/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/111021.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, October 21, 2011, Vol. 15, No. 292 Headlines 400 BLAIR: Court Sets Nov. 10 Disclosure Statement Hearing 1002 GEMINI: Voluntary Chapter 11 Case Summary ABCLD HOLDINGS: Court Allows Non-Material Modifications to Plan ABBY REAL ESTATE: Case Summary & 11 Largest Unsecured Creditors ADRENALINA: Restates Third Quarter 2008 Financials ADRENALINA: Restates Second Quarter 2008 Financials AEROFLEX INCORPORATED: Moody's Lowers PDR to B2, Affirms B1 CFR ALMADEN ASSOCIATES: Court Confirms Amended Reorganization Plan ALROSE KING: U.S. Trustee Appoints 3-Member Creditors' Panel ALROSE KING: Brooklyn Federal Seeks Case Conversion to Chapter 7 AMR CORP: Has $162-Mil. Loss in 'Challenging' 3rd Quarter ANDERSON NEWS: Wants 2nd Circ. to Revive Antitrust Suit AQUILEX HOLDINGS: Adopts an Employee Retention Plan ARCTIC GLACIER: Mulls Options Amidst Financial Difficulties BANK OF GRANITE: Stockholders Adopt Agreement and Plan of Merger BANKUNITED FINANCIAL: Wins Bankr. Court Ruling on Tax Refunds BEAR MOUNTAIN: Files Schedules of Assets and Liabilities BIOFUEL ENERGY: Begins Trading on Nasdaq Capital Market BORDERS GROUP: Plan Filing Exclusivity Extended Until Jan. 12 BORDERS GROUP: Travis County Says Plan Not Confirmable BORDERS GROUP: To Sell Singapore License to Popular for $100,000 BORDERS GROUP: Court Supplements Opt-Out Procedures BRIARWOOD CAPITAL: Hearing on Case Conversion Slated for Nov. 9 BRIGHAM EXPLORATION: Moody's Reviews 'B3' Corporate for Upgrade BRIGHTSTAR CORP: S&P Puts 'BB-' Corp. Credit Rating on Watch Neg CAPISTRANO TERRACE: May Use Settlements to Pay Off Creditors CARBON ENERGY: Meeting of Creditors Continued to Oct. 31 CASTLE ARCH: Voluntary Chapter 11 Case Summary CDC PROPERTIES II: Graham & Dunn Okayed as Replacement Counsel CHEF SOLUTIONS: Wins Court Nod to Sell Assets at Auction CHEF SOLUTIONS: Court Approves Donlin as Claims & Noticing Agent CHEYENNE HOTEL: Gets Court OK to Hire Thomas F. Quinn as Counsel CLARENDON HOLDINGS: Court Pegs Gateway Bank Collateral at $475T CLEAR CREEK: Wins Court Nod to Hire Allen Matkins as Counsel COMMUNITY TOWER: Wants to Appoint John Feece as President CROWN REAL: Files Schedules of Assets and Liabilities CYBEX INTERNATIONAL: Incurs $278,000 Third Quarter Net Loss DALLAS STARS: Have Cash-Use Authority to Finish Plan DANA HOLDING: Moody's Raises Corporate Family Rating to 'Ba3' DAVID RUGGERIO: Puts Restaurants in Chapter 11 Bankruptcy DELTA AIR: Named to Dow Jones Sustainability Index DELPHI CORP: Seeks Final Decree Closing 5 Cases DELPHI CORP: Reaches Settlement With EPA DELPHI CORP: Hearing on Injunction vs. Oldco Trustee Adjourned DELPHI CORP: PBGC Head Angled for Slice of Pension Pie DESERT OASIS: Obtains Court Okay to Tap FamCo as Expert Witness DISSOLUTION PROPERTIES: Case Summary & 6 Largest Unsec Creditors DIVERSEY HOLDINGS: Moody's Withdraws 'B2' Corporate Family Rating DLH MASTER: Hires Clouse Dunn as Labor & Employment Counsel DPAC TECHNOLOGIES: Completes Asset Sale to Q-Tech for $10.5MM DRYSHIPS INC: Faces Shareholder Class Action in New York ENERGY AND POWER: Section 341(a) Meeting Scheduled for Nov. 2 FADE IT UP: Voluntary Chapter 11 Case Summary FMI HOLDINGS: Gets Cease Trade Order On Failure to File Reports FRAZER/EXTON: Court Approves $1.9-Mil. DIP Financing From Roskamp FRIENDLY ICE CREAM: Court OKs Epiq as Claims Agent FRIENDLY ICE CREAM: Section 341(a) Meeting Scheduled for Nov. 10 FRY'S ELECTRONICS: Seeks $65 Million from Ex-VP Over Kickbacks GENERAL GROWTH: Files 5th Post-Confirmation Status Report GEORGE SHAMOUN: Flagstar Loan Modification Requires Plan Revision GIORDANO'S ENTERPRISES: Selects Stalking Horse for Restaurant GLUTH BROS: Court Slashes Counsel Fees on Disclosure Violations GO DADDY: To Face Increasing Competition, Moody's Says GRACEWAY PHARMACEUTICALS: Galderma-Led Auction on Nov. 17 GRACEWAY PHARMA: Court OKs Alvarez & Marsal as Advisors GRACEWAY PHARMA: Court OKs Latham & Watkins as Bankruptcy Counsel HANS HOTEL: Case Summary & 20 Largest Unsecured Creditors HARRISBURG, PA: Moving Toward State Receivership to End Bankruptcy HARRISBURG, PA: House Sends Fiscal Emergency Bill to Governor HATHAWAY ENTERPRISES: Court Enters Notice Dismissing Ch. 11 Case HERITAGE LOG: Files for Bankruptcy Amid Fraud Allegations HOTI ENTERPRISES: Court Denies Jonathan Foster Motion to Dismiss HOVNANIAN ENTERPRISES: Sweetens Rejected Tender Offer for Bonds HOVNANIAN ENTERPRISES: Revises Exchange Offers of Debt Securities HUGHES TELEMATICS: Amends 11.3 Million Common Shares Offering HUSSEY CORP: Halkos Holdings Emerges as Second Bidder INNER CITY: Taps Robert Maccini as Chief Restructuring Officer INNER CITY: Reaches Deal With Lenders on Restructuring Plan INNER CITY: Wants to Employ MGBD as Bankruptcy Consultant INNKEEPERS USA: Seeks Approval of Amended Commitment Letter INPHASE TECH: Files for Chapter 11 Bankruptcy Protection JEMA ENTERPRISES: Can't Pursue Claims Over Home Equity Loan JAMESON INN: Affiliate Files for Bankruptcy to Halt Foreclosure JEMANYA CORP: Involuntary Chapter 11 Case Summary JM HUBER: Moody's Assigns 'B1' CFR; Outlook Positive JM HUBER: S&P Assigns 'BB-' Corporate Credit Rating KINGSBURY CORP: Utica Leaseco Withdraws Case Dismissal Plea KINGSBURY CORP: Section 341(a) Meeting Scheduled for Nov. 1 LAS VEGAS RUSSELL: Case Summary & 10 Largest Unsecured Creditors LE-NATURE'S: Ex-CEO Deserves 20 Years for Fraud, Prosecutors Say LEHMAN BROTHERS: Continues to Dominate Trading in Claims LEHMAN BROTHERS: Lloyd's to Pay $500,000 to Settle With GameTech LEHMAN BROTHERS: Proposes to Assume Agreement With Ritz-Carlton LEHMAN BROTHERS: Committee Backs EUR328MM Loan Restructuring LEHMAN BROTHERS: Committee Backs 2012 Incentive Program LEHMAN BROTHERS: Withdraws Plea for Giants Documents LIVERPOOL CITY HOSPITAL: Moody's Lowers LT Bond Rating to 'Ba1' LORAUX ENTERPRISES: Case Summary & 8 Largest Unsecured Creditors LOS ANGELES DODGERS: Judge OKs Protective Discovery Bid LYONDELL CHEMICAL: Blavatnik Balks at Trustee's $300MM Claim M WAIKIKI: Hearing on Bickel & Brewer Hiring Continued to Nov. 2 MACCO PROPERTIES: Ch. 11 Trustee Gets Interim Approval for Loan MACROSOLVE INC: Settles Infringement Suits with 37 Companies MAQ MANAGEMENT: Files Plan, Promises to Pay Unsecureds in 5 Years MAQ MANAGEMENT: Wants Until Nov. 14 to File Disclosure Statement MARCO POLO: Gets Final OK to Pay $2MM Critical Vendors' Claims MARY A II: U.S. Trustee Appoints 6-Member Creditors' Panel MERCED FALLS: Cappello and Noel Approved as Special Counsel MOMENTIVE PERFORMANCE: Expects to Record $653-Mil. in Q3 Sales MOMENTIVE SPECIALTY: Expects to Report $1.2 Billion Sales for Q3 MONARCH FLIGHT: Amegy Loses Bid for Preliminary Injunction MT. JORDAN: Files Amended Disclosure Statement MURDER INC: Case Summary & 20 Largest Unsecured Creditors NEBRASKA BOOK: Plan Exclusivity Extended Until Jan. 23 NEUROLOGIX INC: Authorized Common Shares Hiked to 750 Million NEW LEAF: Orrie Tawes Discloses 19.9% Equity Stake NEWPAGE CORP: Hires Dewey & LeBoeuf as Bankruptcy Counsel NEWPAGE CORP: Employs FTI Consulting as Financial Advisors NEWPAGE CORP: Seeks to Employ PwP as Auditor and Accountant NEWPAGE CORP: Committee Wants to Retain Paul Hastings as Counsel NEWPAGE CORP: Committee Seeks Young Conaway as Co-Counsel NEW ULM: Case Summary & 5 Largest Unsecured Creditors NO FEAR: Seeks Approval to Tap RSM McGladrey as Accountant NO FEAR: SHI Committee to Tap Gibson Dunn as Conflicts Counsel NORTEL NETWORKS: Court Dismisses Appeal Vs. Pensions Regulator NUANCE: Moody's Affirms Corporate Family Rating at 'Ba2' NUANCE COMMUNICATIONS: S&P Affirms 'BB-' Corporate Credit Rating OCIMUM BIOSOLUTIONS: Case Summary & 20 Largest Unsecured Creditors OMEGA NAVIGATION: Opposes Committee Retention of Advisors PARKWOOD ASSOCIATES: Case Summary & 9 Largest Unsecured Creditors PEANUT CITY: Case Summary & 20 Largest Unsecured Creditors PLAN 9: Case Summary & 20 Largest Unsecured Creditors POLYONE CORPORATION: Moody's Affirms 'Ba2' Corp. Family Rating PREMIER PROPERTIES: Case Summary & 10 Largest Unsecured Creditors PROTEONOMIX INC: Examines Licensing of Diabetes Stem Cell Tech. RADDCO ENTERPRISES: Voluntary Chapter 11 Case Summary REGIONALCARE HOSPITAL: Moody's Assigns 'B3' Corp. Family Rating REGIONALCARE HOSPITAL: S&P Assigns Prelim. 'B' Corporate Rating RITE AID: Fitch Affirms Junks Ratings on Senior Unsecured Notes ROCHA DAIRY: Committee Gets Nod to Hire Rocha Farms as Counsel ROCK PARENT: S&P Assigns 'B' Corporate Credit Rating ROTHSTEIN ROSENFELDT: Trustee Seeks $10MM From Levinson Jewelers RQB RESORT: Goldman Acquiring Sawgrass Marriott in Confirmed Plan RVTC LIMITED: Aims Full Payment of Gen. Unsec. Claims in 2 Yrs. SHAMROCK-SHAMROCK INC: Court Terminates Coldwell Banker Services SOLYNDRA LLC: Imperial Says 25 Potential Buyers Have Lined Up SONJA TREMONT-MORGAN: Hannibal Wants Chapter 7 for TV Star SOUTH EDGE: Plan Confirmation Hearing to End Oct. 26 SPRINT NEXTEL: Fitch Lowers Issuer Default Rating to 'B+' SUNVALLEY SOLAR: Enters Into Photovoltaic Contract with Ken Vong SUNVALLEY SOLAR: Board OKs Entry Into SPA with Asher Enterprises SUPERIOR OFFSHORE: Plan Injunction Does Not Stop Suit v. Insurer SWENSON BROS.: Voluntary Chapter 11 Case Summary SWENSON BROTHERS: Case Summary & 8 Largest Unsecured Creditors SWIPE-N-SHINE L.L.C.: Case Summary & Creditors List TELKONET INC: Three Directors Elected at Annual Meeting TELLICO LANDING: Court Sets Nov. 4 Disclosure Statement Hearing TH PROPERTIES: Objects Ch.7 Conversion; Exit Plan in the Works TODD BRUNNER: Creditors Investigate Financial Records TRAVELPORT HOLDINGS: Appoints G. Baiera & R. Buccarelli to Board TRIBUNE CO: Judge 'Within Days' of Ruling on Chapter 11 Plan TROPICANA ENTERTAINMENT: Parties Reach Deal on "Tropicana" Name TSI ACQUISITION: Moody's Withdraws 'Caa1' Corp. Family Rating TURKPOWER CORP: Delays Filing of Quarterly Report on Form 10-Q UNITED RENTAL: Moody's Affirms 'B2' Corporate Family Rating US ROUTE 23: Plan Violates Absolute Priority Rule VAN CHASE: Case Converted to Ch. 7; 341 Meeting on Nov. 4 VAN CHASE: Files Schedules of Assets and Liabilities VILLA D'ESTE: Section 341(a) Meeting Scheduled for Nov. 3 WESTERN COMMUNICATIONS: Has Final OK to Use Bofa Cash Collateral WESTERN COMMUNICATIONS: Files Schedules of Assets and Liabilities XODTEC LED: Delays Filing of Quarterly Report on Form 10-Q Z TRIM HOLDINGS: Inks Manufacturing Agreement with Aveka Group * 'And' Means 'Either' in Home Mortgage-Loan Dispute * Proposed Law Looks to End Delaware's "Bankruptcy Capital" Status * Strategic Value Raises $750MM for New Special Situations Fund * McDonald Hopkins Law Firm Expands Miami Office * BOOK REVIEW: Hospital Turnarounds - Lessons in Leadership ********* 400 BLAIR: Court Sets Nov. 10 Disclosure Statement Hearing ---------------------------------------------------------- Judge Michael B. Kaplan has scheduled a hearing for Nov. 10, 2011, at 10:00 a.m., to consider the adequacy of the disclosure statement filed by 400 Blair Realty Holdings, LLC, in support of its proposed Chapter 11 plan of reorganization. Objections to the adequacy of the Disclosure Statement will be filed with the Clerk of the Bankruptcy Court and served upon counsel for the Debtor, counsel for the Creditor's Committee and upon the United States Trustee no later than 14 days prior to the hearing date. As reported in the TCR on Oct. 14, 2011, the Debtor will seek to unwind in bankruptcy court a deal entered into by a state court- appointed receiver that sold the Debtor's real property in Carteret, New Jersey, in accordance with the Plan. The Debtor had a contract pre-bankruptcy to sell the property to Digital Realty Trust, L.P., for $12,500,000. That agreement, however, was modified in part as a result of Onyx Equities LLC, the receiver, having leased a portion of the Property and Digital's agreement to take title to the property with the tenant in place. Onyx was given approval by the court to conduct a foreclosure sale. According to the Debtor, the prospective purchaser dealt directly with Onyx to purchase the property for less than the contract price. The Debtor believes that the value of the property is at least $13 million. The Debtor intends to seek removal of the receiver and seek costs and damages associated with the receiver's actions. The Debtor also paid to Digital $150,000 as reimbursement of Digital's due diligence expenses. The Debtor intends to pursue the return of these funds pursuant to the Plan. Prior to the Petition Date, the Debtor was embroiled in a foreclosure suit commenced by Wells Fargo Bank, N.A., as trustee to the Registered Holders of Solomon Brothers Mortgage Securities VII, Inc., Commercial Mortgage Pass-Through Certificates, Series 2000-C2, in the United States District Court for the District of New Jersey. The Debtor contested, inter alia, the Court's jurisdiction by asserting the lack of requisite diversity. On July 25, 2011, the Court entered a Foreclosure Judgment for $8.75 million. The Debtor has taken an appeal to the U.S. Court of Appeals for the Third Circuit contesting, inter alia, the lack of diversity jurisdiction and the awarding of certain amounts. The Debtor intends on proceeding with the appeal during the pendency of the Chapter 11 case. In the foreclosure action, on Sept. 1, 2010, SBMS obtained the entry of an order appointing Jonathan Schultz of Onyx as the receiver. Pursuant to Section 543 of the Bankruptcy Code, the receiver was to deliver control of the Property and other information relating thereto to the Debtor. The receiver has not turned over the Property and other information to the Debtor. The Debtor's Plan classifies claims against and interests in the Debtor in seven classes. The Plan splits the $8.7 million Foreclosure Judgment in two classes. Class 2 consists solely of the $5,286,886 principal portion of the SBMS Judgment. Class 3 is for the SBMS Judgment amount less the amount of the Class 2 Claim. Both classes will receive a lien on the Debtor's property. The Debtor will satisfy the Class 2 and Class 3 Claims through (i) payment of interest from and after the Effective Date; (ii) monthly constant principal and interest payments starting on the first day of the second month succeeding the Plan Effective Date with a balloon together with the 48th payment, and (iii) amortization over 20 years. United States Land Resources, L.P., which holds a 50% equity interest in the Debtor, will guarantee the payment and also provide a lien in favor of SBMS on another property owned or controlled by USLR. The assignment of rents held by or in favor of SBMS will be terminated. Class 1 consists of the Allowed Secured Claim of the Borough of Carteret. The Class 1 Claim will retain its lien on the Property. The Debtor will satisfy the Class 1 Claim through (i) payment of interest from and after the Effective Date; (ii) monthly constant principal and interest payments starting on the first day of the second month succeeding the Effective Date with a balloon together with the 48th payment, and (iii) amortization over 20 years. General Unsecured Claims are grouped in Class 5 and will be paid (i) interest at from and after the Effective Date; (ii) monthly constant principal and interest payments starting on the first day of the second month succeeding the Effective Date with a balloon together with the 48th payment, and (iii) amortization over 20 years. The Debtor's scheduled unsecured claims aggregate $2.25 million. Of this amount, $1.29 million are claims held by Insiders. The Interest Rate is 2% per annum above the 30 day LIBOR rate or such other rate as determined by the Court. Classes 2, 3 and 5 are impaired and entitled to vote on the Plan. Success Treuhand GmbH, which holds a 50% equity interest in the Debtor, and USLR -- Classes 6 and 7 -- will retain their interests. The Plan will be funded by USLR. The financing will be secured by a junior lien on the Debtor's property in the aggregate amount of the advances made by USLR. Payments to USLR will be subordinate to all other Classes of Claims. Although not necessary to the Debtor's ability to consummate the Plan, the Debtor will seek a ruling from the Bankruptcy Court entitling the Debtor to utilize the rents derived from the Property so as to reduce the sums to be advanced by USLR. Post-confirmation, the Debtor will have Realty Management Associates oversee the property without compensation, according to the Plan. Onyx will be terminated. About 400 Blair Realty 400 Blair Realty Holdings, LLC, in Morristown, New Jersey, was formed in June 2000 to acquire real property improved with 181,000 sq. ft industrial building situated on 14.7 acres located at 400 Blair Road, Carteret, Middlesex County, New Jersey. The Property was acquired on Aug. 6, 1999. United States Land Resources, L.P., holds a 50% equity interest in 400 Blair. USLR's general partner is United States Realty Resources, Inc., and Lawrence S. Berger is the president of USRR. 400 Blair's other member is Success Treuhand GmbH, which holds a 50% equity interest. Success is a trust set up under German law. Success operates much like a United States trust company. Success' sole owner is Eckart Straub, a German national. 400 Blair filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 11-37887) on Sept. 23, 2011, after a court appointed a receiver for its property and ordered a foreclosure sale. Judge Michael B. Kaplan presides over the case. 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 Lawrence S. Berger, manager. The Debtor's bankruptcy counsel is Morris S. Bauer, Esq., at Norris McLaughlin & Marcus, PA, in Bridgewater, New Jersey. 1002 GEMINI: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: 1002 Gemini Interests LLC 5116 Bissonnet, #154 Bellaire, TX 77401 Bankruptcy Case No.: 11-38815 Chapter 11 Petition Date: October 17, 2011 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Letitia Z. Paul Debtor's Counsel: Barbara Mincey Rogers, Esq. ROGERS & ANDERSON, PLLC 1415 North Loop West, Suite 1020 Houston, TX 77008 Tel: (713) 868-4411 Fax: (713) 868-4413 E-mail: brogers@ralaw.net Scheduled Assets: $2,946,152 Scheduled Debts: $3,470,825 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Kellie Nwokedi, member. ABCLD HOLDINGS: Court Allows Non-Material Modifications to Plan --------------------------------------------------------------- Judge Barbara J. Houser granted the request of ABCLD Holdings, LLC and secured creditor Armed Forces Bank to make non-material modifications to their proposed plan of reorganization. The Debtor's Plan of Reorganization was distributed to creditors on or about July 1, 2011, with a deadline for creditors to return ballots of Aug. 1, 2011. Armed Forces Bank or AFB is an impaired secured creditor holding a Class 4 secured claim. AFB has voted for the Plan and the Plan as amended. AFB's loan to the Debtor was participated with another financial institution prepetition. As a result of postpetition negotiations, AFB and the Debtor have modified the plan of reorganization. Under the amended plan, the Debtor will issue two notes to satisfy Class 4 under the Plan instead of one instrument. This change was incorporated into the Amended Plan of Reorganization. The change to the treatment of Class 4 creditors does not materially affect any creditors that have voted for or against the Plan, the Court opined. No further notice, solicitation, or balloting is thus required prior to confirmation of the Amended Plan. About ABCLD Holdings Dallas, Texas-based ABCLD Holdings is a Nevada limited liability company created on March 18, 2011, to acquire properties owned by FRE Real Estate Inc. in Texas for $59.8 million. All of the capital stock of ABCLD Holdings is owned by ABC Land & Development, Inc., which is a corporation owned by Ronald Akin and DTS Holdings, LLC. FRE filed for bankruptcy Jan. 4, 2011. The case was dismissed March 1, 2011. ABCLD filed for bankruptcy to implement a prepetition settlement agreement with Armed Forces Bank, as successor by merger to Bank Midwest, N.A. is the secured creditor with respect to the acquired FRE Properties. AFB played an active role in obtaining dismissal of the FRE bankruptcy proceeding. The Agreement contemplates the foreclosure of certain of the properties, a prepackaged bankruptcy filing, and the restructuring of the AFB debt. ABCLD commenced the prepackaged Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 11-34969) on Aug. 1, 2011. Judge Barbara J. Houser presides over the case. Melissa S. Hayward, Esq., at Franklin Skierski Lovall Hayward LLP, serves as bankruptcy counsel to the Debtor. In its petition, the Debtor estimated assets of $50 million to $100 million and debts of $10 million to $50 million. The petition was signed by Craig Landess, vice president. Armed Forces Bank is represented by Keith Miles Aurzada, Esq., at Bryan Cave LLP. According to its schedules, the Debtor disclosed $66,579,892 in total assets and $40,454,914 in total debts. ABBY REAL ESTATE: Case Summary & 11 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Abby Real Estate Development, LLC 637 Gifford Street Falmouth, MA 02540 Bankruptcy Case No.: 11-19838 Chapter 11 Petition Date: October 18, 2011 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Honoria DaSilva-Kilgore, Esq. THE LAW OFFICES OF HONORIA DASILVA-KILGORE, P.C. 2 Richard Street, P.O. Box 277 Raynham, MA 02767 Tel: (508) 822-3200 Fax: (508) 822-3289 E-mail: HDKLaw@HDKLawOffices.com Scheduled Assets: $5,410,131 Scheduled Debts: $4,010,377 A list of the Company's 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mab11-19838.pdf The petition was signed by Dr. Robin S. Peters, managing member. ADRENALINA: Restates Third Quarter 2008 Financials -------------------------------------------------- Adrenalina filed on Oct. 6, 2011, on Form 10-Q/A-1, restated financial statements for the three and nine months ended Sept. 30, 2008, to correct an error discovered during the third quarter of 2011, related to the accounting of the discount attributable to detachable warrants on convertible debt issue in November 2007, February 2008 and August 2008. This error was due to the application of an incorrect amortization period on the discount attributable to the warrants. The correction of this error resulted in an increase of the carrying value of the convertible debt due to the decrease in the discount amount at Sept. 30, 2008, as well as an increase of in interest expense and net loss by approximately $437,000 for the nine months ended Sept. 30, 2008. The net loss for the three months ended Sept. 30, 2008, increased to $2,095,000 from $1,262,000 for the three months ended Sept. 30, 2007, an increase of $833,000, or 66%. Total revenues for the three months ended Sept. 30, 2008 increased $518,000 or 55.6% as compared to the three months ended Sept. 30, 2007. The net loss for the nine months ended Sept. 30, 2008, increased to $6,635,000 from $3,486,000 for the nine months ended Sept. 30, 2007, an increase of $3,149,000 or 90.3%. Total revenues for the nine months ended Sept. 30, 2008, increased $1,290,000 or 52.2% as compared to the nine months ended Sept. 30, 2007. The Company's balance sheet at Sept. 30, 2011, showed $11,934,164 in total assets, $11,753,261 in total liabilities, and stockholders equity of $180,903. "The Company continued to incur significant operating losses through the nine months ended Sept. 30, 2008, which raise substantial doubt about the Company's ability to continue as a going concern," the Company said in the filing. "As shown in the accompanying financial statements, the Company has incurred net losses of approximately $6,635,000 and $3,486,000 for the nine months ended Sept. 30, 2008, and 2007, respectively. Additionally, the Company has used cash flows in operations of approximately $993,000 and $3,904,000 for the nine months ended Sept. 30, 2008, and 2007, respectively.? A complete text of the Form 10-Q/A-1 is available for free at: http://is.gd/nCscrn Hallandale, Florida-based Adrenalina is a retail, entertainment, media and publishing company that is focused on the nature and lifestyle surrounding extreme sports and outdoor adventures. ADRENALINA: Restates Second Quarter 2008 Financials --------------------------------------------------- Adrenalina filed on Oct. 6, 2011, on Form 10-Q/A-2, restated financial statements for the three and six months ended June 30, 2008, to correct an error related to the accounting of discount attributable to detachable warrants on convertible debt issued in November 2007 and February 2008. This error was due to the application of an incorrect amortization period on the discount attributable to the warrants. The correction of this error resulted in an increase of the carrying value of the convertible debt due to the decrease in the discount amount at June 30, 2008, as well as an increase of in interest expense and net loss by approximately $272,000 for the six months ended June 30, 2008. The net loss for the three months ended June 30, 2008, increased to approximately $2,125,300 from $1,002,100 for the three months ended June 30, 2007, an increase of $1,123,200 or 112.1%. Net revenues for the three months ended June 30, 2008, increased $517,300 or 76.4% as compared to the three months ended June 30, 2007, The net loss for six months ended June 30, 2008 increased to approximately $4,540,000 from $2,224,000 for the six months ended June 30, 2007, an increase of $2,316,000 or 104.1%. Net revenues for the six months ended June 30, 2008 increased $771,800 or 50.1% as compared to the six months ended June 30, 2007. The Company's balance sheet at June 30, 2011, showed $10,775,935 million in total assets, $9,622,025 in total liabilities, and stockholders equity of $1,153,910. "The Company continued to incur significant operating losses through the six months ended June 30, 2008, which raise substantial doubt about the Company's ability to continue as a going concern," the Company said in the filing. "As shown in the accompanying financial statements, the Company has incurred net losses of approximately $4,540,000 and $2,224,000 for the six months ended June 30, 2008, and 2007, respectively. Additionally, the Company has used cash flows in operations of approximately $288,000 and $1,435,000 for the six months ended June 30, 2008, and 2007, respectively.? A complete text of the Form 10-Q/A-2 is available for free at: http://is.gd/tIWE2U Hallandale, Florida-based Adrenalina is a retail, entertainment, media and publishing company that is focused on the nature and lifestyle surrounding extreme sports and outdoor adventures. AEROFLEX INCORPORATED: Moody's Lowers PDR to B2, Affirms B1 CFR --------------------------------------------------------------- Moody's Investors Service downgraded the Probability of Default Rating (PDR) of Aeroflex Incorporated ("Aeroflex") to B2 from B1. Moody's also affirmed the Corporate Family Rating (CFR) and senior secured revolving credit facility and term loan at B1, and the speculative grade liquidity rating at SGL-2. The outlook remains stable. The following rating was downgraded: Probability of Default Rating to B2 from B1 The following ratings were affirmed: Corporate Family Rating at B1 Speculative Grade Liquidity Rating at SGL-2 These LGD point estimates were revised: $75 million Senior Secured Revolving Credit Facility due 2016 -- to B1 (LGD-3, 32%) from B1 (LGD-3, 49%) $725 million Senior Secured Term Loan B due 2018 -- to B1 (LGD-3, 32%) from B1 (LGD-3, 49%) RATINGS RATIONALE The downgrade of the PDR is a function of the recent refinancing of Aeroflex's debt and reflects the resulting priority of claims for the company's debt. As of June 30, 2011, Aeroflex had put in place a new capital structure comprised only of 'all-first lien' bank debt ($75 million senior secured revolver and $725 million senior secured term loan) and subsequently retired all other outstanding debt instruments, including the unsecured notes. As a consequence, Moody's is revising the expected family recovery rate on the new debt to 65% from 50%. The better than average family recovery rate results in a higher default probability, which results in the Probability of Default Rating of B2 (one notch below the Corporate Family Rating of B1). As the only debt instruments in the capital structure, the senior secured credit facilities are rated at B1. The revision of the loss given default assessment on the debt instruments to LGD-3 (32%) from LGD-3 (49%) is a function of the higher expected recovery rate and reflects the priority position of the revolver and senior secured term loan in the debt structure relative to the unsecured trade payables and operating lease obligations. The affirmation of the CFR at B1 reflects Aeroflex's continuing position as the primary or sole source provider in various niche markets, as well as its high and relatively stable gross margins, good operating profitability and Moody's expectation of positive free cash flow in 2012 (especially given its low capex fables operating model). The principal methodology used in rating Aeroflex Incorporated (Vertias Capital) was the Global Semiconductor Industry Methodology published in November 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. ALMADEN ASSOCIATES: Court Confirms Amended Reorganization Plan -------------------------------------------------------------- The Hon. Edward D. Jellen of the U.S. Bankruptcy Court for the Northern District of California confirmed Almaden Associates, LLC's Amended Plan of Reorganization dated June 30, 2011, as modified and supplemented. As reported in the Troubled Company Reporter on Aug. 12, 2011, the treatment of secured creditors varies under the Plan. As to the different mortgage holders, Mechanics Bank will be paid current interest until two years from the Effective Date of the Plan, when it will be paid in full. The notes of other secured creditors will remain secured by the existing liens, will be paid on an interest only basis and will be due in full two years from the Effective Date of the Plan. The Plan dated June 9, 2011, as modified on June 30, 2011, provides that through the ongoing management and sale or refinancing of its real property portfolio, the Debtor will pay all allowed general unsecured creditors in full over a period of two years. Holders of allowed non-priority unsecured claims in the amount of $1,000 or less are unimpaired and each will be paid a lump sum dividend equal to the amount of its allowed claim within 60 days after the Effective Date. Unpaid Allowed priority creditors will be paid in full shortly after confirmation of the Plan. Interest holders will retain their interests. A copy of the Amended Combined Plan And Disclosure Statement is available at http://bankrupt.com/misc/almaden.combinedplanDS.pdf About Almaden Associates, LLC Dublin, California-based Almaden Associates, LLC, is a California limited liability company. Its principal owner (and responsible individual in this Chapter 11 case) is Sidney Corrie, Jr. Its minority member is Corrie Development Corporation ("CDC"), which manages the Debtor's real property portfolio. CDC is wholly-owned by Sidney Corrie, Jr. The Company filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 10-41903) on Feb. 22, 2010. The Company estimated its assets and debts at $10 million to $50 million. The Debtor is represented by Joel K. Belway, Esq., at The Law Office of Joel K. Belway, in San Francisco, California, as counsel. ALROSE KING: U.S. Trustee Appoints 3-Member Creditors' Panel ------------------------------------------------------------ Christine H. Black, the Assistant United States Trustee for Region 2 in the Central Islip, New York office, pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Alrose King David LLC. The Creditors Committee members are: 1. East End Builders Group, Inc. 1029 William Floyd Parkway Shirley, NY 11967 ATTN: Jonathan Rubin 2. Demonte Plumbing & Heating 367 Veterans Memorial Highway Commack, NY 11725-4336 ATTN: Robert Demonte 3. Atelier Lumiere, Inc. 33 W. 17th Street, # 901 New York, NY 10011-5520 ATTN: Kazumi Tanimura About Alrose King 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: Brooklyn Federal Seeks Case Conversion to Chapter 7 ---------------------------------------------------------------- Brooklyn Federal Savings Bank asks the U.S. Bankruptcy Court for the Eastern District of New York to convert the bankruptcy case of Alrose King David LLC into a proceeding under Chapter 7 of the Bankruptcy Code. BFSB asserts that conversion to Chapter 7 is proper in Alrose King's case because the Debtor is not operating in the best interests of the creditors and of the estate. Counsel to BFSB, Christopher R. Belmonte, Esq., at Satterlee Stephens Burke & Burke LLP, in New York, relates that the Debtor has had a negative cash flow since Sept. 1, 2009, when it entered into a 50-year lease with affiliate Alrose Allegria LLC for rent which was only 10% of the amount of the monthly payments owed to BFSB which holds the first priority secured debt on the Property. Compounding the conflict of transferring its only income-producing assets for a small percent of its ongoing expenses, he cites, the Debtor has never even collected rent under the lease from its affiliate, and has not commenced any action to collect such unpaid rent. The Debtor has secured debts owed to BFSB totaling approximately $38 million as of the Petition Date, Mr. Belmonte relays. About Alrose King 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. AMR CORP: Has $162-Mil. Loss in 'Challenging' 3rd Quarter --------------------------------------------------------- AMR Corporation filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $162 million on $6.37 billion of total operating revenues for the three months ended Sept. 30, 2011, compared with net income of $143 million on $5.84 billion of total operating revenues for the same period during the prior year. The Company also reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $373 million on $16.58 billion of total operating revenues for the same period a year ago. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company also reported a net loss of $722 million for the six months ended June 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities and a $4.83 billion stockholders' deficit. "While the third quarter was challenging for American Airlines, we are taking aggressive actions to improve the Company's performance and strengthen its foundation for long-term success," said AMR Chairman and CEO Gerard Arpey. "We have put in place many of the critical building blocks for a successful future, including a strong network and alliance partnerships, accelerated fleet renewal plans and innovative products and services to enhance our customers' experience. At this point, our immediate top priority is to address the key remaining foundational issue, which is our cost structure, so that we can change the competitive dynamics and move our company forward on the path to profitability." A full-text copy of the Form 10-Q is available for free at: http://is.gd/baAbsS About AMR Corporation Headquartered in Fort Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. As of Dec. 31, 2009, American provided scheduled jet service to approximately 160 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * AMR carries a 'CCC' issuer default rating from Fitch Ratings, 'Caa1' corporate family and probability of default ratings from Moody's, and a 'B-' corporate credit rating from Standard & Poor's. In November 2010, Standard & Poor's Ratings Services revised its outlook on AMR Corp. and its major operating subsidiary, American Airlines Inc., to stable from negative, based on AMR's improved operating performance, which has bolstered credit quality. S&P also affirmed its 'B-' corporate credit rating and most issue ratings on the two companies and lowered selected ratings on American's enhanced equipment trust certificates. ANDERSON NEWS: Wants 2nd Circ. to Revive Antitrust Suit ------------------------------------------------------- Richard Vanderford at Bankruptcy Law360 reports that Anderson News LLC on Wednesday asked the Second Circuit to revive an antitrust suit claiming magazine publishers including Time Inc. drove it into bankruptcy by uniformly balking at a proposed price increase. Anderson News LLC is a sales and marketing company for books and magazines. Anderson News ceased doing business in February 2009, and was the subject of an involuntary bankruptcy filing (Bankr. D. Del. 09-_____) on March 2, 2009, on which an order for relief was entered on Dec. 30, 2009. The publishing companies claimed that Anderson News owes them a combined $37.5 million. Anderson News converted the case to a voluntary chapter 11 case on the same day. AQUILEX HOLDINGS: Adopts an Employee Retention Plan --------------------------------------------------- Aquilex Holdings LLC, on Oct. 13, 2011, adopted an employee retention plan that covers certain of the Company's managers and executives, including L.W. Varner, Jr., the Company's principal executive officer, Jay Ferguson, the Company's principal financial officer, and Pedro Amador, a named executive officer. Pursuant to the Employee Retention Plan, and subject to the payment mechanism, the Company expect to make bonus payments to Mr. Varner, Mr. Ferguson and Mr. Amador of $290,000, $200,000 and $130,000, respectively. Under the Employee Retention Plan, each Covered Employee will receive a bonus payment, one-half of which will be payable upon the Covered Employee's entry into an agreement confirming acceptance of the terms of the Employee Retention Plan. Subject to certain conditions, the remaining one-half of the bonus payment shall be payable to the Covered Employee on the date that is ninety days following the consummation of a change of control, if any, of the Company. In the event that a Covered Employee is terminated without cause before the Payment Date, the Covered Employee will be paid a prorated percentage of the bonus. In the event that a Covered Employee is terminated with cause or voluntarily resigns before the Payment Date, the Covered Employee will not receive any further bonus payments and will be required to return to the Company the bonus payments previously received under the Employee Retention Plan. If any amounts are so returned, the Company may reallocate those amounts to other Covered Employees. In addition to the bonus payments provided for under the Employee Retention Plan, on Oct. 17, 2011, the Company paid Mr. Varner a discretionary bonus in the amount of $250,000. About Aquilex Holdings Aquilex Holdings LLC is the parent of Aquilex Corporation, a leading provider of critical maintenance, repair and industrial cleaning solutions to the energy industry. Through our divisional and branch offices in the United States and Europe, we provide our services to a diverse global base of over 600 customers, primarily in the oil and gas refining, chemical and petrochemical production, fossil and nuclear power generation and waste-to- energy industries. The Company reported a net loss of $13.9 million on $226.6 million of revenues for the six months ended June 30, 2011, compared with a net loss of $25.1 million on $213.3 million of revenues for the same period of 2010. The Company's balance sheet at June 30, 2011, showed $670.5 million in total assets, $490.9 million in total liabilities, and stockholders' equity of $179.6 million. The Company's Credit Agreement requires it to maintain certain financial ratios, including a minimum ratio of Adjusted EBITDA to total interest expense and maximum ratios of total debt and senior secured debt to Adjusted EBITDA. "While the Company was in compliance with its debt covenants as of June 30, 2011, based on current business conditions and forecast, there can be no assurance that the Company will be in compliance with those covenants as of Sept. 30, 2011, or thereafter," the Company said in its Form 10-Q for the quarter ended June 30, 2011. ARCTIC GLACIER: Mulls Options Amidst Financial Difficulties ----------------------------------------------------------- Arctic Glacier Income Fund has been advised by Toronto Stock Exchange that TSX is reviewing the eligibility for continued listing of the units of the Fund. The Fund is being reviewed under TSX's Remedial Review Process and has been granted 30 days, subject to any further extensions that may be granted by TSX in its discretion, to comply with all TSX requirements for continued listing. If the Fund is unable to demonstrate on or before November 21, 2011 that it meets, or is expected to meet within a reasonable period of time, all TSX requirements for continued listing, the units will be delisted 30 days from such date. TSX initiated its delisting review due to (i) the Fund's difficult financial condition, including its current default under its credit facilities with its lenders and (ii) the trading price of the Fund's units has been so reduced as to potentially not warrant continued listing. The Fund is continuing to actively pursue financing and strategic alternatives to resolve its current financial situation and hopes to have secured transactions in place prior to November 21, 2011 that will satisfy TSX that continued listing of the Fund's units on TSX is warranted. In the event that the Fund cannot satisfy TSX that continued listing on TSX is warranted, it will consider submitting an application to an alternative marketplace for trading of the Fund's units. The Fund will advise unitholders of the status of the Fund's TSX listing and other developments affecting the Fund as the process advances. About Arctic Glacier Arctic Glacier Income Fund, through its operating company, Arctic Glacier Inc., is a leading producer, marketer and distributor of high-quality packaged ice in North America, primarily under the brand name of Arctic Glacier(R) Premium Ice. Arctic Glacier operates 39 production plants and 48 distribution facilities across Canada and the northeast, central and western United States servicing more than 75,000 retail locations. BANK OF GRANITE: Stockholders Adopt Agreement and Plan of Merger ---------------------------------------------------------------- Bank of Granite Corporation held a special meeting of its stockholders on Oct. 18, 2011. At the Special Meeting, the stockholders adopted the Agreement and Plan of Merger, dated as of April 26, 2011, as amended on June 16, 2011, and Aug. 15, 2011, by and among FNB United Corp., Gamma Merger Corporation, a wholly owned subsidiary of FNB United Corp., and the Company, as the agreement may be further amended from time to time and approved the merger described therein. The stockholders also approved on a non-binding, advisory basis, change of control severance payments to certain named executive officers of the Company that are based on or other wise relate to the merger. The stockholders agreed to adjourn the special meeting of stock holders, if necessary, to solicit additional proxies if there are not sufficient votes to approve the merger proposal. About Bank of Granite Granite Falls, N.C.-based Bank of Granite Corporation is a Delaware corporation that was organized June 1, 1987, as a bank holding company. The Company's only businesses are the ownership and operation of Bank of Granite, a state bank chartered under the laws of North Carolina on Aug. 2, 1906, and Granite Mortgage, Inc., a mortgage bank chartered under the laws of North Carolina on June 24, 1985. Granite Mortgage discontinued its origination activities during 2009. The Company conducts its community banking business operations from 20 full-service offices located in Burke, Caldwell, Catawba, Forsyth, Iredell, Mecklenburg, Watauga, and Wilkes counties in North Carolina. The Company's balance sheet at June 30, 2011, showed $807.06 million in total assets, $787.75 million in total liabilities, and $19.30 million in total stockholders' equity. Cease and Desist Order In 2009, Bank of Granite entered into a Stipulation and Consent to the issuance of an Order to Cease and Desist by the Federal Deposit Insurance Corporation and the North Carolina Commissioner of Banks. Based on the Company's Consent, the FDIC and the Commissioner jointly issued the Order on Aug. 27, 2009. The Order requires the Bank to achieve and maintain Tier 1 Leverage Capital Ratio of not less than 8% and a Total Risk-Based Capital of not less than 12% for the life of the Order. Going Concern Doubt The Company reported a net loss of $23.66 million on $44.80 million of total interest income for the year ended Dec. 31, 2010, compared with a net loss of $25.62 million on $52.64 million of total interest income during the prior year. Dixon Hughes PLLC, in Charlotte, North Carolina, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2010 financial results. The independent auditors noted that the Company incurred net losses in 2010 and 2009, primarily from higher provisions for loan losses. Bank of Granite Corporation's wholly-owned bank subsidiary is under a regulatory order that requires, among other provisions, higher regulatory capital requirements. The Bank did not meet the higher capital requirements as of Dec. 31, 2010 and is not in compliance with the regulatory agreement. Failure to comply with the regulatory agreement may result in additional regulatory enforcement actions. BANKUNITED FINANCIAL: Wins Bankr. Court Ruling on Tax Refunds ------------------------------------------------------------- BankUnited Financial Corporation, a Florida corporation and debtor-in-possession disclosed that the United States Bankruptcy Court for the Southern District of Florida on October 19, 2011 announced a ruling in the Company's favor relating to the ownership of anticipated federal tax refunds in the estimated amount in excess of $45 million. United States Bankruptcy Judge Laurel M. Isicoff announced that she will issue a written decision and order granting the Company's motion for summary judgment and denying the cross motion for summary judgment filed by Federal Deposit Insurance Corporation as Receiver for the Company's failed bank subsidiary. The effect of the ruling is a determination that the Company's bankruptcy estate is the sole owner of the tax refunds, subject to the right of the FDIC to receive the first $7.5 million of the refund and assert a general unsecured claim against the estate of $45 million under a prior settlement agreement approved by the Court. The written ruling is expected to be issued within the next two weeks, and the FDIC is expected to appeal the decision. About BankUnited Financial BankUnited Financial Corp. (OTC Ticker Symbol: BKUNQ) -- http://www.bankunited.com/-- was the holding company for BankUnited FSB, the largest banking institution headquartered in Coral Gables, Florida. On May 21, 2009, BankUnited FSB was closed by regulators and the Federal Deposit Insurance Corporation facilitated a sale of the bank to a management team headed by John Kanas, a veteran of the banking industry and former head of North Fork Bank, and a group of investors led by W.L. Ross & Co. BankUnited, FSB, had assets of $12.8 billion and deposits of $8.6 billion as of May 2, 2009. The Company and its affiliates filed for Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 09-19940) on May 22, 2009. Stephen P. Drobny, Esq., and Peter Levitt, Esq., at Shutts & Bowen LLP; Mark D. Bloom, Esq., and Scott M. Grossman, Esq., at Greenberg Traurig, LLP; and Michael C. Sontag, at Camner, Lipsitz, P.A., represent the Debtors as counsel. Corali Lopez-Castro, Esq., David Samole, Esq., at Kozyak Tropin & Throckmorton, P.A.; and Todd C. Meyers, Esq., at Kilpatrick Stockton LLP, serve as counsel to the official committee of unsecured creditors. In its bankruptcy petition, BankUnited Financial Corp. disclosed $37,729,520 in assets against $559,740,185 in debts. Aside from those assets, BankUnited said that a "valuable" asset is its $3.6 billion net operating loss carryforward. Wilmington Trust Co., U.S. Bank, N.A., and the Bank of New York were listed among the company's largest unsecured creditors in their roles as trustees for security issues. BankUnited estimated the Bank of New York claim tied to convertible securities at $184 million. U.S. Bank and Wilmington Trust are owed $120 million and $118.171 million on account of senior notes. BEAR MOUNTAIN: Files Schedules of Assets and Liabilities -------------------------------------------------------- Bear Mountain Ranch Holdings LLC filed with the Bankruptcy Court for the Eastern District of Washington its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $10,192,000 B. Personal Property $2,813,047 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $4,361,879 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $77,914 ----------- ----------- TOTAL $13,005,047 $4,439,811 Chelan, Washington-based Bear Mountain Ranch Holdings LLC -- fka Bear Mountain LLC and dba Bear Mountain Orchards -- filed for Chapter 11 bankruptcy (Bankr. E.D. Wash. Case No. 11-04354) on Sept. 1, 2011, before Judge Patricia C. Williams. Barry W. Davidson, Esq. -- cnickerl@dbm-law.net -- at Davidson Backman Medeiros PLLC, serves as the Debtor's counsel. Robert D. Miller Jr., the United States Trustee for the Eastern District of Washington, in Spokane, failed to appoint an official committee of unsecured creditors. BIOFUEL ENERGY: Begins Trading on Nasdaq Capital Market ------------------------------------------------------- BioFuel Energy Corp., on Oct. 17, 2011, received a letter from The Nasdaq Stock Market indicating that the Company's application to list its common stock on the Nasdaq Capital Market had been approved. The Company's shares, which were previously traded on the Nasdaq Global Market, began trading on the Nasdaq Capital Market under its current symbol "BIOF" at the market opening on Oct. 18, 2011. On April 20, 2011, the Company had been notified that the bid price of its common stock had not met the minimum $1.00 per share required for continued listing on the Nasdaq Global Market. Under Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided an initial period of 180 calendar days in which to regain compliance. The letter states that the Nasdaq staff has determined that the Company (1) has not been able to regain compliance within the initial 180 day compliance period and (2) is eligible for an additional 180 day period, or until April 16, 2012, to come into compliance with the Rule. If the Company does not regain compliance with Rule 5450(a)(1) by April 16, 2012, the Nasdaq staff will provide written notice that the Company's securities are subject to delisting. At that time, the Company may appeal Nasdaq's determination to delist its securities to a Hearings Panel. In any event, in order to meet the $1.00 minimum bid price requirement to maintain its listing on the Nasdaq Capital Market, the Company may have to effect a reverse stock split, which would require the approval of the Company's stockholders. About Biofuel Energy Denver, Colo.-based BioFuel Energy Corp. (Nasdaq: BIOF) -- http://www.bfenergy.com/-- aims to become a leading ethanol producer in the United States by acquiring, developing, owning and operating ethanol production facilities. It currently has two 115 million gallons per year ethanol plants in the Midwestern corn belt. The Company reported a net loss of $25.22 million on $453.41 million of net sales for the year ended Dec. 31, 2010, compared with a net loss of $19.70 million on $415.51 million of net sales during the prior year. The Company's balance sheet at June 30, 2011, showed $311.74 million in total assets, $219.59 million in total liabilities and $92.14 million in total equity. Going Concern Doubt; Bankruptcy Warning Grant Thornton LLP, in Denver, did not issue a going concern qualification after auditing the Company's financial statements for the year ended Dec. 31, 2010. As reported in the Troubled Company Reporter on March 31, 2010, Grant Thornton LLP, in Denver, expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted that the Company has experienced declining liquidity and has $16.5 million of outstanding working capital loans that mature in September 2010. In the Form 10-K for the year ended Dec. 31, 2010, the Company noted that its ability to make payments on and refinance its $230 million senior debt facility -- of which $189.4 million was outstanding as of Dec. 31, 2010 -- depends on its ability to generate cash from operations. The Company noted that during its first two full years' of operations, it has been unable to consistently generate positive cash flow. In addition, it continues to have, severely limited liquidity, with $7.4 million of cash on hand as of Dec. 31, 2010. "If we do not have sufficient cash flow to service our debt, we would need to refinance all or part of our existing debt, sell assets, borrow more money or raise additional capital, any or all of which we may not be able to do on commercially reasonable terms or at all. If we are unable to do so, we may be required to curtail operations or cease operating altogether, and could be forced to seek relief from creditors through a filing under the U.S. Bankruptcy Code. Because the debt under our Senior Debt Facility subjects substantially all of our assets to liens, there may be no assets left for stockholders in the event of a liquidation. In the event of a foreclosure on all or substantially all of our assets, we may not be able to continue to operate as a going concern." BORDERS GROUP: Plan Filing Exclusivity Extended Until Jan. 12 ------------------------------------------------------------- Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York extended Borders Group, Inc. and its debtor affiliates' exclusive deadlines under Section 1121(d) of the Bankruptcy Code to: (i) file a Chapter 11 plan through and including January 12, 2012; and (ii) solicit acceptances of that plan through and including March 12, 2011. The Court's order is without prejudice to the Debtors' rights to seek a further extension or extensions of the Exclusive Periods, or of parties-in-interest to seek reductions thereof, Judge Glenn held. On October 3, 2011, the Debtors and the Official Committee of Unsecured Creditors filed a Joint Plan of Liquidation, whereby the Debtors' assets will be put in a liquidating trust for distribution to creditors. The Court will consider adequacy of the disclosure statement accompanying the Plan on November 10, 2011. Objections to the Disclosure Statement are due no later than November 3. About Borders Group Borders Group operated book, music and movie superstores and mall based bookstores under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States. At Jan. 29, 2011, the Company operated 639 stores in the United States and 3 in Puerto Rico. The Company also operated a proprietary e-commerce Web site -- http://www.Borders.com/-- launched in May 2008, which included both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and roughly 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. Lowenstein Sandler represents the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders is completing going-out-of-business sales that began at all of its remaining locations in July. The creditors? committee said before the liquidation began that Borders expected to generate $252 million to $284 million in cash from the sales. Borders is selling store leases separately. Borders selected proposals by Hilco and Gordon Brothers to conduct going out of business sales for all stores after no going concern offers of higher value were submitted by the deadline. