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/raid1/www/Hosts/bankrupt/TCR_Public/110211.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, February 11, 2011, Vol. 15, No. 41 Headlines 163RD STREET: Case Summary & 14 Largest Unsecured Creditors 4928 INVESTMENTS: Voluntary Chapter 11 Case Summary 59 EAST: Voluntary Chapter 11 Case Summary 790 POTRERO: Case Summary & 4 Largest Unsecured Creditors AEA FEDERAL: Financial Condition Continues to Sink AIRTRAN HOLDINGS: Reports $38.54 Million Net Income for 2010 ALION SCIENCE: Incurs $11.13-Mil. Net Loss in Fiscal Q1 ALL AMERICAN: Case Summary & 20 Largest Unsecured Creditors ALLY FINANCIAL: Kentucky Owners Drop Suit vs. Citi, Ally ALMA ENERGY: Pikeville Energy Suit Remanded to Bankr. Court APEX DIGITAL: Court Sets February 18 as Claims Bar Date ARLIE & COMPANY: Court Approves Sale of Jasper Property ARLIE & COMPANY: Proposes April 1 Auction for Hawaii Assets ARROWHEAD GENERAL: Moody's Assigns 'B3' Ratings to First-Lien Loan BARNEYS NEW YORK: CEO Unveils Plan to Revitalize Retailer BAYOU WOOD: Voluntary Chapter 11 Case Summary BERRY PLASTIC: Estimates $1.04-Bil. Net Sales for 1st Qtr. BERNARD L MADOFF: Judge Bars Suits Against Madoff Relatives BEST ENERGY: Increases Special Advance Amounts Under Revolver BILLY JAMES MACE: Regions Bank Fails in Bid to Derail Plan BIOFUEL ENERGY: Generates $46 Million From Rights Offering BLOCKBUSTER INC: Mulls Selling Biz Amid Creditor Disagreements BLOCKBUSTER INC: Gibb Wants Lift Stay to Liquidate Judgement BLOCKBUSTER INC: Proposes K&L as Special IP Counsel BLOCKBUSTER INC: Proposes V & E as Litigation Counsel BRIAN A KITTS: Ch. 7 Trustee Gets $241T Damages in Winterfox Suit BUCYRUS INTERNATIONAL: S&P Retains 'BB+' Rating on Positive Watch CANAL CORP: Disclosure Statement Hearing on Feb. 15 CARGO TRANSPORTATION: U.S. Trustee Forms Creditor's Committee CARTER BEHAVIOR: Case Summary & 17 Largest Unsecured Creditors CARVER BANCORP: Defers Trust Preferred Dividend Payments CASAIC OFFSET: Case Summary & 26 Largest Unsecured Creditors CASCADE BANCORP: C. Casciato Does Not Own Any Securities CASCADE BANCORP: Lightyear Entities Hold 24.38% Equity Stake CASCADIA PARTNERS: U.S. Trustee Unable to Form Committee CATHOLIC CHURCH: Milwaukee Files Schedules of Assets & Debts CATHOLIC CHURCH: Milwaukee Files Statement of Financial Affairs CATHOLIC CHURCH: Milwaukee Financials Incomplete, Creditors Say CB HOLDING: Plan Filing Exclusivity Extended Until June 15 CHABAD HOUSE: Files for Bankruptcy to Halt Foreclosure Suit CLEAR CHANNEL: Fitch Assigns 'CCC/RR4' Rating to $750 Mil. Notes CLEARWIRE CORP: Abandons Retail Strategy to Focus on Wholesale COMFORCE CORP: RBF Capital Disposed of All of 9.5% Stake CORNERSTONE BANCSHARES: Gary Petty Owns 611 Common Shares CRAIG LUTZ: Files for Chapter 13 Bankruptcy Protection CREDIT-BASED ASSET: Files Plan; Would Repay Unclassified Claims CRYSTAL CATHEDRAL: CFO Southard Resigns to Cut Estate Expenses DBSD N.A.: Third Party Interested in Assets, Says Committee DELTA PETROLEUM: CEO Lakey Owns 525,828 Common Shares DELUXE ENTERTAINMENT: Moody's Confirms 'B1' Corp. Family Rating DENNY'S CORPORATION: BlackRock Discloses 6.07% Equity Stake DESERT ROCK: Case Summary & 18 Largest Unsecured Creditors DEWEY'S SUPER TRANSPORT: Case Summary & Largest Unsec. Creditors DISH NETWORK: BlackRock Discloses 7.52% Equity Stake DVM HEALTH: Voluntary Chapter 11 Case Summary DYNAVAX TECHNOLOGIES: BlackRock Discloses 7.42% Equity Stake DYNEGY INC: UBS AG Discloses 0.34% Equity Stake EASTMAN KODAK: BlackRock Discloses 6.57% Equity Stake ELITE PHARMACEUTICALS: Gets FDA Approval of Generic HCL Tablets ENNIS COMMERCIAL: Unsecureds to Get 7% Total, in Installments ENTEGRA TC: S&P Junks Ratings on Second-Lien Loans From 'B' EQUIPMENT MANAGEMENT: Case Summary & 20 Largest Unsec Creditors ESSEX OIL: Randsburg Int'l Wants Wm. Andrew Campbell as Receiver FENTURA FINANCIAL: Sale of West Michigan Bank Completed FIRST NATIONAL: Wants Plan Filing Deadline Extended to May 5 FIRSTFED FINANCIAL: Taps Garden City as Noticing Agent FKF MADISON: Controlling Members Ditch Shapiro-Backed Plan FLORIDA EAST: Moody's Assigns 'Caa1' Corporate Family Rating FLORIDA EAST: S&P Downgrades Corporate Credit Rating to 'B-' FORD MOTOR: BlackRock Holds 5.28% Equity Stake FORD'S COLONY: Judge Wants Plan Talks to Continue FRIENDSHIP MISSIONARY: Case Summary & Creditors List GENERAL GROWTH: Eurohypo AG Defends $85 Million Claim GENERAL GROWTH: Reaches Agreement on NY $12 Mil. Cure Claim GENERAL MARITIME: BlackRock Discloses 5.25% Equity Stake GENERAL MOTORS: DTE Pontiac Wants Talk on Project Contracts GENERAL MOTORS: Old GM Objects to Super Industries' Class Claims GENERAL MOTORS: Opposes Interim Allowance of Appaloosa Claims GENERAL MOTORS: Says Bankr. Court Has Jurisdiction in UAW Suit GENERAL MOTORS: Has Already Filed 200 Omnibus Claims Objections GENERAL NUTRITION: Moody's Upgrades Corp. Family Rating to 'B2' GENERAL NUTRITION: S&P Assigns 'B+' Rating to $80 Mil. Loan GLAZIER GROUP: U.S. Trustee Forms 3-Member Creditors Committee GLAZIER GROUP: GE Capital Wants Trustee to Oversee Sale GRAY TELEVISION: BlackRock Discloses 6.66% Equity Stake GULF FREEWAY: Files Plan of Reorganization & Disclosure Statement HARDAGE HOTELS VIII: San Diego Unit of Hardage Hotels in Ch. 11 GYMBOREE CORP: S&P Assigns Corporate Credit Rating at 'B+' HEALTH NET: Fitch Upgrades Issuer Default Rating to 'BB+' INTEGRAL NUCLEAR: Back in Chapter 11 After Old Plan Fails H. BEASLY: Case Summary & 20 Largest Unsecured Creditors HARRINGTON WEST: Plan Filing Exclusivity Extended to June 27 HARRY & DAVID: Issues Going-Concern Doubt Warning HD SUPPLY: T. Newnam Resigns; Ledford and Bernasek Fill Vacancy HEALTHSOUTH CORP: BlackRock Discloses 9.28% Equity Stake HF THREE: Files Plan of Reorganization & Disclosure Statement HIGHWAY TRUST FUND: Could be Insolvent Next Fiscal Year HILLARY HARMON: Bankr. Ct. Explains Sanctions Against Lighthouse HOVNANIAN ENTERPRISES: Offers $155MM Notes & $47MM of Securities HP DISTRIBUTION: Must Decide on Teletrac Deal for GPS Units IMAGE METRICS: Buys Big Stage Assets for 2-Mil. Shares INCENTIUM LLC: Ceases Business Operations INTERNATIONAL GARDEN: Gets Court's Nod to Amend DIP Financing Pact ISC BUILDING: To Seek Plan Confirmation ISLAND ONE: Seeks Nod to Delay Auction Until March 10 ISTAR FINANCIAL: BlackRock Discloses 5.85% Equity Stake ISTAR FINANCIAL: Johnsons' Equity Stake Down to 15,500 Shares JDE FLORIDA: Case Summary & 20 Largest Unsecured Creditors JENNIFER CONVERTIBLES: Court Signs Order Confirming Exit Plan JETBLUE AIRWAYS: BlackRock Discloses 6.66% Equity Stake JUNCO STEEL: Steel Products Maker in Chapter 11 KRATOS DEFENSE: S&P Puts 'B+' Rating on CreditWatch Negative LACK'S STORES: US Trustee Forms Five-Member Creditor's Committee LACK'S STORES: Files Schedules of Assets and Liabilities LOCAL INSIGHT: Directory Distributing Quits From Creditors Panel LOEHMANN'S HOLDINGS: Plan Approved Subject to Changes LOGAN JOHNSTON: Court to Hold Further Briefing in Sternberg Case MAGIC BRANDS: Ex-Franchisee Barred From Using Fuddruckers Name MARKWEST ENERGY: Moody's Assigns 'B1' Rating to $300 Mil. Notes MIDWEST PROPERTIES: Case Summary & 2 Largest Unsecured Creditors MILLENNIUM MULTIPLE: Seeks 10-Day Exclusivity Extension NACIREMA INDUSTRIES: US Trustee Names 5 Members to Creditors Panel NEW DRAGON: Receives NYSE Amex Notice on Non-Compliance NEW INVESTMENTS: Case Summary & 2 Largest Unsecured Creditors OSCEOLA TRACE: Case Summary & Largest Unsecured Creditor PAGE ONE: Case Summary & 20 Largest Unsecured Creditors PALM HARBOR: $50-Mil. Sale Won't Provide Payment to Stockholders PASOS HOMES: Voluntary Chapter 11 Case Summary PETTERS CO: District Court Approves Vennes Asset Distribution Plan PHILADELPHIA RITTENHOUSE: Files Schedules & Statement POINT BLANK: Creditor Objects to Disclosure Statement PRO FIT: Case Summary & 20 Largest Unsecured Creditors QSGI INC: Plan Outline Approved; March 21 Confirmation Hearing Set RAINIER MOVING: Case Summary & 20 Largest Unsecured Creditors RDK TRUCK: Section 341(a) Meeting Scheduled for March 2 RDK TRUCK: Has Interim OK to Hire Morse & Gomez as Bankr. Counsel RIVERSIDE COUNTY: S&P Assigns Negative Outlook on 'BB-' Rating ROBERT PODZEMNY: Can Use Cash for 2011 Cattle and Corn Crop ROUND TABLE PIZZA: Files for Chapter 11 to Close "Some" Stores ROUND TABLE: Case Summary & 20 Largest Unsecured Creditors SANTA ROSA BAY: $2.2MM July Bond Payment Looms for Bo's Bridge SHUBH HOTELS PITTSBURGH: Lenders Plan Outline Hearing on March 8 SOLOMON DWEK: District Court Rejects Kantrowitz Appeal SPEEDWAY MOTORSPORTS: S&P Assigns Rating to $250 Mil. Senior Notes SPRINGFIELD LANDMARK: Judge Denies Bank's Dismissal Request STANWELL DRIVE: Voluntary Chapter 11 Case Summary STONEWALL MINER: Case Summary & 3 Largest Unsecured Creditors SUNCAL COS: To Appeal Approval of Lehman-Trustee Settlement TAYLOR BEAN: Wins Nod to Sell Mortgage Loans to Selene TED B WATTS: BankTrust's Objection to Espy Fees Overruled TRANSDIGM INC: Moody's Affirms 'B1' Corporate Family Rating TRICO MARINE: Creditors Approve Reworked Settlement TRICO MARINE: Silverback Asset Ceases to Own Common Shares TSG INC: Cash Collateral Hearing Continued Until March 30 ULTIMATE ACQUISITION: U.S. Trustee Names 7-Member Creditors Panel USHC LLC: Voluntary Chapter 11 Case Summary VULCAN ENERGY: S&P Withdraws 'BB' Corporate Credit Rating WARNER MUSIC: Moody's Reviews 'Ba3' Corporate Family Rating WASHINGTON MUTUAL: May Deadline Set for Insider Trading Probe WELLPOINT SYSTEMS: Under Receivership in Canada; Files Ch. 15 WELLPOINT SYSTEMS: Chapter 15 Case Summary * Debt Maturity Wall Crumbles by $482 Billion * S&P: Bank Ratings Can Withstand Loan Buybacks * Moody's: Defaults and Recoveries Underscore Severity of Crisis * Moody's: Global Default Rate Falls to 2.8% in January * State Bankruptcy Option 'Not the Answer,' House Panel Told * LoPucki, UCLA Law Host One-Day Bankruptcy Conference Today * AHV Associates LLP Forms New Restructuring Team * Three Day Pitney Bankruptcy Pros Join Pryor Cashman * BOOK REVIEW: Medical Jurisprudence, Insanity, and Toxicology ********* 163RD STREET: Case Summary & 14 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: 163rd Street Plaza, LLC 6910 Stirling Road Hollywood, FL 33024 Bankruptcy Case No.: 11-13435 Chapter 11 Petition Date: February 9, 2011 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Raymond B. Ray Debtor's Counsel: Scott Alan Orth, Esq. LAW OFFICES OF SCOTT ALAN ORTH, P.A. 3880 Sheridan St. Hollywood, FL 33021 Tel: (305) 757-3300 Fax: (305) 757-0071 E-mail: orthlaw@bellsouth.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 14 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flsb11-13435.pdf The petition was signed by Isaac Betesh, managing member. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- M & Z Carriage Hills, LLC. 11-10777 01/12/2011 4928 INVESTMENTS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: 4928 Investments, LLC aka Hollywood Courtyard Apartments 4800 Hollywood Blvd., Suite 1A P.O. Box 813788 Hollywood, FL 33020 Bankruptcy Case No.: 11-13340 Chapter 11 Petition Date: February 8, 2011 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtor's Counsel: Brian S. Behar, Esq. BEHAR, GUTT & GLAZER, P.A. 2999 NE 191 St 5 Fl Aventura, FL 33180 Tel: (305) 931-3771 E-mail: bsb@bgglaw.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Marcos Fintz. 59 EAST: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: 59 East 125 Ltd. 59 East 125th Street New York, NY 10035 Tel: (212)831-5584 Bankruptcy Case No.: 11-10494 Chapter 11 Petition Date: February 8, 2011 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Reginald A. Jacobs, Esq. REGINALD A. JACOBS, PLLC 1324 E. Gun Hill Road, Suite 300 Bronx, NY 10469 Tel: (718)652-0706 Fax: (718)652-0659 E-mail: reginald@jacobs-esq.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 Sheila D. Thomas, president. 790 POTRERO: Case Summary & 4 Largest Unsecured Creditors --------------------------------------------------------- Debtor: 790 Potrero LLC 1153 Mission Street San Francisco, CA 94103 Bankruptcy Case No.: 11-30481 Chapter 11 Petition Date: February 8, 2011 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Richard A. Hall, Esq. BOTTOMLINE LAWYERS P.O. Box 237 Auburn, CA 95603 Tel: (530) 888-7100 E-mail: caeb@bottomlinelawyers.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 four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb11-30481.pdf The petition was signed by Valerie Lee, managing member. AEA FEDERAL: Financial Condition Continues to Sink -------------------------------------------------- Joyce Lobeck at YumaSun.com reports that AEA Federal Credit Union's financial picture continues to deteriorate, with its net worth/total asset ratio now a negative 7.63%, making AEA insolvent. According to YumaSun.com, Cherie Umbel, a spokeswoman for National Credit Union Administration (NCUA), said she couldn't discuss the financial status of an individual credit union such as AEA because of confidentiality regulations. Ms. Umbel said AEA members, however, may rest assured it is business as usual under NCUA's conservatorship. And their money is "safe and secure," she said, explaining that each account is insured up to $250,000 by NCUA. The growing business loan losses at AEA have erased all capital at the one-time $410 million credit union and forced it to report a $31 million loss for 2010, YumaSun.com reports citing the fourth- quarter 2010 call report just posted on http://www.NCUA.gov/ YumaSun.com discloses that AEA's assets are now listed at $261.7 million, a steep decline over the past two years. In September, the assets were listed at $309 million and net worth ratio at 2%. AEA also listed $36.3 million in loans 60 days or more past due, foreclosed and repossessed assets of $20.5 million, and $30.9 million in loans subject to bankruptcies. In December, YumaSun.com recalls, former business loan director William Liddle and his wife, Rhonda, were indicated by a federal grand jury on charges of making millions of dollars in risky member business loans in exchange for more than $1 million in kickbacks. Local businessman Frank Ruiz also was indicted, YumaSun.com adds. Ms. Umbel, as cited by YumaSun.com, said the options for AEA's future include merger, liquidation or resolving the credit union's financial problems and returning it to local control. AEA was placed under conservatorship in mid-December after being on NCUA's watch list for months because of mounting real estate losses. Thomas Martin, a former CEO of now-merged Continental FCU of Tempe, has been acting as the conservatorship CEO. NCUA is the federal regulatory and insurer agency for credit unions. AEA is one of various credit unions currently being run under NCUA conservatorship, including California's Arrowhead Central CU, Family First CU in Utah, and Keys FCU in Key West, Fla. Family First is insolvent with a net worth ratio of -10.49%. AIRTRAN HOLDINGS: Reports $38.54 Million Net Income for 2010 ------------------------------------------------------------ On February 4, 2011, Airtran Holdings, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, reporting net income of $38.54 million on $2.62 billion of total operating revenue for the year ended December 31, 2010, compared with net income of $134.66 million on $2.34 billion of total operating revenue during the prior year. At December 31, 2010, the Company's balance sheet showed $2.18 billion in total assets, $1.64 billion in total liabilities and $539.36 million in total stockholders' equity. A full-text copy of the Annual Report is available for free at: http://ResearchArchives.com/t/s?7304 About AirTran Holdings Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE: AAI) -- http://www.airtran.com/-- through its wholly owned subsidiary, AirTran Airways, Inc., operates scheduled airline service throughout the United States and to selected international locations. * * * AirTran carries 'Caa1' corporate family and probability of default ratings from Moody's Investors Service. It has 'B-' issuer credit ratings from Standard & Poor's. At the end of September 2010, Moody's said it has placed AirTran's corporate family rating under review for possible upgrade, after the announcement that Southwest Airlines, Inc., has entered into a definitive agreement to acquire 100% of the outstanding common stock of AirTran for cash and common stock aggregating $1.4 billion. The companies indicated that a closing would not occur until sometime in the first half of 2011. On Sept. 27, 2010, AirTran announced that it reached an agreement to sell itself to higher-rated Southwest Airlines for $1.3 billion in cash and Southwest stock. Southwest values the transaction at $3.2 billion including assumed AirTran debt and aircraft leases. Southwest forecasts annual revenue and cost synergies exceeding $400 million once the airlines' operations are combined by 2013. Southwest also sees one-time transaction costs of $300 million- $500 million. "In its view, the combination would weaken Southwest's financial profile, which S&P characterize as intermediate -- the strongest among rated U.S. airlines," said Standard & Poor's credit analyst Philip Baggaley, in September 2010. "Southwest's operating and financial performance has improved in 2010, with EBITDA interest coverage increasing to 4.6x for the 12 months ended June 30, 2010, from 3.6x a year earlier and funds from operations to debt increasing to 20% from 12%. While these are still below appropriate levels for the rating category, S&P expects the improving operating trend to result in increasing levels over the next several quarters. AirTran has substantial operating lease commitments (around $2 billion), since, unlike Southwest, it does not own many of its aircraft. These commitments would be assumed by Southwest, significantly increasing its lease-adjusted debt obligations." ALION SCIENCE: Incurs $11.13-Mil. Net Loss in Fiscal Q1 ------------------------------------------------------- On February 4, 2011, Alion Science and Technology filed its quarterly results with the U.S. Securities and Exchange Commission reporting a net loss of $11.13 million on $200.77 million of contract revenue for the fiscal first quarter ended December 31, 2010, compared with a net loss of $7.94 million on $205.74 million of contract revenue for the same period the year before. The Company's balance sheet at December 31, 2010, showed, $630.61 million in total assets, $719.81 million in total liabilities, $147.60 million in redeemable common stock, $20.78 million in common stock warrants, $177,000 of accumulated other comprehensive loss, and $257.40 million in accumulated deficit. A full-text copy of the Quarterly Report is available for free at: http://ResearchArchives.com/t/s?7308 About Alion Science Alion Science and Technology Corporation, based in McLean, VA, is an employee-owned company that provides scientific research, development, and engineering services related to national defense, homeland security, and energy and environmental analysis. Particular areas of expertise include communications, wireless technology, netcentric warfare, modeling and simulation, chemical and biological warfare, program management. * * * Alion carries 'Caa3' corporate family and probability of default Ratings, with stable outlook, from Moody's. Alion carries a 'B-' corporate credit rating, with stable outlook, from Standard & Poor's. Moody's said in March 2010, "The Caa1 corporate family rating would balance the continued high leverage against a promising business backlog that could sustain the good 2009 revenue growth rate, though credit challenges would remain pronounced." ALL AMERICAN: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: All American Hardwood, Inc. 1735 E. Grevillea Court Ontario, CA 91761 Bankruptcy Case No.: 11-14116 Chapter 11 Petition Date: February 8, 2011 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Deborah J. Saltzman Debtor's Counsel: Michael B. Reynolds, Esq. SNELL & WILMER LLP 600 Anton Blvd Ste 1400 Costa Mesa, CA 92626 Tel: (714) 427-7000 E-mail: mreynolds@swlaw.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/cacb11-14116.pdf The petition was signed by Angela Ma, president. ALLY FINANCIAL: Kentucky Owners Drop Suit vs. Citi, Ally -------------------------------------------------------- Elizabeth Amon at Bloomberg News reports that Kentucky homeowners dropped a possible class-action suit in which Citigroup Inc. and Ally Financial Inc. units were accused of conspiring with Mortgage Electronic Registration Systems Inc. to falsely foreclose on loans. Bloomberg relates that Heather Boone McKeever, the Lexington, Kentucky, lawyer who sued on behalf of the homeowners, said by e-mail that she dropped the case Feb. 3 because as a solo practitioner she wouldn't be able to clear the "necessary hurdles" for maintaining a federal class action and she couldn't interest a larger law firm. She said she continues to advise the plaintiffs in their individual state-court cases. The lawsuit, filed as a civil-racketeering case on behalf of all Kentucky homeowners facing foreclosure, also named as a defendant Reston, Virginia-based MERS, the company that handles mortgage transfers among member banks. The Kentucky homeowners, Bloomberg discloses, filed their complaint Sept. 28 in Louisville. They claimed that through MERS the banks are foreclosing on homes even when they don't hold titles to the properties. The suit was dismissed without prejudice. The case is Foster v. Mortgage Electronic Registration Systems Inc., Case No. 10-cv-611, (W.D. Ky.). About Citigroup Inc. Based in New York, Citigroup Inc. (NYSE: C) -- is a global diversified financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup also received $45 billion in bailout aid. Citigroup sold assets to repay the bailout funds. 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. In February 2011, Moody's Investors Service upgraded the issuer and senior unsecured ratings of Ally Financial Inc. and its supported subsidiaries to B1 from B3. Concurrently, Moody's upgraded the senior secured (second lien) and senior unsecured ratings of mortgage finance subsidiary Residential Capital LLC to Caa3 and Ca, respectively, from C. The rating outlook for both Ally and ResCap is stable. Moody's said the Ally and ResCap upgrades reflect a decline in ResCap's exposure to portfolio under-performance and mortgage repurchase risks and an associated decrease in contingent risks to Ally relating to its support of ResCap. Additional factors supporting Ally's upgrade include its strengthened liquidity and capital positions and prospects for continued profitability in its core auto finance and mortgage businesses based upon positive asset quality performance trends. ALMA ENERGY: Pikeville Energy Suit Remanded to Bankr. Court ----------------------------------------------------------- When is a bankruptcy court's order "final" for purposes of appeal? That is the threshold question posed by the action, Pikeville Energy Group, LLC, v. THC Kentucky Coal Venture I, LLC, et al., Case No. 10-136 (E.D. Ky.). Pikeville Energy filed a notice of appeal from the United States Bankruptcy Court for the Eastern District of Kentucky. Pikeville Energy seeks review of two orders issued by the bankruptcy court -- one dismissing its cross-claims in an adversary proceeding and another denying its motion for reconsideration of that order. Kentucky Coal Venture I LLC, Kentucky Coal Venture II LLC, THC Kentucky Coal Venture I LLC, West Virginia Coal Venture I LLC, KWV Operations LLC, and Warren E. Halle have filed a motion to dismiss the appeal. District Judge Amul R. Thapar held that, because the orders from the adversary proceeding were interlocutory and not "final" within the meaning of 28 U.S.C. Sec. 158(a)(1), the action must be remanded to the bankruptcy court. Also, the District Court declines to exercise its discretionary authority to grant Pikeville Energy leave to appeal under Sec. 158(a)(3). A copy of the District Court's February 7, 2011 Memorandum Opinion and Order is available at http://is.gd/Ojf5bifrom Leagle.com. About Alma Energy Alma Energy, LLC, owned rights to mine coal on two tracts of land located in Pike County, Ky. Out of cash, the Debtor suspended its mining operation and sought chapter 11 protection (Bankr. E.D. Ky. Case No. 07-70370) on August 13, 2007. The mining operation was restarted in 2008 with funding by Pikeville Energy Group, LLC, but halted again during the chapter 11 proceeding. On April 17, 2009, the United States Trustee moved to dismiss the case or convert it to a Chapter 7 liquidation proceeding. On May 20, 2009, the bankruptcy court entered an order converting the Debtor's case to one under Chapter 7, and the U.S. Trustee appointed Phaedra Spradlin as the Chapter 7 trustee. APEX DIGITAL: Court Sets February 18 as Claims Bar Date ------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California set Feb. 18, 2011, as deadline for creditors of Apex Digital to file proofs of claim. Governmental units must file 180 days after Feb. 18, 2011. All proofs of claim must be sent to: United States Bankruptcy Court 255 East Temple Street Los Angeles, California 90012 About Apex Digital Walnut, California-based Apex Digital, Inc. -- aka AW XEPA Technologies Inc., AW Apex R&D Shangai, AW Apex, AW E2Go, AW Entertainment to Go -- is a privately held company that provides and markets consumer electronics, including high-definition LCD televisions, home entertainment media devices, solar powered lights and digital set top boxes. Apex Digital filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 10-44406) on August 17, 2010. Juliet Y. Oh, Esq., in Los Angeles, California, assists the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million as of the Petition Date. ARLIE & COMPANY: Court Approves Sale of Jasper Property ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon has authorized Arlie & Company to sell its real property comprised of approximately 15.25 acres of land at Lane County Tax Lot 18-02-09- 00-00102 to Springfield School District No. 19 for the sum of $1,200,000, on the terms set forth in the Real Estate Purchase and Sale Agreement dated December 30, 2010. The liens held by Siuslaw Bank and Lane County Assessment & Taxation will be paid in full upon the closing of the sale. A copy of the Court's order is available for free at: http://bankrupt.com/misc/Arlie&Company.SaleOrder.pdf About Arlie & Company Eugene, Oregon-based Arlie & Company -- http://www.arlie.com/-- is a commercial and residential real estate developer that operates in Oregon and Hawaii. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Ore. Case No. 10-60244) on January 20, 2010. John D. Fiero, Esq., and Linda F. Cantor, Esq., at Pachulski Stang Ziehl & Jones LLP, in San Francisco, Calif.; and Brad T. Summers, Esq., and David W. Criswell, Esq., at Ball Janik LLP, in Portland, Ore., represent the Debtors as counsel. The Company disclosed $227,191,924 in assets and $65,412,220 in liabilities as of the Chapter 11 filing. ARLIE & COMPANY: Proposes April 1 Auction for Hawaii Assets ----------------------------------------------------------- Arlie & Company asks the U.S. Bankruptcy Court for the District of Oregon to approve the bidding procedures in connection with the proposed sale of its approximately 5,226 acres of prime forest properties located in Hilo, Hawaii, free and clear of liens, claims and encumbrances. The proposed sale has the consent and approval of the Official Committee of Unsecured Creditors of the Debtor. The Properties consist of 7 separate parcels in Hilo, Hawaii, which are believed to be worth in excess of $50 million upon receipt of appropriate logging permits. Other than a disputed, void lien, the Properties are unencumbered. The Debtor has decided to sell the Properties in order to help fund its proposed plan of reorganization. The Debtor proposes to sell the Properties, either as two separate forests or collectively, in a two-step bid process by first seeking confidential, sealed bids from prospective purchasers from which a "stalking-horse" bidder will be selected. Immediately following the Auction, the Debtor will seek approval of the sale at a duly scheduled hearing before the Court. The Debtor asks the Court to establish these dates and deadlines, relating to competitive bidding and approval of the sale: Event Date or Deadline ----- ---------------- Initial Bid Deadline: March 16, 2011, at 5:00 p.m. Identification of Initial Bidder: March 23, 2011, at 5:00 p.m. Initial Bidder Documentation and Deposit Deadline: March 24, 2011, at 5:00 p.m. Qualified Bid and Deposit Deadline for Auction: March 31, 2011, at 5:00 p.m. Auction: April 1, 2011, at 10:00 a.m. Sale Hearing: April 4, 2011, at 10:00 a.m. About Arlie & Company Eugene, Oregon-based Arlie & Company -- http://www.arlie.com/-- is a commercial and residential real estate developer that operates in Oregon and Hawaii. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Ore. Case No. 10-60244) on January 20, 2010. John D. Fiero, Esq., and Linda F. Cantor, Esq., at Pachulski Stang Ziehl & Jones LLP, in San Francisco, Calif.; and Brad T. Summers, Esq., and David W. Criswell, Esq., at Ball Janik LLP, in Portland, Ore., represent the Debtors as counsel. The Company disclosed $227,191,924 in assets and $65,412,220 in liabilities as of the Chapter 11 filing. ARROWHEAD GENERAL: Moody's Assigns 'B3' Ratings to First-Lien Loan ------------------------------------------------------------------ Moody's Investors Service has assigned B3 ratings to the first- lien credit facilities and a Caa1 rating to the second-lien credit facility being arranged for Arrowhead General Insurance Agency, Inc. The rating agency has also affirmed Arrowhead's B3 corporate family rating while maintaining a stable outlook. Proceeds from the new facilities will be used to repay Arrowhead's existing credit facilities and to cover related transaction costs. Upon the closing of the new facilities, the ratings on Arrowhead's existing facilities will be withdrawn. Ratings Rationale "Arrowhead's refinancing will significantly enhance its credit profile by extending its debt maturities and increasing the cushion in its financial covenants," said Bruce Ballentine, Moody's lead analyst for Arrowhead. The company plans to refinance substantially all of its debt by issuing a $15 million five-year first-lien revolving credit facility (rated B3), a $115 million six-year first-lien term loan (rated B3) and a $42 million seven-year second-lien term loan (rated Caa1). According to Moody's, Arrowhead's ratings reflect the company's expertise in distributing specialty property and casualty insurance products, its strong carrier relationships and its consistent operating margins. The company returned to organic growth in revenues and EBITDA during 2010 following various restructuring actions taken in 2009. These strengths are tempered by the company's significant debt burden as well as its modest size relative to the largest national brokers. Arrowhead is also exposed to errors and omissions -- a risk inherent in professional services. Moody's cited these factors that could lead to an upgrade of Arrowhead's ratings: (i) adjusted (EBITDA -- capex) coverage of interest exceeding 2x, (ii) adjusted free-cash-flow-to-debt ratio exceeding 5%, and (iii) adjusted debt-to-EBITDA ratio below 5.5x. Moody's cited these factors that could lead to a downgrade of the company's ratings: (i) adjusted (EBITDA -- capex) coverage of interest below 1.2x, (ii) adjusted debt-to-EBITDA ratio above 7x, or (iii) loss of a major carrier relationship or comparable disruption to a key insurance program. Arrowhead, based in San Diego, California, is a US general agency and program manager, providing product development, marketing, underwriting and administrative services to national insurance carriers. Arrowhead develops specialized insurance products in cooperation with major carriers and distributes those products through a network of retail and wholesale brokers. Arrowhead generated total revenues of $74 million and net income of $0.6 million for the first nine months of 2010. Shareholders' equity was $51 million as of September 30, 2010. BARNEYS NEW YORK: CEO Unveils Plan to Revitalize Retailer --------------------------------------------------------- Dow Jones' Small Cap reports that since joining Barneys New York last September, chief executive Mark Lee has maintained a low profile, hiring a new executive team but not commenting publicly on his strategy for the privately held luxury retailer. The report relates that Mr. Lee recently unveiled some of his early plans to revamp the iconic yet struggling luxury retailer. About Barneys New York Privately held Barneys New York, Inc. -- http://www.barneys.com/- - is a 40-store luxury department store chain sells designer apparel for men, women, and children; shoes; accessories; and home furnishings. It has 10 full-size Barneys New York flagship stores in New York City, Beverly Hills, Boston, Chicago, and other major cities; some 20 smaller Barneys Co-Op shops; and about a dozen outlet stores. Founded in 1923 by Barney Pressman, Barneys New York is owned by an affiliate of Istithmar PJSC, an investment firm owned by the Dubai government. * * * Barneys New York has 'Caa3' long term corporate family and probability of default ratings, with negative outlook, from Moody's Investors Service. It has 'CCC' issuer credit ratings, with negative outlook, from Standard & Poor's. In June 2010, Standard & Poor's Ratings said the negative outlook reflects S&P's concern that Barneys' capital structure is unsustainable, and that some sort of restructuring is a likely outcome. BAYOU WOOD: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Bayou Wood Pellets, LLC 1315 Hwy 15 West Monroe, LA 71291 Bankruptcy Case No.: 11-30197 Chapter 11 Petition Date: February 9, 2011 Court: United States Bankruptcy Court Western District of Louisiana (Monroe) Judge: Stephen V. Callaway Debtor's Counsel: Rex D. Rainach, Esq. REX D. RAINACH, A PROFESSIONAL LAW CORP. 3622 Government St. Baton Rouge, LA 70806 Tel: (225) 343-0643 Fax: (225) 343-0646 E-mail: rainach@msn.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Steven A. Tippin, president, member. BERRY PLASTIC: Estimates $1.04-Bil. Net Sales for 1st Qtr. ---------------------------------------------------------- Berry Plastics Corporation estimates that its net sales will total $1.041 billion during its fiscal 2011 first quarter ended January 1, 2011, representing an increase of 18% over $880 million in the fiscal 2010 first quarter. This increase is a result of acquisition volume growth attributed to the acquisitions of Pliant and Superfos of 20% and net selling price increases of 5% partially offset by a base volume decline of 7%. The base volume decline is primarily attributed to the quarterly period ended January 1, 2011 being a thirteen week period compared to a fourteen week period for the quarterly period ended January 2, 2010, and decreased sales in the Company's retail trash bag and retail sheeting product lines. Also, the Company estimates that its fiscal 2011 first quarter Adjusted EBITDA will be approximately $138 million compared to $158 million for the first fiscal quarter of 2010. These amounts reflect management's estimate as of February 1, 2011. Adjusted EBITDA is a Non-GAAP measure. About Berry Plastics Berry Plastics Corporation manufactures and markets plastic packaging products, plastic film products, specialty adhesives and coated products. At January 2, 2010 the Company had more than 80 production and manufacturing facilities, primarily located in the United States. Berry is a wholly-owned subsidiary of Berry Plastics Group, Inc. Berry Group is primarily owned by affiliates of Apollo Management, L.P. and Graham Partners. Berry, through its wholly owned subsidiaries operates five reporting segments: Rigid Open Top, Rigid Closed Top, Flexible Films, Tapes/Coatings and Specialty Films. The Company's customers are located principally throughout the United States, without significant concentration in any one region or with any one customer. On December 3, 2009, Berry Plastics obtained control of 100% of the capital stock of Pliant upon Pliant's emergence from reorganization pursuant to a proceeding under Chapter 11 for a purchase price of $602.7 million. Pliant is a leading manufacturer of value-added films and flexible packaging for food, personal care, medical, agricultural and industrial applications. The acquired business is primarily operated in Berry's Specialty Films reporting segment. Berry Plastics' balance sheet at Oct. 2, 2010, showed $5.63 billion in total assets, $5.37 billion in total liabilities, and stockholders' equity of $257.0 million. * * * Berry Plastics has a 'B3' corporate family rating, with stable outlook, from Moody's Investors Service. Moody's said in April 2010 that Berry's B3 CFR reflects weakness in certain credit metrics, financial aggressiveness and acquisitiveness and a continued difficult operating and competitive environment especially in the flexible plastics and tapes segments. The rating also reflects the Company's exposure to more cyclical end markets, relatively weak contracts with customers and a high percentage of commodity products. In November 2011, Standard & Poor's Ratings Services affirmed the 'B-' corporate credit rating on Berry and its holding company parent, Berry Plastics Group Inc. "The ratings on Berry reflect the risks associated with the company's highly leveraged financial profile and acquisition- driven growth strategy as well as its fair business risk profile," said Standard & Poor's credit analyst Cynthia Werneth. BERNARD L MADOFF: Judge Bars Suits Against Madoff Relatives ----------------------------------------------------------- Bankruptcy Law360 reports that Judge Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York on Wednesday barred 10 groups of plaintiffs from pursuing suits against family members of Ponzi schemer Bernard L. Madoff, contending the claimants are intruding on the turf of a litigation trustee overseeing recovery actions. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of October 29, 2010, a total of US$5.69 billion in claims by investors has been allowed, with US$741.2 million to be paid by the Securities Investor Protection Corp. Investors are expected to receive additional distributions from money recovered by Mr. Picard from lawsuits or settlements. BEST ENERGY: Increases Special Advance Amounts Under Revolver ------------------------------------------------------------- On January 31, 2011, Best Energy Services, Inc. entered into Amendment No. 17 to its Revolving Credit, Term Loan and Security Agreement with PNC Bank, National Association. The amendment increases the "Special Advance Amount" available to the Company from 1,750,000 to 1,856,250 between December 21, 2010 and February 28, 2011, for the express and limited purpose of moving rigs to the Eagle Ford in South Texas. In connection with amendment, the Company issued PNC a warrant to purchase 250,000 shares of common stock for a period of 5 years at an exercise price of $0.10. The Company has also filed Amendment No. 16 to the agreement with PNC. The amendment increases the "Special Advance Amount" available to the Company from 1,750,000 to 1,875,000 between December 21, 2010 and January 31, 2011, for the express and limited purpose of moving rigs to the Eagle Ford in South Texas. In connection with amendment, the Company issued PNC a warrant to purchase 250,000 shares of common stock for a period of 5 years at an exercise price of $0.10. A full-text copy of Amendment No. 16 to the Revolving Credit, Term Loan and Security Agreement among Best Energy Services, Inc., Bob Beeman Drilling Company, Best Well Service, Inc. and financial institutions represented by PNC Bank, National Association dated January 20, 2011, is available for free at: http://ResearchArchives.com/t/s?730b A full-text copy of Amendment No. 17 to the Revolving Credit, Term Loan and Security Agreement among Best Energy Services, Inc., Bob Beeman Drilling Company, Best Well Service, Inc. and financial institutions represented by PNC Bank, National Association dated January 31, 2011, is available for free at: http://ResearchArchives.com/t/s?730c About Best Energy Headquartered in Houston, Texas, Best Energy Services, Inc. (OTC BB: BEYS) -- http://www.BEYSinc.com/-- is a well service/workover provider in the Hugoton Basin. The Company's balance sheet at September 30, 2010, showed $20.72 million in total assets, $30.58 million in total liabilities, and a stockholders' deficit of $9.86 million. M&K CPAs, PLLC, in Houston, Texas, expressed substantial doubt about Best Energy's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company's established source of revenues is not sufficient to cover its operating costs. BILLY JAMES MACE: Regions Bank Fails in Bid to Derail Plan ---------------------------------------------------------- Bankruptcy Judge George C. Paine, II, confirmed the Chapter 11 Trustee's Second Amended Plan for Billy James Mace, overruling the objection of Regions Bank, Stewart Truss Co., LLC, and Stewart Lumber Co. The Court finds that all elements of 11 U.S.C. Sec. 1129(a) are met by the Chapter 11 Trustee's plan, with the exception of (a)(8). The Chapter 11 Trustee sought to cramdown Regions, pursuant to Sec. 1129(b). Regions asserts that the Chapter 11 Trustee's plan unfairly discriminates against Regions, and that the plan is not fair and equitable. Regions has three claims secured by the rental, real properties, and argues that the Plan cannot be confirmed because the loan repayment duration being proposed (20 years) exceeds the customary five-year balloon terms which might be available to Mr. Mace (and others) in the marketplace. A copy of the Court's January 25, 2011 Memorandum is available at http://is.gd/En5dGtfrom Leagle.com. About Billy James Mace Billy James Mace, aka Bill Mace, dba Bill Mace Homes, dba Bill's Construction, is a homebuilder and was one of the largest property owners in the Clarksville, Tennessee area. Mr. Mace filed for Chapter 11 bankruptcy (Bankr. M.D. Tenn. Case No. 08-06124) on July 17, 2008. Robert James Gonzales, Esq. -- rjg@mglaw.net -- at MGLAW PLLC, serves as the Debtor's counsel. In his petition, Mr. Mace estimated assets of $50 million to $100 million, and debts of $10 million to $50 million. BIOFUEL ENERGY: Generates $46 Million From Rights Offering ---------------------------------------------------------- On February 4, 2011, Biofuel Energy Corp. announced the completion of its rights offering. In total, the rights offering, including the previously announced backstop commitment and the concurrent private placement by BioFuel Energy, LLC, generated aggregate gross proceeds of $46,000,000, which the Company will use to repay in full its bridge loan facility and subordinated debt and to make certain other payments. The Company sold 62,640,532 depositary shares representing shares of series A non-voting convertible preferred stock of the Company, through the exercise of subscription rights at a rights price equal to $0.56 per depositary share. This included 19,016,990 depositary shares sold to certain affiliates of Greenlight Capital, Inc. and 14,632,653 depositary shares sold to certain affiliates of Third Point LLC. The aggregate purchase price of these depositary shares was $35,078,698. Certain affiliates of Greenlight Capital, Inc. also purchased from the Company an additional 609,785 depositary shares that were not subscribed for in the rights offering by other stockholders, and certain affiliates of Third Point LLC also purchased from the Company an additional 523,286 depositary shares that were not subscribed for in the rights offering by other stockholders, pursuant to their respective backstop commitments, at a price per depositary share equal to $0.56, for an aggregate purchase price of $634,520. The rights offering expired at 5:00 p.m., New York time, on January 28, 2011. The Company is a holding company and its sole asset is its membership interest in BioFuel Energy, LLC. Concurrent with the rights offering, the LLC conducted a private placement. The LLC's concurrent private placement was structured so as to provide the holders of membership interests in the LLC, whose interests are exchangeable on a one-for-one basis for shares of the Company's common stock, with a private placement that was economically equivalent to the rights offering. The aggregate purchase price of the membership interests sold in the LLC's concurrent private placement was $10,286,782. The stockholders of the Company, at a special meeting held on February 2, 2011, approved the increase in the number of authorized shares of common stock of the Company, which resulted in the automatic conversion of the Preferred Stock into shares of common stock. As a result of that conversion, subscribers for depositary shares that were to be issued pursuant to the rights offering will receive one share of common stock in lieu of each depositary share subscribed for. The Company intends to distribute the newly issued shares of common stock immediately. The Company has filed a registration statement on Form S-1 with the Securities and Exchange Commission that registers the subscription rights, the depositary shares, the series A non- voting convertible preferred stock underlying the depositary shares and the common stock issuable upon conversion of the series A non-voting convertible preferred stock. Copies of the registration statement can be accessed through the SEC's Web site at www.sec.gov. The offering of these securities was made only by means of a prospectus, copies of which may be obtained from Okapi Partners LLC, the information agent for the rights offering, at (877) 869-0171. Piper Jaffray & Co acted as financial advisor to the Company and its independent committee for the rights offering. About Biofuel Energy Denver, Colo.-based BioFuel Energy Corp. (Nasdaq: BIOF) -- http://www.bfenergy.com/-- aims to become a leading ethanol producer in the United States by acquiring, developing, owning and operating ethanol production facilities. It currently has two 115 million gallons per year ethanol plants in the Midwestern corn belt. The Company's balance sheet at September 30, 2010, showed $329.7 million in total assets, $274.6 million in total liabilities, and stockholders' equity of $55.1 million. As reported in the Troubled Company Reporter on March 31, 2010, Grant Thornton LLP, in Denver, 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 experienced declining liquidity and has $16.5 million of outstanding working capital loans that mature in September 2010. "If we are unable to raise sufficient proceeds from the rights offering, the LLC's concurrent private placement, or from other sources, we may be unable to continue as a going concern, which could potentially force us to seek relief through a filing under the U.S. Bankruptcy Code," the Company said in its Form 10-Q for the third quarter of 2010. BLOCKBUSTER INC: Mulls Selling Biz Amid Creditor Disagreements -------------------------------------------------------------- The Wall Street Journal's Mike Spector reports that people familiar with the matter said Blockbuster Inc. is preparing to put itself up for sale after creditors disagreed on plans to give the Company more cash to help it exit bankruptcy protection. The sources said Blockbuster now plans to seek buyers instead of reorganizing in bankruptcy court and could ask a judge to approve bidding procedures for the company as soon as next week. The sources also told the Journal creditors including Carl Icahn and a consortium led by hedge fund Monarch Alternative Capital LP are leading contenders to buy the chain out of bankruptcy court. According to the Journal's sources, a bidder could offer more than $300 million for the chain, plus assumption of various liabilities, including certain store leases. According to the report, Blockbuster remains in talks with creditors on the structure and value of potential bids. The Journal relates the people cautioned that Blockbuster's sale plans could be delayed. The Journal says Blockbuster and Monarch declined to comment, and Mr. Icahn didn't respond to requests for comment. Mr. Spector also reports that another factor driving momentum toward Blockbuster's looming sale is that bondholders fear the Company's value is eroding in bankruptcy court. Without clear ownership or direction, Blockbuster remains hindered in efforts to compete with Netflix Inc. and other rivals, the people familiar with the matter told the Journal. Blockbuster's reorganization plan calls for bondholders to forgive more than $630 million in debt for ownership of the video-store chain. In addition to that debt, the bondholders have already provided Blockbuster with a $125 million loan to see it through bankruptcy court. According to Mr. Spector, bondholders have held varied talks on how much capital they would be willing to give Blockbuster on top of that reorganization plan. The Journal's sources said Mr. Icahn at one point had been willing to invest more than $200 million, but Monarch and other investment firms holding Blockbuster's bonds weren't willing to invest that much. But they also didn't want to be diluted by an investment from Mr. Icahn. Since Mr. Icahn and the Monarch-led group each hold enough debt to block the company's current reorganization plan, the disagreement led to a stalemate, prompting Blockbuster to hang a for-sale sign. The sources said Mr. Icahn and the Monarch-led group are each likely to bid for Blockbuster, and the Company is expected to soon name either Mr. Icahn or the Monarch-led group as a so-called stalking-horse bidder. According to the Journal, people familiar with the matter also said Blockbuster could close hundreds more stores under new ownership. The sources relate that both Mr. Icahn and the Monarch- led group have discussed closing about 1,000 of the chain's more than 5,000 remaining outlets. Blockbuster has closed more than 1,000 stores in the U.S. during the past two years. Any decisions about store closures probably wouldn't occur until Blockbuster reaches a deal with a buyer, one of these people said. Likely Buyers Shira Ovide, writing for WSJ's Deal Journal, relates investors to whom Blockbuster owes money will likely credit bid in a bankruptcy auction. But Ms. Ovide doesn't discount Netflix and Coinstar from fielding in offers for Blockbuster's inventory. Ms. Ovide also says a Hollywood studio might be intrigued enough to take over Blockbuster, pointing out that Blockbuster has about 1.2 million subscribers for its movies-by-mail business, which an enterprising media company could use as a launch pad to start an online-movie service to rival Netflix. "Frankly, though, these seem like long shots," admits Ms. Ovide. "More likely, Blockbuster is going to be owned by some [hedge fund]." About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. The Official Committee of Unsecured Creditors has retained Cooley LLP as its counsel. