/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110228.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 28, 2011, Vol. 15, No. 58 Headlines 524 HOWARD: Section 341(a) Meeting Scheduled for March 22 A-NGAE1 LLC: Amends Proposed Reorganization Plan ACUMENT GLOBAL: S&P Affirms 'B' Corporate Credit Rating AGUADILLA X RAY: Case Summary & 20 Largest Unsecured Creditors AIRTRAN HOLDINGS: FMR LLC Discloses 5.171% Equity Stake AIRTRAN HOLDINGS: Roy Behren, et al., Hold 5.6% Equity Stake ALABAMA AIRCRAFT: Informs Workers of Shutdown on April 15 AMBAC FINANCIAL: Asks for TRO vs. IRS; Mediation Ordered AMBAC FINANCIAL: Lease Decision Deadline Extended to June 6 AMBAC FINANCIAL: Seeks Extension of Bar Date for D&Os AMERICAN NATURAL: Has $5-Mil. Financing Term Sheet for TIGRcub AMR CORP: Capital World Discloses 8.4% Equity Stake AMR CORP: PRIMECAP Management Discloses 12.51% Equity Stake AMR CORP: Sells 860 Common Shares at $6.64 Per Share AMR CORP: The Growth Fund Discloses 5.3% Equity Stake ANGIOTECH PHARMACEUTICALS: CCAA Creditors Meeting on April 4 ANTERO RESOURCES: Moody's Upgrades Corporate Family Rating to 'B2' APPLESEED'S INTERMEDIATE: Court Sets April 1 as Claims Bar Date APPLESEED'S INTERMEDIATE: Plans to Close Nine Retail Stores ARROW TRUCKING: Ex-CEO Files for Bankruptcy; Trustee's Case Stayed ARVINMERITOR INC: FMR LLC Discloses 12.260% Equity Stake ARVINMERITOR INC: Glenhill Advisors Discloses 0.88% Equity Stake ARVINMERITOR INC: Glenview Capital Discloses 4.29% Equity Stake ARVINMERITOR INC: Wellington Management Has 11.37% Equity Stake ARYX THERAPEUTICS: Lars Ekman Appointed to Audit Committee ATLANTIC BROADBAND: S&P Assigns 'B+' Rating to $555 Mil. Loan ATLANTIC SOUTHERN: H. Smisson and D. Moore Resign from Board AURASOUND INC: Errors Found in June-September 2010 Results AURASOUND INC: Reports $1.01MM Net Income in Dec. 31 Qtr. AXION INTERNATIONAL: RBSM Buys JSW, Takes Over as Auditor BEAZER HOMES: Anchorage Capital, et al., Hold 5.6% Equity Stake BEAZER HOMES: FMR LLC Discloses 15.002% Equity Stake BEAZER HOMES: Highbridge, et al., Hold 4.59% Equity Stake BEAZER HOMES: GSO Capital, et al., Disclose 5.2% Equity Stake BERNARD L MADOFF: Mets Owners Delay Fight for Discovery in Case BERNARD L MADOFF: SEC Lawyer's Role Questioned by Lawmakers BIOLASE TECHNOLOGY: To Release Q4 Results on March 10 BLOCKBUSTER INC: Opposes Gibbs Plea to Continue Prepetition Suit BLOCKBUSTER INC: Prentice Capital Equity Stake Down to 0% BLOCKBUSTER INC: Wellington Equity Stake Down to 0% BLUE HERON: To Shut Down; Judge to Decide on Severance's Fate BORDERS GROUP: Creditors Panel Taps Lowenstein Sandler as Counsel BORDERS GROUP: Proposes AP Services as Crisis Managers BORDERS GROUP: Proposes Baker & McKenzie as Corporate Counsel BORDERS GROUP: Proposes Jefferies as Investment Banker BORDERS GROUP: Proposes to Employ Ordinary Course Professionals BROOKSHIRE PLACE: Case Summary & 51 Largest Unsecured Creditors CAESARS ENTERTAINMENT: Units Seek $400-Mil. Loan for Octavius CANAL CORP: Court Sets March 22 as Deadline for Voting on Plan CANNERY CASINO: Moody's Gives Stable Outlook, Keeps 'Caa1' Rating CAPITOL BANCORP: Authorized Common Shares Hiked to 1.52 Billion CAPMARK FINANCIAL: Seeks OK to Sell Loan Assets for US$74.1 Mil. CARBON BEACH: Hearing on DIP Financing Continues to March 10 CB HOLDING: Seeks to Sell Liquor License for $725,000 CELL THERAPEUTICS: To Sell $25-Mil. of Securities to Investor CENTRALIA OUTLETS: Can Hire Perkins Coie as Gen. Bankr. Counsel CHARLES RIVER: Moody's Affirms 'Ba2' Corporate Family Ratings CHARLES RIVER: S&P Assigns Rating to New $150 Mil. Senior Notes CHATSWORTH INDUSTRIAL: April 28 Plan Confirmation Hearing Set CLAIRE'S STORES: Bank Debt Trades at 2% Off in Secondary Market CLASSICSTAR LLC: Bucks Baker Hostetler in Fee Appeal CLEAR CHANNEL: Bank Debt Trades at 8% Off in Secondary Market CLEAR CHANNEL: Extends Maturities of Sr. Credit Facilities CLEAR CHANNEL: Inks Pact to Issue $1-Bil. of 9.0% Guarantee Notes CLINCH MOUNTAIN: Case Summary & 10 Largest Unsecured Creditors COLONIAL BANCGROUP: Court Approves Disclosure Statement CONSOLIDATED HORTICULTURE: Judge Urged to Deny Improper Sale CONTESSA PREMIUM: Proofs of Claim Due By March 25, 2011 CONTESSA PREMIUM: Scouler & Co. Soliciting Bids for Assets CRYOPORT INC: Enters 2nd Round of Private Placement for $4.9MM CUMULUS MEDIA: Bank Debt Trades at 2% Off in Secondary Market DAIRY PRODUCTION: Creditors Angle for Stay Relief DEX MEDIA EAST: Bank Debt Trades at 21% Off in Secondary Market DEX MEDIA WEST: Bank Debt Trades at 8% Off in Secondary Market DFM BENTONVILLE: Case Summary & 15 Largest Unsecured Creditors DISH NETWORK: Reports $984.73 Million Net Income in 2010 DONALD BERKEBILE: Succeeds in Strip Down of Federal Tax Lien DREIER LLP: Preparing to Destroy Clients' Files DYNEGY INC: Nomination for Directors Extended to March 4 E & G CONCRETE: Case Summary & 16 Largest Unsecured Creditors EASTMAN KODAK: Fitch Junks Issuer Default Rating From 'B-' EMPIRE RESORTS: Gets Non-Compliance Notice from NASDAQ EPICEPT CORP: Incurs $15.54 Million Net Loss in 2010 EX CED FOODS: Seeks Chapter 15 Protection in San Francisco EX CED FOODS: Chapter 15 Case Summary FANNIE MAE: Lowers Net Loss to $14.02 Billion in 2010 FORCELOGIX TECHNOLOGIES: Sale of Unit to Callidus Completed FOX HILL: Can Use BWF-FHM LOan Cash Collateral Until March 31 GALLENTHIN REALTY: Court Dismisses Chapter 11 Case GARY PHILLIPS: Court Authorizes Sale of Four Properties GARY PHILLIPS: Has Interim Use of Cash Collateral Until March 18 GEN ART: Debuts Under New Ownership Following Bankruptcy GELTECH SOLUTIONS: Reduces Principal of Reger Debt by $1 Million GENERAL MOTORS: MTech Objects to Claims Estimation at $0 GENERAL MOTORS: U.S. Govt. Supports Priority Order Pacts GENERAL MOTORS: Wants to Remove Actions 'Til Yr. After Plan Nod GLOBAL CROSSING: Incurs $172 Million Net Loss in 2010 GMI ENTERPRISES: Files for Chapter 7 Bankruptcy Protection GOODRICH PETROLEUM: S&P Assigns 'B' Corporate Credit Rating GRAHAM PACKAGING: Reports $81.79-Mil. Net Income in 2010 GREAT ATLANTIC & PACIFIC: Pine Plaza Amends Lift Stay Request GREAT ATLANTIC & PACIFIC: Proposes Hilco as Real Estate Advisor GREAT ATLANTIC & PACIFIC: Proposes PwC as Tax Advisor GTS 900: Corus Plan Confirmed; Plan Declared Effective Feb. 18 GUITAR CENTER: Moody's Affirms 'Caa2' Corporate Family Rating GUITAR CENTER: S&P Affirms 'B-' Corporate Credit Rating HABERSHAM BANCORP: Bank Closed; FDIC Appointed as Receiver HAYES AVENUE: Pleas Court Defers Hearing Over Demolition HEALTHSOUTH CORP: Reports $939.80 Million Net Income in 2010 HEARTLAND AUTOMOTIVE: To Acquire Jiffy Lube Franchisee HERCULES OFFSHORE: Bank Debt Trades at 1% Off in Secondary Market HOLLY CORP: S&P Puts 'BB' Rating on CreditWatch Positive HONOLULU SYMPHONY: Firms, Civic Leaders Aim to Revive Symphony IA GLOBAL: Form 10-Q Filing Delayed; Sees $5MM Revenue in Q3 INVESTCORP BANK: Fitch Affirms 'BB+' Issuer Default Ratings ISTAR FINANCIAL: Incurs $58.86MM Net Loss in Dec. 31 Qtr. ISTAR FINANCIAL: Fitch Expects to Put Low-B Ratings on 2 Tranches ISTAR FINANCIAL: Moody's Puts Low-B Ratings on Credit Facilities J & R INC: Case Summary & 20 Largest Unsecured Creditors JO-ANN STORES: Moody's Assigns 'B2' Corporate Family Rating JO-ANN STORES: S&P Downgrades Corporate Credit Rating to 'B' K-V PHARMACEUTICAL: Completes $32MM Common Stock Offering KNOCK ON WOOD: Case Summary & 20 Largest Unsecured Creditors KOREA LINE: Files for Chapter 15 Protection in Manhattan KOREA LINE: Chapter 15 Case Summary MEMC ELECTRONIC: Moody's Assigns 'B1' Corporate Family Rating LAS VEGAS MONORAIL: Disclosure Statement Hearing Moved to April LENNY DYKSTRA: Bankr. Court Denies "Homestead Exemption" LEVEL 3 COMMS: Thomas Stortz to Retire on April 1 MAGIC BRANDS: Wants Plan Solicitation Period Extended to June 20 MAJESTIC GROUP: Case Summary & 20 Largest Unsecured Creditors MERUELO MADDUX: Seeks to Toss Out a Rival Reorganization Plan MONEYGRAM INT'L: To Terminate Employee Deferral Accounts MONTENAPO: Closes for Second Time Since Debut MPM TECHNOLOGIES: To Sell 100% Shares of MPM Mining to CEO MXENERGY HOLDINGS: Holds Call for Dec. 31 Qtr. Results NO FEAR RETAIL: Files for Chapter 11 in San Diego NO FEAR RETAIL: Case Summary & 20 Largest Unsecured Creditors NORTEL NETWORKS: Gets June 30 Extension of CCAA Stay Period NORTH BAY: Obtains Final Authority to Use BofA Cash Collateral NORTHFIELD INVESTMENTS: Files Plan Outline; March 30 Hearing Set PEANUT CORP: Sen. Leahy Seeks Update on Criminal Probe PHILADELPHIA RITTENHOUSE: Fights to Stay in Chapter 11 Protection POINT BLANK: Seeks Approval of Consent Agreement With SEC QWEST COMMUNICATIONS: 2011 Qwest Management Bonus Plan Approved RADIENT PHARMACEUTICALS: Appoints R. Rooks to Board of Directors RADLAX GATEWAY: Files 2nd Amended Plan; Unsecureds to Get $500,000 RAILAMERICA INC: Repurchase Program Doesn't Move Moody's B1 Rating REAL MEX: CEO and Chairman Rivera to Retire Effective April 1 REFCO INC: Final Hearing on Grant Thornton Settlement Set March 11 REFCO INC: Plan Administator Makes 4th Distribution REFCO INC: Togut Makes Distribution for "Other Allowed Claims" REVEILLE RESOURCES: Has Court's Interim Nod to Use Cash Collateral ROBB & STUCKY: Court OKs Hudson Group-Led Auction on March 7 ROBB & STUCKY: DIP Financing & Cash Collateral Use Has Interim OK ROBB & STUCKY: Has Court's Interim Nod to Pay Critical Vendors ROBB & STUCKY: Section 341(a) Meeting Scheduled for March 21 ROBERT BROWN: Case Summary & 20 Largest Unsecured Creditors S&K REAL: Case Summary & Largest Unsecured Creditor SEAHAWK DRILLING: HSBC, et al., Want Equity Committee Appointment SG RESOURCES: S&P Withdraws 'BB' Rating on Project SHILOH INDUSTRIES: S&P Raises Corporate Credit Rating to 'BB-' SIX FLAGS: S&P Raises Corporate Credit Rating to 'BB-' STRATEGIC AMERICAN: Completes Sale of $85MM Shares for $8.5MM SWADENER INVESTMENT: Section 341(a) Meeting Scheduled for March 30 SWADENER INVESTMENT: Taps Riggs Abney as Bankruptcy Counsel TBS INTERNATIONAL: Takes Delivery of 5th Newbuild Tweendecker TERRESTAR CORP: Sec. 341 Meeting of Creditors Set for March 23 TERRESTAR NETWORKS: Court Approves Key Employee Incentive Plan TERRESTAR NETWORKS: EchoStar Has Transaction With Hughes Corp. TERRESTAR NETWORKS: Proposes Duff & Phelps as Valuation Expert THOMPSON PUBLISHING: TPH Has Until March 21 to File Plan TRIBUNE CO: Bank Debt Trades at 28% Off in Secondary Market TYSON FOODS: S&P Raises Corporate Credit Rating From 'BB+' UNIGENE LABORATORIES: Accelerates Development of Peptide UGP281 UNISYS CORP: Prices 2.25MM Preferred Shares at $100 Per Share UNITED WESTERN: Says OTS, FDIC Seized Bank Absent Valid Grounds UNITED WESTERN: Disowns Thrift Financial Report US MORTGAGE: Former President Sentenced to 14 Years in Prison VALLEY COMMUNITY BANK: Closed; First State Bank Assumes Deposits VIKING SYSTEMS: Incurs $2.44 Million Net Loss in 2010 VITRO SAB: Bondholders' Bid for US Units Bankruptcy Postponed WES CONSULTING: Fyodor Petrenko Elected as Director W.R. GRACE: FMR LLC Holds 9.99% Equity Stake W.R. GRACE: Officers Acquire Grace Shares W.R. GRACE: York, et al., File Notices of Intent to Buy Shares WRIGHT GROUP: Postpetition Receipts Are Not Cash Collateral ZEIGER CRANE: Gets Court OK to Hire Hinshaw as Bankruptcy Counsel ZEIGER CRANE: Section 341(a) Meeting Scheduled for April 8 ZEIGER CRANE: Asks for Court's Permission to Use Cash Collateral * Illinois Bank Shuttered Friday; Year's Failures Now 23 * Moody's: Stress for U.S. Public Finance Sectors Continues * Moody's: Default Wave Fails to Sink Investor Recoveries * S&P's 2011 Global Corporate Default Tally Remains at Three * Former K&L Gates Partner Joins Dykema Gossett * Trust Funds Lose Discovery Round in Asbestos Saga * Turnarounds & Workouts Now Accepting People to Watch Nominations * Lawyer Suspended for Advising Bankrupt Judge to Misspell Name * BOND PRICING -- For Week From Feb. 21 to 25, 2011 ********* 524 HOWARD: Section 341(a) Meeting Scheduled for March 22 --------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of 524 Howard, LLC's creditors on March 22, 2011, at 10:30 a.m. The meeting will be held at the San Francisco U.S. Trustee Off, Office of the U.S. Trustee, 235 Pine Street, Suite 850, San Francisco, California. 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. San Francisco, California-based 524 Howard, LLC, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 11-30594) on Feb. 17, 2011. Reno F.R. Fernandez, Esq., at Macdonald and Assoc., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliate CMR Mortgage Fund, LLC (Bankr. N.D. Calif. Case No. 08- 32220) filed a separate Chapter 11 petition on Nov. 18, 2008. Affiliates CMR Mortgage Fund II, LLC (Bankr. N.D. Calif. Case No. 09-30788) and CMR Mortgage Fund III, LLC (Bankr. N.D. Calif. Case No. 09-30802) filed their Chapter 11 petitions on March 31, 2009. A-NGAE1 LLC: Amends Proposed Reorganization Plan ------------------------------------------------ A-NGAE1, LLC, filed with the U.S. Bankruptcy Court for the District of Nevada amended its proposed plan of reorganization on Feb. 17, 2011. The original plan was filed on July 27, 2009. The Debtor has asked the Court to schedule a date for a combined hearing concerning the adequacy of the disclosure statement and confirmation of the Debtor's amended plan. The Court will consider the Debtor's request during a hearing on March 23, 2011, at 9:30 a.m. Under the amended plan, the old membership units will be cancelled and the Debtor will issue the Class A Membership Interests in the reorganized Debtor to the Debtor's lenders and the Class B Membership Interests in the reorganized Debtor to the Debtor's parent, N.G.A. #2, LLC. The Debtor will adopt a new operating agreement, which will supersede all other operating agreements in respect of the Debtor. The new operating agreement will provide at all times that, upon the sale of the Debtor's property, the proceeds will be paid first to reimburse the makers of the supplemental capital contributions for any amounts contributed plus an 8% annual return; second, to the makers of the additional capital contributions for any amounts contributed plus an 8% annual return; third, until the holders of Class A Membership Interests have received the initial Class A amount of $9.90 million, (a) 90% to the holders of Class A Membership Interests on a pro rata basis, provided that the pro rata distributions of the Class A members will be adjusted so that the makers of the supplemental capital contributions receive an additional 12% annual return at the expense of the Class A members that didn't make an additional capital contribution, and (b) 10% to the Parent; and fourth, 70% to the holders of Class A Membership Interests on a pro rata basis and 30% to the Parent. The Debtor will be managed by LEHM, LLC, which will be established for the purpose of managing the Debtor after the effective date, and the steering committee. The Manager, with the assistance of the developer Focus Investment Group, LLC, will perform all of the pre-development and entitlement work that is necessary and reasonable to prepare the Property for sale and improve the entitlement and master planning status of the Property. The Manager will also market and sell the Property when commercially reasonable, subject to the approval of the Steering Committee and the holders of Class A Membership Interests. A copy of the amended plan is available for free at: http://bankrupt.com/misc/A-ngaE1_amendedPlan.pdf Treatment of Claims Administrative claims will be paid in full in cash. Allowed claims for professional fees will be paid in full in cash. Class 1 - Property Tax Claims are unimpaired and holders will each receive a single full cash payment and all accrued postpetition interest. Class 2 - Note Claims are impaired. These are claims of the Lenders under or in connection with that certain promissory note dated as of July 11, 2006, in the original principal amount of $9.90 million issued by the Parent, and assumed by the Debtor prior to the Petition Date. Holders of these claims will receive their pro rata share of 100% of the Class A Membership Interests. Class 3 - Old Membership Unit claims are impaired. The Old Membership Units will be exchanged for the Class B Membership Interests. Changes to the Plan These provisions in the Original Plan taken out in the Amended Plan: (a) Approval of the plan by lenders holding 51% or more of the total amount of the allowed note claims would be deemed to constitute an action by the lenders to release John A. Ritter, the Guarantor, from all of its obligations under the Guarantee and would be binding upon all Lenders pursuant to the terms of Chapter 645B of the NRS as amended by Section 8 of AB 513; and (b) any judgment obtained before or after the confirmation date in any court other than the bankruptcy court would be null and void as a determination of the liability of the Debtor with respect to any debt treated by the plan. About A-NGAE1, LLC Las Vegas, Nevada-based A-NGAE1, LLC, a Nevada limited liability company, filed for Chapter 11 bankruptcy protection on May 12, 2010 (Bankr. D. Nev. Case No. 10-18719). Georganne W. Bradley, Esq., at Kaempfer Crowell Et Al., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million as of the Petition Date. Affiliates B-SWDE3, LLC (Bankr. D. Nev. Case No. 09-29051), et al., filed separate Chapter 11 petitions. ACUMENT GLOBAL: S&P Affirms 'B' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services said it has affirmed its 'B' corporate credit rating on Sterling Heights, Mich.-based mechanical fastening systems manufacturer Acument Global Technologies Inc. Subsequently, S&P withdrew the rating at the company's request. The outlook was stable at the time of the withdrawal. "The rating affirmation on Acument reflects its vulnerable business risk profile and aggressive financial risk profile," said Standard & Poor's credit analyst Sarah Wyeth. After the 2010 sale of its Avdel and GEC business segments, Acument was left with limited end-market diversity, as it serves primarily the automotive and, to a small extent, aerospace and industrial markets. The highly competitive and cyclical character of the automotive end market combined with below-average profitability limit the company's ability to mitigate adverse business, financial, or economic conditions. Customer concentration is high -- the largest customer represents more than 10% of sales -- and geographic diversity is limited, as the majority of sales are in the U.S. However, recent restructuring activities could support mid- to high-single-digit operating margins. S&P believes U.S. light-vehicle sales will be higher in 2011 than they were in 2010, as the gradual recovery from the moribund levels of 2009 proceeds. Recently, Acument replaced the remaining $75 million revolving facility with a new credit facility consisting of a $55 million asset-based revolving facility and a $25 million term loan, both unrated. Pro forma for the sales of Avdel and GEC, Acument's total adjusted debt to EBITDA was about 3.8x at Sept. 30, 2010. S&P views the company's financial policy as aggressive, as shown by the $100 million dividend the company paid to the sponsor, funded from part of the proceeds of the sale of its Cherry Aerospace business in 2007. The company has new management, which indicates a strategic shift and, in S&P's view, is a risk. Acument is owned by private equity sponsor Platinum Equity (unrated). AGUADILLA X RAY: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Aguadilla X Ray Office & Body Imaging dba Aguadilla Xray Body Img Center PSC P.O. Box 418 Aguadilla, PR 00605 Bankruptcy Case No.: 11-01408 Chapter 11 Petition Date: February 23, 2011 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Antonio Fiol Matta, Esq. 1561 Ave Americo Miranda URB Caparra Terrace San Juan, PR 00921 Tel: (787) 792-4368 Fax: (787) 792-4763 E-mail: afiollaw@gmail.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/prb11-01408.pdf The petition was signed by Dr. Jose E. Rivera Rodriguez, president. AIRTRAN HOLDINGS: FMR LLC Discloses 5.171% Equity Stake ------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, FMR LLC disclosed that it beneficially owns 7,006,000 shares of common stock of AirTran Holdings representing 5.171% of the total shares outstanding. A total of 135,668,598 shares were outstanding as of Jan. 31, 2011. About AirTran Holdings Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE: AAI) -- http://www.airtran.com/-- through its wholly owned subsidiary, AirTran Airways, Inc., operates scheduled airline service throughout the United States and to selected international locations. At Dec. 31, 2010, the Company's balance sheet showed $2.18 billion in total assets, $1.64 billion in total liabilities and $539.36 million in total stockholders' equity. * * * AirTran carries 'Caa1' corporate family and probability of default ratings from Moody's Investors Service. It has 'B-' issuer credit ratings from Standard & Poor's. At the end of September 2010, Moody's said it has placed AirTran's corporate family rating under review for possible upgrade, after the announcement that Southwest Airlines, Inc., has entered into a definitive agreement to acquire 100% of the outstanding common stock of AirTran for cash and common stock totaling $1.4 billion. On Sept. 27, 2010, AirTran announced that it reached an agreement to sell itself to higher-rated Southwest Airlines for cash and Southwest stock. Southwest values the transaction at $3.2 billion including assumed AirTran debt and aircraft leases. Southwest forecasts annual revenue and cost synergies exceeding $400 million once the airlines' operations are combined by 2013. Southwest also sees one-time transaction costs of $300 million to $500 million. The companies indicated that a closing would not occur until sometime in the first half of 2011. "In its view, the combination would weaken Southwest's financial profile, which S&P characterize as intermediate -- the strongest among rated U.S. airlines," said Standard & Poor's credit analyst Philip Baggaley, in September 2010. "Southwest's operating and financial performance has improved in 2010, with EBITDA interest coverage increasing to 4.6x for the 12 months ended June 30, 2010, from 3.6x a year earlier and funds from operations to debt increasing to 20% from 12%. While these are still below appropriate levels for the rating category, S&P expects the improving operating trend to result in increasing levels over the next several quarters. AirTran has substantial operating lease commitments (around $2 billion), since, unlike Southwest, it does not own many of its aircraft. These commitments would be assumed by Southwest, significantly increasing its lease-adjusted debt obligations." AIRTRAN HOLDINGS: Roy Behren, et al., Hold 5.6% Equity Stake ------------------------------------------------------------ In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Roy Behren and his affiliated companies disclosed that they beneficially own 7,559,500 shares of common stock of AirTran Holdings, Inc., representing 5.6% of the total shares outstanding. A total of 135,668,598 shares were outstanding as of Jan. 31, 2011. About AirTran Holdings Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE: AAI) -- http://www.airtran.com/-- through its wholly owned subsidiary, AirTran Airways, Inc., operates scheduled airline service throughout the United States and to selected international locations. At Dec. 31, 2010, the Company's balance sheet showed $2.18 billion in total assets, $1.64 billion in total liabilities and $539.36 million in total stockholders' equity. * * * AirTran carries 'Caa1' corporate family and probability of default ratings from Moody's Investors Service. It has 'B-' issuer credit ratings from Standard & Poor's. At the end of September 2010, Moody's said it has placed AirTran's corporate family rating under review for possible upgrade, after the announcement that Southwest Airlines, Inc., has entered into a definitive agreement to acquire 100% of the outstanding common stock of AirTran for cash and common stock totaling $1.4 billion. On Sept. 27, 2010, AirTran announced that it reached an agreement to sell itself to higher-rated Southwest Airlines for cash and Southwest stock. Southwest values the transaction at $3.2 billion including assumed AirTran debt and aircraft leases. Southwest forecasts annual revenue and cost synergies exceeding $400 million once the airlines' operations are combined by 2013. Southwest also sees one-time transaction costs of $300 million to $500 million. The companies indicated that a closing would not occur until sometime in the first half of 2011. "In its view, the combination would weaken Southwest's financial profile, which S&P characterize as intermediate -- the strongest among rated U.S. airlines," said Standard & Poor's credit analyst Philip Baggaley, in September 2010. "Southwest's operating and financial performance has improved in 2010, with EBITDA interest coverage increasing to 4.6x for the 12 months ended June 30, 2010, from 3.6x a year earlier and funds from operations to debt increasing to 20% from 12%. While these are still below appropriate levels for the rating category, S&P expects the improving operating trend to result in increasing levels over the next several quarters. AirTran has substantial operating lease commitments (around $2 billion), since, unlike Southwest, it does not own many of its aircraft. These commitments would be assumed by Southwest, significantly increasing its lease-adjusted debt obligations." ALABAMA AIRCRAFT: Informs Workers of Shutdown on April 15 --------------------------------------------------------- Russell Hubbard at The Birmingham News reports that Alabama Aircraft Industries Inc., formerly known as Pemco Aeroplex, said a mass layoff notice has been filed with the United Auto Workers, the union representing most of its workers. The move is a precautionary measure to comply with employment laws, Birmingham News quotes Alabama Aircraft Vice President Doris Sewell as stating. According to the report, Alabama Aircraft told its 326 employees that operations might cease by April 15, 2011. "On Feb. 11, the debtor's management sent a letter to the president of the UAW Local 1155 notifying the UAW of the likely cessation of the debtor's operations by April 15, 2011, absent the termination of the debtor's obligations under the pension plan," Alabama Aircraft said in papers filed with the bankruptcy court. About Alabama Aircraft Alabama Aircraft Industries Inc. -- http://www.alabamaaircraft.com/-- provides aircraft maintenance and modification services for the U.S. government and military customers. Its 190-acre facility, including its corporate offices, is located at the Birmingham International Airport in Birmingham, Alabama. The Company currently has 92 salaried employees and 234 hourly employees. About 251 hourly employees were furloughed since Jan. 1, 2010. Alabama Aircraft Industries, Inc., filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-10452) on Feb. 15, 2011. Two subsidiaries also filed -- Alabama Aircraft Industries, Inc.- Birmingham (Case No. 11-10453) and Pemco Aircraft Engineering Services, Inc. (Case No. 11-10454). Joel A. Waite, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. Alabama Aircraft estimated assets and debts of $1 million to $10 million as of the Chapter 11 filing. AMBAC FINANCIAL: Asks for TRO vs. IRS; Mediation Ordered -------------------------------------------------------- Ambac Financial Group, Inc., asked Judge Shelley Chapman of the U.S. Bankruptcy Court for the Southern District of New York to: (i) enforce the stipulated Temporary Restraining Order approved by the Bankruptcy Court on November 9, 2010 and direct the U.S. Internal Revenue Service to dismiss the complaint it filed in the U.S. District Court for the Western District of Wisconsin; and (ii) enjoin the IRS from further action in violation of the Injunction Order, including commencing or prosecuting any actions, claims, lawsuits or other formal legal proceedings with respect to the Debtor without proper notice. The stipulated Injunction Order provides that the IRS agreed to provide the Debtor with a five-day notice before taking any action that violates the "state court injunction," whether or not it is in effect. The state court injunction refers to the injunction orders entered by Judge William D. Johnston of the Wisconsin State Circuit Court for Dane County as the judge overseeing the rehabilitation proceedings of segregated accounts of Ambac Assurance Corporation. The State Injunction Order provides that the IRS is enjoined from commencing any action against AAC "in respect of the Segregated Account or . . . disputed contingent liabilities allocated to the Segregated Account." The IRS's potential claim against AAC concerning tax liability for 2007 and 2008 is one of the "disputed contingent liabilities allocated to the Segregated Account." However, the IRS filed an action on Feb. 9, 2011, against AAC and certain other defendants in the U.S. District Court for the Western District of Wisconsin, seeking to enjoin the Dane County Circuit Court from enforcing the State Court Injunction issued on Nov. 8, 2010. The Debtor revealed that the IRS did not provide any notice of its intention to file the District Court Action. On behalf of the Debtor, Peter A. Ivanick, Esq., at Dewey & LeBoeuf LLP, in New York, added that no notice was provided to the Bankruptcy Court either. Accordingly, the IRS violated the stipulated Injunction Order as the Injunction Order is absolutely clear and unambiguous in prohibiting the IRS from commencing any action against AAC with respect to the Segregated Account, Mr. Ivanick asserted. The IRS, he contended, has willfully ignored the notice provision of the Injunction Order and has acted as if the Bankruptcy Court had never made an order of that kind. Suit Filing Does Not Violate Injunction, IRS Asserts The IRS maintained that it did not violate the stipulated terms of the Injunction Order when it filed the District Court Action. U.S. attorney and counsel to the IRS, Daniel P. Filor, Esq., clarified that the IRS never agreed to provide notice to the Debtor before challenging the State Court Injunction's validity. The Debtor's argument to the contrary ignores the agreed language of the Injunction Order, which both sides stipulated included only "enforcement actions," and the events leading up to it, he pointed out. The Debtor's stated purpose for seeking the TRO was to provide it with notice before the IRS took an administrative collection action to recover a $700 million in tax refunds so that it could presumably seek judicial review before the IRS could take unilateral action, Mr. Filor contended, on behalf of the IRS. Thus, he averred, the terms of the Injunction Order are limited to "enforcement actions," which are defined as "asserting liens against and levying upon the assets of [the Debtor's subsidiaries]." Against this backdrop, the filing of the District Court Action does not violate the Injunction Order because it is not an administrative action by the IRS, and because the judicial action does not seek the recovery of the tax refunds, Mr. Filor reasoned. Moreover, for two months the parties have been litigating the validity of the State Court Injunction -- the same issue that is the subject of the new federal lawsuit -- and Debtor has never claimed the ongoing litigation violated the Injunction Order, Mr. Filor pointed out. Because the IRS was not required to give the Debtor notice before commencing its judicial action against a non-debtor subsidiary in federal court, the Debtor's Motion should be denied, the IRS urged the Bankruptcy Court. In furtherance of the IRS' Objection, Ellen London, Esq. -- Ellen.London@usdoj.gov -- assistant U.S. Attorney and counsel to the IRS, filed with the Bankruptcy Court a declaration appending as exhibits copies of (i) the Debtor's Nov. 8, 2010 Motion for Temporary Restraining Order; (ii) David Wallis's declaration in support of the Debtor's request for declaratory judgment and injunctive relief; (iii) transcript of hearing held on Nov. 9, 2010; (iv) the IRS's complaint dated Feb. 9, 2011, filed with the District Court; and (v) the State Court Injunction issue on Nov. 8, 2010. Full-text copies of the exhibits are available for free at http://bankrupt.com/misc/Ambac_LondonExhibits.pdf Ms. London disclosed that subsequent to the Nov. 9 hearing, the IRS implemented litigation freeze codes for the relevant subsidiaries of the Debtor in compliance with the Injunction Order. Order to Show Cause In furtherance of the Debtor's Motion to Enforce the Injunction Order, Lawrence M. Hill, Esq., a partner at Dewey & LeBoeuf LLP, explained that the IRS sought an emergency hearing on its preliminary injunction motion filed with the District Court. The District Court ordered opposition papers to be filed Feb. 15. The Debtor thus filed an order to show cause and sought an expedited hearing in the hopes that the Bankruptcy Court may rule before the hearing in the District Court. Judge Chapman signed the order to show cause to enforce the Injunction Order. The Bankruptcy Court scheduled the Motion to Enforce Injunction Order for hearing last Feb. 18, 2011. * * * At the February 18 hearing, Judge Chapman directed AFG and the IRS to mediate regarding the adversary proceeding, Bloomberg News reported. The ruling comes as the District Court dismissed the lawsuit filed by the IRS against AAC and certain other defendants, Bloomberg said. The IRS recently took an appeal from the District Court ruling. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Case No. 10-15973) on November 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed $30.05 billion in total assets, $31.47 billion in total liabilities, and a $1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of ($394.5 million) and total liabilities of $1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about $1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AMBAC FINANCIAL: Lease Decision Deadline Extended to June 6 ----------------------------------------------------------- Judge Shelley Chapman extended Ambac Financial Group, Inc.'s time to assume or reject certain unexpired leases through and including June 6, 2011. The unexpired leases subject to the Court's order are: * A lease for a property located at One Street Plaza, New York 10004 between the Debtor and One State Street LLC; and * A lease for a property located at 701 Grant Avenue, Lake Katrine, New York 12449 between the Debtor and Newmark Knight Frank. To the extent a lease for office space located at 7545 Irvine Center Drive, in Irvine, California, did not expire according to its terms on Dec. 31, 2010, the Irvine Lease will be deemed rejected as of the date of the Lease Decision Motion, provided that nothing in the Court's order will be construed as an admission that the lease is an executory contract or unexpired lease within the meaning of Section 365 of the Bankruptcy Code, Judge Chapman ruled. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Case No. 10-15973) on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed $30.05 billion in total assets, $31.47 billion in total liabilities, and a $1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of ($394.5 million) and total liabilities of $1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about $1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AMBAC FINANCIAL: Seeks Extension of Bar Date for D&Os ----------------------------------------------------- Ambac Financial Group, Inc., filed with the U.S. Bankruptcy Court for the Southern District of New York a proposed order extending the deadline for certain of its former officers and directors to file claims in its Chapter 11 case. Pursuant to the Bar Date Order, any person or entity that has a claim against the Debtor that arose on or prior to Nov. 8, 2010, other than certain specified exclusions, including with respect to an Exempt Party, is required to submit a written proof of claim on or prior to March 2, 2011. Exempt Parties refer to certain persons or entities that are not required to submit a Proof of Claim on or prior to the Claims Bar Date, including any current officer or director who has a claim for indemnification, contribution, or reimbursement. Certain of the Debtor's former officers or directors have been named as defendants in one or more of these actions: (i) Two securities class actions pending in the U.S. District Court for the Southern District of New York, entitled In re Ambac Financial Group, Inc. Securities Litigation, No. 08-cv-411-NRB (S.D.N.Y.) and Tolin v. Ambac Financial Group, Inc., No. 08-cv-11241-CM (S.D.N.Y.) (ii) Three derivative actions pending in the U.S. District Court for the Southern District of New York, the Delaware Court of Chancery, and the Supreme Court of the State of New York, New York County, entitled In re Ambac Financial Group, Inc. Derivative Litigation, No. 08-cv-854-SHS (S.D.N.Y.), In re Ambac Financial Group, Inc. Shareholder Derivative Litigation, Cons. C.A. No. 3521-VCL (Del. Ch.), and In re Ambac Financial Group, Inc. Shareholders Derivative Litigation, Cons. Index No. 650050/2008E (N.Y. Sup.) (iii) An ERISA class action pending in the U.S. District Court for the Southern District of New York, entitled Veera v. Ambac Plan Administrative Committee, et al., No. 10-cv- 4191-HB (S.D.N.Y.) (iv) An individual securities action pending in the U.S. District Court for the Southern District of New York, entitled Ehrenreich v. Ambac Financial Group, Inc., No. 09-cv-10173-BSJ (S.D.N.Y.) The Former Officers or Directors are defendants in one or more of the Actions. They are Robert J. Genader; Sean T. Leonard; John W. Uhlein III; Gregg L. Bienstock; Thomas J. Gandolfo; Robert G. Shoback; Philip B. Lassiter; Kathleen A. McDonough; W. Grant Gregory; Douglas C. Renfield-Miller; Timothy J. Stevens and William T. McKinnon. The Former Officers or Directors may have contingent or unliquidated claims against the Debtor for indemnification, contribution, or reimbursement pursuant to the Debtor's Amended and Restated Certificate of Incorporation, dated July 10, 1997, the Debtor's By-Laws, as amended on Oct. 21, 2008, Delaware law, or otherwise. Peter A. Ivanick, Esq., at Dewey & LeBoeuf LLP, in New York, asserts that if the proposed extension is not granted, each of the Former Officers would likely submit a proof of claim in an unliquidated amount on or prior to the Claims Bar Date, thus requiring the Debtor to incur the time and expense of estimating those claims for the purposes of voting on a plan of reorganization and making distributions under the plan, which may prove unnecessary depending upon the outcome of pending litigation. Accordingly, the Debtor asks the Bankruptcy Court to extend the Claims Bar Date to July 2, 2011, solely with respect to any claim to be asserted by any of its Former Officers for indemnification, contribution, or reimbursement. The Debtor proposes that the Claims Bar Date may be further extended with respect to any claim by any of the Former Officers at the discretion of the Debtor and without further notice or order of the Bankruptcy Court. The Bankruptcy Court will consider the Debtor's request on March 1, 2011. Objections are due no later than Feb. 25. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Case No. 10-15973) on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed $30.05 billion in total assets, $31.47 billion in total liabilities, and a $1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of ($394.5 million) and total liabilities of $1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about $1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN NATURAL: Has $5-Mil. Financing Term Sheet for TIGRcub -------------------------------------------------------------- American Natural Energy Corporation has signed a non-binding Term Sheet with a group of institutional investors. Proceeds of the financing are to be used for the drilling and completion of wells included in ANEC's inventory of Proved Undeveloped reserves. ANEC's PUDs include 7 locations on its Bayou Couba project in St. Charles Parish, Louisiana with potential reserves of 1.4 million barrels of oil. ANEC will raise a total amount of US$5 million, before fees and expenses through the issuance of Top-line Income Generation Rights Certificate. The TIGRcub(R) Security will provide for a monetary production payment equal to 45% of revenues for a period of 84 months generated by the Initial Investment Wells. The aggregate monetary production payments during the 84 month period are required to be at least US$6.1 million, and if less, require a make whole payment at the end of the term. The obligations under the TIGRcub(R) Security will be secured by a first priority, perfected security interest and mortgage in the Initial Investment Wells. The investors will also have the right of first refusal on a subsequent investment in TIGRcub(R) Securities in amounts not less than $5 million with participation terms and investment wells to be determined. Warrants, expiring in five years and exercisable into common shares, will also be issued with the funding for a number of shares equal to the quotient of 15% of the initial investment amount divided by the strike price equal to 120% of the volume- weighted average price of the common stock over the 5 days prior to closing. Completion of the funding under the Term Sheet is subject to completion of definitive documentation. TIGRcub(R) Security is a registered trademark of Entrex, Inc., Chicago, Illinois. About American Natural American Natural Energy Corporation (TSX Venture: ANR.U) is a Tulsa, Oklahoma-based independent exploration and production company with operations in St. Charles Parish, Louisiana. The Company's balance sheet at Sept. 30, 2010, showed $17.74 million in total assets, $9.42 million in total liabilities, and stockholders' equity of $8.32 million. * * * MaloneBailey, LLP, in Houston, after auditing the Company's 2009 results, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has substantial cash used for operating activities during 2009, has a working capital deficiency and an accumulated deficit at Dec. 31, 2009. AMR CORP: Capital World Discloses 8.4% Equity Stake --------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Capital World Investors disclosed that it beneficially owns 28,117,172 shares of common stock of AMR Corporation representing 8.4% of the total shares outstanding. As of Feb. 9, 2011, 333,435,431 shares of the Company's common stock were outstanding. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. As of Dec. 31, 2009, American provided scheduled jet service to approximately 160 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. The Company's balance sheet at Dec. 31, 2010, showed $25.09 billion in total assets, $29.03 billion in total liabilities and a $3.94 billion stockholders' deficit. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. * * * AMR carries a 'CCC' issuer default rating from Fitch Ratings. It has 'Caa1' corporate family and probability of default ratings from Moody's. It has 'B-' corporate credit rating from Standard & Poor's. In November 2010, Standard & Poor's Ratings Services revised its outlook on AMR Corp. and its major operating subsidiary, American Airlines Inc., to stable from negative, based on AMR's improved operating performance, which has bolstered credit quality. S&P also affirmed its 'B-' corporate credit rating and most issue ratings on the two companies and lowered selected ratings on American's enhanced equipment trust certificates. AMR CORP: PRIMECAP Management Discloses 12.51% Equity Stake ----------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, PRIMECAP Management Company disclosed that it beneficially owns 41,680,663 shares of common stock of AMR Corp. representing 12.51% of the total shares outstanding. As of Feb. 9, 2011, a total of 333,435,431 shares of the Company's common stock were outstanding. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. As of Dec. 31, 2009, American provided scheduled jet service to approximately 160 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. The Company's balance sheet at Dec. 31, 2010, showed $25.09 billion in total assets, $29.03 billion in total liabilities and a $3.94 billion stockholders' deficit. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. * * * AMR carries a 'CCC' issuer default rating from Fitch Ratings. It has 'Caa1' corporate family and probability of default ratings from Moody's. It has 'B-' corporate credit rating from Standard & Poor's. In November 2010, Standard & Poor's Ratings Services revised its outlook on AMR Corp. and its major operating subsidiary, American Airlines Inc., to stable from negative, based on AMR's improved operating performance, which has bolstered credit quality. S&P also affirmed its 'B-' corporate credit rating and most issue ratings on the two companies and lowered selected ratings on American's enhanced equipment trust certificates. AMR CORP: Sells 860 Common Shares at $6.64 Per Share ---------------------------------------------------- In a Form 5 filing with the U.S. Securities and Exchange Commission, Robert W. Reding, executive VP Operations at AMR Corp, disclosed that he disposed of 860 shares of common stock of the Company on Sept. 20, 2010 at $6.64 per share. At the end of the transaction, Mr. Reding beneficially owned 697,372 shares. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. As of Dec. 31, 2009, American provided scheduled jet service to approximately 160 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. The Company's balance sheet at Dec. 31, 2010, showed $25.09 billion in total assets, $29.03 billion in total liabilities and a $3.94 billion stockholders' deficit. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. * * * AMR carries a 'CCC' issuer default rating from Fitch Ratings. It has 'Caa1' corporate family and probability of default ratings from Moody's. It has 'B-' corporate credit rating from Standard & Poor's. In November 2010, Standard & Poor's Ratings Services revised its outlook on AMR Corp. and its major operating subsidiary, American Airlines Inc., to stable from negative, based on AMR's improved operating performance, which has bolstered credit quality. S&P also affirmed its 'B-' corporate credit rating and most issue ratings on the two companies and lowered selected ratings on American's enhanced equipment trust certificates. AMR CORP: The Growth Fund Discloses 5.3% Equity Stake ----------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, The Growth Fund of America, Inc. disclosed that it beneficially owns 17,758,081 shares of common stock of AMR Corporation representing 5.3% of the total shares outstanding. As of Feb. 9, 2011, a total of 333,435,431 shares of the Company's common stock were outstanding. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. As of Dec. 31, 2009, American provided scheduled jet service to approximately 160 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. The Company's balance sheet at Dec. 31, 2010, showed $25.09 billion in total assets, $29.03 billion in total liabilities and a $3.94 billion stockholders' deficit. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. * * * AMR carries a 'CCC' issuer default rating from Fitch Ratings. It has 'Caa1' corporate family and probability of default ratings from Moody's. It has 'B-' corporate credit rating from Standard & Poor's. In November 2010, Standard & Poor's Ratings Services revised its outlook on AMR Corp. and its major operating subsidiary, American Airlines Inc., to stable from negative, based on AMR's improved operating performance, which has bolstered credit quality. S&P also affirmed its 'B-' corporate credit rating and most issue ratings on the two companies and lowered selected ratings on American's enhanced equipment trust certificates. ANGIOTECH PHARMACEUTICALS: CCAA Creditors Meeting on April 4 ------------------------------------------------------------ A meeting of creditors affected by the Companies' Creditors Arrangement Act proceeding involving Angiotech Pharmaceuticals, Inc., and its affiliates is scheduled for 2:00 p.m. on Apr. 4, 2011, at the offices of Fasken Martineau DuMoulin LLP in Vancouver, B.C., to consider the consolidated plan of compromise or arrangement proposed by the company. If creditors approve the plan, the company intends to as the Supreme Court of British Columbia to sanction the plan on or about Apr. 6, 2011. Copies of relevant documents are available at http://www.alvarezandmarsal.com/angiotech/from Alvarez & Marsal Canada Inc., which serves as the Court-appointed Monitor. 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. As reported by the Troubled Company Reporter on Feb. 21, 2011, 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 recapitalization transaction. The Canadian Court granted an order authorizing the holding of a meeting of the affected creditors of the Angiotech Entities on April 4. 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 seeking a sanctioning of the Plan by the Court. The Canadian 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. ANTERO RESOURCES: Moody's Upgrades Corporate Family Rating to 'B2' ------------------------------------------------------------------ Moody's Investors Service upgraded the Corporate Family Rating of Antero Resources LLC to B2 from B3. Moody's also upgraded the senior unsecured note rating to B3 from Caa1 and changed the rating outlook to positive from stable. Moody's assigned a SGL-3 speculative grade liquidity rating to Antero. "The growth in production and the progress in developing its unconventional gas reserve base warrants an upgrade in Antero's Corporate Family Rating to B2," said Stuart Miller, Moody's Senior Analyst. "Antero's significant acreage position in the Marcellus Shale, the Piceance Basin, and the Arkoma Basin, along with its relatively low development costs, bodes well for the future of the company despite its concentration in natural gas assets." Antero's B2 Corporate Family Rating balances the company's intention to rapidly grow its reserve base along with the execution risk associated with this plan. Antero hopes to more than double its production and proved developed reserve position by the end of 2012 which will require significantly out-spending its cash flow from operations. If successful, at the end of 2012 Antero would have the scale that is typical for strong single B exploration and production companies. The plan is plausible given the company's large acreage position in unconventional shale gas plays and its historically low development cost ratio. In 2010, the company spent about $9.50 per BOE to book proved developed reserves, a level reported by only the most efficient exploration and production operators. While Antero has a seasoned management team, there is considerable execution risk associated with achieving the planned level of growth without an increase in the leverage ratio or the development cost ratio. Funding this growth would require more than doubling Antero's debt outstanding to over $1 billion, and the company's ratio of debt to average daily production is already high as it is in excess of $30,000 per BOE. While not expected, any significant fall off in drilling efficiency or drilling results, or any delay in bringing wells on production could push this leverage ratio higher which would pressure Antero's rating outlook. However, the positive momentum behind the company's reported results suggests the greater likelihood for positive rating actions in the future with an expectation that the company will successfully execute its growth plan. Antero has adequate liquidity over the next four quarters primarily due to availability on its $550 million senior secured revolving credit facility which matures November 4, 2015. Borrowings are currently about $155 million leaving $400 million of availability. The credit agreement requires maintenance of a minimum current ratio of 1.0x and a maximum debt to EBITDAX of 4.25x, with a step down to 4.0x at the end of 2011. The SGL-3 rating reflects the expectation that cash flow will not be sufficient to fund the planned capital expenditures and a high reliance on external sources of capital. Unless there is a significant drop in natural gas prices, it is expected that the company will have access to the availability under its credit facility as its debt to EBITDAX ratio remains around 3.5x. The positive outlook is based on an expectation that Antero continues to develop its proved undeveloped reserves and increase its production rate, essentially doubling the current figures by the end of 2012. The outlook also is based on the assumption that the development costs per BOE do not increase significantly above $10 per BOE and that leverage declines modestly from its current levels. The ratings for the senior unsecured notes reflect both the overall probability of default of the company, to which Moody's assigns a PDR of B2, and a loss given default of LGD 5 (77%). The B3 rating of the senior unsecured notes reflects their position in Antero's capital structure, including the subordination to the senior secured creditors and the full guarantees of existing and future subsidiaries. The last rating action was on Jan. 13, 2010, when Moody's affirmed the B3 CFR and assigned a Caa1 rating to an add-on offering of senior unsecured notes Antero Resources LLC is an independent exploration and production company headquartered in Denver, Colorado. APPLESEED'S INTERMEDIATE: Court Sets April 1 as Claims Bar Date --------------------------------------------------------------- The U.S. Bankruptcy Court, District of Delaware set April 1, 2011 at 4:00 p.m., prevailing Pacific Time, as deadline for creditors of Appleseed's Intermediate Holdings LLC and its debtor-affiliates to file proofs of claim. Governmental units have until July 18, 2011 at 4:00 p.m., prevailing Pacific Time, to file proofs of claim. All proofs of claim must be filed at: Appleseed's Intermediate Holdings LLC Claims Processing Center c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 About Appleseed's Intermediate Based in Beverly, Massachusetts, Appleseed's Intermediate Holdings LLC, aka Appleseed's Intermediate Holdings, Inc., aka Orchard Brands sells clothing to people 55 and older. Orchard Brands has 17 brands including Appleseed's, Draper's & Damon's, Gold Violin, Haband and Norm Thompson. It publishes catalogs and has stores under its Appleseed's and Draper's & Damon's brands. It has annual sales of about $1 billion and earnings before interest, taxes, depreciation and amortization are about $50 million. Appleseed's is owned by Golden Gate Capital Corp., which also holds stakes in retailers Express Inc., Eddie Bauer Holdings Inc. and Zale Corp. Appleseed's Intermediate and its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-10160) on Jan. 19, 2011. Richard M. Cieri, Esq., Joshua A. Sussberg, Esq., at Brian E. Schartz, at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP, serves as local counsel to the Debtors. Moelis & Company LLC is the Debtors' investment banker and financial advisor. Alvarez & Marshal North America, LLC, is the Debtors' restructuring advisor. Pricewaterhousecoopers LLP is the Debtors' independent auditor. Kurtzman Carson Consultants LLC is the notice, claims and balloting agent. Appleseed's Intermediate estimated assets at $100 million to $500 million and debts at $500 million to $1 billion in its Chapter 11 petition. APPLESEED'S INTERMEDIATE: Plans to Close Nine Retail Stores ----------------------------------------------------------- Paul Leighton, staff writer at the Gloucester Times, reports that Appleseed's Intermediate Holdings plans to close nine of its 11 retail stores, including one of its two Beverly stores, in the latest fallout from the Company's recent bankruptcy filing. According to the report, a company spokeswoman said the store in the North Beverly Plaza, in Beverly, Massachusetts, and another in Woburn will remain open. All others, including the Appleseed's Outlet across Dodge Street from the North Beverly Plaza, will close. The planned shutdowns were disclosed over the weekend in court filings in Delaware as part of the Chapter 11 bankruptcy proceeding of Orchard Brands, Appleseed's parent company. About Appleseed's Intermediate Based in Beverly, Massachusetts, Appleseed's Intermediate Holdings LLC, aka Appleseed's Intermediate Holdings, Inc., aka Orchard Brands sells clothing to people 55 and older. Orchard Brands has 17 brands including Appleseed's, Draper's & Damon's, Gold Violin, Haband and Norm Thompson. It publishes catalogs and has stores under its Appleseed's and Draper's & Damon's brands. It has annual sales of about $1 billion and earnings before interest, taxes, depreciation and amortization are about $50 million. Appleseed's is owned by Golden Gate Capital Corp., which also holds stakes in retailers Express Inc., Eddie Bauer Holdings Inc. and Zale Corp. Appleseed's Intermediate and its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-10160) on Jan. 19, 2011. Richard M. Cieri, Esq., Joshua A. Sussberg, Esq., at Brian E. Schartz, at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP, serves as local counsel to the Debtors. Moelis & Company LLC is the Debtors' investment banker and financial advisor. Alvarez & Marshal North America, LLC, is the Debtors' restructuring advisor. PricewaterhouseCoopers LLP is the Debtors' independent auditor. Kurtzman Carson Consultants LLC is the notice, claims and balloting agent. Appleseed's Intermediate estimated assets at $100 million to $500 million and debts at $500 million to $1 billion in its Chapter 11 petition. ARROW TRUCKING: Ex-CEO Files for Bankruptcy; Trustee's Case Stayed ------------------------------------------------------------------ Clarissa Kell-Holland at Land Line reports that former Arrow Trucking President and CEO Doug Pielsticker has filed a Chapter 7 personal bankruptcy liquidation petition in the U.S. Bankruptcy Court for the Northern District of Texas. Land Line says Mr. Pielsticker, who has since moved from the Tulsa area to Dallas, lists his number of creditors as between one and 49. He lists his assets as between $1 million and $10 million and his liabilities as being between $10 million and $50 million. According to the report, Arrow Trucking bankruptcy trustee Patrick J. Malloy III filed a suit in January against Mr. Pielsticker and his mother, Carol Pielsticker Bump. Land Line notes that Mr. Malloy's lawsuit alleges that Mr. Pielsticker, the Company's former president and CEO, and Ms. Bump, the Company's sole director, received fraudulent transfers of at least $12.8 million in assets for their personal use over a four-year period before the company's filing for Chapter 7 bankruptcy in January 2010. Land Line states that the lawsuit alleges that Mr. Pielsticker received $8.4 million in transfers, and Ms. Bump received $4.4 million in transfers "disguised as salary." "In their capacity as director and CEO, Carol and Doug owed fiduciary duties to Arrow (Trucking)," the suit states. Mr. Malloy's case against Doug Pielsticker has hit a snag because of the personal bankruptcy filing, but he stated that his claims against Carol Pielsticker Bump will move forward, according to Land Line. "Essentially my claims against Doug are stayed," Land Line quotes Mr. Malloy as saying. "I will not be able to continue pursuit of the claims in the bankruptcy court here. I can file a claim in Doug's bankruptcy and hope there will be monies to pay some portion of the claim." Land Line relates that Mr. Pielsticker's bankruptcy petition states that "after any exempt property is excluded and administrative expenses paid, there will be no funds available for distribution to unsecured creditors." Land Line discloses that a meeting of creditors in Pielsticker's bankruptcy case is scheduled for March 14. The deadline to object to debtor's discharge or to challenge dischargeability of certain debts is May 13, Land Line adds. About Arrow Trucking Tulsa-based Arrow Trucking was a 61-year-old trucking business that suspended operations Dec. 22, 2009. Arrow Trucking filed a Chapter 7 bankruptcy petition Jan. 8, 2010 in U.S. Bankruptcy Court in Tulsa, Oklahoma. Arrow bankruptcy trustee Patrick J. Malloy III estimates Arrow Trucking's assets at $8.55 million and liabilities at $98.97 million. ARVINMERITOR INC: FMR LLC Discloses 12.260% Equity Stake -------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, FMR LLC disclosed that it beneficially owns 11,541,504 shares of common stock of ArvinMeritor Incorporated representing 12.260% of the total shares outstanding. A total of 94,234,334 shares of the Company's stock were outstanding as of Jan. 2, 2011. About ArvinMeritor Based in Troy, Michigan, ArvinMeritor, Inc. -- http://www.arvinmeritor.com/-- supplies integrated systems, modules and components to the motor vehicle industry. The Company celebrated its centennial anniversary in 2009. The Company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers. The Company's balance sheet at Dec. 31, 2010, showed $2.81 billion in total assets, $3.80 billion in total liabilities and a $990 million deficit. The deficit was $1.023 billion at Sept. 30, 2010. * * * At the end of January 2011, Standard & Poor's Ratings Services raised its corporate credit rating on ArvinMeritor Inc. to 'B' from 'B-'. The outlook is stable. At the same time, S&P also raised its issue-level ratings on the Company's senior secured and unsecured debt. S&P said the ratings on ArvinMeritor reflect the Company's highly leveraged financial risk profile and weak business risk profile. The Company's limited profitability has kept cash generation low, given the cyclical and competitive pricing pressures of the industry. Although S&P expect margins to improve, S&P believe pension funding and working capital investments will result in a use of cash in fiscal 2011. But S&P believe the Company's large cash balances will be sufficient to fund this cash use. As reported by the Troubled Company Reporter on Feb. 22, 2011, Moody's Investors Service raised the Corporate Family and Probability of Default ratings of ArvinMeritor, Inc., to B2 from B3. The upgrade of ArvinMeritor's Corporate Family Rating to B2 reflects the company's improving credit metrics over the recent quarters combined with Moody's expectation that recovering economic trends will support increasing commercial vehicle demand over the near-term. In January 2011 the company sold its Body Systems group which will permit management to focus on further strengthening performance of the commercial vehicle and industrial segments. With about 50% of total revenues derived from North America, ArvinMeritor is positioned to benefit from higher commercial vehicle orders, supported by increasing freight volumes, and an aging vehicle fleet. In addition, the company's exposure to other regional growth markets, such as South America (about 15% of revenues) and Asia (about 14%), is expected to help lift profitability over the near-term. ARVINMERITOR INC: Glenhill Advisors Discloses 0.88% Equity Stake ---------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, each of Glenhill Advisors, LLC, Glenn J. Krevlin and Glenhill Capital Management, LLC disclosed beneficial ownership of 830,000 shares of common stock of ArvinMeritor, Inc. representing 0.88% of the total shares outstanding. A total of 94,234,334 shares were outstanding as of Jan. 2, 2011. About ArvinMeritor Based in Troy, Michigan, ArvinMeritor, Inc. -- http://www.arvinmeritor.com/-- supplies integrated systems, modules and components to the motor vehicle industry. The Company celebrated its centennial anniversary in 2009. The Company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers. The Company's balance sheet at Dec. 31, 2010, showed $2.81 billion in total assets, $3.80 billion in total liabilities and $990 million deficit. The deficit was $1.023 billion at Sept. 30, 2010. * * * At the end of January 2011, Standard & Poor's Ratings Services raised its corporate credit rating on ArvinMeritor Inc. to 'B' from 'B-'. The outlook is stable. At the same time, S&P also raised its issue-level ratings on the Company's senior secured and unsecured debt. S&P said the ratings on ArvinMeritor reflect the Company's highly leveraged financial risk profile and weak business risk profile. The Company's limited profitability has kept cash generation low, given the cyclical and competitive pricing pressures of the industry. Although S&P expect margins to improve, S&P believe pension funding and working capital investments will result in a use of cash in fiscal 2011. But S&P believe the Company's large cash balances will be sufficient to fund this cash use. As reported by the Troubled Company Reporter on Feb. 22, 2011, Moody's Investors Service raised the Corporate Family and Probability of Default ratings of ArvinMeritor, Inc., to B2 from B3. The upgrade of ArvinMeritor's Corporate Family Rating to B2 reflects the company's improving credit metrics over the recent quarters combined with Moody's expectation that recovering economic trends will support increasing commercial vehicle demand over the near-term. In January 2011 the company sold its Body Systems group which will permit management to focus on further strengthening performance of the commercial vehicle and industrial segments. With about 50% of total revenues derived from North America, ArvinMeritor is positioned to benefit from higher commercial vehicle orders, supported by increasing freight volumes, and an aging vehicle fleet. In addition, the company's exposure to other regional growth markets, such as South America (about 15% of revenues) and Asia (about 14%), is expected to help lift profitability over the near-term. ARVINMERITOR INC: Glenview Capital Discloses 4.29% Equity Stake --------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, each of Glenview Capital Management, LLC and Lawrence M. Robbins disclosed that they beneficially own 4,038,617 shares of common stock of common stock of ArvinMeritor, Inc. representing 4.29% of the total shares outstanding. A total of 94,234,334 shares were outstanding as of Jan. 2, 2011. About ArvinMeritor Based in Troy, Michigan, ArvinMeritor, Inc. -- http://www.arvinmeritor.com/-- supplies integrated systems, modules and components to the motor vehicle industry. The Company celebrated its centennial anniversary in 2009. The Company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers. The Company's balance sheet at Dec. 31, 2010, showed $2.81 billion in total assets, $3.80 billion in total liabilities, and a $990 million deficit. The deficit was $1.023 billion at Sept. 30, 2010. * * * At the end of January 2011, Standard & Poor's Ratings Services raised its corporate credit rating on ArvinMeritor Inc. to 'B' from 'B-'. The outlook is stable. At the same time, S&P also raised its issue-level ratings on the Company's senior secured and unsecured debt. S&P said the ratings on ArvinMeritor reflect the Company's highly leveraged financial risk profile and weak business risk profile. The Company's limited profitability has kept cash generation low, given the cyclical and competitive pricing pressures of the industry. Although S&P expect margins to improve, S&P believe pension funding and working capital investments will result in a use of cash in fiscal 2011. But S&P believe the Company's large cash balances will be sufficient to fund this cash use. As reported by the Troubled Company Reporter on Feb. 22, 2011, Moody's Investors Service raised the Corporate Family and Probability of Default ratings of ArvinMeritor, Inc., to B2 from B3. The upgrade of ArvinMeritor's Corporate Family Rating to B2 reflects the company's improving credit metrics over the recent quarters combined with Moody's expectation that recovering economic trends will support increasing commercial vehicle demand over the near-term. In January 2011 the company sold its Body Systems group which will permit management to focus on further strengthening performance of the commercial vehicle and industrial segments. With about 50% of total revenues derived from North America, ArvinMeritor is positioned to benefit from higher commercial vehicle orders, supported by increasing freight volumes, and an aging vehicle fleet. In addition, the company's exposure to other regional growth markets, such as South America (about 15% of revenues) and Asia (about 14%), is expected to help lift profitability over the near-term. ARVINMERITOR INC: Wellington Management Has 11.37% Equity Stake --------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Wellington Management Company, LLP, disclosed that it beneficially owns 10,708,471 shares of common stock of ArvinMeritor, Inc., representing 11.37% of the total shares outstanding. A total of 94,234,334 shares were outstanding as of Jan. 2, 2011. About ArvinMeritor Based in Troy, Michigan, ArvinMeritor, Inc. -- http://www.arvinmeritor.com/-- supplies integrated systems, modules and components to the motor vehicle industry. The Company celebrated its centennial anniversary in 2009. The Company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers. The Company's balance sheet at Dec. 31, 2010, showed $2.81 billion in total assets, $3.80 billion in total liabilities and a $990 million deficit. The deficit was $1.023 billion at Sept. 30, 2010. * * * At the end of January 2011, Standard & Poor's Ratings Services raised its corporate credit rating on ArvinMeritor Inc. to 'B' from 'B-'. The outlook is stable. At the same time, S&P also raised its issue-level ratings on the Company's senior secured and unsecured debt. S&P said the ratings on ArvinMeritor reflect the Company's highly leveraged financial risk profile and weak business risk profile. The Company's limited profitability has kept cash generation low, given the cyclical and competitive pricing pressures of the industry. Although S&P expect margins to improve, S&P believe pension funding and working capital investments will result in a use of cash in fiscal 2011. But S&P believe the Company's large cash balances will be sufficient to fund this cash use. As reported by the Troubled Company Reporter on Feb. 22, 2011, Moody's Investors Service raised the Corporate Family and Probability of Default ratings of ArvinMeritor, Inc., to B2 from B3. The upgrade of ArvinMeritor's Corporate Family Rating to B2 reflects the company's improving credit metrics over the recent quarters combined with Moody's expectation that recovering economic trends will support increasing commercial vehicle demand over the near-term. In January 2011 the company sold its Body Systems group which will permit management to focus on further strengthening performance of the commercial vehicle and industrial segments. With about 50% of total revenues derived from North America, ArvinMeritor is positioned to benefit from higher commercial vehicle orders, supported by increasing freight volumes, and an aging vehicle fleet. In addition, the company's exposure to other regional growth markets, such as South America (about 15% of revenues) and Asia (about 14%), is expected to help lift profitability over the near-term. ARYX THERAPEUTICS: Lars Ekman Appointed to Audit Committee ---------------------------------------------------------- On Feb. 17, 2011, ARYx Therapeutics, Inc.'s board of directors appointed Lars Ekman to the Audit Committee of the Board. Dr. Ekman's appointment to the Audit Committee fills the vacancy created by the resignation of Keith Leonard on Feb. 1. The Board has determined that Dr. Ekman meets the requirements for independence and financial literacy of audit committee members under the applicable listing standards of The NASDAQ Stock Market LLC and the Securities Exchange Act of 1934, as amended. About ARYx Therapeutics Fremont, Calif.