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000 BORDERS GROUP: Travis County Says Plan Not Confirmable ------------------------------------------------------ Travis County Assessor-Collector Nelda Wells opposes approval of the disclosure statement explaining the Debtors' Joint Plan of Liquidation. Travis County complains that the Plan does not allow for payment of its claim as secured along with 12% interest. The Debtors' failure to include Travis County's fully secured claim with 12% interest renders the Plan unfair and unequitable as to Travis County under Sections 511(a) and 1129(b)(2)(A) of the Bankruptcy Code, argues Karon Y. Wright, Esq., in Austin, Texas -- karon@wright@co.travis.tx.us -- assistant county attorney. She further contends that the Plan violates Sections 32.05 and 33.01 of the Texas Property Tax Code. State created property rights will not be destroyed in a bankruptcy context, she insists. Travis County, City of Austin, Austin Independent School District, Austin Community College, and Travis County Healthcare dba Central Health, are collectively referred to as Travis County. The Chapter 11 Plan Borders Group, Inc. and its debtor affiliates and the Official Committee of Unsecured Creditors submitted to Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York a Joint Plan of Liquidation and accompanying disclosure statement on October 3, 2011. The purpose of the Plan is to liquidate, collect, and maximize the Cash value of the remaining assets of the Debtors and make distributions in respect of any allowed claims against the Debtors' estates. The Plan is premised on the satisfaction of claims through creation of a liquidating trust and distribution of the proceeds raised from the sale and liquidation of the Debtors' remaining assets, claims and causes of action. Under the Plan, secured creditors will full payment of their claims. Recovery by unsecured creditors is subject to funds recovered by the liquidating trustee. Equity holders won't receive anything. The Plan Proponents will ask the Court to confirm the Plan at a hearing Dec. 19, 2011. Objections, if any, to confirmation of the Plan must be filed and served so that they are received on or before Dec. 14, 2011. Full-text copies of the Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/Borders_Oct3Plan.pdf http://bankrupt.com/misc/Borders_Oct3DS.pdf About Borders Group Borders Group operated book, music and movie superstores and mall based bookstores under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States. At Jan. 29, 2011, the Company operated 639 stores in the United States and 3 in Puerto Rico. The Company also operated a proprietary e-commerce Web site -- http://www.Borders.com/-- launched in May 2008, which included both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and roughly 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. Lowenstein Sandler represents the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders is completing going-out-of-business sales that began at all of its remaining locations in July. The creditors? committee said before the liquidation began that Borders expected to generate $252 million to $284 million in cash from the sales. Borders is selling store leases separately. Borders selected proposals by Hilco and Gordon Brothers to conduct going out of business sales for all stores after no going concern offers of higher value were submitted by the deadline. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000 BORDERS GROUP: To Sell Singapore License to Popular for $100,000 ---------------------------------------------------------------- Borders Group, Inc. and its debtor affiliates seek permission from Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to sell a perpetual, royalty free license of the trademarks formerly owned by the Debtors in Singapore, free and clear of liens, interests and claims, to Popular Holdings, Inc., for $100,000. As previously reported, the Court authorized on September 27, 2011, the sale of certain of the Debtors' intellectual property assets to Barnes & Noble, Inc. along with licenses to certain licensees to use in certain foreign jurisdictions the trademarks conveyed to Barnes & Noble. The IP Assets Sale Order expressly granted the Debtors the continued right to seek to sell the license to use the Marks in Singapore. Popular was the winning bidder for the Singapore License for $100,000 at the IP Assets auction held on September 14, 2011. Popular, Barnes & Noble, and the Debtors, however, were unable to reach an agreement on the Singapore License before the entry of the IP Assets Sale Order. Since the entry of the IP Assets Sale Order, Popular, Barnes & Noble and the Debtors have continued negotiations and have reached agreement for the sale of the Singapore License to Popular. Specifically, Barnes & Noble and Popular agreed to enter into a Brand License Agreement whereby Popular will make a payment to the Debtors of $100,000 for the Singapore License. In turn, Barnes & Noble will grant Popular a license to use the Marks in Singapore on terms set forth in the Brand License Agreement. The Official Committee of Unsecured Creditors and Barnes & Noble have no objection to the proposed sale. A full-text copy of the proposed Popular Brand Licensing Agreement is available for free at: http://bankrupt.com/misc/Borders_PopularLicenseAgr.pdf Accordingly, the Debtors ask the Court to approve the sale of the Singapore License to Popular under substantially the same terms and conditions as the other licenses sold in the IP Sale. David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, relates that given the closing or sale of the Debtors' businesses, the value of the Marks in Singapore are deteriorating. Accordingly, the proposed sale of the Singapore License to Popular will allow the Debtors to maximize the value of the Singapore License and is consistent with the other licenses approved by the Court under the IP Assets Sale Order, he asserts. The Debtors believe that the price to be paid by Popular in exchange for the Singapore License represents the highest and best value for the Singapore License. Popular is anxious to close on the Singapore License as soon as practicable, Mr. Friedman adds. About Borders Group Borders Group operated book, music and movie superstores and mall based bookstores under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States. At Jan. 29, 2011, the Company operated 639 stores in the United States and 3 in Puerto Rico. The Company also operated a proprietary e-commerce Web site -- http://www.Borders.com/-- launched in May 2008, which included both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and roughly 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. Lowenstein Sandler represents the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders is completing going-out-of-business sales that began at all of its remaining locations in July. The creditors? committee said before the liquidation began that Borders expected to generate $252 million to $284 million in cash from the sales. Borders is selling store leases separately. Borders selected proposals by Hilco and Gordon Brothers to conduct going out of business sales for all stores after no going concern offers of higher value were submitted by the deadline. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000 BORDERS GROUP: Court Supplements Opt-Out Procedures --------------------------------------------------- Judge Martin Glenn entered on October 17, 2011, an order approving supplemental opt-out mechanics for the transfer of personally identifiable information or PII of Borders Group customers to Barnes & Noble, Inc., in connection with the recent sale of the Debtors' intellectual property assets to Barnes & Noble. The Supplemental Opt-Out Mechanics provide for these terms: (1) The opt-out period end date will be extended from October 15, 2011, to November 2, 2011, for all Borders customers. (2) A reminder notice will be sent by e-mail to all individuals already contacted by e-mail (other than those Borders customers who have already opted out of the transfer of their PII to Barnes & Noble). The reminder notice will state in relevant part that if the customer would like to opt out of having its customer data transferred, it may go to http://bn.com/borders/by November 2, 2011. (3) All individuals who have not been contacted by e-mail yet, where a valid e-mail exists, will be sent the initial opt- out e-mail plus the "reminder notice" e-mail. (4) An additional disclosure similar to the reminder notice e-mail will be added to the website opt-out page. (5) The Web site opt-out mechanism will be modified to accommodate affected individuals who never provided the Debtors with an e-mail address, provided the Debtors with a non-working e-mail address or provided the Debtors with an e-mail address the individual can no longer access. An additional follow-up e-mail will be sent as promptly as practicable to any individual who attempts to opt out with a functional e-mail that is not found in the Borders database. (6) An additional follow-up e-mail will be sent as promptly as practicable to any individual who attempts to opt out with a functional e-mail that is not found in the Borders database. This e-mail will alert the individual to the fact that, because no match was found in the Borders database for the e-mail address that was entered, the opt-out request failed and that individual will have until the later of November 2, 2011 or 24 hours from delivery of the notification to try again. It will also explain that they must enter the e-mail address on file with Borders to successfully opt out. (7) During the period from October 15, 2011 through November 2, 2011 (the end of the opt-out period), Barnes & Noble may use the transferred PII only for marketing analytics and other internal purposes, but may not use the transferred PII to send any marketing messages to former Borders customers (not including those customers who were Barnes & Noble customers prior to the transfer of Borders customer PII to Barnes & Noble). A full-text copy of the Supplemental Opt-Out Mechanics is available for free at: http://bankrupt.com/misc/Borders_SuppOptOutMechanics.pdf Notwithstanding anything to the contrary in the September 27, 2011 IP Assets Sale Order, by complying with the Supplemental Opt-Out Mechanics, Barnes & Noble will be deemed to have complied with the provisions of the IP Assets Sale Order governing the transfer of PII from the Debtors to Barnes & Noble to the extent that the Supplemental Opt-Out Mechanics modify or supersede any provision of the IP Assets Sale Order, Judge Glenn clarified. Barnes & Noble is directed to submit to the Court an affidavit certifying its compliance with the applicable requirements set forth in the Sept. 27 Sale Order, as modified and superseded by the Oct. 17 order, reasonably promptly following the latest date by which all applicable PII must be purged in accordance with those requirements. Given the resolution at status conferences held on October 13, and 14, 2011, of the issues raised in the supplemental report filed by Michael St. Patrick Baxter, the court-appointed consumer privacy ombudsman, and other issues raised regarding the opt-out process, the hearing set on October 18, 2011 pursuant to the October 5, 2011 scheduling order is deemed canceled. Other than as expressly provided, the Oct. 17 Order does not modify or waive any provision of the IP Assets Sale Order or the Barnes & Noble Purchase Agreement, Judge Glenn clarified. Barnes & Noble will continue to be entitled to the protections afforded to it under the IP Assets Sale Order, including Barnes & Noble's status as a good faith purchaser for purposes of Section 363(m) of the Bankruptcy Code, the bankruptcy judge held. Any objections to the relief granted that have not been withdrawn, waived, or settled, and any reservations of rights included in those objections are overruled on the merits, Judge Glenn ruled. About Borders Group Borders Group operated book, music and movie superstores and mall based bookstores under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States. At Jan. 29, 2011, the Company operated 639 stores in the United States and 3 in Puerto Rico. The Company also operated a proprietary e-commerce Web site -- http://www.Borders.com/-- launched in May 2008, which included both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and roughly 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. Lowenstein Sandler represents the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders is completing going-out-of-business sales that began at all of its remaining locations in July. The creditors? committee said before the liquidation began that Borders expected to generate $252 million to $284 million in cash from the sales. Borders is selling store leases separately. Borders selected proposals by Hilco and Gordon Brothers to conduct going out of business sales for all stores after no going concern offers of higher value were submitted by the deadline. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000 BRIARWOOD CAPITAL: Hearing on Case Conversion Slated for Nov. 9 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California will convene a hearing on Nov. 9, 2011, at 3:00 p.m., to consider the motion to convert the Chapter 11 case of Briarwood Capital LLC to one under Chapter 7 of the Bankruptcy Code. Leslie T. Gladstone, the Chapter 11 trustee, for Briarwood Capital LLC, has asked that the Court convert the case of the Debtor. About Nicolas Marsch, Briarwood and Colony Based in Rancho Santa Fe, California, Briarwood Capital, LLC's primary business prepetition was land acquisition and organizing financing for real estate development. Briarwood filed for Chapter 11 bankruptcy protection on Feb. 23, 2010 (Bankr. S.D. Calif. Case No. 10-02677). In its schedules, the Debtor disclosed $292,798,759 in assets and $18,563,641 in liabilities as of the Petition Date. Colony Properties International, LLC -- Colony I -- (Bankr. S.D. Calif. Case No. 10-02937) and Colony Properties International II, LLC -- Colony II -- (Bankr. S.D. Calif. Case No. 10-03361) also filed for Chapter 11. Rancho Santa Fe, California-based Nicolas Marsch, III, filed for Chapter 11 bankruptcy protection on Feb. 25, 2010 (Bankr. S.D. Calif. Case No. 10-02939). Mr. Marsch estimated assets at $100 million to $500 million and debts at $10 million to $50 million. Mr. Marsch has a 100% membership interest in Briarwood, which he valued at over $274 million. He also has a 100% membership interest in Colony Properties. Mr. Marsch also asserts more than $2 million in claims against Briarwood and is a guarantor of debt owed by Briarwood and by to KBR Opportunity Fund II. He is also the guarantor of Colony's debt to KBR. Colony asserts more than $668,000 in claims against Mr. Marsch. Colony also asserts more than $50,000 in claims against Briarwood. The cases are separately administered. Jeffry A. Davis, Esq., at Mintz Levin Cohn Ferris Glovsky & Popeo, represents the Debtors in their restructuring efforts. In July 2010, the Court held that Mintz Levin was ineligible to represent the estates of Mr. Marsch, Briarwood and Colony Properties, or any two of them. Chapter 11 trustees have been appointed in each of the cases. Richard M. Kipperman serves as the Chapter 11 trustee for Colony Properties International, LLC and Colony Properties International II, LLC; and Leslie T. Gladstone serves as the Chapter 11 trustee for Briarwood. BRIGHAM EXPLORATION: Moody's Reviews 'B3' Corporate for Upgrade --------------------------------------------------------------- Moody's Investors Service placed Brigham Exploration Company's (Brigham) B3 Corporate Family Rating (CFR) and Caa1 senior unsecured notes ratings under review for upgrade. This action follows the announcement that Brigham has agreed to be acquired by Statoil ASA (Aa2 stable) for $36.50 per share in cash, for a total enterprise value of $4.7 billion, including Brigham's net debt. Statoil is a much larger and diversified energy company with deep financial resources to support Brigham and the continued development of its large acreage positions in the Williston Basin. Moody's review of Brigham's ratings will focus on whether Statoil will guarantee Brigham's debt, and if not, the imputed support and ratings uplift attributable to Statoil and the strategic nature of its investment in Brigham. Without a guarantee, Moody's would expect Brigham to be rated higher, but it is not likely to be rated investment grade. If Brigham's debt is not guaranteed, Moody's will also consider the level of financial disclosure available in order to maintain a rating on Brigham following the acquisition. In the event that substantially all of Brigham's rated debt is redeemed then Moody's will withdraw the ratings. The principal methodology used in rating Anadarko was the Independent Exploration and Production (E&P) Industry Methodology published in December 2008. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. BRIGHTSTAR CORP: S&P Puts 'BB-' Corp. Credit Rating on Watch Neg ---------------------------------------------------------------- Standard & Poor's Ratings Services placed all of its ratings, including the 'BB-' corporate credit rating, on Miami-based Brightstar Corp. on CreditWatch with negative implications. Though Brightstar has delivered operating performance and liquidity measures in line with our expectations through the March 2011 quarter, the company has not delivered its interim financials for the June 2011 quarter on a timely basis. Brightstar's bond indenture requires the company to deliver its financials within 60 days of the end of its quarter. It has not received a notice of default from its bond trustee. In the event it receives formal notice from the trustee, the company would have 60 days from notification to remedy the situation. "We will monitor the company's progress in filing its financial statements as part of our CreditWatch resolution, along with our assessment of the underlying issues causing the delay. When current statements are available, we will review the operating results so that we can resolve the CreditWatch and either lower or affirm our ratings on Brightstar," S&P stated. CAPISTRANO TERRACE: May Use Settlements to Pay Off Creditors ------------------------------------------------------------ Jenna Chandler at SanJuanCapistranoPatch reports Capistrano Terrace Ltd. told a bankruptcy court judge that it might use settlements from suits against the city of San Juan Capistrano, California, and its insurance carrier to pay off creditors. The report says Capistrano Terrace said it intends to shutter the mobile home park on Valle Road by this time next year if a proposal by the park's residents to buy it themselves is not successful. Ms. Chandler says the Company outlined these steps in asking a bankruptcy judge for more time to file a comprehensive reorganization plan. The Company has been "busy preparing for litigation," the motion states. "The proceeds of [the litigation] will likely be a large part of the expected source of funding for any potential plan." The San Juan Capistrano City Council was scheduled to meet Oct. 18, 2011, in closed session to discuss the owners' threat of a lawsuit. The meeting's agenda said the claim involves the city's rent control, park closure and building/property maintenance regulations. The claim hasn't been filed yet, and must first be denied by the city before a lawsuit can be filed. On Sept. 28, 2012, the president of Capistrano Terrace Ltd., Ray Poulter, sent letters to the residents advising that as part of the partnership's bankruptcy process, the park would be closed Oct. 15, 2012, and "changed to vacant land until there is a determination of its ultimate use." Lake Forest, California-based Capistrano Terrace Ltd. filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 11-19767) on July 12, 2011. D. Edward Hays, Esq., at Marshack Hays LLP, in Irvine, California, serves as counsel to the Debtor. The Debtor estimated assets of $1 million to $10 million and debts of up to $50 million. CARBON ENERGY: Meeting of Creditors Continued to Oct. 31 -------------------------------------------------------- August B. Landis, Acting U.S. Trustee for Region 17 has continued until Oct. 31, 2011, at 3:00 p.m., the meeting of creditors pursuant to 11 U.S.C. Sec. 341(a) in the bankruptcy cases of Carbon Energy Holdings LLC and Carbon Energy Reserve Inc. The meeting will be held at Young Bldg., Room 3024. Based in Wickenburg, Arizona, Carbon Energy Holdings LLC and Carbon Energy Reserve Inc. filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case Nos. 11-52099 and 11-52101) on June 28, 2011. Judge Bruce T. Beesley presides over the cases. Carbon Energy Holdings Inc. filed its schedules disclosing $0 in assets and $146,270 in liabilities. Carbon Energy Reserve Inc., a debtor-affiliate of Carbon Energy Holdings, also filed its schedules disclosing $40,000,000 in assets and $2,009,573 in liabilities. Kolesar & Leatham Chtd. acts as the Debtors' general counsel. CASTLE ARCH: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Castle Arch Real Estate Investment Company, LLC 8 East Broadway #510 Salt Lake City, UT 84111 Bankruptcy Case No.: 11-35082 Chapter 11 Petition Date: October 17, 2011 Court: United States Bankruptcy Court District of Utah (Salt Lake City) Judge: Joel T. Marker Debtor's Counsel: Michael L. Labertew, Esq. LABERTEW & ASSOCIATES, LLC 4764 South 900 East, Suite 3 Salt Lake City, UT 84117 Tel: (801) 424-3555 Fax: (801) 365-7314 E-mail: michael@labertewlaw.com Scheduled Assets: $2,818,931 Scheduled Debts: $40,863,600 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Trent Waddoups, CEO/president. Affiliates that previously filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Castle Arch Kingman, LLC Castle Arch Opportunity Partner Managers, LLC Castle Arch Opportunity Partners I, LLC Castle Arch Opportunity Partners II, LLC Castle Arch Secured Development Fund, LLC Castle Arch Smyrna, LLC CDC PROPERTIES II: Graham & Dunn Okayed as Replacement Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Washington authorized CDC Properties II LLC to employ Graham & Dunn PC as its replacement counsel. The firm, will among other things: 1. provide legal advice with respect to the Debtor's powers and duties as debtor-in-possession in the continued operation of its businesses and management property; 2. take necessary action to protect and preserve the Debtor's Estate, including the prosecution of actions on behalf of the Debtor, the defense of any actions commenced against the Debtor, the negotiations concerning all litigation in which the Debtor is involved, and the objection to claims filed against the Debtor's estate; and 3. represent the Debtor in carrying out its duties and exercising its powers under the Bankruptcy Code About CDC Properties II LLC Tacoma, Washington-based CDC Properties II LLC filed for Chapter 11 bankruptcy (Bank. W.D. Wash. Case No. 11-44554) on June 2, 2011. Judge Paul B. Snyder presides over the case. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Thomas W. Price, member/manager. Affiliate CDC Properties I, LLC, sought Chapter 11 protection (Case No. 10-41010) on Feb. 2, 2010. Prium Kent Retail, LLC. Prium Lakewood Buildings, and Prium Meeker Mall LLC filed separate Chapter 11 petitions in 2010. CHEF SOLUTIONS: Wins Court Nod to Sell Assets at Auction -------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that Chef Solutions Holdings LLC won a Delaware bankruptcy court's blessing Wednesday to sell its assets at auction, where a joint venture between a private equity firm and rival Reser's Fine Foods Inc. will kick- start the bidding with an initial $62 million offer. U.S. Bankruptcy Judge Kevin Gross signed off on auction procedures and the stalking horse bid from Reser's and Mistral Capital Management LLC after a short hearing, setting an auction for Nov. 9, 2011, according to Law360. About Chef Solutions Chef Solutions Inc., through subsidiary Orval Kent, is the second largest manufacturer in North America of fresh prepared foods for retail, foodservice and commercial channels. Chef Solutions and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-13139) on Oct. 4, 2011, in Delaware with the aim of selling the business to a joint venture between Mistral Capital Management LLC and Reser's Fine Foods Inc. The Debtor estimated assets and debts both exceeding $100 million. Judge Kevin Gross presides over the case. Lawyers at Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel. Donlin Recano is the claims and notice agent. Piper Jaffray & Co. has been hired as investment banker. PricewaterhouseCoopers serves as financial advisor. Judge Gross has authorized Chef Solutions to borrow $9 million to fund operations as the Company gears up to sell its assets. A joint venture between Mistral Capital Management LLC and Reser's Fine Foods Inc. has signed a contract to buy the business for $36.4 million in cash and $25.3 million in secured debt. The deal is subject to higher and better offers. CHEF SOLUTIONS: Court Approves Donlin as Claims & Noticing Agent ---------------------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware authorized Chef Solutions Holdings Inc. and its debtor-affiliates to employ Donlin, Recano & Company Inc. as claims and noticing agent. The firm will provide these services, among other things: a) notify all potential creditors of the filing of the Debtors' bankruptcy petitions and of the setting of the first meeting of creditors, pursuant to section 341 of the Bankruptcy Code, under the proper provisions of the Bankruptcy Code and the Bankruptcy Rules; b) maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs listing the Debtors' known creditors and the amounts owed thereto; c) notify all potential creditors of the existence and amount of their respective claims, as evidenced by the Debtors' books and records and as set forth in their Schedules; d) furnish a notice of the last day for the filing of proofs of claim and a form for the filing of a proof of claim, after such notice and form are approved by this Court; and e) file with the Clerk an affidavit or certificate of service which includes a copy of the notice, a list of persons to whom it was mailed, and the date the notice was mailed, within seven days of service. The Debtors assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Chef Solutions Chef Solutions Inc., through subsidiary Orval Kent, is the second largest manufacturer in North America of fresh prepared foods for retail, foodservice and commercial channels. Chef Solutions and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-13139) on Oct. 4, 2011, in Delaware with the aim of selling the business to a joint venture between Mistral Capital Management LLC and Reser's Fine Foods Inc. The Debtor estimated assets and debts both exceeding $100 million. Judge Kevin Gross presides over the case. Lawyers at Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel. Donlin Recano is the claims and notice agent. Piper Jaffray & Co. has been hired as investment banker. PricewaterhouseCoopers serves as financial advisor. Judge Gross has authorized Chef Solutions to borrow $9 million to fund operations as the Company gears up to sell its assets. A joint venture between Mistral Capital Management LLC and Reser's Fine Foods Inc. has signed a contract to buy the business for $36.4 million in cash and $25.3 million in secured debt. The deal is subject to higher and better offers. CHEYENNE HOTEL: Gets Court OK to Hire Thomas F. Quinn as Counsel ---------------------------------------------------------------- Cheyenne Hotel Investments, LLC, obtained approval from the U.S. Bankruptcy Court for the District of Colorado to employ Thomas F. Quinn, P.C., to provide legal services, nunc pro tunc June 30, 2011. As counsel, the Firm will: (a) assist the Debtor in the preparation and filing of required statements, schedules and other documents and pleadings required or permitted under the Bankruptcy Code and Rules; (b) advise the Debtor regarding its rights and obligations as a Debtor and as a Debtor-in-Possession; (c) represent the Debtor in hearings, meetings, conferences, and trials of contested matters and adversary proceedings brought by or against the Debtor; (d) advise the Debtor regarding the formulation of a plan of reorganization, and in obtaining confirmation of a plan; and (e) advise and represent the Debtor as its attorney in business negotiations and disputes as may arise in connection with the operations of the assets of the bankruptcy estate. The Court held that no payment of legal fees may be made to the Firm until and unless payment of the fees has been approved by the Court. About Cheyenne Hotel Cheyenne Hotel Investments, LLC, owns a property consisting of a 104 room hotel located in Colorado Springs, and known as Homewood Suites by Hilton. The company filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 11-25379) on June 28, 2011. The Debtor disclosed assets of $12,912,702 and liabilities of $8,074,325 as of the Petition Date. CLARENDON HOLDINGS: Court Pegs Gateway Bank Collateral at $475T --------------------------------------------------------------- Clarendon Holdings, LLC, seeks valuation of collateral consisting of real property owned by the debtor and secured by a deed of trust in favor of Gateway Bank & Trust Company. The debtor said it anticipated filing a plan of reorganization providing for the surrender of the Property to Gateway in full satisfaction of Gateway's secured claim pursuant to 11 U.S.C. Sec. 1129(b)(2)(A)(iii). Gateway has filed a proof of claim for $487,229. The debtor did not file an objection to the proof of claim. After a hearing on Aug. 10, 2011, Gateway filed a supplemental memorandum of law in which it set out the bases on which, it believes, the property should be valued with reference to its liquidation value. The debtor responded with a supplemental memorandum in support of applying a fair market value analysis. Gateway then filed a reply in which it suggested that these issues could not be efficiently resolved until after the debtor had specified its intended treatment of the claim in a filed plan. Shortly thereafter, the debtor did file its chapter 11 plan. In it, the debtor proposes to surrender the Property in full satisfaction of its secured debt, to obtain a credit equal to the market value of the Property, and to treat any deficiency between the current market value of the Property and Gateway's claim as a general unsecured claim. At the hearing the debtor offered the testimony of Chris Johnson, a North Carolina commercial real estate appraiser. Using the sales comparison method and assuming a 12-18 month exposure period, he opined that the fair market value of the Property as of July 27, 2011, was $445,000. Mr. Johnson testified that he has witnessed rapid appreciation of values in the last ten years in the central business district in which the Property is located. Gateway offered the testimony of Earl M. Worsley, also an appraiser in North Carolina, who estimated the market value of the Property at $475,000 and its liquidation value at $335,000 as of March 24, 2011. Like Mr. Johnson, Mr. Worsley employed the sales comparison method of valuation to derive the market value of the Property, based upon a one- to two-year exposure. He then derived the liquidation value of the Property by discounting the market value by 30%. Mr. Worsley testified that he was instructed by Gateway to use a 90-day exposure time for determining liquidation value. According to Mr. Worsley's testimony, property values should stabilize in the central business district, but prices have declined in the past several years "due to current economic conditions, as well as an oversupply of product currently on the market." Inasmuch as Gateway's expert witness' opinion of market value exceeds that of the debtor's expert by $30,000, the dispute over valuation turns on whether it is appropriate for the court to use market value or liquidation value in deciding the debtor's motion. In an Oct. 19, 2011 Order, a copy of which is available at http://is.gd/zl3S8nfrom Leagle.com, Bankruptcy Judge Stephani W. Humrickhouse held that the value of the Property the debtor proposes to surrender to Gateway in full satisfaction of Gateway's secured claim is $475,000, which is the fair market value as determined by Gateway's expert. The remaining amount of Gateway's claim will be dealt with in the debtor's plan as an unsecured claim. About Clarendon Holdings Wilmington, North Carolina-based Clarendon Holdings, LLC -- aka FST LLC, Pentagon Holdings LLC, and Mulberry Holdings, LLC -- filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 11-02479) on March 31, 2011. Clarendon owns real property located at 230 North Second Street, Wilmington, North Carolina. Judge Stephani W. Humrickhouse presides over the case. George M. Oliver, Esq. -- efile@oliverandfriesen.com -- at Oliver & Friesen, PLLC, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and debts. The petition was signed by Todd J. Toconis, member/manager. Affiliate Bannerman Holdings, LLC, filed for Chapter 11 (Bankr. E.D.N.C. Case No. 10-01053) on Feb. 12, 2010. CLEAR CREEK: Wins Court Nod to Hire Allen Matkins as Counsel ------------------------------------------------------------ Judge Bruce T. Beesley of the U.S. Bankruptcy Court for the District of Nevada authorized Clear Creek Ranch II, LLC, and Clear Creek at Tahoe, LLC, to employ Allen Matkins Leck Gamble Mallory & Natsis LLP as their general reorganization counsel, effective as of July 18, 2011. As the Debtors' counsel, Allen Matkins will: * Advise the Debtors generally regarding matters of bankruptcy law; * Advise the Debtors generally in the management of their businesses; * Represent the Debtors in adversary proceedings, contested matters, and administrative hearings, and in any actions where the rights of the Debtors or their estates may be litigated or affected; * Advise the Debtors concerning the rights and remedies of their estates, including matters relating to their assets with to the claims of creditors; * Conduct examinations of witnesses, claimants, or adverse parties as the cases may require; * Prepare and assist in the preparation of reports, accounts, applications, motions, and orders; * Represent the Debtors in negotiations with creditors, members, affiliated entities, governmental entities, and other parties-in-interest; * Assist the Debtors in the formulation, preparation, and confirmation of their plan of reorganization; and * Advise the Debtors regarding the numerous other legal questions and problems, which may arise in a Chapter 11 case. The Court further authorized Allen Matkins to obtain monthly compensation of its fees and costs. About Clear Creek Ranch II Minden, Nevada-based Clear Creek Ranch II LLC owns a 530.74-acre undeveloped residential subdivision located within the project known as Clear Creek. That project included a world-class golf course, the residential subdivision around the golf course, a lake house on Lake Tahoe and a fly fishing ranch along the West Walker River. The co-developers and joint venturers of the Project are CCR II's affiliate, Clear Creek at Tahoe LLC, and entities affiliated with Nevada businessman John Serpa, Sr., and his sons. Clear Creek Ranch II and Clear Creek at Tahoe filed separate Chapter 11 bankruptcy petitions (Bankr. D. Nev. Case Nos. 11-52302 and 11-52303) on July 18, 2011. Judge Bruce T. Beesley presides over the cases. In its petition, Clear Creek Ranch II estimated assets and debts of $10 million to $50 million. The petitions were signed by James S. Taylor, the Trustee. COMMUNITY TOWER: Wants to Appoint John Feece as President --------------------------------------------------------- Community Towers I LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of California for permission to appoint John Feece as president to be responsible for the duties and obligations of the Debtors. Community Towers I LLC is a real estate investment company. Community Towers I LLC and various affiliates -- Community Towers II, LLC, Community Towers III, LLC, Community Towers IV, LLC -- filed a Chapter 11 petition (Bankr. N. D. Calif. Lead Case Case No. 11-58944) on Sept. 26, 2011, in San Jose, California. John Walshe Murray, Esq., at the Law Offices of Murray and Murray, in Cupertino, California, serves as counsel to the Debtor. Community Towers I LLC estimated up to $50 million in both assets and debts. CROWN REAL: Files Schedules of Assets and Liabilities ----------------------------------------------------- Crown Real Estate filed with the Bankruptcy Court for the Central District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $8,000,000 B. Personal Property $223,450 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $10,843,005 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $385,909 ----------- ----------- TOTAL $8,223,450 $11,228,914 About Crown Real Estate Crown Real Estate filed a Chapter 11 bankruptcy petition (Bankr. C.D. Calif. Case No. 11-20309) on Aug. 29, 2011. Superior Property of 10621 Sepulveda, an affiliate of Crown Real Estate, also filed a separate Chapter 11 petition (Case No. 11-20305) on Aug. 29, 2011. Ervin Cohen & Jessup LLP acts as the Debtors legal counsel. CYBEX INTERNATIONAL: Incurs $278,000 Third Quarter Net Loss ----------------------------------------------------------- Cybex International, Inc., reported a net loss of $278,000 on $33.47 million of net sales for the three months ended Sept. 24, 2011, compared with a net loss of $15,000 on $29.23 million of net sales for the three months ended Sept. 25, 2010. The Company also reported a net loss of $454,000 on $97.05 million of net sales for the nine months ended Sept. 24, 2011, compared with a net loss of $1.12 million on $83.02 million of net sales for the nine months ended Sept. 25, 2010. The Company's balance sheet at Sept. 24, 2011, showed $87.79 million in total assets, $103.04 million in total liabilities, and a $15.25 million stockholders' deficit. Cybex Chairman and CEO John Aglialoro stated, "Our most recent quarter is the fourth consecutive quarter of year-over-year sales growth. The sales increases are driven by both North America and International sales and across most product lines." A full-text copy of the press release announcing the financial results is available for free at http://is.gd/phfn0v About Cybex International Medway, Mass.-based Cybex International, Inc. (NASDAQ: CYBI) -- http://www.cybexintl.com/--is a manufacturer of exercise equipment and develops, manufactures and markets strength and cardiovascular fitness equipment products for the commercial and, to a lesser extent, consumer markets. The Company reported a net loss of $58.2 million on $123.0 million of sales for 2010, compared with a net loss of $2.4 million on $120.5 million of sales for 2009. The Company's balance sheet at June 25, 2011, showed $83.93 million in total assets, $99.00 million in total liabilities, and a $15.07 million total stockholders' deficit. KPMG LLP, in Pittsburgh, Pa., expressed substantial doubt about Cybex International's ability to continue as a going concern. The independent auditors noted that a December 2010 jury verdict in a product liability suit apportions a significant amount of liability to the Company. "The Company does not have the resources to satisfy a judgment in this matter that has not been substantially reduced from the jury verdict, which raises substantial doubt about the Company's ability to continue as a going concern." DALLAS STARS: Have Cash-Use Authority to Finish Plan ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Dallas Stars of the National Hockey League have final approval to use cash thanks to an agreement requiring implementation of a Chapter 11 plan and sale of the team by the year's end. A U.S. bankruptcy judge in Delaware signed the cash order on Oct. 17. Four days after the Chapter 11 filing on Sept. 15, the team won interim authority to use cash representing collateral for secured lenders' claims. According to the report, the team is currently on schedule to exit bankruptcy a month ahead of the deadline in this week's cash- collateral order. The combined hearing to approve a sale of the team and confirm the prepackaged reorganization plan is on the court's calendar for Nov. 23. Mr. Rochelle notes that before bankruptcy, the team sought creditors' acceptance of the plan and signed Vancouver businessman Tom Gaglardi to a contract to purchase the hockey club. Other bids are due initially by Oct. 22. An auction is set for Nov. 21. The contract calls for Gaglardi to pay off the $51.4 million loan from the NHL and give a $100 million term loan payable to holders of the $250.9 million in first-lien debt. The reorganization plan provides for holders of $146.2 million in second-lien debt to share $500,000 in cash. Before the bankruptcy filing, the plan was accepted by all holders of the first-lien debt and holders of about 90% of the second-lien obligation. About Dallas Stars Frisco, Texas-based Dallas Stars, L.P. -- http://stars.nhl.com/-- operates as a professional men's ice hockey team. The company was formerly known as Minnesota North Stars and changed its name to Dallas Stars, L.P. in 1993. Dallas Stars and three affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-12935 to 11-12938) on Sept. 15, 2011. The affiliates are Dallas Arena LLC, Dallas Stars U.S. Holdings Corporation, and StarCenters LLC. Judge Peter J. Walsh presides over the cases. Martin A. Sosland, Esq., and Ronit J. Berkovich, Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel to the Debtors. John H. Knight, Esq., at Richards Layton & Finger, P.A., serves as the Debtors' Delaware counsel. The Garden City Group, Inc., as their notice, claims, and solicitation agent. KPMG LLP serves as the Debtors' auditor, tax advisor, and bankruptcy administration consultant. Dallas Stars estimated $100 million to $500 million in assets and debts in its petition. The petitions were signed by Robert L. Hutson, chief financial officer. The team is owned by Dallas businessman Thomas O. Hicks' HSG Sports Group. Mr. Hicks was the former owner of the Texas Rangers. The Texas Rangers were sold in a bankruptcy court- supervised auction to a group led by Hall of Fame pitcher Nolan Ryan for $593 million. The Stars are the second NHL team to file for bankruptcy since 2009, after the Phoenix Coyotes. Counsel to JP Morgan Chase Bank, N.A., as Prepetition First Lien Agent, is Mitchell A. Seider, Esq., and Joseph Fabiani, Esq., at Latham & Watkins LLP. Its Delaware counsel is Michael R. Lastowski, Esq., at Duane Morris LLP. First lien lender Monarch Alternative Capital LLC is represented by Andrew M. Leblanc, Esq., at Milbank Tweed Hadley and McCloy LLP. Counsel to the NHL are Thomas W. Gowan, Esq., and J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP. Counsel to GSP Finance LLC, as successor in interest to Barclays Bank PLC, as Prepetition Second Lien Agent, is Jason Young, Esq., at Clifford Chance US LLP. DANA HOLDING: Moody's Raises Corporate Family Rating to 'Ba3' ------------------------------------------------------------- Moody's Investors Service raised the ratings of Dana Holding Corporation (Dana) -- Corporate Family and Probability of Default Ratings to Ba3 from B1. In a related action, Moody's raised the ratings on the company's senior secured asset based revolving credit facility to Baa3 from Ba1, and the senior unsecured notes to B2 from B3. The Speculative Grade Liquidity Rating was affirmed at SGL-2. The rating outlook is stable. Ratings raised: Probability of Default Rating, to Ba3 from B1; Corporate Family Rating, to Ba3 from B1; $500 million senior secured asset based revolving credit facility, to Baa3 (LGD1, 5%) from Ba1 (LGD1, 8%); $400MM 6.5% senior unsecured notes due 2019, to B2 (LGD5 88%) from B3 (LGD5 88%); $350MM 6.75% senior unsecured notes due 2021, B2 (LGD5 88%) from B3 (LGD5 88%); Ratings affirmed: Speculative Grade Liquidity rating at SGL-2. RATING RATIONALE Dana's Ba3 Corporate Family Rating reflects the company's ability to sustain strong EBIT/interest coverage, averaging 2.6x over the first half of 2011. The rating also anticipates that Dana's product leadership in driveline, thermal and sealing products for the commercial vehicle, off highway and passenger vehicle markets should enable the company to demonstrate continued favorable earnings and cash flow trends, even as macro economic pressures weigh on certain end markets. Dana's broad geographic presence and participation on numerous individual platforms of a variety of OEM's represent important competitive strengths. In combination with a moderately levered capital structure, and an improved cost structure achieved through restructuring actions taken in 2009, Dana's financial metrics are now at levels consistent with the higher rating, and should show continued improvement into 2012. Dana's EBIT margin has continued to improve as a result of volume growth in its automotive and commercial vehicle end markets. After adjusting for the amortization of intangibles, Dana's EBITA is expect to be sustained in the Ba range under Moody's automotive parts methodology, at over 6% (inclusive of Moody's standard adjustments) and should support positive free cash flow generation over the intermediate-term. Dana's business profile is positioned to support positive revenue trends as about 45% of the company's exposure is to North America where both the automotive and commercial vehicle market are expected to continue to experience modest growth. U.S. retail demand is expected to increase to about 12.5 million units in 2011 or about 8% above 2010 levels and further grow in 2012. However, the company's European off-highway business (about 18% of revenues) is expected to be challenged by weaker business conditions and regional government austerity measures. Dana continues to have a high customer concentration with Ford (about 15% for year to date June 2011 revenues). However, the operational and financial profile of Ford has continued to improve since the industry downturn of 2009. Dana's expansion in South America and Asia also is expected to support the company's business growth over the intermediate-term. The stable rating outlook reflects Moody's expectation that improvements in Dana's operating performance, supported by a good liquidity profile, should largely be sustained in the event of stagnating regional economic conditions. Dana's Speculative Grade Liquidity Rating of SGL-2 is supported by strong cash balances and Moody's expectation of continued positive free cash flow generation. The company's positive free cash flow generation over the near-term is expected to cover incremental capital expenditures to support new business growth and the risk of increasing raw material cost pressures. As of June 30, 2011, Dana maintained cash balances of $718 million along with $58 million of marketable securities with about $102 million of these amounts considered restricted. Also supporting liquidity is a $500 million ABL revolving credit facility maturing in 2016. As of June 30, 2011, the facility was undrawn with $85 million of letters of credit outstanding, resulting in $347 million of availability after considering borrowing base limitations. Dana also maintained a European receivables loan facility of Euro 75 million ($109 at June 30, 2011), maturing in 2016, which had availability of $99 million, based on available assets. Factors that could lead to a higher outlook or ratings include sustained revenue growth leading to improved operating performance, generating EBIT/interest coverage consistently over 3.5 times, and consistent positive free cash flow generation, while maintaining a good liquidity profile. Future events that have potential to drive Dana's outlook or ratings lower include the inability to win new contracts, production volume declines at the company's OEM customers, and material increases in raw materials costs that cannot be passed on to customers or mitigated by restructuring efforts resulting in EBIT/interest coverage approaching 2.0 times. Other developments that could lead to a lower outlook or ratings include deteriorating leverage or liquidity. The principal methodology used in rating Dana was the Global Automotive Supplier Industry Methodology published in January 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. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies. Dana, headquartered in Maumee, Ohio, is a world leader in the supply of axles, driveshafts, sealing, thermal management products, as well as genuine service parts. The customer base includes virtually every major vehicle in the global automotive, commercial vehicle, and off-highway markets. The company employs approximately 21,000 people in 26 countries. Revenues in 2010 were $6.8 billion. DAVID RUGGERIO: Puts Restaurants in Chapter 11 Bankruptcy --------------------------------------------------------- Amanda Kludt at eater.com reports that David Ruggerio filed for Chapter 11 bankruptcy protection for two of his restaurants Bomboloni and Jalapeno. His restaurant Sushi a Go-Go closed in September due to non-payment of taxes. Mr. Ruggerio's other restaurant is Lansky's Old World Deli, which may come out unscathed, the report says. DELTA AIR: Named to Dow Jones Sustainability Index -------------------------------------------------- Delta Air Lines said last month it has been added to the Dow Jones Sustainability Index for North America and is among four global airlines listed as "Sustainability Leaders" in the annual survey. The recognition underscores Delta's ongoing commitment to corporate responsibility across its global network. Delta is among 143 companies named to the North American index by the Dow Jones Indexes and global sustainable investing firm SAM, which together annually review 2,500 companies to create the sustainability indexes. Companies named meet high standards for economic, corporate and social responsibility efforts. "Being named to the North American index underscores Delta's commitment to sustainable practices," said Ken Hylander, senior vice president - Corporate Safety, Security and Compliance. "Our people make the difference in taking steps to reduce our environmental impact while increasing the volunteer and charitable work we do in the cities where we fly and our employees live." The index is a key resource for investors seeking opportunities to support socially responsible companies and industries. Delta joins SkyTeam alliance partners Air France-KLM, which have been included in the DJSI since 2004 and have been frequently recognized for global sustainability practices. Delta and Air France-KLM are also listed as Sustainability Leaders in the airline sector along with All Nippon Airways and Qantas Airways. The annual review of the index analyzes corporate economic, environmental and social performance, assessing issues such as corporate governance, risk management, branding, climate change mitigation, supply chain standards and labor practices. It follows a best-in-class approach and includes input from sustainability leaders from each industry on a global and regional level respectively. Some of Delta's achievements in these areas include: * Producing some of the strongest earnings in the company's history in 2010 through strong revenue generation and aggressive cost containment, * Reducing its carbon dioxide emissions by 20 percent from 2005 to 2010, and * Contributing millions of dollars through corporate donations and employee contributions to a host of civic causes, including the American Red Cross, the Breast Cancer Research Foundation and Habitat for Humanity. For more information on the Dow Jones Sustainability Indexes and the changes resulting from this year's review please visit http://www.sustainability-indexes.com To read Delta's most recent Corporate Responsibility Report, please visit http://www.delta.com/responsibility 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. DELPHI CORP: Seeks Final Decree Closing 5 Cases ----------------------------------------------- Pursuant to Section 350 of the Bankruptcy Code and Rule 3022 of the Federal Rules of Bankruptcy Procedure, DPH Holdings Corp. asks Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York to enter a final decree and order closing the Chapter 11 cases of five of its debtor affiliates: Closing Debtor Case No. -------------- -------- Delphi Medical Systems Corporation 05-44529 Specialty Electronics International Ltd. 05-44536 Specialty Electronics, Inc. 05-44539 Delphi Connection Systems 05-44624 Delphi Automotive Systems Human Resources LLC 05-44639 The Reorganized Debtors have completed the process of reconciling all claims and have fully consummated the First Amended Joint Plan of Reorganization with respect to the Closing Debtors. Section 350 provides that "[a]fter an estate is fully administered and the court has discharged the trustee, the court shall close the case." Cynthia J. Haffey, Esq., at Butzel Long, in Detroit, Michigan, asserts that entry of a final decree as to the Closing Debtors is appropriate. All factors set forth in the Advisory Committee's Note to Bankruptcy Rule 3022, she insists, have been satisfied with respect to each of the Closing Debtors' reorganization cases, namely: (a) The Modified Plan was approved on July 30, 2009 pursuant to a final order of the Court; (b) There are no deposits that need to be distributed with respect to the Closing Debtors; (c) The property proposed to be transferred pursuant to the Modified Plan has been transferred with respect to each of the Closing Debtors; (d) DPH Holdings is managing the assets of the Reorganized Debtors in accordance with the Modified Plan; (e) DPH Holdings has commenced distributions under the Modified Plan and will make the distributions on account of Allowed Claims set forth in the Modified Plan; and (f) All motions, contested matters, and adversary proceedings will be finally resolved with respect to each Closing Debtor prior to entry of a final decree and order closing the Closing Debtors' Chapter 11 cases. Essentially, each of the cases of the Closing Debtors has reached the point of "substantial consummation" as defined under Section 1101(2) of the Bankruptcy Code, Ms. Haffey avers. The Chapter 11 cases of DPH Holdings and certain other Reorganized Debtors will remain open to complete the administration and implementation of the Modified Plan until a final decree is entered in those cases. Thus, closing of the Closing Debtors' cases will not impact the continued implementation of the Modified Plan, Ms. Haffey assures the Court. Moreover, closing the Chapter 11 cases of the Closing Debtors will result in cost savings for the Reorganized Debtors, as they will no longer need to pay ongoing quarterly fees for the Closing Debtors, she asserts. The Reorganized Debtors also ask the Court to retain jurisdiction to enforce or interpret its own orders pertaining to the Closing Debtors, including, but not limited to, the July 30, 2009 confirmation order to the Modified Plan and any final decree with respect to the Closing Debtors. Judge Drain is set to consider the Reorganized Debtors' request on October 24, 2011. Parties-in-interest have until October 17 to file any objections. 