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. In its latest monthly operating report filed with the Bankruptcy Court, Blockbuster disclosed $1.066 billion in assets, $422.2 million in liabilities not subject to compromise and $1.165 billion in liabilities subject to compromise, and a deficit of $533.8 million as of Nov. 28, 2010. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: Gibb Wants Lift Stay to Liquidate Judgement ------------------------------------------------------------ William J. Gibbs asks the Court to lift the automatic stay to determine the extent of available insurance coverage and to liquidate his claim based on a prepetition judgment. Mr. Gibbs holds an unsecured and unliquidated claim for $2,000,000 against Blockbuster Inc. based on his assertions of false imprisonment, negligence, slander and malicious prosecution. He commenced a lawsuit against Blockbuster and its employee, Jeron Brown, in November 2006. The Circuit Court for the City of St. Louis, State of Missouri, entered a $2 million judgment in favor of Mr. Gibbs in February 2009. In May 2010, the Missouri Court of Appeals reversed and remanded the lawsuit to the Circuit Court for retrial. In September 23, 2010, the Debtors filed for bankruptcy protection. E. Rebecca Case, Esq., at Stone, Leyton & Gershman, in St. Louis, Missouri -- erc@stoneleyton.com -- asserts that Mr. Gibbs' Claim against Blockbuster is covered, at least in part, by insurance it maintained. She says the insurer has retained counsel to represent Blockbuster and defend the Claim. Mr. Gibbs does not seek recovery against Blockbuster at this time, Ms. Case contends. She notes that any insurance deductible or other aspect of the Claim in excess of the insurance coverage, or not otherwise covered by insurance would be filed as a claim in Blockbuster's bankruptcy case. Ms. Case argues that "cause" exist for the automatic stay to be modified or terminated pursuant to Section 362(d)(1) of the Bankruptcy Code because Mr. Gibbs is not adequately protected. She points out that Blockbuster has no equity in the property/insurance policy and the policy is not necessary to an effective reorganization. The Court will convene a hearing on February 24, 2011, to consider the request. Objections are due February 17. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. The Official Committee of Unsecured Creditors has retained Cooley LLP as its counsel. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. In its latest monthly operating report filed with the Bankruptcy Court, Blockbuster disclosed $1.066 billion in assets, $422.2 million in liabilities not subject to compromise and $1.165 billion in liabilities subject to compromise, and a deficit of $533.8 million as of Nov. 28, 2010. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: Proposes K&L as Special IP Counsel --------------------------------------------------- Blockbuster Inc. and its units seek the Bankruptcy Court's authority to employ K&L Gates LLP as their special intellectual property counsel in connection with various technology and Internet matters, nunc pro tunc to the Petition Date. The services of K&L Gates are necessary to enable the Debtors to negotiate various technology and Internet agreements with the mobile phone and consumer electronics companies that service the Debtors' online video services and related devices, Roderick J. McDonald, Esq., Blockbuster Inc.'s vice president, general counsel, and secretary, tells Judge Lifland. K&L Gates also negotiates the Debtors' outsourcing agreements for Blockbuster's video encoding and distribution needs. K&L Gates has served as the Debtors' outside counsel with respect to certain intellectual property matters, including the creation of various partnerships with counterparties, like Comcast and NCR, that promote the Debtors' DVD by-mail services, kiosk services, and other Internet-based services for their customers, Mr. McDonald asserts. He adds that since at least 1999, K&L Gates has represented the Debtors in pursuing the IP Matters. In connection with the IP Matters, K&L Gates will: (a) represent the Debtors with respect to technology and Internet matters; (b) negotiate the Debtors' video distribution and partnership agreements with various mobile phone and consumer electronics companies; and (c) represent the Debtors in any other transactions that may arise with respect to the IP Matters. The Debtors intend to pay K&L Gates under an hourly fee structure, which has been the traditional arrangement between the Debtors and K&L Gates, Mr. McDonald says. He notes that it was the practice of both the Debtors and K&L Gates to undertake new matters without a written engagement agreement. Under that arrangement, fees are based on K&L Gates' standard hourly rates in effect at the time the services are rendered. The hourly rates for professional services rendered in connection with the IP Matters currently range from $310 for associates up to $560 per hour for partners. Thus, the Debtors propose to compensate K&L Gates by its hourly rates and to reimburse the firm of its necessary expenses. Chad W. King, a partner at K&L Gates, assures the Court that K&L Gates does not hold or represent any interest adverse to the bankruptcy estates and is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. The Official Committee of Unsecured Creditors has retained Cooley LLP as its counsel. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. In its latest monthly operating report filed with the Bankruptcy Court, Blockbuster disclosed $1.066 billion in assets, $422.2 million in liabilities not subject to compromise and $1.165 billion in liabilities subject to compromise, and a deficit of $533.8 million as of Nov. 28, 2010. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: Proposes V & E as Litigation Counsel ----------------------------------------------------- Blockbuster Inc. and its units seek the Court's permission to employ Vinson & Elkins LLP as their special litigation counsel in connection with various litigation and corporate matters, nunc pro tunc to the Petition Date. Roderick J. McDonald, Esq., Blockbuster Inc.'s vice president, general counsel, and secretary, informs the Court that V & E has represented the Debtors in litigation matters and corporate and securities matters since approximately 1999. In connection with the Litigation Matters and the Corporate and Securities Matters, V & E will: (a) respond to third-party discovery requests, prepare witnesses, and handle all administrative matters with respect to several antitrust litigation matters; (b) represent and defend the Debtors in several patent infringement cases; (c) represent and defend the Debtors in several class action lawsuits, and any related matters; and (d) represent the Debtors in any Corporate and Securities Matters that may be needed during the pendancy of the Chapter 11 cases to keep the Debtors compliant with the applicable regulations. The Debtors will pay V & E in accordance with its current standard hourly rates, plus reimbursement of actual and necessary expenses. V & E's customary hourly rates for the personnel currently contemplated to work on the cases are (i) $260 for the most junior associate to $585 for the most senior partner, and (ii) $130 to $245 for the paralegals. Frank C. Brame, a partner at V & E, assures Judge Lifland that his firm does not hold or represent any interest adverse to the Debtors' bankruptcy estate and is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. The Official Committee of Unsecured Creditors has retained Cooley LLP as its counsel. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. In its latest monthly operating report filed with the Bankruptcy Court, Blockbuster disclosed $1.066 billion in assets, $422.2 million in liabilities not subject to compromise and $1.165 billion in liabilities subject to compromise, and a deficit of $533.8 million as of Nov. 28, 2010. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BRIAN A KITTS: Ch. 7 Trustee Gets $241T Damages in Winterfox Suit ----------------------------------------------------------------- J. Kevin Bird, Chapter 7 Trustee, v. Winterfox, LLC, Adv. Pro. No. 06-2250 (Bankr. D. Utah), seeks recovery under the Truth in Lending Act related to two high-interest prepetition bridge loans that Winterfox made to Brian A. Kitts that are secured by real property in Park City, Utah. After a three-day trial in December 2009, the Bankruptcy Court issued its Findings of Fact and Conclusions of Law concluding inter alia that TILA did not apply to Winterfox and dismissing the Complaint. The Chapter 7 Trustee appealed the Bankruptcy Court's Order Dismissing Adversary Proceeding as well as its Order Granting Winterfox, LLC's Motion to Strike the Trustee's Amended Complaint and Order Striking Objection to Claim of Winterfox, LLC to the United States District Court for the District of Utah, although he voluntarily dismissed the claim objection appeal. The District Court affirmed the Bankruptcy Court's decision to strike the Chapter 7 Trustee's Amended Complaint along with other findings and conclusions but reversed on the issue of whether TILA applied to Winterfox and remanded the matter "for further fact finding concerning damages for violation of the federal Truth in Lending Act (TILA) as well as the Trustee's request for attorney's fees." In compliance with the District Court's mandate, the Bankruptcy Court accepted additional briefing by both parties; took further evidence; and heard oral arguments at a hearing on December 17, 2010. In a Post-Remand Findings of Fact and Conclusions of Law dated February 8, 2011, Bankruptcy Judge Joel T. Marker held that the Chapter 7 Trustee is entitled to statutory TILA damages of $4,000, $87,500 for prepaid finance charges, and $150,000 for attorney's fees and costs. A copy of the Bankruptcy Court's decision is available at http://is.gd/m8ccwGfrom Leagle.com. About Brian A. Kitts Park City, Utah-based Brian Arthur Kitts filed for Chapter 11 bankruptcy (Bankr. D. Utah Case No. 05-27158) on May 4, 2005. Judge Glen E. Clark presided over the case. Russell S. Walker, Esq., at Woodbury & Kesler in Salt Lake City, served as the Debtor's counsel. In his Chapter 11 petition, Mr. Kitts estimated assets and debts of $1 million to $10 million. The case was later converted to Chapter 7. BUCYRUS INTERNATIONAL: S&P Retains 'BB+' Rating on Positive Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Bucyrus International Inc., including the 'BB+' corporate credit rating, remain on CreditWatch, where they were placed with positive implications on Nov. 15, 2010. The CreditWatch placement followed the announcement that the company has entered into an agreement to be acquired by Caterpillar Inc. Under terms of the agreement, Caterpillar will acquire all of Bucyrus' outstanding shares for $92 per share in cash. Bucyrus anticipates that the transaction will be completed mid-2011. S&P will likely withdraw the ratings on Bucyrus if the rated debt is repaid as part the transaction. CANAL CORP: Disclosure Statement Hearing on Feb. 15 --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports Chesapeake Corp., now named Canal Corp., has a hearing on Feb. 15 for approval of the disclosure statement explaining its proposed Chapter 11 plan. The disclosure statement says that general unsecured creditors with $200 million in claims stand to recover 0.38% under the liquidating Chapter 11 plan. Holders of $50 million in revenue bonds are in line for a 2.28% recovery. Holders of $250 million in subordinated notes will receive nothing. All Debtors, except WTM I Company, filed the Joint Liquidation Plan and the accompanying Disclosure Statement on January 7, 2011. Ace American Insurance Company and other entities within the ACE Group of companies, have filed a Limited Objection to the Disclosure Statement. The ACE Companies and the Debtors are parties to certain prepetition insurance policies and related agreements. The ACE Companies argue that the Disclosure Statement does not contain adequate information about ways that the Plan affects insurers' and the Debtors' rights and obligations under insurance policies, any related agreements, and applicable non- bankruptcy law. Fireman's Fund Insurance Company also lodged an objection to the disclosure statement, saying it lacks adequate information as required by Section 1125 of the Bankruptcy Code, and describes an otherwise unconfirmable Plan. Counsel for Fireman's Fund Insurance Company are: Augustus C. Epps, Jr., Esq. Jennifer M. McLemore, Esq. CHRISTIAN & BARTON, LLP 909 East Main Street, Suite 1200r Richmond, VA 23219 Telephone: (804) 697-4104 Facsimile: (804) 697-6104 - and - Leonard P. Goldberger, Esq. John C. Kilgannon, Esq. STEVENS & LEE, P.C. 1818 Market Street, 29th Floor Philadelphia, PA 19103 Telephone: (215) 751-2864 Facsimile: (610) 371-7376 The Ace Companies are represented by: Noah M. Charlson, Esq. BAZELON, LESS & FELDMAN 1515 Market Street, Suite 700 Philadelphia, PA 19102 Telephone: (215) 568-1155 Telecopier: (215) 568-9319 E-mail: ncharlson@bazless.com - and - Charles F. Midkiff, Esq. Robert S. Reverski, Jr., Esq. MIDKIFF, MUNCIE &ROSS, P.C. 300 Arboretum Place, Suite 420 Richmond, VA 23236 Telephone: (804) 560-9600 Facsimile: (804) 560-5997 E-mail: cmidkiff@midkifflaw.com rreverski@midkifflaw.com About Canal Corp. Headquartered in Richmond, Virginia, Canal Corp., formerly Chesapeake Corporation, supplies specialty paperboard packaging products in Europe and an international supplier of plastic packaging products to niche end-use markets. The Company has 44 locations in Europe, North America, Africa and Asia. Chesapeake and 18 affiliates filed Chapter 11 petitions (Bankr. E.D. Va. Lead Case No. 08-336642) on Dec. 29, 2008. Lawyers at Hunton & Williams LLP represent the Debtors. Chesapeake tapped Alvarez and Marsal North America LLC, and Goldman Sachs & Co. as financial advisors. Tavenner & Beran PLC serves as conflicts counsel and Hammonds LLP as special counsel. Kurtzman Carson Consultants LLC serves as claims agent. The United States Trustee for Region 4 appointed seven creditors to serve on an Official Committee of Unsecured Creditors for the Debtors' Chapter 11 cases. Lawyers at Greenberg Traurig LLP represent the Committee. In its petition, Chesapeake disclosed $936,600,000 in total assets and $937,100,000 in total debts as of September 28, 2008. In May 2009, Chesapeake sold its assets to entities controlled by Irving Place Capital Management, L.P. and Oaktree Capital Management, L.P. and, following a competitive bidding process which produced no competing bids. The purchase price was about $485 million. CARGO TRANSPORTATION: U.S. Trustee Forms Creditor's Committee ------------------------------------------------------------- Donald F. Walton, United States Trustee for Region 21, appointed three creditors to serve on the Official Committee of Unsecured Creditors of Cargo Transportation Services Inc. The members of the Committee are: a) Ryder Truck Rental, Inc. Kevin Sauntry, Corporate Collection Manager 6000 Windward Parkway Alpharetta, GA 30005 Email: kevin_sauntry@ryder.com Tel: (770) 569-6511 Fax: (770) 569-6712 b) AAA Cooper Transportation Michelle Lewis, Director - Admin. & Customer Accounts 1751 Kinsey Road (334) 796-0882 (cell) Dothan, AL 36303 Email: michelle.lewis@aaacooper.com Tel: (334) 671-3122 Fax: (334) 671-1306 c) Precision Truck Lines, Inc. Ravi Annand, Vice President of Finance 8111 Huntington Road Woodbridge, Ontario Canada, L4H 0S6 Email: ravi@precisiontrucklines.com Tel: (905) 851-1996 ext. 2231 Fax: (905) 851-5527 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Cargo Transportation Sunrise, Florida-based Cargo Transportation Services, Inc., provides transportation services to clients nationwide, including customized consolidation, distribution, logistics and warehousing services. It has 140 employees and averages $100,000,000 in gross revenue per year. Cargo Transportation filed for Chapter 11 bankruptcy protection on January 12, 2011 (Bankr. M.D. Fla. Case No. 11-00432). Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets at $50 million to $100 million and debts at $10 million to $50 million. CARTER BEHAVIOR: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Carter Behavior Health Services, Inc. 501-A SE Greenville Boulevard Greenville, NC 27858 Bankruptcy Case No.: 11-00932 Chapter 11 Petition Date: February 8, 2011 Court: U.S. Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: Randy D. Doub Debtor's Counsel: Michael P. Peavey, Esq. MICHAEL P. PEAVEY, ATTORNEY AT LAW P.O. Box 1115 Wilson, NC 27894-1115 Tel: (252) 291-8020 Fax: (252) 291-8309 E-mail: mpeavey@peaveylaw.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 17 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb11-00932.pdf The petition was signed by Terry L. Speller, president. CARVER BANCORP: Defers Trust Preferred Dividend Payments -------------------------------------------------------- Carver Bancorp, Inc., and Carver Federal Savings Bank have consented to the Office of Thrift Supervision issuing formal cease and desist orders under which the Company and the Bank will implement enhanced capital and asset quality measures to strengthen the Bank's balance sheet and loan portfolio. "The Orders are an outgrowth of discussions we have been having with the OTS to address the need to significantly raise our capital ratios in light of our current asset quality and earnings level," said Deborah C. Wright, the Company's Chairman and CEO. "While we continue to meet the regulatory definition of a well capitalized bank, the Orders formalize the additional work we need to do and establish the timeframe for doing so." Ms. Wright added, "Anyone following the news about our economy is fully aware of the challenging conditions in communities across our nation, particularly in inner city markets, where unemployment rates are higher than national averages. As a result, Carver has been grappling, as are many small banks across the country, with higher delinquencies and downward valuations in real estate assets. "We are working with an independent advisor to bring in additional capital and are making progress. We also continue to rebalance our loan portfolio and have aggressively reduced our level of real estate loans. The successful implementation of our recapitalization and portfolio realignment strategies is designed to better position us to continue to serve our communities with essential products that build on the strength of our core capabilities and franchise." Robert Holland, Lead Independent Director of the Board of Directors of the Company, said, "The Board is committed, along with the management team, to working closely with the Company's regulators to implement all necessary changes required to protect the Bank and keep it safe and sound for generations to come. We are fully aware of the unique role that minority banks have played in providing capital to businesses and institutions in Harlem, Bedford-Stuyvesant, Crown Heights, St. Albans and many New York City communities. We also take seriously the legacy Carver has built over more than 60 years with the tremendous support of our loyal customers." The Company said that customer deposits continue to receive FDIC insurance coverage and all branches continue to provide full customer service. The Orders include the requirement that the Bank attain and maintain a Tier 1 (Core) Capital Ratio of 9% and a Total Risk Based Capital Ratio of 13% by April 30, 2011. A more thorough description of the Orders may be found in the Company's Form 8-K being filed with this release. Under the Orders, the Bank and Company are also prohibited from paying any dividend without prior OTS approval and, as such, the Company has suspended quarterly cash dividend payments on the Company's fixed-rate cumulative perpetual preferred stock issued under the Troubled Asset Relief Program (TARP) Community Development Capital Initiative to the United States Department of Treasury and is deferring Carver Statutory Trust I trust preferred dividends. About Carver Bancorp, Inc. Carver Bancorp, Inc. -- http://www.carverbank.com/-- (Nasdaq:CARV) is the holding company for Carver Federal Savings Bank, a federally chartered stock savings bank, founded in 1948 to serve African-American communities whose residents, businesses and institutions had limited access to mainstream financial services. Carver, the largest African- and Caribbean-American run bank in the United States, operates nine full-service branches in the New York City boroughs of Brooklyn, Manhattan and Queens. CASAIC OFFSET: Case Summary & 26 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Casaic Offset & Silkscreen, Inc. 1115 Pierremont Road Shreveport, LA 71106 Bankruptcy Case No.: 11-10295 Chapter 11 Petition Date: February 8, 2011 Court: United States Bankruptcy Court Western District of Louisiana (Shreveport) Judge: Stephen V. Callaway Debtor's Counsel: John S. Hodge, Esq. WIENER, WEISS & MADISON P.O. Box 21990 Shreveport, LA 71120-1990 Tel: (318) 226-9100 Fax: (318) 424-5128 E-mail: jhodge@wwmlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 26 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/lawb11-10295.pdf The petition was signed by Richard G. Connell, president. CASCADE BANCORP: C. Casciato Does Not Own Any Securities -------------------------------------------------------- In a Form 3 filing with the U.S. Securities and Exchange Commission on February 4, 2011, Chris Cesare Casciato disclosed that he does not own any securities of Cascade Bancorp. Mr. Casciato, an executive of Lightyear Capital LLC and one or more of its affiliates, is a member of the Company's board of directors. Certain affiliates of Lightyear have filed a separate Form 3 reporting securities of the Company that they may be deemed to beneficially own. Mr. Casciato disclaims beneficial ownership of any securities of the Company that may be deemed to be beneficially owned by affiliates of Lightyear. About Cascade Bancorp Bend, Ore.-based Cascade Bancorp (Nasdaq: CACB) through its wholly-owned subsidiary, Bank of the Cascades, offers full-service community banking through 32 branches in Central Oregon, Southern Oregon, Portland/Salem Oregon and Boise/Treasure Valley Idaho. Cascade Bancorp has no significant assets or operations other than the Bank. The Company's balance sheet at Sept. 30, 2010, showed $1.83 billion in total assets, $1.82 billion in total liabilities, and stockholders' equity of $8.85 million. Weiss Ratings has assigned its E- rating to Bend, Ore.-based Bank of The Cascades. The rating company says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests it uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." As of March 31, 2010, the bank's balance sheet showed $2.088 billion in assets. CASCADE BANCORP: Lightyear Entities Hold 24.38% Equity Stake ------------------------------------------------------------ In a Schedule 13D filing with the U.S. Securities and Exchange Commission on February 4, 2011, Lightyear Fund II, L.P., disclosed that it beneficially owns 11,438,500 shares of common stock of Cascade Bancorp representing 24.31% of the shares outstanding. Other affiliates of Lightyear Fund also disclosed beneficial ownership of shares of the Company: Shares Equity Beneficially Owned Stake ------------------ ------ Lightyear Co-Invest Partnership II, L.P. 30,250 0.06% Lightyear Fund II GP, L.P. 11,438,500 24.31% Lightyear Fund II GP Holdings, LLC 11,468,750 24.38% Marron & Associates, LLC 11,468,750 24.38% Chestnut Venture Holdings, LLC 11,468,750 24.38% Donald B. Marron 11,468,750 24.38% The percentages are based on 47,047,420 shares of Common Stock of the Company outstanding as of January 28, 2011, as provided by the Company. Lightyear Fund II GP Holdings, LLC, also disclosed that it indirectly beneficially owns an aggregate of 11,468,750 shares of common stock of Cascade Bancorp. in a Form 3 filing. In connection with the closing of the transaction contemplated by the Amended and Restated Securities Purchase Agreement, dated as of November 16, 2010, as amended by the First Amendment, dated as of December 30, 2010, between the Company and BOTC Holdings LLC, a Delaware limited liability company, which amends and restates in its entirety the Securities Purchase Agreement between the same parties dated as of October 29, 2009, as amended, and the Assignment Agreement, dated as of January 28, 2011, among Holdings, Lightyear Fund II and Co-Invest, pursuant to which Holdings assigned its rights and obligations under the Purchase Agreement to Lightyear Fund II and Co-Invest, on January 28, 2011, Lightyear Fund II was issued 11,438,500 shares of Common Stock and Co-Invest was issued 30,250 shares of Common Stock for an aggregate purchase price of $45,875,000. The funds required for the payment of the purchase price were obtained from a capital call to limited partners of Lightyear Fund II and Co-Invest in respect of previously made commitments by their respective limited partners to provide such funds. On January 28, 2011, Lightyear Fund II purchased 11,438,500 shares of Common Stock and Co-Invest purchased 30,250 shares of Common Stock pursuant to the Purchase Agreement. Subject to certain customary conditions, the Company has granted Lightyear Fund II and Co-Invest preemptive rights on any subsequent offering of the Company's securities at the same price as such securities are proposed to be offered to others. Lightyear Fund II and Co-Invest will have those rights until such time as they or their affiliates cease to own 5% or more of the outstanding shares of Common Stock. Under the Purchase Agreement, the Company has agreed to cause its Board of Directors and the Bank of the Cascades and its Board of Directors to appoint one designee of Lightyear Fund II and Co- Invest, collectively, to each of the Board and the Bank Board. For so long as Lightyear Fund II and Co-Invest, together with their affiliates, own at least 5% or more of all of the outstanding shares of Common Stock, at any election of directors of the Company or the Company Bank, Lightyear Fund II and Co- Invest, collectively, will have the right to nominate one candidate for election to each of the Board and the Bank Board and the Company has agreed to cause such nominee to be recommended by each of the Board and the Bank Board to be elected a Director. Chris Casciato has been appointed to the Board and the Bank Board. Mr. Casciato will assign his rights to all director compensation to Lightyear Capital II, LLC, an affiliate of the Reporting Persons. Subject to any applicable exchange listing standards and independence requirements, Lightyear Fund II and Co-Invest, collectively, will be entitled to elect that its designee on the Board and the Bank Board serve on up to two committees of each of the Board and the Bank Board; this will not restrict the designee from serving on any other committee to which such designee is appointed by the Board or the Bank Board. In addition, for so long as Lightyear Fund II and Co-Invest, together with their affiliates, own at least 5% or more of all of the outstanding shares of Common Stock, Lightyear Fund II and Co-Invest, collectively, will have the right to designate a nonvoting board observer to attend meetings of the Board and the Bank Board. Pursuant to the Purchase Agreement, following the next annual meeting of the shareholders of the Company, the number of directors on the Board will be ten. Pursuant to the Purchase Agreement, the Company has also agreed to take all necessary action to eliminate or minimize the effect of any anti-takeover laws, including anti-takeover provisions of the Company's Articles of Incorporation. In addition, so long as Lightyear Fund II, Co-Invest and their affiliates own at least 5% of the outstanding shares of Common Stock, the Company has agreed not to enter into any poison pill agreement, stockholders' rights plan or similar agreement, unless such agreement contains an exemption for Lightyear Fund II, Co-Invest and their affiliates. As a result of the issuance of the shares of Common Stock to Lightyear Fund II and Co-Invest in exchange for the purchase consideration, Lightyear Fund II and Lightyear Fund II GP may be deemed to be the beneficial owners of 11,438,500 shares of Common Stock, Co-Invest may be deemed to be the beneficial owner of 30,250 shares of Common Stock, and Lightyear Fund II GP Holdings, Marron & Associates, Chestnut Venture Holdings and Mr. Marron may be deemed to be the beneficial owner of 11,468,750 shares of Common Stock. About Cascade Bancorp Bend, Ore.-based Cascade Bancorp (Nasdaq: CACB) through its wholly-owned subsidiary, Bank of the Cascades, offers full-service community banking through 32 branches in Central Oregon, Southern Oregon, Portland/Salem Oregon and Boise/Treasure Valley Idaho. Cascade Bancorp has no significant assets or operations other than the Bank. The Company's balance sheet at Sept. 30, 2010, showed $1.83 billion in total assets, $1.82 billion in total liabilities, and stockholders' equity of $8.85 million. Weiss Ratings has assigned its E- rating to Bend, Ore.-based Bank of The Cascades. The rating company says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests it uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." As of March 31, 2010, the institution's balance sheet showed $2.088 billion in assets. CASCADIA PARTNERS: U.S. Trustee Unable to Form Committee -------------------------------------------------------- W. Clarkson McDow, Jr., United States Trustee for Region 4, told the U.S. Bankruptcy Court for the Western District of Virginia that he has not appointed creditors to serve on an Official Committee of Unsecured Creditors for Cascadia Partners LLC because the number of persons eligible and willing to serve on the committee is presently insufficient. Charlottesville, Virginia-based Cascadia Partners LLC owns and develops certain real property in Albermarle County, Virginia. It filed for Chapter 11 bankruptcy protection on December 1, 2010 (Bankr. W.D. Va. Case No. 10-63442). W. Stephen Scott, Esq., at Scott Kroner, PLC, serves as bankruptcy counsel. The Debtor disclosed $12,074,100 in total assets, and $4,292,894 in total liabilities in its schedules. CATHOLIC CHURCH: Milwaukee Files Schedules of Assets & Debts ------------------------------------------------------------ A - Real Property All Souls Cemetery $4,450,000 Snyder Property-LeDuc Property 790,000 Plunket Property 675,000 Others 1,749,000 B - Personal Property B.1 Cash on Hand 1,050 B.2 Bank Accounts Rights to Units, JPMorgan Chase 13,533,405 Cemetery pre-need 3,000,410 Johnson Bank 1,804,989 Others 1,359,035 B.3 Security Deposits - B.4 Household goods 4,665 B.5 Book, artwork and collectibles UNKNOWN B.6 Wearing apparel UNKNOWN B.7 Furs and jewelry UNKNOWN B.8 Firearms and other equipment - B.9 Insurance Policies Northwestern Mutual Life Insurance Co. 121,998 Catholic Knights Insurance Society 100,727 Others 92,744 B.10 Annuities - B.11 Interests in an education IRA - B.12 Interests in pension plans 401(k) Plan - B.13 Stock and Interests - B.14 Interests in partnerships/joint ventures - B.15 Government and corporate bonds UNKNOWN B.16 Accounts Receivable Net Accounts Receivables 6,303,132 B.17 Alimony - B.18 Other Liquidated Debts Owing Debtor - B.19 Equitable or future interests UNKNOWN B.20 Interests in estate death benefit plan - B.21 Other Contingent and Unliquidated Claims - B.22 Patents, copyrights, and others - B.23 Licenses, franchises & other intangibles - B.24 Customer lists or other compilations - B.25 Vehicles 2010 Chev Tahoe 39,000 2009 GMC Sierra Truck 28,400 2009 GMC Sierra 1ton dump 25,225 2008 GMC 1ton dump/plow 21,225 2010 GMC Savana Cargo van 18,625 2007 GMC Sierra truck/plow 15,850 2006 GMC 1ton dump truck 15,375 2003 GMC 1ton dump/plow 13,100 2005 GMC Sierra 1ton dump/plow 12,750 Others 79,175 B.26 Boats, motors and accessories - B.27 Aircraft and accessories - B.28 Office Equipment, furnishings & supplies 151,424 B.29 Equipment and Supplies for Business 60,083 B.30 Inventory 344,385 B.31 Animals - B.32 Crops - B.33 Farming equipment and implements - B.34 Farm supplies, chemicals, and feed - B.35 Other Personal Property St. Aemilian Trust 4,462,458 Mary B. Finnigan Endowment Fund 1,171,263 Rapp Trust Fund 299,899 TOTAL SCHEDULED ASSETS $40,744,398 ========================================================== C - Property Claimed None D - Creditors Holding Secured Claims Mortgages and Assignment of Rents & Leases $4,650,000 E - Creditors Holding Unsecured Priority Claims 5503 W Bluemound Rd., fire inspection fee 3,837 4th Quarter 2010 Sales Tax 1,687 St. Leo School, fire inspection fee 65 Others UNKNOWN F - Creditors Holding Unsecured Nonpriority Claims Milwaukee Priests' Retiree Health Plan 13,693,375 M.H.S., Inc. 3,378,536 Milwaukee Union Employees' Pension Plan 1,169,580 In-settlement Victims/Survivors, payments 702,000 Others 470,020 Milwaukee Priests' Pension Plan UNKNOWN Personal Injury Plaintiffs UNKNOWN Milwaukee Lay Employees' Pension Plan UNKNOWN In-settlement Victims/Survivors, therapy UNKNOWN TOTAL SCHEDULED LIABILITIES $24,069,102 ========================================================== 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: Milwaukee Files Statement of Financial Affairs --------------------------------------------------------------- John J. Marek, treasurer and chief financial officer of the Archdiocese of Milwaukee, discloses that the Archdiocese earned income from operations, including operating revenue and support plus gains from sales of assets and realized and unrealized gains on investments, during the two years immediately preceding the Petition Date: Date Total Amount ---- ------------ Fiscal Year 2009 $26,708,276 Fiscal Year 2010 25,874,554 Fiscal Year 2011 13,164,403 year to date Within the 90 days immediately preceding the Petition Date, the Archdiocese paid certain vendors and professionals totaling $3,853,724, Mr. Marek says. Among the largest creditors, whom the Archdiocese paid within 90 days before the Petition Date, are: Creditor Date Paid Amount -------- --------- ------ Whyte Hirschboeck S.C. Various $880,939 United Healthcare Various 393,268 Quarles & Brady LLP Various 301,878 Great Lakes Roofing Various 248,230 Catholic Mutual Group 11/30/10 235,560 Knoernschild Trust Ltd. Various 124,500 WE Energies Various 122,474 The Archdiocese also paid certain creditors, who are insiders, within a year prior to the Petition Date: Amount Amount Creditor Paid Still Owing -------- ------ ----------- Most Rev. Richard J. Sklba $22,838 $4,105 Most Rev. Jerome E. Listecki 10,335 1,425 Most Rev. William P. Callahan 10,015 - John J. Marek 2,586 - Barbara Anne Cusack 682 400 Mr. Marek discloses that the Archdiocese is a party to 12 personal injury lawsuits before the Milwaukee County Circuit Court within a year before the commencement of its bankruptcy case. The personal injury lawsuits are currently pending and stayed at trial court during appeal. A copy of the list of the personal injury lawsuits is available for free at: http://bankrupt.com/misc/Church_M_Personal_Injury_Cases.pdf The Archdiocese is also a party four other lawsuits before the Circuit Court: Nature of Case Caption Proceeding Status ------------ ---------- ------ First Rate Financial Garnishment Closed vs. Luis M. Almestica 2010SC022419 Equable Ascent Financial LLC Garnishment Closed vs. Michele NcNulty 2010SC018342 Gail Ream et al. vs. Insurance claim Closed Archdiocese of Milwaukee et al. for slip & fall 2010CV018919 Archdiocese of Milwaukee Auto accident Pending, vs. Charity L. McCulloch subrogation awaiting 2010CV008909 claim removal from case The Archdiocese made gifts or charitable contributions aggregating $2,828,914 to certain parishes and missions within one year immediately preceding the Petition Date. The largest of those gifts were given to St. Francis de Sales Seminary, Inc., in various dates, and each gift amounting to $112,500. Mr. Marek relates that during the past 12 months, the Archdiocese paid in the ordinary course of business Whyte Hirschboeck Dudek S.C. for $228,191 for services relating to debt counseling and bankruptcy preparation. The Archdiocese also transferred a house priced at $109,335 to Marc & Laurie Wannenmacher, and another house priced at $175,350 to Gary Sierzchulski & Doreen Schofield. Mr. Marek further reveals that the Archdiocese holds or controls these properties for another person or entity: Name of Owner Description Value ------------- ----------- ----- Fixed Income Investment Funds held for the $10,532,479 Account at JPMorgan benefit of others, Chase Bank, N.A. including the Black & Indian Mission grant and the Biehoff Scholarship Fixed Income Investment Funds held for the 5,724,416 Account at JPMorgan benefit of others, Chase Bank, N.A. including the Black & Indian Mission grant and the Biehoff Scholarship Combined Collections Two annual collections 853,044 Account at JPMorgan held to support 10 Chase Bank, N.A. beneficiaries, including Catholic Home Mission, and Catholic University of America. Archdiocese of A tax-qualified retirement 365,947 Milwaukee Lay Employees plan, which funds belong Pension Plan solely to the participating employees. Fixed Income Investment Funds held for the 202,539 Account at JPMorgan benefit of others, Chase Bank, N.A. including the Black & Indian Mission grant and the Biehoff Scholarship 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: Milwaukee Financials Incomplete, Creditors Say --------------------------------------------------------------- Jeff Anderson, Esq., at Jeff Anderson & Associates, in St. Paul, Minnesota, a lawyer representing certain creditors in the bankruptcy case of the Archdiocese of Milwaukee, alleges that the Archdiocese's recently filed schedule of assets and liabilities and statement of financial affairs are incomplete, the Journal Sentinel reports. Mr. Anderson, however, declined to elaborate, Annysa Johnson of the Journal Sentinel says. The report adds that he likened the Archdiocese to the Diocese of San Diego, which was criticized in 2007 by its bankruptcy judge, for alleged misrepresentation of its assets. Jerry Topczewski, chief of staff for Archbishop Jerome E. Listecki, however, denied the allegations, the report says. "Our finances are no secret," Mr. Topczewski is quoted by Journal Sentinel as saying. "We don't have vast resources, and what we do have is restricted to ministry," he added. 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) CB HOLDING: Plan Filing Exclusivity Extended Until June 15 ---------------------------------------------------------- Carla Main at Bloomberg News reports that CB Holding Corp. received an order from Bankruptcy Judge Mary Walrath Feb. 8 extending the exclusive periods for it to file and secure support for a Chapter 11 plan. The exclusive time for the Debtor to file a plan of reorganization has been extended to June 15. The Debtor has until August 12 to solicit support for the plan. The order is without prejudice for a request by the Debtor for another extension. About CB Holding New York-based CB Holding Corp. had 20 Charlie Brown's Steakhouse, 12 Bugaboo Creek Steak House, and seven The Office Beer Bar and Grill restaurants when it filed for bankruptcy protection. The Company closed 47 locations before filing for Chapter 11. Following a bankruptcy auction, CB Holding sold its The Office restaurant chain to winning bidder Villa Enterprises Ltd. for $4.68 million. Landry's Restaurants has signed a deal to the 12 Bugaboo Creek stores for $3 million, plus upward adjustments for cash and inventory in the stores at closing, absent higher and better offers at a March 7 auction. CB Holding and its affiliates filed for Chapter 11 bankruptcy protection on November 17, 2010 (Bankr. D. Del. Case No. 10-13683). Christopher M. Samis, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., assist the Debtors in their restructuring effort. The Garden City Group, Inc., is the Debtors' notice, claims and solicitation agent. Jeffrey N. Pomerantz, Esq., Jason S. Pomerantz, Esq., and Bradford J. Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Official Committee of Unsecured Creditors. CB Holding estimated its assets at $100 million to $500 million and debts at $50 million to $100 million. CHABAD HOUSE: Files for Bankruptcy to Halt Foreclosure Suit ----------------------------------------------------------- Alexandra Clough, staff writer at the Palm Beach Post, reports that Chabad House Lubavitch of Palm Beach Inc. sought Chapter 11 protection due to litigation related to its outstanding bank debts. Chabad House, an orthodox Jewish congregation in North Palm Beach, Florida, said it has been unable to make loan payments because contributions from patrons dropped off during the recession. According to the report, among the debts owed is $538,577 outstanding on a loan to TD Bank, the U.S. arm of Toronto-Dominion Bank. The loan was originally made by Riverside National Bank of Fort Pierce, which was closed by federal bank regulators last April. Riverside's assets were taken over by TD Bank. Also listed is an outstanding loan balance of $165,000 to Floridian Community Bank of Fort Lauderdale. The Palm Beach Post reports that Chabad housed decided to file Chapter 11 on because an important hearing on its litigation with TD Bank was set. The rabbi said the Chapter 11 filing is not a long-term solution but a temporary halt to the foreclosure lawsuit, which threatens the Chabad's property. As reported in yesterday's Troubled Company Reporter, Chabad House Lubavitch of Palm Beach, Inc., filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 11-13229) in West Palm Beach, Florida on Feb. 7, 2011. Debtor's Counsel: Robert C. Furr, Esq., at Furr & Cohen, in Boca Raton, represents the Debtor. The Debtor estimated assets and debts of $1 million to $10 million as of the Petition Date. CLEAR CHANNEL: Fitch Assigns 'CCC/RR4' Rating to $750 Mil. Notes ---------------------------------------------------------------- Fitch Ratings has assigned a 'CCC/RR4' rating to Clear Channel Communications' $750 million senior secured notes offering maturing 2021. Fitch has also affirmed the ratings of Clear Channel and Clear Channel Worldwide Holdings, Inc.: Clear Channel -- Long-term Issuer Default Rating at 'CCC'; -- Senior secured term loans and senior secured revolving credit facility at 'CCC/RR4'; -- Senior unsecured leveraged buyout notes at 'C/RR6'; -- Senior unsecured legacy notes at 'C/RR6'. CCWW -- Long-Term IDR at 'B'; -- Senior unsecured notes at 'BB-/RR2'. The Rating Outlook is Stable. Fitch expects the proceeds of the issuance will be used to fund the repayment of $500 million outstanding under the company's secured credit facilities (currently $14.1 billion outstanding), as well as to repay $250 million of the 6.25% unsecured notes maturing March 15, 2011 (currently $693 million outstanding). Fitch expects Clear Channel will repay the remaining $443 million notes with cash on hand. The notes will be secured by the capital stock of Clear Channel, Clear Channel's non-broadcasting assets ('non principal property'), and a second priority lien on the broadcasting receivables that securitize the ABL facility. The 'principal property' assets of Clear Channel (domestic radio broadcasting property, including any proceeds from the sale of FCC licenses), which constitute the majority of the company's asset base, along with the company's capital stock in wholly owned domestic subsidiaries and intercompany loans, are not presently part of the security package. Therefore, in Fitch's view the collateral package is not currently overly valuable. It appears that, unlike the banks, these notes may not benefit from the grant of security interest in the principal property up to the value of 15% of consolidated shareholders' equity. Although consolidated shareholders' equity is currently negative, it appears that this bank carve-out could place the banks slightly ahead of these notes in a recovery situation. Similar to the existing bank debt, the new notes will be guaranteed on a senior basis by Clear Channel Capital I, Inc. (holding company of Clear Channel), and by Clear Channel's wholly owned domestic subsidiaries. Although the notes collateral package is currently weak, the contractually senior nature of the guarantee puts them ahead of the existing LBO notes. The ratings on the notes reflect Fitch's expectations that the recovery rate on the notes would be slightly less than that of the banks, but still within the 'RR4' category. Concurrent with the new issue announcement, Clear Channel announced that it intends to amend its secured credit facilities to allow for 1) extended maturities; 2) increased flexibility around the accordion feature; 3) new debt incurrence for repayment of bank debt; and 4) increased flexibility for debt incurrence at its 89% owned subsidiary Clear Channel Outdoor and its subsidiaries. The company disclosed that it had already received the consent of a majority of lenders. Fitch views this issuance and amendment as a positive for Clear Channel. The amendment demonstrates at least initial willingness by existing lenders to work with the company. Additionally, assuming the issuance is completed, the ability to access the capital markets for 10-year debt indicates there are lenders who believe the company will be able to address its significant 2014 and 2016 maturities (presently $3.7 billion and $12.5 billion, respectively, with the majority of it bank loans). As a result, there could potentially be a broader range of alternatives available to Clear Channel deal with these maturity walls. This being said, these announcements have no impact on the company's current ratings, given the small size of the issuance and repayment relative to the absolute dollar amount of bank debt coming due over the next five years. In Fitch's view, a materially larger portion of these maturity walls would need to be addressed before positive ratings actions are considered. Fitch believes the key to Clear Channel's success in managing these maturities is the amount of flexibility provided by the bank lenders. This will depend on Clear Channel's ability to reduce secured leverage to a level where the banks would be willing to recommit capital. Fitch believes that this level is likely below 6 times, as this is where the banks originally lent during the credit boom, as well as the challenges associated with the final funding/closing of the deal. Fitch's rating concerns center on the company's highly leveraged capital structure, with significant maturities in 2014 and 2016; the considerable interest burden that pressures free cash flow generation; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. Fitch believes that Clear Channel's current liquidity position will enable it to repay the $1.7 billion of debt maturing through 2013, through a combination of accessible cash on hand, this issuance, and dividends from CCOH. Clear Channel had approximately $1.3 billion of cash at Dec. 31, 2010, excluding $624 million at CCOH, which cannot be accessed by Clear Channel. Of this $1.3 billion, $384 million is owed to CCOH under the revolving promissory note governing the daily cash management that Clear Channel provides to CCOH. These funds are accessible to Clear Channel but are due on demand to CCOH. CCOH can currently dividend $500 million of cash to its shareholders under the CCWW indenture. Further, under the provision that CCWW can issue subordinated debt and dividend the proceeds to CCOH shareholders if total leverage remains below 6.0x, Fitch estimates that Clear Channel could currently receive approximately $1.7 billion. Fitch assumes that Clear Channel's secured lenders and LBO note holders would be willing to amend their loan provision to allow such debt issuance, particularly in light of this announcement. Other sources of liquidity are minimal; most free cash flow is at CCOH, given Clear Channel's significant interest burden, and the RCF and ABL facilities are fully drawn. As mentioned, Clear Channel faces significantly larger challenges in addressing its capital structure beginning in 2014. Given the absolute dollar amount as well as Clear Channel's weak credit profile, Fitch believes it could prove difficult for the company to successfully meet these maturities. The company's options include: 1) cash repayment, though it will be minimal in light of Fitch's expectations for cumulative free cash flow of no more than $500 million through 2013, most of it at the CCOH level; 2) refinancing in the high yield market, as witnessed by this announcement; 3) amend and extend transaction, although increased interest expense would eat further into the already limited free cash flow; 4) more debt-funded dividends from CCOH; 5) sales of non-core radio stations in smaller markets; 6) extend/reduce the $1.5 billion of legacy notes that mature after 2013 via a coercive debt exchange (CDE), although Fitch views this as less likely as it does not help the company get past the bank maturities. In Fitch's view, there is a scenario where the company employs several, if not all, of these alternatives, which enable it to successfully address its 2014 and 2016 maturities. However, this scenario involves some fairly aggressive assumptions and several events going in the company's favor, particularly with regards to the 2016 wall. If the scenario does not play out as such, Fitch believes a default is a real possibility. Consolidated debt at Dec. 31, 2010 was $21.2 billion. Debt held at Clear Channel was $18.7 billion and consisted primarily of: -- $1.1 billion secured term loan A, maturing July 2014; -- $9.1 billion secured term loan B, maturing January 2016; -- $696 million secured term loan C (asset sale facility) maturing January 2016; -- $1 billion secured delayed draw term loan, maturing January 2016; -- $1.8 billion outstanding under the $2 billion secured RCF, maturing July 2014; -- Approximately $384 million outstanding under the secured ABL facility, maturing July 2014; -- $796 million senior unsecured cash pay notes, maturing August 2016; -- $830 million senior unsecured PIK toggle notes, maturing August 2016; -- $693 million senior unsecured legacy notes maturing March 13, 2011; -- $140 million senior unsecured legacy notes maturing May 15, 2011; and -- $2.1 billion senior unsecured