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/raid1/www/Hosts/bankrupt/TCR_Public/111028.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 28, 2011, Vol. 15, No. 299 Headlines 4KIDS ENTERTAINMENT: Wants Until Feb. 3 to Propose Chapter 11 Plan ALLEGHENY NATURAL: Has Stipulation Ending Involuntary Case ALTON SQUARE: Marquette Realty is Mall's New Owner AMBAC FINANCIAL: IRS Move Toward Settlement Over Tax Bill AMR CORP: Ramp Workers Reach Tentative Labor Deal AMGANESETT FAMILY: Court Affirms SARE Ruling AMTRUST FINANCIAL: Court Approves Chapter 11 Plan ASTORIA GENERATING: S&P Puts 'CCC+' Rating on Loan on Watch Dev. BARKI LLC: CFTC Gets Judgment in $38 Million Ponzi Scheme BROADSTRIPE LLC: Wins OK to Send Ch. 11 Plan for Creditors Vote BROOKE CORP: Clawback Suit Remains in Bankruptcy Court CAGLE'S FARMS: Lowenstein Sandler Retained as Creditors' Counsel CAGLE'S FARMS: Gets Shares Delisting Notice From NYSE Amex CELL THERAPEUTICS: Incurs $16.6-Mil. Net Loss in Sept. Quarter CELL THERAPEUTICS: To Sell up to $100 Million of Securities CENTRAL BUILDING: Files Schedules of Assets and Liabilities CENTRAL BUILDING: Court OKs Avion Holding as Restructuring Agent CHARLESTON ASSOCIATES: Dec. 7 Disclosure Statement Hearing Set CHINA TEL GROUP: Signs Agreement to Provide a 4G Network in China CHRYSLER GROUP: Lightstone Defends Extended Stay Ch. 11 Filing CIMA LLC: Files New Schedules of Assets and Liabilities CLINTON COURT: Court OKs Employment of Robinson Brog as Counsel COMMONWEALTH ADVISORS: Nine Investment Funds File for Bankruptcy CROATAN SURF: 1st Lien Lender Can't Vote Junior Lender's Claim CRYSTAL CATHEDRAL: To Sell Assets to Chapman University for $50MM DAIRY PRODUCTION: 3 Debtors File Joint Reorganization Plan DALLAS STARS: IRS Objects to Firm's Plan to Exit Bankruptcy EAST HARLEM: Seeks to Employ Lamonica Herbst as Attorneys EDWARD DEETS: Seeks to Employ Jeffrey Servin as Attorney ELLIPSO INC: Judge Cuts Butzel Long's Fees Over Non-Disclosure ENCOMPASS GROUP: Sankaty Advisors Takes Over Firm ENER1 INC: Common Shares to be Delisted from NASDAQ EVERGREEN SOLAR: Meeting of Creditors Continued Until Nov. 3 FNB UNITED: Completes Acquisition of Bank of Granite FORESIGHT ENERGY: S&P Puts B- Corp. Credit Rating on Watch Dev. GELT PROPERTIES: Court OKs Cohen and Forman as Special Counsel GENTA INC: One Holdings Discloses 9.9% Equity Stake GENTA INC: White Flame Discloses 9.9% Equity Stake GSC GROUP: Black Diamond Files Plan, Offers 31% to 43% Recovery GSC GROUP: Nov. 18 Confirmation Hearing on Trustee Plan Set H&H BAGELS: Faces Possible Eviction From New York Plant HARRISBURG, PA: Covanta Energy Objects to Ch. 9 Bankruptcy Filing HARRISBURG, PA: Mayor Seeks Help to Avert Takeover HAWAIIAN TELCOM: Moody's Assigns 'B1' Corporate Family Rating HEALTHWAYS INC: S&P Lowers Counterparty Credit Rating to 'BB-' HEALTHSPRING INC: Moody's Reviews Ba1 IFS Rating for Upgrade INNKEEPERS USA: Exits Ch. 11 After Sale to Cerberus ISTAR FINANCIAL: Sells All Interest in Oak Hill Advisors JER/JAMESON MEZZ: Jameson Ch. 11 Will Not Impact Operations JER/JAMESON MEZZ: 2nd Unit With Colony Debt Seeks Chapter 11 KINGSBURY CORP: Seeks to Hire Donnelly Penman as Inv. Banker KOREA TECHNOLOGY: Examiner Wins Court Approval to Hire Counsel LOS ANGELES DODGERS: McCourt, Selig Dodgers Showdown Postponed LA JOLLA: Has 76.5 Million Outstanding Common Shares LAKE TAHOE: Files Fourth Amended Version of Reorganization Plan LE-NATURE'S INC: Convicted CEO Ordered to Repay $661 Million LEHMAN BROTHERS: Completes Innkeepers Transaction; Receives Payout LEHMAN BROTHERS: Joint Chapter 11 Plan Now Supported by Creditors LOCATION BASED TECH: Names G. Gaines Marketing Chief LODGENET INTERACTIVE: Reports $2MM Net Income in Sept. 30 Quarter LOS ANGELES DODGERS: Fox Backs MLB's Plan to Halt Exclusivity LTS NUTRACEUTICALS: To Buy All Outstanding Shares of Biocalth LYONDELL CHEMICAL: Directors Fire Back at Stock Option Clawback M&M STONE: Section 341(a) Meeting Continued Until Nov. 14 M&M STONE: U.S. Trustee Appoints 4-Member Creditors' Panel MARKWEST ENERGY: Moody's Assigns Ba3 Rating to $500MM Sr. Notes MARKWEST ENERGY: Fitch to Rate New Sr. Unsecured Notes at 'BB' MEDIA GENERAL: S&P Downgrades Corporate Credit Rating to 'CCC+' MICHAEL SCOTT CHANDLER: Court Refuses to Reverse Plan Ruling MONEYGRAM INT'L: Inks 5th Supplemental Indenture with Goldman MSR RESORT: Wants Continued Access to Cash Until June 30 NATIONAL LAMPOON: Judge Refuses to Appoint Receiver NCOAT INC: No Meaningful Distribution to Unsecured Creditors NORTEL NETWORKS: Seeks to Pay $4.4MM Bonuses to Key U.S. Employees NORTHCORE TECHNOLOGIES: To Provide Tech. for Irish Gov't. HSE NUSCALE POWER: $30-Million Deal Frees Firm From Receivership PETROLEUM & FRANCHISE: BDO USA to Audit 2009 and 2010 Returns PHOENIX GENESIS: In Receivership Due to Inability to Pay Debts PMI MORTGAGE: Downgraded to 'Caa3' by Moody's, Outlook Negative PRESIDENTIAL REALTY: Class B Shares Delisted from NSYE Amex PURE BEAUTY: Section 341(a) Meeting Scheduled for Nov. 10 PURE BEAUTY: U.S. Trustee Appoints 7-Member Creditors' Panel PURSELL HOLDINGS: Plan Has 10% Dividend for Unsec. Creditors RCLC INC: Liquidating Joint Plan Declared Effective Oct. 25 RCLC INC: Joint Plan of Liquidation Effective RCLC INC: Notices Termination of Registration of Common Stock RCS CAPITAL: Court Approves Michael Carmel as Bankruptcy Counsel RCS CAPITAL: Court Sets Nov. 30 as Claims Bar Date RONALD RUNYEON: Court Wants Plan Modified to Reflect New Valuation ROTHSTEIN ROSENFELDT: Insurers, Others Object to Consolidation SCI REAL ESTATE: Court Extends Plan Filing Deadline to Dec. 11 SEA TRAIL: Waccamaw Bank Wants Adequate Protection for Cash Use SEA TRAIL: Taps RE/MAX as Broker to Sell Kings Trail Property SEA TRAIL: Wants Sale of Lot 54 to Linda J. Bertschy Approved SEA TRAIL: Wants to Hire Stubbs & Perdue as Attorney SEMGROUP CORP: Faruqi & Faruqi Probes Firm on Asset Sale SENESCO TECHNOLOGIES: Gets Notice of Non-Compliance From NYSE Amex SHAMROCK-SHAMROCK: Files Amended Schedules of Assets & Liabilities SHELDRAKE LOFTS: Oct. 31 Hearing on Exclusivity Set SIRIUS XM: S&P Upgrades Corporate Credit Rating to 'BB' SPANGLER GROUP: Seattle Investor Lost Millions of Clients' Money SPECIALTY PRODUCTS: Seeks to Move Plan Filing Deadline to Nov. 30 STERLING SHOES: Gets Toronto Stock Exchange Delisting Notice SUGARLEAF TIMBER: Plan Outline is Inadequate, Farm Credit Says SUMMER VIEW: Can Hire Cirrus Asset Management as Asset Manager TELECONTINUITY INC: Ch. 7 Trustee Settles With WWC Capital Fund TETON AIR: Judge Pappas Dismisses Chapter 11 Case TIMBER HOLDINGS: Coastal Forest Buys Firm Out of Receivership TR SHADOW: Court Sets Nov. 30 Claims Bar Date TRAILER BRIDGE: Inks Two Forbearance Agreements with Wells Fargo TRAILER BRIDGE: S&P Lowers Corporate Credit Rating to 'SD' TRANS ENERGY: Amends 1st Qtr. Financials to Add Expense TRENTON LAND: Hearing on Case Dismissal Plea Adjourned to Nov. 2 TWIN CITY: Wants Access to Associated Bank's Cash Collateral TWIN CITY: U.S. Trustee Protests Request to Employ Ravich Meyer TWIN CITY: Wants to Hire Froehling Anderson as Accountant TWIN CITY: Wants to Hire Ravich Meyer as Attorney TX BLACKHORSE: Seeks to Employ Thomas Greene as Counsel URBAN BRANDS: Court Confirms Plan of Liquidation US FT: S&P Assigns Preliminary 'B' Corporate Credit Rating VAN HUNTER: Frost National's Plan Outline Hearing Set for Nov. 14 WASHINGTON LOOP: ROBI1956 Has Limited Objection to Plan Outline WASHINGTON MUTUAL: Equity Panel Can Hire Frank Partnoy as Adviser WAVE HOUSE: Seeks to Borrow $500,000 Postpetition Financing WAVE HOUSE: Seeks Approval of East West Bank Settlement Agreement WILLIAM SWITZER: Hearing on Ch. 15 Case Dismissal Set for Nov. 2 WIRELESS AGE: Finalizes Settlement Deal With Newlook Industries * Ex-Goldman Director Rajat Gupta Charged in Insider Case * General Atlantic Buys Minority Stake in Oak Hill Advisors * TPG Markets Latest $1.5 Billion Special Situations Fund * BOOK REVIEW: Performance Evaluation of Hedge Funds ********* 4KIDS ENTERTAINMENT: Wants Until Feb. 3 to Propose Chapter 11 Plan ------------------------------------------------------------------ 4Kids Entertainment, Inc., et al., ask the U.S. Bankruptcy Court for the Southern District of New York to extend their exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Feb. 3, 2012, and April 3, 2012, respectively. About 4Kids Entertainment New York-based 4Kids Entertainment, Inc., dba 4Kids, is an entertainment and media company specializing in the youth oriented market, with operations in these business segments: (i) licensing, (ii) advertising and media broadcast, and (iii) television and film production/distribution. The parent entity, 4Kids Entertainment, was organized as a New York corporation in 1970. 4Kids filed for Chapter 11 to protect its most valuable asset -- its rights under an exclusive license relating to the popular Yu-Gi- Oh! ("YGO") series of animated television programs -- from efforts by the licensor, a consortium of Japanese companies, to terminate the license and force 4Kids out of business. 4Kids, along with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims and notice agent. BDO Capital Advisors, LLC, is the financial advisor and investment banker. EisnerAmper LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids Entertainment disclosed $78,397,971 in assets and $86,515,395 in liabilities as of the Chapter 11 filing. On July 8, 2011, Tracy Hope Davis, the U.S. Trustee for Region 2, appointed three members to the official committee of unsecured creditors in the Chapter 11 cases. Hahn & Hessen LLP serves as counsel to the Committee. The Committee tapped Epiq Bankruptcy Solutions LLC as its information agent. ALLEGHENY NATURAL: Has Stipulation Ending Involuntary Case ---------------------------------------------------------- Allegheny Natural Resources, Inc., asks the U.S. Bankruptcy Court for the Western District of Pennsylvania to approve a stipulation dismissing its instant involuntary chapter case. The stipulation was entered between Allegheny and the petitioning creditors -- Aven Gas & Oil, Inc., Interstate Gas Marketing, Inc., and Graig Berland. The terms of the stipulation include, among other things: 1. Dismissal of the involuntary case is granted without prejudice to the rights of the Petitioning Creditors to refile an involuntary case if the reputed Debtor would be found in material breach of the terms of the settlement agreement; 2. in the event that a party would request the Court to enforce the agreement, or take any other action with respect thereto, the request will be filed under seal and accompanied by a copy of the agreement; 3. the Court will retain jurisdiction over the case for the purpose of enforcing the provisions of the agreement, and the parties specifically consent to the jurisdiction of the Court. TriEnergy OIl & Gas, Inc., indicated that it would not oppose the settlement. Terry L. Graffius, Esq., in behalf of AWS, Inc., a respondent, consented to the stipulated order dismissing case. The parties set a Nov. 2, 2011 hearing at 10:00 a.m., on the approval of a stipulation dismissing the case. AWS Inc is represented by: Terry L. Graffius, Esq. LEVENTRY, HASCHAK & RODKEY, LLC 1397 Eisenhower Boulevard Richland Square III, Suite 202 Johnstown, PA 15904 Tel: (814) 266-1799 About Allegheny Natural Resources Based in Sewickley, Pennsylvania, Allegheny Natural Resources Inc. operates 66 gas wells in Pennsylvania and has more than 1,200 acres under lease in Jefferson County. Allegheny was named in an involuntary Chapter 11 bankruptcy petition (Bankr. W.D. Pa. Case No. 11-24265) on July 5, 2011. The petitioning creditors Aven Gas & Oil, Inc., Interstate Gas Marketing, Inc., and Craig Berland allege they are owed $1 million each. The petitioning creditors are represented by Robert O. Lampl, Esq. -- rol@lampllaw.com -- as bankruptcy counsel. Judge Judith K. Fitzgerald presides over the case. The Court has designated H. James Adams as principal operating officer of the Debtor. Allegheny is represented by Robert X. Medonis, Esq. ALTON SQUARE: Marquette Realty is Mall's New Owner -------------------------------------------------- Linda N. Weller at The Telegraph reports that the bank that lent Coyote Alton Mall LLC money to purchase Alton Square, then subsequently filed a foreclosure lawsuit against the Texas company, now owns the shopping center. Marquette Realty Capital LLC of Minneapolis announced Sept. 27 that it took ownership of the 634,181-square-foot shopping center that had been in receivership since last spring, according to the report. With a bank as new owner, city officials said there are good aspects and uncertain ones regarding the immediate future of the 33-year-old mall, the report notes. Alton Square Mall is being operated by Cassidy, Turley, Midwest, a commercial real estate firm. Alton Square Mall is a 630,000 square-foot regional center anchored by Macy's, Sears, JCPenney, and 60 other shops and restaurants. As reported in the Troubled Company Reporter on March 15, 2011, Alton Square Mall, in Alton, Illinois, was sent to receivership and under the direction of a St. Louis company as a result of a foreclosure lawsuit filed by a lending institution. The owners, Coyote Alton Mall, agreed to the receivership while the suit goes forward. The lender, Marquette Capital Realty, claims in its suit that the owners borrowed about US$26.2 million when they bought the mall in August 2007. AMBAC FINANCIAL: IRS Move Toward Settlement Over Tax Bill --------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Ambac Financial Group Inc. is getting closer to striking a deal with the Internal Revenue Service, which has served it with a tax bill that could potentially topple the bond insurer's prospects for reorganization. Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMR CORP: Ramp Workers Reach Tentative Labor Deal ------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that in a long-awaited positive development on the labor front, American Airlines said it and the Transport Workers Union reached a tentative agreement on a new four-year labor contract covering more than 10,000 baggage handlers and ramp workers. According to the report, the two had reached a similar accord in May 2010, but the union later decided not to put it out to an employee vote. American Airlines, Inc., and its parent AMR Corporation are based in Fort Worth, Texas. 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. AMGANESETT FAMILY: Court Affirms SARE Ruling -------------------------------------------- Bankruptcy Judge Alan S. Trust denied the motion of debtors Amagansett Family Farm Inc., Amagansett Commons, LLC, and Ocean Vine, Inc., seeking emergency reconsideration of the Court's determination that each of the Debtors is a "single asset real estate" debtor, as defined in 11 U.S.C. Sec. 101(51B). The Debtors each own of three contiguous parcels of undeveloped real property, commonly referred to as 531, 551, and 561 Montauk Highay, Amagansett, New York. The Property serves as collateral for a first mortgage loan held by Madison Realty Capital, L.P. The Loan is secured by mortgages creating liens against the Property. On Sept. 9, 2011, more than 90 days after the petitions were filed, the Debtors filed a motion asking the Court to determine the amount of the Madison secured claim under 11 U.S.C. Section 506 based on the value of the Property, and requested an evidentiary hearing. The Debtors allege in their Valuation Motion that the Property is worth $6 million, and that Madison's Loan has an unpaid balance of $17 million. On Sept. 14, 2011, Debtors filed a motion to extend the exclusivity period under Section 1121, seeking an extension of time to solicit acceptances of a plan until the first business day that is 60 days following entry of a final Court order establishing the amount of Madison's secured claim. As of the filing of the Exclusivity Motion, Debtors had not yet filed a plan. On Sept. 15, 2011, Madison filed an omnibus motion for relief from the automatic stay and for a declaration of the Court regarding a determination that each Debtor is a single asset real estate debtor. At the Sept. 26 Hearing, the issue was raised as to whether the Debtors should be designated as SARE debtors. The Debtors indicated that they did not intend to oppose the SARE determination, but argued that they had some form of agreement with Madison regarding the date when that determination would take effect and/or when payments would have to commence for lift stay purposes under Sec. 362(d)(3). Madison denied the existence of such an agreement. The Court determined that each of the Debtors meet the definition of SARE under Sec. 101(51B) and orally ruled that the Debtors be determined to be SARE debtors, effective as of Sept. 26. Nearly a month later, on Oct. 20, 2011, the Debtors sought reconsideration of the Court's ruling. The Debtors' Motion does not challenge the propriety of this determination, but rather asks that the Court delay the effective date of the SARE ruling until the first business day that is 60 days after the Court's final determination as to the value of Debtors' Property, and asks that the Court stay its Sept. 26, 2011 ruling. "Based on Debtors' own motion, if they were not aware of their SARE status on the petition date, certainly by August 11, 2011, Debtors were aware that they likely would be determined to be SARE debtors. August 11, 2011, was within 90 days of the date when the order for relief was entered in this case. Therefore, Debtors had notice and abundant opportunity to seek an extension of the 90-day deadline for cause as provided in Sec. 362(d)(3), and to moot the possible effect of Sec. 362(d)(3) that occurs 30 days after the SARE determination, but Debtors chose not to do so. The fact that Debtors conducted negotiations to attempt to resolve a deadline imposed on them by Congress is certainly laudable; but seeking relief which the Court is not empowered to grant, and doing so at the last minute, are not," Judge Trust said in denying the Debtors' request. A copy of the Court's Oct. 25, 2011 decision and order is available at http://is.gd/yobXBCfrom Leagle.com. Amagansett Family Farm Inc., Amagansett Commons, LLC, and Ocean Vine, Inc., filed for Chapter 11 protection (Bankr. E.D.N.Y. Case Nos. 11-73928 to 11-73930) on May 31, 2011. John P. Campo, Esq., at Troutman Sanders LLP, represents the Debtors. Each of the Debtors estimated $1 million to $10 million in assets and $10 million to $50 million in debts. The petitions were signed by Richard J. Principi, Jr., managing member. AMTRUST FINANCIAL: Court Approves Chapter 11 Plan ------------------------------------------------- Ian Thoms at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Pat Morgenstern-Clarren approved AmFin Financial Corp.'s restructuring plan Tuesday, paving the way for the fourth-largest bank taken over by the Federal Deposit Insurance Corp. in 2009 to exit bankruptcy. Law360 relates that AmFin, which collapsed during the 2008 financial crisis, won widespread support for its restructuring from creditors, including its largest, the FDIC, and during a hearing Tuesday. The Debtors believe that the AmFin Plan is the best feasible plan for restructuring the Debtors, providing for the orderly disposition of their assets and providing the greatest recovery to creditors and equity interest holders. According to the Disclosure Statement, the AmFin Plan incorporates a proposed compromise and settlement regarding the holders of the Senior Notes Claims. Specifically, the terms of the Plan provides that holders of senior notes will have allowed unsecured claims in an agreed aggregate amount of $100.8 million and that the holders of subordinated notes will have an allowed unsecured claims in an agreed aggregate amount of $53.6 million. About AmTrust Financial AmTrust Financial Corp. (PINK: AFNL) was the owner of the AmTrust Bank. AmTrust was the seventh-largest holder of deposits in South Florida, with $4.7 billion in deposits and 21 branches. In November 2008, the Office of Thrift Supervision issued a cease and desist order requiring AmTrust to improve its capital ratios. AmTrust Financial, together with affiliates that include AmTrust Management Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ohio Case No. 09-21323) on Nov. 30, 2009. The debtor subsidiaries include AmFin Real Estate Investments, Inc., formerly AmTrust Real Estate Investments, Inc. (Case No. 09-21328). G. Christopher Meyer, Esq., Christine M. Piepont, Esq., and Sherri L. Dahl, Esq., at Squire Sanders & Dempsey (US) LLP, in Cleveland, Ohio; and Stephen D. Lerner, Esq., at Squire Sanders & Dempsey (US) LLP, in Cincinnati, Ohio, serve as counsel to the Debtors. Kurtzman Carson Consultants serves as claims and notice agent. Attorneys at Hahn Loeser & Parks LLP serve as counsel to the Official Committee of Unsecured Creditors. AmTrust Management estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. AmTrust Bank was not part of the Chapter 11 filings. On Dec. 4, 2009, AmTrust Bank was closed by regulators and the Federal Deposit Insurance Corporation was named receiver. New York Community Bank, in Westbury, New York, assumed all of the deposits of AmTrust Bank pursuant to a deal with the FDIC. ASTORIA GENERATING: S&P Puts 'CCC+' Rating on Loan on Watch Dev. ---------------------------------------------------------------- Standard & Poor's Ratings Services's 'CCC+' ratings on Astoria Generating Co. Acquisitions LLC's (Astoria Gen) $430 million ($141 million outstanding) first-lien term loan due 2013 and its $100 million first-lien ($63 million drawn as of June 30, 2011) working capital facility due 2012 remain on CreditWatch with developing implications. "In addition, our 'CCC-' rating on the $300 million ($300 million outstanding) second-lien term bank loan due 2013 remains on CreditWatch with developing implications," S&P related. The recovery rating of '1' on first-lien credit facilities is unchanged, indicating that lenders can expect a very high (90% to 100%) recovery of their principal in a default scenario. The recovery rating of '5' on the second-lien credit facility is unchanged, indicating that lenders can expect a modest recovery (10% to 30%) if a payment default occurs. "Prospectively if Astoria Energy II LLC continues to fully participate in the capacity, we expect the winter capacity prices starting in November 2011 to be around zero. This implies that the generation units in zone J will receive rest-of-state (ROS) capacity prices, which was as low as 15 cents per kW?month for April 2011, albeit based on old demand curve," S&P related. "In the near term, we think that if these lower prices continue Astoria Gen's cash flow will likely be insufficient to cover operating expenses including capital maintenance," said Standard & Poor's credit analyst Trevor D'Olier-Lees. "The third-quarter results are not yet out; however, we think it is possible that the project may have tripped the leverage covenant. If such a trip has occurred the project owner can choose to cure. Moreover, deteriorating liquidity at the project has substantially increased refinancing risk; particularly given the revolver is due in 2012. The project has retained a financial adviser and a law firm to provide guidance on a potential restructuring," S&P said. "Since our July 2011 multinotch downgrade due to heightened uncertainty of buyer-side mitigation rules (For more details on the rating action, please see our research update published on July 20, 2011), the next three capacity auctions for New York zone J produced dramatically reduced outcomes," S&P related. In September 2011, the New York Independent System Operator finalized the new demand curve which resets the monthly reference price for the summer to $19.19/kW-month about 20% above the current reference price of $15.99/kW-month. "The curve became effective beginning with the October 2011 auction. Based on the new demand curve, we had expected the clearing price for October 2011 capacity auction to be close to monthly default reference price of $6.5/kW-month. However, the actual clearing price was significantly higher at $9.01/kW-month, albeit still below the June auction result of $11.76 per kW-month. Although the new demand curve can explain some of the increase it is unclear what other factors influenced most of the increase. We think it could be due to generators that did not clear the market," S&P said. The FERC has started its review of Astoria Gen's (along with another project, TC Ravenswood LLC) July 11 filing and directed the New York Independent System Operator (NYISO) to provide access to confidential information used in its determination of buyer- side mitigation. The site for the Astoria Unit 40 (that incurred a boiler tube explosion) has been prepared for commencement of repairs. Repair evaluation is underway. "The CreditWatch with developing implications reflects the heightened uncertainty regarding future capacity prices in New York zone J and that we may upgrade or downgrade the rating, based on the ultimate outcome of the proceeding with the FERC. If the FERC rules in the project's favor, we could raise the ratings. We may downgrade the rating if the opposite occurs," S&P said. BARKI LLC: CFTC Gets Judgment in $38 Million Ponzi Scheme --------------------------------------------------------- The U.S. Commodity Futures Trading Commission disclosed that the U.S. District Court for the Western District of North Carolina entered an order of default judgment and permanent injunction against Barki, LLC of Mint Hill, N.C. The order, entered on September 30, 2011, stems from a CFTC enforcement action filed on March 17, 2009 that charged Barki and Bruce C. Kramer (Kramer) with fraudulent solicitation and misappropriation in a $38 million leveraged foreign currency (forex) Ponzi scheme perpetrated by Kramer. The court's order imposes restitution of $19,960,649 and a civil monetary penalty of $20,944,707 on Barki and imposes permanent trading and registration bans against Barki, among other sanctions. The order also requires relief defendant Forest Glen Farm, LLC of North Carolina, a company Kramer registered to purchase his residence and a horse farm, to disgorge $1.35 million in ill-gotten gains it received as a result of Kramer's fraudulent conduct. In addition, the CFTC obtained a federal court consent order from the same court requiring disgorgement from relief defendant Rhonda Kramer (R. Kramer) for any customer funds she obtained through Kramer's fraudulent conduct. The consent order, entered on September 27, 2011, recognizes that the Receiver appointed by the court in this case had collected funds from R. Kramer which satisfies her disgorgement obligations under the consent order. The Default Order Finds that Kramer Fraudulently Solicited Least $38 Million from 79 Customers by Touting his Success in Trading Forex The default order finds that, from June 2004 through February 2009, Kramer fraudulently solicited at least $38 million from 79 customers by touting his success in trading forex. Of the $38 million solicited, Kramer deposited approximately $17.5 million for trading forex and sustained trading losses of $10 million, the order finds. Kramer used the bulk of the funds to pay purported profits and to return principal to customers, and for extravagant personal uses, such as a 48-acre horse farm, a 6,000 square foot residence, artwork, luxury automobiles including a Maserati, and extravagant parties, the order finds. Kramer concealed his fraud by issuing false account statements to customers. His fraud became known upon his death in February 2009. Joseph W. Grier, III was appointed Receiver in this action and has distributed $3,250,369 in receivership funds to Barki customers. BROADSTRIPE LLC: Wins OK to Send Ch. 11 Plan for Creditors Vote --------------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Christopher S. Sontchi on Wednesday approved Broadstripe LLC's disclosure statement, allowing the Company to send its reorganization plan to creditors for a vote. According to Law360, JudgeSontchi signed off on the disclosures at a court hearing after the company added language resolving certain concerns of the U.S. Trustee over indemnification and exculpation provisions in the plan. As contemplated in the plan, there will be an auction on Oct. 20 to determine if a $95 million bid from a group of buyers is the best price to finance the liquidating plan. About Broadstripe LLC Headquartered in Chesterfield, Missouri, Broadstripe LLC -- http://www.broadstripe.com/-- provides videos and telephone services to consumers and business in Maryland, Michigan, Washington and Oregon. The Company and five of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-10006) on Jan. 2, 2009. Attorneys at Ashby & Geddes, and Gardere Wynne Sewell LLP represent the Debtors in their restructuring efforts. The Debtors tapped FTI Consulting Inc. as their restructuring consultant, and Epiq Bankruptcy Consultants LLC as their claims agent. In its petition, Broadstripe estimated assets and debts between $100 million and $500 million. An Official Committee of Unsecured Creditors has been appointed in the case. Broadstripe has been in Chapter 11 more than 18 months thus any creditor can file a plan. BROOKE CORP: Clawback Suit Remains in Bankruptcy Court ------------------------------------------------------ Lisa Uhlman at Bankruptcy Law360 reports that U.S. District Judge Eric J. Melgren n Wednesday refused to take up an adversary proceeding filed on behalf of investors in now-bankrupt Brooke Corp. seeking to recoup losses from the insurance company's massive financial fraud. According to Law360, Judge Melgren denied the defendants' request to have the bankruptcy reference withdrawn from Chapter 7 trustee Albert A. Riederer's suit seeking to recover money allegedly wrongfully transferred to a group of investors during the course of the fraud, saying the suit properly belonged before the bankruptcy court. About Brooke Corp. Albert Riederer was appointed special master of Brooke Corporation in prepetition federal court proceedings. Shortly after Brooke Corporation filed for Chapter 11 bankruptcy protection (Bankr. D. Kansas Lead Case No. 08-22786) on October 28, 2008, Mr. Riederer was appointed Chapter 11 Trustee. When the case was converted to Chapter 7 on June 29, 2009, Mr. Riederer was appointed Chapter 7 Trustee. On October 29, 2008, the Court granted a motion to jointly administer the bankruptcies of Brooke Corporation, Brooke Capital Corporation, and Brooke Investment, Inc., with the Brooke Corporation bankruptcy case being the lead case. CAGLE'S FARMS: Lowenstein Sandler Retained as Creditors' Counsel ---------------------------------------------------------------- Lowenstein Sandler's Bankruptcy and Creditors' Rights Group was retained as counsel to the creditors committee in the Cagle's Farms bankruptcy case in Atlanta. This marks Lowenstein Sandler's third poultry bankruptcy case this year so far. They also served as counsel to the creditors group for Townsends, Inc. and Allen Family Foods. About Cagle's Cagle's Farms (NYSE: CGL.A) -- http://www.cagles.net/-- engages in the production, marketing, and distribution of fresh and frozen poultry products in the United States. Cagle's Inc. and its wholly owned subsidiary Cagle's Farms filed on Oct. 19, 2011, voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-80202 and 11-80203). Paul K. Ferdinands, Esq., at King & Spalding, in Atlanta, Georgia, serves as counsel. FTI Consulting, Inc., serves as the Debtors' financial advisors. Cagle's Inc. estimated assets of up to $100 million and debts of up to $50 million. Cagle's Farms estimated assets and debts of up to $50 million. CAGLE'S FARMS: Gets Shares Delisting Notice From NYSE Amex ---------------------------------------------------------- Cagle's, Inc. received notice from NYSE Amex LLC that it does not satisfy rules for continued listing on the Exchange. In particular, the Company has filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the Northern District of Georgia, and as a result the staff of the Exchange has determined that the Company does not satisfy Section 1003(a)(iv) of the NYSE Amex LLC Company Guide), relating to companies that have sustained losses so substantial in relation to their overall operations or their existing financial resources, that in the opinion of the Exchange, continuing all operations is questionable. Cagle's, Inc. does not plan to appeal the staff determination, which will result in the determination becoming final. The Exchange will continue the trading suspension until the delisting of Cagle's, Inc. stock is complete. About Cagle's Cagle's Farms (NYSE: CGL.A) -- http://www.cagles.net/-- engages in the production, marketing, and distribution of fresh and frozen poultry products in the United States. Cagle's Inc. and its wholly owned subsidiary Cagle's Farms filed on Oct. 19, 2011, voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-80202 and 11-80203). Paul K. Ferdinands, Esq., at King & Spalding, in Atlanta, Georgia, serves as counsel. FTI Consulting, Inc., serves as the Debtors' financial advisors. Cagle's Inc. estimated assets of up to $100 million and debts of up to $50 million. Cagle's Farms estimated assets and debts of up to $50 million. CELL THERAPEUTICS: Incurs $16.6-Mil. Net Loss in Sept. Quarter -------------------------------------------------------------- Cell Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss attributable to CTI of $16.66 million on $0 of revenue for the three months ended Sept. 30, 2011, compared with a net loss attributable to CTI of $12.52 million on $0 of revenue for the same period a year ago. The Company also reported a net loss attributable to CTI of $53.39 million on $0 of revenue for the nine months ended Sept. 30, 2011, compared with a net loss attributable to CTI of $62.92 million on $319,000 of total revenues for the same period during the prior year. The Company reported a net loss of $82.64 million on $319,000 of revenue for the 12 months ended Dec. 31, 2010, compared with a net loss of $82.64 million on $80,000 of total revenue during the same period in 2009. The Company's balance sheet at Sept. 30, 2011, showed $62.85 million in total assets, $33.89 million in total liabilities, $13.46 million in common stock purchase warrants, and $15.49 million total shareholders' equity. "This has been a very exciting quarter for the Company as we move pixantrone one step closer to potential approval in both the U.S. and E.U.," noted James A. Bianco, M.D., CEO of Cell Therapeutics, Inc. "We believe the data contained in the resubmitted NDA confirms the confidence in the efficacy endpoints and also addresses the other requests made by the U.S. Food and Drug Administration. With the day 180 responses regarding our MAA expected this quarter along with the expected reporting of final data on the tosedostat phase II study at the American Society of Hematology's annual meeting, the fourth quarter is shaping up to reflect the solid progress we have made in 2011." Marcum LLP, in San Francisco, Calif., expressed substantial doubt about the Company's ability to continue as a going concern in its audit reports for the financial statements for 2009 and 2010. The independent auditors noted that the Company has incurred losses since its inception, and has a working capital deficiency of approximately $14.2 million at Dec. 31, 2010. Bankruptcy Warning The Company has incurred losses since inception and expect to generate losses for the next few years primarily due to research and development costs for Pixuvri, OPAXIO, tosedostat, brostallicin and bisplatinates. If the Company receives approval of Pixuvri by the European Medicines Agency or the Food and Drug Administration, the Company would anticipate additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and is currently exploring alternative sources of equity or debt financing. The Company may seek to raise such capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, the Company may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. A full-text copy of the Form 10-Q is available for free at: http://is.gd/7gIpt9 About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a bi4opharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. CELL THERAPEUTICS: To Sell up to $100 Million of Securities ----------------------------------------------------------- Cell Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission a Form S-3 registration statement relating to the Company's intention to sell any combination of common stock, preferred stock, debt securities, warrants, rights and units in one or more offerings, up to an aggregate offering price of $100,000,000. Each time the Company offers securities using this prospectus, the Company will provide specific terms of the securities and the offering in one or more supplements to this prospectus. The prospectus supplements may also add to, update or change the information in this prospectus and will also describe the specific manner in which we will offer the securities. The securities may be offered and sold by the Company to or through one or more underwriters, broker-dealers or agents, or directly to purchasers on a continuous or delayed basis. The Company's common stock is quoted on The NASDAQ Capital Market and on the Mercato Telematico Azionario, or the MTA, stock market in Italy under the symbol "CTIC." On Oct. 21, 2011, the last reported sale price of the Company's common stock on The NASDAQ Capital Market was $1.23 per share. The Company does not expect its preferred stock, debt securities, warrants, rights or units to be listed on any securities exchange or over-the-counter market unless otherwise described in the applicable prospectus supplement. A full-text copy of the prospectus is available for free at: http://is.gd/gYze8Q About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a bi4opharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. The Company reported a net loss of $82.64 million on $319,000 of revenue for the 12 months ended Dec. 31, 2010, compared with a net loss of $82.64 million on $80,000 of total revenue during the same period in 2009. The Company's balance sheet at Sept. 30, 2011, showed $62.85 million in total assets, $33.89 million in total liabilities, $13.46 million in common stock purchase warrants, and $15.49 million total shareholders' equity. "This has been a very exciting quarter for the Company as we move pixantrone one step closer to potential approval in both the U.S. and E.U.," noted James A. Bianco, M.D., CEO of Cell Therapeutics, Inc. "We believe the data contained in the resubmitted NDA confirms the confidence in the efficacy endpoints and also addresses the other requests made by the Food and Drug Administration (the "FDA"). With the day 180 responses regarding our MAA expected this quarter along with the expected reporting of final data on the tosedostat phase II study at the American Society of Hematology's annual meeting, the fourth quarter is shaping up to reflect the solid progress we have made in 2011." Marcum LLP, in San Francisco, Calif., expressed substantial doubt about the Company's ability to continue as a going concern in its audit reports for the financial statements for 2009 and 2010. The independent auditors noted that the Company has incurred losses since its inception, and has a working capital deficiency of approximately $14.2 million at Dec. 31, 2010. Bankruptcy Warning The Company has incurred losses since inception and expect to generate losses for the next few years primarily due to research and development costs for Pixuvri, OPAXIO, tosedostat, brostallicin and bisplatinates. If the Company receives approval of Pixuvri by the European Medicines Agency or the Food and Drug Administration, the Company would anticipate additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and is currently exploring alternative sources of equity or debt financing. The Company may seek to raise such capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, the Company may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CENTRAL BUILDING: Files Schedules of Assets and Liabilities ----------------------------------------------------------- Central Building LLC filed with the Bankruptcy Court for the District of Arizona its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $5,850 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $10,650 ----------- ----------- TOTAL $5,850 $10,650 About Central