/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110629.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, June 29, 2011, Vol. 15, No. 178 Headlines 3900 BISCAYNE: Objects to BB&T Plea to Proceed With Foreclosure 3900 BISCAYNE: Wants Access to BB&T Cash Collateral to Fund Case 3900 BISCAYNE: Files Plan Outline; Creditors to Be Paid Over Time ALLEN FAMILY: Judge OKs Mountaire-Led Auction on July 25 ALLEN FAMILY: Sec. 341 Creditors' Meeting Set for July 13 ALLEN FAMILY: Taps Epiq as Claims and Noticing Agent ALLEN FAMILY: U.S. Trustee Appoints 7-Member Committee AMERCABLE INC: Moody's Cuts Corporate to 'Caa1'; Outlook Negative AMIDEE CAPITAL: To Sell Ashworth and Reba Lane Properties APEX DIGITAL: Lewis Brisbois to Handle Case vs. Marketing Plus APPLIED MINERALS: Sells 1.25 Million Common Shares ARK DEVELOPMENT: U.S. Trustee Unable to Form Committee ATEX CORPORATION: Case Summary & 18 Largest Unsecured Creditors AUSTIN HOUSING: Moody's Cuts Rating on Revenue Bonds to 'Ca' BENTLEY SYSTEMS: S&P Assigns 'BB-' Corporate Credit Rating BOSTON MEN'S: Case Summary & 20 Largest Unsecured Creditors CABI SMA: Disclosure Statement Hearing Today CALAIS RESOURCES: Brigus Extends Forbearance Until Oct. 31 CARGO TRANSPORTATION: Agreement to Pay Estes Express Claim OK'd CATHOLIC CHURCH: Wilm. Lay Panel Has Ok for P. Hamilton Hiring CATHOLIC CHURCH: Milwaukee Defends Bar Date Notice CATHOLIC CHURCH: Milw. Opposes Creditors' Deposition Request CATHOLIC CHURCH: Milw. Mediation Participants Complaining CB HOLDINGS: Plan Filing Exclusivity Extended Until Sept. 13 CHRISTIAN BROTHERS: Agrees on Adequate Protection for County Bank CITRUS VALLEY: Moody's Affirms 'Ba2' Revenue Bond Rating CONTESSA PREMIUM: Hearing on Real Property Sale Today CONTESSA PREMIUM: Cash Collateral Use Has Sale Milestones CORDIA COMMUNICATIONS: Has Access to Cash Collateral Until Aug. 1 CREATIVE MANAGEMENT: Case Summary & 7 Largest Unsecured Creditors DALLAS STARS: Said to Be Preparing Bankruptcy to Push Sale DELTA AIR: Fitch Affirms Rating on Class B Certificates at 'B' DETROIT, MICHIGAN: Fitch Downgrades Rating on LTGOs to 'B+' DISCOUNT EXPRESS: Case Summary & 20 Largest Unsecured Creditors DODDS ELLIOT: Voluntary Chapter 11 Case Summary DOMTAR CORP: Moody's Raises Sr. Unsecured Debt Rating From 'Ba2' EAGLES CREST: Combined Plan Hearing Scheduled for Aug. 1 ECHO EXECUTIVE: Case Summary & 18 Largest Unsecured Creditors ENRON CORP: ING Wins Appeal in Commercial Paper Litigation EPICEPT CORP: Proposal to Effect Reverse Stock Split Approved EXTENDED STAY: No Disbursements for February to May EXTENDED STAY: Creditors' Trust to Get Docs. Collected by Examiner EXTENDED STAY: Starwood Dismisses Appeal on Reimbursement Order FIRST FEDERAL: Completes $8.7 Million Common Stock Offering FIRST INDUSTRIAL: Fitch Upgrades Issuer Default Rating to 'BB' FLORIDA EXTRUDERS: Benada Acquires Assets of Debtor and BAF FRONTIER COMMUNICATIONS: Moody's Affirms 'Ba2' Corp. Family Rating GARDENS OF GRAPEVINE: Sues BB&T, et al. to Protect R. Palmeiro GARDENS OF GRAPEVINE: Taps Parkway Realtors as Real Estate Broker GARDENS OF GRAPEVINE: Taps Wright Ginsberg to Represent Case GARDENS OF GRAPEVINE: To Sell Property to Lincoln for $6.9-Mil. GARLOCK SEALING: Seeks Approval of Voluntary Severance Program GENERAL GROWTH: New GGP Completes $743-Mil. Refinancing of 5 Malls GENERAL GROWTH: Court Rules in CRF's Favor on $12-Mil. Cure Claim GENERAL GROWTH: Rouse Gets Favorable Ruling in PI Suit GIORDANO'S ENTERPRISES: Popowcer Katten Retained as Accountants GIORDANO'S ENTERPRISES: William Blair Hired as Investment Banker GIORDANO'S ENTERPRISES: Quarles & Brady to Represent Trustee GIORDANO'S ENTERPRISES: William Dart Retained for Tax Appeals GM PINE: Case Summary & 11 Largest Unsecured Creditors GREENWOOD ESTATES: Stay Modified to Allow Capmark to Foreclose GREENWOOD VILLAGE: Fitch Affirms 'BB+' Rating on Revenue Bonds GTP ACQUISITION: Fitch Expects to Rate Class F Notes at 'BB-' GTP ACQUISITION: Moody's Assigns P(Ba3) Rating to Class F Notes HAMPTON ROADS: To be Added to Russell 3000/Russell Global Indexes HARRY & DAVID: Gets Clearance to Send Ch. 11 Plan Out for Vote HEARUSA INC: U.S. Trustee Appoints Equity Committee HERITAGE CONSOLIDATED: Wants Munsch Hardt as General Counsel HILLSIDE VALLEY: Case Summary & 16 Largest Unsecured Creditors HMV GROUP: Sells Canadian Arm to Hilco UK for $3.2-Mil. HORIZON LINES: Gets Covenant Relief to Push for Refinancing HORIZON LINES: Extends Subscription Deadline to July 1 JACKSON HEWITT: Can Access Cash Collateral Until July 1 JAED DINING: Case Summary & 15 Largest Unsecured Creditors KANSAS CITY: S&P Keeps 'BB' Corp. Credit Rating; Outlook Stable LEHMAN BROTHERS: $1.31-Bil. Paid to Advisors in 2.5-Year Case LEHMAN BROTHERS: Barclays Opposes Judgment for $500-Mil. Claim LEHMAN BROTHERS: Goldman, et al., Oppose New Rule 2019 Rules LEHMAN BROTHERS: Gets 9-Month Stay for $3-Bil. Lawsuits LEHMAN BROTHERS: LBI Wins OK of $861-Mil. Deal With JPM LEHMAN BROTHERS: Merrill Wants Subordination Agreement Followed LES RESSOURCES: Nuinsco Acquires Assets; SDBJ Backs Out LIBERTY MEDIA: Fitch Upgrades IDR to 'BB'; Outlook Stable LOS ANGELES DODGERS: Wins Interim Approval of Highbridge DIP Loan LYRTECH INC: Finexcorp Intends to Enforce Security MAJESTIC TOWERS: Court OKs Steckbauer Weinhart as Special Counsel MAJESTIC TOWERS: Taps JWM CPA & Company as Accountant MAJESTIC TOWERS: To Appoint Joseph Herman as Employment Counsel MCMONIGLE RESIDENTIAL: Case Summary & 20 Largest Unsec. Creditors MDC HOLDINGS: S&P Cuts CCR to BB+ on Weak Spring Selling Season MERIT GROUP: Court Approves McCarth Law as Panel's Co-Counsel MERIT GROUP: Files Schedules of Assets and Liabilities MPB HOLDINGS: Case Summary & 10 Largest Unsecured Creditors NEBRASKA BOOK: To File Plan Documents "Within A Few Days" NEBRASKA BOOK: Taps Kurtzman Carson as Claims Agent NEBRASKA BOOK: Moody's Cuts Senior Secured Notes to 'Caa2' NEBRASKA BOOK: S&P Lowers Ratings on Debt Issues to 'D' NEWLAND INT'L: Fitch Cuts Rating on Senior Secured Notes to 'B-' NOVA CHEMICALS: Fitch Upgrades Issuer Default Rating to 'BB-' ONE PELICAN: Files Schedules of Assets & Liabilities ORANGE COUNTY EMPLOYEES: Head Sentenced to 3 Years in Prison ORLANDO, FLA: Fitch Affirms 'B' Rating on TDT Revenue Bonds PARMALAT S.P.A.: Grant Thornton Wants Suit Tried in Federal Court PARMALAT S.P.A.: Lazio Court Upholds Enforcement Proceedings PEGASUS RURAL: Court Approves Epiq Hiring as Claims Agent PEGASUS RURAL: Taps Elliott Greenleaf as Bankruptcy Counsel PEGASUS RURAL: Hiring NHB Advisors as Financial Advisors PEGASUS RURAL: Final Hearing on $1.6-Mil. DIP Loan on Sept. 8 PERKINS & MARIE: U.S. Trustee Appoints Creditors Committee PLATINUM PROPERTIES: Gets Court OK for Ordinary Course Lot Sales PLATINUM PROPERTIES: Wants to Sell 2 Properties to Lender PURSELL HOLDINGS: Court OKs Stipulation on Cash Collateral Use PURSELL HOLDINGS: Wants Until Sept. 6 to File Chapter 11 Plan PURSELL HOLDINGS: Wants to Hire Cassidy Turley as Leasing Agent RAILAMERICA INC: S&P Upgrades Corporate Credit Rating to 'BB-' RAISSI REAL ESTATE: Lender Gets Assets; Ch. 11 Case Dismissed REPUBLIC MORTGAGE: S&P Lowers Financial Strength Rating to 'BB+' ROBB & STUCKY: Lease Decision Period Extended to July 25 ROTECH HEALTHCARE: Five Directors Elected at Annual Meeting SCI REAL ESTATE: Wants More Exclusivity, Hopes for Consensual Plan SCI REAL ESTATE: Wants Until Sept. 9 to Decide on Leases SCI REAL ESTATE: Court OKs Levene Neale as Committee's Counsel SHELBRAN INVESTMENTS: Taps Marshall McIntyre as Property Appraiser SHILO INN SEASIDE: Status Conference Set for July 21 SHILO INN SEASIDE: Sec. 341 Creditors' Meeting Set for July 18 SHORE HOUSE: Case Summary & 20 Largest Unsecured Creditors SIGNATURE STYLES: Creditors Seek Louder Voice in 'Tainted' Sale SIGNATURE STYLES: Gets Nod to Employ Epiq as Claims Agent SIGNATURE STYLES: Taps Western Reserve as Investment Banker SOVRAN LLC: Case Summary & 5 Largest Unsecured Creditors SPECIALTY TRUST: Odyssey Capital OK'd to Tabulate Plan Ballots SWADENER INVESTMENT: Wants Time for Plan; Talks Not Yet Complete SYMPHONYIRI GROUP: S&P Assigns 'B+' Corporate Credit Rating TASANN TING: Ordered to Pay $10,000 More to Lender TERRESTAR NETWORKS: February Debtors OK'd to Employ Deloitte Tax TERRESTAR NETWORKS: CIBC World Approved as Financial Advisors TOLL BROTHERS: S&P Lowers Corporate Credit Rating to 'BB+' TOLL ROAD: Moody's Downgrades Underlying Rating to 'Ba1' ULTERRA HOLDINGS: S&P Raises Senior Secured Debt Rating to 'B' UNITED RENTALS: S&P Affirms 'B' Corporate Credit Rating URBAN WEST: Wants Exclusive Plan Filing Period Extended to Nov. 4 US AIRWAYS: CEO's Compensation Rose to $2.8 Million Last Year US AIRWAYS: Investors Approve Six Proposals at Annual Meeting US AIRWAYS: S&P Rates Class C Pass-Through Certificates at 'B' US AIRWAYS: S&P Rates $94.283MM Class B Certificates at 'B+' VEC LIQUIDATING: Seek Return of 35% Cash Flow of Canadian Assets WARNACO INC: Moody's Affirms Corporate Family Rating at 'Ba1' WATERSONG APARTMENTS: Files Schedules of Assets and Liabilities WATERSONG APARTMENTS: Taps Reeder Law as Insolvency Counsel WILLIAM COS: Fitch Puts 'BB' Debenture Rating on Negative Watch WILHITE ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors WINGATE AIRPORT: Court Declares Wyndham Hotel a S.A.R.E. WOLVERINE TUBE: Emerges From Chapter 11 Bankruptcy * Burleson LLP Adds 25 Attorneys to Texas, Pennsylvania Offices * William Blair & Company Adds Two Professionals to SSR Group * Upcoming Meetings, Conferences and Seminars ********* 3900 BISCAYNE: Objects to BB&T Plea to Proceed With Foreclosure --------------------------------------------------------------- Branch Banking & Trust Company is asking the U.S. Bankruptcy Court for the Southern District of Florida for complete relief from stay, to take any and all steps necessary to exercise any and all rights it may have in 3900 Biscayne LLC's real property and allow it to proceed with a foreclosure action. In the alternative, BB&T seeks adequate protection payments with respect to its collateral property. As reported in the TCR on June 6, 2011, BB&T, successor in interest to Colonial Bank, holds a first lien priority mortgage and assignment of rents and profits from the real property located at 3900 Biscayne Blvd., Miami, Florida. The cash collateral and all other assets were pledged to BB&T as security for the amounts advanced pursuant to the note. As of the Petition Date, BB&T is owed the principal amount of $10,800,000, together with accrued interest, fees, costs and all other sums recoverable under the terms of the note. The Debtor, according to BB&T, defaulted on the Note by, without limitation, failing to make payment of the debt as the debt matured in May 2010, failing to pay real property taxes on the real property for the year 2009, and otherwise failing to comply with the terms of the loan documents. On Sept. 13, 2010, BB&T filed a mortgage foreclosure action against the Debtor, among others, in the U.S. District Court for the Southern District of Florida, which was assigned case No. 10- CV-23279-MGC, seeking to (a) foreclose its interest in the Real Property, (b) enforcement of an assignment of rents, and (c) money damages under certain loan documents, as to a business loan in the original principal sum of $10,800,000, among other things. BB&T also filed a breach of contract action against the Debtor, among others, in the United Stated District Court for the Southern District of Florida, which was assigned case No. 10-CV-23297, as to a separate business loan in the principal sum of $675,000. The bankruptcy petition was filed one day before the hearing on BB&T's Motion for Turnover of Rents in the Foreclosure Action and after an impasse at mediation held on April 27, 2011. 3900 Biscayne LLC asks the Court to deny BB&T's request to lift the automatic stay. James C. Moon, Esq., at Meland Russin & Budwick P.A., in Miami, Florida, contends that the Request is premised nearly entirely upon the misplaced argument that it is not adequately protected. He explains that BB&T has been granted replacement liens on its cash collateral and will also receive monthly interest payments as provided in the budget attached to the Debtor's request to obtain cash collateral. The Debtor has not only met, but exceeded, the requirements of Section 362(d)(3) of the Bankuptcy Code, applicable to single asset real estate cases like the Debtor's, because the Debtor will (1) file its plan of reorganization well before the 90 day period required by Section 362(d)(3), and (2) pay monthly interest payments to BB&T assuming Court approval of the Debtor's Cash Collateral Motion. About 3900 Biscayne, LLC 3900 Biscayne, LLC, is a Florida limited liability company which owns real property located at 3900 Biscayne, in Miami, currently leased to Miami Arts, Inc., a tuition-free public charter school offering college-preparatory academic curriculum and conservatory- style training in the visual and performing arts. The Company filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 11-22948) on May 12, 2011, in Miami, Florida. Judge A. Jay Cristol presides over the case. James C. Moon, Esq., and Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Florida, represent the Debtor in its Chapter 11 effort. The Debtor disclosed $14,857,484 in total assets and $13,691,533 in total liabilities as of the Chapter 11 filing. 3900 BISCAYNE: Wants Access to BB&T Cash Collateral to Fund Case ---------------------------------------------------------------- 3900 Biscayne, LLC, asks the U.S. Bankruptcy Court for the Southern District of Florida for authorization to use cash collateral of Branch Banking and Trust Company to the extent of available cash to fund its current operational needs and to make a one time payment for the Phase II Tenant Build-Out in the amount of $55,000. As proposed by the Debtor, the authority to use cash collateral will expire upon conversion of the case to Chapter 7. As adequate protection, BB&T will be granted an administrative expense claim pursuant to Sections 507 and 503 of the Bankruptcy Code and, nunc pro tunc to the Petition Date, a replacement lien in all post-petition collateral. In addition, the Debtor will pay market rate interest payments at the rate of 2.49% monthly as further adequate protection as specifically set forth in the Budget. As reported in the TCR on June 6, 2011, BB&T, successor in interest to Colonial Bank, holds a first lien priority mortgage and assignment of rents and profits from the real property located at 3900 Biscayne Blvd., Miami, Florida. The cash collateral and all other assets were pledged to BB&T as security for the amounts advanced pursuant to the note. As of the Petition Date, BB&T is owed the principal amount of $10,800,000, together with accrued interest, fees, costs and all other sums recoverable under the terms of the note. As reported in the Troubled Company Reporter on May 26, 2011, BB&T asked the Court to prohibit the Debtor from using the bank's cash collateral. BB&T also requests adequate protection payments, replacement liens, a proper accounting and preservation of the estate's assets including proceeds from any source and kind. According to BB&T, the value of the Debtor's real property is of insufficient value to secure BB&T's debt. About 3900 Biscayne, LLC 3900 Biscayne, LLC, is a Florida limited liability company which owns real property located at 3900 Biscayne, in Miami, currently leased to Miami Arts, Inc., a tuition-free public charter school offering college-preparatory academic curriculum and conservatory- style training in the visual and performing arts. The Company filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 11-22948) on May 12, 2011, in Miami, Florida. Judge A. Jay Cristol presides over the case. James C. Moon, Esq., and Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, represent the Debtor in its Chapter 11 effort. The Debtor disclosed $14,857,484 in total assets and $13,691,533 in total liabilities as of the Chapter 11 filing. 3900 BISCAYNE: Files Plan Outline; Creditors to Be Paid Over Time ----------------------------------------------------------------- 3900 Biscayne, LLC, last week filed with the U.S. Bankruptcy Court for the Southern District of Florida a proposed plan of reorganization and an explanatory disclosure statement. Under the Plan, Branch Banking and Trust Company's allowed secured claim arising out of a note in the principal amount of $10,800,000 will be paid in full, including note rate interest, with a 25-year amortization and a 4-year balloon. To the extent that the Debtor's rental income and the proceeds from the "third party litigation claims" are insufficient to pay BB&T's claim, the deficiency will be treated as an unsecured claim. Holders of allowed general unsecured claims will be paid in full within 4 years from the Effective Date. Holders of equity interests will retain their interests. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/3900biscayne.DS.pdf About 3900 Biscayne, LLC 3900 Biscayne, LLC, is a Florida limited liability company which owns real property located at 3900 Biscayne, in Miami, currently leased to Miami Arts, Inc., a tuition-free public charter school offering college-preparatory academic curriculum and conservatory- style training in the visual and performing arts. The Company filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 11-22948) on May 12, 2011, in Miami, Florida. Judge A. Jay Cristol presides over the case. James C. Moon, Esq., and Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, represent the Debtor in its Chapter 11 effort. The Debtor disclosed $14,857,484 in total assets and $13,691,533 in total liabilities as of the Chapter 11 filing. ALLEN FAMILY: Judge OKs Mountaire-Led Auction on July 25 -------------------------------------------------------- Dow Jones' DBR Small Cap reports that a bankruptcy judge approved Delaware poultry producer Allen Family Foods Inc.'s plan to sell itself at auction, setting the event for July 25 and allowing rival chicken processor Mountaire Farms of Delaware Inc. to put forth the first $30 million bid. As reported in the June 24, 2011 edition of the Troubled Company Reporter, Mountaire Farms Inc. has a purchase agreement to buy most assets of local competitor Allen Family Foods, absent higher and better bidders at an auction. Seaford Milling Co., a newly formed affiliate of Mountaire Farms of Delaware Inc., would buy Allen hatcheries in Seaford and Dagsboro, the Seaford administrative office, a Seaford feed mill, processing plants in Harbeson and Cordova and a rendering plant called JCR Enterprises in Linkwood. According to the motion, certain other valuable assets like broiler growout farms, receivables and 3,437 acres of farmland, are excluded in the $30 million sale to Seaford Milling. The Debtors believe that their proposed going-concern sale of their businesses and assets through the Chapter 11 cases, subject to a competitive sale process and the solicitation of higher and otherwise better offers, is the surest way to (i) allow them to maintain liquidity and ensure the continuity of their operations, (ii) avoid significant deterioration in the value of their assets that would likely occur absent the expeditious consummation of a sale, and (iii) maximize recoveries to creditors. Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, contends that the Debtors' businesses are of a type that cannot endure a prolonged stay in Chapter 11 without significant risk to their survival. Accordingly, he insists that a prompt sale is essential to a successful result in the Chapter 11 cases. About Allen Family Foods Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry company. Allen Family Foods, along with two affiliates, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-11764) on June 9, 2011. It estimated assets and liabilities between $50 million and $100 million in its petition. Affiliates that filed separate Chapter 11 petitions are Allen's Hatchery Inc. and JCR Enterprises Inc. Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. BMO Capital Markets is the Debtors' investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. ALLEN FAMILY: Sec. 341 Creditors' Meeting Set for July 13 --------------------------------------------------------- Roberta DeAngelis, the U.S. Trustee for Region 3, will convene a meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code in the bankruptcy cases of Allen Family Foods, Inc., et al., on July 13, 2011, at 11:00 a.m., at J. Caleb Boggs Federal Building, 5th Floor, Room 5209, 844 King Street, Suite 2207, Lockbox 35, in Wilmington, Delaware. About Allen Family Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry company. Allen Family Foods, along with two affiliates, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-11764) on June 9, 2011. It estimated assets and liabilities between $50 million and $100 million in its petition. Affiliates that filed separate Chapter 11 petitions are Allen's Hatchery Inc. and JCR Enterprises Inc. Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. BMO Capital Markets is the Debtors' investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. ALLEN FAMILY: Taps Epiq as Claims and Noticing Agent ---------------------------------------------------- Allen Family Foods, Inc., and its affiliated debtors sought and obtained the U.S. Bankruptcy Court for the District of Delaware's permission to employ Epiq Bankruptcy Solutions LLC as their official claims, noticing and balloting agent, nunc pro tunc to the Petition Date. The Court also approved the indemnification provisions of the parties' employment agreement subject to certain clarifications. As Claims Agent, Epiq has agreed to (i) perform certain noticing functions, (ii) assist the Debtors in analyzing and reconciling proofs of claim filed against the bankruptcy estates, and (iii) assist the Debtors in balloting in connection with any proposed Chapter 11 plan. Epiq will be paid according to its standard compensation set in the parties' agreement. The Debtors will also reimburse Epiq for any reasonable out-of-pocket expenses. The Debtors have provided Epiq a retainer for $25,000, which is to be applied first to prepetition fees and expenses incurred in connection with the bankruptcy cases and then to subsequent bills for postpetition fees and expenses. Edward J. Kosmowski of Epiq has assured the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Allen Family Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry company. Allen Family Foods, along with two affiliates, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-11764) on June 9, 2011. It estimated assets and liabilities between $50 million and $100 million in its petition. Affiliates that filed separate Chapter 11 petitions are Allen's Hatchery Inc. and JCR Enterprises Inc. Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. BMO Capital Markets is the Debtors' investment banker. Epiq Systems, Inc., is the claims and notice agent. ALLEN FAMILY: U.S. Trustee Appoints 7-Member Committee ------------------------------------------------------ Roberta DeAngelis, U.S. Trustee for Region 3, appointed seven creditors to serve on an Official Committee of Unsecured Creditors in the bankruptcy cases of Allen Family Foods, Inc. and its affiliated debtors. The Committee members are: 1. Amick Farms, LLC Attn: Marcus Miller 2079 Batesburg Highway Batesburg SC 29006, Tel: (803) 532-1400 Fax: (803) 332-1705 2. Interstate Corrpack LLC, dba Interstate Container Attn: Pete Bugas 903 Woods Road Cambridge, MD 21613 Tel: (410) 221-7777 Fax: (410) 221-7766 3. Novus International Inc. Attn: Gerald Sahd 20 Research Park Drive St. Cloud, MO 63304 Tel: (636) 926-7415 Fax: (314) 576-6041 4. Archer Daniel Midland Company Attn: Larry Bostick 4666 Faries Parkway, PO Box 1470 Decatur, IL 62526 Tel: (217) 424-5200 Fax: (217) 424-6187 5. Wye Mills Grain Attn: Mike Mihavetz PO Box 340 Preston, MO 21655 Tel: (410) 673-7123 Fax: (410) 673-2374 6. Tri-Gas & Oil Co. Inc. Attn: Keith McMahan 3941 Federalburg Highway, PO Box 465 Federalsburg, MD 21632 Tel: (410) 754-2000 Fax: (410) 754-1015 7. Enviro-Organic Technologies Inc. Attn: Phil Snader 2323 Marston Road, PO Box 600 New Windsor, MD 21776 Tel: (410) 635-3170 Fax: (410) 645-4150 About Allen Family Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry company. Allen Family Foods, along with two affiliates, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-11764) on June 9, 2011. It estimated assets and liabilities between $50 million and $100 million in its petition. Affiliates that filed separate Chapter 11 petitions are Allen's Hatchery Inc. and JCR Enterprises Inc. Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. BMO Capital Markets is the Debtors' investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. AMERCABLE INC: Moody's Cuts Corporate to 'Caa1'; Outlook Negative ----------------------------------------------------------------- Moody's Investors Service lowered AmerCable Incorporated's corporate family rating and probability of default rating to Caa1 from B3, and the ratings on the first lien senior secured credit facilities to B3 from B2. The ratings outlook remains negative. Ratings downgraded: -- Corporate family rating to Caa1 from B3; -- Probability-of-default rating to Caa1 from B3; -- $15 million senior secured revolving credit facility due 2012 to B3 (LGD3, 38%) from B2 (LGD3, 38%); -- $84 million senior secured term loan due 2014 to B3 (LGD3, 38%) from B2 (LGD3, 38%). RATINGS RATIONALE The ratings downgrade reflects earnings pressure stemming from increases in the price of non-copper materials. As such, EBITDA has declined on a year-over-year basis in recent quarters, resulting in very limited cushion under the leverage ratio governing the first lien senior secured credit facilities. Combined with a pending stepdown in the September 2011 quarter, Moody's is concerned over the company's ability to maintain compliance with financial covenants. The downgrade also reflects heightened refinancing risk with the $15 million revolving credit facility maturing on June 29, 2012. However, the rating considers the potential for improved operating performance in the second half of 2011 due to volume growth in oil & gas products and recently implemented price increases, as well as the sponsor's contribution of cure equity that has resulted in compliance to date. AmerCable's Caa1 corporate family rating reflects its weak liquidity due to limited cushion under the financial covenants governing the senior secured credit facilities, refinancing risk, high leverage with debt to EBITDA of approximately 6.5 times adjusting for FIFO inventories, modest interest coverage, and negative volume trends in the oil & gas segment. The rating also considers the company's limited free cash flow generation, small scale, the cyclical nature of its end-markets, and exposure to increases in the price of non-copper materials. While the company is largely protected from increases in copper prices due to pass through arrangements with customers, it does not have such arrangements for non-copper materials. However, the rating derives limited support from AmerCable's niche position in North American markets for cabling products, strong technical capabilities designing products for severe operating environments, modest maintenance capital expenditures, a large portion of recurring MRO sales, and favorable volume trends in its largest segment, mining. The negative outlook reflects the concern that elevated non-copper raw material costs will continue to pressure AmerCable's earnings and challenge its ability to comply with the financial covenants governing the credit facility. The outlook also captures refinancing risk in the form of the revolving credit facility maturing on June 29, 2012. The ratings could be downgraded if AmerCable is unable to maintain compliance with financial covenants and/or if it appears likely that it will be unable to refinance pending debt maturities. In addition, any potential action that is perceived as a distressed exchange could also result in a ratings downgrade. Barring an exogenous event, an upgrade over the near-term is unlikely given the negative outlook. However, Moody's could revise the outlook to stable if AmerCable improves its liquidity profile by expanding covenant cushion and extending the revolving credit facility maturity date. The principal methodology used in rating AmerCable Incorporated was the Global Manufacturing Industry Industry Methodology, published December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA, published June 2009 (and/or) the Government-Related Issuers methodology,published July 2010. Headquartered in El Dorado, Arkansas, AmerCable develops, manufactures and sells highly engineered, jacketed electrical cable products, cable assemblies and customer-driven solutions for power, control and instrumentation applications used in severe operating environments. AMIDEE CAPITAL: To Sell Ashworth and Reba Lane Properties --------------------------------------------------------- Amidee Capital Group, Inc. and its debtor affiliates sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of Texas to sell a real property located at Lot TR 6B, Block ABST 117 of Harris County, with the local address of 0 Ashworth Street, Houston, Texas 77016 and raw land located at Lot 58 of Perpetual Oil Co. Addition, City of Huffman in Harris County, with a local address of 0 Reba Lane, Houston, Texas 77336. The Ashworth Property will be sold to Daniel Saldivar for $28,500 while the Reba Property will be sold to Andrea Tran for $2,000. In addition, the Court ruled that upon the closing of the sales, the Debtors are authorized and directed to apply the net sales proceeds from the sale of the Properties to pay these claims in full: (i) all pre- and postpetition ad valorem property taxes that attach to the Properties as pro-rated through the date of closing of the sale; (ii) all closing costs; and (iii) the commission of Camelot Realty Group, the company that marketed the Properties. About Amidee Capital Houston, Texas-based Amidee Capital Group, Inc., is a Texas corporation formed in 2003 to acquire, renovate, operate and resell real property. Amidee Capital filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 10-20041) on Jan. 17, 2010. Matthew S. Okin, Esq., Sara Mya Keith, Esq., at Okin Adams & Kilmer LLP, in Houston, represent the Debtors as counsel. Amidee Capital estimated $10 million to $50 million in assets and debts in its Chapter 11 petition. The Company's affiliates -- Amidee 2006 Preferred Real Estate Income Program, Ltd., et al. -- filed separate Chapter 11 petitions. Matthew Scott Okin, Esq., at Okin Adams & Kilmer LLP, represents the Debtors. APEX DIGITAL: Lewis Brisbois to Handle Case vs. Marketing Plus -------------------------------------------------------------- Apex Digital, Inc., asks the U.S. Bankruptcy Court for the Central District of California for permission to employ Lewis Brisbois Bisgaard & Smith LLP as special counsel. Lewis will act as corporate counsel to handle various corporate matters as they arise during the Debtor's case. Lewis will also represent the Debtor in connection with the prosecution of the Debtor's pending case against Marketing Plus. The case against Marketing Plus is ending in the Circuit Court of Cook Count located in Chicago, Illinois. The hourly rates of Lewis' personnel are: Senior Partner $275 Partner $250 Senior Associate $225 Associate $200 Paralegal/Law Clerk $125 The professionals with primary responsibility in the Debtor's case are: Siobhan M. Murphy $275 Michael H. Carter $275 As of the Petition Date, the Debtor owed $1,764 to Lewis. Lewis received a postpetition retainer of $2,500. To the best of the Debtor's knowledge, Lewis is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Apex Digital Walnut, California-based Apex Digital, Inc. -- aka AW XEPA Technologies Inc., AW Apex R&D Shangai, AW Apex, AW E2Go, AW Entertainment to Go -- is a privately held company that provides and markets consumer electronics, including high-definition LCD televisions, home entertainment media devices, solar powered lights and digital set top boxes. Apex Digital filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 10-44406) on Aug. 17, 2010. Juliet Y. Oh, Esq., in Los Angeles, California, represents the Debtor. The Debtor estimated assets and debts at $10 million to $50 million as of the Petition Date. APPLIED MINERALS: Sells 1.25 Million Common Shares -------------------------------------------------- Applied Minerals, Inc., sold a total of 1,250,000 shares of common stock at $1.60 per share to one purchaser in a transaction that was exempt from registration under section 4(2) of the Securities Act of 1933. The Company did not use a broker and paid no commission as part of the transaction. About Applied Minerals New York City-based Applied Minerals, Inc. (OTC BB: AMNL) is a leading global producer of halloysite clay used in the development of advanced polymer, catalytic, environmental remediation, and controlled release applications. The Company operates the Dragon Mine located in Juab County, Utah, the only commercial source of halloysite clay in the western hemisphere. Halloysite is an aluminosilicate clay that forms naturally occurring nanotubes. The Company reported a net loss of $4.77 million for 2010, compared with a net loss of $6.77 million for 2009. The Dragon Mine property has yet to produce any significant revenue and, as such, the Company generated no gross profit for the twelve months ended Dec. 31, 2010, and 2009. As reported by the TCR on April 28, 2011, PMB Helin Donovan, LLP, in Spokane, Washington, after auditing the Company's financial statements for the year ended Dec. 31, 2010, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has an accumulated deficit from operations and a net deficiency in working capital. Applied Minerals in its Form 10-Q acknowledged that it has incurred material recurring losses from operations. At March 31, 2011, the Company had aggregate accumulated deficits prior to and during the exploration stage of $33,239,435, in addition to limited cash and unprofitable operations. For the period ended March 31, 2011 and 2010, the Company sustained net losses before discontinued operations of $1,343,240 and $1,084,299, respectively. These factors indicate that the Company may be unable to continue as a going concern for a reasonable period of time, according to the quarterly report. ARK DEVELOPMENT: U.S. Trustee Unable to Form Committee ------------------------------------------------------ The United States Trustee said it will not appoint at this time a committee of creditors for Ark Development/Oceanview LLC pursuant to 11 U.S.C. Sec. 1102. About Ark Development Ark Development/Oceanview LLC owns three pieces luxury homes in Fort Lauderdale, Florida -- at 1431 North Atlantic Boulevard; 1427 North Atlantic Boulevard; and 1423 North Atlantic Boulevard. All three properties are in the final stages of the construction process. The Debtor estimates that the value of each property is roughly $4 million. Ark Development/Oceanview filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-20382) on April 18, 2011. Judge John K. Olson presides over the case. It scheduled assets of $12,000,000 and debts of $9,772,531. ATEX CORPORATION: Case Summary & 18 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Atex Corporation 26314 Western Avenue, Suite 200 Lomita, CA 90719 Bankruptcy Case No.: 11-37051 Chapter 11 Petition Date: June 23, 2011 Court: United States Bankruptcy Court Central District of California (Los Angeles) Debtor's Counsel: Jiyoung Kym, Esq. LAW OFFICES OF JIYOUNG KYM 3435 Wilshire Blvd #2600 Los Angeles, CA 90010 Tel: (213) 386-0800 Fax: (213) 995-9898 E-mail: jkym@yahoo.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 18 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb11-37051.pdf The petition was signed by John Lee, president. AUSTIN HOUSING: Moody's Cuts Rating on Revenue Bonds to 'Ca' ------------------------------------------------------------ Moody's Investors Service has downgraded to Ca from Caa1 the rating on Austin Housing Finance Corporation Multifamily Housing Revenue Bonds (Rutland Place Apartments Project), Series 1998 A, affecting approximately $11,180,000 million of outstanding debt. RATINGS RATIONALE The downgrade reflects the Notice to Holders dated June 16th, 2011 of default on payments on the Bonds due on the regularly scheduled mandatory sinking fund redemption from Nov. 1, 2010 and interest payment due May 1, 2011, a debt service coverage below 1.0x, depletion of reserves and cash balances, and continued low occupancy that, although somewhat improved since 2009, remains at approximately 80%. The rating reflects Moody's estimate of potential losses to bondholders in light of the Notice of Default and the status of project reserves. DETAILED CREDIT DISCUSSION The project is a 294-unit multifamily housing development located in North Central Austin submarket, and is comprised of 16 garden style apartment buildings (known as Rutland Place I) and 15 other apartment buildings (known as Rutland Place II). Phase I of the project was built in 1979 and Phase II was built in 1985. The bonds are limited obligations payable solely from the revenues, receipts and security from the project. Based on un-audited 12-month operating statement ending Dec. 31, 2010 debt service coverage was 0.79x. Debt service coverage based on similar financial statements has been below 1.0x for the past 5 of 6 calendar years. There are signs of improvement since the 2008 and 2009 lows in revenue and occupancy levels. However, challenges remain in the low occupancy levels and depleted cash resources available to pay expenses and debt service. The balance in the Debt Service Reserve Fund declined to $95,546, as of Dec. 31, 2010, or 10.5% of the required level. The Replacement and Repair Fund remains unfunded. Moody's expects a recovery rate consistent with the rating assigned in light of the Notice of Default and status of Project resources. Outlook WHAT COULD CHANGE THE RATING: UP - Debt service coverage above 1.0x, improved occupancy levels, and replenishment of the reserve funds. - Decreases in anticipated losses. WHAT COULD CHANGE THE RATING: DOWN - Further deterioration of occupancy or debt service coverage levels. - Increases in anticipated losses. PRINCIPAL METHODOLOGY USED The principal methodology used in this rating was "Global Housing Projects" published in July, 2010. BENTLEY SYSTEMS: S&P Assigns 'BB-' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services assigned Exton, Pa.-based infrastructure software provider Bentley Systems Inc. its 'BB-' corporate credit rating. The rating outlook is stable. "Additionally, we assigned the company's $310 million first-lien facility our 'BB+' issue-level rating (two notches higher than the 'BB-' corporate credit rating) with a recovery rating of '1' indicating our expectation of very high (90%-100%) recovery in the event of payment default. The facility consists of a $100 million revolver due 2015 and a $210 million term loan due 2016. The company used proceeds to purchase a minority interest in the company, refinance existing indebtedness, and pay expenses," S&P said. "The rating on Bentley reflects the company's strong position in the market for architectural, engineering, and construction software solutions, a highly recurring base of revenues, and stable cash flows," said Standard & Poor's credit analyst Jennifer Pepper. "Further, we do not expect that its resulting levered capital structure will be significantly detrimental to solid free cash flows, a key support to the rating." Bentley is a leading provider of software solutions for infrastructure, including roads, rails, bridges, water systems, and plant operations. Revenues for the 12 months ended March 31, 2011 were $483.9 million, normalizing for the impact of a prospective change in accounting for the company's perpetual license sales adopted on Jan. 1, 2011. More than half of revenues come from outside the U.S., with Asia representing the fastest- growing segment. BOSTON MEN'S: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Boston Men's Health Center, Inc. a Florida corporation 20301 SW Acacia Street, Suite 250 Newport Beach, CA 92660 Bankruptcy Case No.: 11-19001 Chapter 11 Petition Date: June 24, 2011 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: Leonard M. Shulman, Esq. SHULMAN HODGES & BASTIAN LLP 8105 Irvine Ctr Dr Suite 600 Irvine, CA 92618 Tel: (949) 340-3400 Fax: (949) 340-3000 E-mail: lshulman@shbllp.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb11-19001.pdf The petition was signed by Quoc Huan Ha, president. CABI SMA: Disclosure Statement Hearing Today -------------------------------------------- CABI SMA Tower I LLP will seek approval today from the U.S. Bankruptcy Court for the Southern District of Florida of the disclosure statement explaining its proposed Chapter 11 plan of reorganization, as amended. CABI will hope that the Court will overrule objections filed by Brickell Central LLC and Miami-Dade County Tax Collector to the Plan disclosure. The Miami-Dade Tax Collector said it is concerned that the its treatment, which contemplates the possibility that subsequent owners of the estate's real property will be liable for payment of taxes which could result from litigation over valuation issues, does not provide a mechanism for notice to purchasers. It asserts that the Disclosure Statement should be rejected unless the concern regarding notice to subsequent purchasers of the potential of responsibility for payment of ad valorem taxes is addressed. Brickell Central in its filing noted that the Debtor has outstanding contracts for sale of approximately 55 condominium units. However, it points out that the Debtor failed to disclose that it intends to terminate those contracts pursuant to a settlement not yet approved by the Court and return all deposits currently escrowed under those contracts to the proposed purchasers. There is also no disclosure as to the reason why the deposits are being refunded. As reported in the May 9, 2011 edition of the Troubled Company Reporter, the Plan provides for a restructuring of the Debtor's financial obligations. The Debtor says the proposed restructuring will provide it with the necessary liquidity to compete effectively in today's business environment. The Plan is premised upon the funding of (i) up to $7 million on the Effective Date in order to consummate the Plan and (ii) shortfalls, if any, by the Reorganized Debtor. The Plan Investors will make the Equity Contribution via a newly formed limited liability company, Teca Group Investments LLC. The First Amended Plan provides for this classification and treatment of claims: Class Description Treatment ----- ----------- --------- NA Administrative Paid in full, in cash. Expenses Est. Allowed Amount: $350,000 Est. Percentage Recovery: 100% NA Priority Tax Paid in full, in cash over a Claims period not exceeding five years from Petition Date, with interest. Est. Allowed Amount: $0 Est. Percentage Recovery: 100% 1 Priority Non-Tax Not impaired. Paid in full, in Claims cash. Est. Allowed Amount: $0 Est. Percentage Recovery: 100% 2 Secured Claim of Unimpaired. Paid in full, in cash Miami-Dade Tax in the amount of any remaining Collector 2009 and 2010 taxes owed to the county. Est. Allowed Amount: $829,126 Est. Percentage Recovery: 100% 3 Secured Tax Impaired. Certificate Est. Allowed Amount: $352,980 Claims Est. Percentage Recovery: 100% 4 Secured Prepetition Impaired. Will receive New Senior Loan Claim Note. Est. Allowed Amount: $16,000,000 Est. Percentage Recovery: 100% 5 Other Secured Impaired. Will receive either of Claims full payment in cash, or reinstatement of claim, satisfaction by the surrender of collateral securing claim, or treatment that otherwise renders the claim unimpaired. Est. Allowed Amount: $0 Est. Percentage Recovery: 100% 6 Customer Deposit Impaired. Will receive cash in Claims the amount of the principal balance of the escrow fund, cash in the statutory amount of any Priority Non-Tax Claim, and cash in the amount of 15% of the holders' allowed unsecured customer deposit claim. Est. Allowed Amount (Secured): $3,909,956 Est. Percentage Recovery: 100% Est. Allowed Amount (Priority): $104,000 Est. Percentage Recovery: 100% Est. Allowed Amount (Unsecured): $2,176,361 Est. Percentage Recovery: 15% 7 General Unsecured Impaired. Will receive cash in Claims the amount equal to 15% of the Allowed Claim. Est. Allowed Amount: $453,404 Est. Percentage Recovery: 15% 8 Unsecured Impaired. Will receive the New Prepetition Loan Junior Note. Claim Est. Allowed Amount: $13,198,303 Est. Percentage Recovery: 100% 9 Old Equity Interests Impaired, no distribution. Est. Allowed Amount: NA Est. Percentage Recovery: 0% A full-text copy of the April 27 Disclosure Statement is available at http://bankrupt.com/misc/CABISMA_DS.pdf About Cabi SMA Tower I Based in Miami, Florida Cabi SMA Tower I, LLLP -- fka Cabi SMA Retail 1, LLC; Cabi SMA, LLLP; Cabi SMA Tower 2, LLC; Cabi SMA Tower 2, LLLP; Capital at Brickell; Cabi SMA Retail 2, LLLP; Cabi SMA Retail 2, LLC; Cabi SMA Tower 1, LLC; and Cabi SMA Retail I, LLLP -- owns multiple vacant parcels around South Miami Avenue and S.W. 14th Street in Miami, Florida. It acquired the parcels to develop residential, hotel, and retail space, including a condominium development. The parcels are being managed by Cabi Developers, LLC pursuant to a management agreement. Cabi SMA Tower I filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 10-49009) on Dec. 28, 2010. Mindy A. Mora, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates Cabi Downtown, LLC (Bankr. S.D. Fla. Case No. 09-27168) and Cabi New River, LLC (Bankr. S.D. Fla. Case No. 10-49013) filed separate Chapter 11 petitions. aesars' capacity to continue to fund operational and capital spending needs and meet debt service obligations relies on meaningful growth in cash flow generation over the next few years," S&P said. "Although the proposed amend and extend transaction would improve Caesars' already strong debt maturity profile," added Mr. Bubeck, "we believe the increase in interest rate offered to extending lenders will weigh on the company's liquidity profile, given weak EBITDA coverage of interest of just 0.9x as of Dec. 31, 2010." "We expect EBITDA to begin to grow this year following three years of moderate declines. However, absent meaningful growth in EBITDA over the next few years, Caesars will likely burn substantial cash to meet capital expenditure needs and may be challenged to continue to meet long-term debt service obligations. The proposed amendment would also allow Caesars to buy back loans from individual lenders at a price that may be below par. Given the company's very weak financial profile, we would likely view buybacks at a price meaningfully below par as tantamount to a default and lower our ratings in accordance with our distressed exchange criteria," S&P stated. CALAIS RESOURCES: Brigus Extends Forbearance Until Oct. 31 ---------------------------------------------------------- Calais Resources Inc., on Jan. 15, 2011, entered into a Forbearance Agreement with Brigus Gold Corp. pursuant to which Brigus has agreed to extend the forbearance period to June 30, 2011, for the three notes held by Brigus which are secured by the Colorado assets of the Company. The original forbearance periods with respect to these notes were scheduled to expire in early February and March 2011. On June 8, 2011, the Company entered into an Extension Agreement with Brigus, in which Brigus agreed to extend the June 30, 2011, date to Oct. 31, 2011, upon receipt by Brigus of at least a minimum of $1,000,000 from the Company. The Company wired funds to Brigus on June 8, 2011, in the amount of $1,000,000 to be applied against the interest due on the notes covered by the Forbearance Agreement. A full-text copy of the Extension Agreement is available for free at http://is.gd/Bx4Eao About Calais Resources Nederland, Colorado-based Calais Resources, Inc. (Pink Sheets: CAAUF) is an exploration and development company and owns and operates the Cross/Caribou gold and silver mine operations in Colorado and the White Caps mine operation in Manhattan, Nevada. The company is currently in the initial stages for reviewing the reopening of the fully permitted Cross Mine which includes planning to resume underground exploration activities in Colorado and surface exploration in Nevada. CARGO TRANSPORTATION: Agreement to Pay Estes Express Claim OK'd --------------------------------------------------------------- The Hon. Michael G. Williams of the U.S. Bankruptcy Court for the District of Middle District of Florida approved a critical vendor agreement between Cargo Transportation Services Inc. and Estes Express. Pursuant to the agreement: -- Estes' prepetition claim is $530,058; -- Estes will provide the Debtor with resumption of postpetition services as a nationally preferred less-than- load carrier and the reinstatement of prepetition pricing and extension of trade credit; -- the Debtor will wire transfer $100,000 to Estes to be applied to the prepetition Claim; and -- the balance of the prepetition claim in the amount of $430,058 will be paid in 10 equal monthly payments, commencing July 1, 2011, and continuing on the first of each month thereafter. About Cargo Transportation Sunrise, Florida-based Cargo Transportation Services, Inc., provides transportation services to clients nationwide, including customized consolidation, distribution, logistics and warehousing services. It has 140 employees and averages $100,000,000 in gross revenue per year. Cargo Transportation filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 11-00432) on Jan. 12, 2011. Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, serves as the Debtor's bankruptcy counsel. Jennis & Bowen, P.L., serves as substitute counsel. 1 Source Partners Inc. and Accell Audit & Compliance P.A., serve as its certified public accountants. The Debtor also tapped Ruden McClosky P.A. as its special counsel. Donald F. Walton, U.S. Trustee for Region 21, appointed an Official Committee of the Official Committee of Unsecured Creditors in the Debtor's case. Hunton & Williams LLP represents the Committee in the Debtor's Chapter 11 proceedings. The Committee tapped DLA Piper as its general counsel. The Debtor disclosed $11,728,760 in assets, and $11,869,375 in liabilities as of the Chapter 11 filing. CATHOLIC CHURCH: Wilm. Lay Panel Has Ok for P. Hamilton Hiring -------------------------------------------------------------- The Official Committee of Lay Employees in the Chapter 11 case of the Catholic Diocese of Wilmington, Inc., received approval from the U.S. Bankruptcy Court for the District of Delaware to retain Pepper Hamilton LLP as counsel, nunc pro tunc to April 25, 2011. The Committee was previously represented by Donald J. Detweiler, Esq., when he was still a shareholder of Greenberg Traurig LLP. Mr. Detweiler is now a member of Pepper Hamilton. The Committee wishes Mr. Detweiler to continue representing the Lay Employees Committee. The professional services that the Lay Employees Committee expects that Pepper Hamilton will be called upon to render include, but will not be limited to: (a) providing legal advice with respect to the Lay Employees Committee's rights, powers and duties in this Case; (b) preparing all necessary applications, answers, responses, objections, orders, reports and other legal papers; (c) representing the Lay Employees Committee in any and all matters arising in the Case including any disputes or issues with the Debtor, alleged secured creditors and other third parties; (d) assisting the Lay Employees Committee in its investigation and analysis of the Debtor including but not limited to, the review and analysis of all pleadings, claims or plans of reorganization that may be filed in this Case and any negotiations or litigation that may arise out of, or in connection with, the matters, operations and financial affairs; and (e) perform all other legal services for the Lay Employees Committee that may be necessary or desirable in these proceedings. The Debtor will pay Pepper Hamilton based on its hourly rates: Shareholders and Of Counsel $380 to $825 Associates $240 to $435 Paralegals $75 to $215 The principal attorneys and paralegals that will represent the Lay Employees Committee are: Donald J. Detweiler $600 James C. Carignan $405 Evelyn J. Meltzer $405 John H. Schanne, II $310 Christopher Lano $215 Pepper Hamilton will be reimbursed for its necessary out-of- pocket expenses. Mr. Detweiler assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. * * * The Lay Employees Committee previously certified that there were no responses or objections to their application as of May 25, 2011. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Milwaukee Defends Bar Date Notice -------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 case of the Archdiocese of Milwaukee asked the U.S. Bankruptcy Court for the Eastern District of Wisconsin not to grant the Archdiocese of Milwaukee's request to establish deadlines for filing proofs of claim because it is going to more extensive efforts by the Debtor than those proposed in its request to locate and serve Abuse Survivors. Robert L. Elliot and Jeff Anderson and Associates P.A., has joined in the Committee's objection. On behalf of the Archdiocese, Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, contends that the Bar Date notice proposed by the Debtor complies with due process by providing personal notice to all known Abuse Survivors and a broad based publicity campaign which includes advertisements announcing the Abuse Survivor Bar Date in more than 20 local, regional, and national publications -- some of which are in Spanish and Hmong -- wide dissemination of Publication Notices and the list of Abusers, including to individuals that are alumni of Schools in the Region, a letter in parish bulletins from the Archbishop announcing the Abuse Survivor Bar Date, Web site postings, and press releases to inform unknown Abuse Survivors of the Abuse Survivor Bar Date. Mr. Diesing tells the Court that the Committee, apparently acting under the misguided belief that more notice is always better, advocates for an Abuse Survivor Bar Date that is more than a year away and a notice and publicity campaign surrounding the Abuse Survivor Bar Date that is significantly more burdensome than anything ever undertaken by a diocesan debtor. He says that the Debtor has significant concerns that the notice protocols advocated for by the Committee would re-victimize Abuse Survivors. "This will occur if Abuse Survivors are encouraged to file proofs of claim only to have their claims disallowed after the Debtor or the Committee -- in keeping with its fiduciary responsibilities -- successfully objects on statute of limitations or other grounds," Mr. Diesing explains. "Some Abuse Survivors do not want to think about the abuse they suffered and do not wish to participate in this Reorganization Case; however, the Committee proposes to inundate these Abuse Survivors with announcements at the parishes they attend, correspondence in the mail, and announcements in parish bulletins, potentially triggering post traumatic stress disorder or other psychological damage," he further argues. Mr. Diesing points out that one group that is particularly vulnerable to re-victimization is 192 Abuse Survivors who settled their claims against the Debtor prepetition because the language the Committee wants added to the Abuse Survivor Proof of Claim Form and Abuse Survivor Bar Date Notice in essence encourages Settled Abuse Survivors to rescind their settlement agreements or claim they were fraudulently induced to enter into their settlement agreements. The Debtor entered into settlements with the Settled Abuse Survivors to promote healing and as an extension of its ministries; however, the Debtor does not believe it had any legal obligation to compensate the Settled Abuse Survivors because the statute of limitations had tolled on their claims, Mr. Diesing argues. He asserts that if the Committee is successful in convincing Settled Abuse Survivors to rescind their agreements with the Debtor, the likely result is that the Settled Abuse Survivors would be compelled to return to the Debtor all settlement payments they have received to-date, only to have their proofs of claim disallowed on statute of limitations or other grounds. About the Diocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Milw. Opposes Creditors' Deposition Request ------------------------------------------------------------ The Archdiocese of Milwaukee asks the U.S. Bankruptcy Court for the Eastern District of Wisconsin not to grant the Official Committee of Unsecured Creditors' request to lift the automatic stay to permit the taking of certain depositions. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, contends that the Deposition Motion should be denied because (i) the Committee is not a proper party to bring the Deposition Motion; (ii) the Committee has not shown cause for the relief it seeks, (iii) contrary to the Committee's assertions, the relief sought is unprecedented, (iv) allowing stay relief for depositions would greatly prejudice the Debtor without any benefit to unsecured creditors, and (v) granting relief for depositions would result in significant state court proceedings at a tremendous expense to the Debtor. Mr. Diesing notes that the Committee was appointed in the Chapter 11 case as the official representative of all of the unsecured creditors. "From the contents of the Deposition Motion, it is clear that the Committee has instead taken on the role of advocate for the plaintiffs in the State Court Cases," he points out. "While the Committee makes a half-hearted attempt in the Deposition Motion to ask for relief so that the Debtor and other 'parties in interest' can take depositions, there are no parties in interest, including the Debtor, that have manifested any interest in taking any deposition in the State Court Cases other than counsel for the plaintiffs in the State Court Cases," Mr. Diesing argues. Mr. Diesing further argues that while it might be true that the death of a witness would impose a significant burden on certain plaintiffs in the State Court Cases, the Committee has presented no evidence that the death or incapacity of any witness is imminent. He adds that the Debtor is unaware of any serious illness of any potential witness. A mortality table provided by the Center for Disease Control suggests that a 70 year old individual has a life expectancy of more than 13 years and an 84 year old, the oldest witness identified by the Committee, has a life expectancy according to the Mortality Table of six years. The Committee brought up a similar deposition motion filed by the unofficial committee of abuse survivors in the Chapter 11 case of the Catholic Diocese Wilmington which sought to depose elderly witnesses. However, Mr. Diesing contends that the Wilmington Deposition Motion did not seek to take depositions of individuals based solely on age. Instead, the Wilmington Deposition Motion sought to take depositions of infirm or dying parties or witnesses like one who is dying of numerous heart and respiratory problems, including congestive heart failure that has left him with 30% heart capacity and will die at any time. Mr. Diesing points out that even if the Committee had carried its prima facie burden of showing there was cause for relief from stay, the Deposition Motion should still be denied because great prejudice to the Debtor and its bankruptcy estate would result from the premature taking of depositions, and the hardship to the Debtor in needing to prepare for and defend the depositions is significant, without any countervailing benefit to creditors. He asserts that if the Deposition Motion is granted, the Committee will attempt to take the depositions of 10 or more individuals, and the Debtor's cost of defending the depositions and paying for Committee's counsel's preparation for and participation in the depositions would likely be between $25,000 to $35,000 per deposition, funds that otherwise would likely be available for distribution to creditors. Mr. Diesing also reasons that since the claims pool and assets pool in the Chapter 11 case are either unknown or undetermined at this point, the provisions of a plan of reorganization are still "in the incubator." He notes that it is entirely possible that the parties will follow other multiple tort cases where the claims are not liquidated at all, but determined by a claims master who will allocate a pool of assets toward the claims. "This is a concept offered for consideration by the Committee in the past and it is therefore surprising that at this time the Committee would seek to begin the claims adjudication process," Mr. Diesing says. Parties File Joinders to Deposition Motion In separate filings, Jeff Anderson and Associates, P.A. and Robert L. Elliott, Esq., an attorney for certain victim unsecured creditors, join in the Deposition Motion. About the Diocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Milw. Mediation Participants Complaining --------------------------------------------------------- An order entered by the U.S. Bankruptcy Court for the Eastern District of Wisconsin authorized the Archdiocese of Milwaukee to continue paying certain psychological counseling and therapy for Abuse Survivors. At a June 1, 2011 hearing, the Court addressed the remaining portion of the Debtors' request for special confidentiality procedures to protect Abuse Survivors and the objection previously filed by the Official Committee of Unsecured Creditors, which had been joined by Jeff Anderson, Esq., on behalf of certain Abuse Survivors. Eva M. Soeka, director of Marquette University's Center for Dispute Resolution, one of the creators for the independent voluntary mediation program to address claims against it by Abuse Survivors, said that the Mediation Program was designed to give a fair resolution process to the Abuse Survivors. To prove her point, she disclosed that some mediators are non- Catholic to make certain Abuse Survivors are more comfortable. Ms. Soeka, however, disclosed that after coming up with the Mediation Program, she really did not monitor or police the individual mediation with the Abuse Survivors. She also said that she did not receive any complaints regarding the Mediation Program. Steven Geier, a deaf Abuse Survivor who participated in the Mediation Program testified that the Mediation Program was frustrating and humiliating. He said that he was confused and didn't know what was going on. The process went on for hours and that he didn't eat anything the whole day. Mr. Geier said that he received a settlement amount after giving in to a statement made by James Smith, Esq. -- a lawyer provided by the Archdiocese, to help him -- that he should take the settlement or he might not get anything the next time around. He noted that after receiving the amount, he felt that it wasn't the right thing to do. Other Abuse Survivors, Sharon Tarantino and Jerri Stenavich, said that they have similar experiences regarding the Mediation Program. They said that while undergoing the Mediation Process, they felt that they were reliving their past experiences again and that they are deceived. Ms. Tarantino testified that she was forced to go to the place where her ordeal took place and repeat her story many times. Ms. Stenavich said that the mediator's responses to her questions were "cold". Mr. Smith testified that none of his clients were "bullied" during the Mediation Process. During the hearing, the Debtor withdrew the request to serve certain Abuse Survivors by proxy. David Asbach, Esq., the U.S. Trustee's counsel, stated the U.S. Trustee's position is that the Debtor should be required to file its schedules and creditor matrix under seal with the Court. The Court ordered that the list of Abuse Survivors who had participated in mediation or otherwise were known to the Debtor but wished to remain anonymous should be filed under seal with the Court, with access restricted to Court personnel, the U.S. Trustee and counsel for the Committee. Specifically, neither Mr. Anderson, nor the Committee members themselves, will be given access to the sealed matrix or other sealed documents without further Order of the Court. The Court cautioned that when serving documents on the individuals on the sealed matrix, the certificate of service should refer to, but not attach, the sealed matrix. The Court also held that the Debtor is authorized to complete the mediation process with two survivors desiring to utilize the program, but that the Debtor is not authorized to offer a monetary settlement of these claims, other than to pay for therapy and psychological counseling, and that the Debtor may not require these two survivors to release their claims against the Debtor. On the prepetition settlement agreements with other Abuse Survivors, the Court approved the Debtor's disbursement of payments due for one year from the date of the Debtor's bankruptcy, i.e., from Jan. 4, 2011, through Jan. 3, 2012. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, represented that the amount due in the one- year period is approximately $301,000, although the Motion provides that $311,000 is due. The Court authorized the payments without prejudice to the Abuse Survivors' arguments about the unenforceability of the releases contained in the settlement agreements. However, the payments will be subject to recoupment from the recipients if this case does not resolve with other similarly situated creditors receiving equal treatment. About the Diocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CB HOLDINGS: Plan Filing Exclusivity Extended Until Sept. 13 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods of CB Holding Corp. and its debtor- affiliates to: a) file a Chapter 11 plan of reorganization until Sept. 13, 2011; and b) solicit acceptances of that plan until Nov. 10, 2011. According to the Debtors, they have concentrated their efforts on pursuing sales of their three restaurant brands and related assets. The Debtors and their professionals specifically devoted significant time and energy to: i) negotiate multiple asset purchase agreements and related documentation, ii) prepare for and conduct multiple auctions, iii) obtain approval of multiple motions to sell these and other assets to various purchasers, iv) consummate these sales, v) attend to various operational and administrative matters that have arisen during the Chapter 11 cases, vi) manage their liquidity and other financing issues, and vii) formulate an exit and wind-down strategy for these cases. The Debtors said these efforts have required the Debtors and their professionals to dedicate most of their energies in large part to the sale processes; yet, the Debtors remain focused on preparing and filing a liquidating plan to ensure a smooth and efficient resolution of these cases. 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. CB Holding sold off its The Office restaurant chain and 12 Bugaboo Creek stores in separate auctions. Villa Enterprises Ltd. won the bidding for The Office chain with its $4.68 million. RRGK LLC acquired the 12 Bugaboo Creek stores for $10.05 million, more than tripling the $3.175 million first bid from an affiliate of Landry's Restaurants Inc. CB Holding and its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-13683) on Nov. 17, 2010. 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. CHRISTIAN BROTHERS: Agrees on Adequate Protection for County Bank ----------------------------------------------------------------- Pursuant to a loan agreement, dated Nov. 25, 2008, Christian Brothers Institute, as borrower, loaned $5,000,000 from Country Bank, as lender. The loan was evidenced by a promissory note, dated Nov. 25, 2008 and was secured by, inter alia, three mortgages, assignments of leases and rents and security agreements, each dated as of Nov. 25, 2008. The Loan is an interest-only loan, with interest at the rate of six percent per annum. The original maturity date of the Loan was Dec. 1, 2010, and the maturity date has been extended to Dec. 1, 2012. The Security Agreements constitute both real property mortgages and security agreements within the meaning of the Uniform Commercial Code. The proceeds of the Loan were used by CBI to fund settlements of personal injury lawsuits and to pay CBI's legal fees incurred in connection therewith. In a court-approved stipulation, CBI and its Debtor affiliates and Country Bank agreed that: 1. Country Bank is authorized to use the Debt Service Reserve under the terms of the Loan Documents and in the ordinary course of its business, nunc pro tunc and effective as of the Petition Date; 2. As adequate protection to Country Bank, it is authorized to continue disbursing to itself payments of postpetition interest on the Loan from the Debt Service Reserve, at the non-default rate, approximately amounting to $25,000 per month in accordance with the terms of the Loan Documents. Subject to further Order of the Court, other than disbursement of Interest Payments, Country Bank will not be permitted to disburse any funds from the Debt Service Reserve to itself or any other party. All Interest Payments to Country Bank are subject to reallocation under Section 506(b) of the Code; 3. As additional adequate protection to protect Country Bank from diminution of the value of its Collateral, to the extent its lien thereon or interest therein is valid, enforceable and not avoidable, Country Bank is granted, in the amount of any diminution replacement liens and security interests in the Collateral (i) to the extent that any liens granted to Country Bank by CBI pursuant to the Loan Agreements were valid, perfected and enforceable as of the Petition Date in the continuing order of priority of its prepetition liens without determination herein as to the nature, extent and validity of the prepetition liens and claims; and (ii) to the extent that diminution of its Collateral occurs during the Cases, subject to: (x) the claims of Chapter 11 professionals duly retained and to the extent awarded pursuant to Sections 330 or 331 of the Bankruptcy Code; (y) United States Trustee fees; and (z) the fees and commissions of a Chapter 7 trustee in an aggregate amount not to exceed $10,000. Any Replacement Liens granted pursuant to the Stipulation and Order will attach solely to the Collateral and not to any other asset of the Debtors, including without limitation the proceeds of any recoveries of estate causes of action under Sections 542 through 553 of the Bankruptcy Code; 4. The automatic stay is vacated solely in order to permit Country Bank to continue to disburse to itself Interest Payments from the Debt Service Reserve, at the non-default rate, in accordance with the terms of the Loan Documents and the Stipulation; 5. Country Bank will not be required to file financing statements or other documents in any jurisdiction or take any other action to validate or perfect the Replacement Liens and security interests granted by the Stipulation; 6. The rights of the Debtors and any trustee(s) appointed or elected in these Cases or any successor cases under Chapter 7 of the Code to surcharge the Collateral or any proceeds thereof pursuant to Section 506(c) of the Code are expressly preserved; 7. The Stipulation will be binding upon and inure to the benefit of any subsequently appointed or elected trustee or any successor case under Chapter 7 of the Bankruptcy Code. About Christian Brothers' Institute The Christian Brothers' Institute in New Rochelle, New York, is a domestic not-for-profit 501(c)(3) corporation organized under Sec. 102(a)(5) of the New York Not-for-Profit Corporation Law. CBI was formed to establish, conduct and support Catholic elementary and secondary schools principally throughout New York State. The Christian Brothers of Ireland, Inc., in Chicago, Illinois, is a domestic not-for-profit 501(c)(3) corporation organized under the Not-for-Profit Corporation Law of the State of Illinois. CBOI was formed to establish, conduct and support Catholic elementary and secondary schools principally throughout the State of Illinois, as well as other spiritual and temporal affairs of the former Brother Rice Province of the Congregation of Christian Brothers. CBI and CBOI depend upon grants and donations to fund a portion of their operating expenses. The Christian Brothers' Institute and The Christian Brothers of Ireland filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 11-22820 and 11-22821) on April 28, 2011. Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, serves as the Debtors' bankruptcy counsel. CBI estimated its assets at $50 million to $100 million and debts at $1 million to $10 million. CBOI estimated its assets at $500,000 to $1 million and debts at $1 million to $10 million. CITRUS VALLEY: Moody's Affirms 'Ba2' Revenue Bond Rating -------------------------------------------------------- Moody's Investors Service affirms Citrus Valley Health Partners' Ba2 revenue bond rating affecting $75 million of rated outstanding Series 1998 fixed rate and auction rate certificates of participation issued through the California Statewide Communities Development Authority. The outlook remains negative. SUMMARY RATING RATIONALE The rating affirmation reflects a material increase in unrestricted cash from the state provider fee program. Moody's is maintaining a negative outlook due to weak operating performance in FY 2010 that has continued through four months of FY 2011 resulting from a deteriorating payor mix and continued outpatient volume declines. Furthermore, CVHP's has significant future capital needs relating to deferred maintenance and seismic requirements. STRENGTHS * Sizable regional system (with revenues of $393 million in FY 2010, 31,017 admissions, and 122,000 outpatient visits) consisting of three hospitals located in contiguous service areas in East San Gabriel Valley of Los Angeles County; maintains leading and stable 32% market share * Significant beneficiary under the California hospital fee program; CVHP received $36.2 million net proceeds under the initial phase of the program, and expects to receive an additional $14 million under the second phase, a six month extension of the program approved in May 2011 * Material boost in unrestricted cash from the state provider fee program; As of April 30, 2011, cash balances increased to $101.7 million, equating to 99 days cash on hand and 124% cash-to-debt * Despite weaker operating results in FY 2010 (excluding the impact of the state provider fee program) , CHVP maintains adequate Moody's-adjusted debt coverage measures due in part to relatively low debt load (measured by total debt-to-operating revenues of 21% in FY 2010); Adjusted maximum annual debt service (MADS) coverage measured 2.81 times and adjusted debt- to-cash flow measured a somewhat high but manageable 4.66 times * Overall labor environment currently stable with low nursing turnover and vacancy rates; in FY 2010, CVHP entered into a four year renewed contract with California Nurses Association CHALLENGES * Challenging payor mix with combined government (Medicare 44% and Medi-Cal 23.5% of gross revenues) and self pay (4.3% of gross revenues) growing to nearly 72% of gross revenues in FY 2010; payer mix is an ongoing concern given weak economic conditions in the region with high unemployment, State budget challenges, and risk of potential changes in future government funding * Trend of variable operating performance; following a good turnaround in operating performance in FY 2009, operations weakened considerably in FY 2010 (adjusted to exclude the impact of the state provider fee program) which has continued through the first four months of FY 2011; CVHP posted a sizable operating loss of $3.4 million (-0.9% margin) and decline in operating cash flow to $15.5 million (3.9% margin) in FY 2010 from an operating profit of $2.6 million (0.7% margin) and operating cash flow of $21 million (5.4% margin) in FY 2009; through four months of FY 2011 operating cash flow is down to $4.3 million (3.3% margin) from $7.5 million (6.0% margin) in the same period in the prior year * Continued outpatient volume declines attributed to the weak economy, high unemployment, increase in uninsured population, and patients deferring elective healthcare service * Very high average age of plant (18 years) due to accumulated deferred maintenance; significant capital expenditures will be required to make system facilities seismically compliant; two of three facilities do not meet the SB1953 seismic standards; CVHP is expected apply for an extension of the retrofit deadline to 2020 by late this year or early next year for buildings that are subject to the compliance date of 2013 DETAILED CREDIT DISCUSSION LEGAL SECURITY: The outstanding bonds are secured by a pledge of gross revenues of the obligated group which includes Citrus Valley Health Partners (the parent corporation), Citrus Valley Medical Center (CVMC), and Foothill Presbyterian Hospital (FPH). The obligated group represented 97% of system revenues and 94% of system assets in FY 2010. Unless otherwise noted, all references in this report are based on the system and consolidated financial statements. Required to meet annual minimum 60 days cash on hand liquidity covenant (tested at FYE Dec. 31) under the Series 1998 Bonds MBIA bond insurance policy. The insurer of the bonds has the right to accelerate bonds upon failure to meet the liquidity test. DEBT STRUCTURE: The debt structure is comprised of 69% of fixed rate and 31% auction rate bonds. INTEREST RATE DERIVATIVES: None RECENT RESULTS/DEVELOPMENTS Citrus Valley Health Partners (CVHP) continues to face operating challenges and volatility due to a deteriorating payor mix from a sluggish economy and high unemployment in the region. Following good turnaround in operating performance in FY 2009, operating performance weakened considerably in FY 2010 (adjusted to exclude the impact of net $36.2 million of supplemental funding received from the State provider fee program). CVHP posted an adjusted operating loss of $3.4 million (-0.9% margin) compared to operating income of $2.6 million (0.7% margin) in FY 2009. Operating cash flow dropped by 26.8% to $15.5 million in FY 2010 (3.9% margin) from an improved $21.2 million (5.4% margin) in FY 2009. Through the first four months of FY 2011, operating results are down compared to the same period last year with an operating loss of $2.0 million and operating cash flow of $4.2 million (3.3% margin) compared to operating income of $1.2 million and operating cash flow of $7.5 million (6.0% margin) the same period the prior year. According to management, the primary factor that has led to the operating downturn is a weakening payor mix with growth in Medi-Cal (represents 23.5% of gross revenues) and a recent spike in self pay (grew to 5.2% as of April 30, 2011 from 4.3% in FY 2010). The system favorably managed expenses down (expense growth was 1.52%) while total revenues were flat in FY 2010. CVHP continues to experience outpatient volume declines. Management attributes the recent declines to a weak economy, increase in the uninsured population, and patients deferring elective healthcare services due to high deductibles and copays. Inpatient admissions grew slightly by 0.6% in FY 2010 while outpatient visits declined by a sizable 5.9% and outpatient surgeries declined by 7.0%. Through the first four months of FY 2011, inpatient admissions are up a favorable 2.8%. Outpatient visits and surgeries continued to trend downward with 6.9% and 7.4% declines, respectively. Notably, CHVP has experienced continued growth in cardiology business over the past two years with a favorable 15% growth in open heart surgeries in FY 2011 which has continued into FY 2011 due in part to the establishment of an electrophysiology program and the recruitment of interventional cardiologists. CVHP is a major beneficiary of the state provider fee legislation. It received $36.2 million of net proceeds under the initial phase of the program (covering a 21-month period from April 1, 2009 to Dec. 31, 2010). In May 2011, a second phase of the program was approved, which is a six month extension covering the first half of calendar year 2011 (from Jan. 1, 2011 to June 30, 2011). The extension of the program is expected to result in an additional $14 million in net proceeds for CHVP in FY 2011. A third phase has been proposed and currently under deliberation in the state legislature. Despite weaker operating cash flow generation in FY 2010, Moody's adjusted debt measures remain adequate to service a relatively low debt load (measured by total debt -to-operating revenues of 21% in FY 2010). Moody's adjusted maximum annual debt service coverage (MADS) measured 2.81 times and adjusted debt-to-cash flow measured 4.66 times in FY 2010, improved from 4.0 times and 3.57 times, respectively in FY 2009. The California hospital fee program has favorably bolstered CVHP's balance sheet. As of April 30, 2011, unrestricted cash increased by a material 48% from FYE 2009 to $101.7 million, equating to improved 99 days cash on hand and 124% cash-to-debt from $68.6 million (68 days cash on hand and 86% cash-to-debt) at FYE 2009 (Dec. 31) and $88.3 million at FYE 2010 (85 days cash on hand and 108% cash-to-debt). Moody's believes the improved cash position is a positive credit factor driving the rating affirmation, however, further deterioration in operating performance and any weakening of debt coverage could pressure the rating. CVHP's investment portfolio asset allocation is conservative and highly liquid with unrestricted cash and investment nearly 80% invested in cash and fixed income securities and the remaining 20% invested in equities (individually held securities). All of CVHP's unrestricted cash and investments can be liquidated within 30 days. One of CVPH's significant challenges continues to be its future capital needs due to accumulated deferred maintenance (measured by a very high average age of plant of 18 years). Two of CVHP's three hospital facilities (Citrus Valley Medical Center's 325-bed Queen of the Valley Campus in West Covina and 193-bed Inter-Community Campus in Covina) do not meet the SB1953 seismic standards. CVHP is expecting to submit an application late this year or early next year for an extension of the retrofit deadline to 2020 for buildings that are subject to the compliance date of 2013. Over the past several years, CVHP's capital spending ratio has averaged slightly below or close to one times depreciation expense. Capital spending is budgeted to be approximately $17.9 million in FY 2011 up from $12.2 million spent in FY 2010. Additionally, CVHP is currently conducting a national search to appoint a new chief financial officer before the retirement of the current CFO of 10 ten years at the end of August 2011. Outlook The maintenance of the negative outlook reflects the sizable downturn in operating performance in FY 2010 (excluding the impact of the state hospital provider fee) that has continued through four months of FY 2011, a deteriorating payor mix, outpatient volume declines, and CVHP's significant future capital needs to address deferred maintenance and seismic requirements. WHAT COULD MAKE THE RATING GO - UP Growth and stability of volume and revenues; improved operating performance and ability to sustain improved levels for multiple years; growth in unrestricted cash and investments; improved liquidity and debt measures; identification of resources to address capital needs; predictability and stability of funding under the state provider fee legislation WHAT COULD MAKE THE RATING GO - DOWN Further deterioration of operating performance; decline in liquidity; weakening of debt coverage and liquidity measures; increase in debt without commensurate growth in operating cash flow and cash; loss in market share due to competitive pressures; cuts in reimbursement KEY INDICATORS Assumptions & Adjustments: - Based on financial statements for Citrus Valley Health Partners, Inc. and Affiliates - First number reflects audit year ended Dec. 31, 2009 - Second number reflects audit year ended Dec. 31, 2010; Adjusted to exclude $81.9 million state provider fee program revenues and $45.7 million of state provider fee expenses - Investment returns smoothed at 6% * Inpatient admissions: 30,832; 30,017 * Total operating revenues: $392.8 million; $392.7 million * Moody's-adjusted net revenue available for debt service: $25.3 million; $20.8 million * Total debt outstanding: $79.4 million; $81.9 million * Maximum annual debt service (MADS): $6.3 million; 7.4 million * MADS Coverage with reported investment income: 4.50 times; 2.38 times * Moody's-adjusted MADS Coverage with normalized investment income: 4.00 times; 2.81 times * Debt-to-cash flow: 3.57 times; 4.66 times * Days cash on hand: 68 days; 85 days * Cash-to-debt: 86%; 108% * Operating margin: 0.7%; -0.9% * Operating cash flow margin: 5.4%; 3.9% RATED DEBT (debt outstanding as of Dec. 31, 2010) - Series 1998 Fixed Rate Certificates of Participation ($50 million outstanding), insured by MBIA; rated Ba2 - Series 1998 Auction Rate Certificates of Participation ($25 million outstanding), insured by MBIA; rated Ba2 CONTACT Issuer: Lois Conyers, Senior Vice President & CFO, Citrus Valley Health Partners, (626) 938-7595 The last rating action with respect to Citrus Valley Health Partners was on May 28, 2010, when a municipal finance scale rating of Ba2 was affirmed and the outlook remained negative. PRINCIPAL METHODOLOGY USED The principal methodology used in this rating was Not-for-Profit Hospitals and Health Systems published in January 2008. CONTESSA PREMIUM: Hearing on Real Property Sale Today ----------------------------------------------------- Contessa Premium Seafood, Inc. will seek approval today, June 29, of the sale of Contessa Enterprise assets. Pursuant to the court approved bidding procedures, as modified, an auction was scheduled yesterday for the assets. Initial bids were due June 24. 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 (Bankr. C.D. Calif. Case No. 11-13454) on Jan. 26, 2011. Kelley Drye & Warren LLP represents the Debtor in its restructuring effort. 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 local/ conflicts counsel counsel. Scouler & Company, LLC, serves as financial advisors. Imperial Capital, LLC serves as investment banker. Holthouse Carlin & Van Trigt LLP serves as auditors and accountants. The Debtor scheduled $49,370,438 in total assets and $35,305,907 in total liabilities. The Official Committee of Unsecured Creditors in the Debtor's Chapter 11 case is represented by Arent Fox LLP, and FTI Consulting Inc. as serves as its financial consultants. CONTESSA PREMIUM: Cash Collateral Use Has Sale Milestones --------------------------------------------------------- On June 21, 2011, the U.S. Bankruptcy Court for the Central District of California approved the stipulated second amendment to stipulated final order authorizing Contessa Premium Foods, Inc., to use cash collateral. As stipulated in the second amendment, the Final Order is modified as follows: (a) the minimum equity cushion is reduced from 110% to 105%; (b) certain "milestones" set forth in the Final Order are extended as follows: -- qualified bids must be submitted no later that June 24, 2011, at 4:00 p.m. (prevailing Pacific time); -- auction to determine highest and best bid or bids for the sale of all or substantially all of the Debtor's assets will be held no later than June 28, 2011; -- court hearing to approve the sale of all or substantially all of the Debtor's assets must be held no later than June 29, 2011; -- order or orders approving the sale of all or substantially all of the Debtor's assets must be entered on or before June 30, 2011; and -- closing of a sale of all or substantially all of the Debtor's assets as approved by the Court must be completed on or before July 1, 2011; provided, however, that such date may be extended by not more than 14 calendar days without further order of the Court, subject to the written consent of each member of the Evaluation Committee. In addition, pursuant to this stipulation, any existing defaults resulting from the Debtor's breach of the "disbursement covenant" contained in the Final Order for the weeks ending May 13, 2011, May 20, 2011, and May 27, 2011, are waived in their entirety. In consideration for the accommodation of the cash collateral requests and waivers, and with the consent of the Committee, the Debtor will pay a permanent principal paydown of $369,219. The payment will be promptly paid to the Secured Lender by the Secured Lender debiting the Segregated Cash Collateral Account. In addition, the Debtor will be entitled to receive $322,810 (the "Debtor Disbursement") from the Segregated Cash Collateral Account. The provisions of the Final Order providing for permanent principal paydowns of 50% (of any Additional Borrowing Base Shortfall to the Secured Lender from the Segregated Cash Collateral Account) will be suspended, subject to Debtor maintaining the Minimum Equity Cushion as revised in this amended stipulation. A copy of the stipulated second amendment to the stipulated Final Order is available at: http://bankrupt.com/misc/contessa.2ndamendmenttofinalorder.pdf As reported in the TCR on April 26, 2011, the Bankruptcy Court entered, on April 14, 2011, its final order authorizing Contessa Premium Foods, Inc., to use cash collateral of Wells Fargo Bank, National Association, pursuant to a budget. As of the Petition Date, the Debtor owes Wells Fargo Bank $17,050,000, secured by the Debtor's property, including cash generated by the property. Judge Peter Carroll held that (i) unless specifically authorized in writing by secured lender Wells Fargo Bank and the Committee of Creditors, no cash collateral may be paid or transferred to any non-debtor affiliate of the Debtor and (ii) for any week in the Cash Collateral Budget, the amounts for each line item may vary so long as, unless otherwise waived in writing by the Secured Lender and the Committee, the actual expenditures paid in connection with the Cash Collateral Budget beginning the week of April 8, 2011, do not exceed 110% of the aggregate projected expenditures set forth therein, measured on a rolling four-week basis. In exchange for the use of cash collateral, Wells Fargo is granted a valid, perfected and enforceable security interest in and upon all of the assets of the Debtor in which in which it had a security interest prior to the Petition Date and created after the Petition Date. Wells Fargo is also granted an administrative claim to the extent of any diminution in the value of the collateral, which will have priority in the Debtor's bankruptcy case. As additional adequate protection, the Debtor will pay Wells Fargo cash payments of interest at the rate in effect as of the Petition Date and at the times required under the Debtor's prepetition credit agreement with Wells Fargo; and its professional fees and expenses. The Debtor's use of cash collateral will terminate after the earliest to occur of (i) the effective date of any plan of reorganization of the Debtor, (ii) July 15, 2011, (iii) the closing date of a sale of all or substantially all of the Collateral securing the claims and obligations of the Secured Lender, and (iv) the date upon which any termination event, which includes the Debtor's failure to comply with any of the terms or provisions of the Final Cash Collateral, occurs. 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 (Bankr. C.D. Calif. Case No. 11-13454) on Jan. 26, 2011. Craig A. Wolfe, Esq., at Kelley Drye & Warren LLP, in New York, represents the Debtor as counsel. Jeffrey N. Pomerantz, Esq., and Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, serve as conflicts counsel for the Debtor. Scouler & Company, LLC, serves as financial advisors. Imperial Capital, LLC serves as investment banker. Holthouse Carlin & Van Trigt LLP serves as auditors and accountants. The Debtor scheduled $49,370,438 in total assets and $35,305,907 in total liabilities. The Official Committee of Unsecured Creditors in the Debtor's Chapter 11 case is represented by Arent Fox LLP. FTI Consulting Inc. serves as its financial consultants. CORDIA COMMUNICATIONS: Has Access to Cash Collateral Until Aug. 1 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida authorized, in a third interim basis, Cordia Communications Corp., et al., to use alleged cash collateral of Thermo Credit, LLC, until Aug. 1, 2011. As reported in the Troubled Company Reporter on May 20, the Debtors would use the cash collateral to operate its business pending a sale of their assets as a going concern conducted under section 363 of the Bankruptcy Code. The Debtors are authorized to utilize all proceeds of pre- and post-petition receivables and customer payments received or deposited into the Lockbox, Collections Accounts, and Contingency Account. The Lockbox, Collections Accounts and Contingency Account controlled by Thermo contained $319,857 as of the Petition Date; and as of April 29, the net amount advanced by Thermo under the FSA was $1,975,583 (without application of $225,000 in the Contingency Account). Thermo and lockbox processor Klik Technologies Corp. are directed to deliver to the Debtors, on a rolling basis, all customer payments received or deposited into the Lockbox, Collections Accounts or Contingency Accounts. Thermo and Klik will provide the Debtors with daily reports reflecting all transactions and activity occurring in the Lockbox, Collections Accounts, or Contingency Account. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant Thermo a replacement lien on and in cash collateral, receivables, and other property, including but not limited to all amounts contained in or payments received or deposited into the Lockbox, Collections Accounts or Contingency Account, owned, acquired or generated postpetition by the Debtors' continued operations. Thermo will also be afforded the priority in payment. A further hearing on the Debtors' request for cash collateral use will be held on July 14, 2011 at 11:00 a.m. About Cordia Communications Cordia Corporation -- through its operating subsidiaries, Cordia Communications Corp., CordiaIP Corp., My Tel Co, Inc., Northstar Telecom, Inc., Cordia Prepaid Corp., and Cordia International Corp. -- offers business, residential, and wholesale customers local and long distance telecommunications services in more than 60 countries utilizing traditional wireline and Voice over Internet Protocol -- VoIP -- technologies. CCC currently holds licenses to operate in 28 states throughout the contiguous United States, and CCCVA is licensed in Virginia. Winter Garden, Florida-based Cordia Communications Corp., along with affilaites, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-06493) on May 1, 2011. The Debtor estimated its assets and debts at $10 million to $50 million. Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, serves as the Debtors' bankruptcy counsel. Source Capital Group, Inc., serves as investment banker. Development Specialists, Inc., is providing restructuring and management services, including Joseph J. Luzinski as chief restructuring officer. CREATIVE MANAGEMENT: Case Summary & 7 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Creative Management, LLC c/o Walter F. McArdle Spain & Gillon, LLC 2117 Second Avenue North Birmingham, AL 35203 Bankruptcy Case No.: 11-31545 Chapter 11 Petition Date: June 21, 2011 Court: United States Bankruptcy Court Middle District of Alabama (Montgomery) Judge: Dwight H. Williams Jr. Debtor's Counsel: Walter F. McArdle, Esq. SPAIN & GILLON, LLC 2117 Second Avenue North Birmingham, AL 35203 Tel: (205) 328-4100 Fax: (205) 324-8866 E-mail: wfm@spain-gillon.com Scheduled Assets: $6,921,487 Scheduled Debts: $4,887,119 A list of the Company's seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/almb11-31545.pdf The petition was signed by Gursharan S. Phagura, managing member. DALLAS STARS: Said to Be Preparing Bankruptcy to Push Sale ---------------------------------------------------------- Joseph Checkler, writing for Dow Jones' Daily Bankruptcy Review, reports that the Dallas Stars hockey club of the National Hockey Leagure are reportedly preparing to file for Chapter 11 protection to push through a sale to Vancouver businessman Tom Gaglardi. Mr. Checker cited a report by Mike Heika at The Dallas Morning News. Mr. Heika said June 27 there is not much update on the ownership issue, saying Mr. Gaglardi "has had his exclusive negotiating window extended beyond 30 days and he could actually be beyond 60 days right now in the negotiating process." Mr. Heika reported that "Insiders say things are moving forward, but that it is a tough negotiation -- in large part, because the lenders are expert negotiators." "Once Gaglardi's offer is approved by the lenders and the NHL, a hearing in bankruptcy court can be scheduled. Once a hearing in bankruptcy court is scheduled, the process of selling the team will take a huge step forward. In bankruptcy court, the judge will open up the bidding process, everyone will know what Gaglardi's bid is, and others will be able to bid above him," Mr. Heika continued. DELTA AIR: Fitch Affirms Rating on Class B Certificates at 'B' -------------------------------------------------------------- Fitch Ratings has affirmed the ratings of all classes in the following Delta Air Lines Enhanced Equipment Trust Certificate transactions: Delta Air Lines Pass Through Certificates, series 2001-1 -- Class A-2 affirmed at 'BB'; Outlook Stable; -- Class B affirmed at 'B'; Outlook Stable. Delta Air Lines European Enhanced Equipment Pass Through Trust Certificates, series 2001-2 -- Class B affirmed at 'BB-'; Outlook Stable. Delta Air Lines Pass Through Certificates, series 2002-1 -- Class C affirmed at 'B+'; Outlook Stable. Delta Air Lines Pass Through Certificates, series 2007-1 -- Class A affirmed at 'BBB-'; Outlook revised to Positive from Stable. EETCs are hybrid corporate -- structured debt obligations in which payment on the notes is effectively supported by the underlying corporate entity, while structured elements of the transaction provide protection to investors in the event of issuer default. As such, Fitch's ratings on EETC transactions are strongly tied to the Issuer Default Rating (IDR) of the issuing entity and incorporate credit to the reduced probability of default (PD) provided by the collateral and structural enhancements in place. The analysis also incorporates a review of the recovery prospects on the issued securities in the event that they default, similar to Fitch's approach for assigning recovery credit to secured corporate debt. On June 21, 2011, Fitch affirmed Delta's IDR at 'B-' and revised the Rating Outlook to Positive from Stable. Delta's IDR reflects the airline's still highly leveraged capital structure, volatile cash flow generation through the cycle, and exposure to sharp increases in jet fuel costs against a backdrop of turmoil in world energy markets in 2011. The carrier has made significant progress toward lease-adjusted debt reduction over the past 18 months as the U.S. airline industry revenue environment has strengthened. Moving into this summer's peak demand period, the outlook for passenger revenue per available seat mile (RASM) growth remains good, and Fitch expects DAL to report solid passenger yield growth, helping to offset significantly higher fuel costs during the summer. Within the 2001-1 transaction, the class A-2 notes were found to have structural enhancements consistent with their current ratings, leading to their affirmation. Although Fitch's EETC surveillance criteria would suggest no rating uplift for the class B notes over Delta's IDR of 'B-,' the notes were affirmed at one notch over Delta's IDR due to the available liquidity facility and collateral security. As both classes have final expected distribution dates in Sept. 2011, their Outlook was maintained at Stable despite the Positive Outlook on Delta's IDR as no upgrades to the EETC notes are anticipated over the next 12 to 18 months. Within 2001-2, the class B notes were found to have structural enhancements consistent with their current ratings, leading to their affirmation. As the class B notes have a final expected distribution date in Dec. 2011, their Outlook was maintained at Stable despite the Positive Outlook on Delta's IDR as no upgrades to the EETC notes are anticipated over the next 12 to 18 months. While current aircraft market values in 2002-1 exceed the class G and C balances, resulting in loan to value ratios (LTVs) below 100%, a minor decline in those values would result in the class C notes being moderately undercollateralized. As a result, Fitch assumed that the class C notes' LTV% would reach just above 100%, which under Fitch's EETC surveillance criteria is eligible for two notches of rating uplift, leading to their affirmation. As the class C notes have a final expected distribution date in Jan. 2012, their Outlook was maintained at Stable despite the Positive Outlook on Delta's IDR as no upgrades to the EETC notes are anticipated over the next 12-18 months. For 2007-1, Fitch's analysis suggests that the LTV on the class A notes is just above the threshold commensurate with a total of six notches of rating uplift. However, under Fitch's depreciation assumptions, the LTV is expected to decline as the notes amortize. Furthermore, 2007-1 has a heavy concentration of in-demand next generation Boeing 737 and 777 aircraft. As a result, Fitch awarded a total of six notches of rating uplift, leading to the affirmation of the class A notes. Furthermore, the Outlook was revised to Positive, consistent with the Outlook on Delta's IDR. Fitch will continue to monitor the transactions and take appropriate rating actions as necessary. DETROIT, MICHIGAN: Fitch Downgrades Rating on LTGOs to 'B+' ----------------------------------------------------------- In the course of surveillance Fitch Ratings has taken these rating actions on the city of Detroit: -- Approximately $453 million unlimited tax general obligation (ULTGO) bonds downgraded to 'BB-' from 'BB+'; -- Approximately $486 million limited tax general obligation (LTGO) bonds downgraded to 'B+' from 'BB'; -- Approximately $1.5 billion pension obligation certificates series 2005-A and 2006 A and B (Detroit Retirement Systems Funding Trust, MI) downgraded to 'BB-' from 'BB+'. The Rating Outlook is Negative. Rating Rationale: -- The downgrade is based on a lack of progress, despite concerted efforts, to address fiscal imbalances and the increasing challenges on an already highly stressed budget including revenue losses related to a weakened economy and population declines. -- The Negative Outlook reflects Fitch's belief that expectations for further weakening of the city's revenues and continued economic fragility, combined with the challenges of implementing additional spending reductions. -- Sizable budget imbalances, due in part to optimistic revenue projections, have resulted in a large accumulated general fund balance deficit, reduced only by the issuance of deficit reduction bonds. -- Economic indicators, including housing, wealth, and employment-related factors are chronically poor, and sources of economic analysis indicate limited expectation for improvement. -- Dependence on automobile manufacturing results in a sustained very high unemployment rate. -- The debt burden is exceptionally high, offset somewhat by a sizable amount of pension obligation bonds that result in well-funded pension plans. -- The timeliness of financial reporting has improved. What Could Trigger a Downgrade? -- Management's inability to begin to make progress in reducing the accumulated deficit with ongoing measures; -- Inability to manage liquidity needs without reliance on market access for cash flow notes; -- Continued weakening of economic factors. Security: ULTGO bonds are supported by the city's unlimited property tax pledge. LTGO bonds are a first budget obligation. Pension certificates of participation are unconditional contractual obligations of the city, not subject to appropriation. If the city failed to make a COP debt service payment, the contract administrator could file a lawsuit against the city to enforce the obligation, and a court can compel the city to raise the payment through the levy of taxes without limit as to rate or amount pursuant to Michigan law. Credit Summary: As reflected in the 'BB-' ULTGO rating and Negative Outlook, Fitch believes Detroit will continue to struggle economically and financially as it has for the last several years. Economic indicators continue to be exceptionally weak, including an unemployment rate of 19.1% in April 2011, down from 23.2% in April 2010. While some job growth is evident in the year-over-year figures for April, the improvement in the unemployment rate resulted more from the 5.8% decline in the labor force than the 0.8% increase in resident employment. 2010 census data showed a surprisingly large drop in population to 713,777, a 25% decline from the 2000 census. The city administration is focused on identifying blighted areas and consolidating residents into more sustainable neighborhoods. Prospects for economic growth appear minimal, although the manufacturing sector is showing some job gains. A sizable general fund operating deficit in fiscal 2009 added to an already negative fund balance position led to a large accumulated unreserved general fund deficit of $330 million, or a very high 23.6% of spending. Fiscal 2010 would have ended with a $71 million shortfall and an increased accumulated deficit were it not for the issuance of $249 million in deficit bonds. The bonds were designed to eliminate the accumulated deficit and the need for annual short-term cash flow borrowing for the next several years. However, operating results were more negative than expected, due primarily to revenue shortfalls. The general fund deficit for the year stood at $91.1 million, with an unreserved balance of negative $155 million or 12.2% of spending. City officials expect fiscal 2011 to end with another, although smaller, operating deficit of $30-$33 million and an accumulated unreserved fund balance deficit of up to $188 million. In recent fiscal years, audited results have been quite a bit weaker than projections indicated, so Fitch is concerned that results for fiscal 2011 could follow the same trend. As in fiscal 2011, the fiscal 2012 budget was adopted through a city council override of the Mayor's veto. The council reduced spending by $50 million beyond the Mayor's proposal, which included a $5 million surplus; however, it appears at least possible that the majority of the spending cuts will be restored through a budget amendment. Fitch views this type of contention in the budget process negatively. The city should benefit from two recent changes in state legislation. The first affects Detroit directly, preserving some of its taxing powers despite its reduced population. The second is statewide legislation that, if upheld under challenge, would broaden the role of the emergency fiscal manager, a position which Detroit does not currently. However, Fitch believes that severe budget vulnerability for fiscal 2012 remains as tax revenue projections are optimistic and labor reductions needed to achieve balance have not yet been implemented. The city has developed a five-year Deficit Elimination Plan (DEP) which addresses projected increasing out-year budget gaps with a combination of revenue initiatives, largely focused on improving income tax collections, as well as spending reductions focused on pension and medical costs. Fitch believes that the city is realistically expecting improvement in its financial position to be gradual but that some of the assumptions in the DEP are optimistic and alternatives appear limited. Liquidity needs had been addressed with annual cash flow borrowing, which in March 2010 were replaced with a long-term deficit financing totaling $249 million. While Fitch generally views such financing as a credit negative, in this case it was intended to relieve the uncertainty associated with dependence on market access for notes each year. The borrowing also eliminated a portion of the accumulated deficit. Fitch does not expect the city to need to issue cash flow notes in the next few years; a further weakening in cash position could put further pressure on the rating. Debt levels are exceptionally high as compared to Detroit's weak market value of property; overall debt is over 18% of market value. The debt burden is somewhat less dramatic relative to population but still high at $6,397 per capita -- an increase from prior figures due to the incorporation of the lower 2010 Census population. Debt service comprised 16.8% of fiscal 2010 general and debt service fund spending. Concerns about the high debt load, while significant, are somewhat tempered by the sound funding ratios for both of the city's pension programs as a result of issuance of the pension obligation certificates. However, the unfunded liability for other post- employment benefits when last calculated (June 30, 2009) was about the same size as overall debt. The city funds its OPEB obligation on a pay-as-you-go basis, which equates to about one-half of the annual required contribution on an actuarial basis. Agreements with counterparties regarding interest rate swaps on the pension obligation certificates have been modified to limit the city's exposure to large near-term termination payments but continue to present potential risks should a termination event occur. DISCOUNT EXPRESS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Discount Express, Inc. 10000 Bailey Cove Road Huntsville, AL 35803 Bankruptcy Case No.: 11-82224 Chapter 11 Petition Date: June 24, 2011 Court: United States Bankruptcy Court Northern District of Alabama (Decatur) Debtor's Counsel: Tazewell Shepard, Esq. TAZEWELL SHEPARD, P.C. P.O. Box 19045 Huntsville, AL 35804 Tel: (256) 512-9924 E-mail: taze@tshepard.com Scheduled Assets: $714,550 Scheduled Debts: $3,036,636 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/alnb11-82224.pdf The petition was signed by Behjat Mary Saatchian, president. DODDS ELLIOT: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Dodds Elliot Sossaman & Company, LLC 11243 S. Sossaman Rd. Mesa, AZ 85212 Bankruptcy Case No.: 11-17786 Chapter 11 Petition Date: June 21, 2011 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen Jr. Debtor's Counsel: Clint W. Smith, Esq. CLINT W. SMITH PC 1423 S Higley Road, Suite 120 Mesa, AZ 85206 Tel: (480) 807-9300 Fax: (480) 275-5626 E-mail: cws@cwspclaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Thomas M. Dodds, manager. DOMTAR CORP: Moody's Raises Sr. Unsecured Debt Rating From 'Ba2' ---------------------------------------------------------------- Moody's Investors Service upgraded Domtar Corporation's senior unsecured debt ratings to Baa3 from Ba2. In a related rating action, Moody's withdrew the company's Ba1 corporate family rating. The upgrade recognizes Domtar's improved debt structure that is free of secured debt as well as the company's strong credit protection metrics achieved through both debt reduction and strong financial performance. Over the past 15 months, Domtar repaid approximately $1 billion, or roughly 45%, of its adjusted debt. Moody's estimates that Domtar's leverage (adjusted debt to EBITDA) will remain below 2x during the following 12 to 18 months. The rating outlook is stable. RATINGS RATIONALE Domtar's Baa3 senior unsecured rating primarily reflects the company's significant position as the largest uncoated freesheet producer in North America, its favorable cost position within the industry and management's demonstrated commitment to prudent debt management. The rating also reflects Domtar's good liquidity position and expectations that strong operating results should allow the company to maintain credit protection measures well in line with its investment grade rating. The Baa3 rating anticipates that the company will maintain conservative financial policies and will not pressure its balance sheet or liquidity position with excessive dividend payouts, share buy backs or acquisitions. Primary credit challenges include the continuing secular decline in demand in the North American uncoated freesheet market and the uncertainty over Domtar's strategic initiatives to grow its revenue base so as to counteract the decline in its core paper business. The company is also exposed to the inherent volatility of the paper and pulp industry and the likelihood that current peak pricing for UFS and market pulp will eventually decline. The company has very good liquidity. The company's new unsecured $600 million committed credit facility which is undrawn and matures in June 2015. The company also has about $600 million of cash (as of March 2011) and full access to its $150 million accounts receivable securitization program that matures November 2013. Moody's estimates free cash flow generation of over $300 million over the next year, with a significant portion of the excess cash (beyond scheduled dividends) generated being directed to shareholders through share buybacks. The company has no significant debt maturities over the next 2 years and covenant issues are not expected. Upgrades: Issuer: Domtar Corporation -- Senior Unsecured Regular Bond/Debenture, Upgraded to Baa3 from Ba2 Outlook Actions: Issuer: Domtar Corporation --Outlook, Changed To Stable From Positive Withdrawals: Issuer: Domtar Corporation -- Probability of Default Rating, Withdrawn, previously rated Ba1 -- Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-1 -- Corporate Family Rating, Withdrawn, previously rated Ba1 -- Senior Secured Bank Credit Facility, Withdrawn, previously rated Baa2, LGD2, 16 % -- Senior Secured Bank Credit Facility, Withdrawn, previously rated Baa2, LGD2, 16 % -- Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated 67 - LGD4, LGD4, 67 % Domtar's stable outlook reflects Moody's expectation that the uncoated freesheet sector will continue to reduce its supply base to offset declining demand, allowing the company to maintain strong credit protection measures for the its rating at this peak price stage of the commodity cycle. Domtar's rating would be considered for upgrade once the company is no longer concentrated in North American UFS, which is in secular decline, and once the company has made an acquisition to obtain growth to offset such decline. Moody's would expect continuation of strong credit metrics and liquidity at the same time. The ratings could be downgraded if demand or prices fall materially causing deterioration in the company's liquidity profile or should Moody's expectations of normalized RCF/Debt drop below 20% or if Debt to EBITDA exceeds 3x. The principal methodology used in rating Domtar was the Global Paper and Forest Products Industry Methodology, published September 2009. Headquartered in Montreal, Quebec, Domtar Corporation is the largest producer of uncoated freesheet paper in North America and the second largest in the world. The company also operates a paper distribution business and sells market pulp. EAGLES CREST: Combined Plan Hearing Scheduled for Aug. 1 -------------------------------------------------------- Eagles Crest Leasing Group 1, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Iowa on June 24, 2011, a disclosure statement in support of its proposed Chapter 11 Plan of Reorganization. The combined hearing on approval of the disclosure statement and confirmation of the Plan will be held on Aug. 1, 2011, at 1:30 p.m. The Plan designates five (5) Classes of claims and one (1) Interest Class. In this case the Debtor believes that Classes 2, 3, 4, and 5 are impaired and that holders of Claims in each of these Classes are therefore entitled to vote to accept or reject the Plan. The Debtor believes that Classes 1 and 6 are unimpaired. Pursuant to the Plan, Priority Non-Tax Claims in Class 1 and Administrative Convenience Class Claims in Class 3 will be paid in cash in full of the Effective Date of the Plan. Bank of the West's Secured Claim in Class 2 will be paid in full in regular monthly payments pursuant to the terms of a Modified Promissory Note and Loan Documents. Specific details were not provided, except to say that the principal and interest repayments will be calculated based on a 30-year amortization. General Unsecured Creditors in Class 4 will be paid in full in 2 payments, 12 months and 18 months after the Effective Date of the Plan. Subordinated Unsecured Claims of Insiders in Class 5 will receive no dividends. Equity Interests in Class 6 will retain their interests in the Debtor. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/eaglescrest.DS.pdf About Eagles Crest Coralville, Iowa-based Eagles Crest Leasing Group 1, LLC, is a single asset, single purpose Iowa limited liability company formed to develop, construct, own, and operate a 167-unit residential apartment complex since completion of construction. The Company filed for Chapter 11 bankruptcy protection (Bankr. S.D. Iowa Case No. 10-06103) on Dec. 27, 2010. Donald F. Neiman, Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., in Des Moines, Iowa, serve as the Debtor's bankruptcy counsel. The Debtor disclosed 12,778,480 in assets and 11,755,325 in liabilities as of the Chapter 11 filing. Habbo G. Fokkena, the U.S. Trustee for Region 12, was unable to appoint a committee of unsecured creditors in the Debtor's case. ECHO EXECUTIVE: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Echo Executive Park, LLC 15230 North 75th Street Suite 1010 Scottsdale, AZ 85260 Bankruptcy Case No.: 11-18166 Chapter 11 Petition Date: June 23, 2011 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Michael W. Carmel, Esq. MICHAEL W. CARMEL, LTD. 80 E. Columbus Ave. Phoenix, AZ 85012-4965 Tel: (602) 264-4965 Fax: (602) 277-0144 E-mail: michael@mcarmellaw.com Scheduled Assets: $6,724,158 Scheduled Debts: $6,003,236 A list of the Company's 18 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/azb11-18166.pdf The petition was signed by Michael Brown, manager. ENRON CORP: ING Wins Appeal in Commercial Paper Litigation ---------------------------------------------------------- In a case that continues to be closely followed by financial institutions and the securities markets, Bingham, led by partners Sabin Willett, Hal Horwich and Mark Elliott, on June 28 won a further appeal for client ING in the Enron commercial paper litigation, when the U.S. Court of Appeals for the Second Circuit affirmed the ruling below of the U.S. District Court for the Southern District of New York, which had previously directed judgment in favor of two ING funds. The latest decision is Enron Creditors Recovery Corp. v. ALFA, S.A.B. de C.V., ING VP Balanced Portfolio, Inc., and ING VP Bond Portfolio, Inc. The decision affirms an important ruling concerning the immunity from later bankruptcy attack of securities settlements made with distressed borrowers on clearing houses such as the Depository Trust Corporation. In 2003, Enron brought approximately $49 million in preference claims against the two ING funds as part of a $1.2 billion suit brought against more than 100 financial institutions who, in October 2001, had sold holdings of Enron commercial paper prior to its maturity and during the preference period. The trades had settled on the DTC's same-day settlement system. Following a series of adverse rulings in the bankruptcy court, almost all other defendants settled, leaving only the ING funds and one remaining defendant. When the bankruptcy court then denied their motion for summary judgment, the defendants sought an interlocutory ruling. In 2009, the Southern District of New York reversed and directed the bankruptcy court to enter summary judgment for the defendants. Enron then appealed that decision, and oral arguments were held at the Second Circuit in the Fall of 2010, with Mr. Willett arguing on behalf of the ING funds. Prior to this series of decisions, there were few decisions within the Second Circuit or the Southern District of New York as to the scope of the "safe harbor" under Bankruptcy Code section 546e for the millions of "settlement payments" that settle on New York's clearing houses each day, and so the new decision provides much- needed guidance. Messrs. Willett, Horwich and Elliott were assisted by partner Josh Dorchak and associate Eric Heining. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 01-16033) on Dec. 2, 2001, following controversy over accounting procedures that caused its stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP; Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors won confirmation of their Plan in July 2004, and the Plan was declared effective on Nov. 17, 2004. After approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre- bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. EPICEPT CORP: Proposal to Effect Reverse Stock Split Approved ------------------------------------------------------------- EpiCept Corporation held its Reconvened Annual Meeting of Stockholders on June 27, 2011. Stockholders voted to approve a proposal to give the Company's Board of Directors the ability to effect a reverse stock split of its outstanding common stock at a ratio in the range of one for two (1:2) to one for six (1:6), to be determined at the discretion of the Company's Board of Directors. 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. The Company reported a net loss of $15.54 million on $994,000 of revenue 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 March 31, 2011, showed $12.35 million in total assets, $18.37 million in total liabilities, and a $6.02 million total stockholders' deficit. The Company's recurring losses from operations and the Company's stockholders' deficit raise substantial doubt about its ability to continue as a going concern and, as a result, the Company's independent registered public accounting firm, Deloitte & Touche LLP, in Parsippany, New Jersey, included an explanatory paragraph in its report on the Company's consolidated financial statements for the year ended Dec. 31, 2010, which was included in our Annual Report on Form 10-K, with respect to this uncertainty. EXTENDED STAY: No Disbursements for February to May --------------------------------------------------- Joseph Teichman, secretary and general counsel of Extended Stay Inc., filed separate monthly declarations with the Bankruptcy Court disclosing the disbursements made by the company within the period from February to May 2011. Extended Stay didn't make any disbursements in the months of February, March and May 2011, according to Mr. Teichman. The company made two disbursements in April 2011, which refer to payments to Weil Gotshal & Manges LLP for legal services and to the U.S. Trustee's office for ESI's Chapter 11 quarterly fees. Weil Gotshal received $5,377 while the U.S. Trustee's office received $325, according to Mr. Teichman. Mr. Teichman filed the declarations in lieu of ESI's monthly operating report for the respective periods, and in compliance with an agreement between the U.S. Trustee and Weil Gotshal Manges LLP, under which the company won't be required to file the report if it has not made any disbursement during the reporting period. ESI is not part of the restructuring plan that was confirmed by the Court and thus, is still required to continue to file a monthly operating report. ESI's 74 affiliated debtors, which were reorganized pursuant to a confirmed restructuring plan, have been required to file operating reports on a quarterly basis after the restructuring plan took effect on Oct. 8, 2010. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors tapped Gilbert Backenroth, Esq., Mark T. Power, Esq., and Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in New York, as counsel. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection in October 2010. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July 2010. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Creditors' Trust to Get Docs. Collected by Examiner ------------------------------------------------------------------ Extended Stay Inc. entered into an agreement with the court- appointed examiner and a trust for the company's creditors for a turnover of certain documents collected during the examiner's investigation into the company's bankruptcy. The documents include those received by the examiner from his financial adviser, Alvarez & Marsal Dispute Analysis and Forensic Services LLC. Pursuant to the agreement, copies of certain documents received from Alvarez & Marsal will be provided to the trust, which is administered by Hobart Truesdell. The agreement, which is subject to court approval, prohibits the trust from using the documents in any future litigation unless there is prior written agreement from the examiner and his professionals. A full-text copy of the Document Turnover Agreement is available without charge at: http://bankrupt.com/misc/ESI_StipLitigationTrust.pdf About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors tapped Gilbert Backenroth, Esq., Mark T. Power, Esq., and Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in New York, as counsel. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection in October 2010. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July 2010. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Starwood Dismisses Appeal on Reimbursement Order --------------------------------------------------------------- Starwood ESH LLC inked an agreement with CWCapital Asset Management LLC to dismiss its appeal for the reconsideration of a bankruptcy court ruling denying the proposed payment of its fees and expenses. Starwood, together with other investors, filed an appeal before the U.S. District Court for the Southern District of New York to reverse an order handed down by Bankruptcy Judge James Peck, denying Extended Stay Inc.'s motion to pay the Starwood-led investment group as much as $7,629,504, for fees and expenses the group incurred in formulating a bid to sponsor a restructuring plan for the company. The Starwood-CWCapital agreement has already been approved by the District Court. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors tapped Gilbert Backenroth, Esq., Mark T. Power, Esq., and Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in New York, as counsel. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection in October 2010. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July 2010. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). FIRST FEDERAL: Completes $8.7 Million Common Stock Offering ----------------------------------------------------------- First Federal Bancshares of Arkansas, Inc., announced that its common stock rights offering, which expired at 5:00 p.m., Eastern time, on June 21, 2011, is fully subscribed based on preliminary results. Pursuant to the Rights Offering, the Company will issue approximately 2,908,071 shares of its common stock, the maximum number of shares available for issuance in the Rights Offering. The total gross proceeds to the Company from the Rights Offering will be approximately $8.7 million. Rights were exercised at $3.00 per share, the same price per share paid by Bear State Financial Holdings, LLC, who purchased 15,425,262 shares of the Company's common stock in a private placement offering that occurred on May 3, 2011. Because the Rights Offering is fully subscribed based on preliminary results, Bear State will not be required to backstop the Rights Offering by purchasing any unsubscribed shares from the Company in a second private placement. The Company plans to use the proceeds of the Rights Offering to make capital contributions to the Bank and for other general corporate purposes. About First Federal Bancshares of Arkansas First Federal Bancshares of Arkansas, Inc. (NASDAQ GM:FFBH) -- http://www.ffbh.com/-- is a unitary savings and loan holding company for First Federal Bank, a community bank serving consumers and businesses with a full range of checking, savings, investment and loan products and services. The Bank, founded in 1934, conducts business from 20 full-service branch locations, one stand-alone loan production office, and 30 ATMs located in Northcentral and Northwest Arkansas. The Company reported a net loss of $4.03 million on $29.82 million of total interest income for the year ended Dec. 31, 2010, compared with a net loss of $45.49 million on $36.04 million in total interest income during the prior year. The Company's balance sheet at March 31, 2011, showed $577.67 million in total assets, $542.88 million in total liabilities and $34.79 million in total stockholders' equity. BKD, LLP expressed substantial doubt about the bank holding company's ability to continue as a going concern. The accounting firm noted that the Company has experienced significant losses in recent years and has significant levels of nonperforming assets. Furthermore, the Company has entered into a written agreement with the Office of Thrift Supervision which requires the Company to meet certain capital requirements by Dec. 31, 2010, which were not met. FIRST INDUSTRIAL: Fitch Upgrades Issuer Default Rating to 'BB' -------------------------------------------------------------- Fitch Ratings has upgraded the credit ratings of First Industrial Realty Trust, Inc. and its operating partnership, First Industrial, L.P. (collectively, First Industrial or the company): First Industrial Realty Trust, Inc. -- Issuer Default Rating (IDR) to 'BB' from 'B+'; -- Preferred stock to 'B+' from 'B-/RR5'. First Industrial, L.P. -- IDR to 'BB' from 'B+'; -- $400 million unsecured credit facility (including a $200 million unsecured term loan and $200 million unsecured revolving credit facility) to 'BB' from 'BB/RR1'; -- $757.6 million senior unsecured notes to 'BB' from 'BB-/RR3'; -- $128.9 million senior unsecured exchangeable notes to 'BB' from 'BB-/RR3'. The Rating Outlook is Stable. The upgrade of First Industrial's IDR to 'BB' from 'B+' reflects the industrial REIT's improved long-term credit profile, including a reduction in net debt to recurring operating EBITDA via recent de-levering equity raises, an improved liquidity position, and management's continued focus on improving the overall quality of the portfolio via non-core asset sales. The two-notch upgrade also takes into account credit concerns including a fixed charge coverage ratio that is expected to be consistent with the 'BB' rating category and weaker portfolio performance relative to other industrial REITs. Although the company's unencumbered property pool provides contingent liquidity, the size of the unencumbered pool continues to decrease due to recent secured debt incurrence, making bondholders increasingly structurally subordinated and potentially limiting financial flexibility over the longer term. As of March 31, 2011, First Industrial's net debt to recurring operating EBITDA ratio was 7.7 times (x), compared with 8.3x and 8.8x as of Dec. 31, 2010 and Dec. 31, 2009, respectively. Improvements stem from the company's reduction in debt via retained cash flow as well as a March 2011 common stock offering at $11.30 per share for net proceeds of approximately $100 million. The company priced another common stock offering on June 1, 2011 at $12.01 per share for net proceeds of approximately $100 million, thereby further reducing leverage on a pro forma basis to approximately 7.5x. Over the next 12-to-24 months, Fitch anticipates that leverage will remain in a range from 7.0x to 7.5x, which is solid for a 'BB' rating, principally due to further reductions in amounts outstanding under the company's credit facility via retained cash flow. Moreover, the company has an adequate risk-adjusted capitalization for the 'BB' rating category, with a risk-adjusted capital ratio of 1.3x as of March 31, 2011 and 1.4x pro forma for the recent common stock offering. In a more adverse case than currently anticipated by Fitch in which the company does not continue to utilize retained cash flow to repay debt, net debt to recurring operating EBITDA could sustain above 8.0x, which could result in negative rating momentum. Recent capital raises have substantially improved First Industrial's near-term liquidity profile. As of March 31, 2011 and pro forma for recent transactions, the company's sources of liquidity divided by uses of liquidity result in a liquidity coverage ratio of 1.5x through Dec. 31, 2012. Sources of liquidity include unrestricted cash, availability under the company's unsecured credit facility pro forma for the $178.3 million secured debt financing in May 2011, $100 million common stock offering in June 2011, additional debt reductions, and the assumption of debt via a joint venture property acquisition, as well as projected retained cash flows after dividends. Uses of liquidity include debt maturities and projected recurring capital expenditures. Liquidity coverage would be 1.4x if the company recasts its unsecured credit facility for total borrowing capacity of $350 million and if 80% of upcoming secured debt is refinanced. Fitch has a favorable view towards First Industrial's management team's continued focus on improving the overall quality of the portfolio via non-core asset sales. For example, First Industrial sold 13 properties at an in-place capitalization rate of 8.1% in 1Q2011 and 4 properties at an in-place capitalization rate of 7.8% in 2Q2011, generating total net proceeds of $31 million. At the same time, the company has pursued new investment opportunities including the acquisition of the company's net lease joint venture partner's 85% equity interest in a distribution center in Houston, TX. The company's fixed charge coverage ratio (recurring operating EBITDA less recurring capital expenditures and straight-line rent adjustments divided by total interest incurred and preferred dividends) was 1.3x for the trailing twelve months ended March 31, 2011 compared with 1.2x in both 2010 and 2009. The modest improvement stems from a reduction in interest expense due to debt reduction despite an increase weighted average cost of debt capital and declining same-property NOI. Same-store NOI declined by 0.9% in 1Q2011 after declining by 2.7% in 2010 and 3.5% in 2009 because of a combination of occupancy declines and rent roll downs. Portfolio occupancy reached a trough of 81.4% in 1Q2010 and increased to 84.7% in 1Q2011. Fitch projects that over the next 12-to-24 months, fixed charge coverage will approach 1.5x, driven by reduced interest expense stemming from the de-levering equity raises and flat same-store NOI in 2011, followed by low single-digit same-store NOI growth in 2012 as occupancy continues to recover. In a more adverse case than contemplated by Fitch that would result in sustained declines in same-store NOI, fixed charge coverage could sustain below 1.3x, which could result in negative rating momentum. During the recent cycle, First Industrial's portfolio has underperformed a selected group of industrial REIT peers from a same-store NOI standpoint, and occupancy remains below industrial averages according to Property & Portfolio Research, Inc. (PPR). Rents also remain under pressure, with same-store average rent PSF of $4.16 in 1Q2011 compared with $4.51 in 1Q2010 and $4.47 in 1Q2009. Rent roll downs on new leases over the prior rate were negative 10% cash-on-cash in 1Q2011, compared with negative 17% in 4Q2010, and though roll down declines are moderating, Fitch expects continued roll downs over the near term, which should be offset by occupancy gains. The company benefits from a broad tenant roster and geographically diversified portfolio that limit individual customer credit risk and market concentration. As of March 31, 2011, top tenants were Adesa at 2.3% of total rent, Ozburn-Hessey Logistics at 1.9%, and the U.S. Government's General Services Administration at 1.3%. Top markets are Minneapolis/St. Paul at 7.5% of total portfolio rental income, Detroit at 7.3%, and Chicago at 7.1%. These markets recently outperformed the broader U.S. warehouse markets in terms of NOI growth and vacancy rates were generally lower in these markets than in the broader U.S. warehouse markets, although 2010 NOI growth was negative in these markets. The portfolio was 74.9% unencumbered as of March 31, 2011 and 67% unencumbered pro forma for the $178.3 million secured debt financing in May 2011, retirement of $27 million of mortgages in April 2011, and recent assumption of mortgage debt related to FR's joint venture property acquisition. The portfolio was 73.2% and 78.7% unencumbered as of Dec. 31, 2010 and Dec. 31, 2009, respectively, and prior to 2009, over 95% of the portfolio was unencumbered. The reduced size of the unencumbered pool has rendered bondholders increasingly structurally subordinated; secured debt to undepreciated book assets was 14.0% as of March 31, 2011, compared with 14.9% and 10.6% as of Dec. 31, 2010 and Dec. 31, 2009, respectively. That being said, unencumbered asset coverage of unsecured debt (based on unencumbered NOI divided by a capitalization rate of 8.5%) was 1.6x as of March 31, 2011 and 1.8x pro forma for post-March 31, 2011 transactions, which is good for a 'BB' IDR and provides moderate financial flexibility over the longer term. The covenants under the company's credit facility do not currently limit First Industrial's financial flexibility and are not expected to limit flexibility when they become more restrictive in 4Q2011. At that time, the leverage test (total debt divided by total assets valued at a capitalization rate of 8.25%) decreases to 60% from 65%, the unencumbered asset coverage test increases to 1.6x from 1.3x, and the unencumbered debt service coverage test increases to 1.45x from 1.3x. The company also adheres to a fixed charge coverage covenant minimum of 1.2x among other covenants. In 1Q2011 per these covenants, leverage was 55.7%, unencumbered asset coverage was 1.77x, unencumbered debt service coverage was 1.92x and fixed charge coverage was 1.55x, all of which will improve pro forma for the June common stock offering. The Stable Outlook reflects Fitch's view that absent further de- levering equity offerings over the next 12-to-24 months, First Industrial's leverage will remain between 7.0x and 7.5x, which is solid for a 'BB' rating, fixed charge coverage will approach 1.5x, which is appropriate for a 'BB' rating, unencumbered asset coverage of unsecured debt will remain approximately 1.8x, and liquidity coverage will remain above 1.0x. The two-notch difference between First Industrial's IDR and preferred stock rating is consistent with Fitch's criteria for corporate entities with an IDR of 'BB'. Based on Fitch Research on 'Equity Credit for Hybrids and Other Capital Securities,' dated Dec. 29, 2009, First Industrial's preferred stock is 75% equity- like and 25% debt-like since it is perpetual and has no covenants but has a cumulative deferral option. The following factors may result in positive momentum on the ratings and/or outlook: -- Sustained positive trends in occupancy and same-store NOI; -- Fixed charge coverage sustaining above 1.5x (coverage was 1.3x for the trailing twelve months ended March 31, 2011); -- Growth in the unencumbered asset pool while maintaining an unencumbered asset coverage ratio (based on capitalizing unencumbered NOI at a rate of 8.5%) of between 1.5x and 2.0x. The following factors may result in negative momentum on the ratings and/or outlook: -- Fixed charge coverage sustaining below 1.3x; -- Net debt to recurring EBITDA sustaining above 8.0x; -- A sustained liquidity coverage ratio of below 1.0x. Organized on Aug. 10, 1993, First Industrial is a REIT headquartered in Chicago that owns, manages, acquires, sells, develops, and redevelops industrial real estate. As of March 31, 2011, FR had $3.4 billion in gross book assets, a total market capitalization of $2.9 billion, and an equity market capitalization of $1.3 billion. As of March 31, 2011, First Industrial owned 762 industrial properties located in 27 states in the United States and one province in Canada, containing an aggregate of approximately 67.9 million square feet of gross leasable area. FLORIDA EXTRUDERS: Benada Acquires Assets of Debtor and BAF ----------------------------------------------------------- Benada Aluminum Products, LLC has acquired from bankruptcy the assets of Florida Extruders International Inc. and simultaneously, the assets of Benada Aluminum of Florida Inc. Both FEI and BAF are well-established aluminum product firms in Florida. Benada is a newly formed entity owned indirectly by FTL Capital LLC, a St. Louis, Missouri based private equity firm and BAF of Miami, Florida. BAF is owned by Monte Friedkin, who has been in the aluminum products business for more than 50 years. "We are very excited for the potential to increase market share and reduce costs by combining the assets and operations of FEI and BAF" "We are very excited for the potential to increase market share and reduce costs by combining the assets and operations of FEI and BAF," said Monte Friedkin, who became President and CEO of Benada. "Our extensive industry experience coupled with FTL Capital's resources and its financial and strategic leadership, provides Benada with a solid foundation for profitable growth in the future," added Friedkin. "By acquiring the assets of FEI at an attractive price and combining these with the assets and operations of BAF under Monte's superb leadership, Benada becomes an exciting platform on which to build a highly successful aluminum products company," said Paul D. Melnuk, Chairman of Benada and a principal of FTL Capital. "FEI has established an excellent reputation for product quality and BAF has distinguished itself as a customer focused supplier. These attributes are the cornerstone of our strategy to build this business while leveraging the many opportunities for productivity improvement through increased asset utilization, improved efficiency and other cost saving initiatives," added Melnuk. About FTL Capital A St. Louis-based private equity investment and management company formed in 2001 to invest capital of its Principals, Thomas J. Hillman and Paul D. Melnuk. FTL aims to achieve significant returns through investments in middle-market companies that will benefit from additional capital and the operational expertise it brings to solving the business problems of portfolio companies. FTL prefers to work with existing management but will bring new management as circumstances require. FTL focuses its expertise on helping businesses grow profitably over the long term. Underlying that focus are professional skill sets and tested experience deeply rooted in the acquisition, funding, building, restructuring, and monetizing of businesses large and small. About Florida Extruders Headquartered in Sanford, Florida, Florida Extruders International, Inc. -- http://www.floridaextruders.com/-- was formed in 1989 and is a low cost, vertically integrated aluminum extruder, window, sliding glass door, and patio screen door manufacturer, and building products distributor. It filed a bare- bones Chapter 11 petition (Bankr. M.D. Fla. Case No. 11-07761) on April 25, 2011. The case has been assigned to Judge K. Rodney May. Christopher C. Todd, Esq., at McIntyre, Panzarella, Thanasides, serves as the Debtor's counsel. The secured lender Wells Fargo Bank NA, owed $13.2 million, offered financing for the Chapter 11 case. Florida Extruders International Inc. was sold at an open-outcry auction for $11.8 million to Benada Aluminum Products LLC. The auction drove up the price tag for the business by more than $3 million. A bankruptcy judge has approved the sale. FRONTIER COMMUNICATIONS: Moody's Affirms 'Ba2' Corp. Family Rating ------------------------------------------------------------------ Moody's Investors Service affirmed the Ba2 Corporate Family Rating and Probability of Default Rating of Frontier Communications, Inc. as the Company continues to integrate operations acquired from Verizon in July 2010. Also affirmed were Frontier's Ba2 senior unsecured ratings and the (P)Ba2 rating of the Company's shelf program. In addition, the company's Speculative Grade Liquidity rating was raised to SGL-1 from SGL-2. The ratings outlook remains stable. RATINGS RATIONALE The affirmation reflects Moody's view that Frontier's credit profile remains within the Ba2 parameters established by the rating agency, although the Company's progress in materially improving its credit metrics to be in line with investment grade ratings is tracking behind expectations. Although Frontier is likely to achieve stated cost reduction targets, revenue losses in the acquired Verizon properties, particularly driven by greater than anticipated access line declines and pressure on ARPU weigh on the performance. Moody's believes that it will take roughly one year for Frontier to see a significant improvement in the residential access line and revenue trends, as it will benefit from the network upgrades in the acquired markets, which Moody's expects to last into 2013. However, the turnaround on the commercial side is expected to bear fruit sooner, as management is devoting greater attention than in the past to that segment. The Ba2 Corporate Family Rating largely reflects the integration risk and the turnaround challenge the Company continues to face in assuming the much larger Verizon operations as the downward pressure on wireline revenue and cash flow weighs on the ratings. At the same time, the ratings benefit from the predictability of the Company's cash flow generation and management's stated commitment to delever its balance sheet and drive credit metrics towards investment grade levels. Moody's also notes that Frontier continues to generate positive free cash flow, and adjusted debt to EBITDA leverage is expected to remain below 3.5x over the next year. Although Frontier's estimated $250 million of integration costs are reasonable considering the size of the acquired Verizon properties, the bigger complexities in telecom mergers usually involve information system conversions and billing migration. Moody's notes that the Company has successfully migrated the West Virginia operations onto its own IT platforms last year, and will follow a staged path to convert the remaining twelve states over the next 18 months. While the Company successfully navigated past the major risk of a failed operating systems transition, the Company's current cost structure still reflects a handful of redundant operations and systems. Moody's expects that, absent a turnaround in the revenue trendline, the Company should reach a run-rate EBITDA of approximately $2.5 billion on an adjusted basis, helped by an additional $200 million in cost savings by 2012. Frontier's adjusted EBITDA margins of 47% on an LTM basis at 3/31/2011, are well below the Company's historic mid 50% margins, indicating further room for margin expansion. Moody's has raised Frontier's Speculative Grade Liquidity rating to SGL-1, indicating very good liquidity over the coming twelve months. Despite continued execution risks, Moody's believes that the Company has sufficient cushion in its cash balances and enough discretion in capital expenditures to justify a strong liquidity outlook over the next 12 months. The key liquidity sources taken into consideration include: Frontier's $359 million in cash on hand; a $750 million revolving credit facility maturing in 2014; and expected positive free cash flows through the end of 2011. Moody's notes that free cash flow may be strained in 2012, if the company is unable to reverse the revenue declines in the acquired properties and possible increases in tax charges, but Moody's expects the Company to fund all future cash requirements from cash on hand or committed sources of liquidity. What Could Change the Rating - Up Positive rating momentum could develop if Frontier's financial profile strengthens driven by the success in integrating the acquired Verizon properties, evidenced by margin expansion and topline improvement. Moody's could upgrade Frontier's rating if the Company's leverage (total adjusted debt-to-EBITDA) could be sustained under 3.0x and its free cash flow increases to mid single digit percentage of its total debt. What Could Change the Rating - Down Negative rating pressure could develop if Frontier's integration of the acquired properties adversely affects its operating performance, resulting in a weakened competitive position, evidenced by a rapid acceleration in access-line losses, or if the Company's liquidity becomes strained as a result of significant delays in realizing merger synergies. The rating could also come under pressure if persistent underperformance results in weakened credit metrics, such that leverage cannot be sustained under 3.5x (Moody's adjusted) and free cash flow deteriorates to the low single-digits range (relative to total debt). The principal methodology used in rating Frontier was the Global Telecommunications Industry Methodology, published December 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. GARDENS OF GRAPEVINE: Sues BB&T, et al. to Protect R. Palmeiro -------------------------------------------------------------- The Gardens of Grapevine Development, L.P., and The Gardens of Grapevine Development GP, LLC, commenced an adversary proceeding in the U.S. Bankruptcy Court for the Northern District of Texas against Branch Banking and Trust Company, successor-in-interest to Colonial Bank by acquisition from the FDIC as receiver for Colonial Bank, Amegy Bank National Association, and Compass Bank. GOG currently owns in excess of 192 acres of undeveloped land in Tarrant and Dallas Counties in Texas, which was appraised as having a fair market value of $53,250,000 on October 8, 2010. Pursuant to prepetition agreements executed between the members of GOG's general partner, GOG GP, the sole manager of GOG GP is Rafael Palmeiro, who is not personally a debtor in any bankruptcy case. The Defendants in the adversary proceeding consist of financial institutions with whom GOG and Mr. Palmeiro have conducted business, and, as a result, money is owed by GOG and Mr. Palmeiro to each of these entities. Prepetition, litigation was filed by both Compass and Amegy, which litigation was ultimately reduced to agreed judgments. The dispute with BB&T arises out of two loans, which matured in February 2011, issued to GOG by Colonial Bank in the original principal amounts of $17,550,000 and $1,527,500. Both loans are secured by a first deed of trust on the 192 acres of undeveloped real property owned by GOG. After BB&T acquired Colonial's assets, BB&T posted the Property for foreclosure. The outstanding principal balances at the time the loans matured were $17,050,000 and $1,527,500. Upon commencement of GOG's bankruptcy case, any act against GOG with respect to any claim incident to the Prepetition Litigation/Disputes was stayed pursuant to the automatic stay of Section 362(a) of the Bankruptcy Code, Frank Jennings Wright, Esq., at Wright Ginsberg Brusilow P.C., in Dallas, Texas -- fwright@wgblawfirm.com -- relates. However, Mr. Wright notes, any action to commence or prosecute litigation against Mr. Palmeiro personally, or take action against him or his assets in connection with the Prepetition Litigation/Disputes, is not similarly stayed. The Debtors believe that the case presents the admittedly "unusual circumstances" where a stay of litigation and collection efforts against a non-debtor party -- Mr. Palmeiro -- should be imposed by the Court as essential to the reorganization of the Debtors. Mr. Wright contends that Mr. Palmeiro is irreplacable to the reorganization effort of the Debtors for he is the sole driving force behind the Debtors' efforts to reorganize. At present, Compass and Amegy hold judgments against Mr. Palmeiro, which could result in collection efforts against his personal assets at any time, and the threat of litigation being commenced by BB&T on his guaranty of GOG's debt is both real and imminent, Mr. Wright argues. Accordingly, the Debtors ask the Court, after notice and an expedited hearing, to enter: (a) an initial temporary injunction pursuant to Section 105(a) of the Bankruptcy Code through and including the later of a trial on the merits of the Complaint, or further Court order; and then (b) a further temporary injunction through the earlier of the effective date of a plan of reorganization confirmed for the Debtors, or the closing date of a sale of all or substantially all of GOG's assets, or 120 days enjoining any action by any of the Defendants to proceed in the Prepetition Litigation/Disputes, to commence or continue any other judicial, administrative or other action or proceeding against Mr. Palmeiro and his assets, that was or could have been commenced prepetition, or to enforce any judgment or decree obtained therein. About Gardens of Grapevine The Gardens of Grapevine Development, L.P., filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 11-43260) in Fort Worth, Texas, on June 6, 2011. Frank Jennings Wright, Esq., at Wright Ginsberg Brusilow P.C., in Dallas, Texas, serves as counsel to the Debtor. The Debtor estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities as of the Chapter 11 filing. GARDENS OF GRAPEVINE: Taps Parkway Realtors as Real Estate Broker ----------------------------------------------------------------- The Gardens of Grapevine Development, L.P., and The Gardens of Grapevine Development GP, LLC, seek authority from the U.S. Bankruptcy Court for the Northern District of Texas to employ Parkway Realtors, Inc., as their real estate broker, pursuant to the terms of the Exclusive Listing Agreement dated Oct. 15, 2010, as amended, between GOG and PRI. The Debtors tell the Court that they seek to continue the engagement of PRI because of PRI's familiarity with GOG's primary asset consisting of 192 acres of undeveloped land located in Grapevine, Texas, in both Dallas and Tarrant County. PRI will be paid for its real estate services based upon the terms as set forth in the Listing Agreement, which provides for a sales commission payment of 6% of the gross sales price upon the sale of the Property. Compensation to PRI will, upon the successful completion of a sale, be based strictly on the terms as set forth in the Listing Agreement, and no further fee application will be submitted to the Court for approval. Compensation to PRI will only be paid from the proceeds of a sale of the Property. Sherwood Blount, president of PRI, attests that PRI is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Gardens of Grapevine The Gardens of Grapevine Development, L.P., filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 11-43260) in Fort Worth, Texas, on June 6, 2011. Frank Jennings Wright, Esq., at Wright Ginsberg Brusilow P.C., in Dallas, Texas, serves as counsel to the Debtor. The Debtor estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities as of the Chapter 11 filing. GARDENS OF GRAPEVINE: Taps Wright Ginsberg to Represent Case ------------------------------------------------------------ The Gardens of Grapevine Development, L.P., and The Gardens of Grapevine Development GP, LLC, seek permission from the U.S. Bankruptcy Court for the Northern District of Texas to employ Wright Ginsberg Brusilow P.C. as their counsel. As counsel, WGB will: -- render legal advice with respect to the powers and duties of a debtor in Chapter 11; -- negotiate, prepare and file a plan of reorganization and disclosure statement and otherwise promote the financial rehabilitation of the Debtors; -- take all necessary action to protect and preserve the bankruptcy estates, including the prosecution of actions on the Debtors' behalf; and -- render legal advice and perform general legal services. WGB will be paid for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates as in effect on the date services are rendered. The primary attorneys, who will represent the Debtors and their standard hourly rates are: Professional Rate ------------ ---- Frank J. Wright $650 Paul B. Geilich $525 Ashley Ellis $475 Gogi Malik $475 David E. Brusilow $385 David B. Koch $325 Erin C. McGee $250 Other attorneys and support staff may provide services to the Debtors in connection with the bankruptcy proceeding, within these ranges: Partners/Attorneys of counsel $325 to $750 Associates $150 to $500 Paralegals $100 to $150 WGB will also be reimbursed for all expenses actually incurred on behalf of the Debtors, consistent with its normal practices. WGB received a retainer of $100,000 from Rafael Palmeiro, the Manager of GOG-GP, which was applied to filing and legal fees incurred in connection with preparing and filing the Debtors' petitions. WGB holds the balance as a retainer in the case. WGB's future source of payment will be the retainer, sales of property and funding by the Manager of GOG-GP. Frank J. Wright, Esq., a WGB shareholder, assures the Court that neither WGB, nor any of its associates, shareholders, or other members, has an interest materially adverse to the interest of the estate or of any class of creditors as specified in Section 101(14)(B) or (C), of the Bankruptcy Code, or for any other reason. The application to employ WGB is subsequently amended to revise the certificate of service. About Gardens of Grapevine The Gardens of Grapevine Development, L.P., filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 11-43260) in Fort Worth, Texas, on June 6, 2011. Frank Jennings Wright, Esq., at Wright Ginsberg Brusilow P.C., in Dallas, Texas, serves as counsel to the Debtor. The Debtor estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities as of the Chapter 11 filing. GARDENS OF GRAPEVINE: To Sell Property to Lincoln for $6.9-Mil. --------------------------------------------------------------- The Gardens of Grapevine Development, L.P., and The Gardens of Grapevine Development GP LLC seek authority under Section 363 of the Bankruptcy Code from the U.S. Bankruptcy Court for the Northern District of Texas to sell for $6.9 million certain property to Lincoln Property Company Southwest, Inc., free and clear of all liens, claims, interests, and encumbrances. Pursuant to a Contract of Sale, GOG will sell to the Proposed Buyer 16.825 acres of its primary asset, which consists of 192 acres of undeveloped land located in Grapevine, Texas, in both Dallas and Tarrant County. GOG's 192-acre Property was appraised as having a fair market value of $53,250,000 on Oct. 8, 2010. The Property is purportedly encumbered by liens to three financial institutions, property taxing authorities and certain mechanics liens. The Sale Property is located in Grapevine, Tarrant County, Texas, and will be sold for approximately $6.9 million. The Proposed Buyer has delivered an initial earnest money deposit of $25,000 in cash. If the Proposed Buyer does not terminate the Sale Agreement prior to the expiration of the Inspection Period, the Proposed Buyer will deliver an additional earnest money deposit of $50,000. Upon the zoning change required by the Proposed Buyer, the Proposed Buyer will deliver an additional earnest money deposit of $100,000, for a total earnest money deposit of $175,000. The closing date will be no later than 60 days from the later to occur of the expiration of the Inspection Period and the expiration of the Zoning Period. The closing is estimated to occur within four to six months. The Proposed Buyer will acquire an option for 24 months in which to purchase the adjacent 17 acres at a purchase price of $9.50 per net square foot. GOG's real estate broker, Parkway Realtors, Inc., will be entitled to a commission of 6% from the sale proceeds. GOG believes that there is a sufficient business justification for entering into the Sale Agreement and consummating the Proposed Sale, that the Purchase Price is fair and equitable and that the Sale was reached in good faith. Frank Jennings Wright, Esq., at Wright Ginsberg Brusilow P.C., in Dallas, Texas -- fwright@wgblawfirm.com -- contends that the Debtors and their representatives engaged in good faith and arm's length negotiations with the Proposed Buyer, and the Purchase Price is the highest and best offered for the Sale Property. He also asserts that selling the Sale Property will relieve GOG's estate of continuing obligations on account thereof. A copy of the Sale Agreement is available for fee at: http://bankrupt.com/misc/Garden_SaleAgreement_06082011.pdf A hearing will be held on July 5, 2011, to consider the Sale Motion. About Gardens of Grapevine The Gardens of Grapevine Development, L.P., filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 11-43260) in Fort Worth, Texas, on June 6, 2011. Frank Jennings Wright, Esq., at Wright Ginsberg Brusilow P.C., in Dallas, Texas, serves as counsel to the Debtor. The Debtor estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities as of the Chapter 11 filing. GARLOCK SEALING: Seeks Approval of Voluntary Severance Program -------------------------------------------------------------- Chapter11Cases.com reports that related companies Garlock Sealing Technologies LLC, Garrison Litigation Management Group, Ltd. and The Anchor Packing Company asked the bankruptcy court in Charlotte, North Carolina to approve an "exit incentive" or voluntary severance program for certain unionized employees. Chapter11Cases.com relates that the exit incentive being proposed, final documentation of which is apparently still being negotiated, would only be available to members of the International Association of Machinists and Aerospace Workers in Palmyra, New York who (1) are 55 years of age or older and (2) have worked for Garlock for 10 years or more. The incentive program would exclude officers and insiders of the companies. Employees who opt into the exit incentive program would receive a severance payment equal to one and a half weeks for every two (2) years of services, Chapter11Cases.com notes. The report relates that participation in the program would also require approval by Garlock for each employee, it appears from the court filings. According to the debtors, 71 employees currently meet the proposed eligibility requirements and they project that approximately 22 of those employees would opt to take the exit incentive and terminate their employment, Chapter11Cases.com says. The report discloses that based upon that projection, Garlock estimates that the exit incentive payments would cost between $300,000 and $400,000; however, the company's annual wage and benefit expenses would be reduced by approximately $600,000. Chapter11Cases.com says that the plan is being proposed not to permanently reduce Garlock's workforce, but instead to replace experienced, higher-paid employees with new employees who "(a) will receive lower hourly wages; (b) are not eligible for Garlock's defined benefit pension under the current plan and collective bargaining agreement provisions; and (c) will not receive certain special compensation benefits paid to more senior employees under collectively bargained provisions." About Garlock Sealing Headquartered in Palmyra, New York, Garlock Sealing Technologies LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, 2010, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D. N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for asbestos matters. The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases is represented by Travis W. Moon, Esq., at Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC, Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and Jeanna Rickards Koski, Esq., in Washington, D.C. 20005. Joseph W. Grier, III, the Court-appointed legal representative for future asbestos claimants, has retained A. Cotten Wright, Esq., at Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co- counsel. About 124,000 asbestos claims are pending against Garlock in state and federal courts across the country. The Company says majority of pending asbestos actions against it is stale and dormant -- almost 110,000 or 88% were filed more than four years ago and more than 44,000 or 35% were filed more than 10 years ago. A schedule of the pending asbestos actions is available for free at: http://bankrupt.com/misc/Garlock_PendingAsbestosActions.pdf Equity Committee Appointed in HearUSA Bankruptcy Case The United States Trustee filed a bankruptcy court notice last Wednesday in the HearUSA, Inc. chapter 11 case. In the notice, the U.S. Trustee disclosed that it has appointed an Official Committee of Equity Security Holders in the bankruptcy cases. The members include two individual investors and three institutions: Arcadia Opportunity Master Fund, Ltd.; Sherleigh Associates Inc., Profit Sharing Plan; and Meson Capital Partners, LP. The representative from Arcadia Opportunity Master Fund has been appointed as the temporary chairperson for the Committee. GENERAL GROWTH: New GGP Completes $743-Mil. Refinancing of 5 Malls ------------------------------------------------------------------ General Growth Properties, Inc. ("New GGP") announced on June 6, 2011, the refinancing of five shopping malls representing $743 million of new mortgages. These five new fixed-rate mortgages have a weighted average term of 9.2 years and generated cash proceeds in excess of in-place financing of approximately $180 million to GGP. GGP has also been able to lower the weighted average interest rate of these five mortgages from 6.29% to 5.40%, while lengthening the term by approximately five years over that in place. GGP used $139 million of the excess proceeds to pay down mortgage loans on four assets with a weighted average interest rate of 7.31% and weighted average term of 3.1 years. "We continue to execute on our goal of lengthening maturities, reducing our carrying cost and improving our capital structure," said Sandeep Mathrani, chief executive officer of General Growth Properties. In April 2011, GGP completed the refinancing of seven shopping malls representing $1.7 billion of new mortgages. General Growth Properties has ownership and management interest in 169 regional and super regional shopping malls in 43 states. The Company portfolio totals 172 million square feet of space. A publicly-traded real estate investment trust (REIT), GGP is listed on the New York Stock Exchange under the symbol GGP. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 protection on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. General Growth Properties on Nov. 9, 2010, successfully completed the final steps of its financial restructuring and emerged from Chapter 11. GGP successfully restructured approximately $15 billion of project-level debt Recapitalized with $6.8 billion in new equity capital Paid all creditor claims in full achieved substantial recovery for equity holders. As part of its plan of reorganization, GGP has split itself into two separate and independent publicly traded corporations. GGP shareholders as of the record date of Nov. 1, 2010, received common stock in both companies. The new GGP, which will commence trading Nov. 10 on The New York Stock Exchange under the ticker symbol "GGP," is the second-largest shopping mall owner and operator in the country, with more than 183 regional malls in 43 states. The spin-off company, The Howard Hughes Corporation, consists of GGP's portfolio of master planned communities and other strategic real estate development opportunities. This company will trade under the ticker symbol "HHC" on The New York Stock Exchange. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Court Rules in CRF's Favor on $12-Mil. Cure Claim ----------------------------------------------------------------- Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York upheld the Comptroller of the State of New York as trustee of the Common Retirement Fund's cure objection and granted the CRF's request for payment of pendency interest at the default rate from the Petition Date as of April 16, 2009 through the Plan Effective Date of Nov. 9, 2010. The Reorganized Debtors will pay the CRF by wire transfer the amount of $11,683,815 in pendency interest at the default interest. The Reorganized Debtors, however, will retain their right to recover the default interest amount from the CFR to the extent this order is reversed or modified on appeal by a final, non- appealable order and will receive same from the CRF within seven business days of that final, non-appealable order, and the CRF will retain its rights, claims and defenses in connection therewith, Judge Gropper ruled. The Court signed a proposed order submitted by the Reorganized Debtors, consistent with the Court's memorandum of opinion upholding the CRF's cure objection. In the memorandum of opinion, Judge Gropper held that CRF is entitled to postpetition interest on its claim at the contract default rate of 8.95% from the filing of GGP's bankruptcy petition through the Effective Date of the Plan. Judge Gropper explained that payment of default interest in this matter is consistent with the increasing reluctance of courts in construing the requirement of Section 506(b) of the Bankruptcy Code that an oversecured creditor receive "interest," to modify private contractual arrangements imposing default interest rates except where: (i) there has been creditor misconduct; (ii) application of the contractual interest rate would cause harm to the unsecured creditors; (iii) the contractual interest rate constitutes a penalty; or (iv) its application would impair the debtor's fresh start, citing In re P.G. Realty Co., 220 B.R. at 780; see also In re Vest Assocs., 217 B.R. at 702-03. Judge Gropper found that none of the factors typically justifying the nullification of a default rate interest provision are present in this matter. GGP has stipulated that, as a stand- alone rate, the Default Rate is not a penalty, Judge Gropper said. GGP has also not alleged any misconduct by CRF, the bankruptcy judge noted. Payment of default interest would neither inflict harm on other unsecured creditors nor impair GGP's fresh start because GGP was exceedingly solvent when it emerged from bankruptcy, the bankruptcy judge opined. As a matter of statute, the question whether a bankruptcy default clause should be treated as an invalid ipso facto clause depends on whether the contract at issue is an executory contract or unexpired lease, Judge Gropper explained. GGP does not assert that the Homart Note is an executory contract, much less an unexpired lease, accepting the obvious fact that the only obligation remaining to be performed by GGP under the Homart Note is repayment and that loan agreements are generally not considered to be executory contracts, according to Judge Gropper. "There are situations in which courts have declined to enforce a bankruptcy default clause, such as where the clause may impede a debtor's ability to enjoy a 'fresh start.' However, there are no such concerns in this case," Judge Gropper stated. GGP and its affiliated debtors are highly solvent, GGP has confirmed a Plan, and it emerged from bankruptcy months ago. GGP's ability to exercise its right to file for bankruptcy was not impaired, nor was its ability to enjoy a fresh start, Judge Gropper stated. Judge Gropper also held that imposition of the Default Rate in this case is consistent with Section 1123(d) of the Bankruptcy Code, even if not mandated by its terms. If the interest rate here is determined strictly "in accordance with the underlying agreement and applicable nonbankruptcy law" as provided in Section 1123(d), the Default Rate was triggered by GGP's Chapter 11 filing, Judge Gropper concluded. A full-text copy of the memorandum of opinion dated June 16, 2011, is available for free at: http://bankrupt.com/misc/ggp_June16Memorandum.pdf About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 protection on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. General Growth Properties on Nov. 9, 2010, successfully completed the final steps of its financial restructuring and emerged from Chapter 11. GGP successfully restructured approximately $15 billion of project-level debt Recapitalized with $6.8 billion in new equity capital Paid all creditor claims in full achieved substantial recovery for equity holders. As part of its plan of reorganization, GGP has split itself into two separate and independent publicly traded corporations. GGP shareholders as of the record date of Nov. 1, 2010, received common stock in both companies. The new GGP, which will commence trading Nov. 10 on The New York Stock Exchange under the ticker symbol "GGP," is the second-largest shopping mall owner and operator in the country, with more than 183 regional malls in 43 states. The spin-off company, The Howard Hughes Corporation, consists of GGP's portfolio of master planned communities and other strategic real estate development opportunities. This company will trade under the ticker symbol "HHC" on The New York Stock Exchange. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Rouse Gets Favorable Ruling in PI Suit ------------------------------------------------------ Judge William E. Smith of the U.S. District Court for the District of Rhode Island granted a motion for summary judgment filed by Rouse Providence, LLC, a debtor affiliate of General Growth Properties, Inc., in the lawsuit captioned Melissa M. Reyes v. Standard Parking Corporation, CA. No. 09-166 S. In 2006, Rouse executed a contract with Standard whereby Standard agreed to manage Providence Mall's parking garage through Sept. 30, 2008. In 2009, Ms. Reyes sued Standard due to injuries sustained when she was driving through the Mall's parking garage on June 10, 2008. Standard then filed a third-party complaint for contribution and common law indemnity against Henry Luke Co., Inc., whom Rouse contracted to perform repairs to the garage. Standard has twice amended its complaint to add AlliedBarton Security Services, LLC, and Rouse. In its summary judgment motion, Rouse asserted that Standard is enjoined from pursuing the claims because they were permanently discharged pursuant to the U.S. Bankruptcy Court for the Southern District of New York's order confirming Rouse's Chapter 11 plan of reorganization. Standard counters that its claims were not subject to the bar date or the confirmation order because they had not arisen as of Rouse's bankruptcy petition date, but even if they had, they remain valid because it did not receive adequate notice of the bar date. The district judge ruled that because Rouse owned the Mall when Ms. Reyes was injured, Standard, as manager of the garage, received a contingent right to payment for contribution and common-law indemnification the moment Ms. Reyes served Standard with her complaint. Likewise, because the events triggering Standard's breach of contract claim against Rouse all arose prepetition, Standard had a prepetition contingent breach of contract claim against Rouse, within the meaning of Section 101(5) of the Bankruptcy Code, Judge Smith opined. Accordingly, the District Court concludes that Standard was required to file proof of these claims with the Bankruptcy Court by the bar date. Since it did not, and because its alternative notice argument fails, Standard is permanently enjoined from pursuing these pursuant to the Bankruptcy Court's Confirmation Order, the district judge held. A full-text copy of the District Court's order dated June 14, 2011 is available for free at: http://ResearchArchives.com/t/s?7657 About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 protection on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. General Growth Properties on Nov. 9, 2010, successfully completed the final steps of its financial restructuring and emerged from Chapter 11. GGP successfully restructured approximately $15 billion of project-level debt Recapitalized with $6.8 billion in new equity capital Paid all creditor claims in full achieved substantial recovery for equity holders. As part of its plan of reorganization, GGP has split itself into two separate and independent publicly traded corporations. GGP shareholders as of the record date of Nov. 1, 2010, received common stock in both companies. The new GGP, which will commence trading Nov. 10 on The New York Stock Exchange under the ticker symbol "GGP," is the second-largest shopping mall owner and operator in the country, with more than 183 regional malls in 43 states. The spin-off company, The Howard Hughes Corporation, consists of GGP's portfolio of master planned communities and other strategic real estate development opportunities. This company will trade under the ticker symbol "HHC" on The New York Stock Exchange. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GIORDANO'S ENTERPRISES: Popowcer Katten Retained as Accountants --------------------------------------------------------------- The Hon. Honorable Pamela S. Hollis of the U.S. Bankruptcy Court for the Northern District of Illinois authorized Philip V. Martino, the duly appointed Chapter 11 trustee in the bankruptcy cases of Giordano's Enterprises, Inc., et al., to retain Lois West and the firm of Popowcer Katten, Ltd. as his accountants. As reported in the Troubled Company Reporter on June 7, 2011, West and Popowcer is providing the trustee with general accounting services and tax services necessary to comply with federal, state, and local tax laws and regulations. The trustee related that the hourly rates for Popowcer's professionals range from $120 to $290. To the best of Trustee's knowledge, West and Popowcer are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. About Giordano's Enterprises Chicago, Illinois-based Giordano's Enterprises, Inc., was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". At present, Giordano's operates six company owned stores in Chicagoland, four joint venture stores, and thirty-five franchisee locations. In addition, Giordano's operates Americana Foods, Inc., located in Mount Prospect, Illinois, that serves as the commissary for the majority of food products purchased by the Illinois locations. An affiliated real estate holding company, Randolph Partners, LP, owns 12 restaurant buildings that are leased to four of the company-owned locations, two of the joint venture locations and six of the franchisee locations. The other 33 locations are leased from third party landlords; two for the Giordano's locations, two for the joint venture locations and 29 for the franchise locations. Giordano's is the lessee and subleases the restaurant facility for 22 of the 29 franchise third party leases. JBA Equipment Finance, Inc, another affiliated entity, leases restaurant equipment packages to eight franchisee locations. Giordano's Enterprises and 26 affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on Feb. 16, 2011. Six additional affiliates filed for Chapter 11 protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A. Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at Arnstein & Lehr, LLP, in Chicago, serve as the Debtors' bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in assets and $45,538,574 in liabilities as of the Chapter 11 filing. Certain of the Debtors owe Fifth Third Bank not than $13,560,662, pursuant to loans and financial accommodations, and $31,927,998 under a business loan as of the Petition Date. Fifth Third has agreed to provide DIP financing of up to $35,983,563 to the Debtors. Philip V. Martino is the duly appointed Chapter 11 trustee in the Debtors' bankruptcy cases. GIORDANO'S ENTERPRISES: William Blair Hired as Investment Banker ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois authorized Philip V. Martino, the duly appointed Chapter 11 trustee in the Chapter 11 cases of Giordano's Enterprises, Inc., et al., to retain William Blair & Company, L.L.C. as his investment banker and Hilco Real Estate, LLC, as his real estate advisor. The trustee is also authorized to keep certain documents ancillary to that retention be filed under seal. As reported in the Troubled Company Reporter on June 7, 2011, the trustee will retain Blair and Hilco to advise in connection with: (a) an M&A Transaction, and (b) a Lease Transaction. a. An M&A Transaction is a transaction involving, among other things: (a) an acquisition, merger, consolidation or other transaction with another party through which any assets of the Company are, directly or indirectly, combined with or transferred to another party outside the ordinary course of business; (b) the acquisition, directly or indirectly, by a buyer or buyers of equity interests or options, or any combination thereof constituting a majority or controlling portion of the stock of the Company or possessing a majority or controlling portion of the voting power of the Company; and (c) any other purchase or acquisition, directly or indirectly, by a buyer or buyers of a majority or controlling portion of the securities or other interests of the Company (through, merger, sale, exchange or otherwise). b. A Lease Transaction is referred to as a transaction, at the Company's direction, regarding a real property lease of the Company providing for a rent reduction, term shortening, or non-economic modifications, or extensions or new leases on owned property. Blair and Hilco is performing these services in connection with a Possible Transaction as the Company may reasonably request: a. familiarize themselves to the extent they deem appropriate with the business, operations, financial condition and prospects of the Company; b. prepare an analysis of strategic alternatives and recommend the strategy intended to achieve the optimal outcome for the Company; and c. report to and participate in discussions with the Company's trustee concerning each possible transaction; As consideration for the services to be provided Blair and Hilco will receive: 1. A monthly fee in the amount of $75,000. 2. Upon the consummation of an M&A Transaction, Blair will be paid a fee: Incremental Aggregate Consideration (in millions) Fee -------------------- ---- $0 up to but not including $25 0.00% of Aggregate Consideration in such range $25 1.50% of Aggregate Consideration More than $25, up to but not including $35 3.00% of Aggregate Consideration in such range $35 up to 3.50% of Aggregate Consideration but not including $45 in such range $45 up to 5.50% of Aggregate Consideration but not including $55 in such range $55 and above 6.00% of Aggregate Consideration in such range 3. Lease Transaction: i. Rent Reductions: 5% of any lease savings achieved with respect to any leases successfully renegotiated; ii. Term Shortening: 1.75% of the gross lease savings secured over any shortened term; iii. Non-Economic Modifications: $1,500 per lease; iv. Other: a fee equal to the greater of (i) $10,000 or (ii) 3% of the projected base rent payable over the term of a lease extension new lease executed on an owned property. 4. Process Break. Upon a voluntary termination of Blair's engagement by the Company in writing, the Company will pay to Blair a fee with respect to any Secured Debt Transaction in an amount less than the fees that would otherwise be payable under the Engagement Agreement, and as to the extent agreed to in writing between Blair and the Company on the date hereof. About Giordano's Enterprises Chicago, Illinois-based Giordano's Enterprises, Inc., was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". At present, Giordano's operates six company owned stores in Chicagoland, four joint venture stores, and thirty-five franchisee locations. In addition, Giordano's operates Americana Foods, Inc., located in Mount Prospect, Illinois, that serves as the commissary for the majority of food products purchased by the Illinois locations. An affiliated real estate holding company, Randolph Partners, LP, owns 12 restaurant buildings that are leased to four of the company-owned locations, two of the joint venture locations and six of the franchisee locations. The other 33 locations are leased from third party landlords; two for the Giordano's locations, two for the joint venture locations and 29 for the franchise locations. Giordano's is the lessee and subleases the restaurant facility for 22 of the 29 franchise third party leases. JBA Equipment Finance, Inc, another affiliated entity, leases restaurant equipment packages to eight franchisee locations. Giordano's Enterprises and 26 affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on Feb. 16, 2011. Six additional affiliates filed for Chapter 11 protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A. Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at Arnstein & Lehr, LLP, in Chicago, serve as the Debtors' bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in assets and $45,538,574 in liabilities as of the Chapter 11 filing. Certain of the Debtors owe Fifth Third Bank not than $13,560,662, pursuant to loans and financial accommodations, and $31,927,998 under a business loan as of the Petition Date. Fifth Third has agreed to provide DIP financing of up to $35,983,563 to the Debtors. Philip V. Martino is the duly appointed Chapter 11 trustee in the Debtors' bankruptcy cases at the behest of the U.S. Trustee. Mr. Martino filed a $3,000,000 bond. GIORDANO'S ENTERPRISES: Quarles & Brady to Represent Trustee ------------------------------------------------------------ The Hon. John H. Squires of the U.S. Bankruptcy Court for the Northern District of Illinois authorized Philip V. Martino, the Chapter 11 trustee in the bankruptcy cases of Giordano's Enterprises, Inc., et al., to retain Quarles & Brady LLP as his general bankruptcy counsel. As reported in the Troubled Company Reporter on June 7, 2011, Christopher Combest, and the other attorneys and paraprofessionals associated with Q&B will represent the trustee in all phases of the Debtors' Chapter 11 case. To the best of the trustee's knowledge, Q&B is a "disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Q&B can be reached at: Christopher Combest, Esq. QUARLES & BRADY LLP 300 N. LaSalle Street, Suite 4000 Chicago, IL 60654 Tel: (312) 715-5000 Fax: (312) 632-1727 E-mail: christopher.combest@quarles.com About Giordano's Enterprises Chicago, Illinois-based Giordano's Enterprises, Inc., was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". At present, Giordano's operates six company owned stores in Chicagoland, four joint venture stores, and thirty-five franchisee locations. In addition, Giordano's operates Americana Foods, Inc., located in Mount Prospect, Illinois, that serves as the commissary for the majority of food products purchased by the Illinois locations. An affiliated real estate holding company, Randolph Partners, LP, owns 12 restaurant buildings that are leased to four of the company-owned locations, two of the joint venture locations and six of the franchisee locations. The other 33 locations are leased from third party landlords; two for the Giordano's locations, two for the joint venture locations and 29 for the franchise locations. Giordano's is the lessee and subleases the restaurant facility for 22 of the 29 franchise third party leases. JBA Equipment Finance, Inc, another affiliated entity, leases restaurant equipment packages to eight franchisee locations. Giordano's Enterprises and 26 affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on Feb. 16, 2011. Six additional affiliates filed for Chapter 11 protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A. Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at Arnstein & Lehr, LLP, in Chicago, serve as the Debtors' bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in assets and $45,538,574 in liabilities as of the Chapter 11 filing. Certain of the Debtors owe Fifth Third Bank not than $13,560,662, pursuant to loans and financial accommodations, and $31,927,998 under a business loan as of the Petition Date. Fifth Third has agreed to provide DIP financing of up to $35,983,563 to the Debtors. Philip V. Martino is the duly appointed Chapter 11 trustee in the Debtors' bankruptcy cases. GIORDANO'S ENTERPRISES: William Dart Retained for Tax Appeals ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois authorized Philip V. Martino, the duly appointed Chapter 11 trustee in the Chapter 11 cases of Giordano's Enterprises, Inc., et al., to retain the firm of William Dart, LLC, as his special counsel for the purpose of prosecuting two real estate tax appeals. As reported in the Troubled Company Reporter on June 7, 2011, prepetition, WD was retained by Debtors to prosecute two certain real estate tax appeals in Illinois, which work includes, but is not necessarily limited to, seeking reductions in the assessed value of the properties at issue and pursuing claims for real estate tax refunds, in connection properties owned by Debtors and located at 9411-15 W. Higgins Road in Rosemont Illinois, and at 740 N. Rush Street, in Chicago, Illinois. The trustee will retain William E. Dart (a non-attorney), attorney George Cahill. WD will receive compensation on a contingency basis, with WD'S fee to be a percentage of the amount of tax savings achieved or tax refund obtained for the Debtors. WD agreed to cap its fee with regard to any reduction in the 2010 assessed valuation for the rush property (Parcel No. 17-10-101- 013) obtained from the Assessor or the Board of Review at $15,000. Moreover, to the extent WD obtains tax refunds for the Debtors' estates with regard to the rush property, payment will not be due WD until the amount of any refund has been received by the trustee in immediately available funds. To the best of the trustee's knowledge, WD is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Giordano's Enterprises Chicago, Illinois-based Giordano's Enterprises, Inc., was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". At present, Giordano's operates six company owned stores in Chicagoland, four joint venture stores, and thirty-five franchisee locations. In addition, Giordano's operates Americana Foods, Inc., located in Mount Prospect, Illinois, that serves as the commissary for the majority of food products purchased by the Illinois locations. An affiliated real estate holding company, Randolph Partners, LP, owns 12 restaurant buildings that are leased to four of the company-owned locations, two of the joint venture locations and six of the franchisee locations. The other 33 locations are leased from third party landlords; two for the Giordano's locations, two for the joint venture locations and 29 for the franchise locations. Giordano's is the lessee and subleases the restaurant facility for 22 of the 29 franchise third party leases. JBA Equipment Finance, Inc, another affiliated entity, leases restaurant equipment packages to eight franchisee locations. Giordano's Enterprises and 26 affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on Feb. 16, 2011. Six additional affiliates filed for Chapter 11 protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A. Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at Arnstein & Lehr, LLP, in Chicago, serve as the Debtors' bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in assets and $45,538,574 in liabilities as of the Chapter 11 filing. Certain of the Debtors owe Fifth Third Bank not than $13,560,662, pursuant to loans and financial accommodations, and $31,927,998 under a business loan as of the Petition Date. Fifth Third has agreed to provide DIP financing of up to $35,983,563 to the Debtors. Philip V. Martino is the duly appointed Chapter 11 trustee in the Debtors' bankruptcy cases. GM PINE: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------ Debtor: GM Pine Street Garage, LLC c/o Robert S. Simon PO Box 820035 Sellwood Station Portland, OR 97282-1035 Bankruptcy Case No.: 11-17493 Chapter 11 Petition Date: June 23, 2011 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Shelly Crocker, Esq. CROCKER LAW GROUP PLLC 720 Olive Wy Suite 1000 Seattle, WA 98101 Tel: (206) 624-9894 E-mail: scrocker@crockerlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Jimmy Drakos, Willamette Capital Group LLC manager. Debtor's List of 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Old Republic National $2,500,000 Title c/o Prentice-Hall Corp Registered Agent 380 Jackson STR #700 Saint Paul, MN 55101 Nelson Electric, Inc. $75,000 9620 Stone AVE N, Suite 201 Seattle, WA 98103 Bush Road & Hitchings, $21,962 Inc. 2009 Minor AVE E Seattle, WA 98102 Savitt Bruces & Willey Prof. services $10,000 LLP Krazan & Assoc., Inc. $7,500 Delaware Dept of Revenue Notice only Unknown Carvel Sate Office Bldg Delaware Dept of Revenue Notice only Unknown Thomas Collins Bldg Delaware Dept of Revenue Notice only Unknown IRS Notice only Unknown King County Property Tax Property taxes Unknown WA Dept of Revenue Notice only Unknown GREENWOOD ESTATES: Stay Modified to Allow Capmark to Foreclose -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois has modified the automatic stay to allow Capmark to proceed with its Complaint for Breach of Contract, Breach of Guaranty, Replevin, Foreclosure and Immediate Appointment of A Receiver entitled Capmark Finance Inc. v. Greenwood Estates MHC, LLC, pending as Case No. 41D01-1007-MF-00333 (the "Foreclosure Action") in the Johnson County Superior Court in Johnson County, Indiana. The Court further ordered Debtor Greenwood Estates MHC, LLC's former property manager, Capital First Realty Inc. to immediately transfer to the Debtor's new property manager, McKinley, Inc., any remaining cash, business records, personal property and all other property not already transferred to McKinley. About Greenwood Estates Chicago, Illinois-based Greenwood Estates MHC, LLC, is the owner of a manufactured community, consisting of 594 sites, situated on 96.358 acres located at 1598 US 31 South, Greenwood, Indiana. The Company filed for Chapter 11 bankruptcy protection on July 30, 2010 (Bankr. N.D. Ill. Case No. 10-33988). Eugene Crane, Esq., Arthur G. Simon, Esq., and Scot R. Clar, Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago, assisted the Debtor in its restructuring effort. Counsel's services were terminated on May 4, 2011. In its schedules, the Debtor disclosed assets of $28,601,206 and liabilities of $25,456,180 as of the petition date. GREENWOOD VILLAGE: Fitch Affirms 'BB+' Rating on Revenue Bonds -------------------------------------------------------------- Fitch Ratings has affirmed its 'BB+' rating on these Indiana Health Facilities Financing Authority revenue bonds issued on behalf of Greenwood Village South: -- $21.6 million series 2006A*; -- $11.8 million series 1998. *Underlying rating. The bonds are variable-rate demand bonds supported by an irrevocable, direct-pay confirming letter of credit issued by Banco Santander Central Hispano S.A which Fitch was not asked to rate. The Rating Outlook is Stable. Rating Rationale: -- The 'BB+' rating reflects GVS' light liquidity metrics, stable operating performance and adequate debt service coverage. -- Occupancy across all levels of care has remained relatively stable since Fitch's last rating action in December 2009. -- Capital structure risk will improve through the refunding of the series 2006A variable rate demand bonds with a bank qualified direct placement. -- GVS benefits from its management contract with Life Care Services. Key Rating Drivers: -- Maintaining stable occupancy and adequate operating profitability over the next 12 months. Security: Bondholders are secured by a security interest in the gross revenues of the corporation, a first mortgage lien on property and a debt service reserve fund. Credit Summary: The 'BB+' rating reflects GVS' light liquidity metrics, stable operating performance and adequate debt service coverage. At March 31, 2011 GVS' unrestricted cash and investments totaled $10.2 million, which translates into 202 days cash on hand, a 4.1 times (x) cushion ratio and 31% cash-to-long term debt, all of which are below the respective 2010 'BBB' category medians of 372.7, 6.1x and 48.6%. Occupancy has been stable across each level of care over the last three years averaging 89% in the ILUs, 87% in ALUs and 85% in the SNF. At March 31, 2011 occupancy in the independent, assisted and skilled nursing units was 86.6%, 92.4% and 84.6%, respectively. Operating profitability has been stable with net operating margins of 10% and 8% in fiscal 2009 and 2010, respectively which compares favorably to the 'BBB' category median of 6.8%. Similarly, net operating margins-adjusted of 19.5% and 17.7% in 2009 and 2010 are comparable to the 'BBB' category median of 18.8%. Coverage of MADS in fiscal 2009 and 2010 has been adequate at 1.7x and 1.5x, respectively, reflecting, in part, GVS lower price point. GVS expects to refund its $21.6 million series 2006A variable rate demand bonds with a bank qualified direct placement on or about June 30th. Fitch cited the need to renew or replace the letter of credit (LOC) as a critical rating factor in its prior rating action. The refinancing of the series 2006A issue is viewed favorably as it eliminates remarketing and LOC downgrade risk and extends out the capital commitment for five years. However, GVS retains the associated renewal risk. Certain operating covenants under the bank documents are tighter compared to the series 1998 trust indenture which should benefit the series 1998 bondholders. However, Fitch notes that the series 1998 bondholders are in a minority position relative to the bank's interest in the event of any covenant violations and / or remedies. The Stable Outlook reflects Fitch's expectation that GVS will continue to experience stable occupancy and solid operating profitability over the next 12 months. Home values in the primary service area have been stable to slightly higher over the last 12 months and are expected to remain firm going forward. GTP ACQUISITION: Fitch Expects to Rate Class F Notes at 'BB-' ------------------------------------------------------------- Fitch Ratings has issued a presale report on GTP Acquisition Partners I, LLC Secured Tower Revenue Notes, Global Tower Series 2011-2. Fitch expects to rate these transactions: -- $490,000,000 class C 'Asf', Outlook Stable; -- $155,000,000 class F 'BB-sf', Outlook Stable. The expected ratings are based on information provided by the issuer as of June 21, 2011. The transaction is an issuance of notes backed by mortgages representing no less than 90% of the annualized run rate net cash flow and guaranteed by the direct parent of the borrower. Those guarantees are secured by a pledge and first priority perfected security interest in 100% of the equity interest of the borrower, which owns or leases 2,472 wireless communication sites, and of its direct parent, respectively. Both the direct and indirect parents of the borrower are special purpose entities. At closing, the issuer will use the proceeds of the note issuance to refinance the issuer's series 2007-1 transaction. The $490 million series 2011-2 class C note and the $70 million series 2011-1 class C note will be pari passu. GTP ACQUISITION: Moody's Assigns P(Ba3) Rating to Class F Notes --------------------------------------------------------------- Moody's Investors Service has assigned provisional ratings to the Class C and Class F Secured Tower Revenue Notes, Series 2011-2, to be issued by GTP Acquisition Partners I, LLC. The Issuer is an indirect wholly owned subsidiary of Global Tower Holdings, LLC a leading independent (non-carrier) owner/operator of wireless towers in the U.S., which in turn is controlled by affiliated funds of The Macquarie Group. Moody's also stated that its ratings on the existing series of notes previously issued by the Issuer are not expected to be downgraded or withdrawn solely as a result of this prospective issuance. The complete rating actions are: Issuer Entity: GTP Acquisition Partners I, LLC -- $490,000,000 Class C Secured Tower Revenue Notes, Global Tower Series 2011-2, rated (P) A2 (sf) -- $155,000,000 Class F Secured Tower Revenue Notes, Global Tower Series 2011-2, rated (P) Ba3 (sf) The Issuer has the ability to issue multiple series of notes. A portion of the proceeds of the Offered Notes will be applied to repay the previously issued $480,250,000 Series 2007-1 Notes. The Issuer has also issued its $70,000,000 Class C Series 2011-1 (together with the Offered Notes, the Notes). The Class C Offered Notes will rank pari passu with the Class C Series 2011-1 Notes. The Offered Notes will have an anticipated repayment date of June 2010. RATINGS RATIONALE The provisional ratings of the Offered Notes are derived from an assessment of the present value of the net cash flow that the tower pool is anticipated to generate from space licenses (leases) on the towers, compared to the cumulative debt being issued at each rating category. In connection with the issuance, the Issuer is expected to add approximately 553 tower sites to the pool. Thus, the collateral for the Notes will consist of 2,472 wireless communications sites (towers) that are mostly owned or leased by the Issuer or one of its subsidiaries. Space on the towers is in turn leased to a variety of users, primarily major wireless telephony carriers. As of June 2011, this tower pool had an annualized run rate net cash flow of approximately $89 million. Moody's assessed value for the tower pool was approximately $924 million. Pro forma for the issuance of the Offered Notes and repayment of the 2007-1 notes, the Class C Notes will have a cumulative-loan-to-value (CLTV) ratio of approximately 60.6%, while the Class F Notes will have a CLTV of approximately 77.3% . The CLTV ratio reflects the CLTV ratio of the combined amounts of the Offered Notes and the 2011-1 Notes; the CLTV of a given class reflects the combined outstanding balance of that class and all more senior classes. See Principal Methodology below for details on the assumptions applied to arrive at Moody's assessed value. The primary risks for the value of the tower pool are wireless technology risk and tower re-leasing risk. Technology risk relates primarily to the potential emergence of competing technologies that could obviate the need for wireless towers and adversely affect future lease revenues. Moody's is not aware of competing technologies which could materially displace towers and believe that the tower infrastructure is becoming increasingly entrenched as demand for wireless applications grows. There are few viable displacement technologies on the horizon such as Distributed Antenna System (DAS) and Alcatel-Lucent's recently announced lightRadios. Moody's views these technologies as complimentary to the current tower based wireless networks as these technologies are primarily effective in densely packed urban areas where the portfolios of the wireless tower companies have limited presence. Re-leasing risk refers to the potential for lease rates to fluctuate downward upon renewal, since the transaction is subject to renewals. This could occur due to overbuilding or due to pressure from wireless carriers should their own businesses experience significant margin compression. Due to zoning restrictions and public pressure Moody's does not view overbuilding as a present risk. This also provides some insulation against price risk by limiting the alternatives that a wireless carrier has. In addition, in recent months Sprint-Nextel has announced plans to shut down the Nextel iDen network over the next three years, and the carrier said it will decommission up to 20,000 cell sites. Additionally, the pending AT&T acquisition of T-Mobile creates uncertainty over the T-Mobile cell sites. For the pool to be securitized, approximately 7.3% of the revenue is generated from Sprint-Nextel iDEN leases and approximately 4.8% of revenues comes from T-Mobile sites that are collocated on the same towers as AT&T. While the termination of some of those lease will have negative impact on the transaction's revenue, Moody's believes this revenue loss will be managed over the many years remaining on the tower leases and favorable long-term wireless-data trends call for more cell-site capacity down the road. In all, these decommissions will instigate slower growth rate compared to the expectations preceding these announcements. The principal methodology used in rating the transaction is summarized below. Other methodologies and factors that may have been considered in the process of rating the Notes can be found on www.moodys.com in the Rating Methodologies sub-directory. Finally, it should be noted that Moody's ratings address only the credit risks associated with the transaction. Other non-credit risks, such as those associated with repayment on the ARD, the timing of any principal prepayments, the payment of prepayment penalties and the payment of Post-ARD Additional Interest have not been addressed and may have a significant effect on yield to investors. MOODY'S V-SCORE AND PARAMETER SENSITIVITIES V Score - The V Score for this transaction is Medium or Average. The V Score indicates "Average" structure complexity and uncertainty about critical assumptions. The Medium or average score for this transaction is driven by the Medium score for historical sector and issuer performance and data and Medium transaction governance. The Medium for historical performance and data for the sector is attributed to the fact that the data dates back only fifteen years or so, while securitization data go back only about five years. The Medium for the Issuer's historical performance and data is derived from Moody's view that even though GTP is relatively young and has existed for less than ten years, Moody's thinks that historical performance is a good indicator for future performance due to the nature of the assets and the sector. Finally, the Medium for transaction governance is mainly because of the limited experience of GTP in securitizations having done only three such transactions since 2007 and the fact that GTP is an unrated and relatively small company compared to the other publicly traded cell tower operators. Moody's Parameter Sensitivities -- In the ratings analysis Moody's uses various assumptions to assess the present value of the net cash flow that the tower pool is anticipated to generate. Based on these cash flows, the quality of the collateral and the transaction's structure, the total amount of debt that can be issued at a given rating level is determined. Hence, a material change in the assessed net present value could result in a change in the ratings. Therefore Moody's focuses on the sensitivity to this variable in the parameter sensitivity analysis. Specifically, if the net cash flows that the tower pool is anticipated to generate is reduced by 5%, 10% and 15% compared to the Base Case net cash flows used in determining the initial rating. The potential model-indicated ratings for the Class C Offered Notes rated (P) A2 (sf) would change as follow: Base Case A2 (0), A3 (1), Baa1 (2) and Baa3 (4) respectively; and the potential model- indicated ratings for the Class F Offered Notes rated (P) Ba3 (sf) would change as follow: Base Case Ba3 (0), B1 (1), B2 (2) and (3+) respectively. Parameter Sensitivities are not intended to measure how the rating of the security might migrate over time, rather they are designed to provide a quantitative calculation of how the initial rating might change if key input parameters used in the initial rating process differed. The analysis assumes that the transaction has not aged. Furthermore, parameter Sensitivities only reflects the ratings impact of each scenario from a quantitative/model- indicated standpoint. Qualitative factors are also taken into consideration in the ratings process, so the actual ratings that would be assigned in each case could vary from the information presented in the Parameter Sensitivity analysis. PRINCIPAL METHODOLOGY The principal methodology used in rating the GTP transaction was "Moody's Approach to Rating Wireless Towers-Backed Securitizations: A Path to Clear Reception in the ABS Market", published in September 2005 and amended on Feb. 3, 2011 to reflect the change in discount rates and available on www.moodys.com in the Rating Methodologies subdirectory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating methodologies sub-directory on Moody's website. As described therein, Moody's derives an asset value for the collateral which in turn is compared to the proposed bond issuance amounts. In deriving the value of the assets, Moody's viewed the historical operating performance of the Issuer, the historical performance of the securitized pool, evaluated and analyzed comparable public company data and market information from various third party sources. These are the key assumptions used in the quantitative analysis: (i) Revenue Growth -- for wireless voice/data two sources of revenue growth were assumed: first, lease escalators which were based on the tenants' contractual obligations were assumed to be fixed at 3.25% for the first 20 years; this reflects the weighted average remaining lease terms including extensions, which were approximately 20 years. From year 21 on, Moody's assumed the lease escalators to be 2%; second, organic growth that resulted in the addition of approximately 0.44 tenant per tower in total over a period of four years; on the other hand, Moody's also assumed the termination of some leases and the decommission of equipment. These are due to Sprint-Nextel's plan to shut off its iDEN and AT&T announced acquisition of T-Mobile. Sprint-Nextel is planning to shut down all of its IDEN sites starting in 2013. Based, primarily, on the location of the iDEN sites compared to competing sites, Moody's assumed that approximately 40% (or ~ 3% of the total revenue) of the 7.3% of total revenue generated by the iDEN leases is eliminated in 2013 and 2014. As for AT&T, if the planned acquisition of T-Mobile is completed, Moody's expects that in the medium to long term AT&T will choose not renew some of the T- Mobile leases. Moody's assumed that approximately half of T- Mobile's leases, which account for approximately 5% of the revenue, will not be renewed between 2013 and 2017 in 1% increment per annum. Finally, revenues from broadcasting were assumed to decline on a continuous basis over a 15 year period to a third of current levels, and data/other revenues were assumed to decline to zero based on a triangular distribution ranging from five to ten years. (ii) Operating Expenses -- were assumed to vary such that net tower cash flow margins ranged from 65% to 80% based on a triangular distribution. (iii) Maintenance Capital Expenditures -- were assumed to be $725 per tower per annum, and to increase by 2% to 4% every year. (iv) Tenants' Probability of Default (wireless voice/data tenants) - Moody's "Idealized" default rate table was applied, using the actual ratings of the Tenants who were rated and assuming near-default ratings for others; (v) Recovery Upon Wireless Tenant Default -- were assumed to be zero the year following the default and recover to 80% for large carriers and to 50% or 60% for small carriers of pre-default revenues over the next two years; (vi) Discount Rate - the discount rate applied to the net cash flow was assumed to vary between 8.5% and 13.00%; (vii) Finally, adjustments were made to the total amount of debt that can be issued at the requested rating levels. This is mainly because the Class C of the Offered Notes and the Class C of 2011-1 Notes as well as the Class F of the Offered Notes account for a larger percentage of the total debt outstanding compared to most similarly rated classes in the prior transactions; therefore these classes have lower severity of loss risk. Moody's Investors Service did not receive or take into account a third party due diligence report on the underlying assets or financial instruments in this transaction. HAMPTON ROADS: To be Added to Russell 3000/Russell Global Indexes ----------------------------------------------------------------- Hampton Roads Bankshares, Inc., announced that Russell Investments will add the Company to the Russell 3000(R) Index and Russell Global(R) Index on July 1, 2011, as a result of the annual reconstitution of Russell's comprehensive set of U.S. and global equity indexes. Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for both passive and active investment strategies. $3.9 trillion in assets are currently benchmarked to these indexes. The Russell 3000(R) Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. The largest 1,000 companies in this ranking comprise the Russell 1,000(R) and the next 2,000 companies become the Russell 2000(R). The Russell 3000(R) also serves as the U.S. component to the Russell Global(R) Index, which Russell launched in 2007. About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and fifteen ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company said in its Form 10-Q for the Sept. 30, 2010 quarter that due to its financial results, the substantial uncertainty throughout the U.S. banking industry, and the Written Agreement the Company and BOHR have entered into, doubts existed regarding the Company's ability to continue as a going concern through the second quarter of 2010. However, management believes this concern has been mitigated by the initial closing of the Private Placement that occurred on Sept. 30, 2010. The Company reported a net loss of $210.35 million on $122.20 million of total interest income for the year ended Dec. 31, 2010, compared with a net loss of $201.45 million on $149.44 million of total interest income during the prior year. The Company's balance sheet at March 31, 2011, showed $2.71 billion in total assets, $2.55 billion in total liabilities and $159.86 million in total shareholders' equity. HARRY & DAVID: Gets Clearance to Send Ch. 11 Plan Out for Vote -------------------------------------------------------------- Dow Jones' DBR Small Cap reports that Harry & David Holdings Inc. won permission to send its reorganization plan, which contemplates a rights offering and $100 million in exit financing, out to creditors for a vote. According to the disclosure statement, the proposed Second Amended Joint Chapter 11 Plan of Reorganization contemplates the reorganization of the Debtors through (a) the elimination of the PBGC Claims and the Debtors' Senior Notes in exchange for the issuance of new stock and (b) a rights offering that will provide the PBGC and the Noteholders that meet certain SEC requirements with the opportunity to purchase stock of the reorganized Debtors in connection with their emergence from chapter 11. The rights offering permits qualified Noteholders to purchase approximately 74.9 percent of the stock of the reorganized Debtors for $55 million. The Debtors also entered into an agreement with a specific group of their Noteholders to 'backstop' the Rights Offering. The Backstop Agreement ensures that the Debtors will obtain $55 million in new equity financing upon their emergence from these cases. About Harry & David Medford, Oregon-based Harry & David Holdings, Inc. -- aka Bear Creek Corporation; Bear Creek Direct Marketing, Inc.; Bear Creek Stores, Inc.; Bear Creek Operations, Inc.; and Bear Creek Orchards, Inc. -- is a multi-channel specialty retailer and producer of branded premium gift-quality fruit and gourmet food products and gifts marketed under the Harry & David(R), Wolferman's(R) and Cushman's(R) brands. It has 70 stores across the country. Harry & David Holdings filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-10884) on March 28, 2011. Affiliates Harry and David (Bankr. D. Del. Case No. 11-10885), Harry & David Operations, Inc. (Bankr. D. Del. Case No. 11-10886), and Bear Creek Orchards, Inc. (Bankr. D. Del. Case No. 11-10887) filed separate Chapter 11 petitions. The cases are jointly administered, with Harry David Holdings as lead case. Daniel J. DeFranceschi, Esq.; Paul Noble Heath, Esq.; and Zachary Shapiro, Esq., at Richards Layton & Finger, serve as the Debtors' local counsel. David G. Heiman, Esq.; Brad B. Erens, Esq.; and Timothy W. Hoffman, Esq., at Jones Day, are the Debtors' legal counsel. Rothschild Inc. is the Debtors' investment banker. Alvarez & Marsal LLC is the Debtors' financial advisor. Garden City Group Inc. is the Debtors' claims and notice agent. McKinsey Recovery & Transformation Services U.S. LLC is being tapped as management consultants. The Debtor also tapped DJM Realty Services, LLC, as real estate consultants; Alvarez & Marsal North America to provide the Debtors an interim chief executive officer and chief restructuring officer and certain additional officers; and McKinsey Recovery & Transformation Services U.S. LLC as their management consultant. Kristopher M. Hansen, Esq., and Erez E. Gilad, Esq., at Stroock & Stroock & Lavan LLP; Thomas B. Walper, Esq., at Munger, Tolles & Olson LLP; and Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP are counsel to principal noteholders. Moelis & Company is the financial advisor to the principal noteholders. Lowenstein Sandler has been retained as counsel to the unsecured creditors committee in the Harry & David bankruptcy case. The Debtors disclosed $304.3 million in total assets and $360.8 million in total debts as of Dec. 25, 2010. The Debtors' proposed Plan of Reorganization will allow the Company to convert all of its approximately $200 million of outstanding public notes into equity of the reorganized company. The Plan also includes an equity capital raise that will generate $55 million in equity financing upon the Company's emergence from chapter 11. The Plan has the support of the Official Committee of Unsecured Creditors and the holders of approximately 81% of the Company's public notes. HEARUSA INC: U.S. Trustee Appoints Equity Committee --------------------------------------------------- The United States Trustee filed a bankruptcy court notice disclosing that it has appointed an Official Committee of Equity Security Holders in the bankruptcy cases, according to Chapter11Cases.com. The members include: -- Arcadia Opportunity Master Fund, Ltd.; -- Sherleigh Associates Inc., -- Profit Sharing Plan; and -- Meson Capital Partners, LP. The representative from Arcadia Opportunity Master Fund has been appointed as the temporary chairperson for the Committee. Chapter11Cases.com says that no formal motion was filed with the bankruptcy court seeking the appointment of an equity committee. However, from court filings, it appears that an ad hoc committee of equity holders made a request to the U.S. Trustee and HearUSA had stated that it was "generally supportive" of the appointment of an equity committee because it "fully expects that equity security holders will receive a distribution on account of their interests" (although the amount of the distribution "remains in question"), the report notes. About HearUSA HearUSA, Inc., which sells hearing aids in 10 states, filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 11-23341) on May 16, 2011, to sell the business for $80 million to William Demant Holdings A/S. The Debtor said that assets are $65.6 million against debt of $64.7 million as of March 31, 2010. HearUSA owes $31.3 million to Siemens Hearing Instruments Inc., the principal supplier and primary secured lender. Judge Erik P. Kimball presides over the case. Brian K. Gart, Esq., Paul Steven Singerman, Esq., and Debi Evans Galler, Esq., at Berger Singerman, P.A., represent the Debtor. The Debtor has tapped Bryan Cave LLP as special counsel; Sonenshine Partners LLC, investment banker; Development Specialist Inc., restructuring advisor ans Joseph J. Luzinski as chief restructuring officer; and AlixPartners LLC, as communications consultant. Trustee Services, Inc., serves as claims and notice agent. HearUSA, INC. The Official Committee of Unsecured Creditors was appointed on May 25, 2011. Robert Paul Charbonneau and the law firm of Ehrenstein Charbonneau Calderin represents the Committee. HERITAGE CONSOLIDATED: Wants Munsch Hardt as General Counsel ------------------------------------------------------------ Heritage Consolidated, LLC and Heritage Standard Corporation ask the U.S. Bankruptcy Court for the Northern District of Texas for permission to: -- employ Munsch Hardt Kopf & Harr, P.C.; -- employ Rochelle McCullough, LLP; and -- retain HSC, RM LLP as special bankruptcy counsel to HSC. The Debtors relate that the sale order, in conjunction with the Global Resolution Proposal, significantly reduced the remaining assets and issues for the Debtors and resolved many of the potential conflicts between the estates of HSC and Consolidated. In particular, the Debtors were concerned about potential lien priority disputes among CIT Capital Securities, LLC, the Debtors' primary lender at the time, HSC as the holder of an operator's lien and Consolidated as the owner of the primary assets which were collateralized. The foregoing sale order and global resolution proposal has resulted in the satisfaction of the secured claims of CIT and significantly reduced any chance that the scope of the operator's lien would become an issue for Consolidated. Accordingly, at the insistence of the Committee, HSC requests that the Court authorize Munsch Hardt to take over as general bankruptcy counsel for both Debtors and assume the duties and responsibilities being performed by RM LLP on behalf of HSC, in the absence of an actual conflict between the interests of Consolidated and HSC. To the best of the Debtors' knowledge, the firms are "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. The firms can be reached at: Joe E. Marshall, Esq. Kathleen M. Patrick, Esq. MUNSCH HARDT KOPF & HARR, P.C. 3800 Lincoln Plaza 500 North Akard Street Dallas, TX 75201-6659 Tel: (214) 855-7500 Fax: (214) 978-4365 E-mail: jmarshall@munsch.com kpatrick@munsch.com - and - Kevin D. McCullough, Esq. Kerry Ann Miller, Esq. ROCHELLE McCULLOUGH LLP 325 N. St. Paul Street, Suite 4500 Dallas, TX 75201 Tel: (214) 953-0182 Fax: (214) 953-0185 E-mail: kdm@romclawyers.com kmiller@romclawyers.com About Heritage Consolidated Heritage Consolidated LLC is a privately held company whose core operations consist of exploration for, and acquisition, production, and sale of, crude oil and natural gas. Heritage Consolidated filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 10-36484) on Sept. 14, 2010, in Dallas, Texas. Its affiliate, Heritage Standard Corporation, also filed for Chapter 11 protection (Bankr. N.D. Tex. Case No. 10-36485). Kevin D. McCullough, Esq., in Dallas, Texas, serves as counsel to the Debtors. Stephen F. Malouf, P.C., serves as their special counsel. The Debtors each estimated assets