legacy notes, with maturities of 2012-2027. There was approximately $2.6 billion of debt at CCOH's subsidiary Clear Channel Worldwide Holdings Inc. at Dec. 31, consisting primarily of: -- $500 million series A senior unsecured notes, maturing December 2018; and -- $2 billion series B senior unsecured notes, maturing December 2018. The notes are guaranteed by CCOH, Clear Channel Outdoor, Inc., a wholly owned subsidiary of CCOH, and the majority of the domestic operating subsidiaries of CCOH. Clear Channel's Recovery Ratings reflect Fitch's expectation that the enterprise value of the company, and hence, recovery rates for its creditors, will be maximized in a restructuring scenario (going concern), rather than a liquidation. Fitch employs a 6x distressed enterprise value multiple reflecting the value of the company's radio broadcasting licenses in top U.S. markets. Fitch applies a 30% discount (approximately the level at which the company would breach its consolidated senior leverage covenant) to 2010 Radio EBITDA. Additionally, Fitch assumes that Clear Channel would receive 89% of the value of a sale of CCOH after the CCOH creditors had been repaid. Fitch estimates the adjusted distressed enterprise valuation in restructuring to be approximately $5.8 billion. Fitch also assumes that in a bankruptcy scenario that Clear Channel has maximized the debt- funded dividends from CCOH and used the proceeds to repay bank debt. For analytical purposes, Fitch assumes that that the banks would be first in line for approximately $1.3 billion of value (15% of shareholders' equity at Dec. 31, 2007, before the LBO closed), with the remaining value distributed pro rata between the secured banks and secured noteholders. The 'CCC' rating for the bank debt reflects Fitch's expectations for recovery near the higher end of the 31% to 50% range under a bankruptcy scenario. The secured noteholders receive a recovery that is lower than the bank lenders, but still within the 31%-50%, warranting a 'CCC'. The 'C' rating on the senior unsecured legacy and LBO notes reflects Fitch's expectations for minimal recovery prospects due to their position below the banks in the capital structure. The recovery analysis is pro forma for the issuance of secured debt and repayment of bank debt and legacy notes as discussed. CLEARWIRE CORP: Abandons Retail Strategy to Focus on Wholesale -------------------------------------------------------------- Shayndi Raice and Joann S. Lublin, writing for The Wall Street Journal, report that Clearwire Corp. has abandoned its retail strategy to focus on being a wholesale network provider of fast wireless service, said people familiar with the matter, opening the door for additional investment in the struggling company by Sprint Nextel Corp. The Journal says the shift represents a victory for Sprint Nextel, the No. 3 U.S. wireless carrier by subscribers, which owns a non- controlling majority stake in the 4G wireless-service provider and relies on its fourth-generation network to service its customers. The Journal recounts Sprint has long argued that Clearwire should spend its limited capital on finishing the expansion of its network, but Clearwire has insisted on maintaining an independent retail strategy, competing with Sprint. According to the Journal, that strategy has been increasingly difficult to maintain as Clearwire has struggled to raise additional funds to finance the completion of its 4G wireless network. According to the Journal, one person familiar with its thinking, said Clearwire's goal now is to turn company cash flow positive as quickly as possible. The person added it could take 12 to 18 months to achieve that goal. The Journal also relates people familiar with the matter said the strategic shift could lay the groundwork for an infusion of cash from Sprint into Clearwire down the line, although there are currently no plans for one. Clearwire needs billions of dollars to finish building its nationwide wireless network. Another person familiar with the situation, according to the Journal, observed that Clearwire's change of course "gives Sprint a lot more choices to make in the future" about additional Clearwire investments. And the move is good for Clearwire "because they now have a better chance for survival." The Journal notes that to raise more money in the near term, Clearwire executives have said that the company is talking to a number of potential investors and considering the sale of roughly 20%, or $2 billion worth, of its wireless spectrum. About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a leading provider of wireless broadband services. Clearwire's 4G mobile broadband network serves 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company's balance sheet at September 30, 2010, showed $10.52 billion in total assets, $3.90 billion in total liabilities, and stockholders' equity of $6.62 billion. The Company disclosed in its Form 10-Q for the third quarter ended September 30, 2010, that its expected continued losses from operations and the uncertainty about its ability to obtain sufficient additional capital raise substantial doubt about the Company's ability to continue as a going concern. "Without additional financing sources, we forecast that our cash and short-term investments would be depleted as early as the middle of 2011. Thus, we will be required to raise additional capital in the near-term in order to continue operations. COMFORCE CORP: RBF Capital Disposed of All of 9.5% Stake -------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 4, 2011, each of RBF Capital, LLC, and Richard B. Fullerton disclosed non-ownership of shares of common stock of Comforce Corporation. At the end of 2009, RBF Capital disclosed that it held 1,653,173 shares or roughly 9.51% of the common stock of COMFORCE Corporation. About COMFORCE Based in Woodbury, New York, COMFORCE Corporation (NYSE Amex: CFS) provides outsourced staffing management services that enable Fortune 1000 companies and other large employers to consolidate, automate and manage staffing, compliance and oversight processes for their contingent workforces. The Company also provides specialty staffing, consulting and other outsourcing services to Fortune 1000 companies and other large employers for their healthcare support services, technical and engineering, information technology, telecommunications and other staffing needs. In addition, the Company provides funding and back office support services to independent consulting and staffing companies. On November 1, 2010, COMFORCE Corporation entered into an agreement and plan of merger with CFS Parent Corp., an affiliate of ABRY Partners, LLC and CFS Merger Sub Corp., a direct wholly- owned subsidiary of Parent, pursuant to which Merger Sub will merge with and into the Company, with the Company being the surviving corporation. COMFORCE has said it is in talks with plaintiffs to settle a class action lawsuit alleging breach of fiduciary duties due to the planned merger. The Company's balance sheet at Sept. 26, 2010, showed $181.01 million in total assets, $191.54 million in total liabilities, and a stockholders' deficit of $10.52 million. CORNERSTONE BANCSHARES: Gary Petty Owns 611 Common Shares --------------------------------------------------------- In a Form 3 filing with the U.S. Securities and Exchange Commission on February 4, 2011, Gary Wayne Petty, Jr., chief financial officer at Cornerstone Bancshares Inc., disclosed that he directly beneficially owns an aggregate of 611 shares of common stock of the Company. Mr. Petty has the right to buy an aggregate of 14,700 shares of the Company. About Cornerstone Bancshares Chattanooga, Tenn.-based Cornerstone Bancshares, Inc. is a bank holding company. Its wholly-owned subsidiary, Cornerstone Community Bank, is a Tennessee-chartered commercial bank with five full-service banking offices located in Hamilton County, Tennessee. The Company's balance sheet as of June 30, 2010, showed $523.4 million in total assets, $494.0 million in total liabilities, and stockholders' equity of $29.4 million. As reported in the Troubled Company Reporter on April 6, 2010, Hazlett, Lewis & Bieter, PLLC, in Chattanooga, Tenn., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2009. The independent auditors noted that the Company was not in compliance with certain of its debt covenants at December 31, 2009. In addition, as of December 31, 2009, Cornerstone Community Bank was restricted from paying dividends to the Company due to the Bank's recent operating losses and the Bank's reduced capital levels. Consent Order The Company disclosed in 10-Q for the quarter ended June 30, 2010, that following the issuance of a written report by the Federal Deposit Insurance Corporation and the Tennessee Department of Financial Institutions concerning their joint examination of Cornerstone Community Bank in October 2009, the Bank entered a consent order with the FDIC on April 2, 2010, and a written agreement with the TDFI on April 8, 2010, each concerning areas of the Bank's operations identified in the report as warranting improvement and presenting substantially similar plans for making those improvements. The consent order and written agreement, which the Company collectively refers to as the "Action Plans", convey specific actions needed to address certain findings from the joint examination and to address the Company's current financial condition. The Action Plans contain a list of strict requirements ranging from a capital directive, which requires the Company to achieve and maintain minimum regulatory capital levels in excess of the statutory minimums to be well-capitalized, to developing a liquidity risk management and contingency funding plan, in connection with which the Company will be subject to limitations on the maximum interest rates it can pay on deposit accounts. The Action Plans also contain restrictions on future extensions of credit and requires the development of various programs and procedures to improve the Company's asset quality as well as routine reporting on its progress toward compliance with the Action Plans to the Board of Directors, the FDIC and the TDFI. As of April 2, 2010, the date of the Action Plans, the Bank was deemed to be "adequately capitalized." CRAIG LUTZ: Files for Chapter 13 Bankruptcy Protection ------------------------------------------------------ Kristen MacBeth at BankruptcyHome.com reports that Craig Lutz, Hall County, Florida's commissioner, and his wife filed for Chapter 13 bankruptcy as a means to develop a plan to repay their past debts over a period of time. In the filing, Mr. Lutz disclosed more than $630,000 in assets and around $615,000 in liabilities. BankruptcyHome discloses that the filing came a few months after Mr. Lutz left his job at AT&T to take his elected position. "My income has dropped substantially and we did file for some protection from that to see if we could go through some debt reorganization," the report quotes Mr. Lutz as stating. Craig Lutz, BankruptcyHome notes, is the second Florida commissioner to face financial troubles in recent months. Last year, Commissioner Scott Gibbs cited the economic effects in his construction company's Chapter 11 bankruptcy. CREDIT-BASED ASSET: Files Plan; Would Repay Unclassified Claims --------------------------------------------------------------- Bankruptcy Law360 reports that Credit-Based Asset Servicing and Securitization LLC has filed a Chapter 11 reorganization plan that calls for payment in full of all unclassified claims and the substantive consolidation of seven of the Debtors' eight estates. About Credit-Based Asset Servicing Credit-Based Asset Servicing and Securitization LLC is a subprime mortgage investor based in New York City. C-Bass is a joint venture, owned in part by units of mortgage insurers MGIC Investment Corp. and Radian Group Inc. C-Bass and seven affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-16040) on Nov. 12, 2010. C-Bass disclosed $23.7 million in assets and $2.16 billion in liabilities in its Schedules of Assets and Liabilities. The Debtors' liabilities include $195.8 million of secured debt. Peter S. Partee, Esq., Richard P. Norton, Esq., Robert A. Rich, Esq., and Scott Howard Bernstein, Esq., at Hunton & Williams LLP, represent the Debtors. Donlin, Recano & Company is the claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in C-BASS' chapter 11 cases and that committee is represented by Mark T. Power, Esq., and Jeffrey Zawadzki, Esq., at Hahn & Hessen LLP in New York. The affiliates that filed separate Chapter 11 petitions are C-BASS CBO Holding LLC, C-BASS Credit Corp., C-BASS Investment Management LLC, NIM I LLC, Pledged Property II LLC, Starfish Management Group LLC, and Sunfish Management Group LLC. CRYSTAL CATHEDRAL: CFO Southard Resigns to Cut Estate Expenses -------------------------------------------------------------- Elena Garcia at The Christian Post reports that Crystal Cathedral's chief financial officer Fred Southard has resigned ahead of a bankruptcy court hearing about church employees' salaries, including his $132,000 housing allowance. The Christian Post relates that Mr. Southard resigned voluntarily to save the church money. "There is a real need for the church to cut its expenses. Staff is one of the places where they can cut, and that's where I came in," Mr. Southard was quoted a stating. Crystal Cathedral Ministries is a Southern California-based megachurch founded by television evangelist Robert Schuller. The church, known for its television show "The Hour of Power." Crystal Cathedral filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. 10-24771) on October 18, 2010. March J. Winthrop, Esq., at Winthrop Couchot Professional Corporation, in Newport Beach, California, represents the Debtor. The Debtor disclosed $72,872,165 in assets and $48,460,826 in liabilities as of the Chapter 11 filing. DBSD N.A.: Third Party Interested in Assets, Says Committee ----------------------------------------------------------- Tiffany Kary at Bloomberg News reported Feb. 7 that the judge overseeing DBSD North America Inc.'s Chapter 11 case said that DBSD has an obligation to its creditors to consider any offers that are better than one from Dish Network Corp. The judge said at the Feb. 7 hearing that DBSD has duty to use "aggressive efforts" to locate a buyer offering to pay more than first-lien creditor Dish Network. Steven J. Reisman, a lawyer for DBSD's creditors committee, said a third party was interested, without disclosing who the potential bidder is. As reported in the Troubled Company Reporter, DBSD filed on Feb. 1 a motion for approval of a sale agreement for DISH Network to acquire 100% of the equity of the reorganized DBSD N.A. for roughly $1 billion subject to certain adjustments, including interest accruing on DBSD North America's existing debt, pursuant to an "Alternate Plan." Under the agreement, subject to and contingent on both an unconditional Federal Communications Commission approval and anti-trust clearance, the Debtors' assets will be sold to DISH and the proceeds of such sale distributed to Senior Noteholders and General Unsecured Creditors. The Debtor also sought approval of a debtor-in-possession credit facility from DISH, which will consist of a non-revolving, multiple draw term loan in the aggregate principal amount of $87.5 million. Sprint Nextel Corporation and senior secured noteholders are opposing the sale to DISH. They say that the plan to sell to DISH "significantly undervalues the Debtors' assets and would provide a recovery for unsecured creditors that is substantially worse than" the plan previously negotiated by DBSD with noteholders, ICO Global Communications (Holdings) Limited, and Sprint Nextel last month. A hearing on the Debtors' Investment Agreement with DISH is scheduled on February 15, 2011 at 2:00 p.m. About DISH Network DISH Network Corporation -- http://www.dish.com/-- through its subsidiary DISH Network L.L.C., provides more than 14.2 million satellite TV customers, as of September 30, 2010, with the highest quality programming and technology at the best value, including HD Free for Life. Subscribers enjoy industry-leading customer satisfaction, the largest high definition line-up with more than 200 national HD channels, the most international channels, and award-winning HD and DVR technology. The Company's balance sheet at June 30, 2010, showed $9.03 billion in total assets and $10.61 billion in total liabilities, and a stockholders' deficit of $1.58 billion. * * * At the end of January 2011, Fitch Ratings affirmed the 'BB-' Issuer Default Rating assigned to DISH Network and its wholly owned subsidiary DISH DBS Corporation. Fitch has also affirmed the 'BB-' rating assigned to the senior unsecured notes issued by DDBS Corporation. Additionally, Fitch has revised DISH's Rating Outlook to Stable from Negative. As of Sept. 30, 2010, DISH had approximately $6.5 billion of debt outstanding. The Stable Outlook recognizes the operational rebound DISH has experienced during 2010. Overall, Fitch's ratings reflect the operating leverage derived from DISH's size and scale as the third largest multi-channel video programming distributor in the U.S. and Fitch's expectation for continued, albeit pressured free cash flow generation. Dish Network carries a 'Ba3' corporate family rating, with "stable outlook", from Moody's. Moody's said that Dish Network's Ba3 Corporate Family Rating and stable outlook are not affected by the company's announcement that it has entered into an agreement to acquire 100% of the equity of the reorganized DBSD North America, Inc., a hybrid satellite and terrestrial communications company, for approximately $1 billion including interest accruing on DBSD North America's existing debt. About DBSD North America Headquartered in Reston, Virginia, DBSD North America Inc., aka ICO Member Services Inc., offers satellite communications services. It has launched a satellite, but is in the developmental stages of creating a satellite system with components in space and on earth. It presently has no revenues. The Company and nine of its affiliates filed for Chapter 11 protection on May 15, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-13061). James H.M. Sprayregen, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, in New York; and Marc J. Carmel, Esq., and Sienna R. Singer, Esq., at Kirkland & Ellis LLP, in Chicago, serve as the Debtors' counsel. Jefferies & Company is the financial advisors to the Debtors. The Garden City Group Inc. is the claims agent for the Debtors. DBSD estimated assets and debts of $500 million to $1 billion in its Chapter 11 petition. Timothy A. Barnes, Esq., and Steven J. Reisman, Esq., at CURTIS, Mallet-Prevost, Colt & Mosle LLP, in New York, represent the Official Committee of Unsecured Creditors. The ad hoc committee of certain parties that hold or manage holdings of those certain 7.5% Convertible Senior Secured Notes Due 2009 issued by DBSD is represented by Dennis F. Dunne, Esq., Risa M. Rosenberg, Esq., and Jeremy S. Sussman, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York; and Andrew M. Leblanc, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Washington, DC. Sprint Nextel is represented by Eric Moser, Esq., at K&L Gates LLP, in New York; and John H. Culver III, Esq., and Felton E. Parrish, Esq., at K&L Gates LLP, in Charlotte, North Carolina. Dish is represented in the case by J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in New York. DELTA PETROLEUM: CEO Lakey Owns 525,828 Common Shares ----------------------------------------------------- In an amended Form 3 filing with the U.S. Securities and Exchange Commission on February 4, 2011, Carl E. Lakey, CEO and president at Delta Petroleum Corp., disclosed that he beneficially owns 525,828 shares of common stock of the Company. The amendment was filed to correct the number of shares held by Mr. Lakey on July 6, 2010. About Delta Petroleum Delta Petroleum Corporation (NASDAQ Global Market: DPTR) -- http://www.deltapetro.com/-- is an oil and gas exploration and development company based in Denver, Colorado. The Company's core areas of operations are the Rocky Mountain and Gulf Coast Regions, which comprise the majority of its proved reserves, production and long-term growth prospects. The Company's balance sheet at Sept. 30, 2010, showed $1.14 billion in total assets, $242.79 million in total current liabilities, $358.34 million in total long-term liabilities, and stockholders' equity of $545.21 million. * * * As reported in the Troubled Company Reporter on March 15, 2010, KPMG LLP, in Denver, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2009. The independent auditors noted of the Company's ongoing losses and working capital deficiency, and that in addition, outstanding borrowings under the Company's credit facility are due January 15, 2011. In January 2011, Standard & Poor's Ratings Services assigned its 'CCC' corporate credit and unsecured debt ratings to Delta Petroleum Corp. S&P also assigned its '4' recovery rating to the company's $150 million unsecured notes due 2015 and $115 million senior convertible notes. The outlook is negative. "S&P's ratings on Delta reflect the company's uneconomic cost structure, a small reserve base that is almost entirely natural gas, very aggressive leverage, and weak liquidity," said Standard & Poor's credit analyst Marc D. Bromberg. Although it recently closed a $100 million credit facility maturing Jan. 31, 2012 (with a $50 million initial commitment), which allowed Delta to satisfy its previous $35 million revolver that was due this month, S&P think it is unlikely that the company will be able to meet its operating obligations throughout 2011. S&P characterize Delta's business profile as vulnerable and its financial risk profile as highly leveraged. DELUXE ENTERTAINMENT: Moody's Confirms 'B1' Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service confirmed its ratings for Deluxe Entertainment Services Group, Inc., including the B1 Corporate Family Rating and B1 Probability of Default Rating, along with all other rated debt instruments as outlined below. The rating outlook was revised to negative, however. These actions conclude Moody's review for possible downgrade of the company's ratings, as initiated on September 2, 2010 and subsequent to which the company was awarded the Universal Studios film processing contract (announced on October 20, 2010) and acquired the creative services and media services business of Ascent Media (closed on December 31,2010). In Moody's view, the Ascent Media acquisition improves Deluxe's position in the creative services space and diversifies its customer base into the TV and short-form commercial markets. The acquisition also decreases the company's dependence on the declining physical film distribution and processing business, which is additive to the new Universal Studios film processing contract and should moderate revenue declines from the segment over the next two years. Confirmations (and LGD point estimate changes, as noted): Issuer: Deluxe Entertainment Services Group, Inc. -- Corporate Family Rating - Confirmed B1 -- Probability of Default Rating - Confirmed B1 -- Senior Secured 1st Lien Credit Facility - Confirmed Ba3 (to LGD3, 36% from LGD3, 39%) -- Senior Secured 2nd Lien Credit Facility - Confirmed B3 (to LGD5, 82% from LGD5, 84%) Withdrawals: Issuer: Deluxe Toronto Ltd. -- Senior Secured 1st Lien Credit Facility - Withdrew Ba3 (LGD3, 39%) -- Outlook: Negative Ratings Rationale Deluxe's B1 CFR reflects moderately high proforma debt-to-EBITDA leverage of approximately 3.5x (including Moody's standard adjustments) in consideration of an expected ongoing decline in core processing and distribution of physical film footage due to digital substitution. The expected broad-based roll-out of digital projectors is fueled in part with funding raised in the first half of 2010 by digital projector integrators who are closely aligned with major studios as well as theatre exhibitors. The rating is supported by the company's leading positions in the motion picture and television film processing, distribution and creative services industries. In addition to its recent joint venture with EchoStar to provide digital film delivery, Deluxe continues to invest in its creative services operations to transition the business mix away from its reliance on traditional physical 35mm film distribution. The creative services segment has grown over the past several years and, with the recent acquisition of Ascent Media's competing businesses, is expected to contribute approximately 50% of EBITDA for 2011. Creative services are more vulnerable than processing and distribution due to cyclical swings in studio and consumer video spending and are impacted by technological advances as well as competition from fragmented providers of post-production services. The rating accommodates predictable erosion of physical film processing and distribution revenue with more stable performance from existing and recently acquired creative services businesses given added diversification into TV programs and short-form commercial segments. Ratings are further supported by requirements under the existing credit agreement including $60 million of annual term loan B amortization and restrictive financial maintenance covenants. The negative outlook reflects Moody's view that the decline in demand for film print processing and distribution in the U.S. and Europe could accelerate, and is further compounded by uncertainties related to the company's ability to grow the creative services business and assimilate the recently acquired operations of Ascent Media. In the absence of the positive bias associated with the Universal contract win and Ascent-related business diversification, Moody's notes that the company's ratings would have been lowered as originally contemplated by the September 2010-initiated review. Ratings could be still be downgraded if operating results fall short of management's plan due to acceleration in the roll-out of digital projectors, poor integration of creative services acquisitions and/or competitive pressure resulting in weakened liquidity or deterioration in cash flow such that debt-to-EBITDA ratios exceed 3.75x (including Moody's standard adjustments). Downward rating pressure could also occur if Moody's do not expect the capital structure to be sufficiently conservative in the face of debt-financed acquisitions and/or cash distributions to equity holders. A change in the outlook to stable could be considered if revenues and EBITDA from creative services stabilize and the capital structure remains sufficiently conservative to mitigate the decline in demand for physical film processing and distribution and the risks associated with the company's acquisition strategy. The last rating action was on December 1, 2009 when Moody's withdrew ratings on Deluxe's proposed $600 million senior secured note issuance following termination of the transaction. Deluxe's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Deluxe's core industry and believes Deluxe's ratings are comparable to those of other issuers with similar credit risk. Deluxe Entertainment Services Group Inc., headquartered in Los Angeles, CA, is a worldwide supplier of film processing and distribution (50% of pro forma FY2010 revenue) as well as creative services (50% of pro forma revenue) to the major producers and distributors of motion pictures and television programs. Deluxe is an indirect wholly-owned subsidiary of MacAndrews & Forbes Holdings Inc. Revenue was approximately $982 million for the LTM period ended September 30, 2010. DENNY'S CORPORATION: BlackRock Discloses 6.07% Equity Stake ----------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 4, 2011, BlackRock, Inc. disclosed that it beneficially owns 6,050,100 shares of common stock of Denny's Corporation representing 6.07% of the shares outstanding. As of October 28, 2010, 99,697,084 shares of the Company's common stock, par value $.01 per share, were outstanding. About Denny's Corporation Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ: DENN) -- http://www.dennys.com/-- Denny's is one of America's largest full-service family restaurant chains, consisting of 1,348 franchised and licensed units and 232 company-owned units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. The Company's balance sheet at Sept. 29, 2010, showed $312.67 million in total assets, $415.10 million in total liabilities, and a stockholders' deficit of $102.42 million. Denny's carries 'B2' corporate family and probability of default ratings from Moody's Investors Service and a 'B+' corporate credit rating from Standard & Poor's. DESERT ROCK: Case Summary & 18 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Desert Rock Excavation Inc. 10764 Grace Lane NE Moses Lake, WA 98837 Bankruptcy Case No.: 11-00572 Chapter 11 Petition Date: February 9, 2011 Court: United States Bankruptcy Court Eastern District of Washington (Spokane/Yakima) Judge: Frank L. Kurtz Debtor's Counsel: John L. McKean, Esq. MCKEAN LAW OFFICE PS CORP 704 E Olive Avenue Moses Lake, WA 98837 Tel: (509) 765-4451 Fax: (509) 765-6019 E-mail: jlmckean@hotmail.com Scheduled Assets: $2,000,593 Scheduled Debts: $1,362,019 A list of the Company's 18 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/waeb11-00572.pdf The petition was signed by Stephen R. Sandberg, president. DEWEY'S SUPER TRANSPORT: Case Summary & Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Dewey's Super Transport, Inc. P.O. Box 252 Patricksburg, IN 47455 Bankruptcy Case No.: 11-80122 Chapter 11 Petition Date: February 8, 2011 Court: United States Bankruptcy Court Southern District of Indiana (Terre Haute) Judge: Frank J. Otte Debtor's Counsel: Jeffrey M. Hester, Esq. TUCKER HESTER, LLC 429 N Pennsylvania St Ste 100 Indianapolis, IN 46204-1816 Tel: (317) 833-3030 Fax: (317) 833-3031 E-mail: jeff@tucker-hester.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A list of the Company's 14 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/insb11-80122.pdf The petition was signed by Richard Hendrickson, vice president. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Richard Rhea Andrew Hendrickson 10-81870 12/07/10 DISH NETWORK: BlackRock Discloses 7.52% Equity Stake ---------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission on February 4, 2011, BlackRock, Inc. disclosed that it beneficially owns 15,389,414 shares of Class A common stock of DISH Network Corp. representing 7.52% of the shares outstanding. As of October 22, 2010, the Company's outstanding common stock consisted of 204,625,112 shares of Class A common stock and 238,435,208 shares of Class B common stock. About DISH Network DISH Network Corporation is the third largest pay television provider in the United States with 14.1 million subscribers as of Dec. 31, 2009. Annual revenues approximate $11.6 billion. The Company's balance sheet at June 30, 2010, showed $9.03 billion in total assets and $10.61 billion in total liabilities, and a stockholders' deficit of $1.58 billion. * * * At the end of January 2011, Fitch Ratings affirmed the 'BB-' Issuer Default Rating assigned to DISH Network and its wholly owned subsidiary DISH DBS Corporation. Fitch has also affirmed the 'BB-' rating assigned to the senior unsecured notes issued by DDBS Corporation. Additionally, Fitch has revised DISH's Rating Outlook to Stable from Negative. As of Sept. 30, 2010, DISH had approximately $6.5 billion of debt outstanding. The Stable Outlook recognizes the operational rebound DISH has experienced during 2010. Overall, Fitch's ratings reflect the operating leverage derived from DISH's size and scale as the third largest multi-channel video programming distributor in the U.S. and Fitch's expectation for continued, albeit pressured free cash flow generation. Dish Network carries a 'Ba3' corporate family rating, with "stable outlook", from Moody's. Moody's said that Dish Network's Ba3 Corporate Family Rating and stable outlook are not affected by the company's announcement that it has entered into an agreement to acquire 100% of the equity of the reorganized DBSD North America, Inc., a hybrid satellite and terrestrial communications company, for approximately $1 billion including interest accruing on DBSD North America's existing debt. DVM HEALTH: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: DVM Health Properties, LLC 330 East Pulaski Highway Elkton, MD 21921 Bankruptcy Case No.: 11-10913 Chapter 11 Petition Date: February 8, 2011 Court: U.S. Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Stephen Raslavich Debtor's Counsel: Albert A. Ciardi, III, Esq. CIARDI CIARDI & ASTIN, P.C. One Commerce Square 2005 Market Street, Suite 1930 Philadelphia, PA 19103 Tel: (215) 557-3550 Fax: (215) 557-3551 E-mail: aciardi@ciardilaw.com 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 David V. Martini, managing member. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- David V. Martini 11-10784 02/02/11 DYNAVAX TECHNOLOGIES: BlackRock Discloses 7.42% Equity Stake ------------------------------------------------------------ In a Schedule 13G filing with the U.S. Securities and Exchange Commission on February 4, 2011, BlackRock, Inc., disclosed that it beneficially owns 8,579,064 shares of common stock of Dynavax Technologes Corp. representing 7.42% of the shares outstanding. As of November 3, 2010, the registrant had outstanding 115,575,069 shares of common stock. About Dynavax Technologies Berkeley, Calif.-based Dynavax Technologies Corporation (NASDAQ: DVAX) -- http://www.dynavax.com/-- is a clinical-stage biopharmaceutical company. The Company discovers and develops novel products to prevent and treat infectious diseases. The Company's lead product candidate is HEPLISAV, an investigational adult hepatitis B vaccine designed to enhance protection more rapidly and with fewer doses than current licensed vaccines. As of September 30, 2010, the Company had $61,790,000 in total assets; $21,026,000 total current liabilities, $6,012,000 deferred revenue, $10,540,000 long-term note payable to holdings, $944,000 long-term contingent liability to holdings, and $60,000 other long-term liabilities and $23,208,000 in stockholders' equity. As reported in the Troubled Company Reporter on March 18, 2010, Ernst & Young LLP, 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 incurred significant operating losses and negative cash flows from operations since its inception. DYNEGY INC: UBS AG Discloses 0.34% Equity Stake ----------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 4, 2011, UBS AG disclosed that it beneficially owns 408,800 shares of common stock of Dynegy Inc. representing 0.34% of the shares outstanding. As of November 1, 2010, there were 120,894,257 shares of common stock outstanding. All of Dynegy Holdings Inc.'s outstanding common stock is owned by Dynegy Inc. 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 2010, 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. At Sept. 30, 2010, Dynegy had $11.121 billion in total assets, $8.231 billion in total liabilities, and $2.890 billion in stockholders' equity. * * * 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 (Caa1 Corporate Family Rating) will remain unchanged following announcement of the Icahn deal. EASTMAN KODAK: BlackRock Discloses 6.57% Equity Stake ----------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 4, 2011, BlackRock, Inc. disclosed that it beneficially owns 17,655,574 shares of common stock of Eastman Kodak Co., representing 6.57% of the shares outstanding. As of October 22, 2010, there were 268,876,597 shares of common stock outstanding. About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Company (NYSE:EK) -- http://www.kodak.com/-- provides imaging technology products and services to the photographic and graphic communications markets. As of December 31, 2010, the Company's balance sheet showed $6.84 billion in total assets, $7.34 billion in total liabilities and a $498 million deficit. As reported by the Troubled Company Reporter on January 31, 2011, Standard & Poor's Ratings Services placed its 'B-' corporate credit rating for Kodak, as well as all related issue-level ratings on the Company's debt, on CreditWatch with negative implications. The CreditWatch placement follows Kodak's fourth- quarter earnings announcement. At Dec. 31, 2010, the Company's cash balance was $1.6 billion -- a decline from $2 billion at Dec. 31, 2009. Revenue declined 6% for the year. Traditional revenue declined 22%, while digital revenue increased 1% for the year. The Company's revenue, earnings, and cash flow in 2010 benefited from one-time intellectual property license transactions. S&P doesn't expect IP-related cash flow to recur at the same level in 2011. Standard & Poor's credit analyst Tulip Lim said, "We could lower the rating if we believe that the Company may not have sufficient liquidity for its needs in 2011 and 2012." ELITE PHARMACEUTICALS: Gets FDA Approval of Generic HCL Tablets --------------------------------------------------------------- Elite Pharmaceuticals, Inc., received approval of an Abbreviated New Drug Application (ANDA) for phentermine HCl 37.5 mg tablets by the U.S. Food and Drug Administration. The phentermine HCl tablets are the generic equivalent of the Adipex-P(R) 37.5 mg tablets. The product and its equivalents had annual sales of approximately $40 million in 2010 and there are currently six other approved generic manufacturers plus the innovator. On September 16, 2010, Elite had previously announced the acquisition of the ANDA for this generic product from Epic Pharma LLC. The ANDA approval was granted under Epic Pharma's name and transfer of the ANDA into Elite's name will begin immediately. This product was part of a license agreement and a manufacturing and supply agreement with Precision Dose, Inc. which has a wholly owned subsidiary, TAGI Pharma, Inc. which will distribute the product. Pursuant to the previously disclosed Agreements, TAGI Pharma will market and sell this product and Elite will manufacture the product. Elite will receive a milestone payment upon shipment of the first product to Precision Dose and Elite will receive a percentage of the gross profit, as defined in the License Agreement, and earned by TAGI Pharma as a result of sales of the products. The license fee is payable monthly for the term of the License Agreement. "Elite currently manufactures Lodrane 24(R) and Lodrane 24D(R) which are marketed by our partner, ECR Pharmaceuticals, for allergy treatment, and in addition to this phentermine product, we expect to launch two additional products this year that will be marketed by TAGI. Collectively, these products will allow the company to fully realize the implementation of the business plan that was put in place to turn the company into a profitable operational company," commented Jerry Treppel, Chairman and CEO, in a statement released by the Company. About TAGI Pharma, Inc. TAGI Pharma was launched by Precision Dose in 2010 as a specialty pharmaceutical company focused on the Retail Market Segment. A key component of TAGI Pharma's strategy is the leveraging of its sales and distribution core competencies with the formation of strategic partnerships with product development and manufacturing companies such as Elite. The phentermine HCL 37.5 mg product represents the first of these initiatives, and we expect an additional five product launches in the next six months. As the company sources products through development, acquisition and licensing opportunities, key areas of focus will be in the tablet, capsule and injectable dosage formats, with an emphasis on controlled substances, where there are additional barriers to entry. TAGI Pharma is located in South Beloit, Illinois, and additional information can be obtained from its website www.tagipharma.com. About Elite Pharmaceuticals Northvale, N.J.-based Elite Pharmaceuticals, Inc. (OTC BB: ELTP) -- http://www.elitepharma.com/-- is a specialty pharmaceutical company that develops and manufactures oral, controlled-release products using proprietary technology. Elite developed and manufactures for its partner, ECR Pharmaceuticals, Lodrane 24(R) and Lodrane 24D(R), for allergy treatment and expects to launch soon three approved generic products. Elite also has a pipeline of additional generic drug candidates under active development and the Company is developing ELI-216, an abuse resistant oxycodone product, and ELI-154, a once-a-day oxycodone product. Elite conducts research, development and manufacturing in its facility in Northvale, New Jersey. The Company's balance sheet at Sept. 30, 2010, showed $10.86 million in total assets, $23.67 million in total liabilities, and a stockholders' deficit of $12.81 million. Demetrius & Company, L.L.C., in Wayne, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's results for fiscal year ended March 31, 2010. The independent auditors noted that the Company has experienced significant losses and negative operating cash flows resulting in a working capital deficiency and shareholders' deficit. The Company reported a net loss $8.1 million on $3.3 million of revenue for the fiscal year ended March 31, 2010, compared with a net loss of $6.6 million on $2.3 million of revenue for the year ended March 31, 2009. ENNIS COMMERCIAL: Unsecureds to Get 7% Total, in Installments ------------------------------------------------------------- Ennis Commercial Properties, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of California on January 21, 2011, an amended disclosure statement explaining its plan of reorganization. Under the proposed plan, the Debtor will continue to operate the business following emergence. The Debtor will serve as its own disbursing agent and will make all disbursements required by the Plan. Pursuant to the amended plan, holders of general unsecured claims that were not guaranteed by Ben Ennis, owed approximately $2,753,334, will be paid a total of $297,826 under the Plan. Payments will be made over a 10-year period at 2% interest per annum. Payments will be made monthly on a pro rata basis beginning in the fourth month following of the Effective Date of the Plan. Holders of general unsecured claims that were guaranteed by Ben Ennis, owed approximately $24,040,665, will be paid a total of $1,768,768 under the Plan. Payments will be made over a 10-year period at 2% interest per annum. Payments will be made monthly on a pro rata basis beginning in the fourth month following of the Effective Date of the Plan. Holders of membership interests in the Debtor will maintain their ownership interests under the Plan. A copy of the Amended Disclosure Statement is available for free at http://bankrupt.com/misc/EnnisCommercial.AmendedDS.pdf About Ennis Commercial Porterville, California-based Ennis Commercial Properties, LLC is a commercial real estate business. The Company's business consists of acquiring raw land and building commercial developments. The Company then either operates or sells the commercial buildings comprising the commercial development. The Company filed for Chapter 11 bankruptcy protection on March 16, 2010 (Bankr. E.D. Calif. Case No. 10-12709). Peter L. Fear, Esq., and Gabriel J. Waddell, Esq., at the Law Offices of Peter L. Fear, in Fresno, Calif., represent the Debtor as counsel. No creditors committee has been formed in this case. In its schedules, the Debtor disclosed $40,878,319 in assets and $43,922,485 in liabilities. The Debtor is affiliate with Ennis Homes, Inc., and Ennis Land Development, Inc. These two entities were consolidated in a Chapter 11 bankruptcy with Ennis Homes being the surviving entity. Ennis Homes, Inc., filed for Chapter 11 on February 2, 2009 (Bankr. E.D. Calif. Case No. 09-10848). ENTEGRA TC: S&P Junks Ratings on Second-Lien Loans From 'B' ----------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its rating on Entegra TC LLC's second-lien credit facilities to 'CCC+' from 'B' and left the '1' recovery rating unchanged. The outlook remains negative. The downgrade reflects the likelihood of debt service coverage from cash flow below 1x in 2011 and covenant violations in 2012 if asset sales do not occur in 2011 or early 2012. In November 2010, Entegra sold one of its eight power blocks, power block number two (not hedged) at the Gila River facility near Gila Bend, Ariz., to Sundevil Power Holdings LLC. Also in November 2010, Entegra amended its first-, second-, and third-lien credit agreements, eliminating nearly all of its 2011 financial covenants, among other changes. The Entegra project's rated credit facilities consist of a $450 million second-lien senior term loan due 2014 ($251 million outstanding as of Dec. 31, 2010, down from $399 million at Dec. 31, 2009, and $420 million at Dec. 31, 2008) and a $30 million synthetic revolving credit facility for working capital due 2014, both issued April 19, 2007. The revolver's balance was zero at Dec. 31, 2010 and may no longer be drawn. The Entegra project has two main operating subsidiaries, Gila River Power L.P. and Union Power Partners L.P., which own generation assets and guarantee the loans. Gila River is a 1,751 megawatt combined-cycle gas turbine plant at Gila Bend in Maricopa County, Ariz., with two merchant power blocks and one power block (number four) with a 2007-2017 tolling agreement that dispatch into the Arizona-New Mexico-South Nevada subregion of the Western Electricity Coordinating Council. The tolling agreement is with Arizona Public Service Co. (BBB-/Positive/A-3). The outlook is negative, reflecting the likelihood of debt service coverage from cash flow below 1x in 2011 and covenant violations in 2012 if significant asset sales do not occur in 2011 or early 2012. Significant reductions in liquidity or likely delays in asset sales beyond 2011 could result in a further rating downgrade. EQUIPMENT MANAGEMENT: Case Summary & 20 Largest Unsec Creditors --------------------------------------------------------------- Debtor: Equipment Management Technology 1525 Pama Lane Las Vegas, NV 89119 Bankruptcy Case No.: 11-11816 Chapter 11 Petition Date: February 9, 2011 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Samuel A. Schwartz, Esq. THE SCHWARTZ LAW FIRM 701 E. Bridger Avenue, Ste 120 Las Vegas, NV 89101 Tel: (702) 385-5544 Fax: (702) 385-2741 E-mail: sam@schwartzlawyers.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Vito A. Longo, president. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ First Capital Western $11,800,000 Region, LLC 700 S. Flower Street, Suite 2325 Los Angeles, CA 90017 Michael C. Longo $240,000 1424 Centre Circle Downers Grove, IL 60515 Fox Rothschild, LLP $187,886 3800 Howard Hughes Pkwy Las Vegas, NV 89169 Rohde & Schwarz, Inc. $70,038 Ashley Hall & Associates $42,056 California State Board of $41,913 Equalization Longo Properties $38,000 Global Test Equipment $30,958 Frisby Consulting, Inc. $4,783 Clark County Treasurer $4,481 TestEquity, LLC $2,800 Northrop Grumman Space $2,084 Technology-TX CAN Insurance Company $2,054 Swainston Consulting $1,998 Group City National Bank Visa $1,934 AllTest Instruments, Inc. $950 Keithley Instruments $845 Northrop Grumman Space $740 Technology-TX Visdsnb $623 UPS Corporate $608 Headquarters ESSEX OIL: Randsburg Int'l Wants Wm. Andrew Campbell as Receiver ---------------------------------------------------------------- Essex Oil Ltd. disclosed that Randsburg International Gold Corp. had initiated steps to appoint Wm. Andrew Campbell as a privately- appointed receiver over the assets of Essex pursuant to a general security agreement granted to Randsburg. On January 28, 2011, Essex advised Randsburg that their attempted appointment of Mr. Campbell as receiver contravened section 243(4) of the Bankruptcy and Insolvency Act (Canada) which provides that only a licensed trustee may be appointed as a receiver pursuant to the terms of a security agreement, and therefore, the appointment of Mr. Campbell as receiver was illegal, invalid and of no effect. Randsburg has now initiated steps to appoint a licenced trustee as a privately-appointed receiver over the assets of Essex. Essex is taking steps to refute the efforts by Randsburg. Randsburg is a shareholder of Essex. Michael Opara, who is the President, Chief Executive Officer and a director of Randsburg, is also the President and a director of Essex. FENTURA FINANCIAL: Sale of West Michigan Bank Completed ------------------------------------------------------- On April 28, 2010, Fentura Financial, Inc., announced that it had entered into an agreement to sell West Michigan Community Bank to a private investor group. The filed Definitive Agreement was formally amended on January 20, 2011, and called for an increase of the required ALLL and an exchange of certain loans and other real estate as an alternative to the original agreement. As projected in the January 26, 2011, Fentura Financial, Inc. filing, the sale was completed on January 31, 2011. The sale of West Michigan Community Bank is anticipated to improve pro forma Tier 1 leverage capital ratio of Fentura Financial, Inc. by 36% to 6.7%. Similarly, pro forma total risk based capital is anticipated to improve by 30% to approximately 10.2%. Additionally, it is expected that proceeds from the closing and the future liquidation of non-performing assets acquired by the Corporation will be utilized to strengthen the capital position of The State Bank and for other general corporate purposes. About Fentura Financial Based in Fenton, Michigan, Fentura Financial, Inc., is a registered bank holding company, owns and controls The State Bank, Fenton, Michigan, and West Michigan Community Bank, Hudsonville, Michigan, both state nonmember banks, and two nonbank subsidiaries. Fentura Financial shares are traded over the counter under the FETM trading symbol. At September 30, 2010, the Company had total assets of $449.38 million against total liabilities of $433.31 million, and shareholders' equity of $16.07 million. Fentura Financial reported a net loss of $2.34 million for the three months ended September 30, 2010, from a net loss of $847,000 for the same period a year ago. Fentura reported a net loss of $5.60 million for the nine months ended September 30, 2010, from $17.871 million for the same period a year ago. As reported in the Troubled Company Reporter on March 22, 2010, Crowe Horwath LLP, in Grand Rapids, Mich., 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 net losses in 2009 and 2008, primarily from higher provisions for loan losses, and non-compliance with the higher capital requirements of the Consent Orders. Fentura Financial, Inc., entered into a Written Agreement with the Federal Reserve Bank of Chicago on November 4, 2010. Among other things, the Written Agreement requires that the Company obtain the approval of the FRB prior to paying a dividend; requires that the Company obtain the approval of the FRB prior to making any distribution of interest, principal, or other sums on subordinated debentures or trust preferred securities; prohibits the Company from purchasing or redeeming any shares of its stock without the prior written approval of the FRB; requires the submission of a written capital plan by January 3, 2011, and; requires the Company to submit cash flow projections for the Company to the FRB on a quarterly basis. FIRST NATIONAL: Wants Plan Filing Deadline Extended to May 5 ------------------------------------------------------------ First National Building I, LLC, and First National Building II, LLC, ask the U.S. Bankruptcy Court for the Western District of Oklahoma to extend the exclusive period to file a Chapter 11 plan of reorganization until May 5, 2011, and solicit acceptances of that plan until July 4, 2011. According to the Debtors, since the commencement of their bankruptcy cases, they have continued to manage and operate their Oklahoma City property in the ordinary course of business. As reflected in the Debtors' operating budgets submitted to the Court, the Debtors' property is generating rent revenue of $480,000 per month and is operating on a cash flow positive basis, even with the payment of interest to the Debtors' lender, Capmark Bank and Capmark CDF Subfund VI LLC, which is continuing to be made. The Debtors are working diligently to lease space in the Property, collect rent from tenants, and maintain and operate the Property. To accomplish the foregoing, the Debtors have negotiated and reached agreements with the Lender regarding the use of cash collateral as well as the terms and conditions of an expedited leasing approval procedure. The Debtors have also approached the Lender to begin discussing the terms of a plan of reorganization that the Lender would be willing to support. If such discussions fail to bear fruit, the Debtors intend to propose a plan of reorganization in short order which complies with applicable law that would be confirmable over the Lender's objection. The Debtors are moving meaningfully toward a reorganization, which is in prospect. About First National Sherman Oaks, California-based First National Building I, LLC, and First National Building II, LLC, are the co-owners of the real property commonly known as the First National Center and located at 120 N. Robinson Avenue in Oklahoma City. The property is a 33- story historic office building located in the central business district in Oklahoma City and contains approximately 950,000 square feet of rentable space. The Honorable Geraldine Mund entered an order directing the transfer of the Chapter 11 cases of First National Building I, LLC and First National Building II, LLC from the Central District of California to the Western District of Oklahoma. Capmark Bank and Capmark CDF Subfund VI LLC, the Debtor's lenders, made the request, and Judge Mund agreed to the venue change. Capmark is represented by H. Mark Mersel, Esq. -- mark.mersel@bryancave.com - - at Bryan Cave LLP in Irvine, Calif. First National Building I, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 10-22745) in Woodland Hills, Calif., on Oct. 7, 2010, and the case was transferred (Bankr. W.D. Okla. Case No. 10-16334) to Oklahoma City on Oct. 13, 2010. First National Building II, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 10-22747) in Woodland Hills, Calif. on Oct. 7, 2010, and the case was transferred (Bankr. W.D. Okla. Case No. 10-16335) to Oklahoma City on Oct. 13, 2010. The Debtors each estimates assets and debts at $10 million to $50 million. The Debtors are affiliated with Roosevelt Lofts, LLC (Bankr. C.D. Calif. Case No. 09-14214). FIRSTFED FINANCIAL: Taps Garden City as Noticing Agent ------------------------------------------------------ FirstFed Financial Corp. asks the U.S. Bankruptcy Court for the Central District of California for permission to employ The Garden City Group Inc. as noticing agent. The firm is expected to provide notice of hearing to consider confirmation of the Debtor's plan and distribute the solicitation package approved by the Court in connection with the plan. The Debtor assures the Court that the firm is a "disinterested person" as defined in the Bankruptcy Code. About FirstFed Financial Irvine, Calif.-based FirstFed Financial Corp. is the bank holding company for First Federal Bank of California and its subsidiaries. The Bank was closed by federal regulators on December 18, 2009. FirstFed Financial Corp. filed for Chapter 11 protection on Jan. 6, 2010 (Bankr. C.D. Calif. Case No. 10-10150). Jon L. Dalberg, Esq., at Landau Gottfried & Berger LLP, serves as the Debtor's bankruptcy counsel. The Debtor disclosed assets at $1 million and $10 million, and debts at $100 million and $500 million. On November 12, 2010, the Debtor filed a disclosure statement explaining its proposed Plan of Liquidation. The Debtor's disclosure statement was approved by the Bankruptcy Court on January 5, 2011. FKF MADISON: Controlling Members Ditch Shapiro-Backed Plan ---------------------------------------------------------- Dow Jones' DBR Small Cap reports that with developer Ira Shapiro temporarily barred from controlling One Madison Park, the Manhattan condominium's affirmed controlling members withdrew the restructuring plan that Mr. Shapiro had backed in favor of pursuing a rival plan. The report relates that the controlling members -- Green Bridge Capital SA and Special Situation SA -- told the U.S. Bankruptcy Court in Wilmington, Del., that they'd "soon" be filing a new Chapter 11 plan of reorganization sponsored by Manhattan firm HFZ Capital Group LLC. "The Debtors believe that the HFZ-sponsored plan process presents the only viable option today for a funded Chapter 11 process," Green Bridge and Special Situation said in court papers, DBR notes. DBR adds that Mr. Shapiro and the controlling members, which have ties to Monaco-based real-estate investor Cevdet Caner, had been dueling over who currently controlled One Madison Park and who offered the best plan to lead it out of Chapter 11 protection. About One Madison Park FKF Madison Park Group Owner, LLC, filed for Chapter 11 bankruptcy protection on June 8, 2010 (Bankr. D. Del. Case No. 10-11867). FKF Madison 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. FLORIDA EAST: Moody's Assigns 'Caa1' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service assigned ratings to Florida East Coast Holdings Corp.; corporate family rating and probability of default rating of Caa1. Moody's also assigned a rating of Caa3 to the company's planned $130 million Senior PIK Toggle Notes due August 2017. The ratings of Florida East Coast Railway Corp.'s senior secured notes due January 2017 have been affirmed at B3. The outlook is stable. Assignments: Issuer: Florida East Coast Holdings Corp. -- Probability of Default Rating, Assigned Caa1 -- Corporate Family Rating, Assigned Caa1 -- Senior Unsecured Regular Bond/Debenture, Caa3 (LGD6-91) Withdrawals: Issuer: Florida East Coast Railway Corp. -- Probability of Default Rating, Withdrawn, previously rated B3 -- Corporate Family Rating, Withdrawn, previously rated B3 Proceeds from the $130 million FEC Holdings notes will be used primarily to fund a cash distribution to the company's equity sponsor Fortress Investment Group. The Caa1 Corporate Family and Probability of Default ratings are one notch below the B3 rating that was recently assigned to FEC Holdings' subsidiary, FECR, when the company refinanced bank debt that was legacy to the 2007 acquisition of the company by Fortress, through proceeds from a $475 million senior notes offering as well as a $140 million equity contribution by Fortress. With the subsequent issuance of the PIK Notes and distribution of proceeds to Fortress, this transaction essentially eliminates all de-levering aspects of the company's debt restructuring initiatives, and hence the CFR and PDR ratings being relocated to the new top holding company in the organizational structure are one notch lower than the originally assigned ratings. Moody's will withdraw the CFR and PDR ratings at subsidiary FECR. FEC Holdings' Caa1 CFR reflects substantial debt levels that reside in the organizational structure which result in credit metrics that are typically associated with the Caa rating category. The ratings also reflect the company's small size and lack of freight diversity, as well as its concentration on one regional market (Florida) for a substantial amount of its revenue. However, these rating constraints are partially offset by its compelling market position in its region, long-term relationships with key customers, and its unique position as the only railroad with access to certain South Florida ports. The PIK Toggle Notes are rated Caa3, two notches below the corporate family rating. FEC Holdings' notes are unsecured, and are not guaranteed by any of its subsidiaries. As such, those notes are ranked as subordinated to all FECR's debt and other liabilities per Moody's Loss Given Default methodology used to determine the Caa3 rating for these notes. FECR's senior notes are rated B3, which is one notch above FEC Holdings' corporate family rating, reflecting the substantial amount of unsecured liabilities (primarily FEC Holdings' notes) that are ranked below FECR's secured debt. The stable outlook reflects Moody's expectations that FEC Holdings' credit metrics will improve only modestly through 2011, although freight volumes are anticipated to continue a slow growth trajectory in a stable pricing environment. Although the company is expected to generate positive free cash flow over this period, it is not likely that FEC Holdings will use the cash generated to substantially repay debt. As such, Moody's does not anticipate that the company will undertake any substantial deleveraging over the next few years. Ratings could be lowered if an unexpected weakening in freight demand results in deteriorating pricing over the near term. Moody's believes that operating margins that fall substantially below 20% for a prolonged period of time during such a period of depressed revenues could result in a significant drop in free cash flow, and materially hinder the company in its ability to maintain credit metrics and an adequate liquidity profile. Metrics such as Debt/EBITDA in excess of 8.5 times, retained cash flow of less than 5% of debt, or EBIT/Interest below 0.7 times could pressure rating downward. The ratings or their outlook could be revised upward if the company can resume revenue growth as freight demand recovers, while maintaining operating margins consistently in excess of 25% and generating free cash flow that is applied to repay debt. Specifically, credit metrics such as Debt/EBITDA of under 6.5 times and EBIT/Interest in excess of 1.0 time would likely warrant upward rating consideration. Florida East Coast Holdings Corporation, through its wholly owned subsidiary, Florida East Coast Railway Corp., headquartered in Jacksonville, FL, is a freight railroad that services the east coast of Florida from Jacksonville to Miami. FLORIDA EAST: S&P Downgrades Corporate Credit Rating to 'B-' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Florida East Coast Railway Corp. to 'B-' from 'B'. At the same time, S&P lowered its issue-level ratings on FECR's $475 senior secured notes due 2017 to 'B-' from 'B'. S&P is also assigning a 'CCC' rating to the company's proposed $130 million PIK toggle notes due 2017 to be issued by FECR's direct parent, Florida East Coast Holdings Corp., with a recovery rating of '6', indicating S&P's expectation of negligible recovery (0%-10%) in a payment default scenario. The outlook is stable. "The downgrade is based on increased debt leverage resulting from FECR's proposed PIK toggle note issuance," said Standard & Poor's credit analyst Anita Ogbara. "Pro forma for the transaction, total consolidated debt is $605 million compared with $475 million before. S&P previously expected funds from operations to debt in the 10% area and debt to EBITDA in the 5.0x-6.0x range; its revised expectations include FFO to debt in the mid-single-digit area and debt to EBITDA in the 7.0x-8.0x range." The ratings on FECR reflect its limited geographic and end-market diversity, highly leveraged capital structure, and very aggressive financial policy. The company's participation in the relatively stable U.S. freight railroad industry, along with its efficient operations and minimal capital expenditure requirements, partially offset these weaknesses. S&P characterize the company's business profile as fair, financial profile as highly leveraged, and liquidity as adequate. The outlook is stable. "Despite increased leverage, over the next couple of years, S&P expects credit ratios to recover given improving economic environment," Ms. Ogbara continued. "Further, S&P expects rail volumes and intermodal market conditions to continue to strengthen and boost FECR's operating profitability and liquidity. S&P could lower the ratings if worse-than-expected earnings or further distributions to owners cause liquidity concerns. Although less likely, S&P could raise the ratings if better earnings result in FFO to debt above 10% on a sustained basis." FORD MOTOR: BlackRock Holds 5.28% Equity Stake ---------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission on February 4, 2011, BlackRock, Inc. disclosed that it beneficially owns 195,190,045 shares of common stock of Ford Motor Co. representing 5.28% of the shares outstanding. As of October 29, 2010, the Company had outstanding 3,401,803,026 shares of Common Stock and 70,852,076 shares of Class B Stock. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The Company provides financial services through Ford Motor Credit Company. Ford Motor's balance sheet at Sept. 30, 2010, showed $177.07 billion in total assets, $178.81 billion in total liabilities, and a stockholders' deficit of $1.77 billion. * * * Ford Motor has a 'BB' issuer default rating, with positive outlook, from Fitch Ratings; 'Ba2' corporate family rating and probability of default rating from Moody's Investors Service; and a 'BB-' corporate credit rating, with positive outlook, from Standard & Poor's. Fitch said at the end of January 2011 that Ford's ratings reflect its continued strong financial performance and the substantial debt reduction accomplished in the fourth quarter of 2010, both of which outperformed Fitch's previous expectations. FORD'S COLONY: Judge Wants Plan Talks to Continue ------------------------------------------------- Desiree Parker at Williamsburg Yorktown Daily reports that a federal bankruptcy judge set a Feb. 28 deadline for parties to file a reorganization plan in the Chapter 11 case of Ford's Colony Country Club. The report relates that Ford's Colony, secured creditor Prudential Industrial Properties, LLC, and the Official Committee of Unsecured Creditors are now working on a reorganization plan, but haven't yet been able to come to an agreement on what the plan will look like. According to an update by the Creditors Committee, during the recent hearing the judge reemphasized that a viable club is vital to the members and the community as a whole, and he was disappointed the parties couldn't reach an agreement on a reorganization plan. This prompted the judge to set a firm deadline for a plan. Williamsburg Yorktown Daily discloses that the judge at the last hearing withheld approval of Prudential's motion for relief from stay that would allow it to foreclose on Ford's Colony's golf course. The hearing on the request was postponed to March. The judge, the report relates, also denied Ford's Colony request to consolidate it and the Marsh Hawk Golf Club into one entity. A document posted on the Web site of the Country Club Membership Association, an organization of all members belonging to a dues paying membership category of the Ford's Colony Country Club, says the Creditors Committee and Prudential met in December to discuss options due to the Debtors' inability or unwillingness to date to present a plan of reorganization in each of these cases acceptable to all parties. A memorandum of understanding provides that a consensual plan of reorganization for the Debtor should include a requirement that whatever entity emerges from bankruptcy and owns and operates the Marsh Hawk assets provide for financial transparency of its operations going forward, and that the new owner should consult and seek approval of the CCMA regarding operations of the club. In the event that the Debtors are not able to tender a proposed plan of reorganization that is acceptable to Prudential, the Committee will strongly and unequivocallysupport Prudential's request for relief from stay to foreclose on the golf club. The MOU provides for the allocation of the proceeds in the event of a sale to a third party or the allocation of the new membership fees in the event Prudential becomes the new owner. A copy of the MOU is available at: http://bankrupt.com/misc/FordColony_Creditors_MOU.pdf About Ford's Colony Williamsburg, Virginia-based Marsh Hawk Golf Club, LLC, and Ford's Colony Country Club, own and operate a country club in Williamsburg, Virginia. The Club features a 54-hole private golf course, restaurants, meeting rooms, banquet halls and numerous recreational facilities. The Companies filed for Chapter 11 bankruptcy protection on April 1, 2010 (Bankr. E.D. Va. Lead Case No. 10-50632). Ross C. Reeves, Esq., at Willcox & Savage, P.C., assists the Debtors in their restructuring effort. Marsh Hawk estimated its assets and debts at $10 million to $50 million. FRIENDSHIP MISSIONARY: Case Summary & Creditors List ---------------------------------------------------- Debtor: Friendship Missionary Baptist Church of Coliumbia, Inc. P.O. Box 777 Columbia, TN 38402 Bankruptcy Case No.: 11-01160 Chapter 11 Petition Date: February 8, 2011 Court: U.S. Bankruptcy Court Middle District of Tennessee (Columbia) Judge: Keith M. Lundin Debtor's Counsel: Steven L. Lefkovitz, Esq. LAW OFFICES LEFKOVITZ & LEFKOVITZ 618 Church Street, Suite 410 Nashville, TN 37219 Tel: (615) 256-8300 Fax: (615) 255-4516 E-mail: slefkovitz@lefkovitz.com Scheduled Assets: $1,311,210 Scheduled Debts: $709,107 A list of the Company's six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/tnmb11-01160.pdf The petition was signed by Al Anderson, pastor. GENERAL GROWTH: Eurohypo AG Defends $85 Million Claim ----------------------------------------------------- As reported in the Jan. 24, 2011 edition of the Troubled Company Reporter, Reorganized General Growth Properties, Inc., and its units ask the Court to disallow a claim for $85.6 million filed by Eurohypo AG, New York Branch, as administrative agent under a February 24, 2006 credit agreement. The 2006 Lenders seek payment of about $85.6 million in postpetition interest at the contractual default rate where they were not contractually entitled to it other than by virtue of an ipso facto clause triggered by the Debtors' Chapter 11 filings, Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, argues. However, the 2006 Lenders failed to accelerate the 2006 Loan before the Petition Date, a condition precedent to the 2006 Lenders' right to collect default interest under the 2006 Credit Agreement and New York law, he contends. Eurohypo filed a court document defending its claim request. The Reorganized Debtors were in default on the 2006 Credit Agreement well before their bankruptcy filings, and notwithstanding multiple unremedied defaults, the 2006 Lenders supported their restructuring efforts, Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, counsel to Eurohypo AG, New York Branch, as the administrative under the 2006 Loan Agreement, tells Judge Allan Gropper. "While those efforts were in the end successful, this does not give the Reorganized Debtors latitude to ignore well-settled law and uncontroverted facts to deprive the 2006 Lenders of their contractually bargained-for rights, to which they are legally entitled," Mr. Miller asserts. Despite the clear terms of the 2006 Credit Agreement, the Reorganized Debtors incorrectly assert that the 2006 Lenders are not entitled to about $85.6 million in additional postpetition interest, Mr. Miller avers. He asserts that the 2006 Credit Agreement provides in part that if all or a portion of the principal amount of any loan or reimbursement obligation will not be paid when due, all outstanding loans and reimbursement obligations will bear interest at a rate per annum that is equal to: (x) in the case of the Loans, the rate that would otherwise be applicable plus 2%; or (y) in the case of Reimbursement Obligations, the rate applicable to Base Rate Loans under the Revolving Credit Facility plus 2%. Mr. Miller further contends that the automatic acceleration provision within the 2006 Credit Agreement is valid in these Chapter 11 cases because the Reorganized Debtors are solvent. Thus, the 2006 Lenders were not required to take any affirmative acts to accelerate the obligations under the Credit Agreement in order to receive default interest, and any assertions to the contrary are incorrect, he insists. Even if an affirmative act was needed to accelerate the Loans, Eurohypo took several prepetition steps to provide the Debtors with notice of the 2006 Lenders' intent to charge default interest and accelerate the obligations under the 2006 Credit Agreement, he stresses. The Reorganized Debtors triggered several events of default in late 2008 under the 2006 Credit Agreement. Although the 2006 Lenders and the Debtors entered into forbearance agreements with respect to the events of default, the 2008 and 2009 Forbearance Agreements expired by their terms, and all defaults waived were revived upon the expiration of the 2009 Forbearance Agreement, Mr. Miller discloses. The Reorganized Debtors' missed interest payment defaults in 2009 were also not waived under the Forbearance Agreements, he notes. As a result of those defaults, Eurohypo delivered Interest Rate Modification Notices to the Reorganized Debtors on April 9, 15 and 21, 2009, advising them that the operative interest rate under the 2006 Credit Agreement was changed from a LIBOR rate to a PRIME-based rate of 3.25% plus a 2% default rate, for a total of 5.25%, he discloses. Eurohypo's counsel also sent an e-mail on April 14, 2009 to the Reorganized Debtors' counsel with letters that provided the Debtors with an option of having Eurohypo: (i) formally terminate the waiver and forbearance agreement and accelerate the obligations under the 2006 Credit Agreement; or (ii) increase the accruing interest rate on the Credit Agreement to the contractual default rate, he says. To the extent that the 2006 Lenders provided notice but did not have an opportunity to formally accelerate the obligations under the 2006 Credit Agreement before the Petition Date, the Reorganized Debtors should not be permitted to use the automatic stay as shield to avoid paying the default interest that is owed to the 2006 Lenders, Mr. Miller maintains. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 protection on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. General Growth Properties on November 9, 2010, successfully completed the final steps of its financial restructuring and emerged from Chapter 11. GGP successfully restructured approximately $15 billion of project-level debt Recapitalized with $6.8 billion in new equity capital Paid all creditor claims in full achieved substantial recovery for equity holders. As part of its plan of reorganization, GGP has split itself into two separate and independent publicly traded corporations. GGP shareholders as of the record date of November 1, 2010 received common stock in both companies. The new GGP, which will commence trading November 10 on The New York Stock Exchange under the ticker symbol "GGP," is the second-largest shopping mall owner and operator in the country, with more than 183 regional malls in 43 states. The spin-off company, The Howard Hughes Corporation, consists of GGP's portfolio of master planned communities and other strategic real estate development opportunities. This company will trade under the ticker symbol "HHC" on The New York Stock Exchange. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Reaches Agreement on NY $12 Mil. Cure Claim ----------------------------------------------------------- The Reorganized Debtors and the State of New York as trustee for the Common Retirement Fund have reached an agreement in principle with respect to a cure claim, subject to final approval from the NY Comptroller, Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in New York, counsel to the Reorganized Debtors, disclosed in a notice filed with the Court on February 7, 2011. Accordingly, the hearing on this matter is adjourned from February 8, 2011, to a later date. As reported in the Jan. 24, 2011 edition of the Troubled Company Reporter, Reorganized General Growth Properties, Inc., and its units sought the disallowance of the Comptroller of the State of New York's claim for more than $12 million. Counsel to the Reorganized Debtors, Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, insists that the Reorganized Debtors should not be required to pay more than over $12 million in postpetition interest at the default rate on a promissory note dated February 8, 2008. He contends that the only basis for the Comptroller's claim is the purported automatic acceleration of the loan triggered by GGP, Inc., f/k/a General Growth Properties, Inc.'s Chapter 11 filing. However, GGP was not in default under the Homart Note as of the Petition Date, he stresses. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 protection on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. General Growth Properties on November 9, 2010, successfully completed the final steps of its financial restructuring and emerged from Chapter 11. GGP successfully restructured approximately $15 billion of project-level debt Recapitalized with $6.8 billion in new equity capital Paid all creditor claims in full achieved substantial recovery for equity holders. As part of its plan of reorganization, GGP has split itself into two separate and independent publicly traded corporations. GGP shareholders as of the record date of November 1, 2010 received common stock in both companies. The new GGP, which will commence trading November 10 on The New York Stock Exchange under the ticker symbol "GGP," is the second-largest shopping mall owner and operator in the country, with more than 183 regional malls in 43 states. The spin-off company, The Howard Hughes Corporation, consists of GGP's portfolio of master planned communities and other strategic real estate development opportunities. This company will trade under the ticker symbol "HHC" on The New York Stock Exchange. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MARITIME: BlackRock Discloses 5.25% Equity Stake -------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission on February 4, 2011, BlackRock, Inc. disclosed that it beneficially owns 4,666,265 shares of common stock of General Maritime Corp. representing 5.25% of the shares outstanding. As of November 5, 2010, there were 88,902,357 shares of common stock of the Company outstanding. About General Maritime Corp. Based in New York City, General Maritime Corporation through its subsidiaries provides international transportation services of seaborne crude oil and petroleum products. The Company's fleet is comprised of VLCC, Suezmax, Aframax, Panamax and product carrier vessels. The Company operates its business in one business segment, which is the transportation of international seaborne crude oil and petroleum products. The Company's vessels are primarily available for charter on a spot voyage or time charter basis. Standard & Poor's Ratings Services in December 2010 lowered its long-term corporate rating on General Maritime Corp. to 'CCC+' from 'B', and placed the ratings on CreditWatch with negative implications. At the same time, S&P lowered its ratings on the company's senior unsecured notes to 'CCC-', two notches below the new corporate credit rating; the recovery rating of '6', which indicates S&P's expectation that lenders will receive a negligible (0%-10%) recovery in a payment default scenario, remains unchanged. "The downgrade reflects General Maritime's weak liquidity, very limited financial covenant headroom (despite recent amendments), and deterioration in its financial profile," said Standard & Poor's credit analyst Funmi Afonja. "As of Sept. 30, 2010, General Maritime had no borrowing availability under its $749.8 million revolving credit facility and $8.7 million in unrestricted cash, after factoring financial covenant limitations. In S&P's opinion, the recent financial covenant amendments do not provide sufficient covenant headroom, and there is still a high probability of a covenant breach over the next quarter. If there is a covenant breach, lenders can require the immediate payment of all amounts outstanding. General Maritime's liquidity is further constrained by significant upcoming debt maturities, including $27.5 million in scheduled principal payments due in 2011 under its term loan, $50.1 million semiannual reduction on the revolver, beginning on April 26, 2011, and a bullet payment of $599.6 million in October 2012, when the facility expires. General Maritime also has a $22.8 million bridge loan facility that matures in October 2011. Cash interest payments on the bridge loan will increase if the company is unable to pay off the loan by Dec. 31, 2010." GENERAL MOTORS: DTE Pontiac Wants Talk on Project Contracts ----------------------------------------------------------- Motors Liquidation Company and its debtor affiliates seek the Court's permission to reject, nunc pro tunc to January 7, 2011, a utility services agreement MLC entered into with DTE Pontiac North, LLC, through MLC's former division General Motors Corporation World Wide Facilities Group. The Agreement relates to maintenance and utility services provided by DTE to the Debtors' Pontiac North Facility in Pontiac, Michigan. Since the closing of the Debtors' sale of substantially all of their assets pursuant to the 363 Transaction, General Motors LLC ("New GM") has been paying 100% of the costs associated with the Agreement and has been receiving the benefits thereunder. New GM no longer requires the services provided by DTE pursuant to the Agreement and has elected not to take assignment of the Agreement, Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, in New York, relates. Counsel to DTE Pontiac North, LLC, Peter S. Partee, Sr., Esq., at Hunton & Williams LLP, in New York, argues that because the asset purchase agreement between Motors Liquidation Company and DTE and its related contracts -- the "Project Contracts" -- constitute a single agreement, the Debtors are not permitted to assume or reject only the Utility Services Agreement. The Project Contracts include the Utility Services Agreement, a lease agreement, a security agreement and a project license agreement. Indeed, the treatment of all of the Project Contracts must be resolved in an integrated matter, he asserts. Even if the Debtors could cherry pick and reject the Utility Services Agreement, its rejection would not produce the result desired by the Debtors, Mr. Partee contends. For one, MLC's failure to pay fees under the Utility Services Agreement relieves DTE of its obligation to make deferred payments by the amount corresponding to the amount that MLC fails to pay DTE, he points out. A rejection of the Utility Services Agreement also constitutes an incurable default under and a deemed rejection of the other Project Contracts that excuses further performance thereunder, he asserts. Accordingly, DTE asks the Court to adjourn the hearing on the Rejection Motion to allow the parties sufficient time to negotiate a comprehensive resolution with the Debtors for the treatment of all of the Project Contracts. 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. Garden City Group is the claims and notice agent of the Debtors. 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 Objects to Super Industries' Class Claims ---------------------------------------------------------------- Motors Liquidation Co. LLC and its units ask the U.S. Bankruptcy Court for the Southern District of New York to disallow and expunge unliquidated Claim Nos. 67121 and 67122 filed by Super Industries, International, Inc., and Superior Industries International - Arkansas, Inc. The Claims are based on a putative class action styled Moery, et al., v. General Motors Corporation, et al., before the Circuit Court of Lonoke County, Arkansas, against the Superior Industries Parties and Motors Liquidation Company brought on behalf of certain Arkansas residents who alleged defects in certain model year GM vehicles equipped with 16-inch aluminum alloy rear wheels with rear disc breaks. No judgment was entered in the Moery Action and the Moery Action was dismissed on November 14, 2008. Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, in New York, avers that despite the dismissal of the Moery Action two years ago, and more than six months before the Petition Date, the Claims seek unliquidated sums for "contribution and/or indemnification" "if a judgment is entered against Claimant in the Moery Action or if Claimant is otherwise required to accept responsibility for any liability in connection with the Moery Action." However, MLC should have no liability for the Claims for indemnification or contribution related to the Moery Action because the Moery Action has been dismissed and, to the best of the Debtors' knowledge, has not been revived, he points out. Moreover, the Claims are contingent claims and are subject to disallowance under Section 502(e)(1)(B) of the Bankruptcy Code, Mr. Smolinsky contends. He insists that the Claims were filed by claimants who are allegedly co-liable with the Debtors on claims of a third party and are seeking a contingent and unliquidated contribution or reimbursement amount from MLC with respect to those third party claims. 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. Garden City Group is the claims and notice agent of the Debtors. 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: Opposes Interim Allowance of Appaloosa Claims ------------------------------------------------------------- Motors Liquidation Co. and its units ask the Bankruptcy Court to either deny the motions for temporary allowance of claims filed by Green Hunt Wedlake, Inc. and Appaloosa Management, et al., or permit the five individual Nova Scotia Noteholders to vote their individual claims in an aggregate amount not exceeding $1.072 billion. The Debtors believe that, given the circumstances, where the Court has declined to hear the dispute on summary judgment motions and serious litigable issues have been raised as to the allowance of the "Nova Scotia Wind-Up Claim" and the "Nova Scotia Guarantee Claims," granting Green Hunt Wedlake, Inc., and Appaloosa Management, et al., a disproportionate voice in the voting process of the Debtors' Amended Joint Chapter 11 Plan of Reorganization is not appropriate. Green Hunt, in its capacity as trustee for General Motors Nova Scotia Finance Company seeks temporary allowance of its claim for $1,607,647,592 -- Nova Scotia Wind-Up Claim. In another request, Appaloosa; Aurelius Capital Management, LP; Elliott Management Corporation and Fortress Investment Group LLC ask the Court to temporarily allow their claims totaling $1,072,557,531 -- Nova Scotia Guarantee Claim. The Debtors further relate that they do not object to the Court's permitting each of Appaloosa, Aurelius, Elliott, Fortress and Morgan Stanley & Co. International PLC to vote their individual portions of the Nova Scotia Guarantee Claims. But, to permit any additional voting given the disputed nature of all of the claims is neither appropriate nor fair to the other creditors in these Chapter 11 cases, Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, in New York, counsel to the Debtors, asserts. Green Hunt Talks Back The Debtors' Objection is perplexing in that the Debtors, as the original counterparty to the Lock Up Agreement, "stipulated and agreed" that the Nova Scotia Trustee would have an unsecured claim in the bankruptcy of Motors Liquidation Company and that MLC would not take any position inconsistent with the assertion of that claim, Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, counsel to the Nova Scotia Trustee, tells the Court. "Now, having received the benefits of the Lock Up Agreement, the Debtors reverse course and are challenging the Nova Scotia Trustee's entitlement to a general unsecured claim," he complains. Mr. Dublin contends that the Debtors misapply the standards relevant to Rule 3018 of the Federal Rules of Bankruptcy Procedure to arrive at the conclusion that, while the Nova Scotia Noteholders should be entitled to vote on the Plan, the Nova Scotia Trustee should be disenfranchised from the Plan process. He asserts that a December 15, 2010 preliminary status conference on the Official Committee of Unsecured Creditors' Objection to the Nova Scotia Trustee Claim, the Debtors advised the Court that their only position with respect to the Claim Objection was a desire for an efficient resolution. Where the Creditors' Committee has not opposed the Nova Scotia Trustee Motion, the Debtors have shed their neutrality and allege that the Nova Scotia Trustee's claim is so unlikely to be allowed that it should be disenfranchised from the voting process, Mr. Dublin argues. However, the Debtors' concerns are unfounded as even if the two claims were combined, they would account for less than 7.80% of the claims in Class 3 as estimated by the Plan, he stresses. There is little risk that the Nova Scotia Trustee's claim alone will dominate and control a voting class, he maintains. In response, the Creditors' Committee believes that the Claims in the Motions for Temporary Allowance are without merit. Nevertheless, the Creditors' Committee takes no position with respect to the Motions for Temporary Allowance and files this response to ensure that its failure to take a position to those motions is not construed as an admission that the Claims are meritorious. The Creditors' Committee also expects that the Nova Scotia Trustee and the Appaloosa Noteholders, as general unsecured creditors, will vote to accept the Plan to the extent that their Motions for Temporary Allowance are granted and the Claims, as applicable, are temporarily allowed. In the event that the Claims are temporarily allowed, in whole or in part, and holders vote to reject the Plan, the Creditors' Committee reserves its right under Section 1126(e) of the Bankruptcy Code to request designation of the applicable votes, if the Creditors' Committee determines that those votes were not cast in good faith. Certain holders of notes issued by GM Nova Scotia support the Appaloosa Noteholders' Motion. The Joining Noteholders are Anchorage Capital Master Offshore Ltd.; Canyon-GRF Master Fund, L.P.; Canyon Value Realization Fund L.P.; CSS, LLC; Knighthead Master Fund, LP; LMA SPC for and on behalf of MAP 84, Lyxor/Canyon Realization Fund, Ltd.; Onex Debt Opportunity Fund, Ltd.; Redwood Master Fund Ltd.; and The Canyon Value Realization Master Fund, L.P. Another noteholder, Goldman Sachs & Co. also joined in the Noteholders' Motion in another filing. Goldman Sachs reserves its right to supplement and amend this joinder and reserve all other rights, remedies and defenses at law or in equity. 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. Garden City Group is the claims and notice agent of the Debtors. 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: Says Bankr. Court Has Jurisdiction in UAW Suit -------------------------------------------------------------- As reported in the Jan. 4, 2011 edition of the Troubled Company Reporter, United Automobile, Aerospace and Agricultural Implement Workers of America submitted a brief asserting: (a) that the U.S. Bankruptcy Court for the Southern District of New York does not have jurisdiction over any aspect of the controversy between the UAW and General Motors LLC ("New GM"); and (b) why the Bankruptcy Court should abstain in the event it concludes that it does have jurisdiction over one or more In response, the Bankruptcy Court has exclusive jurisdiction to enforce and interpret the Sale Order and the 2009 UAW Retiree Settlement Agreement -- exclusive jurisdiction to which the United Automobile, Aerospace and Agricultural Implement Workers of America agreed, counsel to General Motors LLC ("New GM"), Lisa G. Laukitis, Esq., at Jones Day, in New York, argues. Ms. Laukitis asserts that the restructuring of General Motors Corporation's retiree obligations through the 2009 UAW Retiree Settlement Agreement was a sine qua non of the sale to New GM. Thus, the Court's exclusive jurisdiction over whether the plain language of that agreement addresses the issues raised in the Enforcement Motion is as manifest now as it was when the parties agreed in the 2009 UAW Retiree Settlement Agreement and the Court approved the sale that the Court would retain that jurisdiction, she stresses. Whatever the merits of New GM's arguments, they self-evidently present questions about the "enforcement, implementation, application, or interpretation" of the 2009 UAW Retiree Settlement Agreement and the Sale Order, i.e., questions that the plain language of the documents themselves place squarely within the Court's exclusive jurisdiction, she points out. Ms. Laukitis continues that the jurisdictional and abstention questions presented by the Enforcement Motion are also straightforward. Sections 26(A) and 26(B) of the 2009 UAW Retiree Settlement Agreement -- which agreement "fixed and capped" New GM's payment obligations to a successor Voluntary Employment Beneficiary Association and "forever terminated" "[a]ll obligations of [New GM] . . . for Retiree Medical Benefits . . . arising from any agreement(s) between [New GM] and the UAW" -- unambiguously state the parties' intention that the Court retain and exercise exclusive jurisdiction over all disputes involving the "enforcement, implementation, application, or interpretation" of that agreement, she points out. The 2009 UAW Retiree Settlement Agreement, as well as the Sale Order, foreclose any claim that New GM has a contractual obligation to make the disputed $450 million payment -- the Additional VEBA Payment -- to the New VEBA, she insists. In its brief on the jurisdictional issue, the UAW ignores the explicit jurisdictional provisions of the 2009 UAW Retiree Settlement Agreement and the Sale Order and engages instead in extensive argument on the merits of whether the Additional VEBA Payment is in fact precluded by the 2009 UAW Retiree Settlement Agreement and the Sale Order, Ms. Laukitis argues. The UAW's argument, she contends, fails for several reasons, including because the 2009 UAW Retiree Settlement Agreement: * by its terms was expressly made applicable to then existing defined contribution VEBA -- DC VEBA; * merges the DC VEBA into the New VEBA; * fixes and caps New GM's obligations to make contributions to the New VEBA; * extinguishes all other obligations of New GM for retiree health care; * supersedes or amends any prior inconsistent agreements; and * prohibits the UAW from seeking additional contributions to the New VEBA from New GM. Ms. Laukitis further asserts that the UAW can not demonstrate that the Court should abstain from deciding the issues presented. In fact, the UAW Brief fails even to identify the abstention factors, she points out. Application of those factors, however, clearly demonstrates that the Court should not abstain, but rather should fulfill the intent of the parties as reflected in the 2009 UAW Retiree Settlement Agreement and the Sale Order and exercise jurisdiction over the Motion, she tells Judge Gerber. 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. Garden City Group is the claims and notice agent of the Debtors. 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: Has Already Filed 200 Omnibus Claims Objections --------------------------------------------------------------- NetDockets reports that General Motors Corporation aka Motors Liquidation Company reached another milestone in its historic chapter 11 cases recently -- the company filed its 200th omnibus objection to claims asserted against it. The report relates that because it came in a flurry of new omnibus claim objection filings, GM has actually filed 209 omnibus claims objections through this evening, as well as a number of additional, non-omnibus claims objections. By comparison, netDockets notes, Old Carco LLC fka Chrysler LLC has filed 53 omnibus claims objections in its cases which have been running for several months longer than GM's bankruptcy cases (Chrysler has also filed a number of additional non-omnibus objections). The report notes that other than being the 200th omnibus claims objection, the pleading itself is not particularly noteworthy, as it covers nothing more than a handful of proofs of claim which GM asserts are based on the ownership of preferred stock in the old GM. That seems unlikely, however, because GM never issued any preferred stock according to its objection, the report says. Netdockets adds that while some other proofs of claim asserting interests in preferred stock were determined to actually be claims of bondholders, GM states that it has not been able to link these particular claims to any debt securities issued by GM and, therefore, its advisors assume that the claims are likely based upon ownership of GM's old common equity. 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, US$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 NUTRITION: Moody's Upgrades Corp. Family Rating to 'B2' --------------------------------------------------------------- Moody's Investors Service upgraded General Nutrition Centers, Inc.'s Corporate Family Rating and Probability of Default Rating to B2 from B3. In addition, Moody's assigned a B1 rating to GNC's proposed $80 million revolving credit facility and $1.1 billion term loan. The Speculative Grade Liquidity rating of SGL-2 is affirmed. All new ratings assigned are subject to review of final documentation. The rating outlook is stable. Ratings Rationale The upgrade reflects the strengthening of GNC's leverage and coverage metrics due to its solid earnings improvement from comparable store sales growth and improving margins. In addition, the upgrade reflects that the recently announced initial public offering and proposed refinancing significantly reduces the likelihood of an increase in GNC's debt levels to finance a sale of the company. The proceeds from the proposed $1.1 billion term loan will be used to repay all of GNC's existing debt and to redeem the majority of the existing preferred stock (which Moody's had viewed as a hybrid instrument with 50% debt like attributes for analytical purposes). The proposed refinancing defers GNC's debt maturities which currently start in 2013 until 2018, which is a credit positive. These ratings are assigned: * $80 million revolving credit facility at B1 (LGD 3, 43%) * $1.1 billion term loan at B1 (LGD 3, 43%) These ratings are upgraded: * Corporate Family Rating to B2 from B3 * Probability of Default Rating to B2 from B3 This rating is affirmed: * Speculative Grade Liquidity rating at SGL-2 These ratings are affirmed and will be withdrawn upon successful closing of the proposed facilities: * Senior secured bank credit facilities at B1 (LGD 2, 27%) * Senior unsecured notes at Caa1 (LGD 5, 75%) * Senior subordinated notes at Caa1 (LGD 6, 95%) GNC's B2 Corporate Family Rating reflects its sizable level of debt and resulting high leverage. While Moody's expects earnings to improve, the improvement will not be enough to materially reduce leverage. The VMS sector performed well through the economic downturn -- a significant credit positive. Moody's views the vitamin and mineral category (about one third of GNC's sales) favorably as it is a relatively large market that will benefit from an increasing number of Americans over the age of 50. That said, GNC has a sizable concentration in sports nutrition, a much more limited product segment with a relatively small target market. Additionally, the rating is constrained by the risk of sales and earnings volatility that could arise from adverse publicity and product liability claims with regard to some VMS products. In particular, Moody's has concerns around GNC's modest concentration in diet products and herbs, two faddish product categories that are more exposed to such product liability risks and earnings volatility. GNC's rating also reflect its strong presence in its target markets as well as its solid operating margins. The stable outlook reflects Moody's expectation that GNC operating performance will continue to improve due to solid comparable store sales growth and new store openings. However, the stable outlook also reflects that leverage will remain high due to the GNC's sizable level of debt. Ratings could be upgraded should GNC continue to grow earnings or reduce debt such that debt to EBITDA approaches 5.0 times and EBITA to interest expense remains above 2.0 times. In addition, an upgrade would require GNC to maintain good liquidity and balanced financial policies. Ratings could be downgraded should operating performance weaken or debt increase such that debt to EBITDA would be sustained above 6.0 times or EBITA to interest expense would fall below 1.5 times. In addition, ratings could move downward should GNC face new product-related risks that result in material obligations, should liquidity weaken, or financial policy become more aggressive. The last rating action on GNC was July 14, 2010 when its Speculative Grade Liquidity rating was upgraded to SGL-2 from SGL- 3. General Nutrition Centers, Inc., headquartered in Pittsburgh, PA, manufactures and retails vitamins, minerals, and nutritional supplements domestically and internationally. About 75% of its revenue is generated by about 2,870 company owned stores and website. It also has about 2,300 franchise locations in the U.S. and 49 countries that generate about 15% of its revenue. Total revenues are about $1.8 billion. GENERAL NUTRITION: S&P Assigns 'B+' Rating to $80 Mil. Loan ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue-level rating and '3' recovery rating to Pittsburgh-based General Nutrition Centers Inc.'s proposed $80 million senior secured revolving credit facility due 2016 and $1.1 billion senior secured term loan B facility due 2018. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%) recovery in the event of a payment default. The company intends to use the proceeds from the proposed new term loan B, along with cash on hand, to redeem a portion of the preferred stock held at GNC Acquisition Holdings Inc., the ultimate indirect parent holding company, and to repay existing debt (a $60 million senior secured revolving credit facility due March 15, 2012; a $675 million term loan B due Sept. 16, 2013, of which $644.4 million is outstanding; $300 million senior unsecured paid-in-kind toggle notes due March 15, 2014; and $110 million 10.75% senior subordinated notes due March 15, 2015) issued by GNC. In its analysis, S&P estimated that about $159 million of preferred was redeemed. In addition, S&P affirmed its 'B+' corporate credit rating on GNC. The outlook is stable. Upon completion of the refinancing and the repayment of the existing debt, S&P will withdraw its ratings on these issues. The ratings on the new issues are subject to review of final terms and documents. "The ratings on GNC reflect S&P's view that the company will continue its good operating performance and related improvement in credit protection measures, despite a weak economy and a fragile retail environment," said Standard & Poor's credit analyst Jayne Ross. It is S&P's opinion that the financial risk profile is aggressive, reflecting GNC's highly leveraged capital structure and credit metrics that are appropriate for the rating. In S&P's view, the company's business risk profile is weak, reflecting GNC's participation in the highly competitive and fragmented nutritional supplement specialty retail sector. A further upgrade is limited until S&P has a better understanding of GNC's financial policies. Pro forma for the refinancing, GNC's capital structure is still highly leveraged; S&P estimates total debt (including holding company preferred stock) to EBITDA of about 5.8x. Since its March 2007 LBO by Ares Corporate Opportunities Fund II L.P. and the Ontario Teachers' Pension Plan Board, the company's debt leverage has declined because of EBITDA growth. S&P expects that with continued good operating performance leverage should decline to about 5.2x by the end of fiscal 2011. Cash flow protection measures have also improved since the LBO, and pro forma for the transaction, EBITDA interest coverage is likely to be about 3x. S&P does not expect a significant reduction in debt in the near term; however, S&P forecasts that credit metrics should improve if GNC maintains its positive retail operating performance through the remainder of fiscal 2011 and new product initiatives are successful. The company has an alliance with The Gatorade Co. for sports nutrition drinks and is launching a line of dietary supplements for dogs and cats, which will be made exclusively for PetSmart Inc. GLAZIER GROUP: U.S. Trustee Forms 3-Member Creditors Committee -------------------------------------------------------------- Tracy Hope Davis, the U.S. Trustee for Region 2, appointed three creditors to serve on an Official Committee of Unsecured Creditors of Glazier Group, Inc. The members of the Committee are: 1) Premium Supply Co. Inc. 960 Grand Blvd. Deer Park, New York 11729 Attention: Joy C. Pattinger, President Tel: (302) 636-6391 2) Niche Media Holdings Inc. 100 Church Street New York, New York 10007 Attention: Jeffrey Maidenbaum, Esq. Tel: (516) 223-8553 3) Newmarket International, Inc. 75 New Hampshire Avenue Portsmouth, New Hampshire 03801 Attention: John Fellows Tel: (603) 427-5794 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. New York-based The Glazier Group, Inc., filed for Chapter 11 bankruptcy protection on November 15, 2010 (Bankr. S.D.N.Y. Case No. 10-16099). Frederick E. Schmidt, Esq., Joshua Joseph Angel, Esq., and Seth F. Kornbluth, Esq., at Herrick, Feinstein LLP, assist the Debtor in its restructuring effort. The Company disclosed assets of $15.2 million and liabilities of $26.8 million as of the Petition Date. GLAZIER GROUP: GE Capital Wants Trustee to Oversee Sale ------------------------------------------------------- General Electric Capital Corporation, a secured creditor of The Glazier Group Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to appoint a chapter 11 trustee or, in the alternative, an examiner to oversee the sale of the Debtor's restaurants. GE Capital tells the Court that it loaned $7 million to the Debtor under a loan and security agreement dated Sept. 19, 2007, wherein GE Capital was granted a security interest on all of the the Debtor's assets. As a creditor of the Debtor, GE said it is a party in interest and authorized to move the Court for the appointment of a trustee. According the GE Capital, the Debtor's current executive management consists solely of members of the Glazier family who own 100% of the Debtor and each of the Affiliates. These persons, the secured creditor alleges, have demonstrated that they cannot be trusted to put fiduciary duties ahead of personal interests. GE Capital relates Peter Glazier has decided not to pay upwards of $1,600,000 in withheld taxes to federal, state and local agencies severely jeopardizing the continued operation of the enterprise and, therefore, the value of the enterprise. GE Capital is represented in the case by Reed Smith LLP. New York-based The Glazier Group, Inc., filed for Chapter 11 bankruptcy protection on November 15, 2010 (Bankr. S.D.N.Y. Case No. 10-16099). Frederick E. Schmidt, Esq., Joshua Joseph Angel, Esq., and Seth F. Kornbluth, Esq., at Herrick, Feinstein LLP, assist the Debtor in its restructuring effort. The Company disclosed assets of $15.2 million and liabilities of $26.8 million as of the Petition Date. GRAY TELEVISION: BlackRock Discloses 6.66% Equity Stake ------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission on February 4, 2011, BlackRock, Inc. disclosed that it beneficially owns 3,424,125 shares of common stock of Gray Television Inc. representing 6.66% of the shares outstanding. As of October 31, 2010, there were 51,386,313 shares of common stock outstanding of the Company. About Gray Television Formerly known as Gray Communications System, Atlanta, Georgia- based Gray Television, Inc., is a television broadcast company. Gray currently operates 36 television stations serving 30 markets. Each of the stations are affiliated with either CBS (17 stations), NBC (10 stations), ABC (8 stations) or FOX (1 station). In addition, Gray currently operates 38 digital second channels including 1 ABC, 4 Fox, 7 CW, 16 MyNetworkTV and 1 Universal Sports Network affiliates plus 8 local news/weather channels and 1 "independent" channel in certain of its existing markets. The Company's balance sheet at Sept. 30, 2010, showed $1.25 billion in total assets, $1.10 billion in total liabilities, and stockholders' equity of $111.81 million. * * * Gray Television carries 'B-' issuer credit ratings, with stable outlook, from Standard & Poor's and 'Caa1' corporate family rating and probability of default rating, with stable outlook, from Moody's. "Moody's views the company's current level of financial leverage, as exacerbated by a concentrated maturity profile, to be unsustainable for a TV broadcaster and indicative of elevated restructuring risk over the longer-term," said Moody's Russell Solomon, Senior Vice President, in April 2010. Pro forma for the pending transaction, all of Gray's debt (including its debt-like Series D Preferred Stock) comes due in 2014-2015. Moody's believes Gray will need to significantly reduce its debt with free cash flow and will probably need to issue additional equity in order to further moderate its leverage profile over the next few years prior to accessing the capital markets again to refinance current obligations. The Caa1 CFR incorporates Moody's view that leverage will remain excessive over at least the next two years. GULF FREEWAY: Files Plan of Reorganization & Disclosure Statement ----------------------------------------------------------------- Gulf Freeway Plaza, LLC, has filed a Plan of Reorganization and disclosure statement with the U.S. Bankruptcy Court for the Southern District of Texas. A copy of the disclosure statement is available for free at: http://bankrupt.com/misc/GULFFREEWAY_DS.pdf Treatment of Claims Under the Plan, the administrative claims will be paid in full. Holders of priority tax claims will receive the present value of the claim, in regular installments paid over a period not exceeding five years from the order of relief. With respect to classified claims: Classification Treatment -------------- --------- Class 1 - General Unsecured -- will receive equal monthly Class installments over a period of five years from the Petition Date with payments commencing 30 days after the effective date; claimants will retain liens. Class 2 - Allowed Claim 1st -- will receive a new note International Bank for Loan against Gulf Freeway Plaza, No. 223905 in the estimated LLC, in the amount of amount of $2,370,314.07, $2,370,314.07 to be secured by plus accrued interest and fees 9906 and 9920 Gulf Freeway; executed by Gulf Freeway Plaza, claimant will retain no liens LLC and guaranteed by Gilbert or claims against any obligor, Ramirez, Sr. co-obligor or guarantor on any debt owned by the Debtor to claimant. Class 3 - Allowed Claim 1st -- will receive a new note International Bank for Loan against Gulf Freeway Plaza, No. 240505 in the estimated LLC, in the amount of amount of $736,342.58, $736,342.58 to be secured by plus accrued interest and fees 9906 and 9920 Gulf Freeway. executed by Gulf Freeway Plaza, LLC and guaranteed by Gilbert Ramirez, Sr. Class 4 - Allowed Claim 1st -- will receive a new note International Bank for Loan against Gulf Freeway Plaza, No. 293825 in the estimated LLC, in the amount of amount of $589,206.55, plus $589,206.55 to be secured by accrued interest and fees 9906 and 9920 Gulf Freeway. executed by Gulf Freeway Plaza, LLC and guaranteed by Gilbert Ramirez, Sr. Class - 5 Allowed Claim 1st -- will receive a new note International Bank for Loan against Gulf Freeway Plaza, No. 858555 in the estimated LLC, in the amount of amount of $2,303,370.21, plus $2,303,370.21 to be secured by accrued interest and fees 9906 and 9920 Gulf Freeway. executed by Gulf Freeway Plaza, Claimant will retain no liens LLC and guaranteed by Gilbert or claims against any obligor, Ramirez, Sr. co-obligor or guarantor on any Debt owned by the Debtor to claimant. Class 6 - Allowed Claim 1st -- will receive a new note International Bank for Loan Gulf Freeway against Plaza, No. 279625 in the estimated LLC, in the amount of amount of $349,613.10, plus $349,613.10 to be secured by accrued interest and fees 9906 and 9920 Gulf Freeway. executed by Gil Ramirez Homes, Claimant will retain no liens Inc. now a defunct entity and or claims against any obligor, guaranteed by Gilbert Ramirez, Sr. co-obligor or guarantor on any debt owned by the Debtor to claimant. About Gulf Freeway Plaza LLC Houston, Texas-based Gulf Freeway Plaza LLC, fdba La Hacienda Business Park LLC, filed for Chapter 11 bankruptcy protection on May 27, 2010 (Bankr. S.D. Tex. Case No. 10-34332). John L. Green, Esq., who has an office in Houston, Texas, serves as the Debtor's bankruptcy counsel. The Debtor disclosed $12,700,000 in assets and $6,180,532 in liabilities. HARDAGE HOTELS VIII: San Diego Unit of Hardage Hotels in Ch. 11 --------------------------------------------------------------- Carla Main at Bloomberg News reports that Hardage Hotels VIII LLC, the San Diego-based unit of Hardage Suite Hotels LLC, sought Chapter 11 protection from creditors. Hardage Hotels VIII, LLC, filed a Chapter 11 petition (Bankr. D. Del. Case No. 11-10210) on Jan. 21, 2011, in Wilmington, Delaware. Bruce Grohsgal, Esq., at Pachulski, Stang, Ziehl Young & Jones, represents the Debtor. The Debtor estimated assets of $1 million to $10 million and debts of $10 million to $50 million as of the Petition Date. GYMBOREE CORP: S&P Assigns Corporate Credit Rating at 'B+' ---------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B+' corporate credit rating to The Gymboree Corp. The outlook is stable. At the same time, S&P assigned its 'B+' bank loan rating with a '3' recovery rating to the proposed $820 million term loan. The company intends to use the proceeds from this term loan to refinance the $820 million term loan placed in connection to the acquisition of the company by Bain Capital LLC in November 2010. The new term loan will eliminate the existing loan's maintenance and capital expenditure covenants. Concurrently, S&P assigned a 'B-' rating to the company's $400 million senior unsecured notes, along with a recovery rating of '6', indicating expectations for negligible (0%-10%) recovery of principal in the event of default. "The ratings on Gymboree reflect what S&P considers a weak business profile, based on its expectation that its expansion of the more value-oriented Crazy 8 concept will increase risk, and that cost pressures from higher cotton prices could affect margins," said Standard & Poor's credit analyst Mariola Borysiak. They also reflect a highly leveraged financial risk profile based on the company's hefty debt levels and thin cash flow protection measures following its acquisition by Bain Capital. Gymboree faces intense competition from department stores, discount stores, and other specialty retail stores. As consumers have become more value oriented, specialty retailers have lost market shares to off-mall value concepts such as Kohl's, Target, Ross, and TJX. Still, Gymboree's focus on quality, frequent newness of its merchandise offering, and distinguished matching collections has resonated well with its customers and enabled the company to establish a niche position in the children's apparel industry. Although comparable same-store sales fell 4% during the third quarter ended Oct. 30, 2010, S&P expects sales to turn positive in the next couple of quarters as the economy continues to recover. HEALTH NET: Fitch Upgrades Issuer Default Rating to 'BB+' --------------------------------------------------------- Fitch Ratings has removed the ratings of Health Net Inc. from Rating Watch Evolving and upgraded the company's Issuer Default Rating to 'BB+' from 'BB-' and the ratings on Health Net's senior unsecured notes to 'BB' from 'B+'. Additionally, Fitch has upgraded the Insurer Financial Strength ratings of Health Net's subsidiaries to 'BBB' from 'BBB-'. The Rating Outlook is Stable. A complete list of ratings is shown at the end of this commentary. The rating actions reflect Fitch's heightened comfort with the profitability of Health Net's TRICARE north region contract renewal with the U.S. Department of Defense, Health Net's solid 2010 earnings performance, and progress the company has made in reducing its financial leverage. Fitch's Stable Outlook considers expectations for continued earnings volatility, including the negative affect of the company's suspension from the Medicare Advantage program. While losses from the disruption and potential fines may be significant, they are not expected to have an impact on Health Net's ratings. The outlook also reflects expectations for stable financial leverage and risk based capital above 200% company action level. Fitch views the TRICARE contract as significant support for Health Net's ratings because it provides roughly half of the company's membership base, and for 2010, was approximately 54% of consolidated pre-tax earnings. The TRICARE contract's current terms create an administrative services only type arrangement, in contrast to the partially underwritten features of Health Net's previous TRICARE contract with the DOD. While Fitch believes that this shift will result in reduced profitability in comparison to the previous TRICARE contract, it views the contract's expected earnings as supportive of Health Net's current ratings. Fitch's expectation is that the contract is likely to generate roughly $100 million to $125 million of annual earnings for the first three years covered under the new contract. Health Net's 2010 financial performance improved markedly relative to previous years. The company reported pre-tax earnings of $331 million in 2010 compared to a $25 million loss in 2009 that was driven by asset impairments and a loss on the sale of the company's Northeast operations. Fitch believes that operating performance in 2010 was bolstered by administrative cost restructuring, lower than expected medical utilization, and favorable prior period reserve development. Health Net also reduced its financial leverage in 2010 as some proceeds received from the December 2009 sale of the company's Northeast operation were used to pay down the company's amortizing bank credit facility. As a result, Health Net's debt-to-capital ratio declined to 19% at year-end 2010 compared to 26% at year-end 2009. The company's cash-flow based financial leverage metrics also improved as Health Net's ratio of debt to earnings before interest, taxes depreciation and amortization improved to 0.7 times at year-end 2010 compared to 8.8x at year-end 2009. Similarly, Health Net's interest coverage ratio improved to 10.5x in 2010 from 0.4x in 2009. Fitch's primary rating concern continues to be the company's declining commercial membership in California, which fell 20% from 2007 through year-end 2010. While some of the loss is attributed to increasing unemployment driven by difficult economic conditions, Fitch is concerned that these losses may be reflective of Health Net's ability to compete in a very competitive California marketplace. Fitch recognizes that more recently, enrollment losses have slowed due in part to administrative cost reductions and new product development. The agency continues to monitor how these efforts affect enrollment. Fitch's view on Health Net also considers operating company capitalization that is lower than most of its health insurance sector peers, and earnings volatility stemming from significant one-time charges. The ratings also consider Health Net's increased geographic concentration in the California market, and its high proportion of underwritten commercial business relative to its peers. Additionally, Fitch considers the affect of health reform to be modestly negative but manageable for the company in the near term. Key ratings drivers that could lead to an upgrade for Health Net include: -- Steady earnings and commercial membership growth; -- Significant capital strengthening with RBC sustained above 300% CAL; -- Greater profitable geographic diversity of the company's premium base. Key ratings drivers that could lead to a downgrade for Health Net include: -- Continued material loss of commercial membership; -- A material fine or charge related to CMS suspension; -- Sustained earnings loss given current capital levels. Fitch has upgraded and assigned Stable Rating Outlooks to these ratings: Health Net Inc. -- Long-term IDR to 'BB+' from 'BB-'; -- 6.375% senior notes due June 2017 to 'BB' 'B+'; Fitch has upgraded these IFS ratings to 'BBB' from 'BBB-': -- Health Net Of California, Inc -- Health Net of Arizona, Inc -- Health Net Plan of Oregon, Inc INTEGRAL NUCLEAR: Back in Chapter 11 After Old Plan Fails --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports Integral Nuclear Associates LLC is back in Chapter 11 after finding itself unable to make payments required under the reorganization plan implemented in September 2009. Integral, based in Paoli, Pennsylvania, was facing a motion for liquidation filed by creditors' representatives in the prior case. Mr. Rochelle recounts that the plan in the prior Chapter 11 case called for paying four primary creditors a total of $13.3 million while general unsecured creditors were to receive another $2.45 million paid over time. In the new case, Integral Nuclear, according to Mr. Rochelle, has a term sheet where Monarch Medical PET Services LLC will buy the business under another Chapter 11 plan by paying about $5 million cash and providing $300,000 in financing. The financing will be deducted from the cash purchase price. The cash will be distributed as specified among creditors from the prior case. The Bloomberg report discloses that Integral blamed the new filing on declining reimbursement rates and the loss of the contract to provide services at Pennsylvania Hospital. The major existing contracts are at New York's Montefiore Medical Center and Georgetown University Hospital in Washington. About Integral Nuclear Based in Paoli, Pennsylvania, Integral Nuclear Associates LLC -- http://www.integralpet.com/-- Integral operates PET and CT scanning facilities in New Jersey, New York, Pennsylvania, Maryland and the District of Columbia. Net revenue in 2010 was $12.9 million. Integral Nuclear and 25 of its affiliates filed for Chapter 11 protection on April 15, 2007 (Bankr. D. N.J. Case Nos. 07-15183 through 07-15215). Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., represented the Debtors. Lawyers at Norris McLaughlin & Marcus, PA, represented the Official Committee of Unsecured Creditors. Integral Nuclear estimated assets and debts of $1 million to $100 million as of the Chapter 11 filing. Integral Nuclear, together with 12 affiliates, returned to Chapter 11 (Bankr. D. N.J. Case No. 11-13066) on Feb. 3, 2011. Ilana Volkov, Esq., at Ryan T. Jareck, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represents the Debtors in the second chapter 11 case. Integral Nuclear estimated assets of up to $10 million and debts of $10 million to $50 million in the second Chapter 11 case. H. BEASLY: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: H. Beasley Enterprises, Inc. 8 Mark Anthony Court Morrisville, PA 19067 Bankruptcy Case No.: 11-10945 Chapter 11 Petition Date: February 9, 2011 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Stephen Raslavich Debtor's Counsel: Richard J. Kwasny, Esq. KWASNY REILLY HAFT & SACCO 53 South Main Street Yardley, PA 19067 Tel: (215) 321-0300 Fax: (215) 321-9336 E-mail: rkwasny@kwasnyreilly.com Scheduled Assets: $12,752 Scheduled Debts: $707,681 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/paeb11-10945.pdf The petition was signed by Henry Beasley, president. HARRINGTON WEST: Plan Filing Exclusivity Extended to June 27 ------------------------------------------------------------ BankruptcyData.com reports that the U.S. Bankruptcy Court approved Harrington West Financial Group's motion seeking to extend the exclusive period that the Company can file a Chapter 11 Plan and solicit acceptances thereof through and including April 8, 2011 and June 7, 2011, respectively. Harrington West Financial Group, Inc. filed a voluntary petition to liquidate its assets under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Calif. Case No. 10-14677) on September 10, 2010. Sharon M. Kopman, Esq., at Landau Gottfried & Berger LLP, in Los Angeles, represents the Debtor. In its schedules, the Debtor disclosed $579,282 in assets and $26,004,000 in liabilities. HARRY & DAVID: Issues Going-Concern Doubt Warning ------------------------------------------------- Harry & David Holdings, Inc., filed its quarterly report on Form 10-Q, disclosing that it was unable to maintain a sufficient available cash balance at December 31, 2010, and to maintain a minimum fixed charge coverage ratio under its $105 million revolving credit facility and, as a result, the Company will not be able to borrow under the facility unless it is amended or the financial covenant non-compliance is waived. The Company reported net income of $13.8 million on $262.1 million of sales for the thirteen weeks ended December 25, 2010, compared with net income of $31.7 million on $267.0 of sales for the thirteen weeks ended December 26, 2009. The Company's balance sheet at December 25, 2010, showed $304.3 million in total assets, $360.8 million in total liabilities, and a stockholders' deficit of $56.5 million. "Based on our current working capital and anticipated working capital requirements, we will not be able to finance continuing operations including servicing its payment obligations under the Senior Notes, without securing new capital and restructuring our obligations. There can be no assurance that our efforts to obtain new capital and restructure our obligations will be successful; and therefore, there is substantial doubt as to our ability to continue as a going concern," the Company said in the filing. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7315 About Harry & David Holdings Harry & David Holdings, Inc. is a multi-channel specialty retailer and producer of branded premium gift-quality fruit and gourmet food products and gifts marketed under the Harry & David(R), Wolferman's(R) and Cushman's(R) brands. The Company has 122 stores across the country. Harry & David has said preliminary financial results for the fiscal 2011 second quarter ended December 25, 2010, were significantly below its expectations. As a result, Harry & David said it has retained Rothschild Inc. as financial advisor and Jones Day as legal advisor to explore recapitalization alternatives. The Company also said that, based on results of operations in the second quarter of this fiscal year, it will not satisfy financial covenants under its credit facility. * * * As reported in the Troubled Company Reporter on January 27, 2011, Moody's Investors Service downgraded Harry & David's Probability of Default and Corporate Family ratings to 'Ca' from 'Caa3'. 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. In January 2011, Standard & Poor's Ratings Services lowered its corporate credit rating (unsolicited) on Harry & David Operations Corp. to 'CC' from 'CCC'. The outlook is negative. Standard & Poor's credit analyst Mariola Borysiak, said "We believe that Harry & David's current capital structure is unsustainable and that the Company will seek to restructure its balance sheet. In our opinion, this could lead to a selective default or a filing for protection under Chapter 11." HD SUPPLY: T. Newnam Resigns; Ledford and Bernasek Fill Vacancy --------------------------------------------------------------- On January 31, 2011, Todd Newnam, a director of HD Supply, Inc. and an appointee to the Company's board of directors of The Carlyle Group resigned from the Board effective as of January 31, 2011. Mr. Newnam's resignation is not the result of any disagreement with the Company. On January 31, 2011, the Board appointed Gregory S. Ledford and Brian Bernasek as directors of the Company. Pursuant to a stockholders agreement between HDS Investment Holding, Inc., the Company's parent company, its equity sponsors and their affiliates and other stockholders of HDS Investment Holding, Inc., Carlyle is entitled to appoint three directors to the Board. Messrs. Ledford and Bernasek were appointed to the Board at the direction of Carlyle to fill the vacancy of Mr. Newnam and the previously disclosed vacancy created by the resignation of Carlyle appointee Daniel Pryor. The Board also elected Mr. Bernasek to serve as a member and the chair of the Audit Committee and a member of the Executive Committee and expects to elect Mr. Bernasek to serve as a member of the Compensation Committee. Mr. Ledford is a managing director of Carlyle. Mr. Ledford joined Carlyle in 1988 and is currently head of the Industrial and Transportation group. Mr. Ledford is also a member of the board of directors of Allison Transmission, Inc., The Hertz Corporation and Veyance Technologies, Inc. Mr. Bernasek is a managing director of Carlyle. Prior to joining Carlyle in 2000, Mr. Bernasek held a position in the Corporate Investment Area of Investcorp International, a private equity firm. Mr. Bernasek is also a member of the board of directors of Allison Transmission, Inc. and The Hertz Corporation. About HD Supply HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the largest North American wholesale distributors supporting residential and non-residential construction and to a lesser extent electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates through approximately 800 locations throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. * * * HD Supply carries 'Caa2' probability of default rating and corporate family rating, with negative outlook, from Moody's Investors Service, and a 'B' corporate credit rating, with negative outlook, from Standard & Poor's Ratings Services. In April 2010, when Moody's downgraded the ratings to 'Caa2' from 'Caa1', it said, "The downgrade results from Moody's views that the construction industry, the main driver of HDS' revenues, will continue to be weak for the foreseeable future, pressuring the company's ability to generate meaningful levels of earnings and free cash flow relative to its debt." HEALTHSOUTH CORP: BlackRock Discloses 9.28% Equity Stake -------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 4, 2011, BlackRock, Inc., disclosed that it beneficially owns 8,675,216 shares of common stock of HealthSouth Corp. representing 9.28% of the shares outstanding. The Company had 93,445,934 shares of common stock outstanding, net of treasury shares, as of October 28, 2010. About HealthSouth Corp. Birmingham, Alabama-based HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. The Company's balance sheet at Sept. 30, 2010, showed $1.79 billion in total assets, $390.0 million in total current liabilities, $1.64 billion in long-term debt, $162.7 million in other long-term liabilities, and a stockholders' deficit of $782.3 million. HealthSouth carries a 'B1' corporate family rating with "stable" outlook, from Moody's. It has 'B+' foreign and local issuer credit ratings, with "positive" outlook, from Standard & Poor's. HF THREE: Files Plan of Reorganization & Disclosure Statement ------------------------------------------------------------- HF Three I, LLC, has filed a Plan of Reorganization and disclosure statement with the U.S. Bankruptcy Court for the District of Arizona. HF Three, LLC, the manager of the Debtor, will continue to own, operate and control the reorganized Debtor. HF Three, LLC, will not receive any compensation for its services. HF Three, LLC, or any subsequent person or persons employed to operate and control the reorganized Debtor post confirmation, will be responsible for preparing and filing quarterly post confirmation financial reports. Copies of those reports will be provided to the United States Trustee's Office. During the term of the Plan and until the Court enters an order closing the case, the Debtor will pay quarterly fees to the United States Trustee's Office. Membership interest in the Debtor will be retained by HF Three, LLC. A copy of the disclosure statement is available for free at: http://bankrupt.com/misc/HFTHREE_DS.pdf Treatment of Claims Classification Treatment -------------- --------- Class 1 - Administrative -- Holders will be paid, in full, on Claims the Effective Date of the Plan of Reorganization from the Debtor's cash funds, or upon other terms as the Debtor and the holders of the claims agree. The claims are not impaired. Class 2 - Priority Claims -- The Debtor doesn't believe that there are any Class II Claims. If there are Class II Claims, holders of the claims will receive full payment of the amount of their claims. Class 3 - Secured Claims -- Holders of the allowed secured claims in any of the Class III subclasses will receive full payment of the amount of their allowed secured claims. Any of the Debtor's defaults and the loan documents with the claimant will be deemed cured as of the Effective Date to the extent such loan documents provide for default resulting from Debtor's bankruptcy filings, default will not be enforceable. Unless otherwise specified, holders of the claims will retain any existing perfected lien to secure the Debtor's obligations under the Plan. Payments to the holders will begin 60 days after the Effective Date. Class 3(a) - Secured Claim -- The holder will receive of Wells Fargo Bank $21,723,957.68 (the full amount of its Allowed Secured Claim), plus interest at the rate of 4.25% per annum from January 1, 2011, until paid in full. The Debtor will pay the claim, plus all interest accrued through December 31, 2013, based upon a 240 month amortization with the first monthly payment due on January 1, 2014. The full amount due to the holder of the claim will be paid on December 31, 2022. To facilitate the development of the Real Property, the Debtor will be entitled to partial releases of the claimants collateral provided that the (i) the Debtor is in compliance with its obligations under the Plan, (ii) the claimant receive all net sale proceeds after costs of sale, and (iii) the sales price is no less than 110% of the amount of the then amount due to the claimant, divided by the number of square feet then securing the claim, multiplied by the number of square feet of the Real Property that the Debtor seeks to sell. Class III(a) is impaired. Class 4 - Holders of Allowed -- will be paid in full, with Class IV Claims interest at the rate of 4.25% per annum. Claimants will receive three equal payments of principal and interest, the first payments will be made on the Effective Date, with the remaining payments due on the same day of the next two years. The claims are impaired. HF Three I LLC is a single-asset real estate company in Paradise Valley, Arizona. It filed for Chapter 11 bankruptcy protection on August 18, 2010 (Bankr. D. Ariz. Case No. 10-26198). The Debtor disclosed $26,830,900 in total assets and $21,749,987 in total liabilities as of the Petition Date. HIGHWAY TRUST FUND: Could be Insolvent Next Fiscal Year ------------------------------------------------------- AASHTO Journal says that the Congressional Budget Office projected in a report released February 2 that the Highway Trust Fund's Highway Account might be unable to meet obligations in a timely manner sometime during Fiscal Year 2012 and the Transit Account will run dry sometime during Fiscal Year 2013. "We appreciate the Congressional Budget Office alerting us as to how long current resources in the Highway Trust Fund can sustain authorized levels of federal assistance," said John Horsley, executive director of the American Association of State Highway and Transportation Officials. "Together with CBO and USDOT, we will be monitoring revenues and outlays in the months ahead to see whether the trust fund will be able to support highway funding all of the way through FY 2012 or not. The encouraging news from CBO is that transit funding looks secure at least until 2013." AASHTO said that the congress authorized transfers of $8 billion in general revenue in FY 2008, $7 billion in FY 2009, and $19.5 billion in FY 2010 to ensure Highway Trust Fund solvency. No General Fund transfers are expected this fiscal year as there is a high enough balance remaining from last year's transfer to keep the fund solvent into next fiscal year. According to AASHTO, CBO projects that consumption of motor fuel in the United States will be relatively stable this year but that receipts from gasoline and diesel taxes (18.4 and 24.4 cents per gallon, respectively) will decrease by 1%. The office forecasts that receipts from fuel taxes that support the Highway Trust Fund will increase by an annual rate of more than 10% in FY 2012 and FY 2013, mostly due to the scheduled 2011 expiration of tax credits for ethanol-blended fuels. Fuel-tax revenue is then expected to grow about 1% annually for the FY 2014-21 period. "This CBO report highlights the need for the enactment of a long- term highway and transit reauthorization that gives states certainty as to the funds they can count on," Mr. Horsley said. HILLARY HARMON: Bankr. Ct. Explains Sanctions Against Lighthouse ---------------------------------------------------------------- In Hillary Durgin Harmon, et al., v. Lighthouse Capital Funding, Inc., Adv. Pro. No. 10-03207 (Bankr. S.D. Tex.), Bankruptcy Judge Marvin Isgur denied Lighthouse Capital Funding, Inc.'s motion for reconsideration of the Court's order imposing an evidentiary sanction against Lighthouse. However, Lighthouse's argument that "the Court failed to provide a clear factual or legal basis for imposing such a severe sanction against [Lighthouse]" should be appropriately addressed. Although the Court did provide the basis for its sanction when it was issued on the record on November 19, 2010, the Court appreciates Lighthouse's desire for greater specificity. The Court finds that its November 19, 2010 sanction of Lighthouse was appropriate, given Lighthouse's unremitting abuse of the discovery process. Pursuant to Federal Rule of Bankruptcy Procedure 7037, the Court properly made an adverse finding that Lighthouse never established the escrow account required by its loan agreement with the Harmons. Hillary Harmon and her husband, Murphey Harmon, initiated the lawsuit against Lighthouse in state court on April 16, 2010. The Harmons removed the lawsuit against Lighthouse to the Bankruptcy Court on May 10, 2010. The Harmons filed their First Amended Complaint on July 8, 2010. The allegations in the Complaint arose out of a mortgage refinancing transaction between the Harmons and Lighthouse. A copy of the Bankruptcy Court's January 26, 2011 Memorandum Opinion is available at http://is.gd/LLCHk1from Leagle.com. About Hillary Harmon Hillary Durgin Harmon in Houston, Texas, filed for Chapter 11 bankruptcy (Bankr. S.D. Tex. Case No. 10-33789) on May 4, 2010. Leonard H Simon, Esq., at Pendergraft & Simon LLP, serves as the Debtor's counsel. In her petition, the Debtor estimated $1 million to $10 million in assets and debts. HOVNANIAN ENTERPRISES: Offers $155MM Notes & $47MM of Securities ---------------------------------------------------------------- On February 4, 2011, K. Hovnanian Enterprises, Inc. said that it is offering $155 million 11.875% Senior Notes due 2015 guaranteed by Hovnanian Enterprises, Inc. commencing April 15, 2011. Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC serve as book-runners of the offering. A full-text copy of the prospectus is available for free at: http://ResearchArchives.com/t/s?7313 In a separate free writing prospectus, Hovnanian Enterprises, Inc. said it is offering 11.75 million shares of of Class A common stock of Hovnanian Enterprises, Inc. and 3 million 7.25% Tangible Equity Units of Hovnanian Enterprises, Inc. and K. Hovnanian Enterprises, Inc. The net proceeds from the sale of Class A Common Stock in the Common Stock Offering, after deducting the underwriting discount and estimated offering expenses, will be approximately $47.7 million. The joint book-running managers of the offering are J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc. Wells Fargo Securities, LLC serves as co-manager. http://ResearchArchives.com/t/s?731b About Hovnanian Enterprises Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV) -- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian, is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes, Oster Homes and CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. The Company's balance sheet at Oct. 31, 2010, showed $1.82 billion in total assets, $2.15 billion in total liabilities, and a stockholders' deficit of $337.94 million. * * * As reported in February 3, 2011 edition of the TCR, Fitch Ratings has assigned a 'C/RR6' rating to Hovnanian Enterprises, Inc.'s proposed offering of $150 million of senior unsecured notes due 2015. The issue will be ranked on a pari passu basis with all other senior unsecured debt. As reported by the TCR on February 2, 2011, Moody's Investors Service assigned a Caa2 rating to Hovnanian Enterprises' proposed $150 million senior unsecured note offering due 2015, proceeds of which will be used to retire a like amount of existing senior unsecured and senior subordinated notes. At the same time, Moody's affirmed the company's Caa1 corporate family and probability of default ratings, B1 rating on the first lien senior secured notes, Caa1 rating on the second and third lien senior secured notes, Caa2 rating on the senior unsecured notes, Ca rating on the preferred stock, and SGL-3 speculative grade liquidity rating. The Caa3 rating on the existing senior subordinated notes will be withdrawn upon repayment with the proceeds of this offering. The outlook remains negative. As reported in the September 16, 2010 edition of the TCR, Standard & Poor's Ratings Services affirmed its 'CCC+' corporate credit ratings on Hovnanian Enterprises Inc., and its subsidiary, K. Hovnanian Enterprises Inc. S&P also affirmed its ratings on the companies' debt and preferred stock. S&P revised its outlooks on the companies to negative from developing. "Our rating on Hovnanian reflects the company's very weak credit metrics, including an over-leveraged balance sheet, and its expectation that a return to profitability is likely beyond 2011," said Standard & Poor's credit analyst George Skoufis. "Profitability could be delayed further if the struggling housing recovery continues to face hurdles." HP DISTRIBUTION: Must Decide on Teletrac Deal for GPS Units ----------------------------------------------------------- Chief Bankruptcy Judge Robert E. Nugent, at Teletrac, Inc.'s behest, directed HP Distribution, LLP, to make a decision whether to assume or reject the airtime service portion of the parties' agreements related to 82 GPS units that the Debtor utilizes to track its trucks in its transportation operations, not later than February 15, and in accordance with 11 U.S.C. Sec. 365(b)(1) cure the airtime charge arrearage or provide adequate assurance to Teletrac that it can promptly effect that cure. HP has made no payments of any kind since filing for bankruptcy. HP must pay pre- and post-petition arrearage of eight months airtime (February 2010 September 2010) for all 82 units and adequately assure Teletrac and the Court that it can continue to make the remaining payments due. The three Agreements were signed in 2006, 2007 and 2008 and their base terms have expired or will shortly. The Agreements automatically renew and HP continues to use the airtime services. Airtime due through September 2010 is $30,832 (8 months x 82 units x $47). A copy of the Court's January 25, 2011 Memorandum Opinion is available at http://is.gd/aQncMJfrom Leagle.com. Hitchin Post Steak Co. is a decade-old meat processor based in Kansas City, Kan. Hitchin Post and HP Distribution, Inc., filed for Chapter 11 bankruptcy protection (Bankr. D. Kan. Case No. 09-12308) on July 21, 2009. Mark J. Lazzo, Esq., in Wichita, Kan., serves as bankruptcy counsel. Hitchin estimated less than $50,000 in assets and $1 million to $10 million in debts at the time of the filing. IMAGE METRICS: Buys Big Stage Assets for 2-Mil. Shares ------------------------------------------------------ On January 31, 2011, pursuant to an Asset Purchase Agreement, dated as of December 30, 2010, as amended, Image Metrics, Inc. purchased specified technology and intellectual property related assets of Big Stage Entertainment, Inc., for an aggregate of 2,000,000 shares of the Company's common stock, the assumption of [$575,343] of Big Stage bank debt and the payment of approximately $85,000 of deal-related expenses on behalf of Big Stage. The purchase price was determined as a result of arm's-length negotiations between the parties. The Company did not acquire all of the assets or business previously conducted by Big Stage, or any of its employees. Big Stage developed technologies for the creation of three- dimensional facial models for use in television, video games and consumer markets. The Company intends to use the acquired technology assets to complement aspects of its facial animation software platform. Big Stage did not have any material relationship or association with the Company prior to the acquisition. The 2,000,000 shares of the Company's common stock were issued in the acquisition pursuant to an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended. A full-text copy of the Agreement is available for free at: http://ResearchArchives.com/t/s?7311 About Image Metrics Santa Monica, Calif.