-based ARYx Therapeutics, Inc. (NASDAQ: ARYX) -- http://www.aryx.com/-- is a biopharmaceutical company. ARYx currently has four products in clinical development: a prokinetic agent for the treatment of various gastrointestinal disorders, naronapride (ATI-7505); an oral anticoagulant agent for patients at risk for the formation of dangerous blood clots, tecarfarin (ATI-5923); an oral anti-arrhythmic agent for the treatment of atrial fibrillation, budiodarone (ATI-2042); and, an agent for the treatment of schizophrenia and other psychiatric disorders, ATI- 9242. The Company's balance sheet as of Sept. 30, 2010, showed $6.0 million in total assets, $13.7 million in total liabilities, and a stockholders' deficit of $7.7 million. As reported in the Troubled Company Reporter on April 9, 2010, Ernst & Young LLP, in Palo Alto, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following review of the Company's 2009 results, citing the Company's recurring losses from operations and stockholders' deficit. ATLANTIC BROADBAND: S&P Assigns 'B+' Rating to $555 Mil. Loan ------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B+' issue-level rating and '3' recovery rating to Quincy, Mass.-based cable TV provider Atlantic Broadband Finance LLC's proposed $555 million senior secured term loan B due 2016. The '3' recovery rating indicates S&P's expectations for meaningful (50%-70%) recovery in the event of a payment default. The company intends to use the proceeds to repay the existing $575 million term loan B ($555 million outstanding). S&P will withdraw the rating on the existing term loan when the transaction closes. The company's 'B+' corporate credit rating and stable outlook remain unchanged. Ratings List Atlantic Broadband Finance LLC Corporate Credit Rating B+/Stable/-- New Ratings Atlantic Broadband Finance LLC Senior Secured $555 mil term loan B due 2016 B+ Recovery Rating 3 ATLANTIC SOUTHERN: H. Smisson and D. Moore Resign from Board ------------------------------------------------------------ On Feb. 17, 2011, Dr. Hugh F. Smisson, III, submitted his resignation as a director of Atlantic Southern Financial Group, Inc. and its subsidiary, Atlantic Southern Bank, effective immediately. On the next day, Mr. Donald L. Moore submitted his resignation as a director of the Company and the Board effective immediately. Dr. Smisson and Mr. Moore have advised the Company that their resignations were not due to any disagreement with the Company. About Atlantic Southern Macon, Ga.-based Atlantic Southern Financial Group, Inc. (NASDAQ: ASFN) operates nine banking locations in the middle Georgia markets of Macon and Warner Robins, five locations in the coastal markets of Savannah, Darien, Brunswick, one location in the south Georgia market of Valdosta, Georgia and one location in the northeast Florida market of Jacksonville, Florida. The Company specializes in commercial real estate and small business lending. The Company's balance sheet at Sept. 30, 2010, showed $852.6 million in total assets, $832.4 million in total liabilities, and stockholders' equity of $20.2 million. "As a result of the extraordinary effects of what may ultimately be the worst economic downturn since the Great Depression, the Company's and the Bank's capital have been significantly depleted," the Company said in its Form 10-Q for the quarter ended Sept. 30, 2010. The Company recorded a net loss of $59.2 million in 2009, and a net loss of $9.3 million in the first nine months of 2010. The Company's ability to raise additional capital will depend on conditions in the capital markets at that time, which are outside its control, and on its financial performance. Accordingly, the Company cannot be certain of its ability to raise additional capital on terms acceptable to them. The Company's inability to raise capital or comply with the terms of the Order [to Cease and Desist] raises substantial doubt about its ability to continue as a going concern." On Sept. 11, 2009, the Company's wholly-owned subsidiary bank, Atlantic Southern Bank, entered into a Stipulation and Consent to the Issuance of an Order to Cease and Desist with the Federal Deposit Insurance Corporation and the Georgia Department of Banking and Finance, whereby the Bank consented to the issuance of an Order to Cease and Desist. AURASOUND INC: Errors Found in June-September 2010 Results ---------------------------------------------------------- On Feb. 18, 2011, the management team of Aurasound, Inc., determined, on their authority, that the Company's unaudited condensed and consolidated income statement for the quarter ended Sept. 30, 2010, as previously filed with its quarterly report on Form 10-Q for that fiscal quarter, can no longer be relied upon due to a determination that certain of the Company's invoices were booked in the wrong period. The Company's management team discovered the error during its routine internal controls review process and preparation for the Company's filing of its Quarterly Report on Form 10-Q for the fiscal quarter ended Dec. 31, 2010. The Company's Principle Executive Officer and Principle Financial Officer and other authorized members of the Company's executive management team have discussed the matters with the Company's independent registered public accounting firm. About AuraSound, Inc. Santa Fe Springs, Calif.-based AuraSound, Inc. (OTC BB: ARUZ) -- http://www.aurasound.com/-- through its wholly-owned subsidiary, AuraSound, Inc., a California corporation, develops, manufactures and markets premium audio products. Specifically, AuraSound has developed and is currently marketing undersized speakers that will deliver sound quality to devices such as laptops, flat-panel televisions and displays that the Company believes to be superior to the sound quality currently found in these devices. During the year ended June 30, 2010, the Company's operations in China were conducted through Well-Tech International Co., a Hong Kong company owned by Susanne Lee who is the Company's office administrator in Hong Kong. The Company's operations in Taiwan are conducted by AuraSound as a foreign corporation doing business in Taiwan. With its recent acquisition of ASI Audiotechnologies, which closed on July 31, 2010, the Company has an industry leading TV soundbar business, additional proprietary transducer technology, application specific amplifier designs, and award winning ID designs. The Company's balance sheet at Sept. 30, 2010, showed $32.91 million in total assets, $32.59 million in liabilities, all current, and $326,294 in stockholders' equity. Kabani & Company, Inc., in Los Angeles, expressed substantial doubt about the Company's ability to continue as a going concern following the fiscal 2010 results. The independent auditors noted that during the year ended June 30, 2010, the Company incurred net losses of $2.2 million, and had negative cash flow from operating activities of $202,383. AURASOUND INC: Reports $1.01MM Net Income in Dec. 31 Qtr. --------------------------------------------------------- AuraSound, Inc., filed its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission reporting net income of $1.01 million on $27.18 million of net sales for the three months ended Dec. 31, 2010, compared with a net loss of $519,402 on $1.78 million of net sales for the same period a year ago. The Company's balance sheet at Dec. 31, 2010 showed $45.59 million in total assets, $39.94 million in total liabilities and $5.65 million in stockholders' equity. Going Concern As previously reported in the Troubled Company Reporter, Kabani & Company, Inc., in Los Angeles, expressed substantial doubt about the Company's ability to continue as a going concern following the fiscal 2010 results. The independent auditors noted that during the year ended June 30, 2010, the Company incurred net losses of $2.2 million, and had negative cash flow from operating activities of $202,383. According to the latest Form 10-Q, the financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of Dec. 31, 2010 the Company has an accumulated deficit of $36,937,503, negative working capital of $4,716,502 and has reported significant losses over the past several years. During the six-month period ended Dec. 31, 2010 the Company recorded a net income of $1,014,895 and had net cash provided by operating activities of $627,713. "The move to profitability and positive cash flow is a directly result of the execution of new management's post acquisition business plan to cut costs on all business lines, hold and spread overhead costs against a larger revenue base and to continue to move toward sustained profitability. However, there can be no assurance that the Company can sustain profitability or positive cash flows from operations. As such, if the Company is unable to generate positive net income and unable to continue to obtain financing for its working capital requirements, it may have to curtail its business sharply or cease business altogether," the Company said in the Form 10-Q. A full-text copy of the quarterly report on Form 10-Q is available for free at: http://ResearchArchives.com/t/s?73fb About AuraSound, Inc. Santa Fe Springs, Calif.-based AuraSound, Inc. (OTC BB: ARUZ) -- http://www.aurasound.com/-- through its wholly-owned subsidiary, AuraSound, Inc. ("AuraSound"), a California corporation, develops, manufactures and markets premium audio products. Specifically, AuraSound has developed and is currently marketing undersized speakers that will deliver sound quality to devices such as laptops, flat-panel televisions and displays that the Company believes to be superior to the sound quality currently found in these devices. During the year ended June 30, 2010, the Company's operations in China were conducted through Well-Tech International Co., a Hong Kong company owned by Susanne Lee who is the Company's office administrator in Hong Kong. The Company's operations in Taiwan are conducted by AuraSound as a foreign corporation doing business in Taiwan. With its recent acquisition of ASI Audiotechnologies, which closed on July 31, 2010, the Company has an industry leading TV soundbar business, additional proprietary transducer technology, application specific amplifier designs, and award winning ID designs. AXION INTERNATIONAL: RBSM Buys JSW, Takes Over as Auditor --------------------------------------------------------- On Feb. 20, 2011, Jewett, Schwartz, Wolfe & Associates advised Axion International Holdings, Inc., that its audit practice was acquired by RBSM LLP, an independent registered public accounting firm and that, accordingly, JSW was resigning as the Company's independent registered public accounting firm. The reports of JSW on the Company's financial statements for the years ended Sept. 30, 2010 and 2009 did not contain an adverse opinion or disclaimer of opinion, and those reports were not qualified or modified as to uncertainty, audit scope, or accounting principle. The reports of JSW on the Company's consolidated financial statements as of and for the years ended Sept. 30, 2010 and 2009 contained an explanatory paragraph which noted that there was substantial doubt as to the Company's ability to continue as a going concern due to a deficit in working capital and incurring significant losses. During the years ended Sept. 30, 2010 and 2009 through Feb. 20, 2011, the Company has not had any disagreements with JSW on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to JSW's satisfaction, would have caused them to make reference thereto in their reports on the Company's financial statements for such periods. During the years ended Sept. 30, 2010 and 2009 through Feb. 20, 2011, there were no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K. On Feb. 21, 2011, the Company engaged RBSM LLP as its independent registered public accounting firm for the Company's fiscal year ended Dec. 31, 2010. The decision to engage RBSM as the Company's independent registered public accounting firm was approved by the Company's Board of Directors. During the two most recent fiscal years and through the Engagement Date, the Company has not consulted with RBSM regarding either: 1. the application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report was provided to the Company nor oral advice was provided that RBSM concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or 2. any matter that was either the subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S- K and the related instructions thereto) or a reportable event (as described in paragraph (a)(1)(v) of Item 304 of Regulation S-K). About Axion International New Providence, N.J.-based Axion International Holdings, Inc. (OTC BB: AXIH) -- http://wwwaxionintl.com/-- is a structural solution provider of cost-effective alternative infrastructure and building products. The Company's "green" proprietary technologies allow for the development and manufacture of innovative structural products made from virtually 100% recycled consumer and industrial plastics. The Company's balance sheet at Sept. 30, 2010, showed $1.7 million in total assets, $2.1 million in total liabilities, and a $439,000 stockholders' deficit. Jewett, Schwartz, Wolfe and Associates, in Hollywood, Florida, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal years ended September 30, 2009 and 2010. The independent auditors said that the Company's need to seek new sources or methods of financing or revenue to pursue its business strategy, raise substantial doubt about the Company's ability to continue as a going concern. BEAZER HOMES: Anchorage Capital, et al., Hold 5.6% Equity Stake --------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Anchorage Capital Group, LLC and its affiliates disclosed that they beneficially own 4,333,111 shares of common stock of Beazer Homes USA, Inc., representing 5.6% of the total shares outstanding. There were 76,393,208 shares outstanding as of Dec. 13, 2010, according to the Company's proxy statement on Schedule 14A, filed Dec. 22, 2010. About Beazer Homes Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." The Company's balance sheet at Dec. 31, 2010, showed $1.90 billion in total assets, $1.55 billion in total liabilities and $349.65 million in stockholders' equity. * * * Beazer carries (i) a 'B-' issuer credit rating, with "stable" outlook, from Standard & Poor's, (ii) 'Caa1' probability of default and long term corporate family ratings from Moody's, and (iii) 'B-' issuer default rating, with stable outlook, from Fitch Ratings. Fitch said in November 2010 that the ratings and Outlook for Beazer reflect the company's healthy liquidity position, improved capital structure as well as the challenges still facing the housing market. Fitch expects existing home sales will decline 7.5% in 2010 and increase 6% in 2011. S&P said in November 2010 that although Beazer's business and liquidity profiles have improved, S&P doesn't anticipate raising its ratings on the company over the next 12 months because S&P expects costs associated with the company's heavy debt load will weigh on profitability. The 'Caa1' corporate family rating reflects Moody's expectation that Beazer has reduced costs sufficiently that it will continue to reduce losses in fiscal 2011. The impairments and other charges are likely to be less material going forward, given the company's improving gross margin performance, stabilizing pricing environment, and increasing absorptions. However, Moody's expectation is that Beazer's cash flow performance will weaken in 2011, as the benefits of inventory liquidation have largely played out. The ratings also reflect the company's extended debt maturity profile, improved Moody's-adjusted debt leverage, and increased net worth position. BEAZER HOMES: FMR LLC Discloses 15.002% Equity Stake ---------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, FMR LLC disclosed that it beneficially owns 11,351,604 shares of common stock of Beazer Homes USA Incorporated representing 15.002% of the total shares outstanding. At Jan. 31, 2011, a total of 76,372,805 shares were outstanding. About Beazer Homes Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." The Company's balance sheet at Dec. 31, 2010, showed $1.90 billion in total assets, $1.55 billion in total liabilities and $349.65 million in stockholders' equity. * * * Beazer carries (i) a 'B-' issuer credit rating, with "stable" outlook, from Standard & Poor's, (ii) 'Caa1' probability of default and long term corporate family ratings from Moody's, and (iii) 'B-' issuer default rating, with stable outlook, from Fitch Ratings. Fitch said in November 2010 that the ratings and Outlook for Beazer reflect the company's healthy liquidity position, improved capital structure as well as the challenges still facing the housing market. Fitch expects existing home sales will decline 7.5% in 2010 and increase 6% in 2011. S&P said in November 2010 that although Beazer's business and liquidity profiles have improved, S&P doesn't anticipate raising its ratings on the company over the next 12 months because S&P expects costs associated with the company's heavy debt load will weigh on profitability. The 'Caa1' corporate family rating reflects Moody's expectation that Beazer has reduced costs sufficiently that it will continue to reduce losses in fiscal 2011. The impairments and other charges are likely to be less material going forward, given the company's improving gross margin performance, stabilizing pricing environment, and increasing absorptions. However, Moody's expectation is that Beazer's cash flow performance will weaken in 2011, as the benefits of inventory liquidation have largely played out. The ratings also reflect the company's extended debt maturity profile, improved Moody's-adjusted debt leverage, and increased net worth position. BEAZER HOMES: Highbridge, et al., Hold 4.59% Equity Stake --------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Highbridge International LLC and its affiliates disclosed that they beneficially own $302,100 aggregate principal amount of 7.5% Mandatory Convertible Subordinated Notes due 2013, convertible into 1,345,765 shares of common stock and 7.25% Tangible Equity Units, convertible into 2,297,240 shares of common stock representing 4.59%. The percentages used are calculated based upon 75,669,381 shares of common stock issued and outstanding as of Nov. 3, 2010, as represented in the Company's Annual Report on Form 10-K for the fiscal year ended Sept. 30, 2010, filed with the Securities and Exchange Commission on Nov. 5, 2010. About Beazer Homes Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." The Company's balance sheet at Dec. 31, 2010, showed $1.90 billion in total assets, $1.55 billion in total liabilities and $349.65 million in stockholders' equity. * * * Beazer carries (i) a 'B-' issuer credit rating, with "stable" outlook, from Standard & Poor's, (ii) 'Caa1' probability of default and long term corporate family ratings from Moody's, and (iii) 'B-' issuer default rating, with stable outlook, from Fitch Ratings. Fitch said in November 2010 that the ratings and Outlook for Beazer reflect the company's healthy liquidity position, improved capital structure as well as the challenges still facing the housing market. Fitch expects existing home sales will decline 7.5% in 2010 and increase 6% in 2011. S&P said in November 2010 that although Beazer's business and liquidity profiles have improved, S&P doesn't anticipate raising its ratings on the company over the next 12 months because S&P expects costs associated with the company's heavy debt load will weigh on profitability. The 'Caa1' corporate family rating reflects Moody's expectation that Beazer has reduced costs sufficiently that it will continue to reduce losses in fiscal 2011. The impairments and other charges are likely to be less material going forward, given the company's improving gross margin performance, stabilizing pricing environment, and increasing absorptions. However, Moody's expectation is that Beazer's cash flow performance will weaken in 2011, as the benefits of inventory liquidation have largely played out. The ratings also reflect the company's extended debt maturity profile, improved Moody's-adjusted debt leverage, and increased net worth position. BEAZER HOMES: GSO Capital, et al., Disclose 5.2% Equity Stake ------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, GSO Capital Partners LP and its affiliates disclosed that they beneficially own 3,979,670 shares of common stock of Beazer Homes USA Inc. representing 5.2% of the total shares outstanding. At Jan. 31, 2011, there were 76,372,805 shares of common stock outstanding. About Beazer Homes Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." The Company's balance sheet at Dec. 31, 2010, showed $1.90 billion in total assets, $1.55 billion in total liabilities and $349.65 million in stockholders' equity. * * * Beazer carries (i) a 'B-' issuer credit rating, with "stable" outlook, from Standard & Poor's, (ii) 'Caa1' probability of default and long term corporate family ratings from Moody's, and (iii) 'B-' issuer default rating, with stable outlook, from Fitch Ratings. Fitch said in November 2010 that the ratings and Outlook for Beazer reflect the company's healthy liquidity position, improved capital structure as well as the challenges still facing the housing market. Fitch expects existing home sales will decline 7.5% in 2010 and increase 6% in 2011. S&P said in November 2010 that although Beazer's business and liquidity profiles have improved, S&P doesn't anticipate raising its ratings on the company over the next 12 months because S&P expects costs associated with the company's heavy debt load will weigh on profitability. The 'Caa1' corporate family rating reflects Moody's expectation that Beazer has reduced costs sufficiently that it will continue to reduce losses in fiscal 2011. The impairments and other charges are likely to be less material going forward, given the company's improving gross margin performance, stabilizing pricing environment, and increasing absorptions. However, Moody's expectation is that Beazer's cash flow performance will weaken in 2011, as the benefits of inventory liquidation have largely played out. The ratings also reflect the company's extended debt maturity profile, improved Moody's-adjusted debt leverage, and increased net worth position. BERNARD L MADOFF: Mets Owners Delay Fight for Discovery in Case --------------------------------------------------------------- Bankruptcy Law360 reports that attorneys for the owners of the New York Mets pushed back for two weeks a discovery hearing scheduled for Thursday in their heated battle with the trustee liquidating Bernard L. Madoff's investment company. 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 New York Mets principal owners 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. 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 Dec. 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 Feb. 18, 2011, a total of US$6.85 billion in claims by investors has been allowed, with US$791.1 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. BERNARD L MADOFF: SEC Lawyer's Role Questioned by Lawmakers ----------------------------------------------------------- Carla Main at Bloomberg News reports that U.S. House Republicans asked the Securities and Exchange Commission Chairman Mary Schapiro to disclose details of the participation of the agency's chief lawyer in the investigation of Bernard Madoff's Ponzi scheme. According to the report, the SEC said that the agency's departing general counsel, David M. Becker, didn't recuse himself from the Madoff probe after he and his brothers inherited about $2 million in 2004 from their mother's investment with the jailed financier. Mr. Becker said Feb. 23 that he learned through a summons last week that he and his two brothers were sued in bankruptcy court in New York by Irving H. Picard, the trustee liquidating Madoff's firm, who seeks to recover $1.5 million of the inheritance as a "fictitious" gain. The Bloomberg report relates that Mr. Becker sought an opinion from the SEC's ethics office "shortly after his return to the agency in 2009" about the family Madoff account, John Nester, an SEC spokesman, said in a statement. The ethics office told Becker he didn't need to disqualify himself from "participation in certain Madoffrelated matters," Nester said. House Financial Services Chairman Spencer Bachus and three senior members of his panel sent Ms. Schapiro a letter Feb. 24 requesting information on any meetings between Becker and Madoff, as well as whether he prepared "any legal memoranda, or provided counsel to any SEC employees about any matters" involving Madoff's firm. The lawmakers also asked for information and documentation about Mr. Becker's involvement in the Madoff case. The lawmakers requested a response by March 4, according to Bloomberg News. 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 Dec. 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 Feb. 18, 2011, a total of US$6.85 billion in claims by investors has been allowed, with US$791.1 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. BIOLASE TECHNOLOGY: To Release Q4 Results on March 10 ----------------------------------------------------- BIOLASE Technology, Inc., announced unaudited 2010 fourth quarter net income of $0.01 per share and non-GAAP net income of $0.03 per share which excludes non-cash stock option expense, depreciation and amortization expense and interest expense. This rapid turnaround resulted from a sequential revenue increase to $9.7 million for the fourth quarter with a gross profit of 50% and tight expense controls instituted by the new management team. The Company will host a conference call on Thursday, March 10, at 11:00 a.m. Eastern Time to discuss its operating results for the fourth quarter and year ended Dec. 31, 2010, additional financial and strategic developments and to provide commentary and revised outlook for the remainder of 2011. The Company's full financial results release will be distributed at approximately 9:00 a.m. Eastern Time that same day. About BIOLASE Technology Irvine, Calif.-based BIOLASE Technology, Inc. (NASDAQ: BLTI) -- http://www.biolase.com/-- is a dental laser company. The Company develops, manufactures and markets Waterlase technology and lasers and related products that advance the practice of dentistry and medicine. The Company's balance sheet at Sept. 30, 2010, showed $19.49 million in total assets, $23.04 million in total liabilities, and a stockholders' deficit of $3.54 million. As reported in the Troubled Company Reporter on March 22, 2010, BDO Seidman, LLP, in Costa Mesa, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted that the Company has suffered recurring losses from operations, has had declining revenues, has limited financial resources at Dec. 31, 2009, and is substantially dependent upon its primary distributor for future purchases of the Company's products. BLOCKBUSTER INC: Opposes Gibbs Plea to Continue Prepetition Suit ---------------------------------------------------------------- Blockbuster responded to the request of William J. Gibbs for lifting of the automatic stay to determine the extent of available insurance coverage and to liquidate his claim based on a prepetition judgment. By his Lift Stay Motion, William J. Gibbs seeks relief from the automatic stay to proceed with the prosecution of his prepetition action against Blockbuster Inc., which is currently pending in the Circuit Court for the City of St. Louis in the state of Missouri, Case No. 0622-CC06785, Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, tells Judge Burton Lifland on behalf of the Debtors. The request should be denied because the continued prosecution of the Action against Blockbuster will adversely affect the Debtors' bankruptcy estates, Mr. Karotkin contends. He argues that if Mr. Gibbs continues to prosecute the Action, any settlement with or judgment against Blockbuster would be covered by the Debtors' general liability insurance program in effect at the time Mr. Gibbs allegedly sustained the harm underlying the Action, which program was assumed in these cases. However, Mr. Karotkin explains, under the terms of the policy, the Debtors are responsible for a self-insured retention for $1,000,000, before proceeds from the insurance policy would be disbursed. Mr. Karotkin further contends that Mr. Gibbs has failed to allege any facts sufficient to meet the burden of establishing cause for relief from the automatic stay pursuant to Section 365(d)(1) of the Bankruptcy Code. In fact, Mr. Karotkin continues, the balance of harms weigh in favor of denying the request. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. The Official Committee of Unsecured Creditors has retained Cooley LLP as its counsel. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. In its latest monthly operating report filed with the Bankruptcy Court, Blockbuster disclosed $1.066 billion in assets, $422.2 million in liabilities not subject to compromise and $1.165 billion in liabilities subject to compromise, and a deficit of $533.8 million as of Nov. 28, 2010. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: Prentice Capital Equity Stake Down to 0% --------------------------------------------------------- In a Schedule 13G/A filed with the U.S. Securities and Exchange Commission on Feb. 14, 2011, Prentice Capital Management LP and Michael Zimmerman disclosed that they beneficially own zero shares of Blockbuster Inc.'s Class A Common Stock. Prentice Capital Management serves as investment manager to a number of investment funds, including Prentice Capital Partners, LP, Prentice Capital Partners QP, LP, Prentice Capital Offshore, Ltd., Prentice Special Opportunities, LP, Prentice Special Opportunities Offshore, Ltd., and Prentice Special Opportunities Master, L.P., and manages investments for certain entities in managed accounts with respect to which it has voting and dispositive authority over the Shares reported in the Schedule. Mr. Zimmerman is the Managing Member of: (a) Prentice Management GP, LLC, the general partner of Prentice Capital Management; (b) Prentice Capital GP, LLC, the general partner of certain investment funds; and (c) Prentice Capital GP II, LLC, the general partner of Prentice Capital GP II, LP, which is the general partner of certain investment funds, with respect to the matters covered by the Schedule and the Shares previously held by certain investment funds and managed accounts. Prentice Capital Management and Mr. Zimmerman revealed that as of Feb. 14, 2011, they have ceased to be the beneficial owner of more than 5% of Blockbuster's common stock. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. The Official Committee of Unsecured Creditors has retained Cooley LLP as its counsel. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. In its latest monthly operating report filed with the Bankruptcy Court, Blockbuster disclosed $1.066 billion in assets, $422.2 million in liabilities not subject to compromise and $1.165 billion in liabilities subject to compromise, and a deficit of $533.8 million as of Nov. 28, 2010. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: Wellington Equity Stake Down to 0% --------------------------------------------------- In a Schedule 13G/A filed with the U.S. Securities and Exchange Commission on Feb. 14, 2011, Wellington Management Company, LLP, disclosed that it beneficially owns zero shares of Blockbuster Inc.'s Class A Common Stock. Robert J. Toner, vice president at Welllington Management, revealed that as of February 14, 2011, the company has ceased to be the beneficial owner of more than 5% of Blockbuster's common stock. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. The Official Committee of Unsecured Creditors has retained Cooley LLP as its counsel. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. In its latest monthly operating report filed with the Bankruptcy Court, Blockbuster disclosed $1.066 billion in assets, $422.2 million in liabilities not subject to compromise and $1.165 billion in liabilities subject to compromise, and a deficit of $533.8 million as of Nov. 28, 2010. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLUE HERON: To Shut Down; Judge to Decide on Severance's Fate ------------------------------------------------------------- Bobby Allyn at The Oregonian reports that Blue Heron Paper Co. all operations would end shortly, citing competition from China for recycled paper, which has increased the cost of materials, as a major factor in the shutdown. According to the report, a federal bankruptcy court will decide on whether employees of the Company will receive severance and short term health insurance. The Oregonian notes that notes if the bankruptcy judge allows Wells Fargo, the mill's principal lender, to continue the company's current Chapter 11 reorganization status, workers may be able to recoup severance, vacation pay and temporary health insurance under the federally-subsidized Cobra program, according to Greg Hartman, the union's attorney. But if the judge rules to place the company in Chapter 7 bankruptcy, all severance, insurance and benefits will fold with the Company. About Blue Heron Oregon City, Oregon-based Blue Heron Paper Company -- http://www.blueheronpaper.com/-- produces newsprint, and high bright and heavyweight groundwood specialty printing papers. Blue Heron filed for Chapter 11 protection (Bankr. D. Ore. Case No. 09-40921) on Dec. 31, 2009. David B. Levant, Esq., at Stoel Rives LLP, in Portland, Oregon, serves as bankruptcy counsel to the Debtor. Attorneys at Barran Liebman LLP have been tapped as labor and employment counsel. The Debtor also employed Vanden Bos & Chapman, LLP, as special counsel. The Company estimated $10 million to $50 million in assets and debts as of the Chapter 11 filing. BORDERS GROUP: Creditors Panel Taps Lowenstein Sandler as Counsel ----------------------------------------------------------------- National law firm Lowenstein Sandler has been appointed to represent the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. 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: Proposes AP Services as Crisis Managers ------------------------------------------------------ Borders Group Inc. and its units seek the U.S. Bankruptcy Court's authority to: (a) employ AP Services LLC nunc pro tunc to the Petition Date to provide them interim management and restructuring services pursuant to Section 363 of the Bankruptcy Code; and (b) designate Ken Hiltz of AlixPartners LLP and as associated with APS as their senior vice president for restructuring. The parties have entered into an engagement letter where APS has agreed that Ken Hiltz will serve as the Debtors' SVPR. Lisa Donahue will act as Supervising Partner. Working collaboratively with the Debtors' senior management team and board of directors, as well as the Debtors' other professionals, Mr. Hiltz and Ms. Donahue will assist the Debtors in evaluating and implementing strategic and tactical options through the restructuring process. APS has also agreed to provide certain temporary staff to assist Mr. Hiltz and the Debtors in their restructuring efforts. As restructuring advisors, the Debtors expect Mr. Hiltz and the Temporary Staff to, among other things: (a) assist management in the development and implementation of a restructuring strategy designed to maximize enterprise value, taking into account the unique interests of all constituencies; (b) work with them and their team to further identify and implement both short-term and long-term liquidity generating initiatives, including forecasting and reporting cash flow performance during a potential chapter 11; (c) assist in overseeing the implementation of an operational restructuring plan that is designed to streamline the Debtors' cost base and efficiency of operations while preserving the Debtors' customer base, and that incorporates the constraints and opportunities resulting from a potential chapter 11 filing; (d) assist them in evaluating and implementing a store closing program under a chapter 11 bankruptcy filing scenario, together with other Debtor professionals; (e) assist them in implementing an improved inventory management program, given the constraints and opportunities resulting from a potential chapter 11 filing; (f) assist the Debtors' management and its professionals specifically assigned to sourcing, negotiating and implementing any financing, including debtor-in-possession and exit financing facilities, in conjunction with the Plan of Reorganization and the overall restructuring; (g) assist with the preparation of the statement of affairs, schedules and other regular reports required by the Bankruptcy Court; (h) provide assistance in such areas as testimony before the Bankruptcy Court on matters that are within APS' areas of expertise; (i) manage the claims and claims reconciliation processes; and (j) assist with other matters as may be requested that fall within APS's expertise and that are mutually agreeable. The Engagement Letter contains standard indemnification language with respect to APS's services. The standard hourly rates charged by APS professionals anticipated to be assigned to the Debtors' cases are: Name Description Hourly Rate ---- ----------- ----------- Ken Hiltz Sr. VP-Restructuring $855 Lisa Donahue Supervising Partner $895 Holly Etlin GOB Sales $855 Pilar Tarry Ch.11 Admin. Lead $645 Eva Anderson SG&A Cost Reduction $695 Ojas Shah Weekly Cash/Business $560 Planning Model Lead Clayton Gring Ch.11 Admin. Lead $560 Keith Jelinek Revenue and Merchandise $695 Performance Improvement Adam Hollerbach Revenue and Merchandise $440 Performance Improvement Robby Spigner Financial Analysis Support $395 Todd Brents Bankruptcy Process and $790 Operational Support Roles Tom Studebaker Bankruptcy Process and $560 Operational Support Roles Jarod Clarrey Bankruptcy Process and $415 Operational Support Roles Jeff Webb Bankruptcy Process and $600 Operational Support Roles Jonathan O'Reilly Bankruptcy Process and $490 Operational Support Roles The Debtors also propose to reimburse APS, upon receipt of periodic billings, for all reasonable and necessary expenses incurred in connection with their Chapter 11 cases, including transportation costs, lodging, food, telephone, copying, and messenger services. Moreover, the Debtors and APS have agreed on success fee compensation based on certain metrics. The Debtors will pay a Success Fee: (i) If the Debtors file a plan of reorganization which is confirmed and the Debtors emerge from bankruptcy within six months of filing for bankruptcy, APS will be paid a Success Fee for $2 million. (ii) If the Debtors file a plan of reorganization which is confirmed and the Debtors emerge from bankruptcy within 12 months of filing for bankruptcy, APS will be paid a Success Fee for $1 million. Because APS is not being employed as a professional under Section 327 of the Bankruptcy Code, it will not submit quarterly fee applications pursuant to Sections 330 and 331 of the Bankruptcy Code. APS will, however, file with the Court, and provide notice to the United States Trustee and all official committees, reports of compensation earned and expenses incurred on at least a quarterly basis. APS received an initial retainer of $350,000 on Feb. 11, 2011, from the Debtors. Pursuant to the Engagement Letter, invoiced amounts have been recouped against the Retainer, and payments on the invoices have been used to replenish the Retainer. During the 90-day period before the Petition Date, the Debtors paid APS a total of $490,000 for fees incurred in providing services to the Debtors in contemplation of, and in connection with, prepetition restructuring activities. Mr. Hiltz assures the Court that APS (i) is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, (ii) does not hold or represent an interest adverse to the Debtors' estates, and (iii) has no connection to the Debtors, their creditors, or their related parties. Mr. Hiltz disclosed his firm's connections to certain potential parties-in-interest -- which include ACE American Insurance Company, Akin Gump Straus Hauer & Feld, AT&T, Bank of New York Mellon, CB Richard Ellis, CIT Bank, Comerica Bank, Deloitte Tax LLP, Ernst & Young, FTI Consulting, General Growth Properties Inc., Google Inc., Grant Thornton, JPMorgan Chase Bank NA, Smurfit Stone Container, Sony Music Entertainment, Suntrust Bank, UBS AG, U.S. Bank N.A., Verizon Communications, Zurich, among others -- but maintained that those connections are in matters not related to the Debtors' Chapter 11 cases. 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: Proposes Baker & McKenzie as Corporate Counsel ------------------------------------------------------------- Borders Group Inc. and its units seek the Court's permission to employ Baker & McKenzie LLP as their special corporate counsel, nunc pro tunc to the Petition Date. As the Debtors' special counsel, Baker & McKenzie will represent and advise the Debtors in connection with, among other things, securities laws, corporate governance and equity and debt financing matters as sought by the Debtors. Baker & McKenzie has represented the Debtors in relation to the "Representative Matters" for more than 10 years. Borders Chief Financial Officer Scott Henry notes that based on Baker & McKenzie's experience with the Debtors and ongoing familiarity with the Representative Matters, continued retention of Baker is essential to avoid duplicate and unnecessary expense. The Debtors will pay Baker & McKenzie professionals in accordance with the firm's customary hourly rates: Title Rate per Hour ----- ------------- U.S. Partners $500 to $1,000 U.S. Of Counsel $400 to $700 U.S. Associates $295 to $540 U.S. Trainees/Paralegals $100 to $250 Baker & McKenzie's current hourly rates for associates and partners outside the United States, depending on the jurisdiction, vary from $200 to $1,200. The Debtors will also reimburse McKenzie for the necessary expenses incurred by the firm. Craig A. Roeder, Esq., a partner at Baker & McKenzie -- Craig.Roeder@bakermckenzie.com -- relates that during the 90 day- period before the Petition Date, his firm received $344,831 from the Debtors for services rendered and expenses incurred. As of the Petition Date, Baker & McKenzie had unpaid invoices to the Debtors for legal services totaling $106,159. Baker also holds a retainer from the Debtors of $175,878,000, which it will apply to amounts owed to Baker & McKenzie, he adds. Mr. Roeder says to the extent his firm has represented or may represent certain parties, the firm will have no professional relationship with the Debtors' known secured creditors, significant unsecured creditors or the Debtors' vendors, counterparties to contracts, insurers, equity security holders, or the officers, directors and control persons of the Debtors or other known significant parties-in-interest. He assures the Court that Baker does not and will not represent any of these entities in connection with the Representative Matters, a list of which is available for free at: http://bankrupt.com/misc/Borders_BakerClients.pdf Mr. Roeder maintains that Baker & McKenzie is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. 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: Proposes Jefferies as Investment Banker ------------------------------------------------------ Borders Group Inc. and its units seek the Court's permission to employ Jefferies & Company, Inc., as their investment banker nunc pro tunc to the Petition Date. As investment banker, Jeffries is contemplated to provide investment banking advisory and financial advisory services to the Debtors: (A) Investment banking and advisory services. The firm will provide advice and assistance to the Debtors in connection with analyzing, structuring, negotiating and effecting, and acting as exclusive financial advisor to the Debtors in connection with any restructuring of the Debtors' outstanding indebtedness, any liquidation under Chapter 7 or Chapter 11 of the Bankruptcy Code, or any execution of an agreement on a sale of the Debtors' assets or equity. (B) Financial advisory services. The firm will: (1) familiarize itself with and analyze the business, operations, properties, financial condition and prospects of the Debtors; (2) advise the Debtors on the current state of the "restructuring market;" (3) assist and advise the Debtors in developing the terms of and a general strategy for accomplishing a Restructuring; (4) assist and advise the Debtors in implementing and negotiating a Restructuring, including soliciting, reviewing and analyzing proposals for debtor-in- possession and exit financing as appropriate; (5) assist and advise the Debtors in evaluating and analyzing a Restructuring, including the value of the securities or debt instruments, if any, that may be issued in any restructuring; (6) advise the Debtors with respect to the placement of any debt securities of the Debtors, and at the Debtors' request, meet with management, the board, creditor groups or other parties-in-interest and provide those parties with information subject to appropriate confidentiality arrangements and assist in the preparation; (7) participate in hearings before the Court; and (8) render other financial advisory services as may from time to time be agreed upon by the Debtors and Jefferies. The Debtors will pay Jefferies in accordance with this fee structure: * Monthly Fee. A monthly advisory fee equal to $200,000 per month. Each Monthly Fee will be due on the first business day of each month for the term of the Jefferies Agreement. 50% of the Monthly Fees exceeding $1.2 million actually paid to Jefferies will be creditable once against any Restructuring Fee, but not the Liquidation Fee, if applicable, due to Jefferies. * Restructuring Fee. Upon the consummation of a Restructuring or similar transaction, a restructuring fee in an amount equal to $5.5 million; provided that in the event that a Restructuring is a liquidation of all or substantially all of the Debtors' assets, other than as a going concern and with respect to which the Company ceases operations, under Chapter 7 or Chapter 11 of the Bankruptcy Code, the Restructuring Fee will be $1.5 million. To be clear, no Liquidation Fee will be due as a result of a sale conducted and consummated by a Chapter 7 trustee. * Debt Securities Fee. Promptly upon the purchase or placement of Debt Securities with a party who is not a creditor or controlling shareholder of the Debtors as of the date hereof, a fee equal to 3.0% of the greater of the aggregate gross proceeds received or to be received from the sale of Debt Securities or the aggregate principal amount of Debt Securities, including, without limitation, aggregate amounts committed by investors to purchase Debt Securities, it being understood that Jefferies will receive 100% of that Debt Securities Fee. The Debtors will also reimburse necessary and reasonable expenses Jefferies incur, provided that those reimbursable expenses will not exceed $300,000 without the Debtors' prior approval. Richard K. Glein, senior vice president of Jefferies & Company, Inc., relates that before the Petition Date, Jefferies received $250,000 in fees and $15,000 as an expense deposit from the Debtors for prepetition services rendered and expenses incurred. Jefferies will hold any amounts received prepetition in excess of fees and expenses that accrued prepetition, if any, and apply those excess amounts toward fees and expenses that accrue postpetition. Mr. Glein discloses that Jefferies: (a) currently represents or formerly represented parties in matters unrelated to the Debtors' Chapter 11 cases, a schedule of which is available for free at: http://bankrupt.com/misc/Borders_JefferiesClients.pdf (b) either made a market in or published research on the securities of the entities, a schedule of which is available for free at: http://bankrupt.com/misc/Borders_JefferiesMarketEntities.pdf Mr. Glein notes that certain affiliates of Jefferies serve as managers for a number of investment vehicles. Jefferies employees working in connection with the Debtors' Chapter 11 cases have no control over investment decisions or business decisions made for the Managed Funds, he clarifies. Jefferies also has a debt securities and bank loan trading affiliate, Jefferies High Yield Trading, LLC. However, JHYT is a legally separate entity and is separated from Jefferies' investment banking department and its managing directors and employees advising the Debtors, by an "informational barrier," he explains. Mr. Glein also discloses that Jefferies or an affiliate holds about 3,000 shares of one or more of the Debtors' equity. Jefferies has made a good faith effort to sell or otherwise dispose of the Equity but has been unable to do so, he reveals. While Jefferies believes that its holdings do not cause it to be not disinterested for purposes of the Debtors' Chapter 11 cases, in order to avoid any appearance of not being disinterested, Jefferies, on behalf of itself and its affiliates, is forever and irrevocably disclaiming any interest in the Equity and is forever and irrevocably waiving any rights to any distribution to which the Equity is or may be entitled, Mr. Glein avers. Jefferies previously advised Bennett S. LeBow and LeBow Gamma Limited Partnership on an equity investment with the Debtors in 2010. Jefferies has not advised, is not advising, and will not advise Mr. LeBow or LeBow Ganuna Limited Partnership in connection with the Debtors' Chapter 11 cases, Mr. Glein assures the Court. Despite those disclosures, Mr. Glein maintains that Jefferies is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. 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: Proposes to Employ Ordinary Course Professionals --------------------------------------------------------------- In the ordinary course of business, Borders Group Inc. and its units retain the services of several professionals, a schedule of which is available for free at: http://bankrupt.com/misc/Borders_OCPs.pdf The continuing employment of the Ordinary Course Professionals, many of whom are already familiar with the Debtors' business and financial affairs, is crucial to avoid disruption of the Debtors' normal business operations, David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, tells the Court. By this motion, the Debtors seek the Court's permission to employ the OCPs subject to certain procedures set forth in the ordinary course, nunc pro tunc to the Petition Date. The Debtors propose these procedures to govern the retention of the OCPs: (1) Within 30 days of the later of (i) the entry of an order granting the OCP Motion, or (ii) the date on which the OCP commences services for the Debtors, each OCP will provide to the Debtors' counsel: (a) a declaration certifying that the professional does not represent or hold any interest materially adverse to the Debtors or their estates with respect to the matter in which the professional is to be employed; and (b) a completed retention questionnaire. (2) The Debtors will subsequently file the Ordinary Course Professional Declaration and Retention Questionnaire with the Court and serve a copy upon: (i) the U.S. Trustee for Region 2 and counsel for any statutory committee of unsecured creditors appointed in the Debtors' Chapter 11 cases. The Reviewing Parties will have 15 days following service to notify the Debtors, the other Reviewing Party, and the relevant OCP, in writing, of any objection to the retention of that OCP based on the contents of the Ordinary Course Professional Declaration or Retention Questionnaire. If no timely objection is filed, the retention, employment, and compensation of that OCP will be deemed approved, without further order from the Court, nunc pro tunc to the Petition Date or the date the OCP is retained, as applicable. If an objection is filed and that objection cannot be resolved 21 days, the matter will be set for a hearing before the Court. (3) The Debtors propose that they be permitted to pay each OCP, without a prior application to the Court by that professional, 100% of postpetition fees and disbursements incurred, upon the submission to, and approval by, the Debtors of an appropriate invoice setting forth in reasonable detail the nature of the services rendered and disbursements actually incurred. If any amount owed for an OCP's postpetition fees and disbursements exceeds a total of $40,000 per month, then the full amount of payments to the professional for that month will be subject to prior Court approval. (4) The Debtors propose to cap payments to each OCP at $300,000 for the entire period in which these Chapter 11 cases are pending, subject to further order of the Court. In the event an OCP seeks more than $40,000 per month, that professional will be required to file a fee application for the full amount of its fees and expenses for that month in accordance with Sections 330 and 331 of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the Local Bankruptcy Rules for the Southern District of New York, the Fee Guidelines promulgated by the U.S. Trustee, and any applicable orders of the Court. The Debtors reserve the right to seek to amend the monthly compensation upon notice and hearing. In the event an OCP seeks more than $300,000 for the entire period in which these Chapter 11 cases are pending, that OCP will be required to file a retention application to be retained as a professional pursuant to Section 327 of the Bankruptcy Code. (5) Every 90 days commencing from the date of entry of the order on the OCP Motion, the Debtors will file a statement with the Court, and serve that statement on the Reviewing Parties, which statement will include these details for each OCP: (a) the name of the OCP, (b) for each month during the relevant period, the amounts paid as compensation for services rendered and as reimbursement of expenses incurred, and (c) the aggregate amount paid to date to the OCP for services rendered and expenses incurred. The Debtors reserve the right to retain additional OCPs during the pendency of their Chapter 11 cases and to otherwise supplement the list of OCPs from time to time as necessary. Mr. Friedman asserts that the relief sought in the OCP Motion will save the Debtors' estates the substantial expenses associated with separate employment and fee applications for each of the professional firms. 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) BROOKSHIRE PLACE: Case Summary & 51 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Brookshire Place, LLC aka Drexel 8, LLC aka A & R Auto Sales, LLC aka R and A Properties, LLC aka Kirk 12, LLC aka Fast Cash Fast Close Home Buyers, LLC aka Copper 12, LLC aka Sooner 12, LLC aka Seventeen Southwest, LLC 2545 S.W. 59th St. Oklahoma City, OK 73119 Bankruptcy Case No.: 11-10717 Chapter 11 Petition Date: February 23, 2011 Court: United States Bankruptcy Court Western District of Oklahoma (Oklahoma City) Judge: T.M. Weaver Debtor's Counsel: Ruston C. Welch, Esq. WELCH LAW FIRM P.C. 722 N Broadway Ave Ste 301 Oklahoma City, OK 73102-6025 Tel: (405) 236-5222 Fax: (405) 231-5222 E-mail: rwelch@welchlawpc.com Scheduled Assets: $5,151,707 Scheduled Debts: $3,193,439 A list of the Company's 51 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/okwb11-10717.pdf The petition was signed by Stacy A. Murry, manager/member. CAESARS ENTERTAINMENT: Units Seek $400-Mil. Loan for Octavius ------------------------------------------------------------- Caesars Entertainment Corporation announced that certain of its direct and indirect wholly-owned subsidiaries are seeking financing for the completion of the Octavius Tower at Caesars' Palace Las Vegas and the development of a retail, dining and entertainment corridor located between the Imperial Palace Hotel and Casino and the Flamingo Las Vegas on the Las Vegas strip. The financing is expected to consist of a $400 million senior secured term facility with a six-year maturity, which will be secured by all material assets of the Borrowers. The proceeds of the Term Facility will be used by the Borrowers to finance the Development and to pay fees and expenses incurred in connection with the Term Facility and the transactions related thereto. In connection with the Development and the Term Facility, the Company will contribute or cause to be contributed the existing Octavius Tower and related assets to one of the Borrowers and the existing O'Shea casino (adjacent to the Flamingo Las Vegas) and related real property and other assets comprising the components of Project Linq to one of the Borrowers. Upon completion of Project Octavius, one of the Borrowers will lease the Octavius Tower to a wholly-owned subsidiary of CEOC. Upon completion of the Project Linq, one of the Borrowers will lease the gaming space in Project Linq to a wholly-owned subsidiary of CEOC. The total lease payments are expected to be $50 million annually once the Development is open. CEOC is expected to guarantee the obligations of the lessees under the Project Octavius and Project Linq leases. From time to time on and after the closing of the Term Facility, the Company may be required to make cash contributions to the Borrowers to fund certain portions of the Development. As a condition to obtaining the Term Facility, the Company will be required to provide a completion guarantee with respect to the Development, which will guarantee completion of the construction of the Development, availability of contemplated working capital and receipt of material permits and licenses necessary to open and operate the Development. The maximum liability of the Company under the completion guarantee is expected to be $25 million in respect of Project Octavius and $75 million in respect of Project Linq. In addition, the Company will be required to guarantee all payments of interest under the Term Facility until the later of the commencement of operations of the Octavius Tower and Project Linq and to guarantee the performance of the Borrowers of the first lien leverage ratio maintenance covenant by making cash equity contributions to the Borrowers from time to time pursuant to the terms of the Term Facility. The maximum liability of the Company under the performance guarantee is expected to be $50 million. Except in the limited circumstances described above, neither the Company nor CEOC will have any direct obligations under the Term Facility, and the Term Facility will not be recourse to the Company or CEOC. Obtaining the proposed Term Facility is subject to market and other conditions, and may not occur as described or at all. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. Harrah's carries 'Caa3' long term corporate family and probability of default ratings, with 'positive' outlook, from Moody's Investors Service. It has a 'B-' issuer credit rating, with 'stable' outlook, from Standard & Poor's. Caesars Entertainment Inc. carries a 'Ca' long term rating from Moody's. CANAL CORP: Court Sets March 22 as Deadline for Voting on Plan -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia has approved the accompanying disclosure statement to Canal Corporation, et al.'s second amended joint plan of liquidation. A hearing will be held on March 29, 2011, at 11:00 a.m. (prevailing Eastern Time), to consider confirmation of the second amended plan. The Court has set March 22, 2011, as the deadline for casting of ballots approving or rejecting the plan. As reported by the TCR on Jan. 12, 2011, Netdockets reported that Canal Corp. filed a proposed plan of liquidation and accompanying disclosure statement with the Court on Jan. 7, 2011. According to Netdockets, the proposed plan covered all of the Canal/Chesapeake companies that are included in the jointly-administered bankruptcy cases, except WTM I Company. The plan proposed that the Plan Debtors retain their remaining assets and then complete the liquidation of their assets in order to make distributions under the plan to creditors, Netdockets reported. According to the disclosure statement filed with the Plan, the Plan Debtors have no secured or non-tax priority claims outstanding, but do have $200 million in outstanding general unsecured claims, $50 million in outstanding revenue bond claims, and $250 million in outstanding subordinated note claims. Canal projected that holders of revenue bond claims would receive payments equal to approximately 2.28% of their claims under the plan; holders of general unsecured claims would receive payments of only 0.38% of their claims; and holders of subordinated note claims would likely receive nothing, Netdockets added. The Debtors first amended that plan on Feb. 11, 2011. On Feb. 15, 2011, the Debtors filed the second amendment to their joint plan of liquidation and the accompanying disclosure statement. A copy of the plan is available for free at: http://bankrupt.com/misc/CanalCorp_2ndDS.pdf The Debtors' second amended plan states that administrative claims will be paid equal to the unpaid portion of the claims, in cash; professionals entitled to reimbursement or allowance of fees and expenses from the estates will be paid, in cash, in the amount awarded to the professionals by final court order; and priority tax claims will be paid in full, in cash. Under the second amended plan, intercompany claims will be deemed eliminated. All assets and liabilities of the Plan Debtors will be merged or treated as if they were merged with the assets and liabilities of Canal Corporation. Any obligation of a Plan Debtor and all guarantees thereof by one or more of the other Plan Debtors will be deemed to be one obligation of Canal Corporation. The interests will be cancelled. Each claim filed or to be filed against any Plan Debtor will be deemed filed only against the consolidated Canal Corporation and will be deemed a single Claim against and a single obligation of the consolidated Canal Corporation. On the Effective Date, claims based upon guarantees of collection, payment, or performance made by the Plan Debtors as to the obligations of another Plan Debtor will be released and of no further force and effect. On the Effective Date, the officers and directors of each of the Plan Debtors will be deemed to have resigned and will be fully discharged from their responsibilities and duties as officers, managers and directors of the Plan Debtors. A plan administrator will be appointed and will act for the Plan Debtors and the Estates in a fiduciary capacity as applicable to directors, managers and officers. Organizational documents of each of the Plan Debtors will be deemed amended, to the extent necessary, to require only one director or manager, as applicable, and only one officer, the Plan Administrator. The IRS will receive distributions on the IRS settlement claim. The IRS Settlement Claim entitles the IRS to receive an amount equal to 50% of all amounts available to be distributed under the second amended plan to holders of allowed (i) Priority Tax Claims, (ii) Priority Non-Tax Claims, and (iii) General Unsecured Claims. About Canal Corp. Headquartered in Richmond, Virginia, Chesapeake Corporation supplies specialty paperboard packaging products in Europe and an international supplier of plastic packaging products to niche end- use markets. The Company has 44 locations in Europe, North America, Africa and Asia. Chesapeake and 18 affiliates filed Chapter 11 petitions (Bankr. E.D. Va. Lead Case No. 08-336642) on Dec. 29, 2008. Lawyers at Hunton & Williams LLP represent the Debtors. Chesapeake tapped Alvarez and Marsal North America LLC, and Goldman Sachs & Co. as financial advisors. Tavenner & Beran PLC serves as conflicts counsel and Hammonds LLP as special counsel. Kurtzman Carson Consultants LLC serves as claims agent. The United States Trustee for Region 4 appointed seven creditors to serve on an Official Committee of Unsecured Creditors for the Debtors' Chapter 11 cases. Lawyers at Greenberg Traurig LLP represent the Committee. In its petition, Chesapeake disclosed $936,600,000 in total assets and $937,100,000 in total debts as of September 28, 2008. In May 2009, Chesapeake sold its assets to entities controlled by Irving Place Capital Management, L.P. and Oaktree Capital Management, L.P. and, following a competitive bidding process which produced no competing bids. The purchase price was about $485 million. The Debtor was renamed to Canal Corp., following the sale. CANNERY CASINO: Moody's Gives Stable Outlook, Keeps 'Caa1' Rating ----------------------------------------------------------------- Moody's Investors Service changed Cannery Casino Resorts, LLC's rating outlook to stable from negative. The company's Caa1 Corporate Family and Probability of Default ratings were affirmed along with the company's existing long-term debt ratings. The outlook revision to stable reflects Moody's view that Cannery's EBITDA will grow modestly in 2011 and that the company will continue to use free cash flow to repay debt and improve credit metrics. The addition of table games in Pennsylvania that began in July 2010 will add incremental EBITDA to Cannery's consolidated results in 2011. Revenue and EBITDA from the Pennsylvania facility (The Meadows) accounts for about 60% of Cannery's consolidated EBITDA and will be the primary catalyst driving the expected improvement in free cash flow and leverage. The stable outlook also reflects Cannery's good liquidity profile. Moody's expects that Cannery will be able to cover its interest and capital spending needs through internally generated cash flow without reliance on its $70 million revolving credit facility expiring 2012. As a result, Cannery should continue to maintain modest availability under its revolver. Additionally, the company has good headroom under its covenants. Cannery's Caa1 Corporate Family Rating reflects its very high leverage -- adjusted debt/EBITDA is about 8.5 times including a portion of the company's preferred stock -- and continued exposure to weak gaming demand trends in the Las Vegas Locals market. The EBITDA declines at Eastside Cannery and the company's two other Las Vegas casinos have decelerated and Moody's expect EBITDA from these properties to begin to grow modestly in 2011. However, Moody's expects any recovery to be slow given that the Las Vegas Locals market continues to suffer to a greater degree than the overall US economy from high unemployment and depressed home values. Ratings could be upgraded if Cannery begins to demonstrate a further, material and sustainable improvement in earnings and leverage, and successfully addresses the refinancing of its revolving credit facility. Ratings could be lowered if Cannery's operating performance does not improve or if the company has difficulty refinancing its $70 million revolver that expires in 2012. Ratings affirmed and assessments adjusted: -- Corporate Family Rating at Caa1 -- Probability of Default Rating at Caa1 -- Senior secured first lien term loan due 2013 at B3 (LGD 3, 38% from LGD 3, 41%) -- Senior secured first lien revolver maturing in 2012 at B3 (LGD 3, 38% from LGD 3, 41%) -- Senior secured delayed draw term loan due 2013 at B3 (LGD 3, 38% from LGD 3, 41%) -- Senior secured second lien term loan due 2014 at Caa3 (LGD 6, 89% from LGD 6, 90%) Cannery Casino Resorts, LLC is a privately held gaming company that owns and operates one casino in Pennsylvania and three casinos in Las Vegas, NV. The company generates about $490 million of annual net revenue. CAPITOL BANCORP: Authorized Common Shares Hiked to 1.52 Billion --------------------------------------------------------------- Capitol Bancorp Limited announced the results of its special meeting of shareholders held on Wednesday, Feb. 23, 2011. Nearly 80% of Capitol's outstanding shares voted on the proposals, with more than 90% voting in favor of the proposal to approve an increase in the number of authorized shares of capital stock from 70,000,000 to 1,520,000,000 (1,500,000,000 of which are shares of common stock). Additionally, of those shares represented at the meeting, more than 90% voted for both the amendment to Capitol's articles of incorporation to effect a reverse stock split and the proposal to permit Capitol's board of directors to adjourn, postpone or continue the special meeting. 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 those securities approximated $18.1 million at June 30, 2010. CAPMARK FINANCIAL: Seeks OK to Sell Loan Assets for US$74.1 Mil. ---------------------------------------------------------------- Capmark Financial Group filed with the U.S. Bankruptcy Court a motion for an order authorizing: (I) the transfer of substantially all non-loan assets in its New Markets Tax Credit business platform to newly-formed, special purpose Delaware limited liability companies Greenline Investments LLC, and Greenline Community Ventures LLC, (II) the sale of substantially all loan assets in the New Markets Tax Credit business to U.S. Bancorp Community Development Corporation and U.S. Bancorp Community Investment Corporation, for a cash payment of approximately $74.1 million at closing, and (III) the settlement of claims arising from and related to Debtors' New Markets Tax Credit business. According to the filing, the net present value of selling the assets in this manner is $354.52 million, whereas the net present value of holding the assets and incurring the negative financial reinvestment obligations is $349.34 million. The Court scheduled a hearing on the matter for March 14, 2011. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- provides financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On Oct. 25, 2009, Capmark Financial and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Lead Case No. 09-13684). Capmark disclosed assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A., serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. Protech Holdings C, LLC, an affiliate of Capmark, filed for Chapter 11 protection on July 29, 2010 (Bankr. D. Del. Case No. 10-12387). The Debtor estimated assets and debts in excess of $1 billion as of the filing date. Since filing in Chapter 11, Capmark completed three sales to generate more than $1 billion cash. Berkshire Hathaway Inc. and Leucadia National Corp. bought most of the business for $468 million. CARBON BEACH: Hearing on DIP Financing Continues to March 10 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California will continue on March 10, 2011, at 9:00 a.m., the hearing on Carbon Beach Partners, LLC's request to incur up to $3.50 million of postpetition financing. As reported by the Troubled Company Reporter on Sept. 30, 2010, the Debtor sought financing to complete construction of its primary asset. The Debtor owns an eight-unit luxury condominium located in Malibu, California. The project is only 95% completed because Builders Bank and the Debtor were unable to come to terms on a restructuring of the bank debt. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant the new lender a lien on the property of the estate, senior to all existing prepetition liens. The Debtor needs the money to fund the completion of the property so all the creditors could be paid. The terms of the loan include: Amount: up to $3,500,000 Maturity Date: 18 months Late Fee Interest 3% Default Interest 5% Calabasas, California-based Carbon Beach Partners, LLC, filed for Chapter 11 protection on Nov. 3, 2009 (Bankr. C.D. Calif. Case No. 09-24657). Anne Wells, Esq., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. CB HOLDING: Seeks to Sell Liquor License for $725,000 ----------------------------------------------------- Carla Main at Bloomberg News reports that CB Holding Corp. and its affiliates, known as the Charlie Brown's Steakhouse restaurants, asked a bankruptcy judge to approve the sale of a liquor license for $725,000 without an auction. According to the report, CB Holding agreed Feb. 18 to sell the license, for the former Charlie Brown's Steakhouse in Upper Montclair, New Jersey, to Montclair Hospitality LLC. CB Holding asked the U.S. Bankruptcy Court in Wilmington, Delaware, to approve the sale free and clear of all liens and other interests against it. A hearing is scheduled for April 11. About CB Holding New York-based CB Holding Corp. operated 20 Charlie Brown's Steakhouse, 12 Bugaboo Creek Steak House, and seven The Office Beer Bar and Grill restaurants when it filed for bankruptcy protection. The Company closed 47 locations before filing for Chapter 11. Following a bankruptcy auction, CB Holding sold its The Office restaurant chain to winning bidder Villa Enterprises Ltd. for $4.68 million. Landry's Restaurants has signed a deal to acquire the 12 Bugaboo Creek stores for $3 million, plus upward adjustments for cash and inventory in the stores at closing, absent higher and better offers at a March 7 auction. CB Holding and its affiliates filed for Chapter 11 bankruptcy protection on Nov. 17, 2010 (Bankr. D. Del. Case No. 10-13683). Christopher M. Samis, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., assist the Debtors in their restructuring effort. The Garden City Group, Inc., is the Debtors' notice, claims and solicitation agent. Jeffrey N. Pomerantz, Esq., Jason S. Pomerantz, Esq., and Bradford J. Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Official Committee of Unsecured Creditors. CB Holding estimated its assets at $100 million to $500 million and debts at $50 million to $100 million. * * * According to the Troubled Company Reporter on Feb. 11, 2011, CB Holding received an order from Bankruptcy Judge Mary Walrath extending its exclusive periods to file and secure support for a Chapter 11 plan. The exclusive time for the Debtor to file a plan of reorganization has been extended to June 15. The Debtor has until Aug. 12 to solicit support for the plan. The order is without prejudice for a request by the Debtor for another extension. CELL THERAPEUTICS: To Sell $25-Mil. of Securities to Investor ------------------------------------------------------------- Cell Therapeutics, Inc., announced that it has entered into a securities purchase agreement to sell, subject to certain closing conditions, securities in a registered offering to a single life sciences institutional investor. The Company may use a portion of the net proceeds to fund possible investments in, or acquisitions of, complementary businesses, technologies or products. The Company has recently engaged in limited discussions with third parties regarding those investments or acquisitions, but has no current agreements or commitments with respect to any investment or acquisition. The Company may also use a portion of the net proceeds from the offering for general corporate purposes, which may include, among other things, paying interest on or retiring portions of its outstanding debt, funding research and development, preclinical and clinical trials, the preparation and filing of new drug applications and general working capital. Pursuant to the Purchase Agreement, the Company has agreed to sell up to approximately $25.0 million of shares of its Series 10 Non- Convertible Preferred Stock, warrants to purchase up to approximately 25.9 million shares of common stock and an additional investment right to purchase up to approximately $25.0 million of shares of its Series 11 Convertible Preferred Stock, in a registered offering to the Investor. The shares of Series 10 Preferred Stock will accrue annual dividends at the rate of 10% from the date of issuance, payable in the form of additional shares of Series 10 Preferred Stock. The shares of Series 10 Preferred Stock are redeemable at the option of the Company at any time after issuance, in whole or in part, either in cash or by offset against recourse notes fully secured with marketable securities, which may be issued by the Investor to the Company in connection with the exercise of the Warrants and the Additional Investment Right. The Warrants have an exercise price of $0.337 per share of common stock. The Warrants are exercisable immediately and expire two years from the date of the Purchase Agreement. The exercise price of the Warrants may be paid in cash or by the issuance of Notes. The Warrants are subject to cancellation and mandatory exercise under certain conditions, in whole or in part. The total potential additional proceeds to the Company upon exercise of the Warrants for cash are approximately $8.7 million. The Additional Investment Right has an exercise price of $1,000 per share of Series 11 Preferred Stock. The Additional Investment Right is exercisable immediately and must be exercised no later than March 19, 2011. The exercise price of the Additional Investment Right may be paid in cash or through the issuance of Notes. The Additional Investment Right is subject to cancellation under certain conditions, in whole or in part. The total potential additional proceeds to the Company upon exercise of the Additional Investment Right for cash are approximately $25.0 million. Each share of Series 11 Preferred Stock is convertible at the option of the holder, at any time during its existence, into approximately 2,967 shares of common stock at a conversion price of $0.337 per share of common stock, for a total of approximately 74.1 million shares of common stock. The closing of the issuance and sale of the Series 10 Preferred Stock is expected to occur on the 10th trading day following the date of the Purchase Agreement, subject to certain closing conditions. Additional details regarding the offering can be found in the prospectus supplement relating to the offering to be filed with the Securities and Exchange Commission on Feb. 18, 2011. A shelf registration statement relating to the shares of Series 10 Preferred Stock, the Warrants, the Additional Investment Right and the shares of Series 11 Preferred Stock issued in the offering has been filed with the SEC. A prospectus supplement under Rule 424 of the Securities Act of 1933, as amended, relating to the offering will be filed with the SEC on Feb. 18, 2011. About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. The Company's balance sheet at Sept. 30, 2010, showed $46.6 million in total assets, $38.9 million in total liabilities, $13.4 million in common stock purchase warrants, and a stockholders' deficit of $5.7 million. Stonefield Josephson, Inc., in San Francisco, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has sustained loss from operations, incurred an accumulated deficit, and has substantial monetary liabilities in excess of monetary assets as of Dec. 31, 2009. CENTRALIA OUTLETS: Can Hire Perkins Coie as Gen. Bankr. Counsel --------------------------------------------------------------- Centralia Outlets, LLC, sought and obtained authorization from the Hon. Paul B. Snyder of the U.S. Bankruptcy Court for the Western District of Washington to employ Perkins Coie LLP as general bankruptcy counsel, effective as of Dec. 28, 2010. Perkins Coie will, among other things: a. take all actions necessary to protect and preserve the Debtor's bankruptcy estate, including the prosecution of actions on the Debtor's behalf, the defense of any actions commenced against the Debtor, negotiations concerning all litigation in which the Debtor is involved, objections to claims filed against the Debtor in the bankruptcy case, and the compromise or settlement of claims; b. prepare applications, motions, memoranda, responses, complaints, answers, orders, notices, reports, and other papers required form the Debtor; c. negotiate with creditors concerning a plan of reorganization, prepare the plan of reorganization, disclosure statement and related documents, and take steps necessary to confirm and implement the plan, including, if needed, negotiations for financing the plan; and d. represent the Debtor in all other aspects of the case. Perkins Coie will be paid based on the hourly rates of its professionals: Brian A. Jennings $480 Al Smith $595 Paralegals $110-$350 Partners $405-$775 Associates $170-$495 To the best of the Debtor's knowledge, Perkins Coie is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. 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. The Debtor disclosed $29,206,999 in assets and $23,999,507 in liabilities. CHARLES RIVER: Moody's Affirms 'Ba2' Corporate Family Ratings ------------------------------------------------------------- Moody's Investors Service affirmed the long-term ratings of Charles River Laboratories International Inc., including the Ba2 Corporate Family Rating and 'Ba2' Probability of Default Rating. Moody's also affirmed the 'Ba1' on the $900 million senior secured credit facility, including the term loan A which was recently increased to $550 million from $400 million. Moody's expects the incremental $150 million to be used to fund share repurchases. Concurrently, Moody's affirmed the Speculative Grade Liquidity rating of SGL-2, reflecting its expectations for good liquidity over the next twelve months. The outlook for the ratings is stable. Ratings affirmed/LGD point estimates revised: -- Corporate Family Rating, Ba2; -- Probability of Default Rating, Ba2; -- $350 million Senior Secured Revolver due 2015, Ba1 (LGD3, 30%) -- $550 million Senior Secured Term Loan due 2015 (including incremental $150 million loan), Ba1 (LGD3, 30%) -- Speculative Grade Liquidity Rating, SGL-2 The ratings outlook is stable. Ratings Rationale The affirmation of the 'Ba2' Corporate Family Rating reflects Charles River's continued leading market positions in laboratory research models and services and preclinical services, as well as good geographic and customer diversity. Pro forma for the incremental debt which will be used to fund share repurchases, and incorporating Moody's standard analytic adjustments, debt to EBITDA increases to approximately 4.0 times (from 3.4 times currently), which is weak for the Ba2 rating. However, the ratings are supported by Moody's expectation for continued strong free cash flow and cash interest coverage. Further, given meaningful mandatory amortization on the term loan A, Moody's expects that leverage will return to the mid-3.0 times range over the next two years. The ratings and stable outlook are also supported by Moody's expectation for good liquidity over the next year. The ratings are constrained by Moody's expectation for continued operating headwinds, particularly in the PCS business, including constrained R&D spending by pharmaceutical clients, overcapacity in the preclinical testing industry and pricing pressure. Following several years of revenue reductions, the company's absolute size is now modest relative to other Ba rated companies. Further, following several large goodwill and asset impairments, including nearly $400 million in 2010, as well as the aggressive share buy-back program, debt to capital is now over 60%, up from the 20-30% range historically. The stable outlook reflects Moody's assumption that pricing and demand in the PCS business will not show any further meaningful deterioration from current levels. If Charles River was to continue to experience declines in revenue and operating income such that leverage is expected to be sustained above 4.0 times without meaningful improvement, Moody's could change the outlook to negative or downgrade the ratings. Further, any incremental debt to fund additional shareholder initiatives, such as share repurchases, could cause the ratings to come under pressure. Moody's does not anticipate an upgrade in the near-term given the ongoing pressures on the preclinical business as well as leverage which is high for the rating category. Longer-term, if the company's preclinical business shows a significant rebound and Moody's expects leverage to be sustained below 2.5 times, it could change the outlook to positive or upgrade the ratings. Charles River (NYSE: CRL), headquartered in Wilmington, MA, is a contract research organization that provides research tools and services for drug discovery and development. The company's revenues are roughly 60% from the Research Models and Services business, which involves the commercial production and sale of research models (e.g., rats and mice); and 40% from the Preclinical Services business, which involves the development and safety testing of drug candidates. The company reported revenues of approximately $1.1 billion for the twelve months ended December 25, 2010. CHARLES RIVER: S&P Assigns Rating to New $150 Mil. Senior Notes --------------------------------------------------------------- On Feb. 24, 2011, Standard & Poor's Ratings Services assigned its 'BBB-' issue-level rating to Wilmington, Mass.-based Charles River Laboratories International Inc.'s new $150 million senior secured term loan due 2015. Proceeds from the new term loan will be used to help fund the balance of Charles River's $750 million share repurchase program announced in 2010. The ratings on Charles River continue to reflect the company's leading positions in the research model and preclinical trial services markets, internally generated cash in excess of the company's needs, and management's demonstrated willingness to operate with an intermediate financial risk profile over the long term. The company's relatively narrow focus and the current uncertainty in pharmaceutical R&D spending patterns -- especially in the pre-clinical space, where Charles River mainly operates -- temper those strengths. Charles River's revenues are derived from its leading positions in research models and related services (RMS, about 60% of total revenues), and preclinical services (PCS, 40%). Following the new debt, adjusted debt leverage at Charles River will increase to roughly 3.6x and funds from operations to total debt will drop to sub-30%, measures that are inconsistent with an intermediate financial risk profile. However, the company's free cash flows remain solid and while S&P estimate that Charles River's PCS division will continue to be challenged in 2011, S&P also believe the industry has stabilized following the 2009 downturn and should follow the ongoing recovery in the broader contract pharma research industry. As such, S&P estimate that potential revenue declines in Charles River's PCS division in 2010 should be limited to low single digits. In the meantime, Charles River's more resilient RMS business should generate low single digit growth. More importantly, S&P believes that management remains committed to an intermediate financial risk profile and that the company will restore debt leverage and FFO/debt to the sub-3x range and greater than 30%, respectively, within the next couple of years. Charles River's liquidity is also considered strong, because of its significant cash balances, expected positive free cash flows, limited near-term debt maturities, and access to its revolver. Ratings List Charles River Laboratories International Inc. Corporate Credit Rating BBB-/Negative/-- Senior Unsecured BB+ Ratings Assigned Senior secured $150 million term loan BBB- CHATSWORTH INDUSTRIAL: April 28 Plan Confirmation Hearing Set ------------------------------------------------------------- The Hon. Maureen A. Tighe of the U.S. Bankruptcy Court for the Central District of California has approved the disclosure statement describing Chatsworth Industrial Park, LP's second amended Chapter 11 plan. The Court will hold a hearing on April 28, 2011, for the confirmation of the Second Amended Plan. The deadline for voting for or against the Plan is March 31, 2011. The original iteration of the Plan was filed Aug. 23, 2010. A copy of the Second Amended Disclosure Statement is available for free at http://bankrupt.com/misc/Chatsworth_AmendedDS.pdf Treatment of Claims Unclassified Claims Under the second amended plan, the Debtor will need to pay about $51,950 worth of administrative claims on the Effective Date of the Plan unless the claimants have agreed to a different treatment or the Court has not yet ruled on the claim. The Debtor will have approximately $70,000 of cash on hand on the Effective Date of the Plan. In the original plan, the Debtor wrote that administrative claims totaled $41,950. About $800 in priority tax claims will be paid on the effective date. Classified Claims Class 1 - secured claim of CSFB 2003-C4 Nordhoff Limited Partnership/Keybank is impaired. The terms of the original Note will be modified as: (i) all arrears to be rolled into the existing loan and reamortized over a hypothetical 30 years from the Effective Date at the existing contract rate of interest of 6.3%, with principal and interest payments estimated to be in the amount of $48,302.55 per month from the Effective Date forward; and (ii) notwithstanding any and all provisions of the Note and loan documents to the contrary, on the Effective Date, the maturity date under the Note will be modified to be April 1, 2016, at which time remaining principal and all matured and unpaid interest, fees, and charges allowable and due after the Effective Date pursuant to the plan shall be due and payable on April 1, 2016. The existing escrow/reserve accounts will remain unaltered by the Plan, and the Debtor will continue paying into accounts as currently required. In the original plan, the Debtor proposed that, among other things, (i) arrears in the amount of $293,281.57 would be cured in 32 equal monthly installments of $9,165.05 per month beginning on the Effective Date and continuing every 30 days thereafter until August 2013; and (ii) arrears could be prepaid in whole or in part at any time without pre-payment penalty, and, in the case of partial prepayment, the Debtor would be entitled to reduce the remaining monthly payments on the arrears so as to complete the cure of the amount then still owing within the 32 month period, payments to remain equal. Class 2 - allowed general unsecured claims are impaired. Claims will be paid up to $1,431.08 per month for 60 months. The total amount of allowed claims is up to $85,062.34, and total payout will be up to $85,864.71. In the original plan, the total amount of Class 2 claims was up to $95,561.69. In the original plan, the Debtor had proposed to pay up to $1,592.70 per month, which would lead to a total payout of up to $95,561.69. Class 3 - interest holder claims are unimpaired. Holders will retain interests. Procedures Implemented to Resolve Financial Problems Sharon Lynne Boyar, president & sole shareholder of Boyar Management Corp., the Debtor's 99% general partner, will continue to manage the Debtor's affairs post-confirmation. The Debtor continued to self-manage its property to better control cash flow and expenditures. The Debtor was managed before the bankruptcy by certain management companies. However, due to certain difficulties with certain of those companies, Ms. Boyar has managed the Debtor's affairs for several months before the bankruptcy and during the bankruptcy, and will continue to do so thereafter, at least in the short term. Her compensation was set by the Court at 5% of the rents. At some point, the Debtor may formally engage the services of CBI Partners, Inc. In addition, Ms. Boyar's son, Alan Smokler, has performed much of the maintenance work on the property, ever since Ms. Boyar began managing the property, resulting in significant savings compared to what independent contractors would charge for the same work. The Debtor was able to resume full payments to CSFB/Keybank from the outset of the case, including principal, interest, and escrow payments, and is post-petition current on all such payments to date. The Debtor is continuing to pursue a potential refinance of the property, and is continuing to explore methods by which a sale might be feasible, like a tax-deferred exchange, so as to more quickly pay off CSFB/Keybank and all other creditors of the estate. About Chatsworth Industrial Tarzana, California-based Chatsworth Industrial Park, LP, owns and operates five adjacent industrial properties in Chatsworth, California. It filed for Chapter 11 on Dec. 23, 2009 (Bankr. C.D. Calif. Case No. 09-27368). Caceres & Shamash, LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated assets at $10 million to $50 million and $1 million to $10 million in debts. 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 97.77 cents- on-the-dollar during the week ended Friday, February 25, 2011, a drop of 0.59 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. 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 180 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 Jan. 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. CLASSICSTAR LLC: Bucks Baker Hostetler in Fee Appeal ---------------------------------------------------- Bankruptcy Law360 reports that Chief Judge Jennifer B. Coffman of the U.S. District Court for the Eastern District of Kentucky has overturned a bankruptcy court's decision in favor of Baker Hostetler in a dispute over $848,000 in attorneys' fees with the Chapter 7 trustee of ClassicStar LLC. About ClassicStar LLC Headquartered in Lexington, Kentucky, ClassicStar LLC operated as a thoroughbred horse breeder. The Company also leased horses and rents out the reproductive systems of select thoroughbred mares. The Company filed for Chapter 11 protection Sept. 14, 2007 (Bankr. E.D. Ky. Case No.07-51786). Attorneys at Henry Watz Gardner Sellars & Gardner, PLLC, represented the Debtor while attorneys at Stites & Harbison, PLLC, represented the Creditors Committee. In April 2008, Judge William S. Howard converted the case to a Chapter 7 liquidation, at the behest of the U.S. Trustee. In its petition, the Debtor said assets totalled T $227 million, comprised of account receivable from National Equine Lending Corp., and debts of $72.7 million. 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 91.55 cents-on-the-dollar during the week ended Friday, February 25, 2011, a drop of 0.44 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 365 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 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 180 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 a $7.20 billion 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. In February 2011, Standard & Poor's affirmed it 'CCC+' corporate credit rating and positive outlook on CC Media Holdings and operating subsidiary Clear Channel, which S&P views on a consolidated basis. S&P said the 'CCC+' corporate credit rating on CC Media Holdings Inc. reflects the risks surrounding the longer-term viability of the company's capital structure--in particular, refinancing risk relating to sizable secured debt maturities in 2014 ($3.2 billion pro forma for the transaction) and 2016 ($10.4 billion). In S&P's view, the company has a satisfactory business risk profile, due to its position as the largest radio and global outdoor advertising operator, its good geographic and market diversity, and moderate long-term growth prospects at the outdoor business. S&P views the financial risk profile as highly leveraged, given the company's significant refinancing risk, roughly break-even EBITDA coverage of interest expense, and slim discretionary cash flow. CLEAR CHANNEL: Extends Maturities of Sr. Credit Facilities ---------------------------------------------------------- Clear Channel Communications, Inc., has entered into agreements to amend its senior secured credit facilities and its receivables based credit facility that will, among other things, permit CCU to request future extensions of the maturities of its senior secured credit facilities, provide CCU with greater flexibility in the use of its accordion provisions, provide CCU with greater flexibility to incur new debt, provided that such new debt is used to pay down senior secured credit facility indebtedness, and provide greater flexibility for CCU's indirect subsidiary, Clear Channel Outdoor Holdings, Inc., and its subsidiaries to incur new debt. The Amendments have been fully executed by CCU and the holders of a majority of the outstanding commitments under each of the facilities. The Amendments will become fully effective upon the payment of amendment fees, the reduction of revolving credit commitments under CCU's receivables based credit facility and the prepayment of $500 million of indebtedness under CCU's senior secured credit facilities, which CCU is financing through the issuance of new priority guarantee notes in a concurrent private placement that priced on Feb. 15, 2011 and is expected to close on Feb. 23, 2011. Full-text copies of the Amendments are available for free at: http://ResearchArchives.com/t/s?73ec http://ResearchArchives.com/t/s?73ed 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 a $7.20 billion 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. In February 2011, Standard & Poor's affirmed it 'CCC+' corporate credit rating and positive outlook on CC Media Holdings and operating subsidiary Clear Channel, which S&P views on a consolidated basis. S&P said the 'CCC+' corporate credit rating on CC Media Holdings Inc. reflects the risks surrounding the longer-term viability of the company's capital structure--in particular, refinancing risk relating to sizable secured debt maturities in 2014 ($3.2 billion pro forma for the transaction) and 2016 ($10.4 billion). In S&P's view, the company has a satisfactory business risk profile, due to its position as the largest radio and global outdoor advertising operator, its good geographic and market diversity, and moderate long-term growth prospects at the outdoor business. S&P views the financial risk profile as highly leveraged, given the company's significant refinancing risk, roughly break-even EBITDA coverage of interest expense, and slim discretionary cash flow. CLEAR CHANNEL: Inks Pact to Issue $1-Bil. of 9.0% Guarantee Notes ----------------------------------------------------------------- On Feb. 15, 2011, Clear Channel Communications, Inc., an indirect subsidiary of CC Media Holdings, Inc., entered into a Purchase Agreement, by and among CCU, CCU's parent, Clear Channel Capital I, LLC, certain subsidiary guarantors named therein, and Goldman, Sachs & Co. and Citigroup Global Markets Inc., as representatives of the several initial purchasers, relating to the issuance and sale of $1,000,000,000 in aggregate principal amount of CCU's 9.0% Priority Guarantee Notes due 2021. The Notes will be fully and unconditionally guaranteed, jointly and severally, on a senior basis by CCU's parent, Clear Channel Capital I, LLC, and all of CCU's existing and future domestic wholly-owned restricted subsidiaries. The Notes and the related guarantees will be secured by (1) a lien on (a) the capital stock of CCU and (b) certain property and related assets that do not constitute "principal property", in each case equal in priority to the liens securing the obligations under CCU's senior secured credit facilities and (2) a lien on the accounts receivable and related assets securing CCU's receivables based credit facility junior in priority to the lien securing CCU's obligations thereunder. The Notes will be offered and sold only to qualified institutional buyers in an unregistered offering pursuant to Rule 144A under the Securities Act of 1933, as amended and to certain non-U.S. persons in transactions outside the United States in reliance on Regulation S under the Act. The Purchase Agreement under which the Notes will be sold by CCU contains customary representations, warranties and agreements by CCU and the Guarantors, and customary conditions to closing, indemnification obligations of CCU and the Guarantors, including for liabilities under the Act, other obligations of the parties and termination provisions. CCU intends to use the proceeds of this offering together with cash on hand to repay $500 million of the indebtedness outstanding under its senior secured credit facilities, to repay at maturity $500 million in aggregate principal amount of its 6.25% Senior Notes due 2011, to pay fees and expenses incurred in connection with concurrent amendments to its senior secured credit facilities and its receivables based credit facility, the receipt of which is a condition to completion of the offering, and to pay fees and expenses in connection with the offering. 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 a $7.20 billion 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. In February 2011, Standard & Poor's affirmed it 'CCC+' corporate credit rating and positive outlook on CC Media Holdings and operating subsidiary Clear Channel, which S&P views on a consolidated basis. S&P said the 'CCC+' corporate credit rating on CC Media Holdings Inc. reflects the risks surrounding the longer-term viability of the company's capital structure--in particular, refinancing risk relating to sizable secured debt maturities in 2014 ($3.2 billion pro forma for the transaction) and 2016 ($10.4 billion). In S&P's view, the company has a satisfactory business risk profile, due to its position as the largest radio and global outdoor advertising operator, its good geographic and market diversity, and moderate long-term growth prospects at the outdoor business. S&P views the financial risk profile as highly leveraged, given the company's significant refinancing risk, roughly break-even EBITDA coverage of interest expense, and slim discretionary cash flow. CLINCH MOUNTAIN: Case Summary & 10 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Clinch Mountain Hardwood Flooring, Inc. 1296 Hill Street Abingdon, VA 24210 Bankruptcy Case No.: 11-70357 Chapter 11 Petition Date: February 23, 2011 Court: United States Bankruptcy Court Western District of Virginia (Roanoke) Judge: William F. Stone Jr. Debtor's Counsel: John M. Lamie, Esq. BROWNING LAMIE & GIFFORD P.O. Box 519 Abingdon, VA 24212-0519 Tel: (276) 628-6165 E-mail: jlamie@blglaw.us Scheduled Assets: $1,369,777 Scheduled Debts: $1,422,029 A list of the Company's 10 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vawb11-70357.pdf The petition was signed by Teresa Boyd, president. COLONIAL BANCGROUP: Court Approves Disclosure Statement ------------------------------------------------------- BankruptcyData.com reports that Colonial BancGroup filed with the U.S. Bankruptcy Court a Third Amended Disclosure Statement accompanying the Debtors' Second Amended Chapter 11 Plan of Liquidation which the Court subsequently approved. BData relates that some of the creditor treatment includes: -- administrative claims, priority tax claims and priority non-tax claims will be paid in full; -- convenience class claims will recover 75%; -- general unsecured claims, statutorily subordinated and claims indenture claims will receive a portion of available cash after priority claims have been paid in full and money is reserved for disputed claims; and -- equity interests will be cancelled. The Court scheduled a hearing to consider the Plan for May 11, 2011. About The Colonial BancGroup Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc., (NYSE: CNB) owned Colonial Bank, N.A, its banking subsidiary. Colonial Bank -- http://www.colonialbank.com/-- operated 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. On August 14, 2009, Colonial Bank was seized by regulators and the Federal Deposit Insurance Corporation was named receiver. The FDIC sold most of the assets to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion in assets and assumed $20 billion in deposits of the Bank. The Colonial BancGroup filed for Chapter 11 bankruptcy protection (Bankr. M.D. Ala. Case No. 09-32303) on August 25, 2009. W. Clark Watson, Esq., at Balch & Bingham LLP, and Rufus T. Dorsey IV, Esq., at Parker Hudson Rainer & Dobbs LLP, assist the Debtor. The Debtor disclosed $45 million in total assets and $380 million in total liabilities as of the Petition Date. In September 2009, an Official Committee of Unsecured Creditors was formed consisting of three members, Fine Geddie & Associates, The Bank of New York Trust Company, N.A., and U.S. Bank National Association. Burr & Forman LLP and Schulte Roth & Zabel LLP serve as co-counsel for the Committee. Colonial Brokerage, a wholly owned subsidiary of Colonial BancGroup, filed for Chapter 7 protection with the U.S. Bankruptcy Court in the Middle District of Alabama in June 2010. Susan S. DePaola serves as Chapter 7 trustee. CONSOLIDATED HORTICULTURE: Judge Urged to Deny Improper Sale ------------------------------------------------------------ Dow Jones' DBR Small Cap reports that unsecured creditors are seeking to block Hines Nurseries LLC from selling its assets through a sale process they say is set up for the sole benefit of the commercial nursery operator's lenders, a group that the creditors are hoping to sue. As reported in the Troubled Company Reporter on Feb. 17, 2011, Hines Nurseries Inc., which was purchased in a bankruptcy sale in January 2009 by Black Diamond Capital Management LLC, was scheduled to convene an auction on Feb. 25. Hines Nurseries, which returned to Chapter 11 in October 2010, set a Feb. 23 deadline for bids. The hearing for approval of the sale will take place Feb. 28. In addition to being the owner, Black Diamond's affiliate, Black Diamond Commercial Finance LLC, is a secured creditor holding all of the $8 million term loan and a $16 million subordinated loan. Black Diamond also holds 53% of the $48.6 million asset-backed loan. About Consolidated Horticulture Irvine, California-based Consolidated Horticulture Group LLC, doing business as Hines Nurseries LLC -- http://www.hineshorticulture.com/-- operates nursery facilities located in Arizona, California, Oregon and Texas. Through its affiliate, the company produces and distributes horticultural products. Black Diamond Capital Management LLC purchased Hines Nurseries Inc. in a bankruptcy sale in January 2009. The resulting reorganization plan, confirmed in January 2009, paid secured creditors in full on their $35.9 million in claims while providing as much as $12 million toward debt owing to suppliers both before and after the bankruptcy filing. The business bought by Black Diamond was renamed to Consolidated Horticulture. Consolidated Horticulture and its affiliates filed for Chapter 11 protection on Oct. 12, 2010 (Bankr. D. Del. Lead Case No. 10-13308). Laura Davis Jones, Esq. and Timothy P. Cairns, Esq. at Pachulski Stang Ziehl & Jones LLP, serve as Delaware counsel to the Debtors. Attorneys at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., serve as bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Lowenstein Sandler PC as counsel and Blank Rome LLP as co-counsel. Consolidated Horticulture estimated $100 million to $500 million in assets and $50 million to $100 million in debts in the Chapter 11 petition. CONTESSA PREMIUM: Proofs of Claim Due By March 25, 2011 ------------------------------------------------------- The U.S. Bankruptcy Court directs creditors of Contessa Premium Foods, Inc., to file proofs of claim asserting claims arising prior to Jan. 26, 2011, by Mar. 25, 2011. Governmental units have until July 25, 2011, to file their proofs of claim. Questions about the claims bar date should be directed to Craig A. Wolfe, Esq., at (212) 808-7800. About Contessa Premium Foods San Pedro, California-based Contessa Premium Foods, Inc., fka ZB Industries, Inc., and Contessa Food Products, Inc., provides farm raised shrimp, convenience meals, stir-fry vegetables, and other frozen food products that are marketed and sold primarily in the United States and to a lesser extent in Canada, Europe, Asia, and Mexico. It divides its business into two internal groups: Contessa Seafood, which includes its seafood items, and Contessa "Green Cuisine," which includes all other fruit, vegetable and complete meal blends. Contessa Premium filed for Chapter 11 bankruptcy protection on Jan. 26, 2011 (Bankr. C.D. Calif. Case No. 11-13454). Craig A. Wolfe, Esq., at Kelley Drye & Warren LLP, and Jeffrey W. Dulberg, Esq., and Scotta E. McFarland, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $50 million to $100 million. CONTESSA PREMIUM: Scouler & Co. Soliciting Bids for Assets ---------------------------------------------------------- Contessa Premium Foods, Inc., included a statement in its notice to creditors about Mar. 25, 2011, deadline to file proofs of claim that anyone interested in purchasing the Debtor's interest in a 112,000 square-foot state-of-the-art, environmentally friendly food processing plan located in Commerce, Calif., or substantially all of the Debtor's assets as a going concern, or other portion of the Debtor's estate, should contact Savid Scouler at Scouler & Company at (310) 207-2244. The Debtor says that the Commerce Plant is certified by the United States Green Building Council's Leadership in Energy and Environmental Design New Construction green building rating system. The plant, which achieved a Gold- level certification, uses advanced design, cutting-edge technology, and innovative processes, significantly reducing its environmental impact, the Debtor adds. About Contessa Premium Foods San Pedro, California-based Contessa Premium Foods, Inc., fka ZB Industries, Inc., and Contessa Food Products, Inc., provides farm raised shrimp, convenience meals, stir-fry vegetables, and other frozen food products that are marketed and sold primarily in the United States and to a lesser extent in Canada, Europe, Asia, and Mexico. It divides its business into two internal groups: Contessa Seafood, which includes its seafood items, and Contessa "Green Cuisine," which includes all other fruit, vegetable and complete meal blends. Contessa Premium filed for Chapter 11 bankruptcy protection on Jan. 26, 2011 (Bankr. C.D. Calif. Case No. 11-13454). Craig A. Wolfe, Esq., at Kelley Drye & Warren LLP, and Jeffrey W. Dulberg, Esq., and Scotta E. McFarland, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $50 million to $100 million. CRYOPORT INC: Enters 2nd Round of Private Placement for $4.9MM -------------------------------------------------------------- On Feb. 14, 2011, CryoPort, Inc., entered into definitive agreements for the second and final round of the previously announced private placement of its securities to certain institutional and accredited investors for aggregate gross proceeds of an additional $4,918,740 (approximately $4,344,000 after estimated cash offering expenses) pursuant to the Securities Purchase Agreement between the Registrant and the Investors and the Registration Rights Agreement among the Cryport, Emergent Financial Group, Inc., Maxim Group LLC, and the Investors. This second and final round is in addition to the initial closing of 6,335,318 units for $4.4 million in proceeds announced on Feb. 7, 2011. The Company intends to use the net proceeds for working capital purposes. Pursuant to the Purchase Agreement executed in connection with the second closing, the Investors purchased an aggregate of 7,026,771 units at a price of $0.70 per Unit, with each Unit consisting of (i) one share of common stock of the Registrant and (ii) one warrant to purchase one share of Common Stock at an exercise price of $0.77 per share. The warrants are immediately exercisable and have a term of five years. Pursuant to the Registration Rights Agreement, the Company is obligated to file a registration statement with the Securities and Exchange Commission registering the resale of the shares of Common Stock issued to the Investors and the shares of Common Stock underlying the warrants issued to the Investors within 90 days following the close of the transaction. The Registration Rights Agreement also provides for (i) certain payments by the Company to the Investors if such registration statement is not filed within such period and (ii) indemnification by each of the Company and the Investors to the other party and certain affiliates of such party against certain liability related to such registration statement. Emergent Financial Group, Inc. and Maxim Group LLC served as the Company's placement agents in this transaction and received, in the aggregate, commissions of up to 10% and a non-accountable finance fee of up to 3% of the aggregate gross proceeds received from the Investors, plus reimbursement of accountable out-of- pocket expenses, and were issued warrants to purchase 689,619 and 437,143 shares of Common Stock, respectively, at an exercise price of $0.77 per share. The sale and issuance of the Units, the Common Stock, and the warrants was completed in accordance with the exemption provided by Rule 505 or Rule 506 of Regulation D of the Securities Act of 1933, as amended, and Section 4(2) of the Securities Act. M. Bartholomew Resigns Michael Bartholomew, chief commercialization officer of the Company, resigned effective on Feb. 15, 2011. Mr. Bartholomew may consult on specific projects in the future. Larry Stambaugh, chief executive officer of the Company, will be responsible for managing the Company's sales and marketing efforts until a new Chief Commercialization Officer is retained and appointed. About CryoPort Inc. Headquartered in Lake Forest, Calif., CryoPort, Inc. (OTC BB: CYRXD) -- http://www.cryoport.com/-- provides innovative cold chain frozen shipping system dedicated to providing superior, affordable cryogenic shipping solutions that ensure the safety, status and temperature of high value, temperature sensitive materials. The Company has developed a line of cost-effective reusable cryogenic transport containers capable of transporting biological, environmental and other temperature sensitive materials at temperatures below 0-degree Celsius. At Sept. 30, 2010, the Company had total assets of $5.37 million, total liabilities of $5.53 million, and a stockholders' deficit of $153,700. KMJ Corbin & Company LLP expressed substantial doubt about CryoPort's ability to continue as a going concern, following the Company's 2009 results. The firm noted that the Company has incurred recurring losses and negative cash flows from operations since inception. CUMULUS MEDIA: Bank Debt Trades at 2% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Cumulus Media, Inc., is a borrower traded in the secondary market at 98.15 cents- on-the-dollar during the week ended Friday, Feb. 25, 2011, an increase of 1.35 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. 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 180 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 January 31, 2011, said that there is no operational nor immediate credit impact upon closing of Cumulus Media Inc.'s 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. DAIRY PRODUCTION: Creditors Angle for Stay Relief ------------------------------------------------- American Bankruptcy Institute reports that several creditors of Dairy Production Systems-Georgia LLC may want to seize the collateral securing their claims, but they will have to wait until April 19 to see if a bankruptcy court grants their requests. About Dairy Production Baconton, Georgia-based Dairy Production Systems - Georgia LLC, dba Dairy Production Systems, was formed in November of 2008 and owns the operating assets acquired from Aurora Dairy - Georgia, LLC, exclusive of the real property owned by Aurora-Georgia. DPS Georgia owns approximately 3,490 head of cattle, along with equipment and dairy improvements located on a 1,065-acre farm leased from Aurora-Georgia. DPS Georgia filed for Chapter 11 bankruptcy protection (Bankr. M.D. Ga. Case No. 10-11752) on Oct. 7, 2010. Neil C. Gordon, Esq., and Sean C. Kulka, Esq., at Arnall Golden Gregory LLP, serves as the Debtor's bankruptcy counsel. DPS Georgia estimated its assets at $1 million to $10 million and debts at $10 million to $50 million at the Petition Date. Affiliates Dairy Production Systems - Mississippi, LLC (Bankr. M.D. Ga. Case No. 10-11755), Dairy Production Systems, LLC (Bankr. M.D. Ga. Case No. 10-11754), Heifer Haven, LLC (Bankr. M.D. Ga. Case No. 10-11757), and New Frontier Dairy, LLC (Bankr. M.D. Ga. Case No. 10-11756), filed separate Chapter 11 petitions. Dairy Production Systems, LLC, estimated its assets and debts at $10 million to $50 million at the Petition Date. The cases are jointly administered, with Dairy Production Systems - Georgia as lead case. DEX MEDIA EAST: Bank Debt Trades at 21% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media East LLC is a borrower traded in the secondary market at 79.43 cents-on- the-dollar during the week ended Friday, Feb. 25, 2011, a drop of 0.90 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. 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 180 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. The Official Committee of Unsecured Creditors tapped Ropes & Gray LLP as its counsel, Cozen O'Connor as Delaware bankruptcy co-counsel, J.H. Cohn LLP as its financial advisor and forensic accountant, and The Blackstone Group, LP as its financial and restructuring advisor. The Debtors emerged from Chapter 11 bankruptcy proceedings at the end of January 2010. DEX MEDIA WEST: Bank Debt Trades at 8% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Dex Media West LLC is a borrower traded in the secondary market at 91.96 cents-on- the-dollar during the week ended Friday, Feb. 25, 2011, a drop of 0.58 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on October 24, 2014, and is not rated. The loan is one of the biggest gainers and losers among 180 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Dex Media East Dex Media West LLC is a subsidiary of Dex Media West, Inc., and an indirect wholly owned subsidiary of Dex Media, Inc. Dex Media is a direct wholly owned subsidiary of R.H. Donnelley Corporation. Dex Media West is the exclusive publisher of the official yellow pages and white pages directories for Qwest Corporation, the local exchange carrier of Qwest Communications International, Inc., in Arizona, Idaho, Montana, Oregon, Utah, Washington, and Wyoming. 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 represented the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, served as the Debtors' local counsel. The Debtors' financial advisor was Deloitte Financial Advisory Services LLP while its investment banker was Lazard Freres & Co. LLC. The Garden City Group, Inc., was claims and noticing agent. The Official Committee of Unsecured Creditors tapped Ropes & Gray LLP as its counsel, Cozen O'Connor as Delaware bankruptcy co- counsel, J.H. Cohn LLP as its financial advisor and forensic accountant, and The Blackstone Group, LP as its financial and restructuring advisor. The Debtors emerged from Chapter 11 bankruptcy proceedings at the end of January 2010. DFM BENTONVILLE: Case Summary & 15 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: DFM Bentonville, LLC 2935 North Arkansas Street Rogers, AR 72756 Bankruptcy Case No.: 11-70740 Chapter 11 Petition Date: February 23, 2011 Court: United States Bankruptcy Court Western District of Arkansas (Fayetteville) Judge: Ben T. Barry Debtor's Counsel: Donald A. Brady, Jr., Esq. BLAIR, BRADY & HENSON 109 N. 34th Street P.O. Box 1715 Rogers, AR 72756 Tel: (479) 631-0100 Fax: (479) 631-8052 E-mail: dblaw0887@hotmail.com Scheduled Assets: $2,520,100 Scheduled Debts: $523,517 A list of the Company's 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/arwb11-70740.pdf The petition was signed by Wanda Munson, president. DISH NETWORK: Reports $984.73 Million Net Income in 2010 -------------------------------------------------------- DISH Network Corporation filed its annual report on Form 10-K with the U.S. Securities and Exchange Commission reporting net income of $984.73 million on $12.64 billion of total revenue for the year ended Dec. 31, 2010, compared with net income of $635.40 million on $11.66 billion of revenue for the same period a year ago. The Company's balance sheet at Dec. 31, 2010 showed $9.63 billion in total assets, $10.76 million in total liabilities and $1.13 billion in total stockholders' deficit. A full-text copy of the annual report on Form 10-K is available for free at http://ResearchArchives.com/t/s?7400 About DISH Network DISH Network Corporation is the third largest pay television provider in the United States with 14.1 million subscribers as of Dec. 31, 2009. Annual revenues approximate $11.6 billion. * * * At the end of January 2011, Fitch Ratings affirmed the 'BB-' Issuer Default Rating assigned to DISH Network and its wholly owned subsidiary DISH DBS Corporation. Fitch has also affirmed the 'BB-' rating assigned to the senior unsecured notes issued by DDBS Corporation. Additionally, Fitch has revised DISH's Rating Outlook to Stable from Negative. As of Sept. 30, 2010, DISH had approximately $6.5 billion of debt outstanding. The Stable Outlook recognizes the operational rebound DISH has experienced during 2010. Overall, Fitch's ratings reflect the operating leverage derived from DISH's size and scale as the third largest multi-channel video programming distributor in the U.S. and Fitch's expectation for continued, albeit pressured free cash flow generation. Dish Network carries a 'Ba3' corporate family rating, with "stable outlook", from Moody's. Moody's said that Dish Network's Ba3 Corporate Family Rating and stable outlook are not affected by the company's announcement that it has entered into an agreement to acquire 100% of the equity of the reorganized DBSD North America, Inc., a hybrid satellite and terrestrial communications company, for approximately $1 billion including interest accruing on DBSD North America's existing debt. * * * This concludes the Troubled Company Reporter's coverage of DBSD Network until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. DONALD BERKEBILE: Succeeds in Strip Down of Federal Tax Lien ------------------------------------------------------------ WestLaw reports that a Chapter 11 debtor could strip down a federal tax lien by bifurcating the government's claim based on the value of the property that secured it and modifying the claim pursuant to his plan. There was nothing about the nature of the tax lien to protect the government from lien stripping. The debtor, in seeking a determination of the value of property securing the IRS's claim, for purposes of bifurcation and strip down, was not seeking to enjoin assessment or collection of any tax in violation of the Anti-Injunction Act. In re Berkebile, --- B.R. ----, 2011 WL 590450 (Bankr. W.D. Pa.) (Fitzgerald, J.). A copy of the Honorable Judith K. Fitzgerald's Memorandum Opinion dated Feb. 17, 2011, in Berkebile v. OCWEN Loan Servicing, LLC, et al., Adv. Pro. No. 09-02230 (Bankr. W.D. Pa.), is available at: http://is.gd/WEaTOMfrom Leagle.com The Debtor's entire battle with the IRS is not over. While Judge Fitzgerald says that under 11 U.S.C. Sec. 506(a), the Debtor may seek to value the secured claim of the IRS, and under 11 U.S.C. Sec. 506(d), the lien as to any unsecured portion thereof will be void against the Debtor's real estate, a trial is necessary to determine of the amount of the IRS' allowed secured claim. The Debtor and the government will be back in front of Judge Fitzgerald on Mar. 4, 2011, for a status conference about how to proceed. Donald J. Berkebile and Katherine E. Ward filed a chapter 11 petition (Bankr. W.D. Penn. Case No. 08-21759) on Mar. 19, 2008, and are represented by Donald R. Calaiaro, Esq. -- dcalaiaro@calaiarocorbett.com -- at Calaiaro & Corbett, P.C., in Pittsburgh, Pa. At the time of the filing, the Debtors estimated their assets and debts at less than $500,000. DREIER LLP: Preparing to Destroy Clients' Files ----------------------------------------------- The Chapter 11 Trustee for Dreier LLP has sought and obtained permission to dispose of certain client files that remain in the defunct law firm's possession, and intends to destroy files that client's don't ask to be returned. For more information, contact: Jason Porter, Esq. DIAMOND MCCARTHY LLP 620 Eighth Avenue, 29th Floor New York, NY 10018 Telephone: 212-430-5400 Fax: 212-430-5499 E-mail: DLLPfiles@diamondmccarthy.com About Dreier LLP Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On Dec. 