/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110727.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, July 27, 2011, Vol. 15, No. 206 Headlines 177 WESTON ROAD: Court Won't Reopen Foreclosure Proceedings 5TH AVENUE: Kimpton Completes $49-Mil. Acquisition of The Se Hotel ADVENT PHARMACEUTICALS: Meeting to Form Committee on July 29 ALASKA FUR: Court Grants EDC's Substantial Contribution Claim ALLEN FAMILY: Unsec. Creditors Object to $68-Mil. Sale to Seaford ALLEN FAMILY: Committee Gets OK to Tap Lowenstein as Counsel AMBAC FIN'L: Agrees to Extend OCI Plan Settlement Deadline BARRY GRANT: High Performance Buys Assets at Bankruptcy Auction BERNARD L MADOFF: Wilpon Aims to Make Hole in Fraud Transfer Law BLOCKBUSTER INC: Receives $15.9 Million From Dish Escrow BORDERS GROUP: DJM to Auction 259 Borders Leases in Next 2 Months BORDERS GROUP: Books-A-Million Fails to Reach Deal to Buy Stores BROWN'S CHICKEN: New Owners to Open at Millennium Station CAMTECH PRECISION: Affiliate Has Until Aug. 15 to File Plan CAREFREE WILLOWS: Court Denies Employment of Marquis Aurbach CASELLA WASTE: S&P Affirms 'B+' Corporate Credit Rating CATHOLIC CHURCH: Milw. Creditors, Abuse Survivors to Probe Clergy CB HOLDINGS: Settles Restitution Claim vs. Former CEO CCT COMMUNICATIONS: S.D.N.Y. Bankr. Ct. Rules on GX Contract Rift CDP CORPORATION: Bankruptcy Judge Won't Enjoin District Court CENVEO CORPORATION: Moody's Affirms 'B3' Corporate Family Rating CLASSICSTAR LLC: Ch. 7 Trustee Settles Fraud Claims for $27 Mil. CONVERGEX HOLDINGS: Could Get Moody's Downgrade After Sale to CVC COOPER TIRE: S&P Affirms 'BB-' Corporate, Gives Positive Outlook CRYSTAL CATHEDRAL: Diocese Makes $50 Million Offer CUMULUS MEDIA: S&P Keeps Ratings on Watch Positive DAIRY PRODUCTION: Court Clarifies Morgan Joseph Retention Order DAIVAMATHA ENTERPRISES: Voluntary Chapter 11 Case Summary DBSD N.A.: Still Fights Over $3 Million in Exit Financing Fees DEB SHOPS: Wins Approval to Place Assets on Auction Block DEUCE INVESTMENTS: Chapter 11 Reorganization Case Dismissed DHILLON PROPERTIES: Alan R. Smith Approved as Bankruptcy Counsel DOWNEY REGIONAL: Sees Bankruptcy Emergence in September DTR TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors EDWARD YODER: Files for Bankruptcy to Restructure Debts ENDEAVOUR INT'L: Moody's Withdraws 'Caa2' Corporate Rating ENEA SQUARE: Can Use NUCP Cash to Pay June Invoices and Salaries ENTELOS INC: Drug Test Simulator Files for Chapter 11 EVANS OIL: Court Amends $1-Mil. DIP Financing Order FIESTA RESTAURANT: Moody's Assigns 'B2' CFR; Outlook Stable FIESTA RESTAURANT: S&P Assigns Prelim. 'B' Corp. Credit Rating FORUM HEALTH: Court to Confirm Liquidating Chapter 11 Plan FOUNTAIN POWERBOAT: Judge Explains Scope of Stay Pending Appeal FRENCH BROAD: Court Confirms First Amended Plan FRENCH BROAD: DIP Loan Order Amended to Provide Definition for NSP GELT PROPERTIES: Voluntary Chapter 11 Case Summary GENEVA MULTI-FAMILY: Case Could Be Dismissed This August GLOBAL CROSSING: S.D.N.Y. Bankr. Ct. Rules on CCT Contract Rift GOLD HILL: Court Schedules Sept. 8 Disclosure Statement Hearing GOLD HILL: Court OKs Keith Corp as Marketing & Development Agent GOLD HILL: Court OKs Robert Palmer & Associates as Tax Accountant GOLF 255: 7th Cir. Affirms Order Closing Bankruptcy Case GP WEST: Gets Nod to Hire Carrasquillo as Financial Consultant GP WEST: Obtains OK to Tap Eduardo J. Corretjer Reyes as Attorney GREAT CANADIAN: Moody's Assigns 'Ba2' Rating to New Revolver GSC GROUP: Black Diamond Fights Rival Lenders' Bid to Enjoin Sale HARBOUR EAST: Seeks Authority to Further Use Cash Collateral HARBOUR EAST: Condo Deposits Are Subject to Lender's Mortgage HARRISBURG, PA: City Council Rejects State Bailout Plan HARRY & DAVID: Has Plan Exclusivity Until Nov. 30 HEARUSA INC: Siemens Unit Submits $98-Mil. Competing Offer ISOLA USA: S&P Assigns 'B' Corporate Credit Rating JACK IN THE BOX: Moody's Cuts CFR to B1; Ratings to be Withdrawn JACKSON HEWITT: Wants Immediate Plan Consummation JACKSON HEWITT: Committee Wins OK to Hire Counsel, Fin'l Advisor JEFFERSON COUNTY: Rep. Moore Says Sewer Transactions Illegal JEFFERSON COUNTY: Voting on Bankruptcy Filing, Alternatives JNL FUNDING: Court Confirms Amended Reorganization Plan KEELEY AND GRABANSKI: Chapter 11 Trustee Wants Case Converted KOBRA EFS: Court Denies Plea to Extend Schedules Deadline LEHMAN BROTHERS: Parties Agree to Hold Rival Plans in Abeyance LEHMAN BROTHERS: LBI Trustee Appeals $1.1-Bil. Award for Barclays LEHMAN BROTHERS: Proposes to Settle State Street's $850-Mil. Claim LEHMAN BROTHERS: NJDT Appeals D&O Payment in FINRA Award LEHMAN BROTHERS: $1.34 Billion Already Paid to Advisors LEVEL 3: S&P Affirms 'B-' Corporate Credit Rating LEVELLAND/HOCKLEY: Committee Taps XRoads as Financial Advisor LIPENWALD INC: Case Summary & 20 Largest Unsecured Creditors LOS ANGELES DODGERS: Court OKs Epiq as Claims & Noticing Agent LOS ANGELES DODGERS: Meeting of Creditors Scheduled for Aug. 17 LOS ANGELES DODGERS: Court Rules MLB Loan Superior to Highbridge MACCO PROPERTIES: Seeks Dismissal of Chapter 11 Case MARKET STREET: Court OKs Harold Asher as Forensic Accountant MAULDING DEVELOPMENT: C.D. Ill. Strict on E-Filing Policy MCS ADVANTAGE: Moody's Affirms Sr. Secured Debt Rating at 'B2' MERIT GROUP: To Complete Sale of All Assets Next Month METROPARK USA: Has Buyer for Trademarks at $175,000 MID-ATLANTIC MULTI-SPECIALTY: Meeting to Form Committee Friday MILTON EVANS: Dist. Ct. Dismisses Suit v. Mercedes Benz Financial MITEL NETWORKS: Moody's Affirms B3 Corporate; Outlook Stable MUMTAZ HANNA GEORGE: Court Cites Flaws in Plan Outline NALCO COMPANY: Fitch Places 'B+' IDR on Rating Watch Positive NATIONAL AIRLINES: CEO Personally Liable for Unpaid Tax NATIONAL ENVELOPE: To Receive $1 Million From Ace NEW ENGLAND: Moody's Upgrades Bond Rating to 'Ba1' NORTEL NETWORKS: Seeks to Hire Collins as Special Irish Counsel NURSERYMEN'S EXCHANGE: Has Final OK to Obtain $3.5MM of DIP Loans NURSERYMEN'S EXCHANGE: Court OKs Finestone Law Firm as Counsel NURSERYMEN'S EXCHANGE: Can Hire Omni Management as Claims Agent NURSERYMEN'S EXCHANGE: Can Hire Katten Muchin as Special Counsel NURSERYMEN'S EXCHANGE: Committee Taps Epiq as Information Agent O&G LEASING: Aims Full Repayment of Unsecured Claims in 24 Mos. OASIS PLUS: Owner Files for Ch. 11 to Stop Foreclosure PEACH HOLDINGS: Moody's Reviews 'C' Ratings for Possible Upgrade PERKINS & MARIE: Closes Three Restaurants in South California PERKINS & MARIE: Committee Asks for OK for Ropes & Gray as Counsel PERKINS & MARIE: Wins OK for Whitby Santarlasci as Fin'l Advisor PERKINS & MARIE: Young Conaway Approved as Delaware Counsel PERKINS & MARIE: Can Hire Troutman Sanders as Bankruptcy Counsel PETER J GRAVES: Investors Get Final Crack on Lawsuit PHILADELPHIA ORCHESTRA: Musicians Demands Endowment Information PHOENIX EMERGENCY: Voluntary Chapter 11 Case Summary PINNACLE HILLS: Gets Case Dismissal After Abandoning Assets PONIARD PHARMACEUTICALS: Gets Delisting Notice From Nasdaq POTLATCH CORP: Moody's Affirms Corporate Family Rating at 'Ba1' RASER TECHNOLOGIES: Evergreen-FE to Offer Competing Ch. 11 Plan RCC NORTH: Bankruptcy Judge Curley Won't Recuse Self REALTY EXECUTIVES: Agents Regroup to Form New Tucson Franchise REITTER CORP: Termination Date of Term Loans Extended to Sept. 1 REITTER CORP: Has Access to Cash Collateral Until Sept. 1 RENEGADE HOLDINGS: Suit v. Huntington Survives Motion to Dismiss REVIVAL OUTREACH: Court Cites Flaws in Plan Outline RICHARD KLARCHECK: Judge Tosses Out Chapter 11 Case RM HOTELS: Has Deal With Lender, Seeks Case Dismissal ROBERT'S PLUMBING: Court Says Plan "Fatally Flawed" ROEDJE CORPORATION: Case Summary & 15 Largest Unsecured Creditors ROOKWOOD CORP: Judge Rejects Involuntary Bankruptcy Case ROTHSTEIN ROSENFELDT: Trustee Sues J.R. Dunn Jewelers for $2.4MM ROUND TABLE: ESOP Trustee Taps Wendel Rosen as Co-Counsel ROUND TABLE: ESOP Trustee Proposes Boylan Brown as Co-Counsel ROUND TABLE: Wants to Extend Plan Filing Deadline to Nov. 6 RW LOUISVILLE: Says Noteholder Destroying Reorganization Prospects SAINT VINCENTS: Court OKs Cain Brothers as Investment Banker SANDY COVE: Goes Into Receivership, Forced to Close its Doors SBARRO INC: Column Investments Fights Loan's Debt to Equity Switch SCOVILL FASTENERS: Meeting of Creditors Scheduled for Aug. 9 SCOVILL FASTENERS: Files Schedules of Assets & Liabilities SEAHAWK DRILLING: U.S. Trustee Forms 4-Member Creditors Committee SEAHAWK DRILLING: Can Hire RE/MAX as Barrow Street Lease Brokers SEAHAWK DRILLING: Sanchez DeVanny OK'd to Handle Spinoff Matters SEP RIVERPARK: Receivership Services Approved as Property Manager SHERWOOD BRANDS: US Trustee Has More Time to Challenge Hiring SHAMROCK-SHAMROCK: Request to Transfer Chapter 11 Case Denied SPECIALTY PRODUCTS: Judge Rejects Firm's Discovery Bid STELLAR GT: Meeting of Creditors Continued Until Aug. 1 SWISS CHALET: Obtains OK to Tap Kevane Grant as External Auditors TEXAS INDUSTRIES: S&P Lowers Corporate Credit Rating to 'B-' TEXAS RANGERS: Plan Administrator Challenges MLB's Legal Fees TEXAS WYOMING: Plan Preserved Avoidance Suit v. Shareholders UNITED GILSONITE: Legal Analysis Approved as Asbestos Consultant UNITED GILSONITE: Has Until Jan. 17 to File Reorganization Plan UNITED GILSONITE: Charter Oak OK'd as Panel & FCR's Fin'l Advisor URBAN WEST: Enters Stipulation With SP4 Re Lift Stay Request VAN HAM DAIRY: Applies for New Permits for Operation VITRO SAB: U.S. Units Completes Sale to Sun Capital WASHINGTON MUTUAL: FDIC Files Reservation of Rights WHAT A GOOD DOG: Case Summary & 17 Largest Unsecured Creditors WJO INC: Committee Seeks to Hire Pachulski as Replacement Counsel W.R. GRACE: Completes Acquisition of De Neef Conchem Group W.R. GRACE: EPA to Run Tests on Libby Wood Chips W.R. GRACE: To Present at Jefferies Conference on Aug. 9 * Bank Escapes Injunction for Faulty Mortgage Claims * Three Bank Failures Bring Year's Total to 58 * Global Corporate Default Tally Up To 19 So Far in 2011 * No U.S. Default, Experts Said at DBR's Annual Roundtable * Consumers Hit by Crisis Slow to Embrace Banks New Credit Product * Cohen & Grigsby Taps Ryan Colombo to Labor & Employment Group * Kinetic Partners Expands Recovery & Restructuring Practice * Upcoming Meetings, Conferences and Seminars ********* 177 WESTON ROAD: Court Won't Reopen Foreclosure Proceedings ----------------------------------------------------------- Bankruptcy Judge Alan H.W. Shiff denied the request of Fairfield County Bank for relief from the automatic stay in the bankruptcy case of 177 Weston Road, LLC. Fairfield seeks to reopen a judgment of foreclosure by sale entered by the Connecticut Superior Court and obtain a new sale date for the real property owned by 177 Weston Road. The Bank alleges that the Debtor's Chapter 11 filing is part of a scheme to delay, hinder or defraud it. The Debtor objects, arguing that its petition was not for an improper purpose. Rather, it was filed "to obtain protection for [its] property and reorganize [its] debt". Moreover, the Bank is fully secured, and the Debtor's plan will provide for the payment of the bank's allowed claim. Fairfield County Bank is represented by: Julie A. Manning, Esq. SHIPMAN & GOODWIN LLP One Constitution Plaza Hartford, CT Tel: (860) 251-5613 Fax: (860) 251-5219 E-mail: jmanning@goodwin.com A copy of Judge Shiff's July 22, 2011 Memorandum and Order is available at http://is.gd/LEN55Qfrom Leagle.com. 177 Weston Road, LLC, in Weston, Connecticut, sought Chapter 11 protection (Bankr. D. Conn. Case No. 11-50657) on April 1, 2011. Judge Alan H.W. Shiff presides over the case. James M. Nugent, Esq., and James R. Winkel, Esq., at HARLOW ADAMS AND FRIEDMAN, serve as bankruptcy counsel. It scheduled $1,250,000 in assets and $1,217,207 in debts. The petition was signed by George Guidera, member/manager. 5TH AVENUE: Kimpton Completes $49-Mil. Acquisition of The Se Hotel ------------------------------------------------------------------ Jooyoung Kim at CoStar Group reported in its Web site that Kimpton Hotels & Restaurant Group LLC acquired The Se Hotel in San Diego, California, from 5th Ave Partners LLC for $49 million. The hotel and entertainment complex was sold in an 11 U.S.C. Section 363 sale. Charles Quinn, Ken Pearson and Lewis Miller of CB Richard Ellis represented the buyer. Marc Winthrop and Garrick Hollander of Winthrop Couchot P.C. represented the seller. About 5th Avenue Partners Newport Beach, California-based 5th Avenue Partners owned and operated the Se San Diego hotel located in San Diego, California's financial district. The hotel has 184 guestrooms, a 5,500-square- foot spa, a restaurant, rooftop bar and lounge, 20,000 square feet of banquet space and meeting rooms, an outdoor rooftop pool, fitness center and 23 unsold condominium units. 5th Avenue also owned next to the Se San Diego hotel building a 31,000-square-foot building, which it leases to the House of Blues music club. 5th Avenue Partners, LLC, filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 10-18667) on June 25, 2010. Marc J. Winthrop, Esq., at Winthrop Couchot PC, in Newport Beach, California, assists the Company in its restructuring effort. Blitz Lee & Company serves as its accountant. The Company estimated assets at $10 million to $50 million and debts at $50 million to $100 million. The Official Committee of Unsecured Creditors tapped Baker & McKenzie LLP as counsel. ADVENT PHARMACEUTICALS: Meeting to Form Committee on July 29 ------------------------------------------------------------ Roberta DeAngelis, the United States Trustee for Region 3, will hold an organizational meeting on July 29, 2011, at 10:00 a.m. in the bankruptcy case of Advent Pharmaceuticals, Inc. The meeting will be held at: United States Trustee's Office One Newark Center 1085 Raymond Blvd. 21st Floor, Room 2106 Newark, NJ 07102 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Advent Pharmaceuticals, Inc., filed a Chapter 11 petition (Bankr. D. N.J. Case No. 11-25437) on May 18, 2011, in Trenton, New Jersey. Barry W. Frost, Esq., at Teich Groh, in Trenton, serves as counsel to the Debtor. The Debtor estimated up to $50,000 in assets and up to $10 million in liabilities. An affiliate, Theragen, Inc., sought Chapter 11 protection (Case No. 11-25440) on the same day. ALASKA FUR: Court Grants EDC's Substantial Contribution Claim ------------------------------------------------------------- Bankruptcy Judge Donald MacDonald, IV, granted Export Development Canada's request for allowance of an administrative expense priority, saying EDC has made a substantial contribution to Alaska Fur Gallery, Inc.'s case in accordance with 11 U.S.C. Section 503(b)(3)(D). EDC seeks to recoup a portion of the attorneys fees it has incurred in the case, in the sum of $30,000. Although EDC seeks administrative priority, it has agreed that its fees will be paid as a class U-2 claim receiving Option B treatment under the debtor's modified sixth amended plan of reorganization. EDC was initially appointed to a creditor's committee. Although the committee disbanded, EDC continued to play an active and constructive role in the case. It negotiated with the debtor for better treatment of unsecured creditors' claims, ultimately leading to the two options found in the debtor's modified sixth amended plan. EDC's counsel participated in numerous hearings on the multiple disclosure statements and plans presented by the debtor. EDC also assisted in the amendments ultimately leading to confirmation of a viable plan. Effectively, EDC has been a de facto unsecured creditor's committee, leading to better treatment for all unsecured creditors in these lengthy, protracted and highly contested proceedings. First National Bank Alaska opposes EDC's motion. FNBA maintains that the debtor's principals owe the debtor $1.6 million and any capital contributions are illusory under such circumstances. FNBA also contends EDC didn't play a role in obtaining cash contributions from the debtor's principals. "I find none of FNBA's arguments persuasive," Judge MacDonald said. The judge noted that at the very least, EDC's objections to old disclosure statements persuaded the principals to increase their contributions. A copy of Judge MacDonald's July 21, 2011 Memorandum is available at http://is.gd/E87WS0from Leagle.com. About Alaska Fur Gallery Alaska Fur Gallery, Inc., based in Anchorage, filed for Chapter 11 bankruptcy (Bankr. D. Alaska Case No. 09-00196) on April 7, 2009. Cabot C. Christianson, Esq. -- ecf@cslawyers.net -- at Christianson & Spraker, serves as bankruptcy counsel. In its petition, the Debtor estimated assets and debts between $1 million to $10 million. The petition was signed by Magdalena Hausinger, shareholder. ALLEN FAMILY: Unsec. Creditors Object to $68-Mil. Sale to Seaford ----------------------------------------------------------------- Kaitlin Ugolik at Bankruptcy Law360 reports that unsecured creditors of Delaware-based Allen Family Foods Inc. objected Friday to its proposed sale to Seaford Milling Co. for a maximum of $68 million, claiming it did not account for administrative expenses, the true value of the company's assets or probable job losses. Law360 says the Creditors Committee objects to the proposed sale of the Company's most valuable assets for $30 million plus the value of inventory, which cannot exceed $38 million. About Allen Family Foods Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry company. Allen Family Foods and two affiliates, Allen's Hatchery Inc. and JCR Enterprises Inc., 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. Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. FTI Consulting is the financial advisor. BMO Capital Markets is the Debtors' investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Lowenstein Sandler PC and Womble Carlyle Sandridge & Rice, PLLC, serve as counsel for the official committee of unsecured creditors. J.H. Cohn LLP serves as the Committee's financial advisor. ALLEN FAMILY: Committee Gets OK to Tap Lowenstein as Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors appointed in the bankruptcy cases of Allen Family Foods, Inc., and its debtor- affiliates sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to retain Lowenstein Sandler PC as its counsel, effective as of June 16, 2011. The professional services that Lowenstein Sandler will provide to the Committee include, but are not limited to: a. providing legal advice as necessary with respect to the Committee's powers and duties as an official committee appointed under Section 1102 of the Bankruptcy Code; b. assisting the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' businesses, potential claims, and any other matters relevant to the case, to the sale of assets or to the formulation of a plan of reorganization; c. participating in the formulation of a Plan; d. providing legal advice as necessary with respect to any disclosure statement and Plan filed in the Chapter 11 cases and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; e. preparing on behalf of the Committee, as necessary, applications, motions, complaints, answers, orders, agreements and other legal papers; f. appearing in Court to present necessary motions, applications, and pleadings, and otherwise protecting the interests of those represented by the Committee; g. assisting the Committee in requesting the appointment of a trustee or examiner, should this action be necessary; and h. performing other legal services as may be required and that are in the best interests of the Committee and creditors. The firm will be paid based on its professionals' adjusted hourly rates: Members (principals) of the Firm $435 - $895 Senior Counsel (generally 10 or more years experience) $390 - $660 Counsel $350 - $630 Associates (generally less than 6 years experience) $245 - $470 Paralegals and Assistants $145 - $245 The firm will also be reimbursed for actual and necessary expenses incurred. Jeffrey D. Prol, Esq., a member of Lowenstein Sandler, assured the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, and does not hold or represent any interest adverse to the Committee with respect to the matters upon which it is to be employed. About Allen Family Foods Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry company. Allen Family Foods and two affiliates, Allen's Hatchery Inc. and JCR Enterprises Inc., 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. Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. FTI Consulting is the financial advisor. BMO Capital Markets is the Debtors' investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Lowenstein Sandler PC and Womble Carlyle Sandridge & Rice, PLLC, serve as counsel for the official committee of unsecured creditors. J.H. Cohn LLP serves as the Committee's financial advisor. AMBAC FIN'L: Agrees to Extend OCI Plan Settlement Deadline ---------------------------------------------------------- Ambac Financial Group, Inc. disclosed that at the request of the Commissioner of Insurance of the State of Wisconsin, and with the approval of Ambac Assurance Corporation, it has agreed to provide additional time for OCI to complete its analysis of the Plan of Reorganization of Ambac Financial Group, dated July 6, 2011, as filed with the U.S. Bankruptcy Court. In addition, the agreement by Ambac Financial to provide additional time will allow Ambac Financial, the Official Creditor's Committee of Ambac Financial, Ambac Assurance and OCI to mediate the outstanding issues between Ambac Financial and Ambac Assurance under the Plan. Under the original terms of the Plan, Ambac Assurance and OCI could accept a settlement proposed in the Plan by filing notice with the Bankruptcy Court by July 29, 2011. Pursuant to the agreement among Ambac Financial, Ambac Assurance, OCI, and the Official Creditor's Committee of Ambac Financial, the Plan Settlement Deadline has been changed to August 25, 2011. As a consequence of the Agreement, the Bankruptcy Court hearing relating to the approval of the Disclosure Statement, originally scheduled for August 12, 2011, has been rescheduled for September 8, 2011, and the Bankruptcy Court hearing relating to the confirmation of the Plan has been rescheduled for November 8 and 9, 2011. Kenneth B. Axe, Esq., a member at Lathrop & Clark LLP, in Madison, Wisconsin -- kaxe@lathropclark.com -- discloses that his firm represents GE Capital, Liberty Mutual Insurance Company, and U.S. Bank in matters unrelated to the Debtor. Lathrop also represented The Hartford Life Insurance Company, Metropolitan Life Insurance Company and National Union Insurance Company in past matters unrelated to the Debtor, he adds. Lathrop, he cites, represented the Debtor's affiliate Ambac Assurance UK in connection with the rehabilitation of AAC, although at present it is not actively representing Ambac UK. Notwithstanding those disclosures, Mr. Axe insists that Lathrop is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. BARRY GRANT: High Performance Buys Assets at Bankruptcy Auction --------------------------------------------------------------- Hot Rod reported that High Performance Industries has bought the assets of Barry Grant, Inc. at a bankruptcy auction. The report recounts that Barry Grant operated its automotive business while in Chapter 11. But it never filed a reorganization plan or sought an exclusivity extension. The business continued to lose money and the company attempted to meet cash shortfalls by selling off assets without obtaining approval to do so. One of the largest creditors sought and obtained an order converting the case converted to Chapter 7 liquidation. Barry Grant later shut operations on Feb. 18, 2011. According to the report, the Chapter 7 trustee concluded that Barry Grant's debts far exceeded the value of his assets and abandoned those assets to Barry Grant's secured creditor. This secured creditor quickly sold off loans secured by Barry Grant's real estate including his plant in Georgia and his race car shop in North Carolina. After the loans secured by the real estate had already been sold, High Performance Industries, the company that also owns Holley, purchased other loans secured by substantially all of Barry Grant's operating assets. The operating assets collateralizing these notes were then sold at public auction to High Performance Industries on July 6, 2011. Barry Grant filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 08-23484) on Oct. 14, 2008. BERNARD L MADOFF: Wilpon Aims to Make Hole in Fraud Transfer Law ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee liquidating Bernard L. Madoff Investment Securities Inc. and the Securities Investor Protection Corp. filed papers on July 22 opposing dismissal of the trustee's $1 billion lawsuit against Fred Wilpon, Sterling Equities Inc., the owners of the New York Mets baseball club, and Wilpon's friends, family and associates. The report relates that U.S. District Judge Jed Rakoff took the suit along with 17 others out of bankruptcy court to decide threshold issues presented in the Wilpon defendants' motion to dismiss. Success on Wilpon's principal theories would mean that customers of registered securities brokers could defeat fraudulent transfer suits. According to the report, the trustee is aiming to recover $300 million in what he calls fictitious profits that the Wilpon group took out of the Madoff firm before the fraud surfaced. The trustee is also seeking to take back $700 million in principal that the Wilpon defendants took from their Madoff accounts in six years before bankruptcy. The trustee's theory is based on federal and state fraudulent transfer laws where he claims that the $700 million represented money stolen from other investors and wasn't in reality the Wilpon's own investments. The trustee argues he can recover the $700 million automatically as a fraudulent transfer unless the Wilpons can prove they accepted the money in good faith. The trustee believes the Wilpons can't prove they were in good faith because they had seen numerous red flags indicating Madoff could be a fraud and didn't investigate. The Wilpons filed a motion to dismiss the suit entirely, contending there is no basis for the suit even if all the trustee's factual allegations are taken as true. According to Mr. Rochelle, in papers filed July 22, the Madoff trustee and SIPC gave Judge Rakoff their arguments attempting to explain why the Wilpons' contentions are wrong. The Wilpons argued extensively in their papers about how they were in good faith and thus immunized from the $700 million claim. In answer, the Madoff trustee and SIPC cite decisions by district judges in New York saying that the question of good faith is an affirmative defense that is premature on a motion to dismiss, where the contentions in the complaint must be taken as true. The trustee and SIPC also disagree with the Wilpons' contention that federal securities laws don't impose a duty of investigation on brokerage customers. The trustee and SIPC rebut the notion that the account statements are conclusively valid, saying they were a fiction since no securities were ever purchased. On the safe harbor defense, the trustee says the Wilpons don't qualify because payments weren't "in connection with a securities contract," given that there were in reality no securities standing behind the fictitious account statements. After the Wilpons submit another set of papers on Aug. 12, Judge Rakoff will hear oral argument from the parties in his courtroom on Aug. 19. Mr. Rochelle notes that if the Wilpons win, the other 17 lawsuits Judge Rakoff has taken under his wing may have the same result. Given that the bulk of the dismissal motion is based on securities laws applicable to brokers, success by the Wilpons would mean that customers of brokers could defeat fraudulent transfer suits when hedge fund investors in similar circumstances couldn't. However Judge Rakoff rules, the case or another similar lawsuit eventually will go to the U.S. Circuit Court of Appeals in Manhattan. Because the case raises the question of whether federal securities laws trump bankruptcy law, Mr. Rochelle says the case conceivably might end up in the U.S. Supreme Court on the perennially difficult question of whether Congress meant for one federal law to pre-empt another. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping $50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of July 15, 2011, a total of $6.88 billion in claims by investors has been allowed, with $794.9 million to be paid by the Securities Investor Protection Corp. Investors are expected to receive additional distributions from money recovered by Mr. Picard from lawsuits or settlements. BLOCKBUSTER INC: Receives $15.9 Million From Dish Escrow -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Blockbuster Inc. worked out the post-closing purchase price adjustments under the contract where parts of the business were sold to Dish Network Corp. under a contract with a $320 million sticker price. The adjustments, approved by the bankruptcy judge on July 19, mean that Blockbuster will receive $15.9 million from the $20 million that was being held in escrow. The remainder will go to Dish. The sale to Dish was completed in April. According to the report, on July 20, the bankruptcy judge authorized Blockbuster to make its one remaining employee eligible for a bonus equal to 1% of distributions made to administrative creditors and to senior secured creditors. He will also receive 0.25% of distributions made to secured creditors by July 31. The order approving the bonuses says that the bonuses can't exceed $150,000. If the Chapter 11 case is converted to a liquidation in Chapter 7, the order says that the employee will be paid any bonuses earned before conversion. In approving the bonus program, the bankruptcy judge rebuffed the objection from the U.S. Trustee who said the payments were "primarily for the benefit of the senior secured lenders who seek to expedite their distributions prior to July 31." About Blockbuster Blockbuster Inc., the movie rental chain with a library of more than 125,000 titles, along with 12 U.S. affiliates, initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan (Bankr. S.D.N.Y. Case No. 10-14997) on Sept. 23, 2010. Blockbuster began the attempted Chapter 11 reorganization in September with 5,600 stores, including 3,300 in the U.S. It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A. Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the U.S. Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. The Official Committee of Unsecured Creditors retained Cooley LLP as its counsel. In April 2011, Blockbuster conducted a bankruptcy court-sanctioned auction for all the assets. Dish Network Corp. won with an offer having a gross value of $320 million. As a result of the asset sale and Chapter 11 cases, the Company is not currently conducting any business operations. The Company expects to file a plan of liquidation with the Bankruptcy Court and anticipates that the Bankruptcy Court will approve the appointment of a Chapter 7 trustee to oversee liquidation of the Company within the next several months. Since the asset sale proceeds are significantly less than the Company's pre-petition liabilities, holders of secured and unsecured debt will receive substantially less than payment in full for their claims and its stockholders will receive no value for their shares of the Company's common and preferred stock. BORDERS GROUP: DJM to Auction 259 Borders Leases in Next 2 Months ---------------------------------------------------------------- According to Bloomberg News, Andy Graiser, co-president of DJM Realty, Borders Group, Inc.'s lease and real estate services provider, says DJM plans to auction 259 Borders leases in two separate sales, probably in August and September. About Borders Group Borders Group operates book, music and movie superstores and mall- based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. Lowenstein Sandler represents the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group has sought approval to sell merchandise and owned furniture, fixtures and equipment located at approximately 200 of their stores and, at Borders' option, up to 75 of 136 potential other stores, through store closing sales. Borders Group is closing 399 stores after proposals from Hilco and Gordon Brothers to liquidate the stores after no going concern bidders submitted alternative offers for the stores. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000 BORDERS GROUP: Books-A-Million Fails to Reach Deal to Buy Stores ---------------------------------------------------------------- Chapter11Cases.com says Books-A-Million, Inc. (NASDAQ: BAMM) announced Monday in a press release that it will [not] be acquiring the inventory, fixtures, equipment and leasehold interests for 30 Borders stores because "the parties could not agree on terms and the going out of business sales at these locations commenced." Borders Group, Inc. received bankruptcy court approval last week to have liquidators run going-out-of- business sales at all of its remaining 399 stores, but held out hope that a deal could be reached with Books-A-Million to save some of the stores from closing. According to the report, in the press release announcing that negotiations had failed, the Chairman, Chief Executive Officer and President of Books-A-Million said, "we worked exhaustively in an effort to acquire these stores and reach agreements with all of the parties whose consent was necessary. Unfortunately, we were unsuccessful." Books-A-Million operates 231 stores under the names Books-A-Million, Books & Co., and Bookland. Its stores are located in 23 states and the District of Columbia. About Borders Group Borders Group operates book, music and movie superstores and mall- based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e- commerce components. As of Feb. 11, 2011, Borders employed total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. Lowenstein Sandler represents the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed US$1.28 billion in assets and US$1.29 billion in liabilities as of Dec. 25, 2010 Borders Group has sought approval to sell merchandise and owned furniture, fixtures and equipment located at approximately 200 of their stores and, at Borders' option, up to 75 of 136 potential other stores, through store closing sales. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000) BROWN'S CHICKEN: New Owners to Open at Millennium Station --------------------------------------------------------- Lorene Yue at Chicago Business reports that Brown's Chicken & Pasta Inc. plans to open a franchise inside Millennium Station in Chicago, Illinois, in August. The restaurant chain is now owned by Pop-Grip. According to the report, Brown's Chicken filed for bankruptcy protection as the Company's owners were locked in a protracted legal battle over the worth of the restaurant chain. Frank Portillo Jr., whose brother Dick Portillo owns Portillo Restaurant Group, had fired partner and minority owner Tim Kennefick. Mr. Kennefick then tried to cash out his holdings and sued in 2007 when he felt his shares were undervalued by Mr. Portillo. The report relates that the restaurant chain was put on the auction block where Pop-Grip, a private investment firm that includes Mr. Kennefick's children, had the highest bid, $585,000. Before filing for bankruptcy, Brown's operated 38 restaurants, of which two are company-owned. The rest are franchised. The company was forced to file for Chapter 11 bankruptcy in December 2009 after a DuPage County judge ruled in favor of a former co- owner. Judge Kenneth Popejoy ruled in October 2009 that Thomas Kennefick, Brown's 37-year former vice president and minority owner, was owed $882,000 for his share in the company. Mr. Kennefick owned 36% of the company's stock, while Frank Portillo Jr., Brown's chairman and co-founder, owned 64%. CAMTECH PRECISION: Affiliate Has Until Aug. 15 to File Plan ----------------------------------------------------------- The Hon. Paul G. Hyman of the U.S. Bankruptcy Court for the Southern District of Florida extended R & J National Enterprises, Inc.'s exclusive periods to file and solicit acceptances for a proposed plan of reorganization until Aug. 15, 2011, and Oct. 17, respectively. R & J National is a debtor-affiliate of Camtech Precision Manufacturing, Inc. About Camtech Precision Jupiter, Florida-based Camtech Precision Manufacturing, Inc., filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 10-22760) on May 10, 2010. Craig I Kelley, Esq., who has an office in West Palm Beach, Florida, assists the Company in its restructuring effort. According to the schedules, the Company says that assets total $10,977,673 while debts total $14,625,066. The Company's affiliate, R&J National Enterprises, Inc., filed a separate Chapter 11 petition. CAREFREE WILLOWS: Court Denies Employment of Marquis Aurbach ------------------------------------------------------------ The Hon. Mike K. Nakagawa of the the U.S. Bankruptcy Court for the District of Nevada denied Carefree Willows, LLC's request to employ Marquis Aurbach Coffing as its special litigation counsel. As reported in the Troubled Company Reporter on April 25, 2011, MAC will represent the Debtor in an action to determine the amount of AG/ICC Willows Loan Owner, LLC's claim. The determination of the claim is important to the Debtor as the amount of debt owed to AG/ICC will be used in the Debtor's plan of reorganization. David T. Duncan, Esq. of MAC -- dduncan@maclaw.com -- disclosed that: (a) PSASP Trust, UAD 10/28/94, a revocable trust of which Phillip Aurbach is the Trustee, is a limited partner of Carefree Holdings Lill1ited Partnership; (b) MAC has provided legal services to the Debtor prepetition. As a result of providing these services, MAC is owed $552 for prepetition services that it provided, and is thus a creditor of the Debtor. MAC has agreed to waive its claim for payment of prepetition services provided to the Debtor; (c) MAC is not and was not, within two years before the commencement of this Chapter 11 case, a director, officer, or employee of the Debtor. Mr. Duncan was employed by Templeton Development Corporation (an affiliate of the Debtor) from January 1, 2007 through February 5, 2010 as Vice President of Asset Management. Mr. Duncan maintained that MAQ is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Carefree Willows LLC Carefree Willows LLC is the owner of 300-unit Carefree Senior Living in Las Vegas. Carefree Willows filed a Chapter 11 petition (Bankr. D. Nev. Case No. 10-29932) on Oct. 22, 2010. Lenard E. Schwartzer, Esq., at Schwartzer & Mcpherson Law Firm, in Las Vegas, Nevada, serves as counsel to the Debtor. The Debtor disclosed $30,604,014 in assets and $36,531,244 in liabilities as of the Chapter 11 filing. CASELLA WASTE: S&P Affirms 'B+' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Casella Waste Systems Inc. and revised the outlook to negative from positive. At the same time, Standard & Poor's raised its issue rating on the company's second-lien notes due July 2014 to 'BB' from 'BB-' and revised the recovery rating to '1' from '2' because of the assumption of a lower level of priority obligations in its default scenario. Standard & Poor's affirmed its 'B-' issue rating on the company's $200 million senior subordinated notes due February 2019. The '6' recovery rating remains unchanged. The revision of the outlook to negative from positive reflects Casella's reduced level of headroom under its financial covenants, which stems from the company's weak performance during the quarters ended January and April along with the more-restrictive financial covenant tests enacted during the refinancing of the credit facility. "The company has limited headroom under certain financial covenants, and failure to improve this could keep liquidity under pressure, which could prompt us to lower the ratings," said Standard & Poor's credit analyst James Siahaan. The total leverage ratio maximum in particular leaves little room for additional debt or weakening financials. Casella could improve the headroom levels by obtaining a waiver or amendment to the credit facility, by divesting other assets and using the proceeds to reduce debt, or by improving its operating performance. The ratings on Casella reflect a highly leveraged financial risk profile marked by high debt balances and minimal free cash generation. Casella's fair business risk profile reflects the company's participation in an industry with favorable characteristics, its competitive market positions in its regions, and its consistent profitability despite its somewhat modest scale of operations. With sales of $466 million (after the March facilities divestiture) for its 2011 fiscal year, Rutland, Vt.-based Casella is a vertically integrated provider of collection, recycling, transfer, and disposal services to residential, commercial, and industrial customers. The company operates predominantly in the northeastern U.S. and focuses on competing in secondary and tertiary markets. The affirmation of the corporate credit rating reflects Standard & Poor's opinion that Casella's management remains committed to reducing debt leverage and is likely to adhere to less aggressive financial policies. The affirmation also incorporates the expectation of improvement in pricing and volumes, along with a manageable debt maturity schedule following the company's debt repayment and refinancing. CATHOLIC CHURCH: Milw. Creditors, Abuse Survivors to Probe Clergy ----------------------------------------------------------------- Dow Jones' DBR Small Cap reports that unsecured creditors of the Archdiocese of Milwaukee and a group of abuse survivors are seeking permission to question three current and former clergy members involved in a sexual-abuse scandal, saying a probe is crucial to the resolution of the archdiocese's bankruptcy case. 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: Settles Restitution Claim vs. Former CEO ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the former operator of Charlie Brown's Steakhouse restaurants was authorized by the bankruptcy judge to accept $110,000 in criminal restitution from former Chief Executive Officer Russell D'Anton, who is now serving a prison sentence for taking kickbacks. The report relates that the Company was also authorized to sell nine more unused liquor licenses. 