/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110221.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, February 21, 2011, Vol. 15, No. 51 Headlines 524 HOWARD: Case Summary & 5 Largest Unsecured Creditors A.C. MOORE: Board Explores Strategic Alternatives AE&E INC: Case Summary & 20 Largest Unsecured Creditors ALEXA PROFESSIONAL: Case Summary & Largest Unsecured Creditor AMERICAN EQUITY: Fitch Affirms 'BB+' Issuer Default Rating AMERICAN HOME: Credit Agricole Loses $478MM Claim Over Repo Deal AMERICA'S BREWING: Financial Woes Prompt Bankruptcy Filing ANCHOR BLUE: Court Approves Liquidation Plan ANGIOTECH PHARMACEUTICALS: Executes Settlement Deal With Rex ANGIOTECH PHARMACEUTICALS: Court Accepts Plan of Compromise AQUILEX HOLDINGS: S&P Affirms Corporate Credit Rating at 'B' ARKANOVA ENERGY: Posts $1.5 Million Net Loss in Dec. 31 Quarter ART DECO: Case Summary & 10 Largest Unsecured Creditors ATLANTIC LEASING: Voluntary Chapter 11 Case Summary BANK OF THE CAROLINAS: Halts Trust Preferred Dividend Payments BERNARD L MADOFF: Wilpons Say They Will Be "Vindicated" BILLING SERVICES: Moody's Downgrades Corp. Family Rating to 'B2' BORDERS GROUP: Gets Court Nod to Liquidate 200+ Stores BORDERS GROUP: Has Interim Access to $400-Mil. in FInancing BORDERS GROUP: Wins Interim Approval to Use Cash Collateral BORDERS GROUP: Australian Chain Sent to Administration BUILDING 500: Voluntary Chapter 11 Case Summary CAPITAL AUTOMOTIVE: S&P Raises Ratings to 'B+' on Refinancing CAPITOL BANCORP: Amends Pacts for Trust-Preferred Securities CASTLETON PLAZA: Case Summary & 14 Largest Unsecured Creditors CATALYST PAPER: Snowflake Mill Extends CBA with USW Until 2014 CB RICHARD: S&P Affirms 'BB' Counterparty Credit Rating CDC PROPERTIES: Files Schedules of Assets & Liabilities CDC PROPERTIES: Taps Ryan Swanson as General Counsel CENTRALIA OUTLETS: U.S. Trustee Unable to Form Creditors Committee CHAPRIL BUILDING: Case Summary & 2 Largest Unsecured Creditors CHARTER OAK BANK: Closed; Bank of Marin Assumes All Deposits CINCINNATI BELL: S&P Downgrades Corporate Credit Rating to 'B' CITIZENS BANK OF EFFINGHAM: Closed; HeritageBank Assumes Deposits CLAIRE'S STORES: Bank Debt Trades at 2% Off in Secondary Market CLAIRE'S STORES: Expects to Report $422MM Net Sales for Q4 CLAIRE'S STORES: To Offer Sr. Secured Notes to Partly Repay Debt CONSTAR INT'L: Has $10-Mil. L/C Facility From Wells Fargo CLEAR CHANNEL: Bank Debt Trades at 8% Off in Secondary Market CONSTAR INT'L: Has $10-Mil. L/C Facility From Wells Fargo CUMULUS MEDIA: Bank Debt Trades at 3% Off in Secondary Market DEX MEDIA EAST: Bank Debt Trades at 20% Off in Secondary Market DJ HILES: Case Summary & 20 Largest Unsecured Creditors DREIER LLP: Trustee Seeks to Probe 39 Law Firms, Former Attorneys DUKE AND KING: Committee Taps Mesirow Fin'l. as Financial Advisor DYER ROAD: Voluntary Chapter 11 Case Summary EMIVEST AEROSPACE: Seeks Permission to Hold Auction, Avoid Default EQUIPMENT MANAGEMENT: Taps Schwartz Law Firm as Bankr. Counsel EQUIPMENT MANAGEMENT: Asks for Court's Nod to Sell Equipment ESSAR STEEL: S&P Keeps 'B-' Long-Term Corporate Credit Rating F & S: Case Summary & 3 Largest Unsecured Creditors FENTURA FINANCIAL: Dismisses Crowe Horwath as Accountants FIRST PHYSICIANS: Recurring Losses Prompt Going Concern Doubt FLEMING COS: Wayne Berry Loses Another Round in Litigation FOX HILL: Files Schedules of Assets and Liabilities FRANK PARSONS: Wants Key Incentive Plan OK'd on Select Employees FREESCALE SEMICONDUCTOR: Debt Trades at 100.04 Cents-on-the-Dollar GALP GRAYRIDGE: Gets Final Court Okay to Use Cash Collateral GENCORP INC: Salaries and Bonuses of Executives Approved GEO W PARK: Plan of Reorganization Wins Court Approval GERALD TROOIEN: FBI Searches Evidence of Fraud at JLT Group GIORDANO'S ENTERPRISES: Updated Case Summary & Creditors List GREAT ATLANTIC & PACIFIC: Gets Until July 10 to Decide on Leases GREAT ATLANTIC & PACIFIC: Proposes Claims Settlement Procedures GREAT ATLANTIC & PACIFIC: Schedules Now Due March 25 GREAT ATLANTIC & PACIFIC: Wants to Dispose of De Minimis Assets GREEN EARTH: Posts $2.6 Million Net Loss in December 31 Quarter GROVE STREET: Court to Consider Plan Outline on February 28 GROVE STREET: Has Access to Lender's Cash Collateral Until Feb. 28 GSI GROUP: Releases Shares Held in Escrow GTM ENERGY: Case Summary & 20 Largest Unsecured Creditors GTS 900: Astani Signs Pact to Sell Concerto Building to Corus GUITAR CENTER: Bank Debt Trades at 1% Off in Secondary Market HABERSHAM BANK: Closed; SCBT National Association Assumes Deposits HAWKER BEECHCRAFT: Bank Debt Trades at 11% Off in Secondary Market HCA HOLDINGS: J. Milton Johnson Appointed President and CFO HERCULES OFFSHORE: Bank Debt Trades at 1% Off in Secondary Market I. V. BEST: Case Summary & 20 Largest Unsecured Creditors IMAGE METRICS: Amends March 31 Form 10-Q to Correct Errors IMAGE METRICS: Amends June 30 Quarterly Report to Correct Errors IMAGE METRICS: Recurring Losses Prompt Going Concern Doubt INTEGRATED BIOPHARMA: Incurs $423,000 Net Loss in Dec. 31 Quarter INTEGRATED HEALTHCARE: Reports $426,000 Net Income in Dec. 31 Qtr. KEYSTONE AUTOMOTIVE: Soliciting Acceptances for Exchange, Prepack KNOWLEDGE LEARNING: Moody's Affirms 'B1' Corporate Family Rating KCXP INVESTMENTS: Wants Collateral Use, Court Requires Asset Check L-1 IDENTITY: S&P Affirms Corporate Credit Rating at 'B+' LAXMI, INC: Case Summary & 20 Largest Unsecured Creditors LEAR CORPORATION: Moody's Retains 'Ba3' Corporate Family Rating LEHMAN BROTHERS: CalPERS Sues Ex-Lehman Execs., Underwriters LEHMAN BROTHERS: Franklin, et al., Have 5.1% Equity Stake LEHMAN BROTHERS: LBI Trustee Deal with CalPERS Approved LEHMAN BROTHERS: Seoul Court Rules in Derivatives Case LEHMAN BROTHERS: UBS Opposes LBI Trustee Demand for Payment LIONCREST TOWERS: Cash Collateral Use Hearing on March 30 MARC AND RENEE: Case Summary & 2 Largest Unsecured Creditors MCK ARBOURS: Case Summary & 20 Largest Unsecured Creditors MEXICAN BENEFIT: Case Summary & 2 Largest Unsecured Creditors MICHAEL FOODS: Moody's Assigns 'B1' Rating to New Senior Loan MID-AMERICAN: Case Summary & 20 Largest Unsecured Creditors MRU HOLDINGS: S.D.N.Y. Ct. Dismisses Class Suit v. Merrill MULTIPLAN INC: S&P Assigns 'B' Rating to New $1.265 Bil. Loan NBC ACQUISITION: Moody's Downgrades Default Rating to 'Caa2' OPTI CANADA: Incurs C$273.82 Million Net Loss in 2010 PALMAS COUNTRY CLUB: Plan Confirmation Hearing Set for March 8 PCS EDVENTURES!.COM: Posts $139,000 Net Loss in Dec. 31 Quarter PETROHUNTER ENERGY: Posts $1.4 Million Net Loss in Dec. 31 Quarter PNM RESOURCES: Fitch Withdraws 'BB' Issuer Default Rating PROGNOZ SILVER: Repays Part of Outstanding Debt RAFAEL QUINONES: Case Summary & 20 Largest Unsecured Creditors REALOGY CORP: Bank Debt Trades at 4% Off in Secondary Market RED ROCKET: Plan Confirmation Hearing Continued Until March 9 REOSTAR ENERGY: Court OKs Michael McConnell as Chapter 11 Examiner RITE AID: Fitch Assigns 'BB-/RR1' Ratings to $343 Mil. Loans RITE AID: S&P Assigns 'B+' Rating to $343 Mil. Senior Loan RIVER EAST: Secured Creditor Tries to Block Cash Collateral Use RIVER EAST: Secured Creditor Wants Ch 11 Bankr. Case Dismissed RIVER EAST PLAZA: Wants Cindy O'Drobinak to Continue as Receiver ROBB & STUCKY: Files for Chapter 11 to Sell Business ROBB & STUCKY: Case Summary & 20 Largest Unsecured Creditors ROUND TABLE: Wants to Assume Insurance & Premium Financing Deals SALON MEDIA: Posts $724,000 Net Loss in December 31 Quarter SAN LUIS TRUST BANK: Closed; First California Assumes Deposits SCI REAL ESTATE: Section 341(a) Meeting Scheduled for March 23 SEAHAWK DRILLING: Shareholders Seek Official Committee SECURED CALIFORNIA: Section 341(a) Meeting Scheduled for March 23 SECUREALERT INC: Incurs $2.1 Million Net Loss in Dec. 31 Quarter SMURFIT-STONE: S&P Retains CreditWatch Positive on 'BB-' Rating SPA SYDELL: Emerges from Chapter 11 Bankruptcy With New Owner STANFORD INT'L: Owner Sues Prosecutors, FBI Agents, & SEC Lawyers SWADENER INVESTMENT: Case Summary & 20 Largest Unsecured Creditors TA-COLONIAL: Voluntary Chapter 11 Case Summary TBS INTERNATIONAL: Regains Compliance with Nasdaq Listing Rules TOWNSENDS INC: To Sell Assets for $76.3 Million to Two Buyers TRIAD GUARANTY: Reports $26.8 Million Net Income in Q4 2010 TRIBUNE CO: Jewel Food, et al., Want Lift Stay to Pursue Claim TRIBUNE CO: Proposes to Expand Novack and Macey Work TRIBUNE CO: Bank Debt Trades at 27% Off in Secondary Market TERRESTAR NETWORKS: Inks 3rd & 4th Amendments to DIP Documents TERRESTAR NETWORKS: Deadline to Decide on Leases Moved to May 17 TERRESTAR NETWORKS: Committee Amends Suit vs. U.S. Bank, N.A. TERRESTAR NETWORKS: Cassels, Committee Counsel, Hikes Rates UNITED WESTERN: Sues Regulators; Calls Bank Seizure Premature USG CORP: Brian Kenney Appointed to Board of Directors UTEX COMMUNICATIONS: Court Says Settle Disputes Prior to Plan WARNER MUSIC: Fitch Affirms Issuer Default Rating at 'BB-' WHITTEN PARTNERSHIP: Voluntary Chapter 11 Case Summary WINGATE AIRPORT: Section 341(a) Meeting Scheduled for March 17 ZEIGER CRANE: Case Summary & 20 Largest Unsecured Creditors * Equifax Report Shows Small Biz Bankrupties Fall 18% in Q4 * 4 Banks Shuttered Friday; Year's Failures Now 22 * S&P's 2011 Global Corporate Default Tally Rises to Three * Centerbridge Partners Nears Third Close for Buyout * NHB Advisors Opens Chicago Office & Adds Three New Professionals * BOND PRICING -- For Week From Feb. 14 to 18, 2011 ********* 524 HOWARD: Case Summary & 5 Largest Unsecured Creditors -------------------------------------------------------- Debtor: 524 Howard, LLC 62 First Street, 4th Floor San Francisco, CA 94105 Bankruptcy Case No.: 11-30594 Chapter 11 Petition Date: February 17, 2011 Court: U.S. Bankruptcy Court Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Reno F.R. Fernandez, Esq. MACDONALD AND ASSOC. 221 Sansome Street San Francisco, CA 94104 Tel: (415) 362-0449 E-mail: r.fernandez@macdonaldlawsf.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Richard Johnson, manager. Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- CMR Mortgage Fund, LLC 08-32220 11/18/08 CMR Mortgage Fund II, LLC 09-30788 03/31/09 CMR Mortgage Fund III, LLC 09-30802 03/31/09 524 Howard's List of five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ San Francisco Tax Collector 2007-2010 Property $868,250 P.O. Box 7426 Taxes and Penalties San Francisco, CA 94120-7426 San Francisco Tax Collector 2010-2011 Property $272,073 P.O. Box 7426 Taxes San Francisco, CA 94120-7426 Stein & Lubin LLP Attorney's Fees $6,675 600 Montgomery Street, 14th Floor San Francisco, CA 94111 Orrick, Herrington, et al. Attorney's Fees $1,365 CT Corp Dom Rep $257 A.C. MOORE: Board Explores Strategic Alternatives ------------------------------------------------- A.C. Moore Arts & Crafts, Inc., announced that its board of directors is exploring strategic alternatives to enhance shareholder value including, but not limited to, a potential sale of the Company, corporate financing or capital raise. Janney Montgomery Scott LLC has been engaged to serve as the Company's financial advisor in this process. The Company has received third party expressions of interest. However, the Company does not intend to disclose any developments regarding its exploration of strategic alternatives, unless and until its Board of Directors has approved a specific transaction. There can be no assurance that a transaction will result from this process. The Company also reported that it ended fiscal 2010 with more than $35.0 million in cash, as forecasted during its investor conference call for third quarter fiscal 2010 results. About A.C. Moore A.C. Moore is a specialty retailer offering a selection of arts, crafts and floral merchandise. A.C. Moore opened its first A store in Moorestown, New Jersey in 1985, and has grown to 135 stores as of Oct. 31, 2010. Its stores are located in the Eastern United States from Maine to Florida. In October 2007, A.C. Moore launched its e-commerce site, http://www.acmoore.com/ The Company's balance sheet at Oct. 2, 2010 showed $238.1 million in assets, $102.3 million in liabilities, and $135.79 million in Stockholders' equity. The Company reported a net loss of $25.90 million on $468.89 million of sales for fiscal 2009, compared with a net loss of $26.57 million on $534.66 million of sales for fiscal 2008. The Company reported a net loss of $25.37 million for nine months ended Oct. 2, 2010. AE&E INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: AE&E Inc. fka Von Roll, Inc. fka AE&E Von Roll, Inc. 302 Research Drive, Suite 300 Norcross, GA 30092 Bankruptcy Case No.: 11-54670 Chapter 11 Petition Date: February 16, 2011 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: J. Hayden Kepner, Jr., Esq. SCROGGINS & WILLIAMSON 1500 Candler Bldg. 127 Peachtree Street, NE Atlanta, GA 30303 Tel: (404) 893-3880 E-mail: hkepner@swlawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb11-54670.pdf The petition was signed by Peter Chromec, CEO. ALEXA PROFESSIONAL: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------- Debtor: Alexa Professional Plaza, LLC. 865 N. Eastern Ave. Las Vegas, NV 89101 Bankruptcy Case No.: 11-12182 Chapter 11 Petition Date: February 16, 2011 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Matthew Q. Callister, Esq. 823 Las Vegas Blvd S, Suite 500 Las Vegas, NV 89101 Tel: (702) 385-3343 Fax: (702) 385-2899 E-mail: mqc@call-law.com Scheduled Assets: $800,000 Scheduled Debts: $1,725,000 In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Rodney M Jean, Esq. Bank Loan $1,725,000 300 S. Fourth Street Las Vegas, NV 89101 The petition was signed by Rafael Mirchou, sole member. AMERICAN EQUITY: Fitch Affirms 'BB+' Issuer Default Rating ---------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating of American Equity Investment Life Holding Company at 'BB+' and the Insurer Financial Strength ratings at 'BBB+' of its insurance operating subsidiaries, American Equity Investment Life Insurance Company and American Equity Investment Life Insurance Company of New York. The Rating Outlook is Stable. At the same time, Fitch has assigned its 'BB' rating to AEL's $200 million 3.50% senior convertible senior notes due 2015. Fitch views AEL's chief credit strengths to include: -- A high credit quality bond portfolio; -- Improved operating trends; -- Adequate statutory capital for the rating. Additional support for the rating includes Fitch's updated view of diminished risks in AEL's operating environment. The repeal of SEC rule 151a removed an immediate threat to AEL's product and distribution strategy and allows the company's current sales model to continue without increased costs and disruption. Fitch also believes the resolution in the recent settlement of one of two class action lawsuits reduces uncertainty for future operating results. In addition, Fitch believes that AEL's reinvestment risk has declined, driven by the redemption of significant amounts of callable federal agency securities. Factors that partially offset the lower reinvestment risk are a potentially lower investment portfolio yield and increased yet reasonable credit risk. Fitch views AEL's bond portfolio to be of high credit quality. At Sept. 30, 2010, U.S. Government sponsored agencies accounted for 26% of fixed income securities and 97% of the portfolio was investment grade according to NAIC standards. Given the composition of the investment portfolio, AEL had comparably less investment related losses over the recent period of challenging capital markets than many of its peers. As the composition of AEL's portfolio continues to change as certain fixed maturity securities are subject to call redemption, Fitch expects credit risk will rise to levels more consistent with historical life insurance industry averages. AEL's credit risk as measured by the risky assets to total adjusted capital ratio is estimated at 48% at Sept. 30, 2010, and compares favorably to the life insurance industry average of 135% at year-end 2009. AEILIC's statutory total adjusted capital increased 21% through the first nine months of 2010 to $1.4 billion. Fitch views AEILIC's NAIC risk based capital ratio as adequate for the rating category. For Sept. 30, 2010, Fitch estimates that RBC was above year end 2009 levels of 337% and expects AEILIC's 2011 RBC ratio will be maintained above 300% as internally generated capital will be partially offset by strong sales growth and increased credit risk as the company shifts its portfolio mix away from federal agency securities to corporate bonds. Based on the company's strong sales trends reported in the fourth quarter of 2010, Fitch believes that AEL may need to manage sales growth and access reinsurance markets in 2011 given the strain new FIA sales have on risk-based capital. Fitch's rating concerns include: -- AEL's lack of diversification in revenue and earnings, as well as distribution; -- Increased credit risk in AEL's investment portfolio over the next couple of years, particularly commercial mortgage loans; -- A spike in interest rates and surrender rates. Fitch believes the credit quality of AEL's investment portfolio's will continue to decline from its historically high level given the significant amount of callable federal agencies securities redeemed in over the past 12 months and additional fixed income securities that will become subject to call redemption in 2011. AEL has invested new money primarily in corporate bonds (largely rated 'A' and 'BBB') and directly placed commercial mortgages. Fitch believes that AEL's exposure to credit impairments in 2011 is manageable but that AEL may experience additional credit related losses in non-agency, residential mortgage backed securities and commercial real estate related assets. Like many fixed annuity books of business, AEL's primary business risk is to a spike in interest rates concurrent with increased surrender rates. In Fitch's opinion, given the large book of fixed annuities, interest rate risk is AEILIC's chief balance sheet risk, as the market values of its assets and liabilities are sensitive to changes in interest rates. This concern is amplified by AEILIC's investment portfolio's significant allocation to U.S. government agency callable securities, which raises the level of interest rate sensitivity as well as reinvestment risk, albeit this risk is softening as more agency bonds are called and the proceeds are invested in other securities. Additionally, FIAs include product features such as surrender charges and terms that are designed to limit withdrawals, and thus help protect against reinvestment risk. Historically, AEL has relied on access to the reinsurance and capital markets to support sales capacity. This access may not be available in more challenging economic environments, which does limit AEL's financial flexibility, in Fitch's view. Rationale for the 'BB' rating on AEL's $200 million 3.50% convertible securities is based on its pari pasu ranking with similar senior convertible debt. The company used issuance proceeds to repay its $150 million bank line. Fitch has not assigned equity-credit to these securities. AEL's financial leverage was 43.9% at Sept. 30, 2010. AEL's equity credit adjusted leverage increased slightly to almost 31% at Sept. 30, 2010, but is within tolerable levels for the 'BB' rating category. AEL's GAAP based EBIT-based interest coverage has improved to the 5 times-6xs range in 2010 and maximum statutory dividend coverage is expected to be above 3x for 2011. Fitch views that AEL's new three year $160 million bank line has improved financial flexibility with regards to the $74.5 million in convertible securities that are putable on Dec. 15, 2011. Fitch notes that an additional $115.9 million in securities have a first put date in December 2014. AEL is headquartered in West Des Moines, Iowa and had reported total GAAP assets of $24.7 billion and equity of $1 billion at Sept. 30, 2010. AEILIC, the main operating subsidiary of AEL, is also headquartered in West Des Moines and had total capital and surplus of $1.3 billion at Sept. 30, 2010. Key rating drivers that could produce revisions in Rating Outlooks to Negative or lead to downgrades in AEL's stand-alone IDR or its subsidiaries' IFS ratings include: -- A reduction in capitalization with RBC below 300%; -- A significant deterioration in operating results; -- Significant increase in lapse/surrender rates; -- Significant increase in credit related impairments in 2011; -- Financial leverage above 50%; -- Significant mismatch in asset and liability durations. Key rating drivers that could produce revisions in Rating Outlooks to Positive or lead to upgrades in AEL's stand-alone IDR or its subsidiaries' IFS ratings include: -- Enhanced capitalization with RBC above 350% on a sustained basis; -- Financial leverage below 30% basis and GAAP EBIT-based interest coverage above 8x on a sustained basis. Fitch has assigned this rating with a Stable Outlook: American Equity Investment Life Holding Company -- 3.50% senior convertible debentures due 2015 at 'BB'. Fitch has affirmed these ratings with a Stable Outlook: American Equity Investment Life Holding Company -- Issuer Default Rating at 'BB+'; -- 5.25% senior convertible debentures due 2024 at 'BB'; -- 5.25% senior convertible debentured due 2029 at 'BB'; -- Trust preferred securities at 'B+'. American Equity Investment Life Insurance Company -- Insurer Financial Strength at 'BBB+'. American Equity Investment Life Insurance Company of New York -- IFS at 'BBB+'. AMERICAN HOME: Credit Agricole Loses $478MM Claim Over Repo Deal ---------------------------------------------------------------- Bankruptcy Law360 reports that the Third Circuit has squashed a $478 million claim Credit Agricole SA lodged against American Home Mortgage Holdings Inc., in a decision that could define how the courts value mortgage repurchase deals. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- was a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage Holdings Inc. was the parent of AHMIC. AHMIC and seven affiliates filed for Chapter 11 protection on August 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07- 11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20.55 billion and total liabilities of $19.33 billion. American Home filed a de-consolidated plan of liquidation on August 15, 2008, and amended that plan on Nov. 25, 2008. The former home mortgage lender's liquidating Chapter 11 plan was confirmed on Feb. 23, 2009, and took effect on Nov. 30, 2010. AMERICA'S BREWING: Financial Woes Prompt Bankruptcy Filing ---------------------------------------------------------- Stephanie Lulay at The Beacon-News reports that Schaumburg, Illinois-based America's Brewing Company and First Round Fourth Pick Partnership, owners of America's Historic Roundhouse restaurant and brewpub, filed for bankruptcy to sell the restaurant building to Palentine-based Durty Nellie's Pub or one of two other interested parties. According to The Beacon-News, the Debtors sought Chapter 11 protection after months of unpaid bills and taxes. The filing details more than 80 businesses to whom the Roundhouse owes money, including the city of Aurora, ComEd and Blue Star Energy Services Inc. "The purpose of selling the building is to get the taxes paid off. It's just reorganization. We've explained to brides and future parties what is going on," owner Scott Ascher was quoted as stating. Mr. Ascher said the mortgage broker, Ciena Capital Funding, advised the business to file for Chapter 11 bankruptcy. The Beacon-News recounts that in December 2009, the family of the late Walter Payton decided not to renew a deal with the Roundhouse to use Payton's name and likeness. Shortly after, the family filed suit against Mr. Ascher, his wife Pamela, and the three partnerships to which they belong. The suit alleged that Ascher owed $1.66 million on an agreement with the Paytons to pay for the football legend's name and likeness. Mr. Ascher stopped making payments following Payton's November 1999 death, citing that the estate "can't expect the same return Walter was getting." The suit also alleged that Ascher took out a mortgage in December 2005 unbeknownst to his investment partners, including the Paytons. According to The Beacon-News, in October 2010, Ciena Capital Funding, the Roundhouse's mortgage backer, alleged that the mortgage is also in default in a court case filing. The suit says Ascher missed a May payment and had since refused to pay off the rest of the mortgage. Mr. Ascher owes about $3.7 million to Ciena Capital, according to a court filing. America's Brewing Company filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 11-05656) on Feb. 14, 2011. Judge A. Benjamin Goldgar presides over the case. Paul M. Bauch, Esq., at Bauch & Michaels LLC, represents the Debtor. In its petition, the Debtor estimated both assets and debts of between $1 million and $10 million. ANCHOR BLUE: Court Approves Liquidation Plan -------------------------------------------- Bankruptcy Law360 reports that Anchor Blue Retail Group Inc. has received bankruptcy court approval for its Chapter 11 liquidation plan, which provides nominal recovery for unsecured creditors. Judge Peter J. Walsh of the U.S. Bankrutpcy Court for the District of Delaware signed off on the plan Wednesday, which will wind down the company after 18 months, according to Law360. About Anchor Blue Anchor Blue is a specialty retailer of casual apparel and accessories for the teenage market. Founded in 1972, the Company has 117 stores located in nine western and southwestern states: Arizona, California, Colorado, New Mexico, Oregon, Texas, Utah and Washington. The Company employed 1,446 full and part-time employees in their stores and their corporate headquarters in Corona, California. Anchor Blue is an indirect affiliate of Sun Capital Partners, a Florida-based investment firm. Anchor Blue Holding Corp., together with Anchor Blue Inc., filed for Chapter 11 bankruptcy protection on January 11, 2011 (Bankr. D. Del. Lead Case No. 11-10110). As of Jan. 1, 2011, the Debtors' books and records reflected total combined assets of roughly $24.7 million (book value) and total combined liabilities of roughly $38.5 million. Neil Herman, Esq., and Rachel Mauceri, Esq., at Morgan Lewis, in Philadelphia, Pennsylvania, serve as the Debtors' bankruptcy counsel. Kenneth J. Enos, Esq., and Michael R. Nestor, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtors' co- counsel. FTI Consulting, Inc., serves as the financial advisors. Epiq Bankruptcy Solutions is the claims agent. The Official Committee of Unsecured Creditors has tapped Kelley Drye & Warren LLP as lead counsel and Campbell & Levine, LLC as Delaware Counsel, nunc pro tunc to January 19, 2011. Deloitte Financial Advisory Services LLP is the Commmittee's financial advisor. ANGIOTECH PHARMACEUTICALS: Executes Settlement Deal With Rex ------------------------------------------------------------ Angiotech Pharmaceuticals, Inc.'s subsidiary, Angiotech Pharmaceuticals (US), Inc. ("Angiotech US"), has executed a Settlement and License Termination Agreement with Rex Medical, LP, providing for the full and final settlement and/or dismissal of all claims arising under the the License, Supply, Marketing and Distribution Agreement between Angiotech US and Rex, dated March 13, 2008. The Agreement provides for, among other things, Angiotech US's marketing, sale and distribution of the Option Inferior Vena Cava Filter on behalf of Rex. The Settlement Agreement is in respect of certain disputes, including the preliminary injunction obtained by Rex in the United States District Court for the Southern District of New York, and the arbitration proceedings as commenced by Rex on Nov. 18, 2010. On November 11, 2010, the Company announced that subsequent to various business discussions between the parties, Angiotech determined its need to deliver a notice to Rex, which stated Angiotech's determination that in light of the Company's recent and substantially changed business, operating and liquidity conditions, it would not be commercially reasonable for Angiotech, through Angiotech US, to continue under the existing terms of the Agreement. Subsequent to its receipt of such notice, Rex commenced arbitration proceedings on November 18, 2010, pursuant to which it alleged that Angiotech US wrongfully terminated the Agreement and was seeking monetary damages in excess of $3.0 million, as well as costs, fees and expenses in connection with the arbitration proceeding. In addition, on November 19, 2010, Rex sought preliminary injunctive relief from the United States District Court for the Southern District of New York in aid of the arbitration. The District Court's Decision and Order, released on Dec. 2, 2010, enjoined Angiotech's subsidiary, Angiotech Pharmaceuticals (US), Inc., from ceasing performance under the Agreement for a period of 180 days, or until the arbitration was concluded. The Settlement Agreement includes the following principal significant terms: (i) the termination of the Agreement, at March 31, 2011 or at an earlier date if so elected by Rex, upon which Angiotech US will no longer market, sell and distribute Option; (ii) a payment in the amount of $1.5 million, to be made to Rex within five business days of the effective date of the Settlement Agreement, which is the first business day following receipt of approval of the Supreme Court of British Columbia to make such payment in respect of Angiotech's ongoing CCAA proceedings, in final and full payment and settlement of all claims, all royalties due under the Agreement relating to sales of Option recorded by Angiotech US prior to Jan. 1, 2011, and all milestone payments due or that may come due to Rex under the Agreement now or in the future; and (iii) the delivery to Rex of certain materials relating to the marketing and sale of Option. The Settlement Agreement will be filed by the Company on both SEDAR and EDGAR, and the description of the Settlement Agreement contained in this press release is qualified by the full text of the Settlement Agreement. About Angiotech Pharmaceuticals Based in Vancouver, British Columbia, in Canada, Angiotech Pharmaceuticals, Inc. (TSX: ANP) -- http://www.angiotech.com/-- is a global specialty pharmaceutical and medical device company. Angiotech discovers, develops and markets innovative treatment solutions for diseases or complications associated with medical device implants, surgical interventions and acute injury. Alvarez & Marsal Canada Inc., as monitor and foreign representative, filed Chapter 15 petitions for Angiotech Pharmaceuticals Inc. and its units (Bankr. D. Del. Lead Case No. 11-10269) on Jan. 30, 2011, to seek recognition of their insolvency proceedings under the Companies' Creditors Arrangement Act in Canada as a "foreign main proceeding" under 11 U.S.C. Sec. 1517. The Company's balance sheet at Sept. 30, 2010, showed US$326.80 million in total assets, US$60.30 million in current liabilities, and US$622.16 million in non-current liabilities and a stockholders' deficit of US$355.67 million. The foreign representative has tapped Mary Caloway, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, and Ken Coleman, Esq., at Allen & Overly LLP, in New York, as counsel in the Chapter 15 case. John Grieve, Esq., at Fasken Martineau DuMoulin LLP, in Vancouver, B.C., represents A&M in the CCAA case. ANGIOTECH PHARMACEUTICALS: Court Accepts Plan of Compromise ----------------------------------------------------------- Angiotech Pharmaceuticals, Inc. disclosed that the Supreme Court of British Columbia has accepted for filing a plan of compromise or arrangement, with terms and conditions materially consistent with Angiotech's previously disclosed recapitalization transaction, relating to Angiotech and certain of its subsidiaries pursuant to the Companies' Creditors Arrangement Act (Canada) (the "CCAA"). The Court has granted an order authorizing the holding of a meeting of the affected creditors of the Angiotech Entities on April 4, 2011. The purpose of the meeting is for the Affected Creditors to consider and vote on the Plan. If the Plan is approved by the required majority of Affected Creditors, the Angiotech Entities intend to bring a further motion on or about April 6, 2011 seeking a sanctioning of the Plan by the Court. The Court also granted an order establishing a procedure for the adjudication, resolution and determination of claims of Affected Creditors for voting and distribution purposes under the Plan and fixing a claims bar date of March 17, 2011. About Angiotech Pharmaceuticals Based in Vancouver, British Columbia, in Canada, Angiotech Pharmaceuticals, Inc. (TSX: ANP) -- http://www.angiotech.com/-- is a global specialty pharmaceutical and medical device company. Angiotech discovers, develops and markets innovative treatment solutions for diseases or complications associated with medical device implants, surgical interventions and acute injury. Alvarez & Marsal Canada Inc., as monitor and foreign representative, filed Chapter 15 petitions for Angiotech Pharmaceuticals Inc. and its units (Bankr. D. Del. Lead Case No. 11-10269) on Jan. 30, 2011, to seek recognition of their insolvency proceedings under the Companies' Creditors Arrangement Act in Canada as a "foreign main proceeding" under 11 U.S.C. Sec. 1517. The Company's balance sheet at Sept. 30, 2010, showed US$326.80 million in total assets, US$60.30 million in current liabilities, and US$622.16 million in non-current liabilities and a stockholders' deficit of US$355.67 million. The foreign representative has tapped Mary Caloway, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, and Ken Coleman, Esq., at Allen & Overly LLP, in New York, as counsel in the Chapter 15 case. John Grieve, Esq., at Fasken Martineau DuMoulin LLP, in Vancouver, B.C., represents A&M in the CCAA case. AQUILEX HOLDINGS: S&P Affirms Corporate Credit Rating at 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services said that it affirmed its 'B' corporate credit rating and all other ratings on Atlanta, Georgia- based Aquilex Holdings LLC. S&P removed the ratings from CreditWatch, where they were originally placed on Sept. 22, 2010, and assigned a stable outlook. The company had total debt of approximately $390 million as of Dec. 31, 2010. "The rating affirmation and resolution of the CreditWatch reflect S&P's view that the company's proposed amendment to the credit facility is likely to be executed as planned, and that the increased level of headroom under the revised financial covenants will benefit Aquilex's liquidity," said Standard & Poor's credit analyst James Siahaan. Although the company remains highly leveraged, with a total adjusted debt to EBITDA ratio of roughly 5.7x as of Dec. 31, 2010, Aquilex made a voluntary $20 million prepayment of its term loan during the fourth quarter of 2010 and should still be able to generate credit statistics that do not meaningfully diverge from those expected at the current rating. The ratings on Aquilex Holdings reflect the company's high debt leverage, narrow scope of operations in a fragmented market, variability of operating results, moderately concentrated customer base, exposure to cyclicality in certain end-markets, and sizable working capital usage at times. Partially offsetting these weaknesses are Aquilex's improved liquidity position, leading market position in its niche markets, largely variable cost structure, long-term customer relationships, and the recurring nature of demand for many of the company's services. ARKANOVA ENERGY: Posts $1.5 Million Net Loss in Dec. 31 Quarter --------------------------------------------------------------- Arkanova Energy Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $1.5 million on $264,800 of revenue for the three months ended Dec. 31, 2010, compared with a net loss of $1.7 million on $301,900 of revenue for the same period of the previous fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $2.3 million in total assets, $13.1 million in total liabilities, and a stockholders' deficit of $10.8 million. As reported in the Troubled Company Reporter on Jan. 17, 2011, MaloneBailey, LLP, in Houston, expressed substantial doubt about Arkanova Energy's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has incurred losses since inception. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7386 About Arkanova Energy The Woodlands, Tex.-based Arkanova Energy Corporation is currently participating in oil and gas exploration activities in Arkansas, Colorado and Montana. All of Arkanova's oil and gas properties are located in the United States. ART DECO: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Art Deco First Street, LLC 281 Nieto Avenue, Apartment A Long Beach, CA 90803 Bankruptcy Case No.: 11-17123 Chapter 11 Petition Date: February 18, 2011 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Vincent P. Zurzolo Debtor's Counsel: James G. Allen, Esq. ALLEN LAW CORP 275 E. Hillcrest Drive, #105 Thousand Oaks, CA 91360 Tel: (818) 735-7000 Fax: (818) 735-7002 E-mail: hope@allenlawcorp.com Scheduled Assets: $808,050 Scheduled Debts: $1,432,786 A list of the Company's 10 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/cacb11-17123.pdf The petition was signed by Neil Osbjornson, managing member. ATLANTIC LEASING: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Atlantic Leasing, Inc. 4651 Dyer Boulevard Riviera Beach, FL 33407 Bankruptcy Case No.: 11-14185 Chapter 11 Petition Date: February 18, 2011 Court: U.S. Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Erik P. Kimball Debtor's Counsel: Michael D. Seese, Esq. HILNSHAW & CULBERTSON LLP 1 E. Broward Boulevard, #1010 Fort Lauderdale, FL 33301 Tel: (954) 467-7900 Fax: (954) 467-1024 E-mail: mseese@hinshawlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Steve Zeiger, director. The list of unsecured creditors filed together with its petition does not contain any entry. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Seiger Crane Rental, Inc. 11-14183 02/18/11 BANK OF THE CAROLINAS: Halts Trust Preferred Dividend Payments -------------------------------------------------------------- Bank of the Carolinas Corporation (Nasdaq: BCAR), the holding company for Bank of the Carolinas, notified the United States Department of Treasury of its intent to defer the February 2011 payment of its regular quarterly cash dividend on its Fixed Rate Cumulative Perpetual Preferred Stock, Series A, which the Company issued to the Treasury in connection with the Company's participation in the Treasury's TARP Capital Purchase Program. Under the terms of the TARP Preferred Stock, the Company is required to pay quarterly dividends at a rate of 5% per year for the first five years following the Treasury investment, after which the dividend rate automatically increases to 9% per year. The Company may defer dividend payments for up to six consecutive quarters without default or penalty, but the dividend is a cumulative dividend that accrues for payment in the future and will be reported as preferred dividends for financial statement purposes. Additionally, the Company has also elected to defer its regularly scheduled March 2011 interest payment on its junior subordinated debentures related to outstanding trust preferred securities. Under the terms of the indenture governing the junior subordinated debentures, the Company may defer payments of interest for up 20 consecutive quarterly periods without default or penalty. The regularly scheduled interest payments will continue to accrue for payment in the future and be reported as an expense for financial statement purposes. Bank of the Carolinas Corporation and its banking subsidiary say that while they remain well capitalized these actions were taken to support and preserve the capital position of the Company and the Bank in light of challenging economic conditions. The deferral of these payments will be re-evaluated periodically and payment will be re-instated when appropriate. Bank of the Carolinas Corporation is the holding company for Bank of the Carolinas, a North Carolina chartered bank headquartered in Mocksville, NC with offices in Advance, Asheboro, Cleveland, Concord, Harrisburg, King, Landis, Lexington and Winston-Salem. At Sept. 30, 2010, Bank of the Carolinas' balance sheet showed $535 million in total assets and $45 million in stockholders' equity. The holding company reported a $147 million loss for the three-month period ending Sept. 20, 2010, and a loss topping $1 billion for the nine-month period ending Sept. 30, 2010. BERNARD L MADOFF: Wilpons Say They Will Be "Vindicated" ------------------------------------------------------- Brian Costa, writing for The Wall Street Journal, reports that New York Mets principal owner Fred Wilpon said Thursday that he and his associates will be "vindicated" in the billion-dollar lawsuit brought against them by the trustee representing Bernie Madoff victims. According to Mr. Costa, in an emotional news conference on a spring training practice field, Mr. Wilpon was defiant in disputing allegations that he knew or should have known about the Ponzi scheme. "We did not know one iota, one thing about Madoff's fraud," Mr. Wilpon said, according to report. "We didn't do anything wrong. If anything, we trusted a friend for a very long time. And as I told you a few months ago, that betrayal is very difficult for me. Because this was a man, we were friends for 35 years and investors for 25 years." According to Mr. Costa, when asked if that meant they were no longer interested in settling the case, Mr. Wilpon said no. "We will cooperate with the governor completely and totally," Mr. Wilpon said. The Wilpons are looking to sell up to 25% of the team, but have said they will not relinquish majority control. Nor are they looking to sell part of their 65% stake in the regional sports cable network SportsNet New York. As reported by the Troubled Company Reporter in January 2011, Irving H. Picard, the Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC, is seeking up to about $1 billion from Fred Wilpon, his brother-in-law Saul Katz, their partners, relatives and entities related to their real-estate investment firm, Sterling Equities Associates. Mr. Picard has alleged the Mets owners and their business partners failed to investigate direct warnings and evidence that Mr. Madoff was conducting a Ponzi scheme, while reaping hundreds of millions of fictitious profits. Mr. Picard is seeking the return of nearly $300 million in fictitious profits, as well as up to $700 million in principal withdrawn since 2002. Messrs. Wilpon and Katz have called the allegations "abusive, unfair and untrue." "The plain truth is that not one of the Sterling partners ever knew or suspected that Madoff ran a Ponzi scheme," they said in a statement. The bankruptcy judge has directed the trustee and the Wilpon group to mediate with former New York Governor Mario M. Cuomo, who now works at Willkie Farr & Gallagher LLP. As reported by the TCR last week, Mr. Madoff told The New York Times in a two-hour interview in prison, that the Wilpons were not aware of the fraud. 