/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110810.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, August 10, 2011, Vol. 15, No. 220 Headlines 12 BYFIELD: Taps Foley & Lardner as General Bankruptcy Counsel ADD TRADING: Case Summary & 20 Largest Unsecured Creditors AES EASTERN: S&P Lowers Ratings on $550-Mil. Certs. to 'CC' ALLIED IRISH: Intends to Delist ADSs from NYSE ALROSE KING: Sec. 341(a) Creditors' Meeting Set for Aug. 26 ALROSE KING: Status Conference Set for Sept. 1 ALROSE KING: Elevator Contractor Wants to Pursue State Court Suit ALTAIR NANOTECHNOLOGIES: Posts $3-Mil. Net Loss in 2nd Quarter ARLINGTON HOSPITALITY: Still in Fight With Lender, Seeks Dismissal ART COLLECTION: Judge Gargotta Dismisses Case of "Pawn Debtor" ASBURY AUTOMOTIVE: S&P Affirms Corporate Credit Rating at 'B+' AVION POINT: Files Schedules of Assets and Liabilities BABY TREND: Federal Circuit Rules on Patent Infringement Suit BARNES BAY: U.S. Trustee Appoints 4-Member Creditor's Panel BENEDETTO LLC: Case Summary & 5 Largest Unsecured Creditors BERNARD L MADOFF: Trustee Has Solution for Discovery Nightmare BILL JOHNSON'S: Case Summary & 20 Largest Unsecured Creditors BLOCKBUSTER INC: NCR Claims Legal Right to Internet Domain BLUEKNIGHT ENERGY: Reports $5.3 Million Net Loss in 2nd Quarter BOCA BRIDGE: Hires Gonano & Harrell as Special Counsel BOCA BRIDGE: Court Approves Lundy & Shacter as Accountant BRAND MANAGEMENT: Asks Court to Approve Avrom Vann Hiring BRAND MANAGEMENT: Status Conference Set for Aug. 15 BRAND MANAGEMENT: Sec. 341 Creditors' Meeting Set for Aug. 29 CAMP COOLEY: Taps Hall and Hall to Conduct Live Auction CARGO TRANSPORTATION: Court OKs DLA Piper as Committee Counsel CASCADIA PARTNERS: Could Not Develop Plan, Seeks Dismissal CATALYST PAPER: S&P Lowers Corporate to 'CCC' on Weak 2nd Qtr. CATHOLIC CHURCH: Milw. Clergy Opposes Proposed Investigation CENTRAL FALLS: S&P Affirms SPUR at 'C' After Bankruptcy Filing CHELLE CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors CHESTER HOLDINGS: S&P Assigns 'BB-' Corporate Credit Rating CHURCH OF THE FIRST: Case Summary & 17 Largest Unsecured Creditors CIRCLE ENTERTAINMENT: Incurs $1 Million Net Loss in June 30 Qtr. CITIZENS BANCORP: Reports $24.2-Mil. Net Income in 2nd Quarter CITY NATIONAL BANCSHARES: Incurs $1.5MM Net Loss in 1st Quarter CONGRESS SAND: Presidential Financial Hikes DIP Loan to $1.9-Mil. CONOLOG CORP: Issues $256,350 Promissory Note to Robert Benou CONTINENTAL COMMON: Has Until Aug. 31 to Use PNC Cash Collateral CORDIA COMMUNICATIONS: Adequate Assurance of Payment Deal OK'd CORELOGIC INC: Moody's Affirms Ba2 Corporate; Outlook Negative COVENANT INVESTMENTS: Participating Lender's Bid for Fees Denied CROWN MEDIA: Reports $21.7 Million Net Income in June Quarter DEB SHOPS: Aims to Secure $30-Mil. Loan for Post-Sale Operations DEB SHOPS: Committee Proposes Otterbourg as Lead Counsel DELPHI CORP: Court Finds No Loopholes in Assignment of Claim DELTA AIR: Posts $366 Mil. Net Income in Second Quarter DELTA AIR: Reports July 2011 Traffic Results DELTA AIR: Starts Codeshare Flights With Aerolineas DELTA PETROLEUM: Reports $534,000 Net Income in June 30 Quarter DELTATHREE INC: Incurs $1.6 Million Net Loss in Second Quarter DONALD HARTMANN: Victim's Amended Suit Survives Motion to Dismiss DSI HOLDINGS: Has Final OK to Borrow up to $21.7MM from Ableco DSI HOLDINGS: Can Employ Weil Gotshal as Counsel DYNAVAX TECHNOLOGIES: Posts $10.6-Mil. Net Loss in 2nd Quarter DYNEGY HOLDINGS: Delaware Supreme Court Rejects PSEG Appeal DYNEGY POWER: Moody's Assigns B2 Rating to $1.1-Mil. Term Loan DYNEGY INC: Incurs $116 Million Net Loss in Second Quarter EAST COAST: Case Summary & 20 Largest Unsecured Creditors ELEPHANT & CASTLE: Committee Taps FTI Consulting as Fin'l Advisor ELEPHANT & CASTLE: Committee Taps Goulston & Storrs as Counsel EMDEON BUSINESS: S&P Lowers Corporate Credit Rating to 'B+' EMS ENGINEERED: Files for Chapter 7 Bankruptcy ENERJEX RESOURCES: James Loeffelbein Holds 7.11% Equity Stake FAIRFAX CROSSING: Wins Confirmation of Reorganization Plan FHG DEVELOPMENT: Files for Chapter 11 Bankruptcy Protection FRIEDMAN'S INC: Suit to Convert Debt to Equity Can Move Forward GALLOP ENTERPRISES: Ala. High Ct. Withdraws Opinion in 2 Appeals GARLOCK SEALING: Dismissal of 2 Asbestos Cases Reversed GB HERNDON: Court Has Authority Over Counterclaims Amid Stern GENEVA MULTI-FAMILY: Court to Hear Lender's Dismissal Plea Aug. 17 GMX RESOURCES: Incurs $11.8 Million Net Loss in Second Quarter GREENMAN TECHNOLOGIES: Completes Sale of Unit to Irish Knight GREENWICH SENTRY: Plan Outline Centers on BLMIS Trustee Deals H&S JOURNAL: Has Deal With CA on Use of Cash Collateral HARRY & DAVID: Wins Court OK to Terminate 2,700 Pensions HAWAIIAN TELCOM: S&P Withdraws 'B-' Corporate Credit Rating HILTON NGUYEN: Case Summary & 20 Largest Unsecured Creditors HOMELAND SECURITY: Inks Forbearance Pact with YA Global HUDSON HEALTHCARE: To Get $11-Mil. from State to Pay Creditors INDYMAC BANCORP: Criminal Probes Said to Have Stalled INDUSTRIAL SUPPLIES: Files for Chapter 7 Bankruptcy JACKSON HEWITT: Court Confirms Plan Reorganization JEFFERSON, AL: Submits Counteroffer to Bondholders JIN SUK KIM TRUST: Court Rejects Bid to Dismiss Case LAFARGE NORTH AMERICA: Demoted to Top Junk by Moody's LAX ROYAL: MSCI Granted Relief From Stay as to L.A. Property LESLIE CONTROLS: Dismissal of 2 Asbestos Cases Reversed LENNY DYKSTRA: September Hearing On Grand Theft Auto Charges LEVEL 3: To Hold Advisory Vote on Exec. Compensation Every Year LITTLETON APARTMENTS: Taps Neligan Foley as Bankruptcy Counsel LOS ANGELES DODGERS: Judge OKs $150 Million DIP Loan from MLB LOS ANGELES DODGERS: Can Pay Up to $1.1-Mil Critical Vendor Claims MACCO PROPERTIES: Trustee Wants Redmond & Nazar for Parkwood Suit MACCO PROPERTIES: Bellingham & Loyd Okayed to Represent Trustee MACCO PROPERTIES: Christopher Stein OK'd as Trustee's Counsel MAUI LAND: Incurs $2.4 Million Net Loss in June 30 Quarter METROPARK USA: Can Use Prepetition Lenders Cash Until Aug. 31 MT. VERNON PROPERTIES: Wants to Use Rents from Properties NAPA HOME: Teters Floral Acquires Core Assets NAVISTAR INTERNATIONAL: To Close Manufacturing Plant in Ontario NEBRASKA BOOK: Three Members Resign from Creditors Committee NETWORK SOLUTIONS: S&P Puts 'B' Corporate Rating on Watch Neg. NEUROLOGIX INC: Amends Sublicense Agreement with Diamyd NEW CENTURY FINANCIAL: Criminal Probes Said to Have Stalled NEW ENTERPRISE: Moody's Downgrades CFR to B3; Outlook Negative NEW YORK STATE: S&P Cuts Rating on $16-Mil. Revenue Bonds to 'B' NEXSTAR BROADCASTING: Amends Senior Secured Credit Facility NON-INVASIVE MONITORING: Extends Hsu Gamma Credit Pact to 2012 NORTHCORE TECHNOLOGIES: To Release 2nd Quarter Results Friday NORTHEAST INDUSTRIES: Owner Hit With $250T Judgment in Suit O&G LEASING: Bank Seeks to Prohibit Use of Cash Collateral OLDE PRAIRIE: Daley and George OK'd for Tax Increment Financing OMAS INVESTMENT: Case Summary & 17 Largest Unsecured Creditors OVERLAND STORAGE: Amends Employment Pacts with Executive Officers PACIFICUS REAL: Taps Solomon Ross to Prepare 2010 Tax Returns PALM HARBOR: Files Chapter 11 Plan of Liquidation PARAMOUNT LIMITED: Receiver Says Bankruptcy Filed in Bad Faith PARAMOUNT LIMITED: Court Wants Combined Plan & Outline by Nov. 18 PENSON WORLDWIDE: Cut by Moody's to 'B2' on Continued Losses PENSON WORLDWIDE: S&P Affirms 'BB-' Counterparty Credit Rating PIERCE COMMERCIAL: 4 Former Employees Indicted for Conspiracy POST STREET: Stutman Treister Approved as Reorganization Counsel POST STREET: LZSH OK'd to Handle Disputes with PIL/Eurohypo POST STREET: Nossaman LLP Approved as Special Litigation Counsel PRECISION PARTS: Sets Oct. 28 Plan Confirmation Hearing PURSELL HOLDINGS: Has Until Sept. 6 to File Chapter 11 Plan PURSELL HOLDINGS: Wants to Use Morris & Janes Cash Collateral QUINCY MEDICAL: Creditors Committee Taps Duane Morris as Counsel QUINCY MEDICAL: Committee Taps Deloitte FAS as Financial Advisor REAL MEX: S&P Raises Corporate to 'CC' on Interest Payment RED DOOR: Voluntary Chapter 11 Case Summary REGIONS FIN'L: S&P Affirms 'BB+/B' Counterparty Credit Rating SALLY HOLDINGS: Reports $70.2 Million Net Earnings in Q3 SANMINA-SCI's: Fitch Affirms 'B+' Issuer Default Rating SEQUENOM INC: Incurs $20.9 Million Net Loss in Second Quarter SILVERSUN TECHNOLOGIES: Reports $2.7-Mil. Net Income in 2nd Qtr. SOUTH POINTE: Case Summary & 11 Largest Unsecured Creditors SITEBRAND INC: Obtains Revocation of Cease Trade Orders STATION CASINOS: S&P Assigns 'B' Corporate Credit Rating STORAGE CENTER: Case Summary & 4 Largest Unsecured Creditors STORY BUILDING: Disclosure Statement Hearing Continued to Oct. 20 TALON INTERNATIONAL: To Allow Issuance of Uncertificated Shares TAYLOR BEAN: FDIC Seeks Dismissal of $1.75BB BofA Lawsuit TEN X: Foster and Smith Approved to Handle Reorganization Case TERRESTAR CORP: DIP Loan Maturity Now Extended Until Sept. 30 TERRESTAR CORP: Committee Wants $5 Million Loan Tagged as Equity THERMOPYLAE LLC: Court Rules on Dispute With Landlord THORNBURG MORTGAGE: Litigation v. Luxury Mortgage Stayed TREY RESOURCES: Reports $2.3 Million Net Income in June 30 Qtr. USEC INC: Files Form 10-Q; Incurs $21.2-Mil. Q2 Net Loss UTE MESA: Taps Podoll & Podoll as Special Litigation Counsel VALLEJO, CA: Has Formal Plan Confirmation Order VIKING SYSTEMS: Incurs $860,100 Net Loss in Second Quarter VINEYARD AT SERRA: Taps Keller Williams/West as Property Broker VONAGE HOLDINGS: Moody's Withdraws 'B2' Corporate Family Rating WARNER MUSIC: Incurs $46 Million Net Loss in Fiscal 3rd Quarter WARNER MUSIC: Guarantees Payments of $150-Mil. Holdings Notes WASHINGTON MUTUAL: DOJ Closes Probe With No Criminal Charges WESTLAKE CHEMICAL: Moody's Reviews Low-B Ratings for Upgrade WILLIAM LINDSEY: Plan Violates Absolute Priority Rule WINDSOR PETROLEUM: Moody's Downgrades Debt Rating to 'Caa1' WS MINERAL: Files Schedules of Assets and Liabilities YRC WORLDWIDE: Michael Smid Retires as President and COO * Commercial and Individual Bankruptcies Down in July * Two Bank Failures Bring Year's Total to 63 * Mercer Island Man Pleads Guilty in Connection With Ponzi Scheme * SEC Scores Injunction Against Ex Birmingham, Ala. Mayor * Cadwalader Adds Leading Structured Finance Lawyer to Hong Kong * Hal Hirsch Joins Alvarez & Marsal to Head Risk Services Group * Kirkland Energy Transaction Pro Joins McDermott Will * Upcoming Meetings, Conferences and Seminars ********* 12 BYFIELD: Taps Foley & Lardner as General Bankruptcy Counsel -------------------------------------------------------------- 12 Byfield, LLC, asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Foley & Lardner LLP as general bankruptcy counsel. Foley & Lardner's retainer of $20,000 will be paid by the Debtor's principal and will be applied to its postpetition fees and expenses, after the postpetition fees and expenses are approved. To the best of the Debtor's knowledge, Foley & Lardner LLP is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About 12 Byfield, LLC Redding, Connecticut-based 12 Byfield, LLC, was formed in May 2007 to construct a single family residence at the property, 2.69 acres located at 12 Byfield Road, Greenwich, Connecticut. The Company filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-22740) on April 16, 2010. Richard J. Bernard, Esq., and Alissa M. Nann, Esq., at Baker & Hostetler LLP, assist the Company in its restructuring effort. The Company estimated $10 million to $50 million in assets and $1 million to $10 million in debts as of the Chapter 11 filing. ADD TRADING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: ADD Trading Inc. aka ADD Studio Inc. 70-30 80th Street, Building 36 Glendale, NY 11385 Bankruptcy Case No.: 11-46776 Chapter 11 Petition Date: August 5, 2011 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Joel B. Rosenthal Debtor's Counsel: Victor Tsai, Esq. LAW OFFICE OF VICTOR TSAI 254 Canal Street, Suite 4018 New York, NY 10013 Tel: (212) 625-9028 Fax: (212) 697-7777 E-mail: ourlawyers@aol.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/nyeb11-46776.pdf The petition was signed by Wenge He, president. AES EASTERN: S&P Lowers Ratings on $550-Mil. Certs. to 'CC' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on U.S. electricity generator AES Eastern Energy L.P.'s (AEE) $550 million pass-through certificates ($449 million outstanding) due 2029 to 'CC' from 'CCC'. The outlook remains negative. "We have also revised the recovery rating to '3' from '2', indicating average (50% to 70%) recovery of principal if a payment default occurs," S&P stated. Due to the high price of coal relative to electricity prices, AEE continues to see compression of dark spread margins (the spread between the cost of coal to generate a megawatt of electricity and the price at which it can be sold). "We estimate dark spreads for the balance of 2011 in the range of $6.5 per Megawatt-hour (MWh), which are not adequate to meet all fixed obligations," said Standard & Poor's credit analyst Aneesh Prabhu. "With forecasted energy prices still low, a hedge strategy continues to be uneconomical. In July 2011, the project drew on its rent service payment account and also drew on AES NY Surety's $30 million letter of credit (LOC) to fund operations. This LOC is due in October 2011. We have lowered the ratings to 'CC' from 'CCC' because we expect a restructuring in the near term." Toward the end of 2009, Eastern departed from its financial strategy of hedging a significant portion of its capacity and energy on a rolling three-year basis. Eastern did so because of uncertainty about the nature of carbon markets, and reduced liquidity in the power markets due to fewer participants. In the past, the strategy muted the potential volatility in commodity prices. AEE started 2010 with low hedged levels but sold gas forward to hedge some of its 2010 production. However, as power prices have continued their decline, AEE's debt service coverage ratios (DSCRs) have fallen commensurately. ALLIED IRISH: Intends to Delist ADSs from NYSE ---------------------------------------------- Allied Irish Banks, p.l.c., announced that its Board of Directors has resolved to delist its American Depositary Shares (ADSs), each representing ten ordinary shares, par value EUR0.01 per share, from the New York Stock Exchange, terminate the deposit agreement with The Bank of New York Mellon as depositary governing the ADSs and, in due course, terminate the registration of AIB's securities with the US Securities and Exchange Commission under the US Securities Exchange Act of 1934, in each case after the completion of the required legal steps. The Board of Directors made the decision in light of the increase in the Irish Government's shareholding to 99.8% on July 27, 2011, and the savings in costs and administrative efforts that would result from the delisting and any subsequent deregistration under the Exchange Act. AIB plans to file the related Form 25 with the SEC on or about Aug. 15, 2011. AIB expects the delisting to become effective at the close of business on or about Aug. 25, 2011, from which time AIB's ADSs will no longer be traded on the NYSE. Concurrently with or following delisting, AIB intends to terminate the ADS facility by terminating the ADS deposit agreement between AIB and the Depositary. The Depositary will contact ADS holders in due course with further information, including with regard to any further action to be taken. In due course, AIB also intends to deregister its securities and terminate its obligations under the Exchange Act by filing a Form 15F. AIB's aim is to meet the applicable criteria for deregistration of its securities. AIB reserves the right, for any reason, to delay these filings or to withdraw them prior to their effectiveness. AIB has not arranged for listing or registration on another US national securities exchange or for quotation of its securities in a US quotation medium, but expects that, after delisting the ADSs, its ordinary shares will continue to trade on the Enterprise Securities Market of the Irish Stock Exchange. Information required to be made available pursuant to Rule 12g3-2(b) under the Exchange Act will be made available on AIB's Web site at www.aibgroup.com. About Allied Irish Banks, p.l.c. Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a major commercial bank based in Ireland. It has an extensive branch network across the country, a head office in Dublin and a capital markets operation based in the International Financial Services Centre in Dublin. AIB also has retail and corporate businesses in the UK, offices in Europe and a subsidiary company in the Isle of Man and Jersey (Channel Islands). Since the onset of the global and Irish financial crisis, AIB's relationship with the Irish Government has changed significantly. As at Dec. 31, 2010, the Government, through the National Pension Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary shares of the Company (the share of the voting rights at shareholders' general meetings), 10,489,899,564 convertible non- voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On April 8, 2011, the NPRFC converted the total outstanding amount of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby increasing its holding to 92.8% of the ordinary share capital. In addition to its shareholders' interests, the Government's relationship with AIB is reflected through formal and informal oversight by the Minister and the Department of Finance and the Central Bank of Ireland, representation on the Board of Directors (three non-executive directors are Government nominees), participation in NAMA, and otherwise. As reported by the TCR on May 31, 2011, KPMG, in Dublin, Ireland, noted that there are a number of material economic, political and market risks and uncertainties that impact the Irish banking system, including the Company's continued ability to access funding from the Eurosystem and the Irish Central Bank to meet its liquidity requirements, that raise substantial doubt about the Company's ability to continue as a going concern. The Company reported a net loss of EUR10.16 billion on EUR1.84 billion of interest income for 2010, compared with a net loss of EUR2.33 billion on $2.87 billion of interest income for 2009. ALROSE KING: Sec. 341(a) Creditors' Meeting Set for Aug. 26 ----------------------------------------------------------- The U.S. Trustee for Region 2 will convene a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) in the bankruptcy case of Alrose King David LLC on Aug. 26, 2011, at 9:00 a.m. at Room 563, 560 Federal Plaza, in Central Islip, New York. Alrose King David LLC is a special entity established by the Alrose Group to own the 143-room, beachfront hotel property called the Allegria Hotel & Spa in Long Beach, Long Island. Alrose King David filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 11-75361) in Brooklyn on July 28, 2011, estimating between $10 million and $50 million in both debts and assets. Judge Dorothy Eisenberg presides over the case. Patrick T. Collins, Esq., at Farrell Fritz, P.C., serves as bankruptcy counsel. The petition was signed by Allen Rosenberg, managing member. ALROSE KING: Status Conference Set for Sept. 1 ---------------------------------------------- The Bankruptcy Court will hold a Status Conference in the bankruptcy case of Alrose King David LLC on Sept. 1, 2011, at 10:00 a.m. at Courtroom 760, in Central Islip, New York. Alrose King David LLC is a special entity established by the Alrose Group to own the 143-room, beachfront hotel property called the Allegria Hotel & Spa in Long Beach, Long Island. Alrose King David filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 11-75361) in Brooklyn on July 28, 2011, estimating between $10 million and $50 million in both debts and assets. Judge Dorothy Eisenberg presides over the case. Patrick T. Collins, Esq., at Farrell Fritz, P.C., serves as bankruptcy counsel. The petition was signed by Allen Rosenberg, managing member. ALROSE KING: Elevator Contractor Wants to Pursue State Court Suit ----------------------------------------------------------------- ThyssenKrupp Elevator Corp. asks the Bankruptcy Court to lift the automatic stay in the bankruptcy case of Alrose King David, LLC, so it may continue a state court breach of contract action pending in the Supreme Court of the State of New York, Nassau County, against the non-debtor defendants. The lawsuit involves an elevator installation contract and names the Debtor, Alrose Allegria, LLC, The Alrose Group, and East End Builders Group, Inc., as defendants. TKE said it received partial payment for its work but its final invoices totaling $227,931 were never paid, despite due demand. TKE also said it has already obtained judgment against the Debtor in a mechanic's lien foreclosure case in Nassau County, in an action entitled DCI Design Communications Inc. v. Alrose King David, LLC, Nassau County Index Number 24080/2009. That Judgment, entered on July 27, 2011, provides TKE with a money judgment of $314,257.52 and orders that Alrose's real property be sold to satisfy the Judgment. TKE has filed a proof of claim for that amount in the Debtor's bankruptcy case. TKE said it intends to dismiss the Debtor from the breach of contract action and proceed against the other parties. Attorney for ThyssenKrupp Elevator Corp. is: Arthur Russell, Esq. 14 Wall Street, 22nd floor New York, NY 10005-2101 - and - 661 Franklin Avenue Nutley, NJ 07110 Tel: (973) 661-4545 Fax: (973)661-4646 E-mail: arthur@attorneyrussell.com Alrose King David LLC is a special entity established by the Alrose Group to own the 143-room, beachfront hotel property called the Allegria Hotel & Spa in Long Beach, Long Island. Alrose King David filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 11-75361) in Brooklyn on July 28, 2011, estimating between $10 million and $50 million in both debts and assets. Judge Dorothy Eisenberg presides over the case. Patrick T. Collins, Esq., at Farrell Fritz, P.C., serves as bankruptcy counsel. The petition was signed by Allen Rosenberg, managing member. ALTAIR NANOTECHNOLOGIES: Posts $3-Mil. Net Loss in 2nd Quarter -------------------------------------------------------------- Altair Nanotechnologies Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $3.0 million on $476,000 of revenues for the three months ended June 30, 2011, compared with a net loss of $4.9 million on $1.5 million of revenues for the same period last year. For the six months ended June 30, 2011, the Company recorded a net loss of $8.9 million on $3.0 million of revenues, compared with a net loss of $11.0 million on $2.7 million of revenues for the first six months of 2010. The Company's balance sheet at June 30, 2011, showed $20.5 million in total assets, $8.0 million in total liabilities, and stockholders' equity of $12.5 million. Perry-Smith LLP, in Sacramento, California, expressed substantial doubt about Altair Nanotechnologies' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has incurred recurring losses from operations resulting in an accumulated deficit of $184,490,000 at Dec. 31, 2010. "Additionally, the Company experienced $15,172,000 in negative cash flows from operations during the year ended Dec. 31, 2010, resulting in a cash balance of $4,695,000 at Dec. 31, 2010." A complete text of the Form 10-Q is available for free at: http://is.gd/IXlMqH Reno, Nev.-based Nano Technologies Inc. (Nasdaq: ALTI) -- http://www.altairnano.com/-- a Canadian corporation, with principal assets and operations in the United States, whose primary business is developing, manufacturing and selling its nano-lithium titanate battery cells, batteries, battery packs, battery systems, and providing related design, installation and test services. Its primary focus is marketing its large-scale energy storage solutions to power companies and electric grid operators throughout the world. In addition, it markets its batteries to commercial vehicle manufacturers, which includes electric and hybrid-electric buses, and began expanding in 2010 into new industrial OEM markets. ARLINGTON HOSPITALITY: Still in Fight With Lender, Seeks Dismissal ------------------------------------------------------------------ BankruptcyData.com reports that Arlington Hospitality filed with the U.S. Bankruptcy Court a motion to dismiss its Chapter 11 bankruptcy cases. BData relates that the motion explains, "The Debtors filed their bankruptcy cases with the intent of conducting a going concern sale of their business pursuant to 11 U.S.C. Sec. 363(f) to maximize value for their stakeholders. They sought debtor-in- possession financing, found a buyer and had a sale approved and closed by January 2006 . . . As consideration for its assets, the Debtor received approximately $8 million in cash (including a settlement payment made by Cendant Corporation as part of the sale) and the assumption of the Debtors' mortgage liabilities totaling approximately $36 million." The motion continues, "During the sale process, the Debtors post- petition lender, Arlington L.F, LLC refused to fund its obligations under its loan agreement. Although the Debtor repaid the principal balance of the loan with interest upon the closing of the Section 363 sale, Arlington L.F., LLC demanded additional fees and expenses. This dispute resulted in two appeals to the District Court and an appeal to the Seventh Circuit, preventing the closing of this case. On March 3, 2011, the United States Court of Appeals for the Seventh Circuit entered a final judgment in favor of the Debtors and ruling that Arlington L.F., LLC had no right to recovery from the bankruptcy estate. Throughout this dispute, the Debtors and the Committee attempted on multiple occasions to reach a settlement with Arlington L.F., LLC to put an end to the dispute but to no avail." The Company concludes, "Dismissal of the case as opposed to conversion is in the best interests of the estate and its creditors as there is nothing left for a chapter 7 trustee do. The Committee supports conversion of the case." According to BData, the Company also filed a separate motion to abandon and destroy records. The Court scheduled an Aug. 29, 2011 hearing to consider the motions. About Arlington Hospitality Based in Arlington Heights, Illinois, Arlington Hospitality, Inc., dba Amerihost Properties, Inc., and its affiliates developed and constructed limited service hotels and owned, operated, managed and sold those hotels. The Company operated 15 AmeriHost Inn Hotels under leases from PMC Commercial Trust. Arlington Hospitality, Inc., serves as a guarantor under these leases. Arlington Inns Inc., an affiliate, filed for bankruptcy protection (Bankr. N.D. Ill. Case No. 05-24749) on June 22, 2005, the Honorable A. Benjamin Goldgar presiding. Arlington Hospitality and additional debtor-affiliates filed for chapter 11 protection on Aug. 31, 2005 (Bankr. N.D. Ill. Lead Case No. 05-34885), represented by Catherine L. Steege, Esq., at Jenner & Block LLP. Chanin Capital LLC served as the company's investment banker. David W. Wirt, Esq., at Winston & Strawn, represented the Official Committee of Unsecured Creditors. As of March 31, 2005, Arlington Hospitality reported $99 million in total assets and $94 million in total debts. The Debtors proposed a Joint Plan of Orderly Liquidation in August 2007. ART COLLECTION: Judge Gargotta Dismisses Case of "Pawn Debtor" -------------------------------------------------------------- The Hon. Craig A. Gargotta of the U.S. Bankruptcy Court for the Western District of Texas dismissed the Chapter 11 case of Art Collection, Inc., with prejudice to the right to re-file for one year, at the behest of Judy A. Robbins, the U.S. Trustee for Region 7. As reported in the June 28, 2011 edition of the Troubled Company Reporter, the U.S. Trustee sought the dismissal, contending that the Debtor was used as a pawn by its co-debtors and does not need reorganizing. She further contends that the Debtor's Chapter 11 case was filed solely to delay a lawsuit against the Debtor's co- debtors. The Debtor had no income in the past two years, and relied on its parent to pay its expenses, the U.S. Trustee pointed out. She noted that despite not having made a payment to its lienholder in over two years, the lienholder was not threatening the Debtor or its assets. In addition, the Debtor's property was not posted for foreclosure and the lienholder had not sued the Debtor for the collection of amounts owed. The co-debtors were 19 days away from a summary judgment hearing in a lawsuit which had been pending for almost eight months and if they prevailed at the summary judgment hearing, they were still set for trial approximately six weeks later, the U.S. Trustee relates. She contends that the co-Debtors were facing financial difficulties, yet they put the Debtor in bankruptcy to protect themselves by further delaying a nearly 18-month old lawsuit. The co-debtors seek to transfer the lawsuit to the Court, which would result in the Court deciding a lawsuit involving two non- debtor plaintiffs and 22 non-debtor defendants. The Debtor's sole shareholder is One Realco Corporation, which purchased 100% of the Debtor in December 2010 from American Realty Investors, Inc., a New York Stock Exchange traded company. Since 1998 the Debtor has owned a tract of real property situated in Travis County, Texas; the tract is approximately 257 acres. The property is undeveloped, but has water, waste water, and electricity connections. The Debtor values the property at $17 million, and the property secures debt of over $15 million owed to Dynamic Finance Corporation and approximately $165,000.00 owed to Propel Financial Services. American Realty and Prime Income Asset Management are listed on the Debtor's schedules as a co-Debtor on the debt owed to Dynamic Finance. Prime Income Asset Management paid the retainer to the Debtor's counsel. Creditors Dynamic Finance Corporation and Upper Wise Management Limited join in the U.S. Trustee's request to dismiss the Chapter 11 case. About Art Collection, Inc. Dallas, Texas-based Art Collection, Inc., filed for Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 11-10874) on April 7, 2011. Eric A. Liepins, Esq., at Eric A. Liepins P.C., serves as the Debtor's bankruptcy counsel. In its schedules, the Company disclosed that it owns 258 acres in Travis County, Texas, worth $17 million. The Debtor said that California-based Dynamic Finance Corp. holds a secured claim on the land for $15.3 million. Total debt is $15.77 million. ASBURY AUTOMOTIVE: S&P Affirms Corporate Credit Rating at 'B+' -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Duluth, Ga.-based Asbury Automotive Group Inc. to positive from stable and affirmed the ratings, including the 'B+' corporate credit rating. "We believe Asbury's demonstrated ability to expand earnings and lower leverage while it builds out infrastructure to gain scale benefits in its core light vehicle retail business, and signs of stabilizing new-vehicle demand, could help Asbury bring its key credit measures in line with our assumptions for a higher rating during the next year," said Standard & Poor's credit analyst Nancy Messer. "For an upgrade, we need to have higher confidence that Asbury will not engage in material debt-financed acquisitions or share repurchases that could erode credit measures." "We believe Asbury can control costs; it typically generates free cash flow after capital spending. In the next two years, we assume the company will reduce leverage as demand recovers, EBITDA improves, and cash becomes available for permanent debt reduction and lease buyouts. However, we recognize that Asbury will use cash to repurchase shares on an opportunistic basis," S&P related. Asbury's financial and credit measures have improved in the past year. The EBITDA margin rose to 4.5% for the 12 months ended June 30, 2011, compared with 3.7% for the prior 12 months. Lease- adjusted debt (excluding floorplan liabilities) to EBITDA has improved to 4.5% for the 12 months ended June 30, 2011, compared with 5.6x for the prior 12 months. "Reported EBITDA for the past 12 months, by our calculation, rose by about 26% period over period to $180.4 million, although adjusted balance-sheet debt rose 1% to $806 million. Still, adjusted debt to total capital fell to 72.2% as of June 30, 2011, down from 75.2% as of June 30, 2010. We expect the auto retailers, in general, to report positive free cash flow after capital spending. However, Asbury reported negative $35 million of free cash flow for the 12 months ended June 30, 2011 and negative $23 million for 2010. We recognize that Asbury's discretionary use of cash to pay down floorplan borrowings is resulting in negative cash flow and expect, for an upgrade, that cash flow excluding these discretionary payments would be positive for most 12-month periods," S&P stated. AVION POINT: Files Schedules of Assets and Liabilities ------------------------------------------------------ Avion Point West LLC filed with the U.S. Bankruptcy Court for the Middle District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $18,000,000 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $8,254,057 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $0 ----------- ----------- TOTAL $18,000,000 $8,254,057 About Avion Point West Based in Longwood, Florida, Avion Point West LLC and its affiliate, Orlando Country Aviation Services Inc., filed for Chapter 11 bankruptcy protection (Bank. M.D. Fla. Case Nos. 11-10364 and 11-10365) on July 8, 2011. Judge Karen S. Jennemann presides over the Debtors' cases. Frank M. Wolff, Esq., at Wolff Hill McFarlin & Herron PA, represents the Debtor. The Debtor estimated assets between $10 million and $50 million, and debts between $1 million and $10 million. The petitions were signed by James PA Thompson, the managing member. Mr. Thompson is the developer of Orlando Apopka Airport in northwest Orange County. During the past decade, Mr. Thompson has transformed Orlando Apopka Airport, on U.S. Highway 441 between Plymouth and Zellwood, from an old airfield called Orlando Country Airport into a complex of hangar condominiums whose owners now control the facility. BABY TREND: Federal Circuit Rules on Patent Infringement Suit ------------------------------------------------------------- The U.S. Court of Appeals for the Federal Circuit reversed rulings by the District Court in a patent infringement suit commenced by Joovy LLC against Target Corporation. On April 6, 2006, Joovy sued both Baby Trend Inc. and Target in the U.S. District Court for the Northern District of Texas, alleging that Baby Trend infringed U.S. Patent No. 5,622,375 by selling Sit-N-Stand(R) strollers to Target -- which in turn sold them to customers -- after inventor Albert Fairclough discontinued Baby Trend's license in August 2004. After Baby Trend's bankruptcy filing, the District Court on Nov. 17, 2009, severed Baby Trend from the action into a separate action, Joovy LLC v. Baby Trend Inc., No. 09-2012-F (N.D. Tex. filed Oct. 22, 2009), which is stayed pending the resolution of the bankruptcy proceedings. In the suit against Target, the retailer moved for judgment as a matter of law -- JMOL -- that claim 1 of the '375 Patent is invalid and that the '375 Patent is unenforceable due to inequitable conduct. The District court denied JMOL of invalidity but granted JMOL of unenforceability due to inequitable conduct. Joovy appeals and Target cross-appeals. In an Aug. 5, 2011 decision, the Federal Circuit reversed the District Court's denial of Target's motion for JMOL on the issue of anticipation of claim 1 of the '375 Patent and vacated the District Court's JMOL that the '375 Patent is unenforceable due to inequitable conduct. A copy of the Federal Circuit's ruling is available at http://is.gd/OQbzHsfrom Leagle.com. About Baby Trend Based in Ontario, California, Baby Trend Inc. filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 09-34090) on Oct. 9, 2009. Judge Sheri Bluebond presides over the case. Michael B. Reynolds, Esq., at Snell & Wilmer LLP, represents the Debtor. In its petition, the Debtor estimated assets and debts of $10 million to $50 million. BARNES BAY: U.S. Trustee Appoints 4-Member Creditor's Panel ----------------------------------------------------------- Roberta A. Deangelis, United States Trustee for Region 3, under 11 U.S.C. Sec. 1102(a) and (b), appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors of Barnes Bay Development Ltd. The Creditors Committee members are: 1. Exclusive Resorts Real Estate Holding II, LLC, ATTN: General Counsel, 1515 Arapahoe Street, Tower, 3, Suite 300, Denver CO 80202, Tel: (202) 776-1403, Fax: 202-776-1494 2. Joel Greenburg and Mary Gringlas, 727 Merion Square Road, Gladwyne PA 19035, Tel: (610) 617-2610, Fax: (610) 617-2905 3. Carillion Construction (West Indies) Ltd., ATTN: Christopher Buck, Esq. Brickfield Road, Carapachaima, Trinidad, West Indies, Tel: (905) 532-5377 4. Jacob Stepan, 40 Roc Etam Road, Randolph NJ 07869, Tel: (917) 361-2376, Fax: (973) 442-0558 About Barnes Bay Beverly Hills, California-based Barnes Bay Development Ltd., owns the Viceroy Anguilla Resort & Residences on the British West Indies island of Anguilla. Barnes Bay and two affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-10792) on March 17, 2011, to facilitate the sale of the resort. Barnes Bay disclosed $3,331,282 in assets and $481,840,435 in liabilities as of the Chapter 11 filing. Akin Gump Straus Hauer & Feld LLP is the Debtors' bankruptcy counsel, and Keithley Lake & Associates is the Debtors' special Anguillan counsel. Kurtzman Carson Consultants LLC is the Debtors' claims, noticing, solicitation and balloting agent. The U.S. Trustee appointed five members to the official committee of unsecured creditors in the Debtors' cases. Brown Rudnick LLP serves as the Committee's co-counsel, and Womble Carlyle Sandridge & Rice, PLLC, as its Delaware co-counsel. C.R. Hodge & Associates is the Committee's foreign counsel. FTI Consulting, Inc., serves as the Committee's financial advisors. BENEDETTO LLC: Case Summary & 5 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Benedetto, LLC 1303 S. Western Avenue Los Angeles, CA 90006 Bankruptcy Case No.: 11-43214 Chapter 11 Petition Date: August 4, 2011 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Thomas B. Donovan Debtor's Counsel: Dana M. Douglas, Esq. 11024 Balboa Blvd #431 Granada Hills, CA 91344 Tel: (818) 360-8295 Fax: (818) 360-9852 E-mail: dmddouglas@hotmail.com Scheduled Assets: $2,400,000 Scheduled Debts: $4,738,430 A list of the Company's five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb11-43214.pdf The petition was signed by Atef "Mike" Abdou, managing/sole member. BERNARD L MADOFF: Trustee Has Solution for Discovery Nightmare -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee liquidating Bernard L. Madoff Investment Securities Inc. is proposing new procedures for dealing with the document-production nightmare created by the 900 lawsuits he filed against almost 5,000 defendants. According to the report, before starting the lawsuits, the trustee took 108 examinations of witnesses under oath and required customers and those who dealt with Mr. Madoff to turn over more than 5 million documents. Most of the information he received is covered by confidentiality agreements and can't be given to anyone without permission from the person who gave the information to the trustee in the first place. The report relates that the trustee now is receiving the first requests to turn over documents to those he sued. Once all defendants are demanding documents, the trustee anticipates he would be saddled with "enormous costs and administrative burdens" were he required to obtain permission for every document he needs to turn over. According to Mr. Rochelle, the trustee filed papers last week in bankruptcy court setting up a hearing on Sept. 7 where he will ask the judge to appoint two special masters to resolve disputes over producing documents and contentions that some documents are secret and shouldn't be shown to anyone. In addition, the trustee, the Bloomberg report adds, wants to do away with all existing confidentiality agreements. In their place, he would put all documents received from outsiders in a separate electronic document production room, where access can only be gained by signing a confidentiality agreement. All information previously given to the trustee by third parties could be examined by creditors in the document room, unless there's a new objection filed by the party that originally produced a document, according to the report. 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. BILL JOHNSON'S: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Bill Johnson's Restaurants, Inc. dba Bill Johnson's Big Apple Restaurants 2706 West Fairmont Avenue Phoenix, AZ 85017 Bankruptcy Case No.: 11-22441 Chapter 11 Petition Date: August 4, 2011 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Shelton L. Freeman, Esq. DECONCINI MCDONALD YETWIN & LACY PC 6909 East Main St. Scottsdale, AZ 85251 Tel: (480) 398-3100 Fax: (480) 398-3101 E-mail: tfreeman@lawdmyl.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/azb11-22441.pdf The petition was signed by Sherry Cameron, CEO. BLOCKBUSTER INC: NCR Claims Legal Right to Internet Domain ---------------------------------------------------------- Erik Gruenwedel at Home Media Magazine reports that NCR Corp. has filed a motion with the bankruptcy court overseeing the Chapter 11 dissolution of Blockbuster Inc., claiming it has a legal right to Internet domain name www.blockbusterexpress.com, a right it said should not be included in separate litigation regarding a license with Blockbuster to operate 10,000 Blockbuster Express rental kiosks. According to the report, on March 2, 2009, NCR and Blockbuster signed a license agreement regarding the domain right to the Blockbuster name for a nascent kiosk business venture. After Dish acquired Blockbuster stores and related brand rights from bankrupt Blockbuster Inc., it has sought to terminate the license agreement with NCR Corp. Home Media Magazine notes that in bankruptcy law an executory contract is a contract in which continuing obligations exist on both sides of the contract. In this context a trustee may assume or reject any executory contract or unexpired lease subject to court approval, the report says. "As of the petition date in these Chapter 11 cases, the domain assignment was not an executory contract and, hence, cannot be assumed or rejected under the bankruptcy code," NCR wrote in the motion. About Blockbuster Inc. 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. BLUEKNIGHT ENERGY: Reports $5.3 Million Net Loss in 2nd Quarter --------------------------------------------------------------- Rod Walton at Tulsa World reports that Blueknight Energy Partners LP fell back into the red in the second quarter with a $5.3 million net loss. According to the report, the loss followed $2.6 million in earnings during the first quarter, Blueknight's first profit since former parent SemGroup LP went into Chapter 11 bankruptcy more than three years ago. Increased maintenance and legal expenses contributed to the net loss, Chief Operating Officer and President J. Michael Cockrell said in a statement. Tulsa World says Blueknight also sustained operating margin shortfalls in the crude-oil truck business. Mr. Cockrell, however, said he expected increased utilization of the company's Oklahoma pipeline business by parent Vitol Inc.'s marketing affiliate. The reports says Blueknight's overall revenue totaled $84 million for the first half of 2011, 12 percent higher than the $75.4 million for the first six months of 2010, according to the earnings report. Total expenses also jumped up $10 million over the same period last year. Blueknight Energy Partners is working with its general-partner controlling interests, held by Vitol and Charlesbank Capital Partners, on a refinancing deal. The initial refinancing agreement, however, was challenged by limited-partner investors who accused Blueknight, Vitol and Charlesbank of trying to dilute the limited-partner unitholders for their own interests. The report notes the company is holding a special meeting Sept. 14 in Oklahoma City to announce a proxy vote on an amended refinancing deal. About Blueknight Energy Blueknight Energy Partners, L.P. (Pink Sheets: BKEP) -- http://www.bkep.com/-- provides integrated terminalling, storage, processing, gathering and transportation services for companies engaged in the production, distribution and marketing of crude oil and asphalt product. It provides services for the customers, and its only inventory consists of pipeline linefill and tank bottoms necessary to operate the assets. It has three operating segments: crude oil terminalling and storage services, crude oil gathering and transportation services, and asphalt services. The Company reported a net loss of $23.79 million on $152.62 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $16.50 million on $156.77 million of total revenue during the prior year. The Company's balance sheet at March 31, 2011, showed $323.49 million in total assets, $358.56 million in total liabilities and a $35.06 million total partners' deficit. BOCA BRIDGE: Hires Gonano & Harrell as Special Counsel ------------------------------------------------------ Boca Bridge LLC seeks permission from the U.S. Bankruptcy Court for the Southern District of Florida to employ and retain Douglas E. Gonano, Esq. and the firm Gonano & Harrell, Chartered as special counsel for the Debtor. The firm can be reached at: Douglas E. Gonano, Esq. GONANO & HARRELL, CHARTERED 1600 S. Federal Highway, Suite 200 Fort Pierce FL 34950 The Debtor said it is essential to employ special counsel to assist in transaction matters in connection with or arising out the of the proposed restructuring of the existing first mortgage loan, including negotiating and drafting documents necessary or desirable to reflect real estate loan terms applicable to the restructuring and amended loan documents. The firm's Douglas E. Gonano, Esq., will charge the Debtor $485 per hour. About Boca Bridge LLC In August 2010, ten creditors owed $69,400 filed an involuntary Chapter 11 petition (Bankr. S.D. Fla. Case No. 10-34538) against Boca Bridge LLC, the owner of the Boca Raton Bridge Hotel. In November, the bankruptcy judge entered ruling placing the Boca Bridge LLC into Chapter 11. The Debtor disclosed $10,286,336 in assets and $11,850,060 in liabilities as of the Chapter 11 filing. BOCA BRIDGE: Court Approves Lundy & Shacter as Accountant --------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida authorized Boca Bridge LLC to employ Lundy & Shacter P.A. as accountant. The firm will: a) review of the Debtor's books and records; b) prepare the Debtor's tax returns; and c) render such other assistance in the nature of accounting services, financial consulting, valuation issues or other financial matters as Debtor may deem necessary. The hourly rates of the firm are: Senior partners $225-$290 Other non-partner accountants $150-$225 Bookkeepers $70-$100 Richard Lundy, the primary partner that would provide services for the Debtor, charges an hourly rate of $290. The Debtor assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Boca Bridge LLC In August 2010, ten creditors owed $69,400 filed an involuntary Chapter 11 petition (Bankr. S.D. Fla. Case No. 10-34538) against Boca Bridge LLC, the owner of the Boca Raton Bridge Hotel. In November, the bankruptcy judge entered ruling placing the Boca Bridge LLC into Chapter 11. The Debtor disclosed $10,286,336 in assets and $11,850,060 in liabilities as of the Chapter 11 filing. BRAND MANAGEMENT: Asks Court to Approve Avrom Vann Hiring --------------------------------------------------------- Brand Management Services Inc. seeks Court authority to employ Avrom R. Vann, P.C., as it is general bankruptcy counsel. The Debtor said its bankruptcy filing is necessitated by the commencement and prosecution by Sentry Insurance Company of a lawsuit against the Debtor seeking to recover judgment for $9,000,000. The Debtor's principal liabilities stem from accounts and loans payable of which the most major obligation is to Sentry, an insurance company for premiums on an insurance policy, the amount of which is in dispute. The lawsuit was commenced in the United States District Court for the Eastern District of New York, and trial was stayed upon the bankruptcy filing. Prior to the bankruptcy filing, ARVPC rendered legal services to the Debtor in connection with endeavoring to resolve the Sentry lawsuit. The firm also provided services in connection with the Debtor's understanding of bankruptcy as it affects the operations of the Company. The Debtor paid ARVPC $80,000 as an advance payment retainer on July 20, 2011. A portion of the retainer will be applied against services rendered by ARVPC, before the bankruptcy filing. Avrom R. Vann, Esq., attests that his firm has no connection with the Debtor, its creditors, or any other party in interest, or its respective attorneys. Moreover, ARVPC represents no interest adverse to the Debtor or its estates in the matters upon which it is to be engaged. About Brand Management Services Brooklyn, New York-based Brand Management Services Inc. is a privately held company that provides various business services to its customers. Its primary assets consist of accounts receivable, leasehold improvements and cash in the bank. Brand Management Services filed for Chapter 11 bankruptcy (Bankr. E.D.N.Y. Case No. 11-46230) on July 20, 2011. Judge Joel B. Rosenthal presides over the case. Brand Management Services filed with the Court its schedules of assets and liabilities, disclosing $280,627 in total assets, consisting mostly of accounts receivable, office improvement and equipment, and $7,119 in a bank account with Capital One. The Debtor listed $10,527,110 in total liabilities, all general unsecured non-priority in nature. The petition was signed by Harold Weber, president. BRAND MANAGEMENT: Status Conference Set for Aug. 15 --------------------------------------------------- The Bankruptcy Court will hold a Status Conference in the bankruptcy case of Brand Management Services Inc. on Aug. 15, 2011, at 11:00 a.m. at Courtroom 3577 in Brooklyn. About Brand Management Services Brooklyn, New York-based Brand Management Services Inc. is a privately held company that provides various business services to its customers. Its primary assets consist of accounts receivable, leasehold improvements and cash in the bank. Brand Management Services filed for Chapter 11 bankruptcy (Bankr. E.D.N.Y. Case No. 11-46230) on July 20, 2011. Judge Joel B. Rosenthal presides over the case. Avrom R. Vann, P.C., serves as bankruptcy counsel. Brand Management Services filed with the Court its schedules of assets and liabilities, disclosing $280,627 in total assets, consisting mostly of accounts receivable, office improvement and equipment, and $7,119 in a bank account with Capital One. The Debtor listed $10,527,110 in total liabilities, all general unsecured non-priority in nature. The petition was signed by Harold Weber, president. BRAND MANAGEMENT: Sec. 341 Creditors' Meeting Set for Aug. 29 ------------------------------------------------------------- The United States Trustee for Region 2 will convene a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) in the bankruptcy case of Brand Management Services Inc. on Aug. 29, 2011, at 11:30 a.m. at 271 Cadman Plaza East, Room 4529, in Brooklyn. About Brand Management Services Brooklyn, New York-based Brand Management Services Inc. is a privately held company that provides various business services to its customers. Its primary assets consist of accounts receivable, leasehold improvements and cash in the bank. Brand Management Services filed for Chapter 11 bankruptcy (Bankr. E.D.N.Y. Case No. 11-46230) on July 20, 2011. Judge Joel B. Rosenthal presides over the case. Avrom R. Vann, P.C., serves as bankruptcy counsel. Brand Management Services filed with the Court its schedules of assets and liabilities, disclosing $280,627 in total assets, consisting mostly of accounts receivable, office improvement and equipment, and $7,119 in a bank account with Capital One. The Debtor listed $10,527,110 in total liabilities, all general unsecured non-priority in nature. The petition was signed by Harold Weber, president. CAMP COOLEY: Taps Hall and Hall to Conduct Live Auction ------------------------------------------------------- The Hon. Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas authorized Camp Cooley Ltd. to employ Hall and Hall Partners L.L.P. to provide services related to the auction. Specifically, the firm will conduct a live auction of the Debtor's ranch and minerals and provide marketing services related to the auction, including, focused marketing on the firm's list of the wealthiest ranch buyers. If the firm conducts an auction of the Ranch, or a transaction in which the brokers are paid a commission is consummated, and the gross sale proceeds of that transaction or auction are less than $30 million, the firm will receive a fee equal to 15% of the 4% commission to be paid to the Brokers, with 2/3rd to be paid from the Brokers' commissions and 1/3rd paid by the Debtor from the proceeds of the sale. In the event the gross proceeds of the sale exceed $30 million, Hall and Hall will receive a fee equal to 20% of the 4% commission to be paid to the Brokers, with 1/2 to be paid from the Brokers' commissions and 1/2 paid by the Debtor from the proceeds of the sale. In addition, if the successful purchaser of the Ranch and/or Minerals is a purchaser registered as a client of the firm, the firm will be entitled to a buyer's broker's commission to be negotiated with the brokers. The firm will also be entitled to reimbursement from the sales proceeds of its reasonable and necessary expenses incurred in marketing and conducting the live auction in an amount not to exceed $25,000. The Debtor assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Camp Cooley Franklin, Texas-based Camp Cooley Ltd. operates an agricultural and farming business. Camp Cooley is the entity resulting from the merger of these entities effective Nov. 7, 2009: North CC Pipeline, LLC; Birkel CCR GP LLC; CCR Royalty, Ltd.; Ultimate Genetics, LLC; and Camp Cooley Genetics, LLC. Camp Cooley filed for Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 09-61311) on Nov. 8, 2009. In its schedules, the Debtor disclosed $57,917,118 in assets and $28,138,421 in liabilities. Blake L. Beckham, Esq., at Beckham & Mandel, Esq., in Dallas; and Debra L. Innocenti, Esq., Raymond W. Battaglia, Esq., and Robert K. Sugg, Esq., at Oppenheimer Blend Harris & Tate, in San Antonio, Tex., represent the Debtor as counsel. CARGO TRANSPORTATION: Court OKs DLA Piper as Committee Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Middle District of Florida has approved the Official Committee of Unsecured Creditors of the Chapter 11 case of Cargo Transportation Services Inc.'s application to employ and retain DLA Piper as general counsel, nunc pro tunc April 1, 2011. DLA is replacing Hunton & Williams LLP as general counsel to the Committee after Craig Rasile, Esq., resigned from his position with Hunton to join DLA on April 1, 2011. As the Committee's counsel, DLA will, among other things: (a) advise the Committee with respect to its rights, powers, and duties in this cases; (b) advise and consult with the Committee concerning various legal, financial and operational issues arising from the administration of the Debtor's estate; (c) advise and consult with the Committee concerning the unsecured creditors' rights and remedies with respect to the assets of the Debtor's estate and the claims of administrative, secured, priority and general unsecured creditors as well as other parties in interest; (d) prosecute, defend and represent the Committee's interests in actions arising in or related to the case; and (e) assist in the preparation of such pleadings, motions, notices and orders as are required for the orderly administration of the rights of the Committee and general unsecured creditors. Compensation will be payable to DLA on an hourly basis, less agreed-upon 10% fee discount, plus reimbursement of actual, necessary expenses and other charges incurred by the firm. The normal hourly rates, prior to the application of the 10% discount for professional services rendered by DLA range from $55 to $290 per hour for legal assistants, from $220 to $465 per hour for associates, and from $465 to $835 per hour for counsel and partners. The Committee assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Cargo Transportation Sunrise, Florida-based Cargo Transportation Services, Inc., provides transportation services to clients nationwide, including customized consolidation, distribution, logistics and warehousing services. It has 140 employees and averages $100,000,000 in gross revenue per year. Cargo Transportation filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 11-00432) on Jan. 12, 2011. Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, serves as the Debtor's bankruptcy counsel. Jennis & Bowen, P.L., serves as substitute counsel. 1 Source Partners Inc. and Accell Audit & Compliance P.A., serve as the Debtor's certified public accountants. Donald F. Walton, U.S. Trustee for Region 21, appointed an Official Committee of the Official Committee of Unsecured Creditors in the Debtor's case. Hunton & Williams LLP represents the Committee in the Chapter 11 proceedings. The Debtor disclosed $11,728,760 in assets, and $11,869,375 in liabilities as of the Chapter 11 filing. CASCADIA PARTNERS: Could Not Develop Plan, Seeks Dismissal ---------------------------------------------------------- Cascadia Partners LLC asks the Hon. William E. Anderson of the U.S. Bankruptcy Court for the Western District of Virginia to dismiss its Chapter 11 case because it could not develop a confirmable plan, and Wells Fargo Bank N.A. has argued and the Court concluded that there is no equity in the real estate which forms the basis for this single-asset Chapter 11 case. According to the Debtor, the real estate is encumbered by a deed of trust lien in favor of Wells Fargo which will not likely produce any equity for the unsecured creditors if the property is sold at foreclosure, which has been requested by the bank. A hearing is set for Aug. 15, 2011, at 9:30 a.m., to consider the Debtor's request. Charlottesville, Virginia-based Cascadia Partners LLC owns and develops certain real property in Albermarle County, Virginia. It filed for Chapter 11 bankruptcy protection (Bankr. W.D. Va. Case No. 10-63442) on Dec. 1, 2010. W. Stephen Scott, Esq., at Scott Kroner, PLC, serves as bankruptcy counsel. The Debtor disclosed $12,074,100 in total assets, and $4,292,894 in total liabilities in its schedules. CATALYST PAPER: S&P Lowers Corporate to 'CCC' on Weak 2nd Qtr. -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Catalyst Paper Corp. to 'CCC' from 'CCC+'. "We also lowered our issue-level ratings on the company's senior secured debt to 'CCC' from 'CCC+' and on its unsecured debt to 'CC' from 'CCC-'. The recovery ratings are unchanged," S&P related. At the same time, Standard & Poor's placed all of the ratings on Catalyst on CreditWatch with negative implications. "The downgrade reflects what we view as deteriorating liquidity after the company posted weak second-quarter results," said Standard & Poor's credit analyst Jatinder Mall. "The CreditWatch placement reflects our concern that Catalyst's capital structure review could potentially lead to a distressed exchange offer for the existing $250 million senior unsecured notes due 2014," Mr. Mall added. The ratings on Catalyst reflect what Standard & Poor's views as the company's highly leveraged capital structure, history of weak profitability, and its participation in cyclical commodity markets. In Standard & Poor's opinion, these risks are partially mitigated by the company's revenue diversity and improving cost profile. Catalyst is a diverse manufacturer of specialty mechanical printing papers, newsprint, and pulp, with a combined annual production capacity of 2 million metric tons. It has three production facilities in B.C. and one in Arizona. Standard & Poor's considers the company's business risk profile as vulnerable. Catalyst operates in a cyclical industry with commodity products. Demand for some of its products is in secular decline (especially newsprint) due to continued migration to the Internet. Furthermore, the company has limited operational diversity. The lack of upward integration and Catalyst's concentration of mills on Vancouver Island expose it to fiber shortages and currency fluctuations. The company's 2010 EBITDA generation was considerably affected by a weak U.S. dollar. "We consider Catalyst's mills to be in the middle of the industry cost curve. The company has been focused on restructuring its business and reducing costs per metric ton. In the past couple of years, it has reduced it workforce, renegotiated labor contracts, and permanently closed its Elk Falls paper mill and Coquitlam recycling facility in B.C.," S&P related. "Historically, Catalyst's profitability has been what we view as weak, with an average operating margin slightly above 10% and what we consider a marginal return on capital for the past five years. We expect that the company's profitability could improve in the future given cost reduction measures and if prices and demand hold," S&P said. Standard & Poor's will likely resolve this CreditWatch once it has a better understanding of what effect Catalyst's capital structure review would have on the company's existing US$250 million of 7.375% senior unsecured notes, which mature March 31, 2014. CATHOLIC CHURCH: Milw. Clergy Opposes Proposed Investigation ------------------------------------------------------------ Dow Jones' DBR Small Cap reports that the Archdiocese of Milwaukee is objecting to a request by unsecured creditors and abuse survivors to conduct a probe in the bankruptcy case, suggesting that the parties are attempting to skirt the bankruptcy filing and further a series of lawsuits frozen in state court. About the Archdiocese 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) CENTRAL FALLS: S&P Affirms SPUR at 'C' After Bankruptcy Filing -------------------------------------------------------------- Standard & Poor's Ratings Services has affirmed its 'C' underlying rating (SPUR) on Central Falls, R.I.'s general obligation (GO) debt following the city's Aug. 1, 2011, filing of a petition for Chapter 9 bankruptcy. The outlook is developing. Pursuant to its criteria, Standard & Poor's may assign a 'C' rating to an issue if the obligor is either a debtor under the U.S. Bankruptcy Code or similar action has been taken, but payments on rated obligations are being continued. In accordance with this, Standard & Poor's previously lowered the GO rating to 'C' from 'BBB-' on May 20, 2010, based on the appointment of a receiver for Central Falls. City officials have expressed to Standard & Poor's that Central Falls intends to continue to make full debt service payments and prioritize debt. However, in Standard & Poor's opinion, given the Chapter 9 bankruptcy filing, the prospect of full and timely payments on the GO debt is uncertain, notwithstanding that, pursuant to the recently amended Rhode Island General Laws in Chapter 45-12-1, a first lien on ad valorem taxes and general fund revenues secures the bonds. Shortly after the Chapter 9 petition was filed, city officials also filed a motion to approve rejection of the city's collective bargaining agreements with its police, fire, and municipal employees unions. City officials also report that the city will immediately implement such cost-cutting measures as increased copayments, deductibles, and coshares of premiums on active employee and retiree health plans and a reduction in pension plan cost-of-living adjustments. "In resolving the developing outlook, Standard & Poor's will continue to monitor the city's progress and assess its ability and capacity to fulfill its obligations outstanding," said Standard & Poor's credit analyst Matthew Stephan. The city currently has about $20 million of GO debt outstanding and remains current on all such obligations. CHELLE CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Chelle Construction, Inc. 19151 SW 108th Ave., Bay#23 Miami, FL 33157 Bankruptcy Case No.: 11-31930 Chapter 11 Petition Date: August 4, 2011 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Laurel M. Isicoff Debtor's Counsel: James D. Gassenheimer, Esq. BERGER SINGERMAN, P.A. 200 S Biscayne Blvd # 1000 Miami, FL 33131 Tel: (305) 755-9500 E-mail: jgassenheimer@bergersingerman.com Scheduled Assets: $2,642,814 Scheduled Debts: $3,317,002 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flsb11-31930.pdf The petition was signed by Scott D. Lehman, vice president. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Lehman Southland, LLC 11-31905 08/04/11 CHESTER HOLDINGS: S&P Assigns 'BB-' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Peapack, N.J.-based Chester Holdings S.a.r.l. (d/b/a Capsugel). The outlook is stable. "At the same time, we assigned a 'BB-' senior secured debt rating and a '3' recovery rating to the company's $150 million revolving credit facility and $920 million term loan. The ratings reflect our expectation of meaningful (50% to 70%) recovery of principal for lenders in the event of default," S&P related. "We also assigned a 'B' issue rating and a '6' recovery rating to the company's EUR325 million ($460 million equivalent) senior unsecured notes. The '6' recovery rating reflects our expectation of negligible (0% to 10%) recovery of principal for lenders in the event of default," S&P related. "The speculative-grade ratings on Capsugel reflect its highly leveraged financial risk profile," said Standard & Poor's credit analyst David Lugg, "highlighted by pro forma operating lease- adjusted debt to EBITDA which is almost 7x and the execution risk associated with its spin-off from pharmaceutical giant Pfizer Inc." "These risks are partly offset by Capsugel's satisfactory business risk profile given its leading market position in the hard capsule market, strong customer relationships, significant barriers to entry, high profitability, and our view of stable long-term industry growth prospects." CHURCH OF THE FIRST: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Church Of The First Born Int'l. Inc. 4701 North 76th Street Milwaukee, WI 53218 Bankruptcy Case No.: 11-32117 Chapter 11 Petition Date: August 4, 2011 Court: United States Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Judge: Margaret Dee McGarity Debtor's Counsel: John D. Dries, Esq. 7251 West North Avenue Wauwatosa, WI 53213 Tel: (414) 453-9866 E-mail: johnddries@sbcglobal.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 17 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wieb11-32117.pdf The petition was signed by Linda F. Dickens, executive administrator - director. CIRCLE ENTERTAINMENT: Incurs $1 Million Net Loss in June 30 Qtr. ---------------------------------------------------------------- Circle Entertainment Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $1.02 million on $0 of revenue for the three months ended June 30, 2011, compared with a net loss of $11.31 million on $0 of revenue for the same period during the prior year. The Company also reported a net loss of $2.79 million on $0 of revenue for the six months ended June 30, 2011, compared with a net loss of $22.23 million on $0 of revenue for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $2.75 million in total assets, $6.18 million in total liabilities, and a $3.43 million total stockholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/kOdDj1 About Circle Entertainment Circle Entertainment Inc. (CEXE.PK), formerly FX Real Estate and Entertainment Inc., owns 17.72 contiguous acres of land located at the southeast corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada. The Las Vegas Property is currently occupied by a motel and several commercial and retail tenants with a mix of short and long-term leases. On June 23, 2009, as a result of the default under the first mortgage loan, the first lien lenders had a receiver appointed to take control of the property. The Company is headquartered in New York City. The Company disclosed in its Form 10-Q for the quarter ended June 30, 2010, that it has no current cash flow and cash on hand as of Aug. 13, 2010, is not sufficient to fund its short-term liquidity requirements, including its ordinary course obligations as they come due. On April 21, 2010, the Company's remaining Las Vegas subsidiary, namely FX Luxury Las Vegas I, LLC, filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Nevada (Case No. 10-17015). The Company's Las Vegas subsidiary filed for Chapter 11 bankruptcy on April 21, 2010, and a plan of liquidation or reorganization will eventually be implemented under which the Company will surrender ownership of the Las Vegas Property. Under such a plan, it is extremely unlikely the Company will receive any material interest or benefit. The Company reported net income of $346.81 million on $0 of revenue for the year ended Dec. 31, 2010, compared with a net loss of $114.68 million on $0 of revenue during the prior year. The net profit generated in the year was primarily on account of a $390.75 million gain from discharge of net assets due to bankruptcy plan. The Company's operating subsidiary sought Chapter 11 protection last year. As reported by the TCR on April 11, 2011, L.L. Bradford & Company, LLC, in Las Vegas, Nevada, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has limited available cash, has a working capital deficiency and will need to secure new financing or additional capital in order to pay its obligations. CITIZENS BANCORP: Reports $24.2-Mil. Net Income in 2nd Quarter -------------------------------------------------------------- Citizens Republic Bancorp, Inc., filed its quarterly report on Form 10-Q, reporting net income of $24.2 million on $77.6 million of net interest income for the three months ended June 30, 2011, compared with a net loss of $39.3 million on $84.6 million of net interest income for the three months ended June 30, 2010. Provision for loan losses was $17.6 million for the second quarter of 2011, compared with $70.6 million for the second quarter of 2010. Non-interest income was $23.3 million for the second quarter of 2011, compared with $22.3 million for the second quarter of 2010. The Company reported a net loss of $44.5 million on $156.2 million of net interest income for the six months ended June 30, 2011, compared with a net loss of $124.3 million on $165.8 million of net interest income for the six months ended June 30, 2010. Provision for loan losses was $106.3 million for the six months ended June 30, 2011, compared with $172.0 million for the six months ended June 30, 2010. Non-interest income totaled $46.5 million for the six months ended June 30, 2011, compared with $44.7 million for the first six months of 2010. The Company's balance sheet at June 30, 2011, showed $9.496 billion in total assets, $8.516 billion in total liabilities, and stockholders' equity of $979.7 million. A copy of the Form 10-Q is available at http://is.gd/l3nL2p Flint, Michigan-based Citizens Republic Bancorp, Inc. -- http://www.citizensbanking.com/-- is a diversified financial services company providing a wide range of commercial, consumer, mortgage banking, trust and financial planning services to a broad client base. Citizens serves communities in Michigan, Ohio, Wisconsin, and Indiana with 220 offices and 249 ATMs. Citizens is the largest bank holding company headquartered in Michigan with roots dating back to 1871 and is the 55th largest bank holding company headquartered in the United States. * * * Citizens Republic Bancorp, Inc., carries Fitch 'CCC' long-term issuer ratings last issued on Feb. 4, 2011. CITY NATIONAL BANCSHARES: Incurs $1.5MM Net Loss in 1st Quarter --------------------------------------------------------------- City National Bancshares Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on form 10-Q reporting a net loss of $1.55 million on $4.07 million of total interest income for the three months ended March 31, 2011, compared with a net loss of $704,000 on $5.52 million of total interest income for the same period a year ago. The Company's balance sheet at March 31, 2011, showed $398.59 million in total assets, $377.51 million in total liabilities and $21.08 million in total stockholders' equity. A full-text copy of the Form 10-Q is available for free at: http://is.gd/eoEQda About City National Bancshares Newark, N.J.-based City National Bancshares Corporation is a New Jersey corporation incorporated on January 10, 1983. City National Bank, a wholly-owned subsidiary of CNBC, is a national banking association chartered in 1973 under the laws of the United States of America and has one subsidiary, City National Investments, Inc., an investment company which holds, maintains and manages investment assets for CNB. CNB provides a wide range of retail and commercial banking services through its retail branch network, although the primary focus is on establishing commercial and municipal relationships. The Bank owns a 35.4% interest in a leasing company, along with two other minority banks and has small investments in a Haitian financial organization that provides microloan financing to individuals in rural Haiti for business purposes and a mutual fund which invests in targeted projects throughout the country that are eligible for Community Reinvestment Act ("CRA") credit. As reported by the TCR on June 1, 2011, KPMG LLP, in Short Hills, New Jersey, expressed substantial doubt about City National Bancshares' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has entered into a consent order with the Office of the Comptroller of the Currency. The Company reported a net loss of $7.5 million on $12.8 million of net interest income for 2010, compared with a net loss of $7.8 million on $14.7 million of net interest income for 2009. CONGRESS SAND: Presidential Financial Hikes DIP Loan to $1.9-Mil. ----------------------------------------------------------------- Congress Sand & Gravel, LLC, et al., notified the U.S. Bankruptcy Court for the Northern District of Texas that Presidential Financial Corporation, their DIP lender, has increased the maximum loan amount and aggregate debt amount up to $1,900,000. On July 13, 2011, Presidential also filed a notice of an increased maximum loan amount from $1,750,000 to $1,835,000. As reported in the Troubled Company Reporter on Nov. 11, 2010, the Debtors and the DIP lender have contemplated raising the maximum loan amount to $1.90 million by agreement, but in the DIP Lender's sole discretion. A copy of the DIP financing is available for free at: http://bankrupt.com/misc/CONGRESS_SAND_dipfinancingpact.pdf On Dec. 16, 2010, the Court authorized, on a final basis, the Debtor to obtain (i) $1,750,000 postpetition financing; and (ii) use cash collateral. The Debtors will grant, super-priority administrative, first priority and junior priority liens to the DIP Lender. Presidential is represented by: H. Jefferson LeForce, Esq. PATTON BOGGS LLP 2000 McKinney Avenue, Suite 1700 Dallas, TX 75201 Tel: (214) 758-1500 About Congress Sand Bridgeport, Texas-based Congress Materials, LLC -- dba Green Aggregates and Union Materials, LP -- filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-37526) on Oct. 28, 2010. It estimated assets and debts at $10 million to $50 million. Kerens, Texas-based Congress Sand filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-37522) on Oct. 28, 2010. It estimated its assets and debts at $1 million to $10 million. Congress Materials' bankruptcy case is jointly administered with Congress Sand & Gravel, LLC. Congress Sand is the lead case. Douglas S. Draper, Esq., at Heller Draper Hayden Patrick & Horn, LLC, assists Congress Sand and Congress Materials in their restructuring efforts. Beveridge & Diamond, PC, serves as special counsel to represent the Debtors concerning the Texas Commission on Environmental Quality regulation of environmental matters. Affiliate Green Aggregates, Inc. (Bankr. N.D. Tex. Case No. 07- 53439) filed a separate Chapter 11 petition on Dec. 31, 2007. CONOLOG CORP: Issues $256,350 Promissory Note to Robert Benou ------------------------------------------------------------- Conolog Corporation, on July 28, 2011, issued a promissory note in favor of Robert Benou in the principal amount of $191,350, consisting of amounts previously advanced by Mr. Benou to the Company between Jan. 24, 2011, and June 20, 2011. Also on July 28, 2011, Conolog Corporation issued a promissory note in favor of Robert Benou in the principal amount of $65,000, consisting of amounts advanced by Mr. Benou to the Company on July 12, 2011, and July 18, 2011. Mr. Benou is the Chief Executive Officer and Chairman of the Company. The advances were made by Mr. Benou to assist the Company in meeting short-term obligations. The Notes are payable on demand and does not bear interest. The Note is subject to various default provisions, and the occurrence of such an Event of Default will cause the outstanding principal amount under the Notes, together with any and all other amounts payable under the Notes, to become immediately due and payable to Mr. Benou. Full-text copies of the Promissory Notes are available for free at: http://is.gd/T5fiBY http://is.gd/TaDPmm About Conolog Corp. Somerville, N.J.-based Conolog Corporation is in the business of design, manufacturing and distribution of small electronic and electromagnetic components and subassemblies for use in telephone, radio and microwave transmissions and reception and other communication areas. The Company's products are used for transceiving various quantities, data and protective relaying functions in industrial, utility and other markets. The Company's customers include primarily industrial customers, which include power companies located primarily throughout the United States, and various branches of the military. The Company's balance sheet at Jan. 31, 2011, showed $1.1 million in total assets, $861,227 in total liabilities, and stockholders' equity of $251,212. As reported in the Troubled Company Reporter on Dec. 7, 2010, WithumSmith+Brown, PC, in Somerville, New Jersey, expressed substantial doubt about Conolog's ability to continue as a going concern, following the Company's results for the fiscal year ended July 31, 2010. The independent auditors noted that the Company has had recurring losses from operations of $3.5 million and $1.6 million and used cash from operations in the amounts of $1.6 million and $1.3 million for the years ended July 31, 2010, and 2009, respectively. CONTINENTAL COMMON: Has Until Aug. 31 to Use PNC Cash Collateral ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has authorized Continental Common, Inc. to use the cash collateral of PNC Bank N.A. pursuant to an agreed order submitted by the parties. Pursuant to the agreement, the Debtor may access the cash collateral until Aug. 31, 2011. The Debtor would use the cash collateral to maintain its assets, sell or otherwise liquidate its assets, provide financial information, pay necessary employees, payroll taxes, overhead, and other expenses necessary to maximize the value of the Debtor's assets As reported in the Troubled Company Reporter on July 14, 2011, as adequate protection of the lender's interests, the Debtor will make a monthly interest payment to PNC in the amount shown in the Cash Collateral Budget for each month. All funds transferred to PNC constitute cash collateral of PNC. A copy of the Cash Collateral Budget is available for free at: http://bankrupt.com/misc/CONTINENTALCOMMON_cashcoll_budget.pdf PNC is represented by: William L. Wallander, Esq. Bradley R. Foxman, Esq. VINSON & ELKINS L.L.P. Trammell Crow Center 2001 Ross Avenue, Suite 3700 Dallas, TX 75201-2975 Tel: (214) 220-7700 Fax: (214) 220-7716 E-mail: bwallander@velaw.com bfoxman@velaw.com About Continental Common Dallas, Texas-based Continental Common, Inc., has primary assets consist of various real estate holdings in multiple states. The Company filed for Chapter 11 bankruptcy protection on October 28, 2010 (Bankr. N.D. Tex. Case No. 10-37542). Melissa S. Hayward, Esq., at Franklin Skierski Lovall Hayward LLP, represents the Debtor. The Company disclosed $29,250,424 in assets and $25,150,836 in liabilities. The U.S. Trustee has not appointed creditors' committee or examiner in the case. CORDIA COMMUNICATIONS: Adequate Assurance of Payment Deal OK'd -------------------------------------------------------------- Karen S. Jennemann of the U.S. Bankruptcy Court for the Middle District of Florida approved the stipulation between Cordia Communications Corp., et al., and One Communications, Inc., an EarthLink Business company, establishing adequate assurance of payment to One Communications. The CLEC Debtors and Earthlink were able to agree on terms that allow the CLEC Debtors to continue to receive service from Earthlink in order to provide postpetition service to the CLEC customers and that afford Earthlink protections sufficient to provide adequate assurance of payment for the service. Pursuant to the stipulation: -- the CLEC Debtors have agreed to, on a going forward basis beginning June 20, 2011, pay Earthlink $769 weekly, which amount will constitute an estimate of advance payment for services to be provided during the upcoming week based on historical average usage; -- provides a true-up mechanism whereby actual usage will be reconciled with the advance weekly payments remitted by the CLEC Debtors to Earthlink and appropriate payments or credits issued; and -- the CLEC Debtors will dismiss the Adversary Proceeding with prejudice as to Earthlink upon the entry of an order by the Court approving the stipulation and the order becoming final and non-appealable. On the Petition Date, the CLEC Debtors commenced an adversary proceeding against Verizon Services Corp., Qwest Corporation, Affinity Networks, Inc. doing business as ANI Networks, One Communications Corp., and PAETEC Communications, Inc. By the Adversary Proceeding, the CLEC Debtors seek a declaratory judgment holding that defendants are not utilities for the purposes of section 366 of the Bankruptcy Code and therefore section 366 is inapplicable to the relationship between the CLEC Debtors. About Cordia Communications Cordia Corporation -- through its operating subsidiaries, Cordia Communications Corp., CordiaIP Corp., My Tel Co, Inc., Northstar Telecom, Inc., Cordia Prepaid Corp., and Cordia International Corp. -- offers business, residential, and wholesale customers local and long distance telecommunications services in more than 60 countries utilizing traditional wireline and Voice over Internet Protocol -- VoIP -- technologies. CCC holds licenses to operate in 28 states throughout the contiguous United States, and CCCVA is licensed in Virginia. Winter Garden, Florida-based Cordia Communications Corp., along with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-06493) on May 1, 2011. The Debtor estimated its assets and debts at $10 million to $50 million. Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, serves as the Debtors' bankruptcy counsel. Source Capital Group, Inc., serves as investment banker. Development Specialists, Inc., is providing restructuring and management services, including Joseph J. Luzinski as chief restructuring officer. Bingham McCutchen LLP as special telecommunications counsel. Cordia Communications Inc. was authorized in July 2011 to sell the business to Birch Communications Inc. For Birch to take over a contract with Verizon Communications Inc., Verizon must be paid $4.4 million, according to the order approving the sale. CORELOGIC INC: Moody's Affirms Ba2 Corporate; Outlook Negative -------------------------------------------------------------- Moody's Investors Service affirmed CoreLogic, Inc.'s Ba2 corporate family and probability of default ratings, but revised the Speculative Grade Liquidity rating to SGL-2 from SGL-1 and the ratings outlook to negative from stable. RATINGS RATIONALE The revised negative outlook reflects uncertainty of the financial impact on CoreLogic arising from the sharp decline in mortgage originations and default activity, which has been exacerbated by the prolonged industry moratoriums imposed by many of the leading banks due to alleged errors in the foreclosure process. The unknown magnitude of evolving regulation and industry-wide litigation on CoreLogic's business model also contributes to the negative outlook. While CoreLogic's revenues and profitability will be pressured through at least the end of 2012, the company's liquidity profile is good. The company had $171 million of cash as of June 30, 2011 and about $500 million of revolver availability. Given the company's downward earnings guidance, Moody's expects free cash flow to be breakeven to slightly positive for 2011. For 2012, however, assuming stabilizing industry conditions, Moody's expects free cash flow to range from $50 to 100 million, consistent with 2010 levels. CoreLogic's liquidity profile should enable the company to withstand the negative effects of weak industry conditions through 2012. Nevertheless, the decrease in the SGL rating reflects lower than anticipated cash flows and profits. Yesterday, CoreLogic revised its earnings guidance downwards for 2011 by over 20% from earlier guidance (adjusted EBITDA of $260- 280 million from $335-365 million) while projected revenues essentially remains unchanged with a mix shift to lower margin services. The earnings cut is primarily driven by the significant declines in appraisal services (part of both Mortgage Origination Services and equity earnings through joint ventures) and Default Services (e.g., broker price opinions) as well as the underperformance of CoreLogic's marketing services business (provider of internet marketing solutions and lead generation in the specialty and personal financial markets). With the lower anticipated profitability, adjusted debt to EBITDA could rise to the high 3 times by the end of 2011 (currently about mid 3x). CoreLogic's ratings could be lowered if it becomes evident that 1) mortgage originations will decline by greater than the 6% rate forecasted by the Mortgage Bankers Association for 2012, 2) Default Services revenues will continue to decline into 2012, 3) CoreLogic engages in significant share buyback or acquisition activity, 4) cash flows fall below Moody's expectations, or 5) adjusted debt to EBITDA remains above 3.5x (Moody's adjusted) on a sustained basis. Furthermore, to the extent that CoreLogic will incur significant legal costs or have to pay a meaningful settlement for the FDIC lawsuit, the ratings could be downgraded depending on the company's liquidity position at that time. Ratings affirmed (assessments revised): Corporate Family Rating -- Ba2 Probability of Default Rating -- Ba2 $550 Million Senior Secured Revolving Credit Facility due 2016 -- Baa3, (LGD 2, 19% from 23%) $350 Million Senior Secured Term Loan due 2016 -- Baa3, (LGD 2, 19% from 23%) $400 million Senior Notes due 2021 -- Ba3, (LGD 5, 79%) $59.6 million of 7.55% Senior Debentures due 2028 -- B1, (LGD 6, 94% from 95%) $34.8 million of 8.5% Capital Securities due 2012 -- B1, (LGD 6, 96% from 97%) Rating revised: Speculative Grade Liquidity Rating -- SGL-2 from SGL-1 The rating outlook is negative. The principal methodology used in rating CoreLogic was Global Business & Consumer Service Industry Rating Methodology rating methodology published in October 2010. CoreLogic, Inc., with about $1.6 billion of projected annual revenues, is a leading provider of property and mortgage data and analytics products and solutions. The company provides mortgage risk tools and other analytical products; property and credit information; and outsourcing solutions for lenders, employers and other business clients. COVENANT INVESTMENTS: Participating Lender's Bid for Fees Denied ---------------------------------------------------------------- Bankruptcy Judge Ralph B. Kirscher denied an application by First Security Bank of Bozeman, Montana, for payment of $15,030 in attorney's fees and reimbursement of $150.49 in expenses in the bankruptcy case of Covenant Investments Inc., saying the requested fees are, for the most part, duplicative of those already awarded to Flathead Bank, Valley Bank of Belgrade Branch, which syndicated the loan. Covenant Investments borrowed $3,929,036 and $1,807,359 pursuant to two separate promissory notes. First Security Bank is a participating lender for the secured loans. On July 13, 2011, the Court awarded Valley Bank's counsel, Wayne E. Jennings, Esq., reasonable professional fees in the total amount of $13,527.50 and costs in the amount of $955.00 for a total of $14,482.50 as part of the allowed claim of oversecured creditor Valley Bank. According to Judge Kirscher, the effort by Valley Bank and First Security to collect from the bankruptcy estate their separate fees with respect to the loan in effect penalizes the Debtor and the bankruptcy estate. The fact that Valley Bank and First Security entered into the participation agreements does not give them the unilateral authority to double the fees and costs that the Debtor is liable to pay under the agreements associated with loans. A copy of Judge Kirscher's Aug. 5, 2011 Memorandum of Decision is available at http://is.gd/NcA9BQfrom Leagle.com. About Covenant Investments Covenant Investments, Inc. in Bozeman, Montana, filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 10-62105) on Aug. 30, 2010. Judge Ralph B. Kirscher presides over the case. James A. Patten, Esq. -- japatten@ppbglaw.com -- at Patten, Peterman, Bekkedahl & Green, P.L.L.C. The Debtor scheduled $6,059,042 in assets and $18,304,947 in debts. The petition was signed by Dewin Madill, president. Covenant's Second Amended Disclosure Statement was approved May 19, 2011. Covenant's Second Amended Chapter 11 Plan was confirmed on May 19, 2011. CROWN MEDIA: Reports $21.7 Million Net Income in June Quarter ------------------------------------------------------------- Crown Media Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on form 10-Q reporting net income and comprehensive income of $21.73 million on $76.15 million of total net revenue for the three months ended June 30, 2011, compared with a net loss and comprehensive loss of $8.98 million on $65.71 million of total net revenue for the same period during the prior year. The Company also reported net income and comprehensive income of $85.83 million on $149.74 million of total net revenue for the six months ended June 30, 2011, compared with a net loss and comprehensive loss of $11.30 million on $134.08 million of total net revenue for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $727.88 million in total assets, $616.90 million in total liabilities, $200.57 million in redeemable preferred stock, and a $89.59 million total stockholders' deficit. "We were successful in delivering a solid quarter of financial results, based on a strong advertising market, growth in our subscribers, and our continuing ability to maintain a cost- effective operating structure in order to maximize our bottom line," noted Bill Abbott, President and CEO of Crown Media. "This profile enabled us to access the institutional markets to refinance our existing debt, significantly lowering our borrowing costs and ensuring long-term stability." A full-text copy of the Form 10-Q is available for free at: http://is.gd/vgmZZd About Crown Media Studio City, Calif.-based Crown Media Holdings, Inc. (NASDAQ: CRWN) -- http://www.hallmarkchannel.com/-- owns and operates cable television channels dedicated to high quality, broad appeal, entertainment programming. The Company currently operates and distributes Hallmark Channel in both high definition (HD) and standard definition (SD) to 90 million subscribers in the U.S. Crown Media also operates a second 24-hour linear channel, Hallmark Movie Channel, available in both HD and SD, which focuses on family-friendly movies with a mix of classic theatrical films, presentations from the acclaimed Hallmark Hall of Fame library, original Hallmark Channel movies and special events. Going Concern KPMG LLP, in Denver, the Company's independent registered public accounting firm, rendered a going concern opinion in connection with the financial statements included in the Company's annual report on form 10-k for the year ended Dec. 31, 2009. The independent auditors noted of the Company's significant short-term debt obligations. KPMG LLP, however, did not issue a going concern opinion in its report on the Company's 2010 financial statements. * * * As reported by the TCR on July 25, 2011, Standard & Poor's Ratings Services assigned Studio City, Calif.-based cable network company Crown Media Holdings Inc. its 'B' corporate credit rating. The outlook is stable. "The stable rating outlook reflects our expectation that the company could reduce its lease-adjusted leverage over the intermediate term through EBITDA growth and modest debt repayment, barring any unforeseen events," S&P said. DEB SHOPS: Aims to Secure $30-Mil. Loan for Post-Sale Operations ---------------------------------------------------------------- Dow Jones' DBR Small Cap reports that Deb Shops Inc. wants to move forward with a $30 million loan from PNC Bank that the retailer's proposed buyer would spend to continue operating its network of 316 stores and to pay off various debts. 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. Kurtzman Carson Consultants, LLC, serves as claims agent. Sitrick & Company serves as public relations consultants. 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. DEB SHOPS: Committee Proposes Otterbourg as Lead Counsel -------------------------------------------------------- Dow Jones' DBR Small Cap reports that the Deb Shops Inc.'s official committee of unsecured creditors seeks permission from the U.S. Bankruptcy Court in Wilmington to hire Otterbourg Steindler Houston & Rosen as lead counsel. The company filed its application on July 28. 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. Kurtzman Carson Consultants, LLC, serves as claims agent. Sitrick & Company serves as public relations consultants. 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. DELPHI CORP: Court Finds No Loopholes in Assignment of Claim ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a buyer who paid 89 cents on the dollar for a claim against Delphi Corp. failed to find a loophole creating the right to force the seller to repurchase the $2.1 million claim against the company that once was the largest U.S. auto-parts maker. The buyer, Longacre Master Fund Ltd., purchased the claim when Delphi had a Chapter 11 plan on file where unsecured creditors were to be paid in full. Although the plan was confirmed, it could never be implemented. According to the report, Longacre contended it was entitled to force the original holder to repurchase the claim under several theories arising from the purchase agreement. None of the theories persuaded U.S. District Judge Robert W. Sweet in New York. Part of Longacre's lawsuit was based the idea that a preference suit filed against the seller was an "impairment" of the claim, enabling the buyer to recover the purchase price plus interest. Judge Sweet said that making a claim against the buyer didn't affect the validity of the claim, even though Section 502 of the Bankruptcy Code automatically disallowed the claim unless the preference was repaid. Mr. Rochelle notes that Judge Sweet's opinion in large part rested on a 2007 opinion written by U.S. District Judge Shira Scheindlin in the liquidation of Enron Corp. Judge Sweet drew a distinction between a complete sale of the claim and an assignment, where the seller retains some of the attributes of the claim. In the Delphi situation, it was an assignment. Judge Sweet also ruled that the seller's knowledge that it received payments within 90 days of Delphi's bankruptcy didn't amount to knowledge at the time of the sale that that there was a valid preference claim in existence. The result might have been different were the preference suit not ultimately dismissed. The case is Longacre Master Fund Ltd. V. ATS Automation Tooling Systems Inc., 10-8024, U.S. District Court, Southern District of New York (Manhattan). About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- was a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On Oct. 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is responsible for the post-Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DELTA AIR: Posts $366 Mil. Net Income in Second Quarter ------------------------------------------------------- Delta Air Lines reported financial results for the June 2011 quarter on July 27, 2011. Key points include: * Delta's net income for the June 2011 quarter was $366 million, or $0.43 per diluted share, excluding special items(1). * Delta's net income was $198 million, or $0.23 per diluted share, for the June 2011 quarter. * Strong top line revenue growth of 12% year over year helped offset more than $1 billion higher fuel expense. * Delta generated a revenue premium, with unit revenues up 10% for the quarter. * Delta generated $1 billion of operating cash flow and $700 million in free cash flow in the quarter. The company ended the June 2011 quarter with $5.6 billion in unrestricted liquidity. "High fuel prices are putting significant pressure on the industry, but the benefits of Delta's strategic actions and the dedication of Delta employees are evident in the solid profit we produced despite more than $1 billion in higher fuel expense," said Richard Anderson, Delta's chief executive officer. "Our revenue momentum, coupled with the capacity reductions we are making in September and actions to get our non-fuel costs to 2010 levels, will generate the margins we need to hit our return targets." Adapting the Business for Higher Fuel Prices Delta is recalibrating its business to succeed in a permanent, high fuel price environment. The company's actions include: * Using fare increases, fuel surcharges and revenue initiatives to recover fuel cost increases through ticket prices; * Reducing its December quarter capacity by 4 ? 5% year over year, an incremental 1 point reduction from previous guidance, focused in markets where revenues do not cover higher fuel costs. Domestic capacity will be down 1 ? 3% and international capacity will be down 4 ? 6%. In the transatlantic, Delta and its partners, Air France ? KLM and Alitalia, established capacity levels as a single entity, leading to a combined reduction in transatlantic capacity of 7 ? 9% for the December quarter; * Retiring 140 of Delta's least efficient aircraft by the end of 2012, including the entire DC9 and Saab turbo-prop fleets, and 60 50-seat regional jets. Half of these aircraft will exit the fleet in 2011, which will contribute to the expected $250 million in maintenance savings for the second half of 2011 compared to the first half of the year; and * Implementing initiatives to reduce the company's non-fuel unit costs to 2010 levels by the end of 2011, including voluntary exit programs accepted by more than 2,000 employees; consolidating more than 1.2 million square feet of facilities in Atlanta and Minneapolis; and lowering selling and distribution costs by shifting to more efficient distribution channels. Revenue Environment Delta's operating revenue grew $1 billion, or 12%, in the June 2011 quarter compared to the 2010 quarter. Traffic rose 1% on a 2.5% increase in capacity. * Passenger revenue increased 13%, or $882 million, compared to the prior year period. Passenger unit revenue (PRASM) increased 10%, driven by a 12% improvement in yield partially offset by a 1.3 point decline in load factor. Passenger revenues were negatively impacted by $125 million as a result of the March events in Japan. * Cargo revenue increased 25%, or $53 million, on higher cargo volume and yield. * Other revenue increased 5%, or $50 million, from higher third-party maintenance revenue. As part of its plan to generate $1 billion in incremental revenue by 2013, Delta launched its new international premium economy product, Economy Comfort, on June 1. Revenue from Economy Comfort and other new seat-related products and merchandising initiatives are expected to generate $150 ? 200 million in revenue in 2011. Comparisons of revenue-related statistics are as follows: Increase(Decrease) 2Q11 versus 2Q10 ------------------------------- Change Unit Passenger Revenue 2Q11 ($M) YOY Revenue Yield Capacity ----------------------------------------- Domestic $3,475 12% 12% 12% (0.2%) Atlantic 1,570 16% 7% 10% 7.6% Pacific 722 14% 6% 11% 7.8% Latin America 440 18% 14% 16% 3.7% ------- Total mainline 6,207 13% 10% 12% 3.1% Regional 1,684 10% 12% 12% (1.7%) ------- Consolidated 7,891 13% 10% 12% 2.5% "A strong demand environment, combined with our corporate revenue share gains and great work by our entire team, resulted in top line growth of 12% and produced a unit revenue premium to the industry," said Ed Bastian, Delta's president. "Right-sizing our capacity, coupled with pricing initiatives and revenues from new products and services, position us well to continue to generate solid unit revenue improvements for the September quarter." Cost Performance In the June 2011 quarter, Delta's operating expense increased $1.4 billion year over year. More than $1 billion of this increase was attributable to the 39% increase in fuel prices, with the remainder of the cost increase primarily driven by maintenance volumes and higher revenue-related expenses. Consolidated unit cost (CASM(2)), excluding fuel expense, profit sharing and special items, was 4.8% higher in the June 2011 quarter on a year-over-year basis. Consolidated CASM increased 16% due to higher fuel prices. "We have seen unit cost growth from not only high fuel prices, but also maintenance volumes and revenue-related expenses," said Hank Halter, Delta's chief financial officer. "We are moving aggressively to stem this cost growth with a target of bringing our non-fuel unit costs to 2010 levels by the end of the year." Fuel Price and Related Hedges Delta's average fuel price(3) of $3.22 per gallon for the June quarter was a $0.90, or 39%, increase over the prior year. The June quarter 2011 price included $118 million in gains, net of option premiums, from its fuel hedging program. At July 22, 2011, Delta's fuel hedge portfolio for the remainder of 2011 was worth $225 million, net of option premiums, and the table below represents fuel hedges Delta had in place on that date: 3Q11 4Q11 ------------ WTI - Crude 0% 1% Heating Oil 33% 34% Brent - Crude 11% 14% Jet Fuel 1% 6% ------------ Total 45% 55% Projected fuel price $3.20 $3.31 Liquidity Position As of June 30, 2011, Delta had $5.6 billion in unrestricted liquidity, including $3.8 billion in cash and short-term investments and $1.8 billion in undrawn revolving credit facilities. Operating cash flow during the June 2011 quarter was $1 billion, driven by the company's profitability and advance ticket sales. Free cash flow was $700 million. Capital expenditures during the quarter were $300 million, including $205 million in aircraft, parts and modifications. To date, Delta has modified 40 aircraft with full flat-bed seats. The airline's entire widebody international fleet will have full flat-bed seats in BusinessElite by 2013. These expenditures are part of Delta's three-year, $2 billion investment in improved products, services and facilities. For the full year 2011, the company expects its capital expenditures will be $1.2 billion. The company remains committed to keeping its annual capital expenditures at $1.2 - $1.4 billion. During the June quarter, Delta refinanced $2.6 billion of corporate credit facilities. The transaction, with an effective annual rate of 3.67%, increased the company's revolving credit availability by $200 million and reduced its term loan borrowing by $200 million. This reduction in term loan borrowing, combined with normal amortization payments, resulted in net debt payments of $510 million for the quarter. At June 30, Delta's adjusted net debt was $13.8 billion, a $700 million reduction from March 31, 2011. The company has now completed $3.2 billion of its $7 billion debt reduction target. "With strong cash generation despite fuel price pressures, we are making solid progress on our debt reduction goals," Halter added. "In 18 months, we have reduced our net debt by over $3 billion, while still making significant investments in our product, fleet and facilities." Company Highlights Delta has a strong commitment to its employees, customers and the communities it serves. Key accomplishments in the June quarter include: * Delivering significant improvements in operational performance, including an on-time arrival rate of 80.7% that was among the best in the industry. Delta employees received $9 million in Shared Rewards payments to recognize their work in achieving these operational improvements; * Receiving the Million Work Hours Award from the U.S. National Safety Council, recognizing employees in Reservation Sales and Information Technology for their safety excellence in achieving more than 1 million injury- free work hours in 2010; * Improving products and facilities for Delta's customers, including launching the company's new premium international economy seating, Economy Comfort; beginning construction on the company's new international facility at New York-JFK's Terminal 4, which is set to open in the spring of 2013; and updating apps for iPhone, Blackberry and Android that allow travelers to download mobile boarding passes, check flight status, and search flight schedules; * Positioning the company as the airline of choice in New York with preliminary DOT approval to exchange slots and airport facilities at New York's LaGuardia and Washington's Reagan National airports with US Airways. Under the agreement, Delta will acquire 132 slot pairs at LaGuardia, which will allow Delta to double its available destinations, offering customers more frequent and convenient service at New York's preferred airport for business travel; * Expanding Delta's global reach to give passengers more options through new service to key international business destinations such as London-Heathrow, Beijing, Shanghai, and Tokyo-Haneda; improving SkyTeam's leading alliance position in China with the inclusion of the alliance's newest partner, China Eastern; and obtaining anti-trust approval of the industry's first US-Australia joint venture between Delta and Virgin Australia; * Being chosen by the readers of Executive Travel magazine as the leading U.S. carrier in six categories for the publication's 2011 Leading Edge awards, including Best First-Class Service; Best Business-Class Service; Best Airport Lounge; Best Flight Experience to Mexico; Best Flight Experience to Central/South America; and Best Private Jet Service (for Delta Private Jets); * Awarding more than $350,000 in scholarships to 330 Delta employees and their families through the Delta Scholarship Fund; and * Teaming with Habitat for Humanity and SkyTeam partners China Southern and China Eastern to help build five houses in Pinghu, China. This year's effort was Delta's seventh international build with Habitat for Humanity. Special Items Delta recorded special items totaling $168 million in the June 2011 quarter, including: * $80 million in severance and related costs associated with the voluntary exit programs the company offered as part of its initiatives to adapt the airline to higher fuel prices; * A $64 million charge for facilities consolidation and fleet initiatives; * A $13 million charge for debt extinguishment associated with the company's debt reduction initiatives; and * $11 million in mark-to-market adjustments for fuel hedges. Delta recorded $82 million in special items in the June 2010 quarter, including $46 million in merger-related expenses and $36 million in asset impairment charges. September 2011 Quarter Guidance Delta's projections for the September 2011 quarter are: 3Q 2011 Forecast ---------------- Fuel price, including taxes and hedges $3.20 Operating margin 7 - 9% Capital expenditures $250 million Total liquidity at end of period $5.1 billion 3Q 2011 Forecast (compared to 3Q 2010) --------------------- Consolidated unit costs - excluding fuel expense Up 2 - 4% System capacity Flat Domestic Down 1 - 3% International Up 2 - 4% Mainline capacity Flat Domestic Down 1 - 3% International Up 2 - 4% Other Matters Included with this press release are Delta's unaudited Consolidated Statements of Operations for the three and six months ended June 30, 2011 and 2010; a statistical summary for those periods; selected balance sheet data as of June 30, 2011 and Dec. 31, 2010; and a reconciliation of certain non-GAAP financial measures. Delta Air Lines filed with the U.S. Securities and Exchange Commission a Form 10-Q dated July 27, 2011, detailing its financial disclosures for the second quarter ended June 30, 2011. A copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?76a1 DELTA AIR LINES, INC. Unaudited Consolidated Balance Sheet As of June 30, 2011 ASSETS Current Assets: Cash and cash equivalents $2,855,000,000 Short-term investments 967,000,000 Restricted cash, cash equivalents & short-term investments 432,000,000 Accounts receivable, net 1,885,000,000 Expendable parts & supplies inventories, net 403,000,000 Deferred income taxes, net 342,000,000 Prepaid expenses and other 1,179,000,000 ----------------- Total Current Assets 8,063,000,000 Property and Equipment, Net 20,315,000,000 Other Assets Goodwill 9,794,000,000 Identifiable intangibles, net 4,714,000,000 Other noncurrent assets 992,000,000 ----------------- Total Other Assets 15,500,000,000 ----------------- Total Assets $43,878,000,000 ================= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current maturities of long-term debt $1,635,000,000 Air traffic liability 5,001,000,000 Accounts payable 1,900,000,000 Frequent flyer deferred revenue 1,687,000,000 Accrued salaries and related benefits 1,086,000,000 Taxes payable 766,000,000 Other accrued liabilities 727,000,000 ----------------- Total Current Liabilities 12,802,000,000 Noncurrent Liabilities: Long-term debt and capital leases 13,026,000,000 Pension, postretirement & related benefits 11,307,000,000 Frequent flyer deferred revenue 2,662,000,000 Deferred income taxes, net 1,913,000,000 Other noncurrent liabilities 1,383,000,000 ----------------- Total noncurrent liabilities 30,291,000,000 Commitments and Contingencies Stockholders' Equity: Common stock: Common stock at $0.00001 par value, 1,500,000,000 shares authorized, 801,701,956 shares issued June 30, 2010 - Additional paid-in capital 13,964,000,000 Accumulated deficit (9,372,000,000) Accumulated other comprehensive loss (3,593,000,000) Treasury stock, at cost, 12,852,539 shares at June 30, 2010 (214,000,000) ----------------- Total Stockholders' Equity 785,000,000 ----------------- Total Liabilities and Stockholders' Equity $43,878,000,000 ================= DELTA AIR LINES, INC. Unaudited Consolidated Statement of Operations Three Months Ended June 30, 2011 Operating Revenue: Passenger: Mainline $6,207,000,000 Regional carriers 1,684,000,000 ----------------- Total passenger revenue 7,891,000,000 Cargo 264,000,000 Other, net 998,000,000 ----------------- Total operating revenue 9,153,000,000 Operating Expense: Aircraft fuel and related taxes 2,663,000,000 Salaries and related costs 1,739,000,000 Contract carrier arrangements 1,410,000,000 Aircraft maintenance mat./outside repairs 485,000,000 Contracted services 415,000,000 Passenger commissions/other selling expenses 440,000,000 Depreciation and amortization 381,000,000 Landing fees and other rents 320,000,000 Passenger service 181,000,000 Aircraft rent 74,000,000 Profit sharing 8,000,000 Restructuring and merger-related items 144,000,000 Other 412,000,000 ----------------- Total operating expense 8,672,000,000 ----------------- Operating Income (Loss) 481,000,000 Other (Expense) Income: Interest expense (233,000,000) Amortization of debt discount, net (46,000,000) Loss on extinguishment of debt (13,000,000) Miscellaneous, net 9,000,000 ----------------- Total other expense, net (286,000,000) ----------------- Income (Loss) Before Income Taxes 195,000,000 Income Tax (Provision) Benefit 3,000,000 ----------------- Net Income (Loss) $198,000,000 ================= DELTA AIR LINES, INC. Unaudited Consolidated Statement of Cash Flow Six Months Ended June 30, 2010 Net Cash Provided by Operating Activities $1,774,000,000 Cash Flows from Investing Activities: Property and equipment additions: Flight equipment (481,000,000) Ground property and equipment (172,000,000) Purchase of short-term investments (479,000,000) Redemption of short-term investments 250,000,000 Other investments - Other, net 8,000,000 ----------------- Net Cash used in Investing Activities (874,000,000) Cash Flows from Financing Activities: Payments on long-term debt (2,394,000,000) Proceeds from long-term obligations 1,599,000,000 Debt issuance costs (58,000,000) Restricted cash and cash equivalents (84,000,000) Other, net - ----------------- Net Cash used in Financing Activities (937,000,000) Net Increase (Decrease) in Cash & Equivalents (37,000,000) Cash & cash equivalents at beginning of period 2,892,000,000 ----------------- Cash & cash equivalents at end of period $2,855,000,000 ================= Delta to Deepen Seat Cuts Amidst Rising Fuel Prices Delta Air Lines, Inc. is planning to further cut seating capacity by as much as five percent after high fuel and maintenance costs contributed to low second quarter profits, Bloomberg News reported on July 27, 2011. The Company's fuel costs increased 39 percent to about $1 billion. About Delta Air Lines Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- provides scheduled air transportation for passengers and cargo throughout the United States, and around the world. The Company's route network is centered on the hub system it operate at airports in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK, Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo- Narita. The hub operations include flights, which gather and distribute traffic from markets in the geographic region surrounding the hub to domestic and international cities and to other hubs. The network is supported by a fleet of aircraft, which is varied in terms of size and capabilities. On Dec. 31, 2009, the Company's wholly owned subsidiary Northwest Airlines, Inc., merged with and into Delta. The wholly owned subsidiary of the Company is Northwest Airlines Corporation. Northwest and 12 affiliates filed for Chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines and Northwest Airlines carry a 'B/Stable/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's and "B-" LT Issuer Default rating from Fitch. S&P said at the end of February 2011 that its ratings on Atlanta, Ga.