Building Orinda, California-based Central Building LLC filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 11-27970) on Oct. 3, 2011. Its wholly owned subsidiary, Crow Partners LLC, filed a separate petition (Bankr. D. Ariz. Case No. 11-27946), listing under $1 million in assets and debts. Central Building does business in Arizona under the name Central Building Camelback LLC. The Debtors own the County Square Shopping Center in California and the Camelback Place at Dysart in Arizona. The Debtors' sole members are Neal Smither and his spouse, Patricia Smither. The equity interests are subject to a Voting Trust Agreement of which G. Neil Elsey, a principal of Avion Holdings, LLC, is the voting trustee. Avion has also been retained as Restructuring Agent to manage and operate the Debtors during their restructuring. Judge George B. Nielsen, Jr. presides over the case. Lawyers at Stinson Morrison Hecker LLP in Phoenix, Arizona, serve as the Debtors' counsel. The petition was signed by Neal Smither, member. CENTRAL BUILDING: Court OKs Avion Holding as Restructuring Agent ---------------------------------------------------------------- Central Building LLC and its unit Crow Partners LLC sought and obtained permission from the U.S. Bankruptcy Court for the District of Arizona to employ Avion Holdings LLC as restructuring agent. The court also approved the payment of $15,000 per month to Avion Holding, as well as reimbursement of ordinary and necessary out- of-pocket business related expenses. About Central Building Orinda, California-based Central Building LLC filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 11-27970) on Oct. 3, 2011. Its wholly owned subsidiary, Crow Partners LLC, filed a separate petition (Bankr. D. Ariz. Case No. 11-27946), listing under $1 million in assets and debts. Central Building does business in Arizona under the name Central Building Camelback LLC. The Debtors own the County Square Shopping Center in California and the Camelback Place at Dysart in Arizona. The Debtors' sole members are Neal Smither and his spouse, Patricia Smither. The equity interests are subject to a Voting Trust Agreement of which G. Neil Elsey, a principal of Avion Holdings, LLC, is the voting trustee. Avion has also been retained as Restructuring Agent to manage and operate the Debtors during their restructuring. Judge George B. Nielsen, Jr. presides over the case. Lawyers at Stinson Morrison Hecker LLP in Phoenix, Arizona, serve as the Debtors' counsel. Central Building LLC scheduled assets of $5,850 and liabilities of $10,650. The petition was signed by Neal Smither, member. CHARLESTON ASSOCIATES: Dec. 7 Disclosure Statement Hearing Set -------------------------------------------------------------- Charleston Associates, LLC, has filed a disclosure statement, dated Oct. 7, 2011, explaining its proposed Plan of Reorganization. The U.S. Bankruptcy Court for the District of Delaware has set a hearing for Dec. 7, 2011, at 2:00 p.m. to consider the approval of the disclosure statement. Objections are due by Nov. 30, 2011. Specifically, the Plan will be effectuated as follows: Step 1: Reinstatement of the loan from Secured Lender pursuant to the Amended and Restated Loan Agreement, New Promissory Note, New Deed of Trust, New Assignment of Leases and Rents, and such other agreements, instruments and other documents as the Secured Lender will deem reasonably necessary to the preservation of its first priority secured position as it existed as of the Petition Date. Step 2: On and after the Effective Date, the business and affairs of the Reorganized Debtor will be managed by the manager of the Debtor pursuant to the terms of the existing management agreement with the Debtor. Step 3: Payment of 50% of Allowed General Unsecured Claims. Step 4: Reinstatement of the Interests of Equity Holders. Step 5: Payment in full in cash of any Allowed Class 4 Claim within 30 days after entry of a Final Order by the Nevada Bankruptcy Court with respect to judgment against the Debtor, if any, in favor of CNB, in the RAS Litigation. Step 6: Payment of the remaining 50% of Allowed General Unsecured Claims 180 days after the Effective Date. Step 7: Payment of the Allowed Secured Claim, plus interest, 84 months after the Effective Date. Based on anticipated cash flows for the first approximately two years after the Plan's Effective Date, the Debtor believes it will have the means to execute the Plan and anticipates revenue sufficient to meet its debt service obligations under the Amended and Reinstated Loan Agreement, New Promissory Note and related documents. Classification of Claims and Interests The Plan designates 6 Classes of Claims and Interests: Class 1: Secured Claim of Secured Lender (Wells Fargo Bank, N.A.) Class 2: Other Secured Claims. Class 3: General Unsecured Claims. Class 4: Any Unsecured Claims of CNB as established by a Final Order entered in the RAS Litigation. Class 5: Any Unsecured Claim held by an affiliate of the Debtor, including either of the Equity Holders. Class 6: Interests of Equity Holders. Classes 1, 3 and 5 are impaired under the Plan. Holders of Claims in Classes 1 and 3 are entitled to vote to accept or reject the Plan. Holders of Claims in Class 5 will receive no distribution under the Plan and are therefore presumed to reject the Plan and are not entitled to vote. Claims in Classes 2, 4 and 6 are unimpaired under the Plan. The Class 1 Claim will be allowed as of the Effective Date in the amount of $46,556,053. The maturity of the Allowed Secured Lender Claim will be extended for a period of 84 months from the Effective Date. During this 84-month period, in the absence of any default, interest will accrue on such claim at the rate of 4.5% per annum. In the event of a default not cured by the Debtor as provided for under the terms of the Amended and Reinstated Loan Agreement and New Promissory Note, the Reinstated Secured Loan will bear interest at the rate of 6% per annum. Interest will be paid monthly in arrears. The Reinstated Secured Loan will be amortized over a 30 year period, with all accrued and unpaid interest and principal to be due and payable on the stated maturity date of the New Promissory Note, unless otherwise extended. If not otherwise prepaid by maturity, the Allowed Secured Lender Claim will be fully or partially paid upon maturity, from the proceeds of the sale of Boca Fashion Village, proceeds of refinancing, or otherwise. The holders of the Allowed Other Secured Claims in Class 2, if any, will retain, unaltered, the legal, equitable and contractual rights (including any liens that secure such Claim) to which such claim entitles each such holder and such Allowed Other Secured Claim will be reinstated as of the Effective Date. Allowed Class 3 General Unsecured Claims (approximately $130,000, if not less, according to the Debtor) will be paid pursuant to the following schedule: 50% of the amount of each Allowed Claim on the Effective Date and 50% of the balance of each Allowed Claim 180 days after the Effective Date. The Class 4 CNB Unsecured Claim has been disallowed by the Nevada Bankruptcy Court in the RAS Litigation and need not be addressed at this time. In the event that any court of competent jurisdiction enters a final judgment against the Debtor with respect to this claim, the Debtor reserves the right to amend the Plan in accordance with applicable bankruptcy law. All Class 5 Affiliate Unsecured Claims will be disallowed as of the Effective Date. A copy of the disclosure statement is available for free at: http://bankrupt.com/misc/charlestonassociates.DS.pdf About Charleston Associates Based in Las Vegas, Nevada, Charleston Associates, LLC, is the successor by merger to Boca Fashion Village Syndications Group, LLC. The Debtor initially owned a 96 acre parcel of real estate in Las Vegas, Nevada and began developing a large community shopping center thereon. Situated at the northeast corner of the intersection of Charleston Boulevard and Rampart Boulevard, the entire shopping center was to be known as "The Shops at Boca Park." The Debtor developed Phases I and II (approximately 54 acres) into an operating shopping center whose tenants currently include Target, Petland, Vons, Famous Footwear, Ross, OfficeMax, and a number of other major national retailers and local retailers. The Debtor transferred developed portions of Phases I and II to affiliates, but retained and continues to own nearly nine acres of land in Phases I and II. Phase III encompassed approximately 41.72 acres. The Debtor divided Phase III into two parcels consisting of the approximately 18.28 acre parcel that is the Boca Fashion Village property, and an approximately 23.44 acre parcel of undeveloped land adjacent thereto. The Undeveloped Land, which remains largely unimproved, was subsequently the subject of a "friendly foreclosure" by City National Bank ("CNB"). The Debtor developed Boca Fashion Village into an operating shopping center whose tenants currently include The Cheesecake Factory, Gordon Biersch, Total Wine and More, Grimaldi's Pizzeria, Kona Grill, REI, Pink the Boutique, and many other national and local retailers. Boca Fashion Village consists of three in-line buildings containing 138,869 square feet of rentable area and an additional 3.74 acre site. The 3.74 acre site was formerly subject to a ground lease, but is currently owned by Quality Real Estate Management ("QREM"), and is being renovated to accommodate the opening of a Fry's Electronics, Inc. store, a "big-box" retail electronics store. Approximately 118,258 square feet, or 85.2% of the rentable area in Boca Fashion Village, is currently leased. In addition, there is a cellular tower located on the property that is currently leased to Nextel. Charleston Associates filed for Chapter 11 protection (Bankr. D. Del. Case No. 10-11970) on June 17, 2010. Judge Kevin J. Carey presides over the case. Neal L. Wolf, Esq., Dean Gramlich, Esq., and Jordan M. Litwin, Esq., at Neal Wolf & Associates, LLC, in Chicago, Ill., represent the Debtor as counsel. Bradford J. Sandler, Esq., and Kathleen P. Makowski, Esq., at Pachulski Stang Ziehl & Jones, LLP, in Wilmington, Del., represent the Debtor as Delaware counsel. In its schedules, the Debtor disclosed $92,348,446 in assets and $65,064,894 in liabilities. Attorneys at Brinkman Portillo Ronk, PC, represent the Official Committee of Unsecured Creditors as counsel. Thomas M. Horan, Esq., Steven K. Kortanek, Esq., and Ryan Cicoski, Esq., at Womble Carlyle Sandridge & Rice, LLP, in Wilmington, Del., represent the Committee as Delaware counsel. CHINA TEL GROUP: Signs Agreement to Provide a 4G Network in China ----------------------------------------------------------------- US-based VelaTel Global Communications, formerly known as China Tel Group, Inc., entered into a Business Agreement with Next Generation Special Network Communication Technology Co., Ltd., in the People's Republic of China. NGSN already holds a PRC-issued value added services license to provide location based tracking services and other information service nationwide. VelaTel will form a PRC operating company to be jointly owned with NGSN but subject to VelaTel's control. The operating company will enter into an exclusive services contract with NGSN to deliver the information services and a 4G Network in China. The parties will work on the deployment of a 4G network that will employ TD-LTE technology using equipment already commercially available and manufactured by VelaTel's strategic partner ZTE Corporation. VelaTel will finance and the joint venture will own the infrastructure equipment. VelaTel will also provide all engineering and network management services, including engineering VelaTel has already completed for 29 major PRC cities in connection with a different WBA project. VelaTel and NGSN expect to finalize the services contract and form the joint venture company before the end of 2011. NGSN was founded from a group of other technology institutes to support other state owned companies and central government agencies in advancing private network telecommunications technologies. NGSN's current activities include projects related to transportation, including GPS tracking technologies, remotely delivered education services, and agriculture technologies. For further information about NGSN, please visit www.ngsn-china.com. The first phase of the network VelaTel will deploy and operate for NGSN will cover the Heilongjiang Province in northeast China, with a population of approximately 39 million, and will utilize NGSN's existing value added services license to deliver personalized navigation and location based services including GPS, mobile resource management solutions that allow enterprises to monitor and manage mobile workforces and assets. The operating company will distribute its services to consumers, wireless carriers, enterprises and automobile manufacturers, and original equipment manufacturers. The network will be expanded to other regions as well as by offering 4G Network services in China. NGSN's WBA Division GM Mr. Lu Bin noted: "China is seeing unprecedented demand for vertical M2M (machine to machine) solutions. In addition to location based services, applications include home automation, energy saving/environmental protection, industrial automation, health care, precision agriculture, public security and video surveillance." VelaTel's CEO, George Alvarez, commented: "The NGSN project represents an expansion and diversification of the services VelaTel delivers, particularly in China. Instead of a retail consumer model, and the attendant challenges of marketing budgets and competition with other carriers for subscribers, this transaction reflects a business to business model, with NGSN acting as both the "anchor tenant" and the broker with a financial incentive to expand the network's paid users by recruiting other affiliated businesses." VelaTel's President, Colin Tay, also pointed out: "We are pleased and honored to be working with a prestigious company like NGSN. We look forward to assisting them to deliver location based services to their diverse customers in addition to deployment of a 4G network." About China Tel Based in San Diego, California, and Shenzhen, China, China Tel Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/-- provides high speed wireless broadband and telecommunications infrastructure engineering and construction services. Through its controlled subsidiaries, the Company provides fixed telephony, conventional long distance, high-speed wireless broadband and telecommunications infrastructure engineering and construction services. ChinaTel is presently building, operating and deploying networks in Asia and South America: a 3.5GHz wireless broadband system in 29 cities across the People's Republic of China with and for CECT-Chinacomm Communications Co., Ltd., a PRC company that holds a license to build the high speed wireless broadband system; and a 2.5GHz wireless broadband system in cities across Peru with and for Perusat, S.A., a Peruvian company that holds a license to build high speed wireless broadband systems. The Company's balance sheet at June 30, 2011, showed $9.74 million in total assets, $27.23 million in total liabilities, and a $17.48 million total stockholders' deficit. The Company reported a net loss of $66,623,130 on $955,311 of revenue for the year ended Dec. 31, 2010, compared with a net loss of $56,065,029 on $657,876 of revenue during the prior year. Since the Company's inception until June 30, 2011, it has incurred accumulated losses of approximately $242.36 million. The Company expects to continue to incur net losses for the foreseeable future. The Company's independent accountants have expressed substantial doubt about the Company's ability to continue as a going concern in their audit report, dated April 15, 2011, for the period ended Dec. 31, 2010. As reported by the TCR on April 21, 2011, Mendoza Berger & Company, LLP, in Irvine, California, expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The independent auditors noted that the Company has incurred a net loss of $56,041,182 for the year ended Dec. 31, 2009, cumulative losses of $165,361,145 since inception, a negative working capital of $68,760,057, and a stockholders' deficit of $63,213,793. CHRYSLER GROUP: Lightstone Defends Extended Stay Ch. 11 Filing -------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that real-estate investor David Lichtenstein, who faces a court order to pay lenders a $100 million penalty for his 2009 decision to put his Extended Stay hotel chain into bankruptcy, said he's being branded the bad boy for doing the right thing. About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20% equity interest in Chrysler Group. The U.S. and Canadian governments provided Chrysler with $4.5 billion to finance its bankruptcy case. Those loans are to be repaid with the proceeds of the bankruptcy estate's liquidation. * * * As reported in the Troubled Company Reporter on June 6, 2011, Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Chrysler Group LLC. The rating outlook is stable. "At the same time, we assigned our issue-level rating to Chrysler's $4.3 billion senior bank facilities ('BB') and $3.2 billion second-lien notes ('B'). The recovery ratings are '1' and '5'. The company recently completed this financing," S&P stated. CIMA LLC: Files New Schedules of Assets and Liabilities ------------------------------------------------------- Cima LLC filed with the U.S. Bankruptcy Court for the Southern District of Florida filed amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $17,000,000 B. Personal Property $1,876,064 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $8,075,214 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $2,460,016 ----------- ----------- TOTAL $18,876,064 $10,535,230 A full-text copy of the Amended Schedules is available for free at http://bankrupt.com/misc/CIMALLCsal.pdf In its original schedules, the Debtor disclosed $1,207,579 of creditors holding unsecured non-priority claims About CIMA LLC Based in Ft. Lauderdale, Florida, CIMA, L.L.C., is the developer and current owner of a 200-acre parcel of land located in Mobile, Alabama, with frontage on Interstate 10, a major thoroughfare. The parcel has been subdivided into parcels, and some infrastructure work has been done. CIMA is finalizing plans with one or more investor groups for further development of this parcel. CIMA filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-33279) on Aug. 22, 2011. Judge Raymond B. Ray presides over the case. Leslie Gern Cloyd, Esq. at Berger Singerman, P.A. represents the Debtor in its restructuring effort. The petition was signed by J. Marion Uter, manager. CLINTON COURT: Court OKs Employment of Robinson Brog as Counsel --------------------------------------------------------------- Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York authorized Clinton Court Development LLC to employ Robinson Brog Leinwand Greene Genovese & Gluck P.C. as its attorneys. Clinton Court Development LLC, the owner of a 13-story mixed-use building on Clinton Avenue in Brooklyn filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 11-14673) on Oct. 5, 2011, claiming the property is worth about $17 million. Mortgages total roughly $42.3 million. The primary secured creditor is TD Bank NA. The Company also owns a two-story commercial building on Waverly Avenue in Brooklyn. Judge Robert E. Gerber presides over the case. The Debtor is represented by Robert R. Leinwand, Esq., at Robinson Brog Leinwand Greene Genovese & Gluck P.C. as counsel. The Debtor scheduled $17,210,000 in assets and $47,347,150 in liabilities. The petition was signed by David Weiss, manager. Attorneys for TD Bank N.A., are H. Michael Lynch, Esq., and Gary O. Ravert, Esq., at Lynch & Associates. COMMONWEALTH ADVISORS: Nine Investment Funds File for Bankruptcy ---------------------------------------------------------------- Dow Jones' DBR Small Cap reports that facing angry investors who want their money back, nine investment funds managed by Louisiana- based Commonwealth Advisors Inc. have filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Wilmington, Del., in a move that will enable the funds' managers to liquidate the pools of money under a judge's watch. CROATAN SURF: 1st Lien Lender Can't Vote Junior Lender's Claim -------------------------------------------------------------- Bankruptcy Judge Stephani W. Humrickhouse said Royal Bank America does not have the authority to vote the claims of the Edwards Family Partnership L.P., an insider of Croatan Surf Club LLC, on the Debtor's Amended Plan of Reorganization. RBA provided $17,000,000 to finance the construction of the debtor's condominium project. The loan is secured by a first priority deed of trust on the property. EFP provided mezzanine financing of $3,000,000, in exchange for a junior deed of trust on the property. RBA filed a proof of claim on Feb. 16, 2011, for $19,059,327, which was amended on June 1, 2011 to reflect a claim of $20,108,549. RBA also filed a proof of claim for EFP for $3,000,000 on Feb. 16, 2011. EFP filed its own proof of claim on May 10, 2011, for $3,765,291. On Jan. 14, 2011, the debtor filed a plan of reorganization which separately classifies the RBA secured debt (Class 6), the EFP secured debt (Class 7) and provides that any unsecured portion of the EFP debt will be treated in Class 9. RBA voted to reject its Class 6 treatment, EFP's Class 7 treatment and EFP'S Class 9 treatment. EFP filed its own ballots accepting both its Class 6 and Class 9 treatments. The parties acknowledge that the subordination agreement must be enforced as it would be under Pennsylvania law. Subordination agreements are enforceable under Pennsylvania law. The Court previously determined that the collateral serving as security for both RBA and EFP's debt should be valued at $18,500,000. In light of that determination, EFP may very well have a secured claim and most certainly will have an unsecured claim. EFP therefore has a substantial potential for receiving a distribution in this case, even if the claim of RBA must be satisfied in its entirety before any monies are paid to it. Judge Humrickhouse said the interests EFP has in the potential for that distribution should be protected through the right to vote its claims and negotiate its treatment. Citing Judge Eugene Wedoff's decision in In re 203 North LaSalle St. Pshp., 246 B.R. 325 (Bankr. N.D. Ill. 2000), Judge Humrickhouse said the purported agent (RBA) would not be acting at the direction of EFP, but rather would be acting out of self interest, and therefore RBA cannot be seen as EFP's agent under F.R.B.P. Rule 3018(c). A copy of the Court's Oct. 25, 2011 Order is available at http://is.gd/DRvK1Jfrom Leagle.com. About Croatan Surf Kill Devil Hills, North Carolina-based Croatan Surf Club, LLC, is the owner of 35 residential condominium units at a development in Dare County, North Carolina known as Croatan Surf. It filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.C. Case No. 11- 00194) on Jan. 10, 2011. Walter L. Hinson, Esq., at Hinson & Rhyne, P.A., in Wilson, N.C., serve as counsel to the Debtor. Kevin J. Silverang, Esq., and Philip S. Rosenzweig, Esq., at Silverang & Donohoe, LLC, in St. Davids, Pa., serve as co-counsel to the Debtor. No creditors committee has been formed in the case. In its schedules, the Debtor disclosed $26,151,718 in assets and $19,350,000 in liabilities. CRYSTAL CATHEDRAL: To Sell Assets to Chapman University for $50MM ----------------------------------------------------------------- Liz Hoffman at Bankruptcy Law360 reports that Crystal Cathedral Ministries, the bankrupt owners of a landmark 2,800-seat glass cathedral in Southern California, will sell it to nearby Chapman University for $50 million, snubbing a higher offer from the local Catholic diocese and ignoring creditors who said the bid was too low, according to statements late Wednesday. Law360 relates that Crystal Cathedral Ministries said it had reluctantly accepted the university's offer in advance of a Nov. 14 confirmation hearing on its reorganization plan. About Crystal Cathedral Crystal Cathedral Ministries is a Southern California-based megachurch founded by television evangelist Robert Schuller. The church, known for its television show "The Hour of Power." Mr. Schuller retired from his role as senior pastor of Crystal Cathedral in 2006. His daughter Sheila Schuller Coleman has been senior pastor since July 2009. Contributions declined 24% in 2009, in part on account of "unsettled leadership." Crystal Cathedral filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. 10-24771) on Oct. 18, 2010. The Debtor disclosed $72,872,165 in assets and $48,460,826 in liabilities as of the Chapter 11 filing. Marc J. Winthrop, Esq., at Winthrop Couchot P.C. represent the Debtor. Todd C. Ringstad, Esq., at Ringstad & Sanders, LLP, represents the Official Committee of Unsecured Creditors. DAIRY PRODUCTION: 3 Debtors File Joint Reorganization Plan ---------------------------------------------------------- Dairy Production Systems - Georgia LLC, Dairy Production Systems - Mississippi, LLC, and Heifer Haven, LLC, filed a Joint Plan of Reorganization and an accompanying Disclosure Statement dated Oct. 5, 2011. The Plan is a new value plan, which includes an infusion from Resilience Capital Partners of new capital in the amount of not less than $5 million. In exchange for the New Value Contribution, the New Value Sponsor will receive 100% of the equity in the Reorganized Debtor. The Plan provides for the substantive consolidation or merger of the Plan Debtors into a single entity. The Reorganized Debtor will use the New Value Contribution to make any Cash payments that are contemplated under the Plan, including payment to the holders of allowed claims. Any remaining portion of the New Value Contribution will be used to by additional cattle and fund any construction/maintenance costs that are necessary to bring the Reorganized Debtor's dairy farms to full capacity, and to otherwise continue and maximize the Reorganized Debtor's business operations. Claims and Equity Interests under the Plan are classified into 10 classes: Class 1 Priority Claims Class 2 Secured Claim of Agricultural Funding Solutions LLC Class 3 Secured Claims of the Other Secured Creditors Class 4 Co-Op Setoff Claims Class 5 Convenience Claims Class 6 General Unsecured Claims Class 7 At Risk Farmer Unsecured Claims Class 8 Deficiency Claims Class 9 Subordinated Claims Class 10 Equity Interests Class 1 Claims, to the extent it exists, will be paid in the full allowed amount. The Reorganized Debtor will provide AFS with a secured claim note on account of AFS' Class 2 Claim with a 10-year term bearing interest at the fixed interest rate of 5.25% per annum. In lieu of this treatment, AFS may elect to receive a lump sum payment for $10 million. Class 3 Claims will receive either a new note or capital lease from the Reorganized Debtor under the same terms that existed between the parties involved. In lieu of such treatment, holders of Class 3 Claims may elect to receive a lump sum payment equal to 90% of their allowed claims. Class 4 Claims are entitled to setoff or recoupment over a four- month period after the Plan Effective Date. Class 5 Convenience Claims will receive cash equal to 75% of the allowed claim amount within 60 days after the Effective Date. Class 6, 7 and 8 Claims will receive a pro rata share of (i) the Unsecured Creditor Note, (ii) any distributions to be made to AFS to the extent AFS claim is determined to be a subordinated claim, (iii) the proceeds of the bankruptcy causes of action, and (iv) the proceeds of the estate causes of action. Class 9 Claims will receive their pro rata share of any remaining funds of the Unsecured Creditor Note, AFS distributions, and proceeds from the causes of actions. Class 10 Claims will be cancelled. The Plan releases and discharge David P. Sumrall from the Sumrall causes of action, but does not release or discharge any other person who is subject to any cause of action as a result of receiving a payment or transfer from Mr. Sumrall. Each of the Debtors is 100% owned by Mr. Sumrall. In addition, the Plan does not release Mr. Sumrall from any third party claims. A full-text copy of the Plan Debtors' Oct. 5 Disclosure Statement is available for free at: http://bankrupt.com/misc/DAIRYPRODUCTION_DebtorDSOct5.PDF Competing Plans As reported in the Oct. 11, 2011, edition of the Troubled Company Reporter, two competing plans for the Debtors have been proposed. One was filed by Agricultural Funding Solutions, LLC, on Sept. 8, 2011, and the other was filed by the Official Committee of Unsecured Creditors on Sept. 20, 2011. The Agricultural Funding Plan provides for, among other things, (a) the transfer of substantially all of the assets of each of the Debtors to various acquiring entities, which will be 100% owned by AFS or its designee(s); (b) a settlement with AFS of the AFS Causes of Action in exchange for funding of the Plan; and (c) establishment and implementation of a Liquidation Trust for the purposes of (i) evaluating, prosecuting and resolving all Disputed Claims against the Debtors' Estates; (ii) prosecution of the Avoidance Actions, to the extent not settled or resolved prior to the Effective Date of the Plan; (iii) holding and liquidating any Estate Assets not transferred to DairyCo; and (iv) the making of distributions under the Plan. The Committee Plan provides that the Dairies will continue operations, and payments to Allowed Claims in the case will be made out of the operating revenues of the Reorganized Debtors pursuant to the terms of the Committee Plan. The Committee Plan provides that the Trustee will liquidate Heifer Haven following confirmation and use the proceeds to purchase producing cows on the market, with the replacements to remain subject to any lien of AFS. The Committee Plan provides that the trustee will manage the Dairies' assets during the Participation Period. Full-text copies of the Competing Plans are available for free at: http://bankrupt.com/misc/DAIRYPRODUCTION_DSbyAgriculturalFunding.pdf http://bankrupt.com/misc/DAIRYPRODUCTION_DSbyCommittee.pdf Disclosure Statement Hearing Date Same as with the Competing Plans, the U.S. Bankruptcy Court for the Middle District of Georgia will consider approval of the Plan Debtors' proposed Disclosure Statement on Nov. 3, 2011. About Dairy Production Baconton, Georgia-based Dairy Production Systems - Georgia LLC, dba Dairy Production Systems, was formed in November of 2008 and owns the operating assets acquired from Aurora Dairy - Georgia, LLC, exclusive of the real property owned by Aurora-Georgia. DPS Georgia owns approximately 3,490 head of cattle, along with equipment and dairy improvements located on a 1,065-acre farm leased from Aurora-Georgia. DPS Georgia filed for Chapter 11 bankruptcy protection (Bankr. M.D. Ga. Case No. 10-11752) on Oct. 7, 2010. Neil C. Gordon, Esq., Sean C. Kulka, Esq., and Zachary D. Wilson, Esq., at Arnall Golden Gregory LLP, in Atlanta, Ga., serve as the Debtor's bankruptcy counsel. Morgan Joseph TriArtisan LLC serves as their financial advisor and investment banker. DPS Georgia disclosed assets of $6,178,324 and debts of $19,182,907 as of the Petition Date. Affiliates Dairy Production Systems - Mississippi, LLC (Bankr. M.D. Ga. Case No. 10-11755), Dairy Production Systems, LLC (Bankr. M.D. Ga. Case No. 10-11754), Heifer Haven, LLC (Bankr. M.D. Ga. Case No. 10-11757), and New Frontier Dairy, LLC (Bankr. M.D. Ga. Case No. 10-11756), filed separate Chapter 11 petitions. Dairy Production Systems, LLC, estimated its assets and debts at $10 million to $50 million at the Petition Date. The cases are jointly administered, with Dairy Production Systems - Georgia as lead case. Ward Stone, Jr., and David L. Bury, Jr., at Stone & Baxter, LLP, in Macon, Ga., serve as the official committee of unsecured creditors' bankruptcy counsel. DALLAS STARS: IRS Objects to Firm's Plan to Exit Bankruptcy ----------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that the Dallas Stars' plan to exit Chapter 11 under the ownership of Vancouver businessman Tom Gaglardi hasn't scored with the Internal Revenue Service, which is urging the bankruptcy court to block the plan. As reported in the Oct. 6, 2011 edition of the TCR, the Bankruptcy Court is set to hold a hearing on Nov. 23, 2011, to consider approval of the disclosure statement and confirmation of the Joint Prepackaged Plan of Reorganization proposed by Dallas Stars L.P. and its affiliated debtors. The primary purpose of the prepackaged plan is to effectuate the sale of the NHL Stars franchise and certain related assets. The sale of the hockey team is currently open for parties interested in making a qualified bid or offer through late October. Dallas Sports & Entertainment, L.P., et al., serves as the stalking horse bidder for the Debtors' assets. Objections, if any, to the Disclosure Statement, the Solicitation Procedures, the Prepackaged Plan, any filed supplements, or the assumption and assignment of executory contracts and unexpired leases should be made in writing and be served on the notice parties so as to be actually received by 4:00 p.m. Eastern Time on Oct. 25, 2011. The meeting pursuant to Section 341(a) of the Bankruptcy Code will not be convened and is hereby cancelled unless the Prepackaged Plan is not confirmed by the Court within 90 days after the Commencement Date, the Court ruled. 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. EAST HARLEM: Seeks to Employ Lamonica Herbst as Attorneys --------------------------------------------------------- East Harlem Property Holdings, LP, seeks the authority of the U.S. Bankruptcy Court for the Southern District of New York to employ Lamonica Herbst & Maniscalco, LLP, as its counsel. The Debtor has selected Lamonica Herbst because it has considerable experience in matters of this nature. As counsel, Lamonica Herbst will: (a) provide legal advice with respect to the Debtor's powers and duties as debtor-in-possession in accordance with the provisions of the Bankruptcy Code and in the continued operation of the Debtor's business and the management of its property; (b) prepare, on behalf of the Debtor, all necessary schedules, applications, motions, answers, orders, reports, adversary proceedings and other legal documents required by the Bankruptcy Code and Federal Rules of Bankruptcy Procedure; (c) perform all other legal services for the Debtor that may be necessary in connection with the Debtor's attempt to reorganize its affairs under the Bankruptcy Code; and (d) assist the Debtor in the development and implementation of a plan of reorganization. Prior to the Petition Date, the Debtor paid Lamonica Herbst a retainer of $40,000, plus an additional $1,039 which is the filing fee required by the Court. The Debtor assures the Court that Lamonica Herbst is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About East Harlem East Harlem Property Holdings, LP, filed for Chapter 11 relief (Bankr. S.D.N.Y. Case No. 11-14368) on Sept. 15, 2011. Judge James M. Peck presides over the bankruptcy case. Adam P. Wofse, Esq., at Lamonica Herbst & Maniscalco, LLP, in Wantagh, New York, represents the Debtor as counsel. In its petition, the Debtor listed assets of between $100 million and $500 million and debts of between $10 million and $50 million. The petition was signed by Linda Greenfield, vice president of Harlem Housing, LLC, sole and managing member of East Harlem GP, LLC, general partner. EDWARD DEETS: Seeks to Employ Jeffrey Servin as Attorney -------------------------------------------------------- Deets Holding Company, Inc., seeks Bankruptcy Court permission to employ Jeffrey D. Servin, Esq., as its general bankruptcy counsel to aid in the completion of the necessary legal work associated with its bankruptcy case. The Debtor proposes to pay Mr. Servin based on his customary hourly rate which is presently at $275. The Debtor also agrees to reimburse Mr. Servin for his expenses. The Debtor provided Mr. Servin a retainer of $12,500, plus a $1,000 advance for filing fees, prior to the Petition Date. Mountain Top, Pa.-based Edward Deets Holding Company, Inc., filed for Chapter 11 bankruptcy (Bankr. M.D. Pa. Case No. 11-06869) on Oct. 6, 2011. The Debtor estimated assets of $10 million to $50 million and estimated debts of $1 million to $10 million. The petition was signed by Edward Deets, president. ELLIPSO INC: Judge Cuts Butzel Long's Fees Over Non-Disclosure -------------------------------------------------------------- Bankruptcy Judge S. Martin Teel, Jr., sanctioned the bankruptcy counsel of Ellipso, Inc., for failing to disclose potential conflicts of interest. The law firm of Tighe, Patton, Armstrong, Teasdale -- which merged in the spring of 2009 to become Butzel, Long, Tighe, Patton -- sought $148,689 for services rendered and $1,496 for expenses in its first interim fee application; and $18,872, consisting of $17,745 in attorneys' fees and $1,127 in costs as an administrative claim against the estate in its second and final fee application. The Court slashed $71,839 from the fees requested but the firm will remain entitled to out-of-pocket expenses. Creditors challenged Tighe Patton's fee applications on three broad bases: impermissible conflicts under 11 U.S.C. Sec. 328, charging for services that were not beneficial to the estate, and failure to disclose all of its connections with the debtor prior to appointment as counsel. The United States Trustee joined with the creditors as to the third basis. The creditors also challenge Tighe Patton's hourly rates. The Court's ruling noted that Thomas Patton, Esq. -- tpatton@butzeltp.com -- was a no-show at the hearing on Tighe Patton's fee application. Judge Teel called this "inexcusable," pointing out that the creditors' objections focused heavily on the firm's failure to disclose prior and ongoing representations. "Tighe Patton knew it would be a central issue," Judge Teel said, "Had Patton appeared and testified to the effect that he had merely overlooked the affiliated entities because he always thought of Ellipso as the client, he could have allayed many of the court's concerns." A copy of Judge Teel's Oct. 24, 2011 Memorandum Decision is available at http://is.gd/3g1vqffrom Leagle.com. About Ellipso Inc. Ellipso, Inc. is a privately held communications satellite system design company, now in bankruptcy. Ellipso's subsidiaries include Mobile Communications Holdings, Inc., ESBH, Inc., and Virtual Geosatellite, LLC. Through these subsidiaries, Ellipso has compiled this portfolio of intellectual property for various communications satellite systems and high performance technology. Utilizing unique and patented elliptical orbits, the systems were intended to provide low cost voice, data, facsimile, paging and geolocational services to subscribers around the world at prices lower than competing systems. Ellipso Inc. filed for Chapter 11 bankruptcy (Bankr. D. D.C. Case No. 09-00148) on Feb. 25, 2009. Kermit A. Rosenberg, Esq., at Tighe Patton Armstrong Teasdale, PLLC -- now Butzel, Long, Tighe, Patton -- in Washington, DC, served as the Debtor's counsel. In its petition, the Debtor estimated under $50,000 in assets and $1 million to $10 million in debts. On Jan. 19, 2010, the Court granted the United States Trustee's motion and directed the appointment of a chapter 11 trustee. ENCOMPASS GROUP: Sankaty Advisors Takes Over Firm ------------------------------------------------- Dow Jones' DBR Small Cap reports that H.I.G. Capital portfolio company Encompass Group Affiliates Inc., a logistics provider, has been taken over by lender Sankaty Advisors. Lawrenceville, Ga.