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 DELPHI CORP: Reaches Settlement With EPA ---------------------------------------- DPH Holdings Corp. and its affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of New York to enter into a settlement agreement resolving the United States Environmental Protection Agency's Claim No. 14309. The Settlement Agreement is part of a proposed global settlement among Delphi Automotive LLP, General Motors Company, the Reorganized Debtors, and the U.S. Government, on behalf of the EPA, to resolve the claims pending in the U.S. District Court for the Southern District of New York in the action styled Delphi Corporation, et al. v. United States of America. The Delphi FICA Case seeks a refund of approximately $26 million for alleged overpayment of employment taxes on lump-sum payments made to unionized employees on the effective dates of new collective- bargaining agreements in 1998 and 2003. The proposed global settlement of the Delphi FICA Case is under review by the United States Department of Justice and will not be effective until a formal settlement offer is accepted by the Office of the Associate Attorney General. As a part of the proposed global settlement, the Delphi Settlement Agreement contains these salient terms: (1) Claim No. 14039 will be allowed as a prepetition claim for $857,582 against DPH-DAS LLC, in full and final satisfaction of the Claim. The U.S. Government will apply the allowed amount of the Claim as a setoff against the refund owed to the Reorganized Debtors in connection with the settlement of the Delphi FICA Case. Consummation of the setoff in the Delphi Settlement Agreement constitute the EPA's distribution under the Plan of Reorganization with respect to the Claim. (2) The EPA and the U.S. Government on behalf of EPA agree not to file a civil action or to take any administrative or other civil action against the Debtors or Reorganized Debtors pursuant to Sections 106 and 107 of Comprehensive Environmental Response, Compensation, and Liability Act or Section 7003 of the Resource Conservation and Recovery Act with respect to the sites identified in the Federal Register publication giving notice of the settlement. In turn, the Debtors and Reorganized Debtors covenant not to sue and agree not to assert or pursue any claims or causes of action against the U.S. Government and all of its agencies, departments, and instrumentalities with respect to the sites identified in the Federal Register publication giving notice of this settlement. With respect to all agencies, departments and instrumentalities of the U.S. Government other than the EPA, the covenant not to sue will not bar the Debtors and Reorganized Debtors from asserting any counterclaims against an agency, department or instrumentality that brings a claim or cause of action against the Debtors or Reorganized Debtors with respect to the sites identified in the Federal Register publication giving notice of the settlement but only to the extent that the counterclaim arises from the same response action, response costs, or damages sought by the agency, department, or instrumentality. (3) The Debtors and Reorganized Debtors recognize that the EPA will allocate the money contemplated by the Delphi Settlement Agreement and to be received pursuant to the Delphi Settlement Agreement to specific Superfund sites and that the allocation is in the sole discretion of the EPA. The EPA's decision as to allocation will be set forth in the Federal Register publication giving notice of the settlement. The U.S. Government on behalf of the EPA, the Debtors, and the Reorganized Debtors agree that the covenant not to sue in the settlement will apply solely to the sites identified in the Federal Register publication giving notice of this settlement. The Debtors and Reorganized Debtors further agree that they will not challenge in any manner the EPA's allocation or claim any credit in any manner for any site that is not set forth in the Federal Register publication giving notice of the settlement. A full-text copy of the Delphi Settlement Agreement is available for free at: http://bankrupt.com/misc/DelphiEPASettlementAgreement.pdf Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, relates that although the Reorganized Debtors do not believe they have liability with respect to the Environmental Claim, the benefits of the contribution protection and covenant not to sue granted pursuant to the Settlement Agreement, together with general litigation risk, weigh in favor of granting the EPA an allowed prepetition claim. More importantly, the Reorganized Debtors believe that the terms of the Delphi Settlement Agreement are fair, reasonable, and in the public interest, he says. The U.S. Government will publish a notice of the proposed settlement in the Federal Register, and the public comment period will expire 14 days after the publication. Upon conclusion of the comment period, the U.S. Government will file with the Bankruptcy Court any comments received, as well as the United States' responses to the comments, and, if appropriate, will file a pleading in support of the relief sought in this motion. Until filing its pleading in support of the Reorganized Debtors' Motion, the U.S. Government reserves the right to withdraw or withhold its consent if the comments regarding the Settlement Agreement disclose facts or considerations which indicate that the Delphi Settlement Agreement is not in the public interest. Should the U.S. Government exercise its right to withdraw from the Settlement Agreement, the Reorganized Debtors will withdraw the motion. The Court will consider the Reorganized Debtors' request on October 24, 2011. Objections are due no later than October 17. 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 DELPHI CORP: Hearing on Injunction vs. Oldco Trustee Adjourned -------------------------------------------------------------- Judge Robert Drain adjourned the hearing to consider the Delphi Reorganized Debtors' request to permanently enjoin the trustee for The Oldco M Distribution Trust, formerly known as Metaldyne Corporation, from pursuing an adversary proceeding from Sept. 22, 2011 to Oct. 24, 2011. The deadline to object to the Delphi Reorganized Debtors' Motion is extended to Oct. 17. The adjournment is in light of the request of the Executive Sounding Board Associates Inc., in its capacity as trustee of the Oldco M Distribution Trust. In a Sept. 13, 2011 letter to the Court, Tina N. Moss, Esq., at Pryor Cashman LLP, in New York -- tmoss@pryorcashman.com -- reasoned that the Enforcement Motion raises complex substantive issues regarding the rights of the Metaldyne and Delphi Debtors under the Bankruptcy Code which the Oldco Trustee must carefully review and consider. Ms. Moss related that the Reorganized Debtors and the Oldco Trustee are engaged in discussions concerning a potential resolution of the adversary proceeding, but no resolution has yet been reached. In addition, the Oldco Trustee is prosecuting another adversary proceeding against a defendant who is a debtor, she disclosed. Thus, the Bankruptcy Court's resolution of the Enforcement Motion may affect those other proceedings, she stated. The Delphi Reorganized Debtors also filed certain proofs of claim in the Metaldyne Bankruptcy that raise additional issues which the Oldco Trustee is researching and considering in connection with the Enforcement Motion and any potential resolution of it, she added. 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 DELPHI CORP: PBGC Head Angled for Slice of Pension Pie ------------------------------------------------------ Before becoming director of the Pension Benefit Guaranty Corporation, Joshua Gotbaum angled "for a slice of the pension pie" at Delphi Corp., Matthew Boyle of The Daily Caller reported. The Daily Caller uncovered a July 9, 2009 e-mail sent by Mr. Gotbaum, who then worked as "operating director" at Blue Wolf Capital, to former Auto Task Force senior adviser Ron Bloom regarding who he should contact in the U.S. Department of the Treasury when trying to buy Delphi's assets. "Know you folks are busy, but hope you and/or another non-conflicted person will agree to hear proposals for Delphi from the lenders, who are potential acquirors as well as holders of the traditional DIP lender rights," the July 2009 e-mail read, according to The Daily Caller. The Daily Caller said Blue Wolf Capital highlighted in its Web site its ability to "work with complex organizational restructuring;" "understand complex government regulations;" and "work with unions." Notably, when President Obama nominated Mr. Gotbaum to head the PBGC, he touted his work at Blue Wolf, the Daily Caller pointed out. "While it was unclear at that time what, if any, role Gotbaum had in the bailout and the subsequent pension-restructuring programs, the new e-mail makes it clear that Gotbaum made an attempt to gain control of the pensions the PBGC now handles - with the goal of turning a profit," The Daily Caller wrote. The Daily Caller also cited previous emails it obtained that showed that the Obama administration officials, including Harry Wilson and Matthew Feldman, advisers of the Auto Task Force, were were intricately involved in picking which groups kept their pensions, and whose were cut severely. According to The Daily Caller, the Treasury Department advised General Motors Corporation on how to cut pensions back for Delphi salaried retirees. In contrast, the United Auto Workers- represented workers get to keep their pensions and felt t significantly smaller losses compared to their non-unionized salaried counterparts, The Daily Caller said. U.S. Representative Mike Turner told the Daily Caller, "The administration, obviously, needs to provide both to Congress and to Delphi retirees who filed suit." "They're elected officials and they're responsible to the people here, but they're acting like they're responsible to no one. As the Congressional committees have asked for documents, they've denied them or been slow to provide them and when we've asked questions of Bloom, [investment firm] Neuberger [Berman] and [Treasury Secretary Tim] Geithner, they've refused to answer them." In a September 28, 2011 letter, a group of U.S. Representatives led by Rep. Steve Austria wrote to the Treasury Department Secretary Timothy Geithner, seeking a timely response to queries relating to the unfair treatment toward the Delphi salaried retirees' pensions, on or before October 31, 2011. The Representatives ask, among other things, if the Treasury Department has any plans to rectify the unequal treatment of the salaried retirees' pensions and what legal authority does the Congress need to delegate to the Treasury Department in order to enact a remedy proposed. Rep. Mike Turner also sent a letter on Sept. 14, 2011, to Secretary Geithner, seeking answers to questions ignored by Mr. Bloom at the June 22, 2011 Congressional hearing. Mr. Bloom stepped down from his post as assistant to the President for Manufacturing Policy, effective September 1, 2011. In this light, Mr. Turner expects that the Treasury Department will still respond to pension-related questions. Congress Approves Temporary Reinstatement of HCTC The trustees of the DSRA Benefit Trust disclosed that both Houses of the U.S. Congress have approved a temporary reinstatement of the Health Coverage Tax Credit (HCTC) for Qualified Family Members and have increased the HCTC subsidy for all eligible recipients from the current 65% to 72.5%, according to an October 13, 2011 announcement posted in the DSRA's Web site. Both enhancements are retroactive to February 13, 2011 when the provisions of the American Recovery and Reinvestment Act (ARRA) of 2009 expired. The legislation will soon be presented to President Obama for his much anticipated signature. The QFM subsidy will end on 12-31-2013 and the HCTC subsidy for eligible retirees will revert back to 65% and continue until the end of 2014. At the end of 2014, the HCTC program will terminate. This means that Delphi retirees receiving their pensions from the PBGC aged 55-64 and the spouses of retirees who are both Medicare-eligible and under age 67 will continue to receive the HCTC subsidy until the end of 2013. In 2014, the subsidy will remain only for retirees under 65 and their families at the 65% level. "Although we are disappointed that the HCTC program will end, it does provide at least another 2 years of subsidies and time for retirees to prepare for life after the HCTC," the DSRA Benefit Trustees said. 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 DESERT OASIS: Obtains Court Okay to Tap FamCo as Expert Witness --------------------------------------------------------------- Judge Bruce A. Markell of the U.S. Bankruptcy Court for the District of Nevada gave his stamp of approval to the application filed by Desert Oasis Apartments, LLC to employ FamCo Advisory Services as an expert witness pursuant to Sections 327(a), 328(a), and 1107 of the Bankruptcy Code, and Rule 2014 of the Federal Rules of Bankruptcy Procedure, nunc pro tunc to July 11, 2011. As reported in the August 15, 2011 issue of the Troubled Company Reporter, FamCo Advisory will provide these services for an initial sum of $15,000, which will be advanced to FamCo as a retainer upon approval of the employment application: * Reading material as delivered by the Debtor to FamCo, performing research or surveys as to current market conditions, and forming an opinion as to the appropriate rate of interest for Desert Oasis Apartments, LLC's Plan of Reorganization, dated June 24, 2011; * Writing a report for the Court regarding 1129 issues, including an "appropriate rate of interest" for the Plan's cramdown; * Traveling to Las Vegas for the purpose of having a deposition taken that will not exceed the course of a single day; and * Traveling to Las Vegas and giving testimony in federal court at the Plan confirmation hearing for the Debtor. About Desert Oasis Apartments Desert Oasis Apartments LLC owns a garden-style apartment complex situated across the boulevard from the Mandalay Bay Resort. The apartment complex is valued at least $6,500,000. Secured creditor Wells Fargo set a trustee's sale on the apartment complex for May 11, 2011, but Desert Oasis sought bankruptcy protection (Bankr. D. Nev. Case No. 11-17208) the day before the sale. Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, serves as the Debtor's bankruptcy counsel. The Company disclosed $18,067,242 in assets and $20,291,316 in liabilities as of the Chapter 11 filing. No trustee or creditors committee have been appointed in the case. DISSOLUTION PROPERTIES: Case Summary & 6 Largest Unsec Creditors ---------------------------------------------------------------- Debtor: Dissolution Properties LLC 1427 Grant Avenue P.O. Box 330220 San Francisco, CA 94133 Bankruptcy Case No.: 11-33764 Chapter 11 Petition Date: October 18, 2011 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Joel K. Belway, Esq. LAW OFFICES OF JOEL K. BELWAY 235 Montgomery St. #668 San Francisco, CA 94104 Tel: (415) 788-1702 E-mail: belwaypc@pacbell.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 six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb11-33764.pdf The petition was signed by WB Coyle, manager. DIVERSEY HOLDINGS: Moody's Withdraws 'B2' Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service has withdrawn the B2 Corporate Family Rating, B2 Probability of Default Rating and pre-acquisition debt ratings of Diversey Holdings, Inc. (Diversey) and its subsidiaries. Sealed Air Corporation (Ba3, Stable) acquired Diversey on October 3, 2011 and has not provided an unconditional and irrevocable guarantee of Diversey's pre-acquisition debt. Moody's understands that separate public financial statements and/or audited statements for Diversey will no longer be provided and consequently Moody's will not have sufficient financial information to maintain ratings on these debt instruments. Sealed Air elected to exercise its covenant defeasance option with respect to the notes due 2019 and 2020 and has publicly stated that it intends to redeem all of Diversey's pre-acquisition debt in the near term. The following ratings were withdrawn: Secured revolver due 2014, Ba2 (LGD 2, 21%) Secured term loan due 2015, Ba2 (LGD 2, 21%) Senior unsecured notes due 2019, B3 (LGD 5, 72%) Senior unsecured holdco notes due 2020, Caa1 (LGD 6, 94%) Corporate Family Rating, B2 Probability of Default Rating, B2 SGL-2 speculative grade liquidity rating RATINGS RATIONALE Moody's has withdrawn the rating because it believes it has insufficient or otherwise inadequate information to support the maintenance of the rating. The methodologies used in this rating were the Global Manufacturing Rating Methodology, published December 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. DLH MASTER: Hires Clouse Dunn as Labor & Employment Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has authorized DLH Master Land Holding LLC to employ Clouse Dunn LLP as special counsel effective as of June 17, 2011. The firm's rates are: Personnel Rates --------- ----- Partners $345 to $445 Associates $285 Law Clerks/Paralegals $140 to $180 The firm can be reached at: CLOUSE DUNN LLP 1201 Elm Street Suite 5200 Dallas, Texas 75270 - 2142 Tel: 214-220-3888 Fax: 214-220-3833 About Allen Capital Allen Capital Partners LLC and subsidiary DLH Master Land Holding LLC, are the developers of Dallas Logistics Hub, a 6,000-acre multimodal logistics park 12 miles (19 kilometers) from downtown Dallas. Allen Capital Partners, LLC, dba The Allen Group, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10- 30562) on Jan. 25, 2010. Mark MacDonald, Esq., at MacDonald + MacDonald, P.C., represents the Debtor. Lain, Faulkner & Co. is the Debtor's financial advisor. The Company disclosed $220,325,201 in assets and $160,622,236 in liabilities as of the Chapter 11 filing. The Debtor's affiliate -- DLH Master Land Holding, LLC, dba The Allen Group -- filed a separate Chapter 11 bankruptcy petition. Another affiliate, Visalia, California-based Richard S. Allen, Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D. Texas Case No. 10-33211) on May 3, 2010. Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, represents the Debtor. The Company disclosed $76,158,469 in assets and $53,728,982 in liabilities as of the petition date. The Debtors' proposed Reorganization Plan contemplates that the Debtors will obtain sufficient exit financing from sales and loans from insiders to enable them to pay all Administrative and non-tax Priority Claims in full on the effective date. No trustee or examiner has been appointed in any of the cases administratively consolidated with those of the Debtors. An Official Committee of Unsecured Creditors has been appointed. DPAC TECHNOLOGIES: Completes Asset Sale to Q-Tech for $10.5MM ------------------------------------------------------------- QT Sale Corp., formerly known as "Quatech, Inc.", a wholly owned subsidiary of the registrant, DT Sale Corp., formerly known as "DPAC Technologies Corp.", closed the sale of substantially all of the assets of QTSC to Q-Tech Acquisition, LLC. The sale of the assets was made pursuant to the Asset Purchase Agreement among DTSC, QTSC, Buyer and B&B Electronics Manufacturing Company. The assets sold by QTSC on the Closing Date to the Buyer generally consisted of all of the assets of QTSC, such as cash, contracts and purchase orders, rights under leases, equipment, fixtures, computer hardware and software, materials and inventory, accounts receivable and intellectual property. The Asset Purchase Agreement provided for a base purchase price for the assets of $10.5 million in cash, which is subject to increase or decrease based on a working capital adjustment, based on a target working capital amount of $710,000 at the closing, to the extent that the working capital at closing was at least $70,000 more or less than the working capital target. For purposes of the closing, the working capital was estimated to be approximately $370,603, resulting in a purchase price paid on the Closing Date by the Buyer of $10,229,530. $630,603 of that amount was deposited with an escrow agent and will be available to the Buyer and B&B for any further downward adjustment to the purchase price resulting from the closing working capital amount, as ultimately determined pursuant to the post-closing process set forth in the Asset Purchase Agreement, and to satisfy DTSC's and QTSC's indemnification obligations under the Asset Purchase Agreement. The Plan of Complete Liquidation and Dissolution approved on July 27, 2011, by the DTSC Board of Directors and a majority of the shareholders of DTSC on Aug. 3, 2011, became effective upon the closing under the Asset Purchase Agreement. Related to the Plan of Dissolution, the Allocation Agreement dated Aug. 3, 2011, among DTSC and QTSC, as well as Development Capital Ventures, L.P., the majority shareholder of DTSC, and members of the DTSC Board of Directors who are shareholders of DTSC, as well as Canal Mezzanine Partners, L.P., and The Hillstreet Fund, L.P., and certain members of management who hold shares of common stock also became effective at the closing under the Asset Purchase Agreement. The Plan of Dissolution and the Allocation Agreement contemplate, following the closing of the Asset Purchase Agreement, a distribution to each holder of common stock (i) who is not as of, and has not been within 90 days prior to, the record date established with respect to those distributions, an officer or director or employee of DTSC or QTSC or (ii) who is not a party to the Allocation Agreement of $0.05 per share, prior to any distribution of cash to any other shareholder of DTSC and certain other payments to the parties to the Allocation Agreement. Pursuant to the Plan of Dissolution, DTSC has begun the liquidation and winding up of DTSC, which will be completely dissolved at a date to be determined by the DTSC Board of Directors. In connection with the dissolution, and, subject to paying or providing for the payment of all debts and liabilities and expenses, DTSC intends to make liquidating distributions to the Nonaffiliated Shareholders as of a record date that will determined by the DTSC Board of Directors equal to $0.05 per share of common stock held thereby. The DTSC Board of Directors intends to establish that record date, and make those distributions to the Nonaffiliated Shareholders, as soon as is practicable after the date of this report, and will file a subsequent Current Report on Form 8-K with the SEC in connection with such distributions. DTSC intends to engage a third party paying agent for purposes of such Nonaffiliated Shareholder distributions. After the distribution to the Nonaffiliated Shareholders has been made or funds therefor otherwise set aside and all of the debts and liabilities of DTSC have been paid or otherwise provided for, the remaining assets of DTSC, if any, will be liquidated and the cash of DTSC will be distributed pursuant to the terms of and to the parties to the Allocation Agreement. Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. Effective as of the Closing Date, and in connection with the closing of the Asset Purchase Agreement, Mr. Steven D. Runkel, the President and Chief Executive Officer and a director of DTSC, resigned from such offices. As discussed in the Information Statement, Mr. Runkel became the Vice President of Sales for B&B under an agreement executed August 3, 2011 in connection with the Asset Purchase Agreement, which became effective as of the Closing Date. On Oct. 12, 2011, DTSC filed an amendment to its Articles of Incorporation with the Secretary of State of California for the purpose of changing its name to "DT Sale Corp." The change of name, together with a similar amendment to the articles of incorporation of QTSC to effect the change of its name from "Quatech, Inc.", were required by the terms of the Asset Purchase Agreement, and were approved by the requisite shareholders. About DPAC Technologies Hudson, Ohio-based DPAC Technologies Corp. (OTC QB: DPAC) -- http://www.quatech.com/-- through its wholly owned subsidiary, Quatech, Inc., designs, manufactures, and sells device connectivity and device networking solutions for a broad market. Quatech sells its products through a global network of distributors, system integrators, value added resellers, and original equipment manufacturers. The Company sells to customers in both domestic and foreign markets. DPAC, together with its wholly owned subsidiary Quatech, Inc., on Aug. 3, 2011, entered into an Asset Purchase Agreement with B&B Electronics Manufacturing Company and its wholly owned subsidiary, Q-Tech Acquisition, LLC. The Asset Purchase Agreement provides for the sale of substantially all of the assets of Quatech for $10.5 million in cash. In connection with the Asset Purchase Agreement, each of Fifth Third Bank, N.A., and the State of Ohio, as lenders to DPAC and Quatech, entered into forbearance agreements with DPAC and Quatech, pursuant to which each consented to DPAC and Quatech entering into the Asset Purchase Agreement and agreed to forbear from exercising certain rights under their respective loan agreement with DPAC and Quatech until the closing has occurred or the Asset Purchase Agreement has terminated. The Company's balance sheet at June 30, 2011, showed $9.69 million in total assets, $7.20 million in total liabilities and $2.48 million in total stockholders' equity. The Company said certain conditions exist that raise substantial doubt about its ability to continue as a going concern. These conditions include recent operating losses, deficit working capital balances and the inherent risk in extending or refinancing the Company's bank line of credit, which matures on Sept. 5, 2011. As reported by the TCR on May 24, 2011, Maloney + Novotny in Cleveland, Ohio, expressed substantial doubt about DPAC Technologies' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that of the Company's continued operating losses, deficit working capital balances and the inherent risk in extending or refinancing its bank line of credit, which matures on May 31, 2011. DRYSHIPS INC: Faces Shareholder Class Action in New York -------------------------------------------------------- A putative shareholder class action lawsuit captioned Litwin v. OceanFreight, Inc., et. al, was filed in the United States District Court for the Southern District of New York on Oct. 13, 2011, against OceanFreight Inc., DryShips Inc., Ocean Rig UDW Inc., Pelican Stockholdings Inc., and the directors of OceanFreight. The plaintiff alleges violations of the Securities and Exchange Commission proxy rules and breach of fiduciary duties by the directors of OceanFreight, purportedly aided and abetted by the other defendants, in connection with OceanFreight's agreement to merge with Pelican, a wholly-owned subsidiary of DryShips. The complaint sets out various alternative remedies, including an injunction barring the merger, rescission, or actual and punitive damages. The lawsuit has not been served on the defendants. The defendants believe that the complaint is without merit and, if served, intend to defend the lawsuit vigorously. In connection with the proposed merger of OceanFreight with DryShips, Ocean Rig filed a registration statement on Form F-4 with the SEC that was declared effective on Oct. 12, 2011. The Form F-4 contains a proxy statement/prospectus and other documents. OceanFreight mailed the proxy statement/prospectus contained in the Form F-4 to its shareholders on Oct. 17, 2011. The Form F-4 and proxy statement/prospectus contain important information about DryShips, Ocean Rig, OceanFreight, the merger and related matters. In addition to the Form F-4 was filed by Ocean Rig, the proxy statement/prospectus and the other documents filed with the SEC in connection with the merger, DryShips and OceanFreight are obligated to file annual reports with, and submit other information to, the SEC. About DryShips Inc. Based in Greece, DryShips Inc. -- http://www.dryships.com/-- -- owns and operates drybulk carriers and offshore oil deep water drilling units that operate worldwide. As of Sept. 10, 2010, DryShips owns a fleet of 40 drybulk carriers (including newbuildings), comprising 7 Capesize, 31 Panamax and 2 Supramax, with a combined deadweight tonnage of over 3.6 million tons and 6 offshore oil deep water drilling units, comprising of 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships. DryShips's common stock is listed on the NASDAQ Global Select Market where it trades under the symbol "DRYS". On Nov. 25, 2010, DryShips Inc. entered into a waiver letter for its US$230.0 million credit facility dated Sept. 10, 2007, as amended, extending the waiver of certain covenants through Dec. 31, 2010. In its audit report on the Company's financial statements for the year ended Dec. 31, 2010, Deloitte, Hadjipavlou Sofianos & Cambanis S.A., noted that the Company's inability to comply with financial covenants under its original loan agreements as of Dec. 31, 2009, its negative working capital position and other matters raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at June 30, 2011, showed US$7.86 billion in total assets, US$4.03 billion in total liabilities, and US$3.83 billion in total equity. ENERGY AND POWER: Section 341(a) Meeting Scheduled for Nov. 2 ------------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of creditors in Energy and Power Solutions Inc.'s Chapter 11 case on Nov. 2, 2011, at 10:30 a.m. The meeting will be held at Room 1-159, 411 W Fourth St., Santa Ana, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Energy and Power Solutions Inc. Based in Costa Mesa, California, Energy and Power Solutions Inc. aka EPS Corp. filed for Chapter 11 protection (Bankr. C.D. Calif. Case No.11-23362) on Sept. 23, 2011. Judge Erithe A. Smith presides over the case. The Debtor estimated both assets and debts of between $10 million and $50 million. FADE IT UP: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Fade It Up, LLC 1551 South 15th Street Philadelphia, PA 19146-4828 Bankruptcy Case No.: 11-18011 Chapter 11 Petition Date: October 17, 2011 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Magdeline D. Coleman Debtor's Counsel: Ronald G. McNeil, Esq. MCNEIL LEGAL SERVICES 1333 Race Street Philadelphia, PA 19107-1585 Tel: (215) 564-3999 Fax: (215) 564-3537 E-mail: r.mcneil1@verizon.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Fawwaz F. Beyha, sole corporate member. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Fawwaz F. Beyha FMI HOLDINGS: Gets Cease Trade Order On Failure to File Reports --------------------------------------------------------------- FMI Holdings Ltd. said that the British Columbia Securities Commission has issued a cease trade order immediately suspending the trading of common shares of the Company in British Columbia as a result of the Company's failure to file financial statements for the year ended Dec. 31, 2010, and the interim periods ended March 31, 2011 and June 30, 2011. The Company has not filed these statements, or the accompanying management's discussion and analysis, in order to avoid unnecessary costs and thereby maximize the amount of cash to be distributed to shareholders upon completion of its previously- announced liquidation and wind-up of the Company. Notwithstanding the order, a beneficial shareholder of the Company who is not, and was not as of Oct. 14, 2011, an insider or control person of the Company, may sell shares of the Company acquired before October 14, 2011 if (i) the sale is made through a market outside Canada, (ii) the sale is made through an investment dealer registered in British Columbia, and (iii) the investment dealer maintains a record of the details of the sales made pursuant to this exemption. The Company will complete the Liquidation promptly following receipt of a clearance certificate from Canada Revenue Agency. Due to unanticipated delays caused by an administration change at Canada Revenue Agency, the Company currently anticipates that the clearance certificate will be obtained in the first quarter of 2012. The Company currently has cash reserves of approximately CDN2.9 million (of which approximately 76% is denominated in U.S. dollars). Based on the estimated costs of completing the Liquidation and current U.S. dollar exchange rates, the estimated proceeds upon completion of the Liquidation are in the range of CDN0.54 to CDN0.57 per outstanding share. In the event that (i) wind-up costs are greater than anticipated or (ii) there are fluctuations in the U.S. dollar exchange rate, shareholders may receive aggregate distributions amounting to less than the range noted above. Accordingly, the Company can give no assurances as to the total amount and timing of distributions to the Company's shareholders. FRAZER/EXTON: Court Approves $1.9-Mil. DIP Financing From Roskamp ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania entered an order approving Frazer/Exton Development LP and Whiteland Village Ltd.'s application for authorization to access, in the aggregate, $1,898,698 in postpetition loan from Roskamp Management Company. All funds advanced by Roskamp Management Company pursuant to this order are to be treated as a general unsecured claim. The Court further ordered that no funds advanced by Roskamp Management Company for the payment of insurance premiums will be considered part of the post-petition loan made pursuant to this order. As reported in the TCR on June 22, 2011, the Debtors said the Debtors said the loan will not bear interest. According to the Debtors they have no operating source of cash flow other than the loan from RMC. The Debtors said the uses of the funds are important to the continued development and sale of a project located at 15 South Bacton Hill Road, Malvern, East and West Whiteland Townships, Chester County, Pennsylvania, and cover all expenses until Dec. 31, 2011. The property was designated a superfund site. The Debtor said they secured a deal for the sale of the property to Makemie, a Pennsylvania nonprofit corporation and an affiliate of Philadelphia Presbytery Homes Inc., for $7.3 million in cash and the assumption of up to $5 million of debt. About Frazer/Exton Development Based in Malvern, Pennsylvania, Frazer/Exton Development, L.P., owns real property in Chester County. Whiteland Village Ltd. obtained various approvals and permits for the development of the real property as a continued care retirement community. Whiteland Village Ltd. and Frazer/Exton Development, L.P., filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 11-14036 and 11- 14041) on May 19, 2011. The case was initially assigned to Judge Stephen Raslavich but was transferred to Judge Jean K. FitzSimon. Frazer/Exton Development's schedules disclosed $46,953,617 in total liabilities. Albert A. Ciardi, III, Esq., Jennifer E. Cranston, Esq., and Jennifer C. McEntee, Esq., at Ciardi Ciardi & Astin, P.C., in Philadelphia, Pa., represent the Debtor as counsel. The Debtors are selling a portion of the Property to Makemie at Whiteland -- a Pennsylvania non-profit corporation and affiliate of Philadelphia Presbytery Homes Inc. -- for $7,300,000 in cash and assumption of up to $5,000,000 of debt. The deal is subject to higher and better offers. Frazer/Exton Development, L.P., has filed a proposed plan of reorganization and an explanatory disclosure statement with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania. All of the assets of the Debtor will be sold and liquidated in the ordinary course of the Debtor's business in accordance with the Plan. As reported in the Troubled Company Reporter on Sept 9, 2011, the Bankruptcy Court continued to Oct. 5, 2011, at 1:00 p.m., the hearing to consider adequacy of the Disclosure Statement explaining Frazer/Exton Development, L.P.'s Plan of Reorganization. FRIENDLY ICE CREAM: Court OKs Epiq as Claims Agent -------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware authorized Friendly Ice Cream Corporation and its debtor-affiliates to employ Epiq Bankruptcy Solutions LLC as notice and claims agent to prepare and serve required notices in these Chapter 11 cases. The Debtors told the Court that it paid a $25,000 retainer fee to the firm. The Debtors assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Friendly Ice Cream Friendly Ice Cream Corp. -- http://www.friendlys.com/-- the owner and franchiser of 490 full-service, family-oriented restaurants and provider of ice cream products in the Eastern United States, filed for Chapter 11 reorganization together with four affiliates (Bankr. D. Del. Lead Case No. 11-13167) on Oct. 5, 2011, to sell the business mostly in exchange for debt to Sundae Group Holdings II LLC, a unit of Sun Capital Partners Inc. The existing owner and holder of the Debtors' second-lien debt are also affiliates of Sun Capital. Friendly's, based in Wilbraham, Massachusetts, also announced the closing of 63 stores, leaving about 424 operating. Franchise operators have about 230 of the locations. Judge Kevin Gross oversees the case. James A. Stempel, Esq., Ross M. Kwasteniet, Esq., and Jeffrey D. Pawlitz, Esq., at Kirkland & Ellis LLP; and Laura Davis Jones, Esq., Timothy P. Cairns, Esq., and Kathleen P. Makowski, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. Zolfo Cooper serves as the Debtors' financial advisors. In its petition, Friendly Ice Cream Corp. estimated $100 million to $500 million in assets and debts. The petitions were signed by Steven C. Sanchioni, executive vice president, chief financial officer, treasurer, and assistant secretary. Sundae Group Holdings proposes to pay about $120 million for the business. The price includes enough cash to pay first-lien debt and an amount of cash for unsecured creditors to be negotiated with the official creditors' committee. Aside from cash, Sun Capital will make a credit bid from the $267.7 million in second- lien, pay-in-kind notes. The bid from Sun Capital is subject to higher and better offers at an auction. Under the proposed time-line, bids would be due Nov. 24, followed by an auction on Dec. 1. A competing bid must be at least $122.6 million in cash. Friendly's is the second company under Sun Capital's portfolio to file for bankruptcy in a span of two days. Mexican-food chain Real Mex, which operates restaurants such as Chevys, filed in Delaware bankruptcy court on Oct. 3, 2011. FRIENDLY ICE CREAM: Section 341(a) Meeting Scheduled for Nov. 10 ---------------------------------------------------------------- The U.S. Trustee for Region 3 will convene a meeting of creditors in Friendly Ice Cream --'s Chapter 11 case on Nov. 10, 2011, at 10:30 a.m. The meeting will be held at J. Caleb Boggs Federal Building, 844 King Street, 2nd Floor, Room 2112, Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Friendly Ice Cream Friendly Ice Cream Corp. -- http://www.friendlys.com/-- the owner and franchiser of 490 full-service, family-oriented restaurants and provider of ice cream products in the Eastern United States, filed for Chapter 11 reorganization together with four affiliates (Bankr. D. Del. Lead Case No. 11-13167) on Oct. 5, 2011, to sell the business mostly in exchange for debt to Sundae Group Holdings II LLC, a unit of Sun Capital Partners Inc. The existing owner and holder of the Debtors' second-lien debt are also affiliates of Sun Capital. Friendly's, based in Wilbraham, Massachusetts, also announced the closing of 63 stores, leaving about 424 operating. Franchise operators have about 230 of the locations. Judge Kevin Gross oversees the case. James A. Stempel, Esq., Ross M. Kwasteniet, Esq., and Jeffrey D. Pawlitz, Esq., at Kirkland & Ellis LLP; and Laura Davis Jones, Esq., Timothy P. Cairns, Esq., and Kathleen P. Makowski, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. Zolfo Cooper serves as the Debtors' financial advisors. Epiq Bankruptcy Solutions, LLC, serves as the Debtors' claims and notice agent. In its petition, Friendly Ice Cream Corp. estimated $100 million to $500 million in assets and debts. The petitions were signed by Steven C. Sanchioni, executive vice president, chief financial officer, treasurer, and assistant secretary. Sundae Group Holdings proposes to pay about $120 million for the business. The price includes enough cash to pay first-lien debt and an amount of cash for unsecured creditors to be negotiated with the official creditors' committee. Aside from cash, Sun Capital will make a credit bid from the $267.7 million in second- lien, pay-in-kind notes. The bid from Sun Capital is subject to higher and better offers at an auction. Under the proposed time-line, bids would be due Nov. 24, followed by an auction on Dec. 1. A competing bid must be at least $122.6 million in cash. Friendly's is the second company under Sun Capital's portfolio to file for bankruptcy in a span of two days. Mexican-food chain Real Mex, which operates restaurants such as Chevys, filed in Delaware bankruptcy court on Oct. 3, 2011. FRY'S ELECTRONICS: Seeks $65 Million from Ex-VP Over Kickbacks -------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that Fry's Electronics Inc. on Monday filed an adversary proceeding in California bankruptcy court, saying a former merchandising executive who pled guilty to fraud and is accused of pocketing $65 million in kickbacks from vendors should not be let off the hook for that money. In a complaint seeking a finding of nondischargeability of debt, Fry's says former Vice President of Marketing and Operations Ausaf Umar Siddiqui defrauded the company willfully and maliciously and that its claim against the debtor therefore cannot be dismissed under federal bankruptcy, according to Law360. Separately, UPI.com reports that The Palms casino resort said it is suing to recover a $2.66-million gambling debt allegedly run up by the indicted former Fry's Electronics official. Mr. Siddiqui, of Palo Alto, Calif., filed for Chapter 7 bankruptcy liquidation in July, listing assets of $6.95 million against liabilities of $136.56 million, including millions of dollars in gambling debts, UPI.com discloses. GENERAL GROWTH: Files 5th Post-Confirmation Status Report --------------------------------------------------------- GGP, Inc. and its reorganized debtor affiliates submitted to Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York on October 17, 2011, their fifth post-confirmation status report. on September 22, 2011, the Bankruptcy Court entered a final decree closing the Chapter 11 cases of additional 115 Reorganized Debtors. The order also included a mechanism where the September 2011 Final Decree would apply, nunc pro tunc to September 30, 2011, to additional Reorganized Debtors whose cases were fully administered after entry of the September 2011 Final Decree but on or before September 30, 2011. On October 3, 2011, the Reorganized Debtors filed a supplemental schedule containing five Reorganized Debtors whose cases were fully administered by September 30, 2011 and to whom the September 2011 Final Decree applies nunc pro tunc to September 30, 2011. As of October 17, 2011, only two of the 388 Reorganized Debtors' Chapter 11 cases remain open; those of GGP and GGP Limited Partnership. Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges LLP, in New York, noted that the Reorganized Debtors have completed their process of evaluating and resolving the approximately 10,000 proofs of claim and approximately 6,000 scheduled claims filed in their chapter 11 cases. The Reorganized Debtors undertook a comprehensive claims reconciliation process that included the filing of 91 omnibus claims objections, two omnibus schedule amendment motions, and countless informal negotiations with creditors, she said. Ms. Goldstein stated that the Reorganized Debtors continue to defend against certain stakeholders' assertions regarding entitlement to certain postpetition interest payments pursuant to the TopCo Debtors' Third Amended Joint Plan of Reorganization. At a hearing on February 24, 2011, the Bankruptcy Court heard argument regarding the contentions of holders under the GGP/Homart II, L.L.C. Partner Note that they are entitled to postpetition interest at the contractual default rate. On June 23, 2011, the Bankruptcy Court entered its order granting default interest to the Comptroller of the State of New York as Trustee of the Common Retirement Fund. The Reorganized Debtors filed a notice of appeal from the Homart Order and intend to fully prosecute their appeal. The Bankruptcy Court also heard argument, at the hearing held on February 24, 2011, regarding the 2006 Lenders' contention that they are entitled to postpetition interest at the contractual default rate. On August 3, 2011, the Bankruptcy Court entered its order granting default interest to Eurohypo AG, New York Branch, as administrative agent for the 2006 Lenders. On September 30, 2011, the Reorganized Debtors and 2006 Lenders filed a joint certification to the United States Court of Appeals for the Second Circuit regarding the 2006 Order. The Reorganized Debtors intend to fully prosecute their appeal. To comply with the request of the U.S. Trustee for Region 2, the Reorganized Debtors filed with the Bankruptcy Court a disbursement schedule illustrating the total disbursements made by each Debtor for the quarter ended September 30, 2011. The Reorganized Debtors made disbursements totaling $698,752,000 during the quarter ended September 30, 2011. A schedule of the quarterly disbursement is available for free at http://bankrupt.com/misc/ggp_3Q2011Disbursements.pdf About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 protection on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. General Growth Properties on Nov. 9, 2010, successfully completed the final steps of its financial restructuring and emerged from Chapter 11. GGP successfully restructured approximately $15 billion of project-level debt Recapitalized with $6.8 billion in new equity capital Paid all creditor claims in full achieved substantial recovery for equity holders. As part of its plan of reorganization, GGP has split itself into two separate and independent publicly traded corporations. GGP shareholders as of the record date of Nov. 1, 2010, received common stock in both companies. The new GGP, which will commence trading Nov. 10 on The New York Stock Exchange under the ticker symbol "GGP," is the second-largest shopping mall owner and operator in the country, with more than 183 regional malls in 43 states. The spin-off company, The Howard Hughes Corporation, consists of GGP's portfolio of master planned communities and other strategic real estate development opportunities. This company will trade under the ticker symbol "HHC" on The New York Stock Exchange. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GEORGE SHAMOUN: Flagstar Loan Modification Requires Plan Revision ----------------------------------------------------------------- Bankruptcy Judge Thomas J. Tucker denied George and Melinda Shamoun's request entitled, MOTION FOR AN ORDER OF THE COURT ABSTAINING FROM APPROVAL OR DISAPPROVAL OF HOME MORTGAGE MODIFICATION WITH FLAGSTAR BANK FSB". Judge Tucker said any mortgage loan modification with Flagstar Bank will require modification of the Debtors' confirmed Chapter 11 plan. The Debtors must file and serve a proposed plan modification under 11 U.S.C. Sec. 1127(e), and any such plan modification must be approved by the Court. Abstention is not appropriate. George Shamoun, Jr., and Melinda Shamoun filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 10-66172) on Nov. 18, 2010. The case is jointly administered with the case of GGS Investments Inc., dba Budget Auto Repair One (Bankr. E.D. Mich. Case No. 10-75027). GGS Investments estimated under $1 million in assets and debts in its petition, a copy of which is available at http://bankrupt.com/misc/mieb10-75027.pdf The Debtors filed a Second Amended Combined Plan and Second Amended Disclosure Statement on May 5, 2011. GIORDANO'S ENTERPRISES: Selects Stalking Horse for Restaurant ------------------------------------------------------------- Philip V. Martino, Chapter 11 Trustee for Giordano's Enterprises, Inc. and affiliated debtors, filed a motion with the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division, seeking Bankruptcy Court approval to select Giordano's Holding Company LLC, a company managed by the Italian Food Network LLC, as the stalking horse to purchase the Debtors' restaurant assets for $26 million. GHC is a privately held company spearheaded by Ivan Matsunaga and Marc Stolfe, veterans of the Chicago-based Connie's Pizza chain. The Trustee is also seeking approval to set November 10, 2011 as the deadline for the submission of competing bids and November 15, 2011 as the auction date. The filed pleadings indicate that the Trustee will accept offers to purchase all of the Debtors' assets, including an extensive portfolio of owned real estate as well as the restaurant assets. In a brief statement, Mr. Martino said, "We are very pleased to have selected GHC as the stalking horse bidder for the restaurant- only assets. One of the important criteria leading to the selection of GHC is its operating experience and interest in preserving most, if not all, of the Debtors' employees." Fred Caruso, the Debtors' Restructuring Officer, concurred. "The GHC bid enables the Debtors to continue their operations without any disruption. The bid should further reassure Giordano's customers and suppliers that it will continue to provide high-quality service and pizza for a long, long time." In addition to the restaurant assets, the Debtors own a number of Chicago area locations, including the office building housing Giordano's prized flagship location at 740 North Rush Street in Chicago. The Trustee expects the bidding for the real estate to be robust. "Due to the high level of interest in the real estate," said Martino, "I have yet to make a decision regarding whether to engage a stalking horse purchaser for all or specific real estate assets." William Blair & Company, L.L.C. is marketing the Debtors' restaurant assets and Hilco Real Estate LLC is marketing the Debtors' real estate portfolio. About Giordano's Enterprises Chicago, Illinois-based Giordano's Enterprises, Inc., was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". At present, Giordano's operates six company owned stores in Chicagoland, four joint venture stores, and thirty-five franchisee locations. In addition, Giordano's operates Americana Foods, Inc., located in Mount Prospect, Illinois, that serves as the commissary for the majority of food products purchased by the Illinois locations. An affiliated real estate holding company, Randolph Partners, LP, owns 12 restaurant buildings that are leased to four of the company-owned locations, two of the joint venture locations and six of the franchisee locations. The other 33 locations are leased from third party landlords; two for the Giordano's locations, two for the joint venture locations and 29 for the franchise locations. Giordano's is the lessee and subleases the restaurant facility for 22 of the 29 franchise third party leases. JBA Equipment Finance, Inc, another affiliated entity, leases restaurant equipment packages to eight franchisee locations. Giordano's Enterprises and 26 affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on Feb. 16, 2011. Six additional affiliates filed for Chapter 11 protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A. Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at Arnstein & Lehr, LLP, in Chicago, serve as the Debtors' bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in assets and $45,538,574 in liabilities as of the Chapter 11 filing. Certain of the Debtors owe Fifth Third Bank not than $13,560,662, pursuant to loans and financial accommodations, and $31,927,998 under a business loan as of the Petition Date. Fifth Third has agreed to provide DIP financing of up to $35,983,563 to the Debtors. Philip V. Martino has been appointed as Chapter 11 trustee in the Debtors' bankruptcy cases, at the behest of the U.S. Trustee. Mr. Martino filed a $3,000,000 bond. GLUTH BROS: Court Slashes Counsel Fees on Disclosure Violations --------------------------------------------------------------- The United States Trustee, joined by the Creditor Trustees on behalf of the liquidating trust formed by the confirmation of Gluth Bros. Construction Inc.'s Chapter 11 Plan, objects to the final fee application filed by the Debtor's attorney, Querry & Harrow, Ltd., and seeks to disgorge the fees previously received by Q&H for failure to comply with the disclosure requirements set forth in Bankruptcy Rules 2014 and 2016. Three interim fee applications, totaling $273,892 in fees and expenses were already approved and received by Q&H. Q&H's final fee application seeks an additional for $56,941 in fees and $324.29 in expenses, which Q&H is currently holding in escrow. In an Oct. 19, 2011 Memorandum Opinion, available at http://is.gd/GFTPvZfrom Leagle.com, Bankruptcy Judge Manuel Barbosa granted the firm's cumulative expenses in full, but reduced the cumulative fees by 40%, meaning only a cumulative amount of $202,420 in fees and expenses are approved. Q&H is ordered to disgorge the remaining $128,737 in fees previously received or held in escrow, but that are disapproved, to the Creditor Trustees by Nov. 18, 2011. About Gluth Bros. Gluth Bros. Construction, Inc., a construction project contractor based in Woodstock, Ill., sought chapter 11 protection (Bankr. N.D. Ill. Case No. 07-71375) on June 5, 2007. Robert R. Benjamin, Esq., at Querrey & Harrow, Ltd., in Chicago, represents the Debtor. At the time of the filing, the Debtor disclosed $3,214,430 in assets and liabilities totaling $8,150,879. On April 30, 2008, the Debtor filed a joint plan of reorganization with the Unsecured Creditors Committee, which generally provided to pay all creditors 100% plus 5% interest out of income generated by the continuing operation of the company. Frank Gluth agreed to guarantee the payments in the plan, in part in exchange for the right to certain real estate known by the parties as the "Shop Parcel," in which Frank Gluth had asserted an interest but which turned out to be owned by the Debtor. This plan was never confirmed. On Jan. 23, 2009, the Debtor filed a "Notice of Debtor's Withdrawal from Proposed Joint Plan," in which the Debtor alleged that "[d]uring the summer of 2008, with the downturn in the economy, the Debtor was unable to procure any new contracts," and stated that "Debtor was forced to close its doors and is no longer operating." In December 2009, the U.S. Trustee filed a motion to convert the case to Chapter 7. The Court entered an agreed order on Jan. 28, 2009, resolving that motion by allowing the Unsecured Creditor Committee to file a liquidating plan, and if such plan was not confirmed on or before March 25, 2009, the case would be converted to Chapter 7. The Unsecured Creditors Committee did file a plan of liquidation on Jan. 27, 2009, which was modified on Feb. 11, 2009, and confirmed on March 4, 2009. The confirmed plan created a Creditor Trust to administer and liquidate the assets of the estate. All remaining property of the Debtor's estate, including causes of action, were vested in the Creditor Trust, and the Creditor Trustees were granted the authority to commence actions. Charles Dixon and Charles Graeber, Jr., serve as the Trustees of the Creditor Trust. The Trust is represented by Shira R. Isenberg, Esq., at Freeborn & Peters LLP in Chicago. GO DADDY: To Face Increasing Competition, Moody's Says ------------------------------------------------------ The market for web services to small businesses will grow markedly over the next five years, spurred by rapid growth in Internet penetration and consumer usage, according to a new report from Moody's Investors Service. Three of the leading web services companies in the US ? Go Daddy Operating Co. (B1, stable), Web.com (B1, stable), and The Endurance International Group (B2, stable), which together represent about $3.3 billion in enterprise value ? are raising a combined $2.2 billion or so of new debt. "We expect the competitive and financial profiles of these three companies, which manage more than 67 million Internet domain names and have more than 15 million customers, to change dramatically, amid an unprecedented amount of capital-raising in the web services industry and a rapidly evolving market," says Raj Joshi, a Moody's Analyst and author of the report, who adds that "consolidation in the highly fragmented web services industry could challenge the status quo." A group of private investors recently acquired market leader Go Daddy in a leveraged buyout, and the company's financial flexibility will decline as a result. And smaller operators Web.com and Endurance are both growing in scale through acquisitions. Web.com, for example, is acquiring Network Solutions in a transaction financed by both debt and stock. In addition, Endurance recently refinanced its debt, including the debt it had previously raised for its acquisitions. "We don't think Go Daddy is likely to cede its leading market position in the foreseeable future," he noted. "The three companies' degree of success in executing their business plans and their financial strategy choices could alter their relative credit risk rankings over the next two or three years," added Joshi. "They're all raising their financial leverage while operating in a highly competitive industry, in which customers have a growing number of providers to choose from. Still, Moody's expectation of deleveraging as a result of good cash flow growth in the rapidly growing industry alleviates some of the pressure on their credit profiles." The report, "Competitive differences could narrow over time as Web.com and Endurance go after market leader, Go Daddy," can be accessed at www.moodys.com. GRACEWAY PHARMACEUTICALS: Galderma-Led Auction on Nov. 17 --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Graceway Pharmaceuticals LLC has authority to auction the business, although on a schedule two weeks later than the company initially requested. According to the report, pursuant to the Court-approved bidding procedures, bids are due Nov. 14, in advance of a Nov. 17 auction and a hearing on Nov. 22 for approval of the sale. Switzerland's Galderma SA is already under contract to pay $275 million in cash, absent higher and better offers. About Graceway Pharmaceuticals Based in Bristol, Tennessee, Graceway Pharmaceuticals LLC offers dermatology, respiratory, and women's health products. Its Zyclara Cream is used for the treatment of external genital and perianal warts (EGW) in patients 12 years of age and older. The company offers products for the treatment of dermatology conditions, such as actinic keratosis, superficial basal cell carcinoma, external genital warts, atopic dermatitis, and acne; and respiratory conditions, such as asthma. Graceway Pharmaceuticals and its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 11-13036) on Sept. 29, 2011. Graceway intends to sell essentially all of its assets pursuant to Section 363 of the Bankruptcy Code. Switzerland's Galderma SA has been selected as a stalking horse bidder, but the final buyer will be determined through an auction process and, ultimately, by the Bankruptcy Court over the course of the next few months. The company's debt includes $430.7 million owing on a first-lien revolving credit and term loan. Second-lien debt is $330 million, with mezzanine debt totaling another $81.4 million. The company said the sale has the consent of holders of 40% of the first-lien debt, which means the sale could be opposed by holders of 60% of the senior debt. Attorneys at Young Conaway Stargatt & Taylor LLP serve as counsel to the Debtors. Latham & Watkins LLP is the co-counsel. Lazard Freres & Co. LLC is the investment banker. PricewaterhouseCoopers LLP is the tax consultant. BMC Group, Inc is the notice, claims, and balloting agent. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors. Lowenstein Sandler PC serves as the committee counsel. GRACEWAY PHARMA: Court OKs Alvarez & Marsal as Advisors ------------------------------------------------------- Graceway Pharmaceuticals LLC sought and obtained permission from the U.S. Bankruptcy Court for the District of Delaware to employ Alvarez & Marsal North America, LLC, as restructuring advisors. Upon retention, the firm will, among other things: a. assist the Debtors in the preparation of financial relates disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports; b. assist the Debtors with information and analyses required pursuant to the Debtors' DIP financing; and c. assist with the identification and implementation of short- term cash management procedures. As of the Petition Date, A&M held a $270,000 retainer. The rates of A&M professionals anticipated to be assigned to the case are: Personnel Rates --------- ----- Tom Hill $775/hour Justin Schmaltz $550/hour Hamish Allanson $450/hour Jodi Ehrenhofer $425/hour Paul Krolicki $325/hour The firm's standard rates are: Personnel Rates --------- ----- Managing Director $650-850/hour Director/Senior Director $425-650/hour Associate/Senior Associate $350-450/hour Analyst/Consultant $250-350/hour Thomas E. Hill, managing director of A&M, attests that the firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About Graceway Pharmaceuticals Based in Bristol, Tennessee, Graceway Pharmaceuticals LLC offers dermatology, respiratory, and women's health products. Its Zyclara Cream is used for the treatment of external genital and perianal warts (EGW) in patients 12 years of age and older. The company offers products for the treatment of dermatology conditions, such as actinic keratosis, superficial basal cell carcinoma, external genital warts, atopic dermatitis, and acne; and respiratory conditions, such as asthma. Graceway Pharmaceuticals and its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 11-13036) on Sept. 29, 2011. Graceway intends to sell essentially all of its assets pursuant to Section 363 of the Bankruptcy Code. Switzerland's Galderma SA has been selected as a stalking horse bidder, but the final buyer will be determined through an auction process and, ultimately, by the Bankruptcy Court over the course of the next few months. The company's debt includes $430.7 million owing on a first-lien revolving credit and term loan. Second-lien debt is $330 million, with mezzanine debt totaling another $81.4 million. The company said the sale has the consent of holders of 40% of the first-lien debt, which means the sale could be opposed by holders of 60% of the senior debt. Attorneys at Young Conaway Stargatt & Taylor LLP serve as counsel to the Debtors. Latham & Watkins LLP is the co-counsel. Lazard Freres & Co. LLC is the investment banker. PricewaterhouseCoopers LLP is the tax consultant. BMC Group, Inc is the notice, claims, and balloting agent. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors. Lowenstein Sandler PC serves as the committee counsel. GRACEWAY PHARMA: Court OKs Latham & Watkins as Bankruptcy Counsel ----------------------------------------------------------------- Graceway Pharmaceuticals LLC sought and obtained permission to retain the law firm of Latham & Watkins LLP to, among other things: a. advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their business and properties; b. attend meetings and negotiations with representatives of creditors, interest holders and other parties-in-interest; and c. prepare motions, applications, answers, orders, reports, and papers necessary to the administration of the Debtors' estate. The Debtors will pay the firm at these standard rates: Personnel Rates --------- ----- Associates $370-895/hour Counsel $755-965/hour Partners $760-1,135/hour Paraprofessional $120-565/hour As of the Petition Date, L&W holds a prepetition retainer as an advance toward L&W's fees and services in the approximate amount of $579,099. Josef S. Athanas, Esq., a partner of L&W, attests that the firm is a "disinterested person," as that term is defined in section 101(14) of the Bankruptcy Code. About Graceway Pharmaceuticals Based in Bristol, Tennessee, Graceway Pharmaceuticals LLC offers dermatology, respiratory, and women's health products. Its Zyclara Cream is used for the treatment of external genital and perianal warts (EGW) in patients 12 years of age and older. The company offers products for the treatment of dermatology conditions, such as actinic keratosis, superficial basal cell carcinoma, external genital warts, atopic dermatitis, and acne; and respiratory conditions, such as asthma. Graceway Pharmaceuticals and its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 11-13036) on Sept. 29, 2011. Graceway intends to sell essentially all of its assets pursuant to Section 363 of the Bankruptcy Code. Switzerland's Galderma SA has been selected as a stalking horse bidder, but the final buyer will be determined through an auction process and, ultimately, by the Bankruptcy Court over the course of the next few months. The company's debt includes $430.7 million owing on a first-lien revolving credit and term loan. Second-lien debt is $330 million, with mezzanine debt totaling another $81.4 million. The company said the sale has the consent of holders of 40% of the first-lien debt, which means the sale could be opposed by holders of 60% of the senior debt. Attorneys at Young Conaway Stargatt & Taylor LLP serve as counsel to the Debtors. Alvarez and Marsal North America, LLC, is the financial advisor. Lazard Freres & Co. LLC is the investment banker. PricewaterhouseCoopers LLP is the tax consultant. BMC Group, Inc is the notice, claims, and balloting agent. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors. Lowenstein Sandler PC serves as the committee counsel. HANS HOTEL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Hans Hotel Management, Inc. 4244 Brandywine Drive Peoria, IL 61614 Bankruptcy Case No.: 11-42120 Chapter 11 Petition Date: October 17, 2011 Court: United States Bankruptcy Court Debtor's Counsel: Matthew E. McClintock, Esq. GOLDSTEIN & MCCLINTOCK LLC 980 North Michigan Avenue, Suite 1400 Chicago, IL 60611 Tel: (312) 337-7700 E-mail: mattm@restructuringshop.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Hans Hotel Property, LLC 11-42113 10/17/11 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 A list of Hans Hotel Management's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ilnb11-42120.pdf A list of Hans Hotel Property's four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ilnb11-42113.pdf The petitions were signed by Pratixa Patel, member & authorized officer. HARRISBURG, PA: Moving Toward State Receivership to End Bankruptcy ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Harrisburg, Pennsylvania's capital, moved a step closer to having the state take over its municipal reorganization yesterday as the state Senate voted 37-13 in favor of a bill that would allow the governor to appoint a receiver. The legislation goes to the House of Representatives, which passed a previous version in September. The governor said he will sign the bill. Mr. Rochelle relates that the law would give the city 30 days before a receiver takes over. If the bill is adopted and implemented quickly, the receiver could be in place in time for the Nov. 23 hearing when the U.S. Bankruptcy Judge in Harrisburg will hear arguments on a motion to dismiss the Chapter 9 bankruptcy filing. On Oct. 13, two days after the Chapter 9 filing, the state filed a motion to dismiss the case, saying it violated a state law prohibiting cities of Harrisburg's size from seeking bankruptcy protection before July 2012. Harrisburg's Mayor Linda D. Thompson filed papers saying she likewise will seek dismissal. About the City of Harrisburg The city of Harrisburg, in Pennsylvania, is coping with debt related to a failed revamp of an incinerator. The city is $65 million in default on $242 million owing on bonds sold to finance an incinerator that converts trash to energy. Four members of the City Council of Harrisburg on Oct. 11, 2011, authorized the filing of a Chapter 9 bankruptcy petition (Bankr. M.D. Pa. Case No. 11-06938) by the City of Harrisburg. Judge Mary D. France presides over the case. Mark D. Schwartz, Esq. -- markschwartz6814@gmail.com -- and David A. Gradwohl, Esq., serve as counsel. The petition estimated $100 million to $500 million in assets and debts. Susan Wilson, the city's chairperson on Budget and Finance, signed the petition. The city council voted 4-3 on Oct. 11, 2011, to authorize the Chapter 9 municipal bankruptcy filing. The city claims to be insolvent, unable to pay its debt and in imminent danger of having tax revenue seized by holders of defaulted bonds. The city said in court papers it is in imminent jeopardy through six pending legal actions by creditors with respect to a number of outstanding bond issues relating to the Harrisburg Materials, Energy, Recycling and Recovery Facilities, which processes waste into steam and electrical energy. The owner and operator of the incinerator is The Harrisburg Authority, which is unable to pay the bond issues. The city is the primary guarantor under each bond issue. The lawsuits were filed by Dauphin County, where Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and Covanta Harrisburg Inc. Harrisburg Mayor Linda D. Thompson and the state of Pennsylvania have objected to the bankruptcy filing. Mayor Thompson is represented in the case by Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg, P.C. Counsel to the Commonwealth of Pennsylvania are Neal D. Colton, Esq., Jeffrey G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor. HARRISBURG, PA: House Sends Fiscal Emergency Bill to Governor ------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Pennsylvania's State House voted to send a bill to Gov. Tom Corbett enabling him to declare a fiscal emergency in Harrisburg and take over the troubled finances of the state capital, as the state separately is pushing to get a federal judge to throw out a bankruptcy filing by local officials last week. About Harrisburg, Pennsylvania The city of Harrisburg, in Pennsylvania, is coping with debt related to a failed revamp of an incinerator. The city is $65 million in default on $242 million owing on bonds sold to finance an incinerator that converts trash to energy. Four members of the City Council of Harrisburg on Oct. 11, 2011, authorized the filing of a Chapter 9 bankruptcy petition (Bankr. M.D. Pa. Case No. 11-06938) by the City of Harrisburg. Judge Mary D. France presides over the case. Mark D. Schwartz, Esq. -- markschwartz6814@gmail.com -- and David A. Gradwohl, Esq., serve as counsel. The petition estimated $100 million to $500 million in assets and debts. Susan Wilson, the city's chairperson on Budget and Finance, signed the petition. The city council voted 4-3 on Oct. 11, 2011, to authorize the Chapter 9 municipal bankruptcy filing. The city claims to be insolvent, unable to pay its debt and in imminent danger of having tax revenue seized by holders of defaulted bonds. The city said in court papers it is in imminent jeopardy through six pending legal actions by creditors with respect to a number of outstanding bond issues relating to the Harrisburg Materials, Energy, Recycling and Recovery Facilities, which processes waste into steam and electrical energy. The owner and operator of the incinerator is The Harrisburg Authority, which is unable to pay the bond issues. The city is the primary guarantor under each bond issue. The lawsuits were filed by Dauphin County, where Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and Covanta Harrisburg Inc. Harrisburg Mayor Linda D. Thompson and the state of Pennsylvania have objected to the bankruptcy filing. Mayor Thompson is represented in the case by Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg, P.C. Counsel to the Commonwealth of Pennsylvania are Neal D. Colton, Esq., Jeffrey G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor. HATHAWAY ENTERPRISES: Court Enters Notice Dismissing Ch. 11 Case ---------------------------------------------------------------- On Oct. 5, 2011, the U.S. Bankruptcy Court for the Central District of California entered a notice dismissing Hathaway Enterprises Inc.'s Chapter 11 case with a prohibition against the refiling of another bankruptcy petition by or against the Debtor for 180 days from the dated the order is entered. The dismissal effective date is Sept. 15, 2011. As reported in the TCR on June 16, 2011, the U.S. Bankruptcy Court for the Central District of California approved a stipulation dismissing the Chapter 11 case of Hathaway Enterprises, Inc., on Sept. 15, 2011, with a 180-day bar against re-filing. The stipulation between Debtor and Soto Development, LLC, provides for relief from stay, dismissal of the case, and settlement of claims. Soto is the Debtor's only creditor and it is owed more than $12 million on a loan that originally came due in January 2009. Soto will also have relief from stay as to the Debtor's property. In its motion, Soto has asked that the Court dismiss the Debtor's Bankruptcy case because it is impossible for the Debtor to confirm any plan, and because the Debtor's bankruptcy petition was filed in bad faith. Soto Development is represented by: LOEB & LOEB LLP Lance N. Jurich, Esq. Benjamin R. King, Esq. Derrick Talerico, Esq. 10100 Santa Monica Boulevard, Suite 2200 Los Angeles, CA 90067-4120 Tel: (310) 282-2000 Fax: (310) 282-2200 E-mail: ljurich@loeb.com bking@loeb.com dtalerico@loeb.com Los Angeles, California-based Hathaway Enterprises, Inc., filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-17426) on Feb. 22, 2011. Vincent S. Kim, Esq., at the Law Offices of Vincent S. Kim & Associates, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets at $10 million to $50 million. The Debtor disclosed $20,105,315 in assets and $11,552,248 in liabilities as of the Chapter 11 filing. HERITAGE LOG: Files for Bankruptcy Amid Fraud Allegations --------------------------------------------------------- Derek Hodges at the Mountain Press reports that Heritage Log Homes has filed for Chapter 11 bankruptcy. According to the report, the move comes amid allegations of possible fraud on the part of Heritage's former executives. The allegations were first made to the Sevierville (Tenn.) Police Department and have since been handed over to the U.S. Attorney's office in Knoxville, Tennessee. Meanwhile, Heritage CEO Bill Parsons said talks continue with a potential suitor who would revive the business. Mr. Hodges relates that the decision to declare the company insolvent came as it faced foreclosure on its lease. That action had been put off multiple times already and was reportedly delayed for short periods of time last week until the bankruptcy filing was completed. Heritage Log Homes -- http://www.heritagelog.com/-- provides classic and custom designed log homes. HOTI ENTERPRISES: Court Denies Jonathan Foster Motion to Dismiss ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has denied the motion of Jonathan Foster to dismiss the Chapter 11 cases of HOTI Enterprises, LP, and HOTI Realty Management Co. Inc. As reported in the TCR on July 21, 2011, Jonathan Foster, sui juris, as Third Party Intervenor, asked the Bankruptcy court to dismiss the Debtors' cases under Rule 12(b) Federal Rules of Procedure, citing GECMC 2007 C-1 Burnett Street, LLC's failure to state a claim upon which relief can be granted. GECMC 2007 C-1 is the holder of a first mortgage on the primary asset of Hoti Enterprises. A copy of the motion to dismiss is available for free at: http://bankrupt.com/misc/hotienterprises.motiontodismiss.pdf GECMC 2007 C-1 objected to the motion to dismiss, citing that the movant has not established ?cause? to dismiss the Debtors' cases, and does not even cite any relevant Bankruptcy code or other statutory provision for support. Further, GECMC 2007 C-1 says movant is not a ?party in interest? in the Debtors' cases, has not filed a claim in these cases, and is not listed in the Debtor's schedules as a creditor. A copy of the objection is available for free at: http://bankrupt.com/misc/hotienterprises.gecmcobjection.pdf Counsel for GECMC 2007 C-1 Burnett Street, LLC, may be reached at: George B. South III, Esq. Vincent J. Roldan, Esq. DLA PIPER LLP (US) 1251 Avenue of the Americas New York, NY 10020-1104 Tel: (212) 835-6000 Fax: (212) 835-6001 About Hoti Enterprises Harrison, New York-based Hoti Enterprises, LP, is a single asset real estate holding company that owns an apartment complex located at 2801 Fillmore Avenue, 3001 Avenue R and 2719 Fillmore Avenue -- collectively, known as 1865 Burnett Street -- in Brooklyn, New York. Hoti Realty Management Co., Inc., was in the business of owning and operating a management company that managed the apartment complex. Hoti filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-24129) on Oct. 12, 2010. Hoti Enterprises estimated its assets and debts at $10 million to $50 million. Tanya Dwyer, Esq., at Dwyer & Associates, LLC, in New York, N.Y., represents the Debtors as counsel. A receiver of rents was appointed against Hoti Enterprises pre- bankruptcy pursuant to a foreclosure proceeding commenced by GECMC 2007-C-1 Burnett Street, Hoti's mortgagee and largest secured creditor. No Official Committee of Unsecured Creditors has been appointed in the case. HOVNANIAN ENTERPRISES: Sweetens Rejected Tender Offer for Bonds --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that after Hovnanian Enterprises Inc. received acceptances from holders of less than 1% of the $256 million in bonds due 2014 and 2015, the homebuilder sweetened the offer and extended the deadline to Oct. 29. Mr. Rochelle recounts that in September, Hovnanian announced a private exchange offer to some holders of $814 million in seven series of senior unsecured notes. Standard & Poor's characterized the exchange as distressed. Originally, holders could swap existing notes, bearing interest between 6.25% and 11.875%, for a like amount of 2% secured notes to mature in 2021. The existing notes mature between 2014 and 2017. According to the report, under the new proposal, holders of notes due in 2014 and 2015 will receive a like amount of new 5% secured notes, plus $100 cash along with accrued interest. Holders of three issues due in 2016 and 2017 are being offered the new 5% secured notes and accrued interest, although no cash. The new secured notes will mature in 2021. Holders of about 10% of the $542 million in bonds maturing in 2016 and 2017 accepted the original offer. The $137.6 million in 11.875% senior unsecured bonds maturing October 2015 traded Oct. 18 at 50.7 cents on the dollar, compared with 42.5 cents on the dollar on Oct. 4, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. On Sept. 8, the same bonds fetched 58.7 cents on the dollar. About Hovnanian Enterprises Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV) -- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian, is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes, Oster Homes and CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. The Company's balance sheet at July 31, 2011, showed $1.69 billion in total assets, $2.09 billion in total liabilities and a $399.35 million total deficit. * * * As reported by the TCR on April 25, 2011, Fitch Ratings has affirmed Hovnanian Enterprises, Inc.'s Issuer Default Rating (IDR) at 'CCC'. The rating for HOV is influenced by the Company's execution of its business model, land policies and geographic, price point and product line diversity. The rating also reflects the company's liquidity position, substantial debt and high leverage. In the Oct. 10, 2011 edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Hovnanian Enterprises Inc. to 'CC' from 'CCC'. "We also lowered our ratings on the company's rated senior debt. We downgraded the first-lien senior secured notes to 'CC' from 'CCC' and downgraded the senior unsecured notes to 'C' from 'CC'. "The downgrade follows Hovnanian's announcement that its K. Hovnanian subsidiary has commenced an offer to exchange certain existing senior notes with coupons ranging from 6.25% to 11.875% scheduled to mature between 2014 through 2017 for new 2% secured notes to mature in 2021," said credit analyst George Skoufis." "According to our criteria, we view this as a 'distressed Exchange' and tantamount to a default." As reported by the TCR on Sept. 13, 2011, Moody's Investors Service downgraded the corporate family and probability of default ratings of Hovnanian Enterprises, Inc. to Caa2 from Caa1. The downgrade reflects Hovnanian's continued operating losses, weak gross margins, very high homebuilding debt leverage, and Moody's expectation that the weakness in year-over-year revenues, deliveries, and net new contracts experienced by the company will continue for the next one to two years. In addition, the downgrades acknowledge that Hovnanian's cash balance is weakening and cash flow generation is negative as it pursues new land opportunities, which represented about $300 million of investment over the first nine months of fiscal 2011. HOVNANIAN ENTERPRISES: Revises Exchange Offers of Debt Securities ----------------------------------------------------------------- Hovnanian Enterprises, Inc., said that in connection with its previously announced private exchange offers and consent solicitation, K. Hovnanian Enterprises, Inc., a wholly-owned subsidiary of the Company, has increased the applicable Total Consideration with respect to the Exchange Offers for its 6 1/2% Senior Notes due 2014, its 6 3/8% Senior Notes due 2014, its 11 7/8% Senior Notes due 2015 and its 6 1/4% Senior Notes due 2015. The Company also extended the Early Tender and Consent Time for all Senior Notes from 5:00 p.m., New York City time, on Oct. 17, 2011, to 12:00 midnight, New York City time, on Oct. 29, 2011. In addition, the Company has extended the Withdrawal and Revocation Deadline for the 2014 Notes and the 2015 Notes from 5:00 p.m., New York City time, on Oct. 12, 2011 to 12:00 midnight, New York City time, on Oct. 29, 2011. The Withdrawal and Revocation Deadline for all other series of Senior Notes expired at 5:00 p.m., New York City time, on Oct. 12, 2011. As a result of the extension of the Early Tender and Consent Time and, in the case of the 2014 Notes and the 2015 Notes, the Withdrawal and Revocation Deadline, holders of Senior Notes that properly tender and, in the case of the 2014 Notes and the 2015 Notes do not validly withdraw, their Senior Notes prior to or on the extended Early Tender and Consent Time, and whose Senior Notes are accepted for exchange will receive the applicable Total Consideration. The Exchange Offers will expire at 12:00 midnight, New York City time, on Oct. 29, 2011, unless extended or earlier terminated. In exchange for each $1,000 principal amount of 2014 Notes validly tendered (and not validly withdrawn) on or prior to the extended Early Tender and Consent Time and accepted by K. Hovnanian, participating holders of 2014 Notes will receive $1,000 principal amount of 5.00% Senior Secured Notes due 2021 and a cash payment of $100, plus accrued and unpaid interest in cash. In exchange for each $1,000 principal amount of 2015 Notes validly tendered (and not validly withdrawn) on or prior to the extended Early Tender and Consent Time and accepted by K. Hovnanian, participating holders of 2015 Notes will receive $1,000 principal amount of 5.00% New Secured Notes and a cash payment of $100, plus accrued and unpaid interest in cash. The 5.00% New Secured Notes will have the same terms as the New Secured Notes described in the Offering Memorandum, other than with respect to interest rate and related redemption provisions, and will vote as a single class with the 2.00% New Secured Notes. In exchange for each $1,000 principal amount of all other Senior Notes validly tendered on or prior to the extended Early Tender and Consent Time and accepted by K. Hovnanian, participating holders of those Senior Notes will receive $1,000 principal amount of 2.00% Senior Secured Notes due 2021 with terms as described in the Offering Memorandum. The 2015 Notes Total Consideration, the 2014 Notes Total Consideration and the Senior Notes Total Consideration are referred to in this press release and in the Offering Memorandum as the "Total Consideration." Unless the Exchange Offers are further extended, the Early Tender and Consent Time will be at the Expiration Time and all holders who tender and have their Senior Notes accepted for exchange will receive the Total Consideration. K. Hovnanian will not accept any tender that would result in the issuance of less than $2,000 principal amount of the applicable New Secured Notes. The aggregate applicable Total Consideration or Exchange Consideration paid to each participating holder for Senior Notes validly tendered (and not validly withdrawn) and accepted will be rounded down, if necessary, to $2,000 or the nearest whole multiple of $1,000 in excess thereof. Fractional notes will not be issued and there will not be any cash payment in lieu thereof. Tenders of 2014 Notes and 2015 Notes may be withdrawn prior to the extended Withdrawal and Revocation Deadline, but not thereafter. A full-text copy of the filing is available for free at: http://is.gd/c8ZRAs About Hovnanian Enterprises Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV) -- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian, is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes, Oster Homes and CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. The Company's balance sheet at July 31, 2011, showed $1.69 billion in total assets, $2.09 billion in total liabilities and a $399.35 million total deficit. * * * As reported by the TCR on April 25, 2011, Fitch Ratings has affirmed Hovnanian Enterprises, Inc.'s Issuer Default Rating (IDR) at 'CCC'. The rating for HOV is influenced by the Company's execution of its business model, land policies and geographic, price point and product line diversity. The rating also reflects the company's liquidity position, substantial debt and high leverage. In the Oct. 10, 2011, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Hovnanian Enterprises Inc. to 'CC' from 'CCC'. "We also lowered our ratings on the company's rated senior debt. We downgraded the first-lien senior secured notes to 'CC' from 'CCC' and downgraded the senior unsecured notes to 'C' from 'CC'. "The downgrade follows Hovnanian's announcement that its K. Hovnanian subsidiary has commenced an offer to exchange certain existing senior notes with coupons ranging from 6.25% to 11.875% scheduled to mature between 2014 through 2017 for new 2% secured notes to mature in 2021," said credit analyst George Skoufis." "According to our criteria, we view this as a 'distressed Exchange' and tantamount to a default." As reported by the TCR on Sept. 13, 2011, Moody's Investors Service downgraded the corporate family and probability of default ratings of Hovnanian Enterprises, Inc. to Caa2 from Caa1. The downgrade reflects Hovnanian's continued operating losses, weak gross margins, very high homebuilding debt leverage, and Moody's expectation that the weakness in year-over-year revenues, deliveries, and net new contracts experienced by the company will continue for the next one to two years. In addition, the downgrades acknowledge that Hovnanian's cash balance is weakening and cash flow generation is negative as it pursues new land opportunities, which represented about $300 million of investment over the first nine months of fiscal 2011. HUGHES TELEMATICS: Amends 11.3 Million Common Shares Offering ------------------------------------------------------------- HUGHES Telematics, Inc., filed with the U.S. Securities and Exchange Commission Amendment No.1 to Form S-3 registration statement relating to the offer for sale by Alan B. & Joanne K. Vidinsky 1993 Trust, Albert L. Zesiger, Ascend Partners Fund I LP, et. al., of 11,311,709 shares of the Company's common stock, par value $0.0001 per share. All of the shares of common stock offered by this prospectus are being sold by the selling security holders. It is anticipated that the selling security holders will sell these shares of common stock from time to time in one or more transactions, in negotiated transactions or otherwise, at prevailing market prices or at prices otherwise negotiated. The Company will not receive any proceeds from the sales of shares of common stock by the selling security holders. The Company has agreed to pay all fees and expenses incurred by us incident to the registration of the Company's common stock, including SEC filing fees. Each selling security holder will be responsible for all costs and expenses in connection with the sale of their shares of common stock, including brokerage commissions or dealer discounts. The Company's common stock is currently traded on the Over-the- Counter Bulletin Board, commonly known as the OTC Bulletin Board, under the symbol "HUTC." As of Oct. 17, 2011, the closing sale price of the Company's common stock was $4.46 per share. A full-text copy of the amended prospectus is available for free at http://is.gd/cH61yh About HUGHES Telematics Atlanta, Ga.-based HUGHES Telematics, Inc. is a telematics services company that provides a suite of real-time voice and data communications services and applications for use in vehicles and is developing additional applications for use within and outside of the automotive industry. The Company reported a net loss of $89.56 million on $40.34 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $163.66 million on $33.04 million of total revenues during the prior year. The Company's balance sheet at June 30, 2011, showed $100.55 million in total assets, $195.45 million in total liabilities and a $94.89 million total stockholders' deficit. As of June 30, 2011, the Company had cash, cash equivalents and short-term investments of approximately $15.7 million and restricted cash of approximately $1.3 million which secures outstanding letters of credit. Of the Company's consolidated cash, cash equivalents and short-term investments, approximately $5.7 million is held by the Company's Lifecomm subsidiary for use in that business. As a result of the Company's historical net losses and the Company's limited capital resources, PricewaterhouseCoopers LLP's report on the Company's financial statements as of and for the year ended Dec. 31, 2010, includes an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern. HUSSEY CORP: Halkos Holdings Emerges as Second Bidder ----------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that a Delaware bankruptcy judge on Wednesday cleared Hussey Copper Corp. to sell its assets at auction after a second would-be stalking horse bidder forced Kataman Metals LLC to up its initial offer for the copper products company to $88.7 million. Law360 relates that the second bidder ? Halkos Holdings LLC ? emerged Tuesday as Hussey sought to approve auction procedures and an $84.7 million stalking horse bid from an affiliate of Kataman, a St. Louis-based metals trader. About Hussey Copper Hussey Copper Corp., based in Leetsdale, Pennsylvania, is one of the leading manufacturers of copper products in the United States. Hussey Copper was founded in Pittsburgh in 1848. The Company and its affiliates, which operate one manufacturing facility in Leetsdale and two facilities in Eminence, Kentucky, manufacture "a wide range of value-added copper products and copper-nickel products. The Company has more than 500 full-time employees. Hussey Copper Corp. filed a Chapter 11 petition (Bankr D. Del. Case No. 11-13010) on Sept. 27, 2011, with a deal to sell substantially all assets. Five other affiliates also filed separate petitions (Case Nos. 11-13012 to 11-13016). Hussey Copper Ltd. estimated $100 million to $500 million in assets and debts. Hussey Copper Corp. estimated up to $50,000 in assets and up to $100 million in debts. Mark Minuti, Esq., at Saul Ewing LLP, serves as counsel to the Debtors. Donlin Recano & Company Inc. is the claims and notice agent. An official creditors' committee has been appointed in the case. The panel selected Lowenstein Sandler PC as counsel. The stalking horse bidder, KHC Acquisitions LLC, a unit of Kataman Metals LLC, is represented in the case by David D. Watson, Esq., and Scott Opincar, Esq., at McDonald Hopkins LLC, in Cleveland. Counsel to PNC Bank NA, as lender, issuer and agent for the Debtors' secured lenders, are Lawrence F. Flick II, Esq., Blank Rome LLP, in New York, and, Regina Stango Kelbon, Esq., at Blank Rome LLP, in Wilmington, serves as counsel. INNER CITY: Taps Robert Maccini as Chief Restructuring Officer -------------------------------------------------------------- All Access Music Group reports that Inner City Media Corp. asked a bankruptcy court for permission to hire Media Consulting Services LLC and appoint veteran broadcast broker and executive Robert J. Maccini as chief restructuring officer of the company. According to the report, Mr. Maccini will report to the Company Board of Directors and will be empowered to cut sales, marketing and other expenses, including firing anyone other than Pierre M. Sutton, Keisha Sutton-James, Hal Jackson, and Lois Wright. Media Consulting will advise the Debtors' senior management team in the restructuring. The firm will be paid $25,000 per month plus expenses. About Inner City Media Corp. On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. INNER CITY: Reaches Deal With Lenders on Restructuring Plan ----------------------------------------------------------- All Access Music Group reports that Inner City Broadcasting Corp. appears to have reached an agreement with its lenders on a financial restructuring plan. According to the report, attorneys of the Debtor and lenders parties indicated to Bankruptcy Judge Shelley Chapman that they plan to file a Chapter 11 this week. Judge Chapman, in turn, has agreed to move up hearings which will hasten the process. The report says ICBC has not ruled out selling the stations as an option, although some sales if they occur, would not take place for at least a year. The Sutton family -- Pierre M. Sutton, Keisha Sutton-James, Hal Jackson, and Lois Wright -- is likely to receive about $1 million more under a new financial arrangement with primary lenders Yucaipa, Fortress Capital and Drawbridge Capital. The report relates that there is still no clear indication as to how current shareholders would fare. Under the previous offering, which ICBC President Pierre Sutton offered and then retracted, the Sutton family's stake would have been trimmed to just 2% with Mr. Pierre as chairman emeritus and a five-year, $600,000 per-year contract. About Inner City Media Corp. On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Fac ility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. INNER CITY: Wants to Employ MGBD as Bankruptcy Consultant --------------------------------------------------------- Inner City Media Corporation and its debtor affiliates seek court authority to employ Marotta Gund Budd & Dzera, LLC as their bankruptcy consultants and special financial advisor, nunc pro tunc to Sept. 8, 2011. Since late July, MGBD professionals have devoted substantial amounts of time and effort to work with members of the Debtors' senior management, analyzing and developing cash flow projections and assisting the Debtors with respect to their efforts to prepare for a chapter 11 filing. As a result of the prepetition work performed on behalf of the Debtors, MGBD has acquired significant knowledge of the Debtors' business operations, financial affairs, debt structure, restructuring efforts and other related matters. Likewise, in providing prepetition services to the Debtors, MGBD has worked closely with the Debtors' management and their other advisors. Accordingly, MGBD has developed relevant experience and expertise regarding the Debtors that will facilitate effective and efficient special financial advisory services in these Chapter 11 cases. As bankruptcy consultants and special financial advisor, MGBD will: (a) advise and assist management in organizing the Debtors' resources and activities so as to effectively and efficiently plan, coordinate and manage the Chapter 11 process and communicate with customers, lenders, suppliers, employees, shareholders and other parties in interest. This includes assisting in the preparation of the Statement of Financial Affairs, Schedule of Assets and Liabilities and Monthly Operating Reports; (b) assist management in designing and implementing programs to manage or divest assets, improve operations, reduce costs and restructure as necessary with the objective of rehabilitating the business; (c) advise the Debtors concerning interfacing with Official Committees, other constituencies and their professionals, including the preparation of financial and operating information required by the parties or the Bankruptcy Court; (d) advise and assist management in preparing and amending its Plan of Reorganization and underlying Business Plan, if necessary, including the related assumptions and rationale, along with other information to be included in the Disclosure Statement; (e) advise and assist the Debtors in forecasting, planning, controlling and other aspects of managing cash, and, if necessary, obtaining DIP and Exit financing; (f) advise the Debtors with respect to resolving disputes and otherwise managing the claims process; (g) advise and assist the Debtors in negotiating a Plan of Reorganization with the various creditor and other constituencies; (h) as requested, render expert testimony concerning the feasibility of a Plan of Reorganization and other matters that may arise in the case; and (i) provide other services as may be required by the Debtors. MGBD will be paid based on its Fee Structure, which consists of these hourly rates: Billing Category Range ---------------- ----- Senior Managing Directors $650 Professional Staff $200-$550 Paraprofessionals $100-$150 MGBD will also be reimbursed for reasonable and necessary out-of- pocket expenses. During the 90-day period prior to the date of the filing of the Debtors' Chapter 11 cases, the Debtors paid MGBD a retainer. Subsequent to September 1, 2011, MGBD will true-up the fees and expenses for the prepetition period and apply the retainer to any additional fees and expenses. MGBD will hold the balance of the retainer and apply the balance toward postpetition fees and expenses. The Debtors will also indemnify MGBD against all losses, claims, damages, liabilities, penalties, judgments, awards, costs, fees, expenses and disbursements including the costs, fees, expenses and disbursements, as and when incurred, of investigating, preparing or defending any action, suit, proceeding or investigation arising out of or in connection with the engagement of MGBD. Salvatore LoBiondo, Jr., a senior managing director of MGBD, assures the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, as required by Section 327(a) of the Bankruptcy Code, and does not hold or represent any interest adverse to the Debtors' estates and has no connection to the Debtors, its creditors or other parties-in- interest in the Chapter 11 cases. About Inner City Media Corp. On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. INNKEEPERS USA: Seeks Approval of Amended Commitment Letter ----------------------------------------------------------- BankruptcyData.com reports that the Fixed/Floating Debtors' in the Innkeepers USA Trust case filed with the U.S. Bankruptcy Court a motion for an order (I) authorizing the Fixed/Floating Debtors to enter into second amended commitment letter, (II) approving (A) modifications to the Fixed/Floating Plan and confirmation order and (B) amended New HoldCo/Midland commitment and (III) authorizing the Fixed/Floating Debtors to settle an adversary proceeding upon consummation of the Modified Fixed/Floating Plan. According to the filing, "The Fixed/Floating Debtors, Midland, Lehman, and SASCO have reached agreement with the Fixed/Floating Plan Sponsors on the Second Amended Commitment Letter, which sets forth the revised terms of a commitment by the Fixed/Floating Plan Sponsors to purchase the equity in the Fixed/Floating Debtors for just over $1 billion, and which, subject to the occurrence of the Effective Date of the Modified Fixed/Floating Plan, resolves the litigation filed by the Fixed/Floating Debtors and the Official Committee of Unsecured Creditors against the Fixed/Floating Plan Sponsors. Importantly, consummation of the transaction embodied in the Second Amended Commitment Letter is a condition precedent to the settlement of the litigation." Under the agreement, Midland, as holder of the Class FF3A Fixed Rate Pool Mortgage Loan Claim, will enter into a New Fixed Rate Pool Mortgage Loan Agreement in the amount of $675 million and receive New Fixed Rate Pool Mortgage Notes; Lehman, on account of its Class FF3B Floating Rate Pool Mortgage Loan Claims, will receive a cash payment in the amount of $224 million; SASCO will no longer receive any cash distribution on account of its Class FF4 Floating Rate Pool Mezzanine Loan Claims but will receive the benefit of the release in Article VIII.E of the confirmed Fixed/Floating Plan and all other holders of claims and interests will continue to receive the treatment set forth in the confirmed Fixed/Floating Plan. The Court scheduled an Oct. 21, 2011 hearing on the matter. About Innkeepers USA Trust Innkeepers USA Trust is a self-administered Maryland real estate investment trust with a primary business focus on acquiring premium-branded upscale extended-stay, mid-priced limited service, and select-service hotels. Innkeepers, through its indirect subsidiaries, owns and operates an expansive portfolio of 72 upscale and mid-priced extended-stay and select-service hotels, consisting of approximately 10,000 rooms, located in 20 states across the United States. Apollo Investment Corporation acquired Innkeepers in June 2007. Innkeepers USA Trust and 91 affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-13800) on July 19, 2010. The Company's consolidated assets for 2009 totaled approximately $1.5 billion. As of July 19, 2010, the Company and its affiliates have incurred $1.29 billion of secured debt. Paul M. Basta, Esq., at Kirkland & Ellis LLP, in New York; Anup Sathy, P.C., Esq., Marc J. Carmel, Esq., at Kirkland & Ellis in Chicago; and Daniel T. Donovan, Esq., at Kirkland & Ellis in Washington, D.C., serve as counsel to the Debtors. AlixPartners is the restructuring advisor and Marc A. Beilinson is the chief restructuring officer. Moelis & Company is the financial advisor. Omni Management Group, LLC, is the claims and notice agent. Attorneys at Morrison & Foerster, LLP, represent the Official Committee of Unsecured Creditors. INPHASE TECH: Files for Chapter 11 Bankruptcy Protection -------------------------------------------------------- InPhase Technologies filed for Chapter 11 with the U.S. Bankruptcy Court for the District of Colorado on Oct. 18, 2011. The company said it is seeking to restructure by the end of 2011 as it deals with existing creditors. According to Inphase, Signal Lake, an investor in technology and computer communications companies, has been seeking the best possible route for rebuilding the company, and agreed with its partners that Chapter 11 was the most expeditious means of achieving that goal. The Denver Business Journal reports that the company laid off its 60 employees and shut down in February 2010 before resuming operations later in the year. The report says the company estimated assets of $50 million to $100 million and estimated debts of $10 million to $50 million in its bankruptcy filing. InPhase reported it owes its 20 largest creditors a combined $2.08 million. The largest credit -- owed $422,987 -- is the Denver law firm Morrison & Foerster LLP. Based in Longmont, Colorado, InPhase Technologies -- http://www.inphase-tech.com-- develops holographic data storage recording media and systems. InPhase was founded in 2000. InPhase is led by CEO Art Rancis and senior vice president of engineering James Russo. Initial InPhase customers have included the likes of Turner Broadcasting. JEMA ENTERPRISES: Can't Pursue Claims Over Home Equity Loan ----------------------------------------------------------- Jema Enterprises, LLC, et al., v. Border Capital Bank, Adv. Proc. No. 11-07011 (Bankr. S.D. Tex.), seek leave to amend their complaint and to add Security Land Title as a defendant. Jema Enterprises, Manual Ramirez, and Juana Ramirez filed the adversary proceeding against Border Capital Bank on June 15, 2011. Jema amended its complaint on June 22, 2011. On Sept. 13, 2011, Jema filed a Motion for Leave to Amend Complaint Under 15(a) and to Join Additional Parties Under Rule 21. Jema sought to add additional causes of action and two new defendants: Security Land Title LLC and First American Title Insurance Company. Border Capital argued leave to amend should be denied due to the futility of certain causes of action. Jema filed an initial response and an additional Motion to Amend with a new Second Amended Complaint. The new complaint reduced the total causes of action and added only one new defendant, Security Land Title. Accompanying the new complaint was a new response to Border Capital's futility arguments. Jema's Second Amended Complaint lists four causes of action: (1) Failure to Satisfy Texas's Requirements for Home Equity Loans (Border Capital only); (2) Declaratory Judgment regarding the validity of the liens; (3) Quiet Title/Remove Cloud on Title (Border Capital only); (4) Violations of the Deceptive Trade Practices Act (Security Land Title only). In an Oct. 19, 2011 Memorandum Opinion, a copy of which is available at http://is.gd/IdanZefrom Leagle.com, Bankruptcy Judge Marvin Isgur granted Jema leave to amend with respect to all claims except for the Home Equity Loan cause of action. The Court also granted Jema leave to add Security Land Title as a defendant. Although leave to amend should be freely given, the Court will not allow the Plaintiffs to plead futile causes of action, Judge Isgur said. The judge held that as argued by Border Capital, it is clear the statute of limitations has run. Jema argues the statute of limitations doesn't apply because: (1) plaintiffs didn't learn of the violations until they spoke with a lawyer and (2) because Border Capital fraudulently concealed relevant information and/or failed to disclose such information. In short, Judge Isgur said, Jema contends the "discovery rule" means the statue of limitations did not begin until (i) Jema consulted with counsel; and (ii) Border Capital affirmatively disclosed that its actions violated the law. "Neither argument has merit. The discovery rule concerns the discovery of new facts not previously known to the plaintiffs. It does not pertain to the sudden realization that previously known facts violated the law," Judge Isgur explained. Moreover, the judge continued, Jema offered no reason why Border Capital would have a duty to disclose a prior violation of the home equity laws. Jema provided no factual support for the claim Border Capital fraudulently concealed relevant information. "At the hearing it became clear Jema was aware of all relevant facts. Jema was simply unaware of the law," the judge pointed out. About Jema Enterprises Jema Enterprises, LLC, in McAllen, Texas, filed for Chapter 11 bankruptcy (Bankr. S.D. Tex. Case No. 11-70218) on April 4, 2011. The case was initially assigned to Judge Richard S. Schmidt. The Law Offices of Antonio Villeda -- avilleda@mybusinesslawyer.net -- serves as counsel to the Debtor. In its petition, Jema estimated $1 million to $10 million in assets and debts. The petition was signed by Manuel Ramirez, member. Manuel and Juana P. Ramirez filed a separate petition on the same day. JAMESON INN: Affiliate Files for Bankruptcy to Halt Foreclosure --------------------------------------------------------------- Dow Jones' DBR Small Cap reports that court papers show the Jameson Inn hotel chain moved to halt a planned foreclosure by creditor Colony Capital LLC by putting an affiliated entity into Chapter 11 bankruptcy protection. As reported in the Troubled Company Reporter on Aug. 26, 2011, Daily Bankruptcy Review said that a person familiar with the matter said private-equity investor Colony Capital LLC removed a potential competitor in its bid to foreclose on the Jameson Inn hotel chain by purchasing the $39 million portion of Jameson's mezzanine debt held by AllianceBernstein Holding LP. Colony now holds $78 million of the mezzanine debt, putting Colony in prime position to follow through on its bid to foreclose on Jameson. The report related Jameson's $330 million of debt came due Aug. 9, but that date passed without payment from Jameson or owner JER Partners. Colony and AllianceBernstein declared Jameson in default. The report said a foreclosure auction in the case is scheduled for Sept. 23. According to DBR, analysts have estimated that Jameson's hotels collectively are worth less than the chain's total debt, making any refinancing difficult. The source also told DBR that Colony requested an extension of the due date of Jameson's $170 million first mortgage. DBR said Wells Fargo & Co.'s Wachovia Corp is the servicer overseeing that securitized mortgage. About Jameson Founded in 1987, Jameson is a chain of 103 small, budget hotels operating under the Jameson brand in the Southeast and Midwest. The chain was taken private in a 2006 buyout by JER Partners, a unit of real-estate investor J.E. Robert Cos. JER then put $330 million of debt on the chain to finance the buyout. Colony specializes in real estate and has roughly $34 billion of assets under management. JEMANYA CORP: Involuntary Chapter 11 Case Summary ------------------------------------------------- Alleged Debtor: Jemanya Corp. 55 South Fifth Street Brooklyn, NY 11211 Case Number: 11-48762 Involuntary Chapter 11 Petition Date: October 16, 2011 Court: Eastern District of New York (Brooklyn) Judge: Jerome Feller Petitioners' Counsel: Lawrence Morrison, Esq. New York, NY 10017 Tel: (212) 655-3582 Jemanya Corp.'s petitioners: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Augusto Hernandez Goods delivered $25,000 c/o AJ Ironwork Renovtions Corp 466 Carrol Street Brooklyn, NY 11215 Charan Singh, Har Ji Goods delivered $20,000 Plumbing & Heating Corp. 117-02 Atlantic Avenue Queens, NY 11215 Pablo Castro Goods delivered $10,000 c/o Image Renovations Corp 25-14 89th Street Jackson Heights, NY Yali Omar Perez Goods delivered $9,750 518 Cresent Avenue Brooklyn, NY 11208 Alfredo Villatoro Goods delivered $7,875 1515 West 7th Street#D3 Brooklyn, NY 11204 Marvin Matute Goods delivered $7,350 300 Day Avenue Fairview, NJ 07022 Kerwin Santos Goods delivered $6,550 300 Day Ave Fairview, NJ 07022 JM HUBER: Moody's Assigns 'B1' CFR; Outlook Positive ---------------------------------------------------- Moody's Investors Service assigned a CFR of B1 to JM Huber Corporation (Huber), and rated its $225 million senior unsecured notes offering at B2 (LGD4, 63%). Proceeds from the notes and a new bank facility are expected to be used to repay existing revolver balances and build cash in anticipation of the maturity of the company's 2012 notes. The rating on the notes is subject to final review of the offering documents at closing. The rating outlook is positive. Ratings Assigned: JM Huber Corporation Corporate Family Rating -- B1 Probability of Default Rating --B1 $225 million Senior Unsecured Notes due 2019 -- B2 (LGD4, 63%) Outlook: Positive The B1 Corporate Family Rating (CFR) assigned to Huber is constrained mainly by elevated leverage, its recent history of negative free cash flow, and the significant restructuring of its operations over the past several years. Moody's notes that if divested operations and property divestitures over the last three years are considered Huber did generate positive cash flow. Upon completion of the October 2011 refinancing transactions, pro forma Debt/EBITDA is expected to be about 3.7x (reflecting Moody's standard analytical adjustments). Other factors constraining the ratings include the potential weakening of the company's specialty chemical businesses in the event of a weakening global economy. The company runs its operations through three main business segments: CP Kelco and Huber Engineered Materials that focus on specialty chemicals, and Huber Engineered Woods whose focus is engineered wood products. Moody's notes that Huber's chemical businesses performed reasonably well in the 2008 and 2009 weak global economy. Post restructuring efforts Huber's wood products business (HEW) is currently breakeven on an EBITDA basis given its exposure to the US new home construction and repair and remodeling industries. These industries also have a significant impact on the demand for the product lines of other Huber businesses, specifically HEM's ground calcium carbonate (GCC -- a filler for plastics, paints and adhesives) and alumina trihydrate (ATH -- fire retardant for plastic applications) products. Each of these specific product lines has been materially impacted by the ongoing period of distress in the U.S. housing market, which Moody's expects to remain at depressed levels throughout 2012. Of additional concern is the need, as a family owned company to sustain the annual $20 million per year in dividends as well as the ongoing narrow financial disclosure that is inherent with a non-SEC filer. The positive outlook recognizes the recent completion of restructuring efforts by management and the prospect for continuing improvement in cash flows and credit metrics. The company's expanding presence in emerging markets, as well as its vocalized desire to achieve, over time, investment grade credit metrics are also viewed as credit positives. Moody's expects that JM Huber's revenues will experience modest growth and maintain good profitability over the next several years, assuming that it will retain its leading market positions in its key products and continues to move away from commodity applications. Additionally the positive outlook assumes the US and Europe do not become mired in another recession. Should the company continue to leverage its successful restructuring efforts into stronger cash flows on a sustained basis (6-12 months), Moody's would likely consider upgrading the ratings particularly if free cash flow to debt were to exceed 5% and Debt/EBITDA were to drop below 3.5 times on a sustainable basis. The ratings could be downgraded if market conditions in the company's two core specialty chemical businesses were to deteriorate significantly, resulting in shrinking margins and leverage above 5.0 times. The principal methodology used in rating JM Huber was the 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. JM Huber is a privately-held, diversified specialty chemical and engineered materials company founded in New Jersey in 1883. The company runs its operations through three main business segments: CP Kelco, Huber Engineered Materials, and Huber Engineered Woods. The company sold the majority of its remaining timber land holdings at the end of June 2011, and reached agreement to sell its energy business in the second half of 2011. Revenues for the LTM ended 6/30/2011 were approximately $1.5 billion. JM HUBER: S&P Assigns 'BB-' Corporate Credit Rating --------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB-' corporate credit rating to Edison, N.J.