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. CCT COMMUNICATIONS: S.D.N.Y. Bankr. Ct. Rules on GX Contract Rift ----------------------------------------------------------------- Bankruptcy Judge Stuart M. Bernstein granted, in part, and denied, in part, a motion for partial summary judgment in a contract dispute between Global Crossing Telecommunications, Inc., and CCT Telecommunications, Inc. The parties had entered into a series of agreements under which Global Crossing agreed to provide telecommunications services to CCT, which in turn resold the services to third parties. After Global Crossing stopped providing some of the services, it commenced the adversary proceeding primarily seeking declaratory relief, and CCT counterclaimed, inter alia, for damages arising from Global Crossing's alleged breach of contract and its violations of the Federal Communications Act of 1934, as amended, 47 U.S.C. Sections 151 et seq. Global Crossing moved for partial summary judgment, presenting two questions to the Bankruptcy Court: is the limitation on liability in the parties' contract enforceable, and if it is, what is the scope of the limitation? In a July 22, 2011 Memorandum Decision and Order, Judge Bernstein held that the clause is enforceable with respect to all state law and Communications Act damage claims, and bars claims for consequential damages. The judge, however, held that whether it also bars claims for general, direct damages is unclear and must be resolved at trial. The case is Global Crossing Telecommunications, Inc., v. CCT Communications, Inc., Adv. Proc. No. 07-1942 (Bankr. S.D.N.Y.). A copy of Judge Bernstein's ruling is available at http://is.gd/qaVUWhfrom Leagle.com. In a separate order, Judge Bernstein denied Global Crossing's request to default CCT, or in the alternative, preclude it from opposing Global Crossing's motion for summary judgment on damages. On Jan. 14, 2011, Global Crossing filed the Summary Judgment Motion arguing that a clause in the parties' contract limited its liability for the damages sought by CCT in its counterclaims. CCT's counsel failed to file timely file a response. A copy of Judge Bernstein's ruling is available at http://is.gd/hLcikJfrom Leagle.com. Global Crossing is represented by: Robert J. Rosenberg, Esq. James Brandt, Esq. John D. Castiglione, Esq. Elizabeth R. Marks, Esq. LATHAM & WATKINS LLP 885 Third Avenue New York NY 10022-4834 Tel: 212-906-1370 Fax: 212-751-4864 E-mail: robert.rosenberg@lw.com james.brandt@lw.com john.castiglione@lw.com betsy.marks@lw.com - and - George Royle V, Esq. DRUMMOND WOODSUM & MacMAHON 84 Marginal Way, Suite 600 Portland, ME 04101-2480 Tel: 207-772-1941 ext. 563 Fax: 207-772-3627 E-mail: groyle@dwmlaw.com Attorneys for CCT Communications is: James A. Karamanis, Esq. ZANE D. SMITH & ASSOCIATES, LTD. 415 North LaSalle Drive, #300 Chicago, IL 60610 Tel: (312) 245-0031 Fax: (312) 245-0022 E-mail: james@zanesmith.com About CCT Communications CCT Communications, Inc., was a common carrier engaged in the business of buying and reselling telecommunications services. CCT filed a chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-10210) on Jan. 29, 2007, represented by Arnold Mitchell, Esq., at Greene Robinson Brog Leinwand Greene Genovese & Gluck, P.C., at that time. Sanford P. Rosen, Esq., at Rosen & Associates, P.C., and Glenn B. Manishin, Esq., at Duane Morris LLP, also represent the Debtor. At the time of the filing, the Debtor disclosed $774,047 in assets and debts of $1,028,249. CCT filed a Plan of Reorganization on the last possible day -- Nov. 26, 2007 -- to do so as a small business debtor. The Debtor intended to fund the plan distributions, at least in part, with the proceeds generated through adversary proceedings against Global Crossing Telecommunications, Inc., and Zone Telecom, Inc. The Honorable Stuart M. Bernstein conducted a two-day evidentiary hearing, and concluded that CCT is judicially estopped from taking the position that it is not a small business debtor. Chief Judge Bernstein ruled that the case will be dismissed, but the Court will retain jurisdiction over the adversary proceeding between CCT and Global Crossing as well as any fee applications by Court- appointed professionals. About Global Crossing Based in Hamilton, Bermuda, Global Crossing Limited (NASDAQ: GLBC) -- http://www.globalcrossing.com/-- is a global IP, Ethernet, data center and video solutions provider with the world's first integrated global IP-based network. Global Crossing Limited reported a consolidated net loss of $172 million on $2.609 billion of consolidated revenue for the twelve months ended Dec. 31, 2010, compared with a net loss of $141 million on $2.159 billion of revenue during the prior year. * * * As reported by the Troubled Company Reporter on March 31, 2010, Standard & Poor's Ratings Services raised all its ratings on Global Crossing, including the corporate credit rating to 'B' from 'B-'. The outlook is stable. S&P assigned its 'CCC+' issue-level rating and '6' recovery rating to Global Crossing's proposed $150 million of senior unsecured notes due 2019. The '6' recovery rating indicates S&P's expectation for negligible (0%-10%) recovery in the event of a payment default. The Company's balance sheet at March 31, 2011, showed $2.26 billion in total assets, $2.78 billion in total liabilities and a $525 million total shareholders' deficit. CDP CORPORATION: Bankruptcy Judge Won't Enjoin District Court ------------------------------------------------------------- Bankruptcy Judge Katharine M. Samson denied a request by Kimberly R. Lentz, the Chapter 7 Trustee for CDP Corporation, Inc., to enjoin the district court in New Orleans from proceeding on a case involving ownership of a barge. Judge Samson granted, in part, and denied, in part, the Chapter 7 Trustee's "Emergency Motion to Extend The Automatic Stay To Non-Debtor Third Party And To Stay All Proceedings In The Louisiana Eastern District Court." On Aug. 10, 2010, Equipment filed suit in the U.S. District Court for the Eastern District of Louisiana, asserting that Interstate Truck and Equipment, Inc., was in possession of a barge, which rightfully belonged to Equipment. Interstate avers that it bought Barge CGB-68017 from J.A.H. Enterprises Inc., d/b/a Henderson Auctions, which in turn bought it free and clear of all pre- existing, competing interests at an auction that was authorized by the Bankruptcy Court and conducted by Taylor Auction & Realty, Inc., on Oct. 15, 2009, in connection with CDP's bankruptcy case. Interstate levied a third-party claim against Henderson and Taylor for any damages it may incur in the Louisiana action. Taylor, in turn, made demand on the Chapter 7 Trustee for indemnification for all costs incurred and damages paid in the Louisiana action. The Chapter 7 Trustee commenced the adversary proceeding, Kimberly R. Lentz, Ch. 7 Trustee for Debtor, CDP Corporation, Inc., v. Cahaba Disaster Relief, LLC, and Equipment Leasing LLC, Adv. Proc. No. 11-05025 (Bankr. S.D. Miss.), arguing that the Bankruptcy Court retains jurisdiction to interpret and evaluate the effect of the order it entered authorizing the sale of the barge, and that the Bankruptcy Court, through various statutory and inherent powers, can and should enjoin either the Louisiana District Court or the Defendants from proceeding with the Louisiana action. Equipment argues that the question concerning the proper ownership of the barge must be decided in the Louisiana District Court, and that the Bankruptcy Court has no jurisdiction to decide the issue. According to Judge Samson, the Chapter 7 Trustee's Motion is granted to the extent that Equipment is immediately, preliminarily enjoined from further prosecution of its claims in the Louisiana action for a period of 21 days from the date of Judge Samson's Order to allow the Chapter 7 Trustee time to file motions in the Louisiana action as the Trustee deems appropriate or necessary in light of the Bankruptcy Court's opinion. The Chapter 7 Trustee's Motion is denied in all other respects. In denying the Chapter 7 Trustee's request that the Bankruptcy Court enjoin the Louisiana District Court, Judge Samson held that, "This Court cannot envision a situation in which it would attempt to enjoin a federal district court; and the Trustee has not provided any persuasive authority for such an action." A copy of Judge Samson's July 22, 2011 Memorandum Opinion and Order is available at http://www.leagle.com/xmlResult.aspx?xmldoc=In%20BCO%2020110722650 .xml&docbase=CSLWAR3-2007-CURR from Leagle.com. About CDP Corp. CDP Corporation, Inc., was in the debris removal business. CDP sought Chapter 11 protection (Bankr. S.D. Miss. Case No. 09-50745) on April 13, 2009. CDP's Chapter 11 case was converted to a Chapter 7 liquidation on July 23, 2009. Kimberly R. Lentz is the Chapter 7 Trustee appointed to administer CDP's bankruptcy case. CENVEO CORPORATION: Moody's Affirms 'B3' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service affirmed Cenveo's B3 corporate family and probability of default ratings (CFR and PDR respectively) as well as the ratings for all rated debt instruments (see listing below). The company's SGL-3 speculative grade liquidity rating (indicating adequate liquidity) remains unchanged as does the negative ratings outlook. Given the company's somewhat limited debt amortization capacity, the cost-effective and timely roll- over of December 2013 and June 2014 subordinated debt issues is a key component of the ratings assessment at this juncture. This summarizes Cenveo's ratings and rating actions: Issuer: Cenveo Corporation -- Corporate Family Rating, Affirmed at B3 -- Probability of Default Rating, Affirmed at B3 -- Senior Secured Bank Credit Facility, Affirmed at Ba3 with the LGD assessment revised to (LGD2, 15%) from (LGD2, 16%) -- Senior Secured Second Lien Notes, Affirmed at B3 (LGD3, 48%) -- Senior Unsecured Regular Bond/Debenture, Affirmed at Caa1 (LGD5, 70%) -- Senior Subordinated Regular Bond/Debenture, Affirmed at Caa2 with the LGD Assessment revised to (LGD5, 89%) from (LGD5, 88%) -- Speculative Grade Liquidity Rating, Unchanged at SGL-3 Outlook Actions: -- Outlook, Unchanged as Negative RATINGS RATIONALE Cenveo's B3 corporate family rating and probability of default ratings are a function of the company's limited debt repayment capacity and the pending need to refinance its subordinated debts before their late 2013 and mid 2014 maturity dates. A combination of market-wide and company-specific issues causes Cenveo to have very poor margins. Aggressive debt leverage compounds matters by diverting a significant +/- 60% of EBITDA to interest expense; depending on the economics of the pending sub-debt roll-over, free cash flow may erode further. As well, Cenveo has only recently committed to reducing debt and has historically depended on EBITDA growth as a means of de-levering. In addition, EBITDA growth relied on an acquisition strategy that used the elimination of redundant costs to increase EBITDA. Implementation results have been chequered with the leverage benefit of operational progress negated by asset write-downs and restructuring costs. While Moody's expects continued acquisition activity, the company's ability to access an appropriate amount of junior capital (at reasonable economic terms) over the next year or so will be a key milestone. Consequently, Moody's also expects a concerted effort to optimize refinance execution through reduced leverage, and anticipate that investments in fixed assets and working capital will be carefully managed to maximize cash flow available for debt reduction. Rating Outlook Uncertainties related to refinance activities and Cenveo's ability to access appropriate amounts of junior capital on a timely and cost-effective basis - in what will be a crowded market place - in conjunction with ongoing business risks and a still over-leveraged capital structure, cause the rating outlook to be negative. What Could Change the Rating - Up A rating upgrade is not contemplated within the rating horizon. However, among other things, Moody's would consider an upgrade or positive outlook if TD/EBITDA leverage were expected to be reduced to 6.0x or lower on a sustained basis (with Moody's standard adjustments) and positive free cash flow were expected to be sustained at approximately 5% of total debt. A rating upgrade would also have to involve assurance of solid liquidity arrangements, an absence of near-term refinance risks, improved industry fundamentals, and a somewhat stabilized business platform. What Could Change the Rating - Down Despite sub debt maturities being nearly two/three years away, Moody's thinks refinance activity is within the typical 18 month horizon of Moody's rating outlook, and the concern that the company potentially experiences difficulty in these requisite refinancing activities remains integral to the B3 rating and negative outlook. Since potential default risk increases as the refinance window shrinks, a lack of refinance progress may provide a catalyst for near term ratings actions. In addition, Moody's would consider Cenveo's ratings for potential downgrade if free cash flow generation was expected to be negative for a prolonged period and/or if TD/EBITDA was expected to be in excess of 7x on a sustained basis. A debt-financed acquisition of more than nominal size and/or adverse liquidity developments (in addition to those related to refinance matters) could also result in downward rating pressure. Company Profile Headquartered in Stamford, Connecticut, Cenveo Corporation (Cenveo), a wholly-owned subsidiary of Cenveo, Inc. (a publicly traded holding company), is involved in commercial printing and packaging, envelope, form and label manufacturing, and publishing services. Cenveo's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Cenveo's core industry and believes Cenveo's ratings are comparable to those of other issuers with similar credit risk. CLASSICSTAR LLC: Ch. 7 Trustee Settles Fraud Claims for $27 Mil. ---------------------------------------------------------------- Samuel Howard at Bankruptcy Law360 reports that James D. Lyon, the Chapter 7 trustee for ClassicStar LLC, on Friday inked $27 million in settlements with investors accusing the GeoStar Corp. subsidiary of convincing them to claim $500 million in improper tax deductions in a fraudulent mare-leasing scheme. Mr. Lyon granted five investors unsecured claims against the estate totaling $27 million in order to resolve fraud and racketeering allegations, according to Law360. About ClassicStar LLC Headquartered in Lexington, Kentucky, ClassicStar LLC operated as a thoroughbred horse breeder. The Company also leased horses and rents out the reproductive systems of select thoroughbred mares. The Company filed for Chapter 11 protection (Bankr. E.D. Ky. Case No.07-51786) on Sept. 14, 2007. Attorneys at Henry Watz Gardner Sellars & Gardner, PLLC, represented the Debtor while attorneys at Stites & Harbison, PLLC, represented the Creditors Committee. In its petition, the Debtor said assets totaled $227 million, comprised of account receivable from National Equine Lending Corp., and debts of $72.7 million. On April 14, 2008, the Court converted the case to a Chapter 7 liquidation, at the behest of the U.S. Trustee. James D. Lyon was appointed to serve as Chapter 7 Trustee. CONVERGEX HOLDINGS: Could Get Moody's Downgrade After Sale to CVC ----------------------------------------------------------------- Moody's Investors Service placed ConvergEx Holdings LLC's (ConvergEx, CFR at B1) ratings under review for possible downgrade. This action results from ConvergEx's announcement that it has signed a definitive agreement to be acquired by CVC Capital Partners. Moody's said that the acquisition of ConvergEx by CVC could result in a recapitalization of the company that could result in the company carrying significantly more debt. In its review, Moody's will focus predominantly on ConvergEx's pro-forma capital structure post-acquisition and resulting cash flow leverage (as measured by Debt/EBITDA). Moody's expects that a "change of control" provision under ConvergEx's senior secured bank facilities (first-lien at B1, second-lien at B2) will result in existing senior secured lenders debt being repaid upon consummation of the acquisition. Under this scenario, Moody's ratings of the existing senior secured bank facilities would be withdrawn upon their repayment. ConvergEx Holdings, LLC is headquartered in New York, New York. On Review for Possible Downgrade: Issuer: BNY ConvergEx Group LLC -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently a range of B2 to B1 Issuer: ConvergEx Holdings LLC -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently B1 Outlook Actions: Issuer: BNY ConvergEx Group LLC -- Outlook, Changed To Rating Under Review From Stable Issuer: ConvergEx Holdings LLC -- Outlook, Changed To Rating Under Review From Stable The principal methodology used in this rating was the Global Securities Industry Methodology published in December 2006. COOPER TIRE: S&P Affirms 'BB-' Corporate, Gives Positive Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Cooper Tire & Rubber Co. to positive from stable. The corporate credit rating and other debt ratings on the tire maker are affirmed. "We are revising our outlook to positive from stable, reflecting our view that Cooper's reduced cost structure and a gradual recovery in tire demand could support a higher rating over the next year," said Standard & Poor's credit analyst Lawrence Orlowski. "We could raise, for instance, the rating if revenues rise over 25% in 2011 because of higher volume and price, leading to a free cash flow to adjusted debt ratio of over 10%," he added. "Even though we believe that the rise in gas prices and low consumer confidence could contribute to softening tire demand in the near term in North America, we expect tire sales over the next year in this region to grow more in line with the historical trends. Also, although raw material prices remain volatile, we believe Cooper will be able to recover the majority of commodity increases though higher prices or mix," S&P related. CRYSTAL CATHEDRAL: Diocese Makes $50 Million Offer -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Roman Catholic Diocese of Orange County, California, said it submitted a $50 million cash offer to buy the property owned by Crystal Cathedral Ministries, a mega-church in Garden Grove, California. The diocese said its offer includes helping Crystal Cathedral relocate to nearby diocese-owned property. The Catholic bishop previously said the diocese has outgrown its existing Holy Family cathedral, which has 900 seats. The report relates that under procedures approved by the bankruptcy court in Santa Ana, California, bids were due July 22 in advance of an Aug. 5 auction and a hearing on Aug. 9 to approve the sale. Absent the diocese's offer, the first bid at auction would have been a $46 million sale and leaseback offer from Greenlaw Partners LLC. Chapman University made a similar $46 million proposal. About Crystal Cathedral Crystal Cathedral Ministries is a Southern California-based megachurch founded by television evangelist Robert Schuller. The church, known for its television show "The Hour of Power." Crystal Cathedral filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. 10-24771) on Oct. 18, 2010. The Debtor disclosed $72,872,165 in assets and $48,460,826 in liabilities as of the Chapter 11 filing. Marc J. Winthrop, Esq., at Winthrop Couchot P.C. represent the Debtor. Todd C. Ringstad, Esq., at Ringstad & Sanders, LLP, represents the Official Committee of Unsecured Creditors. CUMULUS MEDIA: S&P Keeps Ratings on Watch Positive -------------------------------------------------- Standard & Poor's Ratings Services announced that Cumulus Media Holdings Inc.'s decision to move $75 million from its proposed revolver to its proposed term loan does not impact any ratings. "The continued CreditWatch listing of Cumulus Media Inc. and its subsidiary Cumulus Media Holdings reflects our view that consolidated debt leverage and financial risk for the combined entity of Cumulus, Citadel, and CMP Susquehanna Radio Holdings Corp. will be meaningfully lower than at Cumulus prior to the merger," said Standard & Poor's credit analyst Jeanne Shoesmith. "The consolidated company's increased scale, geographic diversity, potentially higher pricing power, along with stronger credit metrics than premerger Cumulus, could be consistent with a 'B+' corporate credit rating." Under the terms of the proposed transaction, which the boards of both Citadel and Cumulus have approved, Citadel stockholders can elect to receive $37 in cash and 8.525 shares of Cumulus Class A common stock for each share of Citadel's common stock. The transaction values Citadel at an enterprise value of approximately $2.5 billion. In conjunction with the merger, Cumulus is acquiring the remaining equity interests in Cumulus Media Partners LLC and assuming the existing debt at CMP Susquehanna Radio Holdings Corp. The company plans to refinance all outstanding debt of Cumulus, CMP, and Citadel as part of the transaction. The combination will create a new company with a sizable presence in both large and midsize markets throughout the U.S. "We estimate that pro forma revenues (assuming no major divestitures) for the combined entity were roughly $1.2 billion as of March 31, 2011, which we believe is moderately less than revenues at the second- largest U.S. radio broadcaster, CBS Corp.," S&P said "We would likely characterize the combined entity's business risk profile as weak, because of longer-term structural risks facing the radio industry," S&P related. These risks include competition from alternative media, ad rate integrity, and obstacles to significant growth in digital contribution, which currently only accounts for 4% of total industry revenue. The consolidated company's good geographic diversity and competitive position in midsize and large markets, as well as its high EBITDA margin, do not offset these risks. "We would probably consider the combined company's financial risk profile as aggressive. Under the proposed transaction, we estimate pro forma lease-adjusted debt will be in the high-6x to low-7x area (depending on the final stock election by shareholders), compared to Cumulus' current lease-adjusted debt leverage of 7.0x on March 31, 2011. If cost synergies are included, pro forma lease-adjusted debt leverage drops to the low-6x range. For the 12 months ended March 31, 2011, Cumulus converted a healthy 43% of EBITDA to discretionary cash flow. We estimate that the combined entity would have a lower EBITDA margin than Cumulus' current margin of 32.5% as of March 31, 2011, not including the potential benefit of cost reductions. We believe that conversion of EBITDA to discretionary cash flow at the combined entity would remain healthy," S&P related. "We could raise the ratings if Cumulus completes the acquisition of Citadel," S&P said. "In concluding our CreditWatch review, we will evaluate the terms of the capital structure of the combined entity, as well as its business and financial strategies," S&P noted. DAIRY PRODUCTION: Court Clarifies Morgan Joseph Retention Order --------------------------------------------------------------- Judge James D. Walker, Jr., of the U.S. Bankruptcy Court for the Middle District of Georgia issued an order on July 5, 2011, authorizing Dairy Production Systems-Georgia LLC and its debtor- affiliates to employ Morgan Joseph TriArtisan LLC as their financial advisor and investment banker, nunc pro tunc to March 24, 2011. Judge Walker clarified that Morgan Joseph is only entitled to receive its Monthly Fees, which will be paid on a monthly basis, and is no longer automatically entitled to receive any success fee or the transaction fee described in its Engagement Letter with the Debtors. The Court held that Morgan Joseph may be entitled to the award of a Transaction Fee or success fee for cause shown. However, the firm's entitlement to receive the fees and the amount of any fee will be at the discretion of the Court. In the event that the Court determines that Morgan Joseph is entitled to receive an award of a Transaction Fee or success fee, the cap on the firm's total compensation set forth in the Engagement Letter will not automatically apply. All other terms of the Morgan Joseph Retention Order and the Engagement Letter remains in full force and effect. "This Order is without prejudice to the rights of [Agricultural Funding Solutions] or the [Official Committee of Unsecured Creditors] to object to the award of any Transaction Fee(s) or success fee(s) to Morgan Joseph," Judge Walker added. The ruling came following motions for reconsideration filed by AFS and the Creditors Committee regarding Morgan Joseph's retention. The Committee had argued that the fees and compensation under the Morgan Joseph Application were unreasonable and excessive. About Dairy Production Baconton, Georgia-based Dairy Production Systems - Georgia LLC, dba Dairy Production Systems, was formed in November of 2008 and owns the operating assets acquired from Aurora Dairy - Georgia, LLC, exclusive of the real property owned by Aurora-Georgia. DPS Georgia owns approximately 3,490 head of cattle, along with equipment and dairy improvements located on a 1,065-acre farm leased from Aurora-Georgia. DPS Georgia filed for Chapter 11 bankruptcy protection (Bankr. M.D. Ga. Case No. 10-11752) on Oct. 7, 2010. Neil C. Gordon, Esq., Sean C. Kulka, Esq., and Zachary D. Wilson, Esq., at Arnall Golden Gregory LLP, in Atlanta, Ga., serve as the Debtor's bankruptcy counsel. Morgan Joseph TriArtisan LLC serves as their financial advisor and investment banker. DPS Georgia disclosed assets of $6,178,324 and debts of $19,182,907 as of the Petition Date. Affiliates Dairy Production Systems - Mississippi, LLC (Bankr. M.D. Ga. Case No. 10-11755), Dairy Production Systems, LLC (Bankr. M.D. Ga. Case No. 10-11754), Heifer Haven, LLC (Bankr. M.D. Ga. Case No. 10-11757), and New Frontier Dairy, LLC (Bankr. M.D. Ga. Case No. 10-11756), filed separate Chapter 11 petitions. Dairy Production Systems, LLC, estimated its assets and debts at $10 million to $50 million at the Petition Date. The cases are jointly administered, with Dairy Production Systems - Georgia as lead case. Ward Stone, Jr., and David L. Bury, Jr., at Stone & Baxter, LLP, in Macon, Ga., serve as the official committee of unsecured creditors' bankruptcy counsel. DAIVAMATHA ENTERPRISES: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: Daivamatha Enterprises, LLC dba Westbrae Center 445 FM 1092, Suite 100A Stafford, TX 77477 Bankruptcy Case No.: 11-36207 Chapter 11 Petition Date: July 21, 2011 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: Reese W. Baker, Esq. BAKER & ASSOCIATES 5151 Katy Freeway, Suite 200 Houston, TX 77007 Tel: (713) 869-9200 Fax: (713) 869-9100 E-mail: courtdocs@bakerassociates.net Scheduled Assets: $3,750,000 Scheduled Debts: $3,186,419 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Thomas M. Mathew, manager DBSD N.A.: Still Fights Over $3 Million in Exit Financing Fees -------------------------------------------------------------- American Bankruptcy Institute reports that though DBSD North America Inc. has court approval for a plan transferring control to Dish Network Corp., the debtor is battling over roughly $3 million in exit financing fees from a previous bankruptcy exit plan that it abandoned. As reported in the Troubled Company Reporter on July 8, 2011, BSD North America Inc. has won confirmation of a Chapter 11 plan. The payment-in-full plan was the result of an auction where first- lien creditor Dish Network Corp. raised its offer from about $1 billion to $1.49 billion. About DBSD North America Headquartered in Reston, Virginia, DBSD North America Inc., aka ICO Member Services Inc., offers satellite communications services. It has launched a satellite, but is in the developmental stages of creating a satellite system with components in space and on earth. It presently has no revenues. The Company and nine of its affiliates filed for Chapter 11 protection on May 15, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-13061). James H.M. Sprayregen, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, in New York; and Marc J. Carmel, Esq., and Sienna R. Singer, Esq., at Kirkland & Ellis LLP, in Chicago, serve as the Debtors' counsel. Jefferies & Company is the financial advisors to the Debtors. The Garden City Group Inc. is the claims agent for the Debtors. DBSD estimated assets and debts of $500 million to $1 billion in its Chapter 11 petition. Timothy A. Barnes, Esq., and Steven J. Reisman, Esq., at Curtis, Mallet-Prevost, Colt & Mosle LLP, in New York, represent the Official Committee of Unsecured Creditors. The ad hoc committee of certain parties that hold or manage holdings of those certain 7.5% Convertible Senior Secured Notes due 2009 issued by DBSD is represented by Dennis F. Dunne, Esq., Risa M. Rosenberg, Esq., and Jeremy S. Sussman, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York; and Andrew M. Leblanc, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Washington, DC. Sprint Nextel is represented by Eric Moser, Esq., at K&L Gates LLP, in New York; and John H. Culver III, Esq., and Felton E. Parrish, Esq., at K&L Gates LLP, in Charlotte, North Carolina. DISH is represented in the case by J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in New York. DEB SHOPS: Wins Approval to Place Assets on Auction Block --------------------------------------------------------- Dow Jones' DBR Small Cap reports that a judge cleared Deb Shops Inc. to make its way to the auction block, where a debt- forgiveness offer from the retailer's senior lenders will kick off the contest for its assets. About Deb Shops Deb Shops Inc., is a closely held women's-clothing retailer based in Philadelphia. Deb Shops sells junior and large-size clothing for girls and women ages 13 to 25 through more than 320 U.S. stores and through debshops.com. It was bought out by the New York investment firm Lee Equity Partners in October 2007. DSI Holdings Inc. and 54 affiliates, including Deb Shops, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 11-11941), on June 26, 2011, to sell all assets under 11 U.S.C. Sec. 363. As of April 30, 2011, the Debtors' unaudited financial statements reflected assets totaling $124.4 million and liabilities totaling $270.1 million. Lawyers at Weil Gotshal & Manges LLP and Richards, Layton & Finger P.A. serve as bankruptcy counsel. Rothschild Inc. serves as the Debtors' investment banker and financial advisors. Sitrick & Company serves as public relations consultants. Kurtzman Carson Consultants LLC serves as their claims and noticing agent. Ableco, the DIP Agent is represented by Michael L. Tuchin, Esq., and David A. Fidler, Esq., at Klee Tuchin Bogdanoff & Stern LLP. Conway Del Genio serves as financial advisors to the First Lien Lenders. Schulte Roth serves as corporate and tax advisors to the First Lien Lenders. Another lender, Lee DSI Holdings, is represented by Jennifer Rodburg, Esq., at Fried Frank Harris Shriver & Jacobson LLP. DEUCE INVESTMENTS: Chapter 11 Reorganization Case Dismissed ----------------------------------------------------------- The Hon. Randy D. Doub of the U.S. Bankruptcy Court for the Eastern District of North Carolina dismissed the Chapter 11 case of Deuce Investments, Inc. As reported in the Troubled Company Reporter on June 30, 2011, the Debtor explained that it has no assets to administer and believes it is in the best interest of all parties for the case to be dismissed. On June 23, 2011, the Court granted Crescent State Bank relief from automatic stay on the Debtor's property. Crescent State Bank was allowed to resume its foreclosure of the property. Clayton, North Carolina-based Deuce Investments, Inc., filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.C. Case No. 10-01083) on Feb. 12, 2010. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., assisted the Company in its restructuring effort. The Company scheduled assets of $17,334,282, and total debts of $21,297,698 as of the bankruptcy filing. DHILLON PROPERTIES: Alan R. Smith Approved as Bankruptcy Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada authorized Dhillon Properties LLC to employ the Law Offices of Alan R. Smith as its counsel. As reported in the Troubled Company Reporter on April 28, 2011, Smith has agreed to: a. render legal advice with respect to the powers and duties of the Debtor that continue to operate its business and manage its properties as Debtor in possession; b. negotiate, prepare and file a plan or plans of reorganization and disclosure statements in connection with the plans, and otherwise promote the financial rehabilitation of the Debtor; c. take all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on the Debtor's behalf, the defense of any actions commenced against the Debtor, negotiations concerning all litigation in which the Debtor is or will become involved, and the evaluation and objection to claims filed against the estate; d. prepare, on behalf of the Debtor, all necessary applications, motions, 16 answers, orders, reports and papers in connection with the administration of the Debtor's estate, and appear on behalf of the Debtor at all Court hearings in connection with the Debtor's case; e. render legal advice and perform general legal services in connection with the foregoing; and f. perform all other necessary legal services in connection with the Chapter 11 case. Smith will not be paid by the Debtor, but will be paid by non- Debtor Dhillon Holdings, Inc. according to these hourly rates: Alan R. Smith $450 Contract Attorneys $350 Paraprofessionals: Peggy L. Turk $205 Merrilyn Marsh $205 Other paraprofessional services $75 to $105 The Law Offices of Alan R. Smith certified that it does not hold or represent an interest adverse to the estate and the members thereof are "disinterested persons" as the term is defined in Section 101(14) of the Bankruptcy Code. About Dhillon Properties LLC Elko, Nevada-based Dhillon Properties LLC, dba Holiday Inn Express, filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case No. 09-54640) on Dec. 31, 2009. In its schedules, the Company disclosed assets of $13,217,541, and total debts of $9,260,886. DOWNEY REGIONAL: Sees Bankruptcy Emergence in September ------------------------------------------------------- The Downey Patriot reports that Downey Regional Medical Center is aiming to exit Chapter 11 protection in September. According to the report, Rob Fuller, executive vice president and chief operations officer of Downey Regional Medical Center, said "[The Company] continued to pay a lot of debt the past two years through financial arrangements with banks, obtained invariably with difficulty, but successfully nevertheless. Although the hospital's dysfunctional financial process has had an overhaul, [The Company] still faced with a tough payment schedule." Mr. Fuller said DRMC has just borrowed an additional $56.5 million, $45 million of which is earmarked for paying off "most of very, very old debts," with the balance going to be used for working capital, notes the report. The report says Mr. Fuller estimates DRMC's working capital needs right now range from $5 million to $10 million a year. One of the conditions mandated by the U.S. Bankruptcy Court was the preparation of a viable reorganization plan. According to the report, Mr. Fuller said three inspectors from a medical accreditation group made an exhaustive audit of DRMC facilities and operations, and came away impressed with the process improvements the hospital had instituted following its crafted reorganization plan. Mr. Fuller added that a pre- inspection for DRMC's ISO 9001 certification was already performed and the inspector said he would recommend certification. About Downey Regional Downey Regional Medical Center is a 90-year-old, 199-bed, not-for- profit regional hospital and medical center in Southeast Los Angeles County, California. Regional Medical sought Chapter 11 protection (Bankr. C.D. Calif. Case No. 09-34714) on Sept. 14, 2009. Lisa Hill Fenning, Esq., at Arnold & Porter LLP in Los Angeles, represents the Debtor in its restructuring effort. In its petition, the Debtor estimated assets and debts between $10 million and $50 million. DTR TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: DTR Technologies, LLC 2525 W 6th Ave Denver, CO 80204 Bankruptcy Case No.: 11-27446 Chapter 11 Petition Date: July 22, 2011 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Michael E. Romero Debtor's Counsel: Garry R. Appel, Esq. APPEL & LUCAS, P.C. 1660 17th St., Suite 200 Denver, CO 80202 Tel: (303) 297-9800 E-mail: appelg@appellucas.com Scheduled Assets: $841,704 Scheduled Debts: $1,206,989 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cob11-27446.pdf The petition was signed by Grant Mobley, CEO/managing member. EDWARD YODER: Files for Bankruptcy to Restructure Debts ------------------------------------------------------- Edward O. Yoder sought Chapter 11 bankruptcy protection (Bankr. E.D. Va. Case No. 11-73305) on July 21, 2011). Tom Shean at the Virginian-Pilot reports that, after battling with a bank over bad real estate-development loans, Mr. Yoder, the president of Monarch Mortgage, filed in federal bankruptcy court to restructure more than $5 million of personal debts. According to the report, in his Chapter 11 filing in the Norfolk court, Edward O. Yoder included $5.25 million in claims involving Hampton Roads Bankshares Inc. and its Bank of Hampton Roads subsidiary. The Virginian-Pilot notes that as president of Monarch Bank's Monarch Mortgage unit, Mr. Yoder has managed a key source of earnings for Monarch Financial Holdings Inc., a Chesapeake-based bank holding company. Monarch Mortgage closed $1.62 billion of loans last year and generated almost two-thirds of the company's revenue for 2010. According to his bankruptcy filing, Mr. Yoder provided personal guarantees on $2.5 million of bank loans that financed the development of a residential project in Manteo, N.C. He also listed bank debts of $2 million for an unimproved lot in Manteo and $360,000 for a rental property in Kitty Hawk, N.C. The report says Bank of Hampton Roads sued Mr. Yoder, a partner and their real estate partnership two years ago to recover $2 million that the bank said Gateway Bank & Trust lent in 2006. Hampton Roads Bankshares acquired Gateway at the end of 2008 and later absorbed it into Bank of Hampton Roads. Mr. Shean relates that Mr. Yoder and Mark C. France, managing partner of the Down East Equity Partnership, agreed to use the loan to buy 10 acres and develop the property into a 41-lot subdivision, Bank of Hampton Roads said in its lawsuit. The suit, filed in Virginia Beach Circuit Court, said Gateway granted the borrowers a one-year extension for the loan in 2007. A year later, the bank granted another extension, increased the loan's size and reduced the interest rate, according to the suit. The report notes that Bank of Hampton Roads denied the allegations. The bank's suit, which had been scheduled to go to trial, was transferred to the U.S. Bankruptcy Court in Norfolk on Friday. Mr. Yoder said he was negotiating with Bank of Hampton Roads and hoped to resolve the case by moving the disputed loans elsewhere. ENDEAVOUR INT'L: Moody's Withdraws 'Caa2' Corporate Rating ---------------------------------------------------------- Moody's Investors Service has withdrawn the ratings for Endeavour International Corporation since its June offering of $250 million senior notes due 2016 was suspended for the time being due to market conditions and the company is not currently marketing those senior notes. No other Endeavour debt is currently rated. The ratings withdrawn include Endeavour's Caa2 Corporate Family Rating, Caa2 (LGD 4, 57%) rating on its proposed $250 million senior notes due 2016, and the SGL-3 Speculative Grade Liquidity Rating. The principal methodology used in rating Endeavour International Corporation was the Independent Exploration and Production (E&P) Industry published in December 2008. Endeavour International Corporation is a publicly traded independent exploration and production company headquartered in Houston, Texas. ENEA SQUARE: Can Use NUCP Cash to Pay June Invoices and Salaries ---------------------------------------------------------------- On July 7, 2011, the U.S. Bankruptcy Court for the Northern District of California entered its order approving the stipulation of secured creditor NUCP Fund I, LLC, and Debtor Enea Square Partners LP, authorizing the Debtor to use cash collateral: (a) to pay certain accounts payable totaling $67,817 for the month of June 2011, and (b) to pay salaries of five persons for the month of June 2011 not to exceed $25,000. This order relates to the Debtor's real property and improvements located at 1450 Enea Circle, 1465D Enea Circle, 1465E Enea Circle, 1485 Enea Court, and 1470 Enea Circle, in Concord, California, which are encumbered in favor of NUCP, as successor-in-interest of Comerica Bank. The revenues generated by these properties constitutes cash collateral of NUCP. As adequate protection for the month of June 2011, Debtor is authorized to immediately disburse $32,500 to NUCP. As reported in the TCR on May 24, 2011, NUCP asserts a claim amounting to $19,500,000. About Enea Square Partners Concord, California-based, Enea Square Partners, LP filed for Chapter 11 protection (Bankr. N.D. Calif. Case No. 11-44888) on May 4, 2011. Bankruptcy Judge Roger L. Efremsky presides over the case. Chris D. Kuhner, Esq., at Kornfield, Nyberg, Bendes And Kuhner, represents the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million. ENTELOS INC: Drug Test Simulator Files for Chapter 11 ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Entelos Inc., a developer of software for computer simulation of clinical trials for new drugs, filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-12329) on July 25, 2011, in Delaware, the same day the landlord of the head office was going to court in California seeking eviction. Mr. Rochelle notes that the Forest City, California-based company has a contract to sell the business to secured lender Imperium Master Fund Ltd., which is owed $8.4 million, and is the owner of all the preferred stock. If the bankruptcy judge in Delaware agrees, other bids would be due Aug. 26, followed by a Sept. 2 auction and a Sept. 8 hearing for approval of the sale. The petition says the Internal Revenue Service is owed $1.29 million, with another $289,000 owing California taxing authorities for payroll taxes. Unsecured creditors in total are owed $10 million, according to a court filing. Revenue in the first six months of 2011 was $2.6 million. Expenses in the period were $5.7 million. The Company said that the capital markets are "too stingy" to permit raising new investments. EVANS OIL: Court Amends $1-Mil. DIP Financing Order --------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida entered an amended order on the postpetition financing facility of Evans Oil Company LLC, et al., to emphasize certain lien notations. As reported under the June 16, 2011 edition of the Troubled Company Reporter, Judge David H. Adams authorized the Debtors to obtain debtor-in-possession financing from Naples Lending Group, L.C., to fund ongoing working capital needs and pay fees and expenses owed to the DIP Lender. The DIP Financing consists of a total DIP Facility of $1,000,000 secured by a first priority lien on 19 titled vehicles and a first priority lien on the 12 titled vehicles. The interest is set at a fixed rate of 7.75% per annum, payable monthly in arrears, provided that in no event will default interest exceed 24%. In no event will the payment to establish and fund the Interest Reserve payable exceed a further payment of $19,375 in addition to the $19,375 authorized under the Interim Order. The DIP Obligations will be due and payable six months after the date of the initial funding of the DIP Facility. To permit Naples Lending and General Electric Capital Corporation to perfect their respective liens as granted in the Final DIP Order by noting them on the vehicles' certificates of titles, the local tax collectors required that the Debtors obtain an amended final order adding specific provisions expressly ordering the Florida Department Of Highway Safety and Motor Vehicles to make such lien notations utilizing specific language as they have directed. The requirements are noted under the Amended DIP Order. A full-text copy of the Amended DIP Order, dated July 7, 2011, is available for free at: http://bankrupt.com/misc/EVANSOIL_amendedDIPordJul7.pdf About Evans Oil Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC, distributes bulk oil, gas, diesel and lubricant products. Evans Oil, together with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30, 2011. Attorneys at Hahn Loeser & Parks LLP as bankruptcy counsel serve as bankruptcy counsel to the Debtors. Garden City Group Inc. is the claims and notice agent. The Parkland Group Inc. is the restructuring advisor. Evans Oil estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. FIESTA RESTAURANT: Moody's Assigns 'B2' CFR; Outlook Stable ----------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Fiesta Restaurant Group's proposed $200 million guaranteed senior secured second lien notes. Moody's also assigned a B2 Corporate Family Rating and B2 Probability of Default Rating to the company. The rating outlook is stable. RATINGS RATIONALE Carrols Restaurant Group, Inc., the publicly traded ultimate parent of Fiesta, announced its intention in February 2011, to split its business into two separate, publicly traded companies through the tax-free spin-off of its Hispanic Brands to its stockholders. As per the "spin-off" transaction, Fiesta would own and operate the Pollo Tropical and Taco Cabana businesses, while Carrols would continue to own and operate its more than 300 franchised Burger King restaurants through its subsidiary, Carrols LLC ("Carrols BK"). The "spin-off" transaction is expected to be consummated by the end of 2011. As part of the contemplated transaction, Carrols is refinancing its existing debt and separately financing the Burger King and Hispanic Brand businesses ("re-financing transaction"). The proposed capital structure for Fiesta includes an un-rated $25 million first lien revolving credit facility due Feb 2016 and $200 million senior secured second lien notes due August 2016. Proceeds from the proposed senior secured second lien notes, will be distributed to the parent company, Carrols Corporation ("Carrols Corp"), to enable Carrols Corp to repurchase its outstanding 9% senior subordinated notes due 2013 and repay outstanding borrowings under the existing Carrols Corp senior credit facility. The re-financing transaction is expected to close in August, which is before the expected consummation date of the spin-off transaction. The assigned ratings are not contingent on the consummation of the "spin-off" transaction. Furthermore, the assigned ratings are subject to receipt and review of final documentation. Ratings assigned: Corporate Family Rating (CFR) at B2 Probability of Default Rating (PDR) at B2 $200 million guaranteed senior secured second lien notes due 2016 at B2 (LGD 4, 50%) The ratings outlook is stable Fiesta's B2 Corporate Family Rating reflects the company's high pro forma financial leverage and modest interest coverage, as well as its small scale relative to segment competitors. The rating also reflects the company's significant geographic concentration, niche focus on the "Hispanic/Ethnic" food category and near-term risk of management distraction due to the "spin-off" transaction. These factors are offset by the company's presence in the fast growing quick casual restaurant segment, reasonable brand awareness within its primary markets and adequate liquidity. Pro forma for the spin-off transaction and assuming that the substantial majority of the "On-balance sheet" lease financing obligations qualify for sale/leaseback accounting and are treated as operating leases, Fiesta's debt/EBITDA will likely be around 5.5 times and EBITA coverage will be 1.5 times. The stable outlook reflects Moody's view that debt protection metrics will improve gradually over the next twelve to eighteen months driven largely by earnings improvement rather than by reduction in funded debt. Moody's expects that most of Fiesta's excess cash flow will be allocated towards funding its growth through company owned restaurants. A higher rating would require sustained strengthening of the company's credit metrics and operating margins, as well as increasing scale, while improving its liquidity profile. Specifically, a higher rating would require debt/EBITDA below 5.0 times on a sustained basis and EBITA coverage of gross interest of around 2.0 times. Downward pressure on ratings could stem from a deterioration in the company's credit metrics or liquidity profile, resulting from a decline in same store sales trends, margins or free cash flow. Quantitatively, ratings could be downgraded if debt/EBITDA is sustained above 6.0 times or interest coverage on an EBITA/Interest basis remains lower than 1.25 times. The principal methodology used in rating Fiesta was Moody's Global Restaurant Industry rating methodology, published in June 2011. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website. Fiesta Restaurant Group, Inc. is an operator and franchisor of two Hispanic brand quick-casual restaurant concepts: Pollo Tropical and Taco Cabana. The company owns and operates 246 restaurants in 5 states in the United States and franchises 34 restaurants in the United States, Puerto Rico, Ecuador, Honduras, Trinidad and the Bahamas. FIESTA RESTAURANT: S&P Assigns Prelim. 'B' Corp. Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B' corporate credit rating to Syracuse, N.Y.