unpaid interest and a "make- whole" premium. In addition, before January 15, 2013, EFH Corp. may redeem up to 35% of the aggregate principal amount of the notes using the proceeds from certain equity offerings. The notes are senior obligations of EFH Corp. and rank equally in right of payment with all senior indebtedness of EFH Corp. The notes are effectively subordinated to any indebtedness of EFH Corp. secured by assets of EFH Corp. to the extent of the value of the assets securing such indebtedness and structurally subordinated to all indebtedness and other liabilities of EFH Corp.'s non-guarantor subsidiaries and any other unrestricted subsidiaries. The notes are senior in right of payment to any future subordinated indebtedness of EFH Corp. Energy Future Competitive Holdings Company and Energy Future Intermediate Holding Company LLC, direct, wholly owned subsidiaries of EFH Corp., jointly and severally guarantee the notes. The guarantee from EFIH is secured, equally and ratably with certain outstanding indebtedness of EFH Corp. and EFIH, by the pledge of all membership interests and other investments EFIH owns or holds in Oncor Electric Delivery Holdings Company LLC or any of Oncor Holdings' subsidiaries. The guarantee from EFCH is unsecured. The guarantees are senior obligations of each guarantor and rank equally in right of payment with all existing and future senior indebtedness of each guarantor. The guarantee from EFIH is effectively senior to all unsecured indebtedness of EFIH to the extent of the value of the Collateral. The guarantees are effectively subordinated to all secured indebtedness of each guarantor secured by assets other than the Collateral to the extent of the value of the assets securing such indebtedness, and are structurally subordinated to any existing and future indebtedness and liabilities of EFH Corp.'s subsidiaries that are not guarantors. A full-text copy of the prospectus is available for free at: http://ResearchArchives.com/t/s?7287 About Energy Future Energy Future Holdings Corp. is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leveraged buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. The Company's balance sheet at Sept. 30, 2010, showed $47.11 billion in total assets, $53.18 billion in total liabilities, and a stockholder's deficit of $6.07 billion. * * * In October 2010, Moody's Investors Service downgraded the Corporate Family Rating for Energy Future's to Caa2 from Caa1; downgraded EFH's Probability of Default Rating to Caa3 from Caa2 and affirmed the SGL-4 Speculative Grade Liquidity assessment. EFH's rating outlook remains negative. "The downgrade is triggered by the persistent environment of low natural gas and power commodity prices and low average heat rates, which collectively drag down EFH's current and expected cash flow generation. There is little evidence indicating a significant improvement to natural gas commodity prices, and as a result, EFH is likely to remain in financial distress," Moody's said. Energy Future carries a 'CCC' issuer default rating from Fitch Ratings. ENRON CORP: ECRC Files 25th Post-Confirmation Report ---------------------------------------------------- Enron Creditors Recovery Corp., formerly Enron Corp., and its reorganized debtor affiliates delivered to the U.S. Bankruptcy Court for the Southern District of New York, on January 18, 2011, their Twenty-fifth Post-Confirmation Status Report. A. Distributions John S. Delnero, Esq., at K&L Gates LLP, in Chicago, Illinois, relates that as of January 18, 2011, approximately $21,726,000,000 in Cash, PGE Common Stock and PGE Common Stock equivalents have been distributed to holders of Allowed Claims, including $267,000,000 of interest, capital gains and dividends. All Disputed Claims have been resolved and all reserves previously held in the Disputed Claims Reserve, including interest, dividends and gains have been released. Until that time as the Plan Administrator is successful in obtaining additional recoveries related to the litigation and collection efforts, there are no additional funds available for further distribution. As of January 18, 2011, the General Unsecured Creditors of Enron have received 52.5% return on allowed claim amounts compared to original estimates in the Disclosure Statement of 17.4% and the Creditors of Enron North America Corp have received 52.1% compared to original estimates in the Disclosure Statement of 20.1%. The combined rate of return for ENA Creditors who also hold an Enron Guaranty claim is 94.3%, excluding gains, interest and dividends. There are a limited number of pending litigation and collection matters, which may total approximately $150 million in value, that continue to affect the timing of the closure of the Enron bankruptcy case. The $150 million of value yet to be collected relates primarily to the Reorganized Debtors' share of the proceeds of litigation in which defendants previously received summary judgment in the United States District Court for the Southern District of New York, referred to as the "Bammel Litigation." On October 29, 2010, the Second Circuit Court of Appeals vacated summary judgment for defendants with respect to plaintiffs' non-declaratory claims and defendants' tort based counterclaims on the grounds that those claims should have been adjudicated in Texas and affirmed in all other respects. On January 5, 2011, the Second Circuit Court of Appeals denied each parties' petition for rehearing and rehearing en banc. The District Court has not received or filed the Mandate from the Second Circuit Court of Appeal. In addition, the Reorganized Debtors are currently litigating on the District Court the appeal on the denial by the Bankruptcy Court of a motion filed by National City Bank which would require the payment of certain additional monies in the approximate amount of $8.6 million to creditors holding the Allowed ETS Debenture Claim under an agreement which NCB purports to provide most favored nations status in these particular circumstances which the Reorganized Debtors have opposed. The Plan Administrator made a distribution on November 1, 2010, of its currently available funds in the approximate amount of $40 million. B. Claims Resolution Process More than 25,000 proofs of claim were filed against the Debtors. The Reorganized Debtors and, prior to the Effective Date, the Debtors, have worked diligently to review, reconcile, and resolve these claims. In the third quarter of 2008, all Disputed Claims were resolved. Of the more than 25,000 proofs of claim filed, approximately 5,653 have been ordered allowed and approximately 2,333 have been allowed as filed. The remaining filed claims have been expunged, withdrawn, subordinated, or otherwise resolved. C. Settlements and Recoveries The Reorganized Debtors collected approximately $2,171,000 since the Twenty-Fourth Post-Confirmation Status Report. These amounts were primarily attributable to settlements and the return of other deposits belonging to the Reorganized Debtors. D. Other Activities The Reorganized Debtors continue to oversee additional various Enron activities including: (a) Document Administration and Disposal. The Reorganized Debtors have completed their document destruction efforts in accordance with numerous orders entered by the Bankruptcy Court and an order entered by the District Court for the Southern District of Texas. As of January 1, 2010, all of the remaining 43,000 boxes eligible for destruction and all electronic storage devices have been destroyed. Approximately 2,600 boxes have been sent to long-term storage in accordance with regulatory requirements, and the Reorganized Debtors have created electronic tape media to store the Litigation Document Library. (b) Dissolution of Corporate Entities. There are three remaining entities, of which one is a Debtor and two are Post-Final Distribution Trusts. In conjunction with the dissolution of the remaining corporate entities, Enron Dissolution Corp., a Delaware corporation, was formed solely for the purposes of winding up Enron and Enron Net Works, LLC. Enron and Enron Net Works, LLC were merged with and into Enron Dissolution Corp. effective on December 18, 2009. Enron Dissolution Corp. was thereafter dissolved effective on December 19, 2009. (c) Tax Return Compliance. For 2010, a federal return will be filed that includes two entities, one of which will be filed as final for the year. There is also one foreign entity with a filing obligation in the federal tax return. There are less than five state tax returns remaining. (d) Resolution of Outstanding Litigation. Nineteen cases remain pending. Since the filing of the Twenty-Fourth Post-Confirmation Status Report, on November 2, 2010, the Supreme Court denied Writ of Certiorari in an appeal filed by Bernard H. Glatzer of a Bankruptcy Court order which disallowed his bankruptcy claims. The Second Circuit Court of Appeals had previously dismissed his appeal on grounds that "it lacks an arguable basis in law or fact." On April 29, 2010, the Second Circuit Court of Appeals' Mandate was filed in the District Court and the case is closed. (e) On January 13, 2011, Enron received a letter forwarding a Directive and Notice to Insurers from the New Jersey Department of Environmental Protection. In the Directive, the NJDEP asserts that Garden State Paper Company, LLC and Enron North America Corp. are responsible parties for certain contamination alleged to exist at a site formerly occupied by the predecessor to Garden State Paper Company, LLC. Enron is investigating the matters raised in the Directive and its defenses to any potential liability, and Enron's counsel responded to the Directive on January 14, 2011, requesting the withdrawal of the Directive noting that the NJDEP was aware of the potential liabilities identified in the Directive prior to the claims bar date and as a result the NJDEP should have filed any proofs of claim by the claims bar date. (f) The Reorganized Debtors continue to be sponsors of pre- petition benefit plans which are entitled to receive distributions from the settlement of certain class actions securities cases, Tittle, et al. v. Enron Corporation, et al. and Newby, et al. v. Enron Corporation, et al., related to the Enron estate. The Reorganized Debtors are working to transition the responsibility for the administration of the benefit plans and the associated distribution process to independent third parties to allow for the closure at the appropriate time of the Enron Case. The timing of the distribution of class action settlement monies to the benefit plans is uncertain and the Reorganized Debtors lack control over such distribution to those plans. Moreover, the Reorganized Debtors continue to perform the necessary accounting, control and reporting work required to effect closure of the Case promptly. Two remaining headcount and engaged professional firms (a) support litigation, (b) handle accounting, tax, cash management and reporting for the three remaining entities, (c) calculate and control creditor distributions, (d) perform claims management, (e) complete disposition of remaining litigation (f) oversee wind-up of employee matters and benefit plans, and (g) oversee IT and corporate services providers and non-litigation matters. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures that caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors won confirmation of their Plan in July 2004, and the Plan was declared effective on November 17, 2004. After approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre- bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. ENRON CORP: ECRC Files Notice of Distributions as of November ------------------------------------------------------------- John S. Delnero, Esq., at K&L Gates LLP, in Chicago, Illinois, attorney for Enron Creditors Recovery Corp., formerly Enron Corp., and its reorganized debtor affiliates, relates that on November 1, 2010, the Reorganized Debtors, by and through their Disbursing Agent, made distributions to holders of allowed claims in accordance with Section 32.1 of the Supplemental Modified Fifth Amended Joint Plan of Affiliated Debtors dated July 2, 2004. A schedule, which reflects the current and cumulative distributions made or to be made through November 2010 to holders of Allowed General Unsecured Claims and Allowed Guaranty Claims, on a class-by-class basis and are presented as pre-tax withholding amounts on a current and cumulative basis, is available for free at: http://bankrupt.com/misc/Enron_NovDistSchedA.pdf A schedule, which reflects the reconciliation of distribution data for Allowed General Unsecured Claims and Allowed Guaranty Claims through November 2010, to distribution data for Allowed General Unsecured Claims and Allowed Guaranty Claims through October 2009, is available for free at: http://bankrupt.com/misc/Enron_NovDistSchedB.pdf A schedule, which reflects cumulative distributions made or to be made through November 2010 to a hypothetical creditor holding an Allowed General Unsecured Claim or Allowed Guaranty Claim in the amount of $1,000,000, on a class-by-class basis, and are presented as pre-tax withholding amounts, is available for free at http://bankrupt.com/misc/Enron_NovDistSchedC.pdf About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures that caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors won confirmation of their Plan in July 2004, and the Plan was declared effective on November 17, 2004. After approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre- bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. ENRON CORP: Regents Wins OK to Reject Claims Filed After Oct. 12 ---------------------------------------------------------------- Judge Melinda Harmon of the U.S. District Court for the Southern District of Texas granted the motion of The Regents of the University of California to reject any claims submitted after October 12, 2010. As previously reported, The Regents asked the Court to reject the late-filed claims saying that it is preparing to do one final, large distribution of Enron settlement funds to eligible claimants who have submitted valid Proof of Claim forms. Judge Harmon, however, extended the claims bar date to November 19, 2010. The judge approved the acceptance for payment of late but otherwise valid claims submitted on or before November 19, 2010. No claim submitted after November 19, 2010, will be accepted for processing or payment. The Regents told the Court it is preparing to do one final, large distribution of Enron settlement funds to eligible claimants who have submitted valid Proof of Claim forms. According to the Regents, this distribution should occur sometime in December 2010. The Regents added that 518 late claims that generate a Recognized Claim were submitted after the current December 1, 2009 deadline. The Regents relates that Gilardi & Co. LLC is processing these claims and if all of them are valid they will have a Recognized Claim of $118,440,892 in the aggregate. The Regents requests that to the extent these claims are valid they be approved and included in the final distribution. However, in order to bring the claims and distribution process to a close, the Regents asks the Court to order that no claims submitted after October 12, 2010 be accepted for any reason. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures that caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors won confirmation of their Plan in July 2004, and the Plan was declared effective on November 17, 2004. After approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre- bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. FKF MADISON: Developer Files Lawsuit Against Rival Investor ----------------------------------------------------------- The developer behind Manhattan's One Madison Park condominium filed a lawsuit against his rival in the battle for who will lead the stalled development out of Chapter 11 protection, Dow Jones' DBR Small Cap reports. As reported in the Troubled Company Reporter, in December, lead developer Ira Shapiro proposed a restructuring plan in which developer Ian Bruce Eichner would provide $40 million in investments toward completing the project. Mr. Shapiro's rival, Monaco-based investor Cevdet Caner, has told the Delaware Bankruptcy Court this month that he was prepared to file his own plan -- which is backed by HFZ Capital Group -- and bring in millions of needed investment to restart the One Madison Park condominium project. FKF Madison Park Group Owner, LLC, filed for Chapter 11 bankruptcy protection on June 8, 2010 (Bankr. D. Del. Case No. 10-11867). FKF owns the One Madison Park condominium tower in New York City. One Madison Park project came to halt in February 2010 when iStar Financial Inc., the chief financier for the project, moved to foreclose on it. The high-profile condominium project, a 50-story tower was developed by Ira Shapiro and Marc Jacobs. GENERAL MOTORS: NCR Corp. Files Lawsuit vs. Old GM for $2.2MM ------------------------------------------------------------- NCR Corporation filed with the U.S. Bankruptcy Court for the Southern District of New York a complaint against Motors Liquidation Company seeking a declaratory judgment that about $2.2 million in funds are not property of the bankruptcy estate. NCR and the Debtor have each been identified as potentially responsible parties, alleged to have shipped wastes, including hazardous substances, to a National Priorities List site named the North Sanitary Landfill Superfund Site also known as the Valleycrest Landfill in Dayton, Ohio. Since that time, both NCR and the Debtor have participated in and contributed financially to the investigation, removal, and remediation of hazardous substances at the Site. Prior to August 20, 2007, NCR paid more than its share of the costs associated with particular aspects of the cleanup of the Site, Matthew A. Hamermesh, Esq., at Hangley Aronchick Segal & Pudlin, in Philadelphia, Pennsylvania -- mhamermesh@hangley.com -- tells Judge Gerber. On November 15, 2007, the Debtor and NCR entered into a settlement agreement whereby they, among other things, allocated between themselves their shares of the costs associated with cleanup of the Site, including both prospective costs and costs incurred for portions of the cleanup already concluded. The parties sought and obtained approval of the Settlement Agreement from the U.S. District Court for the Southern District of Ohio, in which litigation over the allocation of costs for the Valleycrest clean-up was pending. On November 21, 2007, Judge Michael R. Merz of the District Court also entered a Judgment, Order, and Decree embodying the major terms of the Settlement Agreement. The District Court JOD was never challenged, appealed, or set aside and remains in effect, Mr. Hamermesh asserts. The District Court JOD also denominated the total amount of NCR's overpayment, which then remained in the possession of the Debtor, as "NCR's Total Overage." As of August 20, 2007, the amount of NCR's Total Overage was $1,820,260, Mr. Hamermesh discloses. The District Court JOD also provided that the Debtor would use NCR's Total Overage to discharge NCR's liabilities at the Site as they became due. More importantly, the District Court JOD ruled that the Debtor "will hold on behalf of NCR, NCR's Total Overage, and will pay interest thereon to NCR; NCR will continue to own NCR's Total Overage," he points out. Essentially, the Settlement Agreement and the District Court JOD established the Debtor as a trustee for the benefit of NCR with regard to NCR's Total Overage, whether as an express trustee or as a constructive trustee, Mr. Hamermesh asserts. The Debtor has acknowledged and pledged to take no action inconsistent with, NCR's beneficial ownership of NCR's Total Overage or either component thereof, he relates. As of September 1, 2010, NCR's Total Overage totaled $2,265,858, Mr. Hamermesh discloses. From November 15, 2007 to June 1, 2009, the Debtor had cash on hand exceeding $2,265,858, he says. He stresses that the Settlement Agreement expressed the clear intent of the Debtor and NCR that the Settlement Agreement would not be modified by the subsequent bankruptcy of either party. Funds that the debtor holds in trust, whether express or constructive, are not property of the bankruptcy estate, he insists. By the complaint, NCR asks the Bankruptcy Court to: (A) declare, pursuant to Rule 7001(2) and (9) of the Federal Rules of Bankruptcy Procedure, that: -- the Debtor holds the NCR Total Overage in trust for NCR; -- the NCR Total Overage may not be distributed to the Debtor's creditors as part of the Debtors' Amended Joint Chapter 11 Plan of Reorganization; and -- the NCR Total Overage must be turned over to NCR. (B) allow NCR an administrative expense in the amount of the NCR Total Overage under Section 503(b) of the Bankruptcy Code. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2010, GM had US$137.238 billion in total assets, US$106.522 billion in total liabilities, US$6.998 billion in preferred stock, $971 million in non-controlling interest, and US$23.718 billion in total equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Nummi Insists on Claims vs. GM for Breach --------------------------------------------------------- Toyota Motor Corporation brought an adversary complaint against Motors Liquidation Company seeking damages arising from costs incurred when MLC abandoned their New United Motors Manufacturing, Inc. (NUMMI) joint venture. NUMMI initiated a separate adversary proceeding against Old GM to assert breach of contract claims and a promissory estoppel claim against MLC for violating its contractual commitments and promises to NUMMI. NUMMI, a joint venture between Toyota and MLC, filed a complaint asserting claims against MLC of about $500 million, arising from, among other things, MLC's breach of contract of various agreements. Based on the same claims asserted by NUMMI, Toyota filed a complaint seeking more than $73 million from MLC. In response, Old GM asked Judge Robert E. Gerber to dismiss the separate adversary complaints filed by New United Motor Manufacturing, Inc., and Toyota Motor Corporation. Old GM contends that none of the agreements relied upon by Toyota and NUMMI require MLC to purchase any set amount of vehicles from NUMMI, to purchase vehicles in perpetuity or to compensate Toyota and NUMMI for any costs associated with MLC's determination not to continue purchasing vehicles from NUMMI. The contracts also do not require MLC to pay for NUMMI's wind down costs. On the contrary, the Agreements are clear that MLC had "no obligation to purchase any products" and that market demand and express written sales contracts for the products would determine MLC's purchases from NUMMI, says Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, in New York, counsel to Old GM. In response to the Motion to Dismiss, Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, counsel to NUMMI. argues that Old GM failed to meet its burden to show that NUMMI failed to state a claim upon which relief can be granted as required by Rule 12(b)(6) of the Federal Rules of Civil Procedure. According to Mr. Cieri, NUMMI's Complaint provides more than adequate factual allegations to satisfy Rule 8 of the Federal Rules of Civil Procedure. Indeed, the Complaint paints a detailed picture of MLC's commitments to NUMMI, MLC's breaches of these commitments and the injury NUMMI suffered as a direct result of MLC's actions, he insists. In contrast, MLC's Motion to Dismiss does not show that the Complaint is factually deficient, Mr. Cieri points out. In an attempt to defeat NUMMI's claims, MLC ignores NUMMI's allegations and attempts to substitute a new set of facts, he asserts. MLC also asked the Court to ignore or misconstrue the language in the relevant contracts and draw inferences in its favor, he notes. MLC's factual assertions, he avers, only raise the potential for contract ambiguity and disputes over ambiguous contracts cannot be resolved on a motion to dismiss. At best, MLC's legal and factual misdirection are not grounds to dismiss the Complaint, he insists. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2010, GM had US$137.238 billion in total assets, US$106.522 billion in total liabilities, US$6.998 billion in preferred stock, $971 million in non-controlling interest, and US$23.718 billion in total equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Old GM's Asbestos Liabilities Fixed at $625MM ------------------------------------------------------------- Motors Liquidation Company and its debtor affiliates, the Official Committee of Unsecured Creditors, the Official Committee of Unsecured Creditors Holding Asbestos Personal Injury Claims and Dean M. Trafelet, the Legal Representative for Future Claimants, jointly ask Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York to approve a stipulation fixing an "asbestos trust claim" pursuant to the Debtors' Amended Joint Chapter 11 Plan of Reorganization. The Plan defines Asbestos Trust Claim as the claim in the amount of the Debtors' aggregate liability for Asbestos Personal Injury Claims that either will be in an amount (i) mutually agreed upon by the Debtors, the Creditors' Committee, the Asbestos Claimants' Committee and the FCR; or (ii) ordered by the Court, which when fixed will be treated as an Allowed General Unsecured Claim in Class 3. The Plan also classifies Asbestos Personal Injury Claims in Class 5 and provides how those Claims will be treated under the Plan. On the effective date of the Plan, all Asbestos Personal Injury Claims will be channeled to an Asbestos Trust and all Asbestos Personal Injury Claims will be satisfied in accordance with the Asbestos Trust, the Asbestos Trust Distribution Procedures, and the Asbestos Trust Agreement. Counsel to the Debtors, Harvey R. Miller, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that as of the Petition Date, about 29,000 Asbestos Personal Injury Claims were filed against the Debtors. The Debtors' consolidated financial statements at that time reflected a reserve of about $650 million with respect to their probable liability for present and future Asbestos Personal Injury Claims over the next 10 years, adjusted for inflation and including defense costs, he relates. In order to quantify the Debtors' potential liability for present and future Asbestos Personal Injury Claims for purposes of a Chapter 11 plan and assist in interfacing and negotiating with other constituencies in these Chapter 11 cases, the Debtors, the Creditors' Committee, the Asbestos Claimants' Committee, and the Future Claimants' Representative retained their own asbestos estimation valuation experts. The Debtors also filed a motion for estimation of their aggregate liability for Asbestos Personal Injury Claims. The Court then entered an order establishing a schedule for the estimation proceeding, which, among other things, established a discovery schedule and set March 1, 2011, as the date on which it would commence a hearing to estimate the Debtors' aggregate liability for Asbestos Personal Injury Claims. Mr. Miller tells Judge Gerber that since the filing of the Estimation Motion, the Parties have been engaged in good-faith negotiations to resolve the amount of the Asbestos Trust Claim and the Estimation Motion. By this stipulation, the parties agree on these terms: (1) The Debtors' aggregate liability for the Asbestos Trust Claim under the Plan, will be fixed in the amount of $625,000,000, which Claim will not be subject to any defense, counterclaim, right of setoff, reduction, avoidance, disallowance or subordination. (2) The Asbestos Trust Claim will be the sole Claim that holders of Asbestos Personal Injury Claims in their capacities as such will have in these Chapter 11 cases. (3) Because the Plan and accompanying Disclosure Statement expressly provide that the Asbestos Trust Claim may be in an amount mutually agreed upon by the Parties, as provided in the Asbestos Liability Stipulation, no re-solicitation of votes to accept or reject the Plan is required. (4) The Plan will be amended to conform to the Asbestos Liability Stipulation, including these terms: * Conditions precedent to the Effective Date will include: The Asbestos Trust Assets will have been transferred to the Asbestos Trust. * Clause on the jurisdiction of Bankruptcy Court will be amended to provide that the resolution of Asbestos Personal Injury Claims and the forum in which that resolution will be determined will be governed in accordance with the Asbestos Trust Distributions Procedures and the Asbestos Trust Agreement. * The Plan will set forth that the Asbestos Claimants' Committee and the FCR will each continue to have standing and a right to be heard with respect to any appeal to which it is a party, and which remains pending as of the Effective Date, with respect to the confirmation order and with respect to any order issued in connection with the determination of the Asbestos Trust Claim. * The Plan will also provide that nothing contained in Section "12.9" entitled Modifications of the Plan will in any way override the provisions of the Asbestos Liability Stipulation. A full-text copy of the Plan modifications is available for free at: http://bankrupt.com/misc/GM_PropPlanModifications.pdf The Plan amendments will be implemented at the confirmation hearing, will not be deemed to adversely change the treatment of the Claim of any creditor or equity interest holder, and will not require any re- solicitation of votes to accept or reject the Plan. Likewise, any amendment to or modification of the Plan that materially and adversely affects the constituencies whose interests are represented by the Asbestos Claimants' Committee and the FCR in a manner that is discriminatory or inconsistent with the Parties' Stipulation will require the written consent of the Asbestos Claimants' Committee and the FCR. (5) The Asbestos Trust Agreement and the Asbestos Trust Distribution Procedures will be substantially in the forms annexed to the Plan and will not be amended or modified in any material way before the Effective Date without the written consent of the Asbestos Claimants' Committee and the FCR. Subsequent to the Effective Date, the Asbestos Trust Agreement and the Asbestos Trust Distribution Procedures may be amended or modified in accordance with their terms. (6) Unless there is a material adverse consequence to the Debtors or their estates, the initial distribution under the Plan with respect to the Asbestos Trust Claim will be made directly to the Asbestos Trust rather than through the GUC Trust or the Avoidance Action Trust. Any subsequent distributions under the Plan with respect to the Asbestos Trust Claim will be made in accordance with the Plan. (7) Upon Court approval of the Asbestos Liability Stipulation, the Estimation Motion will be marked off the Court's calendar as "resolved." Judge Gerber will consider approval of the Asbestos Liability Stipulation on February 10, 2011. Objections are due on the same date. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2010, GM had US$137.238 billion in total assets, US$106.522 billion in total liabilities, US$6.998 billion in preferred stock, $971 million in non-controlling interest, and US$23.718 billion in total equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Toyota Insists on Claims vs. GM for NUMMI --------------------------------------------------------- Toyota Motor Corporation brought an adversary complaint against Motors Liquidation Company seeking damages arising from costs incurred when MLC abandoned their New United Motors Manufacturing, Inc. (NUMMI) joint venture. NUMMI initiated a separate adversary proceeding against Old GM to assert breach of contract claims and a promissory estoppel claim against MLC for violating its contractual commitments and promises to NUMMI. NUMMI, a joint venture between Toyota and MLC, filed a complaint asserting claims against MLC of about $500 million, arising from, among other things, MLC's breach of contract of various agreements. Based on the same claims asserted by NUMMI, Toyota filed a complaint seeking more than $73 million from MLC. In response, Old GM asked Judge Robert E. Gerber to dismiss the separate adversary complaints filed by New United Motor Manufacturing, Inc., and Toyota Motor Corporation. Old GM contends that none of the agreements relied upon by Toyota and NUMMI require MLC to purchase any set amount of vehicles from NUMMI, to purchase vehicles in perpetuity or to compensate Toyota and NUMMI for any costs associated with MLC's determination not to continue purchasing vehicles from NUMMI. The contracts also do not require MLC to pay for NUMMI's wind down costs. On the contrary, the Agreements are clear that MLC had "no obligation to purchase any products" and that market demand and express written sales contracts for the products would determine MLC's purchases from NUMMI, says Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, in New York, counsel to Old GM. In response to the Motion for Dismissal, Toyota Motor Company alleges that Old GM seeks to rewrite their 25-year relationship by disingenuously relying on discreet and partial clauses in two contracts at issue in Toyota's Complaint -- the Vehicle Supply Agreement and the 2006 Memorandum of Understanding. Matthew J. Riopelle, Esq., at Foley & Lardner LLP, in New York, argues that MLC is wrong in asserting that the special relationship created as a result of the joint venture has "no bearing on the parties' legal rights and obligations" as MLC has reaped immense benefits from this unique joint venture. At its inception, New United Motors Manufacturing, Inc. was one of a kind, Mr. Riopelle stresses. Consistent with the special relationship among Toyota, MLC and NUMMI, these contracts provided a flexible standard for the manufacture, purchase and sale of vehicles to allow NUMMI to control its vast and complex supply network, he points out. However, despite purchasing almost two million vehicles from NUMMI and modifying the terms of its agreements with NUMMI to ensure NUMMI's viability, MLC now claims that the VSA and 2006 MOU do not require -- and never did require -- MLC to purchase on single vehicle from NUMMI, he complains. Mr. Riopelle also insists that Toyota has identified in the Complaint specific provisions of the VSA and 2006 MOU breached by MLC, in addition to the facts necessary to support Toyota's other claims. To the extent the VSA and 2006 MOU are ambiguous contracts, the interpretation of which cannot be resolved in the context of a motion to dismiss, he asserts. However, MLC's reliance on facts that do not appear on the face of the Complaint cannot be considered by the Court without converting the Motion to Dismiss to a motion for summary judgment and allowing TMC the chance to take discovery, he avers. "MLC's myopic view of the VSA and 2006 MOU fails to read them as a whole, fails to give effect to the mutual intentions of the parties, and results in repugnancy and an absurd result," Mr. Riopelle maintains. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2010, GM had US$137.238 billion in total assets, US$106.522 billion in total liabilities, US$6.998 billion in preferred stock, $971 million in non-controlling interest, and US$23.718 billion in total equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GRAND BEAR: Seeks to Tap Lenders' Cash Collateral ------------------------------------------------- Dow Jones' DBR Small Cap reports that Grand Bear Lodge LLC is seeking permission from the bankruptcy court to tap its lenders' cash collateral so it can continue operating its Illinois hotel and indoor water park and paying its employees. According to the report, Grand Bear said that the ability to pay its 142 employees and to run its Grizzly Jack's Grand Bear Resort with as little disruption as possible is "essential" to its restructuring. "This will enable the debtor to preserve and maximize the value of its operations, to continue its efforts to repay all of its creditors, and to be a significant employer in the region," Grand Bear said in court papers, the report discloses. Grand Bear said it's due to make payroll on February 4. According to Grand Bear, its workers' morale and continued employment depends upon its ability to make payroll, the report adds. Business As Usual According to The Times, in Ottawa, Illinois, an employee, who asked not to be identified, said all of Grand Bear's employees have been told, for the time being, they will be able to keep their jobs and "it's business as usual here." More Than $10 Mil. Owed to Creditors The Company intends to reorganize its debt obligation while under Chapter 11 protection. Tom Collins at NewsTribune in LaSalle, Illinois, reports that according to court filings, the bulk of the Company's debt is comprised of a $9 million loan, paid down to about $7.8 million, that Hook and his partners borrowed to construct the $18 million Utica resort and conference center opened in 2005. The Company said funds would be available for distribution to its creditors, but the debts exceed the assets on hand. Mr. Collins cites other claims listed in the filing: -- A disputed judgment of nearly $542,000 to Alexander Lumber Co. in Joliet -- More than $161,000 owed to the Illinois Department of Revenue, Hotel Operators Occupation Tax -- Nearly $179,000 to Advanced Asphalt Co. of Princeton -- More than $300,000 in legal fees to Chicago law firms -- More than $174,000 to U.S. Food Service, Inc. in Streator -- $160,462 to the Village of North Utica About Grand Bear Lockport, Illinois-based Grand Bear Lodge, LLC, filed for Chapter 11 protection in Chicago on Jan. 21, 2011 (Bankr. N.D. Ill. Case No. 11-02321), estimating assets of up to $50,000 and debts of $10 million to $50 million. The decision to file was due to the Company's inability to get a loan extension from its primary lender, according to the LaSalle News Tribune. GREYSTONE PHARMA: Has No Funding, Wants Ch. 7 Liquidation --------------------------------------------------------- Greystone Pharmaceuticals Inc., has asked the U.S. Bankruptcy Court for the Western District of Tennessee to convert its Chapter 11 case to one under Chapter 7 of the Bankruptcy Code. The Debtor says that it is unable to fund its current operating expenses and reorganization, and is unable to formulate a feasible plan of reorganization. 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 bankruptcy protection on November 2, 2009 (Bankr. W.D. Tenn. Case No. 09-32236). John L. Ryder, Esq., at Harris Shelton Hanover Walsh, PLLC, in Memphis, Tenn., assists the Company in its restructuring effort. David J. Cocke, Esq., at Evans Petree PC, in Memphis, Tenn., represents the Unsecured Creditor's Committee as counsel. In its schedules, the Debtor disclosed $25,467,546 in assets, and $22,601,150 in liabilities as of the petition date. GULFSTREAM INT'L: Creditor Appeals Bankruptcy-Sale Order -------------------------------------------------------- Dow Jones' DBR Small Cap reports that a secured creditor of Gulfstream International Group Inc. that previously accused the airline operator of accepting a "materially misleading" and competition-discouraging bid for its assets is now appealing the bankruptcy court order approving that approximately $30 million offer. As reported by the Troubled Company Reporter on January 25, 2011, Bankruptcy Judge John K. Olson authorized Gulfstream International to sell its business to an affiliate of Chicago-based Victory Park Capital Advisors LLC. Bill Rochelle, the bankruptcy columnist for Bloomberg News, said that to keep the airline flying, the judge is allowing the sale to be completed without awaiting the usual 10 days for appeal. Mr. Rochelle said Victory Park is buying Gulfstream in return for financing it provided the Chapter 11 case. In addition, Victory Park is paying Raytheon Aircraft Credit Co. $18.7 million to buy the 21 Beechcraft 1900 D aircraft that Gulfstream operates. Raytheon also will be paid arrears on the aircraft leases. Victory Park will pick up specified expenses of the Chapter 11 case while setting aside a $600,000 fund to pay professional fees. Victory Park is also allowing the creation of a $100,000 fund to finance lawsuits. Mr. Rochelle noted that a prior bankruptcy court order said there will be a "structured dismissal" of the Chapter 11 case within 30 days of the completion of the sale. About Gulfstream International Fort Lauderdale, Florida-based Gulfstream International Airlines (NYSE Amex: GIA) operated a fleet of turboprop Beechcraft 19000 aircraft, and specialized in providing travelers with access to niche locations not typically covered by major carriers. GIA operated more than 150 scheduled flights per day, serving nine destinations in Florida, 10 destinations in the Bahamas, five destinations from Continental Airline's hub under the Department of Transportation's Essential Air Service Program and supports charter service to Cuba through a services agreement with Gulfstream Air Charter, Inc., an entity otherwise unrelated to the Debtors. GIA operated as a Continental Connection carrier, as well as for United Airlines, Northwest Airlines and Copa Airlines, through code share agreements. GIA has 620 employees, including 530 working full-time. Gulfstream International Group, Inc., and its units including Gulfstream International Airline, Inc., filed for Chapter 11 bankruptcy protection on November 4, 2010 (Bankr. S.D. Fla. Case No. 10-44131). Brian K. Gart, Esq., at Berger Singerman, P.A., serves as the Debtors' bankruptcy counsel. Jetstream Aviation Capital, LLC and Jetstream Aviation Management, LLC, serve as financial advisors to the Debtors. Robert A. Schatzman, Esq., Steven J. Solomon, Esq., and Frank P. Terzo, Esq., at GrayRobinson, P.A., in Miami, Florida, serve as counsel to the Official Committee of Unsecured Creditors. Gulfstream International Airlines disclosed $15,967,096 in assets and $25,243,099 in liabilities in its Schedules of Assets and Liabilities. HARRY & DAVID: Will Likely Default, Says Moody's; PDR Now 'Ca' -------------------------------------------------------------- Moody's Investors Service downgraded Harry & David's Probability of Default and Corporate Family ratings to Ca from Caa3. The company's senior unsecured notes were lowered to C from Ca. The ratings outlook is negative. The downgrade to Ca reflects Moody's view that Harry & David will likely default on its debt obligations in the very near-term. The company recently announced that will not be able to borrow on its revolver -- a critical source of operating liquidity -- as a result of covenant violations. Additionally, Harry & David is facing an estimated $7 million interest payment on March 1, 2011 on its senior unsecured notes, and a substantial scheduled debt maturity in March 2012 when the company's $58 million senior unsecured notes mature. As of December 25, 2010, Harry & David estimated that it had $66.9 million of cash and $57.9 million of accounts payable. The Ca also considers that any restructuring of Harry & David's debt could result in significant impairment to debt holders given the company's negative EBITDA and low tangible asset value relative to its outstanding debt. The company recently announced that it hired outside advisors to explore recapitalization options. The negative rating outlook considers that Harry & David's ratings could be downgraded if a payment default occurs under its debt obligations or the company recapitalizes its debt obligations at less than par. A ratings upgrade in the near term is unlikely given the unsustainable nature of the company's current debt capital structure. Ratings downgraded: -- Corporate Family Rating to Ca from Caa3 -- Probability of Default Rating to Ca from Caa3 -- Senior unsecured floating rate notes due 2012 to C (LGD 5, -- 73%) from Ca (LGD 5, 70%) -- Senior unsecured 9% fixed rate notes due 2013 to C (LGD 5, 73%) from Ca (LGD 5, 70%) The principal methodologies used in this rating were Global Retail Industry published in December 2006, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Harry & David produces and markets premium gift-quality fruit, gourmet food products, and specialty gifts under the Harry and David brand. Distribution channels include print catalogues, the internet, retail stores, and wholesale. Annual revenues approach $420 million. HERTZ CORP: Fitch Expects to Put BB- Rating on $300MM Unsec. Notes ------------------------------------------------------------------ Fitch Ratings expects to rate Hertz Corporation's $300 million issuance of senior unsecured notes 'BB-.' Hertz's 'BB-' Issuer Default Rating and Stable Rating Outlook are unaffected by the assignment of this rating. The notes will rank equally with all of Hertz's senior unsecured indebtedness. Hertz intends to use the proceeds from the issuance, together with cash proceeds from the issuance of Hertz's 7.50% senior unsecured notes due 2018 on Sept. 30, 2010, to redeem $300 million of its 2005 Acquisition Dollar Notes. Fitch expects to assign the following rating: The Hertz Corporation -- $300 million senior unsecured notes 'BB-'; H.K. PORTER: To Purchase Great American Policy for $152,000 ----------------------------------------------------------- H.K. Porter Company Inc. has reached a settlement with Great American Insurance Company that provides, among other things, for the buy-back of an insurance policy, and in connection therewith Porter has filed a Motion for Order Approving: (1) Insurance Settlement With Great American Insurance Company; and (2) Sale of Insurance Policy Free and Clear Of Claims and Interests, Docket No. 3067, and the U.S. Bankruptcy Court for the Western District of Pennsylvania has entered an Order scheduling a hearing on the Motion for Feb. 10, 2011 at 2:00 p.m., in Pittsburgh. At the hearing, the Reorganized Debtor will seek to confirm the settlement and the sale of the insurance policy to Great American. The property to be sold consists of a high level excess general liability insurance policy issued by Agricultural Excess & Surplus Insurance Company to H.K. Porter for the period from May 1, 1986, to May 1, 1987, and numbered XSO006104. Great American has offered to buy-back the Policy upon such terms and conditions as are set forth in the Settlement Agreement among the parties for the sum of $152,000. Anyone who wishes to object to the Settlement Motion must file a written response on or before February 3, 2011 and serve a copy of that response on: H.K. Porter's counsel: George T. Snyder, Esq. Stonecipher, Cunningham, Beard & Schmitt, P.C. 125 First Avenue Pittsburgh, PA 15222 - and - Counsel to the H.K. Porter Asbestos Trust: Philip E. Milch, Esq. Campbell & Levine, LLC 310 Grant Street, Suite 1700 Pittsburgh, PA 15219 - and - Counsel to Great American: Paul J. Killion, Esq. Duane Morris LLP One Market Plaza, Suite 2200, San Francisco, CA 94150-1127 HOUGHTON INT'L: S&P Puts 'B' Rating on $500MM Credit Facilities --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate rating to Valley Forge, Pa.