-based specialty materials and wood products producer J.M. Huber Corp. The outlook is stable. "At the same time, we assigned a 'BB-' issue rating and a '4' recovery rating to the company's proposed offering of $225 million of senior unsecured notes due 2019. The '4' recovery rating indicates our expectation of average (30% to 50%) recovery for noteholders in the event of a payment default," S&P related. The corporate credit rating on privately held J.M. Huber Corp. reflects its fair business risk profile and aggressive financial risk profile. Huber manufactures specialty materials and oriented strandboard (OSB), a plywood substitute used primarily in new residential construction. It also has a small timberland management business. Huber expects to close on the sale of its natural gas property development business in the fourth quarter of 2011 for proceeds of about $30 million, a portion of which may be in the form of notes. Huber's financial performance has suffered in recent years because of weak demand for OSB and, more recently, low natural gas prices and rising raw material costs. "Given a poor natural gas pricing outlook for at least the next few years, Huber's small scale in this business, and heavy capital spending requirements, we regard Huber's decision to exit the gas business as positive for both the business and financial risk profiles," S&P said. Huber has steadily and significantly reduced debt in recent years, primarily with proceeds from the sale of noncore assets. Nevertheless, because of weakness in OSB markets, debt leverage remains aggressive. Huber has embarked on an initiative to reshape its business mix to further reduce cyclicality and intends to significantly increase EBITDA in coming years. "We believe that this may involve acquisitions to extend its specialty materials product lines. However, we assume the company will undertake them with a view to avoiding deterioration of the financial profile," S&P said. S&P's key assumptions affecting Huber's operating performance during the next year include: Subdued global economic conditions, with continued weakness in U.S. housing; Benefits from Huber's recent capacity additions in certain specialty ingredient product lines; Improved pricing to offset raw material cost inflation; OSB improving to near break-even cash flow; and The company's exit from the gas business in 2011. The outlook is stable. In the face of business and economic challenges, management's commitment to strengthening credit quality is an important rating consideration. "We believe that through gradual earnings improvement and modest net debt reduction, funds from operations to net adjusted debt will strengthen to the 15%-20% range we consider appropriate for the ratings. The stable outlook also incorporates our expectation that Huber completes the proposed refinancing during the next several weeks," S&P stated. "We could lower the rating if refinancing delays lead to liquidity concerns," S&P said. "We could also lower the ratings if macroeconomic conditions worsen more than we expect, if the company is unable to pass on heightened raw material costs to its customers in a timely manner, or if more competitive market conditions result in lower operating profitability. A downgrade would also occur in the unexpected event of a shift to more aggressive financial policies," S&P stated. "We anticipate that Huber's cash flow generation will eventually increase as a result of a cyclical recovery in U.S. housing markets, although this is unlikely to occur during the next one to two years. We also believe that the company is likely to continue reshaping its portfolio to grow in the less-cyclical specialty ingredients business. We would expect potential portfolio changes to result in higher and more consistent cash flow generation. If the company can accomplish this without increasing leverage, we could consider an upgrade. We would consider a one-notch upgrade (to a 'BB' corporate credit rating) if Huber generates consistently positive discretionary cash flow and its funds from operations to adjusted total debt ratio consistently exceeds 20%," S&P stated. KINGSBURY CORP: Utica Leaseco Withdraws Case Dismissal Plea ----------------------------------------------------------- The Hon. J. Michael Deasy of the U.S. Bankruptcy Court for the District of New Hampshire, at the Oct. 6 hearing, disclosed that Utica Leaseco, LLC's motion to dismiss the Chapter 11 case of Kingsbury Corporation was withdrawn. In its objection, the Debtor denied that Utica or Maynards will suffer harm as a result of the auction being stayed. Utica Leaseco, asserted that the Debtor's pleadings indicate that the Debtor will suffer substantial losses of at least $125,000 if it is allowed to regain title and possession of Utica's Equipment. Moreover, the Debtor's financial projections show that it will have very limited capital (approximately $48,000) as of Oct. 21, 2011. Therefore, it is clear that there is no likelihood of rehabilitation. Utica is represented by: Daniel W. Sklar, Esq. Lee Harrington, Esq. Nixon Peabody, LLP 900 Elm Street Manchester, NH 03101 Tel: (603) 628-4000 Fax: (603) 628-4040 About Kingsbury Corp. Kingsbury Corp. -- http://www.kingsburycorp.com-- makes and assembles machine systems. Kingsbury Corporation and affiliate Ventura Industries, LLC, filed Chapter 11 petition (Bankr. D. N.H. Case Nos. 11-13671 and 11- 13687) on Sept. 30, 2011. Jennifer Rood, Esq., and Robert J. Keach, Esq., at Berstein, Shur, Sawyer & Nelson, server as counsel to the Debtors. Kingsbury estimated assets and debts of up to $50 million in its Chapter 11 petition. KINGSBURY CORP: Section 341(a) Meeting Scheduled for Nov. 1 ----------------------------------------------------------- The U.S. Trustee for Region 1 will convene a meeting of creditors in Kingsbury Corporation's Chapter 11 case on Nov. 1, 2011, at 2:00 p.m. The meeting will be held at Room 702, Seventh Floor, 1000 Elm Street, Manchester, New Hampshire. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Individuals or entities have until Jan. 30, 2012, to file proofs of claims. About Kingsbury Corp. Kingsbury Corp. -- http://www.kingsburycorp.com-- makes and assembles machine systems. Kingsbury Corporation and affiliate Ventura Industries, LLC, filed Chapter 11 petition (Bankr. D. N.H. Case Nos. 11-13671 and 11- 13687) on Sept. 30, 2011. Jennifer Rood, Esq., and Robert J. Keach, Esq., at Berstein, Shur, Sawyer & Nelson, server as counsel to the Debtors. Kingsbury estimated assets and debts of up to $50 million in its Chapter 11 petition. LAS VEGAS RUSSELL: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Las Vegas Russell Road, LLC c/o Realty Advisory Group 1613 Chelsea Road, #190 San Marino, CA 91108 Bankruptcy Case No.: 11-53302 Chapter 11 Petition Date: October 17, 2011 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Victor A. Sahn, Esq. SULMEYERKUPETZ, A PROFESSIONAL CORPORATION 333 S. Hope Street, 35th Floor Los Angeles, CA 90071-1406 Tel: (213) 626-2311 Fax: (213) 629-4520 E-mail: vsahn@sulmeyerlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 The Company's list of its 10 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/cacb11-53302.pdf The petition was signed by James W. Abbott, president of Realty Advisory Group, Inc., and Frank W. Abbott, Jr., president of Abbott Bros. Development, Inc., co-managing members. LE-NATURE'S: Ex-CEO Deserves 20 Years for Fraud, Prosecutors Say ---------------------------------------------------------------- Jake Simpson at Bankruptcy Law360 reports that prosecutors asked a federal court Monday to hand Le-Nature's Inc. ex-CEO Gregory Podlucky a 20-year prison sentence for his role in a $668 million accounting fraud, arguing he hadn't recovered nearly as much money for creditors as he'd claimed in the firm's bankruptcy proceedings. Law360 says Mr. Podlucky pled guilty in June to tax fraud, securities fraud and money laundering, admitting he had orchestrated a massive accounting scheme at Latrobe, Pa.-based Le- Nature's, a bottling company. About Le-Nature's Inc. Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. -- http://www.le-natures.com/-- makes bottled waters, teas, juices and nutritional drinks. Its brands include Kettle Brewed Ice Teas, Dazzler fruit juice drinks and lemonade, and AquaAde vitamin-enriched water. Four unsecured creditors of Le-Nature's filed an involuntary Chapter 7 petition against the Company (Bankr. W.D. Pa. Case No. 06-25454) on Nov. 1, 2006. On Nov. 6, 2006, two of Le-Nature's subsidiaries, Le-Nature's Holdings Inc., and Tea Systems International Inc., filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. Judge McCullough converted Le Nature's Inc.'s case to a Chapter 11 proceeding. The Debtors' cases are jointly administered. The Debtors' schedules filed with the Court showed $40 million in total assets and $450 million in total liabilities. Douglas Anthony Campbell, Esq., Ronald B. Roteman, Esq., and Stanley Edward Levine, Esq., at Campbell & Levine, LLC, represents the Debtors in their restructuring efforts. The Court appointed R. Todd Neilson as Chapter 11 Trustee. Dean Z. Ziehl, Esq., Richard M. Pachulski, Esq., Stan Goldich, Esq., Ilan D. Scharf, Esq., and Debra Grassgreen, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Chapter 11 Trustee. David K. Rudov, Esq., at Rudov & Stein, and S. Jason Teele, Esq., and Thomas A. Pitta, Esq., at Lowenstein Sandler PC, represent the Official Committee of Unsecured Creditors. Edward S. Weisfelner, Esq., Robert J. Stark, Esq., and Andrew Dash, Esq., at Brown Rudnick Berlack Israels LLP, and James G. McLean, Esq., at Manion McDonough & Lucas represent the Ad Hoc Committee of Secured Lenders. Thomas Moers Mayer, Esq., and Matthew J. Williams, Esq. at Kramer Levin Naftalis & Frankel LLP, represent the Ad Hoc Committee of Senior Subordinated Noteholders. In July 2008, the Chapter 11 plan of liquidation for Le-Nature's took effect. LEHMAN BROTHERS: Continues to Dominate Trading in Claims -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Lehman Brothers Holdings Inc. continues to dominate trading in claims of bankrupt companies. The $4.4 billion of Lehman claims traded in September represented 97% of the value of all claims swapped in the month, according to data compiled from court records by SecondMarket Inc. With 941 trades, Lehman and its brokerage subsidiary accounted for 74% of the number of claim trades, SecondMarket reported. Mr. Rochelle notes that no other bankrupt company comes even close to Lehman. Excluding a bankrupt company where one large claim was traded, Great Atlantic & Pacific Tea Co. had the second-most trading activity, generating $23.4 million in trades, or 0.5% of the amount of Lehman transfers. Mr. Rochelle also notes that claims trading is trailing 2010's record pace. Through the third quarter last year, total trades were $7 billion more than the comparable period in 2011, the SecondMarket report says. Trading in Lehman claims isn't flagging even though the former investment bank's reorganization plan is set for approval by the bankruptcy judge at a Dec. 6 confirmation hearing. Lehman has dominated claims trading since May 2009, SecondMarket said. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009, more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Lloyd's to Pay $500,000 to Settle With GameTech ---------------------------------------------------------------- Lehman Brothers Holdings Inc. seek court ruling authorizing certain underwriters at Lloyd's, London to pay $500,000 to settle an arbitration case filed by GameTech International Inc. Earlier, GameTech reached an agreement with current and former Lehman officers and employees to settle the arbitration case, styled GameTech International, Inc. v. Lehman Brothers Inc., et al. The case, which is overseen by the Financial Industry Regulatory Authority, stemmed from alleged securities law violations committed by the defendants in connection with GameTech's investment in auction rate securities. Judge James Peck will hold a hearing on November 16, 2011, to consider approval of the request. The deadline for filing objections is November 2, 2011. Essex Equity Holdings USA LLC asked the Court to reject Lehman Brothers Holdings Inc.'s bid to release other insurers from policies issued to former executives, saying the insurance dispute was not proper for the court. In a limited objection, Essex Equity argues that the debtor's bid to grant releases in connection with the directors and officers policies "places the court directly in the middle of an insurance coverage dispute, a dispute this court has cautioned it would not hear and about which virtually no information is provided by [the] Debtors." About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Judge James Peck on Aug. 30, 2011, approved the disclosure statement, which outlines the major provisions of Lehman's $65 billion liquidation plan. The proposed plan would enable LBHI and its affiliated debtors to pay an estimated $65 billion to their creditors. Voting on the Plan ends on Nov. 4, 2011. A hearing to consider confirmation of the Plan is set for Dec. 6, 2011. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Proposes to Assume Agreement With Ritz-Carlton --------------------------------------------------------------- Lehman Brothers Holdings Inc. seeks court approval to assume an agreement that would ensure Ritz-Carlton Hotel Company LLC's continued management of a resort hotel and condominium in Hawaii. The move is part of LBHI's plan to take title to the hotel after it emerged as the winning bidder at a public auction of the property on May 5, 2011. Prior to the auction, the company won approval from the Hawaii Circuit Court to foreclose on the mortgage on the property. The mortgage was executed by W2005 Kapalua/Gengate Hotel Realty LLC to secure its $232.4 million loan from LBHI. The agreement, known as Subordination, Non-Disturbance and Attornment Agreement, requires LBHI to enter into a revised management agreement with Ritz-Carlton. The revised management agreement calls for Ritz-Carlton's continued management of the hotel. LBHI's designee, RCK Maui LLC, will also assume certain obligations of W2005 Kapalua under the revised management agreement. Judge James Peck will hold a hearing on October 27, 2011, to consider approval of the proposed assumption of the agreement. The deadline for filing objections is October 20, 2011. Earlier, the bankruptcy judge authorized LBHI to file under seal the SNDA and the management agreement, which reportedly contain confidential information. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Judge James Peck on Aug. 30, 2011, approved the disclosure statement, which outlines the major provisions of Lehman's $65 billion liquidation plan. The proposed plan would enable LBHI and its affiliated debtors to pay an estimated $65 billion to their creditors. Voting on the Plan ends on Nov. 4, 2011. A hearing to consider confirmation of the Plan is set for Dec. 6, 2011. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Committee Backs EUR328MM Loan Restructuring ------------------------------------------------------------ The Official Committee of Unsecured Creditors in Lehman Brothers' cases expressed its support for the approval of the proposed restructuring of the EUR328 million mezzanine loan facility Lehman Commercial Paper Inc. entered into with Zwinger OpCo 6 B.V. The Creditors' Committee said the proposed restructuring "provides the best strategy available" for LCPI to maximize the value of its stake in the loan facility for the benefit of its estate and creditors. LCPI provided financing to Zwinger OpCo, a Dutch company, in 2007 for the acquisition of about 95% of the units in an Italian real estate fund. It proposed to restructure the loan facility to maximize its recoveries from its debt position in that facility. The company has not been receiving amounts due to it under the loan facility allegedly because of a non-functioning security agent and the delayed pace of asset sales caused the slowdown in the Italian real estate market, according to court filings. LEHMAN BROTHERS: Committee Backs 2012 Incentive Program ------------------------------------------------------- The Official Committee of Unsecured Creditors in Lehman Brothers' cases expressed its support for the implementation of a $12 million incentive plan for employees working to unwind the derivatives business of Lehman Brothers Holdings Inc. "The Committee believes that the 2012 incentive plan embodies a properly targeted program that provides appropriate incentives to the professionals who are working hard to maximize the value of the Debtors' portfolio of derivatives contracts," said the Committee's lawyer, Dennis Dunne, Esq., at Milbank Tweed Hadley & McCloy LLP, in New York. Incentive Program As reported in the Oct. 7, 2011 edition of the TCR, the Debtors seek court approval to create a $12 million incentive plan for employees working to unwind their derivatives business. About 170 workers were hired this year to wind down the derivatives business. They are directly employed by LAMCO Holdings LLC, the entity created to manage Lehman assets. The employees participating under the proposed incentive plan are tasked to review and reconcile claims remaining from the more than 8,000 derivatives claims totaling more than $75 billion. As of August 30, 2011, Lehman recovered about $1.4 billion in cash from its derivatives assets, bringing the total amount of cash recovered to more than $13.6 billion since its bankruptcy filing. Valuation of Lehman derivatives contracts has also been substantially completed and 70% of the contracts with third- parties are considered to be "final settled," according to court filings. Last year, Judge James Peck approved an incentive plan, which offered a performance-based bonus pool of up to $15 million. Payments made under the 2012 incentive plan will also be based on the performance of the employees. A table comparing the 2011 and 2012 incentive plans is available for free at http://bankrupt.com/misc/LBHI_2012IncentivePlan.pdf Lehman also proposed to change certain aspects of the court- approved retention and recruitment program, including the criteria for the payment of contractual bonus to employees involved in the derivatives business. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Judge James Peck on Aug. 30, 2011, approved the disclosure statement, which outlines the major provisions of Lehman's $65 billion liquidation plan. The proposed plan would enable LBHI and its affiliated debtors to pay an estimated $65 billion to their creditors. Voting on the Plan ends on Nov. 4, 2011. A hearing to consider confirmation of the Plan is set for Dec. 6, 2011. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Withdraws Plea for Giants Documents ---------------------------------------------------- Lehman Brothers Holdings Inc. withdrew its motion to compel Giants Stadium LLC to turn over documents related to its role as partner in a swap deal. The motion was filed following Giant Stadium's refusal to turn over certain documents that it shared with its financial adviser, Goldman Sachs & Co. Earlier, LBHI served Giants Stadium with a subpoena to produce the documents in connection with its investigation of Giants Stadium's $301.8 million claim against the company and Lehman Brothers Special Financing Inc. The claim stemmed from the swap deal Giants Stadium entered into with LBSF in connection with the $650 million in securities it issued to finance the construction of the New Meadowlands stadium. The swap deal was terminated by Giants Stadium after the Lehman units filed for bankruptcy protection in September 2008. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Judge James Peck on Aug. 30, 2011, approved the disclosure statement, which outlines the major provisions of Lehman's $65 billion liquidation plan. The proposed plan would enable LBHI and its affiliated debtors to pay an estimated $65 billion to their creditors. Voting on the Plan ends on Nov. 4, 2011. A hearing to consider confirmation of the Plan is set for Dec. 6, 2011. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LIVERPOOL CITY HOSPITAL: Moody's Lowers LT Bond Rating to 'Ba1' --------------------------------------------------------------- Moody's Investors Service has downgraded to Ba1 from Baa2 the long-term bond rating assigned to East Liverpool City Hospital's (ELCH) $9.8 million of outstanding bonds issued by the City of East Liverpool, Ohio. The outlook remains negative. SUMMARY RATING RATIONALE The rating downgrade is a result of the continued large operating losses and cash flow deficit through nine months of FY 2011, following a major downturn in performance in FY 2010, due primarily to sizeable volume declines related to physician departures. The outlook remains negative, which is indicative of Moody's belief that financial performance may experience further erosion for the remainder of FY 2011 and during FY 2012 if management's strategies to improve performance are unsuccessful and further reduce cash. In addition, management does not expect the organization to be cash flow positive for FY 2011, and has used cash reserves to support the operations of the hospital. CHALLENGES Material erosion in financial performance in fiscal year (FY) 2010 and through nine months of FY 2011, with a -14.9% operating margin and negative cash flow generation (-5.2% margin) in FY 2010, and a -11.6% operating margin and -2.4% operating cash flow margin through nine months of FY 2011; the multi-year downturn in performance results in materially weak debt coverage of 0.81 times maximum annual debt service (MADS) coverage and unfavorably high 27.1 times debt-to-cash flow through nine months of FY 2011 FY 2011 will mark the sixth consecutive year of operating losses and the second consecutive year of negative operating cash flow; the hospital has not generated break-even performance from operations since FY 2005 and relies heavily on investment income to support operations While unrestricted cash levels remain relatively high for the rating category, as of September 30, 2011 cash had declined by $9.5 million, to $60.4 million (361 days cash on hand), down from $69.9 million (439 days cash on hand) held at fiscal yearend (FYE) 2010; similarly, cash-to-debt declined to 224.2% from 259.4%, and Moody's expects cash will continue to decline for the remainder of FY 2011 and into FY 2012 Large inpatient volume declines with an 8.6% drop in FY 2009 and a 10.8% reduction in FY 2010 contributing to revenue contraction in both years; volumes have stabilized somewhat through nine months of FY 2011 with inpatient volumes down slightly (-0.2%) compared to the prior year same period An acceleration of ELCH's Series 2006 variable rate demand bonds ($17.2 million outstanding) is possible if the hospital is unable to meet its letter of credit (LOC) covenant of a minimum 1.2 times debt service coverage ratio; management indicates there is a possibility that the hospital will be unable to meet this covenant when it is measured at fiscal yearend 2011 Recent management turnover has resulted in a slow reaction to the weak financial performance and physician departures that occurred in 2010; the hospital's Chief Executive Officer (CEO) position was filled by an interim CEO from July 2010 and until November 2010, and the hospital's Chief Financial Officer (CFO) position was held by an interim CFO from March 2011 until August 2011; the current CEO (permanent) has been with ELCH since November 2010 and the current CFO (permanent) joined ELCH in August 2011 FY 2012 budget is not expected to show break-even operating performance as management anticipates $3-4 million operating losses for the year; management is relying on physician recruitment and alignment strategies and revenue cycle improvements to recover lost volumes and to grow revenues Below average service area demographics as indicated by declining population, high unemployment relative to state and national averages, and low median income levels results in a high dependence on governmental payers (Medicare, Medicaid, and self- pay payers account for 73% of the hospital's gross revenues) STRENGTHS Historically strong balance sheet with unrestricted cash and investments totaling $60.4 million as of September 30, 2011 (361 days cash on hand), although as noted above, cash levels have declined substantially from FYE 2010 Relatively low debt-load, with absolute debt of $26.9 million and cash-to-debt adequate at 224.2%; ELCH's debt profile consists of 62% variable rate demand debt which poses put risk and accelerated payment risk, although cash-to-demand debt is strong at 351.9% Dominant market share (management-reported) in the hospital's primary service area of Columbiana County (80% in FY 2008), although more recent market share data is not available and Moody's expects some erosion of market share due to the significant volume losses in FY 2009 and 2010 OUTLOOK The negative outlook reflects Moody's belief that financial performance and volumes will continue to remain weak in FY 2012 if management's strategies to recruit physicians and grow revenues are unsuccessful, as well as the possibility that cash balances may decline further following two years of negative cash flow from operations. WHAT COULD MAKE THE RATING GO UP Material improvement in operating performance including better than break-even operating margins, significant improvement in volume trends and material growth in revenue base, and much improved debt service coverage measures; a rating upgrade in the next 12 to 18 months is unlikely. WHAT COULD MAKE THE RATING GO DOWN Continuation of FY 2011 levels of operating performance during FY 2012, further volume declines, reduction in cash balances, increase in debt. The principal methodology used in this rating was Not-for-Profit Hospitals and Health Systems published in January 2008. LORAUX ENTERPRISES: Case Summary & 8 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Loraux Enterprises, LLC c/o Greta Loraux, Manager 1050 Brightwood St. Monterey Park, CA 91754 Bankruptcy Case No.: 11-26337 Chapter 11 Petition Date: October 17, 2011 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: James W. Kwon, Esq. JAMES KWON, LLC 8925 W. Pos Rd, #120 Las Vegas, NV 89148 Tel: (702) 515-1200 Fax: (702) 515-1201 E-mail: jkwon@jwklawfirm.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 eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb11-26337.pdf The petition was signed by Greta Loraux, manager. LOS ANGELES DODGERS: Judge OKs Protective Discovery Bid ------------------------------------------------------- Erin Coe at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Kevin Gross signed off Wednesday on a bid by the Los Angeles Dodgers and other parties for a protective order in the case after they asserted that discovery would likely include sensitive confidential information related to a broadcasting contract. Judge Gross approved the protective order stipulation proposed by the baseball team, Major League Baseball, the unsecured creditors committee and a Fox Sports Net Inc. unit, finding that good and adequate cause existed, according to Law360. About Los Angeles Dodgers Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a professional Major League Baseball club in the Los Angeles metropolitan area. Frank McCourt, a Boston real-estate developer who unsuccessfully bid for the Boston Red Sox, bought the Dodgers from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for $330 million. Mr. McCourt also bought the Dodgers Stadium from Fox for $100 million. Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB Commissioner Bud Selig rejected a television deal with News Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for June 30 and July 1. Fox Sports has exclusive cable television rights for Dodgers games until the end of 2013 baseball season. Chapter 11 filings were also made for LA Real Estate LLC, an affiliated entity which owns Dodger Stadium, and three other related holding companies. The petition estimates assets of up to $500 million and debts of up to $1 billion. In its schedules, the LA Dodgers baseball club disclosed $77,963,734 in assets and $4,695,702 in liabilities. LA Real Estate LLC disclosed $161,761,883 in assets and $0 in liabilities. 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. Public relations specialist Kekst and Company has been hired for crisis support. Covington & Burling LLP serves as special counsel. An official committee of unsecured creditors has been appointed in the case. The panel has tapped Lazard Freres & Co. as financial adviser and investment banker, and Morrison & Foerster LLP and Pinckney, Harris & Weidinger, LLC as counsel. Ticket holders are seeking the appointment of their own committee. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection, according to The Wall Street Journal. The reorganization is being financed with a $150 million unsecured loan from the Commissioner of Major League Baseball. The loan gives the Commissioner few of the controls lenders often demanded from bankrupt companies. LYONDELL CHEMICAL: Blavatnik Balks at Trustee's $300MM Claim ------------------------------------------------------------ Hilary Russ at Bankruptcy Law360 reports that private equity mogul Leonard Blavatnik struck back Tuesday against a lawsuit by the Lyondell Chemical Co. trustee, saying the judge shouldn't force him and his company to fork over $300 million that Lyondell paid on a line of credit it received after its ill-fated leveraged buyout. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. Luxembourg-based Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. Len Blavatnik's Access Industries owned the Company prior to its bankruptcy filing. On Jan. 6, 2009, LyondellBasell Industries' U.S. operations, led by Lyondell Chemical Co., and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities filed for Chapter 11. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 protection on April 24, 2009. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, served as the Debtors' bankruptcy counsel. Evercore Partners served as financial advisors, and Alix Partners and its subsidiary AP Services LLC, served as restructuring advisors. AlixPartners' Kevin M. McShea acted as the Debtors' Chief Restructuring Officer. Clifford Chance LLP served as restructuring advisors to the European entities. LyondellBasell emerged from Chapter 11 bankruptcy protection in May 2010, with a plan that provides the Company with US$3 billion of opening liquidity. A new parent company, LyondellBasell Industries N.V., incorporated in the Netherlands, is the successor of the former parent company, LyondellBasell Industries AF S.C.A., a Luxembourg company that is no longer part of LyondellBasell. LyondellBasell Industries N.V. owns and operates substantially the same businesses as the previous parent company, including subsidiaries that were not involved in the bankruptcy cases. LyondellBasell's corporate seat is Rotterdam, Netherlands, with administrative offices in Houston and Rotterdam. M WAIKIKI: Hearing on Bickel & Brewer Hiring Continued to Nov. 2 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Hawaii has continued until Nov. 2, 2011, at 10:00 a.m., the hearing to approve M Waikiki LLC's request to employ Bickel & Brewer as special litigation counsel to represent the Debtor in the Marriott Litigation pending in the Supreme Court of the State of New York, County of New York. As reported in the Troubled Company Reporter on Sept. 29, 2011, prepetition, the firm has represented the Debtor in the New York Litigation and the firm has obtained substantial amount of knowledge about the Debtor and its disputes with Marriott and other defendants in the New York Litigation. Bickel & Brewer will charge its legal services at 50% of its ordinary and customary hourly rates in effect on the date services are rendered, and in consideration for its reduced fess, Bickel & Brewer will have a 20% contingent interest in the net proceeds, if any, in the Marriott Litigation. Bickel & Brewer's personnel having primary responsibility in the Debtor's case and their hourly rates are: William A. Brewer III, partner $1,250 James S. Renard, partner $875 Michael S. Gardner, partner $725 Alexander D. Widell, partner $700 Anand Sambhwani, associate $425 David E. mattiesen, director of consulting $625 (in-house business consultant) On Aug. 31, 2011, Davidson Family Trust, a member of the Debtor and the junior lender to Debtor paid Bickel & Brewer $345,000 for services rendered prepetition. Mr. Collins assured the Court that Bickel & Brewer is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Court also ordered that Bickel & Brewer will have until Oct. 26, to file a response to the objections. About M Waikiki M Waikiki owns the Modern Honolulu, a world-class, luxury hotel property located close to Waikiki Beach in Hawaii. The hotel is being managed by Modern Management Services LLC, an affiliate of Aqua Hotels and Resorts. M Waikiki is a Hawaii limited liability company with its principal place of business located in San Diego, California. It is a special purpose entity, having roughly 75 indirect investors, which was formed to acquire the Hotel. The Company filed for Chapter 11 protection (Bankr. D. Hawaii Case No. 11-02371) on Aug. 31, 2011. Judge Robert J. Faris presides over the case. Patrick J. Neligan, Esq., at Neligan Foley LLP, and Simon Klevansky, Esq., at Klevansky Piper, LLP, represent the Debtor. The Debtor estimated $100 million to $500 million in both assets and debts. Modern Management is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC. Marriott Hotel Services, which used to provide management services, is represented by Susan Tius, Esq., at Rush Moore LLP LLP, and Carren B. Shulman, Esq., at Sheppard Mullin Richter & Hampton LLP. MACCO PROPERTIES: Ch. 11 Trustee Gets Interim Approval for Loan --------------------------------------------------------------- The Hon. Niles Jackson of the U.S. Bankruptcy Court for the Western District of Oklahoma authorized, on an interim basis, Michael E. Deeba, Chapter 11 trustee of the bankruptcy estate of Macco Properties, Inc., to engage in postpetition borrowing or transactions outside the ordinary course of business. As reported in the Troubled Company Reporter on Oct. 4, 2011, Macco is indebted to Quail Creek under the terms of four Commercial Loan Guaranty Agreements by which Macco unconditionally guaranteed to Quail Creek all obligations of four limited liability companies of which Macco is 100% owner and manager: (a) JU Madison Park Apartments, LLC; (b) LP Parkwood Village Apartments, LLC; (c) LP Southeast Village Apartments, LLC; and (d) LP Chalet Apartments, LLC. Pursuant to the Oklahoma Limited Liability Company Act, Macco's membership interest in the four LLCs constitutes the personal property of the member. Upon Macco's bankruptcy filing, it effectively transferred its membership interest to the bankruptcy estate, Mr. Deeba says. He explains that because there are no other members of the LLCs, the entire membership interests passed to the bankruptcy estate, and he has become a substituted member. The Chapter 11 Trustee said that interest payments on the loans with all four LLCs have been brought current with the exception of Parkwood Village, but he intended to pay its balance. He also disclosed that he has been in negotiation with Quail Creek, which has agreed that if the interest payments are brought current, it will agree to the execution of Forbearance Agreements under which he will commence making regularly scheduled monthly principal and interest payments for both Parkwood Village and Madison Park in October 2011. The Treasurer of Sedgwick County, Kansas, has brought an action against Parkwood Village to foreclose a tax lien for unpaid ad valorem taxes for the years 2006 through 2010 in the aggregate amount of $256,948. The foreclosure sale for the tax liens is presently set for October 17, 2011. In consideration of the Chapter 11 Trustee entering into the Forbearance Agreement, Quail Creek has agreed to pay the $256,948 in past due property taxes so as to permit redemption of the Parkwood Village property from the impending tax lien foreclosure sale. The equity, which Macco has in Parkwood Village, is an asset of the bankruptcy estate which it is incumbent upon him to protect, Mr. Deeba asserts. Quail Creek has agreed to enter the Forbearance Agreements and the pending related loan documents to be executed in conjunction therewith conditioned upon the Court authorizing and approving the Forbearance Agreements and associated loan documents. The terms of the Forbearance Agreements and the associated loan documents generally provide for these: -- Quail Creek Bank would pay the past due property taxes on Parkwood Village, in the amount of $256,948 by advancing that amount on the loan; -- Frontier State Bank would agree to purchase 100% of the loan to Parkwood Village; -- Frontier State Bank would agree to accept an assignment of the loans to Parkwood Village and Southeast Village; -- Quail Creek Bank would agree to purchase back an amount equal to the Parkwood Village loan in the participation to Madison Park so that each Bank's outstanding loan balance would remain unchanged; -- Quail Creek Bank would request the Chapter 11 Trustee to seek approval from the Court to operate Parkwood Village and Southeast Village as a single complex making the cash flow from both complexes available to service the respective loans; -- Quail Creek Bank and the Chapter 11 Trustee would enter into a Forbearance Agreement for Parkwood Village to require monthly payments of $22,682 based upon a new 20-year amortization. This is based upon a principal balance of $2,881,236, property taxes of $256,948, and additional interest and penalty of $12,764, for an estimated principal amount of $3,150,000; -- Quail Creek Bank and the Chapter 11 Trustee would enter into a Forbearance Agreement for Southeast Village for a new estimated amount of $1,360,000 (principal and interest) requiring a monthly payment of $9,750 on a new 20-year amortization; and -- The Chapter 11 Trustee would execute second mortgages on Parkwood Village and the Southeast Village to cross-collateralize the two loans. The Chapter 11 trustee believed that the Debtor's estate will suffer immediate and irreparable harm if he is not authorized to enter into the proposed postpetition borrowing Forbearance Agreements with Quail Creek as proposed herein pending a final hearing. He contended that in the event that the proposed Forbearance Agreements with Quail Creek are not approved, his ability to successfully reorganize the estate will be jeopardized. The trustee set a Nov. 7 hearing, at 10:00 a.m. for the approval of his request for further access to the loan. The trustee is represented by: James H. Bellingham, Esq. Janice D. Loyd, Esq. BELLINGHAM & LOYD, P.C. 620 North Robinson, Suite 207 Oklahoma City, OK 73102 Tel: (405) 235-9371 Fax: (405)232-1003 E-mails: jdltrustee@bellinghamloyd.com jbellingham@bellinghamloyd.com Quail Creek Bank is represented by: Bart A. Boren, Esq. WILLIAMS, BOREN & ASSOCIATES, P.C. 401 N. Hudson, Suite 200 Oklahoma City, OK 73102 Tel: (405)232-5220 Fax: (405)232-1963 E-mail: bboren1@cox.net About Macco Properties Oklahoma City, Oklahoma-based Macco Properties, Inc., is a property management company that is the sole or controlling member and/or manager of numerous multi-family residential rental units in Oklahoma City, Oklahoma, Wichita, Kansas, and Dallas, Texas, and several and commercial business properties in Oklahoma City, Oklahoma, and Holbrook, Arizona. The Company filed for Chapter 11 bankruptcy protection (Bankr. W.D. Okla. Case No. 10-16682) on Nov. 2, 2010. G. Rudy Hiersche, Jr., Esq., at the Hiersche Law Firm, serves as the Debtor's bankruptcy counsel. The Debtor disclosed $50,823,581 in total assets, and $4,323,034 in total liabilities. The Official Unsecured Creditors' Committee is represented by Ruston C. Welch, at Welch Law Firm, P.C., in Oklahoma City, Oklahoma. MACROSOLVE INC: Settles Infringement Suits with 37 Companies ------------------------------------------------------------ MacroSolve, Inc., issued a letter to its shareholders. The letter provides further details on these business catalysts: * MacroSolve has already reached settlement agreements with several of the 37 companies against which it has filed patent infringement suits. * Licensing discussions are underway with the remaining majority of these companies. * The most recent lawsuits filed are against companies including AT&T, Citigroup, Dell, Groupon, and Living Social. * MacroSolve has filed one additional patent application in the third quarter and plans to pursue further filings in the future. * Distribution and partnership agreements have been established with some of the largest names in advertising and branding including Donald Trump Jr. and The Richards Group/ * The Company has added management depth and talent including Steve Signoff as CEO and Howard Janzen as Chairman of the Board. Shareholders and prospective investors may view the letter in full at http://www.macrosolve.com/about/investors/ About MacroSolve, Inc. Tulsa, Okla.-based MacroSolve, Inc. (OTC BB: MCVE) -- http://www.macrosolve.com/-- is a technology and services company that develops mobile solutions for businesses and government. A mobile solution is typically the combination of mobile handheld devices, wireless connectivity, and software that streamlines business operations resulting in improved efficiencies and cost savings. The Company's balance sheet at June 30, 2011, showed $1.86 million in total assets, $2.48 million in total liabilities, and a $612,657 total stockholders' deficit. As reported in the Troubled Company Reporter on April 7, 2010, Hood Sutton Robinson & Freeman CPAs, P.C., expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted of the Company's recurring losses from operations and net capital deficiency. MAQ MANAGEMENT: Files Plan, Promises to Pay Unsecureds in 5 Years ----------------------------------------------------------------- On Oct. 13, 2011, MOA Management, Inc., Super Stop Petroleum, Inc., Super Stop Petroleum, I, Inc., and Super Stop Petroleum IV, Inc., filed their Consolidated Chapter 11 Plan of Reorganization (Doc. No. 205), with the U.S. Bankruptcy Court for the Southern District of Florida, in compliance with the Court Order. The Plan designates 16 Classes of Claims and Interests: Class 1 ? Priority Claims Class 2 ? County Tax Collectors Class 3 ? Branch Banking and Trust Company Class 4 ? Giant Oil, Inc. Class 5 ? Fifth Third Bank Class 6 - 1st National Bank of South Florida Class 7 ? First State Bank of Arcadia Class 8 ? Wauchula State Bank Class 9 ? Iberia Bank Class 10 ? Premier American Bank, N.A. Class 11 ? Capital Bank, N.A. (f/k/a NAFH National Bank) Class 12 ? [INTENTIONALLY OMMITTEE] Class 13 ? General Unsecured Claims (of the Class 3?12 Claimants) Class 14 ? Unsecured Deficiency Claims Class 15 ? Related Party Unsecured Claims Class 16 ? Equity Interests of the Debtors Holders of allowed Class 1 Priority Claims will be paid in full within 30 days of the Effective Date of the Plan. Secured creditors (Classes 3 through 12) will be paid from cash flow generated from future operations and future income of the Debtors. The precise treatment of the claims of secured creditors in Classes 3 through 12 are found in pages 7 to 15 of the plan. Upon default of the Plan provisions which is not cured by the Debtors within 60 days of such default with respect to Classed 3 through 12, the Debtors consent to entry of a foreclosure judgment with respect to the collateral securing the defaulted Claim. The Allowed Class 13 General Unsecured Creditors claims will be paid the entire amount of their allowed claims in 20 equal quarterly installments beginning on the later of 90 days following (x) the Effective Date or (y) the claims objection deadline, except that those allowed Class 13 Claims totaling $1,000 or less will not be paid in installments but will receive their entire pro rata distribution in one lump sum within 365 days of the Effective Date. The Allowed Class 15 Unsecured Claims of affiliates, insiders and related parties of the Debtors will be subordinated to all allowed claims to be distributed by the Estates on a pro rata basis in 20 equal quarterly installments beginning on the later of 90 days following (x) the Effective Date or (y) the claims objection deadline. MAQ, SSP I, and SSP IV will merge with and into SSP, with SSP being the surviving entity. SSP's existing equity will be canceled. Muhammad A. Quareshi, or his assignee, will deposit $100,000 into SSP's account on or before the Effective Date, and 100% of the authorized capital stock of SSP will be issued to Mr. Qureshi or his assignee. A copy of the Consolidated Plan is available at: http://bankrupt.com/misc/maq.consoldatedplan.dkt205.pdf About MAQ Management Based in Boca Raton, Florida, MAQ Management, Inc., and three other affiliates serve as commercial landlords to convenience stores and gas stations in primarily in South Florida. They filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Cases No. 11-26571 to 11-26574) on June 15, 2011. Affiliates that sought Chapter 11 protection are Super Stop Petroleum, Inc., Super Stop Petroleum I, Inc., and Super Stop Petroleum IV, Inc. Judge Erik P. Kimball presides over the case. MAQ Management estimated assets and debts of $1 million to $10 million. Super Stop estimated assets and debts of $10 million to $50 million. The petitions were signed by Mahammad A. Qureshi, CEO. Richard J. McIntyre, Esq., and Chirstopher C. Todd, Esq., at McIntyre, Panzarella, Thanasides, Hoffman, Bringgold & Todd, P.L., in Tampa, Florida, serve the Debtors as substitute counsel. The U.S. Trustee announced that until further notice, it will not appoint a committee of creditors for the Debtors' cases. stores and gas stations in primarily in South Florida. They filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Cases No. 11-26571 to 11-26574) on June 15, 2011. Affiliates that sought Chapter 11 protection are Super Stop Petroleum, Inc., Super Stop Petroleum I, Inc., and Super Stop Petroleum IV, Inc. Judge Erik P. Kimball presides over the case. Lawyers at Talarchyk Merrill, LLC, serve as the Debtors' counsel. MAQ Management estimated assets and debts of $1 million to $10 million. Super Stop estimated assets and debts of $10 million to $50 million. The petitions were signed by Mahammad A. Qureshi, CEO. The U.S. Trustee announced that until further notice, it will not appoint a committee of creditors for the Debtors' cases. MAQ MANAGEMENT: Wants Until Nov. 14 to File Disclosure Statement ---------------------------------------------------------------- MOA Management, Inc., Super Stop Petroleum, Inc., Super Stop Petroleum, I, Inc., and Super Stop Petroleum IV, Inc., ask the U.S. Bankruptcy Court for the Southern District of Florida to enter an order granting the Debtors an additional 30 days to file their disclosure statement to and including Nov. 14, 2011. On Oct. 13, 2011, the Debtors filed their Consolidated Chapter 11 Plan of Reorganization, in compliance with the Court Order. The Debtors request the extension due to unforeseen circumstances and delays, related to negotiations and time restraints. About MAQ Management Based in Boca Raton, Florida, MAQ Management, Inc., and three other affiliates serve as commercial landlords to convenience stores and gas stations in primarily in South Florida. They filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Cases No. 11-26571 to 11-26574) on June 15, 2011. Affiliates that sought Chapter 11 protection are Super Stop Petroleum, Inc., Super Stop Petroleum I, Inc., and Super Stop Petroleum IV, Inc. Judge Erik P. Kimball presides over the case. MAQ Management estimated assets and debts of $1 million to $10 million. Super Stop estimated assets and debts of $10 million to $50 million. The petitions were signed by Mahammad A. Qureshi, CEO. Richard J. McIntyre, Esq., and Chirstopher C. Todd, Esq., at McIntyre, Panzarella, Thanasides, Hoffman, Bringgold & Todd, P.L., in Tampa, Florida, serve the Debtors as substitute counsel. The U.S. Trustee announced that until further notice, it will not appoint a committee of creditors for the Debtors' cases. stores and gas stations in primarily in South Florida. They filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Cases No. 11-26571 to 11-26574) on June 15, 2011. Affiliates that sought Chapter 11 protection are Super Stop Petroleum, Inc., Super Stop Petroleum I, Inc., and Super Stop Petroleum IV, Inc. Judge Erik P. Kimball presides over the case. Lawyers at Talarchyk Merrill, LLC, serve as the Debtors' counsel. MAQ Management estimated assets and debts of $1 million to $10 million. Super Stop estimated assets and debts of $10 million to $50 million. The petitions were signed by Mahammad A. Qureshi, CEO. The U.S. Trustee announced that until further notice, it will not appoint a committee of creditors for the Debtors' cases. MARCO POLO: Gets Final OK to Pay $2MM Critical Vendors' Claims -------------------------------------------------------------- The Hon. James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York authorized, on a final basis, Marco Polo Seatrade B.V., et al., to pay or honor prepetition obligations to foreign vendors, service providers and governments and certain critical vendors. The Debtors are authorized to, among other things: -- pay all or part of the prepetition claims of critical vendors, in an aggregate amount not to exceed, $2 million; -- make full or partial payment to a critical vendor from the final critical vendor fund only to the extent (i) that the Debtors deem, in the exercise of their business judgment that such payment is necessary to ensure that the particular critical vendor will provide necessary goods and services to the Debtors on a postpetition basis; and (ii) the obligation to the critical vendor is due and payable by the Debtors at the time of payment; and -- issue postpetition checks and make postpetition fund transfer requests to replace any prepetition checks and prepetition transfers to critical vendors that may be dishonored by any bank. About Marco Polo Marco Polo Seatrade B.V. operates an international commercial vessel management company that specializes in providing commercial and technical vessel management services to third parties. Founded in 2005, the Company mainly operates under the name of Seaarland Shipping Management and maintains corporate Headquarters in Amsterdam, the Netherlands. The primary assets consist of six tankers that are regularly employed in international trade, and call upon ports worldwide. Marco Polo and three affiliated entities filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29, 2011. The other affiliates are Seaarland Shipping Management B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V. Marco Polo is the sole owner of Seaarland, which in turn is the sole owner of Cargoship, and also holds a 5% stake in Magellano. The remaining 95% stake in Magellano is owned by Amsterdam-based Poule B.V., while another Amsterdam company, Falm International Holding B.V. is the sole owner of Marco Polo. Falm and Poule didn't file bankruptcy petitions. The filings were prompted after lender Credit Agricole Corporate & Investment Bank seized one ship on July 21, 2011, and was on the cusp of seizing two more on July 29. The arrest of the vessel was authorized by the U.K. Admiralty Court. Credit Agricole also attached a bank account with almost US$1.8 million on July 29. The Chapter 11 filing precluded the seizure of the two other vessels. Evan D. Flaschen, Esq., Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at Bracewell & Giuliani LLP, serve as bankruptcy counsel. The cases are before Judge James M. Peck. The petition said assets and debt are both more than US$100 million and less than US$500 million. MARY A II: U.S. Trustee Appoints 6-Member Creditors' Panel ---------------------------------------------------------- Donald F. Walton, the United States Trustee for Region 21, pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed six unsecured creditors to serve on the Official Committee of Unsecured Creditors of The Mary A II, LLC. The Creditors Committee members are: 1. Chad Hurst 1770 Oregon Pike Lancaster, PA 17601 Tel: (717) 371-6168 Fax: (717) 560-9791 2. Keith Snyder 3738 Daryl Drive Landisville, PA 17538 Tel: (717) 898-2835 3. R. Eugene Risser 42 Windcrest Dr. Lititz, PA 17532 Tel: (717) 626-5968 4. Linda Price 1045 Lexington Drive Moody, AL 35004 Tel: (205) 837-1548 5. John Reiley 312 Center Ave Schuylkill Haven, PA 17972 Tel: (570) 385-2624 6. Bhajneet Singh Malik 1922 E. 7th Place Los Angeles, CA 90021 Tel: (213) 624-2292 About Mary A II Tallahassee, Florida-based The Mary A II LLC is the owner of real property located in Brevard County, Florida, which was originally acquired in 2004 and was placed in a conservation easement. Ultimately, the Property became a wetlands mitigation bank, which sells credits to developers or other entities that need to impact wetlands. The Company holds the right to sell approximately 937.69 mitigation credits approved and permitted by the St. Johns River Water Management District and 847.92 mitigation credits approved and permitted by the U.S. Army Corps of Engineers. The Company said it is in negotiations for the sale of certain credits that could realize in excess of $5 million. Mary A II filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 11-40693) on Aug. 29, 2011. Brian G. Rich, Esq., at Berger Singerman PA, serves as the Debtor's bankruptcy counsel. The Debtor scheduled $26,083,816 in assets and $7,380,600 in debts. The petition was signed by James M. Rudnick, managing member. MERCED FALLS: Cappello and Noel Approved as Special Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of California authorized Merced Falls Ranch, LLC to employ Cappello and Noel LLP as special litigation counsel. As reported in the Troubled Company Reporter on Sept. 26, 2011, the Debtor is involved in contentious litigation involving three ranches it owns. The Debtor has sued American AgCredit in Superior Court, County of Merced seeking damages of $100,000,000+ for lender liability damages. The lawsuit is at a very early stage. The loan involved in the litigation is about $11,000,000. Prepetition, Cappello and Noel represented the Debtor in the litigation. The primary attorneys to represent the Debtor in the litigation and their hourly rates are: A. Barry Cappello, Esq. $750 Leila J. Noel, Esq. $550 Troy A. Thielemann, Esq. $425 Cappello & Noel received a series of prepetition retainers from the Debtor totaling $60,000 for services provided to the Debtor in connection with the litigation. As of the Petition Date, $8,820 remained of the retainer in a segregated trust account. To the best of the Debtor's knowledge, Cappello & Noel is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. According to the civil minutes, the Court also approved the modified fee application procedures, including a partial contingency fee arrangement. About Merced Falls Ranch LLC Merced Falls Ranch LLC filed a Chapter 11 petition (Bankr. E.D. Calif. Case No. 11-19212) on Aug. 16, 2011, in Fresno, California. The Debtor disclosed assets of $100 million to $500 million and debts of $10 million to $50 million. Judge W. Richard Lee presides over the case. Walter & Wilhelm Law Group serves as the Debtor's bankruptcy counsel. The petition was signed by Stephen W. Sloan, the Debtor's member. MOMENTIVE PERFORMANCE: Expects to Record $653-Mil. in Q3 Sales -------------------------------------------------------------- Momentive Performance Materials Inc. announced preliminary results for the third quarter ended Sept. 30, 2011. Momentive Performance Materials expects to record sales of approximately $653 million, operating income of $23 million to $33 million and Combined Adjusted EBITDA, excluding the impact of pro forma cost savings, of $93 million to $99 million in the third quarter of 2011. The Company recorded sales of $662 million, operating income of $68 