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. DYNEGY INC: Nomination for Directors Extended to March 4 -------------------------------------------------------- Dynegy Inc. extended the date for stockholders to provide notice of their intention to nominate directors for election at the 2011 annual meeting of Dynegy Stockholders from the close of business, Houston time, on Feb. 20, 2011 to the close of business, Houston time, on March 4, 2011. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE:DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. The Troubled Company Reporter has chronicled Dynegy's attempts to sell itself. In August 2010, Dynegy struck a deal to be acquired by an affiliate of The Blackstone Group at $4.50 a share or roughly $4.7 billion. That offer was raised to $5.00 a share in November. Through Icahn and Seneca's efforts, shareholders thumbed down both offers. On December 22, 2010, an affiliate of IEP commenced a tender offer to purchase all of the outstanding shares of Dynegy common stock for $5.50 per share in cash, or roughly $665 million in the aggregate. Goldman, Sachs & Co. and Greenhill & Co., LLC, are serving as financial advisors and Sullivan & Cromwell LLP is serving as legal counsel to Dynegy. * * * As reported by the Troubled Company Reporter on Nov. 26, 2010, Fitch Ratings downgraded the ratings of Dynegy Inc. and its subsidiaries: Dynegy Inc. Issuer Default Rating to 'CCC' from 'B-'; Dynegy Holdings, Inc. IDR to 'CCC' from 'B-'; Secured bank credit facilities and notes to 'B+/RR1' from BB-/RR1; Senior unsecured to 'CCC/RR4' from 'B/RR3'; and Dynegy Capital Trust I preferred to 'C/RR6' from 'CCC/RR6'. The downgrade reflects Fitch's belief that the rejection of The Blackstone Group's bid to acquire Dynegy for $5/share will likely lead to another transaction and capital restructuring by Dynegy's management as activist stockholders seek to maximize shareholder values. The downgrade also reflects the underperformance of Dynegy's merchant generation operations. In October 2010, Moody's Investors Service lowered the ratings of Dynegy Holdings, including its Corporate Family Rating, to 'Caa1' from 'B3' along with the ratings of various affiliates or parent company Dynegy Inc. The rating action followed the expiration of the 40-day "go shop" period, according to Moody's, increasing the probability that Dynegy will be acquired by an affiliate of The Blackstone Group L.P.. Moody's said Dynegy's financial profile is expected to be quite fragile, particularly during 2011 and 2012, when the company is projected to generate both negative operating cash flow and negative free cash flow due to weak operating margins and the required funding of their capital investment programs. To the extent that the transactions with Blackstone and NRG are not completed, Moody's said downward rating pressure at DHI and Dynegy will continue to exist given the weak financial prospects for the company over the next few years coupled with the liquidity concerns. In December 2010, Moody's said its ratings and negative rating outlook for Dynegy, Inc., and its subsidiary, Dynegy Holdings (Caa1 Corporate Family Rating) will remain unchanged following announcement of the Icahn deal. E & G CONCRETE: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: E & G Concrete Construction Company, Inc. dba E & G Construction, Inc. dba E & G Concrete Construction dba E & G Concrete dba E & G Concrete Services LLC 1470 North McNeil St Memphis, TN 38108 Bankruptcy Case No.: 11-21921 Chapter 11 Petition Date: February 23, 2011 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Judge: George W. Emerson Jr. Debtor's Counsel: William C. Gosnell, Esq. THE LAW OFFICE OF MR. WILLIAM C. GOSNELL 245 Exchange Avenue Memphis, TN 38105 Tel: (901) 521-1455 E-mail: wmcgosnell@aol.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 16 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/tnwb11-21921.pdf The petition was signed by Terry Charleston, owner. EASTMAN KODAK: Fitch Junks Issuer Default Rating From 'B-' ---------------------------------------------------------- Fitch Ratings has downgraded Eastman Kodak Company's ratings: -- Issuer Default Rating to 'CCC' from 'B-'; -- Senior secured revolving credit facility to 'B+/RR1' from 'BB- /RR1'; -- Senior secured second priority debt to 'B+/RR1' from 'BB- /RR1'; -- Senior unsecured debt to 'CCC/RR4' from 'B+/RR2'. The Rating Outlook is Negative. Fitch's actions affect approximately $1.6 billion in total debt, including undrawn amounts under the RCF. The rating downgrades and Negative Outlook reflect Kodak's continued struggles to gain traction in its digital businesses as secular declines persist and broaden to entertainment film within the traditional film business. Despite $838 million of non- recurring intellectual property licensing revenue and a stabilizing economic backdrop, Kodak's free cash flow deteriorated to negative $368 million in 2010 compared with negative $288 million in 2009 primarily driven by a nearly 12% decline in total revenue, the third consecutive year of double-digit revenue declines, excluding intellectual property income. Furthermore, the company experienced continued weakness in operating profit margins across all business segments in the fourth quarter of 2010 due to numerous factors, the majority of which Fitch believes will result in prolonged profitability challenges. Specifically, Kodak's operating margin declined 3.7 percentage point year-over- year to negative -1.6% in the fourth quarter due to pricing pressures in digital still cameras and consumer inkjet printers, a material increase in commodity costs, primarily silver, used in the manufacture of traditional film, and an oversupply of digital plates in the commercial print market. Lastly, Fitch believes adverse preliminary rulings with respect to Kodak's patent infringement claims against Apple and RIM in January 2011 add additional uncertainty regarding the availability of IP licensing revenue required to finance the company's growth initiatives. Although a near-term default appears unlikely given Kodak's significant cash position, Fitch believes the company's credit profile has deteriorated due to ongoing pressures on revenue, operating margin and free cash flow, which make it increasingly challenging for the company to achieve its transition to a digitally-focused, profitable enterprise within the context of its existing capital structure. Furthermore, in the absence of an unexpected improvement in financial performance, particularly free cash flow, Fitch believes Kodak's liquidity pressures could accelerate if the company is unsuccessful in renewing its $410 million secured RCF expiring in 2012 and/or refinancing $350 million of debt maturing in 2013. Kodak's ratings reflect: -- Expectations that growth and margin expansion in Kodak's digital businesses necessary to offset rapid secular decline in the high margin traditional film businesses will remain challenging even with stabilizing consumer and business spending; -- Significant competition and pricing pressure facing the company, particularly the Consumer Digital Imaging Group, from rivals with established market positions and greater financial resources than Kodak, compounded by moderating demand for digital still cameras; -- Persistent declines in the company's traditional film, photofinishing, and entertainment group as digital substitution continues at a faster pace in movie theaters and other areas, with accelerating margin deterioration attributable to decreased demand, negative revenue mix, and higher raw material costs including silver; -- Kodak's continued reliance and uncertainty of non-recurring IP licensing revenue which has provided a significant portion of digital revenues and cash flow in recent years; -- Significant liquidity reserves, with $1.6 billion in cash and approximately $200 million of RCF availability; -- Fitch's expectations that the company will not generate positive free cash flow in the foreseeable future due primarily to lower revenue and operating profit, compounded by cash restructuring payments and increased contributions to its defined benefit pension plans; -- Kodak's credit metrics improved with leverage (total debt/operating EBITDA) of 1.6 times (x) at Dec. 31, 2010, compared with 2.1x at year-end 2009, while interest coverage (operating EBITDA/ gross interest expense) increased from 3.0x in 2009 to 3.3x in 2010 benefiting from significant growth in non-recurring IP licensing revenue,. However, excluding IP revenue, year-over-year comparison of credit metrics were markedly unfavorable due to EBITDA of negative $87 million in 2010 compared with $134 million in 2009. Negative rating actions could occur if: -- Free cash flow over the next several quarters continues to decline, resulting in a substantial reduction in liquidity. As of Dec. 31, 2010, liquidity consisted of approximately $1.6 billion of cash and cash equivalents and an undrawn $410 million asset-based senior secured RCF, assuming sufficient collateral in terms of eligible receivables, inventory, real property and equipment. At Sept. 30, 2010, availability under the facility was $224 million net of $131 million of outstanding letters of credit. Financial covenants under the amended facility include a minimum of $250 million of U.S.-based cash, as well as a minimum fixed charge coverage ratio of 1.1x in the event that excess availability is below $100 million. The facility matures in March 2012. The Recovery Ratings reflect Fitch's belief that Kodak's enterprise value would be maximized in liquidation, rather than a going-concern scenario. In estimating liquidation, Fitch applies advance rates of 80%, 20%, and 10% to Kodak's accounts receivables, inventories, and property, plant, and equipment balances, respectively. Additionally, Fitch estimates the value of Kodak's IP at $250 million based on $100 million in revenue in perpetuity at a 40% discount rate. As is standard with Fitch's recovery analysis, the revolving credit facility is assumed to be fully drawn (up to its borrowing base) and cash balances fully depleted to reflect a stress event. Fitch arrives at an adjusted reorganization value of $1.4 billion after subtracting administrative claims. Based upon these assumptions, the 'RR1' for Kodak's secured bank facility and senior secured second-lien debt reflects Fitch's belief that 100% recovery is realistic. As a result of Kodak's guarantee of $920 million of aggregate payments to its United Kingdom defined benefit pension fund through 2022, Fitch includes this liability in the total senior unsecured claims. Therefore, Fitch estimates that the senior unsecured claims would recover approximately 35% in the event of default, supporting the 'RR4' (31%-50% recovery) for the senior unsecured debt. Total debt was approximately $1.4 billion as of Dec. 31, 2010, consisting of: -- $300 million of senior notes due 2013; -- $400 million of senior unsecured convertible notes due 2017; -- $500 million of senior secured second-lien notes due 2018; -- Approximately $150 million of various term notes with maturities from 2010-2013. EMPIRE RESORTS: Gets Non-Compliance Notice from NASDAQ ------------------------------------------------------ On Feb. 14, 2011, Empire Resorts, Inc., received notice from The NASDAQ Stock Market that, because the closing bid price for the Company's common stock has fallen below $1.00 per share for 30 consecutive business days, the Company no longer complies with the minimum bid price requirement for continued listing on the Nasdaq Global Market. Nasdaq's notice has no immediate effect on the listing of the Company's common stock on the Nasdaq Global Market. Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has been provided an initial compliance period of 180 calendar days, or until Aug. 15, 2011, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company's common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days prior to Aug. 15, 2011. If the Company does not regain compliance by Aug. 15, 2011, the Company may be eligible for an additional grace period if it applies to transfer the listing of its common stock to the Nasdaq Capital Market. To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price requirement, and provide written notice of its intention to cure the minimum bid price deficiency during the second compliance period. If the Nasdaq staff determines that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible for such additional compliance period, Nasdaq will provide notice that the Company's common stock will be subject to delisting. The Company would have the right to appeal a determination to delist its common stock, and the common stock would remain listed on the Nasdaq Global Market until the completion of the appeal process. The Company is considering actions that it may take in response to this notification in order to regain compliance with the continued listing requirements, but no decisions about a response have been made at this time. About Empire Resorts Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- owns and operates Monticello Casino & Raceway, a video gaming machine and harness racing track and casino located in Monticello, New York, 90 miles northwest of New York City. The Company's balance sheet at Sept. 30, 2010, showed $74.91 million in total assets, $63.20 million in total liabilities, and stockholders' equity of $11.71 million. Auditor Friedman LLP, in New York, after auditing the Company's 2009 results, said Empire Resorts' ability to continue as a going concern depends on the Company's ability to fulfill its obligations with respect to its $65 million of 5-1/2% senior convertible notes. Friedman also noted of the Company's continuing net losses and negative cash flows from operating activities. EPICEPT CORP: Incurs $15.54 Million Net Loss in 2010 ---------------------------------------------------- EpiCept Corporation announced operating and financial results for the fourth quarter and full year ended Dec. 31, 2010. The Company reported a net loss of $2.97 million on $291,000 of revenue for the three months ended Dec. 31, 2010, compared with a net loss of $4.44 million on $92,000 of revenue for the same period during the prior year. The Company also reported a net loss of $15.54 million on $994,000 for the year ended Dec. 31, 2010, compared with a net loss of $38.81 million on $414,000 of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010, showed $4.69 million in total assets, $3.38 million in accounts payable and other accrued liabilities, $13.82 million in deferred revenue, $972,000 in notes and loans payable and a $14.13 million stockholders' deficit. "EpiCept marked several important achievements since our last quarterly report," stated Jack Talley, EpiCept President and CEO. "We are delighted with the excellent clinical data we recently reported from the EpiCeptTM NP-1 trial studying chemotherapy- induced peripheral neuropathy (CIPN), which we believe confirms NP-1's utility in meeting a high unmet medical need in a large patient population. We also made important progress late last year by gaining agreement with the U.S. Food and Drug Administration that a trial for Ceplene(R)/IL-2 with survival as the primary endpoint need not isolate the contribution of Ceplene(R) in the regimen, but would need to show a statistically significant overall survival advantage for remission maintenance of patients suffering from acute myeloid leukemia. We believe this study has a very good probability of success. We are also closely following Meda's marketing of Ceplene(R) in the European Union and believe that they are pursuing a determined course of action that will ultimately result in significant penetration into the EU medical community." A full-text copy of the financial results is available at no charge at http://ResearchArchives.com/t/s?7407 About EpiCept Corporation Tarrytown, N.Y.-based EpiCept Corporation (Nasdaq and Nasdaq OMX Stockholm Exchange: EPCT) -- http://www.epicept.com/-- is focused on the development and commercialization of pharmaceutical products for the treatment of cancer and pain. The Company's lead product is Ceplene(R), approved in the European Union for the remission maintenance and prevention of relapse in adult patients with Acute Myeloid Leukemia (AML) in first remission. In the United States, a pivotal trial is scheduled to commence in 2011. The Company has two other oncology drug candidates currently in clinical development that were discovered using in-house technology and have been shown to act as vascular disruption agents in a variety of solid tumors. The Company's pain portfolio includes EpiCept(TM) NP-1, a prescription topical analgesic cream in late-stage clinical development designed to provide effective long-term relief of pain associated with peripheral neuropathies. * * * As reported in the Troubled Company Reporter on March 18, 2010, Deloitte & Touche LLP in Parsippany, New Jersey, expressed substantial doubt against EpiCept's ability continue as a going concern, following the Company's results for 2009. The independent auditors noted that the Company has recurring losses from operations and a stockholders' deficit of $9.1 million at Dec. 31, 2009. EX CED FOODS: Seeks Chapter 15 Protection in San Francisco ---------------------------------------------------------- Ex Ced Foods and an affiliate, Cedenco Ohakune, filed Chapter 15 petitions (Bankr. N.D. Calif. Lead Case No. 11-30703) in San Francisco, California on Feb. 25. Louis J Cisz III, John Sheahan, and Ian Russell Lock, the liquidators, signed the Chapter 15 petitions. The liquidators were appointed pursuant to Section 241(2)(b) of the Companies Act 1993, an act of the Parliament of New Zealand. The liquidators request the U.S. Court to enter an order recognizing the New Zealand Proceeding as a "foreign main proceeding" under Chapter 15. Exced Foods, formerly registered as "Tomco", was a food processor. The Debtors' sole shareholder is SK Foods International, a New Zealand company. The Australian and New Zealand Banking Group Ltd. has a debenture dated Feb. 24, 2000, and a General Security Agreement dated Nov. 1, 2005, against the Debtor's assets. The loans made to the Debtor by ANZ Bank were part of a larger lending relationship between ANZ Bank (in New Zealand under the name ANZ National Ltd) and all entities in the Cedenco group of companies in Australia and New Zealand, including the Cedenco Foods JV Australia Pty Ltd., SK Foods Australia Pty Ltd, SS Farms Australia Pty Ltd. and the two New Zealand companies, Ex Ced Foods, formerly Cedenco Foods Ltd. On Nov. 9, 2009, Cedenco Foods and Cedenco Ohakune were placed into receivership by ANZ Bank under New Zealand law. On Nov. 9, 2009, Cedenco Australia, SK Foods Australia, and SS Farms Australia were also placed into receivership under Australian law. According to Mr. Sheahan, in the United States, there have been difficulties involving the Cedenco Group's U.S. affiliates. SK Foods LP, a U.S. affiliate of the Cedenco Group, is the subject of Chapter 11 proceeding, and that there are criminal proceedings against one of the principals of SK Foods LP, Scott Salyer, pending, respectively, in U.S. Bankruptcy and District Courts of the Eastern District of California. Julian Long, Esq., attorney and a partner in the law firm LeeSalmonLong, was admitted as a barrister and solicitor of the High Court of New Zealand. EX CED FOODS: Chapter 15 Case Summary ------------------------------------- Chapter 15 Petitioner: John Sheahan, as liquidator Chapter 15 Debtor: Ex Ced Foods fka Cedenco Foods C/- KordaMentha, Level 16 45 Queen Street Auckland New Zealand Chapter 15 Case No.: 11-30703 Debtor-affiliate subject to separate Chapter 15 petition: Entity Case No. ------ -------- Cedenco Ohakune (Company No. 665068) (In Liquidation) 11-30704 Chapter 15 Petition Date: February 25, 2011 Court: U.S. Bankruptcy Court Northern District of California (San Francisco) Type of Business: The debtor is a leading food company based in New Zealand supplying agricultural food products to domestic and international customers. Petitioners' Counsel: Robert N. H. Christmas, Esq. Kate Hardy, Esq. Christopher M. Desiderio, Esq. NIXON PEABODY LLP 437 Madison Avenue, 18th Floor New York, NY 10022 Telephone: (212) 940-3000 Facsimile: (212) 940-3111 E-mail: rchristmas@nixonpeabody.com khardy@nixonpeabody.com cdesiderio@nixonpeabody.com - and - Louis J. Cisz, III, Esq. NIXON PEABODY LLP One Embarcadero Center, 18th Floor San Francisco, CA 94111-3600 Telephone: (415) 984-8200 Facsimile: (415) 984-8300 E-mail: lcisz@nixonpeabody.com Debtor's Counsel: Louis J. Cisz, III, Esq. NIXON PEABODY LLP One Embarcadero Center, 18th Floor San Francisco, CA 94111-3600 Tel: (415) 984-8320 Fax: (866) 246-2754 E-mail: lcisz@nixonpeabody.com FANNIE MAE: Lowers Net Loss to $14.02 Billion in 2010 ----------------------------------------------------- Federal National Mortgage Association filed its annual report on Form 10-K with the U.S. Securities and Exchange Commission reporting a net loss of $14.02 billion on $154.27 billion of total interest income for the year ended Dec. 31, 2010, compared with a net loss of $72.02 billion on $39.35 billion of total interest income during the prior year. The Company's balance sheet at Dec. 31, 2010 showed $3.222 trillion in total assets, $3.224 trillion in total liabilities and a $2.52 billion total deficit. Freddie Mac reported a net loss of $113 million for the quarter ended Dec. 31, 2010, compared to a net loss of $2.5 billion for the quarter ended Sept. 30, 2010. Freddie Mac also reported total comprehensive income of $1.2 billion in the fourth quarter of 2010, compared to total comprehensive income of $1.4 billion in the third quarter of 2010. The company reported total comprehensive income of $282 million for the full-year 2010, compared to a total comprehensive loss of $2.9 billion for the full-year 2009. A full-text copy of the annual report on Form 10-K is available for free at: http://ResearchArchives.com/t/s?7401 About Fannie Mae Federal National Mortgage Association, aka Fannie Mae, is a government-sponsored enterprise that was chartered by U.S. Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. Fannie Mae has been under conservatorship, with the Federal Housing Finance Agency acting as conservator, since September 6, 2008. As conservator, FHFA succeeded to all rights, titles, powers and privileges of the company, and of any shareholder, officer or director of the company with respect to the company and its assets. The conservator has since delegated specified authorities to Fannie Mae's Board of Directors and has delegated to management the authority to conduct day-to-day operations. The U.S. Department of the Treasury owns Fannie Mae's senior preferred stock and a warrant to purchase 79.9% of its common stock, and Treasury has made a commitment under a senior preferred stock purchase agreement to provide Fannie with funds under specified conditions to maintain a positive net worth. FORCELOGIX TECHNOLOGIES: Sale of Unit to Callidus Completed ----------------------------------------------------------- ForceLogix Technologies Inc. has completed the sale of the Company's wholly owned operating subsidiary, ForceLogix, Inc. pursuant to an Asset Purchase Agreement dated Dec. 23, 2010 between the Company, JP Funding, LLC and Callidus Software Inc. The Company held a special meeting of its shareholders on Feb. 25, 2011 to approve, among other things, the sale of all or substantially all of the undertaking of the Company. Shareholders have approved a special resolution (2/3 majority of votes cast) authorizing the Asset Sale. Disinterested shareholders also approved an ordinary resolution authorizing the termination of the Management and Operations Agreement dated Nov. 18, 2010 between JP Funding, LLC and ForceLogix Inc. including the payment of the $1,125,000 USD termination fee payable to JPF. JPF is a company controlled by John Prinz, a director and shareholder of the Company. Mr. Prinz was excluded from voting on the resolution to approve the termination of the Management Agreement and the payment of the termination fee. Subject to payment of the termination fee JPF is a secured creditor of the US Subsidiary. Disinterested shareholders also approved an ordinary resolution authorizing a shares for debt settlement of $1,678,055 of unsecured debt owed by the Company and the U.S Subsidiary through the issuance of 33,561,100 common shares of the Company at a deemed price of $0.05 per share. The common shares issuable under the shares for debt settlement are subject to a four month resale restriction in accordance with National Instrument 45-102 Resale of Securities. Messrs. Patrick Stakenas and Stephen Potts, directors and former officers of the Company, were excluded from voting on this resolution as they will be receiving common shares under the shares for debt settlement. Shareholders also approved a special resolution authorizing the change of the name of the Company to Courtland Capital Inc. The name change was required by Callidus as a condition of the Asset Purchase Agreement. A new trading symbol is expected to be announced in the forthcoming bulletin of TSX Venture Exchange. As a result of the shareholder approvals, all the closing conditions of the Asset Sale were satisfied and the transaction was completed. The Company has received from Callidus the initial payment of the purchase price of $3,000,000. From these sale proceeds the Company has paid out the termination fee to JPF, all secured creditors and certain unsecured creditors as a condition of closing. The balance of the purchase price, being $750,000, is subject to a holdback by Callidus for a 6 months period. Callidus is entitled to rely on the holdback in the event it is required to be indemnified by the Company under the provisions of the Asset Purchase Agreement. The holdback, subject to any indemnity, will be released to the Company within 6 months of today's date. Effective now, Patrick Stakenas and Stephen Potts have resigned as directors of the Company and the directors of the Company are now Richard Grass, Gene Maher and John Prinz. Richard Grass will be the President and Chief Financial Officer and Gene Maher will be the Chief Executive Officer. As the Asset Sale and related transactions were subject to the approval of the Exchange the Company will be filing the required post meeting documentation with Exchange to satisfy the conditional approval granted by the Exchange. It is anticipated that the Exchange will issue a bulletin announcing the completion of the transaction in due course. As a result of the sale of the US Subsidiary, the Company will no longer meet the listing requirements of either Tier 1 or Tier 2 of the TSX Venture Exchange. The Company has applied to have its listing transferred to NEX. As the Company is in compliance with all applicable securities rules and policies it is expected that the Company will move to the NEX in due course. Once listed on the NEX, the Company intends to use a the balance of the purchase price proceeds from the Asset Sale to maintain its regulatory compliance and to source and acquire another business with a view to reactivating the Company. FOX HILL: Can Use BWF-FHM LOan Cash Collateral Until March 31 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia has granted Fox Hill Mutual Homes, Inc., interim permission to use the cash collateral in which Lender BWF-FHM Loan, LLC, asserts an interest for the period Jan. 29, 2011, through March 31, 2011, to pay for the expenses of operating its 252 unit residential complex located at 200 Ranalet Drive, in Hampton, Va., in accordance with a modified budget. The Debtor's use of cash collateral will continue until the earlier of (a) the Debtor's breach of this order, or (b) March 31, 2011. As adequate protection, the Lender is granted a security interest on all of the post-petition rents and income from the Project and any property which is purchased with funds generated from the cash collateral. A continued hearing on the further use of cash collateral will be conducted on March 25, 2011. The rents and other income from the Debtor's property, as described in the Deed of Trust and Security Agreement, Assignment of Rents and Leases dated May 29, 2009, constitute cash collateral of BWF, which is owed in the original principal amount of $4,530,000. As reported in the Troubled Company Reporter on Jan. 18, 2011, BWF objected to the Debtor's request for court authorization to use of cash collateral. BWF said that the Debtor's motion to use cash collateral doesn't provide a means by which BWF's interest in the cash collateral will be adequately protected. According to BWF, the proposed budget provides for unnecessary expenditures and proposes to operate the Debtor's property at a loss. BWF is represented by Kaufman and Canoles. About Fox Hill Mutual Homes, Inc. Hampton, Virginia-based Fox Hill Mutual Homes, Inc., is the owner of a 252 unit residential complex located at 200 Ranalet Drive, in Hampton, Va. The Company filed for Chapter 11 bankruptcy protection on Jan. 6, 2011 (Bankr. E.D. Va. Case No. 11-50038). Karen M. Crowley, Esq., at Crowley, Liberatore, & Ryan, P.C., in Chesapeake, Va., serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $9,548,497 in assets and $4,948,765 in liabilities. GALLENTHIN REALTY: Court Dismisses Chapter 11 Case -------------------------------------------------- Upon the motion of United States Trustee Roberta A. DeAngelis, the U.S. Bankruptcy Court for the District of New Jersey approved on Feb. 14, 2011, the dismissal of the Gallenthin Realty Development, Inc.'s Chapter 1 bankruptcy case. About Gallenthin Realty Development Woodbury, New Jersey-based Gallenthin Realty Development, Inc., filed for Chapter 11 bankruptcy protection on December 30, 2010 (Bankr. D. N.J. Case No. 10-50011). Joseph T. Threston, III, Esq., who has an office in Riverton, New Jersey, serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $20,000,000 in assets and $148,000 in liabilities. GARY PHILLIPS: Court Authorizes Sale of Four Properties ------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Tennessee, on the emergency motion for expedited hearing filed on Jan. 6, 2011, has authorized Gary Phillips Construction, LLC, to sell these properties: Description Sale Price Secured Creditor ----------- ---------- ---------------- Coldwater Cove Land $365,000 Citizens Bank Meadows Brook Lot 27 $167,900 Regions Bank Allison Hills Lot 44 $200,000 Regions Bank Cardinal Forest Lot 4 $179,900 TruPoint Bank Secured Creditors Citizens Bank, Regions Bank and TruPoint Bank, are to be paid at closing; provided, however, that from the closing of Cardinal Forest Lot 4 the sum of $9,800, representing the total of post-petition advances by TruPoint Bank in connection with Cardinal Forest Lot 4, will be withheld from the Bank Payoff and will be escrowed with the closing agent pending further order of the Court. The Court also ordered that Citizens Bank, Regions Bank, TruPoint Bank, the Judgment Lien Creditors, Delta Gypsum, LLC and Preston, McNees Specialty Woodworking Shop, Inc., and ProBuild Company, LLC, are each granted replacement liens against the funds in the Cash Collateral Account up to the amount of the proceeds retained by the Debtor as a result of the respective property sales, but only to the extent that their respective liens are valid. The Debtor's portion, as seller, of the real estate commissions, which are due and payable on sale closing will be escrowed with the closing agent pending further order of the Court on the Debtor's Application to Employ a Realtor. The Seller's closing costs are to be paid from proceeds at closing. About Gary Phillips Construction Piney Flats, Tennessee-based Gary Phillips Construction, LLC, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Tenn. Case No. 10-53097) on Dec. 3, 2010. Fred M. Leonard, Esq., who has an office in Bristol, Tennessee, serves as the Debtor's counsel. Dean B. Farmer, Esq., at Hodges, Doughty & Carson, PLLC, serves as the committee of unsecured creditors' counsel. In its schedules, the Debtor disclosed $13,255,698 in assets and $7,614,399 in liabilities as of the Petition Date. GARY PHILLIPS: Has Interim Use of Cash Collateral Until March 18 ---------------------------------------------------------------- The U.s. Bankruptcy Court for the Eastern District of Tennessee entered, on Feb. 16, 2011, its amended order granting Gary Phillips Construction, LLC, authority to use cash collateral on an interim basis through March 18, 2011, to pay necessary expenses to prevent immediate and irreparable harm to the Debtor's estate, in accordance with an interim budget. Debtor will not be permitted to use Commercial Bank's specific Cash Collateral account which is designated as savings account xxxxx6614 without further Order of the Court. Any variance in the expense figures set forth in the interim budget in excess of 10% will require approval of the Court. As adequate protection of Citizens Bank, Commercial Bank, First Bank & Trust, First Tennessee Bank, Regions Bank, Tri-Summit Bank, TruPoint Bank, Delta Gypsum, Preston, McNees's and Probuild Company interest in the prepetition collateral, including cash collateral, the Secured Creditors are granted interim replacement liens in all assets of the estate to the extent of any diminution through use of of cash collateral, including but not limited to cash collateral, upon which the Secured Creditors hold a valid prepetition lien. An adjourned preliminary hearing on the Debtor's continued use of cash collateral will be held on March 15, 2011, at 9:00 a.m. A copy of the Amended Agreed Order for Interim Use of Cash Collateral is available for free at: http://bankrupt.com/misc/GaryPhillips.cashcollateralorder.pdf About Gary Phillips Construction Piney Flats, Tennessee-based Gary Phillips Construction, LLC, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Tenn. Case No. 10-53097) on Dec. 3, 2010. Fred M. Leonard, Esq., who has an office in Bristol, Tennessee, serves as the Debtor's counsel. Dean B. Farmer, Esq., at Hodges, Doughty & Carson, PLLC, serves as the committee of unsecured creditors' counsel. In its schedules, the Debtor disclosed $13,255,698 in assets and $7,614,399 in liabilities as of the Petition Date. GEN ART: Debuts Under New Ownership Following Bankruptcy -------------------------------------------------------- Dow Jones' DBR Small Cap reports that after shuttering its doors and entering bankruptcy protection last year, Gen Art Productions Inc. re-launched under new ownership. "We are a one-stop shop, an arbiter of taste," said Elizabeth Shaffer, co-president of the newly reopened organization. "And people have an emotional connection to the brand," the report notes. About Gen Art Productions Gen Art Productions Inc. operates as an art and entertainment company that showcases fashion designers, filmmakers, musicians, DJs, and visual artists. The company was founded in 1993 and is based in New York, New York with additional offices in Los Angeles and San Francisco, California; Miami, Florida; and Chicago, Illinois. As of September 2009, Gen Art Productions Inc. operates as a subsidiary of Rock Media & Entertainment. On June 2, 2010, an involuntary petition for liquidation under Chapter 7 was filed against Gen Art Productions Inc. in the U.S. Bankruptcy Court for the Southern District of New York, Manhattan. Under Chapter 7 of the U.S. Bankruptcy Code, a trustee was appointed to oversee Gen Art's liquidation. GELTECH SOLUTIONS: Reduces Principal of Reger Debt by $1 Million ---------------------------------------------------------------- GelTech Solutions, Inc., and Michael Reger, GelTech's largest shareholder, renegotiated its line of credit and reduced the principal on the line of credit by $1 million. The Lender agreed to accept 892,857 shares of GelTech's common stock in consideration for cancelling $1 million of the line of credit, of the $2,497,483, which was due in May 2011. The remaining $1,497,483 owed under the line of credit has been converted into a five-year note which is convertible at $1.12 per share bearing 5% interest per year. In connection with the loan cancellation, GelTech issued the lender 1,000,000 five-year warrants exercisable at $1.25 per share and 300,000 five-year warrants exercisable at $1.75 per share. About GelTech Solutions Jupiter, Fla.-based GelTech Solutions Inc. (OTC Bulletin Board: GLTC) -- http://www.GelTechsolutions.com/-- is a Delaware corporation organized in 2006. The Company creates innovative, Earth-friendly, cost-effective products that help industry, agriculture, and the general public accomplish environmental and safety goals, such as water conservation and the protection of lives, homes, and property from fires. The Company's current business model is focused on the following products: 1) FireIce(R), a fire suppression product, 2) SkinArmor(TM), an ointment used for protecting skin from direct flame and high temperatures, and 3) Soil2O(TM), a line of agricultural moisture retention products. The Company's balance sheet at Sept. 30, 2010, showed $1.0 million in total assets, $2.6 million in total liabilities, and a stockholders' deficit of $1.6 million. As reported in the Troubled Company Reporter on October 4, 2010, Salberg & Company, P.A., in Boca Raton, Fla., expressed substantial doubt about the Company'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 net loss and net cash used in operating activities in 2010 of $3.5 million and $2.6 million, respectively, and has an accumulated deficit, a stockholders' deficit and working capital deficit of $9.6 million, $1.1 million, and $1.7 million, respectively, at June 30, 2010. GENERAL MOTORS: MTech Objects to Claims Estimation at $0 -------------------------------------------------------- MTech Associates, LLC, objects to Old GM's $0 estimate of its general unsecured claim because the estimated amount does not include MTech's separately-filed administrative expense claim. MTech asserts that approving the Debtors' estimate would bar it from asserting part of its administrative expense claim as a general, unsecured claim, should any portion of the administrative expense claim be deemed a general, unsecured claim. MTech says it has provided the Debtors with evidence supporting each element of both of its claims, and, other than asking for such information, the Debtors have made no effort to resolve its claims. MTech, therefore, asks that the estimate of its general unsecured claim be set at $6,814,123 rather than $6,051,597. MTech is represented by: Kathleen H. Haus Maddin, Hauser, Wartell, Roth & Heller, P.C. 28400 Northwestern Highway, 3rd Floor Southfield, MI 48034 Tel: (248)359-7520 Fax: (248)359-7560 About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At Sept. 30, 2010, GM had US$137.238 billion in total assets, US$106.522 billion in total liabilities, US$6.998 billion in preferred stock, US$971 million in non-controlling interest, and US$23.718 billion in total equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: U.S. Govt. Supports Priority Order Pacts -------------------------------------------------------- The U.S. Government, on behalf of the U.S. Environmental Protection Agency and the U.S. Department of the Treasury, supports the Court's approval of the environmental provisions of the Amended Joint Chapter 11 Plan of Reorganization, incorporating six separate Consent Decree and Settlement Agreements for the resolution of the U.S. Government's causes of action in the subject sites. As reported in the Dec. 22, 2010 edition of the Troubled Company Reporter, the Debtors have agreed to pay $25,008,718 in cash to settle claims lodged by the U.S. Government, on behalf of the U.S. Environmental Protection Agency, and certain states, according to several settlements filed with the U.S. Bankruptcy Court for the Southern District of New York on Dec. 14, 2010. The settlement agreements also contemplate allowance of certain claims as general unsecured claims under the Debtors' Amended Joint Plan of Reorganization for $3,181,194. Assistant U.S. Attorney for the Southern District of New York Natalie E. Kuehler, Esq., tells Judge Gerber that the settlements memorialized in the Agreements were reached after lengthy negotiations with the parties weighing the merits, costs, risks and delays that litigation would entail against the value of settlement. She further notes that the Agreements are substantively fair because the Priority Order Sites are all properties at which Debtors are under a judicial or administrative order compelling them to conduct environmental cleanup and Debtors are the only significant viable responsible parties identified by the EPA or the states. More importantly, the Debtors' payment of $25 million to resolve their liability under cleanup orders for the Priority Order Sites provides for a reasonable likelihood of sufficient funding for the future cleanup of the Priority Order Sites and reasonably balances the litigation risks of obtaining cleanup, Ms. Kuehler insists. The Agreements are also consistent with the goals of Comprehensive Environmental Response, Compensation and Liability Act, she adds. Indeed, the only negative comment the U.S. Government received was from Onondaga County, New York and the comment does not indicate that the Agreements are inappropriate, inadequate or improper, Ms. Kuehler points out. In response to Onondaga's comments, she stresses that given the limited funding available in the Debtors' bankruptcy cases, the Agreements appropriately prioritize cleanups by taking into account principles of bankruptcy law and environmental law, including whether cleanup orders have been issued, and whether there are other significant viable potentially responsible parties. She further insists that the Agreements reasonably provide for a transfer of any excess funding to the Hazardous Substance Superfund or the cushion funding account. In contrast, the City of Dayton, Ohio, strongly supported the Delphi Harrison Site Settlement Agreement, noting that the local taxpayers have assumed more than their fair share of the burden placed on the community by the contamination at the Delphi Harrison Site and that the proposed cash payment of $5,329,343 for remediation will go a long way to alleviating that burden and moving the site to productive reuse, Ms. Kuehler relates. For the reasons stated, the U.S. Government has determined that the proposed Priority Order Site Settlement Agreements are fair, reasonable and consistent with environmental law and asks the Court to approve the Agreements. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At Sept. 30, 2010, GM had US$137.238 billion in total assets, US$106.522 billion in total liabilities, US$6.998 billion in preferred stock, US$971 million in non-controlling interest, and US$23.718 billion in total equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Wants to Remove Actions 'Til Yr. After Plan Nod --------------------------------------------------------------- Pursuant to Rules 9006(b) and 9027 of the Federal Rules of Bankruptcy Procedure, Motors Liquidation Co. and its units ask Judge Robert Gerber to extend the time within which they may file notices of removal of civil actions and proceedings in state and federal courts to which they are, or may become parties, until the date that is one year after the Court confirms the Debtors' Amended Joint Chapter 11 Plan of Reorganization. The hearing to confirm the Plan is set to begin on March 3, 2011. Accordingly, the time which the Debtors must file motions to remove any pending Civil Actions has not yet expired, but may expire in the near future. Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that the Debtors are party to thousands of prepetition Civil Actions pending in courts across the country. Given the number and variety of Civil Actions, and the significant amount of time and effort the Debtors have had to devote to other aspects of these Chapter 11 cases, the Debtors have not been able to analyze and make a determination regarding the removal of each of the Civil Actions, he explains. Mr. Smolinsky continues that due to the nature of those claims and the mechanics of the ADR Procedures, the Debtors are unable to make determinations as to whether pending litigations that are subject of unresolved claims should be removed. He points out that most of the Civil Actions involve personal injury and wrongful death claims. Because the liquidation of those claims is not subject to the jurisdiction of the Court, removal of actions from state to federal court is a critical right that the Debtors and the GUC Trust Administrator cannot lose, he contends. Accordingly, the proposed time extension will provide additional time to allow the Debtors to continue the ADR Procedures and, if necessary, to consider, and make decisions concerning, the removal of the Civil Actions, Mr. Smolinsky insists. The Court will consider the Debtors' request on March 3, 2011. Objections are due Feb. 24. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At Sept. 30, 2010, GM had US$137.238 billion in total assets, US$106.522 billion in total liabilities, US$6.998 billion in preferred stock, US$971 million in non-controlling interest, and US$23.718 billion in total equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GLOBAL CROSSING: Incurs $172 Million Net Loss in 2010 ----------------------------------------------------- Global Crossing Limited filed its annual report with the U.S. Securities and Exchange Commission reporting a net loss of $172 million on $2.61 billion of revenue for the year ended Dec. 31, 2010, compared with a net loss of $141 million on $2.54 billion of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010 showed $2.31 billion in total assets, $2.79 billion in total liabilities and $477 million in total shareholders' deficit. A full-text copy of the Annual Report is available for free at: http://ResearchArchives.com/t/s?73f3 About Global Crossing Based in Hamilton, Bermuda, Global Crossing Limited (NASDAQ: GLBC) is a global IP and Ethernet solutions provider with the world's first integrated global IP-based network. The company offers a full range of data, voice and collaboration services with an industry leading customer experience and delivers service to approximately 40% of the Fortune 500, as well as to 700 carriers, mobile operators and ISPs. It delivers converged IP services to more than 700 cities in more than 70 countries around the world. * * * As reported by the Troubled Company Reporter on March 31, 2010, Standard & Poor's Ratings Services raised all its ratings on Global Crossing, including the corporate credit rating to 'B' from 'B-'. The outlook is stable. Standard & Poor's Ratings Services said it assigned its 'CCC+' issue-level rating and '6' recovery rating to Bermuda-based Global Crossing Ltd.'s proposed $150 million of senior unsecured notes due 2019. The '6' recovery rating indicates S&P's expectation for negligible (0%-10%) recovery in the event of a payment default. GMI ENTERPRISES: Files for Chapter 7 Bankruptcy Protection ---------------------------------------------------------- Ben Sutherly at the Dayton Daily News reports that GMI Enterprises, Inc. dba Skelton Sports in West Carrollton filed a Chapter 7 petition. Skelton Sports, a screen printing and uniforms business in Dayton, Ohio, closed Feb. 11, 2011. The Company disclosed assets of $66,650 and liabilities of nearly $1.32 million. It listed gross business income of $1.35 million in fiscal 2009 and $1.22 million in fiscal 2010. The Company began operating in 2007. GOODRICH PETROLEUM: S&P Assigns 'B' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Houston, Texas-based Goodrich Petroleum Corp. The outlook is stable. At the same time, Standard & Poor's assigned the company's proposed $225 million senior unsecured notes due 2019 and existing $219 million convertible senior unsecured notes due 2029 its 'CCC+' issue-level rating (two notches lower than the 'B' corporate credit rating). The recovery rating on this debt is '6', indicating S&P's expectation of negligible (0% to 10%) recovery for noteholders in the event of a payment default. GDP plans to use proceeds primarily to redeem its existing $175 million of convertible notes due 2026, which have a put option exercisable in December 2011. Funds will be held in escrow until the notes are redeemed, sometime before Dec. 1, 2011. Any remaining proceeds will be used for general corporate purposes. The ratings reflect GDP's relatively small reserve base, meaningful exposure to natural gas (estimated to be 87% of this year's production), lower reserve life relative to some of its peers', projected negative free cash flow over the next few years, high costs, and the company's position in a highly cyclical, capital-intensive, competitive industry. Ratings also reflect the company's good hedging position (45% of 2011-2012 natural gas production), adequate near-term liquidity, and its planned shift to oil development in the Eagleford shale. GRAHAM PACKAGING: Reports $81.79-Mil. Net Income in 2010 -------------------------------------------------------- Graham Packaging Holdings Company filed its annual report on Form 10-K reporting net income of $81.79 million on $2.51 billion of net sales for the year ended Dec. 31, 2010, compared with net income of $20.77 million on $2.27 billion of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010, showed $2.80 billion in total assets, $3.30 billion in total liabilities and $498.02 million in total partners deficit. A full-text copy of the annual report on Form 10-K is available for free at http://ResearchArchives.com/t/s?7402 About Graham Packaging Headquartered in York, Pennsylvania, Graham Packaging Holdings Company, -- http://www.grahampackaging.com/-- the parent company of Graham Packaging Company, L.P., is engaged in the design, manufacture and sale of customized blow molded plastic containers for the branded food and beverage, household, automotive lubricants and personal care/specialty product categories. As of the end of June 2008, the company operated 83 manufacturing facilities throughout North America, Europe and South America. Graham Packaging carries 'B' issuer credit ratings from Standard & Poor's. GREAT ATLANTIC & PACIFIC: Pine Plaza Amends Lift Stay Request ------------------------------------------------------------- Pine Plaza Associates LLC filed an amended motion with the Court to prosecute a claim against The Great Atlantic & Pacific Tea Company Inc. and Pathmark Stores Inc. Pine Plaza amended the motion it filed on January 19, 2011, by waiving any right to pursue from the bankruptcy estate the $750,000 retained by the Debtors under a policy it purchased from its insurer, National Union Fire Insurance Company. Pine Plaza seeks indemnification from the Debtors in connection with the lawsuit filed against it by Michael Brescia, an employee of ATV, which was contracted by the Debtors to provide maintenance services. Mr. Brescia figured in an accident while doing maintenance work for the Debtors at a shopping center owned by Pine Plaza. Pursuant to a lease contract with the Debtors, Pine Plaza says, it is entitled to indemnification for any liability from the Debtors' use of the leased facility. Pine Plaza says the lease also requires Pathmark to provide it with insurance for any incident resulting in physical injury and property damage at the leased facility. 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 Dec. 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White Plains. As of Sept. 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 Hilco as Real Estate Advisor --------------------------------------------------------------- The Great Atlantic & Pacific Tea Company Inc. and its affiliated debtors seek court approval to employ Hilco Real Estate LLC as their real estate advisor effective Feb. 1, 2011. The Debtors selected Hilco because of its qualifications and experience in real estate restructuring. It also has extensive experience solving complex real estate problems and evaluating and restructuring real estate lease terms, according to Christopher McGarry, senior vice-president and general counsel of The Great Atlantic & Pacific Tea Company Inc. As real estate advisor, Hilco will be tasked to develop and implement a plan to: (1) obtain lease savings from the landlords under their leases; (2) obtain non-monetary lease modifications; (3) obtain lease term reductions or early termination rights under the leases; (4) obtain from the landlord extension of the deadline for the Debtors to assume or reject the leases; (5) market designated leases for sale or assignment of those leases or the bankruptcy designation rights appurtenant thereto; (6) reduce or eliminate the landlords' prepetition, unsecured claims; and (7) prepare or have an independent third party prepare about 210 written appraisals for leases designated by the Debtors as requested by the agent for the Debtors' postpetition secured lenders and required in the debtor-in-possession facility. Hilco will be paid for its services in accordance with this fee structure: Service to be Provided Compensation ---------------------- ------------ Rent Reduction Project 2.5% of the first $30 million in actual savings 3% of the actual savings between $30 million and $50 million 3.5% of the actual savings above $50 million Lease Modification Project $1,000 per modified lease Term Adjustment Project $1,500 per adjusted lease Assumption/Rejection $350 per extension Extension Project Lease Assignment Project 2% of the Assignment Proceeds, with total cap of $100,000 Claims Project 10% of savings of any dividend that otherwise would have been payable to the landlord for its claim in the bankruptcy, with a total cap of $250,000 50% of compensation for a claim modification will be paid within 30 days following the effective date or other conclusion of these bankruptcy cases, and the remaining 50% will be paid in three equal annual installments commencing on the first anniversary of the conclusion of the bankruptcy cases Appraisal Project $250 per appraisal for first 210 appraisals; $400 per appraisal for each appraisal above 210; $800 per FIRREA appraisal above 150 ($800 maximum amount for any appraisal) If Hilco is entitled to receive compensation for a lease pursuant to the other projects, then the appraisal fee applicable to that lease will be deducted from the compensation. Hilco will receive no appraisal compensation if aggregate compensation for other projects exceeds $1 million; provided that the limitation does not apply to appraisals for which a $400 or $800 fee was paid. The Debtors will also reimburse Hilco for any expenses incurred in connection with its employment. In a declaration, Eric Kaup, executive vice-president of Hilco, assures the Court that his firm does not hold or represent interest adverse to the Debtors' estates, and that it is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. Hilco's Statement Hilco Real Estate, LLC has been appointed real estate advisor to The Great Atlantic and Pacific Tea Company in its bankruptcy restructuring. In addition to its comprehensive role as consultant and lease restructuring advisor, HRE is managing A&P's disposition efforts, including the immediate sale of 31 leases on stores in the process of being shuttered. Gregory S. Apter, President of Hilco Real Estate, will lead the disposition team. The sale process will be managed by Ross Block, a senior disposition specialist. Mr. Apter commented, "These 31 locations range from 24,000 to 60,000 square feet. They are in prime locations in Connecticut, Delaware, Maryland, New Jersey, New York and Pennsylvania. Early interest in these sites has been significant and we expect that momentum to continue throughout the sale process." Parties interested in any of the 31 locations now available should contact Ross Block at 847.504.2463 or e-mail to rblock@hilcorealestate.com. More details are available online at www.hilcorealestate.com. About Hilco Real Estate, LLC Hilco Real Estate helps businesses improve leverage and cash flow by repositioning and restructuring their real estate commitments. The company's focus is to optimize value in the shortest period of time. Core competencies include strategic advisory and consulting services, owned portfolio disposition, lease portfolio sales/assignments, lease termination, lease renegotiation, leasing/subleasing, sale of non-core owned assets, sale/leaseback transactions, and fee and appraisals for leased and owned assets. The company, which is headquartered in Northbrook, Ill, is a unit of Hilco, a world leader in asset valuation, disposition and advisory services. For more information please visit http://www.hilcorealestate.com/ap 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 Dec. 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White Plains. As of Sept. 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 PwC as Tax Advisor ----------------------------------------------------- The Great Atlantic & Pacific Tea Company Inc. and its affiliated debtors seek the court's authority to employ PricewaterhouseCoopers LLP as their independent auditor and tax advisor effective Dec. 12, 2010. The Debtors tapped the services of PwC because of its considerable experience in providing accounting, tax, auditing and financial advisory services to businesses in bankruptcy. The firm is also familiar with the Debtors' business and accounting systems since its has been providing services to them for years, according to Christopher McGarry, senior vice-president of The Great Atlantic & Pacific Tea Company Inc. As auditor and tax advisor, PwC will be tasked to: (1) perform an integrated audit of the consolidated financial statements of A&P at Feb. 26, 2011, and for the year then ending, and of the effectiveness of A&P's internal control over financial reporting as of February 26, 2011; (2) perform incremental review procedures for the quarter ended Dec. 4, 2010; audit procedures for the 2010 consolidated financial statement audit; and audit procedures associated with the Debtors' application of fresh start accounting; (3) review A&P's unaudited consolidated quarterly financial statements for each of the three quarters in the year ending Feb. 26, 2011; (4) provide tax consulting services including advice, answers to questions or opinions on tax planning or reporting matters; (5) provide advice or assistance with respect to matters involving the Internal Revenue Service or other tax authorities on an as-needed or as-requested basis; (6) provide technical assistance with respect to the utilization of A&P's net operating losses and other tax attributes; (7) provide consulting services with respect to state and local taxes; (8) provide accounting method consulting services including identifying effective income tax accounting methods that A&P may have the opportunity to elect, change or adopt as well as recommending available opportunities to mitigate future tax exposures; and (9) assess tax issues in connection with the potential dissolution of foreign entities. PwC will be paid based on the kind of services it will provide pursuant to the various engagement letters and statements of work it executed with the Debtors. The Debtors intend to pay PwC for services rendered under the engagement letter dated July 26, 2010, in accordance with the estimated "fixed fee" of $2.345 million. For tax consulting services rendered pursuant to the engagement letter dated Aug. 21, 2008, and statement of work dated July 15, 2010; accounting method consulting services rendered pursuant to the statement of work dated Jan. 27, 2010; and the services provided pursuant to statements of work dated Oct. 13, 2010, and Jan. 19, 2011, the hourly rates of PwC are: Professionals Hourly Rates ------------- ------------- NTS Partner/Senior $890 - $995 Managing Director Partner $600 - $650 Managing Director $585 - $630 NTS Director/Manager $550 - $640 Directors/Managers $375 - $485 NTS Senior Associate $390 - $430 Senior Associates/Staff $175 - $275 The hourly rates that will be charged for services rendered pursuant to the statement of work dated Jan. 19, 2011, are: Professionals Hourly Rates ------------- ------------- Partner $650 Managing Director $630 Director $485 Manager $380 Staff $210 Meanwhile, the hourly rates for services rendered pursuant to the first amendment to the PwC Audit Engagement Letter dated February 11, 2011, are: Professionals Hourly Rates ------------- ------------- Partner $825 - $995 Managing Director $585 - $995 Director $675 Senior Manager $505 - $740 Manager $400 - $415 Senior Associate $245 - $300 Associate $140 - $225 In a declaration, Kenneth Sharkey, a partner at PwC, in New York, assures the Court that his firm does not have any interest adverse to the Debtors, and that it is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. 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 Dec. 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White Plains. As of Sept. 