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. BILLING SERVICES: Moody's Downgrades Corp. Family Rating to 'B2' ---------------------------------------------------------------- Moody's Investors Service downgraded Billing Services Group North America, Inc.'s Corporate Family Rating to B2 from B1. Concurrently, the Probability of Default Rating was lowered to B3 from B1 and the rating on the senior secured term loan was lowered to B1 from Ba3. The outlook was changed to negative from stable. Ratings Rationale The downgrade in the CFR to B2 reflects Moody's heightened concerns regarding BSG's business trends and liquidity profile. In the second half of 2010, revenues fell an estimated 24% and Moody's expects further deterioration in revenue and operating results in 2011. The steep drop in demand has been driven by public scrutiny of billing practices for "enhanced services" (non- toll charges) on consumers' landline telephone bills. As such, the largest local exchange carrier responded by prohibiting BSG and its customers from placing certain enhanced services charges on its customers' bills. Additionally, the U.S. Senate Commerce Committee announced in December 2010 that it is conducting an investigation of "cramming" (unauthorized telephone charges), further adding to the negative public perception surrounding LEC billing for enhanced services. While the LECs and BSG are proactively addressing customer billing practices, Moody's believes enhanced services revenues will continue to fall and a rebound is unlikely in the near-term. At the same time, the telecommunications industry continues to experience a secular decline in landline long distance and operator services volumes (estimated by Moody's at 5-10% per year), BSG's more traditional end market. Nonetheless, the B2 CFR is supported by relatively low financial leverage and strong interest coverage metrics for the rating category, reflecting steady debt reduction over the past three years. In Moody's view, BSG's liquidity profile has weakened as a result of earnings deterioration and covenant tightness. Due to scheduled step downs in the maximum leverage covenant, combined with lower projected EBITDA, Moody's considers it unlikely that BSG will meet its leverage covenant at June 30, 2011 without a waiver or amendment. On February 15, 2011, the company announced it has begun negotiations with lenders to amend financial covenants. Meanwhile, financial flexibility continues to be constrained by high mandatory debt amortization of $11.25 million per year. BSG does not have a revolver, and part of the company's cash balance represents customer funds. The negative outlook reflects Moody's expectations that revenue and earnings will fall materially in the near-term. Uncertainty surrounding the Congressional investigation and negative public perception of LEC billing practices are expected to linger. The outlook could be stabilized if enhanced services volumes rebound and BSG's liquidity profile improves. The ratings could be downgraded if financial covenants are not amended to provide adequate cushion over the near term, or if revenue, earnings, or cash flow deteriorate at a faster pace than currently expected. Moody's downgraded these ratings: * $67 (originally $112.5) million senior secured term loan due 2014, to B1 (LGD2, 26%) from Ba3 (LGD3, 41%) * Corporate Family Rating, to B2 from B1 * Probability of Default Rating, to B3 from B1 Billing Services Group North America, Inc. provides clearing, settlement, payment and financial risk management solutions to the telecommunications industry, merchants and online stores. Headquartered in San Antonio, Texas, BSG reported 2010 revenues are likely to be slightly higher than $132 million. BORDERS GROUP: Gets Court Nod to Liquidate 200+ Stores ------------------------------------------------------ Chief Judge Arthur Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York has approved Borders Group Inc.'s previously-disclosed strategic Store Reduction Program to facilitate its reorganization and repositioning. Under the Program, the Company identified 200+ underperforming stores, which comprise 30% of its national store network, that are expected to close in the next several weeks. Borders said that it has entered into agreements with experienced liquidators to conduct an orderly wind down of the 200 underperforming stores that are part of the Reduction Program. Hilco Merchant Resources LLC, SB Capital Group, Tiger Capital Group LLC and Gordon Brothers Group won the bidding to handle the liquidation sales, Borders lawyer Adam Shiff of Kasowitz Benson Torres & Friedman LLP told Judge Arthur Gonzalez at a Feb. 17, 2011 hearing, Bloomberg News reports. Gordon and Hilco, which initially led competing groups, joined forces to make the winning bid after a nine-hour auction that drew 38 bids, according to Bloomberg. The four-member liquidator group combined forces to make a final bid of 85.75% of the value of the store inventory, Dow Jones Newswires notes in a separate report. The new deal translated to Borders getting about $25 million more for the inventories than the original Hilco group stalking horse bid, the news source relates. The store closing sales are expected to begin this Saturday, February 19, 2011, where the liquidators aim to take advantage of the President's Day holiday in the U.S. Borders expects the stores to be closed by the end of April. The Company has also retained DJM Realty, a Gordon Brothers Group Company, to manage the disposition project of approximately 200 underperforming stores. Borders said it will continue to remain fully operational and open for business as usual during this process. The engagement of DJM Realty is subject to bankruptcy court approval. The Company noted in a public statement that the 200 leases that are available for assignment its bankruptcy disposition range from 12,895 to 42,770 square feet and are available in the following locations: Alaska (1), Arkansas (1), Arizona (8), California (35), Colorado (6), Connecticut (6), District of Columbia (2), Florida (16), Georgia (5), Hawaii (2), Illinois (16), Indiana (6), Kansas (2), Kentucky (2), Louisiana (2), Massachusetts (6), Maryland (3), Michigan (4), Minnesota (4), Missouri (6), Montana (1), North Carolina (5), New Hampshire (1), New Jersey (4), New Mexico (2), Nevada (1), New York (9), Ohio (7), Oklahoma (2), Pennsylvania (9), Puerto Rico (2), Tennessee (1), Texas (10), Utah (2), Virginia (5), Washington (2) and Wisconsin (4). "Borders' real estate has begun to create interest among retailers, supermarkets and non-retailer users. The available portfolio offers a unique mix of mid and big box locations with long lease terms and strong retail co-tenants. Numerous properties are located in markets that are very difficult to enter, including northern and southern California, the cities of New York, Chicago, Dallas, Atlanta, Boston and their neighboring suburbs," said Andy Graiser, Co-President of DJM Realty, in press release. In related news, the Company disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that it is unable to estimate the costs expected to be incurred in connection with its store reduction plan, including the amount of any future cash expenditures in connection with its plan. A full-text copy of the Borders Store Closing Sales Order and its accompanying exhibits is available for free at: http://bankrupt.com/misc/Borders_StoreClosingSaleORD.pdf DJM Realty Statement Borders Group, Inc. has retained DJM Realty, a Gordon Brothers Group Company, to manage the disposition project of approximately 200 underperforming stores. Borders which recently filed for Chapter 11 to restructure its operations and debt will continue to remain fully operational and open for business as usual during this process. The engagement of DJM Realty is subject to bankruptcy court approval. The 200 leases that are available for assignment in this bankruptcy disposition range from 12,895 -- 42,770 square feet and are available in the following locations: Alaska (1), Arkansas (1), Arizona (8), California (35), Colorado (6), Connecticut (6), District of Columbia (2), Florida (16), Georgia (5), Hawaii (2), Illinois (16), Indiana (6), Kansas (2), Kentucky (2), Louisiana (2), Massachusetts (6), Maryland (3), Michigan (4), Minnesota (4), Missouri (6), Montana (1), North Carolina (5), New Hampshire (1), New Jersey (4), New Mexico (2), Nevada (1), New York (9), Ohio (7), Oklahoma (2), Pennsylvania (9), Puerto Rico (2), Tennessee (1), Texas (10), Utah (2), Virginia (5), Washington (2) and Wisconsin (4). "Borders' real estate has begun to create interest among retailers, supermarkets and non-retailer users. The available portfolio offers a unique mix of mid and big box locations with long lease terms and strong retail co-tenants. Numerous properties are located in markets that are very difficult to enter, including northern and southern California, the cities of New York, Chicago, Dallas, Atlanta, Boston and their neighboring suburbs," said Andy Graiser, Co-President of DJM Realty. DJM Realty has worked with over 290 companies to dispose of their excess or underperforming real estate. DJM Realty is a leader in finding innovative ways to consolidate and reconfigure real estate to achieve the highest possible value. For more information regarding the disposition assignment please contact James Avallone of DJM Realty at (631) 752-1100 x224 or javallone@djmrealty.com or Emilio Amendola at (631) 752-1100 x223 or eamendola@djmrealty.com. Property details are available at http://www.djmrealty.com/ About Borders Group Borders Group is a leading operator of book, music and movie superstores and mall-based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders- branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. Two of Borders' flagship stores (along with other less prominent stores) are located in Manhattan. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e- commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner. Esq, Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group has sought approval to sell merchandise and owned furniture, fixtures and equipment located at approximately 200 of their stores and, at Borders' option, up to 75 of 136 potential other stores, through store closing sales. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000) BORDERS GROUP: Has Interim Access to $400-Mil. in FInancing ----------------------------------------------------------- Judge Arthur J. Gonzales of the U.S. Bankruptcy Court for the Southern District of New York has granted Borders Group, Inc. and its debtor affiliates interim access to approximately $400 million of a proposed $505 million debtor-in-possession financing facility led by GE Capital, Restructuring Finance. Borders Group Chief Executive Officer Mike Edwards stated in a public statement, "We are moving quickly right at the outset of the Chapter 11 process to restore stability to our business and protect our enterprise and its brand. We now have financing to pay our vendors and other related parties in a timely fashion for post-petition goods and services, with the funding and related court approvals to operate our business effectively on a day-to- day basis. We look forward to continuing to meet the needs of our customer base and being a preeminent and innovative retailer in this space." Debtors Borders Group Inc. and Borders Inc., as borrowers, are seeking final approval of a first lien new money superpriority priming credit facility with a maximum outstanding principal amount of up to $505 million from a syndicate of lenders. The $505 million DIP Facility consists of a "Working Capital Facility" and a "Term B Facility." A. The Working Capital Facility consists of: (1) a senior secured, superpriority revolving credit facility of up to $410 million; (2) a senior secured, superpriority "first in last out" term loan of up to $20 million; (3) a senior secured, superpriority term loan of up to $55 million; and (4) an additional letter of credit "cash management" facility of up to $20 million. The Revolving Credit Facility includes (i) a $75 million letter of credit subfacility, and (ii) a $50 million swingline subfacility, both to be provided by General Electric Capital Corporation. B. The Term B Facility is a senior secured superpriority term loan in a committed aggregate principal amount equal to the lesser of (i) $55,000,000, or (ii) the amount provided in the applicable DIP Order. All the other Debtors serve as guarantors of the proposed DIP Facility. General Electric Capital Corporation or GECC serves as the Working Capital Facility Administrative Agent. GA Capital LLC serves as the Term B Facility Administrative Agent. The Working Capital Lenders are comprised of a syndicate of banks and financial institutions, including GECC. The Term B Lenders include Tennenbaum Capital Partners, LLC, Stone Tower Credit Funding I Ltd., GB Merchant Partners, LLC and/or their affiliates, and other lenders. The DIP Financing will be used to (i) finance the working capital needs and for general corporate purposes of the Debtors, (ii) pay the fees, costs and expenses incurred by the Debtors in connection with the Chapter 11 cases, and (iii) refinance the Debtors' Prepetition Credit Facilities. The DIP Facility will mature on the earlier of: (i) one year after the closing date of the DIP Facility, (ii) the effective date of the Plan of Reorganization, or (iii) the date of the sale of all or substantially all of the Debtors' assets. Fees In exchange for providing the DIP Loan, the Debtors agree to pay the DIP Agents and DIP Lenders certain fees: * Facility Fee Letter: The Debtors have agreed to pay: (1) a $250,000 non-refundable annual administration fee to the Working Capital Agent, (2) a $7,500 non-refundable collateral monitoring fee to the Term B Agent, (3) a $2,250,000 non-refundable underwriting fee to the Working Capital Agent, (4) a $7,760,000 non-refundable closing fee to the Working Capital Lead Arranger for the benefit of the DIP Lenders, (5) a $250,000 work deposit fee to the Term B Agent, to be applied to the reimbursement of the Term B Agent's out-of- pocket fees and expenses. * Structuring Fee Letter: A $4.5 million structuring fee will be paid the Working Capital Agent on the Closing Date. * Term B Letter Agreement: The Debtors acknowledge that the Prepetition Term Lenders are entitled to a make-whole payment in the amount of $1,460,000. The Prepetition Term Lenders have agreed to waive that payment upon satisfaction of certain conditions, including (i) entry of a final order approving the payment of the fees set forth in the Facility Fee Letter, (ii) indefeasible payment by the Borrowers of all fees due under the Facility Fee Letter, and (iii) the expiration of the Challenge Period with no Challenge having been filed or commenced. The Debtors have provided or will provide copies of the confidential fee letters to the U.S. Trustee, to the Court, and to the professionals for any official creditors' committee appointed in their Chapter 11 cases. The Debtors seek that this side letter and its contents be kept confidential pursuant to Rule 9018 of the Federal Rules of Bankruptcy Procedure. Interest Rates At the Debtors' option, all outstanding principal balances under the DIP Facility will bear interest at either (a) a fluctuating rate equal to the Base Rate plus the Applicable Margin or (b) LIBOR plus the Applicable Margin. The Base Rate will be a floating rate defined as the highest of (a) the rate last quoted by The Wall Street Journal (or another national publication selected by the Agents) as the U.S. "Prime Rate," (b) the Federal Funds Rate plus 50 basis points. LIBOR will not be less than (a) 150 basis points in respect of the FILO Tranche, and (b) 100 basis points in respect of the Term B Loans. Upon the occurrence and during the continuance of an event of default in the DIP Credit Agreement, an additional default interest rate equal to 2% per annum applies to all outstanding borrowings under the DIP Credit Agreement. Collateral and Priority The obligations of the Debtors under the DIP Facility are secured by a lien covering substantially all of the assets, rights and properties of the Debtors, subject to certain exceptions. The DIP Credit Agreement provides that all DIP obligations will constitute administrative expenses in the Debtors' Chapter 11 bankruptcy cases, with administrative priority and senior secured status under Sections 364(c) and 364(d) of the Bankruptcy Code and, subject to certain exceptions, will have priority over any and all administrative expense claims, unsecured claims and costs and expenses in the Debtors' Chapter 11 cases. Except as set forth, the security interests securing the DIP Facility will be junior to all valid, enforceable, non-avoidable, perfected security interests in existence as of the Petition Date that are permitted under the Debtors' Prepetition Credit Facilities and senior to the Prepetition Facilities under applicable law as of the Petition Date and otherwise reasonably acceptable to DIP Agents. The superpriority administrative expense claims to be granted to the DIP Lenders with respect to the DIP Obligations will be subject to the "Carve-Out." Carve-Out The Carve-Out refers to: (i) all fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the U.S. Trustee pursuant to 28 U.S.C. Section 1930(a); (ii) upon a Termination Declaration Date, the sum of $4,000,000, which amount may be used subject to the terms of the applicable DIP Order to pay any fees or expenses of the bankruptcy professionals of the Debtors and any statutory committees appointed in the Debtors' cases; (iii) any accrued and unpaid fees and expenses of the Debtors' and the Committee's professionals incurred prior to the receipt of the Carve-Out Trigger Notice; and (iv) any professional fees and documented out-of-pocket expenses of a chapter 7 trustee under Section 726(b) of the Bankruptcy Code up to a maximum amount of $100,000 in the aggregate. Events of Default The DIP Credit Agreement provides for certain customary events of default, including events of default resulting from non-payment of principal, interest or other amounts when due, material breaches of the Debtors' representations and warranties, material breaches by the Debtors of their covenants in the DIP Credit Agreement or ancillary loan documents, cross-defaults under other agreements or instruments, the entry of material judgments against the Debtors, or the invalidity of the subordination provisions contained in the DIP Credit Agreement. The DIP Credit Agreement also includes events of default that may arise from the Debtors' failure to meet certain specified milestones in the Debtors' Chapter 11 cases, including milestones with respect to the Debtors' acceptance or rejection of real estate lease, the implementation of the Debtors' store reduction plan and minimum borrowing availability. Upon the occurrence of an event of default, the DIP Credit Agreement provides that all principal, interest and other amounts due will become immediately due and payable, either automatically or at the election of specified lenders. A full-text copy of the DIP Credit Agreement is available for free at http://bankrupt.com/misc/Borders_DIPCreditAgrmnt.pdf A full-text copy of the Interim DIP Order is available for free at http://bankrupt.com/misc/Borders_InterimDIPOrder.pdf Final Hearing The Court is scheduled to convene a hearing on the final approval of the Debtors' DIP Facility on March 15, 2011, at 10:00 a.m. Parties-in-interest have until March 8, 2011, at 4:00 p.m. Eastern Time, to written objections to the Debtors' request. The Debtors are directed to serve a final hearing notice -- to include a copy of the Interim DIP Order and the DIP Motion -- to notice parties no later than February 25, 2011. About Borders Group Borders Group is a leading operator of book, music and movie superstores and mall-based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders- branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. Two of Borders' flagship stores (along with other less prominent stores) are located in Manhattan. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e- commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner. Esq, Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group has sought approval to sell merchandise and owned furniture, fixtures and equipment located at approximately 200 of their stores and, at Borders' option, up to 75 of 136 potential other stores, through store closing sales. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000) BORDERS GROUP: Wins Interim Approval to Use Cash Collateral ----------------------------------------------------------- Borders Group Inc. and its units have sought and obtained a Court order allowing them to use of their Cash Collateral on an interim basis, in accordance with a prepared budget. A copy of the Budget prepared by the Debtors in relation to their Cash Collateral Use covering the period from February 14 to June 4, 2011, is available for free at: http://bankrupt.com/misc/Borders_BdgetFeb14toJun4.pdf The Debtors assert that they require the use of the Cash Collateral to fund their day-to-day operations. The Debtors aver that absence access to the Cash Collateral could bring their businesses to an immediate halt, with damaging consequences for their estates and creditors. The Cash Collateral refers to cash owned by the Debtors, which secure obligations to prepetition lenders under certain Prepetition Credit Agreements they are parties to. The Debtors' Prepetition Credit Agreements refer to a prepetition restated revolver agreement and a prepetition term loan agreement the Debtors executed on March 10, 2010, with certain lender parties: * The Prepetition Revolver Facility provides up to $970.5 million in loans, with Bank of America, N.A., serving as administrative agent. Bank of America, N.A. and General Electric Capital Corporation are the co-collateral agents; Wells Fargo Retail Finance, LLC and General Electric Capital Corporation are co-syndication agents; and JPMorgan Chase Bank, N.A. is the documentation agent for the Prepetition Revolver Agreement. As of the Petition Date, approximately $196.05 million was outstanding under the Prepetition Revolver. * The Prepetition Term Loan Facility comprised of an $80 million tranche and a $10 million tranche, with GA Capital LLC serving as administrative agent. As of the Petition Date, approximately $48.6 million is outstanding under the $80 million tranche, which matures on March 31, 2014. No amounts are outstanding under the $10 million tranche. The Prepetition Revolver is secured by a first priority security interest in substantially all of the Debtors' inventory, accounts receivable, cash and cash equivalents and other, a first priority pledge of equity interests in certain Debtor subsidiaries, and a second priority security interest in equity interests in certain Debtor subsidiaries. The Prepetition Term Loan Facility is secured by a first priority security interest in the Borders Group, Inc.'s ownership interests in certain subsidiaries and the fixed assets of the Debtors, and by a second priority security interest in all of the other Prepetition Collateral. Until the Debtors' obligations under the Prepetition Credit Facilities are paid in full, those claims are determined to be fully secured claims. Thus, to provide adequate protection to the Prepetition Lenders' interest in the Prepetition Collateral, which include the Cash Collateral, the Debtors agree to entitle the Prepetition Lenders to: (a) adequate protection liens on all assets of the Debtors; (b) an adequate protection superpriority administrative claim under Section 507(b) of the Bankruptcy Code, subject only to the Carve Out and the superpriority administrative claims of the secured parties under the DIP Facility; and (c) a funded indemnity reserve in an amount of up to $500,000 with respect to the Prepetition Revolver Facility and $300,000 with respect to the Prepetition Term Loan Facility. A hearing has been set for March 15, 2011, for the Court's final consideration of the Debtors' cash collateral use. About Borders Group Borders Group is a leading operator of book, music and movie superstores and mall-based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders- branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. Two of Borders' flagship stores (along with other less prominent stores) are located in Manhattan. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e- commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner. Esq, Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group has sought approval to sell merchandise and owned furniture, fixtures and equipment located at approximately 200 of their stores and, at Borders' option, up to 75 of 136 potential other stores, through store closing sales. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000) BORDERS GROUP: Australian Chain Sent to Administration ------------------------------------------------------ Robert Fenner at Bloomberg News reports that REDgroup Retail Pty. Ltd., owner of the Borders bookstore chain in Australia, named Ferrier Hodgson as voluntary administrators, indicating a move toward bankruptcy. An "urgent assessment" of the business will be conducted before a meeting of creditors in March, Ferrier Hodgson said in an e-mailed statement obtained by Bloomberg. The appointment comes less than a day after Borders Group Inc. filed for bankruptcy in the U.S. and began taking bids for 200 stores, according to Bloomberg. The REDgroup companies in Administration include: * REDgroup Retail Pty Ltd * Spine Holdco Pty Ltd * A&R Australia Holdings Pty Ltd * REDgroup Retail Administrative Services Pty Ltd * Whitcoulls Group Holdings Pty Ltd * Spine Newco Pty Ltd * Angus & Robertson Pty Ltd * Angus & Robertson Bookworld * Calendar Club Pty Ltd * WGL Retail Holdings Ltd * Whitcoulls Group Ltd * Calendar Club New Zealand Ltd * Borders New Zealand Ltd * REDgroup Online Ltd Ferrier Hodgson partner Steve Sherman said as far as possible it would be business as usual while the Administrators conduct an urgent assessment of the business's financial status and prepare for the first meeting of creditors. During this period he called for regular Angus & Robertson, Borders and Whitcoulls customers to continue supporting their local outlets. Mr. Sherman said the administrators will be working closely with David Cowling of Clayton Utz. The first meeting of creditors is likely to take place in the first week of March. REDgroup Retail Pty, with 260 stores and brands including Angus & Robertson and Whitcoulls, is the largest book retailer in Australia and New Zealand. It acquired Borders stores in Australia, New Zealand and Singapore in 2008. About Borders Group Borders Group is a leading operator of book, music and movie superstores and mall-based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders- branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. Two of Borders' flagship stores (along with other less prominent stores) are located in Manhattan. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e- commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner. Esq, Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group has sought approval to sell merchandise and owned furniture, fixtures and equipment located at approximately 200 of their stores and, at Borders' option, up to 75 of 136 potential other stores, through store closing sales. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000) BUILDING 500: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Building 500 LLC 10404 Essex Court, Suite 300 Omaha, NE 68114 Bankruptcy Case No.: 11-80341 Chapter 11 Petition Date: February 16, 2011 Court: United States Bankruptcy Court District of Nebraska (Omaha Office) Debtor's Counsel: Joseph H. Badami, Esq. WOODS & AITKEN, LLP 301 South 13th Street, Suite 500 Lincoln, NE 68508 Tel: (402) 437-8500 E-mail: jbadami@woodsaitken.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 James Riskowski, manager. CAPITAL AUTOMOTIVE: S&P Raises Ratings to 'B+' on Refinancing ------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit ratings on Capital Automotive LLC and its operating company, Capital Automotive L.P., to 'B+' from 'B'. The rating outlook is stable. S&P assigned 'B+' senior debt issue ratings and '3' recovery ratings to the proposed new facilities. CARS plans to establish a new six-year $1.5 billion term loan and a five-year $200 million revolving credit facility. The company will use borrowings under the term loan facility, along with cash on hand and an equity contribution from funds managed by DRA Advisors LLC, largely to refinance existing borrowings, including its $1.4 billion tranche C term loan, scheduled to mature in December 2012, and its existing revolving credit facility, which expires in December 2011 and under which there are currently approximately $100 million of borrowings. CARS and DRA, a real estate investment firm that effectively controls CARS through its investment funds, will also be reducing CARS' debt-like preferred stock by approximately $122 million. "S&P think the planned refinancing transaction should bolster CARS' coverage metrics and liquidity as a result of longer maturities, lower fixed charges, and increased borrowing availability under the revolving credit facility," said Standard & Poor's credit analyst Scott Sprinzen. CARS' credit profile had already benefited from a series of refinancing actions that it took late last year, including the issuance by CARS DB4 L.P., a wholly owned subsidiary of Capital Automotive LLC, of $463.3 million of ABS debt. S&P's rating on CARS reflects the company's highly aggressive financial leverage, partially offset by relatively stable revenues and cash flow. CARS' financial leverage will remain aggressive, with total debt (including debt-like preferred) to debt plus equity of about 72% (or 66% on an undepreciated basis), debt to EBITDA of about 11x, and fixed-charge coverage at about 1.3x. Barring further actions in the meantime to extend its debt maturities, CARS could face onerous debt maturities during 2016- 2017, when its new credit facilities would otherwise expire. S&P's rating on CARS also takes into account the single-purpose nature of the company's assets. Moreover, CARS' asset base will continue to be almost completely encumbered under secured borrowing agreements. S&P currently sees little likelihood of a downgrade during the 12- month period addressed by the outlook. The financial condition of CARS' auto dealer tenants has improved significantly in recent quarters, owing to an ongoing cyclical rebound in new-vehicle sales. Even during the recent severe recession, CARS incurred only nominal missed rents. With the completion of the pending refinancing, CARS will not face any debt maturities during 2011. On the other hand, S&P now expects CARS to once again place greater emphasis on achieving growth through acquisitions, as well as resume distributions to shareholders. As a result, S&P think its financial leverage will likely remain aggressive, thus limiting the potential for an upgrade. CAPITOL BANCORP: Amends Pacts for Trust-Preferred Securities ------------------------------------------------------------ On Feb. 8, 2011, Capitol Bancorp Ltd. entered into separate supplemental indentures and separate amended guarantee agreements with respect to the trust-preferred securities issued by each of Capitol Trust I and Capitol Trust XII, each Delaware statutory trusts. Each of the Supplemental Indenture and the Amended Guarantee Agreement for Capitol Trust I is by and between the Company and The Bank of New York Mellon Trust Company, N.A., a national banking association organized and existing under the laws of the United States, as trustee. Each of the Supplemental Indenture and the Amended Guarantee Agreement for Capitol Trust XII is by and between the Company and Manufacturers and Traders Trust Company, a Delaware trust company, as trustee. The Supplemental Indentures and the Amended Guarantee Agreements relate to certain restrictions placed on Capitol during a period in which Capitol has deferred the payment of interest on the subordinated debentures underlying the Trust-Preferred Securities of Capitol Trust I and XII. In April 2009, Capitol announced that it had elected to defer interest payments on the subordinated debentures. Capitol is not in default with respect to such deferral of interest payments. However, under the prior agreements governing the Trust-Preferred Securities, Capitol was restricted from (i) exchanging its common stock for trust- preferred securities ranking pari passu with the Trust-Preferred Securities, and (ii) exchanging its common stock for less than all of the Trust-Preferred Securities, respectively, during the period in which Capitol has deferred the payment of interest. The Supplemental Indentures and the Amended Guarantee Agreements have been amended to allow those exchange offers to take place without giving rise to a default under the governing documents. On Feb. 10, 2011, Capitol settled the offer to exchange shares of its common stock for any and all of its outstanding trust- preferred securities issued by Capitol Trust I, Capitol Trust II, Capitol Statutory Trust III, Capitol Trust 4 (a/k/a Trust IV), Capitol Trust VI, Capitol Trust VII, Capitol Statutory Trust VIII, Capitol Trust IX, Capitol Trust X, Capitol Trust XI and Capitol Trust XII. Capitol accepted for exchange all trust-preferred securities that were validly tendered in the Exchange Offer, resulting in the issuance of 19,545,360 shares of its common stock in exchange for $11,806,020 liquidation amount of trust-preferred securities of Capitol Trust I and $7,739,340 liquidation amount of trust-preferred securities of Capitol Trust XII. The Exchange Offer expired at 11:59 p.m., Michigan time, on Jan. 31, 2011. For each $10.00 liquidation amount of the Trust-Preferred Securities that Capitol accepted in the Exchange Offer, Capitol issued 10 previously unissued shares of its common stock. No accrued and unpaid interest will be paid by Capitol with respect to the Trust-Preferred Securities tendered in the Exchange Offer. The Exchange Offer resulted in the retirement of approximately $11.8 million aggregate liquidation amount of the trust-preferred securities of Capitol Trust I and the retirement of approximately $7.7 million aggregate liquidation amount of the trust-preferred securities of Capitol Trust XII. Capitol's common stock was issued in the Exchange Offer in reliance upon the exemption set forth in Section 3(a)(9) of the Securities Act of 1933, as amended, for securities exchanged by an issuer with its existing security holders exclusively where no commission or other renumeration is paid or given directly or indirectly for soliciting such exchange. About Capitol Bancorp Limited Capitol Bancorp Limited (NYSE: CBC) is a national community banking company, with a network of bank operations in 14 states. Founded in 1988, Capitol Bancorp Limited has executive offices in Lansing, Mich., and Phoenix, Ariz. The Company's balance sheet at Sept. 30, 2010, shows $4.23 billion in total assets, $4.16 billion in total liabilities, and equity of $77.68 million. In September 2009, Capitol and its second-tier bank holding companies entered into a written agreement with the Federal Reserve Bank of Chicago under which Capitol has agreed, among other things, to submit to the Reserve Bank a written plan to maintain sufficient capital at Capitol on a consolidated basis and at Michigan Commerce Bank (as a separate legal entity on a stand- alone basis); and a written plan to enhance the consolidated organization's risk management practices, a strategic plan to improve the consolidated organization's operating results and overall condition and a cash flow projection. Certain of Capitol's bank subsidiaries have entered into formal agreements with their applicable regulatory agencies. Those agreements provide for certain restrictions and other guidelines and/or limitations to be followed by the banks. In 2009, Capitol commenced the deferral of interest payments on its various trust-preferred securities, as is permitted under the terms of the securities, to conserve cash and capital resources. The payment of interest may be deferred for periods up to five years. During such deferral periods, Capitol is prohibited from paying dividends on its common stock (subject to certain exceptions) and is further restricted by Capitol's written agreement with the Federal Reserve Bank of Chicago. Accrued interest payable on such securities approximated $18.1 million at June 30, 2010. CASTLETON PLAZA: Case Summary & 14 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Castleton Plaza, LP 6314-6398 East 82nd Street & 8238-8284 Center Run Road Indianapolis, IN 46250 Bankruptcy Case No.: 11-01444 Chapter 11 Petition Date: February 16, 2011 Court: United States Bankruptcy Court Southern District of Indiana (Indianapolis) Judge: Basil H. Lorch III Debtor's Counsel: Paul T. Deignan, Esq. TAFT STETTINIUS & HOLLISTER LLP 1 Indiana Sq Ste 3500 Indianapolis, IN 46204 Tel: (317) 713-3500 E-mail: pdeignan@taftlaw.com Scheduled Assets: $7,578,601 Scheduled Debts: $10,354,462 A list of the Company's 14 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/insb11-01444.pdf The petition was signed by Joyce A. Bradley, assistant secretary of Castleton Plaza Management, Inc., Debtor's general partner. CATALYST PAPER: Snowflake Mill Extends CBA with USW Until 2014 -------------------------------------------------------------- Catalyst Paper announced that the United Steelworkers (USW) Local 2688 representing 186 hourly employees at the company's Snowflake mill have ratified renewal of the labour agreement through to February 28, 2014. The current labour agreement expires February 28, 2011. The new agreement provides for adjusted wage rates for new hires and entry level jobs, as well as for line of progression jobs. Other workplace management changes will contribute to greater stability and efficiency in the mill's overall operation. "This agreement is a significant step in making our Snowflake mill more competitive in a very challenging recycled paper market. It provides strong evidence of the ongoing cooperation that exists among employees, United Steelworkers leaders and managers at the mill," said Kevin J. Clarke, president and chief executive officer. "We commend the entire Snowflake team for reaching this agreement in such a timely manner." About Catalyst Paper Based in Richmond, British Columbia, in Canada, Catalyst Paper Corporation (TSX:CTL) manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With six facilities located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 2.5 million tonnes. The Company's balance sheet at Sept. 30, 2010, showed C$1.73 billion in total assets, C$1.32 billion in total liabilities, and stockholders' equity of C$406.2 million. * * * In mid-March 2010, Moody's Investors Service downgraded Catalyst's Corporate Family Rating to 'Caa1' from 'B3'. Catalyst's CFR downgrade anticipates a marked deterioration in the company's financial performance over the coming year, with significant EBITDA erosion compared to 2009 levels and negative free cash flow generation. In May 2010, Standard & Poor's Ratings Services revised the outlook on Catalyst to stable from negative. S&P affirmed the 'CCC+' long-term corporate credit rating on the Company. The ratings on Catalyst reflect S&P's view of the company's highly leveraged capital structure, history of weak profitability, fiber supply issues, and its participation in cyclical commodity markets. In Standard & Poor's opinion, these risks are partially mitigated by the company's revenue diversity and improving cost profile. CB RICHARD: S&P Affirms 'BB' Counterparty Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its ratings on CB Richard Ellis Services Inc., including its 'BB' long-term counterparty credit rating. The outlook is stable. At the same time, S&P assigned a 'BB' issue-level rating and a recovery rating of '4' to CBRE's planned $800 million in incremental credit facility borrowings (composed of $500 million Tranche C and $300 million Tranche D loans). S&P also revised the recovery rating to '4' from '3' on CBRE's existing credit facility. "S&P's affirmation follows commercial real estate services firm CB Richard Ellis Group's agreement to acquire most of the real estate asset management business of ING Group N.V," said Standard & Poor's credit analyst Rian Pressman. This acquisition will make CBRE the world's largest CRE investment manager, as measured by assets under management. Beyond this strategic benefit, the acquisition will also increase the proportion of revenue generated by more stable, fee-based businesses. For 2010, on a pro forma basis including the acquisition, the proportion of revenue and adjusted EBITDA generated by investment management would have been approximately 9% and 20%, respectively. CBRE's proposed financing for the acquisition includes an incremental $800 million credit facility. While the additional borrowing does increase leverage somewhat, it was not unanticipated given the built-in accordion feature in its existing credit facility, which S&P initially rated in October 2010. Pro forma leverage as measured by the debt-to-adjusted EBITDA ratio at year-end 2010 would be 2.9x, which is acceptable at the current rating level. Pro forma leverage on a covenant basis would be 2.2x, well within the 3.75x maximum. In addition, management announced that it may prepay a portion of the loans under its secured credit facility later in 2011. (CBRE's board of directors authorized a future aftermarket equity offering of common shares of up to $250 million.) CBRE will also acquire approximately $55 million of coinvestments in ING's global securities business and possibly interests in other funds. This would meaningfully increase coinvestments, which totaled $99 million at year-end 2010. This exposure continues to limit CBRE's ratings, given the company's negative tangible equity. Although the size of this exposure would remain manageable, S&P believes the credit and market risk inherent in such positions requires capital support. The '4' recovery rating reflects S&P's expectation that lenders would realize an average (30%-50%) recovery of principal in the event of a payment default. S&P also revised its recovery rating to '4' from '3' (meaningful (50%-70%) recovery) on CBRE's existing credit facility (including the $350 million Tranche A and $300 million Tranche B term loans, and the $700 million revolver), reflecting the increase in secured debt from the planned financing. The stable outlook reflects CBRE's market-leading franchise in CRE services and S&P's expectation that the gradually improving economy will strengthen its financial profile. Reduction in leverage and improved debt service ratios could lead us to raise the ratings. However, CBRE's historically aggressive financial management, the cyclical nature of CRE sales and leasing, and the lack of tangible equity limit upward rating movement. CDC PROPERTIES: Files Schedules of Assets & Liabilities ------------------------------------------------------- CDC Properties I, LLC, filed with the U.S. Bankruptcy Court for the Western District of Washington its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $45,000,000 B. Personal Property $2,304,590 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $75,574,257 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $140,244 ----------- ----------- TOTAL $47,304,590 $75,714,502 Tacoma, Washington-based CDC Properties I, LLC, owns 10 commercial buildings in Washington. Most of the space in its buildings is leased to the State of Washington and occupied by various of its agencies. CDC Properties filed for Chapter 11 bankruptcy protection (Bankr. W.D. Wash. Case No. 11-41010) on Feb. 10, 2011. Timothy W. Dore, Esq., at Ryan Swanson & Cleveland PLLC, serves as the Debtor's general counsel. The Debtor estimated its assets and debts at $10 million to $50 million. CDC PROPERTIES: Taps Ryan Swanson as General Counsel ---------------------------------------------------- CDC Properties I, LLC, asks the U.S. Bankruptcy Court for the Western District of Washington to employ Ryan, Swanson & Cleveland, PLLC, as general counsel. RSC will represent the Debtor in any and all legal matters that may arise during the administration of its bankruptcy case. RSC received a $25,000 advance fee deposit for services in this bankruptcy case about February 10, 2011. To the best of the Debtor's knowledge, RSC does not hold any interest adverse to the Debtor's estate and creditors, and is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Tacoma, Washington-based CDC Properties I, LLC, owns 10 commercial buildings in Washington. Most of the space in its buildings is leased to the State of Washington and occupied by various of its agencies. CDC Properties filed for Chapter 11 bankruptcy protection (Bankr. W.D. Wash. Case No. 11-41010) on Feb. 10, 2011. Timothy W. Dore, Esq., at Ryan Swanson & Cleveland PLLC, serves as the Debtor's general counsel. The Debtor estimated its assets and debts at $10 million to $50 million. CENTRALIA OUTLETS: U.S. Trustee Unable to Form Creditors Committee ------------------------------------------------------------------ The Office of the U.S. Trustee for Region 18 notified the U.S. Bankruptcy Court for the Western District of Washington that it was unable to appoint an official committee of unsecured creditors in the Chapter 11 case of Centralia Outlets LLC. The U.S. Trustee explained that there were insufficient indications of willingness from the unsecured creditors to serve in the committee. About Centralia Outlets Centralia Outlets LLC is the owner of the Centralia Factory Outlets mall in Centralia, Washington. The mall, located on Interstate 5 in Centralia, is 80% occupied, and generates net income, after debt service, of $80,000 to $100,000 a month. Centralia filed for Chapter 11 after receiving an order sending the mall to receivership. Sterling Bank prevailed on a state court to order the appointment of a receiver based on alleged non- financial defaults in the mortgage. The mall owner said that principal and interest payments were current on the $24.3 million owing to Sterling as of the petition date. Centralia filed for Chapter 11 protection on Dec. 3, 2010 (Bankr. W.D. Wash. Case No. 10-24529), after receiving an order sending the mall to receivership. James L. Day, Esq., at Bush Strout & Kornfeld, in Seattle, Washington, represents the Debtor. Perkins Coie LLP serves as Debtor's general bankruptcy counsel. The Debtor disclosed $29,206,999 in assets and $23,999,507 in liabilities. CHAPRIL BUILDING: Case Summary & 2 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Chapril Building, LLC 10 S. 373 Normantown Road Naperville, IL 60564 Bankruptcy Case No.: 11-06095 Chapter 11 Petition Date: February 16, 2011 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: A. Benjamin Goldgar Debtor's Counsel: Gregory K. Stern, Esq. GREGORY K. STERN, P.C. 53 West Jackson Blvd., Suite 1442 Chicago, IL 60604 Tel: (312) 427-1558 Fax: (312) 427-1289 E-mail: gstern1@flash.net Estimated Assets: $500,001 to $1,000,000 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/ilnb11-06095.pdf The petition was signed by Edmund L. Dale, managing member. CHARTER OAK BANK: Closed; Bank of Marin Assumes All Deposits ------------------------------------------------------------ Charter Oak Bank of Napa, Calif., was closed on Friday, Feb. 18, 2011, by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of Marin of Novato, Calif., to assume all of the deposits of Charter Oak Bank. The two branches of Charter Oak Bank will reopen during normal banking hours as branches of Bank of Marin. Depositors of Charter Oak Bank will automatically become depositors of Bank of Marin. Deposits will continue to be insured by the FDIC. Customers of Charter Oak Bank should continue to use their existing branch until they receive notice from Bank of Marin that it has completed systems changes to allow other Bank of Marin branches to process their accounts as well. As of December 31, 2010, Charter Oak Bank had around $120.8 million in total assets and $105.3 million in total deposits. The FDIC will retain $28.5 million of the assets for later disposition. Customers who have questions about the transaction can call the FDIC toll-free at 1-877-367-2717. Interested parties also can visit the FDIC's Web site at: http://www.fdic.gov/bank/individual/failed/charteroak.