million and Combined Adjusted EBITDA, excluding the impact of pro forma cost savings, of $125 million in the third quarter of 2010. Third quarter 2011 Combined Combined Adjusted EBITDA includes the results of the Company's Unrestricted Subsidiaries, which are disregarded for purposes of calculating Adjusted EBITDA under the Company's debt documents. EBITDA from the Company's Unrestricted Subsidiaries totaled $4 million and $6 million in the three-month period ended Sept. 30, 2011, and Sept. 26, 2010, respectively. Momentive Performance Materials expects to be in compliance with all of the terms of its outstanding indebtedness, including the financial covenants, at the end of third quarter of 2011. The Company estimates that its debt was approximately $2.998 billion at Sept. 30, 2011, down slightly from $3.046 billion at July 3, 2011. Momentive Performance Materials also estimates that it had liquidity of approximately $500 million as of Sept. 30, 2011, which is comprised of cash plus available borrowings under its credit facilities. "Third quarter 2011 proved challenging due to the global economic weakening, which primarily impacted our European and Asia Pacific operations," said Craig O. Morrison, Chairman, President and CEO. "We experienced a significant downturn in select end markets in China caused by credit tightening, which negatively impacted our silicones business. However, our global Quartz business continued to perform well in the third quarter of 2011 versus the prior year due to more stable demand in the semiconductor and ceramics application markets. In response to the current economic volatility, we are reviewing our plans to aggressively accelerate savings from the shared services agreement with Momentive Specialty Chemicals Inc. in order to capture these cost savings as quickly as possible, while also launching additional cost reviews across all aspects of the business. We believe our business is well-positioned over the long-term." Momentive Performance Materials will file a more detailed press release regarding its third quarter 2011 results on Form 8-K, and will file its Form 10-Q for the period ended Sept. 30, 2011, in early November, with an accompanying investor conference call to follow shortly thereafter. A full-text copy of the press release is available for free at: http://is.gd/AzTzWL About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. The Company reported a net loss of $62.96 million on $2.58 billion of net sales for the year ended Dec. 31, 2010, compared with a net loss of $41.67 million on $2.08 billion of net sales during the prior year. The Company's balance sheet at July 3, 2011, showed $3.45 billion in total assets, $4.07 billion in total liabilities and a $624 million total deficit. * * * Momentive carries a 'B3' corporate family and probability of default ratings from Moody's Investors Service. It has 'B-' issuer credit ratings from Standard & Poor's Ratings Services. As reported by the Troubled Company Reporter on Oct. 27, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Momentive Performance Materials Inc. to 'B-' from 'CCC+'. In addition, S&P raised its second lien, senior unsecured, and subordinated debt ratings by one notch to 'CCC' (two notches below the corporate credit rating) from 'CCC-'. The recovery ratings on these classes of debt remain unchanged at '6', indicating S&P's expectation of negligible (0%-10%) recovery in the event of a payment default. At the same time, based on the corporate credit rating upgrade and its updated recovery analysis, S&P raised its senior secured debt rating by two notches to 'B' (one notch above the corporate credit rating) from 'CCC+' and revised the recovery rating to '2' from '3'. These ratings indicate S&P's expectation for substantial (70%-90%) recovery in the event of a payment default. MOMENTIVE SPECIALTY: Expects to Report $1.2 Billion Sales for Q3 ---------------------------------------------------------------- Momentive Specialty Chemicals Inc., formerly known as Hexion Specialty Chemicals, Inc., announced preliminary results for the third quarter ended Sept. 30, 2011. Momentive Specialty Chemicals expects to record sales of approximately $1.2 billion, operating income of $93 million to $104 million and Segment EBITDA of $156 million to $166 million in the third quarter of 2011. The Company recorded revenues of $1.2 billion, operating income of $188 million and Segment EBITDA of $193 million in the third quarter of 2010. Momentive Specialty Chemicals expects to be in compliance with all of the terms of its outstanding indebtedness, including the financial covenants, at the end of third quarter of 2011. The Company estimates that its net unaffiliated debt was approximately $3.35 billion at the end of the quarter ended Sept. 30, 2011, up slightly from $3.34 billion at June 30, 2011. Momentive Specialty Chemicals also estimates that it had liquidity of approximately $520 million as of Sept. 30, 2011, which is comprised of cash plus available borrowings under its credit facilities and an equity commitment from certain affiliates of Apollo Management, L.P. "Due to the recent economic uncertainty, we have seen some caution among our customers negatively impacting our third quarter 2011 results," said Craig O. Morrison, Chairman, President and CEO. "However, certain product lines, such as our oilfield proppants and North American formaldehyde businesses continued to perform well versus the prior year, which was offset by headwinds in our specialty epoxy business from tightness in Chinese credit markets and the reduction of Chinese government subsidies. We believe the quarter was impacted by both a softening economy as well as a draw down of inventories across a number of key segments." "In response to the current economic volatility, we are reviewing our plans to aggressively accelerate savings from the shared services agreement with Momentive Performance Materials Inc. in order to capture these cost savings as quickly as possible, while also launching additional cost reviews across all aspects of the business. We believe our business is well-positioned over the long-term." Momentive Specialty Chemicals will file a more detailed press release regarding its third quarter 2011 results on Form 8-K, and will file its Form 10-Q for the period ended Sept. 30, 2011, in early November, with an accompanying investor conference call to follow shortly thereafter. About Momentive Specialty Momentive Specialty Chemicals, Inc., headquartered in Columbus, Ohio, is a leading producer of thermoset resins (epoxy, formaldehyde and acrylic). The company is also a supplier of specialty resins for inks and specialty coatings sold to a diverse customer base as well as a producer of commodities such as formaldehyde, bisphenol A, epichlorohydrin, versatic acid and related derivatives. The Company's balance sheet at June 30, 2011, showed $3.36 billion in total assets, $5.20 billion in total liabilities and a $1.84 billion total deficit. * * * Momentive Specialty carries a 'B-' issuer credit rating from Standard & Poor's Ratings Services. It has 'B3' corporate family and probability of default ratings from Moody's Investors Service. corporate credit rating from Standard & Poor's. As reported in the Oct. 27, 2010 edition of TCR, Moody's Investors Service assigned a 'Caa1' rating to the guaranteed senior secured second lien notes due 2020 of Momentive Specialty (formerly known as Hexion Specialty Chemicals Inc.). Proceeds from the notes were allocated for the repayment of $533 million of guaranteed senior secured second lien notes due 2014. "With this refinancing Hexion will have refinanced or extended the maturities on the vast majority of the debt that was originally slated to mature prior to 2015. There is less than $600 million of this debt remaining, which should be much easier to for the company to refinance as its credit metrics improve further," stated John Rogers, Senior Vice President at Moody's. MONARCH FLIGHT: Amegy Loses Bid for Preliminary Injunction ---------------------------------------------------------- Amegy Bank National Association, v. Monarch Flight II, LLC, et al., Civil Action No. 4:11-CV-3218 (S.D. Tex.), arises out of a $15 million loan made by Amegy. The bank sued Monarch Flight II, the borrower, and William B. Johnson, the guarantor, after Monarch defaulted. Amegy also sued John T. Bobo, an attorney who represented Monarch and Mr. Johnson in connection with the Amegy loan; Mr. Bobo's law firm, Bobo, Hunt, White & Nance; Host Hotels & Resorts L.P., an entity in which Mr. Johnson owned partnership units that were pledged as collateral for the loan; and Host Hotels & Resorts, Inc., a corporation whose shares Mr. Johnson would receive if he chose to redeem his partnership units in Host Hotels & Resorts L.P. Amegy alleges the right to recover the outstanding principal and interest, as well as attorneys' fees. Amegy has applied for a preliminary injunction, seeking to freeze assets owned by Mr. Johnson to ensure that sufficient assets will be available to satisfy a judgment. In an Oct. 18, 2011 Memorandum and Order, available at http://is.gd/988XLXfrom Leagle.com, District Judge Lee H. Rosenthal denied the motion for a preliminary injunction. "Amegy is understandably concerned about recovering the outstanding principal and interest due under the promissory note. Johnson has sold assets worth approximately $9.5 million he represented were pledged as security for the Amegy loan. But a preliminary injunction freezing Johnson's assets is an extraordinary remedy available only if Amegy proves that irreparable harm is not merely possible, but likely, in the absence of an injunction. The current record reveals that Johnson owns substantial assets sufficient to satisfy a final judgment for Amegy. Amegy has not shown a reasonable likelihood that, at the time final judgment is entered, Johnson's equity in his assets will be less than the amount Amegy seeks to recover under the promissory note," the District Judge explained. About Monarch Flight II Atlanta, Georgia-based Monarch Flight II LLC filed a bare-bones Chapter 11 petition (Bankr. D. Del. Case No. 11-12795) to prevent the Sept. 7, 2011 foreclosure of the Gulfstream GIII private jet the company owns. The petition was filed Sept. 2. Monarch Flight is a company owned by Atlanta businessman William B. Johnson. Amegy Bank NA sued Mr. Johnson and the aircraft owner, Monarch Flight II LLC, on Aug. 30, 2011, in U.S. District Court in Houston seeking judgment for $15 million on the loan used in part to purchase the jet. Judge Peter J. Walsh presides over the bankruptcy case. Matthew B. McGuire, Esq. -- mcguire@lrclaw.com -- at Landis Rath & Cobb LLP, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and $10 million to $50 million in debts. MT. JORDAN: Files Amended Disclosure Statement ---------------------------------------------- Mt. Jordan Limited Partnership filed with the U.S. Bankruptcy Court for the District of Utah on Oct. 7, 2011, an amended disclosure statement with respect to the Debtor's Amended Plan of Reorganization dated Aug. 31, 2011. A copy of the amended disclosure statement, dated as of Oct. 7, 2011, is available for free at: http://bankrupt.com/misc/mtjordan.amendedDS.dkt112.pdf As reported in the TCR on Sept. 26, 2011, the Debtor relates that its primary asset is 298.75 acres of undeveloped land, and related water rights, located in Bluffdale, Utah. The Debtor has held the land for many years, and has been attempting for the last several years to liquidate and divest itself of all or significant portions of the real property for the benefit of its limited partners. One of the ways it attempted to accomplish the divestiture was through a Development and Property Management Agreement the Debtor entered into with Porter's Point, LLC, in November 2002. The Debtor intended that pursuant to the DPMA, Porter's Point would obtain development approvals and subdivide the real property into several large parcels that would then be sold by the Debtor, with the cooperation and assistance of Porter's Point, to third parties. The Debtor sought and obtained rejection of the DPMA when the desired results did not materialize. Porter's Point has filed a general unsecured claim in the Bankruptcy Case asserting claims allegedly in excess of $29 million arising under the DPMA. The Debtor believes that the allowable amount (if any) of the claim of Porter's Point in the Bankruptcy Case is far less that the amount asserted in its proof of claim, but believes that Porter's Point is by far the largest (and appears to be the only) claimant holding a general unsecured claim against the Debtor. According to the Disclosure Statement, the Sale/Option Agreement that is a central feature of the Plan, the Debtor will be able to liquidate all or portions of its real property in a logical and sequential manner that preserves and enhances the value of the real property, pay the Zions Loan in full and retire the Zions Trust Deed within a relatively short time frame, pay all creditors in full, and maximize the value of the Equity Interests for the benefit of its limited partners. Class 1 under the Plan consists of the Zions Claim. Zions Bank will retain its Lien on the Zions Collateral and will release such collateral from the Zions Trust Deed at the Zions Release Price ($90,000 per acre) when and as Zions Bank receives payments on the Zions Claim. The Zions Claim will be paid in full, with interest accruing at 7% per annum after the Effective Date. Zions Bank will receive substantial interim payments on the Zions Claim as and when portions of the First Parcel are sold by 4 Independence, totaling $4,356,000 by no later than 24 months after the Effective Date. Class 2 under the Plan consists of the Porter's Point Claim and any other General Unsecured Claims that may exist. Allowed Claims in Class 2 will be paid in full by the Debtor after (but only after) the Zions Claim has been paid in full, or will be paid as agreed by the Debtor and the holder of any such Claim if such parties agree to a compromise of such Claim that is approved by the Bankruptcy Court on or prior to the Effective Date. The source of funds for the payment of Class 2 Claims will be all unencumbered funds of the Debtor, specifically including the net proceeds of sales of the Debtor's real property pursuant to the Sale/Option Agreement after full payment of the Zions Claim. Class 3 under the Plan consists of the Equity Interests in the Debtor. Each record holder of an Equity Interest will retain its interest in the Debtor, as the Reorganized Debtor, on and after the Effective Date. A full-text copy of the Disclosure Statement, dated as of Aug. 31, 2011, is available for free at: http://bankrupt.com/misc/MTJORDAN_DSwithplan.pdf About Mt. Jordan Mt. Jordan Limited Partnership, in Draper, Utah, filed for Chapter 11 bankruptcy (Bankr. D. Utah Case No. 10-37050) on Dec. 9, 2010, Judge R. Kimball Mosier presiding. Steven C. Strong, Esq. -- scs@pkhlawyers.com -- at Parsons Kinghorn Harris PC, in Salt Lake City, serves as bankruptcy counsel. The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million. MURDER INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Murder Inc., LLC 3801 Las Vegas Blvd. South Las Vegas, NV 89109 Bankruptcy Case No.: 11-26317 Chapter 11 Petition Date: October 17, 2011 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Gabrielle A. Hamm, Esq. Gerald M. Gordon, Esq. GORDON SILVER 3960 Howard Hughes Parkway, 9th Flr Las Vegas, NV 89169-5978 Tel: (702) 796-5555 Fax: (702) 369-2666 E-mail: ghamm@gordonsilver.com bankruptcynotices@gordonsilver.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb11-26317.pdf The petition was signed by Louis Ventre, managing member. NEBRASKA BOOK: Plan Exclusivity Extended Until Jan. 23 ------------------------------------------------------ BankruptcyData.com reports that the U.S. Bankruptcy Court approved Nebraska Book Company's motion to extend the exclusive period during which the Company can file a Chapter 11 plan and solicit acceptances thereof through and including January 23, 2012 and March 23, 2012, respectively. As reported in the Oct. 14, 2011 edition of the Troubled Company Reporter, second-lien lenders are objecting to a four-month extension of the exclusive right to propose a plan. Secured lenders believe that a 60-day extension of exclusivity is sufficient. The papers explain how Nebraska Book has been unable to secure a $250 million loan required for confirming and implementing the Chapter 11 plan largely worked out before the Chapter 11 filing in late June. The plan called for new financing to pay off first- and second- lien debt in full, while giving most of the new equity to subordinated noteholders of the operating company and holders of notes issued by the holding company. About Nebraska Book 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. The Official Committee of Unsecured Creditors selected Lowenstein Sandler LLP and Stevens & Lee, P.C., as lawyers and Mesirow Financial Inc. as financial advisers. Nebraska Book prepared a pre-packaged Chapter 11 plan that would swap some of the existing debt for new debt, cash and the new stock. NEUROLOGIX INC: Authorized Common Shares Hiked to 750 Million ------------------------------------------------------------- The holders of a majority of the voting power of the capital stock of Neurologix, Inc., as of Sept. 13, 2011, approved by written consents an amendment to the Company's Restated Certificate of Incorporation to increase the authorized shares of the Company's common stock, par value $0.001 per share from 100,000,000 shares to 750,000,000 shares. The stockholder consents obtained pursuant to the Written Consent were solicited by the Company pursuant to a definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on Sept. 27, 2011, and distributed to the Company's stockholders on or about Sept. 28, 2011. Those results were calculated on an as converted to Common Stock basis in accordance with the voting rights of the Company's stockholders. On the Record Date there were outstanding 56,230,624 shares of Common Stock on an as converted basis. The Charter Amendment became effective upon its filing with the Secretary of State of the State of Delaware on Oct. 14, 2011. 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. The Company's balance sheet at June 30, 2011, showed $4.96 million in total assets, $13.62 million in total liabilities, and a $8.66 million total stockholders' deficit. 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. NEW LEAF: Orrie Tawes Discloses 19.9% Equity Stake -------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Orrie Lee Tawes, III, disclosed that he beneficially owns 30,814,619 shares of common stock of New Leaf Brands, Inc., representing 19.9% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/iG2KG8 About New Leaf Brands Scottsdale, Ariz.-based New Leaf Brands, Inc. develops, markets and distributes healthy and functional ready-to-drink teas under the New Leaf(R) brand. The Company reported a net loss of $9.13 million on $4.25 million of net sales for the year ended Dec. 31, 2010, compared with a net loss of $10.93 million on $3.45 million of net sales for the same period during the prior year. As reported by the TCR on June 2, 2011, Mayer Hoffman McCann P.C., in Phoenix, Arizona, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations, has a working capital deficiency, was not in compliance with certain financial covenants related to debt agreements, and has a significant amount of debt maturing in 2010. Mayer Hoffman issued negative going concern qualifications following the release of the 2009 and 2010 results. NEWPAGE CORP: Hires Dewey & LeBoeuf as Bankruptcy Counsel --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has authorized NewPage Corporation and its debtor affiliates to employ Dewey & LeBoeuf LLP as their attorneys, under a general retainer, nunc pro tunc to the Petition Date. The Debtors will pay D&L according to its customary hourly rates and will reimburse the Firm's necessary expenses. The current hourly rates charged by D&L for professionals and paraprofessionals expected to be employed on this matter are: Billing Category Range ---------------- ----- Partners $700 - $1,000 Counsel $675 Associates $385 - $650 Paraprofessionals $200 - $295 About NewPage Corporation Headquartered in Miamisburg, Ohio, NewPage Corporation is the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended December 31, 2010. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. These papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a total annual production capacity of approximately 4.1 million tons of paper, including approximately 2.9 million tons of coated paper, approximately 1.0 million tons of uncoated paper and approximately 200,000 tons of specialty paper. NewPage Corporation, along with affiliates, filed Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12804) on Sept. 7, 2011. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & Leboeuf LLP, in New York, serve as counsel. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. Attorneys at Young Conaway Stargatt & Taylor, LLP, and Paul, Hastings, Janofsky & Walker LLP, represent the Official Committee of Unsecured Creditors. Bill Rochelle, the bankruptcy columnist for Bloomberg News, said that NewPage Corp. prevailed over most objections from the official creditors' committee and won agreement from the bankruptcy judge on final approval for $600 million in secured financing. Moody's Investors Service assigned a Ba2 rating to the $350 million first-out revolving debtor-in-possession credit facility and a B2 rating to the $250 million second-out debtor-in- possession term loan, collectively, the "DIP facilities", of NewPage Corporation. NEWPAGE CORP: Employs FTI Consulting as Financial Advisors ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has authorized NewPage Corporation and its debtor affiliates to employ FTI Consulting, Inc., as their financial advisors, nunc pro tunc to the Petition Date. FTI will be paid according to its customary hourly rates: Senior Managing Director $780 - $895 Director & Managing Director $560 - $745 Consultant & Senior Consultant $280 - $530 Administrative & Paraprofessionals $115 - $230 FTI's necessary expenses will also be reimbursed. FTI will be employed under a general retainer, which is estimated to total approximately $1,000,000. The retainer will not be segregated by FTI in a separate account and will be held until the end of the cases and applied to FTI's finally approved fees in the proceedings. The parties' engagement agreement also contains certain provisions for indemnification and dispute resolution. About NewPage Corporation Headquartered in Miamisburg, Ohio, NewPage Corporation is the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended December 31, 2010. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. These papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a total annual production capacity of approximately 4.1 million tons of paper, including approximately 2.9 million tons of coated paper, approximately 1.0 million tons of uncoated paper and approximately 200,000 tons of specialty paper. NewPage Corporation, along with affiliates, filed Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12804) on Sept. 7, 2011. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & Leboeuf LLP, in New York, serve as counsel. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. Attorneys at Young Conaway Stargatt & Taylor, LLP, and Paul, Hastings, Janofsky & Walker LLP, represent the Official Committee of Unsecured Creditors. Bill Rochelle, the bankruptcy columnist for Bloomberg News, said that NewPage Corp. prevailed over most objections from the official creditors' committee and won agreement from the bankruptcy judge on final approval for $600 million in secured financing. Moody's Investors Service assigned a Ba2 rating to the $350 million first-out revolving debtor-in-possession credit facility and a B2 rating to the $250 million second-out debtor-in- possession term loan, collectively, the "DIP facilities", of NewPage Corporation. NEWPAGE CORP: Seeks to Employ PwP as Auditor and Accountant ----------------------------------------------------------- Newpage Corporation and its debtor affiliates ask the Court for authority to employ PricewaterhouseCoopers LLP as independent auditor and accountant nunc pro tunc to the Petition Date. PricewaterhouseCoopers will: a. audit the consolidated financial statements of New Page Group Inc. at December 31,2011, and for the year then ending. Upon completion of the audit, PwC will provide an audit report on financial statements; b. audit the consolidated financial statements of NewPage Holding Corporation and New Page at December 31, 2011, and for the year then ending. Upon completion of the audit, PwC will provide an audit report on such financial statements; and c. in connection with the annual financial statement audit of NewPage Holding Corporation and New Page, PwC will perform reviews of the unaudited consolidated financial information for each of the first three quarters in the year ending December 31, 2011, before a Form 10-Q is filed with the Securities and Exchange Commission. The engagement letter provide for a fixed-fee arrangement. The fixed-fee arrangement is based on an estimate of the time required by the individuals assigned to the Debtors' engagement to perform the audit and accounting services. If additional audit procedures are necessary to complete the services and related reports, PwC will provide the Debtors with an estimate of fees based upon the hourly rates of the individuals assigned to the Debtors' engagement, subject to downward adjustment upon review by the Debtors. The hourly rates, subject to periodic adjustments, that will be charged by PwC professionals for incremental services rendered pursuant to the Engagement Letters are: Staff Class Engagement Team Specialists ----------- --------------- ----------- Partner $600 - $700 $720 - $903 Managing Director/ $450 - $580 $580 - $590 Director Senior Manager $375 - $450 $449 - $480 Manager $290 - $375 $449 - $480 Senior Associate $200 - $240 $360 - $371 Associate $120 - $175 $280 - $318 Administrative $100 - $135 $114 Assistant Robert D. Hesselgesser, a member of PwC, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About NewPage Corporation Headquartered in Miamisburg, Ohio, NewPage Corporation is the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended December 31, 2010. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. These papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a total annual production capacity of approximately 4.1 million tons of paper, including approximately 2.9 million tons of coated paper, approximately 1.0 million tons of uncoated paper and approximately 200,000 tons of specialty paper. NewPage Corporation, along with affiliates, filed Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12804) on Sept. 7, 2011. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & Leboeuf LLP, in New York, serve as counsel. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. Attorneys at Young Conaway Stargatt & Taylor, LLP, and Paul, Hastings, Janofsky & Walker LLP, represent the Official Committee of Unsecured Creditors. Bill Rochelle, the bankruptcy columnist for Bloomberg News, said that NewPage Corp. prevailed over most objections from the official creditors' committee and won agreement from the bankruptcy judge on final approval for $600 million in secured financing. Moody's Investors Service assigned a Ba2 rating to the $350 million first-out revolving debtor-in-possession credit facility and a B2 rating to the $250 million second-out debtor-in- possession term loan, collectively, the "DIP facilities", of NewPage Corporation. NEWPAGE CORP: Committee Wants to Retain Paul Hastings as Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Newpage Corp.'s cases asks the bankruptcy court to retain Paul Hastings LLP as counsel effective as of September 21, 2011. As counsel, Paul Hastings will perform these services: a. consult with the Committee, the Debtors, and the Trustee concerning the administration of these chapter 11 cases; b. review, analyze, and respond to pleadings filed with the Court by the Debtors and other parties in interest and to participate at hearings on such pleadings; c. investigate the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' businesses, and any matters relevant to these chapter 11 cases, to the extent required by the Committee; d. take all necessary action to protect the rights and interests of the Committee, including, but not limited to, negotiations and preparation of documents relating to any plan of reorganization and disclosure statement; e. to represent the Committee in connection with the exercise of its powers and duties under the Banlauptcy Code and in connection with these chapter 11 cases; and f. perform all other necessary legal services in connection with these Chapter 11 cases. Compensation will be payable to Paul Hastings on an hourly basis, plus reimbursement of actual, necessary expenses. The attorneys and paralegal presently designated to represent the Committee and their current standard hourly rates are: Luc A. Despins $995 Douglas Koff $930 Robeli E. Winter $845 Aaron Klein $700 Christopher Fong $535 Michelle Yetter $410 Juanita Greenfield $225 Luc A. Despins, Esq., a member of Paul Hastings, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About NewPage Corporation Headquartered in Miamisburg, Ohio, NewPage Corporation is the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended December 31, 2010. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. These papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a total annual production capacity of approximately 4.1 million tons of paper, including approximately 2.9 million tons of coated paper, approximately 1.0 million tons of uncoated paper and approximately 200,000 tons of specialty paper. NewPage Corporation, along with affiliates, filed Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12804) on Sept. 7, 2011. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & Leboeuf LLP, in New York, serve as counsel. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. Attorneys at Young Conaway Stargatt & Taylor, LLP, and Paul, Hastings, Janofsky & Walker LLP, represent the Official Committee of Unsecured Creditors. Bill Rochelle, the bankruptcy columnist for Bloomberg News, said that NewPage Corp. prevailed over most objections from the official creditors' committee and won agreement from the bankruptcy judge on final approval for $600 million in secured financing. Moody's Investors Service assigned a Ba2 rating to the $350 million first-out revolving debtor-in-possession credit facility and a B2 rating to the $250 million second-out debtor-in- possession term loan, collectively, the "DIP facilities", of NewPage Corporation. NEWPAGE CORP: Committee Seeks Young Conaway as Co-Counsel --------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Newpage Corporation and its debtor affiliates ask the court for authority to retain Young Conaway Stargatt & Taylor LLP as co-counsel. In a separate application, the Committee is seeking authority to retain Paul Hastings LLP as main bankruptcy counsel. As co-counsel, Young Conaway will: a. consult with the Committee, the Debtors, and the Trustee concerning the administration of these chapter 11 cases; b. review, analyze and respond to pleadings filed with the Court by the Debtors and to participate at hearings on such pleadings; c. investigate the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' businesses, and any matters relevant to these Chapter 11 cases in the event, and to the extent, required by the Committee; d. take all necessary action to protect the rights and interests of the Committee, including, but not limited to, negotiations and preparation of documents relating to any plan of reorganization and disclosure statement; and e. represent the Committee in connection with the exercise of its powers and duties under the Bankruptcy Code and in connection with the Chapter 11 cases. The attorneys and paralegal presently designated to represent the Committee and their current standard hourly rates are: James L. Patton, Jr. $900 M. Blake Cleary $610 Jaime N. Luton $340 Andrew L. Magaziner $290 Michelle Smith (paralegal) $165 Michelle Smith (paralegal) $165 M. Blake Cleary, Esq., a member of Young Conaway, assures the Court that Young Conaway is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About NewPage Corporation Headquartered in Miamisburg, Ohio, NewPage Corporation is the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended December 31, 2010. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. These papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a total annual production capacity of approximately 4.1 million tons of paper, including approximately 2.9 million tons of coated paper, approximately 1.0 million tons of uncoated paper and approximately 200,000 tons of specialty paper. NewPage Corporation, along with affiliates, filed Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12804) on Sept. 7, 2011. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & Leboeuf LLP, in New York, serve as counsel. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. Attorneys at Young Conaway Stargatt & Taylor, LLP, and Paul, Hastings, Janofsky & Walker LLP, represent the Official Committee of Unsecured Creditors. Bill Rochelle, the bankruptcy columnist for Bloomberg News, said that NewPage Corp. prevailed over most objections from the official creditors' committee and won agreement from the bankruptcy judge on final approval for $600 million in secured financing. Moody's Investors Service assigned a Ba2 rating to the $350 million first-out revolving debtor-in-possession credit facility and a B2 rating to the $250 million second-out debtor-in- possession term loan, collectively, the "DIP facilities", of NewPage Corporation. NEW ULM: Case Summary & 5 Largest Unsecured Creditors ----------------------------------------------------- Debtor: New Ulm Retail & Development, LLC 101 German St. New Ulm, MN 56073 Bankruptcy Case No.: 11-36523 Chapter 11 Petition Date: October 18, 2011 Court: United States Bankruptcy Court District of Minnesota (St. Paul) Judge: Gregory F. Kishel Debtor's Counsel: Joseph Anthony Wentzell, Esq. WENTZELL LAW OFFICE, PLLC 2812 Anthony Lane S St. Anthony, MN 55418 Tel: (612) 436-3292 Fax: (612) 788-9879 E-mail: jwentzell@fosterbrever.com Scheduled Assets: $1,829,049 Scheduled Debts: $1,246,971 A list of the Company's five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mnb11-36523.pdf The petition was signed by Clifford Strand. NO FEAR: Seeks Approval to Tap RSM McGladrey as Accountant ---------------------------------------------------------- No Fear Retail Stores, Inc., Simo Holdings, Inc., and No Fear MX, Inc. seek court authority to employ the accounting firm RSM McGladrey, Inc., to act as their accountant, effective as of February 24, 2011, for the purposes of preparing consolidated tax returns and providing other accounting services as necessary. At the present time, the Debtors need accountants to prepare their federal income tax return (IRS Form 1120) and state income tax return (FTB Form 100) for fiscal year ended August 31, 2010. RSM has prepared the federal and state tax returns for the Debtors since 2004. The Debtors now wish to employ RSM to prepare their consolidated tax returns for the fiscal year ended August 31, 2010. RSM will be paid a flat fee of $25,000 for the preparation of the consolidated federal and state 2010 tax returns for the Debtors, plus expenses relating to the services provided at the Firm's normal rates. This is the same fee RSM charged the Debtors prepetition to prepare their 2009 tax returns. Matthew L. Bradvica, a managing director at RSM, assures the Court that neither his Firm, nor any of the professionals comprising or employed by it, represent or hold an interest adverse to the interest of the estate with respect to the matter on which it is to be employed, and RSM is a "disinterested person" as that term is defined in the Bankruptcy Code. Mr. Bradvica further disclosed that RSM prepares the taxes for FMF International, a creditor for the Debtors, and has prepared the individual tax return of Mark Simo for the last three years including 2010. About No Fear Retail Carlsbad, California-based No Fear Retail Stores, Inc., is a retailer of action, sports, and casual youth lifestyle apparel and accessories, targeting young adults and teens. It operates 41 retail locations in California, Oregon, Arizona, Florida, Nevada, North Carolina, and Texas. No Fear filed for Chapter 11 bankruptcy protection (Bankr. S.D. Calif. Case No. 11-02896) on Feb. 24, 2011. David S. Kupetz, Esq., at Sulmeyer, Kupetz, A Professional Corp, serves as the Debtor's bankruptcy counsel. The Debtor tapped Jones Day as special intellectual property counsel; Avant Advisory Group's George Blanco as chief restructuring officer, and Venturi & Company LLC, as financial advisors. The Debtor estimated disclosed $31,648,063 in assets and $12,552,985 in liabilities as of the Chapter 11 filing. Affiliates No Fear MX, Inc. (Bankr. S.D. Calif. Case No. 11-02897) and Simo Holdings, Inc. (Bankr. S.D. Calif. Case No. 11-02898) filed separate Chapter 11 petitions on Feb. 24, 2011. Tiffany L. Carroll, the Acting U.S. Trustee for Region 15, appointed three creditors to serve on an Official Committee of Unsecured Creditors of No Fear MX, Inc. Pachulski Stang Ziehl & Jones LLP represents the Committee. BDO USA LLP serves as financial advisor to provide financial advisory services to the Committee. NO FEAR: SHI Committee to Tap Gibson Dunn as Conflicts Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the bankruptcy case of Simo Holdings, Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of California to retain Gibson Dunn & Crutcher LLP as its special conflicts counsel, nunc pro tunc to August 29, 2011. Simo Holdings, Inc., No Fear Retail Stores, Inc. and No Fear MX, Inc.'s sales of their intellectual property and certain related assets to Brands Holdings Limited and of their inventory and other retail operations related assets, excluding intellectual property, to Ryderz Compound, Inc., closed in late July. From the sale proceeds, the Debtors' postpetition DIP financing secured lender and their prepetition secured lender have been paid in full and the secured lenders have executed claim releases. Since closings of the BHL and Ryderz sale transactions, the Debtors and the NFRS creditors' committee and the SHI Committee have, in consultation with each other, moved forward with the further administration of the cases and have begun the development and preparation of a Chapter 11 plan of liquidation and related disclosure statement. The Debtors, the NFRS Committee, and the SHI Committee, as "Plan Proponents," intend to expeditiously pursue confirmation of the Plan that will distribute the net proceeds of the sales to creditors pursuant to the priorities set forth in the Bankruptcy Code. In connection with these efforts, the Plan Proponents have collectively had initial discussions on how to address areas of potential conflict among each of the Debtors' estates while minimizing overall professional costs related to exiting Chapter 11. These issues include, for example, whether the plan should provide for the substantive consolidation for the Debtors' assets and liabilities and whether prepetition transfers of intellectual property by SHI to NFRS should be avoided as constructively fraudulent. With respect to the Substantive Consolidation Issues and the Fraudulent Transfer Issues, (a) SulmeyerKupetz PC will represent the interests of the NFMX estate; and (b) Pachulski Stang Ziehl & Jones LLP will represent the interests of the NFRS estate. The SHI Committee, for its part, seeks to tap Gibson Dunn's services to represent its interests. The financial analysis necessary to address these issues will be performed jointly by BDO Consulting, currently financial advisors to the NFRS Committee and the SHI Committee, and Avant Advisory Services, currently the Chief Restructuring Officer for all of the Debtors. SulmeyerKupetz, Pachulski Stang, and Gibson Dunn, with input from BDO and Avant, will prepare a joint memorandum which sets forth agreed facts, disputed facts and a summary of the legal arguments relating to each of these issues as well as a recommendation as to a potential resolution of the issues and the rationale in support of the resolution. The Joint Memorandum will be provided to the NFRS Committee, the SHI Committee, the Official Committee of Unsecured Creditors of NFMX, and the Debtors' Board of Directors. Accordingly, the SHI Committee says, Gibson Dunn's employment as its special conflicts counsel to represent it in these matters is necessary and appropriate. As special conflicts counsel to the SHI Committee, Gibson Dunn will: (1) advise the SHI Committee and negotiate on its behalf in connection with the Plan, the Joint Memorandum, the Substantive Consolidation Issues, and the Fraudulent Transfer Issues; (2) participate in the drafting of the Joint Memorandum and Plan on behalf of the SHI Committee; (3) representing the SHI Committee at hearings and other proceedings in connection with the Plan, the Joint Memorandum, the Substantive Consolidation Issues, and the Fraudulent Transfer Issues; and (4) if requested by the SHI Committee and in Gibson Dunn's discretion, performing other legal services for and on behalf of the SHI Committee as special conflicts counsel to assist the SHI Committee in satisfying its duties under Section 1103 of the Bankruptcy Code where either a potential or actual conflict precludes representation by general counsel for the SHI Committee. In exchange for its services, Gibson Dunn will be paid based on its customary hourly rates. The specific hourly rates for the attorneys that are anticipated to represent the SHI Committee as special conflicts counsel are: Attorney 2011 Billable Rate -------- ------------------ Craig Millet $895 Kenneth Glowacki $675 Doug Levin $430 The firm will also be reimbursed for expenses incurred in connection with its limited representation. Craig Millet, Esq., a partner at Gibson Dunn, assures the Court that his firm and its attorneys are "disinterested" persons as that term is defined under Section 101(14) of the Bankruptcy Code. Tiffany L. Carroll, the Acting U.S. Trustee for Region 15 has no objection to the proposed retention. About No Fear Retail Carlsbad, California-based No Fear Retail Stores, Inc., is a retailer of action, sports, and casual youth lifestyle apparel and accessories, targeting young adults and teens. It operates 41 retail locations in California, Oregon, Arizona, Florida, Nevada, North Carolina, and Texas. No Fear filed for Chapter 11 bankruptcy protection (Bankr. S.D. Calif. Case No. 11-02896) on Feb. 24, 2011. David S. Kupetz, Esq., at Sulmeyer, Kupetz, A Professional Corp, serves as the Debtor's bankruptcy counsel. The Debtor tapped Jones Day as special intellectual property counsel; Avant Advisory Group's George Blanco as chief restructuring officer, and Venturi & Company LLC, as financial advisors. The Debtor estimated disclosed $31,648,063 in assets and $12,552,985 in liabilities as of the Chapter 11 filing. Affiliates No Fear MX, Inc. (Bankr. S.D. Calif. Case No. 11-02897) and Simo Holdings, Inc. (Bankr. S.D. Calif. Case No. 11-02898) filed separate Chapter 11 petitions on Feb. 24, 2011. Tiffany L. Carroll, the Acting U.S. Trustee for Region 15, appointed three creditors to serve on an Official Committee of Unsecured Creditors of No Fear MX, Inc. Pachulski Stang Ziehl & Jones LLP represents the Committee. BDO USA LLP serves as financial advisor to provide financial advisory services to the Committee. NORTEL NETWORKS: Court Dismisses Appeal Vs. Pensions Regulator -------------------------------------------------------------- William Robins at Citywire.co.uk reports that Nortel Network's appeal against The Pensions Regulator over obligations to members of its pension scheme has been dismissed by the High Court. Earlier this year, the report recalls, the court ruled that in accordance with a financial support directive (FSD), Nortel's creditors had an obligation to support Nortel's UK pension fund. According to Citywire.co.uk, Nortel appealed the ruling, arguing its pension liability was not to be counted as an expense of the administration process. However Justice Lloyd concluded: "The liability ranks as an expense of the administration (or as the case may be, the liquidation if all the relevant events take place during a liquidation). It follows that the appeal is to be dismissed." Citywire.co.uk says Nortel may still look to take their appeal to the Supreme Court. A decision by the High Court on whether this will be possible is expected in two weeks' time, the report notes. Justice Lloyd said it would be unfair for Nortel's creditors to be rewarded payments without contributing to the employee's pension, according to the report. "The [FSD] legislation has a valuable and realistic purpose if it enables some redistribution of assets in such a situation, where otherwise the creditors of [Nortel] would be able to share in a greater volume of assets partly as a result of having the benefits of the services (including employees) provided by the employer but without having to pay in full for the provision of those services, in particular without having to contribute appropriately to the pension liabilities in respect of its employees," Citywire.co.uk quotes Justic Lloyd as saying. About Nortel Networks Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was once North America's largest communications equipment provider. It has sold most of the businesses while in bankruptcy. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009. Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. On May 28, 2009, at the request of the Administrators, the Commercial Court of Versailles, France ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in this Court for recognition of the English Proceedings as foreign main proceedings under chapter 15 of the Bankruptcy Code. Nortel Networks divested off key assets while in Chapter 11. Nortel has raised US$3.2 billion by selling its operations as it prepares to wind up a two-year liquidation due to insolvency. In June 2011, Nortel added US$4.5 billion to its cash pile after agreeing to sell its remaining patent portfolio to Rockstar Bidco LP, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a US$900 million stalking horse bid by Google Inc. at an auction. The deal closed in July. Nortel Networks has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. NUANCE: Moody's Affirms Corporate Family Rating at 'Ba2' -------------------------------------------------------- Moody's Investors Service affirmed Nuance's Ba2 corporate family rating and revised its senior secured debt facilities' ratings to Baa3 from Ba1 pending close of the company's proposed $600 million convertible debt offering. The increase in senior secured ratings is driven by the additional junior debt below it in the capital structure. The ratings outlook is stable. RATINGS RATIONALE The proceeds of the convertible debt offering will be used for general corporate purposes, which includes acquisitions. The company is very acquisitive, having acquired or announced approximately $2.8 billion in acquisitions since 2006. While leverage will be high pro forma for the increased debt (approximately 4.4x based on Moody's adjusted debt to EBITDA calculations), Moody's expects the company will quickly get leverage to the mid 3's through organic and acquired growth in EBITDA. Nuance's Ba2 corporate family rating reflects its leading position within the voice recognition industry, the favorable growth profile of the company and industry and the strong cash flow generating capabilities of company. The ratings remain tempered by the company's acquisition appetite as it attempts to further build-out its portfolio of speech recognition applications and services. The ratings contemplate that the company will continue to use a mix of cash, debt and stock to finance acquisitions while keeping debt to EBITDA at or below 3.5x on a pro forma basis. Moody's expects the company will occasionally increase leverage above these levels on a temporary basis, but quickly bring leverage down. The ratings could face downward pressure, if pro forma leverage exceeds 4x on a sustained basis or if Nuance is unable to continue to demonstrate effectiveness in integrating future acquisitions. Given the acquisitive nature of the company, an upgrade is unlikely in the near term. The debt instrument ratings were determined using Moody's Loss Given Default Methodology. The senior secured debt Baa3 ratings reflect their senior most position in the capital structure and relative proportion of junior debt. The upward revision reflects the addition of $600 million in unsecured debt. Substantial additional issueances of secured debt could however return the secured debt to its previous ratings. These ratings were affirmed: Corporate family rating: Ba2 Probability of default: Ba2 These ratings were revised: Senior secured revolving credit facility due 2015 to Baa3 LGD2 (18%) from Ba1, LGD3 (34%) Senior secured term loan facilities due 2013 to Baa3 LGD2 (18%) from Ba1, LGD3 (34%) Amended and extended senior secured term loan due 2016, Baa3 LGD2 (18%) from Ba1, LGD3 (34%) Ratings outlook: Stable The principal methodology used in rating Nuance was Moody's Global Software Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA, published June 2009. Nuance Communications, Inc., headquartered in Burlington, MA, is a leading provider of speech, text and imaging solutions for business and consumers. The company had revenues of $1.3 billion for the twelve months ended June 30, 2011. NUANCE COMMUNICATIONS: S&P Affirms 'BB-' Corporate Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Burlington, Mass.-based Nuance Communications Inc. to stable from positive. "At the same time, we affirmed our 'BB-' corporate credit rating on the company," S&P said. "We also assigned an issue rating of 'BB-' and a recovery rating of '3' on the company's $600 million senior unsecured convertible notes due 2031. The '3' recovery rating indicates prospects for meaningful (50%-70%) recovery in the event of a payment default. The rating on the $600 million senior unsecured convertible notes is 'BB-' (the same as the corporate credit rating)," S&P related. "We also affirmed the 'BB+' rating on the company's first-lien credit facilities, with a recovery rating of '1', reflecting our expectation for very high (90%-100%) recovery in the event of a payment default. The rating on the first-lien credit facilities remains 'BB+' (two notches above the corporate credit rating)," S&P related. "Additionally, we affirmed the 'BB-' rating on the company's $250 million senior convertible notes due 2027, with a recovery rating of '3', reflecting our expectation for meaningful (50%-70%) recovery in the event of a payment default. We also affirmed the rating on the $250 million senior unsecured convertible notes at 'BB-' (the same as the corporate credit rating)," S&P stated. The outlook revision from positive to stable reflects the company's announcement that it is issuing $600 million senior convertible notes, with the proceeds to be used for a $200 million share repurchase and for general corporate purposes. Debt to latest-12-month adjusted EBITDA will increase to the high-3.0x area at close, from around 2.4x at June 30, 2011. "Our rating on Nuance reflects our expectation that the company will continue to grow EBITDA organically and through integration of acquisitions," said Standard & Poor's credit analyst David Tsui. "In our view, the incremental debt is not a detriment to credit quality at the current rating given Nuance's history of successful integrations. The ratings also reflect the company's highly acquisitive growth strategy and significant financial risk profile." OCIMUM BIOSOLUTIONS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Ocimum Biosolutions, Inc. 50 West Watkins Mill Road Gaithersburg, MD 20878 Bankruptcy Case No.: 11-13310 Chapter 11 Petition Date: October 17, 2011 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Brendan Linehan Shannon Debtor's Counsel: Jeffrey M. Carbino, Esq. THORP REED & ARMSTRONG One Commerce Square 2005 Market Street, Suite 1000 Philadelphia, PA 19103 Tel: (215) 640-8548 Fax: (215) 640-8501 E-mail: jcarbino@thorpreed.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/deb11-13310.pdf The petition was signed by Anuradha Acharya, chief executive officer. OMEGA NAVIGATION: Opposes Committee Retention of Advisors --------------------------------------------------------- Baytown Navigation, Inc. and its debtor-affiliates ask the Court not to approve the Official Committee of Unsecured Creditors' application to retain Jager Smith P.C. and Winston & Strawn LLP as counsel and First International Corporation as financial advisor. William A. (Trey) Wood III, Esq., at Bracewell & Giuliani LLP, in Houseton, Texas, relates that general unsecured claims in the Chapter 11 cases total approximately $5.1 million, with the four Committee members having claims in the aggregate of less than $350,000. He notes that since the Petition Date, the Debtors have obtained authority to pay approximately $2 million in unsecured critical vendor claims. After subtracting insider general unsecured claims of about $1.5 million, the amount of non-insider general unsecured claims represented by the Committee totals approximately $1.5 million, whereas the amount of asserted secured claims in the Chapter 11 case exceeds $278 million, Mr. Wood further notes. He adds that given that Omega's ownership of Omega Investments, which in turn owns 80% of OD Investments, is worth in the vicinity of $30 million and is unencumbered, there is a realistic prospect of a substantial dividend to unsecured creditors without the need for strong Committee advocacy. Combining the relatively small amount of unsecured claims held by the Committee members and represented by the Committee with the likelihood of a substantial dividend, Mr. Wood asserts that a cost-benefit analysis clearly supports considerable restrictions on the number of professionals the Committee should be entitled to engage and on the amount of fees and expenses incurred by those professionals. "Given this cost-benefit analysis, the Debtors object to the Committee's retention of two separate firms as their counsel because the retention of both in-state counsel and out-of-state counsel will unnecessarily burden the Debtors' estates with a large amount of fees and expenses relative to the amount of unsecured claims represented by the Committee in these cases," Mr. Wood says. The Debtors object to the retention of FIC because (i) the circumstances of these cases, including the relatively small amount of unsecured claims and the availability of the Debtors' financial advisor, do not justify the Committee's separate retention of a financial advisor; and (ii) retention under ? 328(a) is not appropriate. About Omega Navigation Athens, Greece-based Omega Navigation Enterprises Inc. and affiliates, owner and operator of tankers carrying refined petroleum products, filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston. Omega is an international provider of marine transportation services focusing on seaborne transportation of refined petroleum products. The Debtors disclosed assets of US$527.6 million and debt totaling US$359.5 million. Together, the Debtors wholly own a fleet of eight high-specification product tankers, with each vessel owned by a separate debtor entity. Judge Karen K. Brown presides over the case. Bracewell & Giuliani LLP serves as counsel to the Debtors. Jefferies & Company, Inc., is the financial advisor and investment banker. The Official Committee of Unsecured Creditors has tapped Winston & Strawn as local counsel; Jager Smith as lead counsel; and First International as financial advisor. PARKWOOD ASSOCIATES: Case Summary & 9 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Parkwood Associates, LP 2301 5th St. P.O. Box 2188 Wenatchee, WA 98807 Bankruptcy Case No.: 11-22143 Chapter 11 Petition Date: October 17, 2011 Court: United States Bankruptcy Court Western District of Washington (Seattle) Debtor's Counsel: Paul H. Williams, Esq. LAW OFFICE OF PAUL H. WILLIAMS 601 N 1st St Ste B P.O. Box 123 Yakima, WA 98907 Tel: (509) 453-7499 E-mail: phwatlaw@yahoo.