-based Houghton International Inc. The outlook is stable. At the same time, S&P assigned its 'B' issue-level ratings (same as the corporate credit rating) to Houghton's $500 million senior secured credit facilities due 2016. The recovery ratings are '4', indicating S&P's expectation of average recovery (30% to 50%) in the event of a payment default. The Company is using the proceeds to refinance its existing senior secured debt and senior subordinated notes, as well as to finance the acquisition of the metalworking and rolling oil businesses from Royal Dutch Shell plc, with the remaining portion of the funds allocated for fees and expenses. The senior secured facilities consist of a $50 million multicurrency revolving credit facility and a $450 million term loan B. "The ratings on Houghton reflect the Company's participation in the highly competitive niche metalworking fluids industry, exposure to cyclical end markets, volatile raw material cost base, private equity ownership, and our expectation of highly leveraged financial measures, including 2011 funds from operations to total adjusted debt below 10%," said Standard & Poor's credit analyst Seamus Ryan. Partially offsetting these factors are the Company's leading market share position, essential nature of its products, and good geographic and customer diversity. S&P characterizes Houghton's business risk profile as weak and its financial risk profile as highly leveraged. Houghton operates in the niche metalworking fluids industry, with its products primarily sold into the cyclical automotive, steel and aluminum industries, where the products provide essential process characteristics such as lubrication, rust prevention, heat dissipation, operating efficiency, and cleanliness of machine parts. Houghton's products also represent a small portion of end- product cost with customer loyalty providing a barrier to entry that is enhanced through technical engineering and service. Nonetheless, substitute products from competitors and significant excess capacity result in price competition. Houghton is the leading producer in the mature $6 billion global metalworking fluids market. S&P expects North American and S&Pstern European markets to experience slow growth supported by a gradual economic recovery in developed regions, while manufacturing activity continues to migrate to Eastern Europe, Asia, and South America. Houghton is positioned to capture some of this migration, as the Company generates approximately one- third of its sales from these growing markets. In addition, the acquisition of Shell's metal working fluids business should provide additional exposure to the faster-growing Eastern European automotive markets. The stable outlook reflects S&P's expectation that moderately improved profitability due to increased end-market demand and cost reductions will help Houghton generate sufficient cash flow to achieve FFO to total debt approaching 10% over the near term. Based on S&P's scenario forecasts, S&P could raise ratings if revenues grow at a slightly faster pace than the economy and operating margins (before depreciation and amortization) increase by 200 basis points from current levels. As a result, S&P would expect FFO to adjusted debt to increase above 12%. To consider a higher rating, S&P would also have to gain additional comfort with the Company's very aggressive financial policies, including future acquisition or dividend plans. S&P could lower the ratings if unexpected business challenges reduce the Company's operating margins by 200 basis points from current levels, resulting in FFO to adjusted debt in the low- single-digit percentage range. Such a scenario could develop from an unexpected reduction in end-market demand, integration difficulties, or the inability to fully pass through volatility in base oil prices, which are expected to increase moderately in 2011. S&P could also lower the ratings if financial policy decisions result in increased debt leverage. HUNTINGTON INGALLS: S&P Puts BB+ Rating on $1.25BB Credit Facility ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Huntington Ingalls Industries Inc. (Huntington Ingalls). At the same time, S&P assigned S&P's 'BB+' issue-level rating to the Company's proposed $1.25 billion secured credit facility (which consists of a $600 million term loan and a $650 million revolver, both due in 2016) with a recovery rating of '1', indicating S&P's expectations of very high (90%-100%) recovery in a payment default scenario. S&P also assigned its 'B+' issue rating to the Company's proposed $575 million unsecured notes due 2018 and $600 million unsecured notes due 2021 with a recovery rating of '5', indicating expectations of a modest (10%-30%) recovery. The outlook is stable. "The ratings on Huntington Ingalls reflect the high leverage which will follow the planned spin-off from Northrop Grumman Corp., as well as its weak profitability, limited product and customer diversity, and the possible long-term budget pressures facing military shipbuilders," said Standard & Poor's credit analyst Christopher DeNicolo. "These factors are offset by the Company's position as one of only two builders of large ships for the U.S. Navy, steady intermediate-term demand supported by a large backlog, and its adequate liquidity. We assess Huntington Ingalls' business risk profile as fair and its financial risk profile as aggressive." Northrop Grumman plans to spin off Huntington Ingalls to its shareholders once certain regulatory approvals are received, likely in the next few months. As part of the transaction, Huntington Ingalls will issue around $1.8 billion of new bank debt and public notes to finance a $1.5 billion payment to Northrop Grumman (in part to repay interCompany borrowings), with the remaining proceeds retained to provide liquidity. After a short transition period following the spin-off related to certain back- office functions, Northrop Grumman will have no connection to the Company except for the guarantee of a small industrial revenue bond. S&P expects leverage to be high pro forma for the transaction, with total adjusted debt to EBITDA about 5x. However, the Company has material post-retirement and self- insurance liabilities that are included in adjusted debt, which are largely recoverable under government contracts over time. If adjusted for expected recoverability, debt to EBITDA is likely to be below 4x. S&P believes credit protection measures (similarly adjusted) should be appropriate for the rating, with funds from operations (FFO) to debt of 20%-25% and EBITDA interest coverage 4.5x-5.0x, with gradual improvement possible as profitability improves and the Company uses excess cash flows to reduce debt. The outlook is stable. S&P believes the Company's relatively stable near-term revenues, supported by a large backlog, improving profitability, and debt reduction from excess cash flows, should result in steadily improving credit protection measures. "We could raise the rating if these trends result in debt to EBITDA below 3.5x and FFO to debt above 25% (both ratios adjusted for recoverability of pension and self-insurance costs under government contracts)," Mr. DeNicolo continued. "Although less likely, we could lower the ratings if profitability does not improve as we expect or if reduced funding for military shipbuilding results in debt to EBITDA above 4.5x and FFO to debt below 15% on a sustained basis." IMH FINANCIAL: Amends Preliminary Prospectus for IPO ---------------------------------------------------- IMH Financial Corporation filed an amended preliminary prospectus on January 21, 2011, regarding its proposed initial public offering. The prospectus is still subject to completion -- the Company has yet to disclose the number of shares it is issuing at the IPO and the initial offering price. The Company intends to apply to list its common stock on the New York Stock Exchange. The Company intends to utilize the net proceeds of this offering for working capital, to fund the acquisition and origination of new investments in its target assets, and for other general corporate purposes. The Company also plans to use up to 30% of the proceeds of this offering to effect a pro rata redemption of the 838,448 outstanding shares of Class C common stock at the initial public offering price, less underwriting discounts and commissions. A total of 16,809,766 shares of Class B and Class C common stock is outstanding as of January 21, 2011. The shares are convertible into 16,809,766 shares of Common Stock, $0.01 par value. The Company expects its primary sources of liquidity over the next twelve months to consist of the proceeds generated by (i) this offering, which its expect will net $103.5 million in cash, and (ii) the disposition of our existing assets, which it projects will net approximately $115.3 million in cash. A full-text copy of the prospectus is available for free: http://ResearchArchives.com/t/s?7288 About IMH Financial Scottsdale, Ariz.-based IMH Financial Corporation was formed from the conversion of IMH Secured Loan Fund, LLC, or the Fund, a Delaware limited liability company, on June 18, 2010. The conversion was effected following a consent solicitation process pursuant to which approval was obtained from a majority of the members of the Fund to effect the Conversion Transactions and involved (i) the conversion of the Fund from a Delaware limited liability company into a Delaware corporation named IMH Financial Corporation, and (ii) the acquisition by the Company of all of the outstanding shares of the manager of the Fund Investors Mortgage Holdings Inc., or the Manager, as well as all of the outstanding membership interests of a related entity, IMH Holdings LLC, or Holdings on June 18, 2010. The Company is a commercial real estate lender based in the southwest United States with over 12 years of experience in many facets of the real estate investment process, including origination, underwriting, documentation, servicing, construction, enforcement, development, marketing, and disposition. The Company focuses on a niche segment of the real estate market that it believes is underserved by community, regional and national banks: high yield, short-term, senior secured real estate mortgage loans. The intense level of underwriting analysis required in this segment necessitates personnel and expertise that many community banks lack, yet the requisite localized market knowledge of the underwriting process and the size of the loans the Company seeks often precludes the regional and community banks from efficiently entering this market. The Company's balance sheet at Sept. 30, 2010, showed $337.80 million in total assets, $15.93 million in total liabilities, and stockholders' equity of $321.86 million. "Given the current state of the real estate and credit markets, we believe the realization of full recovery of the cost basis in our assets is unlikely to occur in a reasonable time frame and may not occur at all, and we may be required to liquidate portions of our assets for liquidity purposes at a price significantly below the initial cost basis or potentially below current carrying values. If we are not able to liquidate a sufficient portion of our assets or access credit under the credit facility currently under negotiation, there may be substantial doubt about our ability to continue as a going concern. Nevertheless, we believe that our cash and cash equivalents, coupled with liquidity derived from the credit facility currently under negotiation and the disposition of certain of the loans and real estate held for sale, will allow us to fund current operations over the next 12 months," the Company said in its Form 10-Q for the quarter ended Sept. 30, 2010. INNKEEPERS USA: Bankers Have Contacted 70 Potential Suitors ----------------------------------------------------------- The Wall Street Journal's Mike Spector earlier this week reported that people familiar with the matter said Innkeepers USA Trust's bankers have contacted some 70 potential investors and are readying for a prolonged auction to pick a bidder to finance the Company's bankruptcy exit. The sources told the Journal that Innkeepers is likely to attract investors who work with creditors to restructure the Company's debt. The sources said Innkeepers is also essentially putting itself up for sale, looking for buyers who would take control of the Company in an all-cash bid. As reported in the Jan. 19 edition of the Troubled Company Reporter, according to Bill Rochelle, the bankruptcy columnist for Bloomberg News, the Lehman Ali and Five Mile have sponsored a Plan for the Debtors that will reduce debt by $400 million. Mr. Rochelle said that under the Plan: * Five Mile and Lehman Ali, together will provide $174.1 million of equity capital and convert $200.3 million of debt into equity. Five Mile is the provider of $53 million in secured financing for the Chapter 11 case, and Lehman is the holder of $238 million in floating-rate mortgages on 20 of Innkeepers' 72 properties. * Midland Loan Services Inc., as servicer for $825 million of fixed-rate mortgage debt on 45 properties, will emerge from Chapter 11 with mortgages for $622.5 million on revised terms. * Lehman is to receive 50% of the new equity plus $26.2 million cash in exchange for all its debt. The $70.5 million in secured loans for the Chapter 11 case will be paid in full. Midland is supplying debt financing for Lehman's commitment. * Unsecured creditors are being offered $2.5 million cash if the class votes for the plan. Secured lenders' deficiency claims will not participate in the distribution to unsecured creditors. Also, preference suits against unsecured creditors will be waived. * Holders of the 8% preferred stock are offered $5.9 million cash plus the right to be co-investors for 2% of the new equity. * Holders of mortgages on 69 of 72 properties will be paid in full or have the mortgages modified consensually. As reported by the TCR on January 25, 2011, Innkeepers has asked the Bankruptcy Court for authority to enter into a commitment letter for a stalking horse bid submitted by Five Mile and Lehman ALI. The Stalking Horse Bid contemplates an enterprise-level transaction involving the Company's entire portfolio and is valued at $1.14 billion -- including roughly $790.5 million of debt financing and approximately $348.2 million of equity. The Court has scheduled a hearing for March 8 and 9, 2011, to consider approval of (1) the Stalking Horse Bid, (2) bidding procedures governing an auction at which overbids to the Stalking Horse Bid will be solicited, and (3) a break-up fee to Five Mile/Lehman if the Company completes a transaction other than the Stalking Horse Bid -- and certain other conditions are satisfied. The Stalking Horse Bid includes $622.5 million of mortgage debt provided by an existing creditor. This creditor has agreed to make this debt available to other bidders at the auction that want to use it and that meet certain conditions. The TCR also reported that at the March 8 and 9 hearings, the Court will also consider approval of an auction process to test whether anyone will top the Five Mile-Lehman Ali bid. Pursuant to the timetable, preliminary, non-binding, objections to the Five Mile-Lehman proposal are due Jan. 26. Deposition notices must be served by Jan. 27. Documents must be produced by Feb. 8, with examinations of witnesses under oath from Feb. 9 to 18. Final objections are due Feb. 25, with replies by March 3. Five Mile and Lehman Ali are entitled to a $10 million break-up fee should Innkeepers pursue a different transaction. About Innkeepers USA Trust Innkeepers USA Trust is a self-administered Maryland real estate investment trust with a primary business focus on acquiring premium-branded upscale extended-stay, mid-priced limited service, and select-service hotels. Innkeepers, through its indirect subsidiaries, owns and operates an expansive portfolio of 72 upscale and mid-priced extended-stay and select-service hotels, consisting of approximately 10,000 rooms, located in 20 states across the United States. Apollo Investment Corporation acquired Innkeepers in June 2007. Innkeepers USA Trust and 91 affiliates filed for Chapter 11 on July 19, 2010 (Bankr. S.D.N.Y. Case No. 10-13800). Paul M. Basta, Esq., at Kirkland & Ellis LLP, in New York; Anup Sathy, P.C., Esq., Marc J. Carmel, Esq., at Kirkland & Ellis in Chicago; and Daniel T. Donovan, Esq., at Kirkland & Ellis in Washington, DC, serve as counsel to the Debtors. AlixPartners is the restructuring advisor and Marc A. Beilinson is the chief restructuring officer. Moelis & Company is the financial advisor. Omni Management Group, LLC, is the claims and notice agent. Attorneys at Morrison & Foerster, LLP, represent the Official Committee of Unsecured Creditors. The Company's consolidated assets for 2009 totaled approximately $1.5 billion. As of July 19, 2010, the Company and its affiliates have incurred approximately $1.29 billion of secured debt. INTELLIGRATED INC: Moody's Assigns Initial 'B2' Corporate Rating ---------------------------------------------------------------- Moody's Investors Service assigned initial B2 Corporate Family and Probability of Default ratings to Intelligrated, Inc. At the same time, B2 ratings were assigned to the company's secured bank term loan and revolving credit facilities. The rating outlook is stable. The B2 Corporate Family and Probability of Default ratings recognize the company's modest revenue size but strong position within a relatively narrow niche. It further considers regional and customer concentration issues as well as ongoing cyclicality. The ratings also incorporate high leverage deployed in the capital structure partially mitigated by strong coverage metrics for the rating category and anticipation of sustainable free cash flow. The latter is expected to benefit from relatively low re- investment requirements for property, plant and equipment and net operating loss carry-forwards minimizing future tax outlays. The company's volumes are driven by capital expenditure plans of major North American retailers, consumer product manufacturers and shipping/logistics providers. While a large portion of Intelligrated's revenues are tied to the level of investment in new and expanded warehouse and distribution facilities, an increasing portion of its business is tied to projects that can considerably improve the efficiency of existing facilities. The bulk of Intelligrated's revenues will come from new equipment and systems sales. However, its business profile includes an installed base of equipment, establishing a stream of higher margin customer service, aftermarket revenues and license fees, as well as a material backlog of orders providing a degree of revenue visibility. Still, overall EBITDA margins are fairly modest but have strengthened as savings from cost reduction actions have been realized. The restructuring program is designed to achieve cost synergies from its 2009 acquisition of FKI Logistex Holdings, Inc. At the time of the acquisition, FKI Logistex was larger than Intelligrated and incurring operating losses. Expenditures and cash disbursements for that initiative will affect 2011's performance and cash flows, but once completed, should further improve the company's results. The rating also reflects concern over the potential for aggressive financial policies. Despite a limited track record of recent material profitability and free cash flow generation, equity owners will have received substantial distributions over the recent past, much of it funded with debt. The resulting level of fixed charges could limit future flexibility should a cyclical downturn occur. The stable outlook considers prospects for stable-to-low single digit organic revenue growth over the intermediate period along with steady to increasing profitability as more cost savings from the integration and rationalization program are realized over time. In addition, the stable outlook is supported by an expectation of ongoing free cash flow and an adequate liquidity profile. The ratings and outlook could experience upward pressure should the company's margins appreciably strengthen and resultant cash flows be used to de-lever the capital structure. Quantitatively this could include EBITA margins consistently above 7% through the cycle, debt/EBITDA under 4 times, EBITA/interest consistently above 2 times, and FCF/debt sustained above 7%. Negative pressure on the rating or outlook could develop should prospects for new orders or Intelligrated's market share or margins appreciably decline, leading to lower profitability and slimmer coverage metrics. Similarly, additional returns to shareholders while the company is highly levered could lead to a downgrade. Debt/EBITDA above 5 times, EBITA/interest less than 1.25 times or several quarters of negative free cash flow could adversely impact the ratings The B2, (LGD-3, 48%) ratings on the bank credit facilities reflect their expected loss from the application of PDR of B2 and their loss given default point estimate which incorporates their priority as first lien secured creditors. The bank debt will constitute the vast majority of claims in the liability waterfall, causing their instrument ratings to mirror those of the overall corporate family. Ratings assigned: -- Corporate Family, B2 -- Probability of Default, B2 -- $145 million first lien term loan, B2 (LGD-3, 48%) -- $30 million first lien revolving credit facility, B2 (LGD-3, 48%) The principal methodologies used in this rating were Global Heavy Manufacturing published in November 2009, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Intelligrated, Inc., headquartered in Mason, OH, manufactures high speed automated material handling equipment and is owned by affiliates of Gryphon Investors, Tudor Ventures, and members of executive management. Annual revenues are roughly $360 million. INVACARE CORP: Moody's Withdraws 'B1' Rating Following Redemption ----------------------------------------------------------------- Moody's Investors Service withdrew all of its debt ratings for Invacare Corp. including the company's B1 corporate family rating and B1 probability of default rating as well as its positive rating outlook following the full redemption of its 9.75% senior notes due 2015, which Moody's had previously rated B1. The following ratings were withdrawn: Invacare Corp. -- Corporate family rating of B1; -- Probability of default rating of B1; -- 9.75% senior notes due 2015 at B1 (LGD3, 38%); -- 4.125% senior subordinated convertible notes due 2027 at B3 (LGD5, 87%); -- Speculative Grade Liquidity Rating at SGL-1. Invacare, based in Elyria, Ohio, is the leading manufacturer and distributor of non-acute health care products for home health care, retail and extended care markets worldwide. The company's products are principally sold to over 25,000 home healthcare and medical equipment providers across five segments/geographies, namely: North America / Home Medical Equipment, Invacare Supply Group, Institutional Products Group, Europe and Asia/Pacific. ISC BUILDING: V. Maldonado Gets Lift As To Insurance ---------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas lifted, at the behest of Victor Maldonado, the automatic stay in ISC Building Materials, Inc.'s Chapter 11 bankruptcy proceeding. The stay is lifted in order to allow the state court litigation of Cause No. DC-10-1137, styled, Sumeer Homes, Inc., Palmer Drywall, LLC, Arturo Galvan and ISC Building Materials, Inc., in the 101st Judicial District Court, Dallas County, Texas, to proceed only as against the insurance policies of the Debtor, and go forward to final judgment only as against the Debtor's insurance policies and not as against any assets of the Debtor. Dallas, Texas-based ISC Building Materials, Inc. -- fka Insulation Supply Company; ISC Building Materials, LP; ISC Holdings GP; ISC GENPAR, LLC; and 1400 West Commerce, LLC -- operates a Building Materials Distribution and Retail business with locations throughout Texas including Houston, San Antonio, Austin, Ennis, Ft. Worth, Dallas, and Tyler. The Company filed for Chapter 11 bankruptcy protection on July 6, 2010 (Bankr. S.D. Tex. Case No. 10-35732). Donald L. Wyatt, Esq., at Wyatt Legal Services, PLLC, represents the Debtor. The Company disclosed $49,478,500 in assets and $12,411,205 in liabilities as of the Petition Date. ISC BUILDING: Proposes February 4 Auction for Lot B --------------------------------------------------- The U.S. Bankruptcy Court for the Hon. Karen Brown of the U.S. Bankruptcy Court for the Southern District of Texas has approved ISC Building Materials, Inc.'s sales and bidding procedures pertaining to "Lot B." The Debtor's assets have been divided by the Debtor into two distinct lots. Lot A is comprised of the Drywall Division of the Debtor. This lot is comprised of all assets of the Debtor, real personal and mixed. Lot B is comprised of the assets associated with the Ennis Lumber Yard Division of the Debtor, aka Blazek Building Supply. The sales contemplated under the procedures are a direct result of the efforts of the Debtor and its advisors, GulfStar