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $21.8 million. Compared to other alternatives, Bank of Marin's acquisition was the least costly resolution for the FDIC's DIF. Charter Oak Bank is the twenty-first FDIC-insured institution to fail in the nation this year, and the second in California. The last FDIC-insured institution closed in the state was Canyon National Bank, Palm Springs, on February 11, 2011. CINCINNATI BELL: S&P Downgrades Corporate Credit Rating to 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings on Cincinnati-based Cincinnati Bell Inc. and subsidiary Cincinnati Bell Telephone Co., including the corporate credit ratings, which S&P lowered to 'B' from 'B+'. In addition, S&P also lowered all issue-level ratings by one notch. The outlook is stable. "The downgrade is based on S&P's expectation that the combination of the company's ongoing expansion of its data center business and aggressive financial policies will prevent leverage from declining below the 5x level that S&P had associated with the previous rating," explained Standard & Poor's credit analyst Naveen Sarma. S&P estimates leverage as of Dec. 31, 2010, pro forma for a full year of the CyrusOne acquisition, at about 5.x. Given that S&P expects limited discretionary cash flow after capital spending and only modest EBITDA improvement, S&P therefore foresee limited leverage reduction over the next few years. S&P's adjusted leverage includes unfunded pension and other post-employment benefit obligations, operating lease adjustments, accrued interest, and the treatment of 50% of preferred stock as debt. The ratings on CBI reflect its highly leveraged financial risk profile, as well as the intense competitive pressures facing its core wireline business, which contributes the majority of consolidated revenues and EBITDA and helps determine S&P's business risk profile assessment of weak. CBI's wireless operations are also subject to intense competition from both national wireless providers and regional competitors, and the company is concentrated in a single market. Tempering rating factors include CBI's healthy EBITDA margins in its core wireline business, despite ongoing access-line erosion and revenue losses, and growing contributions from its data center colocation business which offers better growth characteristics. CITIZENS BANK OF EFFINGHAM: Closed; HeritageBank Assumes Deposits ----------------------------------------------------------------- Citizens Bank of Effingham of Springfield, Ga., was closed on Friday, Feb. 18, 2011, by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with HeritageBank of the South in Albany, Ga., to assume all of the deposits of Citizens Bank of Effingham. The four branches of Citizens Bank of Effingham will reopen during normal banking hours as branches of HeritageBank of the South. Depositors of Citizens Bank of Effingham will automatically become depositors of HeritageBank of the South. Deposits will continue to be insured by the FDIC. Customers of Citizens Bank of Effingham should continue to use their existing branch until they receive notice from HeritageBank of the South that it has completed systems changes to allow other HeritageBank of the South branches to process their accounts as well. As of December 31, 2010, Citizens Bank of Effingham had around $214.3 million in total assets and $206.5 million in total deposits. HeritageBank of the South will pay the FDIC a premium of 1.0 % to assume all of the deposits of Citizens Bank of Effingham. In addition to assuming all of the deposits of the failed bank, HeritageBank of the South agreed to purchase essentially all of the assets. The FDIC and HeritageBank of the South entered into a loss-share transaction on $158.1 million of Citizens Bank of Effingham's assets. HeritageBank of the South will share in the losses on the asset pools covered under the loss-share agreement. The loss- share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can call the FDIC toll-free at 1-800-930-6827. Interested parties also can visit the FDIC's Web site at: http://www.fdic.gov/bank/individual/failed/citizensbk_ga.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $59.4 million. Compared to other alternatives, HeritageBank of the South's acquisition was the least costly resolution for the FDIC's DIF. Citizens Bank of Effingham is the twentieth FDIC-insured institution to fail in the nation this year, and the sixth in Georgia. The last FDIC-insured institution closed in the state was Habersham Bank, Clarkesville, earlier on February 18. CLAIRE'S STORES: Bank Debt Trades at 2% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Claire's Stores, Inc., is a borrower traded in the secondary market at 98.36 cents- on-the-dollar during the week ended Friday, Feb. 18, 2011, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.61 percentage points from the previous week, The Journal relates. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank loan matures on May 29, 2014, and carries Moody's Caa1 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Claire's Stores Claire's Stores, Inc. -- http://www.clairestores.com/-- operates as a specialty retailer of fashion accessories and jewelry for preteens and teenagers, as well as for young adults in North America and internationally. It offers jewelry products that comprise costume jewelry, earrings, and ear piercing services; and accessories, including fashion accessories, hair ornaments, handbags, and novelty items. Based in Pembroke Pines, Florida, Claire's Stores operates under two brands: Claire's(R), which operates worldwide and Icing(R), which operates only in North America. As of January 31, 2009, Claire's Stores, Inc., operated 2,969 stores in North America and Europe. Claire's Stores, Inc., also operates through its subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd. The Company also franchises 198 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. The Company's balance sheet at Oct. 30, 2010, showed $2.79 billion in total assets, $218.86 million in total current liabilities, $2.62 billion in long-term debt, and a stockholders' deficit of $47.89 million. Claire's Stores carries 'Caa2' corporate family and probability of default ratings, with 'positive' outlook, from Moody's Investors Service, and 'B-' issuer credit ratings, with 'stable' outlook, from Standard & Poor's. Moody's Investors Service in December 2010 upgraded Claire's Stores' ratings, including its Corporate Family Rating and Probability of Default Rating, to Caa2 from Caa3. The upgrade reflects a decrease in Claire's probability of default given that the company can now fully cover its interest expense. This is due to earnings improvement from solid comparable store sales growth, improved merchandise margins, and continued expense discipline. Claire's Caa2 Probability of Default Rating reflects Moody's view that although Claire's credit metrics have improved, they remain very weak as a result of its heavy debt load. For the twelve months ending October 30, 2010, Claire's debt to EBITDA was very high at 9.3 times. CLAIRE'S STORES: Expects to Report $422MM Net Sales for Q4 ---------------------------------------------------------- Claire's Stores, Inc., announced, preliminary unaudited financial results for the 2010 fourth quarter and the fiscal year, which ended Jan. 29, 2011. The Company expects to report net sales of $422 million for the 2010 fourth quarter, an increase of $11 million, or 2.7%, compared to the 2009 fourth quarter. The increase was attributable to an increase in same store sales and new store sales, partially offset by foreign currency translation effect of the Company's foreign locations' sales, closed stores and decreases in shipments to franchisees. Net sales would have increased 4.5% excluding the impact from foreign currency rate changes. Consolidated same store sales increased 3.2% in the 2010 fourth quarter. In North America, same store sales increased 4.7% in the 2010 fourth quarter. In Europe, same store sales increased 0.6% in the 2010 fourth quarter. The Company computes same store sales on a local currency basis, which eliminates any impact from changes in foreign exchange rates. Adjusted EBITDA in the 2010 fourth quarter is expected to be between $96 million and $98 million, compared to $93.4 million in the 2009 fourth quarter. The Company defines Adjusted EBITDA as earnings before interest, income taxes, gain from early debt extinguishment, depreciation and amortization, excluding the impact of transaction-related costs incurred in connection with its May 2007 acquisition and other non-recurring or non-cash expenses, and normalizing occupancy costs for certain rent-related adjustments. The Company expects to report operating income for the 2010 fourth quarter in the range of $73 million to $75 million. The Company expects to report net sales of $1,426 million for fiscal 2010, an increase of $84 million, or 6.3%, compared to Fiscal 2009. Consolidated same store sales increased 6.5% in Fiscal 2010. In North America, same store sales increased 7.8% in Fiscal 2010 while Europe same store sales increased 4.3%. Adjusted EBITDA in fiscal 2010 is expected to be between $263 million and $265 million, compared to $233.9 million in fiscal 2009. The Company expects to report operating income for fiscal 2010 in the range of $176 million to $178 million. In addition, during fiscal 2010, the Company paid $80 million to retire $14 million of Senior Notes, $57 million of Senior Toggle Notes and $23 million of Senior Subordinated Notes. About Claire's Stores Claire's Stores, Inc. -- http://www.clairestores.com/-- operates as a specialty retailer of fashion accessories and jewelry for preteens and teenagers, as well as for young adults in North America and internationally. It offers jewelry products that comprise costume jewelry, earrings, and ear piercing services; and accessories, including fashion accessories, hair ornaments, handbags, and novelty items. Based in Pembroke Pines, Florida, Claire's Stores operates under two brands: Claire's(R), which operates worldwide and Icing(R), which operates only in North America. As of January 31, 2009, Claire's Stores, Inc., operated 2,969 stores in North America and Europe. Claire's Stores, Inc., also operates through its subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd. The Company also franchises 198 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. The Company's balance sheet at Oct. 30, 2010, showed $2.79 billion in total assets, $218.86 million in total current liabilities, $2.62 billion in long-term debt, and a stockholders' deficit of $47.89 million. Claire's Stores carries 'Caa2' corporate family and probability of default ratings, with 'positive' outlook, from Moody's Investors Service, and 'B-' issuer credit ratings, with 'stable' outlook, from Standard & Poor's. Moody's Investors Service in December 2010 upgraded Claire's Stores' ratings, including its Corporate Family Rating and Probability of Default Rating, to Caa2 from Caa3. The upgrade reflects a decrease in Claire's probability of default given that the company can now fully cover its interest expense. This is due to earnings improvement from solid comparable store sales growth, improved merchandise margins, and continued expense discipline. Claire's Caa2 Probability of Default Rating reflects Moody's view that although Claire's credit metrics have improved, they remain very weak as a result of its heavy debt load. For the twelve months ending October 30, 2010, Claire's debt to EBITDA was very high at 9.3 times. CLAIRE'S STORES: To Offer Sr. Secured Notes to Partly Repay Debt ---------------------------------------------------------------- Claire's Stores, Inc., intends to offer senior secured second lien notes due 2019. The net proceeds from the notes will be used to reduce outstanding indebtedness under the Company's current credit facility. The notes are being offered only to "qualified institutional buyers" in reliance on Rule 144A under the Securities Act of 1933, as amended, and outside the United States only to non-U.S. persons in reliance on Regulation S under the Securities Act. The notes have not been and will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. About Claire's Stores Claire's Stores, Inc. -- http://www.clairestores.com/-- operates as a specialty retailer of fashion accessories and jewelry for preteens and teenagers, as well as for young adults in North America and internationally. It offers jewelry products that comprise costume jewelry, earrings, and ear piercing services; and accessories, including fashion accessories, hair ornaments, handbags, and novelty items. Based in Pembroke Pines, Florida, Claire's Stores operates under two brands: Claire's(R), which operates worldwide and Icing(R), which operates only in North America. As of January 31, 2009, Claire's Stores, Inc., operated 2,969 stores in North America and Europe. Claire's Stores, Inc., also operates through its subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd. The Company also franchises 198 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. The Company's balance sheet at Oct. 30, 2010, showed $2.79 billion in total assets, $218.86 million in total current liabilities, $2.62 billion in long-term debt, and a stockholders' deficit of $47.89 million. Claire's Stores carries 'Caa2' corporate family and probability of default ratings, with 'positive' outlook, from Moody's Investors Service, and 'B-' issuer credit ratings, with 'stable' outlook, from Standard & Poor's. Moody's Investors Service in December 2010 upgraded Claire's Stores' ratings, including its Corporate Family Rating and Probability of Default Rating, to Caa2 from Caa3. The upgrade reflects a decrease in Claire's probability of default given that the company can now fully cover its interest expense. This is due to earnings improvement from solid comparable store sales growth, improved merchandise margins, and continued expense discipline. Claire's Caa2 Probability of Default Rating reflects Moody's view that although Claire's credit metrics have improved, they remain very weak as a result of its heavy debt load. For the twelve months ending October 30, 2010, Claire's debt to EBITDA was very high at 9.3 times. CONSTAR INT'L: Has $10-Mil. L/C Facility From Wells Fargo --------------------------------------------------------- Constar International Inc. and its units seek authority from the U.S. Bankruptcy Court for the District of Delaware to obtain a postpetition letter of credit facility in the amount of $10,000,000 from Wells Fargo Capital Finance, LLC. Jamie L. Edmonson, Esq., at Bayard, P.A., said in a court filing that the continuing availability of letters of credit to guarantee, where necessary, the Debtors' obligations to its vendors and suppliers is critical to the Debtors' operations. However, according to Mr. Edmonson, by entering into a the L/C facility agreement, the Debtors are not taking new debt, they are simply replacing one prepetition letter credit facility that was provided by General Electric Capital Corp. While the Debtors' revolving credit facility with GE Capital -- of which $29.4 million was outstanding as of the bankruptcy filing -- was refinanced and paid shortly with the DIP facility provided by noteholders that are supporting the pre-negotiated plan, the Debtors kept in place those undrawn letters of credit outstanding under the prepetition credit facility. The first of the prepetition L/Cs will shortly mature and GECC is unwilling to reissue the L/Cs when they mature. Wells Fargo -- who the Debtors intend will serve as their exit financier -- is willing to step in and replace GE Capital as the provider of letters of credit. The Debtors will pay to Wells Fargo on the first business day of each calendar month the rate of 1% percent per annum on the aggregate face amount of all L/Cs outstanding. Pre-Negotiated Chapter 11 Plan Constar International filed for Chapter 11 in January with a Chapter 11 plan negotiated with 75% of holders of senior secured floating rate notes. The restructuring plan calls for, among other things, a reduction of the Company's current debt level of $220 million by roughly $135 million to $150 million, with a significant corresponding reduction in cash interest. The Restructuring Support Agreement can be terminated by noteholders if the Debtors failed to obtain confirmation of the Chapter 11 plan by May (130 days after the Chapter 11 filing). As of the Petition Date, the Debtors had outstanding debt in the aggregate principal amount of roughly $251 million, consisting primarily of roughly (a) $29.4 million under their senior secured credit facility, including accrued and unpaid interest, and (b) $221.4 million in secured floating rate notes due 2012 (including accrued interest). Pursuant to the proposed Plan of Reorganization, Noteholders will convert 100% of the face amount of the current notes into new term debt in the face amount of US$70 million and convertible preferred stock of US$30 million, and will become the majority owners of the new common stock. Under the proposed plan, the Company's general unsecured claims will be converted to equity, and the current equity will be cancelled. The Company anticipates that the restructuring will be completed by late spring of 2011, subject to court approval. A copy of the Pre-Arranged Plan is available for free at: http://bankrupt.com/misc/Constar_Disc_Statement_2011.pdf A copy of the disclosure statement explaining the Plan is available for free at: http://bankrupt.com/misc/Constar_Prearranged_Plan_2011.pdf About Constar International Philadelphia, Pennsylvania-based Constar International Inc. -- http://www.constar.net/-- produces and supplies polyethylene terephthalate plastic containers for food and beverages. Constar filed for Chapter 11 protection in December 2008 (Bankr. D. Del. Lead Case No. 08-13432), with a pre-negotiated Chapter 11 plan. The plan, which reduced Constar's debt load by roughly $175 million, became effective on May 29, 2009. Attorneys at Bayard P.A., and Wilmer Cutler Pickering Hale and Dorr LLP represented the Debtor in the case. Due to operating losses caused by a significant decline in demand for its products from Pepsi-Cola Advertising and Marketing Inc. and other customers, Constar and its affiliates returned to Chapter 11 on January 11, 2011 (Bankr. D. Del. Case No. 11-10109), with a Chapter 11 plan negotiated with holders of 75% of the holders of $220 million in senior secured floating-rate notes. Andrew Goldman, Esq., and Dennis Jenkins, Esq., at Wilmer Cutler Pickering Hale and Dorr LLP, serve as the Debtors' general bankruptcy counsel. Jamie Lynne Edmonson, Esq., and Neil B. Glassman, Esq., at Bayard, P.A., serve as co-counsel to the Debtors. PricewaterhouseCoopers serves as the Debtors' independent auditors and accountants. Kurtzman Carson Consultants LLC serves as the Debtors' claims agent. Patrick J. Nash Jr., Esq., and Paul Wierbicki, Esq., at Kirkland & Ellis LLP, serve as counsel to the noteholders that have signed that plan support agreement. The Debtors disclosed $418 million in total assets and $414 million in total debts as of Sept. 30, 2010. CLEAR CHANNEL: Bank Debt Trades at 8% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Clear Channel Communications, Inc., is a borrower traded in the secondary market at 91.96 cents-on-the-dollar during the week ended Friday, February 18, 2011, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.37 percentage points from the previous week, The Journal relates. The Company pays 365 basis points above LIBOR to borrow under the facility. The bank loan matures on January 30, 2016, and carries Moody's Caa1 rating and Standard & Poor's CCC+ rating. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About CC Media and Clear Channel Clear Channel Communications, Inc. -- http://www.clearchannel.com/ -- is a diversified media company with three primary business segments: radio broadcasting, outdoor advertising and live entertainment. Clear Channel (OTCBB:CCMO) is the operating subsidiary of San Antonio, Texas-based CC Media Holdings, Inc. CC Media's balance sheet at Dec. 31, 2010 showed $17.48 billion in total assets, $1.25 billion in current liabilities, $20.61 billion in long-term liabilities and $7.20 billion in shareholders' deficit. * * * CC Media Holdings carries 'CCC+' issuer credit ratings from Standard & Poor's. Clear Channel Carries a 'Caa2' corporate family rating from Moody's Investors Service and an issuer default rating of 'CCC' from Fitch Ratings. Fitch said in November 2010, that its ratings 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. CONSTAR INT'L: Has $10-Mil. L/C Facility From Wells Fargo --------------------------------------------------------- Constar International Inc. and its units seek authority from the U.S. Bankruptcy Court for the District of Delaware to obtain a postpetition letter of credit facility in the amount of $10,000,000 from Wells Fargo Capital Finance, LLC. Jamie L. Edmonson, Esq., at Bayard, P.A., said in a court filing that the continuing availability of letters of credit to guarantee, where necessary, the Debtors' obligations to its vendors and suppliers is critical to the Debtors' operations. However, according to Mr. Edmonson, by entering into a the L/C facility agreement, the Debtors are not taking new debt, they are simply replacing one prepetition letter credit facility that was provided by General Electric Capital Corp. While the Debtors' revolving credit facility with GE Capital -- of which $29.4 million was outstanding as of the bankruptcy filing -- was refinanced and paid shortly with the DIP facility provided by noteholders that are supporting the pre-negotiated plan, the Debtors kept in place those undrawn letters of credit outstanding under the prepetition credit facility. The first of the prepetition L/Cs will shortly mature and GECC is unwilling to reissue the L/Cs when they mature. Wells Fargo -- who the Debtors intend will serve as their exit financier -- is willing to step in and replace GE Capital as the provider of letters of credit. The Debtors will pay to Wells Fargo on the first business day of each calendar month the rate of 1% percent per annum on the aggregate face amount of all L/Cs outstanding. Pre-Negotiated Chapter 11 Plan Constar International filed for Chapter 11 in January with a Chapter 11 plan negotiated with 75% of holders of senior secured floating rate notes. The restructuring plan calls for, among other things, a reduction of the Company's current debt level of $220 million by roughly $135 million to $150 million, with a significant corresponding reduction in cash interest. The Restructuring Support Agreement can be terminated by noteholders if the Debtors failed to obtain confirmation of the Chapter 11 plan by May (130 days after the Chapter 11 filing). As of the Petition Date, the Debtors had outstanding debt in the aggregate principal amount of roughly $251 million, consisting primarily of roughly (a) $29.4 million under their senior secured credit facility, including accrued and unpaid interest, and (b) $221.4 million in secured floating rate notes due 2012 (including accrued interest). Pursuant to the proposed Plan of Reorganization, Noteholders will convert 100% of the face amount of the current notes into new term debt in the face amount of US$70 million and convertible preferred stock of US$30 million, and will become the majority owners of the new common stock. Under the proposed plan, the Company's general unsecured claims will be converted to equity, and the current equity will be cancelled. The Company anticipates that the restructuring will be completed by late spring of 2011, subject to court approval. A copy of the Pre-Arranged Plan is available for free at: http://bankrupt.com/misc/Constar_Disc_Statement_2011.pdf A copy of the disclosure statement explaining the Plan is available for free at: http://bankrupt.com/misc/Constar_Prearranged_Plan_2011.pdf About Constar International Philadelphia, Pennsylvania-based Constar International Inc. -- http://www.constar.net/-- produces and supplies polyethylene terephthalate plastic containers for food and beverages. Constar filed for Chapter 11 protection in December 2008 (Bankr. D. Del. Lead Case No. 08-13432), with a pre-negotiated Chapter 11 plan. The plan, which reduced Constar's debt load by roughly $175 million, became effective on May 29, 2009. Attorneys at Bayard P.A., and Wilmer Cutler Pickering Hale and Dorr LLP represented the Debtor in the case. Due to operating losses caused by a significant decline in demand for its products from Pepsi-Cola Advertising and Marketing Inc. and other customers, Constar and its affiliates returned to Chapter 11 on January 11, 2011 (Bankr. D. Del. Case No. 11-10109), with a Chapter 11 plan negotiated with holders of 75% of the holders of $220 million in senior secured floating-rate notes. Andrew Goldman, Esq., and Dennis Jenkins, Esq., at Wilmer Cutler Pickering Hale and Dorr LLP, serve as the Debtors' general bankruptcy counsel. Jamie Lynne Edmonson, Esq., and Neil B. Glassman, Esq., at Bayard, P.A., serve as co-counsel to the Debtors. PricewaterhouseCoopers serves as the Debtors' independent auditors and accountants. Kurtzman Carson Consultants LLC serves as the Debtors' claims agent. Patrick J. Nash Jr., Esq., and Paul Wierbicki, Esq., at Kirkland & Ellis LLP, serve as counsel to the noteholders that have signed that plan support agreement. The Debtors disclosed $418 million in total assets and $414 million in total debts as of Sept. 30, 2010. CUMULUS MEDIA: Bank Debt Trades at 3% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Cumulus Media Inc. is a borrower traded in the secondary market at 96.80 cents-on- the-dollar during the week ended Friday, February 18, 2011, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.33 percentage points from the previous week, The Journal relates. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank loan matures on June 11, 2014, and carries Moody's Caa1 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Cumulus Media Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) -- http://www.cumulus.com/-- is the second largest radio broadcaster in the United States based on station count, controlling 350 radio stations in 68 U.S. media markets. In combination with its affiliate, Cumulus Media Partners, LLC, the Company believes it is the fourth largest radio broadcast company in the United States when based on net revenues. The Company's balance sheet at Sept. 30, 2010, showed $324.06 million in total assets, $673.31 million in total liabilities, and a stockholders' deficit of $349.25 million. Cumulus Media carries a 'Caa1' corporate family rating, and 'Caa2' probability-of-default rating, with 'stable' outlook, from Moody's Investors Service. It has 'B-' issuer credit ratings, with 'stable' outlook, from Standard & Poor's. In February 2011, Standard & Poor's revised its rating outlook on Cumulus Media Inc. to positive from stable. "The positive outlook revision reflects the asset and cash flow diversification benefits that Cumulus will gain in acquiring Cumulus Media Partners LLC," said Standard & Poor's credit analyst Andy Liu. Moody's on Jan. 31, 2011, said that there is no operational nor immediate credit impact upon closing of Cumulus Media Inc.' acquisition of Cumulus Media Partners. Cumulus has operated CMP's radio stations since it was formed in 2006 so there are no meaningful changes to operations. DEX MEDIA EAST: Bank Debt Trades at 20% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media East, LLC, is a borrower traded in the secondary market at 80.33 cents- on-the-dollar during the week ended Friday, February 18, 2011, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.23 percentage points from the previous week, The Journal relates. The Company pays 250 basis points above LIBOR to borrow under the facility, which matures on October 24, 2014. The debt is not rated. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Dex Media East Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc., and Local Launch, Inc., are the company's only direct wholly owned subsidiaries. Dex Media East, LLC, is a publisher of the official yellow pages and white pages directories for Qwest Communications International Inc. (Qwest) in the states, where Qwest is the primary incumbent local exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media, Inc., filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09- 11833 through 09-11852), after missing a $55 million interest payment on its senior unsecured notes due April 15. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, Illinois represent the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' financial advisor is Deloitte Financial Advisory Services LLP while its investment banker is Lazard Freres & Co. LLC. The Garden City Group, Inc., is claims and noticing agent. DJ HILES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: DJ Hiles, LLC dba LONG JOHN SILVERS P.O. 5209 Yuma, AZ 85366 Bankruptcy Case No.: 11-04006 Chapter 11 Petition Date: February 17, 2011 Court: U.S. Bankruptcy Court District of Arizona (Yuma) Judge: Eileen W. Hollowell Debtor's Counsel: Blake D. Gunn, Esq. LAW OFFICE OF BLAKE D. GUNN P.O. Box 22146 Mesa, AZ 85277-2146 Tel: (480) 710-8677 E-mail: bgunn@gunnfirm.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/azb11-04006.pdf The petition was signed by Dale J. Hiles, operating member. DREIER LLP: Trustee Seeks to Probe 39 Law Firms, Former Attorneys ----------------------------------------------------------------- Dow Jones' DBR Small Cap reports that the official charged with liquidating Dreier LLP wants to probe 39 law firms, businesses and individuals as she continues her search for funds to repay creditors. The report relates that the Chapter 11 trustee Sheila M. Gowan is seeking permission to dig up information from an alphabet of firms, from Akerman Senterfitt to Zeichner Ellman & Krause, as well as individual attorneys who once worked for the now-defunct law firm founded by Marc Dreier. Both groups may have seen matters formerly handled by Dreier LLP handed over to them after the firm closed its doors, and its one- time workers scattered to other ventures, according to DBR. "The trustee seeks information concerning pre-petition [Dreier LLP] client engagements and matters that were transferred to the witness," Ms. Gowan said in a probe request aimed at Lowenstein Sandler, the report adds. About Dreier LLP Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On December 8, 2008, the U.S. Securities and Exchange Commission filed a suit, alleging that Mr. Dreier made fraudulent offers and sales of securities in several cities, selling fake promissory notes to hedge and other private investment funds. The SEC asserted that Mr. Dreier also distributed phony financial statements and audit opinions, and recruited accomplices in connection with that scheme. Mr. Dreier, currently in prison, was charged by the U.S. government for conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No. 09-cr-00085). Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel. The Debtor estimated assets of $100 million to $500 million, and debts between $10 million and $50 million in its Chapter 11 petition. Gowan, a partner with Diamond McCarthy, was appointed Chapter 11 trustee. Wachovia Bank National Association, Sheila M. Gowan as trustee for Dreier LLP's Chapter 11 Estate, and Steven J. Reisman as post- confirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that put Mr. Dreier into bankruptcy under Chapter 7 on January 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier, 60, pleaded guilty to fraud and other charges in May 2009. The scheme to sell $700 million in fake notes unraveled in late 2008. Mr. Dreier is serving a 20-year sentence in a federal prison in Minneapolis. DUKE AND KING: Committee Taps Mesirow Fin'l. as Financial Advisor ----------------------------------------------------------------- The Hon. Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of Duke and King Acquisition Corp., to employ Mesirow Financial Consulting, LLC as its financial advisors. On Dec. 29, 2010, Habbo G. Fokkena, the U.S. Trustee for Region 12, appointed five members to the Creditors Committee namely: 1. The Coca-Cola Company, acting chairperson 2. K-Two, LLC 3. Gilbert Mechanical Contractors 4. Julie Oanh T. Nguyen 5. P&C Rental LLP MFC is expected to, among other things: a. review, monitor and assist with respect to proposed asset sales and dispositions as part of section 363 sales or a plan of reorganization or liquidation; b. assist in evaluating sale strategy and alternatives available to the creditors; and c. analyze assumption and rejection issues regarding executory contracts and leases. The hourly rates of MFC personnel are: Senior Managing Director, Managing Director and Director $745-$795 Senior Vice-President $635-$695 Vice President $535-$595 Senior Associate $435-$495 Associate $255-$375 Paraprofessional $125-$220 To the best of the Committee's knowledge, MFC is a ?disinterested person? as that term is defined in Section 101(14) of the Bankruptcy Code. The Committee is represented by: Aaron L. Hammer, Esq. Richard S. Lauter, Esq. FREEBORN & PETERS LLP 311 South Wacker Drive, Suite 3000 Chicago, IL 60606-6677 Tel: (312) 360-6000 Fax: (312) 360-6573 About Duke and King Acquisition Corp. Burnsville, Minnesota-based Duke and King Acquisition Corp., dba Burger King, was formed in November 2006, to acquire 88 Burger King franchise restaurants from the Nath Companies. It filed for Chapter 11 bankruptcy protection on December 4, 2010 (Bankr. D. Minn. Case No. 10-38652). Clinton E. Cutler, Esq., and Douglas W. Kassebaum, Esq., at Fredrikson & Byron, P.A., serve as the Debtor's bankruptcy counsel. Mastodon Ventures, Inc., acts as the Debtor's investment banker. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates Duke and King Missouri Holdings, Inc. (Bankr. D. Minn. Case No. 10-38654), Duke and King Missouri, LLC (Bankr. D. Minn. Case No. 10-38653), Duke and King Real Estate, LLC (Bankr. D. Minn. Case No. 10-38655), and DK Florida Holdings, Inc. (Bankr. D. Minn. Case No. 10-3856), filed separate Chapter 11 petitions on December 4, 2010. Maslon Edelman Borman & Brand, LLP serves as local counsel to the Creditors Committee. The cases are jointly administered, with Duke and King Acquisition Corp. as the lead case. DYER ROAD: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Dyer Road Property, LLC 4651 Dyer Boulevard Riviera Beach, FL 33407 Bankruptcy Case No.: 11-14188 Chapter 11 Petition Date: February 18, 2011 Court: U.S. Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: M Michael D. Seese, Esq. HILNSHAW & CULBERTSON LLP 1 E. Broward Boulevard, #1010 Fort Lauderdale, FL 33301 Tel: (954) 467-7900 Fax: (954) 467-1024 E-mail: mseese@hinshawlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The list of unsecured creditors filed together with its petition does not contain any entry. The petition was signed by Steve Zeiger, managing member. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Zeiger Crane Rental, Inc. 11-14183 02/18/11 EMIVEST AEROSPACE: Seeks Permission to Hold Auction, Avoid Default ------------------------------------------------------------------ Dow Jones' DBR Small Cap reports that Emivest Aerospace Corp. is trying for a third time to put its assets on the block, this time a securing an approximately $11 million offer to lead off the bidding, but the maker of high-speed corporate jets has less than a month to do so to avoid defaulting on its bankruptcy loan. Emivest Aerospace Corporation -- http://www.sj30jet.com/-- is a U.S.-based aircraft manufacturing company and a subsidiary of Emirates Investment & Development PSC. Emivest Aerospace Corporation produces the SJ30 light jet. Emivest Aerospace Corporation filed for Chapter 11 protection on Oct. 20, 2010 (Bankr. D. Del. Case No. 10-13391). Emivest estimated assets and debts between $50 million and $100 million. Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, serves as counsel to the Debtor. EQUIPMENT MANAGEMENT: Taps Schwartz Law Firm as Bankr. Counsel -------------------------------------------------------------- Equipment Management Technology asks for authorization from the U.S. Bankruptcy Court for the District of Nevada to employ The Schwartz Law Firm, Inc., as bankruptcy counsel. SLF will, among other things: a. attend meetings and negotiate with representatives of creditors and other parties in interest and advise and consult on the conduct of the Chapter 11 case, including all of the legal and administrative requirements of operating in Chapter 11; b. take all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on their behalf, the defense of any actions commenced against the estate, negotiations concerning all litigation in which the Debtor may be involved and objections to claims filed against the estate; c. prepare on behalf of the Debtor all motions, applications, answers, orders, reports and papers necessary to the administration of the estate; and d. negotiate and prepare on the Debtor's behalf plan(s) of reorganization, disclosure statement(s) and all related agreements and documents and take any necessary action on behalf of the Debtor to obtain confirmation of such plan(s). SLF will be paid based on the rates of its professionals: Attorneys $295-$475 Legal Assistants & Support Staff $125-$195 Samuel A. Schwartz, Esq., the principal of SLF, assures the Court that the firm does not hold any interest adverse to the Debtor's estate and creditors, and is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Las Vegas, Nevada-based Equipment Management Technology filed for Chapter 11 bankruptcy protection on February 9, 2011 (Bankr. D. Nev. Case No. 11-11816). The Debtor estimated its assets and debts at $10 million to $50 million. EQUIPMENT MANAGEMENT: Asks for Court's Nod to Sell Equipment ------------------------------------------------------------ Equipment Management Technology asks for authorization from the U.S. Bankruptcy Court for the District of Nevada to sell the Debtor's equipment, free and clear of all liens, claims, encumbrances, and interests and exempt from any stamp, transfer, recording or similar tax. The Equipment is the collateral of FCC, LLC, a Florida limited liability company, doing business as First Capital Western Region, LLC. On Aug. 25, 2008, FCC made a loan to the Debtor in the amount of up to $22 million which is evidenced by a note and is purportedly secured by liens on substantially all of the Debtor's assets. On Nov. 9, 2010, an order was entered by the District Court, Clark County, Nevada, appointing a receiver with respect to the Debtor's assets, in favor of FCC. At the time of the appointment, FCC alleged it was owed $13,474,161.10. Since the appointment of the receiver, it is unknown how much money was paid to FCC, and the exact amount of its debt today. The Debtor also requests that the sale be made free of transfer or stamp taxes to maximize the return to the estate. The Debtor proposes that sales of Equipment will only be for amounts in excess of the values of the Equipment as set forth in that certain appraisal of the Debtor, a copy of which is available for free at: http://bankrupt.com/misc/EQUIPMENT_MANAGEMENT_sale_appraisal.pdf The Court has set a hearing for March 16, 2011, at 3:00 p.m., on the Debtor's request to be allowed to sell the Equipment. Las Vegas, Nevada-based Equipment Management Technology provides high technology electronic test and management equipment for rent, lease and purchase. It filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 11-11816) on Feb. 9, 2011. Samuel A. Schwartz, Esq., at The Schwartz Law Firm, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. ESSAR STEEL: S&P Keeps 'B-' Long-Term Corporate Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said it kept its ratings on Essar Steel Algoma Inc., including its 'B-' long-term corporate credit rating, on CreditWatch where they had been placed with negative implications Nov. 24, 2010. "The ratings remain on CreditWatch because of what S&P views as the company's weak liquidity brought on by weaker profitability and higher raw material costs, as well as a US$129 million payment in early January to its iron ore supplier, Cliffs Natural Resources Inc.," said Standard & Poor's credit analyst Donald Marleau. With C$16 million in cash and C$46.7 million available on a revolving credit facility (after accounting for the US$35 million excess availability requirement) at Jan. 31, 2010, ESA's liquidity has deteriorated below S&P's key C$100 million threshold for ratings pressure. That said, S&P believes that pressure on ESA's liquidity should be alleviated in the next several months, as S&P expects that profitability and cash flow will improve along with stronger steel prices, and as the company draws down on seasonally high inventories. S&P will resolve this CreditWatch, and reassess ESA's liquidity, in the next several months. S&P could affirm the ratings if ESA's liquidity improves above S&P's key C$100 million threshold, which S&P believes will happen in the next several months as higher steel prices and lower working-capital investment improve profitability and cash flow. Nevertheless, S&P expects that higher contractual prices for iron ore will partially offset the positive effect of higher steel prices on the company's profitability. Assuming that ESA's liquidity improves, S&P will be primarily focused on fundamental market conditions and the impact higher raw material costs will have on profitability and cash flow generation in fiscal 2012. F & S: Case Summary & 3 Largest Unsecured Creditors --------------------------------------------------- Debtor: F & S Enterprises, LLC 11 Old Kings Road North Palm Coast, FL 32137 Bankruptcy Case No.: 11-01005 Chapter 11 Petition Date: February 17, 2011 Court: U.S. Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Scott W. Spradley, Esq. LAW OFFICES OF SCOTT W. SPRADLEY PA P.O. Box 1 109 South 5th Street Flagler Beach, FL 32136 Tel: (386) 693-4935 Fax: (386) 693-4937 E-mail: scott.spradley@flaglerbeachlaw.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/flmb11-01005.pdf The petition was signed by Stephen L. Blaha, MGRM. FENTURA FINANCIAL: Dismisses Crowe Horwath as Accountants --------------------------------------------------------- On Feb. 4, 2011, Fentura Financial, Inc., dismissed its independent registered public accounting firm, Crowe Horwath LLP to be effective upon Fentura filing its 2010 Form 10-K. Crowe Horwath's report on Fentura's consolidated financial statements as of and for the years ended December 31, 2009 and 2008 contained no adverse opinion or a disclaimer of opinion, and were not qualified as to uncertainty, audit scope or accounting principles, except that Crowe Horwath's opinion on the 2009 consolidated financial statements included an explanatory paragraph describing substantial doubt about Fentura's ability to continue as a going concern. The decision to change accountants was approved by the Audit Committee of the Board of Directors. During each of the years in the two year period ended Dec. 31, 2010, and the subsequent interim period to Feb. 7, 2011, there were (i) no disagreements between Fentura and Crowe Horwath on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Crowe Horwath, would have caused Crowe Horwath to make reference to the subject matter of the disagreements in connection with its reports. Fentura has provided Crowe Horwath with a copy of this disclosure and has requested that Crowe Horwath furnish it with a letter addressed to the Securities and Exchange Commission stating whether or not Crowe Horwath agrees with the above statements. On Feb. 4, 2011, Fentura notified Rehmann Robson, P.C. of the its intent to formally engage Rehmann as its new independent registered public accounting firm to be effective upon Fentura filing its 2010 Form 10-K. During the last two fiscal years and the subsequent interim period to Feb. 7, 2011, Fentura did not consult with Rehmann regarding (1) the application of accounting principles to any transaction, either completed or proposed; (2) the type of audit opinion that might be rendered on Fentura's financial statements; or (3) any matter that was the subject of a disagreement. 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 Sept. 