-based Delta Air Lines Inc. reflect its highly leveraged financial profile, with significant intermediate-term debt maturities, and the risks associated with participation in the price-competitive, cyclical, and capital-intensive airline industry. The ratings also incorporate the reduced debt load and operating costs Delta achieved while in Chapter 11 in 2005-2007, and its enhanced competitive position and synergistic opportunities associated with its 2008 merger with Northwest Airlines Corp. (parent of Northwest Airlines Inc.), with the two airlines fully integrated in December 2009. S&P characterize Delta's business risk profile as weak and its financial risk profile as highly leveraged. DELTA AIR: Reports July 2011 Traffic Results -------------------------------------------- Delta Air Lines reported traffic results for July 2011. System traffic in July 2011 was flat compared to July 2010 on a 1.0 percent increase in capacity. System load factor of 87.6 percent was 0.7 points lower than the prior year. International traffic increased 1.5 percent year over year on a 3.3 percent increase in capacity, and load factor decreased 1.5 points to 87.1 percent. Domestic traffic decreased 0.9 percent year over year on a 0.8 percent decrease in capacity. Domestic load factor decreased 0.2 points to 87.9 percent. Delta Air Lines Monthly Traffic Results (a) Jul-11 Jul-10 Change RPMs (000): Domestic 11,249,421 11,352,183 (0.9%) Delta Mainline 8,924,624 8,981,126 (0.6%) Regional 2,324,797 2,371,057 (2.0%) International 8,392,446 8,269,253 1.5% Latin America 1,375,111 1,401,075 (1.9%) Delta Mainline 1,351,498 1,363,845 (0.9%) Regional 23,613 37,230 (36.6%) Atlantic 4,676,995 4,730,274 (1.1%) Pacific 2,340,340 2,137,904 9.5% Total System 19,641,867 19,621,436 0.1% ASMs (000): Domestic 12,792,514 12,890,153 (0.8%) Delta Mainline 10,001,906 10,045,103 (0.4%) Regional 2,790,608 2,845,050 (1.9%) International 9,640,751 9,328,572 3.3% Latin America 1,535,866 1,578,771 (2.7%) Delta Mainline 1,505,156 1,532,007 (1.8%) Regional 30,710 46,764 (34.3%) Atlantic 5,279,380 5,311,578 (0.6%) Pacific 2,825,505 2,438,223 15.9% Total System 22,433,265 22,218,725 1.0% Load Factor: Domestic 87.9% 88.1% (0.2) pts Delta Mainline 89.2% 89.4% (0.2) pts Regional 83.3% 83.3% (0.0) pts International 87.1% 88.6% (1.5) pts Latin America 89.5% 88.7% 0.8 pts Delta Mainline 89.8% 89.0% 0.8 pts Regional 76.9% 79.6% (2.7) pts Atlantic 88.6% 89.1% (0.5) pts Pacific 82.8% 87.7% (4.9) pts Total System 87.6% 88.3% (0.7) pts Mainline Completion 99.1% 97.7% 1.4 pts Factor Passengers Boarded 16,018,038 15,765,141 1.6% Cargo Ton Miles (000) 203,275 203,092 0.1% Delta Air Lines Year To Date Traffic Results (a) Jul-11 Jul-10 Change RPMs (000): Domestic 67,170,086 67,610,953 (0.7%) Delta Mainline 53,017,298 53,070,350 (0.1%) Regional 14,152,788 14,540,603 (2.7%) International 45,767,019 44,271,652 3.4% Latin America 8,239,158 8,569,882 (3.9%) Delta Mainline 8,114,326 8,369,663 (3.1%) Regional 124,832 200,219 (37.7%) Atlantic 24,204,106 23,256,910 4.1% Pacific 13,323,755 12,444,860 7.1% Total System 112,937,105 111,882,605 0.9% ASMs (000): Domestic 81,089,299 80,823,809 0.3% Delta Mainline 62,949,676 62,452,097 0.8% Regional 18,139,623 18,371,712 (1.3%) International 57,703,512 53,394,201 8.1% Latin America 10,489,417 10,731,653 (2.3%) Delta Mainline 10,308,545 10,464,695 (1.5%) Regional 180,872 266,958 (32.2%) Atlantic 30,588,379 28,052,097 9.0% Pacific 16,625,716 14,610,451 13.8% Total System 138,792,811 134,218,010 3.4% Load Factor: Domestic 82.8% 83.7% (0.9) pts Delta Mainline 84.2% 85.0% (0.8) pts Regional 78.0% 79.1% (1.1) pts International 79.3% 82.9% (3.6) pts Latin America 78.5% 79.9% (1.4) pts Delta Mainline 78.7% 80.0% (1.3) pts Regional 69.0% 75.0% (6.0) pts Atlantic 79.1% 82.9% (3.8) pts Pacific 80.1% 85.2% (5.1) pts Total System 81.4% 83.4% (2.0) pts Passengers Boarded 95,702,103 94,518,767 1.3% Cargo Ton Miles (000) 1,382,745 1,275,558 8.4% About Delta Air Lines Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- provides scheduled air transportation for passengers and cargo throughout the United States, and around the world. The Company's route network is centered on the hub system it operate at airports in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK, Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo- Narita. The hub operations include flights, which gather and distribute traffic from markets in the geographic region surrounding the hub to domestic and international cities and to other hubs. The network is supported by a fleet of aircraft, which is varied in terms of size and capabilities. On Dec. 31, 2009, the Company's wholly owned subsidiary Northwest Airlines, Inc., merged with and into Delta. The wholly owned subsidiary of the Company is Northwest Airlines Corporation. Northwest and 12 affiliates filed for Chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines and Northwest Airlines carry a 'B/Stable/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's and "B-" LT Issuer Default rating from Fitch. S&P said at the end of February 2011 that its ratings on Atlanta, Ga.-based Delta Air Lines Inc. reflect its highly leveraged financial profile, with significant intermediate-term debt maturities, and the risks associated with participation in the price-competitive, cyclical, and capital-intensive airline industry. The ratings also incorporate the reduced debt load and operating costs Delta achieved while in Chapter 11 in 2005-2007, and its enhanced competitive position and synergistic opportunities associated with its 2008 merger with Northwest Airlines Corp. (parent of Northwest Airlines Inc.), with the two airlines fully integrated in December 2009. S&P characterize Delta's business risk profile as weak and its financial risk profile as highly leveraged. DELTA AIR: Starts Codeshare Flights With Aerolineas --------------------------------------------------- Delta Air Lines (NYSE: DAL) and Aerolineas Argentinas announced a codesharing agreement for flights connecting Miami and Atlanta to Buenos Aires as well as service to 14 U.S. destinations, eight domestic destinations in Argentina, three flights to Canada and flights to Brazil, Bolivia, Chile, Paraguay and Uruguay. Codesharing on the flights will start in the fourth quarter of 2011. The airlines also announced the future activation of new reciprocal benefits for their frequent fliers that include accrual and redemption of miles, scheduled to start in 2012. Aerolineas Argentinas will also join the SkyTeam global alliance in 2012, which will allow the carriers to provide additional customer benefits. "Since 1997, Delta's presence in South America has grown significantly. Today we offer 95 weekly nonstop flights to eight countries in South America, and a total of 1,083 weekly flights to Latin America and the Caribbean. This new agreement with Aerolineas Argentinas is key to our strategy, and will help us solidify and expand our network to, from and within Argentina and will allow us to provide service to all countries in the Southern Cone," said Delta President Ed Bastian. "A significant step for Aerolineas Argentinas, this codeshare agreement validates the bold and aggressive steps they are taking to offer a world-class network prior to joining SkyTeam in 2012." "This new agreement offers Aerolineas Argentinas a great opportunity to expand its network in North America, and also will offer Delta customers new destinations throughout Argentina and South America," said Mariano Recalde, president of Aerolineas Argentinas. "The mutual benefits for our passengers are clear, now Aerolineas' customers will be able to access over 300 destinations around the world." Codeshare flights allow passengers to buy tickets on one or more carriers from a single point of sale, offering greater access to another airline's network. Delta and Aerolineas Argentinas Codeshare Flights When implemented in the fourth quarter of 2011, the agreement will connect Delta's daily service from its hub in Atlanta to the Aerolineas Argentinas hub at Buenos Aires and beyond to cities in Argentina, Brazil, Bolivia, Chile, Paraguay and Uruguay. It also includes flights connecting Aerolineas Argentinas service from Buenos Aires to Miami with flights to 15 cities in the U.S. and Canada on Delta's network. Delta will sell connecting service on Aerolineas Argentinas flights to eight Argentine destinations: Calafate, Cordoba, Iguazu, Mendoza, Rio Grande, Rosario, San Carlos de Bariloche, and Ushuaia, the capital city of Tierra del Fuego Province. Additional destinations in South America include: Rio de Janeiro and Sao Paulo, Brazil; Santa Cruz, Bolivia; Santiago de Chile, Chile; Asuncion, Paraguay; and Montevideo, Uruguay. Aerolineas Argentinas will sell service to 14 additional U.S. destinations and three Canadian destinations. The U.S. domestic destinations are: Boston, Chicago, Dallas, Denver, Houston, Los Angeles, New Orleans, New York City, Orlando, Philadelphia, San Francisco, San Juan, Seattle and Washington, D.C. Aerolineas Argentinas also will put its code on Delta service to Montreal, Toronto and Vancouver in Canada. Reciprocal Frequent Flier Benefits In addition, Delta and Aerolineas Argentinas will introduce reciprocal accrual and redemption benefits for frequent fliers in 2012. SkyMiles and Aerolineas Plus members will be able to accrue and redeem frequent flier miles on all Delta and Aerolineas Argentinas flights. The airlines already offer reciprocal access to their lounges: Delta's award-winning Delta Sky Club lounges in 35 airports worldwide and Aerolineas Argentinas' Salon Condor at the Ministro Pistarini International Airport in Buenos Aires. About Aerolineas Argentinas Aerolineas Argentinas, the Republic of Argentina's national airline, is one of South America's leading companies. Aerolineas Argentinas flies to 19 international destinations in America, Europe and the South Pacific. Along with Austral Lineas Aereas, Aerolineas operates flights to 33 destinations in Argentina, with flights to more cities in the Argentinean territory than any other airline. Since March 2010, it provides dynamic links between Argentina and the region through its new hub in Aeroparque. Aerolineas is implementing an ambitious fleet renewal program, which began in 2009 with the addition of 12 Boeing Next-Generation 737-700s and the acquisition of 20 Embraer 190s. In November 2010, the company began the process of joining SkyTeam, one of the most prestigious airline alliances worldwide. For more information about the company, visit www.aerolineas.com About Delta Air Lines Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- provides scheduled air transportation for passengers and cargo throughout the United States, and around the world. The Company's route network is centered on the hub system it operate at airports in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK, Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo- Narita. The hub operations include flights, which gather and distribute traffic from markets in the geographic region surrounding the hub to domestic and international cities and to other hubs. The network is supported by a fleet of aircraft, which is varied in terms of size and capabilities. On Dec. 31, 2009, the Company's wholly owned subsidiary Northwest Airlines, Inc., merged with and into Delta. The wholly owned subsidiary of the Company is Northwest Airlines Corporation. Northwest and 12 affiliates filed for Chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines and Northwest Airlines carry a 'B/Stable/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's and "B-" LT Issuer Default rating from Fitch. S&P said at the end of February 2011 that its ratings on Atlanta, Ga.-based Delta Air Lines Inc. reflect its highly leveraged financial profile, with significant intermediate-term debt maturities, and the risks associated with participation in the price-competitive, cyclical, and capital-intensive airline industry. The ratings also incorporate the reduced debt load and operating costs Delta achieved while in Chapter 11 in 2005-2007, and its enhanced competitive position and synergistic opportunities associated with its 2008 merger with Northwest Airlines Corp. (parent of Northwest Airlines Inc.), with the two airlines fully integrated in December 2009. S&P characterize Delta's business risk profile as weak and its financial risk profile as highly leveraged. DELTA PETROLEUM: Reports $534,000 Net Income in June 30 Quarter --------------------------------------------------------------- Delta Petroleum Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on form 10-Q reporting net income of $534,000 on $16.88 million of total revenue for the three months ended June 30, 2011, compared with a net loss of $152.48 million on $14.71 million of total revenue for the same period during the prior year. The Company also reported a net loss of $29.73 million on $34.59 million of total revenue for the six months ended June 30, 2011, compared with a net loss of $168.47 million on $33.94 million of total revenue for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $975.84 million in total assets, $489.14 million in total liabilities, current and long-term, and $486.70 million in total equity. Carl Lakey, Delta's CEO and President stated, "We are pleased to provide our shareholders with another solid operating quarter coupled with the accomplishment of some very important strategic steps. We sold our remaining non-core assets, which reduced our leverage and provided sufficient liquidity to continue our deep shale evaluation and development in the Vega Area. While the strategic alternatives process, the 2C well results, and the Netherland Sewell report were all announced subsequent to the end of the quarter, much of the efforts that went into those steps occurred in the second quarter. The 2B and 2C well results and Netherland Sewell's report are very important contributions that support Delta's intrinsic value and aid our strategic alternatives process." A full-text copy of the Form 10-Q is available for free at: http://is.gd/oXa3QH About Delta Petroleum Corp Delta Petroleum Corporation -- http://www.deltapetro.com/-- is an oil and gas exploration and development company based in Denver, Colorado. The Company's core area of operation is in the Rocky Mountain region, where the majority of its proved reserves, production and long-term growth prospects are located. Its common stock is listed on the NASDAQ Capital Market System under the symbol "DPTR." The Company reported a net loss of $30.26 million on $23.05 million of total revenue for the three months ended March 31, 2011, compared with a net loss of $15.99 million on $29.17 million of total revenue for the same period during the prior year. As reported by the TCR on March 18, 2011, KPMG LLP, in Denver, Colorado, noted that due to continued losses and limited borrowing capacity the Company is evaluating sources of capital to fund the Company's near term debt obligations. "There can be no assurances that actions undertaken will be sufficient to repay obligations under the credit facility when due, which raises substantial doubt about the Company's ability to continue as a going concern." DELTATHREE INC: Incurs $1.6 Million Net Loss in Second Quarter -------------------------------------------------------------- deltathree, Inc., reported a net loss of $1.62 million on $2.20 million of revenue for the three months ended June 30, 2011, compared with a net loss of $813,000 on $3.39 million of revenue for the same period a year ago. The Company also reported a net loss of $1.59 million on $5.99 million of revenue for the six months ended June 30, 2011, compared with a net loss of $1.28 million on $6.46 million of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2011, showed $1.66 million in total assets, $5.07 million in total liabilities, and a $3.41 million total stockholders' deficiency. Mr. Effi Baruch, chief executive officer, president and senior vice president of Operations and Technology of deltathree, stated, "While deltathree continues to make good progress with the rollout of our international mobile VoIP offerings, with better than expected customer ramps and usage, our second quarter financial results were negatively impacted by a material drop in activity from our VoIP reseller customers based in the Middle East, caused in large part by the recent geopolitical uncertainty in the region. If we exclude the contribution from reseller client activity in the Middle East from the results of this quarter and the corresponding period in 2010, deltathree saw year-over-year revenue growth across its core VoIP service offerings, with particular strength in our Mobile offering with ACN under the ACN Mobile World brand as well as other international service provider customers." A full-text copy of the press release announcing the financial results is available for free at http://is.gd/hmGKcn About deltathree Based in New York, deltathree, Inc. (OTC QB: DDDC) -- http://www.deltathree.com/-- is a global provider of video and voice over Internet Protocol (VoIP) telephony services, products, hosted solutions and infrastructures for service providers, resellers and direct consumers. As reported in the TCR on March 23, 2011, Brightman Almagor Zohar & Co., in Tel Aviv, Israel, expressed substantial doubt about deltathree, Inc.'s ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that of the Company's recurring losses from operations and deficiency in stockholders' equity. DONALD HARTMANN: Victim's Amended Suit Survives Motion to Dismiss ----------------------------------------------------------------- Bankruptcy Judge Michael E. Romero denied Donald Leonhard Hartmann's motion to dismiss an amended complaint filed by Sally D. Frederick. Ms. Frederick filed her Complaint objecting to dischargeability on Nov. 22, 2010. She alleges she made investments through Mr. Hartmann, who was at the time a licensed securities broker, and that Mr. Hartmann induced her to invest in MKA Real Estate Qualified Fund by misrepresenting the stability of the Fund, Ms. Frederick's ability to withdraw money from her investment, Ms. Frederick's qualifications to invest, and Mr. Hartmann's investigation of the Fund. According to Ms. Frederick, at Mr. Hartmann's behest, she sold rental real estate and invested all the $156,000 in proceeds in the Fund. She asserts Mr. Hartmann falsified paperwork indicating she was eligible to invest in the Fund, when in fact she was not a qualified investor. Later, Mr. Hartmann persuaded her to mortgage her residence and invest an additional $196,000 in the Fund. Ms. Frederick received limited distributions, which later ceased. In addition, she discovered she could not withdraw her funds or redeem her investment. Notwithstanding demands to Mr. Hartmann, he did not return Ms. Frederick's investment, nor did she receive any further distributions. As a result, in late 2009 Ms. Frederick sought arbitration through the Financial Industry Regulatory Authority, and was awarded approximately $240,000 from that proceeding. The award remains unsatisfied. As reported by the Troubled Company Reporter on May 31, 2011, the Court granted Mr. Hartmann's previous motion to the extent it sought dismissal of Ms. Frederick's second claim for relief under 11 U.S.C. Sec. 523(a)(19), and to the extent it sought dismissal of the embezzlement components of her first claim for relief under Sec. 523(a)(4). The Court denied Mr. Hartmann's previous motion to the extent it sought dismissal of the fraud or defalcation and larceny components of Ms. Frederick's first claim for relief under Sec. 523(a)(4), her third claim for relief under Sec. 523(a)(2)(A), and her fourth claim for relief under Sec. 523(a)(6). The Court then ordered Ms. Frederick to file an amended complaint which properly asserted the larceny claim under Sec. 523(a)(4) and the willful and malicious injury elements of the claim under Sec. 523(a)(6). Ms. Frederick filed her Amended Complaint Objecting to Dischargeability on June 22, 2011. Mr. Hartmann's renewed Motion states the Amended Complaint does not properly state a claim for larceny or for willful and malicious injury, and seeks dismissal of the Sec. 523(a)(4) claim to the extent it alleges larceny and of the Sec. 523(a)(6) claim in its entirety. Judge Romero said the Amended Complaint contains sufficient allegations that Mr. Hartmann committed intentional acts which he knew were substantially certain to cause Ms. Frederick the specific injury of losing her money. The case is Sally D. Frederick, v. Donald Leonhard Hartmann, Adv. Proc. No. 10-1919 (Bankr. D. Colo.). A copy of Judge Romero's Aug. 4, 2011 Order is available at http://is.gd/hfYgQnfrom Leagle.com. Donald Leonhard Hartmann is a Chapter 11 Debtor (Bankr. D. Colo. Case No. 10-31429). DSI HOLDINGS: Has Final OK to Borrow up to $21.7MM from Ableco -------------------------------------------------------------- On July 21, 2011, the U.S. Bankruptcy Court for the District of Delaware entered a final order authorizing postpetition financing and authorizing the use of cash collateral. DSI Holdings, Inc., et al., are authorized to borrow, on a final basis, up to $21.7 million from Ableco, L.L.C., as DIP Agent for itself and the DIP Lenders in accordance with the DIP Credit Agreement, secured by security interests in and liens upon all of the Collateral, provided that disbursements are in accordance with a budget, and any borrowings in excess of $15 million will be in the sole and absolute discretion of the DIP Agent. DSI Holdings, Inc., et al., also received authorization to use the Collateral (including Cash Collateral), and to draw on the DIP facility to make any disbursement as specifically provided in the budget. The DIP Lenders are granted, effective as of the Commencement Date, first priority interest and liens, superior to all other liens, claims or security interests that any creditor of the Debtor's estates may have (but subject to the Carve Out Expenses and the Permitted Priority Liens, as defined in the DIP Credit Agreement), in the Collateral. The DIP Lenders are also granted an allowed superpriority administrative claims pursuant to Section 364(c)(1) of the Bankruptcy Code, subject only to the Carve-Out Expenses. Debtors are authorized to use cash collateral until the termination of the DIP Lenders' commitment to lend under the DIP Credit Agreement or the other Loan Documents, subject to the Senior Liens and the Junior Liens. As adequate protection for the diminution in value of their interests in the Pre-Petition Collateral (including cash collateral), the First Lien Lenders (excluding the Credit Support Provider, are granted senior replacement liens upon all collateral. The senior replacement liens will be junior and subordinate only to the DIP Liens, the Permitted Priority Liens, the Carve Out Expenses and any other liens permitted to be senior to the Senior Liens by the First Lien Loan Documents. To cover any shortfall, the First Lien Lenders (excluding the Credit Support Provider) is also granted an allowed superpriority administrative expense claim., junior only to the right of payment of the DIP Obligations, the superpriority claim in favor of the DIP Lenders, and the Carve Out Expenses. The DIP Facility matures on the earlier of six months from the date of the credit agreement; the effective date of a plan of reorganization in the Debtors' case; or the date of sale or liquidation of substantially all of the equity interests or assets of the Debtors. An event of default under the DIP Facility will occur upon the Debtor's failure to achieve timeline milestones in connection with the sale of substantially all of their assets and equity interests, including: Entry of Sale Procedures Order : no later than July 25, 2011 Auction Sale : no later than Aug. 31, 2011 Sale Order : no later than Oct. 4, 2011 Sale Closing : no later than 21 days after entry of Sale Order A copy of the final order is available at: http://bankrupt.com/misc/dsi.finaldipfinancingorder.pdf 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. Kurtzman Carson Consultants, LLC, serves as claims agent. Sitrick & Company serves as public relations consultants. 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. DSI HOLDINGS: Can Employ Weil Gotshal as Counsel ------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has approved DSI Holdings Inc. and its debtor affiliates' application to employ Weil, Gotshal & Manges as their attorneys, nunc pro tunc to the Petition Date. The Court approved the Debtors' retention of Weil under a general retainer in accordance with Weil's normal hourly rates and disbursement policies. Weil will not charge an hourly rate above $1,000 per hour for any of its attorneys or personnel. The Court is satisfied that based on representations made by Michael F. Walsh, a member of the Weil, that the firm represents no interest adverse to the Debtors or their estates and is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). 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. Kurtzman Carson Consultants, LLC, serves as claims agent. Sitrick & Company serves as public relations consultants. 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. DYNAVAX TECHNOLOGIES: Posts $10.6-Mil. Net Loss in 2nd Quarter -------------------------------------------------------------- Dynavax Technologies Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $10.6 million on $7.3 million of revenues for the three months ended June 30, 2011, compared with a net loss of $28.0 million on $2.2 million of revenues for the same period last year. The Company reported a net loss of $29.1 million on $9.0 million of revenues for the six months ended June 30, 2011, compared with a net loss of $37.2 million on $10.5 million of revenues for the same period of 2010. The Company's balance sheet at June 30, 2011, showed $74.4 million in total assets, $28.6 million in total liabilities, and stockholders' equity of $45.8 million. Ernst & Young LLP, in Palo Alto, California, expressed substantial doubt about Dynavax Technologies' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that of the Company's recurring losses from operations. A complete text of the Form 10-Q is available for free at: http://is.gd/668JFQ Berkeley, Calif. Based Dynavax Technologies Corporation (NASDAQ: DVAX) -- http://www.dynavax.com/-- is clinical-stage biopharmaceutical company. The Company discovers and develops novel products to prevent and treat infectious and inflammatory diseases. The Company's lead product candidate is HEPLISAV, a Phase 3 investigational adult hepatitis B vaccine designed to provide rapid and superior protection with fewer doses than current licensed vaccines. DYNEGY HOLDINGS: Delaware Supreme Court Rejects PSEG Appeal ----------------------------------------------------------- American Bankruptcy Institute reports that Delaware's Supreme Court on Friday rejected Public Service Enterprise Group Inc.'s last-ditch bid to hold up Dynegy Inc.'s $1.7 billion restructuring, noting that the deal was done, the money had moved and the fight was "moot." $1.7-Bil. Restructuring Vice Chancellor Donald Parsons of Delaware's Court of Chancery on July 29 thumbed down the request of Public Service Enterprise Group Inc. for an order to hold up Dynegy Inc.'s planned $1.7 billion restructuring. The judge said PSEG, which leases plants to Dynegy, failed to show it is likely to succeed on the merits of claims that Dynegy's restructuring would run afoul of contract protections. Judge Parsons also found it unlikely Dynegy's restructuring would later be found to be a fraud on creditors. Earlier in July, Dynegy launched a $1.7 billion loan package tied to a planned corporate restructuring. The corporate-debt restructuring will be managed by investment bank, Credit Suisse. Under the proposal, the company will split its coal and natural- gas generating assets into two separate entities that will be bankruptcy remote from the parent holding company, Dynegy Holdings Inc. The new companies could be sold or pay dividends to shareholders even if the holding company eventually defaults on its $3 billion of bonds. PSEG, which is owed $790 million by Dynegy in lease payments, sued in Delaware Court of Chancery to block the reorganization on the grounds that it "fraudulently transfers" assets away from the parent holding company, which guarantees the leases. LibertyView Capital Management, which owns $30 million of Dynegy bonds, is pursuing a similar action in New York. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE:DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Failed Sale The Troubled Company Reporter has chronicled Dynegy's attempts to sell itself. In August 2010, Dynegy struck a deal to be acquired by an affiliate of The Blackstone Group at $4.50 a share or roughly $4.7 billion. That offer was raised to $5.00 a share in November. Through Carl Icahn and investment fund Seneca's efforts, shareholders thumbed down both offers. In December 2010, an affiliate of Icahn commenced a tender offer to purchase all of the outstanding shares of Dynegy common stock for $5.50 per share in cash, or roughly $665 million in the aggregate. In February 2011, Icahn Enterprises L.P. terminated the proposed merger agreement with the Company after it failed to garner the required number of shareholder votes. Goldman, Sachs & Co. and Greenhill & Co., LLC, served as financial advisors and Sullivan & Cromwell LLP served as legal counsel to Dynegy on the sale efforts. Bankruptcy Warning Dynegy warned shareholders in March it might be forced into bankruptcy if it is unable to renegotiate the terms of its existing debt. The Company's balance sheet at March 31, 2011, showed $9.82 billion in total assets, $7.15 billion in total liabilities and $2.67 billion in total stockholders' equity. Ernst & Young LLP, in Houston, said Dynegy projects that it is likely that it will not be able to comply with certain debt covenants throughout 2011. "This condition and its impact on Dynegy Inc.'s liquidity raises substantial doubt about Dynegy Inc.'s ability to continue as a going concern." * * * In July 2011, Moody's downgraded Dynegy Holdings' probability of default rating to 'Ca' from 'Caa3'. "The downgrade of DHI's PDR and senior unsecured notes to Ca reflects the increased likelihood of a distressed debt exchange transaction occurring within the next several months following announcement of a corporate reorganization that seeks to modify asset ownership within DHI through the formation of several wholly-owned subsidiaries", said A.J. Sabatelle, Senior Vice President of Moody's. "Separate financing arrangements being established at these subsidiaries will have annual limits placed on the amount of cash flow that can be paid to their indirect parent, which Moody's believes raises default prospects for DHI's senior unsecured notes and the company's lease", added Mr. Sabatelle. DYNEGY POWER: Moody's Assigns B2 Rating to $1.1-Mil. Term Loan ------------------------------------------------------------- Moody's Investors Service has assigned a final B2 rating to Dynegy Power, LLC (GasCo) $1.1 billion senior secured term loan due 2016. The rating outlook for GasCo is negative. RATINGS RATIONALE The B2, LGD1, 5% rating assigned to GasCo's senior secured term loan reflects the secured position of this debt relative to Dynegy Holdings, Inc.'s (DHI: Caa3 Corporate Family Rating / Ca Probability of Default Rating) substantial unsecured debt, the modest amount of secured debt in the existing capital structure and the standalone credit quality of GasCo where Moody's expects a high percentage of gross margin and cash flow to be derived from various contractual arrangements currently in place with credit worthy counterparties over the next several years. With the corporate restructuring, GasCo owns 6,771 megawatts (MW) of DHI's natural gas-fired generating plants, which collectively represent eight plants in five markets. Lenders are secured by a collateral package that includes the plant collateral, with operating company leverage being modest, as debt / KW at closing equivalent to $162/KW based upon all eight plants or $250/KW when one considers only the newest, more efficient natural gas plants. The rating recognizes the existence of a restricted payments test at GasCo which limits the amount of annual restricted payments to $135 million. GasCo is directly owned by Dynegy Gas Investments Holdings, LLC (DGIH), whose sole purpose is to hold the stock of GasCo. Both GasCo and DGIH are owned by Dynegy Gas Holdco, LLC (DGH). Proceeds from the GasCo term loan, along with cash on hand, are being used to refinance in part certain existing indebtedness and guarantees of DHI and its subsidiaries, including amounts required to repay outstanding indebtedness under the existing DHI secured credit facility, to cash collateralize letters of credit, to make a $200 million restricted payment to DGIH (and subsequently to DGH), to pay transaction expenses, and to fund additional cash for GasCo's working capital requirements. In addition to GasCo, DHI has converted Dynegy Midwest Generation LLC (CoalCo) into a bankruptcy remote entity, which is owned by Dynegy Coal Investments Holdings, LLC (DCIH), whose sole asset is the stock of CoalCo. DCIH is owned by Dynegy Coal Holdco, LLC. Moody's understands that a $600 million five year secured term loan exists at CoalCo to be used primarily to cash collateralize letters of credit, to make a $200 million restricted payment to DCIH (which will make a restricted payment in an equal amount to Dynegy Coal Holdco, LLC), to pay transaction expenses and to fund additional cash to be used for working capital and general corporate purposes. Collateral securing the term loan is the 3,132 MW primarily coal-fired portfolio of six plants located in the MISO region. While collateral coverage appears strong, Moody's anticipates the credit metrics for CoalCo to be more volatile than those at GasCo over the next few years because of the sole reliance on a more challenged unregulated power market in the Midwest for earnings and cash flow, the lack of formal capacity market in MISO, as well as the required capital investment program being undertaken for environmental expenditures. As such, Moody's anticipates distributable cash flow from CoalCo through 2013 to be more modest and more volatile (as compared to GasCo) as environmental capital expenditures are being incurred. To that end, Moody's understands that the annual restricted payment amount at CoalCo is $90 million. As part of the reorganization, DHI has implemented ring-fencing like measures around DGIH and GasCo and its subsidiaries, and around DCIH and CoalCo and its subsidiaries. DGIH and DCIH and each of their respective subsidiaries, GasCo and CoalCo, has at least one independent manager or director, and each has a variety of separateness provisions with the intent to hold itself out as a separate entity. Moody's further understands that unanimous consent of the board of managers, including the independent manager, is required for any bankruptcy proceeding, and that the independent director will make such decisions based solely on the interests of GasCo or CoalCo and not based upon the interests of DHI or its parent, Dynegy Inc. DHI intends to sell up to 20% of GasCo. Potential owners of 20% of GasCo could include an unrelated third party, DHI shareholders, or DHI creditors. While the intent of the reorganization is for each legal entity to be viewed as a separate organization from a legal standpoint, Moody's believes that the operations of the company will continue to run largely as a consolidated concern. Commercial strategies, fuel and asset management strategies, and capital investment will be directed and guided by DHI and by subsidiaries of DHI excluded from the ring-fenced subsidiaries. These activities, many of which are integral to the operating companies' and consolidated parent's financial performance, are documented in intercompany agreements. As such, GasCo's B2 rating is less affected by the implementation of these ring-fencing like measures and more influenced by the consolidated credit profile at DHI. This is particularly the case given that Moody's believes the primary reason for executing the corporate reorganization has more to with restructuring DHI's on- and off-balance sheet debt obligations in the future and less to do with any operational or synergistic benefits associated with having two major subsidiaries. DHI's Caa3 Corporate Family Rating reflects Moody's concern about continued weak cash flow over the next several years due to challenging market conditions caused by lower power prices due to low natural gas prices and lackluster electric demand. On a consolidated basis, Moody's believes that during 2011 and 2012, in the absence of some form of debt restructuring, the company will generate both negative operating cash flow and negative free cash flow due to weak operating margins, higher required lease payments, and required funding for environmental related capital expenditures. GasCo's negative outlook largely reflects the negative outlook at DHI, along with the interrelationship and reliance that will continue to exist between GasCo, DHI, and other DHI subsidiaries irrespective of the formation of the ring-fencing like measures adopted by the company. In light of the continued uncertainty surrounding other potential DHI restructuring initiatives, including the sale of up to 20% of GasCo, the rating outlook for GasCo is likely to mirror that of DHI. The principal methodology used in this rating was Global Unregulated Utilities and Power Companies published in August 2009. Headquartered in Houston, Texas, DHI is an independent power producer that owns a portfolio of 11,596 MW electric generating assets. DHI is wholly-owned by Dynegy, Inc. Dynegy Power, LLC (GasCo) owns 6,771 MW of natural gas-fired generating plants, which collectively represent eight plants in five markets. GasCo is directly owned by Dynegy Gas Investments Holdings, LLC (DGIH), whose sole purpose is to hold the stock of GasCo. Both GasCo and DGIH are owned by Dynegy Gas Holdco, LLC (DGH). DYNEGY INC: Incurs $116 Million Net Loss in Second Quarter ---------------------------------------------------------- Dynegy Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $116 million on $326 million of revenue for the three months ended June 30, 2011, compared with a net loss of $191 million on $239 million of revenue for the same period during the prior year. The Company also reported a net loss of $193 million on $831 million of revenue for the six months ended June 30, 2011, compared with a net loss of $46 million on $1.09 billion of revenue for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $9.86 billion in total assets, $7.30 billion in total liabilities, and $2.56 billion in total stockholders' equity. "Our operating units turned in an excellent performance during the quarter," said Robert C. Flexon, president and chief executive officer of Dynegy. "In addition, we benefited from an improvement in G&A and Operating costs of approximately $15 million as our improvement efforts, initiated earlier this year, are beginning to show results. A prerequisite to our successful restructuring is the continued safe, reliable, and in compliance operations of our plants while reducing our cost structure." A full-text copy of the Form 10-Q is available for free at: http://is.gd/26Xop4 About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE:DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Failed Sale The Troubled Company Reporter has chronicled Dynegy's attempts to sell itself. In August 2010, Dynegy struck a deal to be acquired by an affiliate of The Blackstone Group at $4.50 a share or roughly $4.7 billion. That offer was raised to $5.00 a share in November. Through Carl Icahn and investment fund Seneca's efforts, shareholders thumbed down both offers. In December 2010, an affiliate of Icahn commenced a tender offer to purchase all of the outstanding shares of Dynegy common stock for $5.50 per share in cash, or roughly $665 million in the aggregate. In February 2011, Icahn Enterprises L.P. terminated the proposed merger agreement with the Company after it failed to garner the required number of shareholder votes. Goldman, Sachs & Co. and Greenhill & Co., LLC, served as financial advisors and Sullivan & Cromwell LLP served as legal counsel to Dynegy on the sale efforts. Bankruptcy Warning Dynegy warned shareholders in March it might be forced into bankruptcy if it is unable to renegotiate the terms of its existing debt. The Company's balance sheet at March 31, 2011, showed $9.82 billion in total assets, $7.15 billion in total liabilities and $2.67 billion in total stockholders' equity. Ernst & Young LLP, in Houston, said that Dynegy projects that it is likely that it will not be able to comply with certain debt covenants throughout 2011. "This condition and its impact on Dynegy Inc.'s liquidity raises substantial doubt about Dynegy Inc.'s ability to continue as a going concern." * * * In July 2011, Moody's downgraded Dynegy Holdings' probability of default rating to 'Ca' from 'Caa3'. "The downgrade of DHI's PDR and senior unsecured notes to Ca reflects the increased likelihood of a distressed debt exchange transaction occurring within the next several months following today's announcement of a corporate reorganization that seeks to modify asset ownership within DHI through the formation of several wholly-owned subsidiaries", said A.J. Sabatelle, Senior Vice President of Moody's. "Separate financing arrangements being established at these subsidiaries will have annual limits placed on the amount of cash flow that can be paid to their indirect parent, which Moody's believes raises default prospects for DHI's senior unsecured notes and the company's lease", added Sabatelle. EAST COAST: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: East Coast Abatement Co., Inc. 176 Winchaser Way Moyock, NC 27958 Bankruptcy Case No.: 11-73560 Chapter 11 Petition Date: August 5, 2011 Court: United States Bankruptcy Court Eastern District of Virginia (Norfolk) Judge: Stephen C. St. John Debtor's Counsel: Joseph T. Liberatore, Esq. CROWLEY, LIBERATORE, & RYAN, P.C. 1435 Crossways Boulevard, Suite 300 Chesapeake, VA 23320 Tel: (757) 333-4500 Fax: (757) 333-4501 E-mail: jliberatore@clrfirm.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/vaeb11-73560.pdf The petition was signed by Richard C. Webb, II, president. ELEPHANT & CASTLE: Committee Taps FTI Consulting as Fin'l Advisor ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Massachusetts Elephant & Castle Group and its affiliates, asks the U.S. Bankruptcy Court for the District of Massachusetts for permission to retain FTI Consulting, Inc., as its financial advisors. FTI will, among other things: -- assist the Committee with the assessment and monitoring of the Debtors' short term cash flow, liquidity, prepetition claim payments and operating results; -- assist the Committee in the review of any proposed plan(s) of reorganization and the related disclosure statement; and -- assist the Committee in the review and assessment of potential bids from investors in connection with any sale process. Subject to Court approval, FTI will seek payment for compensation on a fixed monthly basis of $45,000 per month, plus reimburesment of actual and necessary expenses incurred by FTI. To the best of the Committee's knowledge, FTI is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Massachusetts Elephant & Castle Group Boston-based Massachusetts Elephant & Castle Group and its affiliates operates 21 British-style restaurant pubs in the U.S. and Canada. The chain, with 10 locations in the U.S., generated revenue of $47.5 million in 2010, throwing off $3.9 million of earnings before interest, taxes, depreciation, amortization, and foreign exchange gains or losses. Elephant & Castle filed for Chapter 11 protection (Bankr. D. Mass. Lead Case No. 11-16155) on June 28, 2011. Bankruptcy Judge Henry J. Boroff presides over the case. John G. Loughnane, Esq. at Eckert Seamans Chein& Mellott, LLC represents the Debtor in its restructuring effort. Repechage Investments' estimated assets and debts at $10 million to $50 million. Other Debtors' estimated assets and debts at $0 to $10 million. On July 12, 2011, the U.S. Trustee's office appointed the Official Committee of Unsecured Creditors. ELEPHANT & CASTLE: Committee Taps Goulston & Storrs as Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Massachusetts Elephant & Castle Group and its affiliates, asks the U.S. Bankruptcy Court for the District of Massachusetts for permission retain the firm of Goulston & Storrs, P.C., as its counsel. Goulston & Storrs' standard hourly rates for attorneys range from $295 - $855 per hour and that its rates for paralegal range from $205 - $375 per hour. The professionals who will have primary responsibility for handling matters on behalf of the Committee in these cases and their respective hourly rates are: Christine D. Lynch $565 Peter Bilowz $500 Timothy J. Carter $305 Stacey A. Mordas, paralegal $250 Goulston & Storrs has agreed to discount its standard hourly rates by 10%, which will be reflected in each of the applications for compensation filed with the Court. 