Group, II, Ltd. These bidding and sales procedures are intended upon approval to become a part of any asset purchase agreement executed by the Debtor and any potential buyer of Lot B. These procedures are intended to govern the procedures of bidding and sale for Lot B. Under the bidding procedures, an entity seeking to become a qualified bidder will deliver a request to be deemed a qualified bidder together with financial information by 5:00 p.m. on the second business day before submitting any bid to GulfStar reasonably demonstrating the bidder's ability to consummate a sale on the terms proposed. If they have not already done so pre- confirmation, to be qualified, a prospective bidder will also be required contemporaneously to make a non-binding expression of interest and execute a reasonable form of non-disclosure agreement before being provided due diligence access to non-public information. A bidder that wants to avoid the submission of financial information to GulfStar but wishes to become a qualified bidder may do so if it makes a good faith deposit in escrow with GulfStar equal to 100% of the value of its bid. Any such bidder will be deemed a qualified bidder for that offer, and any advance over that offer up to 150% of the face amount of its initial bid. Bids must be submitted by the date and time of the close of bidding to the seller by submission of a bid package to Bryan C. Frederickson, Managing Director, GulfStar Group, II, Ltd. Bids must include a good faith deposit, which will be non- refundable if the bidder is selected as the successful bidder and fails to consummate the purchase and refundable if it isn't selected as the successful bidder. The amount of the deposit will be at least 10% of the total cash consideration to be paid by the bidder for the lot that the bidder proposes to acquire. Deposits may be tendered only by funds transfer to an escrow account established by GulfStar for these purposes and, in any event, must be made in manner acceptable to GulfStar. Credit bids will be accepted from holders of allowed secured claims only in the undisputed amount of the secured portion of any such claims. Comerica Bank will be authorized to exercise any credit bids in the full amount of its claims. The Debtor may accept and close on the second highest bid received if the winning bidder fails to close the transaction within 10 days of the date that GulfStar announces the winning bid. In the event that any stalking horse bid isn't the highest bid accepted by the Debtor, then the stalking horse bidder will be entitled to return of any good faith deposit tendered with the asset purchase agreement, and payment by seller, as an administrative expense, of the actual amount expended by the stalking horse bidder in conducting activities of investigation and due diligence in connection with the presentation of its bid and asset purchase agreement, provided, however, that the amount of the payment won't exceed $50,000 for Lot B. If the stalking horse bid isn't successful, then the stalking horse bidder will have 10 days in which to submit its statement for break up fees to GulfStar for payment out of deposit funds in escrow only. GulfSttar, the Debtor, Comerica Bank, and the Committee of Unsecured Creditors will have five days to object to the stalking horse break-up fee. If a party objects to the stalking horse break-up fee, the stalking horse bidder will have 10 days in which to file a motion with the Court for the purpose of determining allowance of the break-up fee. GulfStar will retain 100% of the demanded stalking horse break-up fee in escrow until the allowance of the fee has been determined by the court. The initial required minimum overbid for Lot B is $100,000. Lot B overbids after the initial overbid must be in a minimum amount of $50,000. The stalking horse bidder will be deemed to have waived any and all break up fees by rebidding on any lot following the submission by a competing bidder of any greater bid. Any party asserting irregularity or confusion in the conduct of the sale will be deemed to have waived their objections, right to make any further bid, and objection to closing if a motion seeking to re-open bidding isn't filed by 5:00 p.m. on February 7, 2011. Provided that no motion is filed, GulfStar will direct the escrow agent to disburse all deposits of unsuccessful bidders except the deposits of the winning bidder and second highest qualified bids on February 8, 2011. Unless the Debtor's plan of reorganization filed December 31, 2010, has been sooner confirmed, the Debtor will file a motion for a sale order and submit each winning bid for consideration by the court as a sale no later than February 8, 2011. On February 4, 2011, GulfStar will conduct a final round of bidding, which will commence at 9:00 a.m. CST and will close when no further advance is called by 11:59 a.m. CST. GulfStar will inform the successful bidder that it has submitted the winning bid on February 4, 2011, at 4:00 p.m. CST. About ISC Building Dallas, Texas-based ISC Building Materials, Inc. -- fka Insulation Supply Company; ISC Building Materials, LP; ISC Holdings GP; ISC GENPAR, LLC; and 1400 West Commerce, LLC -- operates a Building Materials Distribution and Retail business with locations throughout Texas including Houston, San Antonio, Austin, Ennis, Ft. Worth, Dallas, and Tyler. The Company filed for Chapter 11 bankruptcy protection on July 6, 2010 (Bankr. S.D. Tex. Case No. 10-35732). Donald L. Wyatt, Esq., at Wyatt Legal Services, PLLC, represents the Debtor. The Company disclosed $49,478,500 in assets and $12,411,205 in liabilities as of the Petition Date. JENNIFER CONVERTIBLES: Ashley Continues Fight Over Trademark Use ---------------------------------------------------------------- Bankruptcy Law360 reports that a dispute with Ashley Furniture Industries Ltd. over continued use of the Company's trademark for certain stores threw a wrench into Jennifer Convertibles Inc.'s hopes to win approval for a restructuring plan Tuesday. NEWSDAY.COM reported that Jennifer Convertibles was scheduled to present its plan for confirmation at a hearing on Jan. 25. Under the terms of the plan, the largest creditor, Haining Mengnu, will own 90.1% of the stock in exchange for $14.9 million in debt and receive 30 percent of recoveries from a liquidating trust. Unsecured creditors will own 9.9% of the stock and 70% of the liquidating trust. Mengnu and other creditors will also receive the proceeds from a series of notes. Current Jennifer stockholders would be wiped out. The creditors' committee recommends that creditors vote yes on the Plan. About Jennifer Convertibles Jennifer Convertibles, Inc., was organized as a Delaware corporation in 1986, and is currently the owner of (i) the largest group of sofabed specialty retail stores and leather specialty retail stores in the United States, with stores located throughout the Eastern seaboard, Midwest, West Coast and Southwest, and (ii) seven big box, full-line furniture stores operated under the Ashley Furniture HomeStore brand under a license from Ashley Furniture Industries, Inc. The Company and its affiliates filed for Chapter 11 bankruptcy protection on July 18, 2010 (Bankr. S.D.N.Y. Case No. 10-13779). Michael S. Fox, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky, LLP, assists the Company in its restructuring effort. TM Capital Corp. is the Company's financial advisor. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C. is the Company's special securities counsel. BMC Group Inc. is the claims and notice agent. The Company estimated its assets and debts at $10,000,001 to $50,000,000 as of the Petition Date. KANG INVESTMENTS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Kang Investments, LLC 1769 Edwards Drive Point Roberts, WA 98281 Bankruptcy Case No.: 11-10713 Chapter 11 Petition Date: January 25, 2011 Court: U.S. Bankruptcy Court Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Larry B. Feinstein, Esq. VORTMAN & FEINSTEIN 500 Union Street, Suite 500 Seattle, WA 98101 Tel: (206) 223-9595 E-mail: feinstein2010@gmail.com Scheduled Assets: $13,158,371 Scheduled Debts: $10,956,955 The petition was signed by Dr. Parmjit S. Kang, president. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Parmjit S. Kang 11-10717 01/25/2011 Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ D&L Constructions -- $79,757 Country Lumbar LTD -- $56,999 Frontier Doors & Cabinets, LLC -- $49,025 Alliance Restoration SVC., Inc. -- $32,626 Puget Sound Leasing -- $13,319 B&B Truss -- $9,740 GTS Interior Supply -- $9,043 Hentschell & Assoc. Earth Quake -- $8,631 Counter Craft Company -- $6,430 HD Supply Facilities Maintenance -- $4,487 Varnell Electric, Inc. -- $2,011 One Beacon -- $1,725 ABCO Leasing -- $1,515 Consumer Source, Inc. -- $1,130 Rubatino Refill Removal -- $1,068 Daez Comcepts -- $721 Ventron, LLC -- $597 Banner Bank -- $394 The Daily Herald -- $307 Design Two Four/Two Six, Inc. -- $170 KURRANT MOBILE: CEO Pierre Turgeon Now Has 53.71% Equity Stake -------------------------------------------------------------- In an amended Schedule 13D filing with the Securities and Exchange Commission on January 24, 2011, Pierre Turgeon disclosed that he beneficially owns 100,000,000 shares of common stock of Kurrant Mobile Catering Inc. representing 53.7% of the shares outstanding. As of January 17, 2011, there were 186,154,254 shares of the Company's common stock outstanding. Effective January 17, 2011, the Board of Directors of the Company authorized the issuance of an aggregate 10,000,000 shares of restricted common stock to the Mr. Turgeon, as its Chief Executive Officer/President and a member of its Board of Directors. The Board of Directors authorized the issuance of the 10,000,000 shares to Mr. Turgeon based upon recognition of his outstanding services, leadership and innovative business operational strategies provided by Mr. Turgeon and his continuous dedication and loyalty to the Company, including undertaking of the international development of the Company. The 10,000,000 shares were issued at a per share price of $0.01. The shares of common stock were issued to Mr. Turgeon as a non- United States resident in reliance on Regulation S promulgated under the United States Securities Act of 1933, as amended. The shares of common stock have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements. Mr. Turgeon acknowledged that the securities to be issued have not been registered under the Securities Act, that he understood the economic risk of an investment in the securities, and that he had the opportunity to ask questions of and receive answers from the Company's management concerning any and all matters related to acquisition of the securities. About Kurrant Mobile Montreal, Quebec-based Kurrant Mobile Catering, Inc., operates in a single business segment that includes the publication and distribution of books and eBooks. The Company sells its products to distributors throughout the world. The Company's balance sheet at November 30, 2010, showed $1.02 million in total assets, $1.71 million in total liabilities, and a $686,774 stockholders' deficit. According to the Form 10-Q for the quarter ended Nov. 30, 2010, "The Company has incurred net losses and has negative cash flows from its operations. These factors raise substantial doubt regarding Kurrant Mobile's ability to continue as a going concern. Realization value may be substantially different from carrying values as shown and these financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should Kurrant Mobile be unable to continue as a going concern. The continuation of Kurrant Mobile as a going concern is dependent upon the continued financial support from its shareholders, the ability of Kurrant Mobile to obtain necessary equity financing to continue operations, and the attainment of profitable operations." LEHMAN BROTHERS: Amends Bankruptcy Plan, Has Committee Support -------------------------------------------------------------- Lehman Brothers Holdings Inc. and its 22 affiliated Chapter 11 debtors disclosed the filing of their proposed First Amended Joint Chapter 11 plan and disclosure statement with the United States Bankruptcy Court for the Southern District of New York. The debtors' plan provides for the fair and reasonable treatment of the claims that have been filed against the debtors. The Official Committee of Unsecured Creditors (UCC) appointed in the chapter 11 cases supports the plan and will join with the debtors in further processing the plan. Bryan Marsal, LBHI's Chief Executive Officer, said: "This plan takes into account the input, comments and suggestions of many parties, including the UCC, the creditors of LBHI, creditors of subsidiary debtors, foreign affiliates and others. It is the result of a thoughtful and exhaustive process of analysis and meetings with stakeholders. It is a balanced, rational resolution of issues. It represents a fair economic compromise, will expedite the administration of these cases and accelerate distributions to creditors. It is a plan the debtors intend to move forward, with the support of the UCC and, hopefully, other creditor constituencies, to confirmation and the distribution of dividends to holders of allowed claims. "From the outset, we have tried to develop a plan that balances the varied interests in a way that is fair to each stakeholder group and provides the best outcome for creditors. This plan resolves issues in a way designed to minimize time consuming and multi-jurisdictional litigation with an uncertain outcome. "I want to commend all of the stakeholders, especially the UCC, for their hard work, input, guidance and assistance. We have received many constructive and positive comments during this process and believe the merits of this plan are clear." The processing of the plan and the disclosure statement are subject to the provisions of the Bankruptcy Code and, ultimately, acceptance by the requisite majorities of impaired creditors. Over the coming weeks, meetings will be arranged with various stakeholder groups to provide briefings on the plan and disclosure statement. 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 disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On 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) LEVEL 3 COMMS: Thornburg Investment Discloses 5.19% Equity Stake ---------------------------------------------------------------- In a Schedule 13G filing with the Securities and Exchange Commission on January 24, 2011, Thornburg Investment Management Inc. disclosed that it beneficially owns 86,696,804 shares of common stock of Level 3 Communications representing 5.19% of the shares outstanding. As of November 2, 2010, there were 1,669,210,966 shares of common stock of the Company outstanding. About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. The Company's balance sheet at Sept. 30, 2010, showed $8.36 billion in total assets, $8.45 billion in total liabilities, and a stockholders' deficit of $86.0 million. Level 3 Communications carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. LEVEL 3 COMMS: To Swap Convertible Notes with $300MM Sr. Notes -------------------------------------------------------------- Level 3 Communications, Inc., announced it has agreed to issue $300,217,000 aggregate principal amount of its 11.875% Senior Notes due 2019 to an institutional investor in exchange for $294,732,000 aggregate principal amount of the Company's outstanding 9% Convertible Senior Discount Notes due 2013 in a private transaction. The Company anticipates closing the transaction by the end of January, subject to customary closing conditions. Upon completion of this exchange transaction, all of the Company's outstanding 9% Convertible Senior Discount Notes will be retired, and there will be $605,217,000 aggregate principal amount of the Company's 11.875% Senior Notes due 2019 outstanding. The 11.875% Senior Notes to be issued in the exchange transaction will not be registered under the Securities Act of 1933, as amended or any state securities laws and, unless so registered, may not be offered or sold except pursuant to an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. The Company's balance sheet at Sept. 30, 2010, showed $8.36 billion in total assets, $8.45 billion in total liabilities, and a stockholders' deficit of $86.0 million. Level 3 Communications carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. MARQUETTE TRANSPORTATION: S&P Affirms 'B' Corporate Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit rating on Marquette Transportation Co. LLC. At the same time, S&P affirmed the 'B-' rating and '5' recovery rating on the Company's $250 million second-lien notes. The 'B-' rating is one notch below the corporate credit rating, and the '5' recovery rating indicates S&P's expectations of a modest (10% to 30%) recovery in a payment default scenario. The outlook is stable. Marquette Transportation Co. Holdings LLC's (Marquette) operating performance has stabilized after a period of reduced profitability resulting from a weak U.S. economy. Marquette is now benefitting from modest rate increases and from improving volumes, which have resulted in higher vessel utilization. S&P expects that an improving U.S. economic outlook, along with cost cutting measures and reduced capital spending, will help the Company maintain its financial profile over the next year. "The ratings on Marquette reflect its highly leveraged financial profile, participation in the highly competitive and capital- intensive shipping industry, and exposure to cyclical demand swings in certain end markets," said Standard & Poor's credit analyst Funmi Afonja. The ratings also reflect the potential for high customer concentration to negatively affect earnings and the Company's vulnerability to weather-related disruptions in business operations, Ms. Afonja said. Positive credit factors include Marquette's leading market position, albeit in a niche business segment, as an independent provider of towboat operations in intra-U.S. shipping; relatively stable revenues under fixed- rate, long-term contracts; and competitive barriers to entry under the Jones Act. The Jones Act requires that U.S.-built vessels be registered in the U.S. and crewed with U.S. citizens to carry shipments between U.S. ports. These requirements limit competition by excluding foreign-flagged vessels. Marquette's entire fleet is Jones Act-qualified. S&P characterizes Marquette's business risk profile as weak and its financial risk profile as highly leveraged. Marquette does not publicly disclose financial information. Marquette, based in Paducah, Ky., is the largest independent towboat operator in U.S. domestic waterway shipping. MERUELO MADDUX: Plan Confirmation Hearing Begins Today ------------------------------------------------------ Eric Morath, writing for Dow Jones' Daily Bankruptcy Review, reported that Meruelo Maddux Properties Inc. will return to the Bankruptcy Court on Thursday, Jan. 27, at 9:30 a.m. for the hearing to consider confirmation of its chapter 11 plan. Mr. Morath also reported that Meruelo Maddux last week struck a deal with Legendary Investors Group to settle the group's challenge to the Company's plan. According to DBR, under the deal: -- Legendary will swap its $67.8 million in Meruelo Maddux mortgage debt for ownership of seven properties; -- Legendary and fellow lender East West Bancorp Inc. will drop their rival takeover plan, which proposes to remove the Company's senior management, including Chief Executive Richard Meruelo; and -- Legendary will drop its liens on three other Meruelo Maddux properties. The lender received interest in those properties as additional collateral for its loans. Legendary had earlier acquired all of East West's interest in Meruelo Maddux loans. Eric Richardson, writing for Blogdowntown, reports that the court approved the settlement Monday. Meruelo Maddux still faces challenge from minority shareholders, which have also proposed a plan of their own. DBR notes the plan from Charlestown Capital Advisors LLC and Hartland Asset Management proposes to pump $30 million into Meruelo Maddux, including $23 million for the purchase of 55% of the existing shares. DBR said the unsecured creditors committee is backing Meruelo Maddux's plan and its proposal to settle with Legendary. The Debtors have hired Kurtzman Carson Consultants as solicitation and balloting agent. Legendary Investors Group No. 1, LLC, is represented in the case by: Jeremy V. Richards, Esq. Jeffrey W. Dulberg, Esq. PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Blvd., 11th Floor Los Angeles, CA 90067-4100 Telephone: 310-277-6910 Facsimile: 310-201-0760 E-mail: jrichards@pszjlaw.com jdulberg@pszjlaw.com - and - Surjit P. Soni, Esq. THE SONI LAW FIRM 35 N. Lake Ave., Suite 720 Pasadena, CA 91101 Telephone: 626-683-7600 Facsimile: 626-683-1199 E-mail: surj@sonilaw.com East West Bank is represented by: Curtis C. Jung, Esq. Monica H. Lin, Esq. JUNG & YUEN, LLP 888 South Figueroa Street, Suite 720 Los Angeles, CA 90017 Telephone: 213-689-8880 Facsimile: 213-689-8887 E-mail: curtis@jyllp.com - and - Elmer Dean Martin III, Esq. 22632 Golden Springs Dr., Suite 190 Diamond Bar, CA 91765 Telephone: 909-861-6700 Facsimile: 909-860-3801 E-mail: elmer@bankruptcytax.net Charlestown Capital Advisors, LLC and Hartland Asset Management Corporation are represented in the case by: Christopher E. Prince, Esq. Matthew A. Lesnick, Esq. Andrew R. Cahill, Esq. LESNICK PRINCE LLP 185 Pier Avenue, Suite 103 Santa Monica, CA 90405 Telephone: (213) 493-6496 Facsimile: (213) 493-6596 E-mail: cprince@lesnickprince.com matt@lesnickprince.com acahill@lesnickprince.com About Meruelo Maddux Meruelo Maddux and its affiliates filed for Chapter 11 protection (Bankr. C.D. Calif. Lead Case No. 09-13356) on March 26, 2009. Aaron De Leest, Esq., John J. Bingham, Jr., Esq., and John N. Tedford, Esq., at Danning Gill Diamond & Kollitz, represent the Debtors in their restructuring effort. The Debtors' financial condition as of December 31, 2008, showed $681,769,000 in assets and $342,022,000 of debts. FTI Consulting, Inc., serves as the Debtors' financial advisors, Ernst & Young as independent auditors and tax advisors, DLA Piper LLP (US) as special securities and litigation counsel, and Waldron & Associates, Inc. as real estate appraiser. The U.S. Trustee has appointed an official committee of unsecured creditors and a separate official shareholders' committee in the case. SulmeyerKupetz, APC, serves as the Creditors Committee's counsel and Kibel Green, Inc., as its financial advisor. The equity committee has sought to retain Ron Orr & Professionals, Inc., Rodiger Law Office, and Jenner & Block as counsel, and Kibel Green, Inc. as its financial advisor. MOLECULAR INSIGHT: Gets Court OK to Assume Savitr Investment Deal ----------------------------------------------------------------- Molecular Insight Pharmaceuticals, Inc. has received approval from the U.S. Bankruptcy Court for the District of Massachusetts of its motion to assume the previously disclosed Investment Agreement entered into with Savitr Capital LLC. The motion was submitted in connection with the Company's Chapter 11 reorganization case that was commenced on December 9, 2010 under the U.S. Bankruptcy Code. The Court entered an order authorizing the Company to assume the Investment Agreement and approving a break-up fee and expense reimbursement for Savitr Capital as specified in the Investment Agreement. The order further authorizes the Company to actively solicit, during a 30-day period commencing on January 20, 2011, the date of entry of the order, inquiries, proposals, offers and bids from, and negotiate with, any person regarding any alternative transaction such as an acquisition or other sale or purchase transaction or refinancing. If the Company receives, prior to or after the foregoing solicitation period, an unsolicited proposal for an alternative transaction that would reasonably be expected to result in more favorable terms to the Company than the Savitr Capital