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 PHYSICIANS: Recurring Losses Prompt Going Concern Doubt ------------------------------------------------------------- First Physicians Capital Group, Inc, filed its annual report on Form 10-K for the fiscal year ended Sept. 30, 2010. Whitley Penn LLP, in Dallas, Texas, expressed substantial doubt about First Physicians Capital Group's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring losses from operations. The Company reported a net loss of $9.5 million on $39.5 million of revenue in fiscal 2010, compared to a net loss of $10.0 million on $39.1 million of revenue in fiscal 2009. The Company's balance sheet at Sept. 30, 2010, showed $25.7 million in total assets, $28.6 million in total liabilities, $191,000 in non-redeemable preferred stock, $12.2 million in redeemable preferred stock, and a stockholders' deficit of $15.3 million. A full-text copy of the Form 10-K is available for free at: http://researcharchives.com/t/s?7380 About First Physicians Beverly Hills, Calif.-based First Physicians Capital Group, Inc. (OTC BB: FPCG) -- http://www.fpcapitalgroup.com/-- is an operator of healthcare services firms in the U.S. FLEMING COS: Wayne Berry Loses Another Round in Litigation ---------------------------------------------------------- WestLaw reports that a bankruptcy court could exercise postconfirmation jurisdiction over a proceeding under the All Writs Act by a trust established under the debtor's confirmed Chapter 11 plan, seeking to enjoin a software licensor that had repeatedly filed infringement claims in various courts against the debtor, the trust, and a purchaser of the debtor's assets from filing any further such suits without the bankruptcy court's permission. The proceeding was a cause of action which, to the extent that it sought to enjoin claims against the purchaser of the debtor's assets, sought to enforce a prior determination of the bankruptcy court that licensed software was not among assets that were sold to the purchaser. In re Fleming Companies, Inc., - -- B.R. ----, 2011 WL 494645, slip op. http://is.gd/mUVnz4(Bankr. D. Del.) (Walrath, J.). The Honorable Mary F. Walrath entered her Memorandum Opinion on Feb. 2, 2011, in Post-Confirmation Trust v. Wayne Berry, et al., Adv. Pro. No. 10-53159 (Bankr. D. Del.). Issue Nos. 37 through 39 and 41 through 43 of Fleming Bankruptcy News, published by Bankruptcy Creditors' Service, Inc., followed Mr. Berry's unsuccessful attempts to litigate his software-related claims and recover $48 million in Fleming's chapter 11 proceedings from his filing of a motion for relief from the automatic stay through an appeal from the bankruptcy court's order confirming Fleming's chapter 11 plan. Headquartered in Lewisville, Texas, Fleming Companies, Inc. -- http://www.fleming.com/-- was the largest multi-tier distributor of consumer package goods in the United States. The Company filed for chapter 11 protection on April 1, 2003 (Bankr. Del. Case No. 03-10945). Judge Walrath confirmed Fleming's Third Amended Plan on July 26, 2004, under which Core-Mark Holding Company, Inc., emerged as a rehabilitated company owned by Fleming's unsecured creditors on Aug. 23, 2004. A Post-Confirmation Trust was created to liquidate Fleming's remaining assets and liabilities not related to the convenience operations, to pursue causes of action, and to reconcile and pay claims. Richard L. Wynne, Esq., Bennett L. Spiegel, Esq., Shirley Cho, Esq., and Marjon Ghasemi, Esq., at Kirkland & Ellis, represented the Debtors. When the Debtors filed for protection from their creditors, they listed $4,220,500,000 in assets and $3,547,900,000 in liabilities. FOX HILL: Files Schedules of Assets and Liabilities --------------------------------------------------- Fox Hill Mutual Homes, Inc., filed with the U.S. Bankruptcy Court for the Eastern District of Virginia its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $8,600,000 B. Personal Property $948,497 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $4,530,000 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $418,765 ----------- ----------- TOTAL $9,548,497 $4,948,765 Hampton, Virginia-based Fox Hill Mutual Homes, Inc., filed for Chapter 11 bankruptcy protection on January 6, 2011 (Bankr. E.D. Va. Case No. 11-50038). Karen M. Crowley, Esq., at Crowley, Liberatore, & Ryan, P.C., serves as the Debtor's bankruptcy counsel. FRANK PARSONS: Wants Key Incentive Plan OK'd on Select Employees ---------------------------------------------------------------- Frank Parsons, Inc., asks the U.S. Bankruptcy Court for the District of Maryland to approve its Key Employee Incentive Plan. The Debtor has determined that it is necessary that certain key employees be provided with adequate incentives to commit their efforts entirely towards the successful reorganization. Together with its financial advisor, WeinsweigAdvisors, and investment banker, SSG Capital, the Debtor has formulated a KEIP to encourage key employees not only to stay with the Debtor, notwithstanding its status as a debtor in Chapter 11, but also to devote their best efforts to the reorganization process. The proposed KEIP will permit the Debtor to set various incentive levels for its key employees based upon their performance. This is anticipated to ensure that those select employees covered by the KEIP continue to work for the Debtor through the course of this Chapter 11 case, and that they will strive to attain their respective benchmarks. The Debtor relates that most senior officers, it chief executive officer, chief financial officer and president, are not included in the proposed KEIP. Rather, the KEIP covers three groups of key employees: (a) sales team managers; (b) sales representatives; and (c) key operational staff. The KEIP payments will be paid from either (a) proceeds from the sale of substantially all of the Debtor's assets as a going concern to a buyer; or (b) in the event there is no such sale, from the reorganized Debtor pursuant to a confirmed and effective plan of reorganization. The Debtor is represented by: Irving E. Walker, Esq. Gary H. Leibowitz, Esq. COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A. 300 East Lombard Street, Suite 2000 Baltimore, MD 21202 Tel: (410) 230-0660 Fax: (410) 230-0667 E-mail: iwalker@coleschotz.com gleibowitz@coleschotz.com Sanjay Bhatnagar COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A. 500 Delaware Avenue, Suite 1410 Wilmington, DE 19801 Tel: (302) 652-3131 Fax: (302) 652-3117 E-mail: sbhatnagar@coleschotz.com About Frank Parsons Headquartered in Hanover, Maryland, Frank Parsons, Inc. -- http://www.frankparsons.com/-- aka Frank Parsons Paper Company Inc., is the largest employee-owned, business products, technology, and office supplies company in the United States, offering more than 180,000 products from companies such as Avery, Fujifilm, Hewlett Packard, IBM, Sony, Xerox, Xiotech, and more. Frank Parsons is an approved contractor on the GSA Schedule and an authorized AbilityOne Distributor. The company holds several environmental certifications, including FSC, SFI, and PEFC. Frank Parsons filed for Chapter 11 bankruptcy protection on January 6, 2011 (Bankr. D. Md. Case No. 11-10338). The Debtor estimated its assets and debts at $10 million to $50 million. On Jan. 18, 2011, the Office of the U.S. Trustee appointed an Official Committee of Unsecured Creditors in this Chapter 11 case. FREESCALE SEMICONDUCTOR: Debt Trades at 100.04 Cents-on-the-Dollar ------------------------------------------------------------------ Participations in a syndicated loan under which Freescale Semiconductor, Inc., is a borrower traded in the secondary market at 100.04 cents-on-the-dollar during the week ended Friday, February 18, 2011, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.27 percentage points from the previous week, The Journal relates. The Company pays 425 basis points above LIBOR to borrow under the facility. The bank loan matures on December 1, 2016, and carries Moody's B2 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Freescale Semiconductor Freescale Semiconductor, Inc. -- http://www.freescale.com/-- once Motorola's Semiconductor Products Sector, is one of the oldest and most diverse makers of microchips in the world. It produces many different kinds of chips for use in automobiles, computers, industrial equipment, wireless communications and networking equipment, and other applications. The company's global client roster includes such blue-chip companies as Alcatel-Lucent, Bosch, Cisco Systems, Fujitsu, Hewlett-Packard, QUALCOMM, and Siemens, as well as former parent Motorola. Freescale nets about half of its sales from the Asia/Pacific region. The Blackstone Group, The Carlyle Group, Permira Advisers, and TPG Capital own the company. Freescale Semiconductor Holdings I, Ltd. carries a 'CCC' issuer default rating from Fitch Ratings. Freescale carries a B-/Stable/-- corporate credit rating from Standard & Poor's. "The rating on Freescale," said Standard & Poor's credit analyst Lucy Patricola, "reflects S&P's expectation that the company will continue on its current path to generate over $800 million of EBITDA for 2010. S&P expects leverage to remain high but free cash flow to be slightly positive, preserving existing cash balances of $1 billion." In February 2011, Standard & Poor's placed all its ratings, including the 'B-' corporate credit rating, on Freescale Semiconductor, Inc., on CreditWatch with positive implications. "With the S-1 filing by Freescale Semiconductor Holdings Limited I, Freescale could experience rapid delevering from initial public offering proceeds, in addition to its expanding base of EBITDA generation," said Standard & Poor's credit analyst Lucy Patricola. GALP GRAYRIDGE: Gets Final Court Okay to Use Cash Collateral ------------------------------------------------------------ GALP Grayridge Limited Partnership sought and obtained final authorization from the Hon. Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas to use cash collateral from Jan. 1, 2011, until March 31, 2011. Debtor's assets are the subject of a first lien held by noteholder Wells Fargo Bank, N.A., successor by merger to Wachovia Bank, National Association, and special purpose corporation Redus TX Properties, LLC, or their successors and assigns. The Debtor doesn't dispute that Wells Fargo holds valid, enforceable, and allowable claims against the Debtor, in an aggregate amount equal to $12,702,280 in unpaid principal and $40,964 in accrued but unpaid interest, plus expenses of $41,000, plus any and all fees, and any and all other obligations and liabilities of the Debtor to the Noteholder under the loan documents. Matthew Hoffman, Esq., of the Law Offices of Matthew Hoffman, p.c., explained that the Debtor needs access to Wells Fargo's cash collateral to fund its Chapter 11 case, pay suppliers and other parties. The Debtor will use the collateral pursuant to a budget, a copy of which is available for free at http://bankrupt.com/misc/GALPGrayridge_budget.pdf The Debtor will segregate and account to the Noteholder for cash collateral which it possesses, which it has received or used between the Petition Date and the entry of the cash collateral order. Any and all cash collateral received on a post-petition basis by the Court will be collected, received, and maintained by the Debtor in the CMA collection account. Funds in that account will be deposited by the Debtor into a designated debtor-in- possession deposit account. The Noteholder will be authorized to make advances from the CMA Collection Account to the subaccounts/escrows for real estate taxes ($36,379) and insurance escrow ($20,174), which amounts will be held by the Noteholder in reserve accounts pending further order of the Court. The Debtor will provide the Noteholder with monthly operating reports. As additional adequate protection, the Debtor will pay the Noteholder an adequate protection payment for the period ending Dec. 31, 2010, in the amount of $47,015, to be paid on Jan. 31, 2011, an adequate protection payment for the period ending January 31, 2011, in the amount of $55,834, to be paid on Feb. 10, 2011, and an adequate protection payment for the period ending Feb. 28, 2011, in the amount of $59,604, to be paid on March 10, 2011, with the Noteholder authorized to draft each payment from the CMA Collection Account. The Debtor will be authorized to have funds on deposit in the CMA Collection Account and the real estate taxes escrow or other escrow accounts, paid by the Noteholder to taxing authorities for the benefit of the Debtor, all, or portions of, 2010 ad valorem taxes due on the Debtor's property, provided that the Noteholder isn't obligated to advance any funds of Noteholder in order to pay the taxes. As adequate protection of the Noteholder's interest in the prepetition collateral, the Noteholder is granted valid and automatically perfected priority replacements and additional liens and security interests in and upon all of the properties and assets of the Debtor. In addition, the Noteholder is granted a superpriority administrative expense claim. About GALP Grayridge Houston, Texas-based GALP Grayridge Limited Partnership is a single asset real estate business entity. It owns these single asset real estate in Texas: C GALP Grayridge Limited Partnership - Chapter 11 (10-40007); C Vinings at West Oaks Apartments (512 units); C 15250 Grey Ridge Drive, Houston, TX 77082; and C NW quadrant of Harris County Toll Road and Hwy 6. GALP Grayridge filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 10-40007) on Nov. 1, 2010. Matthew Hoffman, Esq., at the Law Offices of Matthew Hoffman, P.C., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. GENCORP INC: Salaries and Bonuses of Executives Approved -------------------------------------------------------- On Feb. 9, 2011, the Organization & Compensation Committee of GenCorp Inc. approved: (i) cash incentive awards to its named executive officers and other key employees for fiscal 2010; (ii) base salaries and incentive targets for its named executive officers; (iii) fiscal 2011 annual cash incentive plan metrics; (iv) metrics for the 2011 Long-Term Incentive Program for eligible employees of the Company including the named executive officers; and (v) extension of relocation benefits to Scott J. Seymour, GenCorp, Inc.'s CEO, to twenty-four months from his employment start date. The table summarizes the Compensation Committee Feb. 9, 2011 actions for the Company's named executives. Named Exec. 2010 Incentive 2011 Annual 2011 Officer Award Base Salary Incentive Target ------------- -------------- ----------- ---------------- Scott J. Seymour $845,625 $550,000 125% Kathleen E. Redd $206,640 $351,120 50% Chris W. Conley $136,064 $232,210 45% Robert E. Shenton $156,587 $263,118 45% The annual cash incentive program is intended to provide a competitive level of compensation when specific individual or business performance objectives are achieved. The 2010 incentive awards were based on an assessment of actual performance against pre-established Company and business segment performance objectives specified in the Company's 2010 annual cash incentive plan. The performance objectives as outlined in the 2010 annual cash incentive plan included contract profit, cash flow, adjusted earnings before interest and taxes, awards and personal factors, each of which were weighted differently. The performance objectives for the 2011 incentive targets are contract profit, cash flow, awards, non-financial metrics, and personal factors, as defined therein, each of which is weighted differently. The Compensation Committee has discretion to adjust these payments. With input from the Company, incentives are paid based upon the Compensation Committee's assessment of both individual and Company-wide actual performance against these established performance objectives. The potential payouts range from 0% to 185% of an individual's target incentive. Target incentives represent a percentage of an eligible participant's base salary. The Company uses long-term incentive compensation to focus on the importance of returns to shareholders, promote the achievement of long-term performance goals, encourage executive retention, and promote higher levels of Company stock ownership by executives. The 2011 LTIP approved metrics based on fiscal 2013 targets are: (i) sales; (ii) earnings before interest, taxes, depreciation, amortization, and retirement benefit expenses; (iii) capital turnover ratio; and (iv) the economic value added performance target. About GenCorp Inc. Rancho Cordova, Calif.-based GenCorp Inc. (NYSE: GY) -- http://www.GenCorp.com/-- is a manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the re-zoning, entitlement, sale, and leasing of the Company's excess real estate assets. The Company's balance sheet at Nov. 30, 2010, showed $991.50 million in total assets, $1.19 billion in total liabilities and $200.20 million in total shareholders' deficit. * * * Standard & Poor's in February 2011 has raised its corporate credit rating on GenCorp Inc. to 'B' from 'B-'. S&P also raised its rating on the company's first-lien secured debt to 'BB-' from 'B+' and on the subordinated debt to 'CCC+' from 'CCC'. The recovery rating on the first-lien secured debt remains unchanged at '1', and the recovery rating on the subordinated debt remains unchanged at '6'. The outlook is stable. "We are raising its ratings on GenCorp by one notch to reflect the company's improved liquidity position," said Standard & Poor's credit analyst Lisa Jenkins. "The ratings on GenCorp reflect its highly leveraged capital structure, weak financial performance, limited diversity, and modest scale of operations compared with competitors. Offsetting these challenges to some extent is the company's good niche positions in aerospace propulsion and solid backlog. S&P characterize GenCorp Inc.'s business profile as weak and its financial profile as highly leveraged." GEO W PARK: Plan of Reorganization Wins Court Approval ------------------------------------------------------ The U.S. Bankruptcy Court for the District of South Carolina confirmed the Plan of Reorganization filed by L. Stan Neely, the Chapter 11 trustee for Geo W. Park Seed Co. Inc., and its debtor- affiliates. As reported in the Troubled Company Reporter on Jan. 5, 2011, the Plan provides for the distribution of the remaining cash assets of the estate -- after payment to Wells Fargo and the Hachenbergers pursuant to a settlement -- to the general unsecured creditors, after payment in full of all administrative claims, payment in full of taxes owed to the County of Greenwood, and payment in full of priority unsecured claims. Wells Fargo and the Hachenbergers collectively have a first lien over all the assets that were sold to J&P Park Acquisitions Inc. Under the settlement, Wells Fargo and the Hachenbergers have agreed to receive payment of $6,773,275 in full satisfaction of their liens and other claims against the estate. Because the sale proceeds were not enough to pay the first liens in full, the liens of junior lienholders are unsecured, and the claims of the junior lienholders will be treated as general unsecured claims in the Plan. On August 23, 2010, the auction and sale hearing were conducted and competitive bidding ensued. The Court eventually approved the improved stalking horse bid by J&P Park as the highest and best offer for the assets, with a total gross consideration of approximately $12,800,000, including a cash payment of $8,264,095. Wells Fargo and the Hachenbergers have agreed, pursuant to the Settlement, to a carve-out of $2,500,000. The carve-out will be used to pay administrative claims, taxes to the County of Greenwood, and unsecured priority claims, with any remainder distributed to the general unsecured creditors. In addition, the plan will pay holders of general unsecured, owing $47,000,000 in aggregate, will be paid on a pro rata basis from estate funds remaining after all valid claims are paid. A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?71c5 About George W. Park Based in Greenwood, South Carolina, George W. Park Seed Co. Inc., along with four affiliates, filed for Chapter 11 protection on April 2, 2010 (Bankr. D. S.C. Lead Case No. 10-02431). R. Geoffrey Levy, Esq., represents the Company in its restructuring effort. In its schedules, the Company disclosed $8.33 million in assets and $44.79 million in liabilities. Jackson & Perkins-founded in 1872 and famous for its roses- became part of the Park Seed group in 2007. GERALD TROOIEN: FBI Searches Evidence of Fraud at JLT Group ----------------------------------------------------------- Rupa Shenoy at Minnesota Public Radio reports the Federal Bureau of Investigation is investigating St. Paul developer Jerry Trooien for fraud. According to the report, agents executed a search warrant at Mr. Trooien's office near downtown St. Paul on Thursday, looking for evidence of fraud. FBI agent Steve Warfield, a spokesman for the agency's Minneapolis office, said the FBI was working with the Internal Revenue Service as agents began searching the offices of Trooien's company, JLT Group. Minnesota Public Radio notes Mr. Trooien is best known for a project he never got done -- the $1.5 billion Bridges of St. Paul development -- which he hoped to build across the river from downtown St. Paul. Based in St. Paul, Minnesota, Gerald Trooien aka Jerry Trooien filed for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case No. 10-37695) on Oct. 25, 2010. Judge Nancy C. Dreher presides over the case. Douglas W. Kassebaum, Esq., and James L. Baillie, Esq., at Fredrikson & Byron, P.A., represents the Debtor. The Debtor estimated assets between $1 million and $10 million, and debts between $100 million and $500 million. GIORDANO'S ENTERPRISES: Updated Case Summary & Creditors List ------------------------------------------------------------- Lead Debtor: Giordano's Enterprises, Inc. 740 North Rush Street, Suite 400 Chicago, IL 60611 Bankruptcy Case No.: 11-06098 Chapter 11 Petition Date: February 16, 2011 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff About the Debtors: Giordano's was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". At present, Giordano's operates six company owned stores in Chicagoland, four joint venture stores, and thirty-five franchisee locations. In addition, Giordano's operates Americana Foods, Inc., located in Mount Prospect, Illinois, that serves as the commissary for the majority of food products purchased by the Illinois locations. An affiliated real estate holding company, Randolph Partners, LP, owns 12 restaurant buildings that are leased to four of the company-owned locations, two of the joint venture locations and six of the franchisee locations. The other 33 locations are leased from third party landlords; two for the Giordano's locations, two for the joint venture locations and 29 for the franchise locations. Giordano's is the lessee and subleases the restaurant facility for 22 of the 29 franchise third party leases. JBA Equipment Finance, Inc, another affiliated entity, leases restaurant equipment packages to eight franchisee locations. Debtors' Counsel: Kevin H Morse, Esq. Michael L. Gesas, Esq. ARNSTEIN & LEHR, LLP 120 South Riverside Plaza, Suite 1200 Chicago, IL 60606-3910 Tel: (312) 876-7122 (312) 876-7125 Fax: (312) 876-6260 E-mail: khmorse@arnstein.com mlgesas@arnstein.com Total Assets: Not Stated* Total Debts: Not Stated* * Giordano Enterprises estimated assets and debts of $0 to $50,000 in its Chapter 11 petition. Affiliates that filed Chapter 11 petitions on Feb. 16, 2011: Debtor Case No. ------ -------- ILLINOIS MANAGEMENT COMPANY, INC. 11-06118 GIORDANOS FRANCHISE, INC. 11-06126 JBA EQUIPMENT FINANCE, INC. 11-06138 GIORDANOS OF FLORIDA, INC. 11-06139 GIORDANOS RESTAURANTS, INC. 11-06140 GIORDANOS FAMOUS STUFFED PIZZA, INC. 11-06143 AMERICANA FOODS, INC. 11-06144 PIZZA PIZAZZE, INC. 11-06145 GIORDANOS, LLC 11-06146 RANDOLPH PARTNERS, LLC 11-06147 RANDOLPH PARTNERS, LLC - LAKE STREET SERIES 11-06149 RANDOLPH PARTNERS, LLC - FORMOSA SERIES 11-06150 RANDOLPH PARTNERS, LLC - MINOOKA SERIES 11-06151 RANDOLPH PARTNERS, LP 11-06152 RANDOLPH PARTNERS, LLC - 740 SERIES 11-06153 RANDOLPH PARTNERS, LLC - OGDEN OSWEGO SERIES 11-06155 RANDOLPH PARTNERS, LLC - 1425 SERIES 11-06156 RANDOLPH PARTNERS, LLC - MOUNT PROSPECT SERIES 11-06157 BELMONT PIZZA, INC. 11-06158 RUSH PIZZA, INC. 11-06159 GREEKTOWN PIZZA, INC. 11-06160 ROSEMONT PIZZA, INC. 11-06161 WILLOWBROOK PIZZA, INC. 11-06162 RANDOLPH PARTNERS, LLC - OAKBROOK PARTNERS SERIES 11-06163 RANDOLPH PARTNERS, LLC - COTTON LANE SERIES 11-06164 RANDOLPH PARTNERS, LLC - RANDALL ORCHARD SERIES 11-06165 Affiliates that filed Chapter 11 petitions on Feb. 17, 2011: Debtor Case No. ------ -------- ALTAMONTE PARTNERS, LLC 11-06261 OAKBROOK PARTNERS, LLC 11-06262 RANDOLPH PARTNERS, LLC 20-24 SERIES 11-06263 RANDOLPH PARTNERS, LLC - 327 SERIES 11-06265 RANDOLPH PARTNERS, LLC - 308 SERIES 11-06267 RANDOLPH PARTNERS, LLC - SHERBERTH SERIES 11-06271 The petitions were signed by John Apostolou, president. Debtors' List of 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Saputo Cheese USA, Inc. -- $426,678 2515 Collection Center Drive Chicago, IL 60693 Greco & Sons, Inc. -- $213,694 1550 Hecht Road Bartlett, IL 60103 Giordano's Adverstising Fund -- $150,777 740 Rush Street, Suite 4100 Chicago, IL 60611 Heinz North America -- $131,801 Tardella Foods, Inc. -- $29,963 Columbus Foods Company -- $22,091 Glenn P. Doeing -- $19,268 Chicago International Trucks -- $16,373 Fintech.net -- $13,919 Black Jacks -- $13,476 Panapesca USA Corporation -- $12,600 Foodtec Solutions, Inc. -- $9,562 Periship -- $8,271 SVA Consulting, Inc. -- $8,009 Coca Cola Bottling Company -- $7,026 Ecolab -- $6,911 Best Bargains, Inc. -- $6,556 O.K. Foods, Inc. -- $6,000 Garden-Fresh Foods, Inc. -- $5,803 American Express -- $5,442 Orestis Construction Co. -- $5,300 Olympic Store Fixtures, Inc. -- $4,864 Turano Baking Company -- $4,637 Michigan Turkey Producers -- $4,086 Supreme Lobster & Seafood Co. -- $4,048 Stratos Foods, Inc. -- $3,845 Patti Blair Court Reporters -- $3,751 Runge Paper Company, Inc. -- $3,517 Mundo Development Co. -- $3,045 Dualtemp of Illinois, Inc. -- $2,998 GREAT ATLANTIC & PACIFIC: Gets Until July 10 to Decide on Leases ---------------------------------------------------------------- Judge Robert Drain gave The Great Atlantic & Pacific Tea Company Inc. and its debtor-affiliates until July 10, 2011, or the date of the entry of an order confirming their Chapter 11 plan, to decide whether to assume or reject their unexpired nonresidential real property leases. In an order dated February 8, 2011, Judge Drain directed the Debtors, Ocean City Factory Outlets and N. Providence LLC to consult the Court to schedule an evidentiary hearing on the extension of the deadline for the assumption or rejection of their leases. The Debtors' rights under Section 365(d)(4) of the Bankruptcy Code including their ability to either assume or reject their leases with Ocean City and with N. Providence will remain in effect until further court ruling in connection with those leases, according to the February 8 order. About A&P Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific (A&P) is a leading supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid- Atlantic and Northeastern United States. It operates 395 supermarkets, combination food and drug stores, beer, wine, and liquor stores, and limited assortment food stores in Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Pennsylvania, Virginia, and the District of Columbia. "Banners" include A&P (101 stores), Food Basics (12 stores), Pathmark (128 stores), Super Fresh (57 stores), The Food Emporium (16 stores), and Waldbaum's (59 stores). A&P employs roughly 41,000 employees, including roughly 28,000 part-time employees. Roughly 95% of the workforce are covered by collective bargaining agreements. The Great Atlantic & Pacific Tea Company, Inc., and its affiliates filed petitions under Chapter 11 of the U.S. Bankruptcy Code on December 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White Plains. As of September 11, 2010, the Debtors reported total assets of $2.5 billion and liabilities of $3.2 billion. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by A&P and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). GREAT ATLANTIC & PACIFIC: Proposes Claims Settlement Procedures --------------------------------------------------------------- The Great Atlantic & Pacific Tea Company Inc. and its affiliated debtors seek court approval to implement a process for the settlement of claims and causes of action brought by or against them. The proposed process applies to "de minimis" claims already pending or that could be asserted by third parties that are not insiders against the Debtors or by the Debtors against those parties that are settled for less than $2.25 million, according to Ray Schrock, Esq., at Kirkland & Ellis LLP, in New York. Under the proposed process, the Debtors will not agree to any settlement of a claim unless it is reasonable in their judgment upon consideration of the probability of success if the claim is litigated or arbitrated, and the fairness of the settlement, among other things. Where the proposed settlement amount is equal to or less than $75,000, the Debtors may agree to settle that claim or cause of action and may enter into a written settlement agreement without notice by the Debtors to any third party or further action by the Court. Where the proposed settlement amount is greater than $75,000 but does not exceed $2.25 million, the Debtors may agree to settle that claim or cause of action without further action by the Court provided that they serve a notice of the settlement and the terms are not objected to by any party that receives the notice. If there is an objection to the settlement and the Debtors still want to enter into the proposed settlement, the execution of the settlement will not proceed except upon resolution of the objection or upon court approval of the settlement after notice and a hearing. The types of claims that may be settled pursuant to the proposed procedures include administrative expense claims, priority claims, secured claims, general unsecured claims and equitable claims for non-monetary relief. No settlement will be effective unless it is executed by an authorized representative of the Debtors. Any settlement that is not authorized pursuant to the proposed process or pursuant to any other court order will be authorized only upon a separate order of the Court. The Court will hold a hearing on March 8, 2011, to consider approval of the proposed settlement procedures. The deadline for filing objections is March 1, 2011. About A&P Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific (A&P) is a leading supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid- Atlantic and Northeastern United States. It operates 395 supermarkets, combination food and drug stores, beer, wine, and liquor stores, and limited assortment food stores in Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Pennsylvania, Virginia, and the District of Columbia. "Banners" include A&P (101 stores), Food Basics (12 stores), Pathmark (128 stores), Super Fresh (57 stores), The Food Emporium (16 stores), and Waldbaum's (59 stores). A&P employs roughly 41,000 employees, including roughly 28,000 part-time employees. Roughly 95% of the workforce are covered by collective bargaining agreements. The Great Atlantic & Pacific Tea Company, Inc., and its affiliates filed petitions under Chapter 11 of the U.S. Bankruptcy Code on December 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White Plains. As of September 11, 2010, the Debtors reported total assets of $2.5 billion and liabilities of $3.2 billion. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by A&P and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). GREAT ATLANTIC & PACIFIC: Schedules Now Due March 25 ---------------------------------------------------- The Great Atlantic & Pacific Tea Company Inc. and its debtor- affiliates and the U.S. Trustee for the Southern District of New York entered into a stipulation extending to: (1) March 4, 2011, the deadline for the Debtors to file their statements of financial affairs; and (2) March 25, 2011, the deadline for filing their schedules of assets and liabilities. About A&P Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific (A&P) is a leading supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid- Atlantic and Northeastern United States. It operates 395 supermarkets, combination food and drug stores, beer, wine, and liquor stores, and limited assortment food stores in Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Pennsylvania, Virginia, and the District of Columbia. "Banners" include A&P (101 stores), Food Basics (12 stores), Pathmark (128 stores), Super Fresh (57 stores), The Food Emporium (16 stores), and Waldbaum's (59 stores). A&P employs roughly 41,000 employees, including roughly 28,000 part-time employees. Roughly 95% of the workforce are covered by collective bargaining agreements. The Great Atlantic & Pacific Tea Company, Inc., and its affiliates filed petitions under Chapter 11 of the U.S. Bankruptcy Code on December 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White Plains. As of September 11, 2010, the Debtors reported total assets of $2.5 billion and liabilities of $3.2 billion. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by A&P and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). GREAT ATLANTIC & PACIFIC: Wants to Dispose of De Minimis Assets --------------------------------------------------------------- The Great Atlantic & Pacific Tea Company Inc. and its affiliated debtors seek the Court's approval to implement procedures for the sale, transfer or abandonment of so-called "de minimis assets." The de minimis assets include surplus assets and those assets which the Debtors consider obsolete, non-core or burdensome. Ray Schrock, Esq., at Kirkland & Ellis LLP, in New York, says the proposed procedures would help the Debtors reduce costs as well as ensure that concerned parties receive appropriate notice of the disposition of the assets. Under the proposed asset sale procedures, the Debtors can sell or transfer their de minimis assets worth less than or equal to $500,000 to a single buyer or a group without further court order or notice. The transaction will be free and clear of liens with those liens attaching only to the sale proceeds with the same validity, extent and priority as immediately prior to the transaction. With regard to the sales or transfers of de minimis assets worth more than $500,000 and less than or equal to $5 million, the Debtors will be required to serve a notice at least five days prior to closing those sales or effectuating those transfers. The notice should identify the de minimis assets, the buyer, the purchase price and the significant terms of the transaction. The Debtors can immediately consummate those transactions if no objections are filed within five days of service of the notice. However, if there is an objection and it cannot be resolved, the de minimis assets will only be sold upon withdrawal of the objection or further court order. The transactions will also be free and clear of liens with those liens attaching only to the sale proceeds with the same validity, extent and priority as immediately prior to the transactions. Meanwhile, the proposed process for the abandonment of de minimis assets authorizes the Debtors to abandon assets worth less than or equal to $500,000. With regard to the abandonment of de minimis assets worth more than $500,000 but less than or equal to $5 million, the Debtors will also be required to serve a notice identifying the assets and stating their reasons for the abandonment at least five days prior to abandoning the assets. If an objection is filed and it cannot be resolved, the assets will only be abandoned upon withdrawal of the objection or further Court order. The Court will hold a hearing on March 8, 2011, to consider approval of the proposed procedures. The deadline for filing objections is March 1, 2011. About A&P Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific (A&P) is a leading supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid- Atlantic and Northeastern United States. It operates 395 supermarkets, combination food and drug stores, beer, wine, and liquor stores, and limited assortment food stores in Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Pennsylvania, Virginia, and the District of Columbia. "Banners" include A&P (101 stores), Food Basics (12 stores), Pathmark (128 stores), Super Fresh (57 stores), The Food Emporium (16 stores), and Waldbaum's (59 stores). A&P employs roughly 41,000 employees, including roughly 28,000 part-time employees. Roughly 95% of the workforce are covered by collective bargaining agreements. The Great Atlantic & Pacific Tea Company, Inc., and its affiliates filed petitions under Chapter 11 of the U.S. Bankruptcy Code on December 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White Plains. As of September 11, 2010, the Debtors reported total assets of $2.5 billion and liabilities of $3.2 billion. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by A&P and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). GREEN EARTH: Posts $2.6 Million Net Loss in December 31 Quarter --------------------------------------------------------------- Green Earth Technologies, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $2.6 million on $678,000 of sales for the three months ended Dec. 31, 2010, compared with a net loss of $3.4 million on $440,000 of sales for the three months ended Dec. 31, 2009. The Company's balance sheet as of Dec. 31, 2010, showed $3.9 million in total assets, $4.5 million in total liabilities, all current, and a stockholders' deficit of $575,000. As reported in the Troubled Company Reporter on October 4, 2010, Friedman LLP, in East Hanover, N.J., expressed substantial doubt about Green Earth Technologies' ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2010. The independent auditors noted that of the Company's losses, negative cash flows from operations and its limited ability to pay its outstanding liabilities through 2011. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7393 About Green Earth Technologies White Plains, N.Y.-based Green Earth Technologies, Inc. (OTC QB: GETG) -- http://www.getg.com/-- markets, sells and distributes an array of branded, environmentally-friendly, bio-based performance and cleaning products to the automotive, outdoor power equipment and marine markets. GROVE STREET: Court to Consider Plan Outline on February 28 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey has rescheduled until Feb. 28, 2011, at 2:00 p.m., the hearing to consider adequacy of the Disclosure Statement explaining Grove Street Realty Urban Renewal, LLC's Chapter 11 Plan. The hearing was originally set for Jan. 25. The Debtor will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. As reported in the Troubled Company Reporter on Dec. 3, 2010, according to the Disclosure Statement, the Plan provides for GE Business Financial's secured claim to be paid with a negative stock pledge on the Debtor's commercial and undeveloped land. The Debtor will also make interest-only payments to GE Business for 12 months after the effective date. TD Bank will receive payments outside of the Reorganization Plan on account of its secured claim. Holders of unsecured claims will receive payment of 10% of all allowed claims over five years at 0.5% per calendar quarter. Interest holders will retain their interests, equity or common stock. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/GROVESTREET_DS.pdf The Debtors are represented by: Albert A. Ciardi, III, Esq. Jennifer E. Cranston, Esq. Adrienne N. Roth, Esq. CIARDI CIARDI & ASTIN One Commerce Square 2005 Market Street, Suite 1930 Philadelphia, PA 19103 Tel: (215) 557-3350 Fax: (215) 557-3351 Emails: aciardi@ciardilaw.com jcranston@ciardilaw.com aroth@ciardilaw.com About Grove Street Sewell, New Jersey-based Grove Street Realty Urban Renewal, LLC, owns certain parcels of real property at 370 Grove Street in the Township of West Deptford, County of Gloucester, State of New Jersey, commonly known as RiverWinds Cove Apartments. The land consists of improvements generally consisting of two buildings containing in the aggregate approximately 215,832 square feet of Class A residential apartment space, comprised of approximately 200 units, and having approximately 259 parking spaces. The Company filed for Chapter 11 bankruptcy protection on July 1, 2010 (Bankr. D. N.J. Case No. 10-30427). The Company estimated assets and debts at $10 million to $50 million as of the Petition Date. An Official Committee of Unsecured Creditors appointed in the case is represented by Benesch, Friedlander, Coplan & Aronoff LLP. GROVE STREET: Has Access to Lender's Cash Collateral Until Feb. 28 ------------------------------------------------------------------ The Hon. Judith H. Wizmur of the U.S. Bankruptcy Court for the District of New Jersey authorized, in a sixth interim order, Grove Street Realty Urban Renewal LLC to access the secured creditors' cash collateral until Feb. 28, 2011. The Court will consider the Debtor's further request to access to the cash collateral on Feb. 28, at 2:00 p.m. Objections, if any are due Feb. 25, at 4:00 p.m. As reported in the Troubled Company Reporter on Aug. 26, 2010, the Debtor's indebtedness, as of the Petition Date, consist of: 1. GE Business Financial Services, Inc. - $31,390,752 secured by a subsisting first lien and security interest in certain real property located at 370 Grove Street in the Township of West Deptford, County of Gloucester, New Jersey. 2. TD Bank, N.A. - $3,000,000 secured by a subsisting first lien and security interest in certain rela propoerty located at 196 and 204 Grove Avenue, West Deptford, New Jersey. The Debtor would use the proceeds, products, rents, or profits of the property and the fees, charges, accounts or other payments for the use or occupancy of facilities to fund its operations postpetition. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant the secured creditors (i) replacement liens to the same extent and priority that the secured creditors held prepetition; and (ii) interest payments. About Grove Street Sewell, New Jersey-based Grove Street Realty Urban Renewal, LLC, owns certain parcels of real property at 370 Grove Street in the Township of West Deptford, County of Gloucester, State of New Jersey, commonly known as RiverWinds Cove Apartments. The land consists of improvements generally consisting of two buildings containing in the aggregate approximately 215,832 square feet of Class A residential apartment space, comprised of approximately 200 units, and having approximately 259 parking spaces. The Company filed for Chapter 11 bankruptcy protection on July 1, 2010 (Bankr. D. N.J. Case No. 10-30427). Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, P.C., assists the Debtor in its restructuring effort. The Company estimated assets and debts at $10 million to $50 million as of the Petition Date. An Official Committee of Unsecured Creditors appointed in the case is represented by Benesch, Friedlander, Coplan & Aronoff LLP. GSI GROUP: Releases Shares Held in Escrow ----------------------------------------- GSI Group Inc. disclosed that the United States District Court for the District of Massachusetts has entered an order granting final approval of the previously announced settlement in the putative shareholder class action entitled Wiltold Trzeciakowski, Individually and on behalf of all others similarly situated v. GSI Group Inc., Sergio Edelstein, and Robert Bowen, Case No. 08-cv- 12065 (GAO), filed on December 12, 2008. The Company's contribution to the settlement amount was limited to the balance of the Company's self-insured retention. As a result of the court's final approval of the settlement, 993,743 shares of the Company's common stock (as adjusted for the Company's 1-for-3 reverse stock split) that were placed in a reserve account and held in escrow for the benefit of the holders of Section 510(b) claims (as defined in the Company's final Chapter 11 plan of reorganization) will be released to the Company's shareholders entitled to such shares. The Company expects to distribute the shares to each shareholder entitled to such shares as soon as practicable in the same manner as such shareholder received shares of the Company following the Company's emergence from bankruptcy. GSI also announced that as a smaller reporting company, it expects to file its 2010 Annual Report on Form 10-K on or before March 31, 2011 as required by Securities and Exchange Commission rules. About GSI Group Inc. Headquartered in Bedford, Massachusetts, GSI Group Inc. -- http://www.gsig.com/-- supplies precision technology to the global medical, electronics, and industrial markets and semiconductor systems. GSI Group Inc.'s common shares are quoted on Pink Sheets OTC Markets Inc. (LASR.PK). GSI Group together with two of its subsidiaries filed for Chapter 11 protection on Nov. 20, 2009 (Bankr. D. Del. Lead Case No. 09-14110). William R. Baldiga, Esq., at Brown Rudnick LLP, represented the Debtors as lead counsel. Mark Minuti, Esq., at Saul Ewing LLP, represented the Debtors as its local counsel. On July 23, 2010, the Debtors consummated their reorganization through a series of transactions contemplated by a Chapter 11 plan. The Company's shareholders prior to the emergence from bankruptcy retained approximately 86.1% of its capital stock following emergence. * * * In November 2010, Standard & Poor's Ratings Services said that it has affirmed its ratings, including the 'B' corporate credit rating, on Assumption, Ill.