-based Fiesta Restaurant Group Inc. The outlook is stable. "At the same time, we assigned a preliminary 'B' rating to the company's proposed $200 million second-lien secured notes. We rate the notes the same as the corporate credit rating, and assigned a preliminary '4' recovery rating to the debt, indicating our expectations of average (30%-50%) recovery of principal in the event of default," S&P said. The company intends to use the proceeds from the note issuance and funds from a new term loan issued at Carrols LLC, a subsidiary of Carrols that owns and operates approximately 300 Burger King restaurants, to pay Carrols' current debt obligations. These transactions will allow Carrols to spin off Fiesta later this year. Fiesta, at that point, will independently operate Carrols' current Hispanic brands, Pollo Tropical and Taco Cabana. "The preliminary speculative-grade rating on Fiesta reflects our expectation that the company's credit ratios will remain characteristic of a 'B' rating," said Standard & Poor's credit analyst Charles Pinson-Rose, "given its participation in the very competitive restaurant industry and our view that the company's business risk profile is weak." "Although we are forecasting better profits as a result of higher same-store sales and new unit growth, we do not expect to change our highly leveraged assessment of Fiesta's financial risk profile." FORUM HEALTH: Court to Confirm Liquidating Chapter 11 Plan ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the bankruptcy judge in Youngstown, Ohio, will sign a confirmation order approving the Chapter 11 plan for not-for- profit Forum Health, court records show. The plan was designed to pay unsecured creditors about 5% on their $167 million in claims. No secured claims remain. About Forum Health Forum Health and its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). In its petition, Forum Health estimated $100 million to $500 million in assets and debts. McDonald Hopkins LLC and Nadler, Nadler and Burdman Co., L.P.A., serve as the Debtors' chapter 11 co-counsel. Huron Consulting Services LLC is the Debtors' Chief Restructuring Officer and Financial Support Personnel. Houlihan Lokey Howard and Zukin Capital, Inc. are the Debtors' investment bankers. Ernst & Young LLP is the Debtors' independent auditor. Baker and Hostetler and Thompson Hine LLP serve as special counsel. Squire, Sanders & Dempsey LLP serve as the bond counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. Alston & Bird LLP serves as counsel to the Official Committee of Unsecured Creditors. Grant Thornton LLP is the financial advisor to the Creditors Committee. Forum Health, which operated Trumbull, Northside Medical Center and Hillside hospitals in Ohio, sold most of its assets at an auction in August 2010 to CHS Community Health Systems Inc. for $120 million. Secured bonds were paid in full from the sale. FOUNTAIN POWERBOAT: Judge Explains Scope of Stay Pending Appeal --------------------------------------------------------------- Bankruptcy Judge Randy D. Doub held that F.R.B.P. Rule 8005 limits the stay pending appeal entered by the bankruptcy court until entry of judgment by the district court on an appeal of the bankruptcy court order, judgment or decree. In the bankruptcy case of Fountain Powerboat Industries, Inc., Liberty Associates, L.C., the co-proponent of the confirmed reorganization plan, took an appeal from the Bankruptcy Court's order granting the Debtors' investment banker, Michael T. Jacobs and Jacobs Capital LLC, $370,000 in compensation and allowing the fee as an administrative claim to be paid pursuant to the terms of the confirmed Amended Plan. At the behest of John Northen, counsel for the Debtors, the Bankruptcy Court granted a stay of the Fee Order pending appeal upon the posting of a $370,000 supersedeas bond. Liberty posted the bond. On April 12, 2011, the Hon. Malcolm J. Howard, U.S. District Judge for the Eastern District of North Carolina, entered an order affirming the Fee Order. On May 11, 2011, Liberty filed its Notice of Appeal of the District Court Order to the U.S. Court of Appeals. Upon the expiration of the automatic 14-day stay of the judgment and order of the District Court under Bankruptcy Rule 8017, Jacobs informed Liberty that it intended to collect its judgment against the Bond should Liberty fail to timely pay the administrative fee awarded to Jacobs. As a result of this demand, Liberty asked the Bankruptcy Court to take any steps necessary to implement and enforce the provision of its Stay Order, including, without limitation, entering an Order specifically prohibiting Jacobs from making any demand or claim against the Bond until such time as no appeal of the Fee Order was pending. Jacobs objects, arguing that the stay pending appeal has been terminated and asserting that Bankruptcy Rule 8005 governs only the appeal from the bankruptcy court to the district court. Liberty disagrees and asserts the stay was granted and its bond posted in compliance with the Stay Order allowed under Bankruptcy Rule 8005. Since it complied with the requirements of the Stay Order and Bankruptcy Rule 8005, it argues that the stay pending appeal is therefore, effective through the entire appeals process. According to Judge Doub, the Bankruptcy Court could have fashioned its Stay Order to be effective through the entire appeals process. However, counsel for the Debtors specifically requested a stay pending the appeal. Counsel for Liberty stated at one point during the hearing that he proposed a stay pending the appeals process. The language used in the order specifically refers to the "appeal" and neither party sought to have the court reconsider its order. "Therefore, this Court holds that Bankruptcy Rule 8005 limits the stay pending appeal entered by the bankruptcy court until entry of judgment by the district court on an appeal of the bankruptcy court order, judgment or decree. This holding does not prejudice the appellant, Liberty, from seeking a stay pursuant to Bankruptcy Rule 8017(b) for its appeal from the district court to the court of appeals. By holding otherwise, this Court would be expanding the meaning of Bankruptcy Rule 8005 beyond its intended scope and encroaching upon the powers to stay a judgment of the district court which is specifically reserved to the district court under Rule 8017(b)," Judge Doub said. Although Judge Doub sided with Jacobs, he held that any effort to file a claim against the bond by Jacobs at this time is temporarily stayed for a period of 14 days from the entry of the order to permit Liberty to file a motion pursuant to Bankruptcy Rule 8017(b) for the district court to consider whether it should stay its judgment affirming the bankruptcy court order during the pendency of the appeal to the court of appeals. If no such motion is filed within the 14-day period, then the temporary stay is lifted. If such motion is timely filed, Jacobs is temporarily stayed from efforts to file a claim against the bond until such time as the District Court has issued its order as to the imposition or not, of a stay of the district court judgment affirming the order of the bankruptcy court pending the appeal to the court of appeals or posting of a bond or other security, or continuation, modification, or release of the present bond, pursuant to Bankruptcy Rule 8017(b). A copy of Judge Doub's July 22 Order is available at http://is.gd/2lUYSefrom Leagle.com. About Fountain Powerboat Fountain Powerboat Industries, Inc., Fountain Powerboats, Inc., Fountain Dealers' Factory Superstore, Inc., and Baja By Fountain, Inc., filed separate Chapter 11 petitions (Bankr. E.D.N.C. Case Nos. 09-07132, 09-07133, 09-07134 and 09-07135) on Aug. 24, 2009. On Jan. 29, 2010, the Debtors and Liberty Associates L.C. filed their First Amended Joint Plan of Reorganization. On Feb. 11, 2010, the Court entered an order confirming the First Amended Joint Plan of Reorganization. FRENCH BROAD: Court Confirms First Amended Plan ----------------------------------------------- The U.S. Bankruptcy Court for the Western District of North Carolina, on July 21, 2011, confirmed the First Amended Chapter 11 Plan of French Broad Place, LLC. A copy of the order confirming the plan and a copy of the First Amended Plan is available at: http://bankrupt.com/misc/frenchbroad,confirmationorder.pdf According to the Disclosure Statement, the Plan provides for creditors to be paid in full from the sale of units by French Broad Place. Under the Plan, Metromont Corporation, owed $2,961,431 for its DIP claim, will receive 10% per annum accrued interest for a period of 13 months, principal reduction will be paid periodically as future inventory sales close on account of Metromont's secured claim. Metromont will receive 40% of all future net sales proceeds to be applied to the principal loan balance outstanding. Ashville Savings Bank, owed $8,620,619, secured by a second lien deed of trust on the assets of the Debtor, will receive 40% of all future sales net proceeds applied to the principal loan balance outstanding on account of Ashville's impaired secured claim. Once the DIP loan is repaid 100%, then 100% of the future NSP will be paid to Ashville as loan principal reduction until paid in full with interest at the contract rate. Metromont, owed $2,765,234 secured by a third lien deed of trust, will not be paid interest or principal during the DIP loan tenure. The second deed of trust contract note will accrue interest at 5% from the date of the Plan. Once the DIP loan is repaid 10% and Ashville Savings Bank is repaid 100%, then Metromont will receive monthly interest at 5% and 100% of future NSP until repaid 100%. Ed Burdette Construction, holder a materialman's/mechanics lien in the amount of $2,627,773, will have its claim paid as a general unsecured claim. General unsecured creditors, expected to total $3,300,000, which includes the secured claim of Ed Burdette, will be paid in full over a period of three years. A copy of the Court-approved Disclosure Statement is available for free at http://bankrupt.com/misc/French_Broad_Final_DS.pdf About French Broad French Broad Place LLC was formed for the development of a 48-unit mixed used real estate community in downtown Brevard, North Carolina. The owners -- led by Scott Latell and Joshua Burdette as managing members -- have over $4,500,000 of cash equity in the development to date. Appraisals conducted in the spring of 2010 valued the property from $10,500,000 to $12,5000,000. Secured claims by lenders exceed $14,000,000. French Broad Place LLC filed for Chapter 11 bankruptcy protection (Bankr. W.D. N.C. Case No. 10-10335) on March 25, 2010. Edward C. Hay, Jr., Esq., at Pitts, Hay & Hugenschmidt, P.A., in Asheville, N.C., represents the Debtor. The Company disclosed $20,171,100 in assets and $14,395,245 in liabilities as of the Chapter 11 filing. FRENCH BROAD: DIP Loan Order Amended to Provide Definition for NSP ------------------------------------------------------------------ On July 21, 2011, with the full consent of affected parties Metromont Corporation, Asheville Savings Bank, S.S.B., Smoky Mountain Materials, Inc., and Debtor French Broad Place, LLC, the U.S. Bankruptcy Court for the Western District of North Carolina, amended its order dated Aug. 6, 2010, approving obtaining credit in the Debtor's Chapter 11 case, to provide that the definition of "net sales proceeds" and/or "net proceeds of sale", should be the same as provided in the Debtor's Chapter 11 Plan, which is as follows: "Net Sales Proceeds" means the balance remaining from the sale of a unit after payment of real estate sales commissions, applicable Chapter 11 quarterly fees, and closing costs normally borne by the seller (and specifically does not include overhead and salaries). On Aug. 6, 2010, the Court entered an Order authorizing the Debtor to obtain credit by way of a DIP loan by Metromont Corporation, on terms provided in the "DIP Financing Documents" attached to the Order, which refer to distribution to creditors of the proceeds of the sale of an individual unit after deduction of the "net proceeds of sale". The loan provides for a maximum loan amount of $2,961,431, for an initial loan term of 13 months after the closing date. About French Broad French Broad Place LLC was formed for the development of a 48-unit mixed used real estate community in downtown Brevard, North Carolina. The owners -- led by Scott Latell and Joshua Burdette as managing members -- have over $4,500,000 of cash equity in the development to date. Appraisals conducted in the spring of 2010 valued the property from $10,500,000 to $12,5000,000. Secured claims by lenders exceed $14,000,000. French Broad Place LLC filed for Chapter 11 bankruptcy protection (Bankr. W.D. N.C. Case No. 10-10335) on March 25, 2010. Edward C. Hay, Jr., Esq., at Pitts, Hay & Hugenschmidt, P.A., in Asheville, N.C., represents the Debtor. The Company disclosed $20,171,100 in assets and $14,395,245 in liabilities as of the Chapter 11 filing. GELT PROPERTIES: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Gelt Properties, LLC 2755 Philmont Avenue, Suite 130 Huntington Valley, PA 19006 Bankruptcy Case No.: 11-15826 Chapter 11 Petition Date: July 25, 2011 Court: U.S. Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Magdeline D. Coleman Debtor's Counsel: Albert A. Ciardi, III, Esq. CIARDI CIARDI & ASTIN, P.C. One Commerce Square 2005 Market Street, Suite 1930 Philadelphia, PA 19103 Tel: (215) 557-3550 Fax: (215) 557-3551 E-mail: aciardi@ciardilaw.com - and - Thomas Daniel Bielli, Esq. CIARDI CIARDI & ASTIN, P.C. One Commerce Square 2005 Market Street, Suite 1930 Philadelphia, PA 19103 Tel: (215) 557-3550 Fax: (215) 557-3551 E-mail: tbielli@ciardilaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Gelt Financial Corporation 11-15827 07/25/11 Assets: $10,000,001 to $50,000,000 Debts: $10,000,001 to $50,000,000 The petitions were signed by Uri Shoham, chief financial officer. GENEVA MULTI-FAMILY: Case Could Be Dismissed This August -------------------------------------------------------- The Hon. Dennis D. O'Brien of the U.S. Bankruptcy Court for the District of Minnesota will convene a hearing on Aug. 11, 2011 at 2:00 p.m., to determine whether the Chapter 11 case of Geneva Multi-Family Exchange Xiv, LLC, must be dismissed. Geneva Multi-Family Exchange XIV LLC owns the 336-unit Falls at Towne Crossing apartment project in Mansfield, Texas. Geneva Multi-Family Exchange XIV and affiliate The Falls at Towne Crossing, LLC, c/o Exchange Realty Inc., based in Minneapolis, Minnesota, filed separate Chapter 11 bankruptcy petitions (Bankr. D. Minn. Case Nos. 11-44562 and 11-44563) on July 5, 2011. Judge Dennis D. O'Brien presides over the case. Geneva Multi-Family Exchange XIV LLC disclosed $25.5 million in assets and $24.3 million in debts in its petition. Falls at Towne Crossing estimated assets and debts of $10 million to $50 million. The petitions were signed by Duane H. Lund, chief manager. GLOBAL CROSSING: S.D.N.Y. Bankr. Ct. Rules on CCT Contract Rift --------------------------------------------------------------- Bankruptcy Judge Stuart M. Bernstein granted, in part, and denied, in part, a motion for partial summary judgment in a contract dispute between Global Crossing Telecommunications, Inc., and CCT Telecommunications, Inc. The parties had entered into a series of agreements under which Global Crossing agreed to provide telecommunications services to CCT, which in turn resold the services to third parties. After Global Crossing stopped providing some of the services, it commenced the adversary proceeding primarily seeking declaratory relief, and CCT counterclaimed, inter alia, for damages arising from Global Crossing's alleged breach of contract and its violations of the Federal Communications Act of 1934, as amended, 47 U.S.C. Sections 151 et seq. Global Crossing moved for partial summary judgment, presenting two questions to the Bankruptcy Court: is the limitation on liability in the parties' contract enforceable, and if it is, what is the scope of the limitation? In a July 22, 2011 Memorandum Decision and Order, Judge Bernstein held that the clause is enforceable with respect to all state law and Communications Act damage claims, and bars claims for consequential damages. The judge, however, held that whether it also bars claims for general, direct damages is unclear and must be resolved at trial. The case is Global Crossing Telecommunications, Inc., v. CCT Communications, Inc., Adv. Proc. No. 07-1942 (Bankr. S.D.N.Y.). A copy of Judge Bernstein's ruling is available at http://is.gd/qaVUWhfrom Leagle.com. In a separate order, Judge Bernstein denied Global Crossing's request to default CCT, or in the alternative, preclude it from opposing Global Crossing's motion for summary judgment on damages. On Jan. 14, 2011, Global Crossing filed the Summary Judgment Motion arguing that a clause in the parties' contract limited its liability for the damages sought by CCT in its counterclaims. CCT's counsel failed to file timely file a response. A copy of Judge Bernstein's ruling is available at http://is.gd/hLcikJfrom Leagle.com. Global Crossing is represented by: Robert J. Rosenberg, Esq. James Brandt, Esq. John D. Castiglione, Esq. Elizabeth R. Marks, Esq. LATHAM & WATKINS LLP 885 Third Avenue New York NY 10022-4834 Tel: 212-906-1370 Fax: 212-751-4864 E-mail: robert.rosenberg@lw.com james.brandt@lw.com john.castiglione@lw.com betsy.marks@lw.com - and - George Royle V, Esq. DRUMMOND WOODSUM & MacMAHON 84 Marginal Way, Suite 600 Portland, ME 04101-2480 Tel: 207-772-1941 ext. 563 Fax: 207-772-3627 E-mail: groyle@dwmlaw.com Attorneys for CCT Communications is: James A. Karamanis, Esq. ZANE D. SMITH & ASSOCIATES, LTD. 415 North LaSalle Drive, #300 Chicago, IL 60610 Tel: (312) 245-0031 Fax: (312) 245-0022 E-mail: james@zanesmith.com About CCT Communications CCT Communications, Inc., was a common carrier engaged in the business of buying and reselling telecommunications services. CCT filed a chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-10210) on Jan. 29, 2007, represented by Arnold Mitchell, Esq., at Greene Robinson Brog Leinwand Greene Genovese & Gluck, P.C., at that time. Sanford P. Rosen, Esq., at Rosen & Associates, P.C., and Glenn B. Manishin, Esq., at Duane Morris LLP, also represent the Debtor. At the time of the filing, the Debtor disclosed $774,047 in assets and debts of $1,028,249. CCT filed a Plan of Reorganization on the last possible day -- Nov. 26, 2007 -- to do so as a small business debtor. The Debtor intended to fund the plan distributions, at least in part, with the proceeds generated through adversary proceedings against Global Crossing Telecommunications, Inc., and Zone Telecom, Inc. The Honorable Stuart M. Bernstein conducted a two-day evidentiary hearing, and concluded that CCT is judicially estopped from taking the position that it is not a small business debtor. Chief Judge Bernstein ruled that the case will be dismissed, but the Court will retain jurisdiction over the adversary proceeding between CCT and Global Crossing as well as any fee applications by Court- appointed professionals. About Global Crossing Based in Hamilton, Bermuda, Global Crossing Limited (NASDAQ: GLBC) -- http://www.globalcrossing.com/-- is a global IP, Ethernet, data center and video solutions provider with the world's first integrated global IP-based network. Global Crossing Limited reported a consolidated net loss of $172 million on $2.609 billion of consolidated revenue for the twelve months ended Dec. 31, 2010, compared with a net loss of $141 million on $2.159 billion of revenue during the prior year. * * * As reported by the Troubled Company Reporter on March 31, 2010, Standard & Poor's Ratings Services raised all its ratings on Global Crossing, including the corporate credit rating to 'B' from 'B-'. The outlook is stable. S&P assigned its 'CCC+' issue-level rating and '6' recovery rating to Global Crossing's proposed $150 million of senior unsecured notes due 2019. The '6' recovery rating indicates S&P's expectation for negligible (0%-10%) recovery in the event of a payment default. The Company's balance sheet at March 31, 2011, showed $2.26 billion in total assets, $2.78 billion in total liabilities and a $525 million total shareholders' deficit. GOLD HILL: Court Schedules Sept. 8 Disclosure Statement Hearing --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Carolina has scheduled a hearing for Sept. 8, 2011, at 1:30 p.m. to consider the approval of the disclosure statement explaining Gold Hill Enterprises, LLC's Plan of Reorganization, dated July 12, 2011. Aug. 31, 2011, is fixed as the last day for filing and serving, in accordance with Fed. R. Bankr. P. 3017(a), written objections to the disclosure statement. The Plan generally provides for the continuing operations of the Debtor. Other than the quarterly interest payments to Synovus Bank and necessary administrative costs and expenses, payments per the Plan are to be made as sales occur. Sales may be of any acreage or portion of acre, as determined by the needs of the buyer. However, the Debtor will not agree to any sale which is less than $60,000 per acre (excluding designated open space) without the prior consent of the Bank. The Plan designates 7 Classes of Claims and Interests. Administrative and Priority Fees and Expenses in Class 1, will be paid immediately upon approval by the Court. U.S. Trustee Fees in Class 2 will be continue to be paid on a current basis. Unsecured Priority Claims in Class 3, if there are any, will be paid as they become due. These 3 Classes are Unimpaired. Pursuant to the Plan, Synovus Bank's Class 4 Claim, with an unpaid balance of about $3,890,314, will be paid from real estate sales, with quarterly interest payments beginning the first quarter following the Effective Date of the Plan. Synovus Bank holds a mortgage secured by a first priority claim against most of the real estate assets of the Debtor (the "Synovus Real Estate"), and a second priority lien on a 5.62 acre, pad ready tract on I-77 (the "Fifth Third Parcel"), behind the disputed mortgage of Fifth Third Bank. As each sale is closed on the Synovus Real Estate, the Bank will receive 75% of the net proceeds of each sale (the "Release Payment"). Upon sale of the Fifth Third Parcel, the Bank will receive 50% of the net proceeds, which will be calculated after payment of the Debtor's legal fees and expenses incurred in connection with its objection to Fifth Third's claim and related litigation, and after payment of all closing expenses ("Fifth Third Release Payment"). Allowed Unsecured Non Priority Creditors in Class 5, which is believed to be $177,539, will be paid a portion of their allowed claims, after Class 1, 2, 3, and 4 have been paid in full. The members of this class will receive a pro rata share of net sale proceeds until all property has been sold or until the allowed claims of this class have been paid in full. Unsecured Claims in Class 5 includes disputed claims in the approximate amount of $1,048,867, including the disputed claim of Fifth Third Bank in the scheduled amount of $946,850.34. The Debtor believes that all disputed claims will be disallowed. Class 6: R. Shawn Helda and Helda Enterprises International, LLC, consists of parties who have made claims against the Debtor by virtue of their membership interest or management interest in the Debtor. After payment in full to Class 1, 2, 3, 4, and 5, the net proceeds of any sale of real estate, along with the profits of the Debtor which have accumulated after the other Classes have been paid in full, will be escrowed for payment to this class, until such time that the escrow balance is $150,000, at which time this class will be paid, collectively, a lump sum of $150,000. Upon payment of the lump sum to this class, all interests of any member of this class in the Debtor, including all interests as member or manager of the Debtor, will terminate with no further recourse to the Debtor. Helda Enterprises International, LLC, has not participated during the Chapter 11 pursuant to an agreement among the equity owners, and its equity interest in the Debtor will cease after payment as described under Class 6. A copy of the Disclosure Statement, as filed with the Court on July 12, 2011, is available at: http://bankrupt.com/misc/goldhill.DS.pdf About Gold Hill Enterprises Fort Mill, South Carolina-based Gold Hill Enterprises, LLC, dba Jennings Enterprises, was formed in 2004 for the commercial development and sale of real property in York County owned by Gold Hill. The Property is located approximately four miles north of Fort Mill, South Carolina, and 11 miles south of the central business district of Charlotte, North Carolina, in the southeastern quadrant of Gold Hill Road and Interstate I-77. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. S.C. Case No. 11-02458) on April 14, 2011. In its schedules, the Debtor disclosed $11,938,596 in total assets and $7,351,872 in total debts. Barbara George Barton, Esq., at Barton Law Firm, P.A., in Columbia, S.C., represents the Debtor as counsel. B. Bayles Mack, Esq., is special counsel in connection with real estate closings for the Debtor. The Keith Corporation is marketing and listing agent for the Debtor. The Debtor has tapped Robert Palmer & Associates as its tax accountant. GOLD HILL: Court OKs Keith Corp as Marketing & Development Agent ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Carolina has approved Gold Hill Enterprises LLC's application to employ Keith Corporation as marketing and development agent. The firm will: 1) conduct a market analysis; 2) assist in establishing sales prices; 3) market the Company's real estate; 4) represent the Company in negotiations with prospective purchasers; and 5) other marketing and development services that may be necessary and appropriate during the pendency of the Chapter 11 bankruptcy. The firm will be paid the customary fees for the services. The Debtor assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Gold Hill Enterprises Fort Mill, South Carolina-based Gold Hill Enterprises, LLC, dba Jennings Enterprises, was formed in 2004 for the commercial development and sale of real property in York County owned by Gold Hill. The Property is located approximately four miles north of Fort Mill, South Carolina, and 11 miles south of the central business district of Charlotte, North Carolina, in the southeastern quadrant of Gold Hill Road and Interstate I-77. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. S.C. Case No. 11-02458) on April 14, 2011. In its schedules, the Debtor disclosed $11,938,596 in total assets and $7,351,872 in total debts. Barbara George Barton, Esq., at Barton Law Firm, P.A., in Columbia, S.C., represents the Debtor as counsel. B. Bayles Mack, Esq., is special counsel in connection with real estate closings for the Debtor. The Debtor has tapped Robert Palmer & Associates as its tax accountant. GOLD HILL: Court OKs Robert Palmer & Associates as Tax Accountant ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Carolina has approved Gold Hill Enterprises LLC's application to employ Robert Palmer & Associates as tax accountant. As reported in the Troubled Company Report on July 6, 2011, Gold Hill has tapped Robert Palmer to assist in the preparation of all tax filings and returns required postpetition, and other accounting services that may be necessary during the pendency of the Chapter 11 case. The firm will be paid the customary fees for the services. The Debtor assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Gold Hill Enterprises Fort Mill, South Carolina-based Gold Hill Enterprises, LLC, dba Jennings Enterprises, was formed in 2004 for the commercial development and sale of real property in York County owned by Gold Hill. The Property is located approximately four miles north of Fort Mill, South Carolina, and 11 miles south of the central business district of Charlotte, North Carolina, in the southeastern quadrant of Gold Hill Road and Interstate I-77. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. S.C. Case No. 11-02458) on April 14, 2011. In its schedules, the Debtor disclosed $11,938,596 in total assets and $7,351,872 in total debts. Barbara George Barton, Esq., at Barton Law Firm, P.A., in Columbia, S.C., represents the Debtor as counsel. B. Bayles Mack, Esq., is special counsel in connection with real estate closings for the Debtor. The Keith Corporation is marketing and listing agent for the Debtor. GOLF 255: 7th Cir. Affirms Order Closing Bankruptcy Case -------------------------------------------------------- The U.S. Court of Appeals for the Seventh Circuit affirmed a lower court ruling closing the bankruptcy case of Golf 255 Inc. The golf course operator's owners, Nick Jakich and Jay Dunlap, tried to halt the closure of the case, contending that the bankruptcy court should investigate their charge of fraud against a former shareholder, Michael Kielty. Messrs. Jakich and Dunlap allege that Mr. Kielty had "contrived the involuntary bankruptcy proceedings as part of a 'fraud on the court.' Employing his knowledge and experience as an attorney, Mr. Kielty manipulated the parties and the court system to force the emergency sale of the golf course. Golf 255 was placed in bankruptcy in October 2006 after certain of its creditors, including Kielty, filed an involuntary Chapter 11 petition. The bankruptcy court granted the petition and appointed as trustee Robert Eggmann. The trustee sold the golf course to a local recreation district for $5 million. The sale closed in March 2007 and the proceeds were sufficient to pay all Golf creditors, other than insiders, claims in full, while insider creditors, who included Mr. Jakich but not Mr. Dunlap, received substantial partial satisfaction of their claims. Messrs. Dunlap and Jakich appealed from the bankruptcy judge's sale order, but the district court dismissed the appeal in June 2007 as moot because the bankruptcy judge, having approved the sale, had no authority to undo it. The Seventh Circuit called the motions and appeals filed on behalf of Messrs. Jakich and Dunlap "not only groundless but also obsessive, a form of harassment, unprofessional, and an abuse of the bankruptcy court, the district court, and [the Appeals] court" and "give new meaning to the word pertinacity." "This appeal is the culmination and we trust conclusion of an unedifying saga," Judge Posner, who penned the opinion, said. The Seventh Circuit panel consists of Circuit Judges Posner and Manion, and the Hon. Joan Humphrey Lefkow of the Northern District of Illinois, sitting by designation. A copy of the Seventh Circuit's July 22 decision is available at http://is.gd/kfWUIC from Leagle.com. * * * Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Circuit Judge Richard A. Posner in Chicago on July 22 penned an opinion about "fraud on the court." He reiterated the traditional doctrine that perjury by a lawyer is fraud on the court where perjury by a witness isn't. The distinction is significant, according to Judge Posner, because there is no time limit for a court to reconsider a ruling resulting from fraud perpetrated by a lawyer in the case. The opinion's last paragraph is vintage Judge Posner, according to Mr. Rochelle. After upholding lower court rulings, he sanctioned the losing party for taking a "frivolous appeal." Judge Posner said the losing party's multiplicity of motions were "not only groundless but also obsessive, a form of harassment, unprofessional and an abuse of the bankruptcy court, the district court, and this court. They give new meaning to the word pertinacity." The case is In re Golf 255 Inc., 10-3732, U.S. 7th Circuit Court of Appeals (Chicago). About Golf 255 Golf 255 Inc. owns the Arlington Golf Course, a 220-acre 18-hole golf course located in Granite City, Ill., near St. Louis. Golf 255 Inc.'s unsecured creditors -- Michael Kielty, M. Thompson Company P.C., Supreme Turf Product Inc., and TNT Golf Cart & Equipment Company -- sought chapter 11 protection in behalf of the company on October 12, 2006 (Bankr. S.D. Ill. Case No. 06-31728). Laura K. Grandy, Esq. at Mathis Marifian Richter and Grandy Ltd. represents the petitioning creditors. GP WEST: Gets Nod to Hire Carrasquillo as Financial Consultant -------------------------------------------------------------- GP West, Inc., obtained approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ CPA Luis R. Carrasquillo & Co. P.S.C. as its financial consultant. As reported in the July 5, 2011 edition of the Troubled Company Reporter, Carrasquillo, as financial consultant, will assist GP West in the financial restructuring of its affairs by providing advice in strategic planning and the preparation of a plan of reorganization, disclosure statement and business plan, determination of its assets, and participating in its negotiations with creditors and parties-in-interest. Carrasquillo has also been appointed as financial consultant in the Chapter 11 case of Swiss Chalet, Inc., GP West's affiliate. About GP West GP West, Inc., based in San Juan, Puerto Rico, filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 11-04954) on June 9, 2011. In its schedules, the Debtor disclosed US$13,384,251 in assets and US$132,825,590 in liabilities. The petition was signed by Jose Teixidor Mendez, president. Eduardo J. Corretjer Reyes, Esq., serves as the Debtor's attorney. GP WEST: Obtains OK to Tap Eduardo J. Corretjer Reyes as Attorney ----------------------------------------------------------------- The Hon. Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court for the District of Puerto Rico authorized GP West, Inc., to employ Eduardo J. Corretjer Reyes, Esq., as its attorney in its Chapter 11 case. Mr. Reyes is an associate at Bufete Roberto Corretjer Piquer, which served as pre-bankruptcy outside general counsel for GP West, its affiliate Swiss Chalet Inc., GP West's shareholder, Camape S.E., and GP West's director, Pedro Feliciano Benitez, according to the July 20, 2011 edition of the Troubled Company Reporter. The Court held that Mr. Reyes is a "disinterested person" and that his employment is in the best interest of the Debtor's estate. About GP West GP West, Inc., based in San Juan, Puerto Rico, filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 11-04954) on June 9, 2011. CPA Luis R. Carrasquillo & Co., P.S.C., serves as financial consultant. In its schedules, the Debtor disclosed US$13,384,251 in assets and US$132,825,590 in debts. The petition was signed by Jose Teixidor Mendez, president. GREAT CANADIAN: Moody's Assigns 'Ba2' Rating to New Revolver ------------------------------------------------------------ Moody's Investors Service assigned a Ba2 rating to Great Canadian Gaming Corporation's amended and extended C$350 million senior secured revolving credit facility due 2016. Moody's also affirmed all the existing ratings of the company, including its Ba3 Corporate Family Rating (CFR) and Probability of Default Rating (PDR), and B2 rating of the senior subordinated notes due 2015. The rating outlook is stable. Rating assigned: C$350 million senior secured revolving credit facility -- Ba2 (LGD3, 31%) Ratings affirmed: (LGD assessments revised) Corporate Family Rating -- Ba3 Probability of Default Rating -- Ba3 US$ 170 million senior secured term loan due 2014 ($163.2 million outstanding at March 31, 2011) to Ba2 (LGD3, 31%) from Ba2 (LGD2, 28%) US$170 million senior subordinated notes due 2015 to B2 (LGD5, 85%) from B2 (LGD2, 82%) Rating withdrawn: C$200 million senior secured revolving credit facility due 2012 -- Ba2 (LGD2, 28%) The amended revolving credit facility has replaced the previous undrawn C$200 million revolver that was to expire on February 14, 2012. Some terms and conditions have been modified in the amended credit agreement. The amended revolver remained undrawn at closing and the company intends to use the facility for general corporate purpose. RATINGS RATIONALE "The rating affirmation considers the solidified liquidity position due to the completion of the refinancing of the revolver as well as Great Canadian's overall stable operating performance that remains in line with Moody's expectation," commented Moody's analyst John Zhao. The ratings continue to consider the company's leading market position, eligibility for capital spending reimbursement programs in British Columbia (B.C.) and Nova Scotia, and substantial barriers to entry in the regulated Canadian gaming markets. Positive consideration is also given to Great Canadian's modest financial leverage and solid interest coverage. Moody's also expects the company to maintain very good liquidity in the near term and adhere to continued financial discipline with regards to capital expenditures, share buy-backs and acquisitions. The rating also incorporates Great Canadian's small size and limited diversification: over 50% of its consolidated cash flow currently comes from two casinos in B.C. While the company has not been immune to the economic downturn and near-term topline pressure remains, the stable rating outlook anticipates no material EBITDA erosion in the next year. Moody's expects the positive revenue trend at River Rock Casino, incremental revenue contribution from recent acquisition and cost containment initiatives will help offset the revenue decline from other properties. Further, Moody's notes the terms and conditions in the amended credit agreement will likely afford the company more flexibility to carry on future debt-financed acquisitions and other shareholder friendly initiatives including dividend and share buyback. Therefore, the stable outlook is contingent upon management adherence to a conservative financial policy. Rating upgrade is unlikely in the near to medium term, given GC's small revenue, earnings concentration and still negative topline trend. Over time, if the company is able to achieve healthy organic growth, diversify its revenue stream and maintain a conservative financial policy, leading to significant and sustained improvement in credit metrics (such as debt/EBITDA materially below 3.0x sustainably), positive rating pressures could develop. Should weak topline persist that results in eroded credit metrics and contracted liquidity, negative pressures could be exerted. A reversal to more aggressive financial policy could also negatively affect the rating and outlook. Quantitatively, negative rating pressure would develop if debt/EBITDA deteriorates to a level approaching 4.5x or EBIT/Interest nearing 2.0x on sustained basis. The principal methodology used in rating Great Canadian Gaming Corporation was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Great Canadian Gaming Corporation ("GC"), a TSX-listed company headquartered in Richmond, British Columbia, is a multi- jurisdictional gaming and entertainment operator in Canada with operations in British Columbia, Ontario and Nova Scotia. The company also operates four card rooms in the State of Washington. Ross McLeod, Chairman and Chief Executive Officer, is the largest single shareholder and controls the voting rights of approximately 17% of the outstanding shares. Revenue for the last twelve months ended March 31, 2011 was approximately C$383 million. GSC GROUP: Black Diamond Fights Rival Lenders' Bid to Enjoin Sale ----------------------------------------------------------------- Dow Jones' DBR Small Cap reports that Black Diamond Capital Management LLC is trying to fight off a rival lender group seeking to block its purchase of GSC Group Inc.'s assets from bankruptcy. As reported in the Troubled Company Reporter on July 13, 2011, Black Diamond has secured court approval to complete the acquisition of substantially all of the investment management business and related assets of GSC Group, Inc. and its affiliates. The sale follows a competitive auction process held in accordance with Section 363 of the Bankruptcy Code in October 2010, for which Black Diamond secured final approval at a hearing in the U.S. Bankruptcy Court for the Southern District of New York held on July 7, 2011. The minority lenders, which opposed the sale, took an appeal to the District Court to the ruling approving the sale. About GSC Group Florham Park, New Jersey-based GSC Group, Inc. -- http://www.gsc.com/-- is a private equity firm specializing in mezzanine and fund of fund investments. Originally named Greenwich Street Capital Partners Inc. when it was a subsidiary of Travelers Group Inc., GSC became independent in 1998 and at one time had $28 billion of assets under management. Market reverses, termination of some funds, and withdrawal of customers' investments reduced funds under management at the time of bankruptcy to $8.4 billion. GSC Group filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow, Esq., at Kaye Scholer LLP, serves as the Debtor's bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice and claims agent. Capstone Advisory Group, LLC, is the Debtor's financial advisor. The Debtor estimated its assets at $1 million to $10 million and debts at $100 million to $500 million as of the Chapter 11 filing. Since Jan. 7, 2011, the Debtors have been operated by James L. Garrity Jr., as Chapter 11 trustee for the Debtors. No committee of unsecured creditors has been appointed in the Chapter 11 Cases. HARBOUR EAST: Seeks Authority to Further Use Cash Collateral ------------------------------------------------------------ Harbour East Development, Ltd., seeks authority from the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division, to use cash collateral, rental income and defaulted purchase agreement deposits to pay operating, sales, and marketing expenses and to fund capital improvements to a luxury residential condominium development known as CIELO located at 7935 East Drive, North Bay Village, in Florida. The Debtor seeks to use three forms of cash collateral: (1) rental income received from tenants of the Condominium Units; (2) forfeited deposits relating to defaulted purchase agreements; and (3) proceeds from the sales of the Condominium Units. According to Michael L. Schuster, Esq., at Genovese Joblove & Battista, P.A., in Miami, Florida, while the Debtor continues to actively market the Condominium Units for sale, the Debtor concurrently intends to ready the Condominium Units for occupancy and offer them for lease. The Debtor, he says, has determined that it is not in the best interest of the estate to sacrifice the Condominium Units in what is essentially a "cash market," but to continue to hold them in the rental pool. Notwithstanding, in order to effectuate an effective sales and leasing program, the Debtor contends that the CIELO on the Bay Condominium Association, Inc., must be fully funded, the incomplete Condominium Units must be finished and made available for lease, and the Condominium Units must be sold at prices that will not effect a devaluation of the remainder of the Property, he adds. The Debtor has paid all Association assessments on all of the Condominium Units during the case, Mr. Schuster tells the Court. Moreover, the Debtor has completed a number of capital projects, including the build out of model units, exterior deck waterproofing, and other miscellaneous items that have materially improved the "street appeal" of the Property; and the Debtor has recently completed the dock renovation, which may create an additional source of revenue for the estate, he says. The Debtor, he adds, has also furnished two "model" Condominium Units, which have been and may be leased on a short-term seasonal basis at premium rental rates. The Debtor also made the "good faith" payment to the Dade County Taxing Authority with respect to the 2010 real estate taxes and has begun to escrow 2011 taxes, Mr. Schuster continues. The Debtor still has additional Condominium Units that can be improved and leased to create additional income, he says. The Debtor further asks that the Court authorize it to use the existing defaulted purchase agreement deposits, and future defaulted purchase agreement deposits as they become available, to complete various capital improvements to the Property, to complete Condominium Units for sale or lease, and to pay the monthly Association assessments and monthly real estate tax escrow deposits on the Condominium Units. To the extent, the Debtor is determined to be subject to 362(d)(3)(B)(i), the Debtor asks that the Court approve its discretionary designation of its October 5, 2010 payment to NBV LLC as the payment of 29 monthly Section 362(d)(3) installments otherwise due NBV. A full-text copy of the Cash Collateral Motion with the budget is available for free at http://ResearchArchives.com/t/s?768f About Harbour East Harbour East Development, Ltd., is the developer and owner of the luxury residential condominium development known as CIELO on the Bay located at 7935 East Drive, North Bay Village. CIELO contains 35 residential condominium units. Harbour East filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 10-20733) on April 22, 2010. Michael L. Schuster, Esq., who has an office in Miami, Florida, represents the Debtor. The Company estimated assets and debts at $10 million to $50 million, as of the Chapter 11 filing. Judge Cristol denied the request of 7935 NBV LLC's request to dismiss the case. HARBOUR EAST: Condo Deposits Are Subject to Lender's Mortgage ------------------------------------------------------------- Bankruptcy Judge A. Jay Cristol ruled that deposits for the purchase of condominium units at the Cielo on the Bay development are subject to the mortgage held by lender 7935 NBV, LLC. Judge Cristol said NBV's security interest in the deposits is governed by real property law, not the Florida Revised Uniform Commercial Code. The controversy stemmed from a $16.9 million loan obtained by condo developer, Harbour East Development, Ltd., from Northern Trust Bank of Florida, N.A. The Mortgage encumbers the Property, together with, among other things, all buildings, leases, rents, easements, rights, deposits, proceeds, awards, income, revenues, improvements, equipment, and fixtures thereon. In December 2009, Northern Trust sold the loan to NBV, as the designee of TMS FL 2, Inc. The Debtor does not challenge the security interest granted to Northern Trust and assigned to NBV. Rather, the Debtor contends that, by failing to file a Form UCC-1 Financing Statement or enter into a control agreement, NBV did not perfect its lien and security interest in the Deposits and therefore, as a hypothetical judgment lien creditor, the Debtor may avoid NBV's liens thereon pursuant to 11 U.S.C. Sec. 544(a). NBV, on the other hand, suggests that the Deposits made in connection with a contract for the purchase of real estate constitute proceeds of the underlying real property and are subject to the duly-recorded Mortgage and, as an interest in real estate, the Deposits fall outside the scope of the Uniform Commercial Code. NBV also posits that were the UCC applicable, it nevertheless perfected its security interest in the Deposits through constructive possession pursuant to Fla. Stat. Sec. 679.3131. Judge Cristol's ruling also indicated that, notwithstanding enactment of the Revised Florida UCC, the Court of Appeals' ruling in Aldersgate remains the controlling law of the Eleventh Circuit. In Church v. Colling (In re Aldersgate Foundation, Inc.), 878 F.2d 1326 (11th Cir. 1989), the Eleventh Circuit held that a potential buyer, in depositing earnest money, "in essence, obtain[s] the right to purchase the land." Further, the payment of the deposit presumably prevents another party from purchasing the property and therefore "[a] valuable right to the property [is] conveyed. Selling that right to purchase the property at a given price was a disposition of the collateral, and the forfeited deposits thus fall within the statutory definition of proceeds." Accordingly, deposits, including forfeited deposits, made in connection with a contract for the purchase of real estate constitute proceeds of the underlying real property and are therefore encumbered by the mortgage thereon. The case is Harbour East Development, Ltd., v. 7935 NBV, LLC and Whirlpool Corporation, Adv. Proc. No. 10-03584 (Bankr. S.D. Fla.). A copy of Judge Cristol's July 22, 2011 Order is available at http://is.gd/pb1TKHfrom Leagle.com. Harbour East Development, Ltd., is the developer and owner of the luxury residential condominium development known as Cielo on the Bay located at 7935 East Drive, North Bay Village. It filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 10-20733) on April 22, 2010. HARRISBURG, PA: City Council Rejects State Bailout Plan ------------------------------------------------------- Chapter11Cases.com reports that the Harrisburg, Pennsylvania city council rejected a state-sponsored plan to sell assets, in an effort to reduce the city's debt. Reuters' Edith Honan says that on Tuesday, July 19, the Harrisburg city council, by a vote of 4 to 3, rejected a plan -- prepared by the Novak Consulting Group -- to sell the city's incinerator, renegotiate labor deals, cut jobs, and sell or lease its parking garage. The incinerator is owned by the Harrisburg Authority, a separate municipal entity, but the city and surrounding Dauphin County guarantee much of that debt. According to Reuters, Mayor Linda Thompson must present an alternative plan to the council within two weeks. About Harrisburg, PA The city of Harrisburg is coping with debt related to a failed revamp of an incinerator. The outstanding principal on the Incinerator debt is $288 million. Total principal and interest on this debt would amount to approximately $458 million. Debt service payments on the total incinerator debt are $20 million per year. Of this total, Dauphin County, Pennsylvania, is responsible for roughly $10 million and Harrisburg is responsible for the other $10 million. The city is guarantor on 100% of the $288 million Incinerator debt. The City Council of Harrisburg, Pennsylvania, voted 5-2 on September 28 to seek professional advice on bankruptcy or state oversight. Harrisburg needed state aid to avoid default on $3.3 million of bond payments this month. The city has missed about $8 million in debt-service payments this year on bonds issued in connection with a trash-to-energy incinerator. The city owes another $40 million by the end of the year, and was sued by its home county Dauphin County; bond insurer Assured Guaranty Municipal Corp., a unit of Assured Guaranty Ltd.; and bond trustees TD Bank and M&T Bank Corp. over $19 million in skipped bond payments. HARRY & DAVID: Has Plan Exclusivity Until Nov. 30 ------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware extended Harry & David Holdings, Inc.'s exclusive periods to file and solicit acceptances for a chapter 11 plan until Sept. 30, and Nov. 30, respectively. The Court entered an order approving the disclosure statement explaining the proposed Chapter 11 plan on June 24. As reported in the Troubled Company Reporter on July 6, 2011, the Debtor modified the plan to gain support from the official unsecured creditors' committee. The modified plan provides for these terms: * Unsecured creditors are to receive 10% in total, with 40% of that coming in 2012 and 60% in 2013. * Pension Benefit Guaranty Corp. and holders of $58.2 million in senior floating-rate notes and $148.2 million in senior fixed-rate notes are in a class together. In return for their claims, they are to receive 146,000 new common shares and the right to purchase another 733,000 shares, or about 74.9%, in a $55 million rights offering. The recovery for noteholders is estimated between 2% and 17.4% for participants in the rights offering. For those not participating, the recovery is 4.2% to 10%, according to the disclosure statement. * The proceeds of the $55 million rights offering will be used to repay the $55 million in second-lien financing for the Chapter 11 case. Noteholders are backstopping the rights offering. As a fee, they will receive 50,000 shares. * Existing lenders providing $100 million in first-lien financing for the bankruptcy case will continue the loan when the company emerges from Chapter 11. The original plan was agreed to before bankruptcy with holders of 81% of the senior notes, including Wasserstein & Co., which also owns 63% of the stock. Wells Fargo Bank is indenture trustee for the noteholders. Plan Supplement BankruptcyData.com reports that Harry & David Holdings filed with the U.S. Bankruptcy Court a Supplement for the Company's Second Amended Joint Plan of Reorganization. According to Law360, the Supplement contains the following documents: certificate of incorporation of reorganized holdings; by-laws of reorganized Holdings; management services agreement; schedule of executory contracts and unexpired leases anticipated to be assumed; escrow agreement governing the escrow account; exit facility commencement letter; preserved causes of action by the Debtors and reorganized Debtors and obligations to indemnify directors, officers and employees. 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. David G. Heiman, Esq., Brad B. Erens, Esq., and Timothy W. Hoffman, Esq., at Jones Day, are the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., Paul Noble Heath, Esq., and Zachary Shapiro, Esq., at Richards Layton & Finger, serve as the Debtors' local 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. 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. On April 7, 2011, the U.S. Trustee appointed an official committee of unsecured creditors in the Debtors' cases. HEARUSA INC: Siemens Unit Submits $98-Mil. Competing Offer ---------------------------------------------------------- HearUSA Inc. received a $97.57 million competing bid from Audiology Distribution, LLC, an affiliate of Siemens Hearing Instruments Inc., the principal supplier and primary secured lender. HearUSA is scheduled to auction the business on July 29. HearUSA already had an $80 million offer in hand from William Demant Holdings A/S. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that according to court papers, the $97.57 million Siemens bid includes a swap for $30.7 million on Siemens' secured claim, the financing for the Chapter 11 case, and the waiver of a $37.24 million claim from termination of a supply agreement. If outbid, Demant, based in Denmark, is to receive a $2 million breakup fee. The hearing to approve the winner of the auction is set for Aug. 1. 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. 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. ISOLA USA: S&P Assigns 'B' Corporate Credit Rating -------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Chandler, Ariz.