investment, the Company is permitted to negotiate such proposal and notify Savitr Capital of the terms of such proposal. There is no assurance, however, that the Company will receive or can successfully negotiate any alternative proposal, or that it will ultimately enter into a transaction with Savitr Capital, whether on the basis of the Investment Agreement or otherwise. The Court found that the amount of the break-up fee and expense reimbursement to Savitr Capital under the Investment Agreement are reasonable and are likely to encourage bidding and, accordingly, granted the break-up fee and expense reimbursement priority status of administrative expenses under the U.S. Bankruptcy Code. The Court further ordered a reduction of the break-up fee if the Company enters into a transaction proposed or sponsored by the holders of the Company's Senior Secured Floating Rate Bond due 2012 as contemplated by the Investment Agreement. About Molecular Insight Cambridge, Massachusetts-based Molecular Insight Pharmaceuticals, Inc., is a clinical-stage biopharmaceutical company that provides services on the detection and treatment of various forms of cancer and other life-threatening diseases. The Debtor disclosed $36,453,000 in total assets and $198,829,000 in total debts as of September 30, 2010. Molecular Insight filed for Chapter 11 bankruptcy protection on December 9, 2010 (Bankr. D. Mass. Case No. 10-23355). Kramer Levin Naftalis & Franklin LLP serves as the Debtor's lead bankruptcy counsel. Alan L. Braunstein, Esq., at Riemer & Braunstein, LLP, serves as the Debtor's local Massachusetts counsel. Foley & Lardner LLP is the Debtor's special counsel. Tatum LLC, a division of SFN Professional Services LLC, is the Debtor's financial consultant. Omni Management Group, LLC, is the claims, and balloting agent. MOLECULAR INSIGHT: Common Stock Now Trades in Pink Sheets --------------------------------------------------------- As reported in the Troubled Company on January 21, 2011, NASDAQ filed a Form 25-NSE with the Securities and Exchange Commission to complete the delisting of Molecular Insight Pharmaceuticals, Inc.'s common stock from the Exchange. The delisting becomes effective on January 31, 2011, which is ten (10) days after the filing of Form 25-NSE. In a regulatory filing Monday, the Company discloses that its common stock is currently quoted on the Pink OTC Markets Inc. and has traded on the OTCQB(TM) Marketplace since December 21, 2010, under the symbol "MIPIQ". About Molecular Insight Cambridge, Massachusetts-based Molecular Insight Pharmaceuticals, Inc., is a clinical-stage biopharmaceutical company that provides services on the detection and treatment of various forms of cancer and other life-threatening diseases. The Debtor disclosed $36,453,000 in total assets and $198,829,000 in total debts as of September 30, 2010. Molecular Insight filed for Chapter 11 bankruptcy protection on December 9, 2010 (Bankr. D. Mass. Case No. 10-23355). Kramer Levin Naftalis & Franklin LLP serves as the Debtor's lead bankruptcy counsel. Alan L. Braunstein, Esq., at Riemer & Braunstein, LLP, serves as the Debtor's local Massachusetts counsel. Foley & Lardner LLP is the Debtor's special counsel. Tatum LLC, a division of SFN Professional Services LLC, is the Debtor's financial consultant. Omni Management Group, LLC, is the claims, and balloting agent. MOLECULAR INSIGHT: Court Approves CRT Investment as Fin'l Advisor ----------------------------------------------------------------- Judge Frank J. Bailey of the U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, approved the employment of CRT Investment Banking LLC as financial advisor to Molecular Insight Pharmaceuticals, Inc. Judge Bailey also approved the terms and provisions contained in the Engagement Letter, including the Indemnity Provision. Compensation and reimbursement of expenses will be subject to prior approval of the Court in accordance with the requirements under Sections 330 and 331 of the Bankruptcy Code. The U.S. Trustee retains all rights to object to CRT Investment's interim and final fee applications on all grounds. About Molecular Insight Cambridge, Massachusetts-based Molecular Insight Pharmaceuticals, Inc., is a clinical-stage biopharmaceutical company that provides services on the detection and treatment of various forms of cancer and other life-threatening diseases. The Debtor disclosed $36,453,000 in total assets and $198,829,000 in total debts as of September 30, 2010. Molecular Insight filed for Chapter 11 bankruptcy protection on December 9, 2010 (Bankr. D. Mass. Case No. 10-23355). Kramer Levin Naftalis & Franklin LLP serves as the Debtor's lead bankruptcy counsel. Alan L. Braunstein, Esq., at Riemer & Braunstein, LLP, serves as the Debtor's local Massachusetts counsel. Foley & Lardner LLP is the Debtor's special counsel. Tatum LLC, a division of SFN Professional Services LLC, is the Debtor's financial consultant. Omni Management Group, LLC, is the claims, and balloting agent. MOLECULAR INSIGHT: Court Approves Riemer as Local Counsel --------------------------------------------------------- Judge Frank J. Bailey of the U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, approved the employment of Riemer & Braunstein LLP as Molecular Insight Pharmaceuticals, Inc.'s local Massachusetts bankruptcy counsel. Among other things, Riemer & Braunstein is authorized to render legal services to Molecular Insight, including (i) providing legal advice with respect to the Debtor's powers and duties as debtor- in-possession; (ii) negotiating, drafting, and pursuing documentation necessary in Chapter 11 case; (iii) assisting with any disposition of the Debtor's assets, by sale or otherwise; and (iv) performing other legal services and legal advice, as may be necessary. Alan L. Braunstein, Esq., at Riemer & Braunstein, LLP, leads the engagement. On the Net: http://www.riemerlaw.com/ About Molecular Insight Cambridge, Massachusetts-based Molecular Insight Pharmaceuticals, Inc., is a clinical-stage biopharmaceutical company that provides services on the detection and treatment of various forms of cancer and other life-threatening diseases. The Debtor disclosed $36,453,000 in total assets and $198,829,000 in total debts as of September 30, 2010. Molecular Insight filed for Chapter 11 bankruptcy protection on December 9, 2010 (Bankr. D. Mass. Case No. 10-23355). Kramer Levin Naftalis & Franklin LLP serves as the Debtor's lead bankruptcy counsel. Alan L. Braunstein, Esq., at Riemer & Braunstein, LLP, serves as the Debtor's local Massachusetts counsel. Foley & Lardner LLP is the Debtor's special counsel. Tatum LLC, a division of SFN Professional Services LLC, is the Debtor's financial consultant. Omni Management Group, LLC, is the claims, and balloting agent. MOLECULAR INSIGHT: Court Approves Foley as Special Counsel ---------------------------------------------------------- Judge Frank J. Bailey of the U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, approved the application Molecular Insight Pharmaceuticals, Inc. to employ Foley & Lardner LLP as its special counsel. Foley & Lardner is authorized to render legal services to the Debtor pursuant to the parties' Engagement Letter, including in connection with general corporate, SEC compliance, intellectual property matters and potential related litigation that may continue or arise during the pendency of this Chapter 11 case. On the Net: http://www.foley.com/ About Molecular Insight Cambridge, Massachusetts-based Molecular Insight Pharmaceuticals, Inc., is a clinical-stage biopharmaceutical company that provides services on the detection and treatment of various forms of cancer and other life-threatening diseases. The Debtor disclosed $36,453,000 in total assets and $198,829,000 in total debts as of September 30, 2010. Molecular Insight filed for Chapter 11 bankruptcy protection on December 9, 2010 (Bankr. D. Mass. Case No. 10-23355). Kramer Levin Naftalis & Franklin LLP serves as the Debtor's lead bankruptcy counsel. Alan L. Braunstein, Esq., at Riemer & Braunstein, LLP, serves as the Debtor's local Massachusetts counsel. Foley & Lardner LLP is the Debtor's special counsel. Tatum LLC, a division of SFN Professional Services LLC, is the Debtor's financial consultant. Omni Management Group, LLC, is the claims, and balloting agent. MOMENTIVE PERFORMANCE: Seeks Term Loans Extension Until 2015 ------------------------------------------------------------ On January 21, 2011, Momentive Performance Materials Inc. announced its intent to seek amendments to its senior secured credit facilities to, among other things: (i) extend the maturity of term loans held by consenting lenders to May 5, 2015 and increase the interest rate with respect to such extended term loans; and (ii) subject to the requirement to make such offers on a pro rata basis to all term loan lenders or to all lenders holding revolving commitments, as applicable, allow the Company to extend the maturity of term loans or revolving commitments, as applicable, and for the Company to otherwise modify the terms of loans or revolving commitments in connection with such an extension. The proposed amendment of the senior secured credit facilities is subject to market and other conditions, and may not occur as described or at all. About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. The Company's balance sheet at Sept. 26, 2010, showed $3.33 billion in total assets, $3.83 billion in total liabilities, and a stockholders' deficit $497.78 million. Momentive carries a 'B3' corporate family and probability of default ratings from Moody's Investors Service. It has 'B-' issuer credit ratings from Standard & Poor's Ratings Services. MORTGAGE LENDERS: Judge Temporarily Blocks Bid to Destroy Docs. --------------------------------------------------------------- Scot J. Paltrow, writing for Reuters, says Bankruptcy Judge Peter J. Walsh on Monday temporarily blocked Mortgage Lenders Network USA from destroying 18,000 boxes of original loan files after federal prosecutors said documents in them may be needed as evidence in more than 50 criminal investigations. Judge Walsh granted a 30-day delay, and said he would hold another hearing on Mortgage Lenders' request. As reported by the Troubled Company Reporter, Neil Luria, the liquidating trustee for Mortgage Lenders, sought Judge Walsh's permission to destroy nearly 18,000 boxes of records now warehoused by document storage company, Iron Mountain Inc. According to Reuters, Mr. Luria said destruction is necessary to eliminate $16,000 per month in storage costs as he disposes of the last assets of the bankrupt company. The TCR also reported that Phil Milford and Dawn McCarty, writing for Bloomberg News, said the U.S. government objected to Mortgage Lenders' request. According to Bloomberg, Delaware U.S. Attorney Charles M. Oberly III argues that Mortgage Lenders' plan "threatens to impair federal law enforcement efforts." Mr. Oberly III also told the judge the company's records "may be relevant to pending federal criminal investigations into mortgage fraud." Bloomberg said Mr. Oberly proposed, as an alternative, to require Mr. Luria to provide government officials "with notice of the specific documents proposed to be destroyed" and "an opportunity to respond." About Mortgage Lenders Middletown, Connecticut-based Mortgage Lenders Network USA Inc. -- http://www.mlnusa.com/-- was once the 15th largest mortgage lender in the United States. The Company filed for Chapter 11 protection on February 5, 2007 (Bankr. D. Del. Case No. 07-10146). Pachulski Stang Ziehl & Jones LLP represents the Debtor. Blank Rome LLP represents the Official Committee of Unsecured Creditors. In the Debtor's schedules of assets and liabilities filed with the Court, it disclosed total assets of $464,847,213 and total debts of $556,459,464. The Honorable Peter J. Walsh approved the Company's liquidating Chapter 11 plan in February 2009. A full-text copy of the Debtor's First Amended Liquidating Plan under Chapter 11 of the Bankruptcy Code, dated December 19, 2008, is available at http://is.gd/1a3YGat no charge. NASSAU COUNTY, NY: State Oversight Board Seized Control Finances ---------------------------------------------------------------- David M. Halbfinger, writing for The New York Times, reports that a state oversight board on Wednesday seized control of Nassau County's finances, saying the county, one of the nation's wealthiest and most heavily taxed, had nonetheless failed to balance its $2.7 billion budget. "The county's 2011 budget is built on a foundation of sand," a board member, George J. Marlin, said, according to the report. The NY Times says the move, which came after months of steadily more ominous threats and a downgrade of Nassau's debt by a credit- rating agency in November, turns the oversight board into a control board, with vast power to rewrite the county's budget and veto labor contracts, borrowings and other important financial commitments. According to the NY Times, as a first step, the control board, the Nassau Interim Finance Authority, ordered the county government to rewrite its budget by Feb. 15 omitting cost-savings items that the board has called specious or too risky. The NY Times relates that while voting 6 to 0 to take over the county's finances, the Authority stopped short, for now, of declaring a financial emergency, which would also allow it to impose a wage freeze on county workers. But it said that remained a likelihood if Nassau's leaders did not comply with its demands to cooperate in bringing the county's spending into line with revenues by Feb. 15. NEXAIRA WIRELESS: Novatel Wireless Has 7.0% Equity Stake -------------------------------------------------------- In a Schedule 13G filing with the Securities and Exchange Commission on January 24, 2011, Novatel Wireless Inc. disclosed that it beneficially owns 5,169,906 shares of common stock of NexAira Wireless Inc. representing 7.0% of the shares outstanding. As of January 20, 2011, there were 72,268,522 shares of Nexaira Wireless Inc. common stock outstanding. About NexAira Wireless Headquartered in Vancouver, B.C., Nexaira Wireless Inc. (OTC BB: NXWI) -- http://www.nexaira.com/-- does business through its San Diego based operating subsidiary Nexaira, Inc. Nexaira, Inc., develops and delivers third and fourth generation (3G/4G) Wireless Routing Solutions that offer speed, reliability and security to carriers, mobile operators, service providers, value added resellers (VARS) and enterprise customers. The Company's balance sheet as of July 31, 2010, showed US$1.8 million in total assets, US$3.6 million in total liabilities, and a stockholders' deficit of US$1.8 million. As reported in the Troubled Company Reporter on February 1, 2010, BDO Seidman, LLP, in San Diego, expressed substantial doubt about the Company's ability to continue as a going concern, following its results for the fiscal year ended October 31, 2009. The independent auditors noted of the Company's losses from operations, negative cash flow from operations, and working capital and net capital deficits. NORD RESOURCES: Sprott Asset Discloses 7.8% Equity Stake -------------------------------------------------------- In an amended Schedule 13G filing with the Securities and Exchange Commission on January 24, 2011, Sprott Asset Management LP disclosed that it beneficially owns 8,952,300 common shares of Nord Resources Corporation representing 7.8% of the shares outstanding. As of September 30, 2010, there were 111,677,489 shares of common stock outstanding. 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. NORTH GENERAL: Examiner Taps Hughes Hubbard as Counsel ------------------------------------------------------ Richard Stern, the examiner appointed in the Chapter 11 cases of North General Hospital, et al., seeks permission from the U.S. Bankruptcy Court for the Southern District of New York to retain Hughes Hubbard & Reed LLP as his counsel, nunc pro tunc to January 10, 2011, the date the Court entered the order appointing the Examiner. The Examiner seeks to retain counsel to assist him in his investigation and related report of the allegations made by the U.S. Trustee in connection to certain postpetition payments made by the Debtors, among other things. The Examiner is a member of Hughes Hubbard. From a review of known creditors, the Examiner is satisfied that the firm represents no interest adverse to the parties in these cases with respect to the matters for which it will be employed. Hughes Hubbard is a disinterested person as the term is defined in Section 101(14) of the Bankruptcy Code. If additional information regarding the creditor body becomes available, the firm will update its conflict check and provide a supplemental declaration, if necessary. Hughes Hubbard will charge for its legal services on an hourly basis and seek reimbursement of actual expenses incurred on the Examiner's behalf. The Examiner also requests that all fees and related costs and expenses incurred by Hughes Hubbard be paid as administrative expenses of the estate pursuant to Sections 330(a), 331, 503(b) and 507(a)(1) of the Bankruptcy Code. The firm can be contacted at: Hughes Hubbard & Reed LLP One Battery Park Plaza New York, New York 10004-1482 Tel: (212) 837-6210 Fax: (212) 299-6210 About North General New York-based North General Hospital is a not-for-profit 200-bed community hospital in upper Manhattan that has serviced the communities of East and Central Harlem since the 1970s. The Hospital filed for Chapter 11 bankruptcy protection on July 2, 2010 (Bankr. S.D.N.Y. Case No. 10-13553). Charles E. Simpson, Esq., at Windels, Marx, Lane & Mittendorf, LLP, assists the Debtor in its restructuring effort. Garfunkel Wild, P.C., is the Debtor's special healthcare and regulatory counsel. Healthcare Management Solutions, LLC, is the Debtor's financial and healthcare reimbursement manager. Alston & Bird, LLP, serves as the Official Committee of Unsecured Creditors' counsel. NHB Advisors, Inc., is the financial advisor to the Committee. The Company disclosed $67 million in assets and $293 million in liabilities as of the Petition Date. OASIS PETROLEUM: Moody's Assigns 'B3' Corporate Rating ------------------------------------------------------ Moody's Investors Service assigned first time ratings to Oasis Petroleum Inc. in conjunction with its planned $300 million senior unsecured note offering. The assigned ratings are a B3 Corporate Family Rating, a Caa1 rating to the senior unsecured notes, and a SGL-2 Speculative Liquidity Rating. The rating outlook is stable. "The primary driver for Oasis' rating is its small scale and its limited operating history," said Stuart Miller, Moody's Senior Analyst. "The B3 Corporate Family Rating is highly prospective and it incorporates our expectation that the company will significantly increase proved developed reserves and production rates over the next two years." With the vast majority of the company's reserves located in the Williston Basin in the Bakken and Three Forks formations, there is a high degree of reserve concentration risk that is mostly offset by the quality of the resource play. The repeatable nature of the development program should translate into relatively low finding and development costs and a high capital efficiency ratio. While Oasis' drilling budget is projected to exceed its internally generated cash flow for the next two years, the company's remaining IPO proceeds along with the proceeds from the proposed $300 million senior unsecured note offering are expected to be sufficient to fund the company's planned seven rig drilling program. By the end of 2012, Moody's expects production to be at a level to generate positive free cash flow after capital expenditures. With the completion of the senior note offering, Oasis will have cash on hand of approximately $450 million, with additional liquidity provided by availability under a $600 million senior secured revolving credit facility which is currently unused. Availability is limited by a borrowing base which was recently affirmed at $150 million after taking into account the issuance of up to $350 million in senior unsecured debt. Based on Oasis' cash balances and unused revolving credit, we have assigned a Speculative Grade Liquidity Rating of SGL-2. The liquidity position is projected to decline over the next two years as the company uses its cash balance to fund its drilling program. This could lead to a downgrade in the liquidity rating sometime in 2012 based on the current liquidity forecast. The Caa1 rating on the proposed $300 million senior notes due 2019 reflects both Oasis' overall probability of default, to which Moody's assigns a PDR of B3, and a loss given default of LGD 4 (66%). The senior unsecured notes are notched one rating category lower than the B3 CFR to Caa1. The notching reflects the priority of claim that the senior secured revolving credit facility would be entitled to in a liquidation or bankruptcy. The stable ratings outlook incorporates Oasis' small size currently and the expectation that the company's scale and credit metrics will improve over the course of the two year drilling program. In the near term, a positive rating action is unlikely due to Oasis' limited scale. To be considered for a positive rating action, the company should have proved developed reserves of at least 40 MMBOE and average daily production in excess of 15 MBOE per day while maintaining debt to proved developed reserves below $10 per BOE. A negative action would be likely if growth in proved developed reserves and average daily production slows to the point where it is no longer reasonable to expect that Oasis will be able to achieve 15 MMBOE of proved developed reserves, average daily production of 10 MBOE per day, and debt to proved developed reserves of less than $10 per BOE by year end 2011. This is a first time rating for Oasis Petroleum Inc. The principal methodologies used in this rating were the Global Exploration and Production rating methodology published December 2008, Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Oasis Petroleum Inc. is headquartered in Houston, Texas. OASIS PETROLEUM: S&P Puts 'B-' Rating on Planned Note Offering -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Houston-based Oasis Petroleum Inc. (Oasis). The outlook is stable. S&P also assigned a 'B-' issue-level and '5' recovery rating to Oasis's planned $300 million senior unsecured note offering due 2019. The '5' recovery rating indicates S&P's expectations of modest (10% to 30%) recovery prospects in the event of a payment default. Oasis will use proceeds from the offering to fund future capital spending requirements. "The ratings on Oasis reflect the Company's relatively small asset base and production levels, geographic concentration, aggressive growth strategy, limited operating track record, previously weak accounting control processes, and negative cash flow generation," said Standard & Poor's credit analyst Lawrence Wilkinson. The ratings also reflect the Company's significant exposure to robust crude oil prices, a favorable cost structure, and sizeable resource play acreage position. S&P views Oasis's business profile as vulnerable. The Company's proved reserve base totaled 40 million barrel of oil equivalents (boe) as of Dec. 31, 2010, and production was more than 7,000 boe per day in the fourth quarter of 2010, which positions the Company on the smaller end of rated E&P companies. Oasis' reserves consist of 92% liquids and 43% proved developed. The Company has limited operating diversity with all of its operations concentrated in three areas of the Williston Basin. Given the intense nature of E&P development and existing transportation infrastructure in the play, profitability, affected by widening differentials, could come under pressure should planned takeaway capacity additions not come on line as currently anticipated. In addition, Oasis is pursuing an aggressive growth strategy which has resulted in the Company more than doubling reserves in 2010. S&P anticipate that the Company