-based GSI Group LLC. At the same time, S&P revised the outlook to stable from negative. S&P said the ratings on GSI reflect the company's highly leveraged financial profile, which more than offsets its weak business risk profile. GSI operates in cyclical and competitive niche agricultural equipment markets and faces raw material cost volatility. The company's leading position in its niche markets partially offsets these factors. S&P expects its operating performance to continue to recover in 2011, primarily on better conditions in its end markets. GTM ENERGY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: GTM Energy Partners, LLC 440 County Road 464 Flat Rock, AL 35966 Bankruptcy Case No.: 11-80568 Chapter 11 Petition Date: February 16, 2011 Court: United States Bankruptcy Court Northern District of Alabama (Decatur) Judge: Jack Caddell Debtor's Counsel: Robert L Shields, III, Esq. THE SHIELDS LAW FIRM 418 Lorna Square Office Compex Hoover, AL 35216 Tel: (205) 823-1990 Fax: (205) 278-8595 E-mail: rls@bhamlawfirm.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/alnb11-80568.pdf The petition was signed by Stanley L. Graves, manager. GTS 900: Astani Signs Pact to Sell Concerto Building to Corus ------------------------------------------------------------- Astani Enterprises and Corus Construction Venture LLC have reached a settlement for the Concerto building located at 9th and Figueroa. Under the terms of a Plan of Reorganization approved today by the United States Bankruptcy Court, Astani has sold Concerto to CCV. Terms of the accord include payment to the general contractor and subcontractors. CCV and Astani have agreed to cooperate with the transition of the project, with the goal of finalizing Concerto as a premier residential development. However Astani will continue its litigation against the FDIC. GTS 900 F LLC is a business that owns a residential building known as Concerto in Los Angeles, California. According to a Web site for the Concerto building, developed by Astani Living, all 77 loft residences have been sold. The Company filed for bankruptcy protection, listing up to $500 million in assets and debt (Bankr. C.D. Calif. Case No. 09-35127). GUITAR CENTER: Bank Debt Trades at 1% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Guitar Center, Inc., is a borrower traded in the secondary market at 98.53 cents- on-the-dollar during the week ended Friday, Feb. 18, 2011, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.90 percentage points from the previous week, The Journal relates. The Company pays 350 basis points above LIBOR to borrow under the facility. The bank loan matures on October 9, 2014, and carries Moody's Caa1 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Guitar Center, Inc., headquartered in Westlake Village, Calif., is the largest musical instrument retailer with 312 stores and a direct response segment, which operates its websites. It operates three distinct musical retail business - Guitar Center (about 70% of revenue), Music & Arts (about 7% of revenue), and Musician's Friend (its direct response subsidiary with 24% of revenue). Total revenue is about $2 billion. Guitar Center carries 'Caa1' corporate family and probability of default ratings from Moody's Investors Service. In December 2009, Moody's said, "The Caa1 Corporate Family Rating reflects Guitar Center's very weak credit metrics, particularly its interest coverage, as a result of its very high level of debt." HABERSHAM BANK: Closed; SCBT National Association Assumes Deposits ------------------------------------------------------------------ Habersham Bank of Clarkesville, Ga., was closed on Friday, February 18, 2011, by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with SCBT National Association of Orangeburg, S.C., to assume all of the deposits of Habersham Bank. The eight branches of Habersham Bank will reopen during their normal business hours as branches of Habersham Bank, a division of SCBT National Association. Depositors of Habersham Bank will automatically become depositors of SCBT National Association. Deposits will continue to be insured by the FDIC. Customers of Habersham Bank should continue to use their existing branch until they receive notice from SCBT National Association that it has completed systems changes to allow other SCBT National Association branches to process their accounts as well. As of December 31, 2010, Habersham Bank had around $387.6 million in total assets and $339.9 million in total deposits. In addition to assuming all of the deposits of the failed bank, SCBT National Association agreed to purchase essentially all of the assets. The FDIC and SCBT National Association entered into a loss-share transaction on $270.7 million of Habersham Bank's assets. SCBT National Association will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can call the FDIC toll-free at 1-866-806-6128. Interested parties also can visit the FDIC's Web site at: http://www.fdic.gov/bank/individual/failed/habersham.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $90.3 million. Compared to other alternatives, SCBT National Association's acquisition was the least costly resolution for the FDIC's DIF. Habersham Bank is the nineteenth FDIC-insured institution to fail in the nation this year, and the fifth in Georgia. The last FDIC-insured institution closed in the state was North Georgia Bank, Watkinsville, on Feb. 4, 2011. HAWKER BEECHCRAFT: Bank Debt Trades at 11% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 89.41 cents-on- the-dollar during the week ended Friday, Feb. 18, 2011, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.31 percentage points from the previous week, The Journal relates. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on March 26, 2014, and carries Moody's Caa1 rating and Standard & Poor's CCC+ rating. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, is a leading manufacturer of business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. The Company's balance sheet at Sept. 30, 2010, showed $3.384 billion in assets, $3.482 billion in liabilities, and a deficit of $97.3 million. The Company reported a net loss of $238.6 million on $1.802 billion of net sales for nine months ended Sept. 30, 2010, compared with a net loss of $458.6 million on $2.112 billion of net sales for nine months ended Sept. 27, 2009. Hawker Beechcraft carries 'Caa2' corporate family and probability of default ratings from Moody's Investors Service. HCA HOLDINGS: J. Milton Johnson Appointed President and CFO ----------------------------------------------------------- The board of directors of HCA Holdings, Inc., appointed R. Milton Johnson as the President and Chief Financial Officer of the Company effective Feb. 9, 2011. Mr. Johnson previously served as Executive Vice President and Chief Financial Officer of the Company since July 2004 and was appointed as a director in December 2009. The Board of Directors of the Company appointed Samuel N. Hazen as the President of Operations of the Company effective Feb. 9, 2011. Mr. Hazen previously served as President - Western Group since July 2001. About HCA Inc. Headquartered in Nashville, Tennessee, HCA is the nation's largest acute care hospital company with 162 hospitals and 104 freestanding surgery centers (including eight hospitals and eight freestanding surgery centers that are accounted for using the equity method) as of September 30, 2010. For the twelve months ended September 30, 2010, the company recognized revenue in excess of $30 billion. The Company's balance sheet at Dec. 31, 2010, showed $23.85 billion in total assets, $34.50 billion in total liabilities and $10.79 billion in total deficit. * * * In November 2010, Moody's Investors Service confirmed the existing ratings of HCA, including the 'B2' Corporate Family and Probability of Default Ratings. Moody's assigned a Caa1 (LGD6, 96%) rating to HCA, Inc.'s proposed offering of $1,525 million of senior unsecured notes due 2021 to be issued at a parent holding company. HCA's 'B2' Corporate Family Rating anticipates that the company will continue to operate with significant leverage. Pro forma for the proposed debt financed distribution Moody's estimate that adjusted leverage would have been 5.2 times at September 30, 2010. Furthermore, the company has large maturities in 2012 and 2013 that will likely need to be refinanced in the capital markets. However, the rating acknowledges the company's progress in systematically extending its maturity profile. Finally, the rating reflects HCA's solid EBITDA growth, which has benefited the credit metrics and demonstrated the company's ability to weather industry pressures. HERCULES OFFSHORE: Bank Debt Trades at 1% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which Hercules Offshore Inc. is a borrower traded in the secondary market at 99.38 cents- on-the-dollar during the week ended Friday, February 18, 2011, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.85 percentage points from the previous week, The Journal relates. The Company pays 650 basis points above LIBOR to borrow under the facility. The bank loan matures on July 11, 2013, and carries Moody's Caa1 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. The Troubled Company Reporter reported on Nov. 17, 2010, that Moody's Investors Service downgraded the Corporate Family Rating of Hercules Offshore Inc. and the Probability of Default Rating to 'Caa1' from 'B2'. Moody's also downgraded Hercules' 10.5% senior secured notes due 2017, its senior secured revolving credit facility due 2012, and its senior secured term loan B due 2013, all to Caa1 with LGD3, 45%. The outlook remains negative. "The inability of Hercules to generate meaningful free cash flow despite limited reinvestment in its aging fleet of rigs is cause for concern," commented Stuart Miller, Moody's Senior Analyst. "Without a significant de-leveraging of its balance sheet, Hercules is following a path that could lead to financial hardship at the first sign of a market softening." Hercules' Caa1 CFR rating reflects its highly leveraged balance sheet and limited ability to generate free cash flow. The Caa1 rating on the senior secured notes reflects their pari passu secured position in Hercules' capital structure relative to the senior secured credit facilities. I. V. BEST: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: I. V. Best Pizza Inc. dba Papa John's Pizza P.O. Box 5209 Yuma, AZ 85366 Bankruptcy Case No.: 11-04007 Chapter 11 Petition Date: February 17, 2011 Court: U.S. Bankruptcy Court District of Arizona (Yuma) Judge: James M. Marlar Debtor's Counsel: Blake D. Gunn, Esq. LAW OFFICE OF BLAKE D. GUNN P.O. Box 22146 Mesa, AZ 85277-2146 Tel: (480) 710-8677 E-mail: bgunn@gunnfirm.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/azb11-04007.pdf The petition was signed by Dale J. Hiles, president. IMAGE METRICS: Amends March 31 Form 10-Q to Correct Errors ---------------------------------------------------------- Image Metrics, Inc., filed on Feb. 14, 2011, Amendment No. 2 to its quarterly report on Form 10-Q for the three months ended March 31, 2010, originally filed with the SEC on May 24, 2010, and amended by Amendment No. 1 filed on May 25, 2010, for the purposes of restating the Company's financial statements. Specifically, the Company has amended the consolidated financial statements and footnotes to the consolidated financial statements in the Form 10-Q/A to properly apply the provisions of FASB Accounting Standards Codification No. 820, "Fair Value Measurements and Disclosures". Additionally, the Company has adjusted its equity presentation to reflect the legally issued and outstanding shares of the combined companies as if the exchange transaction occurred on September 30, 2009, and adjusted its statement of operations and earnings per share to reflect the deemed dividend that was issued by Image Metrics Limited to its largest investor, Saffron Hill Ventures and one other shareholder prior to the exchange transaction. The Company reported a net loss of $5.3 million on $1.6 million of revenue for the three months ended March 31, 2010, compared with a net loss of $2.5 million on $167,000 of revenue for the same period ended March 31, 2009. The Company's balance sheet at March 31, 2010, showed $3.1 million in total assets, $13.2 million in total liabilities, and a stockholders' deficit of $10.1 million. "The Company has incurred significant operating losses and has accumulated a $34.0 million deficit as of March 31, 2010," Image Metrics said in the filing. "These conditions indicate a material uncertainty that casts significant doubt about the Company's ability to continue as a going concern." A full-text copy of the Form 10-Q/A is available for free at: http://researcharchives.com/t/s?7391 About Image Metrics Santa Monica, Calif.-based Image Metrics, Inc., provides technology-based facial animation solutions to the interactive entertainment industry. Using proprietary software and mathematical algorithms that "read" human facial expressions, the Company's technology converts video footage of real-life actors into 3D computer generated animated characters. Examples of the Company's facial animation projects include the 2008 "Grand Theft Auto IV" video game, the 2009 computer generated aging of Brad Pitt in the feature film "The Curious Case of Benjamin Button," the 2009 Black Eyed Peas' "Boom Boom Pow" music video, and the 2010 "Red Dead Redemption" video game. The Company's key intellectual property consists of one patent registered in the United States, four additional patents in process, the identification of 16 potential new patents, and significant well-documented trade secrets. IMAGE METRICS: Amends June 30 Quarterly Report to Correct Errors ---------------------------------------------------------------- Image Metrics, Inc., filed on February 14, 2011, Amendment No. 1 to its quarterly report on Form 10-Q for the three months ended on June 30, 2010, filed with the SEC on September 17, 2010, for the purposes of restating its financial statements. Specifically, the Company has amended the consolidated financial statements and footnotes to the consolidated financial statements in the Form 10-Q/A to properly apply the provisions of FASB Accounting Standards Codification No. 820, "Fair Value Measurements and Disclosures". In addition, the Company has amended the statement of operations and earnings per share calculations to reflect the deemed dividend was issued by Image Metrics Limited to its largest shareholder Saffron Hill Ventures and one other shareholder prior to the exchange transaction. The Company reported a net loss of $2.6 million on $926,000 of revenue for the three months ended June 30, 2010, compared with a net loss of $2.6 million on $176,000 of revenue for the same period ended June 30, 2009. The Company's balance sheet at June 30, 2010, showed $1.2 million in total assets, $13.8 million in total liabilities, and a stockholders' deficit of $12.6 million. "The Company has incurred significant operating losses and has accumulated a $36.6 million deficit as of June 30, 2010," Image Metrics said in the filing. "These conditions indicate a material uncertainty that casts significant doubt about the Company's ability to continue as a going concern." A full-text copy of the Form 10-Q/A is available for free at: http://researcharchives.com/t/s?7392 About Image Metrics Santa Monica, Calif.-based Image Metrics, Inc., provides technology-based facial animation solutions to the interactive entertainment industry. Using proprietary software and mathematical algorithms that "read" human facial expressions, the Company's technology converts video footage of real-life actors into 3D computer generated animated characters. Examples of the Company's facial animation projects include the 2008 "Grand Theft Auto IV" video game, the 2009 computer generated aging of Brad Pitt in the feature film "The Curious Case of Benjamin Button," the 2009 Black Eyed Peas' "Boom Boom Pow" music video, and the 2010 "Red Dead Redemption" video game. The Company's key intellectual property consists of one patent registered in the United States, four additional patents in process, the identification of 16 potential new patents, and significant well-documented trade secrets. IMAGE METRICS: Recurring Losses Prompt Going Concern Doubt ---------------------------------------------------------- Image Metrics, Inc., filed on February 14, 2011, its annual report on Form 10-K for the fiscal year ended Sept. 30, 2010. BDO USA, LLP, in Los Angeles, expressed substantial doubt about Image Metrics, Inc.'s ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency. The Company reported a net loss of $9.7 million on $5.9 million of revenue for fiscal 2010, compared to a net loss of $6.8 million on $4.0 million of revenue for fiscal 2009. The Company's balance sheet at Sept. 30, 2010, showed $1.0 million in total assets, $13.2 million in total liabilities, and a stockholders' deficit of $12.2 million. A full-text copy of the Form 10-K is available for free at: http://researcharchives.com/t/s?7390 Santa Monica, Calif.-based Image Metrics, Inc., provides technology-based facial animation solutions to the interactive entertainment industry. Using proprietary software and mathematical algorithms that "read" human facial expressions, the Company's technology converts video footage of real-life actors into 3D computer generated animated characters. Examples of the Company's facial animation projects include the 2008 "Grand Theft Auto IV" video game, the 2009 computer generated aging of Brad Pitt in the feature film "The Curious Case of Benjamin Button," the 2009 Black Eyed Peas' "Boom Boom Pow" music video, and the 2010 "Red Dead Redemption" video game. The Company's key intellectual property consists of one patent registered in the United States, four additional patents in process, the identification of 16 potential new patents, and significant well-documented trade secrets. INTEGRATED BIOPHARMA: Incurs $423,000 Net Loss in Dec. 31 Quarter ----------------------------------------------------------------- Integrated BioPharma, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $423,000 on $10.3 million of sales for the three months ended Dec. 31, 2010, compared with a net loss of $996,000 on $8.8 million of sales for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $13.6 million in total assets, $19.5 million in total liabilities, all current, and a stockholders' deficit of $5.9 million. The Company defaulted on the $7,805,000 outstanding amount of Notes Payable by failing to repay them on the scheduled maturity date of November 15, 2009. As of Feb. 14, 2011, the Company has not repaid the Notes Payable. As reported in the Troubled Company Reporter on Oct. 4, 2010, Friedman, LLP, in East Hanover, N.J., expressed substantial doubt about Integrated BioPharma's ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2010. The independent auditors noted that the Company has a working capital deficiency, recurring net losses, has defaulted on its $7,805,000 Notes Payable due on November 15, 2009, and is in the process of seeking additional capital and renegotiating its Notes Payable obligation. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7381 About Integrated BioPharma Based in Hillside, N.J., Integrated BioPharma, Inc. (INBP.OB) -- -- http://www.healthproductscorp.us/ -- is engaged primarily in manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products. The Company's customers are located primarily in the United States. The Company was previously known as Integrated Health Technologies, Inc., and, prior to that, as Chem International, Inc. The Company was reincorporated in its current form in Delaware in 1995. The Company continues to do business as Chem International, Inc., with certain of its customers and certain vendors. INTEGRATED HEALTHCARE: Reports $426,000 Net Income in Dec. 31 Qtr. ------------------------------------------------------------------ Integrated Healthcare Holdings, Inc. filed its quarterly report on Form 10-Q, reporting net income of $426,000 on $89.4 million of revenues for the three months ended Dec. 31, 2010, compared with net income of $516,000 on $94.6 million of revenues for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $168.8 million in total assets, $212.8 million in total liabilities, and a stockholders' deficit of $44.0 million. BDO Seidman, LLP, in Costa Mesa, California, expressed substantial doubt about Integrated Healtchcare Holdings, Inc.'s ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has a working capital deficit and a net stockholders' deficiency at March 31, 2010. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7383 About Integrated Healthcare Headquartered in Santa Ana, Calif., Integrated Healthcare Holdings, Inc. (OTC BB: IHCH) -- http://www.ihhioc.com/ -- owns and operates four community-based hospitals located in southern California. KEYSTONE AUTOMOTIVE: Soliciting Acceptances for Exchange, Prepack ----------------------------------------------------------------- Keystone Operations, Inc. will seek to implement its previously announced financial restructuring by launching an exchange offer and consent solicitation with respect to its existing 9 3/4% Senior Subordinated Notes due 2013, CUSIP No. 49338PABO and a solicitation of acceptances of a prepackaged plan of reorganization. As part of the Exchange Offer, the holders of the Senior Subordinated Notes will be asked to exchange their existing Senior Subordinated Notes in return for their pro rata share of approximately 22.0% of the new common stock of reorganized Keystone and the ability to purchase, pursuant to a rights offering in an aggregate amount of up to $60 million, their pro rata share of approximately 47.4% of the new common stock. The closing of the Exchange Offer is conditioned upon, among other things, 98% of the aggregate principal amount of Senior Subordinated Notes being validly tendered and not withdrawn, which percentage may be modified by mutual agreement of the Company and certain of the Company's stakeholders. If the Minimum Tender Condition is not satisfied or another condition to the closing of the Exchange Offer is not met, the Company will seek to implement the Restructuring by commencing cases under chapter 11 of the United States Bankruptcy Code and seeking confirmation of a prepackaged plan of reorganization. Therefore, in connection with the Exchange Offer, the Company is simultaneously soliciting acceptances of the Prepackaged Plan as an alternative to the Exchange Offer. The Exchange Offer is scheduled to expire at 5:00 P.M., EST Time, on March 16, 2011, unless extended or earlier terminated by the Company with the consent of certain of its stakeholders. Tendered Senior Subordinated Notes may be validly withdrawn at any time before the Exchange Offer expires. The New Securities have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. The Exchange Offer will be made pursuant to the exemption provided for under Section 4(2) of the Securities Act of 1933. About Keystone Keystone, headquartered in Exeter, Pennsylvania, competes as a distributor in the specialty accessories and equipment segment of the broader automotive aftermarket equipment industry. Keystone is majority-owned by Bain Capital, and had $485 million in revenues for the LTM period ended October 2, 2010. * * * As reported in the Troubled Company Reporter on December 9, 2010, Moody's Investors Service downgraded Keystone Automotive Operations Inc.'s Corporate Family Rating and Probability of Default Rating to Ca from Caa2 to reflect Moody's concerns about the sustainability of the company's current capital structure. The ratings on the term loan B due January 2012 and senior subordinated notes due November 2013 were also downgraded to Caa2 and C from Caa1 and Caa3, respectively. The rating outlook remains negative. In November 2010, Standard & Poor's Rating Services lowered all of its ratings on Keystone Automotive Operations Inc., including the corporate credit rating to 'CC' from 'CCC'. At the same time, S&P lowered its rating on the company's $200 million senior secured term loan due 2012 to 'CC' from 'CCC' and lowered its rating on the $175 million senior subordinated notes due 2013 to 'C' from 'CC'. "S&P's ratings on Keystone reflect its expectation that the company will pursue some form of debt restructuring during 2011," said Standard & Poor's credit analyst Brian Milligan. S&P views the company's financial risk profile as highly leveraged given its continued poor credit measures, including total debt to EBITDA in the mid-teens, EBITDA to interest below 1x, and funds from operations to total debt of about 1% to 2%. In addition, S&P views Keystone's business risk profile as vulnerable because its products are discretionary in nature and partially dependent on new vehicle sales. KNOWLEDGE LEARNING: Moody's Affirms 'B1' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service affirmed Knowledge Learning Corporation's B1 corporate family rating, the B1 probability-of- default rating, and the B2 rating on the $260 million senior subordinated notes due 2015. The ratings outlook was revised to negative from stable. Ratings affirmed: * Corporate family rating at B1; * Probability-of-default rating at B1; * $260 million 7.75% senior subordinated notes due 2015 at B2 (LGD4, 59%). Point estimate revised from (LGD4, 60%). The revision of the ratings outlook to negative reflects Moody's concern that the weak operating environment could limit KLC's ability to improve profitability and restore its credit metrics to levels appropriate for the B1 rating. While KLC has narrowed same-store revenue declines over the past few quarters, Moody's believes that continued elevated unemployment levels and pressure on government subsidies could constrain a reversal to sustained growth. KLC's B1 corporate family rating reflects the company's high leverage with debt to EBITDA of almost 6.0 times, EBITDA less capex coverage of interest slightly below 1.5 times, high fixed costs, and continued pressure on center utilization and same center revenues due to elevated unemployment levels and the generally soft economy. The rating also considers the highly fragmented and competitive nature of the child-care industry, susceptibility to reductions in federal and state funding support, and ongoing risks associated with acquisitions and shareholder enhancement activities. Notwithstanding these risks, the rating is supported by KLC's large scale within the child-care industry, broad geographical diversity within the U.S., the value of its brands, ongoing cost reduction efforts, and good liquidity profile supported by a material unrestricted cash balance. The ratings could be downgraded if KLC is unable to improve its operating performance over the next year such that debt to EBITDA remains above 5.5 times and EBITDA less capex coverage of interest expense falls below current levels. Shareholder enhancement activities and/or debt financed acquisitions could also pressure the ratings. Moody's could revise the ratings outlook to stable if KLC demonstrates a track record of organic earnings growth such that debt to EBITDA is reduced and sustained below 5.5 times and EBITDA less capex coverage of interest expense exceeds 1.5 times, while sustaining positive free cash flow. Knowledge Learning Corporation, based in Portland, Oregon, is a large scale for-profit provider of national early childhood care and education in the U.S. KCXP INVESTMENTS: Wants Collateral Use, Court Requires Asset Check ------------------------------------------------------------------ KCXP Investments, LLC, sought for authorization from the Hon. Gregg W. Zive of the U.S. Bankruptcy Court for the District of Nevada to use cash collateral. The Debtor says that First Security Bank, which asserts an interest in the Debtor's collateral, is adequately protected by virtue of a substantial equity cushion. The Debtor's Jet Ranch Complex is encumbered by a first priority deed of trust in favor of Security First Bank with a current balance of approximately $3.38 million. While the Debtor is in the process of commissioning an up-to-date appraisal, the most recent formal valuation of First Security Bank's collateral valued it at $13 million as of May 1, 2009. First Security Bank has an equity cushion of almost 300%, which is more than sufficient to adequately protect First Security Bank's interests. Security First Bank is the only party with a properly perfected security interest in Debtor's Cash Collateral. Kevin A. Darby, Esq., at Darby Law Practice, Ltd., explained that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. The Debtors proposed to use the collateral pursuant to a budget, a copy of which is available for free at http://bankrupt.com/misc/KCXP_INVESTMENTS_budget.pdf Court Order On January 25, 2011, at 10:30 a.m., the Court conducted a hearing on the Debtor's motion to approve the Debtor's use of cash collateral. Security First Bank opposed to the Debtor's motion, saying that, among other things, "the Debtor has not shown that the bank is adequately protected. Based on the bank's 2010 appraisal submitted with the declaration of Robert Hemsath, an equity deficit of over $570,000 will exist on the January 25, 2011 hearing date, which will continue to grow as interest and other charges accrue. The Debtor relies on an outdated appraisal and misstates the amount owed o the bank to conclude that the bank is oversecured." The Court has ruled that: a. the Debtor permit immediate access to those certain leasehold estate and improvements located at 2600 East college Parkway, Lot 207, Carson City, Nevada, commonly known as the Jet Ranch. The access will include the Debtor's vacant hangars. b. all personal property currently located on the premises will remain exactly where it is, and the Debtor and anyone under the direction or control of the Debtor or its principals will be prohibited from moving any property; and c. the Debtor provide copies of all leases for tenants occupying the premises to counsel for Security First Bank no later than Friday, January 28, 2011, at 5:00 p.m. P.S.T. Security First Bank is represented by Lionel Sawyer & Collins. About KCXP Investments Dayton, Nevada-based KCXP Investments, LLC, dba Jet Ranch Hangar Community Association, owns and operates an airplane hangar located at the Carson City Airport in Carson City, Nevada, which consists of 12-buildings totaling 82,400 square feet of hangar and office space situated on 3.3 acres of leased real estate at the east end of the Carson City Airport. KCXP Investments filed for Chapter 11 bankruptcy protection on December 14, 2010 (Bankr. D. Nev. Case No. 10-54847). Kevin A. Darby, Esq., at Darby Law Practice, Ltd., serves as the Debtor's bankruptcy counsel. According to its schedules, the Debtor disclosed $12,588,750 in total assets and $6,027,645 in total debts as of the Petition Date. L-1 IDENTITY: S&P Affirms Corporate Credit Rating at 'B+' --------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'B+' corporate credit rating on Stamford, Conn.-based L-1 Identity Solutions Inc., a provider of identity management solutions. S&P also removed all ratings from CreditWatch with developing implications, where they were placed on June 23, 2010. The outlook is negative. At the same time, S&P affirmed its 'BB' bank loan ratings (two notches higher than the corporate credit rating) on the company's revolving credit facility. The '1' recovery rating on the debt remains unchanged, indicating the expectation for very high (90%- 100%) recovery in the event of a payment default. S&P also affirmed the 'B+' rating on the company's $175 million senior unsecured notes. The '4' recovery remains unchanged, indicating the expectation for average (30%-50%) recovery in the event of a payment default. L-1 completed the sale of its intelligence services businesses to BAE Systems Information Solutions Inc. for $295.8 million, inclusive of acquired cash. The company used the proceeds to extinguish its existing term loan of about $269 million, as well as a portion of borrowings outstanding under its revolving credit facility. The company has been operating under temporarily amended covenants while it completed the sale of assets to BAE. On March 31, 2011, the covenants revert to pre-amendment levels. While the pre- amended covenants are more restrictive (senior secured leverage must be below 2.75x), the elimination of the company's secured debt (with the exception of revolver borrowings) will result in that metric falling below 1x, alleviating concerns of a covenant breach. "The ratings on L-1 reflect the company's dependence on government spending, negative operating trends over the past 12 months," said Standard & Poor's credit analyst Jennifer Pepper, "and still-high leverage despite recent debt reduction." The company's presence in a growth niche market, its portfolio of biometrics products and services, and base of long-term contracts partially offset company weaknesses. LAXMI, INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Laxmi, Inc. of Palm Bay dba Comfort Suites of Palm Bay P.O. Box 740394 Boynton Beach, FL 33437 Bankruptcy Case No.: 11-02087 Chapter 11 Petition Date: February 17, 2011 Court: U.S. Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 E-mail: Buddy@tampaesq.com Scheduled Assets: $3,606,186 Scheduled Debts: $7,877,537 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/flmb11-02087.pdf The petition was signed by Mahendra B. Patel, president. LEAR CORPORATION: Moody's Retains 'Ba3' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service said Lear Corporation's announcement of new shareholder enhancements is a negative credit development because it will adversely affect book equity growth and consume some of the company's liquidity. However, the magnitude of the development does not affect the company's ratings, Corporate Family Rating at Ba3, Speculative Grade Liquidity Rating at SGL-2, or the positive rating outlook. The last rating action for Lear was on October 5, 2010 when the Corporate Family Rating was raised to Ba3 with a positive outlook. Lear Corporation, headquartered in Southfield, MI, is focused on providing complete seat systems, electrical distribution systems and various electronic products to major automotive manufacturers across the world. The company had net sales of $12 billion in 2010 and had approximately 86,800 employees in 34 countries. LEHMAN BROTHERS: CalPERS Sues Ex-Lehman Execs., Underwriters ------------------------------------------------------------ The California Public Employees' Retirement System accused former Lehman Brothers Holdings Inc. officers and underwriters of making false statements about the company's financial status in the months leading up to its September 2008 bankruptcy, according to a February 8, 2011 report by The Wall Street Journal. In a lawsuit filed in San Francisco federal court, CalPERS alleged the former Lehman officials and bond underwriters did not disclose the company's losses and exposures to subprime and Alt-A lending and the true value of its mortgage-related assets, The Journal reported. The pension fund suffered losses in its investments in Lehman stock and bonds between June 2007 and September 2008 allegedly because of those false statements, The Journal reported. CalPERS funds dropped $100 billion in value between September 2008 and March 2009 to $160 billion as a result of the financial crisis, according to a spokesman who refused to comment further on the lawsuit. The lawsuit does not quantify damages but notes that CalPERS held $700 million worth of Lehman bonds covered in the lawsuit and another 3.9 million shares of Lehman at the time of the bankruptcy, The Journal reported. The pension fund named former Lehman Chief Executive Officer Richard Fuld, former Chief Financial Officers Christopher O'Meara and Erin Callan, and nine directors along with 33 other firms that underwrote some of Lehman's bond offerings as defendants, according to the report. CalPERS, the largest U.S. public pension fund, manages $228 billion of pension assets. The pension fund is among a group of Lehman creditors that filed a rival restructuring plan late last year for the company after objecting to Lehman's initial plan. CalPERS, hedge fund Paulson & Co., and other sponsors of the rival plan together hold about $16 billion of senior Lehman bonds, Bloomberg News reported. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Franklin, et al., Have 5.1% Equity Stake --------------------------------------------------------- Four investors disclosed in a Form SC 13G/A filing with the U.S. Securities and Exchange Commission dated February 3, 2011, that they own 36,710,398 shares of Lehman Brothers Holdings Inc. common stock representing 5.1% of Lehman shares outstanding. The investors are: Aggregate Amount Investors Beneficially Owned --------- ------------------ Franklin Resources Inc. 36,710,398 Charles Johnson 36,710,398 Rupert Johnson Jr. 36,710,398 Franklin Advisers Inc. 36,710,398 About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LBI Trustee Deal with CalPERS Approved ------------------------------------------------------- Pursuant and subject to the Securities Investor Protection Act of 1970, James W. Giddens was duly appointed and authorized to liquidate the business of Lehman Brothers Inc., including the unwind, close-out and reduction to cash the amounts due the LBI Estate with respect to certain transactions between LBI and The California Public Employees' Retirement System. Prior to the Petition Date, LBI and CalPERS entered into (i) securities lending transactions, where UAM Trust Company acted as the agent for CalPERS under a Master Securities Loan Agreement dated as of November 5, 2001, between LBI and UAM Trust Company, and (ii) Japanese foreign exchange trades. As of the Petition Date, amounts were due or were accrued in favor of LBI with respect to the Transactions in the aggregate. The LBI Trustee and CalPERS agree in a stipulation approved by the Bankruptcy Court that it would be in the best interests of the LBI Estate, its customers and creditors that the outstanding Transactions be closed out subject to the payment to the LBI Trustee of $12,104,489, which amount includes interest. Under their stipulation, the Parties acknowledge that CalPERS has paid the LBI Trustee the Closeout Amount in immediately available funds, and that the Transactions have been fully and finally closed without the need for any further Court approval or other action by the Parties. Each of the Parties expressly reserves all of his or its rights and defenses with respect to any other claims each might have against the other, other than any claims in respect of or in connection with the Transactions. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Seoul Court Rules in Derivatives Case ------------------------------------------------------ A Seoul court ruled in favor of Lehman Brothers in a damages suit filed by Korea Investment & Securities Co. seeking 352 billion won lost in investment in credit derivatives, according to a February 11, 2011 report by Yonhap News. Korea Investment in 2006 bought a credit-linked note (CLN) from a Dutch branch of Lehman Brothers International Europe. After issuing asset-backed securities with the underlying credit, the securities dealer had sold 100 billion won worth of ABS to Shinhan Investment Co. and 33 billion won worth to I Investment Trust Management while keeping the rest of the 167 billion won in bonds. The securities firm filed the suit against LBIE's Seoul branch early last year, asserting that its parent company was responsible to pay the principal as it issued and handled a pool of underlying assets. In a ruling, the Seoul Southern District Court dismissed the securities firm's claim, saying the European unit was not responsible for the credit derivative loss as Lehman Brothers Treasury Bond issued the bond. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: UBS Opposes LBI Trustee Demand for Payment ----------------------------------------------------------- James W. Giddens, as Trustee for the SIPA liquidation of Lehman Brothers Inc., has asked the Bankruptcy Court to enforce the automatic stay against UBS AG and compel payment of approximately $23 million, plus interest, of excess collateral that is property of the LBI estate. The approximately $23 million represents collateral provided by LBI to UBS to secure LBI's obligations to UBS under a 1992 International Swaps and Derivatives Association Master Agreement, dated as of July 13, 2004, by and between LBI and UBS. In response, UBS AG asks the Court to deny the LBI Trustee's motion and, instead, enforce the setoff clause in its ISDA Agreement with Lehman Brothers Inc. UBS asserts that its rights are determined in the first instance by non-bankruptcy law, New York contract law. UBS further asserts that the Agreement expressly provides that the ISDA Setoff Clause is "in addition to and not in limitation of"the CSA Setoff Clause and that the Agreement and the New York Uniform Commercial Code both establish that the Payable is simply a debt, subject to setoff like any other obligation of UBS to LBI. UBS also notes that the Trustee's demand for turnover of the purported surplus collateral should have been made by way of a complaint in an adversary proceeding. There appears to be no material fact dispute in the Trustee's Motion, but rather only a potential dispute about the precise amounts of the payable, initially estimated at $76 million, and receivables. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LIONCREST TOWERS: Cash Collateral Use Hearing on March 30 --------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois will continue on March 30, 2011, at 10:30 a.m., the hearing to consider Lioncrest Towers, LLC's request for continued use of Wells Fargo Bank's cash collateral to fund the Debtor's Chapter 11 case, pay suppliers and other parties. As reported by the Troubled Company Reporter on Nov. 23, 2010, the Court set a hearing for Nov. 23, 2010, at 10:30 a.m., on the Debtor's request for the continued use of the cash collateral of Wells Fargo, which asserts a senior mortgage lien and against the Debtor's residential apartment project in Richton Park, Illinois, known as Park Towers, pursuant to a senior mortgage indebtedness of approximately $29.50 million. Wells Fargo also asserts a security interest in and lien upon, among other things, the rents being generated at the Property. The Bankruptcy Court previously entered an interim order allowing the Debtor to access cash collateral. As adequate protection for any diminution in value of the lenders' collateral, the Debtor proposes that it will grant Wells Fargo a valid, perfected, enforceable and non-avoidable first priority interest in and lien and mortgage upon all of the Debtor's assets. The Debtor will also provide the Wells Fargo any reports or other information concerning any sale or proposed sale of the Debtor's assets, well as other financial and other information concerning the business, financial affairs of the Debtor and the operation of the collateral. On the 15th day of each month, the Debtor will provide the Wells Fargo an operating statement and a weekly cash flow report. About Lioncrest Towers, LLC Lioncrest Towers, LLC, owns and operates a residential apartment project in Richton Park, Illinois, known as Park Towers. It filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 10-36805) on Aug. 17, 2010. Richard H. Fimoff, Esq., at Robbins, Salomon & Patt Ltd, assists the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million. MARC AND RENEE: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: The Marc and Renee Paul Family Limited Partnership 11620 Wilshire Boulevard, 10th Floor Los Angeles, CA 90025 Bankruptcy Case No.: 11-17135 Chapter 11 Petition Date: February 18, 2011 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Debtor's Counsel: Leslie A. Cohen, Esq. LESLIE COHEN LAW PC 506 Santa Monica Boulevard, Suite 200 Santa Monica, CA 90401 Tel: (310) 394-5900 Fax: (310) 394-9280 E-mail: leslie@lesliecohenlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/cacb11-17135.pdf The petition was signed by Marc Paul, general partner. Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Marc Jonathon & Renee Francene Paul 11-17132 02/18/11 SCI Real Estate Investments, LLC 11-15975 02/11/11 Secured California Investments, Inc. 11-15987 02/11/11 MCK ARBOURS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: MCK Arbours, LLC 29829 Santa Margarita Parkway, Suite 400 Rancho Santa Margari, CA 92688 Bankruptcy Case No.: 11-12320 Chapter 11 Petition Date: February 19, 2011 Court: U.S. Bankruptcy Court Central District of California (Santa Ana) Judge: Robert N. Kwan Debtor's Counsel: Thomas P. Giordano, Esq. LAW OFFICE OF THOMAS P. GIORDANO 18101 Von Karman Avenue, Suite 560 Irvine, CA 92612 Tel: (714) 912-7810 Fax: (714) 912-7860 E-mail: tohmahso@aol.