-based printed circuit board (PCB) laminate supplier Isola USA Corp. "At the same time, we assigned our 'B' issue-level rating and a recovery rating of '3' to the senior secured facility, consisting of a $225 million first-lien term loan. The '3' recovery rating indicates expectations for meaningful (50%-70%) recovery of principal in the event of default," S&P related. "We expect Isola to continue its modest improvement in revenues and profitability in line with healthy industry fundamentals and its improved cost structure," said Standard & Poor's credit analyst Joseph Spence, "allowing the company to maintain a business and financial risk profile consistent with its 'B' category ratings." JACK IN THE BOX: Moody's Cuts CFR to B1; Ratings to be Withdrawn ---------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating (CFR) of Jack-in-the-Box Inc. to B1 from Ba3. In addition, Moody's lowered the senior secured ratings of Jack-in-the-Box to B1 from Ba3 and its Probability of Default Rating (PDR) to B2 from B1. The outlook is stable. Subsequently, Moody's will withdraw all of its ratings for Jack-in-the-Box. RATINGS RATIONALE "The ratings downgrade reflects Moody's view that debt protection metrics will not materially improve over the intermediate term as soft consumer spending and a persistently high level of promotional continue to negatively impact operating performance " stated Bill Fahy, Senior Analyst at Moody's. For the twelve month period ending April 17, 2011, leverage was high at about 5.4 times while interest coverage was modest at approximately 1.8 times. "However, the B1 CFR also incorporates Jack-in-the-Box's strong brand recognition, meaningful scale, and good liquidity" stated Fahy. Moody's Investors Service will withdraw the credit ratings for its own business reasons. Please refer to Moody's Investors Service Withdrawal Policy, which can be found on Moody's website, www.moodys.com. Ratings downgraded are: Corporate Family Rating lowered to B1 from Ba3 Probability of Default Rating lowered to B2 from B1 $400 million senior secured revolver due 2015, lowered to B1 (LGD 3, 36%) from Ba3 (LGD 3, 38%) $200 million senior secured term loan due 2015, lowered to B1 (LGD 3, 36%) from Ba3 (LGD 3, 38%) The outlook is stable. The stable outlook reflects Moody's view that the B1 CFR sufficiently captures the credit risk given the expected level of debt protection metrics and liquidity. The principal methodology used in rating Jack-in-the-Box was Moody's Global Restaurant Industry Methodology, published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. The last rating action on Jack-in-the-Box occurred on December 5, 2006, when Moody's downgraded the company's Corporate Family and senior secured ratings to Ba3 from Ba2 and it Probability of Default Rating to B1 from Ba3. The outlook was stable. Jack in the Box, Inc. operates or franchises 2,220 quick-service hamburger restaurants predominantly in California and Texas, as well as in the Southeast. The company also operates or franchises 549 fast-casual Qdoba Mexican Grill restaurants. Annual revenue is approximately $2.26 billion. JACKSON HEWITT: Wants Immediate Plan Consummation ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Jackson Hewitt Tax Service Inc. filed papers asking the bankruptcy judge to permit implementation of the prepackaged reorganization plan immediately following the Aug. 8 confirmation hearing. The confirmation hearing for approval of the plan, originally set for July 8, was pushed back one month at the request of the official committee of unsecured creditors. The plan gives nothing to unsecured creditors. Mr. Rochelle notes that bankruptcy rules ordinarily impose a 14- day waiting period after a plan is confirmed and before it can be implemented. The rule gives the judge an ability to waive the waiting period. Jackson Hewitt says that a two-week delay would "further jeopardize" the company's "ability to properly prepare for the upcoming tax season." About Jackson Hewitt 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. BDO Financial serves as financial advisors to the Official Committee of Unsecured Creditors. 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. But the unsecured creditors won an extra month to investigate the company's prepackaged reorganization plan and secured resources for the effort after a judge refused to place a hard cap on attorneys' fees. JACKSON HEWITT: Committee Wins OK to Hire Counsel, Fin'l Advisor ---------------------------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court approved Jackson-Hewitt Tax Service's official committee of unsecured creditors' motions to retain Duane Morris as counsel and BDO Consulting as financial advisor. About Jackson Hewitt 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. JEFFERSON COUNTY: Rep. Moore Says Sewer Transactions Illegal ------------------------------------------------------------ Joseph D. Bryant at the Birmingham News reports that Rep. Mary Moore, D-Birmingham, held a press conference in Kelly Ingram Park, where she presented evidence she said shows the initial sewer bond transactions were illegally done because they were not signed by all members of the County Commission. Rep. Moore presented research from the Legislative Reference Service that cites Section 11-1-16 in the Code of Alabama 1975 and a court case as evidence. "Based on the above, it is our opinion that all members, including the presiding officer of a county commission, are required to sign warrants under Title 11 of the Code of Alabama 1975, for borrowing purposes," a letter from a legislative analyst concludes. Rep. Moore said she likened the actions of the commission and a potential Chapter 9 bankruptcy filing to throwing the residents of Jefferson County on top of a bonfire and letting them burn. Meeting Thursday The Jefferson County Commission will hold a special meeting on Thursday in Birmingham, Alabama, to decide whether to continue trying to work out a deal with creditors or file bankruptcy over a sewer system debt of more than $3 billion. The county has submitted a repayment plan to creditors including JPMorgan Chase to eliminate almost $1.3 billion of the debt, but it's yet to get a response. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. Jefferson County is trying to restructure $3.2 billion in sewer debt. A bankruptcy by Jefferson County stands to be the largest municipal bankruptcy in U.S. history. It could beat the record of $1.7 billion set by Orange County, California in 1994. In September 2010, Alabama Circuit Court Judge Albert Johnson named John S. Young Jr. LLC as receiver for the sewer system. JEFFERSON COUNTY: Voting on Bankruptcy Filing, Alternatives ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Jefferson County, Alabama, commissioners gave notice that the agenda for their July 28 meeting will include voting for a municipal bankruptcy filing in Chapter 9. The agenda also includes alternatives, including voting for a settlement or extending the standstill agreement with lenders that ends the next day. The commissioners also may vote on retaining the Los Angeles law firm Klee Tuchin Bogdanoff & Stern LLP to represent the county in the event of bankruptcy. According to the report, Jefferson Country is interviewing law firms to hire should a bankruptcy filing under Chapter 9 of U.S. bankruptcy code become necessary. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. Jefferson County is trying to restructure $3.2 billion in sewer debt. A bankruptcy by Jefferson County stands to be the largest municipal bankruptcy in U.S. history. It could beat the record of $1.7 billion set by Orange County, California in 1994. In September 2010, Alabama Circuit Court Judge Albert Johnson named John S. Young Jr. LLC as receiver for the sewer system. JNL FUNDING: Court Confirms Amended Reorganization Plan ------------------------------------------------------- Judge Alan S. Trust of the U.S. Bankruptcy Court for the Eastern District of New York has confirmed the Amended Joint Plan of Organization of Debtors JNL Funding Corp. and Joseph G. Forgione; the Consolidated Official Committee of Unsecured Creditors in the Debtors' cases; and Textron Financial Corporation, individually as a lender and as agent for itself and TD Bank, N.A., also a lender. As reported by the Troubled Company Reporter, the Plan provides that JNL will establish a liquidating trust. The Plan offers general unsecured creditors the opportunity to obtain approximately 10% distribution of their allowed claims in installments over not more than four years from the effective date of the Plan. No distribution would likely be available to unsecured creditors in a Chapter 7 liquidation of JNL, and a distribution substantially less than that proposed in the Plan would be likely to unsecured creditors in a Chapter 7 liquidation of Forgione. The Plan avoids significant potential litigation against many of the unsecured creditors. A full-text copy of the Second Amended Disclosure Statement explaining the Amended Plan is available for free at: http://ResearchArchives.com/t/s?7625 About JNL Funding JNL Funding Corp. is a specialized real estate finance company which originates and invests in a diversified portfolio of first mortgage assets in the residential real estate market. JNL is a "hard money" lender investing primarily in real estate related first mortgages and construction loans, making loans secured by first priority mortgages primarily on single family and multi- family residential real properties. JNL's loans typically are made to real estate investors seeking to purchase and renovate properties for investment purposes. Most of JNL's loans are made to repeat customers who have multiple loans from JNL at any given time. JNL's recent loans typically bear interest at the rate of 14% per annum, and JNL typically receives four (4.0) percentage points for originating the loan. JNL Funding filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 10-73724) on May 14, 2010. Pryor & Mandelup, LLP, assists the Debtor in its restructuring effort. The Company estimated its assets and debts at $50 million to $100 million as of the Chapter 11 filing. JNL also disclosed that its combined general unsecured debts total $19,509,090, for total debts of $50,677,195. On June 8, 2010, the United States Trustee appointed an Official Committee of Unsecured Creditors. The Court approved the Joint Administration of JNL's case and Joseph Forgione's case (Bankr. E.D.N.Y. Case No. 10-73726) on October 27, 2010. Mr. Forgione filed for bankruptcy on May 14, 2010. On Oct. 28, 2010, the U.S. Trustee appointed a creditors committee in the jointly administered cases. Counsel for the Committee is: Richard G. Gertler, Esq. THALER & GERTLER LLP 90 Merrick Avenue, Suite 400 East Meadow, NY 11554 Telephone: (516) 228-3553 [ http://gertlerlawgroup.com/] Counsel for secured lender Textron Financial Corp.: Steven E. Fox, Esq. EPSTEIN BECKER & GREEN P.C. 250 Park Avenue, 11th Flr New York, NY 10177-121 Telephone: (212) 351-3733 Facsimile: (212) 878-8688 E-mail: SFox@ebglaw.com KEELEY AND GRABANSKI: Chapter 11 Trustee Wants Case Converted ------------------------------------------------------------- Kip Kaler, as Chapter 11 trustee in the bankruptcy case of Keeley and Grabanski Land Partnership, asks the U.S. Bankruptcy Court for the District Of North Dakota to convert the Debtor's Chapter 11 case of to one under Chapter 7 of the Bankruptcy Code. The trustee alleges that there is substantial and continuing loss or diminution of the estate; an absence of reasonable likelihood of rehabilitation, gross mismanagement of the Debtor prior to the filing of the case; and inability to confirm a plan of reorganization. About Keeley and Grabanski Thomas Grabanski, a North Dakota farmer, is mired in three separate Chapter 11 bankruptcy cases. Mr. Grabanski and his wife Mari filed a personal Chapter 11 bankruptcy petition (Bankr. D. N.D. Case No. 10-30902) on July 22, 2010. DeWayne Johnston, Esq., at Johnston Law Office, represents the Grabanskis in their Chapter 11 case. The Grabanskis estimated assets between $1 million and $10 million, and debts between $10 million and $50 million. On July 23, 2010, Mr. Grabanski signed a Chapter 11 petition for Grabanski Grain LLC (Bankr. D. N.D. Case No. 10-30924). DeWayne Johnston, Esq., also represents Grabanski Grain. The Debtor is estimated to have assets and debts of $1,000,001 to $10,000,000. Former owners in December 2010 forced the partnership Keeley & Grabanski Land Partnership in Texas into Chapter 11. John and Dawn Keely, the former owners, filed an involuntary Chapter 11 bankruptcy petition against the partnership (Bankr. D. N.D. Case No. 10-31482) on Dec. 6, 2010. Kenneth Corey-Edstrom, Esq., at Larkin Hoffman Daly & Lindgren Ltd., represents the petitioner. Keeley & Grabanski Land Partnership in Texas -- since 2009 doing business as Grabanski Land Partnership -- was formed in 2007 for Texas farming operations between farmers Thomas Grabanski and John Keeley of Grafton, N.D., and their wives. K&G Land, along with a separate farming partnership, operated more than 10,000 acres of corn and sunflowers from 2007 to 2009 in two locations in Texas near the towns of Blossom and DeKalb. In separate, related lawsuits, the Grabanskis face several "adversarial" lawsuits, filed by certain creditors. The creditors who filed suits include Crops Production Services Corp., AgCountry Farm Credit Services, and PHI Financial. KOBRA EFS: Court Denies Plea to Extend Schedules Deadline ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of California denied a request by Kobra EFS, LLC, et al. to extend the deadline to file schedules of summary of assets and liabilities, and financial affairs. The Court said the Debtor must do the best it can with schedules timely filed and then supplement the schedules and promptly upon developing more complete information as part of the Debtors' continuing duty to assure that statements and schedules are accurate. The Court reminded the Debtors that failure in Chapter 11 case to timely to file schedules and statements may be cause to order to appointment of a trustee. In its request for an extension, the Debtors related that they had insufficient time to prepare appropriate filings or pay the appropriate fees. The lender who held a foreclosure sale of debtor-affiliate Stoneview Office LLC's assets on June 20, 2011, brought an emergency motion for relief from the automatic stay in order to be allowed to record the deeds of trust after the sales. On June 30, 2011, the Court heard arguments and testimony pertaining to the lender's motion, and found, inter alia, that the petitions were filed before the sales were concluded and the automatic stay was in effect, thereby voiding the respective sales. Due to uncertainty of the status of the bankruptcy petitions, the associated schedules, and payments of fees were delayed pending the Court's determination. About Kobra EFS and Fairway Commons II Kobra EFS, in Roseville, California, filed for Chapter 11 bankruptcy (Bankr. E.D. Calif. Case No. 11-35250) on June 20, 2011. Affiliates that also sought Chapter 11 protection are Fairway Commons II, LLC (Case No. 11-35255) and Eureka Ridge, LLC (Case No. 11-35256). Judge Christopher M. Klein presides over the case. Paul A. Warner, Esq., serves as the Debtors' bankruptcy counsel. Kobra EFS and Fairway Commons II separately estimated $10 million to $50 million in both assets and debts. LEHMAN BROTHERS: Parties Agree to Hold Rival Plans in Abeyance -------------------------------------------------------------- Lehman Brothers Holdings Inc. obtained a court order to suspend the prosecution of the rival Chapter 11 plans of reorganization proposed by its creditors. In an order dated July 21, 2011, Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York approved an agreement between the company and certain of its creditors to hold in abeyance the prosecution of the competing plans. The agreement was hammered out after LBHI filed late last month a third version of its plan, which reportedly has broader support from its creditors including a group led by Goldman Sachs Bank USA and the ad hoc group of Lehman Brothers creditors. The plan, if confirmed, would enable the company and its affiliated debtors to pay an estimated $65 billion to their creditors. The July 21 order also imposed a stay on any ongoing proceeding authorized by Judge Peck's prior ruling dated April 14, 2011, in connection with the confirmation of LBHI's plan. It also contains a provision protecting the rights of any party to seek discovery. The provision was proposed lately by LBHI after creditors including American National Insurance Company, Lehman Brothers Finance AG's liquidator and Centerbridge Credit Advisors LLC stressed the need to conduct a plan-related discovery to ensure that all claimants are treated fairly. Centerbridge complained that the Lehman plan weighs in favor of creditors that have executed so-called plan support agreements. It argued that the plan disregards a prior court order mandating the allowance and treatment of claims previously owned by Lehman Brothers Bankhaus AG, which are now beneficially owned by Centerbridge and other companies. Judge Peck issued early last year an order, which granted LB Bankhaus $1.015 billion in allowed general unsecured claim against Lehman Commercial Paper Inc. and more than $1.38 billion in allowed general unsecured claim against LBHI. An earlier version of the disclosure statement describing LBHI's plan called for the treatment of the two claims as general unsecured claims. Under the new plan, however, the two claims receive "worse" treatment, according to Centerbridge. Centerbridge and others purchased claims against LBHI and Lehman Commercial Paper Inc. that resulted from the settlement with LB Bankhaus, Bloomberg News related. "Where outsiders recover 19.9 percent against the holding company, the Bankhaus claim only gets 15.2 percent. At Lehman Commercial Paper, the Bankhaus claim sees 52.1 percent when outsiders take home 55.7 percent," the report noted. The plan represents "horse-trading" that favoured "vocal objectors" and ended up "siphoning value away from other creditors," the Financial Times quoted papers Centerbridge filed in court. Meanwhile, the Official Committee of Unsecured Creditors and the ad hoc group expressed their support for the approval of the agreement to suspend the prosecution of the competing plans. The Creditors' Committee said the agreement is a precondition to the plan support agreements, which are essential to the plan process. 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 Trustee Appeals $1.1-Bil. Award for Barclays ----------------------------------------------------------------- James W. Giddens, the trustee overseeing the liquidation of Lehman Brothers Holdings Inc.'s brokerage, is appealing Judge Peck's ruling that awarded Barclays Plc about $1.1 billion as part of its purchase of the company's North American business in 2008. Earlier, Judge Peck ordered the trustee to return $1.1 billion to the U.K. bank, which consists of "clearance box" assets held to facilitate the clearance of securities trading. The trustee was also told to return $769 million in additional assets in case they were not needed for customers and after all customer claims were paid. Meanwhile, the bankruptcy judge ordered Barclays to return $2.054 billion in margin assets to the trustee and to pay 5% interest. In an appeal filed with the U.S. District Court for the Southern District of New York, the LBI Trustee said he wanted payment of 9% interest on the margin assets. The trustee is also appealing the denial of his claim to the clearance box assets and some aspects of the July 15, 2011 order resolving his revised complaint against Barclays and Barclays Capital Inc. Copies of the July 15 order and revised complaint are available without charge at: http://bankrupt.com/misc/LBHI_OrdResolveLBIComplaint071511.pdf http://bankrupt.com/misc/LBHI_LBIAmendedComplaint071511.pdf Mr. Giddens said he would have been content to let the matter rest but filed an appeal because Barclays had already done so, according to a July 22, 2011 report by Reuters. "The trustee had hoped to avoid protracted litigation," Mr. Giddens said in a statement, but "since the appeal process is already underway, and with the trustee's...duty to maximize assets available for distribution to public customers and others, the trustee is also appealing the denial of his claim to the clearance box assets." The move came a week after Barclays appealed other aspects of the ruling, most of which were favorable to the trustee. The dispute between the trustee and Barclays, which stemmed from the latter's acquisition of LBHI's businesses and subsequent profit on them, led to a bankruptcy court trial in 2010. It continued after a February ruling, which required Barclays to pay or return any cash it had taken in the deal, did not specify how Barclays and the brokerage must divide some components of the assets held to back trades taken over by the U.K. bank with the purchase. After Judge Peck's February ruling, Barclays argued that it was entitled to non-cash margin that it needed to support trading operations it acquired from Lehman. The trustee was reportedly holding about $1 billion in non-cash margin, consisting of government securities with maturities of three months to more than 15 years. About one-fourth of another pool of $879 million in margin assets was not cash, which was reportedly in the hands of third-party brokers or Lehman affiliates. 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: Proposes to Settle State Street's $850-Mil. Claim ------------------------------------------------------------------ Lehman Brothers Holdings Inc. and Lehman Commercial Paper Inc. seek court approval of an agreement to settle the claims of State Street Bank and Trust Company. The deal settles State Street Bank's $425 million claim against each of the Lehman units, which stemmed from their 2007 repurchase agreement. The Debtors allegedly failed to make payments to the bank in violation of the terms of the repurchase agreement. Under the proposed settlement, each of State Street Bank's claims will be reduced to $400 million and will be allowed as general, unsecured, non-priority claims. The settlement requires LCPI to either purchase the loan provided to ProLogis NA3 III LP under a 2007 loan agreement for $67.5 million in cash, or to cause ProLogis to discharge the loan by paying the same amount to State Street Bank. The loan was one of the assets transferred to State Street Bank under the repurchase agreement. The current amount outstanding under the loan is approximately $82.85 million. The proposed settlement also requires State Street Bank to drop the lawsuit it brought against the Lehman units in connection with its claims and calls for the mutual release of all claims arising under the repurchase agreement. The settlement is formalized in an eight-page agreement, a full- text copy of which is available without charge at: http://bankrupt.com/misc/LBHI_DealSSB.pdf In connection with the settlement, State Street has executed an agreement to support the confirmation of LBHI's Chapter 11 plan of reorganization and the approval of the accompanying disclosure statement, according to LBHI's lawyer, Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York. A hearing will be held on August 17, 2011, to consider approval of the settlement. The deadline for filing objections is August 10, 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: NJDT Appeals D&O Payment in FINRA Award -------------------------------------------------------- The New Jersey Department of Treasury took an appeal to the U.S. District Court for the Southern District of New York from Judge Peck's July 21, 2011 decision lifting the automatic stay to allow Zurich American Insurance Company and other insurance companies to pay a $15 million award issued by the Financial Industry Regulatory Authority against former employees and officers of Lehman Brothers Holdings Inc. in connection with the securities claim that US Airways Inc. filed before the regulator. Judge James Peck has granted a motion to lift the automatic stay to allow Lehman Brothers Holdings Inc.'s insurance providers to pay a $15 million award issued against its former employees and officers. In a decision dated July 21, 2011, the bankruptcy judge ordered the lifting of the stay to allow Zurich American Insurance Company and other insurance companies to pay the award issued by the Financial Industry Regulatory Authority in connection with the securities claim that US Airways Inc. filed before the regulator. Earlier, the New Jersey Department of Treasury sought a court order to junk the motion, arguing that Lehman's insurance policies are not sufficient to pay all litigation claims. The Treasury expressed concern that only those who have reached a final judgment before other claimants would receive the full benefit of the insurance policies. It also argued that the proceeds of the insurance policies must be held until the body of potential claims is assessed and those who have valid claims are allowed to ratably share those proceeds. The former officers and employees, which drew support both from LBHI and US Airways, countered that the FINRA award is a final and binding adjudication that is not appealable. They also argued that the bankruptcy judge handed down similar decisions in the past but none of them drew opposition from the Treasury. 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: $1.34 Billion Already Paid to Advisors ------------------------------------------------------- Lehman Brothers Holdings Inc. disclosed these cash receipts and disbursements of the company, its affiliated debtors and other controlled entities for the month ended June 30, 2011: Beginning Total Cash & Investments (06/01/11) $23,497,000,000 Total Sources of Cash 1,595,000,000 Total Uses of Cash (685,000,000) FX Fluctuation (2,000,000) --------------- Ending Total Cash & Investments (06/30/11) $24,409,000,000 LBHI reported $3.762 billion in cash and investments as of June 1, 2011, and $3.796 billion as of June 30, 2011. The monthly operating report also showed that a total of $27,500,000 was paid last month to the U.S Trustee and professionals that were retained in the Debtors' Chapter 11 cases. From September 15, 2008 to June 30, 2011, a total of $1,344,592,000 was paid to the U.S. Trustee and professionals, of which $451,148,000 was paid to the Debtors' turnaround manager, Alvarez & Marsal LLC, while $318,933,000 was paid to their bankruptcy counsel, Weil Gotshal & Manges LLP. A full-text copy of the June 2011 Operating Report is available for free at http://bankrupt.com/misc/LehmanMORJune3011.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) LEVEL 3: S&P Affirms 'B-' Corporate Credit Rating ------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on Broomfield, Colo.-based Level 3 Communications Inc. as well as certain issue-level ratings and removed those ratings from CreditWatch. "On April 11, 2011, we placed the secured debt ratings on CreditWatch with developing implications; all other ratings were placed on CreditWatch with positive implications on that date. The rating outlook is positive," S&P related. Ratings on unsecured debt at subsidiaries Level 3 Financing Inc. and Level 3 Escrow Inc. remain on CreditWatch with positive implications. "Our affirmations of the 'B-' corporate credit rating on Level 3 and certain issue-level ratings reflect our view that, while the pending Global Crossing acquisition will improve Level 3's overall financial risk profile," said Standard & Poor's credit analyst Richard Siderman, "the magnitude and timing of this improvement will not be sufficient to warrant an upgrade of the company when the transaction closes later this year." "The ratings outlook on Level 3 is now positive (it was stable prior to the CreditWatch listing related to the Global Crossing announcement), indicating that we would consider an upgrade over the medium term if we believed Level 3 was on track to successfully integrate the Global Crossing acquisition and likely to realize a substantial portion of the company's anticipated approximately $300 million of eventual annual operating synergies," S&P stated. "Our affirmation of the 'B+' rating on the company's senior secured debt (which had been on CreditWatch Developing) reflects our current view that, even if Level 3 incurred the maximum amount of secured debt allowed under current debt covenants (which could include a drawdown of the $650 million secured debt portion of committed bridge facilities), the recovery rating would not weaken from the current '1', which denotes our expectation of very high (90% to 100%) recovery of principal in the event of a default. At the same time, we maintained the ratings on unsecured debt at subsidiaries Level 3 Financing Inc. and Level 3 Escrow Inc. on CreditWatch Positive. Depending on how much secured debt is incurred for the Global Crossing transaction, recovery prospects for unsecured debt at Level 3 Financing and Level 3 Escrow could improve to '5' from '6' and result in an upgrade for those issues," S&P related. LEVELLAND/HOCKLEY: Committee Taps XRoads as Financial Advisor ------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Levelland/Hockley County Ethanol LLC asks the U.S. Bankruptcy Court for the Northern District of Texas for permission to retain XRoads Solutions Group, LLC as financial advisor. XRoads will: a. review and analyze operating results and uses of cash by the Debtor; b. review and analyze the proposed tolling agreement with Tenaska Biofuels, LLC; c. review and analyze any proposed asset sales and divestitures; and d. advise the Committee and the Committee's counsel regarding any proposed business plan, and any negotiations relating thereto. Subject to Court approval, compensation will be payable to XRoads on an hourly basis, capped at a maximum of $50,000 for services rendered during the retention period, plus reimbursement of actual, necessary expenses incurred by XRoads. The hourly rates for principals at XRoads are $550 to $655, and for directors, $395 to $485. Notwithstanding XRoads' standard hourly rates, XRoads agreed to accept the reduced rates and capped its total fees earned during the retention period at $50,000, as an accommodation to the Committee and parties-in-interest in the case. The primary advisors who represented the Committee, and their reduced hourly rates were: Pete Ball, principal $350 Adam Meislik, principal $350 Joe Rosen, director $315 XRoads states that the reduced rates and proposed cap are not applicable to other engagements or bankruptcy cases. To the best of the Committee's knowledge, XRoads is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. No hearing will be conducted unless a written response is filed with the clerk of the U.S. Bankruptcy Court by Aug. 1, 2011. About Levelland Ethanol Levelland/Hockley County Ethanol LLC is a Texas limited liability company that owns and operates a 40 million gallon per annum Ethanol production plant located in Levelland, Hockley county, Texas. The LLC has over 100 members many of whom are local farmers, business people and civic leaders. A recent appraisal Of its facility values its assets, with the Plant under full operation, at over $51.5 million. Levelland Ethanol filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 11-50162) on April 27, 2011. The Debtor is represented by I. Richard Levy at Block & Garden, LLP, in Dallas. The Debtor disclosed total assets of $60,451,124 and total liabilities of $47,557,432 in its schedules. On May 9, 2011, William T. Neary, U.S. Trustee for Region 6, appointed unsecured creditors to the Official Committee of Unsecured Creditors in the Debtor's cases. Haynes and Boone, LLP, represents the Committee. LIPENWALD INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Lipenwald, Inc. 22 South Smith Street Norwalk, CT 06855 Bankruptcy Case No.: 11-51484 Chapter 11 Petition Date: July 22, 2011 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: James G. Verrillo, Esq. ZEISLER AND ZEISLER 558 Clinton Avenue P.O. Box 3186 Bridgeport, CT 06605 Tel: (203) 368-4234 Fax: (203) 367-9678 E-mail: jverrillo@zeislaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ctb11-51484.pdf The petition was signed by Charles Lipset, president. LOS ANGELES DODGERS: Court OKs Epiq as Claims & Noticing Agent -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Los Angeles Dodgers LLC, et al., to employ Epiq Bankruptcy Solutions LLC as official claims, noticing, and balloting agent. As reported in the Troubled Company Reporter on July 13, 2011, according to the Debtors, the appointment of the firm will expedite the distribution of notices and relieve the clerk's office of the administrative burden of processing the notices. The Debtors said that the proposed rates to be charge by the firm are reasonable and appropriate for services of this nature. The Debtors assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About 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. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection, according to The Wall Street Journal. LOS ANGELES DODGERS: Meeting of Creditors Scheduled for Aug. 17 --------------------------------------------------------------- The U.S. Trustee for Region 3 will convene a meeting of creditors in Los Angeles Dodgers LLC, et al.'s Chapter 11 case on Aug. 17, 2011, at 10:00 a.m. (Eastern Time). The meeting will be held at J. Caleb Boggs Federal Building, 844 King Street, 5th Floor, Room 5209, Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. 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. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection, according to The Wall Street Journal. LOS ANGELES DODGERS: Court Rules MLB Loan Superior to Highbridge ---------------------------------------------------------------- U.S. Bankruptcy Court for the District of Delaware Judge Kevin Gross denied Friday final approval of Los Angeles Dodgers' proposed $150 million of DIP financing from Highbridge Senior Loan Fund II or its affiliates, citing that it fails to meet the requirements of Bankruptcy Code Section 364. Chapter11Cases.com reports that Major League Baseball had objected to the proposed financing facility, arguing that it was willing and able to lend the funds to the Dodgers on significantly better terms but that the Dodgers "flatly refused to negotiate" with MLB. Chapter11Cases also reports that the United States Trustee and the Official Committee of Unsecured Creditors also objected to the DIP facility, but the Creditors' Committee withdrew its objection when Highbridge agreed to lower the interest rate by one percent (from LIBOR plus 7.00% to LIBOR plus 6.00%) and remove its proposed lien on avoidance actions. The court had determined that application of section 364(b) of the Bankruptcy Code "explicitly precludes" approval of the loan (which was to be secured by a lien on all of the Debtors' assets) where MLB is "ready, anxious and able to provide unsecured financing and has committed to do whatever it takes to do just that," the report states. The court goes on to show in a chart the "substantial economic superiority" of the loan offered by MLB over the proposed loan from Highbridge. Chapter11Cases.com reports that among the DIP terms highlighted in that chart are: A) Fees -- Highbridge: 0.50% delayed draw fee; $4.5 million deferred commitment fee; $5.25 million closing commitment fee; and $50,000 annual agent fee -- MLB: none B) Interest Rate -- Highbridge: LIBOR plus 6.00% (with a LIBOR floor of 3.00%); Base Rate plus 6.00% -- MLB: LIBOR plus 5.50% (with a LIBOR floor of 1.50%); Base Rate plus 4.50% C) Security -- Highbridge: lien on all estate assets -- MLB: unsecured D) Priority -- Highbridge: super-priority administrative -- MLB: administrative E) Maturity Date -- Highbridge: June 27, 2012 (before Fox Sports' right of first negotiation) -- Nov. 30, 2012 (after Fox Sports' right of first negotiation) Judge Gross then expressly states that "[t]he Court will insure that Baseball honors its commitment" to provide financing on economically superior terms. The order also states that the loan from MLB "must be independent of and uncoupled from Baseball's oversight and governance of the Dodgers under the Major League Baseball Constitution." He also expressly ordered the Dodgers to "negotiate with Baseball cooperatively and in good faith." Dodgers Softens on MLB Loan In a press release issued by the Dodgers after the order was entered, a representative of the team stated that the Court ruling places the Dodgers in a position to achieve a debtor-in-possession financing from Major League Baseball, under the Court's control, that is both economically favorable and consistent with the Dodgers' objective of maximizing the value of the estate in the Chapter 11 process. . . . From the Dodgers' perspective, a short form unsecured credit agreement with MLB, when combined with other sources of revenues, should provide the Dodgers with ample liquidity to meet team payroll and other expenses, as the Dodgers proceed forward with their business plan, with the objective of emerging from the Chapter 11 process before the end of 2011. 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. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Thomas Lauria, Esq., at White & Case, represents MLB. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection, according to The Wall Street Journal. MACCO PROPERTIES: Seeks Dismissal of Chapter 11 Case ---------------------------------------------------- Brianna Bailey at The Journal Record reports that Macco Properties Inc. is seeking dismissal of its Chapter 11 case. Macco is fighting in U.S. Bankruptcy Court to regain control of its $131 million real estate empire that stretches across Oklahoma and Kansas. As reported in the July 20, 2011 edition of the TCR, the bankruptcy court named Receivership Services Corp., a division of the Martens Cos., as property manager for the six Wichita apartment complexes caught up in the bankruptcy of Macco Properties. The complexes, with a combined 1,952 units, are Cedar Lakes, the Chalet, Holly Park, Madison Park, River Park and Villa Del Mar. About Macco Properties Oklahoma City, Oklahoma-based Macco Properties, Inc., filed for Chapter 11 bankruptcy protection (Bankr. W.D. Okla. Case No. 10- 16682) on Nov. 2, 2010. G. Rudy Hiersche, Jr., Esq., at the Hiersche Law Firm, serves as the Debtor's bankruptcy counsel. The Debtor disclosed $50,823,581 in total assets, and $4,323,034 in total liabilities. The Official Unsecured Creditors' Committee is represented by Ruston C. Welch, at Welch Law Firm, P.C., in Oklahoma City, Oklahoma. MARKET STREET: Court OKs Harold Asher as Forensic Accountant ------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Louisiana has approved Market Street Properties LLC's application to employ Harold A. Asher, CPA, LLC, as forensic accountant. The forensic accountant has not received a retainer for services to be rendered to the Debtors. The Debtors need the forensic accountant to prosecute certain claims of the estate in connection with Adv. Pro. No. 11-1003 pending before the Court. The services to be provided include (i) investigatory accounting services; (ii) advice on the accounting aspects of the litigation matters, and (iii) other forensic accounting services as requested or required. The hourly rates of the forensic accountant and its employees are: Mr. Asher $400 Jeffrey Meyers $225 Staff $100 - $120 The Debtor will also compensate the forensic accountant for court appearances at $800 for the first hour, and $400 for additional time. 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. About Market Street Properties Oceanside, New York-based Market Street Properties, L.L.C., owns an approximately 500,000 square-foot power plant, two substations, and three parcels of vacant land. It filed for Chapter 11 bankruptcy (Bankr. E.D. La. Case No. 09-14172) on Dec. 23, 2009, represented by Christopher T. Caplinger, Esq., Joseph Patrick Briggett, Esq., and Stewart F. Peck, Esq., at LUGENBUHL WHEATON PECK RANKIN & HUBBARD, in New Orleans. The Company disclosed $52,404,026 in assets and $26,848,596 in liabilities as of the Chapter 11 filing. Cupkovic Architecture LLC serves as the Debtor's architect; and Patrick J. Gros, CPA, as accountant. James E. Fitzmorris, Jr. serves as political consultant and advisor. No trustee or examiner has been appointed in the case. MAULDING DEVELOPMENT: C.D. Ill. Strict on E-Filing Policy --------------------------------------------------------- Bankruptcy Judge Mary P. Gorman denied First Commercial Bank of Florida's motion for rehearing of a Feb. 8, 2011 court order. That Order struck the claim filed on behalf of First Commercial Bank in Maulding Development LLC's bankruptcy case because the claim was paper filed when it should have been electronically filed and because neither First Commercial Bank nor its attorney responded to the Court's Order to Show Cause regarding the paper filing. According to Judge Gorman, the Motion for Rehearing and subsequent documents filed by First Commercial Bank, however, fail to establish grounds for vacating the Order striking the claim. Judge Gorman said FCB's attorney ignored the Court's mandatory electronic filing policy. The bank's counsel could have applied to be admitted to practice in the District and could have obtained a login and password for filing in the District. Alternatively, without being admitted, he could have applied for a limited login and password to ensure his ability to, at least, file a claim. On its schedules, the Debtor listed First Commercial Bank of Florida as an unsecured creditor with a claim for $13,913,827. The Debtor expressly identified the claim as contingent, unliquidated, and disputed. A copy of Judge Gorman's July 20, 2011 Opinion is available at http://is.gd/SV2kI1from Leagle.com. About Maulding Development Springfield, Illinois-based Maulding Development LLC filed for Chapter 11 bankruptcy protection (Bankr. C.D. Ill. Case No. 10-72715) on Aug. 31, 2010. James R. Enlow, Esq., in Springfield, assists the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $10 million to $50 million. MCS ADVANTAGE: Moody's Affirms Sr. Secured Debt Rating at 'B2' -------------------------------------------------------------- Moody's Investors Service has affirmed Medical Card System, Inc.'s (MCS, senior secured debt at B2) credit ratings and changed the outlook to negative from stable. RATINGS RATIONALE Moody's said that the change in outlook reflects the possible termination of MCS's Medicaid contracts in Puerto Rico and the uncertainty around the resolution of the dispute over funds owed to the company by the Puerto Rico Heath Administration, as well as the potential impact on the company's operations from any adverse publicity. MCS is a privately-owned company incorporated and headquartered in Puerto Rico. Through its three insurance operating subsidiaries, the company offers Medicare, Medicaid and commercial healthcare coverage and products to the residents of Puerto Rico. According to the rating agency, the company's contracts with the MiSalud (Medicaid program in Puerto Rico) program currently account for approximately 43% of the company's premium revenue. Citing a number of financial pressures on this business--recently awarded to MCS after a bidding process--including increased utilization and low reimbursement rates, MCS notified the administrator of MiSalud that unless new reimbursement rates could be agreed to for the new contract period beginning July 1st, it was terminating its contracts with MiSalud effective June 30, 2011. Moody's noted that despite MCS's large and profitable Medicare segment, the loss of the Medicaid business would have a negative impact on the company's revenue and earnings diversity. In addition, the company would be excluded from the growth opportunity expected from the expansion of this segment in 2014 under healthcare reform. It is also unclear how this dispute with the government might damage the reputation of MCS with the provider community and members. The rating agency added that the difference between what MCS claims it is owed and the amount the government states it owes amounts to approximately $64 million, which is significant if it could not be recouped by MCS. Moody's stated that if MCS's Medicaid contracts are terminated or if MCS is unable to recoup the funds it claims it is owed, the ratings could be downgraded. Additionally, Moody's stated that the ratings could be lowered if there were a loss of Medicare membership of 10% or more in any year, if the company's consolidated RBC ratio falls below 50% of company action level, or if net margins fall below 1% . Moody's noted that there is unlikely to be upward ratings movement until the issues surrounding the Medicaid contract are settled; however, the outlook could be changed back to stable if MCS resolves the financial issues with MiSalud and renews its Medicaid contracts without suffering reputational damage. These ratings were affirmed with a negative outlook: Medical Card System, Inc. -- B2 senior secured debt rating; B2 corporate family rating; MCS Advantage, Inc. -- Ba2 insurance financial strength rating. The principal methodology used in rating Medical Card System was Moody's Rating Methodology for U.S. Health Insurance Companies published in May 2011. Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. Medical Card System, Inc. is headquartered in San Juan, Puerto Rico. For the full calendar year 2010 MCS reported total revenues of approximately $2 billion. Medical membership as of December 31, 2010 was approximately 1.1 million members (excluding Medicare Part D stand alone membership). Moody's insurance financial strength ratings (IFSR) are opinions about the ability of insurance companies to punctually pay senior policyholder claims and obligations. MERIT GROUP: To Complete Sale of All Assets Next Month ------------------------------------------------------ The U.S. Bankruptcy Court for the District of South Carolina held June 21, 2011, the hearing to consider the sale of The Merit Group Inc.'s the assets to MG Distribution, LLC or to the winning bidder. According to the Debtors' case docket, the order is due on Aug. 1, 2011, from the Debtors' counsel. Pursuant to the asset purchase agreement, MG Distribution, the stalking horse bidder, offered a cash consideration of $46 million and assumption of certain liabilities for substantially all of the Debtors' assets. As reported in the Troubled Company Reporter on July 18, the Court authorized a junior lender to bid debt at the July 20 auction for the Debtor's assets despite protests from unsecured creditors who want the lender's claims redefined as equity. The Debtors are indebted to Regions Bank for certain prepetition loans and a postpetition financing agreement in the approximate amount of $53,500,000, secured by a first priority lien and security interest in all of the Debtors' real and personal property, including inventory and accounts. The Debtors are also indebted to Stonehendge Oppurtunity Fund, II, L.P. in the amount of $11,956,565, secured by a second priority lien and security interest in all of the Debtors' real and personal property, including inventory and accounts. The successful bidder at the auction is required to consummate the purchase of the assets by 11:59 p.m. (Eastern Time) on Aug. 12. The back-up bidder is required to consummate the sale by Sept. 1. The Debtor also sought authority to extend the time to assume and reject certain unexpired non-residential real property leases for cause, until Dec. 13. Morgan Joseph assisted the Debtors in marketing the assets. U.S. Trustee's Objection The U.S. Trustee objected to the Debtor's sale motion explaining that: 1. The Debtors are seeking to sell substantially all their assets prior to confirmation of a plan of reorganization. While pre-confirmation sales have been allowed prior to confirmation, the debtors have the burden of proving: (a) a sound business reason or emergency justifies the preconfirmation sale; (b) the sale has been proposed in good faith; (c) adequate and reasonable notice of the sale has been provided to interested parties; and (4) the purchase price is fair and reasonable. Based on prior evidence submitted in this case, it is doubtful the debtors can meet this burden. 2. If the Debtors had filed a liquidating plan, it would have been accompanied by a disclosure statement including adequate information to all creditors and parties in interest. Normally included in the disclosure statement is a listing of the Debtors' assets, a classification of the debtor's creditors and the proposed distribution to each class, a discussion of claims and causes of action the debtor may have, a discussion of the Debtors' financial history and why the proposed plan is in the creditors' best interests, and similar information. 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, and Alvarez & Marsal North America, LLC, as financial advisors. Merit Group disclosed 7,004,048 in assets and $66,609,946 in liabilities as of the Chapter 11 filing. 