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). GTS 900: Corus Plan Confirmed; Plan Declared Effective Feb. 18 -------------------------------------------------------------- On Feb. 17, 2011, the U.S. Bankruptcy Court for the Central District of California confirmed the Modified Plan of Reorganization proposed by Corus Construction, LLC, on behalf of GTS 900 F, LLC. The Plan became effective the following day, Feb. 18, 2011. As reported in the Troubled Company Reporter on Feb. 23, 2011, Los Angeles developer Sonny Astani has given up his legal battle to retain ownership of the Concerto, a never-completed $260-million condominium project in downtown Los Angeles. According to the reorganization plan filed with the Bankruptcy Court, units in the 30-story tower near Staples Center will be finished by a new group of owners headed by hedge fund Starwood Capital Group. Mr. Astani agreed to sell his interest in the Concerto project (to Corus Construction Venture LLC) for $9.5 million. Terms of the accord also call for the buyers to make payments to the general contractor and subcontractors, who have filed $22.5 million worth of liens on the Concerto project. The parties agreed not to speak about their settlement during the ownership change, but Mr. Astani said he planned to press on with separate litigation against the Federal Deposit Insurance Corp., which is also now a part-owner of Concerto. Counsel for Corus Construction, LLC, may be reached at: Van C. Durrer II, Esq. Ramon M. Naguiat, Esq. Emily C. Ma, Esq. SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 300 South Grand Avenue, Suite 3400 Los Angeles, CA 90071 Tel: (213) 687-5000 Fax: (213) 687-5600 About GTS 900 F, LLC 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: Moody's Affirms 'Caa2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service affirmed Guitar Center, Inc.'s Caa2 Corporate Family Rating and the $622 million existing term loan rating of Caa1 due October 2014. The Probability of Default Rating was revised to Caa2/LD from Caa2 while the Speculative Grade Liquidity assessment was changed to SGL-2 from SGL-3. The rating outlook remains stable. The Caa2/LD Probability of Default rating reflects Moody's view that the extended deferral of interest on the Holdco notes constitutes a distressed exchange under Moody's definition and also anticipates that additional exchanges of this nature are possible over the near term. The Limited Default designation was prompted by the company's executed amendment of the HoldCo notes, which allows for a deferral of 50% of the interest payments for 18 months. Moody's views this as a distressed exchange that provides default avoidance. This LD designation applies to the proposed follow-on amendment to defer the HoldCo note interest payments by another six months. Subsequent to the actions, Moody's will remove the LD designation and the PDR will be Caa2 going forward. Concurrently the SGL assessment was changed to SGL-2 from SGL-3 reflecting the improvement in liquidity as a result of the deferral of 50% of the Holdco interest expense for 18 months. The Caa2 Corporate Family Rating continues to reflect Guitar Center's unsustainable capital structure over the long term at current levels of operating performance given the sizable level of operating income growth needed to bring leverage and coverage to more reasonable levels. It is unlikely that Guitar Center will be able to sufficiently deleverage from simply growing comparable store sales at existing stores and boosting profits. However, Moody's also notes that Guitar Center's liquidity is, and is expected to remain, good and that there are no sizable debt payments until April 2013 when the company is required to make a payment of approximately $130 million under its existing HoldCo note (not rated by Moody's). The stable outlook acknowledges that the Caa2 PDR adequately reflects the moderately high probability of default over the medium term. The stable outlook is predicated on Moody's opinion that Guitar Center's operating performance will only modestly improve and that it will maintain good liquidity. These ratings were affirmed and point estimate adjusted: For Guitar Center Holdings, Inc.: -- Corporate Family Rating at Caa2 -- Probability of Default Rating at Caa2/LD For Guitar Center, Inc.: -- $622 million existing senior secured term loan due October 2014 at Caa1 (to LGD 3, 33% from LGD 3, 34%) -- Speculative Grade Liquidity assessment to SGL-2 from SGL-3 A higher rating would require either an absolute reduction in debt levels (which Moody's estimates to be approximately $1.6 billion) or a material improvement in operating performance that creates a capital structure that is more sustainable over the longer term. Quantitatively, an upgrade would require that Guitar Center maintain EBITDA less capital expenditures to interest expense of at least 1.0 time. An upgrade would also require sustained improvement in the company's liquidity profile. Ratings could be downgraded should Guitar Center experience a decline in earnings or liquidity or should the probability of default increase for any reason. Negative rating pressure will increase as the April 2013 HoldCo payment approaches. The last rating action for Guitar Center was on November 12, 2010 when its Corporate Family Rating and Probability of Default rating were downgraded to Caa2 from Caa1. Guitar Center Holdings, Inc. is a holding company whose sole asset is Guitar Center, Inc. Guitar Center, Inc., headquartered in Westlake Village, California, is the largest musical retailer in the Unites States. It operates three distinct retail businesses - - Guitar Center, Music & Arts, and Musician's Friend (its direct response subsidiary). Total revenues approximate $2 billion. GUITAR CENTER: S&P Affirms 'B-' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed all its existing ratings on Guitar Center Holdings Inc., including its 'B-' corporate credit rating. The outlook is stable. The rating action follows the company's announcement that it has completed an agreement with the holders of its OpCo and HoldCo notes to continue to accrue 50% of the interest on HoldCo notes for three payment periods. The accrued interest will be added to OpCo notes. The rating action also assumes that the company will successfully amend and extend its existing bank facilities. The amendment would allow the company to maintain a wider cushion for the net senior leverage covenant. Absent such an amendment, S&P believes cushion for the existing net senior leverage covenant could narrow to less than 10% in the next two to three quarters. The amendment will also extend the maturities of the revolver and term loan to 2016 and 2017, respectively. In conjunction with the credit facility amendment, the company will be allowed to accrue 50% of the interest on its HoldCo notes for one additional payment period (four payment periods in total), and extend maturities on its OpCo and Holdco notes until 2017 and 2018, respectively. "The ratings on Guitar Center reflect S&P's expectation for modestly improving operating performance and adequate liquidity during fiscal 2011," said Standard & Poor's credit analyst Mariola Borysiak. S&P views the company's business profile as weak, reflecting its participation in the highly fragmented and competitive music products retail market, offset to some extent by its leading position in the industry. HABERSHAM BANCORP: Bank Closed; FDIC Appointed as Receiver ---------------------------------------------------------- Habersham Bancorp announced that the Georgia Department of Banking and Finance closed its subsidiary bank, Habersham Bank, and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. Habersham Bancorp is no longer the parent of Habersham Bank. In a virtually simultaneous transaction, SCBT National Association acquired the operations and all deposits and purchased essentially all assets of the Bank in a loss-share transaction facilitated by the FDIC and will continue to operate the Bank, according to an FDIC news release. In a prepared statement, Habersham Bancorp said: "While we ultimately were unable to save the Bank in the face of unyielding market conditions, the Board of Directors worked tirelessly over the past two years on behalf of the Company and its shareholders and attempted every reasonable solution. In particular, over the last several months, the Board and management team had been working on an offering of common stock to residents of the State of Georgia in an effort to recapitalize the Bank. Our Board and management team also pursued other transactions, including mergers with other institutions and sales of the Bank's assets. Despite our best efforts, the continuing depressed market conditions prevented us from completing these transactions." About Habersham Bancorp Cornelia, Ga.-based Habersham Bancorp (OTC BB: HABC) owns all of the outstanding stock of Habersham Bank and an inactive subsidiary, The Advantage Group, Inc. The Company's continuing primary business is the operation of banks in rural and suburban communities in Habersham, White, Cherokee, Warren, Stephens, and Hall counties in Georgia. The Company's balance sheet as of Sept. 30, 2010, showed $396.3 million in total assets, $386.6 million in total liabilities, and stockholders' equity of $9.7 million. As reported in the Troubled Company Reporter on April 5, 2010, Porter Keadle Moore, LLP, in Atlanta, Ga., expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted that at Dec. 31, 2009, Habersham Bank's total capital to risk-weighted assets and Tier I capital to average assets ratios are below the required levels as established by regulation. In addition, the Bank has suffered recurring operating losses. HAYES AVENUE: Pleas Court Defers Hearing Over Demolition -------------------------------------------------------- Richard Payerchin at The Morning Journal, Ohio, reports that an Erie County Common Pleas Court postponed a hearing on whether one of Sandusky's historic industrial buildings should be torn down. A hearing was originally scheduled Feb. 23 to consider the city's request to demolish the American Crayon complex, which also is known as the Dixon Ticonderoga plant. However, the plant's owner, Hayes Avenue Development Co. LLC, operated by Sandusky developer Joe Yost, filed for Chapter 11 bankruptcy protection in U.S. District Court in Toledo prior to the hearing. The bankruptcy petition states Hayes Avenue Development Co. owes $825,000 to the Home Savings and Loan Co., the bank that foreclosed on the property in 2006 against Columbus Avenue Business Park and Yost's related businesses. The bank obtained a judgment of at least $864,516 against Columbus Avenue Business Park Ltd. and the related businesses. Based in Sandusky, Ohio, Hayes Avenue Development Company LLC filed for Chapter 11 bankruptcy protection on Feb. 15, 2011 (Bankr. N.D. Ohio Case No. 11-30615). Judge Mary Ann Whipple presides over the case. Jonathan P Blakely, Esq., at Weston Hurd LLP, represents the Debtor. In its petition, the Debtor estimated assets of between $100,000 and $500,000, and debts of between $1 million and $10 million. HEALTHSOUTH CORP: Reports $939.80 Million Net Income in 2010 ------------------------------------------------------------ Healthsouth Corporation filed its annual report on Form 10-K with reporting consolidated net income of $939.80 million on $1.99 billion of net operating revenue for the year ended Dec. 31, 2010, compared with consolidated net income of $128.80 million on $1.91 billion of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010 showed $2.37 billion in total assets, $1.99 billion in current liabilities, $387.40 million in commitments and contingencies, and a $2.20 million shareholders' deficit. A full-text copy of the annual report on Form 10-K filed with the Securities and Exchange Commission is available for free at: http://ResearchArchives.com/t/s?7403 About HealthSouth Corp. Birmingham, Alabama-based HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. HealthSouth carries a 'B1' corporate family rating with "stable" outlook, from Moody's. It has 'B+' foreign and local issuer credit ratings, with "positive" outlook, from Standard & Poor's. HEARTLAND AUTOMOTIVE: To Acquire Jiffy Lube Franchisee ------------------------------------------------------ Dow Jones' DBR Small Cap reports that in its third acquisition announcement of the year, Heartland Automotive Services Inc., a Jiffy Lube franchisee, has acquired Empire Lube Inc., which operates Jiffy Lubes in the New York City region. Empire Lube's stores are located in Nassau County, Brooklyn and the Bronx. According to the report, terms of the deal weren't disclosed. It's the second such acquisition for the Quad-C Management Inc.- backed Heartland Automotive this month, when it announced a deal to acquire Texas Oil X-Change Inc., which operates quick-lube service centers throughout the northern part of the state. And in January, Heartland Automotive said it would acquire Nebraska Lube LLC, which operates six service centers in Omaha and Lincoln, the report notes. About Heartland Automotive Quad-C invests in buyouts, recapitalizations, and industry consolidations of firms valued from $50 million to $500 million. Its current portfolio includes interests Heartland Automotive (the largest franchisee of Jiffy Lube service centers). Heartland is the largest franchisee of Jiffy Lube service center. Quad-C bought the assets of Heartland out of bankruptcy in February 2009. Heartland filed for Chapter 11 protection on Jan. 7, 2008 (Bank. N.D. Tex. Lead Case No. 08-40057). Thomas E. Lauria, Esq., Patrick Mohan, Esq., Gerard Uzzi, Esq., and Lisa Thompson, Esq., at White & Case LLP; and Jeff P. Prostok, Esq., at Forshey & Prostok, LLP, represented the Debtors in their restructuring efforts. Cadwalader, Wickersham & Taft LLP, and Munsch, Hardt, Kopf & Harr, PC represented the Official Committee of Unsecured Creditors. 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 98.88 cents- on-the-dollar during the week ended Friday, February 25, 2011, a drop of 0.33 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. 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 180 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. As reported by the Troubled Company Reporter on February 22, 2011, Standard & Poor's revised its recovery rating on Hercules Offshore Inc.'s senior secured debt to '3', indicating S&P's expectation of meaningful recovery (50% to 70%) in a default scenario, from '4'. The issue-level rating remains unchanged at 'B-' (the same as corporate credit rating). The rated senior secured debt consists of a revolving credit facility, term loan, and secured notes. The rating revision reflects an increase in S&P's valuation of Hercules in its default scenario following Hercules' agreement to purchase 20 jack-up rigs and related assets from Seahawk Drilling, funded with stock and cash. The increased value and absence of additional debt enhance the recovery prospects of the existing rated debt. 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. HOLLY CORP: S&P Puts 'BB' Rating on CreditWatch Positive -------------------------------------------------------- Standard & Poor's Ratings Services said it has placed its 'BB' ratings on Holly Corp. and Frontier Oil Corp. on CreditWatch with positive implications. At the same time, S&P placed its 'BB-' ratings on Holly Energy Partners L.P. on CreditWatch with positive implications. The rating actions follow the announcement that Holly and Frontier plan to execute an all-stock merger of equals, valuing the combined entity (HollyFrontier Corp.) at about $7 billion. "The rating actions reflect the improved business risk profile resulting from the merger of Holly and Frontier, notably the much- improved scale of operations and market diversity achieved," said Standard & Poor's credit analyst Paul Harvey. The merger creates a midsize to large independent U.S. refining company (five refineries, 443,000 barrels per day, Nelson complexity of 12.1x), operating primarily in the typically above-average PADD II (59% capacity) and PADD IV (19%) markets, as well as the Southwest PADD III (22%) market. S&P expects both companies to maintain above- average margins and resulting financial performance thanks to their favorable market positions. As a result, S&P expects HollyFrontier to maintain above-average credit measures for the industry, including debt leverage of 2x or less at the close of the transaction. The rating action on Holly Energy reflects Holly Corp.'s 34% ownership (including the 2% general partner interest) and Holly Energy's dependence on Holly Corp. for the majority of its cash flow and earnings. Standard & Poor's plans to resolve the CreditWatch listings at the close of the merger, currently expected in the third quarter of 2011. HONOLULU SYMPHONY: Firms, Civic Leaders Aim to Revive Symphony -------------------------------------------------------------- Steven Mark at the Star-Advertiser, in Honolulu, reports that a group of prominent business and civic leaders has formed a committee aimed at returning the bankrupt Honolulu Symphony to the concert stage. That committee has asked Steve Monder, retired president of the Cincinnati Symphony Orchestra, and JoAnn Falletta, acclaimed conductor of the Buffalo Philharmonic Orchestra, to develop a business model for the symphony. The group also filed for nonprofit status. The group is led by Office of Hawaiian Affairs trustee Oz Stender. About Honolulu Symphony Honolulu Symphony Society filed for Chapter 11 protection on Dec. 18, 2009 in its hometown (Bankr. D. Hawaii Case No. 09- 02978), saying assets are less than $500,000 while debt exceeds $1 million. The symphony blamed the filing on a decline in donations which left the orchestra unable to cover costs, since ticket sales represent only 30% of the budget. In December 2010, the bankruptcy judge entered an order converting the Honolulu Symphony Society's bankruptcy case from Chapter 11 to Chapter 7 liquidation. The judge said he can't see any benefit in keeping the symphony in Chapter 11 that would generate additional expenses. IA GLOBAL: Form 10-Q Filing Delayed; Sees $5MM Revenue in Q3 ------------------------------------------------------------ IA Global, Inc., updated is expected revenues for its third quarter ended Dec. 31, 2010. For the quarter ended Dec. 31, 2010, the Company expects revenues, subject to review by its external auditors, to be approximately $5.0 million, an increase from $0 as compared to the three months ended Dec. 31, 2009. The Company's quarterly filing on Form 10-Q was delayed due to the closing of the Company's two latest acquisitions, Zest Co Ltd and PowerDial. About IA Global San Francisco, Calif.-based IA Global, Inc. (OTCQB: IAGI.OB) -- http://www.iaglobalinc.com/-- is a global services and outsourcing company focused on growing existing businesses and expansion through global mergers and acquisitions. The Company is utilizing its current partnerships to acquire growth businesses in target sectors and markets at discounted prices. The Company is actively engaging in discussions with businesses that would benefit from our business acumen and marketing expertise, knowledge of Asian Markets, and technology infrastructure. The Company's balance sheet at Sept. 30, 2010, showed $4.65 million in total assets, $3.30 million in total current liabilities, $2.79 million in long-term debt, and a stockholders' deficit of $1.45 million. As reported in the Troubled Company Reporter on July 20, 2010, Sherb & Co., LLP, in New York, expressed substantial doubt about the Company'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 incurred significant operating losses, and has a working capital deficit as of March 31, 2010. INVESTCORP BANK: Fitch Affirms 'BB+' Issuer Default Ratings ----------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings of Investcorp Bank B.S.C. and affiliates, as well as the senior debt rating of affiliate Investcorp Capital Ltd. The Rating Outlook remains Negative. Investcorp's ratings are constrained by high leverage, balance sheet co-investment concentrations, and a capital mix heavily weighted toward preference shares. These concerns are offset by some favorable rating factors including the company's strong Gulf- based alternative investment franchise, its diversified mix of alternative assets under management and adequate balance sheet liquidity and capital. The affirmation of the IDRs and debt rating reflects Investcorp's ability to improve profitability, reduce balance sheet leverage and increase liquidity and capital during a relatively sluggish macro environment. Earnings have returned to positive territory after severe losses during the financial crisis in fiscal year 2009 (FY09; ended June 30 2009) but still remain well below pre- crisis levels. In addition, Investcorp has demonstrated good access to capital markets even in difficult conditions. Management issued preference shares to replenish its capital base during the height of the crisis in early 2009, and refinanced bank loans maturing in 2010 and 2011 with a new facility maturing in March 2013. In addition, Fitch has downgraded the Individual rating of Investcorp and its affiliates to 'C/D' from 'C'. The downgrade of the Individual rating reflects the sluggish macro environment, earnings that are still well below historical levels, and a business model that has proven sensitive to conditions in the private equity and alternative investment markets. Investcorp returned to profitability during FY10 (ended June 30, 2010) and remained profitable during the first half of 2011 (1H'11). Improved performance since the end of FY09 has resulted from strongly profitable hedge fund operations and positive mark to market trends in private equity and real estate co-investments. Tier 1 regulatory capital improved at 1H'11 to 23.2% from 22.9% at FY10 and 20% at FY09. The capital mix remains heavily tilted toward non-cumulative perpetual preference shares issued during FY09 at the height of the financial crisis to replenish capital. These securities bear a 12% annual dividend until a first optional redemption date in 2H'14. The operating environment is slowly improving. Corporate investment valuations recovered somewhat during FY10, and real estate valuations began to recover in 1H'11. Investment and exit opportunities have returned, with Investcorp negotiating exits and new placements in both sectors during 2H'10 and 1H'11. While Fitch notes political unrest in Investcorp's headquarters location in the Kingdom of Bahrain, Fitch believes that the risk is largely mitigated by structural protections. Investcorp's group corporate structure contains force majeure provisions that transfer Bahraini shareholder interests to a subsidiary domiciled in the Cayman Islands. Moreover, most assets and core operations are outside the Gulf area. Over time, disruption in the Gulf economies could make it more difficult for Investcorp to raise funds and place assets with Gulf-based clients. However, this risk is already incorporated in Investcorp's current long-term IDR. The Negative Outlook reflects the potential for a renewed downturn in alternative investment markets that could put renewed pressure on co-investment valuations, activity fees and earnings before the company has the ability to rebuild financial flexibility through ongoing earnings. A prolonged period of market stability, on the other hand, would help Investcorp progress toward a Stable Outlook. Over time, if management is successful in reducing balance sheet co-investments in relation to AUM, the company has the potential for higher ratings. Fitch has withdrawn the support floor of affiliate Investcorp S.A., reflecting that entity's change of domicile to the Cayman Islands. Investcorp, headquartered in Bahrain with operations in London and New York, combines private equity investing with private client advisory services. Its investing focus is on U.S., European and to a lesser extent Middle East/North African) corporations, U.S. real estate, hedge funds, and small cap technology investments. Its clients are principally high net worth individuals and institutions. Fitch has taken these rating actions: Investcorp Bank B.S.C. -- Long-term Issuer Default Rating affirmed at 'BB+'; -- Short-term IDR affirmed at 'B'; -- Individual downgraded to 'C/D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'; -- Rating Outlook Negative. Investcorp S.A. -- Long-term IDR affirmed at 'BB+'; -- Short-term IDR affirmed at 'B'; -- Individual downgraded to 'C/D' from 'C'; -- Support affirmed at '5'; -- Support Floor of 'NF' withdrawn; -- Rating Outlook Negative. Investcorp Capital Ltd. -- Long-term IDR affirmed at 'BB+'; -- Long-term senior debt affirmed at 'BB+' -- Short-term IDR affirmed at `B'; -- Individual downgraded to 'C/D' from 'C'; -- Support affirmed at '5'; -- Rating Outlook Negative. ISTAR FINANCIAL: Incurs $58.86MM Net Loss in Dec. 31 Qtr. --------------------------------------------------------- iStar Financial Inc. announced results for its fourth quarter and fiscal year ended Dec. 31, 2010. The Company reported a net loss of $58.86 million on $137.10 million of total revenue for the three months ended Dec. 31, 2010, compared with a net loss of $153.36 million on $168.06 million of total revenue for the same period a year ago. The Company also reported net income of $80.21 million on $575.25 million of total revenue for the twelve months ended Dec. 31, 2010, compared with a net loss of $769.85 million on $766.19 million of total revenue during the prior year. The Company's balance sheet at Dec. 31, 2010 showed $9.17 billion in total assets, $7.48 billion in total liabilities and $1.69 billion in total equity. A full-text copy of the financial results is available at no charge at http://ResearchArchives.com/t/s?7405 About iStar Financial New York-based iStar Financial Inc. (NYSE: SFI) provides custom- tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust, provides innovative and value added financing solutions to its customers. * * * iStar carries a 'C' issuer default rating from Fitch Ratings Services. Fitch lowered, among other things, the IDR from 'CC' to 'C' in October 2010, noting that there is substantial amount of debt maturities in the second quarter of 2011, consisting primarily of a second lien term loan and second lien revolving credit agreement in aggregate amounting to approximately $1.7 billion, and an unsecured revolving credit facility of approximately $500 million. In order to avoid maturity defaults on the second lien obligations and unsecured revolving credit facility due June 2011, a coercive debt exchange would need to be effected, whereby the company negotiates with certain of its debt holders a material reduction in terms to avert bankruptcy, Fitch said. In July 2010, Standard & Poor's Ratings Services lowered its long- term counterparty credit rating on iStar Financial to 'CCC' from 'B-'. The outlook is negative. iStar's limited funding flexibility and the severe credit quality deterioration in its loan portfolio continue to put negative pressure on the rating, S&P said. ISTAR FINANCIAL: Fitch Expects to Put Low-B Ratings on 2 Tranches ----------------------------------------------------------------- Upon the successful completion of iStar Financial Inc.'s proposed senior secured credit facilities transaction, Fitch expects to rate the tranches related to the financing: -- $1.5 billion A-1 tranche due June 2013 'BB-/RR1'; -- $1.5 billion A-2 tranche due June 2014 'B+/RR2'. Fitch expects to upgrade iStar's Issuer Default Rating to 'B-' from 'C' upon successful completion of the proposed senior secured credit facilities transaction. While concepts of Fitch's Recovery Rating methodology are considered for all companies, explicit Recovery Ratings are assigned only to those companies with an IDR of 'B+' or below. At the lower IDR levels, Fitch believes there is greater probability of default so the impact of potential recovery prospects on issue- specific ratings becomes more meaningful and is more explicitly reflected in the ratings dispersion relative to the IDR. The A-1 tranche expected rating of 'BB-/RR1', or a three-notch positive differential from iStar's expected 'B-' IDR is based on Fitch's estimate of outstanding recovery in the 91%-100% range. Together with the A-2 tranche, this obligation would represent a first lien security claim on a collateral pool comprised primarily of performing loans and credit tenant lease assets, and would have amortization payment priority relative to the A-2 tranche. The A-2 tranche expected rating of 'B+/RR2', or a two-notch positive differential from iStar's expected 'B-' IDR assessment is based on Fitch's estimate of superior recovery. Together with the A-1 tranche, this obligation would represent a first lien security claim on a collateral pool comprised primarily of performing loans and credit tenant lease assets but would receive principal amortization only upon the full repayment of the A-1 tranche. ISTAR FINANCIAL: Moody's Puts Low-B Ratings on Credit Facilities ---------------------------------------------------------------- Moody's Investors Service placed iStar Financial Inc.'s unsecured debt and preferred stock ratings under review for possible upgrade following its announcement that it will obtain up to $3 billion in new senior secured credit facilities. At the same time, Moody's assigned a (P)B1 rating to the $1.5 billion Tranche A-1 due June 2013 and a (P)B2 rating to the $1.5 billion Tranche A-2 due 2014 to iStar's proposed secured credit facilities. Moody's also assigned a (P)B3 corporate family rating. Ratings Rationale The proceeds of the new senior secured credit facilities will be used to refinance the REIT's secured loan facilities due to mature in June 2011 and 2012 as well as to repay a portion of iStar's unsecured debt maturing in 2011. The facilities will be collateralized by $3.75 billion, consisting primarily of performing loans and CTL assets. The new senior secured credit facilities ratings, the corporate family rating, and the review for possible upgrade of iStar's existing ratings are based on the REIT's success in extending near term debt maturities. The prospective ratings on the new senior secured credit facilities take into account the expected asset coverage, the size and quality of the collateral pool, the pace of amortization on each tranche and the term of each tranche. Moody's noted that the (P)B3 corporate family rating is contingent on iStar's successfully completing the issuance of the $3 billion senior secured facilities. These facilities would help alleviate iStar's tenuous liquidity position. Should the facilities not close iStar's corporate family rating would be rated lower. Alternatively, upon the closing of the new secured credit facilities, the unsecured debt and preferred stock ratings would be upgraded by multiple notches. These ratings were assigned: * iStar Financial Inc. -- Senior secured credit facility Tranche A-1 at (P)B1, Tranche A-2 at (P)B2; corporate family rating at (P)B3 These ratings were placed on review for upgrade: * iStar Financial, Inc. -- Senior unsecured debt at Ca; preferred stock at C; senior debt shelf at (P)Ca; subordinated debt; (P)C; preferred stock shelf at (P)C. Moody's last rating action with respect to iStar Financial Inc. was on August 13, 2009, when Moody's downgraded the senior unsecured ratings to Ca from Caa1 and the preferred stock ratings to C from Caa3. iStar Financial's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of iStar's core industry and the company's ratings are believed to be comparable to those of other issuers of similar credit risk. iStar Financial Inc. is a property finance company that elects REIT status. iStar provides structured mortgage, mezzanine and corporate net lease financing. iStar Financial is headquartered in New York City, and had assets of $10.8 billion and equity of $1.8 billion as of September 30, 2010. J & R INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: J & R, Inc. dba Richard's Auto Sales dba J&R Auto Group 4514 Fayetteville Road Raleigh, NC 27603 Bankruptcy Case No.: 11-01350 Chapter 11 Petition Date: February 23, 2011 Court: United States Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: Jeffrey R. Hughes Debtor's Counsel: William P. Janvier, Esq. JANVIER LAW FIRM, PLLC 1101 Haynes Street, Suite 102 Raleigh, NC 27604 Tel: (919) 582-2323 Fax: (919) 582-2301 E-mail: bill@janvierlaw.com Scheduled Assets: $200,650 Scheduled Debts: $3,584,315 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb11-01350.pdf The petition was signed by Richard Godwin, president. JO-ANN STORES: Moody's Assigns 'B2' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service assigned B2 Corporate Family and Probability of Default Ratings to Jo-Ann Stores, Inc. At the same time Moody's also assigned a B1 (LGD 3, 38%) rating to the company's proposed senior secured term loan and a Caa1 (LGD 5, 82%) rating to the company's proposed senior unsecured bonds. The rating outlook is stable. The ratings assigned are subject to receipt and review of final documentation. Ratings Rationale The B2 Corporate Family Rating assigned to Jo-Ann reflects the company's highly leveraged capital structure following its proposed acquisition by affiliates of Leonard Green & Partners L.P. Moody's expects debt/EBITDA to be around 6.3 times and interest coverage (EBITA/interest expense) to be around 1.5 times. The ratings reflect the generally positive characteristics of the craft and hobby category, which has a loyal customer base and positive demographic trends. The rating also reflects Jo-Ann's solid execution during the recent recessionary environment, with the company reporting positive comparable store sales since 2007, while also materially expanding operating margins. Moody's expect that the company will be able to sustain these recent improvements, primarily through new store openings and continued investments in operating efficiencies. The stable rating outlook reflects Moody's expectations that Jo- Ann's leverage will remain high, and that it will only moderately deleverage over the next 12 to 24 months as the company increases its investment in new store openings and remodels. Ratings could be upgraded if the company continues to demonstrate sales growth and operating margin expansion while also deleveraging its balance sheet. Quantitatively ratings could be upgraded if debt/EBITDA is sustained below 5.5 times and interest coverage exceeds 1.75 times. Ratings could be downgraded if the company's recent positive trends in sales and operating margin expansion begins to reverse, liquidity erodes or financial policies become more aggressive. Quantitatively ratings could be downgraded if debt/EBITDA is sustained above 6.5 times or interest coverage falls below 1.25 times. These ratings were assigned: -- Corporate Family Rating at B2 -- Probability of Default Rating at B2 -- $650 million senior secured term loan due 2018 at B1 (LGD 3, 38%) -- $450 million senior unsecured notes due 2019 at Caa1 (LGD 5, 82%) Moody's last rating action on Jo-Ann Stores, Inc. was on March 1, 2010, when all ratings were withdrawn following the company's repayment of all rated debt. Headquartered in Hudson, OH, Jo-Ann Stores is a leading retailer of fabrics and craft supplies, operating 751 stores in 48 states as of January 29, 2011. Revenues for the fiscal year ended January 29, 2011, were $2.079 billion. JO-ANN STORES: S&P Downgrades Corporate Credit Rating to 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Hudson, Ohio-based Jo-Ann Stores Inc. to 'B' from 'BB-' and removed the rating from CreditWatch with negative implications, where it had been placed on Dec. 23, 2010. The outlook is stable. At the same time, S&P assigned its 'B+' issue-level rating to Jo- Ann's proposed $650 million senior secured term loan B facility due 2018 (one notch above the 'B' corporate credit rating on the company). S&P also assigned this debt a recovery rating of '2', indicating its expectation of substantial (70%-90%) recovery for lenders in the event of a payment default. In addition, S&P assigned Jo-Ann's proposed $450 million senior unsecured notes due 2019 its issue-level rating of 'CCC+' (two notches lower than the corporate credit rating) with a recovery rating of '6', indicating its expectation of negligible (0%-10%) recovery for noteholders in the event of a payment default. The company intends to use proceeds from the offerings, along with borrowings under the unrated $375 million asset-based revolving credit facility, cash on the balance sheet, the equity contribution from Leonard Green, and Jo-Ann management's rollover equity to finance the leveraged buyout of the company for about $1.6 billion or $61.00 per share in cash by affiliates of Leonard Green & Partners L.P. The ratings on the proposed new issues are subject to review of final terms and documents. The initial borrower and issuer is Needle Merger Sub Corp., which will be merged with and into Jo-Ann Stores Inc. upon completion of the acquisition. S&P's expectation is that the transaction will close before March 31, 2011. Jo-Ann Stores Inc. will be the surviving corporation and the ultimate issuer and borrower. "The ratings on Jo-Ann reflect S&P's expectations for modestly higher sales, some widening in operating margins as the company adds its new store format and continues to remodel other stores, and credit metrics modestly improving over the next year following the LBO," said Standard & Poor's credit analyst Jayne Ross. S&P views the company's business risk as weak given its participation in the highly competitive and fragmented craft and hobby retail industry and the seasonal nature of its earnings. The company's position as one of the top three players in the industry somewhat mitigates those factors. "In addition," continued Ms. Ross, "S&P views the company's financial risk profile as highly leveraged following its acquisition by affiliates of Leonard Green given its high debt levels, weak credit protection measures, and its moderate free operating cash flow generation." K-V PHARMACEUTICAL: Completes $32MM Common Stock Offering --------------------------------------------------------- K-V Pharmaceutical Company announced that it has entered into a definitive agreement with a group of institutional investors to raise approximately $32 million of gross proceeds from a private placement of 9,950,000 shares of its Class A Common Stock at $3.25 per share. The Company will use $20 million of the proceeds from the financing to repay certain outstanding amounts and other outstanding obligations under its credit agreement with U.S. Healthcare and the remainder for general corporate purposes, including the launch of MakenaTM. Subject to the satisfaction of customary closing conditions, the private placement is expected to close and fund on or about Feb. 17, 2011. The Company also announced it has agreed to terms with US Healthcare I, L.L.C. and US Healthcare II, L.L.C., affiliates of New York based Centerbridge Partners, L.P. to close on a multi- draw financing facility with a total commitment of $130 million. The amendment is expected to be completed on or prior to February 18, 2011. In addition, the Company has agreed to issue additional warrants to purchase 7,450,899 shares of the Company's Class A Common Stock, subject to completion of the private placement, at an exercise price of $1.62 per share. Upon completion of the definitive agreement, the loan terms and covenants will be amended to reflect the Company's current projections and timing of certain anticipated future events, including the planned disposition of certain assets. The significant components of the amended agreement will include extending the $60 million payment that was due on March 20, 2011 to three payments of $20 million each with the first payment due upon closing and funding the private placement, $20 million due in April 2011 and $20 million due in August 2011. In addition, all past covenant issues will be waived. In addition to the loan balance which remains outstanding as of Feb. 14, 2011, future draws against the facility, subject to achievement of certain MakenaTM related milestones, are anticipated to be $15 million in March 2011, $15 million in May 2011 and $10 million in each of July, August, September and October 2011. The shares of Class A Common Stock sold in the private placement have not been registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from the registration requirements. The Company has agreed to file a registration statement with the Securities and Exchange Commission covering the resale of the common stock sold in the private placement. Jefferies & Company, Inc. acted as sole placement agent on the private placement. Jefferies & Company, Inc. and Alvarez & Marsal advised the Company with respect to the restructuring of the Senior Secured Facility. About K-V Pharmaceutical Bridgeton, Mo.-based K-V Pharmaceutical Company (NYSE: Kva/KVb) -- http://www.kvpharmaceutical.com/-- is a fully-integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded prescription pharmaceutical products. The Company markets its technology-distinguished products through Ther-Rx Corporation, its branded drug subsidiary. At March 31, 2010, the Company's balance sheet showed $358.6 million in total assets, $497.7 million in total liabilities, and a stockholders' deficit of $139.1 million. * * * As reported in the Troubled Company Reporter on Jan. 3, 2011, BDO USA, LLP, in Chicago, expressed substantial doubt about K-V Pharmaceutical'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 suspended the shipment of all but one of the products manufactured by the Company and must comply with a consent decree with the Food and Drug Administration before approved products can be reintroduced to the market. The Company reported a net loss of $283.6 million on $152.2 million of net revenues for fiscal 2010, compared to a net loss of $313.6 million on $312.3 million of net revenue for fiscal 2009. KNOCK ON WOOD: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Knock On Wood, Inc. 14431 Jefferson Davis Hwy Woodbridge, VA 22191 Bankruptcy Case No.: 11-11252 Chapter 11 Petition Date: February 23, 2011 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer Debtor's Counsel: Shannon McLaughlin Guignon, Esq. COOCH & LAPHAM, PLLC 12701 Fair Lakes Circle, Suite 370 Fairfax, VA 22033 Tel: (703) 359-0088 E-mail: sguignon@coochandlapham.com Estimated Assets: $100,001 to $500,000 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/vaeb11-11252.pdf The petition was signed by Lance Frye, president. KOREA LINE: Files for Chapter 15 Protection in Manhattan -------------------------------------------------------- Korea Line Corp. filed for Chapter 15 bankruptcy protection (Bankr. S.D.N.Y. Case No. 11-10789) in the U.S. to bar creditors from seizing its shipping vessels and bunkers at U.S. ports. Receivers Jin Bang Lee and Byung Nam Choi estimated that the Debtor has US$100 million to US$500 million in debts and assets as of the Chapter 15 filing in Manhattan. Korea Line is undergoing rehabilitation before the Seoul Central District Bankruptcy Court (4th Division), Case No. 2011 Hoe-Hap 14, pursuant to the Korean Debtor Rehabilitation and Bankruptcy Act. James H. Power, Esq., U.S. counsel for the receivers, said the Chapter 15 filing was necessary as other KLC creditors are preparing to attach KLC assets that may now or in the future be located in the United States. He said that the procedures and frequent use of maritime arrest and attachment favor pre-judgment creditors seeking security for their claims. Most of the assets of KLC are vessels owned or chartered by KLC. These assets are engaged in global trade thereby potentially subjecting these KLC assets to port calls at U.S.-based ports. The receivers ask the U.S. Bankruptcy Court to immediately stay remaining actions in which KLC is a defendant. KLC is a defendant to U.S. lawsuits filed by World Fuel Services (Singapore) Pte Ltd., Asian Friendship Shipping Ltd., Odin Pacific Maritime Ltd., and Clipper Bulk Shipping. Korea's second-largest operator of dry-bulk ships, already in receivership in a Seoul court, expects to have a shortfall of $35.9 million in March, and will be unable to cover expenses, according to the filing. The U.S. filing is necessary to stop creditors from seizing assets that would prevent the company from continuing to trade, including its vessels, Mr. Power, U.S. counsel for receivers of the Korea- based bankruptcy. "Furthermore, it is difficult for a company undergoing debt reorganization such as KLC to post a bond to secure the release of its property," Mr. Power said. Under Chapter 15 of the bankruptcy code, foreign companies can block U.S. lawsuits and organize U.S. creditors to help a main reorganization in a foreign court. Receiver Jin Bang Lee said that due to the global economic recession caused by the global financial crisis of 2008, the Baltic Dry Index steeply dropped from 11,793 as of May 2008 to 1,400 as of January 2011, which in turn caused KLC's operating expenses such as fuel costs, port charges, etc., to exceed its operating income, causing the business index to deteriorate significantly. In addition, many customers who had chartered ships from KLC on a long-term basis did not pay the charter hires or returned the chartered ships early, causing a substantial increase in delinquent claims. KLC's liquid assets as of January 2011 totaled US$60,655,000, while the funds necessary for repayment of debts and opearting expenses in February 2011 is US$186,964,000 and in March 2011, US$170,163,000. KLC's operating income will not be sufficient to cover these amounts, with an expected shortfall of US$35,932,000 in March of 2011. KLC applied for rehabilitation in Korea under the DBRA on Jan. 26, 2011. The Korean court issued a stay order prohibiting attachment and execution of KLC's property on Jan. 26, 2011. Rehabilitation proceedings commenced Feb. 15, 2011, with the appointment of the receivers. KLC joins time-chartered operators Britannia Bulk PLC, Armada (Singapore) Pte Ltd. and Transfield ER Cape, which also commenced insolvency proceedings, according to court filings. Mr. Power can be reached at: James H. Power HOLLAND & KNIGHT, LLP 31 West 52nd Street New York, NY 10019 Tel: (212) 513-3200 Fax: (212) 385-9010 E-mail: james.power@hklaw.com About Korea Line Corp. Korea Line Corp. has been engaged in marine transport and port logistics businesses since 1968. Its head office is in Seoul Korea and its representative offices are in Shanghai and Singapore. KLC is a publicly listed company on the Korean Stock Exchange. Its operations are centered in Korea and the vas majority of its assets, shareholders and employees are located in Korea. KOREA LINE: Chapter 15 Case Summary ----------------------------------- Chapter 15 Petitioner: Jin Bang Lee Chapter 15 Debtor: Korea Line Corporation 135-878 KLC Building 145-9 Samsun-dong, Gangam-gu Seoul -South Korea Chapter 15 Case No.: 11-10789 Type of Business: The Debtor is a company based in Korea that provides marine transportation of freight and cargo as well as real estate sales and leasing services. Chapter 15 Petition Date: February 25, 2011 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Robert E. Gerber Petitioner's Counsel: James H. Power, Esq. HOLLAND & KNIGHT, LLP 31 West 52nd Street New York, NY 10019 Tel: (212) 513-3200 Fax: (212) 385-9010 E-mail: james.power@hklaw.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 MEMC ELECTRONIC: Moody's Assigns 'B1' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service assigned to MEMC Electronic Materials, Inc., a first-time B1 Corporate Family Rating, B1 Probability of Default Rating and SGL-2 Speculative Grade Liquidity Rating. The outlook is stable. Concurrently, Moody's assigned a B1 rating to MEMC's proposed $500 million senior notes maturing 2019. Net proceeds will be used for general corporate purposes including working capital, capital expenditures, construction of solar power projects and acquisitions. The assigned ratings are contingent on the review of final documentation and no material change in the terms and conditions of the debt transaction as advised to Moody's. These first-time ratings/assessments were assigned: * Corporate Family Rating -- B1 * Probability of Default Rating -- B1 * $500 Million Senior Notes due 2019 -- B1 (LGD-4, 54%) * Speculative Grade Liquidity Rating -- SGL-2 Rating Rationale The B1 CFR is supported by MEMC's leadership position as the third largest global semi wafer manufacturer, fifth largest solar wafer manufacturer and largest North American solar power developer. The B1 rating considers MEMC's broad Materials product portfolio supported by a strong history of R&D and technical expertise and low-cost polysilicon feedstock and manufacturing facilities that are located near customers' fabs. The company maintains good geographic diversity, a high quality customer base and an increasingly integrated solar business, which are also factored in the rating. At the same time, the B1 CFR considers that MEMC operates in the polysilicon semiconductor and solar wafer industry segments (i.e., Materials segments), which are characterized by strong competition, intense pricing pressures, polysilicon supply/demand dynamics and dependence on the volatile and cyclical semiconductor and photovoltaic markets. These concerns are further exacerbated by MEMC's high customer concentration (i.e., top ten customers account for 60% of total revenues) and potential volume shortfall payments to suppliers on take-or-pay contracts. The rating also captures the ongoing challenges to develop new products, improve manufacturing processes and reduce unit production costs given the high fixed costs associated with MEMC's integrated and capital intensive business. The rating incorporates MEMC's transitioning business model which stems from the 2009 acquisition and continuing integration of SunEdison, a developer/operator that constructs solar energy projects (i.e., Solar segment), and the potential risk that MEMC may need to support SE's non-recourse project finance debt for reputational reasons. Moody's recognizes that the fast growing and sizable solar market provides an opportunity to create a "pull-through" by SE to drive demand for MEMC's solar wafer production and a potential annuity-like income stream to offset the more volatile Materials segments. However, SE is expected to be a drag on MEMC's operating performance in FY11 as a result of operating losses and negative free cash flow generation. In order for SE to achieve the appropriate scale to contribute meaningful EBITDA, MEMC will need to make sizable preliminary investments at SE. The rating recognizes that SE's solar projects will require careful capital and risk management given that its project financing strategies rely greatly on attracting third party capital from a limited number of financial institutions and private equity sponsors. MEMC's SGL-2 speculative grade liquidity rating reflects the company's good liquidity position supported by approximately $850 million of pro forma cash balances (after expected working capital and capex usage in Q1FY11) and a $250 million credit facility maturing December 2012 ($138 million available as of December 2010 net of outstanding L/Cs). Moody's expectation for negative FCF generation in FY11 is mitigated by Moody's expectation that MEMC will maintain at least $750 million of balance sheet cash in Q1FY11 ramping to $1.0 billion in Q4FY11, plus access to its revolver. In addition, Moody's assumes that from time to time, SE may rely on MEMC's cash and revolver to finance its solar projects on an interim basis. Moody's expect MEMC to remain in compliance with its bank financial covenants over the next 12 months. The stable outlook reflects Moody's expectation that over the next 12--18 months, MEMC will maintain its position as a leading semiconductor and solar wafer manufacturer. It also anticipates that operating earnings and cash flows over the next year in the Materials segments will continue to improve from 2009-10 levels offset by operating losses and negative FCF in the Solar segment as SE's solar power project business experiences rapid expansion. Ratings could be upgraded if MEMC were to realize solar wafer demand "pull-through" benefits from the integration of its solar project development business, realize deferred revenue and cash flow from prior solar system sales and increase SE's scale resulting in meaningful positive EBITDA and FCF contribution, improve MEMC's operating margins to a higher sustainable range and/or reduce financial leverage to under 4.5x total debt to EBITDA (Moody's adjusted to include non-recourse debt, capitalized operating leases and underfunded pension) on a sustained basis. Ratings may be downgraded if MEMC's revenues, margins and profitability eroded as a result of a weakened competitive position, contraction in industry demand, and/or deterioration in polysilicon prices without a concomitant reduction in MEMC's manufacturing costs. Additionally, to the extent MEMC's Moody's adjusted total debt to EBITDA rose above 6.0x for an extended period, ratings could experience downward pressure. Headquartered in St. Peters, Missouri, MEMC is a leading supplier of polysilicon semiconductor and solar wafers to semiconductor foundries, IDMs (integrated device manufacturers) and solar cell/module manufacturers. Through its SunEdison subsidiary, MEMC also develops, constructs and operates solar energy power projects. Revenues and EBITDA (Moody's adjusted) for the twelve months ended Dec. 31, 2010, were approximately $2.2 billion and $203 million, respectively. LAS VEGAS MONORAIL: Disclosure Statement Hearing Moved to April --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada will convene a hearing on April 11, 2011, at 1:30 p.m., to consider the adequacy of the information contained in the Disclosure Statement explaining the Plan of Reorganization filed by Las Vegas Monorail Company on August 17, 2010. The Disclosure Statement hearing was originally set for March 4, 2011, but was pushed back to April upon the Court's approval of the agreement between Las Vegas Monorail and other parties to continue the hearing. The other parties consist of Wells Fargo Bank, N.A., in its capacity as indenture trustee for the 1st Tier Bondholders, U.S. Bank National Association as co-trustee and successor trustee for the 2nd Tier Bondholders, the Director of the State of Nevada Department of Business and Industry, Ambac Assurance Corporation and The Segregated Account of Ambac Assurance Corporation, by its Court Appointed Rehabilitator, the Office of the Commission of Insurance for the State of Wisconsin, and Bombardier Transportation Holdings USA, Inc. Parties have until March 28, 2011, to file objections to the Disclosure Statement. At the April 11 hearing, the Court will also consider approval of proposed solicitation procedures and a classification motion. Papers filed in court note that a motion to terminate exclusivity is off calendar. Plan Terms LVMC's Disclosure Statement relates that the primary objective of the reorganization and restructuring under the Plan is to maximize returns to those creditors entitled to recoveries from the estate. The Debtor desires to achieve this objective through an expeditious restructuring of, among other things, a Financing Agreement, a 1st Tier Note, and certain other debt obligations of the Debtor and other actions. The Plan classifies claims filed against the Debtor in nine classes: Class Description Estimated Amount ----- ----------- ---------------- 1 Other Priority Claims $1,806 2 Other Secured Claims $1,700 3 General Unsecured Claims $5,000 to $175,000 4 1st Tier Bond Secured Claims $7,500,000 5 1st Tier Bond Unsecured Claims $445,000,000 6 2nd Tier Bond Claims $158,749,493 7 3rd Tier Bond Claims $48,500,000 8 Director Claims $0 9 Subordinated Claims $0 Classes 1 and 2 are unimpaired and are deemed to accept the Plan, while Classes 3, 4, 5, 6, 7, 8 and 9 are impaired. Classes 3, 4, 5, 8 are entitled to vote on the Plan while Classes 6, 7, 9, because they are deemed to reject the Plan, are not voting. Class 1 claims will be paid in full in cash. Class 2 claims will be paid in full in cash or otherwise left unimpaired. Class 3 claims will be paid a pro rata share of $175,000. Class 4 claims will be entitled to amended and restated 1st Tier Note for $7,500,000 to be delivered to the Director. Class 5 claims will be entitled to an additional payment obligation note for $11,000,000 to be delivered to the Director. Class 6 claims will not any receive distribution and will be subordinated to payment in full of 1st Tier Bond Claims. Class 7 claims will not any receive distribution and will be subordinated to payment in full of 1st Tier Bond Claims and 2nd Tier Bond Claims. Class 8 claims will participate in 1st Tier Bond Claims as provided for in the Amended and Restated Financing Agreement and 1st and 2nd Tier Indenture. Class 9 will receive no distribution. On and after the Plan Effective Date, Reorganized LVMC will continue to be managed by the existing managers, officers, and directors under their existing employment agreements, if any, and otherwise according to the terms and conditions that existed on the date of the filing of the Plan, unless otherwise disclosed. Reorganized LVMC will be responsible for the payment of all Allowed Claims to be paid pursuant to the Plan which are not paid on or before the Effective Date, as well as all Allowed Claims, including Taxes and Professional Fees, incurred by the Debtor and in operating its business and complying with the Plan up to and including the Effective Date, whether due and payable before or after the Effective Date. Reorganized LVMC is authorized without further order of the Bankruptcy Court to obtain and effectuate the Working Capital Loan as the board of directors of Reorganized LVMC determines in its business judgment. On and after the Plan Effective Date, the initial board of directors of Reorganized LVMC will be comprised of the five individuals serving on the board of directors on the Confirmation Date. Thereafter, members of the board of directors will be selected pursuant to Reorganized LVMC Organizational Documents. The initial officers will be comprised of the individuals employed as officers on the Confirmation Date. The Debtor will disclose, at or prior to the Confirmation Hearing, the identity of the individuals. Conditions to Effectiveness Conditions precedent to the occurrence of the Plan Effective Date are: (a) The Confirmation Order will be a Final Order; (b) No request for revocation of the Confirmation Order under Section 1144 of the Bankruptcy Code have been made, or, if made, will remain pending, including any appeal; (c) All documents necessary to implement the transactions contemplated by the Plan will be in form and substance reasonably acceptable to the Debtor and the Director; and (d) Sufficient Cash and other Assets will be set aside, reserved and withheld by the Debtor to make the distributions required to be paid on the Effective Date or within 60 days thereafter by the Bankruptcy Code and the Plan. As of the Plan Effective Date, Reorganized LVMC will obtain sufficient tail coverage under a directors' and officers' liability insurance policy for the directors and officers of the Debtor and Reorganized LVMC, as applicable for a period of six years. The Debtor will assume and, if applicable, assign to Reorganized LVMC all of the D&O Liability Insurance Policies pursuant to Section 365(a) of the Bankruptcy Code as of the Effective Date. Entry of the Confirmation Order will constitute approval by the Bankruptcy Court of the Debtor's assumption and assignment by the Debtor to Reorganized LVMC of each of the D&O Liability Insurance Policies. Notwithstanding anything to the contrary contained in the Plan, Confirmation of the Plan will not discharge, impair or otherwise modify any indemnity obligations assumed by the assumption of the D&O Liability Insurance Policies, and each indemnity obligation will be deemed and treated as an Executory Contract that has been assumed by the Debtor and assigned to Reorganized LVMC under the Plan as to which no proof of Claim need be filed. LVMC's Projected Financial Statements demonstrate that the Debtor is capable of satisfying the obligations proposed under the Plan, including the payment of amounts due under the Amended and Restated 1st Tier Note and the Additional Payment Obligation Note. The Plan further notes that, as can be seen from the Debtors' filed monthly financial reports, the Debtor has generally generated revenues and incurred expenses as anticipated. As such, the Debtor is capable of meeting all Cash demands under the Plan. Liquidation Analysis According to the Plan, the Debtor has determined that in a liquidation under Chapter 7 of the Bankruptcy Code, the recoveries for each Class of Claims would vary, but would not exceed the projected recoveries under the Plan. Specifically, the Liquidation Analysis estimates proceeds of $12,925,000 would be available to Creditors in the event of liquidation of the Debtor under Chapter 7, which, but for an insignificant portion to be distributed to Holders of Allowed General Unsecured Claims, would primarily be distributed to the Director and the Director's assignee, the 1st Tier Trustee, in full and final satisfaction of Claims arising under the Financing Agreement and 1st Tier Note. Under the Plan, however, the Director and the 1st Tier Trustee will receive in full and final satisfaction of the Secured Claim portion of the Claims arising under the Financing Agreement and 1st Tier Note the Amended and Restated 1st Tier Note for $7,500,000, and will receive in full and final satisfaction of the Unsecured Claim portion of the Claims arising under the Financing Agreement and 1st Tier Note the Additional Payment Obligation Note for $11,000,000. Therefore, Holders of Class 4 and Class 5 Claims will receive the same or better treatment under the Plan than they would in a Chapter 7 liquidation. Likewise, under the Plan, Holders of Class 3 General Unsecured Claims will receive a distribution of 80%, up to a total of $175,000 in payment of approximately $150,000 - $175,000 in total Class 3 Claims (excluding damages from Debtor's rejection of Executory Contracts and Unexpired Leases and Disputed personal injury claims), where in a liquidation, the Creditors would receive an insignificant distribution. The Class 8 Holder of Director Claims will participate in the distributions to Holders of Class 4 Claims and Class 5 Claims as provided for in the Amended and Restated Financing Agreement and the 1st and 2nd Tier Indenture, and therefore will also receive better treatment under the Plan than in a Chapter 7 liquidation. Classes 6, 7, and 9 would receive nothing in the event of distribution under either a Chapter 7 liquidation or the Plan, and, therefore, would not receive more in liquidation than under the Plan. About Las Vegas Monorail Las Vegas, Nevada-based Las Vegas Monorail Company, organized by the State of Nevada in 2000 as a nonprofit corporation, owns and manages the Las Vegas Monorail. The Monorail is a seven-stop, elevated train system that travels along a 3.9-mile route near the Las Vegas Strip. LVMC has contracted with Bombardier Transit Corporation to operate the Monorail. Though it benefits from its tax-exempt status due to being a nonprofit entity, LVMC claims to be the first privately-owned public transportation system in the nation to be funded solely by fares and advertising. LVMC says it receives no governmental financial support or subsidies. The Company filed for Chapter 11 bankruptcy protection on January 13, 2010 (Bankr. D. Nev. Case No. 10-10464). Gerald M. Gordon, Esq., at Gordon Silver, assists the Company in its restructuring effort. Alvarez & Marsal North America, LLC, is the Debtor's financial advisor. Stradling Yocca Carlson & Rauth is the Debtor's special bond counsel. Jones Vargas is the Debtor's special corporate counsel. The Company disclosed $395,959,764 in assets and $769,515,450 in liabilities as of the Petition Date. In