-based Image Metrics Inc., formerly International Cellular Accessories, Inc., is a global provider of technology-based facial animation services to the interactive entertainment and film industries. On March 10, 2010, the Company acquired through an exchange offer all of the outstanding ordinary shares and preferred shares of Image Metrics Limited, a private company incorporated in England and Wales, in exchange for 11,851,637 shares of its common stock, par value $.001 per share. The historical consolidated financial statements of the Company do not include the operations of International Cellular Accessories prior to March 10, 2010, but only reflect the operations of Image Metrics Limited and its subsidiary. The Company's balance sheet as of June 30, 2010, showed $1.2 million in total assets, $10.0 million in total liabilities, and a stockholders' deficit of $8.8 million. The Company has incurred significant operating losses and has accumulated a $32.7 million deficit as of June 30, 2010. The Company said in its Form 10-Q for the quarter ended June 30, 2010 that its ability to continue as a going concern is dependent upon it being able to successfully raise further capital through equity or debt financing and continued improvement of its results of operations. INCENTIUM LLC: Ceases Business Operations ----------------------------------------- The Chattanooga Times Free Press reports that Incentium LLC, formerly known as VIPGift, has announced on its Web site that it had ended business operations. The Times Free Press relates that Incentium said "difficult business and economic conditions" had forced the firm to "permanently cease all business operations effective February 9, 2011." The company said its assets "will be liquidated in an orderly manner for the benefit of its creditors." Incentium LLC, formerly VIPGift, provides employee, customer, and sales channel incentive and loyalty programs to the Fortune 500 and top tier emerging businesses. The Company is backed by Summit Partners, a private equity growth fund with more than $11 billion in capital, and Bridgescale Partners, a private equity and venture capital fund focusing on late-stage, technology-enabled companies. Incentium was founded as VIPGift in 2000 and is based in Chattanooga, Tennessee with offices throughout the U.S. INTERNATIONAL GARDEN: Gets Court's Nod to Amend DIP Financing Pact ------------------------------------------------------------------ International Garden Products, Inc., et al., sought and obtained authorization from the Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to amend the senior secured, superpriority postpetition credit agreement the Debtors entered into with a syndicate of lenders led by Harris N.A., as administrative agent. As reported by the Troubled Company Reporter on November 17, 2010, the Court, in a final order, authorized the Debtors to obtain postpetition secured financing from the DIP Lenders. The Debtors were indebted to prepetition $30,669,990 in revolving loans and $13,000,000 in term loans. As reported in the Troubled Company Reporter on October 13, 2010, the DIP lenders have committed to provide up to $7.5 million postpetition revolving line of credit. To secure the prepetition liabilities, the Debtors granted security interests and liens to the prepetition secured parties upon all of the Debtors assets and property. The Debtors and the DIP Lenders have agreed to increase the aggregate amount of the DIP revolving credit commitments, amend the availability limit, approve the cash flow forecast for the period ending on or about March 31, 2011, and amend certain other provisions of the DIP Credit Agreement. A copy of the amendment is available for free at: http://bankrupt.com/misc/INTERNATIONAL_GARDEN_diploanamendment.pdf The definition of Availability Limit and DIP Revolving Credit Commitments are amended and restated in their entirety to read as: "Availability Limit" means, unless otherwise consented to in writing by 100% of the DIP Lenders, (a) $2,750,000 from the Petition Date through and including 10/31/10; (b) $4,750,000 from 11/01/10 through and including 11/30/10; (c) $7,250,000 from 12/01/10 through and including 12/31/10; (d) $7,750,000 from 01/01/11 through and including 01/31/11; (e) $8,500,000 from 02/01/11 through and including 02/28/11; (f) $8,800,000 from 03/01/11 through and including 04/28/11; (g) $7,500,000 from 04/29/11 through and including 05/26/11, and (h) $1,500,000 from 05/27/11 through and including the Maturity Date. "DIP Revolving Credit Commitment" means, as to any DIP Lender, the obligation of the DIP Lender to make DIP Loans and to participate in Letters of Credit issued to or for the account of any borrower. The borrowers and the DIP Lenders acknowledge and agree that the DIP Revolving Credit Commitments of the DIP Lenders aggregate $8,800,000. On the First Amendment Effective Date, the DIP Commitments of each DIP Lender will be amended to be as: DIP Revolving Credit Name of Dip Lender Commitments ------------------ -------------------- Harris N.A. $3,206,779.65 MFC Capital Funding, Inc. $2,237,288.13 U.S. Bank National Association $2,237,288.13 Bank of the West $1,118,644.09 TOTAL $8,800,000.00 About International Garden Products International Garden Products, Inc. was incorporated in 1996 as a holding company for Iseli Nursery, Inc., California Nursery Supply, Weeks Wholesale Rose Grower, and Old Skagit, Inc. The company's operating businesses, Iseli and Weeks, focus primarily on growing horticultural products for nationwide sale to independent garden centers, landscape suppliers, landscapers and similar parties. Iseli's is known in the industry as the premium source of dwarf conifers, Japanese maples and unique companion plants. Weeks is one of the largest wholesale breeders and growers of premium roses in the U.S. International Garden Products, Inc., and its affiliates filed for Chapter 11 protection on Oct. 4, 2010 (Bankr. Lead Case No. 10- 13207). International Garden estimated assets and debts at $10 million to $50 million in its Chapter 11 petition. Andrew R. Remming, Esq., at Morris, Nichols, Arsht & Tunnell, serves as bankruptcy counsel. Bryan Cave LLP is the legal counsel. FTI Consulting is the restructuring advisor. Garden City Group is the claims and notice agent. The debtor-affiliates are Weeks Wholesale Rose Grower (Bankr. D. Del. Case No. 10-13208), California Nursery Supply (Case No. 10- 13209), Iseli Nursery, Inc. (Case No. 10-13210), and Old Skagit, Inc. (Case No. 10-13211). ISC BUILDING: To Seek Plan Confirmation --------------------------------------- American Bankruptcy Institute reports that ISC Building Materials Inc. is seeking confirmation of its plan after selling some of its assets. Creditors are due to send in their votes on the Plan by 5:00 p.m. on February 14, 2011. In December, the Debtor filed a Chapter 11 plan that called for sale of the Debtor's assets in 2 lots, the proceeds of which were to be utilized to retire administrative claims and pay off the secured claims of Comerica Bank. The estimated return to unsecured creditors was to be at least 6% and was subject to an auction process that might improve that return. On January 21, 2011, the Debtor and the Official Committee of Unsecured Creditors reached an accord on amending the terms of the Debtor's original Plan of Reorganization. Under this accord, Allan Burns, and his family, will have the opportunity to bid against third parties to retain the assets of the company and reorganize the business. In return, the Family has offered, in essence, to make the future tax benefit of the accumulate Net Operating Losses available as additional dividend to the Unsecured Creditors. If the Family Group submits a bid and qualifies to be a bidder, the Burns Family Group will begin its bidding with a bid of cash and property sufficient to pay all senior claims and to pay the Unsecured Creditors at least 6% in cash and an additional 38% in the form of five-year bonds payable with 1.25% interest. After the close of bidding, the Unsecured Creditors Committee will choose between the best cash sale alternative and the best and final offer of the Burns Family Group. The Debtor expects that recovery for unsecured creditors will be at or above 6% of the amount of allowed claims. Copies of the Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/ISCBUILDING_amendedplan.pdf http://bankrupt.com/misc/ISCBuilding_AmendedDS.pdf 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 Chapter 11 filing. The Official Committee of Unsecured Creditors in the Chapter 11 Has tapped Conway MacKenzie, Inc., as its financial advisors and Okin Adams & Kilmer LLP as counsel. ISLAND ONE: Seeks Nod to Delay Auction Until March 10 ----------------------------------------------------- The hearing to consider the motion of Island One, Inc., et al., to (a) modify the Bid Procedures Order to extend the sale/auction date and to re-set related dates and deadlines, (b) reschedule he confirmation hearing on the Debtors' proposed amended joint plan of reorganization, and (c) further extend the Debtors' exclusivity periods to file a plan of reorganization and to obtain acceptances in order to accommodate the parties' new proposed sale and confirmation timetable, will be held on February 16, 2011 at 10:15 a.m. On December 15, 2010, the Court entered the Bid Procedures Order establishing January 12, 2011, as the date on which some or all of the Debtors' assets and equity would be auctioned or sold. Following extensive consultations, the Debtors and their secured lenders BB&T Acquired Asset Group, Textron Financial Corp., and Liberty Bank, NA, have mutually agreed to extend the auction date contemplated in the Bid Procedures Order to March 10, 2011, in order to afford the estate constituencies additional time to evaluate a multitude of sale-related options and alternatives. The Bid Procedures Order also established February 16, 2011, at 10:15 (EST) as the date for consideration of approval of the prevailing auction bid and confirmation of the Debtors' Modified Chapter 11 Plan. The Debtors, Textron, BB&T, and Liberty have mutually agreed that it is appropriate to adjourn the date and time of the confirmation hearing in order to afford the estate constituencies additional time to effectuate the sale process and to revise the joint plan to reflect the results of the auction once concluded. As such, the Debtors believe rescheduling the February 16, 2011 confirmation hearing and re-setting related dates and deadlines is in the best interests of the Debtors, their estates, and estate constituencies. The Debtors, Textron, BB&T and Liberty therefore request that the Court approve the following amended sale/confirmation and exclusivity timeline: Event Proposed Date ----- ------------- Letter of Interest Deadline February 24, 2011 Bid Deadline March 4, 2011 Evaluation of Qualifying Bids Deadline March 8, 2011 Debtors conduct and complete the Auction March 10, 2011 Debtors exclusivity deadline to file amended joint plan and disclosure statement March 17, 2011 Exclusivity for Acceptance Confirmation hearing The Creditors' Committee is not consenting to the timeline proposed at this juncture. About Island One Orlando, Florida-based Island One, Inc., filed for Chapter 11 bankruptcy protection on September 10, 2010 (Bankr. M.D. Fla. Case No. 10-16177). Tiffany D. Payne, Esq., Elizabeth A. Green, Esq., and Jimmy D. Parrish, Esq., at Baker & Hostetler LLP, in Orlando Fla., represent the Debtors as counsel. In its schedules, the Debtor disclosed $155,100,767 in assets and $310,897,452 in liabilities. IOI Funding I, LLC, a debtor-affiliate, filed for Chapter 11 bankruptcy protection on September 10, 2010 (Bankr. M.D. Fla. Case No. 10-16189). The Debtor disclosed total assets of $9,230,309, and total liabilities of $7,265,160. The Official Committee of Unsecured Creditors in the Chapter 11 cases of Island One, Inc. has tapped Adam Lawton Alpert, Esq., a shareholder, and Bush Ross, P.A. as its general counsel. ISTAR FINANCIAL: BlackRock Discloses 5.85% Equity Stake ------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 4, 2011, BlackRock, Inc. disclosed that it beneficially owns 5,400,922 shares of common stock of iStar Financial Inc. representing 5.85% of the shares outstanding. As of October 29, 2010, there were 92,318,899 shares of common stock, $0.001 par value per share, of iStar Financial Inc. outstanding. About iStar Financial New York-based iStar Financial Inc. (NYSE: SFI) provides custom- tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust, provides innovative and value added financing solutions to its customers. The Company's balance sheet at Sept. 30, 2010, showed $10.47 billion in total assets, $8.70 billion in total liabilities, and stockholders' equity of $1.76 billion. * * * iStar carries a 'C' issuer default rating from Fitch Ratings Services. Fitch lowered, among other things, the IDR from 'CC' to 'C' in October 2010, noting that there is substantial amount of debt maturities in the second quarter of 2011, consisting primarily of a second lien term loan and second lien revolving credit agreement in aggregate amounting to approximately $1.7 billion, and an unsecured revolving credit facility of approximately $500 million. In order to avoid maturity defaults on the second lien obligations and unsecured revolving credit facility due June 2011, a coercive debt exchange would need to be effected, whereby the company negotiates with certain of its debt holders a material reduction in terms to avert bankruptcy, Fitch said. In July 2010, Standard & Poor's Ratings Services lowered its long- term counterparty credit rating on iStar Financial to 'CCC' from 'B-'. The outlook is negative. iStar's limited funding flexibility and the severe credit quality deterioration in its loan portfolio continue to put negative pressure on the rating, S&P said. ISTAR FINANCIAL: Johnsons' Equity Stake Down to 15,500 Shares ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 4, 2011, each of Franklin Resources, Inc., Charles B. Johnson and Rupert H. Johnson, Jr. disclosed beneficial ownership of 15,500 shares of common stock of iStar Financial Inc. representing 0.0% of the shares outstanding. As of October 29, 2010, there were 92,318,899 shares of common stock, $0.001 par value per share, of iStar Financial Inc. outstanding. About iStar Financial New York-based iStar Financial Inc. (NYSE: SFI) provides custom- tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust, provides innovative and value added financing solutions to its customers. The Company's balance sheet at Sept. 30, 2010, showed $10.47 billion in total assets, $8.70 billion in total liabilities, and stockholders' equity of $1.76 billion. * * * iStar carries a 'C' issuer default rating from Fitch Ratings Services. Fitch lowered, among other things, the IDR from 'CC' to 'C' in October 2010, noting that there is substantial amount of debt maturities in the second quarter of 2011, consisting primarily of a second lien term loan and second lien revolving credit agreement in aggregate amounting to approximately $1.7 billion, and an unsecured revolving credit facility of approximately $500 million. In order to avoid maturity defaults on the second lien obligations and unsecured revolving credit facility due June 2011, a coercive debt exchange would need to be effected, whereby the company negotiates with certain of its debt holders a material reduction in terms to avert bankruptcy, Fitch said. In July 2010, Standard & Poor's Ratings Services lowered its long- term counterparty credit rating on iStar Financial to 'CCC' from 'B-'. The outlook is negative. iStar's limited funding flexibility and the severe credit quality deterioration in its loan portfolio continue to put negative pressure on the rating, S&P said. JDE FLORIDA: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: JDE Florida LLC P.O. Box 16282 Tampa, FL 33687 Bankruptcy Case No.: 11-02168 Chapter 11 Petition Date: February 8, 2011 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: K. Rodney May Debtor's Counsel: Jay B. Verona, Esq. ENGLANDER AND FISCHER, LLP 721 1st Avenue North St. Petersburg, FL 33701 Tel: (727) 898-7210 Fax: (727) 898-7218 E-mail: jverona@eandflaw.com Estimated Assets: $0 to $50,000 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/flmb11-02168.pdf The petition was signed by J. David Ewing, managing member. JENNIFER CONVERTIBLES: Court Signs Order Confirming Exit Plan ------------------------------------------------------------- Dow Jones' DBR Small Cap reports that a bankruptcy judge gave his full stamp of approval to Jennifer Convertibles Inc.'s Chapter 11 plan of reorganization, paving the way for the furniture retailer to emerge from bankruptcy under the control of its Chinese supplier. The report relates that Judge Allan L. Gropper of the U.S. Bankruptcy Court in Manhattan had indicated that he would confirm the plan as long as Jennifer could overcome a concern raised by supplier Ashley HomeStores Ltd. Court papers show the judge officially signed off on the plan Tuesday in an order that was filed to the docket, DBR discloses. Under the plan, the report relates, Haining Mengnu Group Co. of China--Jennifer's biggest creditor and primary furniture supplier--would swap its unsecured claim for 90.1% of the retailer's new common stock. Mengnu, owed more than $16 million, will also receive $4.5 million in new notes and 30% of a trust set up to pursue litigation on Jennifer's behalf, the report adds. About Jennifer Convertibles Jennifer Convertibles, Inc., was organized as a Delaware corporation in 1986, and is 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., Jordanna L. Nadritch, Esq., and Jayme Bethel, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky, LLP, assist 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 million to $50 million as of the Petition Date. JETBLUE AIRWAYS: BlackRock Discloses 6.66% Equity Stake ------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 4, 2011, BlackRock, Inc., disclosed that it beneficially owns 19,572,577 shares of common stock of JetBlue Airways Corp. representing 6.66% of the shares outstanding. As of September 30, 2010, there were 293,849,319 shares outstanding of the Company's common stock, par value $.01. About JetBlue Airways JetBlue Airways Corp., based in Forest Hills, New York, operates a low-cost, point-to-point airline from a hub in New York. JetBlue serves 60 cities with 600 daily non-stop flights. The Company reported $6.618 billion in total assets, $1.126 billion in total current liabilities, $2.88 billion long- term debt and capital lease obligations, $531 million construction obligation, $458 million deferred taxes, and stockholders' equity of $1.623 billion, as of Sept. 30, 2010. * * * JetBlue carries 'Caa1' long term corporate family and probability of default ratings, with positive outlook, from Moody's. It has a 'B-' long term issuer default rating, with stable outlook, from Fitch. It also has a 'B-' issuer credit ratings from Standard & Poor's. In November 2010, Standard & Poor's Ratings Services affirmed its ratings, including its 'B-' corporate credit rating, on Forest Hills, New York-based JetBlue Airways Corp. At the same time, S&P revised its outlook on the rating to positive from stable. The recovery rating on senior unsecured debt remains '6', indicating S&P's expectations of a negligible (0%-10%) recovery in a default scenario. S&P noted that while JetBlue has been profitable in six of the last seven quarters, its financial profile remains highly leveraged, with EBITDA interest coverage of 2.5x, funds flow to debt of 15.7%, and debt to capital of 75.2%. JUNCO STEEL: Steel Products Maker in Chapter 11 ----------------------------------------------- Carla Main at Bloomberg News reports that Junco Steel Corp., a Bayamon, Puerto Rico-based steel products maker, has commenced a Chapter 11 case. According to the report, Banco Popular de Puerto Rico holds a $6.1 million secured claim. Junco Steel filed for Chapter 11 protection (Bankr. D. P.R. Case No. 11-00827) on Feb. 2, 2011, estimating assets of less than $50,000 and debts of up to $50,000,000. Carmen D. Conde Torres, Esq., in San Juan, Puerto, Rico, represents the Debtor. KRATOS DEFENSE: S&P Puts 'B+' Rating on CreditWatch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services said that it has placed its ratings, including the 'B+' corporate credit rating, on Kratos Defense & Security Solutions Inc. on CreditWatch with negative implications. "On Feb. 7, 2011, Kratos announced it had agreed to acquire Herley Industries Inc. for $270 million plus fees and expenses," said Standard & Poor's credit analyst Christopher DeNicolo. "This would be the firm's largest acquisition to-date." Kratos plans to finance the transaction with the proceeds from a recent stock offering (around $56 million, not including the possible issuance of additional shares via a greenshoe option), an add-on to the existing 10% secured notes due 2017, and cash on hand at Herley. Debt to EBITDA pro forma for the Herley acquisition (as well as other acquisitions completed in 2010) is around 5x compared with S&P's previous expectations of 4.0x-4.5x. Herley, which had $188 million of revenues in fiscal 2010 (ended Aug. 1, 2010), is a leading provider of electronic systems, subsystems, and components, specializing in microwave and millimeter wave technology for defense applications, especially electronic warfare. The acquisition will improve Kratos' program and product diversity, as well as complementing some of the platforms it currently supports. "S&P plans to meet with management to get further details on the transaction in order to evaluate the impact of the proposed acquisition on Kratos business and financial risk profile to determine if a downgrade is warranted," Mr. DeNicolo continued. "S&P will also evaluate the impact of the additional debt on the issue-level and recovery ratings on the secured notes." LACK'S STORES: US Trustee Forms Five-Member Creditor's Committee ---------------------------------------------------------------- Judy A. Robbins, the U.S. Trustee for Region 7, appointed five creditors to serve on the Official Committee of Unsecured Creditors of Lack's Stores Inc. and its debtor-affiliates. The members of the Committee are: a) Sealy Mattress Company Attn: Mike Murray One Office Parkway at Sealy Dr. Trinity, NC 27370 Tel.: 336-861-3699 Fax: 336-861-3863 E-Mail: mmurray@sealy.com Counsel for member: Womble Carlyle Sandridge & Rice, P.L.L.C. Attn: William B. Sullivan, Esq. One West Fourth St. Winston-Salem, NC 27101 Tel.: 336-721-3506 Fax: 336-733-8365 E-Mail: wsullivan@wcsr.com b) Furniture Brands International Attn: Jeff Schnurbusch 1 North Brentwood Blvd. St. Louis, MO 63105 Tel.: 314-726-8532 Fax: 828-434-9198 E-Mail:jschnurbusch@furniturebrands.com Counsel for member: Tartone Enterprises, Inc. Attn: Frank Chen 5055 South Loop East Houston, TX 77033 Tel.: 713-734-6888 Fax: 713-728-7648 E-Mail: fchen8@hotmail.com c) Diamond McCarthy, L.L.P. Attn: Brian A. Abramson, Esq. 909 Fannin, 15th Floor Houston, TX 77010 Tel.: 713-333-5145 Fax: 713-333-5195 E-Mail: babramson@diamondmccarthy.com d) Najarian Furniture Co., Inc. Attn: George Najarian 17560 E. Rowland St. City of Industry, CA 91748 Tel.: 626-839-8700 Fax: 626-839-8715 E-Mail: gn@najarianfurniture.com e) Ryder Integrated Logistics, Inc. Attn: Mike Mandell 11690 NW 105th St. Miami, FL 33178 Tel.: 305-500-4417 Fax: 305-500-3336 E-Mail: mike_mandell@ryder.com Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Victoria, Texas-based Lack's Stores, Incorporated, is one of the largest, independently-owned retail furniture chains in the United States. Lack's Stores is a chain of 36 retail stores and operates under the trade styles Lacks and Lacks Home Furnishings. The Company sells a complete line of furnishings for the home including furniture, bedding, major appliances and home electronics. The stores are located in South, Central, and West Texas. Lack's Stores and its affiliates filed for Chapter 11 bankruptcy protection on November 16, 2010 (Bankr. S.D. Tex. Lead Case No. 10-60149). The Debtor estimated its assets and debts at $100 million to $500 million. Katherine D. Grissel, Esq., Michaela Christine Crocker, Esq., and Richard H. London, Esq., at Vinson & Elkins LLP, serve as counsel to the Debtor. Huron Consulting Group, Inc., is the financial advisor. LACK'S STORES: Files Schedules of Assets and Liabilities -------------------------------------------------------- Lack's Stores Incorporated and its debtor-affiliates filed with the U.S. Bankruptcy Court for the Southern District of Texas their schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ----------- A. Real Property B. Personal Property $182,023,008 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $106,414,983 E. Creditors Holding Unsecured Priority Claims $469,000 F. Creditors Holding Unsecured Non-priority Claims $29,929,120 ------------ ------------ TOTAL $182,023,008 $136,813,103 A full-text copy of the Schedules of Assets & Liabilities is available for free at http://ResearchArchives.com/t/s?731c Victoria, Texas-based Lack's Stores, Incorporated, is one of the largest, independently-owned retail furniture chains in the United States. Lack's Stores is a chain of 36 retail stores and operates under the trade styles Lacks and Lacks Home Furnishings. The Company sells a complete line of furnishings for the home including furniture, bedding, major appliances and home electronics. The stores are located in South, Central, and West Texas. Lack's Stores and its affiliates filed for Chapter 11 bankruptcy protection on November 16, 2010 (Bankr. S.D. Tex. Lead Case No. 10-60149). The Debtor estimated its assets and debts at $100 million to $500 million. Katherine D. Grissel, Esq., Michaela Christine Crocker, Esq., and Richard H. London, Esq., at Vinson & Elkins LLP, serve as counsel to the Debtor. Huron Consulting Group, Inc., is the financial advisor. LOCAL INSIGHT: Directory Distributing Quits From Creditors Panel ---------------------------------------------------------------- Directory Distributing Associates, Inc. voluntarily resigned from the official committee of unsecured creditors in the bankruptcy cases of Local Insight Media Holdings, Inc., et al., effective January 27, 2011. The Committee now consists of: 1. U.S. Bank National Attn: Timothy Sandell 60 Livingston Avenue St. Paul, MN 55107-2292 Phone: 651-495-3959 Fax: 651-495-8100 2. Bain & Company, Inc. Attn: Diane Fernandes 131 Dartmouth Street Boston, MA 02116 Phone: 617-572-2286 Fax: 617-880-0286 3. Quadgraphics, Inc. Attn: Patricia A. Rydzik N63 W23075 State Hwy 74 Sussex WI 53089-2827 Phone: 414-566-2127 Fax: 414-566-9415 4. Marchex Sales, Inc. 520 Pike Street, Ste. 2000 Seattle, WA 98101 Phone: 206-331-3310 Fax: 206-331-3696 About Local Insight Media Holdings Wilmington, Delaware-based Local Insight Media Holdings, Inc., is a publisher of print and online yellow page directories in the United States. It filed for Chapter 11 bankruptcy protection on (Bankr. D. Del. Case No. 10-13677) on November 17, 2010. Affiliates Local Insight Media Holdings II, Inc. (Bankr. D. Del. Case No. 10-13679), Local Insight Media Holdings III, Inc. (Bankr. D. Del. Case No. 10-13682), LIM Finance Holdings, Inc. (Bankr. D. Del. Case No. 10-13680), LIM Finance, Inc. (Bankr. D. Del. Case No. 10-13681), LIM Finance II, Inc. (Bankr. D. Del. Case No. 10-13687), Local Insight Regatta Holdings, Inc. (Bankr. D. Del. Case No. 10-13686), The Berry Company LLC (Bankr. D. Del. Case No. 10-13678), Local Insight Listing Management, Inc. (Bankr. D. Del. Case No. 10-13685), Regatta Investor Holdings, Inc. (Bankr. D. Del. Case No. 10-13725), Regatta Investor Holdings II, Inc. (Bankr. D. Del. Case No. 10-13741), Regatta Investor LLC (Bankr. D. Del. Case No. 10-13684), Regatta Split-off I LLC (Bankr. D. Del. Case No. 10-13721), Regatta Split-off II LLC (Bankr. D. Del. Case No. 10-13753), Regatta Split-off III LLC (Bankr. D. Del. Case No. 10-13737), Regatta Holding I, L.P. (Bankr. D. Del. Case No. 10-13748), Regatta Holding II, L.P. (Bankr. D. Del. Case No. 10-13715), and Regatta Holding III, L.P. (Bankr. D. Del. Case No. 10-13745) filed separate Chapter 11 petitions. Richard M. Cieri, Esq., Christopher J. Marcus, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis LLP, assist the Debtors in their restructuring efforts. Curtis A. Hehn, Esq., Laura Davis Jones, Esq., and Michael Seidl, Esq., at Pachulski Stang Ziehl & Jones LLP, are the Debtors' co-counsel. The Debtors' investment banker and financial advisor is Lazard Freres & Co. LLC. The Debtors' independent auditor is Deloitte & Touche LLP. The Debtors' interim management and restructuring advisors are Alvarez & Marsal North America, LLC, and Avarez & Marsal Private Equity Performance Improvement Group, LLC. Kurtzman Carson Consultants LLC is the Debtors' notice and claims agent. Local Insight Media Holdings estimated assets of less than $50,000 and liabilities of $100 million to $500 million in its Chapter 11 petition. Local Insight Regatta reported consolidated assets of $796,270,000 against consolidated debts of $669,612,000 as of September 30, 2010, according to its Form 10-Q filed with the Securities and Exchange Commission. LOEHMANN'S HOLDINGS: Plan Approved Subject to Changes ----------------------------------------------------- Tiffany Kary at Bloomberg News reports that U.S. Bankruptcy Judge Robert Gerber in New York on February 7 approved the Loehmann's Holdings Inc.'s bankruptcy exit plan subject to final wording and paperwork on a $45 million exit financing commitment. Loehmann's lawyer Frank Oswald told Judge Gerber that papers on the exit financing will be ready by February 8. "Congratulations to you on a very constructive and cooperative plan," the judge said. Loehmann's expects to exit bankruptcy by March 1. As part of the Joint Plan of Reorganization, the Company will receive a $25 million capital infusion upon Chapter 11 emergence through a rights offering to the Company's senior secured Class A Noteholders, which is being backstopped by Istithmar World and Whippoorwill Associates, Inc. Under the terms of the global settlement agreement between the parties, general unsecured creditors will receive a pro rata distribution consisting of cash in the aggregate amount of $2 million. About Loehmann's Holdings Bronx, New York-based Loehmann's Holdings, Inc., is a discount retailer with more than 60 stores. The Bronx, New York-based company is owned indirectly by Istithmar PJSC, an investment firm owned by the government of Dubai. Loehmann's filed for Chapter 11 bankruptcy protection on November 15, 2010 (Bankr. S.D.N.Y. Case No. 10-16077). It estimated its assets and debts at $100 million to $500 million. Affiliates Loehmann's Inc. (Bankr. S.D.N.Y. Case No. 10-16078), Loehmann's Operating Co. (Bankr. S.D.N.Y. Case No. 10-16079), Loehmann's Real Estate Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16080), and Loehmann's Capital Corp. (Bankr. S.D.N.Y. Case No. 10-16081) filed separate Chapter 11 petitions. Frank A. Oswald, Esq., at Togut, Segal & Segal LLP, assist the Debtors in their restructuring efforts. Perella Weinberg Partners LP is the Debtors' investment banker and financial advisor. Clear Thinking Group LLC is the Debtors' restructuring adviser. Troutman Sanders LLP is the Debtor's special corporate counsel. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Mark S. Indelicato, Esq., Mark T. Power, Esq., and Janine M. Cerbone, Esq., at Hahn & Hessen LLP, in New York, serve as counsel for the Official Committee of Unsecured Creditors. LOGAN JOHNSTON: Court to Hold Further Briefing in Sternberg Case ---------------------------------------------------------------- Bankruptcy Judge Sarah Sharer Curley held that further briefing is necessary before it can enter a ruling on narrow issues presented in the suit, Logan T. Johnston III, v. Paula Parker, et al., Adv. Pro. No. 01-885 (Bankr. D. Ariz.). Mr. Johnston's counsel is asking the Court to consider whether counsel may recover a discretionary award of his attorneys' fees under the Court's inherent civil contempt power, which allows for the imposition of sanctions, including attorneys' fees, for violations of the automatic stay. Melvin Sternberg, the remaining defendant in the adversary proceeding, has filed a motion for partial summary judgment. The Bankruptcy Court directed Mr. Johnston's counsel to file an exhibit by February 11 outlining attorneys' fees of his firm. Mr. Sternberg and his counsel are to file by February 25 an exhibit accepting the attorneys' fees outlined by Mr. Johnston's counsel, or outlining to which attorneys' fees an objection is interposed, and the nature of the objection. A copy of the Bankruptcy Court's January 21, 2011 Memorandum Decision is available at http://is.gd/E7fjJGfrom Leagle.com. Logan T. Johnston, III, sought Chapter 11 protection (Bankr. D. Ariz. Case No. 01-06221) on May 14, 2001. Mr. Johnston and Paula Parker were divorced in 1996. Mr. Johnston was ordered to pay spousal maintenance as part of the property settlement. In January 2001, Ms. Parker, through her attorney, Melvin Sternberg, moved the Maricopa County Superior Court to hold Mr. Johnston in contempt for non-payment of spousal maintenance, and that Mr. Johnston be, among other things, incarcerated if he failed to pay the amount due in full. MAGIC BRANDS: Ex-Franchisee Barred From Using Fuddruckers Name -------------------------------------------------------------- Dow Jones' DBR Small Cap reports that a judge signed off on an order barring a former Fuddruckers franchisee from displaying the hamburger chain's trademark, affirming that the franchisee had violated the terms of the Company's sale to Luby's Inc. by continuing to brand itself as a Fuddruckers eatery. The report relates that the one-time franchisee -- former Fuddruckers executive Ralph Flannery and businesses under his control -- had sought 30 days to comply with Shannon's Jan. 26 ruling that it be stopped from operating its restaurants under the Fuddruckers name. DBR recounts that after seeing a proposed settlement with a former Fuddruckers franchisee fall apart, the hamburger chain's new owner, Luby's Inc., says it harbors "substantial doubt" the franchisee will abide by the rules of the bankruptcy court. that Luby's Inc. -- which closed its $63 million purchase of Fuddruckers in July-- said it was abandoning efforts to design a resolution that would please Mr. Flannery after seeing the former franchisee espouse "conspiracy theories" and push for "unreasonable terms" in papers that Flannery's attorneys drafted to resolve the dispute. About Magic Brands Headquartered in Austin, Texas, Magic Brands, LLC -- http://www.fuddruckers.com/-- operated 62 Fuddruckers locations in 11 states and 3 Koo Koo Roo restaurants in California. Magic Brands and its operating units filed for Chapter 11 protection on April 21, 2010 (Bankr. D. Del. Lead Case No. 10-11310). It estimated assets of up to $10 million and debts at $10 million to $50 million in its Chapter 11 petition. Affiliate Fuddruckers, Inc., also filed, estimating assets and debts at $50 million to $100 million. FocalPoint Securities, LLC, serves as investment banker to Magic Brands, and Goulston & Storrs serves as lead bankruptcy counsel. Kurtzman Carson Consultants, LLC, is the claims and notice agent. The Official Committee of Unsecured Creditors has tapped Kelley Drye & Warren LLP as counsel and Klehr Harrison Harvey Branzburg LLP as co-counsel. Magic Brands in July 2010 closed the sale of the Fuddruckers stores and franchise business to restaurant operator Luby's Inc. for $63.5 million. Magic Brands, which has changed its name to Deel LLC following the Luby's sale, filed a liquidating Chapter 11 plan on Jan. 18. Bill Rochelle, the bankruptcy columnist for Bloomberg News, said the Disclosure Statement explaining the Plan indicated that unsecured creditors should have a "meaningful recovery." Mr. Rochelle said there are blanks in the disclosure statement where creditors later will be told the expected percentage of their recovery. MARKWEST ENERGY: Moody's Assigns 'B1' Rating to $300 Mil. Notes --------------------------------------------------------------- Moody's Investors Service assigned a B1 (LGD4, 65%) rating to MarkWest Energy Partners, L.P. proposed $300 million senior unsecured notes due 2021. The outlook remains stable. MarkWest will use the proceeds of the proposed note offering to finance a tender offer for its $275 million of 8.5% senior unsecured notes due in 2016. Ratings Rationale "The new senior unsecured notes will be used to refinance higher coupon senior unsecured debt and therefore the offering will be slightly positive from a credit perspective. However the impact is not of a magnitude to warrant a change in the Ba3 Corporate Family Rating at this time," said Stuart Miller, Moody's Senior Analyst. Since the last rating announcement on October 19, 2010, the partnership has issued $138.1 million of common equity which was used along with borrowings under its revolving credit facility to purchase EQT Corporation's natural gas processing complex in Langley, Kentucky and an associated natural gas liquids pipeline for $230 million in February 2011. The acquisition expanded MarkWest's extensive midstream capabilities in Appalachia. Like many midstream master limited partnerships, MarkWest has substantial negative free cash flow due to significant growth capital expenditures and a high distribution payout level. The Ba3 CFR reflects the negative free cash flow combined with relatively high leverage and exposure to commodity price and volume risk. Historically, MarkWest has used a disciplined approach to financing its growth with a balance of equity and debt. However, its EBITDA growth has not yet been sufficient to sustain the ratio of debt to EBITDA below 4.0x (using Moody's standard adjustments). Moody's believe the partnership is strongly positioned within its Ba3 CFR given its history of issuing equity, the steps taken to grow the proportion of its cash flow generated from fee-based business, and some modest improvements in leverage. However, with the expectation of continuing, significant negative cash flow after capital expenditures and distributions, the upside to its CFR is limited. To satisfy its short term liquidity needs, MarkWest relies on its senior secured revolving credit facility. In July 2010, the partnership amended its credit facility by increasing the amount to $705 million and by extending the maturity until July 2015. Pro forma for the new note offering, Moody's expect most, if not all, of the credit facility to be available to fund capital expenditures and/or distributions to unit holders. Therefore, near term liquidity is more than adequate. In conjunction with the note offering, the partnership announced a tender offer for up to $125 million of its 8.75% senior notes due 2018 at a price determined by a modified "Dutch Auction". The partnership's ratings will not be affected if this second tender offer results in an upsize of the proposed note offering, or a drawdown under the revolving credit facility. A near term upgrade in the partnership's rating is unlikely given the expectation for negative free cash flow into the foreseeable future coupled with its current leverage ratio and underlying business risk. A negative action could result if leverage increases to 5.0x either due to the issuance of additional debt or a fall off in operating performance. The last rating action affecting MarkWest occurred on March 29, 2010, when Moody's upgraded the CFR and Probability of Default to Ba3 from B1 and upgraded the senior note rating to B1 (LGD4, 62%) from B2 (LGD 4, 65%). MarkWest Energy Partners, L.P., is headquartered in Denver, Colorado. MIDWEST PROPERTIES: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Midwest Properties of Shawano, LLC 902 North Market Street, Suite 704 Wilmington, DE 19801 Bankruptcy Case No.: 11-10407 Chapter 11 Petition Date: February 8, 2011 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Debtor's Counsel: Laraine A. Ryan, Esq. L.O. LARAINE A. RYAN P.O. Box 5733 Wilmington, DE 19808-0733 Tel: (302) 993-9010 E-mail: laraineryan@comcast.net 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/deb11-10407.pdf The petition was signed by Naomi Isaacson, managing member. Debtor-affiliates that filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- U.S. Acquisitions & Oil, Inc. 10-14121 12/22/10 Midwest Oil of Minnesota, LLC 11-30319 01/19/11 MILLENNIUM MULTIPLE: Seeks 10-Day Exclusivity Extension ------------------------------------------------------- Millennium Multiple Employer Welfare Benefit Plan is asking the Bankruptcy Court for a 10-day extension of its exclusivity period. The Debtor's exclusivity period have been extended via agreements among the various parties and Court order, and was set to expire on February 7, 2011. The Official Committee of Unsecured Creditors filed a joinder in support of the request. The Debtor said that in the week leading up to the end of the current Exclusivity Period, severe winter storms struck Oklahoma and North Texas, causing various government and private offices, including the offices of counsel for the Debtor and counsel for the Creditors Committee, to close for one or more days that week. On February 3, 2011, the Court notified the parties that it will announce its ruling on a pending settlement agreement among various creditor factions in the case, in the afternoon that the current Exclusivity Period ends. The Debtor has been working diligently with the Creditors Committee to finalize both a plan of liquidation and an accompanying disclosure statement and believes that both will be ready to file very soon. However, the inclement weather has cost some time. Moreover, the Debtor and Committee believe that the announcement of the Court's decision on the Settlement Agreement could require some changes to the draft plan, which changes could likely be handled with the assistance of the requested extension. The Debtor also requests that, if the Debtor files a plan within the Extended Period, the Debtor be granted an additional 60 days thereafter during which no other party-in-interest may propose a Plan. The Debtor indicated it has over $90 million in assets with which to address any unpaid postpetition obligations and administrative expense claims once resolutions are reached with various insurance companies regarding policy loans. About Millennium Multiple Richardson, Texas-based Millennium Multiple Employer Welfare Benefit Plan filed for Chapter 11 bankruptcy protection on June 9, 2010 (Bankr. W.D. Okla. Case No. 10-13528). G. Blaine Schwabe, III, Esq., at Mock Schwabe Waldo Elder Reeves & Bryant, assists the Company in its restructuring effort. Eric D. Madden, Esq., and Brandon V. Lewis, Esq., at Diamond McCarthy LLP, in Dallas; and Kyung S. Lee, Esq., at Diamond McCarthy LLP, and Kiran A. Phansalkar, Esq., at Conner & Winters LLP, serve as counsel to the Official Committee of Unsecured Creditors. The Company estimated its assets and debts at $50 million to $100 million as of the petition date. NACIREMA INDUSTRIES: US Trustee Names 5 Members to Creditors Panel ------------------------------------------------------------------ Roberta A. DeAngelis, the U.S. Trustee for Region 3, held an organizational meeting on February 8, 2011, at 10:00 a.m. in the bankruptcy case of Nacirema Industries, Inc. The meeting was held at the United States Trustee's Office, One Newark Center, 21st Floor, Room 2106, Newark, NJ 07102. The sole purpose of the meeting was to form a committee or committees of unsecured creditors in the Debtors' cases. The U.S. Trustee has appointed five members to the Official Committee of Unsecured Creditors in the Debtor's Chapter 11 cases. The Committee members include: 1) Westside Transload, LLC 5600 Westside Avenue North Bergen, NJ 07047 Tel: (201) 662-8600 Fax: (201) 662-8518 2) Steven Bottieri Local 945 Pension Fund 585 Hamburg Turnpike Wayne, NJ 07470 Tel: (973) 942-9463 Fax: (973) 790-6400 3) William Maye Local 282 Annuity Fund 2500 Marcus Avenue Lake Success, NY 11042 Tel: (516) 488-2822 Fax: (516) 488-4895 4) Bernardino Simoes F&S Tire Corporation 58 Brunswick Avenue Edison, NJ 08817 Tel: (732) 287-8877 Fax: (732) 287-5286 5) Yolanda Thompson Hop Energy 4 W. Red Oak Lane, Ste. 310 White Plains, NY10604 Tel: (914) 304-1309 Fax: (914) 644-7501 Warren A. Usatine, Esq., and Kenneth Baum, Esq., at Cole Schotz, serve as counsel for the Committee. Hudson, New Jersey-based Nacirema Industries, Inc., filed for Chapter 11 bankruptcy protection on January 28, 2011 (Bankr. D. N.J. Case No. 11-12339). Morris S. Bauer, Esq., at Norris Mclaughlin & Marcus, PA, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $1 million to $10 million. NEW DRAGON: Receives NYSE Amex Notice on Non-Compliance ------------------------------------------------------- New Dragon Asia Corporation received a letter from NYSE Amex LLC indicating that the Company no longer complies with the Exchange's continued listing standards due to the below deficiencies, as set forth in Section 1003(f) of the Company Guide, and that its securities are, therefore, subject to being delisted from the Exchange. -- Sections 132(e) and 1003(d) of the Company Guide, in that the Company failed to adequately respond to the Exchange's information requests. -- Section 704 of the Company Guide, in that the Company failed to hold an annual meeting during the 2010 fiscal year. -- Section 301 of the Company Guide in that the Company failed to provide a supplemental listing application in relation to all issued shares that have not been previously authorized by the Exchange. -- Section 1003(f)(v) of the Company Guide in that the Exchange Informed the Company on October 5, 2010 that the selling price of the Company's Class A common stock was abnormally low. The selling price continues to be abnormally low and it is unclear when the Company will be able to hold a shareholders' meeting to obtain the authorization for a reverse stock split to cure this deficiency; and -- Section 1003(f)(iii) of the Company Guide in that the Company or its management has engaged in operations, which, in the opinion of the Exchange, are contrary to the public interest by invalidly issuing the shares of Class A Common Stock in excess of the amount permitted under its charter. The Company has failed to provide a satisfactory response as to how and when it will resolve the problem of such shares, as it is unclear when the Company will be able to hold its annual meeting and whether the proposed ratification of the issuance of the shares at that meeting would be effective under Florida law. The Company has appealed this determination and requested a hearing before a committee of the Exchange. There can be no assurance that the Company's request for continued listing will be granted. About New Dragon New Dragon Asia Corp., a Florida corporation is headquartered in Shandong Province, China and is engaged in the milling, sale and distribution of flour and related products, including instant noodles and soybean-derived products, to retail and commercial customers. As the fourth largest instant noodle manufacturer in China, New Dragon Asia markets its well-established Long Feng brand through a network of more than 200 key distributors and 16 regional offices in 27 Chinese provinces with an aggregate production capacity of approximately 195,000 tons of flour and more than 1.1 billion packages of instant noodles per year. Instant noodles are also exported to a growing number of countries. NEW INVESTMENTS: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: New Investments Inc dba Carlton Inn 12233 NE Totem Lake Way Kirkland, WA 98034 Bankruptcy Case No.: 11-11311 Chapter 11 Petition Date: February 8, 2011 Court: U.S. Bankruptcy Court Western District of Washington (Seattle) Judge: Marc Barreca 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 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/wawb11-11311.pdf The petition was signed by Sheraly Aziz, president. OSCEOLA TRACE: Case Summary & Largest Unsecured Creditor -------------------------------------------------------- Debtor: Osceola Trace Venture II, LLC 18753 SE Federal Hwy Tequesta, FL 33469 Bankruptcy Case No.: 11-13325 Chapter 11 Petition Date: February 8, 2011 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman Jr. Debtor's Counsel: Robert C. Furr, Esq. FURR & COHEN 2255 Glades Rd #337W Boca Raton, FL 33431 Tel: (561) 395-0500 Fax: (561) 338-7532 E-mail: bnasralla@furrcohen.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Bank, NA Contingent liability $14,000,000 800 Nicollet Mall (guarantor) on Lennar Attn: Loan Admin. Homes MOrtgage Minneapolis, MN 55402 The petition was signed by Robert L. Miller, member. Debtor-affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Osceola Development Project, LP 10-48806 12/23/10 Osceola Trace Development Corporation 10-48790 12/23/10 PAGE ONE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Page One, Inc. 11018 Montgomery NE Albuquerque, NM 87111 Tel: (505) 247-0007 Bankruptcy Case No.: 11-10511 Chapter 11 Petition Date: February 8, 2011 Court: U.S. Bankruptcy Court New Mexico (Albuquerque) Judge: Robert H. Jacobvitz Debtor's Counsel: Steven Tal Young, Esq. TAL YOUNG, P.C. 20 First Plaza, NW, Suite 500 Albuquerque, NM 87102 Tel: (505) 247-0007 Fax: (505) 764-6099 E-mail: talyoung@yahoo.com Scheduled Assets: $799,183 Scheduled Debts: $1,371,259 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nmb11-10511.pdf The petition was signed by Steve Morado Stout, president. PALM HARBOR: $50-Mil. Sale Won't Provide Payment to Stockholders ---------------------------------------------------------------- Palm Harbor Homes, Inc., in a regulatory filing Monday, disclosed that the filing of its quarterly report on Form 10-Q for the fiscal period ended December 24, 2010, will be delayed. The Company has been advised by Ernst & Young LLP, the Company's independent public accountants, that it will not be able to commence its review of the Company's financial statements for the fiscal quarter ended December 24, 2010, until it is formally retained pursuant to an order of the U.S. Bankruptcy Court for the District of Delaware. E&Y has informed the Company that the earliest that it will be able to commence its review is February 18, 2011. Accordingly, it is highly unlikely that the Company will be able to file the Form 10-Q prior to the sale of the Company pursuant to an auction to be conducted by the Bankruptcy Court which is currently scheduled to occur on March 1, 2011. As of January 31, 2011, the Company projects that it will have approximately $155 million of debt by the time the auction concludes and the sale closes. Accordingly, assuming that strict payment priorities under the bankruptcy code are applied to distribution of the sale proceeds (and that some or all of its liabilities are not otherwise assumed by the successful purchaser) holders of common equity would likely not be entitled to receive any recovery on account of their equity until all of the Company's liabilities are first paid. At present, the Company's "stalking horse" purchaser has submitted a bid under its asset purchase agreement of approximately $50 million plus the assumption of certain obligations. The auction is scheduled to occur on March 1, 2011. Accordingly, following the sale, it is likely that the Company's current equity will be extinguished for no value. For the reasons stated above, the Form 10-Q may not be filed prior to any extinguishment of the Company's equity interests. Once the Company no longer has any outstanding equity securities, it will seek to suspend its obligation to file periodic reports with the Securities and Exchange Commission. About Palm Harbor Homes 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. PASOS HOMES: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Pasos Homes Health, Inc. aka Pasos Homes Health 6028 Surety Drive El Paso, TX 79905 Bankruptcy Case No.: 11-30230 Chapter 11 Petition Date: February 9, 2011 Court: United States Bankruptcy Court Western District of Texas (El Paso) Judge: H. Christopher Mott Debtor's Counsel: Carlos A. Miranda, III, Esq. CARLOS A. MIRANDA, III & ASSOCIATES P.C. 5915 Silver Springs, Bldg 7 El Paso, TX 79912 Tel: (915) 587 5000 Fax: (915) 587 5001 E-mail: cmiranda@mirandafirm.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Joseph Olowe, president. PETTERS CO: District Court Approves Vennes Asset Distribution Plan ------------------------------------------------------------------ District Judge Ann D. Montgomery has granted a joint request by Frank E. Vennes, Jr., Metro Gem Inc., and various defendants, and receiver Gary Hansen for approval of a plan to distribute receivership assets of the Vennes Defendants. The District Court also approved a request by Barry Mukamal, the Chapter 11 Bankruptcy Trustee for Palm Beach Finance Partners, L.P. and Palm Beach Finance II, L.P., to intervene for the limited purpose of objecting to the Plan. The Asset Distribution Plan proposes to distribute substantially all of the assets currently held in the Vennes receivership to certain of the Vennes Defendants' creditors and investors. With the exception of three banks that extended traditional loans to the Vennes Defendants, the Vennes Creditors are individuals and investment groups who were a source of investment funds to the Vennes Defendants in what was later discovered to be a complex Ponzi scheme orchestrated by Thomas Petters. When the scheme collapsed, many of the Vennes Creditors suffered large financial losses. The Asset Distribution Plan is strongly supported by the U.S. Government and a number of Vennes Creditors. The Plan is opposed by Douglas A. Kelley, the Chapter 11 Bankruptcy Trustee for Petters Company, Inc., and the Palm Beach Trustee. The case is United States of America, v. Thomas Joseph Petters; Petters Company, Inc., a/k/a PCI; Petters Group Worldwide, LLC; Deanna Coleman, a/k/a Deanna Munson; Robert White; James Wehmhoff; Larry Reynolds and/or d/b/a Nationwide International Resources, a/k/a NIR; Michael Catain and/or d/b/a Enchanted Family Buying Company; Frank E. Vennes, Jr., and/or d/b/a Metro Gem Finance, Metro Gem, Inc., Grace Offerings of Florida, LLC, Metro Property Financing, LLC, 38 E. Robinson, LLC, 55 E. Pine, LLC, Orlando Rental Pool, LLC, 100 Pine Street Property, LLC, Orange Street Tower, LLC, Cornerstone Rental Pool, LLC, 2 South Orange Avenue, LLC, Hope Commons, LLC, Metro Gold, Inc.; Douglas A. Kelley, Receiver; Gary Hansen, Receiver; Barry E. Mukamal, Liquidating Trustee of Palm Beach Finance Partners, L.P. and Palm Beach Finance II, L.P.; Applicant Intervenor, Case No. 08-cv-5348 (D. Minn.). A copy of the District Court's Memorandum Opinion and Order dated January 25, 2011, is available at http://is.gd/X4DgDJfrom Leagle.com. About Petters Group Based in Minnetonka, Minn., Petters Group Worldwide LLC is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Founder and chairman Tom Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide. Petters Company, Petters Group Worldwide and eight other affiliates filed separate petitions for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the Debtors as counsel. In its petition, Petters Company estimated its debts at $500 million and $1 billion. Parent Petters Group Worldwide estimated its debts at not more than $50,000. As reported in the Troubled Company Reporter on October 7, 2008, Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on October 6, 2008. Petters Aviation is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun Country's parent company. PHILADELPHIA RITTENHOUSE: Files Schedules & Statement ----------------------------------------------------- NetDockets reports that Rittenhouse Developer, L.P. filed its schedules of assets and liabilities and statement of financial affairs with the bankruptcy court. The report relates that these documents provide significant detail into the company's liabilities (including specifics as to whom the obligations are owed) and the financial results of the company over the past several years. According to netDockets, the Company's debts are listed at a total of $195.7 million, with approximately $5.7 million being owed to unsecured general creditors and the balance being owed to iStar Tara, the company's secured lender. The company's assets are much less clear, with its real property assets (two commercial units and 107 unoccupied residential units) being listed as having a currently "unknown" value, the report notes. The Company's only other assets are $287,114 in personal property, according to the Company's court filings, the report adds. About Philadelphia Rittenhouse Philadelphia Rittenhouse Developer, L.P. is a joint venture between ARC Properties, Inc., based in Clifton, New Jersey, and Philadelphia-based Wheeler Brothers Holdings, LLC. The Company was formed to develop 10 Rittenhouse Square, a 33-story condominium building in Philadelphia. Rittenhouse Developer filed for chapter 11 bankruptcy in response to an action in Pennsylvania state court seeking to appoint a receiver for the development project, which was brought by one of the Company's lenders, iStar Tara, LLC. Philadelphia Rittenhouse filed a Chapter 11 petition on Dec. 30, 2010 (Bankr. E.D. Pa. Case No. 10-31201). Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, P.C., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $100 million to $500 million. iStar Tara, LLC is represented in the chapter 11 case by the firm of Blank Rome LLP. POINT BLANK: Creditor Objects to Disclosure Statement ----------------------------------------------------- Carla Main at Bloomberg News reports that creditor David Brooks has objected to the disclosure statement explaining Point Blank Solutions Inc.'s Chapter 11 plan. Mr. Brooks contends objected that the disclosure statement "omits critical information regarding the funding and subsequent rejection" by Point Blank and affiliates of a settlement agreement relevant to the bankruptcy estate. Point Blank, the Bloomberg report discloses, had argued at the time it rejected the agreement that it could recover $32 million by proceeding with the underlying action rather than settling. Point Blank Plan As reported in the Jan. 18, 2011 edition of the Troubled Company Reporter, the U.S. Bankruptcy Court for the District of Delaware will convene a hearing on February 14, 2011, at 2:00 p.m. (prevailing Eastern time), to consider adequacy of the Disclosure Statement. Objections, if any, are due February 8, at 4:00 p.m. Approval of the Disclosure Statement is required before the Debtor can send the Plan to creditors for voting, and then seek approval of the Plan at a confirmation hearing. The Plan Proponents are the Debtors, the Official Committee of Unsecured Creditors, the Official Committee of Equity Security Interest Holders, Privet Fund Management LLC, as investment manager for Privet Opportunity Fund I, LLC and Privet Fund LP, Privet Opportunity Fund I, LLC, Prescott Group Capital Management, LLC, and Lonestar Capital Management, LLC, as investment advisor to Lonestar Partners, LP and manager of PB Funding, LLC. The Plan contemplates the reorganization and continuation of the Debtors' business through a restructuring of each Debtor's debt obligations and the generation of new capital through a Rights Offering of new common stock in the Reorganized Debtors, backstopped by the Backstop Parties. The Rights Offering, combined with the Debtors' available cash from operations going forward and exit financing, if necessary and available, will provide the funding necessary to consummate the Plan and pay remaining secured and unsecured creditors in accordance with the terms of the Plan. All of the prepetition equity Interests in Parent will be surrendered, and 100% of the equity securities interests in the Reorganized Parent will be acquired pursuant to the Rights Offering. Generally, the Plan is structured around three key components. a) The Rights Offering/Direct Subscription. In addition to cash on hand and an Exit Facility, if one is necessary and available, the Debtors intend to fund their reorganization effort-including the payment of all amounts due under the Plan-through the issuance and sale of shares of New Common Stock in Reorganized Parent in a minimum amount of $15,000,000 and (subject to certain consents and other conditions) up to a maximum of $25,000,000. The New Common Stock will be sold (i) through a Rights Offering to eligible holders of Allowed General Unsecured Claims and Allowed Old Equity Interests, backstopped by the Debtors' existing DIP Lenders, and (ii) through a direct subscription of shares to two of the existing DIP Lenders, Privet and Prescott. b) The Inter-Debtor Compromise. The Plan Proponents have identified several potential Claims, Causes of Action and other disputes that may exist between the several Debtors, including existing and potential disputes regarding (i) the value and disposition of Intercompany Claims, (ii) the valuation of the individual Debtor's Estates, (iii) the individual Debtor's respective ownership interest in certain potentially valuable lawsuits, (iv) the susceptibility of two or more of the Debtors' Estates to substantive consolidation and (v) the consideration, if any, that should be paid by Parent to retain its existing Interests in the Debtor Subsidiaries. c) The Recovery Trust. Under the Plan, holders of Allowed General Unsecured Claims, Allowed Subordinated Unsecured Claims, Allowed Class Action Claims and Allowed Old Equity Interests will be issued beneficial interests in a Recovery Trust established for the purpose of liquidating certain assets and distributing the proceeds thereof to the trust beneficiaries and making certain disbursements or distributions to Reorganized Parent. On the Effective Date, the Reorganized Debtors will fund a Recovery Trust with a cash payment of $3 million, an additional $1 million for expenses and rights to certain potentially valuable Causes of Action, the proceeds of which will be distributed to the beneficiaries of the Recovery Trust in accordance with the waterfall. The Debtors intend to pay in full administrative claims and secured claims. General unsecured claims will receive ratable proportion of distributions from the recovery trust, and rights to participate in the rights offering. Holders of subordinated unsecured claims will receive ratable proportion of distributions, if any, from the recovery trust after payment in full of the general unsecured claims. Holders of equity interests will receive ratable proportion of distributions from the recovery trust, pari passu, and rights to participate in the rights offering. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/POINTBLANK_DS.pdf About Point Blank Headquartered in Pompano Beach, Florida, Point Blank Solutions, Inc. -- http://www.pointblanksolutionsinc.com/-- designs and produces body armor systems for the U.S. Military, Government and law enforcement agencies, as well as select international markets. The Company maintains facilities in Pompano Beach, Florida, and Jacksboro, Tennessee. The Company's former chief executive officer and chief operating officer were convicted in September 2010 of orchestrating a $185 million fraud. Point Blank Solutions, formerly DHB Industries, filed for Chapter 11 protection on April 14, 2010 (Bankr. D. Del. Case No. 10-11255). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP serves as corporate counsel. T. Scott Avila of CRG Partners Group LLC is the restructuring officer. Epiq Bankruptcy Solutions serves as claims and notice agent. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Equity Security Holders in the case. The Equity Committee has tapped Morrison Cohen LLP, and The Bayard, P.A., as counsel. Robert M. Hirsh, Esq., and Heike M. Vogel, Esq., at Arent Fox LLP, serve as counsel to the Creditors Committee, and Frederick B. Rosner, Esq., and Brian L. Arban, Esq., at Messana Rosner & Stern LLP, serve as co-counsel. PRO FIT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: Pro Fit Optix, Inc. 262 Crystal Grove Blvd. Lutz, FL 33548 Bankruptcy Case No.: 11-13387 Chapter 11 Petition Date: February 9, 2011 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman Jr Debtor's Counsel: Bradley S. Shraiberg, Esq. SHRAIBERG, FERRARA, & LANDAU P.A. 2385 NW Executive Center Dr. #300 Boca Raton, FL 33431 Tel: (561) 443-0801 Fax: (561) 998-0047 E-mail: bshraiberg@sfl-pa.com Estimated Assets: $0 to $50,000 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/flsb11-13387.pdf The petition was signed by Charles Posternack, board member. QSGI INC: Plan Outline Approved; March 21 Confirmation Hearing Set ------------------------------------------------------------------ In a regulatory filing Tuesday, QSGI Inc. discloses that on February 2, 2011, the United States Bankruptcy Court for Southern District of Florida, West Palm Beach Division entered its order approving the Company's Plan of Reorganization and Disclosure Statement, as filed with the Court on February 1, 2011. The deadlines set by the court are as follows: a. February 9, 2011, the proponents deadline for serving the order, disclosure statement, plan and ballot; b. February 9, 2011, deadline for objections to claims; c. February 28, 2011, deadline for fee applications; d. March 7, 2011, proponent's deadline for serving notice of fee application; e. March 7, 2011, deadline for objections to confirmation; f. March 7, 2011, deadline for filing ballots accepting or rejecting plan; g. March 16, 2011, proponent's deadline for filing proponents report and confirmation affidavit; h. March 21, 2011, 9:30 a.m. EST, confirmation hearing. Under the proposed Plan, Debtor QSGI, Inc., will be reorganized and continue in existence as a publicly traded entity pursuant to the restructuring plan set forth in Article 6 and 7 of the Plan as the Reorganized Debtor. The purpose of the Plan is to create a marketable entity which will merge with another entity, KruseCom, LLC, on the Effective Date and provide recovery to the creditors of the Debtors. KruseCom is a Florida limited liability company founded by present and former employees of the Debtors, in September 2009. KruseCom has eight (8) employees of which (7) of them are former QSGI employees. Pursuant to the Plan, holders of Allowed General Unsecured Claims will receive a pro-rata distribution of 10,000,000 shares of Additional Common Stock in the Reorganized Debtor and a pro-rata distribution of the $50,000 Unsecured Carve-Out upon the Effective Date. KruseCom in exchange for providing the capital and necessary assets to implement the restructuring transactions and the Plan, will receive 190,000,000 of the shares of stock in the Reorganized Debtor. The lawful holders of common stock in the Debtors and all other Equity Interests and Claims will retain all common stock and Equity Interests under the Plan. A copy of QSGI, Inc., et al.'s Third Amended Disclosure Statement is available for free at http://bankrupt.com/misc/QSGI.DS.pdf About QSGI Inc. Palm Beach, Florida-based QSGI, Inc., et al., operated as a technology services provider, offering a full suite life-cycle for their corporate and government clients' entire information technology platform. The Debtors serviced three separate business segments: Data Center Maintenance Services; Data Security and Compliance; and Network Infrastructure Design and Support. The Debtors filed for Chapter 11 protection on July 2, 2009 (Bankr. S.D. Fla. Lead Case No. 09-23658). Michael A Kaufman, Esq., at Michael A. Kaufman, P.A., in West Palm Beach, Fla., represents the Debtors as counsel. In its schedules, QSGI, Inc., disclosed $8,511,894 in assets and $11,110,417 in liabilities. On September 24, 2009, the Bankruptcy Court approved the sale of substantially all of the assets of the DSC division of QSGI to Victory Park Capital, and the sale of substantially all assets of the DCM division of Qualtech Services Group, Inc., to SMS Maintenance, LLC. Following the closing of the DSC Sale and the DCM Sale, the Debtors ceased substantially all business operations. RAINIER MOVING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Rainier Moving Systems, Inc. 7115 132nd Place SE Newcastle, WA 98059 Bankruptcy Case No.: 11-11332 Chapter 11 Petition Date: February 8, 2011 Court: U.S. Bankruptcy Court Western District of Washington (Seattle) Debtor's Counsel: James W. Shafer, Esq. SHAFER & BAILEY 1218 3rd Avenue, Suite 1808 Seattle, WA 98101 Tel: (206) 682-4802 E-mail: jameswshafer@qwestoffice.net Scheduled Assets: $518,000 Scheduled Debts: $1,298,832 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb11-11332.pdf The petition was signed by Donald Arroyo, president of Rainier Moving Systems, Inc. RDK TRUCK: Section 341(a) Meeting Scheduled for March 2 ------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of RDK Truck Sales & Service, Inc.'s creditors on March 2, 2011, at 1:30 p.m. The meeting will be held at Room 100-B, 501 East Polk St., (Timberlake Annex), Tampa, Florida. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Tampa, Florida-based RDK Truck Sales & Service, Inc., specializes in both the sale and rental of new and reconditioned waste management vehicles. It filed for Chapter 11 bankruptcy protection on February 1, 2011 (Bankr. M.D. Fla. Case No. 11- 01877). Alberto F Gomez, Jr., Esq., at Morse & Gomez, PA, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. RDK TRUCK: Has Interim OK to Hire Morse & Gomez as Bankr. Counsel ----------------------------------------------------------------- RDK Truck Sales And Service, Inc., sought and obtained interim authorization from the U.S. Bankruptcy Court for the Middle District of Florida to employ Morse & Gomez, P.A., as bankruptcy counsel. M&G will, among other things: a. give the Debtor legal advice with respect to its duties and powers as Debtor; b. take necessary steps to set aside preferential transfers; c. prepare motions, notices, pleadings, petitions, answers, orders, reports and other legal papers required in the Debtor's bankruptcy case; and d. assist the Debtor in taking legally appropriate steps to effectuate the continued operations of the Debtor. The Debtor paid a $32,388.10 prepetition retainer to M&G. of the total amount received, approximately $7,812.80 is related to representation of the Debtor relating to potential work-out settlement efforts. Accordingly, the amount of $24,575.30 is the prepetition bankruptcy retainer. The Debtor also paid the court filing fee of $1,039. Alberto F. Gomez, Jr., Esq., a shareholder at M&G, assured the Court that it does not hold or represent any interest adverse to the Debtor, its estate, its creditors or any other party with an actual or potential conflict in its Chapter 11 case. The Court has set a final hearing for February 22, 2011, at 2:00 p.m. on the Debtor's request to employ M&G as bankruptcy counsel. Tampa, Florida-based RDK Truck Sales & Service, Inc., specializes in both the sale and rental of new and reconditioned waste management vehicles. It filed for Chapter 11 bankruptcy protection on February 1, 2011 (Bankr. M.D. Fla. Case No. 11- 01877). The Debtor estimated its assets and debts at $10 million to $50 million. RIVERSIDE COUNTY: S&P Assigns Negative Outlook on 'BB-' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services removed from CreditWatch with negative implications its 'BB-' long-term rating on Riverside County Public Financing Authority, Calif.'s $50.6 million series 1999 certificates of participation, issued on behalf of Air Force Village West Inc. Standard & Poor's assigned a negative outlook to the rating. S&P had placed the rating on the 1999 COPs on CreditWatch pending the outcome of discussions between AFVW and its bondholders and letter of credit bank over waivers of its occupancy and debt service coverage ratio covenant violations under the terms of AFVW's 1999 COPs and 2005 variable-rate demand bonds. Standard & Poor's does not rate the series 2005 bonds, which are credit enhanced by a KBC Bank LOC. AFVW did not meet the minimum covenant levels for fiscal 2009 and, according to management, has not met the minimum covenant levels for fiscal 2010 (ended December 31). S&P assigned the negative outlook because AFVW and the parties to the bond agreements have not finalized an agreement to waive the covenant violations for fiscal 2009 or for fiscal 2010. AFVW management has told us that a waiver of the fiscal 2009 covenant violations has been agreed to in principal pending resolution of certain issues related to the engagement of outside consultants. Discussions about a waiver of the fiscal 2010 covenant violations are still underway. Failure to finalize the agreement on the fiscal 2009 waivers, or the failure of the parties to reach an agreement related to fiscal 2010, could result in acceleration of the bonds. "The negative outlook also reflects S&P's view of AFVW's weak independent-living occupancy levels, continued operating losses through the 11-month interim period ended Nov. 30, 2010, and uncertainty about future operations," said Standard & Poor's credit analyst Karl Propst. "While AFVW currently has cash in excess of its variable-rate debt exposure, if unrestricted cash were to cover a portion or all of its variable-rate debt, liquidity would be diminished, and, in S&P's opinion, would likely result in another rating downgrade." In fiscals 2008 and 2009, AFVW breached covenants under its series 1999 and 2005 bond agreements, including rate and occupancy violations. Management obtained waivers from its bondholders and KBC Bank related to fiscal 2008, and was able to issue the fiscal 2008 audit. S&P understand that management is currently working with investors and KBC Bank to obtain waivers with respect to the covenant violations related to fiscals 2009 and 2010. S&P understand that due to the ongoing negotiations, AFVW has also delayed the final fiscal 2009 audit as will likely be the situation with the fiscal 2010 audit. For analytical purposes Standard & Poor's used AFVW's fiscal 2009 draft audited statements and internal financial statements through Nov. 30, 2010. S&P has obtained a copy of AFVW's income statement through the fiscal year end December 31; however, a full-year balance sheet has not been finalized. ROBERT PODZEMNY: Can Use Cash for 2011 Cattle and Corn Crop ----------------------------------------------------------- Bankruptcy Judge Robert H. Jacobvitz granted Robert J. Podzemny's Supplemental Motion for Order Authorizing Use of Cash Collateral for the 2011 Grazing Cattle and Corn Crop, filed January 13, 2011, subject to certain adequate protection and additional conditions outlined by the Court. Mr. Podzemny seeks to use more than $12 million in cash collateral: 1) up to $800,0001 to develop an additional 750 acres of farmland on the Mock Farm that includes installation of an irrigation system on that acreage; 2) roughly $4.5 million to plant, cultivate and harvest a 2011 corn crop on roughly 7,170 acres, including the newly developed acreage; 3) roughly $6 million of cash collateral to acquire up to 9,000 head of wheat cattle in February, March and April 2011; and 4) roughly $1.2 million to acquire up to 2,000 head of cattle to graze on grass pasture. The Debtor also seeks use of cash collateral to graze and care for the newly acquired cattle. Great Plains Ag Credit, P.C.A and Great Plains Ag Credit, F.L.C.A., object to use of cash collateral to develop 750 acres of land and expand farming operations on the Mock Farm. GPAC asserts that expansion of the Mock Farm is outside the ordinary course of the Debtor's business, should not be permitted on 14 days' notice with minimal disclosure, and that development of the Mock Farm is the first step of a sub rosa plan. GPAC further objects to the Debtor acquiring more than 4,500 head of wheat pasture cattle in the first half of 2011 because it is concerned that if the conditions in 2011 are dry, there is too great a risk that the wheat pasture will not support more than 4,500 head of cattle, particularly in view of the water needed to grow the corn crop. GPAC further argues that the Debtor's proposed use of cash collateral would not leave GPAC adequately protected. GPAC believes that the Debtor's plan of reorganization fails to reduce his operations to a more manageable and realistic level in light of the Debtor's age, and urges that the Debtor should be required to rein in his operations and use available cash to pay down debt. Subject to adequate protection consistent with prior cash collateral orders in the Debtor's case, and additional adequate protection payments, GPAC consents to the Debtor's use of cash collateral to plant, cultivate and harvest a corn crop on the Debtor's existing irrigated farmland and to the use of cash collateral for the Debtor to acquire, graze and care for up to 4,500 head of wheat pasture cattle and up to 2,000 head of grass pasture cattle. The Official Committee of Unsecured Creditors supports the Debtor's request to use cash collateral to purchase additional cattle at the levels he requests, but objects to the Debtor's request to use cash collateral to develop the Mock Farm and grow a corn crop on 750 acres of the Mock Farm in 2011 because of its concern that the Mock Farm cannot be developed in time to plant a corn crop for 2011. Dalhart Consumers Fuel Association, Inc., a holder of an unsecured nonpriority claim in the amount of $878,893.95, objects to expenditures to develop and farm the Mock Farm on the ground that it would put at risk the distributions to be made to Dalhart under the Debtor's proposed plan of reorganization. Dalhart views the Debtor's request to develop the Mock Farm as an expansion of the Debtor's business outside his ordinary course of operations. Judge Jacobvitz said GPAC's interest in cash collateral is adequately protected, subject to those conditions outlined by the Court. Judge Jacobvitz also held that planting the 2011 corn crop on existing farmland, purchasing up to 9,000 head of cattle to graze on wheat and grass pasture in 2011, and developing the Mock Farm to plant a corn crop in 2011 on 750 acres falls within the Debtor's sound business judgment and does not impermissibly interfere with the pending competing plans. A copy of the Bankruptcy Court's February 8, 2011 Memorandum Opinion is available at http://is.gd/yFIiWgfrom Leagle.com. About Podzemny and 7-H Cattle Feeders Sedan, New Mexico-based Robert Joseph Podzemny, aka Bob Podzemny, has roughly 38 years of experience farming crops and raising cattle. His farms include the Apache Farm, Mock Farm, Perico Farm and Sedan Farm. Mr. Podzemny's current business operations consist primarily of growing corn on roughly 6,400 acres of irrigated land, pasturing cattle on roughly 6,500 acres of wheat, and pasturing cattle on grass. Mr. Podzemny filed a voluntary Chapter 11 petition (Bankr. D. N.M. Case No. 09-14226) on September 17, 2009. 7-H Cattle Feeders, Inc., filed a voluntary Chapter 11 petition (Bankr. D. N.M. Case No. 09-14232) on September 19, 2009. The two cases are now jointly administered under Case No. 09-14226. George M. Moore, Esq. -- mbglaw@swcp.com -- at Moore, Berkson & Gandarilla, P.C., in Albuquerque, New Mexico, serves as the Debtors' counsel. Michael K. Daniels, Esq. -- mdaniels@nm.net -- serves as counsel to 7-H. In Mr. Podzemny's petition, he estimated $50 million to $100 million in assets and debts. The Unsecured Creditors Committee is represented by Jennie D. Behles, Esq., in Albuquerque, New Mexico. Mr. Podzemny is the sole owner of 7-H. Mr. Podzemny continues in the management and possession of his business and property as debtor in possession. GPAC, on the one hand, and Mr. Podzemny and 7-H, on the other, have filed competing plans. It is likely that a confirmation hearing on the competing plans will be conducted in the first half of 2011. The GPAC plan is largely a liquidating plan. The Debtor's plan is largely a plan to restructure debt and continue operations. ROUND TABLE PIZZA: Files for Chapter 11 to Close "Some" Stores -------------------------------------------------------------- Round Table Pizza Inc., known for making "The Last Honest Pizza," together with three affiliates, filed for Chapter 11 protection (Bankr. N.D. Calif. Lead Case No. 11-41431) in Oakland, California, on Feb. 9, 2011. Round Table said in a statement the Chapter 11 filing is designed to improve the Company's cash flow and stabilize its business through recapitalization of its debt and renegotiation of above- market leases. Despite improving business performance and expense reductions, the company said seeking legal protection under Chapter 11 was necessary to improve the company's competitiveness as the economy recovers. Round Table's first restaurant opened in Menlo Park, California in 1959. Over the past 50 years, Round Table has grown to dominate the Northern California market for pizza, to become a major West Coast chain, with nearly 500 stores in seven States, and to engage in international development. During the same period, Round Table diversified from acting exclusively as a franchisor to also operating company owned stores, ultimately acquiring and developing 140 company-owned stores and swelling its employee base from 70 to a peak of over 3,000 employees. At present, there are 355 franchised stores, with 148 franchisees. Round Table operates 128 company-owned stores. System revenues are in excess of $400 million, according to the Company. According to Round Table, the Chapter 11 filing will not impact the restaurants operated by franchisees. Round Table, however, said that it will close some unprofitable, company-owned restaurants but stressed that most of its company-owned locations and all of its franchised locations will remain open, with minimal impact on consumers. "Our company has experienced consistent growth and management has been responsive to the difficult economic environment," explained Rob McCourt, the Company's President who has also been appointed CEO by the Board of Directors. "Unfortunately, we are compelled to take further steps, including this reorganization plan, to meaningfully address the high cost of our capital and above-market leases. "Round Table remains open for business and fully operational, and we will continue to serve our customers The Last Honest Pizza," said McCourt. McCourt also said that the company was placing a high priority on communication to employees, franchisees, vendors, and other key audiences through the reorganization process, which is expected to take approximately 6 to 12 months. Road to Bankruptcy Mr. McCourt says having enjoyed consistent profitable expansion over the preceding decade, Round Table sought a new credit facility that would support further expansion, including a planned acquisition of more than 35 stores. In February of 2007, Round Table closed a $65 million credit facility jointly provided by General Electric Capital Corporation and The Prudential Insurance Company of America, providing it with the ability to fund further expansion. In late 2007, however, due to the "Great Recession," management halted the growth which had driven the Company for the preceding decade, shelving the plans to acquire more than 35 stores and ultimately terminating all efforts to acquire or develop new company stores, Mr. McCourt said. He added that as the Great Recession continued, the Company focused on reducing expenses. General administrative and overhead expenses were reduced from $12.2 million dollars in 2006 to $6 million dollars in 2009, while Round Table increased market share by 4% during the same period. Round Table's management also reduced costs above the company store level, ultimately engaging in 5 rounds of lay-offs and severing a total of 54 employees. Mr. McCourt adds that in the midst of the Great Recession, Round Table was required to address and resolve two wage and hour class action lawsuits. Aggregate costs associated with this litigation exceeded $4.3 million, imposing additional strains on the company's liquidity. Unpaid obligations under the class action settlements currently aggregate about $380,000. In 2010, the pizza market became extremely price competitive as a result of the Great Recession. Round Table could not materially reduce the cost of its ingredients, since it had established its reputation as "the last honest pizza." The lower margins during this period put additional stress on Round Table's profitability. Recognizing that the operations of the chain following the Great Recession could not support the principal repayment schedule in the GECC/Prudential credit facility, Round Table's management concluded that the chain should be sold in order to retire the debt. In June 2010, Round Table retained North Point Advisors as its investment banker, and began efforts to sell the company. Round Table engaged in serious negotiations with two potential acquirers at values which would permit it to pay all creditors and fund a return to the Employee Stock Ownership Plan (ESOP), which owns all of its equity. "Recently, Round Table received a contingent opportunistic offer which, if ultimately consummated, might have yielded at most partial payment to unsecured creditors. Believing that its value was materially in excess of its debts, consistent with the recent ESOP appraised value of $45 million, Round Table concluded that the interests of creditors and the ESOP were better served by a Chapter 11 reorganization," Mr. McCourt said. Over the first 4 to 6 months of its Chapter 11 case, Round Table intends to close unprofitable stores and to renegotiate leases with respect to its marginal stores. Within 4 to 6 months, Round Table expects that its remaining base of company-owned stores will be stable and profitable. About Round Table Pizza Round Table Pizza, Inc. -- http://www.roundtablepizza.com/-- is a private, 100% employee-owned company with corporate offices based in Concord, California. Round Table is largely owned by an Employee Stock Ownership Plan, with 3,190 participants. The ESOP is designed and intended to provide a source of retirement income to Round Table's loyal, long-term employees. ROUND TABLE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Round Table Pizza, Inc., a California Corporation 1320 Willow Pass Road, Suite 600 Concord, CA 94520 Bankruptcy Case No.: 11-41431 Chapter 11 Petition Date: February 9, 2011 Court: U.S. Bankruptcy Court Northern District of California (Oakland) Judge: Roger L. Efremsky About the Debtor: Round Table Pizza, Inc. -- http://www.roundtablepizza.com/-- is a private, 100% employee-owned company with corporate offices based in Concord, California. Known for making "The Last Honest Pizza," the Company has 355 franchised stores and 128 company-owned stores. Debtor's Counsel: Scott H. McNutt, Esq. MCNUTT LAW GROUP 188 The Embarcadero, #800 San Francisco, CA 94105 Tel: (415)995-8475 E-mail: SMcNutt@ml-sf.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Ted Storey, officer. Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Round Table Development Company 11-41432 02/09/11 The Round Table Franchise Corporation 11-41433 02/09/11 Round Table Pizza Nevada LLC 11-41434 02/09/11 Round Table Pizza Inc.'s List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Saladinos Inc. -- $1,293,618 P.O. Box 12266 Fresno, CA 93779 Assal Corporation -- $17,852 1601 N. California Boulevard Walnut Creek, CA 94596 Pepsi-Cola Co -- $15,264 P.O. BOX 841828 Dallas, TX 75284 Paper-Net -- $6,466 McDermott Will and Emery -- $6,391 Edwards Global -- $6,000 Nevada Dept. of Taxation -- $5,991 State of Nevada Employment -- $5,565 Contributions Section Swisher Hygiene -- $5,483 Davis Wright Tremaine LLP -- $5,358 Russin & Vecchi LLC -- $4,672 Malioboro Inc. -- $4,364 P & D Appliance Center -- $3,482 Faria Printing -- $3,227 East West Refridgeration -- $3,029 Airgas NCN -- $2,651 Dell Financial -- $2,629 AT and T -- $2,473 CBC Mechanical, Inc. -- $2,451 Griffiths Printing -- $2,376 SANTA ROSA BAY: $2.2MM July Bond Payment Looms for Bo's Bridge -------------------------------------------------------------- Eric Morath, writing for Dow Jones' Daily Bankruptcy Review, reports that the Garcon Point Bridge, a toll bridge in Florida's panhandle, may not have the funds necessary to make future interest payments. DBR, citing the Northwest Florida Daily News, says the toll bridge could become the latest privately funded road to find itself in bankruptcy. Santa Rosa Bay Bridge Authority issued $95 million in bonds for the construction of the Garcon Point Bridge in 1996. It also borrowed $7.5 million from the DOT. The toll collections would be used to pay the debt. However, actual traffic failed to reach projections since the bridge opened in 1999. If the bridge authority can't make the interest payments, the bridge could be turned over to its bondholders or taken over by the state. Both of those actions could happen through bankruptcy proceedings. According to NWF Daily News, Morgan Lamb, the sole remaining member of the Santa Rosa Bay Bridge Authority, said last week that if everything breaks right -- "if traffic goes up the way it has been" -- the bridge authority could collect enough in tolls to make a bond payment of about $2.2 million July 1. "After that we're in trouble," he said. Garcon Point Bridge is nicknamed "Bo's Bridge," as it was a favorite project of disgraced former state House speaker Bolley Johnson. The former politician and his wife were found guilty of tax evasion in 1999. According to NWF Daily News, in October, when the bridge authority still had enough members to have a quorum, they listened to a proposal from ACA Financial Corp. The group was working to contact 51% of the bridge's bond holders to request that they consider refinancing the existing bonds. That idea was rejected in January, according to David Tassinari of the Florida Transportation Commission. According to NWF Daily News, State Sen. Don Gaetz said the bridge authority's deteriorating financial situation merits a discussion. Sen. Gaetz points to these scenarios in the event of the $95 million toll bridge declares bankruptcy: (1) Ownership of the bridge "go back to the bondholders so they can decide what to do with it." (2) The state can to offer to take the bridge off of the hands of the bond holders at a significant discount. The DOT could then take it over and get taxpayers "off the hook." (3) The state could bail out the bond holders and assume the millions of dollars in debt they are going to find themselves saddled with if the bridge goes under. Mr. Gaetz said though that he would oppose a bailout, the report relates. SHUBH HOTELS PITTSBURGH: Lenders Plan Outline Hearing on March 8 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Pennsylvania has continued to March 8, 2011, at 10:00 a.m. the hearing on the disclosure statement explaining the Chapter 11 plan filed by Carbon Capital II Real Estate CDO 2005-1, Ltd., and loan administrator Blackrock Financial Management, Inc., for Debtor Shubh Hotels Pittsburgh, LLC. As reported in the Troubled Company Reporter on January 13, 2011, mortgage lender Carbon Capital II is challenging Shubh Hotels Pittsburgh, LLC's bankruptcy-exit plan and has proposed its own sale-driven road map for the Debtor's Chapter 11 case. The Plan calls for a sale of Shubh's assets, with the lender itself kicking off bidding with a credit bid of up to $52.6 million. About Shubh Hotels Pittsburgh Boca Raton, Florida-based Shubh Hotels Pittsburgh, LLC, owns and operates the largest hotel in the City of Pittsburgh. For roughly 50 years, the Hotel operated as a Hilton franchise. Hilton terminated the Hilton Franchise Agreement by letter dated September 1, 2010. The Debtor filed for Chapter 11 bankruptcy protection on September 7, 2010 (Bankr. W.D. Pa. Case No. 10-26337). Scott M. Hare, Esq., in Pittsburgh, Pennsylvania, and attorneys at Rudov & Stein, P.C., serve as co-counsel. The Debtor estimated its assets at $10 million to $50 million and debts at $50 million to $100 million. SOLOMON DWEK: District Court Rejects Kantrowitz Appeal ------------------------------------------------------ Barry Kantrowitz, Barry Associates, LLC, and Barry Associates Title Agency, LLC, move for leave to appeal from an interlocutory order of the U.S. Bankruptcy Court for the District of New Jersey. District Judge Mary L. Cooper denied the request. The District Court held that Kantrowitz et al. have failed to satisfy the 28 U.S.C. Section 1292(b) criteria, and thus, an interlocutory appeal is inappropriate. Section 1292(b) provides: "When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order." Charles A. Stanziale, Jr., Trustee in the Chapter 11 bankruptcy of Solomon Dwek, sued Kantrowitz et al. seeking, inter alia, to avoid and recover certain allegedly fraudulent transfers made by Mr. Dwek to Mr. Kantrowitz involving (1) Mr. Kantrowitz's membership interests in certain New Jersey limited liability companies, (2) distributions made by the LLCs to Mr. Kantrowitz, and (3) the value of capital contributions allegedly made by Mr. Dwek to the LLCs on behalf of Mr. Kantrowitz. The Amended Complaint also asserted claims for breach of contract and breach of fiduciary duty, and sought an accounting and disallowance of any claims Kantrowitz et al. might have against the Dwek bankruptcy estate. Kantrowitz et al. moved before the Bankruptcy Court for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c), as incorporated by Federal Rule of Bankruptcy Procedure 7012(b). The Trustee cross-moved for leave to file a Second Amended Complaint. The Bankruptcy Court denied the motion for judgment on the pleadings and granted the cross motion for leave to file a Second Amended Complaint. In denying the motion for judgment on the pleadings, the Bankruptcy Court observed that the Answer filed by Kantrowitz et al. "flatly denies virtually every allegation in the complaint," indicating the existence of material factual disputes precluding judgment on the pleadings. The Bankruptcy Court further noted that the affirmative defenses raised by Kantrowitz et al. in their Answer "establish material factual disputes" with regard to, e.g., whether the LLCs received reasonable value from Mr. Kantrowitz for his alleged membership interests therein or whether Mr. Dwek received reasonably equivalent value for contributions made to the LLCs on Mr Kantrowitz's behalf, as addressed in the Amended Complaint. The appellate case is Charles A. Stanziale, Jr., Chapter 11 Trustee, v. Barry Kantrowitz, et al., Case No. 10-cv-4259 (D. N.J.). A copy of the District Court's February 4, 2011 Memorandum Opinion is available at http://is.gd/JZK1Dwfrom Leagle.com. About Solomon Dwek Several creditors filed an involuntary Chapter 7 bankruptcy petition against Solomon Dwek (Bankr. D. N.J. Case No. 07-11757) on February 9, 2007. On February 13, 2007, SEM filed for voluntary Chapter 11. On February 22, 2007, the Dwek bankruptcy case was converted to Chapter 11 and it was administratively consolidated with the SEM bankruptcy. SPEEDWAY MOTORSPORTS: S&P Assigns Rating to $250 Mil. Senior Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned Concord, N.C.-based Speedway Motorsports Inc.'s recently executed $250 million senior secured credit facilities its 'BBB-' issue-level rating (two notches higher than its 'BB' corporate credit rating on the company). S&P also assigned this debt a recovery rating of '1', indicating its expectation of very high (90% to 100%) recovery for lenders in the event of a payment default. The debt consists of a $100 million revolving credit facility and a $150 million term loan, both due in January 2015. SMI used proceeds from the facilities to refinance its former $300 million revolving credit facility. (S&P withdrew its ratings on the company's former $300 million revolving credit facility, given the termination of this obligation.) It also plans to use proceeds, in conjunction with its recently placed $150 million 6.75% senior notes due 2019, to fund the current tender offer for its outstanding $330 million 6.75% senior subordinated notes due 2013. S&P's 'BB' corporate credit rating and negative rating outlook remain unchanged, as S&P had previously factored into the rating its expectation that the facilities would be negotiated approximating these terms. The 'BB' rating reflects SMI's reliance on its event-driven business model and the revenue and earnings volatility that can result from the discretionary nature of ticket sales to racing events. While the company derives a significant portion of its revenue (about 35% of total last-12- month revenue through September 2010) from a television broadcasting agreement negotiated by the National Association of Stock Car Auto Racing, the current agreement expires in 2014. Although the contract expiration is several years away, given declines in television ratings and admissions in recent years, the potential exists that a renegotiation of this agreement may result in less favorable terms, absent a rebound in viewership and event attendance. For 2011, S&P believes that growth in broadcasting revenue will partially offset declines in admissions revenue, causing total revenue to decline in the mid-single-digit percentage area for the year. Given the company's relatively high fixed costs, S&P expects the company's EBITDA margin to continue to decline, and S&P has factored into the rating about a 10% decline in EBITDA from its 2010 estimate of about $170 million. Based on these assumptions, S&P expects its measure of leverage to peak at slightly above 4x (somewhat weak for the current 'BB' rating), and interest coverage to be in the mid 3x area at the end of 2011. Ratings List Speedway Motorsports Inc. $100M revolv credit fac due 2015 BBB- Recovery Rating 1 $150M term loan due 2015 BBB- Recovery Rating 1 SPRINGFIELD LANDMARK: Judge Denies Bank's Dismissal Request ----------------------------------------------------------- According to News-Leader.com, a federal bankruptcy judge rejected a motion to dismiss the bankruptcy case of Gillioz Theatre filed by Guaranty Bank. News-Leader relates that Springfield Landmarks Preservation Trust, which operates the Gillioz, agreed to begin making $7,500 monthly interest payments to Guaranty Bank, starting in March, which the court considers an "adequate protection payment." Dave Roling, president of the trust, said the Gillioz is making money through its many new entertainment listings and will use those funds to help make the interest payment. The trust also will use rent proceeds from tenants in the attached Netters Building, which the trust owns. News-Leader relates that the trust has until April 29, 2011, to come up with a reorganization plan. Guaranty Bank then has 20 days to accept it or reject it. About Springfield Landmarks & Gillioz Restoration Based in Springfield, Missouri, The Springfield Landmarks Preservation Trust and Gillioz Restoration Partnership, LP, filed for Chapter 11 bankruptcy (Bankr. W.D. Mo. Cases No. 10-63128 and 10-63130, respectively) on Dec. 30, 2010, to forestall a foreclosure sale of the Gillioz Theater by Guaranty Bank on account of a $3.5 million loan. Judge Arthur B. Federman presides over the cases. David E. Schroeder, Esq. -- bk1@dschroederlaw.com -- at David Schroeder Law Offices, PC, in Springfield, Missouri, represents both Debtors. The Trust estimated assets and debts of $1 million to $10 million in its Chapter 11 petition. Gillioz Restoration estimated under $50,000 in assets and $1 million to $10 million in debts. STANWELL DRIVE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Stanwell Drive Properties,L.P. 1333 Willow Pass Road, Suite 211 Concord, CA 94520 Bankruptcy Case No.: 11-41379 Chapter 11 Petition Date: February 8, 2011 Court: United States Bankruptcy Court Northern District of California (Oakland) Judge: Edward D. Jellen Debtor's Counsel: James J. Ficenec, Esq. TITCHELL, MALTZMAN, MARK AND OHLEYER Hartford Bldg. 25th Fl. 650 California St. San Francisco, CA 94108-2606 Tel: (415) 392-5600 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Richard L. Rosenberry, president of Shamrock Development Co., Debtor's partner. STONEWALL MINER: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Stonewall Miner LLC 84 State Street, Suite 300 Boston, MA 02109 Bankruptcy Case No.: 11-10937 Chapter 11 Petition Date: February 8, 2011 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Todd B. Gordon, Esq. THE GORDON LAW FIRM LLP 101 Federal Street, 17th Floor Boston, MA 02110 Tel: (617) 261-0100 Fax: (617) 261-0789 E-mail: tgordon@gordonfirm.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 three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mab11-10937.pdf The petition was signed by James McAuliffe, manager of Abbott Real Estate Development, LLC. SUNCAL COS: To Appeal Approval of Lehman-Trustee Settlement ----------------------------------------------------------- Joseph Checkler, writing for Dow Jones Newswires, reports that SunCal Cos. is asking a bankruptcy judge to stay the Chapter 11 exit of a handful of stalled Southern California real-estate projects while it appeals a ruling approving a deal between Lehman Brothers Holdings Inc. and Alfred H. Siegel, the bankruptcy trustee overseeing the projects. SunCal said a denial of its stay request "will eliminate any other viable avenue for a plan of reorganization or liquidation for the property debtors by either the trustee or any third party." Dow Jones recounts that Judge Erithe A. Smith later in January said creditors of the stalled projects could vote on a plan to bring the properties out of Chapter 11. The Troubled Company Reporter, citing a report by Dow Jones Newswires' Patrick Fitzgerald, on December 30, 2010, ran a story on the approval of the compromise between Lehman and Siegel. Dow Jones relates the plan, filed by Mr. Siegel, describes how he intends to pay the projects' creditors. The key component of the plan is a compromise between Mr. Siegel and Lehman's commercial paper unit that calls for the trustee to sell the properties through a Chapter 11 plan. Lehman and other first-lien lenders, owed $230 million, will have the right to bid their debt to acquire the land. The initial bid will be $45 million. Lehman has agreed to cover the trustee's expenses and allow a portion of the sale proceeds and any other recoveries to flow to unsecured creditors. According to Dow Jones, SunCal contends that the trustee hasn't proved the deal is fair to all creditors. "The trustee has failed to provide material information which would allow the court and creditors to evaluate the merits, or lack thereof, inherent in this proposed compromise," SunCal said. SunCal also added, "The compromise sets in stone terms that make it impossible for any third party to file a competing plan of reorganization for the debtors, thereby providing an unfair advantage in the ongoing plan confirmation fight." Dow Jones relates a confirmation hearing on the plan is set to begin on April 1. If Judge Smith doesn't sign an order confirming the plan by April 30, Lehman can move to foreclose on the properties. Dow Jones notes Mr. Siegel has sued the junior lenders to the projects, Gramercy Capital Corp.'s Gramercy Warehouse Funding I LLC, the agent for the projects' second-lien lenders, and Square Mile Structured Debt LLC, the agent for the third-lien lenders, saying their loans made the unfinished subdivisions insolvent. If successful, such a move would virtually ensure that the lenders those agents represent wouldn't see any recovery from the three developments' bankruptcy cases. Lehman pumped more than $2.3 billion into various SunCal projects during the height of the last decade's California real-estate boom. Lehman and SunCal, a family owned developer based in Irvine, Calif., have been battling for more than two years over the fate of more than 20 real-estate projects in bankruptcy courts in New York and California. In 2006, Lehman, along with other senior lenders, loaned the SunCal projects at issue more than $300 million, with $144 million of that amount going to the projects' owners as a dividend. Mr. Siegel is also suing the former owners -- among them various SunCal-related affiliates and a private equity real estate fund spun out from Lehman -- to recover that dividend payment. The Siegel plan releases Lehman and the first-lien lenders from liability involving the dividend while giving them a stake in any recoveries from Mr. Siegel's lawsuit. About SunCal Companies SunCal Companies -- http://www.suncal.com/-- has more than 250,000 residential lots and 10 million square feet of commercial space in various stages of development throughout California, Arizona, Nevada and New Mexico. Some of SunCal's communities include Amerige Heights in Fullerton, Lincoln Crossing near Sacramento and Terra Lago and Fairway Canyon near Palm Springs. SunCal Companies recently added an active-adult, commercial, homebuilding, multifamily and urban divisions; and expanded to Florida, Texas and Washington, D.C. Irvine, California-based Palmdale Hills Property, LLC, develops real estate property. It filed for Chapter 11 protection on Nov. 6, 2008 (Bankr. C. D. Calif. Case No. 08-17206). Affiliates who also filed separate Chapter 11 petitions include: SunCal Beaumont Heights, LLC; SunCal Johannson Ranch, LLC; SunCal Summit Valley, LLC; SunCal Emerald Meadows LLC; SunCal Bickford Ranch, LLC; SunCal Communities I, LLC; SunCal Communities III, LLC; and SJD Development Corp. Paul J. Couchot, Esq., at Winthrop Couchot P.C., represents Palmdale Hills in its restructuring effort. The Company estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. 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. 