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. The Committee is represented by Cole, Schotz, Meisel, Forman & Leonard, P.A. The Committee tapped McCarthy Law Firm LLC as co-counsel, J.H. Cohn LLP as its financial advisor. METROPARK USA: Has Buyer for Trademarks at $175,000 --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Metropark USA Inc. finally has a buyer for the trademarks and trade names. Metropark was authorized a few days after the Chapter 11 filing to hire liquidators who sold the inventory in going-out-of-business sales. In late May, the bankruptcy judge in White Plains, New York, authorized holding an auction to sell the intellectual property. With no buyer emerging until now, the auction was adjourned until Aug. 2. The report relates that Metropark has a contract for Strato Trading Group Inc. to buy the trademarks and intellectual property for $175,000. To protect the buyer if outbid, Metropark is proposing $17,500 in breakup fees and expense reimbursement for Strato. About Metropark USA Metropark USA, Inc. -- http://www.metroparkusa.com/-- is a Los Angeles retail chain with 70 stores in 21 states. Metropark was founded in 2004 to capitalize on the large Gen Y segment (the 25- 35 year old customer) in demand for fashion-forward apparel and accessories. Its headquarters, distribution centers, and e- commerce site located in Los Angeles, California. Metropark filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 11-22866) on April 26, 2011. Cathy Hershcopf, Esq., Jeffrey L. Cohen, Esq., and Alex R. Velinsky, Esq., at Cooley LLP, in New York, serve as the Debtor's bankruptcy counsel. CRG Partners Group, LLC, is the Debtor's financial advisor. The Debtor also tapped Great American Group Real Estate, LLC doing business as GA Keen Realty Advisors as special real estate advisor. The Debtor disclosed total assets of $28,933,805 and total debts of $28,697,006 as of April 2, 2011. Blakeley & Blakeley LLP represents the Official Committee of Unsecured Creditors. MID-ATLANTIC MULTI-SPECIALTY: Meeting to Form Committee Friday -------------------------------------------------------------- Roberta DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on July 29, 2011, at 1:30 p.m. in the bankruptcy case of Mid-Atlantic Multi-Specialty Surgical Group, LLC. The meeting will be held at: United States Trustee's Office One Newark Center 1085 Raymond Blvd. 21st Floor, Room 2106 Newark, NJ 07102 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Mid-Atlantic Multi-Specialty Surgical Group, LLC, filed a Chapter 11 petition (Bankr. D. N.J. Case No. 11-31350) on July 18, 2011. The Debtor estimated assets and debts under $1 million. See http://bankrupt.com/misc/njb11-31350.pdf MILTON EVANS: Dist. Ct. Dismisses Suit v. Mercedes Benz Financial ----------------------------------------------------------------- District Judge Avern Cohn dismissed a consumer rights case against Mercedes Benz Financial Services, Inc. Milton Evans, proceeding pro se, filed the complaint asserting a claim under the Fair Credit Reporting Act, 15 U.S.C. Sec. 1681 et seq. and various tort related claims. MBFS sought dismissal, saying Mr. Evans has not stated a plausible claim under the FCRA. MBFS provides consumers with credit financing for the lease and retail purchase of Mercedes-Benz vehicles. Mr. Evans entered into a Retail Installment Contract for the purchase of a 2001 Mercedes-Benz S Class Sedan, which MBFS financed. MBFS was listed as a secured creditor on Mr. Evan's petition, which showed the amount of the claim at $2,500. The case is Milton Evans, v. Mercedes Benz Financial Services, LLC, Case No. 11-11450 (E.D. Mich.). A copy of the Court's July 21, 2011 Memorandum and Order is available at http://www.leagle.com/xmlResult.aspx?xmldoc=In%20FDCO%202011072292 5.xml&docbase=CSLWAR3-2007-CURR from Leagle.com. Milton Evans filed a Chapter 7 bankruptcy petition (Bankr. S.D. Ga. 09-_____) on Jan. 19, 2009. The bankruptcy was later converted to a Chapter 11 case. On May 3, 2011, Mr. Evans' bankruptcy was discharged. MITEL NETWORKS: Moody's Affirms B3 Corporate; Outlook Stable ------------------------------------------------------------ Moody's Investors Service affirmed Mitel Networks Corporation's B3 corporate family rating and B3 probability of default rating as well as all instrument ratings. Moody's expects that recent debt reduction will continue and result in somewhat improved leverage and coverage measures which will provide Mitel with enhanced prospects of an orderly and cost-effective roll-over of its debts, an activity Moody's presumes will be initiated shortly given the August 2012 maturity of the company's revolving credit facility. While term debts mature in 2014 and 2015, it is likely that a comprehensive refinance is required given the inter-relationships between various facilities. A refinance will also obviate financial covenant compliance issues as thresholds become more stringent starting in January, 2012. Pending the refinance, the impending erosion of the company's financial covenant compliance cushions caused Mitel's speculative grade liquidity rating to be changed to SGL-3 from SGL-2 (to adequate from good). Since the company's free cash generation and debt repayment activities should minimize refinance risks, the outlook remains stable. The following summarizes Mitel's ratings and rating actions: Issuer: Mitel Networks Corporation -- Corporate Family Rating, Affirmed at B3 -- Probability of Default Rating, Affirmed at B3 -- Outlook, Unchanged at Stable -- Speculative Grade Liquidity Rating, Changed to SGL-3 from SGL-2 -- Senior Secured First Lien Bank Credit Facility, Affirmed at B1 with the LGD Assessment revised to (LGD2, 25%) from B1 (LGD2, 29%) -- Senior Secured Second Lien Bank Credit Facility, Affirmed at Caa1 with the LGD Assessment revised to (LGD5, 70%) from Caa1 (LGD5, 78%) RATINGS RATIONALE Mitel's B3 corporate family rating (CFR) is driven primarily by Moody's perception of vulnerability to competition resulting from its relatively small aggregate scale and from margin performance that does not suggest a strongly positioned niche telecommunication equipment/services offering. As well, neither the company nor its competitors report measures that can be used to interpret supply/demand balance or market positioning, and the opacity of the company's relative positioning is credit-negative. This is somewhat compounded as recent performance is difficult to interpret given discontinuities in recent financial statements. The strongest support for Mitel's B3 CFR stems from its ability to generate free cash flow. With post-IPO interest expense having been reduced and with only nominal capital expenditure requirements, Mitel has the ability to be cash flow positive and to gradually pay-down debt. Management's commitment to reduce debt is a key to the rating. The company's ability and willingness to reduce debt also provides confidence that pending refinance activities can be addressed (Mitel's revolving credit facility matures in 2012 with term loans maturing in 2014 and 2015). Rating Outlook Confidence that underlying debt reduction activities will facilitate a refinance allows the outlook to be stable despite deteriorating liquidity arrangements. What Could Change the Rating -- Up Should Adjusted Debt/EBITDA be expected to be sustained below 4.5x with free cash flow (FCF) being sustained above 5% of Debt, consideration for positive outlook and ratings actions would occur (solid liquidity arrangements would be a pre-requisite). What Could Change the Rating -- Down The ratings may be subject to downwards migration should free cash flow generation return to break-even or negative, or should adverse liquidity developments occur. In particular, should refinance arrangement become unmanageable, adverse rating actions are likely. The principal methodology used in rating Mitel Networks Corporation was the Global Communications Equipment Industry Methodology published in June 2008. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009 (and/or) the Government-Related Issuers methodology published in July 2010. Based in Ottawa, Ontario, Mitel Networks Corporation (Mitel) provides integrated communications hardware and software for small and medium sized businesses primarily in the United States and Canada. MUMTAZ HANNA GEORGE: Court Cites Flaws in Plan Outline ------------------------------------------------------ Bankruptcy Judge Thomas J. Tucker declined to grant preliminary approval of the Third Amended Combined Plan and Disclosure Statement filed by Mumtaz Hanna George on July 13, 2011, citing problems in the disclosure statement that the Debtor must correct. The Debtor was to file an amended combined plan and disclosure statement which corrects the problems no later than July 18, 2011. A copy of the Court's July 15, 2011 Order is available at http://is.gd/POdha2from Leagle.com. Mumtaz Hanna George in Farmington Hills, Michigan, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 10-72383) on Oct. 22, 2010, represented by Ethan D. Dunn, Esq. -- bankruptcy@maxwelldunnlaw.com -- at Maxwell Dunn, PLC. In the petition, the Debtor estimated $1 million to $10 million in assets and debts. NALCO COMPANY: Fitch Places 'B+' IDR on Rating Watch Positive ------------------------------------------------------------- Fitch Ratings has placed Nalco Company's Issuer Default Ratings of 'B+' on Rating Watch Positive. Ecolab Inc. and Nalco announced that Ecolab will acquire Nalco for $5.4 billion equity consideration and $2.7 billion assumed net debt. The resulting transaction value is approximately $8.1 billion or 10.9x Nalco's LTM ending March 31, 2011 operating EBITDA of $740 million. Closing of the transaction is expected in the fourth quarter of 2011. Ecolab intends to issue approximately 68.9 million Ecolab shares valued at $3.8 billion and to use $1.6 billion cash to fund the transaction. The Ratings Watch Positive incorporates Fitch's expectations that Ecolab and Nalco combined will benefit from a sizeable and diversified specialty chemical product portfolio with pro forma combined 2010 revenues of $10.3 billion. Together, both entities will have leading positions in many markets for industrial and institutional cleaning products as well as integrated water treatment and processing chemicals and solutions. Fitch expects that the combined entity will have a stronger credit profile than Nalco on a standalone basis. The resulting pro forma gross balance sheet leverage is expected to remain manageable at approximately 2.9x, based on Ecolab's existing debt of $1.2 billion, Nalco's existing debt of $2.8 billion and up to $1.6 billion of new debt to fund the acquisition. Pro forma combined operating EBITDA is approximately $1.9 billion. Nalco's standalone gross debt to operating EBITDA leverage was 3.7x at March 31, 2011. Fitch also notes that Ecolab may refinance or guarantee Nalco's existing debt upon closing of the transaction. Nalco's liquidity at March 31, 2011 was solid with $118.7 million of cash on hand and $228.9 million available under the $250 million revolver maturing May 2014, after utilization of $21.1 million for letters of credit, and availability under the $150 million accounts receivable facility maturing June 2013 of $25 million after borrowings of $125 million. LTM free cash flow was $138.3 million. Nalco's estimated debt maturities over the next five years are $93.3 million due in 2011 including short-term debt, $10.5 million in 2012, $135.5 million in 2013 inclusive of drawings under the accounts receivable facility, $10.5 million in 2014 and $10.5 million in 2015. Fitch has placed this IDR on Rating Watch Positive: Nalco Company -- Long-term IDR 'B+'. Fitch has affirmed these ratings: -- Senior secured revolving credit facility at 'BB+/RR1' -- Senior secured term loans at 'BB+/RR1' -- Senior unsecured notes at 'BB/RR2' NATIONAL AIRLINES: CEO Personally Liable for Unpaid Tax ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the chief executive officer of a bankrupt airline was held personally liable for $8.45 million in federal taxes as the result of a ruling from the U.S. Court of Appeals in New Orleans. Mr. Rochelle relates that the case involved Michael Conway, the CEO of National Airlines, which filed for reorganization in 2000 and later liquidated in Chapter 7. Just before the initial filing, National sent a $1.8 million check to the government in payment of excise taxes. The check bounced on account of the bankruptcy filing and wasn't replaced. According to the report, during the Chapter 11 case, the company took advantage of a law passed by Congress to defer payment of excise taxes in the wake of the terrorist attacks on the World Trade Center. The airline's Chapter 11 case was converted to liquidation in Chapter 7 before later-arising taxes were paid. In total, a district judge entered judgment against Conway for $8.45 million. The 5th U.S. Circuit Court of Appeals in New Orleans upheld in the judgment in a July 19 opinion by Circuit Judge Catharina Haynes. Judge Haynes said the district judge was correct in finding that Conway was a "responsible person" and thus personally liable for unpaid federal taxes. She said "bankruptcy did not change Conway's status." The case is Conway v. U.S., 10-40485, 5th U.S. Circuit Court of Appeals (New Orleans). A copy of the Fifth Circuit's decision dated July 19 is available at http://is.gd/WEEj5Zfrom Leagle.com. About National Airlines National Airlines halted operations and dismissed most of its 1,500 employees in early November 2002. The Las Vegas-based carrier couldn't close on a multi-million dollar financing package necessary to emerge from chapter 11 as a reorganized company and was unable to rustle-up an outside equity investment. In mid- 2002, the Air Transportation Stabilization Board declined to provide National with any form of loan guarantee. National, 48% owned by Harrah's Entertainment Corp., served Chicago Midway, Chicago O'Hare, Dallas/Ft. Worth, Los Angeles, Miami, Newark, New York JFK, Philadelphia and San Francisco with nonstop flights to and from its Las Vegas hub. When the Company filed for chapter 11 protection (Bankr. Nev. Case No. 00-19258) on Dec. 6, 2000, it disclosed $103,464,700 in assets and debts totaling $119,506,900. NATIONAL ENVELOPE: To Receive $1 Million From Ace ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that National Envelope Corp. won the right to use another $1 million and avoid running out of cash by the end of next month. NEC sold the business in September and said the last $1 million for paying bills would run out by the end of August. To re-supply the coffers, NEC in March sued Ace American Insurance Co., one of its insurance providers. NEC wanted the bankruptcy judge to force Ace to return collateral it was holding in excess of the amount NEC said was necessary to cover outstanding claims. According to the report, NEC and Ace were pointed toward a settlement in June, when the bankruptcy judge turned down Ace's attempt to have the dispute sent to arbitration. The settlement calls for Ace to turn over $1 million cash to NEC and retain the remainder. To guarantee that NEC could pay the deductible portion of claims, NEC had deposited $4.7 million cash and $3.4 million in letters of credit with Philadelphia-based Ace. Mr. Rochelle also reports that at the July 20 hearing, the bankruptcy judge also granted NEC's request and pushed out the exclusive right to propose a Chapter 11 plan until Oct. 5. NEC said it is "vetting" a draft Chapter 11 plan with interested parties. Gores Group LLC bought the assets under a contract at an advertised price of $208 million, including $149.9 million in cash. Since then, NEC settled disputes with Gores over adjustments in the price. About NEC Holdings Uniondale, New York-based National Envelope Corporation was the largest manufacturer of envelopes in the world with 14 manufacturing facilities and 2 distribution centers and approximately 3,500 employees in the U.S. and Canada. NEC Holdings Corp., together with affiliates, including National Envelope Inc., filed for Chapter 11 (Bankr. D. Del. Lead Case No. 10-11890) on June 10, 2010. Kara Hammond Coyle, Esq., at Young Conaway Stargatt & Taylor LLP, serves as bankruptcy counsel to the Debtors. David S. Heller, Esq., at Josef S. Athanas, Esq., and Stephen R. Tetro II, Esq., at Latham & Watkins LLP, serve as co-counsel. The Garden City Group is the claims and notice agent. Bradford J. Sandler, Esq., and Robert J. Feinstein, Esq., at Pachuiski Stang Ziehl & Jones LLP, represent the Official Committee of Unsecured Creditors. Morgan Joseph & Co., Inc., is the financial advisor to the Committee. NEC Holdings estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. In September 2010, National Envelope's key assets were bought in a roughly $208 million deal by The Gores Group LLC, a West Coast private equity firm that manages about $2.9 billion of capital. NEW ENGLAND: Moody's Upgrades Bond Rating to 'Ba1' -------------------------------------------------- Moody's Investors Service has upgraded New England Center for Children's bond rating to Ba1 from Ba2. The rating applies to $11.5 million of outstanding Series 1998 bonds issued through the Massachusetts Development Finance Agency. The outlook is revised to stable from positive at the higher rating level. SUMMARY RATING RATIONALE The rating upgrade and stable outlook reflects the essentiality and longevity of the organization, a history of producing operating surpluses and cash flow, strengthening of balance sheet with growth in cash balance and decrease in leverage, and maintenance of sufficient debt service coverage. STRENGTHS * A niche human service provider; NECC is a school for autism treatment and education located 20 miles west of Boston in Southborough, Massachusetts; Maintains a very strong reputation for providing a comprehensive array of essential services including residential programs, day school, adult, home based, consulting, and foreign programs; NECC signed a long-term ten year agreement with the Health Authority of Abu Dhabi and established a comprehensive educational program in 2007; NECC also has developed robust research and graduate educational training programs * A significant portion (nearly 80%) of special education school services NECC's provides are mandated by State Law Chapter 766 and Federal IDEA Act of 2004 and cannot easily be cut or replaced with different services; according to management there have been no direct cuts to special education state funding and the school receives small annual inflationary tuition rate increases set by the State * A demonstrated track record of producing operating surpluses and generating cash flow from operations (albeit fluctuating), an unusual accomplishment for the human service provider sector, and as a result has enabled NECC to steadily grow cash and deleverage its balance sheet (1.8% operating margin and 6.5% operating cash flow margin in FY 2010 excluding unrestricted contributions) * In recent years, NECC has diversified its revenue stream reducing from nearly 97% to nearly 80% of government revenues (State of Massachusetts and municipalities, out-of-state agencies) mitigating vulnerability to possible reductions, as NECC has increased consulting services to public schools, private consulting to families globally, and successfully expanded operations internationally in Abu Dhabi which has enhanced the size and scope of the organization * A good, tenured and stable management team who have implemented strategies to grow and diversify program revenues, established research and graduate education programs, in recent years developed Autism Curriculum Encyclopedia (ACE), a patented educational tool to serve more children in public schools and at the same time have been able to maintain operating profitability, generating cash flow from operations, investing in services and facilities, paying debt service and has strengthened the balance sheet CHALLENGES * Despite a steady growth in cash and decrease in leverage and improvement in relative measures, NECC maintains a narrow cash position relative to total debt obligations outstanding (approximately $14 million); Unrestricted cash balance improved to $8.1 million as of May 31, 2011, equating to 53 days cash on hand and 58% cash-to-debt from $5.7 million (41 days cash on hand and 41% cash-to-debt) at fiscal yearend (FYE) 2010; these levels remain below the investment grade Baa3 medians of $43 million in cash and investments, 92 days and 75.8% cash to debt * Ongoing operating risk given high dependence on government funding of programs and services (primarily from the Commonwealth and municipalities) and limited opportunity for large operating surpluses given restrictive payor environment with low annual inflationary tuition rate increases; the State approved a 1.169% tuition rate increase for SFY 2012 * Relatively small size organization with revenue base of approximately $54 million in FY 2010 which adds operating credit risk in the event there is loss of school contracts and/or reduced funding; the median revenue base for Baa3 ratings is $184 million DETAILED CREDIT DISCUSSION LEGAL SECURITY: The Series 1998 bonds are secured by a gross revenue pledge and secured by a mortgage on the institution's facilities. DEBT STRUCTURE: The current debt structure is 92% fixed rate debt with no swaps outstanding. INTEREST RATE DERIVATIVES: None RECENT DEVELOPMENTS/RESULTS The rating upgrade and stable outlook at the higher rating level reflects New England Center for Children's (NECC), essentiality and longevity as an organization (operating for over 35 years), based twenty miles west of Boston in Southborough, Massachusetts. NECC is a 501(c)(3) non-for-profit, school of autism treatment and education, providing a wide array of comprehensive services for children and adults. Furthermore, NECC's revenue base has more than doubled in size over the last thirteen years since 1998 and has diversified in recent years with expansion of international operations and an increase in consulting programs. The financial performance has remained consistent with operating surpluses and generating cash flow from operations, albeit fluctuating, but nonetheless a very unusual accomplishment for a human service provider. Demand for its services is evidenced by the increase in census to 279 students in 2010 from 241 in 2006. With the expansion of services internationally in recent years, NECC has been able to diversify its revenue stream from about 97% to nearly 80% of government revenues (State of Massachusetts, municipalities, and out-of-state agencies). NECC has increased consulting services to public schools, private consulting to families, and successfully expanded operations internationally in Abu Dhabi which has added a significant source income enhancing the size and scope of the organization. In 2007, NECC entered into an exclusive long-term ten year contract with the government of Abu Dhabi to establish and operate a comprehensive educational program (currently serves 42 children in day programs and 12 in residential programs and is expected to increase to 100 and 24, respectively after the opening of the new facility funded by the government. NECC expects to further increase its services and serve more children in public schools through the development of Autism Curriculum Encyclopedia (ACE) over the last few years, a patented software and educational tool that includes research-based interventions. NECC also continues to grow its consulting and partner classroom programs both in-state, out-of-state, and abroad. NECC has demonstrated the ability to produce operating surpluses and cash flow despite operating in a restrictive payor environment with low inflationary tuition rate increases. In FY 2010, NECC generated an operating income (excluding unrestricted contributions) of $0.9 million (1.8% margin) up from $0.7 million (1.5% margin) in FY 2009. Operating cash flow increased slightly to $3.5 million (6.5% operating cash flow margin) from $3.4 million (6.8% operating cash flow margin) in FY 2009. Through eleven months of FY 2011, operating results are on par with prior year period results with an 0.6% operating margin and 4.7% operating cash flow margin. Favorably, absolute operating cash flow growth has remained relatively stable over the last thirteen years ranging between $2.4 million and $3.6 million. As a result, debt coverage measures have remained adequate to service a modest debt load (measured by debt to revenues of 28% in FY 2010) with Moody's adjusted maximum annual debt service of 2.2 times and adjusted debt-to-cash flow of 3.8 times compared to 2.2 times and 4.2 times, respectively, in FY 2009. Cash grew to $5.7 million at FYE 2010, equating to 41 days cash on hand and 41% cash-to-debt. As of May 31, 2011, cash has improved to $8.1 million (53 days and 58% cash-to-debt). Despite the improvement, NECC still maintains a low absolute liquidity position relative to its total debt outstanding ($13.9 million) which Moody's believes limits operating flexibility and provides insufficient cushion if significant operating challenges need to be addressed. Likewise, the higher ratios are below investment grade Baa3 medians of $43 million in cash and investments, 92 days and 75.8% cash to debt. Later this year, NECC is planning to possibly refinance existing debt and issue about $2 million of new debt to finance capital plans including a new day care center, additional parking space, and facility renovations. NECC is also embarking on a second capital campaign of about $8-12 million for a new building on it campus that will be a research, graduate education training, and technology building that will oversee the growth of ACE software educational tool. The building is expected to be funded solely through fundraising. NECC successfully raised little over $5 million during the organization's first capital campaign for a $5 million new aquatic center that opened in 2008. Outlook The stable outlook reflects the essentiality and longevity of the organization, a history of producing operating surpluses and better debt coverage measures and, strengthening of balance sheet with growth in cash. WHAT COULD MAKE THE RATING GO - UP Continue growth and diversity of revenue base; sustained improvement in core operating performance, continued growth in cash position WHAT COULD MAKE THE RATING GO - DOWN Deterioration of operating performance; decline in cash balance, material increase in debt without commensurate increases in operating cash flow generation and cash reserves KEY INDICATORS Assumptions & Adjustments: - Based on financial statements for The New England Center for Children, Inc. - First number reflects audit year ended June 30, 2009 - Second number reflects audit year ended June 30, 2010 - Investment returns normalized at 6% unless otherwise noted * Total operating revenues: $49.8 million; $53.8 million * Moody's-adjusted net revenue available for debt service: $4.5 million; $4.6 million * Total debt outstanding: $14.2 million; $14.0 million * Maximum annual debt service (MADS): $2.1 million; $2.1 million * MADS Coverage with reported investment income: 2.0 times; 2.0 times * Moody's-adjusted MADS Coverage with normalized investment income: 2.2 times; 2.2 times * Debt-to-cash flow: 4.2 times; 3.8 times * Days cash on hand: 43 days; 41 days * Cash-to-debt: 39%; 41% * Operating margin: 1.4%; 1.8% * Operating cash flow margin: 6.8%; 6.5% RATED DEBT (debt outstanding as of June 30, 2010) - Series 1998 Fixed Rate Revenue Bonds ($11.5 million outstanding); rated Ba1 CONTACTS Obligor: Michael Downey, The New England Center for Children, Chief Financial Officer, (505) 658-7528 The last rating action with respect to New England Center for Children was on February 3, 2009, when a municipal finance scale Ba2 rating affirmed and outlook remained positive. That rating was subsequently recalibrated to Ba2 on May 7, 2010. METHODOLOGY New England Center for Children's ratings were assigned by evaluating factors believed to be relevant to the credit profile of New England Center for Children such as i) the business risk and competitive position of the issuer versus others within its industry or sector, ii) the capital structure and financial risk of the obligor, iii) the projected performance of the issuer over the near to intermediate term, iv) the obligor's history of achieving consistent operating performance and meeting budget or financial plan goals, v) the debt service coverage provided by such revenue stream, vii) the legal structure that documents the revenue stream and the source of payment, and viii) the obligor's management and governance structure related to payment. These attributes were compared against other obligor's both within and outside of New England Center for Children's core peer group and New England Center for Children's ratings are believed to be comparable to ratings assigned to other obligors of similar credit risk. NORTEL NETWORKS: Seeks to Hire Collins as Special Irish Counsel --------------------------------------------------------------- BankruptcyData.com reports that Nortel Networks filed with the U.S. Bankruptcy Court a motion to retain Eugene F. Collins (Contact: Doug Smith) as consulting expert and special Irish counsel at the following hourly rates: partner at EUR400 and associate/junior attorney at EUR70 to EUR250. Separately, the Court approved the Company's motion to expand the scope of employment of Ernst & Young to include certain services related to the reporting of foreign bank accounts. About Nortel Networks Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was once North America's largest communications equipment provider. It has sold most of the businesses while in bankruptcy. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009. Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. On May 28, 2009, at the request of the Administrators, the Commercial Court of Versailles, France ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in this Court for recognition of the English Proceedings as foreign main proceedings under chapter 15 of the Bankruptcy Code. Nortel Networks divested off key assets while in Chapter 11. In March 2009, the U.S. Bankruptcy Court entered an order approving the sale of the Layer 4-7 assets to Radware Ltd. as the successful bidder at auction. In July 2009, Nortel sold its CDMA and LTE-related assets to Telefonaktiebolaget LM Ericsson (Publ). In September 2009, the Court Nortel sold its Enterprise Solutions business to Avaya Inc. In October 2009, the Court approved the sale of assets associated with Nortel's Next Generation Packet Core network components to Hitachi, Ltd. On Dec. 2, 2009, the Court approved the sale of assets associated with Nortel's GSM/GSM-R business to Telefonaktiebolaget LM Ericsson (Publ) and Kapsch Carriercom AG. In December 2009, the Debtors sold their Metro Ethernet Networks business to Ciena Corporation. In March 2010, Nortel sold its Carrier Voice Over IP and Application Solutions business to GENBAND Inc. In September 2010, Nortel sold its Multi-Service Switch business to Ericsson. Nortel Networks filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. NURSERYMEN'S EXCHANGE: Has Final OK to Obtain $3.5MM of DIP Loans ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California, entered, on July 1, 2011, its final order authorizing Nurserymen's Exchange, Inc., to obtain secured postpetition financing not to exceed $3,500,000 from Wells Fargo Bank, National Association, under the terms of the DIP Financing Agreement pursuant to the budget previously filed. The Debtor is also authorized to use Secured Lender's cash collateral (consisting of the proceeds of the Secured Lender's pre-petition collateral) to make payments to the Secured Lender on the pre-petition obligations when due pursuant to Bankruptcy Code Section 363(c); provided, however, at Debtor's request, Secured Lender may also apply the Cash Collateral to any outstanding obligations under the DIP Financing. To the extent Secured Lender does so, Secured Lender will have a replacement lien in the DIP Collateral and a priority claim pursuant to Bankruptcy Code Section 507(b) equal to the Cash Collateral so used. As security for the repayment of the DIP Facility obligations, Secured Lender is granted first priority security interests on all of assets of the Debtor and its estates, including all proceeds of the foregoing (the "DIP Collateral"), junior only to (A) valid and perfected liens and security interests extant on the petition date that were senior to the Pre-Petition Liens; (B) the allowed and unpaid professional fees and disbursements incurred by Debtor's estate, in an aggregate amount not in excess of $400,000 (the "Carve-Out"); and (C) the payment of fees pursuant to 28 U.S.C. Section 1930. Wells Fargo is also granted a super-priority administrative expense claim pursuant to Bankruptcy Code Section 364(c)(1) for the DIP Financing. As reported in the TCR on June 15, 2011, the U.S. Bankruptcy Court for the Northern District of California, on June 10, 2011, authorized the Debtor to borrow, on an interim basis, up to $3.5 million from Wells Fargo Bank, N.A., for use through June 30, 2011, pursuant to a budget. As reported in the TCR on June 8, 2011, Wells Fargo agreed to provide the Debtor a senior secured super-priority revolving loan in the maximum principal amount of $5,000,000 for working capital purposes and to facilitate the issuance of letters of credit pending the consummation of the planned sale of the Debtor's assets and repayment of the Debtor's prepetition debt to Wells Fargo. Wells Fargo and the Debtor are parties to a Credit and Security Agreement dated as of Aug. 15, 2008. The pre-petition secured debt is secured by liens on virtually all of the Debtor's real and personal property assets. The principal amount of the debt was $15,490,150 as of the Petition Date, plus interest. In addition, the Debtor is contingently liable to Wells Fargo on a posted letter of credit in the amount of $915,000, which liability is secured by the Prepetition Collateral. Pursuant to the Credit and Security Agreement dated May 23, 2011, between Nurserymen's Exchange and Wells Fargo, the DIP loan will automatically terminate on the earliest to occur of: (i) 30 days after the Petition Date if a Final Order on terms acceptable to Wells Fargo is not entered by the date; (ii) Aug. 5, 2011 -- or the later date as the parties may agree; (iii) the effective date of a plan of reorganization; (iv) the closing of the sale to a Bay Area buyer of land not used in the operation of the Debtor's business for $8,000,000 -- PUD Sale -- or the Operating Asset Sale the proceeds of which will satisfy the Secured Debt in full; and (v) an Event of Default as that term is defined in the DIP Agreement. About Nurserymen's Exchange Founded in 1941 as a San Francisco bulb brokerage business, and currently based in Half Moon Bay in the San Francisco Bay Area, Nurserymen's Exchange Inc. is a producer, broker and wholesaler of home decor products incorporating indoor blooming plants, specialty foliage, holiday grow kits, and potted edibles. Nurserymen's Exchange filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-31985) in San Francisco, California, on May 23, 2011. Stephen D. Finestone, Esq., in San Francisco, serves as counsel to the Debtor. Omni Management Group, LLC, is the claims and notice agent. C&A, Inc., serves as financial advisor. The Debtor disclosed $34,755,036 in assets and $24,772,945 in liabilities in its schedules. Katten Muchin & Rosenmann, LLP, is the Debtor's special counsel, Chelliah & Associates is the Debtor's restructuring and turnaround consultants and advisors. FocalPoint Securities, LLC, is the Debtor's investment banker and financial advisor. Calegari & Morri is the Debtor's accountant. The Abernathy MacGregor Group, Inc., is the Debtor's corporate communications consultant. An official committee of unsecured creditors has been appointed in the case. The panel has tapped lawyers at Landau Gottfried & Berger LLP as counsel. NURSERYMEN'S EXCHANGE: Court OKs Finestone Law Firm as Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California has approved Nurserymen's Exchange, Inc.'s application to employ the Law Offices of Stephen D. Finestone as its bankruptcy counsel. The Debtor will pay the Firm its customary hourly rates in effect from time to time and to reimburse the Firm for its expenses according to its customary reimbursement policies. The current hourly rates of the attorneys handling the Chapter 11 case are: Stephen D. Finestone $395 John F. Sullivan $320 The Firm also anticipates using a paralegal, Ngoc Truong. Ms. Truong's hourly billing rate is $75. The Debtor paid the Firm a pre-petition retainer of $75,000. As of the bankruptcy filing date, $10,000 of the retainer remained. Mr. Finestone, Esq., attests that neither the Firm, nor any of its members or employees, have any connection with the Debtor, any creditors of the estate, any party in interest, their attorneys or accountants, any judge of this Court, the United States Trustee or any person employed in the office of the United States Trustee. About Nurserymen's Exchange Founded in 1941 as a San Francisco bulb brokerage business, and currently based in Half Moon Bay in the San Francisco Bay Area, Nurserymen's Exchange Inc. is a producer, broker and wholesaler of home decor products incorporating indoor blooming plants, specialty foliage, holiday grow kits, and potted edibles. Nurserymen's Exchange filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-31985) in San Francisco, California, on May 23, 2011. Omni Management Group, LLC, is the claims and notice agent. C&A, Inc., serves as financial advisor. The Debtor disclosed $34,755,036 in assets and $24,772,945 in liabilities in its schedules. An official committee of unsecured creditors has been appointed in the case. The panel has tapped lawyers at Landau Gottfried & Berger LLP as counsel. NURSERYMEN'S EXCHANGE: Can Hire Omni Management as Claims Agent --------------------------------------------------------------- Nurserymen's Exchange, Inc., has obtained Bankruptcy Court approval to employ Omni Management Group, LLC, as claims administrator and noticing agent as of the Petition Date. As reported in the Troubled Company Reporter, Brian K. Osborne, a member of Omni, will be primarily responsible for the engagement. He attests that Omni is a disinterested person and does not hold or represent an interest adverse to the estate, and does not have any connection with the Debtor, the creditors, or any other party in interest in these cases, or their attorneys or accountants, and is not related or connected to any United States Bankruptcy Judge or district Judge for the Northern District of California or the United States Trustee for Region 17. Mr. Osborne may be reached at: Brian K. Osborne OMNI MANAGEMENT GROUP, LLC 16501 Ventura Blvd., Suite 440 Enico, CA 91436 Tel: 818-906-8300 About Nurserymen's Exchange Founded in 1941 as a San Francisco bulb brokerage business, and currently based in Half Moon Bay in the San Francisco Bay Area, Nurserymen's Exchange Inc. is a producer, broker and wholesaler of home decor products incorporating indoor blooming plants, specialty foliage, holiday grow kits, and potted edibles. Nurserymen's Exchange filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-31985) in San Francisco, California, on May 23, 2011. Stephen D. Finestone, Esq., in San Francisco, serves as counsel to the Debtor. Omni Management Group, LLC, is the claims and notice agent. C&A, Inc., serves as financial advisor. The Debtor disclosed $34,755,036 in assets and $24,772,945 in liabilities in its schedules. An official committee of unsecured creditors has been appointed in the case. The panel has tapped lawyers at Landau Gottfried & Berger LLP as counsel. Katten Muchin & Rosenmann, LLP, is its special counsel. Chelliah & Associates is its restructuring and turnaround consultants and advisors. FocalPoint Securities, LLC, is investment banker and financial advisor. Calegari & Morri is its accountant. The Abernathy MacGregor Group, Inc., is its corporate communications consultant. NURSERYMEN'S EXCHANGE: Can Hire Katten Muchin as Special Counsel ---------------------------------------------------------------- Judge Dennis Montali has authorized Nurserymen's Exchange, Inc., to employ Katten Muchin & Rosenmann, LLP, as its special corporate counsel. As reported in the Troubled Company Reporter on June 14, 2011, Katten's work includes negotiating and preparing documents relating to the disposition of assets, as requested by the Debtor; advising the Debtor on financing and financing-related matters and transactional matters relating to the sale of the Debtor's assets; assisting the lead bankruptcy counsel -- The Law Offices of Stephen D. Finestone -- in formulating, negotiating, preparing and promulgating on behalf of Debtor a plan of reorganization or liquidation, a disclosure statement and all related documents; and assisting the lead bankruptcy counsel in matters related to the administration of the Debtor's estate. Judge Montali also ordered that Katten will be compensated at these hourly rates: Billing Category Range ---------------- ---------- Partners $530 - 895 Associates $300 - 525 Paraprofessionals $150 - 295 Katten professionals who are expected to have primary responsibility for providing services to the Debtor are: Mark A. Conley (Corporate Partner) $665/hour Benzion J. Westreich (Real Estate Partner) $650/hour Alissa B. Mafrice (Real Estate Associate) $460/hour Philip Lang (Corporate Associate) $460/hour Efrain R. Miron (Corporate Associate) $385/hour Katten's Mark A. Conley, Esq. -- mark.conley@kattenlaw.com -- attests that the firm has no connection with the Debtor, its creditors or any other party in interest, the United States Trustee or any person employed in the office of the United States Trustee. About Nurserymen's Exchange Founded in 1941 as a San Francisco bulb brokerage business, and currently based in Half Moon Bay in the San Francisco Bay Area, Nurserymen's Exchange Inc. is a producer, broker and wholesaler of home decor products incorporating indoor blooming plants, specialty foliage, holiday grow kits, and potted edibles. Nurserymen's Exchange filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-31985) in San Francisco, California, on May 23, 2011. Stephen D. Finestone, Esq., in San Francisco, serves as counsel to the Debtor. Omni Management Group, LLC, is the claims and notice agent. C&A, Inc., serves as financial advisor. The Debtor disclosed $34,755,036 in assets and $24,772,945 in liabilities in its schedules. An official committee of unsecured creditors has been appointed in the case. The panel has tapped lawyers at Landau Gottfried & Berger LLP as counsel. Katten Muchin & Rosenmann, LLP, is its special counsel. Chelliah & Associates is its restructuring and turnaround consultants and advisors. FocalPoint Securities, LLC, is investment banker and financial advisor. Calegari & Morri is its accountant. The Abernathy MacGregor Group, Inc., is its corporate communications consultant. NURSERYMEN'S EXCHANGE: Committee Taps Epiq as Information Agent --------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 case of Nurserymen's Exchange, Inc., seeks authority from the U.S. Bankruptcy Court for the Northern District of California to retain Epiq Bankruptcy Solutions, LLC, as information agent as of June 21, 2011. The professional services Epiq will provide as the Committee's information agent include: (a) creating and maintaining a Web site with general case information provided by the Committee, key documents, claim search function, and mirror of ECF case docket; (b) providing links to the Debtor's Web site, the Bankruptcy Court for the Northern District of California, and the Office of the United States Trustee; (c) providing contact information for the Debtor's and Committee's professionals; (d) maintaining an electronic inquiry form for creditors to submit questions and comments; and (e) providing other claims, noticing, balloting, and related administrative services as may be requested from time to time. The Committee believes that Epiq's primary responsibility will be creating and maintaining a Web site of case information. For this task, Epiq will receive a Web site hosting fee of $200 per month, plus hourly rates ranging from $36 to $265 for related services performed by its professionals. About Nurserymen's Exchange Founded in 1941 as a San Francisco bulb brokerage business, and currently based in Half Moon Bay in the San Francisco Bay Area, Nurserymen's Exchange Inc. is a producer, broker and wholesaler of home decor products incorporating indoor blooming plants, specialty foliage, holiday grow kits, and potted edibles. Nurserymen's Exchange filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-31985) in San Francisco, California, on May 23, 2011. Stephen D. Finestone, Esq., in San Francisco, serves as counsel to the Debtor. Omni Management Group, LLC, is the claims and notice agent. C&A, Inc., serves as financial advisor. The Debtor disclosed $34,755,036 in assets and $24,772,945 in liabilities in its schedules. An official committee of unsecured creditors has been appointed in the case. The panel has tapped lawyers at Landau Gottfried & Berger LLP as counsel. Katten Muchin & Rosenmann, LLP, as its special counsel. Chelliah & Associates as its restructuring and turnaround consultants and advisors. FocalPoint Securities, LLC, as investment banker and financial advisor. Calegari & Morri as accountant. The Abernathy MacGregor Group, Inc., as its corporate communications consultant. O&G LEASING: Aims Full Repayment of Unsecured Claims in 24 Mos. --------------------------------------------------------------- O&G Leasing, LLC, et al., submitted to the U.S. Bankruptcy Court for the Southern District of Mississippi a plan of reorganization and disclosure statement dated July 1, 2011. The Plan contemplates the substantive consolidation of the Debtors, solely purposes related to the Plan. The Plan provides for payment in full of all administrative claims, tax claims and priority claims, and for payment Secured and unsecured claims from cash on hand and revenues generated from operations. The interest in O&G will be cancelled. Estimated Class/Claim Treatment Recovery ----------- --------- --------- Unclassified Claims Paid in full 1 WSB Secured Claim New 5-year secured term loan $4,504,177 2 Senior Debentures If allowed, will be issued Up to Secured Claim New Debentures in face $25,955,000 amount of $25,955,000 3 Other Secured Paid in full, arrearage $59,440 Claims paid in extended installment payments 4 General Repaid in full over $1,016,497 Unsecured Claims 24 months 5 Unsecured Alternate treatment $7,610,000 Debenture Claims to $33,565,000 6 Octane Claims Receive new membership $0 Interests in O&G 7 Unsecured If Class 2 claims are $0 Deficiency Claims allowed, Class 7 Claims will be discharged 8 Interests Cancelled and extinguished $0 A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/OGLEASING_DSJul1.pdf Jackson, Mississippi-based O&G Leasing, LLC, filed for Chapter 11 bankruptcy protection (Bankr. S.D. Miss. Case No. 10-01851) on May 21, 2010. Douglas C. Noble, Esq., at McCraney Montagnet & Quin, PLLC, assists the Company in its restructuring effort. The Company estimated $10 million to $50 million in assets and $50 million to $100 million in liabilities. OASIS PLUS: Owner Files for Ch. 11 to Stop Foreclosure ------------------------------------------------------ Deborah Gates at delmarvanow.com reports that Neil Hitchcock owner of Oasis Plus Car Wash in Salisbury, Maryland, filed for Chapter 11 bankruptcy protection, canceling a foreclosure auction of the business called by lender Calvin B. Taylor Bank. Ms. Gates notes the bank canceled an auction by Tranzon National Auctions. According to the report, the U.S. Bankruptcy Court of the District of Baltimore will review the case and decide whether to approve the bankruptcy. The car wash came under scrutiny soon after it opened in 2008 behind Staples off North Salisbury Boulevard in Salisbury, when city officials noticed a peak average of 6,000 gallons of water per day used at the facility, versus the 875 gallons that Mr. Hitchcock had projected. Mr. Hitchock is the owner of a state-of-the-art car wash accused of taxing the city's sewage system with excessive water usage. Mr. Hitchcock blamed faulty water recycling equipment that failed to recycle water and reduce volume. A year ago, the Salisbury City Council agreed to defer action on the money owed until after a city evaluation of water usage at the facility that is scheduled to end August 30, notes Ms. Gates. PEACH HOLDINGS: Moody's Reviews 'C' Ratings for Possible Upgrade ---------------------------------------------------------------- Moody's Investors Service put the Corporate Family and Senior Secured Bank Credit Facility ratings of Peach Holdings, Inc., now known as PEACHHI, LLC on review for possible upgrade. The Company's Corporate Family and Senior Debt are currently rated "C." Moody's initiated the review as a result of the Company's merger with JG Wentworth LLC., a market leader in the structured settlements business, in July 2011. During its review, Moody's will examine the combined Company's long-term business plan, with specific focus on funding structure and profit and return dynamics. Moody's will also evaluate the combined Company's ability to cover debt interest payments, as well as its ability to manage its sizeable term loan maturing in 2013. The last rating action on Peach was on October 28, 2009, when Moody's confirmed the Company's Corporate Family and Senior Debt ratings and assigned a stable outlook. The principal methodology used in rating Peach is Analyzing The Credit Risks Of Finance Companies, which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Rating Methodologies subdirectory. Other methodologies and factors that may be considered in the process of rating this issuer can also be found in the Credit Policy & Methodologies directory. Peach operates in the structured settlement, life settlement and other ancillary businesses and is located in Boynton Beach, FL. Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history PERKINS & MARIE: Closes Three Restaurants in South California ------------------------------------------------------------- Nancy Luna at the Orange County Register reports that Perkins & Marie Callender's Inc. confirmed that it recently closed three restaurants in Southern California and one in Las Vegas. The closures included one location in Orange County that's been open for 45 years. Addresses of the Southern California closures: * 23365 Hawthorne Blvd Torrance, * 353 E. 17TH St. Costa Mesa, and * 2300 E. Foothill Blvd Pasadena. 