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb11-22143.pdf The petition was signed by Dean Taplett, managing member of LLC, general partner. PEANUT CITY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Peanut City Vegetable Oil Company dba PCVO dba PCVO Underground Utilities P.O. Box 33 Suffolk, VA 23439 Bankruptcy Case No.: 11-74590 Chapter 11 Petition Date: October 16, 2011 Court: United States Bankruptcy Court Eastern District of Virginia (Norfolk) Judge: Frank J. Santoro Debtor's Counsel: Karen M. Crowley, Esq. CROWLEY, LIBERATORE, RYAN & BROGAN, P.C. Town Point Center, Suite 300 150 Boush Street Norfolk, VA 23510 Tel: (757) 333-4500 Fax: (757) 333-4501 E-mail: kcrowley@clrbfirm.com Scheduled Assets: $1,585,677 Scheduled Debts: $775,595 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb11-74590.pdf The petition was signed by D. Sean Horan, president. PLAN 9: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------- Debtor: Plan 9, Inc. aka Plan 9 Music aka Recordfinders 2410 Ownby Lane Richmond, VA 23220-1319 Bankruptcy Case No.: 11-36603 Chapter 11 Petition Date: October 18, 2011 Court: United States Bankruptcy Court Eastern District of Virginia (Richmond) Judge: Douglas O. Tice Jr. Debtor's Counsel: Joseph T. Liberatore, Esq. CROWLEY, LIBERATORE, RYAN & BROGAN, P.C. Town Point Center, Suite 300 150 Boush Street Norfolk, VA 23510 Tel: (757) 333-4500 Fax: (757) 333-4501 E-mail: jliberatore@clrbfirm.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb11-36603.pdf The petition was signed by James V. Bland III, president. POLYONE CORPORATION: Moody's Affirms 'Ba2' Corp. Family Rating -------------------------------------------------------------- Moody's Investors Service affirmed PolyOne Corporation's (PolyOne) Corporate Family Rating Ba2 (CFR) and rated the proposed $300 million Term Loan B at Ba1. PolyOne's existing unsecured notes due 2015 were upgraded to Ba1 from Ba2 as a result of their being parre passu relative to both the proposed $300 million ABL revolving facility and the aforementioned $300 million Term Loan B. PolyOne's existing unsecured notes due 2012 and 2020 were downgraded to Ba3 from Ba2 as a result of their being junior relative to both the proposed $300 million ABL revolving facility and the aforementioned $300 million Term Loan B. The outlook is stable. Ratings Assigned: $300 million Term Loan B at Ba1, LGD2, 24% Ratings Upgraded: 7.5% Debentures due 2015 to Ba1, LGD2, 24% from Ba2, LGD4, 57% Ratings Downgraded: 8.875% Senior Notes due 2012 to Ba3, LGD5, 76% from Ba2, LGD4, 57% 7.375% Senior Notes due 2020 to Ba3, LGD5, 76% from Ba2, LGD4, 57% Senior Unsecured Shelf (P)Ba3 from (P)Ba2 Ratings Affirmed: Issuer: PolyOne Corporation Corporate Family Rating Ba2 Probability of Default Rating Ba2 Preferred Shelf (P)B1 Speculative Grade Liquidity Rating at SGL-2 Outlook Stable RATINGS RATIONALE Proceeds of the term loan, along with balance sheet cash, will be used to fund the friendly acquisition of ColorMatrix Group, Inc. (ColorMatrix), a leading global innovator in liquid colorants, additives and fluoropolymers for a purchase price of $486 million. ColorMatrix achieved sales and EBITDA of $196.8 million and $43.6 million respectively for the 12 months ended June 30, 2011, implying a purchase price of approximately 11 times, not including any potential synergies. Proforma for the acquisition Debt to EBITDA for the LTM period ending June 30, 2011 would be 3.2x up from 2.6x for PolyOne on a standalone basis (excluding the EBITDA from Sunbelt). The acquisition is subject to regulatory approvals and is expected to close late in 2011. PolyOne's Ba2 CFR reflects the prospect of a continued sustainable operating income generated by its Global Specialty Engineered Materials and Performance Products and Solutions segments as well as the Distribution segment over the next several years. PolyOne's performance has been aided by successful restructuring programs, economic recovery and demand increases, and product mix improvements. Moody's constructive view of PolyOne's performance is supported by the significant gains demonstrated since mid-2009. Moody's expects that PolyOne will generate meaningful free cash flow in 2011 and 2012. PolyOne's good liquidity was boosted by cash from earnings and the sale of its SunBelt joint venture, which brought the cash balance to $417 million as of June 30, 2011. However, some of PolyOne's cash will be utilized to execute the October 3, 2011 announced acquisition of ColorMatrix - a transaction which is supportive of PolyOne's global expansion strategy and focus on value-added product initiatives. Remaining cash balances are expected to support the company's liquidity and be used to fund future acquisitions. PolyOne's Speculative Grade Liquidity Rating of SGL-2 is a result of their good liquidity position which includes a significant cash balance, no significant near-term maturities, and no covenant concerns. The new ABL facility will enhance their liquidity as it provides a measure of flexibility. There is limited upside to the ratings at this time. Should PolyOne achieve sustainable EBITDA margins above 10%, maintain Retained Cash Flow/Debt of above 25%, and reliably achieve Debt/EBITDA of less than 3.0x on an adjusted basis, Moody's can consider the appropriateness of a higher rating. Moody's can reassess the appropriateness of the rating and outlook if annual EBITDA falls below $100 million such that Debt/EBITDA rises above 4.5x on a sustainable basis or if the company's excess liquidity declines below $50 million. Moody's assessment would also consider the impact of anticipated acquisitions as well as further dividend and share repurchase programs. The principal methodology used in rating PolyOne 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. PolyOne Corporation, (PolyOne) headquartered in Avon Lake, Ohio, is a leading global provider of specialized polymer materials, services and solutions with revenues of $2.8 billion for the LTM ending June 30, 2011. PREMIER PROPERTIES: Case Summary & 10 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Premier Properties Northwest LLC 20605 NE 16th Street Sammamish, WA 98074 Bankruptcy Case No.: 11-22182 Chapter 11 Petition Date: October 18, 2011 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Larry B. Feinstein, Esq. VORTMAN & FEINSTEIN 500 Union St Ste 500 Seattle, WA 98101 Tel: (206) 223-9595 E-mail: feinstein2010@gmail.com Scheduled Assets: $1,772,921 Scheduled Debts: $2,172,782 A list of the Company's 10 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb11-22182.pdf The petition was signed by Kenneth L. Ross, owner, managing member. PROTEONOMIX INC: Examines Licensing of Diabetes Stem Cell Tech. --------------------------------------------------------------- Proteonomix, Inc., decided to examine the possibility of licensing its stem cell diabetes related technology to another company in light of continued progress toward its trial of UMK-121, its stem cell treatment for patients awaiting liver transplant to overcome End Stage Liver Disease. Michael Cohen, President of the Company, stated: "Since we continue our rapid progress toward the commencement of our trial of UMK-121, we have decided to explore the possible licensing of our diabetes related applications of our stem cell technology to another company. This strategic decision is being made in recognition of the increasing breadth of our technology and the need for additional capital and management resources to effectively deal with the massive ramifications of the diabetes applications of the stem cell technology that we have developed." Mr. Cohen continued: "We have been approached by one group that has expressed interest in exploring such a possibility and we will follow through with this in the coming weeks. Meanwhile we will seek out others interested in a similar transaction keeping in mind at all times that any such deal would have to provide immediate benefit to our shareholders." About Proteonomix Proteonomix, Inc. (OTC BB: PROT) -- http://www.proteonomix.com/-- is a biotechnology company focused on developing therapeutics based upon the use of human cells and their derivatives. The Company's balance sheet at June 30, 2011, showed $3.51 million in total assets, $6.95 million in total liabilities and a $3.43 million total stockholders' deficit. As reported in the TCR on April 1, 2011, KBL, LLP, in New York, expressed substantial doubt about Proteonomix, Inc.'s ability to continue as a going concern, following the Company's 2010 results. The independent auditor noted that the Company has sustained significant operating losses and is currently in default of its debt instrument and needs to obtain additional financing or restructure its current obligations. RADDCO ENTERPRISES: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Raddco Enterprises, LLC 3380 Wynn Road, Suite B Las Vegas, NV 89102 Bankruptcy Case No.: 11-26409 Chapter 11 Petition Date: October 18, 2011 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Bart K. Larsen, Esq. KOLESAR & LEATHAM, CHTD. 400 South Rampart Boulevard, Suite 400 Las Vegas, NV 89145 Tel: (702) 362-7800 Fax: (702) 362-9472 E-mail: blarsen@klnevada.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by A. Dennis McCarthy, managing member. REGIONALCARE HOSPITAL: Moody's Assigns 'B3' Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service assigned B3 Corporate Family and Probability of Default Ratings to RegionalCare Hospital Partners, Inc. (RCHP). Moody's also assigned a B2 (LGD 3, 40%) rating to the company's proposed senior secured credit facility, consisting of a $100 million revolver and a $295 million term loan. This is the first time Moody's has assigned ratings to RCHP. Moody's understands that the proceeds of the facility, along with a $65 million second lien term loan (not rated by Moody's), will be used to fund the acquisition of Essent Healthcare (Essent) and refinance RCHP's existing debt. The ratings outlook is stable. The rating actions are subject to the conclusion of the transaction as proposed and Moody's review of final documentation. This is a summary of ratings assigned. $100 million first lien senior secured revolving credit facility expiring 2016, B2 (LGD 3, 40%) $295 million first lien senior secured term loan due 2018, B2 (LGD 3, 40%) Corporate Family Rating, B3 Probability of Default, B3 RATINGS RATIONALE RCHP's B3 Corporate Family Rating reflects Moody's expectation that the company will operate with significant leverage following the proposed transaction. Moody's calculation of leverage includes an adjustment to treat 50% of the balance of the preferred stock of RCHP as debt. The rating also reflects Moody's belief that the company will look to aggressively pursue additional acquisitions to increase scale, which is relatively small compared to other corporate issuers. Moody's also considered the risks associated with forecasting the performance of operations that have a very limited track record of operating under the current organizational structure, as all of the company's seven hospitals were acquired after May 2010. Supporting the rating is the expectation that individual hospital operations will improve under the RCHP management team providing stable free cash flow and improved margins. Additionally, Moody's considered the successful track record the management team had in building the operations of Province Healthcare prior to its acquisition by LifePoint Hospitals in April 2005. The stable rating outlook reflects Moody's expectation that the company will see improvements at each of the recently acquired facilities as it implements initiatives to balance services in each of its markets and benefits from physician recruitment initiatives. The rating also reflects Moody's expectation that the company will look to add facilities through acquisitions that could be debt funded. Moody's could upgrade the rating if improvements in the operations of the currently owned facilities are balanced with the acquisition of new facilities such that leverage can be maintained below 6.0 times. Additionally, Moody's would like to see improvement in margins and cash flow generation such that retained cash flow to net debt was expected to be sustained above 10% before considering an upgrade. Moody's rating incorporates many of the risks associated with an early stage enterprise that is expected to grow through acquisitions and, therefore, it does not expect a rating downgrade in the near term. However, if improvements in operating results fail to materialize, either through operational issues in specific markets, challenges in the broader healthcare sector, including the possibility of additional reductions in Medicare reimbursement or disruption from future growth initiatives, Moody's could downgrade the rating. Moody's could also downgrade the rating if the company were expected to meaningfully increase leverage for a large acquisition or shareholder friendly initiatives. Additionally, Moody's could downgrade the rating if the company's liquidity position were to weaken. For further details refer to Moody's Credit Opinion for RegionalCare Hospital Partners on moodys.com. The principal methodology used in rating RegionalCare Hospital Partners was the Global For-Profit Hospital Industry Methodology published in September 2008. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. REGIONALCARE HOSPITAL: S&P Assigns Prelim. 'B' Corporate Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B' corporate credit rating to RegionalCare Hospital Partners. Our rating outlook on the company is stable. "We also assigned a preliminary issue-level rating of 'B' (the same as the corporate credit rating) with a preliminary recovery rating of '3' (50%-70% recovery expectation) to the company's proposed $100 million revolving credit facility due 2016 and $295 million term loan B due 2018. In addition, we assigned a preliminary issue-level rating of 'CCC+' (two notches below the corporate credit rating) with a preliminary recovery rating of '6' (0%-10%) to the company's proposed $65 million second-lien term loan due 2019," S&P related. The low speculative-grade rating on Brentwood, Tenn.-based RegionalCare Hospital Partners reflects the company's earnings concentration in a small number of its facilities and its "highly leveraged" financial risk profile. RegionalCare faces reimbursement risks as well as a "vulnerable" business risk profile that is characterized by numerous local market risks in its relatively small, concentrated hospital portfolio. RegionalCare is a young company with little history, because it acquired all of its four hospitals within the past 18 months. Completing the pending transaction to acquire Essent Healthcare will boost the company to seven hospitals in six states. "This rapid growth, and our expectation that the company will continue growing aggressively, will test its ability to effectively integrate operations and manage the unique challenges in the respective markets. We believe some of the keys to RegionalCare's success include physician recruitment and retention, and the ability to broaden and strengthen the care it provides at a local level, boosting local-market competitiveness and reduce the outmigration of patients to other communities," S&P stated. RegionalCare's high leverage results from the pending transaction to acquire three hospitals and the nature of the company's $267 million of equity, which is in the form of preferred stock held by the owner. "Our debt calculation includes treatment of the company's payment-in-kind preferred stock as 100% debt, consistent with our published criteria. However, we recognize the qualitative benefits, including financial flexibility, and inability to pay dividends prior to the maturity of the proposed debt. Cash flow protection measures reflect this significant debt leverage that is typical for a young, expanding company. Our calculation of RegionalCare's lease-adjusted debt to EBITDA on a pro forma basis assuming the pending acquisition is completed of more than 9x is well above the 5x threshold for a company that we consider to be highly leveraged," S&P stated. RITE AID: Fitch Affirms Junks Ratings on Senior Unsecured Notes --------------------------------------------------------------- Fitch Ratings has affirmed Rite Aid Corporation's ratings as follows: -- Issuer Default Rating (IDR) at 'B-'; -- Secured revolving credit facility and term loans at 'BB- /RR1'; -- First and second lien senior secured notes at 'BB-/RR1'; -- Guaranteed senior unsecured notes at 'CCC/RR5'; -- Non-guaranteed senior unsecured notes at 'CC/RR6'. The Rating Outlook has been revised to Negative from Stable. The ratings reflect the following: -- Rite Aid's high leverage, limited capital for investment and operating statistics that significantly trail its two major competitors; -- Strong market share position as the third largest U.S. drug retailer; -- Management's concerted efforts to improve the productivity of its store base and manage liquidity through refinancing activity over the last two years, working capital reductions and other cost cutting initiatives. Fitch expects that credit metrics will remain stable at current levels over the next three years. In the next couple of years Rite Aid will have to address a series of significant debt maturities that will occur between 2014 and 2016, including approximately $1 billion of unsecured notes that matures in 2015. Fitch notes that Rite Aid has only had to refinance secured debt since 2008. The last time the company issued unsecured notes was in May 2007 as part of financing the acquisition of Brooks Eckerd. At that time the expectation was that the combined entity would generate EBITDA well in excess of $1 billion in 2008 and beyond. However, EBITDA has been under pressure given a significant shortfall in top line with LTM EBITDA at $875 million. There have been some recent signs of stabilization with same store sales turning modestly positive and over the next 12-24 months, the generic wave could provide a nice windfall to the company's profitability. Whether this pushes EBITDA into the $1 billion plus range remains to be determined given offsetting factors such as continued share losses to larger and more capitalized competitors, ongoing pressure on pharmacy reimbursement rates and weak consumer sentiment. The company is also highly dependent on favorable credit market conditions to get this magnitude of refinancings completed. In addition, even though the collateral suggests comfortable recovery for secured lenders, secured lenders in 2014 may not want to go out beyond the maturities on the unsecured paper, creating the need for a more comprehensive refinancing over the next couple of years. At Aug. 27, 2011, Rite Aid had cash of $78 million and excess borrowing capacity of approximately of $963 million under its credit facility, net of $73 million in facility borrowings and $139 million in outstanding letters of credit. Rite Aid has maintained liquidity in the $900 to $1.2 billion range for the past eight quarters. However, given that Rite Aid remains highly capital constrained and Fitch expects only modest FCF generation going forward, the company is highly dependent on refinancing and pushing out debt maturities to avoid restructuring. Between 2014 and 2016, the company will have to contend with refinancing approximately $1 billion in debt annually. Fitch expects that Rite Aid could refinance $180 million of unsecured unguaranteed bonds due August 2013 through credit facility borrowings and modest FCF. Rite Aid is required to buy back $64 million of 8.5% convertible notes due May 2015 should its shares become delisted. Given the quality of its collateral, Rite Aid should be able to refinance the $1 billion secured term loan due June 2014 on its own. The collateral consists of (1) marketable prescription files with a total of approximately 290 million prescriptions filled annually that could be valued at $10 to $20 per script; and (2) pharmacy as well as nonprescription inventories. However, as noted above, even though the collateral suggests comfortable recovery for secured lenders, secured lenders in 2014 may not want to go out beyond the maturities on the unsecured paper. Rite Aid has $460 million of unsecured guaranteed debt that matures in March 2015 and $405 million that matures in December 2015. The ability to refinance this debt will depend on a variety of industry and credit market factors. News flow around increased generics, which carry higher margins, should be a net positive from 2012 to 2015. However, the potential merger of Merck Medco and Express Scripts could further pressure reimbursement rates and be somewhat of an offsetting factor. In addition, Rite Aid could see accelerated share losses to CVS and Walgreens, which would continue to pressure already depressed EBITDA margins. For the latest 12-month period ended Aug. 27, 2011, total same store sales was mildly positive at 0.6% with a front end same store sales increase of 0.9% and a pharmacy same store sales increase of 0.5%. Adjusted EBITDA (adjusted for non-cash and one time items) declined modestly by $15 million to $875 million and adjusted debt/EBITDAR at 7.6 times (x) and EBITDAR/interest + rent at 1.2x were largely flat to fiscal year end levels given modest debt reduction. Credit metrics over the next three years are expected to remain relatively stable. Fitch expects modest same store sales growth of 1% and mid-to-high single digit growth in EBITDA in 2012 and 2013 driven largely by the introduction of higher margined generics and somewhat offset by continued pharmacy reimbursement pressures. Risks to estimates are a decline in same store sales trends due to macro weakness or share losses to its larger peers and higher than expected decline in reimbursement rates. Rite Aid's operating metrics significantly lag those of its largest and well capitalized competitors, CVS Caremark and Walgreen. The latter two retailers have been able to participate in the strong industry growth dynamics, with prescription sales and volume growing at a CAGR of 8% and 3%, respectively, over the last decade in spite of the recent slowdown. The other two retailers have also gained share through strong organic store growth as well as folding in regional retailers, particularly in the case of CVS Caremark, in many of Rite Aid's markets. Share gains have mainly come from independents that have buckled under the pressure of declining pharmacy reimbursement rates over the last two decades. Rite Aid has been unable to participate in this growth largely due to capital constraints and the company's inability to appropriately invest in its stores remains an ongoing concern. Fitch views the projected $250 million in capital spending for fiscal 2011 below levels required to remain competitive and the company's market share could continue to weaken over time, even in markets where it has a top three position. Beyond the benefit from the generic wave in 2012-14, Fitch does not expect meaningful top line and EBITDA expansion over the next few couple years given the lack of capital to execute successfully on its plans to address underperforming stores. Prescription trends remain anemic (average weekly prescriptions per store has been flat at around 1,150 for the last few years versus Walgreen at approximately 1,600 and CVS Caremark at 1,700) and front end same stores sales gains are expected to be modest. As a results, EBITDA margins are likely to remain depressed, which at 3.5% (excluding non-cash and merger related expenses) for the LTM period is significantly below its two leading competitors' margins (with Walgreen's EBITDA margin at 7% and CVS retail EBITDA margin at 9.9%). The issue ratings shown above are derived from the IDR and the relevant Recovery Rating. Fitch's recovery analysis assumes a liquidation value under a distressed scenario of approximately $6 billion on inventory, receivables, owned real estate and prescription files. The $1.175 billion revolving credit facility, term loans, $410 million senior secured notes due June 2016 and the $650 million senior secured notes due August 2020 have a first lien on the company's cash, accounts receivable, investment property, inventory and scrip lists, and are guaranteed by Rite Aid's subsidiaries giving them an outstanding recovery (91%-100%). The $1.175 billion revolving credit facility is due to mature on Aug. 19, 2015. However, the maturity shall be April 18, 2014 in the event that Rite Aid does not repay, refinance or otherwise extend the remaining term loans ($1,079 million Tranche 2 Term Loan and $343 million Tranche 3 Term Loan due June 1, 2014) prior to that time and meet certain other conditions. The senior secured credit facility requires the company to maintain a minimum fixed charge coverage ratio (of 1.0x through Nov. 26, 2011 and 1.05x thereafter) only if availability on the revolving credit facility is less than $150 million. Rite Aid's fixed charge coverage ratio was above the minimum required amount at the end of the last quarter. Rite Aid's senior secured notes have a second lien on the same collateral as the revolver and term loans and are guaranteed by Rite Aid's subsidiaries. These are also expected to have an outstanding recovery prospects. Given the amount of secured debt in the company's capital structure, the unsecured guaranteed notes are assumed to have below average recovery prospects (11%-30%) and unsecured notes and convertible bonds are assumed to have poor recovery prospects (0%-10%) in a distressed scenario. ROCHA DAIRY: Committee Gets Nod to Hire Rocha Farms as Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors of Rocha Dairy LLC aka Rocha Farms obtained permission from the U.S. Bankruptcy Court for the District of Idaho to retain May Browning & May as its counsel, effective as of July 21, 2011. The members of the Committee are: a. Troy Chandler, Farmore of Idaho b. Lonnie Lowder, Blue Mud, Inc. c. David Silva, High Mountain Hay d. Chancey Standlee, Standlee Hay Company e. Cindy Wiersema, Kurt Wiersema Trucking About Rocha Dairy Based in Wendell, Idaho, Rocha Dairy, LLC, aka Rocha Farms, filed for Chapter 11 bankruptcy (Bankr. D. Idaho Case No. Case No. 11- 40836) on May 25, 2011. Judge Jim D. Pappas presides over the case. Lawyers at Robinson, Anthon & Tribe serve as bankruptcy counsel. 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 Elcidio Rocha, member. ROCK PARENT: S&P Assigns 'B' Corporate Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services assigned Rock Parent LLC its 'B' corporate credit rating. The rating outlook is stable. "At the same time, we assigned the company's $300 million first- lien senior secured credit facilities, which were borrowed by wholly owned subsidiary ROC Finance LLC, our issue-level rating of 'BB-' (two notches higher than the 'B' corporate credit rating). We also assigned this debt a recovery rating of '1', indicating our expectation of very high (90% to 100%) recovery for lenders in the event of a payment default. The first-lien credit facilities consist of a $150 million funded term loan and two delayed-draw term loans totaling $125 million, all due Aug. 19, 2017, and a $25 million revolving credit facility due Aug. 19, 2016," S&P stated. "Additionally, we assigned our issue-level rating of 'B' (the same as the corporate credit rating) and a recovery rating of '3', to the company's $380 million of second-lien senior secured notes due 2018. The '3' recovery rating indicates our expectation of meaningful (50%-70%) recovery for lenders in the event of a payment default. Wholly owned subsidiaries ROC Finance LLC and ROC Finance 1 Corp are co-borrowers on the notes," S&P noted. "The capital structure also includes a $125 million furniture, fixtures, and equipment (FF&E) facility which we do not rate," S&P said. "Our rating assignment follows the closing of the company's new credit facility and our review of final documentation," S&P stated. Rock Parent LLC is a subsidiary of Rock Ohio Caesars LLC (ROC), which is 80% owned by Rock Gaming, a Midwest-based gaming company whose principal investor is Dan Gilbert, and 20% owned by subsidiaries of Caesars Entertainment Corp. The company was created for the purposes of developing and operating two casino facilities in Ohio. The casinos will be managed by Caesars. ROC plans to use proceeds from the debt issuance, along with about $245 million of equity contributed by Rock and Caesars, to fund approximately $1.1 billion of development and construction costs for the Cleveland and Cincinnati casinos, establish an interest reserve account to fund debt service during the remaining construction period of Cleveland, and to fund transaction fees and expenses. "The 'B' corporate credit rating reflects our assessment of the company's business risk profile as weak," said Standard & Poor's credit analyst Melissa Long, "given construction and execution risk associated with developing and opening two casinos in new gaming markets." The rating also incorporates favorable demographics in the market, limited direct competition (particularly in Cleveland), the experience of the management team in operating regional casinos, and the inclusion of the casinos in Caesars Total Rewards network. ROTHSTEIN ROSENFELDT: Trustee Seeks $10MM From Levinson Jewelers ---------------------------------------------------------------- Keith Goldberg at Bankruptcy Law360 reports that the trustee overseeing Rothstein Rosenfeldt Adler PA, the bankrupt law firm of convicted Ponzi schemer Scott Rothstein, sued a high-end jewelry store in Florida on Wednesday, seeking to claw back nearly $10 million Mr. Rothstein paid the store from 2006 to 2009. Law360 relates that prosecutors said trustee Herbert Stettin said Fort Lauderdale, Fla.-based Levinson Jewelers fraudulently received the money from Rothstein Rosenfeldt Adler PA, the firm through which Rothstein orchestrated a $1.2 billion Ponzi scheme. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. RQB RESORT: Goldman Acquiring Sawgrass Marriott in Confirmed Plan ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Sawgrass Marriott Resort in Ponte Vedra Beach, Florida, will be taken over by secured lender Goldman Sachs Mortgage Co. after the bankruptcy judge on Oct. 18 signed an order confirming the Chapter 11 reorganization plan. Mr. Rochelle recounts that following the resort's Chapter 11 filing in March 2010, disputes between the resort and Goldman Sachs culminated in January, when the bankruptcy judge ruled in favor of New York-based Goldman Sachs by accepting the lender's valuation that the property was worth $132 million. Goldman Sachs was owed $193 million balance on a mortgage. According to the report, Goldman Sachs filed the plan that gave it ownership, together with an unsecured deficiency claim for almost $64 million. Trade suppliers with $190,000 in claims are to receive about half their debt. All creditor classes voted in favor of the plan. Equity holders, who received nothing, weren't entitled to vote, although Goldman Sachs agreed to give releases to the resort's principals. Mr. Rochelle notes that the plan ends the management agreement with Interstate Hotels & Resorts LLC. Interstate's claim is in a separate class with the Goldman Sachs deficiency claim. Together, they will recover about 3% from splitting up about $2.3 million cash, according to the disclosure statement. The franchise agreement with Marriott International Inc. continues under Goldman Sachs's ownership. About RQB Resort LP RQB Resort LP and RQB Development LP own Florida's Sawgrass Marriott Resort, the site of the U.S. PGA Tour's Tournament Players Championship. Ponte Vedra Beach, Florida-based RQB Resort, LP, aka Sawgrass Marriott Resort & Cabana Club, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 10-01596) on March 1, 2010. The Company's affiliate -- RQB Development, LP, aka Sawgrass Marriott Golf Villas & Spa -- filed a separate Chapter 11 petition. The Company estimated its assets and debts at $100 million to $500 million in its Chapter 11 petition. RVTC LIMITED: Aims Full Payment of Gen. Unsec. Claims in 2 Yrs. --------------------------------------------------------------- RVTC Limited Partnership submitted to the U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, a plan of reorganization and disclosure statement dated Sept. 19, 2011. The Plan will be funded through Cash in the Debtor's bank account, the amounts held in the Dale Schuparra Custody Account and the net proceeds from the sales of the Debtor's assets, plus any recovery on Causes of Action and/or Litigation Claims. These funds will be used to fund the Debtor's up-front payment obligations under the Plan. Under the Plan, there are five general classes of non-subordinated creditors holding claims against the Debtor: * Secured Claim of Bank of the Bank of Ozarks, estimated at $10.5 million. The Bank is an oversecured creditor, pursuant to prepetition loan agreements with the Debtor, with a lien on certain of the Debtor's Property. Additionally, Bank has a lien on the proceeds from the Schuparra Custody Account. * Secured Tax Claims, estimated at $102,000 * Priority Non-Tax Claims, estimated at $0 * General Unsecured Claims, estimated at $2 million. The General Unsecured Claims are primarily the claims of insiders and/or affiliates of Debtor, as well as the unsecured claim of Macina Bose Copeland and Associates, Inc. ("MBC") under an unsecured note between Debtor and MBC. * Convenience Class Claims, which are general unsecured claims $5,000 or less. Under the Plan, the Allowed Secured Claim of Bank of the Ozarks will be paid pursuant to the terms of a loan modification agreement. The Plan further contemplates that each holder of an Allowed General Unsecured Claim, who is not an Insider, will receive payment in full plus accrued interest at the higher of the contract rate or 5% per annum plus allowed attorneys' fees and expenses over a period not to exceed 24 months following confirmation of the Plan. In particular, the Plan modifies the Loan Agreement providing for payment in full of the Allowed Claim of the Bank of Ozarks, as memorialized in the Loan Modification Agreement, so that the maturity date of the Loan Agreement will become 4 years after the later of (i) the Effective Date of the Plan, or (ii) the date that the Claim of the Bank become an Allowed Claim. The Loan Modification Agreement also prescribes payment of interest at a floating rate equal to the 30 day LIBOR Rate plus 2.25%, with a floor of 5.5%. Administrative Expense Claims, estimated at $120,000, and Priority Tax Claims, estimated at $0, will be paid in full as allowed by the Court. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/RVTC_DiscStmSpt19.PDF About RVTC LP Rialto Village Town Center is a proposed $60 million to $70 million mixed-used development on 24 acres on the far Northwest Side in San Antonio, Texas. RVTC Limited Partnership fka Fair Prospects, L.P., owner of the Rialto Village Town Center, filed for Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 11-52240) on June 29, 2011. Judge Leif M. Clark presides over the case. Thomas Rice, Esq., at Cox smith Matthews Incorporated, represents the Debtor. The Debtor disclosed $12,158,560 in assets and $12,564,538 in liabilities as of the Chapter 11 filing. SHAMROCK-SHAMROCK INC: Court Terminates Coldwell Banker Services ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida granted Shamrock-Shamrock, Inc.'s request to terminate Coldwell Banker Surfcoast Realty, Inc., as its real property manager. Judge Arthur B. Briskman held that Coldwell Banker is terminated effective September 2, 2011. The Court directed Coldwell Banker to immediately turn over to the Debtor $35,000 in rents collected, and approximately $54,000 in deposits held for tenants. Coldwell Banker will provide the Debtor and the Court a full accounting of rents and deposits including: a list of tenants with deposits; deposit amounts for each tenant on the list; rents due, collected, and past due; and all amounts paid by Coldwell Banker to the Debtor within 14 days from September 9, 2011. The Court directed the Debtor to (a) circulate its Order to each current tenant to notify them of Coldwell Bankers' termination and (b) notify each tenant to whom and how they will pay rents in the future. Coldwell Banker was further directed to file with the Court an application for compensation seeking authorization for any compensation to be paid to it for services rendered through September 2, 2011. About Shamrock-Shamrock Daytona Beach, Florida-based Shamrock-Shamrock Inc. owns 70 parcels of Florida real property. It filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 11-07061) on May 10, 2011. Judge Arthur B. Briskman presides over the case. The Law Offices of Mickler & Mickler serves as bankruptcy counsel. The Company scheduled assets of $12,284,976 and liabilities of $17,021,201, owing on mortgages to a variety of lenders. SOLYNDRA LLC: Imperial Says 25 Potential Buyers Have Lined Up ------------------------------------------------------------- Tom Hals at Reuters reports that Eric Carlson, of Imperial Capital LLC, financial adviser of Solyndra LLC, said the Company had received active interest from 25 potential buyers for all or parts of its operations. Mr. Carlson said 14 would be considered strategic buyers, the rest financial buyers. Reuter notes, however, that no party has committed to act as an initial or "stalking horse" bidder. Bids are due in mid-November. As reported in the Troubled Company Reporter on Sept. 20, 2011, Imperial Capital is expected to negotiate a sale or financing. The firm would also put values on the Company either in liquidation or through reorganization. Imperial is to receive a monthly fee of $150,000. In addition there would be $1 million paid if Solyndra confirms a Chapter 11 plan. The fee is cut in half to $500,000 if the plan results from liquidation. If there is a sale, Imperial would earn a fee equal to the greater of $1 million or 2% of the purchase price. Should Solyndra attract new debt or equity capital, there would be a 1% fee for secured debt, 3% of subordinated debt, and 5% of any equity investment. About Solyndra LLC Founded in 2005, Solyndra LLC is a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. In the Chapter 11 cases, the Debtors are pursuing a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors are unable to identify any such potential buyers, an orderly liquidation of the Debtors' assets for the benefit of their creditors. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Solyndra LLC. Solyndra is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are Evergreen Solar and start-up Spectrawatt Inc., both of which filed in August, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. SONJA TREMONT-MORGAN: Hannibal Wants Chapter 7 for TV Star ---------------------------------------------------------- Eric Hornbeck at Bankruptcy Law360 reports that a film production company that won a $7 million judgment against a "Real Housewives of New York City"star sought Tuesday to have her Chapter 11 bankruptcy plan converted into a Chapter 7 liquidation because of her alleged financial mismanagement. Embattled reality TV star Sonja Tremont-Morgan sought bankruptcy protection in New York in November after Hannibal Pictures Inc. won a $7 million jury verdict in a suit claiming she broke a contract agreement by failing to provide the promised funding for "Fast Flash to Bang Time.? New York City-based Sonja Tremont-Morgan filed for Chapter 11 protection on Nov. 17, 2010 (Bankr. S.D.N.Y Case No. 10-16132). The Debtor disclosed $13,458,749 in assets and $19,839,501 in liabilities as of the Chapter 11 filing. SOUTH EDGE: Plan Confirmation Hearing to End Oct. 26 ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the confirmation hearing to approve the Chapter 11 plan for the 2,000-acre Inspirada residential development in Henderson, Nevada, began this week in U.S. Bankruptcy Court in Las Vegas. The confirmation trial continues will conclude with closing arguments on Oct. 26. Mr. Rochelle relates that the bankruptcy judge approved a settlement with Focus Group South LLC on Oct. 17. Focus was claiming a lien on about $26 million cash and opposed approval of the reorganization plan. Mr. Rochelle discloses that the reorganization plan for the project's owner, South Edge LLC, will implement a larger settlement negotiated in May by secured lenders with South Edge's Chapter 11 trustee, KB Home and other homebuilders who represented 92 percent of the ownership interests in the project. The project ultimately was to cost $1.25 billion and have 8,500 homes. The lenders were to provide $595 million in financing. Other financing includes $102 million in public bonds for improvements. About South Edge Las Vegas, Nevada-based South Edge LLC owns the Inspirada project, an uncompleted 2,000-acre residential development in Henderson, Nevada, about 16 miles (26 kilometers) southeast of Las Vegas. The eight owners of the project include an affiliate of KB Home, a 49% owner. Other owners are Coleman Toll LP with 10.5%, Pardee Homes Nevada Inc. with 4.9%, Meritage Homes with 3.5%, and Beazer Homes USA Inc. with 2.6%. JPMorgan Chase Bank, N.A., Credit Agricole Corporate and Investment Bank, and Wells Fargo Bank, N.A., filed an involuntary chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 10-32968) on Dec. 9, 2010, against South Edge, LLC. The petitioning creditors are part of a lender group that provided a $595 million credit. New York-based JPMorgan serves as lender and agent for the group. South Edge filed motions to dismiss the involuntary petition. The Court conducted a contested trial on Jan. 24 and 25, 2011, and Feb. 2 and 3, 2011. On Feb. 3, 2011, the Court entered an order for relief under Chapter 11 of the Bankruptcy Code against the Debtor and issued an order directing the appointment of a chapter 11 trustee. The United States Trustee appointed Cynthia Nelson to serve as Chapter 11 trustee on Feb. 20, 2011. The Court approved the appointment three days later. South Edge is represented by lawyers at Klee, Tuchin, Bogdanoff and Stern LLP, and The Schwartz Law Firm, Inc., as legal counsel. The Chapter 11 trustee also tapped Schwartzer & McPherson Law Firm as local counsel. Petitioning creditors JPMorgan Chase Bank, N.A., and Wells Fargo Bank, N.A., are represented by lawyers at Morrison and Foerster LLP; and Lewis and Roca LLP. Credit Agricole is represented by lawyers at Haynes and Boone LLP, and Jolley Urga Wirth Woodbury & Standish. SPRINT NEXTEL: Fitch Lowers Issuer Default Rating to 'B+' --------------------------------------------------------- Fitch Ratings has downgraded the ratings for Sprint Nextel Corporation and its subsidiaries as follows: Sprint Nextel Corporation (Sprint Nextel); -- Issuer Default Rating (IDR) to 'B+' from 'BB-'; -- Senior unsecured notes to 'B+/RR4' from 'BB-'. Sprint Capital Corporation; -- IDR to 'B+' from 'BB-'; -- Senior unsecured notes to 'B+/RR4' from 'BB-'. Nextel Communications Inc. (Nextel); -- IDR to 'B+' from 'BB-'; -- Senior unsecured notes to 'B+/RR4' from 'BB-'. The ratings for the unsecured credit facility at Sprint Nextel reflect the application of Fitch's recovery methodology. --Senior unsecured credit facility to 'BB/RR2' from 'BB-'. The Rating Outlook on Sprint Nextel and its subsidiaries is Negative. The rating downgrade reflects the increased credit risk, financially and operationally in the short to medium term, resulting from materially greater cash requirements associated with the iPhone and accelerated network vision plans. Consequently, financial leverage will increase significantly more than the previous ratings contemplated. Fitch expects leverage for Sprint to peak at approximately 5.0 times (x) during 2012 before an expected decline in the out years as the network modernization project progresses although certainty around timing and pace of any improvement is limited. Current leverage was approximately 3.3x at the end of the second quarter 2011. Fitch also remains concerned with refinancing risk and views Sprint Nextel's liquidity position as constrained despite the current high levels of cash. Significant cash requirements during the next two years will cause the company to materially draw down its cash levels. Fitch now expects deficit spending in excess of $3 billion in 2012 due to iPhone related costs and capital spending for its network modernization and LTE deployment. Sprint has indicated plans for $10 billion in capital spending in 2012 and 2013. The company's liquidity at the end of the second quarter 2011 was in excess of $5 billion, including $4.3 billion in cash. During the next three years, Sprint has $5.4 billion in debt maturities including $2.3 billion in 2012, $1.8 billion in 2013, and $1.4 billion in 2014. Fitch estimates Sprint's funding requirements will also be in excess of $5 billion in 2012. Consequently, Fitch believes Sprint needs to take steps to bolster its liquidity in the near term to remove this as a potential issue given all the execution and operational risk present. A failure to address the need for additional liquidity in a timely manner would result in a further ratings review. The lack of a longer-term agreement with Clearwire leaves a significant strategic void in Sprint's longer-term 4G spectrum strategy. In particular, the company has indicated that its current spectrum position is sufficient through 2014. Clearwire's spectrum would enable Sprint to fill capacity related hot spot areas in its urban cores. Fitch expects that while a growing sense of urgency exists between the two companies to find common ground for a longer-term agreement, Sprint and Clearwire have been at odds when viewing desired solutions. Absent a spectrum agreement, Fitch believes that Clearwire will have greater challenges in securing sufficient funding for its 4G/LTE plans. Likewise, Sprint would not have adequate spectrum to handle future capacity and bandwidth demands for its unlimited data plan users, which is currently a core operating strategy. Sprint's initial deployment of 4G/LTE will also use only 10 MHz of spectrum compared to more robust deployments with 20 MHz of spectrum by Verizon and AT&T. This will result in lesser performance relative to its peers. Longer term, Clearwire's spectrum would solve this problem. Consequently, Sprint will attempt to rely on its improved device lineup, unlimited value- priced plans, and improved brand image to maintain its competitive position. The current ratings have limited flexibility for execution missteps, weakened core operational results, significantly higher cash requirements or lack of expected benefits from the network modernization project. Clearwire also presents event risk to Sprint in the event of several circumstances. This could include Clearwire filing for bankruptcy, Sprint acquiring Clearwire or Sprint making an unexpected capital contribution to Clearwire. Fitch does not believe Sprint views the LightSquared agreement for spectrum hosting as a core 4G spectrum strategy given the significant risks and uncertainties facing LightSquared. This is strictly an opportunity to better leverage Sprint's network to drive incremental cash flow and gain access to cheaper capacity options than otherwise possible with its existing agreement with Clearwire. However, Fitch currently sees little value in this arrangement unless LightSquared clears significant regulatory hurdles within a relatively short time period. Sprint's $2.1 billion unsecured revolving credit facility expires in October 2013. As of the end of the second quarter 2011, the company had $1.2 billion in letters of credit outstanding, leaving $900 million of borrowing capacity. Fitch expects Sprint will need to negotiate an amendment to the credit facility to give the company adequate cushion relief as iPhone related losses would cause the company to breech the covenant at some point in 2012. Additionally, beginning in April 2012, the ratio will reduce to 4.25x, and further reduce to 4x in January 2013. Fitch conducts a customized analysis and assigns recovery ratings when an issuer's IDR is 'B+' or below, which is now the case for Sprint. This involves an estimation of post-default cash flow and applying a multiple to reflect the company's relative position within a sector. In Sprint's case, Fitch applied significant stresses to cash flow and the multiple value due to the current operational and financial risk. The senior unsecured credit facility benefits from an upstream senior unsecured guarantee from all material subsidiaries. Consequently, Fitch has assigned a 'BB/RR2' rating, reflecting expectations for superior recovery prospects under a bankruptcy scenario. For the remaining unsecured debt, the waterfall analysis yielded a 'B+/RR4' reflecting an average recovery for the unsecured debt at each of the subsidiaries and parent. SUNVALLEY SOLAR: Enters Into Photovoltaic Contract with Ken Vong ---------------------------------------------------------------- Sunvalley Solar, Inc,, on Oct. 6, 2011, entered into a Photovoltaic System Contract with Ken Vong Farms of Thermal, California. Under the Contract, the Company has been engaged to install a 220.43 kW-DC photovoltaic solar power system for an estimated total price of $991,935. In addition, the Company has agreed to provide certain warranties to the customer regarding workmanship, minimum nominal power outputs of the system, and other matters. The Company expects to begin work on the system in early 2012. A full-text copy of the Photovoltaic System Contract is available for free at http://is.gd/MDpIlP About Sunvalley Solar Sunvalley Solar, Inc., is a California-based solar power technology and system integration company. Since the inception of its business in 2007, the company has focused on developing its expertise and proprietary technology to install residential, commercial and governmental solar power systems. The Company's balance sheet at June 30, 2011, showed $3.88 million in total assets, $3.84 million in total liabilities and $36,619 total stockholders' equity. As reported in the TCR on April 8, 2011, Sadler, Gibb and Associates, LLC, in Salt Lake City, Utah, expressed substantial doubt about Sunvalley Solar's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company had losses from operations of $375,839 and accumulated deficit of $958,924. According to the Company, the success of its business plan during the next 12 months and beyond will be contingent upon generating sufficient revenue to cover the Company's costs of operations /or upon obtaining additional financing. SUNVALLEY SOLAR: Board OKs Entry Into SPA with Asher Enterprises ---------------------------------------------------------------- Sunvalley Solar, Inc.'s board of directors approved the Company's entry into a Securities Purchase Agreement with Asher Enterprises, Inc., and the issuance to Asher of a Convertible Promissory Note under the SPA in the amount of $75,000. The SPA and the Note are effective Sept. 23, 2011. The Note bears interest at an annual rate of 8%, with principal and interest coming due on June 27, 2012. The Note may be converted in whole or in part, at the option of the holder, to shares of the Company's common stock, par value $0.001, at any time following 180 days after the issuance date of the Note. The conversion price under the Note is 61% of the Market Price of the Company's common stock on the conversion date. For purposes of the Note, "Market Price" is defined as the average of the 3 lowest closing prices for the Company's common stock on the 10 trading days immediately preceding the conversion date. The number of shares issuable upon conversion is limited so that the Holder's total beneficial ownership of the Company's common stock may not exceed 4.99% of the total issued and outstanding shares. This condition may be waived at the option of the holder upon not less than 61 days notice. Upon conversion of the Note in whole or in part, the Company will be obligated to deliver the conversion stock to the holder within 3 business days of the Company's receipt of notice of conversion. Failure to timely deliver conversion stock will cause the Company to incur daily penalties. The conversion price will be subject to adjustment in the event of certain dilutive issuances of securities, distributions of stock or assets to shareholders, mergers, consolidations, and certain other events. Pre-payment of the Note will result in certain penalties depending on the time of pre-payment, and will not be allowed after 180 days. Additional covenants, representations, and warranties between the parties are included in the Note and the SPA. About Sunvalley Solar Sunvalley Solar, Inc., is a California-based solar power technology and system integration company. Since the inception of its business in 2007, the company has focused on developing its expertise and proprietary technology to install residential, commercial and governmental solar power systems. The Company's balance sheet at June 30, 2011, showed $3.88 million in total assets, $3.84 million in total liabilities and $36,619 total stockholders' equity. As reported in the TCR on April 8, 2011, Sadler, Gibb and Associates, LLC, in Salt Lake City, Utah, expressed substantial doubt about Sunvalley Solar's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company had losses from operations of $375,839 and accumulated deficit of $958,924. According to the Company, the success of its business plan during the next 12 months and beyond will be contingent upon generating sufficient revenue to cover the Company's costs of operations /or upon obtaining additional financing. SUPERIOR OFFSHORE: Plan Injunction Does Not Stop Suit v. Insurer ---------------------------------------------------------------- Triumph Marine, Inc. seeks to file a lawsuit for contractual defense and indemnity, nominally against Superior Offshore International, Inc. To file the lawsuit, Triumph seeks to have the plan injunction in Superior's bankruptcy case amended so that Triumph can sue to the extent of Superior's available insurance coverage. Triumph does not seek recovery of any damages directly from Superior. In an Oct. 19, 2011 Memorandum Opinion and Order, Bankruptcy Judge Marvin Isgur said modification or revocation of the plan would not be allowed under 11 U.S.C. Sec. 1127(b) or Sec. 1144. However, the plan injunction does not prevent Triumph from proceeding against Superior in name only. "[T]he Court recognizes that modification of the plan injunction is not necessary to allow Triumph to proceed nominally against Superior in order to collect insurance proceeds," Judge Isgur said, according to the ruling, available at http://is.gd/d3oPDgfrom Leagle.com. About Superior Offshore Headquartered in Houston Texas, Superior Offshore International Inc. (Nasdaq: DEEP) -- http://www.superioroffshore.com/-- provided subsea construction and commercial diving services to the offshore oil and gas industry. Superior Offshore sought Chapter 11 protection (Bankr. S.D. Tex. Case No. 08-32590) on April 24, 2008. The Debtor disclosed total assets of $67,587,927 and total liabilities of $54,359,884 in its Schedules. David Ronald Jones, Esq., and Joshua Walton Wolfshohl, Esq., at Porter & Hedges LLP, represented the Debtor as counsel. The U.S. Trustee for Region 7 appointed five creditors to serve on an Official Committee of Unsecured Creditors. Douglas S. Draper, Esq., at Heller Draper Hayden Patrick & Horn LLC, and Michael D. Rubenstein, Esq., at Liskow Lewis, represented the Committee as counsel. The company's chapter 11 plan of liquidation took effect in February 2009 and the United States Court of Appeals blessed the plan in December 2009. SWENSON BROS.: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Swenson Bros. Grain, L.L.C. 201 Railway Street Lane, SD 57356 Bankruptcy Case No.: 11-30065 Chapter 11 Petition Date: October 17, 2011 Court: U.S. Bankruptcy Court District of South Dakota (Central (Pierre)) Judge: Charles L. Nail, Jr. Debtor's Counsel: Thomas M. Tobin, Esq. TONNER TOBIN AND KING P.O. Box 1456 Aberdeen, SD 57402-1456 Tel: (605) 225-1000 E-mail: ttk@nvc.