-based Encompass Group Affiliates, Inc., is a public company specializing in the technology aftermarket service and supply chain known as reverse logistics. ENER1 INC: Common Shares to be Delisted from NASDAQ --------------------------------------------------- Ener1, Inc., received a Staff Determination Letter from The NASDAQ Stock Market LLC indicating that the Company did not comply with NASDAQ's filing requirements for continued inclusion in Listing Rules 5250(c)(1) because the Company failed to file its Form 10-Q for the period ended June 30, 2011, on a timely basis. In addition, the Notice states that NASDAQ Staff had determined that the Sept. 12, 2011, amendment to the Company's Line of Credit Agreement with Bzinfin S.A., dated June 29, 2011, violated NASDAQ's shareholder approval requirements contained in Listing Rules 5635(c) and (d). According to the Notice, the Staff determined that the issuance of shares of the Company's common stock as provided in the Amended LOC Agreement could result in a 20% or greater issuance at a discount to market and book value, and would be considered equity compensation because the issuance could result in shares issued at a discount to market to an affiliate of a Company director. As of Oct. 19, 2011, the Company had not filed the June 30, 2011, Form 10-Q with the SEC or submitted a plan to regain compliance with NASDAQ Listing Rules 5250(c)(1), which plan was due by Oct. 17, 2011. The Notice states that, unless the Company requests an appeal of the determination, trading of the Company's common stock will be suspended at the opening of business on Oct. 28, 2011, and a Form 25-NSE will be filed with the SEC to remove the Company's common stock from listing and registration on NASDAQ. The Company has elected not to file an appeal of the Notice with the NASDAQ Hearings Panel. About Ener1 Ener1 Inc. (OTCBB: ENEI) -- http://www.ener1.com/-- has three business lines, which the company conducts through three operating subsidiaries. EnerDel, an 80.5% owned subsidiary, which is 19.5% owned by Delphi, develops Li-ion batteries, battery packs and components such as Li-ion battery electrodes and lithium electronic controllers for lithium battery packs. EnerFuel develops fuel cell products and services. NanoEner develops technologies, materials and equipment for nanomanufacturing. On Aug. 15, 2011, Ener1 disclosed that the Company's financial statements for the year ended December 31, 2010 and for the quarterly period ended March 31, 2011 should no longer be relied upon and should be restated. The determination was made following an assessment of certain accounting matters related to the loans receivable owed to Ener1 by Think Holdings and accounts receivable owed to Ener1 by Think Global held by the Company, and the timing of the recognition of the impairment charge related to the Company's investment in Think Holdings originally recorded during the quarter ended March 31, 2011. Ener1 in September 2011 announced that it has entered into an agreement to restructure its 8.25% Senior Amortizing Notes with Goldman Sachs Asset Management, L.P., and other holders of the Notes. Ener1 also announced that its primary shareholder, BzinFin S.A., has extended the maturity of its $15-million line of credit from November 2011 to July 2013. The Company and Bzinfin S.A., on Sept. 12, 2011, entered into an amendment to the Line of Credit Agreement dated June 29, 2011. Under the LOC Agreement, Bzinfin established a line of credit for the Company in the aggregate principal amount of $15,000,000, of which approximately $11,241,000 has been borrowed by the Company. Under the terms of the Amendment, the maturity date for the repayment of all advances under the LOC Agreement and all unpaid accrued interest thereon was extended to July 2, 2013, and the interest rate at which all outstanding advances will bear interest from and after Sept. 12, 2011, was increased to 15% per year. EVERGREEN SOLAR: Meeting of Creditors Continued Until Nov. 3 ------------------------------------------------------------ The U.S. Trustee for Region 3 has continued until Nov. 3, 2011, at 3:00 p.m., prevailing Eastern Time, the meeting of creditors in the Chapter 11 case of Evergreen Solar, Inc. The meeting will be held at J. Caleb Boggs Federal Courthouse, 844 King Street, 5th Floor, Room 5209, Wilmington, Delaware. The meeting of creditors were originally held on Sept. 20. About Evergreen Solar Evergreen Solar, Inc. -- http://www.evergreensolar.com/-- develops, manufactures and markets String Ribbon solar power products using its proprietary, low-cost silicon wafer technology. The Company's patented wafer manufacturing technology uses significantly less polysilicon than conventional processes. Evergreen Solar's products provide reliable and environmentally clean electric power for residential and commercial applications globally. The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge Mary F. Walrath. The Company's balance sheet at April 2, 2011, showed $373,972,000 in assets, $455,506,000 in total liabilities, and a stockholders' deficit of $81,534,000. Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham McCutchen LLP, serve as general bankruptcy counsel to the Debtor. Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as co-counsel. Zolfo Cooper LLC is the financial advisor. Epiq Bankruptcy Solutions has been tapped as claims agent. In conjunction with the Chapter 11 filing, the Company entered into a restructuring support agreement with certain holders of more than 70% of the outstanding principal amount of the Company's 13% convertible senior secured notes. As part of the bankruptcy process the Company will undertake a marketing process and will permit all parties to bid on its assets, as a whole or in groups pursuant to 11 U.S.C. Sec. 363. An entity formed by the supporting noteholders, ES Purchaser, LLC, entered into an asset purchase agreement with the Company to serve as a "stalking-horse" and provide a "credit-bid" pursuant to the Bankruptcy Code for assets being sold. The supporting noteholders are represented by Michael S. Stainer, Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York. FNB UNITED: Completes Acquisition of Bank of Granite ---------------------------------------------------- FNB United Corp. completed the acquisition of Bank of Granite Corporation, parent company of Bank of Granite, and consummated a $310 million recapitalization. The two banks will operate separately until late spring of 2012 when, subject to receipt of regulatory approval, it is anticipated the consolidation process will be completed and will thereafter operate solely as CommunityONE Bank. "This is truly an unprecedented historic event for community banking in North Carolina," said Brian Simpson, the new CEO of FNB United. "We have successfully raised sufficient capital to restore two 100-year-old banking companies simultaneously. By combining them under one organization we have the opportunity to again be an economic driver in the communities we serve." The combination of FNB United and Bank of Granite has resulted in a North Carolina community banking organization with approximately $2.8 billion in assets, $2.4 billion in deposits and 63 full- service banking offices located in some of the state's most robust markets. Asheboro will serve as the corporate headquarters and central operations center. Simpson and Bob Reid, the new president of FNB United, led a successful $310 million recapitalization of FNB United, which paved the way for its acquisition of Bank of Granite and for the recapitalization of both banks. Lead investors in the recapitalization are The Carlyle Group and Oak Hill Capital Partners, each having invested approximately $79 million. "Our primary goals right now are exemplary customer service and a smooth transition for our people," Reid said. "FNB United and Bank of Granite employees have been re-energized, and we are all focused on accomplishing our mission." In addition to Simpson and Reid, FNB United and Bank of Granite will now be led by a seasoned management team that includes David Nielsen, (senior manager, KPMG; chief operating officer, Wachovia/Wells Fargo), chief financial officer; David Lavoie (senior risk manager, Bank of America), chief credit officer; Greg Murphy (FDIC liquidator, senior risk manager, Bank of America), chief workout officer; and Angus McBryde (treasury and balance sheet manager, Wachovia), treasurer. The new management team, which averages 26 years of banking experience, is supported by a new board of directors that includes Austin Adams (chief information officer, JP Morgan Chase, BankOne and First Union), chair; Jerry Licari (national banking practice leader, KPMG), chair, audit committee; Chan Martin (treasurer and senior risk executive, Bank of America), chair, risk committee; and Jerry Schmitt, (asset/liability committee chairman, First Union), chair, compensation committee. The new board also includes a representative from each lead investor, and two FNB United and one Bank of Granite legacy board members. "The closing of this transaction was achieved due to the dedicated efforts and cooperation of everyone involved - our investors, advisors and the leadership and shareholders of FNB United and Bank of Granite," Simpson said. "We all share a common mission of assuring that community banking remains strong in North Carolina, serving individuals, families and businesses in their own hometowns." The merger agreement provided that Bank of Granite shareholders received 3.375 shares of FNB United Corp.'s common stock in exchange for each share of Bank of Granite Corporation common stock they owned immediately prior to completion of the merger. FNB United shareholders will continue to own their existing shares of FNB United common stock after the merger and the recapitalization. No earlier than Jan. 1, 2012, FNB United will distribute to each record holder of FNB United common stock as of the close of business on Oct. 20, 2011, non-transferable warrants to purchase from FNB United one share of common stock for each four shares of FNB United common stock held by such holder as of the close of business on Oct. 20, 2011, at a purchase price of $0.16 per share. Sandler O'Neill + Partners and Raymond James & Associates, Inc., acted as financial advisors to FNB United, and Keefe, Bruyette & Woods, Inc., acted as financial advisor to Bank of Granite Corporation. Arnold & Porter LLP and Shell Bray Aycock Abel & Livingston PLLC served as legal counsel for FNB United, Parker Poe served as legal counsel for Bank of Granite Corporation and Simpson Thacher & Bartlett served as legal counsel for The Carlyle Group and Oak Hill Capital Partners. About FNB United Asheboro, N.C.-based FNB United Corp. (Nasdaq:FNBN) is the bank holding company for CommunityOne Bank, N.A., and the bank's subsidiary, Dover Mortgage Company. Opened in 1907, CommunityOne Bank -- http://www.MyYesBank.com/-- operates 45 offices in 38 communities throughout central, southern and western North Carolina. Through these subsidiaries, FNB United offers a complete line of consumer, mortgage and business banking services, including loan, deposit, cash management, wealth management and internet banking services. The Company incurred significant net losses in 2009, which continued in 2010 and 2011, primarily from the higher provisions for loan losses due to the significant level of nonperforming assets and the write-off of goodwill. Dixon Hughes PLLC, in Charlotte, North Carolina, in its independent auditors' report dated March 14, 2011 and attached to the financial statements, noted that the Company continued to incur significant net losses in 2010, primarily from the higher provisions for loan losses due to the significant level of non- performing assets. According to Dixon Hughes, the Company is significantly undercapitalized per regulatory guidelines and has failed to reach capital levels required in the Consent Order issued by the Office of the Comptroller of the Currency in 2010. These matters, the accounting firm maintains, raise substantial doubt about the Company's ability to continue as a going concern. Dixon Hughes also said that FNB United Corp. and Subsidiary has not maintained effective internal control over financial reporting as of Dec. 31, 2010, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's balance sheet at June 30, 2011, showed $1.72 billion in total assets, $1.83 billion in total liabilities and a $113.71 million total shareholders' deficit. Bankruptcy Warning On April 26, 2011, FNB United entered into investment agreements with The Carlyle Group and Oak Hill Capital Partners to recapitalize the Company, as well as a merger agreement with Bank of Granite Corporation. On June 16 and Aug. 4, 2011, the Company entered into subscription agreements with various accredited investors for the purchase and sale of its common stock. Together, the investment agreements with Carlyle and Oak Hill Capital and the subscription agreements contemplate the issuance of $310 million of common stock of the Company at $0.16 per share. Completion of the recapitalization, including the sale of common stock to The Carlyle Group and Oak Hill Capital Partners and the other investors, is subject to various conditions, certain of which are outside of the Company's control and may not be satisfied. The closing conditions to the recapitalization include receipt of requisite regulatory approvals and other customary closing conditions. No assurance can be given that all conditions will be satisfied timely or at all. The Company said if it fails to consummate the recapitalization, it is expected it will not be able to continue as a going concern, it may file for bankruptcy and the Bank may be placed into FDIC receivership. The equity financing transaction, if completed, will result in substantial dilution to the Company's current shareholders and could adversely affect the market price of the Company's common stock. FORESIGHT ENERGY: S&P Puts B- Corp. Credit Rating on Watch Dev. --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B-' corporate credit rating, on St. Louis, Mo.-based Foresight Energy LLC on CreditWatch with developing implications. "The developing implications means we could affirm, raise, or lower the existing ratings following the completion of our analysis. Key factors in our analysis will include a review of the company's capital spending plans and timing of its outlays, its plans for obtaining additional funding, and its potential need for covenant relief and progress in obtaining such relief, if needed," S&P related. "The CreditWatch listing reflects our concerns that construction delays, cost overruns, and higher overall spending in bringing new longwall operations on line could decrease Foresight's revolver availability further and, as covenants tighten in the coming quarters, could trigger covenant violations and constrain liquidity," said Standard & Poor's credit analyst Marie Shmaruk. "The company originally expected to have a second large-scale longwall operation on line by the end on 2011. However, the timing of this has been pushed back toward the end of the first quarter of 2012." "If Foresight is able to obtain sufficient additional funding and bank support during the next quarter or so that will allow it to finish the two longwall mines scheduled to reach full production in 2012, we could affirm the ratings or take a positive ratings action. On the other hand, failure to obtain funding or covenant relief could pressure the company's liquidity, resulting in a ratings downgrade," S&P stated. "We will monitor developments regarding the company's expansion plans and its funding requirements," Ms. Shmaruk continued. "Key factors in our analysis will be the company's ability to bring the new mines up in a reasonable time frame and generate sufficient cash flow to support operational and spending needs, as well as its ability to obtain additional funding and covenant relief, if needed." GELT PROPERTIES: Court OKs Cohen and Forman as Special Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania authorized Gelt Properties, LLC, et al., to employ Cohen and Forman as their special counsel to advise them upon all matters which may arise or which may be incident to the bankruptcy proceedings. About Gelt Properties Based in Huntington Valley, Pennsylvania, Gelt Properties, LLC, and affiliate Gelt Financial Corporation borrow money from traditional lenders and make loans to commercial borrowers. They also acquire and manage real estate. Gelt Properties and Gelt Financial filed for (Bankr. E.D. Pa. Case Nos. 11-15826 and 11- 15826) on July 25, 2011. Judge Magdeline D. Coleman presides over the cases. Albert A. Ciardi, III, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., serve as the Debtors' bankruptcy counsel. I The Debtor scheduled $20,340,725 in assets and $17,050,558 in debts. The petitions were signed by Uri Shoham, the Debtors' chief financial officer. GENTA INC: One Holdings Discloses 9.9% Equity Stake --------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, One Holdings, LLC, and Tim Rock disclosed that they beneficially own 47,705,536 shares of common stock of Genta Incorporated representing 9.99% of the shares outstanding. The percentage is calculated based upon (i) 429,392,767 shares of Common Stock issued and outstanding on Sept. 9, 2011, plus (ii) an additional 47,705,536 shares of Common Stock that may be issued upon conversion of the Notes or a total of 477,098,303 shares of Common Stock in the aggregate. A full-text copy of the Schedule 13D is available for free at http://is.gd/RGLPyq About Genta Incorporated Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB: GNTA) -- http://www.genta.com/-- is a biopharmaceutical company engaged in pharmaceutical (drug) research and development. The Company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. EisnerAmper LLP, in Edison, New Jersey, expressed substantial doubt about Genta's ability to continue as a going concern following the 2010 financial results. The independent auditors noted that of the Company's recurring losses from operations, negative cash flows from operations and current maturities of convertible notes payable. Amper, Politziner & Mattia, LLP, in Edison, New Jersey, did not include a going concern explanatory paragraph in its audit report on the Company's financial statements for fiscal 2009. The Company reported a net loss of $167.3 million on $257,000 of sales for 2010, compared with a net loss of $86.3 million on $218,000 for 2009. The Company's balance sheet at June 30, 2011, showed $6.44 million in total assets, $19.10 million in total liabilities, and a $12.65 million total stockholders' deficit. At June 30, 2011, Genta had cash and cash equivalents totaling $5.2 million, compared with $12.8 million at Dec. 31, 2010. Net cash used in operating activities during the first six months of 2011 was $7.3 million, or approximately $1.2 million per month. Bankruptcy Warning Presently, with no further financing, the Company projects that it will run out of funds during the third quarter of 2011. The Company currently does not have any additional financing in place. If the Company is unable to raise additional funds, it could be required to reduce its spending plans, reduce its workforce, license one or more of its products or technologies that it would otherwise seek to commercialize, sell certain assets, or even declare bankruptcy. The Company said there can be no assurance that it can obtain financing, if at all, or raise such additional funds, on terms acceptable to it. GENTA INC: White Flame Discloses 9.9% Equity Stake -------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, White Flame Ventures, LLC, and James Walsh disclosed that they beneficially own 47,705,536 shares of common stock of Genta Incorporated representing 9.99% of the shares outstanding. The percentage is calculated based upon (i) 429,392,767 shares of Common Stock issued and outstanding on Sept. 9, 2011, plus (ii) an additional 47,705,536 shares of Common Stock that may be issued upon conversion of the Notes or a total of 477,098,303 shares of Common Stock in the aggregate. A full-text copy of the Schedule 13D is available for free at http://is.gd/DbE2TU About Genta Incorporated Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB: GNTA) -- http://www.genta.com/-- is a biopharmaceutical company engaged in pharmaceutical (drug) research and development. The Company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. EisnerAmper LLP, in Edison, New Jersey, expressed substantial doubt about Genta's ability to continue as a going concern following the 2010 financial results. The independent auditors noted that of the Company's recurring losses from operations, negative cash flows from operations and current maturities of convertible notes payable. Amper, Politziner & Mattia, LLP, in Edison, New Jersey, did not include a going concern explanatory paragraph in its audit report on the Company's financial statements for fiscal 2009. The Company reported a net loss of $167.3 million on $257,000 of sales for 2010, compared with a net loss of $86.3 million on $218,000 for 2009. The Company's balance sheet at June 30, 2011, showed $6.44 million in total assets, $19.10 million in total liabilities, and a $12.65 million total stockholders' deficit. At June 30, 2011, Genta had cash and cash equivalents totaling $5.2 million, compared with $12.8 million at Dec. 31, 2010. Net cash used in operating activities during the first six months of 2011 was $7.3 million, or approximately $1.2 million per month. Bankruptcy Warning Presently, with no further financing, the Company projects that it will run out of funds during the third quarter of 2011. The Company currently does not have any additional financing in place. If the Company is unable to raise additional funds, it could be required to reduce its spending plans, reduce its workforce, license one or more of its products or technologies that it would otherwise seek to commercialize, sell certain assets, or even declare bankruptcy. The Company said there can be no assurance that it can obtain financing, if at all, or raise such additional funds, on terms acceptable to it. GSC GROUP: Black Diamond Files Plan, Offers 31% to 43% Recovery --------------------------------------------------------------- Black Diamond Capital Management LLC has filed a disclosure statement, dated Oct. 14, 2011, in support of its rival plan in the bankruptcy case of GSC Group Inc., and its affiliated debtors. This disclosure statement is not related to the disclosure statement for the Chapter 11 Trustee's for the Debtors, which has been approved by the U.S. Bankruptcy Court for the Southern District of New York and for which solicitation is ongoing. BDCM believes its plan should preserve more of the Debtors' value than does the Trustee's Plan, and will provide more attractive treatment for general unsecured claims than does the Trustee's Plan. The Trustee's Plan contemplates the wind-down and liquidation of the Debtors, with most of the Debtors' assets to be placed in, and distributions made from, a liquidating trust. The BDCM Plan, by contrast, would preserve the Debtors as reorganized going forward entities with ongoing administration, and no liquidating trust. The BDCM Plan provides for, among other things, distributions to Claim Holders, cancellation of Remaining Equity Interests in Debtor GSC Group, Inc., while retaining Common Equity Interests of GSC Group, Inc., in the Reorganized GSC Group, and substantive consolidation of the Debtors for the purposes of voting, confirmation and making distributions to Holders of Allowed Claims. The Plan does not provide for the reorganization or dissolution of SIF. The Designated Purchaser acquired GSC Group's equity interests in SIF in connection with the sale process outlined below. The Plan contemplates the payment in full in Cash of all Allowed Administrative Claims and Allowed Priority Tax Claims, as does the Trustee's Plan. The Plan also provides for the same treatment of Allowed Secured Claims (Class 1) and Other Priority Claims (Class 2) as does the Trustee's Plan. Allowed Secured Claims and Other Priority Claims are unimpaired under both the Trustee Plan and the BDCM Plan. The Plan and the Trustee's Plan, however, diverge in their treatment of Allowed General Unsecured Claims (Class 3) and Equity Interest Holders. Under BDCM's Plan, each Holder of an Allowed General Unsecured Claim will be permitted to elect either the Cash Option or Equity Option. If the unsecured creditor elects the Cash Option, such Holder shall receive its Cash Distribution Share, on or as soon as practicable after the latest of (I) the Effective Date; (II) the date on which such General Unsecured Claim becomes Allowed; (III) the date on which such General Unsecured Claim otherwise is due and payable; and (IV) such other date as mutually may be agreed to by and among such Holder and the Chapter 11 Trustee or the Reorganized Debtors, as the case may be. Based on the Trustee's assumptions as set forth in the disclosure statement for the Trustee Plan (See Trustee's Disclosure Statement at VI(A), the range of estimated distributions under the BDCM Plan will be between 31% and 43%, compared to between 17% and 26% under the Trustee Plan. The difference is attributable to an additional $2 million available for distribution under the BDCM Plan from the proceeds of the loan from BDCM and the proposed amendment to the Tax Indemnification Agreement under the BDCM Plan that would permit a larger distribution to Holders of Allowed General Unsecured Claims. If a Holder of an Allowed General Unsecured Claim elects the Equity Option, such Holder will receive: (A) one share of Reorganized GSC Group Preferred Stock with a liquidation preference equal to the lesser of (i) the face amount of such Holder's Allowed General Unsecured Claim and (ii) a pro rata portion of 80% of the net asset value of Reorganized GSC Group as of the Effective Date; and (B) such Holder's Equity Distribution Share of Reorganized GSC Group Convertible Class D Common Stock. If a Holder of General Unsecured Claim, whether Disputed or Allowed, does not elect either the Cash Option or the Equity Option on or before (i) the Voting Deadline or (ii) solely with respect to rejected executory contracts discussed in Section 6.2 of the Plan, the Rejection Claim Deadline, such Holder will be deemed to have elected the Cash Option. Under the BDCM Plan, Holders of Common Equity Interests (Class 4) will retain all rights on account of such Common Equity Interests; provided, however, that such Common Equity Interests will be diluted to 51% of total Reorganized Common Stock as a result of the issuance of the Reorganized GSC Group Convertible Class D Common Stock. Estimated recovery value is indeterminate. This Class is impaired and entitled to vote. Holders of Remaining Equity Interests will not receive or retain any property or interest in property on account of such Remaining Equity Interests. On the Effective Date, all Remaining Equity Interests will be canceled, extinguished and discharged. Estimated recovery value is 0%. This Class is impaired and not entitled to vote. Adam Goldberg, Esq., at Latham & Watkins, in New York, N.Y., and Douglas Bacon, Esq., at Latham & Watkins, in Chicago, Ill., represent Black Diamond Capital Management, LLC, as counsel. A copy of the disclosure statement explaining the BDCM Plan is available for free at: http://bankrupt.com/misc/gscgroup.bdcmDS.dkt820.pdf About GSC Group Florham Park, New Jersey-based GSC Group, Inc. -- http://www.gsc.com/-- is a private equity firm specializing in mezzanine and fund of fund investments. Originally named Greenwich Street Capital Partners Inc. when it was a subsidiary of Travelers Group Inc., GSC became independent in 1998 and at one time had $28 billion of assets under management. Market reverses, termination of some funds, and withdrawal of customers' investments reduced funds under management at the time of bankruptcy to $8.4 billion. GSC Group filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow, Esq., at Kaye Scholer LLP, serves as the Debtor's bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice and claims agent. Capstone Advisory Group, LLC, is the Debtor's financial advisor. The Debtor estimated its assets at $1 million to $10 million and debts at $100 million to $500 million as of the Chapter 11 filing. Since Jan. 7, 2011, the Debtors have been operated by James L. Garrity Jr., as Chapter 11 trustee for the Debtors. No committee of unsecured creditors has been appointed in the Chapter 11 Cases. GSC GROUP: Nov. 18 Confirmation Hearing on Trustee Plan Set ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has approved the disclosure statement filed by James L. Garrity, Jr., as Chapter 11 Trustee for the estates of GSC Group, Inc., et al., explaining the Trustee's Chapter 11 Plan for the Debtors. The Court has set Nov. 8, 2011, at 4:00 p.m. as the deadline for the filing of ballots accepting or rejecting the Plan. The confirmation fearing will be held on Nov. 18, 2011, at 10:00 a.m. Objections to confirmation of the Plan, if any, must be filed, no later than 4:00 p.m. on Nov. 9, 2011. As reported in the TCR on Oct. 20, 2011, under the Trustee's Amended Disclosure Statement dated Oct. 4, 2011, these disclosures were noted: * The Plan does not provide for the reorganization or dissolution of GSC Secondary Interest Fund, LLC. The Designated Purchaser acquired GSC Group's equity interests in SIF in connection with the sale process. The Chapter 11 Trustee does not believe that there are any pending prepetition Claims against SIF. The Trustee intends to file a motion seeking the dismissal of SIF's Chapter 11 Case. * The estimated recovery for Holders of General Unsecured Claims is based on a number of assumptions and estimates. Although the Chapter 11 Trustee believes these assumptions and estimates are reasonable, there can be no assurance that recoveries will not be higher or lower than the estimated recovery of between 42-84%. * The Chapter 11 Trustee presently anticipates appointing Robert Manzo of Capstone as Liquidating Trustee. The Liquidating Trust will terminate five years from the Effective Date. * The Liquidating Trustee will be vested with significant discretion to take actions to maximize the total value that can be distributed to Holders of Trust Units. The Chapter 11 Trustee anticipates that a significant amount of cash will be made available to the Liquidating Trust on the Effective Date. * On the Effective Date, the Debtors will cease all operations and administration of the Plan will become the general responsibility of the Liquidating Trustee. The Chapter 11 Trustee will be relieved of his duties and obligations to the estate under the Bankruptcy Code, Bankruptcy Rules and Local Bankruptcy Rules. * The U.S. Trustee has raised informally with the Chapter 11 Trustee certain objections to the various provisions in the Disclosure Statement and Plan, including those provisions providing for releases, injunctions, exculpation and limitations of liability. The Chapter 11 Trustee and the U.S. Trustee have agreed that consideration of the U.S. Trustee's informal objections to these provisions will be deferred to confirmation of the Plan rather than adjudicated in terms of the adequacy of information in the Disclosure Statement. A full-text copy of the Amended Disclosure Statement is available for free at http://bankrupt.com/misc/GSCGRP_AmnddDSOct4.PDF As noted in the Sept. 1, 2011 edition of the Troubled Company Reporter, the Chapter 11 trustee for GSC Group Inc. completed the sale of business on July 26 and filed a liquidating Chapter 11 plan and explanatory disclosure statement in late August. The disclosure statement says that unsecured creditors with claims aggregating between $12 million and $15 million should recover about 84%. Bloomberg relayed that the bankruptcy court authorized the trustee to sell the business to Black Diamond Capital Finance LLC, as agent for the secured lenders. The sale took care of secured claims. A minority group of secured lenders filed an appeal from the order allowing the sale. The appeal remains outstanding, the disclosure statement noted. Through a suit in state court, the minority lenders failed to halt Black Diamond from completing the sale. U.S. Bankruptcy Judge Arthur Gonzalez, according to Bloomberg, previously said that the trustee's plan was the "only plausible exit strategy." The price paid by the lenders' agent was designed for full payment on $256.8 million in secured claims, with $18.6 million cash left over. Black Diamond as agent bought most assets with a $224 million credit bid, a $6.7 million note, $5 million cash, and debt assumption. About GSC Group Florham Park, New Jersey-based GSC Group, Inc. -- http://www.gsc.com/-- is a private equity firm specializing in mezzanine and fund of fund investments. Originally named Greenwich Street Capital Partners Inc. when it was a subsidiary of Travelers Group Inc., GSC became independent in 1998 and at one time had $28 billion of assets under management. Market reverses, termination of some funds, and withdrawal of customers' investments reduced funds under management at the time of bankruptcy to $8.4 billion. GSC Group filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow, Esq., at Kaye Scholer LLP, serves as the Debtor's bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice and claims agent. Capstone Advisory Group, LLC, is the Debtor's financial advisor. The Debtor estimated its assets at $1 million to $10 million and debts at $100 million to $500 million as of the Chapter 11 filing. Since Jan. 7, 2011, the Debtors have been operated by James L. Garrity Jr., as Chapter 11 trustee for the Debtors. No committee of unsecured creditors has been appointed in the Chapter 11 Cases. H&H BAGELS: Faces Possible Eviction From New York Plant ------------------------------------------------------- Dow Jones' DBR Small Cap reports that H&H Bagels, the New York institution that bills itself as the world's largest manufacturer of bagels, faces a possible eviction from its Manhattan plant, in what would be another blow to an ailing company. HARRISBURG, PA: Covanta Energy Objects to Ch. 9 Bankruptcy Filing ----------------------------------------------------------------- Carolina Bolado at Bankruptcy Law360 reports that a Covanta Energy Corp. unit on Wednesday objected to Harrisburg, Pa.'s recent Chapter 9 bankruptcy petition, saying the city is prohibited by state law to file for bankruptcy. Law360 relates that Covanta Harrisburg Inc., which is owed $23.6 million by the Pennsylvania capital, asked the bankruptcy court to dismiss the city's petition because state law specifically prohibits financially distressed cities of a so-called third class from filing for bankruptcy relief before July 1, 2012. 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. HARRISBURG, PA: Mayor Seeks Help to Avert Takeover -------------------------------------------------- American Bankruptcy Institute reports that a day after Pennsylvania's governor declared a fiscal emergency for Harrisburg, the city's mayor said that she would try to work with a divided city council and creditors to design a recovery plan to avoid a state takeover. As reported in the Troubled Company Reporter on Oct. 27, 2011, Harrisburg, Pennsylvania's capital, was declared by the governor to be in a financial emergency. The governor, Tom Corbett, was acting under power given him in legislation he signed into law Oct. 20. If the city doesn't implement a recovery plan acceptable to the state within 30 days, the governor has the right to appoint a receiver. The appointment presumably may occur in time for the receiver to seek dismissal of Harrisburg's Chapter 9 municipal reorganization at a Nov. 23 hearing in U.S. Bankruptcy Court. The state filed a motion to dismiss the bankruptcy two days after the Oct. 11 bankruptcy filing. Bankruptcy was purportedly authorized by a 4-3 vote of the city council, without signature of the mayor. 