May 2010, Ambac Assurance Corp. lost its bid to stay the bankruptcy case while a district court considers whether the bankruptcy court wrongly rejected Ambac's argument that Monorail was a municipality and thus ineligible to be a Chapter 11 debtor. LENNY DYKSTRA: Bankr. Court Denies "Homestead Exemption" -------------------------------------------------------- Peg Brickley, writing for Dow Jones' Daily Bankruptcy Review, reports that Lenny Dykstra lost his bid for a "homestead exemption" for $75,000 worth of household goods and furnishings in the Thousand Oaks, Calif., mansion that was sold out from under him in bankruptcy court. According to Ms. Brickley, Judge Geraldine Mund listed a number of reasons for denying the exemption, including the fact that the mansion "has been essentially stripped of anything that can be removed including appliances, electronics, light fixtures, plumbing, etc." DBR relates alawyer for the Chapter 7 trustee did not respond Friday to an invitation to talk about the status of Mr. Dykstra's case. DBR reports that Mr. Dykstra said Friday he still has hope of pressing his predatory lending case over the home, acquired for some $18.5 million at the height of the housing bubble. Mr. Dykstra contends Washington Mutual had put him into a loan he couldn't afford, allegedly breaching consumer protection laws in the process. J.P. Morgan Chase & Co. picked up the loan when it bought WaMu. About Lenny Dykstra Lenny Dykstra is a former Major League Baseball all-star player. He was center fielder for the New York Mets and Philadelphia Phillies. He filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 09-18409) on July 7, 2009, in Woodland Hills, California. The Law Office of M. Jonathan Hayes, in Northridge, California, represents the Debtor. The Debtor estimated up to $50,000 in assets and $10 million to $50 million in debts in his Chapter 11 petition. A Chapter 11 trustee was appointed in September 2009, and the case was converted to a liquidation in Chapter 7 on November 20, 2009. The trustee -- Arturo M. Cisneros -- was investigating the disposition of personal property both before and after the Chapter 11 filing. In August 2010, Mr. Cisneros stepped down as Chapter 7 trustee following issues with his failing to disclose the extent of his business with J.P. Morgan Chase & Co., which happens to be largest creditor in Mr. Dykstra's case. LEVEL 3 COMMS: Thomas Stortz to Retire on April 1 ------------------------------------------------- On Feb. 16, 2011, Thomas C. Stortz and Level 3 Communications, LLC on behalf of its parent and affiliates entered into a Retirement Agreement and General Release. Level 3 Communications, LLC is an indirect, wholly owned subsidiary of Level 3 Communications, Inc. The Agreement confirms the retirement of Mr. Stortz effective April 1, 2011. In addition, as part of his retirement, Mr. Stortz resigned all of his officer and director or manager positions with each of the Company's subsidiaries. So long as Mr. Stortz does not revoke the Agreement, and in consideration of his years of service to Level 3 LLC and its affiliates, notice provided with respect to his plan to retire and his efforts in transitioning his responsibilities, subject to the terms of the Agreement, Level 3 LLC will pay to Mr. Stortz no later than June 6, 2011, a lump sum amount equal to $712,500, which represents eighteen months of his base salary, less withholding for federal and state taxes and less appropriate payroll deductions. In addition, Mr. Stortz will remain eligible for, the payment of any discretionary bonus to Mr. Stortz for calendar year 2010 should the Compensation Committee of the Company's Board of Directors determine to award Mr. Stortz a bonus for 2010, as determined in its sole discretion. Also, if Level 3 LLC pays a discretionary bonus to its current employee base for calendar year 2011, Mr. Stortz will be eligible to receive twenty-five% of his targeted bonus amount of $475,000, multiplied by the percentage to which Level 3 LLC funds any such discretionary bonus for calendar year 2011, less withholding for federal and state taxes and less appropriate payroll deductions. Mr. Stortz was granted certain outperform stock appreciation rights, and consistent with the terms of the applicable master award agreement, 1,032,247 OSO awards will be unvested and outstanding as of April 1, 2011. In accordance with the current retirement benefit program and the terms of the applicable OSO award agreement, these 1,032,247 unvested and outstanding OSOs will not expire on April 1, 2011 and will remain outstanding. As of Feb. 17, 2011, the OSOs had a value of $335,642. In accordance with the current retirement benefit program and the terms of the applicable restricted stock unit award agreement, the restrictions on his outstanding 773,779 restricted stock units or RSUs shall all lapse on April 1, 2011. The shares of common stock issuable upon the RSU restrictions lapsing will not be issued to Mr. Stortz until the expiration of that period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended. As of Feb. 17, 2011, the shares of the Company's common stock underlying these 773,779 RSUs had a value of $1,091,028. In exchange for the benefits offered in the Agreement, Mr. Stortz provided to Level 3 LLC a general release with respect to any claims arising out of his employment or retirement. Mr. Stortz agreed, for a period of 12 months from April 1, 2011, that he will not: (i) directly or indirectly solicit the services of, induce away from employment with, or hire any employee of Level 3 LLC or its affiliates during their employment with Level 3 LLC; (ii) solicit from any corporation, firm, or organization that is a customer of Level 3 LLC any business, service, or product that Level 3 LLC provides to that customer; or (iii) induce or attempt to induce any customer, supplier, licensee or other business relation of Level 3 LLC to cease doing business with Level 3 LLC or interfere with the relationship between any such customer, supplier, licensee or business relation and Level 3 LLC; or (iv) without the express written consent of the Chief Executive Officer or the Chief Operating Officer of the Company, which consent will not be unreasonably withheld, directly or indirectly engage in, own, manage, be employed by, assist, loan money to, or promote business for any person or entity who or which is a competitor of Level 3 LLC. A full-text copy of the Retirement Agreement and General Release is available for free at http://ResearchArchives.com/t/s?73f4 Consulting Agreement On Feb. 16, 2011, Mr. Stortz and Level 3 LLC entered into a Consulting Agreement, which will become effective on April 2, 2011. The term of the Consulting Agreement will extend to April 1, 2012, unless earlier terminated. In consideration for Mr. Stortz's complete and timely performance of the services as agreed upon from time to time between Mr. Stortz and the Company's Chief Executive Officer, the Company will pay Mr. Stortz the sum of $50,000 per month for the month of April, 2011, and $50,000 per month for each full month thereafter for the term of the Consulting Agreement, subject to any quarterly adjustment. The Consulting Agreement provides that Mr. Stortz will meet with the Company's Chief Executive Officer prior to each calendar quarter during the term of the Agreement to discuss any adjustment in Mr. Stortz's monthly compensation for the next quarter, based upon the expectation of Mr. Stortz's services during that quarter. Any adjustment agreed will be effective for the following quarter. In addition, Mr. Stortz will receive a quarterly award of 58,486 OSOs on July 1, 2011 and for each calendar quarter thereafter for the term of the Consulting Agreement, and a single award of 233,942 RSUs on July 1, 2011, pursuant to the terms of separately executed OSO and RSU agreements between Mr. Stortz and the Company. Level 3 LLC will also pay Mr. Stortz's reasonable out of pocket expenses incurred in connection with the delivery of the services, consistent with Level 3 LLC's expense reimbursement policies. Mr. Stortz agreed to indemnify and hold harmless Level 3 LLC and its officers, directors, agents and employees, from and against any and all claims, demands, causes of action, losses, damages, costs and expenses arising out of or relating to the Consulting Agreement, except to the extent such claim, demand, cause of action, loss, damage, cost and expense is caused solely by the negligent acts or failures to act of Level 3 LLC, its officers, directors, agents and employees, in which case Level 3 LLC will indemnify Mr. Stortz for any Losses caused by Level 3 LLC's negligent acts or failures to act. Mr. Stortz agreed, that for a period of 15 months from April 1, 2011, he, or any of his employees, officers or directors, will not: (a) directly or indirectly, solicit the services of, induce away from employment with, or hire any employee of the Company or its affiliates during their employment with the Company and for a period of six months after they are no longer employed by the Company, without the Company's prior written consent; or (b) solicit, directly or indirectly, for himself or on behalf of a third party any corporation, firm, or organization that is a customer of the Company any business, service or product that the Company is providing that customer. In addition, Level 3 LLC may terminate the Consulting Agreement for "cause." For purposes of the Consulting Agreement "cause" means Level 3 LLC's good faith determination that Mr. Stortz has committed any of the following in breach of the Consulting Agreement: (1) failure to provide the services as contemplated by the Consulting Agreement; (2) conduct that is materially injurious to Level 3 LLC or any of its affiliates; (3) fraud, theft or embezzlement or any other material act of dishonesty with respect to Level 3 LLC or its affiliates; (4) willful use or imparting of any confidential or proprietary information of Level 3 LLC or an affiliate; or (5) a felony or crime involving moral turpitude. A full-text copy of the Consulting Agreement is available for free at http://ResearchArchives.com/t/s?73f5 About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. The Company's balance sheet at Dec. 31, 2010, showed $8.35 billion in total assets, $8.51 billion in total liabilities and a $157 million stockholders' deficit. Level 3 Communications carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. MAGIC BRANDS: Wants Plan Solicitation Period Extended to June 20 ---------------------------------------------------------------- Deel, LLC, formerly Magic Brands, LLC, and its debtor affiliates filed on Feb. 22, 2011, its third motion for the entry of an order extending their exclusive solicitation period by approximately 90 days, from March 21, 2011, to June 20, 2011, to enable them and the official committee of unsecured creditors, which has supported the Plan, to focus on confirming the Plan. The Debtors state that their Plan is a liquidating plan, thus allowing the solicitation of competing plans would achieve no benefit to creditors and instead "would undoubtedly lead to significant delay and additional administrative costs." On Feb. 11, 2011, the Debtors filed an Amended Disclosure Statement describing their consolidated Chapter 11 Plan of Liquidation. The disclosure statement hearing is scheduled on March 21, 2011. In the disclosure statement motion, the Debtors requested an April 29, 2011 voting deadline and a May 12, 2011 confirmation hearing. As reported in the Jan. 21, 2011 edition of the Troubled Company Reporter, all secured claims and financing for the Chapter 11 case were paid in full from the sale of most of the Debtors' assets to Luby's Inc. Magic Brands had sold its Fuddruckers stores and franchise business to restaurant operator Luby's Inc. for $63.5 million. The Plan says unsecured creditors will be paid after creditors with higher priorities are fully paid. The Disclosure Statement only says unsecured creditors would have a meaningful recovery. There are blanks in the disclosure statement in connection with the expected recovery of unsecured creditors and other creditors. Subordinated creditors are to receive nothing unless unsecured creditors are paid in full. About Magic Brands Headquartered in Austin, Texas, Magic Brands, LLC -- http://www.fuddruckers.com/-- operated 62 Fuddruckers locations in 11 states and 3 Koo Koo Roo restaurants in California. Magic Brands and its operating units filed for Chapter 11 protection on April 21, 2010 (Bankr. D. Del. Lead Case No. 10-11310). It estimated assets of up to $10 million and debts at $10 million to $50 million in its Chapter 11 petition. Affiliate Fuddruckers, Inc., also filed, estimating assets and debts at $50 million to $100 million. FocalPoint Securities, LLC, serves as investment banker to Magic Brands, and Goulston & Storrs serves as lead bankruptcy counsel. Kurtzman Carson Consultants, LLC, is the claims and notice agent. The Official Committee of Unsecured Creditors has tapped Kelley Drye & Warren LLP as counsel and Klehr Harrison Harvey Branzburg LLP as co-counsel. Magic Brands in July 2010 closed the sale of the Fuddruckers stores and franchise business to restaurant operator Luby's Inc. for $63.5 million. Magic Brands, which has changed its name to Deel LLC following the Luby's sale, filed a liquidating Chapter 11 plan on Jan. 18. Bill Rochelle, the bankruptcy columnist for Bloomberg News, said the Disclosure Statement explaining the Plan indicated that unsecured creditors should have a "meaningful recovery." Mr. Rochelle said there are blanks in the disclosure statement where creditors later will be told the expected percentage of their recovery. The Bankruptcy Court will convene a hearing on March 21, 2011, to consider adequacy of disclosure statement explaining the Plan of Liquidation. MAJESTIC GROUP: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Majestic Group, LLC fdba Texoma Turf Farms, LLC fdba Texoma Plant and Tree Farms, LLC 368 National Drive Rockwall, TX 75032 Bankruptcy Case No.: 11-31178 Chapter 11 Petition Date: February 23, 2011 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Robert Thomas DeMarco, Esq. DEMARCO-MITCHELL, PLLC 1255 W. 15th St., Ste 805 Plano, TX 75075 Tel: (972) 578-1400 Fax: (972) 346-6791 E-mail: robert@demarcomitchell.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/txnb11-31178.pdf The petition was signed by David R. Clark, president/managing member. MERUELO MADDUX: Seeks to Toss Out a Rival Reorganization Plan ------------------------------------------------------------- Dow Jones' DBR Small Cap reports that Meruelo Maddux Properties Inc. is asking a bankruptcy judge next week to toss out a rival reorganization plan that calls for the ouster of Chief Executive Richard Meruelo and the former treasurer of collapsed mortgage lender Taylor, Bean & Whitaker Mortgage Corp. is slated to appear in federal court to enter a plea agreement on federal criminal charges. About Meruelo Maddux Meruelo Maddux and its affiliates filed for Chapter 11 protection (Bankr. C.D. Calif. Lead Case No. 09-13356) on March 26, 2009. Aaron De Leest, Esq., John J. Bingham, Jr., Esq., and John N. Tedford, Esq., at Danning Gill Diamond & Kollitz, represent the Debtors in their restructuring effort. The Debtors' financial condition as of Dec. 31, 2008, showed $681,769,000 in assets and $342,022,000 of debts. FTI Consulting, Inc., serves as the Debtors' financial advisors, Ernst & Young as independent auditors and tax advisors, DLA Piper LLP (US) as special securities and litigation counsel, and Waldron & Associates, Inc. as real estate appraiser. The U.S. Trustee has appointed an official committee of unsecured creditors and a separate official shareholders' committee in the case. SulmeyerKupetz, APC, serves as the Creditors Committee's counsel and Kibel Green, Inc., as its financial advisor. The equity committee has sought to retain Ron Orr & Professionals, Inc., Rodiger Law Office, and Jenner & Block as counsel, and Kibel Green, Inc. as its financial advisor. The Debtors; Legendary Investors Group No. 1, LLC, and East West Bank; and Charlestown Capital Advisors, LLC and Hartland Asset Management Corporation have proposed rival reorganization plans in the case. In mid-January 2011, the Debtors struck a deal with the Legendary Group to drop the group's competing plan. The Debtors have hired Kurtzman Carson Consultants as solicitation and balloting agent. Legendary Investors Group No. 1, LLC, is represented in the case by Jeremy V. Richards, Esq., and Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP; and Surjit P. Soni, Esq., at The Soni Law Firm. East West Bank is represented by Curtis C. Jung, Esq., and Monica H. Lin, Esq., at Jung & Yuen, LLP, and Elmer Dean Martin III, Esq. Charlestown Capital Advisors, LLC and Hartland Asset Management Corporation are represented in the case by Christopher E. Prince, Esq., Matthew A. Lesnick, Esq., and Andrew R. Cahill, Esq., at Lesnick Prince LLP. MONEYGRAM INT'L: To Terminate Employee Deferral Accounts -------------------------------------------------------- The Board of Directors of MoneyGram International, Inc., upon recommendation of the Human Resources and Nominating Committee, amended and restated the MoneyGram International, Inc. Deferred Compensation Plan, effective as of Feb. 16, 2011, to (1) terminate all employee deferral accounts effective Feb. 16, 2011 and pay each participant the balance of the participant's account in a lump sum one year from termination and (2) cash out all employer deferral accounts if and when the account balance falls below the applicable dollar amount under Section 402(g)(1)(B) of the Internal Revenue Code. A full-text copy of the Plan is available for free at: http://ResearchArchives.com/t/s?73fd About MoneyGram International MoneyGram International, Inc. (NYSE: MGI) -- http://www.moneygram.com/-- is a leading global payment services company. The Company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram is a New York Stock Exchange listed company with 203,000 global money transfer agent locations in 191 countries and territories. The Company's balance sheet at Dec. 31, 2010, showed $5.12 billion in total assets, $5.06 billion in total liabilities, $999.35 million in mezzanine equity and a $942.48 million stockholders' deficit. * * * According to the Troubled Company Reporter on July 1, 2010, Fitch Ratings has affirmed the Issuer Default Ratings for MoneyGram International Inc. and MoneyGram Payment Systems Worldwide, Inc., at 'B+'. Outlook is stable. Fitch noted that the ratings could be negatively impacted by further declines in remittance volumes driven by macro economic factors or decreases in migrant labor populations worldwide. MONTENAPO: Closes for Second Time Since Debut --------------------------------------------- Lisa Fickenscher, writing for Crain's New York Business, reports that Montenapo, the large Italian restaurant in the New York Times building on Eighth Avenue, has closed for the second time since it debuted 20 months ago. The report relates that Gennaro Sbarro, who owns Salute at 270 Madison Ave. and several restaurants on Long Island, bought the troubled eatery a year ago from hotelier Henry Kallan. He was the third owner for the restaurant. "We've returned it to the landlord," Mr. Sbarro said, according to Crain's. "We tried our best to make this property work. I don't think there is anyone to blame outside the economy." MPM TECHNOLOGIES: To Sell 100% Shares of MPM Mining to CEO ---------------------------------------------------------- On Feb. 18, 2011, MPM Technologies, Inc., entered into a Purchase Agreement with Michael J. Luciano, the Company's Chairman of the Board of Directors, Chief Executive Officer and holder of a majority of the Company's outstanding common stock. Under the terms of the Purchase Agreement, the Company proposes to sell to Mr. Luciano 100% of the issued and outstanding shares of MPM Mining Inc., the Company's wholly-owned subsidiary, in exchange for: (i) cancellation of approximately $14 million of the Company's outstanding indebtedness; (ii) retirement of all shares of Company common stock currently held by Mr. Luciano; and (iii) cancellation of all options to purchase Company common stock currently held by Mr. Luciano. Closing is expected to occur on or before May 18, 2011 and is subject to certain conditions and contingencies, including agreement among the parties on final terms and provisions, receipt of adequate financing by Mr. Luciano and receipt of shareholder approval. The Purchase Agreement may be terminated by mutual written consent at anytime before closing or by either party in the event the conditions to closing are not satisfied on or before May 18, 2011. On Feb. 18, 2011, MPM Technologies, Inc. entered into a Sales Agreement with Carbon Cycle Investment LLC. Under the terms of the Sales Agreement, the Company proposes to sell to Carbon Cycle Investment LLC 67% of the Company's authorized but unissued common stock for $2,000,000. Carbon Cycle Investment's plan is to further develop MPM subsidiaries, AirPol, Inc. and Nupower, Inc., and add a new subsidiary that includes sustainable biofuel, feedstock production and energy parks. Closing is expected to occur on or before May 18, 2011 and is subject to certain conditions and contingencies and receipt of shareholder approval. About MPM Technologies Headquartered in Parsippany, N.J., MPM Technologies Inc. (OTC BB: MPML) -- http://www.mpmtech.com/-- operates through its three wholly owned subsidiaries: AirPol Inc., NuPower Inc. and MPM Mining Inc. During the year ended Dec. 31, 2007, AirPol was the only revenue generating entity. AirPol operates in the air pollution control industry. It sells air pollution control systems to companies in the United States and worldwide. The company through its wholly owned subsidiary NuPower is engaged in the development and commercialization of a waste-to-energy process known as Skygas. These efforts are through NuPower's participation in NuPower Partnership, in which MPM has a 58.21% partnership interest. NuPower Partnership owns 85% of the Skygas Venture. In addition to its partnership interest through NuPower Inc., MPM also owns 15% of the Venture. The Company's balance sheet at Sept. 30, 2010, showed $1.17 million in total assets, $15.32 million in total liabilities, all current, and a stockholders' deficit of $14.15 million. The Company recorded a net loss of $1,563,759 for 2009 from a net loss of $1,717,511 for 2008. MXENERGY HOLDINGS: Holds Call for Dec. 31 Qtr. Results ------------------------------------------------------ On Feb. 17, 2011, MXenergy Holdings, Inc. held a conference call to discuss the Company's financial results for its fiscal quarter ended Dec. 31, 2010. Participants in the said conference call were Philip Mittleman, MXenergy Holdings Inc. - Associate General Counsel; Jeffrey Mayer, MXenergy Holdings Inc. - President & CEO; and Chaitu Parikh MXEnergy Holdings Inc. - EVP & CFO. "During the second half of fiscal year 2010 and the first half of fiscal year 2011, we have focused on growth in new as well as in some of our existing electricity markets where we have spotted opportunities," Mr. Mayer said. "This growth has the beneficial impact of improving the seasonal cash flow associated with the electricity business segment and to reduce risks associated with commodity and geographic concentrations." "We continue to work hard on stemming attrition, improving our customer communications, branding and loyalty programs, and in some cases, offering saver rates to loyal customers who contact us with lower competitive offers," Mr. Mayer said during the conference call. "During the first half of fiscal year 2011, we continued to develop marketing strategies for new markets that we consider to be strong opportunities for growth. In addition, we continue to look for opportunities to grow in our existing markets. Among other things, we have focused on building customer brand awareness and loyalty and enhancing the customer experience." A copy of the transcript of the Earnings Call is available for free at http://ResearchArchives.com/t/s?7406 As reported in the Feb. 22, 2011 edition of the Troubled Company Reporter, MxEnergy Holdings reported net income of $25.70 million on $183.82 million of sales of natural gas and electricity for the three months ended Dec. 31, 2010, compared with net income of $18.22 million on $152.77 million of sales of natural gas and electricity for the same period during the prior year. About MxEnergy Holdings MxEnergy Holdings Inc. was founded in 1999 as a retail energy marketer. The two principal operating subsidiaries of Holdings are MxEnergy Inc. and MxEnergy Electric Inc. which are engaged in the marketing and supply of natural gas and electricity, respectively. Holdings and its subsidiaries operate in 39 market areas located in 14 states in the United States and in two Canadian provinces. The Company's balance sheet at Dec. 31, 2010 showed $229.45 million in total assets, $139.71 million in total liabilities and $89.74 million in stockholders' equity. MxEnergy carries 'Caa3' long term corporate family and 'Ca/LD' probability of default ratings from Moody's Investors Service. NO FEAR RETAIL: Files for Chapter 11 in San Diego ------------------------------------------------- No Fear Retail Stores, Inc., and its affiliates filed for Chapter 11 protection (Bankr. S.D. Calif. Lead Case No. 11-02896) in San Diego, California. No Fear Retail estimated assets of $10 million to $50 million and debts of up to $10 million as of the Chapter 11 filing. The Debtors are part of a business enterprise that primarily involves the retail and wholesale sale of casual apparel and accessories as well as protective motocross equipment and licensing of intellectual property rights. Their corporate offices and warehouse are located at 1812 Aston Avenue, Carlsbad, California. NO FEAR RETAIL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: No Fear Retail Stores, Inc. 1812 Aston Avenue Carlsbad, CA 92008 Bankruptcy Case No.: 11-02896 Chapter 11 Petition Date: February 24, 2011 Court: U.S. Bankruptcy Court Southern District of California (San Diego) Judge: Margaret M. Mann Debtor's Counsel: David S. Kupetz, Esq. SULMEYER, KUPETZ, A PROFESSIONAL CORP 333 South Hope Street, 35th Street Los Angeles, CA 90071 Tel: (213) 626-2311 E-mail: dkupetz@sulmeyerlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Mark Simo, chief executive officer. Debtor-affiliates filing separate Chapter 11 petitions on Feb. 24: Entity Case No. ------ -------- No Fear MX, Inc. 11-02897 Simo Holdings, Inc. 11-02898 No Fear Real Estate's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Credit Cash NJ, LLC Trade Debt $1,194,807 605 Park Avenue, Sixth Floor New York, NY 10022 Silver Triangle Industries Trade Debt $647,978 11211 Sorrento Valley Road, Suite 1 San Diego, CA 92121 McGladrey & Pullen, LLP Trade Debt $471,804 1455 Frazee Road, Suite 600 San Diego, CA 92108 Jamie Middleton Note Payable $360,672 8102 North Mummy Mountain Road Paradise Valley, AZ 85253 Fasken Martineau Dumoulin LLP Trade Debt $312,442 Toronto Dominion Bank Tower, Suite 4200 M5K 1N6 Toronto CAN La Jolla Group, Inc. Note Payable $235,230 Latham & Watkins LLP Trade Debt $220,870 Jido & Juniar, Inc. Trade Debt $220,538 Tony Wanket Construction Note Payable $217,822 Reno Retail Company LLC Lease Litigation $200,000 Settlement Agreement SRH Productions Trade Debt $149,063 Cygnus Sportswear, Inc. Trade Debt $148,104 UPS Trade Debt $129,951 Robin Houston Note Payable $101,274 Coastal Grand Myrtle Beach Trade Debt $88,488 Coba-Blackmore Trade Debt $87,486 LFP Apparel, LLC Trade Debt $86,921 Simi Valley Mail, LLC Trade Debt $75,447 Paradise Valley Mall SPE, LLC Lease Litigation $70,000 Ralph's Sportswear LLC Trade Debt $60,242 NORTEL NETWORKS: Gets June 30 Extension of CCAA Stay Period ----------------------------------------------------------- Nortel Networks Corporation disclosed that it, its principal operating subsidiary Nortel Networks Limited and its other Canadian subsidiaries that filed for creditor protection under the Companies' Creditors Arrangement Act (CCAA) have obtained an order from the Ontario Superior Court of Justice (Canadian Court) further extending, to June 30, 2011, the stay of proceedings that was previously granted by the Canadian Court. The purpose of the stay of proceedings is to provide stability to the Nortel companies to continue with their divestiture and other restructuring efforts and to continue to work toward the development of a plan of arrangement under CCAA. The materials filed in the CCAA proceedings are available on the Restructuring Document Centre of Ernst & Young Inc. About Nortel Networks Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was once North America's largest communications equipment provider. It has sold most of the businesses while in bankruptcy. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. On May 28, 2009, at the request of the Administrators, the Commercial Court of Versailles, France ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in this Court for recognition of the English Proceedings as foreign main proceedings under chapter 15 of the Bankruptcy Code. Nortel Networks divested off key assets while in Chapter 11. In March 2009, the U.S. Bankruptcy Court entered an order approving the sale of the Layer 4-7 assets to Radware Ltd. as the successful bidder at auction. In July 2009, Nortel sold its CDMA and LTE-related assets to Telefonaktiebolaget LM Ericsson (Publ). In September 2009, the Court Nortel sold its Enterprise Solutions business to Avaya Inc. In October 2009, the Court approved the sale of assets associated with Nortel's Next Generation Packet Core network components to Hitachi, Ltd. On December 2, 2009, the Court approved the sale of assets associated with Nortel's GSM/GSM-R business to Telefonaktiebolaget LM Ericsson (Publ) and Kapsch Carriercom AG. In December 2009, the Debtors sold their Metro Ethernet Networks business to Ciena Corporation. In March 2010, Nortel sold its Carrier Voice Over IP and Application Solutions business to GENBAND Inc. In September 2010, Nortel sold its Multi-Service Switch business to Ericsson. Nortel Networks has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. NORTH BAY: Obtains Final Authority to Use BofA Cash Collateral -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida entered, on Feb. 17, 2011, its final order approving North Bay Village LLC's emergency motion to use cash collateral to pay the enumerated expenses in a budget, nunc pro tunc to March 25, 2010. Within 5 days of the entry of the Court's order, the Debtor will pay $1,250,000 from its cash assets, to the Lender. Bank of America, N.A., in its capacity as Trustee for the registered holders of Cobalt CMBS Commercial Mortgage Trust 2006- C1, Commercial Mortgage Pass-Through Certificates, Series 2006-C1, through its loan servicer CWCapital, LLC, asserts a lien in the rents and income on the Debtor's property located at 26381 S. Tamiami Trail, in Bonita Springs, Florida, constituting BofA's cash collateral. As adequate protection for the Lender's interests in the property, including adequate protection against the diminution of the value of the property and the related cash collateral, Lender is granted replacement liens upon the property and all proceeds, products, rents from the property, but excluding Debtor's causes of action under Sections 544, 547, and 550 of the Bankruptcy Code. About North Bay Village LLC Tampa, Florida-based North Bay Village LLC -- dba North Bay Village - MM, Inc., and Pelican Bay/Limetree, LLC -- along with its co-tenant, CKS Investment Company, LLP, acquired property located at 26381, S. Tamiami Trail, Springs Florida, as tenants in common by warranty deed dated July 1, 2003. The Company filed for Chapter 11 bankruptcy protection on Feb. 12, 2010 (Bankr. M.D. Fla. Case No. 10-03090). Steven M. Berman, Esq., at Shumaker, Loop & Kendrick, LLP, in Tampa, Florida, represents the Debtor as counsel. In its schedules, the Debtor disclosed $12,241,567 in assets and $24,092,392 in liabilities. NORTHFIELD INVESTMENTS: Files Plan Outline; March 30 Hearing Set ---------------------------------------------------------------- Northfield Investments, Inc., filed on Feb. 14, 2011, a disclosure statement explaining its Plan of Reorganization. The hearing to consider approval of the disclosure statement will be held on March 30, 2011, at 9:30 a.m., at the Charles R. Jonas Federal Building, 401 West Trade Street, Courtroom 126, in Charlotte, N.C. The last date to file and serve written objections to the disclosure statement pursuant to Rule 3017(s) is fixed as March 23, 2011. Pursuant to the Plan terms, post-petition costs of administering the case will be paid in full. The Debtor's arrearages with Secured lender Wells Fargo Commercial Mortgage in the approximate amount of $47,000 will be paid in twelve equal monthly payments until paid in full. No payment will be made on default interest and penalties. Regions Bank, which asserts a claim in excess of $3,000,000 which the Debtor disputes, will be paid the lump sum of $125,000 in full satisfaction of its claim upon the refinancing of its property no later than Dec. 31, 2015. General unsecured creditors, which the Debtor believes are owed in the approximate amount of $260,000, will receive approximately 0.40 cents to the dollar. Payments are to be made monthly over a period of 60 months. The equity security holder will retain his interest, but no payment or other distribution will be made on account of his equity interest until all payments provided for in the Plan with the exception of monthly contract payments to secured lenders CW Capital under Class 2 and Wells Fargo under Class 3 are paid in full. The Debtor will finance the Plan from its earnings. Following substantial consummation of the Plan, the Debtor will deconsolidate such that North Regional I, LLC, will own 520 Eagleton Downs Drive, 601 Eagleton Downs Drive, and 10401 John Price Road and North Regional II, LLC, will own 122000 Mt. Holly Huntersville Road and 521 Eagleton Downs Drive. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/NorthfieldInvestments.DS.pdf About Northfield Investments Pineville, North Carolina-based Northfield Investments, Inc. -- fka Regional Property Development Corp, Property Asset Development Corp, North Regional I LLC, and North Regional II LLC - was organized in 1987 for the purpose of developing commercial real property.. It owns four (4) real properties in Chalotte, N.C., and one property in Huntersville, N.C., all of which are leased or partially leased. The Company filed for Chapter 11 bankruptcy protection on October 18, 2010 (Bankr. W.D. N.C. Case No. 10-33044). Richard M. Mitchell, Esq., at Mitchell & Culp, PLLC, assists the Debtor in its restructuring effort. In its schedules, the Debtor disclosed $10,801,094 in assets and $13,071,273 in liabilities. PEANUT CORP: Sen. Leahy Seeks Update on Criminal Probe ------------------------------------------------------ Katy Stech, writing for Dow Jones' Daily Bankruptcy Review, reports that Vermont Sen. Patrick Leahy, chairman of the Senate Judiciary Committee, wrote a letter to U.S. Attorney General Eric Holder earlier last week, seeking an update on the Justice Department's criminal investigation into Peanut Corporation of America. Ms. Stech reports that the chapter 7 bankruptcy of Peanut Corp. is still ongoing. Ms. Stech relates that Chapter 7 Trustee Roy V. Creasy explained that the Company has already put $12 million toward personal injury claims filed by sickened peanut butter- eaters and their families. What remains -- slightly more than $1 million -- will pay off trade creditors that Mr. Creasy estimates are collectively owed hundreds of millions of dollars. Mr. Creasy said Thursday, "There were some rather sizeable claims." He also said that major food packagers like Kellogg Company spent money to pull potentially tainted products off the shelves. Following a nationwide outbreak of Salmonella poisoning that reports say sickened more than 700 people and killed nine, Peanut Corporation of America -- http://www.peanutcorp.com/-- filed a Chapter 7 bankruptcy petition in February 2009 (Bankr. W.D. Va. Case No. 09-60452). The Company estimated its assets and liabilities in the range of $1 million to $10 million at the time of the filing. In September 2010, Judge Norman Moon of the U.S. District Court for the Western District of Virginia allowed Peanut Corp. settle tort claims with more than two dozen victims of the 2008 salmonella outbreak at the company's facilities. Under the settlement, the Peanut Corp. trustee would distribute $12 million to resolve tort claims arising from people who became ill or died after eating salmonella-tainted peanut products. PHILADELPHIA RITTENHOUSE: Fights to Stay in Chapter 11 Protection ----------------------------------------------------------------- Dow Jones' DBR Small Cap reports that Philadelphia Rittenhouse Developer LP is defending its right to remain under bankruptcy protection, calling the company looking to knock it out of Chapter 11 a "predatory lender" that wants to trample other stakeholders' rights. The report relates that a lender, iStar Financial Inc., earlier this month challenged the petition filed by Philadelphia Rittenhouse, the owner and operator of a 33-story luxury building in downtown Philadelphia. According to the report, iStar accused Philadelphia Rittenhouse of launching the proceedings in a "bad faith" effort to side-step a state court ruling assigning a receiver to take the reins in the project, DBR notes. Philadelphia Rittenhouse is firing back, insisting it deserves to stay in the shelter of Chapter 11 and taking direct aim at its adversary in the case. "Chapter 11 was designed for cases such as this one: a recalcitrant lender engaging in misconduct which jeopardizes the rights of multiple creditors and stakeholders," Philadelphia Rittenhouse said in papers filed with the U.S. bankruptcy court. About Philadelphia Rittenhouse Philadelphia Rittenhouse Developer, L.P. is a joint venture between ARC Properties, Inc., based in Clifton, New Jersey, and Philadelphia-based Wheeler Brothers Holdings, LLC. The Company was formed to develop 10 Rittenhouse Square, a 33-story condominium building in Philadelphia. Rittenhouse Developer filed for chapter 11 bankruptcy in response to an action in Pennsylvania state court seeking to appoint a receiver for the development project, which was brought by one of the Company's lenders, iStar Tara, LLC. Philadelphia Rittenhouse filed a Chapter 11 petition on Dec. 30, 2010 (Bankr. E.D. Pa. Case No. 10-31201). Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, P.C., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $100 million to $500 million. iStar Tara, LLC is represented in the chapter 11 case by the firm of Blank Rome LLP. POINT BLANK: Seeks Approval of Consent Agreement With SEC --------------------------------------------------------- BankruptcyData.com reports that Point Blank Solutions filed with the U.S. Bankruptcy Court a motion seeking approval of a consent agreement with the Securities and Exchange Commission, limited relief from the automatic stay, and the authority to de-register as a public company. The consent agreement will enable a resolution of the causes of action that the SEC intends to assert against Point Blank. According to the motion, if this Court approves the consent agreement, then the SEC will instead file a proposed Final Judgment as to Defendant DHB Industries, Inc. n/k/a Point Blank Solutions, Inc. which would completely resolve the SEC's claims against Point Blank. Under the agreement, the SEC has agreed to not seek any civil damages and penalties against Point Blank, the complaint will be resolved as quickly as possible, and, if approved, would save Point Blank and its creditors a significant amount of money they would spend on legal fees. The Court scheduled a hearing on the matter for March 10, 2011. About Point Blank Headquartered in Pompano Beach, Florida, Point Blank Solutions, Inc. -- http://www.pointblanksolutionsinc.com/-- designs and produces body armor systems for the U.S. Military, Government and law enforcement agencies, as well as select international markets. The Company maintains facilities in Pompano Beach, Florida, and Jacksboro, Tennessee. The Company's former chief executive officer and chief operating officer were convicted in September 2010 of orchestrating a $185 million fraud. Point Blank Solutions, formerly DHB Industries, filed for Chapter 11 protection on April 14, 2010 (Bankr. D. Del. Case No. 10-11255). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP serves as corporate counsel. T. Scott Avila of CRG Partners Group LLC is the restructuring officer. Epiq Bankruptcy Solutions serves as claims and notice agent. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Equity Security Holders in the case. The Equity Committee has tapped Morrison Cohen LLP, and The Bayard, P.A., as counsel. Robert M. Hirsh, Esq., and Heike M. Vogel, Esq., at Arent Fox LLP, serve as counsel to the Creditors Committee, and Frederick B. Rosner, Esq., and Brian L. Arban, Esq., at Messana Rosner & Stern LLP, serve as co-counsel. QWEST COMMUNICATIONS: 2011 Qwest Management Bonus Plan Approved --------------------------------------------------------------- On Feb. 21, 2011, the Compensation and Human Resources Committee of the Board of Directors of Qwest Communications International Inc. approved the structure of the 2011 Qwest Management Bonus Plan. The Company's Chairman and Chief Executive Officer (Edward A. Mueller), the Company's Executive Vice President and Chief Financial Officer (Joseph J. Euteneuer) and the Company's other named executive officers (Richard N. Baer, Teresa A. Taylor and C. Daniel Yost) are eligible to participate in the plan. Target bonus percentages for these executives under the plan are: 200% for Mr. Mueller; 150% for Messrs. Baer and Euteneuer and Ms. Taylor; and 100% for Mr. Yost. The Company expects that bonuses under the plan will be paid as soon as practicable after the completion of the merger between Qwest and CenturyLink, Inc. or in the first quarter of 2012 if the merger has not occurred before then. If the merger occurs in 2011, bonuses will be prorated for the portion of the 2011 before the merger. The Qwest performance percentage is based on overall corporate and business unit performance determined by the weighted average of a combination of measures, which may include revenue, EBITDA, free cash flow, segment revenue, segment income, capital expenditures, network expense and imperatives depending on the department in which the executive works. The individual performance percentage is based on an evaluation of overall executive performance by Mr. Mueller. A summary of the 2011 Qwest Management Bonus Plan is available for free at http://ResearchArchives.com/t/s?73f6 About Qwest Based in Denver, Colorado, Qwest Communications (NYSE: Q) -- http://www.qwest.com/-- offers residential customers a new generation of fiber-optic Internet service, high-speed Internet solutions, as well as digital home phone, wireless service available through Verizon Wireless and DIRECTV services. Qwest is also the choice of 95% of Fortune 500 companies, offering a full suite of network, data and voice services for small businesses, large businesses, government agencies and wholesale customers. Additionally, Qwest participates in Networx, the largest communications services contract in the world, and is recognized as a leader in the network services market by leading technology industry analyst firms. Qwest carries a 'Ba1' corporate family and probability of default ratings from Moody's and has 'BB' issuer credit ratings from Standard & Poor's. "Our high debt levels pose risks to our viability and may make us more vulnerable to adverse economic and competitive conditions, as well as other adverse developments," the Company said in its Form 10-K for the year ended Dec. 31, 2009. At Dec. 31, the Company's consolidated debt was approximately $14.2 billion. Approximately $5.8 billion of its debt obligations come due over the next three years. This amount includes $1.265 billion of our 3.50% Convertible Senior Notes due 2025, which it may elect to redeem at any time on or after November 20, 2010 and holders may require the Company to repurchase for cash on November 15, 2010. Fitch Ratings is maintaining the Rating Watch Positive on the 'BB' Issuer Default Rating assigned to Qwest Communications International, Inc. and its subsidiaries. Concurrently, Fitch has affirmed the 'BBB-' issue rating assigned to Qwest's $1.035 billion senior secured credit facility and the senior unsecured debt issued by Qwest Corporation. Approximately $13.1 billion of debt outstanding as of June 30, 2010, including $7.9 billion of debt outstanding at QC, is affected by Fitch's action. RADIENT PHARMACEUTICALS: Appoints R. Rooks to Board of Directors ---------------------------------------------------------------- Radient Pharmaceuticals Corporation announced it has appointed Dr. Robert L. Rooks DVM, MS as an independent member to its Board of Directors. Dr. Rooks is the founder, and retired director of VCA All-Care Animal Referral Center, in Fountain Valley, CA. Under his leadership, VCA has grown into an organization comprised of three subsidiaries that include the All-Care Animal Referral Center, the Animal Orthopedic Care Center, and the Animal Cancer Care Center. Collectively, these centers are staffed by more than 25 veterinarians and 65 technicians who see over 30,000 patient cases annually under Dr. Rooks' guidance. In addition to his corporate endeavors, Dr. Rooks is very active in the veterinarian community, providing state-of-the-art continuing education programs for technicians and veterinarians in Southern California. His referral hospital holds regular seminars and workshops for area veterinarians on a wide range of surgical and medical topics, and routinely brings in experts to discuss current issues, procedures, techniques, diseases and treatments, all with the goal of building a stronger community of regional veterinarian practitioners for the public. As a part of this work, Dr. Rooks initiated a publication called ARCives which is distributed to technicians and veterinarians who refer clients and patients to All-Care Animal Referral Center. According to Douglas MacLellan, Executive Chairman and CEO of Radient Pharmaceuticals, "We are honored to have someone with Dr. Rooks' track record join RPC's Board of Directors and anticipate he will provide valuable contributions to the Company in regards to RPC's anticipated introduction of our Onko-Sure(R) cancer test into the veterinary market." Dr. Rooks and All-Care have been featured in recent years in Money and Forbes magazines and Dr. Rooks has appeared on CBS This Morning and the Australian TV show "Talk to the Animals, Advances in Veterinary Medicine" and the Agriculture USA television program entitled "The Cutting Edge of Veterinary Medicine" which was filmed in his hospital. Dr. Rooks also commented saying, "I have been following RPC for a long time and am impressed with their executive management team and the progress they have made in restructuring the organization and establishing a business strategy and plan to fully commercialize its Onko-Sure(R) in vitro diagnostic cancer test. It is clear this team is passionate, focused and understands the importance of execution and I look forward to being an integral part in the Company's long-term success." In addition to his busy schedule at Animal Critical Care Center, Dr. Robert Rooks devotes considerable time to the sled dog racing industry. He has served as the attending veterinarian for numerous races including the well-known Iditarod and Beargrease races. He also has been active in his community in supporting the use of pets in the rehabilitation of children in hospitals. For these efforts, he received the Children's Hospital of Orange County Hero of the Heart Award. Dr. Rooks is a 1978 graduate of Iowa State University and a Diplomate of both the American Board of Veterinary Practitioners and the American College of Veterinary Surgeons. Dr. Rooks developed a surgical procedure and specialized implant for the treatment for hip dysplasia in dogs and is co-author of Canine Orthopedic' and the Veterinary Cancer Therapy Handbook: Chemotherapy, Radiation Therapy, and Surgical Oncology for the Practicing Veterinarian. He is the past president of the Orange County Chapter of The Southern California Veterinary Medical Association and of the Animal Health Foundation and recipient of the Iowa State University Outstanding Young Alumnus Award, AAHA EXCEL Award, and highly prestigious Charles E. Bild Practitioner of the Year Award. About Radient Pharmaceuticals Headquartered in Tustin, Calif., Radient Pharmaceuticals Corporation -- http://www.Radient-Pharma.com/-- is engaged in the research, development, manufacturing, sale and marketing of its ONKO-SURE(TM) a proprietary IVD Cancer Test in the United States, Canada, China, Chile, Europe, India, Korea, Taiwan, Vietnam and other markets throughout the world. Radient said in October 2010 it incurred a trigger event on the 12% Convertible Notes issued in first and second quarter of 2010 due to its failure to have the related registration statement declared effective by June 1, 2010. The Company filed on Sept. 7, 2010, an Event of Default under those same notes occurred since it did not hold the related shareholder meeting by August 31, 2010. As reported in the Troubled Company Reporter on April 19, 2010, KMJ Corbin & Company LLP, in Costa Mesa, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted that the Company incurred a significant operating loss and negative cash flows from operations in 2009 and had a working capital deficit of $4.2 million at Dec. 31, 2009. The Company's balance sheet at Sept. 30, 2010, showed $23.56 million in total assets, $34.22 million in total liabilities, and a stockholders' deficit of $10.66 million. RADLAX GATEWAY: Files 2nd Amended Plan; Unsecureds to Get $500,000 ------------------------------------------------------------------ RadLAX Gateway Hotel, LLC, and RadLAX Gateway Deck, LLC, submitted to the U.S. Bankruptcy Court for the Northern District of Illinois on Feb. 15, 2011, a second amended joint Chapter 11 Plan. The Plan provides for the sale of certain or substantially all of the Debtors' assets. The confirmation order will authorize: (a) the dissolution of the Debtors, effective as of the effective date; and (b) the filing of certificates of dissolution (or the equivalent) with the Delaware Secretary of State. On the effective date, each of the manager and officers of the Debtors will be deemed to have resigned from all of their respective positions with the Debtors. Under the Plan, the liquidating trust will be established to receive on the effective date the effective date cash, the sale proceeds and all other property of the Debtors not conveyed to the Purchaser in accordance with the Asset Purchase Agreement. The The Liquidating Trust will also receive a total of $750,000 of Creditor Profit Sharing Income, with $150,000 in Cash delivered to the Liquidation Trustee within sixty (60) Days following the expiration of the first Operating Year, $300,000 in Cash delivered to the Liquidation Trustee within sixty (60) Days following the expiration of the second Operating Year, and $300,000 in Cash delivered to the Liquidation Trustee within sixty (60) Days following the expiration of the third Operating Year. All of the assets delivered to the Liquidation Trustee will vest in the Liquidating Trust when delivered free and clear of all Claims, encumbrances and interests pursuant to section 1141 of the Bankruptcy Code, but subject to the rights of Holders of Allowed Claims to obtain the distributions provided for in this Plan. Treatment of Claims Class 3 - Lender Secured Claim - will receive: (a) the sale proceeds in cash after satisfaction in full of (i) any Allowed Administrative Claim of FBR Capital Markets & Co. and (ii) all Allowed Class 4 Claims; and (b) the balance of any Effective Date Cash (excluding Cash in the Real Estate Tax Escrow Reserve) after satisfaction in full of any Allowed Administrative Claims, any Allowed Priority Tax Claims, any Allowed Class 1 Claims, any Allowed Class 2 Claims, any monetary cure amounts that are required to be paid to nondebtor parties to executory contracts and unexpired leases in connection with the assumption or assumption and assignment of such executory contracts and unexpired leases by the Debtors and, only to the extent that the Cash in the Real Estate Tax Escrow Reserve is insufficient, the Allowed Los Angeles County Tax Collector Claim. Class 4 - Bonded Stop Notice Mechanic's Lien Claims - will receive in full satisfaction, settlement, release, the Sale Proceeds in Cash after satisfaction in full of any Allowed Administrative Claim of FBR. Class 5 - Los Angeles County Tax Collector Claim - will receive the amount of unpaid allowed claim without interest in cash from the real estate tax escrow reserve. Class 6 - General Unsecured Claims - will receive cash equal to its pro rata share of $500,000 of the creditor profit sharing income. Distributions to Holders of Class 6 General Unsecured Claims will be made as follows: (i) the first Cash distribution of $100,000 will be made within ninety (90) Days following the expiration of the first Operating Year, the second Cash distribution of $200,000 will be made within ninety (90) Days following the expiration of the second Operating Year, and the third Cash distribution of $200,000 will be made within ninety (90) Days following the expiration of the third Operating Year. Class 7 - Lender Deficiency Claim - will receive $250,000 in Cash from the Creditor Profit Sharing Income. Class 8 - Interests - will not receive or retain any property under the Plan on account of its interests. On the effective date, all interests will be canceled. Class 9 - Insider Claims - will not receive or retain any property under the Plan on account of the insider claims. On the effective date, all insider claims will be extinguished. Classes 3, 4, 5, 6 and 7 are impaired under the Plan and entitled to vote to accept or reject the Plan. Classes in 8 and 9 are conclusively presumed to have rejected the Plan in respect of their Interests or Claims. A full-text copy of the second amended Plan is available for free at http://bankrupt.com/misc/Radlax.2ndAmendedPlan.pdf About RadLAX Gateway Hotel RadLAX Gateway Hotel LLC owns the Radisson hotel at Los Angeles International Airport. Affiliate River Road Hotel Partners, LLC, developed and manage the InterContinental Hotel Chicago O'Hare located in Rosemont, Illinois. Both are ultimately controlled owned by Harp Group. RadLAX Gateway Hotel, LLC, and RadLax Gateway Deck, LLC, filed for Chapter 11 on Aug. 17, 2009 (Bankr. N.D. Ill. Case No 09-30047), estimating assets at $50 million to $100 million. River Road and its affiliates filed for Chapter 11 in Chicago on August 17, 2009 (Bankr. N.D. Ill. Lead Case No. 09-30029). Based in Oak Brook, Illinois, River Road estimated assets of as much as $100 million and debt of as much as $500 million in its Chapter 11 petition. David M. Neff, Esq., at Perkins Coie LLP, serves as counsel to the River Road and RadLAX debtors. The two cases, however, are not jointly administered. RAILAMERICA INC: Repurchase Program Doesn't Move Moody's B1 Rating ------------------------------------------------------------------ Moody's views RailAmerica Inc.'s recently announced share repurchase program as a negative credit event. This program will direct capital away from debt repayment and investments in favor of increasing shareholder returns. However, as the program is expected to be implemented over time and to be funded with free cash flow rather than with incremental debt, it does not impact RailAmerica's ratings (corporate family rating of B1), nor its stable outlook. The last rating action was on June 15, 2009, when Moody's assigned an B1 corporate family rating to RailAmerica, Inc. REAL MEX: CEO and Chairman Rivera to Retire Effective April 1 ------------------------------------------------------------- On Feb. 18, 2011, Richard E. Rivera, chairman and chief executive officer of Real Mex Restaurants, Inc., under the terms of his contract, announced his retirement effective April 1, 2011. The Board of Directors thanks Mr. Rivera for his service and has initiated a search for Mr. Rivera's replacement. About Real Mex Based in Cypress, California, Real Mex Restaurants, Inc., owns and operates restaurants, primarily through its major subsidiaries El Torito Restaurants, Inc., Chevys Restaurants, LLC, and Acapulco Restaurants, Inc. The Company operated 183 restaurants as of March 28, 2010, of which 152 were located in California and the remainder were located in 12 other states, primarily under the trade names El Torito Restaurant(R), Chevys Fresh Mex(R) and Acapulco Mexican Restaurant Y Cantina(R). In addition, the Company franchised or licensed 34 restaurants in 12 states and two foreign countries as of March 28, 2010. The Company's other major subsidiary, Real Mex Foods, Inc., provides internal production, purchasing and distribution services for the restaurant operations and also provides distribution services and manufactures specialty products for sale to outside customers. The Company's balance sheet at Sept. 30, 2010, showed $287.51 million in total assets, $248.57 million in total liabilities, and stockholder's equity of $38.93 million. Real Mex carries a 'Caa2' Corporate Family Rating, and stable Outlook from Moody's Investors Service. At the end of August 2010, Moody's said the 'Caa2' CFR continues to reflect the challenges Real Mex will face to reverse its revenue decline primarily driven by the ongoing, albeit somewhat decelerated, negative same store sales trend, in a very difficult operating environment for casual dining concepts. The rating also incorporates the company's high financial leverage, poor interest coverage and weak free cash flow generation. REFCO INC: Final Hearing on Grant Thornton Settlement Set March 11 ------------------------------------------------------------------ Judge Jed S. Rakoff of the U.S. District Court for the Southern District of New York has scheduled a hearing for March 11, 2011, at 4:00 p.m., to consider the fairness and reasonability of Lead Plaintiffs RH Capital Associates LLC and Pacific Investment Management Company LLC's proposed settlements with Grant Thornton LLP and with Joseph J. Murphy, Dennis A. Klejna and William M. Sexton. Grant Thornton is the former outside auditor of Refco LLC. Messrs. Murphy, Klejna, and Sexton are former officers of Refco. The parties are involved in a consolidated securities class action initiated by Lead Plaintiffs RH Capital and Pacific Investment, In re Refco, Inc. Securities Litigation, 05-Civ.-8626, originally commenced in 2005 and currently pending in the U.S. Bankruptcy Court for the Southern District of New York under Judge Jed S. Rakoff. The Class Action is filed on behalf of persons and entities who purchased or otherwise acquired Refco Notes and/or Refco Stock during the period July 1, 2004 through and including Oct. 17, 2005. The Lead Plaintiffs have reached a $25,000,000 settlement with Grant Thornton, and a $300,000 settlement with the Refco former officers. The $300,000 Officers Settlement is composed of a $150,000 payment by Mr. Murphy, who was an Executive Vice President of Refco responsible for global marketing; a $100,000 payment by Mr. Sexton, formerly Refco's Executive Vice President and Chief Operating Officer; and a $50,000 payment by Mr. Klejna, formerly Refco's Executive Vice President and General Counsel. The Lead Plaintiffs filed papers with the Court on February 4, 2011, in support of the final approval of the proposed settlements with Grant Thornton LLP and with the Former Officers; authorization to apply the previously approved Plan of Allocation of the settlement proceeds to these additional settlements; and final certification of the settlement class as to these defendants. Lead Counsel to the securities class, Grant & Eisenhofer P.A. and Bernstein Litowitz Berger & Grossman LLP also filed papers in support of their motion for attorneys' fees and reimbursement of expenses. In court papers, the Lead Plaintiffs related that they negotiated both of the Additional Settlements with a thorough understanding of the strengths and weaknesses of the claims asserted against each of the Settling Defendants. The Additional Settlements were agreed to only after Lead Counsel had reviewed and analyzed tens of millions of pages of documents produced in discovery; had taken or participated in over 100 depositions of fact witnesses in the Action; and had consulted extensively with experts in the fields of accounting, damages and market efficiency, the Lead Plaintiffs stated. Moreover, Lead Counsel averred that they are of the opinion that the recoveries achieved in the Additional Settlements are excellent in light of the potential risks of further litigation and the expense of pursuing the Action against the Settling Defendants through a trial and the appeals that would inevitably follow. Together with the approximately $342 million received in the previously approved settlements and the more than $40 million in restitution funds that will be distributed to the Settlement Class, the Additional Settlements bring the total recovery amount for the benefit of the Settlement Class to over $407 million. "This return of more than 41% of the class's highest possible damages claim is a truly excellent level of recovery for the Settlement Class," Lead Counsel asserted. Moreover, if the Court approves the Additional Settlements, the Refco Securities Action will be finally resolved as against all defendants in the Action, Lead Counsel pointed out. Lead Counsel's Fees & Expenses In connection with the Additional Settlements, Lead Counsel also seeks an award of attorneys' fees equal to $4,532,273.27, plus reimbursement of litigation expenses in the amount of $120,704.06 which were not reimbursed in connection with the Initial Settlements, with interest on those fees and expenses from the date of funding at the same rate as earned by the settlement funds. The $4,532,273.27 attorneys' fee request was derived as follows: Net Settlement Unreimbursed Settlement Settlement Amount Expenses Amount Fee% Fee Request ---------- --------- ---------- --------- ---- ----------- Grant Thornton $25-mil. $119,273 $24,880,727 18% $4,478,531 Settlement Officers $300-K $1,431 $298,539 18% $53,742 Settlement ---------- --------- -------- ----------- --- ---------- TOTAL $25.3-mil. $120,704 $25,179,296 $4,532,273 ========== ======== =========== ========== Approval of the Additional Fee Award would bring Lead Counsel' total attorneys' fees in the Securities Action to $45,309,814.27, which is approximately 12.3% of the total settlement amount. Lead Counsel notes that the percentage fee sought is on the low end of the range typically awarded in class actions in U.S. courts. Lead Counsel adds that it undertook a dogged pursuit of complex claims on behalf of the Settlement Class, spanning five years and more than 134,700 hours devoted by its attorneys and other professionals. Lead Counsel also advanced million of dollars in out-of-pocket expenses over the course of the litigation. "[These facts] strongly support a finding that the Additional Fee Award is fair and reasonable," Lead Counsel maintains. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc., and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Plan Administator Makes 4th Distribution --------------------------------------------------- The Plan Administrator of Reorganized Refco Inc. and certain of its subsidiaries, including Refco F/X Associates, LLC, notified parties-in-interest that it intends to make a fourth distribution to the holders of Allowed Class 5(a) FXA General Unsecured Claims. The aggregate distribution to be made pursuant to the Fourth FXA General Unsecured Distribution Notice, filed with the Court on Feb. 22, 2011, will be approximately $4.2 million. Appropriate reserves will continue to be maintained as required or necessary. FXA's customer list, and thus the name of each of the claimants receiving the Fourth FXA General Unsecured Distribution, is confidential and proprietary information. Accordingly, the Plan Administrator has not included with the Notice a schedule detailing each claimant and its corresponding distribution amount. The Plan Administrator filed its previous three notices of FXA General Unsecured Distribution on Sept. 25, 2007, April 1, 2008, and July 28, 2008. Pursuant to the Third FXA General Unsecured Distribution, the Plan Administrator made catch-up distributions to approximately 116 holders of Allowed Class 5(a) FXA General Unsecured Claims whose claims were resolved and allowed by Court orders entered after the First FXA General Unsecured Distribution and the Second FXA General Unsecured Distribution had already been made. The Plan Administrator reserves the right to withhold distributions to claimants where necessary to comply with applicable non-bankruptcy laws and regulations. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc., and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Togut Makes Distribution for "Other Allowed Claims" -------------------------------------------------------------- Albert Togut, as Chapter 7 Trustee for Refco LLC, notified parties-in-interest on Feb. 14, 2011, that he intends to make an interim distribution on account of "other allowed claims," involving the compromise and settlement of various intercompany claims, of all of the estate's right, title and interest in and to: (i) that certain proof of claim in the amount of $254,781 filed by Refco LLC in the Chapter 7 case of Hasan Merchant and Sheri Merchant currently pending in the United States Bankruptcy Court for the Northern District of Illinois, Case No. 04-23771 (ABG), which claim was originally filed on January 31, 2005 and assigned Claim No. 83-1; and (ii) the following default judgments obtained by the Trustee in adversary proceedings commenced in Refco LLC's bankruptcy case: Amount of Defendant Adv. Pro. No. Judgment --------- ------------- -------- Ceres, Inc. 07-03112 $15,519 Frontier Risk Management, Inc. 07-03115 126,647 Holmes Commodities 07-03117 13,341 John and Susan Wright 07-03103 116,937 Joseph Zieske 07-03120 14,034 JP Morgan Futures, Inc. 07-03105 10,817 Kevin Fuchs 07-03098 30,008 Robert L. Mullane 07-03101 34,256 Stieren Mercantile 07-03121 26,810 W.G. Lucas Futures & Realty Trade 07-03108 95,798 About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc., and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) REVEILLE RESOURCES: Has Court's Interim Nod to Use Cash Collateral ------------------------------------------------------------------ Reveille Resources (Texas), Inc., sought and obtained interim authorization from the U.S. Bankruptcy Court for the Southern District of Texas to use the cash collateral until March 20, 2011. The Debtor entered into a certain credit agreement with Guggenheim Corporate Funding, LLC, as administrative agent for the lenders thereto, which was subsequently amended and restated on Dec. 10, 2009. The Debtor acknowledges that as of Feb. 15, 2011, it was indebted to GCF for an aggregate amount of $46,912,772.61. The Debtor acknowledges that all of the cash of the Debtor in existence on the Petition Date, other than cash due to royalty owners, and all of the cash that is acquired by the Debtor thereafter, constitutes cash collateral. The Debtor further acknowledges that all of the cash collateral in existence on the Petition Date is held by GCF, for the benefit of the lenders. Sara Mya Keith, Esq., at Okin Adams & Kilmer LLP, explained that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. The Debtors will use the collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/REVEILLE_RESOURCES_budget.pdf In exchange for using the cash collateral, GCF, for the benefit of the Lenders, is granted continued, valid, binding, enforceable, non-avoidable and automatically and properly perfected first priority security interests in and liens on all prepetition collateral. GCF is also granted a superpriority claim. As adequate protection to any other secured creditor of the estate that may exist for any diminution in value that may result from the Debtor's use of cash collateral, the secured creditor is granted a replacement security interest and lien in the Debtor's postpetition assets that are subject to its existing prepetition liens and security interests with the same scope, validity, and priority as held by the secured creditor as of the Petition Date. Mission Vacuum & Pump Truck, J&R Valley Oil Field Services, Inc., and Rio Oil Field Services filed their joint objection to the Debtor's use of cash collateral, saying that the money now in the cash accounts is directly attributed to the services provided by Mission, J&R, and Rio, to which they have a perfected security interest in by way of the services were performed on oil and gas properties. Mission, J&R, and Rio were induced into providing the services and placing their equipment on site when it was known to the Debtor that they weren't in a financial position to operate the wells. Mission, J&R, and Rio are represented by Rolando Cantu and Associates P.L.L.C. Greehey & Co., Ltd., a working interest owner in several oil and gas wells and leases in Hidalgo, Starr, and Willacy Counties, Texas, also filed an objection to the Debtor's request to use cash collateral. The Debtor is the operator of the wells. Greehey claimed that the Debtor wrongfully withheld over $405,913.50 of Greehey's revenues derived from well production and continues to receive and wrongfully withhold Greehey's revenues. "The Debtor has caused Greehey to lose substantial additional funds through Debtor's breach of certain agreements, including a purchase sale agreement," Greehey stated. The Court has set for March 22, 2011, at 10:45 a.m. (Central Time) the final hearing on the Debtor's request to use cash collateral. About Reveille Resources Houston, Texas-based Reveille Resources (Texas), Inc., is an independent oil and natural gas company engaged in the exploration, production, development, acquisition and exploitation of crude oil and natural gas properties, with interests in: (a) the Coastal Field in Starr and Hidalgo Counties, Texas; (b) the Sullivan City Field in Hidalgo Counties, Texas; (c) the Daskam Field in Hidalgo County, Texas; (d) the Nichols Field in Starr and Hidalgo Counties, Texas; (e) the Sam Fordyce Field in Starr and Hidalgo Counties, Texas; (f) the North Tordilla Field in Kenedy and Willacy Counties, Texas; (g) the Tabasco Field in Hidalgo County, Texas; and (h) the Raymondville Field in Willacy County, Texas. It filed for Chapter 11 bankruptcy protection on Feb. 15, 2011 (Bankr. S.D. Tex. Case No. 11-31317). Matthew Scott Okin, Esq., at Okin Adams & Kilmer LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. ROBB & STUCKY: Court OKs Hudson Group-Led Auction on March 7 ------------------------------------------------------------ The Hon. Caryl E. Delano of the U.S. Bankruptcy Court for the Middle District of Florida has approved Robb & Stukcy Limited LLLP's proposed procedures for the sale of substantially all of the Debtor's assets. The sale price will be determined by a physical inventory of the locations and the SKUs for merchandise located at the Debtor's distribution centers. The Debtor entered into a stalking horse agreement with a joint venture comprised of Hudson Capital Partners, LLC, and HYPERAMS, LLC. The joint venture, as the stalking bidder, will serve as agent for the liquidation of substantially all of the Debtor's assets, subject to higher and better offers received at an auction. A copy of the Stalking Horse Agreement is available for free at: http://bankrupt.com/misc/ROBB& STUCKY_stalking horse pact.pdf The Debtor proposed a payment of a combined expense reimbursement and break-up fee of $475,000 to the Stalking Horse Bidder, in the event that the Stalking Horse Bidder won't be the winning bidder. Bidders will be required to submit good faith deposits with the Debtor by March 4, 2011, at 4:00 p.m. (prevailing Eastern Time). The Good Faith Deposits will be equal to 10%% of the cash purchase price of the bid, or of the Guaranteed Amount, as the case may be, subject to the Debtor's right to modify the requirement. Good Faith Deposits of all bidders will be held in a separate interest- bearing account for the Debtor's benefit until the Successful Bidder consummates its transaction. If a Successful Bidder fails to consummate an approved sale because of a breach or failure to perform on the part of such Successful Bidder, the Debtor will not have any obligation to return the Good Faith Deposit deposited by the Successful Bidder, and the Good Faith Deposit will irrevocably become property of the Debtor. If for any reason the Successful Bidder(s) fails to consummate the sale transaction(s) or any part thereof, the offeror of the second highest or best bid will automatically be deemed to have submitted the highest or best bid and to the extent the offeror and the Debtor consents, the Debtor and the offeror are authorized to effect a transaction with the offeror(s) as soon as is commercially reasonable. The Sale will commence at the inventoried locations on the first day after entry of approval by the Court, which will be entered no later than March 15, 2011. The Agent will complete the Sale, and will vacate each Inventoried Location's premises in favor of the Debtor or its representative or assignee on or before June 30, 2011. If the Debtor receives another offer, an auction will be conducted on March 7, 2011, at 10:00 a.m. (prevailing Eastern Time). During the auction, the next bid will provide the Debtor incremental value of at least $625,000. Objections to the sale of the Assets must be filed by March 4, 2011, at 4:00 p.m. (prevailing Eastern Time). The sale approval hearing will be held on March 8, 2011, at 1:00 p.m. (prevailing Eastern Time). As soon as practicable after the Debtor ascertains which contracts and leases will be assumed and assigned (if any), but no later than March 5, 2010, the Debtor will file an assignment schedule with the Court and serve the assignment schedule on the non-debtor counterparties to those contracts and leases. Objections to the assumption and assignment of any contract or lease identified on the assignment schedule must be filed with the Court and be actually received by the objection notice parties no later than March 7, 2011. About Robb & Stucky Sarasota, Florida-based 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; and Home of Fine Design by Robb & Stucky -- is a retailer of upscale, high-end, interior-design-driven home furnishings in the U.S. It filed for Chapter 11 bankruptcy protection on Feb. 18, 2011 (Bankr. M.D. Fla. Case No. 11-02801). Paul S. Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman PA, serve as the Debtor's bankruptcy counsel. FTI Consulting, Inc., is the Debtor's advisor and Kevin Regan is the Debtor's chief restructuring officer. Bayshore Partners, LLC, is the Debtor's investment banker. AlixPartners, LLP, serves as the Debtor's communications consultants. Epiq Bankruptcy Solutions, LLC, serves as the Debtor's claims and notice agent. The Debtor estimated its assets and debts at $50 million to $100 million. ROBB & STUCKY: DIP Financing & Cash Collateral Use Has Interim OK ----------------------------------------------------------------- Robb & Stucky Limited LLLP sought and obtained interim authorization from the Hon. Caryl E. Delano of the U.S. Bankruptcy Court for the Middle District of Florida to obtain postpetition secured financing and other extensions of credit from Bank of America, N.A. The DIP Lender has committed to provide up to $25 million secured revolving credit facility, which will be secured by all personal property of Debtor. The commitment will terminate on April 22, 2011. A copy of the DIP financing is available for free at http://bankrupt.com/misc/ROBB_&_STUCKY_dipfinancingpact.pdf Jordi Guso, Esq., at Berger Singerman, P.A., explained that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. The DIP facility will incur interest at (A) the greatest of (i) DIP Lender's Prime Rate for such day; (ii) the Federal Funds Rate for the day, plus 0.50%; or (iii) LIBOR Rate for a 30 day interest period as determined on such day, plus 1.0%, plus (B) 3.25%. In the event of default, the Debtors will pay an additional 2% default interest per annum. The DIP Lender will receive a fully perfected, first priority security interest in all of the existing and after acquired personal property of Debtor, and all substitutions, accessions and proceeds of the foregoing, wherever located; provided, however, that the DIP Liens should not attach to avoidance claims and avoidance proceeds. As provided by the express terms of certain intercreditor agreements and subordination agreements, the DIP Liens will prime and will be senior in priority to all prepetition and replacement liens in favor of certain contractually subordinated creditors. Cash Collateral Use Mr. Guso said that the Debtors will also use the Cash Collateral to provide additional liquidity. The Debtor is a party to a senior secured credit facility provided by Bank of America pursuant to the loan agreement dated as of Sept. 19, 2000. The Prepetition First Lien Secured Obligations are secured by first priority liens and security interests on substantially all of the Debtor's assets. As of the Petition Date, the Debtor was indebted to the Prepetition First Lien Lender in the approximate amount of $ 20 million. The Prepetition First Lien Lender is granted replacement liens in and to all of the collateral as partial adequate protection to Prepetition First Lien Lender to the extent of any decrease in value of the BofA Pre-Petition Liens caused by Debtor's use, consumption, sale, collection or other disposition of any Prepetition collateral. The BofA Replacement Liens will be senior in priority to the DIP Liens and all contractually subordinated liens. The Debtor is a party to a secured credit facility provided by CIRS Financing, LLC, and CIRS Management, LLC, pursuant to the (a) secured note and option purchase agreement dated as of Sept. 30, 2009, and (b) secured note and option purchase agreement dated as of Oct. 20, 2010, consisting of two senior secured second lien term loans in the aggregate amount of approximately $13.5 million. As of the Petition Date, the Debtor was indebted to the Prepetition Second Lien Lender in the approximate amount of $ 13.50 million. The Prepetition Second Lien Lender is granted replacement liens in and to all of the collateral that is of the same type and nature as the prepetition collateral as partial adequate protection to the Prepetition Second Lien Lender to the extent of any decrease in value of the the Prepetition Second Lien Lender Liens caused by Debtor's use, consumption, sale, collection or other disposition of any Prepetition collateral. The Prepetition Second Lien Lender Replacement Liens will (i) be junior in priority to the BofA Pre- Petition Liens, the DIP Liens, and the BofA Replacement Liens, and (ii) be senior in priority to the Investor Replacement Liens. The Debtor is a party to a secured loan facility provided by Clive Lubner, the Bob and Linda Taylor Foundation, Inc., Fred Berkelbaugh, Entrust Freedom, LLC f/b/o Allen G. Ten Broek, Robert F. Anderson Irrevocable Trust u/a/d, Curtis Bostick, Daniel Lubner, Brian F. Crowley, J. Robert Gould and Lawrence Cunningham pursuant to a Purchase Agreement dated as of Sept. 30, 2009, under which the Prepetition Third Lien Lender advanced $2.50 million to the Debtor. As of the Petition Date, the Debtor was indebted to the Prepetition Third Lien Lender in the approximate amount of $2.50 million. The Investors are granted replacement liens in and to all of the collateral that is of the same type and nature as the Prepetition collateral as partial adequate protection to the Investors to the extent of any decrease in value of the Investor Liens caused by Debtor's use, consumption, sale, collection or other disposition of any prepetition collateral. The Investor Replacement Liens will be junior in priority to the BofA Prepetition Liens, the DIP Liens, the BofA Replacement Liens, the Collier Liens and the Collier Replacement Liens. JBC Investments, Inc., may assert a judgment lien against certain assets of the Debtor, pursuant to an alleged judgment entered on Jan. 13, 2011, against Debtor by a Florida state court. On Feb. 10, 2011, JBC filed a garnishment action against BofA, as garnishee, styled JBC Investments, Inc. v. R & S Home of Fine Decorators, LLC and Robb & Stucky Limited LLLP, Bank of America Corporation, Garnishee, Case No. 08-51681 (02), In the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida. In response to the Garnishment Action, BofA has set aside $157,400 in proceeds of prepetition collateral. Neither Debtor nor BofA concedes that JBC has any valid, effective or unavoidable judgment lien or other interest in the Garnishment Reserve Funds. BofA asserts that its security interest in the Garnishment Reserve Funds is senior in priority to the interest of JBC (if any) therein, and each of Debtor and BofA reserves all of its rights, remedies, claims and defenses with respect to any claim or lien that has been or may be asserted by JBC. The Garnishment Reserve Funds will continue to be held by BofA pending further order of the Court, subject to all liens and security interests that may have existed with respect to the Garnishment Reserve Funds on the Petition Date, with all of the liens and security interests to have the same validity, extent, and priority as existed with respect to the Garnishment Reserve Funds as of the Petition Date. Debtor will segregate and will not sell or otherwise dispose of any of the Specified Inventory, absent further order of the Court, and no lender will be liable to Debtor or any Specific Inventory Creditor if Debtor inadvertently sells any Specified Inventory and remits the proceeds thereof to the lender. Lenders will be entitled to apply all cash collateral (excluding the Garnishment Reserve Funds) to the Prepetition First Lien Debt or the DIP Obligations. The Debtor will cause all proceeds of collateral to be promptly deposited in an account designated by DIP Lender. Prior to the deposit of cash collateral to the Dominion Account, the Debtor will be deemed to hold such proceeds in trust for the benefit of Lenders. Final Hearing The Court has set a final hearing for March 8, 2011, at 1:00 p.m. on the Debtor's request to obtain DIP financing and use cash collateral. About Robb & Stucky Sarasota, Florida-based 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; and Home of Fine Design by Robb & Stucky -- is a retailer of upscale, high-end, interior-design-driven home furnishings in the U.S. It filed for Chapter 11 bankruptcy protection on Feb. 18, 2011 (Bankr. M.D. Fla. Case No. 11-02801). Paul S. Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman PA, serve as the Debtor's bankruptcy counsel. FTI Consulting, Inc., is the Debtor's advisor and Kevin Regan is the Debtor's chief restructuring officer. Bayshore Partners, LLC, is the Debtor's investment banker. AlixPartners, LLP, serves as the Debtor's communications consultants. Epiq Bankruptcy Solutions, LLC, serves as the Debtor's claims and notice agent. The Debtor estimated its assets and debts at $50 million to $100 million. ROBB & STUCKY: Has Court's Interim Nod to Pay Critical Vendors -------------------------------------------------------------- Robb & Stucky Limited LLLP sought and obtained interim authorization from the Hon. Caryl E. Delano of the U.S. Bankruptcy Court for the Middle District of Florida to pay, at the Debtor's discretion, all or a portion of the prepetition claims of certain vendors that are critical to the operation of the Debtor's business. Critical Vendor Claims include obligations to certain vendors that do not have contracts with the Debtor, or other vendors who may limit or suspend performance or supply of goods to the Debtor. The Debtor undertook a lengthy process to identify possible Critical Vendors. The Critical Vendors also include approximately 167 installers who provide services to the Debtor's customers. The services provided by the Installers include the installation of wall treatments, draperies and flooring. In many cases, the Installers are holding goods that belong to the Debtor or the customer. Installers are paid progress payments based on the level of work that is completed. Certain of the Installers may claim materialmen or possessory liens on the goods in their possession or in the goods of the customer as security for the amounts owed to them by the Debtor. Materialmen's liens on goods in their possession, or on goods of the customers, damage the goodwill of the Debtor and significantly impair the ability of the Debtor to stabilize and maximize the value of its enterprise as a going concern. The Debtor is also authorized to pay, on an interim basis, the claims of installers. The Debtor sought to pay prepetition claims of these Critical Vendors: Marge Carson $863,780 E. J. Victor $412,548 Vanguard $358,485 Hancock & Moore $340,054 Artistica Metal Designs $247,938 Burton James $192,374 E Kluft $142,016 Thomas & Gray $128,419 Rosenbaum Fine Art $112,575 Paladin Industries $75,018 Design Iinstitute Amer $63,168 J Black Design $31,826 -------- Total $2,968,201 Any Critical Vendor that is paid will continue to provide the Debtor with the same goods or services, upon the same terms, as they provided prior to the Petition Date. The Debtor said that Critical Vendors are essential because (a) they are sole-source manufacturers of merchandise that make up the "Robb & Stucky Originals" furnishings, or (b) they provided services that are essential to the delivery and installation of products purchased by customers of the Debtor. "If the Critical Vendors do not receive payment on account of their Critical Vendor Claims, the Critical Vendors will likely terminate or disrupt the services they provide to the Debtor. The termination or disruption in the provision of these goods or services will result in material harm to the Debtor and its estate. The Debtor's business operations and the value of its enterprise are directly dependent upon the continued provision of goods and services to the Debtor's customers," the Debtor stated. The Debtor reserves the right to negotiate new trade terms with any Critical Vendor as a condition to payment of any Critical Vendor Claim. Lenders CIRS Financing LLC and CIRS Management LLC filed an objection to the payment of Critical Vendor Claims, saying that the Debtor will most likely be liquidating through a GOB sale. " the Debtor has provided no evidence as to whether the "significant revenue" that it seeks to realize from prepetition orders and projects will generate any profit for the benefit of the Debtor's estate or whether, once the costs of completing such orders are taken into account, this will be a loss making exercise, as the Debtor's business has been for some time. Absent such evidence, the Critical Vendors Motion should be denied," CIRS Financing and CIRS Management said. HDM Furniture Industries, Inc., which supplied the Debtor with furniture and furnishings for resale to the public, also filed an objection to the payment of Critical Vendor Claims. One of HDM's operating divisions, Hickory Chair, designs, manufactures and sells Hickory Chair products exclusively for the Debtor, although not all of the products on order with Hickory Chair by the Debtor is product exclusive to the Debtor. Hickory Chair and Henredon have many orders for furniture that has already been sold to the Debtor's customers HDM isn't listed as a Critical Vendor. HDM said that while HDM meets the criteria set for in the motion for creditors who are to be provided with Critical Vendor status, other entities do not. "Debtor should not be allowed to discriminate among unsecured creditors by using postpetition funds to pay prepetition debt to a few creditors," HDM stated. HDM is represented by Anthony J. Cuva -- acuva@bajocuva.com; V. Stephen Cohen -- scohen@bajocuva.com; and Brad F. Barrios -- brad.barrios@bajocuva.com -- at Bajo Cuva Cohen & Turkel P.A. CIRS Financing and CIRS Management is represented by Matthew C. Brown -- mbrown@whitecase.com; Thomas E Lauria -- tlauria@whitecase.com; and Frank L. Eaton -- featon@whitecase.com -- at White & Case LLP. The Court has set for March 8, 2011, at 1:00 p.m. the final hearing on the Debtor's request to pay critical vendors. About Robb & Stucky Sarasota, Florida-based 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; and Home of Fine Design by Robb & Stucky -- is a retailer of upscale, high-end, interior-design-driven home furnishings in the U.S. It filed for Chapter 11 bankruptcy protection on Feb. 18, 2011 (Bankr. M.D. Fla. Case No. 11-02801). Paul S. Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman PA, serve as the Debtor's bankruptcy counsel. FTI Consulting, Inc., is the Debtor's advisor and Kevin Regan is the Debtor's chief restructuring officer. Bayshore Partners, LLC, is the Debtor's investment banker. AlixPartners, LLP, serves as the Debtor's communications consultants. Epiq Bankruptcy Solutions, LLC, serves as the Debtor's claims and notice agent. The Debtor estimated its assets and debts at $50 million to $100 million. ROBB & STUCKY: Section 341(a) Meeting Scheduled for March 21 ------------------------------------------------------------ The U.S. Trustee for Region 21 will convene a meeting of Robb & Stucky Limited LLLP's creditors on March 21, 2011, at 11:30 a.m. The meeting will be held at Room 100-A, 501 East Polk Street, (Timberlake Annex), Tampa, FL 33602. 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. Sarasota, Florida-based 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; and Home of Fine Design by Robb & Stucky -- filed for Chapter 11 bankruptcy protection on Feb. 18, 2011 (Bankr. M.D. Fla. Case No. 11-02801). Paul S. Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman PA, serve as the Debtor's bankruptcy counsel. FTI Consulting, Inc., is the Debtor's advisor and Kevin Regan is the Debtor's chief restructuring officer. Bayshore Partners, LLC, is the Debtor's investment banker. AlixPartners, LLP, serves as the Debtor's communications consultants. Epiq Bankruptcy Solutions, LLC, serves as the Debtor's claims and notice agent. The Debtor estimated its assets and debts at $50 million to $100 million. ROBERT BROWN: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: The Robert Brown Corporation 1 Hospitality Drive Ripley, WV 25271 Bankruptcy Case No.: 11-20129 Chapter 11 Petition Date: February 23, 2011 Court: United States Bankruptcy Court Southern District of West Virginia (Charleston) Judge: Ronald G. Pearson Debtor's Counsel: Joseph W. Caldwell, Esq. CALDWELL & RIFFEE P.O. Box 4427 Charleston, WV 25364-4427 Tel: (304) 925-2100 Fax: (304) 925-2193 E-mail: joecaldwell@frontier.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $50,001 to $100,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wvsb11-20129.pdf The petition was signed by Robert L. Brown, Jr., president. S&K REAL: Case Summary & Largest Unsecured Creditor --------------------------------------------------- Debtor: S&K Real Estate, LLC 1601 W. Lake Lansing Road East Lansing, MI 48823 Bankruptcy Case No.: 11-01741 Chapter 11 Petition Date: February 23, 2011 Court: United States Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: Jeffrey R. Hughes Debtor's Counsel: Steven L. Rayman, Esq. RAYMAN & STONE 141 E Michigan Avenue, Ste 301 Kalamazoo, MI 49007 Tel: (269) 345-5156 E-mail: courtmail@raymanstone.com Scheduled Assets: $1,300,000 Scheduled Debts: $2,512,447 The list of 20 largest unsecured creditors contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Central Tile & Disputed $18,950 Terrazzo Co., Inc. 5180 S. 9th Street Kalamazoo, MI 49009 The petition was signed by Stephen S. Montanye, member. SEAHAWK DRILLING: HSBC, et al., Want Equity Committee Appointment ----------------------------------------------------------------- MHR Fund Management LLC, Andalusian Capital Partners LP, HSBC Global Asset Management (USA) Inc., and Mercer Park LP, each an equity security holder and party in interest in Seahawk Drilling, Inc., and its affiliated debtors' bankruptcy cases, have requested the U.S. Bankruptcy Court for the Southern District of Texas to order the appointment of an Official Committee of Equity Holders, citing that it is crucial that the Debtors' equity holders be adequately represented at the upcoming hearings so that their rights as shareholders will not be prejudiced by a lack of representation at the hearings. The Moving Shareholders are represented by: Henry J. Kaim, Esq. Mark W. Wege, Esq. KING & SPALDING LLP 1100 Louisiana, Suite 4000 Houston, Texas 77002 Tel: (713) 751-3200 Fax: (713) 751-3290 E-mail: Hkaim@kslaw.com Mwege@kslaw.com 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 February 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. Alvarez And Marsal North America, LLC, is the Debtors' restructuring advisor. 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. SG RESOURCES: S&P Withdraws 'BB' Rating on Project -------------------------------------------------- Standard & Poor's Ratings Services said it withdrew SG Resources Mississippi's 'BB' project rating and '2' recovery rating. PAA completed its purchase of SGRM in February 2011, repaid the project's term loan with all accrued interest, and cancelled the project's revolving credit facilities. With no debt outstanding and at PAA's request, S&P is withdrawing S&P's project credit ratings on SGRM. SHILOH INDUSTRIES: S&P Raises Corporate Credit Rating to 'BB-' -------------------------------------------------------------- Standard & Poor's Ratings Services said it has raised its long- term corporate credit rating on Ohio-based Shiloh Industries Inc. to 'BB-' from 'B+'. The outlook is stable. "S&P's upgrade reflects the company's significantly improved liquidity and S&P's opinion that it will remain at or above the current level, supported by strategic and financial policies consistent with recent experience," said Standard & Poor's credit analyst Lawrence Orlowski. The company had more than $50 million in liquidity as of Jan. 31, 2011, and profitability and leverage have improved. S&P expects light-vehicle production in North America to continue rebounding in 2011, but S&P believes the recovery in auto sales and production will be gradual because of the fragile economic recovery. Shiloh reported that sales during the first quarter of fiscal 2011 rose 11% year over year, to $108.8 million, reflecting the increased production of light vehicles by the company's primary customers, the domestic automakers. The gross margin was 5.8%, compared with 5.1% a year ago. Margins increased because of higher auto production and improved manufacturing efficiencies. Sales, general, and administrative expenses were 4.7% of revenue, the same percentage as last year, demonstrating the company's efforts at cost containment. S&P's assessment of Shiloh's business risk profile as weak reflects the highly competitive and cyclical nature of the company's end markets, primarily in the light-vehicle industry. The company lacks geographic and customer diversity -- all of its manufacturing capacity resides in North America -- and the Michigan-based automakers account for more than 50% of its revenues. Shiloh's largest customer is General Motors Co. (BB- /Positive/--), which accounted for about 34% of the company's sales in fiscal 2010 (ended Oct. 31). S&P believes that in addition to internal growth, Shiloh could expand through acquisitions in non-auto markets (heavy-duty trucks and trailers, lawn and garden equipment) and in other auto markets. The outlook is stable. Demand for light vehicles continues to rise but remains weak by historical standards. For the rating, S&P expects adjusted leverage to remain below 2.5x, not only because of higher operating profits, but also because of past declines in debt. At current levels of EBITDA and debt, this means the company has sufficient debt capacity to borrow the full commitment under its revolving credit facility minus letters of credit. Although not likely in the near future, S&P could raise the rating if the company's business risk profile strengthens. For example, if the company demonstrated double-digit EBITDA margins and a significant reduction in customer concentration on the Michigan- based automakers, perhaps through greater diversification into non-auto businesses, S&P could revise the business risk profile to fair. Moreover, to raise the rating, S&P would expect the company's liquidity to improve as free cash flow increases and the company begins to build a significant cash position. S&P could lower the rating if liquidity tightens or if the current increase in North American light-vehicle demand weakens and it appears that leverage would rise above 2.5x on a sustained basis. This could occur if, for instance, revenue were flat in 2011 and gross margins were below 3%. Also, the financing of a major acquisition or distribution to shareholders that significantly increased leverage would cause us to revisit S&P's rating. SIX FLAGS: S&P Raises Corporate Credit Rating to 'BB-' ------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Grand Prairie, Texas-based theme park operator Six Flags Entertainment Corp. to 'BB-' from 'B+'. The rating outlook is stable. At the same time, S&P raised its issue-level rating on Six Flags Theme Parks Inc.'s first-lien credit facility to 'BB' (one notch higher than the corporate credit rating), from 'BB-'. The recovery rating remains at '2', indicating S&P's expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default. The rating upgrade follows SFEC's strong EBITDA growth over the past few quarters, which has resulted in credit measures that S&P views as in line with the 'BB-' rating. The EBITDA improvement was primarily a result of attendance and per capita spending growth, in conjunction with cost reductions. The upgrade also reflects S&P's belief that SFEC's financial profile, including leverage in the mid-3x area, is sufficient to withstand the moderate cash flow volatility that S&P believes is inherent in the business given the company's reliance on consumer discretionary spending trends. Furthermore, S&P believes SFEC's excess cash balances ($187 million as of Dec. 31, 2010 -- about half of which S&P considers to be excess) and relatively modest cash interest expense burden (around $52 million annually) provide a sufficient liquidity cushion. This should allow SFEC to continue to internally fund the majority of both its fixed and discretionary cash needs. These include seasonal working capital swings, capital expenditures, required partner distributions related to certain parks, put obligations, modest levels of dividends, and share repurchases. S&P's rating incorporates its expectation that revenue and EBITDA will be flat to slightly down in 2011. Standard & Poor's economists project growth in consumer spending of 3.2% and 2.3% in 2011 and 2012, respectively. While S&P expects much of this growth will be on less discretionary items, S&P anticipates a slight uptick in leisure and travel spending over the next several quarters. However, S&P believes this could drive an increased number of trips to destination theme parks in lieu of regional park visitation, as regional parks likely benefited in 2010 from customers foregoing destination park visits. Still, S&P anticipates that attendance levels will remain relatively stable, as will per capita spend. STRATEGIC AMERICAN: Completes Sale of $85MM Shares for $8.5MM ------------------------------------------------------------- Effective on Feb. 14, 2011, Strategic American Oil Corporation completed a private placement financing involving the sale of an aggregate of 85,090,000 shares of the Company, at a subscription price of $0.10 per Share, for gross proceeds of $8,509,000. The Company relied on exemptions from registration under the United States Securities Act of 1933, as amended, provided by Rule 506 of Regulation D and Regulation S, based on representations and warranties provided by the purchasers of the Shares in their respective subscription agreements entered into between each purchaser and the Company. In addition, as previously disclosed by the Company, certain Securities Purchase Agreements entered into by the Company and certain subscribers effective Oct. 15, 2009 and Nov. 13, 2009, contain a price protection provision pursuant to which the Company is required to issue additional shares to such subscribers in the event the Company participates in a subsequent financing during the three year period from the date of such Securities Purchase Agreements in which securities are issued at less than the per unit subscription price paid by such subscribers, provided that the number of additional shares issuable to any such subscriber will not exceed the number of shares originally purchased by such subscriber under its respective Securities Purchase Agreement. Thus, as a result of the closing of the Feb. 14, 2011 private placement at a price of $0.10 per Share, effective on Feb. 14, 2011 the Company issued an aggregate of 17,750,000 shares of common stock of the Company at a deemed issuance price of $0.10 per share to the subscribers under such Securities Purchase Agreements. In addition, as previously disclosed by the Company, the warrants issued pursuant to the Oct. 15, 2009 and Nov. 13, 2009 Securities Agreements also contain a price protection provision, such that in the event that the Company issues shares or rights to acquire shares at a price less than the exercise price of such warrant, the exercise price per warrant share will be reduced to equal such lower price and the number of warrant shares issuable pursuant to those warrants will be increased such that the aggregate exercise price, after taking into account the decrease in the exercise price per warrant share, equals the aggregate exercise price prior to such adjustment, provided that the number of additional warrant shares issuable pursuant to any such warrant shall not, in the aggregate, exceed the number of warrant shares originally issuable under such warrant. Thus, as a result of the closing of the Feb. 14, 2011 private placement at a price of $0.10 per Share, effective on Feb. 14, 2011 the previously issued warrants were effectively revised such that the aggregate number of warrant shares issuable under such outstanding warrants was increased from 15,361,630 to 31,343,999 warrant shares, and the exercise price was effectively revised from $0.23 to $0.10 per warrant share. About Strategic American Oil Corpus Christi, Tex.-based Strategic American Oil Corporation (OTC BB: SGCA) -- http://www.strategicamericanoil.com/-- is a growth stage oil and natural gas exploration and production company with operations in Texas, Louisiana, and Illinois. The Company's team of geologists, engineers, and executives leverage 3D seismic data and other proven exploration and production technologies to locate and produce oil and natural gas in new and underexplored areas. The Company's balance sheet at Oct. 31, 2010, showed $1.89 million in total assets, $2.96 million in total liabilities, and a stockholders' deficit of $1.07 million. MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about Strategic American Oil's ability to continue as a going concern following the Company's results for the fiscal year ended July 31, 2010. The independent auditors noted that the Company has suffered losses from operations and has a working capital deficit. SWADENER INVESTMENT: Section 341(a) Meeting Scheduled for March 30 ------------------------------------------------------------------ The U.S. Trustee for Region 20 will convene a meeting of Swadener Investment Properties, LLC's creditors on March 30, 2011, at 1:30 p.m. The meeting will be held at Room B04, 224 South Boulder Avenue, Tulsa, OK 74103. 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. Tulsa, Oklahoma-based Swadener Investment Properties, LLC, filed for Chapter 11 bankruptcy protection on Feb. 18, 2011 (Bank. N.D. Okla. Case No. 11-10322). Scott P. Kirtley, Esq., at Riggs, Abney, Neal, Turpen, Orbison, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliate Pecan Properties, Inc. (Bankr. N.D. Okla. Case No. 11- 10323) filed a separate Chapter 11 petition. SWADENER INVESTMENT: Taps Riggs Abney as Bankruptcy Counsel ----------------------------------------------------------- Swadener Investment Properties, LLC, asks for authorization from the U.S. Bankruptcy Court for the Northern District of Oklahoma to employ the law firm of Riggs, Abney, Neal, Turpen, Orbison & Lewis as bankruptcy counsel. Riggs Abney will, among other things: a. prepare schedules, statement of financial affairs and other pleadings; b. negotiate allowed claims and treatment of creditors; c. render legal advice and preparation of legal documents and pleadings concerning claims of creditors, postpetition financing, executing contracts, sale of assets, insurance, etc.; and d. formulate a disclosure statement and plan of reorganization. Riggs Abney will be paid based on the hourly rates of its professionals: Scott P. Kirtley $250 Karen C. Walsh $225 Scott P. Kirtley, Esq., an attorney at Riggs Abney, assures the Court that the firm is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. Tulsa, Oklahoma-based Swadener Investment Properties, LLC, filed for Chapter 11 bankruptcy protection on Feb. 18, 2011 (Bank. N.D. Okla. Case No. 11-10322). The Debtor estimated its assets and debts at $10 million to $50 million. Affiliate Pecan Properties, Inc. (Bankr. N.D. Okla. Case No. 11- 10323) filed a separate Chapter 11 petition. TBS INTERNATIONAL: Takes Delivery of 5th Newbuild Tweendecker ------------------------------------------------------------- TBS International plc announced that it has taken delivery of the newly-constructed vessel M/V Comanche Maiden from China Communications Construction Company Ltd./Nantong Yahua Shipbuilding Group Co., Ltd. The M/V Comanche Maiden is the fifth in a series of six "Roymar Class" 34,000 dwt multipurpose tweendecker vessels that the Company ordered at a purchase price of $35.4 million per vessel. This vessel, like her sister ships, has box-shaped holds, open hatches and fully retractable hydraulic tweendecks, is geared with 35 and 40 ton cranes combinable up to 80 tons, and has a modern fuel-efficient engine enabling the vessel to operate effectively at 15 knots. TBS expects to take delivery of the remaining vessel in the second quarter of 2011, and has in place the requisite bank financing for this vessel. With the delivery of the M/V Comanche Maiden, TBS's current fleet expands to 51 vessels with an aggregate of 1.55 million dwt, consisting of 29 tweendeckers and 22 handymax/ handysize bulk carriers. Joseph E. Royce, Chairman, Chief Executive Officer and President, commented: "We are pleased to add the M/V Comanche Maiden to our operating fleet, thereby expanding our operational fleet to a total of 51 vessels. The delivery of this modern tweendecker vessel is in line with our goal to modernize our fleet. We continue to focus on delivering a quality service to our customers. "The TBS Five-Star Service consisting of Ocean Transportation, Projects, Operations, Port Services, and Strategic Planning addresses the various transportation needs of our customers and the addition to our fleet of these newly built Roymar Class Multipurpose Tweendecker vessels optimizes our operational capabilities." 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 Sept. 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 Jan. 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. TERRESTAR CORP: Sec. 341 Meeting of Creditors Set for March 23 -------------------------------------------------------------- The U.S. Trustee for Region 2 will convene a meeting of the creditors of TerreStar Corporation and TerreStar Holdings Inc. on March 23, 2011, at 2:30 p.m. Eastern Time, at the office of the U.S. Trustee, 4th Floor, at 80 Broad Street, in New York. This is the first meeting of creditors under Section 341(a) of the Bankruptcy Code. The meeting offers creditors a one-time opportunity to examine TSC's and TerreStar Holdings' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. Attendance by the Debtor's creditors at the meeting is welcome, but not required. About TerreStar Corp. and TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which were filed on Oct. 19, 2010 . The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC is currently seeking to have its case deemed jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11- 10612 (SHL). The seven Debtor entities who seek joint administration with TSC are: * TerreStar New York Inc., * Motient Communications Inc. * Motient Holdings Inc., * Motient License Inc., * Motient Services Inc., * Motient Ventures Holdings Inc., and * MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks Inc. or TSN, the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100,000,001 to $500,000,000 in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. 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 formed in TSN's Chapter 11 cases. 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: Court Approves Key Employee Incentive Plan -------------------------------------------------------------- Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York has granted TerreStar Networks, Inc., and certain of its debtor affiliates authority to pay bonuses to their executives by implementing the previously proposed management and sale incentive plans. The Management Incentive Plan or MIP is available to 5 key executive employees -- CEO and President Jeffrey Epstein, CTO & EVP Dennis Matheson, General Counsel Douglas Brandon, SVP & Deputy GC Alexandra (Sasha) Fields and CFO Vincent Loiacono -- and 10 key senior management level employees. The Sale Incentive Plan or SIP will be made available, and is intended to replace the MIP, upon the consummation of a sale of substantially all of the TSN Debtors' assets. The TSN Debtors could pay as much as $2,300,000 if all MIP performance targets are achieved. Under the SIP, a minimum pool of $6,500,000 will be paid for any alternative transaction that results in an implied company enterprise value of $1,215,000,000. The minimum pool will be decreased to $2,306,750 if an alternative transaction provides all the TSN Debtors' key executives with favorable employment agreements. In this case, the key executives will only receive their portion of the minimum pool plus incremental amounts of the alternative transaction results in an implied company enterprise value of more than $1,215,000,000. The TSN Debtors could pay as much as $10,300,000 if the company is sold for a $1,400,000,000 purchase price, according to a Feb. 22, 2011 report by Dow Jones Daily Bankruptcy Review. The metric on which the MIP is based is the TSN Debtors' compliance with a maximum cumulative disbursements metric, under which the maximum cumulative disbursement as of February 2011 should be $23.92 million, and by September 2011, should be $58.20 million. The TSN Debtors are to provide the Official Committee of Unsecured Creditors and its financial advisors with the right to approve any amendment to the Maximum Cumulative Disbursements metric in the MIP. About TerreStar Corp. and TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which were filed on Oct. 19, 2010 . The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC is currently seeking to have its case deemed jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11- 10612 (SHL). The seven Debtor entities who seek joint administration with TSC are: * TerreStar New York Inc., * Motient Communications Inc. * Motient Holdings Inc., * Motient License Inc., * Motient Services Inc., * Motient Ventures Holdings Inc., and * MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks Inc. or TSN, the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100,000,001 to $500,000,000 in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. 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 formed in TSN's Chapter 11 cases. 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: EchoStar Has Transaction With Hughes Corp. -------------------------------------------------------------- EchoStar Corporation, the TerreStar Networks Inc. and its units' largest secured creditor and DIP lender, will enter into a transaction with Hughes Corporation, a broadband satellite- technology company and another creditor of the TSN Debtors. Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, made the disclosure in a required affidavit filed with the bankruptcy court in connection with Akin Gump's role as bankruptcy counsel for TerreStar. Mr. Dizengoff notes that Akin Gump is representing Hughes in the transaction. Mr. Dizengoff assures the Court that his firm is representing Hughes in matters wholly unrelated to the Debtors' Chapter 11 cases. However, in order to avoid the appearance of impropriety, Akin Gump is in the process of establishing an ethical wall between the relevant attorneys and staff representing the TSN Debtors and those relevant attorneys who are currently representing Hughes in its transaction with EchoStar. About TerreStar Corp. and TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which were filed on Oct. 19, 2010 . The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC is currently seeking to have its case deemed jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11- 10612 (SHL). The seven Debtor entities who seek joint administration with TSC are: * TerreStar New York Inc., * Motient Communications Inc. * Motient Holdings Inc., * Motient License Inc., * Motient Services Inc., * Motient Ventures Holdings Inc., and * MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks Inc. or TSN, the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100,000,001 to $500,000,000 in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. 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 formed in TSN's Chapter 11 cases. 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: Proposes Duff & Phelps as Valuation Expert -------------------------------------------------------------- TerreStar Networks, Inc., and its debtors affiliates seek the Court's authority to employ Duff & Phelps LLC as their valuation expert nunc pro tunc to Jan. 26, 2011. The TSN Debtors note that certain of their affiliates have previously employed Duff & Phelps to provide valuation-related and other services and accordingly, has garnered considerable knowledge concerning the TSN Debtors and is already familiar with certain of the TSN Debtors' business affairs. The TSN Debtors contend that the firm's experience and knowledge will be valuable to them in their efforts to restructure. Duff & Phelps will provide these services to the TSN Debtors: (a) Analysis of various fixed asset records and inventory listings as provided by management; (b) Physical inspection of the Allan Park Fixed Earth Station; (c) Discussions with management to obtain an explanation and clarification of data provided; (d) Analysis of general market data that might impact the value of certain of the TSN Debtor's assets located in Canada; (e) Analysis of other facts and data considered pertinent to Duff & Phelps's analysis; (f) Preparation of a draft report, to include Duff & Phelps' valuation procedures and the results of its work; and (g) Issuance of a final report. The TSN Debtors assure the Court that the services to be performed by Duff & Phelps will not duplicate or overlap with the services being performed by their other retained consultants and advisors. Duff & Phelps understands that the TSN Debtors have retained and may retain additional professionals during the term of its engagement and will work cooperatively with the TSN Debtors to avoid duplication of services. The Debtors will pay Duff & Phelps a $70,000 fixed fee, exclusive of direct engagement and administrative expenses. The Debtors will also pay Duff & Phelps for any time spent preparing for, or providing testimony or any additional time spent reviewing the report with the TSN Debtors' parties-in- interest in the Chapter 11 cases, at the firm's hourly rates, which are: Personnel Classification Hourly Rate ------------------------ ------------ Managing Director $680 to $730 Director $590 to $620 Vice President $490 to $530 Senior Associate $370 to $400 Analyst $260 to $280 Administrative $80 Michael H. Dolan, a managing director at Duff & Phelps, assures the Court that his firm is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About TerreStar Corp. and TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which were filed on Oct. 19, 2010 . The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC is currently seeking to have its case deemed jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11- 10612 (SHL). The seven Debtor entities who seek joint administration with TSC are: * TerreStar New York Inc., * Motient Communications Inc. * Motient Holdings Inc., * Motient License Inc., * Motient Services Inc., * Motient Ventures Holdings Inc., and * MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks Inc. or TSN, the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100,000,001 to $500,000,000 in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. 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 formed in TSN's Chapter 11 cases. 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) THOMPSON PUBLISHING: TPH Has Until March 21 to File Plan -------------------------------------------------------- Carla Main at Bloomberg News reports that TPH Seller Inc. won an order from U.S. Bankruptcy Judge Peter J. Walsh extending the newsletter publisher's time to file and gain support for a reorganization plan, court files show. Thompson has until March 21 to file a plan and until May 20 to solicit support for it. About Thompson Publishing Based in Washington, legal publisher Thompson Publishing had 300 products and 70,000 subscribers, producing an estimated $49 million in revenue in 2010. Thompson also arranged conferences and employee-training events. Avista Capital Partners bought a 50% stake in Thompson for $130 million in 2006. Thompson Publishing Holding Co. Inc. and six affiliates sought chapter 11 protection (Bankr. D. Del. Case No. 10-13070) on Sept. 21, 2010. Thompson disclosed approximately $20 million in assets and about $166 million in liabilities as of the Petition Date. John F. Ventola, Esq., and Lisa E. Herrington, Esq., at Choate, Hall & Stewart LLP in Boston, Mass., and Alissa T. Gazze, Esq., Chad A. Fights, Esq., and Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell, LLP, serve as the Debtors' bankruptcy counsel. Mark Chesen and Michael Gorman at SSG Capital Advisors LLC in Conshohocken, Pa., act as the Debtors' financial advisors. Thompson was authorized in November to sell the business to the first-lien lenders in exchange for $42 million in secured debt. In the process, $100,000 was set aside for unsecured creditors. Thompson changed its name to TPH Seller Inc. following the sale. TRIBUNE CO: Bank Debt Trades at 28% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Tribune Co. is a borrower traded in the secondary market at 71.85 cents-on-the- dollar during the week ended Friday, Feb. 25, 2011, a drop of 1.69 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. 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 180 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) TYSON FOODS: S&P Raises Corporate Credit Rating From 'BB+' ---------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its ratings on Springdale, Ark.