and debts of $10 million to $50 million. HILLSIDE VALLEY: Case Summary & 16 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Hillside Valley, L.P. 12 New Providence Road Watchung, NJ 07069 Bankruptcy Case No.: 11-21689 Chapter 11 Petition Date: June 23, 2011 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Reading) Judge: Richard E. Fehling Debtor's Counsel: Douglas J. Smillie, Esq. FITZPATRICK LENTZ AND BUBBA P.C. P.O. Box 219 Center Valley, PA 18034-0219 Tel: (610) 797-9000 E-mail: dsmillie@flblaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Richard J. Colasuonno, manager of general partner. List of 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ John Deere construction Trade debt $108,599 c/o Bernstein Law Firm 707 Grant Street, Ste 2200 Pittsburgh, PA 15219 Wells Fargo Equipment Trade debt $58,185 Finance 733 Marquette Ave, Suite 700 Minneapolis, MN 55402 E.C. Construction Trade debt $28,166 2645 Rising Sun Rd. Slatington, PA 18080 Ritter & Plante Trade debt $28,000 Associates Eastern Surfaces Trade debt $19,284 Dinaso & Sons Bldg Trade debt $19,221 Supply Tiger/Dinaso Bldg Trade debt $10,075 Supply Modern Handling Trade debt $8,340 Equipment Co City of Allentown Taxes $7,988 Viking Supply Trade debt $5,558 Fazio, Mannuzza, Roche Trade debt $4,284 TVJ Contractors Inc. Trade debt $4,000 Tri-Jem Enterprises, Trade debt $1,712 Inc. Peachtree Business Trade debt $903 Products Engines Inc. Trade debt $840 Naturalscapes Trade debt $361 HMV GROUP: Sells Canadian Arm to Hilco UK for $3.2-Mil. ------------------------------------------------------- Dow Jones' DBR Small Cap reports that sruggling U.K. entertainment retailer HMV Group PLC Monday said it has agreed to sell its 121- store Canadian arm to restructuring specialist Hilco U.K. for GBP2.0 million ($3.2 million) to further reduce its debt pile. United Kingdom-based HMV Group plc is engaged in retailing of pre- recorded music, video, electronic games and related entertainment products under the HMV and Fopp brands, and the retailing of books principally under the Waterstone's brand. The Company operates in four segments: HMV UK & Ireland, HMV International, HMV Live, and Waterstone's. HMV International consists of HMV Canada, HMV Hong Kong and HMV Singapore. Waterstone's is a bookseller, which operates through 314 stores and a transactional Web site for the sale of both physical and e-books for download. The Company has operations in seven countries, with principal markets being the United Kingdom and Canada. Its retail businesses operate through 417 stores in the United Kingdom, Canada, Hong Kong and Singapore. On Jan. 29, 2010, the Company completed the acquisition of MAMA Group Plc. Its subsidiaries include HMV Canada Inc, HMV Guernsey Limited, HMV Hong Kong Limited, and HMV (IP) Limited. HORIZON LINES: Gets Covenant Relief to Push for Refinancing ----------------------------------------------------------- Horizon Lines, Inc., reached an agreement with its bank group to amend its credit facility. The amendment relaxes compliance under the credit facility's financial covenants for the second quarter, and will thereby preserve access to liquidity under the revolver and facilitate the company's ability to move forward with its previously announced refinancing effort. "We appreciate the continued support of our lender group while we navigate through the complex process of refinancing our entire capital structure," said Michael T. Avara, Executive Vice President and Chief Financial Officer. "This amendment will provide additional financial covenant flexibility as we work with our banks and our convertible note holders towards a comprehensive refinancing, which we announced earlier this month." About Horizon Lines Horizon Lines, Inc., based in Charlotte, North Carolina, through its wholly-owned indirect operating subsidiary, Horizon Lines, LLC, currently operates 11 of its 15 Jones Act qualified U.S. flag container ships in Jones Act liner services between the continental United States and either Alaska, Hawaii, or Puerto Rico and five U.S. flag container ships between the Far East, U.S. west coast and Guam. Horizon Lines reported a net loss of $57.97 million on $1.16 billion of operating revenue for the fiscal year ended Dec. 26, 2010, compared with a net loss of $31.27 million on $1.12 billion of operating revenue for the fiscal year ended Dec. 20, 2009. The Company's balance sheet at March 27, 2011, showed $804.0 million in total assets, $797.3 million in total liabilities, and stockholders' equity of $6.66 million. As reported in the TCR on March 30, 2011, Ernst & Young LLP, in Charlotte, North Carolina, expressed substantial doubt about Horizon Lines' ability to continue as a going concern, following the Company's 2010 results. According to Ernst & Young, there is uncertainty that Horizon Lines, Inc., will remain in compliance with certain debt covenants throughout 2011 and will be able to cure the acceleration clause contained in the convertible notes. * * * As reported in the Troubled Company Reporter on March 8, 2011, Moody's Investors Service said Horizon Lines, Inc.'s plea agreement regarding antitrust matters in the Puerto Rico trade lane is credit negative but does not at this time affect its 'Caa1' Corporate Family or its other debt ratings of Horizon. The last rating action on Horizon was on May 18, 2010 when Moody's lowered its ratings, including the corporate family rating to 'Caa1' and maintained the negative outlook. HORIZON LINES: Extends Subscription Deadline to July 1 ------------------------------------------------------ Horizon Lines, Inc., on June 24, 2011, entered into a third amendment with certain holders of a majority of its unsecured 4.25% convertible senior notes due 2012, to the previously announced Restructuring Support Agreement, dated June 1, 2011, as amended by the First Amendment to the Restructuring Support Agreement, dated June 10, 2011, and further amended by the Second Amendment to the Restructuring Support Agreement, dated June 17, 2011. The Amendment was entered into to extend, from June 24, 2011 to July 1, 2011, (i) the deadline by which the Company is to receive subscription commitments for $350 million in aggregate principal amount of the Company's 9.0% senior secured notes to be issued and sold to the Exchanging Holders and (ii) the Exchanging Holders' and the Company's continued support for the recapitalization and to allow the parties to discuss certain modifications to the terms of the recapitalization. A full-text copy of the Amendment to Restructuring Support Agreement is available for free at http://is.gd/vCsUU9 About Horizon Lines Horizon Lines, Inc., based in Charlotte, North Carolina, through its wholly-owned indirect operating subsidiary, Horizon Lines, LLC, currently operates 11 of its 15 Jones Act qualified U.S. flag container ships in Jones Act liner services between the continental United States and either Alaska, Hawaii, or Puerto Rico and five U.S. flag container ships between the Far East, U.S. west coast and Guam. Horizon Lines reported a net loss of $57.97 million on $1.16 billion of operating revenue for the fiscal year ended Dec. 26, 2010, compared with a net loss of $31.27 million on $1.12 billion of operating revenue for the fiscal year ended Dec. 20, 2009. The Company's balance sheet at March 27, 2011, showed $804.0 million in total assets, $797.3 million in total liabilities, and stockholders' equity of $6.66 million. As reported in the TCR on March 30, 2011, Ernst & Young LLP, in Charlotte, North Carolina, expressed substantial doubt about Horizon Lines' ability to continue as a going concern, following the Company's 2010 results. According to Ernst & Young, there is uncertainty that Horizon Lines, Inc., will remain in compliance with certain debt covenants throughout 2011 and will be able to cure the acceleration clause contained in the convertible notes. * * * As reported in the Troubled Company Reporter on March 8, 2011, Moody's Investors Service said Horizon Lines, Inc.'s plea agreement regarding antitrust matters in the Puerto Rico trade lane is credit negative but does not at this time affect its 'Caa1' Corporate Family or its other debt ratings of Horizon. The last rating action on Horizon was on May 18, 2010 when Moody's lowered its ratings, including the corporate family rating to 'Caa1' and maintained the negative outlook. JACKSON HEWITT: Can Access Cash Collateral Until July 1 ------------------------------------------------------- Jackson Hewitt Tax Service Inc. and its debtor-affiliates obtained a third interim order from the U.S. Bankruptcy Court for the District of Delaware to use cash collateral of Wells Fargo Bank N.A. until July 1, 2011. A hearing is set Thursday, June 30, 2011, at 11:30 a.m., to consider final approval of the Debtor's request to use cash collateral. According to the Troubled Company Reporter on June 20, 2011, the Debtors, Wells Fargo Bank, N.A., successor-by-merger to Wachovia Bank, N.A., as administrative agent, and various lenders are parties to that certain Amended and Restated Credit Agreement, dated as of Oct. 6, 2006. As of the Petition Date, the Debtors were obligated on (a) approximately $288.2 million principal amount of term loans under the Credit Agreement, (b) approximately $65.6 million principal amount of outstanding revolver loans under the Credit Agreement (including unpaid interest that has accrued and been capitalized), and (c) approximately $2.4 million under related hedge agreements. The obligations under the credit agreement are secured by a first priority lien on all of the Debtors' assets, including all of the Debtors' cash. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant the prepetition lenders replacement liens and superpriority claims, subject to certain carve out. A full-text copy of the cash collateral budget is available for free at http://bankrupt.com/misc/JACKSONHEWITT_Budget.pdf About Jackson Hewitt Tax Service Parsippany, New York-based Jackson Hewitt Tax Service Inc., aka JHTS Inc., provides computerized preparation services for federal, state and local individual income tax returns in the United States through a nationwide network of franchised and company-owned offices operating under the brand name Jackson Hewitt Tax Service. The Company has 700 franchisees who collectively operated a total of 4,846 offices. The Company also operates 1,110 company-owned offices. Jackson Hewitt and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-11587) on May 24, 2011. Judge Mary F. Walrath presides over the case. Skadden, Arps, Slate, Meagher & Flom LLP, serves as the Debtors' bankruptcy counsel. Alvarez & Marsal North America, LLC, serves as their financial advisor. Moelis & Company LLC acts as investment banker. The Garden City Group, Inc., serves as the Debtors' Claims and Noticing Agent. The Debtors also tapped Deloitte & Touche to serve as tax advisors and Kekst & Company to serve as communications advisors. The Debtors filed a Joint Prepackaged Plan of Reorganization and Disclosure Statement together with their petitions. Under the terms of the Plan, Jackson Hewitt's current secured lenders will receive their pro rata share of a new $100 million term loan and all of the equity in the reorganized enterprise. The Company also anticipates entering into a new $115 million revolving credit facility upon consummation of the Plan. It is anticipated that upon consummation of the proposed Plan, Jackson Hewitt's new equity will be privately held. All of the Company's existing common stock will be cancelled upon Jackson Hewitt's emergence from bankruptcy. On May 23, 2011, the Debtors commenced solicitation of votes on the Plan from the lenders. No other classes of creditors or stockholders were solicited, as each such class is either being paid in full or receiving no recovery and hence, is deemed either to accept or reject the Plan, respectively. The Debtors received overwhelming acceptances to the Plan from the lenders. Mark McDermott, Esq., at Skadden Arps, told the Bankruptcy Court at a May 25 hearing that investor and financier Bayside Capital is in line to be "a significant majority" owner of Jackson Hewitt. Bayside Capital has $4.5 billion under management. Bayside is the largest of 10 secured lenders that Jackson Hewitt owes a total of $357 million. Mr. McDermott also told the Court that Jackson Hewitt, worth an estimated $225 million, does not have sufficient value to cover the secured debt. The Court set a July 8 court date to consider confirmation of Jackson Hewitt's Chapter 11 plan. JAED DINING: Case Summary & 15 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Jaed Dining Group, Inc. a California corporation 105 S Palm Canyon Dr Palm Springs, CA 92262 Bankruptcy Case No.: 11-30352 Chapter 11 Petition Date: June 22, 2011 Court: United States Bankruptcy Court Central District of California (Riverside) Debtor's Counsel: Gene E O'Brien, Esq. LAW OFFICE OF GENE O'BRIEN 74040 Hwy 111 #210 Palm Desert, CA 92260 Tel: (760) 340-5200 Fax: (760) 340-5233 E-mail: geneeob@aol.com Scheduled Assets: $74,500 Scheduled Debts: $1,099,419 A list of the Company's 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb11-30352.pdf The petition was signed by Edward Shin, president. KANSAS CITY: S&P Keeps 'BB' Corp. Credit Rating; Outlook Stable --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB-' rating to Kansas City, Mo.-based Kansas City Southern Railway Company proposed $500 million senior secured credit facility, which is comprised of a new $200 million revolving credit facility (expiring in 2016) and a $300 million term loan A due 2017. The issue-level rating on the credit facility is two notches above the 'BB' corporate credit ratings on its parent, Kansas City Southern. The company will use proceeds from the transaction, to refinance existing credit facilities totaling $307 million and pay transaction fees. The ratings on KCS reflect a financial risk profile that, while improving, remains somewhat weaker than those of its Class 1 peer railroads; substantial capital spending requirements; and meaningful exposure to cyclical end markets such as automotive and manufacturing, particularly in Mexico through subsidiary Kansas City Southern de Mexico S.A. de C.V., the Mexican railroad company it acquired in April 2005. The favorable characteristics of the U.S. freight railroad industry and KCS' strategically located rail network partly offset these risks. "We characterize the company's business risk profile as satisfactory, financial risk profile as significant, and liquidity as adequate. Liquidity has previously been a constraining factor for the ratings, although it has improved significantly over the past few years. The ratings incorporate our expectation that KCS will manage capital expenditures and growth initiatives in a disciplined manner, maintaining a ratio of funds from operations to total debt in the high-20% area and debt to capital in the mid-40% area," S&P said. "In the near term, we expect volume momentum to continue as a result of the gradually improving overall economy, particularly in Mexico. We also expect KCS to continue generating satisfactory operating profitability and free cash flow due to generally favorable pricing trends and ongoing efficiency improvements. As a result of KCS' ongoing debt reduction and improved financial profile, we expect near-term improvement in the company's credit measures, maturity profile, and liquidity. Furthermore, given the rebound in freight volumes and stable pricing, we expect KCS' operating performance, profitability, and cash flow to continue strengthening in the next few quarters. We could raise the ratings if earnings improvement results in FFO to total debt in the low- 30% area on a sustained basis. On the other hand, we could lower the ratings if liquidity becomes constrained or if FFO to total debt falls consistently into the low-20% area," S&P added. Ratings List Kansas City Southern Kansas City Southern Railway Co. Corporate credit rating BB/Stable/-- Rating assigned Kansas City Southern Railway Co. Senior secured $300 mil. term loan A due 2017 BBB- $200 mil. revolver due 2016 BBB- LEHMAN BROTHERS: $1.31-Bil. Paid to Advisors in 2.5-Year Case ------------------------------------------------------------- Lehman Brothers Holdings Inc. disclosed these cash receipts and disbursements of the company, its affiliated debtors and other controlled entities for the month ended May 31, 2011: Beginning Cash & Investments (05/01/11) $22,951,000,000 Total Sources of Cash 2,957,000,000 Total Uses of Cash (2,424,000,000) FX Fluctuation (7,000,000) --------------- Ending Cash & Investments (05/31/11) $23,477,000,000 LBHI reported $2.068 billion in cash and investments as of May 1, 2011, and $3.762 billion as of May 31, 2011. The monthly operating report also showed that a total of $54,257,000 was paid to professionals that were retained in the Debtors' Chapter 11 cases in the past month. From Sept. 15, 2008 to May 31, 2011, a total of $1,317,091,000 was paid to professionals, of which $442,196,000 was paid to the Debtors' turnaround manager, Alvarez & Marsal LLC, while $309,808,000 was paid to their bankruptcy counsel, Weil Gotshal & Manges LLP. A full-text copy of the May 2011 Operating Report is available for free at http://bankrupt.com/misc/LehmanMORMay3111.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Barclays Opposes Judgment for $500-Mil. Claim -------------------------------------------------------------- Barclays Capital Inc. asks Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to deny Lehman Brothers Holdings Inc.'s motion for summary judgment. LBHI last month asked the Court to grant a summary judgment against Barclays Capital on Count II -- breach of contract claim. LBHI also demanded payment of approximately $500 million in damages for Barclays' failure to pay the company in full when the U.K. bank bought its North American business in 2008. Barclays allegedly paid only $1.5 billion of the $2 billion it was supposed to pay for the bonuses of Lehman employees who were transferred to the U.K. bank as part of the deal. In asking for summary judgment on Count II, LBHI argued that it is warranted because the facts in the case cannot "genuinely be disputed" and that Barclays is collaterally estopped from disputing those facts because the U.K. bank was given "full and fair opportunity" to present evidence, cross examine witnesses and argue those then-disputed facts. Barclays' lawyer, Jonathan Schiller, Esq., at Boies Schiller & Flexner LLP, in New York, says the law requires LBHI's motion for summary judgment to be decided "based upon the normal inquiry into whether the contract unambiguously requires judgment in its favor and whether there is any genuine dispute concerning a fact material to its claim." "The contract does not unambiguously require judgment in LBHI's favor and there are numerous factual assertions that are material to LBHI's claim and that Barclays genuinely disputes," Mr. Schiller says in a 61-page memorandum. "The language of the contract and the relevant facts so overwhelmingly support the Barclays position as to eliminate any basis for genuine dispute that it is Barclays, not LBHI, that is entitled to summary judgment," the lawyer says. According to Mr. Schiller, there is a "genuine factual dispute" over the precise amount of 2008 bonuses Barclays paid to the Lehman employees. He points out that while LBHI asserts that Barclays paid only approximately $1.5 billion in bonuses, the evidence shows that the U.K. bank paid over $1.8 billion in bonuses. Mr. Schiller further says that even if the Court accepts LBHI's claim, it should deny the company's motion for summary judgment because the company failed to demonstrate that it has suffered any damages as a result of the alleged breach. A full-text copy of Barclays' memorandum is available for free at http://bankrupt.com/misc/LBHI_BarclaysMemo062211.pdf Amended Scheduling Order Jonathan Schiller, Esq., at Boies, Schiller & Flexner LLP, in New York, informed Judge Peck that Lehman Brothers Holdings Inc. and Barclays Capital Inc. have agreed upon a slightly revised briefing schedule for the remaining briefs relating to Count II (Breach of Contract Claim): June 22, 2011 -- Barclays will file its brief in opposition to the LBHI's motion for summary judgment and in support of Barclays' motion for summary judgment. July 20, 2011 -- LBHI will file its brief in opposition to Barclays' motion for summary judgment and in reply to Barclays' opposition. Aug. 5, 2011 -- Barclays will file its reply brief in support of its motion for summary judgment. LBHI reserves its right to argue that no reply should be permitted. LBHI and Barclays agree that both sides will appear to present oral argument before the Court on Sept. 7, 2011. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Goldman, et al., Oppose New Rule 2019 Rules ------------------------------------------------------------ A group of creditors led by Goldman Sachs Bank USA and Goldman Sachs International asks Judge James Peck to deny approval of the proposed procedures that require proponents of Chapter 11 plans to publicly disclose their interests. The Goldman Sachs group complains that the ad hoc group of Lehman Brothers creditors is proposing disclosure requirements "far out of proportion" to those contemplated by the Bankruptcy Code. "The ad hoc [group's] proposal would impose onerous and unnecessary disclosure obligations on virtually the entire creditor body," says Sean O'Neal, Esq., at Cleary Gottlieb Steen & Hamilton LLP, in New York. Mr. O'Neal is also concerned that the disclosure requirements would discourage creditors from participating in investigations and negotiations. He points out that creditors, especially dealers, would be forced to disclose in public trading strategies and other sensitive commercial information. The Goldman Sachs group is also includes Deutsche Bank AG, Morgan Stanley & Co. International plc and Morgan Stanley Capital Services, Inc., D.E. Shaw Composite Portfolios, L.L.C., and D.E. Shaw Oculus Portfolios, L.L.C., Credit Agricole CIB, Credit Suisse International, The Royal Bank of Scotland plc, and Oaktree Capital Management, L.P. The group drew support from debt holders including Angelo Gordon & Co. L.P., Contrarian Capital Management LLC, Goldentree Asset Management LP, Hayman Capital Management LP, Knighthead Capital Management LLC, Mason Capital Management LLC, Mount Kellett Capital Management, and Serengeti Asset Management LP. The Goldman Sachs group filed a rival plan two months ago for Lehman Brothers Holdings Inc. and its affiliated debtors. The rival plan proposes a 16% recovery for creditors that hold senior unsecured claims against LBHI and a 14.7% recovery for general unsecured creditors. Judge Peck will hold a hearing on July 20, 2011, to consider approval of the proposed disclosure procedures. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Gets 9-Month Stay for $3-Bil. Lawsuits ------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors obtained a court ruling granting another nine-month stay on more than 50 lawsuits they filed late last year to recover more than $3 billion. The order extended the stay until April 20, 2012, and the deadline for completing service of summons and complaints on the defendants until Aug. 30, 2011. Any activity like trials in connection with the lawsuits will be prohibited while the stay is in effect, according to the Debtors. The company filed the lawsuits to recover funds that had been transferred to counterparties in more than 200 transactions it entered into prior to its bankruptcy filing. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LBI Wins OK of $861-Mil. Deal With JPM ------------------------------------------------------- James Giddens, the trustee liquidating the assets of Lehman Brothers Inc., obtained an order from the U.S. Bankruptcy Court for the Southern District of New York approving a settlement that calls for JPMorgan Chase Bank N.A. to pay $861 million to claimants of the brokerage. The payment consists of $755 million in cash and $106 million in securities, valued as of Sept. 19, 2008, to the trustee for distribution to the claimants in LBI's liquidation proceeding. Judge Peck signed off the settlement agreement on June 23, 2011. "I'm satisfied that this is indeed an excellent result," MarketWatch quoted Judge Peck as saying. "This is obviously a very substantial step forward of the LBI liquidation." Jeffrey Coleman, Esq., at Hughes Hubbard & Reed LLP, in New York, said the avoidance of long litigation and the fact that most of the money will be paid in cash made it a great deal, MarketWatch reported. In a statement, the LBI Trustee said the approval "marks a milestone in the administration of the LBI estate to recover assets to pay customer claims." JPMorgan said in another statement that the assets it will turn over predominately come from cash and securities held in Lehman brokerage accounts that the bank had set aside pending a resolution with the trustee, MarketWatch reported. The settlement, announced two months ago, came after the conclusion of the trustee's two-year investigation into JPMorgan's actions as the principal clearing bank for LBI. The deal largely settles the outstanding claims the trustee has against JPMorgan but does not affect disputes between the bank and Lehman Brothers Holdings Inc., which are embroiled in two pending multibillion-dollar lawsuits, according to the report. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Merrill Wants Subordination Agreement Followed --------------------------------------------------------------- Merrill Lynch Portfolio Management, Inc., and Merrill Lynch Capital Services, Inc., ask the U.S. Bankruptcy Court for the Southern District of New York to compel specific performance from Lehman Brothers Special Financing Inc. and Lehman Brothers Holdings Inc. of the terms of a subordination agreement, including, but not limited to release of mortgages and liens, in connection with a proposed transfer of the Brampton Court Apartment located in Broward County, Florida. In November 2005, AHF-Bay Fund, LLC, was loaned the proceeds of four series of bonds totaling $105,305,000 issued by Capital Trust Agency for the purposes of acquiring and rehabilitating five multifamily housing projects in Florida, including the Brampton Project. Merrill Lynch, Pierce, Fenner & Smith Incorporated was the initial purchaser of Series A Bonds and MLPM is the current beneficial owner of the Series A Bonds. MLCS and AHF entered into a "TRS Agreement" underwhich MLCS and AHF agreed to make certain payments to one another relating to the Series A Bonds. LBHI, as successor in interest to Lehman Brothers Inc., is the owner of the Series B Bonds. LBSF and AHF entered into a TRS Agreement with respect to the Series B Bonds. The obligations owed under the Series A Bonds and the Merrill TRS are secured by senior mortgages encumbering certain real and personal property associated with the Project. The obligations owed under the Series B Bonds and the Lehman TRS are secured by subordinate mortgages encumbering certain real and personal property associated with the Project. In connection with the Project, the Merrill Entities, LBI, LBSF and NAHTEF Bond Fund I - 2005, L.P., entered into the subordination agreement on Nov. 10, 2005, which provides, among other things that, upon occurrence of an event of default with respect to the Series A Bonds or the Merrill TRS, the Lehman Entities granted Merrill certain rights and remedies, including, but not limited to, the ability to release or cause the release of certain mortgages held by or in favor of the Lehman Entities. In October 2008, immediately after the bankruptcy filing of the Lehman Entities, AHF defaulted under the Merrill TRS and continues to be in default, subject to the forbearance of MLCS, Peter J. Barrett, Esq., at Kutak Rock LLP, in Richmond, Virginia, relates. AHF has proposed to sell the Brampton Project in an arm's length transaction via a deed to U.S. National Bank Association, as trustee, for the Bonds, or its designee, in lieu of a foreclosure on the Brampton Project. According to Mr. Barrett, the value of the cash and property to be received by or for the benefit of Merrill upon the sale of the Brampton Project is not sufficient to satisfy the obligations owed to Merrill with respect to the Series A Bonds and, upon its termination, the Merrill TRS. Therefore, Merrill, whose payment and lien positions are senior to the Lehman Entities, is seeking to release or cause the release of the mortgages held by or for the benefit of the Lehman Entities so that the sale of the Brampton Project may be consummated, Mr. Barrett tells the Court. Despite demand, and in contravention of the express terms of the Subordination Agreement, the Lehman Entities have failed to release the liens associated with the Brampton Project, which jeopardizes the sale transaction, Mr. Barrett relates. Mr. Barrett asserts that, making the failure to respond to the demand for releases even more unreasonable is the fact that the Lehman Entities have no equity interest in the Brampton Project. Any proceeds of the sale of the Brampton Project will be far less than the amount owed with respect to the Series A Bonds and, upon its termination, the Merrill TRS, he says. Therefore, the Lehman Entities, who are subordinate to Merrill in payment and lien positions vis-a-vis the Brampton Project, are wholly unsecured as to the Brampton Project, he adds. There has been no claim that the Lehman Entities stand to recover anything from the sale of the Brampton Project, so their willful failure to act is so much more egregious, he further asserts. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LES RESSOURCES: Nuinsco Acquires Assets; SDBJ Backs Out ------------------------------------------------------- Nuinsco Resources Limited, along with Ocean Partners Holdings Limited and a third company jointly owned by Nuinsco and Ocean Partners, provided an update on the status of its ongoing motion in the Superior Court of the province of Quebec related to the Companies' efforts to acquire certain assets as secured creditors, including mining and processing assets, located in and near Chibougamau, Quebec that were formerly owned by Les Ressources Campbell Inc. and Ressources MSV (2007) Inc. ("Campbell"). At a court hearing held on June 21, 2011, Societe de developpement de la Baie-James ("SDBJ") did not present a bid to acquire the Assets as it had previously indicated was possible (see news release dated May 25, 2011.) SDBJ did not oppose the motion to approve the Companies' bid to acquire the Assets; a final decision is expected to be rendered by the registrar at a hearing scheduled for Monday June 27, 2011. About Ocean Partners Ocean Partners is a privately-held company with offices in the UK, USA, Canada, China, Mongolia, South Africa, Turkey and Zambia with additional representation by agents in Istanbul, Lima, Madrid, Melbourne, Moscow, New Delhi, Santiago and Tokyo. Ocean Partners provides relationship-based trading services to miners and smelters of copper, lead and zinc concentrate as well as the secondary products of the base metal smelting industry (eg drosses, slags, reverts, residues). Ocean Partners also owns and operates copper, lead and zinc mines in Turkey as well as holding many exploration licenses there through its 50% shareholding in a local company. About Nuinsco Resources Nuinsco is a growth-oriented, multi-commodity mineral exploration company that is focused on world-class mineralized belts in Canada, Turkey and Egypt. In addition to its property holdings, Nuinsco owns common shares in Coventry Resources Limited (ASX:CVY) and Victory Nickel Inc. (TSX:NI). Shares of Nuinsco trade on the Toronto Stock Exchange under the symbol NWI. LIBERTY MEDIA: Fitch Upgrades IDR to 'BB'; Outlook Stable --------------------------------------------------------- Fitch Ratings has upgraded Liberty Media LLC's and QVC Inc.'s Issuer Default Rating to 'BB' from 'BB-'. Fitch has also upgraded the issue ratings of Liberty Media LLC to 'BB' and affirmed the secured debt issue ratings of QVC at 'BBB-'. The Rating Outlook is Stable. Fitch's ratings reflect the expected spin-off of the assets attributed to Liberty Capital (LCAP) and Liberty Starz (LSTRZ); therefore, any assets attributed to LCAP and LSTRZ are not factored into the ratings. In addition, any actions taken by LCAP or LSTRZ that do not impact or change the assets attributed to Liberty Interactive would have no effect on the ratings. This includes the potential Barnes and Noble acquisition, which would be executed by LCAP. The event risk that has previously plagued the ratings has subsided given the company's intention to spin-out LCAP and LSTRZ. Fitch believes that the asset mix will be relatively more stable going forward. While the risk remains that e-commerce assets and/or stakes in Expedia or Time Warner may be sold or spun-out, QVC generates 87% of revenues and 95% of EBITDA, providing the primary support for Liberty Media's debt service. Based on Fitch's interpretation of the indentures and the current asset mix at the post-spin Liberty Media, QVC could not be spun away from Liberty Media without consent of the bondholders. Fitch's IDR ratings of QVC and Liberty Media reflect the consolidated credit profile of Liberty Media. Fitch rates both QVC's senior secured bank credit facility and the senior secured notes 'BBB-' (two notches higher than QVC's IDR). The secured issue ratings reflects what Fitch believes would be QVC's standalone ratings. Fitch expects that the ratings would remain unchanged in the event that the remaining security is released. The lease adjusted leverage metric for QVC standalone (2.6 times (x); using a net present value [NPV] method of lease and distribution obligations) are consistent with other similarly rated low investment grade retail names. Fitch recognizes that EBITDA margins (21.4%) and free cash flow (FCF) to both unadjusted and adjusted debt of 32.5% and 16%, respectively, are solid for the ratings. When comparing to other media names covered by Fitch, the unadjusted leverage metrics at QVC and consolidated Liberty Media are solid for the current ratings. The ratings reflect the company's intentions to manage gross unadjusted leverage at Liberty Media in the 3.5x to 4x range. The ratings reflect Fitch's expectation that QVC standalone unadjusted leverage will be managed under 2.5x. The ratings incorporate an expectation for continued acquisitions. Fitch recognizes that there is a risk of an acquisition of HSN Inc. However, Fitch believes an acquisition of HSN Inc. may be structured in a manner that would not impact current ratings. Fitch believes liquidity at Liberty Interactive will be sufficient to support operations and QVC's expansion into other markets. Fitch expects acquisitions and share buybacks to be a primary use of FCF and expects share buyback activity to restart post the spin-off of LCAP and LSTRZ. Key Rating Drivers: -- Ratings could be pressured if unadjusted leverage for QVC exceeded 2.5x or Liberty Media's exceeded the company's targeted thresholds. If QVC exceeded Fitch's targets and Liberty Media was still within its threshold, QVC secured debt ratings could be pressured. -- Fitch believes that the current financial policy is consistent with the current ratings. If the company were to manage to more conservative leverage targets, ratings may be upgraded. QVC Security: The QVC facility and notes benefit from a security interest in the capital stock of QVC and are guaranteed by QVC's material and domestic subsidiaries. The secured collateral may be removed as QVC's leverage has been below 2x for two consecutive fiscal quarters, as permitted under the company's credit agreement. The collateral package would be reinstated for both the banks and the senior notes in the event that last 12 months leverage exceeded 3x for two consecutive quarters. Revenues and EBITDA margins: The ratings reflect the positive growth QVC has achieved over the past year, with revenues up 6% in 2010 and 4% in the first quarter of 2011. Under Fitch's conservative base case, revenues are expected to grow in the low- to mid-single digits and EBITDA margins are expected to remain relatively consistent. Liquidity: Fitch calculates $1 billion of FCF at Liberty Interactive in 2010. Fitch expects FCF to be in the range of $750 million to $1 billion in 2011. As of March 31, 2011, liquidity for Liberty Interactive included $1.3 billion in cash and $1.2 billion available under the QVC credit facility, which expires in September 2015. In addition, the company's balance sheet includes $2.3 billion in marketable, available-for-sale securities and investments in affiliates (includes the Time Warner basket of stocks and Expedia). If the market value of the Expedia shares were used, Fitch calculates the total value of these assets at $3.1 billion. Fitch believes these assets could be liquidated in the event that Liberty Media needed additional liquidity. Liberty Interactive near-term maturities include $1.1 billion of exchangeable debentures that may be put to the company in 2013 and approximately $324 million in senior notes maturing in 2013. Fitch believes Liberty Media has sufficient liquidity (including the Time Warner basket of stocks) to handle these maturities. Leverage: Pro forma for the spin-off, Fitch estimates Liberty Media's consolidated gross unadjusted leverage at 4x, net leverage at 3.4x, and net leverage including publicly held assets (primarily Expedia and the basket of Time Warner shares) at 1.7x. Gross interest coverage is estimated at 4.5x. QVC's gross unadjusted leverage (all debt at QVC is secured) was 1.7x as of March 31, 2011, and would be unchanged pro forma for the spin-off. Fitch has taken these rating actions: Liberty -- IDR upgraded to 'BB' from 'BB-'; -- Senior unsecured debt upgraded to 'BB' from 'BB-'. QVC -- IDR upgraded to 'BB' from 'BB-'; -- Senior secured debt affirmed at 'BBB-'. The Rating Outlook is Stable. LOS ANGELES DODGERS: Wins Interim Approval of Highbridge DIP Loan ----------------------------------------------------------------- The Los Angeles Dodgers on Tuesday won interim authority to use the $60 million portion of the $150 million in postpetition secured financing from affiliates of JPMorgan Chase & Co. The DIP lenders are HPS-Senior Loan Fund II, L.P., Highland Senior Loan Holdings, L.P., and affiliated entities in the Highbridge Senior Loan Fund II family of funds. The Dodgers said in a statement it will use the funds, among other things, to operate its day to day business and pay vendors and other suppliers for post-petition goods and services. The Court, according to the statement, has approved additional first day motions so that the team's ongoing operations, on and off the field, will not be disrupted. In this regard, the Dodgers received permission from the Court to, among other things: * Pay its employees wages and benefits in the ordinary course of business; and * Comply with all of the team's current obligations under its collective bargaining agreements with its players and announcers, including revenue sharing payments to other baseball clubs. The Wall Street Journal's Matthew Futterman reports that lawyers for Major League Baseball tried to block the deal on the grounds that the interest rate of more than 10% and a $4.5 million commitment fee were too high. MLB asked the Bankruptcy Court instead to approve an MLB-backed financing package that includes a lower interest rate and no commitment fee. If approved, it would essentially make MLB the team's priority creditor. According to the Journal, in approving the Highbridge loan, U.S. Bankruptcy Court Judge Kevin Gross didn't settle whether it will be used as the team's permanent debtor-in-possession financing. That question will be litigated during the next month, with Judge Gross scheduling a July 20 hearing on the matter. The Journal also reports Highbridge agreed to reduce its fee to $250,000 if Judge Gross rules in favor of MLB next month. Highbridge and the Dodgers also agreed to remove provisions that called for the Dodgers to move toward a new media rights deal by certain deadlines and according to a pre-determined schedule. The DIP loan matures one year after the Petition Date. According to papers filed by the Debtors on Monday, the DIP facility requires the Debtors to conduct a process to license the Dodgers' broadcast media rights. As a condition to further funding, the Debtors and the lenders are to reach by July 29, 2011, an agreement with respect to a process and timing for the license of the media rights. The Debtors also propose to grant the DIP Lenders liens on avoidance actions under Chapter 5 of the Bankruptcy Code. The Debtors told the Court that, in the days and weeks prior to the bankruptcy filing, they explored alternative financing from a number of potential lenders and from a variety of financial institutions. Chief among these alternatives was a 17-year TV- rights deal with Fox Sports valued at about $3 billion that would have provided sufficient liquidity in both the short term and the future. In the meantime, the Debtors also reached out to institutional lenders, professional investors, and other parties about providing financing for Dodgers' immediate liquidity crisis. After MLB commissioner Bud Selig refused on June 20 to approve the Fox deal, the Debtors redoubled their efforts to find alternative sources of long term financing. According to the Debtors, only the JPMorgan entities were willing to provide a commitment for financing of a sufficient amount and within the Debtors' time constraints. The Debtors note that no other lender was willing to provide the $40 million in funding necessary to meet the team's payroll obligations on June 30 and July 1, let alone the additional $110 million offered by the DIP facility to fund continued operation of the business. According to The Wall Street Journal, a spokesman for Mr. Selig didn't return phone calls seeking comment. At the hearing, MLB lawyer Thomas Lauria, said: "We're not waiving or giving up or impairing in any way the rights baseball has." The Journal says lawyers for MLB plan to assert the league's rights under the league's constitution that allow the commissioner to seize the club in the event of the bankruptcy filing. Dodgers' lawyer Bruce Bennett said those provisions are "unenforceable." Mr. Lauria may be reached at: Thomas E. Lauria, Esq. WHITE & CASE Southeast Financial Center 200 South Biscayne Boulevard, Suite 4900 Miami, FL 33131-2352 Tel: 305-995-5282 E-mail: tlauria@whitecase.com About the Los Angeles Dodgers Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a professional Major League Baseball club in the Los Angeles metropolitan area. Frank McCourt, a Boston real-estate developer who unsuccessfully bid for the Boston Red Sox, bought the Dodgers from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for $330 million. Mr. McCourt also bought the Dodgers Stadium from Fox for $100 million. Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB Commissioner Bud Selig rejected a television deal with News Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for June 30 and July 1. Fox Sports has exclusive cable television rights for Dodgers games until the end of 2013 baseball season. Chapter 11 filings were also made for LA Real Estate LLC, an affiliated entity which owns Dodger Stadium, and three other related holding companies. The petition estimates assets of up to $500 million and debts of up to $1 billion. According to Forbes, the team is worth about $800 million, making it the third most valuable baseball team after the New York Yankees and the Boston Red Sox. Judge Kevin Gross presides over the case. lawyers at Young, Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the Debtors' bankruptcy counsel. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection, according to The Wall Street Journal. LYRTECH INC: Finexcorp Intends to Enforce Security -------------------------------------------------- Lyrtech Inc. receives on June 17, 2011, notices of intention to enforce security issued by a secured creditor, Finexcorp Inc., under subsection 244(1) of the Bankruptcy and Insolvency Act. These notices that are subject to a 10 days grace period have been received without any prior notice of default or breach of covenants as specified in the loan agreements. The Corporation is now evaluating the situation with the intent of formulating a strategy that will best preserve and protect the interests of the Corporation and its shareholders. In this context, the Corporation has requested a halt trading of its shares in the TSX Venture Exchange Inc. The Corporation will continue to provide updates as it develops the next steps of its strategy. Lyrtech Inc. -- http://www.lyrtech.com-- is a public corporation whose shares are listed on the TSX Venture Exchange under the ticker abbreviation LYT. Lyrtech exports to more than twenty countries. MAJESTIC TOWERS: Court OKs Steckbauer Weinhart as Special Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized Majestic Towers, Inc., to employ Steckbauer Weinhart & Jaffe, LLP as its special real estate counsel. The Debtor intends to effectuate the sale of the property and the hotel as a going concern. The Debtor is the operator of a 385 room, 12 storey hotel commonly known as The Wilshire Hotel. The Debtor operates the hotel under a lease agreement between it and 3515 Wilshire, LLC, the owner of the real property located at 3515 Wilshire Boulevard, Los Angeles, California. SWJ will be employed primarily for the purpose of providing real estate transactional services, and to negotiate letters of intent and purchase agreement with competing prospective purchasers. SWJ will be paid a postpetition retainer of $60,000, beginning with a $20,000 payment in May and payments of the same amount in June and July 2011. About Majestic Towers, Inc. Los Angeles, California-based, Majestic Towers, Inc., filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 11-28407) on April 28, 2011. Bankruptcy Judge Sheri Bluebond presides the case. Victor A. Sahn, Esq., and Mark S. Horoupian, Esq., at Sulmeyerkupetz, A Professional Corporation, in Los Angeles, California, serve as the Debtor's counsel. The Debtor disclosed $7,685,411 in assets and $9,237,464 in liabilities as of the Chapter 11 filing. MAJESTIC TOWERS: Taps JWM CPA & Company as Accountant ----------------------------------------------------- Majestic Towers, Inc., asks the U.S. Bankruptcy Court for the Central District of California for permission to employ JWM CPA & Company, P.C., as accountant effective April 28, 2011, for the purpose of preparing tax returns and providing other accounting services as necessary. JWM has been rendering specialized accounting services to the Debtor since the filing of its petition. JWM holds a prepetition claim against the Debtor in the amount of $15,000 for services rendered pre-petition. However, JWM is being employed for a special and specific purpose that will not include an examination of claims. John W. McLellan will be the only person performing services for the Debtor on behalf of the Accountant. Mr. McLellan's current billing rate is $250 an hour. Mr. McLellan has not yet been paid a retainer for his services in this Case. However, the Debtor proposes to pay the Accountant a post-petition retainer in the amount of $31,500 for three months of services ($10,500 per month for three months). This retainer will be paid over the next few months in this case, from the Debtor's operating revenues. This amount is reflected as an expenditure in the cash collateral budget(s) that the Debtor submitted to the Court. John W. McLellan, of JWM & Associates, CPA, assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Majestic Towers, Inc. Los Angeles, California-based, Majestic Towers, Inc., filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 11-28407) on April 28, 2011. Bankruptcy Judge Sheri Bluebond presides the case. Victor A. Sahn, Esq., and Mark S. Horoupian, Esq., at Sulmeyerkupetz, A Professional Corporation, in Los Angeles, California, serve as the Debtor's counsel. The Debtor disclosed $7,685,411 in assets and $9,237,464 in liabilities as of the Chapter 11 filing. MAJESTIC TOWERS: To Appoint Joseph Herman as Employment Counsel --------------------------------------------------------------- The United States Bankruptcy Court Central District of California has approved Majestic Towers, Inc.'s application to employ Joseph E. Herman, Esq., as its Special Labor and Employment Counsel. Mr. Herman's employment was sought to represent the Applicant's interests in negotiations with the Debtor's unionized workforce and to provide counsel, to act on its behalf in any and all matters requiring Mr. Herman's expertise that may arise in the course of the chapter 11 case, and to advise the Debtor so that it may properly comply with all applicable state and federal laws, rules and regulations. Mr. Herman will be paid a post-petition retainer in the amount of $50,000.00. This retainer shall be paid over the next few months in this case, from the Debtor's operating revenues . Mr. Herman shall be allowed to draw down on its retainer on a monthly basis, upon providing 10 days notice of his fees and expenses. About Majestic Towers Los Angeles, California-based, Majestic Towers, Inc., filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 11-28407) on April 28, 2011. Bankruptcy Judge Sheri Bluebond presides the case. Victor A. Sahn, Esq., and Mark S. Horoupian, Esq., at Sulmeyerkupetz, A Professional Corporation, in Los Angeles, California, serve as the Debtor's counsel. The Debtor disclosed $7,685,411 in assets and $9,237,464 in liabilities as of the Chapter 11 filing. MCMONIGLE RESIDENTIAL: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: McMonigle Residential Group, Inc. 1000 Newport Drive Newport Beach, CA 92660 Bankruptcy Case No.: 11-18935 Chapter 11 Petition Date: June 23, 2011 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Robert N. Kwan Debtor's Counsel: James D. Zhou, Esq. LAW OFFICES OF ZHOU AND CHINI 6 Jenner, Suite 250 Irvine, CA 92618 Tel: (949) 485-4650 Fax: (949) 485-4650 E-mail: jzhou@zhouchinilaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb11-18935.pdf The petition was signed by John McMonigle, president. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- John McMonigle 11-15398 04/28/11 MDC HOLDINGS: S&P Cuts CCR to BB+ on Weak Spring Selling Season --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on MDC Holdings Inc. to 'BB+' from 'BBB-'. "At the same time, we lowered our rating on the company's senior unsecured notes to 'BB+' and assigned our '3' recovery rating to the notes, indicating our expectation for meaningful (50%-70%) recovery. We also revised our outlook on the company to stable from negative. The rating action affects $1.25 billion of senior notes," S&P said. "The downgrade reflects a spring selling season that was weaker than we expected and our belief that the U.S. housing market recovery will be weaker than previously anticipated," said credit analyst George Skoufis. "In this environment, we do not think that MDC will achieve the revenue growth and margin improvement necessary to fully return to profitability and bring credit ratios back to stronger, predownturn levels." "Our stable outlook reflects our view that the company will maintain a strong liquidity position to weather another one-to-two years of sluggish housing demand. We expect MDC will continue to invest in new land, but would moderate its land spending to preserve cash if conditions deteriorate. We would take a negative rating action if conditions worsen and the company continues to invest heavily in land and drains its currently strong cash position and/or if we believe that cash balances are insufficient to cover capital needs over the next two years. A positive rating action is unlikely over the next 12 months, given our expectation for a protracted housing market recovery and credit ratios that will remain weak for the rating," S&P said. MERIT GROUP: Court Approves McCarth Law as Panel's Co-Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Carolina authorized the Official Committee of Unsecured Creditors of the Chapter 11 cases of The Merit Group Inc. and its debtor-affiliates to retain McCarthy Law Firm LLC as co-counsel. As reported in the Troubled Company Reporter on June 9, 2011, the firm has agreed to: a. assist and supplement lead co-counsel with advice to the Committee of its rights, powers and duties in the chapter 11 cases; b. attend meetings with the Committee and hearings before the Court; c. assist and supplement lead co-counsel in consultations with the Debtors relative to the administration of the chapter 11 cases; d. assist and supplement lead co-counsel and other Committee professionals in the investigation of the acts, conduct, assets, liabilities and financial condition of the Debtor and the operation of the Debtors' businesses; e. assist and supplement lead co-counsel and other Committee professionals in investigating the validity, extent, and priority of liens of secured claimants against the Debtors' estates, and investigating the acts and conduct of such secured creditors to determine whether any causes of action may exist. The customary and proposed hourly rates to be charged by McCarthy Law for the individuals expected to be directly involved in representing the Committee are: G. William McCarthy, Jr. $400 Daniel J. Reynolds, Jr. $300 Sean P. Markham $200 W. Harrison Penn $200 Attorneys $175 - $425 Paralegals/ Assistants $100 - $125 G. William McCarthy, Jr., Esq., of McCarthy Law Firm, LLC, assured the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Merit Group Based in Spartanburg, South Carolina, The Merit Group Inc., formerly Lancaster Distributing Company, serves as one of the leading paint sundries distributors in the United States. Its markets also include Mexico, the Caribbean Islands, Central America and South America. Merit Group filed for Chapter 11 bankruptcy protection (Bankr. D. S.C. Lead Case No. 11-03216) on May 17, 2011. Judge Helen E. Burris presides over the case. Michael M. Beal, Esq., McNair Law Firm PA, represents the Debtors. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent; and Morgan Joseph TriArtisan LLC, investment banker. In its petition, Merit Group estimated assets of $1 million and $10 million and debts between $50 million and $100 million. DIP Lender Regions Bank is represented by lawyers at Nexsen Pruet Jacobs & Pollard and Parker, Hudson, Rainer & Dobbs, LLP. The U.S. Trustee has named seven members to the Official Committee of Unsecured Creditors. MERIT GROUP: Files Schedules of Assets and Liabilities ------------------------------------------------------ The Merit Group Inc. filed with the U.S. Bankruptcy Court for the District of South Carolina its schedules of assets and liabilities, and statements of financial affairs, disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ----------- A. Real Property $1,450,000 B. Personal Property $5,554,048 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $63,474,951 E. Creditors Holding Unsecured Priority Claims $422,945 F. Creditors Holding Unsecured Non-priority Claims $2,712,049 ------------ ------------ TOTAL $7,004,048 $66,609,946 A full-text copy of the schedules and statements is available for free at http://bankrupt.com/misc/MERITGROUP_schedules.pdf About Merit Group Based in Spartanburg, South Carolina, The Merit Group Inc., formerly Lancaster Distributing Company, serves as one of the leading paint sundries distributors in the United States. Its markets also include Mexico, the Caribbean Islands, Central America and South America. Merit Group filed for Chapter 11 bankruptcy protection (Bankr. D. S.C. Lead Case No. 11-03216) on May 17, 2011. Judge Helen E. Burris presides over the case. Michael M. Beal, Esq., McNair Law Firm PA, represents the Debtors. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent; and Morgan Joseph TriArtisan LLC, investment banker. In its petition, Merit Group estimated assets of $1 million and $10 million and debts between $50 million and $100 million. DIP Lender Regions Bank is represented by lawyers at Nexsen Pruet Jacobs & Pollard and Parker, Hudson, Rainer & Dobbs, LLP. The U.S. Trustee has named seven members to the Official Committee of Unsecured Creditors. MPB HOLDINGS: Case Summary & 10 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: MPB Holdings, LLC 575 W. Chandler Blvd #229 Chandler, AZ 85225 Bankruptcy Case No.: 11-18232 Chapter 11 Petition Date: June 24, 2011 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Eileen W. Hollowell Debtor's Counsel: Clifford B. Altfeld, Esq. ALTFELD & BATTAILE P.C. 250 N. Meyer Ave. Tucson, AZ 85701-1090 Tel: (520) 622-7733 Fax: (520) 622-7967 E-mail: cbaltfeld@abazlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 10 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/azb11-18232.pdf The petition was signed by Steven R. Ball, manager. NEBRASKA BOOK: To File Plan Documents "Within A Few Days" --------------------------------------------------------- Nebraska Book Company, Inc., intends to file a plan of reorganization "within a few days" and related disclosure statement within the next 20 days, and seek authority to move forward with the plan solicitation and confirmation process swiftly, according to Alan G. Siemek, its Chief Financial Officer. Mr. Siemek said the Debtors are aiming for a short stay in bankruptcy. Nebraska Book on Monday commenced a pre-arranged Chapter 11 restructuring, through which it will remove roughly $150 million in debt from their prepetition balance sheet while paying general unsecured creditors in full. The Debtors blamed their bankruptcy filing on digital and online competition, including students' shift towards online rental textbook providers, areas outside the Debtors' core business model; and on publishers' unwillingness to provide textbooks on usual credit terms. In the weeks leading up to the Petition Date, all five of the Debtors' largest suppliers of new textbooks requested that the Debtors pay cash in advance for new textbook orders. According to Mr. Siemek, over the last seven months, the Debtors and their advisors engaged in discussions with numerous stakeholders, parties in interest, and potential partners for a comprehensive recapitalization, which led to multiple indications of interest and various restructuring proposals, including proposals from certain of the Debtors' existing lenders, noteholders, and equity holders. After considering the indications of interest and the various proposals, the Debtors were able to negotiate terms for a consensual transaction. On June 26, 2011, the Debtors entered into a Restructuring and Support Agreement with holders of an aggregate amount of over 95% of their 8.625% senior subordinated notes due 2012, and holders of over 75% of their 11% senior discount notes due 2013. The RSA contemplated the Chapter 11 bankruptcy. To facilitate enforcement of the Plan, the Debtors have obtained commitments for a $200 million postpetition secured financing facility with JPMorgan Chase Bank, which, together with cash on hand, will provide the Debtors with sufficient liquidity to fund the administration of their chapter 11 cases and continue their day-to-day operations. Among other things, the Debtors' draft Plan provides that: -- Claims under the $75 million prepetition asset-based revolving credit facility with JPMorgan -- First Lien Facility -- will be paid in full in cash or otherwise Unimpaired. As of the Petition Date, $26.3 million was outstanding under the First Lien Facility, which matures Sept. 1, 2011; -- To the extent that holders of second lien notes agree to a less favorable treatment, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Claim in Class 2, each Holder will be paid in full in Cash. The Debtors issued $200 million senior secured notes at a discount of $1.0 million with unamortized bond discount of $500,000. Wilmington Trust FSB serves as trustee and collateral Agent under the Second Lien Notes Indenture. As of the Petition Date, the outstanding principal balance of the Second Lien Notes was $200 million. The Second Lien Notes mature Dec. 1, 2011; -- Claims under the so-called Opco Notes will be allowed in an aggregate amount equal to $175 million. In satisfaction of each claim, each holder will receive its pro rata share of: (a) a $30.6 million cash payment from the proceeds of new second lien secured notes to be issued by Nebraska Book; (b) the new unsecured notes with a face value of $120 million; and (c) 78% of the New Common Equity. The OpCo Notes refer to $175 million of senior subordinated notes that require semi-annual interest payments at a fixed rate of 8.625% and mature on March 15, 2012. As of the Petition Date, the outstanding principal balance of the OpCo Notes was $175 million. BNY Midwest Trust Company serves as trustee under the OpCo Indenture; -- Claims under the so-called Acqco Notes will be allowed in an aggregate amount equal to $77 million. In satisfaction of each claim under the AcqCo Notes, each holder will receive its pro rata share of 22% of the New Common Equity. The AcqCo Notes refer to $77 million of senior discount notes that require semi-annual interest payments which began on Sept. 13, 2008, at a fixed interest rate of 11% and mature on March 15, 2013. As of the Petition Date, the outstanding principal balance of the AcqCo Notes was $77 million; -- Trade creditors and all other general unsecured claims will be paid in full; -- The Debtors' existing equity interests will be cancelled and holders may be issued New Warrants if Weston Presidio and each of its affiliates which are Holders of HoldCo Interests either (i) executes a joinder to the Plan Support Agreement which binds at least 90% in amount of the Holdco Interests to support the Restructuring Transactions, or (ii) does not object to the Plan evidencing the Restructuring and votes to accept the Plan. Weston Presidio relates to a group of jointly managed private equity funds, including Weston Presidio Capital III, L.P., Weston Presidio Capital IV, L.P., WPC Entrepreneur Fund, L.P., and WPC Entrepreneur Fund II, L.P., which gained a controlling interest in NBC Acquisition Corp., and hence in Nebraska Book, in 2004. The Plan results in a full recovery by trade creditors and other general unsecured creditors, other than the holders of OpCo and AcqCo notes. The RSA has an automatic termination clause. It will terminate automatically upon the Company's failure to complete a Restructuring by Nov. 3, 2011. The RSA also set other milestones the Company must achieve related to the Chapter 11 process. About Nebraska Book Company Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the leading providers of new and used textbooks for college students in the United States. Nebraska Book and seven affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002 to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over the case. lawyers at Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The Debtors; restructuring advisors are AlixPartners LLC; the investment bankers are Rothschild, Inc.; the auditors are Deloitte & Touche LLP; and the claims agent is Kurtzman Carson Consultants LLC. As of the petition date, the Debtors had consolidated assets of $657,215,757 and debts of $563,973,688. JPMorgan Chase Bank N.A., as administrative agent for the DIP lenders, is represented by lawyers at Richards, Layton & Finger, P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment Management Inc., the DIP arranger, is represented by lawyers at Bayard, P.A., and Willkie Farr & Gallagher LLP. An ad hoc committee of holders of more than 50% of the Debtors' Second Lien Notes is represented by lawyers at Brown Rudnick. An ad hoc committee of holders of the Debtors' 8.625% unsecured notes are represented by Milbank, Tweed, Hadley & McCloy LLP. NEBRASKA BOOK: Taps Kurtzman Carson as Claims Agent --------------------------------------------------- Nebraska Book Company and its debtor-affiliates seek permission to employ Kurtzman Carson Consultants LLC as their notice and claims agent. The parties have entered into an engagement letter dated June 3, 2011. Prior to the Petition Date, the Debtors paid KCC a $25,000 retainer. Albert H. Kass, Vice President of Corporate Restructuring Services of Kurtzman Carson, attests that his firm neither holds nor represents any interest adverse to the Debtors' estates in connection with any matter on which it would be employed and that it is a "disinterested person," as referenced in section 327(a) of the Bankruptcy Code and as defined in section 101(14). KCC may be reached at: Attn: Drake D. Foster KURTZMAN CARSON CONSULTANTS LLC 2335 Alaska Ave. El Segundo, CA 90245 Tel: (310) 823-9000 Fax: (310) 823-9133 E-mail: dfoster@kccllc.com About Nebraska Book Company Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the leading providers of new and used textbooks for college students in the United States. Nebraska Book and seven affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002 to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over the case. lawyers at Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The Debtors; restructuring advisors are AlixPartners LLC; the investment bankers are Rothschild, Inc.; the auditors are Deloitte & Touche LLP; and the claims agent is Kurtzman Carson Consultants LLC. As of the petition date, the Debtors had consolidated assets of $657,215,757 and debts of $563,973,688. JPMorgan Chase Bank N.A., as administrative agent for the DIP lenders, is represented by lawyers at Richards, Layton & Finger, P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment Management Inc., the DIP arranger, is represented by lawyers at Bayard, P.A., and Willkie Farr & Gallagher LLP. An ad hoc committee of holders of more than 50% of the Debtors' Second Lien Notes is represented by lawyers at Brown Rudnick. An ad hoc committee of holders of the Debtors' 8.625% unsecured notes are represented by Milbank, Tweed, Hadley & McCloy LLP. NEBRASKA BOOK: Moody's Cuts Senior Secured Notes to 'Caa2' ---------------------------------------------------------- Moody's Investors Service lowered NBC Acquisition Corp.'s Probability of Default Rating to D from Caa3 and its Corporate Family Rating to Caa3 from Caa2. At the same time, Moody's lowered Nebraska Book Company's senior secured notes to Caa2 from B2, and its senior subordinated notes to Ca from Caa3. NBC Acquisition Corp. is the parent company of Nebraska Book Company. Ratings lowered: NBC Acquisition Corp -- Probability of Default Rating to D from Caa3 -- Corporate Family Rating to Caa3 from Caa2 -- $77 million senior unsecured notes to C (LGD 5, 82%) from Ca (LGD 5, 79%) Nebraska Book Company -- $200 million senior secured notes due to Caa2 (LGD 2, 12%) from B2 (LGD 2, 12%) -- $175 million senior subordinated notes to Ca (LGD 3, 49%) from Caa3 (LGD 3, 46%) RATINGS RATIONALE The downgrade of NBC Acquisition Corp.'s probability of Default rating to D reflects the Chapter 11 bankruptcy filing by the company and its subsidiaries including Nebraska Book Company. Subsequent to today's actions, Moody's will withdraw the ratings because NBC Acquisition Corp and Nebraska Book Company have entered bankruptcy. Please refer to Moody's Withdrawal Policy on moodys.com. The principal methodology used in rating NBC Acquisition Corp was the Global Retail Industry Methodology, published December 2006. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA, published June 2009. Headquartered in Lincoln, NE, Nebraska Book Company operates 280 college bookstores and is also a wholesale distributor of used college textbooks. Revenues for the latest 12-month period ended Dec. 31, 2010 were approximately $608 million. NEBRASKA BOOK: S&P Lowers Ratings on Debt Issues to 'D' ------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Lincoln. Neb.-based NBC Acquisition Corp. and its wholly owned operating subsidiary, Nebraska Book Co. Inc., to 'D' from 'CCC'. All issue-level ratings on the company's debt issues were also lowered to 'D'. The recovery ratings on the company's debt issues remain unchanged. The 'D' rating on NBC Acquisition follows the company's filing for Chapter 11 bankruptcy protection. "NBC Acquisition will have access to $200 million of debtor-in-possession financing and cash on hand (about $20 million at June 26, 2011), which we expect will allow it to maintain operations during the Chapter 11 restructuring while the company addresses its capital structure. As of Dec. 31, 2010 (the company's third quarter), the company had reported debt of $469.8 million and revenues for the last 12 months of $607.8 million," S&P said. NEWLAND INT'L: Fitch Cuts Rating on Senior Secured Notes to 'B-' ---------------------------------------------------------------- Fitch Ratings has downgraded the rating on the notes issued by Newland International Properties, Corp.: -- US$220 million senior secured notes downgraded to 'B-sf' from 'Bsf'. The transaction remains on Rating Watch Negative due to continuing concerns over further delivery delays, and to monitor the buyers' willingness and ability to close on units upon delivery. Newland International Properties, Corp. is developing the Trump Ocean Club International Hotel & Tower, a multi-use tower located on the Punta Pacifica Peninsula in Panama City, Panama. The downgrade of the transaction is attributed to the ongoing construction and delivery delays, an additional USD$20 million in cost overruns, and new defaults. Unit delivery has been further delayed and this may cause pressure in meeting future debt payments which will include principal amortizations starting in November 2011. The ability of buyers to obtain mortgage financing, if needed, continues to be a concern. Since buyers do not need to show proof of their ability to pay until the certificate of occupancy is presented, it is difficult to track the potential for unit defaults upon delivery. However, given that the project is completed, Fitch expects this to become more apparent over the next few months as more units start closing. The unit delivery process is projected to be completed in phases over the next few months and the opening of the hotel is expected to be in early July 2011. During 2011, five more units were classified as defaulted; since inception a total of 39 units have been defaulted. These recognized defaults, in conjunction with limited receivables generated in 2011 and additional collections, resulted in an approximate decrease of nearly $13 million in eligible receivables to $204.3 million, making the project more sensitive to future buyer defaults and dependent upon new unit sales to repay the notes. Due to the delays in unit delivery, Newland has less time to attempt to resell any defaulted units, and this may lead to issues with future debt service payments. As of June 21st, 2011 the debt reserve account is replenished as required under the documents with a current balance of $10.5 million; however, principal payments will begin in November. There is a concern that if the actual closing dates continue to be pushed out and collections coming from the confirmed units drop below the projected amount due to defaults, it will be more difficult for Newland to meet the November debt service payment of $41.9 million ($31.4 million in principal and $10.5 million in interest). In addition, Fitch is increasingly concerned with the project's ability to meet the overall debt outstanding and the associated interest expense as the expected life of the project has been extended. Based on current eligible receivables, costs overruns and discounted inventory prices, it is possible total assets might not be able to cover the debt outstanding due to the increase in carrying costs. This risk can be mitigated if the bond prepays prior to maturity and if inventory is sold at sufficiently higher prices. NOVA CHEMICALS: Fitch Upgrades Issuer Default Rating to 'BB-' ------------------------------------------------------------- Fitch Ratings has upgraded NOVA Chemicals Corporation's Issuer Default Rating to 'BB-' from 'B+' and its senior unsecured debt ratings to 'BB-' from 'B+/RR4'. The ratings for the senior secured bank credit facility have been affirmed at 'BB+'. The Ratings Outlook is revised to Positive from Stable. The upgrade is based on NOVA's strong operating performance over the past several quarters and its significantly improved credit profile following its acquisition by Abu Dhabi-based International Petroleum Investment Company (IPIC; Fitch IDR of 'AA/F1+') in 2009. NOVA benefits from robust demand and tight supply in its core Olefins/Polyolefins segment, which mainly produces ethylene and polyethylene. The resulting favorable pricing environment coupled with low costs for light, natural gas-based feedstock enable high operating profits and margins. In the last 12 months (LTM) to March 31, 2011, NOVA had operating EBITDA of approximately $1 billion, corresponding to a margin of 20.8%, based on $4.8 billion revenues from continued operations. The company's performance resulted in significant LTM free cash flow of $421 million, based on $580 million cash flow from operations and $159 million capital expenditures. Fitch expects NOVA to continue to generate meaningful free cash flow in 2011. In 2010, NOVA repaid its C$250 million notes. Repayment and stronger operating performance reduced the company's gross balance sheet debt to EBITDA leverage to 1.7 times (x). Gross balance sheet debt of $1.7 billion includes $166 million outstanding balance under the company's accounts receivables securitization program, which the company now reports on the balance sheet. The strengthening of the company's credit profile partially mitigates the key ratings constraints, the price volatility and the demand and supply cyclicality of commodity chemicals. Prices for the company's commodity products sold to third party customers (ethylene, polyethylene, polystyrene and by-products) are volatile as they follow the cyclicality of the industry, which is not only influenced by the economic demand cycle but also by the industry's supply dynamics. Typically, capacity additions come in very sizeable increments and are often executed by multiple industry participants at the same time. After these additions have come online, it often takes multiple years to absorb the resulting supply glut. Based on current announcements, North American ethylene production could see up to 4.5 million metric tons of additional capacity coming online by 2017. If fully completed, these additions would correspond to approximately 17% of the capacity and would have the potential to reverse the currently favorable pricing environment. Another rating constraint is the underperformance of the company's Performance Styrenics division, which had only $81 million revenues and $3 million operating profit in the first quarter of 2011. The lack of critical mass became even more pronounced after the divestiture of NOVA's stake in the INEOS NOVA joint venture, which mainly produced styrene and polystyrene. NOVA completed the sale of the joint venture in the first quarter of 2011 and received EUR47 million, which is still subject to certain pension liability adjustments. NOVA continues to evaluate and to explore strategic options for the Performance Styrenics business unit. NOVA has sizeable short-term debt maturities of $567 million, including the company's $400 million senior unsecured notes due 2012 and outstanding balances under the accounts receivables securitization program also due 2012. Medium-term major maturities are the $400 million senior unsecured notes due 2013. Long-term maturities include the $350 million notes due 2016, $350 million notes due 2019 and $100 million notes due 2025. Fitch expects NOVA to opportunistically address the short-term and the 2013 maturities either by refinancing or repaying the notes with cash on-hand. The Positive Outlook is based on Fitch's expectation that the favorable ethylene and polyethylene industry dynamics in North America will remain in place over the next several quarters. Costs for light feedstock are expected to remain low and, despite the announced capacity additions, supply should remain tight. Fitch expects that NOVA will continue to generate meaningful profits and cash flows over these quarters as the announced capacity additions will come online only gradually and over an extended period of time. NOVA has robust liquidity that will enable the company to fund working capital and capital expenditure requirements and to withstand less favorable industry conditions, if a reversal of the positive dynamics were to occur. At March 31, 2011, NOVA had liquidity of $958 million, consisting of $382 million cash on-hand and $576 million available under its syndicated and bilateral credit facilities. NOVA's main $425 million senior secured credit facility, which matures in November 2013, is governed by a senior-debt-to-cash- flow covenant of maximum 3x and a debt-to- capitalization covenant of maximum 60%. NOVA was in compliance with these covenants at March 31, 2011. Fitch expects the company to remain in compliance throughout the lifetime of the facility. The facility is secured by the net book value of assets in Canada, including NOVA's interest in the Joffre, Alberta chemical complex and the Corunna, Ontario facility. The value of the collateral justifies the two notches rating differential over the IDR and the senior unsecured debt. In addition, NOVA has $170 million senior unsecured bilateral revolving credit facilities, which are not governed by the financial covenants. Of these facilities, $30 million expires in September 2011, $40 million in September 2013 and $100 million in September 2015. Additional liquidity comes from the company's $200 million A/R securitization program, which is governed by the same set of financial covenants as the $425 million secured facility, and a $60 million bilateral letter of credit facility. The Positive Outlook also incorporates potential upside from a series of agreements and memorandums of understanding with energy and pipeline companies to enhance the availability of cost- competitive light feedstock at NOVA's production facilities. In fiscal 2010, NOVA ran its main Joffre, Alberta production complex below nameplate capacity due to limited availability of ethane, which was derived from natural gas flow to the U.S. from Canada. Alternative supply from sources ranging from North Dakota to Canadian oil sand upgrade facilities for the Joffre, Alberta complex and to the Marcellus Shale Basin for the Corunna, Ontario facility, will come online beginning in 2012. The anticipated incremental supply of light feedstock will allow NOVA to operate its facilities at full capacity during periods of buoyant demand for its olefins and polyolefins products. Catalysts for an upgrade would be strong operating profits and cash flows over the next several quarters with proceeds used to further reduce the company's leverage. Catalysts for a Stable Outlook or Negative rating action would be a deterioration of the supply/demand balance, particularly against the backdrop of additional capacity coming online in North America, or a return to recessionary economic concessions which would reverse the company's recent operating and financial performance. Fitch upgrades these ratings for NOVA: -- Long-term IDR to 'BB-' from 'B+'; -- Senior unsecured revolving credit facilities to 'BB-' from 'B+/RR4'; -- Senior unsecured notes and debentures to 'BB-' from 'B+/RR4'. This rating has been affirmed: -- Senior secured revolving credit facility at 'BB+'. The Rating Outlook is Positive. ONE PELICAN: Files Schedules of Assets & Liabilities ---------------------------------------------------- One Pelican Hill Road North LP filed with the U.S. Bankruptcy Court for the Northern District of Nevada, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------- ----------- A. Real Property Unknown B. Personal Property $4,248,963 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $$29,805,822 E. Creditors Holding Unsecured Priority Claims $6,340 F. Creditors Holding Unsecured Non-priority Claims $4,180,673 ------------ -------------- TOTAL $4,248,963 $33,992,873 One Pelican Hill Road North LP, aka Villa del Lago, owns a 12.5- acre hillside property, once valued as high as $87 million, featuring a 17,000-square-foot, three-story mansion, a private lake, tennis court, vineyard and horse stables. It filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-17998) on June 6, 2011, to halt a foreclosure sale by OneWest Bank that had been scheduled for June 20. Judge Robert N. Kwan presides over the case. Marc J. Winthrop, Esq., at Winthrop Couchot PC, serves as the Debtor's bankruptcy counsel. Spach Capaldi & Waggaman, LLP, serves as the Debtor's special litigation counsel. In its petition, the Debtor estimated assets and debts of $10 million to $50 million. The petition was signed by Corey Gulbranson, managing member of VDL One Pelican Hill, LLC, its general partner. ORANGE COUNTY EMPLOYEES: Head Sentenced to 3 Years in Prison ------------------------------------------------------------ The Associated Press reports that Sandra H. Cooper, the head of Orange County Employees Federal Credit Union, has been sentenced to more than three years in prison after pleading guilty earlier this year to federal charges relating to embezzlement. The AP says Ms. Cooper, who was also ordered to pay restitution of $1.17 million, could have received up to 10 years. In February, the AP relates, Ms. Cooper pleaded guilty to money laundering in federal court in Beaumont. The AP, citing court documents, relates that federal officials said the president of the Orange County Employees Federal Credit Union embezzled almost $1.2 million over 4 1/2 years. The federal insurer of credit union funds determined that the credit union was insolvent last June, the AP discloses. Ms. Cooper must surrender to the U.S. Marshals Service on July 8, the AP adds. Orange County Employees Federal Credit Union is a Southeast Texas government employees' credit union. ORLANDO, FLA: Fitch Affirms 'B' Rating on TDT Revenue Bonds ----------------------------------------------------------- In the course of routine surveillance, Fitch Ratings has taken these rating actions on the city of Orlando, Florida's bonds: -- $187.8 million tourist development tax revenue bonds, series 2008A affirmed at 'BB+'; -- $33.4 million TDT revenue bonds, series 2008B affirmed at 'B'. The Rating Outlook is Stable. Rating Rationale: -- The 'BB+' rating on the series 2008A bond reflects slim debt service coverage. While current year pledged revenues are expected to hover around 1 times (x) debt service coverage over the next few years, continued growth is required to maintain coverage levels once installment payments cease at the end of fiscal 2018. -- The 'B' rating on the series 2008B bonds incorporates Fitch's expectation that liquidity reserve revenues, and potentially debt service reserve revenues, will be needed to make debt service payments as future TDT revenue growth is needed to prevent a default on the series 2008B bonds. -- The ratings reflect the high leveraging of the revenue stream. -- Fitch believes the long-term profile of Orange County's tourism industry remains strong. Key Rating Drivers: -- Continued stabilization of TDT revenue as well as meaningful recovery over the next few years. -- The exhaustion of the liquidity reserve for series 2008B bonds would put downward pressure on the rating. Security: The bonds are limited obligations of the city secured by the discrete trust estate, including pledged funds, for each respective series of bonds. Pledged funds include revenues provided from 50% of a one cent TDT collected countywide and remitted to the city according to an interlocal agreement, levied county-wide on hotel stays, plus a fixed installment equal to $2.8 million available through 2018. The one cent TDT is a component of the total of the six cent TDT that is levied county-wide for a variety of purposes. Pledged funds are allocated to each trust estate of the three series of bonds (only two of which are rated by Fitch) according to a flow of funds with revenues distributed to each trust estate according to the seniority of the series. Legal provisions include a dedicated liquidity reserve and debt service reserve fund for each series with each established at 50% of respective maximum annual debt service (MADS). Credit Summary: Pledged revenues have fluctuated significantly in recent years due to volatility in TDT collections, which declined 15.5% in bond year 2009. Additional pledged revenues from fixed installment payments accounted for 18.8% of total pledged revenues in BY2010 and provided a small degree of stability. Signs of stabilization are apparent in recent months with year over year growth in each of the past 15 months. Annual TDT collections increased 3.4% in BY2010 while pledged revenues increased 10.2% due to BY2009 including only 11 months of collections. Year to date BY2011 total pledged revenues through the first eight months of collections are up 12.5% with TDT revenues up 15.4%. Fitch reviews coverage of each biannual debt service payment in accordance with the flow of funds and timing of receipts given the thin margins. Based on BY2010 revenues, pledged revenues are expected to provide well over 1x coverage on the series 2008A bonds for the first annual debt service installment payment (May 1) while revenues need to increase a moderate 2.2% in the second half of the year to cover 1x series 2008A debt service on the second debt service installment payment (Nov. 1) through fiscal 2013. Receipts collected for the first two months of the second half of the year in BY2011 indicate that growth will likely occur, barring any future downturn in collections. Series 2008A also has a dedicated liquidity reserve and debt service reserve account cash funded each equal to 50% MADS. Annual second half growth ranging from 5.1% for fiscal 2011 to 16.3% for fiscal 2013 would be needed from BY2010 levels to meet 1x debt service coverage for series 2008B. In accordance with the flow of funds, the city would continue using the series 2008B liquidity reserve, currently cash funded at $0.9 million, equal to 35% of MADS, followed by the 2008B debt service reserve account, cash funded at 50% MADS. Debt service is relatively level for series 2008A while debt service is slightly ascending for series 2008B until fiscal 2016. Additional pledged revenue growth is necessary over the medium term to accommodate the loss of installment payments beginning in fiscal 2019. Legal provisions include a cross-default clause creating a technical default for all series of bonds (series 2008A, series 2008B and series 2008C; series 2008C is not rated by Fitch) if any of the three have an event of default. In an event of default, the flow of funds allows for bond payments to continue, ensuring senior bonds could still be paid even though an event of default would be triggered. Located in central Florida, Orange County's economy is broad and diverse. Having expanded from its traditional base of tourism, the economy now includes professional and business services, education, health care, and biotech. Tourism does continue to play a pivotal role in the area economy with Universal Studios, Sea World and Disney World all located within the county and continues to expand with Universal Studios' opening of the 'Wizarding World of Harry Potter' last spring. The 9.8% April 2011 unemployment rate for the county is down from 10.6% a year prior, driven by strong gains in total employment outpacing labor force growth. PARMALAT S.P.A.: Grant Thornton Wants Suit Tried in Federal Court ----------------------------------------------------------------- Parmalat Capital Finance Limited and Dr. Enrico Bondi, who was appointed Extraordinary Commissioner in each of the Parmalat cases, asked the U.S. District Court for the Southern District of New York to abstain from hearing the two lawsuits they filed against Grant Thornton International and Grant Thornton, LLP, and remand the cases to the Cook County, Illinois state court where they were originally filed. The Grant Thornton Entities assert that the Court should refuse mandatory abstention and allow the cases to proceed in federal court. Grant Thornton argues that Section 1334(c)(2) of the Judiciary and Judicial Procedures Code is inapplicable because the action could have been commenced under Section 1367, as confirmed by Achtman v. Kirby, McInerney & Squire, 464 F.3d 328 (2d Cir. 2006). In Achtman, the Second Circuit affirmed a Section 1367 jurisdiction over a state-law action by federal securities class members against the class attorneys for malpractice in the federal action. Because Plaintiffs cannot defeat this argument on the merits, they have devoted most of their efforts to constructing procedural roadblocks, James L. Bernard, Esq., at Stroock & Stroock & Lavan LLP, in New York, on behalf of Grant Thornton, contends. "True, Defendants did not make this alternative argument when abstention was briefed initially, and once the matter was decided in their favor, they did not -- and were not required to -- make an alternative argument for keeping the case in federal court," Mr. Bernard says. Nevertheless, by its terms and spirit, the Second Circuit's mandate allows the District Court to consider an independent ground for denying mandatory abstention, whether or not it was raised and considered before. Mr. Bernard adds that even if the mandate were more limited, any waiver still may be forgiven and new issues considered. There is ample ground, he asserts, for doing that in this case. Plaintiffs contend that this issue, if raised earlier, might have spared the Second Circuit an unnecessary timeliness inquiry. Mr. Bernard argues that if that is true, it remains true today. He relates that in the interest of efficiency -- and in order to avoid the unnecessary re-litigation of merits issues that Plaintiffs have promised if this case is sent to state court -- the Court can and should consider the argument. He further argues that Plaintiffs fare no better on the merits of the question. Mr. Bernard explains that the Second Circuit has clearly held that supplemental jurisdiction can extend not only to claims within a single action but to claims in a separate action that arise from a common nucleus of operative fact. He says that there can be no doubt that the claims in the securities action and these actions share a common nucleus of fact -- as evidenced by the common briefing on key issues and their consolidation for pretrial proceedings. The settlement of the securities action is irrelevant; the language of Section 1334(c)(2) plainly poses a backward-looking, hypothetical question -- that is, whether Plaintiffs' actions could have been commenced in federal court on some basis other than Section 1334. "[The] Plaintiffs' suggestion that this Court would have declined to exercise supplemental jurisdiction only presupposes its existence," Mr. Bernard says. Thus, abstention is not mandatory because these actions "could have been commenced" in federal court under Section 1367, Grant Thornton contends. On behalf of the Plaintiffs, Kathleen M. Sullivan, Esq., at Quinn Emanuel Urquhart & Sullivan LLP, in New York, points out that during the six-plus years since Grant Thornton removed the Plaintiffs' actions to federal court, they never argued for a jurisdictional basis other than Section 1334(c)(2) until filing their opposition. She contends that since Grant Thornton never advanced that argument, neither the Court nor the Northern District of Illinois nor the Second Circuit addressed it. Instead, those courts addressed the principal argument that Grant Thornton did make: that the actions cannot be timely adjudicated[] in a State forum of appropriate jurisdiction, Ms. Sullivan says. She points out that the Second Circuit spent months preparing a ruling definitively explicating the meaning of "timely adjudicated," which the Circuit viewed as "a matter of first impression." After setting forth its understanding of "timely adjudicated," the Circuit returned the cases to the Court under a narrow mandate, instructing that: (1) the district court should determine whether these cases can be timely adjudicated in Illinois state court at the present time; and (2) the district court should also consider which party should bear the burden to show that these matters cannot be timely adjudicated in state court. Ms. Sullivan argues that accepting Grant Thornton's newly minted argument would render the Circuit Court's efforts for naught by disposing of the case on a ground that would render the timely adjudication inquiry unnecessary. She further argues that Grant Thornton's tactic, which would subvert efficient adjudication and the proper relationship between the District Court and the Circuit, is foreclosed by numerous Second Circuit precedents holding that an appellee who fails to present an argument to the Circuit has waived the argument for purposes of future proceedings. "Those precedents, which Defendants tellingly ignore in favor of a distinguishable 1978 district court decision, require a finding of waiver here," Ms. Sullivan says. Even if Grant Thornton's waiver could somehow be excused, their invocation of Section 1367 as an alternative basis for federal jurisdiction is wrong on the merits, Ms. Sullivan asserts. She explains that these actions, unlike federal securities cases, involve a novel or complex issue of state law, namely, the in pari delicto defense, and different time periods and elements. For these reasons, the Plaintiffs ask the District Court to abstain from hearing the cases under Section 1334(c)(2) and remand them to Illinois state court. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court declared the units insolvent. On June 22, 2004, Dr. Bondi, on behalf of the Italian entities, sought protection from U.S. creditors by filing a petition under Sec. 304 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 04-14268). Parmalat's U.S. operations filed for Chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represented the U.S. Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Three special-purpose vehicles established by Parmalat S.p.A. -- Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. -- commenced separate winding up proceedings before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. were appointed liquidators in the cases. On Jan. 20, 2004, the Liquidators filed a Sec. 304 petition (Bankr. S.D.N.Y. Case No. 04-10362). Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represented the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presided over the Parmalat Debtors' U.S. cases and Sec. 304 cases. In 2007, Parmalat obtained a permanent injunction in the Sec. 304 cases. PARMALAT S.P.A.: Lazio Court Upholds Enforcement Proceedings ------------------------------------------------------------ By means of the decision n. 4982/2011, issued on 1 June 2011, the 2nd Division of the Regional Administrative Court of Lazio (TAR Lazio), this month partially upheld the petitions for the enforcement proceedings (ricorsi per ottemperanza) filed by Ariete Fattoria Latte Sano and by the Municipality of Rome against Parmalat. The Regional Administrative Court of Lazio has acknowledged the previous decisions issued by the same Court and by the Administrative Court of Appeal (Consiglio di Stato) pursuant to which such Courts stated the invalidity of the transfer by the Municipality of Rome to Cirio S.p.A. of Centrale del Latte, which was subsequently acquired by Parmalat. However, the Regional Administrative Court of Lazio has rejected, for lack of jurisdiction, both the petition for the seizure (sequestro conservativo) of the Centrale del Latte's shares owned by Parmalat and the petition for the return (ordine di restituzione) of the same shares to the Municipality of Rome. The subject matter will be judged by the Civil Court which has been requested by Parmalat, by means of a writ of summon on February 2011, to ascertain that the abovementioned shares belong to Parmalat for having acquired such shares subsequently to their transfer by the Municipality of Rome to Cirio, regardless of the statement of invalidity of the latter transfer as subsequently issued. By means of the same decision, the Regional Administrative Court of Lazio has upheld the petition by Ariete Latte Sano and has therefore ordered the Municipality of Rome to pay euro 8,000,000.00 plus interests and revaluation. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court declared the units insolvent. On June 22, 2004, Dr. Bondi, on behalf of the Italian entities, sought protection from U.S. creditors by filing a petition under Sec. 304 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 04-14268). Parmalat's U.S. operations filed for Chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represented the U.S. Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Three special-purpose vehicles established by Parmalat S.p.A. -- Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. -- commenced separate winding up proceedings before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. were appointed liquidators in the cases. On Jan. 20, 2004, the Liquidators filed a Sec. 304 petition (Bankr. S.D.N.Y. Case No. 04-10362). Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represented the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presided over the Parmalat Debtors' U.S. cases and Sec. 304 cases. In 2007, Parmalat obtained a permanent injunction in the Sec. 304 cases. PEGASUS RURAL: Court Approves Epiq Hiring as Claims Agent --------------------------------------------------------- Pegasus Rural Broadband LLC and its debtor-affiliates sought and obtained Bankruptcy Court permission to employ Epiq Systems Inc., as their claims, noticing and balloting agent. The Debtors said engaging an independent third party to act as agent of the Court and the Clerk's office is the most effective, efficient and cost-conscious manner by which to distribute notices, process proofs of claim, assist in the balloting process and perform other related administrative tasks for their cases. The Debtors said they have more than 200 creditors and other potential interested parties and the Clerk's office is not equipped to distribute notices, process all of the proofs of claim filed, and assist in the balloting process. Epiq attest that it is a "disinterested person" within the meaning of Sec. 101(14) of the Bankruptcy Code. About Pegasus Rural Broadband Pegasus Rural Broadband, LLC, and its affiliates, including Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11772) on June 10, 2011. The Debtors are subsidiaries of Xanadoo Company, a 4G wireless Internet provider. Xanadoo Co. was not among the Chapter 11 filers. The subsidiaries sought Chapter 11 protection after they were unable to restructure $52 million in 12.5% senior secured promissory notes that matured in May. The notes are owing to Beach Point Capital Management LP. Xanadoo Holdings, through Xanadoo LLC -- XLC -- offers wireless high-speed broadband service, including digital phone services, under the Xanadoo brand utilizing licensed frequencies in the 2.5 GHz frequency band. As of May 31, 2011, XLC served 12,000 subscribers in Texas, Oklahoma and Illinois. In the summer of 2010, the Debtors closed all of their retail stores and kiosks in its six operating markets and severed all fulltime sales personnel. Since the closings, the Debtors relied one key retailer in each market to serve as local point of presence to market customer transactions. Judge Peter J. Walsh presides over the case. Jonathan M. Stemerman, Esq., Neil Raymond Lapinski, Esq., and Rafael Xavier Zahralddin-Aravena, Esq., Shelley A. Kinsella, Esq., at Elliott Greenleaf, in Wilmington, Delaware, serve as counsel to the Debtor. Epiq Systems, Inc., is the claims and notice agent. Xanadoo Holdings, Pegasus Guard Band and Xanadoo Spectrum each estimated assets of $100 million to $500 million and debts of $50 million to $100 million. PEGASUS RURAL: Taps Elliott Greenleaf as Bankruptcy Counsel ----------------------------------------------------------- Pegasus Rural Broadband LLC and its debtor-affiliates sought Bankruptcy Court permission to employ Elliott Greenleaf as their bankruptcy counsel under a general retainer. The Debtors said attorneys at Elliott Greenleaf have become familiar with their business affairs and capital structure, without elaborating. Elliott Greenleaf was paid a $150,000 retainer on June 8 by the Debtors' parent, Xanadoo Company. Elliott Greenleaf also received from the Debtors $13,595 within 90 days preceding the petition date, leaving, according to papers filed by the Debtors, a retainer balance of $136,405, which was paid in advance of or contemporaneously with services rendered in preparation for the bankruptcy filing. About Pegasus Rural Broadband Pegasus Rural Broadband, LLC, and its affiliates, including Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11772) on June 10, 2011. The Debtors are subsidiaries of Xanadoo Company, a 4G wireless Internet provider. Xanadoo Co. was not among the Chapter 11 filers. The subsidiaries sought Chapter 11 protection after they were unable to restructure $52 million in 12.5% senior secured promissory notes that matured in May. The notes are owing to Beach Point Capital Management LP. Xanadoo Holdings, through Xanadoo LLC -- XLC -- offers wireless high-speed broadband service, including digital phone services, under the Xanadoo brand utilizing licensed frequencies in the 2.5 GHz frequency band. As of May 31, 2011, XLC served 12,000 subscribers in Texas, Oklahoma and Illinois. In the summer of 2010, the Debtors closed all of their retail stores and kiosks in its six operating markets and severed all fulltime sales personnel. Since the closings, the Debtors relied one key retailer in each market to serve as local point of presence to market customer transactions. Judge Peter J. Walsh presides over the case. Jonathan M. Stemerman, Esq., Neil Raymond Lapinski, Esq., and Rafael Xavier Zahralddin-Aravena, Esq., Shelley A. Kinsella, Esq., at Elliott Greenleaf, in Wilmington, Delaware, serve as counsel to the Debtor. Epiq Systems, Inc., is the claims and notice agent. Xanadoo Holdings, Pegasus Guard Band and Xanadoo Spectrum each estimated assets of $100 million to $500 million and debts of $50 million to $100 million. PEGASUS RURAL: Hiring NHB Advisors as Financial Advisors -------------------------------------------------------- Pegasus Rural Broadband LLC and its debtor-affiliates require the services of NHB Advisors Inc. as their financial advisors, to assist in evaluating the Debtors' businesses during the Chapter 11 cases. The Debtors propose to pay NHB its customary hourly rates: Edward T. Gavin, CTP $550 per hour Ross Waetzman, CIRA $375 per hour From time to time, other NHB principals, advisors and associates may be involved in the case as needed. Hourly rates for these principals, advisors and associates range from $250 to $600 per hour. Edward T. Gavin, CTP, attests that NHB has no connection with, and holds no interest adverse to, the Debtors, their estates, their creditors, or any interested party. NHB may be reached at: Edward T. Gavin NHB ADVISORS, INC. 919 Market Street, Suite 1410 Wilmington, DE 19801 Tel: (302) 655-8997 Fax: (302) 655-6063 E-mail: tgavin@nhbteam.com About Pegasus Rural Broadband Pegasus Rural Broadband, LLC, and its affiliates, including Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11772) on June 10, 2011. The Debtors are subsidiaries of Xanadoo Company, a 4G wireless Internet provider. Xanadoo Co. was not among the Chapter 11 filers. The subsidiaries sought Chapter 11 protection after they were unable to restructure $52 million in 12.5% senior secured promissory notes that matured in May. The notes are owing to Beach Point Capital Management LP. Xanadoo Holdings, through Xanadoo LLC -- XLC -- offers wireless high-speed broadband service, including digital phone services, under the Xanadoo brand utilizing licensed frequencies in the 2.5 GHz frequency band. As of May 31, 2011, XLC served 12,000 subscribers in Texas, Oklahoma and Illinois. In the summer of 2010, the Debtors closed all of their retail stores and kiosks in its six operating markets and severed all fulltime sales personnel. Since the closings, the Debtors relied one key retailer in each market to serve as local point of presence to market customer transactions. Judge Peter J. Walsh presides over the case. Jonathan M. Stemerman, Esq., Neil Raymond Lapinski, Esq., and Rafael Xavier Zahralddin-Aravena, Esq., Shelley A. Kinsella, Esq., at Elliott Greenleaf, in Wilmington, Delaware, serve as counsel to the Debtor. Epiq Systems, Inc., is the claims and notice agent. Xanadoo Holdings, Pegasus Guard Band and Xanadoo Spectrum each estimated assets of $100 million to $500 million and debts of $50 million to $100 million. PEGASUS RURAL: Final Hearing on $1.6-Mil. DIP Loan on Sept. 8 ------------------------------------------------------------- The Bankruptcy Court will convene a final hearing Sept. 8, 2011, on the request of Pegasus Rural Broadband LLC and its debtor- affiliates to obtain up to $1.6 million in postpetition secured financing from parent Xanadoo Company. The DIP Note charges 12.5% interest and matures Dec. 11, 2012. The DIP Note may terminate in the event the Debtors obtain DIP financing from another entity without Xanadoo Co.'s prior consent. At the September hearing, the Court will also consider final approval of the Debtors' request to use cash collateral securing obligations to prepetition lenders. The Debtors owe $52 million to Beach Point Capital Management LP pursuant to secured notes that matured in May 2011. The Debtors said they currently have assets with total market value in excess of $200 million. They estimate their total current liabilities, including the Beach Point claim, to be $66.34 million. In their motion for approval of the DIP Note, the Debtors noted they have prepared a 13-week budget that calls for $1.6 million to sustain operating and administrative expenses through Sept. 9, 2011. The Debtors said there is substantial equity cushion and Beach Point is substantially oversecured and is not in need of additional assurances. The DIP Note is secured by liens on the Debtors' assets, including avoidance actions under Chapter 5 of the Bankruptcy Code. The DIP Lender is represented by: Michael B. Jordan, Esq. DRINKER BIDDLE & REATH LLP One Logan Square, Suite 2000 Philadelphia, PA 19103 Tel: (215) 988-2802 Fax: (215) 988-2757 E-mail: Michael.Jordan@dbr.com Counsel to Beach Point are: Mark Shinderman, Esq. Neil Wertlieb, Esq. MILBANK, TWEED, HADLEY & MCCLOY LLP 601 S. Figueroa Street, 30th Floor Los Angeles, CA 90017 Tel: 213-892-4411 E-mail: mshinderman@milbank.com nwertlieb@milbank.com About Pegasus Rural Broadband Pegasus Rural Broadband, LLC, and its affiliates, including Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11772) on June 10, 2011. The Debtors are subsidiaries of Xanadoo Company, a 4G wireless Internet provider. Xanadoo Co. was not among the Chapter 11 filers. The subsidiaries sought Chapter 11 protection after they were unable to restructure $52 million in 12.5% senior secured promissory notes that matured in May. The notes are owing to Beach Point Capital Management LP. Xanadoo Holdings, through Xanadoo LLC -- XLC -- offers wireless high-speed broadband service, including digital phone services, under the Xanadoo brand utilizing licensed frequencies in the 2.5 GHz frequency band. As of May 31, 2011, XLC served 12,000 subscribers in Texas, Oklahoma and Illinois. In the summer of 2010, the Debtors closed all of their retail stores and kiosks in its six operating markets and severed all fulltime sales personnel. Since the closings, the Debtors relied one key retailer in each market to serve as local point of presence to market customer transactions. Judge Peter J. Walsh presides over the case. Jonathan M. Stemerman, Esq., Neil Raymond Lapinski, Esq., and Rafael Xavier Zahralddin-Aravena, Esq., Shelley A. Kinsella, Esq., at Elliott Greenleaf, in Wilmington, Delaware, serve as counsel to the Debtor. Epiq Systems, Inc., is the claims and notice agent. Xanadoo Holdings, Pegasus Guard Band and Xanadoo Spectrum each estimated assets of $100 million to $500 million and debts of $50 million to $100 million. PERKINS & MARIE: U.S. Trustee Appoints Creditors Committee ---------------------------------------------------------- Chapter11Cases.com reports that the United States Trustee disclosed the appointment of the Official Committee of Unsecured Creditors in the bankruptcy cases of Perkins & Marie Callender's Inc. and its affiliated companies. The members of the Creditors' Committee are: * The Coca-Cola Company * Wilmington Trust Company * Standard General Master Fund LP * News America Marketing * Luna Family Trust * Northgate Station, LP * Benjamin Monroy About Perkins & Marie Callender's Based in Memphis, Tennessee, Perkins & Marie Callender's Inc., fka The Restaurant Company, is the owner or franchiser of nearly 600 family-dining restaurants, the Perkins Restaurants and Marie Callender's. Perkins & Marie and several affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-11795) on June 13, 2011. Perkins & Marie disclosed $290 million in assets and $441 million in debt as of the Chapter 11 filing. Judge Kevin Gross presides over the case. Robert S. Brady, Esq., and Robert F. Poppiti, Jr., Esq., at Young, Conaway, Stargatt & Taylor, LLP; and Mitchel H. Perkiel, Esq., Hollace T. Cohen, Esq., and Brett D. Goodman, Esq., at Troutman Sanders, LLP, serve as bankruptcy counsel. The Debtors' financial advisors are Whitby, Santarlasci & Company. Their claims agent is Omni Management Group, LLC. DIP lender Wells Fargo is represented by lawyers at Paul, Hastings, Janofsky & Walker LLP. PLATINUM PROPERTIES: Gets Court OK for Ordinary Course Lot Sales ---------------------------------------------------------------- Judge Basil H. Lorch III of the U.S. Bankruptcy Court for the Southern District of Indiana gave Platinum Properties, LLC and PPV, LLC permission, on a final basis, to sell lots in the ordinary course of business, free and clear of liens. Certain parties, including PNC Bank, National Association, Herman & Kittle Properties, Inc., and the Indiana Bank of Trust Company filed objections to the lot sales. The PNC Objection is overruled, the Court ruled. The IBT Objection is resolved by the agreement of the Debtors and the order of the Court that except for the IBT projects Abney Glen and Mt. Vernon Trails, the Debtors are authorized to sell lots in the ordinary course of business. The Debtors are not to sell property at Abney Glen or Mt. Vernon Trails without the consent of IBT or further Court order. These sales by the Debtors constitute sales in the ordinary course of business: (i) sales of individual lots to builders or homeowners; (ii) sales of lots in bulk to builders; (iii) entries into lot purchase agreements (LPAs) with builders