will pursue similar results in reserve and production growth in 2011. Despite these concerns, the Company has a favorable cost structure, solid exposure to robust crude oil prices, and sizeable resource play acreage from which to grow future production. The Company's operating expenses (lease operating expense, production taxes, and general and administrative expense excluding IPO- related costs) per boe were slightly less than $20 in the third quarter and should show further improvement as the Company grows its Bakken and Three Forks production. Given the Company's oil focus and the current pricing environment, the Company's profitability is strong relative to other issuers in the 'B' rating category. In addition, the Company has more than doubled its reserves in each of the past two years, albeit on a small base. Given the Company's sizeable acreage position in the Williston Basin (over 300,000 acres at the end of 2010) and the relative low-risk nature of resource play development, the Company has the potential from which to continue its sizeable reserve and production gains. The stable outlook reflects S&P's view that Oasis will be able to fund its aggressive drilling program in a manner that does not erode the Company's credit protection measures. S&P would consider a positive rating action if the Company is able to successfully achieve its reserve and production growth targets for 2011. Alternatively, S&P would consider a downgrade if the Company were to materially increase debt funding such that leverage approaches 5x. OFFICEMAX INC: A&P Fights Lawsuit Over Executive Poaching Claims ---------------------------------------------------------------- Dow Jones' DBR Small Cap reports that OfficeMax Inc. said its former chief operating officer took more than a stapler on his way out the door. According to the office supplier, Sam Martin poached two other key executives when he jumped ship to grocer Great Atlantic & Pacific Tea Co. According to the report, in a lawsuit previously brought against A&P and Martin for breach of contract, OfficeMax says its employment agreement with Martin prevented him from hiring his former colleagues, Paul Hertz and Carter Knox, when he took the chief executive position at the grocery-store chain. The report relates that officeMax is seeking a restraining order against Martin to prevent him from nabbing any other OfficeMax workers. But now A&P is seeking to send that lawsuit to the back of the checkout line, saying in recently filed court papers that the company's bankruptcy prevents OfficeMax from continuing the lawsuit it first filed in August 2010, the report notes. OfficeMax, Incorporated is the third-largest dedicated retailer of office supplies in the U.S., with annual revenues of around $8 billion. It operates 1,024 stores throughout the U.S. and Mexico, and also maintains a substantial contract business which caters to commercial customers. PALM HARBOR: Wants Private Sale of Georgia Plant for $1.05-Mil. --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Palm Harbor Homes Inc. intends to sell a plant it doesn't need in LaGrange, Georgia, for $1.05 million. Having marketed the plant for two years without another buyer, Palm Harbor wants the bankruptcy judge to approve the sale at a February 17 hearing without holding an auction. The buyer is VSP Logis Inc. In 2008, Mr. Rochelle, citing a court fling, recounts that Palm Harbor had an offer for $1.25 million. The offer was rejected at the time as insufficient. Since then, the market has declined further. The plant has 221,000 square feet situated on 23.3 acres. According to Mr. Rochelle, the remainder of the facilities will go up for auction March 1. That the opening bid will be an offer from Fleetwood Enterprises Inc., a venture between Cavco Industries Inc. and a fund advised by Third Avenue Management LLC. The hearing for approval of the sale will be held on March 4. About Palm Harbor Addison, Texas-based Palm Harbor Homes, Inc. -- http://www.palmharbor.com/-- manufactures and markets factory- built homes. The Company markets nationwide through vertically integrated operations, encompassing manufactured and modular housing, financing and insurance. Palm Harbor filed for Chapter 11 bankruptcy protection on November 29, 2010 (Bankr. D. Del. Case No. 10-13850). It disclosed $321,263,000 in total assets and $280,343,000 in total debts. Affiliates Palm Harbor Albemarle, LLC (Bankr. D. Del. Case No. 10-13849), Palm Harbor Real Estate, LLC (Bankr. D. Del. Case No. 10-13851), Palm Harbor GenPar, LLC (Bankr. D. Del. Case No. 10-13852), Palm Harbor Manufacturing, LP (Bankr. D. Del. Case No. 10-13853), and Nationwide Homes, Inc. (Bankr. D. Del. Case No. 10-13854) filed separate Chapter 11 petitions. Brian Cejka at Alvarez & Marsal is the Debtors' chief restructuring officer. Raymond James And Associates, Inc., is the Debtors' investment banker. Alvarez & Marshal North America, LLC, is the Debtors' financial advisor. BMC Group, Inc., is the Debtors' claims agent. Pachulski Stang Ziehl & Jones LLP serves as counsel to the Official Committee of Unsecured Creditors PATHWAY HOLDINGS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Pathway Holdings, LLC 5002 US 41 North Palmetto, FL 34221 Bankruptcy Case No.: 11-01162 Chapter 11 Petition Date: January 25, 2011 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: David S. Jennis, Esq. JENNIS & BOWEN, P.L. 400 N Ashley Drive, Suite 2540 Tampa, FL 33602 Tel: (813) 229-1700 Fax: (813) 229-1707 E-mail: ecf@jennisbowen.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/flmb11-01162.pdf The petition was signed by Stephen Gans, managing partner. Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Organica Biotech, Inc. 11-01164 1/25/2010 Techno-Org, LLC 11-01163 1/25/2010 PATIENTFIRST HEALTHCARE: Expects to File Schedules February 2 ------------------------------------------------------------- Diane Stafford, writing for the Kansas City Star, reports that John Cruciani, a lawyer representing the Headache & Pain Center and Doctors Hospital LLC, said an asset schedule is to be filed with the bankruptcy court on Feb. 2, 2011. According to the report, 10 doctors at the Hospital are continuing to see patients while bankruptcy cases work their way through the Kansas courts. About PatientFirst, et al. The Headache & Pain Center, P. A., PatientFirst Healthcare Alliance, P.A., and Doctors Hospital, LLC are three affiliated health clinics in Leawood, Kansas. The Headache & Pain Center, P. A., (Bankr. D. Kan. Case No. 10- 24404), PatientFirst Healthcare Alliance, PA, (Bankr. D. Kan. Case No. 10-24402), and Doctors Hospital, LLC (Bankr. D. Kan. Case No. 10-24403) filed for Chapter 11 protection on Dec. 31, 2010. The Debtors each estimated $0 to $50,000 in assets and $1,000,001 to $10,000,000 in debts in their Chapter 11 petitions. John J. Cruciani, Esq., Mark T. Benedict, Esq., and Michael D. Fielding, Esq., at Husch Blackwell LLP, in Kansas City, Missouri, represents the Debtors. PERFORMANCE FOOD: S&P Puts 'B' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Richmond, Va.-based Performance Food Group Inc. (PFG; formerly Vistar Corp.). The outlook is stable. As of Oct. 2, 2010, total debt outstanding was about $880 million. "Our rating on PFG reflects S&P's belief that the its weak credit measures could improve over the next 12 to 24 months through free cash flow generation," said Standard & Poor's credit analyst Jerry Phelan, "despite the Company facing a highly competitive environment and the risk of higher food/fuel costs." However, financial policy remains a key rating factor since the Company had proposed in December 2010 but ultimately cancelled a $550 million senior unsecured note offering, which included a $250 million debt-financed shareholder dividend. Credit measures would have weakened considerably, including close to 7.0x leverage, compared to about 5.7x currently. RADIENT PHARMACEUTICALS: Gets NYSE Amex Delisting Notice -------------------------------------------------------- Radient Pharmaceuticals Corporation received a notice dated January 25, 2010 from the NYSE Amex advising that as of January 25, 2011, RPC remains non-compliant with Section 1003(a)(iv), and Sections 1003(a)(i), 1003(a)(ii), 1003(a)(iii) and 704 of the Exchange's continued listing standards. Therefore, RPC's securities are subject to delisting from the Exchange. Based on recent operational progress, RPC intends to appeal the delisting determination and is seeking an oral hearing before the Exchange's Listing Qualifications Panel to make such appeal. Pursuant to the Exchange's Company Guide, such hearing should occur within 45 days of the date our request for such hearing is filed, which will be on or before February 1, 2011. The request for appeal is expected to stay any action with respect to the Amex's Determination to prohibit the continued listing of RPC's securities and allow the continued listing of RPC's common stock on NYSE Amex until the Amex decides the suspension of trading is in the public's best interest or after the hearing when the Panel renders its decision. At the hearing, RPC intends to provide additional details on the original plan RPC submitted to the Exchange on January 22, 2010 to gain compliance. The Company will also present its latest operational progress report, the milestones achieved, and request the Panel allow RPC additional time within which to regain compliance and maintain a listing on the Exchange. There can be no assurance that the Panel will grant the Company's request for continued listing on the NYSE Amex. Operational Status Radient Pharmaceuticals will continue its normal course of business operations notwithstanding the status of the Amex listing. As referenced in its January 10, 2011 press release related to the AMEX approval of various debt for equity exchanges, the Company currently has converted or exchanged approximately $16.6 million in debt, interest, and penalties, and anticipates converting or exchanging approximately an additional $8 million in debt during the first quarter of 2011. After these conversions and exchanges, the Company will have approximately $21 million in shareholder's equity. It should also be noted that, as of January 26, 2011, RPC has approximately 88 million shares outstanding, and the Company is hopeful it can complete additional financings in the first quarter 2011. RPC believes the debt for equity exchanges, progress towards meeting milestones, combined with the anticipated financing will enable RPC to regain compliance with AMEX listing requirements. RPC Contact Information: For additional information on Radient Pharmaceuticals, ADI and its portfolio of products visit the Company's corporate website at www.radient-pharma.com. For Investor Relations information contact Kristine Szarkowitz at IR@RadientPharma.com or 1.206.310.5323. About Radient Pharmaceuticals Headquartered in Tustin, Calif., Radient Pharmaceuticals Corporation -- http://www.Radient-Pharma.com/-- is engaged in the research, development, manufacturing, sale and marketing of its ONKO-SURE(TM) a proprietary IVD Cancer Test in the United States, Canada, China, Chile, Europe, India, Korea, Taiwan, Vietnam and other markets throughout the world. Radient said in October 2010 it incurred a trigger event on the 12% Convertible Notes issued in first and second quarter of 2010 due to its failure to have the related registration statement declared effective by June 1, 2010. The Company filed on Sept. 7, 2010, an Event of Default under those same notes occurred since it did not hold the related shareholder meeting by August 31, 2010. As reported in the Troubled Company Reporter on April 19, 2010, KMJ Corbin & Company LLP, in Costa Mesa, Calif., 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 incurred a significant operating loss and negative cash flows from operations in 2009 and had a working capital deficit of $4.2 million at December 31, 2009. The Company's balance sheet at Sept. 30, 2010, showed $23.56 million in total assets, $34.22 million in total liabilities, and a stockholders' deficit of $10.66 million. RIVER ROAD: Lenders May or May Not Take O'Hare Hotel Through Plan ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Longview Ultra Construction Loan Investment Fund and co-lender U.S. Bank N.A. filed a Chapter 11 plan where they hope to take ownership of the InterContinental Chicago O'Hare hotel near Chicago's largest airport from River Road Hotel Partners LLC. According to Mr. Rochelle, the Plan will give the lenders ownership in exchange for their $138.7 million in claims. The Lenders cite an appraisal as valuing the property at $86 million. The Lenders will waive their deficiency claims if they take title through the Plan. Other unsecured creditors are to receive about 10% through cash also supplied by the lenders. Mr. Rochelle notes that the Lenders' Plan could be upset depending on the outcome of an appeal River Road was allowed to take directly to the U.S. Court of Appeals in Chicago. If a pending state court lawsuit concludes with a ruling that some $9 million in mechanics' liens are ahead of the Lenders' mortgages, the Lenders will pay the claims in full. If the mechanics' liens are subordinate, the lenders will supply enough cash for a 10% recovery. In August, the bankruptcy judge denied a motion by the Debtor for sale procedures and held that the lenders were being improperly denied the right to bid their secured claims rather than cash. The bankruptcy judge allowed River Road to take a direct appeal to the Court of Appeals, overstepping an intermediate appeal in the U.S. District Court, Mr. Rochelle notes. Mr. Rochelle says the appeal will test whether the Court of Appeals for the 7th Circuit goes along with rulings from sister courts of appeal in Philadelphia and New Orleans which held that lenders can be denied a credit bid so long as they receive the equivalence of the value of their mortgages, which can be less than the face amount of the mortgage. Bloomberg relates that the Lenders' Plan was made possible when the bankruptcy judge in Chicago terminated in August River Road's exclusive right to propose a plan. About River Road Hotel Partners River Road Hotel Partners, LLC, developed and manage the InterContinental Hotel Chicago O'Hare located in Rosemont, Illinois. Affiliate RadLAX Gateway Hotel LLC owns the Radisson hotel at Los Angeles International Airport. Both are ultimately controlled owned by Harp Group. River Road and its affiliates filed Chapter 11 in Chicago on August 17, 2009 (Bankr. N.D. Ill. Lead Case No. 09-30029). Based in Oak Brook, Illinois, River Road estimated assets of as much as $100 million and debt of as much as $500 million in its Chapter 11 petition. RadLAX and its affiliates filed a separate chapter 11 petition (Bankr. N.D. Ill. Case No 09-30047), estimating assets at $50 million to $100 million. David M. Neff, Esq., at Perkins Coie LLP, serves as counsel to the River Road and RadLAX debtors. The two cases, however, are not jointly administered. RUGGED BEAR: Files for Chapter 11 Due to Cash Woes -------------------------------------------------- The Rugged Bear Company filed a petition for protection under Chapter 11 of the United States Bankruptcy Code due to its increasing liquidity constraints and a deteriorating relationship with some of its key landlords and vendors. The Company said in a statement that the filing will afford Rugged Bear an opportunity to close underperforming stores and to reorganize around its more profitable locations. Rugged Bear recently retained the services of Consensus Advisers, LLC, a Boston based financial advisor that is experienced in restructuring and reorganizing small companies like the children's clothier, to aid it in the creation of a restructuring plan and to negotiate on its behalf with vendors and landlords. "We appreciate the amazing loyalty of all of our Rugged Bear customers and employees who continue to support the company and the changes that have to be made," said Garrett Larson, President and Chief Executive Officer of Rugged Bear. "It's no secret that leases for stores negotiated even five years ago do not represent in many cases the economics needed to support a small retailer. We have the opportunity to make substantive changes to the basic and fundamental profit model of our store base." "We are most excited about the success of our new web presence where we continue to be amazed by double digit growth month after month," Mr. Larson continued. "Its one of the absolute key aspects of our business model going forward." Rugged Bear also announced that Board of Directors member Bill End had previously decided to transition his role from Board member to Senior Advisor to the Company. "By stepping down from the Board and moving into an advisory role, Bill will be able to more effectively and directly apply his knowledge of and experience in the retail sector to the Rugged Bear team," said Frank Jenkins, Chairman of Rugged Bear. "We look forward to Bill continuing to work with us in this new capacity, and feel his guidance will be extremely valuable to the Company going forward." The Rugged Bear(R) -- http://www.ruggedbear.com/-- is a chain of retail children's clothing stores located in the Northeast US. For the last 30 years, Rugged Bear(R) has offered high-quality, value-priced, durable and fashionable children's active wear to families in New England, New York and New Jersey. RUGGED BEAR: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: The Rugged Bear Company 125 Lenox Street Norwood, MA 02026 Bankruptcy Case No.: 11-10577 Type of Business: The Rugged Bear Company is a chain of retail children's clothing stores located in the Northeast U.S. For the last 30 years, Rugged Bear has offered high-quality, value-priced, durable and fashionable children's active wear to families in New England, New York and New Jersey. Chapter 11 Petition Date: January 25, 2011 Bankruptcy Court: U.S. Bankruptcy Court District of Massachusetts (Boston) Bankruptcy Judge: Henry J. Boroff Debtor's Counsel: Charles A. Dale, III, Esq. K&L GATES LLP State Street Financial Center One Lincoln Street Boston, MA 02111 Tel: (617) 261-3112 Fax: (617) 261-3175 Debtor's Financial Advisor: CONSENSUS ADVISERS, LLC Estimated Assets: $10 million to $50 million Estimated Debts : $10 million to $50 million The petition was signed by Garrett Larson, president and CEO. Debtor's List of 30 Largest Unsecured Creditors: Entity/Person Nature of Claim Claim Amount ------------- --------------- ------------ Detwiler Fenton Group, Inc. Noteholder $755,000 100 High Street Suite 2800 Boston, MA 02110 The Boston Globe Non-trade vendor $278,308 P.O. Box 415071 Boston, MA 02241-5071 Kamik/Genfoot Vendor $242,201 EEAN Fashions Vendor $169,201 Urstadt Biddle Properties Inc. Rent $159,229 Stop & Shop Supermarket Co Rent $121,752 Chestnut Hill Shopping Rent $115,689 Cotton Kids/Beadecked Inc. Vendor $109,944 Nagog Mall, LLC Rent $80,946 Chestnut Hill Shopping Center LLC Turtle Fur Company & Nordic Vendor $78,463 Gear, Inc. Kliger Weiss Infosystems Non-trade Vendor $76,705 Wee Ones, Inc. Vendor $73,555 Tophand Innovative Vendor $73,305 Accessories Ltd. Edens & Avant Wellesley Rent $70,286 (E&A), LLC Washington Shoe Company Vendor $71,860 Merrell Wolverine World Vendor $68,212 Wide, Inc. Artimonda SA Vendor $66,819 Century Partners LTD Rent $65,868 DZ Trading LTS Vendor $65,742 Cotton Resources Vendor $63,087 Globaltex Inc. SCO GROUP: Trustee Picks UnXis as Buyer for Assets -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Chapter 11 trustee for software developer SCO Group Inc. held an auction and selected unXis Inc. as having the best offer to buy the business of selling Unix system software products and services. The sale will be up for approval at a Feb. 16 hearing. According to the report, unXis is to pay $600,000 cash and give the trustee warrants for 3% of its stock. The warrants will be exercisable after unXis has raised $4 million in equity financings, Mr. Rochelle says. The exercise price will be price for the stock paid by the investor in the last round of financing that brings the total to $4 million. Mr. Rochelle recounts that in August 2009, the bankruptcy judge called for a Chapter 11 trustee, approximately one month before the U.S. Court of Appeals in Denver ruled in SCO's favor after six years of litigation with Waltham, Massachusetts-based Novell Inc. The case went back to the district court where the judge and jury largely ruled against SCO with regard to rights in certain Unix software incorporated in network systems. The trustee sought permission to hold the auction after SCO Group's interest in Unix was clarified. About SCO Group The SCO Group (SCOXQ.PK) -- http://www.sco.com/-- is a provider of UNIX software technology. Headquartered in Lindon, Utah, SCO has a worldwide network of resellers and developers. The Company and its affiliate, SCO Operations Inc., filed for Chapter 11 protection on September 14, 2007 (Bankr. D. Del. Lead Case No. 07-11337). Paul Steven Singerman, Esq., and Arthur Spector, Esq., at Berger Singerman P.A., represent the Debtors in their restructuring efforts. James O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are the Debtors' Delaware and conflicts counsel. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. As of January 31, 2009, the Company had $8.78 million in total Assets, $13.30 million in total liabilities, and $4.52 million in stockholders' deficit. SEXY HAIR: Plan Sponsor Open to Competing Bids ---------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that the unit of buyout firm TSG Consumer Partners that has lined up to sponsor Sexy Hair Concepts LLC's restructuring plan said it is willing to see the assets opened up to competing bids in response to creditor pressure. In a prior report, DBR said unsecured creditors have urged a judge to halt the "needlessly rapid pace" at which Sexy Hair is galloping toward a reorganization they say will only serve to benefit the company's lenders, at their expense. Chatsworth, California-based Sexy Hair Concepts, LLC, is an operating company engaged in the development, distribution and marketing of premium quality hair care products and brands. It outsources the production and manufacture of its various lines of premier hair care products and operates from a single facility in Chatsworth, California, that houses its corporate offices and distribution warehouse. It works with several distributors domestically and internationally, but does not maintain any other offices. Sexy Hair filed for Chapter 11 bankruptcy protection on December 21, 2010 (Bankr. C.D. Calif. Case No. 10-25922). Scott F. Gautier, Esq., at Peitzman, Weg & Kempinsky LLP, serves as Sexy Hair's bankruptcy counsel. According to its schedules, Sexy Hair disclosed $78,000,000 in total assets and $91,141,147 in total debts as of the Petition Date. Sexy Hair's bankruptcy case is jointly administered with those of Ecoly International, Inc., a California corporation, and Luxe Beauty Midco Corporation. Ecoly is the lead case. Klee, Tuchin, Bogdanoff & Stern LLP serves as counsel for the Official Committee of Unsecured Creditors. SEXY HAIR: Has Interim Nod to Use Cash Collateral Until Feb. 3 -------------------------------------------------------------- Sexy Hair Concepts, LLC, et. al., obtained, for the second time, interim authorization from the U.S. Bankruptcy Court for the Central District of California to use their lenders' cash collateral until February 3, 2011. On January 5, 2011, the Court issued the first interim order authorizing the use of cash collateral until January 13, 2011. Prior to the Petition Date, the operating debtor Sexy Hair financed its operations and growth through the proceeds from the sales of its products, the use of a secured credit facility maintained with the Bank of Montreal, as the Administrative and Collateral Agent for the secured lender group, pursuant to the terms of a Credit Agreement dated April 9, 2008, and the use of a subordinated credit facility with Northwestern Mutual Life Insurance Company pursuant to the terms of the Securities Purchase and Guaranty Agreement of the same date. As of the date hereof, the outstanding pre-petition amount owing under the Credit Agreement is not less than $62,580,138.16. The Senior Secured Lenders assert valid, perfected and enforceable security interest in all of the Debtors' assets, including assets that constitute cash collateral. As reported by the Troubled Company Reporter on January 4, 2011, the Debtors asked for authorization from the Court to use the cash collateral through mid-March 2011. Scott F. Gautier, Esq., at Peitzman, Weg & Kempinsky LLP, explains that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. In exchange for the use of cash collateral, the Senior Secured Lenders will be granted replacement liens. The Debtors will use the money pursuant to a weekly budget, a copy of which is available for free at: http://bankrupt.com/misc/SEXY_HAIR_amendedbudget.pdf Chatsworth, California-based Sexy Hair Concepts, LLC, is an operating company engaged in the development, distribution and marketing of premium quality hair care products and brands. It outsources the production and manufacture of its various lines of premier hair care products and operates from a single facility in Chatsworth, California, that houses its corporate offices and distribution warehouse. It works with several distributors domestically and internationally, but does not maintain any other offices. Sexy Hair filed for Chapter 11 bankruptcy protection on December 21, 2010 (Bankr. C.D. Calif. Case No. 10-25922). Scott F. Gautier, Esq., at Peitzman, Weg & Kempinsky LLP, serves as Sexy Hair's bankruptcy counsel. According to its schedules, Sexy Hair disclosed $78,000,000 in total assets and $91,141,147 in total debts as of the Petition Date. Sexy Hair's bankruptcy case is jointly administered with those of Ecoly International, Inc., a California corporation, and Luxe Beauty Midco Corporation. Ecoly is the lead case. Klee, Tuchin, Bogdanoff & Stern LLP serves as counsel for the Official Committee of Unsecured Creditors. SEXY HAIR: U.S. Trustee Appoints 5 Members to Creditors Panel ------------------------------------------------------------- Peter C. Anderson, the U.S. Trustee for Region 16, appoints five members to the Official Committee of Unsecured Creditors in Sexy Hair Concepts, LLC, et. al.'s Chapter 11 cases. The Committee members include: 1) Kik Custom Products Gabriela Arzuman Director, Credit and AR 101 Macintosh Boulevard Concord Ontario, Canada LYK 4R5 Phone: (905) 660-2783 2) 220 Laboratories Inc. Yoram Fishman 2375 3rd. Street Riverside, CA. 91507 Phone: (818) 400-7331 3) Tarnik, Inc. DBA, PDA Group Diane Klymcius Credit Manager 24935 Avenue Kearny Valencia, CA 91355 Phone: (661) 607-0600 4) The Northwestern Mutual Life Insurance Company and Northwestern Mutual Capital Mezzanine Fund I, LP Timothy S. Collins or Brad Kunah Managing Director, Northwestern Investment Management Company 720 E. Wisconsin Avenue Milwaukee, WI 53202-4797 Phone: (414) 665-1577 5) Carastro's & Company Hair Design Class Action Plaintiff Lawrence Carastro Owner 3101 Roswell Road, Suite U Marietta, GA. 30062 Phone: (770) 861-3089 Chatsworth, California-based Sexy Hair Concepts, LLC, is an operating company engaged in the development, distribution and marketing of premium quality hair care products and brands. It outsources the production and manufacture of its various lines of premier hair care products and operates from a single facility in Chatsworth, California, that houses its corporate offices and distribution warehouse. It works with several distributors domestically and internationally, but does not maintain any other offices. Sexy Hair filed for Chapter 11 bankruptcy protection on December 21, 2010 (Bankr. C.D. Calif. Case No. 10-25922). Scott F. Gautier, Esq., at Peitzman, Weg & Kempinsky LLP, serves as Sexy Hair's bankruptcy counsel. According to its schedules, Sexy Hair disclosed $78,000,000 in total assets and $91,141,147 in total debts as of the Petition Date. Sexy Hair's bankruptcy case is jointly administered with those of Ecoly International, Inc., a California corporation, and Luxe Beauty Midco Corporation. Ecoly is the lead case. Klee, Tuchin, Bogdanoff & Stern LLP serves as counsel for the Official Committee of Unsecured Creditors. SEXY HAIR: Creditors Committee Taps Klee Tuchin as Counsel ---------------------------------------------------------- The Official Committee of Unsecured Creditors in Sexy Hair Concepts LLC, et al.'s Chapter 11 bankruptcy cases asks for authorization from the U.S. Bankruptcy Court for the Central District of California to retain Klee, Tuchin, Bogdanoff & Stern LLP as counsel, nunc pro tunc to January 4, 2011. Klee Tuchin will: a. advise the Committee regarding matters of bankruptcy law and related corporate law as they relate to the Debtors' Chapter 11 cases; b. represent the Committee in proceedings or hearings in the the Court in accordance with its statutory right to appear and be heard on any issue in the Debtors' cases; c. advise the Committee concerning the requirements of the Bankruptcy Code, federal and local rules relating to the administration of these cases, and the effect of these cases on the Committee; and d. advise the Committee of its powers and duties and assist and represent the Committee in connection with the exercise and discharge thereof. Klee Tuchin will be paid based on the rates of its professionals: Jonathan S. Shenson $680 Courtney E. Pozmantier $490 Shanda D. Dahl, Paralegal $250 Jonathan S. Shenson, Esq., at Klee Tuchin, assures the Court that the firm is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. Chatsworth, California-based Sexy Hair Concepts, LLC, is an operating company engaged in the development, distribution and marketing of premium quality hair care products and brands. It outsources the production and manufacture of its various lines of premier hair care products and operates from a single facility in Chatsworth, California, that houses its corporate offices and distribution warehouse. It works with several distributors domestically and internationally, but does not maintain any other offices. Sexy Hair filed for Chapter 11 bankruptcy protection on December 21, 2010 (Bankr. C.D. Calif. Case No. 10-25922). Scott F. Gautier, Esq., at Peitzman, Weg & Kempinsky LLP, serves as Sexy Hair's bankruptcy counsel. According to its schedules, Sexy Hair disclosed $78,000,000 in total assets and $91,141,147 in total debts as of the Petition Date. Sexy Hair's bankruptcy case is jointly administered with those of Ecoly International, Inc., a California corporation, and Luxe Beauty Midco Corporation. Ecoly is the lead case. SUMMIT BUSINESS: Files for Chapter 11 with Pre-Negotiated Plan -------------------------------------------------------------- Summit Business Media disclosed approvals from 83% of its lenders for a debt restructuring plan that will cut its outstanding debt obligations by more than half, or approximately $135 million, and materially enhance the Company's financial position. The agreement by most of the Company's lenders was achieved in advance of its filing of a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court in Wilmington, Delaware. The Company said it expects to emerge from the restructuring during the first half of 2011. The plan provides for Summit's continued normal operations. A voluntary Chapter 11 bankruptcy is a formal, court-supervised procedure that allows otherwise healthy companies to address balance sheet issues, achieve consensus among their financial constituencies and emerge from the process with appropriate debt levels. Other major B2B media companies that have successfully gone through this process include Penton, Cygnus and Questex, among others. "Summit Business Media is a fundamentally sound and profitable company," said Andrew L. Goodenough, President and CEO. "We believe that Summit is well-positioned to take advantage of economic growth coming out of this unusually deep downturn as the industries we serve rebound. We look forward to a speedy resolution of our balance sheet restructuring while we remain focused on delivering quality products for readers and marketers in the markets we serve." He added, "While Summit has emerged from the downturn as a smaller but healthier company, we have too much debt to support our current business operations, left over from when Summit was a larger, acquisition-oriented company. We view this reorganization process as the last step in a two-year strategic refocusing of Summit on our core markets." Subject to court approval, Summit will use its bank balances, currently in excess of $10 million in cash, and cash flow from its operations to meet its working capital needs throughout the reorganization process. Any pre-filing advertising, subscription and event contracts will be honored in full. Summit will pay all vendors for goods and services received during the reorganization process, and Summit employees will receive uninterrupted wages and benefits. In addition, the Company's lenders have agreed to provide a debtor-in-possession (DIP) credit facility of $5 million to support the Company's additional working capital needs, if any, during the restructuring. About Summit Business Media Summit Business Media -- http://www.summitbusinessmedia.com-- claims to be a leading B2B media and information company serving the insurance, investment advisory, professional services and mining investment markets through a variety of channels, including print, online and live events. Summit provides breaking news and analysis, in-depth practice management strategies, business- building techniques and actionable data to the markets it serves. Through its Media and Reference Divisions, Summit publishes 16 magazines, 20 websites and 150 reference titles. Summit's Event Division hosts a dozen conferences across the spectrum of markets the Company services. Summit's Data Division is the leading data provider of financial, marketing and benefits information on corporations, insurance companies and life, benefits and property- casualty agents. Summit employs nearly 400 employees in ten offices across the United States. SUMMIT BUSINESS: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Summit Business Media Holding Company fdba B2B Media Holding Corp. 475 Park Avenue South New York, NY 10016 Bankruptcy Case No.: 11-10231 Debtor-affiliates that filed separate Chapter 11 petitions: Entity Case No. ------ -------- Summit Business Media Intermediate Holding Company 11-10232 The National Underwriter Company 11-10233 Research Holdings, Ltd. 11-10234 Futures Magazine, Inc. 11-10235 NUCO Business Information, LLC 11-10236 Agent Media Corp. 11-10237 Judy Diamond Associates, Inc. 11-10238 Mining INDABA, LLC 11-10239 Chapter 11 Petition Date: January 25, 2011 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Debtors' Legal Counsel: Kimberly E. C. Lawson, Esq. Kathleen Murphy, Esq. REED SMITH LLP 1201 Market Street, Suite 1500 Wilmington, DE 19801 Telephone: (302) 778-7500 Facsimile: (302) 778-7575 E-mail: klawson@reedsmith.com - and - J. Andrew Rahl, Jr., Esq. REED SMITH LLP 599 Lexington Avenue New York, NY 10022 Telephone: (212) 521-5400 Facsimile: (212) 521-5450 Debtors' Financial Advisor: LINCOLN PARTNERS ADVISORS LLC 400 Madison Ave, 21st Floor New York, NY 10017 Joseph J. Radecki, Jr, Managing Director Telephone: (212) 277-8117 Facsimile (212) 277-8101 Debtors' Claims Agent: GARDEN CITY GROUP Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 The petition was signed by Thomas M. Flynn, chief operating officer and chief financial officer. Debtor's List of 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wind Point Partners VI, L.P. Management Fees $4,125,531 Wind Point Partners V, L.P. c/o Wind Point Partners 676 North Michigan Avenue, Suite 3700 Chicago, IL 60611 Publishers Press Incorporated Trade Debt $657,881 100 Frank E. Simon Avenue Shepherdsville, KY 40165 Imperial Capital LLC Professional Fees $312,500 2000 Avenue of the Stars, 9th Floor South Los Angeles, CA 90067 NAIC General Contract $289,978 P.O. Box 879660 Kansas City, MO 64187-9660 Bulkley Dunton Publishing Grp Nuco Trade Debt $269,131 P.O. Box 403565 Atlanta, GA 30384-3565 Marriott International Trade Debt $149,103 KPMG LLP Professional Fees $118,000 iPacesetters LLC Trade Debt $93,824 Hallmark Data Systems, LLC Trade Debt $89,102 Gaylord Opryland Hotel Contract $82,420 Microsoft Services Contract $71,260 BPA Worldwide Trade Debt $48,750 Advertiser Printers, Inc. Trade Debt $46,789 Applied Info Group Trade Debt $46,518 MMC Norilsk Nickel Africa Customer Refund $41,547 O. Alfred Granum, CLU Contract $39,869 CDW Direct, LLC Trade Debt $35,743 Blue Valley Telemarketing Trade Debt $33,678 Roadsend, Inc. Contract $33,000 Investor's Business Daily Trade Debt $29,927 Barry Aberstein Contract $28,299 Embassy Suites Contract $26,548 American Business Media Trade Debt $25,481 Victor Graphics, Inc. Trade Debt $24,987 Baxter Research Center Inc. Trade Debt $21,613 Donald F. Cady Contract $20,519 Standard & Poor's Contract $19,500 Office Partners 360 Inc. Professional Fees $18,140 Medcomps Corporation Trade Debt $17,765 Inquiry Management Systems Inc. Trade Debt $17,042 TERRESTAR NETWORKS: Committee Wins Order on Confidential Info. -------------------------------------------------------------- The Official Committee of Unsecured Creditors in TerreStar Networks Inc.'s cases sought and obtained an order from the Bankruptcy Court determining that it is not authorized or required to provide access to confidential information or privileged information pursuant to Section 1102(b)(3)(A) of the Bankruptcy Code to any creditor that it represents. "Such relief is not only in the best interests of the [Debtors'] estates, but also will protect the Committee by making clear that it is not violating the Bankruptcy Code by refusing to provide such information to creditors," David M. Posner, Esq., at Otterbourg Steindler Houston & Rosen P.C., in New York, contends, on behalf of the Committee. Section 1102(b)(3) provides that an official committee appointed under Section 1102(a) will "provide access to information for creditors who hold claims of the kind represented by that committee; but does not indicate how an official committee should provide access to "information," and, more importantly, does not indicate the nature, scope, or extent of the "information" that an official committee must provide to creditors who hold claims of the kind represented by such committee. The Debtors are in a competitive industry and are currently engaged in a marketing-and-sales process, Mr. Posner tells the Court. The dissemination of Confidential Information to parties who are not bound by any confidentiality agreement directly with the Debtors, he asserts, could have serious negative consequences for the Debtors. If the Debtors' general creditors could require the Committee to give them access to Confidential Information in the possession of the Committee, the information easily could become public immediately thereafter, Mr. Posner points out. The public dissemination of Confidential Information would likely cause serious harm to the Debtors' estates because, among other things, the Debtors' business strategies and intended initiatives would become known to the Debtors' competitors, thereby allowing such competitors to adjust to the Debtors' strategies and reduce or eliminate the value of the initiatives to the estates," Mr. Posner emphasizes. Moreover, if there is a risk that Confidential Information given by the Debtors to the Committee could have to be turned over to any creditor or claimholder, the Debtors would be highly discouraged from giving Confidential Information to the Committee in the first place, Mr. Posner says. In turn, he points out, the inability of the Committee to gain access to Confidential Information could limit its ability to fulfill its statutory obligations under the Bankruptcy Code. The Committee's request does not mean that the Committee will not be providing information to its constituents pursuant to Section 1103(b)(3)(A) of the Bankruptcy Code, Mr. Posner clarifies. The Committee believes that creditors and other claimholders will, through various means, have access to a variety of public information concerning the Debtors, including pleadings filed with the Court, the Debtors' schedules and statements of financial affairs, and the Debtors' monthly operating reports. 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. 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. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors. FTI Consulting, Inc., is the Committee's 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: Jefferies Wants Claim Allowed for Voting ------------------------------------------------------------ Jefferies & Company, Inc., asks Bankruptcy Judge Sean H. Lane to estimate and temporarily allow its claims for $13,847,991 for the sole purpose of voting on the Debtors' Plan. Jefferies contends that it has valid claims in excess of $13,000,000. Jefferies thus reserves all its rights with respect to the claims, including all rights with respect to reimbursement of fees and expenses it incurred in connection with pursuing collection of the amounts due under an agreement when Debtor TerreStar Networks Inc. sought financial services from the firm. Each of the Jefferies Claims asserts at least $1,347,991 in liquidated, unsecured claims and $12.5 million in unliquidated and contingent unsecured claims arising under the Services Agreement. Jefferies' liquidated claims consist of these unpaid amounts owed to the firm by the Debtors under the Services Agreement: (i) no less than $875,000 for unpaid Monthly Fees earned between February 2010 and June 2010; (ii) $22,991 in unreimbursed expenses; and (iii) a $450,000 Financing Fee owed on account of the Debtors' $75 million postpetition debtor-in-possession credit facility. The Jefferies Claims also assert unliquidated and contingent claims consisting of a $5,000,000 Restructuring Fee, attributable to the Debtors' restructuring of over $1.1 billion of funded debt pursuant to the proposed Chapter 11 Plan, and a $7,500,000 Equity Fee, attributable to the Debtors' equity rights offering as contemplated by the Plan. The Jefferies Claims are subject to an omnibus objection. The Debtors argued that the Services Agreement was made by only among Jefferies and TerreStar Corporation, and that TerreStar Corporation did not enter into the Agreement on behalf of its debtor subsidiaries. The Debtors specified that the work performed by Jefferies was exclusively for the benefit of TerreStar Corporation and not for them. The Debtors' assertion that the Services Agreement was made solely between Jefferies and TerreStar Corporation is incorrect, Lisa G. Laukitis, Esq., at Jones Day, in New York, contends, on behalf of Jefferies. She points out that the very first line of the Agreement states that it confirms the arrangements under which Jefferies had been retained by the "Company," which is defined as TerreStar Corporation and its subsidiaries, and which includes, among other entities, each of the Debtors. In addition, Ms. Laukitis argues that the Agreement did not indicate that compensation and expenses incurred by Jefferies were to be the sole responsibility of non-Debtor parent TerreStar Corporation. "Consideration of confirmation of the [TerreStar Debtors'] Plan is imminent. Unlike other unliquidated claims that may require the resolution of uncertain events over a long period of time, such as the outcome of litigation, the Jefferies Claim will become liquidated upon the effective date of the Plan and can therefore be ascertained with complete certainty as of the date hereof and, therefore, should be estimated at the full amount of $13,847,991," Ms. Laukitis 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. 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. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors. FTI Consulting, Inc., is the Committee's 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: Kirkland Also Represents Potential Bidder ------------------------------------------------------------- Bankruptcy counsel to TerreStar Networks Inc., Ira S. Dizengoff, Esq., a member of Akin Gump Strauss Hauer & Feld LLP, in New York, relates that the TerreStar Plan Debtors and their advisors have contacted or are in the process of contacting numerous parties to gauge those parties' potential interest in entering into an alternative transaction for the sale of any or all of their assets, as set forth in the Disclosure Statement accompanying the TerreStar Plan Debtors' Fourth Amended Joint Chapter 11 Plan of Reorganization. Mr. Dizengoff reveals that Akin Gump currently represents a party, which has expressed an interest in an Alternative Transaction and signed a non-disclosure agreement. He assures the Court that Akin Gump's representation of the Interested Party relates to matters wholly unrelated to the Debtors' Chapter 11 cases, which accordingly does not represent an actual conflict with the firm's representation of the Debtors. However, in order to avoid the appearance of impropriety and to avoid improper disclosure of confidences of the Debtors, Akin Gump has established ethical walls between the attorneys and staff representing the Debtors and those attorneys who are currently representing the Interested Party or those attorneys who have done a significant amount of work in the past representing the Interested Party, according to Mr. Dizengoff. To the extent that any adversary proceedings are commenced by or against the Interested Party in the Debtors' Chapter 11 cases, the Debtors will retain a conflicts counsel to represent their interest in those matters and Akin Gump will not represent the Interested Party in any matter in connection with or related to the Debtors' Chapter 11 cases, Mr. Dizengoff says. In addition, Mr. Dizengoff reveals that as of January 1, 2011, Akin Gump bill clients at these standard hourly rates: $550 to $1,150 for partners; $515 to $850 for counsel; $335 to $615 for associates; and $125 to $300 for paraprofessionals. Accordingly, the hourly rates of the Akin Gump attorneys with primary responsibilities for providing services to the Debtors will increase: Ira S. Dizengoff $975 Arik Preis $700 Joseph L. Sorkin $650 Ashleigh L. Blaylock $550 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. 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. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors. FTI Consulting, Inc., is the Committee's 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) TOWNSENDS INC: Proposes Feb. 15 Auction; No Stalking Horse So Far ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Townsends Inc. is aiming to sell the business at auction on February 15. Although there are discussions with several potential buyers, no one as yet is under contract. There will be a Jan. 28 hearing in U.S. Bankruptcy Court in Delaware to set up auction and sale procedures. Mr. Rochelle relates the Debtor wants initial bids on February 14, the day before the auction, with the hearing to approve the sale on February 18. Financing for the Chapter case is set to expire February 20. The lenders are requiring sale approval before funding terminates. About Townsends Inc. Founded in 1891, Townsends Inc. is a third-generation, family- owned poultry company. Headquartered in Georgetown, Delaware, Townsends operates production and processing facilities in Arkansas and North Carolina. Townsends Inc. -- fka Townsend Speciality Foods -- and several affiliates filed for Chapter 11 bankruptcy protection on December 19, 2010 (Bankr. D. Del. Lead Case No. 10-14092). As of December 5, 2010, the Debtors disclosed $131 million in total assets and $127 million in total debts. Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell, serves as the Debtors' bankruptcy counsel. McKenna Long & Aldridge LLP serves as special counsel. Huron Consulting Group's Dalton T. Edgecomb serves as the Debtors' chief restructuring officer. SSG Capital Advisors, LLC, serves as investment banker. Donlin, Recano & Company, Inc., is the Debtors' claims, noticing and balloting agent. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has tapped Lowenstein Sandler PC as its counsel and J.H. Cohn LLP as its financial advisor. VITRO SAB: Wants Delay in Trial on Texas Involuntary Cases ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Vitro, S.A.B. de C.V. filed a motion asking the bankruptcy judge in Fort Worth, Texas, to push back the hearing date for deciding if its U.S. subsidiaries should be in Chapter 11 reorganizations involuntarily. Holders of some of the $1.2 billion in defaulted bonds filed involuntary petitions against Vitro's U.S. subsidiaries in November. Vitro SAB is opposing the petitions, saying the subsidiaries don't qualify for involuntary bankruptcy although they admittedly haven't made good on guarantees of bonds in default for about two years. The bankruptcy judge had scheduled a February 10 trial on the involuntary petitions. Mr. Rochelle discloses that Vitro SAB said it can't complete the production of documents even by January 26, the extended deadline. Vitro wants more time to produce documents requested by noteholders and is asking the court to reschedule the hearing until February 22 to 23, Mr. Rochelle notes. Mr. Rochelle notes that Vitro SAB said it identified 56,000 documents responsive to the bondholders' requests. Among them, Mr. Rochelle relates, more than 60% are in Spanish, Vitro SAB said. Vitro needs to review the documents before turning them over to the bondholders, Mr. Rochelle adds. About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. Vitro is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009, and is now seeking to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. The offer was to expire December 7. Noteholders who oppose the exchange, namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P. -- which hold US$75 million, or approximately 6% of the outstanding bond debt -- commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and nine other affiliates on November 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation Counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders, known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. The U.S. affiliates subject to the involuntary petitions are Vitro Chemicals, Fibers & Mining, LLC (Bankr. N.D. Tex. Case No. 10- 47472); Vitro America, LLC (Bankr. N.D. Tex. Case No. 10-47473); Troper Services, Inc. (Bankr. N.D. Tex. Case No. 10-47474); Super Sky Products, Inc. (Bankr. N.D. Tex. Case No. 10-47475); Super Sky International, Inc. (Bankr. N.D. Tex. Case No. 10-47476); VVP Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47477); Amsilco Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47478); B.B.O. Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47479); Binswanger Glass Company (Bankr. N.D. Tex. Case No. 10-47480); Crisa Corporation (Bankr. N.D. Tex. Case No. 10-47481); VVP Finance Corporation (Bankr. N.D. Tex. Case No. 10-47482); VVP Auto Glass, Inc. (Bankr. N.D. Tex. Case No. 10-47483); V-MX Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47484); and Vitro Packaging, LLC (Bankr. N.D. Tex. Case No. 10-47485). Vitro SAB on December 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, thereby commencing its voluntary concurso mercantil proceedings. Vitro SAB believes that, as a result of the implementation of the Concurso Plan through the Mexican Proceeding, the holders of the Restructured Debt will recover 68% to 75% of the face value of their respective claims. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on December 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Alejandro Francisco Sanchez-Mujica, as foreign representative of Vitro, has asked the U.S. Bankruptcy Court to enter an order recognizing the Mexican Proceeding as "foreign main proceeding" pursuant to 11 U.S.C. Secs. 1515 and 1517. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. The Mexican judge ruled that Vitro couldn't push through a plan based on the vote of intercompany debt when third-party creditors were opposed. Vitro has voluntarily dismissed the Chapter 15 case in view of the dismissal of its reorganization in Mexico. UNITED WESTERN: Shares to be Delisted on NASDAQ Global Market ------------------------------------------------------------- United Western Bancorp, Inc. disclosed that on January 24, 2011 the NASDAQ Stock Market, LLC advised the Company that shares of the Company's common stock would no longer be listed for trading on the NASDAQ Stock Market as of February 2, 2011 unless the Company files an appeal under applicable NASDAQ rules. Trading in the Company's common stock was suspended by NASDAQ at the market open on January 24, 2011 due to the seizure of the Bank by the Federal Deposit Insurance Corporation on January 21, 2011. The seizure of the Bank by the FDIC was announced by the Company on January 21, 2011. At this time the Company does not intend to appeal the determination of NASDAQ and does not expect that shares of its common stock will trade pursuant to publicly available quotation sources at any time in the future. The Company is currently delinquent in its current reporting obligations under the Securities and Exchange Act of 1934, as amended and the Company is unable to say with any certainty whether or not it will be able to become current in such reporting obligations now or in the future. As previously disclosed, the Company and certain of its subsidiaries and affiliates may be required to seek protection under the federal Bankruptcy Code in order to seek a reorganization or pursue an orderly liquidation of those assets. It is also unlikely that the Company's common shares will ever be eligible to trade on the OTC Bulletin Board or the "Pink Sheets" since the Company must be current in its Exchange Act reporting requirements in order to be eligible to trade on the OTC Bulletin Board or the "Pink Sheets." On January 24, 2011, the Company was notified by one of the Anchor Investors to the previously announced Investment Agreement dated October 28, 2010 wherein the Company sought to raise at least $200 million that such Anchor Investor terminated the Investment Agreement. United Western Bancorp, Inc. is a Denver-based holding company whose principal subsidiary was formerly United Western Bank. VIDEO WAREHOUSE: Case Summary & 21 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Video Warehouse, Inc. 217 South Madison Avenue Douglas, GA 31533 Tel: (912) 384-1781 Bankruptcy Case No.: 11-50076 Chapter 11 Petition Date: January 25, 2011 Court: U.S. Bankruptcy Court Southern District of Georgia (Waycross) Debtor's Counsel: James L. Drake, Jr., Esq. JAMES L. DRAKE, JR., P.C. P.O. Box 9945 Savannah, GA 31412 Tel: (912) 790-1533 E-mail: jdrake7@bellsouth.net Scheduled Assets: $206,006 Scheduled Debts: $1,408,804 A list of the Company's 21 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/gasb11-50076.pdf The petition was signed by Gerald H. Pryor, president and CEO. WINDCHASE ENTERPRISES: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Windchase Enterprises, LLC 6910 Windchase Drive Horn Lake, MS 38637 Bankruptcy Case No.: 11-10337 Chapter 11 Petition Date: January 25, 2011 Court: U.S. Bankruptcy Court Northern District of Mississippi (Aberdeen) Debtor's Counsel: Neal H. Labovitz, Esq. LABOVITZ LAW FIRM 1625 Main Street, Suite B Southaven, MS 38671 Tel: (662) 342-7957 Fax: (662) 342-0368 E-mail: bankruptcy@labovitzlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Nilesh Patel, vice-president. * Johnson & Freedman Promotes January N. Taylor to Partner ---------------------------------------------------------- Atlanta-based Johnson & Freedman, LLC, a member of the Fannie Mae Retained Attorney Network and Freddie Mac Designated Counsel Program, disclosed that January N. Taylor has been promoted to partner. Johnson & Freedman is a business partner of Atlanta-based Prommis Solutions. As a foreclosure attorney, Taylor manages the foreclosure processes for Alabama, Georgia, North Carolina, South Carolina, Tennessee, Mississippi and Virginia. In addition, she manages the firm's title department, which supports foreclosure, bankruptcy, REO and litigation in reviewing and clearing any title issues. Prior to joining Johnson & Freedman in 2006, Taylor was an associate attorney with Brock & Scott, PLLC in Wilmington, N.C. Previously, Taylor acted as VP of Development for Shore Land Investments, LLC NAI/MLG Development on the Eastern Shore of Virginia. "January Taylor's strong credentials, leadership style and strategic vision enable our firm to continue to meet the needs of our clients by providing quality legal service and sound judgment," said Joel Freedman, managing partner of Johnson & Freedman, LLC. "Her methodology centered around home retention efforts fits the culture that Johnson & Freedman has fostered throughout our history." Taylor is a member of the Georgia State Bar, North Carolina State Bar and South Carolina State Bar. She has a bachelor's degree from Salisbury University and a J.D. from Regent University. About Johnson & Freedman Johnson & Freedman, LLC -- http://www.JFLegal.com/-- is a leader in the default legal services industry and a member of the Fannie Mae Retained Attorney Network in five states*, as well as a member of the Freddie Mac Designated Counsel Program in Florida. With more than 25 attorneys, the firm provides legal counsel for the mortgage default legal services industry, representing the industry in mortgage foreclosures, bankruptcy, litigation, eviction, REO closings, commercial foreclosures and litigation, as well as collections and general real estate issues. The firm is headquartered in Atlanta, Georgia and currently provides legal services throughout Alabama*, Florida^, Georgia*, Mississippi, North Carolina*, South Carolina*, Tennessee* and Virginia. * Phoenix Adds J. Koskiewicz as Managing Director in Dallas Office ------------------------------------------------------------------ John Koskiewicz, a long time restructuring industry veteran, has joined the firm as a Managing Director in the Dallas office. Mr. Koskiewicz joins Phoenix with a wealth of experience in a variety of industries, roles and engagements. During the past twelve years John has served in many roles including interim management, bankruptcy advisor and financial advisor to both debtor and creditor constituents. Prior to beginning his restructuring advisory career, John served in various financial and cash management roles in private industry. He is a recognized professional in the Dallas turnaround community including both the TMA and ACG organizations. "As we continue to grow Phoenix both in terms of service offerings and our footprint, we believe Dallas and John specifically, will play a vital role in our aggressive growth plans," said Phoenix Managing Director and Shareholder Jim Fleet. "While John has spent the last several years working through some of the largest and complex auto industry insolvency cases, he has always maintained a focus and desire to work within the middle market sector with an ability to provide impactful hands-on leadership," Fleet further added. John graduated from University of Texas at Austin with an MBA and from Indiana University with a Bachelor of Science. He has written articles on the automotive industry and contributed to panels at both the TMA and the AIRA regarding various industry and bankruptcy issues. About Phoenix For over 25 years, Phoenix has provided smarter, operationally focused solutions for middle market companies in transition. Phoenix Management Services provides turnaround, crisis and interim management, specialized advisory and operational due diligence services for both distressed and growth oriented companies. * Retired Oklahoma Judge Richard Bohanon Died January 18 -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Richard L. Bohanon, a bankruptcy judge in Oklahoma City from 1982 until his retirement last year, died on Jan. 18 at age 75. Mr. Rochelle notes that Judge Bohanon, the son of U.S. District Judge Luther Bohanon, received his undergraduate degree from Dartmouth College and his law degree from University of Oklahoma College of Law, the family said. After law school, he was a clerk for a judge on the U.S. Circuit Court of Appeals in Denver. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Laura Mccray Bankr. D. Ariz. Case No. 11-01405 Chapter 11 Petition filed January 19, 2011 In re Celso Sepina Bankr. C.D. Calif. Case No. 11-12486 Chapter 11 Petition filed January 19, 2011 In re Antonio Limgenco Bankr. N.D. Calif. Case No. 11-30203 Chapter 11 Petition filed January 19, 2011 In re Eduardo Martinez Bankr. N.D. Calif. Case No. 11-50457 Chapter 11 Petition filed January 19, 2011 In Re Sandpiper Sales, Inc. dba The Clock Gallery Bankr. M.D. Fla. Case No. 11-00781 Chapter 11 Petition filed January 19, 2011 See http://bankrupt.com/misc/flmb11-00781.pdf In re Steven Vasilaros Bankr. M.D. Fla. Case No. 11-00669 Chapter 11 Petition filed January 19, 2011 In re Jason Brown Bankr. S.D. Fla. Case No. 11-11265 Chapter 11 Petition filed January 19, 2011 In Re The Brown's Family Restaurant of Savannah LLC Bankr. S.D. Ga. Case No. 11-40128 Chapter 11 Petition filed January 19, 2011 See http://bankrupt.com/misc/gasb11-40128.pdf In re William Foster Bankr. S.D. Ga. Case No. 11-30021 Chapter 11 Petition filed January 19, 2011 In Re Sisters of the New South, Inc. Bankr. S.D. Ga. Case No. 11-40129 Chapter 11 Petition filed January 19, 2011 See http://bankrupt.com/misc/gasb11-40129.pdf In Re GLD, Inc. dba Club Miami Bankr. D. Md. Case No. 11-10997 Chapter 11 Petition filed January 19, 2011 See http://bankrupt.com/misc/mdb11-10997.pdf In Re Blue Water Services Ltd. Bankr. E.D. Mich. Case No. 11-20177 Chapter 11 Petition filed January 19, 2011 See http://bankrupt.com/misc/mieb11-20177p.pdf See http://bankrupt.com/misc/mieb11-20177c.pdf In Re East Holly Oil, Inc. Bankr. E.D. Mich. Case No. 11-41256 Chapter 11 Petition filed January 19, 2011 See http://bankrupt.com/misc/mieb11-41256.pdf In Re Badran Investment, LLC Bankr. E.D. Mich. Case No. 11-41258 Chapter 11 Petition filed January 19, 2011 See http://bankrupt.com/misc/mieb11-41258.pdf In Re FGR Enterprises Bankr. E.D. Mich. Case No. 11-41340 Chapter 11 Petition filed January 19, 2011 See http://bankrupt.com/misc/mieb11-41340.pdf In Re 1313 Holdings, LLC Bankr. D. Nev. Case No. 11-10771 Chapter 11 Petition filed January 19, 2011 See http://bankrupt.com/misc/nvb11-10771.pdf In Re 133 Holdings, LLC Bankr. D. Nev. Case No. 11-10772 Chapter 11 Petition filed January 19, 2011 See http://bankrupt.com/misc/nvb11-10772.pdf In re Jorge Hernandez Bankr. D. Nev. Case No. 11-10770 Chapter 11 Petition filed January 19, 2011 In Re R & D Technologies, LLC Bankr. D. Nev. Case No. 11-10718 Chapter 11 Petition filed January 19, 2011 See http://bankrupt.com/misc/nvb11-10718.pdf In re Nancy Davis Bankr. D. N.J. Case No. 11-11502 Chapter 11 Petition filed January 19, 2011 In re Lori Diaz Bankr. D. Ore. Case No. 11-30383 Chapter 11 Petition filed January 19, 2011 In Re Main Philly Coffeehouse, LLC Bankr. E.D. Pa. Case No. 11-10357 Chapter 11 Petition filed January 19, 2011 See http://bankrupt.com/misc/paeb11-10357.pdf In re David Rinehimer Bankr. D. Ariz. Case No. 11-01477 Chapter 11 Petition filed January 20, 2011 In re Arnold Klein Bankr. C.D. Calif. Case No. 11-12718 Chapter 11 Petition filed January 20, 2011 In re Kamala Sargent Bankr. C.D. Calif. Case No. 11-12679 Chapter 11 Petition filed January 20, 2011 In re Arlene Gold Howard Gold Bankr. D. Conn. Case No. 11-30115 Chapter 11 Petition filed January 20, 2011 In re Joseph McGuire Bankr. D. Mass. Case No. 11-10447 Chapter 11 Petition filed January 20, 2011 In Re Borough Holdings, Inc. dba Borough Chrysler Jeep fdba Borough Jeep Eagle, Inc. fdba Borough Garage, Inc. Bankr. D. N.J. Case No. 11-11556 Chapter 11 Petition filed January 20, 2011 See http://bankrupt.com/misc/njb11-11556.pdf In Re C.N.A. of Elizabeth, Inc. Bankr. D. N.J. Case No. 11-11529 Chapter 11 Petition filed January 20, 2011 filed pro se In Re Rayfran Inc. Bankr. D. N.J. Case No. 11-11679 Chapter 11 Petition filed January 20, 2011 See http://bankrupt.com/misc/njb11-11679.pdf In re Alan Withrow Bankr. W.D. N.C. Case No. 11-30117 Chapter 11 Petition filed January 20, 2011 In Re Harrison Financial Group, L.L.C. Bankr. W.D. Okla. Case No. 11-10241 Chapter 11 Petition filed January 20, 2011 See http://bankrupt.com/misc/okwb11-10241.pdf In Re Aplex America, Inc. Bankr. W.D. Pa. Case No. 11-20306 Chapter 11 Petition filed January 20, 2011 See http://bankrupt.com/misc/pawb11-20306.pdf In re Jose Soler Davila Bankr. D. Puerto Rico Case No. 11-00300 Chapter 11 Petition filed January 20, 2011 In re Thuan Do Bankr. E.D. Va. Case No. 11-30394 Chapter 11 Petition filed January 20, 2011 In re Henry Dragt Bankr. W.D. Wash. Case No. 11-40453 Chapter 11 Petition filed January 20, 2011 In re Maucmbe Pavlovski Bankr. M.D. Ala. Case No. 11-30144 Chapter 11 Petition filed January 21, 2011 In Re Black Weapons Armory, LLC Bankr. D. Ariz. Case No. 11-01737 Chapter 11 Petition filed January 21, 2011 See http://bankrupt.com/misc/azb11-01737.pdf In Re GT & Associates, Inc. Bankr. D. Ariz. Case No. 11-01718 Chapter 11 Petition filed January 21, 2011 See http://bankrupt.com/misc/azb11-01718.pdf In Re Rosati's Of Phoenix 24th Street, Inc. Bankr. D. Ariz. Case No. 11-01691 Chapter 11 Petition filed January 21, 2011 See http://bankrupt.com/misc/azb11-01691.pdf In Re 7226 Sepulveda Blvd Inc. Bankr. C.D. Calif. Case No. 11-10871 Chapter 11 Petition filed January 21, 2011 filed pro se In Re Alliance Capital Investments Inc. Bankr. C.D. Calif. Case No. 11-12852 Chapter 11 Petition filed January 21, 2011 filed pro se In Re Chong's Inc. Bankr. C.D. Calif. Case No. 11-10937 Chapter 11 Petition filed January 21, 2011 See http://bankrupt.com/misc/cacb11-10937.pdf In re David Farley Bankr. C.D. Calif. Case No. 11-12031 Chapter 11 Petition filed January 21, 2011 In Re Hermosa Brothers, Inc. Bankr. C.D. Calif. Case No. 11-12800 Chapter 11 Petition filed January 21, 2011 See http://bankrupt.com/misc/cacb11-12800.pdf In re Jonathan Ho Bankr. C.D. Calif. Case No. 11-10907 Chapter 11 Petition filed January 21, 2011 In re Marcelino Chong Bankr. C.D. Calif. Case No. 11-10939 Chapter 11 Petition filed January 21, 2011 In Re Redondo Brothers, Inc. Bankr. C.D. Calif. Case No. 11-10936 Chapter 11 Petition filed January 21, 2011 See http://bankrupt.com/misc/cacb11-10936.pdf In re Roberto Chong Bankr. C.D. Calif. Case No. 11-10940 Chapter 11 Petition filed January 21, 2011 In re Shirley Wright Bankr. C.D. Calif. Case No. 11-12097 Chapter 11 Petition filed January 21, 2011 In re Robert Allen Bankr. S.D. Calif. Case No. 11-00934 Chapter 11 Petition filed January 21, 2011 In re Lisa McDowell Bankr. S.D. Fla. Case No. 11-11589 Chapter 11 Petition filed January 21, 2011 In re Michael Kram Bankr. S.D. Fla. Case No. 11-11606 Chapter 11 Petition filed January 21, 2011 In re Devlyn Akau Bankr. D. Hawaii Case No. 11-00156 Chapter 11 Petition filed January 21, 2011 In re Robin Walls Bankr. S.D. Ind. Case No. 11-90156 Chapter 11 Petition filed January 21, 2011 In re Colin Mapp Lorraine Mapp Bankr. D. Md. Case No. 11-11211 Chapter 11 Petition filed January 21, 2011 In re Cory Chase Bankr. D. Md. Case No. 11-11248 Chapter 11 Petition filed January 21, 2011 In Re Quality First Health Care System, LLC Bankr. D. Md. Case No. 11-11263 Chapter 11 Petition filed January 21, 2011 See http://bankrupt.com/misc/mdb11-11263.pdf In Re MSC Manufacturing, Inc. Bankr. D. Mass. Case No. 11-10494 Chapter 11 Petition filed January 21, 2011 See http://bankrupt.com/misc/mab11-10494.pdf In Re Irving Financial, Inc. Bankr. D. N.J. Case No. 11-11767 Chapter 11 Petition filed January 21, 2011 See http://bankrupt.com/misc/njb11-11767.pdf In re Thomas Loredo Bankr. D. N.J. Case No. 11-11638 Chapter 11 Petition filed January 21, 2011 In re Jeanne Reuscher Bankr. S.D. Ohio Case No. 11-10296 Chapter 11 Petition filed January 21, 2011 In Re Hollywood Restaurant Group, LLC dba Garrason's Tavern Bankr. M.D. Pa. Case No. 11-00407 Chapter 11 Petition filed January 21, 2011 See http://bankrupt.com/misc/pamb11-00407.pdf In Re Eagle Operations, LLC Bankr. M.D. Tenn. Case No. 11-00549 Chapter 11 Petition filed January 21, 2011 See http://bankrupt.com/misc/tnmb11-00549.pdf In Re EC Mac, LLC Bankr. M.D. Tenn. Case No. 11-00550 Chapter 11 Petition filed January 21, 2011 See http://bankrupt.com/misc/tnmb11-00550.pdf In Re Imperial Beverage Group, LLC Bankr. N.D. Texas Case No. 11-30488 Chapter 11 Petition filed January 21, 2011 See http://bankrupt.com/misc/txnb11-30488p.pdf See http://bankrupt.com/misc/txnb11-30488c.pdf In re James Deines Bankr. S.D. Texas Case No. 11-20038 Chapter 11 Petition filed January 21, 2011 In re Jose Cervantes Bankr. E.D. Wash. Case No. 11-00258 Chapter 11 Petition filed January 21, 2011 In Re Commencement Group, LLC Bankr. W.D. Wash. Case No. 11-40464 Chapter 11 Petition filed January 21, 2011 filed pro se In re Lonnie Benson Bankr. W.D. Wash. Case No. 11-10617 Chapter 11 Petition filed January 21, 2011 In re Raymond Marchisset Bankr. C.D. Calif. Case No. 11-10957 Chapter 11 Petition filed January 22, 2011 In re Farshad Harandi Bankr. C.D. Calif. Case No. 11-10952 Chapter 11 Petition filed January 24, 2011 In re Robert Griffith Bankr. S.D. Calif. Case No. 11-01008 Chapter 11 Petition filed January 24, 2011 In re Mark Doerfler Bankr. D. Idaho Case No. 11-20078 Chapter 11 Petition filed January 24, 2011 In re John Marshall Bankr. D. Nev. Case No. 11-10931 Chapter 11 Petition filed January 24, 2011 In re Kenneth Lewandowski Bankr. D. N.J. Case No. 11-11823 Chapter 11 Petition filed January 24, 2011 In re Mohamed El-Goarany Bankr. E.D. N.Y. Case No. 11-70253 Chapter 11 Petition filed January 24, 2011 In re Antonio Labrado, Jr. Lidia Labrado Bankr. W.D. Texas Case No. 11-30117 Chapter 11 Petition filed January 24, 2011 In re Walter Hall Bankr. W.D. Texas Case No. 11-10149 Chapter 11 Petition filed January 24, 2011 In re William Louisos Bankr. S.D. W.Va. Case No. 11-20041 Chapter 11 Petition filed January 24, 2011 In re Charity Seymour Bankr. E.D. Calif. Case No. 11-21854 Chapter 11 Petition filed January 25, 2011 In re Ronald Cook Patricia Cook Bankr. D. Colo. Case No. 11-11276 Chapter 11 Petition filed January 25, 2011 In re Andrew Julian Bankr. D. Conn. Case No. 11-30151 Chapter 11 Petition filed January 25, 2011 In re Donna Bonham Bankr. M.D. Fla. Case No. 11-00949 Chapter 11 Petition filed January 25, 2011 In re Carl Neuman Bankr. C.D. Ill. Case No. 11-70154 Chapter 11 Petition filed January 25, 2011 In re Anne Spencer Bankr. D. Nev. Case No. 11-10988 Chapter 11 Petition filed January 25, 2011 In re Kenneth Marable Bankr. D. Nev. Case No. 11-11051 Chapter 11 Petition filed January 25, 2011 In re Peter Licata Bankr. D. Nev. Case No. 11-11053 Chapter 11 Petition filed January 25, 2011 In re Steve Regopolos Bankr. D. Nev. Case No. 11-11013 Chapter 11 Petition filed January 25, 2011 In re Dan Mitchell Bankr. N.D. Texas Case No. 11-40470 Chapter 11 Petition filed January 25, 2011 In re David Hales Bankr. D. Utah Case No. 11-20884 Chapter 11 Petition filed January 25, 2011 In re Michael Winstanley Bankr. E.D. Va. Case No. 11-10571 Chapter 11 Petition filed January 25, 2011 In re Parmjit Kang Bankr. W.D. Wash. Case No. 11-10717 Chapter 11 Petition filed January 25, 2011 ********* 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 by e-mail. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases by individuals and business entities estimating assets and debts or disclosing assets and liabilities at less than $1,000,000. The list includes links to freely downloadable images of the small-dollar business-related petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, 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 2011. 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. 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