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/cacb11-12320.pdf The petition was signed by Ivan W. Ho, managing member. MEXICAN BENEFIT: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Mexican Benefit Corporation 529 Euclid Avenue & 2901 East 6th Street Los Angeles, CA 90063 Bankruptcy Case No.: 11-16853 Chapter 11 Petition Date: February 17, 2011 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Sheri Bluebond Debtor's Counsel: Keith F. Rouse, Esq. LAW OFFICE OF KEITH F. ROUSE 766 E. Colorado Boulevard, Suite 104 Pasadena, CA 91101 Tel: (626) 449-4211 E-mail: rouselaw@hotmail.com Scheduled Assets: $1,290,050 Scheduled Debts: $268,650 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/cacb11-16853.pdf The petition was signed by Martha C. Soriano, president. MICHAEL FOODS: Moody's Assigns 'B1' Rating to New Senior Loan ------------------------------------------------------------- Moody's assigned a B1 rating to the proposed new senior secured bank facilities of Michael Foods Group, Inc., parent of Michael Foods, Inc., and affirmed the company's other ratings including its B2 CFR. The rating outlook is stable. Ratings on the existing facilities will be withdrawn after the new facilities are put in place. Ratings Rationale As part of the refinancing, the company will maintain its $75 million revolver but upsize the senior secured term loan from the original $790 million put in place last June to $840 million, and modify some of the terms under the senior secured facilities. A $65 million distribution to shareholders will be paid. Moody's said that the increased leverage that will result from the refinancing is not materially different than what Moody's expected when the leveraged recap first occurred mid 2010, but that the trajectory for improving leverage will be extended by about a year. The B2 CFR and stable outlook reflect the re-leveraging of the company to levels similar to what were expected when Goldman Sachs purchased the company last year (together with rollover of equity from former owner Thomas H. Lee Partners), and incorporate the shareholder friendly orientation as evidenced by the distribution. The company's ratings consider the company's high financial leverage, sensitivity to grain and egg commodity prices, its customer and supply concentrations, the impact of the difficult economic environment on volumes, which have begun to improve after a period of decline, and the company's exposure to the challenges facing the food service industry in this difficult environment as well as the potential for debt funded acquisition activity to expand the current business platform. Yet the ratings also take into account Michael Foods' leading market position as a producer of egg products, number one position in refrigerated potato products, the benefits of its new production facility, product diversity, a growing emphasis on value-added products with more stable margins, and the company's track record of delivering relatively consistent cash flow generation. These ratings were assigned: Michael Foods Group, Inc.: * Senior Secured Guaranteed Bank facilities at B1; LGD 3, 36% These ratings were affirmed: * Corporate Family Rating at B2 * Probability of default rating at B2 * $430 million Senior Unsecured 8 year note at Caa1; LGD 5, 87% The last rating action for this issuer was on June 14, 2010 when the ratings were lowered following the announcement of the sale of the company to and leveraged recap by Goldman Sachs Capital Partners VI Fund L.P. Headquartered in Minnetonka, Minnesota, Michael Foods, Inc. is a producer and distributor of egg products, cheese and other refrigerated grocery products and potato products. Annual sales exceed $1.5 billion. MID-AMERICAN: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Mid-American Products, Inc. 1801 Wildwood Avenue Jackson, MI 49202 Bankruptcy Case No.: 11-43868 Chapter 11 Petition Date: February 16, 2011 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtor's Counsel: Mark H. Shapiro, Esq. STEINBERG SHAPIRO & CLARK 25925 Telegraph Rd., Suite 203 Southfield, MI 48033-2518 Tel: (248) 352-4700 Fax: (248) 352-4488 E-mail: shapiro@steinbergshapiro.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/mieb11-43868.pdf The petition was signed by Travis W. Pearse, Jr., president. MRU HOLDINGS: S.D.N.Y. Ct. Dismisses Class Suit v. Merrill ---------------------------------------------------------- Chad Bray, writing for Dow Jones Newswires, reports that U.S. District Judge Richard Berman on Thursday dismissed a lawsuit by shareholders of MRU Holdings Inc. against Merrill Lynch & Co. and MRU's auditor over alleged misrepresentations and omissions regarding nearly $200 million in auction-rate securities should be dismissed. The lawsuit alleged that MRU made misrepresentations regarding the riskiness of its auction-rate securities and overstated its expected income and that Merrill Lynch rigged prices in the auction-rate market. MRU, which isn't a defendant in the lawsuit, used Merrill Lynch as its banker to securitize its student-loan holdings through auction-rate securities, according to the lawsuit. The suit seeks to represent a class of shareholders who purchased shares of MRU from July 2007 to September 2008. Bagell, Josephs, Levine & Company, LLC, served as MRU's independent auditor. According to Mr. Bray, a lawyer for the shareholders didn't return a phone call seeking comment. "We are pleased with the court's decision," a Merrill Lynch spokesman said, according to the report. The report further notes the ruling comes as Merrill Lynch has won dismissal of several lawsuits in recent weeks by institutional investors who purchased auction-rate securities. Merrill is now owned by Bank of America Corp. The case is In re: MRU Holdings Securities Litigation, Case No. 09-Civ.-3807 (S.D.N.Y.). A copy of Judge Berman's February 17, 2011 Decision and Order is available at http://is.gd/D2wHbffrom Leagle.com. About MRU Holdings Based in New York, MRU Holdings, Inc., is a specialty consumer finance company that facilitates and provides students with funds for higher education. At September 30, 2008, the company had $310 million in total assets and $331 million in total liabilities, resulting in $20.1 million in shareholders' deficit. MRU Holdings filed on February 6, 2009, a voluntary petition seeking relief under Chapter 7 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 09-10530). As a result of the bankruptcy filing, the Company suspended business operations. MULTIPLAN INC: S&P Assigns 'B' Rating to New $1.265 Bil. Loan ------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' issue rating and recovery rating of '3' to MultiPlan Inc.'s new $1.265 billion term loan B (due 2017). Standard & Poor's also said that it affirmed all of the other ratings on MultiPlan, including the 'B' counterparty credit rating. The outlook remains stable. MultiPlan's debt refinancing does not affect its overall credit profile. The company is using the full proceeds of the new term loan to repay its existing term loan and pay for associated fees and expenses. The new term loan carries a lower interest rate (LIBOR + 325 basis points, 1.5% LIBOR floor) than the existing term loan (LIBOR + 475 basis points, 1.75% LIBOR floor) and has similar terms otherwise. "The speculative-grade ratings on MultiPlan reflect its highly leveraged financial risk profile, which its high debt leverage, weak interest coverage, and funds from operations to debt in the mid-single digits demonstrate," noted Standard & Poor's credit analyst James Sung. "In addition, the company has several business-profile weaknesses, such as an overall limited product scope, several significant client concentrations, and ongoing integration risks associated with the Viant acquisition." Partly offsetting these negative factors are MultiPlan's relatively stable competitive position, improved scale and diversification stemming from the Viant acquisition, good historical operating margins, and stable cash flow. The recovery rating of '3' on MultiPlan's new $1.265 billion term loan (due 2017) indicates S&P's expectation for a meaningful (50%- 70%) recovery in the event of a payment default. The outlook on MultiPlan is stable. S&P believes that the company's highly leveraged financial profile will continue to offset the benefits of its relatively stable business profile. Although S&P expects that MultiPlan will continue using a significant portion of free cash flow to pay down debt, the company's key credit ratios are unlikely to improve significantly enough over S&P's outlook horizon to change its assessment of its financial profile. "Over the longer term, S&P would consider an upgrade if the company's financial profile becomes sustainably less aggressive and is complemented by improved business fundamentals, such as the full integration of Viant or profitable entry into new product segments that drive stronger revenue growth," Mr. Sung added. "Conversely, S&P would consider a downgrade if the company's revenue and earnings deteriorate or if the company's key credit ratios become unsupportive of the ratings." NBC ACQUISITION: Moody's Downgrades Default Rating to 'Caa2' ------------------------------------------------------------ Moody's Investors Service lowered NBC Acquisition Corp.'s (parent of Nebraska Book Company) Probability of Default rating to Caa2 from Caa1. All other ratings were confirmed as detailed below. The rating outlook is developing. Ratings Rationale The downgrade of NBC's Probability of Default Rating to Caa2 reflects the heightened default risk for the company, which could include a transaction that Moody's would deem a distressed exchange, as NBC faces significant near term debt maturities. Substantially all debt of Nebraska Book Company (the operating entity) matures before March 15, 2012. And because other securities will mature during 2011, Moody's believes the company must implement a comprehensive refinancing of its capital structure over the next six to nine months. In addition, restrictions in the existing indentures limit the ability of Nebraska Book Company to upstream dividends to NBC Acquisition Corp used to fund cash interest payments on the parent company bonds. Based on current restrictions, it is unlikely the company would be able to fund sufficient dividends to fund the semi-annual interest payment on the parent company notes due in September, 2011. NBC's Caa1 Corporate Family Rating reflects the company's significant near dated maturities. The rating also reflects NBC's high leverage and modest interest coverage, with debt/EBITDA near 7 times and EBITA/interest expense near 1.2 times for the LTM period ending 12/31/2010. The rating also reflects heightening competition in the rental textbook market, primarily from online competitors, which has had a negative impact on comparable store sales for the company. NBC has recently undertaken actions to respond to the rising use of rental textbooks, and is also implementing further cost savings initiatives. The developing outlook reflects the uncertainty around NBC's ability to execute a refinancing plan in the very near term. If Moody's expects these plans to involve some form of impairment to existing debt holders, ratings could be lowered. However if the company is able to lengthen its debt maturity profile without impairing existing debt holders, ratings could be upgraded. Ratings could be downgraded if the company's liquidity profile were to further weaken, or the probability of default were to otherwise weaken. Ratings could be upgraded if the company is able to successfully address its material near term refinancing needs while also maintaining adequate liquidity and stable operating performance. These ratings were downgraded: NBC Acquisition Corporation: * Probability of Default Rating to Caa2 from Caa1 These ratings were confirmed and LGD assessments amended: NBC Acquisition Corporation: * Corporate Family Rating at Caa1 * $77 million senior debentures due 2013 at Caa3 (LGD 5,82% from LGD 6, 94%) Nebraska Book Company * $200 million senior secured notes due 2011 at B2 (LGD 2, 17% from LGD 2, 27%) * $175 million senior subordinated notes due 2012 at Caa2 (LGD 3, 49% from LGD 5, 71%) The last rating action on NBC Acquisition Corp was on October 14, 2010 when the company's Corporate Family Rating and Probability of Default Rating was lowered to Caa1. Headquartered in Lincoln, NE, Nebraska Book Company is a leading operating of on-campus and off-campus college bookstores. Revenues in the LTM period ending 12/31/2010 were approximately $608 million. OPTI CANADA: Incurs C$273.82 Million Net Loss in 2010 ----------------------------------------------------- On Feb. 10, 2011, Opti Canada, Inc. announced financial results for the year ended Dec. 31, 2010. The Company reported a net loss and comprehensive loss of C$273.82 million on C$249.80 million of revenue for the year ended December 31, 2010, compared with a net loss and comprehensive loss of C$306.16 million on C$143.84 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010 showed C$3.79 billion in total assets, C$2.75 billion in total liabilities and C$1.04 billion in shareholders' equity. A full-text copy of the report is available for free at: http://ResearchArchives.com/t/s?737a About OPTI Canada OPTI Canada Inc. is a Calgary, Alberta-based company focused on developing major oil sands projects in Canada using its proprietary OrCrude(TM) process. OPTI's common shares trade on the Toronto Stock Exchange under the symbol OPC. * * * OPTI Canada carries a 'CCC+' long-term corporate credit rating from Standard & Poor's Ratings Services. It has a 'Caa2' corporate family rating from Moody's Investors Service. "S&P base its decision to lower the ratings on the increasing financing burden associated with OPTI's debt and the widening gap between potential cash flow generation, and financing and spending obligations," said Standard & Poor's credit analyst Michelle Dathorne in August 2010, to explain S&P's downgrade of the corporate rating to 'CCC+' from 'B-'. "Our estimates of the operating cash flows necessary for the company to fund all required financing obligations and capital spending internally provide no allowances for production shortfalls or commodity-price weakness from now until 2012. This lack of financial flexibility is characteristic of a credit profile in the 'CCC' category," Ms. Dathorne added. PALMAS COUNTRY CLUB: Plan Confirmation Hearing Set for March 8 -------------------------------------------------------------- The Hon. Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court for the District of Puerto Rico has set for March 8, 2011, at 10:30 a.m. a hearing considering the confirmation of Palmas Country Club Inc.'s amended Chapter 11 plan dated January 7, 2011. As reported by the Troubled Company Reporter on Jan. 25, 2011, the Debtor, on Jan. 7, 2011, filed an amended plan of reorganization with the Court, in compliance with the Court's Dec. 22, 2010 order requiring it to file an amended Plan of Reorganization deleting the discharge language conforming it to 11 U.S.C. Section 1141, and deleting the third-party release provision. A copy of the Chapter 11 Plan, as amended, is available for free at: http://bankrupt.com/misc/PalmasCountry.AmendedPlan.pdf Humacao, Puerto Rico-based Palmas Country Club, Inc., owns certain real estate facilities located in Palmas del Mar, Humacao, Puerto Rico, consisting of an 18 hole championship golf course known as the Flamboyan Course, an 18 hole golf course known as Palm Course, a 22,200 square feet golf clubhouse, a 5,600 square feet beach club house, a tennis club, and other related facilities. Palmas filed for Chapter 11 bankruptcy protection on August 4, 2010 (Bankr. D. P.R. Case No. 10-07072). Alexis Fuentes- Hernandez, Esq., at Fuentes Law Offices, assists the Debtor in its restructuring effort. The Debtor disclosed $23,973,011 in assets and $58,546,398 in liabilities as of the Petition Date. PCS EDVENTURES!.COM: Posts $139,000 Net Loss in Dec. 31 Quarter --------------------------------------------------------------- PCS Edventures!.com, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $139,056 on $476,060 of revenues for the three months ended Dec. 31, 2010, compared with a net loss of $560,035 on $577,004 of revenues for the corresponding period of the prior fiscal year. The Company's balance sheet as of Dec. 31, 2010, showed $1.4 million in total assets, $486,896 in total liabilities, and stockholders' equity of $908,518. M&K CPAS PLLC expressed substantial doubt about PCS Edventures!.com's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has suffered reoccurring losses and negative cash flow from operations. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7385 About PCS Edventures!.com Boise, Idaho-based PCS Edventures!.com, Inc. (OTC BB: PCSV) -- http://www.edventures.com/-- designs and delivers educational products and services to the K-16 market that develop contemporary skills for the 21st century, including critical thinking, problem solving, innovation, creativity, and communications. PCS programs emphasize hands-on experiences in Science, Technology, Engineering and Math (STEM) and have been deployed at over 6,000 sites in all 50 United States and 17 foreign countries. PETROHUNTER ENERGY: Posts $1.4 Million Net Loss in Dec. 31 Quarter ------------------------------------------------------------------ PetroHunter Energy Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $1.4 million for the three months ended Dec. 31, 2010, compared with a net loss of $1.9 million for the same period of the previous fiscal year. The Company reported zero revenues in both periods. The Company's balance sheet at Dec. 31, 2010, showed $1.8 million in total assets, $65.3 million in total liabilities, and a stockholders' deficit of $63.5 million. As reported in the Troubled Company Reporter on Dec. 28, 2010, Eide Bailly LLP, in Greenwood Village, Colo., expressed substantial doubt about PetroHunter Energy's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has an accumulated deficit of $286.0 million and net loss of $6.8 million for the year ending September 30, 2010, and as of that date, has a working capital deficit of $11.3 million. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7387 About PetroHunter Energy Denver, Colo.-based PetroHunter Energy Corporation is an oil and gas exploration company. The Company currently owns oil and gas leasehold interests either directly or through an equity investment in Australia (Beetaloo Basin) and in Western Colorado (Piceance Basin). PNM RESOURCES: Fitch Withdraws 'BB' Issuer Default Rating --------------------------------------------------------- Fitch Ratings has affirmed and withdrawn these ratings of PNM Resources and its utility operating subsidiaries, Public Service Company of New Mexico and Texas New Mexico Power Company: PNMR -- Issuer Default Rating 'BB'; -- Senior unsecured debt 'BB'; -- Revolving credit facility 'BB'; -- Short-term IDR 'B'. PNM -- IDR 'BB'; -- Secured pollution control revenue bonds 'BBB-'; -- Senior unsecured notes 'BB+'; -- Senior unsecured PCRBs 'BB+'; -- Revolving credit Facility 'BB+'; -- Preferred stock 'BB-' -- Short-term IDR 'B'. TNMP -- IDR 'BB+'; -- First mortgage bonds 'BBB'; -- Secured term loan 'BBB'; -- Secured revolving credit facility 'BBB'; -- Short-term IDR 'B'. Fitch has withdrawn the ratings for business reasons. Approximately $1.8 billion of debt as of Sept. 30, 2010, is affected by the rating action. PROGNOZ SILVER: Repays Part of Outstanding Debt ----------------------------------------------- High River Gold Mines Ltd. was informed that Prognoz Silver LLC repaid part of an outstanding debt due under the contract for exploration work on the Prognoz silver project to OJSC Buryatzoloto. High River holds a 50% indirect interest in Prognoz Silver, which operates the Prognoz silver project in the Republic of Sakha (Yakutia), Russia. The repaid amount was approximately US$18 million. Prognoz Silver's debt originated from the inability of its shareholders, other than High River, to finance their share of expenditures at the Prognoz silver project. Following the repayment, the Arbitration Court of the City of Moscow dismissed Buryatzoloto's application for official bankruptcy procedures for Prognoz Silver. However, the initial application to put Prognoz Silver into bankruptcy, which was filed by Prognoz Silver itself, is still under review by the court and has not yet been decided. Buryatzoloto is considering the circumstances of the repayment and evaluating its next steps. About High River High River is an unhedged gold company with interests in producing mines and advanced exploration projects in Russia and Burkina Faso. Two underground mines, Zun-Holba and Irokinda, are situated in the Lake Baikal region of Russia. Two open pit gold mines, Berezitovy in Russia and Taparko-Bouroum in Burkina Faso, are also in production. Finally, High River has two advanced exploration projects with NI 43-101 compliant resource estimates, the Bissa gold project in Burkina Faso and 50% interest in the Prognoz silver project in Russia. RAFAEL QUINONES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Rafael Rivera Quinones dba Supermercados Marrero Carr. 568 Km 28.9, Barrio Padilla Corozal, PR 00783 Bankruptcy Case No.: 11-01166 Chapter 11 Petition Date: February 16, 2011 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Carmen D. Conde Torres, Esq. C.CONDE & ASSOCIATES 254 San Jose Street 5th Floor San Juan, PR 00901-1523 Tel: (787) 729-2900 Fax: (787) 729-2203 E-mail: notices@condelaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/prb11-01166.pdf REALOGY CORP: Bank Debt Trades at 4% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which Realogy Corp. is a borrower traded in the secondary market at 96.41 cents-on-the- dollar during the week ended Friday, February 18, 2011, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.72 percentage points from the previous week, The Journal relates. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank loan matures on September 30, 2013, and carries Moody's B1 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Realogy Corp. Realogy Corp. -- http://www.realogy.com/-- a global provider of real estate and relocation services with a diversified business model that includes real estate franchising, brokerage, relocation and title services. Realogy's world-renowned brands and business units include Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group, ERA, Sotheby's International Realty, NRT LLC, Cartus and Title Resource Group. Collectively, Realogy's franchise systems have around 15,000 offices and 270,000 sales associates doing business in 92 countries around the world. Headquartered in Parsippany, N.J., Realogy is owned by affiliates of Apollo Management, L.P., a leading private equity and capital markets investor. Realogy fully supports the principles of the Fair Housing Act. The Company's balance sheet at Sept. 30, 2010, showed $2.67 billion in total assets, $9.14 billion in total liabilities, and a stockholders' deficit of $981.0 million. * * * Realogy has 'Caa2' corporate family rating and 'Caa3' probability of default rating, with positive outlook, from Moody's. The rating outlook is positive. Moody's said in January 2011 that the 'Caa2' CFR and 'Caa3' PDR reflects very high leverage, negative free cash flow and uncertainty regarding the timing and strength of a recovery of the residential housing market in the US. Moody's expects Debt to EBITDA of about 14 times for the 2010 calendar year. Despite the recently completed and proposed improvements to the debt maturity profile, the Caa2 CFR continues to reflect Moody's view that current debt levels are unsustainable and that a substantial reduction in debt levels will be required to stabilize the capital structure. In February 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Realogy Corp. to 'CCC' from 'CC'. S&P removed the rating from CreditWatch, where it was placed with positive implications Jan. 18, 2011. The rating outlook is positive. RED ROCKET: Plan Confirmation Hearing Continued Until March 9 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri has continued until March 9, 2011, at 1:30 p.m., the hearing to consider adequacy of the Disclosure Statement and Confirmation of Red Rocket Fireworks, Inc.'s Plan of Liquidation. As reported in the Troubled Company Reporter on Dec. 27, 2010, according to the Disclosure Statement, the Debtor has liquidated all of its assets prior to the filing of the Plan. All funds from the asset sale have been deposited in Debtor's Debtor-in- Possession accounts. Normal business expenses, payroll, and liquidation expenses have been paid from these funds. Funds remaining after payment of ongoing costs of liquidation and administration will be disbursed pursuant to the Plan. The counsel for Debtor will act with the president of Debtor, Bruce Pyles, as disbursing agent. Distributions will be made in their discretion subject to a reserve of funds for future costs of administration. Distributions will commence after a full review of claims, objections to claims are resolved, and administrative closure of the case, all of which are anticipated to be completed by the second quarter of 2011. Under the Plan, the Debtor intends to pay in full $194,697 of the secured claims. Priority unsecured claims amounting to $265,035 are also anticipated to be paid in full. Unsecured creditors will share in a pro rata distribution based on the amount of their claim. As of the date of the filing of the Plan, the amount of the anticipated dividend to be paid to unsecured creditors is unknown. The Debtor will be conclusively deemed to have rejected all executory contracts and unexpired leases that were not rejected by operation of the Bankruptcy Code, or were not assumed under a separate motion before the filing and circulation of the Plan. There are no known executory contracts or unexpired leases. A proof of a claim arising from the rejection of an alleged executory contract or unexpired lease must be filed no later than February 28. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/RedRocket_DS.pdf About Red Rocket Fireworks Rock Hill, South Carolina-based Red Rocket Fireworks, Inc., filed for Chapter 11 bankruptcy protection on December 11, 2009 (Bankr. W.D. Mo. Case No. 09-62800). Raymond I. Plaster, Esq., who has an office in Springfield, Missouri, represents the Debtor. The Company estimated assets and debts at $10 million to $50 million as of the Petition Date. REOSTAR ENERGY: Court OKs Michael McConnell as Chapter 11 Examiner ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas approved the appointment of Michael McConnell as Chapter 11 Examiner in the cases of ReoStar Energy Corporation, et. al. On Dec. 30, 2010, the Court, directed William T. Neary, the U.S. Trustee for Region 6, to appoint an examiner for the Debtors cases. The U.S. Trustee is represented by: Merdyth A. Kippes, Esq., trial attorney Office of the U.S. Trustee 1100 Commerce Street, Room 976 Dallas, TX 75242 Tel: (214) 767-8967 Fort Worth, Texas-based ReoStar Energy Corporation is engaged in the exploration, development and acquisition of oil and gas properties, primarily located in the state of Texas. The Company owns roughly 9,000 acres of leasehold, which include 5,000 acres of exploratory and developmental prospects as well as 4,000 acres of enhanced oil recovery prospects. The Company filed for Chapter 11 bankruptcy protection on November 1, 2010 (Bankr. N.D. Tex. Case No. 10-47176). Bruce W. Akerly, Esq., at Cantey Hanger LLP, represents the Debtors in their restructuring efforts. Greenberg Taurig, LLP, serves as special corporate/securities counsel. Reostar Energy disclosed $15,335,337 in assets and $16,391,412 in liabilities in its schedules. ReoStar Energy's bankruptcy case is jointly administered with ReoStar Leasing, Inc., and ReoStar Operating, Inc. ReoStar Energy is the lead case. RITE AID: Fitch Assigns 'BB-/RR1' Ratings to $343 Mil. Loans ------------------------------------------------------------ Fitch Ratings has assigned 'BB-/RR1' ratings to Rite Aid Corporation's $343 million first lien term loans due February 2018. The Rating Outlook is Stable. Proceeds from the offering will be used to retire Rite Aid's $343 million Tranche 3 Term Loan due June 4, 2014. The refinancing provides slightly better pricing with the new terms loans priced at L + 325 with a Libor floor of 1.5% versus the prior terms loans priced at L + 300 with a Libor floor of 3%. It will also help stagger and extend the debt maturity profile with less than $15 million due 2011 and 2012 and $205 million due 2013. Between 2014 and 2016, Rite Aid will have to contend with refinancing approximately $1 billion in debt annually. The rating reflects Rite Aid's significant high leverage and limited capital for investment and operating statistics that significantly trail its two major competitors. The ratings also reflect Rite Aid's strong market share position as the third largest U.S. drug retailer and management's concerted efforts to improve the productivity of its store base and manage liquidity through working capital reductions and other cost cutting initiatives. The Stable Outlook reflects Fitch's expectations of credit metrics expected to be around current levels over the next three years and the successful refinancing of its credit facility and other debt over the last 12 months, pushing out significant debt maturities to 2014. Weak pharmacy same-store sales and a decline in higher margin front-end same-store sales have pressured earnings since 2009 although sales trends over the last two months show slight improvement in both businesses. For the latest 12 month period ended Nov. 27, 2010, total same store sales declined approximately 1.6% with a front end decline of 1.2% and a pharmacy same store sales decline of 1.7%. Adjusted FIFO gross margin declined modestly by about 10 basis points year over year and EBITDA (adjusted for non-cash and one time items) declined approximately $130 million to $850 million, in spite of a $135 million decline in operating expenses during the period. Adjusted debt/EBITDAR at 7.7 times and EBITDAR/interest + rent at 1.2x were slightly above fiscal year end levels. Credit metrics over the next three years are expected to remain relatively stable at 7.7x-8.0x. Rite Aid recently amended and extended its $1.175 billion revolving credit facility due Sept. 30, 2012 with a new $1.175 billion revolving credit facility due Aug. 19, 2015. However, the maturity shall be April 18, 2014 in the event that Rite Aid does not repay, refinance or otherwise extend the remaining term loans ($1,079 million Tranche 2 Term Loan and $343 million Tranche 3 Term Loan due June 1, 2014) prior to that time and meet certain other conditions. At Nov. 27., 2010, Rite Aid had $58 million outstanding under its credit facility, with borrowing capacity of approximately of $965 million, net of outstanding letters of credit of $152 million. The senior secured credit facility requires the company to maintain a minimum fixed charge coverage ratio only if availability on the revolving credit facility is less than $150 million. Rite Aid's fixed charge coverage ratio was above the minimum required amount at the end of the last quarter. Fitch expects free cash flow in the $100 million range in fiscal 2011 and flat to modest free cash flow thereafter. The next debt maturity is August 2013 when $185 million of 6.875% unsecured unguaranteed debt comes due, unless Rite Aid is required to buy back $64 million of 8.5% convertible notes due May 2015 should its shares become delisted. The issue ratings for the new term loans are derived from the Issuer Default Rating and the relevant Recovery Rating. The revolving credit facility, term loans, the $410 million senior secured notes due June 2016 and $650 million senior secured notes due August 2020 have a first lien on the company's cash, accounts receivable, investment property, inventory and scrip lists, and are guaranteed by Rite Aid's subsidiaries giving them an outstanding recovery (91%-100%). Fitch's recovery analysis assumes a liquidation value under a distressed scenario of approximately $6 billion on inventory, receivables, owned real estate and prescription files. Fitch rates Rite Aid: -- Long Term Issuer Default Rating 'B-'; -- Secured revolving credit facility and term loans 'BB-/RR1'; -- First and second lien senior secured notes 'BB-/RR1'; -- Guaranteed senior unsecured notes 'CCC/RR5'; -- Non-guaranteed senior unsecured notes 'CC/RR6'. The Rating Outlook is Stable. RITE AID: S&P Assigns 'B+' Rating to $343 Mil. Senior Loan ---------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B+' issue rating and '1' recovery rating to Harrisburg, Pa.-based Rite Aid Corp.'s proposed $343 million senior secured term loan tranche 5 due 2018. The '1' recovery rating indicates S&P's expectation for very high (90%-100%) recovery in the event of a payment default. According to the company, it will use the proceeds to repay about $321 million in borrowings under its tranche 3 term loan due 2014. "The ratings reflect the difficulties Rite Aid faces in improving its well-below-average operating performance relative to its peers, especially amid intense industry competition," said Standard & Poor's credit analyst Ana Lai. They also reflect the company's significant debt burden and thin cash flow protection measures. RIVER EAST: Secured Creditor Tries to Block Cash Collateral Use --------------------------------------------------------------- Secured creditor LNV Corporation has filed with the U.S. Bankruptcy Court for the Northern District of Illinois a notice of its non-consent to River East Plaza, LLC's use of cash collateral. LNV believes that the bankruptcy case was filed in bad faith, solely for the purpose of delaying LNV's mortgage foreclosure action and without any realistic prospect for a successful reorganization due to, among other things, continuing operating losses, increasing vacancy rates, a distressed commercial real estate market, the Debtor's lack of equity in the property and inability to provide adequate protection to secured creditors and the absence of any realistic avenue for obtaining additional financing and paying secured creditors in full. LNV is represented by Neal, Gerber & Eisenberg LLP. Chicago, Illinois-based River East Plaza, LLC, filed for Chapter 11 bankruptcy protection on February 10, 2011 (Bankr. N.D. Ill. Case No. 11-05141). Michael E. Gosman, Esq., at Whyte Hirschboeck Dudek S.C., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. RIVER EAST: Secured Creditor Wants Ch 11 Bankr. Case Dismissed -------------------------------------------------------------- Secured first mortgage lien creditor LNV Corporation asks the U.S. Bankruptcy Court for the Northern District of Illinois to dismiss River East Plaza, LLC's bankruptcy case or grant LNV relief from automatic stay to pursue the foreclosure sale that was scheduled to occur hours following the Debtor's commencement of the case. According to LNV, the Debtor filed for bankruptcy to "delay a foreclosing secured lender. Other than avoiding foreclosure, the Debtor has no purpose for pursuing this case," LNV says. The Debtor is a single-purpose entity with few employees and creditors and whose assets are fully encumbered by the liens of LNV. "Because the Debtor has no unencumbered assets and no ability to profitably operate its only asset -- a 74% vacant mixed use property -- the Debtor shows no prospect for reorganization. Accordingly, LNV Corp. should not be subjected to additional delay in seeking to foreclose on its collateral when reorganization is unrealistic," LNV states. LNV is represented by Neal, Gerber & Eisenberg LLP. Chicago, Illinois-based River East Plaza, LLC, filed for Chapter 11 bankruptcy protection on February 10, 2011 (Bankr. N.D. Ill. Case No. 11-05141). Michael E. Gosman, Esq., at Whyte Hirschboeck Dudek S.C., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. RIVER EAST PLAZA: Wants Cindy O'Drobinak to Continue as Receiver ---------------------------------------------------------------- Secured creditor LNV Corporation asks the U.S. Bankruptcy Court for the Northern District of Illinois to authorize Cindy O'Drobinak to continue as receiver/custodian of River East Plaza, LLC. LNV obtained a $34.1 million prepetition judgment on account of its secured loan to the Debtor. The Circuit Court of Cook County, Illinois, appointed Ms. O'Drobinak as receiver approximately 22 months ago to manage the Debtor's office, retail, art gallery and residential center and related real property at 401-465 East Illinois Street, more commonly known as River East Plaza, in Chicago, Illinois. The property comprises the only asset of the Debtor. LNV says that turnover shouldn't occur as a perfunctory initial matter, and that is shouldn't occur at any juncture of the case, which LNV claims as a classic example of a debtor seeking the protections of chapter 11 simply to delay a foreclosing secured lender. According to LNV, the Debtor has no unencumbered assets and no ability to profitably operate is only assets. "Turnover would be injurious to the creditors who have benefitted from the services of the Receiver and who were on the verge of becoming the beneficiaries of a foreclosure stale scheduled to occur mere hours after the Debtor filed for bankruptcy protection. Accordingly, the Receiver should not be removed," LNV states. LNV is represented by Neal, Gerber & Eisenberg LLP. Chicago, Illinois-based River East Plaza, LLC, filed for Chapter 11 bankruptcy protection on February 10, 2011 (Bankr. N.D. Ill. Case No. 11-05141). Michael E. Gosman, Esq., at Whyte Hirschboeck Dudek S.C., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. ROBB & STUCKY: Files for Chapter 11 to Sell Business ---------------------------------------------------- Sarasota, Florida-based Robb & Stucky Limited LLLP, doing business as Robb & Stucky Interiors and Fine Design Interiors, filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 11-02801) in Tampa, Florida, on Feb. 18, 2011, to facilitate the sale of its assets as a going concern. The Debtor estimated assets and debts of $50 million to $100 million in its Chapter 11 petition. The Debtor owes $22 million under a senior debt facility provided by Bank of America. The Debtor is also indebted to CIRS Financing, LLC, and CIRS Management, LLC, in the principal amount of $13.5 million pursuant to a series of loans made beginning September of 2009. The Debtor also owes Wachovia Bank, N.A., a total of $6 million pursuant to certain financial accommodations. The Debtor also owes a total of $2.5 million to certain members of management. These debts are secured by most of the Debtor's assets. "At this time, we are focused on charting a path that will lead us into the future," said Dan Lubner, Robb & Stucky's President of the Hospitality Design Division. "We are endeavoring to locate a buyer that will maintain the Company's brand standards, associates team and strong focus on customer needs and service, with minimal impact on operations and stakeholders." The Company has entered chapter 11 seeking the approval of an agency agreement for the sale of its assets, subject to the receipt of higher or better offers, including offers to acquire the company as a going concern. As part of the court process, the Company said that it is required to entertain all potential offers that will maximize value for interested parties, including liquidation bids. The Company said that the difficulties confronting the Company stem from the challenges that have affected many real estate derivative industries since Summer 2007. The home furnishing industry has been among the hardest hit by the significant decrease in consumer spending. Robb & Stucky said that its doors are open as it navigates the sale process, and it has secured commitments for debtor in possession financing that will be used to fund operations pending the transaction. As part of the filing, the Company sought emergency relief from the Court authorizing uninterrupted payment of employee wages and benefits and for the continuation of customer programs. The transaction is being facilitated in the United States Bankruptcy Court Middle District of Florida, Tampa Division. Road to Bankruptcy The Debtor's chief restructuring officer Kevin Regan relates "The Debtor commenced this Chapter 11 case in order to stabilize its operations and to facilitate a sale of its assets or of its enterprise as a going concern for the benefit of its customers, its secured creditors, its employees, its vendors, and its other unsecured creditors. The Debtor will work diligently to file a Chapter 11 plan within the exclusive period in order to minimize fees, preserve the value of its assets, and maximize recovery for its stakeholders." "Robb & Stucky's current liquidity crisis and financial difficulty stems from the events and challenges that have affected many real estate derivative industries since the summer of 2007. The economic downturn that sharply slowed construction of new homes and second home purchases in 2007 and 2008 has been well documented, and has been considered by many economists to be the worst financial crisis since the great depression in 1929," Mr. Regan exlains. From a single-store general merchandise emporium in 1915, the Debtor embarked into an expansion and transformation into an exclusively high-end interior-design driven home furnishings retailer in 1979. It then added locations in Florida, Arizona and other areas. The Debtor purchased Home of Fine Decorators, LLC, in 2006. Doing business as Fine Design, the business was hit by the severe downturn in the Florida housing markets beginning in 2007, and the business was closed in February 2010. After 2007, the Company launched a Hospitality and Resort Division, which provides commercial design services and products to resorts. Since 2007, the Company has experienced significant challenges and has engaged in efforts to restructure and streamline its operations to enhance profitability. Despite the financial challenges and the real estate downturn, the Company has sustained four-wall profit in some of its locations, and the H&R Division has proven to be profitable and is currently growing, Mr. Regan points out. According to Mr. Regan, the industry-wide decline, and in particular the national trend toward declining purchase of high- end furniture goods and use of interior design services, has significantly harmed and adversely impacted the Debtor's business. Beginning in late 2008 and early 2009, the Company began initiatives to lower costs and increase profitability by closing unprofitable stores, and by introducing new products under its own private label where it could control the supply chain, including quality and logistics. The Company, however, remains in financial distress and is currently faced with liquidity constraints, which necessitated the filing of the Chapter 11 case. Sale of Assets The Debtor is pursuing a process to maximize value and returns for all constituencies, whereby the Debtor will seek approval of a form of stalking horse agreement with a joint venture comprised of Hudson Capital Partners, LLC and HYPERRAMS, LLC. The stalking horse agreement seeks approval of the stalking horse as agent for the liquidation of substantially all of the Debtor's assets, subject to higher and better offers at an auction. As part of this process, the Debtor anticipates that some locations will be forced to close, even in the event of a sale as a going concern. The Debtor's exact plan is in flux, based upon negotiations that are occurring and ongoing with potential purchasers and other interested parties. The Debtor has filed "first day" motions, seeking various types of relief, including: (1) the continuation of ordinary course retail sales practices and procedures; (2) the continuation of employee benefits and compensation practices in order to maintain the confidence, morale, and support of Robb & Stucky's outstanding employees, and (3) procedures for the smooth and efficient administration of this case. About Robb & Stucky Robb & Stucky Limited LLLP was founded some 96 years ago in 1915 by Virgil C. Robb & W.R. Lee in Ft. Myers, Florida, as a one-store general merchandise emporium. Over time, the Company has grown to include 24 locations in four states consisting of interior showrooms, patio showrooms, warehouses, and its corporate office. The Debtor has showrooms or warehouses in Florida, Texas, Arizona, North Carolina, and Nevada. Furniture Today, a leading industry publication, has ranked Robb & Stucky as high as 34th in its list of the top 100 Furniture Retailers in the nation. The Company currently has 760 employees. Paul S. Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman P.A., in Miami, Florida, serve as counsel to the Debtor in the Chapter 11 case. The Debtor also tapped FTI Consulting, Inc., as advisor and Kevin Regan as chief restructuring officer to the Debtor. Bayshore Partners, LLC, is the investment banker to the Debtor. AlixPartners, LLP, is the Communications Consultants to Debtor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. ROBB & STUCKY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Robb & Stucky Limited LLLP dba Robb & Stucky Robb & Stucky Interiors Fine Design Interiors, a division of Robb & Stucky Robb & Stucky Patio R&S Home of Fine Decorators Home of Fine Design by Robb & Stucky 7557 S. Tamiami Trail Sarasota, FL 34231 Bankruptcy Case No.: 11-02801 Chapter 11 Petition Date: February 18, 2011 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Judge: Caryl E. Delano Debtor's Counsel: Paul S. Singerman, Esq. Jordi Guso, Esq. BERGER SINGERMAN PA 200 South Biscayne Boulevard, Suite 1000 Miami, FL 33131 Tel: (305) 755-9500 Fax: (305) 714-4340 E-mail: singerman@bergersingerman.com jguso@bergersingerman.com Debtor's Advisor: FTI Consulting, Inc., as advisor and Kevin Regan as chief restructuring officer Debtor's Investment Banker: Bayshore Partners, LLC Debtor's Communications Consultants: AlixPartners, LLP Debtor's Claims and Notice Agent: Epiq Bankruptcy Solutions, LLC Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $50,000,001 to $100,000,000 The petition was signed by Kevin Regan, chief restructuring officer. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ryan Companies US Inc Landlord $1,133,752 50 South Tenth Street, #300 Cedar Rapids, IA 52403 Woodard Supplier $1,130,601 P.O. Box 843731 Dallas, TX 75284 Marge Carson Supplier $1,048,447 9056 E. Garvey Avenue Rosemead, CA 91770 E.J. Victor Inc Supplier $719,319 Department #74 P.O. Box 1070 Charlotte, NC 28201 Lexington Furniture Ind Supplier $656,667 1300 National Highway Thomasville, NC 27360 3300 Finger Mill Road LLC Landlord $621,261 One Tara Boulevard, Suite 403 Nashua, NH 03062 Schnadig International Corp. Supplier $590,367 P.O. Box 890258 Charlotte, NC 28289 Hancock & Moore Supplier $548,388 P.O. Box 890528 Charlotte, NC 28289 John Richard Collection Supplier $538,013 306 Eastman Greenwood, MS 38930 Stanley Furniture Inc. Supplier $477,401 P.O. Box 934225 Atlanta, GA 31193 DMB Circle Road Partners Supplier $461,559 Road Suite 210 7600 E. Doubletree Ranch Scottsdale, AZ 85258 Henredon Furniture Companies Supplier $426,994 P.O. Box 536759 Atlanta, GA 30353 ES Kluft Supplier $407,229 P.O. Box 512580 Los Angeles, CA 90051 Brown Jordan Supplier $383,890 9243 Paysphere Circle Chicago, IL 60674 Coconut Beach Resort Hospitality Deposit $382,882 1500 Alberta Street Key West, FL 33040 National Retail Properties Landlord $378,950 450 S. Orange Avenue, Suite 900 Orlando, FL 32801 Leather Trend Supplier $350,713 Department 0515 Los Angeles, CA 90084 Vanguard Furniture Supplier $350,028 P.O. Box 934707 Atlanta, GA 31193 GECF Business Property Landlord $346,136 P.O. Box 402363 Atlanta, GA 30384 Century Furniture Supplier $330,719 P.O. Box 405607 Atlanta, GA 30384 ROUND TABLE: Wants to Assume Insurance & Premium Financing Deals ---------------------------------------------------------------- Round Table Pizza Inc., et al., ask for authorization from the Northern District of California to assume executory insurance and premium financing agreements. Round Table maintains almost a dozen insurance policies in the operation of their business, including worker's compensation, commercial general liability, property insurance, and directors and officers coverage. The aggregate annual cost for the insurance premiums is approximately $2.3 million, which is financed through these four entities: (a) Flatiron Capital, (b) Fireman's Fund Insurance, (c) Edgewood Partners Insurance Center, and (d) Imperial Credit Corporation. Because of the nature of Round Table's business operations and the value of its assets, it cannot afford to be without the coverage provided by these policies. In addition, cancellation of various insurance coverage would be a default under the credit agreement with Debtors' secured lenders General Electric Capital Corporation and Prudential Insurance of America. "Moreover, if Round Table's worker's compensation coverage lapses, Round Table would be in violation of state law," the Debtors say. "Round Table must have insurance to properly maintain their business operations and comply with its obligations under the Credit Agreement." Based in Concord, California, 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 filed for Chapter 11 bankruptcy protection on Feb. 9, 2011 (Bankr. N.D. Calif. Case No. 11-41431). Judge Roger L. Efremsky presides over the case. Scott H. McNutt, Esq., at McNutt Law Group serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. SALON MEDIA: Posts $724,000 Net Loss in December 31 Quarter ----------------------------------------------------------- Salon Media Group, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $724,000 on $962,000 of revenues for the three months ended December 31, 2010, compared with a net loss of $1.7 million on $1.4 million of revenues for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $1.8 million in total assets, $10.3 million in total liabilities, and a stockholders' deficit of $8.5 million million. As reported in the Troubled Company Reporter on June 29, 2010, Burr Pilger Mayer, Inc., in San Francisco, Calif., expressed substantial doubt about Salon Media Group's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has suffered recurring losses and negative cash flows from operations and has an accumulated deficit of $105.8 million at March 31, 2010. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7384 About Salon Media San Francisco, Calif.-based Salon Media Group (OTC BB: SLNM.OB) -- http://www.Salon.com/-- is an online news and social networking company and an Internet publishing pioneer. SAN LUIS TRUST BANK: Closed; First California Assumes Deposits -------------------------------------------------------------- San Luis Trust Bank, FSB, of San Luis Obispo, Calif., was closed on Friday, February 18, 2011, by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First California Bank of Westlake Village, Calif., to assume all of the deposits of San Luis Trust Bank, FSB. The sole branch of San Luis Trust Bank, FSB, will reopen during normal banking hours as a branch of First California Bank. Depositors of San Luis Trust Bank, FSB, will automatically become depositors of First California Bank. Deposits will continue to be insured by the FDIC. Customers of San Luis Trust Bank, FSB, should continue to use their existing branch until they receive notice from First California Bank that it has completed systems changes to allow other First California Bank branches to process their accounts as well. As of Dec. 31, 2010, San Luis Trust Bank, FSB, had around $332.6 million in total assets and $272.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, First California Bank agreed to purchase essentially all of the assets. The FDIC and First California Bank entered into a loss-share transaction on $241.7 million of San Luis Trust Bank, FSB's assets. First California Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss- share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can call the FDIC toll-free at 1-877-755-6665. Interested parties also can visit the FDIC's Web site at: http://www.fdic.gov/bank/individual/failed/sanluistrust.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $96.1 million. Compared to other alternatives, First California Bank's acquisition was the least costly resolution for the FDIC's DIF. San Luis Trust Bank, FSB, is the twenty-second FDIC-insured institution to fail in the nation this year, and the third in California. The last FDIC-insured institution closed in the state was Charter Oak Bank, Napa, earlier on February 18. SCI REAL ESTATE: Section 341(a) Meeting Scheduled for March 23 -------------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of SCI Real Estate Investments, LLC's creditors on March 23, 2011, at 3:00 p.m. The meeting will be held at Room 2610, 725 S Figueroa Street, Los Angeles, CA 90017. 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. Los Angeles, California-based SCI Real Estate Investments, LLC, filed for Chapter 11 bankruptcy protection on February 11, 2011 (Bankr. C.D. Calif. Case No. 11-15975). Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP, 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. SEAHAWK DRILLING: Shareholders Seek Official Committee ------------------------------------------------------ Dow Jones' DBR Small Cap reports that shareholders of Seahawk Drilling Inc. are optimistic about recovering money if the company's sale to a rival drilling company goes through, prompting them to ask the court for an official voice in the company's Chapter 11 case. According to the report, four company shareholders formally asked a Texas bankruptcy judge to let them form an official committee, which would give them an opportunity to weigh in on the legal proceedings. DBR relaters that so far, their lack of standing has put them at an "informational disadvantage," the group argued in court filings. Seahawk executives said that the $105 million purchase offer from drilling rival Hercules Offshore Inc. would be enough to pay off its creditors, DBR notes. The shareholder group, which includes its largest voting stakeholder, expects that the sale could also "provide a recovery for equity holders" after higher-ranking creditors are paid, the report adds. About Seahawk Drilling Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup rig business in the United States, Gulf of Mexico, and offshore Mexico. It offers rigs and drilling crews on a day rate contractual basis. It filed for Chapter 11 bankruptcy protection on Feb. 11, 2011 (Bankr. S.D. Tex. Case No. 11-20089). Affiliates Seahawk Drilling LLC (Bankr. S.D. Tex. Case No. 11- 20088), Seahawk Drilling, Inc. (Bankr. S.D. Tex. Case No. 11- 20089), Seahawk Mexico Holdings LLC (Bankr. S.D. Tex. Case No. 11- 20090), Seahawk Drilling Management LLC (Bankr. S.D. Tex. Case No. 11-20091), Seahawk Offshore Management LLC (Bankr. S.D. Tex. Case No. 11-20092), Energy Supply International LLC (Bankr. S.D. Tex. Case No. 11-20093), Seahawk Global Holdings LLC (Bankr. S.D. Tex. Case No. 11-20094), and Seahawk Drilling USA LLC (Bankr. S.D. Tex. Case No. 11-20095) filed separate Chapter 11 petitions. Berry D Spears, Esq., and Johnathan Christiaan Bolton, Esq., at Fullbright & Jaworkski L.L.P., serve as the Debtors' bankruptcy counsel. Jordan, Hyden, Womble, Culbreth & Holzer, P.C., serve as the Debtors' co-counsel. Simmons And Company International is the Debtors' transaction advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The Debtors disclosed $504,897,000 in total assets and $124,474,000 in total debts as of the Petition Date. SECURED CALIFORNIA: Section 341(a) Meeting Scheduled for March 23 ----------------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of Secured California Investments, Inc.'s creditors on March 23, 2011, at 3:00 p.m. The meeting will be held at Room 2610, 725 S Figueroa Street, Los Angeles, CA 90017. 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. Los Angeles, California-based Secured California Investments, Inc., filed for Chapter 11 bankruptcy protection on Feb. 11, 2011 (Bankr. C.D. Calif. Case No. 11-15987). Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. SECUREALERT INC: Incurs $2.1 Million Net Loss in Dec. 31 Quarter ---------------------------------------------------------------- SecureAlert, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $2.1 million on $3.7 million of revenues for the three months ended Dec. 31, 2010, compared with a net loss of $5.5 million on $3.2 million of revenues for the same period of the previous fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $11.6 million in total assets, $8.0 million in total liabilities, and stockholders' equity of $3.6 million. As reported in the Troubled Company Reporter on Jan. 5, 2011, Hansen, Barnett & Maxwell, P.C., in Salt Lake City, expressed substantial doubt about SecureAlert's ability to continue as a going concern, following the Company's results for the fiscal year ended September 30, 2010. The independent auditors noted that the Company has incurred losses, negative cash flows from operating activities and has an accumulated deficit. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7382 About SecureAlert Inc. Sandy, Utah-based SecureAlert, Inc. (OTC BB: SCRA) -- http://www.securealert.com/-- is an international provider of electronic monitoring systems, case management and services widely utilized by more than 650 law enforcement agencies worldwide. SMURFIT-STONE: S&P Retains CreditWatch Positive on 'BB-' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Rock- Tenn Co., including the 'BBB' corporate credit rating, remain on CreditWatch, where they were placed with negative implications on Jan. 24, 2011. Concurrently, the ratings on Smurfit-Stone Container Corp., including the 'BB-' corporate credit rating, remain on CreditWatch with positive implications. The CreditWatch listings followed Rock-Tenn's announcement of an agreement to acquire Smurfit-Stone. Under the terms of the agreement, Rock-Tenn is to acquire Smurfit- Stone for approximately $5 billion in announced total purchase consideration, which includes approximately $700 million of Smurfit-Stone's net debt and $700 million of assumed pension liabilities (after-tax). In addition, the aggregate equity consideration, consisting of 50% cash and 50% Rock-Tenn stock, is valued at an announced price of $35 per share of Smurfit-Stone common stock. Rock-Tenn has received a financing commitment of approximately $3.7 billion to fund the transaction. The commitment is structured as a senior credit facility, including a $1.2 billion proposed revolving credit facility, a $1.25 billion proposed term loan A, and a $1.25 billion proposed term loan B. The company also intends to refinance Smurfit-Stone's existing term loan, which had approximately $1.2 billion outstanding on Dec. 31, 2010. Therefore, S&P would expect to withdraw all of Smurfit-Stone's ratings upon completion of the proposed transaction The merger is subject to certain customary conditions, including both companies' stockholder approval, and is expected to be completed in the second quarter of 2011. Rock-Tenn announced that the Federal Trade Commission has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. "Based on S&P's analysis," said Standard & Poor's credit analyst Tobias Crabtree, "S&P has determined that if the acquisition is completed as currently proposed, and market conditions remain in line with its expectations, S&P would likely lower the corporate credit rating on Rock-Tenn to 'BBB-' from 'BBB'." The transaction denotes, in S&P's view, a significant increase in Rock-Tenn's leverage, which was approximately 2.1x for the trailing 12 months ended Dec. 31, 2010. Based on the proposed financing and the recent operating performances of each company, S&P anticipates pro forma adjusted leverage (including pension and operating lease adjustments) for the combined entity would likely remain above 3x for fiscal 2011, a level S&P would consider to be more in line with a lower rating, given S&P's view of the combined entity's satisfactory business risk profile. Nevertheless, the increased leverage and integration risks given the size of the transaction is somewhat mitigated by S&P's view of the proposed combined company's generally good ability to generate cash flow. Based on S&P's anticipated adjusted EBITDA level of at least $1.4 billion for fiscal 2011, S&P would expect the combined entity to be able to modestly repay its debt after consideration to Smurfit-Stone's substantial pension funding needs, capital expenditures of $350 million or more, and dividends. In S&P's view, industry fundamentals for corrugated products and consumer paperboard and packaging products, which account for the majority of the company's sales and EBITDA, should remain favorable over the near term in line with better pricing, high operating rates, and a gradual improvement in overall economic conditions. As a result, S&P expects that the combined entity's fiscal 2011 sales could increase modestly from its pro forma level of about $9.36 billion for the 12 months ended Dec. 31, 2010. S&P anticipates fiscal 2011 adjusted EBITDA for the combined entity could exceed $1.4 billion, based on the company maintaining operating margins (before depreciation and amortization) above 14%. A key risk to S&P's forecast is if operating margins moderate from their recent levels, given its view that higher raw material costs could offset a modest increase in sales. S&P's forecast is highly sensitive to raw material input cost inflation (i.e., fibers, chemicals, and energy), which the company has historically has recouped via price increases. The combined entity would be the second-largest producer of containerboard and coated recycled board in North America with a fiber input mix of approximately 55% virgin fiber and 45% recycled fiber. In resolving the CreditWatch placements, Standard & Poor's will monitor the companies' progress toward closing the transaction, which they anticipate will occur in the second quarter of 2011. If the acquisition is completed as currently proposed, and market conditions remain in line with its expectations, S&P will likely lower Rock-Tenn's corporate credit rating to 'BBB-'. The likely rating outlook is stable. S&P plans to withdraw its ratings on Smurfit-Stone once their rated debt is repaid post-closing of the transaction. In addition, S&P will assess the pro forma capital structure and its possible impact on issue-level ratings. SPA SYDELL: Emerges from Chapter 11 Bankruptcy With New Owner ------------------------------------------------------------- David Markiewicz at The Atlanta Journal-Constitution reports that Spa Sydell has emerged from bankruptcy with a new owner and chief executive officer, Reina Bermudez. According to the report, Ms. Bermudez was brought in to serve as Spa Sydell's chief financial officer in 2007 by former chief executive Richard Harris. Mr. Harris will stay on as a consultant. Sydell Harris will serve as an honorary board member in the company and will still be active in the spas. Spa Sydell filed for Chapter 11 bankruptcy in September 2009, and listed $4.3 million in debts and $5 million in assets. STANFORD INT'L: Owner Sues Prosecutors, FBI Agents, & SEC Lawyers ----------------------------------------------------------------- Julie Triedman at The AM Law Daily reports that Stanford International Bank Limited owner Robert Allen Stanford filed a lawsuit in Houston federal district court against a dozen Federal Bureau of Investigation, Justice Department, and U.S. Securities and Exchange Commission employees, claiming that they have engaged in "abusive law enforcement" against him. Mr. Stanford is seeking US$7.2 billion in damages under the lawsuit, The AM Law Daily relates. Mr. Stanford has tapped Houston attorney Stephen Cochell of The Cochell Law Firm for his lawsuit, according to The AM Law Daily. The report relates that Mr. Stanford's complaint does not name any federal agencies as defendants, but rather targets those employed by the agencies that have spearheaded the cases against him. The AM Law Daily notes that among the individuals sued are: * Stephen Korotosh, who is leading the SEC's civil suit against Mr. Stanford; and * federal prosecutors Paul Pelletier and Gregg Costa, who have leading roles in the criminal case. The 39-page civil complaint claims that the federal government illegally used more than US$51 million of Mr. Stanford's money to fund its investigation, while at the same time rejecting Mr. Stanford's requests for funds to pay for his own defense, The AM Law Daily cites. The AM Law Daily discloses that Mr. Stanford arrived at the US$7.2 billion figure by asserting that he "personally owned assets of approximately US$3.9 billion, all of which has been lost" due to U.S. government actions. As a result of those actions, the report relates, Mr. Stanford claims that he lost the ability to realize profits on those assets. The value of the lost profits is at US$3.2 billion, he added. The AM Law Daily notes that Mr. Stanford has also asserted that the government in its pursuit violated his right against unreasonable search and seizure; his right against cruel and unusual punishment; his right to counsel; and his right to due process. Manhattan criminal defense attorney Douglas Burns said in a separate Bloomberg News report, The AM Law Daily cites, that Mr. Stanford's lawsuit faces some huge obstacles, most notably the fact that agents of the FBI, the SEC, and the Justice Department "are immune for their legitimate conduct in the case." About Stanford International Bank Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On February 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. The U.S. Securities and Exchange Commission, on Feb. 17, 2009, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was also pursued against Mr. Stanford in June 2009 before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money-laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. The criminal case is U.S. v. Stanford, H-09-342 (S.D. Tex.). The civil case is SEC v. Stanford International Bank, 09-cv-00298 (N.D. Tex.). SWADENER INVESTMENT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Swadener Investment Properties, LLC P.O. Box 74170 Tulsa, OK 74170 Bankruptcy Case No.: 11-10322 Chapter 11 Petition Date: February 18, 2011 Court: U.S. Bankruptcy Court Northern District of Oklahoma (Tulsa) Judge: Terrence L. Michael Debtor's Counsel: Scott P. Kirtley, Esq. RIGGS, ABNEY, NEAL, TURPEN, ORBISON 502 West 6th Street Tulsa, OK 74119-1010 Tel: (918) 587-3161 E-mail: skirtleyattorney@riggsabney.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Mark Swadener, managing member. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Pecan Properties, Inc. 11-10323 02/18/11 Swadener Investment's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Triad Bank Operating Line $50,000 7666 East 61st Street Tulsa, OK 74133 Lighting, Inc. Lighting Retro-fit $46,914 P.O. Box 471343 Tulsa, OK 74147 Quest Elevator Elevator Service $40,385 2488 E. 81st Street, Suite 365 Tulsa, OK 74137 Redlee SCS, Inc. Janitorial Services $27,696 Hall, Estill, Hardwick, Gable, Attorney Fees $26,880 Golden & Cowan Landscape Lawn Services $13,252 Bank of America Maintenance Supplies $12,338 Behnken, Ed Subordinated $11,000 Debenture Source One Janitorial Janitorial Services $10,985 Pecan Properties 401K Paychex, Unpaid Employee $7,754 Inc. Contribution America Express Maintenance Supplies $5,017 Able Fire Systems Fire Systems $3,000 Inspections & Repair Home Depot Maintenance Supplies $2,808 Palmer Supply Maintenance Supplies $2,699 Associated Parts Maintenance Supplies $1,866 Glen Stout 401(k) Contribution $1,614 McIntosh, Inc. Maintenance Supplies $1,530 Dell Preferred Account Computer Products $1,517 Johnstone Supply Maintenance Supplies $1,297 Kevin Cline 401(k) Contribution $1,122 TA-COLONIAL: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: TA-Colonial Traditions LLC 90 Office Park Way Pittsford, NY 14534 Bankruptcy Case No.: 11-20270 Chapter 11 Petition Date: February 16, 2011 Court: United States Bankruptcy Court Western District of New York (Rochester) Judge: John C. Ninfo II Debtor's Counsel: Ronald J. Friedman, Esq. SILVERMANACAMPORA LLP 100 Jericho Quadrangle, Suite 300 Jericho, NY 11753 Tel: (516) 479-6300 Fax: (516) 479-6301 E-mail: RFriedman@SilvermanAcampora.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Michael D. Salzman, managing member of SM Traditions LLC. TBS INTERNATIONAL: Regains Compliance with Nasdaq Listing Rules --------------------------------------------------------------- On Feb. 4, 2011, the Nasdaq Stock Market called TBS International plc to notify the Company that its private placement of Series B Preference Shares may have violated Nasdaq's Listing Rules 5635(c) and (d) because Section 6.2(e) of the Company's Certificate of Designation for the Series A and Series B Preference Shares would have allowed the Company to increase voluntarily the conversion rate applicable under the Certificate of Designation, which could have created a situation in which the Series B Preference Shares would convert into 20% or more of the ordinary shares outstanding before the issuance for less than the greater of book or market value of the ordinary shares. On Feb. 7, 2011, the Company amended the Certificate of Designation to delete the substance of Section 6.2(e), and all holders of outstanding Series B Preference Shares, acting by unanimous written consent without a meeting, consented to the amendment. On February 9, 2011, Nasdaq further advised the Company that, as a result of its amendment of the Certificate of Designation, the Company regained compliance with the Listing Rules and Nasdaq had closed this matter. About TBS International plc Dublin, Ireland-based TBS International plc (NASDAQ: TBSI) -- http://www.tbsship.com/-- is a fully-integrated transportation service company that provides worldwide shipping solutions to a diverse client base of industrial shippers. At Sept. 30, 2010, TBS had total assets of US$906.794 million, total debt, including current portion, of US$328.259 million, and shareholders' equity of US$513.154 million. TBS had working capital deficit of US$297.663 million at September 30, 2010. As reported in the Troubled Company Reporter on March 19, 2010, PricewaterhouseCoopers LLP, in New York, 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 believes it will not be in compliance with the financial covenants under its credit facilities during 2010, which under the agreements would make the debt callable. "This has created uncertainty regarding the Company's ability to fulfill its financial commitments as they become due." TBS International in December 2010 disclosed that its various lender groups have agreed to extend the current forbearance period until January 31, 2011. During such period, the lender groups will continue to forbear from exercising their rights and remedies which arise from the Company's failure to make principal payments when due. The Company will not make principal payments due on its financing facilities during the extended forbearance period, but it will continue to pay interest on those facilities at the default interest rate. TOWNSENDS INC: To Sell Assets for $76.3 Million to Two Buyers ------------------------------------------------------------- Townsends, Inc. received final approval from the United States Bankruptcy Court for the District of Delaware to sell substantially all of its assets and transition its operating divisions to Peco Foods, Inc. and Omtron Ltd. The transactions are scheduled to close on Feb. 25, 2011. Peco Foods agreed to acquire Townsends' Arkansas division for $51.4 million and the assumption of certain liabilities. Peco Foods is a fully integrated poultry processing and packaging company with operations in Alabama and Mississippi. Omtron agreed to acquire Townsends' North Carolina division, its corporate headquarters in Georgetown, Delaware and certain other assets for $24.9 million and the assumption of certain liabilities. Omtron is an affiliate of Agroholding Avangard, Ukraine's largest producer of eggs and egg products for domestic and export markets. "We are extremely satisfied with the result we were able to achieve from the auction. After carefully considering the various bids, Townsends' management and Board of Directors determined that selling its Arkansas operating division to Peco Foods and its North Carolina operating division and corporate headquarters to Omtron presented the best scenario available for all of our stakeholders," said Frederick B. Beilstein III, Chief Executive Officer. Townsends is working closely with Peco and Omtron in an effort to ensure a seamless transition for Townsends' customers, suppliers, employees, growers, brokers and others involved with the business. * * * Bankruptcy Law360 reports that Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware on Thursday said he would approve the sale of Townsends Inc.'s assets to two separate buyers for a combined $76.3 million. As reported in the Feb. 1, 2011 edition of the Troubled Company Reporter, Townsends has received approval for bid procedures for an auction process to sell the Company, in whole or in part. The process calls for bids by Feb. 14, 2011, with the auction to follow on Feb. 15, 2011. A hearing to consider approval of the sale is currently scheduled to be held before the Honorable Christopher S. Sontchi, United States Bankruptcy Judge, on Feb. 17, 2011, with, if approved, a closing(s) anticipated very shortly thereafter. About Townsends Inc. Founded in 1891, Townsends Inc. is a third-generation, family- owned poultry company. Headquartered in Georgetown, Delaware, Townsends operates production and processing facilities in Arkansas and North Carolina. Townsends Inc. -- fka Townsend Speciality Foods -- and several affiliates filed for Chapter 11 bankruptcy protection on December 19, 2010 (Bankr. D. Del. Lead Case No. 10-14092). As of December 5, 2010, the Debtors disclosed $131 million in total assets and $127 million in total debts. Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell, serves as the Debtors' bankruptcy counsel. McKenna Long & Aldridge LLP serves as special counsel. Huron Consulting Group's Dalton T. Edgecomb serves as the Debtors' chief restructuring officer. SSG Capital Advisors, LLC, serves as investment banker. Donlin, Recano & Company, Inc., is the Debtors' claims, noticing and balloting agent. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has tapped Lowenstein Sandler PC as its counsel and J.H. Cohn LLP as its financial advisor. TRIAD GUARANTY: Reports $26.8 Million Net Income in Q4 2010 ----------------------------------------------------------- Triad Guaranty Inc. announced in a press release Thursday its results of operations for the quarter and year ended Dec. 31, 2010. The Company reported net income for the quarter ended Dec. 31, 2010, of $26.8 million compared to net income of $54.0 million for the third quarter of 2010 and a net loss of $79.1 million for the fourth quarter of 2009. Total revenues were $48.7 million for the fourth quarter ended Dec. 31, 2010, compared to total revenues of $57.8 million for the corresponding period of 2009. Net income for the year ended Dec. 31, 2010, was $132.1 million (including a $29.6 million gain attributable to the repurchase of long-term debt reported as an extraordinary item) compared to a net loss of $595.6 million for the year ended Dec. 31, 2009. Total revenues were $254.7 million for 2010 compared to total revenues of $237.8 million for 2009. Ken Jones, President and CEO, said, "The same improvements we saw earlier in the year continued into the fourth quarter. We continued to experience a decline in the amount of risk in default that contributed to the sixth consecutive quarter of reserve decreases. Net reserves decreased by $130.0 million during the 2010 fourth quarter, of which approximately 25% of the decrease was attributable to a change in the frequency factors utilized in our reserve assumptions. Persistency, the key driver of our earned premiums, remained at elevated levels compared to historical norms. While there were macro-level improvements in 2010 that benefited our financial position, we remain cautious about the outlook for the U.S. economy in 2011 due to the slow pace of the recovery, lingering high unemployment rates and depressed home prices. Mr. Jones continued, "As a company in run-off, our primary focus remains on the efficient and effective servicing of our insured portfolio, particularly with respect to loss management, in order to maximize our claims-paying ability. While our financial position has improved over the last three quarters, our deficit in assets remains substantial and was $586.2 million at Dec. 31, 2010. We continue to believe that, absent significant positive changes in the economy and the residential real estate market, our existing assets and future premiums may not be sufficient to meet our current and future policyholder obligations." The Company's unaudited balance sheet at Dec. 31, 2010, showed $991.6 million in total assets, $1.578 billion in total liabilities, and a stockholders' deficit of $586.2 million. As reported in the Troubled Company Reporter on March 22, 2010, Ernst & Young LLP, in Atlanta, Ga., expressed substantial doubt about Triad Guaranty Inc.'s ability to continue as a going concern, following the Company's results for the year ended Dec. 31, 2009. The independent auditors noted that the Company is operating the business in run-off under Corrective Orders with the Illinois Department of Insurance and has reported a net loss for the year ended Dec. 31, 2009, and has a stockholders' deficiency in assets at Dec. 31, 2009. A full-text copy of the earnings release is available for free at: http://researcharchives.com/t/s?739d About Triad Guaranty Winston-Salem, N.C-based Triad Guaranty Inc. (OTC BB: TGIC) -- http://www.triadguaranty.com/-- is a holding company that historically provided private mortgage insurance coverage in the United States through its wholly-owned subsidiary, Triad Guaranty Insurance Corporation. TGIC is a nationwide mortgage insurer pursuing a run-off of its existing in-force book of business. TRIBUNE CO: Jewel Food, et al., Want Lift Stay to Pursue Claim -------------------------------------------------------------- Jewel Food Stores, Inc., Albertson's, LLC, New Albertson's, Inc., and Supervalu Inc. jointly seek relief from the automatic stay to pursue their third party claims. Charles J. Brown, III, Esq., at Archer & Greiner, P.C., in Wilmington, Delaware -- cbro@archerlaw.com -- relates that Joan Johnson commenced an action in the Circuit Court for Cook County Illinois Law Division against Jewel Food, et al., alleging, among other things, that she was injured as a result of a trip-and-fall incident that occurred at the Jewel store located at 1202 State Street, in Lemont, Illinois on June 7, 2008. Ms. Johnson alleges in her complaint to have tripped over newspaper packaging material. At or around the time of the alleged occurrence, it was the duty of the Debtors, specifically the Tribune Company, through its duly authorized agents, servants, and employees, to properly package, bundle, distribute and deliver the newspapers so as not to cause injury to anyone, including Ms. Johnson, who was lawfully on Jewel Food, et al.'s premises, Mr. Brown tells Judge Carey. He discloses that Jewel Food, et al., have prepared a third-party complaint against the Debtors. Jewel Food, et al., believe that the Debtors (i) were insured under a commercial liability policy during all times relevant to their third-party claim, and (ii) were also insured under an umbrella insurance policy and additional insurance policies maintained by third-party co-defendant FRG Management, Inc. Mr. Brown contends that permitting Jewel Food, et al., to pursue their third-party claim to its final resolution would be the most efficient manner to liquidate that claim against the Debtors. He adds that Jewel Food, et al., will experience significant hardship if the automatic stay is not modified, since their claim and ultimate recovery against not only Debtors, but all parties, will be unnecessarily delayed. The Court will convene a hearing on March 1, 2011, to consider the request. Objections are due on February 22. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Proposes to Expand Novack and Macey Work ---------------------------------------------------- Tribune Co. and its units submitted with the Bankruptcy Court a supplemental application modifying the scope of the already- authorized employment of Novack and Macey LLP as their special litigation counsel pursuant to Section 327(a) of the Bankruptcy Code, nunc pro tunc to November 22, 2010. The limited purpose of the Application is to permit the Debtors to retain and employ Novack and Macey to represent them as their special litigation counsel in connection with the filing, prosecution, or settlement of three avoidance actions already filed by the Debtors. The Debtors filed or preserved by tolling agreements approximately 220 avoidance actions on or before the December 8, 2010 deadline for commencing those actions. Out of the approximately 94 complaints actually filed by the Debtors, Novack and Macey filed three complaints against third parties with respect to which the Debtors' existing bankruptcy co-counsel, Sidley Austin LLP and Cole, Schotz, Meisel, Forman & Leonard, P.A. did not represent the Debtors out of an abundance of caution due to potential conflicts of interest. The Debtors will continue to pay Novack and Macey for its legal services on an hourly basis in accordance with its ordinary and customary rates. For work performed in 2011, Novack and Macey's billing rates are: Level Rate/Hour ----- --------- Partners $395-$670 Associates $215-$375 Para-professionals $165 The Debtors will continue reimburse Novack and Macey for the expenses it incurred in connection with those services. Stephen Novack, Esq., a partner at Novack and Macey LLP, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Bank Debt Trades at 27% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Tribune Co. is a borrower traded in the secondary market at 73.48 cents-on-the- dollar during the week ended Friday, February 18, 2011, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.43 percentage points from the previous week, The Journal relates. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank loan matures on May 17, 2014. Moody's has withdrawn its rating on the bank debt. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TERRESTAR NETWORKS: Inks 3rd & 4th Amendments to DIP Documents -------------------------------------------------------------- TerreStar Networks Inc. and its units notify parties-in-interest they entered into a third amendment to their DIP Credit, Security & Guaranty Agreement on January 5, 2011, and a subsequent fourth amendment of the same pact on February 3, 2011. The Amendments were entered into among TerreStar Networks Inc. and its debtor affiliates, certain lender parties from time to time, and The Bank of New York Mellon, as administrative agent and collateral agent under the Credit Agreement. The Third DIP Loan Amendment was entered into by the Parties due to a default that occurred under Sections 6.11 and 6.12 of the Credit Agreement with respect to December 31, 2010 and by which, the Loan Parties asked that the Lenders permanently waive the Specified Default. The Lenders have agreed to grant the Requested Waiver and the Loan Parties and the Lender have agreed to amend the Credit Agreement in certain respects. Among the changes in the Third Amendment is the amendment of the definition of Milestone Requirement in Section 1.01, which now reads as: "'Milestone Requirement' shall mean the requirement that the Loan Parties, other than the Non-Subsidiary Guarantors, shall meet the following deadlines; provided however, that in the case of clauses (b), (f) and (g) below, the deadlines shall be met by all Loan Parties (which, for the avoidance of doubt, exclude the Non-Subsidiary Guarantors from and after the Repayment Date): (a) filing an Acceptable Plan by November 5, 2010, (b) filing, jointly with any person required by the FCC or Industry Canada, (i) all necessary applications for approval of the transfers of control over all the FCC Licenses, and the transfer of control over, transfer or assignment of all the Industry Canada Licenses within the terms and conditions thereof, and related authorizations held by any Loan Party that are contemplated by any Acceptable Plan and (ii) all required notifications to the FCC and Industry Canada, in each case by December 23, 2010, (c) receiving Bankruptcy Court approval of a disclosure statement by December 22, 2010, (d) commencement of a hearing by the Bankruptcy Court on confirmation of an Acceptable Plan by March 7, 2011, (e) entry of a final, non-appealable order by the Bankruptcy Court confirming such Acceptable Plan by March 25, 2011, (1) within 7 days after request of the Administrative Agent (acting at the written request of the Required Lenders), with respect to any order of the Bankruptcy Court, a corresponding recognition order, in form and substance reasonably acceptable to the Required Lenders shall have been entered in the Canadian Court, which order shall have become final and non-appealable within twenty-one (21) days after entry of such order by the Canadian Court, and (g) the Final DIP Order and Final Recognition Order shall have become final and non-appealable within 60 and 63 days of the date of the entry of the Interim DIP Order and Initial Recognition Order, respectively." In addition, this sentence is added after the last sentence of Section 2.01: "Notwithstanding any provision of this Agreement to the contrary, the second Subsequent Funding Date shall be January 14, 2011 and the Loan made thereon shall be in an amount not in excess of $2,800,000." The Fourth DIP Loan Amendment was also into by the Parties after a Default under Sections 6.11 and 6.12 of the Credit Agreement occurred with respect to January 31, 2011 and is continuing. The Loan Parties sought and obtained the Lender's agreement to further amend the Credit Agreement and permanently waive the Fourth Specified Default. Among the changes under the Fourth Amendment agreed to by the Parties is the complete change in definition of Agreed Budget in Section 1.01. The Agreed Budget shall mean Exhibit A to the Second Agreed Budget Letter Agreement, dated February 3, 2011, by and between the Borrower and Lender party. A copy of such Agreed Budget, however, has not been made available in the court dockets. Copies of the Third and Fourth Amendments are available for free at http://bankrupt.com/misc/TSN3&4CredAms.pdf About TerreStar Networks Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR) -- http://www.terrestar.com/-- is in the mobile communications business through its ownership of TerreStar Networks, its principal operating subsidiary, and TerreStar Global. TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, majority-owned subsidiaries of Trio 1 and 2 General Partnerships, plans to launch an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. This system build out will be based on an integrated satellite and ground- based technology intended to provide communication service in most hard-to-reach areas and will provide a nationwide interoperable, survivable and critical communications infrastructure. The Company intends to provide multiple communications applications, including voice, data and video services. As of June 30, 2010, the Company had four wholly owned subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar Holdings Inc., and TerreStar New York Inc. Motient Ventures Holding Inc., a wholly owned subsidiary of MVH Holdings Inc., directly holds approximately 89.3% and 86.5% interest in TerreStar Networks and TerreStar Global, respectively. TerreStar Networks Inc. and Its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No. 10-15446). The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not among the Chapter 11 filers. Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq., at Fraser Milner Casgrain LLP and Ira Dizengoff, Esq., Arik Preis, Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP, serve as bankruptcy counsel to the Debtors. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors. FTI Consulting, Inc., is the Committee's financial advisor Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TERRESTAR NETWORKS: Deadline to Decide on Leases Moved to May 17 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has extended the time within which TerreStar Networks, Inc. and its debtor affiliates must assume or reject unexpired non- residential real property leases pursuant to Section 365(d)(4) of the Bankruptcy Code to the earlier of: (i) the date an order is entered confirming a Chapter 11 plan in the Debtors' bankruptcy case, or (ii) an additional 90 days, through and including May 17, 2011. About TerreStar Networks Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR) -- http://www.terrestar.com/-- is in the mobile communications business through its ownership of TerreStar Networks, its principal operating subsidiary, and TerreStar Global. TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, majority-owned subsidiaries of Trio 1 and 2 General Partnerships, plans to launch an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. This system build out will be based on an integrated satellite and ground- based technology intended to provide communication service in most hard-to-reach areas and will provide a nationwide interoperable, survivable and critical communications infrastructure. The Company intends to provide multiple communications applications, including voice, data and video services. As of June 30, 2010, the Company had four wholly owned subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar Holdings Inc., and TerreStar New York Inc. Motient Ventures Holding Inc., a wholly owned subsidiary of MVH Holdings Inc., directly holds approximately 89.3% and 86.5% interest in TerreStar Networks and TerreStar Global, respectively. TerreStar Networks Inc. and Its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No. 10-15446). The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not among the Chapter 11 filers. Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq., at Fraser Milner Casgrain LLP and Ira Dizengoff, Esq., Arik Preis, Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP, serve as bankruptcy counsel to the Debtors. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors. FTI Consulting, Inc., is the Committee's financial advisor Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TERRESTAR NETWORKS: Committee Amends Suit vs. U.S. Bank, N.A. ------------------------------------------------------------- The Official Committee of Unsecured Creditors in TerreStar Networks Inc.'s case amended its complaint against U.S. Bank National Association, as Indenture Trustee and Collateral Agent for the 15.0% Senior Secured Payment-In-Kind Notes due 2014, for the avoidance of certain unperfected liens. The Amended Complaint, dated Feb. 1, 2011, seeks to avoid alleged security interests claimed by U.S. Bank against "other properties" of the Debtors in addition to the TerreStar-2 satellite. The Other Properties include certain intellectual property, an investment property, certain various deposit accounts and fixtures. The Original Complaint mainly sought to avoid an alleged security interest claimed by U.S. Bank in TerreStar Networks Inc.'s assets relating to a ground spare satellite under construction at Space Systems/Loral, Inc., otherwise known as TerreStar-2. U.S. Bank is said to have filed three UCC financing statements between 2007 and 2008 in relation to liens in certain of the Debtors' properties. The 1st UCC statement was filed in February 2007, the 2nd statement in February 2008 and the 3rd statement in March 2008. The Amended Complaint relays more details on the first two UCC statements. On behalf of the Creditors' Committee, David M. Posner, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., in New York, specifies that: -- Any security interest claimed by U.S. Bank in the "Intellectual Property" of any Debtor was unperfected as of the Petition Date as U.S. Bank did not file any intellectual property security agreements with the U.S. Patent and Trademark Office or United States Copyright Office or otherwise perfect its security interest by filing appropriate UCC-1 forms with the relevant State registration authority; -- Upon information and belief, U.S. Bank never took control of the securities evidencing ownership of the "Investment Property," and accordingly never perfected its contemplated security interest in that Property; -- Upon information and belief, U.S. Bank never obtained control of certain of the Debtors' "Deposit Accounts" and those Deposit Accounts were not maintained at U.S. Bank, as required by Section 9-104 and 9-314 of the UCC through a deposit account control agreement and accordingly, never perfected its security interest in those Accounts. The Deposit Accounts include, but are not limited to: * Account Number 704193639 at SunTrust Bank, * Account Number 120920000 at SunTrust Bank, * Account Number 1000052242558 at SunTrust Bank, * Account Number 102025319637 at TD Canada Trust, * Account Number 102027376155 at TD Canada Trust, * Account Number 101-679-9 at Royal Bank of Canada, * Account Number 400-494-1 at Royal Bank of Canada, * Account Number 1000114218869 at SunTrust Bank, and * Account Number 1000114218851 at SunTrust Bank -- The February 2007 Security Agreement among TSN, certain other Debtors and U.S. Bank, as collateral agent for holders of senior secured notes, does not grant U.S. Bank a security interest in the Debtors' "Fixtures." To the extent U.S. Bank purport that the Security Agreement includes a security interest in the Debtors' Fixtures, that interest was unperfected as of the Petition Date. Moreover, Mr. Posner asserts that the outcome of the litigation on U.S. Bank's lien claims in the Debtors' assets could have an impact on whether the Debtors' proposed Plan may be confirmed and thus, the dispute should be decided either prior to, or contemporaneously with, issues related to confirmation of the Plan. Parties Agree on Scheduling Order To promote the efficient and expeditious disposition of the Adversary Complaint, the parties agree on this schedule: * The Plaintiff may serve its Amended Complaint by February 1, 2011. Other parties may seek to intervene in the Complaint by February 2. * The Defendant may serve its answer to the Amended Complaint by February 7, 2011. Subpoenas and other requests on non- parties may also be served on February 7 and the non-parties will have served their responses by February 14. * A pretrial conference in the Adversary Complaint will be conducted on February 16, 2011, and a trial has been set for March 4, 2011. The parties reserve all rights regarding the filing of post-Confirmation Hearing briefs. About TerreStar Networks Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR) -- http://www.terrestar.com/-- is in the mobile communications business through its ownership of TerreStar Networks, its principal operating subsidiary, and TerreStar Global. TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, majority-owned subsidiaries of Trio 1 and 2 General Partnerships, plans to launch an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. This system build out will be based on an integrated satellite and ground- based technology intended to provide communication service in most hard-to-reach areas and will provide a nationwide interoperable, survivable and critical communications infrastructure. The Company intends to provide multiple communications applications, including voice, data and video services. As of June 30, 2010, the Company had four wholly owned subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar Holdings Inc., and TerreStar New York Inc. Motient Ventures Holding Inc., a wholly owned subsidiary of MVH Holdings Inc., directly holds approximately 89.3% and 86.5% interest in TerreStar Networks and TerreStar Global, respectively. TerreStar Networks Inc. and Its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No. 10-15446). The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not among the Chapter 11 filers. Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq., at Fraser Milner Casgrain LLP and Ira Dizengoff, Esq., Arik Preis, Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP, serve as bankruptcy counsel to the Debtors. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors. FTI Consulting, Inc., is the Committee's financial advisor Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TERRESTAR NETWORKS: Cassels, Committee Counsel, Hikes Rates ----------------------------------------------------------- David S. Ward, Esq., a member of Cassels Brock & Blackwell LLP, discloses that as of January 1, 2011, the hourly rates of Cassels Brock's attorneys with primary responsibilities for providing services to the Official Committee of Unsecured Creditors have increased. The new rates are: Attorney Title 2010 Rate New Rate -------- ----- --------- -------- E. Bruce Leonard Partner $815 $855 Stephen Selznick Partner $785 $825 David Ward Partner $680 $730 Michael Casey Associate $315 $350 As reported in the Jan. 28, 2011 edition of the Troubled Company Reporter, the Official Committee of Unsecured Creditors for TerreStar Networks Inc. and its units received the Bankruptcy Court's authority to retain Cassels Brock & Blackwell LLP as its Canadian counsel effective as of Nov. 10, 2010. The professional services that Cassels Brock is contemplated to render to the Committee include, but is not limited to: (a) representing the Committee at hearings in the proceeding commenced in Canada by the Canadian Debtor affiliates under the Companies' Creditors Arrangement Act in Toronto, Ontario and any other related proceedings; (b) reviewing and analyzing all pleadings, orders, statements of operations, schedules, and other legal documents in the Canadian Proceeding or any other proceedings in Canada relating to the Debtors, the Canadian Debtor Affiliates or any of their respective property, assets or businesses; (c) reporting to and advising the Committee and its United States' professional advisors regarding the ramifications of proceedings before the Canadian Court in relation to the Debtors' Chapter 11 cases; (d) advising the Committee and its U.S. Advisors on matters involving Canadian Law and practice and any proposed asset dispositions relevant to the Debtors' Chapter 11 cases; (e) assisting the U.S. Advisors in their analysis of and negotiations with, the Debtors, the Canadian Debtor Affiliates or any third party concerning matters related to, among other things, the disposition of assets and formulating the terms of any plan or plans of reorganization for the Debtors and the Canadian Debtor Affiliates; (f) assisting with the Committee's investigation of the Canadian Debtor Affiliates' assets, liabilities, intercompany loans financial condition and dealings with the Debtors; (g) assisting the Committee and its U.S. Advisors in analyzing the claims of the creditors of the Canadian Debtor Affiliates and the U.S. Debtors; (h) preparing on behalf of the Committee any pleadings, orders, reports and other legal documents as may be necessary in furtherance of the Committee's interest and objectives; (i) assisting and advising the Committee and the U.S. Advisors with respect to any matters that they may request; and (j) performing all other legal services as described by the Committee and its U.S. Advisors, which may be necessary and proper for the Committee to discharge its duties in the Chapter 11 cases. About TerreStar Networks Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR) -- http://www.terrestar.com/-- is in the mobile communications business through its ownership of TerreStar Networks, its principal operating subsidiary, and TerreStar Global. TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, majority-owned subsidiaries of Trio 1 and 2 General Partnerships, plans to launch an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. This system build out will be based on an integrated satellite and ground- based technology intended to provide communication service in most hard-to-reach areas and will provide a nationwide interoperable, survivable and critical communications infrastructure. The Company intends to provide multiple communications applications, including voice, data and video services. As of June 30, 2010, the Company had four wholly owned subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar Holdings Inc., and TerreStar New York Inc. Motient Ventures Holding Inc., a wholly owned subsidiary of MVH Holdings Inc., directly holds approximately 89.3% and 86.5% interest in TerreStar Networks and TerreStar Global, respectively. TerreStar Networks Inc. and Its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No. 10-15446). The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not among the Chapter 11 filers. Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq., at Fraser Milner Casgrain LLP and Ira Dizengoff, Esq., Arik Preis, Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP, serve as bankruptcy counsel to the Debtors. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors. FTI Consulting, Inc., is the Committee's financial advisor Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) UNITED WESTERN: Sues Regulators; Calls Bank Seizure Premature ------------------------------------------------------------- Matthias Rieker, writing for Dow Jones Newswires, reports that United Western Bancorp sued the Office of Thrift Supervision -- the primary regulator of its main subsidiary United Western Bank, which was seized by the OTS on Jan. 21 -- and the Federal Deposit Insurance Corp. -- which sold the bank to Citizens BancShares of Raleigh, N.C. -- in federal court in Washington, D.C., Friday afternoon. Dow Jones reports United Western said its bank's seizure was premature and that it could have survived. The holding company claimed its bank was "economically viable" and called the seizure "arbitrary and capricious." It demanded that the court force the OTS to remove the FDIC as receiver of United Western Bank. According to Dow Jones, United Western said it had its institutional clients' assurance that they wouldn't withdraw their money as long as the bank had private-equity investors standing by to recapitalize the bank, but the OTS stepped in and handed the bank to the FDIC to be auctioned off. United Western also said the investors agreed to stand by until the end of March. According to Dow Jones, United Western Bancorp Chairman Guy Gibson last month said he was surprised by the government's action because the holding company had $149 million in committed funding toward a $200 million capital raising need to meet regulators' requirements. He said at the time that the seizure "will ultimately cause an unnecessary loss to the Deposit Insurance Fund, since our private market solution was near at hand." The seized bank had eight branches, $2 billion in assets and $1.7 billion in deposits. The closure cost the FDIC fund $318 million, the agency said in January. It entered into a loss-sharing agreement with Citizens BancShares. Dow Jones reports a spokesman for Citizens said: "We are aware of the lawsuit. We are not a party to the lawsuit. We continue to service our clients and conduct business as usual." According to Dow Jones, an OTS spokesman said, "The OTS had solid ground for closing United Western. We will vigorously defend the lawsuit." A spokesman for the FDIC declined to comment. Dow Jones notes undoing an auction would be a tricky process. One lawyer likened it to "unscrambling the egg." About United Western Bancorp Denver, Colorado-based United Western Bancorp, Inc. (NASDAQ: UWBK) -- http://www.uwbancorp.com/-- is a holding company whose principal subsidiary, United Western Bank, is a community bank focused on Colorado's Front Range market and selected mountain communities. United Western Bancorp, Inc., and Equi-Mor Holdings, Inc., its direct subsidiary, entered into a Fifth Forbearance and Amendment Agreement with JPMorgan Chase Bank, N.A., on October 29, 2010. The terms of the Fifth Forbearance Agreement provide, among other things, that (i) JPMorgan agrees to forbear from exercising its rights and remedies under the Loan Documents on account of the Fifth Forbearance Disclosed Defaults provided the Company and the Pledgor satisfy all obligations set forth in the Fifth Forbearance Agreement from the Effective Date as defined in the Agreement until the earlier of: (i) the end of business on January 14, 2011; or (ii) the occurrence of a default, other than the Fifth Forbearance Disclosed Defaults, under any of the Loan Documents, the Fifth Forbearance Agreement or any other agreement required to be entered into by the Fifth Forbearance Agreement. The forbearance by JPMorgan is conditioned upon, among other things, the Company entering into an investment agreement with at least two anchor investors on or before October 31, 2010, with the investment agreement providing for the investment by the anchor investors of no less than $91 million and collectively, an investment of approximately $200 million of new money capital in the Company. USG CORP: Brian Kenney Appointed to Board of Directors ------------------------------------------------------ On Feb. 9, 2011, the board of directors of USG Corporation elected Brian A. Kenney, chairman, president and chief executive officer of GATX Corporation, as director of the Corporation for a term expiring at the 2013 annual meeting of stockholders of the Company. Mr. Kenney was also appointed to the Audit and Finance Committees of the Board. Mr. Kenney will be entitled to receive the same compensation for service as a director as is applicable to the Company's other directors. That compensation is comprised of a $160,000 annual retainer payable $80,000 in cash in four equal quarterly installments and $80,000 in shares of the Company's common stock on December 31st. Chairs of Board committees receive an additional cash retainer of $10,000 payable in equal quarterly installments. About USG Corp. USG Corporation, headquartered in Chicago, Illinois, is a leading producer and distributor of building materials in the Unites States, Canada and Mexico. The company manufactures and markets gypsum wallboard and operates a specialty distribution business that sells to professional contractors. It also manufactures ceiling tiles and ceiling grids used primarily in commercial applications. Revenues for the last 12 months through March 31, 2010, totaled approximately $3.1 billion. As of December 31, 2010, the Company's balance sheet showed $4.09 billion in total assets, $3.47 billion in total liabilities and $619 million in stockholders' equity. * * * As reported by the Troubled Company Reporter on Nov. 8, 2010, Moody's Investors Service assigned a B2 rating to USG Corporation's new senior unsecured notes, and affirmed its Caa1 Corporate Family Rating and Caa1 Probability of Default Rating. USG's speculative grade liquidity rating remains SGL-3. The outlook is stable. The Caa1 Corporate Family Rating results from weak operating performance. Low capacity utilization rates of approximately 45% at its gypsum manufacturing facilities make it difficult for USG to overcome its high fixed costs. Moody's projects that potential demand increases for wallboard from North American new home construction and repair and remodeling will not be adequate to generate sufficient volumes and operating profits to cover USG's interest expense over the intermediate term. Furthermore, the non-residential construction end market, which accounts for about 30% of USG's revenues, is expected to face stagnant growth well into 2011. The amount of profits derived from the company's worldwide ceilings business is not enough to make up shortfalls in the gypsum and distribution businesses. For the last twelve months through September 30, 2010, operating margins remain substandard at negative 4.9% and leverage is very high at debt-to- EBITDA of 27.2 times. The company's inability to generate positive earnings will result in very weak credit metrics for the foreseeable future and will require cash to fund operating shortfalls. UTEX COMMUNICATIONS: Court Says Settle Disputes Prior to Plan ------------------------------------------------------------- The Hon. Craig A. Gargotta of the U.S. Bankruptcy Court for the Western District of Texas has restrained UTEX Communications Corp. and all creditors and parties-in-interest from filing a chapter 11 plan until July 22, 2011. The Court denied approval of the disclosure statement explaining the Debtor's proposed plan and concluded that the presentation of a plan must be postponed until all of the litigation pending at the commencement of the case is finally resolved. The Court said that it does not have jurisdiction nor the expertise to resolve disputes relating to tariffs and highly technical contracts with AT&T Texas. The Court also said that in order for the Debtor to confirm a plan, the Court must find that confirmation is not likely to be followed by the liquidation of the Debtor (unless that is the goal of the plan), or the need for further financial reorganization. The Court also granted the Debtor the exclusive right to file a plan within 45 days after the entry of the order reopening the time for filing a plan. The Court added that if the Debtor files a plan within the 45-day period, it will have an additional 45 days after approval of the Disclosure Statement to secure confirmation of its plan. As reported in the Troubled Company Reporter on July 23, 2010, according to the Disclosure Statement, the Debtor anticipates that all classes of claims will be paid in full. However, the resolution of the AT&T claim may not have occurred at the time of Plan confirmation. The outcome of the AT&T dispute will not affect the treatment of allowed claims in Classes 1 through 4. If resolution of the AT&T dispute results in allowance of all, or substantially all, of the AT&T claim, the Debtor's projected cash flows will be inadequate to pay the allowed Class 5 Claims in full within the term of the Plan. For that reason, the Debtor's Plan provides for Alternate Treatment of allowed Class 5 claims and Class 6 Equity Interests in the event the resolution of the AT&T dispute results in less than full payment to General Unsecured Creditors. Additionally, Worldcall, Inc. will contribute additional capital of $60,000. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/UTEXCOMMUNICATIONS_DS.pdf About UTEX Communications Austin, Texas-based UTEX Communications Corp., dba FeatureGroup IP, filed for Chapter 11 bankruptcy protection on March 3, 2010 (Bankr. W.D. Texas Case No. 10-10599). Patricia Baron Tomasco, Esq., at Munch Hardt Kopf & Harr, P.C., and Martinec, Winn, Vickers & McElroy, P.C., represent the Debtor in its restructuring effort. The Company estimated assets at $100 million to $500 million and liabilities at $10 million to $50 million. WARNER MUSIC: Fitch Affirms Issuer Default Rating at 'BB-' ---------------------------------------------------------- Fitch Ratings has affirmed the ratings of Warner Music Group Corp and its subsidiaries: WMG -- IDR at 'BB-'. WMG Holdings Corp. -- IDR at 'BB-'; -- Unsecured notes at 'B'. WMG Acquisition -- IDR at 'BB-'; -- Secured notes at 'BB'; -- Subordinated notes at 'B+'. The Rating Outlook is revised to Negative from Stable. This affirmation and Outlook revision reflect these: -- Disappointing results in the most recent quarter ending Dec. 31, 2010, despite a robust release scheduled that included Kid Rock, Michael Buble, Bruno Mars and T.I. Fitch notes that Green Day and REM are expected to have releases in the spring, which could provide improved operating performance, compared to relatively easier prior year comparisons due to the very light release schedule in 2010. -- Slowing digital revenue performance of the company over the last two years (digital revenue growth has slowed from 7.2% in calendar year 2009 to 6.4% in calendar year 2010). Fitch has changed its assumptions on digital revenue growth, reducing its expectation to 5% from 10%, and has become more cautious regarding WMG's and the industry's ability to grow digital revenues at Fitch's prior expectation (global digital music revenue grew 6% in 2010 according to the IFPI). -- Fitch has also become more concerned regarding the accelerating pace of declines in non-digital revenues (down 8% calendar year 2009 and 16% in calendar year 2010). Fitch believes that non-digital revenues may continue to decline at a 15% rate in the near term (with non-traditional revenues growing as high as 10% and physical sale declines as high as 20%). Fitch had previously stated that the rating could be impacted by physical and digital sale performance, and cash interest coverage below 2.0 times. While Fitch calculates LTM cash interest coverage at 2.2x, Fitch expects this metric to continue to decline and potentially dip below 2.0x over the next 12-18 months. Fitch had previously expected this metric to expand to 2.5x by the fiscal year end 2012. In addition, the previously discussed assumption changes result in Fitch expecting annual FCF, in the near term, to be closer to $100 million rather than $150 million. The Outlook revision reflects Fitch's expectation for the cash interest coverage ratio and the reduced FCF generation. Rating Drivers: -- A rating downgrade may be triggered if the company is unable to maintain cash interest coverage above 2.0x and/or FCF in excess of $100 million on a sustainable basis. -- The ratings may be downgraded if operating performance trends toward or underperforms the assumptions discussed above. -- The Outlook would be stabilized if operating performance exceeds Fitch's expectations, with physical declines moderating and/or digital growth exceeding mid-single digits. Rating Rationale: -- The ratings are supported by WMG's market position as the third largest music distributor/label, with a 20% market share according to Nielsen SoundScan. -- Liquidity is sufficient, as the company generates sufficient cash to support operations and capital expenditures. As of Dec. 31, 2010, WMG had $263 million in consolidated cash and cash equivalents (including $164 million of cash at the parent holding company). There are no maturities until 2014, when approximately $900 million in subordinated debt (including WMG Holdings notes) are due. -- Fitch notes that 60% to 80% of the company's costs are variable / discretionary and the company has been successful in reducing costs to offset revenue declines. Through cost reductions and efficiencies, Fitch calculates WMG's EBITDA margin at 13.8% and Fitch expects margins to remain near this level, despite Fitch projecting total revenue declines in the near term. The company operates in a hit driven cyclical industry in which the timing of artist albums release has a material impact on the operations of the business. -- The industry has been materially impacted by piracy and the secular shift from physical recording sales to digital sales. Fitch believes that the move to Expanded Right Contracts will drive revenue growth at all the major labels and along with growth in digital revenues, provide a meaningful offset to the decline in physical revenues. -- Fitch expects the company to continue to make small acquisitions in the music publishing industry in order to expand its catalogue. Fitch does not expect and the ratings have little to no tolerance for any leveraging acquisitions. As of Dec. 31, 2010, Fitch calculates WMG's gross leverage at approximately 5x. Fitch expects leverage to remain near these levels in 2011. In the event of a downgrade of the IDR into the 'B' category, Fitch would perform a bespoke Recovery Rating analysis. Fitch notes that this recovery analysis may cause a wider dispersion between the issue ratings. WHITTEN PARTNERSHIP: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Whitten Partnership 1839 Rose Street Porterville, CA 93257 Bankruptcy Case No.: 11-11802 Chapter 11 Petition Date: February 17, 2011 Court: U.S. Bankruptcy Court Eastern District of California (Fresno) Judge: W. Richard Lee Debtor's Counsel: Robert H. Brumfield, III, Esq. LAW OFFICES OF ROBERT H. BRUMFIELD, III 1601 F. Street Bakersfield, CA 93301 Tel: (661) 328-9630 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The list of unsecured creditors filed together with its petition does not contain any entry. The petition was signed by Richard Whitten, partner. WINGATE AIRPORT: Section 341(a) Meeting Scheduled for March 17 -------------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of Wingate Airport South, LLC's creditors on March 17, 2011, at 2:00 p.m. The meeting will be held at 300 Las Vegas Boulevard, South, Room 1500, Las Vegas, NV 89101. 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. Las Vegas, Nevada-based Wingate Airport South, LLC, filed for Chapter 11 bankruptcy protection on February 11, 2011 (Bankr. D. Nev. Case No. 11-11950). Neil J. Beller, Esq., Neil J. Beller, Ltd., serves as the Debtor's bankruptcy counsel. According to its schedules, the Debtor disclosed $12,000,000 in total assets and $9,497,529 in total debts as of the Petition Date. ZEIGER CRANE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Zeiger Crane Rental, Inc. 4651 Dyer Boulevard Riviera Beach, FL 33407 Bankruptcy Case No.: 11-14183 Chapter 11 Petition Date: February 18, 2011 Court: U.S. Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Erik P. Kimball Debtor's Counsel: Michael D. Seese, Esq. HILNSHAW & CULBERTSON LLP 1 E. Broward Boulevard, #1010 Fort Lauderdale, FL 33301 Tel: (954) 467-7900 Fax: (954) 467-1024 E-mail: mseese@hinshawlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Steve R. Zeiger, president. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Atlantic Leasing, Inc. 11-14185 02/18/11 Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Exact Crane & Equipment, LLC -- $872,350 4985 Timber Ridge Drive Richfield, OH 44286 Simses & Associates -- $750,000 400 Royal Palm Way, #304 Palm Beach, FL 33480 Kelly Tractor Co.-Parts -- $276,359 P.O. Box 918579 Orlando, FL 32891-8579 GE Capital Solutions -- $198,534 Palmdale Oil Company, Inc. -- $83,230 Kelly Tractor -- $60,645 Ring Power Corporation -- $36,353 Naret Lawn Services -- $33,415 Premium Assignment Corporation -- $30,640 Greenberg Traurig -- $28,943 Consolidated Rigging & Lifting -- $26,074 Cleveland Crane & Shovel Sales -- $22,684 Nextran Truck Center -- $22,042 Holt Cat -- $21,000 William Munshower CPA -- $10,110 Bridgefield Employers Ins. Co. -- $9,913 Neighborhood Health Partnership -- $9,079 Quality Logistics -- $8,710 Boulevard Tire Center -- $8,303 United Healthcare Insurance Co. -- $7,841 * Equifax Report Shows Small Biz Bankrupties Fall 18% in Q4 ----------------------------------------------------------- Katy Stech, writing for The Wall Street Journal, reports that Equifax's latest report on small business bankruptcy filings shows an 18% drop during the fourth quarter of 2010 compared with the same period the year before, marking the sixth quarter in a row that filings fell. According to the Journal, bankruptcy experts and business leaders said they were unsurprised by the decline, pointing to stronger consumer spending and more forgiving borrowing requirements. The Journal, however, notes the promising trends have yet to trickle down to everyday citizens, who are still turning to bankruptcy courts for protection at an elevated pace. The Equifax report shows that in the same year-over-year comparison of filings, consumer bankruptcies hardly registered a fall-less than 1%. According to the Journal, Equifax researchers counted 27,658 U.S. companies that filed to either liquidate or reorganize through bankruptcy during the fourth quarter. They tracked businesses that employ fewer than 100 workers. * 4 Banks Shuttered Friday; Year's Failures Now 22 -------------------------------------------------- Regulators closed on Friday four banks -- Citizens Bank of Effingham, Springfield, Georgia; San Luis Trust Bank, FSB, San Luis Obispo, California; Habersham Bank, Clarkesville, Georgia; and Charter Oak Bank, Napa, California -- and the Federal Deposit Insurance Corp. was named as regulators. This year's failures now total to 22. The Federal Deposit Insurance Corp., as receiver, signed deals for other banks to assume the deposits and take over assets of the four failed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of Marin, Novato, California, to assume all of the deposits of Charter Oak Bank. HeritageBank of the South, Albany, Georgia, agreed to assume all of the deposits of Citizens Bank of Effingham. SCBT National Association, Orangeburg, South Carolina, is assume all of the deposits of Habersham Bank. First California Bank, Westlake Village, California, is taking all of the deposits of San Luis Trust Bank, FSB. Lenders are failing after the financial crisis drove down home and commercial property values and pushed the unemployment rate above 10 percent, according to Bloomberg News. 2011 Failed Banks List The FDIC was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks that agreed to assume the deposits of most of the closed banks. The FDIC also entered into loss-share transactions on assets bought by the banks. For this year, the failed banks are: Loss-Share Transaction Party Assets Bank That Assumed FDIC Cost of Closed Deposits & Bought to Insurance Closed Bank Bank (MM) Certain Assets Fund (MM) ----------- ---------- ----------------- ----------- Citizens Bank $214.3 Heritage Bank $59.4 San Luis Trust $332.6 First California $96.1 Habersham Bank $387.6 SCBT National $90.3 Charter Oak Bank $120.8 Bank of Marin $21.8 Sunshine State $125.5 Premier American $30.0 Badger State Bank $83.8 Royal Bank $17.5 Canyon National $210.9 Pacific Premier Bank $10.0 Peoples State Bank $390.5 First Michigan Bank $87.4 American Trust Bank $238.2 Renasant Bank $71.5 Community First $51.1 Northbrook Bank $11.7 North Georgia Bank $153.2 BankSouth $35.2 First Community Bank $2,310.0 U.S. Bank, N.A. $260.0 FirsTier Bank $781.5 No Acquirer $242.6 Evergreen State $246.5 McFarland State $22.8 The First State Bank $43.5 Bank 7 $20.1 The Bank of Asheville $195.1 First Bank $56.2 CommunitySouth Bank $440.6 Certus Bank $46.3 Enterprise Banking $100.9 [No Acquirer] $39.6 United Western Bank $2,050.0 First-Citizens Bank $312.8 Oglethorpe Bank $230.6 Bank of the Ozarks $80.4 Legacy Bank, Arizona $150.6 Enterprise Bank & Trust $27.9 First Commercial Bank $598.5 First Southern Bank $78.0 In 2010, there were 157 failed banks, compared with 140 in 2009 and just 25 for 2008. A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html 860 Banks Now in FDIC's Problem List The FDIC said in is latest quarterly banking profile that the number of institutions on its "Problem List" rose to 860 as of Sept. 30, 2010 from 829 at June 30, 2010. There were 775 banks on the list at the end of the first quarter. The FDIC, however, pointed out that the total assets of "problem" institutions declined from $403 billion to $379 billion. The number of "problem" institutions is the highest since March 31, 1993, when there were 928. The Deposit Insurance Fund balance -- the net worth of the fund -- was negative $8 billion at the end of the third quarter of 2010 from negative $15.2 billion from June 30, 2010. Chairman Bair said, "The industry has come a long way in cleaning up balance sheets, building capital, and adjusting to changes in financial markets and the economy. But the adjustments are not over, and this is no time for complacency." Problem Institutions Failed Institutions -------------------- ------------------- Year Number Assets (MM) Number Assets (MM) ---- ------ ----------- ------ ----------- 2009 702 $402,800 140 $169,700 2008 252 $159,405 25 $371,945 2007 76 $22,189 3 $2,615 2006 50 $8,265 0 $0 2005 52 $6,607 0 $0 2004 80 $28,250 4 $170 * S&P's 2011 Global Corporate Default Tally Rises to Three ---------------------------------------------------------- U.S.-based Ahern Rentals Inc. missed its scheduled interest payment on its senior secured notes last week, raising the 2011 global corporate default tally to three, said an article published by Standard & Poor's. Two of the defaults were U.S.-based issuers, and one was an issuer based in the Czech Republic, according to the article titled "Global Corporate Default Update (Feb. 11 - 17, 2011) (Premium)." By comparison, 17 global corporate issuers had defaulted by this time last year (14 U.S.-based issuers and one issuer each based in Australia, Bahrain, and Canada). All three of this year's defaulters missed interest or principal payments, which was one of the top reasons for default last year. Of the total defaults in 2010, 28 defaults resulted from missed interest or principal payments, 25 defaults resulted from Chapter 11 and foreign bankruptcy filings, 23 from distressed exchanges, three from receiverships, one from regulatory directives, and one from administration. Standard & Poor's baseline projection for the U.S. corporate trailing 12-month speculative-grade default rate for December 2011 is 1.8%. (A total of 27 issuers would need to default during that period to reach the forecast.) This is another 1.47-percentage-point (or another 45%) decline from 3.27% in December 2010. The rate of decline will remain sharp, but somewhat slower than what we saw in the past 13 months. In S&P's optimistic default rate forecast scenario, the economy and the financial markets improve more than expected. In this scenario, S&P expects the default rate to be 1.3% (22 defaults). On the other hand, if the economic recovery stalls and the financial markets deteriorate -- which is S&P's pessimistic scenario -- it expects the default rate to be 3.5% (52 defaults) by the end of 2011. S&P bases its forecasts on quantitative and qualitative factors, including, but not limited to, Standard & Poor's proprietary default model for the U.S. corporate speculative-grade bond market. S&P's update its outlook for the U.S. issuer-based corporate speculative-grade default rate each quarter after analyzing the latest economic data and expectations. * Centerbridge Partners Nears Third Close for Buyout ---------------------------------------------------- Dow Jones' DBR Small Cap reports that Centerbridge Partners LP is nearing a third close for its second fund focused on buyouts and restructurings that will bring the vehicle closer to its $3.75 billion target, said people familiar with the situation. Centerbridge Partners is a private equity investment firm focused on leveraged buyouts and distressed securities. * NHB Advisors Opens Chicago Office & Adds Three New Professionals ------------------------------------------------------------------ Jack B. Fishman, Esq., Anne B. Miller, Esq., and Cary Hansing have joined NHB Advisors, Inc., as Managing Director, Director, and Senior Consultant respectively. NHB has also opened its Chicago Office. Mr. Fishman, Ms. Miller and Mr. Hansing will be providing a wide range of services to NHB clients, focusing primarily on fiduciary and bankruptcy services. Previously, they collectively served as the senior management team at Novare, Inc., and, most recently, have provided similar services to the bankruptcy, restructuring and reorganization markets through Jack B. Fishman and Associates, P.C. As a team, they have worked on such representative cases as Big V Corporation, Beloit Corporation/Beloit Liquidating Trust, GenTek, Inc., Northwest Airlines, Saint Vincent's Catholic Medical Center, United Airlines, Wickes Furniture and Wickes Lumber. Mr. Fishman will lead NHB's newly established Chicago Office, located in Algonquin, just outside Chicago, and is anticipated to become a Shareholder and Principal of NHB by the end of 2011 upon completion of key milestones. A licensed attorney with an MBA degree, Fishman brings significant experience in all fiduciary and bankruptcy services roles, including Plan Administrator, Liquidating Trustee, Plan Trustee and Receiver and has been responsible for day-to-day and long-term execution of those roles, performing most of those functions both directly or as team leader. Mr. Fishman brings his vast experience with negotiation and drafting of Liquidating Chapter 11 Plans, Trust Agreements, claims reconciliation, preference and avoidance action analysis, settlement and recovery and ancillary wind-down and bankruptcy- related services to NHB's Bankruptcy & Fiduciary Services practice. In addition to Mr. Fishman's bankruptcy services practice, he has extensive experience in healthcare business management, having served as Administrator and General Counsel to Leyden Community Hospital. He has been involved in mediations in bankruptcy in many different settings, has spoken at numerous conferences and written several articles published by the ABI Journal. Mr. Fishman is a former member of the ABI Mid-Atlantic Advisory Board, and has served as the co-editor of the ABI's ADR Committee Newsletter. Ms. Miller has extensive experience in fiduciary services, strategic planning, complex claims reconciliation, mediation, litigating and negotiating avoidance actions and providing litigation support. Most recently, she managed the claims reconciliation process for the St. Vincent's Catholic Medical Center Chapter 11 case, successfully negotiated several avoidance actions and provided trustee and litigation support for several litigation and liquidating trusts. She currently serves as the Chair of the American Bankruptcy Institute's Central States Bankruptcy Workshop Advisory Board and is a member of the International Womens' Insolvency & Restructuring Confederation and the Turnaround Management Association. Ms. Miller received her B.A. and J.D. degrees and a Certificate in Mediation from DePaul University. Among Ms. Miller's many civic involvements, she serves as Chairman of the Board of Directors for Hospice and Palliative Care of Northeastern Illinois, a not-for-profit agency and has been an elected member of her local school board for the last fourteen years, overseeing a $200M budget. Cary Hansing has considerable experience with analytical analyses in claims reconciliation, having handled multi-million dollar and complex preference and avoidance actions, within most circuits across the U.S. Hansing has directed and successfully resolved activities regarding clients' 401(K)/ERISA plans and closing outstanding workers compensation claims, including negotiating with state agencies for bond reductions. In addition to his significant experience processing and reviewing legal documents, research, and assisting in all aspects of client case administration, he is a paralegal and has helped co-author several articles. "We're very honored that Jack, Anne and Cary selected NHB as their home and we're excited about the opportunities to expand NHB's presence in the Greater Chicago area as well as to provide a platform for growth of our fiduciary services practice," said Ted Gavin, CTP, NHB Principal and leader of the firm's Bankruptcy & Fiduciary Services practice. "NHB's Healthcare practice has been involved in landmark engagements, including NHB's present engagement as financial advisor to the Official Committee of Unsecured Creditors in the North General Hospital chapter 11 case in the Southern District of NY. Adding Jack and Anne's considerable expertise in healthcare management expands the depth and reach of our Healthcare Services practice and also extends the reach of our practice group to Greater Chicago area," said Eric Huebscher, a Director of NHB and leader of the firm's Healthcare Services group. NHB Advisors, Inc., is a turnaround and crisis management firm, having been named one of the country's "Outstanding Turnaround Firms" by Turnarounds & Workouts for the last 16 consecutive years. NHB focuses on producing lasting performance improvement, and maximizing the business' value to stakeholders by providing the leadership and credibility required to reconcile the client's objectives, economic reality and available alternatives to establish an achievable goal. NHB professionals have assisted businesses in nearly every industry and provide services for out- of-court turnarounds and workouts, crisis and interim management, sale of businesses, refinancing, recapitalization, and restructuring, litigation consulting and expert testimony, and -- where necessary -- bankruptcy planning and reorganization advisory and management services. NHB's clients have ranged from a few million dollars in sales to nearly $2 billion in revenues and have included both publicly held and privately owned companies. NHB has its headquarters near Philadelphia and has offices in Boston, Greater Chicago, Dallas, Los Angeles, New York, Wilmington, and resident offices for Denver, Florida and Mexico. * BOND PRICING -- For Week From Feb. 14 to 18, 2011 --------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- 155 E TROPICANA 8.750% 4/1/2012 4.659 ADVANTA CAP TR 8.990% 12/17/2026 13.000 AHERN RENTALS 9.250% 8/15/2013 44.100 AMBAC INC 5.950% 12/5/2035 11.250 AMBAC INC 6.150% 2/7/2087 1.000 AMBAC INC 7.500% 5/1/2023 13.250 AMBAC INC 9.500% 2/15/2021 10.750 AMBASSADORS INTL 3.750% 4/15/2027 38.250 AMR CORP 10.450% 3/10/2011 97.554 BANK NEW ENGLAND 8.750% 4/1/1999 11.250 BANK NEW ENGLAND 9.875% 9/15/1999 13.000 BANKUNITED FINL 6.370% 5/17/2012 6.500 BLOCKBUSTER INC 9.000% 9/1/2012 2.100 CAPMARK FINL GRP 5.875% 5/10/2012 46.500 CS FINANCING CO 10.000% 3/15/2012 3.000 DUNE ENERGY INC 10.500% 6/1/2012 71.000 EDDIE BAUER HLDG 5.250% 4/1/2014 5.000 EVERGREEN SOLAR 4.000% 7/15/2013 36.750 FAIRPOINT COMMUN 13.125% 4/1/2018 10.375 FAIRPOINT COMMUN 13.125% 4/2/2018 14.500 FRIEDE GOLDMAN 4.500% 9/15/2004 0.950 GENERAL MOTORS 7.125% 7/15/2013 32.950 GENERAL MOTORS 9.450% 11/1/2011 33.500 GREAT ATLA & PAC 5.125% 6/15/2011 35.125 GREAT ATLA & PAC 6.750% 12/15/2012 36.000 GREAT ATLANTIC 9.125% 12/15/2011 37.000 HARRY & DAVID OP 9.000% 3/1/2013 39.500 HOV-CALL03/11 8.000% 4/1/2012 100.000 LEHMAN BROS HLDG 1.500% 3/23/2012 22.875 LEHMAN BROS HLDG 4.500% 8/3/2011 21.335 LEHMAN BROS HLDG 4.700% 3/6/2013 22.500 LEHMAN BROS HLDG 4.800% 2/27/2013 22.500 LEHMAN BROS HLDG 4.800% 3/13/2014 24.000 LEHMAN BROS HLDG 5.000% 1/22/2013 22.750 LEHMAN BROS HLDG 5.000% 2/11/2013 23.750 LEHMAN BROS HLDG 5.000% 3/27/2013 21.500 LEHMAN BROS HLDG 5.000% 8/5/2015 23.000 LEHMAN BROS HLDG 5.100% 1/28/2013 23.000 LEHMAN BROS HLDG 5.150% 2/4/2015 23.375 LEHMAN BROS HLDG 5.250% 2/6/2012 24.250 LEHMAN BROS HLDG 5.250% 2/11/2015 22.500 LEHMAN BROS HLDG 5.500% 4/4/2016 24.750 LEHMAN BROS HLDG 5.625% 1/24/2013 26.188 LEHMAN BROS HLDG 5.750% 7/18/2011 25.625 LEHMAN BROS HLDG 5.750% 5/17/2013 25.000 LEHMAN BROS HLDG 5.750% 1/3/2017 0.011 LEHMAN BROS HLDG 6.000% 7/19/2012 24.187 LEHMAN BROS HLDG 6.000% 6/26/2015 23.750 LEHMAN BROS HLDG 6.000% 12/18/2015 23.100 LEHMAN BROS HLDG 6.200% 9/26/2014 24.900 LEHMAN BROS HLDG 6.625% 1/18/2012 24.500 LEHMAN BROS HLDG 7.000% 4/16/2019 21.200 LEHMAN BROS HLDG 8.500% 8/1/2015 23.750 LEHMAN BROS HLDG 8.750% 12/21/2021 22.500 LEHMAN BROS HLDG 8.800% 3/1/2015 23.750 LEHMAN BROS HLDG 9.500% 12/28/2022 22.500 LEHMAN BROS HLDG 9.500% 1/30/2023 22.500 LEHMAN BROS HLDG 9.500% 2/27/2023 21.200 LEHMAN BROS HLDG 10.000% 3/13/2023 23.750 LEHMAN BROS HLDG 10.375% 5/24/2024 20.125 LEHMAN BROS HLDG 11.000% 6/22/2022 22.510 LEHMAN BROS HLDG 11.000% 3/17/2028 23.750 LEHMAN BROS HLDG 18.000% 7/14/2023 22.500 LEHMAN BROS INC 7.500% 8/1/2026 15.000 LOCAL INSIGHT 11.000% 12/1/2017 4.000 LTX-CREDENCE 3.500% 5/15/2011 90.000 MAGNA ENTERTAINM 7.250% 12/15/2009 3.000 MAJESTIC STAR 9.750% 1/15/2011 22.250 NEWPAGE CORP 10.000% 5/1/2012 67.000 NEWPAGE CORP 12.000% 5/1/2013 31.763 NRG-CALL02/11 7.250% 2/1/2014 101.250 NRGY-CALL03/11 8.250% 3/1/2016 104.100 RASER TECH INC 8.000% 4/1/2013 35.000 RESTAURANT CO 10.000% 10/1/2013 30.375 RESTAURANT CO 10.000% 10/1/2013 35.000 SAFEGUARD SCIENT 2.625% 3/15/2024 91.554 SBARRO INC 10.375% 2/1/2015 30.000 SPHERIS INC 11.000% 12/15/2012 1.500 THORNBURG MTG 8.000% 5/15/2013 3.530 TIMES MIRROR CO 7.250% 3/1/2013 40.000 TOUSA INC 9.000% 7/1/2010 13.500 TRANS-LUX CORP 8.250% 3/1/2012 18.000 TRICO MARINE 3.000% 1/15/2027 6.143 TRICO MARINE SER 8.125% 2/1/2013 10.250 VIRGIN RIVER CAS 9.000% 1/15/2012 50.000 WASH MUT BANK NV 5.500% 1/15/2013 0.010 WOLVERINE TUBE 15.000% 3/31/2012 36.000 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com 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 ***