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. HAWAIIAN TELCOM: Moody's Assigns 'B1' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service has assigned a B1 Corporate Family Rating (CFR) to Hawaiian Telcom Communications, Inc. Moody's has also assigned a B1 rating to the Company's $300 million senior secured term loan due 2015 and a Ba1 rating to Hawaiian Telcom's $30 million priority senior secured revolving credit facility due 2015. The outlook is stable. RATINGS RATIONALE Hawaiian Telcom's B1 corporate family rating reflects its diverse base of recurring revenues, strong market share, modest leverage and adequate cash flows. These positives are offset by the company's relatively small scale, the tough competition from cable triple-play bundled service and the long term challenges associated with wireless substitution. The B1 rating reflects Moody's view that Hawaiian Telcom will successfully deploy video services and further stabilize its consumer revenue base. The ratings incorporate a very narrow tolerance for operational missteps, particularly with respect to the company's IPTV rollout. "Hawaiian Telcom has made solid progress since emerging from bankruptcy," commented Moody's Senior Vice President Dennis Saputo. "Management has restored the basic operating structure and stabilized revenues. Now they must successfully roll out video services to shore up their residential customer base," Saputo continued. Hawaiian Telcom has a strong competitive position within the market for business services. The company's sophisticated data offerings, broad asset base and ILEC tradition for reliability appeal to enterprise customers. Hawaiian Telcom offers advanced data services, such as MPLS, Ethernet and VoIP, and plans to continue to enhance its offers. However, like many wireline telcos, Hawaiian Telcom has lost market share in the small business segment to the cable competitors. Unlike its business product offerings, Hawaiian Telcom has historically had an inferior product lineup for residential customers. Cable competitors have gained significant market share with triple-play bundles. Hawaiian Telcom, forced to wait until bankruptcy exit to rollout video, will need to move aggressively to catch up. The company has received a TV franchise for Oahu and has started commercial deployment of an IPTV offering. The success of this product is critical to Hawaiian Telcom's future viability, as it will strengthen its competitive position and improve customer retention. The ratings for the debt instruments reflect both the overall probability of default of Hawaiian Telcom, to which Moody's has assigned a probability of default rating (PDR) of B2, and loss given default assessments. The Ba1 (LGD1 - 0%) rating of the $30 million senior 1st lien secured revolving credit facilities reflects its seniority of claim, its small size relative to the capital structure and its senior priority in right of payment ahead of the term loan creditors. The $300 million secured term loan is rated B1 (LGD3 - 36%), in line with the corporate family rating. Due to its priority treatment through the recent bankruptcy restructuring, Moody's ranks the company's unfunded pension obligation equally with the senior secured term loan. This places the preponderance of obligations at the same standing and results in a rating for the term loan in line with the overall B1 family rating. Hawaiian Telcom has very good liquidity with approximately $77 million in cash as of June 30, 2011 and a fully available $30 million revolver. Moody's anticipates that Hawaiian Telcom will maintain at least $50 million in cash over the next 12-18 months and that the company will not draw upon the revolver over that timeframe. Moody's could lower Hawaiian Telcom's ratings if leverage were to trend toward 4.0x (Moody's adjusted) and free cash flow were to be negative, both on a sustained basis. Additionally, downward rating action would result from operational missteps, particularly related to the company's video services rollout. If service rollout was unsuccessful, as evidenced by high churn or low penetration, downward ratings action could occur. Moody's could raise Hawaiian Telcom's ratings if leverage were to trend toward 2.75x and free-cash-flow to debt were to reach the mid-single-digit percentage range. Moody's has assigned these ratings: Hawaiian Telcom Communications, Inc. -- Corporate Family Rating -- B1 -- Probability of Default Rating -- B2 -- $30m Priority Senior Secured RCF -- Ba1, LGD1-0% -- $300m Senior Secured Term Loan -- B1, LGD3-36% -- SGL / Short-Term Rating -- SGL-1 -- Outlook -- Stable Please see ratings tab on the issuer/entity page on Moodys.com for the last credit rating action and the rating history. The principal methodology used in rating Hawaiian Telcom was the Global Telecommunications Industry Methodology, published December 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009 (and/or the Government-Related Issuers methodology, published July 2010). Hawaiian Telcom is a telecommunications provider in the state of Hawaii with approximately 429,000 access lines and 101,000 high speed internet customers on the islands of Oahu, Maui, Hawaii, Kauai, Molokai and Lanai. For the twelve months ended 6/30/11, Hawaiian Telcom generated $401 million in revenues. HEALTHWAYS INC: S&P Lowers Counterparty Credit Rating to 'BB-' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its counterparty credit rating on Healthways by one notch to 'BB-' from 'BB'. At the same time, Standard & Poor's lowered the issue-level ratings on Healthways' senior secured credit facilities to 'BB-' from 'BB'. "The recovery rating remains '3', which indicates our expectation for a meaningful (50% to 70%) recovery for debtholders in the event of payment default," S&P said. "The downgrade is based on our view that Healthways' business and financial risk profiles will be weakened as a result of the loss of the Cigna Corp. (BBB/Stable/A-2) contract, assuming no substantial revenue and earnings offset from other near-term growth prospects," said Standard & Poor's credit analyst James Sung. The impact of the contract loss is significant given that Cigna is by far Healthways' largest contract and one of its most profitable. "For full-year 2011, we expect the Cigna contract to generate approximately $110 million to $115 million of revenues, or 15%-17% of total consolidated revenues of $672 million to $710 million. In addition, we estimate EBITDA margins on the contract at 20%-30%, which is considerably higher than our projected EBITDA margin of 17%-18% on the consolidated business for full- year 2011," S&P related. "The stable outlook is based on our expectation that Healthways has sufficient scale and product expertise to continue competing effectively in the specialized disease management and wellness markets. However, key credit weaknesses that we do not foresee improving over the next year will likely continue to constrain the company's business profile. These weaknesses primarily include the company's relatively narrow product scope and the increasingly competitive nature of the industry, as reflected by the Cigna insourcing decision," S&P said. "Over the next 12 months, we would consider an upgrade if the company is successful in significantly offsetting the loss of the Cigna contract through new contract wins, renewals, and expansions, and if this translates into year-over-year EBITDA stabilization, stronger EBITDA margins, and improved credit measures. We would consider key credit measures such as an improvement in lease-adjusted debt to EBTIDA of 2x-3x, maintenance of lease-adjusted debt-to-capital ratio of 35%-45%, maintenance of EBITDA interest coverage above 7x, and adjusted funds from operation to debt of 25%-30%. Conversely, we would consider a downgrade if the company is unsuccessful in executing new growth opportunities and is unable to realign its cost structure to adequately protect operating margins and earnings. Key credit measures would have to fall below our relatively conservative expectations for a downgrade," S&P said. HEALTHSPRING INC: Moody's Reviews Ba1 IFS Rating for Upgrade ------------------------------------------------------------ Moody's Investors Service has placed the Ba1 insurance financial strength (IFS) rating of HealthSpring, Inc.'s (HealthSpring, NYSE: HS) operating subsidiaries under review for possible upgrade following the announcement that CIGNA Corporation (CIGNA; NYSE: CI, A2 for IFS) had entered into a definitive agreement to acquire HealthSpring. The Ba3 rating on HealthSpring's senior secured credit facility and HealthSpring's Ba3 corporate family rating remain unchanged, with a stable outlook. RATINGS RATIONALE Moody's anticipates that HealthSpring's outstanding bank term loan will be paid off in full by HealthSpring at the close of the transaction. Upon repayment of the loan, Moody's will withdraw the Ba3 corporate family rating and Ba3 senior secured debt rating at HealthSpring, Inc. The transaction, which is subject to regulatory approval, is expected to close during the first half of 2012. The rating agency stated that its review will focus on the completion of the transaction and CIGNA's level of support for the operating subsidiaries being acquired from HealthSpring and its integration plans. With projected annual revenues of over $5 billion in the Medicare Advantage and Prescription Drug Plan (PDP) segment, HealthSpring provides significant diversity to both CIGNA's premium and earnings streams. Upon the close of the transaction, Moody's expects that HealthSpring's IFS rating will be aligned with the higher rating of CIGNA's operating companies. The principal methodology used in rating HealthSpring was Moody's Rating Methodology for U.S. Health Insurance Companies published in May 2011. These ratings were placed under review for possible upgrade: HealthSpring of Tennessee, Inc. -- insurance financial strength rating at Ba1; HealthSpring of Alabama, Inc. -- insurance financial strength rating at Ba1; Bravo Health of Pennsylvania, Inc. -- insurance financial strength rating at Ba1. HealthSpring, Inc. is headquartered in Nashville, Tennessee. For the first six months of 2011 total revenue was $2.8 billion with Medicare Advantage membership (excluding Part D stand alone) of approximately 336,400. As of June 30, 2011 the company reported shareholders' equity of approximately $1.6 billion. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations. INNKEEPERS USA: Exits Ch. 11 After Sale to Cerberus --------------------------------------------------- Innkeepers USA Trust and its affiliates disclosed that the company has successfully completed its restructuring and emerged from Chapter 11. The Company emerged following the closing of the $1.02 billion sale of 64 Innkeepers' hotels to a joint venture between the private equity firm Cerberus Capital Management, L.P. and the real estate investment trust Chatham Lodging that was approved by the U.S. Bankruptcy Court, Southern District of New York. Chatham Lodging had previously purchased five of the Company's hotels that served as collateral for loan trusts serviced by LNR Partners, LLC, for approximately $195 million. A substantial majority of the Company's unsecured creditors are expected to receive a recovery of more than 90 cents on the dollar. "This is a great accomplishment," said Innkeepers' Chief Restructuring Officer Marc A. Beilinson. "Despite conventional wisdom, we have demonstrated that the myriad complex issues surrounding commercial mortgage backed securities can be effectively resolved utilizing the Chapter 11 process." Chapter 11 provided several key advantages that have strengthened Innkeepers and enhanced its ability to compete. "First of all, Chapter 11 gave us the time and financial resources from our debtor-in-possession financing to renovate and revitalize the properties," Beilinson said. "It also allowed us to maintain good relationships with our franchisors and vendors. As a result, the Company is emerging with higher revenues and stronger operations than when it entered Chapter 11." "In a little over a year, we achieved a tremendous outcome for our secured and unsecured creditors, franchisors, guests and the approximately 3,500 people who continue to be employed at the hotel properties," Beilinson said. Kirkland & Ellis LLP is Innkeepers' lead restructuring counsel and Moelis & Company LLC is its financial advisor. Alix Partners provided restructuring services. Marc Beilinson is a principal at Beilinson Advisory Group. 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. ISTAR FINANCIAL: Sells All Interest in Oak Hill Advisors -------------------------------------------------------- iStar Financial Inc. sold substantially all of its interests in Oak Hill Advisors, L.P., and related entities in an all cash transaction. The transaction was completed in part through sales of interests to an unrelated third party and to the principals of Oak Hill, and in part through a redemption of interests by Oak Hill Advisors, L.P. iStar expects to record a pre tax gain in the fourth quarter in the range of approximately $30 million on the carrying value of the investment. Glenn R. August, a director of iStar who was appointed to its board of directors in connection with iStar's acquisition of the Oak Hill interests in 2005, is the president and senior partner of Oak Hill Advisors, L.P., and acquired a portion of the interests in the transaction. Mr. August recused himself from the deliberations of iStar's board with respect to the transaction. About iStar Financial New York-based iStar Financial Inc. (NYSE: SFI) provides custom- tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust, provides innovative and value added financing solutions to its customers. The Company's balance sheet at June 30, 2011, showed $8.29 billion in total assets, $6.55 billion in total liabilities, and $1.74 billion in total equity. * * * As reported by the TCR on March 29, 2011, Fitch Ratings has upgraded the Issuer Default Rating to 'B-' from 'C'. The upgrade of iStar's IDR is based on the improved liquidity profile of the company, pro forma for the new senior secured credit agreement (the new financing) that extends certain of the company's debt maturities, relieving the overhang of significant secured debt maturities in June 2011. In July 2010, Standard & Poor's Ratings Services lowered its long- term counterparty credit rating on iStar Financial to 'CCC' from 'B-'. The outlook is negative. iStar's limited funding flexibility and the severe credit quality deterioration in its loan portfolio continue to put negative pressure on the rating, S&P said. As reported by the Troubled Company Reporter on March 22, 2011, Standard & Poor's said that it raised its counterparty credit rating on iStar Financial Inc. to 'B+' from 'CCC' and removed it from CreditWatch where it was placed with positive implications on Feb. 23. The outlook is stable. "The upgrade reflects the company's closing of a $2.95 billion senior secured credit facility, which it will use to refinance the company's existing secured bank facilities and repay a portion of the company's unsecured debt," said Standard & Poor's credit analyst Jeffrey Zaun. If S&P's analysis of the new secured facility indicates 100% or more collateral coverage, S&P will rate the issue 'BB-'. If S&P's analysis of collateral indicates less than 100% coverage, S&P will rate the issue 'B+'. JER/JAMESON MEZZ: Jameson Ch. 11 Will Not Impact Operations ----------------------------------------------------------- The Jameson Inn hotel brand is a profitable, highly recognized name in the economy hotel segment. The brand has been awarded the top spot in the coveted Market Metrix Hospitality Index for most of the last five years. The brand is licensed to independent operators with its largest portfolio being managed by Park Management Group LLC (PMG). PMG is an independent hotel management company that provides management services to 150 hotels operating under six brands and employs 2,200 property level associates. On October 25, the corporate owner of the largest group of Jameson Inn properties filed for bankruptcy protection. The filing covers 101 properties flagged as Jameson Inn and 2 as Signature Inn. These properties were financed with a complex structure of CMBS and mezzanine loans that matured in August. Like many real estate backed companies, securing new financing has proven difficult in the current lending environment. The bankruptcy filing was not initiated by PMG, Jameson Inns, Inc, or any unsecured creditor. This action was taken voluntarily by the property entities due to debt maturity issues and will stop property foreclosures that were scheduled for November 1st. This filing will not jeopardize the ongoing operations or employees at these properties, the high-quality guest experience or the recognizable value that is the hallmark of the Jameson Inns brand. 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. A mezzanine lender for the Jameson Inns Inc. hotel chain put a mezzanine borrower -- JER/Jameson Mezz Borrower II LLC -- into Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13338) on Oct. 18 in Delaware to prevent foreclosure by another mezzanine lender. Gramercy Loan Servicing LLC, as lender on a $40 million obligation, previously took over a mezzanine borrower to the hotel chain, which has 100 properties in 12 states. Gramercy was facing foreclosure on Oct. 19 of another $40 million mezzanine loan held by Colony Capital LLC from Santa Monica, California. The hotels have a total of $335 million in financing, according to a court filing. At the top of the list is a $175 million mortgage loan with Wells Fargo Bank NA serving as special servicer. There are four tranches of mezzanine loans, each for $40 million. All of the mezzanine loans matured in August, with Gramercy taking over its mezzanine borrower at the time. The Chapter 11 filing had the effect of preventing Colony from wiping out Gramercy's interest. The Jameson properties are operated under the names Jameson Inn and Signature Inn. The hotels are based in Smyrna, Georgia. The mezzanine lender in Chapter 11 said its assets are worth more than $100 million while debt is less than $50 million. JER/JAMESON MEZZ: 2nd Unit With Colony Debt Seeks Chapter 11 ------------------------------------------------------------ Alex Ortolani at Bankruptcy Law360 reports that a second affiliate of Jameson Inns Inc. filed for bankruptcy protection in Delaware on Wednesday, leaving private equity firm Colony Capital LLC with a combined $80 million in investments under court protection. Law360 relates that JER/Jameson Mezz Borrower I LLC, a mezzanine borrower that is part of Jameson Inns' financing structure, holds $40 million of Colony debt, according to an Oct. 19 filing by the manager of a separate Jameson Inns unit. The bankruptcy petition filed Wednesday said the mezzanine borrower had estimated liabilities of $10 million to $50 million. 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. A mezzanine lender for the Jameson Inns Inc. hotel chain put a mezzanine borrower -- JER/Jameson Mezz Borrower II LLC -- into Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13338) on Oct. 18 in Delaware to prevent foreclosure by another mezzanine lender. Gramercy Loan Servicing LLC, as lender on a $40 million obligation, previously took over a mezzanine borrower to the hotel chain, which has 100 properties in 12 states. Gramercy was facing foreclosure on Oct. 19 of another $40 million mezzanine loan held by Colony Capital LLC from Santa Monica, California. The hotels have a total of $335 million in financing, according to a court filing. At the top of the list is a $175 million mortgage loan with Wells Fargo Bank NA serving as special servicer. There are four tranches of mezzanine loans, each for $40 million. All of the mezzanine loans matured in August, with Gramercy taking over its mezzanine borrower at the time. The Chapter 11 filing had the effect of preventing Colony from wiping out Gramercy's interest. The Jameson properties are operated under the names Jameson Inn and Signature Inn. The hotels are based in Smyrna, Georgia. The mezzanine lender in Chapter 11 said its assets are worth more than $100 million while debt is less than $50 million. KINGSBURY CORP: Seeks to Hire Donnelly Penman as Inv. Banker ------------------------------------------------------------ Kingsbury Corporation seeks the authority of the U.S. Bankruptcy Court for the District of New Hampshire to employ Donnelly Penman & Partners as its investment banker. The Debtor has selected Donnelly Penman for its considerable experience in financial and investment banking matters in general and in bankruptcy cases in particular as well as its familiarity with the automotive and equipment industries. As investment banker, Donnelly Penman will, among other things: (a) prepare information describing the Debtor, its operations and financial performance; (b) conduct sell-side due diligence on the Debtor; (c) assist the Debtor and its counsel in conducting an auction of the Debtor under the auspices of the Bankruptcy Court; and (d) provide relevant testimony at hearings before the Bankruptcy Court or other courts as the Debtor may request. The Debtor proposes to pay Donnelly Penman a cash fee out of the Transaction Consideration for (i) 250,000 in the event the Cumulative Consideration is less than $6 million, and (ii) $250,000 plus 5% of the Cumulative Consideration above $6 million in the event the Cumulative Consideration exceeds $6 million. The Debtor will pay a non-refundable cash advisory fee to Donnelly Penman to the extent its retention has not been terminated as of the indicated dates: (i) $17,500 on approval of the retention by the Court; and (ii) $17,500 on the first day of each month commencing Nov. 1, 2011, and continuing through the completion of a Transaction or termination of the retention. The Debtor will reimburse Donnelly Penman for reasonable, documented out-of-pocket expenses, provided however that the expense reimbursement will not exceed $15,000. The Retention Agreement also contains standard indemnification and exculpation agreements consistent with the terms and provisions used in other chapter 11 cases, and consistently approved by the courts reviewing those provisions. The Debtor believes that Donnelly Penman is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). 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, serves as counsel to the Debtors. Kingsbury estimated assets and debts of up to $50 million in its Chapter 11 petition. KOREA TECHNOLOGY: Examiner Wins Court Approval to Hire Counsel -------------------------------------------------------------- Mark D. Hashimoto, in his capacity as examiner of the jointly- administered bankruptcy estates of Korea Technology Industry America, Inc., Uintah Basin Resources, LLC, and Crown Asphalt Ridge, LLC, sought and obtained the authority of the U.S. Bankruptcy Court for the District of Utah to retain George Hofmann and the firm of Parsons Kinghorn Harris, P.C., as his counsel. The Examiner is charged to make certain findings and issue a report concerning several matters. The Examiner anticipates that his participation in hearings may be necessary, and believes it is appropriate to be represented through counsel at hearings. As counsel, Mr. Hofmann will: (a) advise and consult with the Examiner concerning questions arising in the conduct of his examination; (b) assist in the preparation of pleadings, motions, notices, and orders as are required within the Examiner's charge; (c) assist in conducting discovery and investigations as required to fulfill the Examiner's duties; and (d) advise the Examiner generally regarding his legal rights and duties. The Examiner proposes that the Debtors pay Parsons and Kinghorn based on the firm's normal hourly rates which ranges from $140 to $350 and $70 to $120 for paraprofessionals. The Examiner believes that George Hofmann and the firm of Parsons and Kinghorn do not hold or represent any interest adverse to himself or the Debtors' estates and that George Hofmann and the firm of Parsons and Kinghorn are disinterested persons within the meaning of Section 101(14) of the Bankruptcy Code. About Korea Technology Korea Technology Industry America, Inc., is a subsidiary of Seoul- based Korea Technology Industry Co. that tried to squeeze crude oil from Utah's sandy ridges. Korea Technology Industry America, Uintah Basin Resources LLC, and Crown Asphalt Ridge L.L.C., filed separate Chapter 11 bankruptcy petitions (Bankr. D. Utah Case Nos. 11-32259, 11-32261, and 11-32264) on Aug. 22, 2011. The cases are jointly administered under KTIA's case. Steven J. McCardell, Esq., and Kenneth L. Cannon II, Esq., at Durham Jones & Pinegar, in Salt Lake City, serve as the Debtors' counsel. The Debtors listed US$35,246,360 in assets and US$38,751,528 in debts. Proofs of claim are due by Oct. 15 and government proofs of claim are due by Feb. 18, 2012. LOS ANGELES DODGERS: McCourt, Selig Dodgers Showdown Postponed -------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that a trial that was to determine who would control the Los Angeles Dodgers -- owner Frank McCourt or Major League Baseball Commissioner Bud Selig -- has been postponed a month, a new court filing said. 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. 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. At a trial beginning Oct. 31, the bankruptcy judge will decide if bankruptcy law permits the team to sell broadcasting rights while overriding provisions in the existing television contract with Fox Entertainment Group Inc. The judge will also decide whether to strip the club of the exclusive right to propose a Chapter 11 plan. The team's proposal calls for holding an auction, which Fox says violates the existing broadcasting license. LA JOLLA: Has 76.5 Million Outstanding Common Shares ---------------------------------------------------- La Jolla Pharmaceutical Company reported that since Oct. 14, 2011, it had converted approximately 88 shares of Series C-1 1 Convertible Preferred Stock into a combined total of 14,664,333 shares of common stock. Following these conversions, the Company had a total of 76,560,644 shares of common stock issued and outstanding as of Oct. 25, 2011. About La Jolla Pharmaceutical San Diego, Calif.-based La Jolla Pharmaceutical Company (OTC BB: LJPC) -- http://www.ljpc.com/-- is a biopharmaceutical company that has historically focused on the development and testing of Riquent as a treatment for Lupus nephritis. The Company's balance sheet at June 30, 2011, showed $5.81 million in total assets, $6.87 million in total liabilities, all current, $5.32 million in Series C-1 redeemable convertible preferred stock, and a $6.38 million total stockholders' deficit. The Company reported a net loss of $3.76 million on $0 of revenue from collaboration agreement for the year ended Dec. 31, 2010, compared with a net loss of $8.63 million on $8.12 million of revenue from collaboration agreement during the prior year. The Company has a history of recurring losses from operations and, as of June 30, 2011, the Company had no revenue sources, an accumulated deficit of $429,876,000 and available cash and cash equivalents of $5,792,000 of which up to $5,325,000 could be required to be paid upon the exercise of redemption rights under the Company's outstanding preferred securities. Such redemption was not considered probable as of June 30, 2011. As reported by the TCR on April 18, 2011, BDO USA, LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The independent auditors noted that the Company has suffered recurring losses from operations, an accumulated deficit of $428 million as of Dec. 31, 2010 and has no current source of revenues. LAKE TAHOE: Files Fourth Amended Version of Reorganization Plan --------------------------------------------------------------- Lake Tahoe Development Co., LLC, filed to the U.S. Bankruptcy Court for the Eastern District of California a fourth amended version of its plan of reorganization dated Oct. 4, 2011. The Fourth Amended Plan proposes to pay creditors of the Debtor from cash on hand and proceeds from a sale of assets. The Plan provides for 23 classes of unsecured claims, 3 classes of unsecured claims, and 1 class of equity security holders. Unsecured creditors holding allowed claims will receive distributions from unencumbered cash and from sale proceeds in excess of amounts necessary to pay secured claims. The Plan also provides for payment of administrative and priority claims on the Plan Effective Date. A full-text copy of the Fourth Amended Plan is available for free at http://bankrupt.com/misc/LAKETAHOE_4thAmdPlanOct4.PDF As reported by the Troubled Company Reporter on July 21, 2011, the Bankruptcy Court approved the disclosure statement describing Lake Tahoe Development's Third Amended Plan dated June 24, 2011. About Lake Tahoe Development Based in Zepher Cove, Nevada, Lake Tahoe Development Co., LLC, is a real estate development company with substantial expertise in the real estate land entitlement and permitting areas in the unique geographic location of South Lake. Its principal, Randy Lane, who is the sole owner of Mountain Ventures, LLC, which is the managing member of the Debtor, has resided and developed real estate in South Lake Tahoe since 1976. The Company owns an interest in two separate real estate development projects. The first project owned exclusively by the Debtor is a large, mixed use, condominium, 19 hotel and retail space development comprised of 29 separate real estate parcels with multiple lien holders holding liens against various parcels located at the California/Nevada state line on Highway 50, South Lake Tahoe, California. The second is property owned by the Debtor located at 1259 Emerald Bay Road, South Lake Tahoe, CA (the "Gateway Project"), which is separate and apart from the Project, 24 and is being developed by Danny Freeman pursuant to a development agreement. The Company filed for Chapter 11 protection on Oct. 5, 2009 (Bankr. E.D. Calif. Case no. 09-41579). Daniel L. Egan, Esq., Megan A. Lewis, Esq., and Jason G. Cinq-Mars, Esq., at Wilke, Fleury, Hoffelt, Gould & Birney, LLP, serve as counsel to the Debtor. The Debtor estimated assets at $100 million and $500 million, and debts at $50 million and $100 million in its Chapter 11 petition. LE-NATURE'S INC: Convicted CEO Ordered to Repay $661 Million ------------------------------------------------------------ Evan Weinberger at Bankruptcy Law360 reports that U.S. District Judge Alan N. Bloch on Monday reportedly ordered the former CEO of bankrupt beverage maker Le-Nature's Inc. to repay $661 million in addition to serving 20 years in prison following his conviction for his role in a $668 million accounting fraud. Law360, citing the Pittsburgh Post-Gazette, says Judge Bloch ordered Gregory J. Podlucky to repay the $661 million despite the defendant's request to return only $238,687. 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, represent 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: Completes Innkeepers Transaction; Receives Payout ------------------------------------------------------------------ Lehman Brothers Holdings Inc. disclosed that the transaction has been completed through which its affiliate, Lehman ALI Inc., received a $224 million payout as a secured creditor in connection with the sale of assets of Innkeepers USA Trust and its affiliates to Cerberus Series Four Holdings, LLC, Chatham Lodging Trust and other related parties. This transaction, which was approved by the bankruptcy court on October 21, 2011, is part of the sale of 64 Innkeepers hotels to the Cerberus and Chatham joint venture for more than $1 billion that enables Innkeepers to complete its emergence from bankruptcy. Jeff Fitts, a managing director at professional services firm Alvarez & Marsal who heads Lehman's real estate group, said: "This transaction delivers significant value to the Lehman estate, is a significant improvement on the original "stalking horse" proposal and ends any further litigation delay. We have been and remain committed to achieving the best value for each of Lehman's assets as the Lehman estate moves toward confirmation of its plan." Michael Lascher, a managing director in Lehman's real estate group, added: "Our debt position in Innkeepers has been one of the more complex and challenging assets to resolve for the Lehman estate. It is an example of the Estate's ability to achieve successful outcomes in the face of unexpected hurdles. We are pleased to have concluded it in a way that maximizes its value for our creditors." About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Joint Chapter 11 Plan Now Supported by Creditors ----------------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors filed a supplement to their Joint Chapter 11 Plan with the U.S. Bankruptcy Court for the Southern District of New York, incorporating 9 major settlement agreements, including 6 agreements with 67 of their significant, non-controlled affiliates, and 3 agreements with large third-party creditors. The parties to these settlement agreements and other major creditors that in the aggregate assert more than $160 billion in claims have all executed plan support agreements. The plan supplement also includes an updated list of these creditors, totaling more than 150 to date, that have executed agreements to support the Debtors' plan. The Debtors' filing today disclosed the terms of settlements with the following affiliates: Lehman Brothers International (Europe) and 56 other PwC controlled UK affiliates, Lehman Luxembourg, Lehman Japan and Lehman Brothers Securities N.V. (Curacao). To date, the Debtors have reached settlements with substantially all of their affiliates, including those in Germany, Hong Kong, the Netherlands and Singapore. The Debtors' filing also disclosed the terms of settlements with some of the Debtors' most significant third-party creditors, including the Bundesverband Deutscher Banken and the Deutsche Bundesbank. Lehman also announced that it reached an agreement in principle resolving the claims of Lehman Re Ltd., one of its affiliates in Bermuda, which is subject to documentation and various approvals, including approval of the Bankruptcy Court as part of the Debtors' plan confirmation and of a Bermuda court. There is no assurance at this time that this agreement will be consummated, and no details about the agreement in principle are available at this time. Lehman CEO Bryan Marsal said: "The rapidly growing level of support for our plan demonstrates that our creditors understand the logic of the economic compromise we have proposed. We met with our creditors frequently, listened and responded to their concerns, and structured the plan accordingly. Those creditors who signed PSAs clearly recognize that this plan provides the best path toward expeditious distributions to creditors." Weil attorney Lori Fife, Lehman's lead bankruptcy attorney, said: "The significance of the settlements disclosed today should not be underestimated. Lehman has passed another important milestone on its road to a largely consensual confirmation of its plan." The Plan voting deadline is November 4, 2011. Implementation of the Plan is subject to the provisions of the Bankruptcy Code, acceptance by the requisite majorities of impaired creditors, and approval of the Bankruptcy Court. A confirmation hearing on the Plan has been scheduled for December 6, 2011 before Judge James M. Peck. The complete plan supplement which includes the most recent creditor group settlement agreements can be found at www.lehman- docket.com. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LOCATION BASED TECH: Names G. Gaines Marketing Chief ---------------------------------------------------- Location Based Technologies Inc. appointed Gregory Gaines as the Company's first chief marketing and sales officer. In addition, four executives have been named to the board of directors, thereby creating an independent board representing decades of cumulative business experience. Mr. Gaines was founder of GKG Associates, a consulting firm that helps businesses improve their value through sales development, strategic relationships and go-to-market initiatives. His international experience includes serving as vice president for global sales and marketing for Powerwave Technologies, Inc., and global strategic alliance manager for Intel Corporation. Previously, Mr. Gaines held various strategic account management positions at Compaq Computer Corporation and Digital Equipment Corporation. He is involved in several industry and marketing organizations and serves on the boards of select non-profit organizations. "We are fortunate to have someone with Gregory's expertise contributing to our future growth and success," said Dave Morse, CEO of Location Based Technologies. "His leadership, his thorough knowledge of key business success factors and his extensive experience in marketing and sales at other technology companies position him well to enhance the strength of our marketing and leadership teams. In addition, we are greatly honored to add high caliber Board Members who are committed to helping our company reach its full potential." Location Based Technologies' new board members: * Gregg Haugen was a founding senior partner in CarVal Investors, a Value Fund with more than $10 billion in assets under management. Prior to joining CarVal, Mr. Haugen was a senior accountant with KPMG Peat Marwick in Minneapolis. Mr. Haugen is one of Location Based Technologies' largest shareholders, and has been an advisor to the Company since January of 2011. Mr. Haugen holds a Masters of Management from the J.L Kellogg Graduate School of Management at Northwestern University and a Bachelor of Science in Business Administration degree from Boston University. * David L. Meyers is the former executive vice president and chief financial officer of Del Monte Foods, Inc. Mr. Meyers served on the board of Smart & Final and was chair of the audit committee prior to its sale. Mr. Meyers currently serves on the board of Foster Dairy Farms and Bay Grove Capital. Mr. Meyers has over 35 years of senior management experience in the consumer products industry. * Charles H. "Chuck" Smith is the former president and chief executive officer of SBC West, now AT&T. He has more than 30 years' experience in telecommunications and was vice chair of the board for USC's Center for Telecommunications Management. Chuck is currently the vice chairman of the board of University of San Francisco and remains actively involved as an advisor for numerous business, educational and community support boards. * Ronald Warner has been practicing law since 1968 and is currently a senior partner at Locke Lord Bissell and Liddell, LLP. Mr. Warner specializes in M&A financings, international joint venture and collaborative arrangements. He currently serves on the board of directors of Senetas Party, Ltd., an Australian public company; Radiance Rewards LLC and Elite Interactive Solutions, Inc. He also serves on the advisory boards of several technology and services companies in the U.S. and abroad. About Location Based Technologies Headquartered in Irvine, Calif., Location Based Technologies, Inc. (OTC BB: LBAS) -- http://www.locationbasedtech.com/-- designs, develops, and sells personal, pet, and vehicle locator devices and services. As reported in the Troubled Company Reporter on Dec. 22, 2010, Comiskey & Company, in Denver, Colo., expressed substantial doubt about Location Based Technologies' ability to continue as a going concern following its results for the fiscal year ended August 31, 2010. The independent auditors noted that the Company has incurred recurring losses since inception and has an accumulated deficit in excess of $28,800,000 and a working capital deficit in excess of $5,900,000. The Company's balance sheet at May 31, 2011, showed $1.77 million in total assets, $7.70 million in total liabilities, and a $5.93 million stockholders' deficit. LODGENET INTERACTIVE: Reports $2MM Net Income in Sept. 30 Quarter ----------------------------------------------------------------- LodgeNet Interactive Corporation reported net income of $2.04 million on $106.84 million of total revenues for the three months ended Sept. 30, 2011, compared with a net loss of $1.67 million on $113.79 million of total revenues for the same period during the prior year. The Company also reported a net loss of $1.78 million on $321.21 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $7.32 million $344.91 million of total revenues for the same period a year ago. The Company reported a net loss of $11.68 million on $452.17 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $10.15 million on $484.49 million of total revenue during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $408.96 million in total assets, $460.01 million in total liabilities and a $51.05 million total stockholders' deficiency. "We continued to deliver solid financial results in the quarter, all in line with our guidance," said Scott C. Petersen, LodgeNet Chairman and CEO. "Two metrics were of particular significance. Hospitality revenue per room increased for the first time since the start of the economic recession; and, we generated positive net income based on our operating activities, a landmark result since the time of our strategic acquisitions in early 2007. We believe both of these milestones reflect the highly strategic position we occupy within the entertainment distribution industry as well as the value of our unparalleled market share in serving hotels across North America." A full-text copy of the press release announcing the financial results is available for free at http://is.gd/Px3YBz About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET), formerly LodgeNet Entertainment Corp. -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. * * * Lodgenet carries a 'B3' long term corporate family rating and a 'Caa1' probability of default rating, with 'stable' outlook, from Moody's. It has 'B' long term foreign and local issuer credit ratings, with 'stable' outlook, from Standard & Poor's. "In Moody's opinion, continued cautious investment from LodgeNet's hotel customers will hamper intermediate term growth in its core hospitality services business, and over the long term competing forms of entertainment will pressure this revenue stream as the company seeks to defend its relevance to both hotel operators and hotel guests. The B3 corporate family rating incorporates these weak growth prospects, mitigated somewhat by the company's moderately high financial risk profile and demonstrated capacity to generate positive free cash flow throughout challenging economic conditions, along with a measure of stability from the monthly fees it receives from hotels regardless of occupancy," Moody's said in October 2010. LOS ANGELES DODGERS: Fox Backs MLB's Plan to Halt Exclusivity ------------------------------------------------------------- On Oct. 11, 2011, Fox Sports Net West 2, LLC, doing business as FSN Prime Ticket, filed with the U.S. Bankruptcy Court for the District of Delaware a limited joinder to the motion of Major League Baseball, filed Sept. 23, 2011, to terminate Los Angeles Dodgers LLC, and its affiliated Debtors' exclusivity or, in the alternative to compel the Debtor to seek assumption or rejection of the baseball agreements. MLB asserted in the motion that the Debtor's owner, Frank McCourt, Jr., is attempting to use the Debtor's Chapter 11 cases "improperly as a device to cure his own personal financial woes," and that his intention is to use the Debtors' bankruptcy powers to violate the Baseball Agreements and breach contractual obligations to Prime Ticket. On Sept. 16, 2011, LAD filed a motion asking the Bankruptcy Court to approve and authorize the licensing of telecast rights to the highest and best bidder [Docket No. 443] (the "Marketing Procedures Motion"). Under the terms of its Telecast Agreement with the Debtor, Prime Telecast holds licensing rights to telecast games through the 2013 season and certain telecast rights in later seasons. As of the Petition Date, Prime Ticket said it was current on all its obligations under the Telecast Agreement, and had advanced rights fees through the 2011 baseball season. Prime Ticket cited these arguments in support of its Limited Joinder and MLB's motion to terminate exclusivity: -- The Debtors' proposed Media Rights Transaction (as defined in the Marketing Procedures Motion) is subject to MLB approval. -- Guidelines issued by the Office of the Commissioner of Baseball ("OCB"), including the Ownership Guidelines, with respect to media rights agreements are binding on all MLB clubs. -- OCB refuses to approve a sale of LAD's Media Rights. -- Litigation regarding the OCB's grounds for refusing to approve a sale of LAD's Media Rights will be time consuming, expensive and expose LAD's stakeholders to unnecessary risks. -- The Proposed Media Rights Transaction is a material breach of the Telecast Asgreement. -- Assumption and assignment of the Telecast Agreement is necessary for a successful reorganization of the Debtors. -- Terminating the Debtor's exclusive periods to file a Chapter 11 Plan and solicit votes thereon is the best way to advance these cases in accordance with the Bankruptcy Code and applicable non-bankruptcy law. 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. 