-based meat marketer and producer Tyson Foods Inc. and its wholly owned subsidiary Tyson Fresh Meats Inc., including the corporate credit ratings, which S&P raised to 'BBB-' from 'BB+'. The outlook is stable. Tyson had reported debt outstanding of about $2.5 billion as of Jan. 1, 2011. At the same time, S&P raised the issue-level ratings on Tyson's 10.5% senior unsecured notes due 2014 and 7.35% senior unsecured notes due 2016 to 'BBB-' from 'BB+', and withdrew S&P's '3' recovery ratings on this debt. The 2014 notes are guaranteed by substantially all of Tyson's direct and indirect domestic subsidiaries, while the 2016 notes are guaranteed by Tyson Fresh Meats. S&P is also withdrawing its '4' recovery ratings on all other senior unsecured debt, while keeping the 'BB+' issue-level ratings on this debt unchanged. Based on S&P's estimate of the amount of priority liabilities that rank ahead of this debt (including Tyson's guaranteed senior unsecured notes and other liabilities at its guarantor and nonguarantor operating subsidiaries) as a% of the company's adjusted total assets, S&P believes the unguaranteed senior unsecured notes are materially structurally subordinated. Therefore, S&P rate these notes' respective issue-level ratings one notch below the 'BBB-' corporate credit rating. "The upgrade reflects S&P's opinion that despite the possibility of a decline in operating performance in fiscal 2011 due to higher feed costs and possibly lower domestic beef demand and a negative mix shift in response to higher prices," said Standard & Poor's credit analyst Christopher Johnson, "Tyson's credit measures will continue to support a higher rating." Moreover, with cash balances likely to remain above $500 million, S&P believes Tyson will maintain an adequate liquidity position as the company faces higher commodity costs and working capital requirements. Although S&P estimate EBITDA may decline by well over 10% year over year in fiscal 2011 (ending Sept. 30, 2011), S&P believes adjusted debt to EBITDA will remain below 2.0x in fiscal 2011 compared with a ratio of 1.4x for the 12 months ended Jan. 1, 2011, and funds from operations (FFO) to total debt will be greater than 35%. The upgrade also reflects S&P's opinion that, on average, the company will maintain a debt to EBITDA ratio between 2x and 3x and FFO to total debt in the 30%-35% area. (Because of the volatile nature of Tyson's core commodity protein markets, S&P also evaluates the company's credit measures on an average basis to normalize for operating volatility.) UNIGENE LABORATORIES: Accelerates Development of Peptide UGP281 --------------------------------------------------------------- Unigene Laboratories, Inc., announced that it is accelerating the development of its lead proprietary anorexigenic peptide, UGP281. An anorexigenic peptide is one that diminishes or controls appetite and offers potential therapeutic benefit to morbidly obese patients. The Company expects to file an Investigational New Drug (IND) application with the U.S. Food and Drug Administration (FDA) and initiate Phase 1 clinical studies in the first half of 2012. Given Unigene's aggressive cash conservancy and revenue generation initiatives since launching its new corporate strategy in the fourth quarter of 2010, the acceleration of the UGP281 program will not impact Unigene's cash runway. The Company reiterates its financial guidance today and continues to expect its cash position to last into the second half of 2012. As previously reported, Unigene is also currently exploring the opportunity to license a pharmacologically distinct sister analog to a veterinary partner for companion animal obesity to subsidize a portion of the human proof of concept development costs of UGP281. Ashleigh Palmer, Unigene's President and CEO stated, "We believe our decision to accelerate UGP281's development could have tremendous strategic benefits for Unigene as we have the potential to address a significant unmet medical need. The launch of our turnaround strategy following Victory Park Capital's debt restructuring last year, coupled with the successful implementation of cash conservancy and revenue generation initiatives, provides the near-term funding for the accelerated development of UGP281." Palmer continued, "Our goal is to file an IND and commence the clinical testing of UGP281 in the first half of 2012." Unigene's lead satiety compound, UGP281, a potent anorexigenic peptide, has demonstrated substantial decreases in food consumption and weight in multiple in vivo preclinical studies. Unigene's "PeptelligenceTM" core competence will allow UGP281 to be manufactured and delivered by way of our proprietary recombinant production and oral delivery technologies. Potential competitors with peptide or protein based drugs are likely to have to resort to injectable, depot or patch formulations. Longer term oral studies with UGP281 in dog models are currently ongoing. Dr. Nozer Mehta, Unigene's Vice President of Research and Development commented, "UGP281 is a custom designed, potent amylin receptor super agonist and is an analog of naturally occurring peptide hormones. It has a very favorable pharmacological profile in terms of selectivity, safety and potency. These attributes offer the potential for a therapeutic product without the safety issues of several small molecule drugs or drug combinations. We, therefore, believe UGP281 has the potential to fill the void left by a spate of recent late-stage obesity drug development failures." Obesity is associated with increased risk for coronary heart disease, diabetes, cancer, hypertension, stroke, depression, sleep apnea and overall mortality. Moderate weight loss (5-10%) has been shown to significantly decrease many of these risks. With the Centers for Disease Control and Prevention (CDC) estimating the total economic cost of obesity-associated diseases in the U.S. to be in the order of $90 billion per year or more, there remains a high unmet medical need and compelling socioeconomic justification for effective and safe anti-obesity agents. About Unigene Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/ -- is a biopharmaceutical company focusing on the oral and nasal delivery of large-market peptide drugs. The Company's balance sheet at Sept. 30, 2010, showed $25.66 million in total assets, $62.50 million in total liabilities, and a stockholders' deficit of $36.83 million. Grant Thornton LLP, in New York, expressed substantial doubt about Unigene Laboratories' ability to continue as a going concern following the Company's 2009 results. The firm noted that the Company has incurred a net loss of $13,400,000 during the year ended Dec. 31, 2009 and has an accumulated deficit of approximately $143,000,000 as of Dec. 31, 2009. As of that date, the Company's current liabilities exceeded its current assets by $1,251,000 and its total liabilities exceeded total assets by $30,442,000. UNISYS CORP: Prices 2.25MM Preferred Shares at $100 Per Share ------------------------------------------------------------- Unisys Corporation announced that it has priced an offering of 2,250,000 shares of its 6.25% Mandatory Convertible Preferred Stock, Series A at an initial liquidation preference of $100 per share. Each share of the mandatory convertible preferred stock will be mandatorily convertible on March 1, 2014 into between approximately 2.1899 shares and 2.6717 shares of Unisys common stock, depending on the market value of Unisys common stock. The closing is expected to occur on Feb. 28, 2011, subject to customary closing conditions. The mandatory convertible preferred stock will pay, when and if declared by the Board of Directors, cumulative dividends at a rate of 6.25% per annum on the initial liquidation preference of $100 per share (equivalent to $6.25 per year per share), payable quarterly in cash on March 1, June 1, September 1 and December 1 of each year, or in the case of dividends payable on March 1, 2014 or any earlier conversion date, payable in cash, shares of Unisys common stock or a combination thereof at the Company's election. The first dividend payment date will be June 1, 2011. The underwriters for the offering will have an option to purchase up to an additional 337,500 shares of mandatory convertible preferred stock, which may be exercised to the extent the underwriters sell more than 2,250,000 shares of mandatory convertible preferred stock. Unisys intends to use the net proceeds from the offering to redeem up to an aggregate of $98.7 million of the Company's 12 3/4% Senior Secured Notes due 2014 and up to an aggregate of $86.3 million of the Company's 14 1/4% Senior Secured Notes due 2015 under the provisions of the indentures relating to the notes that allow the Company to redeem, at its option, up to 35% of the original aggregate principal amount of each series of notes from the net cash proceeds of one or more equity offerings. Goldman, Sachs & Co. and Citi are acting as joint book-running managers for the offering. RBS is acting as co-manager for the offering. The offering will be made under the Company's existing shelf registration statement filed with the Securities and Exchange Commission. This announcement is neither an offer to sell nor a solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any offers of the shares will be made exclusively by means of a prospectus supplement and accompanying prospectus. Copies of the preliminary prospectus supplement and accompanying prospectus relating to the offering may be obtained by contacting Goldman, Sachs & Co., 200 West Street, New York, NY 10282, (866) 471-2526 or emailing prospectus-ny@ny.email.gs.com, or Citigroup Global Markets Inc., Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220. About Unisys Corp. Based in Blue Bell, Pennsylvania, Unisys Corporation (NYSE: UIS) -- http://www.unisys.com/-- provides a portfolio of IT services, software, and technology that solves critical problems for clients. With more than 26,000 employees, Unisys serves commercial organizations and government agencies throughout the world. The Company's balance sheet at Dec. 31, 2010, showed $3.02 billion in total assets, $3.95 billion in total liabilities and a $933.80 million stockholders' deficit. As reported by the Troubled Company Reporter on Feb. 24, 2011, Moody's Investors Service has affirmed Unisys' B1 corporate family rating and all other ratings, and also changed the rating outlook to positive from stable. This outlook change follows the announcement by Unisys of plans to issue mandatory convertible preferred stock, redeem secured notes, and tender for additional bonds which Moody' estimates will reduce secured debt by up to $390 million. Upon completion of the transactions, the loss given default assessments will be revised based on the remaining debt balances. UNITED WESTERN: Says OTS, FDIC Seized Bank Absent Valid Grounds --------------------------------------------------------------- United Western Bancorp, Inc., alleges in a complaint filed against the Office of Thrift Supervision, the Acting Director of the OTS and the Federal Deposit Insurance Corporation in the United States District Court for the District of Columbia that none of the grounds cited by the Acting Director of the OTS existed at the time of the Bank's seizure. On Jan. 21, 2011, the Acting Director of the OTS, in cooperation with the FDIC, seized the Bank and appointed the FDIC receiver based on three alleged grounds: (i) the Bank was undercapitalized and failed to submit an acceptable capital restoration plan within the time prescribed by statute; (ii) the Bank was likely to be unable to pay its obligations or meet its depositors' demands in the normal course of business; and, (iii) the Bank was in an unsafe or unsound condition to transact business. Guy A. Gibson, chairman of the Board of the Company said, "The seizure order issued on Jan. 21, 2011 by the OTS, appointing the FDIC as receiver, is arbitrary and capricious and lacked any rational basis in applicable law." The Company's Complaint refutes the allegations made by the FDIC and the OTS, and importantly, among other facts cites: The Acting Director of the OTS, without any reasonable basis, concluded the Bank had failed to submit a CRP acceptable to the OTS. However, despite the statutory requirement that institutions be given a reasonable time to submit a CRP, the OTS demanded that the Bank submit a CRP within seven days, a clearly unreasonable request in excess of its statutory authority. The Bank's capital position provided no basis to accelerate the standard 45 day time frame for filing a CRP. On Dec. 3, 2010, the OTS directed the Bank to take a capital write-down with the intent of lowering the Bank's capital ratio as much as necessary in order to create the illusion that the Bank was not adequately capitalized. The result of this arbitrary and capricious directive was to lower the Bank's total risk-based capital ratio to 7.8% (which is only 0.2% below the 8.0% ratio required to be considered adequately capitalized). But for the OTS's arbitrary and capricious directive, the Bank would have remained within the technical definition of adequately capitalized and not been subject to the requirement that it submit a CRP. The Company believes that the seizure of a Bank with a reported total risk-based capital ratio of 7.8% and a pending recapitalization is unprecedented. According to the Company, if the standard applied by the OTS to United Western Bank was uniformly applied to banks across the country, a significant number of those banks would be subject to immediate seizure. The majority of the institutions closed by the OTS in 2009 and 2010 were critically undercapitalized, meaning that the ratio of tangible equity to total assets was less than 2 percent. A number of these institutions were insolvent; for example, one of these institutions had a core capital ratio of negative 7.11% and a total risk-based capital ratio of negative 7.36 percent. The Company's research suggests the OTS has not accepted any CRP submitted to it during this financial crisis. Instead, the OTS appears to reject CRPs as a matter of course, regardless of merit, and then asserts that the failure to submit an acceptable CRP is grounds for receivership. The rejection of the Bank's CRP was part of this unreasonable pattern by the OTS, the Company avers. According to the Company, no grounds existed for the Acting Director to reasonably conclude that the Bank was likely to be unable to pay its obligations or meet its depositors' demands in the normal course of business. The liquidity concerns asserted by the OTS and FDIC were based on their unfounded disapproval of the Bank's 17 year-old business model and a fundamental misunderstanding of the Bank's long-term, contractual relationships with certain of its institutional depositors, the Company asserts. The Company adds that there was no rational basis for the OTS or FDIC to conclude that the Bank would not continue to effectively manage its institutional depositor relationships as the Bank had for almost two decades, including through the worst of the financial crisis in 2008 and going forward. The institutional depositors would have maintained funds on deposit absent an arbitrary or capricious action by the OTS or FDIC to force withdrawal of such funds. The Bank repeatedly, most recently as of Jan. 20, 2011, advised the OTS that this was the case. The Company maintains that the Bank had ample liquidity to pay its obligations and meet depositor demands. The Company says the Bank had over $400 million of cash at the time of the seizure, which represented approximately 25% of total deposits on Jan. 21, 2011. The Company and the Bank were very close to completing a recapitalization transaction of $200 million, with commitments in place of $149.5 million and parties identified to complete the transaction at the time of the seizure of the Bank by the FDIC. The completion of this transaction would have eliminated the need to seize the Bank, thereby avoiding a significant loss to the Deposit Insurance Fund. This information was provided to the OTS on January 20, 2011. The Company is represented in this law suit by its internal counsel and certain inside directors of the Company and certain former inside directors of the Bank are represented by BuckleySandler, LLP of Washington, D.C. and certain independent directors of the Company and certain former independent directors of the Bank are represented by the Washington office of Paul, Hastings, Janofsky & Walker LLP. 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 Bank of Denver, Colo., was closed on January 21, 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-Citizens Bank & Trust Company of Raleigh, N.C., to assume all of the deposits of United Western Bank. As of September 30, 2010, United Western Bank had around $2.05 billion in total assets and $1.65 billion in total deposits. First-Citizens Bank & Trust Company did not pay the FDIC a premium for the deposits of United Western Bank. In addition to assuming all of the deposits of the failed bank, First-Citizens Bank & Trust Company agreed to purchase essentially all of the assets. UNITED WESTERN: Disowns Thrift Financial Report ----------------------------------------------- United Western Bancorp, Inc. announced that on or about Jan. 31, 2011, a Thrift Financial Report prepared on behalf of the Bank as of Dec. 31, 2010 was filed with the Office of Thrift Supervision. The TFR was not prepared by any representative of the Company and the Company disavows any information contained in the TFR. Neither the Company nor any of its affiliates was consulted with regard to the preparation of the TFR and neither the Company nor any of its affiliates is responsible for the TFR. The Company previously announced on Jan. 21, 2011, that the Federal Deposit Insurance Corporation was appointed as receiver for the Bank by the OTS pursuant to the Federal Deposit Insurance Act. The FDIC immediately sold certain assets and liabilities of the Bank to First-Citizens Bank & Trust Company of Raleigh, North Carolina, who commenced operations of the Bank in the name of First-Citizens Bank on Jan. 24, 2011. On Feb. 18, 2011, the Company and certain officers and directors of the Company and directors of the Bank filed a complaint against the OTS and the FDIC seeking to overturn the seizure of the Bank by the FDIC. That action is currently pending in the federal district court in Washington, D.C. 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 Bank of Denver, Colo., was closed on January 21, 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-Citizens Bank & Trust Company of Raleigh, N.C., to assume all of the deposits of United Western Bank. As of September 30, 2010, United Western Bank had around $2.05 billion in total assets and $1.65 billion in total deposits. First-Citizens Bank & Trust Company did not pay the FDIC a premium for the deposits of United Western Bank. In addition to assuming all of the deposits of the failed bank, First-Citizens Bank & Trust Company agreed to purchase essentially all of the assets. US MORTGAGE: Former President Sentenced to 14 Years in Prison ------------------------------------------------------------- Reuters reports that Michael McGrath, former president of U.S. Mortgage Corp., was sentenced to 14 years in prison for running a $140 million scheme that defrauded credit unions on loans sold to Fannie Mae, and led to bankruptcy for his mortgage company. Mr. McGrath had pleaded guilty in June 2009 to two counts of conspiracy, including one to commit mail and wire fraud and one to commit money laundering. According to Reuters, Mr. McGrath had run U.S. Mortgage Corp, a Pine Brook, New Jersey, lender and broker that filed for Chapter 11 protection in February 2009, and was a principal at its CU National unit serving credit unions. Reuters notes, at a hearing in the Newark, New Jersey federal court on Thursday, U.S. District Judge Katharine Hayden also sentenced McGrath to three years supervised release. She also ordered restitution in a sum to be determined, but which prosecutors expect will exceed $136 million. Mr. McGrath also forfeited $14 million of previously seized or frozen assets. Reuters relates Federal prosecutors said Mr. McGrath admitted to conspiring with others from January 2004 to January 2009 to fraudulently sell credit union loans, and use proceeds to finance U.S. Mortgage's operations and investments for himself. Mr. McGrath faced as much as 30 years in prison under federal guidelines, though his plea agreement called for a term as short as 12-1/2 years, Reuters quotes lawyer John Vazquez as stating. Reuters says four credit unions are still pursuing civil litigation against Fannie Mae to recover more than $64 million of loans they originated, and which they say were sold fraudulently to the mortgage financier via U.S. Mortgage, court records show. In one case, where the Picatinny Federal Credit Union seeks to recover 52 loans totaling $13.3 million, Fannie Mae in a Feb. 14, 2011, court filing said it had been unaware when it bought the loans of the U.S. Mortgage fraud. About U.S. Mortgage Based in Pine Brook, New Jersey, U.S. Mortgage Corp. -- http://2usmortgage.com/-- was a licenced mortgage banker founded in 1996. USM originated mortgages through a network of branch offices, as well as sold mortgages in the secondary market to investors and other parties. CU National Mortgage, LLC was developed to serve the needs of the credit union industry. On February 23, 2009, USM filed for Chapter 11 relief in the U.S. Bankruptcy Court for the District of New Jersey. CU National filed for bankruptcy protection on April 1, 2009, in the same Court. The cases are being jointly administered under Case No. 09-14301. The Debtors commenced bankruptcy proceedings after allegations surfaced that they sold mortgages more than once and engaged in other alleged improprieties. Bruce D. Buechler, Esq., Kenneth Rosen, Esq., and Nicole Stefanelli, Esq., at Lowenstein Sandler PC, serve as bankruptcy counsel. The Debtor estimated $10 million to $50 million in assets and $100 million to $500 million in debts as of the bankruptcy filing. VALLEY COMMUNITY BANK: Closed; First State Bank Assumes Deposits ---------------------------------------------------------------- Valley Community Bank of St. Charles, Ill., was closed on Friday, Feb. 25, 2011, by the Illinois Department of Financial and Professional Regulation - Division of Banking, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First State Bank of Mendota, Ill., to assume all of the deposits of Valley Community Bank. The five branches of Valley Community Bank will reopen during their normal business hours as branches of First State Bank. Depositors of Valley Community Bank will automatically become depositors of First State Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Valley Community Bank should continue to use their existing branches until they receive notice from First State Bank that it has completed systems changes to allow other First State Bank branches to process their accounts as well. As of Dec. 31, 2010, Valley Community Bank had around $123.8 million in total assets and $124.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, First State Bank agreed to purchase essentially all of the assets. Customers who have questions about the transaction can call the FDIC toll-free at 1-800-357-7599. Interested parties also can visit the FDIC's Web site at: http://www.fdic.gov/bank/individual/failed/valleycomm.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $22.8 million. Compared to other alternatives, First State Bank's acquisition was the least costly resolution for the FDIC's DIF. Valley Community Bank is the 23rd FDIC-insured institution to fail in the nation this year, and the second in Illinois. The last FDIC-insured institution closed in the state was Community First Bank-Chicago of Chicago, Ill., on February 4, 2011. VIKING SYSTEMS: Incurs $2.44 Million Net Loss in 2010 ----------------------------------------------------- Viking Systems, Inc. reported a net loss applicable to common shareholders of $2.44 million on $8.04 million of sales for the year ended Dec. 31, 2010, compared with a net loss applicable to common shareholders of $1.07 million on $7.22 million of sales during the prior year. The Company's balance sheet at Dec. 31, 2010 showed $4.20 million in total assets, $2.26 million in total current liabilities and $1.94 million in total stockholders' equity. Jed Kennedy, President and CEO of Viking Systems said, "We are very pleased with our significant accomplishments during 2010, having achieved our goals of developing and launching our new cutting edge 3DHD Vision System. I am also happy to report that during 2010 we increased our total sales by 11% and obtained the financing necessary to support our growth plans. We continue to be very excited about the market response to our new product and future prospects for the business." A full-text copy of the press release announcing the 2010 results is available for free at http://ResearchArchives.com/t/s?7409 About Viking Systems Based in Westborough, Massachusetts, Viking Systems, Inc. (OTCBB: VKNG.OB) -- http://www.vikingsystems.com/-- is a developer, manufacturer and marketer of visualization solutions for complex minimally invasive surgery. The Company partners with medical device companies and healthcare facilities to provide surgeons with proprietary visualization systems enabling minimally invasive surgical procedures, which reduce patient trauma and recovery time. The report from Viking Systems, Inc.'s independent registered public accounting firm, Squar, Milner, Peterson, Miranda & Williamson, LLP, dated February 22, 2010, includes a going concern explanatory paragraph which states that factors relating to the Company's net losses and working capital concerns raise substantial doubt the Company's ability to continue as a going concern. Viking Systems said it will need to generate significant additional revenue to achieve profitability and it may require additional financing during 2010. "The going concern explanatory paragraph in the independent auditor's report emphasizes the uncertainty related to our business as well as the level of risk associated with an investment in our common stock," Viking Systems said. VITRO SAB: Bondholders' Bid for US Units Bankruptcy Postponed ------------------------------------------------------------- Carla Main at Bloomberg News reports that Vitro SAB won a postponement of a court fight with bondholders, which are seeking to force the U.S. units of the Mexican glassmaker into bankruptcy, to allow mediation to take place. According to the report, U.S. Bankruptcy Judge Russell Nelms on Feb. 24 granted a request by Vitro to postpone a hearing in Fort Worth, Texas. The Company, which defaulted on $1.2 billion in bonds, asked for the delay so that it can mediate with stakeholders. Creditors, including hedge funds Elliott Management Corp. and Davidson Kempner Capital Management LLC, opposed the delay and wanted Judge Nelms to move forward with the request to force the Vitro units into bankruptcy. About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. Vitro is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009, and is now seeking to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. The offer was to expire December 7. Noteholders who oppose the exchange, namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P. -- which hold US$75 million, or approximately 6% of the outstanding bond debt -- commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and nine other affiliates on November 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation Counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders, known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. The U.S. affiliates subject to the involuntary petitions are Vitro Chemicals, Fibers & Mining, LLC (Bankr. N.D. Tex. Case No. 10-47472); Vitro America, LLC (Bankr. N.D. Tex. Case No. 10-47473); Troper Services, Inc. (Bankr. N.D. Tex. Case No. 10-47474); Super Sky Products, Inc. (Bankr. N.D. Tex. Case No. 10-47475); Super Sky International, Inc. (Bankr. N.D. Tex. Case No. 10-47476); VVP Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47477); Amsilco Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47478); B.B.O. Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47479); Binswanger Glass Company (Bankr. N.D. Tex. Case No. 10-47480); Crisa Corporation (Bankr. N.D. Tex. Case No. 10-47481); VVP Finance Corporation (Bankr. N.D. Tex. Case No. 10-47482); VVP Auto Glass, Inc. (Bankr. N.D. Tex. Case No. 10-47483); V-MX Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47484); and Vitro Packaging, LLC (Bankr. N.D. Tex. Case No. 10-47485). Vitro SAB on December 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, thereby commencing its voluntary concurso mercantil proceedings. Vitro SAB believes that, as a result of the implementation of the Concurso Plan through the Mexican Proceeding, the holders of the Restructured Debt will recover 68% to 75% of the face value of their respective claims. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on December 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Alejandro Francisco Sanchez-Mujica, as foreign representative of Vitro, has asked the U.S. Bankruptcy Court to enter an order recognizing the Mexican Proceeding as "foreign main proceeding" pursuant to 11 U.S.C. Sections 1515 and 1517. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. WES CONSULTING: Fyodor Petrenko Elected as Director --------------------------------------------------- On Feb. 19, 2011, the Board of Directors of WES Consulting, Inc. elected Fyodor Petrenko, age 43, as a Director of the Company, which filled an existing vacancy on the Board. Mr. Petrenko will continue to serve in his position as Executive Vice President for the Company. As previously reported on a Current Report on Form 8-K filed on Feb. 2, 2011 in connection with the acquisition of Web Merchants, Inc. on Jan. 27, 2011, the Board of Directors appointed Mr. Petrenko as Executive Vice President. Mr. Petrenko co-founded WMI in 2002 and has served as its President since then. Prior to then, Mr. Petrenko was the head of investment banking with Media- Most, an international multimedia holding company based in Russia. Mr. Petrenko holds a PhD in Physics from Moscow State University and MS degree in Finance from CUNY (Baruch). Voting Rights Agreement Jan. 27, 2011, the Company's President and CEO, Louis Friedman, entered into a Voting Rights Agreement with the Company and Fyodor Petrenko. Pursuant to the terms of the Voting Rights Agreement, while Mr. Petrenko and Mr. Friedman own 50% or more of their current holdings, the other party agrees to vote for the election of the other to the Company's Board of Directors and to elect certain other mutually agreed upon nominees to the Board. Furthermore, they are prevented, in their capacities as directors and shareholders, from acting on certain transactions without the affirmative vote of the other. Amendment to Articles of Incorporation On Feb. 18, 2011, the Company filed an Article of Amendment to its Articles of Incorporation, effective Feb. 9, 2011, to increase the number of shares of capital stock to 185,000,000 of which 10,000,000 shares will be designated Preferred Stock, $0.0001 par value. A copy of the Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company is available for free at http://ResearchArchives.com/t/s?73fe In addition, the Company filed a Certificate of Designation to create a class of preferred stock titled Series A Convertible Preferred Stock. A full-text copy of the Designation of Rights and Preferences of Series A Convertible Preferred Stock of the Company is available for free at http://ResearchArchives.com/t/s?73ff These actions were both approved by the Board of Directors and a majority vote of the shareholders on Oct. 20, 2009. About WES Consulting Atlanta, Ga. - based WES Consulting, Inc. (OTC BB: WSCU) was incorporated February 25, 1999, in the State of Florida. Until October 19, 2009, the Company was in the business of consulting and commercial property management. On October 19, 2009, the Company entered into a Merger and Recapitalization Agreement with Liberator, Inc., a Nevada corporation. Pursuant to the Agreement, Liberator merged with and into the Company, with the Company surviving as the sole remaining entity. The Merger has been accounted for as a reverse merger. The Company is a designer and manufacturer of various specialty furnishings for the sexual wellness market. The Company's sales and manufacturing operation are located in the same facility in Atlanta, Georgia. Sales are generated through the internet and print advertisements. The Company's balance sheet at June 30, 2010, showed $3.1 million in total assets, $3.9 million in total liabilities, and a stockholders' deficit of $738,000. Gruber & Company, LLC, in Lake Saint Louis, Mo., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company incurred a net loss of $1.0 million and $3.6 million for the years ended June 30, 2010, and 2009, respectively, and as of June 30, 2010, the Company had an accumulated deficit of $6.2 million and a working capital deficit of $676,989. W.R. GRACE: FMR LLC Holds 9.99% Equity Stake -------------------------------------------- FMR LLC disclosed in a Feb. 14, 2011 SC 13G/A filing with the U.S. Securities and Exchange Commission that it is deemed to beneficially own 7,300,585 shares of W.R. Grace & Co. common stock. The amount represents 9.990% of the 73,078,925 Grace shares outstanding as of Oct. 31, 2010. Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, is the beneficial owner of 7,271,615 shares or 9.950% of the Grace Common Stock outstanding. Edward C. Johnson, chairman of FMR LLC, and FMR LLC, through its control of Fidelity, each has sole power to dispose of the 7,271,615 shares owned by the Funds. Pyramis Global Advisors Trust Company, an indirect wholly owned subsidiary of FMR LLC, is the beneficial owner of 11,570 shares or 0.016% of the outstanding Grace Common Stock. Mr. Johnson and FMR LLC, through its control of Pyramis Global, each has sole dispositive power over 11,570 shares and sole power to vote or to direct the voting of 11,570 shares of Common Stock owned by the institutional accounts managed by PGATC. The Chapter 11 Plan As reported in the Feb. 3, 2011 edition of the Troubled Company Reporter, Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware approved on Jan. 31, 2011, the Joint Plan of Reorganization proposed by W.R. Grace & Co. and its debtor affiliates, the Official Committee of Equity Security Holders, the Official Committee of Asbestos-related Personal Injury Claimants, and the Future Claims Representative. Grace's Joint Plan will next be considered for confirmation by the United States District Court for the District of Delaware, a necessary step before Grace may exit Chapter 11. Judge Judith Fitzgerald confirmed the Plan after resolving all outstanding objections and finding that the Plan satisfies all applicable sections of the Bankruptcy Code, including Section 524(g). Judge Fitzgerald held that claimants in Classes 6, 7 (including both sub-classes 7A and 7B), and 8 have voted to accept the Plan in the requisite numbers and amounts required by Sections 524(g), 1126, and 1129. The Joint Plan establishes two asbestos trusts to compensate personal injury claimants and property owners. Funds for the trusts will come from a variety of sources including cash, warrants to purchase Grace common stock, deferred payment obligations, insurance proceeds and payments from successor companies. The trusts' assets and operations are designed to cover all current and future asbestos claims, according to the Debtors. The Debtors filed for bankruptcy in April 2001 because of increasing asbestos personal injury claims. They have submitted several plans of reorganizations co-proposed by different parties-in-interest since the Petition Date. The most recent plan was filed in November 2008 and incorporated settlements of the Debtors' present and future asbestos-related PI Claims. In April 2008, the Debtors reached an agreement settling all of their present and future asbestos-related PI claims for $1.8 billion. Prior to the agreement, the Debtors were involved in a series of trials to estimate their asbestos personal injury claims. Grace's experts estimated that the company's asbestos personal injury liabilities are between $385 million and $1.314 billion. The PI Committee, representing more than 100,000 asbestos claimants, said Grace's liabilities range from $4.7 billion to $6.2 billion. Pursuant to the April 2008 settlement, the asbestos trusts will be funded by: -- Cash in the amount of $250,000,000; -- Warrants to acquire 10,000,000 shares of Grace common stock at an exercise price of $17.00 per share, expiring one year from the effective date of a plan of reorganization; -- Rights to proceeds under Grace's asbestos-related insurance coverage; -- The value of cash and stock under the litigation settlement agreements with Sealed Air Corporation and Fresenius Medical Care Holdings, Inc.; and -- Deferred payments at $110,000,000 per year for five years beginning in 2019, and $100,000,000 per year for 10 years beginning in 2024; the deferred payments would be obligations of Grace backed by 50.1% of Grace's common stock to meet the requirements of Section 524(g). The Sealed Air settlement payment consists of (i) $512,500,000 in cash, plus interest accrued from Dec. 21, 2005, until the Plan's effective date, at a rate of 5.5% per annum compounded annually; and (ii) 18,000,000 shares of Sealed Air common stock. As of Jan. 31, 2011, Eastern Time, Sealed Air stocks are priced at $26.69 per share, placing a value of about $480,420,000 on the settlement pact. In a company statement, Sealed Air said it will review the Bankruptcy Court's confirmation order to ensure that the Debtors implement the Plan in a manner fully consistent with a settlement agreement signed on Nov. 20, 2003. Sealed Air added that it stands ready to contribute its payment directly to one or more of the trusts to be created under Section 524(g) once the provisions of the settlement agreement are fully met. Sealed Air noted that as of Dec. 31, 2010, its total cash payment would have been approximately $788 million, which reflects the principal settlement amount of $512.5 million and $275.5 million of accrued interest, which accrues at 5.5% per annum and is compounded annually. Sealed Air's payment to the Debtors would resolve all current and future asbestos-related, fraudulent transfer and successor claims the Debtors have against Sealed Air as a result of the Cryovac transaction with W. R. Grace in 1998. The Debtors will also fund a trust created for Canadian Zonolite Attic Insulation Claims. In a recently amended settlement, the Debtors' contribution to the Fund is increased from C$6,500,000 to C$8,595,632 in the event the U.S. Confirmation Order is entered by the U.S. Court on or before Jan. 31, 2011; and C$9,095,632 in the event that the U.S. Confirmation Order is entered by the U.S. Court after Jan. 31, 2011, but on or before July 31, 2011. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring effort. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Officers Acquire Grace Shares ----------------------------------------- Four officers of W.R. Grace & Co. disclosed in separate Form 4s filed with the U.S. Securities and Exchange Commission on Feb. 15, 2011 that they acquired shares and stock options in the Company: No. of Shares Officer Position Acquired ------- -------- ------------- Mark Shelnitz Vice-president, general counsel, and secretary 8,200 Gregory Poling Vice-president 16,500 Brian McGowan Senior Vice-president 12,300 William Corcoran Vice-president 12,300 Each share of Common stock also represents one Preferred Share Purchase Right. Each Right entitles the holder to purchase Preferred Stock or other securities or property upon the occurrence of certain events and subject to certain conditions. The exercise and sale are pursuant to Rule 10b5-1 Trading Plan for options granted March 8, 2001, and expiring March 7, 2011. The shares are held in a "Rabbi Trust" established by the Company for the benefit of certain officers and directors. The Chapter 11 Plan As reported in the Feb. 3, 2011 edition of the Troubled Company Reporter, Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware approved on Jan. 31, 2011, the Joint Plan of Reorganization proposed by W.R. Grace & Co. and its debtor affiliates, the Official Committee of Equity Security Holders, the Official Committee of Asbestos-related Personal Injury Claimants, and the Future Claims Representative. Grace's Joint Plan will next be considered for confirmation by the United States District Court for the District of Delaware, a necessary step before Grace may exit Chapter 11. Judge Fitzgerald confirmed the Plan after resolving all outstanding objections and finding that the Plan satisfies all applicable sections of the Bankruptcy Code, including Section 524(g). Judge Fitzgerald held that claimants in Classes 6, 7 (including both sub-classes 7A and 7B), and 8 have voted to accept the Plan in the requisite numbers and amounts required by Sections 524(g), 1126, and 1129. The Joint Plan establishes two asbestos trusts to compensate personal injury claimants and property owners. Funds for the trusts will come from a variety of sources including cash, warrants to purchase Grace common stock, deferred payment obligations, insurance proceeds and payments from successor companies. The trusts' assets and operations are designed to cover all current and future asbestos claims, according to the Debtors. The Debtors filed for bankruptcy in April 2001 because of increasing asbestos personal injury claims. They have submitted several plans of reorganizations co-proposed by different parties-in-interest since the Petition Date. The most recent plan was filed in November 2008 and incorporated settlements of the Debtors' present and future asbestos-related PI Claims. In April 2008, the Debtors reached an agreement settling all of their present and future asbestos-related PI claims for $1.8 billion. Prior to the agreement, the Debtors were involved in a series of trials to estimate their asbestos personal injury claims. Grace's experts estimated that the company's asbestos personal injury liabilities are between $385 million and $1.314 billion. The PI Committee, representing more than 100,000 asbestos claimants, said Grace's liabilities range from $4.7 billion to $6.2 billion. Pursuant to the April 2008 settlement, the asbestos trusts will be funded by: -- Cash in the amount of $250,000,000; -- Warrants to acquire 10,000,000 shares of Grace common stock at an exercise price of $17.00 per share, expiring one year from the effective date of a plan of reorganization; -- Rights to proceeds under Grace's asbestos-related insurance coverage; -- The value of cash and stock under the litigation settlement agreements with Sealed Air Corporation and Fresenius Medical Care Holdings, Inc.; and -- Deferred payments at $110,000,000 per year for five years beginning in 2019, and $100,000,000 per year for 10 years beginning in 2024; the deferred payments would be obligations of Grace backed by 50.1% of Grace's common stock to meet the requirements of Section 524(g). The Sealed Air settlement payment consists of (i) $512,500,000 in cash, plus interest accrued from Dec. 21, 2005, until the Plan's effective date, at a rate of 5.5% per annum compounded annually; and (ii) 18,000,000 shares of Sealed Air common stock. As of Jan. 31, 2011, Eastern Time, Sealed Air stocks are priced at $26.69 per share, placing a value of about $480,420,000 on the settlement pact. In a company statement, Sealed Air said it will review the Bankruptcy Court's confirmation order to ensure that the Debtors implement the Plan in a manner fully consistent with a settlement agreement signed on Nov. 20, 2003. Sealed Air added that it stands ready to contribute its payment directly to one or more of the trusts to be created under Section 524(g) once the provisions of the settlement agreement are fully met. Sealed Air noted that as of Dec. 31, 2010, its total cash payment would have been approximately $788 million, which reflects the principal settlement amount of $512.5 million and $275.5 million of accrued interest, which accrues at 5.5% per annum and is compounded annually. Sealed Air's payment to the Debtors would resolve all current and future asbestos-related, fraudulent transfer and successor claims the Debtors have against Sealed Air as a result of the Cryovac transaction with W. R. Grace in 1998. The Debtors will also fund a trust created for Canadian Zonolite Attic Insulation Claims. In a recently amended settlement, the Debtors' contribution to the Fund is increased from C$6,500,000 to C$8,595,632 in the event the U.S. Confirmation Order is entered by the U.S. Court on or before Jan. 31, 2011; and C$9,095,632 in the event that the U.S. Confirmation Order is entered by the U.S. Court after Jan. 31, 2011, but on or before July 31, 2011. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring effort. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: York, et al., File Notices of Intent to Buy Shares -------------------------------------------------------------- In separate notices, these entities notified the Court that as of Feb. 18, 2011, they beneficially own a number of shares of W.R. Grace & Co. equity securities: Jorvik Multi-Strategy Master Fund, L.P. 32,697 York Managed Holdings, LLC 70,315 Merrill Lynch Investment Solutions York Event-Driven UCITS Fund 147,347 York Multi-Strategy Master Fund, L.P. 392,510 York Capital Management L.P. 230,900 The parties also disclosed that they intend to purchase, acquire, or otherwise accumulate a certain number of shares of Grace equity securities and that as a result of the proposed transfer, if permitted, they would own an increased number of Grace equity securities shares: No. of Shares Total Shares Acquired Owned ------------- ------------ Jorvik Multi-Strategy Master Fund, L.P. 7,211 39,908 York Managed Holdings, LLC 15,566 85,881 Merrill Lynch Investment Solutions York Event-Driven UCITS Fund 40,057 187,404 York Multi-Strategy Master Fund, L.P. 86,280 478,790 York Capital Management L.P. 50,886 281,786 The Chapter 11 Plan As reported in the Feb. 3, 2011 edition of the Troubled Company Reporter, Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware approved on Jan. 31, 2011, the Joint Plan of Reorganization proposed by W.R. Grace & Co. and its debtor affiliates, the Official Committee of Equity Security Holders, the Official Committee of Asbestos-related Personal Injury Claimants, and the Future Claims Representative. Grace's Joint Plan will next be considered for confirmation by the United States District Court for the District of Delaware, a necessary step before Grace may exit Chapter 11. Judge Fitzgerald confirmed the Plan after resolving all outstanding objections and finding that the Plan satisfies all applicable sections of the Bankruptcy Code, including Section 524(g). Judge Fitzgerald held that claimants in Classes 6, 7 (including both sub-classes 7A and 7B), and 8 have voted to accept the Plan in the requisite numbers and amounts required by Sections 524(g), 1126, and 1129. The Joint Plan establishes two asbestos trusts to compensate personal injury claimants and property owners. Funds for the trusts will come from a variety of sources including cash, warrants to purchase Grace common stock, deferred payment obligations, insurance proceeds and payments from successor companies. The trusts' assets and operations are designed to cover all current and future asbestos claims, according to the Debtors. The Debtors filed for bankruptcy in April 2001 because of increasing asbestos personal injury claims. They have submitted several plans of reorganizations co-proposed by different parties-in-interest since the Petition Date. The most recent plan was filed in November 2008 and incorporated settlements of the Debtors' present and future asbestos-related PI Claims. In April 2008, the Debtors reached an agreement settling all of their present and future asbestos-related PI claims for $1.8 billion. Prior to the agreement, the Debtors were involved in a series of trials to estimate their asbestos personal injury claims. Grace's experts estimated that the company's asbestos personal injury liabilities are between $385 million and $1.314 billion. The PI Committee, representing more than 100,000 asbestos claimants, said Grace's liabilities range from $4.7 billion to $6.2 billion. Pursuant to the April 2008 settlement, the asbestos trusts will be funded by: -- Cash in the amount of $250,000,000; -- Warrants to acquire 10,000,000 shares of Grace common stock at an exercise price of $17.00 per share, expiring one year from the effective date of a plan of reorganization; -- Rights to proceeds under Grace's asbestos-related insurance coverage; -- The value of cash and stock under the litigation settlement agreements with Sealed Air Corporation and Fresenius Medical Care Holdings, Inc.; and -- Deferred payments at $110,000,000 per year for five years beginning in 2019, and $100,000,000 per year for 10 years beginning in 2024; the deferred payments would be obligations of Grace backed by 50.1% of Grace's common stock to meet the requirements of Section 524(g). The Sealed Air settlement payment consists of (i) $512,500,000 in cash, plus interest accrued from December 21, 2005 until the Plan's effective date, at a rate of 5.5% per annum compounded annually; and (ii) 18,000,000 shares of Sealed Air common stock. As of January 31, 2011, Eastern Time, Sealed Air stocks are priced at $26.69 per share, placing a value of about $480,420,000 on the settlement pact. In a company statement, Sealed Air said it will review the Bankruptcy Court's confirmation order to ensure that the Debtors implement the Plan in a manner fully consistent with a settlement agreement signed on Nov. 20, 2003. Sealed Air added that it stands ready to contribute its payment directly to one or more of the trusts to be created under Section 524(g) once the provisions of the settlement agreement are fully met. Sealed Air noted that as of Dec. 31, 2010, its total cash payment would have been approximately $788 million, which reflects the principal settlement amount of $512.5 million and $275.5 million of accrued interest, which accrues at 5.5% per annum and is compounded annually. Sealed Air's payment to the Debtors would resolve all current and future asbestos-related, fraudulent transfer and successor claims the Debtors have against Sealed Air as a result of the Cryovac transaction with W. R. Grace in 1998. The Debtors will also fund a trust created for Canadian Zonolite Attic Insulation Claims. In a recently amended settlement, the Debtors' contribution to the Fund is increased from C$6,500,000 to C$8,595,632 in the event the U.S. Confirmation Order is entered by the U.S. Court on or before Jan. 31, 2011; and C$9,095,632 in the event that the U.S. Confirmation Order is entered by the U.S. Court after Jan. 31, 2011, but on or before July 31, 2011. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring effort. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WRIGHT GROUP: Postpetition Receipts Are Not Cash Collateral ----------------------------------------------------------- WestLaw reports that any receipts from the patrons of a miniature golf course obtained by a Chapter 11 debtor-in-possession on or after its petition filing were free of any security interest held by a bank, pursuant to the bankruptcy statute providing that property acquired by the estate or the debtor postpetition was not subject to any lien resulting from a prepetition security agreement, where the transactions between the debtor and its patrons for the use of the miniature golf course were immediately closed as soon as they were effected, and so resulted in "money" as a form of collateral and generated no "proceeds." Therefore, the postpetition receipts were not "cash collateral" that the debtor had to seek consent or a court order to use. In re Wright Group, Inc., --- B.R. ----, 2011 WL 570019 (Bankr. N.D. Ind.) (Klingeberger, J.). A copy of the Honorable J. Phillip Klingeberger's 18-page Order dated Feb. 15, 2010, telling Fifth Third Bank it doesn't have rights in the Debtor's postpetition revenues is available at: http://www.innb.uscourts.gov/opinions/pdfs/2093.pdf The Wright Group, Inc., aka Zao Island, operates a miniature golf course in Valparaiso, Ind. The debtor sought chapter 11 protection (Bankr. N.D. Ind. Case No. 10-23187) on July 8, 2010, and is represented by Daniel Freeland, Esq., in Highland, Ind. At the time of the filing, the Debtor estimated its assets and debts at less than $10 million. ZEIGER CRANE: Gets Court OK to Hire Hinshaw as Bankruptcy Counsel ----------------------------------------------------------------- Zeiger Crane Rental, Inc., and Atlantic Leasing, Inc., sought and obtained authorization from the Hon. Erik P. Kimball of the U.S. Bankruptcy Court for the Southern District of Florida to employ Hinshaw & Culbertson, LLP, as bankruptcy counsel, nunc pro tunc to the Petition Date. H&C will, among other things: a. prepare motions, applications, answers, proposed orders, reports and any other papers necessary in connection with the administration of estates; b. negotiate with creditors, prepare and seek confirmation of a plan of reorganization and related documents, and assist the Debtors with implementation of any plan(s); c. assist the Debtors in the analysis, negotiation and disposition of estate assets for the benefit of the estates and their creditors; and d. negotiate and document any debtors-in-possession financing and exit financing. H&C will be paid based on the hourly rates of its professionals: Members $350-$600 Associates & of Counsel $175-$400 Paralegals $115-$180 Michael D. Seese $475 To the best of the Debtors' knowledge, H&C is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. Zeiger Crane Rental, Inc., is a nationwide crane rental company that has been operating out of Palm Beach County, Florida, since 1986. It filed for Chapter 11 bankruptcy protection on Feb. 18, 2011 (Bankr. S.D. Fla. Case No. 11-14183). The Debtor estimated its assets and debts at $10 million to $50 million. Affiliate Atlantic Leasing, Inc., filed a separate Chapter 11 petition on Feb. 18, 2011 (Bankr. S.D. Fla. Case No. 11-14185). The cases are jointly administered. Zeiger Crane is the lead case. ZEIGER CRANE: Section 341(a) Meeting Scheduled for April 8 ---------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of Zeiger Crane Rental, Inc. and Atlantic Leasing, Inc.'s creditors on April 8, 2011, at 8:30 a.m. The meeting will be held at Flagler Waterview Building, 1515 N Flagler Dr Room 870, West Palm Beach, FL 33401. 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. Zeiger Crane Rental, Inc., is a nationwide crane rental company that has been operating out of Palm Beach County, Florida, since 1986. It filed for Chapter 11 bankruptcy protection on Feb. 18, 2011 (Bankr. S.D. Fla. Case No. 11-14183). Michael D. Seese, Esq., at Hilnshaw & Culbertson LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliate Atlantic Leasing, Inc., filed a separate Chapter 11 petition on Feb. 18, 2011 (Bankr. S.D. Fla. Case No. 11-14185). The cases are jointly administered. Zeiger Crane is the lead case. ZEIGER CRANE: Asks for Court's Permission to Use Cash Collateral ---------------------------------------------------------------- Zeiger Crane Rental, Inc., et al., ask for authority from the U.S. Bankruptcy Court or the Southern District of Florida to use, on an interim basis, the cash collateral until March 20, 2011. To finance operations, the Debtors borrowed from People's United Equipment Finance, Inc., Wells Fargo Equipment Finance, Inc., FCC Equipment Financing, Inc., TCF Equipment Finance, Inc., and Kelly Tractor Corporation. As of the Petition Date, the Debtors approximately owed a total of $28.50 million to the Lenders comprising: (i) $20.70 million owed to People's; (ii) $4.90 million owed to FCC; (iii) $1.60 million owed to TCF; and $1.20 million owed to Kelly. Each of FCC, TCF and Kelly hold liens against certain equipment and proceeds, while People's holds a blanket against all remaining collateral. People's also holds a mortgage on real property owned by Dyer Road. Michael D. Seese, Esq., at Hinshaw & Culbertson, LLP, explains the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. The Debtors will use the collateral pursuant to a weekly budget, a copy of which is available for free at http://bankrupt.com/misc/ZEIGER_CRANE_budget.pdf The Debtors believe that adequate protection will be provided through the maintenance of existing collateral levels or otherwise. The Debtors also believe that the Lenders' interests are adequately protected by equity cushions measured by the amount that the value of the collateral exceeds the amount of the debt owed. According to the Debtors, there is insufficient time for a full hearing to be held before the Debtors must use cash collateral. The Debtors say that if their request isn't considered on an expedited basis, and if the Debtors are denied the ability to immediately use cash collateral, there will be a direct and immediate material and adverse impact on the continuing operation of the Debtors' businesses and on the value of their assets. People's filed on Feb. 23, 2011, an objection to the Debtors' request to use cash collateral. Zeiger Crane Rental, Inc., is a nationwide crane rental company that has been operating out of Palm Beach County, Florida, since 1986. It filed for Chapter 11 bankruptcy protection on Feb. 18, 2011 (Bankr. S.D. Fla. Case No. 11-14183). Michael D. Seese, Esq., at Hilnshaw & Culbertson LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliate Atlantic Leasing, Inc., filed a separate Chapter 11 petition on Feb. 18, 2011 (Bankr. S.D. Fla. Case No. 11-14185). The cases are jointly administered. Zeiger Crane is the lead case. * Illinois Bank Shuttered Friday; Year's Failures Now 23 -------------------------------------------------------- Valley Community Bank, St. Charles, Illinois, was closed Feb. 25 by the Illinois Department of Financial and Professional Regulation - Division of Banking, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First State Bank, Mendota, Illinois, to assume all of the deposits of Valley Community Bank. The FDIC estimates that the cost to the Deposit Insurance Fund will be $22.8 million. Valley Community Bank is the 23rd FDIC- insured institution to fail in the nation this year, and the second in Illinois. The last FDIC-insured institution closed in the state was Community First Bank-Chicago, Chicago, Illinois, on Feb. 4, 2011. Lenders are failing after the financial crisis drove down home and commercial property values and pushed the unemployment rate above 10%, 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 FDIC Cost Assets of Bank That Assumed to Insurance Closed Bank Deposits & Bought Fund Closed Bank (millions) Certain Assets (millions) ----------- ---------- ----------------- ------------ Valley Community Bank $123.8 First State Bank $22.8 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 (Mil) Number Assets (Mil) ---- ------ ------------ ------ ------------ 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 * Moody's: Stress for U.S. Public Finance Sectors Continues ----------------------------------------------------------- Rating activity in 2010 provides further evidence that the municipal market faces credit pressure not seen since the Great Depression and that credit stress is expected to continue through 2011, says Moody's Investors Service in its annual report on rating changes for the previous year. "Rating downgrades outpaced upgrades for the eighth consecutive quarter, continuing a trend that began in the third quarter of 2008," said Moody's Assistant Vice President Elizabeth Foos, author of the report, which outlines credit trends in each municipal sector, discusses key factors behind those trends, and highlights the most significant rating changes that occurred in 2010. "While many issuers in the municipal sector will continue to face pressure in 2011, we anticipate most will make the difficult choices necessary to continue to service their debt," said Ms. Foos. "While we expect payment defaults to rise, we believe that they will be isolated and not widespread." Moody's maintains a negative outlook on all major sectors, including state and local governments, higher education, housing and healthcare. "Many issuers continue to face credit pressures related to deterioration of revenue streams, growing expenditure demands, and weak balance sheets," said Ms. Foos. While most issuers managed to maintain a stable credit profile in 2010, approximately 5.5% or 750 of roughly 13,700 Moody's-rated unique obligors experienced a rating change during the year with the vast majority consisting of a one-notch change up or down. For the full year, the overall ratio of municipal upgrades to downgrades decreased to 0.5-to-1 in 2010 from 0.7-to-1 in 2009, resulting in the lowest annual ratio of municipal upgrades to downgrades in over 20 years. The ratio of municipal upgrades to downgrades based on affected par for 2010 remained very low as well at 0.3-to-1. "The ratio of upgrades to downgrades during 2010 is reflective of economic and financial challenges faced by municipal issuers that are expected to continue," said Ms. Foos. "As in 2009, the majority of rating revisions in 2010 were attributable to broad economic rather than issuer-specific credit stress." During the fourth quarter of 2010, the ratio of rating upgrades to downgrades decreased to 0.2-to-1 from the third quarter 2010 ratio of 0.5-to-1. The fourth quarter ratio remains one of the lowest recorded for this measure in at least the last five years and is significantly lower than the 1.1-to-1 ratio experienced in the first quarter of 2003, the year after the last national economic recession. The fourth quarter ratio of upgrades to downgrades based on affected par value decreased to 0.2-to-1 from 0.4-to-1 in the third quarter. While economists report that the national recession has officially ended and the U.S. economic outlook is improving, municipalities are expected to remain challenged, says the Moody's report. "Municipal issuers across all sectors are experiencing stress, which is evidenced by persistent revenue deterioration, increased spending pressures, and weakening of reserve funds," said Ms. Foos. * Moody's: Default Wave Fails to Sink Investor Recoveries --------------------------------------------------------- The wave of U.S. corporate defaults that accompanied the credit crisis and Great Recession produced average firm-wide recoveries on defaulted debt that were near historical norms and higher than the last two default cycles, Moody's Investors Service said in a new report. Recovery rates benefitted from a preponderance of distressed exchanges, which usually have higher recoveries than other types of default, and the comparatively short duration of the default wave, Moody's said. "A higher default rate typically leads to lower recoveries, but recoveries in this default cycle were surprisingly ordinary," said David Keisman, senior vice president at Moody's and author of the report. Average firm-wide recoveries were 54.7% for 136 U.S. non-financial corporate issuers that emerged from default between the fourth quarter of 2008 and the first quarter of 2011, compared with an historical average of 55.5%. In the 1990-1991 and 2001-2002 default cycles, firm-wide recoveries averaged 47.7% and 46.7%, respectively. About one in four defaults during the latest cycle were distressed exchanges, which are favored by private equity firms. The swift decline in the U.S. speculative-grade default rate, which hit 3.6% a year after peaking at 14.6% in November 2009, also bolstered recoveries. "The default wave was brutal but comparatively quick," Ms. Keisman said. "Many companies emerged from default when the default rate was relatively low and asset values were high in comparison with previous cycles. Stronger recoveries in this cycle partly reflected the shape of the default-rate curve and fortuitous timing for issuers, not a breakdown in the traditional correlation of defaults and recoveries." There are still a large number of defaulted companies that have yet to emerge, the report notes, but their recovery rates would have to be very low to meaningfully change the benign average recoveries seen so far. The report, "Hard Data for Hard Times II: The Crisis That Wasn't," is available at http://www.moodys.com/ It is an update of "Hard Data for Hard Times," a July 2010 study of investor recoveries on a smaller set of companies that had emerged from default. * S&P's 2011 Global Corporate Default Tally Remains at Three ------------------------------------------------------------ The 2011 global corporate default tally remains at three after no issuers defaulted last week, said an article published by Standard & Poor's, titled "Global Corporate Default Update (Feb. 18 - 24, 2011) (Premium)." Two of the defaults were based in the U.S., and one was based in the Czech Republic. By comparison, 17 global corporate issuers had defaulted by this time last year (14 U.S.-based issuers and one 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 defaults in 2010, 28 defaults resulted from missed interest or principal payments, 25 resulted from Chapter 11 and foreign bankruptcy filings, 23 from distressed exchanges, three from receiverships, and one each from regulatory directives and administration. * Former K&L Gates Partner Joins Dykema Gossett ----------------------------------------------- Bankruptcy Law360 reports that Dykema Gossett PLLC has continued its expansion effort in Dallas by luring a former K&L Gates LLP bankruptcy partner. Jeffrey R. Fine, who counseled the unsecured creditors' committee through the Texas Rangers Baseball Partners' restructuring, will join Dykema's Dallas bankruptcy and restructuring practice group as a member. * Trust Funds Lose Discovery Round in Asbestos Saga --------------------------------------------------- Bankruptcy Law360 reports that a Delaware bankruptcy judge said Tuesday she did not have jurisdiction to resolve discovery disputes in ongoing asbestos litigation involving Hartford Accident Indemnity Co. and other insurers of bankrupt manufacturers. Law360 relates that Judge Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware dismissed five adversary proceedings brought by several asbestos trust funds. * Turnarounds & Workouts Now Accepting People to Watch Nominations ------------------------------------------------------------------ Turnarounds & Workouts is now accepting nominations for its annual list of People to Watch. To submit a nomination, complete the form at: http://ResearchArchives.com/t/s?740a The deadline for the nominations is March 11, 2011. Send questions or comments to: Dave Buzzell Beard Group - Law and Business Publishers Phone: (240) 629-3300 E-mail: david@beard.com * Lawyer Suspended for Advising Bankrupt Judge to Misspell Name --------------------------------------------------------------- Katy Stech, writing for Dow Jones' Daily Bankruptcy Review, reports that a Louisiana legal board has banned attorney Claude Lightfoot, Esq., from practicing law for 30 days after he advised a former federal judge to misspell his own name on a personal bankruptcy petition, hoping to shield him from public attention. DBR relates Judge G. Thomas Porteous approached Mr. Lightfoot for advice in 2000 as his financial state worsened. Mr. Lightfoot came up with the suggestion to file the initial petition under "Ortous, G.T.," then amend the petition with the correct lettering. DBR relates Mr. Lightfoot's plan worked at the time of the 2001 filing, but Judge Porteous later became famous among legal circles. In December, Judge Porteous became only the eighth federal judge in history to be convicted and removed by the U.S. Senate, which had pursued corruption charges against him. For Mr. Lightfoot's actions, a Louisiana Attorney Disciplinary Board committee declared that he behaved unethically, according to a recent opinion. DBR relates the New Orleans Times-Picayune had published the inaccurate spelling, which went undetected until later. * BOND PRICING -- For Week From Feb. 21 to 25, 2011 --------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- 155 E TROPICANA 8.75% 4/1/2012 4.66 ABITIBI-CONS FIN 7.88% 8/1/2009 15.13 ADVANTA CAP TR 8.99% 12/17/2026 13.00 AHERN RENTALS 9.25% 8/15/2013 48.00 AMBAC INC 5.95% 12/5/2035 11.00 AMBAC INC 6.15% 2/7/2087 0.75 AMBAC INC 7.50% 5/1/2023 15.25 AMBAC INC 9.50% 2/15/2021 11.00 AMBASSADORS INTL 3.75% 4/15/2027 38.25 AMR CORP 10.45% 3/10/2011 97.55 BANK NEW ENGLAND 8.75% 4/1/1999 11.25 BANK NEW ENGLAND 9.88% 9/15/1999 13.00 BANKUNITED FINL 3.13% 3/1/2034 5.60 BANKUNITED FINL 6.37% 5/17/2012 6.50 BIGLARI HOL-CALL 14.00% 3/30/2015 96.00 BLOCKBUSTER INC 9.00% 9/1/2012 2.10 BOWATER INC 6.50% 6/15/2013 -- CAPMARK FINL GRP 5.88% 5/10/2012 47.00 COMPOL-CALL03/11 10.50% 7/1/2013 103.30 CS FINANCING CO 10.00% 3/15/2012 3.00 DUNE ENERGY INC 10.50% 6/1/2012 73.75 EDDIE BAUER HLDG 5.25% 4/1/2014 4.00 EVERGREEN SOLAR 4.00% 7/15/2013 35.89 FAIRPOINT COMMUN 13.13% 4/1/2018 10.38 FRIEDE GOLDMAN 4.50% 9/15/2004 0.95 GENERAL MOTORS 7.13% 7/15/2013 31.43 GENERAL MOTORS 7.70% 4/15/2016 31.00 GENERAL MOTORS 9.45% 11/1/2011 27.50 GREAT ATLA & PAC 5.13% 6/15/2011 35.13 GREAT ATLA & PAC 6.75% 12/15/2012 35.38 GREAT ATLANTIC 9.13% 12/15/2011 33.00 HARRY & DAVID OP 9.00% 3/1/2013 40.50 HOV-CALL03/11 8.00% 4/1/2012 100.00 LEHMAN BROS HLDG 1.50% 3/23/2012 22.88 LEHMAN BROS HLDG 4.50% 8/3/2011 21.34 LEHMAN BROS HLDG 4.70% 3/6/2013 22.50 LEHMAN BROS HLDG 4.80% 2/27/2013 22.50 LEHMAN BROS HLDG 4.80% 3/13/2014 24.25 LEHMAN BROS HLDG 5.00% 1/22/2013 22.75 LEHMAN BROS HLDG 5.00% 2/11/2013 23.75 LEHMAN BROS HLDG 5.00% 3/27/2013 21.50 LEHMAN BROS HLDG 5.00% 8/5/2015 23.00 LEHMAN BROS HLDG 5.10% 1/28/2013 22.25 LEHMAN BROS HLDG 5.15% 2/4/2015 23.38 LEHMAN BROS HLDG 5.25% 2/6/2012 24.00 LEHMAN BROS HLDG 5.25% 2/11/2015 22.50 LEHMAN BROS HLDG 5.50% 4/4/2016 24.00 LEHMAN BROS HLDG 5.63% 1/24/2013 26.13 LEHMAN BROS HLDG 5.75% 7/18/2011 25.63 LEHMAN BROS HLDG 5.75% 5/17/2013 22.75 LEHMAN BROS HLDG 5.75% 1/3/2017 0.01 LEHMAN BROS HLDG 6.00% 7/19/2012 25.63 LEHMAN BROS HLDG 6.00% 6/26/2015 23.75 LEHMAN BROS HLDG 6.00% 12/18/2015 23.10 LEHMAN BROS HLDG 6.20% 9/26/2014 26.00 LEHMAN BROS HLDG 6.63% 1/18/2012 26.13 LEHMAN BROS HLDG 7.00% 4/16/2019 19.00 LEHMAN BROS HLDG 8.00% 3/5/2022 21.75 LEHMAN BROS HLDG 8.50% 8/1/2015 23.75 LEHMAN BROS HLDG 8.75% 12/21/2021 22.50 LEHMAN BROS HLDG 8.80% 3/1/2015 24.75 LEHMAN BROS HLDG 8.92% 2/16/2017 23.88 LEHMAN BROS HLDG 9.00% 3/7/2023 21.75 LEHMAN BROS HLDG 9.50% 12/28/2022 23.50 LEHMAN BROS HLDG 9.50% 1/30/2023 22.50 LEHMAN BROS HLDG 9.50% 2/27/2023 21.20 LEHMAN BROS HLDG 10.00% 3/13/2023 23.75 LEHMAN BROS HLDG 10.38% 5/24/2024 23.75 LEHMAN BROS HLDG 11.00% 6/22/2022 22.51 LEHMAN BROS HLDG 11.00% 3/17/2028 23.75 LEHMAN BROS HLDG 18.00% 7/14/2023 22.50 LEHMAN BROS INC 7.50% 8/1/2026 15.00 LOCAL INSIGHT 11.00% 12/1/2017 4.00 LTX-CREDENCE 3.50% 5/15/2011 90.00 MAGNA ENTERTAINM 7.25% 12/15/2009 3.00 MAJESTIC STAR 9.75% 1/15/2011 22.25 MOHEGAN TRIBAL 8.38% 7/1/2011 59.00 NEWPAGE CORP 10.00% 5/1/2012 66.25 NEWPAGE CORP 12.00% 5/1/2013 32.50 NRGY-CALL03/11 8.25% 3/1/2016 104.10 RASER TECH INC 8.00% 4/1/2013 35.00 RESTAURANT CO 10.00% 10/1/2013 8.25 RESTAURANT CO 10.00% 10/1/2013 8.50 RYERSON TULL INC 8.25% 12/15/2011 65.02 SBARRO INC 10.38% 2/1/2015 30.00 SPHERIS INC 11.00% 12/15/2012 1.50 THORNBURG MTG 8.00% 5/15/2013 3.25 TIMES MIRROR CO 7.25% 3/1/2013 35.00 TOUSA INC 9.00% 7/1/2010 13.50 TRANS-LUX CORP 8.25% 3/1/2012 18.63 TRICO MARINE 3.00% 1/15/2027 9.25 TRICO MARINE SER 8.13% 2/1/2013 10.25 UAL-CALL03/11 5.00% 2/1/2021 100.00 VIRGIN RIVER CAS 9.00% 1/15/2012 50.00 WASH MUT BANK FA 5.13% 1/15/2015 0.25 WCI COMMUNITIES 4.00% 8/5/2023 1.30 WOLVERINE TUBE 15.00% 3/31/2012 36.00 ********* 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 ***