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. Roberta A. Deangelis, U.S.s Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. PERKINS & MARIE: Committee Asks for OK for Ropes & Gray as Counsel ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in the Chapter 11 case of Perkins & Marie Callender's Inc., asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain Ropes & Gray LLP as its counsel. Ropes & Gray will represent the Committee in the bankruptcy proceedings. The Committee has also selected the law firm of Landis Rath & Cobb LLP to serve as co-counsel to Ropes & Gray, subject to the approval of the Court. Ropes & Gray and Landis will use their best efforts to avoid duplication of efforts. The hourly rates of Ropes & Gray's personnel are: Partners $650 - $1,120 Special Counsel and Counsel $495 - $1,030 Associates $285 - $720 Paraprofessionals $145 - $305 Professionals with primary responsibility to the Committee are: Mark R. Somerstein, partner $930 Benjamin L. Schneider, associate $660 Jose Raul Alcantar, associate $535 Darren T. Azman, associate $360 To the best of the Committee's knowledge, Ropes & Gray is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Committee set an Aug. 2, hearing on its request to retain Ropes & Gray. 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. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. Ropes & Gray LLP serves as the Committee's counsel. Landis Rath & Cobb serves as Delaware counsel for the Committee. FTI Consulting serves as restructuring and financial advisor for the Committee. PERKINS & MARIE: Wins OK for Whitby Santarlasci as Fin'l Advisor ---------------------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware authorized Perkins & Marie Callender's Inc., et al., to employ Whitby, Santarlasci & Company as financial advisor and investment banker to assist in the rehabilitating of their business and developing, negotiating and confirming a plan or plans of reorganization. As reported in the Troubled Company Reporter on July 12, 2011, WS&Co. will be paid, among other things: a) a monthly fee of $65,000, provided however that 50% of the monthly fees paid will be credited against any recapitalization fee or M&A fee; b) an asset sale fee of 1.25% of the total consideration paid or to be paid for the sale of assets conveyed in any asset transaction, payable in cash upon the consummation of the transaction; c) a M&A fee equal to $1,500,000 payable in cash, however, WS&Co. will be entitled to only a single M&A fee if more than one M&A transaction is consummated; and d) a recapitalization fee equal to $1,500,000 payable in cash. To the best of the Debtors' knowledge, WS&Co. is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. Ropes & Gray LLP serves as the Committee's counsel. Landis Rath & Cobb serves as Delaware counsel for the Committee. FTI Consulting serves as restructuring and financial advisor for the Committee. PERKINS & MARIE: Young Conaway Approved as Delaware Counsel ----------------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware authorized Perkins & Marie Callender's Inc., et al., to employ the law firm of Young Conaway Stargatt & Taylor, LLP as their Delaware counsel. As reported in the Troubled Company Reporter on July 12, 2011, the principal attorneys and paralegal designated to represent the Debtors and their hourly rates are: Robert S. Brady, partner $675 Robert F. Poppiti, Jr., associate $300 Morgan L. Seward, associate $280 Debbie Laskin, paralegal $225 Young Conaway received $25,000 initial retainer and another $25,000 retainer supplement. In addition, the firm received a payment of $24,992 on account of fees and expenses incurred prepetition. The retainer was applied to the firm's outstanding balance as of the Petition Date, $39,826. To the best of the Debtors' knowledge, Young Conaway is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. Ropes & Gray LLP serves as the Committee's counsel. Landis Rath & Cobb serves as Delaware counsel for the Committee. FTI Consulting serves as restructuring and financial advisor for the Committee. PERKINS & MARIE: Can Hire Troutman Sanders as Bankruptcy Counsel ---------------------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware authorized Perkins & Marie Callender's Inc., et al., to employ Troutman Sanders LLP as bankruptcy counsel. To the best of the Debtors' knowledge, Troutman Sanders is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. Ropes & Gray LLP serves as the Committee's counsel. Landis Rath & Cobb serves as Delaware counsel for the Committee. FTI Consulting serves as restructuring and financial advisor for the Committee. PETER J GRAVES: Investors Get Final Crack on Lawsuit ---------------------------------------------------- Bankruptcy Judge Steven Rhodes dismissed an amended complaint investors filed against Peter J. Graves. Judge Rhodes, however, added he will allow the plaintiffs one last opportunity to file another amended complaint. The deadline to file another amended complaint is Aug. 17, 2011. Peter J. Graves filed for chapter 11 relief (Bankr. E.D. Mich. Case No. 10-53046) on April 21, 2010. The case was converted to chapter 7 on Aug. 16, 2010. On Nov. 8, 2010, a group of 18 investors filed the adversary proceeding against Mr. Graves to determine dischargeability of debt under 11 U.S.C. Secs. 523(a)(2)(A) and (a)(4). The plaintiffs alleged that they loaned money to Mr. Graves to be used for the acquisition and construction of real estate developments in Arizona. The plaintiffs further alleged that Mr. Graves was actually engaged in a Ponzi scheme and that all of their funds were used to support Mr. Graves's lavish lifestyle and to pay dividends to other investors. The case is William and Susan Simonson, et al., v. Peter J. Graves, Adv. Proc. No. 10-07231 (Bankr. E.D. Mich.). A copy of Judge Rhodes' July 20, 2011 Opinion is available at http://is.gd/S8XTebfrom Leagle.com. About Peter Graves & Double G Ranch Peter J. Graves, based in East Jordan, Michigan, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 10-53046) on April 21, 2010. Judge Thomas J. Tucker was originally assigned to the case. It was later assigned to Judge Steven W. Rhodes. Sheldon S. Toll PLLC -- lawtoll@comcast.net -- serves as Mr. Graves' counsel. In his petition, Mr. Graves estimated assets of $100,001 to $500,000 and debts of $1 million to $10 million. Mr. Graves' business, Double G. Ranch, LLC, in Scottsdale, Arizona, filed for Chapter 11 (Bankr. E.D. Mich. 10-53029) on April 20, 2010. Judge Rhodes oversees the case. Matthew Wilkins, Esq. -- wilkins@bwst-law.com -- at Brooks Wilkins Sharkey & Turco, serves as bankruptcy counsel to Double G Ranch. In its petition, Double G Ranch estimated $10 million to $50 million in both assets and debts. The petition was signed by Mr. Graves, as president. PHILADELPHIA ORCHESTRA: Musicians Demands Endowment Information --------------------------------------------------------------- Peter Dobrin at Inquirer Music Critic reports that the musicians' union continued to demand -- and Philadelphia Orchestra management continued to resist -- the release of information relating to the orchestra's endowments. According to the report, specifically, lawyers for the pension fund of the American Federation of Musicians argued in U.S. Bankruptcy Court that their side was entitled to a large-scale probe of the orchestra's finances and operations to help determine whether the endowments might end up being used to satisfy the pension fund's potential claim as the largest creditor in the orchestra's Chapter 11 case. The report notes Judge Eric L. Frank said he would consider the question and issue a ruling. Music Critic says whether the pension fund is owed millions by the orchestra depends on whether the Philadelphia Orchestra Association in fact withdraws from the fund. Though the association has not formally ended its participation in the pension program, it has said it intends to do so. Music Critic adds AFM Lawyers said such a withdrawal would trigger a $35 million tab due to the fund using what they said were newly calculated figures. Previous estimates were between $23 million and $25 million. The report relates that the association wants to move musicians from the AFM defined-benefit pension plan to a defined- contribution plan. About the Philadelphia Orchestra The Philadelphia Orchestra -- http://www.philorch.org/-- claims to be among the world's leading orchestras. Bloomberg News says the orchestra became the first major U.S. symphony to file for bankruptcy protection, surprising the music world. Previous conductors include Fritz Scheel (1900-07), Carl Pohlig (1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80), Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and Christoph Eschenbach (2003-08). Charles Dutoit is currently chief conductor, and Yannick Nezet-Seguin has assumed the title of music director designate until he takes up the baton as The Philadelphia Orchestra's next music director in 2012. The Philadelphia Orchestra Association, The Academy of Music of Philadelphia, Inc., and Encore Series, Inc., filed separate Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to 11-13100) on April 16, 2011. Judge Eric L. Frank presides over the case. The Philadelphia Orchestra Association is being advised by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal, its financial advisor. Curley, Hessinger & Johnsrud serves as its special counsel. In its petition, Philadelphia Orchestra estimated $10 million to $50 million in assets and debts. Encore Series, Inc., tapped EisnerAmper LLP as accountants and financial advisors. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Debtors' case. PHOENIX EMERGENCY: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Phoenix Emergency Medical Services, Inc. aka Phoenix EMS 761 Carolina Katy, TX 77494 Bankruptcy Case No.: 11-36166 Chapter 11 Petition Date: July 20, 2011 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Letitia Z. Paul Debtor's Counsel: Dawn Guilliams, Esq. THE ADAMS LAW FIRM 23501 Cinco Ranch Blvd., Suite H205 Katy, TX 77494 Tel: (281) 391-9237 Fax: (281) 391-0451 E-mail: dguilliams@adamslawfirm.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Patricia Scudder, president. PINNACLE HILLS: Gets Case Dismissal After Abandoning Assets ----------------------------------------------------------- Judge Ben Barry of the U.S. Bankruptcy Court for the Western District of Arkansas, Fayetteville Division, dismissed the Chapter 11 case of Pinnacle Hills West, LLC. As previously reported by The Troubled Company Reporter on June 30, 2011, the Debtor asked the Court to dismiss its case after abandoning its chief asset by court order and the determining that possibility of an effective reorganization does not exist at this time. The Court directed the Debtor to pay the U.S. Trustee the appropriate sum required pursuant Section 1930(a)(6) of the Judiciary and Judicial Procedures Code and provide to the U.S. Trustee an appropriate affidavit indicating the cash disbursements for the relevant period. Rogers, Arkansas-based Pinnacle Hills West, LLC, filed for Chapter 11 bankruptcy protection (Bankr. W.D. Ark. Case No. 11-71721) on April 11, 2011. The Debtor disclosed $35,543,490 in assets and $62,302,543 in liabilities as of the Chapter 11 filing. Stanley V. Bond, Esq., at Bond Law Office, in Fayetteville, Arizona, serves as counsel. PONIARD PHARMACEUTICALS: Gets Delisting Notice From Nasdaq ---------------------------------------------------------- Poniard Pharmaceuticals, Inc. on July 19, 2011, it received written notice from the Nasdaq Listing Qualifications Staff that the Company's common stock will be delisted from The Nasdaq Capital Market effective July 28, 2011, for failure to regain compliance with the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market. The Company has requested an oral hearing before a Nasdaq Hearings Panel to appeal the determination and present a plan to regain compliance with all applicable listing requirements. The hearing request and hearing stay the delisting pending the Panel's decision. There can be no assurance that the Company's plan of compliance will be accepted by the Panel or that the appeal otherwise will be successful. As previously announced, on July 20, 2010, the Nasdaq Staff notified the Company that the bid price of its common stock had closed at less than $1.00 per share over the previous 30 consecutive business days and, as a result, did not comply with Listing Rule 5450(a)(1). In accordance with Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until January 18, 2011, to regain compliance with the minimum bid price requirement. On December 17, 2010, the Company transferred its common stock listing to The Nasdaq Capital Market and subsequently, on January 19, 2011, was afforded a second 180 calendar day compliance period, or until July 18, 2011. The Company has not regained compliance with the minimum bid price requirement. As described in its definitive Proxy Statement filed with the SEC on April 27, 2011, Poniard recently sought shareholder approval of a proposal authorizing its Board of Directors to effect a reverse stock split. On July 22, 2011, the Company adjourned the annual meeting of shareholders with an insufficient number of returned proxies and "FOR" votes to approve the reverse stock split proposal. Of the Company's common shares outstanding and entitled to vote at the annual meeting, approximately 49.2 percent returned proxies. Among returned proxies, approximately 91.6 percent (representing approximately 29.1 million votes) voted in favor of the reverse stock split proposal. Approximately 0.9 percent of total shares abstained, and approximately 7.5 percent of total shares voted against the reverse stock split proposal. The affirmative vote of a majority of the Poniard shares outstanding and entitled to vote is required to approve a reverse stock split under applicable law. Poniard Pharmaceuticals also filed a Form S-4 Registration Statement with the U.S. Securities and Exchange Commission relating to its proposed merger with ALLOZYNE, Inc., a privately held biotechnology company focused on the development of bioconjugated protein therapeutics. The definitive merger agreement was entered into on June 22, 2011. The boards of directors of both companies have approved the merger transaction, which is subject to customary closing conditions, including approval by ALLOZYNE's and Poniard's respective stockholders and receipt of approval for listing of the combined company's common stock on The Nasdaq Capital Market. "We believe that the proposed merger of Poniard and ALLOZYNE will create a robust company with a multifaceted strategy and presents a unique opportunity for creating long-term value for our shareholders," said Ronald A. Martell, Chief Executive Officer of Poniard. "With shareholder support for the merger and the necessary reverse split of Poniard's common stock, we anticipate closing of the transaction during the second half of 2011." In addition to registering the shares of Poniard common stock to be issued to the stockholders of ALLOZYNE in the merger, the Registration Statement contains proxy materials for a special meeting of Poniard shareholders. At that meeting, Poniard shareholders will be asked to approve the issuance of Poniard common stock and the resulting change of control of Poniard pursuant to the merger agreement and the amendment of Poniard's articles of incorporation to effect a reverse stock split of Poniard's issued common stock, at a ratio of 1-for-25. Poniard will need to implement the reverse stock split to obtain the listing of the combined company on The Nasdaq Capital Market, which is one of the conditions to the closing of the merger. Once the Registration Statement is declared effective by the SEC, Poniard expects to set a record date for shareholders entitled to notice of and to vote at the special meeting as well as a meeting date. About Poniard Pharmaceuticals Poniard Pharmaceuticals, Inc. -- http://www.poniard.com/-- is a biopharmaceutical company focused on the development and commercialization of innovative oncology products. POTLATCH CORP: Moody's Affirms Corporate Family Rating at 'Ba1' --------------------------------------------------------------- Moody's Investors Service has affirmed the corporate family and senior unsecured debt ratings (Ba1) of Potlatch Corporation and revised the rating outlook to positive from stable. The outlook revision reflects the increase in Potlatch's unencumbered timberland base following the amendment of its credit facility to reduce availability to $150 million from $250 million and the corresponding release of approximately 289,000 acres of timberlands from the collateral pool for the line of credit and other debt with negative pledges. Moody's also acknowledges that Potlatch's dividend payout ratio has declined significantly and has remained below 100% over the past several quarters. Moody's notes, however, that certain timberland sales contributed to that improvement. Also positively, Potlatch's liquidity benefits from an undrawn $150 revolving credit line and total debt maturities of under $80 million through 2015. In addition, Moody's believes that the market value of Potlatch's timberlands significantly exceeds the book value, providing further support for positive rating momentum. Offsetting these positives, are the cyclicality of the end markets for timber, as well as continuing challenges in the housing space in the US. Moody's is encouraged, however, by increased demand from Asia, specifically China and Japan. As stated previously by Moody's, a rating upgrade would depend on Potlatch generating consistent operating cash flows sufficient to cover its dividend burden fully and maintaining adequate liquidity, while having more consistent operating margins. A significant decline in the REIT's earnings resulting in a consistent dividend shortfall or any liquidity concerns would bring the ratings back to stable. In addition, Moody's would view consistent de-capitalization of the REIT via significant asset sales as a credit negative. These ratings were affirmed with a positive outlook: Potlatch Corporation -- corporate family rating at Ba1, senior unsecured debt at Ba1 Moody's last rating action with respect to Potlatch was on December 17, 2008, when Moody's affirmed the ratings and revised the rating outlook to stable from developing. The principal methodology used in this rating was Global Rating Methodology for REITs and Other Commercial Property Firms, published in July 2010. Potlatch Corporation [NYSE: PCH] is a timber REIT that owns 1.5 million acres of timberland in Arkansas, Idaho, and Minnesota. As of March 31, 2011, its assets totaled $757 million and its shareholders' equity was $192 million. RASER TECHNOLOGIES: Evergreen-FE to Offer Competing Ch. 11 Plan --------------------------------------------------------------- Samuel Howard at Bankruptcy Law360 reports that the chief creditor of a stalled geothermal power plant in New Mexico urged a Delaware bankruptcy judge on Monday to let it introduce a Chapter 11 plan to rival debtor Raser Technologies Inc.'s own proposal and stave off foreclosure. Law360 relates that Evergreen-FE Lightning Dock LLC asked U.S. Bankruptcy Judge Kevin Carey to terminate Raser's exclusivity period and open the door to a competing plan for the Lightning Dock geothermal plant that it claims is vastly preferable to the debtor's "unconfirmable" plan. About Raser Technologies Raser Technologies Inc. (NYSE: RZ) is a renewable energy company focusing on geothermal power development. The Company has one operating plant in Utah and another eight early and development stage projects in Utah, New Mexico, Nevada and Oregon. The Company invested $120 million in Thermo No. 1, its sole operating plant, which is near Beaver, Utah, and has a power generation capacity of 10 megawatts. The City of Anaheim, California, agreed in 2008 to buy the generated electricity for 20 years. Provo, Utah-based Raser Technologies, Inc., also known as Wasatch Web Advisors, Inc., filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-11315) on April 29, 2011. Other Debtor affiliates filed for separate Chapter 11 protection on April 29, 2011, (Bankr. Case Nos. 11-11319 - 11-11350). Peter S. Partee, Sr., Esq., and Richard P. Norton, Esq., at Hunton & Williams LLP represent the Debtors in their restructuring efforts. The Debtors' local counsel is Bayard, P.A. Sichenzia Ross Friedman Ference LLP serves as the Debtors' corporate counsel. The Debtors' financial advisor is Canaccord Genuity. A three-member official committee of unsecured creditors has been formed in the Chapter 11 case. Foley & Lardner LLP represents the Committee. The Committee also tapped Womble Carlyle Sandridge & Rice, PLLC, as co-counsel, BDO Consulting, a division of BDO USA, LLP, as its financial advisor and accountant; and BDO Capital Advisors, LLC its investment banker. The Company reported a net loss of $101.80 million on $4.25 million of revenue for the fiscal year ended Dec. 31, 2010, compared with a net loss of $20.90 million on $2.19 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010, showed $41.84 million in total assets, $107.78 million in total liabilities, $5.00 million of Series A-1 cumulative convertible preferred stock, and a stockholders' deficit of $70.94 million. RCC NORTH: Bankruptcy Judge Curley Won't Recuse Self ---------------------------------------------------- Bankruptcy Judge Sarah Sharer Curley won't recuse herself from the bankruptcy case of RCC North, LLC. The Debtor sought recusal, saying disqualification is required because the Court (1) "stopped" a contested confirmation hearing on the Debtor's plan of reorganization "in mid-witness;" (2) lifted the automatic stay "apparently based on the lack of certain funds being on deposit;" (3) "when faced with a motion to reconsider," the Court "effectively selected" the "creditor's reorganization plan by placing the Debtor in a position of harming its right to appeal or having the creditor's plan confirmed;" and (4) "[returned] from vacation to hear a simple and routine motion." According to Judge Curley, the Debtor has shown no basis, in fact or law, to grant the motion. A July 20, 2011 Memorandum Decision, a copy of which is available at http://is.gd/OgbaQKfrom Leagle.com, explains Judge Curley's decision. About RCC North LLC Scottsdale, Arizona-based RCC North LLC owns and operates two Class A office buildings and the related corporate campuses known as Phase I and Phase II of the Raintree Corporate Center located north of the northeast corner of Loop 101 (Pima Freeway) and Raintree Drive, at 15333 North Pima Road and 15111 North Pima Road, respectively, in Scottsdale, Arizona. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 10-11078) on April 15, 2010. John J. Hebert, Esq., Mark W. Roth, Esq., and Philip R. Rudd, Esq., at Polsinelli Shughart PC, represent the Debtor in its restructuring effort. The Company estimated its assets and debts at $50 million to $100 million in its Chapter 11 petition. REALTY EXECUTIVES: Agents Regroup to Form New Tucson Franchise -------------------------------------------------------------- Roger Yohem at Inside Tucson Business reports that as the Arizona division of Realty Executives continues its Chapter 11 bankruptcy reorganization, most of the firm's Tucson agents have put together a reorganization of their own. After the Tucson division was closed earlier this year, about 80 of them banded together with a group of local owners to form their own franchise. According to the report, Kynn Escalante, managing agent of the new company, said the Tucson group will be affiliated with Realty Executives International. A purchase agreement was signed June 1 splitting off the Tucson market from the financially troubled Phoenix operations. Formal authorization is pending from the Arizona Department of Real Estate. Based in Phoenix, Arizona, Realty Executives Inc. filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 11- 12497) on April 30, 2011. Judge Randolph J. Haines presides over the case. Andrew Hardenbrook, Esq., Steven D. Jerome, Esq., and Blake T. Hardwick, Esq., at Snell & Wilmer LLP, and, Paul Sala, Esq., at Allen, Sala & Bayne PLC, represent the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. REITTER CORP: Termination Date of Term Loans Extended to Sept. 1 ---------------------------------------------------------------- Reitter Corporation, dba Hospital San Gerardo, and Banco Popular de Puerto Rico seek approval from the U.S. Bankruptcy Court for the District of Puerto Rico of a stipulation amending the loan agreement between the two parties. The loan agreement is amended to extend the termination date of the certain tranches of term loans to Sept. 1, 2011. Banco Popular has a secured claim for $10,182,258. The Debtor's proposed Chapter 11 plan provides that Banco Popular will be paid in full at a 25 year amortization rate accruing a per annum interest rate of 5% with a balloon payment of the outstanding balance on April 30, 2014. The bank will retain unaltered its first mortgage on Reitter's realty and its lien over almost all of Reitter's assets. About Reitter Corporation San Juan, Puerto Rico-based Reitter Corporation dba Hospital San Gerardo filed for Chapter 11 protection (Bankr. D. P.R. Case No. 10-07152) on Aug. 6, 2010. In its schedules, the Debtor disclosed $20,440,765 in total assets and $17,250,033 in total debts. Alexis Fuentes-Hernandez, Esq., in San Juan, P.R., represents the Debtor as counsel. REITTER CORP: Has Access to Cash Collateral Until Sept. 1 --------------------------------------------------------- Reitter Corporation, dba Hospital San Gerardo, Banco Popular de Puerto Rico and the U.S. Internal Revenue Service seek approval from the U.S. Bankruptcy Court for the District of Puerto Rico a stipulation allowing the Debtor's continued use of cash collateral. In exchange for the Debtor's use of cash collateral securing its indebtedness to the IRS, the Debtor will make monthly payments to the IRS in the amount of $25,000 and the Debtor will grant postpetition replacement liens and security interests to the IRS. The Debtor, under the stipulation, is authorized to use cash collateral securing its indebtedness to BPPR from the period commencing June 1, 2011, and ending on September 1, 2011, or upon the occurrence of an event of default. In return, the Debtor will continue to deposit the proceeds from the sale of any of the Debtor's inventory to accounts with BPPR. BPPR has consented to adjust the applicable interest to 6.75% as of August 10, 2010, not to exceed a fixed monthly amount of $60,000 for all Debtor's obligations with BPPR under the Loan Documents. BPPR is also granted a replacement lien and a postpetition security interest on all of the assets and collateral of the Debtor. The Debtor will also pay $60,000 to BPPR every month. BPPR is represented by: Jose R. Gonzalez-Irizarry, Esq. jrgi@mcvpr.com Monique J. Diaz-Mayoral, Esq. mjd@mcvpr.com MCCONNELL VALDES LLC PO Box 364225 San Juan, PR 00936-4225 Telephone: (787)250-5636 / 5681 Facsimile: (787) 759-2787 / 2783 The IRS is represented by: Andrew C. Strelka, Esq., Trial Attorney, Tax Division U.S. Department of Justice Post Office Box 227 Ben Franklin Station Washington, D.C. 20044 Telephone: (202) 616-8994 Fax: (202) 514-6866 E-Mail: andrew.c.strelka@usdoj.gov About Reitter Corporation San Juan, Puerto Rico-based Reitter Corporation dba Hospital San Gerardo filed for Chapter 11 protection (Bankr. D. P.R. Case No. 10-07152) on Aug. 6, 2010. In its schedules, the Debtor disclosed $20,440,765 in total assets and $17,250,033 in total debts. Alexis Fuentes-Hernandez, Esq., in San Juan, P.R., represents the Debtor as counsel. RENEGADE HOLDINGS: Suit v. Huntington Survives Motion to Dismiss ---------------------------------------------------------------- Bankruptcy Judge William L. Stocks declined to dismiss the lawsuit, Peter L. Tourtellot, Trustee for Renegade Holdings, Inc., Alternative Brands, Inc., and Renegade Tobacco Company, v. The Huntington National Bank, Adv. Proc. No. 11-6007 (Bankr. M.D.N.C.). The Plaintiff, as chapter 11 trustee for the Debtors, seeks to avoid guaranties in which the Debtors purported to guarantee the obligation of PTM Technologies, Inc., to the Defendant under a promissory note from PTM on the theory that the guaranties constitute fraudulent conveyances under section 548(a)(1)(B) of the Bankruptcy Code. Pursuant to Rule 7012 of the Federal Rules of Bankruptcy Procedure and Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Defendant seeks to dismiss the Plaintiff's amended complaint for failure to state a claim for relief, and for failure to plead claims with sufficient particularity as required by Rule 7008 of the Federal Rules of Bankruptcy Procedure and Rule 8 of the Federal Rules of Civil Procedure. In his July 20, 2011 Memorandum Opinion, Judge Stocks held that the allegations in the amended complaint are sufficient to state a plausible claim that the Debtors did not receive reasonably equivalent value for guaranteeing the indebtedness of PTM. The amended complaint states a claim for relief under section 548(a)(1)(B) and is not subject to dismissal under either Rule 8 or Rule 12(b)(6). A copy of Judge Stocks' decision is available at http://is.gd/gZ79YYfrom Leagle.com. About Renegade Holdings Renegade Holdings and two subsidiaries -- Alternative Brands, Inc. and Renegade Tobacco Company -- filed for Chapter 11 protection (Bankr. M.D.N.C. Lead Case No. 09-50140) on Jan. 28, 2009, and exited bankruptcy on June 1, 2010. They were put back into bankruptcy July 19, 2010, when Judge Stocks vacated the reorganization plan, in part because of a criminal investigation of owner Calvin Phelps and the companies regarding what authorities called "unlawful trafficking of cigarettes." Alternative Brands is a federally licensed manufacturer of tobacco products consisting primarily of cigarettes and cigars. Renegade Tobacco distributes the tobacco products produced by ABI through wholesalers and retailers in 19 states and for export. ABI also is a contract fabricator for private label brands of cigarettes and cigars which are produced for other licensed tobacco manufacturers. The stock of RHI is owned indirectly by Calvin A. Phelps through his ownership of the stock of Compliant Tobacco, LLC which, in turn, owns all of the stock of RHI which in turn owns all of the stock of RTC and ABI. Mr. Phelps was the chief executive officer of all three companies. All three of the Debtors' have their offices and production facilities in Mocksville, North Carolina. REVIVAL OUTREACH: Court Cites Flaws in Plan Outline --------------------------------------------------- Bankruptcy Judge Thomas J. Tucker said he cannot yet grant preliminary approval of the disclosure statement explaining the Combined Plan and Disclosure Statement filed by Revival Outreach Center International Church on July 8, 2011, citing a laundry-list of problems that the Debtor must correct. The amendments were due to be filed July 21, 2011. A copy of Judge Tucker's July 15, 2011 Order is available at http://is.gd/cqsmtPfrom Leagle.com. About Revival Outreach Center International Church Revival Outreach Center International Church, based in Royal Oak, Michigan, filed a Chapter 11 petition (Bankr. E.D. Mich. Case No. 11-46419) on March 10, 2011. Judge Thomas J. Tucker oversees the case. Erica J. Ehrlichman, Esq. -- erica@findlinglaw.com -- at The Findling Law Firm PLC serves as bankruptcy counsel. In its petition, the Debtor estimated assets and debts between $1 million and $10 million. The petition was signed by David Findling, special restructuring officer. RICHARD KLARCHECK: Judge Tosses Out Chapter 11 Case --------------------------------------------------- Carrie Miller at GlenviewPatch reports that a judge threw out Chicago mobile home magnate Richard Klarchek's bid to reorganize his debts under Chapter 11 bankruptcy last month and his primary creditor, Jefferson Pilot, has begun foreclosure proceedings. Ms. Miller says the park's approximately 260 households have been told to redirect their lot rent payments to a court-appointed receiver who will manage the park as the foreclosure proceeds. Chicago, Illinois-based Richard J. Klarchek filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 10-44866) on Oct. 6, 2010. Gregory K. Stern, Esq., Monica C. O'Brien, Esq., James E. Hausler, Esq., and Christina M. Riepel, Esq., at Gregory K. Stern, P.C., represent the Debtor as bankruptcy counsel. In his schedules, the Debtor disclosed $19,075,553 in assets and $52,985,832 in liabilities as of the petition date. Affiliates Greenwood Estates MHC, LLC (Bankr. N.D. Ill. Case No. 10-33988) and Sterling Estates, LLC (Bankr. N.D. Ill. Case No. 10-22319) filed separate Chapter 11 petitions. RM HOTELS: Has Deal With Lender, Seeks Case Dismissal ----------------------------------------------------- RM Hotels Inc. asks the U.S. Bankruptcy Court for the Northern District of Georgia to dismiss its Chapter 11 case. The Debtor cites that it has worked out a satisfactory arrangement with its principal secured creditor and all of its smaller undisputed unsecured creditors have been paid. The Debtor tells court that the dismissal of its case is in the best interest of creditors and all interested parties. According to the Debtor, its principal R.C. Patel, and secure d creditor RL BB Financial Inc. have engaged in negotiations and have arrived at an engagement on July 8, 2011, which resolved disputes with the secured party, provides for forbearance and requires dismissal of the pending Chapter 11 case. Atlanta, Georgia-based RM Hotels, Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ga. Case No. 10-74708) on May 18, 2010. The Debtor is represented by Frank B. Wilensky, Esq., at Macey, Wilensky, Kessler & Hennings, LLC. The Debtor scheduled total assets of $18,723,400 and total liabilities of $11,631,559 as of the Petition Date. The Office of the U.S. Trustee for Region 21 notified the U.S. Bankruptcy Court for the Northern District of Georgia that it was unable to appoint an official committee of unsecured creditors in the Chapter 11 case of RM Hotels, Inc. ROBERT'S PLUMBING: Court Says Plan "Fatally Flawed" --------------------------------------------------- Bankruptcy Judge Robert A. Gordon denied approval of: -- the Disclosure Statement Regarding Debtor's Second Amended Plan of Reorganization filed on April 21, 2011 by Debtor Robert's Plumbing and Heating, LLC; and -- the Disclosure Statement Regarding Plan of Reorganization of D&M Realty, LLC and Monica Harenberg filed on April 27, 2011. Judge Gordon gave the Debtors 90 days to amend the Disclosure Statements. Judge Gordon said he will not approve a disclosure statement when it describes a fatally flawed plan, incapable of confirmation. To do so would be an exercise in futility. He said RPH's plan fits that description and the Amended RPH Disclosure Statement must be rejected as prima facie inadequate. In its objection to the Plan outline, Creditor Ferguson Enterprises, Inc., contends RPH's plan violates 11 U.S.C. Section 524(e) as it expressly provides for the release of liability for certain claims against non-debtor third parties, some of whom are apparently not even principals of RHP. According to Judge Gordon, the record to date provides no factual basis for finding that the release of third-party liability is either warranted or desirable and presenting the proposal as a 'take it or leave it' does not enhance RPH's cause. Furthermore, RPH offers no legal rationale to explain why the discharge of third party liability should be permitted over the plain meaning of Section 524(e). The nullification of claims owed by non- debtors --- some of which appears to be debt that RPH is not liable for -- is simply to be permitted because they demand it. As RPH has not provided either a factual or legal basis for the contemplated action, and as the proposal appears to be grounded in bad faith, the plan provisions that bar the collection of debt from non-debtor third-parties violate Sections 524(e) and 1129(a)(1) and (3) of the Bankruptcy Code. The Court also held that the Disclosure Statements are inadequate with respect to information regarding the Debtors' financial and business affairs. A copy of Judge Gordon's July 20, 2011 Memorandum Opinion is available at http://is.gd/73R6Wcfrom Leagle.com. ROEDJE CORPORATION: Case Summary & 15 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Roedje Corporation dba Fruitridge Farms Shopping Center 4816 Roselin Way Elk Grove, CA 95758 Bankruptcy Case No.: 11-37786 Chapter 11 Petition Date: July 20, 2011 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Thomas Holman Debtor's Counsel: W. Austin Cooper, Esq. W. AUSTIN COOPER, A PROF. CORP. 2525 Natomas Park Dr #320 Sacramento, CA 95833 Tel: (916) 927-2525 E-mail: austincooperlaw@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/caeb11-37786.pdf The petition was signed by Maria G. Lopez, president. ROOKWOOD CORP: Judge Rejects Involuntary Bankruptcy Case -------------------------------------------------------- Laura Baverman at Cincinnati.com reports that bankruptcy judge has thrown out a case that could have reorganized financially strapped Rookwood Pottery under a new ownership group led by former CEO Chris Rose. The report says, instead, the art tile and pottery company continues to be funded and operated by majority owners Martin and Marilyn Wade. According to the report, the judge's move ends a months-long campaign by Rose and other investors to reclaim the company they say the Wades stole from them last December. In a statement, Chip DeMois, president and chief executive officer of Rookwood Pottery said the Company is "grateful" for the Court's decision. Mr. Rose and other creditors forced the Company into an involuntary Chapter 11 bankruptcy in May, just as the Wades were planning to auction the 131-year-old company and reorganize under a new corporate structure. The report relates that Mr. Rose and several investors argued that Martin Wade had secretly purchased shares to gain control of the company. In June, they said they'd collected a majority vote to oust him. They also petitioned the Court to appoint a trustee, meanwhile trying to secure an investor to fund Rookwood operations during bankruptcy. About Rookwood Corp. Rookwood Corp. produces art pottery under the iconic Rookwood brand. Three creditors signed an involuntary Chapter 11 petition (Baknr. S.D. Ohio Case No. 11-12756) for The Rookwood Corporation on May 4, 2011. The petitioners are Sharri Rammelsberg (owed $105,000 for a promissory note), Alfred J. Berger, Jr. (owed $98,250) and Christopher Rose ($56,078). Reuel D. Ash, Esq., at Ulmer & Berne, LLP, in Cincinnati, Ohio, serves as counsel to the petitioners. The involuntary petition was filed days before the Company's assets were scheduled to be sold at an auction. ROTHSTEIN ROSENFELDT: Trustee Sues J.R. Dunn Jewelers for $2.4MM ---------------------------------------------------------------- Herbert Stettin, the Chapter 11 Trustee of Rothstein, Rosenfeldt Adler, P.A., is suing SPD Group, Inc., d/b/a J. R. Dunn Jewelers to avoid and recover fraudulent transfers and for other claims. The complaint alleges that starting in or about 2005, if not earlier, Mr. Rothstein became a frequent, high-end client of J. R. Dunn. Mr. Rothstein and J. R. Dunn were co-tenants at the location at 401 Las Olas Boulevard. According to the lawsuit, in the four-year period prior to the law firm's bankruptcy, RRA paid J. R. Dunn $2,421,973 for purchases made by Mr. Rothstein that were purely personal in nature, did not relate to the operation of RRA or confer any benefit upon, or provide value to the law firm. The law firm's Trustee has made demand upon J. R. Dunn for repayment of the Transfers, but J.R. Dunn has failed and refused to make the repayment. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed Nov. 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on Jan. 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. The trustee is represented by: Charles H. Lichtman, Esq. Stefanie C. Moon, Esq. BERGER SINGERMAN, P.A. 350 East Las Olas Blvd., Suite 1000 Fort Lauderdale, FLA 33301 Tel: (954) 525-9900 Fax: (954) 523-2872 E-mail: clichtman@bergersingerman.com smoon@bergersingerman.com On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. ROUND TABLE: ESOP Trustee Taps Wendel Rosen as Co-Counsel --------------------------------------------------------- First Bankers Trust Services Inc. asks the Hon. Roger Efremsky of the U.S. Bankruptcy Court for the Northern District of California for permission to employ Wendel, Rosen, Black & Dean LLP as its co-counsel. First Bankers was named as sole discretionary, independent and institutional trustee of Round Table Restated Employee Stock Ownership Plan and Trust. The firm will: a) advise the bank on all matters related to this bankruptcy case, b) assist the bank on filing its proof of claim, and c) perform all other legal services of the bank which may be necessary. Papers filed with the Court did not disclose the firm's compensation rates. The bank assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Round Table Pizza Based in Concord, California, Round Table Pizza, Inc. -- http://www.roundtablepizza.com/-- is a private, 100% employee- owned company with corporate offices based in Concord, California. Round Table is largely owned by an Employee Stock Ownership Plan, with 3,190 participants. The ESOP is designed and intended to provide a source of retirement income to Round Table's loyal, long-term employees. Round Table filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 11-41431) on Feb. 9, 2011. Judge Roger L. Efremsky presides over the case. Scott H. McNutt, Esq., at McNutt Law Group serves as the Debtor's bankruptcy counsel. The Debtors also tapped Frank, Rimerman & Co. as an auditor and accountant. Round Table disclosed $1,066,524 in assets and $35,625,649 in liabilities as of the Chapter 11 filing. The case is jointly administered with affiliates -- The Round Table Franchise Corporation, Round Table Development Company, and Round Table Pizza Nevada LLC. The U.S. Trustee formed a three-member official committee of unsecured creditors. The committee has tapped Brownstein Hyatt Farber Schreck, LLP as counsel. The Debtor also tapped First Bankers Trust Services, Inc. as discretionary, independent, and institutional ESOP Trustee, and Johanson Berenson LLP as an ESOP counsel. First Bankers Trust Services, Inc., WAS appointed as institutional trustee of the Round Table Restated Employee Stock Ownership Plan and Trust (ESOP). Johanson Berenson LLP serves as ESOP counsel. ROUND TABLE: ESOP Trustee Proposes Boylan Brown as Co-Counsel ------------------------------------------------------------- First Bankers Trust Services, Inc., as Trustee for the Round Table Pizza, Inc., Employee Stock Option Plan (ESOP), asks the U.S. Bankruptcy Court for the Northern District of California to employ as co-counsel: Robert F. Schatz, Esq. Devin Lawton Palmer, Esq. Boylan, Brown, Code, Vigdor & Wilson, LLP 2400 Chase Square Rochester, New York 14604 Phone: (585) 232-5300 Fax: (585) 238-9012 E-mail: dpalmer@boylanbrown.com First Bankers has selected Boylan Brown because of its expertise in matters of ESOP and bankruptcy issues and proceedings, and believes that Boylan Brown is well qualified to represent them in this case. Those services requested of Boylan Brown include: (a) advise First Bankers concerning their rights and responsibilities under the Bankruptcy Code and as ESOP Trustee; (b) provide First Bankers with continued representation in all negotiations and proceedings involving creditors, the creditors committee, secured creditors, the department of labor and other parties; (c) advice First Bankers on all matters relating to this bankruptcy case, such as motions, the disclosure statement and the plan of reorganization; (d) assisting First Bankers in filing its proof of claims; and (e) performing all other legal services for First Bankers as ESOP Trustee which may be necessary. Subject to approval of the Court, services will be billed at Boylan Brown's blended hourly rate of $400 per attorney and $170 per law clerks, paralegals and legal assistants. First Bankers has also agreed that Boylan Brown will be reimbursed for its expenses incurred in connection with this case. To the best of First Bankers' knowledge, Boylan Brown is disinterested and has no connection with First Bankers, the Debtors, their creditors, any other party-in-interest, their respective attorneys and accountants, the United States Trustee, or any person employed in the Office of the United States Trustee. To the best of First Bankers' knowledge, Boylan Brown holds no interest adverse to the estate. About Round Table Pizza Based in Concord, California, Round Table Pizza, Inc. -- http://www.roundtablepizza.com/-- is a private, 100% employee- owned company with corporate offices based in Concord, California. Round Table is largely owned by an Employee Stock Ownership Plan, with 3,190 participants. The ESOP is designed and intended to provide a source of retirement income to Round Table's loyal, long-term employees. Round Table filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 11-41431) on Feb. 9, 2011. Judge Roger L. Efremsky presides over the case. Scott H. McNutt, Esq., at McNutt Law Group serves as the Debtor's bankruptcy counsel. The Debtors also tapped Frank, Rimerman & Co. as an auditor and accountant. Round Table disclosed $1,066,524 in assets and $35,625,649 in liabilities as of the Chapter 11 filing. The case is jointly administered with affiliates -- The Round Table Franchise Corporation, Round Table Development Company, and Round Table Pizza Nevada LLC. The U.S. Trustee formed a three-member official committee of unsecured creditors. The committee has tapped Brownstein Hyatt Farber Schreck, LLP as counsel. The Debtor also tapped First Bankers Trust Services, Inc. as discretionary, independent, and institutional ESOP Trustee, and Johanson Berenson LLP as an ESOP counsel. First Bankers Trust Services, Inc., was appointed as institutional trustee of the Round Table Restated Employee Stock Ownership Plan and Trust (ESOP). Johanson Berenson LLP serves as an ESOP counsel. ROUND TABLE: Wants to Extend Plan Filing Deadline to Nov. 6 ----------------------------------------------------------- Round Table Pizza Inc. and its debtor-affiliates ask the Hon. Roger Efremsky of the U.S. Bankruptcy Court for the Northern District of California to a Chapter 11 plan of reorganization until Nov. 6, 2011. A hearing is set for July 28, 2011, at 10:00 a.m., to consider the Debtors' extension request. The Debtors believe that it would be impossible to realize an appropriate value for the company this year. The Debtors have therefore proposed a Plan of Reorganization which restructures its debt so that it can operate successfully for a period of five years, by the conclusion of which it would expect to sell the business or refinance the debt. The Debtors set the hearing for approval of its Disclosure Statement on July 28, 2011. Realistically, a hearing on confirmation of the Plan could not occur prior to early September 2011. About Round Table Pizza Based in Concord, California, Round Table Pizza, Inc. -- http://www.roundtablepizza.com/-- is a private, 100% employee- owned company with corporate offices based in Concord, California. Round Table is largely owned by an Employee Stock Ownership Plan, with 3,190 participants. The ESOP is designed and intended to provide a source of retirement income to Round Table's loyal, long-term employees. Round Table filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 11-41431) on Feb. 9, 2011. Judge Roger L. Efremsky presides over the case. Scott H. McNutt, Esq., at McNutt Law Group serves as the Debtor's bankruptcy counsel. The Debtors also tapped Frank, Rimerman & Co. as an auditor and accountant. Round Table disclosed $1,066,524 in assets and $35,625,649 in liabilities as of the Chapter 11 filing. The case is jointly administered with affiliates -- The Round Table Franchise Corporation, Round Table Development Company, and Round Table Pizza Nevada LLC. The U.S. Trustee formed a three-member official committee of unsecured creditors. The committee has tapped Brownstein Hyatt Farber Schreck, LLP as counsel. The Debtor also tapped First Bankers Trust Services, Inc. as discretionary, independent, and institutional ESOP Trustee, and Johanson Berenson LLP as an ESOP counsel. First Bankers Trust Services, Inc., was appointed as institutional trustee of the Round Table Restated Employee Stock Ownership Plan and Trust (ESOP). Johanson Berenson LLP serves as an ESOP counsel. RW LOUISVILLE: Says Noteholder Destroying Reorganization Prospects ------------------------------------------------------------------ RW Louisville Hotel Associates LLC objects to the dismissal of its chapter 11 case. Wells Fargo Bank, National Association, as trustee for the registered holders of DLJ Commercial Mortgage Corp., Commercial Mortgage Pass-Through Certificates, Series 1998-CF2, acting through its special servicer, ORIX Capital Markets LLC has sought the dismissal. According to the Debtor, the Noteholder is engaged in a relentless campaign to destroy any prospect of reorganization of this Debtor. This effort -- the extent of which is unprecedented in Kentucky Bankruptcy Courts -- has failed to date, as this Court continues to hear testimony on confirmation issues. The Noteholder's newest tactic seeks dismissal on grounds that the Debtor and its counsel allegedly: 1) made improper solicitations for votes supporting its plan that were not adequately disclosed; 2) misrepresented facts to creditors; and 3) tortiously interfered with contracts ORIX entered to buy claims. The Debtor says the Noteholder's position is flatly wrong, based on incomplete and misleading deposition snippets, unsupported assumptions and badly misconstrued legal authority. As reported in the TCR on May 5, 2011, Wells Fargo Bank N.A., formerly Wells Fargo Bank Minnesota, N.A., asked the U.S. Bankruptcy Court for the Western District of Kentucky to dismiss the Chapter 11 case of RW Louisville Hotel Associates LLC. According to the bank, the Court should dismiss the Debtor's Chapter 11 proceeding for "cause" because the Debtor lacked proper corporate authority to commence the proceeding. The Bankruptcy Court continued the hearing on Wells Fargo Bank's dismissal motion be continued to Aug. 11, 2011, at 10:00 a.m. About RW Louisville Louisville, Kentucky-based RW Louisville Hotel Associates, LLC, aka Holiday Inn Hurstbourne, owns a hotel property located at 1325 South Hurstbourne Parkway, Louisville, Kentucky 40222. It is an independent franchisee of InterContinental Hotels Group and operates a 271-room full-service Holiday Inn on the Real Property and employs approximately 110 employees. RW Louisville filed for Chapter 11 protection (Bankr. W.D. Ky. Case No. 10-35356) on Oct. 8, 2010. Emily Pagorski, Esq., and Lea Pauley Goff, Esq., J. Kent Durning, Esq., James S. Goldberg, Esq., Lea Pauley Goff, Esq., and Matthew R. Lindblom, Esq., at Stoll Keenon Ogden PLLC, in Louisville, Ky., assist RW Louisville in its restructuring effort. RW Louisville estimated its assets and debts at $10 million to $50 million at the Petition Date. SAINT VINCENTS: Court OKs Cain Brothers as Investment Banker ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York has approved Saint Vincents Catholic Medical Centers of New York's application to employ Cain Brothers & Company LLC as investment banker and Shattuck Hammond Partners, previously a division of, but now known as Morgan Keegan & Company Inc. as broker for the Debtor and Debtors in possession nunc pro tunc to May 1, 2011. About Saint Vincents Saint Vincents Catholic Medical Centers of New York, doing business as St. Vincent Catholic Medical Centers -- http://www.svcmc.org/-- was anchored by St. Vincent's Hospital Manhattan, an academic medical center located in Greenwich Village and the only emergency room on the Westside of Manhattan from Midtown to Tribeca, St. Vincent's Westchester, a behavioral health hospital in Westchester County, and continuing care services that include two skilled nursing facilities in Brooklyn, another on Staten Island, a hospice, and a home health agency serving the Metropolitan New York area. Saint Vincent Catholic Medical Centers of New York and six of its affiliates first filed for Chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14945 through 05-14951). St. Vincents Catholic Medical Centers returned to bankruptcy court by filing another Chapter 11 petition (Bankr. S.D.N.Y. Case No. 10-11963) on April 14, 2010. The Debtor estimated assets of $348 million against debts totaling $1.09 billion in the new petition. Although the hospitals emerged from the prior reorganization in July 2007 with a Chapter 11 plan said to have "a realistic chance" of paying all creditors in full, the bankruptcy left the medical center with more than $1 billion in debt. The new filing occurred after a $64 million operating loss in 2009 and the last potential buyer terminated discussions for taking over the flagship hospital. Adam C. Rogoff, Esq., and Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Debtor in its Chapter 11 effort. SANDY COVE: Goes Into Receivership, Forced to Close its Doors ------------------------------------------------------------- Simcoe County, Southern Ontario, Canada-based Simcoe.com reports that Sandy Cove Marine is being forced to close its doors after going into in receivership while a court-appointed receiver sells inventory to pay creditors. About 25 employees are expected to remain until receiver Grant Thornton Ltd. shuts down the Commerce Park Drive business following the sale of assets, according to the report. The report notes that Scott Dallimore, whose father owns the business, said the company's major lender GE Capital Canada Finance Inc. demanded repayment of loans last March. "They wanted $5.5 million by August and that just wasn't going to happen," Mr. Dallimore told the Journal, the report relates. "My father has been an iconic businessman in this town with a good reputation. There just doesn't seem to be any compassion anymore," he added. According to a receiver's report filed with the Ontario Superior Court, Sandy Cove Marine had about $6.7 million in assets at its two locations as of June 10, simcoe.com says. The receiver has decided to sell off boats and accessories through retail sales as opposed to public auction, according to the receivers' report, simcoe.com notes. The receiver's report adds there is too much inventory across Ontario to sell 2011 models to other dealers. And manufacturers, especially in the United States, are unlikely to buy back the boats, simcoe.com adds. Sandy Cove Marine is a boat dealer. SBARRO INC: Column Investments Fights Loan's Debt to Equity Switch ------------------------------------------------------------------ Megan Stride at Bankruptcy Law360 reports that Column Investments S.a.r.l. launched an adversary suit against Sbarro Inc. in New York on Friday seeking to derail other creditors' efforts to treat its second lien loan to Sbarro as equity rather than debt. According to Law360, the Luxembourg-based lender is seeking a court declaration that its March 2009 loan to Sbarro, which entered into prepackaged Chapter 11 in April, and liens related to that loan are valid and not subject to recharacterization as equity. About Sbarro Inc. The Sbarro family started its business after moving to Brooklyn, New York, from Naples, Italy, in 1956. Today Sbarro is a leading, global Italian quick service restaurant concept with approximately 5,170 employees, 1,045 restaurants throughout 42 countries, and annual revenues in excess of $300 million. Sbarro Inc. sought bankruptcy protection under Chapter 11 (Bankr. S.D.N.Y. Lead Case No. 11-11527) to eliminate about $200 million in debt. According to its schedules, the Debtor disclosed $51,537,899 in total assets and $460,975,646 in total debts. Sbarro said it has reached an agreement with all of its second- lien secured lenders and approximately 70% of its senior noteholders on the terms of a reorganization plan that will eliminate more than half of the Company's total indebtedness. Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' general bankruptcy counsel. Rothschild, Inc., is the Debtors' investment banker and financial advisor. PriceWaterhouseCoopers LLP is the Debtors' bankruptcy consultants. Marotta Gund Budd & Dzera, LLC, is the Debtors' special financial advisor. Curtis, Mallet-Prevost, Colt & Mosle LLP serves as the Debtors' conflicts counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims agent. Sard Verbinnen & Co is the Debtors' communications advisor. DJM Realty Services, LLC, serves as the Debtors' real estate consultant and advisor. SCOVILL FASTENERS: Meeting of Creditors Scheduled for Aug. 9 ------------------------------------------------------------ A bankruptcy case concerning Scovill Fasteners Inc. was originally filed under Chapter 11 on April 19, 2011, but was converted to a case under Chapter 7 on July 12, 2011. According to a notice, a meeting of creditors is scheduled to take place on Aug. 9, 2011, at 3:30 p.m., at: Richard Russell Federal Building, Room 366 75 Spring Street Atlanta, GA 30303 Donald F. Walton, U.S. Trustee, Region 21, appointed S. Gregory Hays as interim trustee in the case to take over the Debtor's estate. As reported in the Troubled Company Reporter on July 6, 2011, the Chapter 11 trustee and the Official Committee of Unsecured Creditors, on July 1, filed a joint motion seeking an order converting the Chapter 11 cases to cases under chapter 7 due to the mounting and already substantial cost of administration of these estates in chapter 11, the absence of an operating business of the Debtors, the fact that conversion of the cases is in the best interests of the estates, the Debtors, and the creditors of the estates. In a separate motion, the Chapter 7 trustee asked the Court for permission to employ Hays Financial Consulting, LLC, as his accountants. About Scovill Fasteners Scovill Fasteners Inc. -- dba Scovill Apparel Fasteners Inc. and Scovill Manufacturing Co. -- produced snap fasteners and tack buttons. It manufactured the majority of its products at its 300,000 square foot factory located in Clarkesville, Georgia. Clarkesville is also its headquarters location. Scovill Fasteners along with affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ga. Lead Case No. 11-21650) on April 19, 2011. Heather N. Byrd, Esq., and John C. Weitnauer, Esq., at Alston & Bird LLP, served as the Debtors' bankruptcy counsel. BMC Group Inc. is the claims and notice agent. Scovill estimated assets at $10 million to $50 million and debts at $100 million to $500 million. An Official Committee of Unsecured Creditors was appointed in the case. The Committee is represented by Greenberg Traurig, LLP, as its counsel. SCOVILL FASTENERS: Files Schedules of Assets & Liabilities ---------------------------------------------------------- Scovill Fasteners Inc. filed with the U.S. Bankruptcy Court for the Western District of Minnesota, its amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------- ----------- A. Real Property $3,578,950 B. Personal Property $16,744,168 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $185,224,473 Unknown E. Creditors Holding Unsecured Priority Claims $0 Unknown F. Creditors Holding Unsecured Non-priority Claims $64,818,106 ----------- -------------- TOTAL $20,323,118 $250,042,579 About Scovill Fasteners Scovill Fasteners Inc. -- dba Scovill Apparel Fasteners Inc. and Scovill Manufacturing Co. -- produced snap fasteners and tack buttons. It manufactured the majority of its products at its 300,000 square foot factory located in Clarkesville, Georgia. Clarkesville is also its headquarters location. Scovill Fasteners along with affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ga. Lead Case No. 11-21650) on April 19, 2011. Heather N. Byrd, Esq., and John C. Weitnauer, Esq., at Alston & Bird LLP, serve as the Debtors' bankruptcy counsel. BMC Group Inc. is the claims and notice agent. Scovill estimated its assets at $10 million to $50 million and debts at $100 million to $500 million. An Official Committee of Unsecured Creditors was appointed in the case. The Committee is represented by Greenberg Traurig, LLP, as its counsel. SEAHAWK DRILLING: U.S. Trustee Forms 4-Member Creditors Committee ----------------------------------------------------------------- Judy A. Robbins, United States Trustee for Region 7, under 11 U.S.C. SEC 1102(a) and (b), appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors of Seahawk Drilling, Inc. The Creditors Committee members are: 1. Pride International, Inc. ATTN: Elizabeth Wright 5847 San Felipe Street, Suite 3300 Houston, TX 77057 Tel: (713)789-1400 E-mail: ewright@prideinternational.com 2. Offshore Towing, Inc. ATTN: Celena Rousse, Sr. V.P. 11812 Hwy. 308 Larose, LA 70373 Tel: (985)798-7831 E-mail: celena@offshoretowing.com 3. Dooley Tackaberry, Inc. ATTN: Chris Dooley 1515 W. 13th Street Deer Park, TX 77536 Tel: (713)427-3127 E-mail: chris.dooley@dtihome.com 4. Southpaw Koufax, LLC ATTN: Jeffrey Cohen 2 West Greenwich Office Park Greenwich, CT 06831 Tel: (203)862-6208 Fax: (203)862-6201 E-mail: JC@Southpawasset.com About Seahawk Drilling Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup rig business in the United States, Gulf of Mexico, and offshore Mexico. It offers rigs and drilling crews on a day rate contractual basis. The Company and several affiliates filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Lead Case No. 11-20089) on Feb. 11, 2011. Berry D. Spears, Esq., and Jonathan C. Bolton, Esq., at Fullbright & Jaworkski L.L.P., in Houston, serve as the Debtors' bankruptcy counsel. Shelby A. Jordan, Esq., and Nathaniel Peter Holzer, Esq. at Jordan, Hyden, Womble, Culbreth & Holzer, P.C., in Corpus Christi, Texas, serve as the Debtors' co-counsel. Alvarez and Marsal North America, LLC, is the Debtors' restructuring advisor. Simmons & Company International is the Debtors' transaction advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Judy A. Robbins, U.S. Trustee for Region 7, appointed three creditors to serve on an Official Committee of Unsecured Creditors of Seahawk Drilling Inc. and its debtor-affiliates. Heller, Draper, Hayden, Patrick & Horn, L.L.C., represents the creditors committee. In its amended schedules, Seahawk Drilling disclosed $208,190,199 in assets and $438,458,460 in liabilities as of the petition date. Seahawk filed for Chapter 11 protection to complete the sale of all assets to Hercules Offshore, Inc. As reported by the Troubled Company Reporter on April 11, 2011, the Bankruptcy Court approved an Asset Purchase Agreement between Hercules Offshore and its wholly owned subsidiary, SD Drilling LLC, and Seahawk Drilling, pursuant to which Seahawk agreed to sell to Hercules, and Hercules agreed to acquire from Seahawk, all 20 of Sellers' jackup rigs and related assets, accounts receivable and cash and certain liabilities of Sellers in a transaction pursuant to Section 363 of the U.S. Bankruptcy Code. According to DBR Small Cap, the deal was valued at about $176 million when it received court approval. Based on previous TCR reports, the purchase price for the acquisition will be funded by the issuance of roughly 22.3 million shares of Hercules Offshore common stock and cash consideration of $25 million, which will be used primarily to pay off Seahawk's Debtor-in-Possession loan. The number of shares of Hercules Offshore common stock to be issued will be proportionally reduced at closing, based on a fixed price of $3.36 per share, if the outstanding amount of the DIP loan exceeds $25 million, with the total cash consideration not to exceed $45 million. The deal closed on April 27, 2011. SEAHAWK DRILLING: Can Hire RE/MAX as Barrow Street Lease Brokers ---------------------------------------------------------------- The U.S. Bankruptcy Court for the South District of Texas authorized Seahawk Drilling Inc. and its debtor-affiliates to employ RE/MAX Commercial Brokers Inc. as their Barrow Street Lease Real Estate Broker. As reported in the Troubled Company Reporter on June 10, 2011, the firm will render advertising, marketing, negotiating, and other brokerage services necessary to lease the Barrow Street Property. The Debtors agreed to pay a commission of 4% or 8% of the gross rentals owed under the Barrow Street Lease for all services rendered and expenses incurred in connection with the Debtors' Chapter 11 cases. The 4% commission will be paid if the firm is the only broker involved in executing the sublease and the 8% commission will be paid if the sublease is co-brokered with a broker representing the sublease or assignee. The rates are reasonable and appropriate for services of this nature, and comparable to those charged by providers of similar services. The firm compensation on a fixed-rate percentage basis is customary in the commercial real estate industry. The Debtors assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Seahawk Drilling Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup rig business in the United States, Gulf of Mexico, and offshore Mexico. It offers rigs and drilling crews on a day rate contractual basis. The Company and several affiliates filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Lead Case No. 11-20089) on Feb. 11, 2011. Berry D. Spears, Esq., and Jonathan C. Bolton, Esq., at Fullbright & Jaworkski L.L.P., in Houston, serve as the Debtors' bankruptcy counsel. Shelby A. Jordan, Esq., and Nathaniel Peter Holzer, Esq. at Jordan, Hyden, Womble, Culbreth & Holzer, P.C., in Corpus Christi, Texas, serve as the Debtors' co-counsel. Alvarez and Marsal North America, LLC, is the Debtors' restructuring advisor. Simmons & Company International is the Debtors' transaction advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Judy A. Robbins, U.S. Trustee for Region 7, appointed three creditors to serve on an Official Committee of Unsecured Creditors of Seahawk Drilling Inc. and its debtor- affiliates. Heller, Draper, Hayden, Patrick & Horn, L.L.C., represents the creditors committee. In its amended schedules, Seahawk Drilling disclosed $208,190,199 in assets and $438,458,460 in liabilities as of the petition date. Seahawk filed for Chapter 11 protection to complete the sale of all assets to Hercules Offshore, Inc. As reported by the Troubled Company Reporter on April 11, 2011, the Bankruptcy Court approved an Asset Purchase Agreement between Hercules Offshore and its wholly owned subsidiary, SD Drilling LLC, and Seahawk Drilling, pursuant to which Seahawk agreed to sell to Hercules, and Hercules agreed to acquire from Seahawk, all 20 of Sellers' jackup rigs and related assets, accounts receivable and cash and certain liabilities of Sellers in a transaction pursuant to Section 363 of the U.S. Bankruptcy Code. According to DBR Small Cap, the deal was valued at about $176 million when it received court approval. Based on previous TCR reports, the purchase price for the Acquisition will be funded by the issuance of roughly 22.3 million shares of Hercules Offshore common stock and cash consideration of $25 million, which will be used primarily to pay off Seahawk's Debtor-in-Possession loan. The number of shares of Hercules Offshore common stock to be issued will be proportionally reduced at closing, based on a fixed price of $3.36 per share, if the outstanding amount of the DIP loan exceeds $25 million, with the total cash consideration not to exceed $45 million. The deal closed on April 27, 2011. SEAHAWK DRILLING: Sanchez DeVanny OK'd to Handle Spinoff Matters ---------------------------------------------------------------- The U.S. Bankruptcy Court for the South District of Texas authorized the Official Committee of Equity Security Holders in the Chapter 11 cases of Seahawk Drilling Inc. and its debtor- affiliates to retain Sanchez DeVanny Eseverri, S.C. as special counsel. The Debtor is a former subsidiary of Pride International, Inc. Effective Aug. 24, 2009, Pride separated Seahawk into an independent, publicly traded company through a spinoff transaction. As part of the Spinoff, Seahawk and Pride entered into a number of separation agreements. The firm will advise the Committee on issues in Mexico arising in conjunction with the Spinoff. The retention of special counsel on Mexican law is essential to fulfilling its fiduciary duties in connection with the issues. The hourly rates of the firm's personnel are: Partners $200 - $330 Counsel $350 Associates $180 Paraprofessionals $90 To the best of the Committee's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Seahawk Drilling Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup rig business in the United States, Gulf of Mexico, and offshore Mexico. It offers rigs and drilling crews on a day rate contractual basis. The Company and several affiliates filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Lead Case No. 11-20089) on Feb. 11, 2011. Berry D. Spears, Esq., and Jonathan C. Bolton, Esq., at Fullbright & Jaworkski L.L.P., in Houston, serve as the Debtors' bankruptcy counsel. Shelby A. Jordan, Esq., and Nathaniel Peter Holzer, Esq. at Jordan, Hyden, Womble, Culbreth & Holzer, P.C., in Corpus Christi, Texas, serve as the Debtors' co-counsel. Alvarez and Marsal North America, LLC, is the Debtors' restructuring advisor. Simmons & Company International is the Debtors' transaction advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Judy A. Robbins, U.S. Trustee for Region 7, appointed three creditors to serve on an Official Committee of Unsecured Creditors of Seahawk Drilling Inc. and its debtor- affiliates. Heller, Draper, Hayden, Patrick & Horn, L.L.C., represents the creditors committee. In its amended schedules, Seahawk Drilling disclosed $208,190,199 in assets and $438,458,460 in liabilities as of the petition date. Seahawk filed for Chapter 11 protection to complete the sale of all assets to Hercules Offshore, Inc. As reported by the Troubled Company Reporter on April 11, 2011, the Bankruptcy Court approved an Asset Purchase Agreement between Hercules Offshore and its wholly owned subsidiary, SD Drilling LLC, and Seahawk Drilling, pursuant to which Seahawk agreed to sell to Hercules, and Hercules agreed to acquire from Seahawk, all 20 of Sellers' jackup rigs and related assets, accounts receivable and cash and certain liabilities of Sellers in a transaction pursuant to Section 363 of the U.S. Bankruptcy Code. According to DBR Small Cap, the deal was valued at about $176 million when it received court approval. Based on previous TCR reports, the purchase price for the Acquisition will be funded by the issuance of roughly 22.3 million shares of Hercules Offshore common stock and cash consideration of $25 million, which will be used primarily to pay off Seahawk's Debtor-in-Possession loan. The number of shares of Hercules Offshore common stock to be issued will be proportionally reduced at closing, based on a fixed price of $3.36 per share, if the outstanding amount of the DIP loan exceeds $25 million, with the total cash consideration not to exceed $45 million. The deal closed on April 27, 2011. On Feb. 24, 2011, the Official Committee of Equity Security Holders in the Chapter 11 cases of the Debtors was formed. SEP RIVERPARK: Receivership Services Approved as Property Manager ----------------------------------------------------------------- The Hon. Sarah A. Hall of the U.S. Bankruptcy Court for the Western District of Oklahoma authorized Michael E. Deeba to retain Receivership Services Corporation, as his property manager. Mr. Deeba is the Chapter 11 trustee for Macco Properties, Inc., the 100% owner\member\manager of SEP Riverpark Plaza, L.L.C. Upon assuming his duties and responsibilities, the trustee discovered that the Debtor owns or controls a multi-family apartment complex located in Wichita, Kansas -- Riverpark Apartments - 400 W. Central Avenue, Wichita, Kansas. The property represents 584 rental units. The trustee believes that in order to maintain the value of these properties for the benefit of the bankruptcy estate, competent management is needed to stabilize the business operations. Receivership Services is expected to, among other things: a) evaluate the property; b) manage and lease the property; and c) instruct and advise the trustee as to a marketing plan for and the eventual sale of the property of the Debtor estate. Receivership Services will receive as compensation for management services a management fee equal to 4% of "gross rental receipts" from the apartment complex, which will include all administrative and accounting personnel costs. To the best of the trustee's knowledge, Receivership Services is a "disinterested person", as that term is defined in Section 101(14) of the United States Bankruptcy Code. The trustee is represented by: JANICE D. LOYD, Esq. JAMES H. BELLINGHAM, Esq. BELLINGHAM & LOYD, P.C. 620 North Robinson, Suite 207 Oklahoma City, OK 73102 Tel: (405)235-9371 Fax: (405)232-1003 E-mail: jdltrustee@bellinghamloyd.com jbellingham@bellinghamloyd.com About SEP Riverpark Oklahoma City, Oklahoma-based SEP Riverpark Plaza, L.L.C., aka Riverpark Plaza Apartments, filed for Chapter 11 bankruptcy protection (Bankr. W.D. Okla. Case No. 0-16832) on Nov. 11, 2010. According to its schedules, the Debtor disclosed 19,165,623 in total assets and $12,026,685 in total debts. On Jan. 13, 2011, Judge Sarah A. Hall authorized the Debtor's employment of Hiersche Law Firm as its bankruptcy counsel. On May 31, 2011, the Court appointed Michael E. Deeba, as the Chapter 11 trustee for Macco Properties, Inc., the 100% owner\member\manager of the Debtor. SHERWOOD BRANDS: US Trustee Has More Time to Challenge Hiring ------------------------------------------------------------- Bankruptcy Judge Paul Mannes signed off on five stipulations extending the time for the U.S. Trustee for Region 4 to object to the applications of Sherwood Brands LLC, Sherwood Brands Inc., Sherwood Brands Zip, LLC, Sherwood Brands of Virginia, LLC, and Sherwood Brands of Rhode Island, Inc., to employ McNamee Hosea Jernigan Kim Greenan & Lynch, P.A. as their bankruptcy counsel. The objection deadline is now Aug. 12, 2011. W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, is represented by Jeanne M. Crouse, Esq. -- Jeanne.M.Crouse@usdoj.gov -- in Greenbelt, Maryland. Sherwood Brands LLC, Sherwood Brands Inc., Sherwood Brands of Rhode Island, Inc., Sherwood Brands of Virginia, LLC, and Sherwood Brands Zip, LLC, filed separate Chapter 11 petitions (Bankr. D. Md. Case Nos. 11-23807, 11-23809, 11-23812, 11-23813 and 11- 23814), on July 1, 2011. James M. Greenan, Esq. -- jgreenan@mhlawyers.com -- at McNamee, Hosea, Jernigan, Kim Greenan & Lynch, P.A., serves as bankruptcy counsel. In its petition, Sherwood Brands LLC estimated assets of $1 million to $10 million and debts of $10 million to $50 million. SHAMROCK-SHAMROCK: Request to Transfer Chapter 11 Case Denied ------------------------------------------------------------- The Hon. Arthur B. Briskman of the U.S. Bankruptcy Court for the Middle District of Florida denied the request to transfer the venue of the Chapter 11 case of Shamrock-Shamrock, Inc. The request was filed by Standard Insurance Company, an Oregon corporation; Peerless Insurance Company, a New Hampshire coproration; Liberty Life Assurance Company of Boston, a Massachusetts stock insurance company; Liberty Mutual Insurance Company, a Massachusetts stock insurancce company; Employers Insurance Company of Wausau, a Wisconsin stock insurance company; and The Ohio Casualty Insurance Company, an Ohio stock insurance company. Daytona Beach, Florida-based Shamrock-Shamrock Inc. owns 70 parcels of Florida real property. It filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 11-07061) on May 10, 2011. Judge Arthur B. Briskman presides over the case. The Law Offices of Mickler & Mickler serves as bankruptcy counsel. The Company scheduled assets of $12,284,976 and liabilities of $17,021,201, owing on mortgages to a variety of lenders. SPECIALTY PRODUCTS: Judge Rejects Firm's Discovery Bid ------------------------------------------------------ Lance Duroni at Bankruptcy Law360 reports that a Delaware bankruptcy judge on Monday rejected Specialty Products Holding Corp.'s bid for discovery from trusts set up to handle asbestos claims in bankruptcies, despite the debtor's theory that recent payments from those trusts should reduce its overall asbestos liability. According to Law360, the company sought a trove of information from the trusts and companies that process asbestos personal injury claims, particularly the amounts paid to settle with people who assert claims against Specialty Products as well. Specialty Products contended that a wave of asbestos-related bankruptcies beginning in 2001. Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM, Inc., is a wholly owned subsidiary of RPM International Inc. The Company is the holding company parent of Bondex International, Inc., and the direct or indirect parent of certain additional domestic and foreign subsidiaries. The Company claims to be a leading manufacturer, distributor and seller of various specialty chemical product lines, including exterior insulating finishing systems, powder coatings, fluorescent colorants and pigments, cleaning and protection products, fuel additives, wood treatments and coatings and sealants, in both the industrial and consumer markets. The Company filed for Chapter 11 bankruptcy protection on May 31, 2010 (Bankr. D. Del. Case No. 10-11780). Gregory M. Gordon, Esq., Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve as bankruptcy counsel. Daniel J. DeFranceschi, Esq., and Zachary I. Shapiro, Esq., at Richards Layton & Finger, serve as co-counsel. Logan and Company is the Company's claims and notice agent. The Company estimated its assets and debts at $100,000,001 to $500,000,000. The Company's affiliate, Bondex International, Inc., filed a separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779), estimating its assets and debts at $100,000,001 to $500,000,000. STELLAR GT: Meeting of Creditors Continued Until Aug. 1 ------------------------------------------------------- The U.S. Trustee for Region 4 has continued until July 25, 2011, at 10:00 a.m. and 11:00 a.m., the Meeting of Creditors in Stellar GT TIC LLC and VFF TIC LLC's Chapter 11 cases. The meeting will be held at the Office of the U.S. Trustee, 6305 Ivy Lane, 6th Floor Greenbelt, Maryland. Stellar GT TIC LLC and VFF TIC LLC, owners of the Georgian apartments located at 8750 Georgia Avenue in Silver Spring, Maryland, filed for Chapter 11 bankruptcy protection (Bankr. D. Md. Case Nos. 11-22977 and 11-22980) on June 22, 2011. Judge Wendelin I. Lipp oversees the case. Michelle Maloney-Raymond is the case administrator. Matthew G. Summers, Esq., at Ballard Spahr LLP, serves as the Debtors' counsel. The Debtors negotiated a plan of reorganization before filing for Chapter 11. The proposed plan is premised on either (1) a sale of the project pursuant to an auction process or (2) a consensual restructuring of the secured debt. Broker CB Richard Ellis Inc. has been hired to conduct the sale. The auction rules provide that a first-round sealed bid would be required to be submitted by Aug. 24. The broker would then have until Sept. 5 to negotiate with the first-round bidders. Second- round sealed bids would be due Sept. 5. The highest second-round bid would be identified by Sept. 12, 2011. The highest bid would be submitted for approval at the confirmation hearing in October. Wells Fargo, the holder of a $207.6 million secured debt, can bid at the auction. The Lender is represented by Mark Taylor, Esq., at Kilpatrick Townsend & Stockton LLP, and Jantra Van Roy, Esq., at Zeichner Ellman & Krause LLP. SWISS CHALET: Obtains OK to Tap Kevane Grant as External Auditors ----------------------------------------------------------------- Swiss Chalet, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Kevane Grant Thornton, LLP, as its external auditors. Before the Petition Date, Kevane had acted as the Debtor's external audit firm and had audited the Debtor's financial statements for the years ended April 30, 2006, 2007, 2008 and 2009. The Debtor sought approval to retain Kevane for the firm to conduct the external audit of its books and records for the year ended December 31, 2010. The firm's professionals will be paid: -- $250 per hour for partners; -- $160 per hour for managers; -- $105 per hour for senior accountants; and -- $90 per hour for assistants The firm will also be reimbursed for its expenses. The Debtor assured the Court that Kevane, its partners and associates, do not represent or hold any interest adverse to Debtor or to the estate in respect to the matters on which Kevane is to be employed. Kevane and its members are disinterested persons as defined in Section 101(14) of the Bankruptcy Code. About The Swiss Chalet Inc. The Swiss Chalet Inc., which owns the Best Western Hotel Pierre in San Juan, Puerto Rico, filed a Chapter 11 petition (Bankr. D. P.R. Case No. 11-04414) on May 27, 2011. Charles A. Cuprill, P.S.C. Law Offices serves as its bankruptcy counsel. CPA Luis R. Carrasquillo & Co., P.S.C., serves as its financial consultants. Swiss Chalet, Inc., serves as its external auditors. In its Schedules, the Debtor disclosed total assets of $118,521,510 and total debts of $132,741,094. The petition was signed by Arnold Benus, director. TEXAS INDUSTRIES: S&P Lowers Corporate Credit Rating to 'B-' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on cement producer Texas Industries Inc. to 'B-' from 'B'. The rating outlook is negative. "At the same time, we lowered the issue-level rating on the company's $650 million senior notes due in 2020 to 'B-' (the same as the corporate credit rating) from 'B'. The recovery rating remains '4', indicating our expectation of average (30%-50%) recovery in the event of a payment default," S&P related. "The downgrade stems from Texas Industries' weaker overall financial risk profile resulting from the challenging operating conditions in California and Texas construction markets, which are unlikely, in our view, to meaningfully improve over the next year," said Standard & Poor's credit analyst Tobias Crabtree. "Specifically, we believe these conditions could result in weaker credit measures than we previously expected, with interest coverage remaining below 1x over this period. In addition, we anticipate a further decline in the company's cash balances, which are its primary source of liquidity, over this period, because it will likely need to fund operating losses and increased capital expenditure requirements related to its Hunter facility expansion. Still, our ratings incorporate our belief that the company's liquidity should be sufficient to meet obligations over the next several quarters and that it will address the August 2012 maturity of its asset-based loan (ABL) facility over the next several months." In addition, the ratings reflect the company's weak business risk profile, based on Texas Industries' reliance on Texas and California end markets for a majority of sales, in comparison to larger, more geographically diverse cement and aggregates companies. "This is somewhat mitigated by our favorable view of the company's cement and aggregates businesses, given long-term supply-and-demand characteristics and high barriers to new entrants," S&P said. "The negative rating outlook reflects our assessment that a meaningful recovery in Texas Industries' end markets is unlikely to occur over the next year, which will likely cause interest coverage to remain below 1x over this period. As a result, we expect the company's credit measures to remain weak and its liquidity position to be less than adequate, given the anticipated need to fund operating losses and increased expansion-related capital expenditures from the company's existing cash balances. Our rating outlook also incorporates our expectation that the company will address the August 2012 maturity of its ABL facility in a timely manner," S&P stated. "We could lower the rating further if weaker-than-expected operating conditions were to cause a greater-than-expected decline in Texas Industries' existing cash balances, thereby further constraining its liquidity. Specifically, this could occur if the company's EBITDA were to be negative for another quarter, as it was in the third quarter of fiscal 2011," S&P related. "We could revise the outlook to stable if end markets recover faster we expect, resulting in an improved outlook for cement pricing and volumes. Specifically, to consider improving the rating outlook, we would expect the company to demonstrate a sustained improvement in adjusted EBITDA from fiscal 2011's depressed level to a level above its estimated annual cash interest expense of $60 million to $65 million," S&P said. TEXAS RANGERS: Plan Administrator Challenges MLB's Legal Fees ------------------------------------------------------------- Star-Telegram staff writers Barry Shlachter, Scott Nishimura and Sandra Baker report that attorneys from Munsch Hardt Kopf & Harr, P.C., who represent the administrator for the Texas Rangers bankruptcy plan, are questioning the millions that Major League Baseball and its lawyers are demanding they be paid for various costs and expenses. The Plan Administrator's lawyers contend that many of the costs incurred to keep the team afloat with an MLB line of credit are "unconscionable" because of the degree of control that the league wielded over the Rangers. According to the report, Munsch Hardt asserts that about $3.8 million can be cut from more than $6.3 million request by MLB. Sandy Esserman, Esq., a Dallas attorney representing MLB, said he would respond when a hearing date is set. The report says the eventual hearing may be held in Judge Stacey G.C. Jernigan's court in Dallas since Judge D. Michael Lynn of Fort Worth, who heard the bankruptcy case, has recused himself without explanation. According to the report, Judge Lynn's recusal may stem from a June 2010 incident when an MLB attorney, Stephen Shimshak, Esq., used an expletive on a teleconference line to threaten: "We'll take over the g--damn franchise." A transcript of a subsequent in- chamber conference, later released to The New York Times, showed that Judge Lynn admonished Mr. Shimshak over the threat to undermine the court during the protracted bankruptcy case. About Texas Rangers Baseball Texas Rangers Baseball Partners owned and operated the Texas Rangers Major League Baseball Club, a professional baseball club in the Dallas/Fort Worth Metroplex. TRBP is a Texas general partnership, in which subsidiaries of HSG Sports Group LLC own a 100% stake. Controlled by Thomas O. Hicks, HSG also indirectly wholly-owns Dallas Stars, L.P., which owns and operates the Dallas Stars National Hockey League franchise. The Texas Rangers have had five owners since the club moved to Arlington in 1972. Mr. Hicks became the fifth owner in the history of the Texas Rangers on June 16, 1998. Texas Rangers Baseball Partners filed a Chapter 11 petition on May 24 (Bankr. N.D. Tex. Case No. 10-43400). The partnership filed simultaneously with the bankruptcy petition a Chapter 11 plan that contemplated the sale of the club to an entity formed by a group that includes the current President of the Texas Rangers, Nolan Ryan, and Chuck Greenberg, a sports lawyer and minor league club owner. In its petition, Texas Rangers Baseball Partners said it had both assets and debt of less than $500 million. Martin A. Sosland, Esq., at Weil, Gotshal & Manges LLP, serves as bankruptcy counsel to the Debtor. Forshey & Prostok LLP is the conflicts counsel. Parella Weinberg Partners LP serves as financial advisor. Major League Baseball is represented by: Sandy Esserman, Esq. STUTZMAN, BROMBERG, ESSERMAN & PLIFKA PC 2323 Bryan Street, Suite 2200 Dallas, TX 75201-2689 Tel: 214-969-4900 Fax: 214-969-4999 Lenders to the Texas Rangers sought to force the baseball team's equity owners -- Rangers Equity Holdings, L.P. and Rangers Equity Holdings GP, LLC -- into bankruptcy court protection (Bankr. N.D. Tex. Case No. 10-43624 and 10-43625). The lenders, a group that includes investment funds Monarch Alternative Capital and Kingsland Capital Management, filed an involuntary bankruptcy petition on May 28, 2010 against the two companies. The two companies were not included in the May 24 Chapter 11 filing of TRBP. U.S. Bankruptcy Judge Stacey G. C. Jernigan on Aug. 5, 2010 confirmed the Debtor's fourth amended version of the Prepackaged Plan of Reorganization. The judge's confirmation order cleared the way for a group of Hall of Fame pitcher Nolan Ryan, and Pittsburgh sports attorney and minor-league team owner Charles Greenberg to purchase the Texas Rangers. The Ryan group paid $385 million in cash and assumed $208 million in liabilities. The Ryan group outbid Dallas Mavericks owner Mark Cuban at an auction. TEXAS WYOMING: Plan Preserved Avoidance Suit v. Shareholders ------------------------------------------------------------ The U.S. Court of Appeals for the Fifth Circuit held that Texas Wyoming Drilling, Inc.'s confirmed bankruptcy plan adequately preserved avoidance actions. In a July 21, 2011 decision, the Fifth Circuit upheld a bankruptcy court order denying Laguna Madre Oil & Gas II, L.L.C.'s motion for summary judgment in the lawsuit, John Dee Spicer, Chapter 7 Trustee for Texas Wyoming Drilling, Inc., Appellee, v. Laguna Madre Oil & Gas II, L.L.C.; Paloma Ventures; Ronald Knecht; Stephen L. Danchok; Garth Stanger, Trustee of the Stanger Family Trust; William E. Walthers; Donald Anderson, Trustee of the Anderson Living Trust; Trustee of the Dale and Carolyn Hanst Trust; Eric Kiersh; Michael Humphrey, Trustee of the Humphrey Family Trust; Wade Vessey; Karen Vessey; Keith Hanst; Leo Hanly; Danny Jackson; Gary Grace; William Brinkop; Dan Peters, Appellants, No. 10-10717 (5th Cir.). The Fifth Circuit said the bankruptcy court properly denied Laguna's summary judgment motion because the plan adequately preserved the Avoidance Actions and the claims were not barred by judicial estoppel or res judicata. A few months after confirmation of the plan, TWD sued 32 of its former shareholders, including Laguna, for prepetition dividend payments that were allegedly fraudulent transfers under 11 U.S.C. Sections 544, 548, and 550, and the Texas Business and Commerce Code, alleging that the former shareholders had received dividends and other transfers equaling millions of dollars while TWD was insolvent. Laguna filed a summary judgment motion, arguing that TWD had no standing because TWD's plan did not adequately retain the Avoidance Actions under 11 U.S.C. Sec. 1123. In the alternative, Laguna argued that TWD's claims were barred by res judicata and judicial estoppel. The plan eliminated all of the TWD's shareholders' stock interests in the Debtor. The day before the hearing on Laguna's motion, the bankruptcy court sua sponte converted TWD's Chapter 11 bankruptcy to a Chapter 7 bankruptcy because TWD had materially defaulted under the plan. The trustee automatically succeeded TWD as the plaintiff in the Avoidance Actions proceedings against Laguna. The bankruptcy court then denied Laguna's motion, holding that the defenses were meritless, but that, even if any of them had merit, the bankruptcy court's conversion of the case meant that the Chapter 7 trustee could pursue the claims even though the post- confirmation Chapter 11 debtor could not. At Laguna's request, the bankruptcy court certified the order for direct appeal, 28 U.S.C. Sec. 158(d)(2), and the Fifth Circuit granted Laguna's petition for permission to appeal. A copy of the Fifth Circuit's opinion is available at http://is.gd/W1Itubfrom Leagle.com. Circuit Judge Edith Brown Clement penned the decision. The appellate panel consists of Circuit Judges Clement, W. Eugene Davis and Jennifer Elrod. * * * Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in New Orleans handed down an opinion narrowing a controversial 2008 ruling in a case known as United Operating. The United Operating opinion, written by Chief Circuit Judge Edith H. Jones, ruled that a lawsuit must be described specifically and unequivocally before plan confirmation to survive after emergence from Chapter 11. Mr. Rochelle relates in the reorganization of a company called Texas Wyoming Drilling Inc., the Chapter 11 plan and the explanatory disclosure statement said a trustee for creditors could sue shareholders for fraudulent transfers and recovery of dividends. The report relates that in an 11-page opinion, Circuit Judge Edith Brown Clement said the description of the suit was sufficient to survive confirmation of the plan. She said that United Operating "never held that intended defendants must be named in the plan." The disclosure statement "did identify the prospective defendants as various prepetition shareholders," she said. Judge Clement's ruling for the 5th Circuit in New Orleans is also important because it resolved a split among lower courts by saying that the disclosure statement, not just the plan, could be consulted to determine if there was sufficient identification of a suit to be filed after bankruptcy. About Texas Wyoming Drilling, Inc. Drilling contractor and service company Texas Wyoming Drilling, Inc. -- http://www.texaswyoming.com-- sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 07-41650) on Apr. 16, 2007; is represented by Jeffery D. Carruth, Esq., Mark A. Castillo, Esq., and Stephanie Diane Curtis, Esq., at The Curtis Law Firm, P.C., in Dallas, Tex.; and estimated its assets and debts at more than $1 million to $100 million at the time of the filing. The Bankruptcy Court confirmed Texas Wyoming's Chapter 11 plan on Nov. 13, 2008, and that plan was declared effective before the end of the year. The Reorganized Debtor commenced post-confirmation litigation (Bankr. N.D. Tex. Adv. Pro. No. 09-04015) on Apr. 29, 2009, against recipients of dividends, asserting that dividend payments were avoidable as fraudulent transfers. On July 14, 2009, following a material default under the chapter 11 plan, the Court, sua ponte based on 11 U.S.C. Sec. 1112(b)(4)(N), converted the Reorganized Debtor's chapter 11 case to a Chapter 7 proceeding, and the U.S. Trustee appointed John Dee Spicer to serve as the Chapter 7 Trustee. The recipients moved for summary judgment, arguing, inter alia, that debtor lacked standing to pursue the avoidance claims. The Honorable Dennis Michael Lynn disagrees, and gave Mr. Spicer the green light to pursue his claims against the recipients. UNITED GILSONITE: Legal Analysis Approved as Asbestos Consultant ---------------------------------------------------------------- The Hon. Robert N. Opel, II, of the U.S. Bankruptcy Court for the Middle District of Pennsylvania authorized The Official Committee of Unsecured Creditors in the Chapter 11 case of United Gilsonite Laboratories to retain Legal Analysis Systems, Inc., as its consultant on the valuation of asbestos liabilities. As reported in the Troubled Company Reporter on July 21, 2011, the services that Legal Analysis has performed and will continue to perform for the Committee include, but are not limited to: (a) development of oversight methods and procedures so as to enable the Committee to fulfill its responsibilities of reviewing and analyzing any proposed Disclosure Statement, Plan, and other similar documents in the reorganization proceeding; (b) review and analyses of the Debtor's asbestos claims database and review and analysis of the Debtor's resolution of various asbestos claims; (c) estimation of the Debtor's liability for asbestos claims that are pending at the present time as well as those that will be filed in the future; (d) quantitative analyses of alternative claims resolution procedures including estimation of payments that would be made to various types of claims under those alternatives and development of cash flow analysis of an asbestos compensation trust under alternative procedures; (e) evaluation of reports and opinions of experts and consultants retained by other parties to these bankruptcy proceedings; (f) evaluations and analyses of proposed proofs of claims and bar dates and analyses of data from proofs of claim for asbestos claims; (g) quantitative analyses of other matters related to the asbestos claims as may be requested by the Committee; and (h) testimony on these matters as is required by the Committee. In exchange for its services, Legal Analysis will be paid these rates and will be reimbursed for all reasonable out-of-pocket expenses: Mark A. Peterson $800 Daniel Relies (Statistician) $475 Dr. Peterson has extensive experience in providing asbestos claims analysis services in bankruptcy and litigation matters. Other professionals at Legal Analysis may also perform services for the Committee. Legal Analysis' principal, Mark A. Peterson, Ph.D., assured the Court that his firm is a "disinterested parties" within the meaning of Section 101(14) and 328(c) of the Bankruptcy Code and holds no interest adverse to the Committee or the Debtor's asbestos creditors on the matters for which they are to be employed. About United Gilsonite Scranton, Pennsylvania-based United Gilsonite Laboratories, a Pennsylvania Corporation, is a small family-owned corporation engaged in the manufacturing of wood and masonry finishing products and paint sundries. It filed for Chapter 11 bankruptcy protection on March 23, 2011 (Bankr. M.D. Pa. Case No. 11-02032). Mark B. Conlan, Esq., at Gibbons P.C., serves as the Debtor's bankruptcy counsel. Joseph M. Alu & Associates P.C. serves as accountants. K&L Gates LLP serves as special insurance counsel. Lenahan & Dempsey, P.C., Wilbraham, Lawler & Buba, and Steptoe & Johnson LLP serve as professionals in the ordinary course of the Debtor's business. Garden City Group is the claims and notice agent. James L. Patton, Jr., was appointed as legal representative for future asbestos claimants in the Chapter 11 case of the Debtor. The Company disclosed $21,084,962 in assets and $3,008,688 in liabilities as of the Chapter 11 filing. Roberta A. DeAngelis, United States Trustee for Region 2, appointed five creditors to serve on an Official Committee of Unsecured Creditors of United Gilsonite Laboratories. Montgomery, McCracken, Walker & Rhoads, LLP, represents the Committee. Legal Analysis Systems, Inc., serves as its consultant on the valuation of asbestos liabilities. UNITED GILSONITE: Has Until Jan. 17 to File Reorganization Plan --------------------------------------------------------------- The Hon. Robert N. Opel, II, of the U.S. Bankruptcy Court for the Middle District of Pennsylvania extended United Gilsonite Laboratories' exclusive periods to file and solicit acceptances for the proposed plan of reorganization until Jan. 17, 2012, and March 19, 2012. As reported in the Troubled Company Reporter on July 21, 2011, the Debtor said that it has made progress toward a resolution of its case. Further, it has unresolved contingencies that will impact its reorganization efforts, including the Asbestos PI Claims that are still in their infancy. Scranton, Pennsylvania-based United Gilsonite Laboratories, a Pennsylvania Corporation, is a small family-owned corporation engaged in the manufacturing of wood and masonry finishing products and paint sundries. It filed for Chapter 11 bankruptcy protection (Bankr. M.D. Pa. Case No. 11-02032) on March 23, 2011. Mark B. Conlan, Esq., at Gibbons P.C., serves as the Debtor's bankruptcy counsel. Joseph M. Alu & Associates P.C. serves as accountants. K&L Gates LLP serves as special insurance counsel. Lenahan & Dempsey, P.C., Wilbraham, Lawler & Buba, and Steptoe & Johnson LLP serve as professionals in the ordinary course of the Debtor's business. Garden City Group is the claims and notice agent. James L. Patton, Jr., was appointed as legal representative for future asbestos claimants in the Chapter 11 case of the Debtor. The Company disclosed $21,084,962 in assets and $3,008,688 in liabilities as of the Chapter 11 filing. Roberta A. DeAngelis, U.S. Trustee for Region 2, appointed five creditors to serve on an Official Committee of Unsecured Creditors of United Gilsonite Laboratories. Montgomery, McCracken, Walker & Rhoads, LLP, represents the Committee. Legal Analysis Systems, Inc., serves as its consultant on the valuation of asbestos liabilities. UNITED GILSONITE: Charter Oak OK'd as Panel & FCR's Fin'l Advisor ----------------------------------------------------------------- The Hon. Robert N. Opel, II, of the U.S. Bankruptcy Court for the Middle District of Pennsylvania authorized the Official Committee of Unsecured Creditors and the Legal Representative for Future Claimants in the Chapter 11 case of United Gilsonite Laboratories to retain Charter Oak Financial Consultants, LLC as financial advisor. The Committee and FCR assured that Charter Oak possesses no interest adverse to the Debtor's estate, and that its employment is necessary and in the best interests of the estate and its creditors. Scranton, Pennsylvania-based United Gilsonite Laboratories, a Pennsylvania Corporation, is a small family-owned corporation engaged in the manufacturing of wood and masonry finishing products and paint sundries. It filed for Chapter 11 bankruptcy protection on March 23, 2011 (Bankr. M.D. Pa. Case No. 11-02032). Mark B. Conlan, Esq., at Gibbons P.C., serves as the Debtor's bankruptcy counsel. Joseph M. Alu & Associates P.C. serves as accountants. K&L Gates LLP serves as special insurance counsel. Lenahan & Dempsey, P.C., Wilbraham, Lawler & Buba, and Steptoe & Johnson LLP serve as professionals in the ordinary course of the Debtor's business. Garden City Group is the claims and notice agent. James L. Patton, Jr., was appointed as legalrepresentative for future asbestos claimants in the Chapter 11 case of the Debtor. The Company disclosed $21,084,962 in assets and $3,008,688 in liabilities as of the Chapter 11 filing. Roberta A. DeAngelis, United States Trustee for Region 2, appointed five creditors to serve on an Official Committee of Unsecured Creditors of United Gilsonite Laboratories. Montgomery, McCracken, Walker & Rhoads, LLP, represents the Committee. Legal Analysis Systems, Inc., serves as its consultant on the valuation of asbestos liabilities. URBAN WEST: Enters Stipulation With SP4 Re Lift Stay Request ------------------------------------------------------------ The Troubled Company Reporter previously reported that SP4 Rincon II Partner, LP, asked the U.S. Bankruptcy Court for the Northern District of California, San Francisco Division, to lift the automatic stay in the Chapter 11 cases of Urban West Rincon Developers II, LLC, and Rincon Developers Phase II, LLC, to allow it to effectuate the winding up of the non-debtor limited partnership One Rincon Hill Phase II, LP. For purposes of the Motion, the parties stipulate that these facts are uncontested: a) The Debtors do not have an equity in the Collateral under Section 362(d)(2)(A) of the Bankruptcy Code. b) As of the Petition Date, the principal amount owing on the Senior Loan Agreement was not less than $24,400,000, plus interest in the aggregate amount of not less than $5,994,517, for a total amount owing under the Senior Loan Agreement, as of the Petition Date, of not less than $30,394,517. c) As of the Petition Date, the principal amount owing under the Junior Loan Agreement was not less than $5,300,000.00, plus additional principal and interest in the aggregate amount of not less than $2,527,218, for a total amount owing under the Junior Loan Agreement, as of the Petition Date, of not less than $7,827,218. d) One Rincon Hill Phase II LLC, SP Rincon II LLC, Urban West Rincon Development II LLC and Rincon Developers Phase II LLC, have obtained general liability insurance policy number 000144624 from James River Insurance Company, which includes $2 million general liability insurance coverage for the vacant land (18,362 sp ft lot) located at 401 Harrison Street, San Francisco, CA 94105 effective from May 1, 2011, through May 1, 2012. e) Pursuant to the terms and conditions of the Fourth Amendment to Option to Purchase-Cash Sale, dated as of April 8, 2011, One Rincon Hill Phase II, LP, renewed its option to purchase certain land that may be useful to own for the construction of Phase II of the "One Rincon Hill" project from the California Department of Transportation. Unless exercised or extended, such option to purchase will expire on June 30, 2012. In addition, the Parties agree that: * nothing contained in the Stipulation will act as a waiver of any rights or claims that the Parties may have that are unrelated to the Motion, including any right to bring an action for affirmative recovery arising from the underlying transaction or relationship. In particular, and without limitation, the Debtors do not waive any right to object to the amount, validity, or priority of any claim of the Objectors; and * all discovery related to any of the Uncontested Facts will be suspended. A final hearing on the Motion was scheduled for July 25, 2011, at 09:30 a.m. 