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. LTS NUTRACEUTICALS: To Buy All Outstanding Shares of Biocalth ------------------------------------------------------------- LTS Nutraceuticals, Inc., on Oct. 20, 2011, entered into an agreement with Jackson Wen, individually and as trustee for the shareholders of Biocalth International, Inc., Giantceuticals, Inc., and HerbSource Enterprises, Inc., to purchase all of the issued and outstanding shares of stock of the Company. The Company's business is the manufacturing, marketing and sales of nutraceutical products in Asia and Europe. Closing is scheduled for Nov. 23, 2011, with a deadline on closing of Dec. 31, 2011. The purchase price, which was negotiated by the parties, for the Shares is as follows: $5,000,000 to be paid in restricted shares of LTS common stock at the closing price for the LTS stock on Sept. 9, 2011, which was $2.005 per share. In addition, the Seller will receive an "earn-out" based on the sales performance of products sold by the Company all to be paid in restricted shares of LTS common stock, at a price of $2.005 per share. On Oct. 24, 2011, Livethesource, Inc., a wholly owned subsidiary of LTS, hosted a webinar directed toward its multi level marketers introducing the Company into the Livethesource "Family." The Power Point presentation for the webinar is available for free at: http://is.gd/cheEzU About LTS Nutraceuticals Ft. Lauderdale, Fla.-based LTS Nutraceuticals, Inc., develops and sells high-quality nutritional products that are distributed throughout North America through a network marketing system, which is a form of direct selling. The Company's balance sheet at June 30, 2011, showed $3.4 million in total asset, $6.8 million in total liabilities, and a stockholders' deficit of $3.4 million. As of Aug. 10, 2011, the Company had $139,626 in cash. "The current operating plan indicates that losses from operations may be incurred for all of fiscal 2011, the Company said in the filing. Consequently the Company may not have sufficient liquidity necessary to sustain operations for the next twelve months and this raises substantial doubt that the Company will be able to continue as a going concern." LYONDELL CHEMICAL: Directors Fire Back at Stock Option Clawback --------------------------------------------------------------- Martin Bricketto at Bankruptcy Law360 reports that Lyondell Chemical Co.'s onetime directors on Tuesday asked a New York bankruptcy judge to reject a claim by the litigation trustee for the company's creditors that $12.5 billion paid to shareholders during Lyondell's 2007 leveraged buyout represents an illegal dividend or redemption. In a separate filing Tuesday, the directors and certain Lyondell officers also asked the bankruptcy court for partial summary judgment on two of the trustee's claims that payments they received for company stock and options amounted to fraudulent transfers and should be eliminated, according to Law360. 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&M STONE: Section 341(a) Meeting Continued Until Nov. 14 --------------------------------------------------------- The U.S. Trustee for Region 3 has continued until Nov. 14, 2011, at 1:00 p.m. the meeting of creditors in the Chapter 11 case of M&M Stone Co. The meeting will be held at the 833 Chestnut Street, Suite 501, Philadelphia, Pennsylvania. The U.S. Trustee explained that the meeting scheduled for Oct. 31, has bee canceled. About M&M Stone Co. Telford, Pennsylvania-based M&M Stone Co. filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case No. 11-17266) on Sept. 18, 2011. Judge Eric L. Frank presides over the case. Gregory R. Noonan, Esq., at Walfish & Noonan, LLC, serves as counsel to the Debtor. The Company disclosed $18,977,748 in assets and $8,987,589 in liabilities as of the Chapter 11 filing. The petition was signed by Brian L. Carpenter, president. Affiliate Drum Construction Company, Inc. (Bankr. E.D. Pa. Case No. 11-14857) filed for Chapter 11 on June 17, 2011. M&M STONE: U.S. Trustee Appoints 4-Member Creditors' Panel ---------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors of M&M Stone Co. The Creditors Committee members are: 1. Elliott Greenleaf & Siedzikowski, P.C., ATTN: Brian R. Elias, Esq. 925 Harvest Drive, Blue Bell, PA 19422 Tel: (215) 977-1000 Fax: (215) 977-1099 2. George Schofield Co., Inc. ATTN: Tony Conte P.O. Box 110 Bound Brook, NJ 08805 Tel: (732) 356-0858 Ext. 213 Fax: (732) 356-1003 3. McGlynn Family Trust ATTN: Lorraine M. McGlynn 221 Oakland Place North Wales, PA 19454 Tel: (215) 351-1922 4. Clayton H. Landis Company, Inc. ATTN: Kevin Alderfer Chief Financial Officer 476 Meetinghouse Road Souderton, PA 18964 Tel: (215) 723-7284 Fax: (215) 723-9115 About M&M Stone Co. Telford, Pennsylvania-based M&M Stone Co. filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case No. 11-17266) on Sept. 18, 2011. Judge Eric L. Frank presides over the case. Gregory R. Noonan, Esq., at Walfish & Noonan, LLC, serves as counsel to the Debtor. The Company disclosed $18,977,748 in assets and $8,987,589 in liabilities as of the Chapter 11 filing. The petition was signed by Brian L. Carpenter, president. Affiliate Drum Construction Company, Inc. (Bankr. E.D. Pa. Case No. 11-14857) filed for Chapter 11 on June 17, 2011. MARKWEST ENERGY: Moody's Assigns Ba3 Rating to $500MM Sr. Notes --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to MarkWest Energy Partners, L.P.'s (MarkWest) and MarkWest Energy Finance Corporation's proposed $500 million senior unsecured notes due 2022. The Ba2 Corporate Family Rating (CFR) is unchanged and the outlook remains stable. MarkWest will use the proceeds of the proposed note offering to finance a tender offer for its $334 million of 8.75% senior unsecured notes due in 2018. RATINGS RATIONALE "The new senior unsecured notes will be used to refinance higher coupon senior unsecured debt and follows a recently completed $250 million equity offering," said Stuart Miller, Moody's Vice President - Senior Analyst. "Both actions are credit positive, but not to a magnitude to consider a rating change having recently upgraded the CFR in August 2011." The Ba2 CFR incorporates the expectation for continuing negative free cash flow combined with exposure to varying levels of commodity price and volume risk. Like many midstream master limited partnerships, MarkWest has substantial negative free cash flow due to significant growth capital expenditures and a high distribution payout level. MarkWest is also exposed to commodity price risk through its gas processing contracts, and to a lesser degree, to volume risk associated with production decline rates and drilling activity levels. To address these risks, MarkWest has historically used a disciplined approach to financing its growth with a balance of equity and debt. This balance has allowed the partnership to maintain the ratio of debt to EBITDA below 4.0x (using Moody's standard adjustments). To satisfy its short term liquidity needs, MarkWest relies on its senior secured revolving credit facility. In September 2011, the partnership amended its credit facility to increase the amount to $750 million and to extend the maturity until September 2016. Pro forma for the new note offering, Moody's expects most of the credit facility to be available to fund capital expenditures and/or distributions to unit holders. Therefore, near term liquidity is adequate. A near term upgrade in the partnership's rating is unlikely given the recent upgrade and the expectation for negative free cash flow into the foreseeable future. To be considered for any additional positive rating actions, MarkWest would need to show a commitment to maintaining leverage below 3.5x, or significantly increase the proportion of its operating income generated through fee-based contracts. Alternatively, a negative action could result if leverage increases to 4.5x either due to the issuance of additional debt or a fall off in operating performance. Using Moody's Loss Given Default methodology, the senior unsecured notes are assigned a rating that is one notch below the CFR as they are structurally junior to the Partnership's senior secured credit facility. The principal methodology used in rating MarkWest Energy Partners, L.P. was the Global Midstream Energy rating methodology published in November 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. MarkWest Energy Partners, L.P. is headquartered in Denver, Colorado. MarkWest has geographic diversity and is one of the largest gas gatherers and processors in the Granite Wash, the Woodford Shale, and in the Marcellus Shale. Its scale and suite of services is a barrier to entry for competitors looking to enter, or gain market share, in these plays that are experiencing high levels of drilling activity. MARKWEST ENERGY: Fitch to Rate New Sr. Unsecured Notes at 'BB' -------------------------------------------------------------- Fitch Ratings expects to rate MarkWest Energy Partners, L.P.'s (MarkWest) new senior unsecured notes due 2022 'BB'. The new notes are to rank pari passu with the company's senior unsecured debt. Proceeds are to be used to tender for the $334 million 8 3/4% notes due 2018, reduce revolver borrowings and for general partnership purposes. Fitch currently rates MarkWest as follows: -- Long-term IDR 'BB'; -- Senior secured revolving credit facility 'BB+'; -- Senior unsecured debt 'BB'. Key rating factors include: -- A significant percentage of non-fee-based cash flows from keep-whole and percent-of-proceeds arrangements in the company's gas processing segment; -- MarkWest's gathering and processing volumes are linked to drilling and production activities of E&P customers, and ultimately volatile hydrocarbon prices; -- The company uses a proxy hedging strategy which is vulnerable to periodic breakdowns in the correlation between crude oil and natural gas liquids (NGL) prices. These concerns are mitigated by the following strengths: -- A reasonably geographically diverse footprint with leading positions in the liquids-rich areas in the Mid-continent and Appalachia; -- Strategically well-positioned assets with exposure to the rapidly growing Marcellus Shale; -- An increasing amount of fee-based revenue sources and a layered hedging strategy. Recent Capital Market Activity: Since the beginning of 2011, MarkWest has issued equity units three times for net proceeds of $574 million. The company has also retired higher coupon debt with lower interest rate notes and extended maturities. In the first quarter of the year, MarkWest raised $500 million of notes at 6 1/2% due 2021 to tender for $275 million of 8 1/2% notes due 2016 and to tender for $166 million of the 8 3/4% notes due 2018. The current note offering for the remaining 2018s is expected to further reduce interest costs. Impact on Leverage: At the end of the second quarter of 2011, debt to adjusted leverage (defined as debt to adjusted EBITDA) was 4.1 times (x). If proceeds from the third quarter equity offerings and the current note offering are used to eliminate existing revolver borrowing, leverage would be reduced to 3.9x on a pro forma basis. Adequate Liquidity: Liquidity is supported by MarkWest's $750 million, five-year secured revolving credit facility, which matures Sept. 7, 2016. The bank facility was recently upsized and extended in September 2011. Fitch considers the current revolver's size and the company's financial flexibility to be adequate to meet MarkWest's liquidity needs. MEDIA GENERAL: S&P Downgrades Corporate Credit Rating to 'CCC+' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit on Richmond, Va.-headquartered Media General Inc. to 'CCC+' from 'B- '. "The downgrade reflects our expectation that Media General could face difficulties in maintaining covenant compliance in 2012," S&P said. "We also lowered our issue-level rating on the company's $300 million senior notes due 2017 to 'CCC+' (at the same level as the 'CCC+' corporate credit rating on the company). The recovery rating on the notes remains unchanged at '4', indicating our expectation of average (30% to 50%) recovery for noteholders in the event of a payment default," S&P noted. "Our rating on Media General reflects the risk that loan covenant step-downs, together with continued weakness in the U.S. economy, could cause the company to violate covenants in late 2012 if it is unable to refinance or amend covenants," said Standard & Poor's credit analyst Jeanne Shoesmith. "Media General's business risk is 'vulnerable' in our view, based on structural pressure on the U.S. newspaper industry, TV broadcasting's mature long-term growth prospects, and increased competition for audience and advertisers from traditional and nontraditional media. A very high ratio of lease- and pension- adjusted debt to EBITDA, of 7.6x as of Sept. 25, 2011, underpins our view of Media General's financial profile as 'highly leveraged,'" S&P said Media General's businesses include newspaper publishing, TV broadcasting, and digital media, located mainly in the Southeastern U.S. "Our assessment of the company's business risk profile as vulnerable stems from its revenue concentration in newspaper publishing, which is facing negative structural trends from readership and advertising moving online. This segment has reported five years of revenue declines, and we believe that ongoing cost reductions will need to be executed in order to maintain the viability of the company's print publications. Media General's three largest newspapers together constitute about 60% of the company's publishing revenue, making the company vulnerable to economic trends in those markets. We are not confident that digital revenue growth will support editorial costs over the long term," S&P related. MICHAEL SCOTT CHANDLER: Court Refuses to Reverse Plan Ruling ------------------------------------------------------------ Bankruptcy Judge Magdeline D. Coleman denied the request of Michael Scott Chandler, Sr., to vacate the Court's Aug. 24, 2011 order confirming the Chapter 11 Plan proposed by the debtor's spouse, Dolores R. Chandler. The Debtor argues that the Court should not have confirmed the Plan because the Plan Proponent proposed the Plan in bad faith and constitutes an "attempt to defraud the Court and the Debtor's creditors." The Plan confirmation was reported in the Aug. 26, 2011 edition of the Troubled Company Reporter. In denying the Debtor's request, Judge Coleman held that allowing the Debtor to propose his own plan of reorganization appears to be an exercise in futility and will only serve to prejudice the creditors of the Debtor's estate by forcing them to wait longer for the payment of their claims. Judge Coleman noted that all of the plans proposed by the Debtor, including the most recently filed, are dependent on financing using his property -- a real estate consisting of 35.9 acres of real property located at 438 McFarlan Road, Kennett Township, Pennsylvania -- as collateral. The Debtor owns the Property as a tenant by the entirety with his wife. Unfortunately for the Debtor, his wife is also the Plan Proponent and she has repeatedly indicated that she would never consent to the Debtor placing a mortgage on the Property to secure the funding he would need to finance his proposed plan. Judge Coleman said the Court will not permit the payment of the Debtor's creditors to be further delayed. A copy of Judge Coleman's Oct. 24, 2011 Memorandum is available at http://is.gd/xDrWJofrom Leagle.com. Michael Scott Chandler Sr. commenced a Chapter 7 bankruptcy case (Bankr. E.D. Pa. Case No. 10-16089) on July 23, 2010. Michael H. Kaliner was appointed Chapter 7 trustee. On Aug. 23, 2010, the Debtor converted his bankruptcy case to Chapter 11. Ciardi Ciardi & Astin is the Debtor's third counsel in the bankruptcy. Originally, the Debtor was represented by Michael Bresnahan who was responsible for the Chapter 7 filing. On Aug. 20, 2010, the Debtor retained Eugene Steger & Associates, P.C., which sought conversion of the Debtor's case to Chapter 11. Steger withdrew as attorneys on Sept. 27, 2011. MONEYGRAM INT'L: Inks 5th Supplemental Indenture with Goldman ------------------------------------------------------------- MoneyGram International, Inc., and MoneyGram Payment Systems Worldwide, Inc., a wholly-owned subsidiary of the Company, entered into a consent agreement with certain affiliates of Goldman, Sachs & Co., who are beneficial holders of Worldwide's 13.25% Senior Secured Second Lien Notes due 2018. Pursuant to the Indenture Consent Agreement, the parties thereto agreed to enter into a Fifth Supplemental Indenture to the Indenture, dated as of March 25, 2008, by and among Worldwide, the Company, the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee and collateral agent, governing the Second Lien Notes. The Fifth Supplemental Indenture will amend the definition of "Qualified Equity Offering" in the Indenture to refer to a primary or secondary public offering of equity of the Company or its direct or indirect parent in which Goldman, Sachs & Co., or any of its affiliates participates as a selling stockholder and any subsequent primary or secondary public offerings, in each case for aggregate cash proceeds of at least $50.0 million. The Fifth Supplemental Indenture will also amend the Indenture to permit Worldwide to make one or more optional redemptions of up to an aggregate of 35% of the aggregate principal amount of the originally issued Second Lien Notes, at a redemption price equal to 113.25% of the then outstanding principal amount thereof, plus accrued and unpaid interest thereon, at any time prior to March 25, 2012, and after a Qualified Equity Offering; provided that any such redemption must be in an aggregate principal amount of no less than $50.0 million and may not exceed the aggregate cash proceeds received in all Qualified Equity Offerings by the Company or any participating selling stockholders. The Fifth Supplemental Indenture will also amend the Indenture to, among other things: (i) allow the Company and its subsidiaries increased flexibility in intercompany transactions, including intercompany loans, asset transfers and investments; (ii) increase the size of the general basket for investments from $25.0 million to $50.0 million; (iii) increase the aggregate amount of indebtedness defaults or final judgments that will constitute an Event of Default under the Indenture from $15.0 million to $25.0 million; and (iv) expand the definition of Highly Rated Investments in the Indenture to provide increased flexibility with respect to permitted investments. About MoneyGram International MoneyGram International, Inc. (NYSE: MGI) -- http://www.moneygram.com/-- is a global payment services company. The Company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram is a New York Stock Exchange-listed company with 203,000 global money transfer agent locations in 191 countries and territories. The Company reported net income of $43.80 million on $1.17 billion of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $1.91 million on $1.16 billion of total revenue during the prior year. The Company's balance sheet at June 30, 2011, showed $5.08 billion in total assets, $5.20 billion in total liabilities, and a $125.41 million total stockholders' deficit. * * * According to the Troubled Company Reporter on July 1, 2010, Fitch Ratings has affirmed the Issuer Default Ratings for MoneyGram International Inc. and MoneyGram Payment Systems Worldwide, Inc., at 'B+'. Outlook is stable. Fitch noted that the ratings could be negatively impacted by further declines in remittance volumes driven by macro economic factors or decreases in migrant labor populations worldwide. MSR RESORT: Wants Continued Access to Cash Until June 30 -------------------------------------------------------- MSR Resort Golf Course LLC, et al., ask the U.S. Bankruptcy Court for the Southern District of New York to authorize the Debtors to continue using cash collateral through June 30, 2012, for working capital and general corporate purposes, including with respect to the payment of costs and expenses related to these Chapter 11 cases of the Debtors, pursuant to a cash budget and an accrual budget. The Debtors propose the following adequate protection to protect against diminution in the value of the Prepetition Collateral occasioned by the Debtors' use of Cash Collateral, if any: * Adequate Protection Liens. The Debtors will grant replacement liens on all of the Mortgage Borrowers' postpetition rights in, to, and under all present and after-acquired property and assets, including the proceeds of any Avoidance Actions, subject only to (i) the Carve Out and (ii) Prior Liens. * Superpriority Claims. The Prepetition Secured Parties will have an allowed superpriority administrative expense claim against the Mortgage Borrowers and the Mortgage RE Entities (jointly and severally) under sections 503(b), 507(a), and 507(b) of the Bankruptcy Code, subject to the Carve Out. * Payment of Interest. The Debtors will pay to the Mortgage Lender, for the benefit of the Prepetition Secured Parties, on an ongoing basis, the current cash payment of interest on the Prepetition Secured Obligations at the non-default contract rate of interest set forth in (and at the times provided for in) the Mortgage Loan Documents, except that that the rights of the Debtors, of the Mortgage Lender, and of any Committee are reserved with respect to whether interest should be paid at the default rate. * Expense Reimbursement. Within 7 business days after receipt of a reasonably detailed invoice, the Debtors will pay all reasonable and documented fees and expenses of the Servicer, and its counsel and financial advisor, and the Mortgage Lender and its counsel incurred in connection with the Mortgage Loan and Servicing Documents and the Chapter 11 cases, in each case to the extent such payment would be required by the express terms of the applicable Mortgage Loan and Servicing Documents. * Reporting Obligations. The Mortgage Borrowers will during these Chapter 11 cases comply with certain reporting obligations set forth in the Cash Collateral Order. A copy of the motion is available for free at: http://bankrupt.com/misc/msrresort.dkt0709.pdf About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. NATIONAL LAMPOON: Judge Refuses to Appoint Receiver --------------------------------------------------- Eric Hornbeck at Bankruptcy Law360 reports that a California federal judge refused Monday to appoint a receiver for National Lampoon Inc., ruling there wasn't enough evidence that its management -- including an ex-CEO convicted of securities fraud -- improperly transferred $9 million from Fair Finance Co. to conceal the media company's woes. National Lampoon CEO Timothy Durham ? who is facing allegations that he ran a Ponzi scheme ? and ex-CEO Daniel Laikin ? convicted of manipulating the market for company stock ? made fraudulent transfers from investment company Fair Finance, Law360 relates. Based in West Hollywood, California, National Lampoon Inc. (AMEX: NLN) -- http://www.nationallampoon.com/-- is a media and entertainment company that creates and distributes comedic content. The National Lampoon(TM) brand was initially developed in 1970 through publication of National Lampoon Magazine and later through the use of the Company name on motion pictures, including National Lampoon's Animal House and National Lampoon's Vacation. The majority of the Company's revenues are derived from these business activities: NCOAT INC: No Meaningful Distribution to Unsecured Creditors ------------------------------------------------------------ nCoat, Inc., et al., filed with the U.S. Bankruptcy Court for the Middle District of North Carolina on Oct. 20, 2011, a disclosure statement for their joint plan of reorganization dated Oct. 20, 2011. The Plan of orderly liquidation contemplates the distribution of the Net Sales Proceeds ($671,184.82) to pay all Allowed Administrative Expenses incurred through the Effective Date, Allowed Priority Unsecured Claims, and Allowed Secured Claims (which remain unpaid) of the Debtors, with any remaining Net Sales Proceeds to be divided equally between the estates of MCC, HPC and nTech and, after payment of Allowed Administrative Expenses incurred after the Effective Date, distributed to unsecured creditors in each case in accordance with the priorities established by the Bankruptcy Code. The Debtors expect that there may be funds remaining in the nTech estate after the payment of all secured and unsecured creditors, which would then be distributed to secured and unsecured creditors of nCoat in accordance with the priorities established by the Bankruptcy Code. The Debtors do not anticipate that any excess funds will be available from the estates of MCC and HPC to pay claims of creditors of nCoat. The Allowed Unsecured Claims of nCoat of approximately $788 million (Class 17) will be paid from the nCoat Available Cash (in full or pro rata depending upon the amount of nCoat Available Cash) in one or more distributions after the Effective Date upon the realization of nCoat Available Cash, and after payment in full of Allowed Administrative Expenses incurred by nCoat on or after the Effective Date. The Debtors has estimated that there will likely be no meaningful distribution on Class 17 Allowed Unsecured Claims. The existing equity interests (Class 18) will be extinguished and no distributions will be made on account of such old equity interests. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/ncoat.DS.dkt238.pdf About nCoat Inc. nCoat, Inc., filed for Chapter 11 protection on Aug. 16, 2010, (Bankr. M.D. N.C. Case No. 10-11512). John A. Northen, Esq., and Vicki L. Parrott, Esq., who have offices in Chapel Hill, North Carolina, represent the Debtor. The Debtor disclosed $1,375,746 in assets and $913,619,139 in debts. Affiliates High Performance Coatings, Inc. (Bankr. M.D. N.C. Case No. 10-11515); MCC, Inc., dba Jet Hot (Bankr. M.D. N.C. Case No. 10-11514); and nTech, Inc. (Bankr. M.D. N.C. Case No. 10-11513) file separate Chapter 11 petitions on Aug. 16, 2010. Julie B. Pape, Esq., and William B. Sullivan, Esq., at Womble Carlyle Sandridge & Rice, PLLC, in Winston-Salem, N.C., represent the Official Committee of Unsecured Creditors. On Sept. 28, 2010, the Bankruptcy Court approved the sale substantially all of the Debtors' assets to Fort Ashford Funds, LLC, subject to higher and better bids at an auction. No bids were received by the Debtors other than the initial bid of Fort Ashford. The sale closed on Oct. 1, 2010 (the "Sale Date"). After the Sale Date, the Debtors ceased all business operations, paid all undisputed secured claims, assumed and assigned certain executory contracts and unexpired leases to the designee of Fort Ashford, and retained two employees to close the books and records and wind up the business affairs of the Debtors. The Debtors, prior to the Sale Date, specialized in nanotechnology research, licensing, and the commercialization, distribution and application of nano-structured as well as multiple non-nano structured surface coatings. The Debtors' specialized coatings were used by the automotive, diesel engine, trucking, recreational vehicle, motorcycle, aerospace and oil and gas industries for heat management, corrosion resistance, friction reduction, bond strength and appearance. NORTEL NETWORKS: Seeks to Pay $4.4MM Bonuses to Key U.S. Employees ------------------------------------------------------------------ Nortel Networks Corp.'s U.S. unit is seeking U.S. bankruptcy court approval to give about $4.4 million in bonuses in 2012 to key employees left on the payroll. BankruptcyData.com reports that there will be approximately 97 2012 plan participants, and the aggregate amount of the 2012 awards paid will not exceed approximately $3,485,570. The Court scheduled a Nov. 15, 2011, hearing on the matter. 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 $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 $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. NORTHCORE TECHNOLOGIES: To Provide Tech. for Irish Gov't. HSE ------------------------------------------------------------- Northcore Technologies Inc. entered into an agreement to provide the e- tendering technology for the Irish Government Health Services Executive's initial online acquisition pilot. Northcore is working closely with the Hotel Procurement Team from the HSE to deploy Northcore's core e-Tendering product, Asset Buyer, in an initial pilot engagement. The platform will be used to source and purchase a large volume of health care supplies for multiple regions. The end goal will be to achieve maximum purchase value through the implementation of Northcore's proprietary multi-phase request for proposal, e-evaluation and reverse auction process. The HSE is the largest purchaser in the state spending in the region of EUR4billion annually on a diverse range of goods, services and works projects. Companies interested in effective software solutions should contact Northcore at 416-640-0400 or 1-888-287-7467, extension 395 or via email at Sales@northcore.com. About Northcore Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC BB: NTLNF) -- http://www.northcore.com/-- provides a Working Capital Engine(TM) that helps organizations source, manage, appraise and sell their capital equipment. Northcore offers its software solutions and support services to a growing number of customers in a variety of sectors including financial services, manufacturing, oil and gas and government. Northcore owns 50% of GE Asset Manager, LLC, a joint business venture with GE. Together, the companies work with leading organizations around the world to help them liberate more capital value from their assets. Northcore reported a net loss for the first quarter of C$574,000. This compares with a net loss of C$677,000 in the fourth quarter of 2010. In the first quarter of 2010, Northcore reported a net loss of $713,000. Northcore reported consolidated revenues of C$183,000 for the first quarter, an increase of 4% over the C$176,000 reported in the fourth quarter of 2010. In the same period of 2010, Northcore reported consolidated revenues of C$150,000. Certain adverse conditions and events cast substantial doubt upon the ability of the Company to continue as a going concern, the Company said in the filing. "The Company has not yet realized profitable operations and has relied on non-operational sources of financing to fund operations." The Company's balance sheet at June 30, 2011, showed C$1.39 million in total assets, C$1.33 million in total liabilities and C$61,000 in total shareholders' equity. NUSCALE POWER: $30-Million Deal Frees Firm From Receivership ------------------------------------------------------------ Gazette Times reports that a $30 million bailout has pulled NuScale Power out of financial limbo and set it back on course to seek regulatory approval for its promising nuclear reactor design. Engineering and construction heavyweight Fluor Corp. has purchased a majority stake in NuScale Power, freeing it from the messy legal entanglements that have clouded the firm's future for months, NuScale executives told the Gazette-Times in an interview. "They've allowed us to pay our back bills and get restarted," the report quoted NuScale Power Chief Executive Officer Paul Lorenzini as saying. The Fluor investment includes all the common stock that's been held in receivership since the federal prosecution of NuScale's former lead investor, disgraced hedge fund manager Francisco "Pancho" Illarramendi, with enough cash left over to finance ongoing operations for the company, which has been running on a series of bridge loans, the report notes. NuScale Power is a Corvallis technology company. PETROLEUM & FRANCHISE: BDO USA to Audit 2009 and 2010 Returns ------------------------------------------------------------- Petroleum Franchise Capital, LLC and Petroleum & Franchise Funding, LLC, sought and obtained authorization from the U.S. Bankruptcy Court for the District of Connecticut to modify the scope of the retention of the Debtors' accountants, BDO USA, LLP, to include preparation of an audit for 2009 and preparation of 2010 tax returns. On Feb. 28, 2011, the Debtors were authorized to retain BDO as their accountants to provide the Debtors with accounting services. The Debtors and the senior secured creditor in this case, following extensive negotiations, have finalized the terms of a consensual Plan of Reorganization which has been filed with the Court. As a result, the Debtors need the assistance of BDO to provide additional audit work and tax returns as will be required and necessary to implement the restructuring agreement reached with the Debtors lender. The prior Retention Order contained a cap of $22,500 for services rendered in connection with the original engagement of BDO. Based on this additional work, the Court orders that the cap is increased by $77,500 so that the BDO fee cap will now be $100,000. About Petroleum & Franchise Danbury, Connecticut-based Petroleum & Franchise Capital, LLC, filed for Chapter 11 bankruptcy protection on June 23, 2010 (Bankr. D. Conn. Case No. 10-51465). Craig I. Lifland, Esq., and James Berman, Esq., at Zeisler and Zeisler, assist the Company in its restructuring effort. BDO USA, LLP, serves as the Company's accountants. The Company estimated assets and debts at $50 million to $100 million. Petroleum & Franchise Funding, LLC, an affiliate of the Debtor, a filed separate Chapter 11 petition (Case No. 10-51467) on June 23, 2010, disclosing $66,132,915 in assets and $54,782,604 in liabilities as of the Chapter 11 filing. PHOENIX GENESIS: In Receivership Due to Inability to Pay Debts -------------------------------------------------------------- Elena Hogan at Northumberland News reports that Phoenix Genesis Investments is in receivership on its King George Mews condominium project. Phoenix Genesis Investments Vice President John Lee said that courts appointed the Royal Bank of Canada (RBC) control over the properties located at 79 King St. W., 83-87 King St. W., and 86 Albert St. in Cobourg after Phoenix Genesis failed to pay back the loan used to develop the project as quickly as RBC demanded it, according to Northumberland News. The report relates that customers with RBC for approximately 20 years, Phoenix Genesis Investments had, until recently, a good relationship with the bank, said Mr. Lee, noting the company has borrowed $7,000,000 over the years and repaid them for various construction and renovation projects. The report notes that Mr. Lee alleges things changed in March when the company refused a four-month loan agreement with RBC for $900,000, for which the bank wanted to charge them $125,000 in fees. Northumberland News says that Phoenix Genesis wrote to the RBC President and other senior officials to complain and protest the overly high loan fees, as well as RBC's Ombudsman office, seeking arbitration between them and the bank. Mr. Lee said RBC called in the $2.1 million loan on its King George Mews condominium project, adding the company agreed to pay the loan back, raising the financing to do so, but was unable to do it as quickly as the bank demanded, Northumberland News adds. Phoenix Genesis Investments is a Cobourg construction and renovation company. PMI MORTGAGE: Downgraded to 'Caa3' by Moody's, Outlook Negative --------------------------------------------------------------- Moody's Investors Service has downgraded to Caa3, from Caa1, the insurance financial strength rating of PMI Mortgage Insurance Co. (PMI) following the Arizona State Insurance Department's (AZ-DOI) takeover of PMI and petition to a state superior court to place the company in receivership. According to the partial claim payment plan announced by the regulator, 50% of the claims will be paid with deferred payment obligations (DPOs) until further notice. The outlook for PMI's rating is negative. The recent events do not affect the debt ratings (senior unsecured debt and junior subordinated debt rated C) of The PMI Group (TPG), PMI's holding company. RATINGS RATIONALE On October 20 2011, the Director of Insurance at AZ-DOI obtained an order from the Superior Court of the State of Arizona, County of Maricopa, to allow the Director to take possession and control of PMI, an Arizona-domiciled mortgage insurance company. The petition filed by AZ-DOI asserted that PMI will not be able to meet its claim obligations forcing the AZ-DOI to step in and assume immediate control of the insurer. The hearing for the case has been scheduled for October 26th. AZ-DOI's order cites PMI's internal models estimating that the insurer will not be able to pay its claims in full. According to court filings, the preliminary quarterly report submitted by PMI's actuarial staff to its management and the AZ-DOI indicates that a large loss reserve charge of $520 million in the third quarter of 2011 would cause the insurer's statutory capital position to decline from a surplus of $258 million at the end of the second quarter of 2011 to a deficit of $213 million at the end of the third quarter. The AZ DOI, on August 19, ordered the insurer to stop writing new business and placed the insurer under regulatory supervision after PMI's statutory surplus fell below the Minimum Policyholder's Position (MPP) required by regulations. Fannie Mae and Freddie Mac, the primary counterparties of private mortgage insurers in the US, suspended PMI and its affiliates as approved mortgage insurers on August 22nd. As of June 30, 2011, TPG, had $786 million of debt outstanding. During the third quarter, TPG repaid the $50 million bank line with the proceeds from the sale of PMI Australia to QBE Insurance The planned appointment of a receiver will trigger event of default clauses on TPG's outstanding debt, making it repayable 60 days hence. Moody's estimates TPG's current liquidity to be approximately $160-180 million, covering only about 25% of outstanding senior debt obligations and consistent with expectations for C-rated securities. The outlook for the insurance financial strength rating is negative reflecting the uncertainty about ultimate loss severity on policies issued by PMI due in part to persistent weakness in the housing markets. Ability to actively monitor and manage the insured portfolio while in run-off and uncertainty about future regulatory actions are some other factors that influence the outlook. This rating has been downgraded and outlook changed to negative: PMI Mortgage Insurance Co. -- insurance financial strength rating to Caa3 from Caa1; The last rating action on PMI occurred on August 22, 2011 when Moody's downgraded the insurance financial strength rating of PMI from B3 to Caa1. The PMI Group, Inc. (NYSE: PMI), headquartered in Walnut Creek, CA, is the holding company for PMI Mortgage Insurance Co., including its wholly owned subsidiaries and affiliated companies in Europe. The PMI Group, Inc. also owns a 50% interest in CMG Mortgage Insurance Co (unrated). The principal methodology used in this rating was Global Mortgage published in February 2007. PRESIDENTIAL REALTY: Class B Shares Delisted from NSYE Amex ----------------------------------------------------------- Janice O'Neill, senior vice president, corporate compliance of NYSE Amex notified the U.S. Securities and Exchange Commission regarding the removal from listing or registration of Presidential Realty Corp. Class B Common Stock on NYSE Amex. About Presidential Realty Headquartered in White Plains, New York, Presidential Realty Corporation, a real estate investment trust, is engaged principally in the ownership of income-producing real estate and in the holding of notes and mortgages secured by real estate or interests in real estate. On Jan. 20, 2011, Presidential stockholders approved a plan of liquidation, which provides for the sale of all of the Company's assets over time and the distribution of the net proceeds of sale to the stockholders after satisfaction of the Company's liabilities. The Company's consolidated statement of net assets as of June 30, 2011, showed $8.1 million in total assets, $3.7 million in total liabilities, and net assets of $4.4 million. PURE BEAUTY: Section 341(a) Meeting Scheduled for Nov. 10 --------------------------------------------------------- The U.S. Trustee for Region 3 will convene a meeting of creditors of Pure Beauty Salons on Nov. 10, 2011, at 1:30 p.m. (Eastern Time). The meeting will be held at J. Caleb Boggs Federal Building, 2nd floor, Room 2112, 844 North King Street, 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 Pure Beauty Pure Beauty Salons filed for bankruptcy (Bankr. D. Del. Case No. 11-13159) on Oct. 4, 2011. Affiliate BeautyFirst Franchise Corp. filed