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) TAYLOR BEAN: Wins Nod to Sell Mortgage Loans to Selene ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports Taylor Bean & Whitaker Mortgage Corp. was authorized last week to sell 678 mortgage loans that had an aggregate unpaid principal balance of $87.2 million in December. The buyer is Selene Finance LP. There were no competing bids and thus no auction. The contract called for a price of $31.2 million, subject to adjustment. Mr. Rochelle recounts that Selene previously paid Taylor Bean $81.2 million for 1,046 parcels of repossessed real estate. About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala- based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 09-07047) on August 24, 2009. Taylor Bean filed the Chapter 11 petition three weeks after federal investigators searched its offices. The day following the search, the Federal Housing Administration, Ginnie Mae and Freddie Mac prohibited the company from issuing new mortgages and terminated servicing rights. Taylor Bean estimated more than $1 billion in both assets and liabilities in its bankruptcy petition. Jeffrey W. Kelly, Esq., and J. David Dantzler, Jr., Esq., at Troutman Sanders LLP, in Atlanta, Ga., and Russel M. Blain, Esq., and Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Fla., represent the Debtors. Paul Steven Singerman, Esq., and Arthur J. Spector, Esq., at Berger Singerman PA, in Miami, Fla., represent the Committee. BMC Group, Inc., serves as the claims and noticing agent. TED B WATTS: BankTrust's Objection to Espy Fees Overruled --------------------------------------------------------- Bankruptcy Judge William R. Sawyer overruled BankTrust's objection to the most recent application for compensation made by Espy, Metcalf & Espy, P.C., the attorney for Ted B. Watts Sr. BankTrust contends that some of the services benefitted only the Debtor but not the estate. BankTrust identifies 44 time entries for professional services totaling $8,781.00 and six expense items totaling $310.00. The disputed time entries relate to two primary activities -- the Debtor's objection to BankTrust's claim, and the Debtor's objection to confirmation of the Plan proposed by the Unsecured Creditor's Committee. BankTrust filed a claim for $4,073,783.39. It later reduced the Claim to $992,050.28. The Court heard the Debtor's objection and overruled it, allowing the amended claim of BankTrust as filed. Judge Sawyer held that the amount of the fees questioned is roughly $8,000, to examine the propriety of an indebtedness of $4 million, later reduced to slightly less than $1 million resulting from the application of sale proceeds as well as the application of payments from co-guarantors. According to Judge Sawyer, it was certainly appropriate for the Debtor to question the propriety of a $4 million claim. This examination benefitted not only the estate but the other creditors as well. Counsel for BankTrust also argued that the Debtor's counsel spent time opposing the Plan of the Unsecured Creditor's Committee on the grounds that it would impose adverse tax consequences on the Debtor individually. The Court discussed its understanding of tax consequences in liquidation proceedings in an order entered December 3, 2010. According to Judge Sawyer, "it appears that the Debtor was understandably concerned the proposed plan of the Unsecured Creditor's Committee would invert the usual tax treatment of sales in liquidation proceedings and rather treat the confirmation of the Plan has a taxable event, with adverse consequences to the Debtor individually. It strikes one as anomalous that the Unsecured Creditors Committee would propose a Plan attempting to improperly cast adverse tax consequences on the Debtor and then complain that because the Debtor was merely protecting himself from the predatory activities of the Unsecured Creditor's Committee, he was not benefitting the estate." Judge Sawyer said "the more accurate way to look at this matter is that the Debtor was merely trying to insure that the Plan of the Unsecured Creditor's Committee would operate in a manner consistent with the intent of the Bankruptcy Code and the Internal Revenue Code. Cast in this light, the Court concludes that the activities of counsel for the Debtor did in fact benefit the estate." A copy of the Bankruptcy Court's February 7, 2011 Memorandum Decision is available at http://is.gd/OPBkXLfrom Leagle.com. About Ted B. Watts Montgomery, Alabama-based Ted B. Watts, Sr., aka Theodore B. Watts, Sr., and Theodore Benjamin Watts, Sr., filed for Chapter 11 bankruptcy (Bankr. M.D. Ala. Case No. 09-30663) on March 12, 2009. Collier H. Espy, Jr., Esq. -- kc@emppc.com -- at Espy, Metcalf & Espy, P.C., in Dothan, Alabama, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets, and $10 million to $50 million in debts. TRANSDIGM INC: Moody's Affirms 'B1' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service affirmed TransDigm Inc.'s B1 Corporate Family and Probability of Default ratings, the Ba2 rating on the company's $245 million senior secured revolving credit as well as the B3 rating on the $1.6 billion senior subordinated note issues due 2018. Moody's assigned a Ba2 rating to the new $1.55 billion senior secured term loan due 2017. The Ba2 rating on the company's existing $1.55 billion senior secured term loan due 2016 will be withdrawn at the close of the refinancing. The rating outlook is negative. Ratings Affirmed: * Corporate Family Rating, B1; * Probability of Default Rating, B1; * $245 million senior secured revolving credit facility due December 2015, Ba2 with LGD assessment changed to LGD2, 23% from LGD2, 24%; * $1.6 billion senior subordinated notes due December 2018, B3 with LGD assessment changed to LGD5, 79% from LGD5, 80%; * Outlook, Negative Ratings Assigned: * $1.55 billion senior secured term loan B due February 2017, Ba2 (LGD2, 24%); * The Ba2 rating on the company's current $1.55 billion term loan will be withdrawn at the close of the transaction. Ratings Rationale The B1 CFR reflects TransDigm's record of revenue growth and operating profitability driven by its wide collection of niche products and its high margin aftermarket focus, product position on most aircraft, and the proprietary and sole sourced nature of most of its product offering. The B1 rating also considers TransDigm's strong operating performance, robust margins, and cash generation which will enable the company to service its increased debt level from the sizeable December 2010 acquisition of McKechnie Aerospace Holdings, Inc. and reduce leverage near-term to levels again more commensurate with the B1 rating. It is Moody's opinion that McKechnie's business profile largely parallel's TransDigm's -- highly proprietary products, significant margins, and major platform position in both OEM and aftermarket on most currently produced Boeing and Airbus aircraft. Moody's anticipates that over the near-term TransDigm will be able to implement its value driven operating strategy, including pricing adjustments, to maximize the profitability of the acquisition and grow TransDigm's revenues and earnings accordingly. TransDigm's February 2011 announcement of its intended sale of McKechnie's lower margin, less proprietary fasteners business (gross proceeds of $240 million) to Alcoa Inc. confirms management's adherence to the business model that has successfully driven the company to date. Additionally, TransDigm's ratings benefit from the company's very good liquidity profile including a $245 million undrawn revolver; a substantial cash position of over $200 million at 1/1/11, following the close of the McKechnie transaction; as well as the expectation for continued strong positive free cash flow generation. The ratings however are constrained by the increase in leverage and very high absolute debt level (over 300% of revenue following the McKechnie acquisition), use of acquisitions as a major driver in its growth strategy, and the company's history of a shareholder friendly financial policy of re- leveraging. For the LTM period ended 1/1/11, TransDigm's leverage is 7.6 times, on a Moody's adjusted basis, although, while this ratio reflects the increased debt from the transaction, it is balanced by only 10 days of McKechnie's earnings due to the timing of the acquisition. Moody's anticipates that the company's leverage will decrease to closer to 6 times debt to EBITDA, also on a Moody's adjusted basis, by the end of FY'11; however, this level would still be outside the normal leverage levels for a B1 rating. Moody's anticipates that the company's leverage will likely fall to levels more closely aligned with B1 rated issuers over the next 12 -- 18 months as the company receives the earnings benefits from the acquisition, in addition to Moody's expectation of continued modest organic growth due to the improved aviation aftermarket environment. Moody's anticipates that the new $1.55 billion senior secured term loan B due 2017 rated Ba2 (LGD2, 23%) will be identical to the existing $1.55 billion senior secured term loan B due 2016 except for pricing, the maturity, the absence of financial covenants, and the addition of a one year soft call. As a result, the instrument rating on the new term loan is the same as that on the existing term loan rated in December 2010. The negative rating outlook continues to highlight the increased financial risk due to the major increase in funded debt, $1.4 billion or nearly 80%, following the McKechnie acquisition, particularly as it follows by only one year the debt financed $405 million special dividend. The negative outlook also reflects Moody's expectations that leverage, while likely to decrease from 1/1/11 levels, will remain high for the B1 rating category through FY 2011, despite the improved aviation aftermarket environment. However, Moody's anticipates that this deleveraging will more likely occur from the maintenance or improvement of its markedly robust margins and earnings growth, rather than substantial debt repayment over the next 12 -- 18 months. The rating could decline if the company fails to reduce leverage from current levels, pursues recurring aggressive equity friendly transactions (dividends, etc.) or, though unexpected, experience a sustained decline in operating margins leading to a decline in operating cash flow. The rating outlook could be stabilized if leverage is reduced and sustained at below 5x debt to EBITDA. The last rating action for TransDigm was on November 1, 2010, when the company's B1 CFR and PDR were affirmed, a Ba2 rating was assigned to the company's new revolver and term loan, a B3 was assigned to the proposed new senior subordinated note issuance, and the rating outlook was changed to negative. On December 1, 2010, Moody's affirmed these ratings upon deal size changes. TransDigm Inc., headquartered in Cleveland, Ohio, is a leading manufacturer of engineered aerospace components for commercial airlines, aircraft maintenance facilities, original equipment manufacturers and various agencies of the US Government. TransDigm Inc. is the wholly-owned subsidiary of TransDigm Group Incorporated. Net sales for the last 12 month period ending 1/1/11 were approximately $900 million. Pro-forma to include McKechnie, LTM revenue would approximate $1.1 billion. (These revenue numbers do not include full year impact of certain acquisitions made during the LTM period.) TRICO MARINE: Creditors Approve Reworked Settlement --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Trico Marine Services Inc. has a revised settlement with creditors of its non-bankrupt subsidiaries that has gained support from parties-in-interest. The revised settlement was scheduled for hearing on Feb. 10. Mr. Rochelle recounts that as originally proposed, holders of $400 million in 11.875% notes secured by non-bankrupt Trico operating companies would end up owning all of the non-bankrupt subsidiaries that provide subsea services. In return, the bankrupt parent Trico companies were to receive warrants for 5% of common stock issued in the spinoff. The official creditors' committee of the parent was opposed and had a motion on file for authority to sue and set aside fraudulent transfers involving the non-bankrupt subsidiaries. The creditors' committee dropped opposition to the settlement after the pot was sweetened. The Creditors Committee, Mr. Rochelle's discloses, said in its papers that Tennenbaum Capital Partners LLC is the only creditor remaining in opposition. The U.S. Trustee also had objected to the settlement, arguing it shouldn't be approved without the protections accompanying the confirmation of a Chapter 11 plan. According to Mr. Rochelle, the revised settlement calls for the parent and its creditors to receive five-year warrants for 10% of the stock. In addition, creditors of the parent will take 5% of the equity of the operating subsidiaries plus $1 million cash. About Trico Marine Headquartered in Texas, Trico Marine Services, Inc. -- http://www.tricomarine.com/-- provides subsea services, subsea trenching and protection services, and towing and supply vessels. Trico filed for Chapter 11 protection on August 25, 2010 (Bankr. D. Del. Case No. 10-12653). John E. Mitchell, Esq., Angela B. Degeyter, Esq., and Harry A. Perrin, Esq., at Vinson & Elkins LLP, assist the Debtor in its restructuring effort. The Debtor disclosed US$30,562,681 in assets and US$353,606,467 in liabilities as of the Petition Date. Affiliates Trico Marine Assets, Inc. (Bankr. D. Del. Case No. 10-12648), Trico Marine Operators, Inc. (Case No. 10-12649), Trico Marine International, Inc. (Case No. 10-12650), Trico Marine Cayman, L.P. (Case No. 10-12651), and Trico Holdco, LLC (Case No. 10-12652) filed separate Chapter 11 petitions. Cahill Gordon & Reindell LLP is the Debtors' special counsel. Alix Partners Services, LLC, is the Debtors' chief restructuring officer. Epiq Bankruptcy Solutions is the Debtors' claims and notice agent. Postlethwaite & Netterville serves as the Debtors' accountant and Ernst & Young LLP serves as tax advisors. Pricewaterhousecoopers LLC provides the independent accountants and tax advisors for the Debtors. Aside from the Cayman Islands holding company, Trico's foreign subsidiaries were not included in the filing and will not be subject to the requirements of the U.S. Bankruptcy Code. The Official Committee of Unsecured Creditors tapped Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl & Jones LLP, in Wilmington, Delaware, and Andrew K. Glenn, Esq., David J. Mark, Esq., and Daniel A. Fliman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, as counsel. TRICO MARINE: Silverback Asset Ceases to Own Common Shares ---------------------------------------------------------- In a regulatory filing Monday, Silverback Asset Management LLC, Investcorp Investment Advisers Limited, Investcorp Silverback Arbitrage Master Fund Limited, and Elliot Bossen, disclose that as of December 31, 2010, they have ceased to beneficially own any shares of Trico Marine Services, Inc.'s Common Stock, Par Value $0.01. A full-text copy of the SC 13G (Amendment No. 3) is available for free at http://researcharchives.com/t/s?730d About Trico Marine Headquartered in Texas, Trico Marine Services, Inc. -- http://www.tricomarine.com/-- provides subsea services, subsea trenching and protection services, and towing and supply vessels. Trico filed for Chapter 11 protection on August 25, 2010 (Bankr. D. Del. Case No. 10-12653). John E. Mitchell, Esq., Angela B. Degeyter, Esq., and Harry A. Perrin, Esq., at Vinson & Elkins LLP, assist the Debtor in its restructuring effort. The Debtor disclosed US$30,562,681 in assets and US$353,606,467 in liabilities as of the Petition Date. Affiliates Trico Marine Assets, Inc. (Bankr. D. Del. Case No. 10-12648), Trico Marine Operators, Inc. (Case No. 10-12649), Trico Marine International, Inc. (Case No. 10-12650), Trico Marine Cayman, L.P. (Case No. 10-12651), and Trico Holdco, LLC (Case No. 10-12652) filed separate Chapter 11 petitions. Cahill Gordon & Reindell LLP is the Debtors' special counsel. Alix Partners Services, LLC, is the Debtors' chief restructuring officer. Epiq Bankruptcy Solutions is the Debtors' claims and notice agent. Postlethwaite & Netterville serves as the Debtors' accountant and Ernst & Young LLP serves as tax advisors. Pricewaterhousecoopers LLC provides the independent accountants and tax advisors for the Debtors. Aside from the Cayman Islands holding company, Trico's foreign subsidiaries were not included in the filing and will not be subject to the requirements of the U.S. Bankruptcy Code. The Official Committee of Unsecured Creditors tapped Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl & Jones LLP, in Wilmington, Delaware, and Andrew K. Glenn, Esq., David J. Mark, Esq., and Daniel A. Fliman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, as counsel. TSG INC: Cash Collateral Hearing Continued Until March 30 --------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania, according to the Debtor's docket, has continued until March 30, 2011, at 11:00 a.m., the hearing to consider TSG Incorporated's further cash collateral access. Previously, the Court authorized the Debtor to use the cash collateral of PNC Bank, National Association. The Troubled Company Reporter reported on October 26, 2010, that as of petition date, the Debtor's indebtedness consists of: -- $2,345,138 under the term loan; -- $1,745,257 under the committed line of credit; -- $845,833 under he capital expenditures line of credit; and -- $98,070 under the SWAP agreement. The Debtor would use the cash collateral to operate its business postpetition. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant PNC a replacement lien on all properties and assets of the Debtor except for the Debtor's interest in the real property located at (a) 1006 19th Street SW, Hickory, North Carolina; (b) 5275 Wolfe Road, Hickory, North Carolina; and (c) 1703 Pineview Street, Conover, North Carolina. As additional adequate protection, the Debtor will make periodic cash payments to PNC. Pursuant to the order, the Debtor may not use, sell, or otherwise transfer any of its assets outside the ordinary course of business, without the written consent of PNC. About TSG Incorporated North Wales, Pennsylvania-based TSG Incorporated operates a real estate business. Founded in 1901 under the name of Levy's International Water Shrinking and Drying Company, the Debtor has operated as a privately held, family owned business for over 108 years. Locally headquartered in North Wales, Pennsylvania, the Debtor is in the business of fabric finishing, coating and embossing. TSG -- which is an acronym for "The Synthetics Group" -- is one of the largest commission finishers in the United States. The Company filed for Chapter 11 bankruptcy protection on November 29, 2009 (Bankr. E.D. Pa. Case No. 09-19124). Michael Jason Barrie, Esq., at Benesch Friedlander Coplan & Aronoff LLP assists the Debtor in its restructuring effort. The Company listed $10 million to $50 million in assets and $1 million to $10 million in liabilities. ULTIMATE ACQUISITION: U.S. Trustee Names 7-Member Creditors Panel ----------------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, has named seven members to the official committee of unsecured creditors in the bankruptcy case of Ultimate Acquisition Partners, LP, et al., pursuant to Section 1102(a)(1) of the Bankruptcy Code: 1. Valassis Attn: Hal Manoian One Targeting Centre Windsor, CT 06095 Phone: 860-235-6336 Fax: 860-285-6480 2. Synnex Corporation Attn: Diane E. Maefs 39 Pelham Ridge Drive Greenville, SC 29615 Phone: 864-289-4223 Fax: 510-249-5444 3. Sony Electronics Inc. Attn: Alan Rubin 1 Sony Drive Park Ridge, NJ 07656 Phone: 201-930-7084 Fax: 201-930-7782 4. InLine Media, Inc. Attn: Nancy Haven 1600 Stout Street, Suite 700 Denver, CO 80202 Phone: 303-893-4040 Fax: 303-893-6718 5. Monster, LLC Attn: Ajay Vadera 455 Valley Drive Brisbane, CA 94005 Phone: 415-850-0026 Fax: 415-468-1604 6. Klipsch Group, Inc. Attn: Frederick L. Farrar 3502 Woodview Trace, Suite 200 Indianapolis, IN 46268 Phone: 317-860-8213 Fax: 317-860-9190 7. JB Hunt Transport, Inc. Attn: Clark Woods 615 JB Hunt Corporate Drive Lowell, AR 72745 Phone: 479-419-3504 Fax: 479-820-1717 About Ultimate Electronics Ultimate Acquisition Partners LP and CC Retail, LLC, which own the U.S. consumer electronics store chain Ultimate Electronics, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-10245) on January 26, 2011. Ultimate Acquisition estimated assets and liabilities between $100 million and $500 million. Ultimate Acquisition Partners LP and CC Retail, LLC are specialty retailers of high-end entertainment and consumer electronics with 46 stores in over a dozen states, primarily in the mid-west and western United states. Of the 46 stores, 35 are operated by UAP and 11 are operated by CC Retail. All are operated under the name "Ultimate Electronics". UAP and CC Retail have more than 1,500 full-time and part-time employees. Kathleen Campbell Davis, Esq., Mark T. Hurford, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine LLC, serve as the Debtor's bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. USHC LLC: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: USHC, LLC 3926 W Hwy 146 Buckner, KY 40010 Bankruptcy Case No.: 11-30583 Chapter 11 Petition Date: February 9, 2011 Court: United States Bankruptcy Court Western District of Kentucky (Louisville) Debtor's Counsel: David M. Cantor, Esq. SEILLER WATERMAN LLC 462 S. 4th Street, Ste 2200 Louisville, KY 40202 Tel: (502) 584-7400 Fax: (502) 583-2100 E-mail: cantor@derbycitylaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Steve Willis, member. VULCAN ENERGY: S&P Withdraws 'BB' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services said it withdrew Vulcan Energy Corp.'s 'BB' issue rating and '3' recovery rating. At the same time, S&P is withdrawing Vulcan's BB/Stable/-- corporate credit rating at the issuer's request. Vulcan's sole assets consisted of its 50.1% ownership stake in the general partner of Plains, and an approximate 9% ownership stake in Plains' limited partnership units. Vulcan substantially completed sale of its interest in the GP in December 2010 to existing owners of the GP or their affiliates. Vulcan used the proceeds to fully repay the $277.2 million term loan balance which was originally due in 2015, and all accrued interest. With no debt outstanding S&P is withdrawing its issue ratings, and also withdrawing its corporate credit rating at Vulcan's request. WARNER MUSIC: Moody's Reviews 'Ba3' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service placed on review for possible downgrade its ratings for Warner Music Group Corp., including the company's Ba3 Corporate Family Rating, Probability of Default Rating and individual instrument ratings, as outlined below. The review is prompted by weaker than expected operating performance which has led to high leverage relative to the company's current credit ratings. The weaker than expected results are highlighted by WMG's results for its first fiscal quarter ended December 31, 2010 indicating a 14% revenue decline for the fiscal quarter compared to the same period in the prior year. This decrease reflects the negative impact of industry pressures related to competition and the transformation of music distribution from physical to digital, both domestically and internationally. These ratings were placed on review for possible downgrade: * Corporate Family Rating, Ba3 * Probability of Default Rating, Ba2 * Senior Subordinated Regular Bond/Debenture, B1, LGD6 * Senior Unsecured Regular Bond/Debenture, B1, LGD6 * Senior Secured Regular Bond/Debenture, Ba2, LGD3 As a result of the decrease in revenue and EBITDA over the past 9 months in combination with recent acquisitions and artist and repertoire investments (A&R spending), WMG's net debt-to-EBITDA ratio (including Moody's standard adjustments) exceeds 5.2x at 12/31/10 which compares to a level under 4.0x in 2009, and is presently above Moody's stated 4.25x sustained leverage trigger that would put downward pressure on the company's ratings. In light of the company's under performance relative to expectations, the focus of Moody's review includes these: management's commitment to maintain moderate leverage and its ratings, including the ability to take near term actions that might mitigate concerns related to revenue declines; WMG's plans to improve operating performance over the intermediate term in light of competition and challenging industry dynamics; expectations for working capital requirements as well as potential strategies for continued acquisitions and A&R spending; and the company's targets for net debt-to-EBITDA ratios, liquidity and free cash flow The last rating action was on May 19, 2009 when Moody's upgraded WMG's Corporate Family Rating to Ba3 as well as associated instrument ratings, and assigned ratings to WMG Acquisition Corp.'s $1.1 billion Senior Secured Notes due 2016. WMG's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside WMG's core industry and believes WMG's ratings are comparable to those of other issuers with similar credit risk. Warner Music Group Corp., with its headquarters in New York, is a leading music content company, with domestic and international operations in recorded music and music publishing. Annual revenues through its first fiscal quarter ending December 31, 2010, were approximately $2.9 billion. WASHINGTON MUTUAL: May Deadline Set for Insider Trading Probe ------------------------------------------------------------- Steven Church at Bloomberg News reports that U.S. Bankruptcy Judge Mary F. Walrath has set a May deadline for a committee of shareholders to question hedge funds about allegations they used confidential information to trade in the bankrupt company's securities. As reported in yesterday's Troubled Company Reporter, Judge Walrath has authorized a shareholder investigation into the trading activities of hedge funds Appaloosa Management LP, Aurelius Capital Management LP, Centerbridge Partners LP and Owl Creek Asset Management LP, which sat at the Chapter 11 bargaining table when Washington Mutual Inc.'s Chapter 11 plan was hammered out. The probe was approved over objections by the hedge funds. According to the Bloomberg report, the insider-trading investigation must be concluded before the May hearing, where shareholders will use any information collected to attack the proposed plan and the settlement. Judge Walrath ordered the hedge funds to turn over the information within two weeks. Bloomberg relates that the hedge funds will be required to reveal details of their purchases and sales in WaMu debt since the company filed bankruptcy and any protections they put in place to avoid misusing confidential information. "The allegation that troubles the court is that you used that information to trade in the debtors' securities," Bloomberg quoted Judge Walrath as saying to a lawyer for one of the four hedge funds. "I don't know of anybody who feels that is proper." Bloomberg recounts that after WaMu filed for bankruptcy in 2008, hedge funds bought debt securities, some for pennies on the dollar, issued by the bank holding company and its former banking unit, Washington Mutual Bank. The hedge funds then battled each other, shareholders, creditors, regulators and JPMorgan Chase & Co., about how to divide the Company's assets. "We feel highly confident there will be no issue, but it will be extremely expensive to litigate," Thomas Moers Mayer, Esq., an attorney for Aurelius, told Judge Walrath during the hearing, according to Bloomberg. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. Fred S. Hodera, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York City and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unseucred Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired WaMu's assets prior to the Petition Date. WELLPOINT SYSTEMS: Under Receivership in Canada; Files Ch. 15 ------------------------------------------------------------- Wellpoint Systems Inc., which is under receivership in Canada, sought bankruptcy protection from creditors under Chapter 15 in the U.S. Wellpoint is asking the U.S. court to recognize the Canadian receivership as the foreign main proceeding in its reorganization. The Canadian receivership commenced under the Bankruptcy and Insolvency Act, and is pending before the Court of Queen's Bench of Alberta in Calgary. Ernst & Young Inc. is the court-appointed receiver. According to court filings, Quorum Oil and Gas sought the receivership on January 31. Calgary-based Wellpoint design software packages for the oil and natural-gas industry. Wellpoint provides software and other products to more than 450 companies in 60 countries. Wellpoint estimated both debt and assets of as much as US$50 million. US affiliate Wellpoint Systems (USA) owes creditors as much as US$100 million. Comerica Bank is the first ranking secured creditor and is owed CN$882,600. Quorum and Sirocco Holdings, Inc., are the second ranking secured creditors, with Quorum owed US$18,951,000 and Sirocco owed US$2,420,000 pursuant to certain secured debentures. Deryck Helkaa, senior vice president to Ernst & Young, as the Canadian court-appointed receiver, said, "In 2010, the Debtors suffered a significant decline in revenue and liquidity due to a significant drop in business operations and revenue. Since June 2010, the Debtors have been unable to meet their obligations to the Secured Debenture Lenders and have not made any payments of interest under the Secured Debentures since April 2010. As a result, the Debtors are currently in default of their obligations under the Secured Debentures." According to Mr. Helkaa, the receiver has been ordered to market and sell the Debtors' assets in an expeditious manner in order to maximize recoveries. He said that in the event a sale is not consummated on a relatively short time frame, several of the critical employees will seek out alternative employment and significant customers will begin the process of resourcing. An entity named Wellpoint Acquisitionco Inc., has been named as stalking horse bidder in connection with the sale process. It has agreed to pay US$28,000,000 for the Debtors' assets. WELLPOINT SYSTEMS: Chapter 15 Case Summary ------------------------------------------ Foreign Representative: Ernst & Young, Inc., as court-appointed receiver Chapter 15 Debtor: Wellpoint Systems Inc. 2000-500 4 Avenue SW Calgary, AB T2P 2V6 Canada Chapter 15 Case No.: 11-10423 Debtor-affiliates also subject to Chapter 15 petitions: Entity Case No. ------ -------- Wellpoint Systems, Inc. 11-10424 Wellpoint Systems (USA), Inc. 11-10426 WPS Systems Inc. 11-10427 Chapter 15 Petition Date: Feb. 10, 2011 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Bankruptcy Judge: Mary Walrath About the Debtors: Wellpoint Systems is a designer of software packages for the oil and natural-gas industry. Wellpoint is in receivership in Canada. The receiver wants the U.S. Bankruptcy court to recognize the Canadian receivership as the foreign main proceeding in its reorganization. Petitioner's Counsel in Chapter 15 Case: Jeremy William Ryan POTTER ANDERSON & CORROON LLP 1313 N. Market Street P.O Box 951 Wilmington, DE 19801 Tel: (302) 984-6108 Fax: (302) 778-6108 E-mail: jryan@potteranderson.com - and - Ryan M. Murphy POTTER ANDERSON & CORROON LLP 1313 Market Street Wilmington, DE 19801 Tel: (302) 984-6250 Fax: (302) 658-1192 E-mail: rmurphy@potteranderson.com Estimated Assets: $50 million to $100 million Estimated Debts: $50 million to $100 million The Chapter 15 petitions were signed by Deryck Helkaa, senior vice president to Ernst & Young, the Canadian court-appointed receiver. * Debt Maturity Wall Crumbles by $482 Billion --------------------------------------------- Bloomberg News reports that the wall of bonds and loans maturing through 2014 has crumbled by $482 billion, or 44%, since 2009, reducing the threat of defaults and allowing companies to bring riskier deals to market. The amount of debt due in the next four years dropped to $671 billion, from $1.2 trillion in 2009, according to JPMorgan Chase & Co. About $163 billion of bonds and loans come due in 2011 and 2012, or about 60% of the refinancing activity in 2010. * S&P: Bank Ratings Can Withstand Loan Buybacks ----------------------------------------------- Based on 2010 pretax earnings results and Standard & Poor's Ratings Services' estimate of the likelihood of a protracted duration of remaining put-back expense (roughly two years), mortgage put-backs should have no direct impact on ratings by themselves, said a report released February 8 titled, "Reassessing The Cost Of Mortgage Put-Back Risk For The U.S. Banking Industry." Put-backs from breaches of representations and warranties made as part of the mortgage underwriting process continued to suppress large U.S. banks' earnings in fourth-quarter 2010. But the drag on earnings was less than in the previous quarter. Given their position as the largest residential lenders in the industry, the six complex banks we cover will likely absorb the bulk of projected loan-repurchase expenses. "We believe the majority of agency put-back exposure has already been expensed. There is also a protracted timeline for the remaining expenses to be recognized. Based on banks' 2010 pretax earnings and our projection that 2011 earnings will be even higher, representations and warranty expenses should easily be covered," said Standard & Poor's credit analyst Stuart Plesser. The report is available to subscribers of RatingsDirect on the Global Credit Portal at http://www.globalcreditportal.com/ * Moody's: Defaults and Recoveries Underscore Severity of Crisis ---------------------------------------------------------------- The incidents of defaults among financial institutions during the recent financial crisis was unprecedented, according to Moody's latest annual analysis of defaults and recoveries. The period 2008-2010 saw 111 financial companies default, including 72 debt issuers holding $318 billion of bonds and loans in the 2008-2010 period. By comparison, there were only 96 defaults, affecting $46 billion of debt, of Moody's-rated financial companies in the period 1983 -- 2007. Of these, 36 defaults took place during the U.S. Savings and Loans Crisis of 1989-1991, affecting $6 billion of debt. "Historically, defaults in the financial sector were fairly low except during the Savings and Loan crisis," says Sharon Ou, Assistant Vice President at Moody's Investors Service who authored the report. "Financial institution defaults during the recent crisis were unprecedented both in number and volume." The default rate for all Moody's-rated financial institutions rose sharply during 2008-2009 and reached its cyclical peak of 2.7% in August 2009, according to the Moody's report. It surpassed the previous record of 2.3% set during the Savings & Loan Crisis. While relatively fewer financial institutions are speculative grade, among those firms the default rate topped out at 11.5% during the recent crisis, below the 1989-1991 peak of 19.5% when there were far fewer speculative-grade-rated financial issuers. In addition to being at unprecedented levels, defaults during the recent crisis have also been more globally distributed. During the crisis more than half of the financial institutions that defaulted were located in Europe, a region that historically had seen very few financial institution defaults. Specifically, during the past three years 56% of defaults have been located in Europe, compared to only 6% before 2008. About half the recent defaults were Ukrainian banks, which imposed deposit freezes in October 2008. In contrast to Europe, North America saw its share drop to only 37% in this cycle relative to 79% before 2008. The recent financial crisis also saw a unique phenomenon in credit differentiation among various classes of debt, which was in part due to different levels of support governments offered to senior debt liabilities versus junior ones. Recovery rates on defaulted bonds during the crisis have held up surprisingly well, boosted by 15 distressed exchanges. For example, the average recovery rate for senior unsecured bonds has been 35.2% during 2008-2010, which is just slightly off the 1983- 2007 average of 39.4%. Financial institutions engaged in distressed exchanges during the recent crisis, which propped up the recovery rate. Looking into 2011, Moody's Credit Transition Model (CTM), which forecasts rating transitions, predicts that the default rate among speculative-grade financial institutions which issue debt will stabilize under the baseline economic scenario to a range of 1.5% - 3.0%. Under a more pessimistic scenario, CTM forecasts the default rate rebounding from its current 3.0% level to 6.5%. Available on Moodys.com "Defaults and Recoveries for Financial Institution Debt Issuers, 1983-2010" documents the default, recovery and rating transitions of Moody's-rated financial institutions since 1983. * Moody's: Global Default Rate Falls to 2.8% in January ------------------------------------------------------- The trailing 12-month global declined to 2.8% in January, down from its revised 3.2% level in December, according to Moody's Investors Service in its monthly default report. A year ago, the global default rate stood dramatically higher at 12.6%. No Moody's-rated corporate debt issuer defaulted in January, the first time there has been no default during a month since June 2007. By comparison, there were eight defaults in January 2010. "We continue to expect stable, low default rates for the near future," said Albert Metz, Moody's Director of Credit Policy Research. "Default rates would move upwards, however, should financing become scarce, particularly in Europe." Moody's forecasting model predicts that the global speculative- grade default rate will decline to 1.5% by January 2012. The model did a satisfactory job in projecting the rise and fall in default rates during the most recent credit cycle. For example, the model anticipated at the beginning of last year that the global default rate would fall sharply to 3.3% by year end and the actual rate came in at 3.2%. By region the model says the default rate will decline to 1.7% among U.S. speculative-grade issuers and to 1.1% among European speculative-grade issuers. By industry, Moody's expects default rates to be highest in the Hotel, Gaming, & Leisure sector in the U.S. and the Media: Advertising, Printing & Publishing sector in Europe. In the U.S., the speculative-grade default rate edged lower in January, to 3.0% from the revised December level of 3.4%. At this time a year ago, the U.S. default rate stood 13.7%. In Europe, the default rate among speculative-grade issuers was 2.3% in January, unchanged from the revised level for December. A year ago, the European default rate was at 10.5%. When measured on dollar volume basis, the global speculative-grade bond default rate remained unchanged at 1.6% from December to January. A year ago, the global dollar-weighted default rate stood at 16.4%. In the U.S., the dollar-weighted speculative-grade bond default rate ended January at 1.5%, down slightly from 1.6% in December. The same rate was 16.8% in January 2010. In Europe, the dollar-weighted speculative-grade bond default rate was 1.9% in January, unchanged from its revised level for December. At this time last year, the rate was 12.2%. Moody's speculative-grade corporate distress index-a measure of the percentage of high-yield issuers that have debt trading at distressed levels- fell from December's level of 10.5% to 8.6% in January. A year ago, the index was higher at 19.4%. Among U.S. leveraged loans, the trailing 12-month default rate fell from 2.8% in December to 2.5% in January. A year ago, the loan default rate was 11.5%. Moody's "January Default Report" is now available, as are Moody's other default research reports, in the Rating Analytics section of http://Moodys.com/ * State Bankruptcy Option 'Not the Answer,' House Panel Told ------------------------------------------------------------ Carla Main at Bloomberg News reports that two groups with differing political viewpoints told House lawmakers that giving states the power to file for bankruptcy protection to escape their debts is unnecessary and may exacerbate their fiscal strains. Officials at the Manhattan Institute for Policy Research and the Center on Budget & Policy Priorities, according to Bloomberg News, testified February 9 before the House Oversight and Government Reform Committee in Washington on whether states should be allowed to seek bankruptcy protection, as local governments can under Chapter 9. The panel is meeting to discuss ways to avert a potential rescue of cash-strapped state and municipal governments. "Congress is right to worry about how to avoid bailing out states and their investors," Nicole Gelinas, a fellow with the Manhattan Institute, told the committee in prepared remarks. "State bankruptcy is not the answer." The New York-based Manhattan Institute opposes taxes and promotes outsourcing to private companies and reduced government spending. Bloomberg relates that David Skeel, a University of Pennsylvania law professor who has championed allowing state bankruptcy, advocated the idea in testimony prepared for the committee yesterday. Iris Lav, a senior adviser with the Washington-based Center on Budget & Policy Priorities, said the proposal would do little to help ailing states, and its necessity "has not been proven," the report adds. House Republicans Rule Out Bail-Out Dow Jones' DBR Small Cap reports that U.S. House Republicans said Wednesday they are concerned about a "looming fiscal crisis" in state and local finances but ruled out any federal bailouts for states. The report relates that Rep. Patrick McHenry (R., N.C.), chairman of a House Oversight subcommittee, also warned about a lack of transparency for public pension plans and said Congress must understand the magnitude of the public pension "problem." Mr. McHenry, the report notes, spoke at a hearing examining mounting fiscal strains at the state and local level, financial problems exacerbated by the 2008 financial market turmoil, high jobless rate and corresponding reduction in state and local income tax receipts. U.S. lawmakers were asking whether congressional intervention is needed to ease difficulties faced by some states and municipalities, the report says. DBR adds that Rep. Mike Quigley of Illinois, the ranking Democrat on the panel, said Congress should rule out any "rash actions" that might harm states and localities. * * * As reported in the Jan. 24, 2011 edition of the Troubled Company Reporter, Newt Gingrich, the former speaker of the House of Representatives, is pushing for legislation that would allow U.S. states to file for bankruptcy. Mr. Gingrich, a Republican party figure and a potential presidential candidate for 2012, told Reuters that the legislation will likely be introduced in Congress February. Mr. Gingrich has championed on a move to change federal law that would let states file for bankruptcy in order to handle their long-term budget problems despite resistance from states and investors in the $2.8 trillion municipal bond market. Currently, Chapter 9 of the Bankruptcy Code, which allows cities, counties and other units of local government units to restructure their debts, doesn't include states. States have reported $140 billion of budget gaps for fiscal 2012 as the worst recession since the 1930s cut tax receipts by the largest amount on record, Bloomberg News reported, citing the Center on Budget and Policy Priorities, a Washington research group. The Republican party won control of the House in mid-term elections in November. However, Democrats still control the Senate and the White House. * LoPucki, UCLA Law Host One-Day Bankruptcy Conference Today ------------------------------------------------------------ On Friday, February 11, 2011, the UCLA School of Law will host a working meeting of about 17 leading big-case bankruptcy empiricists. The purpose of this one-day meeting, dubbed "Setting the Big-Bankruptcy Empirical Research Agenda," will be to identify the most important policy issues in the field and discuss how empirical methods can be brought to bear on them. The meeting is organized by UCLA law professor Lynn M. LoPucki. "Participation is by invitation only, but we do have a limited number of seats for observers," according to a statement about the meeting said. "Conference participants will recieve copies of the database in advance and by January 1, provide us with a single-page summary of their thoughts. The summary can be of the entire agenda, some portion of it, or a single study or problem he or she considers to be particularly worthy of attention. "Prior to the conference, participants will read and give some thought to the summaries provided by the other participants. At the conference, each participant will briefly remind the group of his or her ideas as we begin the session at which they will be discussed. "We encourage participants to begin work on the studies they think worthy, and to include preliminary results in their summaries. The last step in our process will be to decide whether to convene a second conference, in January of 2012, for discussion of the papers generated by the 2011 process and a reassessment of the agenda. A list of the conference participants and summaries of their agenda is available at: http://lopucki.law.ucla.edu/concept.htm http://lopucki.law.ucla.edu/summaries.htm * AHV Associates LLP Forms New Restructuring Team ------------------------------------------------- Thomas Lane & Andrew Bell have joined AHV Associates LLP to lead the firm's restructuring practice. Since 1997, Mr. Lane has led successful business restructurings, working with both management and funders in a combination of full time and project roles. As a member of KPMG's Restructuring Team, Mr. Lane was involved in high profile international turnarounds, and as a Director in Replus worked with alternative investments funds to maximize value in under-performing investments. Mr. Bell spent the last 12 years as an investment director at 3i and has many years of international banking, leasing and investment experience. Mr. Bell specializes in restructuring, refinancing and turnaround situations. During his time at 3i, Mr. Bell was responsible for a number of key deals. AHV Associates LLP -- http://www.ahvassociates.com-- specializes in providing advice to privately owned businesses in all aspects of corporate finance including company sales, acquisitions, raising capital and capital restructuring. The firm's clients are lower-mid market companies across all sectors. Within the AHV Network, the firm collaborates with other advisors like lawyers and accountants to provide their clients with a full corporate finance service. * Three Day Pitney Bankruptcy Pros Join Pryor Cashman ----------------------------------------------------- Bankruptcy Law360 reports that Pryor Cashman LLP has snagged a trio of partners from Day Pitney LLP's New York office to bulk up its bankruptcy, reorganization and creditors' rights group. According to Law360, the new hires, who joined Pryor Cashman on Jan. 28, include Ronald S. Beacher, who will co-chair the firm's practice group, and partners Michael H. Levison and Conrad K. Chiu. * BOOK REVIEW: Medical Jurisprudence, Insanity, and Toxicology -------------------------------------------------------------- Author: Henry C. Chapman Publisher: Beard Books Softcover: 329 pages Price: $34.95 Review by Henry Berry Mr. Chapman's book, first published in 1903, fits in with the current public fascination with forensic medicine. The popularity of such television shows as "CSI" and "ER" and the many best- selling books dealing with crimes solved by the collection and testing of physical evidence attests to the attraction of "medicine in relation to law," as Mr. Chapman puts it. Medical Jurisprudence, Insanity, and Toxicology offers an informative study on the commission of assaults and murders, their effects on victims, and their analysis to determine the cause and circumstances of death. Attorneys, medical pathologists, coroners, and expert witnesses are among those who will find this book to be especially useful. However, when Mr. Chapman first wrote this book in the late 1800s, he intended it to be read by regular medical doctors (in 1903, there were not nearly so many medical specialists as there are now), since "every physician . . . is liable to be called upon at any time during the course of his professional career to give testimony in cases of rape, foeticide, infanticide, death from poison, and from other causes." A professor of medicine and medical jurisprudence, Mr. Chapman addresses violent crimes in a professional manner and covers the troubling details in a detached, scientific style that serves this subject matter well. He also discusses the subtle ways in which death can be caused and how this can test the detection abilities of forensic doctors. Part of the challenge is that murders are often committed by perpetrators who have a knowledge of poisons, anatomy, and biology that is nearly equal to that of a forensic doctor. Consequently, for many crimes the cause of death is difficult to determine and, even when it can be determined, it can be difficult to prove legally. Medical Jurisprudence, Insanity, and Toxicology is especially useful when Mr. Chapman explains how to ascertain when death occurred and how it was caused. The author shows how evidence is gathered from the body of a victim and the surrounding area (i.e., the crime scene). These dual sources of evidence are correlated and current medical knowledge applied to create a hypothesis of the cause of death. The book is thorough in its coverage -- symptoms of death from suffocation, drowning, burns and scalds, heat and cold, lightning, starvation, wounds, and gun shot are among those discussed by the author. An autopsy can produce a wealth of evidence. One chapter in the book delves into the subject of wounds -- the different types of wounds (incised, contused, and penetrating), what kinds of weapons inflict them, and how they cause injury and death. An analysis of blood stains also adds to the forensic doctor's understanding of what happened. Mr. Chapman's discussion of this subject includes methods of examining blood and the conditions influencing the coagulation of blood. The author explains that what may appear suspicious to the untrained eye may, in fact, be benign. The liver of a newborn is one example. In the case of infanticide, a key issue is whether the child was born. Thus, the first step is to determine whether birth has occurred -- i.e., defined by the author as simply when a fetus has been entirely expelled from the mother's body. Mr. Chapman proceeds to describe some of the signs, such as condition of lungs, hair, and fingernails, that would verify that an infant had been "alive" and thus could have been a victim. The size of the infant's liver is another clue that can help answer this question. Contrary to what most persons would assume, says the author, "the liver of the fetus is larger than that of a recently born infant, and that of the infant larger than that of an eight or ten months old child." Armed with this knowledge, the size of a child's liver can play a role in determining if infanticide was committed and, if so, the age of the victim. However, Mr. Chapman also cautions that, "too much importance must not be attached to the size of the liver . . . since the difference in size . . . is only relative." In another section of the book, the author explains the effect on the human body of poisons, which can act locally or remotely or both. Arsenic, for example, affects the stomach locally and the brain remotely. Mr. Chapman further explains that, to be effective, most poisons "must be absorbed -- pass into the blood." However, there are also those poisons that act as a corrosive. Thus, the blood, brain, and viscera can all be examined for the presence of a poison. Mr. Chapman identifies the physical and psychological symptoms of poisoning and directs the reader where to look in the body for evidence that poison was ingested. The advances in medicine and medical forensics have not supplanted the relevance or value of Mr. Chapman's benchmark text. While new technology has been developed and testing procedures have become more refined, this book remains a seminal work on the application of forensic medicine in solving crimes and developing evidence for use in court. Henry C. Chapman (1845-1909) earned two medical degrees before entering the field of forensic medicine. The first was from the University of Pennsylvania in 1867. The second was from Jefferson Medical College (Philadelphia), where he became a professor of medical jurisprudence for over 20 years. ********* 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. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***