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. VAN HAM DAIRY: Applies for New Permits for Operation ---------------------------------------------------- WFIN.com reports that a controversial Putnam County Dairy is seeking new permits for operation after declaring bankruptcy last year. The Ohio Livestock Environmental Permitting Program said Van Ham Dairy, at 7089 Road 22 in Continental, has submitted paperwork. A public notice of the submission has been made by the agency. WFIN recounts that the operators of the dairy filed for Chapter 11 bankruptcy protection last year, blaming low milk prices and high grain costs. Neighbors of the dairy sued the owners in 2003, saying the facility wasn't doing enough to manage the smell of the manure produced by the 690 cow operations. About Van Ham Dairy Van Ham Dairy Leasing LLC is a rural mega-dairy associated with a Wauseon firm that recruited Dutch dairy farmers to the Midwest. Van Ham Dairy Leasing, LLC, filed for Chapter 11 (Bankr. N.D. Ohio Case No. 10-36120) on Sept. 3, 2010. The Debtor estimated assets of up to $10 million and debts of $10 million to $50 million in its Chapter 11 petition. An affiliate, Van Ham Dairy, LLC, filed for Chapter 11 (Bankr. N.D. Ohio Case No. 10-33231) on May 10, 2010. David J. Coyle, Esq., at Shumaker, Loop & Kendrick, LLP, serves as counsel to the Debtors. Another affiliate, Midwest AG Investments LLC, filed for reorganization in June 2010, to protect its assets, including agricultural land in Sandusky County, Ohio, and Lenawee County, Michigan. VITRO SAB: U.S. Units Completes Sale to Sun Capital --------------------------------------------------- The investment banking firm of Morgan Joseph TriArtisan LLC disclosed that Vitro America, LLC, a leading fabricator, distributor and installer of architectural glass and aluminum products, has completed a sale of substantially all of its assets pursuant to Section 363 of the Bankruptcy Code. The purchaser of the Vitro America assets is American Glass Enterprises, LLC, an affiliate of Sun Capital Partners. Morgan Joseph's Financial Restructuring Group served as the exclusive investment banker to Vitro America on the transaction, which also involved raising approximately $35 million in debtor- in-possession financing. Vitro America, LLC, through its three business units--Vitro America Architectural Products, Binswager Glass, and Super Sky Products-- serves more than 4,000 customers in the construction and automotive replacement markets from approximately 100 locations throughout the United States. The company had generated consistent revenue and profit in the 2000's, but due to an unprecedented downturn in new residential and commercial construction following FY 2008, as well as the dislocation in the credit markets that led to elimination of attractive financing for construction projects, the business contracted precipitously. Over a very compressed time period, the Morgan Joseph team worked with Vitro America to secure a stalking horse bid from an affiliate of Grey Mountain Partners, a private equity firm based in Boulder, Colorado. Subsequently, Morgan Joseph thoroughly marketed the Vitro America assets, resulting in a very robust auction where the ultimate purchase price offered by American Glass Enterprises was approximately 40 percent higher than the original stalking horse bid. "With the help of the Morgan Joseph team, we were able to obtain a stalking horse bid by the time the company filed bankruptcy, which was absolutely imperative to operating the business on a reasonably steady basis during the pendency of our bankruptcy case. Morgan Joseph also played a key role in attracting several serious bidders to the auction which allowed us to achieve a much higher price for the company, maximizing value for all stakeholders in this process," said Ricardo Maiz, Chief Financial Officer of Vitro America. About Vitro America Headquartered in Memphis, Tennessee, Vitro America is a leading fabricator, distributor, and installer of glass in the construction, automotive replacement, and furniture markets. The company serves more than 40,000 customers from more than 100 locations throughout the United States. About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009 and sought to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. Concurso Mercantil & Chapter 15 Proceedings Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, commencing its voluntary concurso mercantil proceedings -- the Mexican equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. The judge said Vitro couldn't push through a plan to buy back or swap US$1.2 billion in debt from bondholders based on the vote of US$1.9 billion of intercompany debt when third-party creditors were opposed. Vitro as a result dismissed the first Chapter 15 petition following the ruling by the Mexican court. On April 12, 2011, an appellate court in Mexico reinstated the reorganization. Accordingly, Vitro SAB on April 14 re-filed a petition for recognition of its Mexican reorganization in U.S. Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11-11754). In the present Chapter 15 case, the Debtor seeks to block any creditor suits in the U.S. pending the reorganization in Mexico. On June 29, 2011, Vitro Packaging de Mexico S.A. de C.V. commenced a voluntary judicial reorganization proceeding under the Ley de Concursos Mercantiles before the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, the United Mexican States. On June 30, 2011, Vitro Packaging filed a chapter 15 petition (Bankr. N.D. Tex. Case No. 11-34224). Alejandro Francisco Sanchez-Mujica and Javier Arechavaleta Santos serve as Foreign Representatives of Vitro S.A.B. de C.V. and Vitro Packaging de Mexico S.A. de C.V. The Foreign Representatives are represented by David M. Bennett, Esq., Katharine E. Battaia, Esq., and Cassandra A. Sepanik, Esq., at Thompson & Knight LLP, and Andrew M. Leblanc, Esq., Risa M. Rosenberg, Esq., Thomas J. Matz, Esq., and Jeremy C. Hollembeak, Esq., at Milbank Tweed Hadley & McCloy LLP. Attorneys for the Ad Hoc Group of Vitro Noteholders are Jeff P. Prostok, Esq., and Lynda L. Lankford, Esq., at Forshey & Prostok, LLP, and Allan S. Brilliant, Esq., Benjamin E. Rosenberg, Esq., Craig P. Druehl, Esq., and Dennis H. Hranitzky, Esq., at Dechert LLP. Chapter 11 Proceedings A group of noteholders, namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P., opposed the exchange. Together, they held US$75 million, or approximately 6% of the outstanding bond debt. The Noteholder group commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. The U.S. affiliates subject to the involuntary petitions are Vitro Chemicals, Fibers & Mining, LLC (Bankr. N.D. Tex. Case No. 10- 47472); Vitro America, LLC (Bankr. N.D. Tex. Case No. 10-47473); Troper Services, Inc. (Bankr. N.D. Tex. Case No. 10-47474); Super Sky Products, Inc. (Bankr. N.D. Tex. Case No. 10-47475); Super Sky International, Inc. (Bankr. N.D. Tex. Case No. 10-47476); VVP Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47477); Amsilco Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47478); B.B.O. Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47479); Binswanger Glass Company (Bankr. N.D. Tex. Case No. 10-47480); Crisa Corporation (Bankr. N.D. Tex. Case No. 10-47481); VVP Finance Corporation (Bankr. N.D. Tex. Case No. 10-47482); VVP Auto Glass, Inc. (Bankr. N.D. Tex. Case No. 10-47483); V-MX Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47484); and Vitro Packaging, LLC (Bankr. N.D. Tex. Case No. 10-47485). A bankruptcy judge in Fort Worth, Texas, denied involuntary Chapter 11 petitions filed against four U.S. subsidiaries. On April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro America LLC and three other U.S. subsidiaries -- that were subject to the involuntary petitions into voluntary Chapter 11. The Texas Court on April 21 denied involuntary petitions against the eight U.S. subsidiaries that didn't consent to being in Chapter 11. Kurtzman Carson Consultants is the claims and notice agent to Vitro America, et al. Alvarez & Marsal North America LLC is the Debtors' operations and financial advisor. The official committee of unsecured creditors appointed in the Chapter 11 cases of Vitro America, et al., has selected Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. WASHINGTON MUTUAL: FDIC Files Reservation of Rights --------------------------------------------------- BankruptcyData.com reports that the Federal Deposit Insurance Corporation - Receiver filed with the U.S. Bankruptcy Court a reservation of rights in response to Washington Mutual's official committee of equity security holders' motion for authority to commence and prosecute claims. According to BData, the document explains, "The Motion has been filed under seal, and counsel for the Equity Committee has declined the FDIC-Receiver's request for a copy of the sealed filing due to promises of confidentiality. Based on the Equity Committee's description of the relief requested in the Motion, the FDIC-Receiver does not anticipate that it will have an objection. However, because it has not seen the Motion itself, the FDIC- Receiver respectfully reserves its right to object to the Motion at the hearing thereon." About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. On Jan. 7, 2011, the U.S. Bankruptcy Court for the District of Delaware entered a 107-page opinion determining that the global settlement agreement, among certain parties including WMI, the Federal Deposit Insurance Corporation and JPMorgan Chase Bank, N.A., upon which the Plan is premised, and the transactions contemplated therein, are fair, reasonable, and in the best interests of WMI. Additionally, the Opinion and related order denied confirmation, but suggested certain modifications to the Company's Sixth Amended Joint Plan of Affiliated Debtors that, if made, would facilitate confirmation. Washington Mutual has filed with the Bankruptcy Court a Modified Sixth Amended Joint Plan and a related Supplemental Disclosure Statement. The Company believes that the Modified Plan has addressed the Bankruptcy Court's concerns and looks forward to returning to the Bankruptcy Court to seek confirmation of the Modified Plan. WHAT A GOOD DOG: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: What a Good Dog, LLC 295 Three Tun Road Frazer, PA 19355 Bankruptcy Case No.: 11-15694 Chapter 11 Petition Date: July 20, 2011 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Eric L. Frank Debtor's Counsel: Ashely M. Chan, Esq. James M. Matour, Esq. HANGLEY ARONCHICK SEGAL & PUDLIN One Logan Square, 27th Floor Philadelphia, PA 19103 Tel: (215) 496-7050 E-mail: achan@hangley.com jmatour@hangley.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 17 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/paeb11-15694.pdf The petition was signed by Carolyn Garson, vice president. WJO INC: Committee Seeks to Hire Pachulski as Replacement Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of the WJO, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Pennsylvania for authority to retain Pachulski Stang Ziehi & Jones LLP as replacement counsel to the Committee. The Firm is expected to render these services to the Committee: a. assisting, advising and representing the Committee in its consultations with the Debtor regarding the administration of this Case; b. assisting, advising and representing the Committee with respect to the Debtor's retention of professionals and advisors with respect to the Debtor's businesses and this Case; C. assisting, advising and representing the Committee in analyzing the Debtor's assets and liabilities, investigating the extent and validity of liens and participating in and reviewing any proposed asset sales, any asset dispositions, financing arrangements and cash collateral stipulations or proceedings; d. assisting, advising and representing the Committee in any manner relevant to reviewing and determining the Debtor's rights and obligations under leases and other executory contracts; e. assisting, advising and representing the Committee in investigating the acts, conduct, assets, liabilities and financial condition of the Debtor, the Debtor's operations and the desirability of the continuance of any portion of those operations, and any other matters relevant to this case or to the formulation of a plan; f. assisting, advising and representing the Committee in connection with any sale of the Debtor's assets. g. assisting, advising and representing the Committee in its participation in the negotiation, formulation, or objecting to any plan of liquidation or reorganization; h. advising the Committee on the issues concerning the appointment of a trustee or examiner under Section 1104; i. assisting, advising and representing the Committee in understanding its powers and its duties under the Bankruptcy Code and the Bankruptcy Rules and in performing other services as are in the interests of those represented by the Committee; j. assisting, advising and representing the Committee in the evaluation of claims and on any litigation matters, including avoidance actions; and j. providing such other services to the Committee as may be necessary in this Case. To the best of the Committee's knowledge, Pachulski is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. Subject to Court approval, compensation will be payable to Pachulski on an hourly basis, plus reimbursement of actual, necessary expenses and other charges. The current hourly rates charged by Pachulski for professional and paralegals employed by the Firm are: Partners $550-$950 Of Counsel $475 - $725 Associates $345 - $495 Paralegals $175 - $255 The professionals and paralegals presently designated to represent the Committee and their current standard hourly rates are: Bruce Grohsgal $705 per hour Bradford J. Sandier $675 per hour Peter J. Keane $345 per hour The attorney that will be primarily rendering services to the Committee is: Bradford J. Sandler, Esq. Pachulski Stang Ziehi & Jones LLP 919 North Market Street, 17th Floor Wilmington, Delaware 19801 Tel: (302) 778-6424 E-mail: bsandler@pszjlaw.com Tristate Capital Bank has filed an objection to the application to employ Pachulski Stang as counsel to the Committee because retention of proposed replacement counsel is not in the best interest of the estate and would result in unnecessary duplication of services and a waste of estate resources. On January 21, 2011, the Committee filed an application to retain Keifer and Tsarouhis, LLP, as counsel to the Committee, which was approved on Feb. 24, 2011. On July 5, 2011, the proposed replacement counsel filed a withdrawal of appearance on behalf of Tsarouhis and advised that Tsarouhis would no longer be representing the Committee. However, Tsarouhis has not filed a motion to withdraw as counsel to the Committee. The Application to employ Pachulski appears substantially the same regarding the scope of services to be provided as the original Committee application filed six months earlier. However, the application does not provide any facts and circumstances disclosing the need for replacement of counsel at this stage of the case, if any, and the benefit to the estate, particularly the unsecured creditors, associated with replacing counsel at this late stage in the case. Tristate Capital Bank is represented by: Jennifer R. Hoover, Esq. Benesch Friedlander Coplan & Aronoff LLP 1650 Market Street, Suite 3628 Philadelphia, Pennsylvania 19103 Phone: (267) 207-2947 Fax: (267) 207-2949 About WJO Inc. Bristol, Pennsylvania-based WJO, Inc., operates six family practices located in Newtown, Bristol, Bensalem, Bustleton, South Philadelphia, and Bethlehem, Pennsylvania and consists of Board Certified Osteopathic Physicians specializing in Family Medicine. Prior to the petition date, and to allow the Company to restructure effectively, HyperOx Inc., HyperOx I, LP, HyperOx III, LP, and East Coast TMR, Inc., were merged into WJO. WJO filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 10-19894) on Nov. 15, 2010. The Debtor disclosed $19,923,802 in assets and $6,805,255 in liabilities as of the Chapter 11 filing. Holly Elizabeth Smith, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., serve as the Debtor's bankruptcy counsel. Pond Lehocky Stern Giordano serves as the Debtor's special counsel to represent it in worker's compensation proceedings pertaining to the Therapeutic Magnetic Resonance treatments. Attorneys at Keifer & Tsarouhis LLP serve as counsel to the official committee of unsecured creditors. ParenteBeard LLC serves as the Committee's accountant and financial advisor. The United States Trustee has appointed David Knowlton as patient care ombudsman in the case. The Ombudsman is represented in the case by Karen Lee Turner, Esq., at Eckert Seamans Cherin & Mellott, LLC, as counsel. Tristate Capital Bank, the cash collateral lender, is represented in the case by lawyers at Benesch Friedlander Coplan & Aronoff LLP. W.R. GRACE: Completes Acquisition of De Neef Conchem Group ---------------------------------------------------------- Grace Construction Products, an operating segment of W. R. Grace & Co. (NYSE: GRA), announced that it has acquired the De Neef Conchem Group, a privately-owned group of companies that develop waterproofing products for the construction industry. Financial terms of the transaction were not disclosed. De Neef Conchem produces preventative and remedial waterproofing products and concrete protection and repair products. These products are manufactured in Belgium, Spain and the United States and are sold throughout the world. Headquartered in Belgium, De Neef Conchem has been in business for more than 30 years and has over 100 employees. "De Neef Conchem's product lines complement Grace's structural waterproofing and building envelope portfolio by adding a variety of new technologies. The acquisition places us in an excellent position to offer increased value to our customers," said Andrew Bonham, President of Grace Construction Products. This acquisition is part of Grace Construction Products' ongoing growth strategy focused on acquiring companies in high margin segments of the construction industry, opening new manufacturing facilities in emerging regions, and entering into alliances with partners that can accelerate the extension of the Grace brand into new markets. In addition to this transaction, Grace recently acquired Wuhan Meilixin New Building Materials Co., Ltd., a manufacturer of waterproofing products located in China. The company has also opened seven manufacturing sites in emerging regions since 2010. "Our investment in De Neef Conchem improves our global waterproofing position and supports our strategy to expand into new market segments with highly innovative products for the industry," added Jens Ebinghaus, Vice President and General Manager - Europe, Middle East, Africa and India for Grace Construction Products. About Grace Construction Products Grace Construct ion Products is a world-leading provider of construction chemicals and building materials that are used to enhance the durability, strength and appearance of structures all over the world. Products include concrete admixtures, fibers, surface treatments and liquid pigments, additives for cement processing, and fire protection, waterproofing and masonry products. More information is available online at http://www.graceconstruction.com. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring effort. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on Jan. 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: EPA to Run Tests on Libby Wood Chips ------------------------------------------------ Montana's senior U.S. Senator Max Baucus secured a commitment from the U.S. Environmental Protection Agency (EPA) that it will conduct additional testing to determine whether wood chips distributed widely in Libby, Montana, and beyond pose a health risk. The commitment comes in response to Sen. Baucus' July 6th inquiry after press reports http://researcharchives.com/t/s?7684 indicated the wood chips could be contaminated with asbestos. "Priority number one is making sure folks are safe, and these new tests will help us figure out if the wood chips are dangerous and whether more steps need to be taken to protect the community," Sen. Baucus said. "I'm watching to make sure the tests are performed thoroughly and transparently, and I'll be here to hold EPA's feet to the fire and make sure their response is up to par. We've got to get to the bottom of this quickly so Libby can continue to heal and begin to prosper." In a letter to Sen. Baucus, available http://bankrupt.com/misc/WRG_BaucusLetter_07142011.pdfEPA's Regional Administrator committed to: 1. Perform activity based sampling specific to Libby homeowners who've been exposed to the bark. This testing is in addition to earlier tests performed only on mill site workers; 2. Reanalyze wood chips samples with a new methodology that can quantify the asbestos fibers found. Earlier tests were inconclusive as to the level of asbestos present in the wood chips; and 3. Conduct toxicology assessments for both cancer and non-cancer health effects. EPA will use these results to complete a thorough risk assessment and determine a plan for handling the wood chips moving forward. Sen. Baucus also met with EPA Administrator Lisa Jackson http://baucus.senate.gov/?p=press_release&id=578earlier this month to discuss the issue face-to-face. Sen. Baucus and his staff will also continue to press EPA for all documentation related to the wood chips and comb through the materials carefully to help find answers for the people of Libby. Sen. Baucus' original letter to EPA is available here http://bankrupt.com/misc/WRG_BaucusLetter_07062011.pdf Additional background on Sen. Baucus' longstanding efforts to secure declaration of a Public Health Emergency in Libby: Sen. Baucus has been a long-time champion of asbestos awareness in his efforts to declare the mining tragedy in Lincoln County a public health emergency and make sure folks there have access to the clean-up tools they need. Sen. Baucus also included three provision in the Affordable Care Act to ensure asbestos victims in Libby have access to the health care they are entitled to as residents of a public disaster emergency site: 1. In Spring 2010 http://baucus.senate.gov/?p=video&id=59 as part of Sen. Baucus' provisions, victims of asbestos exposure in Lincoln County began getting care under Medicare. 2. In March 2011 http://baucus.senate.gov/?p=press_release&id=394 Sen. Baucus announced the application process was open for the screening-grant awarded to CARD. 3. In June 2011 http://baucus.senate.gov/?p=press_release&id=533 Sen. Baucus announced additional benefits for Libby asbestos victims, such as home care services and special medical equipment not normally covered under Medicare. Since news reports first linked widespread deaths and illness to exposure to deadly asbestos fibers at the defunct W.R. Grace and Co. mine, Sen. Baucus has visited Libby more than 20 times, secured millions for healthcare and cleanup, brought numerous White House cabinet secretaries to the town, helped save the CARD clinic, and has dogged the EPA to keep cleanup efforts moving forward. As far back as 1999, Sen. Baucus wrote a letter to then Secretary of Health and Human Services Donna Shalala requesting immediate medical help and assistance to the area. He further lambasted the EPA's decision to not declare a Public Health Emergency, calling it an "outrage." In 2008, Sen. Baucus released a report detailing a 2002 attempt by the EPA to declare a Public Health Emergency in Libby that was thwarted by the previous Administration's Office of Management and Budget. And on June 17, 2009, due in large part to Sen. Baucus' efforts, the EPA declared its first ever public health emergency in Libby, Montana. Earlier this year Sen. Baucus was announced as the 2011 Tribute of Hope Award http://baucus.senate.gov/?p=press_release&id=299 recipient by the Asbestos Disease Awareness Organization (ADAO) for his tireless efforts fighting on behalf of residents of Libby, Lincoln County and Asbestos victims everywhere. In March, the Senate unanimously passed Sen. Baucus' resolution to designate the first week of April 2011 as "Asbestos Awareness Week" http://baucus.senate.gov/?p=press_release&id=359and call attention to Libby and other victims of asbestos-related disease. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring effort. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on Jan. 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: To Present at Jefferies Conference on Aug. 9 -------------------------------------------------------- W. R. Grace & Co. (NYSE: GRA) announced that Hudson La Force, the company's Senior Vice President and Chief Financial Officer, is scheduled to present at the Jefferies 2011 Global Industrial and A&D Conference in New York City on Tuesday, August 9. Scheduled to begin at 2:30 p.m. EDT, the presentation will be simultaneously webcast and posted on the company's Web site. To listen to the audio webcast or to view the presentation slides, go to http://www.grace.comand click the webcast link in the Investor Information section. A replay of the presentation will be available until November 9, 2011. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring effort. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on Jan. 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * Bank Escapes Injunction for Faulty Mortgage Claims ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that while the evidence was "plentiful" that a bank systemically filed proofs of claim with inflated amounts owing on mortgages, the U.S. Court of Appeals in New Orleans ruled that the bankruptcy judge did not have jurisdiction to enter an injunction compelling the bank to review claims back to 2007 and file corrections. The case involved Wells Fargo Bank NA and an elderly bankrupt woman whose tenacious lawyer demanded the bank provide backup justifying the amount claimed as owing on a defaulted mortgage. The case is Wells Fargo Bank NA v. Steward (In re Stewart), 09-30832, U.S. 5th Circuit Court of Appeals (New Orleans). * Three Bank Failures Bring Year's Total to 58 ---------------------------------------------- On July 22, two banks in Florida and one in Colorado failed. The three failures will cost the Federal Deposit Insurance Corp. $256.3 million. Together, the three banks had deposits of $1.22 billion, the FDIC said. There have been 58 bank failures so far this year, compared with 157 for the entire 2010. The failures in 2010 were the most since 1992, when 179 institutions were taken over by regulators. 2011 Failed Banks List The FDIC was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks that agreed to assume the deposits of most of the closed banks. The FDIC also entered into loss-share transactions on assets bought by the banks. For this year, the failed banks are: Loss-Share Transaction Party FDIC Cost Assets of Bank That Assumed to Insurance Closed Bank Deposits & Bought Fund Closed Bank (millions) Certain Assets (millions) ----------- ----------- ----------------- ----------- Bank of Choice $1,070.0 Bank Midwest, N.A. $213.6 LandMark Bank of Fla. $275.0 American Momentum $34.4 Southshore Community $46.3 American Momentum $8.3 Summit Bank $72.0 The Foothills Bank $11.3 First Peoples Bank $228.3 Premier American Bank $7.4 One Georgia Bank $186.3 Ameris Bank $44.4 High Trust Bank $192.5 Ameris Bank $66.0 Colorado Capital $717.5 First-Citizens Bank $283.8 First Chicago Bank $959.3 Northbrook Bank $284.3 Signature Bank $66.7 Points West Community $22.3 Mountain Heritage $103.7 First American Bank $41.1 First Commercial Bank $98.6 Stonegate Bank $28.5 McIntosh State Bank $339.9 Hamilton State Bank $80.0 Atlantic Bank and Trust $208.2 First Citizens Bank $36.4 First Heritage Bank $173.5 Columbia State $34.9 First Georgia Banking $731.0 CertusBank $156.5 Atlantic Southern $741.9 CertusBank $273.5 Summit Bank $142.7 Columbia State $15.7 Coastal Bank $129.4 Premier American Bank $13.4 Community Central $476.3 Talmer Bank & Trust $183.2 The Park Avenue Bank $953.3 Bank of the Ozarks $306.1 Cortez Community Bank $70.9 Florida Community Bank $18.6 First National Bank $352.0 Florida Community Bank $42.9 First Choice Community $308.5 Bank of the Ozarks $92.4 Heritage Banking $224.0 Trustmark National $49.1 Rosemount National $37.6 Central Bank $3.6 Nexity Bank $793.7 AloStar Bank of Commerce $175.4 New Horizons Bank $110.7 Citizens South Bank $30.9 Bartow County Bank $330.2 Hamilton State Bank $69.5 Superior Bank $3,000.0 Superior Bank, N.A. $259.6 Nevada Commerce Bank $144.9 City National Bank $31.9 Western Springs $186.8 Heartland Bank $31.0 Bank of Commerce $163.1 Advantage National $41.9 Legacy Bank $190.4 Seaway Bank and Trust $43.5 First Nat'l Bank of Davis $90.2 The Pauls Valley National $26.5 Valley Community Bank $123.8 First State Bank $22.8 Citizens Bank $214.3 Heritage Bank $59.4 San Luis Trust $332.6 First California $96.1 Habersham Bank $387.6 SCBT National $90.3 Charter Oak Bank $120.8 Bank of Marin $21.8 Sunshine State $125.5 Premier American $30.0 Badger State Bank $83.8 Royal Bank $17.5 Canyon National $210.9 Pacific Premier Bank $10.0 Peoples State Bank $390.5 First Michigan Bank $87.4 American Trust Bank $238.2 Renasant Bank $71.5 Community First $51.1 Northbrook Bank $11.7 North Georgia Bank $153.2 BankSouth $35.2 First Community Bank $2,310.0 U.S. Bank, N.A. $260.0 FirsTier Bank $781.5 No Acquirer $242.6 Evergreen State $246.5 McFarland State $22.8 The First State Bank $43.5 Bank 7 $20.1 The Bank of Asheville $195.1 First Bank $56.2 CommunitySouth Bank $440.6 Certus Bank $46.3 Enterprise Banking $100.9 [No Acquirer] $39.6 United Western Bank $2,050.0 First-Citizens Bank $312.8 Oglethorpe Bank $230.6 Bank of the Ozarks $80.4 Legacy Bank, Arizona $150.6 Enterprise Bank & Trust $27.9 First Commercial Bank $598.5 First Southern Bank $78.0 In 2010, there were 157 failed banks, compared with 140 in 2009 and just 25 for 2008. A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html 884 Banks in Problem List The FDIC said for all of 2010, mergers absorbed 197 institutions, while 157 insured commercial banks and savings institutions failed. This is the largest annual number of bank failures since 1992, when 181 institutions failed. The number of institutions on the FDIC's "Problem List" increased from 860 in the third quarter to 884 in the fourth quarter. There were 775 banks on the list at the end of the first quarter and 829 at June 30. Total assets of "problem" institutions increased from $379 billion at Sept. 30, 2010, to $390 billion at the end of the fourth quarter. The assets though are below the $403 billion reported at year-end 2009. FDIC Chairman Sheila C. Bair notes the rate of increase in the number of "problem" banks has declined in each of the past four quarters. Thirty insured institutions failed during the fourth quarter, bringing the total number of failures for the full year to 157. "As we have repeatedly stated, we believe that the number of failures peaked in 2010, and we expect both the number and total assets of this year's failures to be lower than last year's," added Bair. Problem Institutions Failed Institutions -------------------- ------------------- Year Number Assets (Mil) Number Assets (Mil) ---- ------ ------------ ------ ------------ 2010 884 $390,017 157 $92,085 2009 702 $402,800 140 $169,700 2008 252 $159,405 25 $371,945 2007 76 $22,189 3 $2,615 2006 50 $8,265 0 $0 2005 52 $6,607 0 $0 2004 80 $28,250 4 $170 Federal regulators assign a composite rating to each financial institution, based upon an evaluation of financial and operational criteria. The rating is based on a scale of 1 to 5 in ascending order of supervisory concern. "Problem" institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. Depending upon the degree of risk and supervisory concern, they are rated either a "4" or "5." The number and assets of "problem" institutions are based on FDIC composite ratings. Prior to March 31, 2008, for institutions whose primary federal regulator was the OTS, the OTS composite rating was used. * Global Corporate Default Tally Up To 19 So Far in 2011 -------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on U.S.-based restaurateur Real Mex Restaurants Inc. to 'D' last week after it missed its interest payment on its secured notes. This action raises the 2011 global corporate default tally to 19, said an article published Friday by Standard & Poor's Global Fixed Income Research, titled "Global Corporate Default Update (July 14 - 20, 2011) (Premium)." Of the total, 12 issuers were based in the U.S., two each were based in Canada and New Zealand, and one each was based in the Czech Republic, France, and Russia. By comparison, 46 global corporate issuers had defaulted by this time in 2010. Of these defaulters, 33 were U.S.-based issuers, two were European issuers, four were from the emerging markets, and seven were in the other developed region (Australia, Canada, Japan, and New Zealand). Eight of this year's defaults were due to missed interest or principal payments and six were due to distressed exchanges--both among the top reasons for default in 2010. Of the remaining five, three issuers defaulted after they filed for bankruptcy, another had its banking license revoked by its country's central bank, and the fourth was forced into liquidation as a result of regulatory action. Of the defaults in 2010, 28 defaults resulted from missed interest or principal payments, 25 resulted from Chapter 11 and foreign bankruptcy filings, 23 from distressed exchanges, three from receiverships, one from regulatory directives, and one from administration. * No U.S. Default, Experts Said at DBR's Annual Roundtable ---------------------------------------------------------- Nick Elliott, writing for Dow Jones' Daily Bankruptcy Review, reports that Maria Boyazny of MB Global Partners, Stephanie Wickouski of Bryan Cave, Bob Nabholz of Duff & Phelps and Adam Rogoff of Kramer Levin said at DBR's annual roundtable held at its offices in New York City, they do not believe the U.S. would default on its debt. According to DBR, Mr. Nabholz said, "They'll figure a way out. . . . There will never be a technical default on Treasurys. That coupon will be made, the payments will be made. I just think it's Washington at its worst." * Consumers Hit by Crisis Slow to Embrace Banks New Credit Product ------------------------------------------------------------------ There is little interest in a new consumer credit product being offered by banks to help customers restore credit ratings battered by the financial crisis, according to a new survey from the Deloitte Center for Financial Services. Despite heavy marketing by banks, only 4 percent of first-time defaulters - an emerging customer segment Deloitte is tracking - are extremely interested in obtaining a secured credit card according to the survey. A secured credit card requires consumers to make a deposit against a line of credit on the account or is linked to a savings account and that is designed to help them improve their credit ratings. Overall, less than 1 in 5 consumers in the segment (18 percent) have any real interest in the product. The Deloitte Center for Financial Services defines first-time defaulters as consumers who have suffered a serious negative credit situation for the first time since mid-2008, such as delinquency, foreclosure, bankruptcy and charge-offs. More than 1 in 10 consumers overall (11 percent) fall into this category in the latest survey, conducted in April and May, mirroring findings from a Deloitte study in 2010. "Consumers are struggling with the repercussions of the faltering economy," said Andrew Freeman, executive director of the Center for Financial Services, Deloitte LLP. "The significance of this survey is that it shows little change in the overall level of first-time defaulters." Freeman added, "One of the biggest challenges today is how banks price their products for risk. A secured credit card is one such product that a number of lenders are offering first-time defaulters. The expectation - based on historical experience - is that secured cards and other alternative credit products will be the only source of consumer credit for individuals who have had significant credit trouble. However, this group appears to have continued access to revolving credit products at this time." The survey also shows a "knock-on effect" - a secondary, often unintended consequence - taking place among some first-time defaulters as expense obligations mount and consumers battle reduced income. While reduced income and unemployment remain top concerns for first-time defaulters, they now also have to contend with growing medical bills. "When you lose your job, you often lose your health insurance coverage after six months or a year. The reality of this and the shift in debt obligation priorities are reflected in the numbers," said Freeman. Additional survey findings among first-time defaulters include: More than half plan to pay down their overall debt over the next 12 months - a positive sign. Consumers just above the subprime credit score range are defaulting for the first time more frequently than consumers in Deloitte's August 2010 survey. Recent first-time defaulters have more trust in financial institutions than those defaulting between September 2008 and August 2010; overall two-thirds of first-time defaulters are satisfied with their primary bank. Perceived poor service and high fees are motivators for first-time defaulter to switch lenders though few are doing so. Among the broader group of almost 3,500 consumers in this survey, three other survey findings stand out: Although satisfaction with primary banks is slightly lower since August 2010, overall most consumers say they trust their primary bank. As for confidence levels in financial institutions outside of their primary bank, trust is generally low, especially among larger banks. Only about half of respondents expect to be treated as valuable customers by their lenders. Nearly half the larger survey sample has not obtained any new credit product since September 2008 and only 1 in 5 (20 percent) are likely to pursue credit over the next 12 months. This online survey, with a total sample of 3,490 respondents, was conducted in the spring of 2011 by Harris Interactive on behalf of the Deloitte Center for Financial Services. Survey respondents are at least 18 years old and have a personal checking account. Respondents were distributed across various geographic regions, income, age and gender, and included a group of those who defaulted for the first time since September 2008. The survey's margin of error is 2 percent. As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. * Cohen & Grigsby Taps Ryan Colombo to Labor & Employment Group --------------------------------------------------------------- Cohen & Grigsby, a business law firm with headquarters in Pittsburgh, PA and an office in Bonita Springs, FL, disclosed the appointment of Ryan Colombo as an associate in the firm's Labor and Employment Group. In this capacity, Colombo will represent and counsel national and regional clients in a wide array of matters, including National Labor Relations Act matters, federal and state discrimination actions and compliance with various federal and state laws. "As we counsel our clients in an ever-changing and increasingly competitive business environment, we're pleased to have knowledgeable attorneys like Ryan on the Cohen & Grigsby team," said Jack Elliott, president and chief executive officer of Cohen & Grigsby. "I'm pleased to welcome him to the firm." Prior to joining Cohen & Grigsby, Colombo served as a labor and employment associate at Reed Smith LLP. Before his time at Reed Smith LLP, Colombo also served as a labor and employment associate at Buchanan Ingersoll & Rooney. Colombo earned his J.D. from the University of Pittsburgh and his Bachelor of Arts in political science and history from Syracuse University. About Cohen & Grigsby Established in 1981 in Pittsburgh, PA, Cohen & Grigsby -- http://www.cohenlaw.com/-- is a business law firm with headquarters in Pittsburgh and an office in Bonita Springs, FL. Cohen & Grigsby attorneys cultivate a culture of performance by serving as business counselors as well as legal advisors to an extensive list of clients that includes private and publicly held businesses, nonprofits, multinational corporations, individuals and emerging companies. The firm has more than 130 lawyers in eight practice groups - Business & Tax, Labor & Employment, Immigration/International Business, Real Estate, Intellectual Property, Litigation, Bankruptcy & Creditors' Rights, and Estates & Trusts. * Kinetic Partners Expands Recovery & Restructuring Practice ------------------------------------------------------------ Kinetic Partners has added Mike Seery to the firm's growing corporate recovery and restructuring advisory practice. Mr. Seery brings twenty years of restructuring and investment banking experience to Kinetic Partners, where his responsibilities have included representing lenders, bondholders, and equity committees in both out-of-court restructurings and bankruptcy proceedings. He also has vast experience in asset sales and capital raisings, and in leading due diligence and valuation engagements. At Kinetic Partners, he will take an active role in furthering the growth of the firm's US-based restructuring practice. His role is part of the firm's increased focus on restructuring advisory, creditor's committees, business valuations and financings. Prior to joining Kinetic Partners, Mr. Seery was the Senior Vice President of Financial Restructuring at CRT Investment Banking. Before CRT, he also held senior roles with Chanin Capital Partners, Peregrine Fixed Income Limited and Merrill Lynch. "Mike is a highly respected professional in this industry and brings a great deal of both practical and technical experience into this role," said Geoff Varga, Member, Corporate Recovery and Restructuring at Kinetic Partners. "We are fortunate to have him join our team and we believe he will prove to be a great asset in the ongoing growth and development of the firm." Neil Morris, Member, Operational Risk, added: "We are delighted that Mike has joined our firm. His vast experience and sector expertise will significantly accelerate our expansion in the areas of restructuring advisory and business valuation." About Kinetic Partners Kinetic Partners is a global professional services firm providing regulatory consulting & compliance, corporate recovery & forensics, remedial, risk, tax and audit & assurance services to the asset management, investment banking and broking industries. Launched in 2005, Kinetic Partners has grown rapidly, and has a team of 110 across its five offices in London, Dublin, Cayman, New York and Geneva. Kinetic Partners services over 1,000 clients, and has attained a reputation as the leading provider of professional services to hedge funds worldwide. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- 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, 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 ***