a separate petition (Bankr. D. Del. Case No. 11-13160). Judge Mary F. Walrath was initially assigned to the case. Judge Peter J. Walsh took over. Andrew L. Magaziner, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as the Debtors' counsel. The Debtors' investment banker is SSG Capital Advisors' J. Scott Victor -- jsvictor@ssgca.com The Debtors' notice, claims solicitation, and balloting agent is Epiq Bankruptcy Solutions. The Debtor estimated assets and debts both at $10 million to $50 million. The Debtors owe $15 million to vendors and landlords. The petition was signed by Brian Luborsky, chief executive officer. Secured lender Regis Corp. is represented in the case by Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath Nauman & Tansey P.A., and Kathleen M. Miller, Esq., at Smith Katzenstein & Furlow LLP. Epiq Bankruptcy Solutions, LLC, acts as official claims, noticing and balloting agent. The U.S. Trustee has appointed a seven-member Official Committee of Unsecured Creditors. PURE BEAUTY: U.S. Trustee Appoints 7-Member Creditors' Panel ------------------------------------------------------------ Roberta A. DeAngelis, the United States Trustee for Region 3, pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Pure Beauty Salons. The Creditors Committee members are: 1. PREIT Services LLC ATTN: Bruce Goldman 200 S Broad Street, 3rd Floor Philadelphia, PA 19102 Tel: (215) 875-0700 Fax: (215) 546-1271 2. OPI Products, Inc. ATTN: Eric Schwartz 13054 Saticoy Street North Hollywood, CA 91605-3510 3. KPSS Inc. ATTN: Elizabeth Scanlon 981 Corporate Blvd. Linthicum Heights, MD 21090 Tel: (443) 577-8216 Fax: (443) 557-6850 4. Houston BW Inc. ATTN: Jeff James 4010 Blue Bonnet, Suite 110 Houston, TX 77025 Tel: (713) 822-0200 5. Simon Property Group, Inc. ATTN: Ronald Tucker 225 W. Washington Street Indianapolis, IN 46204 Tel: (317) 263-2346 Fax: (3170 263-7901 6. GGP Limited Partnership ATTN: Julie Bowden 110 North Wacker Drive Chicago, IL 60606 Tel: (312) 960-2707 Fax: (312) 442-6574 7. CBL & Associates Management Inc. ATTN: Catherine Long CBL Center, Suite 500, 2030 Hamilton Place Blvd. Chattanooga, TN 37421 Tel: (423) 490-8280 Fax: (423) 893-4273 About Pure Beauty Pure Beauty Salons filed for bankruptcy (Bankr. D. Del. Case No. 11-13159) on Oct. 4, 2011. Affiliate BeautyFirst Franchise Corp. filed a separate petition (Bankr. D. Del. Case No. 11-13160). Judge Mary F. Walrath was initially assigned to the case. Judge Peter J. Walsh took over. Andrew L. Magaziner, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as the Debtors' counsel. The Debtors' investment banker is SSG Capital Advisors' J. Scott Victor -- jsvictor@ssgca.com The Debtors' notice, claims solicitation, and balloting agent is Epiq Bankruptcy Solutions. The Debtor estimated assets and debts both at $10 million to $50 million. The Debtors owe $15 million to vendors and landlords. The petition was signed by Brian Luborsky, chief executive officer. Secured lender Regis Corp. is represented in the case by Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath Nauman & Tansey P.A., and Kathleen M. Miller, Esq., at Smith Katzenstein & Furlow LLP. Epiq Bankruptcy Solutions, LLC, acts as official claims, noticing and balloting agent. PURSELL HOLDINGS: Plan Has 10% Dividend for Unsec. Creditors ------------------------------------------------------------ Pursell Holdings, LLC, has filed a Chapter 11 Plan of Reorganization dated Oct. 13, 2011, and explanatory disclosure statement. Under the plan, administrative expenses and other allowed claims will be treated in a manner consistent with the requirements of the Bankruptcy Code. The holders of secured allowed claims, are classified separately within Classes 1 through 12. The holders of unsecured allowed claims with priority are classified separately within Class 13. The holders of general unsecured Allowed Claims are classified as Class 14. The holders of contingent, unliquidated secured Claims are classified as Class 15. The Claims by the equity owners of the Debtor are classified as Class 16 claims. These holders will receive the treatment specified for such Classes in the Plan. All Allowed Claims in Classes 1 to 13 will be paid in full. The Plan provides for a 10% dividend to the holders of general unsecured Allowed Claims in Class 14. The Plan provides that the contingent unliquidated claim of PAF Investment, LLC, in Class 15 is to be paid by the primary obligor, Damon Pursell Construction Company, under its confirmed Plan of Reorganization in Case No. 10-44965. The holders of equity interests in Debtor will retain their equity interests in the Reorganized Debtor equal to the percentage interest they held in Debtor prepetition, subject to the terms of the treatment for Class 16. Under the Plan, Michael D. Pursell will remain as member and will continue to manage the day-to-day operations of the Debtor. Damon Pursell Construction Company (DPCC) will be retained to provide management services to the Debtor following confirmation. These services will be provided by the key personnel. The Plan may be in effect for as long as 10 years since the Plan calls for the payments to continue for 10 years for unsecured Allowed Claims. The Debtor will retain the services of Cassidy Turley, Inc., and Whitney Kerr, Jr., as needed to fill any vacancies in the Buckeye Industrial Park as they occur. Cassidy Turley will be compensated in the ordinary course of business (generally a 6% commission). The Debtor will also retain as needed residential real estate agents to assist in finalizing the orderly liquidation of the Debtor's remaining residential real estate. They will also be compensated in the ordinary course of business (generally 6% commission). The Debtor has previously retained Re/Max Results and anticipates it will continue to do so. The Plan is based on the belief that the present enforced liquidation value of the Debtor's assets is less than the Debtor's total indebtedness and lien obligations (in the case of PAF Investment, LLC). The Plan provides to the creditors a larger distribution than most creditors, in their respective priorities, would receive if the Debtor were to be subjected to a forced liquidation under Chapter 7 of the Bankruptcy Code. The Debtor will execute the Plan through a continuation of its operations as contemplated under the Plan. The operation of the Debtor's commercial leasing business is expected to generate sufficient operating revenue to pay all secured Allowed Claims over an extended period of time in accordance with the Plan, to pay allowed administrative claims, and to pay the proposed dividend to unsecured Allowed Claims in accordance with the Plan. The Debtor's Agreements with Morrill & Janes Bank, Bank Liberty, and Pony Express Bank provide for the orderly liquidation of its remaining residential real estate holdings without further burdening the Debtor's commercial leasing business. The Debtor's only remaining real estate will be commercial property. The Debtor will continue to retain its membership interest in North River Holding, LLC, but it has not guaranteed its debt and has no obligation to make capital contributions under its membership agreement. The separation of the residential development business from the remaining commercial real estate leasing business should allow the Debtor to ultimately regain its financial footing. The hearing on the disclosure statement is scheduled on Nov. 15, 2011, at 1:30 P.M. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/PURSELL_disclosurestatement.pdf About Pursell Holdings Liberty, Missouri-based Pursell Holdings, LLC, filed for Chapter 11 bankruptcy protection (Bankr. W.D. Mo. Case No. 11-40999) on March 10, 2011. Frank Wendt, Esq., Brown & Ruprecht, P.C., serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $12,204,248 in assets and $23,382,741 in debts. Affiliate Damon Pursell Construction Company filed a separate Chapter 11 petition (Bankr. W.D. Mo. Case No. 10-44965) on Sept. 15, 2010. The U.S. Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Pursell Holdings LLC have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest develop among the creditors. RCLC INC: Liquidating Joint Plan Declared Effective Oct. 25 ----------------------------------------------------------- On Oct. 25, 2011, RCLC, Inc.'s Liquidating First Amended Joint Plan referred to below became effective. As reported in the TCR on Sept. 13, 2011, the U.S. Bankruptcy Court for the District of New Jersey confirmed, on Aug. 29, 2011, the Liquidating First Amended Joint Plan of RCLC, Inc., f/k/a Ronson Corporation, RA Liquidating Corp. f/k/a/ Ronson Aviation, Inc., and RCPC Liquidating Corp. f/k/a Ronson Consumer Products Corporation under Chapter 11 of the Bankruptcy Code. Under the provisions of the Confirmation Order and the Joint Plan, the Priority Claims, the Prepetition Credit Facility Claims, the Getzler Henrich Claim, and the Other Secured Claims, as those terms are defined in the Joint Plan, have either been satisfied in full or will be satisfied in full following the confirmation of the Joint Plan. The General Unsecured Claims, under the Joint Plan will not be fully satisfied. The General Unsecured Creditors will receive pro rata distributions form each of the three estates, the General Unsecured Creditors of the Company will receive approximately 5% of the amount of their claims, the General Unsecured Creditors of RA Liquidating Corp.("RAL") will receive approximately 44% of their claims, and the General Unsecured Creditors of RCPC Liquidating Corp. ("RCPC") will receive approximately 29% of the amount of their claims. At July 31, 2011, there were 5,083,539 shares of the Company's common stock outstanding. The outstanding shares of the Company will be canceled on the effective date and equity holders of the Company, RAL and RCPC will receive no distribution under the Joint Plan for their equity interests. On the effective date, the remaining assets of the Company, RAL and RCPC will be transferred to a liquidating trust for distribution in accordance with the Joint Plan. As reported in the TCR on June 8, 2011, the Court approved on March 24, the disclosure statement explaining RCLC's First Amended Joint Plan of Liquidation as containing adequate information pursuant to the Bankruptcy Code, a copy of which is available for free at http://is.gd/aFNUp9 About RCLC Inc. RCLC, Inc., formerly known as Ronson Corporation, in Woodbridge, New Jersey, historically, has been engaged principally in these businesses -- Consumer Products; and Aviation-Fixed Wing and Helicopter Services. Trenton, New Jersey-based Ronson Aviation, Inc., now known as RA Liquidating Corp., filed for Chapter 11 protection on Aug. 17, 2010 (Bankr. D. N.J. Case No. 10-35315). The Debtor estimated its assets at $10 million to $50 million and its debts at $1 million to $10 million. Affiliates RCLC, Inc. (Bankr. D. N.J. Case No. 10-35313), and RCPC Liquidating Corporation (Bankr. D. N.J. Case No. 10-35318) filed separate Chapter 11 petitions on Aug. 17, 2010, each estimating their assets at $1 million to $10 million and debts at $1 million to $10 million. The cases, along with RCLC, Inc.'s, are jointly administered, with RCLC, Inc., as the lead case. Michael D. Sirota, Esq., and David M. Bass, Esq., and Felice R. Yudkin, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, N.J., represent the Debtors as counsel. Wilson Elser Moskowitz Edelman & Dicker LLP serves as special environmental counsel. Attorneys at Lowenstein Sandler, PC, represent the Creditors' Committee as counsel. The Company's foreign subsidiary, RCC, Inc., formerly known as Ronson Corporation of Canada Ltd., is not included in the filing. Upon the closing of the sale of the Company's Aviation Division on Oct. 15, 2010, the Company ceased to have operations, other than to effectuate its wind-down and approve its liquidation plan by the Bankruptcy Court. On Aug. 29, 2011, the Bankruptcy Court confirmed the Debtors' Liquidating First Amended Joint Plan. RCLC INC: Joint Plan of Liquidation Effective --------------------------------------------- BankruptcyData.com reports that the First Amended Joint Plan of Liquidation for RCLC (f/k/a Ronson) became effective, and the Company emerged from Chapter 11 protection. On Aug. 29, 2011, the U.S. Bankruptcy Court for the District of New Jersey confirmed the Liquidating First Amended Joint Plan of RCLC, Inc., f/k/a Ronson Corporation, RA Liquidating Corp. f/k/a/ Ronson Aviation, Inc., and RCPC Liquidating Corp. f/k/a Ronson Consumer Products Corporation under Chapter 11 of the Bankruptcy Code. Under the provisions of the Confirmation Order and the Joint Plan, the Priority Claims, the Prepetition Credit Facility Claims, the Getzler Henrich Claim, and the Other Secured Claims, as those terms are defined in the Joint Plan, have either been satisfied in full or will be satisfied in full following the confirmation of the Joint Plan. The General Unsecured Claims, under the Joint Plan will not be fully satisfied. The General Unsecured Creditors will receive pro rata distributions form each of the three estates, the General Unsecured Creditors of the Company will receive approximately 5% of the amount of their claims, the General Unsecured Creditors of RA Liquidating Corp.("RAL") will receive approximately 44% of their claims, and the General Unsecured Creditors of RCPC Liquidating Corp. ("RCPC") will receive approximately 29% of the amount of their claims. At July 31, 2011, there were 5,083,539 shares of the Company's common stock outstanding. The outstanding shares of the Company will be canceled on the effective date and equity holders of the Company, RAL and RCPC will receive no distribution under the Joint Plan for their equity interests. About RCLC Inc. RCLC, Inc., formerly known as Ronson Corporation, in Woodbridge, New Jersey, historically, has been engaged principally in these businesses -- Consumer Products; and Aviation-Fixed Wing and Helicopter Services. Trenton, New Jersey-based Ronson Aviation, Inc., now known as RA Liquidating Corp., filed for Chapter 11 protection on Aug. 17, 2010 (Bankr. D. N.J. Case No. 10-35315). The Debtor estimated its assets at $10 million to $50 million and its debts at $1 million to $10 million. Affiliates RCLC, Inc. (Bankr. D. N.J. Case No. 10-35313), and RCPC Liquidating Corporation (Bankr. D. N.J. Case No. 10-35318) filed separate Chapter 11 petitions on Aug. 17, 2010, each estimating their assets at $1 million to $10 million and debts at $1 million to $10 million. The cases, along with RCLC, Inc.'s, are jointly administered, with RCLC, Inc., as the lead case. Michael D. Sirota, Esq., and David M. Bass, Esq., and Felice R. Yudkin, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, N.J., represent the Debtors as counsel. Wilson Elser Moskowitz Edelman & Dicker LLP serves as special environmental counsel. Attorneys at Lowenstein Sandler, PC, represent the Creditors' Committee as counsel. The Company's foreign subsidiary, RCC, Inc., formerly known as Ronson Corporation of Canada Ltd., is not included in the filing. Upon the closing of the sale of the Company's Aviation Division on Oct. 15, 2010, the Company ceased to have operations, other than to effectuate its wind-down and approve its liquidation plan by the Bankruptcy Court. RCLC INC: Notices Termination of Registration of Common Stock ------------------------------------------------------------- RCLC, Inc., filed with the U.S. Securities and Exchange Commission on Oct. 25, 2011, on Form 15-12G, a notice of termination of registration of its common stock, par value $1.00 per share, under Section 12(g) of the Securities Exchange Act of 1934. A copy of the Form 15-12G is available for free at: http://is.gd/IAGxm4 About RCLC Inc. RCLC, Inc., formerly known as Ronson Corporation, in Woodbridge, New Jersey, historically, has been engaged principally in these businesses -- Consumer Products; and Aviation-Fixed Wing and Helicopter Services. Trenton, New Jersey-based Ronson Aviation, Inc., now known as RA Liquidating Corp., filed for Chapter 11 protection on Aug. 17, 2010 (Bankr. D. N.J. Case No. 10-35315). The Debtor estimated its assets at $10 million to $50 million and its debts at $1 million to $10 million. Affiliates RCLC, Inc. (Bankr. D. N.J. Case No. 10-35313), and RCPC Liquidating Corporation (Bankr. D. N.J. Case No. 10-35318) filed separate Chapter 11 petitions on Aug. 17, 2010, each estimating their assets at $1 million to $10 million and debts at $1 million to $10 million. The cases, along with RCLC, Inc.'s, are jointly administered, with RCLC, Inc., as the lead case. Michael D. Sirota, Esq., and David M. Bass, Esq., and Felice R. Yudkin, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, N.J., represent the Debtors as counsel. Wilson Elser Moskowitz Edelman & Dicker LLP serves as special environmental counsel. Attorneys at Lowenstein Sandler, PC, represent the Creditors' Committee as counsel. The Company's foreign subsidiary, RCC, Inc., formerly known as Ronson Corporation of Canada Ltd., is not included in the filing. Upon the closing of the sale of the Company's Aviation Division on Oct. 15, 2010, the Company ceased to have operations, other than to effectuate its wind-down and approve its liquidation plan by the Bankruptcy Court. On Aug. 29, 2011, the Bankruptcy Court confirmed the Debtors' Liquidating First Amended Joint Plan. RCS CAPITAL: Court Approves Michael Carmel as Bankruptcy Counsel ---------------------------------------------------------------- The Hon. Randolph J. Haines of the U.S. Bankruptcy Court for the District of Arizona authorized RCS Capital Development LLC to employ the Law Offices of Michael W. Carmel Ltd. as its bankruptcy counsel. According to the Troubled Company Reporter on Oct. 20, 2011, the Debtor proposes to pay the firm pursuant to its hourly rates: $550 per hour for Michael W. Carmel and $135 per hour for paralegals. Mr. Carmel attested that the firm does not hold or represent any interest adverse to the Debtor or the estate, and the Firm has no connection with the creditors or any other party in interest, or any of their attorneys, or any person employed in the Office of the United States Trustee. Mr. Carmel can be reached at: LAW OFFICES OF MICHAEL W. CARMEL, LTD. 80 East Columbus Avenue Phoenix, AZ 85012-2334 Telephone: (602) 264-4965 Facsimile: (602) 277-0144 E-mail: Michael@mcarmellaw.com About RCS Capital RCS Capital Development LLC filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 11-28746) on Oct. 12. The bankruptcy stemmed from a dispute with A.B.C. Learning Centres Ltd., an Australia- based operator of childcare centers. Liquidators for A.B.C. filed for Chapter 15 relief in May 2010 in Delaware. In November and January, U.S. Bankruptcy Judge Kevin Gross ruled that the liquidators are entitled to use Chapter 15 and gave an expansive reading to the injunction against creditor actions in the U.S. In part, Judge Gross was halting collection actions taken in the U.S. by RCS, which won a $47 million jury verdict against A.B.C. in a lawsuit over the breach of development contracts for locations in the U.S. The A.B.C. liquidators have argued that RCS violated the Chapter 15 order by continuing actions in Nevada to seize property in which the liquidators claimed an interest. At a hearing in U.S. Bankruptcy Court in Delaware on Oct. 4, the liquidators asked Judge Gross to rule that RCS violated the automatic stay. The liquidators also wanted RCS to be held in contempt, directed to return property and assessed with punitive damages. Judge Gross concluded the Oct. 4 hearing and said he would rule later, court records show. RCS reported $57 million in assets, composed mostly of the judgment against A.B.C. RCS listed $50.5 million in claims, almost all unsecured. A.B.C. sits atop the list of 20 largest unsecured creditors with its $40 million disputed claim. Judge Randolph J. Haines presides over RCS's case. RCS CAPITAL: Court Sets Nov. 30 as Claims Bar Date -------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona set Nov. 30, 2011, as deadline for creditors of RCS Capital Development LLC to file proofs of claim. About RCS Capital RCS Capital Development LLC filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 11-28746) on Oct. 12. The bankruptcy stemmed from a dispute with A.B.C. Learning Centres Ltd., an Australia- based operator of childcare centers. Liquidators for A.B.C. filed for Chapter 15 relief in May 2010 in Delaware. In November and January, U.S. Bankruptcy Judge Kevin Gross ruled that the liquidators are entitled to use Chapter 15 and gave an expansive reading to the injunction against creditor actions in the U.S. In part, Judge Gross was halting collection actions taken in the U.S. by RCS, which won a $47 million jury verdict against A.B.C. in a lawsuit over the breach of development contracts for locations in the U.S. The A.B.C. liquidators have argued that RCS violated the Chapter 15 order by continuing actions in Nevada to seize property in which the liquidators claimed an interest. At a hearing in U.S. Bankruptcy Court in Delaware on Oct. 4, the liquidators asked Judge Gross to rule that RCS violated the automatic stay. The liquidators also wanted RCS to be held in contempt, directed to return property and assessed with punitive damages. Judge Gross concluded the Oct. 4 hearing and said he would rule later, court records show. RCS reported $57 million in assets, composed mostly of the judgment against A.B.C. RCS listed $50.5 million in claims, almost all unsecured. A.B.C. sits atop the list of 20 largest unsecured creditors with its $40 million disputed claim. Judge Randolph J. Haines presides over RCS's case. The Law Offices of Michael W. Carmel, Ltd., represents the Debtor as counsel. RONALD RUNYEON: Court Wants Plan Modified to Reflect New Valuation ------------------------------------------------------------------ Ronald Runyeon and Linda Simmons seek to confirm their July 12, 2011 Amended Chapter 11 Plan over the objections of Regions Mortgage, Inc., and BAC Home Loans Servicing LP. The debtors have shown by a preponderance of the evidence that all applicable provisions of the Bankruptcy Code have been met, and their plan is not likely to be followed by the need for further reorganization. The objections raised by BAC and Regions relate to the debtors' valuation of these creditors respective collateral. BAC is the first lien holder on real property located at 3723 Meadowbrook Nashville, Tenn. The creditor argues that the plan unfairly discriminates, is not fair and equitable, and must offer an equivalent of not less than the amount the claimant would receive or retain if the debtor were liquidated in chapter 7. The debtors intend to pay $260,000 -- based on an appraisal obtained by the debtors -- when BAC contends the value of the property is $310,000 -- based on the bank's appraisal. Mr. Runyeon, who has been in the real estate business for 25 years, testified that he agreed with the $260,000 appraisal, and that he was aware the bank's appraisal was $310,000. The court heard only that the bank supported the higher figure and the debtor the lower. The debtor bears the burden of proof, and the debtors' unrebutted proof was that the $260,000 is fair and equitable and passes muster on the best interest of creditor's test as proposed. In an Oct. 25, 2011 Memorandum, Bankruptcy Judge George C. Paine overruled BAC's objection to confirmation. Regions Bank is the first lien holder on property located at 1116 Dogcreek Road in Kingston Spring, Tenn. Prior to the May 2010 flooding, this was the debtors' primary residence. As a result of the flood, the entire first floor and the parts of the second floor were destroyed, and the home remains in the flood zone. Mr. -Runyeon testified that he believes the current value of the house is between $50,000 and $60,000, and the rebuilt value of this house is about $100,000. Regions objects to the $100,000 valuation because the debtors owe Regions more than $198,000, and the debtors' insurance company offered the debtors $147,000 in insurance proceeds. Mr. Runyeon testified that he and Mrs. Simmons did not accept the insurance check because they think the insurance should be closer to $200,000. Mr. Runyeon explained that he believed even if they were able to get $200,000 from the insurance company and use it to rebuild the house, the house will never be worth more than $100,000 because of its location in the flood zone. Mr. Runyeon and Mrs. Simmons have not decided if they will rebuild, move back in, or possibly rent the house. Regions objects that the $100,000 valuation is too low, and that the debtors will be unjustly enriched by insurance proceeds over that amount while discharging almost $100,000 in debt on Regions claim. The court agrees. In order to confirm their plan, the Court said the debtors must amend the plan within 14 days of the Court's decision, to reflect a valuation equal to the amount of any insurance check received by the debtors, but no less than the $147,000 already offered. A copy of the Court's decision is available at http://is.gd/mRQ82P from Leagle.com. Kingston Springs, Tennessee-based Ronald D. Runyeon and Linda Sue Simmons filed for Chapter 11 bankruptcy protection on November 4, 2010 (Bankr. M.D. Tenn. Case No. 10-12006). Elliott Warner Jones, Esq., and Warner Jones, Esq., and Emerge Law, PLC, assist the Debtors in their restructuring effort. The Debtors estimated their assets at $10 million to $50 million and debts at $1 million to $10 million. ROTHSTEIN ROSENFELDT: Insurers, Others Object to Consolidation -------------------------------------------------------------- Roxanne Palmer at Bankruptcy Law360 reports that the Chapter 11 trustee for convicted Ponzi schemer Scott Rothstein's law firm faces opposition to his plan to consolidate a feeder fund into the law firm's estate, with the fund's insurers, Rothstein's creditors and others filing objections Wednesday in Florida bankruptcy court. 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. SCI REAL ESTATE: Court Extends Plan Filing Deadline to Dec. 11 -------------------------------------------------------------- The Hon. Peter H. Carroll of the U.S. Bankruptcy Court for the Central District of California extended the exclusive periods of SCI Real Estate Investments LLC to file a Chapter 11 plan until Dec. 11, 2011, and solicit acceptances of that plan until Feb. 6, 2012. The Debtor tells the Court that it has engaged the Official Committee of Unsecured Creditors in plan negotiations with a goal of generating recoveries for creditors to the greatest extent possible. According to the Debtor, they began working diligently to develop a restructuring plan to benefit all creditors well before the case was filed. Debtor say it continued negotiating with their major creditors, including Wells Fargo Bank and First Citizen Bank, to fashion a plan that will garner their support while yielding a meaningful recovery for trade and other unsecured creditors. About SCI Real Estate Investments Los Angeles, California-based SCI Real Estate Investments, LLC, filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-15975) on Feb. 11, 2011. Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP, serves as the Debtor's bankruptcy counsel. Haskell & White LLP as accountant. Kennerly, Lamishaw & Rossi LLP as special real estate counsel. The Debtor disclosed $55,431,222 in assets and $69,514,028 in liabilities as of the Chapter 11 filing. SEA TRAIL: Waccamaw Bank Wants Adequate Protection for Cash Use --------------------------------------------------------------- Waccamaw Bank asks the U.S. Bankruptcy Court for the Eastern District of North Carolina to: -- deny Sea Trail Corporation's request to use the cash collateral; or -- in the alternative, permit the Debtor to use Waccamaw Bank's cash collateral only after meeting the specific terms and conditions as will provide Waccamaw Bank adequate protection of its interest in such cash collateral. Waccamaw Bank is a secured creditor of the Debtor by virtue of two promissory notes secured by senior deed of trust liens on all of the Debtor's real estate and rents defined as all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the real estate. Waccamaw Bank has ordered an appraisal of the collateral but does not believe the value exceeds the indebtedness. As reported in the Troubled Company Reporter on Oct. 24, 2011, Judge Stephani W. Humrickhouse entered an order authorizing Sea Trail to use through Nov. 1, 2011, cash collateral of Waccamaw Bank for its operating expenses solely for preserving and maintaining Waccamaw Bank's collateral in accordance with a budget, only after exhausting all non-cash collateral. Prior to the Petition Date, Waccamaw Bank took a security interest in certain real property owned by the Debtor in order to secure obligations arising under two promissory notes involving the parties. Upon the Debtor's request to use cash collateral, the parties agreed to interim terms to temporarily resolve their cash collateral-related issues. Waccamaw Bank relates that it does not consent to the Debtor's use of its cash collateral without adequate protection. The bank asserts that it is entitled to adequate protection in the form of: a. Cross-collateralization of its prepetition debt with any postpetition collateral; b. Periodic cash payments; c. Periodic internal and audited financial statements; d. Periodic and segregated accounting of its collateral; e. Proof of insurance with the Bank listed as additional insured; f. The right to reasonable inspection of its collateral and the books and records of the Debtor as they relate to said collateral, including without limitation the Debtor's operating budgets; and g. Restriction of the Debtor's use of the cash collateral only in accordance with approved budgets and only after non-cash collateral revenue has been exhausted. The bank reserves the right to raise other objections to the motion at any hearing thereon. Waccamaw Bank is represented by: Paul A. Fanning, Esq. Tyler J. Russell, Esq WARD AND SMITH, P.A. P.O. Box 8088 Greenville, NC 27835-8088 Tel: (252) 215-4000 Fax: (252) 215-4077 E-mail: paf@wardandsmith.com tjr@wardandsmith.com About Sea Trail Corporation Headquartered in Sunset Beach, North Carolina, Sea Trail Corporation is a private company categorized under "Land Subdividers and Developers, Residential." Sea Trail Corporation filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 11-07370) on Sept. 27, 2011, in Wilson, North Carolina. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., in New Bern, North Carolina serves as counsel to the Debtor. The Debtor reported $34,222,281 in assets and $22,174,201 in liabilities. SEA TRAIL: Taps RE/MAX as Broker to Sell Kings Trail Property ------------------------------------------------------------- Sea Trail Corporation asks the U.S. Bankruptcy Court for the Eastern District of North Carolina for permission to employ RE/MAX as broker for aiding the Debtor in the sale of the Debtor's real property: Lot 54, Kings Trail in Sunset Beach, North Carolina. The Debtor will pay a commission of maximum of 8% of the gross sale price of the property. The Debtor assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Headquartered in Sunset Beach, North Carolina, Sea Trail Corporation is a private company categorized under "Land Subdividers and Developers, Residential." Sea Trail Corporation filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 11-07370) on Sept. 27, 2011, in Wilson, North Carolina. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., in New Bern, North Carolina serves as counsel to the Debtor. The Debtor reported $34,222,281 in assets and $22,174,201 in liabilities. SEA TRAIL: Wants Sale of Lot 54 to Linda J. Bertschy Approved ------------------------------------------------------------- Sea Trail Corporation asks the U.S. Bankruptcy Court for the Eastern District of North Carolina to approve the sale of Lot 54 Kings Trail, Sea Trail, Sunset Beach, North Carolina via private sale to Linda J. Bertschy. Ms. Bertschy has agreed to purchase the property for $75,000 pursuant to the offer to purchase and contract - vacant lot/land signed by Ms. Bertschy and Dana Connelly, as chief operating officer of the Debtor, on Sept. 30, 2011. The transaction is an arms-length transaction. The Debtor relates that no proceeds will be available for distribution to unsecured creditors as a result of the sale. The sale will allow the Debtor to reduce its obligations to Waccamaw Bank. Because the lots are subject to a blanket lien on certain real estate by Waccamaw Bank, the Debtor does not expect to receive any proceeds from the sale of the property. Waccamaw Bank asserts a lien on Lot 54, and the proceeds therefrom pursuant to its deed of trust dated Dec. 29, 2006. About Sea Trail Corporation Headquartered in Sunset Beach, North Carolina, Sea Trail Corporation is a private company categorized under "Land Subdividers and Developers, Residential." Sea Trail filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 11-07370) on Sept. 27, 2011, in Wilson, North Carolina. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., in New Bern, North Carolina serves as counsel to the Debtor. The Debtor reported $34,222,281 in assets and $22,174,201 in liabilities. SEA TRAIL: Wants to Hire Stubbs & Perdue as Attorney ---------------------------------------------------- Sea Trail Corporation asks the U.S. Bankruptcy Court for the Eastern District of North Carolina for permission to employ Stubbs & Perdue P.A. as attorney to represent and assist the Debtor in carrying out its duties. The Debtor tells the Court that it paid $51,442 retainer fee to the firm from Feb. 11, 2011, to June 16, 2011, for services rendered. The Debtor assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Headquartered in Sunset Beach, North Carolina, Sea Trail Corporation is a private company categorized under "Land Subdividers and Developers, Residential." Sea Trail Corporation filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 11-07370) on Sept. 27, 2011, in Wilson, North Carolina. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., in New Bern, North Carolina serves as counsel to the Debtor. The Debtor reported $34,222,281 in assets and $22,174,201 in liabilities. SEMGROUP CORP: Faruqi & Faruqi Probes Firm on Asset Sale -------------------------------------------------------- Faruqi & Faruqi, LLP, a leading national securities firm headquartered in New York City, is investigating the Board of Directors of SemGroup Corporation for potential breaches of fiduciary duties in connection with their conduct related to the proposed sale of the Company to Plains All American Pipeline, L.P. PAA +0.11% in an all-cash deal valued at about $1.24 billion. Under the terms of the proposed transaction, SemGroup stockholders will receive $24.00 in cash for each share of SemGroup common stock they own. The Board of Directors rejected the acquirer's proposal and refused to engage in constructive discussions. The Board also had rejected a March 2010 bid of $17.00 a share. SemGroup filed for bankruptcy protection in 2008 after $2.9 billion in trading losses. Whether SemGroup's Board of Directors is acting in accordance with their fiduciary duties to SemGroup's stockholders to conduct an adequate and fair sales process to sell the Company and whether SemGroup's Board of Directors is adequately negotiating a price increase for the proposed transaction are the key focus of this investigation. Faruqi & Faruqi, LLP is a national law firm which represents investors and individuals in class action litigation. The firm is focused on providing exemplary legal services in complex litigation in the areas of securities, shareholder, antitrust and consumer litigation, throughout all phases of litigation. The firm has an experienced trial team which has achieved significant victories on behalf of the firm's clients. About SemGroup, L.P. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 08-11525) on July 22, 2008. John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represented the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. served as the Debtors' claims agent. The Blackstone Group L.P. and A.P. Services LLC acted as the Debtors' financial advisors. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represented the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. SemGroup LP won confirmation from the Bankruptcy Court of its Fourth Amended Plan of Reorganization on Oct. 28, 2008. The Plan, which distributed more than $2.5 billion in value to stakeholders, was declared effective on November 30, 2008. SENESCO TECHNOLOGIES: Gets Notice of Non-Compliance From NYSE Amex ------------------------------------------------------------------ Senesco Technologies, Inc., has received a notice from the NYSE Amex LLC that the Company does not meet one of the NYSE Amex's continued listing standards as set forth in Part 10 of the NYSE Amex Company Guide, and therefore, the Company has become subject to the procedures and requirements of Section 1009 of the Company Guide. Specifically, the Company is not in compliance with Section 1003(a)(iii) of the Company Guide with stockholder's equity of less than $6,000,000 at June 30, 2011 and losses from continuing operations and/or net losses in its five most recent fiscal years. The Company reported stockholder's equity of $4,517,463 at June 30, 2011. The notice is based on a review by the NYSE Amex of information which the Company has publicly disclosed, including information contained in the Company's Annual Report on Form 10-K for the period ended June 30, 2011, which disclosed the financial status of the Company at that time. To maintain an NYSE Amex listing, the Company must submit a plan by November 21, 2011 advising the NYSE Amex of action it has taken, or will take, to regain compliance with Section 1003(a)(iii) of the Company Guide by July 20, 2012. The Company is taking steps to prepare and submit such a plan to the NYSE Amex on or before Nov. 21, 2011. The Corporate Compliance Department management of the NYSE Amex will evaluate the Company's Plan and determine whether it reasonably demonstrates the Company's ability to regain compliance with Section 1003(a)(iii) of the Company Guide by July 20, 2012. If the NYSE Amex accepts the Company's Plan, the Company may be able to continue its listing during the Plan Period; provided that the Company demonstrates progress consistent with its Plan and complies with other applicable NYSE Amex listing qualifications. If the Company fails to submit a satisfactory Plan or fails to demonstrate progress consistent with the Plan accepted by the NYSE Amex, the NYSE Amex may initiate delisting proceedings. D uring the Plan Period, the Company will be subject to periodic review to determine whether it is achieving progress consistent with the Plan. About Senesco Technologies Senesco Technologies, Inc. is leveraging proprietary technology that regulates programmed cell death, or apoptosis. Accelerating apoptosis may have applications in treating cancer, while delaying apoptosis may have applications in treating certain inflammatory and ischemic diseases. The Company has initiated a clinical study in multiple myeloma with its lead therapeutic candidate, SNS01-T. Senesco has already partnered with leading-edge companies engaged in agricultural biotechnology and is entitled to earn research and development milestones and royalties if its gene-regulating platform technology is incorporated into its partners' products. SHAMROCK-SHAMROCK: Files Amended Schedules of Assets & Liabilities ------------------------------------------------------------------ Shamrock-Shamrock Inc. filed with the U.S. Bankruptcy Court for the Middle District of Florida amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ----------- A. Real Property $12,091,327 B. Personal Property 812,827 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $17,021,979 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Non-priority Claims $14,123 ------------ ------------ TOTAL $12,904,154 $17,036,102 A full-text copy of the amended Schedules is available for free at http://bankrupt.com/misc/SHAMROCK-SHAMROCK_sal_amended.pdf In the original schedules, the Company disclosed assets of $12,904,154 and liabilities of $17,021,201, owing on mortgages to a variety of lenders. 