for the take down of individual lots or serial bulk closings over a period of time; and (iv) sales of parcels for the construction of church, multi- family, office, retail, or other non-residential use. The Court finds that the HKP Transaction is an ordinary course of business transaction and that Platinum is authorized to enter into and consummate the HKP Transaction, with the Maple Knoll Project being sold free and clear of liens. As contemplated under the Interim Lot Sale Order, the Debtors and most of the project lenders on the Debtors' real estate development projects have reached agreements regarding appropriate adequate protection of the lenders' security interest. The Stipulations provide that the lot sale proceeds will be distributed per stipulated ratios to the Project Lenders for the payment of certain indebtedness of Debtors to the Project Lenders and to the Debtors to be used as operating capital. A share of the proceeds will also be placed into a segregated account of the Debtors for the payment of professional fees incurred in the Chapter 11 Cases. The terms of the Stipulations are incorporated in the Final Lot Sales Order as if fully set forth. About Platinum Properties and PPV LLC Indianapolis, Indiana-based Platinum Properties, LLC, is a residential real estate developer. Platinum acquires land, designs the projects, obtains zoning and other approvals, and constructs roads, drainage, utilities, and other infrastructure of residential subdivisions. Platinum then sells the finished, platted lots. Platinum also has an ownership interest in several special purpose entities that in turn own, operate and manage individual projects. PPV LLC is a joint venture between Platinum and a non-debtor entity, Pittman Partners, Inc., each of whom hold an equity interest in PPV. PPV owned four projects directly and owns 100% of the membership interest of Sweet Charity Estates, LLC. Platinum Properties and PPV LLC filed for Chapter 11 protection (Bankr. S.D. Ind. Case Nos. 11-05140 and 11-05141) on April 25, 2011. Platinum Properties estimated assets of up to $50 million and liabilities of $100 million to $500 million. Lawyers at Baker & Daniels serve as the Debtors' bankruptcy counsel. PLATINUM PROPERTIES: Wants to Sell 2 Properties to Lender --------------------------------------------------------- Platinum Properties, LLC seeks permission from the U.S. Bankruptcy Court for the Southern District of Indiana to sell two real estates properties known as Abney Glen and Mount Vernon Trails to Indiana Bank and Trust Company, free and clear of liens. The Abney Glen Property is located in Carmel, Indiana. The Mount Vernon Trails Property is located in Fortville, Indiana. Both properties were appraised to have a cumulative as-is value of $4.03 million. The purchaser is the lender of the Properties. The Properties are cross-collaterized and secure the Debtor's total indebtedness to IBT of $6.06 million. IBT wants to purchase the Properties for the total amount of the Indebtedness. Upon the sale closing, IBT agrees to release the balance of the Indebtedness and waive all claims against the Debtor. About Platinum Properties and PPV LLC Indianapolis, Indiana-based Platinum Properties, LLC, is a residential real estate developer. Platinum acquires land, designs the projects, obtains zoning and other approvals, and constructs roads, drainage, utilities, and other infrastructure of residential subdivisions. Platinum then sells the finished, platted lots. Platinum also has an ownership interest in several special purpose entities that in turn own, operate and manage individual projects. PPV LLC is a joint venture between Platinum and a non-debtor entity, Pittman Partners, Inc., each of whom hold an equity interest in PPV. PPV owned four projects directly and owns 100% of the membership interest of Sweet Charity Estates, LLC. Platinum Properties and PPV LLC filed for Chapter 11 protection (Bankr. S.D. Ind. Case Nos. 11-05140 and 11-05141) on April 25, 2011. Platinum Properties estimated assets of up to $50 million and liabilities of $100 million to $500 million. Lawyers at Baker & Daniels serve as the Debtors' bankruptcy counsel. PURSELL HOLDINGS: Court OKs Stipulation on Cash Collateral Use -------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri approved a stipulation entered between Pursell Holdings, LLC, and its secured lender CUNA Mutual Insurance Society, authorizing the Debtor to: -- use the cash collateral; and -- provide adequate protection to CUNA. Pursell Holdings, LLC gave its Promissory Note in the amount of $3,400,000 to the lender on Dec. 12, 2006. As of the Petition Date, the outstanding principal amount of the Promissory Note was approximately $2,833,606. The Promissory Note is secured by Pursell Holdings' Deed of Trust and Security Agreement and Fixture Financing Statement dated Dec. 12, 2006. The Promissory Note is further secured by Pursell Holdings' Assignment of Leases and Rents dated Dec. 12, 2006. The Debtor related that the real estate which is the subject of the Deed of Trust was valued at $5,300,000 on Oct. 30, 2006. The Clay County Appraiser valued the real estate which is the subject of the Deed of Trust at $5,011,500.00 as of Jan 1, 2011. The value of the real estate exceeds the amount due on the Promissory Note. The stipulation provides that the real estate taxes were current as they are escrowed with Lender under the parties' agreements. The three buildings have 14 tenants and three vacancies. The total rents actually generated per month are $49,737. (Of the fourteen tenants, only one tenant with a monthly lease payment of $1,830 has had any difficulty keeping its rent current and no other issues affecting collection of rents is anticipated.) The Debtor is also marketing the remaining three spaces in these three buildings. The monthly payment, including an escrow for taxes and insurance, is $39,500. In the event the payments are not kept current, the lender may assert a claim for default interest at 10.99% per annum, a 5% late fee for all payments not made when due, and its attorneys fees and expenses in this bankruptcy proceeding. It is Pursell Holdings intent to repay its unsecured creditors from the excess rents generated by this and its other properties. The real estate and rents securing this loan are necessary to an effective reorganization. Pursuant to the stipulation, the Debtor agreed to provide for adequate protection of lender's secured claim in the rents and the real property by, among other things, periodic cash payments to lender in the amount of $24,339 per month and real estate tax escrow payments in the amount of $13,856 per month. The Debtor will also make all payments to its insurance carriers necessary to maintain the insurance coverage now in force. About Pursell Holdings Liberty, Missouri-based Pursell Holdings, LLC, filed for Chapter 11 bankruptcy protection (Bankr. W.D. Mo. Case No. 11-40999) on March 10, 2011. Frank Wendt, Esq., Brown & Ruprecht, P.C., serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $12,204,248 in assets and $23,382,741 in debts. Affiliate Damon Pursell Construction Company filed a separate Chapter 11 petition (Bankr. W.D. Mo. Case No. 10-44965) on Sept. 15, 2010. The U.S. Trustee has not yet appointed a creditors committee in the Debtor's case. The U.S. Trustee reserves the right to appoint such a committee should interest develop among the creditors. PURSELL HOLDINGS: Wants Until Sept. 6 to File Chapter 11 Plan ------------------------------------------------------------- Pursell Holdings, LLC, asks the U.S. Bankruptcy Court for the Western District of Missouri to extend its exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Sept. 6, 2011, and Nov. 7, respectively. The Debtor anticipates it will file an initial plan prior to July 8, but it will likely require amendments to address treatment for some secured creditors and to address issues not yet resolved in its claims objections. The Debtor is seeking the extension out of an abundance of caution but remains hopeful it can file a confirmable plan by the initial deadline. The Debtor is represented by: Frank Wendt, Esq. 911 Main Street, Suite 2300 Kansas City, MO 64105-5319 Tel: (816) 292-7000 Fax: (816) 292-7050 E-mail: fwendt@brlawkc.com About Pursell Holdings Liberty, Missouri-based Pursell Holdings, LLC, filed for Chapter 11 bankruptcy protection (Bankr. W.D. Mo. Case No. 11-40999) on March 10, 2011. Frank Wendt, Esq., Brown & Ruprecht, P.C., serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $12,204,248 in assets and $23,382,741 in debts. Affiliate Damon Pursell Construction Company filed a separate Chapter 11 petition (Bankr. W.D. Mo. Case No. 10-44965) on Sept. 15, 2010. The U.S. Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Pursell Holdings LLC have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest develop among the creditors. PURSELL HOLDINGS: Wants to Hire Cassidy Turley as Leasing Agent --------------------------------------------------------------- Pursell Holdings, LLC, asks the U.S. Bankruptcy Court for the Western District of Missouri for permission to employ Whitney Kerr, Jr. and Cassidy Turley, Inc. as leasing agent. The Debtor owns four buildings on the land known as Buckeye Industrial Park, located in Kansas City, Missouri. The four buildings are all zoned M1-p and have these addresses: -- 3901 NE 33rd Terrace; -- 3939 NE 33rd Terrace; -- 3950 NE 33rd Terrace; and -- 4000 NE 33rd Terrace. 3901 is a precast concrete building with office front and drive-in and dock access in the rear, allowing for two-story finish in the front half of the building. 3939 is a precast concrete building, single story office warehouse, with walk-in doors and office in the front and walk-in, drive-in and dock access in the rear. 3950 and 4000 are precast concrete buildings, with drive-in access on one side and dock doors on the opposite side. The Debtor's primary business is leasing commercial space. The Debtor plans to lease any vacant spaces in 3901, 3939, 3950 and 4000 to tenants. Mr. Kerr and Cassidy will secure tenants for any vacant spaces in Buckeye Industrial Park, at 3901, 3939, 3950 and 4000. The Debtor relates that Mr. Kerr and Cassidy are not being employed to sell Buckeye Industrial Park. They are also not being employed for lease renewals. The term of the agreement between the Debtor and Cassidy is from Jan. 1, 2011, until Dec. 31. Cassidy will receive a commission of 6% of the total value of the lease upon execution of a lease. The payments are due upon execution of a lease. The Debtor adds that the commercial leases generally require first and last months rent plus a damage deposit upon execution of the lease. Accordingly, the Debtor will have sufficient funds upon execution of any lease to pay the amounts due to Cassidy. To the best of the Debtor's knowledge, Mr. Kerr and Cassidy are "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. About Pursell Holdings Liberty, Missouri-based Pursell Holdings, LLC, filed for Chapter 11 bankruptcy protection (Bankr. W.D. Mo. Case No. 11-40999) on March 10, 2011. Frank Wendt, Esq., Brown & Ruprecht, P.C., serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $12,204,248 in assets and $23,382,741 in debts. Affiliate Damon Pursell Construction Company filed a separate Chapter 11 petition (Bankr. W.D. Mo. Case No. 10-44965) on Sept. 15, 2010. The U.S. Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Pursell Holdings LLC have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest develop among the creditors. RAILAMERICA INC: S&P Upgrades Corporate Credit Rating to 'BB-' -------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on U.S. based RailAmerica Inc., including the corporate credit rating to 'BB-' from 'B+'. The outlook is stable. "The upgrade reflects RailAmerica's improved cash flow adequacy and asset protection measures resulting from debt reduction and improved operating profitability," said Standard & Poor's ratings analyst Anita Ogbara. "Over the past year, credit metrics have improved due to earnings improvement as well as debt reduction following the company's optional redemption of $74 million in senior secured notes in 2010. Still, we expect the company to remain acquisitive." The ratings on RailAmerica reflect the company's aggressive financial risk profile, capital intensity, and acquisitive growth strategy. The company's position as the largest "short-line" railroad company in the U.S. and its participation in the relatively stable North American freight railroad industry somewhat offset these weaknesses. Fortress Investment Group LLC acquired RailAmerica in February 2007. RailAmerica completed an IPO in October 2009. However, Fortress Investment Group retains controlling interest and owns more than 55% of the outstanding shares. The outlook is stable. Given the rebound in freight volumes and stable pricing, Standard & Poor's expects RailAmerica's earnings, free cash flow, and liquidity to continue strengthening for the next few quarters. "However, because of the company's acquisitive growth strategy, we do not expect further debt reduction in the near term," S&P said. RAISSI REAL ESTATE: Lender Gets Assets; Ch. 11 Case Dismissed ------------------------------------------------------------- The Hon. Stephen L. Johnson of the U.S. Bankruptcy Court for the Northern District of California dismissed the Chapter 11 case of Raissi Real Estate Development, LLC. On March 15, 2011,the Court granted secured creditor First National Mortgage Company relief from the automatic stay, to exercise all of its state law rights and remedies relative to the Debtor's real property at 350 South Winchester Blvd., San Jose, California. Accordingly the Debtor sought dismissal of the Chapter 11 case. The Debtor noted that once the foreclosure is complete, it will own no assets, and there are no assets to administer in the Chapter 11 case. About Raissi Real Estate Development Santa Clara, California-based Raissi Real Estate Development, LLC, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 10-56855) on June 30, 2010. John Walshe Murray, Esq., and Rachel Patience Ragni, Esq., at the Law Offices of Murray and Murray, assists the Debtor in its restructuring effort. The Company estimated its assets and debts at $10 million to $50 million as of the Petition Date. REPUBLIC MORTGAGE: S&P Lowers Financial Strength Rating to 'BB+' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its insurer financial strength ratings on Republic Mortgage Insurance Co. and Republic Mortgage Insurance Co. of North Carolina to 'BB+' from 'BBB-'. The outlook is negative. "The rating downgrade reflects RMIC's diminished business and capital position, currently weak earnings and poor earnings prospects, and economic uncertainty, especially in the housing and mortgage sector," said Standard & Poor's credit analyst Robert E. Green. "While we believe that underwriting selectivity accounts for some of the loss in RMIC's private mortgage insurance market share, we think it also reflects a fundamental reduction in demand. Two large national lenders have ceased doing business with the company over its rescission practices. In the first quarter of 2011, RMIC's market share was 6.7%, down from about 11% in 2008. We expect RMIC's market share to remain below historical levels." The outlook on RMIC, generally consistent with the outlook on the sector as a whole, is negative. "The macroeconomic environment continues to reflect conditions that are preventing a more rapid recovery in the jobs and housing markets. The housing markets remain fragile and we expect home prices to decline through the remainder of 2011. Although new notices of delinquency (NODs) have continued trending downward and the problematic legacy vintages continue to run off, the anemic recovery has caused NODs to remain high," S&P noted. "We expect operating losses to continue through 2012, albeit at lower levels than in recent years. To the extent RMIC experiences adverse deviation on its existing reserves resulting in operating losses significantly above our expectations, we may lower the ratings. Similarly, RMIC, consistent with most of its peers, faces an increased risk of litigation associated with rescission activity. Because of the extent of rescission activity that has taken place during this loss cycle, adverse legal judgments could hurt RMIC's profitability and capitalization," S&P related. Should the economy slide back into a recession or unemployment rise significantly, RMIC's operating losses could stay at currently high levels or worsen, leading to reduced capital or necessitating further capital contributions. "We could lower the rating if the company, over the next 12 months, fails to make substantial progress toward profitability. A loss ratio below 120% would be indicative of such progress. If capital continues to be depleted, our expectation is for further support from the group sufficient to provide for payment of claim obligations and to allow ongoing new business writings at the current low levels. Likewise, should an adverse litigation judgment occur or significant adverse reserve development take place, we would expect further support from the group. Alternatively, we could affirm the rating if we see an improvement in the macroeconomic and mortgage environments that translates into a more solid business position and a return to operating profitability over the next year," S&P stated. ROBB & STUCKY: Lease Decision Period Extended to July 25 -------------------------------------------------------- On June 20, 2011, the U.S. Bankruptcy Court for the Middle District of Florida has extended the time within which Debtor Robb & Stucky Limited LLLP must assume or reject unexpired leases through and including July 25, 2011. The Debtor will conduct a further hearing on July 25, 2011, at 11:00 a.m., to determine whether to extend the time to assume or reject beyond July 25, 2011. The Debtor conducted the auction on March 7, 2011, pursuant to the Bidding Procedures Order. The Debtor selected a joint venture comprised of Hudson Capital Partners, LLC and HYPERAMS, LLC (collectively, the "Agent") as the winning bidder for the rights to conduct the liquidation sales at the Debtor's stores in accordance with the Agency Agreement. On March 10, 2011, the Agent commenced the "going out of business sales" (the "GOB Sales") at the Debtor's stores. The GOB Sales are ongoing and the Agent is presently conducting GOB Sales in approximately 7 retail locations. 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 (Bankr. M.D. Fla. Case No. 11-02801) on Feb. 18, 2011. 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. In its schedules, the Debtor disclosed $77,705,081 in assets and $91,859,125 in liabilities as of the Chapter 11 filing. Donald F. Walton, U.S. Trustee for Region 21, appointed the Official Committee of Unsecured Creditors in the Debtor's case. The Committee tapped Cooley LLP as its lead counsel; Broad and Cassel as its local bankruptcy counsel; and BDO USA LLP as its financial advisor. ROTECH HEALTHCARE: Five Directors Elected at Annual Meeting ----------------------------------------------------------- Rotech Healthcare Inc.'s Annual Meeting of Shareholders was held on June 24, 2011. The shareholders elected five members to the Board of Directors, namely: (1) Arthur J. Reimers, (2) Philip L. Carter, (3) James H. Bloem, (4) Edward L. Kuntz and (5) Arthur Siegel. The ratification of Deloitte & Touche LLP as the Company's independent registered public accounting firm was approved. About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $4.20 million on $496.42 million of net revenue for the year ended Dec. 31, 2010, compared with a net loss of $21.08 million on $479.87 million of net revenue during the prior year. The Company's balance sheet at March 31, 2011, showed $296.20 million in total assets, $66.40 million in total liabilities, all current, and a $285.40 million total stockholders' deficiency. * * * In October 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Rotech Healthcare to 'B-' from 'CCC'. The outlook is positive. In the March 22, 2011, edition of the TCR, Standard & Poor's Ratings Services said that it raised its corporate credit rating to 'B' from 'B-' on Orlando, Fla.-based Rotech Healthcare Inc., following the completion of the company's $290 million second-lien senior secured notes offering. "The ratings on Rotech Healthcare Inc. reflect the company's weak business risk profile, incorporating Rotech's exposure to Medicare reimbursement reductions for its products and services," said Standard & Poor's credit analyst Jesse Juliano. The rating also reflects the company's highly leveraged financial risk profile. As reported by the Troubled Company Reporter on March 10, 2011, Moody's Investors Service upgraded Rotech Healthcare Inc.'s Corporate Family Rating and Probability of Default Rating to B2 from Caa1 in connection with the proposed refinancing of the company's senior subordinated notes due 2012 with a new $290 million of senior secured notes offering due 2018. The B2 Corporate Family Rating reflects Moody's expectation that the company will continue its trend of improving credit metrics through better operating performance and small strategic acquisitions. Moody's expects credit metrics to be relatively weak, albeit in line with the B2 rating with debt-to-EBITDA leverage of approximately 4.9 times at the time of the transaction. However Moody's also expects additional de- leveraging over time through EBITDA expansion and the generation of modest free cash flow. SCI REAL ESTATE: Wants More Exclusivity, Hopes for Consensual Plan ------------------------------------------------------------------ SCI Real Estate Investments, LLC, and Secured California Investments, Inc., ask the U.S. Bankruptcy Court for the Central District of California to extend their exclusive periods to file and solicit acceptances for the proposed plan of reorganization until Oct. 11, 2011, and Dec. 8, respectively. The Debtors need more time to facilitate negotiations, which they believe will lead to prompt confirmation of a consensual plan. Soon after the commencement of these cases, the Debtors initiated discussions with their largest creditors, Wells Fargo and First Citizens Bank, regarding negotiations of a plan. The Debtor scheduled a July 20 hearing for their requested exclusivity extensions. About SCI Real Estate Investments Los Angeles, California-based SCI Real Estate Investments, LLC, filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-15975) on Feb. 11, 2011. Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP, serves as the Debtor's bankruptcy counsel. Haskell & White LLP as accountant. Kennerly, Lamishaw & Rossi LLP as special real estate counsel. The Debtor disclosed $55,431,222 in assets and $69,514,028 in liabilities as of the Chapter 11 filing. SCI REAL ESTATE: Wants Until Sept. 9 to Decide on Leases -------------------------------------------------------- SCI Real Estate Investments, LLC, and Secured California Investments, Inc., ask the U.S. Bankruptcy Court for the Central District of California to extend Sept. 9, 2011, the statutory deadline to assume and assign, or reject a sublease agreement, as amended. On Sept. 11, 2007, Secured California entered with Tenet Healthcare Corporation for the 10th floor of the building located at 11620 Wilshire Boulevard, Los Angeles, California. As provided in the sublease, the sublessor leases the location in accordance with that certain Office Lease dated March 19, 2002, between 11620 Wilshire Boulevard, LLC (landlord). The subleased space serves as the Debtors' administrative offices. The sublease terminates on the earlier of (a) Nov. 30, 2012, or (b) the date the primary lease terminates. The Debtors are negotiating a consensual plan with their creditors and are not presently in a position to determine whether to assume, assume and assign ore reject the sublease at this time. About SCI Real Estate Investments Los Angeles, California-based SCI Real Estate Investments, LLC, filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-15975) on Feb. 11, 2011. Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP, serves as the Debtor's bankruptcy counsel. Haskell & White LLP as accountant. Kennerly, Lamishaw & Rossi LLP as special real estate counsel. The Debtor disclosed $55,431,222 in assets and $69,514,028 in liabilities as of the Chapter 11 filing. Peter C. Anderson, the U.S. Trustee for Region 16, appointed three members to the official committee of unsecured creditors in the Chapter 11 cases of SCI Real Estate Investments. SCI REAL ESTATE: Court OKs Levene Neale as Committee's Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of SCI Real Estate Investments, LLC, and Secured California Investments, Inc., to retain Levene, Neale, Bender, Yoo & Brill L.L.P. as its general bankruptcy counsel. David L. Neale, a partner at LNBYB, told the Court that the firm has not received a retainer for services to be rendered in the case. The hourly rates of the firm's personnel are: Mr. Neale $595 Daniel H. Reiss $550 M. Neale assured the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: David L. Neale, Esq. Daniel H. Reiss, Esq. LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 10250 Constellation Boulevard, Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 E-mail: dln@lnbyb.com dhr@lnbyb.com About SCI Real Estate Investments Los Angeles, California-based SCI Real Estate Investments, LLC, filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-15975) on Feb. 11, 2011. Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP, serves as the Debtor's bankruptcy counsel. Haskell & White LLP as accountant. Kennerly, Lamishaw & Rossi LLP as special real estate counsel. The Debtor disclosed $55,431,222 in assets and $69,514,028 in liabilities as of the Chapter 11 filing. Peter C. Anderson, the U.S. Trustee for Region 16, appointed three members to the official committee of unsecured creditors in the Chapter 11 cases of SCI Real Estate Investments. SHELBRAN INVESTMENTS: Taps Marshall McIntyre as Property Appraiser ------------------------------------------------------------------ Shelbran Investments LP asks the U.S. Bankruptcy Court for the Middle District of Florida for permission to employ Marshall L. McIntyre, M.A.I., as property appraiser, to provide real estate property appraisal services. Mr. McIntyre charges $125 per hour for this engagement. The Debtor assures the Court that Mr. McIntyre is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Shelbran Investments Ocala, Florida-based Shelbran Investments, L. P., filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 10- 10937) on Dec. 21, 2010. The Debtor estimated its assets and debts at $10 million to $50 million. The U.S. Trustee for Region 21 said it won't appoint an Official Committee of Unsecured Creditors of Shelbran Investments because of an insufficient number of creditors willing or able to serve on an the committee. SHILO INN SEASIDE: Status Conference Set for July 21 ---------------------------------------------------- Bankruptcy Judge Vincent P. Zurzolo will hold a Chapter 11 Status Conference in Shilo Inn Seaside Oceanfront LLC's bankruptcy case on July 21, 2011, at 9:30 a.m., at Courtroom 1368, Roybal Federal Building, 255 E. Temple Street in Los Angeles, California. The Debtor is directed to file by July 7, 2011, a report on the status of this reorganization case. The Status Report must be supported by admissible evidence in the form of declarations and supporting documents and must: A. Provide an estimate of when the Debtor plans to file and serve a motion for order approving adequacy of disclosure statement and a motion for order confirming chapter 11 plan; B. State whether deadlines should be set for filing proofs of claim and for hearings on objections to claims, and if so, what these deadlines should be; C. Disclose whether the Debtor has performed all of its duties under 11 U.S.C. Sections 521, 1106 and 1107 and if not, why; D. Describe concisely the post-petition operations of the Debtor, litigation in which the Debtor is involved and the status of the Debtor's efforts to reorganize; E. If the Debtor's proposed counsel is not filing documents electronically via CM/ECF, explain why not; and F. Disclose whether the Debtor has hired any professionals and, if so, whether the professional's employment has been approved by the Court. If the employment has not been approved, then explain why; and provide a budget of estimated fees and expenses to be incurred by the professionals employed at the expense of the estate; The Debtor's failure to comply with any provision of the Court's order may be deemed consent to the conversion or dismissal of the case, or the appointment of a trustee. About Shilo Inn Seaside Oceanfront Based in Portland, Oregon, Shilo Inn, Seaside Oceanfront LLC filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-34669) on June 7, 2011. David B. Golubchik, Esq., at Levene Neale Bender Rankin & Brill LLP, serves as the Debtor's bankruptcy counsel. In its petition, the Debtor estimated assets and debts of $10 million to $50 million. Debtor-affiliates that previously sought Chapter 11 protection are Shilo Inn, Diamond Bar, LLC (Case No. 10-60884) on Nov. 29, 2010; Shilo Inn, Killeen, LLC (Case No. 10-62057) on Dec. 6, 2010; Shilo Inn, Palm Springs, LLC (Case No. 11-26501) on April 13, 2011; and Shilo Inn, Pomona Hilltop, LLC (Case No. 11-26270) on April 14, 2011. SHILO INN SEASIDE: Sec. 341 Creditors' Meeting Set for July 18 -------------------------------------------------------------- The United States Trustee for the Central District of California will convene a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) in the bankruptcy case of Shilo Inn, Seaside Oceanfront LLC, on July 18, 2011, at 1:15 p.m. at RM 2610, 725 S Figueroa St., in Los Angeles. About Shilo Inn Seaside Oceanfront Based in Portland, Oregon, Shilo Inn, Seaside Oceanfront LLC filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-34669) on June 7, 2011. David B. Golubchik, Esq., at Levene Neale Bender Rankin & Brill LLP, serves as the Debtor's bankruptcy counsel. In its petition, the Debtor estimated assets and debts of $10 million to $50 million. Debtor-affiliates that previously sought Chapter 11 protection are Shilo Inn, Diamond Bar, LLC (Case No. 10-60884) on Nov. 29, 2010; Shilo Inn, Killeen, LLC (Case No. 10-62057) on Dec. 6, 2010; Shilo Inn, Palm Springs, LLC (Case No. 11-26501) on April 13, 2011; and Shilo Inn, Pomona Hilltop, LLC (Case No. 11-26270) on April 14, 2011. SHORE HOUSE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Shore House Cafe Inc. dba Shore House Cafe dba Harpoon Harry's 16400 Pacific Coast Hwy Suite 103 Huntington Beach, CA 92649 Bankruptcy Case No.: 11-18892 Chapter 11 Petition Date: June 23, 2011 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Mark S. Wallace Debtor's Counsel: Stephen Madoni, Esq. LAW OFFICE OF STEPHEN A. MADONI 3700 Newport Beach Blvd., Suite 206 Newport Beach, CA 92663 Tel: (949) 723-7600 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/cacb11-18892.pdf The petition was signed by David Bonadonna, chief financial officer/secretary. SIGNATURE STYLES: Creditors Seek Louder Voice in 'Tainted' Sale --------------------------------------------------------------- Dow Jones' DBR Small Cap reports that private equity firm Patriarch Partners is "going through the motions" of running a competitive auction process for its Signature Styles LLC so it can keep control of the women's-apparel retailer, according to disenchanted unsecured creditors seeking a louder voice in the process. The Debtors have signed a deal to sell their assets to Artemiss, LLC, an acquisition entity formed by an affiliate of New York- based Patriarch Partners LLC, in return for the assumption of specified debt, including $30 million owing on the term loan and revolving credit. The buyer will also honor some customer obligations. Entities related to Patriach hold the equity in the Debtors and hold the secured debts. Patriarch will provide up to $7 million in DIP financing -- consisting of a senior revolving credit facility -- for the Chapter 11 case provided that the Debtors pursue an expedited 11 U.S.C. Sec. 363 sale process as contemplated in their stalking- horse agreement. The DIP financing will mature Aug. 15, 2011. The deal is subject to higher and better offers at a bankruptcy court sanctioned auction. The stalking-horse purchase agreement requires approval of bidding procedures by July 7 and approval of a sale by Aug. 4. The Debtors expect to consummate the sale within 60 days from the Petition Date. The Debtors said the sale to Patriarch will result in a continuation of the Debtors' business and preserve more than 100 jobs. About Signature Styles Signature Styles LLC, owner of the Spiegel catalog, filed a Chapter 11 petition (Bankr. D. Del. Case No. 11-11733) on June 6, 2011, along with a deal to sell the business to affiliates of the current owners and lenders. New York-based Signature Styles, which filed for bankruptcy together with its affiliates, disclosed assets of $48.6 million and debt of $867.6 million. It purchased the Spiegel business for $21.7 million at a foreclosure sale in June 2009. Debt includes $37.2 million owing on a secured term loan and revolving credit. Unsecured debt totals $35.3 million, which include $9.8 million owing to trade suppliers and $23.2 million in customer obligations. The lenders and owners are funds affiliated with Patriarch Partners LLC. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, serves as counsel to the Debtor. Western Reserve Partners LLC serves as investment bankers. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. A fund affiliated with Patriarch Partners LLC has an agreement to buy the business in return for the assumption of specified debt, including $30 million owing on the term loan and revolving credit. The buyer also will honor some customer obligations. The stalking-horse purchase agreement requires approval of bidding procedures by July 7 and approval of a sale by Aug. 4. SIGNATURE STYLES: Gets Nod to Employ Epiq as Claims Agent --------------------------------------------------------- Signature Styles LLC and Signature Styles Gift Cards LLC won approval from the U.S. Bankruptcy Court for the District of Delaware to employ Epiq Bankruptcy Solutions, LLC, as their official claims, noticing and balloting agent, nunc pro tunc to the Petition Date. Among other things, Epiq will perform certain noticing functions, assist the Debtors in analyzing and reconciling proofs of claim filed against their bankruptcy estates, and assist the Debtors in balloting in connection with any proposed Chapter 11 plan. Epiq will be paid for its services as set forth in its and the Debtors' Agreement. The Debtors submit that the compensation is reasonable in light of the services to be performed by Epiq as Claims Agent. The Debtors will also pay Epiq for all materials necessary for Epiq's performance under the Agreement and any reasonable out-of-pocket expenses. The Debtors have provided Epiq a $20,000 retainer, which will be applied first to prepetition fees and expenses incurred in connection with these cases and then to subsequent bills for postpetition fees and expenses. Edward J. Kosmowski of Epiq attests that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. * * * Judge Kevin Gross also approved the indemnification provisions of the Agreement, subject to certain clarifications, including that Epiq will not be entitled to indemnification, contribution, or reimbursement for services other than the claims agent services provided under the Agreement, unless those services and the indemnification, contribution, or reimbursement are approved by the Court. If the Debtors' Chapter 11 cases are converted to cases under Chapter 7 of the Bankruptcy Code, Epiq will continue to be paid for its services until the claims filed in the Chapter 11 cases have been completely processed, and that if claims agent representation is necessary in the converted Chapter 7 cases, Epiq will continue to be paid in accordance with Section 156(c) of the Judiciary and Judicial Procedures Code, Judge Gross ruled. He adds that any Chapter 11 or Chapter 7 trustee, who may be appointed in the cases, will not be obligated to employ Epiq. About Signature Styles Signature Styles LLC, owner of the Spiegel catalog, filed a Chapter 11 petition (Bankr. D. Del. Case No. 11-11733) on June 6, 2011, along with a deal to sell the business to affiliates of the current owners and lenders. New York-based Signature Styles, which filed for bankruptcy together with its affiliates, disclosed assets of $48.6 million and debt of $867.6 million. It purchased the Spiegel business for $21.7 million at a foreclosure sale in June 2009. Debt includes $37.2 million owing on a secured term loan and revolving credit. Unsecured debt totals $35.3 million, which include $9.8 million owing to trade suppliers and $23.2 million in customer obligations. The lenders and owners are funds affiliated with Patriarch Partners LLC. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, serves as counsel to the Debtor. Western Reserve Partners LLC serves as investment bankers. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. A fund affiliated with Patriarch Partners LLC has an agreement to buy the business in return for the assumption of specified debt, including $30 million owing on the term loan and revolving credit. The buyer also will honor some customer obligations. The stalking-horse purchase agreement requires approval of bidding procedures by July 7 and approval of a sale by Aug. 4. SIGNATURE STYLES: Taps Western Reserve as Investment Banker ----------------------------------------------------------- Signature Styles LLC and Signature Styles Gift Cards LLC seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Western Reserve Partners LLC as their investment banker with respect to evaluating potential sales of the Debtors' assets and other strategic alternatives, nunc pro tunc to the Petition Date. As investment banker, Western Reserve will identify and analyze potential purchasers, advise and assist the Debtors in evaluating the various structures of any purchase, assist in the evaluation of any offers, advise and assist the Debtors in negotiating the financial aspects of the Transaction, and otherwise assist with the financial advisory and investment banking services that occur within the context of a sale pursuant to Section 363 of the Bankruptcy Code. Because the Debtors are seeking to retain Western Reserve under Section 328(a) of the Bankruptcy Code, the Debtors maintain that Western Reserve's compensation should not be subject to review under Section 330 of the Bankruptcy Code. Western Reserve's fee will consist of: -- "Retainer Fee," will be paid as initial engagement fee for $25,000, and which will be credited toward any Transaction Fee payable to Western Reserve; -- "Monthly Fee," will be paid monthly for $25,000, and which will be credited toward any Transaction Fee payable to Western Reserve; -- "Transaction Fee" for $100,000, which will be paid upon consummation of any Transaction; -- "Incentive Fee," will be paid for an amount equal to 7% of the amount by which the final Transaction Value exceeds the credit bid, as set forth in the asset purchase agreement between the Debtors and buyer; and -- "Expenses" - The Debtors will reimburse Western Reserve for all reasonable expenses it incurred in connection with the performance of its services. The total amount of reimburseable expenses will not exceed $10,000, unless agreed to by the Debtors. NOTE: this info is from its Web site. declaration is not available. Mark A. Filippell, a managing director at Western Reserve, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Signature Styles Signature Styles LLC, owner of the Spiegel catalog, filed a Chapter 11 petition (Bankr. D. Del. Case No. 11-11733) on June 6, 2011, along with a deal to sell the business to affiliates of the current owners and lenders. New York-based Signature Styles, which filed for bankruptcy together with its affiliates, disclosed assets of $48.6 million and debt of $867.6 million. It purchased the Spiegel business for $21.7 million at a foreclosure sale in June 2009. Debt includes $37.2 million owing on a secured term loan and revolving credit. Unsecured debt totals $35.3 million, which include $9.8 million owing to trade suppliers and $23.2 million in customer obligations. The lenders and owners are funds affiliated with Patriarch Partners LLC. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, serves as counsel to the Debtor. Western Reserve Partners LLC serves as investment bankers. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. A fund affiliated with Patriarch Partners LLC has an agreement to buy the business in return for the assumption of specified debt, including $30 million owing on the term loan and revolving credit. The buyer also will honor some customer obligations. The stalking-horse purchase agreement requires approval of bidding procedures by July 7 and approval of a sale by Aug. 4. SOVRAN LLC: Case Summary & 5 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Sovran LLC 4405 7th Ave. SE, Suite 301 Lacey, WA 98503 Bankruptcy Case No.: 11-45107 Chapter 11 Petition Date: June 23, 2011 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Debtor's Counsel: Richard G. Birinyi, Esq. BULLIVANT HOUSER BAILEY PC 1601 5th Ave Suite 2300 Seattle, WA 98101-1618 Tel: (206) 292-8930 E-mail: rick.birinyi@bullivant.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by K. Frank Kirkbride, co-manager. Debtor's List of five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sovran Property Fund Monies Loaned $2,800,000 4405 7th Ave. SE, Suite 301 Lacey, WA 98503 Sovran Development Monies Loaned $1,874,185 Napavine No. 1 LLC 4405 7th Ave. SE, Suite 301 Lacey, WA 98503 Sovran Development Monies Loaned $377,610 Tumwater No. LLC 4405 7th Ave. SE, Suite 301 Lacey, WA 98503 Ruby Hancock Trade debt $35,449 158 Alderwood Road Centralia, WA 98531 Neil Amondson Trade debt $9,255 SPECIALTY TRUST: Odyssey Capital OK'd to Tabulate Plan Ballots -------------------------------------------------------------- The Hon. Gregg W. Zive of the U.S. Bankruptcy Court for the District of Nevada authorized The Official Committee of Equity Holders in the bankruptcy cases of Specialty Trust Inc., to retain Odyssey Capital Group LLC to tabulate ballots on the competing plans of reorganizations for the Debtors. As reported in the Troubled Company Reporter on May 19, 2011, both the Equity Committee and the Debtors' Plans call for the appointment of a ballot tabulator. In its motion, the Equity Committee said the panel and the Debtors are familiar with the professional standing and reputation of Odyssey and agree that employing the firm as ballot tabulator is in the best interest of all parties. The panel said Odyssey will tabulate the more than 600 ballots to be cast on the Plans. The Committee and the Debtors have agreed to pay the firm a flat rate of $5,000 for its services. Grant Lyon, the Debtors' chief restructuring officer, is the president of Odyssey. However, both the Committee and the Debtors agree that neither Odyssey nor Mr. Lyon represent any interest adverse to the Committee, the Debtors or their estates. As reported by the TCR, a confirmation showdown will be held June 3, 2011, at 2:00 p.m. on the First Amended Chapter 11 Plan of Reorganization proposed by Specialty Trust Inc. and its debtor affiliates, and the rival Chapter 11 Plan of Reorganization proposed by the Equity Committee. Judge Gregg W. Zive granted conditional approval of a Joint Disclosure Statement explaining both plans on April 28. Voting deadline is May 23. Objections to the adequacy of the Joint Disclosure Statement or to either plan, including the Debtors' objections to the Equity Committee's Plan and vice versa, if any, are also due May 23. The Court's approval of the Disclosure Statement is subject to final approval at the confirmation hearing. Summaries of the Debtors' and Equity Committee's Plans were reported in the April 8 and April 21 editions of the Troubled Company Reporter. Creditors and other entities entitled to vote may vote to accept or reject both Plans. If one votes to accept both Plans, it may indicate whether it prefers the Debtors' or the Equity Committee's Plan. About Specialty Trust Specialty Trust Inc. is a privately held Maryland corporation that acquires and holds, in a tax-advantaged real estate investment trust structure, mortgage loans and mezzanine loans secured by real property located primarily in Nevada, Arizona and California, and interests in entities owning real estate that was acquired through foreclosure of mortgage loans made by ST and mezzanine loans. Reno, Nevada-based Specialty Trust filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-51432) on April 20, 2010. Affiliates Specialty Acquisition Corp. (Bankr. D. Nev. Case No. 10-51437) and SAC II (Bankr. D. Nev. Case No. 10-51440) filed separate Chapter 11 petitions. Sallie B. Armstrong, Esq., and Michelle N. Kazmar, Esq., at Downey Brand LLP, in Reno, Nevada; and Ira D. Kharasch, Esq., Scotta E. McFarland, Esq., and Victoria A. Newmark, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, Calif., serve as the Debtor's bankruptcy counsel. On May 24, 2010, a committee of equity holders was appointed. On Sept. 2, 2010, the Court appointed Grant Lyon as chief restructuring officer of the Debtors. In its schedules, Specialty Trust disclosed assets of $201,452,048 and liabilities of $109,022,194 as of the petition date. In its amended schedules, Specialty Acquisition disclosed assets of $3,886,113 and liabilities of $49,068,173 as of the petition date. In its amended schedules, SAC II disclosed assets of $40,955,000 an liabilities of $39,445,118 as of the petition date. SWADENER INVESTMENT: Wants Time for Plan; Talks Not Yet Complete ---------------------------------------------------------------- Swadener Investment Properties, LLC, asks the U.S. Bankruptcy Court for the Northern District of Oklahoma for an extension of 30 days or until July 20, 2011, of its exclusive period to file a disclosure statement and plan of reorganization. The Debtor says it has not completed its negotiations with its secured creditors with hopes that consensual plan terms can be agreed upon. About Swadener Investment Tulsa, Oklahoma-based Swadener Investment Properties, LLC, filed for Chapter 11 bankruptcy protection (Bank. N.D. Okla. Case No. 11-10322) on Feb. 18, 2011. 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. SYMPHONYIRI GROUP: S&P Assigns 'B+' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Chicago, Ill.-based SymphonyIRI Group Inc. The rating outlook is stable. "At the same time, we assigned SymphonyIRI's $450 million secured first-lien credit facilities our issue rating of 'B+' (at the same level as the 'B+' corporate credit rating) with a recovery rating of '3', indicating our expectation of meaningful (50%-70%) recovery for debtholders in the event of a payment default. The facilities consist of a $50 million revolving credit facility due 2016 and a $400 million term loan B due 2017," S&P said. "The 'B+' corporate credit rating incorporates our assumptions of modest revenue growth and fairly stable credit measures over the intermediate term," said Standard & Poor's credit analyst Andy Liu. SymphonyIRI's market measurement segment is mature and accounts for a majority of the company's revenues. Future revenue and EBITDA growth will mainly be driven by the faster growing but smaller solutions and services segment. Assuming SymphonyIRI won't be overly aggressive in pursing expiring client contracts at Nielsen Co. B.V. (its major competitor), key credit measures should gradually improve over time. The rating outlook on SymphonyIRI is stable. "Over the medium term, we expect modest revenue and EBITDA growth. We also expect the company to generate positive discretionary cash flow over the same horizon. This should enable to SymphonyIRI to gradually decrease its debt leverage. If the company is unable to generate positive discretionary cash flow or maintain a sufficient margin of compliance with covenants, likely caused by client losses or unproductive investments in pursuit of new clients, we could lower the rating. On the other hand, if SymphonyIRI is able to gain market share against peers and meaningfully expands its EBITDA margin while keeping leverage at or below current levels, we could raise the rating," S&P related. TASANN TING: Ordered to Pay $10,000 More to Lender -------------------------------------------------- Judge Arthur S. Weissbrodt of the U.S. Bankruptcy Court for the Northern District of California has ordered Tasann Ting Group, Inc. another $10,000 per month beginning on June 1, 2011, and continuing on the first of every month thereafter, with a back payment of $10,000 to be paid for the month of May 2011, to Cathay Bank. The payments will be made in certified funds and Cathay Bank may apply the funds to the Debtor's obligation without prejudice to any of the Bank's rights or remedies. The payments are in addition to the $60,000 the Debtor is currently paying to Cathay Bank. As reported in the June 14, 2011 edition of the Troubled Company Reporter, the Bankruptcy Court denied Cathay Bank's request to terminate the automatic stay of the Debtor's property. The Court also ordered the Debtor at that time to pay Cathay Bank $60,000 per month beginning on May 1, 2011, and continuing on the first of every month thereafter. The Debtor must also pay $23,080 per month for property taxes. Cathay Bank previously stated that the Debtor owed it $17 million, secured by the real property known as 39889 Eureka Drive, in Newark, California and all concomitant buildings, fixtures, improvements, easements and personal property consisting of all equipment, fixtures and other articles of personal property. Under the Court's recent ruling, the Debtor is also authorized to use cash collateral solely to maintain the Eureka Drive Property and any related improvement, by paying (i) $800 per month in development association dues; (ii) $500 per month for liability insurance coverage; (iii) $800 per month for landscaping and building repairs; and (iv) $2,800 per month in utilities and water usage. The Court entered its ruling upon Cathay Bank's motion to restrict the use of cash collateral and segregate cash collateral. A further hearing on the Motion will be held on July 25, 2011. The Debtor is also ordered to provide Cathay Bank an accounting of the security deposit it received from Goten Corporation and an accounting of the operating expense payment it has been receiving from Goten. If the Debtor fails to make the payments or provide the information requested, it will have a 15-day grace period to make the payments or provide the information requested. About Tasann Ting Group, Inc. Sunnyvale, California-based Tasann Ting Group, Inc. A Calif. Corp filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 10-63154) on Dec. 28, 2010. Ted Z. Wolny, Esq., at Miller Wolny Legal Group, serves as the Debtor's bankruptcy counsel. According to its scheduled, the Debtor disclosed $19,440,960 in total assets and $21,052,736 in total debts as of the Petition Date. TERRESTAR NETWORKS: February Debtors OK'd to Employ Deloitte Tax ---------------------------------------------------------------- The Hon. Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York authorized the TerreStar Networks affiliates designated as the "February Debtors" to employ Deloitte Tax LLP as their tax services provider. To the best of the February Debtors' knowledge, Deloitte Tax is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About 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 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's case is 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 sought 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 -- 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 million to $500million 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. TERRESTAR NETWORKS: CIBC World Approved as Financial Advisors ------------------------------------------------------------- The Hon. Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York authorized, on a final basis, TerreStar Network Holdings (Canada) Inc. and TerreStar Networks (Canada) Inc., to employ CIBC World Markets Inc., as financial advisor. CIBC is expected to, among other things: a. assist in reviewing and analyzing the business plan and financial projections prepared by the TerreStar Canada Debtors; b. provide strategic advice with regard to restructuring, reorganizing, or repaying the TerreStar Canada Debtors' debt or credit obligations; c. to the extent directed by the TerreStar Canada Debtors, prepare written work product to be utilized by the TerreStar Canada Debtors in the Chapter 11 cases. The Debtors will pay CIBC its monthly advisory fee equal to $125,000, with guaranteed payment (subject to the limitations contained in the Engagement Letter) for not less than four and not more than six months of work. To the best of the Debtors' knowledge, CIBC is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About TerreStar Corporation 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 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's case is 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 sought 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 -- 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 million to $500million 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. TOLL BROTHERS: S&P Lowers Corporate Credit Rating to 'BB+' ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Pennsylvania-based Toll Brothers Inc. and its subsidiary, Toll Brothers Finance Corp., to 'BB+' from 'BBB-'. "We also lowered our ratings on roughly $1.5 billon of senior unsecured notes to 'BB+' from 'BBB-'. We assigned our '3' recovery rating to the notes, indicating our expectation for meaningful (50%-70%) recovery," S&P said. "We lowered our rating on Toll Brothers because we are now of the opinion that the U.S. housing market recovery will be weaker than we previously anticipated," said Standard & Poor's credit analyst James Fielding. "Toll Brothers maintains a satisfactory business profile and, in our view, is better positioned relative to most homebuilding peers to eventually achieve sustained profitability, despite the difficult operating environment." "We continue to expect moderate top-line growth as the company opens new communities and expands its market share in the luxury housing segment. However, we believe it will take longer than we previously thought for Toll's key credit measures to fully recover to their stronger, predownturn levels. As a result, we have revised our assessment of Toll's financial risk profile to significant from intermediate," S&P related. "Our stable outlook acknowledges the company's strong liquidity profile, which we expect will enable Toll Brothers to weather another year or two of weak sales while investing in new communities to develop its top line and eventually support better earnings. We would lower our rating if investment in raw land or distressed real estate portfolios is significantly more aggressive than we currently anticipate and liquidity is no longer sufficient to fund three years of anticipated needs (estimated at roughly $1 billion). While an upgrade is unlikely over the next 12 months because of our expectation for more muted recovery prospects, we would upgrade Toll Brothers if the market recovers and key credit measures were maintained at levels consistent with an intermediate financial risk (i.e., debt-to-EBITDA in the 2x to 3x range)," S&P related. TOLL ROAD: Moody's Downgrades Underlying Rating to 'Ba1' -------------------------------------------------------- Moody's Investors Service has downgraded to Ba1 from Baa3 the underlying rating on the Toll Road Investors Partnership II LP's Dulles Greenway Project Revenue Bonds. The rating outlook is negative. The downgrade is based on continued traffic declines, continued financial metric deterioration, weaker competitive position due to increasingly expensive tolls, and Moody's expectation that the company will be unable to meet future minimum and total debt service requirements through toll increases alone. These negatives are countered by strong liquidity, a growing service area and high resident income levels that should support some traffic growth and toll increases over time. TRIP II's bonds are rated Baa1 based upon the financial strength of the insurer, National Public Finance Guarantee (NPFG, rated Baa1, formerly MBIA). The negative outlook reflects the expected continuing trend of traffic decline over the near term given an uncertain economic recovery and rising gas prices. A secondary consideration is the on-going litigation and claim for damages by the former operator, Autostrade International of Virginia (AIV), whose contract was terminated on May 5, 2010. Traffic has continuously declined since 2005 by an annual average rate (AAR) of 4.9% and it is down an additional 2% through April 2011 compared to the same period in 2010. While traffic has declined, overall revenues have continued to increase thanks to several toll increases. However, the pace of this revenue growth has slowed significantly since 2007 and has not kept up with increases in debt service, resulting in year-over-year weakening of the minimum required debt service coverage ratio (DSCR). In contrast, from 1999 to 2005, traffic grew at an AAR of 12.4%. Scheduled debt service coverage declined to a relatively narrow 1.17 times in 2008, and then rose to 1.36 times in 2010 due to toll rate increases in Jan. 1, 2009 and July 1, 2010. Another toll rate increase is schedule for Jan. 1, 2012. While mandatory debt service coverage remained stronger at 1.72 times in 2010, mandatory coverage also has declined significantly from 2.65 times in 2006. Though failure to make the early redemptions does not constitute an event of default, to the extent they are not made the debt will continue to accrete interest, making future debt service requirements that much more onerous. Moody's notes that mandatory and scheduled debt service are heavily back-loaded, increasing to approximately $81 million by 2034 from $44 million in 2011. Failure to keep up with early redemptions for four consecutive years triggers an insurance event of default, but this carries no consequences until 2036, when the bond insurer has the right to accelerate the debt. The impact of recent traffic declines is mitigated somewhat by the significant flexibility built into TRIP II's debt structure. Debt service in 2010 totaled $34.8 million, of which amount $27.6 million was mandatory. The remainder constituted scheduled early redemptions, which TRIP II is only required to make to the extent sufficient excess cash flow is available. These early redemptions are, however, included in the calculation of the minimum debt service coverage ratio (DSCR), which must be met in order to allow excess cash to be transferred to the company. As a result of its deteriorating financial performance, the project failed to meet its restricted payments test in 2008 and all excess cash flow has been subject to lock up since then. While coverage in 2009 and 2010 passed the test, excess cash is not released until the project complies with the test for at least three consecutive years. As of Dec. 31, 2010 the company had $15.3 million in the Early Redemption Fund; $75.2 million in the Early Redemption Reserve and well as $39.7 million in a cash- funded Debt Service Reserve Fund (DSRF) and a $45 million DSRF surety with NFFG. Though the project has received regulatory approval for a series of additional toll increases through 2020, Moody's believes that the ability to continue to grow revenues through toll increases may be diminishing due to increasing elasticity of demand. The road is currently one of the most expensive in the US, with an average rate per transaction of $3.73 in 2010 compared to the adjacent Dulles Toll Road's average rate of $0.85. In 2006, the average toll increased 29% and revenues increased 22%. Despite an average toll increase of 21% in 2009, revenues only increased by 13% due to a 6.5% decline in traffic. . In 2010 the average toll increase of 6% yielded only a 2% revenue increase. As a result, the project may be challenged to meet its growing debt service requirements if traffic growth does not resume natural growth shortly. TRIP II's rating could face downward pressure if traffic declines continue over the next couple of years. . Since the 6% toll increase in 2010 contributed to a 4% drop in traffic, Moody's expects the scheduled toll rate increase in 2012 to result in a 3.5% traffic decline. Moody's assumptions result in a 0.98 times scheduled DSCR in 2012 (1.55 times mandatory). While the rating is unlikely to be upgraded in the near-to-medium term, the outlook could be revised to stable if growth in traffic resumes within the next 18 to 24 months and remains sustainable over the longer term. The last underlying rating action was on Sept. 9, 2009 when the Baa3 affirmed for TRIP II's Series 2005 and 1999 Bonds and the rating outlook was revised to negative. The principal methodology used in rating this issuer was "Operational Toll Roads" published in December 2006. TRIP II is a special purpose company that owns a concession to operate the Dulles Greenway, a 14-mile long toll road extending westward through Loudoun County, VA (rated Aaa) from Dulles Airport to the Town of Leesburg (rated Aa1). TRIP II was acquired by Macquarie Infrastructure Group in September of 2005. ULTERRA HOLDINGS: S&P Raises Senior Secured Debt Rating to 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services raised its senior secured debt ratings on Fort Worth, Texas-based Ulterra Holdings Inc. to 'B' (one notch higher than the corporate credit rating) from 'B-'. "We also revised the recovery rating on these issues to '2', indicating our expectation of substantial (70% to 90%) recovery in the event of a payment default, from '3'," S&P said. The rating actions reflect the decrease in secured debt and the resulting higher recovery prospects for senior secured lenders following the polycrystalline diamond compact (PDC) drill-bit manufacturer's decision to downsize its senior secured credit facility to $92.5 million from the initially contemplated $105 million. The facility, which matures in 2016, consists of an $82.5 million term loan and a $10 million revolving credit facility. Ulterra has used the proceeds to pay down existing debt. The ratings reflect Ulterra's very small size and scale in drill bit manufacturing, its competitive position against some of the largest oilfield services companies in the industry, a leveraged capital structure, and cyclical end markets. The ratings also reflect Ulterra's adequate liquidity profile, variable cost structure, and its specialization on polycrystalline diamond compact (PDC) drill bits, which benefit from the increasing trend toward more complex horizontal wells (deeper depths and longer laterals). Ratings List Ulterra Holdings Inc. Corporate credit rating B-/Stable/-- Rating Raised; Recovery Rating Revised To From Ulterra Drilling Technologies L.P. Senior secured ratings B B- Recovery rating 2 3 UNITED RENTALS: S&P Affirms 'B' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Greenwich, Conn.-based United Rentals Inc. to positive from stable. "At the same time, Standard & Poor's affirmed its ratings on United Rentals, including the 'B' corporate credit rating," S&P said. "The outlook revision reflects the potential for an upgrade if URI continues to perform better than our expectations for the 'B' rating," said Standard & Poor's credit analyst Sarah Wyeth. "We believe URI will likely continue to benefit from improving fundamentals in the equipment rental industry and generate positive free cash flow in 2011 despite elevated capital expenditures. This could result in leverage of about 4x within the next 18 months." The ratings reflect URI's aggressive financial profile with high debt levels. The company's fair business risk profile primarily reflects its leading position in the cyclical, highly competitive, and fragmented equipment rental industry. URI is the biggest player in the market, with a large and diverse rental fleet. The company has good geographic and customer diversification. It also benefits from good economies of scale for purchasing rental equipment and has more flexibility to transfer equipment among branches. As an equipment rental company that primarily serves the U.S. market, URI's performance is closely tied to the construction spending cycle. "Nonresidential construction spending has deteriorated meaningfully since late 2008, and we expect it to continue to remain flat in 2011. Conditions in the equipment rental industry have improved recently, partly due to contractors' preference for renting versus buying equipment when projects are relatively scarce or uncertain. The outlook is positive. We could raise the ratings if the company appears likely to maintain its improved credit measures and if it adheres to a financial policy that could support a higher rating. We could raise the ratings if the company sustains total debt to EBITDA of 4x-5x and it does not purchase equipment to an extent that would result in meaningfully negative free cash flow. We could revise the outlook to stable if a reversal in the economic recovery erodes operating performance more than we expect, or if URI pursues equipment expenditures that are likely to result in more than $50 million negative free cash flow," S&P said. URBAN WEST: Wants Exclusive Plan Filing Period Extended to Nov. 4 ----------------------------------------------------------------- Urban West Rincon Developers II, LLC, and Rincon Developers Phase II, LLC, seeks an extension of the exclusive period for them (i) to file a plan of reorganization through Nov. 4, 2011, and (ii) to obtain acceptances for that plan through Jan. 4, 2012. The Debtors say their cases are not large in terms of numbers of creditors, but a large amount of money is at stake in terms of secured debt totaling $38 million. The cases, according to the Debtors, are also complex in that various partnership interests raise questions unanswered by clear case law. The Debtors add that they need more time to develop and present information necessary to present a confirmable plan. Moreover, the Debtors assert that their request is warranted as they have made good faith progress towards reorganization, and are paying their debts as those debts come due. San Francisco, California-based Urban West Rincon Developers II, LLC, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 11-30924) on March 9, 2011. Heinz Binder, Esq., and Roya Shakoori, Esq., at the Law Offices of Binder and Malter, serves as the Debtor's bankruptcy counsel. US AIRWAYS: CEO's Compensation Rose to $2.8 Million Last Year ------------------------------------------------------------- U.S. Airways Group Inc. Chief Executive Doug Parker's compensation rose 7% to $2.8 million last year based on a calculation by The Associated Press from the company's proxy statement, the news agency reported. Mr. Parker's salary was unchanged at $550,000. He got nothing under a long-term incentive plan because the company's shares did not perform better than the shares of other airlines from 2008 through 2010, AP reported. Meanwhile, options awards valued at $1.1 million were down from 2009, but incentive pay of $987,800 was more than double the $429,000 Mr. Parker got for 2009, according to the report. US Airways is the fifth-biggest U.S. airline, and Mr. Parker's pay is less than the CEOs of the other big U.S. carriers, notes the report. "While my compensation remains below those of other airline CEOs, it is still a significant expense for our company and with this level of compensation comes significant responsibility," Mr. Parker wrote in a letter to employees. "I take that responsibility very seriously and will continue to do so as we continue to run a great operation, take care of our customers and ensure US Airways is successful for many years to come," he said. The AP compensation formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation, which Mr. Parker did not receive, and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits, which makes the AP total slightly different in most cases from the total reported by companies to the U.S. Securities and Exchange Commission. About US Airways US Airways -- http://www.usairways.com/-- along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition (Bankr. E.D. Va. Case No. 04-13820) on Sept. 12, 2004. Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). As of Sept. 30, 2010, US Airways had $8.006 billion in total assets, $3.049 billion in current liabilities, $4.883 billion in non-current liabilities, and $74 million in stockholders' equity. * * * US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp. family rating and probability of default rating. Outlook is negative. US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer Credit rating and LT Local Issuer credit rating. Outlook is also negative. US Airways Group carries Fitch's "CCC" LT Issuer default rating and "C" Senior unsecured debt rating. Outlook is also negative US AIRWAYS: Investors Approve Six Proposals at Annual Meeting ------------------------------------------------------------- In an 8-K filing dated June 9, 2011, with the U.S. Securities and Exchange Commission, US Airways Group Inc. disclosed that its investors voted on six proposals at the 2011 Annual Meeting of Stockholders on June 9, 2011. US Airways disclosed that the stockholders elected at the meeting Douglas Parker and Bruce Lakefield to the company's Board of Directors, and ratified the appointment of KPMG LLP as the company's independent public accounting firm for the fiscal year ending Dec. 31, 2011. The stockholders also approved US Airways' 2011 Incentive Award Plan and the compensation of certain executive officers of the company. Meanwhile, they turned down the proposal relating to cumulative voting. The stockholders recommended, on a non-binding advisory basis, that a stockholder advisory vote on the compensation paid to some of US Airways' executive officers should occur every year. A copy of the SEC filing can be accessed without charge at http://ResearchArchives.com/t/s?7646 About US Airways US Airways --http://www.usairways.com/-- along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition (Bankr. E.D. Va. Case No. 04-13820) on Sept. 12, 2004. Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). As of Sept. 30, 2010, US Airways had $8.006 billion in total assets, $3.049 billion in current liabilities, $4.883 billion in non-current liabilities, and $74 million in stockholders' equity. * * * US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp. family rating and probability of default rating. Outlook is negative. US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer Credit rating and LT Local Issuer credit rating. Outlook is also negative. US Airways Group carries Fitch's "CCC" LT Issuer default rating and "C" Senior unsecured debt rating. Outlook is also negative US AIRWAYS: S&P Rates Class C Pass-Through Certificates at 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B (sf)' rating to US Airways Inc.'s $83.193 million series 2011-1 Class C pass- through certificates, with an expected maturity of Oct. 22, 2014. The issue is a drawdown under a Rule 415 shelf registration. "The 'B (sf)' rating is based on US Airways' credit quality, substantial collateral coverage by good quality aircraft, and on legal and structural protections available to the pass-through certificates," said Standard & Poor's credit analyst Betsy Snyder. The company will use the proceeds of the offering and the 2011-1 Class A and Class B series to refinance two A321-200, two A330- 200, and one A320-200 aircraft that were delivered in 2009-2010, and four A321-200 aircraft to be delivered in September-October 2011. "Each aircraft's secured notes are cross-collateralized and cross-defaulted, a provision that we believe increases the likelihood that US Airways would affirm the notes (and thus continue to pay on the certificates) in bankruptcy," S&P said. The pass-through certificates benefit from legal protections afforded under Section 1110 of the federal bankruptcy code. "However, because the Class C certificates do not have a dedicated liquidity facility (as do the Class A and Class B certificates), we do not analyze them as enhanced equipment trust certificates (EETCs)," S&P noted. The rating applies to a unit consisting of certificates representing the trust property and escrow receipts, initially representing interests in deposits (the proceeds of the offerings). The escrow deposits are held by a depositary bank, The Bank of New York Mellon (AA-/Stable/A-1+), pending paying off existing debt on the planes (which should be accomplished by October 2011). Amounts deposited under the escrow agreements are not property of US Airways and are not entitled to the benefits of Section 1110 of the U.S. Bankruptcy Code, and any default arising under an indenture solely by reason of the cross-default in such indenture may not be of a type required to be cured under Section 1110. Any cash collateral held as a result of the cross- collateralization of the equipment notes also would not be entitled to the benefits of Section 1110. Neither the certificates nor the escrow receipts may be separately assigned or transferred. "We believe that US Airways views these planes as important and would, given the cross-collateralization and cross-default provisions, likely affirm the aircraft notes in a bankruptcy scenario. In contrast to most EETCs issued before 2009, the cross- default would take effect immediately in a bankruptcy if US Airways rejected any of the aircraft notes. This should prevent US Airways from selectively affirming some aircraft notes and rejecting others (cherry-picking), which often harms the interests of certificateholders in a bankruptcy," S&P noted. "We consider the collateral pool overall to be of good quality. The largest proportion of appraised value, about 57%, consists of A321-200's. The A321-200 is the largest version of Airbus' popular A320 narrowbody family of planes. The A321-200 has not been as successful as the A320 or smaller A319, but nonetheless is operated by 68 airlines worldwide, many more than Boeing's competing B737-900ER (although the latter is a newer model and thus has had less time to attract orders). Airbus has announced that it will offer a more fuel-efficient new-engine-option (NEO) on its narrowbody planes starting in 2016. It is too early to tell how popular this option will be, and we believe a lot will depend on how much more expensive the NEO is. If widely adopted, sale of NEO planes could depress somewhat residual values of existing- technology Airbus narrowbody planes. However, this effect is most likely for older planes in the A320 family (e.g. those delivered in the 1990's), rather than the recently delivered A321-200s and A320s in the 2011-1 collateral pool," according to S&P. The second-largest proportion of aircraft securing the certificates is A330-200s, a small, long-range widebody plane. This model, which incorporates newer technology than Boeing's competing B767-300ER, has been successful, and is operated by 67 airlines worldwide. It will face more serious competition when large numbers of Boeing's long-delayed B787 are delivered. Still, it will take a while for this to occur, even if Boeing is able to make its first delivery later in 2011. The final, and smallest, proportion of value, about 8%, is represented by A320-200s. This model is Airbus' most successful plane, with a very wide user base around the world. Airbus will offer a new engine option on this plane in the middle of this decade. The initial loan-to-value of the Class C certificates is 85.6%, using the appraised base values and depreciation assumptions in the offering memorandum. "However, we focused on more conservative maintenance-adjusted appraised values (not disclosed in the offering memorandum). We also use more conservative depreciation assumptions for all of the planes than those in the prospectus. We assumed that, absent cyclical fluctuations, values of the A321- 200s and A330-200s would decline by 6.5% of the preceding year's value per year, and the A320-200s 6%. Using those assumptions, our initial loan-to-value is 89.7%, higher than those of most other recently-rated aircraft-backed debt. Our 'B (sf)' rating on the Class C certificates is lower than our 'BBB (sf)' rating on the Class A certificates and 'B+ (sf)' rating on the Class B certificates because of a higher loan-to-value, the fact that the Class C certificates are subordinated to the more senior certificates, and because the Class C certificates do not have a dedicated liquidity facility (which would, if needed, pay interest on certificates if a bankrupt US Airways was making insufficient payments to cover interest). Still, the Class C certificates benefit from the fact that the aircraft notes that secure all the certificates are cross-defaulted and cross-collateralized, which, we believe, increases the likelihood that US Airways would affirm the aircraft notes in bankruptcy," S&P related. "Our ratings on US Airways reflect our view of the consolidated credit quality of parent US Airways Group Inc. We base the ratings on US Airways Group's substantial debt and lease burden, limited (though improving) liquidity, and participation in the high-risk U.S. airline industry. The ratings also incorporate the company's better-than-average operating costs. Tempe, Ariz.-based US Airways Group is the fifth-largest U.S. airline, carrying about 8% of industry traffic. We characterize the company's business profile as vulnerable and its financial profile as highly leveraged," S&P continued. "We expect US Airways' financial profile to remain fairly stable over the next two years, with EBITDA interest coverage 1.6x-2.0x and funds from operations (FFO)/debt in the low-teen percent area. We believe that an upgrade is not likely over the near-term, but could occur if FFO/debt moves consistently into the high-teens percent area and unrestricted cash and short-term investments increase to more than $2.5 billion. With US Airways' improved operating performance and liquidity, we also believe a downgrade is unlikely over the near term. However, if a stalled U.S. economic recovery or serious oil price spike caused sustained losses, causing liquidity to fall to below $1 billion, we could lower ratings," S&P added. Ratings List US Airways Inc. US Airways Group Inc. Corporate credit rating B-/Stable/-- New Ratings Assigned US Airways Inc. Series 2011-1 Class C pass-through certificates B (sf) US AIRWAYS: S&P Rates $94.283MM Class B Certificates at 'B+' ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BBB (sf)' rating to US Airways Inc.'s $293.944 million series 2011-1 Class A pass- through certificates, with an expected maturity of Oct. 22, 2023. At the same time it assigned its 'B+ (sf)' rating to the $94.283 million Class B pass-through certificates, with an expected maturity of Oct. 22, 2018. The final legal maturities will be 18 months after the expected maturity. The issues are drawdowns under a Rule 415 shelf registration. "The 'BBB (sf)' and 'B+ (sf)' ratings are based on US Airways' credit quality, substantial collateral coverage by good quality aircraft, and on legal and structural protections available to the pass-through certificates," said Standard & Poor's credit analyst Betsy Snyder. "The company will use the proceeds of the offering to refinance two A321-200, two A330-200, and one A320-200 aircraft that were delivered in 2009-2010, and four A321-200 aircraft to be delivered in September-October 2011. Each aircraft's secured notes are cross-collateralized and cross-defaulted, a provision that we believe increases the likelihood that US Airways would affirm the notes (and thus continue to pay on the certificates) in bankruptcy." The pass-through certificates are a form of enhanced equipment trust certificates (EETC), and benefit from legal protections afforded under Section 1110 of the federal bankruptcy code and by a liquidity facility provided by Natixis S.A. (A+/Stable/A-1). The liquidity facility is intended to cover up to three semiannual interest payments, a period during which collateral could be repossessed and remarketed by certificateholders following any default by the airline, or to maintain continuity of interest payments as certificateholders negotiate with US Airways in a bankruptcy with regard to certificates. The ratings apply to a unit consisting of certificates representing the trust property and escrow receipts, initially representing interests in deposits (the proceeds of the offerings). The escrow deposits are held by a depositary bank, The Bank of New York Mellon (AA-/Stable/A-1+), pending paying off existing debt on the planes (which should be accomplished by October 2011). Amounts deposited under the escrow agreements are not property of US Airways and are not entitled to the benefits of Section 1110 of the U.S. Bankruptcy Code, and any default arising under an indenture solely by reason of the cross-default in such indenture may not be of a type required to be cured under Section 1110. Any cash collateral held as a result of the cross- collateralization of the equipment notes also would not be entitled to the benefits of Section 1110. Neither the certificates nor the escrow receipts may be separately assigned or transferred. "We believe that US Airways views these planes as important and would, given the cross-collateralization and cross-default provisions, likely affirm the aircraft notes in a bankruptcy scenario. In contrast to most EETCs issued before 2009, the cross- default would take effect immediately in a bankruptcy if US Airways rejected any of the aircraft notes. This should prevent US Airways from selectively affirming some aircraft notes and rejecting others (cherry-picking), which often harms the interests of certificateholders in a bankruptcy," S&P stated. "We consider the collateral pool overall to be of good quality. The largest proportion of appraised value, about 57%, consists of A321-200s. The A321-200 is the largest version of Airbus' popular A320 narrowbody family of planes. The A321-200 has not been as successful as the A320 or smaller A319, but nonetheless is operated by 68 airlines worldwide, many more than Boeing's competing B737-900ER (although the latter is a newer model and thus has had less time to attract orders). Airbus has announced that it will offer a more fuel-efficient new-engine-option (NEO) on its narrowbody planes starting in 2016. It is too early to tell how popular this option will be, and we believe a lot will depend on how much more expensive the NEO is. If widely adopted, sale of NEO planes could depress somewhat residual values of existing- technology Airbus narrowbody planes. However, this effect is most likely for older planes in the A320 family (e.g. those delivered in the 1990s), rather than the recently delivered A321-200's and A320's in the 2011-1 collateral pool," S&P continued. The second-largest proportion of aircraft securing the certificates is A330-200s, a small, long-range widebody plane. This model, which incorporates newer technology than Boeing's competing B767-300ER, has been successful, and is operated by 67 airlines worldwide. It will face more serious competition when large numbers of Boeing's long-delayed B787 are delivered. Still, it will take a while for this to occur, even if Boeing is able to make its first delivery later in 2011. The final, and smallest, proportion of value, about 8%, is represented by A320-200's. This model is Airbus' most successful plane, with a very wide user base around the world. Airbus will offer a new engine option on this plane in the middle of this decade. The initial loan-to-value of the Class A certificates is 53.4% and of the Class B certificates 70.5%, using the appraised base values and depreciation assumptions in the offering memorandum. "However, we focused on more conservative maintenance-adjusted appraised values (not disclosed in the offering memorandum). We also use more conservative depreciation assumptions for all of the planes than those in the prospectus. We assumed that, absent cyclical fluctuations, values of the A321-200s and A330-200s would decline by 6.5% of the preceding year's value per year, and the A320-200s 6%. Using these values and assumptions, the Class A initial loan- to-value is higher, 56.5%, and rises slightly to close to 60% at its highest point, before declining gradually. The Class B initial loan-to-value, using our assumptions, is about 74.4%, and peaks at close to 79% before declining. Our analysis also considered that a full draw of the liquidity facility, plus interest on those draws represents a claim senior to the certificates. This amount is somewhat higher (as a percent of asset value) than for EETCs issued recently by other U.S. airlines, but is similar to that of many other, earlier EETCs. Initially, a full draw, with interest, is equivalent to about 8.5% of asset value, using our assumptions," S&P related. "Our ratings on US Airways reflect our view of the consolidated credit quality of parent US Airways Group Inc. We base the ratings on US Airways Group's substantial debt and lease burden, limited (though improving) liquidity, and participation in the high-risk U.S. airline industry. The ratings also incorporate the company's better-than-average operating costs. Tempe, Ariz.-based US Airways Group is the fifth-largest U.S. airline, carrying about 8% of industry traffic. We characterize the company's business profile as vulnerable and its financial profile as highly leveraged," S&P said. "We expect US Airways' financial profile to remain fairly stable over the next two years, with EBITDA interest coverage 1.6x-2.0x and funds from operations (FFO)/debt in the low-teen percent area. We believe that an upgrade is not likely over the near-term, but could occur if FFO/debt moves consistently into the high-teens percent area and unrestricted cash and short-term investments increase to more than $2.5 billion. With US Airways' improved operating performance and liquidity, we also believe a downgrade is unlikely over the near term. However, if a stalled U.S. economic recovery or serious oil price spike caused sustained losses, causing liquidity to fall to below $1 billion, we could lower ratings," S&P added. Ratings List US Airways Inc. US Airways Group Inc. Corporate credit rating B-/Stable/-- New Ratings Assigned US Airways Inc. Series 2011-1 Class A pass-through certificates BBB (sf) Series 2011-1 Class B pass-through certificates B+ (sf) VEC LIQUIDATING: Seek Return of 35% Cash Flow of Canadian Assets ---------------------------------------------------------------- VEC Liquidating Corporation and its Debtor affiliates and the Official Committee of Unsecured Creditors ask the U.S. Bankruptcy Court for the District of Delaware to compel ComVest Investment Partners and Velocity Acquisition I LLC to comply with the terms of the Court's order approving a settlement entered into among the Debtors, the Committee, Velocity Acquisition I, and Burdale Capital Finance, Inc. In addition, the Debtors and the Committee want the Court to compel the ComVest Parties to turnover 35% of the "free cash flow" of the Canadian Business, which totals approximately $655,259 through the fourth quarter of 2010. The Debtors previously commenced a sale process involving ComVest Velocity Acquisition I LLC as the stalking horse. The Committee objected to the sale but the parties were able to come up with a settlement which was approved by the Court. The Sale Settlement provides, among other things, that the Purchaser must remit 35% of the free cash flow of the Canadian Business to the Debtor's estates. M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates that after the Court approved the Sale Settlement, the Debtors and the Committee tried on numerous occasions to compel the ComVest Parties to comply with the on- going obligation under the Sale Agreement, without success. Mr. Cleary contends that the failure and refusal of the ComVest Parties to comply with the terms of the Sale Settlement and their refusal to remit the cash has caused the estate to incur unnecessary fees and expenses and delayed the administration of the Chapter 11 cases, to the detriment of the Debtors' estates and their creditors. Velocity Express -- http://www.velocityexpress.com/-- has one of the largest nationwide networks of regional, time definite, ground delivery service areas, providing a national footprint for customers desiring same day service throughout the United States. The Company's services are supported by a customer-focused technology infrastructure, providing customers with the reliability and information they need to manage their transportation and logistics systems, including a proprietary package tracking system that enables customers to view the status of any package via a flexible web reporting system. Velocity, together with 12 affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13294) on Sept. 24, 2009. The Company disclosed assets of $94.1 million and debt of $120.6 million as of Sept. 1, 2009. Velocity subsequently changed its name to VEC Liquidating Corporation. ComVest Velocity Acquisition I, LLC, buyer of the Debtors' assets, is represented in the case by Kenneth G. Alberstadt, Esq., at Akerman Senterfitt LLP in New York. DIP Lender Burdale is represented in the case by Jonathan M. Cooper, Esq., Randall L. Klein, Esq., and Sarah J. Risken, Esq., at Goldberg Kohn Bell Black Rosenbloom & Moritz, LTD., in Chicago, Illinois. WARNACO INC: Moody's Affirms Corporate Family Rating at 'Ba1' ------------------------------------------------------------- Moody's Investors Service upgraded Warnaco Inc. and Warnaco of Canada Company's asset-based revolving credit facilities to Baa1 from Baa2. Warnaco Inc. and Warnaco of Canada Company are wholly owned subsidiaries of The Warnaco Group, Inc. All other ratings, including Warnaco's Ba1 Corporate Family and Probability of Default Ratings were affirmed. The Corporate Family Rating outlook remains stable. The rating action concludes the review for possible upgrade of the asset-based revolving credit facility that commenced on June 6, 2011. RATINGS RATIONALE The upgrade of the asset based credit facilities reflects the additional loss absorption available for these facilities following the closing of the company's $200 million term loan B. Warnaco's Ba1 Corporate Family Rating continues to reflect its solid market position, its strong credit metrics and good liquidity as well as broad channel diversification. The ratings are also supported by the company's good operating margins and its track record of consistent organic growth primarily fueled by strong international growth of the company's Calvin Klein Jeans and Calvin Klein Underwear businesses. The company's rating is constrained by its narrow product focus, high concentration on the reputation and image of the Calvin Klein brand, as well as susceptibility to weakness in discretionary consumer spending inherent in the apparel industry. The company's financial leverage remains moderate; debt/EBITDA (incorporating Moody's standard analytical adjustments) is estimated to be around 2.0 times following the closing of the $200 million term loan B. The stable rating outlook reflects expectations Warnaco will sustain operating performance, invest in growth initiatives and maintain balanced financial policies. Upward rating momentum could develop over time if the company is able to meaningfully diversify concentration risk around the Calvin Klein brand and its limited product categories while maintaining strong liquidity and credit metrics near current levels. That a significant majority of the company's debt is secured also constrains upward rating momentum. Ratings could be downgraded if there is a persistent decline in revenues or operating margins. Ratings could also be downgraded if the company adopted significantly more aggressive financial policies. Quantitatively, the rating could be downgraded if adjusted operating margins materially erode from current levels or debt/EBITDA is sustained above 3.0 times. These ratings were upgraded and LGD assessments amended: Warnaco Inc. -- $270 million asset based revolver due August 2013 to Baa1 (LGD 2, 12%) from Baa2 (LGD 2, 20%) Warnaco of Canada Company -- $30 million asset based revolver due August 2013 to Baa1 (LGD 2, 12%) from Baa2 (LGD 2,20%) These ratings were affirmed: The Warnaco Group, Inc. -- Corporate Family Rating at Ba1 -- Probability of Default Rating at Ba1 Warnaco Inc. -- $200 million term loan B due in June 2018 at Ba1 (LGD 3, 46%) The principal methodology used in rating Warnaco Group Inc. was the Global Apparel Industry Methodology, published May 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA, published June 2009. WATERSONG APARTMENTS: Files Schedules of Assets and Liabilities --------------------------------------------------------------- Watersong Apartments, L.P., filed with the U.S. Bankruptcy Court for the Southern District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $9,750,000 B. Personal Property $454,930 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $10,400,000 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $5,051,642 ----------- ----------- TOTAL $10,204,930 $15,451,642 About Watersong Apartments, L.P Heaadquartered in Solana Beach, California, Watersong Apartments, L.P., filed for Chapter 11 bankruptcy protection on April 2, 2011 (Bankr. S.D. Calif. Case No. 11-05632). Bankruptcy Judge Louise DeCarl Adler presides over the case. The Debtor estimated assets at $10 million to $50 million and debts at $1 million to $10 million. The United States Trustee said that a committee under 11 U.S.C. SEC. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Watersong Apartments, L.P. have expressed interest in serving on a committee. WATERSONG APARTMENTS: Taps Reeder Law as Insolvency Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California authorized Watersong Apartments, L.P., to employ Reeder Law Corporation as general insolvency counsel. Reeder Law is expected to, among other things: -- advise the Debtor regarding the strategy in its Chapter 11 case; -- interact with and negotiate with creditors; and -- prepare the disclosure statement and plan of reorganization. The hourly rates of the firm's personnel are: David M. Reeder, Esq. $375 Paralegals and Greduate Law Clerks $145 The firm received a prepetition retainer of $26,039. The payments were made by Barry S. Nussbaum, Inc. Barry S. Nussbaum is the managing member of BNC Investments, LLC, the general partner of BNC Watersong, L.P., which is the general partner of the Debtor. The retainer balance is $22,037 after application of prepetition fee and filing fee. To the best of the Debtor's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: David M. Reeder, Esq. REEDER LAW CORPORATION 1800 Century Park East, Suite 1200 Los Angeles, CA 90067 Tel: (310) 557-8911 Fax: (310) 557-0380 E-mail: david@reederlaw.com About Watersong Apartments, L.P Heaadquartered in Solana Beach, California, Watersong Apartments, L.P., filed for Chapter 11 bankruptcy protection on April 2, 2011 (Bankr. S.D. Calif. Case No. 11-05632). Bankruptcy Judge Louise DeCarl Adler presides over the case. The Debtor estimated assets at $10 million to $50 million and debts at $1 million to $10 million. The U.S. Trustee has not appointed a creditors committee. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. WILLIAM COS: Fitch Puts 'BB' Debenture Rating on Negative Watch --------------------------------------------------------------- Fitch Ratings has placed The Williams Companies, Inc.'s Issuer Default Rating and debt ratings on Rating Watch Negative. The action follows the announced proposal by WMB to acquire Southern Union Company (SUG; IDR 'BBB-') for $39.00 per share in cash. In addition, Fitch has affirmed with a Stable Outlook ratings for Williams Partners L.P. Fitch has also affirmed its ratings for WPZ affiliates, Williams Partners Finance Corporation, Northwest Pipeline GP, and Transcontinental Gas Pipeline Company, LLC. Approximately $9.1 billion of outstanding long-term debt is affected. WMB's placement on Rating Watch Negative reflects the substantial uncertainty surrounding the details of the proposed acquisition and pro forma operating structure, transactional risk and the potential for additional leverage at WMB. Fitch assumes that WMB would plan on selling some of its acquired assets and use proceeds to reduce debt. Fitch also assumes that WMB's planned third quarter IPO of WPX Energy is still on track. However, credit implications of the proposed SUG purchase and any potential deleveraging of are unclear. The rating affirmations for WPZ, NWP and TGPL reflect the limited direct effect an acquisition of SUG would be expected to have on the credit profiles of these entities. However, should the transaction lead to asset dropdowns requiring financing at WPZ, which is likely, Fitch will assess the details of the transactions as they are identified. Fitch places these ratings on Rating Watch Negative: The Williams Companies, Inc. -- IDR 'BBB-'; -- Senior unsecured debt 'BBB-'; -- Junior subordinated convertible debentures 'BB'. Fitch affirms these ratings with a Stable Outlook: Williams Partners L.P. -- IDR at 'BBB-'; -- Senior unsecured debt at 'BBB-'. Williams Partners Finance Corporation -- IDR at 'BBB-'; -- Senior unsecured debt at 'BBB-'. Transcontinental Gas Pipeline Company, LLC -- IDR at 'BBB'; -- Senior unsecured debt at 'BBB'. Northwest Pipeline GP -- IDR at 'BBB'; -- Senior unsecured debt at 'BBB'. WILHITE ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Wilhite Enterprises, Inc. 3321 Lee Road 54 Opelika, AL 36804 Bankruptcy Case No.: 11-80909 Chapter 11 Petition Date: June 21, 2011 Court: United States Bankruptcy Court Middle District of Alabama (Opelika) Judge: Dwight H. Williams Jr. Debtor's Counsel: Michael A. Fritz, Sr., Esq. FRITZ HUGHES & HILL, LLC 1784 Taliaferro Trail, Suite A Montgomery, AL 36117 Tel: (334) 215-4422 Fax: (334) 215-4424 E-mail: bankruptcy@fritzandhughes.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/almb11-80909.pdf The petition was signed by Terry Wilhite. WINGATE AIRPORT: Court Declares Wyndham Hotel a S.A.R.E. -------------------------------------------------------- The Hon. Mike K. Nakagawa of the U.S. Bankruptcy Court for the District of Nevada granted the request of 2009-1 CRE Venture LLC to determine that all property owned by Wingate Airport South LLC is a "single asset real estate." According to 2009-1 CRE Venture, the Debtor is not currently conducting business on Wyndham Hotel and land in 355 E. Warm Springs Road, Las Vegas, Nevada -- other than developing the property to operate as a Wyndham Hotel. Because the Debtor's sole business on the real property involves developing the property, it is clear that Debtor has no business other than operating the Property and activities incidental to the operation of the property. Thus, the Property meets the final prong of the definition of single asset real estate under Bankruptcy Code Section 101(51B). When the Debtor filed for bankruptcy in February 2011, the Debtor owed $1.29 million to 2009-1 CRE Venture, plus legal, foreclosure and appraisal fees. Bob L. Olson, Esq., at Greenberg Traurig LLP represents 2009-1 CRE Venture. Las Vegas, Nevada-based Wingate Airport South, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 11- 11950) on Feb. 11, 2011. In its schedules, the Debtor disclosed $12,000,000 in assets and $9,497,529 in liabilities as of the Petition Date. WOLVERINE TUBE: Emerges From Chapter 11 Bankruptcy -------------------------------------------------- Wolverine Tube, Inc has emerged from Chapter 11 bankruptcy protection effective June 28, 2011, pursuant to a Plan of Reorganization approved by the U.S. Bankruptcy Court for the District of Delaware. "As planned, Wolverine maintained its business as usual through the reorganization process, paid all unsecured creditors in full, and successfully completed the restructuring with significantly reduced debt," said Steven S. Elbaum, Chairman of Wolverine. "As a result, Wolverine has a manageable amount of debt, tangible net equity of an estimated $60-$70 million (subject to confirmation of the "fresh start" accounting) and adequate liquidity to meet its foreseeable working capital and capital investment needs." Under the Plan, $139 million of senior secured notes and accrued interest at the petition date has been converted to equity plus a $30 million note. The Company's defined pension plan was terminated and assumed by the Pension Benefit Guaranty Corporation (PBGC) in exchange for 5 percent equity in the Company and a stream of payments over 11 years with a present value of approximately $13 million. The Company exits Chapter 11 as a privately held company with its former senior secured noteholders holding a substantial majority of the stock. All old Wolverine common and preferred shares are cancelled. "We are very grateful to our employees, customers, suppliers and partners for their support through this reorganization process," said Harold M. Karp, President and Chief Operating Officer. "Our business plan will focus on improving positive operating income, free cash flow, and strengthening our competitiveness through continuous improvements and new product development. We are well positioned to compete successfully." About Wolverine Tube Huntsville, Alabama-based Wolverine Tube, Inc., is a global manufacturer and distributor of copper and copper alloy tube, fabricated products, and metal joining products. The Company currently operates seven facilities in the United States, Mexico, China, and Portugal. It also has distribution operations in the Netherlands and the United States. Wolverine Tube sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-13522) on Nov. 1, 2010. Mark E. Felger, Esq., and Simon E. Fraser, Esq., at Cozen O'Connor represent the Debtor. Scott K. Rutsky, Esq., and Adam T. Berkowitz, Esq., at Proskauer Rose LLP, serve as the Debtor's special corporate and tax counsel. Deloitte Financial Advisory Services LLP is the Debtor's financial advisor. Donlin Recano & Company, Inc., is the Debtor's claim agent. The Debtor disclosed $115 million in total assets and $237 million in total debts at the time of the filing. Affiliates Tube Forming, L.P. (Bankr. D. Del. Case No. 10-13523), Wolverine Joining Technologies, LLC (Bankr. D. Del. Case No. 10-13524), TF Investor Inc. (Bankr. D. Del. Case No. 10-13525), and WT Holding Company, Inc. (Bankr. D. Del. Case No. 10-13526) filed separate Chapter 11 petitions. No official committee of unsecured creditors has been appointed in the case. The Debtors filed a prearranged Chapter 11 plan proposing to pay unsecured creditors in full and turning ownership of the reorganized company over to their noteholders. As reported in the TCR on June 14, 2011, Wolverine Tube filed with the U.S. Bankruptcy Court a designation for its First Amended Joint Plan of Reorganization, identifying the officers and directors of the reorganized Debtors. BankruptcyData.com says the Court also issued a ruling confirming the First Amended Joint Plan of Reorganization, as Modified, of Wolverine Tube and its affiliated Debtors. * Burleson LLP Adds 25 Attorneys to Texas, Pennsylvania Offices --------------------------------------------------------------- With the addition of 25 attorneys to its offices in Houston, San Antonio, and Pittsburgh, Burleson LLP has broadened its regional and national footprint, further strengthening its ability to provide the widest range of legal services to companies and financial institutions in the oil and gas industry. "Energy work has always been a major priority for our firm, but the surge of activity in shale plays has been critical in shaping our overall strategic direction," said Rick Burleson, managing partner. "Our focus on growth - in terms of capabilities, attorneys, and physical office space - has extended our reach significantly, enabling us to work on some of the largest and most important transactions happening in the industry." The latest wave of expansion includes: * San Antonio. The firm added eight new attorneys and two partners to its San Antonio location to support litigation and oil and gas title matters for companies operating in the Eagle Ford Shale. The office, which now includes 17 lawyers, has moved to the Weston Center on the River Walk, where nearly 10,000 square feet of space has been leased on the seventh floor of the building located at 112 East Pecan St. * Pittsburgh. Eight lawyers and a partner have joined the Pittsburgh office, reinforcing the firm's transactional and litigation practice areas for companies with interests in the Marcellus and Utica Shale. Since opening in September 2009, the location has grown from four to 26 attorneys. * Houston. Six new lawyers have been hired in Houston, where Burleson recently moved into new offices in the downtown Pennzoil Building, virtually doubling its square footage. The Houston location now occupies 20,407 square feet on the 11th floor of the building's North Tower at 700 Milam. With this growth, the firm's portfolio of work in shale formations now includes clients in the Marcellus, Bakken, Barnett, Eagle Ford, Fayetteville, Haynesville, Utica, and Woodford plays, as well as those with a presence in the Permian Basin. About Burleson LLP Burleson LLP -- http://www.burlesonllp.com-- has earned a reputation as the energy law firm the energy industry goes to. It has grown significantly in recent years with over 85 attorneys and offices in Houston, San Antonio, and Pittsburgh, Pennsylvania. Serving clients in the upstream and midstream segments, the firm provides counsel to oil and gas producers, transportation companies, storage and processing businesses, and energy service providers. Burleson's far-reaching experience includes mergers, acquisitions, and divestitures; finance; private equity; venture capital; securities; corporate governance and compliance; patents and intellectual property; title review; real estate; litigation; and bankruptcy/restructuring, land use, and environmental law. * William Blair & Company Adds Two Professionals to SSR Group ------------------------------------------------------------- The investment banking group of William Blair & Company, a global investment firm on Monday announced the expansion of its Special Situations & Restructuring group with the addition of two new professionals. Suneel Mandava has been hired as a managing director, and Sherri Toub as a senior associate. Mr. Mandava and Ms. Toub will be located in the firm's Chicago headquarters and report to Geoffrey Richards, head of William Blair's SSR group. "This expansion reinforces our commitment to provide exceptional advice to our clients," Mr. Richards said. "We are delighted to have Suneel and Sherri join us. Their combined depth and breadth of restructuring knowledge, together with their creativity in dealing with sophisticated capital structures, will add significant value for our clients across all industry sectors." Brent Gledhill, William Blair's global head of Corporate Finance, added, "Our SSR group's specialized experience working on complex transactions has unlocked hidden value and saved thousands of jobs for many companies going through the restructuring process. With the hiring of Suneel and Sherri, we expand our ability to help clients with unique balance sheet issues." Since 2008, the SSR Group has completed 29 transactions across multiple industries. These include advising Waterworks (specialty retailer), Max & Erma's, Inc. (casual dining restaurants), Renew Energy (ethanol producer), LECG (professional services), Gulf Fleet (marine supply vessels), Bi-Lo (grocery stores), and the India/U.K. joint venture purchaser of Hartmarx (clothing manufacturer and retailer). Recently, the Turnaround Management Association's Midwest/Chicago chapter named The Gores Group's acquisition of National Envelope Corporation as the Large Transaction of the Year for 2010. William Blair led National Envelope, which is the largest domestic envelope manufacturer and has revenue of $750 million, through the Chapter 11 sale process. This transaction was also awarded the Private Equity Turnaround Deal of the Year by the Global M&A Network. Mr. Mandava was previously a director with Lazard FrŠres & Co. LLC's Financial Restructuring Group, and worked on transactions within various industry sectors, including representing The Tribune Company, Oglebay Norton, Tower Automotive, and SunCom Wireless. Before that he was a business analyst and senior vice president at U.S.I. Holdings Corporation (previously a Capital Z portfolio company), and an associate at Capital Z Partners. Mr. Mandava earned a B.S. in economics from the University of Pennsylvania Wharton School of Business, where he graduated magna cum laude with a triple concentration in finance, accounting, and statistics. Ms. Toub was previously a senior associate in the business, finance, and restructuring group at Weil, Gotshal & Manges LLP. She has more than seven years of complex transaction experience in an extensive range of restructuring and distressed M&A engagements, both in and outside Chapter 11. Ms. Toub received her B.A. in english with distinction and honors from the University of Michigan, and her J.D., cum laude and Order of the Coif, from the Benjamin N. Cardozo School of Law. About William Blair & Company William Blair & Company, L.L.C. -- http://www.williamblair.com-- is a global investment firm offering investment banking, asset management, equity research, and institutional and private brokerage to individual, institutional, and issuing clients. The company is based in Chicago, with office locations including Boston; London; New York; San Francisco; Shanghai; Wilmington, Delaware; and Zurich. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- July 21-24, 2011 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Hyatt Regency Newport, Newport, R.I. Contact: 1-703-739-0800; http://www.abiworld.org/ July 27-30, 2011 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Sanctuary at Kiawah Island, Kiawah Island, S.C. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 4-6, 2011 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 14, 2011 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Tampa Convention Center, Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. __, 2011 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Dublin, Ireland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 25-27, 2011 TURNAROUND MANAGEMENT ASSOCIATION Hilton San Diego Bayfront, San Diego, CA Contact: http://www.turnaround.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. 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 ***