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 Massachusetts Elephant & Castle Group Boston-based Massachusetts Elephant & Castle Group and its affiliates operates 21 British-style restaurant pubs in the U.S. and Canada. The chain, with 10 locations in the U.S., generated revenue of $47.5 million in 2010, throwing off $3.9 million of earnings before interest, taxes, depreciation, amortization, and foreign exchange gains or losses. Elephant & Castle filed for Chapter 11 protection (Bankr. D. Mass. Lead Case No. 11-16155) on June 28, 2011. Bankruptcy Judge Henry J. Boroff presides over the case. John G. Loughnane, Esq. at Eckert Seamans Chein& Mellott, LLC represents the Debtor in its restructuring effort. Repechage Investments' estimated assets and debts at $10 million to $50 million. Other Debtors' estimated assets and debts at $0 to $10 million. On July 12, 2011, the U.S. Trustee's office appointed the Official Committee of Unsecured Creditors. Goulston & Storrs, P.C. represents the Committee in the Debtors' cases. The Committee tapped FTI Consulting, Inc., as its financial advisors. EMDEON BUSINESS: S&P Lowers Corporate Credit Rating to 'B+' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Nashville-based Emdeon Business Services LLC to 'B+' from 'BB-'. "At the same time, we placed the rating on CreditWatch with negative implications," S&P said. "We expect to withdraw our ratings on the existing credit facilities, which are not listed on CreditWatch, at the close of the transaction," S&P related. The ratings action follows the announcement that Blackstone Group will acquire a majority interest in Emdeon. Hellman & Friedman, one of the two current investors in Emdeon, is expected to retain a minority interest in the company post closing of the going- private transaction. "Terms have yet to be disclosed but we anticipate that the existing debt will be refinanced and we will withdraw our ratings on these issues as a result of the change of control. Although no terms have been announced, we believe that depending on the amount, if any, incremental debt from the transaction could potentially weaken the company's credit profile below current levels," S&P related. Adjusted debt to EBITDA was about 3.7x in March 2011. Additionally, Emdeon's 100% equity sponsor ownership limits corporate credit ratings above the 'B' category," S&P said. "We will resolve the CreditWatch when more information regarding the transaction and financing becomes available and we have the opportunity to review any potential changes in business or financial strategies," S&P added. EMS ENGINEERED: Files for Chapter 7 Bankruptcy ---------------------------------------------- Philly.com reports that EMS Engineered Mechanical Systems Inc., Box 48, Westville, filed for Chapter 7 in the U.S. Bankruptcy Court for the District of New Jersey. There is no schedules available. ENERJEX RESOURCES: James Loeffelbein Holds 7.11% Equity Stake ------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, James D. Loeffelbein and his affiliates disclosed that they beneficially own 4,932,355 shares of common stock of EnerJex Resources, Inc., representing 7.11% of the shares outstanding. As previously reported by the TCR on April 11, 2011, Mr. Loeffelbein disclosed that he beneficially own 15,249,430 shares of common stock of the Company representing 19.82% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/8uiO0V About EnerJex Resources Overland Park, Kansas-based EnerJex Resources, Inc., formerly known as Millennium Plastics Corporation, is an oil and natural gas acquisition, exploration and development company. The Company's oil and natural gas acquisition and development activities are currently focused in Eastern Kansas. The Company's balance sheet at March 31, 2011, showed $31.80 million in total assets, $14.63 million in total liabilities, and $17.17 million in total stockholders' equity. FAIRFAX CROSSING: Wins Confirmation of Reorganization Plan ---------------------------------------------------------- Judge Patrick Flatley of the U.S. Bankruptcy Court for the Northern District of West Virginia has confirmed Fairfax Crossing LLC and its affiliates' Second Amended Plan of Reorganization. Judge Flatley also orders that the Debtors' cases will be deemed substantively consolidated into one reorganized company. A copy of the Plan Confirmation Order is available at: http://bankrupt.com/misc/FAIRFAXCROSSING_orderconfirmingplan.pdf Fairfax Crossing has also filed a motion seek to delay the date on which the Effective Date occurs under the Plan so that the Debtors and BB&T have the opportunity to determine how best to address the note pledge issue in a manner that best carries out the purpose of the Plan. The parties are working diligently on resolving the issue, and a solution may require some further modification to the Plan or the Confirmation Order prior to the Effective Date. Some modification of the Plan is necessary before the Effective Date occurs to prevent the Debtors from being in default under the Plan. As reported in the Troubled Company Reporter on June 7, 2011, Fairfax Crossing LLC and Fairfax Crossing II LLC filed a Second Amended Plan of Reorganization, which provides for the substantial consolidation of the two debtors into one reorganized company. As of the Effective Date, the members, distributional interest holder, and managers of Fairfax immediately prior to the Effective Date will be deemed to be the members, distributional interest holder, and managers of the Reorganized Debtor without any further action by any party. Pursuant to Section 1129(a)(5) of the Bankruptcy Code, each of Ronald E. Marcus and Christopher B. Shultz, will continue to hold 50% of the membership interests and a 33.33% distributional interest in the Reorganized Debtor and the estate of Terry L. Marcus will continue to hold a 33.33% distributional interest in the Reorganized Debtor. Each of Ronald E. Marcus and Christopher B. Shultz will be a manager of the Reorganized Debtor. Claims are classified and will be paid according to this table: Class Description Treatment ----- ----------- --------- 1 Secured Claim of BB&T Impaired, Entitled to Vote Recovery: 100% 2 Secured Turf Guaranty Claim Impaired, Entitled to Vote Recovery: 100% 3 Secured Claim of Glendwell Impaired, Entitled to Vote and Jo Ann Lloyd Recovery: 100% 4 Unsecured Claim of Perry Impaired, Entitled to Vote Engineering Recovery: 100% 5 Unsecured Claims of Impaired, Entitled to Vote Unrelated Parties other Recovery: 100% than Perry Engineering 6 Unsecured Claims of Impaired, Entitled to Vote Related Parties Recovery: 100% 7 Equity Interests Unimpaired, Not Entitled to Vote Recovery: Retain Equity Interests in Reorganized Debtor A full-text copy of the Second Amended Plan, dated May 10, 2011, is available for free at http://ResearchArchives.com/t/s?7622 About Fairfax Crossing Based in Charles Town, West Virginia, Fairfax Crossing LLC filed for Chapter 11 Bankruptcy Protection on June 29, 2010 (Bankr. N.D. W.V. Case No. 10-01362). Judge Patrick M. Flatley presides over the Debtor's case. The Debtor estimated both assets and debts of between $1 million and $10 million. Debtor-affiliate Charles Town, West Virginia-based Fairfax Crossing II LLC filed a separate petition for Chapter 11 bankruptcy protection on June 29, 2010 (Bankr. N.D. W.V. Case No. 10-01368). Fairfax Crossing II disclosed $24,270,748 in assets and $5,589,190 in liabilities as of the petition date. Richard G. Gay, Esq., at the Law Office of Richard G. Gay, L.C., in Berkeley Springs, W. Va., and Lawrence J. Yumkas, Esq, at Vidmar & Sweeney, LLC, in Annapolis, Md., represent the Debtors as counsel. The cases are jointly consolidated under Case No. 10-01362. Fairfax is the developer of Lakeland Place at Fairfax Crossing, a community comprised of single family residences and townhomes in Ranson, West Virginia. Fairfax II is a real estate development company that holds title to a 19.1139 acre residential and commercial parcel in Fairfax Crossing and also holds title to an adjoining 31.13 acre parcel which Fairfax plans to develop into a residential community called Lloyd's Landing. FHG DEVELOPMENT: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------------- Philly.com reports that FHG Development New Jersey L.L.C., FHG South Jersey L.L.C., and FHG Acquisitions L.L.C. a New York Company, 542 Cross Keys Rd., No. 286, Sicklerville, filed for Chapter 11 in the U.S. Bankruptcy Court for the District of New Jersey. There is no schedules available. FRIEDMAN'S INC: Suit to Convert Debt to Equity Can Move Forward --------------------------------------------------------------- Thomson Reuters reports that Friedman's Inc. can proceed past the pleading stage with a lawsuit seeking to recharacterize funds loaned to it by stockholders as equity, a Delaware bankruptcy judge has ruled. According to the report, several stockholders, including Goldman Sachs Credit Partners LP, sought dismissal of the adversary complaint, saying the parties intended the funds to be debt. The report says, however, Judge Christopher Sontchi of the U.S. Bankruptcy Court for the District of Delaware said the liquidating trustee for Friedman's Inc. has made "facially plausible allegations" regarding recharacterization of the funds from debt to equity. The report says a group of shareholders subsequently filed general unsecured claims, saying the funds they provided were debt. Friedman's responded with an adversary complaint seeking to recharacterize the funds as equity. The shareholders asked Judge Sontchi to dismiss the complaint, saying the parties intended the funds to be a loan. The report notes the judge disagreed, concluding under the plaintiff-friendly light of a pleading-stage motion to dismiss that Friedman's had alleged facts sufficient to support a finding that the funds were equity. According to the report, Judge Sontchi reached this decision after citing the following allegations, all of which he said could weigh in favor of a finding that the funds were equity: -- There was a pro rata contribution by the shareholders. -- Interest payments were deferred. -- The promised interest rate was below market. -- Interest was not paid when funds were available. -- The contributions were made on a subordinated unsecured basis. The report says the judge noted the shareholders ultimately may prevail on the merits of their defense, saying certain other factors weigh in favor of characterizing the funds as debt. About Friedman's Inc. Addison, Texas-based Friedman's Inc. -- http://www.friedmans.com/ -- and -- http://www.crescentonline.com/-- comprised a leading specialty jewelry retail company. Friedman's operated 388 stores in 20 states with over 2,890 employees while Crescent Jewelers operated 85 stores in 3 states with over 600 employees. Friedman's and Crescent Jewelers filed for Chapter 11 protection (Bankr. D. Del. Case Nos. 08-10161 and 08-10179) on Jan. 28, 2008. David M. Green, Esq., Jocelyn Keynes, Esq., and Nicholas F. Kajon, Esq., at Stevens & Lee, P.C., in New York; and John D. Demmy, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, serve as counsel to the Debtors. The Debtors' professionals also include Rothschild, Inc., as investment banker and financial advisor; Retail Consulting Services, Inc. as real estate and lease consultants; ASK Financial as special counsel to review, analyze, and prosecute preference claims; Grant Thornton LLP as Tax Advisors; and KZC Services, LLC's Salvatore LoBiondo, Jr., as Chief Restructuring Officer, and Charles Carnaval as Director of Restructuring. The Official Committee of Unsecured Creditors appointed in the Debtors' cases is represented by Christopher J. Caruso, Esq., Alan Kolod, Esq., Lawrence L. Ginsburg, Esq., at Moses & Singer LLP in New York; and Charlene D. Davis, Esq., at Bayard, P.A., in Wilmington, Delaware. The Committee also retained Consensus Advisors as its financial advisors. On April 10, 2008, the Court approved the sale to Whitehall Jewelers, Inc., and a joint venture led by Great American Group LLC to sell to Whitehall the inventory and related property at 78 of the Debtors' stores, and to assume and assign to Whitehall the leases with respect to those 78 stores. On June 30, 2008, the liquidation of the balance of the Debtors' assets through store closing sales were concluded. At a confirmation hearing conducted on April 20, 2009, Friedman's and Crescent Jewelers attained confirmation of their liquidating plan in their Chapter 11 cases. GALLOP ENTERPRISES: Ala. High Ct. Withdraws Opinion in 2 Appeals ---------------------------------------------------------------- The Supreme Court of Alabama withdrew its June 17, 2011 opinion in two appellate cases -- EB Investments, L.L.C. v. Pavilion Development, L.L.C., et al.; and Pavilion Development, L.L.C., v. JBJ Partnership et al., Nos. 1091666, 1091667 -- and dismissed both appeals. EB Investments, L.L.C., and Pavilion Development, L.L.C., filed separate appeals challenging elements of an order entered by the Madison Circuit Court holding that Pavilion was entitled to redeem certain property in Madison County in which EB Investments and multiple other parties held legal interests. The Supreme Court of Alabama held that the trial court exceeded its discretion in certifying its judgment as final pursuant to Rule 54(b), Ala. R. Civ. P. and thus proper for an immediate appeal. A copy of the Supreme Court of Alabama's Aug. 5, 2011 decision is available at http://is.gd/xSLbqhfrom Leagle.com. The trial court action was initiated on March 21, 1997, when Pavilion, then operating as John Lary, L.L.C., sued to redeem 19 acres of land purchased by JBJ Partnership at a foreclosure sale on March 22, 1996. In August 1991, James E. Pace, James P. Pace, and William B. Pace, doing business as Pace Properties, sold approximately 22 acres of unimproved property in Madison County to Gallop Enterprises, Inc., a development company operated by Richard Tracey. The transaction was financed by Pace and in exchange for the land Gallop gave a promissory note secured by a mortgage on the property to Pace in the principal sum of $1,735,000. Gallop then obtained additional financing from Ben H. Walker, Inc., to develop a subdivision on the property, and in return Gallop gave Walker a second mortgage on the property with a principal value of $149,999. Gallop, however, exhausted its funds and could not proceed with the second phase of the subdivision project. Under threat of foreclosure, Gallop filed a petition for bankruptcy pursuant to Chapter 11 of the Bankruptcy Code. In April 1995, under the supervision of the bankruptcy court, the parties reached a settlement agreement wherein Gallop stipulated that it owed $1,439,010 to Pace and $149,999 to Walker. Pace also agreed to loan Gallop up to an additional $200,000 so that Gallop could complete development of the property and could then pay its debts to Walker and Pace with proceeds obtained from selling developed lots in the subdivision. By December 1995, Gallop was again in default on its obligations, and Pace instituted foreclosure proceedings. On March 22, 1996, the property was sold to JBJ -- a new partnership made up of the Pace family -- at a foreclosure auction for $100,000. The Pace family thereafter paid off the Walker note and continued developing the property on its own. On March 1, 1997, Gallop, through Mr. Tracey, sent a letter to JBJ stating that Gallop intended to exercise its statutory right to redeem the 19 acres it had lost in foreclosure. On March 13, 1997, after JBJ had advised Mr. Tracey that it did not recognize his authority to exercise Gallop's right of redemption, Tracey transferred Gallop's right of redemption to Pavilion, a company operated by his former brother-in-law John Lary and then still known as John Lary, L.L.C., in return for $1,000. GARLOCK SEALING: Dismissal of 2 Asbestos Cases Reversed ------------------------------------------------------- The Court of Appeals of Washington, Division One, reversed the trial court's dismissal of two personal injury lawsuits against manufacturers and suppliers of asbestos-containing products or equipment used on United States Navy vessels at the Puget Sound Naval Shipyard: (1) Abbay v. Aurora Pump Company George Abbay and his spouse Lynne Abbay appeal summary judgment dismissal of the personal injury lawsuit. In an effort to prevent the respondents from seeking removal to federal court, Abbay disclaimed "any cause of action or recovery for any injuries caused by any exposure to asbestos dust that occurred in a federal enclave, which expressly excludes U.S. Navy vessels." In the briefs submitted in opposition to summary judgment, Abbay clarified that the disclaimer excludes his causes of action under state law for exposure to asbestos while working on U.S. Navy vessels at PSNS. On reconsideration, the trial court applied the rules of grammar in ruling that Abbay disclaimed all state law causes of action that occurred at PSNS, including causes of action from exposure to asbestos on Navy ships. The Court of Appeals concluded that grammatical rules do not require interpreting the relative clause, "which expressly excludes U.S. Navy vessels," as only applying to the antecedent noun, "federal enclave," and the meaning of the disclaimer is ambiguous. As clarified in the briefs, the disclaimer does not exclude Abbay's state law causes of action from exposure to asbestos while working on U.S. Navy vessels. Accordingly, the Court of Appeals said it need not address whether the trial court erred in ruling that as a matter of law, PSNS in its entirety, is a federal enclave. The Court of Appeals reversed dismissal of Abbay's lawsuit and remanded the matter. George Abbay worked for about 26 years as a ship rigger on United States Navy vessels that were in dry dock or moored to piers at PSNS. In August 2007, he was diagnosed with malignant pleural mesothelioma, a form of cancer caused by exposure to asbestos. Leslie Controls is a respondent in the appeal. All proceedings in this matter against Leslie are stayed as a result of its bankruptcy filing. Garlock Sealing Technologies is an original defendant in the matter but not a respondent on appeal. Garlock has obtained a preliminary injunction staying all proceedings against it. A copy of the Court's Aug. 8 decision is available at http://is.gd/NIMHeYfrom Leagle.com. (2) Farrow v. Alfa Laval, Inc. Michael Farrow and his spouse Lidia Farrow filed a personal injury lawsuit against a number of manufacturers and suppliers of asbestos-containing products used on United States Navy vessels at the Puget Sound Naval Shipyard. In an attempt to avoid removal to federal court, the complaint disclaims "any cause of action or recovery for any injuries caused by exposure to asbestos dust that occurred in a federal enclave, which expressly excludes U.S. Navy vessels." The trial court ruled on summary judgment that the language of the disclaimer was unambiguous and meant that Farrow waived all claims from asbestos exposure that occurred at PSNS. In the linked case, Abbay v. Aurora Pump Co., No. 62399-1-I, the Court of Appeals held that because the exact same disclaimer language is ambiguous and susceptible to two reasonable interpretations, the plaintiff was entitled to clarify the meaning of the disclaimer in the written response filed in opposition to summary judgment. The Court of Appeals reversed the dismissal of Farrow's lawsuit, and remanded the matter. A copy of the Court's Aug. 8 decision is available at http://is.gd/ugC9lpfrom Leagle.com. Farrow died in May 2008. Garlock Sealing Technologies and Leslie Controls are respondents in the appeal. About Leslie Controls Based in Tampa, Florida, Leslie Controls manufacturers process control valves, severe service control valves, on-off valves, regulators, steam water heaters, actuators and controls. Leslie is a unit of CIRCOR International, Inc. Leslie Controls sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-12199) on July 12, 2010. Marion M. Quirk, Esq., and Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, assist the Company in its restructuring effort. Natalie Ramsey, Esq., at Montgomery, McCracken, Walker & Rhodes, LLP, represents the Asbestos Claimants Committee, and Edwin J. Heron, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represents the Future Claimants' Representative. William R. Hanlon, Esq., at Goodwin Procter LLP advises CIRCOR International, Inc. The Company estimated its assets at $10 million to $50 million and its debts at $50 million to $100 million at that the time of the filing. As reported by the Troubled Company Reporter, the Bankruptcy Court entered an order on October 28, 2010, confirming the amended prenegotiated Chapter 11 reorganization plan filed by Leslie Controls, Inc., on July 12, 2010. The reorganization plan is intended to permanently resolve Leslie's asbestos liability through the creation of a trust pursuant to Section 524(g) of the U.S. Bankruptcy Code. All current and future asbestos claims against Leslie would be channeled to the trust for review and payment, thus providing both Leslie and CIRCOR with permanent court protection from such claims. In February 2011, the U.S. District Court for the District of Delaware affirmed the U.S. Bankruptcy Court's confirmation of the amended pre-negotiated Chapter 11 reorganization plan filed by Leslie Controls. Leslie Controls emerged from Chapter 11 in April 2011. About Garlock Sealing Headquartered in Palmyra, New York, Garlock Sealing Technologies LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, 2010, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D. N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for asbestos matters. The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases is represented by Travis W. Moon, Esq., at Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC, Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and Jeanna Rickards Koski, Esq., in Washington, D.C. 20005. Joseph W. Grier, III, the Court-appointed legal representative for future asbestos claimants, has retained A. Cotten Wright, Esq., at Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co- counsel. About 124,000 asbestos claims are pending against Garlock in state and federal courts across the country. The Company says majority of pending asbestos actions against it is stale and dormant -- almost 110,000 or 88% were filed more than four years ago and more than 44,000 or 35% were filed more than 10 years ago. GB HERNDON: Court Has Authority Over Counterclaims Amid Stern ------------------------------------------------------------- In the case Adams National Bank, v. GB Herndon and Associates, Inc., et al., Adv. Proc. No. 10-10052 (Bankr. D. D.C.), the defendants filed with the Court a Motion to Temporarily Lift Final Judgment Pending Resolution of the Motion for Relief from Judgment and to Alter or Amend Judgment. In an Aug. 7, 2011 Memorandum Decision, a copy of which is available at http://is.gd/ne2IIwfrom Leagle.com, Bankruptcy Judge S. Martin Teel, Jr., said that to the extent the defendants' motion asks the Court to temporarily stay its decision lifting the automatic stay in the main bankruptcy case underlying the adversary proceeding, the motion is denied. Judge Teel said even if the final judgment were vacated based on the Supreme Court's recent decision in Stern v. Marshall, 2011 WL 2472792 (2011), the Bankruptcy Court in GB Herndon had constitutional authority to address the impact of the counterclaims against Adams National Bank on the propriety of granting Adams National Bank relief from the automatic stay. To the extent the motion asks the court to stay the final judgment in this adversary proceeding awarding the plaintiff the sum $8,532,253.74 plus costs, Judge Teel said the motion is granted. GB Herndon and Associates, Inc., filed for Chapter 11 bankruptcy (Bankr. D. D.C. Case No. 10-00945) on Sept. 24, 2010. GENEVA MULTI-FAMILY: Court to Hear Lender's Dismissal Plea Aug. 17 ------------------------------------------------------------------ The Hon. Dennis D. O'Brien of the U.S. Bankruptcy Court for the District of Minnesota will convene a hearing on Aug. 17, 2011 at 11:30 p.m., to determine whether the Chapter 11 case of Geneva Multi-Family Exchange Xiv, LLC, must be dismissed. Responses to the motion, if any, must be filed by Aug. 12, 2011. Broadstone Towne Crossing Property Owner LLC told Judge O'Brien that case bears all of the hallmarks of a bad faith filing. Among other things, the Debtors: * have only one material asset: a 96% tenant in common interest in the Property; * are highly unlikely to be able to reorganize or effectuate a plan of reorganization; * have no equity in the Property, and have only approximately $70,000 of unsecured debt compared to Lender's claim of approximately $24.3 million; * are engaged in a two-party dispute with Lender, their single secured creditor, which dispute can be resolved through the foreclosure process; * filed these cases hours before a foreclosure sale of the Property was scheduled to occur; and * have few, if any, employees. In short, these cases are essentially a two-party dispute between the Debtors and Lender, and are a transparent and bad faith attempt to use the automatic stay imposed by section 362 of the Bankruptcy Code to frustrate Lender's exercise of its contractual and state law rights. The Debtors also have little, if any, likelihood of proposing a confirmable plan of reorganization or prospect of rehabilitation. Goodwin Procter LLP represents Broadstone Towne. According to the Troubled Company Reporter on July 27, 2011, 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. About The Falls at Towne Crossing and Geneva Multi-Family Exchange XIV 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. The Debtor listed $25,301,700 in total assets, and $24,370,890 in total liabilities. GMX RESOURCES: Incurs $11.8 Million Net Loss in Second Quarter -------------------------------------------------------------- GMX Resources Inc. reported a net loss of $11.80 million on $32.85 million of oil and gas sales for the three months ended June 30, 2011, compared with a net loss of $1.20 million on $23.21 million of oil and gas sales for the same period during the prior year. The Company also reported a net loss of $63.62 million on $62.23 million of oil and gas sales for the six months ended June 30, 2011, compared with net income of $4.08 million on $44.51 million of oil and gas sales for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $634.09 million in total assets, $422.26 million in total liabilities and $211.83 million in total equity. Michael J. Rohleder, president, said, "Our second 2011 production exceeded our guidance and reached a Company record 6.5 BCFE." Rohleder continued, "Our overarching goals in the next two years are to accelerate revenues and EBITDA growth to reach profitability sooner, and to reduce our leverage. " A full-text copy of the press release announcing the financial results is available for free at http://is.gd/LaNq3D About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's strategy is to significantly increase production, revenues and reinvest in increasing production. GMXR's goal is to grow and build shareholder value every day. The Company reported a net loss of $138.29 million on $96.52 million of oil and gas sales for the year ended Dec. 31, 2010, compared with a net loss of $181.08 million on $94.29 million of oil and gas sales during the prior year. The Company's balance sheet at March 31, 2011, showed $606.60 million in total assets, $413.10 million in total liabilities and $193.50 million in total equity. * * * GMX Resources got a first time 'Caa1' Corporate Family Rating and SGL-3 Speculative Grade Liquidity rating from Moody's Investors Service in February 2011. GMX's 'Caa1' CFR reflects its small size, limited diversification, production that is 97% natural gas in a low gas price environment, high leverage on production and reserves, and the risks inherent in developing its newly acquired oil focused Bakken and Niobrara acreage while outspending cash flow," commented Jonathan Kalmanoff, Moody's Analyst. "The rating also considers the potential for improvement in both profitability and diversification if GMX is successful in developing its newly acquired acreage, the pre-funding of the majority of 2011 capital spending through both debt and equity offerings, a lack of required drilling to hold acreage in the company's East Texas properties, and hedges in place which add support to realized prices for gas production through 2012." As reported by the TCR on April 25, 2011, Standard & Poor's Ratings Services said it assigned its 'B-' corporate credit rating to Oklahoma City-based GMX Resources Inc. The outlook is stable. "The ratings on GMX Resources Inc. reflect the company's limited scale of operations, meaningful exposure to weak natural gas prices, a very aggressive near-term spending plan, limited liquidity beyond 2011, and elevated debt leverage," said Standard & Poor's credit analyst Paul B. Harvey. "Near-term credit quality will benefit from the liquidity provided by GMX's $200 million senior unsecured note issuance and concurrent $100 million common equity offering, as well as expectations for growing production from its Haynesville Shale development," S&P related. GREENMAN TECHNOLOGIES: Completes Sale of Unit to Irish Knight ------------------------------------------------------------- GreenMan Technologies, Inc., has completed the sale of substantially all of the assets of Green Tech Products, Inc., its molded recycled rubber products subsidiary located in Carlisle, Iowa, to Irish Knight Holdings, L.L.C. Pursuant to the terms of the agreement, Irish Knight Holdings purchased substantially all assets and assumed substantially all of Green Tech's liabilities (which were approximately $1.6 million at June 30, 2011) and provided additional consideration in the form of a promissory note in the principal amount of $100,000 and $50,000 in inventory credits toward the purchase of products and services. Lyle Jensen, GreenMan's president and chief executive officer stated, "The divestiture of our Green Tech subsidiary simplifies our business structure and allows us to focus our resources solely on the continued growth of our American Power Group subsidiary. Our dual fuel technology has generated significant interest domestically and internationally for use in both stationary and vehicular applications and we believe this divestiture will enable us to align our efforts to capitalize on the growth opportunity that APG represents." Greenman Technologies, Inc., held a Special Meeting of Stockholders, at which the Company's stockholders approved the sale of the Assets, and the increase in the number of authorized shares of the Company's common stock. On Aug. 1, 2011, the Company filed a Certificate of Amendment to its Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the number of authorized shares of its common stock from 60,000,000 to 100,000,000 shares. About Greenman Technologies Lynnfield, Mass.-based GreenMan Technologies, Inc. (OTC QB: GMTI) through its two alternative energy subsidiaries, American Power Group, Inc. ("APG") and APG International, Inc. ("APGI"), provides a cost-effective patented dual fuel conversion technology for diesel engines and diesel generators. The Company's balance sheet at March 31, 2011, showed $5.2 million in total assets, $5.9 million in total liabilities, and a stockholders' deficit of $733,895. Schechter Dokken Kanter Andrews & Selcer, Ltd., in Minneapolis, Minnesota, expressed substantial doubt about GreenMan Technologies' ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has continued to incur substantial losses from operations, has not generated positive cash flows and has insufficient liquidity to fund its ongoing operations. GREENWICH SENTRY: Plan Outline Centers on BLMIS Trustee Deals ------------------------------------------------------------- Greenwich Sentry, L.P. and Greenwich Sentry Partners L.P., submitted to the U.S. Bankruptcy Court of Southern District of New York their disclosure statements explaining their respective plans of reorganizations dated as of July 20, 2011. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statements, the Plans have substantially similar operative terms, with the exception of certain monetary amounts and other numbers involved that are specific to each Debtor. The primary components of both Debtors' plan are: -- the payment in full of allowed administrative expense claims, allowed professional fee claims, allowed priority tax claims, allowed priority claims and allowed general unsecured claims; -- the implementation of a settlement with the BLMIS trustee for the estate of Bernard L. Madoff Investment Securities; and -- the establishment of two trusts to hold the retained assets left in the Debtor's estate after consummation of the BLMIS trustee settlement and payment of allowed claims with priority over the allowed limited partner interests of certificates representing the beneficial ownership of the trusts. The central feature of Greenwich Sentry Partners, L.P.'s Plan is the BLMIS trustee settlement, wherein the Debtor believing, pursuant to its good faith business judgment, that avoidance action claims of the BLMIS trustee would be difficult to defend, has agreed, in sum, to allow the BLMIS trustee a claim and judgment in the amount of $5,985,000 and the BLMIS trustee has agreed to seek recovery of his claim only from certain specified assets of the Debtor, to allow the Debtor's customer claim against BLMIS in the amount of $2,011,304, to share recovery on certain litigation claims with the Debtor, and to provide for the distribution of the retained assets to creditors and limited partners free and clear of the BLMIS trustee claims. The central feature of Greenwich Sentry, L.P.'s Plan is the BLMIS trustee settlement, wherein the Debtor, believing, pursuant to its good faith business judgment, that avoidance action claims of the BLMIS trustee would be difficult to defend, has agreed, in sum, to allow the BLMIS trustee a claim and judgment in the amount of $206 million, and the BLMIS trustee has agreed to seek recovery of his claim only from certain specified assets of the Debtor, to allow the Debtor's customer claim against BLMIS in the amount of $35 million, to share recovery on certain litigation claims with the Debtor, and to provide for the distribution of the retained assets to creditors and limited partners free and cler of the BLMIS' trustee's claims. The BLMIS trustee agreed to support the Plans and Disclosure Statement and to vote his claim in favor of the Plans pursuant to the settlement agreements. BLMIS is a broker-dealer registered with the Securities and Exchange Commission, though customer accounts maintained by the Debtors at BLMIS. The Debtors have been informed that holder of not less than $60 million in limited partner interests in GS also favor the Court's approval of the Disclosure Statements and confirmation of the Plans. The Plans provide the Debtors' creditors with substantial recoveries and allows for recovery of equity. The Debtors propose a Sept. 1 hearing on the approval of their Disclosure Statements. Objections, if any, are due Aug. 25. Full-text copies of the Disclosure Statements are available for free at: http://bankrupt.com/misc/GREENWICHSENTRY_DS.pdf http://bankrupt.com/misc/GREENWICHSENTRYPartners_DS.pdf About Greenwich Sentry Liquidators of Fairfield Sentry Limited, filed a Chapter 15 petition for Fairfield in June 2010 (Bankr. S.D.N.Y. Case No. 10-13164). In July 2010, Kenneth Krys and Christopher Stride of Krys & Associates (BVI) Limited, the liquidators of Fairfield Sentry Limited, Fairfield Sigma Limited and Fairfield Lambda Limited obtained cross-border recognition as foreign main proceedings by the U.S. Bankruptcy Court of the funds' insolvency proceedings, pending in the British Virgin Islands. The liquidators are represented in the U.S. by Brown Rudnick LLP. Fairfield Sentry Limited was the largest "feeder fund" to Bernard L. Madoff Investment Securities LLC, and invested approximately 95% of its assets with BLMIS. BLMIS was placed into liquidation proceedings in the United States in December 2008, after it was revealed that Bernard Madoff operated BLMIS as a Ponzi scheme for many years. Fairfield Sigma Limited and Fairfield Lambda Limited were both feeder funds of Fairfield Sentry Limited, and invested all of their assets with Fairfield Sentry Limited. Greenwich Sentry, L.P., and an affiliate filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-16229) on Nov. 19, 2010, hoping to settle lawsuits filed against it in connection with its investments with Bernard L. Madoff. Paul R. DeFilippo, Esq., at Wollmuth Maher & Deutsch LLP, in New York, represents the Debtors in the Chapter 11 cases. Bernard L. Madoff was charged by the Securities and Exchange Commission in December 2008 of orchestrating the largest Ponzi scheme in history, with losses topping US$50 billion. In March 2009, Mr. Madoff pleaded guilty to 11 federal crimes and admitted to turning his wealth management business into a Ponzi scheme. A trustee was appointed to liquidate and has been filing clawback suits against investors who withdrew phony profits from Mr. Madoff. On May 18, 2009, Irving H. Picard, the trustee liquidating the estate of Mr. Madoff and his firm, Bernard L. Madoff Investment Securities, LLC, filed a lawsuit against Fairfield Sentry and Greenwich, seeking the return of $3.55 billion that Fairfield withdrew from Madoff during the period from 2002 to Madoff's arrest in December 2008. Since 1995, the Fairfield funds invested about $4.5 billion with BLMIS. Mr. Picard claims that Fairfield knew or should have known about the fraud give that it received from BLMIS unrealistically high and consistent annual returns of between 10% and 21% in contrast to the vastly larger fluctuations in the S&P 100 Index. In schedules filed with the Court, Greenwich Sentry disclosed $317,073,770 in total assets and $206,337,244 in total liabilities. H&S JOURNAL: Has Deal With CA on Use of Cash Collateral ------------------------------------------------------- CA 912-921 Bergen Avenue, LLC, successor to the position of Oritani Bank through its acquisition of Oritani's interest in the loan and loan documents of H&S Journal Square Associates LLC, asks the U.S. Bankruptcy Court for the Southern District of New York to enter an order approving the stipulation between the H&S and CA concerning the use of CA's cash collateral generated from the Debtor's property located at 912-921 Bergen Avenue, Jersey City, N.J. and Journal Square, Jersey City, N.J. The hearing on the motion is scheduled for Aug. 16, 2011, at 10:00 a.m. CA asserts and possesses a validly perfected first lien on the Debtor's Journal Square Property, and, inter alia, the rents generated from the Property, securing the Debtor's obligation in the original amount of $14,250,000 to Oritani, which CA acquired from Oritani on March 10, 2011. H&S and CA have agreed to maintain the pre-petition status quo with regard to the payment an collection of rents whereby the payments will be made directly to Oritani, now as servicer for CA, which funds, when collected, will be disbursed or applied by CA on account of the sums due under the Loan Documents including non-default interest, taxes, and other charges and expenses that may be budgeted as agreed by the parties. The parties have agreed that this understanding has been in effect since the inception of the bankruptcy case and the Debtor acknowledges that it has previously reaffirmed its consent to CA's collection of the Rents in the post-petition period, without waiver of either parties' rights or remedies. Pursuant to the stipulation, CA will generate a report reflecting rents collected and received and how these were applied on a monthly basis beginning with rents collected for the month of April 2011. Other than the taxes, insurance and budgeted carrying costs that it will be paying out of collected rents, CA will not be required to incur or fund any other expense on behalf of the Debtor. As partial adequate protection to CA for the Debtor's use of CA's cash collateral, CA may apply the rents collected to interest on its claim at the non-default rate. Additionally, CA is granted first and senior replacement liens in all post-petition leases, rents, issues, profits and proceeds, arising from the CA Collateral and in all the cash collateral from the CA Collateral on and after the Petition Date. Counsel for CA 912-921 may be reached at: David S. Catuogno, Esq. FORMAN HOLT ELIADES & RAVIN LLC 80 Route 4 East, Suite 290 Paramus, NJ 07652 Tel: (201) 845-1000 Based in Jersey City, New Jersey, H&S Journal Square Associates LLC filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 11-11623) on April 6, 2011. Kevin J. Nash, Esq., and J. Ted Donovan, Esq., at Goldberg Weprin Finkel Goldstein LLP, in New York, represents the Debtor. The Debtor disclosed $20,799,032 in assets, and $18,944,510 in debts. HARRY & DAVID: Wins Court OK to Terminate 2,700 Pensions -------------------------------------------------------- Harry & David Holdings Inc. received permission to terminate the pensions of more than 2,700 workers. Under a ruling issued by U.S. Bankruptcy Court Judge Mary Walrath, the Oregon-based gift basket maker can terminate its plan when it emerges from bankruptcy. The decision comes in spite of the efforts of the Pension Benefit Guaranty Corporation, which opposes Harry & David's move to end its pension plan and transfer it to PBGC. "PBGC's mission is to protect pensions, and we've fought hard to get Harry & David to keep their pensions going," said PBGC Director Josh Gotbaum. "Unfortunately, they decided not to, and the judge supported them." Harry & David claimed it needed to terminate its pension plan because its investors, the private equity firm Wasserstein Partners LP, are unwilling to finance the pensions. PBGC told the court that the company could afford to keep the plan, and that the termination was being undertaken largely to increase investor returns, not out of necessity to emerge from bankruptcy. If Harry & David's pension plan ends, PBGC will assume responsibility and pay benefits up to the legal limits set by Congress. PBGC said it would review the judge's decision and decide whether or not to appeal. 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. On April 7, 2011, the U.S. Trustee appointed an official committee of unsecured creditors in the Debtors' cases. and never has. Its operations are financed by insurance premiums and with assets and recoveries from failed plans. HAWAIIAN TELCOM: S&P Withdraws 'B-' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services withdrew its preliminary ratings on Hawaiian Telcom Holdco Inc. including the preliminary 'B-' corporate credit rating, at the company's request. "We also withdrew preliminary ratings on the company's aggregate $330 million of secured credit facilities," S&P said. HILTON NGUYEN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Hilton Nguyen, LLC 5190 Motel Court Mobile, AL 36619 Bankruptcy Case No.: 11-03134 Chapter 11 Petition Date: August 5, 2011 Court: United States Bankruptcy Court Southern District of Alabama (Mobile) Debtor's Counsel: Barry A. Friedman, Esq. BARRY A. FRIEDMAN AND ASSOCIATES P.C. P.O. Box 2394 Mobile, AL 36652-2394 Tel: (251) 439-7400 E-mail: bky@bafmobile.com Scheduled Assets: $7,998,751 Scheduled Debts: $8,192,569 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/alsb11-03134.pdf The petition was signed by Hong V. Nguyen, owner. HOMELAND SECURITY: Inks Forbearance Pact with YA Global ------------------------------------------------------- Homeland Security Capital Corporation entered into a Forbearance Agreement by and among YA Global Investments, L.P., as lender, Homeland Security Advisory Services, Inc., Celerity Systems, Inc. and Nexus Technology Group, Inc., pursuant to which the Lender agreed to forbear from exercising its rights and remedies under the Financing Documents and applicable law with respect to one or more Events of Default that have occurred and are continuing as a consequence of the Company having failed to pay, when due at maturity, all outstanding principal and accrued and unpaid interest under the Company's outstanding debt with the Lender. The forbearance period ends on the earlier of (i) Aug. 31, 2011, and (ii) the occurrence of a "Termination Event," defined in the Agreement as (a) the failure of the Company or any Guarantor to perform or comply with any term or condition of the Agreement; (b) the determination by the Lender that any warranty or representation made by the Company or any Guarantor in connection with the Agreement was false or misleading; (c) the occurrence of a materially adverse change in or to the collateral granted to the Lender under the Financing Documents or pursuant to the Agreement, as determined by the Lender in its sole and exclusive discretion; and (d) the occurrence of any default or Event of Default under the Financing Documents. As a condition to the entry to the Agreement, the Company has undertaken to grant to the Lender a security interest in its Class A membership interests in its subsidiary, Fiducia Holdings LLC, and to cause Fiducia Holdings to guarantee the Company's obligations to the Lender and grant a security interest in the capital stock it owns in its subsidiary, Fiducia Real Estate Holdings, Inc. A full-text copy of the Forbearance Agreement is available for free at http://is.gd/wOCcsP About Homeland Security Homeland Security Capital Corporation is an international provider of specialized technology-based radiological, nuclear, environmental disaster relief and electronic security solutions to government and commercial customers. At December 31, 2009, the Company had total assets of $35,815,519 against total liabilities of $38,018,448 and Warrants Payable -- Series H Preferred Stock of $169,768. Stockholders' deficit was $2,372,697 at December 31, 2009. In March 2008, the Company entered into a stock purchase agreement with YA Global Investments, L.P. pursuant to which the Company sold to YA 10,000 shares of its Series H Convertible Preferred Stock. The Series H Stock is convertible into shares of Common Stock at an initial ratio of 33,333 shares of Common Stock for each share of Series H Stock, subject to adjustments -- including the Company's wholly owned subsidiary, Safety & Ecology Holdings Corporation, achieving certain earnings milestones, as defined, for the calendar years ending December 31, 2009 and 2008. Safety operates its business on a fiscal year ending June 30. Safety achieved the first milestone for the calendar year ending December 31, 2008. However, the second financial milestone for the calendar year ended December 31, 2009, has not been satisfied, resulting in a potential adjustment to the conversion ratio yielding approximately 56,300 shares of Common Stock for each share of Series H Stock, or approximately a potential additional 230,000,000 shares of the Company's Common Stock in the aggregate. Management is discussing with YA the possibility of a waiver or amendment of any adjustment to the Series H Stock conversion ratio, however there can be no assurances YA will waive or amend the adjustment, if any, to the Series H Stock conversion ratio. YA has not exercised its conversion rights as of February 22, 2010. In June 2009 the Company entered into an agreement YA extending the due date on its senior notes payable, and accrued interest, to YA from March 14, 2010, until October 1, 2010, for $2,500,000 and April 1, 2011, for $10,560,000. In exchange, the Company agreed to an increase in the interest rate, from 13% to 15%, on the senior notes payable and certain other debt due to YA, effective January 1, 2010, if the Company failed to secure a certain contract by March 2010. In December 2009, the Company was informed that it had been eliminated from the award process for this contract. Accordingly, the Company will begin recording interest expense at the increased rate effective Jan. 1, 2010. HUDSON HEALTHCARE: To Get $11-Mil. from State to Pay Creditors -------------------------------------------------------------- Kristen MacBeth at BankruptcyHome.com reports that the Hoboken Municipal Hospital Authority in New Jersey will receive $11 million from the state to help pay off the hospital's creditors. Mayor Dawn Zimmer, who also serves on the HMHA board, said the completion of Hoboken's bankruptcy will allow the hospital's new owners to start fresh without any debts carrying over from the previous ownership About Hudson Healthcare Hudson Healthcare Inc. is the nonprofit operator of Hoboken University Medical Center in Hoboken, New Jersey. Hudson Healthcare filed for Chapter 11 protection (Bankr. D. N.J. Case No. 11-33014) in Newark on Aug. 1, 2011, estimating assets and debt of less than $50 million. Attorneys at Trenk, Dipasquale, Webster, et al., serve as counsel to the Debtor. Affiliate Hoboken Municipal Hospital Authority also sought Chapter 11 protection. INDYMAC BANCORP: Criminal Probes Said to Have Stalled ----------------------------------------------------- Jean Eaglesham, writing for The Wall Street Journal, reports that people familiar with the situation said federal criminal investigations of IndyMac Bancorp and New Century Financial Corp. have stalled and could result in no charges being filed. The U.S. Attorney's Office for the Western District of Washington in Seattle on Friday also closed the investigation stemming from the September 2008 failure of Washington Mutual Bank. The U.S. Department of Justice has concluded that the evidence does not meet the exacting standards for criminal charges in connection with the bank's failure. According to the WSJ report, all three separate investigations hit major stumbling blocks. People familiar with the matter told the Journal the WaMu probe had been inactive for more than a year. Sources also said the IndyMac and New Century investigations are essentially dormant at the moment. The Journal says a spokesman for the U.S. Attorney's office in Los Angeles, which initiated the IndyMac and New Century investigations, declined to comment. The Journal notes, however, that the investigations haven't been closed, meaning they could gain new momentum if fresh evidence surfaces. A source told the Journal the U.S. Attorney's Office in Brooklyn, N.Y., recently opened its own criminal investigation into IndyMac. The source said in the Brooklyn probe, which is still at an early stage, prosecutors are looking at the information IndyMac disclosed about the quality of home loans that backed bonds it sold to investors. It isn't clear if the scope of the Brooklyn-based investigation is significantly different than the Los Angeles one, but U.S attorneys have broad discretion to determine which avenues to pursue. The Journal says a spokesman for the U.S. Attorney's office in Brooklyn declined to comment. About Indymac Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- was the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that originated mortgages in all 50 states of the United States. On July 11, 2008, the Office of Thrift Supervision closed IndyMac Bank and appointed FDIC as the bank's receiver. Thacher Proffitt & Wood LLP was engaged as counsel to the FDIC. All non-brokered insured deposit accounts and substantially all of the assets of the bank were transferred to IndyMac Federal Bank, F.S.B., Pasadena, CA, a newly chartered full-service FDIC-insured institution. On March 19, IndyMac Federal Bank was sold to OneWest Bank, F.S.B., Pasadena, California. OneWest Bank, FSB is a newly formed federal savings bank organized by IMB HoldCo LLC. Indymac Bancorp filed for Chapter 7 bankruptcy protection on July 31, 2008 (Bankr. C.D.Calif., Case No. 08-21752). Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C. Weitnauer, Esq. Indymac had about $32.01 billion in assets as of July 11, 2008. In court documents, IndyMac disclosed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. About New Century Financial Corp. Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real state investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The Company offers a broad range of mortgage products designed to meet the needs of all borrowers. New Century Financial and its affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., were tapped as bankruptcy counsel. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Court confirmed the Debtors' second amended joint Chapter 11 plan of liquidation on July 15, 2008. 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. INDUSTRIAL SUPPLIES: Files for Chapter 7 Bankruptcy --------------------------------------------------- Philly.com reports that Industrial Supplies Inc., 412 S. Wade Blvd., Millville, filed for Chapter 7 in the U.S. Bankruptcy Court for the District of New Jersey. There is no schedules available. JACKSON HEWITT: Court Confirms Plan Reorganization -------------------------------------------------- Jackson Hewitt Tax Service Inc. has received confirmation of its "pre-packaged" Plan of Reorganization (the "Plan") from the U.S. Bankruptcy Court in Delaware, which has been overseeing the Company's Chapter 11 proceedings following its voluntary filing on May 24, 2011. This action clears the way for Jackson Hewitt's Plan to become effective in the very near future, enabling it to emerge from its court-supervised financial restructuring, a process which has been completed in 75 days. Under its Court confirmed Plan of Reorganization, Jackson Hewitt will emerge as a private company. The majority owner of Jackson Hewitt's new equity will be Bayside Capital, an affiliate of Miami, FL-based H.I.G. Capital, and the largest holder of Jackson Hewitt's secured debt prior to its restructuring. A new five- member Board of Directors will be named and become effective on emergence. Under the Plan, approximately two-thirds of Jackson Hewitt's term debt was forgiven in exchange for newly issued common equity on emergence. Jackson Hewitt's pre-emergence common stock will be extinguished on emergence in accordance with the Plan. "[This] marks the exciting beginning of the new Jackson Hewitt," stated Philip H. Sanford, president and chief executive officer of Jackson Hewitt. "With the strong support of our lenders, we have moved through this process with speed and efficiency, and are poised to emerge highly-energized and financially healthy. "We are well positioned to succeed and grow our business going forward," continued Sanford. "We are coming off of a 2011 tax season in which we achieved 3% growth in tax returns prepared - our first growth in tax returns prepared in five years. We also grew our top line, while achieving 4% growth in adjusted EBITDA. The results we achieved in our Walmart U.S. stores distribution channel were excellent, and we look forward to further expansion of this important relationship. We will build on this positive momentum as we progress with our preparations for a successful 2012 tax season and beyond. "[This] is also a great day for all of our key constituents. Our clients, franchisees, employees and business partners can be confident in our future. We move forward with a strong balance sheet, a fully funded business plan, a seasoned and stable management team, and the ability to make investments that will better position us to compete and win in the market place. As always, we remain committed to providing quality, accurate tax preparation services that meet the needs, and exceed the expectations, of our valued clients," concluded Sanford. 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. Settlement With Committee Paved Way for Plan OK Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Jackson Hewitt Tax Service Inc. had been facing a confirmation hearing Aug. 8 where the official unsecured creditors' committee would oppose approval of the Chapter 11 plan. The committee was in opposition because their constituency was to receive nothing. Mr. Rochelle relates that opposition turned into support when the secured lenders, who are to end up owning Jackson Hewitt, agreed to create a $1.1 million cash fund for distribution to unsecured creditors. There are other objections still to be resolved or tossed out by the bankruptcy judge at the Aug. 8 hearing. The confirmation hearing originally had been scheduled for July 8. It was pushed back one month due to the creditors' opposition. To confirm the plan, the judge will nonetheless be obliged to use the cramdown procedure because the classes of unsecured and subordinated creditors voted against the plan. The plan, negotiated before Jackson Hewitt's Chapter 11 filing in late May, gives all the new stock along with a new $100 million term loan to secured lenders owed $357 million. The lenders unanimously voted in favor of the plan. First Amended Prepack Plan BankruptcyData.com reports that Jackson-Hewitt Tax Service filed with the U.S. Bankruptcy Court an Amended Joint Prepackaged Chapter 11 Plan of Reorganization. According to the Disclosure Statement, "In accordance with Bankruptcy Rule 9019, the Plan constitutes a good faith compromise and settlement among the Debtors, the Lenders, the Administrative Agent and the Creditors' Committee, regarding the treatment of the General Unsecured Claims under the Plan, and reflects and implements such compromise and settlement, including by establishment of the Post Effective Date Trust and transfer of the Post Effective Date Initial Funding and the Transferred Avoidance Actions into the Post Effective Date Trust. Such compromise and settlement is made in exchange for consideration and is in the best interests of the Debtors, the Estates, the Lenders, the Administrative Agent and the Holders of General Unsecured Claims; is within the reasonable range of possible litigation outcomes, is fair, equitable and reasonable and is an essential element of the resolution of these Chapter 11 Cases. The compromise and settlement embodied in this Plan: (i) falls within the jurisdiction of the Court under 28 U.S.C. 1334(a), (b) and (d); (ii) is an essential means of implementing the Plan pursuant to section 1123(a)(5) of the Bankruptcy Code; (iii) is an integral element of the transactions incorporated in the Plan; (iv) confers a material benefit on, and is in the best interests of, the Debtors, the Estates and holders of General Unsecured Claims; (v) is vital to the overall objectives of the Plan to finally resolve all Claims; and (vi) is consistent with sections 105, 1123 and 1129 of the Bankruptcy Code and other applicable provisions of the Bankruptcy Code." The Company also filed Plan Supplements for its Chapter 11 Plan of Reorganization. 