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. SHELDRAKE LOFTS: Oct. 31 Hearing on Exclusivity Set --------------------------------------------------- The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on Oct. 31, 2011, at 10:00 a.m., to consider Sheldrake Lofts LLC's motion to extend its exclusive period to solicit acceptances for the proposed chapter 11 plan. Objections were due Oct. 25. The Debtor related that it needs more time to be in a position to formulate, negotiate and file a viable plan of reorganization and prepare adequate information to allow creditors to determine whether to accept the plan. In the Debtor's third request for extension, the Debtor, after the mediation concluded without any resolution, continued settlement discussions with two groups of defendants, the Tannenbaum defendants -- the law firm of Tannenbaum Helpern Syracuse & Hirschtritt LLP, who was Remediation Capital Funding, LLC's counsel -- and L&M defendants -- L&M Development Group, LLC -- and they each agreed to settle the Debtor's respective claims against them without admitting any liability. The Debtor's counsel is now preparing the motion papers, and it is expected that these settlements will be heard by the Court on Oct. 31. As reported in the Troubled Company Reporter on July 29, 2011, the Debtor is involved in a mediation with its primary creditor, RCF, the Village, and Cozen & O'Connor, Tannenbaum. The mediation involved negotiations with RCF and other major players in the case, the Village. Melanie L. Cyganowski, Esq., was the mediator. The Debtor is also engaged in discussions with its insurance broker Aon's counsel regarding the Debtor's request for reimbursement of the necessary expenses to repair its properties well as the Debtor's claims against Aon for misrepresentation or gross negligence. About Sheldrake Lofts LLC New Rochelle, New York-based Sheldrake Lofts LLC owns several contiguous parcels of real property in the Village of Mamaroneck situated along the Sheldrake River: 270 Waverly Avenue, 206-208 Waverly Avenue, 188 Waverly Avenue. It filed for Chapter 11 protection on August 10, 2010 (Bankr. S.D.N.Y. Case No. 10-23650). David H. Wander, Esq., at Davidoff, Malito & Hutcher, LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets at $50 million to $100 million and its debts at $10 million to $50 million as of the Petition Date. SIRIUS XM: S&P Upgrades Corporate Credit Rating to 'BB' ------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on New York City-based Sirius XM Radio Inc. and subsidiary XM Satellite Radio Inc. to 'BB' from 'BB-'. The rating outlook is stable. The action reflects the company's declining debt leverage, improving discretionary cash flow, and the prospects for continued improvement in credit measures through the remainder of 2011 and 2012. "Our recovery ratings on Sirius XM's and XM Satellite Radio's debt issues remain unchanged. We have raised our issue-level ratings on these companies' debt by one notch in conjunction with the one- notch upgrade," S&P related. "The 'BB' rating on Sirius XM Radio reflects our expectation that debt levels will remain relatively stable, but that the company will continue to reduce gross adjusted debt leverage to the mid-3x area by the end of 2012 through EBITDA growth," said Standard & Poor's credit analyst Hal Diamond. "We assess the company's business risk profile as 'fair' (as we define the term in our criteria), reflecting its relative stability, its dependence on U.S. auto sales and consumer discretionary spending for growth, and its longer-term vulnerability to competition from alternative media. We view Sirius XM's financial risk as 'significant' because of recurring periods of capital intensity and the absence of a revolving credit facility for back-up liquidity," S&P related. Sirius XM is the only U.S. satellite radio operator, but it faces significant hurdles to maintaining consistent, long-term growth, including the need to broaden subscriber demand and reduce churn in line to rates with other satellite entertainment providers. "The company faces increased competition from the Internet and several emerging technologies, many which are free, though we expect the impact on near-term subscriber growth will not be material," S&P said. Sirius XM derives almost all of its revenue from subscription fees, as advertising revenues are a small revenue source. Revenue growth is largely a function of new subscriber additions, which are heavily dependent on new auto sales and, to a lesser extent, price increases. Further long-term risks relate to maintaining subscriber growth during a period of increasing competition from online audio services. Profitability is similar to peer U.S. satellite direct-to-home companies, with Sirius' much lower programming costs offset by higher revenue-sharing payments to automakers and subscriber acquisition costs. Gross lease-adjusted debt to EBITDA declined to 4.7x for the 12 months ended June 30, 2011, from 6.1x in the prior 12 months, due to EBITDA growth. "Our expectation of declining leverage through the end of 2012 is consistent with the indicative debt-to-EBITDA ratio range of between 3x and 4x that characterizes significant financial risk under Standard & Poor's criteria. EBITDA coverage of total interest expense increased to 2.0x for the 12 months ended June 30, 2011, versus 1.5x in the prior 12 months. Total interest expense is relatively high as a result of a high average cost of term debt, the absence of lower cost bank debt, and capitalized interest expense. Our base case scenario indicates that gross adjusted debt leverage could decline to the low- to mid-4x range by year-end 2011 and the mid-3x range by the end of 2012. Our base case indicates interest coverage could rise in the low- to mid-2x range by year-end 2011 and high-2x range in 2012m," S&P related. SPANGLER GROUP: Seattle Investor Lost Millions of Clients' Money ---------------------------------------------------------------- Levi Pulkkinen at Seattlepi.Com reports that federal agents have raided the home of a Seattle investment manager alleged to have tricked clients into investing in startup companies he managed, then lost much of their money when one of the firms collapsed. Mark Spangler and his firm, The Spangler Group Inc., went into receivership earlier this year, admitting in court that he and the company were not able to pay their bills, according to the report. Now, according to recently unsealed law enforcement statements, Spangler is the subject of an FBI fraud and money laundering investigation as well as a Securities and Exchange Commission inquiry, the report notes. Seattlepi.Com says that in a statement filed in U.S. District Court at Seattle, an FBI agent assigned to the white collar crimes division contended Spangler led several clients to believe he?d invested their money in relatively safe, diversified funds. Instead, the agent said, it appears Spangler directed millions to two privately held, cash-poor companies in which he had a leadership role. One of those firms appears to have closed in March and cost Spangler?s investors at least $46 million, Seattlepi.Com relates. The report discloses that documents filed in state court by Spangler show he was managing the fortunes of more than 100 investors spread around the country when he was forced to file for receivership earlier this year. Since then, a court-appointed attorney has been in charge of selling Spangler?s assets ? including a 64-foot yacht valued at $850,000, and a $1.3 million house in Seattle?s Portage Bay neighborhood ? in an effort to settle the 56-year-old?s debts, Seattlepi.Com adds. SPECIALTY PRODUCTS: Seeks to Move Plan Filing Deadline to Nov. 30 ----------------------------------------------------------------- Specialty Products Holding Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file a Chapter 11 plan until Nov. 30, 2011, and solicit acceptances of that plan until Jan. 30, 2012. A hearing is set for Nov. 21, 2011, at 9:30 a.m., to consider the Debtors' request for extension. Objection, if any, are due Oct. 21, 2011 at 4:00 p.m. This is the Debtors' third request for an extension. According to the Debtors, they have been engaged in a variety of tasks over the last six months, most of them related to an estimation of the Debtors' asbestos liability. Beginning in October 2010, the Debtors filed a series of Rule 2004 motions seeking to obtain information to assist their estimation expert, Bates White LLC, in preparing a thorough and accurate estimation of the Debtors' asbestos liability. The Debtors say, although the Court has denied, without prejudice, two of the Rule 2004 motions and has taken a third under advisement, it authorized the Debtors to proceed with a claimant information form for mesothelioma claimants with pending lawsuits against one or both Debtors. The deadline for claimants to complete that form is not until Nov. 2, 2011, however, and the Debtors anticipate that all parties will require time after the deadline to review the submissions and process the claimant data. Accordingly, the Debtors require additional time, at a minimum, to review and analyze the data received through the claimant information form. The Debtors says they remain committed to emerging from Chapter 11 as soon as practicable. Given the complexity and magnitude of the asbestos-related issues and the current status of the Debtors' discovery requests, neither the Debtors nor any other party is in a position to propose a viable plan of reorganization. The short, two-month extension of the exclusive Periods requested by the Debtors will not result in any delay of the plan process, and should be granted. About Specialty Products Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM, Inc., is a wholly owned subsidiary of RPM International Inc. The Company is the holding company parent of Bondex International, Inc., and the direct or indirect parent of certain additional domestic and foreign subsidiaries. The Company claims to be a leading manufacturer, distributor and seller of various specialty chemical product lines, including exterior insulating finishing systems, powder coatings, fluorescent colorants and pigments, cleaning and protection products, fuel additives, wood treatments and coatings and sealants, in both the industrial and consumer markets. The Company filed for Chapter 11 bankruptcy protection on May 31, 2010 (Bankr. D. Del. Case No. 10-11780). Gregory M. Gordon, Esq., Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve as bankruptcy counsel. Daniel J. DeFranceschi, Esq., and Zachary I. Shapiro, Esq., at Richards Layton & Finger, serve as co-counsel. Logan and Company is the Company's claims and notice agent. The Company estimated its assets and debts at $100,000,001 to $500,000,000. The Company's affiliate, Bondex International, Inc., filed a separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779), estimating its assets and debts at $100,000,001 to $500,000,000. STERLING SHOES: Gets Toronto Stock Exchange Delisting Notice ------------------------------------------------------------ Sterling Shoes Inc. has received notice from the Toronto Stock Exchange that its common shares and convertible debentures will be delisted at the close of market on November 25, 2011 for failure to meet the continued listing requirements of TSX. The common shares and debentures will remain suspended from trading until that date. The notice follows the initial order obtained by the Company under the Companies' Creditors Arrangement Act on Friday, October 21, 2011. About Sterling Shoes Sterling Shoes Inc. is a leading Vancouver-based footwear retailer offering a broad selection of private label and brand name shoes and accessories across five Canadian provinces through its five separate retail banners: Sterling, Joneve, Shoe Warehouse, Freedman Shoes and Gia. Since 1987, Sterling Shoes has grown from five shopping mall locations to 158 stores (as at October 26, 2011) located primarily in high-traffic, high-visibility locations within enclosed shopping malls, on high streets and in strip malls. Sterling Shoes currently employs approximately 1,100 employees. SUGARLEAF TIMBER: Plan Outline is Inadequate, Farm Credit Says -------------------------------------------------------------- Farm Credit of Florida, ACA, opposes approval of the Disclosure Statement filed in support of SugarLeaf Timber, LLC's Plan of Reorganization dated Sept. 4. 2011. Counsel to Farm Credit, Brian P. Hall, Esq., at Smith, Gambrekk & Russell, LLP, in Atlanta, Georgia, contends that the Plan is a partial "dirt for debt" plan seeking to force Farm Credit to receive a portion of its real property in full satisfaction of approximately $27,400,000 in secured claims while the Debtor retains approximately 622 acres of real property collateral which Farm Credit is forced to release under the Plan. The Plan, he adds, also appears to provide a release of Farm Credit's claims against six individual guarantors. The Disclosure Statement fails to include adequate information regarding the value of the property and the risks inherent in attempting to confirm a partial dirt for debt plan, Mr. Hall asserts. He adds that the Disclosure Statement is also inadequate in a number of other respects, including the absence of any explanation regarding the purpose and legal theories behind the release of the Guarantors. As reported in the Sept. 14, 2011, edition of the Troubled Company Reporter, the Sugarleaf Timber Plan essentially provides that (a) the Reorganized Debtor will transfer a portion of its properties to Farm Credit of North Florida in full satisfaction of the Farm Credit Notes; and (b) the Reorganized Debtor will operate its business, including the marketing and sale of the property vested in the Reorganized Debtor, to pay the remainder of its debts. The Debtor obtained over $20 million in loans from Farm Credit in 2007 to purchase, develop and sell more than 7,000 acres of land in Clay County, Florida. The Farm Credit loans are evidenced by three notes. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/SUGARLEAFTIMBER_DS.PDF About Sugarleaf Timber Sugarleaf Timber, LLC, in Jacksonville, Florida, filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 11-03352) on May 8, 2011. Chief Bankruptcy Judge Paul M. Glenn presides over the case. Robert D. Wilcox, Esq., at Brennan, Manna & Diamond, PL, serves as the Debtor's bankruptcy counsel. In its Schedules, the Debtor disclosed assets of $31,016,486 and liabilities of $26,781,079. The petition was signed by Victoria D. Towers, manager of Diversified Investments of Jacksonville LLC, which serves as manager to the Debtor. SUMMER VIEW: Can Hire Cirrus Asset Management as Asset Manager -------------------------------------------------------------- Summer View Sherman Oaks LLC has obtained authorization from the U.S. Bankruptcy Court for the Central District of California to employ Cirrus Asset Management, Inc. to manage a 169-unit apartment building located at 15353 Weddington St., Sherman Oaks, Calif., the Debtor's only asset. The Debtor tells the Court of its dissatisfaction of the previous manager, Clyde Holland and his company Holland Residential (California), Inc. The Debtor relates that HRC's personnel have significantly overstepped the boundaries allowed of the management company of the Property and as a result, stolen records were not reported, two overlapping insurance policies were obtained, no insurance premiums were paid, and wrong banking institution was insured for the Property. The Debtor will pay Cirrus a management fee amounting $4,600 a month or 3% of monthly revenue generated by the Property, whichever is greater. In addition, Cirrus agrees to manage the Property pursuant to an operating budget approved by the U.S. Bankruptcy Court and to comply with all other requirements imposed by the U.S. Bankruptcy Court and the U.S. Trustee's office. Steve Heimler, the president of Cirrus, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be contacted at: CIRRUS ASSET MANAGEMENT, INC. 23621 Calabasas Rd Calabasas, CA 91302 Tel: (818) 222-4840 About Summer View Sherman Oaks LLC Summer View Sherman Oaks LLC, aka Summer View Sherman Oaks Apartments LLC, a single-asset real estate company, is the owner of a 169-unit apartment building locate at 15353 Weddington Street, in Sherman Oaks, California. The Company filed for bankruptcy under Chapter 11 (Bankr. C.D. Calif. Case No. 11-19800) on Aug. 15, 2011. The West Hollywood, California-based Company estimated assets and liabilities of $10 million to $50 million. Judge Alan M. Ahart presides over the case. Terry D. Shaylin, Esq., at Karasik Law Group, LLP, serves as the Debtor's bankruptcy counsel. The petition was signed by Sonia Sobol, member. TELECONTINUITY INC: Ch. 7 Trustee Settles With WWC Capital Fund --------------------------------------------------------------- Judge Paul Mannes signed off on a settlement between Merrill Cohen, the Chapter 7 Trustee of Telecontinuity, Inc.'s estate (Bankr. D. Md. Case No. 10-12513) and WWC Capital Fund II, LP, in its capacity as collateral agent and prepetition and post-petition lenders for whom WWC Capital Fund II, LP, acted as collateral agent. Pursuant to the settlement, the WWC Parties would assign to the estate their prepetition senior blanket lien claims in excess of $350,000 and their Chapter 11 superpriority administrative claims of about $443,000, and pay the estate $300,000 cash, all in consideration for the Chapter 7 Trustee's execution of a general release of the estate's claims against the WWC Parties. Louis M. Mayberg and Nobska Venture Partners I LP filed an objection to the settlement in which they assert that the Settlement is not in the best interests of the estate and that they have made an offer to purchase the estate's claims against the WWC Parties for $350,000 cash, an amount which is superior to the consideration the estate receives under the Settlement. The Chapter 7 Trustee stated, however, that he had extensive discussions with Mr. Mayberg and Nobska about a sale to them of the estate's claims against the WWC Parties and concluded that this was not the appropriate method of liquidating this asset. Their offers did not measure up to the benefit to the estate offered by the Settlement. Among reasons for rejecting the Mayberg-Nobska Offer, the Chapter 7 Trustee concluded that inasmuch as Mr. Mayberg and Nobska do not have the power to assign the lien claims of the WWC Parties to the estate, the entire consideration for the sale would be subject to the $443,000 Chapter 11 superpriority administrative claim of the WWC Parties. While Mr. Mayberg and Nobska alleged grounds for challenging the claims of the WWC Parties, the Chapter 7 Trustee weighed the cost and speculative nature of such a proceeding and determined that the better, more certain result would be obtained by acceptance of the proposal of the WWC Parties. A copy of the Court's Oct. 24, 2011 Memorandum of Decision is available at http://is.gd/qXhTvxfrom Leagle.com. TETON AIR: Judge Pappas Dismisses Chapter 11 Case ------------------------------------------------- The Hon. Jim D. Pappas U.S. Bankruptcy Court for the District of Idaho dismissed the Chapter 11 case of Teton Air Ranch LLC at the behest of the U.S. Trustee. As reported in the Troubled Company Reporter on Sept. 22, 2011, Robert D. Miller, Jr., the U.S. Trustee for Region 19, asked the Court to dismiss or convert the Debtor's case. The U.S. Trustee told the Court that the Debtor has no employees and no business operations. It adds that the Debtor has not bank account since March 2010. The Debtor explained that the proceeding with the bankruptcy is in the best interest of Debtor's unsecured creditors and the estate. Further, the Debtor has complied with all of the specific requirements of which the U.S. Trustee, or is in the process of coming into full compliance with such and has provided explanation regarding the current status of any incomplete requirements. Automatic Stay In relation to the motion for relief from automatic stay, the Debtor says that its sole asset -- certain real property located in Teton County, Idaho is fully encumbered by the present claim of Cypress Capital XXI, LLC. Cypress has asserted a claim against the property in excess of $15 million. While the precise value of the property is unknown, the Debtor has estimated its value to be approximately $5 million. However, the Debtor adds that there are question marks surrounding the validity and extent of Cypress' claim. The Debtor relates that it only received approximately $3.2 - $3.8 million in cash from Cypress, which transfers occurred between November of 2007 and October of 2008. However, Cypress now asserts that over the short time since the loan was made that it is now owed over $15 million. Further, the loan was entered into on behalf of Debtor by Bryce Karl, who was the owner and manager of Air Ranch Holdings, LLC, which was allegedly the majority owner and manager of the Debtor at the time the loan from Cypress was made to Debtor. About Teton Air Teton Air Ranch LLC, in Pocatello, Idaho, filed for Chapter 11 bankruptcy (Bankr. D. Idaho Case No. 11-41190) on July 18, 2011. Judge Jim D. Pappas presides over the case. Daniel C. Green, Esq., at Racine Olson Nye Budge & Bailey, serves as bankruptcy counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Corey Simon, authorized representative. According to its schedules, the Debtor disclosed $13,799,537 in total assets and $24,719,592 in total debts. TIMBER HOLDINGS: Coastal Forest Buys Firm Out of Receivership ------------------------------------------------------------- The Business Journal reports that Coastal Forest Products bought the assets of Timber Holdings International, Wauwatosa, out of receivership for $2.5 million. As reported in the Troubled Company Reporter on Sept. 27, 2011, Timber Holdings International has entered receivership after defaulting on its debt with M&I Bank. BMO Harris Bank, which bought Milwaukee-based M&I in July, sued Timber Holdings owner Cecco Trading Inc. earlier this month in Milwaukee County Circuit Court, according to the report. The report noted that Milwaukee attorney Michael Polsky, who has been appointed receiver, said this week he is negotiating with two prospective buyers for the business. Timber Holdings continues operating and has retained owner Brian Lotz as its president. Timber Holdings International is a Wauwatosa company that has supplied durable wood to the Atlantic City and Coney Island boardwalks and backyard decks across America. TR SHADOW: Court Sets Nov. 30 Claims Bar Date --------------------------------------------- The U.S. Bankruptcy Court for the Central District of California set Nov. 30, 2011, as deadline for creditors of TR Shadow View LLC to file proofs of claim. TR Shadow View, LLC, based in Newport Beach, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-19227) on June 29, 2011. Eric J. Fromme, Esq., at Rutan & Tucker LLP, serves as the Debtor's bankruptcy counsel. The Debtor disclosed $35,003,189 in assets and $33,352,297 in liabilities in its schedules. TRAILER BRIDGE: Inks Two Forbearance Agreements with Wells Fargo ---------------------------------------------------------------- Trailer Bridge, Inc., effective Oct. 24, 2011, entered into two Forbearance Agreements related to its revolving credit facility and term loan and security agreement by and among Wells Fargo Bank, N.A., in its capacity as agent, and the financial institutions from time to time party thereto. The Revolving Credit Facility provides, among other things, that the failure of the Company to refinance its Senior Secured Notes by Oct. 15, 2011, is an event of default. As of Oct. 25, 2011, the Company has not refinanced its Senior Secured Notes. The Loan Agreement provides that an event of default under the Revolving Credit Facility is an event of default under the Loan Agreement. The Forbearance Agreements provide that the Lenders agree to forbear exercising their rights and remedies until Oct. 31, 2011, provided no additional events of default occur. In exchange for the Forbearance Agreements, the Company paid a fee of $15,000 and executed a general release in favor of the Lenders and Wells Fargo for any claims related to the Revolving Credit Facility and the Loan Agreement that the Company had prior to or as of the date of the Forbearance Agreements. Failure to cure the default by Oct. 31, 2011, will result in the acceleration of the obligations due under the Revolving Credit Facility and the Loan Agreement. As of Oct. 15, 2011, approximately $6.1 million was drawn on the Revolving Credit Facility and $4.4 million was drawn on the Loan Agreement. If the Company is unable to cure the event of default or obtain a waiver or additional forbearance and the amounts due are accelerated, such acceleration, if uncured, may be considered an event of default giving rise to acceleration of the amounts due under the Company's Senior Secured Notes. Full-text copies of the Forbearance Agreements are available for free at: http://is.gd/L3eh36 http://is.gd/ehyo1b About Trailer Bridge Jacksonville, Fla.-based Trailer Bridge, Inc., is an integrated trucking and marine freight carrier that provides freight transportation between the continental U.S., Puerto Rico and the Dominican Republic. BDO USA, LLP, in Miami, Fla., expressed substantial doubt about Trailer Bridge's ability to continue as a going concern. The independent auditors noted that the Company has a significant working capital deficit resulting from the current maturities of long term debt. The Company reported a net loss of $2.3 million on $118.2 million of revenues for 2010, compared with net income of $2.6 million on $114.3 million of revenues for 2009. The Company's balance sheet at June 30, 2011, showed $105.62 million in total assets, $119.54 million in total liabilities, and a $13.92 million total stockholders' deficit. Bankruptcy Warning If the Company's cash flow and capital resources are insufficient to fund its debt service obligations, including refinancing the Notes due Nov. 15, 2011, the Company could face substantial liquidity problems and might be forced to reduce or delay capital expenditures, dispose of material assets or operations, seek to obtain additional equity capital, restructure or refinance its indebtedness. In the event that the Company is required to dispose of material assets or operations to meet its debt service obligations, the Company said it cannot be sure as to the timing of those dispositions or the proceeds that it would realize from those dispositions. Further, the Company said it cannot provide assurance that it will be able to restructure or refinance any of its indebtedness or obtain additional financing, given the uncertainty of prevailing market conditions from time to time. Such alternative measures may not be successful and may not permit the Company to meet its scheduled debt service obligations. In such an event, the Company may be forced to file for protection under federal bankruptcy laws. If the Company is able to restructure or refinance its indebtedness or obtain additional financing, the Company anticipates that the economic terms on which such indebtedness is restructured, refinanced or obtained will not be as favorable to the Company as its current indebtedness and may include an equity component that could include a change of control. * * * As reported by the TCR on May 25, 2011, Moody's Investors Service downgraded Trailer Bridge, Inc.'s Corporate Family and Probability of Default ratings two notches to Caa2 from B3. The ratings downgrade was prompted by Trailer Bridge's upcoming maturities comprising the majority of the company's debt structure over the next twelve months combined with insufficient liquidity sources to satisfy these obligations absent a refinancing. In the June 15, 2011, edition of the TCR, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Jacksonville, Fla.-based Trailer Bridge Inc. to 'CCC' from 'B-'. "At the same time, we lowered our rating on the company's senior secured debt to 'CCC' (the same as the new corporate credit rating), from 'B-' and revised the recovery rating to '4' from '3', indicating our expectations of an average (30%-50%) recovery in the event of a payment default. The outlook is developing," S&P said. S&P related, "Our ratings on Trailer Bridge reflect its weak liquidity, highly leveraged financial profile, concentrated end- market demand, and participation in the capital-intensive and competitive shipping industry. Positive credit factors include the less-cyclical nature of demand for consumer staples that Trailer Bridge mostly carries and barriers to entry due to the Jones Act (which regulates intra-U.S. shipping). We categorize Trailer Bridge's business risk profile as vulnerable, its financial risk profile as highly leveraged, and liquidity as weak." TRAILER BRIDGE: S&P Lowers Corporate Credit Rating to 'SD' ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Trailer Bridge Inc. to 'SD' from 'CCC' and removed it from CreditWatch, where they were placed with negative implications on Sept. 22, 2011. "At the same time, Standard & Poor's lowered its rating on the company's senior secured notes to 'CC' from 'CCC'. The notes remain on CreditWatch with negative implications," S&P related. The rating actions reflect confidential information that Trailer Bridge has made available to Standard & Poor's regarding its debt obligations. "We lowered our issue rating to reflect imminent refinancing risks and the company's high probability of default, given that the senior secured notes mature on Nov. 15, 2011," said Standard & Poor's credit analyst Funmi Afonja. Under the terms of the company's credit agreement on its senior secured debt, failure to refinance the senior secured notes by Oct. 15, 2011, is an event of default. However, on Oct. 24, 2011, the company entered into a forbearance agreement with its senior secured debt holders, who have agreed not to exercise their rights and remedies, including acceleration of payments due under the senior secured debt, until Oct. 31, 2011. TRANS ENERGY: Amends 1st Qtr. Financials to Add Expense ------------------------------------------------------- On Oct. 25, 2011, Trans Energy, Inc., filed Amendment No. 1 to its quarterly report on Form 10-Q for the quarter ended March 31, 2011, which was filed with the Securities and Exchange Commission on June 16, 2011. Item 1. ? Financial Statements is being amended to: -- Increase current liabilities and accumulated deficit by $245,219 for expenses associated with sale of acreage; -- Decrease the gain on sale line item on the Consolidated Income Statement by $245,219 for expenses associated with acreage sale and adjust earning per share; -- Update Consolidated Statement of Stockholders' Equity; -- Update Consolidated Statements of Cash Flow for expenses associated with sale of acreage; -- Update Notes to Consolidated Financial Statements for expenses associated with sale of acreage; -- Update Item 2. for expenses associated with sale of acreage; The Company reported net income of $11.5 million on $1.6 million of revenues for the three months ended March 31, 2011, compared with a net loss of $1.2 million on $1.1 million of revenue for the same period during the prior year. This change from a net loss to a net profit is primarily due to the sale of certain acreage assets and also an increase in revenues. The Company's balance sheet at March 31, 2011, showed $60.6 million in total assets, $31.5 million in total liabilities and $29.1 million in total stockholders' equity. Trans Energy has incurred cumulative operating losses through March 31, 2011, of $9,260,970. At March 31, 2011, Trans Energy had a stockholders' equity of $29,103,399 and a working capital deficit of $13,552,853, including its note payable which is due on March 31, 2012. Revenues during the three months ended March 31, 2011, were not sufficient to cover its operating costs. "Because of our historical losses, limited working capital, and need for additional funding, there is substantial doubt about our ability to continue as a going concern." A full-text copy of the Form 10-Q/A is available for free at: http://is.gd/HjYr7v St. Mary's, West Virginia-based Trans Energy, Inc. (OTC BB: TENG) -- http://www.transenergyinc.com/-- is an independent energy company engaged in the acquisition, exploration, development, exploitation and production of oil and natural gas. Its operations are presently focused in the State of West Virginia. TRENTON LAND: Hearing on Case Dismissal Plea Adjourned to Nov. 2 ---------------------------------------------------------------- The Hon. Thomas J. Tucker of the U.S. Bankruptcy Court for the District of Michigan has adjourned the hearing scheduled for Oct. 12, 2011, to Nov. 2, 2011, at 11:00 a.m., to consider the motion to dismiss the Chapter 11 case of Trenton Land Holdings, LLC. The Debtor, Wayne County Treasurer and Riverview-Trenton Railroad Company entered into a stipulation adjourning the hearing to consider motion to dismiss the Debtor's case. As reported in the Troubled Company Reporter on Sept. 19, 2011, the Debtor asked the Court to dismiss its Chapter 11 case. In light of the absence of cash available to the Debtor, any fees of the Debtor's counsel will be paid by non-debtor "insiders." The TCR reported that the Debtor has not had its own cash flow. Essential operating expenses and payments to the Wayne County Treasurer have been paid directly by the "insiders" of the Debtor. Wayne County Treasurer is represented by: Leonora K. Baughman, Esq. KILPATRICK & ASSOCIATES, P.C. 615 Griswold, Suite 1004 Detroit, MI 48226 Tel: (313)-963-2581 E-mail: ecf@kaalaw.com Riverview-Trenton Railroad Company is represented by: John T. Piggins, Esq. MILLER JOHNSON 250 Monroe Ave N.W., Suite 800 P.O. Box 306 Grand Rapids, MI 49501 Tel: (616) 831-1793 Fax: (616) 988-1793 E-mail: pigginsj@millerjohnson.com About Trenton Land Holdings, LLC, Trenton, Michigan-based Trenton Land Holdings, LLC, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Mich. Case No. 10- 60990) on June 29, 2010. Karin F. Avery, Esq., at Silverman & Morris, P.L.L.C., assists the Debtor in its restructuring effort. The Company disclosed $16,726,075 in assets and $65,925,596 in liabilities. TWIN CITY: Wants Access to Associated Bank's Cash Collateral ------------------------------------------------------------ Twin City Bagel, Inc., dba National Choice Bakery and Lev Bakery, Inc., ask the U.S. bankruptcy Court for the District of Minnesota for authorization use the cash collateral until Dec. 30, 2011. The Debtors' principal lender, Associated Bank, National Association, appears to have a lien in cash collateral by virtue of a security agreement dated Feb. 27, 2008, and financing statements filed with the Minnesota Secretary of State on Feb. 27, 2008, as to Lev and Oct. 14, 2002, as to TCB. Associated claims that approximately $8.6 million is owed to it by the Debtors. In addition, Associated is in possession of some of the Debtors' cash collateral which was in a lock box on the petition date. The Debtors request that that cash collateral be turned over to the Debtors for deposit into the Debtors' DIP account. The Debtors will use the cash collateral to meet the ordinary expenses of operating the Debtors' business. The Debtors propose to adequately protect the interests of Associated by granting replacement liens on inventory and accounts purchased or generated after the petition date. Associated Bank's Objection On Sept. 28, Associated Bank filed its objection to the Debtors' motion for cash collateral use, stating that, among other things: -- TCB and Lev owe the bank in excess of $7,000,000; -- contrary to the allegations contained in the Debtors' motions, the Debtors are in default of their payment obligations to the bank. All of the debt matured and became due and payable in full on July 6, 2011. The Debtors failed to pay the debt as required by the terms of the loan documents. The Debtors decided to file for bankruptcy after they rejected the terms of a forbearance agreement proposed by the bank which would have run through Dec. 31, 2011. The debt is secured by perfected, first-priority security interests in favor of the bank on all assets of TCB and Lev, including inventory, accounts receivable, and proceeds thereof, including cash and cash equivalents. The bank is not protected by an equity cushion. -- contrary to the Debtors' assertions, the combined value of the Debtors' cash, accounts receivable, and inventory deteriorate between the Petition Date and Oct. 19, 2011. -- the Debtors are proposing to pay a prepetition payroll tax in the amount of $62,000 and no legal grounds exist for such payment. -- the proposed orders submitted by the Debtors provide for replacement liens on cash assets, which is not a defined term. The bank submits that any order authorizing the Debtors' use of cash collateral must include, among other things: a. a provision which requires TCB an Lev to comply with local bankruptcy Rule 4001-2; b. a provision which terminates TCB's and Lev's authority to use cash collateral at any time that TCB fails to maintain the Petition Date values of its cash, inventory, and accounts receivable; c. a provision which requires each Debtor to segregate and account for the bank's cash collateral, as required by section 363(c)(4) of the Bankruptcy Code; and d. a provision which requires the Debtors to provide the Bank with reasonable access to its collateral and the Debtors for purposes of inspection, audit, and appraisal. Associated Bank is represented: Daniel C. Beck, Esq. WINTHROP & WEINSTINE, P.A. 225 South Sixth Street, Suite 3500 Minneapolis, MN 55402-4629 Tel: (612) 604-6400 E-mail: dbeck@winthrop.com About Twin City Bagel, Inc. Twin City Bagel, Inc., filed a Chapter 11 petition (Bankr. D. Minn. Case No. 11-36042) in St. Paul, Minnesota, on Sept. 27, 2011. Judge Dennis D. O'Brien presides over the case. Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath Nauman, in Minneapolis, Minnesota, represents the Debtor as counsel. The Company disclosed $4,026,877 in assets and $4,561,754 in liabilities as of the Chapter 11 filing. Affiliate Lev Bakery, Inc., filed a separate Chapter 11 petition (Bankr. D. Minn. Case No. 11-36044) on Sept. 27, 2011. Habbo G. Fokkena, the U.S. Trustee for Region 12 appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Twin City Bagel. TWIN CITY: U.S. Trustee Protests Request to Employ Ravich Meyer --------------------------------------------------------------- Habbo G. Fokkena, United States Trustee Region 12, objects to the employment of Ravich Meyer Kirkman McGrath Nauman & Tanseyas counsel proposed by Twin City Bagel Inc. and Lev Bakery Inc. in the U.S. Bankruptcy Court for the District of Minnesota. According to the U.S. Trustee, full schedules and statements, and plan or disclosure statement have not been filed by either Debtor. The Debtors have not had their cases substantively consolidated, but have filed a motion seeking joint administration. The U.S. Trustee tells the Court that the firm cannot hold or represent an interest adverse to the estate. Lev Bakery owes Twin City Bagel $3.6 million. The representation of one of the two Debtors would create an adverse representation that would preclude the representation of the other Debtor. Twin City Bagel, Inc., filed a Chapter 11 petition (Bankr. D. Minn. Case No. 11-36042) in St. Paul, Minnesota, on Sept. 27, 2011. Judge Dennis D. O'Brien presides over the case. Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath Nauman, in Minneapolis, Minnesota, represents the Debtor as counsel. The Debtors listed $4,026,877 in assets, and $4,561,754 in liabilities. Affiliate Lev Bakery, Inc., filed a separate Chapter 11 petition (Bankr. D. Minn. Case No. 11-36044) on Sept. 27, 2011. TWIN CITY: Wants to Hire Froehling Anderson as Accountant --------------------------------------------------------- Twin City Bagel Inc. and Lev Bakery Inc. ask the U.S. Bankruptcy Court for the District of Minnesota for authority to employ Froehling Anderson Ltd. as accountant to assist the Debtors with the completion of a pending audit by the Internal Revenue Service. The firm will bill between $150 and $300 per hour for services rendered. The Debtors assure the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Twin City Bagel, Inc., filed a Chapter 11 petition (Bankr. D. Minn. Case No. 11-36042) in St. Paul, Minnesota, on Sept. 27, 2011. Judge Dennis D. O'Brien presides over the case. Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath Nauman, in Minneapolis, Minnesota, represents the Debtor as counsel. The Debtor listed $4,026,877 in assets and $4,561,754 in liabilities. Affiliate Lev Bakery, Inc., filed a separate Chapter 11 petition (Bankr. D. Minn. Case No. 11-36044) on Sept. 27, 2011. TWIN CITY: Wants to Hire Ravich Meyer as Attorney ------------------------------------------------- Twin City Bagel Inc. and Lev Bakery Inc. ask the U.S. Bankruptcy Court for the District of Minnesota for authority to employ law firm of Ravich Meyer Kirkman McGrath Nauman & Tansey as its attorney to represent the Debtors in connection with all matters relating to the discharge of their responsibilities as debtor-in- possession in this Chapter 11 case. The attorneys and paralegal that will provide these services and their hourly rates: Michael L. Meyer $450 Michael F. McGrath $375 Will Tansey $305 Paralegal $150 The Debtors assure the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Twin City Bagel, Inc., filed a Chapter 11 petition (Bankr. D. Minn. Case No. 11-36042) in St. Paul, Minnesota, on Sept. 27, 2011. Judge Dennis D. O'Brien presides over the case. Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath Nauman, in Minneapolis, Minnesota, represents the Debtor as counsel. The Debtor listed $4,026,877 in assets and $4,561,754 in liabilities. Affiliate Lev Bakery, Inc., filed a separate Chapter 11 petition (Bankr. D. Minn. Case No. 11-36044) on Sept. 27, 2011. TX BLACKHORSE: Seeks to Employ Thomas Greene as Counsel ------------------------------------------------------- TX Blackhorse, L.P., seeks permission from Judge Letitia Z. Paul of the U.S. Bankruptcy Court for the Southern District of Texas to employ Thomas B. Greene, III, Esq., as its counsel, effective as of December 29, 2010. As the Debtor's counsel, Mr. Greene will: (a) provide legal advice with respect to its rights and duties as a debtor-in-possession and in the continued operation of its business and management of its properties; (b) assist, advise and represent the Debtor in analyzing the capital structure of Debtor, investigating the extent and validity of liens, cash collateral stipulations or contested matters; (c) assist, advise and represent the Debtor in postpetition financing transactions; (d) assist, advise and represent the Debtor in the formulation of a disclosure statement and a plan of reorganization and to assist Debtor in obtaining confirmation and consummation of a plan of reorganization; (e) assist, advise and represent Debtor in any manner relevant to preserving and protecting Debtor's estate; (f) investigate and prosecute preference, fraudulent transfer and other actions arising under the Debtor's bankruptcy avoiding powers; (g) institute objections to proofs of claim asserted against the Debtor's estate, and to prosecute all contested objections to proofs of claim asserted against the Debtor's estate; (h) prepare on behalf of the Debtor all necessary applications, motions, answers, orders, reports, and other legal papers; (i) appear in Court and to protect the interests of the Debtor before the Court; (j) assist the Debtor in administrative matters; (k) perform all other legal services for the Debtor which may be necessary and proper in these proceedings; (l) assist, advise and represent Debtor in any litigation matter; and (m) provide other legal advice and services, as requested by the Debtor from time to time. The Debtor will pay Mr. Greene according to his customary hourly rate of $300. Mr. Greene will also be reimbursed for expenses to be incurred. Mr. Greene discloses that before the Petition Date, he received $5,000 from the Debtor for legal services rendered or to be rendered to the Debtor in connection with the Chapter 11 case, which included the filing fees of $1,039. Mr. Greene expects all future fees to be paid by the Debtor from Debtor's funds with Court approval. Mr. Greene maintains that he is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. In response, Judy A. Robbins, the U.S. Trustee for Region 7, asserts that because the Debtor's Application is made more than 30 days after the professional commenced providing services, the application must meet the requirements set forth for nunc pro tunc applications in Rule 2014-1(b) of Local Rules for the U.S. Bankruptcy Court for the Southern District of Texas. About TX Blackhorse Tempe, Arizona-based TX Blackhorse L.L.P., a limited partnership, is the owner of an undeveloped tract of land consisting of approximately 630 acres in Texas City, Galveston County, Texas. The Debtor's general partner is CW LT Management, L.L.C., of Tempe, Arizona, which owns 1% of the Debtor. John Cork, also of Tempe, Arizona, the manager of the general partner, owns 88% of the Debtor as limited partner. Emilie Cork and Nathan Cork own 5% limited partner interests respectively. The Debtor filed for Chapter 11 bankruptcy protection on Dec. 29, 2010 (Bankr. S.D. Tex. Case No. 10-80760). Thomas Baker Greene, III, Esq., at the Law Office of Thomas B. Greene III, in Houston, serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $19,100,280 in assets and $13,262,621 in liabilities as of the petition date. URBAN BRANDS: Court Confirms Plan of Liquidation ------------------------------------------------ Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware confirmed the Plan of Liquidation of UBI Liquidating Corp. and its affiliated debtors. In an order dated Oct. 19, 2011, the Court found that the Plan satisfies all the elements required for confirmation by Section 1129 of the Bankruptcy Code. Each term and provision of the Plan is valid, binding and enforceable, the Court ruled. Objections to confirmation of the Plan that have not been withdrawn are overruled, the Court ordered. Moreover, the Court approved the Liquidating Trust Agreement, which provides for the formation of the Liquidating Trust under the Plan. Stephen A. Feldman is appointed as Liquidating Trustee. As reported in the Aug. 30, 2011, edition of the Troubled Company Reporter, the Plan divides the various classes and interests against and in the Debtors into 5 classes. Class 1 Bank of America Secured Lender Claims, Class 2 Other Secured Claims, and Class 3 Priority Non-Tax Claims are to paid in full under the Plan. Class 4 General Unsecured Claims are estimated to have a 3% to 7% recovery on their claims, while Class 5 Equity Interests will be cancelled on the Plan Effective Date. A copy of the Disclosure Statement dated July 20, 2011, is available at: http://bankrupt.com/misc/urbanbrands.DS.pdf About Urban Brands Urban Brands, Inc., owed and retail stores under the Ashley Stewart brand name, a nationally recognized brand for plus sized urban women. It sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-13005) on Sept. 21, 2010. The Company estimated assets of $10 million to $50 million and debts of $100 million to $500 million in its Chapter 11 petition. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul N. Heath, Esq., at Richards, Layton Finger, P.A., in Wilmington, Delaware, serve as counsel to the Debtors. BMC Group, Inc., is the claims and notice agent. The DIP Lender is represented by Donald E. Rothman, Esq., at Riemer & Braunstein LLP. As reported by the Troubled Company Reporter on Oct. 29, 2010, Urban Brands received Court permission to sell its business for $16.67 million to an affiliate of Gordon Brothers Group LLC. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that Gordon Brothers told the judge it would operate at least 175 of the 210 stores. Gordon Brothers would serve as Urban Brands' agent to run going-out-of-business sales at the locations it won't buy. Mr. Rochelle said the price to be paid by Gordon Brothers is subject to downward adjustment. The ultimate price can't be less than $6 million plus the amount necessary to pay off funding for the Chapter 11 case. The Debtor has been renamed UBI Liquidating Corp., et al., following the sale. In October 2010, the U.S. Trustee appointed seven entities to the Committee of Unsecured Creditors -- Angel Made in Heaven, Inc.; Natural Collection Corp.; Signsource, Inc.; Rosenthal & Rosenthal, Inc.; GGP Limited Partnership; Simon Property Group, Inc.; and International Inspirations, Ltd. The Committee is represented by Cooley LLP as lead counsel and Loughlin Meghji + Company as financial advisor. US FT: S&P Assigns Preliminary 'B' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services assigned a preliminary 'B' corporate credit rating to Jersey City, N.J.-based US FT Holdco Inc. (Fundtech). The outlook is stable. "At the same time, we assigned a preliminary 'B+' rating to the company's proposed $25 million senior secured revolving credit facility due 2016 and the $200 million first-lien term loan due 2017. The preliminary recovery rating is '2', indicating our expectation for substantial (70% to 90%) recovery of principal in the event of payment default," S&P related. Fundtech will use proceeds from the facilities for the acquisition and merger of Israel-based, publicly traded Fundtech Ltd. and Las Vegas-based Bserv Inc. (BankServ), the latter owned by private- equity firm GTCR LLC. A $50 million subordinated loan (unrated) will provide additional funding along with cash on hand and common equity. "Our ratings on Fundtech reflect its highly leveraged financial profile, which an improved market position and cost reduction opportunities partly offset," said Standard & Poor's credit analyst Martha Toll-Reed. Fundtech provides global payments and financial messaging (more than 60% of pro forma total revenues), and cash management and other solutions to financial institutions and corporations. Pro forma combined revenues for the 12 months ended June 2011 were in excess of $200 million. VAN HUNTER: Frost National's Plan Outline Hearing Set for Nov. 14 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Texas will convene a hearing on Nov. 14, 2011, at 10:30 a.m., to consider adequacy of the Plan of Liquidation for Van Hunter Development, Ltd., proposed by The Frost National Bank and Corey Van Trease. Frost is a secured lender of Van Hunter. Ten lots of the Debtor's residential real properties in Flower Mound, Texas, are subject to Frost's secured claim while one remaining lot is unencumbered. As reported in the Troubled Company Reporter on Sept. 22, 2011, the Plan dated Sept. 16, 2011, contemplated the liquidation of all property of the Debtor. Within 14 days of the order confirming the Plan becoming a final order, the Debtor will close on the sale of its properties to JBGL Capital LP unless a higher and better offer comes up. In such event, the Debtor will hold an auction where JBGL will be considered the stalking horse offer, the initial overbid will be $2.95 million, and JBGL will be entitled to a $150,000 break-up fee. Under the Plan, a $75,000 retainer the Debtor placed with its bankruptcy counsel will be used to satisfy administrative claims in the Debtor's case. The proceeds of Frost's collateral will be used to satisfy closing costs and property taxes secured by such property with the remainder paid to Frost. The remainder of the retainer, the net proceeds of the sale of the Debtor's unencumbered lot remaining after closing costs and taxes, and the proceeds of the liquidation of all other property of the Debtor will be used to satisfy the Allowed IRS Claim and the remainder will be distributed to general unsecured creditors up to 100% of their claim. The Debtor's equity holders will receive no value or distribution until all other classes are paid in full. The Plan does not contemplate the Debtor continuing to operate. Instead, the Debtor will be dissolved after liquidating its property and completing all other actions under the Plan. A full-text copy of the Frost Plan is available for free at: http://bankrupt.com/misc/VANHUNTER_FrostPlanSept16.PDF Debtor Withdraws Own Disclosure Statement The Debtor, on the other hand, notified the Court on Sept. 15 that it is withdrawing the disclosure statement explaining its proposed plan of reorganization dated May 13, 2011. As reported in the Troubled Company Reporter on June 1, 2011, the Debtor's Plan contemplates that Gary Evans, the principal of one of the Debtor's partners, will be contributing sufficient capital to pay off all of the Debtor's debt obligations to its various secured creditors, unsecured creditors and the taxing authorities in full. The Debtor has one unencumbered lot, which will be returned to Compass Bank in return for a credit as set forth in the Plan. The hearing to consider adequacy of the Debtor's disclosure statement was previously continued to Sept. 19. About Van Hunter Development, Ltd. Dallas, Texas-based Van Hunter Development, Ltd, filed for Chapter 11 bankruptcy (Bankr. E.D. Texas Case No. 10-40052) on Jan. 4, 2010. Singer & Levick, P.C., in Addison, Texas, serve as general bankruptcy counsel. In its schedules, the Debtor disclosed $16,378,784 in assets and $15,294,367 in liabilities as of the petition date. WASHINGTON LOOP: ROBI1956 Has Limited Objection to Plan Outline --------------------------------------------------------------- Creditor, ROBI1956, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Florida, a limited objection to the Amended Disclosure Statement explaining Washington Loop, LLC's Plan of Reorganization dated Sept. 8, 2011. According to ROBI, the Disclosure Statement, among other things: -- would require additional information on the proposed manager of the Debtors' business operations, and no facts are disclosed regarding the experience of the proposed manager; -- do not show that the Plan is feasible because the means of implementing the Plan contains no operating history with income and expense analysis; -- contains no historical data showing the operational experience of the Debtor over the past three years so that an informed analysis of the operating pro forma can be sufficiently analyzed. ROBI filed the objection out an abundance of caution to preserve its rights. The Chapter 11 Trustee has agreed to supply the missing information and other information identified by ROBI and its affiliates so that the Debtor's business operations and the Plan can be analyzed, and ROBI anticipates that the information will be forthcoming. As reported in the Troubled Company Reporter on Sept. 30, 2011, the Plan contemplates that post-confirmation, the Reorganized Debtor will continue to be managed by Lovina Lehr, who has been managing the Debtor for the past four years. The Debtor's property located in Charlotte County, Florida, has a current fair market value as a going concern of approximately $41 million to $45 million based on an appraisal which was conducted by Gillott Appraisal Services, Inc. Accordingly, each of the Mortgage Holders is fully secured and will be paid in full on account of their Allowed Secured Claims as provided under the Plan. The Debtor's Plan also proposes payment on account of those claims held by various taxing authorities, creditors whose claims are secured by personal property of the Debtor, creditors whose claims are unsecured, and insiders or affiliates of the Debtor. After the Bankruptcy Court's anticipated approval of a $3.25 million postpetition credit facility, the Debtor will be able to purchase equipment which will enable the Debtor to grow its monthly income from operations from its current level of approximately $51,000 per month to an average of over $400,000 per month in the first quarter of 2012. As a result, the Debtor anticipates that it will be readily able to satisfy its obligations in the Plan. A copy of the Disclosure Statement, as amended, is available for free at http://ResearchArchives.com/t/s?770b ROBI1956, LLC is represented by: Andrew C. Ozete, Esq. BAMBERGER, FOREMAN, OSWALD & HAHN, LLP 20 NW Fourth Street, Suite 708 Post Office Box 657 Evansville, IN 47704-0657 Tel: (812) 425-1591 E-mail: aozete@bamberger.com About Washington Loop Punta Gorda, Florida-based Washington Loop, LLC, operates an aggregate mine in Charlotte County, Florida. The Company owns two parcels of real property and improvements -- the Loop Property and the Mirror Lakes Property -- which, together, comprise roughly 474 adjoining acres in Punta Gorda, Charlotte County. The Company filed for Chapter 11 bankruptcy protection on March 31, 2011 (Bankr. M.D. Fla. Case No. 11-06053). Judge Jeffery P. Hopkins presides over the case. Steven M. Berman, Esq., and Hugo S. deBeaubien, Esq., at Shumaker, Loop & Kendrick, LLP, in Tampa, Fla., represent the Debtor as counsel. The Debtor disclosed $45,098,259 in assets and $19,703,694 in liabilities as of the Chapter 11 filing. The Debtor was dismissed from a prior Chapter 11 case (Case No. 10-27981) by order of the Court entered on March 17, 2011. In the prior Chapter 11 case, the Debtor's Schedule F, as filed under penalty of perjury, listed some 34 general unsecured creditors totaling claims of $1,953,354. All Schedule F debts were listed as non-contingent, liquidated, and undisputed. The Debtor now declares that all Schedule F debts are unliquidated. These schedules were filed no less than two weeks after the dismissal of the prior Chapter 11 case, and only six weeks after the Debtor filed its Schedule F in that case. Don Walton, the United States Trustee for Region 21, and Charles A. Robinson Living Trust, creditor and interest holder against Washington Loop, filed separate requests to convert the Debtor's 2011 Chapter 11 reorganization case to Chapter 7 liquidation. Washington Loop filed with the Court a Chapter 11 plan and an explanatory disclosure statement on Aug. 18, 2011. The Troubled Company Reporter published a summary of the Plan in its Sept. 6, 2011 edition. The Plan is a reorganization plan accomplished through the continuation of the Debtor's primary business: the mining of the 750-acre property in Punta Gorda, Florida. The Debtor seeks to accomplish payment under the Plan primarily from the proceeds of the sale of mining materials and or the refinance of the Washington Loop Property. The Plan proposes to pay secured creditors -- ROBBIE, Mirror Lakes V, Mike Treworgy and Wells Fargo Equip Finance -- the present value of their claim at a market interest rate over an 84-month period through net income generated from the mining operation and through a sale or refinance of the Washington Loop Property. The Effective Date of the proposed Plan is Dec. 15, 2011. The first payment due under the plan is Jan. 15, 2012. Allowed Class 8 General Unsecured Claims will receive 100% of their allowed claim on or before the 84th month following the Effective Date. A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?76c8 WASHINGTON MUTUAL: Equity Panel Can Hire Frank Partnoy as Adviser ----------------------------------------------------------------- Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware permitted the Official Committee of Equity Security Holders of Washington Mutual, Inc., and its debtor affiliates to employ Frank Partnoy as its securities litigation consultant, nunc pro tunc to June 29, 2011. As the Equity Committee's advisor, Mr. Partnoy has provided and will provide advice to the Equity Committee and its professionals in connection with various corporate and securities issues raised by the Equity Committee's objection to the Debtors' Modified Sixth Amended Plan. Specifically, Mr. Partnoy has analyzed pricing of the Debtors' securities and trading patterns for certain of the major creditors that are relevant to allegations of insider trading raised by the Equity Committee. Mr. Partnoy will be paid according to his customary hourly rate of $850. In addition to the hourly rate, Mr. Partnoy charges a retainer fee of $40,000, which is intended to compensate him for having to set aside essentially all other responsibilities for the period from his retention though the Plan confirmation hearing. Mr. Partnoy will also be reimbursed for expenses incurred. Mr. Partnoy maintains that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. On Jan. 7, 2011, the Bankruptcy Court entered a 107-page opinion determining that the global settlement agreement, among certain parties including WMI, the Federal Deposit Insurance Corporation and JPMorgan, upon which the Plan is premised, and the transactions contemplated therein, are fair, reasonable, and in the best interests of WMI. However, the Opinion and related order denied confirmation, but suggested certain modifications to the Company's Sixth Amended Joint Plan of Affiliated Debtors that, if made, would facilitate confirmation. WaMu filed a Modified Sixth Amended Joint Plan and a related Supplemental Disclosure Statement, which it believes would address the Bankruptcy Court's concerns. On Sept. 13, 2011, Judge Walrath denied confirmation of WaMu's Modified Sixth Amended Plan and granted equity committee standing to prosecute claims for equitable disallowance but stayed the ruling pending mediation. WaMu said it would seek confirmation of a revised plan "as soon as practicable." The Plan proposes to pay more than $7 billion to creditors and incorporates a global settlement agreement resolving issues among the Debtors, JPMorgan Chase, the Federal Deposit Insurance Corp. in its corporate capacity and as receiver for WaMu Bank, certain large creditors, certain WMB senior noteholders, and the creditors' committee. The Settlement Noteholders are Appaloosa Management, L.P., Aurelius Capital Management LP, Centerbridge Partners, LP, and Owl Creek Asset Management, L.P. WAVE HOUSE: Seeks to Borrow $500,000 Postpetition Financing ----------------------------------------------------------- Wave House Belmont Park, LLC seeks permission from Judge Laura S. Taylor of the U.S. Bankruptcy Court for the Southern District of California to borrow up to $500,000 in postpetition financing from Kathleen Lochtefeld. The purpose of the postpetition financing is to allow the Debtor to proceed with a pending adversary action against the City of San Diego captioned Wave House Belmont Park, LLC v. The City of San Diego. Ms. Lochtefeld's loan is to be secured by the proceeds from the adversary action. To the extent that secured creditor East West Bank may have a secured interest in the proceeds via a Security Agreement with the Debtor, the Debtor seeks a priming lien benefiting Ms. Lochtefeld. Interest on the outstanding amount will accrue at the rate of 3% per annum. The loan will be due and payable upon conclusion of the Adversary Action. The portion of the Loan to be used to fund legal fees and U.S. trustee fees to be incurred in this Chapter 11 case cannot exceed $200,000. The remaining $300,000 will be used by the Debtor to prosecute the Adversary Action. Counsel to the Debtor, John L. Smaha, Esq., at Smaha Law Group, APC, in San Diego, California, relates that the anticipated value of the litigation asset is Debtor's main avenue in pursuing its continuation as a going concern and in proposing a viable, non- liquidating plan of reorganization. Unless the Adversary Action is prosecuted, it will not be available to pay claims against the estate, he stresses. The Debtor strongly believes that the City's actions were in bad faith and that any termination of the litigation in its favor will mean a significant infusion of cash to the estate, with an estimated amount of $25,000,000, including damages associated with the failure of the City to fulfill its contractual obligations and all associated loss of business opportunity, he maintains. The Court held a hearing on October 7, 2011, originally scheduled for September 15, 2011, with respect to the DIP Motion. On October 14, 2011, the Debtor filed with the Court a proposed order granting the DIP Motion. San Diego, California-based Wave House Belmont Park, LLC, filed for Chapter 11 bankruptcy protection (Bankr. S.D. Calif. Case No. 10-19663) on Nov. 3, 2010. John L. Smaha, Esq., at Smaha Law Group, APC, assists the Debtor in its restructuring effort. Wave House, the company that operates the San Diego amusement area Belmont Park, filed for bankruptcy protection after the city imposed an eightfold increase in rent, Dow Jones' Small Cap reported early November. The Debtor disclosed $28,327,703 in assets and $17,611,057 in debts. WAVE HOUSE: Seeks Approval of East West Bank Settlement Agreement ----------------------------------------------------------------- Wave House Belmont Park, LLC seeks permission from Judge Laura S. Taylor of the U.S. Bankruptcy Court for the Southern District of California to enter into a settlement agreement with secured creditor East West Bank. On the Petition Date, the Debtor's primary asset was a ground lease with the City of San Diego for the real property and improvements thereon generally described as 3106-3146 Mission Boulevard and 3105-3125 Ocean Front Walk, San Diego, California 92109, which parcel of property is located at Mission Bay and generally known as "Belmont Park". The balance due EWB as of the Petition Date was the approximate sum of $16,507,623, plus accrued and accruing interest, costs, and attorneys' fees. Any interest of Debtor's bankruptcy estate in the Lease was rejected effective July 2, 2011 pursuant to Section 365(d)(4) of the Bankruptcy Code. The Bankruptcy Court granted EWB relief from the automatic stay as to all assets of the Debtor, excluding the Debtor's prepetition accounts receivable and Debtor's claims and causes of action against the City. Against this backdrop, the Settlement Agreement resolves the balance of EWB's motion for relief from the automatic stay, and forms the basis for a Chapter 11 liquidating plan. On July 13, 2011, EWB filed an action in the San Diego Superior Court against Debtor and others, seeking appointment of a receiver for the Property and judicial foreclosure. On July 22, 2011, the Superior Court appointed Kenneth A. Krasne as receiver for the Property. As of the Petition Date, the Debtor had subleased a substantial portion of the Real Property to various third parties who operate various businesses at the Real Property, and subleased other parts of the Real Property to certain affiliates of Debtor, particularly Wave House Athletic Club, LLC and Wave House San Diego, LLC. The Settlement Agreement will resolve all remaining issues in the Debtor's bankruptcy case related to East West Bank and the related relief from the stay action. It will also resolve certain claims of EWB, Debtor, WHAC and WHSD regarding the Debtor's assets under Schedule "B" of the Schedules of Assets and Liabilities, ongoing operations of the athletic club and food and entertainment venues, and other claims. The Settlement Agreement resolves any objections of EWB concerning the DIP Financing Motion, and EWB's security interest in the Debtor's lawsuit against the City. A full-text copy of the East West Settlement is available for free at http://bankrupt.com/misc/WAVEHOUSE_EastWestBankSettlement.pdf The Bankruptcy Court held a hearing on October 7, 2011 with respect to the East West Settlement Motion. East West Bank is represented by: David M. Poitras, Esq. JEFFER MANGELS BUTLER & MITCHELL LLP 1900 Avenue of the Stars, Seventh Floor Los Angeles, California 90067-4308 Tel: (310) 203-8080 Fax: (310) 203-0567 E-mail: dpoitras@jmbm.com San Diego, California-based Wave House Belmont Park, LLC, filed for Chapter 11 bankruptcy protection (Bankr. S.D. Calif. Case No. 10-19663) on Nov. 3, 2010. John L. Smaha, Esq., at Smaha Law Group, APC, assists the Debtor in its restructuring effort. Wave House, the company that operates the San Diego amusement area Belmont Park, filed for bankruptcy protection after the city imposed an eightfold increase in rent, Dow Jones' Small Cap reported early November. The Debtor disclosed $28,327,703 in assets and $17,611,057 in debts. WILLIAM SWITZER: Hearing on Ch. 15 Case Dismissal Set for Nov. 2 ---------------------------------------------------------------- The Hon. Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on Nov. 2, 2011, (prevailing Eastern Time) at 9:45 a.m., to consider PricewaterhouseCoopers, Inc.'s motion to close the Chapter 15 case of William Switzer & Associates, Ltd. Objections were due Oct. 26, 2011. PricewaterhouseCoopers, Inc., in its capacity as the monitor of the Debtor, authorized by the Supreme Court of British Columbia, Canada, and appointed by a consent to act in accordance with the CCAA, explained that with the sale closed and the Canadian Proceeding complete, there is no further activity anticipated in this Chapter 15 case. PwC related that title to all the Debtor's assets was transferred to a new entity controlled and created by 091 (Newco) under the sale order and there are no remaining assets in the United States to be administered. Accordingly, the monitor believed that the proceeding has been fully administered as contemplated by Bankruptcy Code section 350(a) and must be closed without prejudice. PwC is represented by: Yann Geron, Esq. FOX ROTHSCHILD LLP 100 Park Avenue, Suite 1500 New York, NY 10017 Tel: (212) 878-7900 Fax: (212) 692-0940 E-mail: ygeron@foxrothschild.com About William Switzer & Associates, Ltd. Switzer Ltd. is the successor corporation of the family-owned and operated business founded by William Switzer in 1952 as a full- service interior design business. Since 1978, the Switzer Group has evolved into a business specializing in the production of handmade furniture, including bespoke custom furnishings, fine quality reproductions, original house designs, the Lucien Rollin Collection and the Charles Pollock collection. Switzer Group furniture is found in many exclusive homes and hotels world-wide. Recognizing its financial difficulties, the Switzer Group retained the services of PwC to help it address establish a plan for restructuring. The Switzer Group also retained restructuring counsel at Davis LLP in Canada and Fox Rothschild LLP in the United States to assist with a restructuring the business. Despite having worked with these experienced parties to avoid a court-supervised process since mid-February 2011, the demands of the landlords in the United States and Canada have made it necessary to go forward with formal court proceedings. On May 13, 2011, the Honorable Madame Justice Gropper of the Supreme Court of British Columbia, entered an initial order commencing the Switzer Group's restructuring in Canada under the CCAA. PwC, on behalf of Switzer Ltd., sought creditor protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 11-12449) on May 20, 2011. A copy of the Chapter 15 case summary is in the May 24 edition of the Troubled Company Reporter. According to papers filed in U.S. Bankruptcy Court, Switzer Ltd. has taken further steps to reduce its surplus inventory, including conducting a liquidation sale of showroom pieces through Maynards Industries. It is anticipated that in a restructuring proceeding, Maynards will continue to play a key role in liquidating excess inventory to realize substantial cash being tied up therein, and to allow the Switzer Group's management to focus on restructuring its business. 0910308 B.C. Ltd., a company owned by Renee and Allan Switzer, has agreed to purchase Switzer Ltd.'s building on Cordova Street, in Vancouver, British Columbia at its fair market value of $1,175,000. The Cordova Sale, which has been approved by PwC as a prudent measure in restructuring the Switzer Group, is expected to realize proceeds which will be used to pay down amounts owing to the Bank of Montreal as the secured creditor with a collateral mortgage on the building. This will reduce the obligations of Switzer Ltd. (and the obligations of the other members of the Switzer Group pursuant to their guarantees) and also allow the company to return its focus on its core business. The Switzer Group has total liabilities of roughly $12,365,000. WIRELESS AGE: Finalizes Settlement Deal With Newlook Industries --------------------------------------------------------------- Newlook Industries Corp. disclosed that Wireless Age Communications, Inc. has completed the Settlement Agreement with the receiver and trustee in bankruptcy of Wireless Communications and Wireless Source Distribution Ltd. On Jan. 9, 2009, the date the Wireless Age subsidiaries were placed into receivership, Wireless Communications and Wireless Source had provided unsecured loans to Wireless Age, their direct parent company totaling CAD$8.3 million. Also as of January 9, 2009, Wireless Age had provided a secured loan to Newlook totaling CAD$6.2 million. The Company has recorded a special loss provision to the full extent of the loans provided by the subsidiaries to Wireless Age. Wireless Age entered into the Settlement Agreement with the Trustee on October 2, 2009, pursuant to which Wireless Age agreed to pay Wireless Communications and Wireless Source a total of $750,000 to settle the outstanding debts. The Settlement Agreement has now been completed and third quarter results, due to be released in November, will reflect the gain of over $5 million associated with no longer having to account for the special charge loss provision and for the final settlement of the intercompany loan between the Wireless Age and Newlook. John G. Simmonds, CEO of Newlook stated; "I'm extremely pleased with the finalization of this agreement. It allows the Company to move forward with its current business model and pursue exciting new opportunities". The business of Newlook Industries is restricted to the manufacturing and deployment of Waste Retrieval and Transportation Equipment from the curb side collection and large bin containers of residential and commercial waste to that point wherein it is disposed of or treated for the purpose of converting waste to energy. The company is also engaged in providing services through the various stages of that process, and is actively involved in responding to Request For Proposals from many private companies and all levels of government. Newlook Industries Corp., headquartered in King City, Ontario is a publicly-traded company listed on the Canadian National Stock Exchange (CNSX). About Wireless Age Headquartered in Mississauga, Ontario, Canada, Wireless Age Communications Inc. (OTC BB: WLSA.OB) -- http://www.thewirelessage.com/-- through its 99.7% owned subsidiary, Wireless Age Communications Ltd., is in the business of operating retail cellular and telecommunications outlets in cities in western Canada. The Company, through its other wholly owned subsidiary Wireless Source Distribution Ltd., is in the business of distributing two-way radio products, prepaid phone cards, wireless accessories and various battery and ancillary electronics products in Canada. * * * As reported by the Troubled Company Reporter on April 29, 2009, the receiver for Wireless Age signed a deal to sell the assets in Manitoba and Saskatchewan. The Saskatchewan assets of Wireless Communications and the assets of Wireless Source will be sold to IM Wireless Ltd. for C$7 million. Wireless Communications' Manitoba assets would be sold to MTS Allstream Inc. and 4L Communications Inc. for C$115,000. SaskTel served Wireless Communications and Wireless Source with notice under the Bankruptcy and Insolvency Act in January 2009 and secured a court order to appoint an interim receiver. The receiver expected C$7.65 million to be available after closing with C$1.25 million available for unsecured creditors, before the receiver's fees and after repayment of C$6.4 million to SaskTel. * Ex-Goldman Director Rajat Gupta Charged in Insider Case --------------------------------------------------------- Chapter11Cases.com reports that on Wednesday Rajat Gupta, the highest-ranking corporate executive to become embroiled in a push to root out insider trading, was accused of leaking confidential information while a director at Goldman Sachs and Procter & Gamble. According to Bloomberg BusinessWeek, Mr. Gupta, a former head of global consulting firm McKinsey & Co., was indicted Wednesday today on five counts of securities fraud and one count of conspiracy to commit securities fraud. WSJ says the counts include allegedly leaking details about the companies' financial condition and an investment by Warren Buffett's Berkshire Hathway Inc. to former hedge-fund manager Raj Rajaratnam, who was sentenced earlier this month to serve 11 years in prison for insider trading. * General Atlantic Buys Minority Stake in Oak Hill Advisors ----------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that General Atlantic said Tuesday it has purchased a minority stake in Oak Hill Advisors, a New York-based investment management firm specializing in credit and distressed investments. * TPG Markets Latest $1.5 Billion Special Situations Fund --------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that as TPG Capital LP draws near a close for its $2 billion growth equity fund, the firm is hitting the limited partner circuit marketing its latest credit and special situations fund. * BOOK REVIEW: Performance Evaluation of Hedge Funds ---------------------------------------------------- Edited by Greg N. Gregoriou, Fabrice Rouah, and Komlan Sedzro Publisher: Beard Books Hardcover: 203 pages Listprice: $59.95 Review by Henry Berry Hedge funds can be traced back to 1949 when Alfred Winslow Jones formed the first one to "hedge" his investments in the stock market by betting that some stocks would go up and others down. However, it has only been within the past decade that hedge funds have exploded in growth. The rise of global markets and the uncertainties that have arisen from the valuation of different currencies have given a boost to hedge funds. In 1998, there were approximately 3,500 hedge funds, managing capital of about $150 billion. By mid-2006, 9,000 hedge funds were managing $1.2 trillion in assets. Despite their growing prominence in the investment community, hedge funds are only vaguely understood by most people. Performance Evaluation of Hedge Funds addresses this shortcoming. The book describes the structure, workings, purpose, and goals of hedge funds. While hedge funds are loosely defined as "funds with no rules," the editors define these funds more usefully as "privately pooled investments, usually structured as a partnership between the fund managers and the investors." The authors then expand upon this definition by explaining what sorts of investments hedge funds are, the work of the managers, and the reasons investors join a hedge fund and what they are looking for in doing so. For example, hedge funds are characterized as an "important avenue for investors opting to diversify their traditional portfolios and better control risk" -- an apt characterization considering their tremendous growth over the last decade. The qualifications to join a hedge fund generally include a net worth in excess of $1 million; thus, funds are for high net-worth individuals and institutional investors such as foundations, life insurance companies, endowments, and investment banks. However, there are many individuals with net worths below $1 million that take part in hedge funds by pooling funds in financial entities that are then eligible for a hedge fund. This book discusses why hedge funds have become "notorious as speculating vehicles," in part because of highly publicized incidents, both pro and con. For example, George Soros made $1 billion in 1992 by betting against the British pound. Conversely, the hedge fund Long-Term Capital Management (LTCP) imploded in 1998, with losses totalling $4.6 billion. Nonetheless, these are the exceptions rather than the rule, and the editors offer statistics, studies, and other research showing that the "volatility of hedge funds is closer to that of bonds than mutual funds or equities." After clarifying what hedge funds are and are not, the book explains how to analyze hedge fund performance and select a successful hedge fund. It is here that the book has its greatest utility, and the text is supplemented with graphs, tables, and formulas. The analysis makes one thing clear: for some investors, hedge funds are an investment worth considering. Most have a demonstrable record of investment performance and the risk is low, contrary to common perception. Investors who have the necessary capital to invest in a hedge fund or readers who aspire to join that select club will want to absorb the research, information, analyses, commentary, and guidance of this unique book. Greg N. Gregoriou teaches at U. S. and Canadian universities and does research for large corporations. Fabrice Rouah also teaches at the university level and does financial research. Komlan Sedzro is a professor of finance at the University of Quebec and an advisor to the Montreal Derivatives Exchange. ********* 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 ***