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its largest unsecured creditors does not contain any entry. The petition was signed by Darren Swenson, secretary. SWENSON BROTHERS: Case Summary & 8 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Swenson Brothers 39476 - 234th Street Woonsocket, SD 57385 Bankruptcy Case No.: 11-40823 Chapter 11 Petition Date: October 17, 2011 Court: U.S. Bankruptcy Court District of South Dakota (Southern (Sioux Falls)) Judge: Charles L. Nail, Jr. Debtor's Counsel: Thomas M. Tobin, Esq. TONNER TOBIN AND KING P.O. Box 1456 Aberdeen, SD 57402-1456 Tel: (605) 225-1000 E-mail: ttk@nvc.net Estimated Assets: Not Stated Estimated Debts: $10,000,001 TO $50,000,000 The Company's list of its eight largest unsecured creditors is available for free at: http://bankrupt.com/misc/sdb11-40823.pdf The petition was signed by Darren Swenson, partner. SWIPE-N-SHINE L.L.C.: Case Summary & Creditors List --------------------------------------------------- Debtor: Swipe-N-Shine L.L.C. 4832 S. Murray Boulevard Salt Lake City, UT 84123 Bankruptcy Case No.: 11-35020 Chapter 11 Petition Date: October 15, 2011 Court: U.S. Bankruptcy Court District of Utah (Salt Lake City) Judge: Joel T. Marker Debtor's Counsel: Matthew M. Boley, Esq. PARSONS KINGHORN HARRIS 111 E. Broadway, 11th Floor Salt Lake City, UT 84111 Tel: (801) 363-4300 Fax: (801) 363-4378 E-mail: mmb@pkhlawyers.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 14 largest unsecured creditors is available for free at: http://bankrupt.com/misc/utb11-35020.pdf The petition was signed by Brett A. Pace, member/manager. TELKONET INC: Three Directors Elected at Annual Meeting ------------------------------------------------------- Telkonet, Inc., held its Annual Meeting of Stockholders on Oct. 17, 2011. At the Annual Meeting, the stockholders elected . Anthony J. Paoni, Jason L. Tienor and William H. Davis as directors to serve for the ensuing year and until their successors are elected. The stockholders also approved the ratification of the appointment of Baker Tilly Virchow Krause, LLP, as the Company's independent registered public accounting firm for the year ended Dec. 31, 2011. About Telkonet Milwaukee, Wisconsin-based Telkonet, Inc. is a clean technology company that develops and manufactures proprietary energy efficiency and smart grid networking technology. The Company reported a net loss attributable to common stockholders of $1.77 million on $11.26 million of total revenue for the year ended Dec. 31, 2010, compared with net income attributable to common stockholders of $1.06 million on $10.52 million of total revenue during the prior year. The Company's balance sheet at June 30, 2011, showed $16.58 million in total assets; $4.18 million in total liabilities; $968,701 in redeemable preferred stock, Series A; $1.36 million in redeemable preferred stock, Series B; and $10.07 million in total stockholders' equity. RBSM LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. RBSM noted that the Company has incurred significant operating losses in current year and also in the past. TELLICO LANDING: Court Sets Nov. 4 Disclosure Statement Hearing --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Tennessee has scheduled a hearing for Nov. 4, 2011, to consider the approval of the explanatory disclosure statement filed by Debtor Tellico Landing, LLC, for its Chapter 11 Plan. The deadline to object to the disclosure statement is Oct. 28, 2011. As reported in the TCR on Oct. 17, 2011, the Debtor's Plan projects that over the next four to five years more than $22 million in lots and tracts could be sold at Rarity Pointe, using new pricing and a new marketing effort. The Plan is based on court approval of a loan worth up to $2.75 million from an entity called Heritage Solutions LLC. In a separate filing last month, Tellico said it owes principal of roughly $6.7 million to WindRiver Investments LLC, and needs $2.75 million in new funding to reorganize. The filing said Tellico would use certain of the funds for "additional marketing efforts to aggressively market lots" at the project. A budget filed by the Debtor indicated that $1.1 million would go to advertising costs, an estimated $750,000 for county taxes and a $350,000 interest reserve for WindRiver. A copy of the disclosure statement, as filed on Oct. 4, 2011, is available for free at: http://bankrupt.com/misc/tellico.DS.dkt48.pdf About Tellico Landing Tellico Landing, LLC, based in Maryville, Tennessee, is engaged in the development and sale of an upscale residential community along and near Tellico Lake known as "Rarity Pointe?. The Company filed for Chapter 11 bankruptcy (Bankr. E.D. Tenn. Case No. 11-33018) on June 27, 2011. The case has been assigned to Judge Marcia Phillips Parsons. Thomas Lynn Tarpy, Esq., of Hagood Tarpy & Cox PLLC, represents the Debtor. The Debtor scheduled $40,444,352 in assets and $8,532,455 in liabilities. The petition was signed by Michael L. Ross, its chief manager. The United States Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed in the Tellico case because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. TH PROPERTIES: Objects Ch.7 Conversion; Exit Plan in the Works -------------------------------------------------------------- Crissa Shoemaker DeBree at phillyBurbs.com reports that TH Properties asked a bankruptcy court judge to deny a request that the company liquidate its assets to repay creditors, saying it's nearing the end of its reorganization. According to the report, the Company said it worked "tirelessly and diligently" to reorganize and exit bankruptcy during a period of "unparalleled economic turmoil." U.S. Trustee Roberta DeAngelis is asking the Bankruptcy Court to convert the case to Chapter 7. Ms. DeBree says the trustee said in court filings that there's no hope the company will be able to restructure its debt. THP is "administratively insolvent," the trustee said, with more than $2.9 million in post-bankruptcy debt. The report says THP acknowledged that it, in some cases had to surrender collateral to its creditors, but also pointed out that it's come to terms with some of its largest lenders, including Bank of America, so it can continue building. In those cases, it's using the proceeds from the sale of completed houses to repay its debts. Ms. DeBree notes THP said it just completed settlement negotiations with Wilmington Trust, another of its largest lenders. Under that deal, THP would complete seven units in the Northgate housing development in Upper Hanover. Wynstone Development Group, a company owned by THP founders Tim and Todd Hendricks but not involved in the bankruptcy filing, would develop the Wynstone project in Upper Hanover, and use proceeds to repay bankruptcy-related debt. The report relates that THP has yet to file a plan of reorganization. It said the plan has been done "for some time," but will be rewritten to reflect the Wilmington Trust agreement. The company said the plan will also detail how it will pay its post-bankruptcy debt. About T.H. Properties Philadelphia-based T.H. Properties, L.P., has 12 working developments in Pennsylvania and New Jersey. Timothy Hendricks and his brother Todd started the firm in 1992. T.H. Properties and its affiliates filed for Chapter 11 bankruptcy protection on April 30, 2009 (Bankr. E.D. Pa. Case No. 09-13201). Northgate Development Company, LP (Bankr. E.D. Calif. Case No. 09-____) was among the affiliates that filed. Barry E. Bressler, Esq., at Schnader, Harrison, Segal & Lewis, LLP, and Natalie D. Ramsey, Esq., at Montgomery McCracken Walker and Rhoads LLP, represent the Debtors in their restructuring efforts. T.H. Properties estimated assets between $100 million and $500 million, and debts between $10 million and $50 million in its Chapter 11 petition. A creditors' committee has been appointed in the Debtors' chapter 11 proceedings. Affiliate Wynstone Development Group, LP (Bankr. E.D. Calif. Case No. 10-17863) filed for Chapter 11 protection on Sept. 14, 2010. It estimated assets and debts of $1 million to $10 million in its Chapter 11 petition. TODD BRUNNER: Creditors Investigate Financial Records ----------------------------------------------------- Cary Spivak of the Milwaukee (Wis.) Journal Sentinel reports that creditors are scouring the records of Todd Brunner to determine what exactly he owns and how much those assets are worth. The report says Mr. Brunner said that Julie Sweet, a former secretary, ruined his records but Ms. Sweet said she returned all of his records in good condition. Jonathan Goodman, Esq., Mr. Brunner's bankruptcy lawyer, said his client denies ever receiving the records from Ms. Sweet. The report relates that Ms. Sweet acknowledged she did not return the records in a typical business style. Instead of handing them to Mr. Brunner, Ms. Sweet said she placed his "less important" records and paperwork in a couple of large plastic storage boxes, taped them shut and left them at the door of his home, which also serves as his office. Todd Brunner filed for Chapter 11 protection (Bankr. E.D. Wis. Case No. 11-29064) on June 5, 2011. He bought foreclosed properties throughout southeastern Wisconsin, turning them into rental units. Mr. Brunner faces nearly $20?million in debt. This is his second Chapter 11 filing. TRAVELPORT HOLDINGS: Appoints G. Baiera & R. Buccarelli to Board ---------------------------------------------------------------- Gavin Baiera and Richard Buccarelli were appointed to Travelport Limited's Board of Directors. Mr. Baiera was also appointed to the Audit Committee, Compensation Committee and Executive Committee of the Company's Board of Directors. Mr. Buccarelli is the representative on the Company's Board from One Equity Partners, one of the Company's equity owners, and Mr. Baiera is one of the representatives on the Company's Board from the Company's new shareholders, pursuant to the Shareholders' Agreement the Company and its direct and indirect parent companies entered into on Oct. 3, 2011, in connection with the Company's previously disclosed debt restructuring. About Travelport Holdings Travelport Holdings is the direct parent of Travelport Limited, is a broad-based business services company and a leading provider of critical transaction processing solutions to companies operating in the global travel industry. With a presence in 160 countries and approximately 3,500 employees, Travelport is comprised of the global distribution system (GDS) business, which includes the Galileo and Worldspan brands and its Airline IT Solutions business, which hosts mission critical applications and provides business and data analysis solutions for major airlines. Travelport also owns approximately 48% of Orbitz Worldwide (NYSE: OWW), a leading global online travel company. Travelport is a private company owned by The Blackstone Group, One Equity Partners, Technology Crossover Ventures, and Travelport management. Travelport Holdings Limited is a holding company with no direct operations. Its principal assets are the direct and indirect equity interests it holds in its subsidiaries, including Travelport Limited. Travelport Limited, a direct subsidiary of Travelport Holdings Limited, reported net income of $283 million on $1.061 billion of of net revenue for the six months ended June 30, 2011, compared with net income of $1 million on $1.056 billion of net revenue for the same period of 2010. Results for the six months ended June 30, 2011, includes gain of $312 million, net of tax, from the sale of sale of the Gullivers Travel Associates ("GTA") business to Kuoni Travel Holdings Limited ("Kuoni"). The sale was completed on May 5, 2011. Loss from continuing operations was $4 million during the six months ended June 30, 2011, compared with a loss of $2 million for the same period of 2010. Travelport Limited's balance sheet at June 30, 2011, showed $3.680 billion in assets, $4.136 billion in total liabilities, and a stockholders' deficit of $456 million. * * * As reported by the TCR on Oct. 10, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on travel services provider Travelport Holdings Limited (Travelport Holdings) and indirect subsidiary Travelport LLC (Travelport) to 'SD' (selective default) from 'CC'. The downgrades follow the implementation of a capital restructuring, which was necessary because of the Travelport group's high leverage, weak liquidity, and the upcoming maturity of its $693 million (as of end-June 2011) PIK loan in March 2012. "According to our criteria, we view this restructuring as a distressed exchange and tantamount to a default (see 'Rating Implications Of Exchange Offers And Similar Restructurings, Update,' published May 12, 2009, on RatingsDirect on the Global Credit Portal)," S&P related. TRIBUNE CO: Judge 'Within Days' of Ruling on Chapter 11 Plan ------------------------------------------------------------ Dow Jones' Daily Bankruptcy Review reports that a bankruptcy judge said he will rule "within days" on whether he will confirm Tribune Co.'s Chapter 11 plan or a rival plan from big creditor Aurelius Capital Management. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Two competing Chapter 11 plans are being pursued in the Chapter 11 cases of Tribune. One plan is being co-proposed by the Debtors, the Official Committee of Unsecured Creditors, Oaktree Capital Management, L.P., Angelo Gordon & Co., L.P. and JPMorgan Chase Bank, N.A. A second plan is being pursued by Aurelius Capital Management LP, on behalf of its managed entities; Deutsche Bank Trust Company Americas, in its capacity as successor indenture trustee for certain series of senior notes; Law Debenture Trust Company of New York, in its capacity as successor indenture trustee for certain series of senior notes; and Wilmington Trust Company, in its capacity as successor indenture for the PHONES Notes. Judge Kevin J. Carey has not issued a ruling on the plan. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENTERTAINMENT: Parties Reach Deal on "Tropicana" Name --------------------------------------------------------------- Parties to the adversary complaint initiated by Icahn Agency Services LLC, et al., against Tropicana Las Vegas, Inc., et al., stipulate to the dismissal, with prejudice, of the complaint pursuant to the terms of the settlement agreement, dated Aug. 9, 2011, which became effective on Sept. 28, 2011, and Rule 41(a)(1)(A)(ii) of the Federal Rules of Civil Procedure. The settlement agreement resolves numerous pending matters before the U.S. Bankruptcy Court for the District of Delaware and the U.S. District Court for the District of Nevada and provides for the mutual release of all claims by and between the Icahn Plaintiffs and the Tropicana LV Defendants related to the "TROPICANA" trademarks. The Icahn Plaintiffs are Icahn Agency Services LLC; Icahn Partners LP; Icahn Partners Master Fund LP; Icahn Partners Master Fund II LP; Icahn Partners Master Fund III LP; Tropicana Entertainment Inc.; and New Tropicana Holdings, Inc. The Tropicana LV Defendants are Tropicana Las Vegas, Inc. and Hotel Ramada of Nevada, LLC. Originally filed in August 2010, the Icahn Plaintiffs, under the Adversary Complaint, sought to enjoin the Tropicana LV Defendants from asserting in a Nevada state court action that they are the owners of the "TROPICANA" and "TROP" trademarks and service marks. By September 2010, the Defendants sought dismissal of the Complaint. A year after the Complaint was filed, the Tropicana LV Defendants reached a trademark settlement agreement with the OpCo Debtors, the OpCo-Related Entities, and the Liquidating LandCo Debtors relating to the ownership of the "TROPICANA" and "TROP" trademarks. The Bankruptcy Court approved the Trademark Settlement in mid-September 2011. About Tropicana Entertainment Tropicana Entertainment Inc. is a publicly reporting company that, along with its affiliates, owns or operates nine casinos and resorts in Indiana, Louisiana, Mississippi, Nevada and New Jersey. The Company owns approximately 6,000 rooms, 9,000 slot positions and 250 table games. In addition, the Company owns a development property in Aruba. The company is based in Las Vegas, Nevada. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08- 10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana obtained confirmation from the Bankruptcy Court of a reorganization plan. On April 29, 2009, non-debtor units of the OpCo Debtors, designated as the New Jersey Debtors -- Adamar of New Jersey, Inc., and its affiliate, Manchester Mall, Inc. -- filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to effectuate a sale of the Atlantic City Resort and Casino to a group of Investors-led by Carl Icahn. Judge Judith H. Wizmur presides over the cases. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Effective March 8, Tropicana Entertainment successfully emerged from the Chapter 11 reorganization process as an Carl Icahn-owned entity. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have obtained approval of a separate Chapter 11 plan. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represented the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have merged into Adamar of NJ In Liquidation, LLC. The merger and name change is in accordance with an Amended and Restated Purchase Agreement, which governs the sale and transfer of the operations of the Tropicana Casino and Resort - Atlantic City, including substantially all of the New Jersey Debtors' assets, to Tropicana Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana AC Sub Corp., free and clear of any and all liens, claims and encumbrances. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Tropicana Entertainment Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TSI ACQUISITION: Moody's Withdraws 'Caa1' Corp. Family Rating ------------------------------------------------------------- Moody's Investors Service has withdrawn all the ratings for TSI Acquisition, LLC (TSI) following its acquisition by Hunting PLC (unrated) and the full repayment of TSI's rated debt. The ratings withdrawn are the Caa1 Corporate Family Rating, B3 senior secured first lien rating, and the Caa3 secured second lien rating. RATINGS RATIONALE The principal methodology used in rating TSI was the Global Oilfield Services Rating Methodology published in December 2009. Headquartered in Pampa, TX, TSI designs, manufactures and distributes down-hole perforating equipment and related products, as well as well-logging instrumentation, for use by oilfield services companies. TURKPOWER CORP: Delays Filing of Quarterly Report on Form 10-Q -------------------------------------------------------------- TurkPower Corporation said it was unable to, without unreasonable effort or expense, prepare and provide certain accounting and documentation work to the Company's independent accountants early enough to allow for the completion of their review of the Company's financial statements prior to the prescribed due date. Thus, the Company requires additional time to properly complete and file its Form 10-Q for the fiscal quarter ended Aug. 31, 2011. The Company expects to file within the extension period. About TurkPower Corporation New York-based TurkPower Corporation (formerly Global Ink Supply Co.) was incorporated on Nov. 4, 2004, in Delaware. On May 11, 2010, Global Ink Supply Co. changed its name to TurkPower Corporation. On Dec. 23, 2009, the Company entered into the consulting and service operations business, offering domestic and international clients consulting services. The Company acts as a full-service operator for wind, hydro, solar, and geothermal energy parks in Turkey. The Company also generates revenue by entering into agreements with other entities to provide consulting services to clients in the energy market. The Company reported a net loss of $5.86 million on $64,308 of revenue for the year ended May 31, 2011, compared with a net loss of $511,149 on $215,050 of revenue during the prior year. The Company's balance sheet at May 31, 2011, showed $1.69 million in total assets, $2.79 million in total liabilities, all current, and a $1.09 million total stockholders' deficit. MaloneBailey LLP, in Houston, Texas, noted that the Company has incurred losses from operations and has a working capital deficit as of May 31, 2011, which raises substantial doubt about its ability to continue as a going concern. UNITED RENTAL: Moody's Affirms 'B2' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service affirmed United Rentals' (URI) CFR and PDR at B2. In a related action, Moody's downgraded the company's senior unsecured notes to B3 from B2 and affirmed all other outstanding instrument ratings upon the execution of the company's new unrated $1.8 billion senior secured credit facility. The new facility refinances its current $1.36 billion facility, the ratings of which are being withdrawn. The ratings outlook is stable. RATINGS RATIONALE The affirmation of the B2 CFR reflects the expectation that rental demand will continue to improve over the next 12 months due in part to economic factors that favor renting vs. buying of equipment by the company's customers and due to positive GDP growth. The affirmation incorporates Moody's expectation that free cash flow will be limited by growth in capital expenditures to address increased demand and the operational need to update aging fleet. Moody's also anticipates the return on assets (ROA) to continue to improve slowly. The one notch downgrade of the company's $500 million senior unsecured notes due 2016 and its $500 million senior unsecured notes due 2019 results from almost $450 million in additional secured commitments under the new $1.8 billion credit facility that now rank senior to them. URI's liquidity rating remains unchanged at SGL-3, reflecting Moody's belief that the company will maintain an adequate liquidity profile over the next twelve months. Moody's expects that operating cash flow generation should be sufficient to fund the company's normal operating requirements. The company has been able to sell assets and generate positive cash flow through working capital release during the downturn. The stable outlook reflects Moody's belief that the company is well positioned in the current rating category with enough flexibility in the rating to address the still difficult economy and the low anticipated free cash flow available to reduce debt due to intermediate term fleet reinvestment needs. Moody's Vice President, Paul Aran stated that "so long as the company does not meaningfully increase its reinvestment plans from currently anticipated levels by Moody's, the leverage metrics are not anticipated to change materially over the intermediate term." The rating outlook or ratings could strengthen if positive revenue growth coincided with improving operating margins and improved return on assets. Positive ratings traction could develop were the company's pretax income to average assets to improve to above 3%, EBITA/Interest above 1.3 times, debt/EBITDA below 4.5 times and improving (all ratios per Moody's standard accounting adjustments), with at least an adequate liquidity profile. The stable outlook could be under pressure if EBITA/Interest falls below 1.3 times, or the company generates negative free cash not driven by an increase in capital expenditures due to greater demand. The ratings may be downgraded if the company's operating margin was anticipated to contract, or if EBITA/Interest was anticipated to fall below 1.0 times on a projected basis. Debt/EBITDA trending towards 5.0 times could also result in a ratings downgrade. Downgrades: Issuer: United Rentals (North America), Inc. -- Senior Unsecured Regular Bond/Debenture, Downgraded to B3, LGD4, 62% from B2, LGD4, 57% LGD Adjustments: Issuer: United Rentals (North America), Inc. -- Senior Subordinated Regular Bond/Debenture, changed to LGD5, 87% from LGD5, 86% -- Senior Subordinated Conv./Exch. Bond/Debenture, changed to LGD5, 87% from LGD5, 78% -- Multiple Seniority Shelf, changed to LGD4, 62% from LGD3, 47% Withdrawals: Issuer: United Rentals (North America), Inc. -- Senior Secured Bank Credit Facility, Withdrawn, previously rated Ba1, LGD2, 15% The principal methodology used in rating URI was the Global Equipment and Automobile Rental Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. United Rentals, Inc. is a holding company that conducts its operations through its wholly owned subsidiary, United Rentals (North America), Inc. and its subsidiaries (collectively "URI"). URI is the world's largest equipment rental company operating approximately 539 rental locations in the United States (48 states; serving 99 of the 100 largest metropolitan areas) and each Canadian province. Revenues are derived primarily from equipment rentals, sales of used rental equipment, sales of new equipment, and contractor supplies sales and service. LTM revenues thorough June 30, 2011 totaled $2.4 billion. US ROUTE 23: Plan Violates Absolute Priority Rule ------------------------------------------------- Bankruptcy Judge Charles M. Caldwell denied confirmation of US Route 23 Supply LLC's Second Amended Plan of Reorganization, and converted the Debtor's bankruptcy proceeding to Chapter 7, with an immediate cessation of operations and appointment of an interim trustee. Creditors Roberta and William Hendershot, and Famous Enterprises, Inc., objected to confirmation. US Route 23 Supply LLC is a retail and wholesale plumbing, heating, and cooling parts supply company headquartered in Circleville, Ohio, with miscellaneous businesses in pool and barbecue sauce sales. Michael Grashel is the sole member and owner of US Route 23 Supply, which filed for Chapter 11 relief (Bankr. S.D. Ohio Case No. 10-62903) on Oct. 29, 2010, to stop the Hendershots from executing on a state court pre-judgment attachment. At the time of filing, the Debtor disclosed $598,000 in total debts, and currently the Debtor has claims against it totaling $1,325,515. The Debtor's Plan creates seven classes: (1) administrative expenses; (2) governmental priority claims; (3) the impaired Kingston secured claim; (4) the impaired Toyota secured claim for a Toyota Tundra; (5) an impaired secured Toyota Motor Corporation Claim on a Toyota forklift; (6) impaired unsecured non-priority creditors; and (7) the interest of the equity security holder. Under the proposed Plan, administrative and secured creditors are paid in full and unsecured creditors would receive a 15% dividend on their claims through monthly payments of $673.57 over 60 months. To secure payment for the unsecured creditors, the Plan proposes that the Debtor execute a first mortgage on unencumbered property in favor of a nominated member of the class, holding that mortgage in trust until the entire class is paid in full. The Debtor owns a pole-barn and the surrounding acreage in Circleville, Ohio, which is unencumbered and serves as the Debtor's headquarters. This property was purchased for $285,000 in 2008, was valued in the schedules at $200,200; and the Debtor testified that he received purchase offers at $135,000. The Plan also provides that if the Debtor must contribute new value to retain his ownership interest, Mr. Grashel is prepared to contribute $23,500 in commitments from friends and relatives. The amended disclosure statement provides the names of the seven individuals who are evidently willing to provide between $1,000 and $5,000 each to help Mr. Grashel retain his ownership interests. The Plan, however, provides no guarantee that the funds will be paid. Although the impaired Toyota Motor Credit Corporation B-3 class voted to accept the Plan, the unsecured creditor C-1 class voted against it. In their objection, Famous Enterprises and the Hendershots argued that the Plan: -- fails the absolute priority rule under 11 U.S.C. Sec. 1129(b) because Mr. Grashel retains his equity interest in the Debtor's unencumbered property while unsecured creditors receive less than full repayment. -- is not feasible, violating 11 U.S.C. Sec. 1129(a)(11). -- does not satisfy the best interest of creditors as required by 11 U.S.C. Sec. 1129(a)(7). -- was not proposed in good faith, breaching 11 U.S.C. Sec. 1129(a)(3). Counsel for Famous Enterprises and the Hendershots both preferred Chapter 7 liquidation. The Court noted that although the Debtor recognized the necessity of dealing with the absolute priority rule, it failed to satisfy its requirements. Under the Plan, Mr. Grashel, the Debtor's sole equity holder, will retain his interest post-confirmation. In comparison, unsecured creditors will receive $40,414.20 in cash distributions, a dividend far less than 100%. As unsecured creditors would receive less than the full amount of their claims, Mr. Grashel must provide new value to retain his interest. In response, the Debtor proposes to (1) grant a security interest in its unencumbered property to a member of the unsecured creditor class; and (2) provide up to $23,500 of capital contributed by friends and family. The Court finds and concludes that the proposed capital contributions and mortgage are not reasonably equivalent to the value retained by Mr. Grashel. The Court noted that after substantial consummation of the Plan, unsecured creditors would receive up to $63,914, while Mr. Grashel retains the unencumbered property worth, at a minimum, $135,000. The mortgage only ensures payment; it does not provide unsecured creditors with any increased percentage distribution on their claims. In addition, there is no guarantee that the proposed capital contributions would be made. In sum, the Debtor has failed to provide new value that is reasonably equivalent to the interest retained by equity. As a result, the Plan violates the absolute priority rule, and cannot be confirmed. The Court also pointed out that the Debtor's records show that there are significant assets that may yield a meaningful recovery for creditors. Conversion to Chapter 7 provides an orderly liquidation and distribution of assets. On the other hand, dismissal results in a scramble to collect, which is an anathema to the purpose of bankruptcy -- ensuring a fair and orderly distribution of a debtor's assets. A copy of the Court's Oct. 14, 2011 Memorandum Opinion is available at http://is.gd/3Astw5from Leagle.com. A copy of the Debtor's petition is available at no charge at http://bankrupt.com/misc/ohsb10-62903.pdf VAN CHASE: Case Converted to Ch. 7; 341 Meeting on Nov. 4 --------------------------------------------------------- The U.S. Trustee for Region 19 will convene a meeting of creditors in the Chapter 7 case of Van Chase LLC on Nov. 4, 2011, at 1:00 p.m. The meeting will be held at Mesa City Commissioners Public Hearing Room, 544 Rood Avenue, in Grand Junction, Colorado. Charles F. McVay, United States Trustee, through counsel, asked the U.S. Bankruptcy Court for the District of Colorado, to dismiss the Chapter 11 case, or convert the Debtor's case to one under Chapter 7 of the Bankruptcy Code. The case was converted to Chapter 7 on Sept. 28, 2011. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Van Chase Aspen, Colorado-based Van Chase, LLC, develops and sells luxury residences. The Debtor filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 10-31555) on Aug. 24, 2010. John D. LaSalle, Esq., at Wright & LaSalle, in Aspen, Colorado, assists the Debtor in its restructuring effort. According to its schedules, the Debtor disclosed $26,528,200 in total assets and $15,150,964 in total liabilities as of the Petition Date. The United States Trustee has not appointed a trustee, an examiner or an unsecured creditors committee in Debtor's case. VAN CHASE: Files Schedules of Assets and Liabilities ---------------------------------------------------- Van Chase LLC filed with the Bankruptcy Court for the District of Colorado its schedules of assets and liabilities as a Chapter 7 debtor, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $2,761,000 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $7,072,687 E. Creditors Holding Unsecured Priority Claims $95,756 F. Creditors Holding Unsecured Non-priority Claims $9,987,700 ----------- ----------- TOTAL $2,761,000 $17,156,143 About Van Chase Aspen, Colorado-based Van Chase, LLC, is engaged in the business of developing and selling luxury residences. The Debtor filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 10- 31555) on Aug. 24, 2010. John D. LaSalle, Esq., at Wright & LaSalle, in Aspen, Colorado, assists the Debtor in its restructuring effort. The United States Trustee has not appointed a trustee, an examiner or an unsecured creditors committee in Debtor's case. Charles F. McVay, United States Trustee, through counsel, asked the Court to dismiss the Chapter 11 case, or convert the Debtor's case to one under Chapter 7 of the Bankruptcy Code. The case was converted to Chapter 7 on Sept. 28, 2011. VILLA D'ESTE: Section 341(a) Meeting Scheduled for Nov. 3 --------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of creditors of Villa D'Este LP on Nov. 4, 2011, at 2:00 p.m. The meeting will be held at RM 105, 21051 Warner Center Lane, Woodland Hills, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Villa D'Este Villa D'Este LP, in Los Angeles, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-21488) on Sept. 28, 2011. Judge Victoria S. Kaufman presides over the case. The Law Office of Elaine D. Etingoff -- elaineetingoff@gmail.com -- serves as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Phillip Ram, operating manager of general partner. Affiliates that previously filed separate Chapter 11 petitions are: Norman Salter (Bankr. C.D. Calif. Case No. 09-11653) on Feb. 17, 2009; and Phillip Ram, aka Dilip K. Ram (Bankr. C.D. Calif. Case No. 09-10969) on Jan. 21, 2009. Secured lender Bank of America is represented by Patricia H. Lyon, Esq., and Celine Mui, Esq. -- phlyon@frenchandlyon.com and cmui@frenchandlyon.com -- at French & Lyon PC. WESTERN COMMUNICATIONS: Has Final OK to Use Bofa Cash Collateral ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon authorized in a final order dated Oct. 5, 2011, Western Communications, Inc., to use cash collateral in which Bank of America, N.A., claims a security interest, to pay costs and expenses incurred by Debtor in the ordinary course of its business, consistent with a budget. The Debtor will provide BofA with updated and extended budgets on Nov. 15, 2011, for the period from Dec. 1, 2011, through Feb. 28, 2012, and on Feb. 15, 2012, for the period from March 1, 2012, through May 31, 2012. The Debtor's authority to use cash collateral, without further order of the Court issued after notice and hearing or the written consent of BofA, will automatically expire upon the earlier of (a) the Effective Date of a plan of reorganization confirmed in this case; (b) May 31, 2012, at 11:59 p.m.; or (c) regardless of whether Debtor has expended the entire amount set forth in the budget, the failure by Debtor to comply with any provision of this order, which failure is not remedied within 5 business days after delivery of notice of such failure by BofA to Debtor. As adequate protection for any cash collateral used by Debtor, BofA is granted, pursuant to Sections 361(1) and 363(e) of the Bankruptcy Code, a Replacement Lien to secure an amount of BofA's prepetition claims equal to the extent of any diminution in value of BofA's collateral as of Aug. 23, 2011 (the "Petition Date"). The Replacement Lien will attach to all property and assets of the Debtor and its estate, whether now owned or hereinafter acquired by the Debtor, and all products, proceeds, rents, issues or profits thereof that were either subject to BofA's security interests or liens as of the Petition Date or acquired as a result of Debtor's use and/or expenditure of cash collateral. The Replacement Lien will be in addition to all other security interests and liens securing BofA's allowed secured claim in existence on the Petition Date. With respect to the collateral encumbered by prepetition liens in favor of Bo A, the Replacement Lien will have the same priority as BofA's prepetition liens in any property or assets acquired by Debtor postpetition of the same nature or type. With respect to any other property acquired by Debtor postpetition to which the Replacement Lien applies, the priority of the Replacement Lien will be determined as of the date of entry of this order. To the extent the Replacement Lien proves to be inadequate as adequate protection, as further partial adequate protection BofA will have allowed administrative claims under Section 503(b) of the Bankruptcy Code, which claims will have priority over, and be senior to, all other administrative claims against Debtor pursuant to Section 507(b) of the Bankruptcy Code. Debtor is authorized to use cash collateral to pay, on or before Oct. 31, 2011, United States Trustee's fees payable pursuant to 28 U.S.C. Section 1930 for the period from the Petition Date through Sept. 30, 2011. A copy of the final cash use order is available for free at: http://bankrupt.com/misc/westerncommunications.dkt80.pdf About Western Communications Western Communications, Inc., is a family-owned corporation founded by renowned editor Robert W. Chandler. Headquartered in Bend, Oregon, Western Communications is a small market newspaper, niche publishing, printing and digital media company with publications spread throughout Oregon (six publications) and California (two publications). The Company produces and publishes the Bend Bulletin, the Baker City Herald, the La Grande Observer, the Redmond Spokesman, the Brookings Curry Coastal Pilot, the Crescent City Daily Triplicate, and the Sonora Union Democrat. The Company also publishes the Central Oregon Nickel Ads in Bend, Oregon. Western Communications filed for Chapter 11 bankruptcy (Bankr. Ore. Case No. 11-37319) on Aug. 23, 2011. Albert N. Kennedy, Esq., and Michael W. Fletcher, Esq., at Tonkon Torp LLP, in Portland, Oregon, serve as the Debtor's bankruptcy counsel. The Zinser Law Firm, P.C., and Davis Wright Tremaine LLP serve as the Debtor's special purpose counsel. The petition was signed by Gordon Black, president. The Company disclosed $31,254,096 in assets and $19,068,329 in liabilities as of the Chapter 11 filing. The U.S. Trustee said that an official committee of unsecured creditors has not been appointed because an insufficient number of persons holding unsecured claims against Western Communications have expressed interest in serving on a committee. WESTERN COMMUNICATIONS: Files Schedules of Assets and Liabilities ----------------------------------------------------------------- Western Communications, Inc., filed with the U.S. Bankruptcy Court for the District of Oregon amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $11,180,000 B. Personal Property $20,075,376 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $18,485,167 E. Creditors Holding Unsecured Priority Claims $465,763 F. Creditors Holding Unsecured Non-priority Claims $117,399 ----------- ----------- TOTAL $31,255,376 $19,068,329 A copy of the amended schedules is available for free at: http://bankrupt.com/misc/westerncommunications.dkt86.pdf About Western Communications Western Communications, Inc., is a family-owned corporation founded by renowned editor Robert W. Chandler. Headquartered in Bend, Oregon, Western Communications is a small market newspaper, niche publishing, printing and digital media company with publications spread throughout Oregon (six publications) and California (two publications). The Company produces and publishes the Bend Bulletin, the Baker City Herald, the La Grande Observer, the Redmond Spokesman, the Brookings Curry Coastal Pilot, the Crescent City Daily Triplicate, and the Sonora Union Democrat. The Company also publishes the Central Oregon Nickel Ads in Bend, Oregon. Western Communications filed for Chapter 11 bankruptcy (Bankr. D. Ore. Case No. 11-37319) on Aug. 23, 2011. Albert N. Kennedy, Esq., and Michael W. Fletcher, Esq., at Tonkon Torp LLP, in Portland, Oregon, serve as the Debtor's bankruptcy counsel. The Zinser Law Firm, P.C., and Davis Wright Tremaine LLP serve as the Debtor's special purpose counsel. The petition was signed by Gordon Black, president. The Company disclosed $31,254,096 in assets and $19,068,329 in liabilities as of the Chapter 11 filing. The U.S. Trustee said that an official committee of unsecured creditors has not been appointed because an insufficient number of persons holding unsecured claims against Western Communications have expressed interest in serving on a committee. XODTEC LED: Delays Filing of Quarterly Report on Form 10-Q ---------------------------------------------------------- Xodtec LED, Inc., notified the U.S. Securities and Exchange Commission that it will be late in filing its Quarterly Report on Form 10-Q for the period ended Aug. 31, 2011. The Company said that the compilation, dissemination and review of the information required to be presented in the Form 10-Q for the relevant period has imposed time constraints that have rendered timely filing of the Form 10-Q impracticable without undue hardship and expense to the Company. The Company undertakes the responsibility to file that report no later than five days after its original prescribed due date. About Xodtec LED Headquartered in Jhonghe City, Taiwan, Xodtec LED, Inc. is a Nevada corporation incorporated on November 29, 2006, under the name Sparking Events, Inc. On June 28, 2009, the Company's corporate name was changed to "Xodtec Group USA, Inc." and on May 17, 2010, the Company's corporate name was changed to "Xodtec LED, Inc." The Company, through its subsidiaries, is engaged in the design, marketing and selling of advanced lighting solutions which are designed to use less energy and have a longer life than traditional incandescent, halogen, fluorescent light sources. The Company's wholly-owned subsidiaries, Xodtec Technology Co., Ltd.; Targetek Technology Co., Ltd.; UP Technology Co., Ltd., are organized under the laws of the Republic of China (Taiwan). The Company also owns a 35% interest in Radiant Sun Development S.A., a company organized under the laws of the Independent State of Samoa. The Company reported a net loss of $1.59 million on $1.03 million of revenue for the year ended Feb. 28, 2011, compared with a net loss of $2.23 million on $991,645 of revenue during the prior year. The Company's balance sheet at May 31, 2011, showed $1.51 million in total assets, $4.37 million in total liabilities and a $2.86 million total stockholders' deficit. As reported by the TCR on June 20, 2011, Simon & Edward, LLP, in City of Industry, California, expressed substantial doubt about the Company's ability to continue as a going concern, following the results for the year ended Feb. 28, 2011. The independent auditors noted that the Company has incurred significant operating losses, has serious liquidity concerns and may require additional financing in the foreseeable future. Z TRIM HOLDINGS: Inks Manufacturing Agreement with Aveka Group -------------------------------------------------------------- Z Trim Holdings, Inc., signed a manufacturing contract with Aveka Nutra Processing, LLC, part of the Aveka Group. The agreement will provide Z Trim with a partner for future manufacturing initiatives. The contract will initially increase monthly production of Z Trim's dietary fiber product from current levels of approximately 30,000 pounds per month by an additional 100,000 pounds per month, then, over time, to as much as 1,000,000 pounds per month. Aveka plans to produce Z Trim products in Waukon, Iowa, and expects to invest over $3 million in a facility. "Z Trim's relationship and previous achievements with Aveka provide management with the utmost confidence that this agreement will initially allow us to quadruple our current production capacity to 130,000 pounds per month, while lowering manufacturing costs," stated Steve Cohen, CEO of Z Trim Holdings. "We believe that Z Trim will be able to leverage Aveka's key industry relationships and strong R&D capabilities in order to mass commercialize our industry-changing technologies. With production expected to begin in the second or third quarter 2012, at 100,000 pounds per month and with the ability to reach 1 million pounds per month, we believe that Z Trim will become an attractive large- scale supplier to global consumer goods companies." Z Trim Holdings had previously engaged Aveka to assist in further optimization of the manufacturing process and to develop plans to protect and expand Z Trim's intellectual property. The agreement included research and development initiatives aimed at establishing and expanding the functional performance of the insoluble and soluble fibers derived from Z Trim Holdings' existing patented processes. "We look forward to helping Z Trim Holdings, Inc., become a major global supplier of multi-functional ingredients," said Aveka founder, Dr. Willie Hendrickson. "Z Trim's products are truly born of a disruptive technology, which will change the way many companies make use of agricultural by-products." About Z Trim Mundelein, Ill.-based Z Trim Holdings, Inc., is a functional food ingredient company which provides custom product solutions that help answer the food industry's problems. Z Trim's revolutionary technology provides value-added ingredients across virtually all food industry categories. Z Trim's all-natural products, among other things, help to reduce fat and calories, add fiber, provide shelf-stability, prevent oil migration, and add binding capacity -- all without degrading the taste and texture of the final food products. The Company reported a net loss of $10.91 million on $903,780 in total revenues for the year ended Dec. 31, 2010, compared with a net loss of $12.21 million on $559,910 of revenue during the prior year. The Company's balance sheet at June 30, 2011, showed $6.50 million in total assets, $16.09 million in total liabilities, $1.52 million in total commitment and contingencies, and a $11.11 million total stockholders' deficit. As reported in the Troubled Company Reporter on April 12, 2010, M&K, CPAs, PLLC, in Houston, expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted that the Company has suffered recurring losses from operations and requires additional financing to continue in operation. The Company said that for the year ended Dec. 31, 2009, it did not have enough cash on hand to meet its current liabilities or to fund on-going operations beyond one year. As a result, the report of independent registered public accounting firm included an explanatory paragraph in respect to the substantial doubt of the Company's ability to continue as a going concern. The Company's cash on hand as of Dec. 31, 2010 is $2,327,013. Since June 2010, the Company brought in $8,170,988 in funds through the sale of Preferred Stock, and our investors converted approximately $8,100,000 of convertible debt into common stock. In addition to the fundraising efforts, the Company intends to make capital expenditures necessary to increase its capacity and to reduce its cost per pound. Due to the expected increase in production capacity, the Company anticipates its sales for fiscal year ended Dec. 31, 2011 will approximately double those of fiscal year ended Dec. 31, 2010. Although the Company has recurring operating losses and negative cash flows from operating activities, the Company has positive working capital and believe it has enough cash on hand to satisfy current obligations. If the Company is unsuccessful in its plans to increase revenue and capacity, the impact may have a material impairment on its ability to continue as a going concern. * 'And' Means 'Either' in Home Mortgage-Loan Dispute ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in New Orleans penned an opinion on Oct. 17 interpreting the meaning of the word "and." The court concluded that "and" means "either or both." As a result, individual bankrupts are liable to pay more toward home mortgage lenders' attorney's fees. In an unsigned opinion, the Fifth Circuit in New Orleans concluded that the proper meaning was "either or both." The case is In re Countrywide Home Loans Servicing LP v. Velazquez (In re Velazquez), 10-20609, U.S. Court of Appeals for the Fifth Circuit (New Orleans). * Proposed Law Looks to End Delaware's "Bankruptcy Capital" Status ------------------------------------------------------------------ American Bankruptcy Institute reports that a bipartisan bill sponsored by leaders of the House Judiciary Committee may strip Delaware of its status as the premier venue for U.S. bankruptcy cases, costing the state's economy an estimated $100 million a year. * Strategic Value Raises $750MM for New Special Situations Fund --------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Strategic Value Partners raked in $750 million so far for its second special situations fund that will target European distressed credit, said a person familiar with the situation. * McDonald Hopkins Law Firm Expands Miami Office ------------------------------------------------ Amy B. Spagnole has joined McDonald Hopkins LLC as Of Counsel in the Intellectual Property Practice of the business advisory and advocacy law firm. She is based in the firm's Miami office, which opened in April 2011 and is the firm's second office in Florida. Spagnole has extensive experience in strategic portfolio development, protection and enforcement of trademarks, copyrights and domain names, merchandise licensing, and e-commerce transactions. Representing clients across a broad range of industries, Spagnole develops cost-effective intellectual property registration and protection strategies designed to maximize the return on investment related to brand management. During her career, Spagnole has served as a partner in a prominent New England law firm and was the vice president and general counsel for a sports entertainment company. She has also served as an adjunct faculty member at Suffolk University Law School. A graduate of Suffolk University Law School with a J.D., magna cum laude, Spagnole has a Bachelor of Arts degree from Syracuse University. She is licensed to practice law in the states of Florida, Massachusetts and Rhode Island. "We are excited to have Amy Spagnole join our Miami office. She adds her extensive knowledge and insight to our firm's national intellectual property team and will be a tremendous asset as we grow to serve the South Florida business community," said Raquel A. "Rocky" Rodriguez, managing member of the McDonald Hopkins' Miami office. Intellectual Property Practice The Intellectual Property Practice at McDonald Hopkins provides a broad range of legal services to clients in all matters involving patents, copyrights, trademarks, trade dress, trade secrets, intellectual property procurement, and enforcement. About McDonald Hopkins McDonald Hopkins -- http://www.mcdonaldhopkins.com/-- is a business advisory and advocacy law firm with an 80-year history. The firm is focused on business law, litigation, business restructuring and bankruptcy, intellectual property, healthcare, and estate planning. McDonald Hopkins has offices in Chicago, Cleveland, Columbus, Detroit, Miami and West Palm Beach. The president of McDonald Hopkins is Carl J. Grassi. * BOOK REVIEW: Hospital Turnarounds - Lessons in Leadership ----------------------------------------------------------- Editors: Terence F. Moore and Earl A. Simendinger Publisher: Beard Books Softcover: 244 pages Price: $34.95 Review by Henry Berry Hospital Turnarounds - Lessons in Leadership is a compilation of twelve essays on the many approaches that have been taken to resuscitate hospitals in distressed situations. Most of the essayists are CEOs or presidents of hospitals or healthcare organizations, and their stories are all different and compelling in their own way. The hospitals differ in their size, marketplace, facilities, and services offered. The causes of their distress vary and the strategies that were used to overcome them are wide-ranging. All-in-all, it makes for an engaging collection of success stories. The authors have extensive experience in the healthcare system, and nearly all have held top leadership posts in several public and private hospitals. Most importantly, all have been involved in successful turnarounds at some time in their careers. Two of the authors are from the field of marketing, which can play a significant role in hospital turnarounds. The number of troubled hospitals rises and falls over time, depending on many factors, including the state of the U.S. economy. There are always some hospitals in a distressed situation or teetering close to it. In spite of the fact that healthcare is a basic need in U.S. society, hospitals are constantly vulnerable to financial problems because of competition, changing medical technology, new approaches to healthcare from improved drugs and public awareness, and medical malpractice lawsuits. Any or all of these factors can be financially crippling and, even if the financial impact is minimized, a hospital's reputation can be damaged. Like any other business organization, hospitals can also run into difficulty because of poor management or labor problems. The first and last chapters, "Introduction" and "Turnarounds: An Epilogue," respectively, are written by the co-editors. The balance of the chapters contain first-hand accounts of hospital turnarounds, with the authors asked by the co-editors to "document the role of the various publics." The authors do this, offering their assessment of the role of the board of directors, medical staff, management team, volunteers, and other relevant "publics" in the respective turnarounds. A common thread in this book is that the import and activities of these publics were different in every turnaround. Each turnaround had to address its own grievous, overriding problem or set of problems. Each turnaround had its own cast of characters who brought different backgrounds and skills to the turnaround. As a result, each path taken to overcoming the distressed situation was different. No matter what the cause or causes of a hospital's distressed situation, in nearly every case the problems were first realized when a financial problem became apparent. Thus, turnarounds are inevitably focused on improving a hospital's financial situation. As one of the authors notes, "A turnaround is most often the result of increased revenues and decreased expenses." The approach taken by some of the authors was to focus on "[increasing] revenues to improve the operating margins of their organizations." Many other turnarounds were accomplished by focusing on reducing expenses. Invariably, however, a combination of both was needed and working toward these paired objectives required a new strategic thinking and the development of operational capabilities that prepared the hospital for long-term survival in continually changing market conditions. One author's prescription for success was, "Upward communication, fluidity of organizational structure, a reduction of unnecessary bureaucratic rules and policies, and ambitious yet realistic goals and objectives." These practices are present in healthy companies and usually missing in distressed companies. Implementation of these business practices is essential for a hospital to return to a favorable financial footing. Another author addressed "organizational burnout," which must be corrected if a hospital is to survive. Burnout is evident when "the sum of an organization's actual output is decreasing over time when compared with its potential output." The challenge facing hospital executives and turnaround specialists is to reduce -- and ideally, eliminate -- the gap between actual and potential output. The smaller the gap, the more efficient, productive, and healthy the organization. These are just a few of the observations and lessons provided in this collection of essays. Through engaging first-person accounts of rescue stories, the reader learns what a turnaround is all about, how to diagnose a distressed situation, and how to formulate a strategy that implements specific corrective actions. Terence F. Moore has been involved in the Michigan hospital system as President and CEO of Mid-Michigan Health, Board Member of the Michigan Hospital Association, and Chair of the East Michigan Hospital Association. He is also a fellow of the American College of Healthcare Executives. Earl A. Simendinger is a professor of management at the College of Business at the University of Tampa who for 20 years was a hospital administrator. Also a fellow in the American College of Healthcare Executives, he has written many books and articles on management and organizational development. ********* 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 ***