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. JEFFERSON, AL: Submits Counteroffer to Bondholders -------------------------------------------------- Samuel Howard at Bankruptcy Law360 reports that commissioners for Jefferson County, Ala., reportedly submitted a counteroffer to bondholders on Friday to refinance roughly $3.2 billion debt and stave off what could be the largest municipal bankruptcy on record. According to Law360, the county commission has postponed voting on a chapter 9 filing until the week's end as its feels out a truce with Wall Street banks and other bondholders that financed an overhaul of the county's crumbling sewer system a decade ago, a project ultimately mired in corruption and failed derivatives transactions. 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 has retained Kenneth Klee, Esq., at Klee Tuchin Bogdanoff & Stern LLP to represent the county in the event of bankruptcy. Mr. Klee is considered to be a municipal-bankruptcy expert, having handled Orange County, Calif.'s bankruptcy case in 1994. JIN SUK KIM TRUST: Court Rejects Bid to Dismiss Case ---------------------------------------------------- La Union Center LLC seeks dismissal of the Chapter 11 case of Jin Suk Kim Trust d/b/a La Union Mall, claiming that the Debtor is not eligible to file a bankruptcy petition because it is not a "business trust." The Debtor opposes the dismissal motion. The Court concludes that the Debtor is a "business trust" as that term is used in 11 U.S.C. Sec. 101(9)(A)(v) and denied the motion to dismiss. A copy of Bankruptcy Judge Thomas J. Catliota's Aug. 8, 2011 Memorandum of Decision is available at http://is.gd/0RkJA2 from Leagle.com. Jin Suk Kim Trust, dba La Union Mall, filed for Chapter 11 (Bankr. D. Md. Case No. 11-14033) on March 1, 2011, listing under $50,000 in both assets and debts. A copy of the petition is available at no charge at http://bankrupt.com/misc/mdb11-14033.pdf The Trust is represented by: Janet M. Nesse, Esq. STINSON MORRISON HECKER LLP 1150 18th Street, N.W., Suite 800 Washington, DC 20036-3816 Tel: 202-785-9100 Fax: 202-785-9163 E-mail: jnesse@stinson.com Affiliate Jin Suk Kim filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 10-18008) on April 12, 2010. LAFARGE NORTH AMERICA: Demoted to Top Junk by Moody's ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Lafarge North America Inc., a producer of cement and cement-related products, lost investment-grade status on Aug. 5 from Moody's Investors Service when the senior unsecured rating was lowered one peg to Ba1, the highest junk grade. Standard & Poor's made a similar move to junk in March. Lafarge's French parent, Lafarge SA, received an identical downgrade to top junk. Moody's noted that most of the funded debt is at the parent level and thus structurally subordinated to trade debt. Lafarge North America, based in Herndon, Virginia, was acquired in 2006 in a $2.95 billion transaction. The parent's $600 million in 7.125% senior unsecured notes due 2036 traded on Aug. 5 at 93.8 cents on the dollar, to yield 7.69%, according to Trace, the bond- price reporting system of the Financial Industry Regulatory Authority. LAX ROYAL: MSCI Granted Relief From Stay as to L.A. Property ------------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California has granted MSCI 2006-IQ11 West Century Limited Partnership to lift the automatic stay with respect to the real property owned by Lax Royal Airport Center, LP, at 5933 West Century Boulevard, in Los Angeles, California. The Lender will be granted relief from stay on September 16, 2011, unless the Debtor will complete one of the following no later than September 16, 2011: a) The Debtor will pay all past due contract interest and late charges, plus all undisputed out of pocket costs, to the Lender. To the extent there is any dispute concerning the amount of out of pocket expenses or the payment of default interest, all sums in dispute will be escrowed in a segregated account. b) The Debtor will file and set for hearing on October 19, 2011, at 2:00 p.m., a motion for approval of the sale of the Debtors' interest in the subject real property, pursuant to which sale the indebtedness owed to the Lender will be paid in full. c) The Debtor will file a new Disclosure Statement and Plan which consists of a transaction(s) which will generate within a reasonable time enough new money to cure the defaults under the Lender's secured loan in full and which plan is otherwise confirmable within a reasonable time. If a new disclosure statement and plan are filed by September 16, 2011, the hearing on approval of the disclosure statement will be set for October 19, 2011, at 2:00 p.m. MSCI is represented by: H. Mark Mersel, Esq. Sheri Kanesaka, Esq. Bryan Cave LLP Irvine, CA 92612 Tel: (949)223-7000 Fax: (949)223-7100 E-mail: mark.mersel@bryancave.com About LAX Royal Airport Center, LP Los Angeles, California-based LAX Royal Airport Center, LP, filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-12333) on Jan. 19, 2011. The Debtor estimated assets at $10 million to $50 million and debts at $1 million to $10 million. Michael N. Sofris, Esq., represent the Debtor as counsel. No request for the appointment of a trustee or examiner was made. LESLIE CONTROLS: Dismissal of 2 Asbestos Cases Reversed ------------------------------------------------------- The Court of Appeals of Washington, Division One, reversed the trial court's dismissal of two personal injury lawsuits against manufacturers and suppliers of asbestos-containing products or equipment used on United States Navy vessels at the Puget Sound Naval Shipyard: (1) Abbay v. Aurora Pump Company George Abbay and his spouse Lynne Abbay appeal summary judgment dismissal of the personal injury lawsuit. In an effort to prevent the respondents from seeking removal to federal court, Abbay disclaimed "any cause of action or recovery for any injuries caused by any exposure to asbestos dust that occurred in a federal enclave, which expressly excludes U.S. Navy vessels." In the briefs submitted in opposition to summary judgment, Abbay clarified that the disclaimer excludes his causes of action under state law for exposure to asbestos while working on U.S. Navy vessels at PSNS. On reconsideration, the trial court applied the rules of grammar in ruling that Abbay disclaimed all state law causes of action that occurred at PSNS, including causes of action from exposure to asbestos on Navy ships. The Court of Appeals concluded that grammatical rules do not require interpreting the relative clause, "which expressly excludes U.S. Navy vessels," as only applying to the antecedent noun, "federal enclave," and the meaning of the disclaimer is ambiguous. As clarified in the briefs, the disclaimer does not exclude Abbay's state law causes of action from exposure to asbestos while working on U.S. Navy vessels. Accordingly, the Court of Appeals said it need not address whether the trial court erred in ruling that as a matter of law, PSNS in its entirety, is a federal enclave. The Court of Appeals reversed dismissal of Abbay's lawsuit and remanded the matter. George Abbay worked for about 26 years as a ship rigger on United States Navy vessels that were in dry dock or moored to piers at PSNS. In August 2007, he was diagnosed with malignant pleural mesothelioma, a form of cancer caused by exposure to asbestos. Leslie Controls is a respondent in the appeal. All proceedings in this matter against Leslie are stayed as a result of its bankruptcy filing. Garlock Sealing Technologies is an original defendant in the matter but not a respondent on appeal. Garlock has obtained a preliminary injunction staying all proceedings against it. A copy of the Court's Aug. 8 decision is available at http://is.gd/NIMHeYfrom Leagle.com. (2) Farrow v. Alfa Laval, Inc. Michael Farrow and his spouse Lidia Farrow filed a personal injury lawsuit against a number of manufacturers and suppliers of asbestos-containing products used on United States Navy vessels at the Puget Sound Naval Shipyard. In an attempt to avoid removal to federal court, the complaint disclaims "any cause of action or recovery for any injuries caused by exposure to asbestos dust that occurred in a federal enclave, which expressly excludes U.S. Navy vessels." The trial court ruled on summary judgment that the language of the disclaimer was unambiguous and meant that Farrow waived all claims from asbestos exposure that occurred at PSNS. In the linked case, Abbay v. Aurora Pump Co., No. 62399-1-I, the Court of Appeals held that because the exact same disclaimer language is ambiguous and susceptible to two reasonable interpretations, the plaintiff was entitled to clarify the meaning of the disclaimer in the written response filed in opposition to summary judgment. The Court of Appeals reversed the dismissal of Farrow's lawsuit, and remanded the matter. A copy of the Court's Aug. 8 decision is available at http://is.gd/ugC9lpfrom Leagle.com. Farrow died in May 2008. Garlock Sealing Technologies and Leslie Controls are respondents in the appeal. About Leslie Controls Based in Tampa, Florida, Leslie Controls manufacturers process control valves, severe service control valves, on-off valves, regulators, steam water heaters, actuators and controls. Leslie is a unit of CIRCOR International, Inc. Leslie Controls sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-12199) on July 12, 2010. Marion M. Quirk, Esq., and Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, assist the Company in its restructuring effort. Natalie Ramsey, Esq., at Montgomery, McCracken, Walker & Rhodes, LLP, represents the Asbestos Claimants Committee, and Edwin J. Heron, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represents the Future Claimants' Representative. William R. Hanlon, Esq., at Goodwin Procter LLP advises CIRCOR International, Inc. The Company estimated its assets at $10 million to $50 million and its debts at $50 million to $100 million at that the time of the filing. As reported by the Troubled Company Reporter, the Bankruptcy Court entered an order on October 28, 2010, confirming the amended prenegotiated Chapter 11 reorganization plan filed by Leslie Controls, Inc., on July 12, 2010. The reorganization plan is intended to permanently resolve Leslie's asbestos liability through the creation of a trust pursuant to Section 524(g) of the U.S. Bankruptcy Code. All current and future asbestos claims against Leslie would be channeled to the trust for review and payment, thus providing both Leslie and CIRCOR with permanent court protection from such claims. In February 2011, the U.S. District Court for the District of Delaware affirmed the U.S. Bankruptcy Court's confirmation of the amended pre-negotiated Chapter 11 reorganization plan filed by Leslie Controls. Leslie Controls emerged from Chapter 11 in April 2011. About Garlock Sealing Headquartered in Palmyra, New York, Garlock Sealing Technologies LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, 2010, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D. N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for asbestos matters. The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases is represented by Travis W. Moon, Esq., at Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC, Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and Jeanna Rickards Koski, Esq., in Washington, D.C. 20005. Joseph W. Grier, III, the Court-appointed legal representative for future asbestos claimants, has retained A. Cotten Wright, Esq., at Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co- counsel. About 124,000 asbestos claims are pending against Garlock in state and federal courts across the country. The Company says majority of pending asbestos actions against it is stale and dormant -- almost 110,000 or 88% were filed more than four years ago and more than 44,000 or 35% were filed more than 10 years ago. LENNY DYKSTRA: September Hearing On Grand Theft Auto Charges ------------------------------------------------------------ Dan Whitcomb, writing for Reuters, reports that a Los Angeles judge on Monday set a September pretrial hearing for former New York Mets star Lenny Dykstra on grand theft auto charges. The report says Mr. Dykstra, 48, entered a second not guilty plea in the case, which stems from what prosecutors say was a scheme to lease cars using phony business and credit information. Reuters recounts Mr. Dykstra was charged in June 2011 with 25 counts of grand theft auto, attempted grand theft auto, filing false financial statements and possessing a controlled substance. He faces 12 years in prison if he is convicted. In July 2011, following a preliminary hearing, a Los Angeles Superior Court judge ordered Mr. Dykstra to stand trial, along with his accountant, Robert Hymers and friend Christopher Gavanais. Prosecutors said Messrs. Dykstra, Hymers and Gavanais ran a scheme to lease high-end automobiles from dealerships using fraudulent information and claiming credit through a phony business, Home Free Systems. An unrelated indictment handed down by a federal grand jury in May 2011 accuses Mr. Dykstra of stealing or destroying some $400,000 in property that was part of his bankruptcy case. Mr. Dykstra faces up to 80 years in federal prison if convicted in that case, according to federal prosecutors. About Lenny Dykstra Lenny Dykstra is a former Major League Baseball all-star player. He was center fielder for the New York Mets and Philadelphia Phillies. He filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 09-18409) on July 7, 2009, in Woodland Hills, California. The Law Office of M. Jonathan Hayes, in Northridge, California, represents the Debtor. The Debtor estimated up to $50,000 in assets and $10 million to $50 million in debts in his Chapter 11 petition. A Chapter 11 trustee was appointed in September 2009, and the case was converted to a liquidation in Chapter 7 on November 20, 2009. The trustee -- Arturo M. Cisneros -- was investigating the disposition of personal property both before and after the Chapter 11 filing. In August 2010, Mr. Cisneros stepped down as Chapter 7 trustee following issues with his failing to disclose the extent of his business with J.P. Morgan Chase & Co., which happens to be largest creditor in Mr. Dykstra's case. LEVEL 3: To Hold Advisory Vote on Exec. Compensation Every Year --------------------------------------------------------------- Level 3 Communications, Inc., held its 2011 annual meeting of stockholders on May 20, 2010. At the Annual Meeting, the stockholders, among other things, approved a proposal to conduct an advisory vote on the executive compensation program for the Company's named executive officers every year. About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. The Company's balance sheet at June 30, 2011, showed $8.86 billion in total assets, $9.29 billion in total liabilities, and a $432 million total stockholders' deficit. Level 3 Communications carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. LITTLETON APARTMENTS: Taps Neligan Foley as Bankruptcy Counsel ------------------------------------------------------------- Littleton Apartments LLC and MS 128 Littleton Limited Partnership, ask the U.S. Bankruptcy Court for the Northern District of Texas for permission to employ Neligan Foley LLP as their counsel to perform the legal services that will be necessary during the Chapter 11 cases. Nicholas A. Foley, a partner in Neligan Foley tells the Court that prior to the Petition Date, Neligan Foley received a deposit of $150,000 from the Debtors. Neligan Foley applied $30,361 of the funds to prepetition fees and expenses. Thus, Neligan Foley is now holding $119,638 in trust for the Debtors. To the best of the Debtors' knowledge, Neligan Foley is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtors set an Aug. 24, at 9:30 a.m., hearing on the requested employment of Neligan Foley. About Littleton Apartments Based in Dallas, Texas, Littleton Apartments LLC, owns a newly constructed 350-unit luxury apartment property in downtown Littleton, Colorado, known as the "Alexan Downtown Littleton". MS 128 Littleton Limited Partnership owns 100% of the membership interests in Littleton and has no other assets. Neither Littleton nor MS 128 have any employees. The Property is managed by GREP Southwest, LLC d/b/a Greystar, pursuant to a Management Agreement. Littleton and MS 128 filed separate Chapter 11 petitions (Bankr. N.D. Tex. Case Nos. 11-34564 and 11-34563) on July 14, 2011. The cases are jointly administered. Judge Stacey G. Jernigan presides over the cases. Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, serves as counsel. In its petition, Littleton Apartments estimated assets and debts of $50 million to $100 million. The petitions were signed by Timothy J. Hogan, vice president. LOS ANGELES DODGERS: Judge OKs $150 Million DIP Loan from MLB ------------------------------------------------------------- Pete Brush at Bankruptcy Law360 reports that a Delaware bankruptcy judge on Monday gave the green light for the Los Angeles Dodgers to borrow $150 million from Major League Baseball after the once- proud franchise, bleeding cash, struck out on a bid to borrow from a hedge fund. The organization, which filed an operating report Friday saying its affiliates lost more than $4.2 million from June 1 through June 30, will borrow the debtor-in-possession financing from the league's Baseball Finance LLC, according to Law360. 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. Attorneys at Morrison & Foerster LLP and Pinckney, Harris & Weidinger, LLC, serve as counsel to the Official Committee of Unsecured Creditors. The LA Dodgers is the 12th professional sports team in North America to have sought bankruptcy protection, and the fifth baseball club to have done so, after the Texas Rangers in 2010; the Chicago Cubs in 2009; the Baltimore Orioles in 1993; and the Seattle Pilots in 1970. The other seven teams were from the National Hockey League, including the Phoenix Coyotes in 2009. LOS ANGELES DODGERS: Can Pay Up to $1.1-Mil Critical Vendor Claims ------------------------------------------------------------------ Judge Kevin Gross has authorized Los Angeles Dodgers LLC to pay prepetition claims owed to critical vendors in an aggregate amount not to exceed $1.1 million, provided that the payments may only be made in accordance with any postpetition financing order. The Court also direct the Debtor's banks to continue to honor and pay checks issued prepetition on account of critical vendor claims that have yet to be cashed to ensure that these essential goods and services will continue to be available to the Debtors without interruption. 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. Attorneys at Morrison & Foerster LLP and Pinckney, Harris & Weidinger, LLC, serve as counsel to the Official Committee of Unsecured Creditors. The LA Dodgers is the 12th professional sports team in North America to have sought bankruptcy protection, and the fifth baseball club to have done so, after the Texas Rangers in 2010; the Chicago Cubs in 2009; the Baltimore Orioles in 1993; and the Seattle Pilots in 1970. The other seven teams were from the National Hockey League, including the Phoenix Coyotes in 2009. MACCO PROPERTIES: Trustee Wants Redmond & Nazar for Parkwood Suit ----------------------------------------------------------------- Michael E. Deeba, as Chapter 11 trustee in the case of Macco Properties Inc., asks the U.S. Bankruptcy Court for the Western District of Oklahoma for permission to retain W. Thomas Gilman of the firm of Redmond & Nazar, LLPC as special counsel. Macco is the 100% owner and the controlling member of LP Parkwood Village Apartments, L.L.C., an Oklahoma limited liability company, which owns and operates an apartment complex located in Wichita, Sedgwick County, Kansas. Pursuant to the Oklahoma Limited Liability Company Act, Macco's membership interest constitutes the personal property of the member. Upon Macco's bankruptcy filings, Macco effectively transferred its interest to the Bankruptcy estate. Because there are no other members in the majority of Parkwood Village, other than Macco, the entire membership interest in Parkwood Village passed to the Bankruptcy estate, and the trustee is a substituted member. Parkwood Village failed to pay the ad valorem taxes on the apartment complex located in Wichita, Sedgwick County, Kansas. As a result of the failure to pay ad valorem taxes, Sedgwick County has filed tax liens on the property, and on June 1, 2011, filed an action in the 18th Judicial District Court for Sedgwick County, Kansas, Civil Department, seeking to foreclose its tax liens by selling said property. Redmond & Nazar will represent the trustee, as the sole member/ manager of Parkwood Village. The hourly rates of the firm's personnel are: Partners $225 - $285 Associates $185 Legal Assistants $75 To the best of the trustee's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. Richard A. Wieland, the U.S. Trustee for Region 20, appointed three members to the Official Committee of Unsecured Creditors. The Committee is represented by Ruston C. Welch, at Welch Law Firm, P.C., in Oklahoma City, Oklahoma. The Committee tapped Dennis Maley, CPA, as accountant. Receivership Services Corp., a division of the Martens Cos., has been named by the Court as property manager for the six Wichita apartment complexes caught up in the bankruptcy of Macco Properties of Oklahoma City. W. Thomas Gilman of the firm of Redmond & Nazar, LLPC serves as special counsel to Michael E. Deeba, Chapter 11 trustee. Price Edwards & Company serves as trustee's property manager. MACCO PROPERTIES: Bellingham & Loyd Okayed to Represent Trustee --------------------------------------------------------------- The Hon. Niles Jackson of the U.S. Bankruptcy Court for the Western District of Oklahoma authorized Michael E. Deeba, Chapter 11 trustee in the case of Macco Properties Inc., to retain Janice D. Loyd and James H. Bellingham of the firm of Bellingham & Loyd, P.C. as his counsel. As reported in the Troubled Company Reporter on June 17, 2011, Bellingham & Loyd, is expected to, among other things: a. advise trustee with respect to his rights, duties and obligations as Trustee and regarding other matters of bankruptcy law; b. assist in the preparation and filing of all pleadings and documents which may be required in these proceedings, including, but not limited to Plan of Liquidation and Disclosure Statement; and c. assist in claims review and objection process in analyzing and identifying claims against the estate Bellingham & Loyd's rates are: Personnel Rate --------- ---- Partner $250 Associate $175 Legal Assistant $75 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. Richard A. Wieland, the U.S. Trustee for Region 20, appointed three members to the Official Committee of Unsecured Creditors. The Committee is represented by Ruston C. Welch, at Welch Law Firm, P.C., in Oklahoma City, Oklahoma. The Committee tapped Dennis Maley, CPA, as accountant. Receivership Services Corp., a division of the Martens Cos., has been named by the Court as property manager for the six Wichita apartment complexes caught up in the bankruptcy of Macco Properties of Oklahoma City. Janice D. Loyd and James H. Bellingham of the firm of Bellingham & Loyd, P.C. represents Michael E. Deeba, Chapter 11 trustee. W. Thomas Gilman of the firm of Redmond & Nazar, LLPC serves as special counsel. Price Edwards & Company serves as trustee's property manager. MACCO PROPERTIES: Christopher Stein OK'd as Trustee's Counsel ------------------------------------------------------------- The Hon. Niles Jackson of the U.S. Bankruptcy Court for the Western District of Oklahoma authorized Michael E. Deeba, Chapter 11 Trustee in the case of Macco Properties, Inc., to retain Christopher T. Stein, of counsel to the firm of Bellingham & Loyd, P.C., as his legal counsel. Mr. Stein is expected to, among other things: a. advising the trustee with respect to his rights, duties and obligations as Trustee and regarding other matters of bankruptcy law; b. assist in preparation and filing of all pleadings and documents which may be required in these proceedings, including, but not limited to Plan of Liquidation and Disclosure Statement; and c. assist in claims review and objection process in analyzing and identifying claims against the estate. The hourly rates of Bellingham & Loyd are: Partner $250 Of Counsel $200 Associate $175 Legal Assistant $75 To the best of the trustee's knowledge, Mr. Stein is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. 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. Richard A. Wieland, the U.S. Trustee for Region 20, appointed three members to the Official Committee of Unsecured Creditors. The Committee is represented by Ruston C. Welch, at Welch Law Firm, P.C., in Oklahoma City, Oklahoma. The Committee tapped Dennis Maley, CPA, as accountant. Receivership Services Corp., a division of the Martens Cos., has been named by the Court as property manager for the six Wichita apartment complexes caught up in the bankruptcy of Macco Properties of Oklahoma City. Michael E. Deeba, Chapter 11 trustee is represented by Christopher T. Stein, of counsel to the firm of Bellingham & Loyd, P.C., and Janice D. Loyd and James H. Bellingham of Bellingham & Loyd, P.C. W. Thomas Gilman of the firm of Redmond & Nazar, LLPC serves as special counsel. Price Edwards & Company serves as trustee's property manager. MAUI LAND: Incurs $2.4 Million Net Loss in June 30 Quarter ---------------------------------------------------------- Maui Land & Pineapple Company, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on form 10-Q reporting a net loss of $2.46 million on $5.23 million of total operating revenues for the three months ended June 30, 2011, compared with a net loss of $4.58 million on $6.28 million of total operating revenues for the same period during the prior year. The Company also reported net income of $9.96 million on $11.64 million of total operating revenues for the six months ended June 30, 2011, compared with a net loss of $7.29 million on $13.87 million of total operating revenues for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $71.61 million in total assets, $86.57 million in total liabilities, current and long-term, and a $14.96 million stockholders' deficiency. "While the Company still faces many challenges, we continue to make steady progress towards resolving our legacy issues, and restructuring and streamlining our operations," said Tim Esaki, Chief Financial Officer. A full-text copy of the Form 10-Q is available for free at: http://is.gd/4nIxoH About Maui Land & Pineapple Company Maui Land & Pineapple Company, Inc. (NYSE: MLP) -- http://mauiland.com/-- develops, sells, and manages residential, resort, commercial, and industrial real estate. The Company owns approximately 23,000 acres of land on Maui and operates retail, utility operations, and a nature preserve at the Kapalua Resort. The Company's principal subsidiary is Kapalua Land Company, Ltd., the operator and developer of Kapalua Resort, a master-planned community in West Maui. As reported in the TCR on March 17, 2011, Deloitte & Touche LLP, in Honolulu, Hawaii, expressed substantial doubt about Maui Land & Pineapple's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that of the Company's recurring negative cash flows from operations and deficiency in stockholders' equity. METROPARK USA: Can Use Prepetition Lenders Cash Until Aug. 31 ------------------------------------------------------------- On Aug. 1, 2011, the U.S. Bankruptcy Court for the Southern District of New York entered its order granting Metropark USA, Inc., permission, on an interim basis, to use cash collateral of Wells Fargo Bank, National Association, as administrative agent and collateral agent, and the other prepetition senior secured parties, until Aug. 31, 2011. This is the fourth interim order authorizing the Debtor's limited use of cash collateral. The Debtor may use cash collateral to pay actual, ordinary, and necessary expenses pursuant to a revised and extended budget. A final hearing to consider entry of a Final Cash Collateral Order on the Cash Collateral Motion is scheduled for Aug. 29, 2011, at 10:00 a.m. As reported in the Troubled Company Reporter on May 25, as of the Petition Date, the Debtor owes Wells Fargo: i) $2,555,353 (inclusive of $618,840.60 of letters of credit), plus any and all interest, fees and costs, and any and all other debts or obligations under the Prepetition Senior Claim Documents; and ii) $825,000 under the Prepetition Subordinated Credit Agreement. As partial adequate protection for any use or diminution in the value of the Prepetition Senior Secured Parties' interest, the Debtor will grant replacement liens and additional liens and security interests, of the highest available priority in and upon all of the properties and assets of the Debtor. As additional partial adequate protection, the Debtor will make these payments to the Prepetition Agent: a) payment of interest on the first day of each month on the Prepetition Senior Claim; b) payment of all proceeds from the Store Closing Sale; and c) reimbursement to the Prepetition Agent. 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. MT. VERNON PROPERTIES: Wants to Use Rents from Properties --------------------------------------------------------- Mt. Vernon Properties, LLC, asks the U.S. Bankruptcy Court for the District of Maryland to approve its application for authorization to use cash collateral, consisting of income from the Debtor's properties, pursuant to a budget that will be provided at or prior to the hearing on the motion. The lenders First Mariner Bank, City National Bank, Fannie Mae, Columbo Bank and Carrolton Bank have asserted claims against the Debtor's properties and the rents derived therefrom. The Debtor proposes to provide the Lenders, as adequate protection for the use of cash collateral, a replacement lien on the Debtor's assets to the extent of any diminution in value of the Lenders' interest in the Debtor's pre-petition assets, if any. As additional adequate protection, the Lenders will have a statutory grant of an administrative expense priority claim pursuant to Section 507(b) of the Bankruptcy Code. Mt. Vernon Properties, LLC, based in Baltimore, Maryland, is the owner of many parcels of real property located in Baltimore City that the Debtor operates as multi-family rentl properties. The Company filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 11-24801) on July 18, 2011. Judge David E. Rice presides over the case. Aryeh E. Stein, Esq., at Meridian Law, LLC, in Baltimore, serves as bankruptcy counsel. In its petition, the Debtor estimated assets and debts of $10 million to $50 million. The petition was signed by Ronald Persaud, managing member of Mt. Vernon Properties II LLC, the Debtor's sole member. NAPA HOME: Teters Floral Acquires Core Assets --------------------------------------------- Home Accents Today reports that Napa Home & Garden Inc. has announced that the company's assets have been acquired by Teters Floral Products, Inc., a permanent floral and decorative accessories provider. According to the report, transaction details were finalized on Aug. 4, 2011, after the two organizations entered into an agreement for Teters to purchase assets related to the core Napa Home & Garden business. The report says Napa also announced that the company is taking orders as normal and shipping from its facility located here as Napa Home & Garden, a division of Teters Floral. Napa founders Jerry and KC Cunningham will direct Napa operations, and the company will maintain showrooms at the Atlanta, Dallas, Denver, High Point and Los Angeles markets, the press release continued. Napa will continue to use its sales force of over 75 independent representatives. Napa Home & Garden, Inc., filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 11-69828) on July 5, 2011. The Debtor estimated assets and debts of $1 million to $10 million. Leslie Pineyro, Esq., at Jones & Walden, LLC, in Atlanta -- ljones@joneswalden.com -- serves as counsel to the Debtor. A copy of the petition is at http://bankrupt.com/misc/ganb11-69828.pdf NAVISTAR INTERNATIONAL: To Close Manufacturing Plant in Ontario --------------------------------------------------------------- committed to close its International truck manufacturing plant in Chatham, Ontario and Workhorse chassis plant in Union City, Indiana, and to significantly scale back operations at its Monaco recreational vehicle headquarters and motor coach manufacturing plant in Coburg, Oregon. These activities are expected to result in restructuring charges of $105 million to $139 million in the aggregate, excluding non-cash asset impairments, and associated cash outlays of $65 million to $80 million. The Company expects most of these restructuring charges to be incurred during the third and fourth quarters of 2011, with the remainder taking place in 2012. The Company's Chatham, Ontario plant has been idled since June 2009 due to an inability to reach a collective bargaining agreement with the Canadian Auto Workers. As a result, products previously built in Chatham were transitioned to other assembly plants in North America. The commitment to close the Chatham, Ontario plant was driven by economic, industry and operational conditions that have rendered the plant uncompetitive. The closing of the Chatham, Ontario plant is expected to result in restructuring charges of $88 million to $115 million, excluding non-cash asset impairments. These charges consist of $63 million to $80 million of charges for pension and other postretirement contractual termination benefits and related benefits, $10 million to $20 million in personnel costs for employee termination and approximately $15 million of other charges. Approximately $50 million to $60 million of these restructuring charges are expected to require cash outlays. The Company's Workhorse Custom Chassis subsidiary plans to close its Union City, Indiana chassis plant and consolidate operations previously performed at Union City, Indiana into other existing facilities. The Company's Monaco RV headquarters and motor coach manufacturing plant in Coburg, Oregon will be significantly scaled back, with all motor coach production being consolidated at Monaco's existing manufacturing facility in Wakarusa, Indiana. Certain functions previously performed at the Monaco RV headquarters are expected to be consolidated into the Company's new corporate campus in Lisle, Illinois. The Company plans to continue producing RV towables and maintain certain administrative functions in facilities in Oregon, as well as maintain a RV service center there. The commitment to close the Union City, Indiana plant and significantly scale back operations at the Coburg, Oregon facility was made to enhance efficiency and productivity through the consolidation of operations. These activities are expected to result in restructuring charges of $17 million to $24 million, excluding non-cash asset impairments. These charges consist of approximately $13 million in personnel costs for employee termination and related benefits, $4 million to $6 million of equipment relocation and start-up costs and up to $5 million of other charges. Approximately $15 million to $20 million of these restructuring charges are expected to require cash outlays. The Company expects the Workhorse and Monaco consolidation actions to be implemented by the end of the second quarter of the Company's fiscal 2012. About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. The Company's balance sheet at April 30, 2011, showed $9.96 billion in total assets, $10.64 billion in total liabilities, $5 million in redeemable equity securities, $84 million in convertible debt and a $769 million total stockholders' deficit. Navistar has a 'BB-/Stable/--' corporate credit rating from Standard & Poor's and a 'B1' Corporate Family Rating and Probability of Default Rating from Moody's Investors Service. Moody's said in October 2010 that Navistar's B1 rating could improve if the North American truck market remains on track for a sustained recovery into 2011, and Navistar's operational initiatives to moderate its vulnerability to the truck cycle show evidence of taking hold. NEBRASKA BOOK: Three Members Resign from Creditors Committee ------------------------------------------------------------ BankruptcyData.com reports that the U.S. Trustee assigned to the Nebraska Book Company case appointed a second amended official committee of unsecured creditors. Elsevier Inc. resigned from the committee effective July 15, 2011, and Pearson Education Inc. resigned effective July 27, 2011. In addition, on Aug. 3, 2011, JanSport, a Division of VF Outdoor, resigned. About Nebraska Book Company Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the leading providers of new and used textbooks for college students in the United States. Nebraska Book and seven affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002 to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over the case. lawyers at Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The Debtors; restructuring advisors are AlixPartners LLC; the investment bankers are Rothschild, Inc.; the auditors are Deloitte & Touche LLP; and the claims agent is Kurtzman Carson Consultants LLC. As of the petition date, the Debtors had consolidated assets of $657,215,757 and debts of $563,973,688. JPMorgan Chase Bank N.A., as administrative agent for the DIP lenders, is represented by lawyers at Richards, Layton & Finger, P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment Management Inc., the DIP arranger, is represented by lawyers at Bayard, P.A., and Willkie Farr & Gallagher LLP. An ad hoc committee of holders of more than 50% of the Debtors' Second Lien Notes is represented by lawyers at Brown Rudnick. An ad hoc committee of holders of the Debtors' 8.625% unsecured notes are represented by Milbank, Tweed, Hadley & McCloy LLP. NETWORK SOLUTIONS: S&P Puts 'B' Corporate Rating on Watch Neg. -------------------------------------------------------------- Standard & Poor's Rating Services placed its ratings on Network Solutions LLC, including its 'B' corporate credit rating, on CreditWatch with negative implications. "Negative implications indicate that we could lower or affirm the rating. Network Solutions' financial risk profile would likely weaken in light of higher debt leverage and weaker interest coverage but the business risk profile could either improve or remain unchanged after we are better able to asses the new combined entity," S&P related. The CreditWatch placement follows Network Solutions' announcement that it has entered into a definitive agreement to be acquired by Web.com. "We could lower our rating if we conclude that the meaningful increase in debt leverage took place without an offsetting benefit to the company's business profile," said Standard & Poor's credit analyst Chris Valentine. "We could also affirm the existing ratings if we believe that the company's business and financial risk profile will remain relatively unchanged. Our review will consider Network Solutions' business risk profile, ownership structure, capital structure, liquidity profile, and expected financial policy following a potential transaction." Network Solutions is a Web-based service provider focusing on helping small and midsize businesses establish, design, maintain, promote, and optimize their online presence. Despite success in cross-selling its clients, it faces certain industry risks. The market for Web-site hosting and related services is highly competitive. Furthermore, effective pricing (i.e., pricing implied when bundled with other services) for domain registration services continues to decrease as competitors reduce prices to attract more customers. In the first quarter of 2011, generally accepted accounting principles (GAAP) EBITDA declined by 9%, despite flat revenue, because of increases in marketing and operating expenses. Declines in domain name services appear to be less severe as revenues were up 0.8% as a result of both new customers and renewals, while Web presence revenue increased 2.1% from higher renewals in hosting products. NEUROLOGIX INC: Amends Sublicense Agreement with Diamyd ------------------------------------------------------- Neurologix, Inc., Diamyd Therapeutics AB, and its parent company, Diamyd Medical AB, executed a "First Amendment to Sublicense Agreement dated July 27, 2006". The First Amendment amends certain terms of the Sublicense Agreement dated July 27, 2006, between the Company and Diamyd Therapeutics AB and grants to Diamyd Therapeutics AB a non-exclusive license to certain of the Company's patent rights. The principal terms of the First Amendment include (i) extending the target dates contained in the Sublicense Agreement related to the Company's development, manufacture and sale of its Parkinson's disease product, (ii) reducing certain royalty rates payable by the Company to Diamyd Therapeutics AB, and (iii) granting to Diamyd Therapeutics AB a non-exclusive worldwide royalty free license in the Company's patent rights related to its gene transfer technology for use with a gene therapy product to treat a disease other than Parkinson's disease and using a non-adeno- associated virus vector or a non-viral vector. A full-text copy of the First Amendment to Sublicense Agreement is available for free at http://is.gd/bbYDu4 About Neurologix, Inc. Fort Lee, N.J.-based Neurologix, Inc. (OTC Bulletin Board: NRGX) -- http://www.neurologix.net/-- is a clinical-stage biotechnology company dedicated to the discovery, development, and commercialization of gene transfer therapies for serious disorders of the brain and the central nervous system. The Company's current programs address such conditions as Parkinson's disease, epilepsy, depression and Huntington's disease, all of which are large markets not adequately served by current therapeutic options. The Company reported a net loss of $10.16 million on $0 of revenue for the year ended Dec. 31, 2010, compared with a net loss of $13.46 million on $0 of revenue during the prior year. BDO USA, LLP, in New York, raised substantial doubt about the Company's ability to continue as a going concern. BDO noted that the Company has suffered recurring losses from operations, expects to incur future losses for the foreseeable future and has deficiencies in working capital and capital. The Company's balance sheet at March 31, 2011, showed $7.06 million in total assets, $13.20 million in total liabilities, and a $6.13 million total stockholders' deficit. NEW CENTURY FINANCIAL: Criminal Probes Said to Have Stalled ----------------------------------------------------------- Jean Eaglesham, writing for The Wall Street Journal, reports that people familiar with the situation said federal criminal investigations of IndyMac Bancorp and New Century Financial Corp. have stalled and could result in no charges being filed. The U.S. Attorney's Office for the Western District of Washington in Seattle on Friday also closed the investigation stemming from the September 2008 failure of Washington Mutual Bank. The U.S. Department of Justice has concluded that the evidence does not meet the exacting standards for criminal charges in connection with the bank's failure. According to the WSJ report, all three separate investigations hit major stumbling blocks. People familiar with the matter told the Journal the WaMu probe had been inactive for more than a year. Sources also said the IndyMac and New Century investigations are essentially dormant at the moment. The Journal says a spokesman for the U.S. Attorney's office in Los Angeles, which initiated the IndyMac and New Century investigations, declined to comment. The Journal notes, however, that the investigations haven't been closed, meaning they could gain new momentum if fresh evidence surfaces. A source told the Journal the U.S. Attorney's Office in Brooklyn, N.Y., recently opened its own criminal investigation into IndyMac. The source said in the Brooklyn probe, which is still at an early stage, prosecutors are looking at the information IndyMac disclosed about the quality of home loans that backed bonds it sold to investors. It isn't clear if the scope of the Brooklyn-based investigation is significantly different than the Los Angeles one, but U.S attorneys have broad discretion to determine which avenues to pursue. The Journal says a spokesman for the U.S. Attorney's office in Brooklyn declined to comment. About Indymac Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- was the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that originated mortgages in all 50 states of the United States. On July 11, 2008, the Office of Thrift Supervision closed IndyMac Bank and appointed FDIC as the bank's receiver. Thacher Proffitt & Wood LLP was engaged as counsel to the FDIC. All non-brokered insured deposit accounts and substantially all of the assets of the bank were transferred to IndyMac Federal Bank, F.S.B., Pasadena, CA, a newly chartered full-service FDIC-insured institution. On March 19, IndyMac Federal Bank was sold to OneWest Bank, F.S.B., Pasadena, California. OneWest Bank, FSB is a newly formed federal savings bank organized by IMB HoldCo LLC. Indymac Bancorp filed for Chapter 7 bankruptcy protection on July 31, 2008 (Bankr. C.D.Calif., Case No. 08-21752). Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C. Weitnauer, Esq. Indymac had about $32.01 billion in assets as of July 11, 2008. In court documents, IndyMac disclosed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. About New Century Financial Corp. Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real state investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The Company offers a broad range of mortgage products designed to meet the needs of all borrowers. New Century Financial and its affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., were tapped as bankruptcy counsel. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Court confirmed the Debtors' second amended joint Chapter 11 plan of liquidation on July 15, 2008. 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. NEW ENTERPRISE: Moody's Downgrades CFR to B3; Outlook Negative -------------------------------------------------------------- Moody's Investors Service downgraded New Enterprise Stone & Lime Co., Inc.'s corporate family rating and probability of default rating to B3 from B2, and downgraded the rating of its $250 million senior unsecured notes to Caa2 from Caa1. The outlook is negative. RATINGS RATIONALE The downgrade results from weaker than expected operating performance and Moody's expectation that public construction will face further slowing through 2012 as all levels of government grapple with fiscal constraints and the exhaustion of ARRA (America Recovery and Reinvestment Act) funds. NESL's adjusted Debt-to-EBITDA leverage increased to over 7.0x and its EBIT-to- Interest coverage fell below 1.0x as a result of weakening earnings. Private sector residential and non-residential construction in NESL's key markets remains weak following several years of contraction. The B3 corporate family rating balances the company's modest scale, seasonality, limited geographic diversification, concentration of business with Pennsylvania DOT, and tight liquidity, against the company's historic resilience through various economic cycles, multi-generational family stewardship, and prudent acquisition and growth strategy. New Enterprise derives over half of its revenues from construction materials and most of the remainder from highway construction contracting. Its operations remain largely concentrated in Pennsylvania, Western New York, and adjacent states, leaving it largely exposed to the economic conditions and public spending in that region. That said, the company's vertical integration enables it to operate as a single source provider of materials and construction services, creating cost and convenience advantages over other competitors. The negative outlook reflects the risk of further fiscal tightening at most levels of government and increased risk of slowing private sector construction. Federal highway spending will likely suffer from the expiration of stimulus spending, and intensified political pressure to cap or possibly cut highway funds. A decelerating general economy will further postpone a recovery in residential and non-residential private construction. Material de-levering resulting in adjusted debt-to-EBITDA consistently falling below 5.0x, and EBIT-to-Interest exceeding 1.5x would result in ratings improvement. Building additional geographic diversity, scale, and customer diversity would also improve the company's credit risk profile. The rating would likely be downgraded in the event that debt-to- EBITDA leverage exceeds 7.5x or EBIT-to-Interest Coverage remains below 1.0x. Revenue deterioration due to falling highway and construction activity in core markets would likely pressure the ratings as well. The principal methodology used in rating NESL was the Global Building Materials Industry Methodology published in July 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. NESL is a privately held, vertically-integrated construction materials supplier, heavy construction contractor, and traffic safety services and equipment provider. * * * Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the new B3 corporate rating from Moody's Investors Service lines up with the demotion issued in June by Standard & Poor's. When S&P downgraded the notes to B- in June, it predicted the holders would recover 30 percent to 50% in the event of payment default. NEW YORK STATE: S&P Cuts Rating on $16-Mil. Revenue Bonds to 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services corrected 19 ratings on bonds backed at original issuance by bond insurance or bank letters of credit. The accumulated value at issuance of these bonds totals $567.35 million. "Due to administrative errors, we did not in these instances appropriately reflect changes in the ratings of the entities providing support or recognize the expiration of support. In several instances, we are also assigning a Standard & Poor's Underlying Rating (SPUR) and a recovery rating to the obligor or issuer whose credit quality is now the primary determinant of the resulting issue rating. Specifics on the corrections follow," S&P related. Ratings List Harrison County Commission $1 mil 6.25% solid waste disp rev bnds (Monongahela Pwr Co. Proj) 1st mtg bnd ser B due 2023 Insurer: National Public Finance Guarantee Corp. Obligor: Monongahela Power Co. Rating Raised To From BBB+ BBB/Developing New Recovery Rating 1+ New SPUR BBB+ La Cygne $21.94 mil poll cntl rfdg bnds (Kansas Gas & Elec Co. Proj) ser 1994B due 2027 Insurer: National Public Finance Guarantee Corp. Obligor: Kansas Gas & Electric Co. Rating Raised To From BBB+ BBB/Negative New Recovery Rating 1 New SPUR BBB+ Lake Charles Harbor & Term District $20.9 mil rev rfdg bnds (ConocoPhilips) ser 1999A due 2029 Obligor: ConocoPhillips Rating Lowered To From A/A-1 AAA/A-1+ Michigan Strategic Fund $68.5 mil var rte ltd oblig rev bnds (Detroit Edison Co. Exempt Fac Proj) ser 2006CT due 2036 Insurer: Syncora Guarantee Inc. Obligor: Detroit Edison Co. Issue Rating A New Recovery Rating 1+ New Jersey Economic Development Authority $20 mil 4.5% var rt dem wtr fac rev rfdg bnds secd IRB - LOC ser 1996B due 2025 Bond Insurer: Ambac Assurance Corp. Obligor: United Water New Jersey Inc. Outlook Revised To From A- A-/Negative Ohio State Air Quality Development Authority $37.77 mil Collateral Pollution Control Revenue Refunding Bonds (The Dayton Pwr & Light Co. Proj), Series 2005B Due 2034 Insurer: Berkshire Hathaway Assurance Corp. Obligor: Dayton Power & Light Co. Rating Removed From CreditWatch To From AA+/Stable AA+/Watch Neg New SPUR A Ohio State Air Quality Development Authority $34.975 mil Collat Air Quality Dev Rev Bnds (Dayton Power & Light Co. Proj) Ser 2006A due 2036 Insurer: Berkshire Hathaway Assurance Corp. Obligor: Dayton Power & Light Co Rating Removed From CreditWatch To From AA+/Stable AA+/Watch Neg Ohio State Air Quality Development Authority $43.225 mil Collat poll cntl rev rfdg bnds (Dayton Power & Light Co. Proj) Ser 2005 B due 2024 Insurer: Berkshire Hathaway Assurance Corp. Obligor: Dayton Power & Light Co Rating Removed From CreditWatch To From AA+/Stable AA+/Watch Neg Ohio State Air Quality Development Authority $11.7 mil Collat Air Quality Dev Rev Bnds (Dayton Power & Light Co. Proj) Ser 2006A due 2036 Insurer: Berkshire Hathaway Assurance Corp. Obligor: Dayton Power & Light Co Rating Removed From CreditWatch To From AA+/Stable AA+/Watch Neg Oklahoma Development Finance Authority $20 mil rev bnds ser 2002 Due 2037 Obligor: ConocoPhillips Rating Lowered To From A/A-1 AAA/A-1+ New York St Energy Research & Dev Auth $50 mil 5.635% adj rate gas fac rev bnds unsecd IRB ser 1991D due 2026 Obligor: KeySpan Energy Delivery New York Rating Lowered To From A AAA New SPUR A New York State Environmental Facilities Corp. $16 mil wtr fac rev bnds (Long Island Water Corp. proj) ser 2004A due 2034 Insurer: MBIA U.K. Insurance Ltd. Obligor: Long Island Water Corp. Rating Lowered To From B/Negative AA-/Watch Dev New Jersey Economic Development Authority $40 mil wtr fac rev bnds (New Jersey -American Wtr Co. Proj) ser 1998A due 2038 Insurer: National Public Finance Guarantee Corp. Obligor: New Jersey-American Water Co. Rating Raised To From A BBB/Developing Salem County Indl Poll Ctl Fin Authority US$23 mil poll cntl rev bnds Public Service Elec & Gas Co. Proj) ser 1993B due 2025 Insurer: National Public Finance Guarantee Corp. Obligor: Public Service Electric & Gas Co. Rating Raised To From A- BBB/Developing New Recovery Rating 1+ New SPUR A- St Marys $45 mil poll cntl rev rfdg (Western Resources Inc. Proj)) ser 1994 due 2032 Insurer: National Public Finance Guarantee Corp. Obligor: Westar Energy Inc. Rating Raised To From BBB+ BBB/Developing New Recovery Rating 1 New SPUR BBB+ St. Marys $14.5 mil poll cntl rfdg bnds (Kansas Gas & Elec Co. Proj) ser 1994 due 2032 Insurer: National Public Finance Guarantee Corp. Obligor: Kansas Gas & Electric Co. Rating Raised To From BBB+ BBB/Negative New Recovery Rating 1 New SPUR BBB+ Wamego $58.34 mil poll cntl rfdg rev bnds (Westar Energy Inc. Proj) ser 2004 due 2033 Insurer: MBIA U.K. Insurance Ltd. Obligor: Westar Energy Inc. Rating Lowered To From BBB+ AA-/Watch Dev New Recovery Rating 1 Wamego $30.5 mil poll cntl rfdg bnds (Kansas Gas & Elec Co. Proj) ser 1994 due 2032 Insurer: National Public Finance Guarantee Corp. Obligor: Kansas Gas & Electric Co. Rating Raised To From BBB+ BBB/Negative New Recovery Rating 1 New SPUR BBB+ Wamego $10 mil poll cntl rfdg bnds (Kansas Gas & Elec Co. Proj) ser 1994 due 2032 Insurer: National Public Finance Guarantee Corp. Obligor: Kansas Gas & Electric Co. Rating Raised To From BBB+ BBB/Negative New Recovery Rating 1 New SPUR BBB+ NEXSTAR BROADCASTING: Amends Senior Secured Credit Facility ----------------------------------------------------------- Nexstar Broadcasting, Inc., entered into an amendment to its senior secured credit facility on July 29, 2011. The amendment, among other things, removes as an event of default the termination of more than three stations network affiliation agreements with major networks and lowers the maximum consolidated total leverage ratio to 7.50 to 1.00 through Dec. 30, 2012. A full-text copy of the Fifth Amendment to Fourth Amended and Restated Credit Agreement is available for free at: http://is.gd/VpN91R About Nexstar Broadcasting Group Irving, Texas-based Nexstar Broadcasting Group Inc. currently owns, operates, programs or provides sales and other services to 62 television stations in 34 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and Florida. Nexstar's television station group includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches approximately 13 million viewers or approximately 11.5% of all U.S. television households. The Company reported a net loss of $1.81 million on $313.35 million of net revenue for the year ended Dec. 31, 2010, compared with a net loss of $12.61 million on $251.97 million of net revenue during the prior year. The Company's balance sheet at Dec. 31, 2010 showed $602.53 million in total assets, $777.70 million in total liabilities and $175.17 million in total stockholders' deficit. * * * As reported by the Troubled Company Reporter on Aug. 30, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Nexstar Broadcasting Group to 'B' from 'B-'. The rating outlook is stable. "The 'B' corporate credit rating reflects S&P's expectation that Nexstar's core ad revenue will continue growing modestly in 2010 and 2011," said Standard & Poor's credit analyst Deborah Kinzer. The EBITDA growth resulting from the rebound in core advertising, combined with political ad revenue from the 2010 midterm elections, should, in S&P's view, enable Nexstar to reduce its leverage significantly by the end of the year. NON-INVASIVE MONITORING: Extends Hsu Gamma Credit Pact to 2012 -------------------------------------------------------------- Non-Invasive Monitoring Systems, Inc., entered into the Second Amendment to the Note and Security Agreement dated as of March 31, 2010, and as amended on March 14, 2011, with Hsu Gamma Investments, L.P., an entity controlled by NIMS' Chairman, Jane H. Hsiao, Ph.D., and Frost Gamma Investments Trust. Pursuant to the terms of the Agreement, the Lenders granted NIMS a revolving credit line in the aggregate amount of $1,000,000. The Second Amendment extended the maturity date of the Revolver from July 31, 2011, until July 31, 2012. As of the date of the Second Amendment, NIMS had drawn down $1,000,000 under the Agreement. The Second Amendment did not amend any other terms of the Agreement. A full-text copy of the Second Amendment to Note and Security Agreement is available for free at http://is.gd/XCNEF2 About Non-Invasive Monitoring Based in Miami, Florida, Non-Invasive Monitoring Systems, Inc., (OTC BB: NIMU) -- http://www.nims-inc.com/-- is primarily engaged in the research, development, manufacturing and marketing of a line of motorized, non-invasive, whole body, periodic acceleration platforms, which are intended as aids to improve circulation and joint mobility, relieve minor aches and pains, relieve morning stiffness, relieve troubled sleep and as mechanical feedback devices for slow rhythmic breathing exercise for stress management. The Company's balance sheet at April 30, 2011, showed $1.27 million in total assets, $1.32 million in total liabilities, and a stockholders' deficit of $53,000. As reported in the Troubled Company Reporter on Nov. 3, 2010, Morrison, Brown Argiz & Farra, LLP, in Miami, Florida, expressed substantial doubt about Non-Invasive Monitoring Systems' ability to continue as a going concern, following the Company's fiscal year ended July 31, 2010. The independent auditors noted that the Company has experienced recurring net losses, cash outflows from operating activities and has an accumulated deficit and substantial purchase commitments. NORTHCORE TECHNOLOGIES: To Release 2nd Quarter Results Friday ------------------------------------------------------------- Northcore Technologies Inc. scheduled to release its financial results for the second quarter of 2011 on August 11 following the close of the markets. The Company will hold a conference call at 10:00 a.m. (Eastern) on Friday, August 12 to discuss its financial results and review operational activities. Investors and followers of Northcore are invited to listen to the call live over the Internet on the Company's Web site at: www.northcore.com/events.html This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. About Northcore Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC BB: NTLNF) -- http://www.northcore.com/-- provides a Working Capital Engine(TM) that helps organizations source, manage, appraise and sell their capital equipment. Northcore offers its software solutions and support services to a growing number of customers in a variety of sectors including financial services, manufacturing, oil and gas and government. Northcore owns 50% of GE Asset Manager, LLC, a joint business venture with GE. Together, the companies work with leading organizations around the world to help them liberate more capital value from their assets. Northcore reported a net loss for the first quarter of C$574,000. This compares with a net loss of C$677,000 in the fourth quarter of 2010. In the first quarter of 2010, Northcore reported a net loss of $713,000. Northcore reported consolidated revenues of C$183,000 for the first quarter, an increase of 4% over the C$176,000 reported in the fourth quarter of 2010. In the same period of 2010, Northcore reported consolidated revenues of C$150,000. Certain adverse conditions and events cast substantial doubt upon the ability of the Company to continue as a going concern, the Company said in the filing. "The Company has not yet realized profitable operations and has relied on non-operational sources of financing to fund operations." The Company's balance sheet at March 31, 2011, showed C$595,000 in total assets, C$1.83 million in total liabilities and a C$1.24 million in total shareholders' deficiency. NORTHEAST INDUSTRIES: Owner Hit With $250T Judgment in Suit ----------------------------------------------------------- Magistrate Judge George J. Limbert ruled on Vindicator Printing Company's motion for summary judgment against Sam Boyles, owner of bankrupt Northeast Industries, Inc., and Lessie Boyles. Vindicator on Aug. 21, 2009, filed a complaint alleging breach of contract and promissory estoppel claims against the Boyles and Northeast Industries. The Plaintiff owns The Vindicator, a daily newspaper circulated in Youngstown, Ohio. Northeast had agreed to supply and install equipment at the Plaintiff's production facility. The lawsuit was automatically stayed with respect to Northeast Industries after it filed for bankruptcy. On Dec. 7, 2010, the Court severed the claims against the Boyles and Northeast, to allow the claims against the Boyles to proceed to judgment. In his Aug. 5, 2011 Memorandum Opinion and Order, Judge Limbert held that the Plaintiff's motion for summary judgment against the Boyles is granted as to the breach of contract claim and denied as to the promissory estoppel claim. Judgment is rendered in favor of the Plaintiff in the amount of $250,000, as well as expenses and attorney fees. The promissory estoppel claim is dismissed sua sponte as a matter of law. The lawsuit is Vindicator Printing Company, v. Sam W. Boyles, et al., No. 4:09CV01973 (N.D. Ohio). A copy of the decision is available at http://is.gd/OO1Uxsfrom Leagle.com. Based in Camp Verde, Arizona, Northeast Industries, Inc., sells, manufactures, repairs, engineers and installs printing presses. Northeast filed Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 10-21438) on July 8, 2010, represented by Daniel R. Warner, Esq. -- drw@jpglaw.com -- at J. Phillip Glasscock PC, as bankruptcy counsel. Judge Redfield T. Baum, Sr., presides over the case. In its petition, the Debtor estimated $1 million to $10 million in assets and debts. O&G LEASING: Bank Seeks to Prohibit Use of Cash Collateral ---------------------------------------------------------- Washington State Bank (WSB) asks the U.S. Bankruptcy Court for the Southern District of Mississippi to prohibit O&G Leasing, LLC from the continued use of cash collateral. Prior to the filing of the bankruptcy petition, on December 5, 2008, O&G executed a $5.25 million promissory note to WSB, secured by Rig #48, related equipment and all revenues from Rig #48. Rig #48 has continued to be utilized by the Debtor. Rig #48 has been leased and is continuing to generate revenues. As of Aug. 3, 2011, the WSB debt had grown to $4,991,849.57. In the past 14 months since the filing of the bankruptcy petition, WSB has been paid nothing. The Debtor has also not paid any funds to First Security Bank, Indenture Trustee either, which is a $38 million creditor. Washington State Bank is represented by: Derek A. Henderson, Esq. 111 East Capitol Street, Suite 455 Jackson, Mississippi 39201 Phone: (601) 948-3167 E-mail: d_henderson@bellsouth.net About O&G Leasing 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. OLDE PRAIRIE: Daley and George OK'd for Tax Increment Financing --------------------------------------------------------------- The Hon. Jack B. Schmetterer of the U.S. Bankruptcy Court for the Northern District of Illinois authorized Olde Prairie Block Owner LLC, to employ Daley and George, Ltd. as special counsel for zoning, tax increment financing, and other typical real property development at the Debtor's real properties. The Debtor is authorized to pay interim compensation to Daley & George, including the $20,000 retainer payment and any draws upon this retainer, provided that the payments comply with the requirements of the Amended DIP Order. The Debtor related that the Court approved the Debtor's request to pay Daley & George up to $50,000 for services provided after Jan. 1, 2011. In the Amended DIP Order and the Amended DIP Findings and Conclusions, the Court authorized the Debtor to use DIP Loan proceeds to pay Daley & George up to $50,000 for services provided after Jan. 1, 2011. The hourly rates of Daley & George's pesonnel are: Jack George $450 Associate $350 To the best of the Debtor's knowledge, Daley & George is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Olde Prairie Block Owner Olde Prairie Block Owner, LLC, owns two parcels of real estate: (a) a parcel known as the "Olde Prairie Property" located at 230 E. Cermak Road in Chicago, and (b) a parcel known as the "Lakeside Property" located across the street at 330 E. Cermak Road in Chicago. It also holds a long-term lease with the Metropolitan Pier and Exposition Authority that allows it rent-free use of 450 parking spaces at the McCormick Place parking garage until the year 2203. Olde Prairie Block Owner sought chapter 11 protection (Bankr. N.D. Ill. Case No. 10-22668) on May 18, 2010. The Debtor is represented by John E. Gierum, Esq., at Gierum & Mantas, and John Ruskusky, Esq., George R. Mesires, Esq., and Nile N. Park, Esq., at Ungaretti & Harris LLP. Marcus, Clegg & Mistretta, P.A., serves as special counsel. The Debtor estimated assets of $100 million to $500 million and liabilities of $10 million to $50 million at the time of the filing. The Debtor filed a Chapter 11 plan on Sept. 11, 2010. A copy of that plan is available at http://bankrupt.com/misc/OLDEPRAIRE_Plan.pdfat no charge. The Court previously found that the total value of the Real Properties and the Parking Lease was $81,150,000, far more than the $48,000,000 that CenterPoint claims to be owed by the Debtor. No trustee, examiner, or committee has been appointed in this case. OMAS INVESTMENT: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Omas Investment LLC dba King's Row Apartments c/o C & G Investors, Inc. P.O. Box 970918 Miami, FL 33197 Bankruptcy Case No.: 11-31958 Chapter 11 Petition Date: August 4, 2011 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Debtor's Counsel: Martin L Hannan, Esq. MARTIN HANNAN, P.A. 9370 SW 72 St # A266 Miami, FL 33173 Tel: (305) 279-7280 Fax: (305) 279-7145 E-mail: arhannanlaw@aol.com Scheduled Assets: $5,029,330 Scheduled Debts: $20,869,431 A list of the Company's 17 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flsb11-31958.pdf The petition was signed by Eugene Sims, as President of C & G Investors, Inc. OVERLAND STORAGE: Amends Employment Pacts with Executive Officers ----------------------------------------------------------------- The Compensation Committee of the Board of Directors of Overland Storage, Inc., approved amended and restated employment agreements with Eric L. Kelly, the Company's president and chief executive officer, and Kurt L. Kalbfleisch, the Company's vice president of Finance, chief financial officer and secretary. The Kelly Agreement provides for Mr. Kelly to earn a base salary of $400,000, which has been his base salary since his appointment as Chief Executive Officer on Jan. 27, 2009. Mr. Kelly is eligible to receive an annual bonus based upon the achievement of financial and management objectives reasonably established by the Board of Directors or an authorized committee of the Board of Directors. His annual bonus target is 100% of the greater of $400,000 or his base salary as of the end of the applicable fiscal quarter or year in which the bonus is earned, and he has the opportunity to earn an annual bonus of up to 150% of the target bonus. If the Company terminates Mr. Kelly's employment without cause or he resigns for good reason, or if he dies or becomes disabled, before the end of a fiscal quarter or year, he will be eligible to receive a prorated amount of the target bonus for the fiscal quarter or year in which his employment terminates. The termination of employment by the Company without cause includes a termination by the Company at the end of the term then in effect. To the extent that any travel, lodging or auto expense reimbursements are taxable to Mr. Kelly, the Company will provide him with a tax restoration payment so that he will be put in the same after-tax position as if such reimbursements had not been subject to tax. The Kelly Agreement has a three-year term and automatically renews for additional one-year terms. The Company may unilaterally modify Mr. Kelly's cash compensation at any time, subject to Mr. Kelly's right to terminate his employment for good reason. A full-text copy of the Kelly Agreement is available for free at http://is.gd/11igkt The Kalbfleisch Agreement provides for Mr. Kalbfleisch to earn a base salary of $266,000. Mr. Kalbfleisch is eligible to receive an annual bonus based upon the achievement of financial and management objectives reasonably established by the Board of Directors or an authorized committee of the Board of Directors. If the Company terminates Mr. Kalbfleisch's employment without cause or he resigns his employment for good reason before the end of a fiscal quarter or year, he will be eligible to receive a prorated amount of the target bonus for the fiscal quarter or year in which his employment terminates. The Kalbfleisch Agreement has a three-year term and automatically renews for additional one-year terms. The Company may unilaterally modify Mr. Kalbfleisch's cash compensation at any time, subject to Mr. Kalbfleisch's right to terminate his employment for good reason. A full-text copy of the Kalbfleisch Employment and Severance Agreement is available for free at http://is.gd/NxJ1yH About Overland Storage San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) -- http://www.overlandstorage.com/-- is a global provider of unified data management and data protection solutions designed to enable small and medium enterprises (SMEs), corporate departments and small and medium businesses (SMBs) to anticipate and respond to change. As reported in the Troubled Company Reporter on Sept. 28, 2010, Moss Adams LLP, in San Diego, Calif., expressed substantial doubt about Overland Storage's ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2010. The independent auditors noted of the Company's recurring losses and negative operating cash flows. The Company's balance sheet at March 31, 2011, showed $48.50 million in total assets, $35.89 million in total liabilities and $12.61 million in total shareholders' equity. PACIFICUS REAL: Taps Solomon Ross to Prepare 2010 Tax Returns ------------------------------------------------------------- PacificUS Real Estate Group, et al., ask the U.S. Bankruptcy Court for the Central District of California for permission to employ Solomon Ross Grey & Company, LLP as accountants to prepare the consolidated 2010 tax returns. Stuart M. Ross, a member of the firm, tells the Court that the hourly rates of SRG&Cs personnel are: Stuart M. Ross, CPA $350 Philip Marshall, CPA $300 Professional Staff and Accountants $125 - $195 Administrative Staff $60 SRG&C estimates that its total fees and expenses for the services will be between $9,000 and $10,000. The Debtor did not pay any amounts to SRG&C within 90 days of the petition date. To the best of the Debtor's knowledge, SRG&C is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Pacificus Real Estate PacificUS Real Estate Group, based in Pasadena, California, owns various real estate properties, including the "SilverTip Property"located at the south entrance of Yosemite National Park. It filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-40120) on July 14, 2011. Judge Ernest M. Robles presides over the case. The Debtor is represented by Ron Bender, Esq., at Levene, Neale, Bender, Yoo & Brill, LLP. In its petition, the Debtor estimated assets and debts of $10 million to $50 million. The petition was signed by Paul J. Giuntini, its president. PacificUS said it intends to reorganize through a sale of -- or a joint venture to develop -- the SilverTip Property. PALM HARBOR: Files Chapter 11 Plan of Liquidation ------------------------------------------------- Palm Harbor Homes Inc. filed a proposed plan of liquidation that promises to pay bondholders and unsecured creditors up to 21% of what they are owed. The creditors will be paid from the proceeds from the prior sale of its assets. BankruptcyData.com reports that under the Plan, holders of priority claims will be paid in full, holders of 3 1/4% Convertible Senior Notes will receive their pro rata share of $54.78 million and holders of general unsecured claims will receive their pro rata share of available cash. The Court scheduled a Sept. 13, 2011, hearing to consider approval of the Disclosure Statement. About Palm Harbor Homes Addison, Texas-based Palm Harbor Homes, Inc. -- http://www.palmharbor.com/-- manufactured and marketed factory- built homes. The Company marketed nationwide through vertically integrated operations, encompassing manufactured and modular housing, financing and insurance. Palm Harbor, along with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 10-13850) on Nov. 29, 2010. It disclosed $321,263,000 in total assets and $280,343,000 in total debts. Brian Cejka at Alvarez & Marsal is the Debtors' chief restructuring officer. Raymond James and Associates, Inc., is the Debtors' investment banker. Alvarez & Marshal North America, LLC, is the Debtors' financial advisor. BMC Group, Inc., is the Debtors' claims agent. Pachulski Stang Ziehl & Jones LLP serves as counsel to the Official Committee of Unsecured Creditors. Following a court-approved sale process, Palm Harbor in March 2011 sold its business for $85.25 million to Fleetwood Enterprises Inc., a venture between Cavco Industries Inc. and a fund advised by Third Avenue Management LLC. Fleetwood is providing up to $55 million in secured financing for Palm Harbor's reorganization. As reported in the TCR on May 16, 2011, Cavco Industries and Fleetwood Homes filed with the Bankruptcy Court a motion for an order enforcing and ordering Palm Harbor Homes to perform its obligations under the Court-approved amended and restated asset purchase agreement and to pay administrative expenses. According to Cavco and Fleetwood, the Debtors ceased paying former employees' sales commissions and profit-sharing bonuses prior to the closing date when the individuals were still employees of the Debtors. PARAMOUNT LIMITED: Receiver Says Bankruptcy Filed in Bad Faith -------------------------------------------------------------- The Police & Fire Retirement System of the City of Detroit, Michigan, and McTevia & Associates, the court-appointed receiver, object to the request of Paramount Limited and its debtor- affiliates to use cash collateral. The receiver contends there is no likelihood that the Debtors can reorganize under Chapter 11 and that the bankruptcy case was filed in bad faith and should be dismissed. The Pension Fund asserts the Debtors are incapable of operating their business. As of the Petition Date, Paramount owed the Police & Fire Retirement System $13,220,000 pursuant to a 2008 loan agreement. The Pension Funds has a lien on all assets of Paramount, and Paramount Land Holdings, LLC (MI)'s membership interests in Paramount. In their Cash Collateral Motion, the Debtors acknowledged that some or all of the assets may constitute cash collateral under Section 363 of the Bankruptcy Code. Due to alleged defaults under the Loan Agreement, the Pension Fund filed Case No. 11-006035-CR in the Wayne County Circuit Court requesting the appointment of a receiver, which request was granted. James V. McTevia was appointed receiver. In the Cash Collateral Motion, Paramount said that, to operate the business and be able to propose a Plan of Reorganization, the Debtors are in desperate need of the use of cash collateral. Without the use of cash collateral, the Debtors would be forced to shut down their operations and liquidate their assets. The Debtors project that the funds needed to permit them to operate through the third week of August, including payment of administrative expenses of the estate, is $95,000 which consists of: * the amounts owed for the services of Southern Servicing, LLC, pursuant to a Management Agreement for the managing of the Debtors' operations, * adequate protection/interest payments to the Pension Fund, and * funding of professional fees to be held in trust by the Debtors' counsel pending approval from the Court. Southern is responsible for collecting accounts receivable, advertising and marketing for sales of the Debtors' properties, maintaining records concerning the Debtors' properties and the transactions associated therewith. The Debtors contend that the Pension Fund has adequate protection for its secured claim in the form of an equity cushion of $6,645,450. Based on the Receiver's Fourth Weekly and First Thirty-Day Advisory Report to the Court and First Petition for the Payment of the Receiver's Fees and Expenses: -- The receivables owed to the Debtors on account of land contracts and/or notes receivables is at least $17 million of which 43% is current with the balance paying, albeit late. Only about 60 of the nearly 600 accounts in the Receivables Portfolio are in forfeiture proceedings. -- The Debtor's cash receipts will be in the range of $50,000 to $100,000 per a month while Debtors expected expenses are $85,000, which includes interest. Debtors also have a number of unsold real properties which are worth an estimated $2,865,450. Additionally, the Debtors propose to grant the Pension Fund further adequate protection for the Debtor's use of cash collateral in the form of replacement liens, to the same extent and priority as held on the Petition Date, on post-petition assets of the estate. The receiver, however, is concerned that if the Court were to grant the use of cash collateral and order the turnover of records to the Debtors, there is substantial likelihood -- based on previous behavior -- that records will disappear and any cash flow received by the Debtors will be dissipated. The receiver also contends that the Debtors have not made any provision for payment or escrow for current taxes. According to the receiver, the only reason he has been able to operate is that the Pension Fund advanced $50,000. The receiver also notes he has terminated Southern Servicing as of August 1 but Southern has failed or refused to forward receipts of land contracts. The Pension Fund meanwhile contends that the Debtors have failed to pay more than $10,000 in real estate taxes. The Pension Fund also says it is undersecured, and that there is insufficient cash flow to pay adequate protection. The Bankruptcy Court initially held a hearing on the Cash Collateral Motion and decided to adjourn matter. The Court will hold another hearing on Aug. 30, 2011, at 10:00 a.m. About Paramount Limited Paramount Limited LLC was an investor in distressed real estate. Paramount Limited and three other affiliates sought Chapter 11 bankruptcy protection (Bankr. E.D. Mich. Lead Case No. 11-59829) on July 21, 2011, after a state court appointed McTevia & Associates as receiver to take over. The receiver was appointed at the behest of the Police and Fire Retirement System of the city of Detroit, one of Paramount's unsecured creditors, with $13.2 million owed. The Retirement System said Paramount was "a classic Ponzi scheme." Judge Thomas J. Tucker presides over the case. Gene R. Kohut of Kohut Management Group, LLC, has been tapped to serve as their Chief Restructuring Officer. Stephen M. Gross, Esq., and Jayson Russ, Esq., at McDonald Hopkins Plc, serve as bankruptcy counsel. Paramount Limited estimated assets of more than $10 million and debt of less than $10 million. The petition was signed by Abner McWhorter, Paramount's managing member. Affiliates that simultaneously sought Chapter 11 protection are Paramount Land Holdings, LLC; Paramount Servicing, LLC; and Paramount Land Holdings, LLC. The receiver is represented by: Mark S. Frankel, Esq. Jerry M. Ellis, Esq. COUZENS LANSKY FEALK ELLIS ROEDER & LAZAR P.C. 39395 W. Twelve Mile Road, Suite 200 Farmington Hills, MI 48331 Tel: 248-489-8600 E-mail: mfrankel@couzens.com jerry.ellis@couzens.com The Police and Fire Retirement System is represented by: Marie T. Racine, Esq. Jennifer A. Cupples, Esq. RACINE & ASSOCIATES 1001 Woodward Avenue, Suite 1100 Detroit, MI 48226 Tel: 313-961-8930 Fax: 313-961-8945 E-mail: mracine@racinelaw.us jcupples@racinelaw.us PARAMOUNT LIMITED: Court Wants Combined Plan & Outline by Nov. 18 ----------------------------------------------------------------- The Bankruptcy Court at a hearing on Aug. 3 directed Paramount Limited and its debtor-affiliates to file a Combined Plan and Disclosure Statement by Nov. 18, 2011. The Court will hold a plan confirmation hearing Jan. 4, 2012, at 11:00 a.m. Plan ballots will be due Dec. 23, 2011. Objections to Disclosure and Confirmation of Plan will due Dec. 23. Objections to the Court's Fast Track Order are due Aug. 24, 2011. About Paramount Limited Paramount Limited LLC was an investor in distressed real estate. Paramount Limited and three other affiliates sought Chapter 11 bankruptcy protection (Bankr. E.D. Mich. Lead Case No. 11-59829) on July 21, 2011, after a state court appointed McTevia & Associates as receiver to take over. The receiver was appointed at the behest of the Police and Fire Retirement System of the city of Detroit, one of Paramount's unsecured creditors, with $13.2 million owed. The Retirement System said Paramount was "a classic Ponzi scheme." Judge Thomas J. Tucker presides over the case. Gene R. Kohut of Kohut Management Group, LLC, has been tapped to serve as their Chief Restructuring Officer. Stephen M. Gross, Esq., and Jayson Russ, Esq., at McDonald Hopkins Plc, serve as bankruptcy counsel. Paramount Limited estimated assets of more than $10 million and debt of less than $10 million. The petition was signed by Abner McWhorter, Paramount's managing member. Affiliates that simultaneously sought Chapter 11 protection are Paramount Land Holdings, LLC; Paramount Servicing, LLC; and Paramount Land Holdings, LLC. The receiver is represented by lawyers at Couzens Lansky Fealk Ellis Roeder & Lazar P.C. The Police and Fire Retirement System is represented by Racine & Associates. PENSON WORLDWIDE: Cut by Moody's to 'B2' on Continued Losses ------------------------------------------------------------ Rating and Senior Secured Ratings of Penson Worldwide, Inc. to B2 from B1 and continues to review these ratings for possible further downgrade. RATINGS RATIONALE The rating action reflects Moody's view that Penson's financial flexibility is severely limited as a result of continued operating losses due to industry-wide low trading volumes and the current historic low interest rate environment. In addition, Penson's cash flow leverage has increased significantly over the past several quarters, and the company may find it increasingly difficult to service its debt obligations without an improvement in operating performance and/or strategic asset sales. In explaining the downgrade, Moody's pointed to Penson's recent financial results. For the 2Q2011, the company recorded net revenues of $78 million (4.7% reduction from 1Q2011) and a $48 million pre-tax loss. The pre-tax loss was exacerbated by a $43 million write-down of non-accrual receivables primarily associated with margin loans backed by Retama Development Authority bonds that are secured by a horse racing track and other related real estate. The large size of the Retama margin loan receivable to a former Penson board member raises Moody's concerns regarding the company's governance and risk management controls. The company has announced several strategic initiatives that are designed to reduce operating costs and leverage, and improve profitability. These actions include, (1) exploring the sale of Pension Financial Services Ltd (UK), (2) creating a strategic partnership between Penson Financial Services Australia Pty Ltd or an outright sale of this subsidiary, (3) combining Penson's registered Broker Dealer unit with its US Futures operation to free-up excess regulatory capital, and (4) streamlining the company's operation to reduce operating expenses. This extensive restructuring plan entails significant execution risk. In its continued review for downgrade, Moody's will further examine to what degree Penson can execute a turnaround of its core business and its ability to improve its debt burdened capital structure through strategic asset sales and debt reduction. The last rating action on Penson was on June 30, 2011, when the B1 Corporate Family Rating and Senior Secured rating was placed on review for downgrade. The principal methodology used in this rating was the Global Securities Industry Methodology published in December 2006. Please see the Credit Policy page on www.moodys.com for a copy of this methodology. Penson Worldwide, Inc., is headquartered in Dallas, Texas. PENSON WORLDWIDE: S&P Affirms 'BB-' Counterparty Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Penson Worldwide Inc. to negative from stable. "At the same time, we affirmed our ratings, including the 'BB-' counterparty credit rating," S&P said. "The outlook revision reflects our opinion that continued volatile market volumes and low interest rates have and will hurt the company's profitability metrics and ability to internally generate capital through 2011," said Standard & Poor's credit analyst Vikas Jhaveri. Penson posted net losses for the first two quarters of 2011, after a net loss for 2010. In the most recent quarter, the company posted a net operating loss of $3.5 million (after tax), which was primarily a result of low volumes in the second half of the quarter. Furthermore, the company took a large charge of approximately $26.7 million (after tax) in the quarter, reflecting a write-down of nonaccrual receivables. These receivables have underlying collateral largely consisting of illiquid municipal bonds that Retama Development Corp. (Retama) issued. Although the write-down will not affect the company's regulatory capital and liquidity since these bonds have already been marked down for regulatory purposes, it will decrease the book equity. Furthermore, the company still has approximately $54 million of additional collateral backed by municipal bonds, which it has not written down. The company has announced several strategic initiatives in response to the low market volumes and low interest rates to increase profitability and capital. "Although we believe these initiatives will better position the company through cost savings and increase liquidity, we remain concerned over the company's short-term earnings potential as these steps take form. We will continue to monitor the company's progress toward achieving these goals and how it will ultimately impact profits and capital," S&P said. "Our ratings on Penson reflect the company's strong franchise in providing clearing, execution, securities lending, and other processing services to the global securities industry. The ratings also consider Penson's limited propensity to take on proprietary trading risk, acting primarily as a clearing broker for its clients. The high operating leverage inherent in Penson's business model, high financial leverage, and a risk-management framework that we believe is not yet fully integrated offset the strengths," S&P related. "The negative outlook reflects our expectation that macroeconomic factors will continue to weigh negatively on the company's ability generate positive operating earnings and generate capital. If net losses continue into 2012 and if the company doesn't execute on certain strategic initiatives, resulting in further deteriorating profitability, we could lower the ratings. Alternatively, if the company's strategic initiatives result in improving profitability and increasing capital levels, we could change the outlook back to stable," S&P added. PIERCE COMMERCIAL: 4 Former Employees Indicted for Conspiracy ------------------------------------------------------------- Four former bank employees have been indicted by the grand jury in connection with fraudulent mortgage loans originated at the now defunct Pierce Commercial Bank. The lead defendant in the case, Shawn L. Mr. Portmann, 39, was arrested this morning and will make his initial appearance in U.S. District Court in Tacoma. Mr. Portmann, a former Senior Vice President and loan officer at the Bank, is charged in a 30 count indictment with conspiracy, false statements on loan applications, false statements to HUD, mail fraud, wire fraud, bank embezzlement, and transactional money laundering. Three other defendants are charged in the indictment: Sonja L. Lightfoot, 52, the former Senior Vice President of Residential Lending at Pierce Commercial Bank; Jeanette R. Salsi, 54, a former underwriter at Pierce Commercial Bank; and ADAM S. VOELKER, 38, a former loan processor at Pierce Commercial Bank from January 2005 until July 2006. Pierce Commercial Bank was closed by regulators in November 2010, in part because of mortgage lending losses. "This conspiracy didn't just damage Pierce Commercial Bank. This activity helped pump up the housing bubble that artificially drove up valuations, and now leaves innocent families underwater on their mortgages," said U.S. Attorney Jenny A. Durkan. "Mr. Portmann and his co-conspirators are being held accountable for their criminal conduct that was fueled by greed. I commend the painstaking work by FBI, IRS-CI, HUD-OIG and U.S. Postal Inspection Service in bringing this case." According to the indictment, between 2004 and 2008, Mr. Portmann and the other defendants conspired to submit false documents within various loan documents and applications. They falsified information about the borrowers' qualifications as well as about the value of the properties being purchased. Based on a review of a sample of loans, the co-conspirators caused more than 270 loans that contained false and fraudulent documents and information to be funded by Pierce Commercial Bank representing in excess of $45 million in loan proceeds. More than 100 of these loan files have defaulted, causing in excess of $10 million in loss to Pierce Commercial Bank, secondary investors, and HUD/FHA. The indictment details multiple false statements included in loan documents regarding an applicant's employment, income, and intention to reside in the property. The indictment alleges that Mr. Portmann committed mail fraud affecting a financial institution when sending various documents through the mail to support the scheme. Mr. Portmann and LIGHTFOOT are charged with counts of wire fraud stemming from the sale of these mortgages on the secondary market to financial institutions such as Wells Fargo, Countrywide, IndyMac and J.P. Morgan Chase. Mr. Portmann is charged with bank embezzlement for billing Pierce Commercial Bank for advertising that never occurred. Mr. Portmann set up two companies, The Principles, LLC and WM1, LLC. Using these companies Mr. Portmann billed Pierce Commercial Bank more than $150,000 for advertising that was never provided. Mr. Portmann used some of these funds to purchase a $68,000 BMW. That purchase is the basis for the transactional money laundering count. "This investigation targets an unscrupulous goliath in the mortgage industry-someone who brokered thousands of loans with little regard for the ability of the borrowers to make good on the payments," said Laura M. Laughlin, Special Agent-in-Charge of the FBI Seattle office. "Fraudulent business practices on thousands of loans that Mr. Mr. Portmann and his co-conspirators pushed through unquestionably contributed to the larger housing market decline and the failure of Pierce Commercial Bank." "Mortgage fraud has burdened our economy and caused an urgent reliance on the government, and ultimately the taxpayer, to bolster devastated communities," said Wayne North, Special Agent in Charge of HUD's Office of Inspector General. "HUD OIG is deeply committed to working with our law enforcement partners in the continuing efforts to bring to justice those that seek to enrich themselves at the expense of our economic well-being." "Mortgage fraud is a modern day plague throughout the country that has burdened lenders with bad loans and neighborhoods with abandoned and deteriorating properties," said Marcus Williams, the IRS Special Agent in Charge of the Pacific Northwest. "Washington residents can rest assured knowing that federal law enforcement takes mortgage fraud seriously since it played a major role in almost crippling our nation's banking system just a few years ago." Pierce Commercial Bank received $6.8 million from Troubled Asset Relief Program (TARP) in January 2009. This money was never repaid. False statements in loan applications, mail fraud affecting a financial institution, and bank embezzlement are punishable by up to 30 years in prison and a $1,000,000 fine. Wire fraud is punishable by up to 20 years in prison and a $250,000 fine. Conspiracy is punishable by up to five years in prison and a $250,000 fine. False statements to HUD are punishable by up to two years in prison and a $250,000 fine. Transactional money laundering is punishable by up to 10 years in prison and a $250,000 fine. The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law. The case is being investigated by the FBI, the HUD Office of Inspector General (HUD-OIG), Internal Revenue Service Office of Criminal Investigation (IRS-CI) and the United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorneys Brian Werner and Arlen Storm. This indictment is brought as part of President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. POST STREET: Stutman Treister Approved as Reorganization Counsel ---------------------------------------------------------------- The Hon. Thomas E. Carlson of the U.S. Bankruptcy Court for the Northern District of California authorized Post Street, LLC, to employ Stutman, Treister & Glatt Professional Corporation as reorganization counsel. As reported in the Troubled Company Reporter on July 25, 2011, ST&G is representing the Debtor in the Chapter 11 proceedings. ST&G received $22,610 for prepetition services rendered. The amount came from the $280,000 retainer that ST&G received for services to be rendered and expenses to be incurred in connection with the Debtor's Chapter 11 case. The Debtor does not owe ST&G any amount for prepetition services. As of the Petition Date, $257,989 of the retainer remains in a segregated interest-bearing trust account. Stanley Gribble, the sole member and sole manager of the Debtor advanced the retainer on behalf of the Debtor. To the best of the Debtor's knowledge, ST&G is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Post Street LLC Post Street LLC, based in San Francisco, California, filed for Chapter 11 bankruptcy (Bankr. Case No. 11-32255) on June 15, 2011. Judge Thomas E. Carlson presides over the case. Eric D. Goldberg, Esq., at Stutman, Treister and Glatt, serves as the Debtor's bankruptcy counsel. The Debtor disclosed assets of $3,316 plus unknown amount and liabilities of $55,906,564 as of the Chapter 11 filing. The petition was signed by Stanley W. Gribble, authorized agent. POST STREET: LZSH OK'd to Handle Disputes with PIL/Eurohypo ----------------------------------------------------------- The Hon. Thomas E. Carlson of the U.S. Bankruptcy Court for the Northern District of California authorized Post Street, LLC, to employ Lurie, Zepeda, Schmalz & Hogan, A Professional Corporation, as special litigation counsel. As reported in the Troubled Company Reporter on July 25, 2011, prepetition, LZSH represented and advised the Debtor in connection with the Debtor's disputes with Eurohypo AG, New York Branch Loan to Post Investors LLC, an affiliate of Square Mile Capital Management, LLC, and First American Title Insurance Company, including representing the Debtor, Festival Retail Fund 1 228 Post Street, LP and Stanley Gribble, the Debtor's sole member. The Debtor owns a 34.41% tenant in common interest in a commercial building located at 228-240 Post Street, in San Francisco, California. Festival owns the other 65.59% tenant in common interest in the property. The Debtor wishes to employ Bruce J. Lurie, Andrew W. Zepeda, Lawrence J. Imel and other members, associates, and of-counsel attorneys of LZSH, as the Debtor's special litigation counsel. In a separate motion, the Debtor requested for permission to employ Nossaman LLP as special litigation counsel. During one year prior to the Petition Date, LZSH did not receive any compensation from the Debtor. LZSH received compensation in the aggregate amount of $100,000 from Mr. Gribble for prepetition services rendered. As of the Petition Date, the LZSH holds a claim totaling approximately $165,800 for prepetition services rendered on behalf of the Debtor, Festival and Mr. Gribble. To the best of the Debtor's knowledge, LZSH is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Post Street LLC Post Street LLC, based in San Francisco, California, filed for Chapter 11 bankruptcy (Bankr. Case No. 11-32255) on June 15, 2011. Judge Thomas E. Carlson presides over the case. Eric D. Goldberg, Esq., at Stutman, Treister and Glatt, serves as the Debtor's bankruptcy counsel. Nossaman LLP serves as special litigation counsel. The Debtor disclosed assets of $3,316 plus unknown amount and liabilities of $55,906,564 as of the Chapter 11 filing. The petition was signed by Stanley W. Gribble, authorized agent. POST STREET: Nossaman LLP Approved as Special Litigation Counsel ---------------------------------------------------------------- The Hon. Thomas E. Carlson of the U.S. Bankruptcy Court for the Northern District of California authorized Post Street, LLC, to employ Nossaman LLP as special litigation counsel. As reported in the Troubled Company Reporter on July 25, 2011, prepetition, Nossaman represented and advised the Debtor in connection with its dispute with Eurohypo AG, New York Branch Loan to Post Investors LLC, as local San Francisco counsel to Lurie Zepeda Schmals & Hogan, which is based in Beverly Hills, California. The representation included representing the Debtor in the civil action before the Superior Court of the State of California, County of San Francisco. The Debtor will employ Brendan F. Macaulay, and other members, associates, and of-counsel attorneys of Nossaman. Nossaman's role would be limited to a local counsel role, with LZSH providing great majority of the services in the PIL Eurohypo litigation. In a separate motion, the Debtor requested for permission to employ Lurie, Zepeda, Schmalz & Hogan, A Professional Corporation, as special litigation counsel. Prepetition, Nossaman received compensation in the aggregate amount of $5,000. As of the petition date, the Debtor owes Nossaman $11,688 for prepetition services. To the best of the Debtor's knowledge, Nossaman is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Post Street LLC Post Street LLC, based in San Francisco, California, filed for Chapter 11 bankruptcy (Bankr. Case No. 11-32255) on June 15, 2011. Judge Thomas E. Carlson presides over the case. Eric D. Goldberg, Esq., at Stutman, Treister and Glatt, serves as the Debtor's bankruptcy counsel. The Debtor disclosed assets of $3,316 plus unknown amount and liabilities of $55,906,564 as of the Chapter 11 filing. The petition was signed by Stanley W. Gribble, authorized agent. PRECISION PARTS: Sets Oct. 28 Plan Confirmation Hearing ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Precision Parts International Services Corp., a producer of metal formed components for the auto and aerospace industries, scheduled an Oct. 28 confirmation hearing for approval of the liquidating Chapter 11 plan. Last week, the bankruptcy judge in Delaware approved the disclosure statement giving creditors the information needed to decide how to vote. According to the report, the disclosure statement tells unsecured creditors they can expect to recover between 0.15% and 0.35% on their $103 million in claims. PPI sold the assets in March 2009, producing net proceeds of $16 million. Secured lenders received $9.8 million immediately. Mr. Rochelle relates that the Plan resulted from a settlement with secured lenders where $575,000 was carved out for creditors with lower priorities. In addition to $150,000 cash, unsecured creditors are to receive some recoveries from lawsuits, plus excess cash, if any. About Precision Parts Headquartered in Rochester Hills, Michigan, Precision Parts International Services Corp. -- http://www.precisionparts.com/-- sold products to major north American automotive and non- automotive original equipment manufacturers and Tier 1 and 2 suppliers. PPI and its units operated six manufacturing facilities throughout North America, including a facility in Mexico operated on their behalf by Intermex Manufactura de Chihuahua under a shelter and logistics agreement. The Company and eight of its affiliates filed for Chapter 11 protection on Dec. 12, 2008 (Bankr. D. Del. Lead Case No. 08-13289). Attorneys at Pepper Hamilton LLP serve as the Debtors' bankruptcy counsel. Alvarez & Marsal North America LLC is the Debtor's financial advisors and Kurtzman Carson Consultants LLC is the claims, noticing and balloting agent. PPI Holdings, Inc., estimated assets and debts between $100 million and $500 million in its Chapter 11 petition. Attorneys at Stevens & Lee, P.C., represent the Creditors Committee as counsel. On March 13, 2009, the Bankruptcy Court approved the sale of substantially all of the Debtors' assets to Cerion, LLC. The sale closed on March 26, 2009. The Debtors received net proceeds of approximately $16,031,508 after an agreed upon working capital adjustment. PURSELL HOLDINGS: Has Until Sept. 6 to File Chapter 11 Plan ----------------------------------------------------------- The Hon. Jerry W. Venters of the U.S. Bankruptcy Court for the Western District of Missouri extended the exclusive periods of Pursell Holdings to file and solicit acceptances for the proposed chapter 11 plan until Sept. 6, 2011, and Nov. 7, respectively. According to the Troubled Company Reporter on June 29, 2011, the Debtor anticipates it will file an initial plan prior to July 8, but it will likely require amendments to address treatment for some secured creditors and to address issues not yet resolved in its claims objections. The Debtor sought the extension out of an abundance of caution but remains hopeful it can file a confirmable plan by the initial deadline. About Pursell Holdings Liberty, Missouri-based Pursell Holdings, LLC, filed for Chapter 11 bankruptcy protection (Bankr. W.D. Mo. Case No. 11-40999) on March 10, 2011. Frank Wendt, Esq., Brown & Ruprecht, P.C., serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $12,204,248 in assets and $23,382,741 in debts. Affiliate Damon Pursell Construction Company filed a separate Chapter 11 petition (Bankr. W.D. Mo. Case No. 10-44965) on Sept. 15, 2010. The U.S. Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Pursell Holdings LLC have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest develop among the creditors. PURSELL HOLDINGS: Wants to Use Morris & Janes Cash Collateral ------------------------------------------------------------- Pursell Holdings, LLC, asks the U.S. Bankruptcy Court for the Western District of Missouri to approve the stipulation providing adequate protection to Morrill & Janes Bank, a secured lender to the Debtor. The Debtor, together with Summerfield Development Company, Inc., gave a Promissory Note in the amount of $199,500 to Lender on May 29, 2007. The Debtor also gave a second Promissory Note in the amount of $199,500 to the Lender on May 29, 2007. The Lender has a first and senior lien interest in Lots 123 and 133, Pine Grove Meadows 2nd Plat, a Subdivision of Kansas City, Clay County, Missouri, securing both the Renewal Note and the Debt Modification Agreement and in the rents. The Debtor retains an account with Lender containing a balance of $5,142 and has also segregated the post-petition rents received from the two tenants of the subject properties pursuant to the Assignment of Leases and Rents contained in the Deed of Trust and Lender's demand. The Debtor now holds the total sum of $14,000, representing rent payments from March 10 to July 11. The parties' stipulation provides for the application of those funds and resolves that issues relating to the administrative hold on the Debtor's checking account. Pursuant to the terms and conditions in the Stipulation, Debtor and Lender have agreed to provide for adequate protection of Lender's secured claim in the rents and the real property by, among other things, periodic cash payments to Lender, for so long as there are rents being paid to the Debtor and to permit the continued marketing of the property for nearly five more months without any additional loan servicing required from other assets of the Debtor. The resolution of the issues as set forth in the Stipulation is in the best interests of the Debtor's creditors and estate. Pursell Holdings intends to repay its unsecured creditors from the excess rents generated by its commercial properties. The residential properties are properties that remain in inventory as the Debtor exits the residential development market. The purpose of the stipulation is to provide for an orderly liquidation of these two residential properties while limiting the exposure of the Debtor's stream of income from its commercial properties to the claims of Morrill & Janes Bank. The terms of the Stipulation are favorable to the Debtor and its estate as it permits the Debtor an opportunity to realize upon a small amount of equity while limiting the Debtor's exposure to a deficiency claim. The effective liquidation of this property and limitation of liability is in the best interests of the Debtor and its creditors. About Pursell Holdings Liberty, Missouri-based Pursell Holdings, LLC, filed for Chapter 11 bankruptcy protection (Bankr. W.D. Mo. Case No. 11-40999) on March 10, 2011. Frank Wendt, Esq., Brown & Ruprecht, P.C., serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $12,204,248 in assets and $23,382,741 in debts. Affiliate Damon Pursell Construction Company filed a separate Chapter 11 petition (Bankr. W.D. Mo. Case No. 10-44965) on Sept. 15, 2010. The U.S. Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Pursell Holdings LLC have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest develop among the creditors. QUINCY MEDICAL: Creditors Committee Taps Duane Morris as Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Quincy Medical Center, Inc., et al., asks the U.S. Bankruptcy Court for the District of Massachusetts for permission to retain Duane Morris LLP as its counsel. Duane Morris will, among other things: -- assist and advise the Committee as to its communications to the general creditor body regarding significant matters in the chapter 11 cases; -- represent the Committee at all hearings and other proceedings before the Court; and -- review and analyze motions, applications, orders, statements, operating reports and schedules filed with this Court and advise the Committee as to their propriety, and to the extent deemed appropriate by the Committee support, join or object thereto, as applicable. The hourly rates of Duane Morris' personnel are: Partners $375 - $935 Special Counsel and Counsel $300 - $915 Associates $225 - $510 Paraprofessionals $125 - $335 Duane Morris attorneys expected to have primary responsibility for providing services to the Committee are: Paul D. Moore, partner $695 Jeffrey D. Sternklar, partner $675 Wendell M.N. Harp, associate $350 To the best of the Committee's knowledge, Duane Morris is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Quincy Medical Center Quincy Medical Center is a 196-bed, nonprofit hospital in Quincy, Massachusetts. Quincy Medical Center, Inc. together with two affiliates, sought Chapter 11 protection (Bankr. D. Mass. Lead Case No. 11-16394) on July 1, 2011. John T. Morrier, Esq., at Casner & Edwards, LLP, in Boston, serves as counsel to the Debtors. Navigant Capital Advisor LLC and Navigant Consulting Inc. serve as financial advisors. Epiq Bankruptcy Solutions LLC is the claims, noticing, and balloting agent. Quincy disclosed assets of $73 million and liabilities of $79.4 million. Debt includes $56.4 million owing on secured bonds issued through a state health-care finance agency. There is another $2.5 million secured obligation owing to Boston Medical Center Corp. Accrued liabilities are $18.2 million. On July 12, 2011, the U.S. Trustee for the District of Massachusetts appointed the Official Committee of Unsecured Creditors. QUINCY MEDICAL: Committee Taps Deloitte FAS as Financial Advisor ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Quincy Medical Center, Inc., et al., asks the U.S. Bankruptcy Court for the District of Massachusetts for permission to retain Deloitte Financial Advisory Services LLP as its financial advisor. Deloitte FAS will, among other things: -- assist and advise the Committee in connection with the identification, development, and implementation of strategies related to the Debtors' business plan and other matters, as agreed, relating to the restructuring of the Debtors' business operations; -- assist the Committee in understanding the business and financial impact of various operational, financial, and strategic restructuring alternatives on the Debtors; and -- advise the Committee in connection with its negotiations and due diligence efforts with other parties relating to the sale of the business. Sheila T. Smith, a principal of Deloitte FAS, tells the Court that the hourly rates of Deloitte FAS' personnel are: Partner/Principal/Director $810 - $875 Senior Manager $770 Manager $675 Senior Associate $520 Associate and Junior Staff $310 - $420 Administrative $125 Notwithstanding the foregoing, Deloitte FAS will agree to take a voluntary reduction in its fees so that the blended rate for the services does not exceed $425 per hour. Ms. Smith assures the Court that Deloitte FAS is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Quincy Medical Center Quincy Medical Center is a 196-bed, nonprofit hospital in Quincy, Massachusetts. Quincy Medical Center, Inc. together with two affiliates, sought Chapter 11 protection (Bankr. D. Mass. Lead Case No. 11-16394) on July 1, 2011. John T. Morrier, Esq., at Casner & Edwards, LLP, in Boston, serves as counsel to the Debtors. Navigant Capital Advisor LLC and Navigant Consulting Inc. serve as financial advisors. Epiq Bankruptcy Solutions LLC is the claims, noticing, and balloting agent. Quincy disclosed assets of $73 million and liabilities of $79.4 million. Debt includes $56.4 million owing on secured bonds issued through a state health-care finance agency. There is another $2.5 million secured obligation owing to Boston Medical Center Corp. Accrued liabilities are $18.2 million. On July 12, 2011, the U.S. Trustee for the District of Massachusetts appointed the Official Committee of Unsecured Creditors. REAL MEX: S&P Raises Corporate to 'CC' on Interest Payment ---------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Cypress, Calif.-based Real Mex Restaurants Inc., including the corporate credit rating to 'CC' from 'D'. The rating action reflects Real Mex's announcement that it paid the missed interest payment on its senior secured notes that was due on July 1, 2011 within the grace period. The company also amended its credit agreement and bond indenture to provide for the waivers of certain financial covenant breaches and cross-defaults. The amendment also required the company to submit a proposal to restructure its debt on or prior to Sept. 15, 2011 and to execute the restructuring on or prior to Oct. 31, 2011. "In our view, making the interest payment is only a temporary respite from the company's financial difficulties," said Standard & Poor's credit analyst Andy Sookram. "We forecast free operating cash flow remaining at negligible levels, which significantly tightens liquidity and pressures its ability to service upcoming debt requirements. As a result, we see the company restructuring its balance sheet in a manner that is detrimental to lenders, either filing for protection under Chapter 11 or pursuing a debt exchange to lower its financial burden. The latter would result in a selective default," S&P related. "Real Mex has weak liquidity, in our opinion," added Mr. Sookram. Sources of cash include funds from operations and availability under its revolving credit facility. Uses of cash include capital spending and debt service requirements," S&P said. Key assumptions of S&P'S liquidity assessment include: Sources declined significantly following the $9.2 million interest payment in July 2011. At March 27, 2011, the company had $1.7 million cash on hand and $10.4 million availability under the revolving credit facility. Capital spending could decline to maintenance levels over the next year, to under $6 million. It has significant upcoming debt maturities, with the revolving credit facility due July 2012 and the secured notes in 2013. "The negative rating outlook reflects our opinion that Real Mex is likely to restructure its balance sheet either through a Chapter 11 filing or a debt exchange transaction. If a bankruptcy filing occurs, we would lower the ratings to 'D'. We would consider the completion of any exchange of its debt where lenders receive less than par value to be tantamount to default, and lower the ratings to 'SD'," S&P related. RED DOOR: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: Red Door Property Management LLC 2009 Temple Road Magnolia, MS 39652 Bankruptcy Case No.: 11-02704 Chapter 11 Petition Date: August 4, 2011 Court: United States Bankruptcy Court Southern District of Mississippi (Jackson Divisional Office) Judge: Katharine M. Samson Debtor's Counsel: Craig M. Geno, Esq. HARRIS JERNIGAN & GENO, PLLC 587 Highland Colony Pkwy. P.O. Box 3380 Ridgeland, MS 39157 Tel: (601) 427-0048 Fax: (601) 427-0050 E-mail: cmgeno@hjglawfirm.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Joel C. Groshong, member/owner. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Joel P. Groshong 11-02179 06/20/11 REGIONS FIN'L: S&P Affirms 'BB+/B' Counterparty Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+/B' counterparty credit rating on Regions Financial Corp. (Regions) and its 'BBB-/A-3' rating on Regions's subsidiary Regions Bank. "At the same time, we revised the outlook on both entities to stable from negative," S&P related. "The outlook change mainly results from our revised expectation that Regions will remain profitable throughout 2011 and 2012, as we forecast a lower level of loan-loss provisions aided by gradually improving loan performance," said Standard & Poor's credit analyst Robert Hansen, CFA. "Specifically, Regions's profitability in recent quarters has modestly exceeded our previous expectations, aided by some improvement in loan performance, some gains on securities sales, and most recently a very small level of reserve releases. Loan performance has improved in recent quarters, although the pace of improvement has lagged some peers' in our view. We think these factors and the potential sale of Morgan Keegan increase the likelihood that the company will redeem its preferred shares sold to the Treasury under the Troubled Asset Relief Program. This could benefit both profitability and common equity ratios by our forecast within the next few quarters," S&P said. "We expect the company to be profitable in 2011 and 2012, consistent with recent operating results. We also expect provisions for loan losses to remain relatively high, partly because of depressed commercial real estate (CRE) prices. In the second quarter, the company reported net income of $55 million after preferred dividends, aided by lower provisions for loan losses, reduced adjusted noninterest expenses, and modest gains on securities sales. Furthermore, the company's results in our credit stress-testing methodology were nearly comparable to those for some other large regional banks," S&P said. "The stable outlook reflects our belief that the long-term rating is unlikely to change in the near term. More specifically, the outlook is based partly on our expectation that NPAs will decline gradually and that the tangible common equity ratio will rise. However, if loan performance or capital ratios deteriorate meaningfully from current levels or if the bank does not remain firmly profitable as we expect, we could lower the long-term rating. Conversely, if profitability or loan performance exhibits more rapid and further meaningful improvement over and above our current expectations, then we could raise the long-term rating," S&P related. SALLY HOLDINGS: Reports $70.2 Million Net Earnings in Q3 -------------------------------------------------------- Sally Holdings LLC filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting net earnings of $70.24 million on $836.57 million of net sales for the three months ended June 30, 2011, compared with net earnings of $42.27 million on $742.97 million of net sales for the same period a year ago. The Company also reported net earnings of $162.92 million on $2.43 billion of net sales for the nine months ended June 30, 2011, compared with net earnings of $105.50 million on $2.16 billion of net sales for the same period during the prior year. The Company's balance sheet at June 30, 2011, showed $1.72 billion in total assets, $2.04 billion in total liabilities and a $315.93 million total member's deficit. "We are extremely pleased with our strong financial results in the third quarter," stated Gary Winterhalter, President and Chief Executive Officer. "Both Sally Beauty and BSG had a great quarter with sales growth of 11% and 16%, respectively. Consolidated same store sales grew 5.9% and gross profit margin expanded 50 basis points. Adjusted EBITDA grew 23% to reach $133 million. During the quarter, we reduced our debt balance by $61 million bringing our long-term debt reduction for the fiscal year to $77 million." A full-text copy of the Form 10-Q is available for free at: http://is.gd/ZhZdWn About Sally Holdings Sally Holdings, LLC, based in Denton, Texas, is a leading retailer and distributor of beauty products with over 3,800 stores in 10 countries. Annual revenues are around $2.6 billion. * * * As reported by the TCR on May 31, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Denton, Texas-based Sally Holdings LLC to 'BB' from 'BB-'. "Our 'BB' rating reflects our view that Sally Holdings LLC and its wholly owned subsidiary Sally capital Inc. will maintain their positive momentum with sales growth, positive comparable-store sales, margin improvement, and debt reduction," said Standard & Poor's credit analyst Jayne Ross, "resulting in improving credit protection measures over the next 12 months." It has 'B2' corporate family and probability of default ratings from Moody's. SANMINA-SCI's: Fitch Affirms 'B+' Issuer Default Rating ------------------------------------------------------- Fitch Ratings has affirmed the ratings for Sanmina-SCI Corporation: -- Issuer Default Rating (IDR) at 'B+'; -- Senior secured credit facility at 'BB+/RR1'; -- Senior unsecured notes at 'BB/RR2'; -- Senior subordinated debt at 'B-/RR6'. In addition the Rating Outlook is revised to Positive from Stable. Approximately $1.2 billion of debt is affected by Fitch's action. The Positive Rating Outlook reflects these considerations: -- Sanmina's leverage continues to decline, falling to 3.4 times (x) as of July 2, 2011 from 4.6x as of July 3, 2010. The decline in leverage is attributed to a combination of 10.2% revenue growth, consistent EBITDA margin levels above 5%, and $80 million of debt reductions over the same period (6% of total debt). -- Improvements in key operating metrics reflect incremental success in management's efforts to differentiate Sanmina from larger competitors and target more niche market opportunities. The company has historical strength in complex, low-volume, high-mix manufacturing operations and has right-sized operations and rationalized the cost basis of its manufacturing base to target these opportunities. The ratings may be upgraded if, over the longer term, Sanmina demonstrates: -- Consistent organic revenue growth reflecting success in management's strategy and execution; -- Sustained EBITDA margins in excess of 5% and more consistent free cash flow generation; -- A continued commitment to using excess cash to reduce total debt outstanding Alternatively, returns to prior revenue volatility and below industry-average EBITDA margins would suggest that Sanmina is still struggling to differentiate itself as a value-adding manufacturing partner to successful OEMs, and is still subject to broader industry trends, whereby the Rating Outlook would likely return to stable. Furthermore, a decline in global economic activity over the next 12 months would likely prohibit an accurate assessment of Sanmina's operational progress and limit any potential positive rating action. Rating strengths include: -- Sanmina's position as one of the larger global electronics manufacturing services (EMS) providers with increasing exposure to complex manufacturing services which tend to be more stable and less prone to competitive threats; -- Fitch's belief that the long-term opportunity for revenue growth in non-traditional markets for Sanmina including industrial, clean-tech and medical supplies, should enable the company to grow revenue in excess of global GDP and continue to improve EBITDA margins. Ratings concerns include: -- A difficult competitive environment which has pressured profitability across the industry; -- Management's history of underperformance, prior to the most recent 18-month period, in managing a global manufacturing operation in an industry with minimal room for execution missteps; -- A high degree of vertically integrated operations (components represent 20% of revenue) which, while typically a driver of higher margins in growth periods, presents additional challenges for management execution and higher fixed costs; -- Highly working-capital-intensive business which tends to be a drain on liquidity in periods of growth, although it may provide some measure of liquidity during business downturns; -- Sanmina's downsized operations make it significantly smaller than leading tier one service providers in a market where scale is of significant importance, though this is less of a concern in the higher complexity manufacturing space; -- Modest segment concentration with almost 47% of revenue coming from the networking and communications segment; -- Customer concentration risk with Sanmina's top 10 customers representing roughly 50% of revenue. The ratings reflect these financial expectations: -- Fitch continues to believe that the economic drivers of the EMS sector are maturing, which should lead to greater stability and profitability of leading market participants. The secular trend toward increased outsourcing of manufacturing has and will continue to grow the pie for the EMS sector. -- The global manufacturing base and scale Sanmina offers, though smaller than competitors such as Flextronics International Ltd. and Jabil Circuit Inc., has been increasingly important to servicing global OEM customers, including the ability to manufacture product in or near the geographic end-market. No longer is the EMS industry driven largely by lowest labor cost but rather the services and total cost behind end-to-end product fulfillment. -- Sanmina's revenue grew 10.2% in the latest 12 month (LTM)period, overcoming slowness in certain segments, including defense and enterprise communications. Fitch expects revenue growth in the mid-single digits in fiscal 2011 (end September), and roughly 2x global GDP growth thereafter fueled by increased outsourcing of manufacturing as well as expanding customer relationships and new customer program wins. Macro economic weakness and the above-average volatility of Sanmina's end-market demand could potentially offset higher growth prospects. -- Sanmina's EBITDA margins, which historically have been below peer levels and subject to greater volatility, have equaled or exceed the market average for the past four quarters. This constitutes the highest levels achieved by the company in over five years. Fitch expects EBITDA margins to remain in the low 5% range with potential upside from increased activity in the higher margin industrial, defense and medical segment, as well as improved execution in the components business. However, confidence in profitability improvements is tempered by a history of below-average margin levels and significant industry price competition which has typically capped profitability near current levels. Conversely, Fitch would expect margins to fall back to roughly 3.5% in a cyclical downturn. -- Fitch expects leverage (total debt to total operating EBITDA) to remain near the current level of 3.4x in the near-to-medium term absent further debt reductions. Interest coverage (EBITDA to total interest expense) is expected increase to 3.4x in fiscal 2011. Funds from operations less capital spending and dividends are expected to represent 10% of total debt at the end of fiscal 2011. -- Fitch expects modestly positive free cash flow in 2011 given the slowing working capital requirements associated with more moderate revenue growth. Sanmina has historically underperformed its peers in cash flow generation. Historically, funds from operations (FFO) minus capital expenditures and dividends as a percent of revenue has averaged roughly 25 basis points, leaving minimal excess cash to absorb working capital needs associated with revenue growth. Fitch believes that the ability to produce free cash flow through most of the business cycle would be further evidence of a change in the overall industry dynamics and supportive of positive rating action. -- Uses of cash flow and excess cash will principally go to fund organic growth, working capital needs, acquisitions, and continued modest debt reduction as indicated by management. The company's next maturity is not until 2014 when $257 million senior secured floating-rate notes are due. Fitch does not expect any substantial acquisition activity that would result in a material leverage event. As of July 2, 2011, liquidity was solid with $582 million in cash, $165 million available under a $235 million senior secured revolving credit facility which expires in November 2013, and $24.6 million of availability from Chinese and Indian subsidiaries' credit facilities which have a combined capacity of $85 million. The reduced availability under the $235 million revolver at the end of the most recent quarter reflects the borrowing base calculation rather than borrowings under the facility. Sanmina recently refinanced $500 million in senior subordinated debt with $500 million in senior unsecured debt due 2019. The company refunded $80 million on senior subordinated debt with cash on hand. Total debt, as of July 2, 2011 was $1.2 billion and consists primarily of: -- $257 million of senior unsecured floating-rate notes due June 2014; -- $500 million of 7% senior unsecured notes due June 2019; -- $400 million 8.125% senior subordinated notes due March 2016. The Recovery Ratings (RRs) for Sanmina reflect Fitch's recovery expectations under a distressed scenario, as well as Fitch's expectation that the enterprise value of Sanmina, and hence recovery rates for its creditors, will be maximized in a liquidation scenario rather than as a going concern. In estimating liquidation, Fitch applies advance rates of 80%, 20%, and 10% to Sanmina's accounts receivables, inventories, and property, plant, and equipment balances, respectively. Fitch arrives at an adjusted reorganization value of $806 million after subtracting administrative claims. As is standard with Fitch's recovery analysis, the revolver is fully drawn and cash balances fully depleted to reflect a stress event. The 'RR1' for SANM's secured bank facility reflects Fitch's belief that 91%-100% recovery is realistic. The 'RR2' for the senior unsecured notes reflects Fitch's belief that 71%-90% recovery is realistic. The 'RR6' for SANM's senior subordinated notes reflect Fitch's belief that 0%- 10% recovery is realistic. SEQUENOM INC: Incurs $20.9 Million Net Loss in Second Quarter ------------------------------------------------------------- Sequenom, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on form 10-Q reporting a net loss of $20.93 million on $13.33 million of total revenues for the three months ended June 30, 2011, compared with a net loss of $59.13 million on $11.41 million of total revenues for the same period a year ago. The Company also reported a net loss of $33.61 million on $26.84 million of total revenues for the six months ended June 30, 2011, compared with a net loss of $76.08 million on $22.02 million of total revenues for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $156.87 million in total assets, $30.97 million in total liabilities and $125.90 million in total stockholders' equity. "Results for the quarter were in line with our expectations, as we met our goals of continued revenue growth and effective cost controls through the first half of 2011. We continue to move forward on the path toward additional product commercialization," said Paul V. Maier, Sequenom's CFO. "Once again our conservative approach to cash management allowed us to maintain our strong cash balances as we head into the second half and the implementation of our molecular diagnostics commercialization strategy and further development of our infrastructure to expand that business unit." A full-text copy of the Form 10-Q is available for free at: http://is.gd/HlNKL2 About Sequenom Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. Sequenom reported a net loss of $120.85 million on $47.45 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $71.01 million on $37.86 million of total revenue during the prior year. Ernst & Young LLP of San Diego, California, in its audit report attached to the 2010 financial statements, did not include a going concern qualification for Sequenom. E&Y, in its report on the 2009 results, expressed substantial doubt against Sequenom's ability as a going concern, noting that the Company "has incurred recurring operating losses and does not have sufficient working capital to fund operations through 2010." SILVERSUN TECHNOLOGIES: Reports $2.7-Mil. Net Income in 2nd Qtr. ---------------------------------------------------------------- SilverSun Technologies, Inc., formerly known as Trey Resources, Inc., filed its quarterly report on Form 10-Q, reporting net income of $2.35 million on $2.69 million of revenues for the three months ended June 30, 2011, compared with a net loss of $751,608 on $1.79 million of revenues for the same period last year. Total other income for the three months ended June 30, 2011, was $2.27 million, as compared to other expense of $476,866 for the three months ended June 30, 2010. This change is primarily attributed to the gain on the extinguishment of debt and derivative liability of $2.23 million as well as the market value change of derivatives related to price protections on conversion features associated with debt of $99,247. The Company had net income of $2.73 million on $5.45 million of revenues for the first six months of 2011, compared with a net loss of $328,313 on $3.62 million of revenues for the first six months of 2010. The Company's balance sheet at June 30, 2011, showed $1.68 million in total assets, $2.47 million in total liabilities, all current, and a stockholders' deficit of $790,392. As reported in the TCR on April 2, 2011, Friedman LLP, in East Hanover, NJ, expressed substantial doubt about Trey Resources, Inc.'s ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has incurred substantial accumulated deficits and operating losses, and at Dec. 31, 2010, has a working capital deficiency of approximately $5.1 million. A copy of the Form 10-Q is available at http://is.gd/mgab1c Livingston, N.J.-based SilverSun Technologies, Inc., formerly known as Trey Resources, Inc., focuses on the business software and information technology consulting market, and is looking to acquire other companies in this industry. SWK Technologies, Inc., the Company's subsidiary and the surviving company from the acquisition and merger with SWK, Inc., is a New Jersey-based information technology company, value added reseller, and master developer of licensed accounting and financial software published by Sage Software. SWK Technologies also publishes its own proprietary supply-chain software, the Electronic Data Interchange (EDI) solution "MAPADOC." SWK Technologies sells services and products to various end users, manufacturers, wholesalers and distribution industry clients located throughout the United States, along with network services provided by the Company. SOUTH POINTE: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: South Pointe Apartments LLC c/o C & G Investors, Inc. P.O. Box 970978 Miami, FL 33197 Bankruptcy Case No.: 11-31959 Chapter 11 Petition Date: August 4, 2011 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Martin L. Hannan, Esq MARTIN HANNAN, P.A. 9370 SW 72 St # A266 Miami, FL 33173 Tel: (305) 279-7280 Fax: (305) 279-7145 E-mail: arhannanlaw@aol.com Scheduled Assets: $4,002,001 Scheduled Debts: $20,031,817 A list of the Company's 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flsb11-31959.pdf The petition was signed by Eugene Sims, as president of C & G Investors, Inc. SITEBRAND INC: Obtains Revocation of Cease Trade Orders ------------------------------------------------------- Sitebrand Inc. disclosed that effective August 5, 2011 and August 8, 2011 the Ontario Securities Commission and British Columbia Securities Commission, respectively, have issued orders revoking the cease trade orders that were issued on April 15, 2011 and April 7, 2011, respectively. The cease trade orders were issued as a result of the Company's failure to file on a timely basis its audited annual financial for the year ended November 30, 2010 along with related management's discussion and analysis and the applicable officer's certifications (the "Annual Filings"). Subsequently, the Company also failed to file on a timely basis its interim financial statements for the period ended February 28, 2011 along with the related management's discussion and analysis and the applicable officer's certifications (the "Interim Filings"). The Company filed the Annual Filings on June 3, 2011 and the Interim Filings on June 14, 2011. The Company also confirmed that it filed restated management's discussion and analysis for its first quarter ended February 28, 2011 on July 15, 2011, held its annual and special meeting of shareholders on June 30, 2011 and filed its interim financial statements for the period ended May 31, 2011 along with the related management's discussion and analysis and the applicable officer's certifications. The Company's first quarter MD&A was re-filed in order to expand upon the Company's disclosure with respect to its future plans for financing and operations and its IFRS changeover plans. The Company's shareholders approved all proposed resolutions at the AGM, including the re-election of John Eckert, Bruce Linton and Peter Evans as directors, the consolidation of the Company's common shares on a 5 to 1 basis and the change of the Company's name to Marchwell Ventures Ltd. The Company recorded no revenue for the three month period ended May 31, 2011. This compares to $483,576 in the same period in the prior fiscal year. This was due to bankruptcy of the Company's revenue generating subsidiary, SiteBrand.com Inc. during the first quarter of 2011. The net loss for the three months ended May 31, 2011 was ($73,473), as compared to a loss of ($29,161) for the same period in the prior fiscal year. The net gain for the six months ended May 31, 2011, was $798,903, as compared to a loss of ($141,325) for the same period in the prior year. Of the net gain this year, $943,322 was due to a gain on the net write off of assets and liabilities of Sitebrand.com as consolidated with Sitebrand Inc.'s loss on its investment and loans with its subsidiary. Subject to regulatory approval, the Company intends to proceed with its plans to consolidate its common shares, to change its name, and to complete a private placement raising gross proceeds of approximately $1 million by the issuance of subscription receipts for units at a price of $0.01125 per unit (on a pre consolidation basis or $0.05625 on a post consolidation basis). Each unit will be comprised of one common share and a warrant to purchase one additional common share at an exercise price of $0.10 for a period of 2 years following the satisfaction of certain release conditions. About SiteBrand Inc. Based in Quebec, Canada, Sitebrand Inc. (CVE:SIB) -- http://www.sitebrand.com/-- is engaged in the business of online marketing solutions. The Company's Sitebrand Segment&Serve personalization platform is designed to solve challenges faced by online retailers and multichannel vendors: the need to convert a higher percentage of their Web traffic into online or in-store buyers and to build deeper, more profitable long-term customer relationships. The Company uses real-time technology to assess visitor information: past transactions, key word searches and geographic location to recognize patterns in visitor behavior and to predict, in one or two clicks, why a visitor has come to a particular site and what type of message would interest that visitor. Utilizing Sitebrand's Segment&Serve solution, Sitebrand can personalize any of the online content presented to the visitor regardless of the medium. This includes Websites, e-mail, landing pages, search engine marketing, affiliate marketing, banner advertising and kiosks. STATION CASINOS: S&P Assigns 'B' Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Las Vegas-based Station Casinos LLC. The rating outlook is stable. "At the same time, we assigned Station Casinos LLC's senior secured credit facilities (the Propco debt) our 'B' issue-level rating (at the same level as the 'B' corporate credit rating) with a recovery rating of '4', indicating our expectation of average (30% to 50%) recovery for lenders in the event of a default. The Propco debt comprises a $125 million revolving credit facility, a $200 million term loan B-1, and a $750 million term loan B-2, all of which mature June 17, 2016 (though the company may request extensions of two additional one-year periods), and a $625 million term loan B-3, which matures June 17, 2018," S&P related. "In addition, we assigned subsidiary NP Opco LLC's (Opco) $25 million revolving credit facility our 'BB-' issue level rating (two notches higher than the 'B' corporate credit rating on parent company Station Casinos LLC) with a recovery rating of '1', indicating our expectation for very high (90% to 100%) recovery for lenders in the event of a default. The revolving credit facility has first-out priority in application of proceeds from collateral. We also assigned Opco's $435.7 million term loan our 'B+' issue level rating (one notch higher than the corporate credit rating), with a recovery rating of '2', indicating our expectation for substantial (70% to 90%) recovery for lenders in the event of a default. The initial maturity date of the Opco credit facilities is June 17, 2016, but the company may request extensions of two additional one-year periods," S&P related. "We also assigned subsidiary Station GVR Acquisition LLC's (GVR) $225 million first-lien credit facility our 'BB-' issue level rating (two notches higher than the 'B' corporate credit rating on parent company Station) with a recovery rating of '1', indicating our expectation for very high (90% to 100%) recovery for lenders in the event of a default. The first-lien credit facilities comprise a $10 million revolving credit facility and a $215 million first-lien term loan, both due June 17, 2016. We also assigned GVR's $90 million second-lien term loan due June 17, 2017 our 'B' issue-level rating and a recovery rating of '4', indicating our expectation of average (30% to 50%) recovery for lenders in the event of a default," S&P said. "The 'B' corporate credit rating reflects our view of the credit quality of the consolidated Station portfolio of properties and assets, following its emergence from bankruptcy, despite the fact that different operating subsidiaries secure different pieces of the capital structure," said Standard & Poor's credit analyst Melissa Long. "Given our perception of the strategic relationships between these entities and their common management and ownership, we expect management will make decisions regarding operating and financial strategies with a view toward the collective group of companies. We believe that if a payment default were to occur on the Propco debt or at either of its subsidiaries, management would consider alternatives regarding the capital structure of the consolidated group, which would likely include a comprehensive restructuring or a bankruptcy filing." STORAGE CENTER: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: The Storage Center, LLC 1387 E. Pine Log Road Aiken, SC 29803 Bankruptcy Case No.: 11-04923 Chapter 11 Petition Date: August 5, 2011 Court: United States Bankruptcy Court District of South Carolina (Columbia) Judge: David R. Duncan Debtor's Counsel: Jane H. Downey, Esq. MOORE TAYLOR & THOMAS P.A. 1700 Sunset Blvd P.O. Box 5709 West Columbia, SC 29171 Tel: (803) 796-9160 E-mail: jane@mttlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/scb11-04923.pdf The petition was signed by William M. Nowlin, managing member. STORY BUILDING: Disclosure Statement Hearing Continued to Oct. 20 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, approved a stipulation continuing the hearing on the approval of the disclosure statement explaining the reorganization plan of Story Building LLC to October 20, 2011, at 10:30 a.m. The stipulation was entered into between Story Building LLC and Wells Fargo Bank, N.A., as trustee for the registered holders of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2004-C1. The Plan The Debtor will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. As reported in the Troubled Company Reporter on Jan. 7, 2011, according to the Disclosure Statement, the Plan provides for the resolution of all claims against the estate. Plan distributions will be funded primarily from operations of the Story Building property, and the new value contribution. The Debtor's interest holder will provide $50,000 on the effective date sufficient cash to cover payments due on the effective date of the Plan. Under the Plan, holders of Class 4 general non-insider unsecured claims will receive, among other things: (i) a pro rata share of 25% of net operating income for the calendar years 2012 to 2017, derived from the rents generated from the Story Building property; (ii) one final payment of the balance of the allowed claim and all accrued interest in full on or before Dec. 31, 2018; and (iii) in the event that the property is sold, a pro rata share of up to 100% of the net proceeds, if any, after payment of all costs of sale, etc. Copies of the Disclosure Statement is available for free at http://bankrupt.com/misc/StoryBuilding_DS2.pdf The Debtor is represented by: Sandford L. Frey, Esq. Stuart I. Koenig, Esq. CREIM MACIAS KOENIG & FREY LLP 633 W. Fifth Street, 51st Floor Los Angeles, CA 90071 Tel: (213) 614-1944 Fax: (213) 614-1961 E-mail: sfrey@cmkllp.com skoenig@cmkllp.com Wells Fargo Bank is represented by: H. Mark Mersel, Esq. Sheri M. Kanesaka, Esq. Bryan Cave LLP 3161 Michelson Drive, Suite 1500 Irvine, California 92612 Phone: (949) 223-7000 Fax: (949) 223-7100 E-mail: mark.mersel@bryancave.com About Story Building LLC Story Building LLC is a real estate management company based in Irvine, California. The Company owns and operates a 13-story historical building located in Downtown, Los Angeles, known as the Walter P. Story Building, located at 610 S. Broadway. The building is primarily utilized as a jewelry plaza. Story Building LLC filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 10-16614) on May 17, 2010. Sandford Frey, Esq., who has an office in Los Angeles, California, represents the Debtor in its restructuring effort. The Debtor disclosed $19,421,024 in assets and $16,500,721 in liabilities as of the Chapter 11 filing. There was no official committee of unsecured creditors appointed in the Debtor's case. TALON INTERNATIONAL: To Allow Issuance of Uncertificated Shares --------------------------------------------------------------- The Board of Directors of Talon International, Inc., amended Article VII of the Company's Bylaws, effective as of Aug. 2, 2011, to allow for the issuance of uncertificated shares. By being able to issue uncertificated shares, the Company may now participate in the Direct Registration System, which is currently administered by The Depository Trust Company. The Direct Registration System allows investors to have securities registered in their names without the issuance of physical certificates and allows investors to electronically transfer securities to broker-dealers in order to effect transactions without the risks and delays associated with transferring physical certificates. The amendment to the Bylaws also provides that each registered stockholder will be entitled to a stock certificate upon request to the Company. A full-text copy of the Amended Bylaws is available for free at: http://is.gd/bYy29y About Talon International Woodland Hills, Calif.-based Talon International, Inc. (OTC BB: TALN) -- http://www.talonzippers.com/-- is a global supplier of apparel fasteners, trim and interlining products to manufacturers of fashion apparel, specialty retailers, mass merchandisers, brand licensees and major retailers. Talon manufactures and distributes zippers and other fasteners under its Talon(R) brand, known as the original American zipper invented in 1893. Talon also designs, manufactures, engineers, and distributes apparel trim products and specialty waistbands under its trademark names, Talon, Tag-It and TekFit, to more than 60 apparel brands and manufacturers including Wal-Mart, Kohl's, J.C. Penney, Victoria's Secret, Tom Tailor, Abercrombie and Fitch, Polo Ralph Lauren, Phillips-Van Heusen, Reebok and Juicy Couture. Talon has offices and facilities in the United States, United Kingdom, Hong Kong, China, and Bangladesh. The Company reported a net loss of $1.46 million on $41.46 million of net sales for the year ended Dec. 31, 2010, compared with a net loss of $2.69 million on $38.67 million of net sales during the prior year. The Company's balance sheet at March 31, 2011, showed $15.24 million in total assets, $10.35 million in total liabilities, $18.48 million in Series B convertible preferred stock and a $13.59 million in total stockholders' deficit. TAYLOR BEAN: FDIC Seeks Dismissal of $1.75BB BofA Lawsuit --------------------------------------------------------- Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy Review, reports that The Federal Deposit Insurance Corp. is asking a federal judge to dismiss Bank of America Corp.'s lawsuit seeking to recover $1.75 billion in losses suffered by investors in Ocala Funding LLC, a mortgage-financing vehicle established by Taylor, Bean & Whitaker Mortgage Corp. The FDIC told the federal judge Friday that BofA doesn't have the authority to sue it over losses incurred by the Taylor Bean subsidiary. BofA filed the lawsuit last fall in Washington. DBR relates that BofA, which served as the trustee for notes issued by Ocala and sold to investors, asked a federal judge to allow it to pursue the FDIC, the receiver for Colonial Bank and a smaller affiliate, Platinum Community Bank. The bank's lawyers said Colonial and Platinum "actively participated in the fraud and contributed directly" to $1.75 billion in losses at Ocala. Although the banks are under the control of the FDIC, they remain on the hook for Ocala's losses. BofA sued after FDIC had earlier rejected its claim against the Colonial receivership to recover losses stemming from the fraud at Taylor Bean and the bank. DBR notes a BofA spokesman couldn't immediately be reached to comment on the FDIC filing. About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala- based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009. Taylor Bean filed the Chapter 11 petition three weeks after federal investigators searched its offices. The day following the search, the Federal Housing Administration, Ginnie Mae and Freddie Mac prohibited the company from issuing new mortgages and terminated servicing rights. Taylor Bean estimated more than $1 billion in both assets and liabilities in its bankruptcy petition. Jeffrey W. Kelly, Esq., and J. David Dantzler, Jr., Esq., at Troutman Sanders LLP, in Atlanta, Ga., and Russel M. Blain, Esq., and Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Fla., represent the Debtors. Paul Steven Singerman, Esq., and Arthur J. Spector, Esq., at Berger Singerman PA, in Miami, Fla., represent the Committee. BMC Group, Inc., serves as the claims and noticing agent. TEN X: Foster and Smith Approved to Handle Reorganization Case -------------------------------------------------------------- The Hon. John D. Squires of the U.S. Bankruptcy Court for the Northern District of Illinois authorized Ten X Capital Partners III, LLC (Series B) to employ Foster and Smith to represent the Debtor in the Chapter 11 proceedings. As reported in the Troubled Company Reporter on July 25, 2011, prepetition, Foster and Smith received $15,000 in connection with the services rendered. A total of $3,209 of the retainer was applied against the fees and expenses incurred leaving a balance of $11,791. To the best of the Debtor's knowledge, Foster and Smith is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Ten X Capital Partners Ten X Capital Partners III, LLC (Series B) operates an industrial real property located at 601 W. Polk Street, Chicago, Illinois, as a telecom hotel and storage facility. Ten X Capital Partners III, LLC (Series B) filed a voluntary Chapter 11 petition (Bankr. N.D. Ill. Case No. 11-27294) on June 30, 2011. Judge John H. Squires presides over the case. The Debtor is represented by Chester H. Foster, Jr., Esq., at Foster & Smith. In its petition, the Debtor estimated $10 million to $50 million in assets, and $1 million to $10 million in debts. The petition was signed by John W. Branch, manager of RM Advisors, LLC. TERRESTAR CORP: DIP Loan Maturity Now Extended Until Sept. 30 ------------------------------------------------------------- The Hon. Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York approved the eighth amendment to TerreStar Networks, Inc., et al.'s Debtor-in-Possession Loan Agreement with EchoStar Corporation. Pursuant to the eighth amendment, the loan's maturity date is now Sept. 30, 2011. The aggregate amount of the commitment on the eighth amendment effective date is $90,000,000 A full-text copy of the order and the Eight Amendment to the DIP agreement is available for free at http://bankrupt.com/misc/TerrestarCorp_loanagreement_order.pdf About TerreStar Corp. and TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which filed on Oct. 19, 2010. The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC's case is jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11-10612 (SHL). The seven Debtor entities who sought joint administration with TSC are TerreStar New York Inc., Motient Communications Inc., Motient Holdings Inc., Motient License Inc., Motient Services Inc., Motient Ventures Holdings Inc., and MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks -- TSN -- the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100 million to $500million in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the Committee's financial advisor. TERRESTAR CORP: Committee Wants $5 Million Loan Tagged as Equity ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of TerreStar Networks, Inc., et al., asks the U.S. Bankruptcy Court for the Southern District of New York to: i) re-characterize the $5 million August 2010 Advance by Harbinger from secured debt to equity; or in the alternative ii) subordinate the $5 million August 2010 advance by Harbinger to the claims of general unsecured creditors of the Debtors, and of TSN in particular. Harbinger is consist of U.S. Bank National Association, in its capacity as collateral agent under the purchase money credit agreement, Harbinger Capital Partners, Harbinger Capital Management, Harbinger Capital Partners Fund I, Ltd., Harbinger Capital Partners special situation Fund, L.P., Credit Distressed Blue Blue Line Master Fund I, LTD., and their affiliates. Harbinger's successors in interest are MAST Credit Opportunities I Master Fund Limited and its affiliates, Cohanzick High Yield International Master Fund, Ltd., et al., According to the Committee, at the time when the Debtors were severely undercapitalized, Harbinger provided an additional $5 million to the Debtors as further secured advance under the Feb. 5, 2008 purchase money credit agreement among Terrestar Networks Inc., as borrower, and Harbinger and EchoStar, as original lenders. The reality, however, is that the $5 million actually a further equity investment in TSN by Harbinger. The $5 million advanced by Harbinger was funded at a time when Harbinger was one of the most significant holders of the Debtors' stock and outstanding debt and Harbinger's investment was subject to substantial risk due to the Debtors' liquidity constraints. The Committee is represented by: Scott L. Hazan, Esq. David M. Posner, Esq. Stanley L. Lane, Jr., Esq. OTTERBOURG, STEINDLER, HOUSTON & ROSEN, P.C. 230 Park Avenue New York, NY 10169 Tel: (212) 661-9100 Fax: (212) 682-6104 About TerreStar Corp. and TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which filed on Oct. 19, 2010. The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC's case is jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11-10612 (SHL). The seven Debtor entities who sought joint administration with TSC are TerreStar New York Inc., Motient Communications Inc., Motient Holdings Inc., Motient License Inc., Motient Services Inc., Motient Ventures Holdings Inc., and MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks -- TSN -- the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100 million to $500million in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the Committee's financial advisor. THERMOPYLAE LLC: Court Rules on Dispute With Landlord ----------------------------------------------------- Rockville Pike Joint Venture, L.P., seeks preliminary injunction to enjoin Thermopylae LLC and The Harbor Bank of Maryland from removing certain kitchen equipment and improvements from the space Rockville leased to the Debtor. The parties dispute whether Rockville or the Debtor owns the equipment and improvements and, if Rockville owns it, whether the Bank's security interest trumps Rockville's ownership rights. In a Aug. 5, 2011 Memorandum of Decision, a copy of which is available at http://is.gd/4KKwXWfrom Leagle.com, Bankruptcy Judge Thomas J. Catliota denied Rockville's motion with respect to the Equipment, because the Lease provides that the Debtor was entitled to remove it upon expiration of the Lease. With respect to the improvements, the Court held that Rockville's right to claim ownership of it arose long after the Bank's security interest attached. The Court accordingly granted the motion with respect to the improvements only on a limited basis, and lifted the injunction on the improvements upon a showing by the Bank that it can comply with Section 12.03 of the Lease to repair and restore the Premises upon removal. The case is Rockville Pike Joint Venture L.P., v. Thermopylae LLC; The Harbor Bank of Maryland, Adv. Proc. No. 11-00016 (Bankr. D. Md.). Thermopylae LLC operated the Hollywood Diner at 895 Rockville Pike, in Rockville, Maryland, until it closed on Jan. 11, 2011. Thermopylae filed for Chapter 11 bankruptcy protection (Bankr. D. Md., Case No. 10-32452) on Sept. 30, 2010. Steven H. Greenfeld, Esq., serves as its bankruptcy counsel. The Company estimated under $50,000 in assets and $500,001 to $1 million in debts in its Chapter 11 petition. It listed Harbor Bank of Maryland as its largest unsecured creditor, owed $461,873. THORNBURG MORTGAGE: Litigation v. Luxury Mortgage Stayed -------------------------------------------------------- Bankruptcy Judge Duncan W. Keir signed off on a stipulation and consent order temporarily staying litigation commenced by Joel I. Sher, Chapter 11 Trustee for TMST Home Loans, Inc. f/k/a Thornburg Mortgage Home Loans, Inc., against Luxury Mortgage Corp. The Chapter 11 Trustee filed the Complaint for Damages, Indemnification and Specific Performance on Nov. 24, 2010. Luxury filed a Motion to Dismiss, or in the Alternative, Change Venue. On July 25, 2011, the parties and their counsel met to discuss a potential settlement. To avoid the extensive costs of litigation while the parties take certain actions as are necessary outside of the Adversary Proceeding to foster a possible settlement of the Adversary Proceeding, the parties agreed to a temporary stay of litigation, followed by a streamlined process for resolution of the pending motions, and a schedule for the completion of discovery in the event the parties are unable to consummate a settlement. Pursuant to the Stipulation, Luxury agreed to withdraw its Motion to Dismiss with prejudice. All pending motions, including, but not limited to, the Chapter 11 Trustee's Motion for Summary Judgment, are stayed through and including Dec. 31, 2011. All currently propounded discovery is stayed through and including Nov. 30, 2011. The discovery deadline is extended from Aug. 16, 2011 through and including Dec. 31, 2011, to afford the parties an opportunity to complete discovery, including the remaining depositions that may need to be noted, in the event the parties are unable to resolve the Adversary Proceeding before Nov. 30, 2011. The Chapter 11 Trustee will take actions to: (i) prosecute TMHL's foreclosure of the property located at 982 Noyack Road, Southampton, New York, in the case styled Thornburg Mortgage v. Visilios Gregoriadis (Case No. 029712-2009) pending in the Supreme Court of Suffolk County, New York; (ii) continue to assert and advance TMHL's rights and interests in the foreclosure action filed in the Supreme Court of Suffolk County, New York styled E*Trade Bank v. Donald MacPherson, (Case No. 033098-2007) whereby E*Trade has asserted a first priority mortgage on the Property; and (iii) take such actions as are appropriate for the Trustee, in his sole discretion, to assert and advance the Trustee's and TMHL's rights with respect to the Property outside of the Luxury Adversary Proceeding, including, but not limited to, asserting the Trustee's and TMHL's right and claims against other parties involved in the sale of the Property. Without admitting any liability or waiving any of its defenses, Luxury will contribute $10,000 to the Trustee on Aug. 30, 2011, Sept. 30, 2011, and Oct. 30, 2011 for a total of $30,000, to defray the costs of the TMHL bankruptcy estate to maintain the Property. The case is Joel I. Sher, Chapter 11 Trustee for TMST Home Loans, Inc. f/k/a Thornburg Mortgage Home Loans, Inc., v. Luxury Mortgage Corp., Adv. Proc. No. 10-0898 (Bankr. D. Md.). A copy of the Stipulation, signed by the Court on Aug. 5, 2011, is available at http://is.gd/Lwj8Zcfrom Leagle.com. About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- was a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originated, acquired, and retained investments in adjustable and variable rate mortgage assets. Its ARM assets comprised of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage and its four affiliates filed for Chapter 11 on May 1, 2009 (Bankr. D. Md. Lead Case No. 09-17787). Thornburg changed its name to TMST, Inc. Judge Duncan W. Keir is handling the case. The Debtors tapped David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, is tapped as counsel, and Orrick, Herrington & Sutcliffe LLP as special counsel. The Debtors hired Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., as investment banker and financial advisor. Protiviti Inc. was engaged for financial advisory services. The Debtors also hired KPMG LLP as tax consultant and Epiq Systems, Inc., as claims and noticing agent. Thornburg disclosed total assets of $24.4 billion and total debts of $24.7 billion, as of Jan. 31, 2009. On Oct. 28, 2009, the Court approved the appointment of Joel I. Sher as the Chapter 11 Trustee for the Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging Strategies, Inc. TREY RESOURCES: Reports $2.3 Million Net Income in June 30 Qtr. --------------------------------------------------------------- Silversun Technologies, Inc., formerly known as Trey Resources, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting net income of $2.35 million on $2.69 million of total net revenues for the three months ended June 30, 2011, compared with a net loss of $789,416 on $1.78 million of total net revenues for the same period during the prior year. The Company also reported net income of $2.82 million on $5.45 million of total net revenues for the six months ended June 30, 2011, compared with a net loss of $387,426 on $3.61 million of total net revenues for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $1.68 million in total assets, $2.47 million in total liabilities, all current, and a $790,392 total stockholders' deficit. Mark Meller, chief executive officer of SilverSun Technologies, stated, "This has been an important quarter for our Company. We have reduced our total liabilities by $3,661,402, from $6,133,472 on March 30, 2011, to $2,472,070 on June 30, 2011, a reduction of 59.7%. We have recapitalized the Company, and we now have 4,447,028 shares of common stock outstanding, versus over 8 billion shares of common stock outstanding as of March 30, 2011." A full-text copy of the Form 10-Q is available for free at: http://is.gd/mgab1c About Trey Resources Livingston, N.J.-based Trey Resources, Inc. operates as a business consultant, and value-added reseller and developer of financial accounting software in the United States. The Company reported a net loss of $568,505 on $7.48 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $1.50 million on $7.41 million of total revenue during the prior year. Friedman LLP, in East Hanover, NJ, expressed substantial doubt about the Company's ability to continue as a going concern. The Company's financial statements for the year ended Dec. 31, 2010 have been prepared assuming the Company will continue as a going concern. The Company has incurred substantial accumulated deficits and operating losses, and at Dec. 31, 2010, has a working capital deficiency of approximately $5.1 million. USEC INC: Files Form 10-Q; Incurs $21.2-Mil. Q2 Net Loss -------------------------------------------------------- USEC Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on form 10-Q reporting a net loss of $21.20 million on $454.40 million of total revenue for the three months ended June 30, 2011, compared with net income of $7.20 million on $459.70 million of total revenue for the same period during the prior year. The Company also reported a net loss of $37.80 million on $834.90 million of total revenue for the six months ended June 30, 2011, compared with a net loss of $2.50 million on $804.40 million of total revenue for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $4.12 billion in total assets, $2.80 billion in total liabilities and $1.32 billion in stockholders' equity. A full-text copy of the Form 10-Q is available for free at: http://is.gd/r7MTwz About USEC Inc. Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) -- http://www.usec.com/-- supplies enriched uranium fuel for commercial nuclear power plants. * * * USEC Inc. carries 'Caa1' corporate and probability of default ratings, with "developing" outlook, from Moody's, and 'CCC+' long term foreign issuer credit rating and 'CCC-' long term local issuer credit rating, with outlook "developing", from Standard & Poor's. In May 2010, S&P said that its rating and outlook on USEC Inc. are not affected by the announcement that Toshiba Corp. and Babcock & Wilcox Investment Co., an affiliate of The Babcock & Wilcox Co., have signed a definitive investment agreement for $200 million with USEC. UTE MESA: Taps Podoll & Podoll as Special Litigation Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Colorado authorized Ute Mesa Lot 1, LLC, to employ Podoll & Podoll as special litigation counsel. The Debtor related that on the Petition Date, a civil action was pending in the District Court, Pitkin County, Colorado styled United western Bank v. Leathem Stearn, an individual; Ute Mesa, LLC, A Colorado limited liability company, Ute Mesa Lot 1, LLC, a Colorado limited liability company; AAA Waterproofing, Inc., Colorado corporation; RMS Concrete, Inc., a Colorado corporation; Aspen Digger, Inc., a Colorado corporation; Case No. 10CV177. As a special litigation counsel, the firm will represent the Debtor in connection with the State Law Civil Action. The firm will also represent Leathem Stearn, the Debtor's sole member and manager, and Ute Mesa, LLC, an affiliate of the Debtor and one in which Mr. Stearn is the sole member, in connection with the State Law Civil Action. The firm's hourly rates are: Richard Podoll $400 Robert Podoll $400 Robert Kitsmiller $400 Greg Sapakoff $350 Associates $250 - $300 Paralegals $80 Law Clerks $100 Mr. Stearn advanced the firm a retainer amounting to $10,000. Mr. Stearn does not intend to seek reimbursement from the Debtor for the Debtor's proportional share of the retainer. Richard Podoll, a partner at the firm, assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Podoll can be reached at 5619 CTC Parkway, Suite 1100, Greenwood, Colorado. About Ute Mesa Lot 1 Denver, Colorado-based Ute Mesa Lot 1, LLC, filed for Chapter 11 bankruptcy protection on August 13, 2010 (Bankr. D. Colo. Case No. 10-30620). Duncan E. Barber, Esq., and Steven T. Mulligan, Esq., at Bieging Shapiro & Burrus LLP, in Denver, assist the Debtor in its restructuring effort. The Debtor disclosed $10,017,982 in assets and $11,633,024 in liabilities. VALLEJO, CA: Has Formal Plan Confirmation Order ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the city of Vallejo, California, has the green light to exit the municipal reorganization that began in May 2008. The bankruptcy judge in Sacramento, California, signed a confirmation order last week formally approving the plan and overruling the remaining two objections. Other objections were resolved by the confirmation hearing in July. The report relates that the Plan restructures $50 million of publicly held debt secured by leases on public buildings. Although the Plan doesn't affect pensions, it adjusts the claims and benefits of current and former city employees. About Vallejo, California Vallejo -- http://www.ci.vallejo.ca.us/-- is a city in Solano County, California in the United States. As of the 2000 census, the city had a total population of 116,760. It is located in the San Francisco Bay Area on the northern shore of San Pablo Bay. It was named for General Mariano Guadalupe Vallejo. Vallejo filed for protection under Chapter 9 of the U.S. Bankruptcy Code (Bankr. E.D. Calif. Case No. 08-26813) on May 23, 2008, after it was unable to persuade labor unions to accept salary concessions as the recession began cutting into local government tax collections nationwide. Marc A. Levinson, Esq., and Norman C. Hile, Esq., at Orrick, Herrington & Sutcliffe LLP in Sacramento, California, represent the City. The city estimated $500 million to $1 billion in assets and $100 million to $500 million in debts in its petition. According to Vallejo's comprehensive annual report for the year ended June 30, 2007, the city has $983 million in assets and $358 million in debts. VIKING SYSTEMS: Incurs $860,100 Net Loss in Second Quarter ---------------------------------------------------------- Viking Systems, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on form 10-Q reporting a net loss of $860,128 on $2.51 million of net sales for the three months ended June 30, 2011, compared with a net loss of $450,850 on $2 million of net sales for the same period during the prior year. The Company also reported a net loss of $1.30 million on $5.63 million of net sales for the six months ended June 30, 2011, compared with a net loss of $746,300 on $3.92 million of net sales for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $6.64 million in total assets, $2.53 million in total liabilities, all current, and $4.11 million in total stockholders' equity. Jed Kennedy, President and CEO of Viking Systems said, "During the second quarter we made significant inroads into recapitalizing the Company and securing funds to increase our marketing campaign. We experienced improvements in our year-over-year sales, and also strengthened our Board of Directors. As part of our increased emphasis on sales and marketing, we have hired a sales consultant to assist us in our sales process, and move us ahead to the next level, as we seek to bolster our sales both globally and domestically." A full-text copy of the Form 10-Q is available for free at: http://is.gd/Ip5aK6 About Viking Systems Based in Westborough, Massachusetts, Viking Systems, Inc. (OTCBB: VKNG.OB) -- http://www.vikingsystems.com/-- is a developer, manufacturer and marketer of visualization solutions for complex minimally invasive surgery. The Company partners with medical device companies and healthcare facilities to provide surgeons with proprietary visualization systems enabling minimally invasive surgical procedures, which reduce patient trauma and recovery time. The Company reported a net loss applicable to common shareholders of $2.44 million on $8.04 million of sales for the year ended Dec. 31, 2010, compared with a net loss applicable to common shareholders of $1.07 million on $7.22 million of sales during the prior year. The report from Viking Systems, Inc.'s independent registered public accounting firm, Squar, Milner, Peterson, Miranda & Williamson, LLP, dated February 22, 2010, includes a going concern explanatory paragraph which states that factors relating to the Company's net losses and working capital concerns raise substantial doubt the Company's ability to continue as a going concern. Viking Systems said it will need to generate significant additional revenue to achieve profitability and it may require additional financing during 2010. "The going concern explanatory paragraph in the independent auditor's report emphasizes the uncertainty related to our business as well as the level of risk associated with an investment in our common stock," Viking Systems said. VINEYARD AT SERRA: Taps Keller Williams/West as Property Broker --------------------------------------------------------------- The Vineyard at Serra Retreat, LLC, asks the U.S. Bankruptcy Court for the Central District of California for permission to employ Keller Williams/West Realty Group as its real estate broker. The Debtor owns three contiguous parcels of real property in the Serra Retreat enclave in Malibu, California. The Debtor's three properties are located at 3314 Serra Road, 3328 Serra Road, and 3410 Serra Road. According to appraisals of the properties commissioned by the Debtor's secured lender, First Citizens Bank, the combined value of the Debtor's three parcels was $19,000,000 as of May 20, 2010. Specifically, the FCB appraisals dated as of May 20, 2010 gave an appraised value of $9,000,000 for the 3314 Serra Road parcel; $3,500,000 for the 3328 Serra Road parcel, and a value of $6,500,000 for the 3410 Serra Road parcel. As established by FCB's Notice of Sale dated May 12, 2011, FCB asserted a total amount due of $17,142,813 as of the date of that notice. The Debtor disputes that FCB is owed that much, particularly with respect to penalties and fees. More importantly, the Debtor believes its three properties are worth significantly more than the $19,000,000. According to the Debtor, a few factors make these particularly valuable properties. First, the Debtor has rights to development that are not available to any other properties, not only in the Serra Retreat neighborhood but anywhere in Malibu. Second, the 3314 Serra Road parcel is exempt from certain restrictions imposed regarding septic tank issues in Malibu. Third, parcel 3328 Serra Road is a cactus and succulent nursery. Because of these features, the Debtor believes that the two parcels consisting of 3314 Serra Road and 3328 Serra Road are alone worth more than $21,500,000, without taking into account the third property owned by the Debtor, located at 3410 Serra Road. Tentatively, the Debtor believes the listing price for a combined sale of the two parcels must be $21,500,000. The Debtor requires the services of broker to assist the Debtor in verifying the viability of a marketing plan for the two parcels, as a master estate combined with an adjoining vineyard property. The broker will market the sale of all three of the Debtor's parcels of real property, located at 3314 Serra Road, 3328 Serra Road, and 3410 Serra Road. The broker will also assist the Debtor and its counsel with the analysis and ultimate determination of whether the two parcels - 3314 and 3328 Serra Road - can be successfully marketed as a combined property for sale in a manner to satisfy in full the debt obligation to FCB. The broker will be paid a commission of 3 percent (or 5 percent) of the total purchase price, which will be paid out of the escrow upon consummation of the sale of the property. The broker has not received any compensation from the Debtor in respect of the agreement. To the best of Debtor's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About The Vineyard at Serra Retreat The Vineyard at Serra Retreat, LLC, in Malibu, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-17323) on June 15, 2011. Judge Victoria S. Kaufman presides over the case. The Law Offices of David W. Meadows serves as bankruptcy counsel. The Company disclosed $19,017,000 in assets and $27,180,313 in liabilities. The petition was signed by John Hall, manager. VONAGE HOLDINGS: Moody's Withdraws 'B2' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service has withdrawn all ratings assigned to Vonage Holdings Corp. as a result of the company's announcement that it has repaid existing debt with a new, unrated facility, warranting the rating withdrawal. Since Moody's does not rate any of Vonage's debt, Moody's has also withdrawn the company's Corporate Family Rating, Probability of Default Rating, and Speculative Grade Liquidity Rating. Withdrawals: Issuer: Vonage Holdings Corp. -- Corporate Family Rating, Withdrawn, previously rated B2 -- Probability of Default Rating, Withdrawn, previously rated B1 Issuer: Vonage Holdings Corp., Vonage America Inc. -- $200 million Senior Secured Term Loan, Withdrawn, previously rated B2 (LGD4, 69%) -- Rating Outlook: Withdrawn, previously Stable The principal methodology used in rating Vonage was Moody's Global Telecommunications Industry, published in December 2010 and available on www.moodys.com. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website. Vonage, located in Holmdel, New Jersey, is a provider of voice and messaging services to approximately 2.4 million subscribers across the United States and abroad. The company generated about $870 million in revenues for the trailing twelve months ending June 30, 2011. WARNER MUSIC: Incurs $46 Million Net Loss in Fiscal 3rd Quarter --------------------------------------------------------------- Warner Music Group Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on form 10-Q reporting a net loss of $46 million on $686 million of revenue for the three months ended June 30, 2011, compared with a net loss of $55 million on $652 million of revenue for the same period during the prior year. The Company also reported a net loss of $103 million on $2.15 billion of revenue for the nine months ended June 30, 2011, compared with a net loss of $99 million on $2.23 million of revenue for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $3.58 billion in total assets, $3.87 billion in total liabilities and a $289 million total deficit. "Our focus on disciplined A&R investments, revenue diversification and innovative digital strategies has helped us to grow our Recorded Music revenue and deliver healthy increases in three key segments of our Music Publishing revenue," said Edgar Bronfman, Jr., Warner Music Group's CEO. "We are approaching the point where the majority of our U.S. Recorded Music business will be digital while continuing to transform our approach to artist signings with more than 60% of the artists on our active global recorded music roster being signed to deals with a comprehensive suite of expanded rights." A full-text copy of the Form 10-Q is available for free at: http://is.gd/4LOVrJ About Warner Music Group Based in New York, Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- was formed by a private equity consortium of investors on Nov. 21, 2003. The Company is the direct parent of WMG Holdings Corp., which is the direct parent of WMG Acquisition Corp. WMG Acquisition Corp. is one of the world's major music-based content companies and the successor to substantially all of the interests of the recorded music and music publishing businesses of Time Warner Inc. The Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing. The Company's Recorded Music business primarily consists of the discovery and development of artists and the related marketing, distribution and licensing of recorded music produced by such artists. The Company's Music Publishing operations include Warner/Chappell, its global Music Publishing company, headquartered in New York with operations in over 50 countries through various subsidiaries, affiliates and non-affiliated licensees. Warner Music reported a net loss of $39 million on $682 million of revenue for the three months ended March 31, 2011, compared with a net loss of $28 million on $666 million of revenue for the same period during the prior year. The Company also reported a net loss of $57 million on $1.47 billion of revenue for the six months ended March 31, 2011, compared with a net loss of $44 million on $1.58 billion of revenue for the same period during the prior year. * * * In May 2011, Warner Music Group Corp. and Access Industries, the U.S.-based industrial group, announced the execution of a definitive merger agreement under which Access Industries will acquire WMG in an all-cash transaction valued at $3.3 billion. The purchase includes WMG's entire recorded music and music publishing businesses. WARNER MUSIC: Guarantees Payments of $150-Mil. Holdings Notes ------------------------------------------------------------- Warner Music Group Corp., on Aug. 2, 2011, issued a guarantee with respect to the $150 million aggregate principal amount of 13.75% Senior Notes due 2019 initially issued by WM Holdings Finance Corp. which was merged with and into WMG Holdings Corp. whereby it fully and unconditionally guaranteed, on a senior unsecured basis, the payments of WMG Holdings Corp. on the Holdings Notes. A copy of the Holdings Notes Guarantee is available for free at: http://is.gd/bgDyWc WMG Holdings Corp. entered into a supplemental indenture, dated as of Aug. 2, 2011, that supplements the Indenture, dated July 20, 2011, as amended, among WMG Holdings Corp., and Wells Fargo Bank, National Association, as trustee, pursuant to which the Holdings Notes were issued. The Supplemental Indenture adds provisions providing for, but not requiring, the guarantee of the Holdings Notes. A copy of the Supplemental Indenture is available for free at: http://is.gd/D8riGz About Warner Music Group Based in New York, Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- was formed by a private equity consortium of investors on Nov. 21, 2003. The Company is the direct parent of WMG Holdings Corp., which is the direct parent of WMG Acquisition Corp. WMG Acquisition Corp. is one of the world's major music-based content companies and the successor to substantially all of the interests of the recorded music and music publishing businesses of Time Warner Inc. The Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing. The Company's Recorded Music business primarily consists of the discovery and development of artists and the related marketing, distribution and licensing of recorded music produced by such artists. The Company's Music Publishing operations include Warner/Chappell, its global Music Publishing company, headquartered in New York with operations in over 50 countries through various subsidiaries, affiliates and non-affiliated licensees. Warner Music reported a net loss of $39 million on $682 million of revenue for the three months ended March 31, 2011, compared with a net loss of $28 million on $666 million of revenue for the same period during the prior year. The Company also reported a net loss of $57 million on $1.47 billion of revenue for the six months ended March 31, 2011, compared with a net loss of $44 million on $1.58 billion of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2011, showed $3.58 billion in total assets, $3.87 billion in total liabilities and a $289 million total deficit. * * * In May 2011, Warner Music Group Corp. and Access Industries, the U.S.-based industrial group, announced the execution of a definitive merger agreement under which Access Industries will acquire WMG in an all-cash transaction valued at $3.3 billion. The purchase includes WMG's entire recorded music and music publishing businesses. WASHINGTON MUTUAL: DOJ Closes Probe With No Criminal Charges ------------------------------------------------------------ The United States Department of Justice closed the investigation stemming from the September 2008 failure of Washington Mutual Bank. In October 2008, following the failure of Washington Mutual Bank, the United States Attorney's Office for the Western District of Washington issued a statement indicating that a federal task force was examining events at the bank to determine whether federal criminal violations had been committed by the bank and its leaders. Since that time, investigators have conducted an extensive investigation that included hundreds of interviews and the review of millions of documents relating to the operations, and the subsequent failure, of Washington Mutual Bank. Investigators also reviewed reports generated during investigations conducted by other government bodies, including by the United States Senate Permanent Subcommittee on Investigations, and by the Offices of the Inspector General at the Department of the Treasury and the Federal Deposit Insurance Corporation. Based upon its investigation, the Department of Justice has concluded that the evidence does not meet the exacting standards for criminal charges in connection with the bank's failure. The Department of Justice is cooperating with the Federal Deposit Insurance Corporation (FDIC), which has a pending lawsuit against three former executives of the bank alleging gross negligence and breach of fiduciary duties. In addition to the United States Attorney's Office for the Western District of Washington, and the Criminal Division of United States Department of Justice, numerous agencies participated in the investigation, including the Federal Bureau of Investigation, the Internal Revenue Service, the Department of Labor, the Federal Deposit Insurance Corporation, Office of the Inspector General, and the Washington State Department of Financial Institutions. * * * Jean Eaglesham, writing for The Wall Street Journal, reports that people familiar with the situation said federal criminal investigations of IndyMac Bancorp and New Century Financial Corp. have stalled and could result in no charges being filed. The U.S. Attorney's Office for the Western District of Washington in Seattle on Friday also closed the investigation stemming from the September 2008 failure of Washington Mutual Bank. The U.S. Department of Justice has concluded that the evidence does not meet the exacting standards for criminal charges in connection with the bank's failure. According to the WSJ report, all three separate investigations hit major stumbling blocks. People familiar with the matter told the Journal the WaMu probe had been inactive for more than a year. Sources also said the IndyMac and New Century investigations are essentially dormant at the moment. The Journal says a spokesman for the U.S. Attorney's office in Los Angeles, which initiated the IndyMac and New Century investigations, declined to comment. The Journal notes, however, that the investigations haven't been closed, meaning they could gain new momentum if fresh evidence surfaces. A source told the Journal the U.S. Attorney's Office in Brooklyn, N.Y., recently opened its own criminal investigation into IndyMac. The source said in the Brooklyn probe, which is still at an early stage, prosecutors are looking at the information IndyMac disclosed about the quality of home loans that backed bonds it sold to investors. It isn't clear if the scope of the Brooklyn-based investigation is significantly different than the Los Angeles one, but U.S attorneys have broad discretion to determine which avenues to pursue. The Journal says a spokesman for the U.S. Attorney's office in Brooklyn declined to comment. About Indymac Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- was the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that originated mortgages in all 50 states of the United States. On July 11, 2008, the Office of Thrift Supervision closed IndyMac Bank and appointed FDIC as the bank's receiver. Thacher Proffitt & Wood LLP was engaged as counsel to the FDIC. All non-brokered insured deposit accounts and substantially all of the assets of the bank were transferred to IndyMac Federal Bank, F.S.B., Pasadena, CA, a newly chartered full-service FDIC-insured institution. On March 19, IndyMac Federal Bank was sold to OneWest Bank, F.S.B., Pasadena, California. OneWest Bank, FSB is a newly formed federal savings bank organized by IMB HoldCo LLC. Indymac Bancorp filed for Chapter 7 bankruptcy protection on July 31, 2008 (Bankr. C.D.Calif., Case No. 08-21752). Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C. Weitnauer, Esq. Indymac had about $32.01 billion in assets as of July 11, 2008. In court documents, IndyMac disclosed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. About New Century Financial Corp. Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real state investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The Company offers a broad range of mortgage products designed to meet the needs of all borrowers. New Century Financial and its affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., were tapped as bankruptcy counsel. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Court confirmed the Debtors' second amended joint Chapter 11 plan of liquidation on July 15, 2008. 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. WESTLAKE CHEMICAL: Moody's Reviews Low-B Ratings for Upgrade ------------------------------------------------------------ Moody's Investors Service placed the ratings of Westlake Chemical Corporation under review for upgrade. This review is prompted by the company's continued strong financial performance and an increasing cash balance that is reducing event risk from a potential larger petrochemical capacity addition. The review will focus on the costs related to the previously announced capacity expansions in Lake Charles, the potential cost of increasing capacity in Calvert City, and management's plans for growth post 2014. Westlake's improving profitability has largely been driven by access to low feedstock costs (Gulf Coast ethane) and continued demand for its polyethylene resins in North America. Profitability of its PVC and fabricated products business remains challenged, despite the profitability of PVC exports. The company's elevated profitability should allow it to fund a large portion of its planned ethylene and chlor alkali expansions from operating cash flows, while allowing it to maintain a cash balance well above $500 million. The review will seek to understand management's plans for funding future ethylene and polyethylene capacity expansions and the amount of capital required to maintain organic growth at reasonable levels post 2014. Ratings on review for possible upgrade: Westlake Chemical Corporation Corporate Family Rating at Ba1 Probability of Default Rating at Ba1 Guaranteed Senior Unsecured Debt at Ba2 (LGD4, 68%) Unsecured GoZone bonds guaranteed by Westlake at Ba2 (LGD4, 68%) The principal methodology used in rating Westlake Chemical Corporation was the Global Chemical 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. Westlake Chemical Corporation, headquartered in Houston, TX, is a producer of commodity petrochemicals (ethylene and styrene), plastics (polyvinyl chloride and polyethylene), as well as compounded PVC resins and fabricated PVC products (window and door profiles, siding, etc.). Revenues were $3.4 billion for the LTM ended June 30, 2011. WILLIAM LINDSEY: Plan Violates Absolute Priority Rule ----------------------------------------------------- Bankruptcy Judge Richard Stair, Jr., granted the motions for summary judgment filed by Pinnacle National Bank and Mountain National Bank on June 27, 2011, and by FirstBank on July 12, 2011, seeking a determination that the First Amended Plan of Reorganization filed by William Edwin Lindsey on April 6, 2011, cannot be confirmed as a matter of law because it allows the Debtor to retain pre-petition property in violation of 11 U.S.C. Sec. 1129(b)(2)(B)(ii). Judge Stair said, because the Plan provides for the retention of property owned by the Debtor pre- petition but does not propose to pay the dissenting class of unsecured creditors in full, the Amended Plan is not "fair and equitable" as required by Sec. 1129(b). A copy of Judge Stair's Aug. 5, 2011 Memorandum is available at http://is.gd/qiYpEafrom Leagle.com. The Amended Plan provides for 12 classes, Classes 2 through 12 of which are impaired, and is to be implemented through the sale of property as designated in the Amended Plan, through the Debtor's income, and through the commencement of required payments. Specifically, the Amended Plan proposes the sale of: (1) the Debtor's tenancy in common interest in real property located at Briarthicket Road in Cocke County, Tennessee; (2) his stock in Ultimate Toys Motorsports, Inc.; (3) his membership in BTRG, LLC; (4) his membership in Ultimate Toys, LLC; and (5) his membership in WL & MC Development, LLC. The property owned by the Debtor that is not proposed for sale and is to be retained by the Debtor are: (1) real property located at 826 Loop Road, Knoxville, Tennessee; (2) real property located at Lot #88 Ladd Landing, Roane County, Tennessee; (3) real property located at 708 Eagleton Road, Maryville, Tennessee; (4) real property located at 400 Henderson Street, Maryville, Tennessee; (5) real property located at 7111 Clinton Highway, Knoxville, Tennessee; (6) a lease with Mercy Partners in Cocke County, Tennessee; (7) a note in the amount of $87,000 with a Ms. Chitwood secured by residential real property located at 723 E. Churchwell Avenue, Knoxville, Tennessee; (8) 100,000 shares of WIN stock; (9) 50% membership in Jefferson Plaza, LLC; (10) 100% interest in Eastland Capital, LLC; (11) 50% interest in Lindsey Leasing, LLC; (12) 50% interest in JS&A, LLC; (13) 30% interest in LEC Properties; (14) 30% interest in LHC Properties; (15) 33.33% interest in LECH; (16) 50% interest in L&C Properties; (17) a pistol; (18) a note with the Maupin Estate; (19) a 1995 Jeep; (20) a 1997 pick-up truck; (21) office equipment; and (22) a note in the amount of $470,961.00 with Danika Lindsey. Attorneys for Pinnacle National Bank and Mountain National Bank are: HODGES, DOUGHTY & CARSON, PLLC Thomas H. Dickenson, Esq. 617 Main Street P.O. Box 869 Knoxville, TN 37901-0869 Tel: 865-292-2243 Fax: 865-292-2321 E-mail: tdickenson@hdclaw.com Attorney for FirstBank is: Walter N. Winchester, Esq. WINCHESTER, SELLERS, FOSTER & STEELE, P.C. 800 S. Gay Street, Suite 1000 Knoxville, TN 37929 Tel: (865) 637-1980 Fax: (865) 637-4489 E-mail: Tsmith@wsfs-law.com About William Edwin Lindsey Knoxville, Tennessee-based William Edwin Lindsey, dba Lindsey & Associates aka Bill Lindsey aka William E. Lindsey, filed for Chapter 11 bankruptcy (Bankr. E.D. Tenn. Case No. 10-31694) on April 5, 2010. Judge Richard Stair, Jr., presides over the case. Michael H. Fitzpatrick, Esq. -- mhf@jlaw.com -- at Jenkins & Jenkins Attorneys, PLLC, serves as the Debtor's counsel. In his petition, the Debtor estimated $1 million to $10 million in assets and $10 million to $50 million in debts. WINDSOR PETROLEUM: Moody's Downgrades Debt Rating to 'Caa1' ----------------------------------------------------------- Moody's Investors Service downgraded Windsor Petroleum Transport Corporation's 7.84% Term Secured Notes due 2021 (term notes) to Caa1 from B3 and is maintaining a negative outlook on the rating. The downgrade is prompted by Windsor's announcement that the Memorandum of Agreement (MOA) to sell its Pioneer VLCC for $54 million was terminated. The MOA had contingency provisions linked to the buyer's ability to obtain a contract on the vessel. RATINGS RATIONALE The downgrade reflects the increased risk that Windsor could default on principal and interest payments as a result of shortfalls in the cash available to support Pioneer's $57.9 million allocated portion of principal and accruing interest (as per the end of first quarter 2011). Pioneer's charter with BP expired on January 2, 2011. Since then, the vessel has been on spot charter. In the first quarter the vessel was chartered out at a rate equivalent to $7,800/day, below the amount needed to cover operating and financial expense. With the termination of the potential sale, Pioneer's cash reserves ($7.73 million as of March 31, 2011) will continue to erode. Frontline Ltd. is continuing to pursue a sale of the Pioneer at a Minimum Required Bid. Moody's believes the combined cash resources from the charters and cash balances of the other three vessels will continue to support Windsor's debt service. Their cash balances totaled $29.7 million at the end of the first quarter 2011. However, barring a near-term sale of the Pioneer, a continued draw on its allocated cash could ultimately lead to a default by Windsor. Given Pioneer's tight liquidity, Moody's is maintaining a negative rating outlook. If the vessel cannot be sold at a Minimum Required Bid level, it will remain subject to volatile spot market rates and declining cash resources. In that event Frontline Ltd. could continue to charter the Pioneer or sell it below par (subject to bondholder approval), with proceeds retiring a portion of the allocated debt. A shortfall in vessel proceeds would cause the remaining allocated debt to be apportioned to the other three Windsor VLCCs, increasing their leverage. Moody's notes the other three Windsor vessels are still under charter to BP and will continue to generate revenues at sufficient minimum rates to service their own allocated debt. However, Windsor's market risk is increasing, since the vessels are subject to annual rolling notifications of intent to renew or terminate. Weak tanker markets and new vessel supply increase the risk that BP may not retain its remaining charters on future renewal dates. BP recently renewed the charters on two of the vessels, the Purpose and the Pride to July 2013, and the Progress has been renewed to February 2013. Windsor Petroleum's ratings were assigned by evaluating factors Moody's believes to be relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near-to-intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of the shipping industry and its ratings are believed to be comparable to those of other issuers with similar contract structures. Windsor Petroleum Transport Corporation is a special purpose entity originally formed to finance the construction of four VLCCs under long-term time charter to a shipping subsidiary of BP plc. Independent Tankers Corporation Limited ITCL), headquartered in Hamilton, Bermuda, owns a portfolio of oil tankers under long-term charter to shipping subsidiaries of BP plc and Chevron Corporation. ITCL is majority-owned by Frontline Ltd., one of the world's largest shipping companies engaged in crude oil and product shipping. WS MINERAL: Files Schedules of Assets and Liabilities ----------------------------------------------------- WS Mineral Holdings, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Texas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $26,000,000 B. Personal Property $3,589 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $14,573,064 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $2,250 ----------- ----------- TOTAL $29,003,589* $14,575,314 * corrected: 26,003,589 A full-text copy of the schedules is available for free at: http://bankrupt.com/misc/WSMINERAL_sal.pdf South of the Stadium I, LLC, in Carrollton, Texas, filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 11-43278) on June 6, 2011. Debtor-affiliates 261 CW Springs LTD (Bankr. N.D. Tex. Case No. 11-33757), WS Minerals LLC (Bankr. N.D. Tex. Case No. 11-43273), and WS Mineral Holdings LLC (Bankr. N.D. Tex. Case No. 11-43290) also filed on the same day. Judge D. Michael Lynn presides over the cases. Richard W. Ward, Esq. -- rwward@airmail.net -- Plano, Texas, serves as the Debtors' bankruptcy counsel. South of the Stadium I, WS Minerals LLC, and WS Mineral Holdings LLC each estimated assets and debts of $10 million to $50 million in their petitions. 261 CW Springs estimated assets and debts of $1 million to $10 million in its petition. The petitions were signed by Jeff Shirley, authorized representative. YRC WORLDWIDE: Michael Smid Retires as President and COO -------------------------------------------------------- Michael J. Smid, President of YRC Inc. and Chief Operations Officer of YRC Worldwide Inc., retired from his positions with the Company and its subsidiaries. In connection with Mr. Smid's departure, the Company expects to enter into a Separation Agreement and Complete Release with Mr. Smid pursuant to which Mr. Smid will generally receive benefits described in the Company's Executive Severance Policy, and the Retention Payment, Non- Competition, Non-Solicitation, Non-Disparagement, and Confidentiality Agreement dated June 2, 2009, by and between the Company and Mr. Smid. Consistent with the Policy, it is expected that the Separation Agreement will, among other things, provide Mr. Smid with his current base salary and continuation of certain health and welfare benefits for a 24-month period following his cessation of employment, subject to certain limitations including compliance with certain confidentiality, non-competition, non-solicitation and non-disparagement covenants set forth in the Separation Agreement. Mr. Smid will also be eligible for benefits pursuant to the Company's 401(k) and pension plans, including the Company's Supplemental Executive Pension Plan, as modified by the Agreement. Under the SEPP, as modified by the Agreement, Mr. Smid will receive a lump sum payment equal to 80% of his accrued benefit six months following his termination of employment. He also will be bound by the non-competition and non-solicitation agreements contained in the Agreement that extend for six months following termination of Mr. Smid's employment and certain non-disparagement and confidentiality agreements contained in the Agreement that extend indefinitely. Mr. Smid must comply with the non- competition, non-solicitation, non-disparagement and confidentiality provisions of the Agreement as a condition to receiving and retaining the SEPP benefits provided by the Agreement. About YRC Worldwide Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ: YRCW) -- http://www.yrcw.com/-- is a holding company that through wholly owned operating subsidiaries offers its customers a wide range of transportation services. These services include global, national and regional transportation as well as logistics. KPMG LLP's audit reports on the consolidated financial statements of YRC Worldwide Inc. and subsidiaries for 2009 and 2010 each contain an explanatory paragraph that states that the Company has experienced significant declines in operations, cash flows and liquidity and these conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at March 31, 2011, showed $2.62 billion in total assets, $2.91 billion in total liabilities, and a $287.64 million total shareholders' deficit. * * * In January 2011, Standard & Poor's Ratings Services placed its 'CCC-' corporate credit rating on YRC Worldwide Inc. (YRCW) on CreditWatch developing. At the same time, S&P is withdrawing the existing issue level ratings on Yellow Corp.'s senior unsecured debt, given the negligible amounts outstanding. "The ratings on Overland Park, Kan.-based YRCW reflect its near- term liquidity challenges, meaningful off-balance-sheet contingent obligations related to multiemployer pension plans, as well as its participation in the competitive, capital-intensive, and cyclical trucking industry," said Standard & Poor's credit analyst Anita Ogbara. "YRCW's substantial (albeit deteriorating) market position in the less-than-truckload (LTL) sector, which has high barriers to entry, partially offsets these characteristics. We characterize YRCW's business profile as weak, financial profile as highly leveraged, and liquidity as weak." In the Aug. 2, 2011, edition of the TCR, Moody's Investors Service revised YRC Worldwide Inc.'s Probability of Default Rating ("PDR") to Caa2\LD ("Limited Default") from Caa3 in recognition of the agreed debt restructuring which will result in losses for certain existing debt holders. In a related action Moody's has raised YRCW's Corporate Family Rating to Caa3 from Ca to reflect modest but critical improvements in the company's credit profile that should result from its recently-completed financial restructuring. The positioning of YRCW's PDR at Caa2\LD reflects the completion of an offer to exchange a substantial majority of the company's outstanding credit facility debt for new senior secured credit facilities, convertible unsecured notes, and preferred equity, which was completed on July 22, 2011. As reported by the TCR on May 5, 2011, Fitch Ratings downgraded YRC's Issuer default rating to 'C' from 'CC'; Secured bank credit facility rating downgraded to 'CCC/RR2' from 'B-/RR2'; and Senior unsecured rating affirmed at 'C/RR6'. In addition, Fitch has removed YRCW's ratings from Rating Watch Negative. Fitch said that although it appears increasingly likely that the company will successfully complete the restructuring, until the transactions constituting the restructuring close, which is not anticipated until late July 2011, there exists a potential for the transaction to fail, in which case Fitch expects the company would be forced to file for Chapter 11 bankruptcy protection. * Commercial and Individual Bankruptcies Down in July ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the 110,000 bankruptcy filings in the U.S. during July were about the same as June, although 9.6% fewer than the same month last year. For the first seven months of 2011, total bankruptcies trail the same period in 2010 by 9%, according to data compiled from court records by Epiq Systems Inc. Commercial bankruptcies continued dropping faster still. The 5,760 business bankruptcies in July were 27.3% below the same month in 2010. Mr. Rochelle relates that filings in Chapter 11, where larger companies reorganize or liquidate, totaled 826 in July, or one- third fewer than July 2010. The states with the highest per capita bankruptcies are Nevada, Georgia and Tennessee. Bankruptcies declined in all 50 states. According to the report, there have been 841,400 bankruptcies of all types this year, compared with 1.56 million for 2010 as a whole. Last year had the most since 2005, when a record 2.1 million were filed. Americans in 2005 were filing bankruptcy ahead of new laws making it more difficult for individuals to cancel debt. In the last two weeks before the law changed, 630,000 American sought bankruptcy protection. * Two Bank Failures Bring Year's Total to 63 -------------------------------------------- Bank failures in Washington and Illinois on Aug. 5 brought the year's total to 63. The combined cost to the Federal Deposit Insurance Corp.'s insurance fund was $160.4 million. There were 157 bank failures 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 Whitman $548.6 Columbia State Bank $134.8 Bank of Shorewood $110.7 Heartland Bank and Trust $25.6 Integra Bank $2,200.0 Old National Bank $170.7 BankMeridian, N.A. $239.8 SCBT N.A. $65.4 Virginia Business $95.8 Xenith Bank $17.3 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. * Mercer Island Man Pleads Guilty in Connection With Ponzi Scheme ----------------------------------------------------------------- Frederick Darren Berg, 49, of Mercer Island, Washington, pleaded guilty late today in U.S. District Court in Seattle to one count of Wire Fraud, one count of Money Laundering and one count of Bankruptcy Fraud. BERG and prosecutors agreed to an 18 year prison term when he is sentenced by U.S. District Judge Richard A. Jones on November 4, 2011. If Judge Jones rejects the 18 year prison term, both sides can withdraw from the plea agreement and proceed to trial. BERG is the founder of the Meridian Group of investment funds. The funds represented that $280 million in investor money was invested in real estate contracts, however the funds were elaborate ponzi schemes. BERG used more than $100 million from about 500 investors for his own expenses and to keep the fraud going. BERG claimed he was cooperating with bankruptcy trustees in his personal and corporate bankruptcies in an effort to help unravel his fraud schemes. Federal investigators learned that he had concealed approximately $400,000 from the trustees and later lied about the source of these funds when confronted by the trustee in his personal bankruptcy. Further investigation revealed the funds came from the sale of a home he had failed to disclose in his bankruptcy proceedings and the funds were deposited into a series of bank accounts he concealed from the trustee. Failure to disclose those assets to the trustee results in the bankruptcy fraud charge. BERG was indicted in November 2010. BERG was arrested in Los Angeles on October 21, 2010. He has been in federal custody ever since. The case was investigated by the FBI, the Washington State Department of Financial Institutions (DFI) and the Internal Revenue Service Criminal Investigation (IRS-CI). The case was being prosecuted by Assistant United States Attorney Norman Barbosa. * SEC Scores Injunction Against Ex Birmingham, Ala. Mayor --------------------------------------------------------- Hilary Russ at Bankruptcy Law360 reports that the U.S. Securities and Exchange Commission on Monday won an injunction against a former mayor of Birmingham, Ala., who was sentenced to 15 years for participating in a bid-rigging scheme that helped push a county to the brink of bankruptcy. Law360 relates that U.S. District Judge Abdul K. Kallon granted the SEC's motion for summary judgment on collateral estoppel grounds and permanently banned Larry P. Langford from violating securities laws. * Cadwalader Adds Leading Structured Finance Lawyer to Hong Kong ---------------------------------------------------------------- Cadwalader, Wickersham & Taft LLP disclosed that Jeffrey H. Chen, a preeminent lawyer in structured finance and derivatives, has joined the firm's Hong Kong office as Partner. Mr. Chen, formerly with Mayer Brown JSM in Hong Kong, will be a part of the Capital Markets team. "Jeff is a highly regarded capital markets lawyer. He brings to Cadwalader extensive knowledge of and experience with complex structured finance products," said Christopher White, Chairman of Cadwalader. "With great talent like Jeff, we continue to develop our full suite of debt, equity and hybrid capital markets services to clients throughout Asia. We look forward to his contributions to the Firm and to Cadwalader's continued growth and success in Asia." "Jeff is experienced in limited recourse financing structures of all types, including asset-backed loans and asset-backed securities," stated Rocky Lee, Head of Cadwalader's Asia practice. "He has pioneered limited recourse receivables financing in mainland China under existing PRC law. I am honored to welcome him to our Office and our Firm," he said. Mr. Chen has advised on many of the headline structured finance transactions in Asia over the past decade, including Huarong AMC NPLs, Samsung Life RMBS, HKMC's cross-border Korean securitizations, and more recently a slew of complex structured notes and derivatives litigation arising out of the global Lehman bankruptcy proceedings. "Cadwalader will be by far the best platform that I will have ever worked on in my career in structured finance," says Mr. Chen. "The firm is absolutely top-tier in this practice area globally, and I am delighted to have the opportunity of spear-heading the firm's structured finance initiatives into Asia." "Our European capital markets clients with interests in Asia will benefit greatly from Jeff's breadth of experience on the ground in Hong Kong," said Angus Duncan, Managing Partner of Cadwalader's London office. Mr. Chen is an active participant in several industry associations, including the Asia-Pacific Legal & Regulatory Committee of the International Swaps & Derivatives Association (ISDA) and the China Securitization Forum (CSF). He is a member of the Professional Advisory Board, Asian Institute of International Financial Law, Faculty of Law, The University of Hong Kong. Mr. Chen received a B.A. and an M.A. in History from the University of Michigan and graduated from George Washington University with his law degree. He is licensed to practice law in Washington, D.C., New York and Hong Kong. About Cadwalader, Wickersham & Taft LLP Cadwalader, Wickersham & Taft LLP, established in 1792, is one of the world's leading international law firms, with offices in New York, Washington, Charlotte, Houston, London, Brussels, Hong Kong and Beijing. Cadwalader serves a diverse client base, including many of the world's top financial institutions, undertaking business in more than 50 countries in six continents. The firm offers legal expertise in antitrust, banking, business fraud, corporate finance, corporate governance, environmental, financial restructuring and reorganizations, healthcare, intellectual property, litigation, mergers and acquisitions, private client, private equity, real estate, regulation, securitization, structured finance, and tax. * Hal Hirsch Joins Alvarez & Marsal to Head Risk Services Group --------------------------------------------------------------- Global professional services firm Alvarez & Marsal disclosed that Hal Hirsch has joined the firm as managing director and head of its newly formed Global Asset Risk Services practice. Leveraging A&M's global platform and depth of expertise, the practice has been established to assist sovereigns, foundations and corporations in tracing, tracking, quantifying and recovering investments and donations in situations including sovereign investments, international military assistance, humanitarian and disaster relief, and fraud. Formerly chair of the global recovery practice at Greenberg Traurig, Mr. Hirsch brings 30 years of experience in complex international and domestic asset investigation, recovery and strategic counseling. Over the course of his career, his efforts have produced more than one billion dollars in cash recoveries on behalf of clients. "From the precedent-setting Lehman Brothers bankruptcy, where we are working to maximize the value of highly complex assets around the world, to the New Orleans public schools in the aftermath of Hurricane Katrina, where mismanagement had jeopardized the very future of the system, A&M has a long and successful track record of identifying and protecting assets and maximizing recoveries for a wide range of entities," said Bryan Marsal, co-CEO of Alvarez & Marsal. "This background, combined with our well-established global forensics and dispute services business, provides an ideal platform for a specialized practice focused on helping clients to locate, track and recover funds in a variety of challenging situations. "Hal's experience and leadership will be invaluable as we continue to position our services at the forefront of global asset advisors and managers capable of comprehending and remediating the world's most complex and sensitive transactions," he added. "All global investors and donors seek to avoid and mitigate significant financial loss by instilling sound financial, transparent and practical policies. Yet, in many cases, accountability, prioritization, reporting and results are beyond investor and donor means," said Mr. Hirsch. "In other cases, investors and donors are seeking to recover their assets or improve their returns-on-investment. By bringing to bear our experience in forensic data analysis, fraud expertise, financial processes, and, in certain instances, as a third party fiduciary services, our services will greatly enhance the accountability, transparency, recovery and integrity of our clients' investments." Throughout his career, Mr. Hirsch has been involved in all aspects of asset investigation and recovery including pursuits related to: anti-money laundering, bank secrecy, Mareva injunctions, Hague Convention and Ponzi fraud. He has conducted internal investigations of public and private entities globally to trace and recover financial and intellectual property lost through mismanagement, fraud and embezzlement. His efforts have assisted foreign countries and the U.S. including testimony before United States Congress to report on the investigation of fraud. In addition, his work led the United States to enter into the only agreement ever executed by the U.S. with a non-sovereign, the client-entity, whereby the U.S. consented to remit all proceeds of international fraud, along with disclosing multiple sovereign intelligence reports (Mutual Legal Assistance Treaty), with sovereign consent. His work also led to the first worldwide Mareva injunction (freezing order) to protect suspect assets from dissipation. Mr. Hirsch served as a federal trustee in bankruptcy for more than a decade, was appointed by the United States Department of Justice and elected as Operating Chapter 11 trustee and trustee in scores of special circumstance and high-profile cases. A graduate of New York University, he earned a law degree from Brooklyn Law School. About Alvarez & Marsal Alvarez & Marsal (A&M) is a global professional services firm specializing in turnaround and interim management, performance improvement and business advisory services. A&M delivers specialist operational, consulting and industry expertise to management and investors seeking to accelerate performance, overcome challenges and maximize value across the corporate and investment lifecycles. Founded in 1983, the firm is known for its distinctive restructuring heritage, hands-on approach and relentless focus on execution and results. * Kirkland Energy Transaction Pro Joins McDermott Will ------------------------------------------------------ Hilary Russ at Bankruptcy Law360 reports that McDermott Will & Emery LLP said Monday that it had lured to its New York office a former Kirkland & Ellis LLP energy attorney whose transaction and restructuring expertise should bolster the firm before a forecasted rise in energy project bankruptcies. The firm said Iskender H. "Alex" Catto -- who helped represent Constellation Energy Group Inc. in its pending $7.9 billion acquisition by Exelon Corp.-- has joined McDermott's energy advisory practice group, according to Law360. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- 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 ***